MCLEAN, Va., Jan. 25, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2021 of $2.4 billion, or $5.41 per diluted common share, compared with net income of $3.1 billion, or $6.78 per diluted common share in the third quarter of 2021, and with net income of $2.6 billion, or $5.35 per diluted common share in the fourth quarter of 2020.

Capital One Financial (PRNewsfoto/Capital One Financial Corporation)

"In the fourth quarter, we posted strong growth with strikingly strong credit results, and we continued to return capital to our shareholders," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "As we enter 2022, we continue to see attractive opportunities to grow and build our franchise."

The quarter included the following notable item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact



Legacy rewards program upgrade

$                  (92)

$                (0.16)


All comparisons below are for the fourth quarter of 2021 compared with the third quarter of 2021 unless otherwise noted.

Fourth Quarter 2021 Income Statement Summary:

  • Total net revenue increased 4 percent to $8.1 billion.
  • Total non-interest expense increased 12 percent to $4.7 billion:
    • 33 percent increase in marketing.
    • 7 percent increase in operating expenses.
  • Pre-provision earnings decreased 6 percent to $3.4 billion.(1)
  • Provision for credit losses increased $723 million to $381 million:
    • Net charge-offs of $527 million.
    • $145 million loan reserve release.
  • Net interest margin of 6.60 percent, an increase of 25 basis points.
  • Efficiency ratio of 57.63 percent.
  • Operating efficiency ratio of 45.32 percent.

Fourth Quarter 2021 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 13.1 percent at December 31, 2021.
  • Period-end loans held for investment in the quarter increased $16.0 billion, or 6 percent, to $277.3 billion.
    • Credit Card period-end loans increased $9.7 billion, or 9 percent, to $114.8 billion.
      • Domestic Card period-end loans increased $9.5 billion, or 10 percent, to $108.7 billion.
    • Consumer Banking period-end loans increased $534 million, or 1 percent, to $77.6 billion.
      • Auto period-end loans increased $1.1 billion, or 1 percent, to $75.8 billion.
    • Commercial Banking period-end loans increased $5.7 billion, or 7 percent, to $84.9 billion.
  • Average loans held for investment in the quarter increased $14.1 billion, or 6 percent, to $267.2 billion.
    • Credit Card average loans increased $6.5 billion, or 6 percent, to $108.6 billion.
      • Domestic Card average loans increased $6.4 billion, or 7 percent, to $102.7 billion.
    • Consumer Banking average loans increased $1.4 billion, or 2 percent, to $77.4 billion.
      • Auto average loans increased $2.0 billion, or 3 percent, to $75.3 billion.
    • Commercial Banking average loans increased $6.1 billion, or 8 percent, to $81.1 billion.
  • Period-end total deposits increased $5.0 billion, or 2 percent, to $311.0 billion, while average deposits increased $2.2 billion, or 1 percent, to $307.3 billion.
  • Interest-bearing deposits rate paid decreased 1 basis point to 0.33 percent.

2021 Full Year Income Statement Summary:

  • Total net revenue increased 7% to $30.4 billion.
  • Total non-interest expense increased 10 percent to $16.6 billion:
    • 78 percent increase in marketing.
    • 2 percent increase in operating expenses.
  • Pre-provision earnings increased 3 percent to $13.9 billion(1).
  • Provision for credit losses decreased 119 percent to $1.9 billion:
  • Net interest margin of 6.21 percent, an increase of 15 basis points.
  • Efficiency ratio of 54.44 percent.
    • Efficiency ratio excluding adjusting items of 54.12 percent(2).
  • Operating efficiency ratio of 45.01 percent.
    • Operating efficiency ratio excluding adjusting items of 44.68 percent(2).

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 25, 2022 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). 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 February 8, 2022 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 (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $311.0 billion in deposits and $432.4 billion in total assets as of December 31, 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.

(1)

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.

(2)

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.

 

Exhibit 99.2


Capital One Financial Corporation

Financial Supplement(1)(2)

Fourth 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

6


Table 5:

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

8


Table 6:

Average Balances, Net Interest Income and Net Interest Margin 

9


Table 7:

Loan Information and Performance Statistics

10


Table 8:

Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

12

Business Segment Results



Table 9:

Financial Summary—Business Segment Results 

13


Table 10:

Financial & Statistical Summary—Credit Card Business

14


Table 11:

Financial & Statistical Summary—Consumer Banking Business

16


Table 12:

Financial & Statistical Summary—Commercial Banking Business

17


Table 13:

Financial & Statistical Summary—Other and Total

18

Other



Table 14:

Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)

19


Table 15:

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

20

__________

(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Annual Report on Form 10-K for the period ended December 31, 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 Q4 vs


Year Ended December 31,

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


2021


2021


2021


2021


2020


2021


2020






2021 vs


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Income Statement





















Net interest income


$      6,450


$      6,156


$      5,743


$      5,822


$      5,873


5%


10%


$    24,171


$    22,913


5%

Non-interest income


1,668


1,674


1,631


1,291


1,464



14


6,264


5,610


12

Total net revenue(1)


8,118


7,830


7,374


7,113


7,337


4


11


30,435


28,523


7

Provision (benefit) for credit losses


381


(342)


(1,160)


(823)


264


**


44


(1,944)


10,264


**

Non-interest expense:





















     Marketing


999


751


620


501


563


33


77


2,871


1,610


78

     Operating expense


3,679


3,435


3,346


3,239


3,446


7


7


13,699


13,446


2

Total non-interest expense


4,678


4,186


3,966


3,740


4,009


12


17


16,570


15,056


10

Income from continuing operations before income taxes


3,059


3,986


4,568


4,196


3,064


(23)



15,809


3,203


**

Income tax provision


633


882


1,031


869


496


(28)


28


3,415


486


**

Income from continuing operations, net of tax


2,426


3,104


3,537


3,327


2,568


(22)


(6)


12,394


2,717


**

Income from discontinued operations, net of tax


(1)



(1)


(2)


(2)


**


(50)


(4)


(3)


33

Net income


2,425


3,104


3,536


3,325


2,566


(22)


(5)


12,390


2,714


**

Dividends and undistributed earnings allocated to participating securities(2)


(21)


(26)


(30)


(28)


(19)


(19)


11


(105)


(20)


**

Preferred stock dividends


(74)


(79)


(60)


(61)


(68)


(6)


9


(274)


(280)


(2)

Issuance cost for redeemed preferred stock(3)


(34)


(12)




(17)


183


100


(46)


(39)


18

Net income available to common stockholders


$      2,296


$      2,987


$      3,446


$      3,236


$      2,462


(23)


(7)


$    11,965


$      2,375


**

Common Share Statistics





















Basic earnings per common share:(2)





















     Net income from continuing operations


$       5.43


$       6.81


$       7.65


$       7.06


$       5.36


(20)%


1%


$      27.05


$       5.20


**

     Income (loss) from discontinued operations









(0.01)


(0.01)


     Net income per basic common share


$       5.43


$       6.81


$       7.65


$       7.06


$       5.36


(20)


1


$      27.04


$       5.19


**

Diluted earnings per common share:(2)





















     Net income from continuing operations


$       5.41


$       6.78


$       7.62


$       7.03


$       5.35


(20)%


1%


$      26.95


$       5.19


**

     Income (loss) from discontinued operations









(0.01)


(0.01)


     Net income per diluted common share


$       5.41


$       6.78


$       7.62


$       7.03


$       5.35


(20)


