SEC Filing | Capital One Financial Corp.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

___________________

FORM 8-K

___________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

July 20, 2017

Date of Report (Date of earliest event reported)

_____________________________________________

CAPITAL ONE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

___________________



Delaware	1-13300	54-1719854
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)



1680 Capital One Drive, McLean, Virginia	22102
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (703) 720-1000

(Former name or former address, if changed since last report)

(Not applicable)

___________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02. Results of Operations and Financial Condition.

On July 20, 2017, Capital One Financial Corporation (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2017. Copies of the Company’s press release and financial supplement are attached and furnished herewith as Exhibits 99.1 and 99.2 to this Form 8-K and are incorporated herein by reference.

Note: Information in this report (including Exhibits 99.1 and 99.2) furnished pursuant to Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

Item 9.01. Financial Statements and Exhibits.


(d)	Exhibits.



Exhibit No.		Description of Exhibit
99.1		Press Release, dated July 20, 2017 – Second Quarter 2017
99.2		Financial Supplement – Second Quarter 2017

Earnings Conference Call Webcast Information.

The Company will hold an earnings conference call on July 20, 2017 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the Company’s home page (www.capitalone.com). Choose “About Us,” then choose “Investors” to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. A replay of the webcast will be archived on the Company’s website through August 3, 2017 at 5:00 PM Eastern Time.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized.



	CAPITAL ONE FINANCIAL CORPORATION

Dated: July 20, 2017	By:	/s/ R. SCOTT BLACKLEY
		R. Scott Blackley
		Chief Financial Officer

Exhibit

Capital One Second Quarter 2017 Earnings

Page 1

Exhibit 99.1

News Release

https://cdn.kscope.io/cd5fff2d70fee76094620a15cc879da9-earningsslidesvfinal1a19.jpg



Contacts:
Investor Relations		Media Relations
Jeff Norris	Danielle Dietz	Sie Soheili	Tatiana Stead
703.720.2455	703.720.2455	703.720.3929	703.720.2352

FOR IMMEDIATE RELEASE: July 20, 2017

Capital One Reports Second Quarter 2017 Net Income of $1.0 billion,
or $1.94 per share

Excluding adjusting items, Second Quarter 2017 Net Income of $1.96 per share⁽¹⁾

McLean, Va. (July 20, 2017) – Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2017 of $1.0 billion, or $1.94 per diluted common share, compared with net income of $810 million, or $1.54 per diluted common share in the first quarter of 2017, and with net income of $942 million, or $1.69 per diluted common share in the second quarter of 2016. During the quarter, we incurred $12 million of costs related to our anticipated close of the Cabela’s acquisition, which is subject to regulatory approval. Excluding this adjusting item, net income for the second quarter of 2017 was $1.96 per diluted common share⁽¹⁾.

“We delivered another quarter of resilient growth across our businesses,” said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. “We’re investing to grow and transform our company as banking goes digital, we’re driving improving efficiency, and we are building an enduring customer franchise. We continue to be in a strong position to deliver attractive growth and returns, as well as significant capital distribution, subject to regulatory approval.”

All comparisons below are for the second quarter of 2017 compared with the first quarter of 2017 unless otherwise noted.

Second Quarter 2017 Income Statement Summary:


•	Total net revenue increased 3 percent to $6.7 billion.


•	Total non-interest expense decreased 1 percent to $3.4 billion:


•	2 percent decrease in operating expenses.


•	10 percent increase in marketing.


•	Pre-provision earnings increased 6 percent to $3.3 billion⁽²⁾.


•	Provision for credit losses decreased 10 percent to $1.8 billion:


•	Net charge-offs of $1.6 billion.


⁽¹⁾	Amounts excluding adjusting items are non-GAAP measures that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.


⁽²⁾	Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period.

Capital One Second Quarter 2017 Earnings

Page 2


•	$182 million reserve build.


•	Net interest margin flat at 6.88 percent.


•	Efficiency ratio of 50.92 percent:


•	Efficiency ratio excluding adjusting items was 50.75 percent⁽¹⁾.

Second Quarter 2017 Balance Sheet Summary:


•	Common equity Tier 1 capital ratio under Basel III Standardized Approach of 10.7 percent at June 30, 2017.


•	Period-end loans held for investment in the quarter increased $3.7 billion, or 2 percent, to $244.3 billion.


•	Domestic Card period-end loans increased $1.8 billion, or 2 percent, to $92.9 billion.


•	Consumer Banking period-end loans increased $991 million, or 1 percent, to $75.0 billion:


•	Auto period-end loans increased $2.0 billion, or 4 percent, to $51.8 billion.


•	Home loans period-end loans decreased $1.0 billion, or 5 percent, to $19.7 billion, driven by run-off of acquired portfolios.


•	Commercial Banking period-end loans increased $352 million, or 1 percent, to $67.7 billion.


•	Average loans held for investment in the quarter increased $736 million, or less than 1 percent, to $242.2 billion.


•	Domestic Card average loans decreased $1.3 billion, or 1 percent, to $91.8 billion.


•	Consumer Banking average loans increased $1.1 billion, or 2 percent, to $74.5 billion:


•	Auto average loans increased $2.1 billion, or 4 percent, to $50.8 billion.


•	Home loans average loans decreased $946 million, or 4 percent, to $20.2 billion, driven by run-off of acquired portfolios.


•	Commercial Banking average loans increased $731 million, or 1 percent, to $67.7 billion.


•	Period-end total deposits decreased $1.4 billion, or less than 1 percent, to $239.8 billion, while average deposits increased $2.0 billion, or less than 1 percent, to $240.6 billion.


•	Interest-bearing deposits rate paid increased 5 basis points to 0.71 percent.

Capital One Second Quarter 2017 Earnings

Page 3

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 20, 2017 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company’s home page (www.capitalone.com). Choose “About Us,” then choose “Investors” to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company’s website through August 3, 2017 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2016.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $239.8 billion in deposits and $350.6 billion in total assets as of June 30, 2017. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.

###

Exhibit

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement⁽¹⁾⁽²⁾

Second Quarter2017

Table of Contents



Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	6
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	8
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	10
	Table 7:	Loan Information and Performance Statistics	11
	Table 8:	Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity	13
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	14
	Table 10:	Financial & Statistical Summary—Credit Card Business	15
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	17
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	18
	Table 13:	Financial & Statistical Summary—Other and Total	19
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	20
Other
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	21

__________


⁽¹⁾	The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2017 once it is filed with the Securities and Exchange Commission.

