CAPITAL ONE FINANCIAL CORPORATION MCLEAN, Va., April 26, 2016 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2016 of $1.0 billion, or $1.84 per diluted common share, compared to the fourth quarter of 2015 with net income of $920 million, or $1.58 per diluted common share, and the first quarter of 2015 with net income of $1.2 billion, or $2.00 per diluted common share.
"First quarter 2016 was another quarter of strong growth in our Domestic Card business, both in loan balances and purchase volumes, which drove strong growth in revenue," said Richard D. Fairbank, Chair and Chief Executive Officer. "We continue to be in a strong position to deliver attractive shareholder returns, driven by growth and sustainable returns at the higher end of banks, as well as significant capital distribution, subject to regulatory approval."
All comparisons below are for the first quarter of 2016 compared with the fourth quarter of 2015 unless otherwise noted.
First Quarter 2016 Income Statement Summary:
-- Total net revenue remained flat at $6.2 billion.
-- Total non-interest expense decreased 7 percent to $3.2 billion.
-- 24 percent decrease in marketing.
-- 4 percent decrease in operating expenses.
-- Pre-provision earnings increased 10 percent to $3.0 billion.
-- Provision for credit losses increased 11 percent to $1.5 billion
-- Net charge-offs of $1.2 billion.
-- $286 million allowance build.
-- Net interest margin of 6.75 percent, down 4 basis points.
-- Efficiency ratio of 51.82 percent.
First Quarter 2016 Balance Sheet Summary:
-- Common equity Tier 1 capital ratio under Basel III Standardized Approach
of 11.1 percent at March 31, 2016.
-- Period-end loans held for investment in the quarter decreased $2.2
billion, or 1 percent, to $227.6 billion.
-- Domestic Card period-end loans decreased $3.4 billion, or 4 percent,
to $84.6 billion.
-- Consumer Banking period-end loans increased $219 million, or less
than 1 percent, to $70.6 billion.
-- Auto period-end loans increased $1.2 billion, or 3 percent, to
$42.7 billion.
-- Home loans period-end loans decreased $884 million, or 4
percent, to $24.3 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking period-end loans increased $975 million, or 2
percent, to $64.2 billion.
-- Average loans held for investment in the quarter increased $6.7 billion,
or 3 percent, to $226.7 billion.
-- Domestic Card average loans increased $1.4 billion, or 2 percent, to
$85.1 billion.
-- Consumer Banking average loans decreased $408 million, or 1 percent,
to $70.3 billion:
-- Auto average loans increased $629 million, or 2 percent, to
$42.0 billion.
-- Home loans average loans decreased $995 million, or 4 percent,
to $24.8 billion, driven by planned run-off of acquired
portfolios.
-- Commercial Banking average loans increased $6.0 billion, or 10
percent, to $63.4 billion, including the acquired HFS loans.
-- Period-end total deposits increased $4.1 billion, or 2 percent, to
$221.8 billion, while average deposits increased $3.3 billion, or 2
percent, to $219.2 billion.
-- Interest-bearing deposits rate paid remained flat at 0.58 percent.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on April 26, 2016 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us," then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through May 10, 2016 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, 2015.
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 $221.8 billion in deposits and $330.3 billion in total assets as of March 31, 2016. 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
First Quarter 2016(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 March 31, 2016 once it is filed with the Securities and Exchange Commission.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary-Consolidated
2016 Q1 vs,
-----------
(Dollars in millions, except per share data and as noted) (unaudited) 2016 2015 2015 2015 2015 2015 2015
Q1 Q4 Q3 Q2 Q1 Q4 Q1
--- --- --- --- --- --- ---
Income Statement
----------------
Net interest income $5,056 $4,961 $4,760 $4,537 $4,576 2% 10%
Non-interest income 1,164 1,233 1,140 1,135 1,071 (6) 9
----- ----- -----
Total net revenue(1) 6,220 6,194 5,900 5,672 5,647 - 10
Provision for credit losses 1,527 1,380 1,092 1,129 935 11 63
Non-interest expense:
Marketing 428 564 418 387 375 (24) 14
Amortization of intangibles 101 103 106 111 110 (2) (8)
Operating expenses 2,694 2,813 2,636 2,809 2,564 (4) 5
----- ----- ----- ----- -----
Total non-interest expense 3,223 3,480 3,160 3,307 3,049 (7) 6
----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,470 1,334 1,648 1,236 1,663 10 (12)
Income tax provision 452 426 530 384 529 6 (15)
--- --- --- --- ---
Income from continuing operations, net of tax 1,018 908 1,118 852 1,134 12 (10)
Income (loss) from discontinued operations, net of tax(2) (5) 12 (4) 11 19 ** **
--- --- --- --- ---
Net income 1,013 920 1,114 863 1,153 10 (12)
Dividends and undistributed earnings allocated to participating securities(3) (6) (4) (6) (4) (6) 50 -
Preferred stock dividends(3) (37) (68) (29) (29) (32) (46) 16
Net income available to common stockholders $970 $848 $1,079 $830 $1,115 14 (13)
==== ==== ====== ==== ======
Common Share Statistics
-----------------------
Basic earnings per common share:(3)
Net income from continuing operations $1.86 $1.58 $2.01 $1.50 $2.00 18% (7)%
Income (loss) from discontinued operations (0.01) 0.02 (0.01) 0.02 0.03 ** **
Net income per basic common share $1.85 $1.60 $2.00 $1.52 $2.03 16 (9)
===== ===== ===== ===== =====
Diluted earnings per common share:(3)
Net income from continuing operations $1.85 $1.56 $1.99 $1.48 $1.97 19 (6)
Income (loss) from discontinued operations (0.01) 0.02 (0.01) 0.02 0.03 ** **
Net income per diluted common share(4) $1.84 $1.58 $1.98 $1.50 $2.00 16 (8)
===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic 523.5 530.8 540.6 545.6 550.2 (1) (5)
Diluted 528.0 536.3 546.3 552.0 557.2 (2) (5)
Common shares outstanding (period end, in millions) 514.5 527.3 534.9 542.5 548.0 (2) (6)
Dividends paid per common share $0.40 $0.40 $0.40 $0.40 $0.30 - 33
Tangible book value per common share (period end)(5) 55.94 53.65 54.66 52.74 52.19 4 7
