annual stockholder meeting -...

Annual Stockholder MeetingAnnual Stockholder Meeting

April 24, 2008

2008 Annual Shareholder Meeting

Forward-Looking InformationPlease 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 andcomposition thereof; the amount of deposit growth; changes in the reputation of the credit card industry and/or the company withrespect 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.”

Forward looking statementsForward looking statements

http://www.capitalone.com/


2007 was our first year of earnings decline2007 was our first year of earnings decline

$7.62

$6.73$6.21

$4.85

$3.93

$6.55

$0.48 $0.64 $0.77 $0.93$1.32

$1.72$2.24

$2.91

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

COF Earnings per Share

Excluding Discontinued Operations

$3.97


Our stock price has declined in the face of cyclical Our stock price has declined in the face of cyclical headwindsheadwinds

Source: Factset

Capital One Stock PriceJanuary 1, 2007-April 23, 2008

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7Ju

l-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

$45.92


The banking industry has been hit hardThe banking industry has been hit hard

2% 0%

-2% -2%-6%

-9%

-15%-18%

-26%-26%-26%

-36%-36%-37%-40%-40%-41%-42%-43%

-46%-48%-51%-51%

-53%-53%-55%-55%-58%

-61%

-70%-74%

-77%-81%-81%-83%

-86%-91%-94%

26%

-100%

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Northern

Trus

tBNY/M

ellon

State S

treet

US Ban

k

JPM C

hase PNC

Goldman

Sachs

Wells Farg

oBB&TM&TAmexB of A

Keyco

rpSunTru

stDisc

over

Capita

l OneM&I

Comerica

Regions

Lehman B

ros.

ZionsFifth

Third

Merrill

Lynch

Wachovia

Citigro

upFan

nie M

ae

Americr

edit

NelNet

Huntington

Freddie

MacSall

ie Mae

WaMuAdva

nta CIT

Compucredit

Nat City

Country

wideIndym

ac

Bear S

tearn

s

Total Shareholder ReturnJanuary 1, 2007-April 23, 2008

Note: Discover began trading on June 14, 2007Source: Factset


Home prices became clearly unsustainable and the Home prices became clearly unsustainable and the correction may be prolonged correction may be prolonged

Source: Census Bureau and Banc of America Securities LLC Estimates (Presentation to GFS SLT Sept. 2007)

100

200

300

400

500

600

700

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005

Indexed Median House Prices and 60th Percentile Household Income, 1975-2007 Indexed to 1975

60th

Percentile Household Income


Home prices became clearly unsustainable and the Home prices became clearly unsustainable and the correction may be prolonged correction may be prolonged

Source: Census Bureau and Banc of America Securities LLC Estimates (Presentation to GFS SLT Sept. 2007)

100

200

300

400

500

600

700

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005

Indexed Median House Prices and 60th Percentile Household Income, 1975-2007 Indexed to 1975

60th

Percentile Household Income

Median House Prices


We are the nationsWe are the nations’’ 1313thth largest depositlargest deposit--taking banktaking bank

1. Bank of America Corporation $688.6

2. JPMorgan Chase & Co.Wachovia CorporationWells Fargo & CompanyCitigroup, Inc.

$505.63. $423.14. $292.85. $265.9

6. Washington Mutual, Inc.

SunTrust Banks, Inc.U.S. Bancorp

Citizens

$186.77.8.9.

$121.1$113.6$96.0

Q4 2007 U.S. Deposits ($B)

11. Regions Financial $86.110. National City $90.7

15. PNC $75.3

12. HSBC $81.613. Capital One $79.314. BB&T $78.9

Note: Based upon total aggregated domestic deposits for parent companySources: SNL, FDIC


The capital markets have shut down in many sectorsThe capital markets have shut down in many sectors

$42

$47

$64 $65

$48

$32

$35

$35 $69

$66

$0

$34

$48 $48

$38

$5

$51 $66 $91 $108$66$71

$103 $84 $62

$463

$559 $555

$1

$224

$0

$200

$400

$600

$800

$1,000

2004 2005 2006 2007 2008

U.S. Issuance of Asset-Backed Securities

Credit Card

Auto

Home Equity

Student Loans

Global RMBS

Other

$702

$B

$874 $888

$529

$188

Note: Other includes Equipment, floorplan, motorcycle, small business loans, aircraft etc.Source: JP Morgan

