CAPITAL ONE FINANCIAL CORPORATION MCLEAN, Va., Jan. 26, 2016 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2015 of $920 million, or $1.58 per diluted common share, compared to the third quarter of 2015 with net income of $1.1 billion, or $1.98 per diluted common share, and the fourth quarter of 2014 with net income of $999 million, or $1.73 per diluted common share.
Net income, excluding adjustments((1)) for the fourth quarter of 2015 was $966 million or $1.67 per diluted common share. Adjustments are comprised of charges totaling $72 million associated with (i) closing the GE Healthcare 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.
"The headline for 2015 was industry-leading growth in Domestic Card loans and purchase volumes," said Richard D. Fairbank, Chairman and Chief Executive Officer. "Our 2015 results and the choices that drove them have put us 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 full year of 2015 compared to the full year of 2014 unless otherwise noted.
2015 Full Year Income Statement Summary:
-- Total net revenue increased 5 percent to $23.4 billion, including ($86)
million of contra-revenue from a build in the U.K. Payment Protection
Insurance customer refund reserve ("U.K. PPI Reserve").
-- Total non-interest expense increased 7 percent to $13.0 billion:
-- 12 percent increase in marketing.
-- 7 percent increase in operating expenses, including $150 million in
restructuring and related site closure charges, $61 million build in
the U.K. PPI Reserve, and $20 million of charges associated with
closing the GE Healthcare acquisition.
-- Pre-provision earnings increased 3 percent to $10.4 billion.
-- Provision for credit losses increased 28 percent to $4.5 billion.
-- Efficiency ratio of 55.51 percent; Efficiency ratio excluding
restructuring and site closure charges, the build in the U.K. PPI
Reserve and charges associated with the closing of the GE Healthcare
acquisition was 54.32 percent.
All comparisons below are for the fourth quarter of 2015 compared to the third quarter of 2015 unless otherwise noted.
Fourth Quarter 2015 Income Statement Summary:
-- Total net revenue increased 5 percent to $6.2 billion.
-- Total non-interest expense increased 10 percent to $3.5 billion:
-- 35 percent increase in marketing.
-- 7 percent increase in operating expenses.
-- Pre-provision earnings decreased 1 percent to $2.7 billion.
-- Provision for credit losses increased 26 percent to $1.4 billion.
-- Net interest margin of 6.79 percent, up 6 basis points.
All comparisons below are as of December 31, 2015 as compared to December 31, 2014 unless otherwise noted.
Fourth Quarter 2015 Balance Sheet Summary:
-- Common equity Tier 1 capital ratio under Basel III Standardized Approach
of 11.1 percent at December 31, 2015.
-- Period-end loans held for investment in the quarter increased $16.5
billion, or 8 percent, to $229.9 billion.
-- Domestic Card period-end loans increased $5.8 billion, or 7 percent,
to $87.9 billion.
-- Consumer Banking period-end loans decreased $618 million, or less
than 1 percent, to $70.4 billion:
-- Auto period-end loans increased $497 million, or 1 percent, to
$41.5 billion.
-- Home loans period-end loans decreased $1.1 billion, or 4
percent, to $25.2 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking period-end loans increased $11.2 billion, or 21
percent, to $63.3 billion, including the acquired GE Healthcare
loans.
-- Average loans held for investment in the quarter increased $8.8 billion,
or 4 percent, to $220.1 billion.
-- Domestic Card average loans increased $3.4 billion, or 4 percent, to
$83.8 billion.
-- Consumer Banking average loans decreased $393 million, or less than
1 percent, to $70.7 billion:
-- Auto average loans increased $773 million, or 2 percent, to
$41.3 billion.
-- Home loans average loans decreased by $1.2 billion, or 4
percent, to $25.8 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking average loans increased $5.8 billion, or 11
percent, to $57.4 billion, including the acquired GE Healthcare
loans.
-- Period-end total deposits increased $4.8 billion, or 2 percent, to
$217.7 billion, while average deposits increased $4.9 billion, or 2
percent to $215.9 billion.
-- Interest-bearing deposit rate remained flat at 0.58 percent.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on January 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 February 9, 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, 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 $217.7 billion in deposits and $334.0 billion in total assets as of December 31, 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.
((1)) Net income excluding adjustments is a non-GAAP measure, which we believe is helpful for investors to understand the effect of the excluded items on our reported results. See Table 5 in Exhibit 99.2 for a reconciliation to the reported results on a GAAP basis.
Exhibit 99.2
Capital One Financial Corporation
Financial Supplement
Fourth 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 Annual Report
on Form 10-K for the period ended
December 31, 2015 once it is
filed with the Securities and
Exchange Commission.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary-Consolidated(1)
2015 Q4 vs. Year Ended
----------- ----------
(Dollars in millions, except per share data and as noted) (unaudited) 2015 2015 2015 2015 2014 2015 2014 2015 vs.
Q4 Q3 Q2 Q1 Q4 Q3 Q4 2015 2014 2014
--- --- --- --- --- --- --- ---- ---- ----
Income Statement
----------------
Net interest income $4,961 $4,760 $4,537 $4,576 $4,656 4% 7% $18,834 $17,818 6%
Non-interest income 1,233 1,140 1,135 1,071 1,157 8 7 4,579 4,472 2
----- ----- ----- ----- -----
Total net revenue(2) 6,194 5,900 5,672 5,647 5,813 5 7 23,413 22,290 5
Provision for credit losses 1,380 1,092 1,129 935 1,109 26 24 4,536 3,541 28
Non-interest expense:
Marketing 564 418 387 375 509 35 11 1,744 1,561 12
Amortization of intangibles 103 106 111 110 123 (3) (16) 430 532 (19)
Operating expenses 2,813 2,636 2,809 2,564 2,652 7 6 10,822 10,087 7
----- ----- ----- ----- ----- ------
Total non-interest expense 3,480 3,160 3,307 3,049 3,284 10 6 12,996 12,180 7
----- ----- ----- ----- ----- ------ ------
Income from continuing operations before income taxes 1,334 1,648 1,236 1,663 1,420 (19) (6) 5,881 6,569 (10)
Income tax provision 426 530 384 529 450 (20) (5) 1,869 2,146 (13)
--- --- --- --- --- ----- -----
Income from continuing operations, net of tax 908 1,118 852 1,134 970 (19) (6) 4,012 4,423 (9)
Income (loss) from discontinued operations, net of tax(3) 12 (4) 11 19 29 ** (59) 38 5 **
--- --- --- --- --- --- ---
Net income 920 1,114 863 1,153 999 (17) (8) 4,050 4,428 (9)
Dividends and undistributed earnings allocated to participating securities(4) (4) (6) (4) (6) (4) (33) - (20) (18) 11
Preferred stock dividends(4) (68) (29) (29) (32) (21) 134 224 (158) (67) 136
Net income available to common stockholders $848 $1,079 $830 $1,115 $974 (21) (13) $3,872 $4,343 (11)
==== ====== ==== ====== ==== ====== ======
Common Share Statistics
-----------------------
Basic earnings per common share:(4)
Net income from continuing operations $1.58 $2.01 $1.50 $2.00 $1.71 (21)% (8)% $7.08 $7.70 (8)%
Income (loss) from discontinued operations 0.02 (0.01) 0.02 0.03 0.05 ** (60) 0.07 0.01 **
----
Net income per basic common share $1.60 $2.00 $1.52 $2.03 $1.76 (20) (9) $7.15 $7.71 (7)
===== ===== ===== ===== ===== ===== =====
Diluted earnings per common share:(4)
Net income from continuing operations $1.56 $1.99 $1.48 $1.97 $1.68 (22) (7) $7.00 $7.58 (8)
Income (loss) from discontinued operations 0.02 (0.01) 0.02 0.03 0.05 ** (60) 0.07 0.01 **
Net income per diluted common share(5) $1.58 $1.98 $1.50 $2.00 $1.73 (20) (9) $7.07 $7.59 (7)
===== ===== ===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic 530.8 540.6 545.6 550.2 554.3 (2) (4) 541.8 563.1 (4)
Diluted 536.3 546.3 552.0 557.2 561.8 (2) (5) 548.0 571.9 (4)
Common shares outstanding (period end, in millions) 527.3 534.9 542.5 548.0 553.4 (1) (5) 527.3 553.4 (5)
Dividends paid per common share $0.40 $0.40 $0.40 $0.30 $0.30 - 33 $1.50 $1.20 25
Tangible book value per common share (period end)(6) 53.65 54.66 52.74 52.19 50.32 (2) 7 53.65 50.32 7
2015 Q4 vs. Year Ended
----------- ----------
(Dollars in millions) (unaudited) 2015 2015 2015 2015 2014 2015 2014 2015 vs.
