MCLEAN, Va., July 21, 2016 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2016 of $942 million, or $1.69 per diluted common share, compared to the first quarter of 2016 with net income of $1.0 billion, or $1.84 per diluted common share, and the second quarter of 2015 with net income of $863 million, or $1.50 per diluted common share. Excluding Adjusting items, net income for the second quarter of 2016 was $979 million or $1.76 per share.

"In the second quarter, Capital One sustained top-line growth, delivered successful 2016 CCAR results, and affirmed our guidance for domestic card credit and total company efficiency ratio," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We remain well positioned to deliver growth and returns at the higher end of banks and distribute significant capital to shareholders, subject to regulatory approval."

All comparisons below are for the second quarter of 2016 compared with the first quarter of 2016 unless otherwise noted.

Second Quarter 2016 Income Statement Summary:

  • Total net revenue increased 1 percent to $6.3 billion.
  • Total non-interest expense increased 2 percent to $3.3 billion
    • 3 percent decrease in marketing. 
    • 3 percent increase in operating expenses.
  • Pre-provision earnings decreased 1 percent to $3.0 billion.
  • Provision for credit losses increased 4 percent to $1.6 billion
    • Net charge-offs of $1.2 billion
    • $465 million allowance build. 
  • Net interest margin of 6.73 percent, down 2 basis points. 
  • Efficiency ratio of 52.69 percent.
    • Efficiency ratio net of adjustments of 52.32 percent.

Second Quarter 2016 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 10.9 percent at June 30, 2016.
  • Period-end loans held for investment in the quarter increased $7.0 billion, or 3 percent, to $234.6 billion.
    • Domestic Card period-end loans increased $4.0 billion, or 5 percent, to $88.6 billion.
    • Consumer Banking period-end loans increased $824 million, or 1 percent, to $71.4 billion.
      • Auto period-end loans increased $1.8 billion, or 4 percent, to $44.5 billion.
      • Home loans period-end loans decreased $985 million, or 4 percent, to $23.4 billion, driven by planned run-off of acquired portfolios.
    • Commercial Banking period-end loans increased $2.0 billion, or 3 percent, to $66.2 billion.
  • Average loans held for investment in the quarter increased $3.6 billion, or 2 percent, to $230.4 billion.
    • Domestic Card average loans increased $833 million, or 1 percent, to $86.0 billion.
    • Consumer Banking average loans increased $692 million, or 1 percent, to $71.0 billion:
      • Auto average loans increased $1.6 billion, or 4 percent, to $43.6 billion.
      • Home loans average loans decreased $946 million, or 4 percent, to $23.8 billion, driven by planned run-off of acquired portfolios.
    • Commercial Banking average loans increased $1.6 billion, or 2 percent, to $64.9 billion.
  • Period-end total deposits decreased $720 million, or less than 1 percent, to $221.1 billion, while average deposits increased $2.0 billion, or 1 percent, to $221.1 billion.
  • Interest-bearing deposits rate paid increased by 2 basis points to 0.60 percent.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 21, 2016 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us," then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through August 4, 2016 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2015.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $221.1 billion in deposits and $339.1 billion in total assets as of June 30, 2016. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, 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


Second Quarter 2016(1)


Table of Contents




Capital One Financial Corporation Consolidated Results

Page


Table 1:

Financial Summary—Consolidated

1


Table 2:

Selected Metrics—Consolidated

4


Table 3:

Consolidated Statements of Income

5


Table 4:

Consolidated Balance Sheets

7


Table 5:

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

9


Table 6:

Average Balances, Net Interest Income and Net Interest Margin

11


Table 7:

Loan Information and Performance Statistics

12


Table 8:

Allowance for Loan and Lease 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


Table 14:

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

21

Other



Table 15:

Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital 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, 2016 once it is filed with the Securities and Exchange Commission.



 


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary—Consolidated



























2016 Q2 vs.


Six Months Ended June 30,

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


2016


2016


2015


2015


2015


2016


2015






2016 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2016


2015


2015

Income Statement





















Net interest income


$

5,093



$

5,056



$

4,961



$

4,760



$

4,537



1

%


12

%


$

10,149



$

9,113



11

%

Non-interest income


1,161



1,164



1,233



1,140



1,135





2



2,325



2,206



5


Total net revenue(1)


6,254



6,220



6,194



5,900



5,672



1



10



12,474



11,319



10


Provision for credit losses


1,592



1,527



1,380



1,092



1,129



4



41



3,119



2,064



51


Non-interest expense:





















Marketing


415



428



564



418



387



(3)



7



843



762



11


Amortization of intangibles


95



101



103



106



111



(6)



(14)



196



221



(11)


Operating expenses


2,785



2,694



2,813



2,636



2,809



3



(1)



5,479



5,373



2


Total non-interest expense


3,295



3,223



3,480



3,160



3,307



2





6,518



6,356



3


Income from continuing operations before income taxes


1,367



1,470



1,334



1,648



1,236



(7)



11



2,837



2,899



(2)


Income tax provision


424



452



426



530



384



(6)



10



876



913



(4)


Income from continuing operations, net of tax


943



1,018



908



1,118



852



(7)



11



1,961



1,986



(1)


Income (loss) from discontinued operations, net of tax(2)


(1)



(5)



12



(4)



11



(80)



**



(6)



30



**


Net income


942



1,013



920



1,114



863



(7)



9



1,955



2,016



(3)


Dividends and undistributed earnings allocated to participating securities(3)


(6)



(6)



(4)



(6)



(4)





50



(12)



(10)



20


Preferred stock dividends


(65)



(37)



(68)



(29)



(29)



76



124



(102)



(61)



67


Net income available to common stockholders


$

871



$

970



$

848



$

1,079



$

830



(10)



5



$

1,841



$

1,945



(5)


Common Share Statistics





















Basic earnings per common share:(3)





















Net income from continuing operations


$

1.70



$

1.86



$

1.58



$

2.01



$

1.50



(9)

%


13

%


$

3.57



$

3.49



2

%

Income (loss) from discontinued operations




(0.01)



0.02



(0.01)



0.02



**



**



(0.01)



0.06



**


Net income per basic common share


$

1.70



$

1.85



$

1.60



$

2.00



$

1.52



(8)



12



$

3.56



$

3.55




Diluted earnings per common share:(3)





















Net income from continuing operations


$

1.69



$

1.85



$

1.56



$

1.99



$

1.48



(9)



14



$

3.53



$

3.45



2


Income (loss) from discontinued operations




(0.01)



0.02



(0.01)



0.02



**



**



(0.01)



0.06



**


Net income per diluted common share(4)


$

1.69



$

1.84



$

1.58



$

1.98



$

1.50



(8)



13



$

3.52



$

3.51




Weighted-average common shares outstanding (in millions):





















Basic


511.7



523.5



530.8



540.6



545.6



(2)



(6)



517.6



548.0



(6)


Diluted


516.5



528.0



536.3



546.3



552.0



(2)



(6)



522.3



554.7



(6)


Common shares outstanding (period end, in millions)


505.9



514.5



527.3



534.9



542.5



(2)



(7)



505.9



542.5



(7)


Dividends paid per common share


$

0.40



$

0.40



$

0.40



$

0.40



$

0.40







$

0.80



$

0.70



14


Tangible book value per common share (period end)(5)


57.84



55.94



53.65



54.66



52.74



3



10



57.84



52.74



10













































2016 Q2 vs.


Six Months Ended June 30,

(Dollars in millions) (unaudited)


2016


2016


2015


2015


2015


2016


2015






2016 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2016


2015


2015

Balance Sheet (Period End)





















Loans held for investment(6)


