CAPITAL ONE FINANCIAL CORPORATION MCLEAN, Va., Oct. 24, 2017 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2017 of $1.1 billion, or $2.14 per diluted common share, compared with net income of $1.0 billion, or $1.94 per diluted common share in the second quarter of 2017, and with net income of $1.0 billion, or $1.90 per diluted common share in the third quarter of 2016. Excluding adjusting items, net income for the third quarter of 2017 was $2.42 per diluted common share((1)).
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"We posted another quarter of resilient and responsible growth," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We continue to carefully manage risk across our businesses. And, we're driving improving efficiency even as we invest to grow and to transform our company as banking goes digital."
Adjusting items in the third quarter of 2017 included:
Pre-Tax Diluted EPS
(Dollars in millions, except per
share data) Impact Impact
Deal-specific impacts of the
Cabela's acquisition $(105) $(0.14)
Restructuring charges (108) (0.14)
--------------------- ---- -----
Notable items in the third quarter of 2017 included:
Pre-Tax Diluted EPS
(Dollars in millions, except per
share data) Impact Impact
Impact of hurricanes Harvey and
Irma $(114) $(0.15)
Gains on investment portfolio
repositioning 69 0.09
----------------------------- --- ----
All comparisons below are for the third quarter of 2017 compared with the second quarter of 2017 unless otherwise noted.
Third Quarter 2017 Income Statement Summary:
-- Total net revenue increased 4 percent to $7.0 billion.
-- Total non-interest expense increased 4 percent to $3.6 billion:
-- 7 percent increase in operating expenses.
-- 13 percent decrease in marketing.
-- Pre-provision earnings increased 4 percent to $3.4 billion((2)).
-- Provision for credit losses increased 2 percent to $1.8 billion:
-- Net charge-offs of $1.6 billion.
-- $227 million reserve build.
-- Net interest margin of 7.08 percent, up 20 basis points.
-- Efficiency ratio of 51.07 percent:
-- Efficiency ratio excluding adjusting items was 49.28 percent((1)).
Third Quarter 2017 Balance Sheet Summary:
-- Common equity Tier 1 capital ratio under Basel III Standardized Approach
of 10.7 percent at September 30, 2017.
-- Period-end loans held for investment in the quarter increased $8.1
billion, or 3 percent, to $252.4 billion.
-- Domestic Card period-end loans increased $7.1 billion, or 8 percent,
to $100.0 billion.
-- Consumer Banking period-end loans increased $591 million, or 1
percent, to $75.6 billion:
-- Auto period-end loans increased $1.5 billion, or 3 percent, to
$53.3 billion.
-- Home loans period-end loans decreased $904 million, or 5
percent, to $18.8 billion, driven by run-off of acquired
portfolios.
-- Commercial Banking period-end loans decreased $2 million, or less
than 1 percent, to $67.7 billion.
-- Average loans held for investment in the quarter increased $3.6 billion,
or 1 percent, to $245.8 billion.
-- Domestic Card average loans increased $2.0 billion, or 2 percent, to
$93.7 billion.
-- Consumer Banking average loans increased $894 million, or 1 percent,
to $75.4 billion:
-- Auto average loans increased $1.8 billion, or 4 percent, to
$52.6 billion.
-- Home loans average loans decreased $901 million, or 4 percent,
to $19.3 billion, driven by run-off of acquired portfolios.
-- Commercial Banking average loans increased $190 million, or less
than 1 percent, to $67.9 billion.
-- Period-end total deposits decreased $701 million, or less than 1
percent, to $239.1 billion, while average deposits decreased $1.7
billion, or 1 percent, to $238.8 billion.
-- Interest-bearing deposits rate paid increased 6 basis points to 0.77
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 October 24, 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 November 7, 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 $239.1 billion in deposits and $361.4 billion in total assets as of September 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)
Third 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 September 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 Q3 vs Nine Months Ended September 30,
(Dollars in millions, except per share data and as noted) 2017 2017 2017 2016 2016 2017 2016 2017 vs
Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
--- --- --- --- --- --- --- ---- ---- ----
Income Statement
----------------
Net interest income $5,700 $5,473 $5,474 $5,447 $5,277 4% 8% $16,647 $15,426 8%
Non-interest income 1,285 1,231 1,061 1,119 1,184 4 9 3,577 3,509 2
----- ----- ----- ----- -----
Total net revenue(1) 6,985 6,704 6,535 6,566 6,461 4 8 20,224 18,935 7
Provision for credit losses 1,833 1,800 1,992 1,752 1,588 2 15 5,625 4,707 20
Non-interest expense:
Marketing 379 435 396 575 393 (13) (4) 1,210 1,236 (2)
Amortization of intangibles 61 61 62 101 89 - (31) 184 285 (35)
Operating expenses 3,127 2,918 2,976 3,003 2,879 7 9 9,021 8,358 8
----- ----- ----- ----- ----- ----- -----
Total non-interest expense 3,567 3,414 3,434 3,679 3,361 4 6 10,415 9,879 5
----- ----- ----- ----- ----- ------ -----
Income from continuing operations before income taxes 1,585 1,490 1,109 1,135 1,512 6 5 4,184 4,349 (4)
Income tax provision 448 443 314 342 496 1 (10) 1,205 1,372 (12)
--- --- --- --- --- ----- -----
Income from continuing operations, net of tax 1,137 1,047 795 793 1,016 9 12 2,979 2,977 -
Income (loss) from discontinued operations, net of tax(2) (30) (11) 15 (2) (11) 173 173 (26) (17) 53
--- --- --- --- --- --- ---
Net income 1,107 1,036 810 791 1,005 7 10 2,953 2,960 -
Dividends and undistributed earnings allocated to participating securities(3) (8) (8) (5) (6) (6) - 33 (21) (18) 17
Preferred stock dividends (52) (80) (53) (75) (37) (35) 41 (185) (139) 33
Net income available to common stockholders $1,047 $948 $752 $710 $962 10 9 $2,747 $2,803 (2)
====== ==== ==== ==== ==== ====== ======
Common Share Statistics
-----------------------
Basic earnings per common share:(3)
Net income from continuing operations $2.22 $1.98 $1.53 $1.47 $1.94 12% 14% $5.73 $5.50 4%
Income (loss) from discontinued operations (0.06) (0.02) 0.03 - (0.02) 200 200 (0.05) (0.03) 67
Net income per basic common share $2.16 $1.96 $1.56 $1.47 $1.92 10 13 $5.68 $5.47 4
===== ===== ===== ===== ===== ===== =====
Diluted earnings per common share:(3)
Net income from continuing operations $2.20 $1.96 $1.51 $1.45 $1.92 12 15 $5.68 $5.45 4
Income (loss) from discontinued operations (0.06) (0.02) 0.03 - (0.02) 200 200 (0.05) (0.03) 67
Net income per diluted common share $2.14 $1.94 $1.54 $1.45 $1.90 10 13 $5.63 $5.42 4
===== ===== ===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic 484.9 484.0 482.3 483.5 501.1 - (3) 483.7 512.0 (6)
Diluted 489.0 488.1 487.9 489.2 505.9 - (3) 488.1 516.8 (6)
Common shares outstanding (period-end, in millions) 484.4 483.7 482.8 480.2 489.2 - (1) 484.4 489.2 (1)