1


$      26.94


$       5.18


**

Weighted-average common shares outstanding (in millions):





















     Basic


422.5


438.8


450.6


458.6


459.1


(4)%


(8)%


442.5


457.8


(3)%

     Diluted


424.3


440.5


452.3


460.1


460.2


(4)


(8)


444.2


458.9


(3)

Common shares outstanding (period-end, in millions)


413.9


430.4


446.1


456.8


459.0


(4)


(10)


413.9


459.0


(10)

Dividends declared and paid per common share


$       0.60


$       1.20


$       0.40


$       0.40


$       0.10


(50)


**


$       2.60


$       1.00


160

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


99.74


99.60


97.20


90.96


88.34



13


99.74


88.34


13














2021 Q4 vs


Year Ended December 31,

(Dollars in millions)


2021


2021


2021


2021


2020


2021


2020






2021 vs


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Balance Sheet (Period-End)





















Loans held for investment


$  277,340


$  261,390


$  249,597


$  243,131


$  251,624


6%


10%


$  277,340


$  251,624


10%

Interest-earning assets


397,341


387,208


387,295


392,485


388,917


3


2


397,341


388,917


2

Total assets


432,381


425,377


423,420


425,175


421,602


2


3


432,381


421,602


3

Interest-bearing deposits


272,937


269,134


271,314


276,325


274,300


1



272,937


274,300


Total deposits


310,980


305,938


306,308


310,328


305,442


2


2


310,980


305,442


2

Borrowings


43,086


37,501


36,343


38,450


40,539


15


6


43,086


40,539


6

Common equity


56,184


57,632


58,136


56,341


55,356


(3)


1


56,184


55,356


1

Total stockholders' equity


61,029


63,544


64,624


61,188


60,204


(4)


1


61,029


60,204


1

Balance Sheet (Average Balances)





















Loans held for investment


$  267,159


$  253,101


$  246,463


$  243,937


$  247,689


6%


8%


$  252,730


$  253,335


Interest-earning assets


390,868


387,766


390,129


388,572


388,252


1


1


389,336


378,362


3%

Total assets


427,845


424,506


424,099


421,808


420,011


1


2


424,521


411,187


3

Interest-bearing deposits


269,951


269,278


273,476


273,358


274,142



(2)


271,500


263,279


3

Total deposits


307,272


305,035


308,217


305,056


304,513


1


1


306,397


290,835


5

Borrowings


39,943


37,464


37,054


39,911


40,662


7


(2)


38,590


46,588


(17)

Common equity


56,946


58,230


56,885


55,775


54,220


(2)


5


56,966


52,954


8

Total stockholders' equity


62,498


64,682


62,376


60,623


59,389


(3)


5


62,556


58,201


7

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated














2021
Q4 vs


Year Ended
December 31,

(Dollars in millions, except as noted)


2021


2021


2021


2021


2020


2021


2020






2021 vs


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Performance Metrics





















Net interest income growth (period over period)


5%


7%


(1)%


(1)%


6%


**


**


5%


(2)%


**

Non-interest income growth (period over period)



3


26


(12)


(20)


**


**


12


7


**

Total net revenue growth (period over period)


4


6


4


(3)


(1)


**


**


7



**

Total net revenue margin(5)


8.31


8.08


7.56


7.32


7.56


       23 bps


       75 bps


7.82


7.54


       28 bps

Net interest margin(6)


6.60


6.35


5.89


5.99


6.05


25


55


6.21


6.06


15

Return on average assets


2.27


2.92


3.34


3.16


2.45


(65)


(18)


2.92


0.66


226

Return on average tangible assets(7)


2.35


3.03


3.46


3.27


2.54


(68)


(19)


3.03


0.69


234

Return on average common equity(8)


16.13


20.52


24.24


23.22


18.18


(4)%


(205)


21.01


4.49


17%

Return on average tangible common equity(9)


21.82


27.50


32.75


31.61


25.02


(6)


(320)


28.39


6.24


22

Non-interest expense as a percentage

of average loans held for investment


7.00


6.62


6.44


6.13


6.47


       38 bps


53


6.56


5.94


       62 bps

Efficiency ratio(10)


57.63


53.46


53.78


52.58


54.64


4%


299


54.44


52.79


165

Operating efficiency ratio(11)


45.32


43.87


45.38


45.54


46.97


     145 bps


(165)


45.01


47.14


(213)

Effective income tax rate for continuing

operations


20.7


22.1


22.6


20.7


16.2


(140)


5%


21.6


15.2


6%

Employees (period-end, in thousands)


50.8


50.8


52.0


51.7


52.0



(2)


50.8


52.0


(2)

Credit Quality Metrics





















Allowance for credit losses


$  11,430


$   11,573


$   12,346


$   14,017


$   15,564


(1)%


(27)%


$  11,430


$   15,564


(27)%

Allowance coverage ratio


4.12%


4.43%


4.95%


5.77%


6.19%


     (31) bps


    (207) bps


4.12%


6.19%


    (207) bps

Net charge-offs


$       527


$        426


$        541


$        740


$        856


24%


(38)%


$     2,234


$     5,225


(57)%

Net charge-off rate(12)


0.79%


0.67%


0.88%


1.21%


1.38%


       12 bps


     (59) bps


0.88%


2.06%


    (118) bps

30+ day performing delinquency rate


2.25


1.97


1.75


1.82


2.41


28


(16)


2.25


2.41


(16)

30+ day delinquency rate


2.41


2.13


1.89


1.98


2.61


28


(20)


2.41


2.61


(20)

Capital Ratios(13)





















Common equity Tier 1 capital


13.1%


13.8%


14.5%


14.6%


13.7%


     (70) bps


     (60) bps


13.1%


13.7%


     (60) bps

Tier 1 capital


14.5


15.7


16.6


16.2


15.3


(120)


(80)


14.5


15.3


(80)

Total capital


16.9


18.2


18.8


18.6


17.7


(130)


(80)


16.9


17.7


(80)

Tier 1 leverage


11.6


12.2


12.4


11.7


11.2


(60)


40


11.6


11.2


40

Tangible common equity ("TCE")(14)


9.9


10.4


10.6


10.1


10.0


(50)


(10)


9.9


10.0


(10)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income














2021 Q4 vs


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020






2021 vs

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


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Interest income:





















     Loans, including loans held for sale


$      6,451


$      6,205


$      5,753


$      5,854


$      5,954


4%


8%


$   24,263


$   24,074


1%

     Investment securities


368


317


370


391


422


16


(13)


1,446


1,877


(23)

     Other


12


16


16


16


15


(25)


(20)


60


82


(27)

Total interest income


6,831


6,538


6,139


6,261


6,391


4


7


25,769


26,033


(1)

Interest expense:





















     Deposits


222


228


237


269


347


(3)


(36)


956


2,165


(56)

     Securitized debt obligations


30


29


28


32


34


3


(12)


119


232


(49)

     Senior and subordinated notes


121


116


122


129


128


4


(5)


488


679


(28)

     Other borrowings


8


9


9


9


9


(11)


(11)


35


44


(20)

Total interest expense


381


382


396


439


518



(26)


1,598


3,120


(49)

Net interest income


6,450


6,156


5,743


5,822


5,873


5


10


24,171


22,913


5

     Provision (benefit) for credit losses


381


(342)


(1,160)


(823)


264


**


44


(1,944)


