Capital One Reports Fourth Quarter 2019 Net Income of $1.2 billion, or $2.25 per share

Excluding adjusting items, Fourth Quarter 2019 Net Income of $2.49 per share(1)

MCLEAN, Va., Jan. 21, 2020 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2019 of $1.2 billion, or $2.25 per diluted common share, compared with net income of $1.3 billion, or $2.69 per diluted common share in the third quarter of 2019, and with net income of $1.3 billion, or $2.48 per diluted common share in the fourth quarter of 2018. Excluding adjusting items, net income for the fourth quarter of 2019 was $2.49 per diluted common share(1).

"In the fourth quarter and for the full year 2019, Capital One continued to post solid results as we invest to grow and to drive our digital transformation," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "As the many benefits from our technology transformation continue and increase, we are well positioned to succeed in a rapidly changing marketplace."

Adjusting items in the fourth quarter of 2019, 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):

Pre-Tax

Diluted EPS

(Dollars in millions, except per share data)

Impact

Impact

Initial allowance build on acquired Walmart portfolio

$

84

$

0.13

Walmart launch and related integration expenses

48

0.08

Cybersecurity Incident expenses, net of insurance

16

0.03

All comparisons below are for the fourth quarter of 2019 compared with the third quarter of 2019 unless otherwise noted.

Fourth Quarter 2019 Income Statement Summary:

  • Total net revenue increased 7 percent to $7.4 billion.
  • Total non-interest expense increased 7 percent to $4.2 billion:
    • 42 percent increase in marketing.
    • 2 percent increase in operating expenses.
  • Pre-provision earnings increased 6 percent to $3.3 billion(2).
  • Provision for credit losses increased 31 percent to $1.8 billion:
    • Net charge-offs of $1.7 billion.
    • $135 million reserve build.
  • Net interest margin of 6.95 percent, increased 22 basis points.
  • Efficiency ratio of 56.03 percent.
    • Efficiency ratio excluding adjusting items of 55.16 percent(1).
  • Operating efficiency ratio of 46.47 percent.
    • Operating efficiency ratio excluding adjusting items of 45.60 percent(1).

Fourth Quarter 2019 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.2 percent at December 31, 2019.
  • Period-end loans held for investment in the quarter increased $16.5 billion, or 7 percent, to $265.8 billion.
    • Credit Card period-end loans increased $14.6 billion, or 13 percent, to $128.2 billion.
      • Domestic Card period-end loans increased $13.9 billion, or 13 percent, to $118.6 billion.
    • Consumer Banking period-end loans increased $1.1 billion, or 2 percent, to $63.1 billion.
      • Auto period-end loans increased $1.1 billion, or 2 percent, to $60.4 billion.
    • Commercial Banking period-end loans increased $849 million, or 1 percent, to $74.5 billion.
  • Average loans held for investment in the quarter increased $12.7 billion, or 5 percent, to $258.9 billion.
    • Credit Card average loans increased $9.7 billion, or 9 percent, to $122.1 billion.
      • Domestic Card average loans increased $9.5 billion, or 9 percent, to $113.0 billion.
    • Consumer Banking average loans increased $1.3 billion, or 2 percent, to $62.6 billion.
      • Auto average loans increased $1.4 billion, or 2 percent, to $59.9 billion.
    • Commercial Banking average loans increased $1.7 billion, or 2 percent, to $74.2 billion.
  • Period-end total deposits increased $5.5 billion, or 2 percent, to $262.7 billion, while average deposits increased $5.0 billion, or 2 percent, to $260.0 billion.
  • Interest-bearing deposits rate paid decreased 14 basis points to 1.41 percent.

All comparisons below are for the full year of 2019 compared with the full year of 2018 unless otherwise noted.

2019 Full Year Income Statement Summary:

  • Total net revenue increased 2 percent to $28.6 billion.
  • Total non-interest expense increased 4 percent to $15.5 billion:
    • 5 percent increase in marketing.
    • 4 percent increase in operating expenses.
  • Pre-provision earnings remained flat at $13.1 billion(2).
  • Provision for credit losses increased 6 percent to $6.2 billion.
  • Efficiency ratio of 54.15 percent.
    • Efficiency ratio excluding adjusting items was 52.67 percent(1).
  • Operating efficiency ratio of 46.20 percent.
    • Operating efficiency ratio excluding adjusting items was 44.76 percent(1).

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 21, 2020 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 4, 2020 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, 2018 and the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 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 $262.7 billion in deposits and $390.4 billion in total assets as of  December 31, 2019. 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.

(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.

 

 

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement(1)(2)

Fourth Quarter 2019

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 Loan and Lease 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 Loan, Allowance and Business Segment Disclosures (Tables 7—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 Annual Report on Form 10-K for the period ended December 31, 2019 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













2019 Q4 vs.

Year Ended December 31,

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

2019

2019

2019

2019

2018

2019

2018




2019 vs.

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Income Statement



















Net interest income

$

6,066

$

5,737

$

5,746

$

5,791

$

5,820

6

%

4

%

$

23,340

$

22,875

2

%

Non-interest income

1,361

1,222

1,378

1,292

1,193

11

14

5,253

5,201

1

Total net revenue(1)

7,427

6,959

7,124

7,083

7,013

7

6

28,593

28,076

2

Provision for credit losses

1,818

1,383

1,342

1,693

1,638

31

11

6,236

5,856

6

Non-interest expense:



















Marketing

710

501

546

517

831

42

(15)

2,274

2,174

5

Operating expense

3,451

3,371

3,233

3,154

3,301

2

5

13,209

12,728

4

Total non-interest expense

4,161

3,872

3,779

3,671

4,132

7

1

15,483

14,902

4

Income from continuing operations before income taxes

1,448

1,704

2,003

1,719

1,243

(15)

16

6,874

7,318

(6)

Income tax provision (benefit)

270

375

387

309

(21)

(28)

**

1,341

1,293

4

Income from continuing operations, net of tax

1,178

1,329

1,616

1,410

1,264

(11)

(7)

5,533

6,025

(8)

Income (loss) from discontinued operations, net of tax

(2)

4

9

2

(3)

**

(33)

13

(10)

**

Net income

1,176

1,333

1,625

1,412

1,261

(12)

(7)

5,546

6,015

(8)

Dividends and undistributed earnings allocated to participating securities(2)

(7)

(10)

(12)

(12)

(9)

(30)

(22)

(41)

(40)

3

Preferred stock dividends

(97)

(53)

(80)

(52)

(80)

83

21

(282)

(265)

6

Issuance cost for redeemed preferred stock(3)

(31)

—

—

—

—

**

**

(31)

—

**

Net income available to common stockholders

$

1,041

$

1,270

$

1,533

$

1,348

$

1,172

(18)

(11)

$

5,192

$

5,710

(9)

Common Share Statistics



















Basic earnings per common share:(2)



















Net income from continuing operations

$

2.26

$

2.70

$

3.24

$

2.87

$

2.50

(16)

%

(10)

%

$

11.07

$

11.92

(7)

%

Income (loss) from discontinued operations

—

0.01

0.02

—

(0.01)

**

**

0.03

(0.02)

**

Net income per basic common share

$

2.26

$

2.71

$

3.26

$

2.87

$

2.49

(17)

(9)

$

11.10

$

11.90

(7)

Diluted earnings per common share:(2)



















Net income from continuing operations

$

2.25

$

2.68

$

3.22

$

2.86

$

2.49

(16)

(10)

$

11.02

$

11.84

(7)

Income (loss) from discontinued operations

—

0.01

0.02

—

(0.01)

**

**

0.03

(0.02)

**

Net income per diluted common share

$

2.25

$

2.69

$

3.24

$

2.86

$

2.48

(16)

(9)

$

11.05

$

11.82

(7)

Weighted-average common shares outstanding (in millions):



















Basic

460.9

469.5

470.8

469.4

470.0

(2)

(2)

467.6

479.9

(3)

Diluted

463.4

471.8

473.0

471.6

472.7

(2)

(2)

469.9

483.1

(3)

Common shares outstanding (period-end, in millions)

456.6

465.7

470.3

469.6

467.7

(2)

(2)

456.6

467.7

(2)

Dividends declared and paid per common share

$

0.40

$

0.40

$

0.40

$

0.40

$

0.40

—

—

$

1.60

$

1.60

—

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

83.72

80.46

77.65

72.86

69.20

4

21

83.72

69.20

21











































2019 Q4 vs.

Year Ended December 31,

(Dollars in millions)

2019

2019

2019

2019

2018

2019

2018




2019 vs.