$

234,603



$

227,613



$

229,851



$

213,329



$

209,705



3

%


12

%


$

234,603



$

209,705



12

%

Interest-earning assets


307,163



298,348



302,007



283,073



280,137



3



10



307,163



280,137



10


Total assets


339,117



330,346



334,048



313,700



310,510



3



9



339,117



310,510



9


Interest-bearing deposits


195,635



196,597



191,874



187,848



183,657





7



195,635



183,657



7


Total deposits


221,059



221,779



217,721



212,903



208,780





6



221,059



208,780



6


Borrowings


59,181



50,497



59,115



42,778



45,766



17



29



59,181



45,766



29


Common equity


44,813



44,411



43,990



44,391



43,849



1



2



44,813



43,849



2


Total stockholders' equity


48,108



47,707



47,284



47,685



46,659



1



3



48,108



46,659



3


Balance Sheet (Average Balances)





















Loans held for investment(6)


$

230,379



$

226,736



$

220,052



$

211,227



$

206,337



2

%


12

%


$

228,557



$

205,768



11

%

Interest-earning assets


302,764



299,456



292,054



283,082



276,585



1



9



301,106



277,501



9


Total assets


334,479



331,919



323,354



313,822



307,206



1



9



333,197



308,295



8


Interest-bearing deposits


195,641



194,125



189,885



185,800



183,946



1



6



194,883



183,475



6


Total deposits


221,146



219,180



215,899



210,974



209,143



1



6



220,163



208,501



6


Borrowings


54,359



53,761



48,850



45,070



41,650



1



31



54,060



43,854



23


Common equity


45,640



45,782



45,418



45,407



44,878





2



45,711



44,727



2


Total stockholders' equity


48,934



49,078



48,712



48,456



47,255





4



49,007



46,828



5


 

 

               


 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated



























2016 Q2 vs.


Six Months Ended June 30,

(Dollars in millions except as noted) (unaudited)


2016


2016


2015


2015


2015


2016


2015






2016 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2016


2015


2015

Performance Metrics





















Net interest income growth (period over period)


1

%


2

%


4

%


5

%


(1)

%


**



**



11

%


5

%


**


Non-interest income growth (period over period)




(6)



8





6



**



**



5



2



**


Total net revenue growth (period over period)


1





5



4





**



**



10



4



**


Total net revenue margin(7)


8.26



8.31



8.48



8.34



8.20



(5)

bps


6

bps


8.29



8.16



13

bps

Net interest margin(8)


6.73



6.75



6.79



6.73



6.56



(2)



17



6.74



6.57



17


Return on average assets


1.13



1.23



1.12



1.43



1.11



(10)



2



1.18



1.29



(11)


Return on average tangible assets(9)


1.18



1.29



1.18



1.50



1.17



(11)



1



1.24



1.36



(12)


Return on average common equity(10)


7.64



8.52



7.36



9.54



7.30



(88)



34



8.08



8.56



(48)


Return on average tangible common equity(11)


11.61



12.94



11.11



14.33



11.06



(133)



55



12.28



13.01



(73)


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


5.72



5.69



6.33



5.98



6.41



3



(69)



5.70



6.18



(48)


Efficiency ratio(12)


52.69



51.82



56.18



53.56



58.30



87



(561)



52.25



56.15



(390)


Effective income tax rate for continuing operations


31.0



30.7



31.9



32.2



31.1



30



(10)



30.9



31.5



(60)


Employees (in thousands), period end


46.1



45.8



45.4



46.9



47.5



1

%


(3)

%


46.1



47.5



(3)

%

Credit Quality Metrics





















Allowance for loan and lease losses


$

5,881



$

5,416



$

5,130



$

4,847



$

4,676



9

%


26

%


$

5,881



$

4,676



26

%

Allowance as a percentage of loans held for investment


2.51

%


2.38

%


2.23

%


2.27

%


2.23

%


13

bps


28

bps


2.51

%


2.23

%


28

bps

Net charge-offs


$

1,155



$

1,178



$

1,078



$

890



$

846



(2)

%


37

%


$

2,333



$

1,727



35

%

Net charge-off rate(13)


2.01

%


2.08

%


1.96

%


1.69

%


1.64

%


(7)

bps


37

bps


2.04

%


1.68

%


36

bps

30+ day performing delinquency rate


2.47



2.33



2.69



2.63



2.33



14



14



2.47



2.33



14


30+ day delinquency rate


2.79



2.64



3.00



2.95



2.65



15



14



2.79



2.65



14


Capital Ratios(14)





















Common equity Tier 1 capital


10.9

%


11.1

%


11.1

%


12.1

%


12.1

%


(20)

bps


(120)

bps


10.9

%


12.1

%


(120)

bps

Tier 1 capital


12.2



12.4



12.4



13.4



13.3



(20)



(110)



12.2



13.3



(110)


Total capital


14.4



14.6



14.6



15.1



15.1



(20)



(70)



14.4



15.1



(70)


Tier 1 leverage


10.2



10.2



10.6



11.1



11.1





(90)



10.2



11.1



(90)


Tangible common equity ("TCE")(15)


9.0



9.1



8.9



9.8



9.7



(10)



(70)



9.0



9.7



(70)


 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income













Three Months Ended


2016 Q2 vs.


Six Months Ended June 30,

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


2016


2016


2015


2016


2015






2016 vs.


Q2


Q1


Q2


Q1


Q2


2016


2015


2015

Interest income:

















Loans, including loans held for sale


$

5,148



$

5,085



$

4,531



1

%


14

%


$

10,233



$

9,071



13

%

Investment securities


405



415



382



(2)



6



820



788



4


Other


18



17



24



6



(25)



35



52



(33)


Total interest income


5,571



5,517



4,937



1



13



11,088



9,911



12


Interest expense:

















Deposits


292



283



272



3



7



575



543



6


Securitized debt obligations


47



48



36



(2)



31



95



69



38


Senior and subordinated notes


111



106



80



5



39



217



159



36


Other borrowings


28



24



12



17



133



52



27



93


Total interest expense


478



461



400



4



20



939



798



18


Net interest income


5,093



5,056



4,537



1



12



10,149



9,113



11


Provision for credit losses


1,592



1,527



1,129



4



41



3,119



2,064



51


Net interest income after provision for credit losses


3,501



3,529



3,408



(1)



3



7,030



7,049




Non-interest income:

















Service charges and other customer-related fees


371



404



429



(8)



(14)



775



866



(11)


Interchange fees, net


616



596



567



3



9



1,212



1,063



14


Net other-than-temporary impairment recognized in earnings


(2)



(8)



(7)



(75)



(71)



(10)



(22)



(55)


Other


176



172



146



2



21



348



299



16


Total non-interest income


1,161



1,164



1,135





2



2,325



2,206



5


Non-interest expense:

















Salaries and associate benefits


1,279



1,270



1,360



1



(6)



2,549



2,571



(1)


Occupancy and equipment


465



458



439



2



6



923



874



6


Marketing


415



428



387



(3)



7



843



762



11


Professional services


304



278



334



9



(9)



582



630



(8)


Communications and data processing


262



243



208



8



26



505



410



23


Amortization of intangibles


95



101



111



(6)



(14)



196



221



(11)


Other


475



445



468



7



1



920



888



4


Total non-interest expense


3,295



3,223



3,307



2





6,518



6,356



3


Income from continuing operations before income taxes


1,367



1,470



1,236



(7)



11



2,837



2,899



(2)


Income tax provision


424



452



384



(6)



10



876



913



(4)


Income from continuing operations, net of tax


943



1,018



852



(7)



11



1,961



1,986



(1)


Income (loss) from discontinued operations, net of tax(2)


(1)



(5)



11



(80)



**



(6)



30



**


Net income


942



1,013



863



(7)



9



1,955



2,016



(3)


Dividends and undistributed earnings allocated to participating securities(3)


(6)



(6)



(4)





50



(12)



(10)



20


Preferred stock dividends


(65)



(37)



(29)



76



124



(102)



(61)



67


Net income available to common stockholders


$

871



$

970



$

830



(10)



5



$

1,841



$

1,945



(5)





















Three Months Ended


2016 Q2 vs.


Six Months Ended June 30,

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


2016


2016


2015


2016


2015






2016 vs.


