EX-99.2 3 dex992.htm EXHIBIT 99.2 Exhibit 99.2
October 18, 2006
Exhibit 99.2

2
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;
project
revenues,
income,
returns,
earnings
per
share
or
other
financial
measures
for
Capital
One
or
those
that
discuss
the
benefits
of
the
business
combination
transaction
involving
Capital
One
and
North
Fork
Bancorporation,
including
future
financial
and
operating
results,
and
the
new
company’s
plans,
objectives,
expectations
and
intentions.
To
the
extent
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:
the
ability
to
obtain
regulatory
approvals
of
the
North
Fork
transaction
on
the
proposed
terms
and
schedule;
the
exact
timing
of
the
close
of
the
North
Fork
transaction
and
magnitude
of
market-driven
purchase
accounting
adjustments
related
to
the
close;
the
risk
that
the
Capital
One’s
acquired
businesses
will
not
be
integrated
successfully;
the
risk
that
the
cost
savings
and
other
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;
continued
intense
competition
from
numerous
providers
of
products
and
services
which
compete
with
our
businesses;
an
increase
or
decrease
in
credit
losses;
financial,
legal,
regulatory
or
accounting
changes
or
actions;
changes
in
interest
rates;
general
economic
conditions
affecting
consumer
income,
spending
and
repayments;
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;
our
ability
to
access
the
capital
markets
at
attractive
rates
and
terms
to
fund
our
operations
and
future
growth;
our
ability
to
successfully
continue
to
diversify
our
assets;
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
execute
effective
tax
planning
strategies;
our
ability
to
recruit
and
retain
experienced
management
personnel;
the
long-term
impact
of
the
Gulf
Coast
Hurricanes
on
the
impacted
region,
including
the
amount
of
property
and
credit
losses,
the
amount
of
investment,
including
deposits,
in
the
region,
and
the
pace
and
magnitude
of
economic
recovery
in
the
region;
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,
2005,
and
any
subsequent
quarterly
reports
on
Form
10-Q.
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
8-K
or
Form
10-Q
concerning
quarterly
financial
results,
available
on
the
Company’s
website
at
www.capitalone.com
in
Investor
Relations
under
“About
Capital
One.”
Additional
Information
About
the
Capital
One
–
North
Fork
Transaction
In
connection
with
the
proposed
merger
between
Capital
One
and
North
Fork,
Capital
One
filed
with
the
Securities
and
Exchange
Commission
(the
“SEC”)
a
Registration
Statement
on
Form
S-4
that
includes
a
joint
proxy
statement
of
Capital
One
and
North
Fork
that
also
constitutes
a
prospectus
of
Capital
One.
Capital
One
and
North
Fork
mailed
the
definitive
joint
proxy
statement/prospectus
to
their
respective
stockholders
on
or
about
July
14,
2006.
Investors
and
security
holders
are
urged
to
read
the
definitive
joint
proxy
statement/prospectus
regarding
the
proposed
merger
because
it
contains
important
information.
You
may
obtain
a
free
copy
of
the
definitive
joint
proxy
statement/prospectus
and
other
related
documents
filed
by
Capital
One
and
North
Fork
with
the
SEC
at
the
SEC’s
website
at
www.sec.gov.
The
definitive
joint
proxy
statement/prospectus
and
the
other
documents
may
also
be
obtained
for
free
by
accessing
Capital
One’s
website
at
www.capitalone.com
under
the
heading
“Investors”
and
then
under
the
heading
“SEC
&
Regulatory
Filings”
or
by
accessing
North
Fork’s
website
at
www.northforkbank.com
under
the
tab
“Investor
Relations”
and
then
under
the
heading
“SEC
Filings”.
Forward looking statements
*

