2. Forward looking statements
Forward-Looking Information
Please note that the following materials containing information regarding Capital One’s financial performance speak only as of the particular
date or dates indicated in these materials. Capital One does not undertake any obligation to update or revise any of the information
contained herein whether as a result of new information, future events or otherwise.
Certain statements in this presentation and other oral and written statements made by the Company from time to time, are forward-looking
statements, including those that discuss strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns,
earnings per share or other financial measures for Capital One and/or discuss the assumptions that underlie these projections, including
future financial and operating results, and the company’s plans, objectives, expectations and intentions. To the extent that any such
information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities
Litigation Reform Act of 1995. Numerous factors could cause our actual results to differ materially from those described in forward-looking
statements, including, among other things: general economic and business conditions in the U.S. and or the UK, including conditions
affecting consumer income, spending and repayments, changes in the credit environment in the U.S. and or the UK, including an increase or
decrease in credit losses, changes in the interest rate environment; continued intense competition from numerous providers of products and
services that compete with our businesses; financial, legal, regulatory or accounting changes or actions; changes in our aggregate accounts or
consumer loan balances and the growth rate and composition thereof; the amount of deposit growth; changes in the reputation of the credit
card industry and/or the company with respect to practices and products; the risk that Capital One’s acquired businesses will not be
integrated successfully; the risk that synergies from such acquisitions may not be fully realized or may take longer to realize than expected;
disruption from the acquisitions making it more difficult to maintain relationships with customers, employees or suppliers; the risk that the
benefits of the Company’s restructuring initiative, including cost savings, may not be fully realized; our ability to access the capital markets at
attractive rates and terms to fund our operations and future growth; losses associated with new products or services; the company’s ability to
execute on its strategic and operational plans; any significant disruption in our operations or technology platform; our ability to effectively
control our costs; the success of marketing efforts; our ability to recruit and retain experienced management personnel; changes in the labor
employment market; general economic conditions in the mortgage industry; and other factors listed from time to time in reports we file with
the Securities and Exchange Commission (the “SEC”), including, but not limited to, factors set forth under the caption “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2007. You should carefully consider the factors discussed above in evaluating
these forward-looking statements. All information in these slides is based on the consolidated results of Capital One Financial Corporation. A
reconciliation of any non-GAAP financial measures included in this presentation can be found in the Company’s most recent Form 10-K
concerning annual financial results, available on the Company’s website at www.capitalone.com in Investor Relations under “About Capital
One.”
2
3. Capital One is:
• Top 10 bank
A leading • $87.6B in deposits
financial institution – 14th largest depository institution in the U.S.
– Full service banking in the New York
metropolitan area, Louisiana and Texas
A top diversified • $151B in managed loans
lender • 5th largest credit card issuer2
1) Deposits total as of Q4 2007; ranking as of Q3 2007. Ranking includes domestic deposits.
3
2) VISA, MasterCard, Amex, Discover reported domestic Outstandings
4. Capital One is a diversified bank that is now primarily funded by
deposits
Relative Deposit Funding, Q4 2007
Deposits as a Percentage of Managed Liabilities1
100%
12
13
14 16 All Other3
19 19
90%
9
34 34
38
80% 14
Unsecured Debt
6
19
23 9
20
70%
18
Securitizations
28
12 12
60% 7 11
12
20 5
6
50%
Other Deposits
9 8
40% 5
23
69
30% 57 55
55
49
28
Core Deposits2
20% 39 39
26
10%
10
0%
Bank of Citi JPM Wachovia Wells US SunTrust Regions Capital
America Chase Fargo Bancorp One
% Deposit Funded: 48% 38% 49% 64% 66% 61% 73% 78% 47%
1. Deposits as a Percent of Managed Liabilities includes all balance sheet liabilities plus off-balance sheet securitizations
4
2. Core Deposits defined as Total Deposits, less jumbo time deposits, foreign deposits, and any unclassified deposits
3. Other includes short-term borrowing and Fed funds
Source: Company Reports
5. Our loan book has also diversified
$B
Managed Outstandings
$160 $151
$146**
$140
Banking
44
$120
$105*
$100 Global
Financial
29.3
$80
Services
$80 $71
$60 Auto
25.1
$60 Loans
$45
$40 $30
U.S.
$20
$17 52.1 Credit
$14
$20 Cards
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
*For YE 2005, Banking segment was included in “Other” category, and included Hibernia auto loans that were moved to Auto segment in
Q1 2006.
