Capital One 2009 Annual Report Download - page 132
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119
The carrying amount of these loans is included in the balance sheet amounts of loans held for investment at December 31, 2009 and is
as follows:
Impaired
Loans Non-Impaired
Loans
Total Loans
Outstanding Balance ...............................................................................................
.
$ 7,113,749 $ 2,150,197 $ 9,263,946
Carrying Amount ....................................................................................................
.
$ 5,255,850 $ 1,994,625 $ 7,250,475
Accretable Yield Activity
Impaired
Loans Non-Impaired
Loans
Total Loans
Balance at January 1, 2009 .....................................................................................
.
$ — $ — $ —
Additions ................................................................................................................
.
1,860,697 499,245 2,359,942
Accretion ................................................................................................................
.
(209,604) (83,587) (293,191)
Balance at December 31, 2009 ...............................................................................
.
$ 1,651,093 $ 415,658 $ 2,066,751
Expected Principal Losses
Impaired
Loans Non-Impaired
Loans
Total Loans
Balance at January 1, 2009 .....................................................................................
.
$ — $ — $ —
Additions ................................................................................................................
.
2,053,501 153,643 2,207,144
Principal losses .......................................................................................................
.
(335,636) (35,691) (371,327)
Balance at December 31, 2009 ...............................................................................
.
$ 1,717,865 $ 117,952 $ 1,835,817
Note 4
Discontinued Operations
Shutdown of Mortgage Origination Operations of Wholesale Mortgage Banking Unit
In the third quarter of 2007, the Company shut down the mortgage origination operations for GreenPoint of its wholesale mortgage
banking unit, GreenPoint Mortgage (“GreenPoint”). GreenPoint was acquired by the Company in December 2006 as part of the North
Fork acquisition. The results of the mortgage origination operations of GreenPoint have been accounted for as a discontinued
operation and have been removed from the Company’s results from continuing operations for the year ended December 31, 2009,
2008 and 2007. The Company will have no significant continuing involvement in the operations of the originate and sell business of
GreenPoint.
The loss from discontinued operations for the years ended December 31, 2009, 2008 and 2007 includes an expense of $162.3 million,
$103.7 million and $84.5 million, respectively, recorded in non-interest expense, for representations and warranties provided by the
Company on loans previously sold to third parties by GreenPoint’s mortgage origination operation. The expense for representations
and warranties is offset by a valuation adjustment for expected returns of spread account funding for certain securitization
transactions.
The following is summarized financial information for discontinued operations related to the closure of the Company’s wholesale
mortgage banking unit:
Year Ended
December 31,
2009
Year Ended
December 31,
2008
Year Ended
December 31,
2007
N
et interest income (loss) ............................................................................................
.
$ (2,306) $ 6,939 $ 62,402
N
on-interest income .....................................................................................................
.
31,675 5,544 140,245
Provision for loan and lease losses ..............................................................................
.
— — 80,151
N
on-interest expense ....................................................................................................
.
188,805 214,957 1,358,719
Income tax benefit .......................................................................................................
.
(56,600) (71,959) (214,836)
Loss from discontinued operations, net of taxes ......................................................
.
$ (102,836) $ (130,515) $ (1,021,387)