CAPITAL ONE FINANCIAL CORPORATION MCLEAN, Va., Jan. 22, 2015 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2014 of $999 million, or $1.73 per diluted common share, compared to the third quarter of 2014 with net income of $1.1 billion, or $1.86 per diluted common share, and the fourth quarter of 2013 with net income of $852 million, or $1.43 per diluted common share.
"2014 was a strong year for Capital One. We returned to growth in our Domestic Card business, delivered $10.1 billion in pre-provision earnings, and returned significant capital to our shareholders. We're poised to build on the momentum in 2015," said Richard D. Fairbank, Chairman and Chief Executive Officer. "Our strategic priorities for 2015 have not changed, and we remain focused on the levers to create value and sustain strong performance for our shareholders."
All comparisons below are for the full year of 2013 compared to the full year of 2014 unless otherwise noted.
2014 Full Year Income Summary:
-- Total net revenue remained flat at $22.3 billion.
-- Total non-interest expense decreased 1 percent to $12.2 billion.
-- Pre-provision earnings increased 1 percent to $10.1 billion.
-- Provision for credit losses increased 3 percent to $3.5 billion.
All comparisons below are for the fourth quarter of 2014 compared to the third quarter of 2014 unless otherwise noted.
Fourth Quarter 2014 Income Summary:
-- Total net revenue increased 3 percent to $5.8 billion.
-- Total non-interest expense increased 10 percent to $3.3 billion:
-- 30 percent increase in marketing
-- 8 percent increase in operating expense
-- Pre-provision earnings decreased 5 percent to $2.5 billion.
-- Provision for credit losses increased 12 percent to $1.1 billion.
-- Mortgage representation & warranty benefit of $41 million ($26 million
net of tax) in discontinued operations.
Fourth Quarter 2014 Balance Sheet Summary:
-- Common equity Tier 1 capital ratio under Basel III Standardized Approach
of 12.4 percent at December 31, 2014.
-- Net interest margin of 6.81 percent, up 12 basis points.
-- Period-end loans held for investment in the quarter increased $6.7
billion, or 3 percent, to $208.3 billion.
-- Domestic Card period-end loans increased $4.6 billion, or 6 percent,
to $77.7 billion.
-- Commercial Banking period-end loans increased $1.1 billion, or 2
percent, to $50.9 billion.
-- Consumer Banking period-end loans increased $378 million, or 1
percent, to $71.4 billion:
-- Auto period-end loans increased $1.6 billion, or 4 percent, to
$37.8 billion.
-- Home loans period-end loans decreased $1.2 billion, or 4
percent, to $30.0 billion, driven by run-off of acquired
portfolios.
-- Average loans held for investment in the quarter increased $4.0 billion,
or 2 percent, to $203.4 billion.
-- Domestic Card average loans increased $2.2 billion, or 3 percent, to
$74.0 billion.
-- Commercial Banking average loans increased $1.6 billion, or 3
percent, to $50.3 billion.
-- Consumer Banking average loans increased $206 million, or less than
1 percent, to $71.3 billion:
-- Auto average loans increased $1.5 billion, or 4 percent, to
$37.1 billion.
-- Home loans average loans decreased by $1.3 billion, or 4
percent, to $30.6 billion, driven by run-off of acquired
portfolios.
-- Period-end total deposits increased $1.3 billion, or less than 1
percent, to $205.5 billion, while average deposits increased $156
million to $205.4 billion.
-- Interest-bearing deposit rate remained flat at 0.60 percent.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on January 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 January 31, 2015 at 5:00 PM, Eastern Time.
Forward-Looking Statements
Certain statements in this release are forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 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 $205.5 billion in deposits and $308.9 billion in total assets as of December 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 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
Fourth Quarter 2014(1)(2)
Table of Contents
Capital One Financial Corporation Consolidated Results
Table 1: Financial Summary-Consolidated
Table 2: Selected Metrics-Consolidated
Table 3: Consolidated Statements of Income
Table 4: Consolidated Balance Sheets
Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1-4)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
Table 7: Loan Information and Performance Statistics
Business Segments Detail
Table 8: Financial Summary-Business Segments
Table 9: Financial & Statistical Summary-Credit Card Business
Table 10: Financial & Statistical Summary-Consumer Banking Business
Table 11: Financial & Statistical Summary-Commercial Banking Business
Table 12: Financial & Statistical Summary-Other and Total
Table 13: Notes to Loan and Business Segments Disclosures (Tables 7-12)
Other
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures
(1) The information contained
in this Financial
Supplement is
preliminary and based on
data available at the
time of the earnings
presentation. Investors
should refer to our
Annual Report on Form
10-K for the period
ended December 31, 2014
once it is filed with
the Securities and
Exchange Commission.
(2) We adopted ASU 2014-01
"Accounting for Investments in
Qualified Affordable Housing
Projects" as of January 1,
2014. Prior period results and
related metrics have been
recast to conform to this
presentation.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary-Consolidated(1)
2014 Q4 vs. Year Ended 2014
----------- ----------
(Dollars in millions, except per share data and 2014 2014 2014 2014 2013 2014 2013 2014 2013 vs.
as noted) (unaudited)
--------------------
Q4 Q3 Q2 Q1 Q4 Q3 Q4 2013
--- --- --- --- --- --- --- ----
Earnings
--------
Net interest income $4,656 $4,497 $4,315 $4,350 $4,423 4% 5% $17,818 $18,106 (2)%
Non-interest income(2) 1,157 1,142 1,153 1,020 1,121 1 3 4,472 4,278 5
----- ----- ----- -----
Total net revenue(3) 5,813 5,639 5,468 5,370 5,544 3 5 22,290 22,384 -
----- ----- ----- ----- ----- ------ ------
Provision for credit losses 1,109 993 704 735 957 12 16 3,541 3,453 3
Non-interest expense:
Marketing 509 392 335 325 427 30 19 1,561 1,373 14
Amortization of intangibles 123 130 136 143 166 (5) (26) 532 671 (21)
Acquisition-related(4) 10 13 18 23 60 (23) (83) 64 193 (67)
Operating expenses 2,642 2,450 2,490 2,441 2,582 8 2 10,023 10,116 (1)
----- ----- ------
Total non-interest expense 3,284 2,985 2,979 2,932 3,235 10 2 12,180 12,353 (1)
----- ----- ----- ----- ----- ------ ------
Income from continuing operations before income taxes 1,420 1,661 1,785 1,703 1,352 (15) 5 6,569 6,578 -
Income tax provision 450 536 581 579 477 (16) (6) 2,146 2,224 (4)