Q1 Actual $162B $181B $220B $211B $47B

(Q1 Annualized)


• First Merchants• Search Financial• The Money Store• Western Fidelity• Aegis• Reliance• National Auto• Monaco• Eagle• Jayhawk• National Auto Finance • TFC enterprises• First Enterprise• Mercury• Aames• Iown• Finova• Delta Financial• The Credit Store • NAL Financial • Royal Acceptance • Commercial Financial Services• NextCard• DVI• New Century

Failed

• IndyMac -91.3%• CompuCredit -81.4%• Advanta -78.1%• Sallie Mae -66.3%• Americredit -55.2%• Nelnet -56.0%• Discover* -37.5%• American Express -26.9%

Remaining

Consumer Lending Monolines

• Arcadia• Ugly Duckling • Beneficial• First USA • Rock Financial• Reliastar• Autofinance Group• First Fidelity• First Investors• MS Financial• Regional Acceptance• Heller Financial• GreenTree• Household• Onyx• Providian• MBNA• WFS Financial• Metris• First Franklin• ResMae• Countrywide

Acquired

Lenders primarily reliant on the capital markets have Lenders primarily reliant on the capital markets have proven not to be resilientproven not to be resilient

Note: Publicly traded companies with a minimum of $1 billion in market cap in 1998*Data sine June 2007 IPO; All other stock data are through April 23, 2008Source: Factset

Stock Performance Jan. 2007-Present


50%

6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1995 1Q 2008

% of Funding From Deposits

We have dramatically reduced our need for capital We have dramatically reduced our need for capital markets funding as wemarkets funding as we’’ve grown depositsve grown deposits

Notes: Shown as % of Managed Liabilities


Our banking transformation has been recognized by Our banking transformation has been recognized by ratings agenciesratings agencies

Moody’s

A3

Baa1

Baa2

Baa3

Ba1

Holding Company

Capital One (1996)

Capital One (Q2 1999)

Capital One (2006)

Capital One (Q4 2005)


We have stable and fortified fundingWe have stable and fortified funding

$17.3

$20.4

$26.4

$29.4 $30.1

$0

$5

$10

$15

$20

$25

$30

$35

2004 2005 2006 2007 Q1 2008

Readily Available Liquidity*

*Includes unencumbered securities, undrawn committed conduits and undrawn FHLB capacity.

$B


5.85%

0%

1%

2%

3%

4%

5%

6%

7%

8%

Q1 200

4Q3 2

004

Q1 200

5Q3 2

005

Q1 200

6Q3 2

006

Q1 200

7Q3 2

007

Q1 200

8

Capital One Credit Card Charge-Off Rate

3.98%

0%

1%

2%

3%

4%

5%

6%

7%

8%

Q1 200

4Q3 2

004

Q1 200

5Q3 2

005

Q1 200

6Q3 2

006

Q1 200

7Q3 2

007

Q1 200

8Our Card and Auto Loan chargeOur Card and Auto Loan charge--offs are increasingoffs are increasing

Capital One Auto Finance Charge-Off Rate

Note: Data is annualized


0.31%

0.0%

0.5%

1.0%

1.5%

2.0%

2007Q1 2007Q2 2007Q3 2007Q4 2008Q1

Our Local Banking losses are rising, but still at low Our Local Banking losses are rising, but still at low levelslevels

Capital One Bank Charge-Off Rate

Note: Data is annualized

2008 Annual Shareholder MeetingNote: Reported in U.S. Card segment

$515

$690$774

$1,001

$1,181

$1,387

$1,609

$1,824

$2,116

$0

$500

$1,000

$1,500

$2,000

$2,500

1999 2000 2001 2002 2003 2004 2005 2006 2007

U.S. Card Net Income$M

Our U.S. Card business is generating solid earnings Our U.S. Card business is generating solid earnings in the face of significant cyclical headwindsin the face of significant cyclical headwinds


Our auto finance business struggled in 2007, weOur auto finance business struggled in 2007, we’’re re pulling back dramatically and repositioning the pulling back dramatically and repositioning the businessbusiness

$M

($23) ($21)($35)

$10

$99

$164

$132

$234

($34)($50)

$0

$50

$100

$150

$200

$250

1999 2000 2001 2002 2003 2004 2005 2006 2007

COF Auto Net Income


Global Financial Services delivered valuable growthGlobal Financial Services delivered valuable growth