10,264


**

Net interest income after provision for credit losses


6,069


6,498


6,903


6,645


5,609


(7)


8


26,115


12,649


106

Non-interest income:





















     Interchange fees, net


1,005


1,022


1,016


817


818


(2)


23


3,860


3,017


28

     Service charges and other customer-related fees


435


407


384


352


338


7


29


1,578


1,243


27

     Net securities gains


(4)


2



4



**


**


2


25


(92)

     Other


232


243


231


118


308


(5)


(25)


824


1,325


(38)

Total non-interest income


1,668


1,674


1,631


1,291


1,464



14


6,264


5,610


12

Non-interest expense:





















     Salaries and associate benefits


1,941


1,852


1,781


1,847


1,755


5


11


7,421


6,805


9

     Occupancy and equipment


527


481


523


472


572


10


(8)


2,003


2,118


(5)

     Marketing


999


751


620


501


563


33


77


2,871


1,610


78

     Professional services


449


358


341


292


394


25


14


1,440


1,312


10

     Communications and data processing


326


319


315


302


295


2


11


1,262


1,215


4

     Amortization of intangibles


13


5


5


6


8


160


63


29


60


(52)

     Other


423


420


381


320


422


1



1,544


1,936


(20)

Total non-interest expense


4,678


4,186


3,966


3,740


4,009


12


17


16,570


15,056


10

Income from continuing operations before income taxes


3,059


3,986


4,568


4,196


3,064


(23)



15,809


3,203


**

Income tax provision


633


882


1,031


869


496


(28)


28


3,415


486


**

Income from continuing operations, net of tax


2,426


3,104


3,537


3,327


2,568


(22)


(6)


12,394


2,717


**

Income (loss) from discontinued operations, net of tax


(1)



(1)


(2)


(2)


**


(50)


(4)


(3)


33

Net income


2,425


3,104


3,536


3,325


2,566


(22)


(5)


12,390


2,714


**

Dividends and undistributed earnings allocated to participating securities(2)


(21)


(26)


(30)


(28)


(19)


(19)


11


(105)


(20)


425

Preferred stock dividends


(74)


(79)


(60)


(61)


(68)


(6)


9


(274)


(280)


(2)

Issuance cost for redeemed preferred stock(3)


(34)


(12)




(17)


183


100


(46)


(39)


18

Net income (loss) available to common stockholders


$      2,296


$      2,987


$      3,446


$      3,236


$      2,462


(23)


(7)


$   11,965


$     2,375


404























































2021 Q4 vs


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020






2021 vs

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


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Basic earnings per common share:(2)





















Net income from continuing operations


$        5.43


$        6.81


$        7.65


$        7.06


$        5.36


(20)%


1%


$    27.05


$       5.20


**

Income (loss) from discontinued operations









(0.01)


(0.01)


Net income per basic common share


$        5.43


$        6.81


$        7.65


$        7.06


$        5.36


(20)


1


$    27.04


$       5.19


**

Diluted earnings per common share:(2)





















Net income from continuing operations


$        5.41


$        6.78


$        7.62


$        7.03


$        5.35


(20)


1


$    26.95


$       5.19


**

Income (loss) from discontinued operations









(0.01)


(0.01)


Net income per diluted common share


$        5.41


$        6.78


$        7.62


$        7.03


$        5.35


(20)


1


$    26.94


$       5.18


**

Weighted-average common shares outstanding (in millions):





















Basic common shares


422.5


438.8


450.6


458.6


459.1


(4)


(8)


442.5


457.8


(3)

Diluted common shares


424.3


440.5


452.3


460.1


460.2


(4)


(8)


444.2


458.9


(3)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets














2021 Q4 vs



2021


2021


2021


2021


2020


2021


2020

(Dollars in millions)


Q4


Q3


Q2


Q1


Q4


Q3


Q4

Assets:















Cash and cash equivalents:















     Cash and due from banks


$     4,164


$     5,444


$     5,312


$     4,670


$     4,708


(24)%


(12)%

     Interest-bearing deposits and other short-term investments


17,582


21,180


29,534


45,825


35,801


(17)


(51)

Total cash and cash equivalents


21,746


26,624


34,846


50,495


40,509


(18)


(46)

Restricted cash for securitization investors


308


234


242


1,779


262


32


18

Securities available for sale


95,261


98,149


101,766


99,165


100,445


(3)


(5)

Loans held for investment:















     Unsecuritized loans held for investment


252,468


238,475


226,130


219,182


225,698


6


12

     Loans held in consolidated trusts


24,872


22,915


23,467


23,949


25,926


9


(4)

Total loans held for investment


277,340


261,390


249,597


243,131


251,624


6


10

     Allowance for credit losses


(11,430)


(11,573)


(12,346)


(14,017)


(15,564)


(1)


(27)

Net loans held for investment


265,910


249,817


237,251


229,114


236,060


6


13

Loans held for sale


5,888


6,300


6,522


2,896


2,710


(7)


117

Premises and equipment, net


4,210


4,204


4,227


4,277


4,287



(2)

Interest receivable


1,460


1,418


1,372


1,380


1,471


3


(1)

Goodwill


14,782


14,652


14,654


14,654


14,653


1


1

Other assets


22,816


23,979


22,540


21,415


21,205


(5)


8

Total assets


$ 432,381


$ 425,377


$ 423,420


$ 425,175


$ 421,602


2


3




























2021 Q4 vs



2021


2021


2021


2021


2020


2021


2020

(Dollars in millions)


Q4


Q3


Q2


Q1


Q4


Q3


Q4

Liabilities:















Interest payable


$        281


$        241


$        301


$        288


$        352


17%


(20)%

Deposits:















     Non-interest-bearing deposits


38,043


36,804


34,994


34,003


31,142


3


22

     Interest-bearing deposits


272,937


269,134


271,314


276,325


274,300


1


Total deposits


310,980


305,938


306,308


310,328


305,442


2


2

Securitized debt obligations


14,994


12,635


10,561


12,071


12,414


19


21

Other debt:















     Federal funds purchased and securities 

     loaned or sold under agreements to repurchase


820


825


845


842


668


(1)


23

     Senior and subordinated notes


27,219


23,983


24,878


25,467


27,382


13


(1)

     Other borrowings


53


58


59


70


75


(9)


(29)

Total other debt


28,092


24,866


25,782


26,379


28,125


13


Other liabilities


17,005


18,153


15,844


14,921


15,065


(6)


13

Total liabilities


371,352


361,833


358,796


363,987


361,398


3


3
















Stockholders' equity:















Preferred stock


0


0


0


0


0



Common stock


7


7


7


7


7



Additional paid-in capital, net


34,112


35,051


35,472


33,671


33,480


(3)


2

Retained earnings


51,006


48,944


46,461


43,167


40,088


4


27

Accumulated other comprehensive income


374


1,360


1,792


1,783


3,494


(73)


(89)

Treasury stock, at cost


(24,470)


(21,818)


(19,108)


(17,440)


(16,865)


12


45

Total stockholders' equity


61,029


63,544


64,624


61,188


60,204


(4)


1

Total liabilities and stockholders' equity


$ 432,381


$ 425,377


$ 423,420


$ 425,175


$ 421,602


2


3

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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


(1)

Total net revenue was reduced by $151 million in Q4 2021, $123 million in Q3 2021, $175 million in Q2 2021, $180 million in Q1 2021 and $177 million in Q4 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 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. 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 September 1, 2021, we redeemed all outstanding shares of our fixed-to-floating rate non-cumulative perpetual preferred stock Series E, which reduced our net income available to common shareholders by $12 million in Q3 2021. On December 1, 2021, we redeemed all outstanding shares of our fixed rate 5.20% non-cumulative perpetual preferred stock Series G, and our fixed rate 6.00% non-cumulative perpetual preferred stock Series H, which together reduced our net income available to common shareholders by $34 million in Q4 2021.

