Capital One Reports First Quarter 2015 Net Income of $1.2 billion, or $2.00 per share

Press Release

Financial Supplement

Presentation

MCLEAN, Va., April 23, 2015 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2015 of $1.2 billion, or $2.00 per diluted common share, compared to the fourth quarter of 2014 with net income of $999 million, or $1.73 per diluted common share, and the first quarter of 2014 with net income of $1.2 billion, or $1.96 per diluted common share. 

"In the first quarter, we continued to post strong results across our businesses," said Richard D. Fairbank, Chair and Chief Executive Officer. "As always, we're focused on sustaining strong performance and shareholder value. We are pursuing growth and resilience, managing costs tightly while we invest to grow, and actively working to return capital to shareholders."

All comparisons below are for the first quarter of 2015 compared with the fourth quarter of 2014 unless otherwise noted.

First Quarter 2015 Income Summary:

  • Total net revenue decreased 3 percent to $5.6 billion.
  • Total non-interest expense decreased 7 percent to $3.0 billion:
    • 26 percent decrease in marketing.
    • 3 percent decrease in operating expense.
  • Pre-provision earnings increased 3 percent to $2.6 billion.
  • Provision for credit losses decreased 16 percent to $935 million.
  • Mortgage representation & warranty benefit of $19 million ($12 million net of tax) in discontinued operations.

First Quarter 2015 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.5 percent at March 31, 2015.
  • Net interest margin of 6.57 percent, down 24 basis points.
  • Period-end loans held for investment in the quarter decreased $4.3 billion, or 2 percent, to $204.0 billion.
    • Domestic Card period-end loans decreased $3.6 billion, or 5 percent, to $74.1 billion.
    • Consumer Banking period-end loans decreased $60 million, or less than 1 percent, to $71.4 billion:
      • Auto period-end loans increased $1.1 billion, or 3 percent, to $38.9 billion.
      • Home loans period-end loans decreased $1.1 billion, or 4 percent, to $28.9 billion, driven by run-off of acquired portfolios.
  • Commercial Banking period-end loans decreased $149 million, or less than 1 percent, to $50.7 billion.

 

  • Average loans held for investment in the quarter increased $1.8 billion, or less than 1 percent, to $205.2 billion.
    • Domestic Card average loans increased $744 million, or 1 percent, to $74.8 billion.
    • Consumer Banking average loans increased $187 million, or less than 1 percent, to $71.4 billion:
      • Auto average loans increased $1.3 billion, or 4 percent, to $38.4 billion.
      • Home loans average loans decreased by $1.1 billion, or 4 percent, to $29.5 billion, driven by run-off of acquired portfolios.
  • Commercial Banking average loans increased $731 million, or 1 percent, to $51.1 billion.

 

  • Period-end total deposits increased $4.9 billion, or  2 percent, to $210.4 billion, while average deposits increased $2.5 billion to $207.9 billion.
  • Interest-bearing deposit rate remained relatively flat at 0.59 percent.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on April 23, 2015 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). Choose "About Us", then 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 May 5, 2015 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release are 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, 2014.

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 $210.4 billion in deposits and $306.2 billion in total assets as of March 31, 2015. 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, New Jersey, Texas, Louisiana, Maryland, Virginia 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

First Quarter 2015(1) 

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 & 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

Business Segments Detail

Table 8:

Financial Summary—Business Segments

12

Table 9:

Financial & Statistical Summary—Credit Card Business

13

Table 10:

Financial & Statistical Summary—Consumer Banking Business

15

Table 11:

Financial & Statistical Summary—Commercial Banking Business

16

Table 12:

Financial & Statistical Summary—Other and Total

17

Table 13:

Notes to Loan and Business Segments Disclosures (Tables 7—12)

18

Other

Table 14:

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

19

__________

(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 March 31, 2015 once it is filed with the Securities and Exchange Commission.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated(1) 





































2015 Q1 vs.

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

2015

Q1

2014

Q4

2014

Q3

2014

Q2

2014

Q1

2014

Q4

2014

Q1





Earnings













Net interest income

$

4,576

$

4,656

$

4,497

$

4,315

$

4,350

(2)%

5%

Non-interest income(2)

1,071

1,157

1,142

1,153

1,020

(7)

5

Total net revenue(3)

$

5,647

$

5,813

$

5,639

$

5,468

$

5,370

(3)

5

Provision for credit losses

935

1,109

993

704

735

(16)

27

Non-interest expense:













Marketing

375

509

392

335

325

(26)

15

Amortization of intangibles

110

123

130

136

143

(11)

(23)

Acquisition-related(4)

7

10

13

18

23

(30)

(70)

Operating expenses

2,557

2,642

2,450

2,490

2,441

(3)

5

Total non-interest expense

3,049

3,284

2,985

2,979

2,932

(7)

4

Income from continuing operations before income taxes

1,663

1,420

1,661

1,785

1,703

17

(2)

Income tax provision

529

450

536

581

579

18

(9)

Income from continuing operations, net of tax

1,134

970

1,125

1,204

1,124

17

1

Income (loss) from discontinued operations, net of tax(2)

19

29

(44)

(10)

30

(34)

(37)

Net income

1,153

999

1,081

1,194

1,154

15

—

Dividends and undistributed earnings allocated to participating securities(5)

(6)

(4)

(5)

(4)

(5)

50

20

Preferred stock dividends(5)

(32)

(21)

(20)

(13)

(13)

52

146

Net income available to common stockholders

$

1,115

$

974

$

1,056

$

1,177

$

1,136

14

(2)

Common Share Statistics













Basic earnings per common share:(5)













Net income from continuing operations

$

2.00

$

1.71

$

1.97

$

2.09

$

1.94

17%

3%

Income (loss) from discontinued operations

0.03

0.05

(0.08)

(0.02)

0.05

(40)

(40)

Net income per basic common share

$

2.03

$

1.76

$

1.89

$

2.07

$

1.99

15

2

Diluted earnings per common share:(5)













Net income from continuing operations

$

1.97

$

1.68

$

1.94

$

2.06

$

1.91

17

3

Income (loss) from discontinued operations

0.03

0.05

(0.08)

(0.02)

0.05

(40)

(40)

