Capital One 2012 Annual Report Download - page 129

(1) Includes an adjustment of $53 million made in the second quarter of 2010 for the impact as of January 1, 2010 of impairment on
consolidated loans accounted for as TDRs.
(2) The total provision for credit losses reported in our consolidated statements of income of $4.4 billion, $2.4 billion and $3.9 billion in
2012, 2011 and 2010, respectively, consists of a provision for loan and lease losses and a provision for unfunded lending commitments.
The provision for credit losses reported in the above table relates only to the provision for loan and lease losses. It does not include the
negative provision for unfunded lending commitments of $35 million in 2012 and the provision for unfunded lending commitments of
$12 million in 2011 and 2010, respectively.
(3) Includes foreign translation adjustments of $15 million and $8 million in 2012 and 2011, respectively.
(4) Includes a reduction in our allowance for loan and lease losses of $73 million in 2010 attributable to the sale of certain interest-only
option-adjustable rate mortgage (“option-ARM”) bonds and the deconsolidation of securitization trusts related to CCB.
Table 24 presents an allocation of our allowance for loan and lease losses by loan category as of December 31,
2012 and 2011.
Table 24: Allocation of the Allowance for Loan and Lease Losses
December 31,
2012 2011
(Dollars in millions) Amount
% of Total
HFI Loans(1) Amount
% of Total
HFI Loans(1)
Credit Card business:
Domestic credit card and installment loans ............... $ 3,526 4.24% $ 2,375 4.20%
International credit card .............................. 453 5.26 472 5.58
Total credit card ................................ 3,979 4.34 2,847 4.37
Consumer Banking business:
Auto .............................................. 486 1.79 391 1.80
Home loan ......................................... 113 0.26 98 0.94
Retail banking ...................................... 112 2.87 163 3.97
Total consumer banking .......................... 711 0.95 652 1.80
Commercial Banking business:
Commercial and multifamily real estate .................. 239 1.35 415 2.64
Commercial and industrial ............................ 116 0.58 199 1.17
Total commercial lending ......................... 355 0.94 614 1.87
Small-ticket commercial real estate ..................... 78 6.52 101 6.75
Total commercial banking ........................ 433 1.12 715 2.08
Other loans ........................................ 33 17.65 36 20.57
Total ............................................. $ 5,156 2.50% $ 4,250 3.13%
Total allowance coverage ratios:
Period-end loans .................................... $205,889 2.50% $135,892 3.13%
Period-end loans (excluding acquired loans) .............. 168,755 3.02 131,207 3.24
Nonperforming loans(2) ............................... 1,054 489.18 1,059 401.32
Allowance coverage ratios by loan category:
Credit card (30 + day delinquent loans) .................. $ 3,388 117.44% $ 2,511 113.38%
Consumer banking (30 + day delinquent loans) ............ 2,510 28.33 2,176 29.96
Commercial banking (nonperforming loans) .............. 282 153.55 372 192.20
(1) Calculated based on the allowance for loan and lease losses attributable to each loan category divided by the outstanding balance of loans
within the specified loan category.
(2) As permitted by regulatory guidance issued by the FFIEC, our policy is generally not to classify domestic credit card loans as
nonperforming. We generally accrue interest on domestic credit card loans through the date of charge-off, which is typically in the period
that the loan becomes 180 days past due. The allowance for loan and lease losses as a percentage of nonperforming loans, excluding the
allowance related to our credit card loans, was 111.67% as of December 31, 2012 and 132.48% as of December 31, 2011.
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