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Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
Microsoft PowerPoint - BankingPresentation_FINAL_PDF
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Microsoft PowerPoint - BankingPresentation_FINAL_PDF

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  • 1. 2006 Debt & Equity Conference Banking Review Herb Boydstun February 16, 2006 Debt & Equity Conference – February, 2006
  • 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; or project revenues, income, returns, earnings per share or other financial measures for Capital One. 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: 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 continue to securitize our credit cards and consumer loans and to otherwise 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 or expansion internationally; 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 risks that the Hibernia businesses will not be integrated successfully and that the cost savings and other synergies from the transaction may not be fully realized; 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, 2004, 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.” . 2 Debt & Equity Conference – February, 2006
  • 3. Hibernia is a well established financial institution • Since 1870 • Leading bank in Louisiana, growing in Texas • Strong, diversified consumer and commercial lending franchise • 198 branches in Louisiana*, 119 branches in Texas, 13 non-banking locations • Headquartered in New Orleans, LA • 6,500 associates * 21 New Orleans locations are currently closed due to the impact of Hurricane Katrina 3 Debt & Equity Conference – February, 2006
  • 4. Hibernia is the deposit leader in Louisiana Louisiana New Orleans Total Deposit Total Deposit Rank Company Share Rank Company Share 1 Hibernia 21.1% 1 Hibernia 28.5% 2 JP Morgan / Chase 16.5% 2 JP Morgan / Chase 16.8% 3 Whitney 8.4% 3 Whitney 16.0% 4 Regions 7.6% 4 Regions 7.0% 5 Iberia 3.6% 5 Fidelity 3.0% 6 AmSouth 3.1% 6 AmSouth 2.6% 7 Hancock 2.7% 7 Gulf Coast 2.5% 8 Firstrust 1.1% 8 Firstrust 2.5% 9 Fidelity Homestead 1.1% 9 Omni 2.2% 10 Bancorp South 1.0% 10 Parish National 1.9% 4 Source: SNL data 06/05 Debt & Equity Conference – February, 2006
  • 5. Hibernia has been growing its deposit base Total Deposits $B CAGR $25 (’00 – ’05) $21.7 11.3% $20 $17.4 $15 $13.5 $14.2 $12.7 $13.0 $10 $5 $0 2000 2001 2002 2003 2004 2005 5 Debt & Equity Conference – February, 2006
  • 6. Hibernia has strong asset quality Hibernia Credit Losses Net Adjusted Charge-off Rate 1.0% 0.9% 0.86% 0.8% 0.7% 0.62% 0.6% 0.56% 0.50% 0.5% 0.4% 0.34% 0.3% 0.2% 0.1% 0.0% 2000 2001 2002 2003 2004 6 Debt & Equity Conference – February, 2006
  • 7. Hibernia has consistently delivered strong earnings Hibernia Earnings per Share CAGR $2.0 (’00 – ’04) $1.86 $1.8 $1.64 13.8% $1.56 $1.6 $1.42 $1.4 $1.2 $1.11 $1.0 $0.8 $0.6 $0.4 $0.2 $0.0 2000 2001 2002 2003 2004 ROA 1.08% 1.33% 1.51% 1.45% 1.43% 7 Debt & Equity Conference – February, 2006
  • 8. The hurricanes hit the core of our banking franchise 8 Debt & Equity Conference – February, 2006
  • 9. The hurricanes hit the core of our banking franchise 1 1 2 3 1- Affected Areas 2- Business Interruption Area 3- Persistent Flooding Area Affected Areas were directly impacted by Rita (to the West) & Katrina (to the East). Business Interruption Area may be impacted by loss of commerce in the Affected Areas. 9 Debt & Equity Conference – February, 2006
  • 10. Hurricane-force winds and severe flooding from both Katrina and Rita greatly impacted Hibernia’s operations and IT infrastructure Katrina Rita • 3 large professional and • New Orleans sites re-flooded, operations sites in New Orleans but no incremental damage inaccessible • Lake Charles site impacted • 120 branches closed – 97 returned to service • Houston operations center – 18 sustained major damage threatened, but not impacted • 3,100 associates displaced • 2 branches sustained major damage • Primary voice / data hubs shut down, and systems required • 170 associates displaced relocation 10 Debt & Equity Conference – February, 2006