Net income per diluted common share

$

2.00

$

1.73

$

1.86

$

2.04

$

1.96

16

2

Weighted-average common shares outstanding (in millions) for:













Basic common shares

550.2

554.3

559.9

567.5

571.0

(1)

(4)

Diluted common shares

557.2

561.8

567.9

577.6

580.3

(1)

(4)

Common shares outstanding (period end, in millions)

548.0

553.4

558.5

561.8

572.9

(1)

(4)

Dividends per common share

$

0.30

$

0.30

$

0.30

$

0.30

$

0.30

—

—

Tangible book value per common share (period end)(6)

52.19

50.32

48.72

47.90

45.88

4

14








































2015 Q1 vs.

(Dollars in millions) (unaudited)

2015

2014

2014

2014

2014

2014

2014

Q1

Q4

Q3

Q2

Q1

Q4

Q1

Balance Sheet (Period End)













Loans held for investment(7)

$

203,978

$

208,316

$

201,592

$

198,528

$

192,941

(2)%

6%

Interest-earning assets

275,837

277,849

270,001

266,720

259,422

(1)

6

Total assets

306,224

308,167

299,640

297,434

289,814

(1)

6

Interest-bearing deposits

185,208

180,467

178,876

180,970

184,214

3

1

Total deposits

210,440

205,548

204,264

205,890

208,324

2

1

Borrowings

41,029

48,457

42,243

39,114

30,118

(15)

36

Common equity

43,908

43,231

42,682

42,477

41,948

2

5

Total stockholders' equity

45,730

45,053

44,018

43,815

42,801

2

7

Balance Sheet (Average Balances)













Loans held for investment(7)

$

205,194

$

203,436

$

199,422

$

194,996

$

193,722

1%

6%

Interest-earning assets

278,427

273,436

268,890

263,570

262,659

2

6

Total assets

309,401

304,153

298,913

294,089

293,551

2

5

Interest-bearing deposits

182,998

179,401

179,928

182,053

184,183

2

(1)

Total deposits

207,851

205,355

205,199

206,315

205,842

1

1

Borrowings

46,082

43,479

40,314

35,658

35,978

6

28

Common equity

44,575

43,895

43,489

42,797

42,006

2

6

Total stockholders' equity

46,397

45,576

44,827

43,767

42,859

2

8

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated(1) 





































2015 Q1 vs.

(Dollars in millions) (unaudited)

2015

2014

2014

2014

2014

2014

2014

Q1

Q4

Q3

Q2

Q1

Q4

Q1

Performance Metrics













Net interest income growth (quarter over quarter)

(2)%

4%

4%

(1)%

(2)%

**

**

Non-interest income growth (quarter over quarter)

(7)

1

(1)

13

(9)

**

**

Total net revenue growth (quarter over quarter)

(3)

3

3

2

(3)

**

**

Total net revenue margin(8)

8.11

8.50

8.39

8.30

8.18

(39)

bps

(7)

bps

Net interest margin(9)

6.57

6.81

6.69

6.55

6.62

(24)

(5)

Return on average assets

1.47

1.28

1.51

1.64

1.53

19

(6)

Return on average tangible assets(10)

1.54

1.34

1.59

1.73

1.62

20

(8)

Return on average common equity(11)

9.84

8.61

10.12

11.09

10.53

123

(69)

Return on average tangible common equity(12)

15.00

13.28

15.73

17.47

16.83

172

(183)

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

5.94

6.46

5.99

6.11

6.05

(52)

(11)

Efficiency ratio(13)

53.99

56.49

52.93

54.48

54.60

(250)

(61)

Effective income tax rate for continuing operations


31.8

31.7

32.3

32.5

34.0

10

(220)

Employees (in thousands), period end(14)

47.0

46.0

44.9

44.6

44.9

2%

5%

Credit Quality Metrics(7)













Allowance for loan and lease losses

$

4,405

$

4,383

$

4,212

$

3,998

$

4,098

1%

7%

Allowance as a percentage of loans held for investment

2.16%

2.10%

2.09%

2.01%

2.12%

6

bps

4

bps

Allowance as a percentage of loans held for investment (excluding acquired loans)

2.41

2.36

2.37

2.30

2.45

5

(4)

Net charge-offs

$

881

$

915

$

756

$

812

$

931

(4)%

(5)%

Net charge-off rate(15)

1.72%

1.80%

1.52%

1.67%

1.92%

(8)

bps

(20)

bps

Net charge-off rate (excluding acquired loans)(15)

1.93

2.04

1.73

1.93

2.24

(11)

(31)

30+ day performing delinquency rate

2.32

2.62

2.46

2.24

2.22

(30)

10

30+ day performing delinquency rate (excluding acquired loans)

2.61

2.95

2.81

2.58

2.59

(34)

2

30+ day delinquency rate

2.58

2.91

2.76

2.53

2.51

(33)

7

30+ day delinquency rate (excluding acquired loans)

2.90

3.28

3.14

2.91

2.93

(38)

(3)

Capital Ratios(16)













Common equity Tier 1 capital ratio 

12.5%

12.5%

12.7%

12.7%

13.0%

—

bps

(50)

bps

Tier 1 risk-based capital ratio

13.2

13.2

13.3

13.3

13.4

—

(20)

Total risk-based capital ratio

15.1

15.1

15.2

15.4

15.4

—

(30)

Tier 1 leverage ratio

10.7

10.8

10.6

10.7

10.4

(10)

30

Tangible common equity ("TCE") ratio(17)

9.8

9.5

9.6

9.5

9.6

30

20

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income



















Three Months Ended

2015 Q1 vs.

2015

2014

2014

2014

2014

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

Q1

Q4

Q1

Q4

Q1

Interest income:









Loans, including loans held for sale

$

4,540

$

4,613

$

4,307

(2)%

5%

Investment securities

406

405

416

—

(2)

Other

28

27

30

4

(7)

Total interest income

4,974

5,045

4,753

(1)

5

Interest expense:









Deposits

271

269

276

1

(2)

Securitized debt obligations

33

36

38

(8)

(13)

Senior and subordinated notes

79

73

77

8

3

Other borrowings

15

11

12

36

25

Total interest expense

398

389

403

2

(1)