2016 Q1 vs.
-----------
(Dollars in millions) (unaudited) 2016 2015 2015 2015 2015 2015 2015
--------------------------------
Q1 Q4 Q3 Q2 Q1 Q4 Q1
--- --- --- --- --- --- ---
Balance Sheet (Period End)
-------------------------
Loans held for investment(6) $227,613 $229,851 $213,329 $209,705 $203,978 (1)% 12%
Interest-earning assets 298,348 302,007 283,073 280,137 275,837 (1) 8
Total assets 330,346 334,048 313,700 310,510 306,224 (1) 8
Interest-bearing deposits 196,597 191,874 187,848 183,657 185,208 2 6
Total deposits 221,779 217,721 212,903 208,780 210,440 2 5
Borrowings 50,497 59,115 42,778 45,766 41,029 (15) 23
Common equity 44,411 43,990 44,391 43,849 43,908 1 1
Total stockholders' equity 47,707 47,284 47,685 46,659 45,730 1 4
--------------------------
Balance Sheet (Average Balances)
-------------------------------
Loans held for investment(6) $226,736 $220,052 $211,227 $206,337 $205,194 3% 10%
Interest-earning assets 299,456 292,054 283,082 276,585 278,427 3 8
Total assets 331,919 323,354 313,822 307,206 309,401 3 7
Interest-bearing deposits 194,125 189,885 185,800 183,946 182,998 2 6
Total deposits 219,180 215,899 210,974 209,143 207,851 2 5
Borrowings 53,761 48,850 45,070 41,650 46,082 10 17
Common equity 45,782 45,418 45,407 44,878 44,575 1 3
Total stockholders' equity 49,078 48,712 48,456 47,255 46,397 1 6
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics-Consolidated
2016 Q1 vs.
-----------
(Dollars in millions except as noted) (unaudited) 2016 2015 2015 2015 2015 2015 2015
Q1 Q4 Q3 Q2 Q1 Q4 Q1
--- --- --- --- --- --- ---
Performance Metrics
-------------------
Net interest income growth (period over period) 2% 4% 5% (1)% (2)% ** **
Non-interest income growth (period over period) (6) 8 - 6 (7) ** **
Total net revenue growth (period over period) - 5 4 - (3) ** **
Total net revenue margin(7) 8.31 8.48 8.34 8.20 8.11 (17) bps 20 bps
Net interest margin(8) 6.75 6.79 6.73 6.56 6.57 (4) 18
Return on average assets 1.23 1.12 1.43 1.11 1.47 11 (24)
Return on average tangible assets(9) 1.29 1.18 1.50 1.17 1.54 11 (25)
Return on average common equity(10) 8.52 7.36 9.54 7.30 9.84 116 (132)
Return on average tangible common equity(11) 12.94 11.11 14.33 11.06 15.00 183 (206)
Non-interest expense as a percentage of average loans held for investment 5.69 6.33 5.98 6.41 5.94 (64) (25)
Efficiency ratio(12) 51.82 56.18 53.56 58.30 53.99 (436) (217)
Effective income tax rate for continuing operations 30.7 31.9 32.2 31.1 31.8 (120) (110)
Employees (in thousands), period end 45.8 45.4 46.9 47.5 47.0 1% (3)%
Credit Quality Metrics(6)
------------------------
Allowance for loan and lease losses $5,416 $5,130 $4,847 $4,676 $4,405 6% 23%
Allowance as a percentage of loans held for investment 2.38% 2.23% 2.27% 2.23% 2.16% 15 bps 22 bps
Net charge-offs $1,178 $1,078 $890 $846 $881 9% 34%
Net charge-off rate(13) 2.08% 1.96% 1.69% 1.64% 1.72% 12 bps 36 bps
30+ day performing delinquency rate 2.33 2.69 2.63 2.33 2.32 (36) 1
30+ day delinquency rate 2.64 3.00 2.95 2.65 2.58 (36) 6
Capital Ratios(14)
-----------------
Common equity Tier 1 capital ratio 11.1% 11.1% 12.1% 12.1% 12.5% - (140) bps
Tier 1 capital ratio 12.4 12.4 13.4 13.3 13.2 - (80)
Total capital ratio 14.6 14.6 15.1 15.1 15.1 - (50)
Tier 1 leverage ratio 10.2 10.6 11.1 11.1 10.7 (40) bps (50)
Tangible common equity ("TCE") ratio(15) 9.1 8.9 9.8 9.7 9.8 20 (70)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
Three Months Ended 2016 Q1 vs.
------------------ -----------
2016 2015 2015 2015 2015
(Dollars in millions, except per share data and as noted) (unaudited) Q1 Q4 Q1 Q4 Q1
-------------------------------------------------------------------- --- --- --- --- ---
Interest income:
Loans, including loans held for sale $5,085 $4,961 $4,540 2% 12%
Investment securities 415 401 406 3 2
Other 17 22 28 (23) (39)
Total interest income 5,517 5,384 4,974 2 11
----- ----- -----
Interest expense:
Deposits 283 277 271 2 4
Securitized debt obligations 48 43 33 12 45
Senior and subordinated notes 106 89 79 19 34
Other borrowings 24 14 15 71 60
Total interest expense 461 423 398 9 16
--- --- ---
Net interest income 5,056 4,961 4,576 2 10
Provision for credit losses 1,527 1,380 935 11 63
Net interest income after provision for credit losses 3,529 3,581 3,641 (1) (3)
----- ----- -----
Non-interest income:
Service charges and other customer-related fees 404 426 437 (5) (8)
Interchange fees, net 596 617 496 (3) 20
Net other-than-temporary impairment recognized in earnings (8) (3) (15) 167 (47)
Other 172 193 153 (11) 12
Total non-interest income 1,164 1,233 1,071 (6) 9
----- ----- -----
Non-interest expense:
Salaries and associate benefits 1,270 1,215 1,211 5 5
Occupancy and equipment 458 511 435 (10) 5
Marketing 428 564 375 (24) 14
Professional services 278 349 296 (20) (6)
Communications and data processing 243 247 202 (2) 20
Amortization of intangibles 101 103 110 (2) (8)
Other 445 491 420 (9) 6
--- --- ---
Total non-interest expense 3,223 3,480 3,049 (7) 6
----- ----- -----
Income from continuing operations before income taxes 1,470 1,334 1,663 10 (12)
Income tax provision 452 426 529 6 (15)
--- --- ---
Income from continuing operations, net of tax 1,018 908 1,134 12 (10)
Income (loss) from discontinued operations, net of tax(2) (5) 12 19 ** **
--- --- ---
Net income 1,013 920 1,153 10 (12)
Dividends and undistributed earnings allocated to participating securities(3) (6) (4) (6) 50 -
Preferred stock dividends(3) (37) (68) (32) (46) 16
Net income available to common stockholders $970 $848 $1,115 14 (13)
==== ==== ======
Three Months Ended 2016 Q1 vs.