(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 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 net income (loss) available to common stockholders less 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 net income (loss) available to common stockholders less 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)

Capital ratios as of the end of Q4 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.

(14)

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

**

Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




2021 Q4


2021 Q3


2020 Q4

(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


$   272,805


$      6,451


9.46%


$   260,235


$      6,205


9.54%


$   251,135


$      5,954


9.48%

     Investment securities


96,421


368


1.53


98,802


317


1.28


97,640


422


1.73

     Cash equivalents and other


21,642


12


0.22


28,729


16


0.22


39,477


15


0.15

Total interest-earning assets


$   390,868


$      6,831


6.99


$   387,766


$      6,538


6.74


$   388,252


$      6,391


6.58

Interest-bearing liabilities:



















     Interest-bearing deposits


$   269,951


$         222


0.33


$   269,278


$         228


0.34


$   274,143


$         347


0.51

     Securitized debt obligations


13,775


30


0.87


12,420


29


0.93


12,651


34


1.08

     Senior and subordinated notes


25,454


121


1.90


24,241


116


1.91


27,386


128


1.87

     Other borrowings and liabilities


2,279


8


1.50


2,357


9


1.49


2,095


9


1.75

Total interest-bearing liabilities


$   311,459


$         381


0.49


$   308,296


$         382


0.49


$   316,275


$         518


0.65

Net interest income/spread




$      6,450


6.50




$      6,156


6.25




$      5,873


5.93

Impact of non-interest-bearing funding






0.10






0.10






0.12

Net interest margin






6.60%






6.35%






6.05%




Year Ended December 31,



2021


2020

(Dollars in millions, except as noted)


Average Balance


Interest Income/ Expense


Yield/Rate


Average Balance


Interest Income/ Expense


Yield/Rate

Interest-earning assets:













     Loans, including loans held for sale


$   257,328


$     24,263


9.43%


$   254,901


$     24,074


9.44%

     Investment securities


98,394


1,446


1.47


87,222


1,877


2.15

     Cash equivalents and other


33,614


60


0.18


36,239


82


0.23

Total interest-earning assets


$   389,336


$     25,769


6.62


$   378,362


$     26,033


6.88

Interest-bearing liabilities:













     Interest-bearing deposits


$   271,500


$         956


0.35


$   263,279


$      2,165


0.82

     Securitized debt obligations


12,336


119


0.96


15,533


232


1.49

     Senior and subordinated notes


25,530


488


1.91


29,621


679


2.29

     Other borrowings and liabilities


2,261


35


1.57


2,882


44


1.55

Total interest-bearing liabilities


$   311,627


$      1,598


0.51


$   311,315


$      3,120


1.00

Net interest income/spread




$     24,171


6.11




$     22,913


5.88

Impact of non-interest-bearing funding






0.10






0.18

Net interest margin






6.21%






6.06%

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics


































2021 Q4 vs.


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020






2021 vs.

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Loans Held for Investment (Period-End)





















Credit card:





















   Domestic credit card(1)


$   108,723


$     99,258


$     95,309


$     91,099


$     98,504


10%


10%


$ 108,723


$   98,504


10%

   International card businesses(2)


6,049


5,772


5,708


8,028


8,452


5


(28)


6,049


8,452


(28)

Total credit card


114,772


105,030


101,017


99,127


106,956


9


7


114,772


106,956


7

Consumer banking:





















   Auto


75,779


74,716


71,713


67,059


65,762


1


15


75,779


65,762


15

   Retail banking


1,867


2,396


3,046


3,143


3,126


(22)


(40)


1,867


3,126


(40)

Total consumer banking


77,646


77,112


74,759


70,202


68,888


1


13


77,646


68,888


13

Commercial banking:





















   Commercial and multifamily real estate


35,262


33,096


29,616


30,008


30,681


7


15


35,262


30,681


15

   Commercial and industrial


49,660


46,152


44,205


43,794


45,099


8


10


49,660


45,099


10

Total commercial banking


84,922


79,248


73,821


73,802


75,780


7


12


84,922


75,780


12

Total loans held for investment


$   277,340


$   261,390


$   249,597


$   243,131


$   251,624


6


10


$ 277,340


$ 251,624


10

Loans Held for Investment (Average)





















Credit card:





















   Domestic credit card


$   102,717


$     96,309


$     91,535


$     92,594


$     95,453


7%


8%


$   95,818


$ 101,837


(6)%

   International card businesses


5,871


5,737


8,139


7,940


8,108


2


(28)


6,913


8,245


(16)

Total credit card


108,588


102,046


99,674


100,534


103,561


6


5


102,731


110,082


(7)

Consumer banking:





















   Auto


75,284


73,296


69,543


66,185


65,590


3


15


71,108


63,227


12

   Retail banking


2,160


2,700


3,162


3,049


3,218


(20)


(33)


2,765


3,072


(10)

Total consumer banking


77,444


75,996


72,705


69,234


68,808


2


13


73,873


66,299


11

Commercial banking:





















   Commercial and multifamily real estate


33,591


30,314


30,124


29,856


30,825


11


9


30,980


31,135


   Commercial and industrial


47,536


44,745


43,960


44,313


44,495


6


7


45,146


45,819


(1)

Total commercial banking


81,127


75,059


74,084


74,169


75,320


8


8


76,126


76,954


(1)

Total average loans held for investment


$   267,159


$   253,101


$   246,463


$   243,937


$   247,689


6


8


$ 252,730


$ 253,335



































2021 Q4 vs


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020


2021


2020


2021 vs.
2020



Q4


Q3


Q2


Q1


Q4


Q3


Q4

Net Charge-Off (Recovery) Rates





















Credit card:





















   Domestic credit card


1.49%


1.36%


2.28%


2.54%


2.69%


        13 bps


     (120) bps


1.90%


3.93%


   (203) bps

   International card businesses


0.14


2.72


2.41


2.30


1.86


(258)


(172)


1.96


3.26


(130)

Total credit card


1.42


1.43


2.29


2.52


2.63


(1)


(121)


1.90


3.88


(198)

Consumer banking:





















   Auto


0.58


0.18


(0.12)


0.47


0.47


40


11


0.28


0.83


(55)

   Retail banking


6.69


2.45


1.41


1.68


1.88


4%


5%


2.77


1.82


95

Total consumer banking


0.75


0.27


(0.06)


0.52


0.53


        48 bps


        22 bps


0.37


0.87


(50)

Commercial banking:





















   Commercial and multifamily real estate



0.01


0.04


0.06


0.02


(1)


(2)


0.03


0.13


(10)

   Commercial and industrial


(0.03)


0.07


(0.21)


0.11


0.74


(10)


(77)


(0.01)


0.73


(74)

Total commercial banking


(0.02)


0.05


(0.11)


0.09


0.45


(7)


(47)



0.49


(49)

Total net charge-offs


0.79


0.67


0.88


1.21


1.38


12


(59)


0.88


2.06


(118)

30+ Day Performing Delinquency Rates





















Credit card:





