5
**For YE 2006, North Fork loans were included in “Other” category
6. Asset classes behave differently
U.S. 30 Day+ Delinquency Rate
Indexed to Q1 1998
Other Consumer
Mortgage-Related Commercial
250%
250% 250%
200%
200% 200%
Mortgage C&I
150%
150% 150%
Card
100%
100% 100%
Auto
CRE
50%
50% 50%
Home Equity
0%
0% 0%
1998Q1 2000Q1 2002Q1 2004Q1 2006Q1
1998Q1 2000Q1 2002Q1 2004Q1 2006Q1 1998Q1 2000Q1 2002Q1 2004Q1 2006Q1
6
Sources: FFIEC Consolidated reports of Condition and Income, Equifax
8. Capital One’s credit metrics reflect weakening in the U.S. economy
Monthly Managed Monthly Managed Delinquency
Net Charge-off Rate and Non-Performing Loan Rate
8%
8%
Bankruptcy
Filing Spike
7% National Lending
7%
Q108:
6% 5.34%
6%
5% National Lending
5% 30+ Delinquency Rate
Q108
4%
4% 4.73%
3% 3%
2% 2% Local Banking:
Non-performing loans
Q108:
Local Banking as % of loans
1% 0.31% Q108
1%
0.56%
0% 0%
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
8
9. Given the deteriorating outlook for the US economy, we have
increased our loan loss allowance
Allowance as % of Reported
Quarterly Highlights
30+ Delinquencies
200%
• Increased loan loss allowance by
$310M to $3.3B in Q108
US Card
165%
153%
150%
• Allowance consistent with managed
International
charge-offs of approximately $6.7B
129%
134%
over the next 12 months (through
Q109)
100%
Auto
64%
50%
44%
0%
Q107 Q207 Q307 Q407 Q108
Allowance as
% of Reported 2.3% 2.3% 2.4% 2.9% 3.3%
Loans
9
All Guidance as of Q108 Earnings Call - April 18, 2008
10. Substantial increase in revenue margin year-over-year largely offset
the adverse impact of higher credit costs
Margins Margin Drivers
12% • Year-over-year: US Card pricing and fee
changes drove substantial increase in
Revenue Margin
revenue margin
10% 10.43%
10.40%
9.20%
Risk-Adjusted Margin
8% • Quarter-over-quarter: Reduced US Card
7.45%
6.97% 7.06%
fees offset by more active balance sheet
6.78%
6.83%
management
6%
6.15%
Net Interest Margin
4%
2%
0%
Q107 Q207 Q307 Q407 Q108
10
All Guidance as of Q108 Earnings Call - April 18, 2008
11. We continue to drive efficiency gains
Quarterly Highlights
Efficiency Ratio
• Reduced headcount by 1,600 in Q108;
60%
5,400 since Q107
50.7%
50% 46.2%
• Announced UK and Auto Finance
restructurings
41.6%
44.2%
40%
– Approximately 1000 positions to be
38.6%
eliminated
30%
Excluding Visa one-
time impacts
2008 Expectations
20%
• Mid-40%’s or lower efficiency ratio
10%
• 2008 operating expenses at least $200M
below 2007
0%
Q107 Q207 Q307 Q407 Q108
11
All Guidance as of Q108 Earnings Call - April 18, 2008
12. Revenue and balance sheet management ensure profitability
despite credit headwinds
Net Income from Continuing Operations ($Millions)
Q108 Q407 Q307 Q207 Q107
National Lending
US Card $ 491.2 $ 498.7 $ 626.8 $ 592.9 $ 538.5
Auto Finance (82.4) (112.4) (3.8) 38.0 44.4
International 33.3 54.7 47.4 18.2 19.5
SUBTOTAL 442.1 441.0 670.4 649.1 602.3
Local Banking 75.8 103.6 195.5 154.8 139.2
Other 114.6 (223.0) (49.6) (36.3) (55.4)
Total Company 632.6 $ 321.6 $ 816.4 $ 767.6 $ 686.1
$
12
13. We are taking action to strengthen resiliency and sustain the strong
financial returns of our US Card business
US Card US Card Revenue Margin and Non-Interest
Credit Risk Metrics Expenses as a % of Average Loans
7% 20%
17.31%
5.85% 16.42% 16.42%
6% Managed Net
14.67%
Charge-off Rate
4.84%
13.92%
15%
5%
3.85%
3.72% 3.56%
4%
Non-Interest Expenses as a
Revenue Margin % of Average Loans
4.28% 10%
4.04%
3.80%
3%
3.06% 2.98%
2%
5% 6.11%
5.88%
Managed 30+ 5.81% 5.76%
Delinquency Rate
1% 5.48%
0% 0%
Q107 Q207 Q307 Q407 Q108 Q107 Q207 Q307 Q407 Q108
13
14. Despite recent worsening in losses and delinquencies, other indicators
remain generally stable in our US Card portfolio
Utilization Rate
Minimum Payment and Pay-in-Full Rates
(indexed)
(indexed)
% of customers
120%
1.