Net interest income

4,576

4,656

4,350

(2)

5

Provision for credit losses

935

1,109

735

(16)

27

Net interest income after provision for credit losses

3,641

3,547

3,615

3

1

Non-interest income:(2)









Service charges and other customer-related fees

437

462

474

(5)

(8)

Interchange fees, net

496

523

440

(5)

13

Net other-than-temporary impairment recognized in earnings

(15)

(9)

(5)

67

200

Other

153

181

111

(15)

38

Total non-interest income

1,071

1,157

1,020

(7)

5

Non-interest expense:









Salaries and associate benefits

1,211

1,179

1,161

3

4

Occupancy and equipment

435

474

405

(8)

7

Marketing

375

509

325

(26)

15

Professional services

296

329

287

(10)

3

Communications and data processing

202

203

196

—

3

Amortization of intangibles

110

123

143

(11)

(23)

Other

420

467

415

(10)

1

Total non-interest expense

3,049

3,284

2,932

(7)

4

Income from continuing operations before income taxes

1,663

1,420

1,703

17

(2)

Income tax provision

529

450

579

18

(9)

Income from continuing operations, net of tax

1,134

970

1,124

17

1

Income from discontinued operations, net of tax(2)

19

29

30

(34)

(37)

Net income

1,153

999

1,154

15

—

Dividends and undistributed earnings allocated to participating securities(5)

(6)

(4)

(5)

50

20

Preferred stock dividends(5)

(32)

(21)

(13)

52

146

Net income available to common stockholders

$

1,115

$

974

$

1,136

14

(2)

































Three Months Ended

2015 Q1 vs.

2015

2014

2014

2014

2014

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

Q1

Q4

Q1

Q4

Q1

Basic earnings per common share:(5)









Net income from continuing operations

$

2.00

$

1.71

$

1.94

17%

3%

Income from discontinued operations

0.03

0.05

0.05

(40)

(40)

Net income per basic common share

$

2.03

$

1.76

$

1.99

15

2

Diluted earnings per common share:(5)









Net income from continuing operations

$

1.97

$

1.68

$

1.91

17

3

Income from discontinued operations

0.03

0.05

0.05

(40)

(40)

Net income per diluted common share

$

2.00

$

1.73

$

1.96

16

2

Weighted average common shares outstanding (in millions):









Basic common shares

550.2

554.3

571.0

(1)

(4)

Diluted common shares

557.2

561.8

580.3

(1)

(4)

Dividends paid per common share

$

0.30

$

0.30

$

0.30

—

—

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets(1) 

























March 31, 2015 vs.

(Dollars in millions) (unaudited)

March 31,
2015

December 31,
2014

March 31,
2014

December 31,
2014

March 31,
2014

Assets:









Cash and cash equivalents:









Cash and due from banks

$

2,853

$

3,147

$

3,373

(9)%

(15)%

Interest-bearing deposits with banks

6,038

4,095

2,641

47

129

Federal funds sold and securities purchased under agreements to resell

0

0

168

—

**

Total cash and cash equivalents

8,891

7,242

6,182

23

44

Restricted cash for securitization investors

234

234

550

—

(57)

Securities available for sale, at fair value

39,321

39,508

40,721

—

(3)

Securities held to maturity, at carrying value

23,241

22,500

20,150

3

15

Loans held for investment:(7)









Unsecuritized loans held for investment

170,040

171,771

156,072

(1)

9

Restricted loans for securitization investors

33,938

36,545

36,869

(7)

(8)

Total loans held for investment

203,978

208,316

192,941

(2)

6

Allowance for loan and lease losses

(4,405)

(4,383)

(4,098)

1

7

Net loans held for investment

199,573

203,933

188,843

(2)

6

Loans held for sale, at lower of cost or fair value

1,331

626

259

113

414

Premises and equipment, net

3,684

3,685

3,807

—

(3)

Interest receivable

1,078

1,079

1,045

—

3

Goodwill

13,978

13,978

13,974

—

—

Other assets

14,893

15,382

14,283

(3)

4

Total assets

$

306,224

$

308,167

$

289,814

(1)

6







































March 31, 2015 vs.

(Dollars in millions) (unaudited)

March 31,
2015

December 31,
2014

March 31,
2014

December 31,
2014

March 31,
2014

Liabilities:









Interest payable

$

195

$

254

$

182

(23)%

7%

Deposits:









Non-interest bearing deposits

25,232

25,081

24,110

1

5

Interest-bearing deposits

185,208

180,467

184,214

3

1

Total deposits

210,440

205,548

208,324

2

1

Securitized debt obligations

12,717

11,624

9,783

9

30

Other debt:









Federal funds purchased and securities loaned or sold under agreements to repurchase

933

880

1,544

6

(40)

Senior and subordinated notes

20,559

18,684

14,891

10

38

Other borrowings

6,820

17,269

3,900

(61)

75

Total other debt

28,312

36,833

20,335

(23)

39

Other liabilities

8,830

8,855

8,389

—

5

Total liabilities

260,494

263,114

247,013

(1)

5











Stockholders' equity:









Preferred stock

0

0

0

—

—

Common stock

6

6

6

—

—

Additional paid-in capital, net

27,939

27,869

26,605

—

5

Retained earnings

24,925

23,973

21,259

4

17

Accumulated other comprehensive income ("AOCI")

(212)

(430)

(710)

(51)

(70)

Treasury stock, at cost

(6,928)

(6,365)

(4,359)

9

59

Total stockholders' equity

45,730

45,053

42,801

2

7

Total liabilities and stockholders' equity

$

306,224

$

308,167

$

289,814

(1)

6

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 — 4)

**

Not meaningful.

(1)

As of January 1, 2015, we changed our accounting principle for presenting qualifying derivative assets and liabilities, as well as the related fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable), from a gross basis of presentation to a net basis. Prior period results and related metrics have been recast to conform to this presentation. Prior period regulatory ratios have not been recast.

