Capital One Reports Second Quarter 2022 Net Income of $2.0 billion, or $4.96 per share

MCLEAN, Va., July 21, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2022 of $2.0 billion, or $4.96 per diluted common share, compared with net income of $2.4 billion, or $5.62 per diluted common share in the first quarter of 2022, and with net income of $3.5 billion, or $7.62 per diluted common share in the second quarter of 2021.

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"We continued to drive attractive and resilient growth in the second quarter, and we're staying focused on the most resilient businesses and opportunities," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "The choices we're making today put us in a strong position to continue to deliver long-term value as the sweeping digital transformation of banking continues."

All comparisons below are for the second quarter of 2022 compared with the first quarter of 2022 unless otherwise noted.

Second Quarter 2022 Income Statement Summary:

  • Total net revenue increased 1 percent to $8.2 billion.
  • Total non-interest expense increased 1 percent to $4.6 billion:
    • 9 percent increase in marketing.
    • 1 percent decrease in operating expenses.
  • Pre-provision earnings increased 1 percent to $3.6 billion.(1)
  • Provision for credit losses increased $408 million to $1.1 billion:
    • Net charge-offs of $845 million.
    • $200 million loan reserve build.
  • Net interest margin of 6.54 percent, an increase of 5 basis points.
  • Efficiency ratio of 55.67 percent.
  • Operating efficiency ratio of 43.49 percent.

Second Quarter 2022 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.1 percent at June 30, 2022.
  • Period-end loans held for investment in the quarter increased $15.9 billion, or 6 percent, to $296.4 billion.
    • Credit Card period-end loans increased $6.9 billion, or 6 percent, to $120.9 billion.
      • Domestic Card period-end loans increased $7.0 billion, or 6 percent, to $115.0 billion.
    • Consumer Banking period-end loans increased $1.2 billion, or 1 percent, to $81.5 billion.
      • Auto period-end loans increased $1.3 billion, or 2 percent, to $79.9 billion.
    • Commercial Banking period-end loans increased $7.8 billion, or 9 percent, to $94.0 billion.
  • Average loans held for investment in the quarter increased $10.8 billion, or 4 percent, to $286.1 billion.
    • Credit Card average loans increased $4.4 billion, or 4 percent, to $115.8 billion.
      • Domestic Card average loans increased $4.4 billion, or 4 percent, to $110.0 billion.
    • Consumer Banking average loans increased $2.3 billion, or 3 percent, to $81.0 billion.
      • Auto average loans increased $2.4 billion, or 3 percent, to $79.3 billion.
    • Commercial Banking average loans increased $4.1 billion, or 5 percent, to $89.3 billion.
  • Period-end total deposits decreased $5.5 billion, or 2 percent, to $307.9 billion, while average deposits decreased $3.6 billion, or 1 percent, to $306.0 billion.
  • Interest-bearing deposits rate paid increased 12 basis points to 0.44 percent.

1

Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period. Management believes that this financial metric is useful in enabling investors and others to assess the Company's ability to generate income to cover credit losses through a credit cycle, which can vary significantly between periods.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 21, 2022 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 August 4, 2022 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, 2021.

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 $307.9 billion in deposits and $440.3 billion in total assets as of June 30, 2022. 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) 

 Second Quarter 2022 

 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 

6






 Table 5: 

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

8






 Table 6: 

 Average Balances, Net Interest Income and Net Interest Margin 

9






 Table 7: 

 Loan Information and Performance Statistics 

10






 Table 8: 

 Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity 

12





 Business Segment Results 





 Table 9: 

 Financial Summary—Business Segment Results 

13






 Table 10: 

 Financial & Statistical Summary—Credit Card Business 

14






 Table 11: 

 Financial & Statistical Summary—Consumer Banking Business 

16






 Table 12: 

 Financial & Statistical Summary—Commercial Banking Business 

17






 Table 13: 

 Financial & Statistical Summary—Other and Total 

18





 Other 





 Table 14: 

 Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13) 

19






 Table 15: 

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

20

__________

 (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 Quarterly Report on Form 10-Q for the period ended June 30, 2022 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 














 2022 Q2 vs 


 Six Months Ended June 30, 


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


 2022 

 Q2 


 2022 

 Q1 


 2021 

 Q4 


 2021 

 Q3 


 2021 

 Q2 


 2022 

 Q1 


 2021 

 Q2 


2022


2021


 2022 vs 

 2021 







 Income Statement 



























Net interest income


$      6,517


$      6,397


$      6,450


$      6,156


$      5,743


2 %


13 %


$    12,914


$    11,565


12 %







Non-interest income


1,715


1,776


1,668


1,674


1,631


(3)


