Capital One 2007 Annual Report Download - page 130

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108
Financial Liabilities
Non-interest bearing deposits
The carrying amount approximates fair value.
Interest-bearing deposits
The fair values of savings, NOW accounts and money market accounts were the amounts payable on demand at December 31, 2007
and 2006. The fair value of other 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 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.
2007 2006
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Financial Assets
Cash and cash equivalents $ 4,821,409 $ 4,821,409
$ 4,660,496 $ 4,660,496
Securities available for sale 19,781,587 19,781,587
15,452,047 15,452,047
Mortgage loans held for sale 315,863 315,863
10,435,295 10,435,739
Loans held for investment 101,805,027 104,822,251
96,512,139 98,057,383
Interest receivable 839,317 839,317
816,426 816,426
Accounts receivable from securitization 4,717,879 4,717,879
4,589,235 4,589,235
Derivatives 542,743 542,743
326,892 326,892
Mortgage servicing rights 247,589 247,589
252,295 252,295
Financial Liabilities
Non-interest bearing deposits $ 11,046,549 $ 11,046,549
$ 11,648,070 $ 11,648,070
Interest-bearing deposits 71,943,913 70,528,579
74,122,822 71,438,918
Senior and subordinated notes 10,712,706 10,141,310
9,725,470 9,811,459
Other borrowings 26,583,683 26,290,579
24,257,007 23,852,818
Interest payable 631,609 631,609
574,763 574,763
Derivatives 529,390 529,390
218,604 218,604
Commitments to extend credit and letters of credit
These financial instruments generally are not sold or traded. The fair value of the financial guarantees outstanding at December 31,
2007 that have been issued since January 1, 2003, was $2.9 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, 2007 and 2006,
there was no material unrealized appreciation or depreciation on these financial instruments.