What is the main purpose of this 8-K/A filing?

The main purpose of this amended 8-K filing is to disclose the results of Capital One's participation in the U.S. Treasury's Supervisory Capital Assessment Program (Stress Test) and to provide an update on the company's capital position and potential capital needs under adverse economic conditions.

How are the stress test results presented?

The stress test results estimate potential credit losses and the company's resources to absorb them under a hypothetical "more adverse" economic scenario. The company's "reported" financial statements are used for the assessment, but the filing also discusses "managed" financial statements for a more comprehensive view.

What is Capital One's plan regarding TARP funds?

Capital One continues to work towards repaying the funds received from the U.S. Treasury under the TARP Capital Purchase Program in November 2008 as soon as it is prudent and appropriate to do so.

CAPITAL ONE FINANCIAL CORP 8-K: Regulation FD

Q: Does Capital One need to raise additional capital based on the Stress Test results?

No, the supervisors concluded that Capital One does not need to raise any additional Tier 1 capital or Tier 1 common equity under the "more adverse" stress test scenario, indicating sufficient capital resources.

Summary

This amended 8-K filing from Capital One Financial Corporation (COF) on May 7, 2009, primarily discusses the results of the company's participation in the U.S. Department of the Treasury's Supervisory Capital Assessment Program, commonly known as a "Stress Test." The key takeaway for investors is that regulatory supervisors concluded Capital One does not need to raise any additional Tier 1 capital or Tier 1 common equity under the "more adverse" stress test scenario. This indicates a level of financial resilience and capital adequacy in the face of a severe economic downturn. The report also provides details on estimated credit losses across various loan portfolios and the company's resources available to absorb these losses. While the company acknowledges that these results are based on hypothetical scenarios and actual results could differ, the "no need for additional capital" conclusion offers a positive signal regarding the company's stability during a challenging economic period. The filing also reiterates the company's intention to repay TARP funds when prudent and clarifies the distinction between "reported" and "managed" financial statements, particularly concerning securitization transactions.

Key Highlights

1Capital One successfully passed the U.S. Treasury's Stress Test, with regulators concluding no additional Tier 1 capital or Tier 1 common equity is required.
2The stress test assessed potential credit losses under a "more adverse" economic scenario.
3The company has sufficient resources, including pre-provision net revenues and loan loss allowances, to absorb estimated losses.
4Estimated total losses under the more adverse scenario were projected to be $13.4 billion.
5Tier 1 Capital ratio was reported at 12.7% and Tier 1 Common Equity ratio at 9.1% as of December 31, 2008, before considering stress test impacts.
6Capital One continues to aim for the repayment of TARP funds as soon as it is prudent.
7The filing clarifies the use of "reported" vs. "managed" financial statements, especially concerning securitized assets.

CAPITAL ONE FINANCIAL CORP 8-K/A Report, Regulation FD Disclosure (May 8, 2009)

Summary

Key Highlights

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