⁽²⁾

This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated



																2017 Q2 vs.				Six Months Ended June 30,
(Dollars in millions, except per share data and as noted)	2017			2017			2016			2016			2016			2017		2016								2017 vs.
(Dollars in millions, except per share data and as noted)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2017			2016			2016
Income Statement
Net interest income	$	5,473		$	5,474		$	5,447		$	5,277		$	5,093		—		7%		$	10,947		$	10,149		8%
Non-interest income	1,231			1,061			1,119			1,184			1,161			16%		6		2,292			2,325			(1	)
Total net revenue⁽¹⁾	6,704			6,535			6,566			6,461			6,254			3		7		13,239			12,474			6
Provision for credit losses	1,800			1,992			1,752			1,588			1,592			(10	)	13		3,792			3,119			22
Non-interest expense:
Marketing	435			396			575			393			415			10		5		831			843			(1	)
Amortization of intangibles	61			62			101			89			95			(2	)	(36	)	123			196			(37	)
Operating expenses	2,918			2,976			3,003			2,879			2,785			(2	)	5		5,894			5,479			8
Total non-interest expense	3,414			3,434			3,679			3,361			3,295			(1	)	4		6,848			6,518			5
Income from continuing operations before income taxes	1,490			1,109			1,135			1,512			1,367			34		9		2,599			2,837			(8	)
Income tax provision	443			314			342			496			424			41		4		757			876			(14	)
Income from continuing operations, net of tax	1,047			795			793			1,016			943			32		11		1,842			1,961			(6	)
Income (loss) from discontinued operations, net of tax⁽²⁾	(11		)	15			(2		)	(11		)	(1		)	**		**		4			(6		)	**
Net income	1,036			810			791			1,005			942			28		10		1,846			1,955			(6	)
Dividends and undistributed earnings allocated to participating securities⁽³⁾	(8		)	(5		)	(6		)	(6		)	(6		)	60		33		(13		)	(12		)	8
Preferred stock dividends	(80		)	(53		)	(75		)	(37		)	(65		)	51		23		(133		)	(102		)	30
Net income available to common stockholders	$	948		$	752		$	710		$	962		$	871		26		9		$	1,700		$	1,841		(8	)
Common Share Statistics
Basic earnings per common share:⁽³⁾
Net income from continuing operations	$	1.98		$	1.53		$	1.47		$	1.94		$	1.70		29%		16%		$	3.51		$	3.57		(2)%
Income (loss) from discontinued operations	(0.02		)	0.03			—			(0.02		)	—			**		**		0.01			(0.01		)	**
Net income per basic common share	$	1.96		$	1.56		$	1.47		$	1.92		$	1.70		26		15		$	3.52		$	3.56		(1	)
Diluted earnings per common share:⁽³⁾
Net income from continuing operations	$	1.96		$	1.51		$	1.45		$	1.92		$	1.69		30		16		$	3.48		$	3.53		(1	)
Income (loss) from discontinued operations	(0.02		)	0.03			—			(0.02		)	—			**		**		0.01			(0.01		)	**
Net income per diluted common share	$	1.94		$	1.54		$	1.45		$	1.90		$	1.69		26		15		$	3.49		$	3.52		(1	)
Weighted-average common shares outstanding (in millions):
Basic	484.0			482.3			483.5			501.1			511.7			—		(5	)	483.1			517.6			(7	)
Diluted	488.1			487.9			489.2			505.9			516.5			—		(5	)	487.7			522.3			(7	)
Common shares outstanding (period-end, in millions)	483.7			482.8			480.2			489.2			505.9			—		(4	)	483.7			505.9			(4	)
Dividends paid per common share	$	0.40		$	0.40		$	0.40		$	0.40		$	0.40		—		—		$	0.80		$	0.80		—
Tangible book value per common share (period-end)⁽⁴⁾	60.94			58.66			57.76			59.00			57.84			4		5		60.94			57.84			5



											2017 Q2 vs.				Six Months Ended June 30,
(Dollars in millions)	2017		2017		2016		2016		2016		2017		2016						2017 vs.
(Dollars in millions)	Q2		Q1		Q4		Q3		Q2		Q1		Q2		2017		2016		2016
Balance Sheet (Period-End)
Loans held for investment⁽⁵⁾	$	244,302	$	240,588	$	245,586	$	238,019	$	234,603	2%		4%		$	244,302	$	234,603	4%
Interest-earning assets	319,286		316,712		321,807		313,431		307,163		1		4		319,286		307,163		4
Total assets	350,593		348,549		357,033		345,061		339,117		1		3		350,593		339,117		3
Interest-bearing deposits	213,810		214,818		211,266		200,416		195,635		—		9		213,810		195,635		9
Total deposits	239,763		241,182		236,768		225,981		221,059		(1	)	8		239,763		221,059		8
Borrowings	49,954		48,439		60,460		59,820		59,181		3		(16	)	49,954		59,181		(16	)
Common equity	44,777		43,680		43,154		44,336		44,813		3		—		44,777		44,813		—
Total stockholders’ equity	49,137		48,040		47,514		48,213		48,108		2		2		49,137		48,108		2
Balance Sheet (Average Balances)
Loans held for investment⁽⁵⁾	$	242,241	$	241,505	$	240,027	$	235,843	$	230,379	—		5%		$	241,875	$	228,557	6%
Interest-earning assets	318,078		318,358		317,853		310,987		302,764		—		5		318,215		301,106		6
Total assets	349,891		351,641		350,225		343,153		334,479		—		5		350,761		333,197		5
Interest-bearing deposits	214,412		212,973		206,464		196,913		195,641		1%		10		213,696		194,883		10
Total deposits	240,550		238,550		232,204		222,251		221,146		1		9		239,555		220,163		9
Borrowings	48,838		53,357		58,624		60,708		54,359		(8	)	(10	)	51,085		54,060		(6	)
Common equity	44,645		43,833		43,921		45,314		45,640		2		(2	)	44,241		45,711		(3	)
Total stockholders’ equity	49,005		48,193		47,972		49,033		48,934		2		—		48,602		49,007		(1	)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated



													2017 Q2 vs.				Six Months Ended June 30,
(Dollars in millions, except as noted)	2017			2017		2016			2016		2016		2017		2016							2017 vs.
(Dollars in millions, except as noted)	Q2			Q1		Q4			Q3		Q2		Q1		Q2		2017			2016		2016
Performance Metrics
Net interest income growth (period over period)	—			—		3%			4%		1%		**		**		8%			11%		**
Non-interest income growth (period over period)	16		%	(5)%		(5		)	2		—		**		**		(1		)	5		**
Total net revenue growth (period over period)	3			—		2			3		1		**		**		6			10		**
Total net revenue margin⁽⁶⁾	8.43			8.21		8.26			8.31		8.26		22	bps	17	bps	8.32			8.29		3	bps
Net interest margin⁽⁷⁾	6.88			6.88		6.85			6.79		6.73		—		15		6.88			6.74		14
Return on average assets	1.20			0.90		0.91			1.18		1.13		30		7		1.05			1.18		(13	)
Return on average tangible assets⁽⁸⁾	1.25			0.95		0.95			1.24		1.18		30		7		1.10			1.24		(14	)
Return on average common equity⁽⁹⁾	8.59			6.73		6.48			8.59		7.64		186		95		7.67			8.08		(41	)
Return on average tangible common equity⁽¹⁰⁾	13.09			10.37		10.00			13.06		11.61		272		148		11.75			12.28		(53	)
Non-interest expense as a percentage of average loans held for investment	5.64			5.69		6.13			5.70		5.72		(5	)	(8	)	5.66			5.70		(4	)
Efficiency ratio⁽¹¹⁾	50.92			52.55		56.03			52.02		52.69		(163	)	(177	)	51.73			52.25		(52	)
Effective income tax rate for continuing operations	29.7			28.3		30.1			32.8		31.0		140		(130	)	29.1			30.9		(180	)
Employees (in thousands), period-end	49.9			48.4		47.3			46.5		46.1		3%		8%		49.9			46.1		8%
Credit Quality Metrics
Allowance for loan and lease losses	$	7,170		$	6,984	$	6,503		$	6,258	$	5,881	3%		22%		$	7,170		$	5,881	22%
Allowance as a percentage of loans held for investment	2.93%			2.90%		2.65%			2.63%		2.51%		3	bps	42	bps	2.93%			2.51%		42	bps
Net charge-offs	$	1,618		$	1,510	$	1,489		$	1,240	$	1,155	7%		40%		$	3,128		$	2,333	34%
Net charge-off rate⁽¹²⁾	2.67%			2.50%		2.48%			2.10%		2.01%		17	bps	66	bps	2.59%			2.04%		55	bps
30+ day performing delinquency rate	2.69			2.61		2.93			2.71		2.47		8		22		2.69			2.47		22
30+ day delinquency rate	2.99			2.92		3.27			3.04		2.79		7		20		2.99			2.79		20
Capital Ratios⁽¹³⁾
Common equity Tier 1 capital	10.7%			10.4%		10.1%			10.6%		10.9%		30	bps	(20	)bps	10.7%			10.9%		(20	)bps
Tier 1 capital	12.2			12.0		11.6			12.0		12.2		20		—		12.2			12.2		—
Total capital	14.9			14.7		14.3			14.7		14.4		20		50		14.9			14.4		50
Tier 1 leverage	10.3			9.9		9.9			10.1		10.2		40		10		10.3			10.2		10
Tangible common equity (“TCE”)⁽¹⁴⁾	8.8			8.5		8.1			8.8		9.0		30		(20	)	8.8			9.0		(20	)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income



																2017 Q2 vs.				Six Months Ended June 30,
	2017			2017			2016			2016			2016			2017		2016								2017 vs.
(Dollars in millions, except per share data and as noted)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2017			2016			2016
Interest income:
Loans, including loans held for sale	$	5,669		$	5,626		$	5,587		$	5,383		$	5,148		1%		10%		$	11,295		$	10,233		10%
Investment securities	433			416			393			386			405			4		7		849			820			4
Other	26			28			29			25			18			(7	)	44		54			35			54
Total interest income	6,128			6,070			6,009			5,794			5,571			1		10		12,198			11,088			10
Interest expense:
Deposits	382			353			332			306			292			8		31		735			575			28
Securitized debt obligations	82			69			65			56			47			19		74		151			95			59
Senior and subordinated notes	179			149			138			121			111			20		61		328			217			51
Other borrowings	12			25			27			34			28			(52	)	(57	)	37			52			(29	)
Total interest expense	655			596			562			517			478			10		37		1,251			939			33
Net interest income	5,473			5,474			5,447			5,277			5,093			—		7		10,947			10,149			8
Provision for credit losses	1,800			1,992			1,752			1,588			1,592			(10	)	13		3,792			3,119			22
Net interest income after provision for credit losses	3,673			3,482			3,695			3,689			3,501			5		5		7,155			7,030			2
Non-interest income:^(15)(16)
Service charges and other customer-related fees	418			371			412			417			393			13		6		789			816			(3	)
Interchange fees, net	676			570			624			603			621			19		9		1,246			1,225			2
Net securities gains (losses)	(4		)	—			(4		)	1			—			**		**		(4		)	(8		)	(50	)
Other	141			120			87			163			147			18		(4	)	261			292			(11	)
Total non-interest income	1,231			1,061			1,119			1,184			1,161			16		6		2,292			2,325			(1	)
Non-interest expense:^(15)(16)
Salaries and associate benefits	1,383			1,471			1,336			1,317			1,279			(6	)	8		2,854			2,549			12
Occupancy and equipment	474			471			522			499			465			1		2		945			923			2
Marketing	435			396			575			393			415			10		5		831			843			(1	)
Professional services	279			247			312			257			264			13		6		526			505			4
Communications and data processing	289			288			297			291			302			—		(4	)	577			582			(1	)
Amortization of intangibles	61			62			101			89			95			(2	)	(36	)	123			196			(37	)
Other	493			499			536			515			475			(1	)	4		992			920			8
Total non-interest expense	3,414			3,434			3,679			3,361			3,295			(1	)	4		6,848			6,518			5
Income from continuing operations before income taxes	1,490			1,109			1,135			1,512			1,367			34		9		2,599			2,837			(8	)
Income tax provision	443			314			342			496			424			41		4		757			876			(14	)
Income from continuing operations, net of tax	1,047			795			793			1,016			943			32		11		1,842			1,961			(6	)
Income (loss) from discontinued operations, net of tax⁽²⁾	(11		)	15			(2		)	(11		)	(1		)	**		**		4			(6		)	**
Net income	1,036			810			791			1,005			942			28		10		1,846			1,955			(6	)
Dividends and undistributed earnings allocated to participating securities⁽³⁾	(8		)	(5		)	(6		)	(6		)	(6		)	60		33		(13		)	(12		)	8
Preferred stock dividends	(80		)	(53		)	(75		)	(37		)	(65		)	51		23		(133		)	(102		)	30
Net income available to common stockholders	$	948		$	752		$	710		$	962		$	871		26		9		$	1,700		$	1,841		(8	)



