Capital One Financial Earnings Call Insights: CCAR Discussion and Card Industry Competition
Ryan Nash – Goldman Sachs: Just a follow-up on the comments on CCAR. You talked about the plan contemplated you being able to go back and repurchase some stock that was freed up. Can you give us a sense of what that incorporates? So is it is you’re allowed to repurchase stock of the capital that was actually freed up from the transaction or is it a different amount? And second, just when you say total payout way above bank industry norms, can you kind of try to quantify that or at least putting in a range for us?
Gary L. Perlin – CFO: Yes Ryan. First of all, there is not an official kind of CCAR process that we’re reentering here. So our intent is consistency with what was in our original CCAR process or application, if you will. And that was very explicit about this Best Buy component. So what we’re trying to free up is the capital associated with the Best Buy sale. But, again, what actually happens along the way in these conversations is something that there’s not an official process, and we’ll have to see what happens in the Fed conversation. With respect to what do we mean by payout above sort of industry norms, bank industry norms, as we look out there, I think the bank industry norms are running around 50% in terms of total payout ratio, and our intent for 2014 is to distribute well above that.
Card Industry Competition
Craig Maurer – Credit Agricole Sec: So, quickly if the buyback, if you were to get a new approval for the buyback, the earliest we could hope for is basically fourth quarter as you expect the sale to close in the third, correct? And secondly, you discussed loan growth being still the big challenge out there. Can you discuss what you are seeing from competitors, especially in the card industry, that could be limiting that availability?
Gary L. Perlin – CFO: Craig, it’s Gary, I’ll take your first question. And again, as Rich said, there is not a formal process but just following our own capital plan, we would wait until after the sale closes and the capital is freed up to begin any repurchases that are approved by the regulators, so that would be probably end of the third quarter, early fourth, yes.
Richard D. Fairbank – Founder, Chairman and CEO: Craig, in terms of the competition, I assume we are talking about in the card business. I think competition in the card business is at a – I mean it’s always intense, but it’s at a fairly stable and reasonably rational level. The biggest issue I think we start with is just sort of demand itself industry. I mean revolving debt is generally going sideways. It’s been going sideways for an extended period of time. Certainly purchase volume in the card industry – since it’s kind of bottomed at the downturn, the card industry has seen their own purchase volume grow faster than a retail sales in the same way that the reverse effect happened on the way down. So I mean that’s been a pretty good thing. And I think the industry has settled out to a place where supply is down from where it went to in 2011. I think what happened is as competitors saw the sun just start to peek out a little bit with respect to the great recession, they stepped on the gas with respect to direct mail volumes and marketing in 2011, and I think found that that there wasn’t nearly kind of the response that they had hoped for. So, what has happened is direct mail volumes are now kind of like 30% down from there, generally stable. Pricing out there in the marketplace is generally stable, I think going up just a little bit. And so, I don’t think our opportunities are really being driven by competitor actions. I think they’re really being driven by the choice that we make in the – it’s sort of again, if we denominate our conversation by loan growth and really the choices about the high balance revolvers and the balance transfer, sort of the teaser rate gain, that is the thing that sort of most dominates the metrics with respect to loan growth. But if I look beyond that, yes, demand is weak. We are gaining share in all the segments that we are investing in. I think we very much like the economics of what we are booking. And we don’t want to push anything in an unnatural way, but the key thing is, we are saying, we want to make sure that we can maintain the exceptionally high returns we have in the card business and we got to do that through managing our expenses carefully. Redoubling that imperative of course is having Best Buy move out of the equation. So there’s tremendous energy on the expense side in the card business and then across the Company on both expenses and in terms of capital return.
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