CAPITAL ONE FINANCIAL CORPORATION MCLEAN, Va., July 23, 2015 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2015 of $863 million, or $1.50 per diluted common share, compared to the first quarter of 2015 with net income of $1.2 billion, or $2.00 per diluted common share, and the second quarter of 2014 with net income of $1.2 billion, or $2.04 per diluted common share. Net income for the second quarter of 2015, adjusted for the impact of restructuring charges of $147 million and a build in the U.K. PPI reserve of $78 million, was $1.0 billion or $1.78 per diluted common share.
"Capital One continues to deliver attractive risk-adjusted returns today and invest to sustain growth and returns over the long term," said Richard D. Fairbank, Chair and Chief Executive Officer. "We remain compelled by the opportunity, need, and urgency of digital transformation, and we continue to see growth opportunities across our businesses, particularly in Domestic Card. Capital One is well positioned to sustain attractive shareholder returns over the long term."
All comparisons below are for the second quarter of 2015 compared with the first quarter of 2015 unless otherwise noted.
Second Quarter 2015 Income Statement Summary:
-- Total net revenue remained flat at $5.7 billion, including ($37) million
of contra-revenue from a build in the U.K. PPI reserve.
-- Total non-interest expense increased 8 percent to $3.3 billion:
-- 3 percent increase in marketing.
-- 10 percent increase in operating expense, including $147 million in
restructuring charges and a build of $41 million in the U.K. PPI
reserve.
-- Pre-provision earnings decreased 9 percent to $2.4 billion.
-- Provision for credit losses increased 21 percent to $1.1 billion.
-- Mortgage representation & warranty benefit of $36 million, including $27
million ($17 million net of tax) in discontinued operations.
-- Efficiency ratio of 58.30 percent; Efficiency ratio excluding
restructuring charges and a build in the U.K. PPI reserve of 54.63
percent.
Second Quarter 2015 Balance Sheet Summary:
-- Common equity Tier 1 capital ratio under Basel III Standardized Approach
of 12.1 percent at June 30, 2015.
-- Net interest margin of 6.56 percent, down 1 basis points; Net interest
margin excluding the contra-revenue impact of the build in the U.K. PPI
reserve of 6.58 percent.
-- Period-end loans held for investment in the quarter increased $5.7
billion, or 3 percent, to $209.7 billion.
-- Domestic Card period-end loans increased $4.9 billion, or 7 percent,
to $79.0 billion.
-- Consumer Banking period-end loans decreased $203 million, or less
than 1 percent, to $71.2 billion:
-- Auto period-end loans increased $1.1 billion, or 3 percent, to
$40.0 billion.
-- Home loans period-end loans decreased $1.3 billion, or 5
percent, to $27.6 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking period-end loans increased $490 million, or less
than 1 percent, to $51.2 billion.
-- Average loans held for investment in the quarter increased $1.1 billion,
or less than 1 percent, to $206.3 billion.
-- Domestic Card average loans increased $1.2 billion, or 2 percent, to
$75.9 billion.
-- Consumer Banking average loans decreased $74 million, or less than 1
percent, to $71.4 billion:
-- Auto average loans increased $1.2 billion, or 3 percent, to
$39.5 billion.
-- Home loans average loans decreased by $1.2 billion, or 4
percent, to $28.3 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking average loans decreased $94 million, or less than
1 percent, to $51.0 billion.
-- Period-end total deposits decreased $1.7 billion, or less than 1
percent, to $208.8 billion, while average deposits increased $1.3
billion to $209.1 billion.
-- Interest-bearing deposit rate remained relatively flat at 0.59 percent.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on July 23, 2015 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us", then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through August 3, 2015 at 5:00 PM Eastern Time.
Forward-Looking Statements
Certain statements in this release are forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2014.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $208.8 billion in deposits and $310.5 billion in total assets as of June 30, 2015. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
Exhibit 99.2
Capital One Financial Corporation
Financial Supplement
Second Quarter 2015(1)
Table of Contents
Capital One Financial Corporation Consolidated Results Page
Table 1: Financial Summary-Consolidated 1
Table 2: Selected Metrics-Consolidated 3
Table 3: Consolidated Statements of Income 4
Table 4: Consolidated Balance Sheets 6
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1-4) 8
Table 6: Average Balances, Net Interest Income and Net Interest Margin 10
Table 7: Loan Information and Performance Statistics 11
Business Segment Results
Table 8: Financial Summary-Business Segment Results 13
Table 9: Financial & Statistical Summary-Credit Card Business 14
Table 10: Financial & Statistical Summary-Consumer Banking Business 16
Table 11: Financial & Statistical Summary-Commercial Banking Business 17
Table 12: Financial & Statistical Summary-Other and Total 18
Table 13: Notes to Loan and Business Segments Disclosures (Tables 7-12) 19
Other
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures 20
__________
(1) The information contained in this Financial Supplement is preliminary and based on data available at
the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q
for the period ended June 30, 2015 once it is filed with the Securities and Exchange Commission.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary-Consolidated(1)
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
(Dollars in millions, except per share data and as noted) (unaudited) 2015 2015 2014 2014 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2014
2015 2014
--- ---- ----
Income Statement
----------------
Net interest income $4,537 $4,576 $4,656 $4,497 $4,315 (1)% 5% $9,113 $8,665 5%
Non-interest income(2) 1,135 1,071 1,157 1,142 1,153 6 (2) 2,206 2,173 2
----- ----- ----- ----- ----- ----- -----
Total net revenue(3) 5,672 5,647 5,813 5,639 5,468 - 4 11,319 10,838 4
Provision for credit losses 1,129 935 1,109 993 704 21 60 2,064 1,439 43
Non-interest expense:
Marketing 387 375 509 392 335 3 16 762 660 15
Amortization of intangibles 111 110 123 130 136 1 (18) 221 279 (21)
Operating expenses(4) 2,809 2,564 2,652 2,463 2,508 10 12 5,373 4,972 8
----- ----- ----- ----- ----- ----- -----
Total non-interest expense 3,307 3,049 3,284 2,985 2,979 8 11 6,356 5,911 8
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,236 1,663 1,420 1,661 1,785 (26) (31) 2,899 3,488 (17)
Income tax provision 384 529 450 536 581 (27) (34) 913 1,160 (21)
--- --- --- --- --- --- -----
