MCLEAN, Va., April 16, 2014 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2014 of $1.2 billion, or $1.96 per diluted common share, compared to the fourth quarter of 2013 with net income of $852 million, or $1.43 per diluted common share, and the first quarter of 2013 with net income of $1.1 billion, or $1.77 per diluted common share.
"Capital One posted solid results across our businesses in the first quarter," said Richard D. Fairbank, Chairman and CEO. "We received no objection to our CCAR capital plan and announced a $2.5 billion share repurchase program that we expect to complete by the end of the first quarter of 2015."
All comparisons below are for the first quarter of 2014 compared with the fourth quarter of 2013 unless otherwise noted.
First Quarter 2014 Income Highlights:
-- Total net revenue decreased 3 percent to $5.4 billion. -- Total non-interest expense decreased 9 percent to $2.9 billion. -- Pre-provision earnings increased 6 percent to $2.4 billion. -- Provision for credit losses decreased 23 percent to $735 million.
First Quarter 2014 Balance Sheet Highlights:
-- Common equity Tier 1 capital ratio under Basel III Standardized Approach of 13.0 percent at March 31, 2014. -- Net interest margin of 6.62 percent, down 11 basis points. -- Domestic Card period-end loans decreased $5.0 billion, or 7 percent, to $68.3 billion. -- Commercial Banking period-end loans increased $1.2 billion, or 3 percent, to $46.2 billion. -- Consumer Banking: -- Auto period-end loans increased $1.2 billion, or 4 percent, to $33.1 billion. -- Home loans period-end loans decreased $1.2 billion, or 4 percent, to $34.0 billion, driven by expected run-off of acquired portfolios. -- Average loans held for investment in the quarter increased $909 million, or less than 1 percent, to $193.7 billion. -- Domestic Card average loans decreased $558 million, or less than 1 percent, to $69.8 billion. -- Commercial Banking average loans increased $2.1 billion, or 5 percent, to $45.4 billion. -- Consumer Banking: -- Auto average loans increased $963 million, or 3 percent, to $32.4 billion. -- Home loans average loans decreased by $1.3 billion, or 4 percent, to $34.6 billion, driven by expected run-off of acquired portfolios. -- Period-end total deposits increased $3.8 billion, or 2 percent, to $208.3 billion, while average deposits increased $136 million, or less than 1 percent, to $205.8 billion. -- Deposit interest rates declined 3 basis points to 0.60 percent.
Detailed segment information will be available in the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on April 16, 2014, at 5:00 PM, Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us", then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through May 7, 2014 at 5:00 PM.
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, 2013.
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 $208.3 billion in deposits and $290.5 billion in total assets as of March 31, 2014. 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 more than 900 branch locations 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.
Capital One Financial Corporation Financial Supplement First Quarter 2014(1)(2)(3) Table of Contents Page ---- Capital One Financial Corporation Consolidated Table 1: Financial Summary-Consolidated 1 Table 2: Selected Metrics-Consolidated 2 Table 3: Consolidated Statements of Income 3 Table 4: Consolidated Balance Sheets 4 Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 - 4) 5 Table 6: Average Balances, Net Interest Income and Net Interest Margin 6 Table 7: Loan Information and Performance Statistics 7 Business Segment Detail Table 8: Financial & Statistical Summary-Credit Card Business 8 Table 9: Financial & Statistical Summary-Consumer Banking Business 9 Table 10: Financial & Statistical Summary-Commercial Banking Business 10 Table 11: Financial & Statistical Summary-Other and Total 11 Table 12: Notes to Loan and Business Segment Disclosures (Tables 7 - 11) 12 Other Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures 13
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(1) The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our Quarterly Report on Form 10-Q for the period ended March 31, 2014 once it is filed with the Securities and Exchange Commission.
(2) References to ING Direct refers to business and assets acquired and liabilities assumed in the February 17, 2012 acquisition. Reference to the 2012 U.S. card acquisition refer to the May 1, 2012 transaction in which we acquired substantially all of HSBC's credit card and private- label credit card business in the United States.
(3) We adopted ASU 2014-01 "Accounting for Investments in Qualified Affordable Housing Projects" as of January 1, 2014. As permitted by the guidance, we adopted the proportional amortization method of accounting for Qualified Affordable Housing Projects. The proportional amortization method amortizes the cost of the investment over the period in which we will receive tax credits and other tax benefits, and the resulting amortization is recognized as a component of income taxes attributable to continuing operations. Historically, these investments were accounted for under the equity method of accounting and the passive losses related to the investments were recognized within non-interest expense. Prior period results and related metrics have been restated to conform to this presentation.
