Capital One 2007 Annual Report Download - page 103
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81
Other. The unrealized losses on the Companys investments in other items were primarily a reflection of the interest rate and spread
volatility. The Company has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, the
Company does not consider these investments to be other-than-temporarily impaired at December 31, 2007 and 2006.
Weighted Average Yields
1 Year
or Less
15
Years
510
Years
Over 10
Years
December 31, 2007
U.S. Treasury and other U.S. government agency obligations 4.33% 3.72% 3.83% %
Collateralized mortgage obligations 5.12 5.24 5.36 6.77
Mortgage backed securities 5.08 5.26 5.42
Asset backed securities 5.07 5.59 7.14
Other 2.77 3.62 4.51 5.09
Total 4.25% 5.19% 5.12% 5.10%
The distribution of mortgage-backed securities, collateralized mortgage obligations, and asset backed securities is based on average
expected maturities. Actual maturities could differ because issuers may have the right to call or prepay obligations.
Weighted average yields were determined based on amortized cost. Gross realized gains on sales of securities were $71.2 million,
$36.8 million and $7.4 million for the years ended December 31, 2007, 2006 and 2005, respectively. Gross realized losses were $1.2
million, $66.0 million and $14.2 million for the years ended December 31, 2007, 2006 and 2005, respectively.
Note 6
Allowance for Loan and Lease Losses
The following is a summary of changes in the allowance for loan and lease losses:
Year Ended December 31
2007 2006 2005
Balance at beginning of year $ 2,180,000 $ 1,790,000 $ 1,505,000
Provision for loan and lease losses from continuing operations 2,636,502 1,476,438 1,491,072
Provision for loan and lease losses from discontinued operations 80,151
Acquisitions 225,890 224,144
Other 26,888 72,821 (12,731)
Charge-offs (2,580,219) (1,932,453) (1,865,836)
Principal recoveries 619,678 547,304 448,351
Net charge-offs (1,960,541) (1,385,149) (1,417,485)
Balance at end of year $ 2,963,000 $ 2,180,000 $ 1,790,000
Note 7
Loans Held for Investment
The composition of the loans held for investment portfolio was as follows:
December 31
2007 2006
Year-End Balances:
Reported loans:
Consumer loans:
Credit cards
Domestic $ 13,130,866
$ 18,102,140
International 3,661,661
3,203,148
Total credit cards 16,792,527
21,305,288
Installment loans
Domestic 9,966,818
7,057,270
International 354,556
637,982
Total installment loans 10,321,374
7,695,252
Auto loans 25,038,294
23,180,455
Mortgage loans 12,296,575
12,586,905
Total consumer loans 64,448,770
64,767,900
Commercial loans 37,356,257
31,744,239
Total reported loans held for investment $ 101,805,027 $ 96,512,139