Investor Relations
Investor Relations > Press Release

Capital One Reports Fourth Quarter 2020 Net Income of $2.6 billion, or $5.35 per share

Excluding adjusting items, Fourth Quarter 2020 Net Income of $5.29 per share(1)

MCLEAN, Va., Jan. 26, 2021 /PRNewswire/ --  Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2020 of $2.6 billion, or $5.35 per diluted common share, compared with net income of $2.4 billion, or $5.06 per diluted common share in the third quarter of 2020, and with net income of $1.2 billion, or $2.25 per diluted common share in the fourth quarter of 2019. Excluding adjusting items, net income for the fourth quarter of 2020 was $5.29 per diluted common share(1). In addition, Capital One's Board of Directors has authorized a common stock repurchase program of up to $7.5 billion.

"Our long-standing strategic choices put us in a strong position to respond to both the near-term challenges and the emerging opportunities as the pandemic plays out," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "Despite the pressures of the pandemic in the near-term, nothing has changed about where we think our businesses are headed, or the long-term strategic opportunities that are being created as sweeping digital change continues to transform banking."

Adjusting items in the fourth quarter of 2020, which are excluded from diluted earnings per share (EPS), efficiency ratio and operating efficiency ratio metrics (see Table 15 in our Financial Supplement for additional information):

(Dollars in millions, except per share data)

Pre-Tax
Impact

Diluted EPS
Impact

Legal reserve activity, including insurance recoveries

$

37


$

0.07


Cybersecurity Incident expenses, net of insurance

(6)


(0.01)



The quarter included the following notable item:


(Dollars in millions, except per share data)

Pre-Tax
Impact

Diluted EPS
Impact

Equity investment gain

$

60


$

0.10


All comparisons below are for the fourth quarter of 2020 compared with the third quarter of 2020 unless otherwise noted.

Fourth Quarter 2020 Income Statement Summary:

  • Total net revenue decreased 1 percent to $7.3 billion.
  • Total non-interest expense increased 13 percent to $4.0 billion:
    • 99 percent increase in marketing.
    • 6 percent increase in operating expenses.
  • Pre-provision earnings decreased 13 percent to $3.3 billion(2).
  • Provision for credit losses decreased 20 percent to $264 million:
    • Net charge-offs of $856 million.
    • $593 million loan reserve release.
  • Net interest margin of 6.05 percent, an increase of 37 basis points.
  • Efficiency ratio of 54.64 percent.
    • Efficiency ratio excluding adjusting items of 55.06 percent(1).
  • Operating efficiency ratio of 46.97 percent.
    • Operating efficiency ratio excluding adjusting items of 47.39 percent(1).

Fourth Quarter 2020 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 13.7 percent at December 31, 2020.
  • Period-end loans held for investment in the quarter increased $3.4 billion, or 1 percent, to $251.6 billion.
    • Credit Card period-end loans increased $3.3 billion, or 3 percent, to $107.0 billion.
      • Domestic Card period-end loans increased $3.0 billion, or 3 percent, to $98.5 billion.
    • Consumer Banking period-end loans increased $200 million, or less than 1 percent, to $68.9 billion.
      • Auto period-end loans increased $368 million, or 1 percent, to $65.8 billion.
    • Commercial Banking period-end loans decreased $114 million, or less than 1 percent, to $75.8 billion.
  • Average loans held for investment in the quarter decreased $1.8 billion, or 1 percent, to $247.7 billion.
    • Credit Card average loans decreased $1.8 billion, or 2 percent, to $103.6 billion.
      • Domestic Card average loans decreased $1.9 billion, or 2 percent, to $95.5 billion.
    • Consumer Banking average loans increased $986 million, or 1 percent, to $68.8 billion.
      • Auto average loans increased $1.1 billion, or 2 percent, to $65.6 billion.
    • Commercial Banking average loans decreased $1.0 billion, or 1 percent, to $75.3 billion.
  • Period-end total deposits decreased $283 million, or less than 1 percent, to $305.4 billion, while average deposits decreased $1.0 billion, or less than 1 percent, to $304.5 billion.
  • Interest-bearing deposits rate paid decreased 18 basis points to 0.51 percent.

All comparisons below are for the full year of 2020 compared with the full year of 2019 unless otherwise noted.

 2020 Full Year Income Statement Summary:

  • Total net revenue decreased less than 1% to $28.5 billion.
  • Total non-interest expense decreased 3 percent to $15.1 billion:
    • 29 percent decrease in marketing.
    • 2 percent increase in operating expenses.
  • Pre-provision earnings increased 3 percent to $13.5 billion(2).
  • Provision for credit losses increased 65 percent to $10.3 billion:
  • Efficiency ratio of 52.79 percent.
    • Efficiency ratio excluding adjusting items of 51.66 percent(1).
  • Operating efficiency ratio of 47.14 percent.
    • Operating efficiency ratio excluding adjusting items of 46.01 percent(1).

