Friday, 06 August 2021 12:21 GMT
HotForex Invest with an award winning Brand

Capital One Reports Second Quarter 2021 Net Income of $3.5 billion, or $7.62 per share


(MENAFN - PR Newswire) MCLEAN, Va., July 22, 2021 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF ) today announced net income for the second quarter of 2021 of $3.5 billion, or $7.62 per diluted common share, compared with net income of $3.3 billion, or $7.03 per diluted common share in the first quarter of 2021, and with a net loss of $918 million, or $2.21 per diluted common share in the second quarter of 2020. Excluding adjusting items, net income for the second quarter of 2021 was $7.71 per diluted common share.(1)

"We are seeing increasing near-term opportunities to build our franchise as we emerge from the pandemic," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "Our modern technology is powering our current performance and setting us up to capitalize on the accelerating digital revolution in banking."

The quarter included the following adjusting item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact

Legal reserve build

$

55

$

0.09

All comparisons below are for the second quarter of 2021 compared with the first quarter of 2021 unless otherwise noted.

Second Quarter 2021 Income Statement Summary:

  • Total net revenue increased 4 percent to $7.4 billion.
  • Total non-interest expense increased 6 percent to $4.0 billion:
    • 24 percent increase in marketing.
    • 3 percent increase in operating expenses.
  • Pre-provision earnings increased 1 percent to $3.4 billion.(2)
  • Provision (benefit) for credit losses decreased $337 million to $(1.2) billion:
    • Net charge-offs of $541 million.
    • $1.7 billion loan reserve release.
  • Net interest margin of 5.89 percent, a decrease of 10 basis points.
  • Efficiency ratio of 53.78 percent.
    • Efficiency ratio excluding adjusting items of 53.04 percent.(1)
  • Operating efficiency ratio of 45.38 percent.
    • Operating efficiency ratio excluding adjusting items of 44.63 percent.(1)

Second Quarter 2021 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 14.5 percent at June 30, 2021.
  • Period-end loans held for investment in the quarter increased $6.5 billion, or 3 percent, to $249.6 billion.
    • Credit Card period-end loans increased $1.9 billion, or 2 percent, to $101.0 billion.
      • Domestic Card period-end loans increased $4.2 billion, or 5 percent, to $95.3 billion.
    • Consumer Banking period-end loans increased $4.6 billion, or 6 percent, to $74.8 billion.
      • Auto period-end loans increased $4.7 billion, or 7 percent, to $71.7 billion.
    • Commercial Banking period-end loans increased $19 million, or less than 1 percent, to $73.8 billion.
  • Average loans held for investment in the quarter increased $2.5 billion, or 1 percent, to $246.5 billion.
    • Credit Card average loans decreased $860 million, or 1 percent, to $99.7 billion.
      • Domestic Card average loans decreased $1.1 billion, or 1 percent, to $91.5 billion.
    • Consumer Banking average loans increased $3.5 billion, or 5 percent, to $72.7 billion.
      • Auto average loans increased $3.4 billion, or 5 percent, to $69.5 billion.
    • Commercial Banking average loans decreased $85 million, or less than 1 percent, to $74.1 billion.
  • Period-end total deposits decreased $4.0 billion, or 1 percent, to $306.3 billion, while average deposits increased $3.2 billion, or 1 percent, to $308.2 billion.
  • Interest-bearing deposits rate paid decreased 4 basis points to 0.35 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, both in the current period and across periods. 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. Management believes that this financial metric is useful in enabling investors and others to assess the Company's ability to generate income to cover credit losses through a credit cycle, which can vary significantly between periods.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 22, 2021 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 ( ). Under "About," 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 5, 2021 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, 2020.

About Capital One

Capital One Financial Corporation ( ) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $306.3 billion in deposits and $423.4 billion in total assets as of June 30, 2021. 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 2021

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

7

Table 5:

Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)

10

Table 6:

Average Balances, Net Interest Income and Net Interest Margin

11

Table 7:

Loan Information and Performance Statistics

12

Table 8:

Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

14

Business Segment Results

Table 9:

Financial Summary—Business Segment Results

15

Table 10:

Financial & Statistical Summary—Credit Card Business

16

Table 11:

Financial & Statistical Summary—Consumer Banking Business

18

Table 12:

Financial & Statistical Summary—Commercial Banking Business

19

Table 13:

Financial & Statistical Summary—Other and Total

20

Other

Table 14:

Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)

21

Table 15:

Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures

22

__________

(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, 2021 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

2021 Q2 vs.

Six Months Ended June 30,

(Dollars in millions, except per share data and as noted)

2021

2021

2020

2020

2020

2021

2020

2021 vs.

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Income Statement

Net interest income

$

5,743

$

5,822

$

5,873

$

5,555

$

5,460

(1)

%

5

%

$

11,565

$

11,485

1

%

Non-interest income

1,631

1,291

1,464

1,826

1,096

26

49

2,922

2,320

26

Total net revenue(1)

7,374

7,113

7,337

7,381

6,556

4

12

14,487

13,805

5

Provision (benefit) for credit losses

(1,160)

(823)

264

331

4,246

41

**

(1,983)

9,669

**

Non-interest expense:

Marketing

620

501

563

283

273

24

127

1,121

764

47

Operating expense

3,346

3,239

3,446

3,265

3,497

3

(4)

6,585

6,735

(2)

Total non-interest expense

3,966

3,740

4,009

3,548

3,770

6

5

7,706

7,499

3

Income (loss) from continuing operations before income taxes

4,568

4,196

3,064

3,502

(1,460)

9

**

8,764

(3,363)

**

Income tax provision (benefit)

1,031

869

496

1,096

(543)

19

**

1,900

(1,106)

**

Income (loss) from continuing operations, net of tax

3,537

3,327

2,568

2,406

(917)

6

**

6,864

(2,257)

**

Loss from discontinued operations, net of tax

(1)

(2)

(2)

(1)

(50)

(3)

(1)

**

Net income (loss)

3,536

3,325

2,566

2,406

(918)

6

**

6,861

(2,258)

**

Dividends and undistributed earnings allocated to participating securities(2)

(30)

(28)

(19)

(20)

(1)

7

**

(58)

(4)

**

Preferred stock dividends

(60)

(61)

(68)

(67)

(90)

(2)

(33)

(121)

(145)

(17)

Issuance cost for redeemed preferred stock(3)

(17)

(22)

**

Net income (loss) available to common stockholders

$

3,446

$

3,236

$

2,462

$

2,319

$

(1,009)

6

**

$

6,682

$

(2,429)

**

Common Share Statistics

Basic earnings per common share:(2)

Net income (loss) from continuing operations

$

7.65

$

7.06

$

5.36

$

5.07

$

(2.21)

8

%

**

$

14.70

$

(5.31)

**

Net income (loss) per basic common share

$

7.65

$

7.06

$

5.36

$

5.07

$

(2.21)

8

**

$

14.70

$

(5.31)

**

Diluted earnings per common share:(2)

Net income (loss) from continuing operations

$

7.62

$

7.03

$

5.35

$

5.06

$

(2.21)

8

**

$

14.65

$

(5.31)

**

Net income (loss) per diluted common share

$

7.62

$

7.03

$

5.35

$

5.06

$

(2.21)

8

**

$

14.65

$

(5.31)

**

Weighted-average common shares outstanding (in millions):

Basic

450.6

458.6

459.1

457.8

456.7

(2)

(1)

%

454.6

457.1

(1)

%

Diluted

452.3

460.1

460.2

458.5

456.7

(2)

(1)

456.2

457.1

Common shares outstanding (period-end, in millions)

446.1

456.8

459.0

457.4

456.3

(2)

(2)

446.1

456.3

(2)

Dividends declared and paid per common share

$

0.40

$

0.40

$

0.10

$

0.10

$

0.40

$

0.80

$

0.80

Tangible book value per common share (period-end)(4)

97.20

90.96

88.34

83.67

78.82

7

23

97.20

78.82

23

2021 Q2 vs.

Six Months Ended June 30,

(Dollars in millions)

2021

2021

2020

2020

2020

2021

2020

2021 vs.

