Capital One Reports Third Quarter 2015 Net Income of $1.1 billion, or $1.98 per share

MCLEAN, Va., Oct. 22, 2015 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2015 of $1.1 billion, or $1.98 per diluted common share, compared to the second quarter of 2015 with net income of $863 million, or $1.50 per diluted common share, and the third quarter of 2014 with net income of $1.1 billion, or $1.86 per diluted common share. Net income for the third quarter of 2015, adjusted for the impact of a build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve") of $69 million, was $1.2 billion or $2.10 per diluted common share.

"Capital One posted solid results in the third quarter, highlighted once again by strong growth in our Domestic Card business," said Richard D. Fairbank, Chair and Chief Executive Officer. "Capital One continues to deliver attractive risk-adjusted returns today while investing to sustain growth and returns over the long-term."

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

Third Quarter 2015 Income Statement Summary:

  • Total net revenue increased 4 percent to $5.9 billion, including ($49) million of contra-revenue from a build in the U.K. PPI Reserve, compared to ($37) million contra-revenue in the second quarter of 2015.
  • Total non-interest expense decreased 4 percent to $3.2 billion:
    • 8 percent increase in marketing.
    • 6 percent decrease in operating expense, including $20 million build in the U.K. PPI Reserve, compared to $147 million in restructuring charges and a build of $41 million in the U.K. PPI Reserve in the second quarter of 2015.
  • Pre-provision earnings increased 16 percent to $2.7 billion.
  • Provision for credit losses decreased 3 percent to $1.1 billion.
  • Efficiency ratio of 53.56 percent; Efficiency ratio excluding build in the U.K. PPI Reserve of 52.78 percent.

Third Quarter 2015 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.1 percent at September 30, 2015.
  • Net interest margin of 6.73 percent, up 17 basis points; Net interest margin excluding the contra-revenue impact of the build in the U.K. PPI Reserve of 6.75 percent.
  • Period-end loans held for investment in the quarter increased $3.6 billion, or 2 percent, to $213.3 billion.
    • Domestic Card period-end loans increased $3.2 billion, or 4 percent, to $82.2 billion.
    • Consumer Banking period-end loans decreased $186 million, or less than 1 percent, to $71.0 billion:
      • Auto period-end loans increased $1.1 billion, or 3 percent, to $41.1 billion.
      • Home loans period-end loans decreased $1.3 billion, or 5 percent, to $26.3 billion, driven by run-off of acquired portfolios.
    • Commercial Banking period-end loans increased $881 million, or 2 percent, to $52.1 billion.
  • Average loans held for investment in the quarter increased $4.9 billion, or 2 percent, to $211.2 billion.
    • Domestic Card average loans increased $4.5 billion, or 6 percent, to $80.4 billion.
    • Consumer Banking average loans decreased $270 million, or less than 1 percent, to $71.1 billion:
      • Auto average loans increased $1.0 billion, or 3 percent, to $40.6 billion.
      • Home loans average loans decreased by $1.3 billion, or 5 percent, to $26.9 billion, driven by run-off of acquired portfolios.
    • Commercial Banking average loans increased $616 million, or 1 percent, to $51.6 billion.
  • Period-end total deposits increased $4.1 billion, or 2 percent, to $212.9 billion, while average deposits increased $1.8 billion to $211.0 billion.
  • Interest-bearing deposit rate decreased by 1 basis point to 0.58 percent.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on October 22, 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 November 2, 2015 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, 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 $212.9 billion in deposits and $313.7 billion in total assets as of September 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

Third 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 September 30, 2015 once it is filed with the Securities and Exchange Commission.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated(1) 



















































2015 Q3 vs.

Nine Months Ended September 30,

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

2015

2015

2015

2014

2014

2015

2014




2015 vs.

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2015

2014

2014

Income Statement



















Net interest income

$

4,760

$

4,537

$

4,576

$

4,656

$

4,497

5%

6%

$

13,873

$

13,162

5%

Non-interest income

1,140

1,135

1,071

1,157

1,142

—

—

3,346

3,315

1

Total net revenue(2)

5,900

5,672

5,647

5,813

5,639

4

5

17,219

16,477

5

Provision for credit losses

1,092

1,129

935

1,109

993

(3)

10

3,156

2,432

30

Non-interest expense:



















Marketing

418

387

375

509

392

8

7

1,180

1,052

12

Amortization of intangibles

106

111

110

123

130

(5)

(18)

327

409

(20)

Operating expenses

2,636

2,809

2,564

2,652

2,463

(6)

7

8,009

7,435

8

Total non-interest expense

3,160

3,307

3,049

3,284

2,985

(4)

6

9,516

8,896

7

Income from continuing operations before income taxes

1,648

1,236

1,663

1,420

1,661

33

(1)

4,547

5,149

(12)

Income tax provision

530

384

529

450

536

38

(1)

1,443

1,696

(15)

Income from continuing operations, net of tax

1,118

852

1,134

970

1,125

31

(1)

3,104

3,453

(10)

(Loss) income from discontinued operations, net of tax(3)

(4)

11

19

29

(44)

**

(91)

26

(24)

**

Net income

1,114

863

1,153

999

1,081

29

3

3,130

3,429

(9)

Dividends and undistributed earnings allocated to participating securities(4)

(6)

(4)

(6)

(4)

(5)

50

20

(16)

(14)

14

Preferred stock dividends(4)

(29)

(29)

(32)

(21)

(20)

—

45

(90)

(46)

96

Net income available to common stockholders

$

1,079

$

830

$

1,115

$

974

$

1,056

30

2

$

3,024

$

3,369

(10)

Common Share Statistics



















Basic earnings per common share:(4)



















Net income from continuing operations

$

2.01

$

1.50

$

2.00

$

1.71

$

1.97

34%

2%

$

5.49

$

5.99

(8)%

(Loss) income from discontinued operations

(0.01)

0.02

0.03

0.05

(0.08)

**

(88)

0.05

(0.04)

**

Net income per basic common share

$

2.00

$

1.52

$

2.03

$

1.76

$

1.89

32

6

$

5.54

$

5.95

(7)

Diluted earnings per common share:(4)



















Net income from continuing operations

$

1.99

$

1.48

$

1.97

$

1.68

$

1.94

34

3

$

5.43

$

5.90

(8)

(Loss) income from discontinued operations

(0.01)

0.02

0.03

0.05

(0.08)

**

(88)

0.05

(0.04)

**

Net income per diluted common share(5)

$

1.98

$

1.50

$

2.00

$

1.73

$

1.86

32

6

$

5.48

$

5.86

(6)

Weighted-average common shares outstanding (in millions):



















Basic

540.6

545.6

550.2

554.3

559.9

(1)

(3)

545.5

566.1

(4)

Diluted

546.3

552.0

557.2

561.8

567.9

(1)

(4)

551.9

575.2

(4)

Common shares outstanding (period end, in millions)

534.9

542.5

548.0

553.4

558.5

(1)

(4)

534.9

558.5

(4)

Dividends paid per common share

$

0.40

$

0.40

$

0.30

$

0.30

$

0.30

—

33

$

1.10

$

0.90

22

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

54.66

52.74

52.19

50.32

48.72

4

12

54.66

48.72

12

 

 
















































2015 Q3 vs.

Nine Months Ended September 30,

(Dollars in millions) (unaudited)

2015

2015

2015

2014

2014

2015

2014




2015 vs.