Q2


Q1


Q2


Q1


Q2


2016


2015


2015

Basic earnings per common share:(3)

















Net income from continuing operations


$

1.70



$

1.86



$

1.50



(9)

%


13

%


$

3.57



$

3.49



2

%

Income (loss) from discontinued operations




(0.01)



0.02



**



**



(0.01)



0.06



**


Net income per basic common share(4)


$

1.70



$

1.85



$

1.52



(8)



12



$

3.56



$

3.55




Diluted earnings per common share:(3)

















Net income from continuing operations


$

1.69



$

1.85



$

1.48



(9)



14



$

3.53



$

3.45



2


Income (loss) from discontinued operations




(0.01)



0.02



**



**



(0.01)



0.06



**


Net income per diluted common share(4)


$

1.69



$

1.84



$

1.50



(8)



13



$

3.52



$

3.51




Weighted-average common shares outstanding (in millions):

















Basic common shares


511.7



523.5



545.6



(2)



(6)



517.6



548.0



(6)


Diluted common shares


516.5



528.0



552.0



(2)



(6)



522.3



554.7



(6)


Dividends paid per common share


$

0.40



$

0.40



$

0.40







$

0.80



$

0.70



14


 


 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets

















June 30, 2016 vs.

(Dollars in millions) (unaudited)


June 30,

2016


December 31,
2015


June 30,

2015


December 31,
2015


June 30,
2015

Assets:











Cash and cash equivalents:











Cash and due from banks


$

3,253



$

3,407



$

2,879



(5)

%


13

%

Interest-bearing deposits with banks


3,840



4,577



4,275



(16)



(10)


Federal funds sold and securities purchased under agreements to resell


56



39



2



44



**


Total cash and cash equivalents


7,149



8,023



7,156



(11)




Restricted cash for securitization investors


265



1,017



253



(74)



5


Securities available for sale, at fair value


39,960



39,061



39,136



2



2


Securities held to maturity, at carrying value


25,120



24,619



23,668



2



6


Loans held for investment:(6)











Unsecuritized loans held for investment


202,778



196,068



175,407



3



16


Loans held in consolidated trusts


31,825



33,783



34,298



(6)



(7)


Total loans held for investment


234,603



229,851



209,705



2



12


Allowance for loan and lease losses


(5,881)



(5,130)



(4,676)



15



26


Net loans held for investment


228,722



224,721



205,029



2



12


Loans held for sale, at lower of cost or fair value


1,220



904



1,066



35



14


Premises and equipment, net


3,556



3,584



3,602



(1)



(1)


Interest receivable


1,236



1,189



1,056



4



17


Goodwill


14,495



14,480



13,984





4


Other assets


17,394



16,450



15,560



6



12


Total assets


$

339,117



$

334,048



$

310,510



2



9





















June 30, 2016 vs.

(Dollars in millions) (unaudited)


June 30,
2016


December 31,
2015


June 30,
2015


December 31,
2015


June 30,
2015

Liabilities:











Interest payable


$

301



$

299



$

262



1

%


15

%

Deposits:











Non-interest-bearing deposits


25,424



25,847



25,123



(2)



1


Interest-bearing deposits


195,635



191,874



183,657



2



7


Total deposits


221,059



217,721



208,780



2



6


Securitized debt obligations


16,130



16,166



13,785





17


Other debt:











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


999



981



1,888



2



(47)


Senior and subordinated notes


21,872



21,837



19,987





9


Other borrowings


20,180



20,131



10,106





100


Total other debt


43,051



42,949



31,981





35


Other liabilities


10,468



9,629



9,043



9



16


Total liabilities


291,009



286,764



263,851



1



10













Stockholders' equity:











Preferred stock


0



0



0






Common stock


7



6



6



17



17


Additional paid-in capital, net


29,786



29,655



29,063





2


Retained earnings


28,479



27,045



25,540



5



12


Accumulated other comprehensive income (loss)


241



(616)



(397)



**



**


Treasury stock, at cost


(10,405)



(8,806)



(7,553)



18



38


Total stockholders' equity


48,108



47,284



46,659



2



3


Total liabilities and stockholders' equity


$

339,117



$

334,048



$

310,510



2



9


       

       

       















CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)



**

Not meaningful.



(1)

Total net revenue was reduced by $244 million in Q2 2016, $228 million in Q1 2016, $222 million in Q4 2015, $195 million in Q3 2015 and $168 million in Q2 2015 for the estimated uncollectible amount of billed finance charges and fees and related losses.



(2)

Historically, the majority of the provision (benefit) for representation and warranty losses has been included, net of tax, in discontinued operations. The provision (benefit) for mortgage representation and warranty losses included the following activity:






2016


2016


2015


2015


2015


(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2


Provision (benefit) for mortgage representation and warranty losses before income taxes:












Recorded in continuing operations


$

(1)



$

(1)



$

(1)



$

(7)



$

(9)



Recorded in discontinued operations


2



3



(21)



3



(27)



Total provision (benefit) for mortgage representation and warranty losses before income taxes


$

1



$

2



$

(22)



$

(4)



$

(36)





The mortgage representation and warranty reserve was $614 million as of June 30, 2016, $610 million as of December 31, 2015 and $636 million as of June 30, 2015.



(3)

Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.



(4)

In Q2 2016, we recorded charges totaling $30 million associated with (i) a build of $54 million in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve"); offset by (ii) a gain of $24 million related to the exchange of our ownership interest in Visa Europe with Visa Inc. as a result of Visa Inc's acquisition of Visa Europe. In Q4 2015, we recorded charges totaling $72 million associated with (i) closing the GE Healthcare Financial Services ("HFS") acquisition and establishing an initial allowance and reserve related to the loans acquired; (ii) certain planned site closures; and (iii) revisions to the restructuring charges recorded in Q2 2015 to reflect updated information. In Q3 2015, we recorded a build in the U.K. PPI Reserve of $69 million. In Q2 2015, we recorded charges totaling $225 million associated with (i) a restructuring charge of $147 million for severance and related benefits pursuant to our ongoing benefit programs as a result of the realignment of our workforce; and (ii) a build in the U.K. PPI Reserve of $78 million. We report the following non-GAAP financial measures that we believe are helpful for investors and users of our financial information to understand the effect of these items on our reported results. The table below presents a reconciliation of our reported results to these non-GAAP financial measures. Period not presented had no adjustments.






2016 Q2


2015 Q4


2015 Q3


2015 Q2


(Dollars in millions, except per share data) (unaudited)


Pre-Tax Income


Net Income


Diluted EPS


Pre-Tax Income


Net Income


Diluted EPS


Pre-Tax Income


Net Income


Diluted EPS


Pre-Tax Income


Net Income


Diluted EPS


Reported results


$

1,367



$

942



$

1.69



$

1,334



$

920



$

1.58



$

1,648



$

1,114



$

1.98



$

1,236



$

863



$

1.50



Adjustments


30



37



0.07



72



46



0.09



69



69



0.12



225



155



0.28



Results excluding adjustments


$

1,397



$

979



$

1.76



$

1,406



$

966



$

1.67



$

1,717



$

1,183



$

2.10



$

1,461



$

1,018



$

1.78




(5)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on non-GAAP measures.



(6)

Included in loans held for investment are purchased credit-impaired loans ("PCI loans") recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3," or Accounting Standards Codification 310-30). These include certain of our consumer and commercial loans that were acquired through business combinations. The table below presents amounts related to PCI loans:






2016


2016


2015


2015


2015


(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2


PCI loans:












Period-end unpaid principal balance


$

18,256



$

19,492



$

20,434



$

20,585



$

21,841



Period-end loans held for investment


17,358



18,568



19,518



19,743



20,970



Average loans held for investment


17,783



18,894



19,319



20,116



21,440




 (7)

Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.



(8)

Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.



(9)

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: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on non-GAAP measures.



(10)

Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly titled measures reported by other companies.



(11)

Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Our calculation of ROTCE may not be comparable to similarly titled measures reported by other companies. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on non-GAAP measures.