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Balance Sheet (Period-End)

Loans held for investment

$

249,597

$

243,131

$

251,624

$

248,223

$

251,512

3

%

(1)

%

$

249,597

$

251,512

(1)

%

Interest-earning assets

387,295

392,485

388,917

390,040

389,829

(1)

(1)

387,295

389,829

(1)

Total assets

423,420

425,175

421,602

421,883

421,296

1

423,420

421,296

1

Interest-bearing deposits

271,314

276,325

274,300

276,092

275,183

(2)

(1)

271,314

275,183

(1)

Total deposits

306,308

310,328

305,442

305,725

304,238

(1)

1

306,308

304,238

1

Borrowings

36,343

38,450

40,539

42,795

44,900

(5)

(19)

36,343

44,900

(19)

Common equity

58,136

56,341

55,356

53,093

50,835

3

14

58,136

50,835

14

Total stockholders' equity

64,624

61,188

60,204

58,424

56,045

6

15

64,624

56,045

15

Balance Sheet (Average Balances)

Loans held for investment

$

246,463

$

243,937

$

247,689

$

249,511

$

253,358

1

%

(3)

%

$

245,207

$

258,124

(5)

%

Interest-earning assets

390,129

388,572

388,252

391,451

378,145

3

389,355

366,746

6

Total assets

424,099

421,808

420,011

422,854

411,075

1

3

422,959

400,845

6

Interest-bearing deposits

273,476

273,358

274,142

276,339

261,256

5

273,417

251,185

9

Total deposits

308,217

305,056

304,513

305,516

288,344

1

7

306,645

276,498

11

Borrowings

37,054

39,911

40,662

44,161

49,827

(7)

(26)

38,475

50,810

(24)

Common equity

56,885

55,775

54,220

51,995

52,413

2

9

56,333

52,799

7

Total stockholders' equity

62,376

60,623

59,389

57,223

57,623

3

8

61,504

58,096

6

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated

2021 Q2 vs.

Six Months Ended June 30,

(Dollars in millions, except as noted)

2021

2021

2020

2020

2020

2021

2020

2021 vs.

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Performance Metrics

Net interest income growth (period over period)

(1)

%

(1)

%

6

%

2

%

(9)

%

**

**

1

%

**

Non-interest income growth (period over period)

26

(12)

(20)

67

(10)

**

**

26

(13)

%

**

Total net revenue growth (period over period)

4

(3)

(1)

13

(10)

**

**

5

(3)

**

Total net revenue margin(5)

7.56

7.32

7.56

7.54

6.93

24

bps

63

bps

7.44

7.53

(9)

bps

Net interest margin(6)

5.89

5.99

6.05

5.68

5.78

(10)

11

5.94

6.26

(32)

Return on average assets

3.34

3.16

2.45

2.28

(0.89)

18

4

%

3.25

(1.13)

4

%

Return on average tangible assets(7)

3.46

3.27

2.54

2.36

(0.93)

19

4

3.36

(1.17)

5

Return on average common equity(8)

24.24

23.22

18.18

17.84

(7.69)

102

32

23.73

(9.20)

33

Return on average tangible common equity(9)

32.75

31.61

25.02

24.98

(10.74)

114

43

32.19

(12.81)

45

Non-interest expense as a percentage of average loans held for investment

6.44

6.13

6.47

5.69

5.95

31

49

bps

6.29

5.81

48

bps

Efficiency ratio(10)

53.78

52.58

54.64

48.07

57.50

120

(4)

%

53.19

54.32

(113)

Operating efficiency ratio(11)

45.38

45.54

46.97

44.24

53.34

(16)

(8)

45.45

48.79

(334)

Effective income tax rate for continuing operations

22.6

20.7

16.2

31.3

37.2

190

(15)

21.7

32.9

(11)

%

Employees (period-end, in thousands)

52.0

51.7

52.0

52.5

53.1

1

%

(2)

52.0

53.1

(2)

Credit Quality Metrics

Allowance for credit losses

$

12,346

$

14,017

$

15,564

$

16,129

$

16,832

(12)

%

(27)

%

$

12,346

$

16,832

(27)

%

Allowance coverage ratio

4.95

%

5.77

%

6.19

%

6.50

%

6.69

%

(82)

bps

(174)

bps

4.95

%

6.69

%

(174)

bps

Net charge-offs

$

541

$

740

$

856

$

1,073

$

1,505

(27)

%

(64)

%

$

1,281

$

3,296

(61)

%

Net charge-off rate(12)

0.88

%

1.21

%

1.38

%

1.72

%

2.38

%

(33)

bps

(150)

bps

1.04

%

2.55

%

(151)

bps

30+ day performing delinquency rate(13)

1.75

1.82

2.41

1.97

2.09

(7)

(34)

1.75

2.09

(34)

30+ day delinquency rate(13)

1.89

1.98

2.61

2.22

2.30

(9)

(41)

1.89

2.30

(41)

Capital Ratios(14)

Common equity Tier 1 capital

14.5

%

14.6

%

13.7

%

13.0

%

12.4

%

(10)

bps

210

bps

14.5

%

12.4

%

210

bps

Tier 1 capital

16.6

16.2

15.3

14.8

14.2

40

240

16.6

14.2

240

Total capital

18.8

18.6

17.7

17.3

16.7

20

210

18.8

16.7

210

Tier 1 leverage

12.4

11.7

11.2

10.6

10.3

70

210

12.4

10.3

210

Tangible common equity ("TCE")(15)

10.6

10.1

10.0

9.4

8.8

50

180

10.6

8.8

180

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021 vs.

(Dollars in millions, except per share data and as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Interest income:

Loans, including loans held for sale

$

5,753

$

5,854

$

5,954

$

5,758

$

5,820

(2)

%

(1)

%

$

11,607

$

12,362

(6)

%

Investment securities

370

391

422

443

482

(5)

(23)

761

1,012

(25)

Other

16

16

15

14

16

32

53

(40)

Total interest income

6,139

6,261

6,391

6,215

6,318

(2)

(3)

12,400

13,427

(8)

Interest expense:

Deposits

237

269

347

476

611

(12)

(61)

506

1,342

(62)

Securitized debt obligations

28

32

34

43

56

(13)

(50)

60

155

(61)

Senior and subordinated notes

122

129

128

132

180

(5)

(32)

251

419

(40)

Other borrowings

9

9

9

9

11

(18)

18

26

(31)

Total interest expense

396

439

518

660

858

(10)

(54)

835

1,942

(57)

Net interest income

5,743

5,822

5,873

5,555

5,460

(1)

5

11,565

11,485

1

Provision (benefit) for credit losses

(1,160)

(823)

264

331

4,246

41

**

(1,983)

9,669

**

Net interest income after provision for credit losses

6,903

6,645

5,609

5,224

1,214

4

**

13,548

1,816

**

Non-interest income:

Interchange fees, net

1,016

817

818

775

672

24

51

1,833

1,424

29

Service charges and other customer-related fees

384

352

338

320

258

9

49

736

585

26

Net securities gains

4

25

**

4

**

Other

231

118

308

706

166

96

39

349

311

12

Total non-interest income

1,631

1,291

1,464

1,826

1,096

26

49

2,922

2,320

26

Non-interest expense:

Salaries and associate benefits

1,781

1,847

1,755

1,719

1,704

(4)

5

3,628

3,331

9

Occupancy and equipment

523

472

572

506

523

11

995

1,040

(4)

Marketing

620

501

563

283

273

24

127

1,121

764

47

Professional services

341

292

394

327

304

17

12

633

591

7

Communications and data processing

315

302

295

310

308

4

2

617

610

1

Amortization of intangibles

5

6

8

14

16

(17)

(69)

11

38

(71)

Other

381

320

422

389

642

19

(41)

701

1,125

(38)

Total non-interest expense

3,966

3,740

4,009

3,548

3,770

6

5

7,706

7,499

3

Income (loss) from continuing operations before income taxes

4,568

4,196

3,064

3,502

(1,460)

9

**

8,764

(3,363)

**

Income tax provision (benefit)

1,031

869

496

1,096

(543)

19

**

1,900

(1,106)

**

Income (loss) from continuing operations, net of tax

3,537

3,327

2,568

2,406

(917)

6

**

6,864

(2,257)

**

Loss from discontinued operations, net of tax

(1)

(2)

(2)

(1)

(50)

(3)

(1)

**

Net income (loss)

3,536

3,325

2,566

2,406

(918)

6

**

6,861

(2,258)

**

Dividends and undistributed earnings allocated to participating securities(2)

(30)

(28)

(19)

(20)

(1)

7

**

(58)

(4)

**

Preferred stock dividends

(60)

(61)

(68)

(67)

(90)

(2)

(33)

(121)

(145)

(17)

Issuance cost for redeemed preferred stock(3)

(17)

(22)

**

Net income (loss) available to common stockholders

$

3,446

$

3,236

$

2,462

$

2,319

$

(1,009)

6

**

$

6,682

$

(2,429)

**

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021 vs.

(Dollars in millions, except per share data and as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Basic earnings per common share:(2)

Net income (loss) from continuing operations

$

7.65

$

7.06

$

5.36

$

5.07

$

(2.21)

8

%

**

$

14.70

$

(5.31)

**

Net income (loss) per basic common share

$

7.65

$

7.06

$

5.36

$

5.07

$

(2.21)

8

**

$

14.70

$

(5.31)

**

Diluted earnings per common share:(2)

Net income (loss) from continuing operations

$

7.62

$

7.03

$

5.35

$

5.06

$

(2.21)

8

**

$

14.65

$

(5.31)

**

Net income (loss) per diluted common share

$

7.62

$

7.03

$

5.35

$

5.06

$

(2.21)

8

**

$

14.65

$

(5.31)

**

Weighted-average common shares outstanding (in millions):

Basic common shares

450.6

458.6

459.1

457.8

456.7

(2)

(1)

%

454.6

457.1

(1)

%

Diluted common shares

452.3

460.1

460.2

458.5

456.7

(2)

(1)

456.2

457.1

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets

2021 Q2 vs.

2021

2021

2020

2020

2020

2021

2020

(Dollars in millions)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

Assets:

Cash and cash equivalents:

Cash and due from banks

$

5,312

$

4,670

$

4,708

$

4,267

$

4,583

14

%

16

%

Interest-bearing deposits and other short-term investments

29,534

45,825

35,801

39,839

51,235

(36)

(42)

Total cash and cash equivalents

34,846

50,495

40,509

44,106

55,818

(31)

(38)

Restricted cash for securitization investors

242

1,779

262

895

740

(86)

(67)

Securities available for sale

101,766

99,165

100,445

99,853

87,859

3

16

Loans held for investment:

Unsecuritized loans held for investment

226,130

219,182

225,698

217,878

222,310

3

2

Loans held in consolidated trusts

23,467

23,949

25,926

30,345

29,202

(2)

(20)

Total loans held for investment

249,597

243,131

251,624

248,223

251,512

3

(1)

Allowance for credit losses

(12,346)

(14,017)

(15,564)

(16,129)

(16,832)

(12)

(27)

Net loans held for investment

237,251

229,114

236,060

232,094

234,680

4

1

Loans held for sale

6,522

2,896

2,710

3,433

711

125

**

Premises and equipment, net

4,227

4,277

4,287

4,333

4,324

(1)

(2)

Interest receivable

1,372

1,380

1,471

1,551

1,574

(1)

(13)

Goodwill

14,654

14,654

14,653

14,648

14,645

Other assets

22,540

21,415

21,205

20,970

20,945

5

8

Total assets

$

423,420

$

425,175

$

421,602

$

421,883

$

421,296

1

2021 Q2 vs.

2021

2021

2020

2020

2020

2021

2020

(Dollars in millions)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

Liabilities:

Interest payable

$

301

$

288

$

352

$

332

$

380

5

%

(21)

%

Deposits:

Non-interest-bearing deposits

34,994

34,003

31,142

29,633

29,055

3

20

Interest-bearing deposits

271,314

276,325

274,300

276,092

275,183

(2)

(1)

Total deposits

306,308

310,328

305,442

305,725

304,238

(1)

1

Securitized debt obligations

10,561

12,071

12,414

13,566

15,761

(13)

(33)

Other debt:

Federal funds purchased and securities loaned or sold under agreements to repurchase

845

842

668

702

573

47

Senior and subordinated notes

24,878

25,467

27,382

28,448

28,481

(2)

(13)

Other borrowings

59

70

75

79

85

(16)

(31)

Total other debt

25,782

26,379

28,125

29,229

29,139

(2)

(12)

Other liabilities

15,844

14,921

15,065

14,607

15,733

6

1

Total liabilities

358,796

363,987

361,398

363,459

365,251

(1)

(2)

Stockholders' equity:

Preferred stock

0

0

0

0

0

Common stock

7

7

7

7

7

Additional paid-in capital, net

35,472

33,671

33,480

33,793

33,556

5

6

Retained earnings

46,461

43,167

40,088

37,653

35,361

8

31

Accumulated other comprehensive income

1,792

1,783

3,494

3,833

3,981

1

(55)

Treasury stock, at cost

(19,108)

(17,440)

(16,865)

(16,862)

(16,860)

10

13

Total stockholders' equity

64,624

61,188

60,204

58,424

56,045

6

15

Total liabilities and stockholders' equity

$

423,420

$

425,175

$

421,602

$

421,883

$

421,296

1

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 $175 million in Q2 2021, $180 million in Q1 2021, $177 million in Q4 2020, $235 million in Q3 2020 and $318 million in Q2 2020 for credit card finance charges and fees charged-off as uncollectible.

(2)

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.

(3)

On December 1, 2020, we redeemed all outstanding shares of our fixed rate 6.20% non-cumulative perpetual preferred stock Series F, which reduced our net income available to common shareholders by $17 million in Q4 2020. On March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B, which increased our net loss available to common shareholders by $22 million in Q1 2020.

(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)

Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.

(6)

Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

(7)

Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) 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.

(8)

Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.

(9)

Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity ("TCE"). Our calculation of return on average TCE 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.

(10)

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.