3
Third quarter 2006 summary
•
Q306 diluted EPS of $1.89, up 4% from Q305
•
Net income after tax of $588M, up 20% from Q305
•
$112.2 billion in managed loans, up 4% from Q206
•
$47.5B in average deposits, up 0.6% from Q206
•
Managed
revenue
margin
of
10.95%,
up
18
bp
from
Q206
•
Managed
charge-off
rate
of
2.92%,
up
17
bp
from
Q206
We expect diluted EPS in the higher end of our 2006 guidance range of $7.40-7.80,
assuming a ($0.30) impact of a 4
th
quarter close of the North Fork acquisition.
*

4
($Millions except per share data)
Third quarter 2006 managed income statement
*
Q306/Q206 Change
Q306
Q206
Q305
$
%/bps
Net Interest Income
$
2,217.8
$
2,140.8
$
1,931.2
$
77.0
4
%
Non-Interest Income
1,275.4
1,199.4
1,099.8
76.0
6
Total Revenue
3,493.2
3,340.2
3,031.0
153.0
5
Net Charge-offs
$
806.0
$
729.0
$
868.0
77.0
11
%
Allowance Build
75.0
90.0
42.0
(15.0)
(17)%
Other
(13.1)
(23.4)
(9.6)
10.3
n/a
Provision for Loan Losses
867.9
795.6
900.4
72.3
9
%
Marketing Expenses
$
368.5
$
356.7
$
343.7
11.8
3
%
Operating Expenses
1,358.1
1,324.2
1,021.9
33.9
3
%
Tax Rate
34.6
%
36.0
%
35.8
%
n/a
(140)bps
Net Income After Tax
$
587.8
$
552.6
$
491.1
$
35.2
6
%
Shares Used to Compute Diluted EPS (MM)
310.4
310.0
270.7
n/a
0.13%
Diluted EPS
$
1.89
$
1.78
$
1.81
$
0.11
6
%
Net Interest Margin
6.95%
6.90%
7.99%
n/a
5
bps
Revenue Margin
10.95
10.77
12.54
n/a
18
Return on Managed Assets
1.68
1.62
1.89
n/a
6
Return on Equity
14.42
14.19
18.19
n/a
23

5
Credit loss and delinquency rates remain at historically low
levels
0%
1%
2%
3%
4%
5%
6%
7%
8%
Monthly Managed
Net Charge-off Rate
0%
1%
2%
3%
4%
5%
6%
7%
8%
Monthly Managed $30+ Day
Delinquency Rate
4.05%
4.37%
4.13%
4.10%
Quarterly
Charge-off
Rate
4.14%
4.53%
2.65%
Bankruptcy
Filing Spike
2.75%
2.92%
3.29%
*

6
Loan growth drove modest increases in both provision and
allowance
Charge-offs and Allowance for Loan Losses ($Millions)
Finance Charge & Fee Revenue Recognition ($Millions)
Q306/Q206 Change
Q306
Q206
Q305
$
%/bps
Managed Net Charge-offs
$
806.0
       
$
729.0
  
$
868.0
$
77.0
11
%
Allowance Build/(Release)
75.0
         
90.0
    
42.0
(15.0)
(17)
Other
(13.1)
        
(23.4)
   
(9.6)
10.3
n/a
Managed Provision for Loan Losses
867.9
       
795.6
  
900.4
72.3
9
%
Reported Loans
$
63,612
$
60,603
$
38,852
$
3,009
5
%
Allowance for Loan Losses
1,840
1,765
1,447
75
4
Reported $30+ Day Delinquencies
2,060
1,772
1,497
288
16
Reported $30+ Delinquency Rate
3.24
%
2.92
%
3.85
%
n/a
32
bps
Reported Net Charge-off Rate
2.36
2.01
3.55
n/a
35
Q306
Q206
Q305
Q306/Q206 Change
$
%
Amounts Billed to Customers
   but not Recognized as Revenue
$
226.3
$
215.0
$
255.6
$
11.3
5
%
*