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Balance Sheet (Period-End)



















Loans held for investment

$

265,809

$

249,355

$

244,460

$

240,273

$

245,899

7

%

8

%

$

265,809

$

245,899

8

%

Interest-earning assets

355,202

344,643

339,160

340,071

341,293

3

4

355,202

341,293

4

Total assets

390,365

378,810

373,619

373,191

372,538

3

5

390,365

372,538

5

Interest-bearing deposits

239,209

234,084

231,161

230,199

226,281

2

6

239,209

226,281

6

Total deposits

262,697

257,148

254,535

255,107

249,764

2

5

262,697

249,764

5

Borrowings

55,697

50,149

49,233

50,358

58,905

11

(5)

55,697

58,905

(5)

Common equity

53,157

52,412

51,406

49,120

47,307

1

12

53,157

47,307

12

Total stockholders' equity

58,011

58,235

55,767

53,481

51,668

—

12

58,011

51,668

12

Balance Sheet (Average Balances)



















Loans held for investment

$

258,870

$

246,147

$

242,653

$

241,959

$

241,371

5

%

7

%

$

247,450

$

242,118

2

%

Interest-earning assets

349,150

340,949

338,026

337,793

334,714

2

4

341,510

332,738

3

Total assets

383,162

374,905

371,095

370,394

365,243

2

5

374,924

363,036

3

Interest-bearing deposits

236,250

232,063

230,452

227,572

222,827

2

6

231,609

221,760

4

Total deposits

260,040

255,082

253,634

251,410

247,663

2

5

255,065

247,117

3

Borrowings

51,442

49,413

49,982

53,055

53,994

4

(5)

50,965

53,144

(4)

Common equity

52,641

52,566

50,209

48,359

46,753

—

13

50,960

45,831

11

Total stockholders' equity

58,148

57,245

54,570

52,720

51,114

2

14

55,690

50,192

11

               

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated













2019 Q4 vs.

Year Ended December 31,

(Dollars in millions, except as noted)

2019

2019

2019

2019

2018

2019

2018




2019 vs.

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Performance Metrics



















Net interest income growth (period over period)

6

%

—

(1)

%

—

1

%

**

**

2

%

2

%

**

Non-interest income growth (period over period)

11

(11)

%

7

8

%

1

**

**

1

9

**

Total net revenue growth (period over period)

7

(2)

1

1

1

**

**

2

3

**

Total net revenue margin(5)

8.51

8.16

8.43

8.39

8.38

35

bps

13

bps

8.37

8.44

(7)

bps

Net interest margin(6)

6.95

6.73

6.80

6.86

6.96

22

(1)

6.83

6.87

(4)

Return on average assets

1.23

1.42

1.74

1.52

1.38

(19)

(15)

1.48

1.66

(18)

Return on average tangible assets(7)

1.28

1.48

1.82

1.59

1.44

(20)

(16)

1.54

1.73

(19)

Return on average common equity(8)

7.93

9.63

12.14

11.13

10.05

(170)

(212)

10.16

12.48

(232)

Return on average tangible common equity(9)

11.07

13.45

17.26

16.11

14.78

(238)

(371)

14.37

18.56

(419)

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

6.43

6.29

6.23

6.07

6.85

14

(42)

6.26

6.15

11

Efficiency ratio(10)

56.03

55.64

53.05

51.83

58.92

39

(289)

54.15

53.08

107

Operating efficiency ratio(11)

46.47

48.44

45.38

44.53

47.07

(197)

(60)

46.20

45.33

87

Effective income tax rate for continuing operations

18.6

22.0

19.3

18.0

(1.7)

(340)

**

19.5

17.7

180

Employees (period-end, in thousands)

51.9

52.1

50.7

48.8

47.6

—

9

%

51.9

47.6

9

%

Credit Quality Metrics



















Allowance for loan and lease losses

$

7,208

$

7,037

$

7,133

$

7,313

$

7,220

2

%

—

$

7,208

$

7,220

—

Allowance as a percentage of loans held for investment

2.71

%

2.82

%

2.92

%

3.04

%

2.94

%

(11)

bps

(23)

bps

2.71

%

2.94

%

(23)

bps

Net charge-offs

$

1,683

$

1,462

$

1,508

$

1,599

$

1,610

15

%

5

%

$

6,252

$

6,112

2

%

Net charge-off rate(12)

2.60

%

2.38

%

2.48

%

2.64

%

2.67

%

22

bps

(7)

bps

2.53

%

2.52

%

1

bps

30+ day performing delinquency rate

3.51

3.28

3.15

3.23

3.62

23

(11)

3.51

3.62

(11)

30+ day delinquency rate

3.74

3.51

3.35

3.40

3.84

23

(10)

3.74

3.84

(10)

Capital Ratios(13)



















Common equity Tier 1 capital

12.2

%

12.5

%

12.3

%

11.9

%

11.2

%

(30)

bps

100

bps

12.2

%

11.2

%

100

bps

Tier 1 capital

13.7

14.4

13.8

13.4

12.7

(70)

100

13.7

12.7

100

Total capital

16.1

16.8

16.2

15.8

15.1

(70)

100

16.1

15.1

100

Tier 1 leverage

11.7

11.9

11.4

11.0

10.7

(20)

100

11.7

10.7

100

Tangible common equity ("TCE")(14)

10.2

10.3

10.2

9.6

9.1

(10)

110

10.2

9.1

110

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income













2019 Q4 vs.

Year Ended December 31,


2019

2019

2019

2019

2018

2019

2018




2019 vs.

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

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Interest income:



















Loans, including loans held for sale

$

6,682

$

6,429

$

6,383

$

6,368

$

6,358

4

%

5

%

$

25,862

$

24,728

5

%

Investment securities

544

583

629

655

627

(7)

(13)

2,411

2,211

9

Other

44

63

64

69

63

(30)

(30)

240

237

1

Total interest income

7,270

7,075

7,076

7,092

7,048

3

3

28,513

27,176

5

Interest expense:



















Deposits

832

901

870

817

756

(8)

10

3,420

2,598

32

Securitized debt obligations

118

123

139

143

138

(4)

(14)

523

496

5

Senior and subordinated notes

236

299

310

314

297

(21)

(21)

1,159

1,125

3

Other borrowings

18

15

11

27

37

20

(51)

71

82

(13)

Total interest expense

1,204

1,338

1,330

1,301

1,228

(10)

(2)

5,173

4,301

20

Net interest income

6,066

5,737

5,746

5,791

5,820

6

4

23,340

22,875

2

Provision for credit losses

1,818

1,383

1,342

1,693

1,638

31

11

6,236

5,856

6

Net interest income after provision for credit losses

4,248

4,354

4,404

4,098

4,182

(2)

2

17,104

17,019

—

Non-interest income:



















Interchange fees, net

811

790

820

758

743

3

9

3,179

2,823

13

Service charges and other customer-related fees

342

283

352

353

352

21

(3)

1,330

1,585

(16)

Net securities gains (losses)

(18)

5

15

24

(20)

**

(10)

26

(209)

**

Other

226

144

191

157

118

57

92

718

1,002

(28)

Total non-interest income

1,361

1,222

1,378

1,292

1,193

11

14

5,253

5,201

1

Non-interest expense:



















Salaries and associate benefits

1,652

1,605

1,558

1,573

1,345

3

23

6,388

5,727

12

Occupancy and equipment

565

519

521

493

610

9

(7)

2,098

2,118

(1)

Marketing

710

501

546

517

831

42

(15)

2,274

2,174

5

Professional services

318

314

314

291

426

1

(25)

1,237

1,145

8

Communications and data processing

346

312

329

303

326

11

6

1,290

1,260

2

Amortization of intangibles

28

25

29

30

43

12

(35)

112

174

(36)

Other(15)

542

596

482

464

551

(9)

(2)

2,084

2,304

(10)