(11)

Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating 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)

Metrics include the impact of COVID-19 customer assistance programs where applicable.

(14)

Capital ratios as of the end of Q2 2021 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.

**

Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 6: Average Balances, Net Interest Income and Net Interest Margin

2021 Q2

2021 Q1

2020 Q2

(Dollars in millions, except as noted)

Average Balance

Interest Income/ Expense

Yield/Rate

Average Balance

Interest Income/ Expense

Yield/Rate

Average Balance

Interest Income/ Expense

Yield/Rate

Interest-earning assets:

Loans, including loans held for sale

$

249,280

$

5,753

9.23

%

$

246,675

$

5,854

9.49

%

$

254,402

$

5,820

9.15

%

Investment securities

100,071

370

1.48

98,296

391

1.59

81,095

482

2.38

Cash equivalents and other

40,778

16

0.16

43,601

16

0.15

42,648

16

0.15

Total interest-earning assets

$

390,129

$

6,139

6.29

$

388,572

$

6,261

6.45

$

378,145

$

6,318

6.68

Interest-bearing liabilities:

Interest-bearing deposits

$

273,476

$

237

0.35

$

273,358

$

269

0.39

$

261,256

$

611

0.94

Securitized debt obligations

10,890

28

1.03

12,240

32

1.05

16,432

56

1.37

Senior and subordinated notes

25,487

122

1.92

26,968

129

1.91

31,294

180

2.30

Other borrowings and liabilities

2,198

9

1.67

2,210

9

1.62

3,554

11

1.21

Total interest-bearing liabilities

$

312,051

$

396

0.50

$

314,776

$

439

0.56

$

312,536

$

858

1.10

Net interest income/spread

$

5,743

5.79

$

5,822

5.89

$

5,460

5.58

Impact of non-interest-bearing funding

0.10

0.10

0.20

Net interest margin

5.89

%

5.99

%

5.78

%

Six Months Ended June 30,

2021

2020

Average Balance

Interest Income/ Expense

Yield/Rate

Average Balance

Interest Income/ Expense

Yield/Rate

(Dollars in millions, except as noted)

Interest-earning assets:

Loans, including loans held for sale

$

247,984

$

11,607

9.36

%

$

259,017

$

12,362

9.55

%

Investment securities

99,189

761

1.53

79,654

1,012

2.54

Cash equivalents and other

42,182

32

0.15

28,075

53

0.38

Total interest-earning assets

$

389,355

$

12,400

6.37

$

366,746

$

13,427

7.32

Interest-bearing liabilities:

Interest-bearing deposits

$

273,417

$

506

0.37

$

251,185

$

1,342

1.07

Securitized debt obligations

11,561

60

1.04

17,243

155

1.80

Senior and subordinated notes

26,223

251

1.92

31,318

419

2.67

Other borrowings and liabilities

2,205

18

1.65

3,667

26

1.42

Total interest-bearing liabilities

$

313,406

$

835

0.53

$

303,413

$

1,942

1.28

Net interest income/spread

$

11,565

5.84

$

11,485

6.04

Impact of non-interest-bearing funding

0.10

0.22

Net interest margin

5.94

%

6.26

%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021

2020

2021 vs. 2020

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

Loans Held for Investment (Period-End)

Credit card:

Domestic credit card(1)

$

95,309

$

91,099

$

98,504

$

95,541

$

99,390

5

%

(4)

%

$

95,309

$

99,390

(4)

%

International card businesses(2)

5,708

8,028

8,452

8,100

7,920

(29)

(28)

5,708

7,920

(28)

Total credit card

101,017

99,127

106,956

103,641

107,310

2

(6)

101,017

107,310

(6)

Consumer banking:

Auto

71,713

67,059

65,762

65,394

63,319

7

13

71,713

63,319

13

Retail banking

3,046

3,143

3,126

3,294

3,393

(3)

(10)

3,046

3,393

(10)

Total consumer banking

74,759

70,202

68,888

68,688

66,712

6

12

74,759

66,712

12

Commercial banking:

Commercial and multifamily real estate(3)

29,616

30,008

30,681

31,197

30,953

(1)

(4)

29,616

30,953

(4)

Commercial and industrial

44,205

43,794

45,099

44,697

46,537

1

(5)

44,205

46,537

(5)

Total commercial banking

73,821

73,802

75,780

75,894

77,490

(5)

73,821

77,490

(5)

Total loans held for investment

249,597

243,131

251,624

248,223

251,512

3

(1)

249,597

251,512

(1)

Loans Held for Investment (Average)

Credit card:

Domestic credit card

$

91,535

$

92,594

$

95,453

$

97,306

$

100,996

(1)

%

(9)

%

$

92,062

$

107,354

(14)

%

International card businesses

8,139

7,940

8,108

8,061

7,752

3

5

8,040

8,408

(4)

Total credit card

99,674

100,534

103,561

105,367

108,748

(1)

(8)

100,102

115,762

(14)

Consumer banking:

Auto

69,543

66,185

65,590

64,476

61,798

5

13

67,873

61,401

11

Retail banking

3,162

3,049

3,218

3,346

3,053

4

4

3,106

2,860

9

Total consumer banking

72,705

69,234

68,808

67,822

64,851

5

12

70,979

64,261

10

Commercial banking:

Commercial and multifamily real estate

30,124

29,856

30,825

30,918

31,723

1

(5)

29,991

31,402

(4)

Commercial and industrial

43,960

44,313

44,495

45,404

48,036

(1)

(8)

44,135

46,699

(5)

Total commercial banking

74,084

74,169

75,320

76,322

79,759

(7)

74,126

78,101

(5)

Total average loans held for investment

$

246,463

$

243,937

$

247,689

$

249,511

$

253,358

1

(3)

$

245,207

$

258,124

(5)

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021

2020

2021 vs. 2020

Q2

Q1

Q4

Q3

Q2

Q1

Q2

Net Charge-Off (Recovery) Rates

Credit card:

Domestic credit card

2.28

%

2.54

%

2.69

%

3.64

%

4.53

%

(26)

bps

(225)

bps

2.41

%

4.61

%

(220)

bps

International card businesses

2.41

2.30

1.86

2.89

3.47

11

(106)

2.36

4.11

(175)

Total credit card

2.29

2.52

2.63

3.58

4.46

(23)

(217)

2.41

4.57

(216)

Consumer banking:

Auto

(0.12)

0.47

0.47

0.23

1.16

(59)

(128)

0.17

1.33

(116)

Retail banking

1.41

1.68

1.88

1.38

1.78

(27)

(37)

1.54

2.05

(51)

Total consumer banking

(0.06)

0.52

0.53

0.28

1.19

(58)

(125)

0.23

1.36

(113)

Commercial banking:

Commercial and multifamily real estate

0.04

0.06

0.02

0.41

0.09

(2)

(5)

0.05

0.04

1

Commercial and industrial

(0.21)

0.11

0.74

0.45

0.78

(32)

(99)

(0.05)

0.87

(92)

Total commercial banking

(0.11)

0.09

0.45

0.43

0.51

(20)

(62)

(0.01)

0.54

(55)

Total net charge-offs

0.88

1.21

1.38

1.72

2.38

(33)

(150)

1.04

2.55

(151)

30+ Day Performing Delinquency Rates(4)

Credit card:

