CAPITAL ONE FINANCIAL CORPORATION MCLEAN, Va., Oct. 22, 2015 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2015 of $1.1 billion, or $1.98 per diluted common share, compared to the second quarter of 2015 with net income of $863 million, or $1.50 per diluted common share, and the third quarter of 2014 with net income of $1.1 billion, or $1.86 per diluted common share. Net income for the third quarter of 2015, adjusted for the impact of a build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve") of $69 million, was $1.2 billion or $2.10 per diluted common share.
"Capital One posted solid results in the third quarter, highlighted once again by strong growth in our Domestic Card business," said Richard D. Fairbank, Chair and Chief Executive Officer. "Capital One continues to deliver attractive risk-adjusted returns today while investing to sustain growth and returns over the long-term."
All comparisons below are for the third quarter of 2015 compared with the second quarter of 2015 unless otherwise noted.
Third Quarter 2015 Income Statement Summary:
-- Total net revenue increased 4 percent to $5.9 billion, including ($49)
million of contra-revenue from a build in the U.K. PPI Reserve, compared
to ($37) million contra-revenue in the second quarter of 2015.
-- Total non-interest expense decreased 4 percent to $3.2 billion:
-- 8 percent increase in marketing.
-- 6 percent decrease in operating expense, including $20 million build
in the U.K. PPI Reserve, compared to $147 million in restructuring
charges and a build of $41 million in the U.K. PPI Reserve in the
second quarter of 2015.
-- Pre-provision earnings increased 16 percent to $2.7 billion.
-- Provision for credit losses decreased 3 percent to $1.1 billion.
-- Efficiency ratio of 53.56 percent; Efficiency ratio excluding build in
the U.K. PPI Reserve of 52.78 percent.
Third Quarter 2015 Balance Sheet Summary:
-- Common equity Tier 1 capital ratio under Basel III Standardized Approach
of 12.1 percent at September 30, 2015.
-- Net interest margin of 6.73 percent, up 17 basis points; Net interest
margin excluding the contra-revenue impact of the build in the U.K. PPI
Reserve of 6.75 percent.
-- Period-end loans held for investment in the quarter increased $3.6
billion, or 2 percent, to $213.3 billion.
-- Domestic Card period-end loans increased $3.2 billion, or 4 percent,
to $82.2 billion.
-- Consumer Banking period-end loans decreased $186 million, or less
than 1 percent, to $71.0 billion:
-- Auto period-end loans increased $1.1 billion, or 3 percent, to
$41.1 billion.
-- Home loans period-end loans decreased $1.3 billion, or 5
percent, to $26.3 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking period-end loans increased $881 million, or 2
percent, to $52.1 billion.
-- Average loans held for investment in the quarter increased $4.9 billion,
or 2 percent, to $211.2 billion.
-- Domestic Card average loans increased $4.5 billion, or 6 percent, to
$80.4 billion.
-- Consumer Banking average loans decreased $270 million, or less than
1 percent, to $71.1 billion:
-- Auto average loans increased $1.0 billion, or 3 percent, to
$40.6 billion.
-- Home loans average loans decreased by $1.3 billion, or 5
percent, to $26.9 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking average loans increased $616 million, or 1
percent, to $51.6 billion.
-- Period-end total deposits increased $4.1 billion, or 2 percent, to
$212.9 billion, while average deposits increased $1.8 billion to $211.0
billion.
-- Interest-bearing deposit rate decreased by 1 basis point to 0.58
percent.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on October 22, 2015 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us", then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through November 2, 2015 at 5:00 PM Eastern Time.
Forward-Looking Statements
Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2014.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $212.9 billion in deposits and $313.7 billion in total assets as of September 30, 2015. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
Exhibit 99.2
Capital One Financial Corporation
Financial Supplement
Third Quarter 2015(1)
Table of Contents
Capital One Financial Corporation Consolidated Results Page
Table 1: Financial Summary-Consolidated 1
Table 2: Selected Metrics-Consolidated 3
Table 3: Consolidated Statements of Income 4
Table 4: Consolidated Balance Sheets 6
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1-4) 8
Table 6: Average Balances, Net Interest Income and Net Interest Margin 10
Table 7: Loan Information and Performance Statistics 11
Business Segment Results
Table 8: Financial Summary-Business Segment Results 13
Table 9: Financial & Statistical Summary-Credit Card Business 14
Table 10: Financial & Statistical Summary-Consumer Banking Business 16
Table 11: Financial & Statistical Summary-Commercial Banking Business 17
Table 12: Financial & Statistical Summary-Other and Total 18
Table 13: Notes to Loan and Business Segments Disclosures (Tables 7-12) 19
Other
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures 20
(1) The information contained in this
Financial Supplement is
preliminary and based on data
available at the time of the
earnings presentation. Investors
should refer to our Quarterly
Report on Form 10-Q for the period
ended September 30, 2015 once it
is filed with the Securities and
Exchange Commission.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary-Consolidated(1)
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
(Dollars in millions, except per share data and as noted) (unaudited) 2015 2015 2015 2014 2014 2015 2014 2015 vs.
Q3 Q2 Q1 Q4 Q3 Q2 Q3 2015 2014 2014
--- --- --- --- --- --- --- ---- ---- ----
Income Statement
----------------
Net interest income $4,760 $4,537 $4,576 $4,656 $4,497 5% 6% $13,873 $13,162 5%
Non-interest income 1,140 1,135 1,071 1,157 1,142 - - 3,346 3,315 1
----- ----- ----- ----- -----
Total net revenue(2) 5,900 5,672 5,647 5,813 5,639 4 5 17,219 16,477 5
Provision for credit losses 1,092 1,129 935 1,109 993 (3) 10 3,156 2,432 30
Non-interest expense:
Marketing 418 387 375 509 392 8 7 1,180 1,052 12
Amortization of intangibles 106 111 110 123 130 (5) (18) 327 409 (20)
Operating expenses 2,636 2,809 2,564 2,652 2,463 (6) 7 8,009 7,435 8
----- ----- ----- ----- ----- -----
Total non-interest expense 3,160 3,307 3,049 3,284 2,985 (4) 6 9,516 8,896 7
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,648 1,236 1,663 1,420 1,661 33 (1) 4,547 5,149 (12)
Income tax provision 530 384 529 450 536 38 (1) 1,443 1,696 (15)
--- --- --- --- --- ----- -----
Income from continuing operations, net of tax 1,118 852 1,134 970 1,125 31 (1) 3,104 3,453 (10)
(Loss) income from discontinued operations, net of tax(3) (4) 11 19 29 (44) ** (91) 26 (24) **
--- --- --- --- --- --- ---
Net income 1,114 863 1,153 999 1,081 29 3 3,130 3,429 (9)
Dividends and undistributed earnings allocated to participating securities(4) (6) (4) (6) (4) (5) 50 20 (16) (14) 14
Preferred stock dividends(4) (29) (29) (32) (21) (20) - 45 (90) (46) 96
Net income available to common stockholders $1,079 $830 $1,115 $974 $1,056 30 2 $3,024 $3,369 (10)
====== ==== ====== ==== ====== ====== ======
Common Share Statistics
-----------------------
Basic earnings per common share:(4)
Net income from continuing operations $2.01 $1.50 $2.00 $1.71 $1.97 34% 2% $5.49 $5.99 (8)%
(Loss) income from discontinued operations (0.01) 0.02 0.03 0.05 (0.08) ** (88) 0.05 (0.04) **
-----
Net income per basic common share $2.00 $1.52 $2.03 $1.76 $1.89 32 6 $5.54 $5.95 (7)
===== ===== ===== ===== ===== ===== =====
Diluted earnings per common share:(4)
Net income from continuing operations $1.99 $1.48 $1.97 $1.68 $1.94 34 3 $5.43 $5.90 (8)
(Loss) income from discontinued operations (0.01) 0.02 0.03 0.05 (0.08) ** (88) 0.05 (0.04) **
Net income per diluted common share(5) $1.98 $1.50 $2.00 $1.73 $1.86 32 6 $5.48 $5.86 (6)
===== ===== ===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic 540.6 545.6 550.2 554.3 559.9 (1) (3) 545.5 566.1 (4)
Diluted 546.3 552.0 557.2 561.8 567.9 (1) (4) 551.9 575.2 (4)
Common shares outstanding (period end, in millions) 534.9 542.5 548.0 553.4 558.5 (1) (4) 534.9 558.5 (4)
Dividends paid per common share $0.40 $0.40 $0.30 $0.30 $0.30 - 33 $1.10 $0.90 22
Tangible book value per common share (period end)(6) 54.66 52.74 52.19 50.32 48.72 4 12 54.66 48.72 12
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
(Dollars in millions) (unaudited) 2015 2015 2015 2014 2014 2015 2014 2015 vs.
