McLEAN, Va. — Capital One Auto Finance posted a sequential
gain in originations during the first quarter, pushing its total vehicle
financing portfolio up by 3 percent.

The company reported Q1 originations of $3.78 billion, up
from $3.48 billion in the previous quarter. The performance increased Capital
One's period-end loans in auto finance by $817 million, or 3 percent, to leave
the total at $27.9 billion.

As vehicle originations jumped, Capital One's net charge-off
rate also improved within its auto portfolio. The Q1 rate came in at 1.78
percent, down from the fourth-quarter rate of 2.24. However, the company's most
recent reading did rise a bit year-over-year as the rate for Q1 of last year was
1.41 percent.

Capital One's 30-day delinquency rates for vehicle contracts
performed similarly to the net charge-off metric.

The Q1 30-day delinquency rate dipped to 5.88 percent from
7.00 percent in the fourth quarter of last year. A year earlier, this rate was
4.87 percent.

As an entire company, Capital One's net income for the first
quarter came in at $1.1 billion, or $1.79 per diluted common share, compared
with net income of $843 million, or $1.41 per diluted common share, for the
fourth quarter and net income of $1.4 billion, or $2.72 per diluted common
share, for the first quarter of last year.

Without the impact of a bargain purchase gain related to the
ING Direct acquisition, the company indicated first quarter net income would
have been $809 million, or $1.56 per diluted common share.

"Each of our businesses delivered solid results in the
quarter and our balance sheet is strong," Capital One chairman and chief executive
officer Richard Fairbank said. "We continue to generate significant capital and
we're focused on returning capital to our shareholders."

After reviewing the company's performance, Fitch Ratings
analysts offered a projection of Capital One's performance trajectory going
forward.

"Fitch notes that further earnings improvement will be
heavily predicated on loan growth, which Fitch believes could remain
challenging over a near-to-intermediate term time horizon," analysts said. "Overall
credit metrics continue to be strong with overall net charge-off rates, 30-day
plus performing delinquency rates, and non-performing asset rates all declining
from the sequential quarter.

"While there was a very modest up-tick in credit card net
charge-off rates rates, Fitch believes this was largely due to some seasonality
as well as the continued seasoning of some of the HSBC acquired loans," they
continued.

"On balance, Fitch continues to view credit metrics across
most of cost of funds lending categories as near a cyclical low, and Fitch
would expect metrics to deteriorate over an intermediate to long term time
horizon," analysts went on to say.


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