CAPITAL ONE FINANCIAL CORPORATION MCLEAN, Va., July 20, 2017 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2017 of $1.0 billion, or $1.94 per diluted common share, compared with net income of $810 million, or $1.54 per diluted common share in the first quarter of 2017, and with net income of $942 million, or $1.69 per diluted common share in the second quarter of 2016. During the quarter, we incurred $12 million of costs related to our anticipated close of the Cabela's acquisition, which is subject to regulatory approval. Excluding this adjusting item, net income for the second quarter of 2017 was $1.96 per diluted common share((1)).
"We delivered another quarter of resilient growth across our businesses," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We're investing to grow and transform our company as banking goes digital, we're driving improving efficiency, and we are building an enduring customer franchise. We continue to be in a strong position to deliver attractive growth and returns, as well as significant capital distribution, subject to regulatory approval."
All comparisons below are for the second quarter of 2017 compared with the first quarter of 2017 unless otherwise noted.
Second Quarter 2017 Income Statement Summary:
-- Total net revenue increased 3 percent to $6.7 billion.
-- Total non-interest expense decreased 1 percent to $3.4 billion:
-- 2 percent decrease in operating expenses.
-- 10 percent increase in marketing.
-- Pre-provision earnings increased 6 percent to $3.3 billion((2)).
-- Provision for credit losses decreased 10 percent to $1.8 billion:
-- Net charge-offs of $1.6 billion.
-- $182 million reserve build.
-- Net interest margin flat at 6.88 percent.
-- Efficiency ratio of 50.92 percent:
-- Efficiency ratio excluding adjusting items was 50.75 percent((1)).
Second Quarter 2017 Balance Sheet Summary:
-- Common equity Tier 1 capital ratio under Basel III Standardized Approach
of 10.7 percent at June 30, 2017.
-- Period-end loans held for investment in the quarter increased $3.7
billion, or 2 percent, to $244.3 billion.
-- Domestic Card period-end loans increased $1.8 billion, or 2 percent,
to $92.9 billion.
-- Consumer Banking period-end loans increased $991 million, or 1
percent, to $75.0 billion:
-- Auto period-end loans increased $2.0 billion, or 4 percent, to
$51.8 billion.
-- Home loans period-end loans decreased $1.0 billion, or 5
percent, to $19.7 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking period-end loans increased $352 million, or 1
percent, to $67.7 billion.
-- Average loans held for investment in the quarter increased $736 million,
or less than 1 percent, to $242.2 billion.
-- Domestic Card average loans decreased $1.3 billion, or 1 percent, to
$91.8 billion.
-- Consumer Banking average loans increased $1.1 billion, or 2 percent,
to $74.5 billion:
-- Auto average loans increased $2.1 billion, or 4 percent, to
$50.8 billion.
-- Home loans average loans decreased $946 million, or 4 percent,
to $20.2 billion, driven by run-off of acquired portfolios.
-- Commercial Banking average loans increased $731 million, or 1
percent, to $67.7 billion.
-- Period-end total deposits decreased $1.4 billion, or less than 1
percent, to $239.8 billion, while average deposits increased $2.0
billion, or less than 1 percent, to $240.6 billion.
-- Interest-bearing deposits rate paid increased 5 basis points to 0.71
percent.
(1) Amounts excluding adjusting items are non-GAAP measures that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.
(2) Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on July 20, 2017 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us," then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through August 3, 2017 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, 2016.
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 $239.8 billion in deposits and $350.6 billion in total assets as of June 30, 2017. 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, Louisiana, Texas, Maryland, Virginia, New Jersey 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(1)(2)
Second Quarter 2017
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
Table 8: Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity 13
Business Segment Results
Table 9: Financial Summary-Business Segment Results 14
Table 10: Financial & Statistical Summary-Credit Card Business 15
Table 11: Financial & Statistical Summary-Consumer Banking Business 17
Table 12: Financial & Statistical Summary-Commercial Banking Business 18
Table 13: Financial & Statistical Summary-Other and Total 19
Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7-13) 20
Other
Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures 21
(1) The information contained in this Financial Supplement is preliminary and based on data available at the time
of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period
ended June 30, 2017 once it is filed with the Securities and Exchange Commission.
(2) This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to
investors and users of our financial information as they provide an alternate measurement of our performance
and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures
should not be viewed as a substitute for reported results determined in accordance with generally accepted
accounting principles in the U.S. ("GAAP"), nor are they necessarily comparable to non-GAAP measures that
may be presented by other companies.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary-Consolidated
2017 Q2 vs.
Six Months Ended June 30,
(Dollars in millions, except per share data and as noted) 2017 2017 2016 2016 2016 2017 2016 2017 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
--- --- --- --- --- --- --- ---- ---- ----
Income Statement
----------------
Net interest income $5,473 $5,474 $5,447 $5,277 $5,093 - 7% $10,947 $10,149 8%
Non-interest income 1,231 1,061 1,119 1,184 1,161 16% 6 2,292 2,325 (1)
----- ----- ----- -----
Total net revenue(1) 6,704 6,535 6,566 6,461 6,254 3 7 13,239 12,474 6
Provision for credit losses 1,800 1,992 1,752 1,588 1,592 (10) 13 3,792 3,119 22
Non-interest expense:
Marketing 435 396 575 393 415 10 5 831 843 (1)
Amortization of intangibles 61 62 101 89 95 (2) (36) 123 196 (37)
Operating expenses 2,918 2,976 3,003 2,879 2,785 (2) 5 5,894 5,479 8
----- ----- ----- ----- ----- -----
Total non-interest expense 3,414 3,434 3,679 3,361 3,295 (1) 4 6,848 6,518 5
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,490 1,109 1,135 1,512 1,367 34 9 2,599 2,837 (8)
Income tax provision 443 314 342 496 424 41 4 757 876 (14)
--- --- --- --- --- --- ---
Income from continuing operations, net of tax 1,047 795 793 1,016 943 32 11 1,842 1,961 (6)
Income (loss) from discontinued operations, net of tax(2) (11) 15 (2) (11) (1) ** ** 4 (6) **
--- --- --- --- --- --- ---
Net income 1,036 810 791 1,005 942 28 10 1,846 1,955 (6)
Dividends and undistributed earnings allocated to participating securities(3) (8) (5) (6) (6) (6) 60 33 (13) (12) 8
Preferred stock dividends (80) (53) (75) (37) (65) 51 23 (133) (102) 30
Net income available to common stockholders $948 $752 $710 $962 $871 26 9 $1,700 $1,841 (8)
==== ==== ==== ==== ==== ====== ======
Common Share Statistics
-----------------------
Basic earnings per common share:(3)
Net income from continuing operations $1.98 $1.53 $1.47 $1.94 $1.70 29% 16% $3.51 $3.57 (2)%
Income (loss) from discontinued operations (0.02) 0.03 - (0.02) - ** ** 0.01 (0.01) **
-----
Net income per basic common share $1.96 $1.56 $1.47 $1.92 $1.70 26 15 $3.52 $3.56 (1)
===== ===== ===== ===== ===== ===== =====
Diluted earnings per common share:(3)
Net income from continuing operations $1.96 $1.51 $1.45 $1.92 $1.69 30 16 $3.48 $3.53 (1)
Income (loss) from discontinued operations (0.02) 0.03 - (0.02) - ** ** 0.01 (0.01) **
Net income per diluted common share $1.94 $1.54 $1.45 $1.90 $1.69 26 15 $3.49 $3.52 (1)
===== ===== ===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic 484.0 482.3 483.5 501.1 511.7 - (5) 483.1 517.6 (7)
Diluted 488.1 487.9 489.2 505.9 516.5 - (5) 487.7 522.3 (7)
Common shares outstanding (period-end, in millions) 483.7 482.8 480.2 489.2 505.9 - (4) 483.7 505.9 (4)
Dividends paid per common share $0.40 $0.40 $0.40 $0.40 $0.40 - - $0.80 $0.80 -
Tangible book value per common share (period-end)(4) 60.94 58.66 57.76 59.00 57.84 4 5 60.94 57.84 5
2017 Q2 vs. Six Months Ended June 30,
(Dollars in millions) 2017 2017 2016 2016 2016 2017 2016 2017 vs.
