Summary
This Form 8-K filing by Capital One Financial Corporation (COF) on March 14, 2012, primarily announces the company's successful participation in the Federal Reserve's 2012 Comprehensive Capital Analysis and Review (CCAR). The Federal Reserve had no objection to Capital One's capital plan, which included raising $1.25 billion in common equity by the end of Q2 2012 to support its previously announced acquisition of the HSBC U.S. credit card business. The company also confirmed its intention to proceed with a public offering of this common stock to fund a portion of that acquisition. Furthermore, the filing provides updated financial guidance, expecting first-quarter 2012 earnings per share of at least $2.50, including a significant bargain purchase gain of approximately $600 million ($1.15 per share) from the recently closed ING Direct acquisition. Capital One also reiterated its target for a Tier 1 common ratio in the mid-9% range by the end of Q2 2012, inclusive of the HSBC acquisition, and anticipates a ratio well above 11% at the end of Q1 2012 due to various factors including these acquisitions and expected earnings.
Key Highlights
- 1Federal Reserve has no objection to Capital One's 2012 CCAR capital plan.
- 2Capital One announces a $1.25 billion common equity offering to fund the HSBC U.S. credit card business acquisition.
- 3Expects Q1 2012 earnings per share of at least $2.50, including a ~$600 million bargain purchase gain from ING Direct acquisition.
- 4ING Direct acquisition was completed on February 17, 2012.
- 5Reiterates target Tier 1 common ratio in the mid-9% range by end of Q2 2012, post-HSBC acquisition.
- 6Anticipates Tier 1 common ratio well above 11% at the end of Q1 2012, reflecting recent capital actions and expected earnings.
- 7Filed financial statements for ING Bank and HSBC Card and Retail Services, along with preliminary pro forma combined financial statements.