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 1: Financial Summary-Consolidated(1) 2014 2013 2013 2013 2013 (Dollars in millions, except per share data and as noted) (unaudited) Q1 Q4 Q3 Q2 Q1 -------------------------------------------------------------------- --- --- --- --- --- Earnings -------- Net interest income $4,350 $4,423 $4,560 $4,553 $4,570 Non-interest income(2) 1,020 1,121 1,091 1,085 981 ----- ----- ----- ----- --- Total net revenue(3) 5,370 5,544 5,651 5,638 5,551 ----- ----- ----- ----- ----- Provision for credit losses 735 957 849 762 885 Non-interest expense: Marketing 325 427 299 330 317 Amortization of intangibles(4) 143 166 161 167 177 Acquisition-related(5) 23 60 37 50 46 Operating expenses 2,441 2,582 2,612 2,471 2,451 ----- ----- ----- ----- ----- Total non-interest expense 2,932 3,235 3,109 3,018 2,991 ----- ----- ----- ----- ----- Income from continuing operations before income taxes 1,703 1,352 1,693 1,858 1,675 Income tax provision 579 477 575 631 541 --- --- --- --- --- Income from continuing operations, net of tax 1,124 875 1,118 1,227 1,134 Income/(Loss) from discontinued operations, net of tax(2) 30 (23) (13) (119) (78) --- --- --- ---- --- Net income 1,154 852 1,105 1,108 1,056 Dividends and undistributed earnings allocated to participating securities(6) (5) (4) (5) (4) (5) Preferred stock dividends(6) (13) (13) (13) (13) (13) --- --- --- --- --- Net income available to common stockholders $1,136 $835 $1,087 $1,091 $1,038 ====== ==== ====== ====== ====== Common Share Statistics ----------------------- Basic EPS:(6) Net income from continuing operations $1.94 $1.50 $1.89 $2.08 $1.92 Income/(Loss) from discontinued operations 0.05 (0.04) (0.02) (0.20) (0.13) ---- ----- ----- ----- ----- Net income per basic common share $1.99 $1.46 $1.87 $1.88 $1.79 ===== ===== ===== ===== ===== Diluted EPS:(6) Net income from continuing operations $1.91 $1.46 $1.86 $2.05 $1.90 Income/(Loss) from discontinued operations 0.05 (0.03) (0.02) (0.20) (0.13) ---- ----- ----- ----- ----- Net income per diluted common share $1.96 $1.43 $1.84 $1.85 $1.77 ===== ===== ===== ===== ===== Weighted average common shares outstanding (in millions) for: Basic EPS 571.0 573.4 582.3 581.5 580.5 Diluted EPS 580.3 582.6 591.1 588.8 586.3 Common shares outstanding (period end, in millions) 572.9 572.7 582.0 584.9 584.0 Dividends per common share $0.30 $0.30 $0.30 $0.30 $0.05 Tangible book value per common share (period end)(7) 45.88 43.64 43.01 41.41 41.72 Balance Sheet (Period End) ------------------------- Loans held for investment(8) $192,941 $197,199 $191,814 $191,512 $191,333 Interest-earning assets 259,422 265,170 259,152 265,693 268,479 Total assets 290,500 296,933 289,866 296,524 300,145 Interest-bearing deposits 184,214 181,880 184,553 187,768 191,093 Total deposits 208,324 204,523 206,834 209,865 212,410 Borrowings 30,118 40,654 31,845 36,231 37,492 Common equity 41,948 40,779 40,792 40,094 40,358 Total stockholders' equity 42,801 41,632 41,645 40,947 41,211 Balance Sheet (Quarterly Average Balances) ----------------------------------------- Loans held for investment(8) $193,722 $192,813 $191,135 $190,562 $195,997 Interest-earning assets 262,659 262,957 264,796 266,544 272,345 Total assets 294,275 294,040 294,919 297,748 303,226 Interest-bearing deposits 184,183 184,206 186,752 189,311 190,612 Total deposits 205,842 205,706 208,340 210,650 211,555 Borrowings 35,978 36,463 36,355 36,915 41,574 Common equity 42,006 41,502 40,332 40,637 40,027 Total stockholders' equity 42,859 42,355 41,185 41,490 40,880
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 2: Selected Metrics-Consolidated(1) 2014 2013 2013 2013 2013 (Dollars in millions, except per share data and as noted) (unaudited) Q1 Q4 Q3 Q2 Q1 -------------------------------------------------------------------- --- --- --- --- --- Performance Metrics ------------------- Net interest income growth (quarter over quarter) (2)% (3)% - % - % 1% Non-interest income growth (quarter over quarter) (9) 3 1 11 (10) Total net revenue growth (quarter over quarter) (3) (2) - 2 (1) Total net revenue margin(9) 8.18 8.43 8.54 8.46 8.15 Net interest margin(10) 6.62 6.73 6.89 6.83 6.71 Return on average assets(11) 1.53 1.19 1.52 1.65 1.50 Return on average tangible assets(12) 1.61 1.26 1.60 1.74 1.58 Return on average common equity(13) 10.53 8.27 10.91 11.91 11.15 Return on average tangible common equity(14) 16.83 13.38 17.96 19.62 18.69 Non-interest expense as a % of average loans held for investment(15) 6.05 6.71 6.51 6.33 6.10 Efficiency ratio(16) 54.60 58.35 55.02 53.53 53.88 Effective income tax rate for continuing operations 34.0 35.3 34.0 34.0 32.3 Full-time equivalent employees (in thousands), period end 41.1 42.0 39.6 39.6 39.3 Credit Quality Metrics(8) ------------------------ Allowance for loan and lease losses $4,098 $4,315 $4,333 $4,407 $4,606 Allowance as a % of loans held for investment 2.12% 2.19% 2.26% 2.30% 2.41% Allowance as a % of loans held for investment (excluding acquired loans) 2.45 2.54 2.66 2.74 2.91 Net charge-offs $931 $969 $917 $969 $1,079 Net charge-off rate(17) 1.92% 2.01% 1.92% 2.03% 2.20% Net charge-off rate (excluding acquired loans)(17) 2.24 2.37 2.29 2.46 2.69 30+ day performing delinquency rate 2.22 2.63 2.54 2.35 2.37 30+ day performing delinquency rate (excluding acquired loans) 2.59 3.08 3.01 2.83 2.90 30+ day delinquency rate 2.51 2.96 2.88 2.71 2.74 30+ day delinquency rate (excluding acquired loans) 2.93 3.46 3.41 3.26 3.35 Capital Ratios(18) ----------------- Common equity Tier 1 capital ratio 13.0% N/A N/A N/A N/A Tier 1 common ratio N/A 12.2% 12.7% 12.0% 11.7% Tier 1 risk-based capital ratio 13.4 12.6 13.1 12.4 12.1 Total risk-based capital ratio 15.4 14.7 15.2 14.6 14.4 Tier 1 leverage ratio 10.4 10.1 10.0 9.7 9.1 Tangible common equity ("TCE") ratio 9.6 8.9 9.1 8.6 8.6