Total non-interest expense

4,161

3,872

3,779

3,671

4,132

7

1

15,483

14,902

4

Income from continuing operations before income taxes

1,448

1,704

2,003

1,719

1,243

(15)

16

6,874

7,318

(6)

Income tax provision (benefit)

270

375

387

309

(21)

(28)

     **

1,341

1,293

4

Income from continuing operations, net of tax

1,178

1,329

1,616

1,410

1,264

(11)

(7)

5,533

6,025

(8)

Income (loss) from discontinued operations, net of tax

(2)

4

9

2

(3)

     **

(33)

13

(10)

     **

Net income

1,176

1,333

1,625

1,412

1,261

(12)

(7)

5,546

6,015

(8)

Dividends and undistributed earnings allocated to participating securities(2)

(7)

(10)

(12)

(12)

(9)

(30)

(22)

(41)

(40)

3

Preferred stock dividends

(97)

(53)

(80)

(52)

(80)

83

21

(282)

(265)

6

Issuance cost for redeemed preferred stock(3)

(31)

—

—

—

—

**

**

(31)

—

**

Net income available to common stockholders

$

1,041

$

1,270

$

1,533

$

1,348

$

1,172

(18)

(11)

$

5,192

$

5,710

(9)

































2019 Q4 vs.

Year Ended December 31,


2019

2019

2019

2019

2018

2019

2018




2019 vs.

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

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Basic earnings per common share:(2)



















Net income from continuing operations

$

2.26

$

2.70

$

3.24

$

2.87

$

2.50

(16)

%

(10)

%

$

11.07

$

11.92

(7)

%

Income (loss) from discontinued operations

—

0.01

0.02

—

(0.01)

     **

     **

0.03

(0.02)

     **

Net income per basic common share

$

2.26

$

2.71

$

3.26

$

2.87

$

2.49

(17)

(9)

$

11.10

$

11.90

(7)

Diluted earnings per common share:(2)



















Net income from continuing operations

$

2.25

$

2.68

$

3.22

$

2.86

$

2.49

(16)

(10)

$

11.02

$

11.84

(7)

Income (loss) from discontinued operations

—

0.01

0.02

—

(0.01)

     **

     **

0.03

(0.02)

     **

Net income per diluted common share

$

2.25

$

2.69

$

3.24

$

2.86

$

2.48

(16)

(9)

$

11.05

$

11.82

(7)

Weighted-average common shares outstanding (in millions):



















Basic common shares

460.9

469.5

470.8

469.4

470.0

(2)

(2)

467.6

479.9

(3)

Diluted common shares

463.4

471.8

473.0

471.6

472.7

(2)

(2)

469.9

483.1

(3)

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets













2019 Q4 vs.


2019

2019

2019

2019

2018

2019

2018

(Dollars in millions)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

Assets:













Cash and cash equivalents:













Cash and due from banks

$

4,129

$

4,452

$

5,184

$

4,572

$

4,768

(7)

%

(13)

%

Interest-bearing deposits and other short-term investments

9,278

12,668

9,927

12,897

8,418

(27)

10

Total cash and cash equivalents

13,407

17,120

15,111

17,469

13,186

(22)

2

Restricted cash for securitization investors

342

417

710

1,969

303

(18)

13

Investment securities:













Securities available for sale

79,213

46,168

45,658

45,888

46,150

72

72

Securities held to maturity

—

33,894

35,475

36,503

36,771

(100)

(100)

Total investment securities

79,213

80,062

81,133

82,391

82,921

(1)

(4)

Loans held for investment:













Unsecuritized loans held for investment

231,992

215,892

211,556

208,591

211,702

7

10

Loans held in consolidated trusts

33,817

33,463

32,904

31,682

34,197

1

(1)

Total loans held for investment

265,809

249,355

244,460

240,273

245,899

7

8

Allowance for loan and lease losses

(7,208)

(7,037)

(7,133)

(7,313)

(7,220)

2

—

Net loans held for investment

258,601

242,318

237,327

232,960

238,679

7

8

Loans held for sale

400

1,245

1,829

905

1,192

(68)

(66)

Premises and equipment, net

4,378

4,311

4,243

4,205

4,191

2

4

Interest receivable

1,758

1,627

1,544

1,615

1,614

8

9

Goodwill

14,653

14,624

14,545

14,546

14,544

—

1

Other assets

17,613

17,086

17,177

17,131

15,908

3

11

Total assets

$

390,365

$

378,810

$

373,619

$

373,191

$

372,538

3

5



























2019 Q4 vs.


2019

2019

2019

2019

2018

2019

2018

(Dollars in millions)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

Liabilities:













Interest payable

$

439

$

370

$

437

$

382

$

458

19

%

(4)

%

Deposits:













Non-interest-bearing deposits

23,488

23,064

23,374

24,908

23,483

2

—

Interest-bearing deposits

239,209

234,084

231,161

230,199

226,281

2

6

Total deposits

262,697

257,148

254,535

255,107

249,764

2

5

Securitized debt obligations

17,808

18,910

16,959

19,273

18,307

(6)

(3)

Other debt:













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

314

464

359

335

352

(32)

(11)

Senior and subordinated notes

30,472

30,682

31,822

30,645

30,826

(1)

(1)

Other borrowings

7,103

93

93

105

9,420

**

(25)

Total other debt

37,889

31,239

32,274

31,085

40,598

21

(7)

Other liabilities

13,521

12,908

13,647

13,863

11,743

5

15

Total liabilities

332,354

320,575

317,852

319,710

320,870

4

4















Stockholders' equity:













Preferred stock

0

0

0

0

0

—

—

Common stock

7

7

7

7

7

—

—

Additional paid-in capital, net

32,980

33,826

32,262

32,160

32,040

(3)

3

Retained earnings

40,340

39,476

38,386

37,030

35,875

2

12

Accumulated other comprehensive income (loss)

1,156

453

170

(660)

(1,263)

155

**

Treasury stock, at cost

(16,472)

(15,527)

(15,058)

(15,056)

(14,991)

6

10

Total stockholders' equity

58,011

58,235

55,767

53,481

51,668

—

12

Total liabilities and stockholders' equity

$

390,365

$

378,810

$

373,619

$

373,191

$

372,538

3

5

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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


(1)

Total net revenue was reduced by $365 million in Q4 2019, $330 million in Q3 2019, $318 million in Q2 2019, $376 million in Q1 2019 and $391 million in Q4 2018 for the estimated uncollectible amount of billed finance charges and fees and related losses.

(2)

Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(3)

On December 2, 2019, we redeemed all outstanding shares of our fixed rate 6.25% non-cumulative perpetual preferred stock Series C and fixed rate 6.70% non-cumulative perpetual preferred stock Series D. The redemption reduced our net income available to common shareholders by $31 million in Q4 2019.

(4)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(5)

Total net revenue margin is calculated based on total net revenue for the period divided by average interest-earning assets for the period.

(6)

Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

(7)

Return on average tangible assets is a non-GAAP measure calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(8)

Return on average common equity is calculated based on annualized (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.

(9)

Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized (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. Our calculation of ROTCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(10)

Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(11)

Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(12)

Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

(13)

Capital ratios as of the end of Q4 2019 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.

(14)

TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(15)

Includes $16 million of net Cybersecurity Incident expenses in Q4 2019, consisting of $23 million of expenses and $7 million of insurance recoveries; and $22 million of net Cybersecurity Incident expenses in Q3 2019, consisting of $49 million of expenses and $27 million of insurance recoveries.

