Capital One 2013 Annual Report Download - page 79

Table 3 displays the change in our net interest income between periods and the extent to which the variance is
attributable to: (i) changes in the volume of our interest-earning assets and interest-bearing liabilities or
(ii) changes in the interest rates related to these assets and liabilities.
Table 3: Rate/Volume Analysis of Net Interest Income(1)
2013 vs. 2012 2012 vs. 2011
(Dollars in millions)
Total
Variance Volume Rate
Total
Variance Volume Rate
Interest income:
Loans:
Credit card ....................... $ 726 $408 $ 318 $2,524 $2,572 $ (48)
Consumer banking ................. (88) 37 (125) 1,168 2,626 (1,458)
Commercial banking ............... 59 190 (131) 46 214 (168)
Other ........................... (19) 4 (23) 27 (7) 34
Total loans, including loans held for sale . . . 678 639 39 3,765 5,405 (1,640)
Investment securities ................... 246 147 99 192 445 (253)
Cash equivalents and other interest-earning
assets ............................. 10 (35) 45 20 20 —
Total interest income ............... 934 751 183 3,977 5,870 (1,893)
Interest expense:
Deposits ............................. (162) 33 (195) 216 635 (419)
Securitized debt obligations ............. (88) (61) (27) (151) (127) (24)
Senior and subordinated notes ............ (30) 41 (71) 45 56 (11)
Other borrowings ...................... (303) 44 (347) 19 158 (139)
Total interest expense .............. (583) 57 (640) 129 722 (593)
Net interest income ................ $1,517 $694 $ 823 $3,848 $5,148 $(1,300)
(1) We calculate the change in interest income and interest expense separately for each item. The change in net interest income attributable
to both volume and rates is allocated based on the relative dollar amount of each item.
Non-Interest Income
Non-interest income primarily consists of service charges and other customer-related fees, interchange income
(net of rewards expense), other non-interest income and, in 2012, the bargain purchase gain attributable to the
ING Direct acquisition in the amount of $594 million. Other non-interest income includes the pre-tax provision
for home loan representation and warranty related to continuing operations. It also includes gains and losses from
the sale of investment securities, gains and losses on derivatives not accounted for in hedge accounting
relationships and hedge ineffectiveness, which we generally do not allocate to our business segments because
they relate to centralized asset/liability and market risk management activities undertaken by our Corporate
Treasury group.
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