--- --- --- --- --- ----- -----
Income from continuing operations, net of tax 970 1,125 1,204 1,124 875 (14) 11 4,423 4,354 2
Income (loss) from discontinued operations, net of tax(2) 29 (44) (10) 30 (23) ** ** 5 (233) **
--- --- --- --- --- --- ----
Net income 999 1,081 1,194 1,154 852 (8) 17 4,428 4,121 7
Dividends and undistributed earnings allocated to participating securities(5) (4) (5) (4) (5) (4) (20) - (18) (17) 6
Preferred stock dividends(5) (21) (20) (13) (13) (13) 5 62 (67) (53) 26
Net income available to common stockholders $974 $1,056 $1,177 $1,136 $835 (8) 17 $4,343 $4,051 7
------------------------------------------- ==== ====== ====== ====== ==== ====== ======
Common Share Statistics
-----------------------
Basic earnings per common share:(5)
Net income from continuing operations $1.71 $1.97 $2.09 $1.94 $1.50 (13)% 14% $7.70 $7.39 4%
Income (loss) from discontinued operations 0.05 (0.08) (0.02) 0.05 (0.04) ** ** 0.01 (0.40) **
-----
Net income per basic common share $1.76 $1.89 $2.07 $1.99 $1.46 (7) 21 $7.71 $6.99 10
===== ===== ===== ===== ===== ===== =====
Diluted earnings per common share:(5)
Net income from continuing operations $1.68 $1.94 $2.06 $1.91 $1.46 (13) 15 $7.58 $7.28 4
Income (loss) from discontinued operations 0.05 (0.08) (0.02) 0.05 (0.03) ** ** 0.01 (0.39) **
Net income per diluted common share $1.73 $1.86 $2.04 $1.96 $1.43 (7) 21 $7.59 $6.89 10
===== ===== ===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions) for:
Basic common shares 554.3 559.9 567.5 571.0 573.4 (1) (3) 563.1 579.7 (3)
Diluted common shares 561.8 567.9 577.6 580.3 582.6 (1) (4) 571.9 587.6 (3)
Common shares outstanding (period end, in millions) 553.4 558.5 561.8 572.9 572.7 (1) (3) 553.4 572.7 (3)
Dividends per common share $0.30 $0.30 $0.30 $0.30 $0.30 - - $1.20 $0.95 26
Tangible book value per common share (period end)(6) 50.32 48.72 47.90 45.88 43.64 3 15 50.32 43.64 15
Balance Sheet (Period End)
-------------------------
Loans held for investment(7) $208,316 $201,592 $198,528 $192,941 $197,199 3% 6% $208,316 $197,199 6%
Interest-earning assets 277,849 270,001 266,720 259,422 265,170 3 5 277,849 265,170 5
Total assets 308,854 300,202 298,317 290,500 296,933 3 4 308,854 296,933 4
Interest-bearing deposits 180,467 178,876 180,970 184,214 181,880 1 (1) 180,467 181,880 (1)
Total deposits 205,548 204,264 205,890 208,324 204,523 1 1 205,548 204,523 1
Borrowings 48,457 42,243 39,114 30,118 40,654 15 19 48,457 40,654 19
Common equity 43,231 42,682 42,477 41,948 40,779 1 6 43,231 40,779 6
Total stockholders' equity 45,053 44,018 43,815 42,801 41,632 2 8 45,053 41,632 8
--------------------------
Balance Sheet (Average Balances)
-------------------------------
Loans held for investment(7) $203,436 $199,422 $194,996 $193,722 $192,813 2% 6% $197,925 $192,614 3%
Interest-earning assets 273,436 268,890 263,570 262,659 262,957 2 4 267,174 266,423 -
Total assets 304,711 299,523 294,744 294,275 294,040 2 4 298,300 297,264 -
Interest-bearing deposits 179,401 179,928 182,053 184,183 184,206 - (3) 181,036 187,700 (4)
Total deposits 205,355 205,199 206,315 205,842 205,706 - - 205,675 209,045 (2)
Borrowings 43,479 40,314 35,658 35,978 36,463 8 19 38,882 37,807 3
Common equity 43,895 43,489 42,797 42,006 41,502 1 6 43,055 40,629 6
Total stockholders' equity 45,576 44,827 43,767 42,859 42,355 2 8 44,268 41,482 7
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics-Consolidated(1)
2014 Q4 vs. Year Ended 2014
----------- ----------
(Dollars in millions) (unaudited) 2014 2014 2014 2014 2013 2014 2013 2014 2013 vs.
-------------------------------- ---- ----
Q4 Q3 Q2 Q1 Q4 Q3 Q4 2013
--- --- --- --- --- --- --- ----
Performance Metrics
-------------------
Net interest income growth (quarter over quarter/ year over year) 4% 4% (1)% (2)% (3)% ** ** (2)% 9% **
Non-interest income growth (quarter over quarter/ year over year) 1 (1) 13 (9) 3 ** ** 5 (11) **
Total net revenue growth (quarter over quarter/ year over year) 3 3 2 (3) (2) ** ** 0 5 **
Total net revenue margin(8) 8.50 8.39 8.30 8.18 8.43 11 bps 7 bps 8.34 8.40 (6) bps
Net interest margin(9) 6.81 6.69 6.55 6.62 6.73 12 8 6.67 6.80 (13)
Return on average assets 1.27 1.50 1.63 1.53 1.19 (23) 8 1.48 1.46 2
Return on average tangible assets(10) 1.34 1.58 1.73 1.61 1.26 (24) 8 1.56 1.55 1
Return on average common equity(11) 8.61 10.12 11.09 10.53 8.27 (151) 34 10.08 10.54 (46)
Return on average tangible common equity(12) 13.28 15.73 17.47 16.83 13.38 (245) (10) 15.79 17.35 (156)
Non-interest expense as a % of average loans held for investment 6.46 5.99 6.11 6.05 6.71 47 (25) 6.15 6.41 (26)
Efficiency ratio(13) 56.49 52.93 54.48 54.60 58.35 356 (186) 54.64 55.19 (55)
Effective income tax rate for continuing operations 31.7 32.3 32.5 34.0 35.3 (60) (360) 32.7 33.8 (110)
Employees (in thousands), period end(14) 46.0 44.9 44.6 44.9 45.4 2% 1% 46.0 45.4 1%
---------------------------------------
Credit Quality Metrics(7)
------------------------
Allowance for loan and lease losses $4,383 $4,212 $3,998 $4,098 $4,315 4% 2% $4,383 $4,315 2%
Allowance as a % of loans held for investment 2.10% 2.09% 2.01% 2.12% 2.19% 1 bps (9) bps 2.10% 2.19% (9) bps
Allowance as a % of loans held for investment (excluding acquired
loans) 2.36 2.37 2.30 2.45 2.54 (1) (18) 2.36 2.54 (18)
Net charge-offs $915 $756 $812 $931 $969 21% (6)% $3,414 $3,934 (13)%
Net charge-off rate(15) 1.80% 1.52% 1.67% 1.92% 2.01% 28 bps (21) bps 1.72% 2.04% (32) bps
Net charge-off rate (excluding acquired loans)(15) 2.04 1.73 1.93 2.24 2.37 31 (33) 1.98 2.45 (47)
30+ day performing delinquency rate 2.62 2.46 2.24 2.22 2.63 16 (1) 2.62 2.63 (1)
30+ day performing delinquency rate (excluding acquired loans) 2.95 2.81 2.58 2.59 3.08 14 (13) 2.95 3.08 (13)
30+ day delinquency rate 2.91 2.76 2.53 2.51 2.96 15 (5) 2.91 2.96 (5)
30+ day delinquency rate (excluding acquired loans) 3.28 3.14 2.91 2.93 3.46 14 (18) 3.28 3.46 (18)
--------------------------------------------------
Capital Ratios(16)
-----------------
Common equity Tier 1 capital ratio 12.4% 12.7% 12.7% 13.0% N/A (30) bps N/A 12.4% N/A N/A
Tier 1 common ratio N/A N/A N/A N/A 12.2% N/A N/A N/A 12.2% N/A
Tier 1 risk-based capital ratio 13.2% 13.3% 13.3% 13.4% 12.6 (10) bps 60 bps 13.2% 12.6 60 bps
Total risk-based capital ratio 15.1 15.2 15.4 15.4 14.7 (10) 40 15.1 14.7 40
Tier 1 leverage ratio 10.8 10.6 10.7 10.4 10.1 20 70 10.8 10.1 70
Tangible common equity ("TCE") ratio(17) 9.5 9.6 9.5 9.6 8.9 (10) 60 9.5 8.9 60
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income(1)
Three Months Ended 2014 Q4 vs. Year Ended 2014
------------------ ----------- ----------
2014 2014 2013 2014 2013 2014 2013 vs.
