Latest Capial One deal would make it one of the nation's 10 largets banks

Virginia Business
April 2006

Is Capital One Financial Corp. swimming against the tide? At a time when many banks are acquiring major credit card issuers. McLean-based Capital One is buying banks.

The company’s latest acquisition is a $14.6 billion stock and cash deal for Long Island-based North Fork Bancorp, the third largest bank in the New York City area. Less than a year ago, Capital One bought New Orleans-based Hibernia Corp. in a $4.9 billion transaction that was re-evaluated after Hurricane Katrina barreled through the Gulf Coast.

With the North Fork acquisition, Capital One would have deposits of more than $84 billion, making it one of the 10 largest banks in the United States.
“ North Fork is a great strategic fit with Capital One and brings balance and diversification to our company,” Richard Fairbank, Capital One’s chairman and CEO, said in a statement.

Fairbank described North Fork as a “proven franchise” in the nation’s largest banking market. The company has $36.6 billion in deposits and 355 branches in New York, New Jersey and Connecticut.

Capital One’s banking acquisitions are in sharp contrast to the bank takeovers of credit card issuers occurring in its industry. For example, Charlotte, N.C.-based Bank of America Corp. acquired MBNA Corp. in January to create the nation’s largest credit card issuer. Other deals in the past year have involved Washington Mutual Inc. taking over Providian Financial Corp. and HSBC Financial Corp. acquiring Metris Cos.
With regulatory and shareholder approvals, the Capital One-North Fork deal is expected to close during this year’s fourth quarter.

North Fork shareholders can choose to receive cash or Capital One stock. In either case, they will receive $11.25 for each share plus the value at closing of .2216 Capital One shares. The transaction was valued at $31.18 per North Fork share based on the closing price of Capital One shares on March 10, the last trading day before the deal was announced.