Capital One 2012 Annual Report Download - page 2

1
For more than 20 years, all of us at Capital One have been focused on building an enduringly great franchise with
the balance sheet, scale, talent, capabilities, and brand to compete and win in banking. In 2011, we announced
the transformational acquisitions of ING Direct and HSBC’s U.S. credit card business. 2012 was another important
year of solid progress toward our goal of creating one of America’s great companies by changing banking for the
good of the customer.
We delivered solid results in 2012. Financial performance was strong for the Company and each of our businesses.
We successfully closed the two big acquisitions with minimal disruption, and we’re simultaneously delivering two
very well-managed integrations. We’re generating capital on a strong trajectory. We passed the Federal Reserve’s
Comprehensive Capital Analysis and Review (CCAR) stress test, and are on track to achieve new regulatory capital
requirements in 2013, years ahead of regulatory deadlines. We continue to make good progress on foundational
work to create a company-defining customer experience. We’re positioned at the forefront of the digital revolution
that is reshaping the world of financial services. And our relentless quest to find, nurture, and empower talented
people continues to pay off. Our progress in 2012 puts us in a strong position to continue building a great company
and to deliver long-term value to our shareholders, customers, and associates.
We delivered strong financial performance in 2012
2012 was a profitable year despite the ongoing challenges of an uncertain economic recovery and low interest
rates. Direct year-over-year comparisons of many of our metrics are difficult because of significant, non-recurring
merger-related impacts and the new operating baselines created by the acquisitions of ING Direct and the HSBC
U.S. credit card business.
Operating earnings for 2012 were $3.73 billion, up from $3.25 billion in 2011. Despite the growth in operating
earnings, earnings per share declined modestly from the prior year as a result of increased share count resulting
from our acquisitions. Earnings per share for 2012 were $6.16, compared to $6.80 for 2011.
Revenues were $21.40 billion. Non-interest expense (including marketing) was $11.95 billion. Credit continued to
improve, with the 2012 charge-off rate at 1.89%, down from 2.94% in 2011.
Chairman’s Letter to Shareholders and Friends