--------------------------------
Q4 Q3 Q2 Q1 Q4 Q3 Q4 2015 2014 2014
--- --- --- --- --- --- --- ---- ---- ----
Balance Sheet (Period End)
-------------------------
Loans held for investment(7) $229,851 $213,329 $209,705 $203,978 $208,316 8% 10% $229,851 $208,316 10%
Interest-earning assets 302,007 283,073 280,137 275,837 277,849 7 9 302,007 277,849 9
Total assets 334,048 313,700 310,510 306,224 308,167 6 8 334,048 308,167 8
Interest-bearing deposits 191,874 187,848 183,657 185,208 180,467 2 6 191,874 180,467 6
Total deposits 217,721 212,903 208,780 210,440 205,548 2 6 217,721 205,548 6
Borrowings 59,115 42,778 45,766 41,029 48,457 38 22 59,115 48,457 22
Common equity 43,990 44,391 43,849 43,908 43,231 (1) 2 43,990 43,231 2
Total stockholders' equity 47,284 47,685 46,659 45,730 45,053 (1) 5 47,284 45,053 5
--------------------------
Balance Sheet (Average Balances)
-------------------------------
Loans held for investment(7) $220,052 $211,227 $206,337 $205,194 $203,436 4% 8% $210,745 $197,925 6%
Interest-earning assets 292,054 283,082 276,585 278,427 273,436 3 7 282,581 267,174 6
Total assets 323,354 313,822 307,206 309,401 304,153 3 6 313,474 297,659 5
Interest-bearing deposits 189,885 185,800 183,946 182,998 179,401 2 6 185,677 181,036 3
Total deposits 215,899 210,974 209,143 207,851 205,355 2 5 210,989 205,675 3
Borrowings 48,850 45,070 41,650 46,082 43,479 8 12 45,420 38,882 17
Common equity 45,418 45,407 44,878 44,575 43,895 - 3 45,072 43,055 5
Total stockholders' equity 48,712 48,456 47,255 46,397 45,576 1 7 47,713 44,268 8
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics-Consolidated(1)
2015 Q4 vs. Year Ended
----------- ----------
(Dollars in millions except as noted) (unaudited) 2015 2015 2015 2015 2014 2015 2014 2015 vs.
Q4 Q3 Q2 Q1 Q4 Q3 Q4 2015 2014 2014
--- --- --- --- --- --- --- ---- ---- ----
Performance Metrics
-------------------
Net interest income growth (period over period) 4% 5% (1)% (2)% 4% ** ** 6% (2)% **
Non-interest income growth (period over period) 8 - 6 (7) 1 ** ** 2 5 **
Total net revenue growth (period over period) 5 4 - (3) 3 ** ** 5 - **
Total net revenue margin(8) 8.48 8.34 8.20 8.11 8.50 14 bps (2) bps 8.29 8.34 (5) bps
Net interest margin(9) 6.79 6.73 6.56 6.57 6.81 6 (2) 6.66 6.67 (1)
Return on average assets 1.12 1.43 1.11 1.47 1.28 (31) (16) 1.28 1.49 (21)
Return on average tangible assets(10) 1.18 1.50 1.17 1.54 1.34 (32) (16) 1.35 1.57 (22)
Return on average common equity(11) 7.36 9.54 7.30 9.84 8.61 (218) (125) 8.51 10.08 (157)
Return on average tangible common equity(12) 11.11 14.33 11.06 15.00 13.28 (322) (217) 12.87 15.79 (292)
Non-interest expense as a percentage of average loans held for investment 6.33 5.98 6.41 5.94 6.46 35 (13) 6.17 6.15 2
Efficiency ratio(13) 56.18 53.56 58.30 53.99 56.49 262 (31) 55.51 54.64 87
Effective income tax rate for continuing operations 31.9 32.2 31.1 31.8 31.7 (30) 20 31.8 32.7 (90)
Employees (in thousands), period end 45.4 46.9 47.5 47.0 46.0 (3)% (1)% 45.4 46.0 (1)%
Credit Quality Metrics(7)
------------------------
Allowance for loan and lease losses $5,130 $4,847 $4,676 $4,405 $4,383 6% 17% $5,130 $4,383 17%
Allowance as a percentage of loans held for investment 2.23% 2.27% 2.23% 2.16% 2.10% (4) bps 13 bps 2.23% 2.10% 13 bps
Net charge-offs $1,078 $890 $846 $881 $915 21% 18% $3,695 $3,414 8%
Net charge-off rate(14) 1.96% 1.69% 1.64% 1.72% 1.80% 27 bps 16 bps 1.75% 1.72% 3 bps
30+ day performing delinquency rate 2.69 2.63 2.33 2.32 2.62 6 7 2.69 2.62 7
30+ day delinquency rate 3.00 2.95 2.65 2.58 2.91 5 9 3.00 2.91 9
Capital Ratios(15)
-----------------
Common equity Tier 1 capital ratio 11.1% 12.1% 12.1% 12.5% 12.5% (100) bps (140) bps 11.1% 12.5% (140) bps
Tier 1 capital ratio 12.3 13.4 13.3 13.2 13.2 (110) (90) 12.3 13.2 (90)
Total capital ratio 14.6 15.1 15.1 15.1 15.1 (50) (50) 14.6 15.1 (50)
Tier 1 leverage ratio 10.6 11.1 11.1 10.7 10.8 (50) (20) 10.6 10.8 (20)
Tangible common equity ("TCE") ratio(16) 8.9 9.8 9.7 9.8 9.5 (90) (60) 8.9 9.5 (60)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
Three Months Ended 2015 Q4 vs. Year Ended
------------------ ----------- ----------
2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions, except per share data and as noted) (unaudited) Q4 Q3 Q4 Q3 Q4 2015 2014 2014
-------------------------------------------------------------------- --- --- --- --- --- ---- ---- ----
Interest income:
Loans, including loans held for sale $4,961 $4,753 $4,613 4% 8% $18,785 $17,662 6%
Investment securities 401 386 405 4 (1) 1,575 1,628 (3)
Other 22 25 27 (12) (19) 99 107 (7)
Total interest income 5,384 5,164 5,045 4 7 20,459 19,397 5
----- ----- ----- ------ ------
Interest expense:
Deposits 277 271 269 2 3 1,091 1,088 -
Securitized debt obligations 43 39 36 10 19 151 145 4
Senior and subordinated notes 89 82 73 9 22 330 299 10
Other borrowings 14 12 11 17 27 53 47 13
Total interest expense 423 404 389 5 9 1,625 1,579 3
--- --- --- ----- -----
Net interest income 4,961 4,760 4,656 4 7 18,834 17,818 6
Provision for credit losses 1,380 1,092 1,109 26 24 4,536 3,541 28
Net interest income after provision for credit losses 3,581 3,668 3,547 (2) 1 14,298 14,277 -
----- ----- ----- ------ ------
Non-interest income:
Service charges and other customer-related fees 426 423 462 1 (8) 1,715 1,867 (8)
Interchange fees, net 617 555 523 11 18 2,235 2,021 11
Net other-than-temporary impairment recognized in earnings (3) (5) (9) (40) (67) (30) (24) 25
Other 193 167 181 16 7 659 608 8
Total non-interest income 1,233 1,140 1,157 8 7 4,579 4,472 2