Domestic credit card

1.68

%

2.24

%

2.42

%

2.21

%

2.74

%

(56)

bps

(106)

bps

1.68

%

2.74

%

(106)

bps

International card businesses

2.89

2.51

2.61

2.15

2.71

38

18

2.89

2.71

18

Total credit card

1.75

2.26

2.44

2.20

2.74

(51)

(99)

1.75

2.74

(99)

Consumer banking:

Auto

3.26

3.12

4.78

3.76

3.28

14

(2)

3.26

3.28

(2)

Retail banking

0.79

1.02

1.32

0.83

0.89

(23)

(10)

0.79

0.89

(10)

Total consumer banking

3.16

3.03

4.62

3.62

3.16

13

3.16

3.16

Nonperforming Loans and Nonperforming Assets Rates(5)(6)

Credit card:

International card businesses

0.20

%

0.17

%

0.24

%

0.25

%

0.29

%

3

bps

(9)

bps

0.20

%

0.29

%

(9)

bps

Total credit card

0.01

0.01

0.02

0.02

0.02

(1)

0.01

0.02

(1)

Consumer banking:

Auto

0.29

0.29

0.45

0.36

0.41

(12)

0.29

0.41

(12)

Retail banking

1.75

1.16

0.96

0.77

0.70

59

105

1.75

0.70

105

Total consumer banking

0.35

0.33

0.47

0.38

0.43

2

(8)

0.35

0.43

(8)

Commercial banking:

Commercial and multifamily real estate

1.02

0.78

0.65

0.58

0.54

24

48

1.02

0.54

48

Commercial and industrial

1.03

1.02

1.00

1.31

1.06

1

(3)

1.03

1.06

(3)

Total commercial banking

1.03

0.92

0.86

1.01

0.85

11

18

1.03

0.85

18

Total nonperforming loans

0.41

0.38

0.40

0.42

0.38

3

3

0.41

0.38

3

Total nonperforming assets

0.43

0.40

0.41

0.44

0.39

3

4

0.43

0.39

4

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

Three Months Ended June 30, 2021

Credit Card

Consumer Banking

(Dollars in millions)

Domestic Card

International Card Businesses

Total Credit Card

Auto

Retail Banking

Total Consumer Banking

Commercial Banking

Total

Allowance for credit losses:

Balance as of March 31, 2021

$

9,572

$

500

$

10,072

$

2,405

$

93

$

2,498

$

1,447

$

14,017

Charge-offs

(874)

(93)

(967)

(245)

(15)

(260)

(8)

(1,235)

Recoveries

352

44

396

267

4

271

27

694

Net recoveries (charge-offs)

(522)

(49)

(571)

22

(11)

11

19

(541)

Provision (benefit) for credit losses

(561)

(74)

(635)

(305)

(1)

(306)

(196)

(1,137)

Allowance build (release) for credit losses

(1,083)

(123)

(1,206)

(283)

(12)

(295)

(177)

(1,678)

Other changes(7)

7

7

7

Balance as of June 30, 2021

8,489

384

8,873

2,122

81

2,203

1,270

12,346

Reserve for unfunded lending commitments:

Balance as of March 31, 2021

187

187

Provision (benefit) for losses on unfunded lending commitments

(23)

(23)

Balance as of June 30, 2021

164

164

Combined allowance and reserve as of June 30, 2021

$

8,489

$

384

$

8,873

$

2,122

$

81

$

2,203

$

1,434

$

12,510

Six Months Ended June 30, 2021

Credit Card

Consumer Banking

(Dollars in millions)

Domestic Card

International Card Businesses

Total Credit Card

Auto

Retail Banking

Total

Consumer Banking

Commercial Banking

Total

Allowance for credit losses:

Balance as of December 31, 2020

$

10,650

$

541

$

11,191

$

2,615

$

100

$

2,715

$

1,658

$

15,564

Charge-offs

(1,778)

(182)

(1,960)

(569)

(33)

(602)

(27)

(2,589)

Recoveries

669

87

756

513

9

522

30

1,308

Net recoveries (charge-offs)

(1,109)

(95)

(1,204)

(56)

(24)

(80)

3

(1,281)

Provision (benefit) for credit losses

(1,052)

(75)

(1,127)

(437)

5

(432)

(391)

(1,950)

Allowance build (release) for credit losses

(2,161)

(170)

(2,331)

(493)

(19)

(512)

(388)

(3,231)

Other changes(7)

13

13

13

Balance as of June 30, 2021

8,489

384

8,873

2,122

81

2,203

1,270

12,346

Reserve for unfunded lending commitments:

Balance as of December 31, 2020

195

195

Provision (benefit) for losses on unfunded lending commitments

(31)

(31)

Balance as of June 30, 2021

164

164

Combined allowance and reserve as of June 30, 2021

$

8,489

$

384

$

8,873

$

2,122

$

81

$

2,203

$

1,434

$

12,510

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results

Three Months Ended June 30, 2021

Six Months Ended June 30, 2021

(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking(8)

Other(8)

Total

Credit Card

Consumer Banking

Commercial Banking(8)

Other(8)

Total

Net interest income (loss)

$

3,217

$

2,101

$

460

$

(35)

$

5,743

$

6,589

$

4,131

$

980

$

(135)

$

11,565

Non-interest income (loss)

1,253

144

257

(23)

1,631

2,282

285

497

(142)

2,922

Total net revenue (loss)

4,470

2,245

717

(58)

7,374

8,871

4,416

1,477

(277)

14,487

Provision (benefit) for credit losses

(635)

(306)

(219)

(1,160)

(1,127)

(432)

(422)

(2)

(1,983)

Non-interest expense

2,263

1,123

417

163

3,966

4,398

2,240

836

232

7,706

Income (loss) from continuing operations before income taxes

2,842

1,428

519

(221)

4,568

5,600

2,608

1,063

(507)

8,764

Income tax provision (benefit)

672

337

123

(101)

1,031

1,325

615

251

(291)

1,900

Income (loss) from continuing operations, net of tax

$

2,170

$

1,091

$

396

$

(120)

$

3,537

$

4,275

$

1,993

$

812

$

(216)

$

6,864

Three Months Ended March 31, 2021

(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking(8)

Other(8)

Total

Net interest income (loss)

$

3,372

$

2,030

$

520

$

(100)

$

5,822

Non-interest income (loss)

1,029

141

240

(119)

1,291

Total net revenue (loss)

4,401

2,171

760

(219)

7,113

Provision (benefit) for credit losses

(492)

(126)

(203)

(2)

(823)

Non-interest expense

2,135

1,117

419

69

3,740

Income (loss) from continuing operations before income taxes

2,758

1,180

544

(286)

4,196

Income tax provision (benefit)

653

278

128

(190)

869

Income (loss) from continuing operations, net of tax

$

2,105

$

902

$

416

$

(96)

$

3,327

Three Months Ended June 30, 2020

Six Months Ended June 30, 2020

(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking(8)

Other(8)

Total

Credit Card

Consumer Banking

Commercial Banking(8)

Other(8)

Total

Net interest income (loss)

$

3,369

$

1,665

$

518

$

(92)

$

5,460

$

7,071

$

3,322

$

1,009

$

83

$

11,485

Non-interest income (loss)

845

97

180

(26)

1,096

1,756

223

418

(77)

2,320

Total net revenue (loss)

4,214

1,762

698

(118)

6,556

8,827

3,545

1,427

6

13,805

Provision (benefit) for credit losses

2,944

876

427

(1)

4,246

6,646

1,736

1,283

4

9,669

Non-interest expense

1,969

1,036

425

340

3,770

4,177

2,027

837

458

7,499

Loss from continuing operations before income taxes

(699)

(150)

(154)

(457)

(1,460)

(1,996)

(218)

(693)

(456)

(3,363)

Income tax benefit

(166)

(36)

(36)

(305)

(543)

(472)

(52)

(164)

(418)

(1,106)

Loss from continuing operations, net of tax

$

(533)

$

(114)

$

(118)

$

(152)

$

(917)

$

(1,524)

$

(166)

$

(529)

$

(38)

$

(2,257)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021 vs.

