Capital One 2008 Annual Report Download

Download and view the complete annual report

Please find the complete 2008 Capital One annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 186

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186

Capital One Financial Corporation | 2008 Annual Report

Table of contents

  • Page 1
    Capital One Financial Corporation | 2008 Annual Report

  • Page 2

  • Page 3
    ...the economic turbulence. Capital One's net operating income in 2008 was $895 million, or $2.28 per share, not including a non-cash goodwill write-down of $811 million associated with the shrinking of our auto finance business. Total company earnings, including the goodwill write-down and the impacts...

  • Page 4
    ...will create long-term value for our investors. Our banking transformation and business mix provide resiliency Capital One began its public company journey as a specialty credit card lender wholly reliant on the capital markets for funding. Capital One grew rapidly throughout the 1990s. Over time, we...

  • Page 5
    ... stability of deposit funding and to position the company for long-term profitable growth. We entered banking in 2005 with the acquisition of Hibernia Bank, the largest bank in Louisiana with a growing presence in top markets in Texas. We followed with the acquisition of North Fork Bank in December...

  • Page 6
    ...advances. Our holding company cash position is sufficient to cover over two years of corporate obligations. Our securities portfolio also is solid. The portfolio contains no Collateralized Debt Obligations (CDOs), no Structured Investment Vehicles (SIVs), and no bank or agency issued preferred stock...

  • Page 7
    ... market conditions and raising $761 million in common equity in the public equity markets. The additional capital served two purposes. It better positioned our already strong company to weather the economic turmoil. And it put us in a position to capitalize on select opportunities to acquire high...

  • Page 8
    ... in managed loans at the end of 2008. Our Small Business credit cards continued to perform roughly in line with our consumer credit card portfolio, while continuing to provide a much-needed liquidity "lifeline" to the many small businesses across the country that drive our national economy. Times...

  • Page 9
    "Capital One remains well positioned to navigate the near-term economic challenges and deliver shareholder value over the cycle." 7

  • Page 10
    ... for residential for-sale construction. Our national direct bank, which provides world class savings products directly to consumers, continued to deliver strong deposit growth in 2008. We have been investing in that platform for many years and it is providing a brand-defining customer experience. As...

  • Page 11
    .... Chevy Chase Bank ranks number five in deposit share, with $13.5 billion in deposits, having focused on investing in many new branches. This franchise is a coiled spring with plenty of untapped upside potential. Chevy Chase Bank enhances our local banking business by improving our deposit funding...

  • Page 12
    ... credit card - whether a favorite family photo or a picture of a beloved pet. CardLab is a hit with our customers. They love the exceptional value, transparency, convenience, and control. In 2008, we introduced innovative travel rewards with the new No Hassle Rewards Card, which offers double miles...

  • Page 13
    ... to earn rewards quickly and easily for everyday banking activities, like shopping at the mall, debit card purchases, cash withdrawals, and paying bills online. The landscape of consumer practices in the credit card industry changed in 2008 when the Federal Reserve released sweeping new rules to be...

  • Page 14
    ... external recognition can validate things we already know about our culture. At Capital One, we always strive to be a great company for leaders. We were gratified to be ranked number two in North America and number five globally on Fortune's "Best Companies for Leaders" list. We also emphasize being...

  • Page 15
    ... in asset originations, while responsible and necessary in the current environment, may defer future growth. And potential legislative and regulatory changes (including rules relating to regulatory oversight, bankruptcy, mortgage loan modification, credit card practices, and accounting), could...

  • Page 16
    ... 2008 deposits ($ in billions) $109 $86 $83 managed loans** ($ in billions) $146 $151 $147 $106 $80 $60 $48 $26 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 14 ** 2008 data does not include goodwill impairment of $811 million. ** Managed loans are comprised of reported loans...

  • Page 17
    ...85 7.40 2.88 3.87 47.3% 49.1 27.0 $ $ Managed Performance Statistics(1): Net interest margin Revenue margin Risk-adjusted margin Net charge-off rate Delinquency rate Efficiency ratio(2) Year-end total loan accounts Full-time equivalent employees (in thousands) (1) Based on continuing operations...

  • Page 18
    ... of the Board, Chief Executive Officer and President Robert M. Alexander E. R. Campbell C, F Former Chairman Hibernia Corporation Chief Information Officer Jory A. Berson President, Financial Services W. Ronald Dietz A, F President and CEO W.M. Putnam Company John G. Finneran, Jr. General...

  • Page 19
    ... Capital One Drive McLean, Virginia (Address of Principal Executive Offices) 22102 (Zip Code) RegistrantÂ's telephone number, including area code: (703) 720-1000 Securities registered pursuant to section 12(b) of the act: Title of Each Class Name of Each Exchange on Which Registered Common Stock...

  • Page 20
    CAPITAL ONE FINANCIAL CORPORATION 2008 ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS Item 1. Business Overview Business Description Geographic Diversity Enterprise Risk Management Technology/Systems Funding and Liquidity Competition Intellectual Property Employees Supervision and Regulation ...

  • Page 21
    ... credit card loans. Our common stock is listed on the New York Stock Exchange under the symbol COF and as of January 31, 2009, the CompanyÂ's common stock was held by 17,653 shareholders. Our principal executive office is located at 1680 Capital One Drive, McLean, Virginia 22102 (telephone number...

  • Page 22
    ...customized credit card products across the consumer risk spectrum. Chevy Chase Bank Acquisition On December 4, 2008, the Company announced its intention to acquire Chevy Chase Bank F.S.B., the largest retail depository institution in the Washington, D.C. region in a cash and stock transaction valued...

  • Page 23
    ...In October, we agreed to issue $3.5 billion of preferred stock and warrants to the U.S. Treasury under the Capital Purchase Program to protect against any potential risks to our regulatory capital ratios. We plan and manage our balance sheet, lending and investment activities to conform to our views...

  • Page 24
    ...-line business team. The framework has six key elements: 1. 2. 3. 4. 5. 6. Objective Setting; Risk Assessment; Control Activities; Communication and Information; Program Monitoring; and Organization and Culture. Objective Setting is at the beginning of our risk management approach. We set strategic...

  • Page 25
    ...issues and the procedures that trigger objective setting and risk assessments when new business opportunities are evaluated or business hierarchy changes occur. Communication and Information must provide a solid infrastructure to support the objective setting, risk assessment, and control activities...