----- ----- ----- ----- -----
Non-interest expense:
Salaries and associate benefits 1,215 1,189 1,179 2 3 4,975 4,593 8
Occupancy and equipment 511 444 474 15 8 1,829 1,745 5
Marketing 564 418 509 35 11 1,744 1,561 12
Professional services 349 313 329 12 6 1,292 1,216 6
Communications and data processing 247 226 203 9 22 883 798 11
Amortization of intangibles 103 106 123 (3) (16) 430 532 (19)
Other 491 464 467 6 5 1,843 1,735 6
--- --- --- ----- -----
Total non-interest expense 3,480 3,160 3,284 10 6 12,996 12,180 7
----- ----- ----- ------ ------
Income from continuing operations before income taxes 1,334 1,648 1,420 (19) (6) 5,881 6,569 (10)
Income tax provision 426 530 450 (20) (5) 1,869 2,146 (13)
--- --- --- ----- -----
Income from continuing operations, net of tax 908 1,118 970 (19) (6) 4,012 4,423 (9)
Income (loss) from discontinued operations, net of tax(3) 12 (4) 29 ** (59) 38 5 **
--- --- --- --- ---
Net income 920 1,114 999 (17) (8) 4,050 4,428 (9)
Dividends and undistributed earnings allocated to participating securities(4) (4) (6) (4) (33) - (20) (18) 11
Preferred stock dividends(4) (68) (29) (21) 134 224 (158) (67) 136
Net income available to common stockholders $848 $1,079 $974 (21) (13) $3,872 $4,343 (11)
==== ====== ==== ====== ======
Three Months Ended 2015 Q4 vs. Year Ended
----------- ----------
2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions, except per share data and as noted) (unaudited) Q4 Q3 Q4 Q3 Q4 2015 2014 2014
-------------------------------------------------------------------- --- --- --- --- --- ---- ---- ----
Basic earnings per common share:(4)
Net income from continuing operations $1.58 $2.01 $1.71 (21)% (8)% $7.08 $7.70 (8)%
Income (loss) from discontinued operations 0.02 (0.01) 0.05 ** (60) 0.07 0.01 **
----
Net income per basic common share $1.60 $2.00 $1.76 (20) (9) $7.15 $7.71 (7)
===== ===== ===== ===== =====
Diluted earnings per common share:(4)
Net income from continuing operations $1.56 $1.99 $1.68 (22) (7) $7.00 $7.58 (8)
Income (loss) from discontinued operations 0.02 (0.01) 0.05 ** (60) 0.07 0.01 **
Net income per diluted common share(5) $1.58 $1.98 $1.73 (20) (9) $7.07 $7.59 (7)
===== ===== ===== ===== =====
Weighted average common shares outstanding (in millions):
Basic common shares 530.8 540.6 554.3 (2) (4) 541.8 563.1 (4)
Diluted common shares 536.3 546.3 561.8 (2) (5) 548.0 571.9 (4)
Dividends paid per common share $0.40 $0.40 $0.30 - 33 $1.50 $1.20 25
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets(1)
December 31, 2015 vs.
---------------------
(Dollars in millions) (unaudited) December 31, September 30, December 31, September 30, December 31,
2015 2015 2014 2015 2014
--- ---- ---- ---- ---- ----
Assets:
Cash and cash equivalents:
Cash and due from banks $3,407 $2,701 $3,147 26% 8%
Interest-bearing deposits with banks 4,577 3,952 4,095 16 12
Federal funds sold and securities purchased under agreements to resell 39 184 0 (79) **
--- --- ---
Total cash and cash equivalents 8,023 6,837 7,242 17 11
Restricted cash for securitization investors 1,017 586 234 74 **
Securities available for sale, at fair value 39,061 39,431 39,508 (1) (1)
Securities held to maturity, at carrying value 24,619 23,711 22,500 4 9
Loans held for investment:(7)
Unsecuritized loans held for investment 196,068 179,748 171,771 9 14
Restricted loans for securitization investors 33,783 33,581 36,545 1 (8)
------ ------ ------
Total loans held for investment 229,851 213,329 208,316 8 10
Allowance for loan and lease losses (5,130) (4,847) (4,383) 6 17
------ ------ ------
Net loans held for investment 224,721 208,482 203,933 8 10
Loans held for sale, at lower of cost or fair value 904 566 626 60 44
Premises and equipment, net 3,584 3,629 3,685 (1) (3)
Interest receivable 1,189 1,101 1,079 8 10
Goodwill 14,480 13,983 13,978 4 4
Other assets 16,450 15,374 15,382 7 7
------ ------ ------
Total assets $334,048 $313,700 $308,167 6 8
======== ======== ========
December 31, 2015 vs.
---------------------
(Dollars in millions) (unaudited) December 31, September 30, December 31, September 30, December 31,
2015 2015 2014 2015 2014
--- ---- ---- ---- ---- ----
Liabilities:
Interest payable $299 $198 $254 51% 18%
Deposits:
Non-interest bearing deposits 25,847 25,055 25,081 3 3
Interest-bearing deposits 191,874 187,848 180,467 2 6
------- ------- -------
Total deposits 217,721 212,903 205,548 2 6
Securitized debt obligations 16,166 15,656 11,624 3 39
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase 981 1,021 880 (4) 11
Senior and subordinated notes 21,837 21,773 18,684 - 17
Other borrowings 20,131 4,328 17,269 ** 17
------ ----- ------
Total other debt 42,949 27,122 36,833 58 17
Other liabilities 9,629 10,136 8,855 (5) 9
----- ------ -----
Total liabilities 286,764 266,015 263,114 8 9
------- ------- -------
Stockholders' equity:
Preferred stock 0 0 0 - -
Common stock 6 6 6 - -
Additional paid-in capital, net 29,655 29,594 27,869 - 6
Retained earnings 27,045 26,407 23,973 2 13
Accumulated other comprehensive loss (616) (142) (430) ** 43
Treasury stock, at cost (8,806) (8,180) (6,365) 8 38
------ ------ ------
Total stockholders' equity 47,284 47,685 45,053 (1) 5
------ ------ ------
Total liabilities and stockholders' equity $334,048 $313,700 $308,167 6 8
======== ======== ========
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 $222 million in Q4 2015, $195 million in Q3 2015, $168 million in Q2 2015, $147 million in Q1 2015 and $165 million in Q4 2014 for the estimated uncollectible amount of billed finance charges and fees.