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Credit Card

Earnings:

Net interest income

$

3,217

$

3,372

$

3,413

$

3,292

$

3,369

(5)

%

(5)

%

$

6,589

$

7,071

(7)

%

Non-interest income

1,253

1,029

1,054

1,013

845

22

48

2,282

1,756

30

Total net revenue

4,470

4,401

4,467

4,305

4,214

2

6

8,871

8,827

Provision (benefit) for credit losses

(635)

(492)

231

450

2,944

29

**

(1,127)

6,646

**

Non-interest expense

2,263

2,135

2,311

2,003

1,969

6

15

4,398

4,177

5

Income (loss) from continuing operations before income taxes

2,842

2,758

1,925

1,852

(699)

3

**

5,600

(1,996)

**

Income tax provision (benefit)

672

653

454

438

(166)

3

**

1,325

(472)

**

Income (loss) from continuing operations, net of tax

$

2,170

$

2,105

$

1,471

$

1,414

$

(533)

3

**

$

4,275

$

(1,524)

**

Selected performance metrics:

Period-end loans held for investment(1)(2)

$

101,017

$

99,127

$

106,956

$

103,641

$

107,310

2

(6)

$

101,017

$

107,310

(6)

Average loans held for investment

99,674

100,534

103,561

105,367

108,748

(1)

(8)

100,102

115,762

(14)

Average yield on loans outstanding(9)

14.04

%

14.49

%

14.24

%

13.83

%

13.72

%

(45)

bps

32

bps

14.26

%

14.11

%

15

bps

Total net revenue margin(10)

17.59

17.17

16.92

16.34

15.50

42

209

17.38

15.25

213

Net charge-off rate

2.29

2.52

2.63

3.58

4.46

(23)

(217)

2.41

4.57

(216)

30+ day performing delinquency rate

1.75

2.26

2.44

2.20

2.74

(51)

(99)

1.75

2.74

(99)

30+ day delinquency rate

1.75

2.27

2.45

2.21

2.75

(52)

(100)

1.75

2.75

(100)

Nonperforming loan rate(5)

0.01

0.01

0.02

0.02

0.02

(1)

0.01

0.02

(1)

Purchase volume(11)

$

132,676

$

108,333

$

117,141

$

107,102

$

90,149

22

%

47

%

$

241,009

$

190,069

27

%

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021 vs.

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Domestic Card

Earnings:

Net interest income

$

2,944

$

3,095

$

3,129

$

2,995

$

3,094

(5)

%

(5)

%

$

6,039

$

6,475

(7)

%

Non-interest income

1,183

959

994

952

795

23

49

2,142

1,637

31

Total net revenue

4,127

4,054

4,123

3,947

3,889

2

6

8,181

8,112

1

Provision (benefit) for credit losses

(561)

(491)

231

378

2,906

14

**

(1,052)

6,370

**

Non-interest expense

2,034

1,923

2,063

1,802

1,776

6

15

3,957

3,760

5

Income (loss) from continuing operations before income taxes

2,654

2,622

1,829

1,767

(793)

1

**

5,276

(2,018)

**

Income tax provision (benefit)

626

619

433

419

(188)

1

**

1,245

(478)

**

Income (loss) from continuing operations, net of tax

$

2,028

$

2,003

$

1,396

$

1,348

$

(605)

1

**

$

4,031

$

(1,540)

**

Selected performance metrics:

Period-end loans held for investment(1)

$

95,309

$

91,099

$

98,504

$

95,541

$

99,390

5

(4)

$

95,309

$

99,390

(4)

Average loans held for investment

91,535

92,594

95,453

97,306

100,996

(1)

(9)

92,062

107,354

(14)

Average yield on loans outstanding(9)

13.91

%

14.34

%

14.07

%

13.57

%

13.52

%

(43)

bps

39

bps

14.13

%

13.93

%

20

bps

Total net revenue margin(10)

17.66

17.15

16.91

16.22

15.40

51

226

17.40

15.11

229

Net charge-off rate

2.28

2.54

2.69

3.64

4.53

(26)

(225)

2.41

4.61

(220)

30+ day performing delinquency rate

1.68

2.24

2.42

2.21

2.74

(56)

(106)

1.68

2.74

(106)

Purchase volume(11)

$

122,456

$

99,960

$

107,572

$

98,107

$

82,860

23

%

48

%

$

222,416

$

175,108

27

%

Refreshed FICO scores:(12)

Greater than 660

72

%

70

%

69

%

69

%

67

%

2

5

72

%

67

%

5

660 or below

28

30

31

31

33

(2)

(5)

28

33

(5)

Total

100

%

100

%

100

%

100

%

100

%

100

%

100

%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021 vs.

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Consumer Banking

Earnings:

Net interest income

$

2,101

$

2,030

$

2,012

$

1,904

$

1,665

3

%

26

%

$

4,131

$

3,322

24

%

Non-interest income

144

141

136

107

97

2

48

285

223

28

Total net revenue

2,245

2,171

2,148

2,011

1,762

3

27

4,416

3,545

25

Provision (benefit) for credit losses

(306)

(126)

60

(43)

876

143

**

(432)

1,736

**

Non-interest expense

1,123

1,117

1,121

1,011

1,036

1

8

2,240

2,027

11

Income (loss) from continuing operations before income taxes

1,428

1,180

967

1,043

(150)

21

**

2,608

(218)

**

Income tax provision (benefit)

337

278

230

247

(36)

21

**

615

(52)

**

Income (loss) from continuing operations, net of tax

$

1,091

$

902

$

737

$

796

$

(114)

21

**

$

1,993

$

(166)

**

Selected performance metrics:

Period-end loans held for investment

$

74,759

$

70,202

$

68,888

$

68,688

$

66,712

6

12

$

74,759

$

66,712

12

Average loans held for investment

72,705

69,234

68,808

67,822

64,851

5

12

70,979

64,261

10

Average yield on loans held for investment(9)

7.99

%

8.16

%

8.28

%

8.36

%

8.41

%

(17)

bps

(42)

bps

8.07

%

8.44

%

(37)

bps

Auto loan originations

$

12,959

$

8,833

$

7,371

$

8,979

$

8,292

47

%

56

%

$

21,792

$

15,931

37

%

Period-end deposits

251,155

254,001

249,815

249,684

246,804

(1)

2

251,155

246,804

2

Average deposits

252,488

249,499

249,419

248,418

232,293

1

9

251,002

223,682

12

Average deposits interest rate

0.31

%

0.36

%

0.47

%

0.66

%

0.89

%

(5)

bps

(58)

bps

0.33

%

0.97

%

(64)

bps

Net charge-off (recovery) rate

(0.06)

0.52

0.53

0.28

1.19

(58)

(125)

0.23

1.36

(113)

30+ day performing delinquency rate

3.16

3.03

4.62

3.62

3.16

13

3.16

3.16

30+ day delinquency rate

3.40

3.25

5.00

3.90

3.48

15

(8)

3.40

3.48

(8)

Nonperforming loan rate(5)

0.35

0.33

0.47

0.38

0.43

2

(8)

0.35

0.43

(8)

Nonperforming asset rate(6)

0.40

0.39

0.54

0.43

0.46

1

(6)

0.40

0.46

(6)

Auto—At origination FICO scores:(13)

Greater than 660

48

%

47

%

46

%

46

%

46

%

1

%

2

%

48

%

46

%

2

%

621 - 660

20

20

20

20

20

20

20

620 or below

32

33

34

34

34

(1)

(2)

32

34

(2)

Total

100

%

100

%

100

%

100

%

100

%

100

%

100

%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021 vs.