5


3,491


2,922


19







Total net revenue(1)


8,232


8,173


8,118


7,830


7,374


1


12


16,405


14,487


13







Provision (benefit) for credit losses


1,085


677


381


(342)


(1,160)


60


**


1,762


(1,983)


**







Non-interest expense:



























Marketing


1,003


918


999


751


620


9


62


1,921


1,121


71







Operating expense


3,580


3,633


3,679


3,435


3,346


(1)


7


7,213


6,585


10







Total non-interest expense


4,583


4,551


4,678


4,186


3,966


1


16


9,134


7,706


19







Income from continuing operations before income taxes


2,564


2,945


3,059


3,986


4,568


(13)


(44)


5,509


8,764


(37)







Income tax provision


533


542


633


882


1,031


(2)


(48)


1,075


1,900


(43)







Income from continuing operations, net of tax


2,031


2,403


2,426


3,104


3,537


(15)


(43)


4,434


6,864


(35)







Loss from discontinued operations, net of tax




(1)



(1)



**



(3)


**







Net income


2,031


2,403


2,425


3,104


3,536


(15)


(43)


4,434


6,861


(35)







Dividends and undistributed earnings allocated to participating securities(2)


(25)


(28)


(21)


(26)


(30)


(11)


(17)


(53)


(58)


(9)







Preferred stock dividends


(57)


(57)


(74)


(79)


(60)



(5)


(114)


(121)


(6)







Issuance cost for redeemed preferred stock(3)




(34)


(12)













Net income available to common stockholders


$      1,949


$      2,318


$      2,296


$      2,987


$      3,446


(16)


(43)


$      4,267


$      6,682


(36)







 Common Share Statistics 



























 Basic earnings per common share:(2) 



























Net income from continuing operations


$       4.98


$       5.65


$       5.43


$       6.81


$       7.65


(12) %


(35) %


$      10.65


$      14.70


(28) %







Net income per basic common share


$       4.98


$       5.65


$       5.43


$       6.81


$       7.65


(12)


(35)


$      10.65


$      14.70


(28)







 Diluted earnings per common share:(2) 



























Net income from continuing operations


$       4.96


$       5.62


$       5.41


$       6.78


$       7.62


(12) %


(35) %


$      10.61


$      14.65


(28) %







Net income per diluted common share


$       4.96


$       5.62


$       5.41


$       6.78


$       7.62


(12)


(35)


$      10.61


$      14.65


(28)







 Weighted-average common shares outstanding (in millions): 



























Basic


391.2


410.4


422.5


438.8


450.6


(5) %


(13) %


400.8


454.6


(12) %







Diluted


392.6


412.2


424.3


440.5


452.3


(5)


(13)


402.3


456.2


(12)







Common shares outstanding (period-end, in millions)


383.8


399.0


413.9


430.4


446.1


(4)


(14)


383.8


446.1


(14)







Dividends declared and paid per common share


$       0.60


$       0.60


$       0.60


$       1.20


$       0.40



50


$        1.20


$        0.80


50







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


87.84


91.77


99.74


99.60


97.20


(4)


(10)


87.84


97.20


(10)

































 2022 Q2 vs 


 Six Months Ended June 30, 







 (Dollars in millions) 


 2022 

 Q2 


 2022 

 Q1 


 2021 

 Q4 


 2021 

 Q3 


 2021 

 Q2 


 2022 

 Q1 


 2021 

 Q2 


2022


2021


 2022 vs 

 2021 







 Balance Sheet (Period-End) 



























Loans held for investment


$  296,384


$  280,466


$  277,340


$  261,390


$  249,597


6 %


19 %


$  296,384


$  249,597


19 %







Interest-earning assets


406,565


398,241


397,341


387,208


387,295


2


5


406,565


387,295


5







Total assets


440,288


434,195


432,381


425,377


423,420


1


4


440,288


423,420


4







Interest-bearing deposits


270,881


275,648


272,937


269,134


271,314


(2)



270,881


271,314








Total deposits


307,885


313,429


310,980


305,938


306,308


(2)


1


307,885


306,308


1







Borrowings


58,938


45,358


43,086


37,501


36,343


30


62


58,938


36,343


62







Common equity


48,564


51,499


56,184


57,632


58,136


(6)


(16)


48,564


58,136


(16)







Total stockholders' equity


53,410


56,345


61,029


63,544


64,624


(5)


(17)


53,410


64,624


(17)







