Breadcrumb

Home Page > About Capital One > Investor Relations > Capital One Reports Second Quarter 2015 Net Income of $863 million, or $1.50 per share

Release Details

Capital One Reports Second Quarter 2015 Net Income of $863 million, or $1.50 per share

July 23, 2015 at 4:06 PM EDT
EPS from Continuing Operations of $1.48; EPS excluding Adjusting Items of $1.78

MCLEAN, Va., July 23, 2015 /PRNewswire/ --  Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2015 of $863 million, or $1.50 per diluted common share, compared to the first quarter of 2015 with net income of $1.2 billion, or $2.00 per diluted common share, and the second quarter of 2014 with net income of $1.2 billion, or $2.04 per diluted common share. Net income for the second quarter of 2015, adjusted for the impact of restructuring charges of $147 million and a build in the U.K. PPI reserve of $78 million, was $1.0 billion or $1.78 per diluted common share.

"Capital One continues to deliver attractive risk-adjusted returns today and invest to sustain growth and returns over the long term," said Richard D. Fairbank, Chair and Chief Executive Officer. "We remain compelled by the opportunity, need, and urgency of digital transformation, and we continue to see growth opportunities across our businesses, particularly in Domestic Card. Capital One is well positioned to sustain attractive shareholder returns over the long term."

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

Second Quarter 2015 Income Statement Summary:

  • Total net revenue remained flat at $5.7 billion, including ($37) million of contra-revenue from a build in the U.K. PPI reserve.
  • Total non-interest expense increased 8 percent to $3.3 billion:
    • 3 percent increase in marketing.
    • 10 percent increase in operating expense, including $147 million in restructuring charges and a build of $41 million in the U.K. PPI reserve.
  • Pre-provision earnings decreased 9 percent to $2.4 billion.
  • Provision for credit losses increased 21 percent to $1.1 billion.
  • Mortgage representation & warranty benefit of $36 million, including $27 million ($17 million net of tax) in discontinued operations.
  • Efficiency ratio of 58.30 percent; Efficiency ratio excluding restructuring charges and a build in the U.K. PPI reserve of 54.63 percent.

Second Quarter 2015 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.1 percent at June 30, 2015.
  • Net interest margin of 6.56 percent, down 1 basis points; Net interest margin excluding the contra-revenue impact of the build in the U.K. PPI reserve of 6.58 percent.
  • Period-end loans held for investment in the quarter increased $5.7 billion, or 3 percent, to $209.7 billion.
    • Domestic Card period-end loans increased $4.9 billion, or 7 percent, to $79.0 billion.
    • Consumer Banking period-end loans decreased $203 million, or less than 1 percent, to $71.2 billion:
      • Auto period-end loans increased $1.1 billion, or 3 percent, to $40.0 billion.
      • Home loans period-end loans decreased $1.3 billion, or 5 percent, to $27.6 billion, driven by run-off of acquired portfolios.
    • Commercial Banking period-end loans increased $490 million, or less than 1 percent, to $51.2 billion.
  • Average loans held for investment in the quarter increased $1.1 billion, or less than 1 percent, to $206.3 billion.
    • Domestic Card average loans increased $1.2 billion, or 2 percent, to $75.9 billion.
    • Consumer Banking average loans decreased $74 million, or less than 1 percent, to $71.4 billion:
      • Auto average loans increased $1.2 billion, or 3 percent, to $39.5 billion.
      • Home loans average loans decreased by $1.2 billion, or 4 percent, to $28.3 billion, driven by run-off of acquired portfolios.
    • Commercial Banking average loans decreased $94 million, or less than 1 percent, to $51.0 billion.
  • Period-end total deposits decreased $1.7 billion, or less than 1 percent, to $208.8 billion, while average deposits increased $1.3 billion to $209.1 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 July 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 August 3, 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 $208.8 billion in deposits and $310.5 billion in total assets as of June 30, 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

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

8


Table 6:

Average Balances, Net Interest Income and Net Interest Margin

10


Table 7:

Loan Information and Performance Statistics

11

Business Segment Results



Table 8:

Financial Summary—Business Segment Results

13


Table 9:

Financial & Statistical Summary—Credit Card Business

14


Table 10:

Financial & Statistical Summary—Consumer Banking Business

16


Table 11:

Financial & Statistical Summary—Commercial Banking Business

17


Table 12:

Financial & Statistical Summary—Other and Total

18


Table 13:

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

19

Other



Table 14:

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

20





__________


(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2015 once it is filed with the Securities and Exchange Commission.