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2015

2014

2014

Balance Sheet (Period End)



















Loans held for investment(7)

$

213,329

$

209,705

$

203,978

$

208,316

$

201,592

2%

6%

$

213,329

$

201,592

6%

Interest-earning assets

283,073

280,137

275,837

277,849

270,001

1

5

283,073

270,001

5

Total assets

313,700

310,510

306,224

308,167

299,640

1

5

313,700

299,640

5

Interest-bearing deposits

187,848

183,657

185,208

180,467

178,876

2

5

187,848

178,876

5

Total deposits

212,903

208,780

210,440

205,548

204,264

2

4

212,903

204,264

4

Borrowings

42,778

45,766

41,029

48,457

42,243

(7)

1

42,778

42,243

1

Common equity

44,391

43,849

43,908

43,231

42,682

1

4

44,391

42,682

4

Total stockholders' equity

47,685

46,659

45,730

45,053

44,018

2

8

47,685

44,018

8

Balance Sheet (Average Balances)



















Loans held for investment(7)

$

211,227

$

206,337

$

205,194

$

203,436

$

199,422

2%

6%

$

207,608

$

196,068

6%

Interest-earning assets

283,082

276,585

278,427

273,436

268,890

2

5

279,388

265,065

5

Total assets

313,822

307,206

309,401

304,153

298,913

2

5

310,146

295,506

5

Interest-bearing deposits

185,800

183,946

182,998

179,401

179,928

1

3

184,258

181,587

1

Total deposits

210,974

209,143

207,851

205,355

205,199

1

3

209,334

205,783

2

Borrowings

45,070

41,650

46,082

43,479

40,314

8

12

44,264

37,332

19

Common equity

45,407

44,878

44,575

43,895

43,489

1

4

44,956

42,772

5

Total stockholders' equity

48,456

47,255

46,397

45,576

44,827

3

8

47,376

43,828

8

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated(1)




















































2015 Q3 vs.

Nine Months Ended September 30,

(Dollars in millions except as noted) (unaudited)

2015

2015

2015

2014

2014

2015

2014




2015 vs.

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2015

2014

2014

Performance Metrics



















Net interest income growth (quarter over quarter)

5%

(1)%

(2)%

4%

4%

**

**

5%

(4)%

**

Non-interest income growth (quarter over quarter)

—

6

(7)

1

(1)

**

**

1

5

**

Total net revenue growth (quarter over quarter)

4

—

(3)

3

3

**

**

5

(2)

**

Total net revenue margin(8)

8.34

8.20

8.11

8.50

8.39

14

bps

(5)

bps

8.22

8.29

(7)

bps

Net interest margin(9)

6.73

6.56

6.57

6.81

6.69

17

4

6.62

6.62

—

Return on average assets

1.43

1.11

1.47

1.28

1.51

32

(8)

1.33

1.56

(23)

Return on average tangible assets(10)

1.50

1.17

1.54

1.34

1.59

33

(9)

1.40

1.64

(24)

Return on average common equity(11)

9.54

7.30

9.84

8.61

10.12

224

(58)

8.89

10.58

(169)

Return on average tangible common equity(12)

14.33

11.06

15.00

13.28

15.73

327

(140)

13.46

16.66

(320)

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

5.98

6.41

5.94

6.46

5.99

(43)

(1)

6.11

6.05

6

Efficiency ratio(13)

53.56

58.30

53.99

56.49

52.93

(474)

63

55.26

53.99

127

Effective income tax rate for continuing operations


32.2

31.1

31.8

31.7

32.3

110

(10)

31.7

32.9

(120)

Employees (in thousands), period end

46.9

47.5

47.0

46.0

44.9

(1)%

4%

46.9

44.9

4%

Credit Quality Metrics(7)



















Allowance for loan and lease losses

$

4,847

$

4,676

$

4,405

$

4,383

$

4,212

4%

15%

$

4,847

$

4,212

15%

Allowance as a percentage of loans held for investment

2.27%

2.23%

2.16%

2.10%

2.09%

4

bps

18

bps

2.27%

2.09%

18

bps

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

2.49

2.46

2.41

2.36

2.37

3

12

2.49

2.37

12

Net charge-offs

$

890

$

846

$

881

$

915

$

756

5%

18%

$

2,617

$

2,499

5%

Net charge-off rate(14)

1.69%

1.64%

1.72%

1.80%

1.52%

5

bps

17

bps

1.68%

1.70%

(2)

bps

Net charge-off rate (excluding Acquired Loans)(14)

1.86

1.83

1.93

2.04

1.73

3

13

1.87

1.96

(9)

30+ day performing delinquency rate

2.63

2.33

2.32

2.62

2.46

30

17

2.63

2.46

17

30+ day performing delinquency rate (excluding Acquired Loans)

2.90

2.59

2.61

2.95

2.81

31

9

2.90

2.81

9

30+ day delinquency rate

2.95

2.65

2.58

2.91

2.76

30

19

2.95

2.76

19

30+ day delinquency rate (excluding Acquired Loans)

3.25

2.94

2.90

3.28

3.14

31

11

3.25

3.14

11

Capital Ratios(15)



















Common equity Tier 1 capital ratio 

12.1%

12.1%

12.5%

12.5%

12.7%

—

(60)

bps

12.1%

12.7%

(60)

bps

Tier 1 risk-based capital ratio

13.4

13.3

13.2

13.2

13.3

10

bps

10

13.4

13.3

10

Total risk-based capital ratio

15.1

15.1

15.1

15.1

15.2

—

(10)

15.1

15.2

(10)

Tier 1 leverage ratio

11.1

11.1

10.7

10.8

10.6

—

50

11.1

10.6

50

Tangible common equity ("TCE") ratio(16)

9.8

9.7

9.8

9.5

9.6

10

20

9.8

9.6

20

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income

































Three Months Ended

2015 Q3 vs.

Nine Months Ended September 30,


2015

2015

2014

2015

2014




2015 vs.

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

Q3

Q2

Q3

Q2

Q3

2015

2014

2014

Interest income:















Loans, including loans held for sale

$

4,753

$

4,531

$

4,463

5%

6%

$

13,824

$

13,049

6%

Investment securities

386

382

398

1

(3)

1,174

1,223

(4)

Other

25

24

26

4

(4)

77

80

(4)

Total interest income

5,164

4,937

4,887

5

6

15,075

14,352

5

Interest expense:















Deposits

271

272

271

—

—

814

819

(1)

Securitized debt obligations

39

36

32

8

22

108

109

(1)

Senior and subordinated notes

82

80

71

3

15

241

226

7

Other borrowings

12

12

16

—

(25)

39

36

8

Total interest expense

404

400

390

1

4

1,202

1,190

1

Net interest income

4,760

4,537

4,497

5

6

13,873

13,162

5

Provision for credit losses

1,092

1,129

993

(3)

10

3,156

2,432

30

Net interest income after provision for credit losses

3,668

3,408

3,504

8

5

10,717

10,730

—

Non-interest income:















Service charges and other customer-related fees

423

429

471

(1)

(10)

1,289

1,405

(8)

Interchange fees, net

555

567

523

(2)

6

1,618

1,498

8

Net other-than-temporary impairment recognized in earnings

(5)

(7)

(9)

(29)

(44)

(27)

(15)

