Capital One 2014 Annual Report Download - page 97

Deposits
Our deposits represent our largest source of funding for our operations, providing a consistent source of low-cost
funds. Total deposits increased by $1.0 billion to $205.5 billion as of December 31, 2014, from $204.5 billion as
of December 31, 2013. The increase in deposits was primarily driven by the growth in our Consumer Banking
and Commercial Banking businesses as a result of our continued focus on deepening deposit relationships with
existing customers and our continued marketing strategy to attract new business. We provide information on the
composition of our deposits, average outstanding balances, interest expense and yield below in “Liquidity Risk
Profile.”
Securitized Debt Obligations
Securitized debt obligations increased by $1.3 billion during 2014, to $11.6 billion as of December 31, 2014, from
$10.3 billion as of December 31, 2013. The increase was driven by issuances of $4.3 billion of securitized debt
obligations during 2014, partially offset by maturities of $3.0 billion. We provide additional information on our
borrowings below in “Liquidity Risk Profile.”
Other Debt
Other debt, which consists primarily of federal funds purchased and securities loaned or sold under agreements to
repurchase, senior and subordinated notes and FHLB advances, totaled $36.8 billion as of December 31, 2014, of
which $17.1 billion represented short-term borrowings and $19.7 billion represented long-term debt. Other debt
totaled $30.4 billion as of December 31, 2013, of which $16.2 billion represented short-term borrowings and $14.2
billion represented long-term debt.
The increase in other debt of $6.4 billion in 2014 was primarily attributable to the issuance of $7.8 billion of
unsecured senior notes, as well as net increases of $1.0 billion in FHLB advances, partially offset by maturities of
$2.4 billion in unsecured senior notes. We provide additional information on our borrowings below in “Liquidity
Risk Profile” and in “Note 9—Deposits and Borrowings.”
Mortgage Representation and Warranty Reserve
We acquired three subsidiaries that originated residential mortgage loans and sold these loans to various purchasers,
including purchasers who created securitization trusts. These subsidiaries are Capital One Home Loans, LLC, which
was acquired in February 2005; GreenPoint, which was acquired in December 2006 as part of the North Fork
Bancorporation, Inc. (“North Fork”) acquisition; and CCB, which was acquired in February 2009 and subsequently
merged into CONA.
We have established representation and warranty reserves for losses associated with the mortgage loans sold by
each subsidiary that we consider to be both probable and reasonably estimable, including both litigation and non-
litigation liabilities. These reserves are reported on our consolidated balance sheets as a component of other liabilities.
The reserve setting process relies heavily on estimates, which are inherently uncertain, and requires the application
of judgment. We evaluate these estimates on a quarterly basis. We build our representation and warranty reserves
through the provision for mortgage representation and warranty losses, which we report in our consolidated
statements of income as a component of non-interest income for loans originated and sold by CCB and Capital One
Home Loans, LLC and as a component of discontinued operations for loans originated and sold by GreenPoint. The
aggregate reserve for all three entities totaled $731 million as of December 31, 2014, compared to $1.2 billion as of
December 31, 2013.
75 Capital One Financial Corporation (COF)