**

Not meaningful.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



2019 Q4

2019 Q3

2018 Q4


Average
Balance

Interest
Income/
Expense

Yield/Rate

Average
Balance

Interest
Income/
Expense

Yield/Rate

Average
Balance

Interest
Income/
Expense

Yield/Rate

(Dollars in millions, except as noted)








Interest-earning assets:

















Loans, including loans held for sale

$

259,855

$

6,682

10.29

%

$

247,419

$

6,429

10.39

%

$

242,534

$

6,358

10.49

%

Investment securities

79,104

544

2.75

80,762

583

2.88

83,391

627

3.01

Cash equivalents and other

10,191

44

1.70

12,768

63

2.00

8,789

63

2.87

Total interest-earning assets

$

349,150

$

7,270

8.33

$

340,949

$

7,075

8.30

$

334,714

$

7,048

8.42

Interest-bearing liabilities:

















Interest-bearing deposits

$

236,250

$

832

1.41

$

232,063

$

901

1.55

$

222,827

$

756

1.36

Securitized debt obligations

18,339

118

2.58

16,750

123

2.94

18,312

138

2.99

Senior and subordinated notes

30,597

236

3.08

31,220

299

3.84

30,831

297

3.86

Other borrowings and liabilities

3,789

18

1.95

2,698

15

2.14

6,123

37

2.43

Total interest-bearing liabilities

$

288,975

$

1,204

1.67

$

282,731

$

1,338

1.89

$

278,093

$

1,228

1.77

Net interest income/spread


$

6,066

6.66



$

5,737

6.41



$

5,820

6.65

Impact of non-interest-bearing funding




0.29





0.32





0.31

Net interest margin




6.95

%




6.73

%




6.96

%



Year Ended December 31,


2019

2018


Average
Balance

Interest
Income/
Expense

Yield/Rate

Average
Balance

Interest
Income/
Expense

Yield/Rate

(Dollars in millions, except as noted)





Interest-earning assets:











Loans, including loans held for sale

$

248,552

$

25,862

10.41

%

$

243,371

$

24,728

10.16

%

Investment securities

81,467

2,411

2.96

79,224

2,211

2.79

Cash equivalents and other

11,491

240

2.08

10,143

237

2.33

Total interest-earning assets

$

341,510

$

28,513

8.35

$

332,738

$

27,176

8.17

Interest-bearing liabilities:











Interest-bearing deposits

$

231,609

$

3,420

1.48

$

221,760

$

2,598

1.17

Securitized debt obligations

18,020

523

2.90

19,014

496

2.61

Senior and subordinated notes

30,821

1,159

3.76

31,295

1,125

3.60

Other borrowings and liabilities

3,369

71

2.12

4,028

82

2.04

Total interest-bearing liabilities

$

283,819

$

5,173

1.82

$

276,097

$

4,301

1.56

Net interest income/spread


$

23,340

6.53



$

22,875

6.61

Impact of non-interest-bearing funding




0.30





0.26

Net interest margin




6.83

%




6.87

%

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics













2019 Q4 vs.

Year Ended December 31,

(Dollars in millions, except as noted)

2019
Q4

2019
Q3

2019
Q2

2019
Q1

2018
Q4

2019
Q3

2018
Q4

2019

2018

2019 vs.
2018

Loans Held for Investment (Period-End)



















Credit card:



















   Domestic credit card

$

118,606

$

104,664

$

102,959

$

101,052

$

107,350

13

%

10

%

$

118,606

$

107,350

10

%

   International card businesses

9,630

9,017

9,182

8,784

9,011

7

7

9,630

9,011

7

Total credit card

128,236

113,681

112,141

109,836

116,361

13

10

128,236

116,361

10

Consumer banking:



















   Auto

60,362

59,278

57,556

56,444

56,341

2

7

60,362

56,341

7

   Retail banking

2,703

2,737

2,771

2,804

2,864

(1)

(6)

2,703

2,864

(6)

Total consumer banking

63,065

62,015

60,327

59,248

59,205

2

7

63,065

59,205

7

Commercial banking:



















   Commercial and multifamily real estate

30,245

30,009

29,861

28,984

28,899

1

5

30,245

28,899

5

   Commercial and industrial

44,263

43,650

42,125

42,197

41,091

1

8

44,263

41,091

8

     Total commercial lending

74,508

73,659

71,986

71,181

69,990

1

6

74,508

69,990

6

   Small-ticket commercial real estate

—

—

6

8

343

     **

     **

—

343

     **

Total commercial banking

74,508

73,659

71,992

71,189

70,333

1

6

74,508

70,333

6

Total loans held for investment

$

265,809

$

249,355

$

244,460

$

240,273

$

245,899

7

8

$

265,809

$

245,899

8

Loans Held for Investment (Average)



















Credit card:



















   Domestic credit card

$

112,965

$

103,426

$

101,930

$

102,667

$

103,391

9

%

9

%

$

105,270

$

100,832

4

%

   International card businesses

9,120

8,945

8,868

8,789

8,958

2

2

8,932

8,988

(1)

Total credit card

122,085

112,371

110,798

111,456

112,349

9

9

114,202

109,820

4

Consumer banking:



















   Auto

59,884

58,517

57,070

56,234

56,469

2

6

57,938

55,610

4

   Home loan(1)

—

—

—

—

—

     **

     **

—

6,266

     **

   Retail banking

2,712

2,752

2,788

2,831

2,873

(1)

(6)

2,770

3,075

(10)

Total consumer banking

62,596

61,269

59,858

59,065

59,342

2

5

60,708

64,951

(7)

Commercial banking:



















   Commercial and multifamily real estate

30,173

29,698

29,514

29,034

28,855

2

5

29,608

27,771

7

   Commercial and industrial

44,016

42,807

42,476

42,132

40,476

3

9

42,863

39,188

9

     Total commercial lending

74,189

72,505

71,990

71,166

69,331

2

7

72,471

66,959

8

   Small-ticket commercial real estate

—

2

7

272

349

     **

     **

69

371

(81)

Total commercial banking

74,189

72,507

71,997

71,438

69,680

2

6

72,540

67,330

8

Other loans

—

—

—

—

—

     **

     **

—

17

     **

Total average loans held for investment

$

258,870

$

246,147

$

242,653

$

241,959

$

241,371

5

7

$

247,450

$

242,118

2


















2019 Q4 vs.

Year Ended December 31,


2019
Q4

2019
Q3

2019
Q2

2019
Q1

2018
Q4

2019
Q3

2018
Q4

2019

2018

2019 vs.
2018

Net Charge-Off (Recovery) Rates


























Credit card:


























   Domestic credit card(2)

4.32

%

4.12

%

4.86

%

5.04

%

4.64

%

20

bps

(32)

bps

4.58

%

4.74

%

(16)

bps

   International card businesses

4.22


3.78


3.63


3.20


4.22

44

—


3.71


3.19

52

Total credit card

4.31


4.09


4.76


4.90


4.61

22

(30)


4.51


4.62

(11)

Consumer banking:


























   Auto

1.90


1.60


1.09


1.44


1.98

30

(8)


1.51


1.64

(13)

   Retail banking

2.77


2.55


2.42


2.56


2.56

22

21


2.57


2.26

31

Total consumer banking

1.93


1.64


1.15


1.49


2.01

29

(8)


1.56


1.51

5

Commercial banking:


























   Commercial and multifamily real estate

—


0.02


—


—


(0.01)

(2)

1


—


0.01

(1)

   Commercial and industrial

0.60


0.55


0.15


0.13


0.17

5

43


0.36


0.14

22

     Total commercial lending

0.36


0.33


0.09


0.08


0.10

3

26


0.22


0.08

14

Total commercial banking

0.35


0.33


0.09


0.08


0.10

2

25


0.22


0.08

14

Total net charge-offs

2.60


2.38


2.48


2.64


2.67

22

(7)


2.53


2.52

1

30+ Day Performing Delinquency Rates


























Credit card:


























   Domestic credit card(2)

3.93

%

3.71

%

3.40

%

3.72

%

4.04

%

22

bps

(11)

bps

3.93

%

4.04

%

(11)

bps

   International card businesses

3.47


3.52


3.40


3.61


3.52

(5)

(5)


3.47


3.52

(5)

Total credit card

3.89


3.69


3.40


3.71


4.00

20

(11)


3.89


4.00

(11)

Consumer banking:


























   Auto

6.88


6.47


6.10


5.78


6.95

41

(7)


6.88


6.95

(7)

   Retail banking

1.02


1.01


0.93


0.84


1.01

1

1


1.02


1.01

1

Total consumer banking

6.63


6.23


5.87


5.55


6.67

40

(4)


6.63


6.67

(4)

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


























Credit card:


























   International card businesses

0.26

%

0.25

%

0.25

%

0.26

%

0.25

%

1

bps

1

bps

0.26

%

0.25

%

1

bps

Total credit card

0.02


0.02


0.02


0.02


0.02

—

—


0.02


0.02

—

Consumer banking:


