Dividends paid per common share $0.40 $0.40 $0.40 $0.40 $0.40 - - $1.20 $1.20 -
Tangible book value per common share (period-end)(4) 63.06 60.94 58.66 57.76 59.00 3 7 63.06 59.00 7
2017 Q3 vs Nine Months Ended September 30,
(Dollars in millions) 2017 2017 2017 2016 2016 2017 2016 2017 vs
--------------------
Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
--- --- --- --- --- --- --- ---- ---- ----
Balance Sheet (Period-End)
-------------------------
Loans held for investment(5) $252,422 $244,302 $240,588 $245,586 $238,019 3% 6% $252,422 $238,019 6%
Interest-earning assets 329,002 319,286 316,712 321,807 313,431 3 5 329,002 313,431 5
Total assets 361,402 350,593 348,549 357,033 345,061 3 5 361,402 345,061 5
Interest-bearing deposits 212,956 213,810 214,818 211,266 200,416 - 6 212,956 200,416 6
Total deposits 239,062 239,763 241,182 236,768 225,981 - 6 239,062 225,981 6
Borrowings 59,458 49,954 48,439 60,460 59,820 19 (1) 59,458 59,820 (1)
Common equity 45,794 44,777 43,680 43,154 44,336 2 3 45,794 44,336 3
Total stockholders' equity 50,154 49,137 48,040 47,514 48,213 2 4 50,154 48,213 4
--------------------------
Balance Sheet (Average Balances)
-------------------------------
Loans held for investment(5) $245,822 $242,241 $241,505 $240,027 $235,843 1% 4% $243,205 $231,004 5%
Interest-earning assets 322,015 318,078 318,358 317,853 310,987 1 4 319,497 304,423 5
Total assets 355,191 349,891 351,641 350,225 343,153 2 4 352,216 336,539 5
Interest-bearing deposits 213,137 214,412 212,973 206,464 196,913 (1) 8 213,508 195,565 9
Total deposits 238,843 240,550 238,550 232,204 222,251 (1) 7 239,316 220,864 8
Borrowings 54,271 48,838 53,357 58,624 60,708 11 (11) 52,159 56,292 (7)
Common equity 45,816 44,645 43,833 43,921 45,314 3 1 44,772 45,578 (2)
Total stockholders' equity 50,176 49,005 48,193 47,972 49,033 2 2 49,132 49,015 -
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics-Consolidated
2017 Q3 vs Nine Months Ended September 30,
(Dollars in millions, except as noted) 2017 2017 2017 2016 2016 2017 2016 2017 vs
Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
--- --- --- --- --- --- --- ---- ---- ----
Performance Metrics
-------------------
Net interest income growth (period over period) 4% - - 3% 4% ** ** 8% 11% **
Non-interest income growth (period over period) 4 16% (5)% (5) 2 ** ** 2 5 **
Total net revenue growth (period over period) 4 3 - 2 3 ** ** 7 10 **
Total net revenue margin(6) 8.68 8.43 8.21 8.26 8.31 25 bps 37 bps 8.44 8.29 15 bps
Net interest margin(7) 7.08 6.88 6.88 6.85 6.79 20 29 6.95 6.76 19
Return on average assets 1.28 1.20 0.90 0.91 1.18 8 10 1.13 1.18 (5)
Return on average tangible assets(8) 1.34 1.25 0.95 0.95 1.24 9 10 1.18 1.24 (6)
Return on average common equity(9) 9.40 8.59 6.73 6.48 8.59 81 81 8.26 8.25 1
Return on average tangible common equity(10) 14.11 13.09 10.37 10.00 13.06 102 105 12.56 12.54 2
Non-interest expense as a percentage of average loans held for investment 5.80 5.64 5.69 6.13 5.70 16 10 5.71 5.70 1
Efficiency ratio(11) 51.07 50.92 52.55 56.03 52.02 15 (95) 51.50 52.17 (67)
Effective income tax rate for continuing operations 28.3 29.7 28.3 30.1 32.8 (140) (450) 28.8 31.5 (270)
Employees (in thousands), period-end 50.4 49.9 48.4 47.3 46.5 1% 8% 50.4 46.5 8%
Credit Quality Metrics
----------------------
Allowance for loan and lease losses $7,418 $7,170 $6,984 $6,503 $6,258 3% 19% $7,418 $6,258 19%
Allowance as a percentage of loans held for investment 2.94% 2.93% 2.90% 2.65% 2.63% 1 bps 31 bps 2.94% 2.63% 31 bps
Net charge-offs $1,606 $1,618 $1,510 $1,489 $1,240 (1)% 30% $4,734 $3,573 32%
Net charge-off rate(12) 2.61% 2.67% 2.50% 2.48% 2.10% (6) bps 51 bps 2.60% 2.06% 54 bps
30+ day performing delinquency rate(13) 2.93 2.69 2.61 2.93 2.71 24 22 2.93 2.71 22
30+ day delinquency rate 3.24 2.99 2.92 3.27 3.04 25 20 3.24 3.04 20
Capital Ratios(14)
-----------------
Common equity Tier 1 capital 10.7% 10.7% 10.4% 10.1% 10.6% - 10 bps 10.7% 10.6% 10 bps
Tier 1 capital 12.2 12.2 12.0 11.6 12.0 - 20 12.2 12.0 20
Total capital 14.8 14.9 14.7 14.3 14.7 (10) bps 10 14.8 14.7 10
Tier 1 leverage 10.5 10.3 9.9 9.9 10.1 20 40 10.5 10.1 40
Tangible common equity ("TCE")(15) 8.8 8.8 8.5 8.1 8.8 - - 8.8 8.8 -
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
2017 Q3 vs Nine Months Ended September 30,
2017 2017 2017 2016 2016 2017 2016 2017 vs
(Dollars in millions, except per share data and as noted) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
-------------------------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Interest income:
Loans, including loans held for sale $5,960 $5,669 $5,626 $5,587 $5,383 5% 11% $17,255 $15,616 10%
Investment securities 431 433 416 393 386 - 12 1,280 1,206 6
Other 29 26 28 29 25 12 16 83 60 38
Total interest income 6,420 6,128 6,070 6,009 5,794 5 11 18,618 16,882 10
----- ----- ----- ----- ----- ------ ------
Interest expense:
Deposits 410 382 353 332 306 7 34 1,145 881 30
Securitized debt obligations 85 82 69 65 56 4 52 236 151 56
Senior and subordinated notes 194 179 149 138 121 8 60 522 338 54
Other borrowings 31 12 25 27 34 158 (9) 68 86 (21)
Total interest expense 720 655 596 562 517 10 39 1,971 1,456 35
--- --- --- --- --- ----- -----
Net interest income 5,700 5,473 5,474 5,447 5,277 4 8 16,647 15,426 8
Provision for credit losses 1,833 1,800 1,992 1,752 1,588 2 15 5,625 4,707 20
Net interest income after provision for credit losses 3,867 3,673 3,482 3,695 3,689 5 5 11,022 10,719 3
----- ----- ----- ----- ----- ------ ------
Non-interest income:(16)(17)
Service charges and other customer-related fees 414 418 371 412 417 (1) (1) 1,203 1,233 (2)
Interchange fees, net 662 676 570 624 603 (2) 10 1,908 1,828 4
Net securities gains (losses) 68 (4) - (4) 1 ** ** 64 (7) **
Other 141 141 120 87 163 - (13) 402 455 (12)
Total non-interest income 1,285 1,231 1,061 1,119 1,184 4 9 3,577 3,509 2
----- ----- ----- ----- ----- ----- -----
Non-interest expense:(16)(17)
Salaries and associate benefits 1,524 1,383 1,471 1,336 1,317 10 16 4,378 3,866 13
Occupancy and equipment 471 474 471 522 499 (1) (6) 1,416 1,422 -
Marketing 379 435 396 575 393 (13) (4) 1,210 1,236 (2)
Professional services 297 279 247 312 257 6 16 823 762 8
Communications and data processing 294 289 288 297 291 2 1 871 873 -
Amortization of intangibles 61 61 62 101 89 - (31) 184 285 (35)
Other 541 493 499 536 515 10 5 1,533 1,435 7
--- --- --- --- --- ----- -----
Total non-interest expense 3,567 3,414 3,434 3,679 3,361 4 6 10,415 9,879 5
----- ----- ----- ----- ----- ------ -----
Income from continuing operations before income taxes 1,585 1,490 1,109 1,135 1,512 6 5 4,184 4,349 (4)
Income tax provision 448 443 314 342 496 1 (10) 1,205 1,372 (12)
--- --- --- --- --- ----- -----
Income from continuing operations, net of tax 1,137 1,047 795 793 1,016 9 12 2,979 2,977 -
Income (loss) from discontinued operations, net of tax(2) (30) (11) 15 (2) (11) 173 173 (26) (17) 53
--- --- --- --- --- --- ---
Net income 1,107 1,036 810 791 1,005 7 10 2,953 2,960 -