Income from continuing operations, net of tax 852 1,134 970 1,125 1,204 (25) (29) 1,986 2,328 (15)
Income (loss) from discontinued operations, net of tax(2) 11 19 29 (44) (10) (42) ** 30 20 50
--- --- --- --- --- --- ---
Net income 863 1,153 999 1,081 1,194 (25) (28) 2,016 2,348 (14)
Dividends and undistributed earnings allocated to participating securities(5) (4) (6) (4) (5) (4) (33) - (10) (9) 11
Preferred stock dividends(5) (29) (32) (21) (20) (13) (9) 123 (61) (26) 135
--- --- --- --- --- --- ---
Net income available to common stockholders $830 $1,115 $974 $1,056 $1,177 (26) (29) $1,945 $2,313 (16)
------------------------------------------- ==== ====== ==== ====== ====== ====== ======
Common Share Statistics
-----------------------
Basic earnings per common share:(5)
Net income from continuing operations $1.50 $2.00 $1.71 $1.97 $2.09 (25)% (28)% $3.49 $4.03 (13)%
Income (loss) from discontinued operations 0.02 0.03 0.05 (0.08) (0.02) (33) ** 0.06 0.03 100
---- ---- ---- ----- ----- ---- ----
Net income per basic common share $1.52 $2.03 $1.76 $1.89 $2.07 (25) (27) $3.55 $4.06 (13)
===== ===== ===== ===== ===== ===== =====
Diluted earnings per common share:(5)
Net income from continuing operations $1.48 $1.97 $1.68 $1.94 $2.06 (25) (28) $3.45 $3.97 (13)
Income (loss) from discontinued operations 0.02 0.03 0.05 (0.08) (0.02) (33) ** 0.06 0.03 100
---- ---- ---- ----- ----- ---- ----
Net income per diluted common share(6) $1.50 $2.00 $1.73 $1.86 $2.04 (25) (26) $3.51 $4.00 (12)
===== ===== ===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic 545.6 550.2 554.3 559.9 567.5 (1) (4) 548.0 569.2 (4)
Diluted 552.0 557.2 561.8 567.9 577.6 (1) (4) 554.7 578.9 (4)
Common shares outstanding (period end, in millions) 542.5 548.0 553.4 558.5 561.8 (1) (3) 542.5 561.8 (3)
Dividends paid per common share $0.40 $0.30 $0.30 $0.30 $0.30 33 33 $0.70 $0.60 17
Tangible book value per common share (period end)(7) 52.74 52.19 50.32 48.72 47.90 1 10 52.74 47.90 10
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
(Dollars in millions) (unaudited) 2015 2015 2014 2014 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2014
2015 2014
--- ---- ----
Balance Sheet (Period End)
-------------------------
Loans held for investment(8) $209,705 $203,978 $208,316 $201,592 $198,528 3% 6% $209,705 $198,528 6%
Interest-earning assets 280,137 275,837 277,849 270,001 266,720 2 5 280,137 266,720 5
Total assets 310,510 306,224 308,167 299,640 297,434 1 4 310,510 297,434 4
Interest-bearing deposits 183,657 185,208 180,467 178,876 180,970 (1) 1 183,657 180,970 1
Total deposits 208,780 210,440 205,548 204,264 205,890 (1) 1 208,780 205,890 1
Borrowings 45,766 41,029 48,457 42,243 39,114 12 17 45,766 39,114 17
Common equity 43,849 43,908 43,231 42,682 42,477 - 3 43,849 42,477 3
Total stockholders' equity 46,659 45,730 45,053 44,018 43,815 2 6 46,659 43,815 6
--------------------------
Balance Sheet (Average Balances)
-------------------------------
Loans held for investment(8) $206,337 $205,194 $203,436 $199,422 $194,996 1% 6% $205,768 $194,362 6%
Interest-earning assets 276,585 278,427 273,436 268,890 263,570 (1) 5 277,501 263,119 5
Total assets 307,206 309,401 304,153 298,913 294,089 (1) 4 308,295 293,798 5
Interest-bearing deposits 183,946 182,998 179,401 179,928 182,053 1 1 183,475 182,431 1
Total deposits 209,143 207,851 205,355 205,199 206,315 1 1 208,501 206,080 1
Borrowings 41,650 46,082 43,479 40,314 35,658 (10) 17 43,854 35,817 22
Common equity 44,878 44,575 43,895 43,489 42,797 1 5 44,727 42,408 5
Total stockholders' equity 47,255 46,397 45,576 44,827 43,767 2 8 46,828 43,320 8
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics-Consolidated(1)
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
(Dollars in millions except as noted) (unaudited) 2015 2015 2014 2014 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2014
2015 2014
--- ---- ----
Performance Metrics
-------------------
Net interest income growth (quarter over quarter) (1)% (2)% 4% 4% (1)% ** ** 5% (5)% **
Non-interest income growth (quarter over quarter) 6 (7) 1 (1) 13 ** ** 2 5 **
Total net revenue growth (quarter over quarter) - (3) 3 3 2 ** ** 4 (3) **
Total net revenue margin(9) 8.20 8.11 8.50 8.39 8.30 9 bps (10) bps 8.16 8.24 (8) bps
Net interest margin(10) 6.56 6.57 6.81 6.69 6.55 (1) 1 6.57 6.59 (2)
Return on average assets 1.11 1.47 1.28 1.51 1.64 (36) (53) 1.29 1.58 (29)
Return on average tangible assets(11) 1.17 1.54 1.34 1.59 1.73 (37) (56) 1.36 1.67 (31)
Return on average common equity(12) 7.30 9.84 8.61 10.12 11.09 (254) (379) 8.56 10.81 (225)
Return on average tangible common equity(13) 11.06 15.00 13.28 15.73 17.47 (394) (641) 13.01 17.15 (414)
Non-interest expense as a percentage of average loans held for investment 6.41 5.94 6.46 5.99 6.11 47 30 6.18 6.08 10
Efficiency ratio(14) 58.30 53.99 56.49 52.93 54.48 431 382 56.15 54.54 161
Effective income tax rate for continuing operations 31.1 31.8 31.7 32.3 32.5 (70) (140) 31.5 33.3 (180)
Employees (in thousands), period end 47.5 47.0 46.0 44.9 44.6 1% 7% 47.5 44.6 7%
------------------------------------
Credit Quality Metrics(8)
------------------------
Allowance for loan and lease losses $4,676 $4,405 $4,383 $4,212 $3,998 6% 17% $4,676 $3,998 17%
Allowance as a percentage of loans held for investment 2.23% 2.16% 2.10% 2.09% 2.01% 7 bps 22 bps 2.23% 2.01% 22 bps
Allowance as a percentage of loans held for investment (excluding acquired loans) 2.46 2.41 2.36 2.37 2.30 5 16 2.46 2.30 16
Net charge-offs $846 $881 $915 $756 $812 (4)% 4% $1,727 $1,743 (1)%
Net charge-off rate(15) 1.64% 1.72% 1.80% 1.52% 1.67% (8) bps (3) bps 1.68% 1.79% (11) bps
Net charge-off rate (excluding acquired loans)(15) 1.83 1.93 2.04 1.73 1.93 (10) (10) 1.88 2.08 (20)
30+ day performing delinquency rate 2.33 2.32 2.62 2.46 2.24 1 9 2.33 2.24 9
30+ day performing delinquency rate (excluding acquired loans) 2.59 2.61 2.95 2.81 2.58 (2) 1 2.59 2.58 1
30+ day delinquency rate 2.65 2.58 2.91 2.76 2.53 7 12 2.65 2.53 12
30+ day delinquency rate (excluding acquired loans) 2.94 2.90 3.28 3.14 2.91 4 3 2.94 2.91 3
--------------------------------------------------
Capital Ratios(16)
-----------------
Common equity Tier 1 capital ratio 12.1% 12.5% 12.5% 12.7% 12.7% (40) bps (60) bps 12.1% 12.7% (60) bps
Tier 1 risk-based capital ratio 13.3 13.2 13.2 13.3 13.3 10 - 13.3 13.3 -
Total risk-based capital ratio 15.1 15.1 15.1 15.2 15.4 - (30) 15.1 15.4 (30)
Tier 1 leverage ratio 11.1 10.7 10.8 10.6 10.7 40 40 11.1 10.7 40
Tangible common equity ("TCE") ratio(17) 9.7 9.8 9.5 9.6 9.5 (10) 20 9.7 9.5 20
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
Three Months Ended 2015 Q2 vs. Six Months Ended June 30,
------------------ ----------- -------------------------
2015 2015 2014 2015 2014 2015 vs.
