Capital One 1998 Annual Report Download - page 48

46Capital One Financial Corporation
Notes to Consolidated Financial Statements (continued)
(Currencies in Thousands, Except Per Share Data)
Note E
Borrowings
Borrowings as of December 31, 1998 and 1997 were as follows:
1998 1997
Year-End Year-End
Interest Interest
Outstanding Rate Outstanding Rate
Interest-bearing
Deposits $1,999,979 4.77% $1,313,654 4.49%
Other Borrowings
Federal funds
purchased and
resale agreements $1,227,000 5.53% $ 705,863 5.75%
Other 417,279 6.58 90,249 7.09
Total $1,644,279 $ 796,112
Senior Notes
Bank – fixed rate $3,268,182 6.29% $2,793,778 7.03%
Bank – variable rate 146,998 5.89 414,000 6.19
Corporation 324,213 7.17 125,000 7.25
Total $3,739,393 $3,332,778
Deposit Notes
Fixed rate $ 224,996 6.71%
Variable rate 75,000 6.15
Total $ 299,996
As of December 31, 1998, the aggregate amount of interest-
bearing deposits with accounts exceeding $100 was $451,076. In
September 1997, the Savings Bank completed the purchase of the
national retail deposit franchise of JCPenney National Bank. Retail
deposit balances acquired under the agreement were approximately
$421,000.
In November 1996, the Company entered into a four-year,
$1,700,000 unsecured revolving credit arrangement (the “Credit
Facility”). The Credit Facility is comprised of two tranches: a
$1,375,000 Tranche A facility available to the Bank and the Sav-
ings Bank, including an option for up to $225,000 in multi-cur-
rency availability, and a $325,000 Tranche B facility available to
the Corporation, the Bank and the Savings Bank, including an
option for up to $100,000 in multi-currency availability. The bor-
rowings of the Savings Bank are limited to $750,000. All borrow-
ings under the Credit Facility are based on varying terms of the
London InterBank Offered Rate (“LIBOR”). The Bank has irrevoca-
bly undertaken to honor any demand by the lenders to repay any
borrowings which are due and payable by the Savings Bank but
which have not been paid. The facility is structured as a four-year
commitment and is available for general corporate purposes. The
commitment terminates on November 24, 2000; however, it may
be extended for an additional one-year period. As of December 31,
1998 and 1997, the Company had no outstandings under the
Credit Facility.
Note C
Allowance for Loan Losses
The following is a summary of changes in the allowance for
loan losses:
Year Ended December 31
1998 1997 1996
Balance at beginning of year $ 183,000 $ 118,500 $ 72,000
Provision for loan losses 267,028 262,837 167,246
Acquisitions/other 7,503 (2,770) (18,887)
Charge-offs (294,295) (223,029) (115,159)
Recoveries 67,764 27,462 13,300
Net charge-offs (226,531) (195,567) (101,859)
Balance at end of year $ 231,000 $ 183,000 $ 118,500
Note D
Premises and Equipment
Premises and equipment as of December 31, 1998 and 1997 were
as follows:
1998 1997
Land $ 10,168 $ 7,849
Buildings and improvements 126,205 90,960
Furniture and equipment 254,070 182,142
Computer software 41,084 28,693
In process 23,325 2,297
454,852 311,941
Less: Accumulated depreciation
and amortization (212,705) (149,215)
Total premises and equipment, net $ 242,147 $ 162,726
Depreciation expense was $75,005, $63,537 and $39,284,
for the years ended December 31, 1998, 1997 and 1996,
respectively.