McLEAN, Va. — Despite mixed overall net income results, Capital One Financial Corp. watched its auto finance activity strengthen during the third quarter.

Capital One determined its auto finance originations came in at $3.4 billion, up 17 percent from the second quarter's total of $2.91 billion. The third-quarter level also was 40 percent higher than what the company generated during the same quarter of 2010. That's when Capital One had $2.44 billion in auto loan originations.

Elsewhere in its auto finance business, Capital One acknowledged its charge-off and delinquency rates increased in the quarter, consistent with expected seasonal patterns.

Looking quarter-over-quarter, the company's charge-off rate climbed from 1.11 percent to 1.69 percent, while its 30-day delinquency rates ticked up to 6.34 percent from 6.09 percent.

However, year-over-year, Capital One's charge-offs and delinquencies improved 102 basis points and 108 basis points, respectively. The company noted charge-offs at the third quarter of last year stood at 2.71 percent as delinquencies came in at 7.42 percent.

"Auto finance credit performance remains strong with originations continuing to perform better than originations from 2007 and 2008," company officials highlighted.

"In fact, auto finance credit metrics are near their all-time lows, driven by the actions the company took to retrench and reposition the business, tight underwriting and loss mitigation actions through the recession and continued strength in used-car auction prices," they continued.

Net Income & Revenue Performance

Capital One revealed its third quarter net income came in at $813 million or $1.77 per diluted common share, down from $911 million or $1.97 per diluted common share for the second quarter.

In the year-ago quarter, the company posted net income of $803 million or $1.76 per diluted common share.

Capital One reported its third-quarter total revenue rose to $4.2 billion, up $161 million or 4.0 percent from a quarter earlier.

Officials surmised net interest income drove the majority of the increase in revenue, increasing $147 million to $3.3 billion.

"Approximately half of this growth resulted from a decline in the level of revenue suppression in the credit card segment," Capital One explained.

"This lower level of suppression was driven by an increase in the estimated collectability of billed finance charges and fees on existing credit card balances," the company also noted.

In addition, Capital One pointed out there were two largely offsetting revenue items related to the company's balance sheet repositioning ahead of the pending acquisition of ING Direct.

The company recognized $239 million of gains from the sale of $6.4 billion of securities, which were predominately agency mortgage backed securities.

Furthermore at the end of the quarter, the company recognized a $266 million mark-to-market loss on the previously announced pay-fixed swap executed in early August.

"Our strong third-quarter results demonstrate that we remain well-positioned to win in the marketplace and deliver shareholder value," stated Richard Fairbank, Capital One's chairman and chief executive officer.

"We expect that the acquisitions of ING Direct and the HSBC US Card Business will deliver attractive financial results in the near-term and put us in an even stronger position to enhance and sustain the value we can deliver to our customers, our communities and our shareholders," Fairbank concluded.