  • Page 26
    ... value of equity will under-perform due to changes in interest rates, foreign exchange rates (market rates), or other financial market asset prices. Our ability to manage market risks contributes to our overall capital management. The Chief Financial Officer is the accountable executive for market...

  • Page 27
    ...and identify and mitigate risks. Business strategies are integrated into the Corporate Strategic Plan and are reviewed and approved separately and together on an annual basis by the Chief Executive Officer and Board of Directors. Operational Risk is the risk of direct or indirect financial loss from...

  • Page 28
    ...of consumer and small business credit card accounts, Fidelity National Information Services (Â"FidelityÂ") for the Capital One banking systems, and IBM Corporation for management of our North American data centers. In the first quarter of 2008, we migrated our United Kingdom credit card portfolio to...

  • Page 29
    ... to discontinue existing activities that are not generally permissible for bank holding companies. COBNA and CONA are national associations chartered under the laws of the United States, the deposits of which are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (the...

  • Page 30
    ... changes to current account risk management strategies to address the new limitations these rules impose. The Federal Reserve also amended Regulation Z on December 18, 2008 to change a number of disclosure and other obligations for credit cards. Among other things, the final rule requires changes...

  • Page 31
    ... FDIC insures the deposits of insured depository institutions up to prescribed limits for each depositor. The DIF was formed March 31, 2006, upon the merger of the Bank Insurance Fund and the Savings Association Insurance Fund in accordance with the Federal Deposit Insurance Reform Act of 2005 (the...

  • Page 32
    ...of their lending programs, including line assignments, over-limit practices, minimum payment and negative amortization, workout and settlement programs, and the accounting methodology used for various assets and income items related to loans. We believe that our account management and loss allowance...

  • Page 33
    ... the Change in Bank Control Act. Consequently, federal law and regulations prohibit any person or company from acquiring control of the Corporation without, in most cases, prior written approval of the Federal Reserve or the OCC, as applicable. Control is conclusively presumed if, among other things...

  • Page 34
    ... Department to create a $700 billion Troubled Assets Relief Program (Â"TARPÂ") originally created to address troubled mortgage assets. In November 2008, the Treasury approved the CompanyÂ's participation in one of the programs implemented under the EESA, the TARP Capital Purchase Program (the...

  • Page 35
    ...the Securities and Exchange Commission (Â"SECÂ") and contains a number of significant changes relating to the responsibilities of directors and officers and reporting and governance obligations of SEC reporting companies. In addition, the Sarbanes-Oxley Act also created the Public Company Accounting...

  • Page 36
    ... included point of sale changes and the introduction of an annual PPI statement to customers. All changes will take effect in 2010. The U.K. Bank will likely see an increase in customer cancellations and complaints beginning in 2009, and will stop selling PPI to new customers in 2010. The U.K. Bank...

  • Page 37
    ..., which could limit our access to funding. As a result of these current market conditions, we have increased our reliance on deposit funding. This shift results in higher levels of owned loan receivables and related increases in our allowance for loan and lease losses. Increased charge-offs, rising...

  • Page 38
    ... our international businesses, where changing laws and regulations may have an adverse impact on our results. In April 2008, the Financial Accounting Standards Board (Â"FASBÂ") voted to eliminate Qualifying Special Purpose Entities (Â"QSPEsÂ") from the guidance in SFAS 140, Accounting for Transfers...

  • Page 39
    ... cases, the markets have produced downward pressure on stock price and credit capacity for issuers without regard to those issuersÂ' underlying financial strength. Such market conditions may limit the CompanyÂ's ability to replace, in a timely manner, maturing liabilities, satisfy regulatory capital...

  • Page 40
    ... decreases in the levels of deposits that consumer and commercial customers and potential customers choose to maintain with us. In addition, a variety of social factors may cause changes in borrowing activity, including credit card use, payment patterns and the rate of defaults by accountholders and...

  • Page 41
    ... of customer pre-payments for auto and other term loans and may affect the balances customers carry on their credit cards. These changes can reduce the overall yield on our earning asset portfolio. Changes in interest rates and competitor responses to these changes may also impact customer decisions...

  • Page 42
    ... our business develops, changes or expands, additional expenses can arise from management of outsourced services, asset purchases, structural reorganization, a reevaluation of business strategies and/or expenses to comply with new or changing laws or regulations. Integration of acquired entities may...

  • Page 43
    .... Not applicable. Item 2. Properties. Our real estate portfolio is used to support all of our business segments. We own the 587,000 square foot headquarters building located at 1680 Capital One Drive in McLean, Virginia. The building houses our executive offices and Northern Virginia staff. We...

  • Page 44
    PART II Item 5. Market for CompanyÂ's Common Equity and Related Stockholder Matters. Total Number of Shares Purchased as Part of Publicly Announced Plans(1) Maximum Amount That May Yet be Purchased Under the Plan or Program(1) (Dollars in thousands, except per share information) Total Number of ...

  • Page 45
    ... information required by Item 5 is included under the following: Item 1 Â"BusinessÂ-OverviewÂ" Item 1 Â"BusinessÂ-Supervision and RegulationÂ-Dividends and Transfers of FundsÂ" Item 7 Â"ManagementÂ's Discussion and Analysis of Financial Condition and Results of OperationsÂ-Market Risk Management...

  • Page 46
    ...11 33.99 N/A (53.16)% N/A (1.27)% Selected Year-End Reported Balances(3): Loans held for investment...$ 101,017.8 $ 101,805.0 $ 96,512.1 $ 59,847.7 2,963.0 2,180.0 1,790.0 Allowance for loan and lease losses ...4,524.0 150,499.1 144,360.8 88,701.4 Total assets...165,878.4 71,714.6 73,913.9 43,092...

  • Page 47
    ... diversified financial services company whose banking and non-banking subsidiaries market a variety of financial products and services. The CorporationÂ's principal subsidiaries are: • • Capital One Bank, (USA), National Association (Â"COBNAÂ") which currently offers credit and debit card products...

  • Page 48
    ... card business, including small business credit cards, and the installment loan businesses. Other National Lending sub-segment which includes the CompanyÂ's auto finance and international lending sub-segments. On December 4, 2008, the Company announced its intention to acquire Chevy Chase Bank...