--------------------------------
Q3 Q2 Q1 Q4 Q3 Q2 Q3 2015 2014 2014
--- --- --- --- --- --- --- ---- ---- ----
Balance Sheet (Period End)
-------------------------
Loans held for investment(7) $213,329 $209,705 $203,978 $208,316 $201,592 2% 6% $213,329 $201,592 6%
Interest-earning assets 283,073 280,137 275,837 277,849 270,001 1 5 283,073 270,001 5
Total assets 313,700 310,510 306,224 308,167 299,640 1 5 313,700 299,640 5
Interest-bearing deposits 187,848 183,657 185,208 180,467 178,876 2 5 187,848 178,876 5
Total deposits 212,903 208,780 210,440 205,548 204,264 2 4 212,903 204,264 4
Borrowings 42,778 45,766 41,029 48,457 42,243 (7) 1 42,778 42,243 1
Common equity 44,391 43,849 43,908 43,231 42,682 1 4 44,391 42,682 4
Total stockholders' equity 47,685 46,659 45,730 45,053 44,018 2 8 47,685 44,018 8
--------------------------
Balance Sheet (Average Balances)
-------------------------------
Loans held for investment(7) $211,227 $206,337 $205,194 $203,436 $199,422 2% 6% $207,608 $196,068 6%
Interest-earning assets 283,082 276,585 278,427 273,436 268,890 2 5 279,388 265,065 5
Total assets 313,822 307,206 309,401 304,153 298,913 2 5 310,146 295,506 5
Interest-bearing deposits 185,800 183,946 182,998 179,401 179,928 1 3 184,258 181,587 1
Total deposits 210,974 209,143 207,851 205,355 205,199 1 3 209,334 205,783 2
Borrowings 45,070 41,650 46,082 43,479 40,314 8 12 44,264 37,332 19
Common equity 45,407 44,878 44,575 43,895 43,489 1 4 44,956 42,772 5
Total stockholders' equity 48,456 47,255 46,397 45,576 44,827 3 8 47,376 43,828 8
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics-Consolidated(1)
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
(Dollars in millions except as noted) (unaudited) 2015 2015 2015 2014 2014 2015 2014 2015 vs.
Q3 Q2 Q1 Q4 Q3 Q2 Q3 2015 2014 2014
--- --- --- --- --- --- --- ---- ---- ----
Performance Metrics
-------------------
Net interest income growth (quarter over quarter) 5% (1)% (2)% 4% 4% ** ** 5% (4)% **
Non-interest income growth (quarter over quarter) - 6 (7) 1 (1) ** ** 1 5 **
Total net revenue growth (quarter over quarter) 4 - (3) 3 3 ** ** 5 (2) **
Total net revenue margin(8) 8.34 8.20 8.11 8.50 8.39 14 bps (5) bps 8.22 8.29 (7) bps
Net interest margin(9) 6.73 6.56 6.57 6.81 6.69 17 4 6.62 6.62 -
Return on average assets 1.43 1.11 1.47 1.28 1.51 32 (8) 1.33 1.56 (23)
Return on average tangible assets(10) 1.50 1.17 1.54 1.34 1.59 33 (9) 1.40 1.64 (24)
Return on average common equity(11) 9.54 7.30 9.84 8.61 10.12 224 (58) 8.89 10.58 (169)
Return on average tangible common equity(12) 14.33 11.06 15.00 13.28 15.73 327 (140) 13.46 16.66 (320)
Non-interest expense as a percentage of average loans held for investment 5.98 6.41 5.94 6.46 5.99 (43) (1) 6.11 6.05 6
Efficiency ratio(13) 53.56 58.30 53.99 56.49 52.93 (474) 63 55.26 53.99 127
Effective income tax rate for continuing operations 32.2 31.1 31.8 31.7 32.3 110 (10) 31.7 32.9 (120)
Employees (in thousands), period end 46.9 47.5 47.0 46.0 44.9 (1)% 4% 46.9 44.9 4%
Credit Quality Metrics(7)
------------------------
Allowance for loan and lease losses $4,847 $4,676 $4,405 $4,383 $4,212 4% 15% $4,847 $4,212 15%
Allowance as a percentage of loans held for investment 2.27% 2.23% 2.16% 2.10% 2.09% 4 bps 18 bps 2.27% 2.09% 18 bps
Allowance as a percentage of loans held for investment (excluding Acquired Loans) 2.49 2.46 2.41 2.36 2.37 3 12 2.49 2.37 12
Net charge-offs $890 $846 $881 $915 $756 5% 18% $2,617 $2,499 5%
Net charge-off rate(14) 1.69% 1.64% 1.72% 1.80% 1.52% 5 bps 17 bps 1.68% 1.70% (2) bps
Net charge-off rate (excluding Acquired Loans)(14) 1.86 1.83 1.93 2.04 1.73 3 13 1.87 1.96 (9)
30+ day performing delinquency rate 2.63 2.33 2.32 2.62 2.46 30 17 2.63 2.46 17
30+ day performing delinquency rate (excluding Acquired Loans) 2.90 2.59 2.61 2.95 2.81 31 9 2.90 2.81 9
30+ day delinquency rate 2.95 2.65 2.58 2.91 2.76 30 19 2.95 2.76 19
30+ day delinquency rate (excluding Acquired Loans) 3.25 2.94 2.90 3.28 3.14 31 11 3.25 3.14 11
Capital Ratios(15)
-----------------
Common equity Tier 1 capital ratio 12.1% 12.1% 12.5% 12.5% 12.7% - (60) bps 12.1% 12.7% (60) bps
Tier 1 risk-based capital ratio 13.4 13.3 13.2 13.2 13.3 10 bps 10 13.4 13.3 10
Total risk-based capital ratio 15.1 15.1 15.1 15.1 15.2 - (10) 15.1 15.2 (10)
Tier 1 leverage ratio 11.1 11.1 10.7 10.8 10.6 - 50 11.1 10.6 50
Tangible common equity ("TCE") ratio(16) 9.8 9.7 9.8 9.5 9.6 10 20 9.8 9.6 20
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
Three Months Ended 2015 Q3 vs. Nine Months Ended September 30,
------------------ ----------- -------------------------------
2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions, except per share data and as noted) (unaudited) Q3 Q2 Q3 Q2 Q3 2015 2014 2014
-------------------------------------------------------------------- --- --- --- --- --- ---- ---- ----
Interest income:
Loans, including loans held for sale $4,753 $4,531 $4,463 5% 6% $13,824 $13,049 6%
Investment securities 386 382 398 1 (3) 1,174 1,223 (4)
Other 25 24 26 4 (4) 77 80 (4)
Total interest income 5,164 4,937 4,887 5 6 15,075 14,352 5
----- ----- ----- ------ ------
Interest expense:
Deposits 271 272 271 - - 814 819 (1)
Securitized debt obligations 39 36 32 8 22 108 109 (1)
Senior and subordinated notes 82 80 71 3 15 241 226 7
Other borrowings 12 12 16 - (25) 39 36 8
Total interest expense 404 400 390 1 4 1,202 1,190 1
--- --- --- ----- -----
Net interest income 4,760 4,537 4,497 5 6 13,873 13,162 5
Provision for credit losses 1,092 1,129 993 (3) 10 3,156 2,432 30
Net interest income after provision for credit losses 3,668 3,408 3,504 8 5 10,717 10,730 -
----- ----- ----- ------ ------
Non-interest income:
Service charges and other customer-related fees 423 429 471 (1) (10) 1,289 1,405 (8)
Interchange fees, net 555 567 523 (2) 6 1,618 1,498 8
Net other-than-temporary impairment recognized in earnings (5) (7) (9) (29) (44) (27) (15) 80
Other 167 146 157 14 6 466 427 9
Total non-interest income 1,140 1,135 1,142 - - 3,346 3,315 1
----- ----- ----- ----- -----
Non-interest expense:
Salaries and associate benefits 1,189 1,360 1,128 (13) 5 3,760 3,414 10
Occupancy and equipment 444 439 419 1 6 1,318 1,271 4
Marketing 418 387 392 8 7 1,180 1,052 12
Professional services 313 334 304 (6) 3 943 887 6
Communications and data processing 226 208 196 9 15 636 595 7
Amortization of intangibles 106 111 130 (5) (18) 327 409 (20)
Other 464 468 416 (1) 12 1,352 1,268 7
--- --- --- ----- -----
Total non-interest expense 3,160 3,307 2,985 (4) 6 9,516 8,896 7
----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,648 1,236 1,661 33 (1) 4,547 5,149 (12)
Income tax provision 530 384 536 38 (1) 1,443 1,696 (15)
--- --- --- ----- -----
Income from continuing operations, net of tax 1,118 852 1,125 31 (1) 3,104 3,453 (10)
(Loss) income from discontinued operations, net of tax(3) (4) 11 (44) ** (91) 26 (24) **