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated(1) 


















































2015 Q2 vs.


Six Months Ended June 30,

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


2015
Q2


2015
Q1


2014
Q4


2014
Q3


2014
Q2


2015
Q1


2014
Q2


2015


2014


2015 vs.
2014

Income Statement





















Net interest income


$

4,537



$

4,576



$

4,656



$

4,497



$

4,315



(1)%



5%


$

9,113



$

8,665



5%

Non-interest income(2)


1,135



1,071



1,157



1,142



1,153



6



(2)


2,206



2,173



2

Total net revenue(3)


5,672



5,647



5,813



5,639



5,468





4


11,319



10,838



4

Provision for credit losses


1,129



935



1,109



993



704



21



60


2,064



1,439



43

Non-interest expense:





















     Marketing


387



375



509



392



335



3



16


762



660



15

     Amortization of intangibles


111



110



123



130



136



1



(18)


221



279



(21)

     Operating expenses(4)


2,809



2,564



2,652



2,463



2,508



10



12


5,373



4,972



8

Total non-interest expense


3,307



3,049



3,284



2,985



2,979



8



11


6,356



5,911



8

Income from continuing operations before income taxes


1,236



1,663



1,420



1,661



1,785



(26)



(31)


2,899



3,488



(17)

Income tax provision


384



529



450



536



581



(27)



(34)


913



1,160



(21)

Income from continuing operations, net of tax


852



1,134



970



1,125



1,204



(25)



(29)


1,986



2,328



(15)

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


11



19



29



(44)



(10)



(42)



**


30



20



50

Net income


863



1,153



999



1,081



1,194



(25)



(28)


2,016



2,348



(14)

Dividends and undistributed earnings allocated to participating securities(5)


(4)



(6)



(4)



(5)



(4)



(33)




(10)



(9)



11

Preferred stock dividends(5)


(29)



(32)



(21)



(20)



(13)



(9)



123


(61)



(26)



135

Net income available to common stockholders


$

830



$

1,115



$

974



$

1,056



$

1,177



(26)



(29)


$

1,945



$

2,313



(16)

Common Share Statistics





















Basic earnings per common share:(5)





















     Net income from continuing operations


$

1.50



$

2.00



$

1.71



$

1.97



$

2.09



(25)%



(28)%


$

3.49



$

4.03



(13)%

     Income (loss) from discontinued operations


0.02



0.03



0.05



(0.08)



(0.02)



(33)



**


0.06



0.03



100

     Net income per basic common share


$

1.52



$

2.03



$

1.76



$

1.89



$

2.07



(25)



(27)


$

3.55



$

4.06



(13)

Diluted earnings per common share:(5)





















     Net income from continuing operations


$

1.48



$

1.97



$

1.68



$

1.94



$

2.06



(25)



(28)


$

3.45



$

3.97



(13)

     Income (loss) from discontinued operations


0.02



0.03



0.05



(0.08)



(0.02)



(33)



**


0.06



0.03



100

     Net income per diluted common share(6)


$

1.50



$

2.00



$

1.73



$

1.86



$

2.04



(25)



(26)


$

3.51



$

4.00



(12)

Weighted-average common shares outstanding (in millions):





















     Basic


545.6



550.2



554.3



559.9



567.5



(1)



(4)


548.0



569.2



(4)

     Diluted


552.0



557.2



561.8



567.9



577.6



(1)



(4)


554.7



578.9



(4)

Common shares outstanding (period end, in millions)


542.5



548.0



553.4



558.5



561.8



(1)



(3)


542.5



561.8



(3)

Dividends paid per common share


$

0.40



$

0.30



$

0.30



$

0.30



$

0.30



33



33


$

0.70



$

0.60



17

Tangible book value per common share (period end)(7)


52.74



52.19



50.32



48.72



47.90



1



10


52.74



47.90



10





















2015 Q2 vs.


Six Months Ended June 30,

(Dollars in millions) (unaudited)


2015
Q2


2015
Q1


2014
Q4


2014
Q3


2014
Q2


2015
Q1


2014
Q2


2015


2014


2015 vs.
2014

Balance Sheet (Period End)





















Loans held for investment(8)


$

209,705



$

203,978



$

208,316



$

201,592



$

198,528



3%



6%


$

209,705



$

198,528



6%

Interest-earning assets


280,137



275,837



277,849



270,001



266,720



2



5


280,137



266,720



5

Total assets


310,510



306,224



308,167



299,640



297,434



1



4


310,510



297,434



4

Interest-bearing deposits


183,657



185,208



180,467



178,876



180,970



(1)