   Domestic credit card


2.22%


1.93%


1.68%


2.24%


2.42%


        29 bps


       (20) bps


2.22%


2.42%


     (20) bps

   International card businesses


3.42


3.27


2.89


2.51


2.61


15


81


3.42


2.61


81

Total credit card


2.28


2.00


1.75


2.26


2.44


28


(16)


2.28


2.44


(16)

Consumer banking:





















   Auto


4.32


3.65


3.26


3.12


4.78


67


(46)


4.32


4.78


(46)

   Retail banking


1.92


1.15


0.79


1.02


1.32


77


60


1.92


1.32


60

Total consumer banking


4.26


3.58


3.16


3.03


4.62


68


(36)


4.26


4.62


(36)

Nonperforming Loans and Nonperforming Assets Rates(3)(4)





















Credit card:





















   International card businesses


0.16%


0.16%


0.20%


0.17%


0.24%



        (8) bps


0.16%


0.24%


       (8) bps

Total credit card


0.01


0.01


0.01


0.01


0.02



(1)


0.01


0.02


(1)

Consumer banking:





















   Auto


0.45


0.36


0.29


0.29


0.45


          9 bps



0.45


0.45


   Retail banking


2.51


2.20


1.75


1.16


0.96


31


155


2.51


0.96


155

Total consumer banking


0.50


0.42


0.35


0.33


0.47


8


3


0.50


0.47


3

Commercial banking:





















   Commercial and multifamily real estate


1.09


0.87


1.02


0.78


0.65


22


44


1.09


0.65


44

   Commercial and industrial


0.64


0.68


1.03


1.02


1.00


(4)


(36)


0.64


1.00


(36)

Total commercial banking


0.82


0.76


1.03


0.92


0.86


6


(4)


0.82


0.86


(4)

Total nonperforming loans


0.40


0.35


0.41


0.38


0.40


5



0.40


0.40


Total nonperforming assets


0.41


0.37


0.43


0.40


0.41


4



0.41


0.41


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




Three Months Ended December 31, 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 September 30, 2021


$         7,968


$             338


$         8,306


$         1,988


$             73


$         2,061


$         1,206


$       11,573

     Charge-offs


(702)


(84)


(786)


(305)


(40)


(345)


(1)


(1,132)

     Recoveries


318


82


400


195


5


200


5


605

Net charge-offs


(384)


(2)


(386)


(110)


(35)


(145)


4


(527)

Provision (benefit) for credit losses


384


39


423


(26)


28


2


(43)


382

Allowance build (release) for credit losses



37


37


(136)


(7)


(143)


(39)


(145)

Other changes(5)



2


2






2

Balance as of December 31, 2021


7,968


377


8,345


1,852


66


1,918


1,167


11,430

Reserve for unfunded lending commitments:

















Balance as of September 30, 2021








166


166

Provision (benefit) for losses on unfunded lending commitments








(1)


(1)

Balance as of December 31, 2021








165


165

Combined allowance and reserve as of December 31, 2021


$         7,968


$             377


$         8,345


$         1,852


$             66


$         1,918


$         1,332


$       11,595




Year Ended December 31, 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


(3,138)


(343)


(3,481)


(1,118)


(93)


(1,211)


(48)


(4,740)

     Recoveries


1,318


207


1,525


918


17


935


46


2,506

Net charge-offs


(1,820)


(136)


(1,956)


(200)


(76)


(276)


(2)


(2,234)

Provision (benefit) for credit losses


(868)


(34)


(902)


(563)


42


(521)


(489)


(1,912)

Allowance build (release) for credit losses


(2,688)


(170)


(2,858)


(763)


(34)


(797)


(491)


(4,146)

Other changes(5)


6


6


12






12

Balance as of December 31, 2021


7,968


377


8,345


1,852


66


1,918


1,167


11,430

Reserve for unfunded lending commitments:

















Balance as of December 31, 2020








195


195

Provision (benefit) for losses on unfunded lending commitments








(30)


(30)

Balance as of December 31, 2021








165


165

Combined allowance and reserve as of December 31, 2021


$         7,968


$             377


$         8,345


$         1,852


$             66


$         1,918


$         1,332


$       11,595

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results




Three Months Ended December 31, 2021


Year Ended December 31, 2021

(Dollars in millions)


Credit Card


Consumer Banking


Commercial Banking(6)


Other(6)


Total


Credit Card


Consumer Banking


Commercial Banking(6)


Other(6)


Total

Net interest income (loss)


$        3,865


$       2,158


$             595


$      (168)


$      6,450


$       14,074


$       8,448


$          2,153


$      (504)


$    24,171

Non-interest income (loss)


1,261


142


345


(80)


1,668


4,806


554


1,148


(244)


6,264

Total net revenue (loss)


5,126


2,300


940


(248)


8,118


18,880


9,002


3,301


(748)


30,435

Provision (benefit) for credit losses


423


2


(44)



381


(902)


(521)


(519)


(2)


(1,944)

Non-interest expense


2,799


1,285


520


74


4,678


9,621


4,711


1,815


423


16,570

Income (loss) from continuing operations before income taxes


1,904


1,013


464


(322)


3,059


10,161


4,812


2,005


(1,169)


15,809

Income tax provision (benefit)


451


239


109


(166)


633


2,403


1,136


473


(597)


3,415

Income (loss) from continuing operations, net of tax


$        1,453


$          774


$             355


$      (156)


$      2,426


$        7,758


$       3,676


$          1,532


$      (572)


$    12,394
























Three Months Ended September 30, 2021











(Dollars in millions)


Credit Card


Consumer Banking


Commercial Banking(6)


Other(6)


Total











Net interest income (loss)


$        3,620


$       2,159


$             578


$      (201)


$      6,156











Non-interest income (loss)


1,263


127


306


(22)


1,674











Total net revenue (loss)


4,883


2,286


884


(223)


7,830











Provision (benefit) for credit losses


(198)


(91)


(53)



(342)











Non-interest expense


2,424


1,186


459


117


4,186











Income (loss) from continuing operations before income taxes


2,657


1,191


478


(340)


3,986











Income tax provision (benefit)


627


282


113


(140)


882











Income (loss) from continuing operations, net of tax


$        2,030


$          909


$             365


$      (200)


$      3,104


































Three Months Ended December 31, 2020


Year Ended December 31, 2020

(Dollars in millions)


Credit Card


Consumer Banking


Commercial Banking(6)


Other(6)


Total


Credit Card


Consumer Banking


Commercial Banking(6)


Other(6)


Total

Net interest income (loss)


$        3,413


$       2,012


$             522


$        (74)


$      5,873


$       13,776


$       7,238


$          2,048


$      (149)


$    22,913

Non-interest income


1,054


136


268


6


1,464


3,823


466


923


398


5,610

Total net revenue (loss)


4,467


2,148


790


(68)


7,337


17,599


7,704


2,971


249


28,523

Provision (benefit) for credit losses


231


60


(28)


1


264


7,327


1,753


1,181


3


10,264

Non-interest expense


2,311


1,121


445


132


4,009


8,491


4,159


1,706


700


15,056

Income (loss) from continuing operations before income taxes


1,925


967


373


(201)


3,064


1,781


1,792


84


(454)


3,203

Income tax provision (benefit)


454


230


88


(276)


496


420


425


19


(378)


486

Income (loss) from continuing operations, net of tax


$        1,471


$          737


$             285


$         75


$      2,568


$        1,361


$       1,367


$               65


$        (76)