--- --- --- --- ---
Net income 1,114 863 1,081 29 3 3,130 3,429 (9)
Dividends and undistributed earnings allocated to participating securities(4) (6) (4) (5) 50 20 (16) (14) 14
Preferred stock dividends(4) (29) (29) (20) - 45 (90) (46) 96
Net income available to common stockholders $1,079 $830 $1,056 30 2 $3,024 $3,369 (10)
====== ==== ====== ====== ======
Three Months Ended 2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions, except per share data and as noted) (unaudited) Q3 Q2 Q3 Q2 Q3 2015 2014 2014
-------------------------------------------------------------------- --- --- --- --- --- ---- ---- ----
Basic earnings per common share:(4)
Net income from continuing operations $2.01 $1.50 $1.97 34% 2% $5.49 $5.99 (8)%
(Loss) income from discontinued operations (0.01) 0.02 (0.08) ** (88) 0.05 (0.04) **
Net income per basic common share $2.00 $1.52 $1.89 32 6 $5.54 $5.95 (7)
===== ===== ===== ===== =====
Diluted earnings per common share:(4)
Net income from continuing operations $1.99 $1.48 $1.94 34 3 $5.43 $5.90 (8)
(Loss) income from discontinued operations (0.01) 0.02 (0.08) ** (88) 0.05 (0.04) **
Net income per diluted common share(5) $1.98 $1.50 $1.86 32 6 $5.48 $5.86 (6)
===== ===== ===== ===== =====
Weighted average common shares outstanding (in millions):
Basic common shares 540.6 545.6 559.9 (1) (3) 545.5 566.1 (4)
Diluted common shares 546.3 552.0 567.9 (1) (4) 551.9 575.2 (4)
Dividends paid per common share $0.40 $0.40 $0.30 - 33 $1.10 $0.90 22
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets(1)
September 30, 2015 vs.
----------------------
(Dollars in millions) (unaudited) September 30, 2015 December 31, September 30, 2014 December 31, September 30,
2014 2014
2014
--- ----
Assets:
Cash and cash equivalents:
Cash and due from banks $2,701 $3,147 $2,652 (14)% 2%
Interest-bearing deposits with banks 3,952 4,095 3,212 (3) 23
Federal funds sold and securities purchased under
agreements to resell 184 0 284 ** (35)
--- --- ---
Total cash and cash equivalents 6,837 7,242 6,148 (6) 11
Restricted cash for securitization investors 586 234 405 150 45
Securities available for sale, at fair value 39,431 39,508 39,665 - (1)
Securities held to maturity, at carrying value 23,711 22,500 22,182 5 7
Loans held for investment:(7)
Unsecuritized loans held for investment 179,748 171,771 165,021 5 9
Restricted loans for securitization investors 33,581 36,545 36,571 (8) (8)
------ ------ ------
Total loans held for investment 213,329 208,316 201,592 2 6
Allowance for loan and lease losses (4,847) (4,383) (4,212) 11 15
------ ------ ------
Net loans held for investment 208,482 203,933 197,380 2 6
Loans held for sale, at lower of cost or fair value 566 626 427 (10) 33
Premises and equipment, net 3,629 3,685 3,752 (2) (3)
Interest receivable 1,101 1,079 1,043 2 6
Goodwill 13,983 13,978 13,970 - -
Other assets 15,374 15,382 14,668 - 5
------ ------ ------
Total assets $313,700 $308,167 $299,640 2 5
======== ======== ========
September 30, 2015 vs.
----------------------
(Dollars in millions) (unaudited) September 30, 2015 December 31, September 30, 2014 December 31, September 30,
2014 2014
2014
--- ----
Liabilities:
Interest payable $198 $254 $191 (22)% 4%
Deposits:
Non-interest bearing deposits 25,055 25,081 25,388 - (1)
Interest-bearing deposits 187,848 180,467 178,876 4 5
------- ------- -------
Total deposits 212,903 205,548 204,264 4 4
Securitized debt obligations 15,656 11,624 10,508 35 49
Other debt:
Federal funds purchased and securities loaned or sold
under agreements to repurchase 1,021 880 2,330 16 (56)
Senior and subordinated notes 21,773 18,684 18,534 17 17
Other borrowings 4,328 17,269 10,871 (75) (60)
----- ------ ------
Total other debt 27,122 36,833 31,735 (26) (15)
Other liabilities 10,136 8,855 8,924 14 14
------ ----- -----
Total liabilities 266,015 263,114 255,622 1 4
------- ------- -------
Stockholders' equity:
Preferred stock 0 0 0 - -
Common stock 6 6 6 - -
Additional paid-in capital, net 29,594 27,869 27,272 6 9
Retained earnings 26,407 23,973 23,162 10 14
Accumulated other comprehensive income ("AOCI") (142) (430) (559) (67) (75)
Treasury stock, at cost (8,180) (6,365) (5,863) 29 40
------ ------ ------
Total stockholders' equity 47,685 45,053 44,018 6 8
------ ------ ------
Total liabilities and stockholders' equity $313,700 $308,167 $299,640 2 5
======== ======== ========
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial Summary, Selected
Metrics and Consolidated Financial Statements
(Tables 1-4)
** Not meaningful.
(1) As of January 1, 2015, we changed
our accounting principle from a
gross basis of presentation to a
net basis, for presenting
qualifying derivative assets and
liabilities, as well as the
related right to reclaim cash
collateral or obligation to return
cash collateral. Prior period
results, excluding regulatory
ratios, have been recast to
conform to this presentation.
(2) Total net revenue was reduced by
$195 million in Q3 2015, $168
million in Q2 2015, $147 million
in Q1 2015, $165 million in Q4
2014 and $164 million in Q3 2014
for the estimated uncollectible
amount of billed finance charges
and fees.
(3) Mortgage representation and
warranty reserve is comprised of
the following:
2015 2015 2015 2014 2014
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3
-------------------------------- --- --- --- --- ---
(Benefit) provision for mortgage representation and
warranty losses before income taxes:
Recorded in continuing operations $(7) $(9) $1 $(11) $ -
Recorded in discontinued operations 3 (27) (19) (41) 70
Total (benefit) provision for mortgage representation and
warranty losses before income taxes $(4) $(36) $(18) $(52) $70
=== ==== ==== ==== ===
Historically, the majority of the
(benefit) provision for
representation and warranty losses
is included net of tax in
discontinued operations. The
mortgage representation and
warranty reserve was $632 million
as of September 30, 2015, $731
million as of December 31, 2014
and $1.1 billion as of September
30, 2014.
(4) Dividends and undistributed
earnings allocated to
participating securities, earnings
per share, and preferred stock
dividends are computed
independently for each period.
Accordingly, the sum of each
quarter may not agree to the year-
to-date total.
(5) We recorded a build in the U.K.
Payment Protection Insurance
customer refund reserve ("U.K. PPI
Reserve") of $69 million in Q3
2015 and $78 million in Q2 2015.
In Q2 2015, we also recorded
restructuring charges of $147
million under our existing benefit
plans as a result of the
realignment of our workforce. We
report the following non-GAAP
financial measures that we believe
are helpful for investors to
understand the effect of these
items on our reported results as
they provide an additional
presentation of our performance.