1. paying in full
120% 2
2
100%
1.
100%
1.
0
0
80%
0.
0.
80%
8
8
60%
0.
% of customers
0.
60%
6
6
paying Min Pay
40%
0.
40%
0.
4
4
20%
0.
0.
20%
2
2
0
0%
0%
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Payment Rate (Payment as a % of Outstanding)
Percent of Customers taking Cash Advances
(indexed)
(indexed)
120%
1.
1.
120% 2
2
100%
1.
1.
100% 0
0
0.
80%
0.
8
80%
8
0.
0. 60%
60% 6
6
0. 0.
40%
40%
4 4
0. 0.
20%
20%
2 2
0 0
0%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Key
14
2007 ’04-’06 Avg
2008
15. Bank integration was largely completed in the quarter
Credit Risk Metrics
2%
Managed Net
Charge-off Rate
Non Performing Loans
as a % of Loans
1%
0.56%
0.41%
0.27%
0.19%
0.19%
0.28%
0.31%
0.19% 0.19%
0.15%
0%
Q107 Q207 Q307 Q407 Q108
Deposit and Loan Portfolio ($B)
• Launched new Capital One logo
$80
$74.3 $74.3 $72.8 $73.1 $73.4
$70
• Completed brand conversion of Deposits
$60
former North Fork branches $50 $44.0 $44.2
$41.6 $41.9 $42.2
$40
Loans
• Consolidated banking operations
$30
$20
onto a single deposit platform
$10
$0
Q107 Q207 Q307 Q407 Q108
15
All Guidance as of Q108 Earnings Call - April 18, 2008
16. Despite credit headwinds, we remain capital generative
Tangible Common Equity to
2008 Expectations
Tangible Managed Assets Ratio
• TCE ratio at or above high-end of 5.5%-
8%
6% target range
7%
6.03%
5.83% • Expect to continue $0.375 quarterly
6%
Target Range
dividend
5%
4%
• Share buybacks dependent on economic
outlook
3%
– 2H08 at the earliest
2%
1%
0%
Q107 Q207 Q307 Q407 Q108
16
All Guidance as of Q108 Earnings Call - April 18, 2008
17. We continue to maintain ample liquidity
First Quarter 2008 Highlights
Readily Available Liquidity
$B
• Liquidity position is 5x next 12 months
35
of capital markets funding plan
$30B
$29B
30
• Moved Auto Finance to be a subsidiary
Undrawn FHLB
of National Bank
Capacity
25
• $5.7B Holding company cash:
20
Unencumbered – Covers parent obligations for over 2
Securities
years, including common stock and
dividends
15
• Maintained strong, diversified funding
10
– Q1 deposit growth of $4.9B
Undrawn
Conduit
– $3.0B AAA US Card ABS YTD
5
• Highly liquid, low risk investment
0
portfolio
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08
17
All Guidance as of Q108 Earnings Call - April 18, 2008
18. We expect sound operating metrics in 2008, despite continued credit
headwinds
Commentary
2008 Outlook
Loan/Deposit Flat loan growth; double-digit Cautious on loan growth; bullish on deposit growth
deposit growth
Growth
Revenue
Low-to mid-single digits Revenue margin remains strong
Growth
Cost Efficiency ratio in the low-to mid- At least $200M Y/Y OpEx reduction vs. 2007
40%’s
Management
Credit Continued economic weakness Allowance at 3/31/08 consistent with $6.7B in charge-
Expectations offs for the next 12 months
Capital Manage to the high end or above Expect to continue $0.375 quarterly dividend; share
5.5-6.0% TCE target repurchases dependent on economic outlook; 2H08 at the
Management
earliest
18
All Guidance as of Q108 Earnings Call - April 18, 2008