80

Other

167

146

157

14

6

466

427

9

Total non-interest income

1,140

1,135

1,142

—

—

3,346

3,315

1

Non-interest expense:















Salaries and associate benefits

1,189

1,360

1,128

(13)

5

3,760

3,414

10

Occupancy and equipment

444

439

419

1

6

1,318

1,271

4

Marketing

418

387

392

8

7

1,180

1,052

12

Professional services

313

334

304

(6)

3

943

887

6

Communications and data processing

226

208

196

9

15

636

595

7

Amortization of intangibles

106

111

130

(5)

(18)

327

409

(20)

Other

464

468

416

(1)

12

1,352

1,268

7

Total non-interest expense

3,160

3,307

2,985

(4)

6

9,516

8,896

7

Income from continuing operations before income taxes

1,648

1,236

1,661

33

(1)

4,547

5,149

(12)

Income tax provision

530

384

536

38

(1)

1,443

1,696

(15)

Income from continuing operations, net of tax

1,118

852

1,125

31

(1)

3,104

3,453

(10)

(Loss) income from discontinued operations, net of tax(3)

(4)

11

(44)

**

(91)

26

(24)

**

Net income

1,114

863

1,081

29

3

3,130

3,429

(9)

Dividends and undistributed earnings allocated to participating securities(4)

(6)

(4)

(5)

50

20

(16)

(14)

14

Preferred stock dividends(4)

(29)

(29)

(20)

—

45

(90)

(46)

96

Net income available to common stockholders

$

1,079

$

830

$

1,056

30

2

$

3,024

$

3,369

(10)

















 
































Three Months Ended

2015 Q3 vs.

Nine Months Ended September 30,


2015

2015

2014

2015

2014




2015 vs.

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

Q3

Q2

Q3

Q2

Q3

2015

2014

2014

Basic earnings per common share:(4)















Net income from continuing operations

$

2.01

$

1.50

$

1.97

34%

2%

$

5.49

$

5.99

(8)%

(Loss) income from discontinued operations

(0.01)

0.02

(0.08)

**

(88)

0.05

(0.04)

**

Net income per basic common share

$

2.00

$

1.52

$

1.89

32

6

$

5.54

$

5.95

(7)

Diluted earnings per common share:(4)















Net income from continuing operations

$

1.99

$

1.48

$

1.94

34

3

$

5.43

$

5.90

(8)

(Loss) income from discontinued operations

(0.01)

0.02

(0.08)

**

(88)

0.05

(0.04)

**

Net income per diluted common share(5)

$

1.98

$

1.50

$

1.86

32

6

$

5.48

$

5.86

(6)

Weighted average common shares outstanding (in millions):















Basic common shares

540.6

545.6

559.9

(1)

(3)

545.5

566.1

(4)

Diluted common shares

546.3

552.0

567.9

(1)

(4)

551.9

575.2

(4)

Dividends paid per common share

$

0.40

$

0.40

$

0.30

—

33

$

1.10

$

0.90

22

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets(1) 



























September 30, 2015 vs.

(Dollars in millions) (unaudited)

September 30, 2015

December 31,

2014

September 30, 2014

December 31,
2014

September 30,
2014

Assets:









Cash and cash equivalents:









Cash and due from banks

$

2,701

$

3,147

$

2,652

(14)%

2%

Interest-bearing deposits with banks

3,952

4,095

3,212

(3)

23

Federal funds sold and securities purchased under agreements to resell

184

0

284

      **

(35)

Total cash and cash equivalents

6,837

7,242

6,148

(6)

11

Restricted cash for securitization investors

586

234

405

150

45

Securities available for sale, at fair value

39,431

39,508

39,665

—

(1)

Securities held to maturity, at carrying value

23,711

22,500

22,182

5

7

Loans held for investment:(7)









Unsecuritized loans held for investment

179,748

171,771

165,021

5

9

Restricted loans for securitization investors

33,581

36,545

36,571

(8)

(8)

Total loans held for investment

213,329

208,316

201,592

2

6

Allowance for loan and lease losses

(4,847)

(4,383)

(4,212)

11

15

Net loans held for investment

208,482

203,933

197,380

2

6

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

566

626

427

(10)

33

Premises and equipment, net

3,629

3,685

3,752

(2)

(3)

Interest receivable

1,101

1,079

1,043

2

6

Goodwill

13,983

13,978

13,970

—

—

Other assets

15,374

15,382

14,668

—

5

Total assets

$

313,700

$

308,167

$

299,640

2

5











 



























September 30, 2015 vs.

(Dollars in millions) (unaudited)

September 30, 2015

December 31,

2014

September 30, 2014

December 31,
2014

September 30,
2014

Liabilities:









Interest payable

$

198

$

254

$

191

(22)%

4%

Deposits:









Non-interest bearing deposits

25,055

25,081

25,388

—

(1)

Interest-bearing deposits

187,848

180,467

178,876

4

5

Total deposits

212,903

205,548

204,264

4

4

Securitized debt obligations

15,656

11,624

10,508

35

49

Other debt:









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

1,021

880

2,330

16

(56)

Senior and subordinated notes

21,773

18,684

18,534

17

17

Other borrowings

4,328

17,269

10,871

(75)

(60)

Total other debt

27,122

36,833

31,735

(26)

(15)

Other liabilities

10,136

8,855

8,924

14

14

Total liabilities

266,015

263,114

255,622

1

4











Stockholders' equity:









Preferred stock

0

0

0

—

—

Common stock

6

6

6

—

—

Additional paid-in capital, net

29,594

27,869

27,272

6

9

Retained earnings

26,407

23,973

23,162

10

14

Accumulated other comprehensive income ("AOCI")

(142)

(430)

(559)

(67)

(75)

Treasury stock, at cost

(8,180)

(6,365)

(5,863)

29

40

Total stockholders' equity

47,685

45,053

44,018

6

8

Total liabilities and stockholders' equity

$

313,700

$

308,167

$

299,640

2

5

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




**  

Not meaningful.


(1)

As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the related right to reclaim cash collateral or obligation to return cash collateral. Prior period results, excluding regulatory ratios, have been recast to conform to this presentation.


(2)

Total net revenue was reduced by $195 million in Q3 2015, $168 million in Q2 2015, $147 million in Q1 2015, $165 million in Q4 2014 and $164 million in Q3 2014 for the estimated uncollectible amount of billed finance charges and fees.


(3) 

Mortgage representation and warranty reserve is comprised of the following:

 























2015

2015

2015

2014

2014

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

(Benefit) provision for mortgage representation and warranty losses before income taxes:









Recorded in continuing operations

$

(7)

$

(9)

$

1

$

(11)

$

—

Recorded in discontinued operations

3

(27)

(19)

(41)

70

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

$

(4)

$

(36)

$

(18)

$

(52)

$

70

 

Historically, the majority of the (benefit) provision for representation and warranty losses is included net of tax in discontinued operations. The mortgage representation and warranty reserve was $632 million as of September 30, 2015, $731 million as of December 31, 2014 and $1.1 billion as of September 30, 2014.