The table below presents a
reconciliation of our reported
results to these non-GAAP
financial measures:
2015 Q3 2015 Q2 Nine Months Ended September 30, 2015
------- ------- ------------------------------------
(Dollars in millions, except per share data) (unaudited) Pre-Tax Income Net Income Diluted EPS Pre-Tax
Income Net Income Diluted EPS Pre-Tax Income Net Income Diluted EPS
-------------------------------------------------------- -------------- ---------- ----------- ------- ---------- ----------- -------------- ---------- -----------
Reported results $1,648 $1,114 $1.98 $1,236 $863 $1.50 $4,547 $3,130 $5.48
Adjustment 69 69 0.12 225 155 0.28 294 224 0.41
Adjusted results $1,717 $1,183 $2.10 $1,461 $1,018 $1.78 $4,841 $3,354 $5.89
====== ====== ===== ====== ====== ===== ====== ====== =====
(6) Tangible book
value per
common share
is a non-
GAAP measure
calculated
based on
tangible
common
equity
divided by
common
shares
outstanding.
See "Table
14:
Reconciliation
of Non-GAAP
Measures and
Calculation
of
Regulatory
Capital
Measures"
for
additional
information
on tangible
common
equity.
(7) Loans held for investment includes
Acquired Loans. We use the term
"Acquired Loans" to refer to a
certain portion of the loans
acquired in the following
transactions: (i) the February
2012 transaction where we
acquired the assets and assumed
the liabilities of substantially
all of ING Direct; (ii) the
February 2009 Chevy Chase Bank
acquisition; and (iii) the May
2012 transaction in which we
acquired substantially all of
HSBC's credit card and private-
label credit card business in the
United States. These loans were
recorded at fair value at
acquisition and subsequently
accounted for based on estimated
cash flows expected to be
collected over the life of the
loans (under the accounting
standard formerly known as "SOP
03-3", or Accounting Standard
Codification 310-30). The table
below presents amounts related to
Acquired Loans accounted for
under SOP 03-3:
2015 2015 2015 2014 2014
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3
-------------------------------- --- --- --- --- ---
Acquired Loans accounted for under SOP 03-3:
Period-end unpaid principal balance $20,585 $21,841 $23,248 $24,473 $25,726
Period-end loans held for investment 19,743 20,970 22,334 23,500 24,685
Average loans held for investment 20,116 21,440 22,773 23,907 25,104
(8) Calculated
based on
annualized
total net
revenue for
the period
divided by
average
interest-
earning
assets for
the period.
(9) Calculated based on annualized net
interest income for the period
divided by average interest-
earning assets for the period.
(10) Calculated based on annualized
income from continuing
operations, net of tax, for the
period divided by average
tangible assets for the period.
Return on average tangible assets
is a non-GAAP measure. See
"Table 14: Reconciliation of Non-
GAAP Measures and Calculation of
Regulatory Capital Measures" for
additional information.
(11) Calculated based on the annualized
sum of (i) income from continuing
operations, net of tax; (ii) less
dividends and undistributed
earnings allocated to
participating securities; (iii)
less preferred stock dividends,
for the period, divided by
average common equity for the
period. Our calculation of return
on average common equity may not
be comparable to similarly titled
measures reported by other
companies.
(12) Calculated based on the annualized
sum of (i) income from continuing
operations, net of tax; (ii) less
dividends and undistributed
earnings allocated to
participating securities; (iii)
less preferred stock dividends,
for the period, divided by
average tangible common equity
for the period. Return on average
tangible common equity is a non-
GAAP measure and our calculation
may not be comparable to
similarly titled measures
reported by other companies. See
"Table 14: Reconciliation of Non-
GAAP Measures and Calculation of
Regulatory Capital Measures" for
additional information.
(13) Calculated based on total non-
interest expense for the period
divided by total net revenue for
the period. The efficiency ratio,
excluding the build in the U.K.
PPI Reserve and restructuring
charges discussed above in
Footnote 5, was 52.78% for Q3
2015, 54.63% for Q2 2015 and
53.79% for the nine months ended
September 30, 2015.
(14) Calculated based on annualized net
charge-offs for the period
divided by average loans held for
investment for the period.
(15) Ratios as of the end of Q3 2015
are preliminary and therefore
subject to change. See "Table 14:
Reconciliation of Non-GAAP
Measures and Calculation of
Regulatory Capital Measures" for
information on the calculation of
each of these ratios.
(16) TCE ratio is a non-GAAP measure
calculated based on TCE divided
by tangible assets. See "Table
14: Reconciliation of Non-GAAP
Measures and Calculation of
Regulatory Capital Measures" for
additional information.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
2015 Q3 2015 Q2 2014 Q3
------- ------- -------
Average Balance Interest Income/ Yield/ Average Interest Income/ Yield/ Average Interest Income/ Yield/
Expense(1) Rate(1) Balance Expense(1) Rate(1) Balance Expense(1) Rate(1)
--------- ------ ------- --------- ------ ------- --------- ------
(Dollars in millions) (unaudited)
--------------------------------
Interest-earning assets:
Loans, including loans held for sale $212,076 $4,753 8.96% $207,335 $4,531 8.74% $200,066 $4,463 8.92%
Investment securities 63,541 386 2.43 63,771 382 2.40 62,582 398 2.54
Cash equivalents and other 7,465 25 1.34 5,479 24 1.75 6,242 26 1.67
Total interest-earning assets $283,082 $5,164 7.30 $276,585 $4,937 7.14 $268,890 $4,887 7.27
-------- ------ -------- ------ -------- ------
Interest-bearing liabilities:
Interest-bearing deposits $185,800 $271 0.58 $183,946 $272 0.59 $179,928 $271 0.60
Securitized debt obligations 14,881 39 1.05 13,219 36 1.09 10,110 32 1.27
Senior and subordinated notes 20,806 82 1.58 20,336 80 1.57 17,267 71 1.64
Other borrowings and liabilities 10,114 12 0.47 8,857 12 0.54 12,937 16 0.49
------ -----
Total interest-bearing liabilities $231,601 $404 0.70 $226,358 $400 0.71 $220,242 $390 0.71
-------- ---- ---- -------- ---- ---- -------- ---- ----
Net interest income/spread $4,760 6.60 $4,537 6.43 $4,497 6.56
====== ====== ======
Impact of non-interest bearing funding 0.13 0.13 0.13
---- ----
Net interest margin 6.73% 6.56% 6.69%
==== ==== ====
Nine Months Ended September 30,
-------------------------------
2015 2014
---- ----
Average Balance Interest Income/ Yield/Rate(1) Average Balance Interest Income/
Expense(1) Expense(1) Yield/Rate(1)
--------------- ---------------- ------------- --------------- ---------------- -------------
(Dollars in millions) (unaudited)
--------------------------------
Interest-earning assets:
Loans, including loans held for sale $208,444 $13,824 8.84% $196,492 $13,049 8.85%
Investment securities 63,500 1,174 2.47 62,411 1,223 2.61
Cash equivalents and other 7,444 77 1.38 6,162 80 1.73
Total interest-earning assets $279,388 $15,075 7.19 $265,065 $14,352 7.22
-------- ------- -------- -------
Interest-bearing liabilities:
Interest-bearing deposits $184,258 $814 0.59 $181,587 $819 0.60
Securitized debt obligations 13,233 108 1.09 10,419 109 1.39
Senior and subordinated notes 20,580 241 1.56 15,822 226 1.90
Other borrowings and liabilities 11,214 39 0.46 11,091 36 0.43
------
Total interest-bearing liabilities $229,285 $1,202 0.70 $218,919 $1,190 0.72
-------- ------ ---- -------- ------ ----
Net interest income/spread $13,873 6.49 $13,162 6.50
======= =======
Impact of non-interest bearing funding 0.13 0.12
----
Net interest margin 6.62% 6.62%
==== ====
__________
(1) Interest income and interest
expense and the calculation
of average yields on
interest-earning assets and
average rates on interest-
bearing liabilities include
the impact of hedge
accounting.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
(Dollars in millions) (unaudited) 2015 2015 2015 2014 2014 2015 2014 2015 2014 2015 vs.