--------------------
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
--- --- --- --- --- --- --- ---- ---- ----
Balance Sheet (Period-End)
-------------------------
Loans held for investment(5) $244,302 $240,588 $245,586 $238,019 $234,603 2% 4% $244,302 $234,603 4%
Interest-earning assets 319,286 316,712 321,807 313,431 307,163 1 4 319,286 307,163 4
Total assets 350,593 348,549 357,033 345,061 339,117 1 3 350,593 339,117 3
Interest-bearing deposits 213,810 214,818 211,266 200,416 195,635 - 9 213,810 195,635 9
Total deposits 239,763 241,182 236,768 225,981 221,059 (1) 8 239,763 221,059 8
Borrowings 49,954 48,439 60,460 59,820 59,181 3 (16) 49,954 59,181 (16)
Common equity 44,777 43,680 43,154 44,336 44,813 3 - 44,777 44,813 -
Total stockholders' equity 49,137 48,040 47,514 48,213 48,108 2 2 49,137 48,108 2
--------------------------
Balance Sheet (Average Balances)
-------------------------------
Loans held for investment(5) $242,241 $241,505 $240,027 $235,843 $230,379 - 5% $241,875 $228,557 6%
Interest-earning assets 318,078 318,358 317,853 310,987 302,764 - 5 318,215 301,106 6
Total assets 349,891 351,641 350,225 343,153 334,479 - 5 350,761 333,197 5
Interest-bearing deposits 214,412 212,973 206,464 196,913 195,641 1% 10 213,696 194,883 10
Total deposits 240,550 238,550 232,204 222,251 221,146 1 9 239,555 220,163 9
Borrowings 48,838 53,357 58,624 60,708 54,359 (8) (10) 51,085 54,060 (6)
Common equity 44,645 43,833 43,921 45,314 45,640 2 (2) 44,241 45,711 (3)
Total stockholders' equity 49,005 48,193 47,972 49,033 48,934 2 - 48,602 49,007 (1)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics-Consolidated
2017 Q2 vs. Six Months Ended June 30,
(Dollars in millions, except as noted) 2017 2017 2016 2016 2016 2017 2016 2017 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
--- --- --- --- --- --- --- ---- ---- ----
Performance Metrics
-------------------
Net interest income growth (period over period) - - 3% 4% 1% ** ** 8% 11% **
Non-interest income growth (period over period) 16% (5)% (5) 2 - ** ** (1) 5 **
Total net revenue growth (period over period) 3 - 2 3 1 ** ** 6 10 **
Total net revenue margin(6) 8.43 8.21 8.26 8.31 8.26 22 bps 17 bps 8.32 8.29 3 bps
Net interest margin(7) 6.88 6.88 6.85 6.79 6.73 - 15 6.88 6.74 14
Return on average assets 1.20 0.90 0.91 1.18 1.13 30 7 1.05 1.18 (13)
Return on average tangible assets(8) 1.25 0.95 0.95 1.24 1.18 30 7 1.10 1.24 (14)
Return on average common equity(9) 8.59 6.73 6.48 8.59 7.64 186 95 7.67 8.08 (41)
Return on average tangible common equity(10) 13.09 10.37 10.00 13.06 11.61 272 148 11.75 12.28 (53)
Non-interest expense as a percentage of average loans held for investment 5.64 5.69 6.13 5.70 5.72 (5) (8) 5.66 5.70 (4)
Efficiency ratio(11) 50.92 52.55 56.03 52.02 52.69 (163) (177) 51.73 52.25 (52)
Effective income tax rate for continuing operations 29.7 28.3 30.1 32.8 31.0 140 (130) 29.1 30.9 (180)
Employees (in thousands), period-end 49.9 48.4 47.3 46.5 46.1 3% 8% 49.9 46.1 8%
Credit Quality Metrics
----------------------
Allowance for loan and lease losses $7,170 $6,984 $6,503 $6,258 $5,881 3% 22% $7,170 $5,881 22%
Allowance as a percentage of loans held for investment 2.93% 2.90% 2.65% 2.63% 2.51% 3 bps 42 bps 2.93% 2.51% 42 bps
Net charge-offs $1,618 $1,510 $1,489 $1,240 $1,155 7% 40% $3,128 $2,333 34%
Net charge-off rate(12) 2.67% 2.50% 2.48% 2.10% 2.01% 17 bps 66 bps 2.59% 2.04% 55 bps
30+ day performing delinquency rate 2.69 2.61 2.93 2.71 2.47 8 22 2.69 2.47 22
30+ day delinquency rate 2.99 2.92 3.27 3.04 2.79 7 20 2.99 2.79 20
Capital Ratios(13)
-----------------
Common equity Tier 1 capital 10.7% 10.4% 10.1% 10.6% 10.9% 30 bps (20) bps 10.7% 10.9% (20) bps
Tier 1 capital 12.2 12.0 11.6 12.0 12.2 20 - 12.2 12.2 -
Total capital 14.9 14.7 14.3 14.7 14.4 20 50 14.9 14.4 50
Tier 1 leverage 10.3 9.9 9.9 10.1 10.2 40 10 10.3 10.2 10
Tangible common equity ("TCE")(14) 8.8 8.5 8.1 8.8 9.0 30 (20) 8.8 9.0 (20)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
2017 Q2 vs. Six Months Ended June 30,
2017 2017 2016 2016 2016 2017 2016 2017 vs.
(Dollars in millions, except per share data and as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
-------------------------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Interest income:
Loans, including loans held for sale $5,669 $5,626 $5,587 $5,383 $5,148 1% 10% $11,295 $10,233 10%
Investment securities 433 416 393 386 405 4 7 849 820 4
Other 26 28 29 25 18 (7) 44 54 35 54
Total interest income 6,128 6,070 6,009 5,794 5,571 1 10 12,198 11,088 10
----- ----- ----- ----- ----- ------ ------
Interest expense:
Deposits 382 353 332 306 292 8 31 735 575 28
Securitized debt obligations 82 69 65 56 47 19 74 151 95 59
Senior and subordinated notes 179 149 138 121 111 20 61 328 217 51
Other borrowings 12 25 27 34 28 (52) (57) 37 52 (29)
Total interest expense 655 596 562 517 478 10 37 1,251 939 33
--- --- --- --- --- ----- ---
Net interest income 5,473 5,474 5,447 5,277 5,093 - 7 10,947 10,149 8
Provision for credit losses 1,800 1,992 1,752 1,588 1,592 (10) 13 3,792 3,119 22
Net interest income after provision for credit losses 3,673 3,482 3,695 3,689 3,501 5 5 7,155 7,030 2
----- ----- ----- ----- ----- ----- -----
Non-interest income:(15)(16)
Service charges and other customer-related fees 418 371 412 417 393 13 6 789 816 (3)
Interchange fees, net 676 570 624 603 621 19 9 1,246 1,225 2
Net securities gains (losses) (4) - (4) 1 - ** ** (4) (8) (50)
Other 141 120 87 163 147 18 (4) 261 292 (11)
---
Total non-interest income 1,231 1,061 1,119 1,184 1,161 16 6 2,292 2,325 (1)
----- ----- ----- ----- ----- ----- -----
Non-interest expense:(15)(16)
Salaries and associate benefits 1,383 1,471 1,336 1,317 1,279 (6) 8 2,854 2,549 12
Occupancy and equipment 474 471 522 499 465 1 2 945 923 2
Marketing 435 396 575 393 415 10 5 831 843 (1)
Professional services 279 247 312 257 264 13 6 526 505 4
Communications and data processing 289 288 297 291 302 - (4) 577 582 (1)
Amortization of intangibles 61 62 101 89 95 (2) (36) 123 196 (37)
Other 493 499 536 515 475 (1) 4 992 920 8
--- --- --- --- --- --- ---
Total non-interest expense 3,414 3,434 3,679 3,361 3,295 (1) 4 6,848 6,518 5
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,490 1,109 1,135 1,512 1,367 34 9 2,599 2,837 (8)
Income tax provision 443 314 342 496 424 41 4 757 876 (14)
--- --- --- --- --- --- ---
Income from continuing operations, net of tax 1,047 795 793 1,016 943 32 11 1,842 1,961 (6)
Income (loss) from discontinued operations, net of tax(2) (11) 15 (2) (11) (1) ** ** 4 (6) **
--- --- --- --- --- --- ---
Net income 1,036 810 791 1,005 942 28 10 1,846 1,955 (6)
Dividends and undistributed earnings allocated to participating securities(3) (8) (5) (6) (6) (6) 60 33 (13) (12) 8
Preferred stock dividends (80) (53) (75) (37) (65) 51 23 (133) (102) 30
Net income available to common stockholders $948 $752 $710 $962 $871 26 9 $1,700 $1,841 (8)
==== ==== ==== ==== ==== ====== ======
2017 Q2 vs. Six Months Ended June 30,
2017 2017 2016 2016 2016 2017 2016 2017 vs.