Dividends and undistributed earnings allocated to participating securities(3) (8) (8) (5) (6) (6) - 33 (21) (18) 17
Preferred stock dividends (52) (80) (53) (75) (37) (35) 41 (185) (139) 33
Net income available to common stockholders $1,047 $948 $752 $710 $962 10 9 $2,747 $2,803 (2)
====== ==== ==== ==== ==== ====== ======
2017 Q3 vs Nine Months Ended September 30,
2017 2017 2017 2016 2016 2017 2016 2017 vs
(Dollars in millions, except per share data and as noted) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
-------------------------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Basic earnings per common share:(3)
Net income from continuing operations $2.22 $1.98 $1.53 $1.47 $1.94 12% 14% $5.73 $5.50 4%
Income (loss) from discontinued operations (0.06) (0.02) 0.03 - (0.02) 200 200 (0.05) (0.03) 67
Net income per basic common share $2.16 $1.96 $1.56 $1.47 $1.92 10 13 $5.68 $5.47 4
===== ===== ===== ===== ===== ===== =====
Diluted earnings per common share:(3)
Net income from continuing operations $2.20 $1.96 $1.51 $1.45 $1.92 12 15 $5.68 $5.45 4
Income (loss) from discontinued operations (0.06) (0.02) 0.03 - (0.02) 200 200 (0.05) (0.03) 67
Net income per diluted common share $2.14 $1.94 $1.54 $1.45 $1.90 10 13 $5.63 $5.42 4
===== ===== ===== ===== ===== ===== =====
Weighted-average common shares outstanding (in millions):
Basic common shares 484.9 484.0 482.3 483.5 501.1 - (3) 483.7 512.0 (6)
Diluted common shares 489.0 488.1 487.9 489.2 505.9 - (3) 488.1 516.8 (6)
Dividends paid per common share $0.40 $0.40 $0.40 $0.40 $0.40 - - $1.20 $1.20 -
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets
2017 Q3 vs
2017 2017 2017 2016 2016 2017 2016
(Dollars in millions) Q3 Q2 Q1 Q4 Q3 Q2 Q3
-------------------- --- --- --- --- --- --- ---
Assets:
Cash and cash equivalents:
Cash and due from banks $4,154 $3,352 $3,489 $4,185 $3,350 24% 24%
Interest-bearing deposits and other short-term investments 4,330 3,363 5,826 5,791 5,744 29 (25)
----- -----
Total cash and cash equivalents 8,484 6,715 9,315 9,976 9,094 26 (7)
Restricted cash for securitization investors 304 300 486 2,517 287 1 6
Securities available for sale, at fair value 39,742 41,120 41,260 40,737 41,511 (3) (4)
Securities held to maturity, at carrying value 28,650 27,720 26,170 25,712 25,019 3 15
Loans held for investment:(5)
Unsecuritized loans held for investment 217,659 214,864 211,038 213,824 206,763 1 5
Loans held in consolidated trusts 34,763 29,438 29,550 31,762 31,256 18 11
------ ------ ------ ------ ------
Total loans held for investment 252,422 244,302 240,588 245,586 238,019 3 6
Allowance for loan and lease losses (7,418) (7,170) (6,984) (6,503) (6,258) 3 19
------ ------ ------ ------ ------
Net loans held for investment 245,004 237,132 233,604 239,083 231,761 3 6
Loans held for sale, at lower of cost or fair value 1,566 777 735 1,043 994 102 58
Premises and equipment, net 3,955 3,825 3,727 3,675 3,561 3 11
Interest receivable 1,426 1,346 1,368 1,351 1,251 6 14
Goodwill 14,532 14,524 14,521 14,519 14,493 - -
Other assets 17,739 17,134 17,363 18,420 17,090 4 4
------ ------ ------ ------ ------
Total assets $361,402 $350,593 $348,549 $357,033 $345,061 3 5
======== ======== ======== ======== ========
2017 Q3 vs
2017 2017 2017 2016 2016 2017 2016
(Dollars in millions) Q3 Q2 Q1 Q4 Q3 Q2 Q3
-------------------- --- --- --- --- --- --- ---
Liabilities:
Interest payable $301 $376 $260 $327 $237 (20)% 27%
Deposits:
Non-interest-bearing deposits 26,106 25,953 26,364 25,502 25,565 1 2
Interest-bearing deposits 212,956 213,810 214,818 211,266 200,416 - 6
------- ------- ------- ------- -------
Total deposits 239,062 239,763 241,182 236,768 225,981 - 6
Securitized debt obligations 17,087 18,358 18,528 18,826 18,411 (7) (7)
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase 767 958 1,046 992 1,079 (20) (29)
Senior and subordinated notes 28,420 28,478 26,405 23,431 24,001 - 18
Other borrowings 13,184 2,160 2,460 17,211 16,329 ** (19)
------ ----- ----- ------ ------
Total other debt 42,371 31,596 29,911 41,634 41,409 34 2
Other liabilities 12,427 11,363 10,628 11,964 10,810 9 15
------ ------ ------ ------ ------
Total liabilities 311,248 301,456 300,509 309,519 296,848 3 5
------- ------- ------- ------- -------
Stockholders' equity:
Preferred stock 0 0 0 0 0 - -
Common stock 7 7 7 7 7 - -
Additional paid-in capital, net 31,526 31,413 31,326 31,157 30,439 - 4
Retained earnings 31,946 31,086 30,326 29,766 29,245 3 9
Accumulated other comprehensive income (loss) (622) (683) (934) (949) 121 (9) **
Treasury stock, at cost (12,703) (12,686) (12,685) (12,467) (11,599) - 10
------- ------- ------- ------- -------
Total stockholders' equity 50,154 49,137 48,040 47,514 48,213 2 4
------ ------ ------ ------ ------
Total liabilities and stockholders' equity $361,402 $350,593 $348,549 $357,033 $345,061 3 5
======== ======== ======== ======== ========
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 $356 million in Q3 2017, $313 million in Q2 2017, $321 million in both Q1 2017 and Q4 2016 and $289 million in Q3 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 2017 2016 2016
(Dollars in millions) Q3 Q2 Q1 Q4 Q3
-------------------- --- --- --- --- ---
Provision (benefit) for mortgage representation and warranty losses before
income taxes:
$(1) $ - $(25) $ - $ -
Recorded in continuing operations
13 6 (67) (2) 18
Recorded in discontinued operations
Total provision (benefit) for mortgage representation and warranty losses
before income taxes $12 $6 $(92) $(2) $18
=== === ==== === ===
The mortgage representation and warranty reserve was $401 million as of September 30, 2017, $521 million as of June 30, 2017, $516 million as of March 31, 2017, $630 million as of December 31, 2016 and $632
million as of September 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 2017 2016 2016
(Dollars in millions) Q3 Q2 Q1 Q4 Q3
-------------------- --- --- --- --- ---
PCI loans:
$12,658 $13,599 $14,838 $15,896 $17,011
Period-end unpaid principal balance
11,985 12,895 14,102 15,071 16,149
Period-end loans held for investment
12,270 13,305 14,433 15,443 16,529
Average loans held for investment
(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)
On September 25, 2017, we completed the acquisition from Synovus Bank of the credit card assets and related liabilities of Cabela's wholly-owned subsidiary, World's Foremost Bank, which added approximately $5.7 billion to our loans held for investment portfolio as of
the acquisition date ("Cabela's acquisition"). The credit quality metrics as of September 30, 2017 include the impact of this acquisition. Excluding this impact, the 30+ day performing delinquency rate as of September 30, 2017 would have been 2.98%.
(14)
Capital ratios as of the end of Q3 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.
(15)
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.
(16)
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.