---- ----
(Dollars in millions, except per share data and as noted) (unaudited) Q4 Q3 Q4 Q3 Q4 2013
-------------------------------------------------------------------- --- --- --- --- --- ----
Interest income:
Loans, including loans held for sale $4,613 $4,463 $4,398 3% 5% $17,662 $18,222 (3)%
Investment securities 405 398 414 2 (2) 1,628 1,575 3
Other 27 26 27 4 - 107 101 6
Total interest income 5,045 4,887 4,839 3 4 19,397 19,898 (3)
----- ----- ----- ------ ------
Interest expense:
Deposits 269 271 288 (1) (7) 1,088 1,241 (12)
Securitized debt obligations 36 32 40 13 (10) 145 183 (21)
Senior and subordinated notes 73 71 75 3 (3) 299 315 (5)
Other borrowings 11 16 13 (31) (15) 47 53 (11)
Total interest expense 389 390 416 - (6) 1,579 1,792 (12)
--- --- --- ----- -----
Net interest income 4,656 4,497 4,423 4 5 17,818 18,106 (2)
Provision for credit losses 1,109 993 957 12 16 3,541 3,453 3
Net interest income after provision for credit losses 3,547 3,504 3,466 1 2 14,277 14,653 (3)
----- ----- ----- ------ ------
Non-interest income:(2)
Service charges and other customer-related fees 462 471 504 (2) (8) 1,867 2,118 (12)
Interchange fees, net 523 523 489 - 7 2,021 1,896 7
Net other-than-temporary impairment recognized in earnings (9) (9) (1) - ** (24) (41) (41)
Other 181 157 129 15 40 608 305 99
Total non-interest income 1,157 1,142 1,121 1 3 4,472 4,278 5
----- ----- ----- ----- -----
Non-interest expense:
Salaries and associate benefits 1,179 1,128 1,115 5 6 4,593 4,480 3
Occupancy and equipment 474 419 437 13 8 1,745 1,541 13
Marketing 509 392 427 30 19 1,561 1,373 14
Professional services 329 304 357 8 (8) 1,216 1,347 (10)
Communications and data processing 203 196 220 4 (8) 798 897 (11)
Amortization of intangibles 123 130 166 (5) (26) 532 671 (21)
Other 467 416 513 12 (9) 1,735 2,044 (15)
Total non-interest expense 3,284 2,985 3,235 10 2 12,180 12,353 (1)
----- ----- ----- ------ ------
Income from continuing operations before income taxes 1,420 1,661 1,352 (15) 5 6,569 6,578 -
Income tax provision 450 536 477 (16) (6) 2,146 2,224 (4)
--- --- --- ----- -----
Income from continuing operations, net of tax 970 1,125 875 (14) 11 4,423 4,354 2
Income (loss) from discontinued operations, net of tax(2) 29 (44) (23) ** ** 5 (233) **
--- --- --- --- ----
Net income 999 1,081 852 (8) 17 4,428 4,121 7
Dividends and undistributed earnings allocated to participating securities(5) (4) (5) (4) (20) - (18) (17) 6
Preferred stock dividends(5) (21) (20) (13) 5 62 (67) (53) 26
Net income available to common stockholders $974 $1,056 $835 (8) 17 $4,343 $4,051 7
==== ====== ==== ====== ======
Basic earnings per common share:(5)
Net income from continuing operations $1.71 $1.97 $1.50 (13)% 14% $7.70 $7.39 4%
Income (loss) from discontinued operations 0.05 (0.08) (0.04) ** ** 0.01 (0.40) **
Net income per basic common share $1.76 $1.89 $1.46 (7) 21 $7.71 $6.99 10
===== ===== ===== ===== =====
Diluted earnings per common share:(5)
Net income from continuing operations $1.68 $1.94 $1.46 (13)% 15% $7.58 $7.28 4%
Income (loss) from discontinued operations 0.05 (0.08) (0.03) ** ** 0.01 (0.39) **
Net income per diluted common share $1.73 $1.86 $1.43 (7) 21 $7.59 $6.89 10
===== ===== ===== ===== =====
Weighted average common shares outstanding (in millions):
Basic common shares 554.3 559.9 573.4 (1) (3) 563.1 579.7 (3)
Diluted common shares 561.8 567.9 582.6 (1) (4) 571.9 587.6 (3)
Dividends paid per common share $0.30 $0.30 $0.30 - - $1.20 $0.95 26
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets(1)
December 31, 2014 vs.
---------------------
(Dollars in millions) (unaudited) December 31, 2014 September 30,
2014 December 31, 2013 September 30, December 31,
2014 2013
--- ---- ----
Assets:
Cash and cash equivalents:
Cash and due from banks $3,147 $2,652 $2,821 19% 12%
Interest-bearing deposits with banks 4,095 3,212 3,131 27 31
Federal funds sold and securities purchased under agreements to
resell 0 284 339 ** **
--- --- ---
Total cash and cash equivalents 7,242 6,148 6,291 18 15
Restricted cash for securitization investors 234 405 874 (42) (73)
Securities available for sale, at fair value 39,508 39,665 41,800 - (5)
Securities held to maturity, at carrying value 22,500 22,182 19,132 1 18
Loans held for investment:
Unsecuritized loans held for investment 171,771 165,021 157,651 4 9
Restricted loans for securitization investors 36,545 36,571 39,548 - (8)
------ ------ ------
Total loans held for investment 208,316 201,592 197,199 3 6
Allowance for loan and lease losses (4,383) (4,212) (4,315) 4 2
------ ------ ------
Net loans held for investment 203,933 197,380 192,884 3 6
Loans held for sale, at lower of cost or fair value 626 427 218 47 187
Premises and equipment, net 3,685 3,752 3,839 (2) (4)
Interest receivable 1,435 1,268 1,418 13 1
Goodwill 13,978 13,970 13,978 - -
Other assets 15,713 15,005 16,499 5 (5)
------ ------ ------
Total assets $308,854 $300,202 $296,933 3 4
======== ======== ========
Liabilities:
Interest payable $317 $249 $307 27% 3%
Deposits:
Non-interest bearing deposits 25,081 25,388 22,643 (1) 11
Interest-bearing deposits 180,467 178,876 181,880 1 (1)
------- ------- -------
Total deposits 205,548 204,264 204,523 1 1
Securitized debt obligations 11,624 10,508 10,289 11 13
Other debt:
Federal funds purchased and securities loaned or sold under
agreements to repurchase 880 2,330 915 (62) (4)
Senior and subordinated notes 18,684 18,534 13,134 1 42
Other borrowings 17,269 10,871 16,316 59 6
------ ------ ------
Total other debt 36,833 31,735 30,365 16 21
Other liabilities 9,479 9,428 9,817 1 (3)
----- ----- -----
Total liabilities 263,801 256,184 255,301 3 3
Stockholders' equity:
Preferred stock 0 0 0 - -
Common stock 6 6 6 - -
Additional paid-in capital, net 27,869 27,272 26,526 2 5
Retained earnings 23,973 23,162 20,292 4 18
Accumulated other comprehensive income ("AOCI") (430) (559) (872) (23) (51)
Treasury stock, at cost (6,365) (5,863) (4,320) 9 47
------ ------ ------
Total stockholders' equity 45,053 44,018 41,632 2 8
------ ------ ------
Total liabilities and stockholders' equity $308,854 $300,202 $296,933 3 4
======== ======== ========
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial & Selected Metrics
and Consolidated Financial Statements (Tables
1 -4)
** Not meaningful.
(1) Certain prior period amounts have
been recast to conform to the
current period presentation.
(2) We recorded the following related
to the mortgage representation and
warranty reserve:
2014 2014 2014 2014 2013
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4
-------------------------------- --- --- --- --- ---
(Benefit) provision for mortgage representation and
warranty losses before income taxes:
Recorded in continuing operations $(11) $ - $(29) $14 $3
Recorded in discontinued operations (41) 70 11 (47) 30
---
Total (benefit) provision for mortgage representation and
warranty losses before income taxes $(52) $70 $(18) $(33) $33
==== === ==== ==== ===
Historically, the majority of the
provision for representation and
warranty losses is included net of
tax in discontinued operations,
with the remaining amount included
before income taxes in non-
interest income. The mortgage
representation and warranty
reserve was $731 million as of
December 31, 2014, $1.1 billion as
of September 30, 2014 and $1.2
billion as of December 31, 2013.
(3) Total net revenue was reduced by
$165 million in Q4 2014, $164
million in Q3 2014, $153 million
in Q2 2014, $163 million in Q1
2014 and $185 million in Q4 2013
for the estimated uncollectible
amount of billed finance charges
and fees.
(4) Acquisition-related costs
include transaction costs,
legal and other professional or
consulting fees, restructuring
costs, and integration expense.