-----------
2016 2015 2015 2015 2015
(Dollars in millions, except per share data and as noted) (unaudited) Q1 Q4 Q1 Q4 Q1
-------------------------------------------------------------------- --- --- --- --- ---
Basic earnings per common share:(3)
Net income from continuing operations $1.86 $1.58 $2.00 18% (7)%
Income (loss) from discontinued operations (0.01) 0.02 0.03 ** **
Net income per basic common share $1.85 $1.60 $2.03 16 (9)
===== ===== =====
Diluted earnings per common share:(3)
Net income from continuing operations $1.85 $1.56 $1.97 19 (6)
Income (loss) from discontinued operations (0.01) 0.02 0.03 ** **
Net income per diluted common share(4) $1.84 $1.58 $2.00 16 (8)
===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic common shares 523.5 530.8 550.2 (1) (5)
Diluted common shares 528.0 536.3 557.2 (2) (5)
Dividends paid per common share $0.40 $0.40 $0.30 - 33
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets
March 31, 2016 vs.
------------------
(Dollars in millions) (unaudited) March 31, December 31, March 31, December 31, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Assets:
Cash and cash equivalents:
Cash and due from banks $3,241 $3,407 $2,853 (5)% 14%
Interest-bearing deposits with banks 1,909 4,577 6,038 (58) (68)
Federal funds sold and securities purchased under agreements to resell 85 39 0 118 **
--- --- ---
Total cash and cash equivalents 5,235 8,023 8,891 (35) (41)
Restricted cash for securitization investors 960 1,017 234 (6) **
Securities available for sale, at fair value 40,092 39,061 39,321 3 2
Securities held to maturity, at carrying value 25,080 24,619 23,241 2 8
Loans held for investment:(6)
Unsecuritized loans held for investment 195,705 196,068 170,040 - 15
Loans held in consolidated trusts 31,908 33,783 33,938 (6) (6)
------ ------ ------
Total loans held for investment 227,613 229,851 203,978 (1) 12
Allowance for loan and lease losses (5,416) (5,130) (4,405) 6 23
------ ------ ------
Net loans held for investment 222,197 224,721 199,573 (1) 11
Loans held for sale, at lower of cost or fair value 1,251 904 1,331 38 (6)
Premises and equipment, net 3,542 3,584 3,684 (1) (4)
Interest receivable 1,221 1,189 1,078 3 13
Goodwill 14,492 14,480 13,978 - 4
Other assets 16,276 16,450 14,893 (1) 9
------ ------ ------
Total assets $330,346 $334,048 $306,224 (1) 8
======== ======== ========
March 31, 2016 vs.
------------------
(Dollars in millions) (unaudited) March 31, December 31, March 31, December 31, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Liabilities:
Interest payable $217 $299 $195 (27)% 11%
Deposits:
Non-interest bearing deposits 25,182 25,847 25,232 (3) -
Interest-bearing deposits 196,597 191,874 185,208 2 6
------- ------- -------
Total deposits 221,779 217,721 210,440 2 5
Securitized debt obligations 14,913 16,166 12,717 (8) 17
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase 917 981 933 (7) (2)
Senior and subordinated notes 21,736 21,837 20,559 - 6
Other borrowings 12,931 20,131 6,820 (36) 90
------ ------ -----
Total other debt 35,584 42,949 28,312 (17) 26
Other liabilities 10,146 9,629 8,830 5 15
------ ----- -----
Total liabilities 282,639 286,764 260,494 (1) 9
------- ------- -------
Stockholders' equity:
Preferred stock 0 0 0 - -
Common stock 7 6 6 17 17
Additional paid-in capital, net 29,709 29,655 27,939 - 6
Retained earnings 27,808 27,045 24,925 3 12
Accumulated other comprehensive loss (41) (616) (212) (93) (81)
Treasury stock, at cost (9,776) (8,806) (6,928) 11 41
------ ------ ------
Total stockholders' equity 47,707 47,284 45,730 1 4
------ ------ ------
Total liabilities and stockholders' equity $330,346 $334,048 $306,224 (1) 8
======== ======== ========
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1-4)
** Not meaningful.
(1) Total net revenue was reduced by $228 million in Q1 2016, $222 million in Q4 2015, $195 million in Q3 2015, $168 million in Q2 2015 and $147 million in Q1 2015 for the estimated uncollectible amount of billed finance charges and fees.
(2) Historically, the majority of the provision (benefit) for representation and warranty losses is included net of tax in discontinued operations. The provision (benefit) for mortgage representation and warranty losses included the following activity:
2016 2015 2015 2015 2015
---- ---- ---- ---- ----
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1
-------------------------------- --- --- --- --- ---
Provision (benefit) for mortgage representation and warranty losses before income taxes:
Recorded in continuing operations $(1) $(1) $(7) $(9) $1
Recorded in discontinued operations 3 (21) 3 (27) (19)
Total provision (benefit) for mortgage representation and warranty losses before income taxes $2 $(22) $(4) $(36) $(18)
=== ==== === ==== ====
The mortgage representation and warranty reserve was $613 million as of March 31, 2016, $610 million as of December 31, 2015 and $673 million as of March 31, 2015.