(2)

We recorded the following related to the mortgage representation and warranty reserve:
























2015

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Provision (benefit) for mortgage representation and warranty losses before income taxes:









Recorded in continuing operations

$

1

$

(11)

$

—

$

(29)

$

14

Recorded in discontinued operations

(19)

(41)

70

11

(47)

Total (benefit) provision for mortgage representation and warranty losses before income taxes

$

(18)

$

(52)

$

70

$

(18)

$

(33)


Historically, the majority of the provision for representation and warranty losses is included net of tax in discontinued operations, with the remaining amount included before income taxes in non-interest income. The mortgage representation and warranty reserve was $673 million as of March 31, 2015, $731 million as of December 31, 2014 and $1.1 billion as of March 31, 2014.

(3)

Total net revenue was reduced by $147 million in Q1 2015, $165 million in Q4 2014, $164 million in Q3 2014, $153 million in Q2 2014 and $163 million in Q1 2014 for the estimated uncollectible amount of billed finance charges and fees.

(4)

Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense.

(5)

Dividends and undistributed earnings allocated to participating securities, earnings per share, and preferred stock dividends are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.

(6)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on tangible common equity.

(7)

Loans held for investment includes acquired loans. We use the term "acquired loans" to refer to a certain portion of the loans acquired in the following transactions: (i) the February 2012 transaction where we acquired the assets and assumed the liabilities of substantially all of ING Direct; (ii) the February 2009 Chevy Chase Bank acquisition; and (iii) May 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States. These loans were recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3", or Accounting Standard Codification 310-30). The table below presents amounts related to acquired loans accounted for under SOP 03-3:
























2015

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Acquired loans accounted for under SOP 03-3:









Period-end unpaid principal balance

$

23,248

$

24,473

$

25,726

$

27,117

$

28,549

Period-end loans held for investment

22,334

23,500

24,685

26,019

27,390

Average loans held for investment

22,773

23,907

25,104

26,491

27,760




(8)

Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.

(9)

Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

(10)

Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. Return on average tangible assets is a non-GAAP measure and See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

(11)

Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly titled measures reported by other companies.

(12)

Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Return on average tangible common equity is a non-GAAP measure and our calculation may not be comparable to similarly titled measures reported by other companies. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

(13)

Calculated based on total non-interest expense for the period divided by total net revenue for the period.

(14)

Effective Q2 2014, we changed our presentation from total full-time equivalent employees to total employees. All prior periods have been recast to conform to the current presentation. 

(15)

Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

(16)

Ratios as of the end of Q1 2015 are preliminary and therefore subject to change. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.

(17)

TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 6: Average Balances, Net Interest Income and Net Interest Margin


































2015 Q1

2014 Q4

2014 Q1

Average Balance

Interest
Income/Expense(1)

Yield/Rate(1)

Average Balance

Interest
Income/Expense(1)

Yield/Rate(1)

Average Balance

Interest
Income/Expense(1)

Yield/Rate(1)

(Dollars in millions) (unaudited)








Interest-earning assets:

















Loans, including loans held for sale

$

205,854

$

4,540

8.82%

$

204,137

$

4,613

9.04%

$

194,020

$

4,307

8.88%

Investment securities

63,181

406

2.57

62,952

405

2.57

62,124

416

2.68

Cash equivalents and other

9,392

28

1.19

6,347

27

1.70

6,515

30

1.84

Total interest-earning assets

$

278,427

$

4,974

7.15

$

273,436

$

5,045

7.38

$

262,659

$

4,753

7.24



















Interest-bearing liabilities:

















Interest-bearing deposits

$

182,998

$

271

0.59

$

179,401

$

269

0.60

$

184,183

$

276

0.60

Securitized debt obligations

11,563

33

1.14

11,479

36

1.25

10,418

38

1.46

Senior and subordinated notes

20,595

79

1.53

18,680

73

1.56

14,162

77

2.17

Other borrowings and liabilities

14,721

15

0.41

14,058

11

0.31

11,398

12

0.42

Total interest-bearing liabilities

$

229,877

$

398

0.69

$

223,618

$

389

0.70

$

220,161

$

403

0.73

Net interest income/spread


$

4,576

6.46



$

4,656

6.68



$

4,350

6.51

Impact of non-interest bearing funding




0.11





0.13





0.11

Net interest margin




6.57%





6.81%





6.62%

__________

(1)

Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics(1) 





































2015 Q1 vs.

(Dollars in millions) (unaudited)

2015
Q1

2014
Q4

2014
Q3

2014
Q2

2014
Q1

2014
Q4

2014
Q1

Period-end Loans Held For Investment













Credit card:













   Domestic credit card

$

74,131

$

77,704

$

73,143

$

71,165

$

68,275

(5)%

9%

   International credit card

7,623

8,172

7,488

7,853

7,575

(7)

1

Total credit card

81,754

85,876

80,631

79,018

75,850

(5)

8

Consumer banking:













   Auto

38,937

37,824

36,254

34,792

33,080

3

18

   Home loan

28,905

30,035

31,203

32,644

34,035

(4)

(15)

   Retail banking

3,537

3,580

3,604

3,626

3,612

(1)

(2)

Total consumer banking

71,379

71,439

71,061

71,062

70,727

—

1

Commercial banking:













   Commercial and multifamily real estate

22,831

23,137

22,895

22,040

21,256

(1)

7

   Commercial and industrial

27,172

26,972

26,071

25,402

24,064

1

13

Total commercial lending

50,003

50,109

48,966

47,442

45,320

—

10

   Small-ticket commercial real estate

738

781

822

879

910

(6)

(19)

Total commercial banking(2)

50,741

50,890

49,788

48,321

46,230

—

10

Other loans

104

111

112

127

134

(6)

(22)

Total loans held for investment(2)

$

203,978

$

208,316

$

201,592

$

198,528

$

192,941

(2)

6

Average Loans Held For Investment













Credit card:













   Domestic credit card

$

74,770

$

74,026

$

71,784

$

69,376

$

69,810

1%

7%

   International credit card

7,811

7,714

7,710

7,621

7,692

1

2

Total credit card

82,581

81,740

79,494

76,997

77,502

1

7

Consumer banking:













   Auto

38,387

37,072

35,584

33,972

32,387

4

19

   Home loan

29,493

30,604

31,859

33,299

34,646

(4)

(15)

   Retail banking

3,561

3,578

3,605

3,613

3,630

—

(2)

Total consumer banking

71,441

71,254

71,048

70,884

70,663

—

1

Commercial banking:













