Capital One 2006 Annual Report Download - page 129

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111
Interest-bearing deposits
The fair value of interest-bearing deposits was calculated by discounting the future cash flows using estimates of market rates
for corresponding contractual terms.
Other borrowings
The carrying amount of federal funds purchased and resale agreements, FHLB advances, and other short-term borrowings
approximates fair value. The fair value of secured borrowings was calculated by discounting the future cash flows using
estimates of market rates for corresponding contractual terms and assumed maturities when no stated final maturity was
available. The fair value of the junior subordinated capital income securities and junior subordinated debentures were
determined based on quoted market prices.
Senior and subordinated notes
The fair value of senior and subordinated notes was determined based on quoted market prices.
Interest payable
The carrying amount approximates the fair value of this liability due to its relatively short-term nature.
Derivatives
The carrying amount of derivatives approximates fair value and was estimated using present value valuation techniques. This
value generally reflects the estimated amounts that the Company would have paid to terminate the interest rate swaps,
currency swaps and f/x contracts at the respective dates, taking into account the forward yield curve on the swaps and the
forward rates on the currency swaps and f/x contracts. These derivatives are included in other liabilities on the balance sheet.
2006 2005
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Financial Assets
Cash and cash equivalents $ 4,660,496 $ 4,660,496
$ 4,071,267 $ 4,071,267
Securities available for sale 15,452,047 15,452,047
14,245,018 14,245,018
Mortgage loans held for sale 10,435,295 10,435,739
197,444 197,444
Net loans held for investment 96,512,139 98,057,383
59,847,681 60,182,156
Interest receivable 816,426 816,426
563,542 563,542
Accounts receivable from securitization 4,589,235 4,589,235
4,904,547 4,904,547
Derivatives 326,892 326,892
265,685 265,685
Mortgage servicing rights 252,295 267,482
Financial Liabilities
Non-interest bearing deposits $ 11,648,070 $ 11,648,070 $ 4,841,171 $ 4,841,171
Interest-bearing deposits 74,122,822 71,438,918
43,092,096 42,911,307
Senior and subordinated notes 9,725,470 9,811,459
6,743,979 6,774,486
Other borrowings 24,257,007 23,852,818
15,534,161 15,575,106
Interest payable 574,763 574,763
371,681 371,681
Derivatives 218,604 218,604
229,971 229,971
Commitments to extend credit, letters of credit, and financial guarantees
These financial instruments generally are not sold or traded. The fair value of the financial guarantees outstanding at
December 31, 2006 that have been issued since January 1, 2003, was $4.9 million and was included in other liabilities. The
estimated fair values of extensions of credit and letters of credit are not readily available. However, the fair value of
commitments to extend credit and letters of credit is based on fees currently charged to enter into similar agreements with
comparable credit risks and the current creditworthiness of the counterparties. Commitments to extend credit issued by the
Company are generally short-term in nature and, if drawn upon, are issued under current market terms and conditions for
credits with comparable risks. At December 31, 2006 and 2005, there was no material unrealized appreciation or depreciation
on these financial instruments.