Q3 Q2 Q1 Q4 Q3 Q2 Q3
2014
--- ----
Loans Held For Investment (Period End)
-------------------------------------
Credit card:
Domestic credit card $82,178 $78,984 $74,131 $77,704 $73,143 4% 12% $82,178 $73,143 12%
International credit card 7,957 8,219 7,623 8,172 7,488 (3) 6 7,957 7,488 6
----- ----- ----- ----- ----- ----- -----
Total credit card 90,135 87,203 81,754 85,876 80,631 3 12 90,135 80,631 12
------ ------ ------ ------ ------ ------ ------
Consumer banking:
Auto 41,052 39,991 38,937 37,824 36,254 3 13 41,052 36,254 13
Home loan 26,340 27,595 28,905 30,035 31,203 (5) (16) 26,340 31,203 (16)
Retail banking 3,598 3,590 3,537 3,580 3,604 - - 3,598 3,604 -
----- ----- ----- ----- ----- ----- -----
Total consumer banking 70,990 71,176 71,379 71,439 71,061 - - 70,990 71,061 -
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 23,585 22,886 22,831 23,137 22,895 3 3 23,585 22,895 3
Commercial and industrial 27,873 27,660 27,172 26,972 26,071 1 7 27,873 26,071 7
------ ------ ------ ------ ------ ------ ------
Total commercial lending 51,458 50,546 50,003 50,109 48,966 2 5 51,458 48,966 5
Small-ticket commercial real estate 654 685 738 781 822 (5) (20) 654 822 (20)
--- --- --- --- --- --- ---
Total commercial banking 52,112 51,231 50,741 50,890 49,788 2 5 52,112 49,788 5
------ ------ ------ ------ ------ ------ ------
Other loans 92 95 104 111 112 (3) (18) 92 112 (18)
Total loans held for investment $213,329 $209,705 $203,978 $208,316 $201,592 2 6 $213,329 $201,592 6
======== ======== ======== ======== ======== ======== ========
Loans Held For Investment (Average)
----------------------------------
Credit card:
Domestic credit card $80,402 $75,924 $74,770 $74,026 $71,784 6% 12% $77,053 $70,331 10%
International credit card 8,048 7,977 7,811 7,714 7,710 1 4 7,946 7,674 4
----- ----- ----- ----- ----- ----- -----
Total credit card 88,450 83,901 82,581 81,740 79,494 5 11 84,999 78,005 9
------ ------ ------ ------ ------ ------ ------
Consumer banking:
Auto 40,560 39,546 38,387 37,072 35,584 3 14 39,505 33,993 16
Home loan 26,934 28,251 29,493 30,604 31,859 (5) (15) 28,217 33,258 (15)
Retail banking 3,603 3,570 3,561 3,578 3,605 1 - 3,578 3,616 (1)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 71,097 71,367 71,441 71,254 71,048 - - 71,300 70,867 1
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 23,305 22,853 23,120 23,129 22,409 2 4 23,092 21,623 7
Commercial and industrial 27,620 27,414 27,190 26,409 25,512 1 8 27,411 24,562 12
------ ------ ------ ------ ------ ------ ------
Total commercial lending 50,925 50,267 50,310 49,538 47,921 1 6 50,503 46,185 9
Small-ticket commercial real estate 667 709 760 801 845 (6) (21) 712 891 (20)
--- --- --- --- --- --- ---
Total commercial banking 51,592 50,976 51,070 50,339 48,766 1 6 51,215 47,076 9
------ ------ ------ ------ ------ ------ ------
Other loans 88 93 102 103 114 (5) (23) 94 120 (22)
Total average loans held for investment $211,227 $206,337 $205,194 $203,436 $199,422 2 6 $207,608 $196,068 6
======== ======== ======== ======== ======== ======== ========
Net Charge-Off Rates
--------------------
Credit card:
Domestic credit card 3.08% 3.42% 3.55% 3.39% 2.83% (34) bps 25 bps 3.35% 3.45% (10) bps
International credit card 1.80 2.65 2.80 3.34 3.32 (85) (152) 2.41 3.81 (140)
Total credit card 2.96 3.35 3.48 3.38 2.88 (39) 8 3.26 3.48 (22)
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
(Dollars in millions) (unaudited) 2015 2015 2015 2014 2014 2015 2014 2015 2014 2015 vs.
Q2 Q1 Q4 Q3 2014
Q3 Q2 Q3
--- --- --- ---
Consumer banking:
Auto 1.85% 1.22% 1.55% 2.14% 1.98% 63 bps (13) bps 1.54% 1.65% (11) bps
Home loan 0.01 0.04 0.03 0.07 0.02 (3) (1) 0.03 0.05 (2)
Retail banking 1.53 1.39 0.96 1.28 1.36 14 17 1.30 1.00 30
Total consumer banking 1.14 0.76 0.89 1.20 1.07 38 7 0.93 0.87 6
Commercial banking:
Commercial and multifamily real estate (0.15) (0.04) (0.03) 0.01 (0.10) (11) (5) (0.07) (0.03) (4)
Commercial and industrial 0.61 0.13 0.05 0.10 (0.01) 48 ** 0.26 0.02 24
Total commercial lending 0.26 0.05 0.01 0.06 (0.05) 21 ** 0.11 - 11
Small-ticket commercial real estate 0.50 0.15 0.47 0.80 (0.01) 35 ** 0.37 0.44 (7)
Total commercial banking 0.26 0.05 0.02 0.07 (0.05) 21 ** 0.11 - 11
Other loans (5.50) (0.79) 1.56 0.47 (0.61) ** ** (1.40) 0.33 **
Total net charge-offs 1.69 1.64 1.72 1.80 1.52 5 17 1.68 1.70 (2)
---------------------
30+ Day Performing Delinquency Rates
------------------------------------
Credit card:
Domestic credit card 3.28% 2.84% 2.92% 3.27% 3.21% 44 bps 7 bps 3.28% 3.21% 7 bps
International credit card 2.81 2.65 2.81 2.94 3.34 16 (53) 2.81 3.34 (53)
Total credit card 3.24 2.82 2.91 3.24 3.22 42 2 3.24 3.22 2
Consumer banking:
Auto 6.10 5.58 5.21 6.57 6.14 52 (4) 6.10 6.14 (4)
Home loan 0.18 0.17 0.18 0.21 0.14 1 4 0.18 0.14 4
Retail banking 0.62 0.66 0.60 0.64 0.53 (4) 9 0.62 0.53 9
Total consumer banking 3.62 3.24 2.95 3.60 3.22 38 40 3.62 3.22 40
----------------------
Nonperforming Loans and Nonperforming Assets Rates(1)(2)
-------------------------------------------------------
Credit card:
International credit card 0.77% 0.83% 0.84% 0.86% 0.98% (6) bps (21) bps 0.77% 0.98% (21) bps
Total credit card 0.07 0.08 0.08 0.08 0.09 (1) (2) 0.07 0.09 (2)
Consumer banking:
Auto 0.49 0.40 0.31 0.52 0.49 9 - 0.49 0.49 -
Home loan 1.18 1.13 1.16 1.10 1.04 5 14 1.18 1.04 14
Retail banking 0.74 0.79 0.71 0.61 0.54 (5) 20 0.74 0.54 20
Total consumer banking 0.76 0.70 0.67 0.77 0.73 6 3 0.76 0.73 3
Commercial banking:
Commercial and multifamily real estate 0.03 0.12 0.18 0.27 0.26 (9) (23) 0.03 0.26 (23)
Commercial and industrial 1.58 1.56 0.39 0.39 0.37 2 121 1.58 0.37 121
Total commercial lending 0.87 0.91 0.29 0.33 0.32 (4) 55 0.87 0.32 55
Small-ticket commercial real estate 0.65 0.47 1.62 0.96 0.42 18 23 0.65 0.42 23
Total commercial banking 0.87 0.90 0.31 0.34 0.32 (3) 55 0.87 0.32 55
Other loans 12.10 10.68 13.33 13.37 14.66 142 (256) 12.10 14.66 (256)
Total nonperforming loans 0.50 0.50 0.35 0.39 0.38 - 12 0.50 0.38 12
Total nonperforming assets 0.64 0.64 0.50 0.54 0.53 - 11 0.64 0.53 11
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary-Business Segment Results
Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015
------------------------------------- ------------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial Other Total Credit Consumer Commercial
Banking Banking Banking Banking Other
Card Card
--- ---- ----
Net interest income (expense) $4,760 $2,866 $1,443 $454 $(3) $13,873 $8,165 $4,321 $1,381 $6
Non-interest income 1,140 858 174 108 - 3,346 2,519 528 345 (46)
--- --- --- --- ----- ----- --- --- ---
Total net revenue (loss)(3) 5,900 3,724 1,617 562 (3) 17,219 10,684 4,849 1,726 (40)
Provision (benefit) for credit losses 1,092 831 188 75 (2) 3,156 2,395 579 184 (2)
Non-interest expense 3,160 1,848 1,001 272 39 9,516 5,481 2,969 814 252
----- ----- --- --- ----- ----- ----- --- ---
Income (loss) from continuing operations before income taxes 1,648 1,045 428 215 (40) 4,547 2,808 1,301 728 (290)
Income tax provision (benefit) 530 375 155 78 (78) 1,443 1,007 471 264 (299)
Income from continuing operations, net of tax $1,118 $670 $273 $137 $38 $3,104 $1,801 $830 $464 $9