   Auto

0.81


0.73


0.64


0.57


0.80

8

1


0.81


0.80

1

   Retail banking

0.87


0.91


1.02


1.10


1.04

(4)

(17)


0.87


1.04

(17)

Total consumer banking

0.81


0.74


0.66


0.59


0.81

7

—


0.81


0.81

—

Commercial banking:


























   Commercial and multifamily real estate

0.12


0.12


0.14


0.24


0.29

—

(17)


0.12


0.29

(17)

   Commercial and industrial

0.93


0.95


0.74


0.71


0.54

(2)

39


0.93


0.54

39

     Total commercial lending

0.60


0.61


0.49


0.52


0.44

(1)

16


0.60


0.44

16

Total commercial banking

0.60


0.61


0.50


0.53


0.44

(1)

16


0.60


0.44

16

Total nonperforming loans

0.37


0.37


0.32


0.31


0.33

—

4


0.37


0.33

4

Total nonperforming assets

0.39


0.40


0.34


0.33


0.35

(1)

4


0.39


0.35

4

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity



Three Months Ended December 31, 2019


Credit Card

Consumer Banking



(Dollars in millions)

Domestic
Card

International
Card
Businesses

Total
Credit Card

Auto

Retail
Banking

Total
Consumer
Banking

Commercial
Banking

Total

Allowance for loan and lease losses:















Balance as of September 30, 2019

$

4,870

$

400

$

5,270

$

952

$

55

$

1,007

$

760

$

7,037

Charge-offs

(1,554)

(133)

(1,687)

(511)

(23)

(534)

(72)

(2,293)

Recoveries

335

38

373

227

4

231

6

610

Net charge-offs

(1,219)

(95)

(1,314)

(284)

(19)

(303)

(66)

(1,683)

Provision for loan and lease losses

1,346

75

1,421

316

18

334

81

1,836

Allowance build (release) for loan and lease losses

127

(20)

107

32

(1)

31

15

153

Other changes(5)

—

18

18

—

—

—

—

18

Balance as of December 31, 2019

4,997

398

5,395

984

54

1,038

775

7,208

Reserve for unfunded lending commitments:















Balance as of September 30, 2019

—

—

—

—

4

4

149

153

Provision (benefit) for losses on unfunded lending commitments

—

—

—

—

1

1

(19)

(18)

Balance as of December 31, 2019

—

—

—

—

5

5

130

135

Combined allowance and reserve as of December 31, 2019

$

4,997

$

398

$

5,395

$

984

$

59

$

1,043

$

905

$

7,343



Year Ended December 31, 2019


Credit Card

Consumer Banking



(Dollars in millions)

Domestic
Card

International
Card
Businesses

Total
Credit Card

Auto

Retail
Banking

Total
Consumer
Banking

Commercial
Banking

Total

Allowance for loan and lease losses:















Balance as of December 31, 2018

$

5,144

$

391

$

5,535

$

990

$

58

$

1,048

$

637

$

7,220

Charge-offs

(6,189)

(522)

(6,711)

(1,829)

(88)

(1,917)

(181)

(8,809)

Recoveries

1,371

191

1,562

953

17

970

25

2,557

Net charge-offs

(4,818)

(331)

(5,149)

(876)

(71)

(947)

(156)

(6,252)

Provision for loan and lease losses

4,671

321

4,992

870

67

937

294

6,223

Allowance build (release) for loan and lease losses

(147)

(10)

(157)

(6)

(4)

(10)

138

(29)

Other changes(5)

—

17

17

—

—

—

—

17

Balance as of December 31, 2019

4,997

398

5,395

984

54

1,038

775

7,208

Reserve for unfunded lending commitments:















Balance as of December 31, 2018

—

—

—

—

4

4

118

122

Provision for losses on unfunded lending commitments

—

—

—

—

1

1

12

13

Balance as of December 31, 2019

—

—

—

—

5

5

130

135

Combined allowance and reserve as of December 31, 2019

$

4,997

$

398

$

5,395

$

984

$

59

$

1,043

$

905

$

7,343

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results



Three Months Ended December 31, 2019

Year Ended December 31, 2019

(Dollars in millions)

Credit
Card

Consumer
Banking

Commercial
Banking(6)

Other(6)

Total

Credit
Card

Consumer
Banking

Commercial
Banking(6)

Other(6)

Total

Net interest income

$

3,794

$

1,662

$

494

$

116

$

6,066

$

14,461

$

6,732

$

1,983

$

164

$

23,340

Non-interest income (loss)

1,030

152

223

(44)

1,361

3,888

643

831

(109)

5,253

Total net revenue

4,824

1,814

717

72

7,427

18,349

7,375

2,814

55

28,593

Provision for credit losses

1,421

335

62

—

1,818

4,992

938

306

—

6,236

Non-interest expense

2,487

1,110

441

123

4,161

9,271

4,091

1,699

422

15,483

Income (loss) from continuing operations before income taxes

916

369

214

(51)

1,448

4,086

2,346

809

(367)

6,874

Income tax provision (benefit)

212

86

50

(78)

270

959

547

188

(353)

1,341

Income (loss) from continuing operations, net of tax

$

704

$

283

$

164

$

27

$

1,178

$

3,127

$

1,799

$

621

$

(14)

$

5,533























Three Months Ended September 30, 2019









(Dollars in millions)

Credit
Card

Consumer
Banking

Commercial
Banking(6)

Other(6)

Total









Net interest income

$

3,546

$

1,682

$

486

$

23

$

5,737










Non-interest income (loss)

870

165

221

(34)

1,222










Total net revenue (loss)

4,416

1,847

707

(11)

6,959










Provision for credit losses

1,087

203

93

—

1,383










Non-interest expense

2,360

985

414

113

3,872










Income (loss) from continuing operations before income taxes

969

659

200

(124)

1,704










Income tax provision (benefit)

235

154

46

(60)

375










Income (loss) from continuing operations, net of tax

$

734

$

505

$

154

$

(64)

$

1,329

































Three Months Ended December 31, 2018

Year Ended December 31, 2018

(Dollars in millions)

Credit
Card

Consumer
Banking

Commercial
Banking(6)(7)

Other(6)(7)

Total

Credit
Card

Consumer
Banking

Commercial
Banking(6)(7)

Other(6)(7)

Total

Net interest income

$

3,617

$

1,689

$

508

$

6

$

5,820

$

14,167

$

6,549

$

2,044

$

115

$

22,875

Non-interest income (loss)

886

159

159

(11)

1,193

3,520

663

744

274

5,201

Total net revenue (loss)

4,503

1,848

667

(5)

7,013

17,687

7,212

2,788

389

28,076

Provision (benefit) for credit losses

1,326

303

9

—

1,638

4,984

838

83

(49)

5,856

Non-interest expense

2,496

1,085

434

117

4,132

8,542

4,027

1,654

679

14,902

Income (loss) from continuing operations before income taxes

681

460

224

(122)

1,243

4,161

2,347

1,051

(241)

7,318

Income tax provision (benefit)

160

107

52

(340)

(21)

970

547

245

(469)

1,293

Income from continuing operations, net of tax

$

521

$

353

$

172

$

218

$

1,264

$

3,191

$

1,800

$

806

$

228

$

6,025





















 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business













2019 Q4 vs.

Year Ended December 31,


2019

2019

2019

2019

2018

2019

2018




2019 vs.