(5) Dividends and undistributed
earnings allocated to
participating securities,
earnings per share, and preferred
stock dividends are computed
independently for each period.
Accordingly, the sum of each
quarter may not agree to the
year-to-date total.
(6) Tangible book value per common
share is a non-GAAP measure
calculated based on tangible
common equity divided by common
shares outstanding. See "Table
14: Reconciliation of Non-GAAP
Measures and Calculation of
Regulatory Capital Measures" for
additional information on
tangible common equity.
(7) Loans held for investment
includes acquired loans. We use
the term "acquired loans" to
refer to a certain portion of
the loans acquired in the
following transactions: (i) the
February 17, 2012 transaction
where we acquired the assets and
assumed the liabilities of
substantially all of ING Direct;
(ii) the February 29, 2009 Chevy
Chase Bank acquisition; and
(iii) 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.
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"). The table below
presents amounts related to
acquired loans accounted for
under SOP 03-3:
2014 2014 2014 2014 2013
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4
-------------------------------- --- --- --- --- ---
Acquired loans accounted for under SOP 03-3:
Period-end unpaid principal balance $24,473 $25,726 $27,117 $28,549 $29,761
Period-end loans held for investment 23,500 24,685 26,019 27,390 28,550
Average loans held for investment 23,907 25,104 26,491 27,760 29,055
(8) Calculated based on annualized
total net revenue for the period
divided by average interest-
earning assets for the period.
(9) Calculated based on annualized net
interest income for the period
divided by average interest-
earning assets for the period.
(10) Calculated based on annualized
income from continuing
operations, net of tax, for the
period divided by average
tangible assets for the period.
Return on average tangible assets
is a non-GAAP measure and See
"Table 14: Reconciliation of Non-
GAAP Measures and Calculation of
Regulatory Capital Measures" for
additional information.
(11) Calculated based on the annualized
sum of (i) income from continuing
operations, net of tax; (ii) less
dividends and undistributed
earnings allocated to
participating securities; (iii)
less preferred stock dividends,
for the period, divided by
average common equity for the
period. Our calculation of return
on average common equity may not
be comparable to similarly titled
measures reported by other
companies.
(12) Calculated based on the annualized
sum of (i) income from continuing
operations, net of tax; (ii) less
dividends and undistributed
earnings allocated to
participating securities; (iii)
less preferred stock dividends,
for the period, divided by
average tangible common equity
for the period. Return on average
tangible common equity is a non-
GAAP measure and our calculation
may not be comparable to
similarly titled measures
reported by other companies. See
"Table 14: Reconciliation of Non-
GAAP Measures and Calculation of
Regulatory Capital Measures" for
additional information.
(13) Calculated based on total non-
interest expense for the period
divided by total net revenue for
the period.
(14) Effective Q2 2014, we changed our
presentation from total full-
time equivalent employees to
total employees. All prior
periods have been recast to
conform to the current
presentation.
(15) Calculated based on annualized net
charge-offs for the period
divided by average loans held for
investment for the period.
(16) 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 Q1 2014 under
Basel I. Ratios as of the end of
Q4 2014 are preliminary and
therefore subject to change. See
"Table 14: Reconciliation of Non-
GAAP Measures and Calculation of
Regulatory Capital Measures" for
information on the calculation of
each of these ratios.
(17) TCE ratio is a non-GAAP measure
calculated based on TCE divided
by tangible assets. See "Table
14: Reconciliation of Non-GAAP
Measures and Calculation of
Regulatory Capital Measures" for
additional information.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
2014 Q4 2014 Q3 2013 Q4
------- ------- -------
Average Balance Interest Yield/ Average Balance Interest Yield/ Average Balance Interest Yield/
Rate(1) Rate(1) Rate(1)
Income/Expense(1) Income/Expense(1) Income/Expense(1)
----------------- ----------------- -----------------
(Dollars in millions) (unaudited)
---------------------------------
Interest-earning assets:
Loans, including loans held for sale $204,137 $4,613 9.04% $200,066 $4,463 8.92% $193,368 $4,398 9.10%
Investment securities 62,952 405 2.57 62,582 398 2.54 62,919 414 2.63
Cash equivalents and other 6,347 27 1.70 6,242 26 1.67 6,670 27 1.62
Total interest-earning assets $273,436 $5,045 7.38 $268,890 $4,887 7.27 $262,957 $4,839 7.36
-------- ------ -------- ------ -------- ------
Interest-bearing liabilities:
Interest-bearing deposits $179,401 $269 0.60 $179,928 $271 0.60 $184,206 $288 0.63
Securitized debt obligations 11,479 36 1.25 10,110 32 1.27 9,873 40 1.62
Senior and subordinated notes 18,680 73 1.56 17,267 71 1.64 12,765 75 2.35
Other borrowings and liabilities 14,058 11 0.31 12,937 16 0.49 13,825 13 0.38
------ ------
Total interest-bearing liabilities $223,618 $389 0.70 $220,242 $390 0.71 $220,669 $416 0.75
-------- ---- -------- ---- -------- ----
Net interest income/spread $4,656 6.68 $4,497 6.56 $4,423 6.61
====== ====== ======
Impact of non-interest bearing funding 0.13 0.13 0.12
Net interest margin 6.81% 6.69% 6.73%
==== ==== ====
Year Ended December 31,
-----------------------
2014 2013
---- ----
Average Balance Interest Yield/ Average Balance Interest Yield/
Rate(1) Rate(1)
Income/Expense(1) Income/Expense(1)
----------------- -----------------
(Dollars in millions) (unaudited)
--------------------------------
Interest-earning assets:
Loans, including loans held for sale $198,419 $17,662 8.90% $196,609 $18,222 9.27%
Investment securities 62,547 1,628 2.60 63,522 1,575 2.48
Cash equivalents and other 6,208 107 1.72 6,292 101 1.61
Total interest-earning assets $267,174 $19,397 7.26 $266,423 $19,898 7.47
-------- ------- -------- -------
Interest-bearing liabilities:
Interest-bearing deposits $181,036 $1,088 0.60 $187,700 $1,241 0.66
Securitized debt obligations 10,686 145 1.36 10,697 183 1.71
Senior and subordinated notes 16,543 299 1.81 12,440 315 2.53
Other borrowings and liabilities 12,325 47 0.38 14,670 53 0.36
------
Total interest-bearing liabilities $220,590 $1,579 0.72 $225,507 $1,792 0.79
-------- ------ ---- -------- ----
Net interest income/spread $17,818 6.54 $18,106 6.68
======= =======
Impact of non-interest bearing funding 0.13 0.12
Net interest margin 6.67% 6.80%
==== ====
(1) Interest income and
interest expense and
the calculation of
average yields on
interest-earning
assets and average
rates on interest-
bearing liabilities
include the impact of
hedge accounting.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics(1)
2014 Q4 vs. Year Ended 2014
----------- ----------
2014 2014 2014 2014 2013 2014 2013 2014 2013 vs.