====== ==== ==== ==== === ====== ====== ==== ==== ===
Three Months Ended June 30, 2015
--------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial
Banking Banking Other
Card
--- ----
Net interest income (expense) $4,537 $2,633 $1,444 $466 $(6)
Non-interest income 1,135 845 196 123 (29)
--- --- --- ---
Total net revenue (loss)(3) 5,672 3,478 1,640 589 (35)
Provision for credit losses 1,129 895 185 49 -
Non-interest expense 3,307 1,857 998 270 182
----- ----- --- --- ---
Income (loss) from continuing operations before income taxes 1,236 726 457 270 (217)
Income tax provision (benefit) 384 263 166 98 (143)
---
Income (loss) from continuing operations, net of tax $852 $463 $291 $172 $(74)
==== ==== ==== ==== ====
Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014
------------------------------------- ------------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial Other Total Credit Consumer Commercial
Banking Banking Banking Banking Other
Card Card
--- ---- ----
Net interest income (expense) $4,497 $2,627 $1,425 $439 $6 $13,162 $7,613 $4,289 $1,296 $(36)
Non-interest income 1,142 846 179 122 (5) 3,315 2,470 499 318 28
----- --- --- --- --- ----- ----- --- --- ---
Total net revenue (loss)(3) 5,639 3,473 1,604 561 1 16,477 10,083 4,788 1,614 (8)
Provision (benefit) for credit losses 993 787 198 9 (1) 2,432 1,894 481 61 (4)
Non-interest expense 2,985 1,730 956 268 31 8,896 5,175 2,824 790 107
----- --- --- --- ----- ----- --- ---
Income (loss) from continuing operations before income taxes 1,661 956 450 284 (29) 5,149 3,014 1,483 763 (111)
Income tax provision (benefit) 536 332 161 102 (59) 1,696 1,054 530 273 (161)
--- -----
Income from continuing operations, net of tax $1,125 $624 $289 $182 $30 $3,453 $1,960 $953 $490 $50
====== ==== ==== ==== === ====== ====== ==== ==== ===
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary-Credit Card Business
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
2015 2015 2015 2014 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2015 2014 2014
-------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Credit Card(4)
-------------
Earnings:
Net interest income $2,866 $2,633 $2,666 $2,697 $2,627 9% 9% $8,165 $7,613 7%
Non-interest income 858 845 816 841 846 2 1 2,519 2,470 2
--- --- --- --- --- ----- -----
Total net revenue 3,724 3,478 3,482 3,538 3,473 7 7 10,684 10,083 6
Provision for credit losses 831 895 669 856 787 (7) 6 2,395 1,894 26
Non-interest expense 1,848 1,857 1,776 1,888 1,730 - 7 5,481 5,175 6
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,045 726 1,037 794 956 44 9 2,808 3,014 (7)
Income tax provision 375 263 369 275 332 43 13 1,007 1,054 (4)
-----
Income from continuing operations, net of tax $670 $463 $668 $519 $624 45 7 $1,801 $1,960 (8)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $90,135 $87,203 $81,754 $85,876 $80,631 3% 12% $90,135 $80,631 12%
Average loans held for investment 88,450 83,901 82,581 81,740 79,494 5 11 84,999 78,005 9
Average yield on loans held for investment(5) 14.39% 13.98% 14.30% 14.61% 14.65% 41 bps (26) bps 14.22% 14.44% (22) bps
Total net revenue margin(6) 16.84 16.58 16.87 17.31 17.48 26 (64) 16.76 17.24 (48)
Net charge-off rate 2.96 3.35 3.48 3.38 2.88 (39) 8 3.26 3.48 (22)
30+ day performing delinquency rate 3.24 2.82 2.91 3.24 3.22 42 2 3.24 3.22 2
30+ day delinquency rate 3.29 2.88 2.97 3.30 3.29 41 - 3.29 3.29 -
Nonperforming loan rate(1) 0.07 0.08 0.08 0.08 0.09 (1) (2) 0.07 0.09 (2)
Card loan premium amortization and other intangible accretion(7) $5 $7 $11 $11 $18 (29)% (72)% $23 $86 (73)%
PCCR intangible amortization 78 80 84 87 90 (3) (13) 242 282 (14)
Purchase volume(8) 69,875 68,559 57,383 63,484 57,474 2 22 195,817 161,266 21
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
2015 2015 2015 2014 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2015 2014 2014
-------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Domestic Card
-------------
Earnings:
Net interest income $2,613 $2,395 $2,421 $2,432 $2,361 9% 11% $7,429 $6,809 9%
Non-interest income 814 796 743 768 763 2 7 2,353 2,233 5
--- --- --- --- --- ----- -----
Total net revenue 3,427 3,191 3,164 3,200 3,124 7 10 9,782 9,042 8
Provision for credit losses 796 853 610 765 738 (7) 8 2,259 1,728 31
Non-interest expense 1,630 1,621 1,580 1,676 1,530 1 7 4,831 4,588 5
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,001 717 974 759 856 40 17 2,692 2,726 (1)
Income tax provision 362 259 353 272 306 40 18 974 974 -
---
Income from continuing operations, net of tax $639 $458 $621 $487 $550 40 16 $1,718 $1,752 (2)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $82,178 $78,984 $74,131 $77,704 $73,143 4% 12% $82,178 $73,143 12%
Average loans held for investment 80,402 75,924 74,770 74,026 71,784 6 12 77,053 70,331 10
Average yield on loans held for investment(5) 14.35% 13.95% 14.23% 14.43% 14.46% 40 bps (11) bps 14.17% 14.20% (3) bps
Total net revenue margin(6) 17.05 16.81 16.93 17.29 17.41 24 (36) 16.93 17.14 (21)
Net charge-off rate 3.08 3.42 3.55 3.39 2.83 (34) 25 3.35 3.45 (10)
30+ day performing delinquency rate 3.28 2.84 2.92 3.27 3.21 44 7 3.28 3.21 7
30+ day delinquency rate 3.28 2.84 2.92 3.27 3.21 44 7 3.28 3.21 7
Purchase volume(8) $63,777 $62,198 $52,025 $58,234 $53,690 3% 19% $178,000 $150,482 18%
International Card(4)
--------------------
Earnings:
Net interest income $253 $238 $245 $265 $266 6% (5)% $736 $804 (8)%
Non-interest income 44 49 73 73 83 (10) (47) 166 237 (30)
--- --- --- --- --- --- ---
Total net revenue 297 287 318 338 349 3 (15) 902 1,041 (13)
Provision for credit losses 35 42 59 91 49 (17) (29) 136 166 (18)
Non-interest expense 218 236 196 212 200 (8) 9 650 587 11
--- --- --- --- --- --- ---
Income from continuing operations before income taxes 44 9 63 35 100 ** (56) 116 288 (60)
Income tax provision 13 4 16 3 26 ** (50) 33 80 (59)
--- --- ---
Income from continuing operations, net of tax $31 $5 $47 $32 $74 ** (58) $83 $208 (60)
=== === === === === === ====
Selected performance metrics:
Period-end loans held for investment $7,957 $8,219 $7,623 $8,172 $7,488 (3)% 6% $7,957 $7,488 6%
Average loans held for investment 8,048 7,977 7,811 7,714 7,710 1 4 7,946 7,674 4
Average yield on loans held for investment(5) 14.88% 14.29% 14.93% 16.31% 16.42% 59 bps (154) bps 14.70% 16.60% (190) bps
Total net revenue margin(6) 14.77 14.36 16.31 17.55 18.13 41 (336) 15.14 18.09 (295)
Net charge-off rate 1.80 2.65 2.80 3.34 3.32 (85) (152) 2.41 3.81 (140)
30+ day performing delinquency rate 2.81 2.65 2.81 2.94 3.34 16 (53) 2.81 3.34 (53)
30+ day delinquency rate 3.39 3.29 3.44 3.60 4.08 10 (69) 3.39 4.08 (69)
Nonperforming loan rate(1) 0.77 0.83 0.84 0.86 0.98 (6) (21) 0.77 0.98 (21)
Purchase volume(8) $6,098 $6,361 $5,358 $5,250 $3,784 (4)% 61% $17,817 $10,784 65%
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary-Consumer Banking Business
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
2015 2015 2015 2014 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2015 2014 2014
-------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Consumer Banking
----------------
Earnings:
Net interest income $1,443 $1,444 $1,434 $1,459 $1,425 - 1% $4,321 $4,289 1%
