Expects First Quarter Tier 1 Common Equity ratio of approximately 8%
MCLEAN, Va., March 18, 2011 /PRNewswire via COMTEX/ --
Capital One Financial Corporation (NYSE: COF) today announced it expects to maintain its current quarterly common stock dividend of $0.05 per share for the first quarter of 2011, subject to final approval by the Board of Directors in May. The company also announced that it expects its Tier 1 Common Equity ratio to be approximately 8 percent and its Tangible Common Equity (TCE) ratio to be approximately 7.3 percent at the end of the first quarter of 2011.
The company continues to believe that its capital and expected capital trajectory are strong. The company expects its TCE ratio, which is unaffected by regulatory accounting, to rise to approximately 7.3 percent at the end of the first quarter of 2011, from 6.9 percent at the end of 2010 and from 5.5 percent at the end of the first quarter of 2010.
The company's regulatory Tier 1 Common Equity ratio increased steadily in 2010, rising 230 basis points from 6.5 percent at the end of the first quarter of 2010 to 8.8 percent at the end of 2010. As previously communicated, the company expects that its regulatory capital ratios will experience a temporary decline in the first quarter of 2011. This will result from the scheduled final phase-in of risk weighted assets associated with accounting consolidation of securitized assets in 2010, as well as an increase in the level of deferred tax assets (DTA) disallowed for regulatory capital calculations owing to a shift in the carry-back period to the recession years of 2009-2010. The company now expects that its Tier 1 Common Equity ratio will be approximately 8 percent at the end of the first quarter of 2011 using Basel I standards and definitions. Using Basel III standards and definitions, the Tier 1 Common Equity ratio at the end of the first quarter of 2011 is expected to be in the mid-8 percent range.
Capital One expects that it will continue to generate capital internally through retained earnings. Following the temporary accounting-driven decline in the first quarter, Capital One expects regulatory capital ratios to grow through both retained earnings and the recapture of disallowed DTA. The company continues to expect that capital generation will support growth, provide appropriate resilience to stress, and be available for increased deployment in the interest of shareholders. Based on its expected strong capital and capital trajectory, the company expects that returning capital to shareholders will be an increasingly important source of shareholder value.
For more information on the company's Tier 1 Common Equity and TCE ratios, including the calculation components, see Exhibit 99.3 to the Current Report on Form 8-K filed by the company on January 20, 2011.
Forward looking statements
The company cautions that its current expectations in this release dated March 18, 2011, and the company's plans, objectives, expectations, and intentions, are forward-looking statements. Actual results could differ materially from current expectations due to a number of factors, including: general economic conditions in the U.S., the UK, Canada or the company's local markets, including conditions affecting consumer income, confidence, spending, and savings which may affect consumer bankruptcies, defaults, charge-offs, deposit activity, and interest rates; financial, legal, regulatory, tax or accounting changes or actions, including the impact of the Dodd-Frank Act and the regulations to be promulgated thereunder; developments, changes or actions relating to any litigation matter involving the company; increases or decreases in interest rates; the success of the company's marketing efforts in attracting or retaining customers; changes in the credit environment; increases or decreases in the company's aggregate loan balances or the number of customers and the growth rate and composition thereof; the level of future repurchase or indemnification requests the company may receive, the actual future performance of mortgage loans relating to such requests, the success rates of claimants against the company, any developments in litigation and the actual recoveries the company may make on any collateral relating to claims against it; changes in the reputation of or expectations regarding the financial services industry or the company with respect to practices, products, or financial condition; any significant disruption in our operations or technology platform; the company's ability to execute on its strategic and operational plans; changes in the labor and employment market; and competition from providers of products and services that compete with the company's businesses. A discussion of these and other factors can be found in the company's annual report and other reports filed with the Securities and Exchange Commission, including, but not limited to, the company's report on Form 10-K for the fiscal year ended December 31, 2010.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $122.2 billion in deposits and $197.5 billion in total assets outstanding as of December 31, 2010. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index
SOURCE Capital One Financial Corporation