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 3: Consolidated Statements of Income(1) Three Months Ended ------------------ (Dollars in millions, except per share data) (unaudited) March 31, December 31, March 31, 2014 2013 2013 --- ---- ---- ---- Interest income: Loans, including loans held for sale $4,307 $4,398 $4,649 Investment securities 416 414 374 Other 30 27 28 --- --- --- Total interest income 4,753 4,839 5,051 ----- ----- ----- Interest expense: Deposits 276 288 326 Securitized debt obligations 38 40 56 Senior and subordinated notes 77 75 82 Other borrowings 12 13 17 --- --- --- Total interest expense 403 416 481 --- --- --- Net interest income 4,350 4,423 4,570 Provision for credit losses 735 957 885 --- --- --- Net interest income after provision for credit losses 3,615 3,466 3,685 ----- ----- ----- Non-interest income:(2) Service charges and other customer-related fees 474 504 550 Interchange fees, net 440 489 445 Net other-than-temporary impairment losses recognized (5) (1) (25) in earnings Other 111 129 11 --- --- --- Total non-interest income 1,020 1,121 981 ----- ----- --- Non-interest expense: Salaries and associate benefits 1,161 1,115 1,095 Occupancy and equipment 405 437 357 Marketing 325 427 317 Professional services 287 357 322 Communications and data processing 196 220 216 Amortization of intangibles(4) 143 166 177 Other 415 513 507 --- --- --- Total non-interest expense 2,932 3,235 2,991 ----- ----- ----- Income from continuing operations before income taxes 1,703 1,352 1,675 Income tax provision 579 477 541 --- --- --- Income from continuing operations, net of tax 1,124 875 1,134 Income/(Loss) from discontinued operations, net of tax(2) 30 (23) (78) --- --- --- Net income 1,154 852 1,056 Dividends and undistributed earnings allocated to participating securities(6) (5) (4) (5) Preferred stock dividends(6) (13) (13) (13) --- --- --- Net income available to common stockholders $1,136 $835 $1,038 ====== ==== ====== Basic earnings per common share:(6) Net income from continuing operations $1.94 $1.50 $1.92 Income/(Loss) from discontinued operations 0.05 (0.04) (0.13) ---- ----- ----- Net income per basic common share $1.99 $1.46 $1.79 ===== ===== ===== Diluted earnings per common share:(6) Net income from continuing operations $1.91 $1.46 $1.90 Income/(Loss) from discontinued operations 0.05 (0.03) (0.13) ---- ----- ----- Net income per diluted common share $1.96 $1.43 $1.77 ===== ===== ===== Weighted average common shares outstanding (in millions) for: Basic EPS 571.0 573.4 580.5 Diluted EPS 580.3 582.6 586.3 Dividends paid per common share $0.30 $0.30 $0.05
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 4: Consolidated Balance Sheets(1) (Dollars in millions)(unaudited) March 31, December 31, March 31, 2014 2013 2013 --- ---- ---- ---- Assets: Cash and cash equivalents: Cash and due from banks $3,373 $2,821 $1,947 Interest-bearing deposits with banks 2,641 3,131 4,563 Federal funds sold and securities purchased under agreements 168 339 236 to resell Total cash and cash equivalents 6,182 6,291 6,746 Restricted cash for securitization investors 550 874 1,018 Securities available for sale, at fair value 40,721 41,800 63,968 Securities held to maturity, at carrying value 20,150 19,132 - Loans held for investment: Unsecuritized loans held for investment 156,072 157,651 150,721 Restricted loans for securitization investors 36,869 39,548 40,612 ------ ------ ------ Total loans held for investment 192,941 197,199 191,333 Less: Allowance for loan and lease losses (4,098) (4,315) (4,606) ------ ------ ------ Net loans held for investment 188,843 192,884 186,727 Loans held for sale, at lower of cost or fair value 259 218 6,410 Premises and equipment, net 3,807 3,839 3,736 Interest receivable 1,325 1,418 1,378 Goodwill 13,974 13,978 13,900 Other 14,689 16,499 16,262 ------ ------ ------ Total assets $290,500 $296,933 $300,145 ======== ======== ======== Liabilities: Interest payable $259 $307 $310 Customer deposits: Non-interest bearing deposits 24,110 22,643 21,317 Interest-bearing deposits 184,214 181,880 191,093 ------- ------- ------- Total customer deposits 208,324 204,523 212,410 Securitized debt obligations 9,783 10,289 11,046 Other debt: Federal funds purchased and securities loaned or sold under 1,544 915 855 agreements to repurchase Senior and subordinated notes 14,891 13,134 13,255 Other borrowings 3,900 16,316 12,336 ----- ------ ------ Total other debt 20,335 30,365 26,446 Other liabilities 8,998 9,817 8,722 ----- ----- ----- Total liabilities 247,699 255,301 258,934 ------- ------- ------- Stockholders' equity: Preferred stock - - - Common stock 6 6 6 Additional paid-in capital, net 26,605 26,526 26,256 Retained earnings 21,259 20,292 17,791 Accumulated other comprehensive income ("AOCI") (710) (872) 473 Treasury stock, at cost (4,359) (4,320) (3,315) ------ ------ ------ Total stockholders' equity 42,801 41,632 41,211 ------ ------ ------ Total liabilities and stockholders' equity $290,500 $296,933 $300,145 ======== ======== ========
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 -4)
(1) Certain prior period amounts have been reclassified to conform to the current period presentation.
(2) We recorded the following related to mortgage representation and warranty losses: a benefit of $33 million in Q1 2014 (which includes a benefit of $47 million before taxes in discontinued operations and a provision of $14 million before taxes in continuing operations), a provision of $33 million in Q4 2013, a benefit of $4 million in Q3 2013, and provisions of $183 million and $97 million in Q2 2013 and Q1 2013 respectively. Historically, the majority of the provision for representation and warranty losses is included net of tax in discontinued operations, with the remaining amount included pre-tax in non-interest income. The mortgage representation and warranty reserve was $1.1 billion as of March 31, 2014, $1.2 billion as of December 31, 2013 and $994 million as of March 31, 2013.
(3) Total net revenue was reduced by $163 million in Q1 2014, $185 million in Q4 2013, $154 million in Q3 2013, $192 million in Q2 2013 and $265 million in Q1 2013 for the estimated uncollectible amount of billed finance charges and fees.