   Commercial and multifamily real estate

23,120

23,129

22,409

21,484

20,962

—

10

   Commercial and industrial

27,190

26,409

25,512

24,611

23,541

3

16

Total commercial lending

50,310

49,538

47,921

46,095

44,503

2

13

   Small-ticket commercial real estate

760

801

845

896

932

(5)

(18)

Total commercial banking

51,070

50,339

48,766

46,991

45,435

1

12

Other loans

102

103

114

124

122

(1)

(16)

Total average loans held for investment

$

205,194

$

203,436

$

199,422

$

194,996

$

193,722

1

6

Net Charge-off Rates













Credit card:













   Domestic credit card

3.55%

3.39%

2.83%

3.52%

4.01%

16

bps

(46)

bps

   International credit card

2.80

3.34

3.32

3.93

4.17

(54)

(137)

Total credit card

3.48

3.38

2.88

3.56

4.02

10

(54)

 

 
































2015 Q1 vs.

(Dollars in millions) (unaudited)

2015

Q1

2014

Q4

2014

Q3

2014

Q2

2014

Q1

2014

Q4

2014

Q1

Consumer banking:













   Auto

1.55%

2.14%

1.98%

1.31%

1.66%

(59)

bps

(11)

bps

   Home loan

0.03

0.07

0.02

0.05

0.06

(4)

(3)

   Retail banking

0.96

1.28

1.36

0.70

0.95

(32)

1

Total consumer banking

0.89

1.20

1.07

0.69

0.84

(31)

5

Commercial banking:













   Commercial and multifamily real estate

(0.03)

0.01

(0.10)

—

0.01

(4)

(4)

   Commercial and industrial

0.05

0.10

(0.01)

0.04

0.03

(5)

2

Total commercial lending

0.01

0.06

(0.05)

0.02

0.02

(5)

(1)

   Small-ticket commercial real estate

0.47

0.80

(0.01)

0.61

0.67

(33)

(20)

Total commercial banking

0.02

0.07

(0.05)

0.03

0.04

(5)

(2)

Other loans

1.56

0.47

(0.61)

2.18

(0.68)

109

224

Total net charge-offs

1.72

1.80

1.52

1.67

1.92

(8)

(20)

30+ Day Performing Delinquency Rates













Credit card:













   Domestic credit card

2.92%

3.27%

3.21%

2.83%

3.02%

(35)

bps

(10)

bps

   International credit card

2.81

2.94

3.34

3.40

3.59

(13)

(78)

Total credit card

2.91

3.24

3.22

2.89

3.08

(33)

(17)

Consumer banking:













   Auto

5.21

6.57

6.14

5.77

5.29

(136)

(8)

   Home loan

0.18

0.21

0.14

0.13

0.12

(3)

6

   Retail banking

0.60

0.64

0.53

0.48

0.74

(4)

(14)

Total consumer banking

2.95

3.60

3.22

2.91

2.57

(65)

38

Nonperforming Loans and Nonperforming Assets Rates(3)(4)













Credit card:













   International credit card

0.84%

0.86%

0.98%

1.03%

1.07%

(2)

bps

(23)

bps

Total credit card

0.08

0.08

0.09

0.10

0.11

—

(3)

Consumer banking:













   Auto

0.31

0.52

0.49

0.43

0.34

(21)

(3)

   Home loan

1.16

1.10

1.04

1.07

1.09

6

7

   Retail banking

0.71

0.61

0.54

0.79

1.15

10

(44)

Total consumer banking

0.67

0.77

0.73

0.75

0.74

(10)

(7)

Commercial banking:













   Commercial and multifamily real estate

0.18

0.27

0.26

0.29

0.27

(9)

(9)

   Commercial and industrial

0.39

0.39

0.37

0.41

0.36

—

3

Total commercial lending

0.29

0.33

0.32

0.36

0.32

(4)

(3)

   Small-ticket commercial real estate

1.62

0.96

0.42

1.40

0.73

66

89

Total commercial banking

0.31

0.34

0.32

0.38

0.33

(3)

(2)

Other loans

13.33

13.37

14.66

12.74

12.47

(4)

86

Total nonperforming loans

0.35

0.39

0.38

0.41

0.40

(4)

(5)

Total nonperforming assets

0.50

0.54

0.53

0.55

0.54

(4)

(4)

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Financial Summary—Business Segments(1) 





















Three Months Ended March 31, 2015

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Earnings:









Net interest income

$

4,576

$

2,666

$

1,434

$

461

$

15

Non-interest income

1,071

816

158

114

(17)

Total net revenue(5)

5,647

3,482

1,592

575

(2)

Provision for credit losses

935

669

206

60

—

Non-interest expense

3,049

1,776

970

272

31

Income (loss) from continuing operations before income taxes

1,663

1,037

416

243

(33)

Income tax provision (benefit)

529

369

150

88

(78)

Income from continuing operations, net of tax

$

1,134

$

668

$

266

$

155

$

45













Three Months Ended December 31, 2014

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Earnings:









Net interest income

$

4,656

$

2,697

$

1,459

$

455

$

45

Non-interest income

1,157

841

185

132

(1)

Total net revenue(5)

5,813

3,538

1,644

587

44

Provision (benefit) for credit losses

1,109

856

222

32

(1)

Non-interest expense

3,284

1,888

1,045

293

58

Income (loss) from continuing operations before income taxes

1,420

794

377

262

(13)

Income tax provision (benefit)

450

275

135

93

(53)

Income from continuing operations, net of tax

$

970

$

519

$

242

$

169

$

40













Three Months Ended March 31, 2014

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Earnings:









Net interest income (expense)

$

4,350

$

2,525

$

1,433

$

421

$

(29)

Non-interest income

1,020

785

150

87

(2)

Total net revenue (loss)(5)

5,370

3,310

1,583

508

(31)

Provision (benefit) for credit losses

735

558

140

40

(3)

Non-interest expense

2,932

1,726

930

255

21

Income (loss) from continuing operations before income taxes

1,703

1,026

513

213

(49)

Income tax provision (benefit)

579

358

183

76

(38)

Income (loss) from continuing operations, net of tax

$

1,124

$

668

$

330

$

137

$

(11)