													2017 Q2 vs.			Six Months Ended June 30,
	2017			2017		2016		2016			2016		2017	2016							2017 vs.
(Dollars in millions, except per share data and as noted)	Q2			Q1		Q4		Q3			Q2		Q1	Q2		2017		2016			2016
Basic earnings per common share:⁽³⁾
Net income from continuing operations	$	1.98		$	1.53	$	1.47	$	1.94		$	1.70	29%	16%		$	3.51	$	3.57		(2)%
Income (loss) from discontinued operations	(0.02		)	0.03		—		(0.02		)	—		**	**		0.01		(0.01		)	**
Net income per basic common share	$	1.96		$	1.56	$	1.47	$	1.92		$	1.70	26	15		$	3.52	$	3.56		(1	)
Diluted earnings per common share:⁽³⁾
Net income from continuing operations	$	1.96		$	1.51	$	1.45	$	1.92		$	1.69	30	16		$	3.48	$	3.53		(1	)
Income (loss) from discontinued operations	(0.02		)	0.03		—		(0.02		)	—		**	**		0.01		(0.01		)	**
Net income per diluted common share	$	1.94		$	1.54	$	1.45	$	1.90		$	1.69	26	15		$	3.49	$	3.52		(1	)
Weighted-average common shares outstanding (in millions):
Basic common shares	484.0			482.3		483.5		501.1			511.7		—	(5	)	483.1		517.6			(7	)
Diluted common shares	488.1			487.9		489.2		505.9			516.5		—	(5	)	487.7		522.3			(7	)
Dividends paid per common share	$	0.40		$	0.40	$	0.40	$	0.40		$	0.40	—	—		$	0.80	$	0.80		—

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets



																2017 Q2 vs.
	2017			2017			2016			2016			2016			2017		2016
(Dollars in millions)	Q2			Q1			Q4			Q3			Q2			Q1		Q2
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,352		$	3,489		$	4,185		$	3,350		$	3,253		(4)%		3%
Interest-bearing deposits and other short-term investments	3,363			5,826			5,791			5,744			3,896			(42	)	(14	)
Total cash and cash equivalents	6,715			9,315			9,976			9,094			7,149			(28	)	(6	)
Restricted cash for securitization investors	300			486			2,517			287			265			(38	)	13
Securities available for sale, at fair value	41,120			41,260			40,737			41,511			39,960			—		3
Securities held to maturity, at carrying value	27,720			26,170			25,712			25,019			25,120			6		10
Loans held for investment:⁽⁵⁾
Unsecuritized loans held for investment	214,864			211,038			213,824			206,763			202,778			2		6
Loans held in consolidated trusts	29,438			29,550			31,762			31,256			31,825			—		(8	)
Total loans held for investment	244,302			240,588			245,586			238,019			234,603			2		4
Allowance for loan and lease losses	(7,170		)	(6,984		)	(6,503		)	(6,258		)	(5,881		)	3		22
Net loans held for investment	237,132			233,604			239,083			231,761			228,722			2		4
Loans held for sale, at lower of cost or fair value	777			735			1,043			994			1,220			6		(36	)
Premises and equipment, net	3,825			3,727			3,675			3,561			3,556			3		8
Interest receivable	1,346			1,368			1,351			1,251			1,236			(2	)	9
Goodwill	14,524			14,521			14,519			14,493			14,495			—		—
Other assets	17,134			17,363			18,420			17,090			17,394			(1	)	(1	)
Total assets	$	350,593		$	348,549		$	357,033		$	345,061		$	339,117		1		3



																2017 Q2 vs.
	2017			2017			2016			2016			2016			2017		2016
(Dollars in millions)	Q2			Q1			Q4			Q3			Q2			Q1		Q2
Liabilities:
Interest payable	$	376		$	260		$	327		$	237		$	301		45%		25%
Deposits:
Non-interest-bearing deposits	25,953			26,364			25,502			25,565			25,424			(2	)	2
Interest-bearing deposits	213,810			214,818			211,266			200,416			195,635			—		9
Total deposits	239,763			241,182			236,768			225,981			221,059			(1	)	8
Securitized debt obligations	18,358			18,528			18,826			18,411			16,130			(1	)	14
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	958			1,046			992			1,079			999			(8	)	(4	)
Senior and subordinated notes	28,478			26,405			23,431			24,001			21,872			8		30
Other borrowings	2,160			2,460			17,211			16,329			20,180			(12	)	(89	)
Total other debt	31,596			29,911			41,634			41,409			43,051			6		(27	)
Other liabilities	11,363			10,628			11,964			10,810			10,468			7		9
Total liabilities	301,456			300,509			309,519			296,848			291,009			—		4

Stockholders’ equity:
Preferred stock	0			0			0			0			0			—		—
Common stock	7			7			7			7			7			—		—
Additional paid-in capital, net	31,413			31,326			31,157			30,439			29,786			—		5
Retained earnings	31,086			30,326			29,766			29,245			28,479			3		9
Accumulated other comprehensive income (loss)	(683		)	(934		)	(949		)	121			241			(27	)	**
Treasury stock, at cost	(12,686		)	(12,685		)	(12,467		)	(11,599		)	(10,405		)	—		22
Total stockholders’ equity	49,137			48,040			47,514			48,213			48,108			2		2
Total liabilities and stockholders’ equity	$	350,593		$	348,549		$	357,033		$	345,061		$	339,117		1		3

CAPITAL ONE FINANCIAL CORPORATION (COF)

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


⁽¹⁾	Total net revenue was reduced by $313 million in Q2 2017, $321 million in both Q1 2017 and Q4 2016, $289 million in Q3 2016 and $244 million in Q2 2016 for the estimated uncollectible amount of billed finance charges and fees and related losses.


⁽²⁾	The provision (benefit) for mortgage representation and warranty losses included the following activity:



	2017		2017			2016			2016		2016
(Dollars in millions)	Q2		Q1			Q4			Q3		Q2
Provision (benefit) for mortgage representation and warranty losses before income taxes:
Recorded in continuing operations	$	—	$	(25	)	$	—		$	—	$	(1	)
Recorded in discontinued operations	6		(67		)	(2		)	18		2
Total provision (benefit) for mortgage representation and warranty losses before income taxes	$	6	$	(92	)	$	(2	)	$	18	$	1

The mortgage representation and warranty reserve was $521 million as of June 30, 2017, $516 million as of March 31, 2017, $630 million as of December 31, 2016, $632 million as of September 30, 2016 and $614 million as of June 30, 2016.

⁽³⁾

Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on our non-GAAP measures.


⁽⁴⁾	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.

⁽⁵⁾

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



	2017		2017		2016		2016		2016
(Dollars in millions)	Q2		Q1		Q4		Q3		Q2
PCI loans:
Period-end unpaid principal balance	$	13,599	$	14,838	$	15,896	$	17,011	$	18,256
Period-end loans held for investment	12,895		14,102		15,071		16,149		17,358
Average loans held for investment	13,305		14,433		15,443		16,529		17,783


⁽⁶⁾	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.


⁽⁷⁾	Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.


⁽⁸⁾	Return on average tangible assets is a non-GAAP measure calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.

⁽⁹⁾

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

⁽¹⁰⁾

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


⁽¹¹⁾	Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on our non-GAAP measures.


⁽¹²⁾	Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.