7
US Card continued to deliver strong growth, credit, and profits
4.69%
5.70%
2.93%
4.90%
3.29%
3.39%
3.86%
3.60%
3.44%
3.31%
3.30%
3.53%
0%
1%
2%
3%
4%
5%
6%
Q205
Q305
Q405
Q106
Q206
Q306
Net Income After Tax
(1)
($M)
Credit Risk Metrics
(1) Based on internal allocations of consolidated results
Managed 30+
Delinquency Rate
Managed Net
Charge-off Rate
Highlights
•
Net income down $20M from Q305
•
Charge-off
rate
rose
10
bp
from
Q206,
and
remains
near
historical
lows
•
Loans grew $2.4B from Q206, driven by
favorable attrition and new prime
strategies
•
Revenue
margin
up
37
bp
over
Q206,
Net
interest
margin
up
5
bp
•
Competition remains intense, with long-
dated 0% teasers still dominating
revolver segments
•
Purchase volume up 13% from Q305,
reflecting our continued focus on
rewards cards and transactors
$432.4
$481.8
$237.0
$602.8
$421.8
$461.6
$0
$100
$200
$300
$400
$500
$600
$700
Q205
Q305
Q405
Q106
Q206
Q306
*

8
3.70%
3.90%
3.63%
4.33%
4.09%
3.89%
2.86%
2.82%
2.90%
2.83%
2.93%
2.93%
0%
1%
2%
3%
4%
5%
6%
Q205
Q305
Q405
Q106
Q206
Q306
North American GFS businesses continue to more than offset
pressure in the U.K. business
Credit Risk Metrics
$26.7
$81.9
$7.1
$113.5
$51.2
$107.2
$0
$20
$40
$60
$80
$100
$120
Q205
Q305
Q405
Q106
Q206
Q306
Net Income After Tax
(1)
($M)
(1) Based on internal allocations of consolidated results
Managed Net
Charge-off Rate
Managed 30+
Delinquency Rate
Highlights
•
Net income up $25M from Q305
•
$3.9B loan growth, or 17%, over Q305
•
Revenue
margin
down
20
bp
over
Q206;
Net
interest
margin
down
16
bp
•
North American GFS businesses continue to
deliver strong growth and credit quality
•
Our U.K. business continues to face a
challenging credit environment
*

9
2.34%
1.54%
1.74%
2.54%
2.35%
3.32%
5.18%
4.55%
3.57%
5.71%
4.65%
4.09%
0%
1%
2%
3%
4%
5%
6%
Q205
Q305
Q405
Q106
Q206
Q306
Auto Finance continues to deliver solid results
Credit Risk Metrics
$96.1
($7.7)
$8.1
$69.4
$95.1
$35.3
($20)
$0
$20
$40
$60
$80
$100
$120
Q205
Q305
Q405
Q106
Q206
Q306
Net Income After Tax
(1)
($M)
(1) Based on internal allocations of consolidated results
Managed Net
Charge-off Rate
Managed 30+
Delinquency Rate
Highlights
•
Net income up $43M from Q305
•
$3.2B in originations, $21.2B in managed loans
•
Net
interest
margin
down
5
bp
from
Q206
•
Credit metrics reflect expected seasonal
impacts
•
Continuing to focus on prime segment to fill in
credit spectrum
*

10
$35.4
$35.3
$35.7
$13.3
$13.2
$13.2
$0
$10
$20
$30
$40
Q106
Q206
Q306
Banking continues to deliver stable, predictable performance
Deposit and Loan Portfolio ($B)
$43.3
$43.3
$46.2
$0
$20
$40
$60
Q106
Q206
Q306
Net Income After Tax
(1)
($M)
(1) Based on internal allocations of consolidated results
Loans
Deposits
Highlights
•
$46M NIAT, up 7% from Q206
•
Loans and deposits declined in hurricane
impacted areas, grew in rest of network
•
Credit metrics remain modestly elevated in
the Gulf Coast hurricane impacted areas
•
Opened 9 de novo branches in Q3, bringing
the total to 19 year-to-date
•
Hibernia integration costs & synergies
continue to track plans
•
North Fork planning well underway,
expecting Q406 close
*