(4)

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


(5)

We recorded a build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve") of $69 million in Q3 2015 and $78 million in Q2 2015. In Q2 2015, we also recorded restructuring charges of $147 million under our existing benefit plans as a result of the realignment of our workforce. We report the following non-GAAP financial measures that we believe are helpful for investors to understand the effect of these items on our reported results as they provide an additional presentation of our performance. The table below presents a reconciliation of our reported results to these non-GAAP financial measures:

 







































2015 Q3

2015 Q2

Nine Months Ended September 30, 2015

(Dollars in millions, except per share data) (unaudited)

Pre-Tax Income

Net Income

Diluted EPS

Pre-Tax Income

Net Income

Diluted EPS

Pre-Tax Income

Net Income

Diluted EPS

Reported results

$

1,648

$

1,114

$

1.98

$

1,236

$

863

$

1.50

$

4,547

$

3,130

$

5.48

Adjustment

69

69

0.12

225

155

0.28

294

224

0.41

Adjusted results

$

1,717

$

1,183

$

2.10

$

1,461

$

1,018

$

1.78

$

4,841

$

3,354

$

5.89


(6)

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


(7) 

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

 























2015

2015

2015

2014

2014

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

Acquired Loans accounted for under SOP 03-3:









Period-end unpaid principal balance

$

20,585

$

21,841

$

23,248

$

24,473

$

25,726

Period-end loans held for investment

19,743

20,970

22,334

23,500

24,685

Average loans held for investment

20,116

21,440

22,773

23,907

25,104



(8)

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


(9)

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


(10)

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


(11)

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


(12)

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


(13) 

Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the build in the U.K. PPI Reserve and restructuring charges discussed above in Footnote 5, was 52.78% for Q3 2015, 54.63% for Q2 2015 and 53.79% for the nine months ended September 30, 2015.


(14)

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


(15)

Ratios as of the end of Q3 2015 are preliminary and therefore subject to change. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.


(16)

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

 

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

































2015 Q3

2015 Q2

2014 Q3


Average Balance

Interest Income/
Expense(1)

Yield/
Rate(1)

Average
Balance

Interest Income/
Expense(1)

Yield/
Rate(1)

Average
Balance

Interest Income/
Expense(1)

Yield/
Rate(1)

(Dollars in millions) (unaudited)








Interest-earning assets:

















Loans, including loans held for sale

$

212,076

$

4,753

8.96%

$

207,335

$

4,531

8.74%

$

200,066

$

4,463

8.92%

Investment securities

63,541

386

2.43

63,771

382

2.40

62,582

398

2.54

Cash equivalents and other

7,465

25

1.34

5,479

24

1.75

6,242

26

1.67

Total interest-earning assets

$

283,082

$

5,164

7.30

$

276,585

$

4,937

7.14

$

268,890

$

4,887

7.27



















Interest-bearing liabilities:

















Interest-bearing deposits

$

185,800

$

271

0.58

$

183,946

$

272

0.59

$

179,928

$

271

0.60

Securitized debt obligations

14,881

39

1.05

13,219

36

1.09

10,110

32

1.27

Senior and subordinated notes

20,806

82

1.58

20,336

80

1.57

17,267

71

1.64

Other borrowings and liabilities

10,114

12

0.47

8,857

12

0.54

12,937

16

0.49

Total interest-bearing liabilities

$

231,601

$

404

0.70

$

226,358

$

400

0.71

$

220,242

$

390

0.71

Net interest income/spread


$

4,760

6.60


$

4,537

6.43


$

4,497

6.56

Impact of non-interest bearing funding




0.13




0.13




0.13

Net interest margin




6.73%




6.56%




6.69%
























Nine Months Ended September 30,


2015

2014


Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

(Dollars in millions) (unaudited)





Interest-earning assets:











Loans, including loans held for sale

$

208,444

$

13,824

8.84%

$

196,492

$

13,049

8.85%

Investment securities

63,500

1,174

2.47

62,411

1,223

2.61

Cash equivalents and other

7,444

77

1.38

6,162

80

1.73

Total interest-earning assets

$

279,388

$

15,075

7.19

$

265,065

$

14,352

7.22













Interest-bearing liabilities:











Interest-bearing deposits

$

184,258

$

814

0.59

$

181,587

$

819

0.60

Securitized debt obligations

13,233

108

1.09

10,419

109

1.39

Senior and subordinated notes

20,580

241

1.56

15,822

226

1.90

Other borrowings and liabilities

11,214

39

0.46

11,091

36

0.43

Total interest-bearing liabilities

$

229,285

$

1,202

0.70

$

218,919

$

1,190

0.72

Net interest income/spread


$

13,873

6.49


$

13,162

6.50

Impact of non-interest bearing funding




0.13




0.12

Net interest margin




6.62%




6.62%

__________

(1) 

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


 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics


















































2015 Q3 vs.

Nine Months Ended September 30,

(Dollars in millions) (unaudited)

2015
Q3

2015
Q2

2015
Q1

2014
Q4

2014
Q3

2015
Q2

2014
Q3

2015

2014

2015 vs.

2014

Loans Held For Investment (Period End)



















Credit card:



















   Domestic credit card

$

82,178

$

78,984

$

74,131

$

77,704

$

73,143

4%

12%

$

82,178

$

73,143

12%

   International credit card

7,957

8,219

7,623

8,172

7,488

(3)

6

7,957

7,488

6

Total credit card

90,135

87,203

81,754

85,876

80,631

3

12

90,135

80,631

12

Consumer banking:




















   Auto

41,052

39,991

38,937

37,824

36,254

3

13

41,052

36,254

13

   Home loan

26,340

27,595

28,905

30,035

31,203

(5)

(16)

26,340

31,203

(16)

   Retail banking

3,598

3,590

3,537

3,580

3,604

—

—

3,598

3,604

—

Total consumer banking

70,990

71,176

71,379

71,439

71,061

—

—

70,990

71,061

—

Commercial banking:




















   Commercial and multifamily real estate

23,585

22,886

22,831

23,137

22,895

3

3

23,585

22,895

3

   Commercial and industrial

27,873

27,660

27,172

26,972

26,071

1

7

27,873

26,071

7

Total commercial lending

51,458

50,546

50,003

50,109

48,966

2

5

51,458

48,966

5

   Small-ticket commercial real estate

654

685

738

781

822

(5)

(20)

654

822

(20)

Total commercial banking

52,112

51,231

50,741

50,890

49,788

2

5

52,112

49,788

5

Other loans

92

95

104

111

112

(3)

(18)

92

112

(18)

Total loans held for investment

$

213,329

$

209,705

$

203,978

$

208,316

$

201,592

2

6

$

213,329

$

201,592

6

Loans Held For Investment (Average)




















Credit card:




















   Domestic credit card

$

80,402

$

75,924

$

74,770

$

74,026

$

71,784

6%

12%

$

77,053

$

70,331

10%

   International credit card

8,048

7,977

7,811

7,714

7,710

1

4

7,946

7,674

4

Total credit card

88,450

83,901

82,581

81,740

79,494

5

11

84,999

78,005

9

Consumer banking:




















   Auto

40,560

39,546

38,387

37,072

35,584

3

14

39,505

33,993

16

   Home loan

26,934

28,251

29,493

30,604

31,859

(5)

(15)

28,217

33,258

(15)

   Retail banking

3,603

3,570

3,561

3,578

3,605

1

—

3,578

3,616

(1)

Total consumer banking

71,097

71,367

71,441

71,254

71,048

—

—

71,300

70,867

1

Commercial banking:




