⁽¹³⁾	Capital ratios as of the end of Q2 2017 are preliminary and therefore subject to change. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for information on the calculation of each of these ratios.


⁽¹⁴⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.

⁽¹⁵⁾

We made certain Non-interest income and Non-interest expense reclassifications in Q4 2016. The changes were primarily related to a reclassification of certain consumer and commercial banking income from Other to Service charges and other customer-related fees within Non-interest income, and a reclassification of certain system processing costs from Professional services to Communications and data processing within Non-interest expense. We also consolidated the Non-interest income presentation of Other-than-temporary impairment (“OTTI”) with net realized gains or losses from investment securities into a new Net securities gains (losses) line. These reclassifications were made to better reflect the nature of income earned and expenses incurred. All prior period amounts presented have been reclassified to conform to the current period presentation.

⁽¹⁶⁾

The primary net effects of the reclassifications discussed in footnote 15 above for Q2 2016 and the six months ended June 30, 2016, compared to previously reported results were (i) an increase to Service charges and other customer-related fees of $22 million and $41 million, respectively; (ii) a decrease to Other non-interest income of $29 million and $56 million, respectively; and (iii) increases to Communications and data processing expense of $40 million and $77 million, respectively, with corresponding decreases to Professional services.


^**	Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



	2017 Q2					2017 Q1					2016 Q2
	Average Balance		Interest Income/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, except as noted)	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⁾
Interest-earning assets:
Loans, including loans held for sale	$	242,967	$	5,669	9.33%	$	242,249	$	5,626	9.29%	$	231,496	$	5,148	8.90%
Investment securities	68,857		433		2.52	68,418		416		2.43	65,754		405		2.46
Cash equivalents and other	6,254		26		1.66	7,691		28		1.46	5,514		18		1.31
Total interest-earning assets	$	318,078	$	6,128	7.71	$	318,358	$	6,070	7.63	$	302,764	$	5,571	7.36
Interest-bearing liabilities:
Interest-bearing deposits	$	214,412	$	382	0.71	$	212,973	$	353	0.66	$	195,641	$	292	0.60
Securitized debt obligations	18,400		82		1.78	17,176		69		1.61	15,226		47		1.23
Senior and subordinated notes	27,821		179		2.57	24,804		149		2.40	21,717		111		2.04
Other borrowings and liabilities	3,656		12		1.31	12,356		25		0.81	18,255		28		0.61
Total interest-bearing liabilities	$	264,289	$	655	0.99	$	267,309	$	596	0.89	$	250,839	$	478	0.76
Net interest income/spread			$	5,473	6.72			$	5,474	6.74			$	5,093	6.60
Impact of non-interest-bearing funding					0.16					0.14					0.13
Net interest margin					6.88%					6.88%					6.73%



	Six Months Ended June 30,
	2017					2016
	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
(Dollars in millions, except as noted)	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans, including loans held for sale	$	242,610	$	11,295	9.31%	$	229,534	$	10,233	8.92%
Investment securities	68,637		849		2.47	65,455		820		2.51
Cash equivalents and other	6,968		54		1.55	6,117		35		1.14
Total interest-earning assets	$	318,215	$	12,198	7.67	$	301,106	$	11,088	7.36
Interest-bearing liabilities:
Interest-bearing deposits	$	213,696	$	735	0.69	$	194,883	$	575	0.59
Securitized debt obligations	17,791		151		1.70	15,293		95		1.24
Senior and subordinated notes	26,321		328		2.49	21,855		217		1.99
Other borrowings and liabilities	7,981		37		0.93	17,716		52		0.59
Total interest-bearing liabilities	$	265,789	$	1,251	0.94	$	249,747	$	939	0.75
Net interest income/spread			$	10,947	6.73			$	10,149	6.61
Impact of non-interest-bearing funding					0.15					0.13
Net interest margin					6.88%					6.74%

__________


⁽¹⁾	Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics



											2017 Q2 vs.				Six Months Ended June 30,
(Dollars in millions, except as noted)	2017 Q2		2017 Q1		2016 Q4		2016 Q3		2016 Q2		2017 Q1		2016 Q2		2017		2016		2017 vs. 2016
Loans Held For Investment (Period-End)
Credit card:
Domestic credit card	$	92,866	$	91,092	$	97,120	$	90,955	$	88,581	2%		5%		$	92,866	$	88,581	5%
International card businesses	8,724		8,121		8,432		8,246		8,323		7		5		8,724		8,323		5
Total credit card	101,590		99,213		105,552		99,201		96,904		2		5		101,590		96,904		5
Consumer banking:
Auto	51,765		49,771		47,916		46,311		44,502		4		16		51,765		44,502		16
Home loan	19,724		20,738		21,584		22,448		23,358		(5	)	(16	)	19,724		23,358		(16	)
Retail banking	3,484		3,473		3,554		3,526		3,555		—		(2	)	3,484		3,555		(2	)
Total consumer banking	74,973		73,982		73,054		72,285		71,415		1		5		74,973		71,415		5
Commercial banking:
Commercial and multifamily real estate	27,428		27,218		26,609		26,507		26,341		1		4		27,428		26,341		4
Commercial and industrial	39,801		39,638		39,824		39,432		39,313		—		1		39,801		39,313		1
Total commercial lending	67,229		66,856		66,433		65,939		65,654		1		2		67,229		65,654		2
Small-ticket commercial real estate	443		464		483		518		548		(5	)	(19	)	443		548		(19	)
Total commercial banking	67,672		67,320		66,916		66,457		66,202		1		2		67,672		66,202		2
Other loans	67		73		64		76		82		(8	)	(18	)	67		82		(18	)
Total loans held for investment	$	244,302	$	240,588	$	245,586	$	238,019	$	234,603	2		4		$	244,302	$	234,603	4
Loans Held For Investment (Average)
Credit card:
Domestic credit card	$	91,769	$	93,034	$	92,623	$	89,763	$	85,981	(1)%		7%		$	92,398	$	85,564	8%
International card businesses	8,274		8,135		8,168		8,253		8,401		2		(2	)	8,205		8,120		1
Total credit card	100,043		101,169		100,791		98,016		94,382		(1	)	6		100,603		93,684		7
Consumer banking:
Auto	50,803		48,673		47,126		45,355		43,605		4		17		49,743		42,784		16
Home loan	20,203		21,149		21,984		22,852		23,835		(4	)	(15	)	20,674		24,308		(15	)
Retail banking	3,463		3,509		3,549		3,520		3,548		(1	)	(2	)	3,486		3,550		(2	)
Total consumer banking	74,469		73,331		72,659		71,727		70,988		2		5		73,903		70,642		5
Commercial banking:
Commercial and multifamily real estate	27,401		26,587		26,445		26,154		25,661		3		7		26,997		25,338		7
Commercial and industrial	39,815		39,877		39,573		39,346		38,713		—		3		39,845		38,237		4
Total commercial lending	67,216		66,464		66,018		65,500		64,374		1		4		66,842		63,575		5
Small-ticket commercial real estate	453		474		497		534		564		(4	)	(20	)	463		581		(20	)
Total commercial banking	67,669		66,938		66,515		66,034		64,938		1		4		67,305		64,156		5
Other loans	60		67		62		66		71		(10	)	(15	)	64		75		(15	)
Total average loans held for investment	$	242,241	$	241,505	$	240,027	$	235,843	$	230,379	—		5		$	241,875	$	228,557	6