Q2 Q1 Q2 Q1 Q2 2014
(Dollars in millions, except per share data and as noted) (unaudited) 2015 2014
-------------------------------------------------------------------- ---- ----
Interest income:
Loans, including loans held for sale $4,531 $4,540 $4,279 - 6% $9,071 $8,586 6%
Investment securities 382 406 409 (6)% (7) 788 825 (4)
Other 24 28 24 (14) - 52 54 (4)
--- --- --- --- ---
Total interest income 4,937 4,974 4,712 (1) 5 9,911 9,465 5
----- ----- ----- ----- -----
Interest expense:
Deposits 272 271 272 - - 543 548 (1)
Securitized debt obligations 36 33 39 9 (8) 69 77 (10)
Senior and subordinated notes 80 79 78 1 3 159 155 3
Other borrowings 12 15 8 (20) 50 27 20 35
--- --- --- --- ---
Total interest expense 400 398 397 1 1 798 800 -
--- --- --- --- ---
Net interest income 4,537 4,576 4,315 (1) 5 9,113 8,665 5
Provision for credit losses 1,129 935 704 21 60 2,064 1,439 43
----- --- --- ----- -----
Net interest income after provision for credit losses 3,408 3,641 3,611 (6) (6) 7,049 7,226 (2)
----- ----- ----- ----- -----
Non-interest income:(2)
Service charges and other customer-related fees 429 437 460 (2) (7) 866 934 (7)
Interchange fees, net 567 496 535 14 6 1,063 975 9
Net other-than-temporary impairment recognized in earnings (7) (15) (1) (53) 600 (22) (6) 267
Other 146 153 159 (5) (8) 299 270 11
--- --- --- --- ---
Total non-interest income 1,135 1,071 1,153 6 (2) 2,206 2,173 2
----- ----- ----- ----- -----
Non-interest expense:
Salaries and associate benefits 1,360 1,211 1,125 12 21 2,571 2,286 12
Occupancy and equipment 439 435 447 1 (2) 874 852 3
Marketing 387 375 335 3 16 762 660 15
Professional services 334 296 296 13 13 630 583 8
Communications and data processing 208 202 203 3 2 410 399 3
Amortization of intangibles 111 110 136 1 (18) 221 279 (21)
Other 468 420 437 11 7 888 852 4
--- --- --- --- ---
Total non-interest expense 3,307 3,049 2,979 8 11 6,356 5,911 8
----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,236 1,663 1,785 (26) (31) 2,899 3,488 (17)
Income tax provision 384 529 581 (27) (34) 913 1,160 (21)
--- --- --- --- -----
Income from continuing operations, net of tax 852 1,134 1,204 (25) (29) 1,986 2,328 (15)
Income (loss) from discontinued operations, net of tax(2) 11 19 (10) (42) ** 30 20 50
--- --- --- --- ---
Net income 863 1,153 1,194 (25) (28) 2,016 2,348 (14)
Dividends and undistributed earnings allocated to participating securities(5) (4) (6) (4) (33) - (10) (9) 11
Preferred stock dividends(5) (29) (32) (13) (9) 123 (61) (26) 135
--- --- --- --- ---
Net income available to common stockholders $830 $1,115 $1,177 (26) (29) $1,945 $2,313 (16)
==== ====== ====== ====== ======
Three Months Ended 2015 Q2 vs. Six Months Ended June 30,
------------------ ----------- -------------------------
2015 2015 2014 2015 2014 2015 vs.
Q2 Q1 Q2 Q1 Q2 2014
(Dollars in millions, except per share data and as noted) (unaudited) 2015 2014
-------------------------------------------------------------------- ---- ----
Basic earnings per common share:(5)
Net income from continuing operations $1.50 $2.00 $2.09 (25)% (28)% $3.49 $4.03 (13)%
Income (loss) from discontinued operations 0.02 0.03 (0.02) (33) ** 0.06 0.03 100
---- ---- ----- ---- ----
Net income per basic common share $1.52 $2.03 $2.07 (25) (27) $3.55 $4.06 (13)
===== ===== ===== ===== =====
Diluted earnings per common share:(5)
Net income from continuing operations $1.48 $1.97 $2.06 (25) (28) $3.45 $3.97 (13)
Income (loss) from discontinued operations 0.02 0.03 (0.02) (33) ** 0.06 0.03 100
---- ---- ----- ---- ----
Net income per diluted common share(6) $1.50 $2.00 $2.04 (25) (26) $3.51 $4.00 (12)
===== ===== ===== ===== =====
Weighted average common shares outstanding (in millions):
Basic common shares 545.6 550.2 567.5 (1) (4) 548.0 569.2 (4)
Diluted common shares 552.0 557.2 577.6 (1) (4) 554.7 578.9 (4)
Dividends paid per common share $0.40 $0.30 $0.30 33 33 $0.70 $0.60 17
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets(1)
June 30, 2015 vs.
-----------------
(Dollars in millions) (unaudited) June 30, December 31, June 30, December 31, June 30,
2015 2014 2014 2014 2014
--- ---- ---- ---- ---- ----
Assets:
Cash and cash equivalents:
Cash and due from banks $2,879 $3,147 $3,598 (9)% (20)%
Interest-bearing deposits with banks 4,275 4,095 2,954 4 45
Federal funds sold and securities purchased under agreements to resell 2 0 180 ** (99)
--- --- ---
Total cash and cash equivalents 7,156 7,242 6,732 (1) 6
Restricted cash for securitization investors 253 234 361 8 (30)
Securities available for sale, at fair value 39,136 39,508 41,113 (1) (5)
Securities held to maturity, at carrying value 23,668 22,500 20,688 5 14
Loans held for investment:(8)
Unsecuritized loans held for investment 175,407 171,771 161,224 2 9
Restricted loans for securitization investors 34,298 36,545 37,304 (6) (8)
------ ------ ------
Total loans held for investment 209,705 208,316 198,528 1 6
Allowance for loan and lease losses (4,676) (4,383) (3,998) 7 17
------ ------ ------
Net loans held for investment 205,029 203,933 194,530 1 5
Loans held for sale, at lower of cost or fair value 1,066 626 709 70 50
Premises and equipment, net 3,602 3,685 3,764 (2) (4)
Interest receivable 1,056 1,079 1,012 (2) 4
Goodwill 13,984 13,978 13,977 - -
Other assets 15,560 15,382 14,548 1 7
------ ------ ------
Total assets $310,510 $308,167 $297,434 1 4
======== ======== ========
June 30, 2015 vs.
-----------------
(Dollars in millions) (unaudited) June 30, December 31, June 30, December 31, June 30,
2015 2014 2014 2014 2014
--- ---- ---- ---- ---- ----
Liabilities:
Interest payable $262 $254 $234 3% 12%
Deposits:
Non-interest bearing deposits 25,123 25,081 24,920 - 1
Interest-bearing deposits 183,657 180,467 180,970 2 1
------- ------- -------
Total deposits 208,780 205,548 205,890 2 1
Securitized debt obligations 13,785 11,624 10,010 19 38
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase 1,888 880 2,030 115 (7)
Senior and subordinated notes 19,987 18,684 16,628 7 20
Other borrowings 10,106 17,269 10,446 (41) (3)
------ ------ ------
Total other debt 31,981 36,833 29,104 (13) 10
Other liabilities 9,043 8,855 8,381 2 8
----- ----- -----
Total liabilities 263,851 263,114 253,619 - 4
------- ------- -------
Stockholders' equity:
Preferred stock 0 0 0 - -
Common stock 6 6 6 - -
Additional paid-in capital, net 29,063 27,869 27,210 4 7
Retained earnings 25,540 23,973 22,270 7 15
Accumulated other comprehensive income ("AOCI") (397) (430) (371) (8) 7
Treasury stock, at cost (7,553) (6,365) (5,300) 19 43
------ ------ ------
Total stockholders' equity 46,659 45,053 43,815 4 6
------ ------ ------
Total liabilities and stockholders' equity $310,510 $308,167 $297,434 1 4
======== ======== ========
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1-4)
** Not meaningful.
(1) As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the
related right to reclaim cash collateral or obligation to return cash collateral. Prior period results, excluding regulatory ratios, have been recast to conform to this presentation.
(2) Mortgage representation and warranty reserve is comprised of the following:
2015 2015 2014 2014 2014
Q2 Q1 Q4 Q3 Q2
--- --- --- --- ---
(Dollars in millions) (unaudited)
--------------------------------
(Benefit) provision for mortgage representation and warranty losses before income taxes:
Recorded in continuing operations $(9) $1 $(11) $ - $(29)
Recorded in discontinued operations (27) (19) (41) 70 11
Total (benefit) provision for mortgage representation and warranty losses before income taxes $(36) $(18) $(52) $70 $(18)
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 $636 million as of June 30, 2015, $731 million as of December 31, 2014 and $1.0 billion as of June
30, 2014.
(3) Total net revenue was reduced by $168 million in Q2 2015, $147 million in Q1 2015, $165 million in Q4 2014, $164 million in Q3 2014 and $153 million in Q2 2014 for the estimated
uncollectible amount of billed finance charges and fees.