---- ----
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2013
-------------------------------- --- --- --- --- --- --- --- ----
Period-end Loans Held For Investment
------------------------------------
Credit card:
Domestic credit card $77,704 $73,143 $71,165 $68,275 $73,255 6% 6% $77,704 $73,255 6%
International credit card 8,172 7,488 7,853 7,575 8,050 9 2 8,172 8,050 2
----- ----- ----- ----- ----- ----- -----
Total credit card 85,876 80,631 79,018 75,850 81,305 7 6 85,876 81,305 6
------ ------ ------ ------ ------ ------ ------
Consumer banking:
Auto 37,824 36,254 34,792 33,080 31,857 4 19 37,824 31,857 19
Home loan 30,035 31,203 32,644 34,035 35,282 (4) (15) 30,035 35,282 (15)
Retail banking 3,580 3,604 3,626 3,612 3,623 (1) (1) 3,580 3,623 (1)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 71,439 71,061 71,062 70,727 70,762 1 1 71,439 70,762 1
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 23,137 22,895 22,040 21,256 20,750 1 12 23,137 20,750 12
Commercial and industrial 26,972 26,071 25,402 24,064 23,309 3 16 26,972 23,309 16
------ ------ ------ ------ ------ ------ ------
Total commercial lending 50,109 48,966 47,442 45,320 44,059 2 14 50,109 44,059 14
Small-ticket commercial real estate 781 822 879 910 952 (5) (18) 781 952 (18)
--- --- --- --- --- --- ---
Total commercial banking(2) 50,890 49,788 48,321 46,230 45,011 2 13 50,890 45,011 13
------ ------ ------ ------ ------ ------ ------
Other loans 111 112 127 134 121 (1) (8) 111 121 (8)
Total loans held for investment(2) $208,316 $201,592 $198,528 $192,941 $197,199 3 6 $208,316 $197,199 6
--------------------------------- ======== ======== ======== ======== ======== ======== ========
Average Loans Held For Investment
---------------------------------
Credit card:
Domestic credit card $74,026 $71,784 $69,376 $69,810 $70,368 3% 5% $71,262 $71,234 - %
International credit card 7,714 7,710 7,621 7,692 7,899 - (2) 7,684 7,973 (4)
----- ----- ----- ----- ----- ----- -----
Total credit card 81,740 79,494 76,997 77,502 78,267 3 4 78,946 79,207 -
------ ------ ------ ------ ------ ------ ------
Consumer banking:
Auto 37,072 35,584 33,972 32,387 31,424 4 18 34,769 29,446 18
Home loan 30,604 31,859 33,299 34,646 35,974 (4) (15) 32,589 39,322 (17)
Retail banking 3,578 3,605 3,613 3,630 3,635 (1) (2) 3,606 3,699 (3)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 71,254 71,048 70,884 70,663 71,033 - - 70,964 72,467 (2)
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 23,129 22,409 21,484 20,962 19,928 3 16 22,003 18,636 18
Commercial and industrial 26,409 25,512 24,611 23,541 22,445 4 18 25,028 21,062 19
------ ------ ------ ------ ------ ------ ------
Total commercial lending 49,538 47,921 46,095 44,503 42,373 3 17 47,031 39,698 18
Small-ticket commercial real estate 801 845 896 932 986 (5) (19) 868 1,073 (19)
--- --- --- --- --- --- -----
Total commercial banking 50,339 48,766 46,991 45,435 43,359 3 16 47,899 40,771 17
------ ------ ------ ------ ------ ------ ------
Other loans 103 114 124 122 154 (10) (33) 116 169 (31)
---
Total average loans held for investment $203,436 $199,422 $194,996 $193,722 $192,813 2 6 $197,925 $192,614 3
======== ======== ======== ======== ======== ======== ========
Net Charge-off Rates
--------------------
Credit card:
Domestic credit card 3.39% 2.83% 3.52% 4.01% 3.89% 56 bps (50) bps 3.43% 4.08% (65) bps
International credit card 3.34 3.32 3.93 4.17 4.74 2 (140) 3.69 4.78 (109)
Total credit card 3.38 2.88 3.56 4.02 3.98 50 (60) 3.46 4.15 (69)
Consumer banking:
Auto 2.14 1.98 1.31 1.66 2.30 16 (16) 1.78 1.85 (7)
Home loan 0.07 0.02 0.05 0.06 0.03 5 4 0.05 0.04 1
Retail banking 1.28 1.36 0.70 0.95 1.09 (8) 19 1.07 1.46 (39)
Total consumer banking 1.20 1.07 0.69 0.84 1.09 13 11 0.95 0.85 10
Commercial banking:
Commercial and multifamily real estate 0.01 (0.10) - 0.01 (0.11) 11 12 (0.02) (0.04) 2
Commercial and industrial 0.10 (0.01) 0.04 0.03 0.04 11 6 0.04 0.07 (3)
Total commercial lending 0.06 (0.05) 0.02 0.02 (0.03) 11 9 0.01 0.02 (1)
Small-ticket commercial real estate 0.80 (0.01) 0.61 0.67 (0.81) 81 161 0.52 0.62 (10)
Total commercial banking 0.07 (0.05) 0.03 0.04 (0.05) 12 12 0.02 0.03 (1)
Other loans 0.47 (0.61) 2.18 (0.68) 4.68 108 (421) 0.36 11.34 **
Total net charge-offs 1.80 1.52 1.67 1.92 2.01 28 (21) 1.72 2.04 (32)
---------------------
30+ Day Performing Delinquency Rates
------------------------------------
Credit card:
Domestic credit card 3.27% 3.21% 2.83% 3.02% 3.43% 6 bps (16) bps 3.27% 3.43% (16) bps
International credit card 2.94 3.34 3.40 3.59 3.71 (40) (77) 2.94 3.71 (77)
Total credit card 3.24 3.22 2.89 3.08 3.46 2 (22) 3.24 3.46 (22)
Consumer banking:
Auto 6.57 6.14 5.77 5.29 6.85 43 (28) 6.57 6.85 (28)
Home loan 0.21 0.14 0.13 0.12 0.16 7 5 0.21 0.16 5
Retail banking 0.64 0.53 0.48 0.74 0.69 11 (5) 0.64 0.69 (5)
Total consumer banking 3.60 3.22 2.91 2.57 3.20 38 40 3.60 3.20 40
----------------------
Nonperforming Assets Rates(3)
----------------------------
Credit card:
International credit card 0.86% 0.98% 1.03% 1.07% 1.10% (12) bps (24) bps 0.86% 1.10% (24) bps
Total credit card 0.08 0.09 0.10 0.11 0.11 (1) (3) 0.08 0.11 (3)
Consumer banking:
Auto(4) 1.00 0.94 0.88 0.81 1.11 6 (11) 1.00 1.11 (11)
Home loan 1.19 1.13 1.16 1.17 1.14 6 5 1.19 1.14 5
Retail banking 0.61 0.54 0.79 1.15 1.13 7 (52) 0.61 1.13 (52)
Total consumer banking 1.06 1.01 1.01 1.00 1.12 5 (6) 1.06 1.12 (6)
Commercial banking:
Commercial and multifamily real estate 0.27 0.29 0.32 0.31 0.29 (2) (2) 0.27 0.29 (2)
Commercial and industrial 0.42 0.40 0.45 0.40 0.44 2 (2) 0.42 0.44 (2)
Total commercial lending 0.35 0.35 0.39 0.35 0.37 - (2) 0.35 0.37 (2)
Small-ticket commercial real estate 0.96 0.42 1.40 0.73 0.43 54 53 0.96 0.43 53
Total commercial banking 0.36 0.35 0.41 0.36 0.37 1 (1) 0.36 0.37 (1)
Total nonperforming assets 0.54 0.53 0.55 0.54 0.58 1 (4) 0.54 0.58 (4)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary-Business Segments(1)
Three Months Ended December 31, 2014 Year Ended December 31, 2014
------------------------------------ ----------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Banking Commercial Other Total Credit Consumer Banking Commercial
Banking Banking Other
Card Card
--- ---- ----
Earnings:
Net interest income $4,656 $2,697 $1,459 $455 $45 17,818 $10,310 $5,748 $1,751 $9
Non-interest income 1,157 841 185 132 (1) 4,472 3,311 684 450 27
----- --- --- --- --- ----- ----- --- --- ---
Total net revenue(5)(6) 5,813 3,538 1,644 587 44 22,290 13,621 6,432 2,201 36
Provision (benefit) for credit losses 1,109 856 222 32 (1) 3,541 2,750 703 93 (5)
Non-interest expense 3,284 1,888 1,045 293 58 12,180 7,063 3,869 1,083 165
----- ----- ----- --- --- ------ ----- ----- ----- ---
Income (loss) from continuing operations before income taxes 1,420 794 377 262 (13) 6,569 3,808 1,860 1,025 (124)
Income tax provision (benefit) 450 275 135 93 (53) 2,146 1,329 665 366 (214)
-----
Income from continuing operations, net of tax $970 $519 $242 $169 $40 $4,423 $2,479 $1,195 $659 $90
==== ==== ==== ==== === ====== ====== ====== ==== ===
Three Months Ended September 30, 2014
-------------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Banking Commercial
Banking Other
Card
--- ----
Earnings:
Net interest income $4,497 $2,627 $1,425 $439 $6
Non-interest income 1,142 846 179 122 (5)
----- --- --- --- ---
Total net revenue(5)(6) 5,639 3,473 1,604 561 1
Provision (benefit) for credit losses 993 787 198 9 (1)
Non-interest expense 2,985 1,730 956 268 31
----- ----- --- --- ---
Income (loss) from continuing operations before income taxes 1,661 956 450 284 (29)
Income tax provision (benefit) 536 332 161 102 (59)
Income from continuing operations, net of tax $1,125 $624 $289 $182 $30
====== ==== ==== ==== ===
Three Months Ended December 31, 2013 Year Ended December 31, 2013
------------------------------------ ----------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Banking Commercial Other Total Credit Consumer Banking Commercial
Banking Banking Other
Card Card
--- ---- ----
Earnings:
Net interest income (expense) $4,423 $2,576 $1,468 $447 $(68) $18,106 $10,967 $5,905 $1,674 $(440)
Non-interest income 1,121 833 195 131 (38) 4,278 3,320 749 395 (186)
----- --- --- --- --- ----- ----- --- --- ----
Total net revenue (loss)(5)(6) 5,544 3,409 1,663 578 (106) 22,384 14,287 6,654 2,069 (626)
Provision (benefit) for credit losses 957 751 212 (6) - 3,453 2,824 656 (24) (3)
Non-interest expense 3,235 1,868 1,018 281 68 12,353 7,439 3,745 958 211
----- ----- ----- --- --- ------ ----- ----- --- ---
Income (loss) from continuing operations before income taxes 1,352 790 433 303 (174) 6,578 4,024 2,253 1,135 (834)
Income tax provision (benefit) 477 274 154 108 (59) 2,224 1,409 802 404 (391)
Income (loss) from continuing operations, net of tax $875 $516 $279 $195 $(115) $4,354 $2,615 $1,451 $731 $(443)
==== ==== ==== ==== ===== ====== ====== ====== ==== =====
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary-Credit Card Business(1)
2014 Q4 vs. Year Ended 2014
----------- ----------
2014 2014 2014 2014 2013 2014 2013 2014 2013 vs.
