Private Equity, Venture Capital, Finance News and Assistance

As if you needed another reason to get short Capital One Financial (COF). For purposes of this discussion, I am going to ignore the Credit Card portfolio and its accelerating delinquencies and charge offs. I am going to ignore the HELOCs. I am going to ignore the exposure to the collapsing UK housing market. I am going to ignore the Auto Finance portfolio, which is more than likely the next “shoe to drop”, to borrow CNBC's overused phrase. I hate to pile it on, but this should not be a $40 stock. A quick history lesson for anyone not familiar with the history of Capital One, The Bank. Just before Katrina hit New Orleans in 2005, COF announced the agreement to purchase Hibernia Bank, a midsize commercial bank from Louisiana and Texas. I think COF's timing on the Hibernia deal is a good metaphor for their excursion into retail banking. In early 2006, COF announced the purchase of North Fork Bank (NFB), of Melville NY. NFB was the leading bank on Long Island in market share and was rapidly growing in the New York City market. NFB focused on growing deposits through its network of Private Bankers, many of whom focused on the NYC real estate market. NFB also owned Greenpoint Mortgage, a top-10 national mortgage lender based in California that specialized in Alt-A. Needless to say, Greenpoint was closed in late 2007.