(3) 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.
(4) In Q4 2015, we recorded charges totaling $72 million associated with (i) completing the acquisition of the Healthcare Financial Services business of General Electric Capital Corporation ("HFS acquisition") and establishing an initial allowance and reserve related to the loans acquired; (ii) certain planned site
closures; and (iii) revisions to the restructuring charges recorded in Q2 2015 to reflect updated information. 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 for severance and related benefits pursuant to our ongoing benefit programs, 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. The table below presents a reconciliation of our reported results to these non-GAAP financial measures. Periods not presented did not have any adjustments.
2015 Q4 2015 Q3 2015 Q2
------- ------- -------
(Dollars in millions, except per share data) (unaudited) Pre-Tax Net Diluted Pre-Tax Net Diluted Pre-Tax Net Diluted
Income Income EPS Income Income EPS Income Income EPS
--- ------ ------ --- ------ ------ --- ------ ------ ---
Reported results $1,334 $920 $1.58 $1,648 $1,114 $1.98 $1,236 $863 $1.50
Adjustments 72 46 0.09 69 69 0.12 225 155 0.28
Results excluding adjustments $1,406 $966 $1.67 $1,717 $1,183 $2.10 $1,461 $1,018 $1.78
====== ==== ===== ====== ====== ===== ====== ====== =====
(5) 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.
(6) Included in loans held for investment are purchased credit-impaired loans ("PCI loans") 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 Standards Codification 310-30). These include certain of our consumer and commercial loans that were acquired through business combinations. The table below presents amounts related to PCI loans:
2016 2015 2015 2015 2015
---- ---- ---- ---- ----
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1
-------------------------------- --- --- --- --- ---
PCI loans:
Period-end unpaid principal balance $19,492 $20,434 $20,585 $21,841 $23,248
Period-end loans held for investment 18,568 19,518 19,743 20,970 22,334
Average loans held for investment 18,894 19,319 20,116 21,440 22,773
(7) Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(8) Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(9) 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.
(10) 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.
(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 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.
(12) Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the adjustments discussed above in Footnote 4, was 55.82% for Q4 2015, 52.78% for Q3 2015 and 54.63% for Q2 2015.
(13) Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(14) Ratios as of the end of Q1 2016 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.
(15) 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
2016 Q1 2015 Q4 2015 Q1
------- ------- -------
Average Interest Yield/ Average Interest Yield/ Average Interest Yield/
Balance Income/ Rate(1) Balance Income/ Rate(1) Balance Income/ Rate(1)
Expense(1) Expense(1) Expense(1)
--------- --------- ---------
(Dollars in millions) (unaudited)
--------------------------------
Interest-earning assets:
Loans, including loans held for sale $227,573 $5,085 8.94% $220,760 $4,961 8.99% $205,854 $4,540 8.82%
Investment securities 65,156 415 2.55 64,444 401 2.49 63,181 406 2.57
Cash equivalents and other 6,727 17 1.01 6,850 22 1.28 9,392 28 1.19
Total interest-earning assets $299,456 $5,517 7.37 $292,054 $5,384 7.37 $278,427 $4,974 7.15
-------- ------ -------- ------ -------- ------
Interest-bearing liabilities:
Interest-bearing deposits $194,125 $283 0.58% $189,885 $277 0.58% $182,998 $271 0.59%
Securitized debt obligations 15,361 48 1.25 15,993 43 1.08 11,563 33 1.14
Senior and subordinated notes 21,993 106 1.93 21,987 89 1.62 20,595 79 1.53
Other borrowings and liabilities 17,176 24 0.56 11,542 14 0.49 14,721 15 0.41
------ ------
Total interest-bearing liabilities $248,655 $461 0.74 $239,407 $423 0.71 $229,877 $398 0.69
-------- ---- ---- -------- ---- ---- -------- ---- ----
Net interest income/spread $5,056 6.63 $4,961 6.66 $4,576 6.46
====== ====== ======
Impact of non-interest bearing funding 0.12 0.13 0.11
---- ----
Net interest margin 6.75% 6.79% 6.57%
==== ==== ====
__________
(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
2016 Q1 vs.
-----------
(Dollars in millions) (unaudited) 2016 2015 2015 2015 2015 2015 2015
Q1 Q4 Q3 Q2 Q1 Q4 Q1
--- --- --- --- --- --- --- ---
Loans Held For Investment (Period End)
-------------------------------------
Credit card:
Domestic credit card $84,561 $87,939 $82,178 $78,984 $74,131 (4)% 14%
International credit card 8,138 8,186 7,957 8,219 7,623 (1) 7
----- ----- ----- ----- -----
Total credit card 92,699 96,125 90,135 87,203 81,754 (4) 13
------ ------ ------ ------ ------
Consumer banking:
Auto 42,714 41,549 41,052 39,991 38,937 3 10
Home loan 24,343 25,227 26,340 27,595 28,905 (4) (16)
Retail banking 3,534 3,596 3,598 3,590 3,537 (2) -
----- ----- ----- ----- -----
Total consumer banking 70,591 70,372 70,990 71,176 71,379 - (1)
------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 25,559 25,518 23,585 22,886 22,831 - 12
Commercial and industrial 38,102 37,135 27,873 27,660 27,172 3 40
------ ------ ------ ------ ------
Total commercial lending 63,661 62,653 51,458 50,546 50,003 2 27
Small-ticket commercial real estate 580 613 654 685 738 (5) (21)
--- --- --- --- ---
Total commercial banking 64,241 63,266 52,112 51,231 50,741 2 27
------ ------ ------ ------ ------
Other loans 82 88 92 95 104 (7) (21)
Total loans held for investment $227,613 $229,851 $213,329 $209,705 $203,978 (1) 12
======== ======== ======== ======== ========
Loans Held For Investment (Average)
----------------------------------
Credit card:
Domestic credit card $85,148 $83,760 $80,402 $75,924 $74,770 2% 14%
International credit card 7,839 8,127 8,048 7,977 7,811 (4) -
----- ----- ----- ----- -----
Total credit card 92,987 91,887 88,450 83,901 82,581 1 13
------ ------ ------ ------ ------
Consumer banking:
Auto 41,962 41,333 40,560 39,546 38,387 2 9
Home loan 24,781 25,776 26,934 28,251 29,493 (4) (16)
Retail banking 3,553 3,595 3,603 3,570 3,561 (1) -
----- ----- ----- ----- -----
Total consumer banking 70,296 70,704 71,097 71,367 71,441 (1) (2)
------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 25,015 25,613 23,305 22,853 23,120 (2) 8
Commercial and industrial 37,762 31,132 27,620 27,414 27,190 21 39
------ ------ ------ ------ ------
Total commercial lending 62,777 56,745 50,925 50,267 50,310 11 25
Small-ticket commercial real estate 598 634 667 709 760 (6) (21)
--- --- --- --- ---
Total commercial banking 63,375 57,379 51,592 50,976 51,070 10 24
------ ------ ------ ------ ------
Other loans 78 82 88 93 102 (5) (24)
Total average loans held for investment $226,736 $220,052 $211,227 $206,337 $205,194 3 10
======== ======== ======== ======== ========
Net Charge-Off (Recovery) Rates
-------------------------------
Credit card:
Domestic credit card 4.16% 3.75% 3.08% 3.42% 3.55% 41 bps 61 bps
International credit card 3.24 2.76 1.80 2.65 2.80 48 44
Total credit card 4.09 3.66 2.96 3.35 3.48 43 61
2016 Q1 vs.
-----------
(Dollars in millions) (unaudited) 2016 2015 2015 2015 2015 2015 2015
Q1 Q4 Q3 Q2 Q1 Q4 Q1
--- --- --- --- --- --- --- ---
Consumer banking:
Auto 1.60% 2.10% 1.85% 1.22% 1.55% (50) bps 5 bps
Home loan 0.05 0.05 0.01 0.04 0.03 - 2
Retail banking 1.36 1.43 1.53 1.39 0.96 (7) 40
Total consumer banking 1.04 1.32 1.14 0.76 0.89 (28) 15
Commercial banking:
Commercial and multifamily real estate (0.01) (0.03) (0.15) (0.04) (0.03) 2 2
Commercial and industrial 0.49 0.07 0.61 0.13 0.05 42 44
Total commercial lending 0.29 0.02 0.26 0.05 0.01 27 28
Small-ticket commercial real estate 0.13 0.34 0.50 0.15 0.47 (21) (34)
Total commercial banking 0.29 0.03 0.26 0.05 0.02 26 27
Total net charge-offs 2.08 1.96 1.69 1.64 1.72 12 36
---------------------
30+ Day Performing Delinquency Rates
------------------------------------
Credit card:
Domestic credit card 3.09% 3.39% 3.28% 2.84% 2.92% (30) bps 17 bps
International credit card 3.32 2.98 2.81 2.65 2.81 34 51
Total credit card 3.11 3.36 3.24 2.82 2.91 (25) 20
Consumer banking:
Auto 5.14 6.69 6.10 5.58 5.21 (155) (7)
Home loan 0.14 0.16 0.18 0.17 0.18 (2) (4)
Retail banking 0.61 0.76 0.62 0.66 0.60 (15) 1
Total consumer banking 3.19 4.05 3.62 3.24 2.95 (86) 24
----------------------
Nonperforming Loans and Nonperforming Assets Rates(1)(2)
-------------------------------------------------------
Credit card:
International credit card 0.59% 0.65% 0.77% 0.83% 0.84% (6) bps (25) bps
Total credit card 0.05 0.06 0.07 0.08 0.08 (1) (3)
Consumer banking:
Auto 0.31 0.53 0.49 0.40 0.31 (22) -
Home loan 1.26 1.23 1.18 1.13 1.16 3 10
Retail banking 0.83 0.77 0.74 0.79 0.71 6 12
Total consumer banking 0.66 0.79 0.76 0.70 0.67 (13) (1)
Commercial banking:
Commercial and multifamily real estate 0.12 0.03 0.03 0.12 0.18 9 (6)
Commercial and industrial 2.66 1.45 1.58 1.56 0.39 121 227
Total commercial lending 1.64 0.87 0.87 0.91 0.29 77 135
Small-ticket commercial real estate 1.11 0.83 0.65 0.47 1.62 28 (51)
Total commercial banking 1.63 0.87 0.87 0.90 0.31 76 132
Total nonperforming loans 0.69 0.51 0.50 0.50 0.35 18 34
Total nonperforming assets 0.83 0.65 0.64 0.64 0.50 18 33
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary-Business Segment Results
Three Months Ended March 31, 2016
---------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial Other
Card Banking Banking
--- ---- ------- -------
Net interest income $5,056 $3,033 $1,420 $537 $66
Non-interest income 1,164 847 191 118 8
--- --- --- ---
Total net revenue (loss)(3) 6,220 3,880 1,611 655 74
Provision (benefit) for credit losses 1,527 1,071 230 228 (2)
Non-interest expense 3,223 1,863 990 322 48
----- --- --- ---
Income (loss) from continuing operations before income taxes 1,470 946 391 105 28
Income tax provision (benefit) 452 337 142 38 (65)
Income (loss) from continuing operations, net of tax $1,018 $609 $249 $67 $93
====== ==== ==== === ===
Three Months Ended December 31, 2015
------------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial Other
Card Banking Banking
--- ---- ------- -------
Net interest income $4,961 $2,996 $1,434 $484 $47
Non-interest income 1,233 902 182 142 7
--- --- --- ---
Total net revenue (loss)(3) 6,194 3,898 1,616 626 54
Provision (benefit) for credit losses 1,380 1,022 240 118 -
Non-interest expense 3,480 2,021 1,057 342 60
----- ----- ----- --- ---
Income (loss) from continuing operations before income taxes 1,334 855 319 166 (6)
Income tax provision (benefit) 426 302 115 60 (51)
---
Income (loss) from continuing operations, net of tax $908 $553 $204 $106 $45
==== ==== ==== ==== ===
Three Months Ended March 31, 2015
---------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial Other
Card Banking Banking
--- ---- ------- -------
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 (benefit) 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 (loss) from continuing operations, net of tax $1,134 $668 $266 $155 $45