(1)

Amounts excluding adjusting items are non-GAAP measures that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance, both in the current period and across periods. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.

(2)

Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 26, 2021 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through February 9, 2021 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2019.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $305.4 billion in deposits and $421.6 billion in total assets as of  December 31, 2020. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

 

 

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement(1)(2)

Fourth Quarter 2020

Table of Contents


Capital One Financial Corporation Consolidated Results

Page


Table 1:

Financial Summary—Consolidated

1


Table 2:

Selected Metrics—Consolidated

3


Table 3:

Consolidated Statements of Income

4


Table 4:

Consolidated Balance Sheets

7


Table 5:

Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)

10


Table 6:

Average Balances, Net Interest Income and Net Interest Margin

11


Table 7:

Loan Information and Performance Statistics

12


Table 8:

Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

15

Business Segment Results



Table 9:

Financial Summary—Business Segment Results

17


Table 10:

Financial & Statistical Summary—Credit Card Business

18


Table 11:

Financial & Statistical Summary—Consumer Banking Business

20


Table 12:

Financial & Statistical Summary—Commercial Banking Business

21


Table 13:

Financial & Statistical Summary—Other and Total

22

Other



Table 14:

Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)

23


Table 15:

Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures

24

__________



(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the
earnings presentation. Investors should refer to our Annual Report on Form 10-K for the period ended December 31,
2020 once it is filed with the Securities and Exchange Commission.


(2)

This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to
investors and users of our financial information as they provide an alternate measurement of our performance and assist
in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed
as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S.
("GAAP"), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.


 

                

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated














2020 Q4 vs.


Year Ended December 31,

(Dollars in millions, except per share data and as noted)


2020


2020


2020


2020


2019


2020


2019






2020 vs.


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2020


2019


2019

Income Statement





















Net interest income


$

5,873



$

5,555



$

5,460



$

6,025



$

6,066



6

%


(3)

%


$

22,913



$

23,340



(2)

%

Non-interest income


1,464



1,826



1,096



1,224



1,361



(20)



8



5,610



5,253



7


Total net revenue(1)


7,337



7,381



6,556



7,249



7,427



(1)



(1)



28,523



28,593




Provision for credit losses


264



331



4,246



5,423



1,818



(20)



(85)



10,264



6,236



65


Non-interest expense:





















Marketing


563



283



273



491



710



99



(21)



1,610



2,274



(29)


Operating expense


3,446



3,265



3,497



3,238



3,451



6





13,446



13,209



2


Total non-interest expense


4,009



3,548



3,770



3,729



4,161



13



(4)



15,056



15,483



(3)


Income (loss) from continuing operations before income taxes


3,064



3,502



(1,460)



(1,903)



1,448



(13)



112



3,203



6,874



(53)


Income tax provision (benefit)


496



1,096



(543)



(563)



270



(55)



84



486



1,341



(64)


Income (loss) from continuing operations, net of tax


2,568



2,406



(917)



(1,340)



1,178



7



118



2,717



5,533



(51)


Income (loss) from discontinued operations, net of tax


(2)





(1)





(2)



**





(3)



13



**


Net income (loss)


2,566



2,406



(918)



(1,340)



1,176



7



118



2,714



5,546



(51)


Dividends and undistributed earnings allocated to participating securities(2)


(19)



(20)



(1)



(3)



(7)



(5)



171



(20)



(41)



(51)


Preferred stock dividends


(68)



(67)



(90)



(55)



(97)



1



(30)



(280)



(282)



(1)


Issuance cost for redeemed preferred stock(3)


(17)







(22)



(31)



**



(45)



(39)



(31)



26


Net income (loss) available to common stockholders


$

2,462



$

2,319



$

(1,009)



$

(1,420)



$

1,041



6



137



$

2,375



$

5,192



(54)


Common Share Statistics





















Basic earnings per common share:(2)





















Net income (loss) from continuing operations


$

5.36



$

5.07



$

(2.21)



$

(3.10)



$

2.26



6

%


137

%


$

5.20



$

11.07



(53)

%

Income (loss) from discontinued operations
















(0.01)



0.03



**


Net income (loss) per basic common share


$

5.36



$

5.07



$

(2.21)



$

(3.10)



$

2.26



6



137



$

5.19



$

11.10



(53)


Diluted earnings per common share:(2)





















Net income (loss) from continuing operations


$

5.35



$

5.06



$

(2.21)



$

(3.10)



$

2.25



6



138



$

5.19



$

11.02



(53)


Income (loss) from discontinued operations
















(0.01)



0.03



**


Net income (loss) per diluted common share


$

5.35



$

5.06



$

(2.21)



$

(3.10)