$      2,717

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business














2021 Q4 vs


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020






2021 vs

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Credit Card





















Earnings:





















     Net interest income


$    3,865


$   3,620


$   3,217


$   3,372


$   3,413


7%


13%


$  14,074


$  13,776


2%

     Non-interest income


1,261


1,263


1,253


1,029


1,054



20


4,806


3,823


26

     Total net revenue


5,126


4,883


4,470


4,401


4,467


5


15


18,880


17,599


7

     Provision (benefit) for credit losses


423


(198)


(635)


(492)


231


**


83


(902)


7,327


**

     Non-interest expense


2,799


2,424


2,263


2,135


2,311


15


21


9,621


8,491


13

     Income from continuing operations before income taxes


1,904


2,657


2,842


2,758


1,925


(28)


(1)


10,161


1,781


**

     Income tax provision


451


627


672


653


454


(28)


(1)


2,403


420


**

     Income from continuing operations, net of tax


$    1,453


$   2,030


$   2,170


$   2,105


$   1,471


(28)


(1)


$    7,758


$   1,361


**

Selected performance metrics:





















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


$ 114,772


$  105,030


$  101,017


$  99,127


$  106,956


9


7


$ 114,772


$  106,956


7

     Average loans held for investment


108,588


102,046


99,674


100,534


103,561


6


5


102,731


110,082


(7)

Average yield on loans outstanding(7)


14.94%


14.88%


14.04%


14.49%


14.24%


          6 bps


        70 bps


14.60%


14.08%


        52 bps

Total net revenue margin(8)


18.11


18.33


17.59


17.17


16.92


(22)


119


17.81


15.91


190

     Net charge-off rate


1.42


1.43


2.29


2.52


2.63


(1)


(121)


1.90


3.88


(198)

     30+ day performing delinquency rate


2.28


2.00


1.75


2.26


2.44


28


(16)


2.28


2.44


(16)

     30+ day delinquency rate


2.29


2.00


1.75


2.27


2.45


29


(16)


2.29


2.45


(16)

Nonperforming loan rate(3)


0.01


0.01


0.01


0.01


0.02



(1)


0.01


0.02


(1)

Purchase volume(9)


$ 149,982


$  136,614


$  132,676


$  108,333


$  117,141


10%


28%


$ 527,605


$  414,312


27%













2021 Q4 vs


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020






2021 vs

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Domestic Card





















Earnings:





















     Net interest income


$    3,558


$   3,319


$   2,944


$   3,095


$   3,129


7%


14%


$  12,916


$  12,599


3%

     Non-interest income


1,190


1,200


1,183


959


994


(1)


20


4,532


3,583


26

     Total net revenue


4,748


4,519


4,127


4,054


4,123


5


15


17,448


16,182


8

     Provision (benefit) for credit losses


384


(200)


(561)


(491)


231


**


66


(868)


6,979


**

     Non-interest expense


2,564


2,191


2,034


1,923


2,063


17


24


8,712


7,625


14

     Income from continuing operations before income taxes


1,800


2,528


2,654


2,622


1,829


(29)


(2)


9,604


1,578


**

     Income tax provision


424


597


626


619


433


(29)


(2)


2,266


374


**

     Income from continuing operations, net of tax


$    1,376


$   1,931


$   2,028


$   2,003


$   1,396


(29)


(1)


$    7,338


$   1,204


**

Selected performance metrics:





















Period-end loans held for investment(1)


$ 108,723


$  99,258


$  95,309


$  91,099


$  98,504


10


10


$ 108,723


$  98,504


10

     Average loans held for investment


102,717


96,309


91,535


92,594


95,453


7


8


95,818


101,837


(6)

Average yield on loans outstanding(7)


14.86%


14.80%


13.91%


14.34%


14.07%


          6 bps


        79 bps


14.49%


13.88%


        61 bps

Total net revenue margin(8)


18.14


18.40


17.66


17.15


16.91


(26)


123


17.85


15.80


205

     Net charge-off rate


1.49


1.36


2.28


2.54


2.69


13


(120)


1.90


3.93


(203)

     30+ day performing delinquency rate


2.22


1.93


1.68


2.24


2.42


29


(20)


2.22


2.42


(20)

Purchase volume(9)


$ 138,825


$  126,057


$  122,456


$  99,960


$  107,572


10%


29%


$ 487,297


$  380,787


28%

Refreshed FICO scores:(10)





















     Greater than 660


71%


71%


72%


70%


69%



2


71%


69%


2

     660 or below


29


29


28


30


31



(2)


29


31


(2)

Total


100%


100%


100%


100%


100%






100%


100%



 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business 














2021 Q4 vs


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020






2021 vs

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Consumer Banking





















Earnings:





















     Net interest income


$  2,158


$   2,159


$   2,101


$   2,030


$   2,012



7%


$  8,448


$   7,238


17%

     Non-interest income


142


127


144


141


136


12%


4


554


466


19

     Total net revenue


2,300


2,286


2,245


2,171


2,148


1


7


9,002


7,704


17

     Provision (benefit) for credit losses


2


(91)


(306)


(126)


60


**


(97)


(521)


1,753


**

     Non-interest expense


1,285


1,186


1,123


1,117


1,121


8


15


4,711


4,159


13

     Income from continuing operations before income taxes


1,013


1,191


1,428


1,180


967


(15)


5


4,812


1,792


169

     Income tax provision


239


282


337


278


230


(15)


4


1,136


425


167

     Income from continuing operations, net of tax


$     774


$      909


$   1,091


$      902


$      737


(15)


5


$  3,676


$   1,367


169

Selected performance metrics:





















     Period-end loans held for investment


$ 77,646


$ 77,112


$ 74,759


$ 70,202


$ 68,888


1


13


$ 77,646


$ 68,888


13

     Average loans held for investment


77,444


75,996


72,705


69,234


68,808


2


13


73,873


66,299


11

Average yield on loans held for investment(7)


7.55%


7.78%


7.99%


8.16%


8.28%


      (23) bps


      (73) bps


7.86%


8.37%


      (51) bps

     Auto loan originations


$  9,721


$ 11,570


$ 12,959


$   8,833


$   7,371


(16)%


32%


$ 43,083


$ 32,282


33%

     Period-end deposits


256,407


252,387


251,155


254,001


249,815


2


3


256,407


249,815


3

     Average deposits


253,372


251,307


252,488


249,499


249,419


1


2


251,676


236,369


6

     Average deposits interest rate


0.30%


0.30%


0.31%


0.36%


0.47%



      (17) bps


0.32%


0.76%


      (44) bps

     Net charge-off (recovery) rate


0.75


0.27


(0.06)


0.52


0.53


        48 bps


22


0.37


0.87


(50)

     30+ day performing delinquency rate


4.26


3.58


3.16


3.03


4.62


68


(36)


4.26


4.62


(36)

     30+ day delinquency rate


4.66


3.88


3.40


3.25


5.00


78


(34)


4.66


5.00


(34)

Nonperforming loan rate(3)


0.50


0.42


0.35


0.33


0.47


8


3


0.50


0.47


3

Nonperforming asset rate(4)


0.56


0.47


0.40


0.39


0.54


9


2


0.56


0.54


2

Auto—At origination FICO scores:(11)





















     Greater than 660


50%


49%


48%


47%


46%


1%


4%


50%


46%


4%

     621 - 660


20


20


20


20


20




20


20


     620 or below


30


31


32


33


34


(1)