---- ----
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2013
-------------------------------- --- --- --- --- --- --- --- ----
Credit Card
-----------
Earnings:
Net interest income $2,697 $2,627 $2,461 $2,525 $2,576 3% 5% $10,310 $10,967 (6)%
Non-interest income 841 846 839 785 833 (1) 1 3,311 3,320 -
--- --- --- --- --- ----- -----
Total net revenue 3,538 3,473 3,300 3,310 3,409 2 4 13,621 14,287 (5)
Provision for credit losses 856 787 549 558 751 9 14 2,750 2,824 (3)
Non-interest expense 1,888 1,730 1,719 1,726 1,868 9 1 7,063 7,439 (5)
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 794 956 1,032 1,026 790 (17) 1 3,808 4,024 (5)
Income tax provision 275 332 364 358 274 (17) - 1,329 1,409 (6)
Income from continuing operations, net of tax $519 $624 $668 $668 $516 (17) 1 $2,479 $2,615 (5)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $85,876 $80,631 $79,018 $75,850 $81,305 7% 6% $85,876 $81,305 6%
Average loans held for investment 81,740 79,494 76,997 77,502 78,267 3 4 78,946 79,207 -
Average yield on loans held for investment(7)(8) 14.61% 14.65% 14.22% 14.43% 14.64% (4) bps (3) bps 14.48% 15.37% (89) bps
Total net revenue margin(9) 17.31 17.48 17.14 17.08 17.43 (17) (12) 17.25 18.04 (79)
Net charge-off rate 3.38 2.88 3.56 4.02 3.98 50 (60) 3.46 4.15 (69)
30+ day performing delinquency rate 3.24 3.22 2.89 3.08 3.46 2 (22) 3.24 3.46 (22)
30+ day delinquency rate 3.30 3.29 2.97 3.16 3.54 1 (24) 3.30 3.54 (24)
Nonperforming loan rate 0.08 0.09 0.10 0.11 0.11 (1) (3) 0.08 0.11 (3)
Card loan premium amortization and other intangible accretion(10) $11 $18 $31 $37 $39 (39)% (72)% $97 $198 (51)%
PCCR intangible amortization 87 90 94 98 102 (3) (15) 369 434 (15)
Purchase volume(11) 63,484 57,474 56,358 47,434 54,245 10 17 224,750 201,074 12
------------------
Domestic Card
-------------
Earnings:
Net interest income $2,432 $2,361 $2,193 $2,255 $2,303 3% 6% $9,241 $9,887 (7)%
Non-interest income 768 763 768 702 747 1 3 3,001 2,957 1
--- --- --- --- --- ----- -----
Total net revenue 3,200 3,124 2,961 2,957 3,050 2 5 12,242 12,844 (5)
Provision for credit losses 765 738 504 486 679 4 13 2,493 2,502 -
Non-interest expense 1,676 1,530 1,513 1,545 1,664 10 1 6,264 6,645 (6)
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 759 856 944 926 707 (11) 7 3,485 3,697 (6)
Income tax provision 272 306 337 331 252 (11) 8 1,246 1,316 (5)
Income from continuing operations, net of tax $487 $550 $607 $595 $455 (11) 7 $2,239 $2,381 (6)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $77,704 $73,143 $71,165 $68,275 $73,255 6% 6% $77,704 $73,255 6%
Average loans held for investment 74,026 71,784 69,376 69,810 70,368 3 5 71,262 71,234 -
Average yield on loans held for investment(7)(8) 14.43% 14.46% 13.95% 14.19% 14.44% (3) bps (1) bps 14.26% 15.27% (101) bps
Total net revenue margin(9) 17.29 17.41 17.07 16.94 17.34 (12) (5) 17.18 18.03 (85)
Net charge-off rate 3.39 2.83 3.52 4.01 3.89 56 (50) 3.43 4.08 (65)
30+ day performing delinquency rate 3.27 3.21 2.83 3.02 3.43 6 (16) 3.27 3.43 (16)
30+ day delinquency rate 3.27 3.21 2.83 3.02 3.43 6 (16) 3.27 3.43 (16)
Purchase volume(11) $58,234 $53,690 $52,653 $44,139 $50,377 8% 16% $208,716 $186,901 12%
------------------
International Card
------------------
Earnings:
Net interest income $265 $266 $268 $270 $273 - (3)% $1,069 $1,080 (1)%
Non-interest income 73 83 71 83 86 (12) (15) 310 363 (15)
--- --- --- --- --- --- ---
Total net revenue 338 349 339 353 359 (3) (6) 1,379 1,443 (4)
Provision for credit losses 91 49 45 72 72 86 26 257 322 (20)
Non-interest expense 212 200 206 181 204 6 4 799 794 1
--- --- --- --- --- --- ---
Income from continuing operations before income taxes 35 100 88 100 83 (65) (58) 323 327 (1)
Income tax provision 3 26 27 27 22 (88) (86) 83 93 (11)
--- --- --- ---
Income from continuing operations, net of tax $32 $74 $61 $73 $61 (57) (48) $240 $234 3
=== === === === === ==== ====
Selected performance metrics:
Period-end loans held for investment $8,172 $7,488 $7,853 $7,575 $8,050 9% 2% $8,172 $8,050 2%
Average loans held for investment 7,714 7,710 7,621 7,692 7,899 - (2) 7,684 7,973 (4)
Average yield on loans held for investment(8) 16.31% 16.42% 16.74% 16.64% 16.48% (11) bps (17) bps 16.53% 16.24% 29 bps
Total net revenue margin 17.55 18.13 17.76 18.38 18.20 (58) (65) 17.95 18.10 (15)
Net charge-off rate 3.34 3.32 3.93 4.17 4.74 2 (140) 3.69 4.78 (109)
30+ day performing delinquency rate 2.94 3.34 3.40 3.59 3.71 (40) (77) 2.94 3.71 (77)
30+ day delinquency rate 3.60 4.08 4.20 4.41 4.56 (48) (96) 3.60 4.56 (96)
Nonperforming loan rate 0.86 0.98 1.03 1.07 1.10 (12) (24) 0.86 1.10 (24)
Purchase volume(11) $5,250 $3,784 $3,705 $3,295 $3,868 39% 36% $16,034 $14,173 13%
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary-Consumer Banking Business(1)
2014 Q4 vs. Year Ended 2014
----------- ----------
2014 2014 2014 2014 2013 2014 2013 2014 2013 vs.