  • Page 49
    ...value measurement in its entirety is reported in one of the three levels. These levels are: • • Level 1 Â- Valuation is based upon quoted prices for identical instruments traded in active markets. Level 1 assets and liabilities include debt and equity securities traded in an active exchange market...

  • Page 50
    ...primarily core deposit intangibles, reflected on the Consolidated Balance Sheet arose from acquisitions accounted for under the purchase method. At the date of acquisition, the Company recorded the assets acquired and liabilities assumed at fair value. The excess of the cost of the acquired business...

  • Page 51
    ... amount exceeds its fair value. There were no impairment losses recognized for other intangible assets during the years ended December 31, 2008 and 2007. Revenue Recognition The Company recognizes earned finance charges and fee income on credit card loans according to the contractual provisions...

  • Page 52
    ... future cash flows from excess finance charges and past-due fees over the sum of the return paid to security holders, estimated contractual servicing fees and credit losses. Retained assets are recorded in accounts receivable from securitizations at estimated fair value. The CompanyÂ's retained...

  • Page 53
    ... of Customer Rewards Liability The Company offers products, primarily credit cards, that provide program members with various rewards such as airline tickets, free or deeply discounted products or cash rebates, based on account activity. The Company establishes a rewards liability based on points...

  • Page 54
    ... of business. Off-balance sheet activities typically utilize special purpose entities (Â"SPEsÂ") that may be in the form of limited liability companies, partnerships or trusts. The SPEs raise funds by issuing debt to third party investors. The SPEs hold various types of financial assets whose cash...

  • Page 55
    ..., servicing and other fees, and are available to absorb the investorsÂ' share of credit losses. Amounts collected in excess of that needed to pay the above amounts are remitted, in general, to the Company. Under certain conditions, some of the cash collected may be retained to ensure future payments...

  • Page 56
    ... Consolidated Financial StatementsÂ-Note 20Â" for quantitative information regarding Other Variable Interest Entities. The Company holds variable interests in entities (Â"Investor EntitiesÂ") that invest in community development entities (Â"CDEsÂ") that provide debt financing to businesses and non...

  • Page 57
    ... income statement line items from which it originated. For this reason, the Company believes the Â"managedÂ" consolidated financial statements and related managed metrics to be useful to stakeholders. As of and for the year ended December 31, 2008 (Dollars in millions) Total Reported Securitization...

  • Page 58
    ... in charge-offs, Deposit growth was primarily invested in high-quality agency mortgage backed securities and AAA-rated securities backed by consumer loans. Increasing our securities available for sale by $11.2 billion to $31.0 billion. • U.S. Treasury DepartmentÂ's Capital Purchase Program...

  • Page 59
    ... source of capital which we can use for the benefit of our customers and investors. OCC Minimum Payment Rules In March 2008, COBNA converted from a Virginia state-charted bank to a national association, which is regulated by the OCC. The OCC has minimum payment policies for the credit card industry...

  • Page 60
    ... On December 4, 2008, the Company announced its intention to acquire Chevy Chase Bank F.S.B., the largest retail depository institution in the Washington, D.C. region in a cash and stock transaction valued at approximately $520 million. On February 13, 2009, the Company received approval from the...

  • Page 61
    ... 19Â" and Part 1, Item 3. Â"Legal ProceedingsÂ". Sale of Interest in Spain During 2007, the Company completed the sale of its interest in a relationship agreement to develop and market consumer credit products in Spain and recorded a net gain related to this sale of $31.3 million consisting of a $41...

  • Page 62
    ... sub-segment, as discussed above, and in the CompanyÂ's outlook for total company managed charge-off dollars for the next twelve months associated with the allowance for loan and lease losses. The Company expects that the charge-off rate in the U.S. Card sub-segment will be around 8.1% in the first...

  • Page 63
    Capital Management: • The CompanyÂ's TCE (tangible common equity / tangible managed assets) ratio is currently impacted by unrealized losses associated with its investment portfolio. The Company does not anticipate that these unrealized losses would result in a materially permanent reduction in ...

  • Page 64
    ... years ended December 31, 2008, 2007 and 2006. CAPITAL ONE FINANCIAL CORPORATION Table 1: Financial Summary Year Ended December 31, (Dollars in thousands) Earnings (Reported): Net Interest Income ...Non-Interest Income: Servicing and securitizations...Service charges and other customer-related fees...

  • Page 65
    ... to $25.0 billion in 2008 while yields remained stable. The increase in the securities available for sale portfolio came as the Company continued to grow its deposit base and maintained our approach of holding high quality, low risk investments rather than taking excessive credit risk to generate...

  • Page 66
    ... and Other Customer-Related Fees For 2008, service charges and other customer-related fees grew 8% due to higher overlimit and cash advance fees. For 2007, service charges and other customer-related fees grew 16% due to the inclusion of North Fork and selective pricing changes in the U.S. Card sub...

  • Page 67
    ... marketing channels. Goodwill impairment The Company recorded an impairment to goodwill of $810.9 million, as a result of a reduced estimate of the fair value of the Auto Finance sub-segment due to business decisions to scale back origination volume in that business. For additional information...

  • Page 68
    ... on the managed charge-off rate for the CompanyÂ's credit card securitization programs. Year-to-date reported and managed net charge-off dollars increased 39% and 32%, respectively, compared to the prior year. For additional information, see section XI, Tabular Summary, Table F. Nonperforming Loans...

  • Page 69
    .... We maintain our books and records on a legal entity basis for the preparation of financial statements in conformity with GAAP. The following table presents information prepared from our internal management information system, which is maintained on a line of business level through allocations from...

  • Page 70
    ...-family real estate...Middle market...Small ticket commercial real estate ...Specialty lending...Total commercial lending...Small business lending...Consumer lending ...Mortgages ...Branch based home equity & other consumer ...Total consumer lending ...Net charge-off rate ...Non performing loans...

  • Page 71
    ...Total commercial lending ...Small business lending ...Consumer lending Mortgages...Branch based home equity & other consumer...Total consumer lending ...Total non performing asset rate ...Non-interest expense as a % of average loans held for investment ...Number of active ATMs ...Number of locations...

  • Page 72
    ... to incur North Fork Bank integration costs such as brand conversion and deposit system integration. In 2008, the Company opened 21 new banking locations across Louisiana, New Jersey, New York, Texas and Virginia while closing 24 branches. The costs of operating these branches, including lease costs...