   Commercial and multifamily real estate

23,305

22,853

23,120

23,129

22,409

2

4

23,092

21,623

7

   Commercial and industrial

27,620

27,414

27,190

26,409

25,512

1

8

27,411

24,562

12

Total commercial lending

50,925

50,267

50,310

49,538

47,921

1

6

50,503

46,185

9

   Small-ticket commercial real estate

667

709

760

801

845

(6)

(21)

712

891

(20)

Total commercial banking

51,592

50,976

51,070

50,339

48,766

1

6

51,215

47,076

9

Other loans

88

93

102

103

114

(5)

(23)

94

120

(22)

Total average loans held for investment

$

211,227

$

206,337

$

205,194

$

203,436

$

199,422

2

6

$

207,608

$

196,068

6

Net Charge-Off Rates



















Credit card:



















   Domestic credit card

3.08%

3.42%

3.55%

3.39%

2.83%

(34)

bps

25

bps

3.35%

3.45%

(10)

bps

   International credit card

1.80

2.65

2.80

3.34

3.32

(85)

(152)

2.41

3.81

(140)

Total credit card

2.96

3.35

3.48

3.38

2.88

(39)

8

3.26

3.48

(22)

 










































2015 Q3 vs.

Nine Months Ended September 30,

(Dollars in millions) (unaudited)

2015

Q3

2015
Q2

2015
Q1

2014
Q4

2014
Q3

2015

Q2

2014

Q3

2015

2014

2015 vs.
2014

Consumer banking:



















   Auto

1.85%

1.22%

1.55%

2.14%

1.98%

63

bps

(13)

bps

1.54%

1.65%

(11)

bps

   Home loan

0.01

0.04

0.03

0.07

0.02

(3)

(1)

0.03

0.05

(2)

   Retail banking

1.53

1.39

0.96

1.28

1.36

14

17

1.30

1.00

30

Total consumer banking

1.14

0.76

0.89

1.20

1.07

38

7

0.93

0.87

6

Commercial banking:



















   Commercial and multifamily real estate

(0.15)

(0.04)

(0.03)

0.01

(0.10)

(11)

(5)

(0.07)

(0.03)

(4)

   Commercial and industrial

0.61

0.13

0.05

0.10

(0.01)

48

**

0.26

0.02

24

Total commercial lending

0.26

0.05

0.01

0.06

(0.05)

21

**

0.11

—

11

   Small-ticket commercial real estate

0.50

0.15

0.47

0.80

(0.01)

35

**

0.37

0.44

(7)

Total commercial banking

0.26

0.05

0.02

0.07

(0.05)

21

**

0.11

—

11

Other loans

(5.50)

(0.79)

1.56

0.47

(0.61)

**

**

(1.40)

0.33

**

Total net charge-offs

1.69

1.64

1.72

1.80

1.52

5

17

1.68

1.70

(2)

30+ Day Performing Delinquency Rates



















Credit card:



















   Domestic credit card

3.28%

2.84%

2.92%

3.27%

3.21%

44

bps

7

bps

3.28%

3.21%

7

bps

   International credit card

2.81

2.65

2.81

2.94

3.34

16

(53)

2.81

3.34

(53)

Total credit card

3.24

2.82

2.91

3.24

3.22

42

2

3.24

3.22

2

Consumer banking:



















   Auto

6.10

5.58

5.21

6.57

6.14

52

(4)

6.10

6.14

(4)

   Home loan

0.18

0.17

0.18

0.21

0.14

1

4

0.18

0.14

4

   Retail banking

0.62

0.66

0.60

0.64

0.53

(4)

9

0.62

0.53

9

Total consumer banking

3.62

3.24

2.95

3.60

3.22

38

40

3.62

3.22

40

Nonperforming Loans and Nonperforming Assets Rates(1)(2)



















Credit card:



















   International credit card

0.77%

0.83%

0.84%

0.86%

0.98%

(6)

bps

(21)

bps

0.77%

0.98%

(21)

bps

Total credit card

0.07

0.08

0.08

0.08

0.09

(1)

(2)

0.07

0.09

(2)

Consumer banking:



















   Auto

0.49

0.40

0.31

0.52

0.49

9

—

0.49

0.49

—

   Home loan

1.18

1.13

1.16

1.10

1.04

5

14

1.18

1.04

14

   Retail banking

0.74

0.79

0.71

0.61

0.54

(5)

20

0.74

0.54

20

Total consumer banking

0.76

0.70

0.67

0.77

0.73

6

3

0.76

0.73

3

Commercial banking:



















   Commercial and multifamily real estate

0.03

0.12

0.18

0.27

0.26

(9)

(23)

0.03

0.26

(23)

   Commercial and industrial

1.58

1.56

0.39

0.39

0.37

2

121

1.58

0.37

121

Total commercial lending

0.87

0.91

0.29

0.33

0.32

(4)

55

0.87

0.32

55

   Small-ticket commercial real estate

0.65

0.47

1.62

0.96

0.42

18

23

0.65

0.42

23

Total commercial banking

0.87

0.90

0.31

0.34

0.32

(3)

55

0.87

0.32

55

Other loans

12.10

10.68

13.33

13.37

14.66

142

(256)

12.10

14.66

(256)

Total nonperforming loans

0.50

0.50

0.35

0.39

0.38

—

12

0.50

0.38

12

Total nonperforming assets

0.64

0.64

0.50

0.54

0.53

—

11

0.64

0.53

11

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Financial Summary—Business Segment Results












































Three Months Ended September 30, 2015

Nine Months Ended September 30, 2015

(Dollars in millions) (unaudited)

Total

Credit

Card

Consumer Banking

Commercial Banking

Other

Total

Credit

Card

Consumer Banking

Commercial Banking

Other

Net interest income (expense)

$

4,760

$

2,866

$

1,443

$

454

$

(3)

$

13,873

$

8,165

$

4,321

$

1,381

$

6

Non-interest income

1,140

858

174

108

—

3,346

2,519

528

345

(46)

Total net revenue (loss)(3)

5,900

3,724

1,617

562

(3)

17,219

10,684

4,849

1,726

(40)

Provision (benefit) for credit losses

1,092

831

188

75

(2)

3,156

2,395

579

184

(2)

Non-interest expense

3,160

1,848

1,001

272

39

9,516

5,481

2,969

814

252

Income (loss) from continuing operations before income taxes

1,648

1,045

428

215

(40)

4,547

2,808

1,301

728

(290)

Income tax provision (benefit)

530

375

155

78

(78)

1,443

1,007

471

264

(299)

Income from continuing operations, net of tax

$

1,118

$

670

$

273

$

137

$

38

$

3,104

$

1,801

$

830

$

464

$

9























Three Months Ended June 30, 2015









(Dollars in millions) (unaudited)

Total

Credit

Card

Consumer Banking

Commercial Banking

Other









Net interest income (expense)

$

4,537

$

2,633

$

1,444

$

466

$

(6)










Non-interest income

1,135

845

196

123

(29)










Total net revenue (loss)(3)

5,672

3,478

1,640

589

(35)










Provision for credit losses

1,129

895

185

49

—










Non-interest expense

3,307

1,857

998

270

182










Income (loss) from continuing operations before income taxes

1,236

726

457

270

(217)










Income tax provision (benefit)

384

263

166

98

(143)










Income (loss) from continuing operations, net of tax

$

852

$

463

$

291

$

172

$

(74)

