(Dollars in millions, except per share data and as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
-------------------------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Basic earnings per common share:(3)
Net income from continuing operations $1.98 $1.53 $1.47 $1.94 $1.70 29% 16% $3.51 $3.57 (2)%
Income (loss) from discontinued operations (0.02) 0.03 - (0.02) - ** ** 0.01 (0.01) **
Net income per basic common share $1.96 $1.56 $1.47 $1.92 $1.70 26 15 $3.52 $3.56 (1)
===== ===== ===== ===== ===== ===== =====
Diluted earnings per common share:(3)
Net income from continuing operations $1.96 $1.51 $1.45 $1.92 $1.69 30 16 $3.48 $3.53 (1)
Income (loss) from discontinued operations (0.02) 0.03 - (0.02) - ** ** 0.01 (0.01) **
Net income per diluted common share $1.94 $1.54 $1.45 $1.90 $1.69 26 15 $3.49 $3.52 (1)
===== ===== ===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic common shares 484.0 482.3 483.5 501.1 511.7 - (5) 483.1 517.6 (7)
Diluted common shares 488.1 487.9 489.2 505.9 516.5 - (5) 487.7 522.3 (7)
Dividends paid per common share $0.40 $0.40 $0.40 $0.40 $0.40 - - $0.80 $0.80 -
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets
2017 Q2 vs.
-----------
2017 2017 2016 2016 2016 2017 2016
(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2
-------------------- --- --- --- --- --- --- ---
Assets:
Cash and cash equivalents:
Cash and due from banks $3,352 $3,489 $4,185 $3,350 $3,253 (4)% 3%
Interest-bearing deposits and other short-term investments 3,363 5,826 5,791 5,744 3,896 (42) (14)
----- ----- ----- ----- -----
Total cash and cash equivalents 6,715 9,315 9,976 9,094 7,149 (28) (6)
Restricted cash for securitization investors 300 486 2,517 287 265 (38) 13
Securities available for sale, at fair value 41,120 41,260 40,737 41,511 39,960 - 3
Securities held to maturity, at carrying value 27,720 26,170 25,712 25,019 25,120 6 10
Loans held for investment:(5)
Unsecuritized loans held for investment 214,864 211,038 213,824 206,763 202,778 2 6
Loans held in consolidated trusts 29,438 29,550 31,762 31,256 31,825 - (8)
------ ------ ------ ------ ------
Total loans held for investment 244,302 240,588 245,586 238,019 234,603 2 4
Allowance for loan and lease losses (7,170) (6,984) (6,503) (6,258) (5,881) 3 22
------ ------ ------ ------ ------
Net loans held for investment 237,132 233,604 239,083 231,761 228,722 2 4
Loans held for sale, at lower of cost or fair value 777 735 1,043 994 1,220 6 (36)
Premises and equipment, net 3,825 3,727 3,675 3,561 3,556 3 8
Interest receivable 1,346 1,368 1,351 1,251 1,236 (2) 9
Goodwill 14,524 14,521 14,519 14,493 14,495 - -
Other assets 17,134 17,363 18,420 17,090 17,394 (1) (1)
------ ------ ------ ------ ------
Total assets $350,593 $348,549 $357,033 $345,061 $339,117 1 3
======== ======== ======== ======== ========
2017 Q2 vs.
-----------
2017 2017 2016 2016 2016 2017 2016
(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2
-------------------- --- --- --- --- --- --- ---
Liabilities:
Interest payable $376 $260 $327 $237 $301 45% 25%
Deposits:
Non-interest-bearing deposits 25,953 26,364 25,502 25,565 25,424 (2) 2
Interest-bearing deposits 213,810 214,818 211,266 200,416 195,635 - 9
------- ------- ------- ------- -------
Total deposits 239,763 241,182 236,768 225,981 221,059 (1) 8
Securitized debt obligations 18,358 18,528 18,826 18,411 16,130 (1) 14
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase 958 1,046 992 1,079 999 (8) (4)
Senior and subordinated notes 28,478 26,405 23,431 24,001 21,872 8 30
Other borrowings 2,160 2,460 17,211 16,329 20,180 (12) (89)
----- ----- ------ ------ ------
Total other debt 31,596 29,911 41,634 41,409 43,051 6 (27)
Other liabilities 11,363 10,628 11,964 10,810 10,468 7 9
------ ------ ------ ------ ------
Total liabilities 301,456 300,509 309,519 296,848 291,009 - 4
------- ------- ------- ------- -------
Stockholders' equity:
Preferred stock 0 0 0 0 0 - -
Common stock 7 7 7 7 7 - -
Additional paid-in capital, net 31,413 31,326 31,157 30,439 29,786 - 5
Retained earnings 31,086 30,326 29,766 29,245 28,479 3 9
Accumulated other comprehensive income (loss) (683) (934) (949) 121 241 (27) **
Treasury stock, at cost (12,686) (12,685) (12,467) (11,599) (10,405) - 22
------- ------- ------- ------- -------
Total stockholders' equity 49,137 48,040 47,514 48,213 48,108 2 2
------ ------ ------ ------ ------
Total liabilities and stockholders' equity $350,593 $348,549 $357,033 $345,061 $339,117 1 3
======== ======== ======== ======== ========
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1-4)
(1) Total net revenue was reduced by $313 million in Q2 2017, $321 million in both Q1 2017 and Q4 2016, $289 million in Q3 2016 and $244 million in Q2 2016 for the estimated uncollectible amount of billed finance
charges and fees and related losses
(2) The provision (benefit) for mortgage representation and warranty losses included the following activity:
2017 2017 2016 2016 2016
(Dollars in millions) Q2 Q1 Q4 Q3 Q2
-------------------- --- --- --- --- ---
Provision (benefit) for mortgage representation and warranty losses before income taxes:
Recorded in continuing operations $ - $(25) $ - $ - $(1)
Recorded in discontinued operations 6 (67) (2) 18 2
--- --- --- --- ---
Total provision (benefit) for mortgage representation and warranty losses before income taxes $6 $(92) $(2) $18 $1
=== ==== === === ===
The mortgage representation and warranty reserve was $521 million as of June 30, 2017, $516 million as of March 31, 2017, $630 million as of December 31, 2016, $632 million as of September 30, 2016 and $614
million as of June 30, 2016.
(3) Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-
date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional
information on our non-GAAP measures.
(4) Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 15: Calculation of Regulatory Capital Measures and
Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(5) 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:
2017 2017 2016 2016 2016
(Dollars in millions) Q2 Q1 Q4 Q3 Q2
-------------------- --- --- --- --- ---
PCI loans:
Period-end unpaid principal balance $13,599 $14,838 $15,896 $17,011 $18,256
Period-end loans held for investment 12,895 14,102 15,071 16,149 17,358
Average loans held for investment 13,305 14,433 15,443 16,529 17,783
(6) Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(7) Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(8) Return on average tangible assets is a non-GAAP measure calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15:
Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(9) Return on average common equity is calculated based on annualized (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.
(10) Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized (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. Our calculation of ROTCE may not be comparable to similarly-titled measures.
reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(11) Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15:
Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(12) Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(13) Capital ratios as of the end of Q2 2017 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the
calculation of each of these ratios.
(14) TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information
on non-GAAP measures.
(15) We made certain Non-interest income and Non-interest expense reclassifications in Q4 2016. The changes were primarily related to a reclassification of certain consumer and commercial banking income from Other to
Service charges and other customer-related fees within Non-interest income, and a reclassification of certain system processing costs from Professional services to Communications and data processing within Non-
interest expense. We also consolidated the Non-interest income presentation of Other-than-temporary impairment ("OTTI") with net realized gains or losses from investment securities into a new Net securities gains
(losses) line. These reclassifications were made to better reflect the nature of income earned and expenses incurred. All prior period amounts presented have been reclassified to conform to the current period
presentation.
(16) The primary net effects of the reclassifications discussed in footnote 15 above for Q2 2016 and the six months ended June 30, 2016, compared to previously reported results were (i) an increase to Service charges and
other customer-related fees of $22 million and $41 million, respectively; (ii) a decrease to Other non-interest income of $29 million and $56 million, respectively; and (iii) increases to Communications and data processing
expense of $40 million and $77 million, respectively, with corresponding decreases to Professional services.