---- ----
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2013
-------------------------------- --- --- --- --- --- --- --- ----
Consumer Banking
----------------
Earnings:
Net interest income $1,459 $1,425 $1,431 $1,433 $1,468 2% (1)% $5,748 $5,905 (3)%
Non-interest income 185 179 170 150 195 3 (5) 684 749 (9)
--- --- --- --- --- --- ---
Total net revenue 1,644 1,604 1,601 1,583 1,663 2 (1) 6,432 6,654 (3)
Provision for credit losses 222 198 143 140 212 12 5 703 656 7
Non-interest expense 1,045 956 938 930 1,018 9 3 3,869 3,745 3
----- --- --- --- ----- ----- -----
Income from continuing operations before income taxes 377 450 520 513 433 (16) (13) 1,860 2,253 (17)
Income tax provision 135 161 186 183 154 (16) (12) 665 802 (17)
--- --- --- --- --- --- ---
Income from continuing operations, net of tax $242 $289 $334 $330 $279 (16) (13) $1,195 $1,451 (18)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $71,439 $71,061 $71,062 $70,727 $70,762 1 % 1 % $71,439 $70,762 1%
Average loans held for investment 71,254 71,048 70,884 70,663 71,033 - - 70,964 $72,467 (2)
Average yield on loans held for investment(8) 6.45% 6.18% 6.22% 6.18% 6.30% 27 bps 15 bps 6.26% 6.10% 16 bps
Auto loan originations $5,390 $5,410 $5,376 $4,727 $4,322 - 25% $20,903 $17,388 20%
Period-end deposits 168,078 167,624 169,153 171,529 167,652 - - 168,078 167,652 -
Average deposits 167,727 168,407 169,694 168,676 167,870 - - 168,623 169,683 (1)
Average deposit interest rate 0.57% 0.58% 0.57% 0.57% 0.60% (1) bps (3) bps 0.57% 0.63% (6) bps
Core deposit intangible amortization $24 $26 $28 $30 $32 (8)% (25)% $108 $138 (22)%
Net charge-off rate 1.20% 1.07% 0.69% 0.84% 1.09% 13 bps 11 bps 0.95% 0.85% 10 bps
30+ day performing delinquency rate 3.60 3.22 2.91 2.57 3.20 38 40 3.60 3.20 40
30+ day delinquency rate 4.23 3.82 3.49 3.14 3.89 41 34 4.23 3.89 34
Nonperforming loan rate 0.77 0.73 0.75 0.74 0.86 4 (9) 0.77 0.86 (9)
Nonperforming asset rate(3) 1.06 1.01 1.01 1.00 1.12 5 (6) 1.06 1.12 (6)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary-Commercial Banking Business(1)
2014 Q4 vs. Year Ended 2014
----------- ----------
2014 2014 2014 2014 2013 2014 2013 2014 2013 vs.
---- ----
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2013
-------------------------------- --- --- --- --- --- --- --- ----
Commercial Banking
------------------
Earnings:
Net interest income $455 $439 $436 $421 $447 4% 2% $1,751 $1,674 5%
Non-interest income 132 122 109 87 131 8 1 450 395 14
--- --- --- --- --- --- ---
Total net revenue(5)(6) 587 561 545 508 578 5 2 2,201 2,069 6
Provision (benefit) for credit losses 32 9 12 40 (6) 256 ** 93 (24) **
Non-interest expense 293 268 267 255 281 9 4 1,083 958 13
--- --- --- --- --- ----- ---
Income from continuing operations before income taxes 262 284 266 213 303 (8) (14) 1,025 1,135 (10)
Income tax provision 93 102 95 76 108 (9) (14) 366 404 (9)
Income from continuing operations, net of tax $169 $182 $171 $137 $195 (7) (13) $659 $731 (10)
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $50,890 $49,788 $48,321 $46,230 $45,011 2% 13% $50,890 $45,011 13%
Average loans held for investment 50,339 48,766 46,991 45,435 43,359 3 16 47,899 40,771 17
Average yield on loans held for investment(6)(8) 3.33% 3.39% 3.50% 3.47% 3.92% (6) bps (59) bps 3.42% 3.88% (46) bps
Period-end deposits $31,954 $31,918 $31,440 $31,485 $30,567 - % 5% $31,954 $30,567 5%
Average deposits 32,363 31,772 31,238 31,627 31,033 2 4 31,752 30,702 3
Average deposit interest rate 0.24% 0.24% 0.24% 0.25% 0.25% - bps (1) bps 0.24% 0.27% (3) bps
Core deposit intangible amortization $5 $5 $5 $6 $6 - % (17)% 21 27 (22)%
Net charge-off (recovery) rate 0.07% (0.05)% 0.03% 0.04% (0.05)% 12 bps 12 bps 0.02% 0.03% (1) bps
Nonperforming loan rate 0.34 0.32 0.38 0.33 0.33 2 1 0.34 0.33 1
Nonperforming asset rate(3) 0.36 0.35 0.41 0.36 0.37 1 (1) 0.36 0.37 (1)
Risk category:(12)
Noncriticized $49,284 $48,408 $46,881 $45,103 $43,823 2% 12% $49,284 $43,823 12%
Criticized performing 1,431 1,219 1,259 977 1,039 17 38 1,431 1,039 38
Criticized nonperforming 175 161 181 150 149 9 17 175 149 17
--- --- --- --- --- --- ---
Total commercial loans $50,890 $49,788 $48,321 $46,230 $45,011 2 13 $50,890 $45,011 13
======= ======= ======= ======= ======= ======= =======
% of period-end commercial loans held for investment:
Noncriticized 96.9% 97.3% 97.0% 97.5% 97.4% (40) bps (50) bps 96.9% 97.4% (50) bps
Criticized performing 2.8 2.4 2.6 2.2 2.3 40 50 2.8 2.3 50
Criticized nonperforming 0.3 0.3 0.4 0.3 0.3 - - 0.3 0.3 -
--- --- --- --- --- --- ---
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(1)
2014 Q4 vs. Year Ended 2014
----------- ----------
2014 2014 2014 2014 2013 2014 2013 2014 2013 vs.