Three Months Ended September 30, 2014

Nine Months Ended September 30, 2014

(Dollars in millions) (unaudited)

Total

Credit

Card

Consumer Banking

Commercial Banking

Other

Total

Credit

Card

Consumer Banking

Commercial Banking

Other

Net interest income (expense)

$

4,497

$

2,627

$

1,425

$

439

$

6

$

13,162

$

7,613

$

4,289

$

1,296

$

(36)

Non-interest income

1,142

846

179

122

(5)

3,315

2,470

499

318

28

Total net revenue (loss)(3)

5,639

3,473

1,604

561

1

16,477

10,083

4,788

1,614

(8)

Provision (benefit) for credit losses

993

787

198

9

(1)

2,432

1,894

481

61

(4)

Non-interest expense

2,985

1,730

956

268

31

8,896

5,175

2,824

790

107

Income (loss) from continuing operations before income taxes

1,661

956

450

284

(29)

5,149

3,014

1,483

763

(111)

Income tax provision (benefit)

536

332

161

102

(59)

1,696

1,054

530

273

(161)

Income from continuing operations, net of tax

$

1,125

$

624

$

289

$

182

$

30

$

3,453

$

1,960

$

953

$

490

$

50

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial & Statistical Summary—Credit Card Business




















































2015 Q3 vs.

Nine Months Ended September 30,


2015

2015

2015

2014

2014

2015

2014




2015 vs.

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2015

2014

2014

Credit Card(4)



















Earnings:



















Net interest income

$

2,866

$

2,633

$

2,666

$

2,697

$

2,627

9%

9%

$

8,165

$

7,613

7%

Non-interest income

858

845

816

841

846

2

1

2,519

2,470

2

Total net revenue

3,724

3,478

3,482

3,538

3,473

7

7

10,684

10,083

6

Provision for credit losses

831

895

669

856

787

(7)

6

2,395

1,894

26

Non-interest expense

1,848

1,857

1,776

1,888

1,730

—

7

5,481

5,175

6

Income from continuing operations before income taxes

1,045

726

1,037

794

956

44

9

2,808

3,014

(7)

Income tax provision


375

263

369

275

332

43

13

1,007

1,054

(4)

Income from continuing operations, net of tax

$

670

$

463

$

668

$

519

$

624

45

7

$

1,801

$

1,960

(8)

Selected performance metrics:



















Period-end loans held for investment

$

90,135

$

87,203

$

81,754

$

85,876

$

80,631

3%

12%

$

90,135

$

80,631

12%

Average loans held for investment

88,450

83,901

82,581

81,740

79,494

5

11

84,999

78,005

9

Average yield on loans held for investment(5)

14.39%

13.98%

14.30%

14.61%

14.65%

41

bps

(26)

bps

14.22%

14.44%

(22)

bps

Total net revenue margin(6)

16.84

16.58

16.87

17.31

17.48

26

(64)

16.76

17.24

(48)

Net charge-off rate

2.96

3.35

3.48

3.38

2.88

(39)

8

3.26

3.48

(22)

30+ day performing delinquency rate

3.24

2.82

2.91

3.24

3.22

42

2

3.24

3.22

2

30+ day delinquency rate

3.29

2.88

2.97

3.30

3.29

41

—

3.29

3.29

—

Nonperforming loan rate(1)

0.07

0.08

0.08

0.08

0.09

(1)

(2)

0.07

0.09

(2)

Card loan premium amortization and other intangible accretion(7)

$

5

$

7

$

11

$

11

$

18

(29)%

(72)%

$

23

$

86

(73)%

PCCR intangible amortization

78

80

84

87

90

(3)

(13)

242

282

(14)

Purchase volume(8)

69,875

68,559

57,383

63,484

57,474

2

22

195,817

161,266

21





















 

 


















































2015 Q3 vs.

Nine Months Ended September 30,


2015

2015

2015

2014

2014

2015

2014




2015 vs.

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2015

2014

2014

Domestic Card



















Earnings:



















Net interest income

$

2,613

$

2,395

$

2,421

$

2,432

$

2,361

9%

11%

$

7,429

$

6,809

9%

Non-interest income

814

796

743

768

763

2

7

2,353

2,233

5

Total net revenue

3,427

3,191

3,164

3,200

3,124

7

10

9,782

9,042

8

Provision for credit losses

796

853

610

765

738

(7)

8

2,259

1,728

31

Non-interest expense

1,630

1,621

1,580

1,676

1,530

1

7

4,831

4,588

5

Income from continuing operations before income taxes

1,001

717

974

759

856

40

17

2,692

2,726

(1)

Income tax provision


362

259

353

272

306

40

18

974

974

—

Income from continuing operations, net of tax

$

639

$

458

$

621

$

487

$

550

40

16

$

1,718

$

1,752

(2)

Selected performance metrics:



















Period-end loans held for investment

$

82,178

$

78,984

$

74,131

$

77,704

$

73,143

4%

12%

$

82,178

$

73,143

12%

Average loans held for investment

80,402

75,924

74,770

74,026

71,784

6

12

77,053

70,331

10

Average yield on loans held for investment(5)

14.35%

13.95%

14.23%

14.43%

14.46%

40

bps

(11)

bps

14.17%

14.20%

(3)

bps

Total net revenue margin(6)

17.05

16.81

16.93

17.29

17.41

24

(36)

16.93

17.14

(21)

Net charge-off rate

3.08

3.42

3.55

3.39

2.83

(34)

25

3.35

3.45

(10)

30+ day performing delinquency rate

3.28

2.84

2.92

3.27

3.21

44

7

3.28

3.21

7

30+ day delinquency rate

3.28

2.84

2.92

3.27

3.21

44

7

3.28

3.21

7

Purchase volume(8)

$

63,777

$

62,198

$

52,025

$

58,234

$

53,690

3%

19%

$

178,000

$

150,482

18%

International Card(4)



















Earnings:



















Net interest income

$

253

$

238

$

245

$

265

$

266

6%

(5)%

$

736

$

804

(8)%

Non-interest income

44

49

73

73

83

(10)

(47)

166

237

(30)

Total net revenue

297

287

318

338

349

3

(15)

902

1,041

(13)

Provision for credit losses

35

42

59

91

49

(17)

(29)

136

166

(18)

Non-interest expense

218

236

196

212

200

(8)

9

650

587

11

Income from continuing operations before income taxes

44

9

63

35

100

**

(56)

116

288

(60)

Income tax provision


13

4

16

3

26

**

(50)

33

80

(59)

Income from continuing operations, net of tax

$

31

$

5

$

47

$

32

$

74

**

(58)

$

83

$

208

(60)

Selected performance metrics:



















Period-end loans held for investment

$

7,957

$

8,219

$

7,623

$

8,172

$

7,488

(3)%

6%

$

7,957

$

7,488

6%

Average loans held for investment

8,048

7,977

7,811

7,714

7,710

1

4

7,946

7,674

4

Average yield on loans held for investment(5)

14.88%

14.29

%

14.93%

16.31%

16.42%

59

bps

(154)

bps

14.70%

16.60%

(190)

bps

Total net revenue margin(6)

14.77

14.36

16.31

17.55

18.13

41

(336)

15.14

18.09

(295)

Net charge-off rate

1.80

2.65

2.80

3.34

3.32

(85)

(152)

2.41

3.81

(140)

30+ day performing delinquency rate

2.81

2.65

2.81

2.94

3.34

16

(53)

2.81

3.34

(53)

30+ day delinquency rate

3.39

3.29

3.44

3.60

4.08

10

(69)

3.39

4.08

(69)

Nonperforming loan rate(1)

0.77

0.83

0.84

0.86

0.98

(6)

(21)

0.77

0.98

(21)

Purchase volume(8)

$

6,098

$

6,361

$

5,358

$

5,250

$

3,784

(4)%

61%

$

17,817

$

10,784

65%

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Consumer Banking Business



















































2015 Q3 vs.

Nine Months Ended September 30,


2015

2015

2015

2014

2014

2015

2014




2015 vs.