(Dollars in millions, except as noted)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Credit Card



















Earnings:



















Net interest income

$

3,794

$

3,546

$

3,531

$

3,590

$

3,617

7

%

5

%

$

14,461

$

14,167

2

%

Non-interest income

1,030

870

1,038

950

886

18

16

3,888

3,520

10

Total net revenue

4,824

4,416

4,569

4,540

4,503

9

7

18,349

17,687

4

Provision for credit losses

1,421

1,087

1,095

1,389

1,326

31

7

4,992

4,984

—

Non-interest expense

2,487

2,360

2,253

2,171

2,496

5

—

9,271

8,542

9

Income from continuing operations before income taxes

916

969

1,221

980

681

(5)

35

4,086

4,161

(2)

Income tax provision

212

235

283

229

160

(10)

33

959

970

(1)

Income from continuing operations, net of tax

$

704

$

734

$

938

$

751

$

521

(4)

35

$

3,127

$

3,191

(2)

Selected performance metrics:



















Period-end loans held for investment

$

128,236

$

113,681

$

112,141

$

109,836

$

116,361

13

10

$

128,236

$

116,361

10

Average loans held for investment

122,085

112,371

110,798

111,456

112,349

9

9

114,202

109,820

4

Average yield on loans held for investment(8)

15.02

%

15.55

%

15.66

%

15.77

%

15.63

%

(53)

bps

(61)

bps

15.49

%

15.43

%

6

bps

Total net revenue margin(9)

15.80

15.72

16.50

16.29

16.03

8

(23)

16.07

16.11

(4)

Net charge-off rate

4.31

4.09

4.76

4.90

4.61

22

(30)

4.51

4.62

(11)

30+ day performing delinquency rate

3.89

3.69

3.40

3.71

4.00

20

(11)

3.89

4.00

(11)

30+ day delinquency rate

3.91

3.71

3.42

3.72

4.01

20

(10)

3.91

4.01

(10)

Nonperforming loan rate(3)

0.02

0.02

0.02

0.02

0.02

—

—

0.02

0.02

—

Purchase volume(10)

$

116,631

$

108,034

$

106,903

$

93,197

$

105,696

8

%

10

%

$

424,765

$

387,102

10

%


















































2019 Q4 vs.

Year Ended December 31,


2019

2019

2019

2019

2018

2019

2018




2019 vs.

(Dollars in millions, except as noted)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Domestic Card



















Earnings:



















Net interest income

$

3,473

$

3,299

$

3,220

$

3,273

$

3,309

5

%

5

%

$

13,265

$

12,926

3

%

Non-interest income

962

878

971

873

828

10

16

3,684

3,239

14

Total net revenue

4,435

4,177

4,191

4,146

4,137

6

7

16,949

16,165

5

Provision for credit losses

1,346

1,010

1,024

1,291

1,229

33

10

4,671

4,653

—

Non-interest expense

2,249

2,076

2,034

1,949

2,216

8

1

8,308

7,621

9

Income from continuing operations before income taxes

840

1,091

1,133

906

692

(23)

21

3,970

3,891

2

Income tax provision

196

254

264

211

162

(23)

21

925

907

2

Income from continuing operations, net of tax

$

644

$

837

$

869

$

695

$

530

(23)

22

$

3,045

$

2,984

2

Selected performance metrics:



















Period-end loans held for investment

$

118,606

$

104,664

$

102,959

$

101,052

$

107,350

13

10

$

118,606

$

107,350

10

Average loans held for investment

112,965

103,426

101,930

102,667

103,391

9

9

105,270

100,832

4

Average yield on loans held for investment(8)

14.91

%

15.74

%

15.60

%

15.69

%

15.58

%

(83)

bps

(67)

bps

15.47

%

15.36

%

11

bps

Total net revenue margin(9)

15.70

16.15

16.45

16.15

16.01

(45)

(31)

16.10

16.03

7

Net charge-off rate(2)

4.32

4.12

4.86

5.04

4.64

20

(32)

4.58

4.74

(16)

30+ day performing delinquency rate(2)

3.93

3.71

3.40

3.72

4.04

22

(11)

3.93

4.04

(11)

Purchase volume(10)

$

107,154

$

99,087

$

98,052

$

85,738

$

96,818

8

%

11

%

$

390,032

$

354,158

10

%

Refreshed FICO scores:(11)



















Greater than 660

67

%

68

%

68

%

66

%

67

%

(1)

—

67

%

67

%

—

660 or below

33

32

32

34

33

1

—

33

33

—

Total

100

%

100

%

100

%

100

%

100

%




100

%

100

%

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business













2019 Q4 vs.

Year Ended December 31,


2019

2019

2019

2019

2018

2019

2018




2019 vs.

(Dollars in millions, except as noted)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Consumer Banking



















Earnings:



















Net interest income

$

1,662

$

1,682

$

1,709

$

1,679

$

1,689

(1)

%

(2)

%

$

6,732

$

6,549

3

%

Non-interest income

152

165

166

160

159

(8)

(4)

643

663

(3)

Total net revenue

1,814

1,847

1,875

1,839

1,848

(2)

(2)

7,375

7,212

2

Provision for credit losses

335

203

165

235

303

65

11

938

838

12

Non-interest expense

1,110

985

1,002

994

1,085

13

2

4,091

4,027

2

Income from continuing operations before income taxes

369

659

708

610

460

(44)

(20)

2,346

2,347

—

Income tax provision

86

154

165

142

107

(44)

(20)

547

547

—

Income from continuing operations, net of tax

$

283

$

505

$

543

$

468

$

353

(44)

(20)

$

1,799

$

1,800

—

Selected performance metrics:



















Period-end loans held for investment(1)

$

63,065

$

62,015

$

60,327

$

59,248

$

59,205

2

7

$

63,065

$

59,205

7

Average loans held for investment(1)

62,596

61,269

59,858

59,065

59,342

2

5

60,708

64,951

(7)

Average yield on loans held for investment(8)

8.51

%

8.47

%

8.36

%

8.15

%

8.14

%

4

bps

37

bps

8.37

%

7.54

%

83

bps

Auto loan originations

$

7,527

$

8,175

$

7,327

$

6,222

$

5,932

(8)

%

27

%

$

29,251

$

26,276

11

%

Period-end deposits

213,099

206,423

205,220

205,439

198,607

3

7

213,099

198,607

7

Average deposits

209,783

204,933

204,164

201,072

196,348

2

7

205,012

193,053

6

Average deposits interest rate

1.20

%

1.31

%

1.26

%

1.18

%

1.10

%

(11)

bps

10

bps

1.24

%

0.95

%

29

bps

Net charge-off rate

1.93

1.64

1.15

1.49

2.01

29

(8)

1.56

1.51

5

30+ day performing delinquency rate

6.63

6.23

5.87

5.55

6.67

40

(4)

6.63

6.67

(4)

30+ day delinquency rate

7.34

6.86

6.41

6.02

7.36

48

(2)

7.34

7.36

(2)

Nonperforming loan rate(3)

0.81

0.74

0.66

0.59

0.81

7

—

0.81

0.81

—

Nonperforming asset rate(4)

0.91

0.83

0.75

0.68

0.90

8

1

0.91

0.90

1

Auto—At origination FICO scores:(12)



















Greater than 660

48

%

48

%

49

%

49

%

50

%

—

(2)

%

48

%

50

%

(2)

%

621 - 660

20

20

19

19

19

—

1

20

19

1

620 or below

32

32

32

32

31

—

1

32

31

1

Total

100

%

100

%

100

%

100

%

100

%




100

%

100

%

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business













2019 Q4 vs.

Year Ended December 31,


2019

2019

2019

2019

2018

2019

2018




2019 vs.

(Dollars in millions, except as noted)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Commercial Banking



















Earnings:



















Net interest income

$

494

$

486

$

514

$

489

$

508

2

%

(3)

%

$

1,983

$

2,044

(3)

%

Non-interest income

223

221

200

187

159

1

40

831

744

12

Total net revenue(6)(7)

717

707

714

676

667

1

7

2,814

2,788

1

Provision for credit losses

62

93

82

69

9

(33)

**

306

83

**

Non-interest expense

441

414

427

417

434

7

2

1,699

1,654

3

Income from continuing operations before income taxes

214

200

205

190

224

7

(4)

809

1,051

(23)

Income tax provision

50

46

48

44

52

9

(4)

188

245

(23)

Income from continuing operations, net of tax

$

164

$

154

$

157

$

146

$

172

6

(5)

$

621

$

806

(23)

Selected performance metrics:



















Period-end loans held for investment

$

74,508

$

73,659

$

71,992

$

71,189

$

70,333

1

6

$

74,508

$

70,333

6

Average loans held for investment

74,189

72,507

71,997

71,438

69,680

2

6

72,540

67,330

8

Average yield on loans held for investment(6)(8)

4.22

%

4.45

%

4.75

%

4.62

%

4.67

%

(23)

bps

(45)

bps

4.51

%

4.46

%

5

bps

Period-end deposits

$

32,134

$

30,923

$

30,761

$

31,248

$

29,480

4

%

9

%

$

32,134

$

29,480

9

%

Average deposits

32,034

30,693

31,364

30,816

30,680

4

4

31,229

32,175

(3)