(17)
The primary net effects of the reclassifications discussed in footnote 16 above for Q3 2016 and the nine months ended September 30, 2016, compared to previously reported results were (i) an increase to Service charges and other customer-related fees of $30 million and
$71 million, respectively; (ii) a decrease to Other non-interest income of $31 million and $87 million, respectively; and (iii) increase to Communications and data processing expense of $39 million and $116 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 Q3 2017 Q2 2016 Q3
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 $247,022 $5,960 9.65% $242,967 $5,669 9.33% $237,067 $5,383 9.08%
Investment securities 69,302 431 2.49 68,857 433 2.52 66,291 386 2.33
Cash equivalents and other 5,691 29 2.04 6,254 26 1.66 7,629 25 1.31
Total interest-earning assets $322,015 $6,420 7.97 $318,078 $6,128 7.71 $310,987 $5,794 7.45
-------- ------ -------- ------ -------- ------
Interest-bearing liabilities:
Interest-bearing deposits $213,137 $410 0.77 $214,412 $382 0.71 $196,913 $306 0.62
Securitized debt obligations 17,598 85 1.93 18,400 82 1.78 17,389 56 1.29
Senior and subordinated notes 28,753 194 2.70 27,821 179 2.57 22,342 121 2.17
Other borrowings and liabilities 9,320 31 1.33 3,656 12 1.31 21,840 34 0.62
----- ----- ------
Total interest-bearing liabilities $268,808 $720 1.07 $264,289 $655 0.99 $258,484 $517 0.80
-------- ---- ---- -------- ---- ---- -------- ---- ----
Net interest income/spread $5,700 6.90 $5,473 6.72 $5,277 6.65
====== ====== ======
Impact of non-interest-bearing funding 0.18 0.16 0.14
Net interest margin 7.08% 6.88% 6.79%
==== ==== ====
Nine Months Ended September 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 $244,097 $17,255 9.43% $232,064 $15,616 8.97%
Investment securities 68,862 1,280 2.48 65,735 1,206 2.45
Cash equivalents and other 6,538 83 1.69 6,624 60 1.21
Total interest-earning assets $319,497 $18,618 7.77 $304,423 $16,882 7.39
-------- ------- -------- -------
Interest-bearing liabilities:
Interest-bearing deposits $213,508 $1,145 0.72 $195,565 $881 0.60
Securitized debt obligations 17,726 236 1.78 15,997 151 1.26
Senior and subordinated notes 27,140 522 2.56 22,019 338 2.05
Other borrowings and liabilities 8,434 68 1.08 19,099 86 0.60
Total interest-bearing liabilities $266,808 $1,971 0.98 $252,680 $1,456 0.77
-------- ------ ---- -------- ------ ----
Net interest income/spread $16,647 6.79 $15,426 6.62
======= =======
Impact of non-interest-bearing funding 0.16 0.14
---- ----
Net interest margin 6.95% 6.76%
==== ====
__________
(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 Q3 vs Nine Months Ended September 30,
(Dollars in millions, except as noted) 2017 2017 2017 2016 2016 2017 2016 2017 2016 2017 vs.
Q3 Q2 Q1 Q4 Q3 Q2 Q3 2016
--- --- --- --- --- --- --- --- ----
Loans Held For Investment (Period-End)
-------------------------------------
Credit card:
Domestic credit card $99,981 $92,866 $91,092 $97,120 $90,955 8% 10% $99,981 $90,955 10%
International card businesses 9,149 8,724 8,121 8,432 8,246 5 11 9,149 8,246 11
----- ----- ----- ----- ----- ----- -----
Total credit card 109,130 101,590 99,213 105,552 99,201 7 10 109,130 99,201 10
------- ------- ------ ------- ------ ------- ------
Consumer banking:
Auto 53,290 51,765 49,771 47,916 46,311 3 15 53,290 46,311 15
Home loan 18,820 19,724 20,738 21,584 22,448 (5) (16) 18,820 22,448 (16)
Retail banking 3,454 3,484 3,473 3,554 3,526 (1) (2) 3,454 3,526 (2)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 75,564 74,973 73,982 73,054 72,285 1 5 75,564 72,285 5
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 27,944 27,428 27,218 26,609 26,507 2 5 27,944 26,507 5
Commercial and industrial 39,306 39,801 39,638 39,824 39,432 (1) - 39,306 39,432 -
------ ------ ------ ------ ------ ------ ------
Total commercial lending 67,250 67,229 66,856 66,433 65,939 - 2 67,250 65,939 2
Small-ticket commercial real estate 420 443 464 483 518 (5) (19) 420 518 (19)
--- --- --- --- --- --- ---
Total commercial banking 67,670 67,672 67,320 66,916 66,457 - 2 67,670 66,457 2
------ ------ ------ ------ ------ ------ ------
Other loans 58 67 73 64 76 (13) (24) 58 76 (24)
Total loans held for investment $252,422 $244,302 $240,588 $245,586 $238,019 3 6 $252,422 $238,019 6
======== ======== ======== ======== ======== ======== ========
Loans Held For Investment (Average)
----------------------------------
Credit card:
Domestic credit card $93,729 $91,769 $93,034 $92,623 $89,763 2% 4% $92,847 $86,974 7%
International card businesses 8,816 8,274 8,135 8,168 8,253 7 7 8,411 8,165 3
----- ----- ----- ----- ----- ----- -----
Total credit card 102,545 100,043 101,169 100,791 98,016 3 5 101,258 95,139 6
------- ------- ------- ------- ------ ------- ------
Consumer banking:
Auto 52,615 50,803 48,673 47,126 45,355 4 16 50,711 43,647 16
Home loan 19,302 20,203 21,149 21,984 22,852 (4) (16) 20,211 23,819 (15)
Retail banking 3,446 3,463 3,509 3,549 3,520 - (2) 3,473 3,540 (2)
----- ----- ----- ----- ----- ----- -----
Total consumer banking 75,363 74,469 73,331 72,659 71,727 1 5 74,395 71,006 5
------ ------ ------ ------ ------ ------ ------
Commercial banking:
Commercial and multifamily real estate 27,703 27,401 26,587 26,445 26,154 1 6 27,235 25,612 6
Commercial and industrial 39,723 39,815 39,877 39,573 39,346 - 1 39,804 38,610 3
------ ------ ------ ------ ------ ------ ------
Total commercial lending 67,426 67,216 66,464 66,018 65,500 - 3 67,039 64,222 4
Small-ticket commercial real estate 433 453 474 497 534 (4) (19) 453 565 (20)
--- --- --- --- --- --- ---
Total commercial banking 67,859 67,669 66,938 66,515 66,034 - 3 67,492 64,787 4
------ ------ ------ ------ ------ ------ ------
Other loans 55 60 67 62 66 (8) (17) 60 72 (17)
Total average loans held for investment $245,822 $242,241 $241,505 $240,027 $235,843 1 4 $243,205 $231,004 5
======== ======== ======== ======== ======== ======== ========
2017 Q3 vs Nine Months Ended September 30,
-------------------------------
2017 2017 2017 2016 2016 2017 2016 2017 2016 2017 vs.