									2017 Q2 vs.				Six Months Ended June 30,
	2017 Q2		2017 Q1	2016 Q4		2016 Q3	2016 Q2		2017 Q1		2016 Q2		2017	2016		2017 vs. 2016
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card	5.11%		5.14%	4.66%		3.74%	4.07%		(3	)bps	104	bps	5.12%	4.12%		100	bps
International card businesses	4.08		3.69	3.35		3.18	3.54		39		54		3.88	3.39		49
Total credit card	5.02		5.02	4.56		3.70	4.02		—		100		5.02	4.05		97
Consumer banking:
Auto⁽¹⁾	1.70		1.64	2.07		1.85	1.20		6		50		1.67	1.39		28
Home loan	0.04		0.03	0.08		0.03	0.09		1		(5	)	0.03	0.07		(4	)
Retail banking	1.71		1.92	1.73		1.75	1.26		(21	)	45		1.81	1.31		50
Total consumer banking⁽¹⁾	1.25		1.19	1.45		1.26	0.83		6		42		1.22	0.93		29
Commercial banking:
Commercial and multifamily real estate	0.03		—	(0.02	)	0.01	(0.02	)	**		**		0.02	(0.02	)	**
Commercial and industrial	1.34		0.22	0.80		1.09	0.62		112		72		0.78	0.56		22
Total commercial lending	0.81		0.13	0.47		0.66	0.37		68		44		0.47	0.33		14
Small-ticket commercial real estate	(0.22	)	1.05	(0.02	)	0.74	0.33		**		**		0.43	0.23		20
Total commercial banking	0.80		0.14	0.47		0.66	0.37		66		43		0.47	0.33		14
Total net charge-offs	2.67		2.50	2.48		2.10	2.01		17		66		2.59	2.04		55
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card	3.63%		3.71%	3.95%		3.68%	3.14%		(8	)bps	49	bps	3.63%	3.14%		49	bps
International card businesses	3.28		3.39	3.36		3.33	3.24		(11	)	4		3.28	3.24		4
Total credit card	3.60		3.68	3.91		3.65	3.15		(8	)	45		3.60	3.15		45
Consumer banking:
Auto	5.40		5.03	6.12		5.67	5.59		37		(19	)	5.40	5.59		(19	)
Home loan	0.14		0.15	0.20		0.19	0.14		(1	)	—		0.14	0.14		—
Retail banking	0.54		0.59	0.70		0.59	0.62		(5	)	(8	)	0.54	0.62		(8	)
Total consumer banking	3.79		3.45	4.10		3.72	3.56		34		23		3.79	3.56		23
Nonperforming Loans and Nonperforming Assets Rates⁽²⁾⁽³⁾
Credit card:
International card businesses	0.37%		0.47%	0.50%		0.53%	0.53%		(10	)bps	(16	)bps	0.37%	0.53%		(16	)bps
Total credit card	0.03		0.04	0.04		0.04	0.05		(1	)	(2	)	0.03	0.05		(2	)
Consumer banking:
Auto	0.53		0.36	0.47		0.43	0.38		17		15		0.53	0.38		15
Home loan	1.31		1.27	1.26		1.23	1.24		4		7		1.31	1.24		7
Retail banking	0.96		0.82	0.86		1.05	0.89		14		7		0.96	0.89		7
Total consumer banking	0.75		0.64	0.72		0.71	0.69		11		6		0.75	0.69		6
Commercial banking:
Commercial and multifamily real estate	0.13		0.13	0.11		0.08	0.10		—		3		0.13	0.10		3
Commercial and industrial	1.62		2.02	2.48		2.44	2.58		(40	)	(96	)	1.62	2.58		(96	)
Total commercial lending	1.01		1.25	1.53		1.49	1.59		(24	)	(58	)	1.01	1.59		(58	)
Small-ticket commercial real estate	1.89		1.65	0.85		2.13	1.59		24		30		1.89	1.59		30
Total commercial banking	1.01		1.25	1.53		1.50	1.59		(24	)	(58	)	1.01	1.59		(58	)
Total nonperforming loans	0.53		0.57	0.65		0.66	0.68		(4	)	(15	)	0.53	0.68		(15	)
Total nonperforming assets	0.60		0.66	0.76		0.77	0.80		(6	)	(20	)	0.60	0.80		(20	)

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



	Three Months Ended June 30, 2017
	Credit Card									Consumer Banking
(Dollars in millions)	Domestic Card			International Card Businesses			Total Credit Card			Auto			Home Loan			Retail Banking			Total Consumer Banking			Commercial Banking			Other⁽⁴⁾			Total
Allowance for loan and lease losses:
Balance as of March 31, 2017	$	4,670		$	388		$	5,058		$	1,028		$	60		$	75		$	1,163		$	761		$	2		$	6,984
Charge-offs	(1,454		)	(118		)	(1,572		)	(369		)	(3		)	(18		)	(390		)	(140		)	—			(2,102		)
Recoveries	282			34			316			154			1			3			158			4			6			484
Net charge-offs	(1,172		)	(84		)	(1,256		)	(215		)	(2		)	(15		)	(232		)	(136		)	6			(1,618		)
Provision (benefit) for loan and lease losses	1,327			70			1,397			253			1			14			268			141			(5		)	1,801
Allowance build (release) for loan and lease losses	155			(14		)	141			38			(1		)	(1		)	36			5			1			183
Other changes⁽⁵⁾	—			11			11			—			—			—			—			(8		)	—			3
Balance as of June 30, 2017	4,825			385			5,210			1,066			59			74			1,199			758			3			7,170
Reserve for unfunded lending commitments:
Balance as of March 31, 2017	—			—			—			—			—			7			7			133			—			140
Benefit for losses on unfunded lending commitments	—			—			—			—			—			—			—			(1		)	—			(1		)
Balance as of June 30, 2017	—			—			—			—			—			7			7			132			—			139
Combined allowance and reserve as of June 30, 2017	$	4,825		$	385		$	5,210		$	1,066		$	59		$	81		$	1,206		$	890		$	3		$	7,309