 Balance Sheet (Average Balances) 



























Loans held for investment


$  286,110


$  275,342


$  267,159


$  253,101


$  246,463


4 %


16 %


$  280,756


$  245,207


14 %







Interest-earning assets


398,934


394,082


390,868


387,766


390,129


1


2


396,521


389,355


2







Total assets


435,327


430,372


427,845


424,506


424,099


1


3


432,806


422,959


2







Interest-bearing deposits


268,104


271,823


269,951


269,278


273,476


(1)


(2)


269,953


273,417


(1)







Total deposits


305,954


309,597


307,272


305,035


308,217


(1)


(1)


307,765


306,645








Borrowings


53,208


42,277


39,943


37,464


37,054


26


44


47,773


38,475


24







Common equity


49,319


54,591


56,946


58,230


56,885


(10)


(13)


51,940


56,333


(8)







Total stockholders' equity


54,165


59,437


62,498


64,682


62,376


(9)


(13)


56,786


61,504


(8)







 

 CAPITAL ONE FINANCIAL CORPORATION (COF) 

 Table 2: Selected Metrics—Consolidated 














 2022 Q2 vs 


 Six Months Ended June 30, 

 (Dollars in millions, except as noted) 


 2022 

 Q2 


 2022 

 Q1 


 2021 

 Q4 


 2021 

 Q3 


 2021 

 Q2 


 2022 

 Q1 


 2021 

 Q2 


2022


2021


 2022 vs 

 2021 

 Performance Metrics 





















Net interest income growth (period over period)


2 %


(1) %


5 %


7 %


(1) %


**


**


12 %


1 %


**

Non-interest income growth (period over period)


(3)


6



3


26


**


**


19


26


**

Total net revenue growth (period over period)


1


1


4


6


4


**


**


13


5


**

Total net revenue margin(5)


8.25


8.30


8.31


8.08


7.56


(5) bps


69 bps


8.27


7.44


83 bps

Net interest margin(6)


6.54


6.49


6.60


6.35


5.89


5


65


6.51


5.94


57

Return on average assets


1.87


2.23


2.27


2.92


3.34


(36)


(147)


2.05


3.25


(120)

Return on average tangible assets(7)


1.93


2.31


2.35


3.03


3.46


(38)


(153)


2.12


3.36


(124)

Return on average common equity(8)


15.81


16.98


16.13


20.52


24.24


(117)


(8) %


16.43


23.73


(7) %

Return on average tangible common equity(9)


22.63


23.36


21.82


27.50


32.75


(73)


(10)


23.03


32.19


(9)

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


6.41


6.61


7.00


6.62


6.44


(20)


(3) bps


6.51


6.29


22 bps

Efficiency ratio(10)


55.67


55.68


57.63


53.46


53.78


(1)


189


55.68


53.19


249

Operating efficiency ratio(11)


43.49


44.45


45.32


43.87


45.38


(96)


(189)


43.97


45.45


(148)

Effective income tax rate for continuing operations


20.8


18.4


20.7


22.1


22.6


240


(180)


19.5


21.7


(220)

Employees (period-end, in thousands)


53.6


51.5


50.8


50.8


52.0


4 %


3 %


53.6


52.0


3 %

 Credit Quality Metrics 





















Allowance for credit losses


$  11,491


$   11,308


$   11,430


$   11,573


$   12,346


2 %


(7) %


$  11,491


$   12,346


(7) %

Allowance coverage ratio


3.88 %


4.03 %


4.12 %


4.43 %


4.95 %


(15) bps


(107) bps


3.88 %


4.95 %


(107) bps

Net charge-offs


$       845


$        767


$        527


$        426


$       541


10 %


56 %


$    1,612


$     1,281


26 %

Net charge-off rate(12)


1.18 %


1.11 %


0.79 %


0.67 %


0.88 %


7 bps


30 bps


1.15 %


1.04 %


11 bps

30+ day performing delinquency rate


2.36


2.08


2.25


1.97


1.75


28


61


2.36


1.75


61

30+ day delinquency rate


2.54


2.21


2.41


2.13


1.89


33


65


2.54


1.89


65

 Capital Ratios(13) 





















Common equity Tier 1 capital


12.1 %


12.7 %


13.1 %


13.8 %


14.5 %


(60) bps


(240) bps


12.1 %


14.5 %


(240) bps

Tier 1 capital


13.5


14.1


14.5


15.7


16.6


(60)


(310)


13.5


16.6


(310)

Total capital


15.7


16.4


16.9


18.2


18.8


(70)


(310)


15.7


18.8


(310)