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Commercial Banking

Earnings:

Net interest income

$

460

$

520

$

522

$

517

$

518

(12)

%

(11)

%

$

980

$

1,009

(3)

%

Non-interest income

257

240

268

237

180

7

43

497

418

19

Total net revenue(8)

717

760

790

754

698

(6)

3

1,477

1,427

4

Provision (benefit) for credit losses

(219)

(203)

(28)

(74)

427

8

**

(422)

1,283

**

Non-interest expense

417

419

445

424

425

(2)

836

837

Income (loss) from continuing operations before income taxes

519

544

373

404

(154)

(5)

**

1,063

(693)

**

Income tax provision (benefit)

123

128

88

95

(36)

(4)

**

251

(164)

**

Income (loss) from continuing operations, net of tax

$

396

$

416

$

285

$

309

$

(118)

(5)

**

$

812

$

(529)

**

Selected performance metrics:

Period-end loans held for investment(3)

$

73,821

$

73,802

$

75,780

$

75,894

$

77,490

(5)

$

73,821

$

77,490

(5)

Average loans held for investment

74,084

74,169

75,320

76,322

79,759

(7)

74,126

78,101

(5)

Average yield on loans held for investment(8)(9)

2.72

%

2.76

%

2.83

%

2.82

%

3.00

%

(4)

bps

(28)

bps

2.74

%

3.43

%

(69)

bps

Period-end deposits

$

42,973

$

41,552

$

39,590

$

36,783

$

35,669

3

%

20

%

$

42,973

$

35,669

20

%

Average deposits

42,311

40,107

38,676

36,278

34,635

5

22

41,215

33,437

23

Average deposits interest rate

0.14

%

0.18

%

0.23

%

0.25

%

0.30

%

(4)

bps

(16)

bps

0.16

%

0.58

%

(42)

bps

Net charge-off (recovery) rate

(0.11)

0.09

0.45

0.43

0.51

(20)

(62)

(0.01)

0.54

(55)

Nonperforming loan rate(5)

1.03

0.92

0.86

1.01

0.85

11

18

1.03

0.85

18

Nonperforming asset rate(6)

1.03

0.92

0.86

1.01

0.85

11

18

1.03

0.85

18

Risk category:(14)

Noncriticized

$

67,481

$

66,299

$

67,964

$

68,533

$

70,881

2

%

(5)

%

$

67,481

$

70,881

(5)

%

Criticized performing

5,581

6,821

7,166

6,593

5,949

(18)

(6)

5,581

5,949

(6)

Criticized nonperforming

759

682

650

768

660

11

15

759

660

15

Total commercial banking loans

$

73,821

$

73,802

$

75,780

$

75,894

$

77,490

(5)

$

73,821

$

77,490

(5)

Risk category as a percentage of period-end loans held for investment:(14)

Noncriticized

91.4

%

89.9

%

89.6

%

90.3

%

91.4

%

150

bps

91.4

%

91.4

%

Criticized performing

7.6

9.2

9.5

8.7

7.7

(160)

(10)

bps

7.6

7.7

(10)

bps

Criticized nonperforming

1.0

0.9

0.9

1.0

0.9

10

10

1.0

0.9

10

Total commercial banking 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

2021 Q2 vs.

Six Months Ended June 30,

2021

2021

2020

2020

2020

2021

2020

2021 vs.

(Dollars in millions)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2021

2020

2020

Other

Earnings:

Net interest income (loss)

$

(35)

$

(100)

$

(74)

$

(158)

$

(92)

(65)

%

(62)

%

$

(135)

$

83

**

Non-interest income (loss)

(23)

(119)

6

469

(26)

(81)

(12)

(142)

(77)

84

%

Total net revenue (loss)(8)

(58)

(219)

(68)

311

(118)

(74)

(51)

(277)

6

**

Provision (benefit) for credit losses

(2)

1

(2)

(1)

**

**

(2)

4

**

Non-interest expense(15)

163

69

132

110

340

136

(52)

232

458

(49)

Income (loss) from continuing operations before income taxes

(221)

(286)

(201)

203

(457)

(23)

(52)

(507)

(456)

11

Income tax provision (benefit)

(101)

(190)

(276)

316

(305)

(47)

(67)

(291)

(418)

(30)

Income (loss) from continuing operations, net of tax

$

(120)

$

(96)

$

75

$

(113)

$

(152)

25

(21)

$

(216)

$

(38)

**

Selected performance metrics:

Period-end deposits

$

12,180

$

14,775

$

16,037

$

19,258

$

21,765

(18)

(44)

$

12,180

$

21,765

(44)

Average deposits

13,418

15,450

16,418

20,820

21,416

(13)

(37)

14,428

19,379

(26)

Total

Earnings:

Net interest income

$

5,743

$

5,822

$

5,873

$

5,555

$

5,460

(1)

%

5

%

$

11,565

$

11,485

1

%

Non-interest income

1,631

1,291

1,464

1,826

1,096

26

49

2,922

2,320

26

Total net revenue

7,374

7,113

7,337

7,381

6,556

4

12

14,487

13,805

5

Provision (benefit) for credit losses

(1,160)

(823)

264

331

4,246

41

**

(1,983)

9,669

**

Non-interest expense

3,966

3,740

4,009

3,548

3,770

6

5

7,706

7,499

3

Income (loss) from continuing operations before income taxes

4,568

4,196

3,064

3,502

(1,460)

9

**

8,764

(3,363)

**

Income tax provision (benefit)

1,031

869

496

1,096

(543)

19

**

1,900

(1,106)

**

Income (loss) from continuing operations, net of tax

$

3,537

$

3,327

$

2,568

$

2,406

$

(917)

6

**

$

6,864

$

(2,257)

**

Selected performance metrics:

Period-end loans held for investment

$

249,597

$

243,131

$

251,624

$

248,223

$

251,512

3

(1)

$

249,597

$

251,512

(1)

Average loans held for investment

246,463

243,937

247,689

249,511

253,358

1

(3)

245,207

258,124

(5)

Period-end deposits

306,308

310,328

305,442

305,725

304,238

(1)

1

306,308

304,238

1

Average deposits

308,217

305,056

304,513

305,516

288,344

1

7

306,645

276,498

11

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)

(1)

We reclassified $2.1 billion in partnership loans to held for sale as of September 30, 2020.

(2)

We reclassified $2.6 billion in international partnership loans to held for sale as of June 30, 2021.

(3) 

We reclassified $1.5 billion in commercial loans to held for sale as of June 30, 2021.

(4)

Metrics include the impact of COVID-19 customer assistance programs where applicable.

(5)

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.

(6)

Nonperforming assets consist of nonperforming loans, repossessed assets 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, repossessed assets and other foreclosed assets.

(7)

Represents foreign currency translation adjustments.

