...Good Earnings Performance: Capital One's (COF) earnings performance has remained good and above the large regional bank peer group average. This is due to the company's relatively high net interest margin (NIM) given its higher yielding asset mix and comparatively good cost structure. However, Fitch Ratings notes that COF's results over the past two years have been significantly impacted by merger costs, purchase accounting adjustments and reserve releases, making core earnings comparisons slightly more challenging given the multiple moving parts. Funding Profile Improved: Over the past several years, COF has been working to improve its funding profile through the acquisition of institutions that have provided it core deposit funding. The latest deposit driven acquisition was the acquisition of ING Direct USA in 2011 for $9bn. This provided the company additional deposit funding and gave it a leading online deposit franchise. While Fitch views this evolution of COF's funding profile positively,...