Average deposits interest rate

1.10

%

1.25

%

1.28

%

1.11

%

0.95

%

(15)

bps

15

bps

1.18

%

0.72

%

46

bps

Net charge-off rate

0.35

0.33

0.09

0.08

0.10

2

25

0.22

0.08

14

Nonperforming loan rate(3)

0.60

0.61

0.50

0.53

0.44

(1)

16

0.60

0.44

16

Nonperforming asset rate(4)

0.60

0.61

0.50

0.53

0.45

(1)

15

0.60

0.45

15

Risk category:(13)



















Noncriticized

$

71,848

$

71,144

$

69,390

$

68,594

$

68,043

1

%

6

%

$

71,848

$

68,043

6

%

Criticized performing

2,181

2,035

2,211

2,094

1,848

7

18

2,181

1,848

18

Criticized nonperforming

448

449

360

378

312

—

44

448

312

44

PCI loans

31

31

31

123

130

—

(76)

31

130

(76)

Total commercial banking loans

$

74,508

$

73,659

$

71,992

$

71,189

$

70,333

1

6

$

74,508

$

70,333

6

Risk category as a percentage of period-end loans held for investment:(13)






















Noncriticized

96.5

%

96.6

%

96.4

%

96.4

%

96.8

%

(10)

bps

(30)

bps

96.5

%

96.8

%

(30)

bps

Criticized performing

2.9

2.8

3.1

2.9

2.6

10

30

2.9

2.6

30

Criticized nonperforming

0.6

0.6

0.5

0.5

0.4

—

20

0.6

0.4

20

PCI loans

—

—

—

0.2

0.2

—

(20)

—

0.2

(20)

Total commercial banking loans

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%




100.0

%

100.0

%

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total













2019 Q4 vs.

Year Ended December 31,


2019

2019

2019

2019

2018

2019

2018




2019 vs.

(Dollars in millions)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2019

2018

2018

Other



















Earnings:



















Net interest income (loss)

$

116

$

23

$

(8)

$

33

$

6

**

**

$

164

$

115

43

%

Non-interest income (loss)(1)

(44)

(34)

(26)

(5)

(11)

29

%

**

(109)

274

**

Total net revenue (loss)(6)(7)

72

(11)

(34)

28

(5)

**

**

55

389

(86)

Benefit for credit losses(1)

—

—

—

—

—

**

**

—

(49)

**

Non-interest expense(14)(15)

123

113

97

89

117

9

5

%

422

679

(38)

Loss from continuing operations before income taxes

(51)

(124)

(131)

(61)

(122)

(59)

(58)

(367)

(241)

52

Income tax benefit

(78)

(60)

(109)

(106)

(340)

30

(77)

(353)

(469)

(25)

Income (loss) from continuing operations, net of tax

$

27

$

(64)

$

(22)

$

45

$

218

**

(88)

$

(14)

$

228

**

Selected performance metrics:



















Period-end deposits

$

17,464

$

19,802

$

18,554

$

18,420

$

21,677

(12)

(19)

$

17,464

$

21,677

(19)

Average deposits

18,223

19,456

18,106

19,522

20,635

(6)

(12)

18,824

21,889

(14)

Total



















Earnings:



















Net interest income

$

6,066

$

5,737

$

5,746

$

5,791

$

5,820

6

%

4

%

$

23,340

$

22,875

2

%

Non-interest income

1,361

1,222

1,378

1,292

1,193

11

14

5,253

5,201

1

Total net revenue

7,427

6,959

7,124

7,083

7,013

7

6

28,593

28,076

2

Provision for credit losses

1,818

1,383

1,342

1,693

1,638

31

11

6,236

5,856

6

Non-interest expense

4,161

3,872

3,779

3,671

4,132

7

1

15,483

14,902

4

Income from continuing operations before income taxes

1,448

1,704

2,003

1,719

1,243

(15)

16

6,874

7,318

(6)

Income tax provision (benefit)

270

375

387

309

(21)

(28)

**

1,341

1,293

4

Income from continuing operations, net of tax

$

1,178

$

1,329

$

1,616

$

1,410

$

1,264

(11)

(7)

$

5,533

$

6,025

(8)

Selected performance metrics:



















Period-end loans held for investment

$

265,809

$

249,355

$

244,460

$

240,273

$

245,899

7

8

$

265,809

$

245,899

8

Average loans held for investment

258,870

246,147

242,653

241,959

241,371

5

7

247,450

242,118

2

Period-end deposits

262,697

257,148

254,535

255,107

249,764

2

5

262,697

249,764

5

Average deposits

260,040

255,082

253,634

251,410

247,663

2

5

255,065

247,117

3

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)

(1)

In 2018, we sold all of our consumer home loan portfolio and recognized a net gain of approximately $499 million in the Other category, including a benefit for credit losses of $46 million.

(2)

On October 11, 2019, we completed the acquisition of the existing portfolio of Walmart's cobrand and private label credit card receivables. This acquisition reduced the domestic credit card net charge-off rates by 29 basis points for the fourth quarter and 8 basis points for the year ended December 31, 2019, and increased the domestic credit card 30+ day performing delinquency rate by 17 basis points as of December 31, 2019.

(3)

Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.

(4)

Nonperforming assets consist of nonperforming loans, repossessed assets and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, repossessed assets and other foreclosed assets.

(5)

Represents foreign currency translation adjustments.

(6)

Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.

(7)

In the first quarter of 2019, we made a change in how revenue is measured in our Commercial Banking business by revising the allocation of tax benefits on certain tax-advantaged investments. As such, prior period results have been recast to conform with the current period presentation. The result of this measurement change reduced the previously reported total net revenue in our Commercial Banking business by $20 million and $108 million for the fourth quarter and year ended December 31, 2018, with an offsetting increase in the Other category.

(8)

Average yield on loans held for investment is calculated based on annualized interest income for the period divided by average loans held for investment during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and does not include any allocations, such as funds transfer pricing.

(9)

Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the respective loan category.

(10)

Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.

(11)

Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.

(12)

Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.

(13)

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

(14)

Includes charges incurred as a result of restructuring activities.

(15)

Includes $16 million of net Cybersecurity Incident expenses in Q4 2019, consisting of $23 million of expenses and $7 million of insurance recoveries; and $22 million of net Cybersecurity Incident expenses in Q3 2019, consisting of $49 million of expenses and $27 million of insurance recoveries.

**

Not meaningful.

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures(1)



Basel III Standardized Approach

(Dollars in millions, except as noted)

December 31,
2019

September 30,
2019

June 30,
2019

March 31,
2019

December 31,
2018

Regulatory Capital Metrics









Common equity excluding AOCI

$

52,001

$

51,959

$

51,236

$

49,781

$

48,570

Adjustments:









AOCI(2)

1,156

453

170

(660)

(1,263)

Goodwill, net of related deferred tax liabilities

(14,465)

(14,439)

(14,365)

(14,369)

(14,373)

Intangible assets, net of related deferred tax liabilities

(170)

(180)

(194)

(223)

(254)

Other

(360)

(588)

(401)

113

391

Common equity Tier 1 capital

$

38,162

$

37,205

$

36,446

$

34,642

$

33,071

Tier 1 capital

$

43,015

$

43,028

$

40,806

$

39,002

$

37,431

Total capital(3)

50,350

50,174

47,919

46,042

44,645

Risk-weighted assets

313,308

298,130

295,255

291,483

294,950

Adjusted average assets(4)

368,511

360,266

356,518

355,781

350,606

Capital Ratios









Common equity Tier 1 capital(5)

12.2

%

12.5

%

12.3

%

11.9

%

11.2

%

Tier 1 capital(6)

13.7

14.4

13.8

13.4

12.7

Total capital(7)

16.1

16.8

16.2

15.8

15.1

Tier 1 leverage(4)

11.7

11.9

11.4

11.0

10.7

Tangible common equity ("TCE")(8)

10.2

10.3

10.2

9.6

9.1

 

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results. These adjusted results provide alternate measurements of our operating performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.