 (12)

Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the adjustments discussed above in Footnote 4, was 52.32% for Q2 2016, 55.82% for Q4 2015, 52.78% for Q3 2015 and 54.63% for Q2 2015. The adjusted efficiency ratios are non-GAAP measures that we believe would provide useful information to investors and users of our financial information.



(13)

Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.



 (14)

Ratios as of the end of Q2 2016 are preliminary and therefore subject to change. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.



(15)

TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on non-GAAP measures.

 

 

        

                   


CAPITAL ONE FINANCIAL CORPORATION (COF)

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




2016 Q2


2016 Q1


2015 Q2



Average Balance


Interest Income/Expense(1)


Yield/Rate(1)


Average Balance


Interest Income/Expense(1)


Yield/Rate(1)


Average Balance


Interest Income/Expense(1)


Yield/Rate(1)

(Dollars in millions) (unaudited)










Interest-earning assets:



















Loans, including loans held for sale


$

231,496



$

5,148



8.90

%


$

227,573



$

5,085



8.94

%


$

207,335



$

4,531



8.74

%

Investment securities


65,754



405



2.46



65,156



415



2.55



63,771



382



2.40


Cash equivalents and other


5,514



18



1.31



6,727



17



1.01



5,479



24



1.75


Total interest-earning assets


$

302,764



$

5,571



7.36



$

299,456



$

5,517



7.37



$

276,585



$

4,937



7.14





















Interest-bearing liabilities:



















Interest-bearing deposits


$

195,641



$

292



0.60



$

194,125



$

283



0.58



$

183,946



$

272



0.59


Securitized debt obligations


15,226



47



1.23



15,361



48



1.25



13,219



36



1.09


Senior and subordinated notes


21,717



111



2.04



21,993



106



1.93



20,336



80



1.57


Other borrowings and liabilities


18,255



28



0.61



17,176



24



0.56



8,857



12



0.54


Total interest-bearing liabilities


$

250,839



$

478



0.76



$

248,655



$

461



0.74



$

226,358



$

400



0.71


Net interest income/spread




$

5,093



6.60





$

5,056



6.63





$

4,537



6.43


Impact of non-interest-bearing funding






0.13







0.12







0.13


Net interest margin






6.73

%






6.75

%






6.56

%




Six Months Ended June 30,



2016


2015



Average Balance


Interest Income/Expense(1)


Yield/Rate(1)


Average Balance


Interest Income/Expense(1)


Yield/Rate(1)

(Dollars in millions) (unaudited)







Interest-earning assets:













Loans, including loans held for sale


$

229,534



$

10,233



8.92

%


$

206,598



$

9,071



8.78

%

Investment securities


65,455



820



2.51



63,477



788



2.48


Cash equivalents and other


6,117



35



1.14



7,426



52



1.40


Total interest-earning assets


$

301,106



$

11,088



7.36



$

277,501



$

9,911



7.14















Interest-bearing liabilities:













Interest-bearing deposits


$

194,883



$

575



0.59



$

183,475



$

543



0.59


Securitized debt obligations


15,293



95



1.24



12,396



69



1.11


Senior and subordinated notes


21,855



217



1.99



20,465



159



1.55


Other borrowings and liabilities


17,716



52



0.59



11,771



27



0.46


Total interest-bearing liabilities


$

249,747



$

939



0.75



$

228,107



$

798



0.70


Net interest income/spread




$

10,149



6.61





$

9,113



6.44


Impact of non-interest-bearing funding






0.13







0.13


Net interest margin






6.74

%






6.57

%

__________

(1)

Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.

 

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)












Table 7: Loan Information and Performance Statistics




































2016 Q2 vs.


Six Months Ended June 30,

(Dollars in millions) (unaudited)


2016
Q2


2016
Q1


2015
Q4


2015
Q3


2015
Q2


2016
Q1


2015
Q2


2016


2015


2016 vs.
2015

Loans Held For Investment (Period End)





















Credit card:





















   Domestic credit card


$

88,581



$

84,561



$

87,939



$

82,178



$

78,984



5

%


12

%


$

88,581



$

78,984



12

%

   International credit card


8,323



8,138



8,186



7,957



8,219



2



1



8,323



8,219



1


Total credit card


96,904



92,699



96,125



90,135



87,203



5



11



96,904



87,203



11


Consumer banking:





















   Auto


44,502



42,714



41,549



41,052



39,991



4



11



44,502



39,991



11


   Home loan


23,358



24,343



25,227



26,340



27,595



(4)



(15)



23,358



27,595



(15)


   Retail banking


3,555



3,534



3,596



3,598



3,590



1



(1)



3,555



3,590



(1)


Total consumer banking


71,415



70,591



70,372



70,990



71,176



1





71,415



71,176




Commercial banking:





















   Commercial and multifamily real estate


26,341



25,559



25,518



23,585



22,886



3



15



26,341



22,886



15


   Commercial and industrial


39,313



38,102



37,135



27,873



27,660



3



42



39,313



27,660



42


     Total commercial lending


65,654



63,661



62,653



51,458



50,546



3



30



65,654



50,546



30


   Small-ticket commercial real estate


548



580



613



654



685



(6)



(20)



548



685



(20)


Total commercial banking


66,202



64,241



63,266



52,112



51,231



3



29



66,202



51,231



29


Other loans


82



82



88



92



95





(14)



82



95



(14)


Total loans held for investment


$

234,603



$

227,613



$

229,851



$

213,329



$

209,705



3



12



$

234,603



$

209,705



12


Loans Held For Investment (Average)





















Credit card:





















   Domestic credit card


$

85,981



$

85,148



$

83,760



$

80,402



$

75,924



1

%


13

%


$

85,564



$

75,349



14

%

   International credit card


8,401



7,839



8,127



8,048



7,977



7



5



8,120



7,895



3


Total credit card


94,382



92,987



91,887



88,450



83,901



2



12



93,684



83,244



13


Consumer banking:





















   Auto


43,605



41,962



41,333



40,560



39,546



4



10



42,784



38,970



10


   Home loan


23,835



24,781



25,776



26,934



28,251



(4)



(16)



24,308



28,869



(16)


   Retail banking


3,548



3,553



3,595



3,603



3,570





(1)



3,550



3,565




Total consumer banking


70,988



70,296



70,704



71,097



71,367



1



(1)



70,642



71,404



(1)


Commercial banking:





















   Commercial and multifamily real estate


25,661



25,015



25,613



23,305



22,853



3



12



25,338



22,985



10


   Commercial and industrial


38,713



37,762



31,132



27,620



27,414



3



41



38,237



27,303



40


     Total commercial lending


64,374



62,777



56,745



50,925



50,267



3



28



63,575



50,288



26


   Small-ticket commercial real estate


564



598



634



667



709



(6)



(20)



581



735



(21)


Total commercial banking


64,938



63,375



57,379



51,592



50,976



2



27



64,156



51,023



26


Other loans


71



78



82



88



93



(9)



(24)



75



97



(23)


Total average loans held for investment


$

230,379



$

226,736



$

220,052



$

211,227



$

206,337



2



12



$

228,557



$

205,768



11


Net Charge-Off (Recovery) Rates





















Credit card:





















   Domestic credit card


4.07

%


4.16

%


3.75

%


3.08

%


3.42

%


(9)

bps


65

bps


4.12

%


3.49

%


63

bps

   International credit card


3.54



3.24



2.76



1.80



2.65



30



89



3.39



2.73



66


Total credit card


4.02



4.09



3.66



2.96



3.35



(7)



67



4.05



3.42



63




































2016 Q2 vs.



Six Months Ended June 30,

(Dollars in millions) (unaudited)



2016
Q2



2016
Q1



2015
Q4



2015
Q3



2015
Q2


2016
Q1


2015
Q2



2016



2015


2016 vs.
2015

Consumer banking:




