(4) Includes acquisition-related costs of $8 million in Q2 2015, $7 million in Q1 2015, $10 million in Q4 2014, $13 million in Q3 2014 and $18 million in Q2 2014. 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) We recorded restructuring charges of $147 million under our existing benefit plans as a result of the realignment of our workforce, and a $78 million build in the U.K. Payment Protection
Insurance customer refund reserve ("U.K. PPI Reserve"), reflecting our updated estimate of future complaint levels. We report the following non-GAAP financial measures that we believe
are helpful for investors to understand the effect of these items on our reported results as they provide an additional presentation of our performance. The table below presents a
reconciliation of our reported results to these non-GAAP financial measures:
(Dollars in millions, except per share data) (unaudited) Pretax Income Net Income Net Income Available to Diluted EPS
Common Stockholders
Reported results $1,236 $863 $830 $1.50
Restructuring charges and build in the U.K. PPI Reserve 225 155 155 0.28
Adjusted results $1,461 $1,018 $985 $1.78
(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 14: Reconciliation of Non-GAAP
Measures and Calculation of Regulatory Capital Measures" for additional information on tangible common equity.
(8) Loans held for investment includes acquired loans. We use the term "acquired loans" to refer to a certain portion of the loans acquired in the following transactions: (i) the February
2012 transaction where we acquired the assets and assumed the liabilities of substantially all of ING Direct; (ii) the February 2009 Chevy Chase Bank acquisition; and (iii) the May 2012
transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States. These loans were recorded at fair value at
acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-
3", or Accounting Standard Codification 310-30). The table below presents amounts related to acquired loans accounted for under SOP 03-3:
(Dollars in millions) (unaudited) 2015 2015 2014 2014 2014
Q2 Q1 Q4 Q3 Q2
---
Acquired loans accounted for under SOP 03-3:
Period-end unpaid principal balance $21,841 $23,248 $24,473 $25,726 $27,117
Period-end loans held for investment 20,970 22,334 23,500 24,685 26,019
Average loans held for investment 21,440 22,773 23,907 25,104 26,491
(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 tangible assets for the period. Return on average tangible assets is a
non-GAAP measure. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
(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 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.
(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 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.
(14) Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the restructuring charges and build in the
U.K. PPI Reserve discussed above in Footnote 6, was 54.63% for Q2 2015.
(15) Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(16) Ratios as of the end of Q2 2015 are preliminary and therefore subject to change. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for
information on the calculation of each of these ratios.
(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
2015 Q2 2015 Q1 2014 Q2
------- ------- -------
Average Interest Yield/ Average Interest Yield/ Average Interest Yield/
Balance Income/ Rate(1) Balance Income/ Rate(1) Balance Income/ Rate(1)
(Dollars in millions) (unaudited) Expense(1) Expense(1) Expense(1)
-------------------------------- --------- --------- ---------
Interest-earning assets:
Loans, including loans held for sale $207,335 $4,531 8.74% $205,854 $4,540 8.82% $195,322 $4,279 8.76%
Investment securities 63,771 382 2.40 63,181 406 2.57 62,518 409 2.62
Cash equivalents and other 5,479 24 1.75 9,392 28 1.19 5,730 24 1.68
Total interest-earning assets $276,585 $4,937 7.14 $278,427 $4,974 7.15 $263,570 $4,712 7.15
-------- ------ -------- ------ -------- ------
Interest-bearing liabilities:
Interest-bearing deposits $183,946 $272 0.59 $182,998 $271 0.59 $182,053 $272 0.60
Securitized debt obligations 13,219 36 1.09 11,563 33 1.14 10,731 39 1.45
Senior and subordinated notes 20,336 80 1.57 20,595 79 1.53 16,004 78 1.95
Other borrowings and liabilities 8,857 12 0.54 14,721 15 0.41 8,923 8 0.36
----- ------
Total interest-bearing liabilities $226,358 $400 0.71 $229,877 $398 0.69 $217,711 $397 0.73
-------- ---- ---- -------- ---- ---- -------- ---- ----
Net interest income/spread $4,537 6.43 $4,576 6.46 $4,315 6.42
====== ====== ======
Impact of non-interest bearing funding 0.13 0.11 0.13
---- ----
Net interest margin 6.56% 6.57% 6.55%
==== ==== ====
Six Months Ended June 30,
-------------------------
2015 2014
---- ----
Average Interest Yield/ Average Interest Yield/
Balance Income/ Rate(1) Balance Income/ Rate(1)
(Dollars in millions) (unaudited) Expense(1) Expense(1)
-------------------------------- --------- ---------
Interest-earning assets:
Loans, including loans held for sale $206,598 $9,071 8.78% $194,674 $8,586 8.82%
Investment securities 63,477 788 2.48 62,322 825 2.65
Cash equivalents and other 7,426 52 1.40 6,123 54 1.76
Total interest-earning assets $277,501 $9,911 7.14 $263,119 $9,465 7.19
-------- ------ -------- ------
Interest-bearing liabilities:
Interest-bearing deposits $183,475 $543 0.59 $182,431 $548 0.60
Securitized debt obligations 12,396 69 1.11 10,576 77 1.46
Senior and subordinated notes 20,465 159 1.55 15,088 155 2.05
Other borrowings and liabilities 11,771 27 0.46 10,153 20 0.39
------
Total interest-bearing liabilities $228,107 $798 0.70 $218,248 $800 0.73
-------- ---- ---- -------- ---- ----
Net interest income/spread $9,113 6.44 $8,665 6.46
====== ======
Impact of non-interest bearing funding 0.13 0.13
----
Net interest margin 6.57% 6.59%
==== ====
__________
(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.
10
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
(Dollars in millions) (unaudited) 2015 2015 2014 2014 2014 2015 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2
2014
--- ----
Loans Held For Investment (Period End)
-------------------------------------
Credit card:
Domestic credit card $78,984 $74,131 $77,704 $73,143 $71,165 7% 11% $78,984 $71,165 11%
International credit card 8,219 7,623 8,172 7,488 7,853 8 5 8,219 7,853 5
----- ----- ----- ----- ----- ----- -----
Total credit card 87,203 81,754 85,876 80,631 79,018 7 10 87,203 79,018 10
------ ------ ------ ------ ------ ------ ------
Consumer banking:
Auto 39,991 38,937 37,824 36,254 34,792 3 15 39,991 34,792 15
Home loan 27,595 28,905 30,035 31,203 32,644 (5) (15) 27,595 32,644 (15)
Retail banking 3,590 3,537 3,580 3,604 3,626 1 (1) 3,590 3,626 (1)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 71,176 71,379 71,439 71,061 71,062 - - 71,176 71,062 -
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 22,886 22,831 23,137 22,895 22,040 - 4 22,886 22,040 4
Commercial and industrial 27,660 27,172 26,972 26,071 25,402 2 9 27,660 25,402 9
------ ------ ------ ------ ------ ------ ------
Total commercial lending 50,546 50,003 50,109 48,966 47,442 1 7 50,546 47,442 7
Small-ticket commercial real estate 685 738 781 822 879 (7) (22) 685 879 (22)
--- --- --- --- --- --- ---
Total commercial banking 51,231 50,741 50,890 49,788 48,321 1 6 51,231 48,321 6
------ ------ ------ ------ ------ ------ ------
Other loans 95 104 111 112 127 (9) (25) 95 127 (25)
Total loans held for investment $209,705 $203,978 $208,316 $201,592 $198,528 3 6 $209,705 $198,528 6
------------------------------- ======== ======== ======== ======== ======== ======== ========
Loans Held For Investment (Average)
----------------------------------
Credit card:
Domestic credit card $75,924 $74,770 $74,026 $71,784 $69,376 2% 9% $75,349 $69,592 8%
International credit card 7,977 7,811 7,714 7,710 7,621 2 5 7,895 7,656 3
----- ----- ----- ----- ----- ----- -----
Total credit card 83,901 82,581 81,740 79,494 76,997 2 9 83,244 77,248 8
------ ------ ------ ------ ------ ------ ------
Consumer banking:
Auto 39,546 38,387 37,072 35,584 33,972 3 16 38,970 33,184 17
Home loan 28,251 29,493 30,604 31,859 33,299 (4) (15) 28,869 33,969 (15)
Retail banking 3,570 3,561 3,578 3,605 3,613 - (1) 3,565 3,621 (2)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 71,367 71,441 71,254 71,048 70,884 - 1 71,404 70,774 1
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 22,853 23,120 23,129 22,409 21,484 (1) 6 22,985 21,224 8
Commercial and industrial 27,414 27,190 26,409 25,512 24,611 1 11 27,303 24,079 13
------ ------ ------ ------ ------ ------ ------
Total commercial lending 50,267 50,310 49,538 47,921 46,095 - 9 50,288 45,303 11
Small-ticket commercial real estate 709 760 801 845 896 (7) (21) 735 914 (20)
--- --- --- --- --- --- ---
Total commercial banking 50,976 51,070 50,339 48,766 46,991 - 8 51,023 46,217 10
------ ------ ------ ------ ------ ------ ------
Other loans 93 102 103 114 124 (9) (25) 97 123 (21)
Total average loans held for investment $206,337 $205,194 $203,436 $199,422 $194,996 1 6 $205,768 $194,362 6
--------------------------------------- ======== ======== ======== ======== ======== ======== ========
Net Charge-off Rates
--------------------
Credit card:
Domestic credit card 3.42% 3.55% 3.39% 2.83% 3.52% (13) bps (10) bps 3.49% 3.77% (28) bps
International credit card 2.65 2.80 3.34 3.32 3.93 (15) (128) 2.73 4.05 (132)
Total credit card 3.35 3.48 3.38 2.88 3.56 (13) (21) 3.42 3.79 (37)
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
(Dollars in millions) (unaudited) 2015 2015 2014 2014 2014 2015 2014 2015 2014 2015 vs.