Three Months Ended

Nine Months Ended

Year Ended


December 31, 2019

September 30, 2019

December 31, 2019

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

Reported
Results

Adj.(9)

Adjusted
Results

Reported
Results

Adj.(9)

Adjusted
Results

Reported
Results

Adj.(9)

Adjusted
Results

Selected income statement data:

















Net interest income

$

6,066

—

$

6,066

$

17,274

$

67

$

17,341

$

23,340

$

67

$

23,407

Non-interest income

1,361

—

1,361

3,892

74

3,966

5,253

74

5,327

Total net revenue

7,427

—

7,427

21,166

141

21,307

28,593

141

28,734

Provision for credit losses

1,818

$

(84)

1,734

4,418

—

4,418

6,236

(84)

6,152

Non-interest expense

4,161

(64)

4,097

11,322

(284)

11,038

15,483

(348)

15,135

Income from continuing operations before income taxes

1,448

148

1,596

5,426

425

5,851

6,874

573

7,447

Income tax provision

270

35

305

1,071

46

1,117

1,341

81

1,422

Income from continuing operations, net of tax

1,178

113

1,291

4,355

379

4,734

5,533

492

6,025

Income (loss) from discontinued operations, net of tax

(2)

—

(2)

15

—

15

13

—

13

Net income

1,176

113

1,289

4,370

379

4,749

5,546

492

6,038

Dividends and undistributed earnings allocated to participating securities(11)

(7)

(1)

(8)

(34)

(3)

(37)

(41)

(3)

(44)

Preferred stock dividends

(97)

—

(97)

(185)

—

(185)

(282)

—

(282)

Issuance cost for redeemed preferred stock

(31)

—

(31)

—

—

—

(31)

—

(31)

Net income available to common stockholders

$

1,041

$

112

$

1,153

$

4,151

$

376

$

4,527

$

5,192

$

489

$

5,681

Selected performance metrics:

















Diluted EPS(11)

$

2.25

$

0.24

$

2.49

$

8.79

$

0.80

$

9.59

$

11.05

$

1.04

$

12.09

Efficiency ratio

56.03

%

(87)

bps

55.16

%

53.49

%

(169)

bps

51.80

%

54.15

%

(148)

bps

52.67

%

Operating efficiency ratio

46.47

(87)

45.60

46.10

(164)

44.46

46.20

(144)

44.76






























Three Months Ended

Nine Months Ended

Year Ended


December 31, 2018

September 30, 2018

December 31, 2018

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

Reported
Results

Adj.(10)

Adjusted
Results

Reported
Results

Adj.(10)

Adjusted
Results

Reported
Results

Adj.(10)

Adjusted
Results

Selected income statement data:

















Net interest income

$

5,820

$

6

$

5,826

$

17,055

$

26

$

17,081

$

22,875

$

32

$

22,907

Non-interest income

1,193

(64)

1,129

4,008

(514)

3,494

5,201

(578)

4,623

Total net revenue

7,013

(58)

6,955

21,063

(488)

20,575

28,076

(546)

27,530

Provision for credit losses

1,638

—

1,638

4,218

48

4,266

5,856

48

5,904

Non-interest expense

4,132

(34)

4,098

10,770

(248)

10,522

14,902

(282)

14,620

Income from continuing operations before income taxes

1,243

(24)

1,219

6,075

(288)

5,787

7,318

(312)

7,006

Income tax provision (benefit)

(21)

266

245

1,314

(121)

1,193

1,293

145

1,438

Income from continuing operations, net of tax

1,264

(290)

974

4,761

(167)

4,594

6,025

(457)

5,568

Income (loss) from discontinued operations, net of tax

(3)

—

(3)

(7)

—

(7)

(10)

—

(10)

Net income

1,261

(290)

971

4,754

(167)

4,587

6,015

(457)

5,558

Dividends and undistributed earnings allocated to participating securities(11)

(9)

2

(7)

(32)

1

(31)

(40)

3

(37)

Preferred stock dividends

(80)

—

(80)

(185)

—

(185)

(265)

—

(265)

Net income available to common stockholders

$

1,172

$

(288)

$

884

$

4,537

$

(166)

$

4,371

$

5,710

$

(454)

$

5,256

Selected performance metrics:

















Diluted EPS(11)

$

2.48

$

(0.61)

$

1.87

$

9.32

$

(0.34)

$

8.98

$

11.82

$

(0.94)

$

10.88

Efficiency ratio

58.92

%

—

58.92

%

51.13

%

1

bps

51.14

%

53.08

%

3

bps

53.11

%

Operating efficiency ratio

47.07

(10)

bps

46.97

44.76

(15)

44.61

45.33

(12)

45.21

 

 

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of TCE, tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. While our non-GAAP 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. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.



2019

2019

2019

2018

2018

(Dollars in millions)

Q4

Q3

Q2

Q1

Q4

Tangible Common Equity (Period-End)









Stockholders' equity

$

58,011

$

58,235

$

55,767

$

53,481

$

51,668

Goodwill and intangible assets(12)

(14,932)

(14,940)

(14,886)

(14,904)

(14,941)

Noncumulative perpetual preferred stock

(4,853)

(5,823)

(4,360)

(4,360)

(4,360)

Tangible common equity

$

38,226

$

37,472

$

36,521

$

34,217

$

32,367

Tangible Common Equity (Average)









Stockholders' equity

$

58,148

$

57,245

$

54,570

$

52,720

$

51,114

Goodwill and intangible assets(12)

(14,967)

(14,908)

(14,900)

(14,932)

(14,953)

Noncumulative perpetual preferred stock

(5,506)

(4,678)

(4,360)

(4,360)

(4,360)

Tangible common equity

$

37,675

$

37,659

$

35,310

$

33,428

$

31,801

Tangible Assets (Period-End)









Total assets

$

390,365

$

378,810

$

373,619

$

373,191

$

372,538

Goodwill and intangible assets(12)

(14,932)

(14,940)

(14,886)

(14,904)

(14,941)

Tangible assets

$

375,433

$

363,870

$

358,733

$

358,287

$

357,597

Tangible Assets (Average)









Total assets

$

383,162

$

374,905

$

371,095

$

370,394

$

365,243

Goodwill and intangible assets(12)

(14,967)

(14,908)

(14,900)

(14,932)

(14,953)

Tangible assets

$

368,195

$

359,997

$

356,195

$

355,462

$

350,290

__________

(1)     Regulatory capital metrics and capital ratios as of December 31, 2019 are preliminary and therefore subject to change.


















(2)     Amounts presented are net of tax.

(3)     Total capital equals the sum of Tier 1 capital and Tier 2 capital.

(4)     Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that are deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 
          leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.

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

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

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

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

(9)     The adjustments in 2019 consist of:

 

Three Months Ended

Nine Months Ended

Year Ended

(Dollars in millions)

December 31, 2019

September 30, 2019

December 31, 2019

Initial allowance build on acquired Walmart portfolio

$

84

—

$

84

Walmart launch and related integration expenses

48

$

163

211

Cybersecurity Incident expenses, net of insurance

16

22

38

U.K. Payment Protection Insurance customer refund reserve build ("U.K. PPI Reserve")

—

212

212

Restructuring charges

—

28

28

Total

148

425

573

Income tax provision

35

46

81

Net income

$

113

$

379

$

492

(10)   The adjustments in 2018 consist of:



Three Months Ended

Nine Months Ended

Year Ended

(Dollars in millions)

December 31, 2018

September 30, 2018

December 31, 2018

Net gains on the sales of exited businesses

$

(74)

$

(541)

$

(615)

Benefit as a result of tax methodology change on rewards costs

(284)

—

(284)

Legal reserve build

—

170

170

U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve")

50

49

99

Restructuring charges

—

34

34

Total

(308)

(288)

(596)

Income tax provision

18

121

139

Net income

$

(290)

$

(167)

$

(457)

(11)     Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total.

(12)     Includes impact of related deferred taxes.

 

Cision View original content:http://www.prnewswire.com/news-releases/capital-one-reports-fourth-quarter-2019-net-income-of-1-2-billion-or-2-25-per-share-300990655.html

SOURCE Capital One Financial Corporation

Investor Relations: Jeff Norris, 703.720.2455; Danielle Dietz, 703.720.2455; Media Relations: Sie Soheili, 703.720.3929; Tatiana Stead, 703.720.2352