   Auto



1.20

%



1.60

%



2.10

%



1.85

%



1.22

%


(40)

bps


(2)

bps



1.39

%



1.38

%


1

bps

   Home loan



0.09




0.05




0.05




0.01




0.04



4



5




0.07




0.03



4


   Retail banking



1.26




1.36




1.43




1.53




1.39



(10)



(13)




1.31




1.18



13


Total consumer banking



0.83




1.04




1.32




1.14




0.76



(21)



7




0.93




0.83



10


Commercial banking:




























   Commercial and multifamily real estate



(0.02)




(0.01)




(0.03)




(0.15)




(0.04)



(1)



2




(0.02)




(0.03)



1


   Commercial and industrial



0.62




0.49




0.07




0.61




0.13



13



49




0.56




0.09



47


     Total commercial lending



0.37




0.29




0.02




0.26




0.05



8



32




0.33




0.03



30


   Small-ticket commercial real estate



0.33




0.13




0.34




0.50




0.15



20



18




0.23




0.32



(9)


Total commercial banking



0.37




0.29




0.03




0.26




0.05



8



32




0.33




0.04



29


Total net charge-offs



2.01




2.08




1.96




1.69




1.64



(7)



37




2.04




1.68



36


30+ Day Performing Delinquency Rates




























Credit card:




























   Domestic credit card



3.14

%



3.09

%



3.39

%



3.28

%



2.84

%


5

bps


30

bps



3.14

%



2.84

%


30

bps

   International credit card



3.24




3.32




2.98




2.81




2.65



(8)



59




3.24




2.65



59


Total credit card



3.15




3.11




3.36




3.24




2.82



4



33




3.15




2.82



33


Consumer banking:




























   Auto



5.59




5.14




6.69




6.10




5.58



45



1




5.59




5.58



1


   Home loan



0.14




0.14




0.16




0.18




0.17





(3)




0.14




0.17



(3)


   Retail banking



0.62




0.61




0.76




0.62




0.66



1



(4)




0.62




0.66



(4)


Total consumer banking



3.56




3.19




4.05




3.62




3.24



37



32




3.56




3.24



32


Nonperforming Loans and Nonperforming Assets Rates(1)(2)




























Credit card:




























   International credit card



0.53

%



0.59

%



0.65

%



0.77

%



0.83

%


(6)

bps


(30)

bps



0.53

%



0.83

%


(30)

bps

Total credit card



0.05




0.05




0.06




0.07




0.08





(3)




0.05




0.08



(3)


Consumer banking:




























   Auto



0.38




0.31




0.53




0.49




0.40



7



(2)




0.38




0.40



(2)


   Home loan



1.24




1.26




1.23




1.18




1.13



(2)



11




1.24




1.13



11


   Retail banking



0.89




0.83




0.77




0.74




0.79



6



10




0.89




0.79



10


Total consumer banking



0.69




0.66




0.79




0.76




0.70



3



(1)




0.69




0.70



(1)


Commercial banking:




























   Commercial and multifamily real estate



0.10




0.12




0.03




0.03




0.12



(2)



(2)




0.10




0.12



(2)


   Commercial and industrial



2.58




2.66




1.45




1.58




1.56



(8)



102




2.58




1.56



102


     Total commercial lending



1.59




1.64




0.87




0.87




0.91



(5)



68




1.59




0.91



68


   Small-ticket commercial real estate



1.59




1.11




0.83




0.65




0.47



48



112




1.59




0.47



112


Total commercial banking



1.59




1.63




0.87




0.87




0.90



(4)



69




1.59




0.90



69


Total nonperforming loans



0.68




0.69




0.51




0.50




0.50



(1)



18




0.68




0.50



18


Total nonperforming assets



0.80




0.83




0.65




0.64




0.64



(3)



16




0.80




0.64



16


 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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






Three Months Ended June 30, 2016



Credit Card


Consumer Banking







(Dollars in millions) (unaudited)


Domestic Card


International Card


Total Credit Card


Auto


Home
Loan


Retail
Banking


Total
Consumer
Banking


Commercial Banking


Other


Total

Allowance for loan and lease losses:





















Balance as of March 31, 2016


$

3,440



$

345



$

3,785



$

772



$

64



$

78



$

914



$

714



$

3



$

5,416


Provision (benefit) for loan and lease losses


1,164



97



1,261



191



(1)



14



204



185



(1)



1,649


Charge-offs


(1,102)



(113)



(1,215)



(227)



(7)



(14)



(248)



(64)



(1)



(1,528)


Recoveries


228



38



266



97



2



3



102



4



1



373


Net charge-offs


(874)



(75)



(949)



(130)



(5)



(11)



(146)



(60)





(1,155)


Other changes(3)




(11)



(11)











(18)





(29)


Balance as of June 30, 2016


3,730



356



4,086



833



58



81



972



821



2



5,881


Reserve for unfunded lending commitments:





















Balance as of March 31, 2016












8



8



218





226


Provision (benefit) for losses on unfunded lending commitments
















(57)





(57)


Balance as of June 30, 2016












8



8



161





169


Combined allowance and reserve as of June 30, 2016


$

3,730



$

356



$

4,086



$

833



$

58



$

89



$

980



$

982



$

2



$

6,050





Six Months Ended June 30, 2016



Credit Card


Consumer Banking







(Dollars in millions) (unaudited)


Domestic Card


International Card


Total Credit Card


Auto


Home
Loan


Retail
Banking


Total
Consumer
Banking


Commercial Banking


Other


Total

Allowance for loan and lease losses:





















Balance as of December 31, 2015


$

3,355



$

299



$

3,654



$

726



$

70



$

72



$

868



$

604



$

4



$

5,130


Provision (benefit) for loan and lease losses


2,136



196



2,332



405



(4)



32



433



356



(3)



3,118


Charge-offs


(2,225)



(212)



(2,437)



(496)



(12)



(31)



(539)



(112)



(2)



(3,090)


Recoveries


464



74



538



198



4



8



210



6



3



757


Net charge-offs


(1,761)



(138)



(1,899)



(298)



(8)



(23)



(329)



(106)



1



(2,333)


Other changes(3)




(1)



(1)











(33)





(34)


Balance as of June 30, 2016


3,730



356



4,086



833



58



81



972



821



2



5,881


Reserve for unfunded lending commitments:





















Balance as of December 31, 2015












7



7



161





168


Provision (benefit) for losses on unfunded lending commitments












1



1







1


Balance as of June 30, 2016












8



8



161





169


Combined allowance and reserve as of June 30, 2016


$

3,730



$

356



$

4,086



$

833



$

58



$

89



$

980



$

982



$

2



$

6,050


 


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial Summary—Business Segment Results










Three Months Ended June 30, 2016


Six Months Ended June 30, 2016

(Dollars in millions) (unaudited)


Total


Credit Card


Consumer Banking


Commercial Banking


Other


Total


Credit Card


Consumer Banking


Commercial Banking


Other

Net interest income (expense)


$

5,093



$

3,045



$

1,439



$

559



$

50



$

10,149



$

6,078



$

2,859



$

1,096



$

116


Non-interest income


1,161



859



175



129



(2)



2,325



1,706



366



247



6


Total net revenue (loss)(4)


6,254



3,904



1,614



688



48



12,474



7,784



3,225



1,343



122


Provision (benefit) for credit losses


1,592



1,261



204



128



(1)



3,119



2,332



434



356



(3)


Non-interest expense


3,295



1,883



1,006



343



63



6,518



3,746



1,996



665



111


Income (loss) from continuing operations before income taxes


1,367



760



404



217



(14)



2,837



1,706



795



322



14


Income tax provision (benefit)


424



276



147



79



(78)



876



613



289



117



(143)


Income (loss) from continuing operations, net of tax


$

943



$

484



$

257



$

138



$

64



$

1,961



$

1,093



$

506



$

205



$

157

























Three Months Ended March 31, 2016











(Dollars in millions) (unaudited)


Total


Credit Card


Consumer Banking


Commercial Banking


Other











Net interest income (expense)