(4) Includes purchased credit card relationship ("PCCR") intangible amortization of $98 million in Q1 2014, $102 million in Q4 2013, $106 million in Q3 2013, $110 million in Q2 2013 and $116 million in Q1 2013, the substantial majority of which is attributable to the 2012 U.S. card acquisition. Includes core deposit intangible amortization of $36 million in Q1 2014, $38 million in Q4 2013, $40 million in Q3 2013, $43 million in Q2 2013 and $44 million in Q1 2013.
(5) Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense.
(6) 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.
(7) Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
(8) Loans held for investment includes acquired loans accounted for based on cash flows expected to be collected. We use the term "acquired loans" to refer to a limited portion of the credit card loans acquired in the 2012 U.S. card acquisition and the substantial majority of loans acquired in the ING Direct and Chevy Chase Bank acquisitions, which 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"). The table below presents amounts related to acquired loans accounted for under SOP 03-3:
(Dollars in millions) (unaudited) 2014 2013 2013 2013 2013 Q1 Q4 Q3 Q2 Q1 --- --- --- --- --- --- Acquired loans accounted for under SOP 03-3: Period-end unpaid principal balance $28,549 $29,761 $31,377 $33,620 $36,216 Period-end loans held for investment 27,390 28,550 30,080 32,275 34,943 Average loans held for investment 27,760 29,055 30,713 33,144 35,706
(9) Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(10) Calculated based on annualized net interest income for the period divided by average interest- earning assets for the period.
(11) Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period.
(12) Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
(13) 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.
(14) 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. Our calculation of return on average tangible common equity may not be comparable to similarly titled measures reported by other companies. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
(15) Calculated based on annualized non-interest expense for the period divided by average loans held for investment for the period.
(16) Calculated based on non- interest expense for the period divided by total net revenue for the period.
(17) Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(18) Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. We calculated regulatory capital measures for periods prior to the first quarter of 2014 under Basel I. Ratios as of the end of Q1 2014 are preliminary and therefore subject to change. TCE ratio is a non-GAAP measure. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 6: Average Balances, Net Interest Income and Net Interest Margin(1) 2014 Q1 2013 Q4 2013 Q1 ------- ------- ------- (Dollars in millions)(unaudited) Average Interest Yield/ Average Interest Yield/ Average Interest Yield/ Balance Income/ Rate(2) Balance Income/ Rate(2) Balance Income/ Rate(2) Expense(2) Expense(2) Expense(2) --- --------- --------- --------- Interest-earning assets: Loans, including loans held for sale $194,020 $4,307 8.88% $193,368 $4,398 9.10% $200,441 $4,649 9.28% Investment securities(3) 62,124 416 2.68 62,919 414 2.63 64,798 374 2.31 Cash equivalents and other 6,515 30 1.84 6,670 27 1.62 7,106 28 1.58 ----- --- ---- ----- --- ---- ----- --- ---- Total interest-earning assets $262,659 $4,753 7.24% $262,957 $4,839 7.36% $272,345 $5,051 7.42% -------- ------ ---- -------- ------ ---- -------- ------ ---- Interest-bearing liabilities: Interest-bearing deposits $184,183 $276 0.60% $184,206 $288 0.63% $190,612 $326 0.68% Securitized debt obligations 10,418 38 1.46 9,873 40 1.62 11,758 56 1.91 Senior and subordinated notes 14,162 77 2.17 12,765 75 2.35 11,984 82 2.74 Other borrowings 11,398 12 0.42 13,825 13 0.38 17,832 17 0.38 ------ --- ---- ------ --- ---- ------ --- ---- Total interest-bearing liabilities $220,161 $403 0.73% $220,669 $416 0.75% $232,186 $481 0.83% -------- ---- ---- -------- ---- ---- -------- ---- ---- Net interest income/spread $4,350 6.51% $4,423 6.61% $4,570 6.59% ====== ------ ------ Impact of non-interest bearing funding 0.11 0.12 0.12 ---- ---- ---- Net interest margin 6.62% 6.73% 6.71% ==== ==== ====
(1) Certain prior period amounts have been reclassified to conform to the current period presentation.
(2) 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.
(3) Prior to Q2 2013, average balances for investment securities were calculated based on fair value amounts. Effective Q2 2013, average balances are calculated based on the amortized cost of investment securities. The impact of this change on prior period yields is not material.