** Not meaningful.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
2017 Q2 2017 Q1 2016 Q2
------- ------- -------
Average Balance Interest Income/ Yield/ Average Balance Interest Income/ Yield/ Average Balance Interest Income/ Yield/
Expense(1) Rate(1) Expense(1) Rate(1) Expense(1) Rate(1)
--------- ------ --------- ------ --------- ------
(Dollars in millions, except as noted)
-------------------------------------
Interest-earning assets:
Loans, including loans held for sale $242,967 $5,669 9.33% $242,249 $5,626 9.29% $231,496 $5,148 8.90%
Investment securities 68,857 433 2.52 68,418 416 2.43 65,754 405 2.46
Cash equivalents and other 6,254 26 1.66 7,691 28 1.46 5,514 18 1.31
Total interest-earning assets $318,078 $6,128 7.71 $318,358 $6,070 7.63 $302,764 $5,571 7.36
-------- ------ -------- ------ -------- ------
Interest-bearing liabilities:
Interest-bearing deposits $214,412 $382 0.71 $212,973 $353 0.66 $195,641 $292 0.60
Securitized debt obligations 18,400 82 1.78 17,176 69 1.61 15,226 47 1.23
Senior and subordinated notes 27,821 179 2.57 24,804 149 2.40 21,717 111 2.04
Other borrowings and liabilities 3,656 12 1.31 12,356 25 0.81 18,255 28 0.61
----- ------
Total interest-bearing liabilities $264,289 $655 0.99 $267,309 $596 0.89 $250,839 $478 0.76
-------- ---- ---- -------- ---- ---- -------- ---- ----
Net interest income/spread $5,473 6.72 $5,474 6.74 $5,093 6.60
====== ====== ======
Impact of non-interest-bearing funding 0.16 0.14 0.13
----
Net interest margin 6.88% 6.88% 6.73%
==== ==== ====
Six Months Ended June 30,
2017 2016
Average Balance Interest Income/ Yield/ Average Balance Interest Income/ Yield/
Expense(1) Rate(1) Expense(1) Rate(1)
--------- ------ --------- ------
(Dollars in millions, except as noted)
-------------------------------------
Interest-earning assets:
Loans, including loans held for sale $242,610 $11,295 9.31% $229,534 $10,233 8.92%
Investment securities 68,637 849 2.47 65,455 820 2.51
Cash equivalents and other 6,968 54 1.55 6,117 35 1.14
Total interest-earning assets $318,215 $12,198 7.67 $301,106 $11,088 7.36
-------- ------- -------- -------
Interest-bearing liabilities:
Interest-bearing deposits $213,696 $735 0.69 $194,883 $575 0.59
Securitized debt obligations 17,791 151 1.70 15,293 95 1.24
Senior and subordinated notes 26,321 328 2.49 21,855 217 1.99
Other borrowings and liabilities 7,981 37 0.93 17,716 52 0.59
---
Total interest-bearing liabilities $265,789 $1,251 0.94 $249,747 $939 0.75
-------- ------ ---- -------- ---- ----
Net interest income/spread $10,947 6.73 $10,149 6.61
======= =======
Impact of non-interest-bearing funding 0.15 0.13
---- ----
Net interest margin 6.88% 6.74%
==== ====
__________
(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
2017 Q2 vs. Six Months Ended June 30,
----------- -------------------------
2017 2017 2016 2016 2016 2017 2016 2017 2016 2017 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2016
(Dollars in millions, except as noted)
Loans Held For Investment (Period-End)
-------------------------------------
Credit card:
Domestic credit card $92,866 $91,092 $97,120 $90,955 $88,581 2% 5% $92,866 $88,581 5%
International card businesses 8,724 8,121 8,432 8,246 8,323 7 5 8,724 8,323 5
----- ----- ----- ----- ----- ----- -----
Total credit card 101,590 99,213 105,552 99,201 96,904 2 5 101,590 96,904 5
------- ------ ------- ------ ------ ------- ------
Consumer banking:
Auto 51,765 49,771 47,916 46,311 44,502 4 16 51,765 44,502 16
Home loan 19,724 20,738 21,584 22,448 23,358 (5) (16) 19,724 23,358 (16)
Retail banking 3,484 3,473 3,554 3,526 3,555 - (2) 3,484 3,555 (2)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 74,973 73,982 73,054 72,285 71,415 1 5 74,973 71,415 5
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 27,428 27,218 26,609 26,507 26,341 1 4 27,428 26,341 4
Commercial and industrial 39,801 39,638 39,824 39,432 39,313 - 1 39,801 39,313 1
------ ------ ------ ------ ------ ------ ------
Total commercial lending 67,229 66,856 66,433 65,939 65,654 1 2 67,229 65,654 2
Small-ticket commercial real estate 443 464 483 518 548 (5) (19) 443 548 (19)
--- --- --- --- --- --- ---
Total commercial banking 67,672 67,320 66,916 66,457 66,202 1 2 67,672 66,202 2
------ ------ ------ ------ ------ ------ ------
Other loans 67 73 64 76 82 (8) (18) 67 82 (18)
Total loans held for investment $244,302 $240,588 $245,586 $238,019 $234,603 2 4 $244,302 $234,603 4
======== ======== ======== ======== ======== ======== ========
Loans Held For Investment (Average)
----------------------------------
Credit card:
Domestic credit card $91,769 $93,034 $92,623 $89,763 $85,981 (1)% 7% $92,398 $85,564 8%
International card businesses 8,274 8,135 8,168 8,253 8,401 2 (2) 8,205 8,120 1
----- ----- ----- ----- ----- ----- -----
Total credit card 100,043 101,169 100,791 98,016 94,382 (1) 6 100,603 93,684 7
------- ------- ------- ------ ------ ------- ------
Consumer banking:
Auto 50,803 48,673 47,126 45,355 43,605 4 17 49,743 42,784 16
Home loan 20,203 21,149 21,984 22,852 23,835 (4) (15) 20,674 24,308 (15)
Retail banking 3,463 3,509 3,549 3,520 3,548 (1) (2) 3,486 3,550 (2)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 74,469 73,331 72,659 71,727 70,988 2 5 73,903 70,642 5
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 27,401 26,587 26,445 26,154 25,661 3 7 26,997 25,338 7
Commercial and industrial 39,815 39,877 39,573 39,346 38,713 - 3 39,845 38,237 4
------ ------ ------ ------ ------ ------ ------
Total commercial lending 67,216 66,464 66,018 65,500 64,374 1 4 66,842 63,575 5
Small-ticket commercial real estate 453 474 497 534 564 (4) (20) 463 581 (20)
--- --- --- --- --- --- ---
Total commercial banking 67,669 66,938 66,515 66,034 64,938 1 4 67,305 64,156 5
------ ------ ------ ------ ------ ------ ------
Other loans 60 67 62 66 71 (10) (15) 64 75 (15)
Total average loans held for investment $242,241 $241,505 $240,027 $235,843 $230,379 - 5 $241,875 $228,557 6
======== ======== ======== ======== ======== ======== ========
2017 Q2 vs. Six Months Ended June 30,
2017 2017 2016 2016 2016 2017 2016 2017 2016 2017 vs.
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2016
--- --- --- --- --- --- --- ----
Net Charge-Off (Recovery) Rates
-------------------------------
Credit card:
Domestic credit card 5.11% 5.14% 4.66% 3.74% 4.07% (3) bps 104 bps 5.12% 4.12% 100 bps
International card businesses 4.08 3.69 3.35 3.18 3.54 39 54 3.88 3.39 49
Total credit card 5.02 5.02 4.56 3.70 4.02 - 100 5.02 4.05 97
Consumer banking:
Auto(1) 1.70 1.64 2.07 1.85 1.20 6 50 1.67 1.39 28
Home loan 0.04 0.03 0.08 0.03 0.09 1 (5) 0.03 0.07 (4)
Retail banking 1.71 1.92 1.73 1.75 1.26 (21) 45 1.81 1.31 50
Total consumer banking(1) 1.25 1.19 1.45 1.26 0.83 6 42 1.22 0.93 29
Commercial banking:
Commercial and multifamily real estate 0.03 - (0.02) 0.01 (0.02) ** ** 0.02 (0.02) **
Commercial and industrial 1.34 0.22 0.80 1.09 0.62 112 72 0.78 0.56 22
Total commercial lending 0.81 0.13 0.47 0.66 0.37 68 44 0.47 0.33 14
Small-ticket commercial real estate (0.22) 1.05 (0.02) 0.74 0.33 ** ** 0.43 0.23 20
Total commercial banking 0.80 0.14 0.47 0.66 0.37 66 43 0.47 0.33 14
Total net charge-offs 2.67 2.50 2.48 2.10 2.01 17 66 2.59 2.04 55
---------------------
30+ Day Performing Delinquency Rates
------------------------------------
Credit card:
Domestic credit card 3.63% 3.71% 3.95% 3.68% 3.14% (8) bps 49 bps 3.63% 3.14% 49 bps