  • Page 73
    ... North Fork. These activities progressed as planned during the year and all Hibernia related integration activities were completed. In 2007, the Company opened 39 new banking locations across Louisiana, New Jersey, New York, Texas and Virginia. The costs of operating these branches, including lease...

  • Page 74
    Company closed approximately 2 million inactive accounts during the second quarter of 2008. See below for a detailed discussion of the results of the U.S. Card, Auto Finance and International sub-segments. Year Ended December 31, 2007 Compared to Year Ended December 31, 2006 The National Lending ...

  • Page 75
    ...billion. The allowance for loan and lease losses increased $751.1 million, or 207%. The net charge-off rate increased 233 basis points over 2007 for a full-year rate of 6.33%, while the 30+ day delinquency rate increased 50 basis points to end the year at 4.78%. Total non-interest expenses decreased...

  • Page 76
    ... loans held for investment...3.74% 44.97% 47.12% Efficiency ratio...41.02% 3.88% 3.49% Net charge-off rate ...4.96% 30+ day delinquency rate ...8.03% 5.72% 8.64% 7,493 7,199 Number of total accounts (000s) ...7,381 The Other National Lending sub-segment consists of the Auto Finance and International...

  • Page 77
    ...-segment of Other National Lending) Table 6: Auto Finance As of and for the Year Ended December 31, (Dollars in thousands) 2008 2007 2006 Earnings (Managed Basis) Interest income...$ Interest expense...Net interest income ...Non-interest income...Total revenue ...Provision for loan and lease losses...

  • Page 78
    ...realized the benefits of the integration of the dealer programs of the legacy Capital One, Onyx, Hibernia, and North Fork auto lending businesses. International (a sub-segment of Other National Lending) Table 7: International As of and for the Year Ended December 31, (Dollars in thousands) 2008 2007...

  • Page 79
    .... Liquidity and Funding The Company manages liquidity risk to ensure that we can fund asset and loan growth, debt and deposit maturities and withdrawals, and payments of other corporate obligations. To achieve this, the CompanyÂ's Asset/Liability Management Committee and Finance Committee establish...

  • Page 80
    ..., credit rating, the nature of the investments, current market conditions and the CompanyÂ's intent and ability to hold the securities until anticipated recovery, which may be upon maturity. The Company recognized other-than-temporary impairment charges of $10.9 million for the year ended December...

  • Page 81
    ... Deposit Rates Year Ended December 31, 2008 Period End Balance Average Balance % of Deposits Average Deposit Rate Non-interest bearing...$ NOW accounts...Money market deposit accounts...Savings accounts...Other consumer time deposits...Total core deposits...Public fund certificates of deposit...

  • Page 82
    Credit Ratings The Company also meets its liquidity needs by accessing the capital markets for long-term funding by issuing asset-backed securities and senior and subordinated debt. Rating agencies base their ratings on numerous factors, including liquidity, capital adequacy, asset quality and ...

  • Page 83
    ... loans and home equity lines of credit. As of December 31, 2008, the Company had approximately $20.1 billion in securities and loans pledged as collateral to the FHLB. In addition, the CompanyÂ's FHLB membership is secured by the CompanyÂ's investment in FHLB stock, which totaled $267.5 million...

  • Page 84
    ...,760 2006: Federal funds purchased and resale agreements ...$ 3,736,470 $ 3,736,470 $ 1,662,961 Other ...3,198,710 1,716,055 1,323,998 Total...(1) $ 5,452,525 $ 2,986,959 In 2008, the Company repaid certain borrowings under lines of credit associated with securitizations of auto consumer loans. 66

  • Page 85
    ...deposits which have a contractual maturity date. Other borrowings includes secured borrowings for the CompanyÂ's on-balance sheet auto loan securitizations, junior subordinated capital income securities and debentures, FHLB advances, federal funds purchased and resale agreements and other short-term...

  • Page 86
    ...with business line expectations or, when available in the case of marketable securities, market expectations. As of December 31, 2008, the CompanyÂ's Asset/Liability Management Policy limited the change in projected 12-month earnings due to a gradual +/-200 basis points change in interest rates over...

  • Page 87
    ... 2.73 % 32,845 15.65 % Mortgage loans held for sale line item excludes the related lower of cost or market adjustments. Foreign Exchange Risk The Company is exposed to changes in foreign exchange rates which may impact translated income and expense associated with foreign operations. In order to...

  • Page 88
    ... manage interest rate exposure. In most cases, this exposure is related to the funding of fixed rate assets with floating rate obligations, including off-balance sheet securitizations. The Company also enters into forward foreign currency exchange contracts to reduce sensitivity to changing foreign...

  • Page 89
    ...but not limited to, asset growth, acquisitions, branching, new business lines, acceptance of brokered deposits and borrowings from the Federal Reserve. Progressively more burdensome restrictions are applied to banks in the undercapitalized category that fail to submit or implement a capital plan and...

  • Page 90
    ... of COBNA and CONA to transfer funds to the Company. As of December 31, 2008, retained earnings of COBNA and CONA of $239.3 million and zero, respectively, were available for payment of dividends to the Company without prior approval by the regulators. Additionally, applicable provisions that may be...

  • Page 91
    ...International Total consumer loans Commercial loans Total loans held for investment(4) Securities available for sale Other Domestic(3) International Total(3) Total earning assets(3) Cash and due from banks(3) Allowance for loan and lease losses(3) Premises and equipment, net(3) Other(3) Total assets...

  • Page 92
    ... to (Dollars in thousands) Increase (Decrease) Volume (1) 2007 vs. 2006 Change due to(1) Increase (Decrease) Volume Yield/ Rate Yield/ Rate Interest Income(3): Consumer loans Domestic...$ International...Total ...Commercial loans ...Total loans held for investment...Securities available for sale...

  • Page 93
    ...Dollars in thousands) 2008 2007 2006 2005 2004 Year-End Balances: Reported loans held for investment: Consumer loans...Credit cards ...Domestic ...$ International ...Total credit card ...Installment loans...Domestic ...International ...Total installment loans ...Auto loans ...Mortgage loans...Total...

  • Page 94
    Year Ended December 31 (Dollars in thousands) 2008 2007 2006 2005 2004 Average Balances: Reported loans held for investment: Consumer loans ...Credit cards...Domestic ...$ International ...Total credit card ...Installment loans ...Domestic ...International ...Total installment loans ...Auto loans ...