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 7: Loan Information and Performance Statistics(1) (Dollars in millions)(unaudited) 2014 2013 2013 2013 2013 Q1 Q4 Q3 Q2 Q1 --- --- --- --- --- Period-end Loans Held For Investment ------------------------------------ Credit card: Domestic credit card $68,275 $73,255 $69,936 $70,490 $70,361 International credit card 7,575 8,050 8,031 7,820 8,036 ----- ----- ----- ----- ----- Total credit card 75,850 81,305 77,967 78,310 78,397 ------ ------ ------ ------ ------ Consumer banking: Auto 33,080 31,857 30,803 29,369 27,940 Home loan 34,035 35,282 36,817 39,163 41,931 Retail banking 3,612 3,623 3,665 3,686 3,742 ----- ----- ----- ----- ----- Total consumer banking 70,727 70,762 71,285 72,218 73,613 ------ ------ ------ ------ ------ Commercial banking: Commercial and multifamily real estate 21,256 20,750 19,523 18,570 17,878 Commercial and industrial 24,064 23,309 21,848 21,170 20,127 ------ ------ ------ ------ ------ Total commercial lending 45,320 44,059 41,371 39,740 38,005 Small-ticket commercial real estate 910 952 1,028 1,065 1,145 --- --- ----- ----- ----- Total commercial banking 46,230 45,011 42,399 40,805 39,150 ------ ------ ------ ------ ------ Other loans 134 121 163 179 173 --- --- --- --- --- Total $192,941 $197,199 $191,814 $191,512 $191,333 ======== ======== ======== ======== ======== Average Loans Held For Investment --------------------------------- Credit card: Domestic credit card $69,810 $70,368 $69,947 $69,966 $74,714 International credit card 7,692 7,899 7,782 7,980 8,238 ----- ----- ----- ----- ----- Total credit card 77,502 78,267 77,729 77,946 82,952 ------ ------ ------ ------ ------ Consumer banking: Auto 32,387 31,424 30,157 28,677 27,477 Home loan 34,646 35,974 37,852 40,532 43,023 Retail banking 3,630 3,635 3,655 3,721 3,786 ----- ----- ----- ----- ----- Total consumer banking 70,663 71,033 71,664 72,930 74,286 ------ ------ ------ ------ ------ Commercial banking: Commercial and multifamily real estate 20,962 19,928 19,047 18,084 17,454 Commercial and industrial 23,541 22,445 21,491 20,332 19,949 ------ ------ ------ ------ ------ Total commercial lending 44,503 42,373 40,538 38,416 37,403 Small-ticket commercial real estate 932 986 1,038 1,096 1,173 --- --- ----- ----- ----- Total commercial banking 45,435 43,359 41,576 39,512 38,576 ------ ------ ------ ------ ------ Other loans 122 154 166 174 183 --- --- --- --- --- Total $193,722 $192,813 $191,135 $190,562 $195,997 ======== ======== ======== ======== ======== Net Charge-off Rates -------------------- Credit card: Domestic credit card 4.01% 3.89% 3.67% 4.28% 4.43% International credit card 4.17 4.74 4.71 5.08 4.59 ---- ---- ---- ---- ---- Total credit card 4.02 3.98 3.78 4.36 4.45 ---- ---- ---- ---- ---- Consumer banking: Auto 1.66 2.30 2.01 1.28 1.78 Home loan 0.06 0.03 0.06 0.03 0.04 Retail banking 0.95 1.09 1.38 1.50 1.85 ---- ---- ---- ---- ---- Total consumer banking 0.84 1.09 0.95 0.60 0.78 ---- ---- ---- ---- ---- Commercial banking: Commercial and multifamily real estate 0.01 (0.11) (0.11) 0.04 0.01 Commercial and industrial 0.03 0.04 0.18 0.03 0.04 ---- ---- ---- ---- ---- Total commercial lending 0.02 (0.03) 0.04 0.03 0.03 Small-ticket commercial real estate 0.67 (0.81) 1.26 0.45 1.41 ---- ----- ---- ---- ---- Total commercial banking 0.04 (0.05) 0.07 0.04 0.07 ---- ----- ---- ---- ---- Other loans (0.68) 4.68 12.17 13.10 14.53 ----- ---- ----- ----- ----- Total 1.92% 2.01% 1.92% 2.03% 2.20% ==== ==== ==== ==== ==== 30+ Day Performing Delinquency Rates ------------------------------------ Credit card: Domestic credit card 3.02% 3.43% 3.46% 3.05% 3.37% International credit card 3.59 3.71 3.86 3.84 4.04 ---- ---- ---- ---- ---- Total credit card 3.08 3.46 3.51 3.13 3.44 ---- ---- ---- ---- ---- Consumer banking: Auto 5.29 6.85 6.29 6.03 5.58 Home loan 0.12 0.16 0.14 0.12 0.14 Retail banking 0.74 0.69 0.68 0.68 0.83 ---- ---- ---- ---- ---- Total consumer banking 2.57% 3.20% 2.82% 2.55% 2.24% ---- ---- ---- ---- ---- Nonperforming Asset Rates(2) --------------------------- Credit card: International credit card 1.07% 1.10% 1.16% 1.20% 1.13% ---- ---- ---- ---- ---- Total credit card 0.11 0.11 0.12 0.12 0.12 ---- ---- ---- ---- ---- Consumer banking: Auto(10) 0.81 1.11 0.92 0.81 0.71 Home loan 1.17 1.14 1.08 1.08 1.02 Retail banking 1.15 1.13 1.10 1.11 1.24 ---- ---- ---- ---- ---- Total consumer banking 1.00 1.12 1.01 0.97 0.91 ---- ---- ---- ---- ---- Commercial banking: Commercial and multifamily real estate 0.31 0.29 0.40 0.56 0.76 Commercial and industrial 0.40 0.44 0.65 0.65 0.64 ---- ---- ---- ---- ---- Total commercial lending 0.35 0.37 0.53 0.61 0.69 Small-ticket commercial real estate 0.73 0.43 1.49 1.11 2.42 ---- ---- ---- ---- ---- Total commercial banking 0.36% 0.37% 0.56% 0.62% 0.74% ---- ---- ---- ---- ----
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 8: Financial & Statistical Summary-Credit Card Business 2014 2013 2013 2013 2013 (Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1 -------------------------------- --- --- --- --- --- Credit Card ----------- Earnings: Net interest income $2,525 $2,576 $2,757 $2,804 $2,830 Non-interest income 785 833 834 832 821 --- --- --- --- --- Total net revenue 3,310 3,409 3,591 3,636 3,651 Provision for credit losses 558 751 617 713 743 Non-interest expense 1,726 1,868 1,904 1,819 1,848 ----- ----- ----- ----- ----- Income from continuing operations before taxes 1,026 790 1,070 1,104 1,060 Income tax provision 358 274 376 385 374 --- --- --- --- --- Income from continuing operations, net of tax $668 $516 $694 $719 $686 ==== ==== ==== ==== ==== Selected performance metrics: Period-end loans held for investment $75,850 $81,305 $77,967 $78,310 $78,397 Average loans held for investment 77,502 78,267 77,729 77,946 82,952 Average yield on loans held for investment(4) 14.43% 14.64% 15.72% 15.94% 15.16% Total net revenue margin(5) 17.08 17.43 18.48 18.66 17.61 Net charge-off rate 4.02 3.98 3.78 4.36 4.45 30+ day performing delinquency rate 3.08 3.46 3.51 3.13 3.44 30+ day delinquency rate 3.16 3.54 3.60 3.22 3.53 Nonperforming loan rate(3) 0.11 0.11 0.12 0.12 0.12 Card loan premium amortization and other intangible accretion(6) $37 $39 $45 $57 $57 PCCR intangible amortization 98 102 106 110 116 Purchase volume(7) 47,434 54,245 50,943 50,788 45,098 Domestic Card ------------- Earnings: Net interest income $2,255 $2,303 $2,492 $2,536 $2,556 Non-interest income 702 747 749 737 724 --- --- --- --- --- Total net revenue 2,957 3,050 3,241 3,273 3,280 Provision for credit losses 486 679 529 647 647 Non-interest expense 1,545 1,664 1,713 1,635 1,633 ----- ----- ----- ----- ----- Income from continuing operations before taxes 926 707 999 991 1,000 Income tax provision 331 252 355 353 356 --- --- --- --- --- Income from continuing operations, net of tax $595 $455 $644 $638 $644 ==== ==== ==== ==== ==== Selected performance metrics: Period-end loans held for investment $68,275 $73,255 $69,936 $70,490 $70,361 Average loans held for investment 69,810 70,368 69,947 69,966 74,714 Average yield on loans held for investment(4) 14.19% 14.44% 15.65% 15.91% 15.07% Total net revenue margin(5) 16.94 17.34 18.53 18.71 17.56 Net charge-off rate 4.01 3.89 3.67 4.28 4.43 30+ day performing delinquency rate 3.02 3.43 3.46 3.05 3.37 30+ day delinquency rate 3.02 3.43 3.46 3.05 3.37 Purchase volume(7) $44,139 $50,377 $47,420 $47,273 $41,831 International Card ------------------ Earnings: Net interest income $270 $273 $265 $268 $274 Non-interest income 83 86 85 95 97 --- --- --- --- --- Total net revenue 353 359 350 363 371 Provision for credit losses 72 72 88 66 96 Non-interest expense 181 204 191 184 215 --- --- --- --- --- Income from continuing operations before taxes 100 83 71 113 60 Income tax provision 27 22 21 32 18 --- --- --- --- --- Income from continuing operations, net of tax $73 $61 $50 $81 $42 === === === === === Selected performance metrics: Period-end loans held for investment $7,575 $8,050 $8,031 $7,820 $8,036 Average loans held for investment 7,692 7,899 7,782 7,980 8,238 Average yield on loans held for investment 16.64% 16.48% 16.35% 16.19% 15.97% Total net revenue margin 18.38 18.20 17.99 18.20 18.01 Net charge-off rate 4.17 4.74 4.71 5.08 4.59 30+ day performing delinquency rate 3.59 3.71 3.86 3.84 4.04 30+ day delinquency rate 4.41 4.56 4.78 4.79 4.93 Nonperforming loan rate(3) 1.07 1.10 1.16 1.20 1.13 Purchase volume(7) $3,295 $3,868 $3,523 $3,515 $3,267
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 9: Financial & Statistical Summary-Consumer Banking Business 2014 2013 2013 2013 2013 (Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1 -------------------------------- --- --- --- --- --- Consumer Banking ---------------- Earnings: Net interest income $1,433 $1,468 $1,481 $1,478 $1,478 Non-interest income 150 195 184 189 181 --- --- --- --- --- Total net revenue 1,583 1,663 1,665 1,667 1,659 Provision for credit losses 140 212 202 67 175 Non-interest expense 930 1,018 927 910 890 --- ----- --- --- --- Income from continuing operations before taxes 513 433 536 690 594 Income tax provision 183 154 191 246 211 --- --- --- --- --- Income from continuing operations, net of tax $330 $279 $345 $444 $383 ==== ==== ==== ==== ==== Selected performance metrics: Period-end loans held for investment $70,727 $70,762 $71,285 $72,218 $73,613 Average loans held for investment 70,663 71,033 71,664 72,930 74,286 Average yield on loans held for investment 6.18% 6.30% 6.21% 5.99% 5.93% Auto loan originations $4,727 $4,322 $4,752 $4,525 $3,789 Period-end deposits 171,529 167,652 168,437 169,789 172,605 Average deposits 168,676 167,870 169,082 170,733 171,089 Average deposit interest rate 0.57% 0.60% 0.63% 0.64% 0.64% Core deposit intangible amortization $30 $32 $34 $35 $37 Net charge-off rate 0.84% 1.09% 0.95% 0.60% 0.78% 30+ day performing delinquency rate 2.57 3.20 2.82 2.55 2.24 30+ day delinquency rate 3.14 3.89 3.46 3.15 2.81 Nonperforming loan rate(3) 0.74 0.86 0.79 0.78 0.74 Nonperforming asset rate(2) 1.00 1.12 1.01 0.97 0.91 Period-end loans serviced for others $6,868 $7,665 $14,043 $14,313 $14,869
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 10: Financial & Statistical Summary-Commercial Banking Business(1) 2014 2013 2013 2013 2013 (Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1 -------------------------------- --- --- --- --- --- Commercial Banking ------------------ Earnings: Net interest income $421 $447 $424 $402 $401 Non-interest income 87 131 87 93 84 --- --- --- --- --- Total net revenue(8)(11) 508 578 511 495 485 Provision for credit losses 40 (6) 31 (14) (35) Non-interest expense 255 281 228 228 221 --- --- --- --- --- Income from continuing operations before taxes 213 303 252 281 299 Income tax provision 76 108 90 100 106 --- --- --- --- --- Income from continuing operations, net of tax $137 $195 $162 $181 $193 ==== ==== ==== ==== ==== Selected performance metrics: Period-end loans held for investment $46,230 $45,011 $42,399 $40,805 $39,150 Average loans held for investment 45,435 43,359 41,576 39,512 38,576 Average yield on loans held for investment(8) 3.47% 3.92% 3.87% 3.84% 3.91% Period-end deposits $31,485 $30,567 $30,592 $30,869 $30,275 Average deposits 31,627 31,033 30,685 30,746 30,335 Average deposit interest rate 0.25% 0.25% 0.27% 0.26% 0.28% Core deposit intangible amortization $6 $6 $6 $8 $7 Net charge-off rate 0.04% (0.05)% 