2014
Q2 Q1 Q4 Q3 Q2 Q1 Q2
--- --- --- --- --- --- --- ---
Consumer banking:
Auto 1.22% 1.55% 2.14% 1.98% 1.31% (33) bps (9) bps 1.38% 1.48% (10) bps
Home loan 0.04 0.03 0.07 0.02 0.05 1 (1) 0.03 0.06 (3)
Retail banking 1.39 0.96 1.28 1.36 0.70 43 69 1.18 0.82 36
Total consumer banking 0.76 0.89 1.20 1.07 0.69 (13) 7 0.83 0.76 7
Commercial banking:
Commercial and multifamily real estate (0.04) (0.03) 0.01 (0.10) - (1) (4) (0.03) - (3)
Commercial and industrial 0.13 0.05 0.10 (0.01) 0.04 8 9 0.09 0.03 6
Total commercial lending 0.05 0.01 0.06 (0.05) 0.02 4 3 0.03 0.02 1
Small-ticket commercial real estate 0.15 0.47 0.80 (0.01) 0.61 (32) (46) 0.32 0.64 (32)
Total commercial banking 0.05 0.02 0.07 (0.05) 0.03 3 2 0.04 0.03 1
Other loans (0.79) 1.56 0.47 (0.61) 2.18 ** ** 0.44 0.77 (33)
Total net charge-offs 1.64 1.72 1.80 1.52 1.67 (8) (3) 1.68 1.79 (11)
---------------------
30+ Day Performing Delinquency Rates
------------------------------------
Credit card:
Domestic credit card 2.84% 2.92% 3.27% 3.21% 2.83% (8) bps 1 bps 2.84% 2.83% 1 bps
International credit card 2.65 2.81 2.94 3.34 3.40 (16) (75) 2.65 3.40 (75)
Total credit card 2.82 2.91 3.24 3.22 2.89 (9) (7) 2.82 2.89 (7)
Consumer banking:
Auto 5.58 5.21 6.57 6.14 5.77 37 (19) 5.58 5.77 (19)
Home loan 0.17 0.18 0.21 0.14 0.13 (1) 4 0.17 0.13 4
Retail banking 0.66 0.60 0.64 0.53 0.48 6 18 0.66 0.48 18
Total consumer banking 3.24 2.95 3.60 3.22 2.91 29 33 3.24 2.91 33
----------------------
Nonperforming Loans and Nonperforming Assets Rates(1)(2)
-------------------------------------------------------
Credit card:
International credit card 0.83% 0.84% 0.86% 0.98% 1.03% (1) bps (20) bps 0.83% 1.03% (20) bps
Total credit card 0.08 0.08 0.08 0.09 0.10 - (2) 0.08 0.10 (2)
Consumer banking:
Auto 0.40 0.31 0.52 0.49 0.43 9 (3) 0.40 0.43 (3)
Home loan 1.13 1.16 1.10 1.04 1.07 (3) 6 1.13 1.07 6
Retail banking 0.79 0.71 0.61 0.54 0.79 8 - 0.79 0.79 -
Total consumer banking 0.70 0.67 0.77 0.73 0.75 3 (5) 0.70 0.75 (5)
Commercial banking:
Commercial and multifamily real estate 0.12 0.18 0.27 0.26 0.29 (6) (17) 0.12 0.29 (17)
Commercial and industrial 1.56 0.39 0.39 0.37 0.41 117 115 1.56 0.41 115
Total commercial lending 0.91 0.29 0.33 0.32 0.36 62 55 0.91 0.36 55
Small-ticket commercial real estate 0.47 1.62 0.96 0.42 1.40 (115) (93) 0.47 1.40 (93)
Total commercial banking 0.90 0.31 0.34 0.32 0.38 59 52 0.90 0.38 52
Other loans 10.68 13.33 13.37 14.66 12.74 (265) (206) 10.68 12.74 (206)
Total nonperforming loans 0.50 0.35 0.39 0.38 0.41 15 9 0.50 0.41 9
Total nonperforming assets 0.64 0.50 0.54 0.53 0.55 14 9 0.64 0.55 9
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary-Business Segment Results
Three Months Ended June 30, 2015 Six Months Ended June 30, 2015
-------------------------------- ------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Banking Commercial Other Total Credit Consumer Banking Commercial
Banking Banking Other
Card Card
--- ---- ----
Net interest income (expense) $4,537 $2,633 $1,444 $466 $(6) $9,113 $5,299 $2,878 $927 $9
Non-interest income 1,135 845 196 123 (29) 2,206 1,661 354 237 (46)
--- --- --- --- ----- ----- --- --- ---
Total net revenue (loss)(3) 5,672 3,478 1,640 589 (35) 11,319 6,960 3,232 1,164 (37)
Provision for credit losses 1,129 895 185 49 - 2,064 1,564 391 109 -
Non-interest expense 3,307 1,857 998 270 182 6,356 3,633 1,968 542 213
----- --- --- --- ----- ----- ----- --- ---
Income (loss) from continuing operations before income taxes 1,236 726 457 270 (217) 2,899 1,763 873 513 (250)
Income tax provision (benefit) 384 263 166 98 (143) 913 632 316 186 (221)
Income (loss) from continuing operations, net of tax $852 $463 $291 $172 $(74) $1,986 $1,131 $557 $327 $(29)
==== ==== ==== ==== ==== ====== ====== ==== ==== ====
Three Months Ended March 31, 2015
---------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Banking Commercial
Banking Other
Card
--- ----
Net interest income $4,576 $2,666 $1,434 $461 $15
Non-interest income 1,071 816 158 114 (17)
--- --- --- ---
Total net revenue (loss)(3) 5,647 3,482 1,592 575 (2)
Provision for credit losses 935 669 206 60 -
Non-interest expense 3,049 1,776 970 272 31
----- ----- --- --- ---
Income (loss) from continuing operations before income taxes 1,663 1,037 416 243 (33)
Income tax provision (benefit) 529 369 150 88 (78)
---
Income from continuing operations, net of tax $1,134 $668 $266 $155 $45
====== ==== ==== ==== ===
Three Months Ended June 30, 2014 Six Months Ended June 30, 2014
-------------------------------- ------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Banking Commercial Other Total Credit Consumer Banking Commercial
Banking Banking Other
Card Card
--- ---- ----
Net interest income (expense) $4,315 $2,461 $1,431 $436 $(13) $8,665 $4,986 $2,864 $857 $(42)
Non-interest income 1,153 839 170 109 35 2,173 1,624 320 196 33
----- --- --- --- --- ----- ----- --- --- ---
Total net revenue (loss)(3) 5,468 3,300 1,601 545 22 10,838 6,610 3,184 1,053 (9)
Provision (benefit) for credit losses 704 549 143 12 - 1,439 1,107 283 52 (3)
Non-interest expense 2,979 1,719 938 267 55 5,911 3,445 1,868 522 76
----- --- --- --- ----- ----- --- ---
Income (loss) from continuing operations before income taxes 1,785 1,032 520 266 (33) 3,488 2,058 1,033 479 (82)
Income tax provision (benefit) 581 364 186 95 (64) 1,160 722 369 171 (102)
--- -----
Income from continuing operations, net of tax $1,204 $668 $334 $171 $31 $2,328 $1,336 $664 $308 $20
====== ==== ==== ==== === ====== ====== ==== ==== ===
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary-Credit Card Business
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
2015 2015 2014 2014 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2
--- --- --- --- --- --- ---
(Dollars in millions) (unaudited) 2015 2014 2014
-------------------------------- ---- ---- ----
Credit Card(4)
-------------
Earnings:
Net interest income $2,633 $2,666 $2,697 $2,627 $2,461 (1)% 7% $5,299 $4,986 6%
Non-interest income 845 816 841 846 839 4 1 1,661 1,624 2
--- --- --- --- --- ----- -----
Total net revenue 3,478 3,482 3,538 3,473 3,300 - 5 6,960 6,610 5