$

2.25



6



138



$

5.18



$

11.05



(53)


Weighted-average common shares outstanding (in millions):





















Basic


459.1



457.8



456.7



457.6



460.9







457.8



467.6



(2)


Diluted


460.2



458.5



456.7



457.6



463.4





(1)



458.9



469.9



(2)


Common shares outstanding (period-end, in millions)


459.0



457.4



456.3



455.3



456.6





1



459.0



456.6



1


Dividends declared and paid per common share


$

0.10



$

0.10



$

0.40



$

0.40



$

0.40





(75)



$

1.00



$

1.60



(38)


Tangible book value per common share (period-end)(4)


88.34



83.67



78.82



80.68



83.72



6



6



88.34



83.72



6












































































2020 Q4 vs.


Year Ended December 31,

(Dollars in millions)


2020


2020


2020


2020


2019


2020


2019






2020 vs.


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2020


2019


2019

Balance Sheet (Period-End)





















Loans held for investment


$

251,624



$

248,223



$

251,512



$

262,990



$

265,809



1

%


(5)

%


$

251,624



$

265,809



(5)

%

Interest-earning assets


388,917



390,040



389,829



364,472



355,202





9



388,917



355,202



9


Total assets


421,602



421,883



421,296



396,878



390,365





8



421,602



390,365



8


Interest-bearing deposits


274,300



276,092



275,183



245,142



239,209



(1)



15



274,300



239,209



15


Total deposits


305,442



305,725



304,238



269,689



262,697





16



305,442



262,697



16


Borrowings


40,539



42,795



44,900



55,681



55,697



(5)



(27)



40,539



55,697



(27)


Common equity


55,356



53,093



50,835



51,620



53,157



4



4



55,356



53,157



4


Total stockholders' equity


60,204



58,424



56,045



56,830



58,011



3



4



60,204



58,011



4


Balance Sheet (Average Balances)





















Loans held for investment


$

247,689



$

249,511



$

253,358



$

262,889



$

258,870



(1)

%


(4)

%


$

253,335



$

247,450



2

%

Interest-earning assets


388,252



391,451



378,145



355,347



349,150



(1)



11



378,362



341,510



11


Total assets


420,011



422,854



411,075



390,380



383,162



(1)



10



411,187



374,924



10


Interest-bearing deposits


274,142



276,339



261,256



241,115



236,250



(1)



16



263,279



231,609



14


Total deposits


304,513



305,516



288,344



264,653



260,040





17



290,835



255,065



14


Borrowings


40,662



44,161



49,827



51,795



51,442



(8)



(21)



46,588



50,965



(9)


Common equity


54,220



51,995



52,413



53,186



52,641



4



3



52,954



50,960



4


Total stockholders' equity


59,389



57,223



57,623



58,568



58,148



4



2



58,201



55,690



5


 

                

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated














2020 Q4 vs.


Year Ended December 31,

(Dollars in millions, except as noted)


2020


2020


2020


2020


2019


2020


2019






2020 vs.


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2020


2019


2019

Performance Metrics





















Net interest income growth (period over period)


6

%


2

%


(9)

%


(1)

%


6

%


**



**



(2)

%


2

%


**


Non-interest income growth (period over period)


(20)



67



(10)



(10)



11



**



**



7



1



**


Total net revenue growth (period over period)


(1)



13



(10)



(2)



7



**



**





2



**


Total net revenue margin(5)


7.56



7.54



6.93



8.16



8.51



2

bps


(95)

bps


7.54



8.37



(83)

bps

Net interest margin(6)


6.05



5.68



5.78



6.78



6.95



37



(90)



6.06



6.83



(77)


Return on average assets


2.45



2.28



(0.89)



(1.37)



1.23



17



122



0.66



1.48



(82)


Return on average tangible assets(7)


2.54



2.36



(0.93)



(1.43)



1.28



18



126



0.69



1.54



(85)


Return on average common equity(8)


18.18



17.84



(7.69)



(10.68)



7.93



34



10

%


4.49



10.16



(6)

%

Return on average tangible common equity(9)


25.02



24.98



(10.74)



(14.85)



11.07



4



14



6.24



14.37



(8)


Non-interest expense as a percentage of average loans held for
investment


6.47



5.69



5.95



5.67



6.43



78



4

bps


5.94



6.26



(32)

bps

Efficiency ratio(10)


54.64



48.07



57.50



51.44



56.03



7

%


(139)



52.79



54.15



(136)


Operating efficiency ratio(11)


46.97



44.24



53.34



44.67



46.47



273

bps


50



47.14



46.20



94


Effective income tax rate for continuing operations


16.2



31.3



37.2



29.6



18.6



(15)

%


(240)



15.2



19.5



(4)

%

Employees (period-end, in thousands)


52.0



52.5



53.1



52.1



51.9



(1)