1


183,657



180,970



1

Total deposits


208,780



210,440



205,548



204,264



205,890



(1)



1


208,780



205,890



1

Borrowings


45,766



41,029



48,457



42,243



39,114



12



17


45,766



39,114



17

Common equity


43,849



43,908



43,231



42,682



42,477





3


43,849



42,477



3

Total stockholders' equity


46,659



45,730



45,053



44,018



43,815



2



6


46,659



43,815



6

Balance Sheet (Average Balances)





















Loans held for investment(8)


$

206,337



$

205,194



$

203,436



$

199,422



$

194,996



1%



6%


$

205,768



$

194,362



6%

Interest-earning assets


276,585



278,427



273,436



268,890



263,570



(1)



5


277,501



263,119



5

Total assets


307,206



309,401



304,153



298,913



294,089



(1)



4


308,295



293,798



5

Interest-bearing deposits


183,946



182,998



179,401



179,928



182,053



1



1


183,475



182,431



1

Total deposits


209,143



207,851



205,355



205,199



206,315



1



1


208,501



206,080



1

Borrowings


41,650



46,082



43,479



40,314



35,658



(10)



17


43,854



35,817



22

Common equity


44,878



44,575



43,895



43,489



42,797



1



5


44,727



42,408



5

Total stockholders' equity


47,255



46,397



45,576



44,827



43,767



2



8


46,828



43,320



8




























































 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated(1) 




















































2015 Q2 vs.


Six Months Ended June 30,

(Dollars in millions except as noted) (unaudited)


2015
Q2


2015
Q1


2014
Q4


2014
Q3


2014
Q2


2015
Q1


2014
Q2


2015


2014


2015 vs.
2014

Performance Metrics





















Net interest income growth (quarter over quarter)


(1)%



(2)%



4%



4%



(1)%



**



**



5%



(5)%



**


Non-interest income growth (quarter over quarter)


6



(7)



1



(1)



13



**



**



2



5



**


Total net revenue growth (quarter over quarter)




(3)



3



3



2



**



**



4



(3)



**


Total net revenue margin(9)


8.20



8.11



8.50



8.39



8.30



9

bps


(10)

bps


8.16



8.24



(8)

bps

Net interest margin(10)


6.56



6.57



6.81



6.69



6.55



(1)



1



6.57



6.59



(2)


Return on average assets


1.11



1.47



1.28



1.51



1.64



(36)



(53)



1.29



1.58



(29)


Return on average tangible assets(11)


1.17



1.54



1.34



1.59



1.73



(37)



(56)



1.36



1.67



(31)


Return on average common equity(12)


7.30



9.84



8.61



10.12



11.09



(254)



(379)



8.56



10.81



(225)


Return on average tangible common equity(13)


11.06



15.00



13.28



15.73



17.47



(394)



(641)



13.01



17.15



(414)


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


6.41



5.94



6.46



5.99



6.11



47



30



6.18



6.08



10


Efficiency ratio(14)


58.30



53.99



56.49



52.93



54.48



431



382



56.15



54.54



161


Effective income tax rate for continuing operations


31.1



31.8



31.7



32.3



32.5



(70)



(140)



31.5



33.3



(180)


Employees (in thousands), period end


47.5



47.0



46.0



44.9



44.6



1%



7%



47.5



44.6



7%


Credit Quality Metrics(8)





















Allowance for loan and lease losses


$

4,676



$

4,405



$

4,383



$

4,212



$

3,998



6%



17%



$

4,676



$

3,998



17%


Allowance as a percentage of loans held for investment


2.23%



2.16%



2.10%



2.09%



2.01%



7

bps


22

bps


2.23%



2.01%



22

bps

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


2.46



2.41



2.36



2.37



2.30



5



16



2.46



2.30



16


Net charge-offs


$

846



$

881



$

915



$

756



$

812



(4)%



4%



$

1,727



$

1,743



(1)%


Net charge-off rate(15)


1.64%



1.72%



1.80%



1.52%



1.67%



(8)

bps


(3)

bps


1.68%



1.79%



(11)

bps

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


1.83



1.93



2.04



1.73



1.93



(10)



(10)



1.88



2.08



(20)


30+ day performing delinquency rate


2.33



2.32



2.62



2.46



2.24



1



9



2.33



2.24



9


30+ day performing delinquency rate (excluding acquired loans)