(4)


30


34


(4)

Total


100%


100%


100%


100%


100%






100%


100%
























 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business














2021 Q4 vs


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020






2021 vs

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Commercial Banking





















Earnings:





















     Net interest income


$     595


$      578


$      460


$      520


$      522


3%


14%


$  2,153


$   2,048


5

     Non-interest income


345


306


257


240


268


13


29


1,148


923


24

Total net revenue(6)


940


884


717


760


790


6


19


3,301


2,971


11

     Provision (benefit) for credit losses


(44)


(53)


(219)


(203)


(28)


(17)


57


(519)


1,181


**

     Non-interest expense


520


459


417


419


445


13


17


1,815


1,706


6

     Income from continuing operations before income taxes


464


478


519


544


373


(3)


24


2,005


84


**

     Income tax provision


109


113


123


128


88


(4)


24


473


19


**

     Income from continuing operations, net of tax


$     355


$      365


$      396


$      416


$      285


(3)


25


$  1,532


$       65


**

Selected performance metrics:





















     Period-end loans held for investment


$ 84,922


$  79,248


$  73,821


$  73,802


$  75,780


7


12


$ 84,922


$ 75,780


12

     Average loans held for investment


81,127


75,059


74,084


74,169


75,320


8


8


76,126


76,954


(1)

Average yield on loans held for investment(6)(7)


2.71%


2.77%


2.72%


2.76%


2.83%


    (6) bps


      (12) bps


2.74%


3.13%


       (39) bps

     Period-end deposits


$ 44,809


$  43,347


$  42,973


$  41,552


$  39,590


3%


13%


$ 44,809


$ 39,590


13%

     Average deposits


44,206


42,729


42,311


40,107


38,676


3


14


42,350


35,468


19

     Average deposits interest rate


0.12%


0.15%


0.14%


0.18%


0.23%


    (3) bps


       (11) bps


0.14%


0.40%


       (26) bps

     Net charge-off (recovery) rate


(0.02)


0.05


(0.11)


0.09


0.45


**


**



0.49


**

Nonperforming loan rate(3)


0.82


0.76


1.03


0.92


0.86


6


(4)


0.82


0.86


(4)

Nonperforming asset rate(4)


0.82


0.76


1.03


0.92


0.86


6


(4)


0.82


0.86


(4)

Risk category:(12)





















     Noncriticized


$ 79,014


$  73,218


$  67,481


$  66,299


$  67,964


8%


16%


$ 79,014


$ 67,964


16%

     Criticized performing


5,209


5,429


5,581


6,821


7,166


(4)


(27)


5,209


7,166


(27)

     Criticized nonperforming


699


601


759


682


650


16


8


699


650


8

     Total commercial banking loans


$ 84,922


$  79,248


$  73,821


$  73,802


$  75,780


7


12


$ 84,922


$ 75,780


12

Risk category as a percentage of period-end loans held for investment:(12)





















     Noncriticized


93.1%


92.3%


91.4%


89.9%


89.6%


        80 bps


      350 bps


93.1%


89.6%


      350 bps

     Criticized performing


6.1


6.9


7.6


9.2


9.5


(80)


(340)


6.1


9.5


(340)

     Criticized nonperforming


0.8


0.8


1.0


0.9


0.9



(10)


0.8


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 Q4 vs


Year Ended December 31,



2021


2021


2021


2021


2020


2021


2020






2021 vs

(Dollars in millions)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2021


2020


2020

Other





















Earnings:





















     Net interest loss


$       (168)


$       (201)


$         (35)


$       (100)


$         (74)


(16)%


127%


$       (504)


$       (149)


**

     Non-interest income (loss)


(80)


(22)


(23)


(119)


6


**


**


(244)


398


**

Total net revenue (loss)(6)


(248)


(223)


(58)


(219)


(68)


11


**


(748)


249


**

     Provision (benefit) for credit losses





(2)


1



**


(2)


3


**

Non-interest expense(13)


74


117


163


69


132


(37)


(44)


423


700


(40)%

     Loss from continuing operations before income taxes


(322)


(340)


(221)


(286)


(201)


(5)


60


(1,169)


(454)


157

     Income tax benefit


(166)


(140)


(101)


(190)


(276)


19


(40)


(597)


(378)


58

     Income (loss) from continuing operations, net of tax


$       (156)


$       (200)


$       (120)


$         (96)


$          75


(22)


**


$       (572)


$         (76)


**

Selected performance metrics:





















     Period-end deposits


$      9,764


$    10,204


$    12,180


$    14,775


$    16,037


(4)


(39)


$      9,764


$    16,037


(39)

     Average deposits


9,694


10,999


13,418


15,450


16,418


(12)


(41)


12,371


18,998


(35)

Total





















Earnings:





















     Net interest income


$      6,450


$      6,156


$      5,743


$      5,822


$      5,873


5%


10%


$    24,171


$    22,913


5%

     Non-interest income


1,668


1,674


1,631


1,291


1,464



14


6,264


5,610


12

     Total net revenue


8,118


7,830


7,374


7,113


7,337


4


11


30,435


28,523


7

     Provision (benefit) for credit losses


381


(342)


(1,160)


(823)


264


**


44


(1,944)


10,264


**

     Non-interest expense


4,678


4,186


3,966


3,740


4,009


12


17


16,570


15,056


10

     Income from continuing operations before income taxes


3,059


3,986


4,568


4,196


3,064


(23)



15,809


3,203


**

     Income tax provision


633


882


1,031


869


496


(28)


28


3,415


486


**

     Income from continuing operations, net of tax


$      2,426


$      3,104


$      3,537


$      3,327


$      2,568


(22)


(6)


$    12,394


$      2,717


**

Selected performance metrics:





















     Period-end loans held for investment


$  277,340


$  261,390


$  249,597


$  243,131


$  251,624


6


10


$  277,340


$  251,624


10

     Average loans held for investment


267,159


253,101


246,463


243,937


247,689


6


8


252,730


253,335


     Period-end deposits


310,980


305,938


306,308


310,328


305,442


2


2


310,980


305,442


2

     Average deposits


307,272


305,035


308,217


305,056


304,513


1


1


306,397


290,835


5

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—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)

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.

(4)

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.

(5)

Primarily represents foreign currency translation adjustments.

(6)

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.

(7)

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.

(8)

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

(9)

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

(10)

Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.

(11)

Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.

(12)

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

(13)

Includes charges incurred as a result of restructuring activities.