(3) Historically, the majority of the (benefit) provision for representation and warranty losses is included net of tax in discontinued operations. The (benefit) provision for mortgage representation and warranty losses included the following activity:
2015 2015 2015 2015 2014
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4
-------------------------------- --- --- --- --- ---
(Benefit) provision for mortgage representation and
warranty losses before income taxes:
Recorded in continuing operations $(1) $(7) $(9) $1 $(11)
Recorded in discontinued operations (21) 3 (27) (19) (41)
Total (benefit) provision for mortgage representation and
warranty losses before income taxes $(22) $(4) $(36) $(18) $(52)
==== === ==== ==== ====
The mortgage representation and warranty reserve was $610 million as of December 31, 2015, $632 million as of September 30, 2015 and $731 million as of December 31, 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) On December 1, 2015, we completed the acquisition of Healthcare Financial Services business of General Electric Capital Corporation ("GE Healthcare acquisition"). In Q4 2015, we recorded charges totaling $72 million associated with (i) closing the acquisition of Healthcare Financial Services business of General Electric Capital Corporation ("GE Healthcare 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 the excluded items on our reported results. The table below presents a reconciliation of our reported results to these non-GAAP financial measures:
2015 Q4 2015 Q3 2015 Q2 Year Ended
December 31, 2015
--- --- --- -----------------
(Dollars in millions, except per share data)
(unaudited) Pre-Tax Net Diluted Pre-Tax Net Diluted Pre-Tax Net Diluted Pre-Tax Net Diluted
Income Income EPS 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 $5,881 $4,050 $7.07
Adjustments 72 46 0.09 69 69 0.12 225 155 0.28 366 270 0.49
Results excluding adjustments $1,406 $966 $1.67 $1,717 $1,183 $2.10 $1,461 $1,018 $1.78 $6,247 $4,320 $7.56
====== ==== ===== ====== ====== ===== ====== ====== ===== ====== ====== =====
(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) Included in loans held for investment are acquired 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 Standard Codification 310-30). These include certain of our consumer and commercial loans that were acquired through business acquisitions. The table below presents amounts related to acquired loans
accounted for under SOP 03-3:
2015 2015 2015 2015 2014
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4
-------------------------------- --- --- --- --- ---
Acquired loans accounted for under SOP 03-3:
Period-end unpaid principal balance $20,434 $20,585 $21,841 $23,248 $24,473
Period-end loans held for investment 19,518 19,743 20,970 22,334 23,500
Average loans held for investment 19,319 20,116 21,440 22,773 23,907
(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 adjustments discussed above in Footnote 5, was 55.82% for Q4 2015, 52.78% for Q3 2015, 54.63% for Q2 2015 and 54.32% for the year ended December 31, 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 Q4 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 Q4 2015 Q3 2014 Q4
------- ------- -------
(Dollars in millions) (unaudited) 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)
--- --------- --------- ---------
Interest-earning assets:
Loans, including loans held for sale $220,760 $4,961 8.99% $212,076 $4,753 8.96% $204,137 $4,613 9.04%
Investment securities 64,444 401 2.49 63,541 2.43 62,952 405 2.57
386
Cash equivalents and other 6,850 22 1.28 7,465 1.34 6,347 27 1.70
25
---
Total interest-earning assets $292,054 $5,384 7.37 $283,082 $5,164 7.30 $273,436 $5,045 7.38
-------- ------ -------- ------ -------- ------
Interest-bearing liabilities:
Interest-bearing deposits $189,885 $277 0.58% $185,800 $271 0.58% $179,401 $269 0.60%
Securitized debt obligations 15,993 43 1.08 14,881 1.05 11,479 36 1.25
39
Senior and subordinated notes 21,987 89 1.62 20,806 1.58 18,680 73 1.56
82
Other borrowings and liabilities 11,542 14 0.49 10,114 0.47 14,058 11 0.31
12
---
Total interest-bearing liabilities $239,407 $423 0.71 $231,601 404 0.70 $223,618 $389 0.70
$
---
Net interest income/spread $4,961 6.66 $4,760 6.60 $4,656 6.68
====== ====== ======
Impact of non-interest bearing funding 0.13 0.13 0.13
---- ---- ----
Net interest margin 6.79% 6.73% 6.81%
==== ==== ====
Year Ended December 31,
-----------------------
2015 2014
---- ----
(Dollars in millions) (unaudited) Average Interest Yield/ Interest Yield/
Balance Income/ Rate(1) Income/ Rate(1)
Expense(1) Average Expense(1)
Balance
--- -------
Interest-earning assets:
Loans, including loans held for sale $211,549 $18,785 8.88% $198,419 $17,662 8.90%
Investment securities 63,738 1,575 2.47 62,547 1,628 2.60
Cash equivalents and other 7,294 99 1.36 6,208 107 1.72
----- --- ----- ---
Total interest-earning assets $282,581 $20,459 7.24 $267,174 $19,397 7.26
-------- ------- -------- -------
Interest-bearing liabilities:
Interest-bearing deposits $185,677 $1,091 0.59% $181,036 $1,088 0.60%
Securitized debt obligations 13,929 151 1.08 10,686 145 1.36
Senior and subordinated notes 20,935 330 1.58 16,543 299 1.81
Other borrowings and liabilities 11,297 53 0.47 12,325 47 0.38
------ --- ------ ---
Total interest-bearing liabilities $231,838 $1,625 0.70 $220,590 $1,579 0.72
-------- ------ ---- -------- ------ ----
Net interest income/spread $18,834 6.54 $17,818 6.54
======= =======
Impact of non-interest bearing funding 0.12 0.13
---- ----
Net interest margin 6.66% 6.67%
==== ====
__________
(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 Q4 vs. Year Ended
----------- ----------
(Dollars in millions) (unaudited) 2015 2015 2015 2015 2014 2015 2014 2015 2014 2015 vs.
