European Shorting
| New Threads Only: |  |  |  |
|
|---|---|---|---|---|
| New Threads & Replies: | | | |
|
Forum List » Business News and Headlines SEC Filings, Earing Reports, Press Releases  
Capital One Financial Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 7, 2011 06:12PM
Capital One Financial Corp. (COF) filed Quarterly Report for the period ended 2011-09-30. Highlight of Business Operations:We reported net income of $813 million ($1.77 per diluted share) in the third quarter of 2011, with each of our three business segments contributing to our earnings. In comparison, we reported net income of $911 million ($1.97 per diluted share) in the second quarter of 2011 and net income of $803 million ($1.76 per diluted share) in the third quarter of 2010. Net income totaled $2.7 billion ($5.95 per diluted share) for the first nine months of 2011, compared with net income of $2.0 billion ($4.49 per diluted share) for the first nine months of 2010.Commercial Banking: Our Commercial Banking business generated net income from continuing operations of $145 million and $435 million in the third quarter and first nine months of 2011, respectively, compared with net income from continuing operations of $39 million and $67 million in the third quarter and first nine months of 2010, respectively. The improvement in results for our Commercial Banking business reflected an increase in revenues, a decrease in non-interest expense and a decrease in the provision for loan and lease losses due to the improvement in credit quality. As a result of this improvement, we reduced our allowance for loan and lease losses and recorded a negative provision for loan and lease losses of $10 million and $43 million in the third quarter and first nine months of 2011, respectively. In comparison, we recorded a provision for loan and lease losses of $95 million and $395 million in the third quarter and first nine months of 2010, respectively, related to our Commercial Banking business. We continued to experience steady loan growth in our Commercial Banking business, with loan demand expanding beyond refinancing to include demand for new credit to finance growth for our commercial customers. In the first quarter of 2011, we revised previously reported interest income on interest-earning assets and average yield on loans held for investment for 2010 to conform to the internal management accounting methodology used in our segment reporting. The interest income and average loan yields presented reflect this revision. The previously reported interest income and average yields for the third quarter of 2010 were as follows: domestic consumer loans ($2,846 million and 12.72%); total consumer loans ($3,148 million and 13.00%); and commercial loans ($299 million and 4.06%). The previously reported interest income and average yields for the first nine months of 2010 were as follows: domestic consumer loans ($8,691 million and 12.53%); total consumer loans ($9,594 million and 12.79%); and commercial loans ($988 million and 4.46%). Our net interest income of $9.6 billion for the first nine months of 2011 increased by $125 million, or 1%, from the first nine months of 2010, driven by a 2% (15 basis points) expansion in our net interest margin to 7.28%, which was partially offset by a 1% decrease in average interest-earning assets. Net Interest Income: Net interest income increased by $108 million, or 6%, in the third quarter of 2011, due in part to a 2% increase in average loan balances coupled with an increase in the average yield on loans held for investment. The growth in average loan balances reflect the additions of the HBC and Kohl’s portfolios, which were partially offset by the continued expected run-off of the installment loan portfolio. The average yield for the third quarter of 2011 reflects the benefit from a revision we made in the third quarter of 2011 in estimating non-principal recoveries to determine the uncollectible finance charge and fee reserve, which we discuss above in “Critical Accounting Policies and Estimates.” This revision accounted for approximately $83 million of the increase in net interest income. Net interest income decreased by $151 million, or 3%, in the first nine months of 2011, reflecting the impact of a 2% decline in average loan balances. The expected run-off of the installment loan portfolio was the primary driver of the decline in average loan balances in the first nine months of 2011, more than offsetting modest revolving card loan growth and the additions of the HBC and Kohl’s portfolios. The decrease in the average loan yields in the first nine months of 2011 reflects the impact of the Kohl’s revenue-sharing agreement.
Sorry, only registered users may post in this forum.
Please Login if you have an account or Create a Free Account if you don't 
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names 
|
Feedback
My Portfolios
Browse Gurus
RSS