Provision for credit losses 895 669 856 787 549 34 63 1,564 1,107 41
Non-interest expense 1,857 1,776 1,888 1,730 1,719 5 8 3,633 3,445 5
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 726 1,037 794 956 1,032 (30) (30) 1,763 2,058 (14)
Income tax provision 263 369 275 332 364 (29) (28) 632 722 (12)
---
Income from continuing operations, net of tax $463 $668 $519 $624 $668 (31) (31) $1,131 $1,336 (15)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $87,203 $81,754 $85,876 $80,631 $79,018 7% 10% $87,203 $79,018 10%
Average loans held for investment 83,901 82,581 81,740 79,494 76,997 2 9 83,244 77,248 8
Average yield on loans held for investment(5) 13.98% 14.30% 14.61% 14.65% 14.22% (32) bps (24) bps 14.14% 14.33% (19) bps
Total net revenue margin(6) 16.58 16.87 17.31 17.48 17.14 (29) (56) 16.72 17.11 (39)
Net charge-off rate 3.35 3.48 3.38 2.88 3.56 (13) (21) 3.42 3.79 (37)
30+ day performing delinquency rate 2.82 2.91 3.24 3.22 2.89 (9) (7) 2.82 2.89 (7)
30+ day delinquency rate 2.88 2.97 3.30 3.29 2.97 (9) (9) 2.88 2.97 (9)
Nonperforming loan rate(1) 0.08 0.08 0.08 0.09 0.10 - (2) 0.08 0.10 (2)
Card loan premium amortization and other intangible accretion(7) $7 $11 $11 $18 $31 (36)% (77)% $18 $68 (74)%
PCCR intangible amortization 80 84 87 90 94 (5) (15) 164 192 (15)
Purchase volume(8) 68,559 57,383 63,484 57,474 56,358 19 22 125,942 103,792 21
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
2015 2015 2014 2014 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2
--- --- --- --- --- --- ---
(Dollars in millions) (unaudited) 2015 2014 2014
-------------------------------- ---- ---- ----
Domestic Card
-------------
Earnings:
Net interest income $2,395 $2,421 $2,432 $2,361 $2,193 (1)% 9% $4,816 $4,448 8%
Non-interest income 796 743 768 763 768 7 4 1,539 1,470 5
--- --- --- --- --- ----- -----
Total net revenue 3,191 3,164 3,200 3,124 2,961 1 8 6,355 5,918 7
Provision for credit losses 853 610 765 738 504 40 69 1,463 990 48
Non-interest expense 1,621 1,580 1,676 1,530 1,513 3 7 3,201 3,058 5
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 717 974 759 856 944 (26) (24) 1,691 1,870 (10)
Income tax provision 259 353 272 306 337 (27) (23) 612 668 (8)
---
Income from continuing operations, net of tax $458 $621 $487 $550 $607 (26) (25) $1,079 $1,202 (10)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $78,984 $74,131 $77,704 $73,143 $71,165 7% 11% $78,984 $71,165 11%
Average loans held for investment 75,924 74,770 74,026 71,784 69,376 2 9 75,349 69,592 8
Average yield on loans held for investment(5) 13.95% 14.23% 14.43% 14.46% 13.95% (28) bps - 14.09% 14.07% 2 bps
Total net revenue margin(6) 16.81 16.93 17.29 17.41 17.07 (12) (26) bps 16.87 17.01 (14)
Net charge-off rate 3.42 3.55 3.39 2.83 3.52 (13) (10) 3.49 3.77 (28)
30+ day performing delinquency rate 2.84 2.92 3.27 3.21 2.83 (8) 1 2.84 2.83 1
30+ day delinquency rate 2.84 2.92 3.27 3.21 2.83 (8) 1 2.84 2.83 1
Purchase volume(8) $62,198 $52,025 $58,234 $53,690 $52,653 20% 18% $114,223 $96,792 18%
-----------------
International Card(4)
--------------------
Earnings:
Net interest income $238 $245 $265 $266 $268 (3)% (11)% $483 $538 (10)%
Non-interest income 49 73 73 83 71 (33) (31) 122 154 (21)
--- --- --- --- --- --- ---
Total net revenue 287 318 338 349 339 (10) (15) 605 692 (13)
Provision for credit losses 42 59 91 49 45 (29) (7) 101 117 (14)
Non-interest expense 236 196 212 200 206 20 15 432 387 12
--- --- --- --- --- --- ---
Income from continuing operations before income taxes 9 63 35 100 88 (86) (90) 72 188 (62)
Income tax provision 4 16 3 26 27 (75) (85) 20 54 (63)
--- ---
Income from continuing operations, net of tax $5 $47 $32 $74 $61 (89) (92) $52 $134 (61)
=== === === === === === ====
Selected performance metrics:
Period-end loans held for investment $8,219 $7,623 $8,172 $7,488 $7,853 8% 5% $8,219 $7,853 5%
Average loans held for investment 7,977 7,811 7,714 7,710 7,621 2 5 7,895 7,656 3
Average yield on loans held for investment(5) 14.29% 14.93% 16.31% 16.42% 16.74% (64) bps (245) bps 14.60% 16.69% (209) bps
Total net revenue margin(6) 14.36 16.31 17.55 18.13 17.76 (195) (340) 15.33 18.07 (274)
Net charge-off rate 2.65 2.80 3.34 3.32 3.93 (15) (128) 2.73 4.05 (132)
30+ day performing delinquency rate 2.65 2.81 2.94 3.34 3.40 (16) (75) 2.65 3.40 (75)
30+ day delinquency rate 3.29 3.44 3.60 4.08 4.20 (15) (91) 3.29 4.20 (91)
Nonperforming loan rate(1) 0.83 0.84 0.86 0.98 1.03 (1) (20) 0.83 1.03 (20)
Purchase volume(8) $6,361 $5,358 $5,250 $3,784 $3,705 19% 72% $11,719 $7,000 67%
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary-Consumer Banking Business
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
2015 2015 2014 2014 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2
Q1 Q2
--- ---
(Dollars in millions) (unaudited) 2015 2014 2014
-------------------------------- ---- ---- ----
Consumer Banking
----------------
Earnings:
Net interest income $1,444 $1,434 $1,459 $1,425 $1,431 1% 1% $2,878 $2,864 -
Non-interest income 196 158 185 179 170 24 15 354 320 11%
--- --- --- --- --- --- ---
Total net revenue 1,640 1,592 1,644 1,604 1,601 3 2 3,232 3,184 2
Provision for credit losses 185 206 222 198 143 (10) 29 391 283 38
Non-interest expense 998 970 1,045 956 938 3 6 1,968 1,868 5
--- --- ----- --- --- ----- -----
Income from continuing operations before income taxes 457 416 377 450 520 10 (12) 873 1,033 (15)
Income tax provision 166 150 135 161 186 11 (11) 316 369 (14)
--- --- --- --- --- --- ---
Income from continuing operations, net of tax $291 $266 $242 $289 $334 9 (13) $557 $664 (16)
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $71,176 $71,379 $71,439 $71,061 $71,062 - - $71,176 $71,062 -
Average loans held for investment 71,367 71,441 71,254 71,048 70,884 - 1% 71,404 70,774 1%
Average yield on loans held for investment(5) 6.27% 6.26% 6.45% 6.18% 6.22% 1 bps 5 bps 6.27% 6.20% 7 bps
Auto loan originations $5,433 $5,185 $5,390 $5,410 $5,376 5% 1% $10,618 $10,103 5%
Period-end deposits 170,321 172,502 168,078 167,624 169,153 (1) 1 170,321 169,153 1