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2015

2014

2014

Consumer Banking



















Earnings:



















Net interest income

$

1,443

$

1,444

$

1,434

$

1,459

$

1,425

—

1%

$

4,321

$

4,289

1%

Non-interest income

174

196

158

185

179

(11)%

(3)

528

499

6

Total net revenue

1,617

1,640

1,592

1,644

1,604

(1)

1

4,849

4,788

1

Provision for credit losses

188

185

206

222

198

2

(5)

579

481

20

Non-interest expense

1,001

998

970

1,045

956

—

5

2,969

2,824

5

Income from continuing operations before income taxes

428

457

416

377

450

(6)

(5)

1,301

1,483

(12)

Income tax provision

155

166

150

135

161

(7)

(4)

471

530

(11)

Income from continuing operations, net of tax

$

273

$

291

$

266

$

242

$

289

(6)

(6)

$

830

$

953

(13)

Selected performance metrics:



















Period-end loans held for investment

$

70,990

$

71,176

$

71,379

$

71,439

$

71,061

—

—

$

70,990

$

71,061

—

Average loans held for investment

71,097

71,367

71,441

71,254

71,048

—

—

71,300

70,867

1%

Average yield on loans held for investment(5)

6.25%

6.27%

6.26%

6.45%

6.18%

(2)

bps

7

bps

6.26%

6.19%

7

bps

Auto loan originations

$

5,590

$

5,433

$

5,185

$

5,390

$

5,410

3%

3%

$

16,208

$

15,513

4%

Period-end deposits

170,866

170,321

172,502

168,078

167,624

—

2

170,866

167,624

2

Average deposits

170,816

171,076

169,593

167,727

168,407

—

1

170,500

168,925

1

Average deposit interest rate

0.56%

0.57%

0.57%

0.57%

0.58%

(1)

bps

(2)

bps

0.57%

0.58%

(1)

bps

Core deposit intangible amortization

$

19

$

21

$

22

$

24

$

26

(10)%

(27)%

$

62

$

84

(26)%

Net charge-off rate

1.14%

0.76%

0.89%

1.20%

1.07%

38

bps

7

bps

0.93%

0.87%

6

bps

30+ day performing delinquency rate

3.62

3.24

2.95

3.60

3.22

38

40

3.62

3.22

40

30+ day delinquency rate

4.22

3.80

3.46

4.23

3.82

42

40

4.22

3.82

40

Nonperforming loan rate(1)

0.76

0.70

0.67

0.77

0.73

6

3

0.76

0.73

3

Nonperforming asset rate(2)

1.05

0.98

0.95

1.06

1.01

7

4

1.05

1.01

4

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Commercial Banking Business




















































2015 Q3 vs.

Nine Months Ended September 30,


2015

2015

2015

2014

2014

2015

2014




2015 vs.

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2015

2014

2014

Commercial Banking



















Earnings:



















Net interest income

$

454

$

466

$

461

$

455

$

439

(3)%

3%

$

1,381

$

1,296

7%

Non-interest income

108

123

114

132

122

(12)

(11)

345

318

8

Total net revenue(3)

562

589

575

587

561

(5)

—

1,726

1,614

7

Provision for credit losses

75

49

60

32

9

53

733

184

61

202

Non-interest expense

272

270

272

293

268

1

1

814

790

3

Income from continuing operations before income taxes

215

270

243

262

284

(20)

(24)

728

763

(5)

Income tax provision

78

98

88

93

102

(20)

(24)

264

273

(3)

Income from continuing operations, net of tax

$

137

$

172

$

155

$

169

$

182

(20)

(25)

$

464

$

490

(5)

Selected performance metrics:



















Period-end loans held for investment

$

52,112

$

51,231

$

50,741

$

50,890

$

49,788

2%

5%

$

52,112

$

49,788

5%

Average loans held for investment

51,592

50,976

51,070

50,339

48,766

1

6

51,215

47,076

9

Average yield on loans held for investment(3)(5)

3.21%

3.26%

3.22%

3.33%

3.39%

(5)

bps

(18)

bps

3.23%

3.45%

(22)

bps

Period-end deposits

$

32,751

$

32,909

$

32,575

$

31,954

$

31,918

—

3%

$

32,751

$

31,918

3%

Average deposits

32,806

32,778

32,845

32,363

31,772

—

3

32,809

31,546

4

Average deposit interest rate

0.25%

0.25%

0.24%

0.24%

0.24%

—

1

bps

0.25%

0.24%

1

bps

Core deposit intangible amortization

$

3

$

4

$

4

$

5

$

5

(25)%

(40)%

$

11

$

16

(31)%

Net charge-off (recovery) rate

0.26%

0.05%

0.02%

0.07%

(0.05)%

21

bps

31

bps

0.11%

0.00%

11

bps

Nonperforming loan rate(1)

0.87

0.90

0.31

0.34

0.32

(3)

55

0.87

0.32

55

Nonperforming asset rate(2)

0.87

0.91

0.31

0.36

0.35

(4)

52

0.87

0.35

52

Risk category:(9)



















Noncriticized

$

49,934

$

49,001

$

48,938

$

49,284

$

48,408

2%

3%

$

49,934

$

48,408

3%

Criticized performing

1,725

1,767

1,645

1,431

1,219

(2)

42

1,725

1,219

42

Criticized nonperforming

453

463

158

175

161

(2)

181

453

161

181

Total commercial loans

$

52,112

$

51,231

$

50,741

$

50,890

$

49,788

2

5

$

52,112

$

49,788

5

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



















Noncriticized

95.8%

95.7%

96.5%

96.9%

97.3%

10

bps

(150)

bps

95.8%

97.3%

(150)

bps

Criticized performing

3.3

3.4

3.2

2.8

2.4

(10)

90

3.3

2.4

90

Criticized nonperforming

0.9

0.9

0.3

0.3

0.3

—

60

0.9

0.3

60

Total commercial loans

100.0

%

100.0%

100.0%

100.0%

100.0%

—

—

100.0%

100.0%

—

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Other and Total



















































2015 Q3 vs.

Nine Months Ended September 30,


2015

2015

2015

2014

2014

2015

2014




2015 vs.