  • Page 95
    ...reported and managed basis. As of December 31 2008 % of Total Loans 2007 % of Total Loans 2006 % of Total Loans 2005 % of Total Loans 2004 % of Total Loans (Dollars in thousands) Loans Loans Loans Loans Loans Reported(1) : Loans held for investment ..$ 101,017,771 Loans delinquent: 30-59 days...

  • Page 96
    ... CompanyÂ's net charge-offs for the periods presented on a reported and managed basis. Year Ended December 31 (Dollars in thousands) 2008(1) 2007(1) 2006 2005 2004 Reported: Average loans held for investment...$ Net charge-offs ...Net charge-offs as a percentage of average loans held for investment...

  • Page 97
    ... for loan and lease losses for the periods indicated. Year Ended December 31 (Dollars In Thousands) 2008 2007 2006 2005 2004 Balance at beginning of year...$ Provision for loan and lease losses from continuing operations: Domestic ...International...Total provision for loan and lease losses...

  • Page 98
    Item 7A. Quantitative and Qualitative Disclosures about Market Risk The information required by Item 7A is included in Item 7, Â"ManagementÂ's Discussion and Analysis of Financial Condition and Results of OperationsÂ-Market Risk Management.Â" 80

  • Page 99
    ... Data) 2008 2007 Assets: Cash and due from banks...$ Federal funds sold and resale agreements...Interest bearing deposits at other banks ...Cash and cash equivalents ...Securities available for sale ...Mortgage loans held for sale...Loans held for investment...Less: Allowance for loan and lease...

  • Page 100
    ...: Servicing and securitizations ...Service charges and other customer-related fees ...Mortgage servicing and other ...Interchange ...Other ...Total non-interest income ...Non-Interest Expense: Salaries and associate benefits ...Marketing...Communications and data processing...Supplies and equipment...

  • Page 101
    ...Balance, December 31, 2005 ...Comprehensive income: ...Net income ...Other comprehensive income (loss), net of income tax: ...Unrealized gains on securities, net of income taxes of $16,635 ...Recognition of additional minimum pension liability, net of income tax benefit of $1,851 . Foreign currency...

  • Page 102
    ... Paid-In Capital, Net Retained Earnings Treasury Stock (In Thousands, Except Per Share Data) Cumulative Other Comprehensive Income (Loss) Total StockholdersÂ' Equity 95,048 4,678 26,612,433 Compensation expense for restricted stock awards and stock options...Allocation of ESOP shares... Balance...

  • Page 103
    ... loans held for sale: ...Transfers in and originations...Gains on sales...Proceeds from sales...Stock plan compensation expense ...Changes in assets and liabilities, net of effects from purchase of companies acquired:...(Increase) decrease in interest receivable ...(Increase) decrease in accounts...

  • Page 104
    ...GreenPoint Agency, Inc. and Hibernia Insurance Agency, LLC into Green Point Agency, Inc., which is now known as Capital One Agency LLC. On December 4, 2008, the Company announced its intention to acquire Chevy Chase Bank F.S.B. in a cash and stock transaction valued at approximately $520 million. On...

  • Page 105
    ... course of business, has involvement with or retains interests in VIEs in connection with some of its securitization activities, servicing activities, the purchase or sale of mortgage-backed and other asset backed securities in connection with its investment portfolio. The Company also makes loans...

  • Page 106
    ... recognize the funded status of their defined benefit plans in the Consolidated Balance Sheet, measure the fair value of plan assets and benefit obligations as of the date of the fiscal year-end Consolidated Balance Sheet, and provide additional disclosures. On December 31, 2006, the Company adopted...

  • Page 107
    ... 25, Accounting for Stock Issued to Employees and related Interpretations in accounting for its stock based compensation plans. Results for prior periods have not been restated. The Company has two active stock-based compensation plans, one employee plan and one non-employee director plan, which are...

  • Page 108
    ... and credit quality. The fair value of mortgage loans held for sale is impacted by changes in market interest rates. The exposure to changes in market interest rates is hedged primarily by selling forward contracts on agency securities. These derivative instruments are recorded on the balance sheet...

  • Page 109
    ...classified as available for sale securities in accordance with SFAS 115 and changes in the estimated fair value are recorded in other comprehensive income. The Company does not typically recognize servicing assets or servicing liabilities for servicing rights retained from credit card, auto loan and...

  • Page 110
    ... and related impacts to the Reported Consolidated Statements of Income is considered immaterial to the CompanyÂ's financial statements. Cash flows associated with loans that are originated with the intent to hold for investment are classified as investing cash flow, regardless of a subsequent change...

  • Page 111
    .... The Company continues to operate the mortgage servicing business and to report the changes in the fair value of MSRs in continuing operations. To evaluate and measure fair value, the underlying loans are stratified based on certain risk characteristics, including loan type, note rate and investor...

  • Page 112
    ... rate or foreign exchange risks. As part of this process, the Company considers the customersÂ' suitability for the risk involved, and the business purpose for the transaction. These derivatives do not qualify for hedge accounting and are considered trading derivatives with changes in fair value...

  • Page 113
    ... of credit card finance charge and fee receivables using an estimate of future nonprincipal losses. This formula is consistent with that used to estimate the allowance related to expected principal losses on reported loans. The suppression amount is calculated by adding any current period change in...

  • Page 114
    ...financial information is currently evaluated. The Company strategically manages and reports the results of its business through two operating segment levels: Local Banking and National Lending. The Local Banking segment includes the CompanyÂ's branch, treasury services and national deposit gathering...

  • Page 115
    ... present certain information regarding our continuing operations by segment: Year Ended December 31, 2008 Total Company National Lending Local Banking Other Total Managed Securitization Adjustments(1) Total Reported Net interest income ...$ Non-interest income...Provision for loan and lease losses...

  • Page 116
    ...$ (49,639,129) $ $ Â- $ Year Ended December 31, 2008 Other National Lending sub-segments Other National Lending Auto Finance Total National Lending National Lending U.S. Card International Net interest income ...$ Non-interest income...Provision for loan and lease losses ...Goodwill impairment...

  • Page 117
    ...11,656,922 $ 106,508,443 Year Ended December 31, 2006 Other National Lending sub-segments Other National Lending Total National Lending National Lending U.S. Card Auto Finance International Net interest income ...$ Non-interest income...Provision for loan and lease losses ...Other non-interest...