====== ==== ==== ==== ===
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary-Credit Card Business
2016 Q1 vs.
-----------
2016 2015 2015 2015 2015 2015 2015
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1 Q4 Q1
-------------------------------- --- --- --- --- --- --- ---
Credit Card(4)
-------------
Earnings:
Net interest income $3,033 $2,996 $2,866 $2,633 $2,666 1% 14%
Non-interest income 847 902 858 845 816 (6) 4
--- --- --- --- ---
Total net revenue (loss) 3,880 3,898 3,724 3,478 3,482 - 11
Provision (benefit) for credit losses 1,071 1,022 831 895 669 5 60
Non-interest expense 1,863 2,021 1,848 1,857 1,776 (8) 5
----- ----- ----- ----- -----
Income (loss) from continuing operations before income taxes 946 855 1,045 726 1,037 11 (9)
Income tax provision (benefit) 337 302 375 263 369 12 (9)
Income (loss) from continuing operations, net of tax $609 $553 $670 $463 $668 10 (9)
==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $92,699 $96,125 $90,135 $87,203 $81,754 (4)% 13%
Average loans held for investment 92,987 91,887 88,450 83,901 82,581 1 13
Average yield on loans held for investment(5) 14.60% 14.45% 14.39% 13.98% 14.30% 15 bps 30 bps
Total net revenue margin(6) 16.69 16.97 16.84 16.58 16.87 (28) (18)
Net charge-off rate 4.09 3.66 2.96 3.35 3.48 43 61
30+ day performing delinquency rate 3.11 3.36 3.24 2.82 2.91 (25) 20
30+ day delinquency rate 3.15 3.40 3.29 2.88 2.97 (25) 18
Nonperforming loan rate(1) 0.05 0.06 0.07 0.08 0.08 (1) (3)
PCCR intangible amortization $70 $74 $78 $80 $84 (5)% (17)%
Purchase volume(7) 68,189 75,350 69,875 68,559 57,383 (10) 19
2016 Q1 vs.
-----------
2016 2015 2015 2015 2015 2015 2015
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1 Q4 Q1
-------------------------------- --- --- --- --- --- --- ---
Domestic Card
Earnings:
Net interest income $2,756 $2,718 $2,613 $2,395 $2,421 1% 14%
Non-interest income 774 830 814 796 743 (7) 4
Total net revenue (loss) 3,530 3,548 3,427 3,191 3,164 (1) 12
Provision (benefit) for credit losses 972 945 796 853 610 3 59
Non-interest expense 1,671 1,796 1,630 1,621 1,580 (7) 6
Income (loss) from continuing operations before income taxes 887 807 1,001 717 974 10 (9)
Income tax provision (benefit) 323 293 362 259 353 10 (8)
Income (loss) from continuing operations, net of tax $564 $514 $639 $458 $621 10 (9)
==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $84,561 $87,939 $82,178 $78,984 $74,131 (4)% 14%
Average loans held for investment 85,148 83,760 80,402 75,924 74,770 2 14
Average yield on loans held for investment(5) 14.43% 14.31% 14.35% 13.95% 14.23% 12 bps 20 bps
Total net revenue margin(6) 16.58 16.95 17.05 16.81 16.93 (37) (35)
Net charge-off rate 4.16 3.75 3.08 3.42 3.55 41 61
30+ day performing delinquency rate 3.09 3.39 3.28 2.84 2.92 (30) 17
30+ day delinquency rate 3.09 3.39 3.28 2.84 2.92 (30) 17
Purchase volume(7) $62,617 $68,740 $63,777 $62,198 $52,025 (9)% 20%
International Card(4)
Earnings:
Net interest income $277 $278 $253 $238 $245 - 13%
Non-interest income 73 72 44 49 73 1% -
Total net revenue (loss) 350 350 297 287 318 - 10
Provision (benefit) for credit losses 99 77 35 42 59 29 68
Non-interest expense 192 225 218 236 196 (15) (2)
--- --- --- --- ---
Income (loss) from continuing operations before income taxes 59 48 44 9 63 23 (6)
Income tax provision (benefit) 14 9 13 4 16 56 (13)
Income (loss) from continuing operations, net of tax $45 $39 $31 $5 $47 15 (4)
=== === === === ===
Selected performance metrics:
Period-end loans held for investment $8,138 $8,186 $7,957 $8,219 $7,623 (1)% 7%
Average loans held for investment 7,839 8,127 8,048 7,977 7,811 (4) -
Average yield on loans held for investment(5) 16.47% 15.96% 14.88% 14.29% 14.93% 51 bps 154 bps
Total net revenue margin(6) 17.85 17.21 14.77 14.36 16.31 64 154
Net charge-off rate 3.24 2.76 1.80 2.65 2.80 48 44
30+ day performing delinquency rate 3.32 2.98 2.81 2.65 2.81 34 51
30+ day delinquency rate 3.76 3.46 3.39 3.29 3.44 30 32
Nonperforming loan rate(1) 0.59 0.65 0.77 0.83 0.84 (6) (25)
Purchase volume(7) $5,572 $6,610 $6,098 $6,361 $5,358 (16)% 4%
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary-Consumer Banking Business