Q4 Q3 Q2 Q1 Q4 Q3 Q4 2014
--- --- --- --- --- --- --- --- ----
Loans Held For Investment (Period End)
-------------------------------------
Credit card:
Domestic credit card $87,939 $82,178 $78,984 $74,131 $77,704 7% 13% $87,939 $77,704 13%
International credit card 8,186 7,957 8,219 7,623 8,172 3 - 8,186 8,172 -
----- ----- ----- ----- ----- ----- -----
Total credit card 96,125 90,135 87,203 81,754 85,876 7 12 96,125 85,876 12
------ ------ ------ ------ ------ ------ ------
Consumer banking:
Auto 41,549 41,052 39,991 38,937 37,824 1 10 41,549 37,824 10
Home loan 25,227 26,340 27,595 28,905 30,035 (4) (16) 25,227 30,035 (16)
Retail banking 3,596 3,598 3,590 3,537 3,580 - - 3,596 3,580 -
----- ----- ----- ----- ----- ----- -----
Total consumer banking 70,372 70,990 71,176 71,379 71,439 (1) (1) 70,372 71,439 (1)
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 25,518 23,585 22,886 22,831 23,137 8 10 25,518 23,137 10
Commercial and industrial 37,135 27,873 27,660 27,172 26,972 33 38 37,135 26,972 38
------ ------ ------ ------ ------ ------ ------
Total commercial lending 62,653 51,458 50,546 50,003 50,109 22 25 62,653 50,109 25
Small-ticket commercial real estate 613 654 685 738 781 (6) (22) 613 781 (22)
--- --- --- --- --- --- ---
Total commercial banking 63,266 52,112 51,231 50,741 50,890 21 24 63,266 50,890 24
------ ------ ------ ------ ------ ------ ------
Other loans 88 92 95 104 111 (4) (21) 88 111 (21)
Total loans held for investment $229,851 $213,329 $209,705 $203,978 $208,316 8 10 $229,851 $208,316 10
======== ======== ======== ======== ======== ======== ========
Loans Held For Investment (Average)
----------------------------------
Credit card:
Domestic credit card $83,760 $80,402 $75,924 $74,770 $74,026 4% 13% $78,743 $71,262 10%
International credit card 8,127 8,048 7,977 7,811 7,714 1 5 7,992 7,684 4
----- ----- ----- ----- ----- ----- -----
Total credit card 91,887 88,450 83,901 82,581 81,740 4 12 86,735 78,946 10
------ ------ ------ ------ ------ ------ ------
Consumer banking:
Auto 41,333 40,560 39,546 38,387 37,072 2 11 39,967 34,769 15
Home loan 25,776 26,934 28,251 29,493 30,604 (4) (16) 27,601 32,589 (15)
Retail banking 3,595 3,603 3,570 3,561 3,578 - - 3,582 3,606 (1)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 70,704 71,097 71,367 71,441 71,254 (1) (1) 71,150 70,964 -
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 25,613 23,305 22,853 23,120 23,129 10 11 23,728 22,003 8
Commercial and industrial 31,132 27,620 27,414 27,190 26,409 13 18 28,349 25,028 13
------ ------ ------ ------ ------ ------ ------
Total commercial lending 56,745 50,925 50,267 50,310 49,538 11 15 52,077 47,031 11
Small-ticket commercial real estate 634 667 709 760 801 (5) (21) 692 868 (20)
--- --- --- --- --- --- ---
Total commercial banking 57,379 51,592 50,976 51,070 50,339 11 14 52,769 47,899 10
------ ------ ------ ------ ------ ------ ------
Other loans 82 88 93 102 103 (7) (20) 91 116 (22)
Total average loans held for investment $220,052 $211,227 $206,337 $205,194 $203,436 4 8 $210,745 $197,925 6
======== ======== ======== ======== ======== ======== ========
Net Charge-Off (Recovery) Rates
-------------------------------
Credit card:
Domestic credit card 3.75% 3.08% 3.42% 3.55% 3.39% 67 bps 36 bps 3.45% 3.43% 2 bps
International credit card 2.76 1.80 2.65 2.80 3.34 96 (58) 2.50 3.69 (119)
Total credit card 3.66 2.96 3.35 3.48 3.38 70 28 3.36 3.46 (10)
2015 Q4 vs. Year Ended
----------- ----------
(Dollars in millions) (unaudited) 2015 2015 2015 2015 2014 2015 2014 2015 2014 2015 vs.
Q4 Q3 Q2 Q1 Q4 Q3 Q4 2014
--- --- --- --- --- --- --- ----
Consumer banking:
Auto 2.10% 1.85% 1.22% 1.55% 2.14% 25 bps (4) bps 1.69% 1.78% (9) bps
Home loan 0.05 0.01 0.04 0.03 0.07 4 (2) 0.03 0.05 (2)
Retail banking 1.43 1.53 1.39 0.96 1.28 (10) 15 1.33 1.07 26
Total consumer banking 1.32 1.14 0.76 0.89 1.20 18 12 1.03 0.95 8
Commercial banking:
Commercial and multifamily real estate (0.03) (0.15) (0.04) (0.03) 0.01 12 ** (0.06) (0.02) (4)
Commercial and industrial 0.07 0.61 0.13 0.05 0.10 (54) (3) 0.21 0.04 17
Total commercial lending 0.02 0.26 0.05 0.01 0.06 (24) (4) 0.09 0.01 8
Small-ticket commercial real estate 0.34 0.50 0.15 0.47 0.80 (16) (46) 0.36 0.52 (16)
Total commercial banking 0.03 0.26 0.05 0.02 0.07 (23) (4) 0.09 0.02 7
Other loans (2.53) (5.50) (0.79) 1.56 0.47 297 ** (1.66) 0.36 **
Total net charge-offs 1.96 1.69 1.64 1.72 1.80 27 16 1.75 1.72 3
---------------------
30+ Day Performing Delinquency Rates
------------------------------------
Credit card:
Domestic credit card 3.39% 3.28% 2.84% 2.92% 3.27% 11 bps 12 bps 3.39% 3.27% 12 bps
International credit card 2.98 2.81 2.65 2.81 2.94 17 4 2.98 2.94 4
Total credit card 3.36 3.24 2.82 2.91 3.24 12 12 3.36 3.24 12
Consumer banking:
Auto 6.69 6.10 5.58 5.21 6.57 59 12 6.69 6.57 12
Home loan 0.16 0.18 0.17 0.18 0.21 (2) (5) 0.16 0.21 (5)
Retail banking 0.76 0.62 0.66 0.60 0.64 14 12 0.76 0.64 12
Total consumer banking 4.05 3.62 3.24 2.95 3.60 43 45 4.05 3.60 45
----------------------
Nonperforming Loans and Nonperforming Assets Rates(1)(2)
-------------------------------------------------------
Credit card:
International credit card 0.65% 0.77% 0.83% 0.84% 0.86% (12) bps (21) bps 0.65% 0.86% (21) bps
Total credit card 0.06 0.07 0.08 0.08 0.08 (1) (2) 0.06 0.08 (2)
Consumer banking:
Auto 0.53 0.49 0.40 0.31 0.52 4 1 0.53 0.52 1
Home loan 1.24 1.18 1.13 1.16 1.10 6 14 1.24 1.10 14
Retail banking 0.77 0.74 0.79 0.71 0.61 3 16 0.77 0.61 16
Total consumer banking 0.80 0.76 0.70 0.67 0.77 4 3 0.80 0.77 3
Commercial banking:
Commercial and multifamily real estate 0.03 0.03 0.12 0.18 0.27 - (24) 0.03 0.27 (24)
Commercial and industrial 1.45 1.58 1.56 0.39 0.39 (13) 106 1.45 0.39 106
Total commercial lending 0.87 0.87 0.91 0.29 0.33 - 54 0.87 0.33 54
Small-ticket commercial real estate 0.83 0.65 0.47 1.62 0.96 18 (13) 0.83 0.96 (13)
Total commercial banking 0.87 0.87 0.90 0.31 0.34 - 53 0.87 0.34 53
Other loans 12.35 12.10 10.68 13.33 13.37 25 (102) 12.35 13.37 (102)
Total nonperforming loans 0.51 0.50 0.50 0.35 0.39 1 12 0.51 0.39 12
Total nonperforming assets 0.65 0.64 0.64 0.50 0.54 1 11 0.65 0.54 11
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary-Business Segment Results
Three Months Ended December 31, 2015 Year Ended December 31, 2015