Non-interest income 174 196 158 185 179 (11)% (3) 528 499 6
--- --- --- --- --- --- ---
Total net revenue 1,617 1,640 1,592 1,644 1,604 (1) 1 4,849 4,788 1
Provision for credit losses 188 185 206 222 198 2 (5) 579 481 20
Non-interest expense 1,001 998 970 1,045 956 - 5 2,969 2,824 5
----- --- --- ----- --- ----- -----
Income from continuing operations before income taxes 428 457 416 377 450 (6) (5) 1,301 1,483 (12)
Income tax provision 155 166 150 135 161 (7) (4) 471 530 (11)
--- --- --- --- --- --- ---
Income from continuing operations, net of tax $273 $291 $266 $242 $289 (6) (6) $830 $953 (13)
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $70,990 $71,176 $71,379 $71,439 $71,061 - - $70,990 $71,061 -
Average loans held for investment 71,097 71,367 71,441 71,254 71,048 - - 71,300 70,867 1%
Average yield on loans held for investment(5) 6.25% 6.27% 6.26% 6.45% 6.18% (2) bps 7 bps 6.26% 6.19% 7 bps
Auto loan originations $5,590 $5,433 $5,185 $5,390 $5,410 3% 3% $16,208 $15,513 4%
Period-end deposits 170,866 170,321 172,502 168,078 167,624 - 2 170,866 167,624 2
Average deposits 170,816 171,076 169,593 167,727 168,407 - 1 170,500 168,925 1
Average deposit interest rate 0.56% 0.57% 0.57% 0.57% 0.58% (1) bps (2) bps 0.57% 0.58% (1) bps
Core deposit intangible amortization $19 $21 $22 $24 $26 (10)% (27)% $62 $84 (26)%
Net charge-off rate 1.14% 0.76% 0.89% 1.20% 1.07% 38 bps 7 bps 0.93% 0.87% 6 bps
30+ day performing delinquency rate 3.62 3.24 2.95 3.60 3.22 38 40 3.62 3.22 40
30+ day delinquency rate 4.22 3.80 3.46 4.23 3.82 42 40 4.22 3.82 40
Nonperforming loan rate(1) 0.76 0.70 0.67 0.77 0.73 6 3 0.76 0.73 3
Nonperforming asset rate(2) 1.05 0.98 0.95 1.06 1.01 7 4 1.05 1.01 4
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary-Commercial Banking Business
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
2015 2015 2015 2014 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2015 2014 2014
-------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Commercial Banking
------------------
Earnings:
Net interest income $454 $466 $461 $455 $439 (3)% 3% $1,381 $1,296 7%
Non-interest income 108 123 114 132 122 (12) (11) 345 318 8
--- --- --- --- --- --- ---
Total net revenue(3) 562 589 575 587 561 (5) - 1,726 1,614 7
Provision for credit losses 75 49 60 32 9 53 733 184 61 202
Non-interest expense 272 270 272 293 268 1 1 814 790 3
--- --- --- --- ---
Income from continuing operations before income taxes 215 270 243 262 284 (20) (24) 728 763 (5)
Income tax provision 78 98 88 93 102 (20) (24) 264 273 (3)
Income from continuing operations, net of tax $137 $172 $155 $169 $182 (20) (25) $464 $490 (5)
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $52,112 $51,231 $50,741 $50,890 $49,788 2% 5% $52,112 $49,788 5%
Average loans held for investment 51,592 50,976 51,070 50,339 48,766 1 6 51,215 47,076 9
Average yield on loans held for investment(3)(5) 3.21% 3.26% 3.22% 3.33% 3.39% (5) bps (18) bps 3.23% 3.45% (22) bps
Period-end deposits $32,751 $32,909 $32,575 $31,954 $31,918 - 3% $32,751 $31,918 3%
Average deposits 32,806 32,778 32,845 32,363 31,772 - 3 32,809 31,546 4
Average deposit interest rate 0.25% 0.25% 0.24% 0.24% 0.24% - 1 bps 0.25% 0.24% 1 bps
Core deposit intangible amortization $3 $4 $4 $5 $5 (25)% (40)% $11 $16 (31)%
Net charge-off (recovery) rate 0.26% 0.05% 0.02% 0.07% (0.05)% 21 bps 31 bps 0.11% 0.00% 11 bps
Nonperforming loan rate(1) 0.87 0.90 0.31 0.34 0.32 (3) 55 0.87 0.32 55
Nonperforming asset rate(2) 0.87 0.91 0.31 0.36 0.35 (4) 52 0.87 0.35 52
Risk category:(9)
Noncriticized $49,934 $49,001 $48,938 $49,284 $48,408 2% 3% $49,934 $48,408 3%
Criticized performing 1,725 1,767 1,645 1,431 1,219 (2) 42 1,725 1,219 42
Criticized nonperforming 453 463 158 175 161 (2) 181 453 161 181
--- --- --- --- --- --- ---
Total commercial loans $52,112 $51,231 $50,741 $50,890 $49,788 2 5 $52,112 $49,788 5
======= ======= ======= ======= ======= ======= =======
Risk category as a percentage of period-end commercial loans held
for investment:
Noncriticized 95.8% 95.7% 96.5% 96.9% 97.3% 10 bps (150) bps 95.8% 97.3% (150) bps
Criticized performing 3.3 3.4 3.2 2.8 2.4 (10) 90 3.3 2.4 90
Criticized nonperforming 0.9 0.9 0.3 0.3 0.3 - 60 0.9 0.3 60
--- --- --- --- --- --- ---
Total commercial loans 100.0% 100.0% 100.0% 100.0% 100.0% - - 100.0% 100.0% -
===== ===== ===== ===== ===== ===== =====
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary-Other and Total
2015 Q3 vs. Nine Months Ended September 30,
----------- -------------------------------
2015 2015 2015 2014 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2015 2014 2014
--- --- --- --- --- --- --- ---- ---- ----
Other
-----
Earnings:
Net interest (expense) income $(3) $(6) $15 $45 $6 (50)% ** $6 $(36) **
Non-interest income - (29) (17) (1) (5) ** ** (46) 28 **
--- --- --- --- --- --- ---
Total net (loss) revenue(3) (3) (35) (2) 44 1 (91) ** (40) (8) **
Benefit for credit losses (2) - - (1) (1) ** 100% (2) (4) (50)%
Non-interest expense(10) 39 182 31 58 31 (79) 26 252 107 136
--- --- --- --- --- --- ---
Loss from continuing operations before income taxes (40) (217) (33) (13) (29) (82) 38 (290) (111) 161
Income tax benefit (78) (143) (78) (53) (59) (45) 32 (299) (161) 86
--- ---- --- --- --- ---- ----
Income (loss) from continuing operations, net of tax $38 $(74) $45 $40 $30 ** 27 $9 $50 (82)
=== ==== === === === === ===
Selected performance metrics:
Period-end loans held for investment $92 $95 $104 $111 $112 (3)% (18)% $92 $112 (18)%
Average loans held for investment 88 93 102 103 114 (5) (23) 94 120 (22)
Period-end deposits 9,286 5,550 5,363 5,516 4,722 67 97 9,286 4,722 97
Average deposits 7,352 5,289 5,413 5,265 5,020 39 46 6,025 5,312 13
Total
-----
Earnings:
Net interest income $4,760 $4,537 $4,576 $4,656 $4,497 5% 6% $13,873 $13,162 5%
Non-interest income 1,140 1,135 1,071 1,157 1,142 - - 3,346 3,315 1
----- ----- ----- ----- ----- ----- -----
Total net revenue 5,900 5,672 5,647 5,813 5,639 4 5 17,219 16,477 5
Provision for credit losses 1,092 1,129 935 1,109 993 (3) 10 3,156 2,432 30
Non-interest expense 3,160 3,307 3,049 3,284 2,985 (4) 6 9,516 8,896 7
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,648 1,236 1,663 1,420 1,661 33 (1) 4,547 5,149 (12)
Income tax provision 530 384 529 450 536 38 (1) 1,443 1,696 (15)
--- --- --- --- --- ----- -----
Income from continuing operations, net of tax $1,118 $852 $1,134 $970 $1,125 31 (1) $3,104 $3,453 (10)
====== ==== ====== ==== ====== ====== ======
Selected performance metrics:
Period-end loans held for investment $213,329 $209,705 $203,978 $208,316 $201,592 2% 6% $213,329 $201,592 6%
Average loans held for investment 211,227 206,337 205,194 203,436 199,422 2 6 207,608 196,068 6
Period-end deposits 212,903 208,780 210,440 205,548 204,264 2 4 212,903 204,264 4
Average deposits 210,974 209,143 207,851 205,355 205,199 1 3 209,334 205,783 2
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Notes to Loan and Business Segments
Disclosures (Tables 7-12)
** Not meaningful.
(1) The nonperforming loan rates are
calculated based on nonperforming
loans for each category divided by
period-end total loans held for
investment.