---- ----
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2013
-------------------------------- --- --- --- --- --- --- --- ----
Other
-----
Earnings:
Net interest income (expense) $45 $6 $(13) $(29) $(68) ** ** $9 $(440) **
Non-interest income (1) (5) 35 (2) (38) (80)% (97)% 27 (186) **
--- --- --- --- --- --- ----
Total net revenue (loss)(5) 44 1 22 (31) (106) ** ** 36 (626) **
Benefit for credit losses (1) (1) - (3) - - - (5) (3) 67%
Non-interest expense 58 31 55 21 68 87 (15) 165 211 (22)
--- --- --- --- --- --- ---
Loss from continuing operations before income taxes (13) (29) (33) (49) (174) (55) (93) (124) (834) (85)
Income tax benefit (53) (59) (64) (38) (59) (10) (10) (214) (391) (45)
--- --- --- --- --- ---- ----
Income (loss) from continuing operations, net of tax $40 $30 $31 $(11) $(115) 33 ** $90 $(443) **
=== === === ==== ===== === =====
Selected performance metrics:
Period-end loans held for investment $111 $112 $127 $134 $121 (1)% (8)% $111 $121 (8)%
Average loans held for investment 103 114 124 122 154 (10) (33) 116 169 (31)
Period-end deposits 5,516 4,722 5,297 5,310 6,304 17 (13) 5,516 6,304 (13)
Average deposits 5,265 5,020 5,383 5,539 6,803 5 (23) 5,300 8,660 (39)
----------------
Total
-----
Earnings:
Net interest income $4,656 $4,497 $4,315 $4,350 $4,423 4% 5% $17,818 $18,106 (2)%
Non-interest income 1,157 1,142 1,153 1,020 1,121 1 3 4,472 4,278 5
----- ----- ----- ----- ----- ----- -----
Total net revenue 5,813 5,639 5,468 5,370 5,544 3 5 22,290 22,384 -
Provision for credit losses 1,109 993 704 735 957 12 16 3,541 3,453 3
Non-interest expense 3,284 2,985 2,979 2,932 3,235 10 2 12,180 12,353 (1)
----- ----- ----- ----- ----- ------ ------
Income from continuing operations before income taxes 1,420 1,661 1,785 1,703 1,352 (15) 5 6,569 6,578 -
Income tax provision 450 536 581 579 477 (16) (6) 2,146 2,224 (4)
--- --- --- ----- -----
Income from continuing operations, net of tax $970 $1,125 $1,204 $1,124 $875 (14) 11 $4,423 $4,354 2
==== ====== ====== ====== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment(2) $208,316 $201,592 $198,528 $192,941 $197,199 3% 6% $208,316 $197,199 6%
Average loans held for investment 203,436 199,422 194,996 193,722 192,813 2 6 197,925 192,614 3
Period-end deposits 205,548 204,264 205,890 208,324 204,523 1 1 205,548 204,523 1
Average deposits 205,355 205,199 206,315 205,842 205,706 - - 205,675 209,045 (2)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Notes to Loan and Business Segments
Disclosures (Tables 7-12)
** Not meaningful.
(1) Certain prior period amounts have been
recast to conform to the current
period presentation.
(2) Includes $3.7 billion of loans to the
oil and gas industry as of December
31, 2014, which was approximately 1.8%
of total loans held for investment.
(3) Nonperforming assets consist of
nonperforming loans, real estate owned
("REO") and other foreclosed assets.
The nonperforming asset ratios are
calculated based on nonperforming
assets for each category divided by
the combined period-end total of
loans held for investment, REO and
other foreclosed assets for each
respective category. Nonperforming
assets related to acquired loans are
excluded from the calculation.
(4) 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.
(5) 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"
as of January 1, 2014, 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 recast to
conform to this presentation.
(6) 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%.
(7) The transfer of the Best Buy Stores,
L.P. ("Best Buy") portfolio to held
for sale resulted in an increase in
the average yield of 99 basis points
and 90 basis points for Domestic Card
and Total Credit Card, respectively,
in 2013. The sale of the Best Buy
portfolio was completed on September
6, 2013.
(8) Calculated by dividing annualized
interest income for the period by
average loans held for investment
during the period for the specified
loan category. Annualized interest
income excludes various allocations
including funds transfer pricing that
assigns certain balance sheet assets,
deposits and other liabilities and
their related revenue and expenses
attributable to each business segment.
(9) The transfer of the Best Buy portfolio
to held for sale resulted in an
increase in the net revenue margin of
111 basis points and 100 basis points
for Domestic Card and Total Credit
Card, respectively, in 2013. The sale
of the Best Buy portfolio was
completed on September 6, 2013.
(10) 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 1,
2012 transaction in which we acquired
substantially all of HSBC's credit
card and private-label credit card
business in the United States.
(11) 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.
(12) Criticized exposures correspond to the
"Special Mention," "Substandard" and
"Doubtful" asset categories defined by
bank regulatory authorities.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures
Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. Previously, we calculated regulatory capital under Basel I as shown below:
Basel III Standardized Basel I
---------------------- -------
(Dollars in millions) (unaudited) December September June March December
2014 2014 2014 2013
2014
--- ----
Regulatory Capital Metrics(3)
----------------------------
Common equity Tier 1 capital $29,534 $29,116 $28,774 $28,434 N/A
Tier 1 common capital N/A N/A N/A N/A $27,375
Tier 1 capital $31,355 $30,451 $30,111 $29,257 28,230
Total risk-based capital(1) 35,886 34,860 34,743 33,784 32,987
Risk-weighted assets(2) 237,587 228,759 226,172 219,047 224,556
Average assets for the leverage ratio 291,243 286,070 281,345 280,907 280,574
-------------------------------------
Capital Ratios(3)
----------------
Common equity Tier 1 capital ratio(4) 12.4% 12.7% 12.7% 13.0% N/A
Tier 1 common ratio N/A N/A N/A N/A 12.2%
Tier 1 risk-based capital ratio(5) 13.2% 13.3% 13.3% 13.4% 12.6
Total risk-based capital ratio(6) 15.1 15.2 15.4 15.4 14.7
Tier 1 leverage ratio(7) 10.8 10.6 10.7 10.4 10.1
Tangible common equity ("TCE") ratio(8) 9.5 9.6 9.5 9.6 8.9
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.
2014 2014 2014 2014 2013
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4
-------------------------------- --- --- --- --- ---
Tangible Common Equity (Average)
-------------------------------
Average stockholders' equity $45,576 $44,827 $43,767 $42,859 $42,355
Average goodwill and other intangible assets(9) (15,437) (15,525) (15,615) (15,727) (15,847)
Noncumulative perpetual preferred stock(10) (1,681) (1,338) (970) (853) (853)
Average tangible common equity $28,458 $27,964 $27,182 $26,279 $25,655
------------------------------ ======= ======= ======= ======= =======
Tangible Common Equity (Period End)
----------------------------------
Stockholders' equity $45,053 $44,018 $43,815 $42,801 $41,632
Goodwill and other intangible assets(9) (15,383) (15,472) (15,564) (15,666) (15,784)
Noncumulative perpetual preferred stock(10) (1,822) (1,336) (1,338) (853) (853)
------
Tangible common equity $27,848 $27,210 $26,913 $26,282 $24,995
======= ======= ======= ======= =======
Tangible Assets (Average)
------------------------
Average total assets $304,711 $299,523 $294,744 $294,275 $294,040
Average goodwill and other intangible assets(9) (15,437) (15,525) (15,615) (15,727) (15,847)
-------
Average tangible assets $289,274 $283,998 $279,129 $278,548 $278,193
----------------------- ======== ======== ======== ======== ========
Tangible Assets (Period End)
---------------------------
Total assets $308,854 $300,202 $298,317 $290,500 $296,933
Goodwill and other intangible assets(9) (15,383) (15,472) (15,564) (15,666) (15,784)
-------
Tangible assets $293,471 $284,730 $282,753 $274,834 $281,149
======== ======== ======== ======== ========
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach(3)
(Dollars in millions) (unaudited) December September June March
2014
2014 2014 2014
--- ---- ---- ----
Common equity excluding AOCI $43,661 $43,241 $42,848 $42,658
Adjustments:
AOCI(11)(12) (69) (146) 6 (182)
Goodwill(9) (13,805) (13,801) (13,811) (13,811)
Intangible assets(9)(12) (243) (266) (289) (314)
Other (10) 88 20 83
Common equity Tier 1 capital $29,534 $29,116 $28,774 $28,434
======= ======= ======= =======
Risk-weighted assets(2) $237,587 $228,759 $226,172 $219,047
Common equity Tier 1 capital ratio(4) 12.4% 12.7% 12.7% 13.0%
(1) Total risk-based capital
equals the sum of Tier 1
capital and Tier 2
capital.
(2) Risk-weighted assets
continue to be
calculated based on
Basel I in 2014.
Regulatory capital
metrics as of the end of
Q4 2014 are preliminary
and therefore subject to
(3) change.
(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) Amounts presented are net
of tax.
(12) Amounts based on
transition provisions
for regulatory capital
deductions and
adjustments of 20% for
2014.
SOURCE Capital One Financial Corporation