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial & Statistical Summary—Credit Card Business(1) 





































2015 Q1 vs.

2015

2014

2014

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Q4

Q1

Credit Card













Earnings:













Net interest income

$

2,666

$

2,697

$

2,627

$

2,461

$

2,525

(1)%

6%

Non-interest income

816

841

846

839

785

(3)

4

Total net revenue

3,482

3,538

3,473

3,300

3,310

(2)

5

Provision for credit losses

669

856

787

549

558

(22)

20

Non-interest expense

1,776

1,888

1,730

1,719

1,726

(6)

3

Income from continuing operations before income taxes

1,037

794

956

1,032

1,026

31

1

Income tax provision


369

275

332

364

358

34

3

Income from continuing operations, net of tax

$

668

$

519

$

624

$

668

$

668

29

—

Selected performance metrics:













Period-end loans held for investment

$

81,754

$

85,876

$

80,631

$

79,018

$

75,850

(5)%

8%

Average loans held for investment

82,581

81,740

79,494

76,997

77,502

1

7

Average yield on loans held for investment(6)

14.30%

14.61%

14.65%

14.22%

14.43%

(31)

bps

(13)

bps

Total net revenue margin

16.87

17.31

17.48

17.14

17.08

(44)

(21)

Net charge-off rate

3.48

3.38

2.88

3.56

4.02

10

(54)

30+ day performing delinquency rate

2.91

3.24

3.22

2.89

3.08

(33)

(17)

30+ day delinquency rate

2.97

3.30

3.29

2.97

3.16

(33)

(19)

Nonperforming loan rate(3)

0.08

0.08

0.09

0.10

0.11

—

(3)

Card loan premium amortization and other intangible accretion(7)

$

11

$

11

$

18

$

31

$

37

—%

(70)%

PCCR intangible amortization

84

87

90

94

98

(3)

(14)

Purchase volume(8)

57,383

63,484

57,474

56,358

47,434

(10)

21

Domestic Card













Earnings:













Net interest income

$

2,421

$

2,432

$

2,361

$

2,193

$

2,255

—%

7%

Non-interest income

743

768

763

768

702

(3)

6

Total net revenue

3,164

3,200

3,124

2,961

2,957

(1)

7

Provision for credit losses

610

765

738

504

486

(20)

26

Non-interest expense

1,580

1,676

1,530

1,513

1,545

(6)

2

Income from continuing operations before income taxes

974

759

856

944

926

28

5

Income tax provision


353

272

306

337

331

30

7

Income from continuing operations, net of tax

$

621

$

487

$

550

$

607

$

595

28

4























































2015 Q1 vs.

2015

2014

2014

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Q4

Q1

Selected performance metrics:













Period-end loans held for investment

$

74,131

$

77,704

$

73,143

$

71,165

$

68,275

(5)%

9%

Average loans held for investment

74,770

74,026

71,784

69,376

69,810

1

7

Average yield on loans held for investment(6)

14.23%

14.43%

14.46%

13.95%

14.19%

(20)

bps

4

 bps

Total net revenue margin

16.93

17.29

17.41

17.07

16.94

(36)

(1)

Net charge-off rate

3.55

3.39

2.83

3.52

4.01

16

(46)

30+ day performing delinquency rate

2.92

3.27

3.21

2.83

3.02

(35)

(10)

30+ day delinquency rate

2.92

3.27

3.21

2.83

3.02

(35)

(10)

Purchase volume(8)

$

52,025

$

58,234

$

53,690

$

52,653

$

44,139

(11)%

18%

International Card













Earnings:













Net interest income

$

245

$

265

$

266

$

268

$

270

(8)%

(9)%

Non-interest income

73

73

83

71

83

—

(12)

Total net revenue

318

338

349

339

353

(6)

(10)

Provision for credit losses

59

91

49

45

72

(35)

(18)

Non-interest expense

196

212

200

206

181

(8)

8

Income from continuing operations before income taxes

63

35

100

88

100

80

(37)

Income tax provision


16

3

26

27

27

**

(41)

Income from continuing operations, net of tax

$

47

$

32

$

74

$

61

$

73

47

(36)

Selected performance metrics:













Period-end loans held for investment

$

7,623

$

8,172

$

7,488

$

7,853

$

7,575

(7)%

1%

Average loans held for investment

7,811

7,714

7,710

7,621

7,692

1

2

Average yield on loans held for investment(6)

14.93%

16.31%

16.42%

16.74%

16.64%

(138)

bps

(171)

bps

Total net revenue margin

16.31

17.55

18.13

17.76

18.38

(124)

(207)

Net charge-off rate

2.80

3.34

3.32

3.93

4.17

(54)

(137)

30+ day performing delinquency rate

2.81

2.94

3.34

3.40

3.59

(13)

(78)

30+ day delinquency rate

3.44

3.60

4.08

4.20

4.41

(16)

(97)

Nonperforming loan rate(3)

0.84

0.86

0.98

1.03

1.07

(2)

(23)

Purchase volume(8)

$

5,358

$

5,250

$

3,784

$

3,705

$

3,295

2%

63%

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Consumer Banking Business(1) 





































2015 Q1 vs.

2015

2014

2014

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Q4

Q1

Consumer Banking













Earnings:













Net interest income

$

1,434

$

1,459

$

1,425

$

1,431

$

1,433

(2)%

—%

Non-interest income

158

185

179

170

150

(15)

5

Total net revenue

1,592

1,644

1,604

1,601

1,583

(3)

1

Provision for credit losses

206

222

198

143

140

(7)

47

Non-interest expense

970

1,045

956

938

930

(7)

4

Income from continuing operations before income taxes

416

377

450

520

513

10

(19)

Income tax provision

150

135

161

186

183

11

(18)

Income from continuing operations, net of tax

$

266

$

242

$

289

$

334

$

330

10

(19)

Selected performance metrics:













Period-end loans held for investment

$

71,379

$

71,439

$

71,061

$

71,062

$

70,727

—%

1%

Average loans held for investment

71,441

71,254

71,048

70,884

70,663

—

1

Average yield on loans held for investment(6)