$

5,056



$

3,033



$

1,420



$

537



$

66












Non-interest income


1,164



847



191



118



8












Total net revenue (loss)(4)


6,220



3,880



1,611



655



74












Provision (benefit) for credit losses


1,527



1,071



230



228



(2)












Non-interest expense


3,223



1,863



990



322



48












Income (loss) from continuing operations before income taxes


1,470



946



391



105



28












Income tax provision (benefit)


452



337



142



38



(65)












Income (loss) from continuing operations, net of tax


$

1,018



$

609



$

249



$

67



$

93



































Three Months Ended June 30, 2015


Six Months Ended June 30, 2015

(Dollars in millions) (unaudited)


Total


Credit Card


Consumer Banking


Commercial Banking


Other


Total


Credit Card


Consumer Banking


Commercial Banking


Other

Net interest income (expense)


$

4,537



$

2,633



$

1,444



$

466



$

(6)



$

9,113



$

5,299



$

2,878



$

927



$

9


Non-interest income


1,135



845



196



123



(29)



2,206



1,661



354



237



(46)


Total net revenue (loss)(4)


5,672



3,478



1,640



589



(35)



11,319



6,960



3,232



1,164



(37)


Provision (benefit) for credit losses


1,129



895



185



49





2,064



1,564



391



109




Non-interest expense


3,307



1,857



998



270



182



6,356



3,633



1,968



542



213


Income (loss) from continuing operations before income taxes


1,236



726



457



270



(217)



2,899



1,763



873



513



(250)


Income tax provision (benefit)


384



263



166



98



(143)



913



632



316



186



(221)


Income (loss) from continuing operations, net of tax


$

852



$

463



$

291



$

172



$

(74)



$

1,986



$

1,131



$

557



$

327



$

(29)























 


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Credit Card Business






















2016 Q2 vs.


Six Months Ended June 30,



2016


2016


2015


2015


2015


2016


2015






2016 vs.

(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2016


2015


2015

Credit Card(5)





















Earnings:





















Net interest income


$

3,045



$

3,033



$

2,996



$

2,866



$

2,633





16

%


$

6,078



$

5,299



15

%

Non-interest income


859



847



902



858



845



1

%


2



1,706



1,661



3


Total net revenue (loss)


3,904



3,880



3,898



3,724



3,478



1



12



7,784



6,960



12


Provision (benefit) for credit losses


1,261



1,071



1,022



831



895



18



41



2,332



1,564



49


Non-interest expense


1,883



1,863



2,021



1,848



1,857



1



1



3,746



3,633



3


Income (loss) from continuing operations before income taxes


760



946



855



1,045



726



(20)



5



1,706



1,763



(3)


Income tax provision (benefit)


276



337



302



375



263



(18)



5



613



632



(3)


Income (loss) from continuing operations, net of tax


$

484



$

609



$

553



$

670



$

463



(21)



5



$

1,093



$

1,131



(3)


Selected performance metrics:





















Period-end loans held for investment


$

96,904



$

92,699



$

96,125



$

90,135



$

87,203



5

%


11

%


$

96,904



$

87,203



11

%

Average loans held for investment


94,382



92,987



91,887



88,450



83,901



2



12



93,684



83,244



13


Average yield on loans held for investment(6)


14.49

%


14.60

%


14.45

%


14.39

%


13.98

%


(11)

bps


51

bps


14.55

%


14.14

%


41

bps

Total net revenue margin(7)


16.55



16.69



16.97



16.84



16.58



(14)



(3)



16.62



16.72



(10)


Net charge-off rate


4.02



4.09



3.66



2.96



3.35



(7)



67



4.05



3.42



63


30+ day performing delinquency rate


3.15



3.11



3.36



3.24



2.82



4



33



3.15



2.82



33


30+ day delinquency rate


3.18



3.15



3.40



3.29



2.88



3



30



3.18



2.88



30


Nonperforming loan rate(1)


0.05



0.05



0.06



0.07



0.08





(3)



0.05



0.08



(3)


PCCR intangible amortization


$

67



$

70



$

74



$

78



$

80



(4)

%


(16)

%


$

137



$

164



(16)

%

Purchase volume(8)


78,019



68,189



75,350



69,875



68,559



14



14



146,208



125,942



16



































2016 Q2 vs.


Six Months Ended June 30,



2016


2016


2015


2015


2015


2016


2015






2016 vs.

(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2016


2015


2015

Domestic Card





















Earnings:





















Net interest income


$

2,769



$

2,756



$

2,718



$

2,613



$

2,395





16

%


$

5,525



$

4,816



15

%

Non-interest income


792



774



830



814



796



2

%


(1)



1,566



1,539



2


Total net revenue (loss)


3,561



3,530



3,548



3,427



3,191



1



12



7,091



6,355



12


Provision (benefit) for credit losses


1,164



972



945



796



853



20



36



2,136



1,463



46


Non-interest expense


1,669



1,671



1,796



1,630



1,621





3



3,340



3,201



4


Income (loss) from continuing operations before income taxes


728



887



807



1,001



717



(18)



2



1,615



1,691



(4)


Income tax provision (benefit)


265



323



293



362



259



(18)



2



588



612



(4)


Income (loss) from continuing operations, net of tax


$

463



$

564



$

514



$

639



$

458



(18)



1



$

1,027



$

1,079



(5)


Selected performance metrics:





















Period-end loans held for investment


$

88,581



$

84,561



$

87,939



$

82,178



$

78,984



5

%


12

%


$

88,581



$

78,984



12

%

Average loans held for investment


85,981



85,148



83,760



80,402



75,924



1



13



85,564



75,349



14


Average yield on loans held for investment(6)


14.40

%


14.43

%


14.31

%


14.35

%


13.95

%


(3)

bps


45

bps


14.41

%


14.09

%


32

bps

Total net revenue margin(7)


16.57



16.58



16.95



17.05



16.81



(1)



(24)



16.58



16.87



(29)


Net charge-off rate


4.07



4.16



3.75



3.08



3.42



(9)



65



4.12



3.49



63


30+ day delinquency rate


3.14



3.09



3.39



3.28



2.84



5



30



3.14



2.84



30


Purchase volume(8)


$

71,050



$

62,617



$

68,740



$

63,777



$

62,198



13

%


14

%


$

133,667



$

114,223



17

%

International Card(5)





















Earnings:





















Net interest income


$

276



$

277



$

278



$

253



$

238





16

%


$

553



$

483



14

%

Non-interest income


67



73



72



44



49



(8)

%


37



140



122



15


Total net revenue (loss)


343



350



350



297



287



(2)



20



693



605



15


Provision (benefit) for credit losses


97



99



77



35



42



(2)



131



196



101



94


Non-interest expense


214



192



225



218



236



11



(9)



406



432



(6)


Income (loss) from continuing operations before income taxes


32



59



48



44



9



(46)



**



91



72



26


Income tax provision (benefit)


11



14



9



13



4



(21)



175



25



20



25


Income (loss) from continuing operations, net of tax


$

21



$

45



$

39



$

31



$

5



(53)



**



$

66



$

52



27


Selected performance metrics:





















Period-end loans held for investment


$

8,323



$

8,138



$

8,186



$

7,957



$

8,219



2

%


1

%


$

8,323



$

8,219



1

%

Average loans held for investment


8,401



7,839



8,127



8,048



7,977



7



5



8,120



7,895



3


Average yield on loans held for investment(6)


15.45

%


16.47

%


15.96

%


14.88

%


14.29

%


(102)

bps


116

bps


15.94

%


14.60

%


134

bps

Total net revenue margin(7)


16.32



17.85



17.21



14.77



14.36



(153)



196



17.06



15.33



173


Net charge-off rate


3.54



3.24



2.76



1.80



2.65



30



89



3.39



2.73



66


30+ day performing delinquency rate


3.24



3.32



2.98



2.81



2.65



(8)



59



3.24



2.65



59


30+ day delinquency rate


3.65



3.76



3.46



3.39



3.29



(11)



36



3.65



3.29



36


Nonperforming loan rate(1)


0.53



0.59



0.65



0.77



0.83



(6)



(30)



0.53



0.83



(30)


Purchase volume(8)


$

6,969



$

5,572



$

6,610



$

6,098



$

6,361



25

%


10

%


$

12,541



$

11,719



7

%

 


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Consumer Banking Business





















2016 Q2 vs.


Six Months Ended June 30,



2016


2016


2015


2015


2015


2016


2015






2016 vs.