(2) Nonperforming assets consist of
nonperforming loans, real estate owned
("REO") and other foreclosed assets.
The nonperforming asset rates are
calculated based on nonperforming
assets for each category divided by
the combined period-end total of
loans held for investment, REO and
other foreclosed assets for each
respective category. Calculation of
nonperforming assets rates for our
Consumer Banking and Commercial
Banking businesses are adjusted to
exclude the impact of acquired REO.
(3) Some of our tax-related commercial
investments generate tax-exempt
income or tax credits. Accordingly, we
make certain reclassifications within
our Commercial Banking business
results to present revenues and yields
on a taxable-equivalent basis,
calculated assuming an effective tax
rate approximately equal to our
federal statutory tax rate of 35% with
offsetting reclassifications within
the Other category.
(4) Includes a build in our U.K. PPI
Reserve in Q3 2015 and Q2 2015, which
impacted both revenue and non-
interest expense within our
International Card business.
(5) Calculated based on annualized interest
income for the period divided by
average loans held for investment
during the period for the specified
loan category. Annualized interest
income excludes various allocations
including funds transfer pricing that
assigns certain balance sheet assets,
deposits and other liabilities and
their related revenue and expenses
attributable to each business segment.
(6) Calculated based on annualized total
net revenue for the period divided by
average loans held for investment
during the period for the specified
loan category.
(7) Represents the net reduction in
interest income attributable to non-
SOP 03-3 card loan premium
amortization and other intangible
accretion associated with the May 2012
transaction in which we acquired
substantially all of HSBC's credit
card and private-label credit card
business in the United States.
Includes credit card purchase
transactions, net of returns for loans
classified as held for investment and
held for sale. Excludes cash advance
(8) and balance transfer transactions.
(9) Criticized exposures correspond to the
"Special Mention," "Substandard" and
"Doubtful" asset categories defined by
bank regulatory authorities.
(10) Includes restructuring charges for
employee severance and related
benefits.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures(1)
Basel III Standardized
----------------------
(Dollars in millions) (unaudited) September 30, June 30, March 31, December 31, September 30,
2015 2015 2014 2014
2015
--- ----
Regulatory Capital Metrics
--------------------------
Common equity Tier 1 capital $30,109 $29,804 $29,671 $29,534 $29,116
Tier 1 capital 33,402 32,614 31,493 31,355 30,451
Total risk-based capital(2) 37,696 37,115 35,878 35,879 34,860
Risk-weighted assets(3) 249,250 246,106 238,011 236,944 228,759
Average assets for the leverage ratio 300,010 293,291 295,556 291,243 286,070
-------------------------------------
Capital Ratios
--------------
Common equity Tier 1 capital ratio(4) 12.1% 12.1% 12.5% 12.5% 12.7%
Tier 1 risk-based capital ratio(5) 13.4 13.3 13.2 13.2 13.3
Total risk-based capital ratio(6) 15.1 15.1 15.1 15.1 15.2
Tier 1 leverage ratio(7) 11.1 11.1 10.7 10.8 10.6
Tangible common equity ("TCE") ratio(8) 9.8 9.7 9.8 9.5 9.6
Reconciliation of Non-GAAP Measures
We report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and tangible assets. The tables below provide the details of the calculation of our non-GAAP capital measures and regulatory capital. While our non-GAAP capital
measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
2015 2015 2015 2014 2014
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3
--- --- --- --- ---
Tangible Common Equity (Period End)
----------------------------------
Stockholders' equity $47,685 $46,659 $45,730 $45,053 $44,018
Goodwill and intangible assets(9) (15,153) (15,240) (15,307) (15,383) (15,472)
Noncumulative perpetual preferred stock(10) (3,294) (2,810) (1,822) (1,822) (1,336)
------ ------
Tangible common equity $29,238 $28,609 $28,601 $27,848 $27,210
======= ======= ======= ======= =======
Tangible Common Equity (Average)
-------------------------------
Average stockholders' equity $48,456 $47,255 $46,397 $45,576 $44,827
Average goodwill and intangible assets(9) (15,183) (15,256) (15,339) (15,437) (15,525)
Average noncumulative perpetual preferred stock(10) (3,049) (2,377) (1,822) (1,681) (1,338)
Average tangible common equity $30,224 $29,622 $29,236 $28,458 $27,964
======= ======= ======= ======= =======
2015 2015 2015 2014 2014
(Dollars in millions) (unaudited) Q3 Q2 Q1 Q4 Q3
-------------------------------- --- --- --- --- ---
Tangible Assets (Period End)
---------------------------
Total assets(11) $313,700 $310,510 $306,224 $308,167 $299,640
Goodwill and intangible assets(9) (15,153) (15,240) (15,307) (15,383) (15,472)
-------
Tangible assets(11) $298,547 $295,270 $290,917 $292,784 $284,168
======== ======== ======== ======== ========
Tangible Assets (Average)
------------------------
Average total assets(11) $313,822 $307,206 $309,401 $304,153 $298,913
Average goodwill and intangible assets(9) (15,183) (15,256) (15,339) (15,437) (15,525)
-------
Average tangible assets(11) $298,639 $291,950 $294,062 $288,716 $283,388
======== ======== ======== ======== ========
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
(Dollars in millions) (unaudited) September 30, June 30, March 31, December 31, September 30,
2015 2015 2015 2014 2014
--- ---- ---- ---- ---- ----
Common equity excluding AOCI $44,533 $44,246 $44,120 $43,661 $43,241
Adjustments:
AOCI(12)(13) 75 (128) (26) (69) (146)
Goodwill(9) (13,805) (13,809) (13,801) (13,805) (13,801)
Intangible assets(9)(13) (374) (413) (450) (243) (266)
Other (320) (92) (172) (10) 88
Common equity Tier 1 capital $30,109 $29,804 $29,671 $29,534 $29,116
======= ======= ======= ======= =======
Risk-weighted assets(3) $249,250 $246,106 $238,011 $236,944 $228,759
Common equity Tier 1 capital ratio(4) 12.1% 12.1% 12.5% 12.5% 12.7%
(1) Regulatory capital metrics and
capital ratios as of the end of
Q3 2015 are preliminary and
therefore subject to change.
(2) Total risk-based capital equals
the sum of Tier 1 capital and
Tier 2 capital.
(3) As of January 1, 2015, risk-
weighted assets are calculated
under the Basel III Standardized
Approach, subject to transition
provisions. Prior to January 1,
2015 risk-weighted assets were
calculated under Basel I.
(4) Common equity Tier 1 capital
ratio is a regulatory measure
calculated based on Common
equity Tier 1 capital divided by
risk-weighted assets.
(5) Tier 1 risk-based capital ratio
is a regulatory capital measure
calculated based on Tier 1
capital divided by risk-
weighted assets.
(6) Total risk-based capital ratio
is a regulatory capital measure
calculated based on Total risk-
based capital divided by risk-
weighted assets.
(7) Tier 1 leverage ratio is a
regulatory capital measure
calculated based on Tier 1
capital divided by average
assets, after certain
adjustments.
(8) TCE ratio is a non-GAAP measure
calculated based on TCE divided
by tangible assets.
(9) Includes impact of related
deferred taxes.
(10) Includes related surplus.
(11) As of January 1, 2015, we changed
our accounting principle from a
gross basis of presentation to a
net basis, for presenting
qualifying derivative assets and
liabilities, as well as the
related right to reclaim cash
collateral or obligation to
return cash collateral. Prior
period results, excluding
regulatory ratios, have been
recast to conform to this
presentation.
(12) Amounts presented are net of tax.
(13) Amounts based on transition
provisions for regulatory
capital deductions and
adjustments of 20% for 2014 and
40% for 2015.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/capital-one-reports-third-quarter-2015-net-income-of-11-billion-or-198-per-share-300165000.html
SOURCE Capital One Financial Corporation