	Six Months Ended June 30, 2017
	Credit Card									Consumer Banking
(Dollars in millions)	Domestic Card			International Card Businesses			Total Credit Card			Auto			Home Loan			Retail Banking			Total Consumer Banking			Commercial Banking			Other⁽⁴⁾			Total
Allowance for loan and lease losses:
Balance as of December 31, 2016	$	4,229		$	377		$	4,606		$	957		$	65		$	80		$	1,102		$	793		$	2		$	6,503
Charge-offs	(2,938		)	(235		)	(3,173		)	(708		)	(7		)	(39		)	(754		)	(166		)	—			(4,093		)
Recoveries	570			76			646			294			3			7			304			7			8			965
Net charge-offs	(2,368		)	(159		)	(2,527		)	(414		)	(4		)	(32		)	(450		)	(159		)	8			(3,128		)
Provision (benefit) for loan and lease losses	2,964			150			3,114			523			(2		)	26			547			135			(7		)	3,789
Allowance build (release) for loan and lease losses	596			(9		)	587			109			(6		)	(6		)	97			(24		)	1			661
Other changes⁽⁵⁾	—			17			17			—			—			—			—			(11		)	—			6
Balance as of June 30, 2017	4,825			385			5,210			1,066			59			74			1,199			758			3			7,170
Reserve for unfunded lending commitments:
Balance as of December 31, 2016	—			—			—			—			—			7			7			129			—			136
Provision for losses on unfunded lending commitments	—			—			—			—			—			—			—			3			—			3
Balance as of June 30, 2017	—			—			—			—			—			7			7			132			—			139
Combined allowance and reserve as of June 30, 2017	$	4,825		$	385		$	5,210		$	1,066		$	59		$	81		$	1,206		$	890		$	3		$	7,309

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results



	Three Months Ended June 30, 2017												Six Months Ended June 30, 2017
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking			Other			Total		Credit Card		Consumer Banking		Commercial Banking		Other			Total
Net interest income	$	3,294	$	1,578	$	569		$	32		$	5,473	$	6,640	$	3,095	$	1,135	$	77		$	10,947
Non-interest income	875		183		183			(10		)	1,231		1,613		378		341		(40		)	2,292
Total net revenue⁽⁶⁾	4,169		1,761		752			22			6,704		8,253		3,473		1,476		37			13,239
Provision (benefit) for credit losses	1,397		268		140			(5		)	1,800		3,114		547		138		(7		)	3,792
Non-interest expense	1,918		1,059		381			56			3,414		3,847		2,101		772		128			6,848
Income (loss) from continuing operations before income taxes	854		434		231			(29		)	1,490		1,292		825		566		(84		)	2,599
Income tax provision (benefit)	301		158		85			(101		)	443		468		301		207		(219		)	757
Income from continuing operations, net of tax	$	553	$	276	$	146		$	72		$	1,047	$	824	$	524	$	359	$	135		$	1,842

	Three Months Ended March 31, 2017
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking			Other			Total
Net interest income	$	3,346	$	1,517	$	566		$	45		$	5,474
Non-interest income	738		195		158			(30		)	1,061
Total net revenue⁽⁶⁾	4,084		1,712		724			15			6,535
Provision (benefit) for credit losses	1,717		279		(2		)	(2		)	1,992
Non-interest expense	1,929		1,042		391			72			3,434
Income (loss) from continuing operations before income taxes	438		391		335			(55		)	1,109
Income tax provision (benefit)	167		143		122			(118		)	314
Income from continuing operations, net of tax	$	271	$	248	$	213		$	63		$	795

	Three Months Ended June 30, 2016												Six Months Ended June 30, 2016
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking			Other			Total		Credit Card		Consumer Banking		Commercial Banking		Other			Total
Net interest income	$	3,045	$	1,439	$	559		$	50		$	5,093	$	6,078	$	2,859	$	1,096	$	116		$	10,149
Non-interest income	859		175		129			(2		)	1,161		1,706		366		247		6			2,325
Total net revenue⁽⁶⁾	3,904		1,614		688			48			6,254		7,784		3,225		1,343		122			12,474
Provision (benefit) for credit losses	1,261		204		128			(1		)	1,592		2,332		434		356		(3		)	3,119
Non-interest expense	1,883		1,006		343			63			3,295		3,746		1,996		665		111			6,518
Income (loss) from continuing operations before income taxes	760		404		217			(14		)	1,367		1,706		795		322		14			2,837
Income tax provision (benefit)	276		147		79			(78		)	424		613		289		117		(143		)	876
Income from continuing operations, net of tax	$	484	$	257	$	138		$	64		$	943	$	1,093	$	506	$	205	$	157		$	1,961

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business



											2017 Q2 vs.				Six Months Ended June 30,
	2017		2017		2016		2016		2016		2017		2016						2017 vs.
(Dollars in millions, except as noted)	Q2		Q1		Q4		Q3		Q2		Q1		Q2		2017		2016		2016
Credit Card
Earnings:
Net interest income	$	3,294	$	3,346	$	3,353	$	3,204	$	3,045	(2)%		8%		$	6,640	$	6,078	9%
Non-interest income	875		738		849		825		859		19		2		1,613		1,706		(5	)
Total net revenue	4,169		4,084		4,202		4,029		3,904		2		7		8,253		7,784		6
Provision for credit losses	1,397		1,717		1,322		1,272		1,261		(19	)	11		3,114		2,332		34
Non-interest expense	1,918		1,929		2,073		1,884		1,883		(1	)	2		3,847		3,746		3
Income from continuing operations before income taxes	854		438		807		873		760		95		12		1,292		1,706		(24	)
Income tax provision	301		167		295		318		276		80		9		468		613		(24	)
Income from continuing operations, net of tax	$	553	$	271	$	512	$	555	$	484	104		14		$	824	$	1,093	(25	)
Selected performance metrics:
Period-end loans held for investment	$	101,590	$	99,213	$	105,552	$	99,201	$	96,904	2		5		$	101,590	$	96,904	5
Average loans held for investment	100,043		101,169		100,791		98,016		94,382		(1	)	6		100,603		93,684		7
Average yield on loans held for investment⁽⁷⁾	15.14%		14.99%		14.93%		14.68%		14.49%		15	bps	65	bps	15.06%		14.55%		51	bps
Total net revenue margin⁽⁸⁾	16.67		16.14		16.68		16.44		16.55		53		12		16.41		16.62		(21	)
Net charge-off rate	5.02		5.02		4.56		3.70		4.02		—		100		5.02		4.05		97
30+ day performing delinquency rate	3.60		3.68		3.91		3.65		3.15		(8	)	45		3.60		3.15		45
30+ day delinquency rate	3.62		3.71		3.94		3.69		3.18		(9	)	44		3.62		3.18		44
Nonperforming loan rate⁽²⁾	0.03		0.04		0.04		0.04		0.05		(1	)	(2	)	0.03		0.05		(2	)
PCCR intangible amortization	$	44	$	44	$	58	$	62	$	67	—		(34)%		$	88	$	137	(36)%
Purchase volume⁽⁹⁾	83,079		73,197		82,824		78,106		78,019		14%		6		156,276		146,208		7