Q3 Q2 Q1 Q4 Q3 Q2 Q3 2016
--- --- --- --- --- --- --- ----
Net Charge-Off (Recovery) Rates
-------------------------------
Credit card:
Domestic credit card(1) 4.64% 5.11% 5.14% 4.66% 3.74% (47) bps 90 bps 4.96% 3.99% 97 bps
International card businesses 3.08 4.08 3.69 3.35 3.18 (100) (10) 3.60 3.32 28
Total credit card(1) 4.51 5.02 5.02 4.56 3.70 (51) 81 4.85 3.93 92
Consumer banking:
Auto 1.96 1.70 1.64 2.07 1.85 26 11 1.77 1.55 22
Home loan 0.02 0.04 0.03 0.08 0.03 (2) (1) 0.03 0.05 (2)
Retail banking 2.10 1.71 1.92 1.73 1.75 39 35 1.91 1.46 45
Total consumer banking 1.47 1.25 1.19 1.45 1.26 22 21 1.30 1.04 26
Commercial banking:
Commercial and multifamily real estate (0.01) 0.03 - (0.02) 0.01 (4) (2) 0.01 (0.01) 2
Commercial and industrial 1.64 1.34 0.22 0.80 1.09 30 55 1.07 0.74 33
Total commercial lending 0.97 0.81 0.13 0.47 0.66 16 31 0.64 0.44 20
Small-ticket commercial real estate 0.12 (0.22) 1.05 (0.02) 0.74 34 (62) 0.33 0.39 (6)
Total commercial banking 0.96 0.80 0.14 0.47 0.66 16 30 0.64 0.44 20
Total net charge-offs 2.61 2.67 2.50 2.48 2.10 (6) 51 2.60 2.06 54
---------------------
30+ Day Performing Delinquency Rates
------------------------------------
Credit card:
Domestic credit card(1) 3.94% 3.63% 3.71% 3.95% 3.68% 31 bps 26 bps 3.94% 3.68% 26 bps
International card businesses 3.54 3.28 3.39 3.36 3.33 26 21 3.54 3.33 21
Total credit card(1) 3.91 3.60 3.68 3.91 3.65 31 26 3.91 3.65 26
Consumer banking:
Auto 5.71 5.40 5.03 6.12 5.67 31 4 5.71 5.67 4
Home loan 0.17 0.14 0.15 0.20 0.19 3 (2) 0.17 0.19 (2)
Retail banking 0.73 0.54 0.59 0.70 0.59 19 14 0.73 0.59 14
Total consumer banking 4.10 3.79 3.45 4.10 3.72 31 38 4.10 3.72 38
----------------------
Nonperforming Loans and Nonperforming Assets Rates(2)(3)
-------------------------------------------------------
Credit card:
International card businesses 0.28% 0.37% 0.47% 0.50% 0.53% (9) bps (25) bps 0.28% 0.53% (25) bps
Total credit card 0.02 0.03 0.04 0.04 0.04 (1) (2) 0.02 0.04 (2)
Consumer banking:
Auto 0.65 0.53 0.36 0.47 0.43 12 22 0.65 0.43 22
Home loan 0.84 1.31 1.27 1.26 1.23 (47) (39) 0.84 1.23 (39)
Retail banking 0.97 0.96 0.82 0.86 1.05 1 (8) 0.97 1.05 (8)
Total consumer banking 0.71 0.75 0.64 0.72 0.71 (4) - 0.71 0.71 -
Commercial banking:
Commercial and multifamily real estate 0.23 0.13 0.13 0.11 0.08 10 15 0.23 0.08 15
Commercial and industrial 1.82 1.62 2.02 2.48 2.44 20 (62) 1.82 2.44 (62)
Total commercial lending 1.16 1.01 1.25 1.53 1.49 15 (33) 1.16 1.49 (33)
Small-ticket commercial real estate 1.59 1.89 1.65 0.85 2.13 (30) (54) 1.59 2.13 (54)
Total commercial banking 1.16 1.01 1.25 1.53 1.50 15 (34) 1.16 1.50 (34)
Total nonperforming loans 0.54 0.53 0.57 0.65 0.66 1 (12) 0.54 0.66 (12)
Total nonperforming assets 0.60 0.60 0.66 0.76 0.77 - (17) 0.60 0.77 (17)
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity
Three Months Ended September 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 June 30, 2017 $4,825 $385 $5,210 $1,066 $59 $74 $1,199 $758 $3 $7,170
Charge-offs (1,351) (120) (1,471) (411) (2) (22) (435) (168) (36) (2,110)
Recoveries 264 52 316 154 1 4 159 5 24 504
--- --- --- --- --- --- --- --- --- ---
Net charge-offs (1,087) (68) (1,155) (257) (1) (18) (276) (163) (12) (1,606)
Provision for loan and lease losses 1,417 49 1,466 274 3 15 292 75 11 1,844
Allowance build (release) for loan and lease losses 330 (19) 311 17 2 (3) 16 (88) (1) 238
Other changes(5) - 13 13 - (2) - (2) (1) - 10
Balance as of September 30, 2017 5,155 379 5,534 1,083 59 71 1,213 669 2 7,418
----- --- ----- ----- --- --- ----- --- --- -----
Reserve for unfunded lending commitments:
Balance as of June 30, 2017 - - - - - 7 7 132 - 139
Provision (benefit) for losses on unfunded lending commitments - - - - - 1 1 (12) - (11)
Balance as of September 30, 2017 - - - - - 8 8 120 - 128
Combined allowance and reserve as of September 30, 2017 $5,155 $379 $5,534 $1,083 $59 $79 $1,221 $789 $2 $7,546
====== ==== ====== ====== === === ====== ==== === ======
Nine Months Ended September 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 (4,289) (355) (4,644) (1,119) (9) (61) (1,189) (334) (36) (6,203)
Recoveries 834 128 962 448 4 11 463 12 32 1,469
--- --- --- --- --- --- --- --- --- -----
Net charge-offs (3,455) (227) (3,682) (671) (5) (50) (726) (322) (4) (4,734)
Provision for loan and lease losses 4,381 199 4,580 797 1 41 839 210 4 5,633
Allowance build (release) for loan and lease losses 926 (28) 898 126 (4) (9) 113 (112) - 899
Other changes(5) - 30 30 - (2) - (2) (12) - 16
Balance as of September 30, 2017 5,155 379 5,534 1,083 59 71 1,213 669 2 7,418
----- --- ----- ----- --- --- ----- --- --- -----
Reserve for unfunded lending commitments:
Balance as of December 31, 2016 - - - - - 7 7 129 - 136
Provision (benefit) for losses on unfunded lending commitments - - - - - 1 1 (9) - (8)
Balance as of September 30, 2017 - - - - - 8 8 120 - 128
Combined allowance and reserve as of September 30, 2017 $5,155 $379 $5,534 $1,083 $59 $79 $1,221 $789 $2 $7,546
====== ==== ====== ====== === === ====== ==== === ======
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial Summary-Business Segment Results
Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017
(Dollars in millions) Credit Card Consumer Commercial Other Total Credit Card Consumer Commercial
Banking Banking Banking Banking Other Total
-------------------- ----------- --------- ----------- ----- ----- ----------- --------- ----------- ----- -----
Net interest income $3,440 $1,649 $560 $51 $5,700 $10,080 $4,744 $1,695 $128 $16,647
Non-interest income 865 192 179 49 1,285 2,478 570 520 9 3,577
--- --- --- --- ----- --- --- --- -----
Total net revenue(6) 4,305 1,841 739 100 6,985 12,558 5,314 2,215 137 20,224
Provision for credit losses 1,466 293 63 11 1,833 4,580 840 201 4 5,625
Non-interest expense 1,961 1,051 394 161 3,567 5,808 3,152 1,166 289 10,415
----- ----- --- --- ----- ----- ----- ----- --- ------
Income (loss) from continuing operations before income taxes 878 497 282 (72) 1,585 2,170 1,322 848 (156) 4,184
Income tax provision (benefit) 306 181 103 (142) 448 774 482 310 (361) 1,205
--- -----
Income from continuing operations, net of tax $572 $316 $179 $70 $1,137 $1,396 $840 $538 $205 $2,979
==== ==== ==== === ====== ====== ==== ==== ==== ======
Three Months Ended June 30, 2017
(Dollars in millions) Credit Card Consumer Commercial
Banking Banking Other Total
-------------------- ----------- --------- ----------- ----- -----
Net interest income $3,294 $1,578 $569 $32 $5,473
Non-interest income 875 183 183 (10) 1,231
--- --- --- ---
