Capital One 2000 Annual Report Download - page 64

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62 notes
These currency swaps had notional amounts totaling $261,000 as
of December 31, 2000, and mature from 2001 to 2005, coinciding
with the repayment of the assets to which they are designated.
The Company has entered into f/x contracts to reduce the Com-
pany’s sensitivity to foreign currency exchange rate changes on its
foreign currency denominated assets and liabilities. As of Decem-
ber 31, 2000, the Company had f/x contracts with notional amounts
totaling $665,284 maturing in 2001 to coincide with the repayment
of the assets to which they are designated.
Note O
SIGNIFICANT CONCENTRATION OF CREDIT RISK
The Company is active in originating consumer loans, primarily in
the United States. The Company reviews each potential customer's
credit application and evaluates the applicant's financial history
and ability and willingness to repay. Loans are made primarily on
an unsecured basis; however, certain loans require collateral in the
form of cash deposits. International consumer loans are originated
primarily in Canada and the United Kingdom. The geographic distri-
bution of the Company's consumer loans was as follows:
December 31 2000 1999
Percentage Percentage
Loans Loans
Geographic Region: of Total of Total
South $ 9,869,290 33.43% $ 6,751,599 33.36%
West 5,962,360 20.19 4,037,714 19.95
Northeast 5,014,855 16.99 3,362,044 16.62
Midwest 5,694,318 19.29 3,644,444 18.01
International 2,983,203 10.10 2,440,787 12.06
29,524,026 100.00% 20,236,588 100.00%
Less securitized
balances (14,411,314) (10,323,039)
Total $ 15,112,712 $ 9,913,549
Note P
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL
INSTRUMENTS
The following discloses the fair value of financial instruments as of
December 31, 2000 and 1999, whether or not recognized in the
balance sheets. In cases where quoted market prices are not
available, fair values are based on estimates using present value
or other valuation techniques. Those techniques are significantly
affected by the assumptions used, including the discount rate and
estimates of future cash flows. In that regard, the derived fair value
estimates cannot be substantiated by comparison to independent
markets and, in many cases, could not be realized in immediate
settlement of the instrument. As required under GAAP, these
disclosures exclude certain financial instruments and all non-
financial instruments. Accordingly, the aggregate fair value
amounts presented do not represent the underlying value of the
Company.
The following methods and assumptions were used by the
Company in estimating the fair value of its financial instruments as
of December 31, 2000 and 1999:
Cash and Cash Equivalents
The carrying amounts of cash and due from banks, federal funds
sold and resale agreements and interest-bearing deposits at other
banks approximated fair value.
Securities Available for Sale
The fair value of securities available for sale was determined using
current market prices. See Note B for fair values by type of security.
Consumer Loans
The net carrying amount of consumer loans approximated fair value
due to the relatively short average life and variable interest rates
on a substantial number of these loans. This amount excluded any
value related to account relationships.
Interest Receivable
The carrying amount approximated fair value.
Accounts Receivable from Securitizations
The carrying amount approximated fair value.