Capital One 2010 Annual Report Download - page 66

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● Deposits: Period-end deposits increased by $12.4 billion, or 20%, to $74.1 as of December 31, 2009, primarily due to the
acquisition of Chevy Chase Bank.
● Charge-off and Delinquency Statistics: The improvement in the net charge-off rate of 2.74% in 2009, compared with 3.09% in
2008 was primarily driven by more positive credit performance in the auto business resulting from a larger proportion of higher
quality loans originated in 2008 and 2009 and improvements in auto auction recovery price. The 30+ day performing delinquency
rate also declined to 5.06% as of December 31, 2009, from 6.31% as of December 31, 2008.
Commercial Banking Business
Our Commercial Banking business generated income of $160 million in 2010, compared with a loss of $213 million in 2009 and
income of $254 million in 2008. The primary sources of revenue for our Commercial Banking business are net interest income and
non-interest income from customer fees. Expenses primarily consist of ongoing operating costs, such as salaries and associated
benefits, communications and other technology expenses, supplies and equipment and occupancy costs.
Table 9 summarizes the financial results of our Commercial Banking business and displays selected key metrics for the periods
indicated.
Table 9: Commercial Banking Business Results
Change
Year Ended December 31, 2010 vs. 2009 vs.
(Dollars in millions) 2010 2009 2008 2009 2008
Selected income statement data:
N
et interest income ...................................
.
$ 1,292 $ 1,144 $ 962 13% 19%
N
on-interest income ...................................
.
181 172 144 5 19
Total revenue .........................................
.
1,473 1,316 1,106 12 19
Provision for loan and lease losses ......................
.
429 983 234 (56) 320
N
on-interest expense ..................................
.
796 661 481 20 37
Income from continuing operations before income taxes . .
.
248 (328) 391 176 (184)
Income tax provision ..................................
.
88 (115) 137 177 (184)
Income from continuing operations, net of tax ...........
.
$ 160 $ (213) $ 254 175% (184)%
Selected metrics:
Average loans held for investment:
Commercial and multifamily real estate ...............
.
$ 13,497 $ 13,858 $ 12,830 (3)% 8%
Middle market ......................................
.
10,353 10,098 9,172 3 10
Specialty lending ...................................
.
3,732 3,567 3,596 5 (1)
Total commercial lending ..........................
.
27,582 27,523 25,598 ** 8
Small-ticket commercial real estate ...................
.
1,994 2,491 3,115 (20) (20)
Total commercial banking .........................
.
$ 29,576 $ 30,014 $ 28,713 (1)% 5%
Average yield on loans held for investment ..............
.
5.06% 5.02% 5.89% 4 bps (87)bps
Average deposits ......................................
.
$ 22,186 $ 17,572 $ 16,554 26% 6%
Average deposit interest rate ...........................
.
0.69% 0.81% 1.77% (12 )bps (96)bps
Core deposit intangible amortization ....................
.
$ 55 $ 43 $ 39 28% 10%
N
et charge-off rate(1) ..................................
.
1.32% 1.45% 0.29% (13)bps 116 bps