Total net revenue(6) 4,169 1,761 752 22 6,704
Provision (benefit) for credit losses 1,397 268 140 (5) 1,800
Non-interest expense 1,918 1,059 381 56 3,414
----- ----- --- --- -----
Income (loss) from continuing operations before income taxes 854 434 231 (29) 1,490
Income tax provision (benefit) 301 158 85 (101) 443
---
Income from continuing operations, net of tax $553 $276 $146 $72 $1,047
==== ==== ==== === ======
Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
(Dollars in millions) Credit Card Consumer Commercial Other Total Credit Card Consumer Commercial
Banking Banking Banking Banking Other Total
-------------------- ----------- --------- ----------- ----- ----- ----------- --------- ----------- ----- -----
Net interest income $3,204 $1,472 $555 $46 $5,277 $9,282 $4,331 $1,651 $162 $15,426
Non-interest income 825 201 156 2 1,184 2,531 567 403 8 3,509
--- --- --- --- ----- --- --- --- -----
Total net revenue(6) 4,029 1,673 711 48 6,461 11,813 4,898 2,054 170 18,935
Provision (benefit) for credit losses 1,272 256 61 (1) 1,588 3,604 690 417 (4) 4,707
Non-interest expense 1,884 1,034 349 94 3,361 5,630 3,030 1,014 205 9,879
----- ----- --- --- ----- ----- ----- ----- --- -----
Income (loss) from continuing operations before income taxes 873 383 301 (45) 1,512 2,579 1,178 623 (31) 4,349
Income tax provision (benefit) 318 139 110 (71) 496 931 428 227 (214) 1,372
--- -----
Income from continuing operations, net of tax $555 $244 $191 $26 $1,016 $1,648 $750 $396 $183 $2,977
==== ==== ==== === ====== ====== ==== ==== ==== ======
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary-Credit Card Business
2017 Q3 vs Nine Months Ended September 30,
2017 2017 2017 2016 2016 2017 2016 2017 vs
(Dollars in millions, except as noted) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Credit Card
-----------
Earnings:
Net interest income $3,440 $3,294 $3,346 $3,353 $3,204 4% 7% $10,080 $9,282 9%
Non-interest income 865 875 738 849 825 (1) 5 2,478 2,531 (2)
--- --- --- --- --- ----- -----
Total net revenue 4,305 4,169 4,084 4,202 4,029 3 7 12,558 11,813 6
Provision for credit losses 1,466 1,397 1,717 1,322 1,272 5 15 4,580 3,604 27
Non-interest expense 1,961 1,918 1,929 2,073 1,884 2 4 5,808 5,630 3
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 878 854 438 807 873 3 1 2,170 2,579 (16)
Income tax provision 306 301 167 295 318 2 (4) 774 931 (17)
Income from continuing operations, net of tax $572 $553 $271 $512 $555 3 3 $1,396 $1,648 (15)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $109,130 $101,590 $99,213 $105,552 $99,201 7 10 $109,130 $99,201 10
Average loans held for investment 102,545 100,043 101,169 100,791 98,016 3 5 101,258 95,139 6
Average yield on loans held for investment(7) 15.58% 15.14% 14.99% 14.93% 14.68% 44 bps 90 bps 15.24% 14.59% 65 bps
Total net revenue margin(8) 16.79 16.67 16.14 16.68 16.44 12 35 16.54 16.56 (2)
Net charge-off rate(1) 4.51 5.02 5.02 4.56 3.70 (51) 81 4.85 3.93 92
30+ day performing delinquency rate(1) 3.91 3.60 3.68 3.91 3.65 31 26 3.91 3.65 26
30+ day delinquency rate 3.92 3.62 3.71 3.94 3.69 30 23 3.92 3.69 23
Nonperforming loan rate(2) 0.02 0.03 0.04 0.04 0.04 (1) (2) 0.02 0.04 (2)
PCCR intangible amortization $43 $44 $44 $58 $62 (2)% (31)% $131 $199 (34)%
Purchase volume(9) 84,505 83,079 73,197 82,824 78,106 2 8 240,781 224,314 7
2017 Q3 vs Nine Months Ended September 30,
2017 2017 2017 2016 2016 2017 2016 2017 vs
(Dollars in millions, except as noted) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Domestic Card
-------------
Earnings:
Net interest income $3,132 $3,011 $3,093 $3,090 $2,956 4% 6% $9,236 $8,481 9%
Non-interest income 787 802 699 791 759 (2) 4 2,288 2,325 (2)
----- -----
Total net revenue 3,919 3,813 3,792 3,881 3,715 3 5 11,524 10,806 7
Provision for credit losses 1,417 1,327 1,637 1,229 1,190 7 19 4,381 3,326 32
Non-interest expense 1,754 1,727 1,717 1,859 1,696 2 3 5,198 5,036 3
----- -----
Income from continuing operations before income taxes 748 759 438 793 829 (1) (10) 1,945 2,444 (20)
Income tax provision 273 277 160 288 302 (1) (10) 710 890 (20)
Income from continuing operations, net of tax $475 $482 $278 $505 $527 (1) (10) $1,235 $1,554 (21)
==== ==== ==== ==== ==== ====== ======
Selected performance metrics:
Period-end loans held for investment $99,981 $92,866 $91,092 $97,120 $90,955 8 10 $99,981 $90,955 10
Average loans held for investment 93,729 91,769 93,034 92,623 89,763 2 4 92,847 86,974 7
Average yield on loans held for investment(7) 15.51% 15.07% 15.01% 14.91% 14.71% 44 bps 80 bps 15.20% 14.51% 69 bps
Total net revenue margin(8) 16.72 16.62 16.30 16.76 16.55 10 17 16.55 16.57 (2)
Net charge-off rate(1) 4.64 5.11 5.14 4.66 3.74 (47) 90 4.96 3.99 97
30+ day delinquency rate 3.94 3.63 3.71 3.95 3.68 31 26 3.94 3.68 26
Purchase volume(9) $76,806 $75,781 $66,950 $75,639 $71,331 1% 8% $219,537 $204,998 7%
Refreshed FICO scores:(10)
Greater than 660 65% 64% 63% 64% 64% 1 1 65% 64% 1
660 or below 35 36 37 36 36 (1) (1) 35 36 (1)
Total 100% 100% 100% 100% 100% 100% 100%
=== === === === === === ===
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary-Consumer Banking Business
2017 Q3 vs Nine Months Ended September 30,
2017 2017 2017 2016 2016 2017 2016 2017 vs
(Dollars in millions, except as noted) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Consumer Banking
----------------
Earnings:
Net interest income $1,649 $1,578 $1,517 $1,498 $1,472 4% 12% $4,744 $4,331 10%
Non-interest income 192 183 195 166 201 5 (4) 570 567 1
--- --- --- --- --- --- ---
Total net revenue 1,841 1,761 1,712 1,664 1,673 5 10 5,314 4,898 8
Provision for credit losses 293 268 279 365 256 9 14 840 690 22
Non-interest expense 1,051 1,059 1,042 1,109 1,034 (1) 2 3,152 3,030 4
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before income taxes 497 434 391 190 383 15 30 1,322 1,178 12
Income tax provision 181 158 143 70 139 15 30 482 428 13
--- --- --- --- --- --- ---
Income from continuing operations, net of tax $316 $276 $248 $120 $244 14 30 $840 $750 12
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $75,564 $74,973 $73,982 $73,054 $72,285 1 5 $75,564 $72,285 5
Average loans held for investment 75,363 74,469 73,331 72,659 71,727 1 5 74,395 71,006 5
Average yield on loans held for investment(7) 6.79% 6.56% 6.48% 6.50% 6.41% 23 bps 38 bps 6.61% 6.29% 32 bps
Auto loan originations $7,043 $7,453 $7,025 $6,542 $6,804 (6)% 4% $21,521 $19,177 12%
Period-end deposits 184,719 186,607 188,216 181,917 178,793 (1) 3 184,719 178,793 3
Average deposits 185,072 186,989 183,936 180,019 177,402 (1) 4 185,336 176,159 5