International card businesses 3.28 3.39 3.36 3.33 3.24 (11) 4 3.28 3.24 4
Total credit card 3.60 3.68 3.91 3.65 3.15 (8) 45 3.60 3.15 45
Consumer banking:
Auto 5.40 5.03 6.12 5.67 5.59 37 (19) 5.40 5.59 (19)
Home loan 0.14 0.15 0.20 0.19 0.14 (1) - 0.14 0.14 -
Retail banking 0.54 0.59 0.70 0.59 0.62 (5) (8) 0.54 0.62 (8)
Total consumer banking 3.79 3.45 4.10 3.72 3.56 34 23 3.79 3.56 23
----------------------
Nonperforming Loans and Nonperforming Assets Rates(2)(3)
-------------------------------------------------------
Credit card:
International card businesses 0.37% 0.47% 0.50% 0.53% 0.53% (10) bps (16) bps 0.37% 0.53% (16) bps
Total credit card 0.03 0.04 0.04 0.04 0.05 (1) (2) 0.03 0.05 (2)
Consumer banking:
Auto 0.53 0.36 0.47 0.43 0.38 17 15 0.53 0.38 15
Home loan 1.31 1.27 1.26 1.23 1.24 4 7 1.31 1.24 7
Retail banking 0.96 0.82 0.86 1.05 0.89 14 7 0.96 0.89 7
Total consumer banking 0.75 0.64 0.72 0.71 0.69 11 6 0.75 0.69 6
Commercial banking:
Commercial and multifamily real estate 0.13 0.13 0.11 0.08 0.10 - 3 0.13 0.10 3
Commercial and industrial 1.62 2.02 2.48 2.44 2.58 (40) (96) 1.62 2.58 (96)
Total commercial lending 1.01 1.25 1.53 1.49 1.59 (24) (58) 1.01 1.59 (58)
Small-ticket commercial real estate 1.89 1.65 0.85 2.13 1.59 24 30 1.89 1.59 30
Total commercial banking 1.01 1.25 1.53 1.50 1.59 (24) (58) 1.01 1.59 (58)
Total nonperforming loans 0.53 0.57 0.65 0.66 0.68 (4) (15) 0.53 0.68 (15)
Total nonperforming assets 0.60 0.66 0.76 0.77 0.80 (6) (20) 0.60 0.80 (20)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity
Three Months Ended June 30, 2017
Credit Card Consumer Banking
(Dollars in millions) Domestic Card International Total Credit Commercial
Card Card Banking
Businesses Auto Home Retail Total Other(4) Total
Loan Banking Consumer
Banking
--- -------
Allowance for loan and lease losses:
Balance as of March 31, 2017 $4,670 $388 $5,058 $1,028 $60 $75 $1,163 $761 $2 $6,984
Charge-offs (1,454) (118) (1,572) (369) (3) (18) (390) (140) - (2,102)
Recoveries 282 34 316 154 1 3 158 4 6 484
--- --- --- --- --- --- --- --- --- ---
Net charge-offs (1,172) (84) (1,256) (215) (2) (15) (232) (136) 6 (1,618)
Provision (benefit) for loan and lease losses 1,327 70 1,397 253 1 14 268 141 (5) 1,801
Allowance build (release) for loan and lease losses 155 (14) 141 38 (1) (1) 36 5 1 183
Other changes(5) - 11 11 - - - - (8) - 3
Balance as of June 30, 2017 4,825 385 5,210 1,066 59 74 1,199 758 3 7,170
----- --- ----- ----- --- --- ----- --- --- -----
Reserve for unfunded lending commitments:
Balance as of March 31, 2017 - - - - - 7 7 133 - 140
Benefit for losses on unfunded lending commitments - - - - - - - (1) - (1)
Balance as of June 30, 2017 - - - - - 7 7 132 - 139
Combined allowance and reserve as of June 30, 2017 $4,825 $385 $5,210 $1,066 $59 $81 $1,206 $890 $3 $7,309
====== ==== ====== ====== === === ====== ==== === ======
Six Months Ended June 30, 2017
Credit Card Consumer Banking
(Dollars in millions) Domestic Card International Total Credit Commercial
Card Card Banking
Businesses Auto Home Retail Total Other(4) Total
Loan Banking Consumer
Banking
--- -------
Allowance for loan and lease losses:
Balance as of December 31, 2016 $4,229 $377 $4,606 $957 $65 $80 $1,102 $793 $2 $6,503
Charge-offs (2,938) (235) (3,173) (708) (7) (39) (754) (166) - (4,093)
Recoveries 570 76 646 294 3 7 304 7 8 965
--- --- --- --- --- --- --- --- --- ---
Net charge-offs (2,368) (159) (2,527) (414) (4) (32) (450) (159) 8 (3,128)
Provision (benefit) for loan and lease losses 2,964 150 3,114 523 (2) 26 547 135 (7) 3,789
Allowance build (release) for loan and lease losses 596 (9) 587 109 (6) (6) 97 (24) 1 661
Other changes(5) - 17 17 - - - - (11) - 6
Balance as of June 30, 2017 4,825 385 5,210 1,066 59 74 1,199 758 3 7,170
----- --- ----- ----- --- --- ----- --- --- -----
Reserve for unfunded lending commitments:
Balance as of December 31, 2016 - - - - - 7 7 129 - 136
Provision for losses on unfunded lending commitments - - - - - - - 3 - 3
Balance as of June 30, 2017 - - - - - 7 7 132 - 139
Combined allowance and reserve as of June 30, 2017 $4,825 $385 $5,210 $1,066 $59 $81 $1,206 $890 $3 $7,309
====== ==== ====== ====== === === ====== ==== === ======
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial Summary-Business Segment Results
Three Months Ended June 30, 2017 Six Months Ended June 30, 2017
(Dollars in millions) Credit Card Consumer Commercial Other Total Credit Card Consumer Commercial
Banking Banking Banking Banking Other Total
-------------------- ----------- --------- ----------- ----- ----- ----------- --------- ----------- ----- -----
Net interest income $3,294 $1,578 $569 $32 $5,473 $6,640 $3,095 $1,135 $77 $10,947
Non-interest income 875 183 183 (10) 1,231 1,613 378 341 (40) 2,292
--- --- --- --- ----- --- --- --- -----
Total net revenue(6) 4,169 1,761 752 22 6,704 8,253 3,473 1,476 37 13,239
Provision (benefit) for credit losses 1,397 268 140 (5) 1,800 3,114 547 138 (7) 3,792
Non-interest expense 1,918 1,059 381 56 3,414 3,847 2,101 772 128 6,848
----- ----- --- --- ----- ----- ----- --- --- -----
Income (loss) from continuing operations before income taxes 854 434 231 (29) 1,490 1,292 825 566 (84) 2,599
Income tax provision (benefit) 301 158 85 (101) 443 468 301 207 (219) 757
--- ---
Income from continuing operations, net of tax $553 $276 $146 $72 $1,047 $824 $524 $359 $135 $1,842
==== ==== ==== === ====== ==== ==== ==== ==== ======
Three Months Ended March 31, 2017
(Dollars in millions) Credit Card Consumer Commercial
Banking Banking Other Total
-------------------- ----------- --------- ----------- ----- -----
Net interest income $3,346 $1,517 $566 $45 $5,474
Non-interest income 738 195 158 (30) 1,061
--- --- --- ---
Total net revenue(6) 4,084 1,712 724 15 6,535
Provision (benefit) for credit losses 1,717 279 (2) (2) 1,992
Non-interest expense 1,929 1,042 391 72 3,434
----- ----- --- ---
Income (loss) from continuing operations before income taxes 438 391 335 (55) 1,109
Income tax provision (benefit) 167 143 122 (118) 314
Income from continuing operations, net of tax $271 $248 $213 $63 $795
==== ==== ==== === ====
Three Months Ended June 30, 2016 Six Months Ended June 30, 2016
(Dollars in millions) Credit Card Consumer Commercial Other Total Credit Card Consumer Commercial
Banking Banking Banking Banking Other Total
-------------------- ----------- --------- ----------- ----- ----- ----------- --------- ----------- ----- -----
Net interest income $3,045 $1,439 $559 $50 $5,093 $6,078 $2,859 $1,096 $116 $10,149
Non-interest income 859 175 129 (2) 1,161 1,706 366 247 6 2,325
--- --- --- --- ----- --- --- --- -----
Total net revenue(6) 3,904 1,614 688 48 6,254 7,784 3,225 1,343 122 12,474
Provision (benefit) for credit losses 1,261 204 128 (1) 1,592 2,332 434 356 (3) 3,119
Non-interest expense 1,883 1,006 343 63 3,295 3,746 1,996 665 111 6,518
----- ----- --- --- ----- ----- ----- --- --- -----
Income (loss) from continuing operations before income taxes 760 404 217 (14) 1,367 1,706 795 322 14 2,837
Income tax provision (benefit) 276 147 79 (78) 424 613 289 117 (143) 876
--- ---
Income from continuing operations, net of tax $484 $257 $138 $64 $943 $1,093 $506 $205 $157 $1,961
==== ==== ==== === ==== ====== ==== ==== ==== ======
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary-Credit Card Business
2017 Q2 vs. Six Months Ended June 30,
2017 2017 2016 2016 2016 2017 2016 2017 vs.
