Capital One Financial Corporation · NYSE:COF

Capital One Financial — Q1 2009 Earnings Presentation

15 slides from Capital One Financial's earnings presentation, Apr 21, 2009

  1. Slide 1: First Quarter 2009 Results

    Exhibit 99.2 First Quarter 2009 Results April 21, 2009

  2. Slide 2: Forward looking statements

    Forward looking statements Please note that the following materials containing information regarding Capital One’s financial performance speak only as of the particular date or dates indicated in these materials. Capital One does not undertake any obligation to update or revise any of the informatio

  3. Slide 3: Continuing economic deterioration drove a net loss in the first quarter of 2009

    Continuing economic deterioration and our actions to further fortify the company drove a net loss in the first quarter of 2009 • Net loss from continuing operations of ($87) MM, or $(0.39) per share; Total Company net loss of $(112) MM, or $(0.45) per share – $1.3 B sequential quarter improvement in

  4. Slide 4: The worsening economy drove rising delinquency and loss trends across most of our lending businesses

    The worsening economy drove rising delinquency and loss trends across most of our lending businesses US Card International 10% 10% Managed Net 9% 8.39% 9% Charge-off Rate 8% 7.08% 8% 7.30% 7% 6.26% 6.13% 7% 6.07% 5.90% 5.85% Managed Net 5.84% 5.61% 5.30% 6% Charge-off Rate 6% 4.84% 6.25% 5% 5% 5.08%

  5. Slide 5: The mix of loans continued to shift in Q1

    The mix of loans continued to shift in Q1 Managed Loans (End of Period) Total Company Ending Deposits $B $B $160 $130 $150 $148 $147 $121 10 CCB $120 $140 $110 $109 44 $99 45 $100 $120 44 Bank $92 $88 $90 $83 $100 11 $80 9 8 Int’l $70 $80 25 21 21 Auto $60 $60 $50 $40 $40 67 71 $30 67 Card $20 $20 $

  6. Slide 6: Margins declined as compared to both the sequential quarter and the prior year quarter

    Margins declined as compared to both the sequential quarter and the prior year quarter Margins as % of Managed Assets Comments 12% • Credit & Consumer Behavior Impacts 10.40% – Declining purchase volumes in US Card 10% – Lower early stage delinquencies Revenue Margin – Lower overlimits 8.03% – Highe

  7. Slide 7: Efficiency Ratio and operating expenses improved as a result of continuing cost management

    Efficiency Ratio and operating expenses improved as a result of our continuing cost management actions Efficiency Ratio 70% 60% 50.7% 50% Excluding Visa One-Time Impacts 47.9% 46.3% 40% 42.6% 30% 20% 10% 0% Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 April 21, 2009 7

  8. Slide 8: Credit was the primary driver of operating earnings

    Credit was the primary driver of operating earnings Q4'08 Q1'09 Revenue excl. I/O Strip & Supression 4,673 4,388 I/O Strip valuation change (131) (119) Revenue Supression* (591) (540) Revenue 3,951 3,730 Marketing 265 163 Operating Expense 1,629 1,565 Restructuring 53 18 Non Interest Expense 1,947 1

  9. Slide 9: We continued to increase allowance coverage ratios

    We continued to increase allowance coverage ratios Allowance as % of Reported Loans National Lending Allowance as % of Reported 30+ Delinquencies US Card 10% 200% US Card 200% 9% 9.50% 182% 8% 8.40% International 150% 142% 142% 8.10% 7% 131% International 6% 6.60% 5.30% 128% Auto 5% 100% 4.90% 5.00%

  10. Slide 10: We continued to grow our low risk investment portfolio

    We continued to grow our low risk investment portfolio December 31, 2008 March 31, 2009 Book Net Unrealized Book Net Unrealized Value Gain/(Loss) Value Gain/(Loss) $MM Treasuries/Agencies $1,549 61 $1,514 56 Agency MBS 21,844 217 25,908 528 Non-Agency MBS 3,789 (1,035) 3,533 (997) ABS 3,356 (200) 4,

  11. Slide 11: Our capital ratios remain strong while we continue to de-risk our balance sheet

    Our capital ratios remain strong while we continue to de-risk our balance sheet Tangible Common Equity to Tier 1 Capital to Risk Weighted Assets Tangible Managed Assets 6% 14% 4.8% 12% 11.4%* 5% 11.3% 4.6% 10% 4% Tier 1 Capital Ratio 8% w/out TARP ~ 8.5% 3% Well Capitalized 6% 2% 4% 1% 2% 0% 0% Q408

  12. Slide 12: Deposits now represent two-thirds of our funding

    Deposits now represent two-thirds of our funding Funding Mix Comments 100% 9% Other 9% • Our use of wholesale funding continues 12% 90% to fall 80% 29% Securitization 26% 70% 36% • We have not participated in any 60% government-assisted funding programs 50% (e.g., TLPG, TALF, CPFF) 40% 65% 30% 62% D

  13. Slide 13: Increasing the share of investment assets contributes to the de-risking of our balance sheet

    Increasing the share of investment assets contributes to the de- risking of our balance sheet at this point in the cycle Asset Type as a % of Comments Average Earning Assets 100% 3% 4% Other 2% • Grew investment portfolio in Q1 to take 90% 12% 16% Investment 18% advantage of attractive marginal Port

  14. Slide 14: Our strong and transparent balance sheet positions us to weather the storm and deliver long-term value

    Our strong and transparent balance sheet positions us to weather the storm and deliver long-term value Weather the Storm Deliver Long-Term Value • Historically high coverage ratios • Strong and growing deposit franchise • Conservative investment portfolio • Capital and funding provide significant ba

  15. Slide 15: Capital One

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