Capital One 2013 Annual Report Download - page 144

Market risk: Market risk is the risk that an institution’s earnings or the economic value of equity could be
adversely impacted by changes in interest rates, foreign exchange rates, or other market factors
Master netting agreement: An agreement between two counterparties that have multiple contracts with each
other that provides for the net settlement of all contracts through a single payment in the event of default or
termination of any one contract.
Mortgage-Backed Security (“MBS”): An asset backed security whose cash flows are backed by the principal
and interest payments of a set of mortgage loans.
Mortgage Servicing Rights (“MSR”): The right to service a mortgage loan when the underlying loan is sold or
securitized. Servicing includes collections for principal, interest and escrow payments from borrowers and
accounting for and remitting principal and interest payments to investors.
Net interest margin: The result of dividing net interest revenue by average interest-earning assets.
Nonperforming loans and leases: Loans and leases that have been placed on non-accrual status.
Operational risk: The risk of loss resulting from inadequate or failed processes or systems, human factors or
external events.
Option-ARM Loans: The option-ARM real estate loan product is an adjustable-rate mortgage loan that provides
the borrower with the option each month to make a fully amortizing, interest-only or minimum payment.
Other-than-temporary impairment (“OTTI”): An impairment charge taken on a security whose fair value has
fallen below the carrying value on the balance sheet and its value is not expected to recover through the holding
period of the security.
Patriot Act: The USA PATRIOT ACT of 2001 (Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism).
Portfolio Sale: The sale of the Best Buy private label and co-branded credit card portfolio to Citibank, N.A.,
which was completed on September 6, 2013.
Proxy Statement: Capital One’s Proxy Statement for the 2014 Annual Stockholder Meeting.
Public Fund deposits: Deposits that are derived from a variety of political subdivisions such as school districts
and municipalities.
Purchase volume: Dollar amount of customer purchases, net of returns.
Rating Agency: An independent agency that assesses the credit quality and likelihood of default of an issue or
issuer and assigns a rating to that issue or issuer.
Repurchase Agreement: An instrument used to raise short term funds whereby securities are sold with an
agreement for the seller to buy back the securities at a later date.
Restructuring charges: Charges typically from the consolidation and/or relocation of operations.
Return on assets: Income divided by average assets.
Return on common equity: Income divided by average common shareholders’ equity.
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