  • Page 118
    ...was reported in non-interest expense and held in the Other Segment. Visa Litigation and IPO During 2007, the Company recognized a pre-tax charge of $79.8 million for liabilities in connection with the Visa antitrust lawsuit settlement with American Express. Additionally, the Company recorded a legal...

  • Page 119
    ... 4 Securities Available for Sale Securities available-for-sale, aggregated by investment category, and based on expected maturities as of December 31, 2008, 2007, and 2006 were as follows: Expected Maturity Schedule(1) 1 Year or Less 1Â-5 Years 5Â-10 Years Over 10 Years Market Value Totals Amortized...

  • Page 120
    ... so that all tables in this Note reflect consistent classification of securities among investment categories. Other GSE and FDIC Debt Guarantee Program (Â"DGPÂ") include investments in senior unsecured debt issued under the DGP of $542.5 million in market value as of December 31, 2008. 102

  • Page 121
    ... the investments, current market conditions, and the CompanyÂ's intent and ability to hold the securities until anticipated recovery, which may be maturity. The Company continually monitors the ratings of our security holdings and conducts regular reviews of the CompanyÂ's credit sensitive assets to...

  • Page 122
    ... Mac...Other GSE ...Non GSE ...Total CMO ...Mortgage backed securities Fannie Mae...Freddie Mac...Other GSE ...Non GSE ...Total MBS ...Asset backed securities ...Other ...Total...$ December 31, 2006 U.S. Treasury and other U.S. government agency obligations U.S. Treasury...$ Fannie Mae...Freddie...

  • Page 123
    ... million in other-than-temporary impairment charges on an equity investment related to CRA investments in the year ended December 31, 2008 due to declining stock values and market concerns on performance. For the remaining investments, since the Company believes it has the ability and intent to hold...

  • Page 124
    Weighted Average Yields 1 Year or Less 1Â-5 Years 5Â-10 Years Over 10 Years December 31, 2008 U.S. Treasury and other U.S. government agency obligations U.S. Treasury...Fannie Mae...Freddie Mac...Other GSE and DGP...Total U.S. Treasury and other U.S. government agency obligations ...Collateralized ...

  • Page 125
    ... % Certain information disclosed for the years ended December 31, 2007, and 2006 has been revised in these tables from the versions that appeared in prior 10-Ks to reflect a change in methodology to certain weighted average yield information and to reclassify securities among investment categories...

  • Page 126
    ... investment portfolio was as follows: December 31 2008 2007 Year-End Balances: Reported loans: Consumer loans:...Credit cards...Domestic ...$ International ...Total credit cards ...Installment loans Domestic ...International ...Total installment loans...Auto loans ...Mortgage loans...Total consumer...

  • Page 127
    ..., of unused credit card lines. While this amount represented the total unused available credit card lines, the Company has not experienced, and does not anticipate, that all of its customers will exercise their entire available line at any given point in time. The Company generally has the right to...

  • Page 128
    ... to minimum lease payments. Note 7 Goodwill and Other Intangible Assets In 2006, the Company acquired North Fork Bancorporation, Inc., (Â"North ForkÂ") a commercial and retail bank in New York, which created $9.7 billion of goodwill. The goodwill associated with the acquisition of North Fork was...

  • Page 129
    ... analysis required management to make judgments about future loan and deposit growth, revenue growth, credit losses, and capital rates. The cash flows were discounted to present value using reporting unit specific discount rates that are largely based on the CompanyÂ's external cost of equity with...

  • Page 130
    ... under current lease contracts and the fair market value of the lease contracts at the acquisition date. The other intangible items relate to customer lists, brokerage relationships and insurance contracts. The following table summarizes the CompanyÂ's purchase accounting intangible assets subject...

  • Page 131
    ...Bank notesÂ-fixed rate ...$ Corporation-fixed rate...Corporation-variable rate ...Total senior and subordinated notes...$ Other borrowings Secured borrowings ...$ Junior subordinated debentures...FHLB advances...Federal funds purchased and resale agreements ...Other short-term borrowings(1) ...Total...

  • Page 132
    ... Borrowings Secured Borrowings The Company issued securitizations in which it transfers pools of consumer loans that are accounted for as secured borrowings at December 31, 2008. The agreements were entered into between 2005 and 2007, relating to the transfers of pools of consumer loans totaling $25...

  • Page 133
    ...,648 Includes only those interest bearing deposits which have a contractual maturity date. Note 9 Stock Plans The Company has two active stock-based compensation plans, one employee plan and one non-employee director plan. Under the plans, the Company reserves common shares for issuance in various...

  • Page 134
    ... also issues cash equity units which are recorded as liabilities as expense is recognized. Cash equity units are not issued out of the CompanyÂ's stock-based compensation plans because they are settled with a cash payment for each unit vested equal to the fair market value of the CompanyÂ's stock on...

  • Page 135
    ... Asset Relief Program Capital Purchase Program (Â"CPPÂ") or one year after retirement from the Company. Compensation expense of $6.0 million related to these awards will be recognized in 2009 under SFAS 123R. 2008 CEO Grant In December 2007, the CompanyÂ's Board of Directors approved a compensation...

  • Page 136
    ...and $4.8 million in compensation expense for the years ended December 31, 2008, 2007 and 2006, respectively. Under the Purchase Plan, associates of the Company are eligible to purchase common stock through monthly salary deductions of a maximum of 15% and a minimum of 1% of monthly base pay. To date...

  • Page 137
    ... stock or other equity or capital securities, other than in connection with benefit plans consistent with past practice and certain other circumstances specified in the Securities Purchase Agreement. Common Shares Secondary Equity Offering On September 30, 2008, the Company raised $760.8 million...

  • Page 138
    ...with Credit Suisse, New York Branch (Â"CSNYÂ"). Under the ASR agreement, the Company purchased $1.5 billion of its $.01 par value common stock at an initial price of $73.57 per share, the closing price of the CompanyÂ's common stock on the New York Stock Exchange on April 2, 2007, the effective date...

  • Page 139
    ...common share: Year Ended December 31 (Shares in Thousands) 2008 2007 2006 ...available to common shareholders...$ Denominator: Denominator for basic earnings per share-Weighted-average shares ...Effect of dilutive securities (1): Stock options ...Contingently issuable shares ...Restricted stock...