Average deposits 171,076 169,593 167,727 168,407 169,694 1 1 170,339 169,188 1
Average deposit interest rate 0.57% 0.57% 0.57% 0.58% 0.57% - - 0.57% 0.57% -
Core deposit intangible amortization $21 $22 $24 $26 $28 (5)% (25)% $43 $58 (26)%
Net charge-off rate 0.76% 0.89% 1.20% 1.07% 0.69% (13) bps 7 bps 0.83% 0.76% 7 bps
30+ day performing delinquency rate 3.24 2.95 3.60 3.22 2.91 29 33 3.24 2.91 33
30+ day delinquency rate 3.80 3.46 4.23 3.82 3.49 34 31 3.80 3.49 31
Nonperforming loan rate(1) 0.70 0.67 0.77 0.73 0.75 3 (5) 0.70 0.75 (5)
Nonperforming asset rate(2) 0.98 0.95 1.06 1.01 1.01 3 (3) 0.98 1.01 (3)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary-Commercial Banking Business
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
2015 2015 2014 2014 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2
--- --- --- --- --- --- ---
(Dollars in millions) (unaudited) 2015 2014 2014
-------------------------------- ---- ---- ----
Commercial Banking
------------------
Earnings:
Net interest income $466 $461 $455 $439 $436 1% 7% $927 $857 8%
Non-interest income 123 114 132 122 109 8 13 237 196 21
--- --- --- --- --- --- ---
Total net revenue(3) 589 575 587 561 545 2 8 1,164 1,053 11
Provision for credit losses 49 60 32 9 12 (18) 308 109 52 110
Non-interest expense 270 272 293 268 267 (1) 1 542 522 4
--- --- --- --- ---
Income from continuing operations before income taxes 270 243 262 284 266 11 2 513 479 7
Income tax provision 98 88 93 102 95 11 3 186 171 9
Income from continuing operations, net of tax $172 $155 $169 $182 $171 11 1 $327 $308 6
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $51,231 $50,741 $50,890 $49,788 $48,321 1% 6% $51,231 $48,321 6%
Average loans held for investment 50,976 51,070 50,339 48,766 46,991 - 8 51,023 46,217 10
Average yield on loans held for investment(3)(5) 3.26% 3.22% 3.33% 3.39% 3.50% 4 bps (24) bps 3.24% 3.48% (24) bps
Period-end deposits $32,909 $32,575 $31,954 $31,918 $31,440 1% 5% $32,909 $31,440 5%
Average deposits 32,778 32,845 32,363 31,772 31,238 - 5 32,811 31,431 4
Average deposit interest rate 0.25% 0.24% 0.24% 0.24% 0.24% 1 bps 1 bps 0.24% 0.24% -
Core deposit intangible amortization $4 $4 $5 $5 $5 - (20)% $8 $11 (27)%
Net charge-off (recovery) rate 0.05% 0.02% 0.07% (0.05)% 0.03% 3 bps 2 bps 0.04% 0.03% 1 bps
Nonperforming loan rate(1) 0.90 0.31 0.34 0.32 0.38 59 52 0.90 0.38 52
Nonperforming asset rate(2) 0.91 0.31 0.36 0.35 0.41 60 50 0.91 0.41 50
Risk category:(9)
Noncriticized $49,001 $48,938 $49,284 $48,408 $46,881 - 5% $49,001 $46,881 5%
Criticized performing 1,767 1,645 1,431 1,219 1,259 7% 40 1,767 1,259 40
Criticized nonperforming 463 158 175 161 181 193 156 463 181 156
--- --- --- --- --- --- ---
Total commercial loans $51,231 $50,741 $50,890 $49,788 $48,321 1 6 $51,231 $48,321 6
======= ======= ======= ======= ======= ======= =======
Risk category as a percentage of period-end commercial loans held
for investment:
Noncriticized 95.7% 96.5% 96.9% 97.3% 97.0% (80) bps (130) bps 95.7% 97.0% (130) bps
Criticized performing 3.4 3.2 2.8 2.4 2.6 20 80 3.4 2.6 80
Criticized nonperforming 0.9 0.3 0.3 0.3 0.4 60 50 0.9 0.4 50
--- --- --- --- --- --- ---
Total commercial loans 100.0% 100.0% 100.0% 100.0% 100.0% - - 100.0% 100.0% -
===== ===== ===== ===== ===== ===== =====
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary-Other and Total
2015 Q2 vs. Six Months Ended June 30,
----------- -------------------------
2015 2015 2014 2014 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2014
(Dollars in millions) (unaudited) 2015 2014
-------------------------------- ---- ----
Other
-----
Earnings:
Net interest (expense) income $(6) $15 $45 $6 $(13) ** (54)% $9 $(42) **
Non-interest income (29) (17) (1) (5) 35 71% ** (46) 33 **
--- --- --- --- --- --- ---
Total net (loss) revenue(3) (35) (2) 44 1 22 ** ** (37) (9) **
Benefit for credit losses - - (1) (1) - - - - (3) **
Non-interest expense(10) 182 31 58 31 55 ** ** 213 76 180%
--- --- --- --- --- --- ---
Loss from continuing operations before income taxes (217) (33) (13) (29) (33) ** ** (250) (82) **
Income tax benefit (143) (78) (53) (59) (64) 83 123 (221) (102) 117
---- --- --- --- --- ---- ----
(Loss) income from continuing operations, net of tax $(74) $45 $40 $30 $31 ** ** $(29) $20 **
==== === === === === ==== ===
Selected performance metrics:
Period-end loans held for investment $95 $104 $111 $112 $127 (9)% (25)% $95 $127 (25)%
Average loans held for investment 93 102 103 114 124 (9) (25) 97 123 (21)
Period-end deposits 5,550 5,363 5,516 4,722 5,297 3 5 5,550 5,297 5
Average deposits 5,289 5,413 5,265 5,020 5,383 (2) (2) 5,351 5,461 (2)
----------------
Total
-----
Earnings:
Net interest income $4,537 $4,576 $4,656 $4,497 $4,315 (1)% 5% $9,113 $8,665 5%
Non-interest income 1,135 1,071 1,157 1,142 1,153 6 (2) 2,206 2,173 2
----- ----- ----- ----- ----- ----- -----
Total net revenue 5,672 5,647 5,813 5,639 5,468 - 4 11,319 10,838 4
Provision for credit losses 1,129 935 1,109 993 704 21 60 2,064 1,439 43
Non-interest expense 3,307 3,049 3,284 2,985 2,979 8 11 6,356 5,911 8
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,236 1,663 1,420 1,661 1,785 (26) (31) 2,899 3,488 (17)
Income tax provision 384 529 450 536 581 (27) (34) 913 1,160 (21)
--- --- --- --- --- --- -----
Income from continuing operations, net of tax $852 $1,134 $970 $1,125 $1,204 (25) (29) $1,986 $2,328 (15)
==== ====== ==== ====== ====== ====== ======
Selected performance metrics:
Period-end loans held for investment $209,705 $203,978 $208,316 $201,592 $198,528 3% 6% $209,705 $198,528 6%
Average loans held for investment 206,337 205,194 203,436 199,422 194,996 1 6 205,768 194,362 6
Period-end deposits 208,780 210,440 205,548 204,264 205,890 (1) 1 208,780 205,890 1
Average deposits 209,143 207,851 205,355 205,199 206,315 1 1 208,501 206,080 1
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Notes to Loan and Business Segments
Disclosures (Tables 7-12)
** Not meaningful.
(1) The nonperforming loan rates are
calculated based on nonperforming
loans for each category divided by
period-end total loans held for
investment.