------------------------------------ ----------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial Other Total Credit Consumer Commercial Other
Card Banking Banking Card Banking Banking
--- ---- ------- ------- ---- ------- -------
Net interest income $4,961 $2,996 $1,434 $484 $47 $18,834 $11,161 $5,755 $1,865 $53
Non-interest income 1,233 902 182 142 7 4,579 3,421 710 487 (39)
----- --- --- --- --- ----- ----- --- --- ---
Total net revenue(3) 6,194 3,898 1,616 626 54 23,413 14,582 6,465 2,352 14
Provision (benefit) for credit losses 1,380 1,022 240 118 - 4,536 3,417 819 302 (2)
Non-interest expense 3,480 2,021 1,057 342 60 12,996 7,502 4,026 1,156 312
----- ----- ----- --- --- ------ ----- ----- ----- ---
Income (loss) from continuing operations before income taxes 1,334 855 319 166 (6) 5,881 3,663 1,620 894 (296)
Income tax provision (benefit) 426 302 115 60 (51) 1,869 1,309 586 324 (350)
--- --- --- --- --- ----- ----- --- --- ----
Income from continuing operations, net of tax $908 $553 $204 $106 $45 $4,012 $2,354 $1,034 $570 $54
==== ==== ==== ==== === ====== ====== ====== ==== ===
Three Months Ended September 30, 2015
-------------------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial Other
Card Banking Banking
--- ---- ------- -------
Net interest income (expense) $4,760 $2,866 $1,443 $454 $(3)
Non-interest income 1,140 858 174 108 -
----- --- --- --- ---
Total net revenue (loss)(3) 5,900 3,724 1,617 562 (3)
Provision (benefit) for credit losses 1,092 831 188 75 (2)
Non-interest expense 3,160 1,848 1,001 272 39
----- ----- ----- --- ---
Income (loss) from continuing operations before income taxes 1,648 1,045 428 215 (40)
Income tax provision (benefit) 530 375 155 78 (78)
--- --- --- --- ---
Income from continuing operations, net of tax $1,118 $670 $273 $137 $38
====== ==== ==== ==== ===
Three Months Ended December 31, 2014 Year Ended December 31, 2014
------------------------------------ ----------------------------
(Dollars in millions) (unaudited) Total Credit Consumer Commercial Other Total Credit Consumer Commercial Other
Card Banking Banking Card Banking Banking
--- ---- ------- ------- ---- ------- -------
Net interest income $4,656 $2,697 $1,459 $455 $45 $17,818 $10,310 $5,748 $1,751 $9
Non-interest income 1,157 841 185 132 (1) 4,472 3,311 684 450 27
----- --- --- --- --- ----- ----- --- --- ---
Total net revenue(3) 5,813 3,538 1,644 587 44 22,290 13,621 6,432 2,201 36
Provision (benefit) for credit losses 1,109 856 222 32 (1) 3,541 2,750 703 93 (5)
Non-interest expense 3,284 1,888 1,045 293 58 12,180 7,063 3,869 1,083 165
----- ----- ----- --- --- ------ ----- ----- ----- ---
Income (loss) from continuing operations before income taxes 1,420 794 377 262 (13) 6,569 3,808 1,860 1,025 (124)
Income tax provision (benefit) 450 275 135 93 (53) 2,146 1,329 665 366 (214)
--- --- --- --- --- ----- ----- --- --- ----
Income from continuing operations, net of tax $970 $519 $242 $169 $40 $4,423 $2,479 $1,195 $659 $90
==== ==== ==== ==== === ====== ====== ====== ==== ===
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary-Credit Card Business
2015 Q4 vs. Year Ended
----------- ----------
2015 2015 2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2015 2014 2014
-------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Credit Card(4)
-------------
Earnings:
Net interest income $2,996 $2,866 $2,633 $2,666 $2,697 5% 11% $11,161 $10,310 8%
Non-interest income 902 858 845 816 841 5 7 3,421 3,311 3
--- --- --- --- --- ----- -----
Total net revenue 3,898 3,724 3,478 3,482 3,538 5 10 14,582 13,621 7
Provision for credit losses 1,022 831 895 669 856 23 19 3,417 2,750 24
Non-interest expense 2,021 1,848 1,857 1,776 1,888 9 7 7,502 7,063 6
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 855 1,045 726 1,037 794 (18) 8 3,663 3,808 (4)
Income tax provision 302 375 263 369 275 (19) 10 1,309 1,329 (2)
-----
Income from continuing operations, net of tax $553 $670 $463 $668 $519 (17) 7 $2,354 $2,479 (5)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $96,125 $90,135 $87,203 $81,754 $85,876 7% 12% $96,125 $85,876 12%
Average loans held for investment 91,887 88,450 83,901 82,581 81,740 4 12 86,735 78,946 10
Average yield on loans held for investment(5) 14.45% 14.39% 13.98% 14.30% 14.61% 6 bps (16) bps 14.28% 14.48% (20) bps
Total net revenue margin(6) 16.97 16.84 16.58 16.87 17.31 13 (34) 16.81 17.25 (44)
Net charge-off rate 3.66 2.96 3.35 3.48 3.38 70 28 3.36 3.46 (10)
30+ day performing delinquency rate 3.36 3.24 2.82 2.91 3.24 12 12 3.36 3.24 12
30+ day delinquency rate 3.40 3.29 2.88 2.97 3.30 11 10 3.40 3.30 10
Nonperforming loan rate(1) 0.06 0.07 0.08 0.08 0.08 (1) (2) 0.06 0.08 (2)
Card loan premium amortization and other intangible accretion(7) $5 $5 $7 $11 $11 - (55)% $28 $97 (71)%
PCCR intangible amortization 74 78 80 84 87 (5)% (15) 316 369 (14)
Purchase volume(8) 75,350 69,875 68,559 57,383 63,484 8 19 271,167 224,750 21
2015 Q4 vs. Year Ended
----------- ----------
2015 2015 2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2015 2014 2014
-------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Domestic Card
-------------
Earnings:
Net interest income $2,718 $2,613 $2,395 $2,421 $2,432 4% 12% $10,147 $9,241 10%
Non-interest income 830 814 796 743 768 2 8 3,183 3,001 6
--- --- --- --- --- ----- -----
Total net revenue 3,548 3,427 3,191 3,164 3,200 4 11 13,330 12,242 9
Provision for credit losses 945 796 853 610 765 19 24 3,204 2,493 29
Non-interest expense 1,796 1,630 1,621 1,580 1,676 10 7 6,627 6,264 6
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 807 1,001 717 974 759 (19) 6 3,499 3,485 -
Income tax provision 293 362 259 353 272 (19) 8 1,267 1,246 2
Income from continuing operations, net of tax $514 $639 $458 $621 $487 (20) 6 $2,232 $2,239 -
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $87,939 $82,178 $78,984 $74,131 $77,704 7% 13% $87,939 $77,704 13%
Average loans held for investment 83,760 80,402 75,924 74,770 74,026 4 13 78,743 71,262 10
Average yield on loans held for investment(5) 14.31% 14.35% 13.95% 14.23% 14.43% (4) bps (12) bps 14.21% 14.26% (5) bps
Total net revenue margin(6) 16.95 17.05 16.81 16.93 17.29 (10) (34) 16.93 17.18 (25)
Net charge-off rate 3.75 3.08 3.42 3.55 3.39 67 36 3.45 3.43 2
30+ day performing delinquency rate 3.39 3.28 2.84 2.92 3.27 11 12 3.39 3.27 12