6.26%

6.45%

6.18%

6.22%

6.18%

(19)

bps

8

bps

Auto loan originations

$

5,185

$

5,390

$

5,410

$

5,376

$

4,727

(4)%

10%

Period-end deposits

172,502

168,078

167,624

169,153

171,529

3

1

Average deposits

169,593

167,727

168,407

169,694

168,676

1

1

Average deposit interest rate

0.57%

0.57%

0.58%

0.57%

0.57%

—

bps

—

bps

Core deposit intangible amortization

$

22

$

24

$

26

$

28

$

30

(8)%

(27)%

Net charge-off rate

0.89%

1.20%

1.07%

0.69%

0.84%

(31)

bps

5

bps

30+ day performing delinquency rate

2.95

3.60

3.22

2.91

2.57

(65)

38

30+ day delinquency rate

3.46

4.23

3.82

3.49

3.14

(77)

32

Nonperforming loan rate(3)

0.67

0.77

0.73

0.75

0.74

(10)

(7)

Nonperforming asset rate(4)

0.95

1.06

1.01

1.01

1.00

(11)

(5)

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Commercial Banking Business(1) 





































2015 Q1 vs.

2015

2014

2014

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Q4

Q1

Commercial Banking













Earnings:













Net interest income

$

461

$

455

$

439

$

436

$

421

1%

10%

Non-interest income

114

132

122

109

87

(14)

31

Total net revenue(5)

575

587

561

545

508

(2)

13

Provision for credit losses

60

32

9

12

40

88

50

Non-interest expense

272

293

268

267

255

(7)

7

Income from continuing operations before income taxes

243

262

284

266

213

(7)

14

Income tax provision

88

93

102

95

76

(5)

16

Income from continuing operations, net of tax

$

155

$

169

$

182

$

171

$

137

(8)

13

Selected performance metrics:













Period-end loans held for investment(2)

$

50,741

$

50,890

$

49,788

$

48,321

$

46,230

—%

10%

Average loans held for investment

51,070

50,339

48,766

46,991

45,435

1

12

Average yield on loans held for investment(5)(6)

3.22%

3.33%

3.39%

3.50%

3.47%

(11)

bps

(25)

bps

Period-end deposits

$

32,575

$

31,954

$

31,918

$

31,440

$

31,485

2%

3%

Average deposits

32,845

32,363

31,772

31,238

31,627

1

4

Average deposit interest rate

0.24%

0.24%

0.24%

0.24%

0.25%

—

bps

(1)

bps

Core deposit intangible amortization

$

4

$

5

$

5

$

5

$

6

(20)%

(33)%

Net charge-off (recovery) rate

0.02%

0.07%

(0.05)%

0.03%

0.04%

(5)

bps

(2)

bps

Nonperforming loan rate(3)

0.31

0.34

0.32

0.38

0.33

(3)

(2)

Nonperforming asset rate(4)

0.31

0.36

0.35

0.41

0.36

(5)

(5)

Risk category:(9)













Noncriticized

$

48,938

$

49,284

$

48,408

$

46,881

$

45,103

(1)%

9%

Criticized performing

1,645

1,431

1,219

1,259

977

15

68

Criticized nonperforming

158

175

161

181

150

(10)

5

Total commercial loans

$

50,741

$

50,890

$

49,788

$

48,321

$

46,230

—

10

Risk category as a percentage of period-end commercial loans held for investment:













Noncriticized

96.5%

96.9%

97.3%

97.0%

97.5%

(40)

bps

(100)

bps

Criticized performing

3.2

2.8

2.4

2.6

2.2

40

100

Criticized nonperforming

0.3

0.3

0.3

0.4

0.3

—

—

Total commercial loans

100.0%

100.0%

100.0%

100.0%

100.0%

—

—

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Other and Total(1) 





































2015 Q1 vs.

2015

2014

2014

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Q4

Q1

Other













Earnings:













Net interest income (expense)

$

15

$

45

$

6

$

(13)

$

(29)

(67)%

**

Non-interest income

(17)

(1)

(5)

35

(2)

**

**

Total net (loss) revenue(5)

$

(2)

44

1

22

(31)

**

(94)%

Benefit for credit losses

—

(1)

(1)

—

(3)

**

**

Non-interest expense

31

58

31

55

21

(47)

48

Loss from continuing operations before income taxes

(33)

(13)

(29)

(33)

(49)

154

(33)

Income tax benefit

(78)

(53)

(59)

(64)

(38)

47

105

Income (loss) from continuing operations, net of tax

$

45

$

40

$

30

$

31

$

(11)

13

**

Selected performance metrics:













Period-end loans held for investment

$

104

$

111

$

112

$

127

$

134

(6)%

(22)%

Average loans held for investment

102

103

114

124

122

(1)

(16)

Period-end deposits

5,363

5,516

4,722

5,297

5,310

(3)

1

Average deposits

5,413

5,265

5,020

5,383

5,539

3

(2)

Total













Earnings:













Net interest income

$

4,576

$

4,656

$

4,497

$

4,315

$

4,350

(2)%

5%

Non-interest income

1,071

1,157

1,142

1,153

1,020

(7)

5

Total net revenue

5,647

5,813

5,639

5,468

5,370

(3)

5

Provision for credit losses

935

1,109

993

704

735

(16)

27

Non-interest expense

3,049

3,284

2,985

2,979

2,932

(7)

4

Income from continuing operations before income taxes

1,663

1,420

1,661

1,785

1,703

17

(2)

Income tax provision

529

450

536

581

579

18

(9)

Income from continuing operations, net of tax

$

1,134

$

970

$

1,125

$

1,204

$

1,124

17

1

Selected performance metrics:













Period-end loans held for investment(2)

$

203,978

$

208,316

$

201,592

$

198,528

$

192,941

(2)%

6%

Average loans held for investment

205,194

203,436

199,422

194,996

193,722

1

6

Period-end deposits

210,440

205,548

204,264

205,890

208,324

2

1

Average deposits

207,851

205,355

205,199

206,315

205,842

1

1

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Notes to Loan and Business Segments Disclosures (Tables 7—12)

**

Not meaningful.

(1)

Certain prior period amounts have been recast to conform to the current period presentation.

(2)

Includes $3.6 billion and $3.7 billion of loans to the oil and gas industry as of March 31, 2015 and December 31, 2014, respectively, representing approximately 1.8% of total loans held for investment for both periods.