2.59



2.61



2.95



2.81



2.58



(2)



1



2.59



2.58



1


30+ day delinquency rate


2.65



2.58



2.91



2.76



2.53



7



12



2.65



2.53



12


30+ day delinquency rate (excluding acquired loans)


2.94



2.90



3.28



3.14



2.91



4



3



2.94



2.91



3


Capital Ratios(16)





















Common equity Tier 1 capital ratio 


12.1%



12.5%



12.5%



12.7%



12.7%



(40)

bps


(60)

bps


12.1%



12.7%



(60)

bps

Tier 1 risk-based capital ratio


13.3



13.2



13.2



13.3



13.3



10





13.3



13.3




Total risk-based capital ratio


15.1



15.1



15.1



15.2



15.4





(30)



15.1



15.4



(30)


Tier 1 leverage ratio


11.1



10.7



10.8



10.6



10.7



40



40



11.1



10.7



40


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


9.7



9.8



9.5



9.6



9.5



(10)



20



9.7



9.5



20

































































 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income


































Three Months Ended


2015 Q2 vs.


Six Months Ended June 30,

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


2015
Q2


2015
Q1


2014
Q2


2015
Q1


2014
Q2


2015


2014


2015 vs.
2014

Interest income:

















     Loans, including loans held for sale


$

4,531



$

4,540



$

4,279





6%



$

9,071



$

8,586



6%


     Investment securities


382



406



409



(6)%



(7)



788



825



(4)


     Other


24



28



24



(14)





52



54



(4)


Total interest income


4,937



4,974



4,712



(1)



5



9,911



9,465



5


Interest expense:

















     Deposits


272



271



272







543



548



(1)


     Securitized debt obligations


36



33



39



9



(8)



69



77



(10)


     Senior and subordinated notes


80



79



78



1



3



159



155



3


     Other borrowings


12



15



8



(20)



50



27



20



35


Total interest expense


400



398



397



1



1



798



800




Net interest income


4,537



4,576



4,315



(1)



5



9,113



8,665



5


     Provision for credit losses


1,129



935



704



21



60



2,064



1,439



43


Net interest income after provision for credit losses


3,408



3,641



3,611



(6)



(6)



7,049



7,226



(2)


Non-interest income:(2)

















     Service charges and other customer-related fees


429



437



460



(2)



(7)



866



934



(7)


     Interchange fees, net


567



496



535



14



6



1,063



975



9


     Net other-than-temporary impairment recognized in earnings


(7)



(15)



(1)



(53)



600



(22)



(6)



267


     Other


146



153



159



(5)



(8)



299



270



11


Total non-interest income


1,135



1,071



1,153



6



(2)



2,206



2,173



2


Non-interest expense:

















     Salaries and associate benefits


1,360



1,211



1,125



12



21



2,571



2,286



12


     Occupancy and equipment


439



435



447



1



(2)



874



852



3


     Marketing


387



375



335



3



16



762



660



15


     Professional services


334



296



296



13



13



630



583



8


     Communications and data processing


208



202



203



3



2



410



399



3


     Amortization of intangibles


111



110



136



1



(18)



221



279



(21)


     Other


468



420



437



11



7



888



852



4


Total non-interest expense


3,307



3,049



2,979



8



11



6,356



5,911



8


Income from continuing operations before income taxes


1,236



1,663



1,785



(26)



(31)



2,899



3,488



(17)


Income tax provision


384



529



581



(27)



(34)



913



1,160



(21)


Income from continuing operations, net of tax


852



1,134



1,204



(25)



(29)



1,986



2,328



(15)


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


11



19



(10)



(42)



   **



30



20



50


Net income


863



1,153



1,194



(25)



(28)



2,016



2,348



(14)


Dividends and undistributed earnings allocated to participating securities(5)


(4)



(6)



(4)



(33)





(10)



(9)



11


Preferred stock dividends(5)


(29)



(32)



(13)



(9)



123



(61)



(26)



135


Net income available to common stockholders


$

830



$

1,115



$

1,177



(26)



(29)



$

1,945



$

2,313



(16)



















































Three Months Ended


2015 Q2 vs.


Six Months Ended June 30,

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


2015
Q2


2015
Q1


2014
Q2


2015
Q1


2014
Q2


2015


2014


2015 vs.
2014

Basic earnings per common share:(5)

















Net income from continuing operations


$

1.50



$

2.00



$

2.09



(25)%



(28)%



$

3.49



$

4.03



(13)%


Income (loss) from discontinued operations


0.02



0.03