  • Page 140
    ... the CompanyÂ's Associate Savings Plan at the end of 2007. As a result, there were no contributions of cash and shares of the CompanyÂ's common stock to these plans in 2008. In prior years, contributions of cash and shares of the CompanyÂ's common stock totaled $35.6 million and $12.6 million for...

  • Page 141
    ...sum cash payments to former employees of GreenPointÂ's mortgage origination operations in exchange for their rights to receive specified pension benefits. During 2007, the Company recognized curtailments attributable to the freezing of one of the qualified plans assumed in the North Fork acquisition...

  • Page 142
    ... Pension Benefits 2008 2007 Postretirement Benefits 2008 2007 Assumptions for benefit obligations at measurement date: Discount rate ...Rate of compensation increase...Assumptions for periodic benefit cost for the year ended: Discount rate ...Expected long-term rate of return on plan assets ...Rate...

  • Page 143
    ... plans. A one-percentage point change in assumed health care cost trend rates would have the following effects: 2008 1% Increase 1% Decrease 1% Increase 2007 1% Decrease Effect on year-end postretirement benefit obligation...$ Effect on total service and interest cost components ...$ Plan Assets...

  • Page 144
    ... a recurring basis on the consolidated balance sheet. December 31, 2008 Fair Value Measurements Using Level 1 Level 2 Level 3 Assets/Liabilities at Fair Value Assets Securities available for sale ...$ 291,907 $ 28,331,103 $ Other assets ...Mortgage servicing rights ...Â- Â- (1) 2,380,261 $ 150,544...

  • Page 145
    ... Level 3 assets increased $2.7 billion for the year ended December 31, 2008, due primarily to the reclassification of AAA rated non-agency mortgage backed securities backed by prime jumbo collateral. The ongoing capital markets dislocation has decreased new issuance and secondary trading volumes for...

  • Page 146
    ... are recorded in provision for loan and lease losses in the consolidated statement of income. December 31, 2008 Fair Value Measurements Using Level 1 Level 2 Level 3 Assets at Fair Value Total Losses in 2008 Assets Mortgage loans held for sale ...$ Loans held for investment ...Total ...$ Fair Value...

  • Page 147
    Financial Assets 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 approximate fair value. Securities available for sale Quoted prices in active markets are used to measure the fair value ...

  • Page 148
    ... current market rates for similar products with similar remaining 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 measured using the trade...

  • Page 149
    ... the Company. Servicing income, which includes contractual servicing fees, late fees and ancillary fees, totaled $94.2 million, $174.3 million and $7.5 million for the year ended December 31, 2008, 2007 and 2006, respectively. In December 2006, the Company completed its acquisition of North Fork and...

  • Page 150
    ...Employee termination benefits include charges for executives and charges for associates of the Company of $18.7 million and $67.2 million, respectively, for the year ended December 31, 2008. The Company made $100.8 million and $37.2 million in cash payments for restructuring charges during the year...

  • Page 151
    ...,964 Income tax benefits of $31.7 million and $121.9 million in 2008 and 2007, respectively, were allocated directly to reduce goodwill from acquisitions. Income tax benefit reported in shareholdersÂ' equity was as follows: Year Ended December 31 2008 2007 2006 Foreign currency translation gains...

  • Page 152
    ...life of the related credit card receivables. These items are recognized in the income statement as income in the year earned. For income statement purposes, late fees are reported as interest income, and cash advance fees and overlimit fees are reported as non- interest income. December 31 2008 2007...

  • Page 153
    ...Â's credit card business in various tax years. It is reasonably possible that a settlement related to these timing issues, as well as a settlement of the audits of certain acquired subsidiaries, may be made within twelve months of the reporting date. At this time, an estimate of the potential change...

  • Page 154
    ...related foreign exchange gains or losses on the items to which they are designated. The Company has non-trading and trading derivatives that do not qualify as hedges. These derivatives are carried at fair value and changes in value are included in current earnings. The Asset and Liability Management...

  • Page 155
    ... to foreign currency exchange rate changes on its foreign currency denominated loans. The forward rate agreements allow the Company to Â"lock-inÂ" functional currency equivalent cash flows associated with the foreign currency denominated loans. Any unrealized gains or losses related to cash flow...

  • Page 156
    ... recorded on the balance sheet at fair value with changes in value included in current earnings in non-interest income. For the years ended December 31, 2008, 2007, and 2006, the Company recognized gains on the trading derivatives of $6.8 million, $3.2 million and $3.9 million, respectively. Credit...

  • Page 157
    ... which qualify as sales under GAAP have been removed from the CompanyÂ's Â"reportedÂ" balance sheet, but are included within the Â"managedÂ" financial information, as shown in the table below. Supplemental Loan Information Year Ended December 31 2008 Loans Outstanding Loans Delinquent Loans...

  • Page 158
    ... as available for sale securities in accordance with SFAS 115 and changes in the estimated fair value are recorded in other comprehensive income. During 2008, the Company recorded a reduction in the interest-only strip of $224.8 million due predominately to increased credit losses related to...

  • Page 159
    ...these rights since the contractual servicing fee approximates market rates. Cash Flows Related to the Off Balance Sheet Securitizations The Company receives proceeds from the trusts for off-balance sheet loans that are transferred and sold to external investors. The sources of funds available to pay...

  • Page 160
    ... events related to the CompanyÂ's securitizations accounted for as secured borrowings have occurred for the years ended December 31, 2008 and 2007. Collections of interest and fees received on securitized receivables are used to pay interest to investors, servicing and other fees, and are available...

  • Page 161
    ... letters of credit after the securities are released, the right to residual funds in the securitizations after all other certificates have been paid and the obligation to pay certain negligible ongoing fees related to the transactions. The balance of the funded letters of credit was $221 million and...

  • Page 162
    ... things, that exclusionary agreements in the MasterCard and Visa rules prevented their member banks from issuing Discover cards. In October 2008, the parties announced a settlement of the lawsuit. The Company and its subsidiaries were not defendants in the Discover Lawsuit, but the lawsuit qualified...

  • Page 163
    ... in the ordinary course of business. Off-balance sheet activities typically utilize SPEs that may be in the form of limited liability companies, partnerships or trusts. The SPEs raise funds by issuing debt to third party investors. The SPEs hold various types of financial assets whose cash flows are...

