Capital One Financial (COF)

Operating Expenses

Operating expenses increased 3.8% for the three months ended March 31, 2009 compared to the same period in the prior year. The first quarter of 2008 included a benefit of $90.9 million related to the Visa IPO. Excluding this one time item, operating expenses decreased 2.0%. The decrease in operating expenses was a direct result of benefits from the Company’s continued cost reduction initiatives.

Operating Expenses

Operating expenses decreased 7% for the year ended December 31. 2008. The decrease in operating expenses was a direct result of benefits from the Company’s continued cost reduction initiatives.

Operating expenses increased 22% for the year ended December 31. 2007. The increase The increase in operating expense was driven by the addition of North Fork’s operating expenses, CDI amortization and integration expenses associated with our bank acquisitions, litigation accruals related to industry litigation, restructuring charges associated with our cost initiative, and the accelerated vesting of restricted stock related to the transition to new management in our Local Banking segment.