(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Credit Card
-----------
Earnings:
Net interest income $3,294 $3,346 $3,353 $3,204 $3,045 (2)% 8% $6,640 $6,078 9%
Non-interest income 875 738 849 825 859 19 2 1,613 1,706 (5)
--- --- --- --- --- ----- -----
Total net revenue 4,169 4,084 4,202 4,029 3,904 2 7 8,253 7,784 6
Provision for credit losses 1,397 1,717 1,322 1,272 1,261 (19) 11 3,114 2,332 34
Non-interest expense 1,918 1,929 2,073 1,884 1,883 (1) 2 3,847 3,746 3
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 854 438 807 873 760 95 12 1,292 1,706 (24)
Income tax provision 301 167 295 318 276 80 9 468 613 (24)
Income from continuing operations, net of tax $553 $271 $512 $555 $484 104 14 $824 $1,093 (25)
==== ==== ==== ==== ==== ==== ======
Selected performance metrics:
Period-end loans held for investment $101,590 $99,213 $105,552 $99,201 $96,904 2 5 $101,590 $96,904 5
Average loans held for investment 100,043 101,169 100,791 98,016 94,382 (1) 6 100,603 93,684 7
Average yield on loans held for investment(7) 15.14% 14.99% 14.93% 14.68% 14.49% 15 bps 65 bps 15.06% 14.55% 51 bps
Total net revenue margin(8) 16.67 16.14 16.68 16.44 16.55 53 12 16.41 16.62 (21)
Net charge-off rate 5.02 5.02 4.56 3.70 4.02 - 100 5.02 4.05 97
30+ day performing delinquency rate 3.60 3.68 3.91 3.65 3.15 (8) 45 3.60 3.15 45
30+ day delinquency rate 3.62 3.71 3.94 3.69 3.18 (9) 44 3.62 3.18 44
Nonperforming loan rate(2) 0.03 0.04 0.04 0.04 0.05 (1) (2) 0.03 0.05 (2)
PCCR intangible amortization $44 $44 $58 $62 $67 - (34)% $88 $137 (36)%
Purchase volume(9) 83,079 73,197 82,824 78,106 78,019 14% 6 156,276 146,208 7
2017 Q2 vs. Six Months Ended June 30,
2017 2017 2016 2016 2016 2017 2016 2017 vs.
(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Domestic Card
-------------
Earnings:
Net interest income $3,011 $3,093 $3,090 $2,956 $2,769 (3)% 9% $6,104 $5,525 10%
Non-interest income 802 699 791 759 792 15 1 1,501 1,566 (4)
-----
Total net revenue 3,813 3,792 3,881 3,715 3,561 1 7 7,605 7,091 7
Provision for credit losses 1,327 1,637 1,229 1,190 1,164 (19) 14 2,964 2,136 39
Non-interest expense 1,727 1,717 1,859 1,696 1,669 1 3 3,444 3,340 3
-----
Income from continuing operations before income taxes 759 438 793 829 728 73 4 1,197 1,615 (26)
Income tax provision 277 160 288 302 265 73 5 437 588 (26)
Income from continuing operations, net of tax $482 $278 $505 $527 $463 73 4 $760 $1,027 (26)
==== ==== ==== ==== ==== ==== ======
Selected performance metrics:
Period-end loans held for investment $92,866 $91,092 $97,120 $90,955 $88,581 2 5 $92,866 $88,581 5
Average loans held for investment 91,769 93,034 92,623 89,763 85,981 (1) 7 92,398 85,564 8
Average yield on loans held for investment(7) 15.07% 15.01% 14.91% 14.71% 14.40% 6 bps 67 bps 15.04% 14.41% 63 bps
Total net revenue margin(8) 16.62 16.30 16.76 16.55 16.57 32 5 16.46 16.58 (12)
Net charge-off rate 5.11 5.14 4.66 3.74 4.07 (3) 104 5.12 4.12 100
30+ day delinquency rate 3.63 3.71 3.95 3.68 3.14 (8) 49 3.63 3.14 49
Purchase volume(9) $75,781 $66,950 $75,639 $71,331 $71,050 13% 7% $142,731 $133,667 7%
Refreshed FICO scores:(10)
Greater than 660 64% 63% 64% 64% 65% 1 (1) 64% 65% (1)
660 or below 36 37 36 36 35 (1) 1 36 35 1
Total 100% 100% 100% 100% 100% 100% 100%
=== === === === === === ===
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary-Consumer Banking Business
2017 Q2 vs. Six Months Ended June 30,
2017 2017 2016 2016 2016 2017 2016 2017 vs.
(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Consumer Banking
----------------
Earnings:
Net interest income $1,578 $1,517 $1,498 $1,472 $1,439 4% 10% $3,095 $2,859 8%
Non-interest income 183 195 166 201 175 (6) 5 378 366 3
--- --- --- --- --- --- ---
Total net revenue 1,761 1,712 1,664 1,673 1,614 3 9 3,473 3,225 8
Provision for credit losses 268 279 365 256 204 (4) 31 547 434 26
Non-interest expense 1,059 1,042 1,109 1,034 1,006 2 5 2,101 1,996 5
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 434 391 190 383 404 11 7 825 795 4
Income tax provision 158 143 70 139 147 10 7 301 289 4
--- --- --- --- --- --- ---
Income from continuing operations, net of tax $276 $248 $120 $244 $257 11 7 $524 $506 4
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $74,973 $73,982 $73,054 $72,285 $71,415 1 5 $74,973 $71,415 5
Average loans held for investment 74,469 73,331 72,659 71,727 70,988 2 5 73,903 70,642 5
Average yield on loans held for investment(7) 6.56% 6.48% 6.50% 6.41% 6.28% 8 bps 28 bps 6.52% 6.23% 29 bps
Auto loan originations $7,453 $7,025 $6,542 $6,804 $6,529 6% 14% $14,478 $12,373 17%
Period-end deposits 186,607 188,216 181,917 178,793 176,340 (1) 6 186,607 176,340 6
Average deposits 186,989 183,936 180,019 177,402 176,808 2 6 185,471 175,531 6
Average deposits interest rate 0.59% 0.57% 0.57% 0.56% 0.55% 2 bps 4 bps 0.58% 0.54% 4 bps
Net charge-off rate(1) 1.25 1.19 1.45 1.26 0.83 6 42 1.22 0.93 29
30+ day performing delinquency rate 3.79 3.45 4.10 3.72 3.56 34 23 3.79 3.56 23
30+ day delinquency rate 4.33 3.93 4.67 4.26 4.07 40 26 4.33 4.07 26
Nonperforming loan rate(2) 0.75 0.64 0.72 0.71 0.69 11 6 0.75 0.69 6
Nonperforming asset rate(3) 0.96 0.92 1.09 0.98 0.96 4 - 0.96 0.96 -
Auto-At origination FICO scores:(11)
Greater than 660 51% 51% 52% 51% 51% - - 51% 51% -
621 - 660 18 18 17 17 17 - 1% 18 17 1%
620 or below 31 31 31 32 32 - (1) 31 32 (1)
--- --- --- --- ---
Total 100% 100% 100% 100% 100% 100% 100%
=== === === === === === ===
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary-Commercial Banking Business
2017 Q2 vs. Six Months Ended June 30,
2017 2017 2016 2016 2016 2017 2016 2017 vs.
(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Commercial Banking
------------------
Earnings:
Net interest income $569 $566 $565 $555 $559 1% 2% $1,135 $1,096 4%
Non-interest income 183 158 175 156 129 16 42 341 247 38
--- --- --- --- --- --- ---
Total net revenue(6) 752 724 740 711 688 4 9 1,476 1,343 10
Provision (benefit) for credit losses 140 (2) 66 61 128 ** 9 138 356 (61)
Non-interest expense 381 391 393 349 343 (3) 11 772 665 16
--- --- --- --- ---
Income from continuing operations before income taxes 231 335 281 301 217 (31) 6 566 322 76
Income tax provision 85 122 102 110 79 (30) 8 207 117 77
Income from continuing operations, net of tax $146 $213 $179 $191 $138 (31) 6 $359 $205 75
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $67,672 $67,320 $66,916 $66,457 $66,202 1 2 $67,672 $66,202 2
Average loans held for investment 67,669 66,938 66,515 66,034 64,938 1 4 67,305 64,156 5
Average yield on loans held for investment(6)(7) 3.81% 3.65% 3.55% 3.50% 3.45% 16 bps 36 bps 3.73% 3.42% 31 bps
Period-end deposits $33,153 $33,735 $33,866 $33,611 $34,281 (2)% (3)% $33,153 $34,281 (3)%
Average deposits 34,263 34,219 34,029 33,498 33,764 - 1 34,241 33,920 1
Average deposits interest rate 0.36% 0.31% 0.30% 0.30% 0.27% 5 bps 9 bps 0.34% 0.27% 7 bps
Net charge-off rate 0.80 0.14 0.47 0.66 0.37 66 43 0.47 0.33 14
Nonperforming loan rate(2) 1.01 1.25 1.53 1.50 1.59 (24) (58) 1.01 1.59 (58)
Nonperforming asset rate(3) 1.04 1.27 1.54 1.51 1.60 (23) (56) 1.04 1.60 (56)
Risk category:(12)
Noncriticized $63,802 $63,390 $62,828 $62,336 $61,926 1% 3% $63,802 $61,926 3%
Criticized performing 2,660 2,492 2,453 2,473 2,456 7 8 2,660 2,456 8
Criticized nonperforming 686 844 1,022 994 1,050 (19) (35) 686 1,050 (35)
PCI loans 524 594 613 654 770 (12) (32) 524 770 (32)
--- ---
Total commercial loans $67,672 $67,320 $66,916 $66,457 $66,202 1 2 $67,672 $66,202 2
======= ======= ======= ======= ======= ======= =======
Risk category as a percentage of period-end loans held for investment:(12)
Noncriticized 94.3% 94.2% 93.9% 93.8% 93.5% 10 bps 80 bps 94.3% 93.5% 80 bps
Criticized performing 3.9 3.7 3.7 3.7 3.7 20 20 3.9 3.7 20
Criticized nonperforming 1.0 1.2 1.5 1.5 1.6 (20) (60) 1.0 1.6 (60)
PCI loans 0.8 0.9 0.9 1.0 1.2 (10) (40) 0.8 1.2 (40)
--- ---
Total commercial loans 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== ===== ===== =====
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Financial & Statistical Summary-Other and Total
2017 Q2 vs. Six Months Ended June 30,
2017 2017 2016 2016 2016 2017 2016 2017 vs.