(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2016


2015


2015

Consumer Banking





















Earnings:





















Net interest income


$

1,439



$

1,420



$

1,434



$

1,443



$

1,444



1

%




$

2,859



$

2,878



(1)

%

Non-interest income


175



191



182



174



196



(8)



(11)

%


366



354



3


Total net revenue (loss)


1,614



1,611



1,616



1,617



1,640





(2)



3,225



3,232




Provision (benefit) for credit losses


204



230



240



188



185



(11)



10



434



391



11


Non-interest expense


1,006



990



1,057



1,001



998



2



1



1,996



1,968



1


Income (loss) from continuing operations before income taxes


404



391



319



428



457



3



(12)



795



873



(9)


Income tax provision (benefit)


147



142



115



155



166



4



(11)



289



316



(9)


Income (loss) from continuing operations, net of tax


$

257



$

249



$

204



$

273



$

291



3



(12)



$

506



$

557



(9)


Selected performance metrics:





















Period-end loans held for investment


$

71,415



$

70,591



$

70,372



$

70,990



$

71,176



1

%




$

71,415



$

71,176




Average loans held for investment


70,988



70,296



70,704



71,097



71,367



1



(1)

%


70,642



71,404



(1)

%

Average yield on loans held for investment(6)


6.28

%


6.18

%


6.25

%


6.25

%


6.27

%


10

bps


1

bps


6.23

%


6.27

%


(4)

bps

Auto loan originations


$

6,529



$

5,844



$

4,977



$

5,590



$

5,433



12

%


20

%


$

12,373



$

10,618



17

%

Period-end deposits


176,340



177,803



172,702



170,866



170,321



(1)



4



176,340



170,321



4


Average deposits


176,808



174,254



171,521



170,816



171,076



1



3



175,531



170,339



3


Average deposit interest rate


0.55

%


0.54

%


0.54

%


0.56

%


0.57

%


1

bps


(2)

bps


0.54

%


0.57

%


(3)

bps

Net charge-off rate


0.83



1.04



1.32



1.14



0.76



(21)



7



0.93



0.83



10


30+ day performing delinquency rate


3.56



3.19



4.05



3.62



3.24



37



32



3.56



3.24



32


30+ day delinquency rate


4.07



3.67



4.67



4.22



3.80



40



27



4.07



3.80



27


Nonperforming loan rate(1)


0.69



0.66



0.79



0.76



0.70



3



(1)



0.69



0.70



(1)


Nonperforming asset rate(2)


0.96



0.95



1.10



1.05



0.98



1



(2)



0.96



0.98



(2)


 


 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Commercial Banking Business




















2016 Q2 vs.


Six Months Ended June 30,



2016


2016


2015


2015


2015


2016


2015






2016 vs.

(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2016


2015


2015

Commercial Banking





















Earnings:





















Net interest income


$

559



$

537



$

484



$

454



$

466



4

%


20

%


$

1,096



$

927



18

%

Non-interest income


129



118



142



108



123



9



5



247



237



4


Total net revenue (loss)(4)


688



655



626



562



589



5



17



1,343



1,164



15


Provision (benefit) for credit losses


128



228



118



75



49



(44)



161



356



109



**


Non-interest expense


343



322



342



272



270



7



27



665



542



23


Income (loss) from continuing operations before income taxes


217



105



166



215



270



107



(20)



322



513



(37)


Income tax provision (benefit)


79



38



60



78



98



108



(19)



117



186



(37)


Income (loss) from continuing operations, net of tax


$

138



$

67



$

106



$

137



$

172



106



(20)



$

205



$

327



(37)


Selected performance metrics:





















Period-end loans held for investment


$

66,202



$

64,241



$

63,266



$

52,112



$

51,231



3

%


29

%


$

66,202



$

51,231



29

%

Average loans held for investment


64,938



63,375



57,379



51,592



50,976



2



27



64,156



51,023



26


Average yield on loans held for investment(4)(6)


3.45

%


3.38

%


3.18

%


3.21

%


3.26

%


7

bps


19

bps


3.42

%


3.24

%


18

bps

Period-end deposits


$

34,281



$

33,383



$

34,257



$

32,751



$

32,909



3

%


4

%


$

34,281



$

32,909



4

%

Average deposits


33,764



34,076



33,797



32,806



32,778



(1)



3



33,920



32,811



3


Average deposit interest rate


0.27

%


0.27

%


0.26

%


0.25

%


0.25

%




2

bps


0.27

%


0.24

%


3

bps

Net charge-off rate


0.37



0.29



0.03



0.26



0.05



8

bps


32



0.33



0.04



29


Nonperforming loan rate(1)(9)


1.59



1.63



0.87



0.87



0.90



(4)



69



1.59



0.90



69


Nonperforming asset rate(2)(9)


1.60



1.64



0.87



0.87



0.91



(4)



69



1.60



0.91



69


Risk category:(9)(10)





















Noncriticized


$

61,926



$

59,663



$

59,743



$

49,803



$

48,847



4

%


27

%


$

61,926



$

48,847



27

%

Criticized performing


2,456



2,595



2,015



1,725



1,767



(5)



39



2,456



1,767



39


Criticized nonperforming


1,050



1,050



550



453



463





127



1,050



463



127


PCI loans(9)


770



933



958



131



154



(17)



**



770



154



**


Total commercial loans


$

66,202



$

64,241



$

63,266



$

52,112



$

51,231



3



29



$

66,202



$

51,231



29


Risk category as a percentage of period-end loans held for investment:(9)(10)





















Noncriticized


93.5

%


92.9

%


94.4

%


95.6

%


95.4

%


60

bps


(190)

bps


93.5

%


95.4

%


(190)

bps

Criticized performing


3.7



4.0



3.2



3.3



3.4



(30)



30



3.7



3.4



30


Criticized nonperforming


1.6



1.6



0.9



0.9



0.9





70



1.6



0.9



70


PCI loans(9)


1.2



1.5



1.5



0.2



0.3



(30)



90



1.2



0.3



90


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























2016 Q2 vs.


Six Months Ended June 30,



2016


2016


2015


2015


2015


2016


2015






2016 vs.

(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2016


2015


2015

Other





















Earnings:





















Net interest income (expense)


$

50



$

66



$

47



$

(3)



$

(6)



(24)

%


**



$

116



$

9



**

Non-interest income


(2)



8



7





(29)



**



(93)

%


6



(46)



**

Total net revenue (loss)(4)


48



74



54



(3)



(35)



(35)



**



122



(37)



**

Provision (benefit) for credit losses


(1)



(2)





(2)





(50)



**



(3)





**

Non-interest expense(11)


63



48



60



39



182



31



(65)



111



213



(48)

%

Income (loss) from continuing operations before income taxes


(14)



28



(6)



(40)



(217)



**



(94)



14



(250)



**

Income tax provision (benefit)


(78)



(65)



(51)



(78)



(143)



20



(45)



(143)



(221)



(35)


Income (loss) from continuing operations, net of tax


$

64



$

93



$

45



$

38



$

(74)



(31)



**



$

157



$

(29)



**

Selected performance metrics:





















Period-end loans held for investment


$

82



$

82



$

88



$

92



$

95





(14)

%


$

82



$

95



(14)

%

Average loans held for investment


71



78



82



88



93



(9)

%


(24)



75



97



(23)


Period-end deposits


10,438



10,593



10,762



9,286



5,550



(1)