30+ day delinquency rate 3.39 3.28 2.84 2.92 3.27 11 12 3.39 3.27 12
Purchase volume(8) $68,740 $63,777 $62,198 $52,025 $58,234 8% 18% $246,740 $208,716 18%
International Card(4)
--------------------
Earnings:
Net interest income $278 $253 $238 $245 $265 10% 5% $1,014 $1,069 (5)%
Non-interest income 72 44 49 73 73 64 (1) 238 310 (23)
--- --- --- --- --- --- ---
Total net revenue 350 297 287 318 338 18 4 1,252 1,379 (9)
Provision for credit losses 77 35 42 59 91 120 (15) 213 257 (17)
Non-interest expense 225 218 236 196 212 3 6 875 799 10
--- --- --- --- --- --- ---
Income from continuing operations before income taxes 48 44 9 63 35 9 37 164 323 (49)
Income tax provision 9 13 4 16 3 (31) 200 42 83 (49)
--- --- ---
Income from continuing operations, net of tax $39 $31 $5 $47 $32 26 22 $122 $240 (49)
=== === === === === ==== ====
Selected performance metrics:
Period-end loans held for investment $8,186 $7,957 $8,219 $7,623 $8,172 3% - $8,186 $8,172 -
Average loans held for investment 8,127 8,048 7,977 7,811 7,714 1 5% 7,992 7,684 4%
Average yield on loans held for investment(5) 15.96% 14.88% 14.29% 14.93% 16.31% 108 bps (35) bps 15.02% 16.53% (151) bps
Total net revenue margin(6) 17.21 14.77 14.36 16.31 17.55 244 (34) 15.66 17.95 (229)
Net charge-off rate 2.76 1.80 2.65 2.80 3.34 96 (58) 2.50 3.69 (119)
30+ day performing delinquency rate 2.98 2.81 2.65 2.81 2.94 17 4 2.98 2.94 4
30+ day delinquency rate 3.46 3.39 3.29 3.44 3.60 7 (14) 3.46 3.60 (14)
Nonperforming loan rate(1) 0.65 0.77 0.83 0.84 0.86 (12) (21) 0.65 0.86 (21)
Purchase volume(8) $6,610 $6,098 $6,361 $5,358 $5,250 8% 26% $24,427 $16,034 52%
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary-Consumer Banking Business
2015 Q4 vs. Year Ended
----------- ----------
2015 2015 2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2015 2014 2014
-------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Consumer Banking
----------------
Earnings:
Net interest income $1,434 $1,443 $1,444 $1,434 $1,459 (1)% (2)% $5,755 $5,748 -
Non-interest income 182 174 196 158 185 5 (2) 710 684 4%
--- --- --- --- --- --- ---
Total net revenue 1,616 1,617 1,640 1,592 1,644 - (2) 6,465 6,432 1
Provision for credit losses 240 188 185 206 222 28 8 819 703 17
Non-interest expense 1,057 1,001 998 970 1,045 6 1 4,026 3,869 4
----- ----- --- --- ----- ----- -----
Income from continuing operations before income taxes 319 428 457 416 377 (25) (15) 1,620 1,860 (13)
Income tax provision 115 155 166 150 135 (26) (15) 586 665 (12)
--- --- --- --- --- --- ---
Income from continuing operations, net of tax $204 $273 $291 $266 $242 (25) (16) $1,034 $1,195 (13)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $70,372 $70,990 $71,176 $71,379 $71,439 (1)% (1)% $70,372 $71,439 (1)%
Average loans held for investment 70,704 71,097 71,367 71,441 71,254 (1) (1) 71,150 70,964 -
Average yield on loans held for investment(5) 6.25% 6.25% 6.27% 6.26% 6.45% - (20) bps 6.26% 6.26% -
Auto loan originations $4,977 $5,590 $5,433 $5,185 $5,390 (11)% (8)% $21,185 $20,903 1%
Period-end deposits 172,702 170,866 170,321 172,502 168,078 1 3 172,702 168,078 3
Average deposits 171,521 170,816 171,076 169,593 167,727 - 2 170,757 168,623 1
Average deposit interest rate 0.54% 0.56% 0.57% 0.57% 0.57% (2) bps (3) bps 0.56% 0.57% (1) bps
Core deposit intangible amortization $17 $19 $21 $22 $24 (11)% (29)% $79 $108 (27)%
Net charge-off rate 1.32% 1.14% 0.76% 0.89% 1.20% 18 bps 12 bps 1.03% 0.95% 8 bps
30+ day performing delinquency rate 4.05 3.62 3.24 2.95 3.60 43 45 4.05 3.60 45
30+ day delinquency rate 4.67 4.22 3.80 3.46 4.23 45 44 4.67 4.23 44
Nonperforming loan rate(1) 0.80 0.76 0.70 0.67 0.77 4 3 0.80 0.77 3
Nonperforming asset rate(2) 1.10 1.05 0.98 0.95 1.06 5 4 1.10 1.06 4
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary-Commercial Banking Business
2015 Q4 vs. Year Ended
----------- ----------
2015 2015 2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2015 2014 2014
-------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Commercial Banking
------------------
Earnings:
Net interest income $484 $454 $466 $461 $455 7% 6% $1,865 $1,751 7%
Non-interest income 142 108 123 114 132 31 8 487 450 8
--- --- --- --- --- --- ---
Total net revenue(3) 626 562 589 575 587 11 7 2,352 2,201 7
Provision for credit losses 118 75 49 60 32 57 269 302 93 225
Non-interest expense 342 272 270 272 293 26 17 1,156 1,083 7
--- --- --- --- ---
Income from continuing operations before income taxes 166 215 270 243 262 (23) (37) 894 1,025 (13)
Income tax provision 60 78 98 88 93 (23) (35) 324 366 (11)
Income from continuing operations, net of tax $106 $137 $172 $155 $169 (23) (37) $570 $659 (14)
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $63,266 $52,112 $51,231 $50,741 $50,890 21% 24% $63,266 $50,890 24%
Average loans held for investment 57,379 51,592 50,976 51,070 50,339 11 14 52,769 47,899 10
Average yield on loans held for investment(3)(5) 3.18% 3.21% 3.26% 3.22% 3.33% (3) bps (15) bps 3.21% 3.42% (21) bps
Period-end deposits $34,257 $32,751 $32,909 $32,575 $31,954 5% 7% $34,257 $31,954 7%
Average deposits 33,797 32,806 32,778 32,845 32,363 3 4 33,058 31,752 4
Average deposit interest rate 0.26% 0.25% 0.25% 0.24% 0.24% 1 bps 2 bps 0.25% 0.24% 1 bps
Core deposit intangible amortization $4 $3 $4 $4 $5 33% (20)% $15 $21 (29)%
Net charge-off rate 0.03% 0.26% 0.05% 0.02% 0.07% (23) bps (4) bps 0.09% 0.02% 7 bps
Nonperforming loan rate(1)(10) 0.87 0.87 0.90 0.31 0.34 - 53 0.87 0.34 53
Nonperforming asset rate(2)(10) 0.87 0.87 0.91 0.31 0.36 - 51 0.87 0.36 51
Risk category:(9)(10)
Noncriticized $60,701 $49,934 $49,001 $48,938 $49,284 22% 23% $60,701 $49,284 23%
Criticized performing 2,015 1,725 1,767 1,645 1,431 17 41 2,015 1,431 41
Criticized nonperforming 550 453 463 158 175 21 ** 550 175 **
--- --- --- --- --- --- ---
Total commercial loans $63,266 $52,112 $51,231 $50,741 $50,890 21 24 $63,266 $50,890 24
======= ======= ======= ======= ======= ======= =======
Risk category as a percentage of period-end commercial loans held for
investment:(10)
Noncriticized 95.9% 95.8% 95.7% 96.5% 96.9% 10 bps (100) bps 95.9% 96.9% (100) bps
Criticized performing 3.2 3.3 3.4 3.2 2.8 (10) 40 3.2 2.8 40
Criticized nonperforming 0.9 0.9 0.9 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 Q4 vs. Year Ended
----------- ----------
2015 2015 2015 2015 2014 2015 2014 2015 vs.
