McLEAN, Va. — Capital One Auto Finance has continued to reduce originations as the company responds to the turbulent economic environment. On the positive side, the business unit bolstered its net income from continuing operations.

Originations came in at $1.342 billion for the second quarter, compared with $1.436 billion in the previous period. This figure compares to $1.514 billion in the second quarter of 2008.

As for net income from continuing operations, the segment's results came in at $97.2 million for the period, compared with $71.4 in the previous quarter and a loss of $924.6 million in the fourth quarter of last year.

Looking at the results more closely, SubPrime Auto Finance News discovered that the net charge-off rate also improved for the time frame, down to 3.65 percent from 4.88 percent in the first quarter. This statistic stood at 5.67 percent in the fourth quarter of 2008.

Although charge-offs declined, Capital One Auto Finance's delinquency rate climbed to 8.89 percent, versus 7.52 percent in the prior quarter. This figure came in at 9.91 percent in the fourth quarter of last year.

Total managed loans held for investment in this segment was $19.9 billion, down $765.5 million from the first quarter, or 3.7 percent.

The auto finance unit is a part of Capital One's national lending segment, which also contains U.S. card and international lending divisions.

The national lending segment posted a profit of $270.8 million for the quarter, up from $75.9 million in the first quarter, but down from $407.6 million from a year ago.

"Each business within national lending also reported a profit in the second quarter of 2009 — U.S. card delivered $168.4 million, the auto finance business reported $97.2 million and international contributed $5.2 million," officials explained.

They went on to say, "Performance in the national lending segment primarily reflects expected continued economic deterioration during the second quarter, although the pace of deterioration was partially offset by seasonal benefits and the company's ongoing efforts to aggressively manage risk."

Company wide, net income for Capital One Finance Corp. came in at $224.2 million, or $0.53 per common share prior to the impact of the government's TARP preferred share investment. After including $461.7 million impact of the June redemption of preferred shares and the $38 million dividend payment on those shares in the quarter, the company posted a net loss of $0.65 per common share.

"Second-quarter results reflect the economic environment and our actions to decisively manage the company through the downturn for the benefit of our shareholders," explained Richard Fairbank, Capital One's chairman and chief executive officer.

"Despite turbulence in the marketplace, we believe that we remain well-positioned to weather the storm, deliver shareholder value over the cycle and achieve our vision of combining great local banking franchises with a high-return credit card business," he continued.

Gary Perlin, Capital One's chief financial officer, added, "Our capital strength was evident in the quarter as we repaid the government's preferred share investment and increased our tangible common equity ratio by 90 basis points to 5.7 percent. In addition, the company's strong deposit franchise helped drive margin expansion through lower funding costs and will continue to serve as a cornerstone of our rock-solid balance sheet."