Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q4 2009 Earnings Presentation
15 slides from Capital One Financial's earnings presentation, Jan 21, 2010
Slide 1: Fourth Quarter 2009 Results
Fourth Quarter 2009 Results Exhibit 99.2
Slide 2: Q409 earnings were $376MM or $0.83 per share; 2009 earnings $884MM
2008 2009 Q409 Q309 Q409 earnings were $376MM or $0.83 per share; 2009 earnings were $884MM or $0.75 per share Revenue excl. Retained Interest & Suppression Retained Interests Valuation Changes Revenue Suppression Revenue Marketing Expense Operating Expense Restructuring Expense Non-Interest Expense
Slide 3: Allowance coverage ratios continue to reflect historically high loss rates
Allowance as % of Reported 30+ Delinquencies Allowance as % of Reported Loans Allowance Balance Commercial Lending Allowance as % of Non-Performing Loans Allowance coverage ratios continue to reflect historically high loss rates and a cautious outlook 9.7% 10.0% 8.2% 1.0% 2.3% 2.7% 3.4% 3.4% 3.5% 0%
Slide 4: End of period assets were up despite declining loan balances
End of Period Assets $36.3 $37.7 $37.7 $38.8 $61.9 $64.8 $67.0 $60.3 $41.8 $40.1 $35.9 $38.2 End of Period Liabilities $12.7 $13.4 $49.1 $47.5 $45.9 $46.7 $16.3 $18.1 $16.7 $17.1 $6.6 $6.0 $12.3 $12.6 $6.7 $6.4 End of period assets were up despite declining loan balances $35.5 $27.6 $28.3 $7.8 $8.7
Slide 5: Margins remain relatively stable
Margins as % of Managed Assets Efficiency Ratio 8.01% 8.68% 9.87% 9.50% 6.19% 6.91% 5.89% 6.90% 0% 2% 4% 6% 8% 10% 12% 14% 16% Margins remain relatively stable Revenue Margin Net Interest Margin 43.9% 38.7% 45.3% 46.3% 0% 10% 20% 30% 40% 50% 60% Weighted Avg Asset Yield 8.34% 8.36% 8.97% 8.83% Cost
Slide 6: Our capacity to absorb risk remains high
Tangible Common Equity + Allowance to Tangible Managed Assets Tier 1 Capital to Risk Weighted Assets 8.5% 0% 2% 4% 6% 8% 10% 12% 14% Our capacity to absorb risk remains high Other Tier 1 Common 11.9% 0% 2% 4% 6% 8% 10% 12% 5.6% 6.2% Allowance TCE 7.8% 8.5% 6.3% 8.4% 13.8% 4.6% 6.9% 9.7% 11.4% TARP
Slide 7: We are implementing FAS 166/167 at book value in Q1 2010
Reported 12/31/09 Estimated Adjustments for FAS 166/167 Estimated Opening 1/1/10 We are implementing FAS 166/167 at book value in Q1 2010 Assets Liabilities Stockholders’ Equity Loans held for investment 90.6 47.8 138.4 Less: Allowance for loan & lease losses (4.1) (4.3) (8.4) Net loans (HFI) 86.5 4
Slide 8: Consolidation will impact both the balance sheet and the income statement
Capital Ratios as of 12/31/09 Tangible Common Equity + Allowance to Tangible Managed Assets Income Statement Impact from Securitized Accounts Previously Treated as Off Balance Sheet Consolidation will impact both the balance sheet and the income statement 0% 2% 4% 6% 8% 10% 12% Q409 Pro-Forma 5.6% 6
Slide 9: Capital One delivered a profit from continuing operations of $403.9 MM in Q4 2009
Net Income (Loss) from Continuing Operations ($MM) Capital One delivered a profit from continuing operations of $403.9 MM in the fourth quarter of 2009 Credit Card Domestic International SUBTOTAL Commercial Banking Consumer Banking Total Company $ (176.3) (10.9) (187.2) 24.1 (952.7) $ (1,396.3) Othe
Slide 10: Domestic Card charge-off rate improved modestly while delinquency rate increased
Domestic Card Credit International Card Credit Domestic Card charge-off rate improved modestly in the fourth quarter, while delinquency rate increased 8.39% 9.23% 9.64% 7.08% 9.59% 5.08% 4.78% 4.77% 5.38% 5.78% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 7.30% 9.32% 9.19% 5.84% 9.52% 6.25% 5.51% 6.69% 6.63% 6
Slide 11: Domestic Credit Card business delivered strong and resilient profitability
Loans Held for Investment The Domestic Credit Card business delivered strong and resilient profitability, despite elevated charge-offs 70.9 67.0 64.8 61.9 60.3 68.5 70.4 73.4 75.1 79.7 Int’l Domestic $MM
Slide 12: Domestic Card Revenue Margins have been stable in the last 6 years
Domestic Card Annual Revenue Margin and its Components Domestic Card Revenue Margins have been stable in the last 6 years 15.4% 15.5% 15.6% 14.5% 15.7% 15.8% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Revenue Margin
Slide 13: Continuing economic deterioration drove worsening credit trends in Commercial Banking
Total Commercial Banking ($29.9 B) Commercial & Multi Family ($13.9 B) Middle Market ($10.1 B) Total Commercial Lending Excluding Small Ticket CRE ($27.5 B) Continuing economic deterioration drove another quarter of worsening credit trends in Commercial Banking 2.91% 0.82% 1.42% 0.89% 0.56% 2.52% 2.
Slide 14: Mortgage Portfolio and Auto Finance drove Consumer Banking credit results
Mortgage Credit Auto Credit 0.43% 0.69% 0.45% 0.46% 0.71% 1.57% 1.91% 0.97% 1.17% 1.26% 0% 1% 2% 3% 4% 5% The Mortgage Portfolio and the Auto Finance business were the key drivers of Consumer Banking credit results Net Charge-off Rate 30+ Delinquency Rate 7.48% 10.03% 3.65% 4.38% 4.88% 5.67% 4.55% 9
Slide 15: Cc. tale
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