0.07% 0.04% 0.07% Nonperforming loan rate(3) 0.33 0.33 0.47 0.60 0.71 Nonperforming asset rate(2) 0.36 0.37 0.56 0.62 0.74 Risk category:(9) Noncriticized $44,904 $43,593 $40,940 $39,168 $37,359 Criticized performing 952 1,007 968 1,087 1,191 Criticized nonperforming 150 149 201 244 277 --- --- --- --- --- Total risk-rated loans 46,006 44,749 42,109 40,499 38,827 Acquired commercial loans 224 262 290 306 323 --- --- --- --- --- Total commercial loans $46,230 $45,011 $42,399 $40,805 $39,150 ======= ======= ======= ======= ======= % of period-end commercial loans held for investment: Noncriticized 97.1% 96.9% 96.5% 96.0% 95.4% Criticized performing 2.1 2.2 2.3 2.7 3.1 Criticized nonperforming 0.3 0.3 0.5 0.6 0.7 --- --- --- --- --- Total risk-rated loans 99.5 99.4 99.3 99.3 99.2 Acquired commercial loans 0.5 0.6 0.7 0.7 0.8 --- --- --- --- --- Total commercial loans 100.0% 100.0% 100.0% 100.0% 100.0% ===== ===== ===== ===== =====
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 11: Financial & Statistical Summary-Other and Total(1) (Dollars in millions) (unaudited) 2014 2013 2013 2013 2013 Q1 Q4 Q3 Q2 Q1 --- --- --- --- --- --- Other ----- Earnings: Net interest expense $(29) $(68) $(102) $(131) $(139) Non-interest income (2) (38) (14) (29) (105) --- --- --- --- ---- Total net revenue(11) (31) (106) (116) (160) (244) Provision for credit losses (3) - (1) (4) 2 Non-interest expense 21 68 50 61 32 --- --- --- --- --- Loss from continuing operations before taxes (49) (174) (165) (217) (278) Income tax benefit (38) (59) (82) (100) (150) --- --- --- ---- ---- Loss from continuing operations, net of tax $(11) $(115) $(83) $(117) $(128) ==== ===== ==== ===== ===== Selected performance metrics: Period-end loans held for investment $134 $121 $163 $179 $173 Average loans held for investment 122 154 166 174 183 Period-end deposits 5,310 6,304 7,805 9,207 9,530 Average deposits 5,539 6,803 8,573 9,171 10,131 Total ----- Earnings: Net interest income $4,350 $4,423 $4,560 $4,553 $4,570 Non-interest income 1,020 1,121 1,091 1,085 981 ----- ----- ----- ----- --- Total net revenue 5,370 5,544 5,651 5,638 5,551 Provision for credit losses 735 957 849 762 885 Non-interest expense 2,932 3,235 3,109 3,018 2,991 ----- ----- ----- ----- ----- Income from continuing operations before taxes 1,703 1,352 1,693 1,858 1,675 Income tax provision 579 477 575 631 541 --- --- --- --- --- Income from continuing operations, net of tax $1,124 $875 $1,118 $1,227 $1,134 ====== ==== ====== ====== ====== Selected performance metrics: Period-end loans held for investment $192,941 $197,199 $191,814 $191,512 $191,333 Average loans held for investment 193,722 192,813 191,135 190,562 195,997 Period-end deposits 208,324 204,523 206,834 209,865 212,410 Average deposits 205,842 205,706 208,340 210,650 211,555
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 12: Notes to Loan and Business Segment Disclosures (Tables 7 -11)
(1) Certain prior period amounts have been reclassified to conform to the current period presentation.
(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. Nonperforming assets related to acquired loans are excluded from the calculation.
(3) The nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end loans held for investment for each respective category.
(4) The transfer of the Best Buy Stores, L.P. ("Best Buy") portfolio to held for sale resulted in an increase in the average yield for Domestic Card and Total Credit Card of 121 basis points and 110 basis points, respectively, in Q3 2013, 168 basis points and 152 basis points, respectively, in Q2 2013 and 107 basis points and 97 basis points, respectively, in Q1 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.
(5) The transfer of the Best Buy portfolio to held for sale resulted in an increase in the net revenue margin for Domestic Card and Total Credit Card of 136 basis points and 123 basis points, respectively, in Q3 2013, 188 basis points and 169 basis points, respectively, in Q2 2013 and 123 basis points and 112 basis points, respectively, in Q1 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.
(6) Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the 2012 U.S. card acquisition.
(7) Includes credit card purchase transactions, net of returns for both loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.
(8) 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%.
(9) Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
(10) Includes the net realizable value of auto loans that have been charged down as a result of a bankruptcy filing and repossessed assets obtained in satisfaction of auto loans.
(11) Commercial Banking revenue related to qualified housing credits is presented on a taxable-equivalent basis. As a result of the adoption of ASU 2014-01 "Accounting for Investments in Qualified Affordable Housing Projects", losses related to these investments are now recognized, along with the associated tax benefits, as a component of income taxes attributable to continuing operations instead of non-interest expense. As such, losses related to these investments decrease the overall tax benefits recognized as a component of income taxes attributable to continuing operations and taxable- equivalent revenue in the Commercial Banking segment. This decrease in revenue is offset by an increase in revenue in the Other segment. Prior period amounts have been adjusted to conform to current period presentation.
CAPITAL ONE FINANCIAL CORPORATION (COF) Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital 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"), tangible assets, and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. 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.