(3)

The nonperforming loan ratios are calculated based on nonperforming loans for each category divided by period-end total loans held for investments.

(4)

Nonperforming assets consist of nonperforming loans, real estate owned ("REO") and other foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each category divided by the combined period-end total of loans held for investment, REO and other foreclosed assets for each respective category. Calculation of nonperforming assets ratios for Consumer and Commercial Banking business are adjusted to exclude the impact of acquired loans.

(5)

Some of our tax-related commercial investments generate tax-exempt income or tax credits. Accordingly, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35% with offsetting reclassifications within Other category.

(6)

Calculated by dividing annualized interest income for the period by average loans held for investment during the period for the specified loan category. Annualized interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment.

(7)

Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the May 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States.

(8)

Includes credit card purchase transactions, net of returns for both loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.



(9)

Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures(1) 





















Basel III Standardized

(Dollars in millions) (unaudited)

March 31,
2015

December 31,
2014

September 30,
2014

June 30,
2014

March 31,
2014

Regulatory Capital Metrics









Common equity Tier 1 capital

$

29,671

$

29,534

$

29,116

$

28,774

$

28,434

Tier 1 capital

31,493

31,355

30,451

30,111

29,257

Total risk-based capital(2)

35,880

35,879

34,860

34,743

33,784

Risk-weighted assets(3)

238,197

236,944

228,759

226,172

219,047

Average assets for the leverage ratio

295,556

291,243

286,070

281,345

280,907

Capital Ratios









Common equity Tier 1 capital ratio(5)

12.5%

12.5%

12.7%

12.7%

13.0%

Tier 1 risk-based capital ratio(6)

13.2

13.2

13.3

13.3

13.4

Total risk-based capital ratio(7)

15.1

15.1

15.2

15.4

15.4

Tier 1 leverage ratio(8)

10.7

10.8

10.6

10.7

10.4

Tangible common equity ("TCE") ratio(9)

9.8

9.5

9.6

9.5

9.6

 

 

Reconciliation of Non-GAAP Measures


We report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and tangible assets. The tables below provide the details of the calculation of our non-GAAP capital measures and regulatory capital. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.





















2015

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Tangible Common Equity (Average)









Average stockholders' equity

$

46,397

$

45,576

$

44,827

$

43,767

$

42,859

Average goodwill and intangible assets(10)

(15,339)

(15,437)

(15,525)

(15,615)

(15,727)

Noncumulative perpetual preferred stock(11)

(1,822)

(1,681)

(1,338)

(970)

(853)

Average tangible common equity

$

29,236

$

28,458

$

27,964

$

27,182

$

26,279

Tangible Common Equity (Period End)









Stockholders' equity

$

45,730

$

45,053

$

44,018

$

43,815

$

42,801

Goodwill and intangible assets(10)

(15,307)

(15,383)

(15,472)

(15,564)

(15,666)

Noncumulative perpetual preferred stock(11)

(1,822)

(1,822)

(1,336)

(1,338)

(853)

Tangible common equity

$

28,601

$

27,848

$

27,210

$

26,913

$

26,282











 

 





















2015

2014

2014

2014

2014

(Dollars in millions) (unaudited)

Q1

Q4

Q3

Q2

Q1

Tangible Assets (Average)









Average total assets(4)

$

309,401

$

304,153

$

298,913

$

294,089

$

293,551

Average goodwill and intangible assets(10)

(15,339)

(15,437)

(15,525)

(15,615)

(15,727)

Average tangible assets(4)

$

294,062

$

288,716

$

283,388

$

278,474

$

277,824

Tangible Assets (Period End)









Total assets(4)

$

306,224

$

308,167

$

299,640

$

297,434

$

289,814

Goodwill and intangible assets(10)

(15,307)

(15,383)

(15,472)

(15,564)

(15,666)

Tangible assets(4)

$

290,917

$

292,784

$

284,168

$

281,870

$

274,148

 

 

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach



















(Dollars in millions) (unaudited)

March 31,
2015

December 31,
2014

September 30,
2014

June 30,
2014

March 31,
2014

Common equity excluding AOCI

$

44,120

$

43,661

$

43,241

$

42,848

$

42,658

Adjustments:










AOCI(12)(13)

(26)

(69)

(146)

6

(182)

Goodwill(10)

(13,801)

(13,805)

(13,801)

(13,811)

(13,811)

Intangible assets(10)(13)

(450)

(243)

(266)

(289)

(314)

Other

(172)

(10)

88

20

83

Common equity Tier 1 capital

$

29,671

$

29,534

$

29,116

$

28,774

$

28,434

Risk-weighted assets(3)

$

238,197

$

236,944

$

228,759

$

226,172

$

219,047

Common equity Tier 1 capital ratio(5)

12.5%

12.5%

12.7%

12.7%

13.0%

 

__________



(1)

Regulatory capital metrics and capital ratios as of the end of Q1 2015 are preliminary and therefore subject to change.

(2)

Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.

(3)

As of January 1, 2015, risk-weighted assets are calculated under the Basel III Standardized Approach, subject to transition provisions. Prior to January 1, 2015 risk-weighted assets were calculated under Basel I.



(4)

As of January 1, 2015, we changed our accounting principle for presenting eligible derivative assets and liabilities, as well as the related interest receivables and payables, from a gross basis of presentation to a net basis. Prior period average assets and average tangible assets have been recast to conform to this presentation. Prior period regulatory ratios have not been recast.

(5)

Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.

(6)

Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.

(7)

Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.

(8)

Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.

(9)

TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.

(10)

Includes impact of related deferred taxes.

(11)

Includes related surplus.

(12)

Amounts presented are net of tax.

(13)

Amounts based on transition provisions for regulatory capital deductions and adjustments of 20% for 2014 and 40% in 2015.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/capital-one-reports-first-quarter-2015-net-income-of-12-billion-or-200-per-share-300071373.html

SOURCE Capital One Financial Corporation

Investor Relations, Jeff Norris, 703.720.2455, Danielle Dietz, 703.720.2455; Media Relations, Julie Rakes, 804.284.5800, Tatiana Stead, 703.720.2352