$65

$213

$186

$274

$299

($8)($40)

$0

$40

$80

$120

$160

$200

$240

$280

$320

2002 2003 2004 2005 2006 2007

GFS Net Income$M


Local Banking has become an anchor tenantLocal Banking has become an anchor tenant

$43 $46 $46

$127

$145

$192

$112

$43

$0

$50

$100

$150

$200

$250

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

Local Banking Net Income$M


We have changed our logoWe have changed our logo


In March we launched the Capital One Bank brand in In March we launched the Capital One Bank brand in metro New Yorkmetro New York


We can leverage our strong brand and very large We can leverage our strong brand and very large customer basecustomer base

Total BrandAwareness (%)1

9697

78

96

9187

9696

1 - Question: “When you think about companies or banks that offer financial services products such as checking accounts, various types of savings accounts, credit cards and loans, which ones come to mind? Have you seen or heard of (company)?”

1. Citi

2. Bank of America

3. JPM Chase

4. HSBC

5. Capital One

6. Discover

7. American Express

8. Washington Mutual**

9. Wells Fargo

10. Wachovia

11. US Bancorp

12. Countrywide

13. Fifth Third

14. Citizens

15. Regions

16. BB&T

17. National City

18. Bank of the West

19. PNC

20. Keycorp

182 M

132 M

92 M

60 M

44 M

42 M

37 M

24 M

23 M

15 M

14 M

8 M

6 M

6 M

5 M

5 M

4 M

4 M

3 M

2 M

U.S. Customer U.S. Customer Accounts*Accounts*

*Represents most recent company disclosure ranging from YE2005 to YE2006**Calculated by aggregating the ~11M customers with card accounts, the ~9M households with banking accounts, and the ~4M households with home loansSources: Millward Brown Financial Services Brand Health Wave 5, January 2008, Company reports, SEC filings


We have completed a major transformation at We have completed a major transformation at Capital OneCapital One

• U.S. Card • U.S. Card

• Auto Finance

• Small Business

• Installment Loans

• Home Equity

• UK/Canada Card

• U.S. Card

• Auto Finance

• Small Business

• Installment Loans

• Home Equity

• UK/Canada Card

• Mortgage

• Retail Banking

• Commercial Banking

DiversifiedConsumer Lender

Credit Card Company

Diversified Bank

Today2000’s1990’s


The capital generative power of our portfolio is The capital generative power of our portfolio is enhanced by reduced capital need and disciplined enhanced by reduced capital need and disciplined capital managementcapital management

($30)

$84

($18)

$160

($219)($408)

$125

$788

$1,494

$2,199

$1,607

($481)

($1,000)

($500)

$0

$500

$1,000

$1,500

$2,000

$2,500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Note: Calculated as (Total NIAT − NIAT from in-period acquisitions + amortization of intangibles from prior period acquisitions) – Low end of TCE Target Range * (Change in Tangible Assets – in-period acquired assets)

Annual Excess Tangible Common Equity Generated$M


We significantly raised the dividendWe significantly raised the dividend

$1.50

$0.11

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

2007 2008E

Capital One Dividend


Our portfolio continues to generate capitalOur portfolio continues to generate capital

17.4%

11.6%8.5%

7.0%5.2% 3.8%

-2.0%-5.4% -5.4%

-16.2%

-21.6%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

CapitalOne

JPMorganChase

U.S.Bancorp

SunTrust BB&T WellsFargo

Wachovia Bank ofAmerica

PNC NationalCity

Citigroup

2007 Capital Generation (Consumption) as % of Year-End Tangible Common Equity

Capital Generation = [Net Income – (Dividends Paid + Capital Needed for Y-o-Y On-Balance Sheet Growth @ 5% TCE Rate)] *Wachovia and National City include April announcements ($7B each)

Note: Does not include outside capital raising activities in capital generation calculation

New Equity Capital Raised From Outside Sources:

$12.8B* $19B$13B $7B*


Our actions position Capital One to deliver Our actions position Capital One to deliver shareholder value over the cycleshareholder value over the cycle

Entering the Downturn With

Strength

Decisive Action in the Downturn

Positioning for Long-term Trajectory

Annual Stockholder MeetingAnnual Stockholder Meeting

April 24, 2008

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