  • Page 164
    ... funds that hold ownership interests in VIEs or provide debt financing to VIEs to support multi-family affordable housing properties. The Company receives affordable housing tax credits for these investments. The activities of these entities are financed with a combination of invested equity capital...

  • Page 165
    ... qualitative measures of their assets and off-balance sheet items. The Federal Reserve holds the Corporation to similar minimum capital requirements. Failure to meet minimum capital requirements can result in possible additional, discretionary actions by a federal banking agency that, if undertaken...

  • Page 166
    .... COBNA holds on average 200% of the total risk-based capital charge that would otherwise apply to such assets. This results in higher levels of regulatory capital at COBNA. Additionally, regulatory restrictions exist that limit the ability of COBNA and CONA to transfer funds to the Corporation. As...

  • Page 167
    ... customerÂ's credit application and evaluates the applicantÂ's financial history and ability and willingness to repay. Loans are made on an unsecured and secured basis. Certain commercial, small business, mortgage and automobile loans require collateral in various forms including cash deposits...

  • Page 168
    ...Europe and Capital One BankÂ-Canada Branch, a foreign branch office of COBNA that provides consumer lending products in Canada. The total assets, revenue, income before income taxes and net income of the international operations are summarized below. 2008 2007 2006(2) Domestic Total Assets ...$ 161...

  • Page 169
    ... to include separate annual financial statements. December 31 Balance Sheets 2008 2007 Assets: ...Cash and cash equivalents ...$ 8,546,995 Investment in subsidiaries...25,323,057 Loans to subsidiaries...1,189,173 Securities available for sale ...6,840 Other ...983,920 Total assets ...$ 36,049,985...

  • Page 170
    ...notes ...Stock plan compensation expense ...Decrease (increase) in other assets ...Increase (decrease) in other liabilities ...Net cash provided by operating activities ...Investing Activities: Decrease (increase) in investment in subsidiaries...Purchases of securities available for sale ...Proceeds...

  • Page 171
    ... of internal control over financial reporting. As defined by the SEC, internal control over financial reporting is a process designed under the supervision of the CompanyÂ's principal executive officer and principal financial officer, and effected by the companyÂ's board of directors, management and...

  • Page 172
    ...One Financial Corporation as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholdersÂ' equity, and cash flows for each of the three years in the period ended December 31, 2008 of Capital One Financial Corporation and our report dated February 26, 2009 expressed...

  • Page 173
    ... Capital One Financial Corporation as of December 31, 2008 and 2007, and the related consolidated statements of income, changes in stockholdersÂ' equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company...

  • Page 174
    ...)...$ Dividends...Market prices High...Low...Average common shares (000s)...Average common shares and common equivalent shares (000s) ...Average Balance Sheet Data: (In Millions) Loans held for investment(3) ...$ Total assets(3) ...Interest-bearing deposits ...Total deposits...StockholderÂ's equity...

  • Page 175
    ... and reporting information required to be disclosed within the time periods specified in the Securities and Exchange CommissionÂ's rules and forms. The Corporation has established a Disclosure Committee consisting of members of senior management to assist in this evaluation. (b) Internal Controls...

  • Page 176
    ... 120 days of the end of the CorporationÂ's 2008 fiscal year. Item 11. Executive Compensation The information required by Item 11 will be included in the Proxy Statement under the headings Â"Director Compensation,Â" Â"Named Executive Officer CompensationÂ" and Â"Compensation Committee Report,Â" and...

  • Page 177
    ... Changes in StockholdersÂ' EquityÂ-Years ended December 31, 2008, 2007 and 2006 Consolidated Statements of Cash FlowsÂ-Years ended December 31, 2008, 2007 and 2006 Notes to Consolidated Financial Statements ManagementÂ's Report on Internal Control over Financial Reporting Report of Registered Public...

  • Page 178
    ... by the undersigned, thereunto duly authorized. CAPITAL ONE FINANCIAL CORPORATION By: /S/ RICHARD D. FAIRBANK Richard D. Fairbank Chairman of the Board, Chief Executive Officer and President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 179
    ... and Plan of Merger, dated as of March 12, 2006, between Capital One Financial Corporation and North Fork Bancorporation (incorporated by reference to the CorporationÂ's Report on Form 8-K, filed on March 16, 2006). Stock Purchase Agreement, dated as of December 3, 2008, by and among Capital One...

  • Page 180
    ...2006). Copy of Capital Security Certificate (incorporated by reference to Exhibit 4.5 of the CorporationÂ's Current Report on Form 8K, filed on August 4, 2006) Third Supplemental Indenture, dated as of February 5, 2007, between Capital One Financial Corporation and The Bank of New York, as indenture...

  • Page 181
    ...to Exhibit 99.1 of the CorporationÂ's Report on Form 8-K, filed December 23, 2004). 10.2.6 Form of Restricted Stock Award Agreement between Capital One Financial Corporation and certain of its executives or associates pursuant to the CompanyÂ's 2004 Stock Incentive Plan (incorporated by reference to...

  • Page 182
    ... Corporation, 2005 Directors Compensation Plan Summary (incorporated by reference to Exhibit 99.1 of the CorporationÂ's Report on Form 8-K, filed on May 4, 2005). Form of Change of Control Employment Agreement between Capital One Financial Corporation and each of its named executive officers...

  • Page 183
    Exhibit Number Description 32.1* 32.2* * ** Certification** of Richard D. Fairbank Certification** of Gary L. Perlin Indicates a document being filed with this Form 10-K. Information in this 10-K furnished herewith shall not be deemed to be Â"filedÂ" for the purposes of Section 18 of the 1934 Act ...

  • Page 184

  • Page 185
    ... Time Capital One Headquarters 1680 Capital One Drive McLean, VA 22102 Principal Investor Contact Jeff Norris Managing Vice President, Investor Relations Capital One Financial Corporation 1680 Capital One Drive McLean, VA 22102 (703) 720-1000 Common Stock Listed on New York Stock Exchange® Stock...

  • Page 186
    1680 Capital One Drive Created and produced by Capital One and the following: Fultz and Associates, Inc., Production Cert no. SW-COC-001215 McLean, VA 22102 (703) 720-1000 www.capitalone.com 10% Allied Printing Services, Inc., Printing