Average deposits interest rate 0.62% 0.59% 0.57% 0.57% 0.56% 3 bps 6 bps 0.60% 0.55% 5 bps
Net charge-off rate 1.47 1.25 1.19 1.45 1.26 22 21 1.30 1.04 26
30+ day performing delinquency rate 4.10 3.79 3.45 4.10 3.72 31 38 4.10 3.72 38
30+ day delinquency rate 4.61 4.33 3.93 4.67 4.26 28 35 4.61 4.26 35
Nonperforming loan rate(2) 0.71 0.75 0.64 0.72 0.71 (4) - 0.71 0.71 -
Nonperforming asset rate(3) 0.88 0.96 0.92 1.09 0.98 (8) (10) 0.88 0.98 (10)
Auto-At origination FICO scores:(11)
Greater than 660 51% 51% 51% 52% 51% - - 51% 51% -
621 - 660 18 18 18 17 17 - 1% 18 17 1%
620 or below 31 31 31 31 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 Q3 vs Nine Months Ended September 30,
2017 2017 2017 2016 2016 2017 2016 2017 vs
(Dollars in millions, except as noted) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
------------------------------------- --- --- --- --- --- --- --- ---- ---- ----
Commercial Banking
------------------
Earnings:
Net interest income $560 $569 $566 $565 $555 (2)% 1% $1,695 $1,651 3%
Non-interest income 179 183 158 175 156 (2) 15 520 403 29
--- --- --- --- --- --- ---
Total net revenue(6) 739 752 724 740 711 (2) 4 2,215 2,054 8
Provision (benefit) for credit losses 63 140 (2) 66 61 (55) 3 201 417 (52)
Non-interest expense 394 381 391 393 349 3 13 1,166 1,014 15
--- --- --- --- ---
Income from continuing operations before income taxes 282 231 335 281 301 22 (6) 848 623 36
Income tax provision 103 85 122 102 110 21 (6) 310 227 37
Income from continuing operations, net of tax $179 $146 $213 $179 $191 23 (6) $538 $396 36
==== ==== ==== ==== ==== ==== ====
Selected performance metrics:
Period-end loans held for investment $67,670 $67,672 $67,320 $66,916 $66,457 - 2 $67,670 $66,457 2
Average loans held for investment 67,859 67,669 66,938 66,515 66,034 - 3 67,492 64,787 4
Average yield on loans held for investment(6)(7) 3.98% 3.81% 3.65% 3.55% 3.50% 17 bps 48 bps 3.81% 3.45% 36 bps
Period-end deposits $32,783 $33,153 $33,735 $33,866 $33,611 (1)% (2)% $32,783 $33,611 (2)%
Average deposits 33,197 34,263 34,219 34,029 33,498 (3) (1) 33,890 33,778 -
Average deposits interest rate 0.42% 0.36% 0.31% 0.30% 0.30% 6 bps 12 bps 0.37% 0.28% 9 bps
Net charge-off rate 0.96 0.80 0.14 0.47 0.66 16 30 0.64 0.44 20
Nonperforming loan rate(2) 1.16 1.01 1.25 1.53 1.50 15 (34) 1.16 1.50 (34)
Nonperforming asset rate(3) 1.22 1.04 1.27 1.54 1.51 18 (29) 1.22 1.51 (29)
Risk category:(12)
Noncriticized $63,501 $63,802 $63,390 $62,828 $62,336 - 2% $63,501 $62,336 2%
Criticized performing 2,878 2,660 2,492 2,453 2,473 8% 16 2,878 2,473 16
Criticized nonperforming 788 686 844 1,022 994 15 (21) 788 994 (21)
PCI loans 503 524 594 613 654 (4) (23) 503 654 (23)
--- ---
Total commercial loans $67,670 $67,672 $67,320 $66,916 $66,457 - 2 $67,670 $66,457 2
======= ======= ======= ======= ======= ======= =======
Risk category as a percentage of period-end loans held for investment:(12)
Noncriticized 93.8% 94.3% 94.2% 93.9% 93.8% (50) bps - 93.8% 93.8% -
Criticized performing 4.3 3.9 3.7 3.7 3.7 40 60 bps 4.3 3.7 60 bps
Criticized nonperforming 1.2 1.0 1.2 1.5 1.5 20 (30) 1.2 1.5 (30)
PCI loans 0.7 0.8 0.9 0.9 1.0 (10) (30) 0.7 1.0 (30)
--- ---
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 Q3 vs Nine Months Ended September 30,
2017 2017 2017 2016 2016 2017 2016 2017 vs
(Dollars in millions) Q3 Q2 Q1 Q4 Q3 Q2 Q3 2017 2016 2016
--- --- --- --- --- --- --- ---- ---- ----
Other
-----
Earnings:
Net interest income $51 $32 $45 $31 $46 59% 11% $128 $162 (21)%
Non-interest income 49 (10) (30) (71) 2 ** ** 9 8 13
--- --- --- --- --- --- ---
Total net revenue (loss)(6) 100 22 15 (40) 48 ** 108 137 170 (19)
Provision (benefit) for credit losses 11 (5) (2) (1) (1) ** ** 4 (4) **
Non-interest expense(13) 161 56 72 104 94 188 71 289 205 41
--- --- --- --- --- --- ---
Loss from continuing operations before income taxes (72) (29) (55) (143) (45) 148 60 (156) (31) **
Income tax benefit (142) (101) (118) (125) (71) 41 100 (361) (214) 69
---- ---- ---- ---- --- ---- ----
Income (loss) from continuing operations, net of tax $70 $72 $63 $(18) $26 (3) 169 $205 $183 12
=== === === ==== === ==== ====
Selected performance metrics:
Period-end loans held for investment $58 $67 $73 $64 $76 (13) (24) $58 $76 (24)
Average loans held for investment 55 60 67 62 66 (8) (17) 60 72 (17)
Period-end deposits 21,560 20,003 19,231 20,985 13,577 8 59 21,560 13,577 59
Average deposits 20,574 19,298 20,395 18,156 11,351 7 81 20,090 10,927 84
Total
-----
Earnings:
Net interest income $5,700 $5,473 $5,474 $5,447 $5,277 4% 8% $16,647 $15,426 8%
Non-interest income 1,285 1,231 1,061 1,119 1,184 4 9 3,577 3,509 2
----- ----- ----- ----- ----- ----- -----
Total net revenue 6,985 6,704 6,535 6,566 6,461 4 8 20,224 18,935 7
Provision for credit losses 1,833 1,800 1,992 1,752 1,588 2 15 5,625 4,707 20
Non-interest expense 3,567 3,414 3,434 3,679 3,361 4 6 10,415 9,879 5
----- ----- ----- ----- ----- ------ -----
Income from continuing operations before income taxes 1,585 1,490 1,109 1,135 1,512 6 5 4,184 4,349 (4)
Income tax provision 448 443 314 342 496 1 (10) 1,205 1,372 (12)
--- --- --- --- --- ----- -----
Income from continuing operations, net of tax $1,137 $1,047 $795 $793 $1,016 9 12 $2,979 $2,977 -
====== ====== ==== ==== ====== ====== ======
Selected performance metrics:
Period-end loans held for investment $252,422 $244,302 $240,588 $245,586 $238,019 3 6 $252,422 $238,019 6
Average loans held for investment 245,822 242,241 241,505 240,027 235,843 1 4 243,205 231,004 5
Period-end deposits 239,062 239,763 241,182 236,768 225,981 - 6 239,062 225,981 6
Average deposits 238,843 240,550 238,550 232,204 222,251 (1) 7 239,316 220,864 8
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Notes to Loan, Allowance and Business
Segment Disclosures (Tables 7-13)
(1) On September 25, 2017, we completed
the Cabela's acquisition. The total
credit card and domestic credit card
metrics as of and for the three and
nine months ended September 30, 2017
include the impact of this
acquisition. Excluding this impact
(i) the total credit card and
domestic credit card net charge-off
rate for the three months ended
September 30, 2017 would have been
4.52% and 4.66%, respectively; (ii)
the total credit card and domestic
credit card net charge-off rate for
the nine months ended September 30,
2017 would have been 4.85% and 4.97%,
respectively; and (iii) the total
credit card and domestic credit card
30+ day performing delinquency rate
as of September 30, 2017 would have
been 4.10% and 4.15%, 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.