(Dollars in millions)(unaudited) 2014 2013 2013 2013 2013 Q1 Q4 Q3 Q2 Q1 --- --- --- --- --- Average Equity to Non-GAAP Average Tangible Common Equity --------------------------------------------------------- Average stockholders' equity $42,859 42,355 $41,185 $41,490 $40,880 Adjustments: Average goodwill and other intangible assets(1) (15,727) (15,847) (15,829) (15,974) (16,141) Noncumulative perpetual preferred stock(2) (853) (853) (853) (853) (853) ---- ---- ---- ---- ---- Average tangible common equity $26,279 $25,655 $24,503 $24,663 $23,886 ======= ======= ======= ======= ======= End of Period Stockholders' Equity to Non-GAAP Tangible Common Equity --------------------------------------------------------------------- End of period stockholders' equity $42,801 $41,632 $41,645 $40,947 $41,211 Adjustments: Goodwill and other intangible assets(1) (15,666) (15,784) (15,760) (15,872) (15,992) Noncumulative perpetual preferred stock(2) (853) (853) (853) (853) (853) ---- ---- ---- ---- ---- Tangible common equity $26,282 $24,995 $25,032 $24,222 $24,366 ======= ======= ======= ======= ======= Average Assets to Average Tangible Assets ----------------------------------------- Average assets $294,275 $294,040 $294,919 $297,748 $303,226 Adjustments: Average goodwill and other intangible assets(1) (15,727) (15,847) (15,829) (15,974) (16,141) ------- ------- ------- ------- ------- Average tangible assets $278,548 $278,193 $279,090 $281,774 $287,085 ======== ======== ======== ======== ======== End of Period Assets to Tangible Assets --------------------------------------- End of period assets $290,500 $296,933 $289,866 $296,524 $300,145 Adjustments: Goodwill and other intangible assets(1) (15,666) (15,784) (15,760) (15,872) (15,992) ------- ------- ------- ------- ------- Tangible assets $274,834 $281,149 $274,106 $280,652 $284,153 ======== ======== ======== ======== ======== Non-GAAP TCE Ratio ------------------ Tangible common equity $26,282 $24,995 $25,032 $24,222 $24,366 Tangible assets 274,834 281,149 274,106 280,652 284,153 TCE ratio(3) 9.6% 8.9% 9.1% 8.6% 8.6%
Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. Prior to January 1, 2014, we calculated regulatory capital under Basel I as shown in footnote 13.
(Dollars in millions)(unaudited) 2014 2013 2013 2013 2013 Q1 Q3 Q2 Q1 Q4 --- --- Regulatory Capital Ratios(4) Prior periods disclosed under Basel I. See footnote 13. ---------------------------- Common equity excluding AOCI $42,658 Adjustments: AOCI(5)(6) (182) Goodwill(1) (13,811) Intangible Assets(1)(6) (314) Other 83 --- Common equity Tier 1 capital 28,434 Adjustments: Tier 1 capital instruments(2) 853 Additional Tier 1 capital adjustments (30) --- Tier 1 capital 29,257 ------ Adjustments: Tier 2 capital instruments(2) 1,764 Qualifying allowance for loan and lease losses 2,751 Additional Tier 2 capital adjustments 6 --- Tier 2 capital 4,521 ----- Total risk-based capital(7) $33,778 ------- Risk-weighted assets(8) $219,151 ======== Average assets for the leverage ratio $280,907 ======== Common equity Tier 1 capital ratio(9) 13.0% Tier 1 risk-based capital ratio(10) 13.4 Total risk-based capital ratio(11) 15.4 Tier 1 leverage ratio(12) 10.4
(1) Includes impact of related deferred taxes
(2) Includes related surplus
(3) TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
(4) Regulatory capital ratios as of the end of Q1 2014 are preliminary and therefore subject to change.
(5) Amounts presented are net of tax.
(6) Amounts based on transition provisions for regulatory capital deductions and adjustments of 20% for 2014.
Total risk-based capital equals the sum of Tier 1 capital and Tier 2 (7) capital.
(8) Risk-weighted assets continue to be calculated based on Basel I in 2014 consistent with the transition provisions.
(9) Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
(10) Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(11) Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk- weighted assets.
(12) Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
(13) Table below shows prior period regulatory capital measures calculated under Basel I. We adopted ASU 2014-01 "Accounting for Investments in Qualified Affordable Housing Projects" as of January 1, 2014. Regulatory measures calculated under Basel I for prior quarters have been restated to conform to this presentation.
(Dollars in millions)(unaudited) 2013 2013 2013 2013 Q4 Q3 Q2 Q1 --- --- --- --- --- Total stockholders' equity $41,632 $41,645 $40,947 $41,211 Adjustments: Net unrealized (gains) losses on AFS securities recorded in AOCI 791 736 503 (583) Net (gains) losses on cash flow hedges recorded in AOCI 136 123 175 15 Disallowed goodwill and other intangible assets (14,326) (14,263) (14,309) (14,360) Disallowed deferred tax assets - - - - Noncumulative perpetual preferred stock (853) (853) (853) (853) Other (5) (5) (5) (4) --- --- --- --- Tier 1 common capital 27,375 27,383 26,458 25,426 Adjustments: Noncumulative perpetual preferred stock 853 853 853 853 Tier 1 restricted core capital items 2 2 2 1 --- --- --- --- Tier 1 capital 28,230 28,238 27,313 26,280 ------ ------ ------ ------ Adjustments: Long-term debt qualifying as Tier 2 capital 1,914 1,909 2,104 2,121 Qualifying allowance for loan and lease losses 2,833 2,726 2,781 2,737 Other Tier 2 components 10 8 12 11 --- --- --- --- Tier 2 capital 4,757 4,643 4,897 4,869 ----- ----- ----- ----- Total risk-based capital $32,987 $32,881 $32,210 $31,149 ======= ======= ======= ======= Risk-weighted assets $224,556 $215,809 $220,150 $216,441 ======== ======== ======== ======== Average assets for the leverage ratio $280,574 $281,978 $282,962 $288,210 ======== ======== ======== ======== Tier 1 common ratio 12.2% 12.7% 12.0% 11.7% Tier 1 risk-based capital ratio 12.6 13.1 12.4 12.1 Total risk-based capital ratio 14.7 15.2 14.6 14.4 Tier 1 leverage ratio 10.1 10.0 9.7 9.1
SOURCE Capital One Financial Corporation