Tier 1 leverage


11.1


11.3


11.6


12.2


12.4


(20)


(130)


11.1


12.4


(130)

Tangible common equity ("TCE")(14)


7.9


8.7


9.9


10.4


10.6


(80)


(270)


7.9


10.6


(270)

 

 CAPITAL ONE FINANCIAL CORPORATION (COF) 

 Table 3: Consolidated Statements of Income 














 2022 Q2 vs 


 Six Months Ended June 30, 

 (Dollars in millions, except as noted) 


 2022 

 Q2 


 2022 

 Q1 


 2021 

 Q4 


 2021 

 Q3 


 2021 

 Q2 


 2022 

 Q1 


 2021 

 Q2 


2022


2021


 2022 vs 

 2021 

 Interest income: 





















Loans, including loans held for sale


$      6,605


$      6,367


$      6,451


$      6,205


$      5,753


4 %


15 %


$   12,972


$   11,607


12 %

Investment securities


435


402


368


317


370


8


18


837


761


10

Other


55


15


12


16


16


**


**


70


32


119

Total interest income


7,095


6,784


6,831


6,538


6,139


5


16


13,879


12,400


12

 Interest expense: 





















Deposits


293


218


222


228


237


34


24


511


506


1

Securitized debt obligations


65


29


30


29


28


124


132


94


60


57

Senior and subordinated notes


194


131


121


116


122


48


59


325


251


29

Other borrowings


26


9


8


9


9


189


189


35


18


94

Total interest expense


578


387


381


382


396


49


46


965


835


16

Net interest income


6,517


6,397


6,450


6,156


5,743


2


13


12,914


11,565


12

Provision (benefit) for credit losses


1,085


677


381


(342)


(1,160)


60


**


1,762


(1,983)


**

Net interest income after provision for credit losses


5,432


5,720


6,069


6,498


6,903


(5)


(21)


11,152


13,548


(18)

 Non-interest income: 





















Interchange fees, net


1,201


1,033


1,005


1,022


1,016


16


18


2,234


1,833


22

Service charges and other customer-related fees


415


400


435


407


384


4


8


815


736


11

Other


99


343


228


245


231


(71)


(57)


442


353


25

Total non-interest income


1,715


1,776


1,668


1,674


1,631


(3)


5


3,491


2,922


19

 Non-interest expense: 





















Salaries and associate benefits


1,946


2,026


1,941


1,852


1,781


(4)


9


3,972


3,628


9

Occupancy and equipment


481


513


527


481


523


(6)


(8)


994


995


Marketing


1,003


918


999


751


620


9


62


1,921


1,121


71

Professional services


458


397


449


358


341


15


34


855


633


35

Communications and data processing


339


339


326


319


315



8


678


617


10

Amortization of intangibles


14


14


13


5


5



180


28


11


155

Other


342


344


423


420


381


(1)


(10)


686


701


(2)

Total non-interest expense


4,583


4,551


4,678


4,186


3,966


1


16


9,134


7,706


19

Income from continuing operations before income taxes


2,564


2,945


3,059


3,986


4,568


(13)


(44)


5,509


8,764


(37)

Income tax provision


533


542


633


882


1,031


(2)


(48)


1,075


1,900


(43)

Income from continuing operations, net of tax


2,031


2,403


2,426


3,104


3,537


(15)


(43)


4,434


6,864


(35)

Loss from discontinued operations, net of tax




(1)



(1)



**



(3)


**

 Net income 


2,031


2,403


2,425


3,104


3,536


(15)


(43)


4,434


6,861


(35)

Dividends and undistributed earnings allocated to participating securities(2)


(25)


(28)


(21)


(26)


(30)


(11)


(17)


(53)


(58)


(9)

Preferred stock dividends


(57)


(57)


(74)


(79)


(60)



(5)


(114)


(121)


(6)

Issuance cost for redeemed preferred stock(3)




(34)


(12)







 Net income available to common stockholders 


$      1,949


$      2,318


$      2,296


$      2,987


$      3,446


(16)


(43)


$    4,267


$     6,682


(36)












































































 2022 Q2 vs 


 Six Months Ended June 30, 



 2022 

 Q2 


 2022 

 Q1 


 2021 

 Q4 


 2021 

 Q3 


 2021 

 Q2 


 2022 

 Q1 


 2021 

 Q2 


2022


2021


 2022 vs 

 2021 

 Basic earnings per common share:(2) 





















Net income from continuing operations


$        4.98


$        5.65


$        5.43


$        6.81


$        7.65


(12) %


(35) %