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2015

2014

2014

Other



















Earnings:



















Net interest (expense) income

$

(3)

$

(6)

$

15

$

45

$

6

(50)%

**

$

6

$

(36)

**

Non-interest income

—

(29)

(17)

(1)

(5)

**

**

(46)

28

**

Total net (loss) revenue(3)

(3)

(35)

(2)

44

1

(91)

**

(40)

(8)

**

Benefit for credit losses

(2)

—

—

(1)

(1)

**

100

%

(2)

(4)

(50)%

Non-interest expense(10)

39

182

31

58

31

(79)

26

252

107

136

Loss from continuing operations before income taxes

(40)

(217)

(33)

(13)

(29)

(82)

38

(290)

(111)

161

Income tax benefit

(78)

(143)

(78)

(53)

(59)

(45)

32

(299)

(161)

86

Income (loss) from continuing operations, net of tax

$

38

$

(74)

$

45

$

40

$

30

**

27

$

9

$

50

(82)

Selected performance metrics:



















Period-end loans held for investment

$

92

$

95

$

104

$

111

$

112

(3)%

(18)%

$

92

$

112

(18)%

Average loans held for investment

88

93

102

103

114

(5)

(23)

94

120

(22)

Period-end deposits

9,286

5,550

5,363

5,516

4,722

67

97

9,286

4,722

97

Average deposits

7,352

5,289

5,413

5,265

5,020

39

46

6,025

5,312

13

Total



















Earnings:



















Net interest income

$

4,760

$

4,537

$

4,576

$

4,656

$

4,497

5%

6%

$

13,873

$

13,162

5%

Non-interest income

1,140

1,135

1,071

1,157

1,142

—

—

3,346

3,315

1

Total net revenue

5,900

5,672

5,647

5,813

5,639

4

5

17,219

16,477

5

Provision for credit losses

1,092

1,129

935

1,109

993

(3)

10

3,156

2,432

30

Non-interest expense

3,160

3,307

3,049

3,284

2,985

(4)

6

9,516

8,896

7

Income from continuing operations before income taxes

1,648

1,236

1,663

1,420

1,661

33

(1)

4,547

5,149

(12)

Income tax provision

530

384

529

450

536

38

(1)

1,443

1,696

(15)

Income from continuing operations, net of tax

$

1,118

$

852

$

1,134

$

970

$

1,125

31

(1)

$

3,104

$

3,453

(10)

Selected performance metrics:



















Period-end loans held for investment

$

213,329

$

209,705

$

203,978

$

208,316

$

201,592

2%

6%

$

213,329

$

201,592

6%

Average loans held for investment

211,227

206,337

205,194

203,436

199,422

2

6

207,608

196,068

6

Period-end deposits

212,903

208,780

210,440

205,548

204,264

2

4

212,903

204,264

4

Average deposits

210,974

209,143

207,851

205,355

205,199

1

3

209,334

205,783

2

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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


**  

Not meaningful.


(1) 

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


(2) 

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


(3) 

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


(4)

Includes a build in our U.K. PPI Reserve in Q3 2015 and Q2 2015, which impacted both revenue and non-interest expense within our International Card business.


(5) 

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


(6) 

Calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the specified loan category.


(7) 

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


(8) 

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



(9) 

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


(10) 

Includes restructuring charges for employee severance and related benefits.

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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
























Basel III Standardized

(Dollars in millions) (unaudited)

September 30,

2015

June 30,
2015

March 31,
2015

December 31,
2014

September 30,
2014

Regulatory Capital Metrics









Common equity Tier 1 capital

$

30,109

$

29,804

$

29,671

$

29,534

$

29,116

Tier 1 capital

33,402

32,614

31,493

31,355

30,451

Total risk-based capital(2)

37,696

37,115

35,878

35,879

34,860

Risk-weighted assets(3)

249,250

246,106

238,011

236,944

228,759

Average assets for the leverage ratio

300,010

293,291

295,556

291,243

286,070

Capital Ratios









Common equity Tier 1 capital ratio(4)

12.1%

12.1%

12.5%

12.5%

12.7%

Tier 1 risk-based capital ratio(5)

13.4

13.3

13.2

13.2

13.3

Total risk-based capital ratio(6)

15.1

15.1

15.1

15.1

15.2

Tier 1 leverage ratio(7)

11.1

11.1

10.7

10.8

10.6

Tangible common equity ("TCE") ratio(8)

9.8

9.7

9.8

9.5

9.6

 

 

Reconciliation of Non-GAAP Measures

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
























2015

2015

2015

2014

2014

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

Tangible Common Equity (Period End)









Stockholders' equity

$

47,685

$

46,659

$

45,730

$

45,053

$

44,018

Goodwill and intangible assets(9)

(15,153)

(15,240)

(15,307)

(15,383)

(15,472)

Noncumulative perpetual preferred stock(10)

(3,294)

(2,810)

(1,822)

(1,822)

(1,336)

Tangible common equity

$

29,238

$

28,609

$

28,601

$

27,848

$

27,210

Tangible Common Equity (Average)









Average stockholders' equity

$

48,456

$

47,255

$

46,397

$

45,576

$

44,827

Average goodwill and intangible assets(9)

(15,183)

(15,256)

(15,339)

(15,437)

(15,525)

Average noncumulative perpetual preferred stock(10)

(3,049)

(2,377)

(1,822)

(1,681)

(1,338)

Average tangible common equity

$

30,224

$

29,622

$

29,236

$

28,458

$

27,964

 

 


































2015

2015

2015

2014

2014

(Dollars in millions) (unaudited)

Q3

Q2

Q1

Q4

Q3

Tangible Assets (Period End)









Total assets(11)

$

313,700

$

310,510

$

306,224

$

308,167

$

299,640

Goodwill and intangible assets(9)

(15,153)

(15,240)

(15,307)

(15,383)

(15,472)

Tangible assets(11)

$

298,547

$

295,270

$

290,917

$

292,784

$

284,168

Tangible Assets (Average)









Average total assets(11)

$

313,822

$

307,206

$

309,401

$

304,153

$

298,913

Average goodwill and intangible assets(9)

(15,183)

(15,256)

(15,339)

(15,437)

(15,525)

Average tangible assets(11)

$

298,639

$

291,950

$

294,062

$

288,716

$

283,388


Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach























(Dollars in millions) (unaudited)

September 30,
2015

June 30,
2015

March 31,
2015

December 31,
2014

September 30,
2014

Common equity excluding AOCI

$

44,533

$

44,246

$

44,120

$

43,661

$

43,241

Adjustments:










AOCI(12)(13)

75

(128)

(26)

(69)

(146)

Goodwill(9)

(13,805)

(13,809)

(13,801)

(13,805)

(13,801)

Intangible assets(9)(13)

(374)

(413)

(450)

(243)

(266)

Other

(320)

(92)

(172)

(10)

88

Common equity Tier 1 capital

$

30,109

$

29,804

$

29,671

$

29,534

$

29,116

Risk-weighted assets(3)

$

249,250

$

246,106

$

238,011

$

236,944

$

228,759

Common equity Tier 1 capital ratio(4)


12.1%

12.1%

12.5%

12.5%

12.7%

 

(1)  

Regulatory capital metrics and capital ratios as of the end of Q3 2015 are preliminary and therefore subject to change.


(2) 

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


(3) 

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



(4) 

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


(5) 

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


(6) 

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


(7) 

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


(8) 

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


(9) 

Includes impact of related deferred taxes.


(10) 

Includes related surplus.


(11) 

As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the related right to reclaim cash collateral or obligation to return cash collateral. Prior period results, excluding regulatory ratios, have been recast to conform to this presentation.


(12) 

Amounts presented are net of tax.


(13)

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

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/capital-one-reports-third-quarter-2015-net-income-of-11-billion-or-198-per-share-300165000.html

SOURCE Capital One Financial Corporation

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