Capital One 2011 Annual Report Download - page 8

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2010. Through our Diamond Dealer
program, we have been channeling our
efforts and resources into our strongest
dealer relationships, a strategy that
continues to pay off in earnings, credit
performance, and growth. After a major
turnaround, which we initiated in the
depths of the recession, Capital One Auto
Finance is poised to become one of the
few enduring, high-quality franchises
in auto finance.
In Home Loans, we kept our focus on
creating a strong platform for mortgages
and managing operations as effectively and efficiently as possible. We continue to diligently manage
the rep and warranty exposure inherited with our bank deals.
Commercial Banking delivered steady growth
and profitability throughout 2011
Commercial Banking turned in a strong performance, with net income of $532 million. Charge-offs, which ran
at half the national average throughout the Great Recession, improved to 57 basis points. We owe our success
to our conservative origination standards, the repositioning of the portfolio, and a favorable geographic footprint.
Revenues grew by 12%, thanks to loan growth of 14%, widening loan margins, and a 49% increase in
non-interest income. Our Commercial Banking business remains competitively well positioned, with a
focus on establishing and deepening primary banking relationships with our commercial customers, and
a middle-market lending strategy based on deep industry specialization in carefully selected segments
such as energy and equipment finance.
Our balance sheet is strong
Throughout the recession, we were able to keep our balance sheet in excellent shape. In an economic
landscape undergoing drastic, rapid change, we maintained ample liquidity. We are largely deposit-funded,
which means we face little risk from a downturn in the capital markets, and we have total liquidity reserves
of $35.8 billion. We ended 2011 with a strong tangible common equity ratio of 8.2% and a Tier 1 common
equity ratio of 9.7%.
From nearly 1,000 branches in carefully selected local markets, we’re serving customers
in New York, New Jersey, Connecticut, Delaware, Virginia, the District of Columbia,
Maryland, Louisiana, and Texas.