2016 Q1 vs.
-----------
2016 2015 2015 2015 2015 2015 2015
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1 Q4 Q1
-------------------------------- --- --- --- --- --- --- ---
Consumer Banking
----------------
Earnings:
Net interest income $1,420 $1,434 $1,443 $1,444 $1,434 (1)% (1)%
Non-interest income 191 182 174 196 158 5 21
--- --- --- --- ---
Total net revenue (loss) 1,611 1,616 1,617 1,640 1,592 - 1
Provision (benefit) for credit losses 230 240 188 185 206 (4) 12
Non-interest expense 990 1,057 1,001 998 970 (6) 2
--- ----- ----- --- ---
Income (loss) from continuing operations before income taxes 391 319 428 457 416 23 (6)
Income tax provision (benefit) 142 115 155 166 150 23 (5)
--- --- --- --- ---
Income (loss) from continuing operations, net of tax $249 $204 $273 $291 $266 22 (6)
==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $70,591 $70,372 $70,990 $71,176 $71,379 - (1)%
Average loans held for investment 70,296 70,704 71,097 71,367 71,441 (1)% (2)
Average yield on loans held for investment(5) 6.18% 6.25% 6.25% 6.27% 6.26% (7) bps (8) bps
Auto loan originations $5,844 $4,977 $5,590 $5,433 $5,185 17% 13%
Period-end deposits 177,803 172,702 170,866 170,321 172,502 3 3
Average deposits 174,254 171,521 170,816 171,076 169,593 2 3
Average deposit interest rate 0.54% 0.54% 0.56% 0.57% 0.57% - (3) bps
Core deposit intangible amortization $15 $17 $19 $21 $22 (12)% (32)%
Net charge-off rate 1.04% 1.32% 1.14% 0.76% 0.89% (28) bps 15 bps
30+ day performing delinquency rate 3.19 4.05 3.62 3.24 2.95 (86) 24
30+ day delinquency rate 3.67 4.67 4.22 3.80 3.46 (100) 21
Nonperforming loan rate(1) 0.66 0.79 0.76 0.70 0.67 (13) (1)
Nonperforming asset rate(2) 0.95 1.10 1.05 0.98 0.95 (15) -
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary-Commercial Banking Business
2016 Q1 vs.
-----------
2016 2015 2015 2015 2015 2015 2015
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1 Q4 Q1
-------------------------------- --- --- --- --- --- --- ---
Commercial Banking
------------------
Earnings:
Net interest income $537 $484 $454 $466 $461 11% 16%
Non-interest income 118 142 108 123 114 (17) 4
--- --- --- --- ---
Total net revenue (loss)(3) 655 626 562 589 575 5 14
Provision (benefit) for credit losses 228 118 75 49 60 93 280
Non-interest expense 322 342 272 270 272 (6) 18
--- --- --- --- ---
Income (loss) from continuing operations before income taxes 105 166 215 270 243 (37) (57)
Income tax provision (benefit) 38 60 78 98 88 (37) (57)
Income (loss) from continuing operations, net of tax $67 $106 $137 $172 $155 (37) (57)
=== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $64,241 $63,266 $52,112 $51,231 $50,741 2% 27%
Average loans held for investment 63,375 57,379 51,592 50,976 51,070 10 24
Average yield on loans held for investment(3)(5) 3.38% 3.18% 3.21% 3.26% 3.22% 20 bps 16 bps
Period-end deposits $33,383 $34,257 $32,751 $32,909 $32,575 (3)% 2%
Average deposits 34,076 33,797 32,806 32,778 32,845 1 4
Average deposit interest rate 0.27% 0.26% 0.25% 0.25% 0.24% 1 bps 3 bps
Core deposit intangible amortization $3 $4 $3 $4 $4 (25)% (25)%
Net charge-off rate 0.29% 0.03% 0.26% 0.05% 0.02% 26 bps 27 bps
Nonperforming loan rate(1)(9) 1.63 0.87 0.87 0.90 0.31 76 132
Nonperforming asset rate(2)(9) 1.64 0.87 0.87 0.91 0.31 77 133
Risk category:(8)
Noncriticized $59,663 $59,743 $49,803 $48,847 $48,778 - 22%
Criticized performing 2,595 2,015 1,725 1,767 1,645 29% 58
Criticized nonperforming 1,050 550 453 463 158 91 **
PCI loans(9) 933 958 131 154 160 (3) **
Total commercial loans $64,241 $63,266 $52,112 $51,231 $50,741 2 27
======= ======= ======= ======= =======
Risk category as a percentage of period-end commercial loans held for investment:(9)
Noncriticized 92.9% 94.4% 95.6% 95.4% 96.2% (150) bps (330) bps
Criticized performing 4.0 3.2 3.3 3.4 3.2 80 80
Criticized nonperforming 1.6 0.9 0.9 0.9 0.3 70 130
PCI loans 1.5 1.5 0.2 0.3 0.3 - 120
Total commercial loans 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary-Other and Total
2016 Q1 vs.
-----------
2016 2015 2015 2015 2015 2015 2015
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1 Q4 Q1
--- --- --- --- --- --- ---
Other
-----
Earnings:
Net interest income (expense) $66 $47 $(3) $(6) $15 40% **
Non-interest income 8 7 - (29) (17) 14 **
--- --- --- --- ---
Total net revenue (loss)(3) 74 54 (3) (35) (2) 37 **
Provision (benefit) for credit losses (2) - (2) - - ** **
Non-interest expense(10) 48 60 39 182 31 (20) 55%
--- --- --- --- ---
Income (loss) from continuing operations before income taxes 28 (6) (40) (217) (33) ** **
Income tax provision (benefit) (65) (51) (78) (143) (78) 27 (17)
--- --- --- ---- ---
Income (loss) from continuing operations, net of tax $93 $45 $38 $(74) $45 107 107
=== === === ==== ===
Selected performance metrics:
Period-end loans held for investment $82 $88 $92 $95 $104 (7)% (21)%
Average loans held for investment 78 82 88 93 102 (5) (24)
Period-end deposits 10,593 10,762 9,286 5,550 5,363 (2) 98
Average deposits 10,850 10,581 7,352 5,289 5,413 3 100
Total
-----
Earnings:
Net interest income $5,056 $4,961 $4,760 $4,537 $4,576 2% 10%
Non-interest income 1,164 1,233 1,140 1,135 1,071 (6) 9
----- ----- ----- ----- -----
Total net revenue (loss) 6,220 6,194 5,900 5,672 5,647 - 10
Provision (benefit) for credit losses 1,527 1,380 1,092 1,129 935 11 63
Non-interest expense 3,223 3,480 3,160 3,307 3,049 (7) 6
----- ----- ----- ----- -----
Income (loss) from continuing operations before income taxes 1,470 1,334 1,648 1,236 1,663 10 (12)
Income tax provision (benefit) 452 426 530 384 529 6 (15)
--- --- --- --- ---
Income (loss) from continuing operations, net of tax $1,018 $908 $1,118 $852 $1,134 12 (10)
====== ==== ====== ==== ======
Selected performance metrics:
Period-end loans held for investment $227,613 $229,851 $213,329 $209,705 $203,978 (1)% 12%
Average loans held for investment 226,736 220,052 211,227 206,337 205,194 3 10
Period-end deposits 221,779 217,721 212,903 208,780 210,440 2 5
Average deposits 219,180 215,899 210,974 209,143 207,851 2 5
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 REOs.