  • 11. Following the hurricanes, Hibernia took a $186 million charge against 3Q 2005 earnings Hurricane Impact on Hibernia Pre-Tax $MM $250 $12 $200 $11 $186 $175 $150 $100 $50 $0 Provision for Operating Charge to 3Q '05 Capitalized Cost Loan Losses Expense Earnings 11 Debt & Equity Conference – February, 2006
  • 12. We have experienced stronger deposit growth since the hurricane Hibernia Total Deposits $B Monthly Ending Balance, 2005 $25 $21.7 $20.4 $20 $19.2 $18.1 $18.5 $4.6 B $17.1 $17.4 $15 $10 $5 $0 June July August September October November December 12 Debt & Equity Conference – February, 2006
  • 13. We believe we are getting disproportionate share of post-hurricane deposits $B Deposit change $5.0 $4.6 6/30/2005 to 12/31/2005 $4.0 $3.0 $2.0 $1.4 $1.1 $1.0 $0.6 $0.2 $0.0 Hibernia Whitney Hancock Bancorp Iberia South % Deposit Change 27% 20% 30% 7% 11% % Franchise deposits 65% 79% 96% 29% 78% in affected areas Deposit Change as % of deposits 41% 25% 31% 25% 14% in affected area Note: Deposits in affected areas as of 6/30/2005. Affected areas as designated by FEMA as eligible for individual assistance as a result of hurricanes Katrina and Rita. Source: SNL, Company Reports 13 Debt & Equity Conference – February, 2006
  • 14. We are returning to business as usual and beginning to create more resiliency Activities Currently Under Way Completed Activities (completed prior to June 1) • Moved key systems and operations • Migrating key business functions to from New Orleans Dallas – Data center infrastructure • Built out Shreveport customer – Personnel contact center • Moving or implementing secondary • Expanded network capacity to connections for third-party vendors support disaster volumes outside of New Orleans • Extended redundant deposit • Configuring third-party and casino operations capability to Houston ATM solution with a secondary dial- up to a non-New Orleans location 14 Debt & Equity Conference – February, 2006
  • 15. We are leveraging Hibernia’s position in Louisiana to expand in Texas Dallas / Fort Worth • 16 branches Greater New Orleans LA • 55 branches Houston TX • 30 branches Other Louisiana • 143 branches Other Texas • 73 branches Note: Does not include 13 non-banking locations 15 Debt & Equity Conference – February, 2006
  • 16. We are expanding in Texas with a promising de novo strategy Texas de novo strategy Branches Completed: 32 Strategy: • Retail orientation • Great locations • Large offices • High level of service • Consumer and Small Business focus • Major markets with community banking approach IRR: • Well above hurdle 16 Debt & Equity Conference – February, 2006
  • 17. Capital One brings a lot to banking Release from National- Customer Deposit Investment Brand Scale Base Growth Capacity Lending Constraints 17 Debt & Equity Conference – February, 2006
  • 18. The Capital One / Hibernia integration is on track Key executive management from the bank have been retained and are fully engaged We are confident that the target level of $135MM in pre-tax synergies in 2007 will be achieved Systems Integration is underway and will be completed by 1Q’07 • The only conversion that directly impacts customer accounts is the conversion of COF deposit portfolio to the bank’s system Brand Change efforts are underway and on schedule 18 Debt & Equity Conference – February, 2006
  • 19. The Hibernia senior leadership team is in place and on board President, Banking Segment (Herb Boydstun) Branch Texas De Commercial Chief Chief Credit Banking & Sales CFO Banking Administrative Integration Officer Novo Retail (Randy Bryan) (Steve (Rob Stuart) Office (Miles Reidy) Cunningham) (Marsha (Bob Kottler) (Paul (Ron Samford) Gassan) Bonitatibus) Hibernia Hibernia Hibernia Hibernia Hibernia Capital Capital Hibernia One One 19 Debt & Equity Conference – February, 2006
  • 20. We are excited about the future of Capital One banking The leading Still strong Winning de Management Louisiana after the novo platform is on board franchise hurricane in Texas 20 Debt & Equity Conference – February, 2006
  • 21. 2006 Debt & Equity Conference Banking Review Herb Boydstun February 16, 2006 Debt & Equity Conference – February, 2006

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