(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2017 2016 2016
--- --- --- --- --- --- --- ---- ---- ----
Other
-----
Earnings:
Net interest income $32 $45 $31 $46 $50 (29)% (36)% $77 $116 (34)%
Non-interest income (10) (30) (71) 2 (2) (67) ** (40) 6 **
--- --- --- --- --- --- ---
Total net revenue (loss)(6) 22 15 (40) 48 48 47 (54) 37 122 (70)
Benefit for credit losses (5) (2) (1) (1) (1) 150 ** (7) (3) 133
Non-interest expense 56 72 104 94 63 (22) (11) 128 111 15
--- --- --- --- --- --- ---
Income (loss) from continuing operations before income taxes (29) (55) (143) (45) (14) (47) 107 (84) 14 **
Income tax benefit (101) (118) (125) (71) (78) (14) 29 (219) (143) 53
---- ---- ---- --- --- ---- ----
Income (loss) from continuing operations, net of tax $72 $63 $(18) $26 $64 14 13 $135 $157 (14)
=== === ==== === === ==== ====
Selected performance metrics:
Period-end loans held for investment $67 $73 $64 $76 $82 (8) (18) $67 $82 (18)
Average loans held for investment 60 67 62 66 71 (10) (15) 64 75 (15)
Period-end deposits 20,003 19,231 20,985 13,577 10,438 4 92 20,003 10,438 92
Average deposits 19,298 20,395 18,156 11,351 10,574 (5) 83 19,843 10,712 85
Total
-----
Earnings:
Net interest income $5,473 $5,474 $5,447 $5,277 $5,093 - 7% $10,947 $10,149 8%
Non-interest income 1,231 1,061 1,119 1,184 1,161 16% 6 2,292 2,325 (1)
----- ----- ----- ----- ----- ----- -----
Total net revenue 6,704 6,535 6,566 6,461 6,254 3 7 13,239 12,474 6
Provision for credit losses 1,800 1,992 1,752 1,588 1,592 (10) 13 3,792 3,119 22
Non-interest expense 3,414 3,434 3,679 3,361 3,295 (1) 4 6,848 6,518 5
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 1,490 1,109 1,135 1,512 1,367 34 9 2,599 2,837 (8)
Income tax provision 443 314 342 496 424 41 4 757 876 (14)
--- --- --- --- --- --- ---
Income from continuing operations, net of tax $1,047 $795 $793 $1,016 $943 32 11 $1,842 $1,961 (6)
====== ==== ==== ====== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $244,302 $240,588 $245,586 $238,019 $234,603 2 4 $244,302 $234,603 4
Average loans held for investment 242,241 241,505 240,027 235,843 230,379 - 5 241,875 228,557 6
Period-end deposits 239,763 241,182 236,768 225,981 221,059 (1) 8 239,763 221,059 8
Average deposits 240,550 238,550 232,204 222,251 221,146 1 9 239,555 220,163 9
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Notes to Loan, Allowance and Business Segment
Disclosures (Tables 7-13)
(1) In Q2 2017, we implemented changes in our
charge-off practices for certain consumer
banking loans. The Q2 2017 Auto net charge-
offs amount includes approximately $48
million associated with implementing these
changes, with an impact to the net charge-
off rate of 38 basis points and 19 basis
points for the three and six months ended
June 30, 2017, respectively. Excluding this
impact, the Auto net charge-off rate in
those periods would have been 1.32% and
1.48%, respectively. The impact to the
Consumer Banking net charge-off rate was 26
basis points and 13 basis points for the
three and six months ended June 30, 2017,
respectively. Excluding this impact, the
Consumer Banking net charge-off rate in
those periods would have been 0.99% and
1.09%, respectively.
(2) Nonperforming loan rates are calculated based
on nonperforming loans for each category
divided by period-end total loans held for
investment for each respective category.
(3) Nonperforming assets consist of nonperforming
loans, real estate owned ("REO") and other
foreclosed assets. The total nonperforming
asset rate is calculated based on total
nonperforming assets divided by the combined
period-end total loans held for investment,
REO and other foreclosed assets. Prior to Q4
2016, the nonperforming asset rate for our
Consumer Banking business excluded the
impact of REOs related to our acquired home
loan portfolio which, if included, would
increase the nonperforming asset rate by
approximately 10 basis points in each of the
prior periods presented.
(4) Primarily consists of the legacy loan
portfolio of our discontinued GreenPoint
mortgage operations.
(5) Represents foreign currency translation
adjustments and the net impact of loan
transfers and sales.
(6) Some of our tax-related commercial
investments generate tax-exempt income or
tax credits. Accordingly, we make certain
reclassifications within our Commercial
Banking business results to present revenues
and yields on a taxable-equivalent basis,
calculated assuming an effective tax rate
approximately equal to our federal statutory
tax rate of 35% with offsetting
reclassifications to the Other category.
(7) Average yield on loans held for investment is
calculated based on annualized interest
income for the period divided by average
loans held for investment during the period
for the respective loan category. Annualized
interest income is computed based on the
effective yield of the respective loan
category and does not include any
allocations, such as funds transfer pricing.
(8) Total net revenue margin is calculated based
on annualized total net revenue for the
period divided by average loans held for
investment during the period for the
respective loan category.
(9) Includes purchase transactions, net of
returns, for the period for loans both
classified as held for investment and held
for sale. Excludes cash advance and balance
transfer transactions.
(10) Percentages represent period-end loans held
for investment in each credit score
category. Domestic card credit scores
generally represent FICO scores. These
scores are obtained from one of the major
credit bureaus at origination and are
refreshed monthly thereafter. We approximate
non-FICO credit scores to comparable FICO
scores for consistency purposes. Balances
for which no credit score is available or
the credit score is invalid are included in
the 660 or below category.
(11) Percentages represent period-end loans held
for investment in each credit score
category. Auto credit scores generally
represent average FICO scores obtained from
three credit bureaus at the time of
application and are not refreshed
thereafter. Balances for which no credit
score is available or the credit score is
invalid are included in the 620 or below
category.
(12) Criticized exposures correspond to the
"Special Mention," "Substandard" and
"Doubtful" asset categories defined by bank
regulatory authorities.
** Not meaningful.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures(1)
Basel III Standardized Approach
(Dollars in millions, except as noted) June 30, March 31, December 31, September 30, June 30,
2017 2017 2016 2016 2016
--- ---- ---- ---- ----
Regulatory Capital Metrics
--------------------------
Common equity excluding AOCI $45,459 $44,614 $44,103 $44,214 $44,572
Adjustments:
AOCI(2)(3) (593) (807) (674) 199 332
Goodwill, net of related deferred tax liabilities (14,299) (14,302) (14,307) (14,288) (14,296)
Intangible assets, net of related deferred tax liabilities(3) (418) (465) (384) (435) (483)
Other 77 121 65 (498) (639)
Common equity Tier 1 capital $30,226 $29,161 $28,803 $29,192 $29,486
======= ======= ======= ======= =======
Tier 1 capital $34,585 $33,519 $33,162 $33,069 $32,780
Total capital(4) 42,101 40,979 40,817 40,564 38,767
Risk-weighted assets 283,231 279,302 285,756 275,198 269,667
Adjusted average assets(5) 335,248 336,990 335,835 328,627 319,968
-------------------------
Capital Ratios
--------------
Common equity Tier 1 capital(6) 10.7% 10.4% 10.1% 10.6% 10.9%
Tier 1 capital(7) 12.2 12.0 11.6 12.0 12.2
Total capital(8) 14.9 14.7 14.3 14.7 14.4
Tier 1 leverage(5) 10.3 9.9 9.9 10.1 10.2
Tangible common equity ("TCE")(9) 8.8 8.5 8.1 8.8 9.0
Reconciliation of Non-GAAP Measures
We report certain non-GAAP measures that management uses in assessing its capital adequacy and the level of return generated. The following non-GAAP measures consist of selected adjusted results, tangible common equity ("TCE"), tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics key financial performance measures. While our non-GAAP 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. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.