88



10,438



5,550



88


Average deposits


10,574



10,850



10,581



7,352



5,289



(3)



100



10,712



5,351



100


Total





















Earnings:





















Net interest income


$

5,093



$

5,056



$

4,961



$

4,760



$

4,537



1

%


12

%


$

10,149



$

9,113



11

%

Non-interest income


1,161



1,164



1,233



1,140



1,135





2



2,325



2,206



5


Total net revenue (loss)


6,254



6,220



6,194



5,900



5,672



1



10



12,474



11,319



10


Provision (benefit) for credit losses


1,592



1,527



1,380



1,092



1,129



4



41



3,119



2,064



51


Non-interest expense


3,295



3,223



3,480



3,160



3,307



2





6,518



6,356



3


Income (loss) from continuing operations before income taxes


1,367



1,470



1,334



1,648



1,236



(7)



11



2,837



2,899



(2)


Income tax provision (benefit)


424



452



426



530



384



(6)



10



876



913



(4)


Income (loss) from continuing operations, net of tax


$

943



$

1,018



$

908



$

1,118



$

852



(7)



11



$

1,961



$

1,986



(1)


Selected performance metrics:





















Period-end loans held for investment


$

234,603



$

227,613



$

229,851



$

213,329



$

209,705



3

%


12

%


$

234,603



$

209,705



12

%

Average loans held for investment


230,379



226,736



220,052



211,227



206,337



2



12



228,557



205,768



11


Period-end deposits


221,059



221,779



217,721



212,903



208,780





6



221,059



208,780



6


Average deposits


221,146



219,180



215,899



210,974



209,143



1



6



220,163



208,501



6


 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



(1)

The 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.



(2)

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. Calculation of nonperforming asset rates for our Consumer Banking and Commercial Banking businesses do not include the impact of acquired REOs.



(3)

Represents foreign currency translation adjustments and the net impact of loan transfers and sales.



(4)

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.



(5)

Includes a build in our U.K. PPI Reserve in Q2 2016, Q3 2015 and Q2 2015, which impacted both total net revenue and non-interest expense within our International Card business.



(6)

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.



(7)

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.



(8)

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.



(9)

The loans held for investment acquired in the HFS acquisition included $667 million, $825 million and $835 million of PCI loans as of June 30, 2016, March 31, 2016 and December 31, 2015, respectively, that are being accounted for under ASC 310-30 (formerly "SOP 03-3") due to their deterioration in credit quality since origination. From a managed perspective, we evaluate loans based on their actual risk ratings, and accordingly we are also including our nonperforming and criticized ratios measured on that basis. The table below presents our nonperforming loan rate, nonperforming asset rate and risk category information as if these PCI loans were classified based on their risk ratings in each of the periods impacted by the HFS acquisition.






2016


2016


2015


(Dollars in millions) (unaudited)


Q2


Q1


Q4


Selected performance metrics








Nonperforming loan rate


1.63%



1.69%



0.93%



Nonperforming asset rate


1.64



1.70



0.93



Risk category:








Noncriticized


$

62,058



$

59,729



$

59,743



Criticized performing


2,961



3,321



2,814



Criticized nonperforming


1,080



1,083



586



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








Noncriticized


93.7%



93.0%



94.4%



Criticized performing


4.5



5.2



4.5



Criticized nonperforming


1.6



1.7



0.9













(10)

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


(11)

Includes restructuring charges for employee severance and related benefits pursuant to our ongoing benefit programs.


**

Not meaningful.

 

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures(1)






Basel III Standardized Approach

(Dollars in millions) (unaudited)


June 30,
2016


March 31,
2016


December 31,
2015


September 30,
2015


June 30,
2015

Regulatory Capital Metrics











Common equity Tier 1 capital


$

29,486



$

29,231



$

29,544



$

30,109



$

29,804


Tier 1 capital


32,780



32,525



32,838



33,402



32,614


Total capital(2)


38,768



38,399



38,838



37,694



37,115


Risk-weighted assets


269,710



262,368



265,739



249,081



246,106


Average assets for the leverage ratio


319,969



317,403



309,037



300,010



293,291


Capital Ratios











Common equity Tier 1 capital(3)


10.9

%


11.1

%


11.1

%


12.1

%


12.1

%

Tier 1 capital(4)


12.2



12.4



12.4



13.4



13.3


Total capital(5)


14.4



14.6



14.6



15.1



15.1


Tier 1 leverage(6)


10.2



10.2



10.6



11.1



11.1


Tangible common equity ("TCE")(7)


9.0



9.1



8.9



9.8



9.7



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. These non-GAAP measures consist of 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. These metrics are considered key financial performance measures for the Company. The tables below provide the details of the calculation of our non-GAAP measures and regulatory capital. 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.




2016


2016


2015


2015


2015

(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2

Tangible Common Equity (Period End)











Stockholders' equity


$

48,108



$

47,707



$

47,284



$

47,685



$

46,659


Goodwill and intangible assets(8)


(15,553)



(15,629)



(15,701)



(15,153)



(15,240)


Noncumulative perpetual preferred stock(9)


(3,294)



(3,296)



(3,294)



(3,294)



(2,810)


Tangible common equity


$

29,261



$

28,782



$

28,289



$

29,238



$

28,609


Tangible Common Equity (Average)











Average stockholders' equity


$

48,934



$

49,078



$

48,712



$

48,456



$

47,255


Average goodwill and intangible assets(8)


(15,585)



(15,654)



(15,316)



(15,183)



(15,256)


Average noncumulative perpetual preferred stock(9)


(3,294)



(3,296)



(3,294)



(3,049)



(2,377)


Average tangible common equity


$

30,055



$

30,128



$

30,102



$

30,224



$

29,622















2016


2016


2015


2015


2015

(Dollars in millions) (unaudited)


Q2


Q1


Q4


Q3


Q2

Tangible Assets (Period End)











Total assets


$

339,117



$

330,346



$

334,048



$

313,700



$

310,510


Goodwill and intangible assets(8)


(15,553)



(15,629)



(15,701)



(15,153)



(15,240)


Tangible assets


$

323,564



$

314,717



$

318,347



$

298,547



$

295,270


Tangible Assets (Average)











Average total assets


$

334,479



$

331,919



$

323,354



$

313,822



$

307,206


Average goodwill and intangible assets(8)


(15,585)



(15,654)



(15,316)



(15,183)



(15,256)


Average tangible assets


$

318,894



$

316,265



$

308,038



$

298,639



$

291,950












Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach











(Dollars in millions) (unaudited)


June 30,
2016


March 31,
2016


December 31,
2015


September 30,
2015


June 30,
2015

Common equity excluding AOCI


$

44,572



$

44,452



$

44,606



$

44,533



$

44,246


Adjustments:











AOCI(10)(11)


332



117



(254)



75



(128)


Goodwill(8)


(14,296)



(14,301)



(14,296)



(13,805)



(13,809)


Intangible assets(8)(11)


(483)



(532)



(393)



(374)



(413)


Other


(639)



(505)



(119)



(320)



(92)


Common equity Tier 1 capital


$

29,486



$

29,231



$

29,544



$

30,109



$

29,804


Risk-weighted assets


$

269,710



$

262,368



$

265,739



$

249,081



$

246,106


Common equity Tier 1 capital ratio(3)


10.9

%


11.1

%


11.1

%


12.1

%


12.1

%

















__________

(1)

Regulatory capital metrics and capital ratios as of June 30, 2016 are preliminary and therefore subject to change.

(2)

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

(3)

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

(4)

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

(5)

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

(6)

Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.

(7)

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

(8)

Includes impact of related deferred taxes.

(9)

Includes related surplus.

(10)

Amounts presented are net of tax.

(11)

Amounts based on transition provisions for regulatory capital deductions and adjustments of 40% for 2015 and 60% for 2016.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/capital-one-reports-second-quarter-2016-net-income-of-942-million-or-169-per-share-300302409.html

SOURCE Capital One Financial Corporation

Copyright 2016 PR Newswire

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