Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q2 2007 Earnings Presentation
13 slides from Capital One Financial's earnings presentation, Jul 19, 2007
Slide 1: Second quarter 2007 results
Capital Qjyc' | second quarter 2007 results July 19, 2007
Slide 2: Forward looking statements
Forward looking statements Forward-Looking Information 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
Slide 3: Second quarter 2007 highlights
Second quarter 2007 highlights • Diluted earnings per share of $1.89, up 6% from Q206, inclusive of several non-operating items: Pre-Tax Post-Tax $M EPS Integration and CDI Amortization ($79) ($0.13) Restructuring Charges ($101) ($0.16) Accelerated Vesting of Executive Stock Options ($40) ($0.06) Ga
Slide 4: Affirming current 2007 diluted EPS guidance of $7.00 - $7.40
We are affirming current 2007 diluted EPS guidance of $7.00 - $7.40, with non-operating items moving us to the lower end of the range Key Assumptions • $200M of restructuring charges, including $101M recognized in Q207 • Completion of $3B of previously announced share repurchases by end of 2007 • $1
Slide 5: We expect to achieve cost reductions of $700 million pre-tax in 2009
We expect to achieve cost reductions of $700 million pre-tax in 2009 2007 2008 2009 Restructuring Charges ($M) ($200) ($100) $0 Cumulative Gross Cost Savings ($M) $30 $400 $700 • $400M Business line contributions – examples include: – Leveraging infrastructure investments and streamlining operations
Slide 6: Credit quality remains consistent with expectations
Credit quality remains consistent with expectations Monthly Managed Monthly Managed Delinquency Net Charge-off Rate and Non-Performing Loan Rate 8% 8% 7% Bankruptcy 7% Filing Spike 6% 6% 5% Q207: 3.45% (1) 5% National Lending 4% National Lending 30+ Delinquency Rate 4% 3% 3% 3.86% 2% 2% Q207: Local
Slide 7: Second quarter 2007 managed income statement and balance sheet
Second quarter 2007 managed income statement and balance sheet Managed Income Statement Highlights ($Millions except per share data) Q207/Q206 Change Q207 Q107 Q206 $ %/bps Net Interest Income $ 2,634.9 $ 2,620.8 $ 2,140.8 $ 494.1 23 % Non-Interest Income 1,421.8 1,330.2 1,199.4 222.4 19 Total Reven
Slide 8: Profit growth in US Card and Global Financial Services more than offset declines
Profit growth in US Card and Global Financial Services more than offset declines in Auto Finance, Mortgage Banking, and Local Banking Net Income After Tax ($Millions) PRO-FORMA* Q207/Q206 Change Q207 Q107 Q206 $ % National Lending US Card $ 538.3 $ 495.3 $ 421.8 $ 116.5 27.6 % Auto Finance 38.0 44.4
Slide 9: Revenue growth and cost management sustains strong profitability of US Card
Revenue growth and cost management sustains the strong profitability of our US Card business Net Income After Tax (1) ($M) Highlights $800 Q207 NIAT of $538 million, up 28% from Q206 - Revenues up 6% $602.8 $600 $538.3 - Expenses down 6% $495.3 $461.6 - Provision down 3% $421.8 $400 $337.2 • $50 bil
Slide 10: Global Financial Services continues to deliver growth in both profits & loans
Global Financial Services continues to deliver growth in both profits & loans Net Income After Tax (1) ($M) $120 $113.5 Highlights $107.2 $100 • Net income of $83 million, up 62% from Q206 $82.8 $80 $74.8 - Revenue up 9% $60 $51.2 - Expenses up 10% - Provision down 4% $40 $20 • Risk metrics up modes
Slide 11: Auto Finance launched a new Dealer business model
Our Auto Finance business launched a new Dealer business model to address challenges in the prime business and enhance subprime success Net Income After Tax (1) ($M) Highlights $100 $95.1 • Net income of $38 million, down 60% from Q206 $80 - Revenues up 7% $69.4 - Expenses up 5% $60 $44.4 - Provisio
Slide 12: Mortgage Banking focused on protecting the P&L through the difficult cycle
As secondary market challenges continue, our Mortgage Banking business is focused on protecting the P&L through the difficult cyclical environment Net Income After Tax (1,2) ($M) Highlights $60 $43.6 • Q2 NIAT of $2.6 million, resulting from continued $40.5 industry pressure on originations and GOS
Slide 13: Local banking business delivered solid results and further integration progress
Our local banking business delivered solid results and further progress on integration Net Income After Tax (1,2) ($M) Highlights $174.0 $180 $165.4 $160.9 • NIAT of $133 million in Q207, up $3M from Q107 $160 - Revenues unchanged from Q107 $133.6 $129.6 $132.5 $140 - Non-interest expenses slightly
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