52.0



51.9




Credit Quality Metrics





















Allowance for credit losses


$

15,564



$

16,129



$

16,832



$

14,073



$

7,208



(4)

%


116

%


$

15,564



$

7,208



116

%

Allowance coverage ratio


6.19

%


6.50

%


6.69

%


5.35

%


2.71

%


(31)

bps


348

bps


6.19

%


2.71

%


348

bps

Net charge-offs


$

856



$

1,073



$

1,505



$

1,791



$

1,683



(20)

%


(49)

%


$

5,225



$

6,252



(16)

%

Net charge-off rate(12)


1.38

%


1.72

%


2.38

%


2.72

%


2.60

%


(34)

bps


(122)

bps


2.06

%


2.53

%


(47)

bps

30+ day performing delinquency rate(13)


2.41



1.97



2.09



2.95



3.51



44



(110)



2.41



3.51



(110)


30+ day delinquency rate(13)


2.61



2.22



2.30



3.16



3.74



39



(113)



2.61



3.74



(113)


Capital Ratios(14)





















Common equity Tier 1 capital


13.7

%


13.0

%


12.4

%


12.0

%


12.2

%


70

bps


150

bps


13.7

%


12.2

%


150

bps

Tier 1 capital


15.3



14.8



14.2



13.7



13.7



50



160



15.3



13.7



160


Total capital


17.7



17.3



16.7



16.1



16.1



40



160



17.7



16.1



160


Tier 1 leverage


11.2



10.6



10.3



11.0



11.7



60



(50)



11.2



11.7



(50)


Tangible common equity ("TCE")(15)


10.0



9.4



8.8



9.6



10.2



60



(20)



10.0



10.2



(20)


 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income














2020 Q4 vs.


Year Ended December 31,



2020


2020


2020


2020


2019


2020


2019






2020 vs.

(Dollars in millions, except per share data and as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2020


2019


2019

Interest income:





















Loans, including loans held for sale


$

5,954



$

5,758



$

5,820



$

6,542



$

6,682



3

%


(11)

%


$

24,074



$

25,862



(7)

%

Investment securities


422



443



482



530



544



(5)



(22)



1,877



2,411



(22)


Other


15



14



16



37



44



7



(66)



82



240



(66)


Total interest income


6,391



6,215



6,318



7,109



7,270



3



(12)



26,033



28,513



(9)


Interest expense:





















Deposits


347



476



611



731



832



(27)



(58)



2,165



3,420



(37)


Securitized debt obligations


34



43



56



99



118



(21)



(71)



232



523



(56)


Senior and subordinated notes


128



132



180



239



236



(3)



(46)



679



1,159



(41)


Other borrowings


9



9



11



15



18





(50)



44



71



(38)


Total interest expense


518



660



858



1,084



1,204



(22)



(57)



3,120



5,173



(40)


Net interest income


5,873



5,555



5,460



6,025



6,066



6



(3)



22,913



23,340



(2)


Provision for credit losses


264



331



4,246



5,423



1,818



(20)



(85)



10,264



6,236



65


Net interest income after provision for credit losses


5,609



5,224



1,214



602



4,248



7



32



12,649



17,104



(26)


Non-interest income:





















Interchange fees, net


818



775



672



752



811



6



1



3,017



3,179



(5)


Service charges and other customer-related fees


338



320



258



327



342



6



(1)



1,243



1,330



(7)


Net securities gains (losses)




25







(18)



**



**



25



26



(4)


Other


308



706



166



145



226



(56)



36



1,325



718



85


Total non-interest income


1,464



1,826



1,096



1,224



1,361



(20)



8



5,610



5,253



7


Non-interest expense:





















Salaries and associate benefits


1,755



1,719



1,704



1,627



1,652



2



6



6,805



6,388



7


Occupancy and equipment


572



506



523



517



565



13



1



2,118



2,098



1


Marketing


563



283



273



491



710



99



(21)



1,610



2,274



(29)


Professional services


394



327



304



287



318



20



24



1,312



1,237



6


Communications and data processing


295



310



308



302



346



(5)



(15)



1,215



1,290



(6)


Amortization of intangibles


8



14



16



22



28



(43)



(71)



60



112



(46)


Other(16)


422



389



642



483



542



8



(22)



1,936



2,084



(7)


Total non-interest expense


4,009



3,548



3,770



3,729



4,161



13



(4)



15,056



15,483



(3)


Income (loss) from continuing operations before income taxes


3,064



3,502



(1,460)



(1,903)



1,448



(13)



112



3,203



6,874



(53)


Income tax provision (benefit)


496



1,096



(543)



(563)



270



(55)



84



486



1,341



(64)


Income (loss) from continuing operations, net of tax


2,568



2,406



(917)



(1,340)



1,178



7



118



2,717



5,533