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4 Q3 Q4 2015 2014 2014
--- --- --- --- --- --- --- ---- ---- ----
Other
-----
Earnings:
Net interest income (expense) $47 $(3) $(6) $15 $45 ** 4% $53 $9 **
Non-interest income 7 - (29) (17) (1) ** ** (39) 27 **
--- --- --- --- --- --- ---
Total net revenue (loss)(3) 54 (3) (35) (2) 44 ** 23 14 36 (61)%
Benefit for credit losses - (2) - - (1) ** ** (2) (5) (60)
Non-interest expense(11) 60 39 182 31 58 54% 3 312 165 89
--- --- --- --- --- --- ---
Loss from continuing operations before income taxes (6) (40) (217) (33) (13) (85) (54) (296) (124) 139
Income tax benefit (51) (78) (143) (78) (53) (35) (4) (350) (214) 64
--- --- ---- --- --- ---- ----
Income (loss) from continuing operations, net of tax $45 $38 $(74) $45 $40 18 13 $54 $90 (40)
=== === ==== === === === ===
Selected performance metrics:
Period-end loans held for investment $88 $92 $95 $104 $111 (4)% (21)% $88 $111 (21)%
Average loans held for investment 82 88 93 102 103 (7) (20) 91 116 (22)
Period-end deposits 10,762 9,286 5,550 5,363 5,516 16 95 10,762 5,516 95
Average deposits 10,581 7,352 5,289 5,413 5,265 44 101 7,174 5,300 35
Total
-----
Earnings:
Net interest income $4,961 $4,760 $4,537 $4,576 $4,656 4% 7% $18,834 $17,818 6%
Non-interest income 1,233 1,140 1,135 1,071 1,157 8 7 4,579 4,472 2
----- ----- ----- ----- ----- ----- -----
Total net revenue 6,194 5,900 5,672 5,647 5,813 5 7 23,413 22,290 5
Provision for credit losses 1,380 1,092 1,129 935 1,109 26 24 4,536 3,541 28
Non-interest expense 3,480 3,160 3,307 3,049 3,284 10 6 12,996 12,180 7
----- ----- ----- ----- ----- ------ ------
Income from continuing operations before income taxes 1,334 1,648 1,236 1,663 1,420 (19) (6) 5,881 6,569 (10)
Income tax provision 426 530 384 529 450 (20) (5) 1,869 2,146 (13)
--- --- --- --- --- ----- -----
Income from continuing operations, net of tax $908 $1,118 $852 $1,134 $970 (19) (6) $4,012 $4,423 (9)
==== ====== ==== ====== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $229,851 $213,329 $209,705 $203,978 $208,316 8% 10% $229,851 $208,316 10%
Average loans held for investment 220,052 211,227 206,337 205,194 203,436 4 8 210,745 197,925 6
Period-end deposits 217,721 212,903 208,780 210,440 205,548 2 6 217,721 205,548 6
Average deposits 215,899 210,974 209,143 207,851 205,355 2 5 210,989 205,675 3
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.
(8) Includes credit card purchase transactions, net
of returns for loans classified as held for
investment and held for sale. Excludes cash
advance and balance transfer transactions.
(9) Criticized exposures correspond to the "Special
Mention," "Substandard" and "Doubtful" asset
categories defined by bank regulatory
authorities.
(10) The GE Healthcare acquisition included $835
million of acquired loans that are being
accounted for under ASC 310-30 30 (formerly
"SOP 03-3") due to their deterioration in
credit quality since origination. Because we
expect to collect all of our recorded
investments in these loans, they are
classified and presented as performing and
noncriticized in these tables. 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 SOP 03-3 loans to be classified based on
their risk ratings, both our nonperforming
loan rate and nonperforming asset rate for
Commercial Banking in Q4 2015 would be 0.93%;
our Criticized performing balance and
percentage would increase to $2.8 billion and
4.45%, respectively; Criticized nonperforming
balance and percentage would increase to $587
million and 0.93%, respectively, with
corresponding decreases to the balance and
percentage of our Noncriticized category.
(11) 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) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Regulatory Capital Metrics
--------------------------
Common equity Tier 1 capital $29,544 $30,109 $29,804 $29,671 $29,534
Tier 1 capital 32,838 33,402 32,614 31,493 31,355
Total capital(2) 38,846 37,694 37,115 35,878 35,879
Risk-weighted assets(3) 266,408 249,081 246,106 238,011 236,944
Average assets for the leverage ratio 309,037 300,010 293,291 295,556 291,243
-------------------------------------
Capital Ratios
--------------
Common equity Tier 1 capital ratio(4) 11.1% 12.1% 12.1% 12.5% 12.5%
Tier 1 capital ratio(5) 12.3 13.4 13.3 13.2 13.2
Total capital ratio(6) 14.6 15.1 15.1 15.1 15.1
Tier 1 leverage ratio(7) 10.6 11.1 11.1 10.7 10.8
Tangible common equity ("TCE") ratio(8) 8.9 9.8 9.7 9.8 9.5
Reconciliation of Non-GAAP Measures
We report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and tangible assets. The tables below provide the details of the calculation of our non-GAAP capital measures and regulatory capital. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to
assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
2015 2015 2015 2015 2014
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4
--- --- --- --- ---
Tangible Common Equity (Period End)
----------------------------------
Stockholders' equity $47,284 $47,685 $46,659 $45,730 $45,053
Goodwill and intangible assets(9) (15,701) (15,153) (15,240) (15,307) (15,383)
Noncumulative perpetual preferred stock(10) (3,294) (3,294) (2,810) (1,822) (1,822)
------ ------
Tangible common equity $28,289 $29,238 $28,609 $28,601 $27,848
======= ======= ======= ======= =======
Tangible Common Equity (Average)
-------------------------------
Average stockholders' equity $48,712 $48,456 $47,255 $46,397 $45,576
Average goodwill and intangible assets(9) (15,316) (15,183) (15,256) (15,339) (15,437)
Average noncumulative perpetual preferred stock(10) (3,294) (3,049) (2,377) (1,822) (1,681)
Average tangible common equity $30,102 $30,224 $29,622 $29,236 $28,458
======= ======= ======= ======= =======
2015 2015 2015 2015 2014
(Dollars in millions) (unaudited) Q4 Q3 Q2 Q1 Q4
-------------------------------- --- --- --- --- ---
Tangible Assets (Period End)
---------------------------
Total assets(11) $334,048 $313,700 $310,510 $306,224 $308,167
Goodwill and intangible assets(9) (15,701) (15,153) (15,240) (15,307) (15,383)
-------
Tangible assets(11) $318,347 $298,547 $295,270 $290,917 $292,784
======== ======== ======== ======== ========
Tangible Assets (Average)
------------------------
Average total assets(11) $323,354 $313,822 $307,206 $309,401 $304,153
Average goodwill and intangible assets(9) (15,316) (15,183) (15,256) (15,339) (15,437)
-------
Average tangible assets(11) $308,038 $298,639 $291,950 $294,062 $288,716
======== ======== ======== ======== ========
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
(Dollars in millions) (unaudited) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Common equity excluding AOCI $44,606 $44,533 $44,246 $44,120 $43,661
Adjustments:
AOCI(12)(13) (254) 75 (128) (26) (69)
Goodwill(9) (14,296) (13,805) (13,809) (13,801) (13,805)
Intangible assets(9)(13) (393) (374) (413) (450) (243)
Other (119) (320) (92) (172) (10)
Common equity Tier 1 capital $29,544 $30,109 $29,804 $29,671 $29,534
======= ======= ======= ======= =======
Risk-weighted assets(3) $266,408 $249,081 $246,106 $238,011 $236,944
Common equity Tier 1 capital ratio(4) 11.1% 12.1% 12.1% 12.5% 12.5%
__________
(1) Regulatory capital metrics and
capital ratios as of the end of
Q4 2015 are preliminary and
therefore subject to change.
(2) Total 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 capital ratio is a
regulatory capital measure
calculated based on Tier 1
capital divided by risk-
weighted assets.
(6) Total capital ratio is a
regulatory capital measure
calculated based on Total
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-fourth-quarter-2015-net-income-of-920-million-or-158-per-share-300210061.html
SOURCE Capital One Financial Corporation