(13) Includes charges incurred as a result
of restructuring activities.
** 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) September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
--- ---- ---- ---- ----
Regulatory Capital Metrics
--------------------------
Common equity excluding AOCI $46,415 $45,459 $44,614 $44,103 $44,214
Adjustments:
AOCI(2)(3) (538) (593) (807) (674) 199
Goodwill, net of related deferred tax liabilities (14,300) (14,299) (14,302) (14,307) (14,288)
Intangible assets, net of related deferred tax liabilities(3) (372) (419) (465) (384) (435)
Other 93 78 121 65 (498)
Common equity Tier 1 capital $31,298 $30,226 $29,161 $28,803 $29,192
======= ======= ======= ======= =======
Tier 1 capital $35,657 $34,585 $33,519 $33,162 $33,069
Total capital(4) 43,272 42,101 40,979 40,817 40,564
Risk-weighted assets 292,041 283,231 279,302 285,756 275,198
Adjusted average assets(5) 340,579 335,248 336,990 335,835 328,627
-------------------------
Capital Ratios
--------------
Common equity Tier 1 capital(6) 10.7% 10.7% 10.4% 10.1% 10.6%
Tier 1 capital(7) 12.2 12.2 12.0 11.6 12.0
Total capital(8) 14.8 14.9 14.7 14.3 14.7
Tier 1 leverage(5) 10.5 10.3 9.9 9.9 10.1
Tangible common equity ("TCE")(9) 8.8 8.8 8.5 8.1 8.8
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 2017 Nine Months Ended
Q3 Q2 Q1 September 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 Reported Results Adj.(10) Adjusted Results
---------------- ------- ---------------- ---------------- ------- ---------------- ---------------- ------- ---------------- ---------------- ------- ----------------
Selected income statement data:
Net interest income $5,700 - $5,700 $5,473 - $5,473 $5,474 $33 $5,507 $16,647 $33 $16,680
Non-interest income 1,285 - 1,285 1,231 - 1,231 1,061 37 1,098 3,577 37 3,614
----- --- ----- ----- --- ----- ----- --- ----- ----- --- -----
Total net revenue 6,985 - 6,985 6,704 - 6,704 6,535 70 6,605 20,224 70 20,294
Provision for credit losses 1,833 $(88) 1,745 1,800 - 1,800 1,992 - 1,992 5,625 (88) 5,537
Non-interest expense 3,567 (125) 3,442 3,414 $(12) 3,402 3,434 (29) 3,405 10,415 (166) 10,249
Income from continuing operations before income taxes 1,585 213 1,798 1,490 12 1,502 1,109 99 1,208 4,184 324 4,508
Income tax provision (benefit) 448 79 527 443 4 447 314 (1) 313 1,205 82 1,287
--- --- --- --- --- --- --- --- --- ----- --- -----
Income from continuing operations, net of tax 1,137 134 1,271 1,047 8 1,055 795 100 895 2,979 242 3,221
Income (loss) from discontinued operations, net of tax (30) - (30) (11) - (11) 15 - 15 (26) - (26)
--- --- --- --- --- --- --- --- --- --- --- ---
Net income 1,107 134 1,241 1,036 8 1,044 810 100 910 2,953 242 3,195
Net income available to common stockholders 1,047 134 1,181 948 8 956 752 100 852 2,747 242 2,989
Selected performance metrics:
Diluted EPS(11) $2.14 $0.28 $2.42 $1.94 $0.02 $1.96 $1.54 $0.21 $1.75 $5.63 $0.49 $6.12
Efficiency ratio 51.07% (179) bps 49.28% 50.92% (17) bps 50.75% 52.55% (100) bps 51.55% 51.50% (100) bps 50.50%
2016 2016 Year Ended
Q4 Q3 December 31, 2016
(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 $5,447 $13 $5,460 $5,277 $34 $5,311 $20,873 $54 $20,927
Non-interest income 1,119 14 1,133 1,184 13 1,197 4,628 35 4,663
----- --- ----- ----- --- ----- ----- --- -----
Total net revenue 6,566 27 6,593 6,461 47 6,508 25,501 89 25,590
Provision for credit losses 1,752 - 1,752 1,588 - 1,588 6,459 - 6,459
Non-interest expense 3,679 (45) 3,634 3,361 (16) 3,345 13,558 (76) 13,482
----- --- ----- ----- --- ----- ------ --- ------
Income from continuing operations before income taxes 1,135 72 1,207 1,512 63 1,575 5,484 165 5,649
Income tax provision (benefit) 342 10 352 496 - 496 1,714 3 1,717
--- --- --- --- --- --- ----- --- -----
Income from continuing operations, net of tax 793 62 855 1,016 63 1,079 3,770 162 3,932
Income (loss) from discontinued operations, net of tax (2) - (2) (11) - (11) (19) - (19)
--- --- --- --- --- --- --- --- ---
Net income 791 62 853 1,005 63 1,068 3,751 162 3,913
Net income available to common stockholders 710 62 772 962 63 1,025 3,513 162 3,675
Selected performance metrics:
Diluted EPS(11) $1.45 $0.13 $1.58 $1.90 $0.13 $2.03 $6.89 $0.32 $7.21
Efficiency ratio 56.03% (91) bps 55.12% 52.02% (62) bps 51.40% 53.17% (49) bps 52.68%
2017 2017 2017 2016 2016
(Dollars in millions) Q3 Q2 Q1 Q4 Q3
--- --- --- --- ---
Tangible Common Equity (Period-End)
----------------------------------
Stockholders' equity $50,154 $49,137 $48,040 $47,514 $48,213
Goodwill and intangible assets(12) (15,249) (15,301) (15,360) (15,420) (15,475)
Noncumulative perpetual preferred stock (4,360) (4,360) (4,360) (4,360) (3,877)
------ ------
Tangible common equity $30,545 $29,476 $28,320 $27,734 $28,861
======= ======= ======= ======= =======
Tangible Common Equity (Average)
-------------------------------
Stockholders' equity $50,176 $49,005 $48,193 $47,972 $49,033
Goodwill and intangible assets(12) (15,277) (15,336) (15,395) (15,455) (15,507)
Noncumulative perpetual preferred stock (4,360) (4,360) (4,360) (4,051) (3,719)
Tangible common equity $30,539 $29,309 $28,438 $28,466 $29,807
======= ======= ======= ======= =======
Tangible Assets (Period-End)
---------------------------
Total assets $361,402 $350,593 $348,549 $357,033 $345,061
Goodwill and intangible assets(12) (15,249) (15,301) (15,360) (15,420) (15,475)
------- -------
Tangible assets $346,153 $335,292 $333,189 $341,613 $329,586
======== ======== ======== ======== ========
Tangible Assets (Average)
------------------------
Total assets $355,191 $349,891 $351,641 $350,225 $343,153
Goodwill and intangible assets(12) (15,277) (15,336) (15,395) (15,455) (15,507)
------- -------
Tangible assets $339,914 $334,555 $336,246 $334,770 $327,646
======== ======== ======== ======== ========
__________
(1) Regulatory capital metrics and capital ratios as of September 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 are 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) On September 25, 2017, we completed the Cabela's acquisition. The primary Q3 2017 impacts of this acquisition were charges
of $105 million which consisted of an initial quarterly allowance build related to the loans acquired and costs associated
with closing the acquisition. In Q3 2017, we also incurred charges of $108 million as a result of restructuring
activities. These restructuring activities primarily consisted of severance and related benefits pursuant to our ongoing
benefit programs which were the result of exiting certain business locations and activities as well as the realignment of
resources supporting our Credit Card and Consumer Banking businesses. In Q2 2017, we incurred $12 million of costs related
to our anticipated close of the Cabela's acquisition. In Q1 2017, we recorded a build in the U.K. Payment Protection
Insurance customer refund reserve ("U.K. PPI Reserve") of $99 million. 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.
(11) 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.
(12) Includes impact of related deferred taxes.
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SOURCE Capital One Financial Corporation