(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 to 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) 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.
(8) Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
(9) As of March 31, 2016, the loans held for investment acquired in the HFS acquisition included $825 million of PCI loans that are being accounted for under ASC 310-30 (formerly "SOP 03-3") due to their deterioration in credit quality since origination. From a managed perspective, we evaluate loans based on their actual risk ratings, and accordingly we are also including
our nonperforming and criticized ratios measured on that basis. Were these PCI loans to be classified based on their risk ratings, our nonperforming loan rate and nonperforming asset rate for Commercial Banking in Q1 2016 would be 1.69% and 1.70%, respectively; our Criticized performing balance and percentage would increase to $3.3 billion and 5.17%, respectively;
Criticized nonperforming balance and percentage would increase to $1.1 billion and 1.69%, respectively, with corresponding decreases to the balance and percentage of our Noncriticized category.
(10) Includes restructuring charges for employee severance and related benefits pursuant to our ongoing benefit programs.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures(1)
Basel III Standardized Approach
-------------------------------
(Dollars in millions) (unaudited) March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Regulatory Capital Metrics
--------------------------
Common equity Tier 1 capital $29,237 $29,544 $30,109 $29,804 $29,671
Tier 1 capital 32,530 32,838 33,402 32,614 31,493
Total capital(2) 38,368 38,838 37,694 37,115 35,878
Risk-weighted assets 262,220 265,739 249,081 246,106 238,011
Average assets for the leverage ratio 317,403 309,037 300,010 293,291 295,556
-------------------------------------
Capital Ratios
--------------
Common equity Tier 1 capital ratio(3) 11.1% 11.1% 12.1% 12.1% 12.5%
Tier 1 capital ratio(4) 12.4 12.4 13.4 13.3 13.2
Total capital ratio(5) 14.6 14.6 15.1 15.1 15.1
Tier 1 leverage ratio(6) 10.2 10.6 11.1 11.1 10.7
Tangible common equity ("TCE") ratio(7) 9.1 8.9 9.8 9.7 9.8
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.
2016 2015 2015 2015 2015
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1
--- --- --- --- ---
Tangible Common Equity (Period End)
----------------------------------
Stockholders' equity $47,707 $47,284 $47,685 $46,659 $45,730
Goodwill and intangible assets(8) (15,629) (15,701) (15,153) (15,240) (15,307)
Noncumulative perpetual preferred stock(9) (3,296) (3,294) (3,294) (2,810) (1,822)
------ ------
Tangible common equity $28,782 $28,289 $29,238 $28,609 $28,601
======= ======= ======= ======= =======
Tangible Common Equity (Average)
-------------------------------
Average stockholders' equity $49,078 $48,712 $48,456 $47,255 $46,397
Average goodwill and intangible assets(8) (15,654) (15,316) (15,183) (15,256) (15,339)
Average noncumulative perpetual preferred stock(9) (3,296) (3,294) (3,049) (2,377) (1,822)
Average tangible common equity $30,128 $30,102 $30,224 $29,622 $29,236
======= ======= ======= ======= =======
2016 2015 2015 2015 2015
(Dollars in millions) (unaudited) Q1 Q4 Q3 Q2 Q1
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Tangible Assets (Period End)
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Total assets $330,346 $334,048 $313,700 $310,510 $306,224
Goodwill and intangible assets(8) (15,629) (15,701) (15,153) (15,240) (15,307)
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Tangible assets $314,717 $318,347 $298,547 $295,270 $290,917
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Tangible Assets (Average)
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Average total assets $331,919 $323,354 $313,822 $307,206 $309,401
Average goodwill and intangible assets(8) (15,654) (15,316) (15,183) (15,256) (15,339)
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Average tangible assets $316,265 $308,038 $298,639 $291,950 $294,062
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Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
(Dollars in millions) (unaudited) March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Common equity excluding AOCI $44,452 $44,606 $44,533 $44,246 $44,120
Adjustments:
AOCI(10)(11) 117 (254) 75 (128) (26)
Goodwill(8) (14,301) (14,296) (13,805) (13,809) (13,801)
Intangible assets(8)(11) (532) (393) (374) (413) (450)
Other (499) (119) (320) (92) (172)
Common equity Tier 1 capital $29,237 $29,544 $30,109 $29,804 $29,671
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Risk-weighted assets $262,220 $265,739 $249,081 $246,106 $238,011
Common equity Tier 1 capital ratio(3) 11.1% 11.1% 12.1% 12.1% 12.5%
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(1) Regulatory capital metrics and capital ratios as of March 31, 2016 are preliminary and therefore subject to change.
(2) Total capital equals the sum of Tier 1 capital and Tier 2 capital.
(3) Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
(4) Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(5) Total capital ratio is a regulatory capital measure calculated based on Total capital divided by risk-weighted assets.
(6) Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
(7) TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
(8) Includes impact of related deferred taxes.
(9) Includes related surplus.
(10) Amounts presented are net of tax.
(11) Amounts based on transition provisions for regulatory capital deductions and adjustments of 40% for 2015 and 60% for 2016.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/capital-one-reports-first-quarter-2016-net-income-of-10-billion-or-184-per-share-300257839.html
SOURCE Capital One Financial Corporation