**

Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures(1)




Basel III Standardized Approach

(Dollars in millions, except as noted)


December 31,

2021


September 30,

2021


June 30,

2021


March 31,

2021


December 31,

2020

Regulatory Capital Metrics











Common equity excluding AOCI


$        58,206


$        58,705


$        58,969


$         57,607


$        55,299

Adjustments:











AOCI, net of tax(2)


(23)


(33)


(5)


(13)


(29)

     Goodwill, net of related deferred tax liabilities


(14,562)


(14,435)


(14,440)


(14,444)


(14,448)

     Intangible assets, net of related deferred tax liabilities


(108)


(84)


(76)


(81)


(86)

     Other


(12)


(15)


(16)


(18)


Common equity Tier 1 capital


$        43,501


$        44,138


$        44,432


$         43,051


$        40,736

Tier 1 capital


$        48,346


$        50,049


$        50,920


$         47,898


$        45,583

Total capital(3)


56,089


57,851


57,932


54,780


52,788

Risk-weighted assets


332,684


318,729


307,334


295,209


297,903

Adjusted average assets(4)


415,141


411,216


411,032


408,596


406,762

Capital Ratios











Common equity Tier 1 capital(5)


13.1%


13.8%


14.5%


14.6%


13.7%

Tier 1 capital(6)


14.5


15.7


16.6


16.2


15.3

Total capital(7)


16.9


18.2


18.8


18.6


17.7

Tier 1 leverage(4)


11.6


12.2


12.4


11.7


11.2

Tangible common equity ("TCE")(8)


9.9


10.4


10.6


10.1


10.0



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


Year Ended December 31,

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


Q4


Q3


Q2


Q1


Q4


Q3


Q2


Q1


2021


2020

Adjusted diluted EPS:





















Net income (loss) available to

common stockholders (GAAP)


$        2,296


$        2,987


$        3,446


$        3,236


$         2,462


$        2,319


$     (1,009)


$     (1,420)


$           11,965


$             2,375

     Legal reserve activity, including insurance recoveries



45


55



(37)


40


265


45


100


313

U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve")







(36)





(36)

     Cybersecurity Incident expenses, net of insurance






6


6


11


4



27

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


2,296


3,032


3,501


3,236


2,431


2,329


(733)


(1,371)


12,065


2,679

     Income tax impacts



(11)


(13)



5


(12)


(3)


(12)


(24)


(22)

Dividends and undistributed earnings allocated to participating securities(10)











(2)

Adjusted net income (loss) available to

common stockholders (non-GAAP)


$        2,296


$        3,021


$        3,488


$        3,236


$        2,436


$        2,317


$        (736)


$     (1,383)


$           12,041


$             2,655






















Diluted weighted-average common shares

outstanding (in millions) (GAAP)


424.3


440.5


452.3


460.1


460.2


458.5


456.7


457.6


444.2


458.9






















Diluted EPS (GAAP)


$          5.41


$          6.78


$          7.62


$          7.03


$           5.35


$          5.06


$       (2.21)


$       (3.10)


$             26.94


$               5.18

     Impact of adjustments noted above



0.08


0.09



(0.06)


(0.01)


0.60


0.08


0.17


0.61

Adjusted diluted EPS (non-GAAP)


$          5.41


$          6.86


$          7.71


$          7.03


$           5.29


$          5.05


$       (1.61)


$       (3.02)


$             27.11


$               5.79






















Adjusted efficiency ratio:





















Non-interest expense (GAAP)


$        4,678


$        4,186


$        3,966


$        3,740


$         4,009


$        3,548


$        3,770


$        3,729


$           16,570


$           15,056

     Legal reserve activity, including insurance

      recoveries



(45)


(55)



37


(40)


(265)


(45)


(100)


(313)

     Cybersecurity Incident expenses, net

      of insurance






(6)


(6)


(11)


(4)



(27)

Adjusted non-interest expense (non-GAAP)


$        4,678


$        4,141


$        3,911


$        3,740


$         4,040


$        3,502


$        3,494


$        3,680


$           16,470


$           14,716






















Total net revenue (GAAP)


$        8,118


$        7,830


$        7,374


$        7,113


$        7,337


$        7,381


$        6,556


$        7,249


$           30,435


$           28,523

     U.K. PPI Reserve







(36)





(36)

Adjusted net revenue (non-GAAP)


$        8,118


$        7,830


$        7,374


$        7,113


$        7,337


$        7,345


$        6,556


$        7,249


$           30,435


$           28,487






















Efficiency ratio (GAAP)


57.63%


53.46%


53.78%


52.58%


54.64%


48.07%


57.50%


51.44%


54.44%


52.79%

     Impact of adjustments noted above


         — bps


       (57) bps


       (74) bps


         — bps


         42 bps


       (39) bps


     (421) bps


(67)bps


            (32) bps


          (113) bps

Adjusted efficiency ratio (non-GAAP)


57.63%


52.89%


53.04%


52.58%


55.06%


47.68%


53.29%


50.77%


54.12%


51.66%






















Adjusted operating efficiency ratio:





















Operating expense (GAAP)


$        3,679


$        3,435


$        3,346


$        3,239


$         3,446


$        3,265


$        3,497


$        3,238


$           13,699


$           13,446

     Legal reserve activity, including 

     insurance recoveries



(45)


(55)



37


(40)


(265)


(45)


(100)


(313)

     Cybersecurity Incident expenses, net 

     of insurance






(6)


(6)


(11)


(4)



(27)

Adjusted operating expense (non-GAAP)


$        3,679


$        3,390


$        3,291


$        3,239


$        3,477


$        3,219


$        3,221


$        3,189


$           13,599


$           13,106






















Total net revenue (GAAP)


$        8,118


$        7,830


$        7,374


$        7,113


$        7,337


$        7,381


$        6,556


$        7,249


$           30,435


$           28,523

U.K. PPI Reserve







(36)





(36)

Adjusted net revenue (non-GAAP)


$        8,118


$        7,830


$        7,374


$        7,113


$        7,337


$        7,345


$        6,556


$        7,249


$           30,435


$           28,487






















Operating efficiency ratio (GAAP)


45.32%


43.87%


45.38%


45.54%


46.97%


44.24 %


53.34%


44.67%


45.01%


47.14%

Impact of adjustments noted above


          — bps


        (57) bps


        (75) bps


           — bps


           42 bps


        (41) bps


      (421) bps


(68)bps


             (33) bps


            (113) bps

Adjusted operating efficiency ratio

(non-GAAP)


45.32%


43.30%


44.63%


45.54%


47.39%


43.83%


49.13%


43.99%


44.68%


46.01%



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


2021


2021


2020

(Dollars in millions)


Q4


Q3


Q2


Q1


Q4

Tangible Common Equity (Period-End)











     Stockholders' equity


$          61,029


$          63,544


$          64,624


$          61,188


$          60,204

Goodwill and intangible assets(9)


(14,907)


(14,766)


(14,774)


(14,789)


(14,809)

     Noncumulative perpetual preferred stock


(4,845)


(5,912)


(6,488)


(4,847)


(4,847)

Tangible common equity


$          41,277


$          42,866


$          43,362


$          41,552


$          40,548

Tangible Common Equity (Average)











     Stockholders' equity


$          62,498


$          64,682


$          62,376


$          60,623


$          59,389

Goodwill and intangible assets(9)


(14,847)


(14,777)


(14,788)


(14,807)


(14,824)

     Noncumulative perpetual preferred stock


(5,552)


(6,452)


(5,491)


(4,847)


(5,168)

Tangible common equity


$          42,099


$          43,453


$          42,097


$          40,969


$          39,397

Tangible Assets (Period-End)











     Total assets


$        432,381


$        425,377


$        423,420


$        425,175


$        421,602

Goodwill and intangible assets(9)


(14,907)


(14,766)


(14,774)


(14,789)


(14,809)

Tangible assets


$        417,474


$        410,611


$        408,646


$        410,386


$        406,793

Tangible Assets (Average)











     Total assets


$        427,845


$        424,506


$        424,099


$        421,808


$        420,011

Goodwill and intangible assets(9)


(14,847)


(14,777)


(14,788)


(14,807)


(14,824)

Tangible assets


$        412,998


$        409,729


$        409,311


$        407,001


$        405,187

__________

(1)

Regulatory capital metrics and capital ratios as of December 31, 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.

(10)

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.

 

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