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Capital One Financial Corp.'s U.S. Card segment today reported net income of $2.4 million for the first quarter ended March 31, a 99.5% decrease from $491.2 million for the same period in 2008. The unit reported a net loss of $175.6 million for the fourth quarter of last year. Purchase volume totaled $21.6 billion, down 11.8% from $24.5 billion. Cap One's provision for card-loan losses increased 36.4% during the quarter, to $1.5 billion from $1.1 billion a year earlier. The net charge-off rate during the first quarter jumped to 8.39% of credit card receivables, up 254 basis points from 5.85% during the same quarter in 2008. The 30-day delinquency rate on Cap One's U.S.cards was 5.08% of receivables in the first quarter, compared with 4.04% during the same period a year ago. "Economic deterioration continued at a rapid pace during the first quarter driving increasing delinquency and charge-off rates across most of our lending businesses," Richard D. Fairbank, Cap One founder, chairman and CEO, said yesterday during a teleconference with analysts. "U.S. card charge-off rate increased to 8.4% for the first quarter, above the 8.1% charge-off rate expectation we articulated a quarter ago. The increase in charge-off rates beyond our expectations resulted from several factors related to the pace of economic deterioration in the quarter," Fairbank said.
