Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q3 2009 Earnings Presentation
15 slides from Capital One Financial's earnings presentation, Oct 22, 2009
Slide 1: Third Quarter 2009 Results
Third Quarter 2009 Results Exhibit 99.2
Slide 2: Q3 earnings rose as revenue growth offset higher provision expense
Q309 Q209 Q308 Q309 Earnings rose as revenue growth more than offset an increase in provision expense Includes TARP dividend and accounting impact of June redemption of TARP preferred shares; excluding those impacts operating earnings in Q209 would have been $0.55 and Total Company earnings would ha
Slide 3: Allowance coverage ratios remain elevated
Allowance as % of Reported 30+ Delinquencies Allowance as % of Reported Loans Allowance Change Commercial Lending Allowance as % of Non- Performing Loans Allowance coverage ratios remain elevated 0% 2% 4% 6% 8% 10% 12% 208% 198% 54% 41% 150% 145% 0% 40% 80% 120% 160% 200% 240% Total Company ¹ : 3.59
Slide 4: Average cost of funds declined while asset yields rose
Average Earning Assets 8.3 8.6 8.4 30.5 29.5 30.1 Average Interest-Bearing Liabilities 26% 26% 26% 9% 10% 9% Average cost of funds declined in the quarter while asset yields rose Weighted Avg Asset Yield 9.0 5.3 34.2 37.5 37.4 63.3 65.9 69.2 43.0 41.3 36.5 6.6 $0 $20 $40 $60 $80 $100 $120 $140 $160
Slide 5: Margins improved in the quarter
Margins as % of Managed Assets Efficiency Ratio Margins improved in the quarter Revenue Margin Net Interest Margin 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 0% 10% 20% 30% 40% 50% 60%
Slide 6: Low risk investment portfolio provides balance sheet flexibility
September 30, 2009 Book Value Net Unrealized Gain/(Loss) June 30, 2009 Book Value Net Unrealized Gain/(Loss) Our low risk investment portfolio continues to provide balance sheet flexibility $MM Treasuries/Agencies Agency MBS Non-Agency MBS ABS CMBS Other Total $ 26,998 2,882 (535) 6,206 - - $37,350
Slide 7: Our capacity to absorb risk continues to rise
Tangible Common Equity + Allowance to Tangible Managed Assets Tier 1 Capital to Risk Weighted Assets 8.5% 0% 2% 4% 6% 8% 10% 12% Our capacity to absorb risk continues to rise Other Tier 1 Common TARP 0% 2% 4% 6% 8% 10% 12% Allowance TCE
Slide 8: Profit from continuing operations of $469MM
Net Income from Continuing Operations ($MM) Capital One delivered a profit from continuing operations of $469MM Credit Card Domestic International SUBTOTAL Commercial Banking Consumer Banking Total Company $ 166.9 5.7 172.6 29.8 89.8 $ 230.2 Other (62.0) $ 289.7 2.0 291.7 (130.2) 184.6 $ 469.2 123.1
Slide 9: Domestic Credit Card continues to deliver profits despite declining loans
$61,892 $64,760 $67,015 $70,945 $69,362 Loans Held for Investment Domestic Card Revenue Margin The Domestic Credit Card business continues to deliver profits, despite declining loan balances 0% 5% 10% 15% 20% $70,369 $73,399 $75,085 $79,665 $79,616 Int’l Domestic Domestic $MM
Slide 10: International Card credit improved modestly; Domestic Card credit worsened
Domestic Card Credit International Card Credit International Card experienced modest improvement in credit, while Domestic Card credit worsened 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Managed Net Charge-off Rate Managed 30+ Delinquency Rate 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Managed Net Charge-off Rate Man
Slide 11: Commercial Banking loans declined modestly, deposits grew
Average Loans Held for Investment Average Deposits Commercial Banking loans declined modestly, while deposits grew 29,416 28,608 29,545 30,497 30,105 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 17,761 17,021 16,046 17,153 15,103 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Loans
Slide 12: Economic deterioration drove worsening Commercial Banking credit trends
Total Commercial Banking ($29.9 B) Commercial & Multi Family ($13.9 B) Middle Market ($10.0 B) Total Commercial Banking Excluding Small Ticket CRE ($27.5 B) Continuing economic deterioration drove worsening credit trends and a significant allowance build in Commercial Banking 0% 1% 2% 3% 4% 5% Non P
Slide 13: Consumer Banking delivered gains in revenue and profits
Average Loans Held for Investment Average Deposits Consumer Banking delivered gains in revenue and profits, even as loans and deposits declined modestly 41,308 43,044 36,543 38,824 37,535 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 73,284 74,321 62,730 57,035 60,748 5,000 10,000 15,000 2
Slide 14: Mortgage and Auto drove Consumer Banking credit results
Mortgage Credit Auto Credit The Mortgage Portfolio and the Auto Finance business were the key drivers of Consumer Banking credit results and profitability Managed Net Charge-off Rate Managed 30+ Delinquency Rate 0% 1% 2% 3% 4% 5% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Managed Net Charge-off Rate Managed
Slide 15: Cc. tale
Cc. tale ap
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