Capital One Financial Earnings Call Insights: Integration Costs and Liquid Assets
Sanjay Sakhrani – KBW: So, I just have some clarification questions on the forward-looking commentary in the press release. I just want to be clear that we should assume roughly annual revenues of about $22.4 billion in 2013 and that basically annualizes the 5.6 that you guys did this quarter despite some of the seasonal pressures as well as those unique to the fourth quarter and now in the expense side, the 12.4, I guess, does that include integration costs?
Gary L. Perlin – CFO: Sanjay, It’s Gary. Let me take the cost question first. I said $12.5 billion for the year, that’s about 3.1 and change per quarter and, yes that includes integration costs. That also includes about $600 million worth of amortization of PCCR and other intangibles as, well. So that is a number is GAAP related, it also includes as we have said before about $11 billion of operating expense and $1.5 billion of marketing expense. And with respect to the view of revenue, yes if you took the fourth quarter revenues and got to about a $22.5 billion number for 2013 that would be a reasonable expectation right now, assuming that the external environment does not change materially so we’re dealing with the curve as we know it we’re dealing with loan demand as we know it we’re dealing with the amortization of a premium in revenue as well that is about where we would expect to be.
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Scott Valentin – FBR Capital Markets: Just with regard to the impact on margin you mentioned you are holding lot of liquid assets to pay off your TruPS. Is there any way you can quantify that in terms of basis points or EPS for the quarter. And I have one follow-up question.
Gary L. Perlin – CFO: Scott I can’t really pull that apart for you other than to say that we did actually build that cash position relatively early in the fourth quarter even though we knew we didn’t need the cash until January 2 with some of the uncertainties in Washington and so forth, we felt that it was prudent to make sure we had that cash on hand. So, we did have a full quarter worth of that additional cash and you can do the math from there. Also remember that we had a significant build up in our securities portfolios as well which is a bit below average for the overall margin and it’s something that you can expect we are going to continue to have, roughly speaking I think the combination of the impact of having that extra cash in advance of repaying the TruPS and the investment portfolio let’s call it about 20 basis points or just a little bit less than half of the compression in NIM you saw over the quarter the balance would largely be explained by the increase in revenue suppression in card which was combination of seasonality in purchase accounting.
Scott Valentin – FBR Capital Markets: Just a follow-up – I think it was the presentation you mentioned some nonrecurring expenses at the bank that increased expenses for the quarter by 15% or 16%. Just wondering if you could qualify what those are maybe some of the major expenses or for the sundry item.
Jeff Norris – SVP, IR: Scott it’s Jeff. I can follow-up and give you a little bit more detail on that after the call but it was essentially I think some accounting driven changes that are in kind of technical in nature and nonrecurring.
A Closer Look: Capital One Financial Earnings Cheat Sheet>>