(8)

Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.

(9)

Average yield is calculated based on annualized interest income for the period divided by average loans during the period. Annualized interest income does not include any allocations, such as funds transfer pricing.

(10)

Total net revenue margin is calculated based on total net revenue for the period divided by average loans outstanding during the period.

(11)

Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.

(12)

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.

(13)

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.

(14)

Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.

(15)

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)

June 30,

2021

March 31,

2021

December 31,

2020

September 30,

2020

June 30,

2020

Regulatory Capital Metrics

Common equity excluding AOCI

$

58,969

$

57,607

$

55,299

$

52,839

$

50,614

Adjustments:

AOCI, net of tax(2)

(5)

(13)

(29)

(122)

(145)

Goodwill, net of related deferred tax liabilities

(14,440)

(14,444)

(14,448)

(14,448)

(14,449)

Intangible assets, net of related deferred tax liabilities

(76)

(81)

(86)

(95)

(135)

Other

(16)

(18)

Common equity Tier 1 capital

$

44,432

$

43,051

$

40,736

$

38,174

$

35,885

Tier 1 capital

$

50,920

$

47,898

$

45,583

$

43,505

$

41,094

Total capital(3)

57,932

54,780

52,788

50,955

48,508

Risk-weighted assets

307,372

295,209

297,903

293,852

290,222

Adjusted average assets(4)

411,032

408,596

406,762

409,602

398,062

Capital Ratios

Common equity Tier 1 capital(5)

14.5

%

14.6

%

13.7

%

13.0

%

12.4

%

Tier 1 capital(6)

16.6

16.2

15.3

14.8

14.2

Total capital(7)

18.8

18.6

17.7

17.3

16.7

Tier 1 leverage(4)

12.4

11.7

11.2

10.6

10.3

Tangible common equity ("TCE")(8)

10.6

10.1

10.0

9.4

8.8

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results. These adjusted results provide alternate measurements of our operating performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

2021

2020

Six Months Ended June 30,

(Dollars in millions, except per share data and as noted)

Q2

Q1

Q2

Q1

2021

2020

Adjusted diluted EPS:

Net income (loss) available to common stockholders (GAAP)

$

3,446

$

3,236

$

(1,009)

$

(1,420)

$

6,682

$

(2,429)

Legal reserve activity, including insurance recoveries

55

265

45

55

310

Cybersecurity Incident expenses, net of insurance

11

4

15

Adjusted net income (loss) available to common stockholders before income tax impacts (non-GAAP)

3,501

3,236

(733)

(1,371)

6,737

(2,104)

Income tax impacts

(13)

(3)

(12)

(13)

(15)

Adjusted net income (loss) available to common stockholders (non-GAAP)

$

3,488

$

3,236

$

(736)

$

(1,383)

$

6,724

$

(2,119)

Diluted weighted-average common shares outstanding (in millions) (GAAP)

452.3

460.1

456.7

457.6

456.2

457.1

Diluted EPS (GAAP)

$

7.62

$

7.03

$

(2.21)

$

(3.10)

$

14.65

$

(5.31)

Impact of adjustments noted above

0.09

0.60

0.08

0.09

0.67

Adjusted diluted EPS (non-GAAP)

$

7.71

$

7.03

$

(1.61)

$

(3.02)

$

14.74

$

(4.64)

Adjusted efficiency ratio:

Non-interest expense (GAAP)

$

3,966

$

3,740

$

3,770

$

3,729

$

7,706

$

7,499

Legal reserve activity, including insurance recoveries

(55)

(265)

(45)

(55)

(310)

Cybersecurity Incident expenses, net of insurance

(11)

(4)

(15)

Adjusted non-interest expense (non-GAAP)

$

3,911

$

3,740

$

3,494

$

3,680

$

7,651

$

7,174

Total net revenue (GAAP)

$

7,374

$

7,113

$

6,556

$

7,249

$

14,487

$

13,805

Efficiency ratio (GAAP)

53.78

%

52.58

%

57.50

%

51.44

%

53.19

%

54.32

%

Impact of adjustments noted above

(74)

bps

bps

(421)

bps

(67)

bps

(38)

bps

(235)

bps

Adjusted efficiency ratio (non-GAAP)

53.04

%

52.58

%

53.29

%

50.77

%

52.81

%

51.97

%

Adjusted operating efficiency ratio:

Operating expense (GAAP)

$

3,346

$

3,239

$

3,497

$

3,238

$

6,585

$

6,735

Legal reserve activity, including insurance recoveries

(55)

(265)

(45)

(55)

(310)

Cybersecurity Incident expenses, net of insurance

(11)

(4)

(15)

Adjusted operating expense (non-GAAP)

$

3,291

$

3,239

$

3,221

$

3,189

$

6,530

$

6,410

Total net revenue (GAAP)

$

7,374

$

7,113

$

6,556

$

7,249

$

14,487

$

13,805

Operating efficiency ratio (GAAP)

45.38

%

45.54

%

53.34

%

44.67

%

45.45

%

48.79

%

Impact of adjustments noted above

(75)

bps

bps

(421)

bps

(68)

bps

(38)

bps

(236)

bps

Adjusted operating efficiency ratio (non-GAAP)

44.63

%

45.54

%

49.13

%

43.99

%

45.07

%

46.43

%

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of 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 to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. 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.

2021

2021

2020

2020

2020

(Dollars in millions)

Q2

Q1

Q4

Q3

Q2

Tangible Common Equity (Period-End)

Stockholders' equity

$

64,624

$

61,188

$

60,204

$

58,424

$

56,045

Goodwill and intangible assets(9)

(14,774)

(14,789)

(14,809)

(14,825)

(14,869)

Noncumulative perpetual preferred stock

(6,488)

(4,847)

(4,847)

(5,330)

(5,209)

Tangible common equity

$

43,362

$

41,552

$

40,548

$

38,269

$

35,967

Tangible Common Equity (Average)

Stockholders' equity

$

62,376

$

60,623

$

59,389

$

57,223

$

57,623

Goodwill and intangible assets(9)

(14,788)

(14,807)

(14,824)

(14,867)

(14,880)

Noncumulative perpetual preferred stock

(5,491)

(4,847)

(5,168)

(5,228)

(5,209)

Tangible common equity

$

42,097

$

40,969

$

39,397

$

37,128

$

37,534

Tangible Assets (Period-End)

Total assets

$

423,420

$

425,175

$

421,602

$

421,883

$

421,296

Goodwill and intangible assets(9)

(14,774)

(14,789)

(14,809)

(14,825)

(14,869)

Tangible assets

$

408,646

$

410,386

$

406,793

$

407,058

$

406,427

Tangible Assets (Average)

Total assets

$

424,099

$

421,808

$

420,011

$

422,854

$

411,075

Goodwill and intangible assets(9)

(14,788)

(14,807)

(14,824)

(14,867)

(14,880)

Tangible assets

$

409,311

$

407,001

$

405,187

$

407,987

$

396,195

__________

(1)

Regulatory capital metrics and capital ratios as of June 30, 2021 are preliminary and therefore subject to change.

(2)

Excludes certain components of AOCI as permitted under the Tailoring Rules.

(3)

Total capital equals the sum of Tier 1 capital and Tier 2 capital.

(4)

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.

(5)

Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.

(6)

Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.

(7)

Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.

(8)

TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.

(9)

Includes impact of related deferred taxes.

SOURCE Capital One Financial Corporation

MENAFN22072021003732001241ID1102494404


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.