(2) Nonperforming assets consist of
nonperforming loans, real estate
owned ("REO") and other foreclosed
assets. The nonperforming asset rates
are calculated based on nonperforming
assets for each category divided by
the combined period-end total of
loans held for investment, REO and
other foreclosed assets for each
respective category. Calculation of
nonperforming assets rates for our
Consumer Banking and Commercial
Banking businesses are adjusted to
exclude the impact of acquired REO.
(3) Some of our tax-related commercial
investments generate tax-exempt
income or tax credits. Accordingly,
we make certain reclassifications
within our Commercial Banking
business results to present revenues
and yields on a taxable-equivalent
basis, calculated assuming an
effective tax rate approximately
equal to our federal statutory tax
rate of 35% with offsetting
reclassifications within the Other
category.
(4) Includes a build in our U.K. PPI
Reserve, which impacted both revenue
and non-interest expense for our
International Card business.
(5) Calculated based on annualized
interest income for the period
divided by average loans held for
investment during the period for the
specified loan category. Annualized
interest income excludes various
allocations including funds transfer
pricing that assigns certain balance
sheet assets, deposits and other
liabilities and their related revenue
and expenses attributable to each
business segment.
(6) Calculated based on annualized total
net revenue for the period divided by
average loans held for investment
during the period for the specified
loan category.
(7) Represents the net reduction in
interest income attributable to non-
SOP 03-3 card loan premium
amortization and other intangible
accretion associated with the May
2012 transaction in which we acquired
substantially all of HSBC's credit
card and private-label credit card
business in the United States.
(8) Includes credit card purchase
transactions, net of returns for
loans classified as held for
investment and held for sale.
Excludes cash advance and balance
transfer transactions.
(9) Criticized exposures correspond to the
"Special Mention," "Substandard" and
"Doubtful" asset categories defined
by bank regulatory authorities.
(10) Includes restructuring charges for
employee severance and related
benefits.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures(1)
Basel III Standardized
----------------------
(Dollars in millions) (unaudited) June 30, March 31, December 31, September 30, June 30,
2015 2015 2014 2014 2014
--- ---- ---- ---- ---- ----
Regulatory Capital Metrics
--------------------------
Common equity Tier 1 capital $29,804 $29,671 $29,534 $29,116 $28,774
Tier 1 capital 32,614 31,493 31,355 30,451 30,111
Total risk-based capital(2) 37,114 35,878 35,879 34,860 34,743
Risk-weighted assets(3) 246,030 238,011 236,944 228,759 226,172
Average assets for the leverage ratio 293,291 295,556 291,243 286,070 281,345
-------------------------------------
Capital Ratios
--------------
Common equity Tier 1 capital ratio(4) 12.1% 12.5% 12.5% 12.7% 12.7%
Tier 1 risk-based capital ratio(5) 13.3 13.2 13.2 13.3 13.3
Total risk-based capital ratio(6) 15.1 15.1 15.1 15.2 15.4
Tier 1 leverage ratio(7) 11.1 10.7 10.8 10.6 10.7
Tangible common equity ("TCE") ratio(8) 9.7 9.8 9.5 9.6 9.5
Reconciliation of Non-GAAP Measures
We report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and tangible assets. The tables below provide the details of the calculation of our non-GAAP capital measures and regulatory capital. While our non-GAAP capital
measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
2015 2015 2014 2014 2014
(Dollars in millions) (unaudited) Q2 Q1 Q4 Q3 Q2
-------------------------------- --- --- --- --- ---
Tangible Common Equity (Period End)
----------------------------------
Stockholders' equity $46,659 $45,730 $45,053 $44,018 $43,815
Goodwill and intangible assets(9) (15,240) (15,307) (15,383) (15,472) (15,564)
Noncumulative perpetual preferred stock(10) (2,810) (1,822) (1,822) (1,336) (1,338)
------ ------
Tangible common equity $28,609 $28,601 $27,848 $27,210 $26,913
---------------------- ======= ======= ======= ======= =======
Tangible Common Equity (Average)
-------------------------------
Average stockholders' equity $47,255 $46,397 $45,576 $44,827 $43,767
Average goodwill and intangible assets(9) (15,256) (15,339) (15,437) (15,525) (15,615)
Noncumulative perpetual preferred stock(10) (2,377) (1,822) (1,681) (1,338) (970)
Average tangible common equity $29,622 $29,236 $28,458 $27,964 $27,182
======= ======= ======= ======= =======
2015 2015 2014 2014 2014
(Dollars in millions) (unaudited) Q2 Q1 Q4 Q3 Q2
-------------------------------- --- --- --- --- ---
Tangible Assets (Period End)
---------------------------
Total assets(11) $310,510 $306,224 $308,167 $299,640 $297,434
Goodwill and intangible assets(9) (15,240) (15,307) (15,383) (15,472) (15,564)
-------
Tangible assets(11) $295,270 $290,917 $292,784 $284,168 $281,870
------------------ ======== ======== ======== ======== ========
Tangible Assets (Average)
------------------------
Average total assets(11) $307,206 $309,401 $304,153 $298,913 $294,089
Average goodwill and intangible assets(9) (15,256) (15,339) (15,437) (15,525) (15,615)
-------
Average tangible assets(11) $291,950 $294,062 $288,716 $283,388 $278,474
======== ======== ======== ======== ========
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
(Dollars in millions) (unaudited) June 30, March 31, December 31, September 30, June 30,
2014 2014
2015 2015 2014
--- ---- ---- ----
Common equity excluding AOCI $44,246 $44,120 $43,661 $43,241 $42,848
Adjustments:
AOCI(12)(13) (128) (26) (69) (146) 6
Goodwill(9) (13,809) (13,801) (13,805) (13,801) (13,811)
Intangible assets(9)(13) (413) (450) (243) (266) (289)
Other (92) (172) (10) 88 20
Common equity Tier 1 capital $29,804 $29,671 $29,534 $29,116 $28,774
======= ======= ======= ======= =======
Risk-weighted assets(3) $246,030 $238,011 $236,944 $228,759 $226,172
Common equity Tier 1 capital ratio(4) 12.1% 12.5% 12.5% 12.7% 12.7%
__________
(1) Regulatory capital metrics and
capital ratios as of the end of
Q2 2015 are preliminary and
therefore subject to change.
(2) Total risk-based capital equals
the sum of Tier 1 capital and
Tier 2 capital.
(3) As of January 1, 2015, risk-
weighted assets are calculated
under the Basel III Standardized
Approach, subject to transition
provisions. Prior to January 1,
2015 risk-weighted assets were
calculated under Basel I.
(4) Common equity Tier 1 capital ratio
is a regulatory measure
calculated based on Common equity
Tier 1 capital divided by risk-
weighted assets.
(5) Tier 1 risk-based capital ratio
is a regulatory capital measure
calculated based on Tier 1
capital divided by risk-weighted
assets.
(6) Total risk-based capital ratio is
a regulatory capital measure
calculated based on Total risk-
based capital divided by risk-
weighted assets.
(7) Tier 1 leverage ratio is a
regulatory capital measure
calculated based on Tier 1
capital divided by average
assets, after certain
adjustments.
(8) TCE ratio is a non-GAAP measure
calculated based on TCE divided
by tangible assets.
(9) Includes impact of related
deferred taxes.
(10) Includes related surplus.
(11) As of January 1, 2015, we changed
our accounting principle from a
gross basis of presentation to a
net basis, for presenting
qualifying derivative assets and
liabilities, as well as the
related right to reclaim cash
collateral or obligation to
return cash collateral. Prior
period results, excluding
regulatory ratios, have been
recast to conform to this
presentation.
(12) Amounts presented are net of tax.
(13) Amounts based on transition
provisions for regulatory capital
deductions and adjustments of 20%
for 2014 and 40% for 2015.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/capital-one-reports-second-quarter-2015-net-income-of-863-million-or-150-per-share-300118070.html
SOURCE Capital One Financial Corporation