2017 2017 Six Months Ended
Q2 Q1 June 30, 2017
(Dollars in millions, except per share data and as noted) Reported Results Adj.(10) Adjusted Results Reported Results Adj.(10) Adjusted Results Reported Results Adj.(10) Adjusted Results
---------------- ------- ---------------- ---------------- ------- ---------------- ---------------- ------- ----------------
Selected income statement data:
Net interest income $5,473 - $5,473 $5,474 $33 $5,507 $10,947 $33 $10,980
Non-interest income 1,231 - 1,231 1,061 37 1,098 2,292 37 2,329
----- --- ----- ----- --- ----- ----- --- -----
Total net revenue 6,704 - 6,704 6,535 70 6,605 13,239 70 13,309
Provision for credit losses 1,800 - 1,800 1,992 - 1,992 3,792 - 3,792
Non-interest expense 3,414 $(12) 3,402 3,434 (29) 3,405 6,848 (41) 6,807
Income from continuing operations before income taxes 1,490 12 1,502 1,109 99 1,208 2,599 111 2,710
Income tax provision (benefit) 443 4 447 314 (1) 313 757 3 760
--- --- --- --- --- --- --- --- ---
Income from continuing operations, net of tax 1,047 8 1,055 795 100 895 1,842 108 1,950
Income (loss) from discontinued operations, net of tax (11) - (11) 15 - 15 4 - 4
--- --- --- --- --- --- --- --- ---
Net income 1,036 8 1,044 810 100 910 1,846 108 1,954
Net income available to common stockholders 948 8 956 752 100 852 1,700 108 1,808
Selected performance metrics:
Diluted EPS(12) $1.94 $0.02 $1.96 $1.54 $0.21 $1.75 $3.49 $0.22 $3.71
Efficiency ratio 50.92% (17) bps 50.75% 52.55% (100) bps 51.55% 51.73% (58) bps 51.15%
2016 2016 2016 Year Ended
Q4 Q3 Q2 December 31, 2016
(Dollars in millions, except per share data and as noted) Reported Results Adj.(11) Adjusted Results Reported Results Adj.(11) Adjusted Results Reported Results Adj.(11) Adjusted Results Reported Results Adj.(11) Adjusted Results
---------------- ------- ---------------- ---------------- ------- ---------------- ---------------- ------- ---------------- ---------------- ------- ----------------
Selected income statement data:
Net interest income $5,447 $13 $5,460 $5,277 $34 $5,311 $5,093 $7 $5,100 $20,873 $54 $20,927
Non-interest income 1,119 14 1,133 1,184 13 1,197 1,161 8 1,169 4,628 35 4,663
----- --- ----- ----- --- ----- ----- --- ----- ----- --- -----
Total net revenue 6,566 27 6,593 6,461 47 6,508 6,254 15 6,269 25,501 89 25,590
Provision for credit losses 1,752 - 1,752 1,588 - 1,588 1,592 - 1,592 6,459 - 6,459
Non-interest expense 3,679 (45) 3,634 3,361 (16) 3,345 3,295 (15) 3,280 13,558 (76) 13,482
----- --- ----- ----- --- ----- ----- --- ----- ------ --- ------
Income from continuing operations before income taxes 1,135 72 1,207 1,512 63 1,575 1,367 30 1,397 5,484 165 5,649
Income tax provision (benefit) 342 10 352 496 - 496 424 (7) 417 1,714 3 1,717
--- --- --- --- --- --- --- --- --- ----- --- -----
Income from continuing operations, net of tax 793 62 855 1,016 63 1,079 943 37 980 3,770 162 3,932
Income (loss) from discontinued operations, net of tax (2) - (2) (11) - (11) (1) - (1) (19) - (19)
--- --- --- --- --- --- --- --- --- --- --- ---
Net income 791 62 853 1,005 63 1,068 942 37 979 3,751 162 3,913
Net income available to common stockholders 710 62 772 962 63 1,025 871 37 908 3,513 162 3,675
Selected performance metrics:
Diluted EPS(12) $1.45 $0.13 $1.58 $1.90 $0.13 $2.03 $1.69 $0.07 $1.76 $6.89 $0.32 $7.21
Efficiency ratio 56.03% (91) bps 55.12% 52.02% (62) bps 51.40% 52.69% (37) bps 52.32% 53.17% (49) bps 52.68%
2017 2017 2016 2016 2016
(Dollars in millions) Q2 Q1 Q4 Q3 Q2
--- --- --- --- ---
Tangible Common Equity (Period-End)
----------------------------------
Stockholders' equity $49,137 $48,040 $47,514 $48,213 $48,108
Goodwill and intangible assets(13) (15,301) (15,360) (15,420) (15,475) (15,553)
Noncumulative perpetual preferred stock (4,360) (4,360) (4,360) (3,877) (3,294)
------ ------
Tangible common equity $29,476 $28,320 $27,734 $28,861 $29,261
======= ======= ======= ======= =======
Tangible Common Equity (Average)
-------------------------------
Stockholders' equity $49,005 $48,193 $47,972 $49,033 $48,934
Goodwill and intangible assets(13) (15,336) (15,395) (15,455) (15,507) (15,585)
Noncumulative perpetual preferred stock (4,360) (4,360) (4,051) (3,719) (3,294)
Tangible common equity $29,309 $28,438 $28,466 $29,807 $30,055
======= ======= ======= ======= =======
Tangible Assets (Period-End)
---------------------------
Total assets $350,593 $348,549 $357,033 $345,061 $339,117
Goodwill and intangible assets(13) (15,301) (15,360) (15,420) (15,475) (15,553)
-------
Tangible assets $335,292 $333,189 $341,613 $329,586 $323,564
======== ======== ======== ======== ========
Tangible Assets (Average)
------------------------
Total assets $349,891 $351,641 $350,225 $343,153 $334,479
Goodwill and intangible assets(13) (15,336) (15,395) (15,455) (15,507) (15,585)
-------
Tangible assets $334,555 $336,246 $334,770 $327,646 $318,894
======== ======== ======== ======== ========
__________
(1) Regulatory capital metrics and
capital ratios as of June 30, 2017
are preliminary and therefore
subject to change.
(2) Amounts presented are net of tax.
(3) Amounts based on transition
provisions for regulatory capital
deductions and adjustments of 60%
for 2016 and 80% for 2017.
(4) Total capital equals the sum of Tier
1 capital and Tier 2 capital.
(5) Adjusted average assets for the
purpose of calculating our Tier 1
leverage ratio represents total
average assets adjusted for amounts
that deducted from Tier 1 capital,
predominately goodwill and
intangible assets. Tier 1 leverage
ratio is a regulatory capital
measure calculated based on Tier 1
capital divided by adjusted average
assets.
(6) Common equity Tier 1 capital ratio
is a regulatory capital measure
calculated based on common equity
Tier 1 capital divided by risk-
weighted assets.
(7) Tier 1 capital ratio is a regulatory
capital measure calculated based on
Tier 1 capital divided by risk-
weighted assets.
(8) Total capital ratio is a regulatory
capital measure calculated based on
total capital divided by risk-
weighted assets.
(9) TCE ratio is a non-GAAP measure
calculated based on TCE divided by
tangible assets.
(10) In Q2 2017, we incurred $12 million
of costs related to our anticipated
close of the Cabela's acquisition,
which is subject to regulatory
approval. In Q1 2017, we recorded a
build in the U.K. Payment
Protection Insurance customer
refund reserve ("U.K. PPI Reserve")
of $99 million.
(11) In Q4 2016, we recorded charges
totaling $72 million consisting of
a build in the U.K. PPI Reserve of
$44 million and an impairment
associated with certain acquired
intangible and software assets of
$28 million. In Q3 2016, we
recorded a build in the U.K. PPI
Reserve of $63 million. In Q2 2016,
we recorded charges totaling $30
million associated with a build of
$54 million in the U.K. PPI
Reserve, partially offset by a gain
of $24 million related to the
exchange of our ownership interest
in Visa Europe with Visa Inc. as a
result of Visa Inc.'s acquisition
of Visa Europe. There were no
adjustments to our reported results
in Q1 2016.
(12) Earnings per share is computed
independently for each period.
Accordingly, the sum of each
quarter amount may not agree to the
year-to-date total.
(13) Includes impact of related deferred
taxes.
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SOURCE Capital One Financial Corporation