																2017 Q2 vs.				Six Months Ended June 30,
	2017			2017			2016			2016			2016			2017		2016								2017 vs.
(Dollars in millions, except as noted)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2017			2016			2016
Domestic Card
Earnings:
Net interest income	$	3,011		$	3,093		$	3,090		$	2,956		$	2,769		(3)%		9%		$	6,104		$	5,525		10%
Non-interest income	802			699			791			759			792			15		1		1,501			1,566			(4	)
Total net revenue	3,813			3,792			3,881			3,715			3,561			1		7		7,605			7,091			7
Provision for credit losses	1,327			1,637			1,229			1,190			1,164			(19	)	14		2,964			2,136			39
Non-interest expense	1,727			1,717			1,859			1,696			1,669			1		3		3,444			3,340			3
Income from continuing operations before income taxes	759			438			793			829			728			73		4		1,197			1,615			(26	)
Income tax provision	277			160			288			302			265			73		5		437			588			(26	)
Income from continuing operations, net of tax	$	482		$	278		$	505		$	527		$	463		73		4		$	760		$	1,027		(26	)
Selected performance metrics:
Period-end loans held for investment	$	92,866		$	91,092		$	97,120		$	90,955		$	88,581		2		5		$	92,866		$	88,581		5
Average loans held for investment	91,769			93,034			92,623			89,763			85,981			(1	)	7		92,398			85,564			8
Average yield on loans held for investment⁽⁷⁾	15.07%			15.01%			14.91%			14.71%			14.40%			6	bps	67	bps	15.04%			14.41%			63	bps
Total net revenue margin⁽⁸⁾	16.62			16.30			16.76			16.55			16.57			32		5		16.46			16.58			(12	)
Net charge-off rate	5.11			5.14			4.66			3.74			4.07			(3	)	104		5.12			4.12			100
30+ day delinquency rate	3.63			3.71			3.95			3.68			3.14			(8	)	49		3.63			3.14			49
Purchase volume⁽⁹⁾	$	75,781		$	66,950		$	75,639		$	71,331		$	71,050		13%		7%		$	142,731		$	133,667		7%
Refreshed FICO scores:⁽¹⁰⁾
Greater than 660	64		%	63		%	64		%	64		%	65		%	1		(1	)	64		%	65		%	(1	)
660 or below	36			37			36			36			35			(1	)	1		36			35			1
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business



																2017 Q2 vs.				Six Months Ended June 30,
	2017			2017			2016			2016			2016			2017		2016								2017 vs.
(Dollars in millions, except as noted)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2017			2016			2016
Consumer Banking
Earnings:
Net interest income	$	1,578		$	1,517		$	1,498		$	1,472		$	1,439		4%		10%		$	3,095		$	2,859		8%
Non-interest income	183			195			166			201			175			(6	)	5		378			366			3
Total net revenue	1,761			1,712			1,664			1,673			1,614			3		9		3,473			3,225			8
Provision for credit losses	268			279			365			256			204			(4	)	31		547			434			26
Non-interest expense	1,059			1,042			1,109			1,034			1,006			2		5		2,101			1,996			5
Income from continuing operations before income taxes	434			391			190			383			404			11		7		825			795			4
Income tax provision	158			143			70			139			147			10		7		301			289			4
Income from continuing operations, net of tax	$	276		$	248		$	120		$	244		$	257		11		7		$	524		$	506		4
Selected performance metrics:
Period-end loans held for investment	$	74,973		$	73,982		$	73,054		$	72,285		$	71,415		1		5		$	74,973		$	71,415		5
Average loans held for investment	74,469			73,331			72,659			71,727			70,988			2		5		73,903			70,642			5
Average yield on loans held for investment⁽⁷⁾	6.56%			6.48%			6.50%			6.41%			6.28%			8	bps	28	bps	6.52%			6.23%			29	bps
Auto loan originations	$	7,453		$	7,025		$	6,542		$	6,804		$	6,529		6%		14%		$	14,478		$	12,373		17%
Period-end deposits	186,607			188,216			181,917			178,793			176,340			(1	)	6		186,607			176,340			6
Average deposits	186,989			183,936			180,019			177,402			176,808			2		6		185,471			175,531			6
Average deposits interest rate	0.59%			0.57%			0.57%			0.56%			0.55%			2	bps	4	bps	0.58%			0.54%			4	bps
Net charge-off rate⁽¹⁾	1.25			1.19			1.45			1.26			0.83			6		42		1.22			0.93			29
30+ day performing delinquency rate	3.79			3.45			4.10			3.72			3.56			34		23		3.79			3.56			23
30+ day delinquency rate	4.33			3.93			4.67			4.26			4.07			40		26		4.33			4.07			26
Nonperforming loan rate⁽²⁾	0.75			0.64			0.72			0.71			0.69			11		6		0.75			0.69			6
Nonperforming asset rate⁽³⁾	0.96			0.92			1.09			0.98			0.96			4		—		0.96			0.96			—
Auto—At origination FICO scores:⁽¹¹⁾
Greater than 660	51		%	51		%	52		%	51		%	51		%	—		—		51		%	51		%	—
621 - 660	18			18			17			17			17			—		1%		18			17			1%
620 or below	31			31			31			32			32			—		(1	)	31			32			(1	)
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business



																2017 Q2 vs.				Six Months Ended June 30,
	2017			2017			2016			2016			2016			2017		2016								2017 vs.
(Dollars in millions, except as noted)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2017			2016			2016
Commercial Banking
Earnings:
Net interest income	$	569		$	566		$	565		$	555		$	559		1%		2%		$	1,135		$	1,096		4%
Non-interest income	183			158			175			156			129			16		42		341			247			38
Total net revenue⁽⁶⁾	752			724			740			711			688			4		9		1,476			1,343			10
Provision (benefit) for credit losses	140			(2		)	66			61			128			**		9		138			356			(61	)
Non-interest expense	381			391			393			349			343			(3	)	11		772			665			16
Income from continuing operations before income taxes	231			335			281			301			217			(31	)	6		566			322			76
Income tax provision	85			122			102			110			79			(30	)	8		207			117			77
Income from continuing operations, net of tax	$	146		$	213		$	179		$	191		$	138		(31	)	6		$	359		$	205		75
Selected performance metrics:
Period-end loans held for investment	$	67,672		$	67,320		$	66,916		$	66,457		$	66,202		1		2		$	67,672		$	66,202		2
Average loans held for investment	67,669			66,938			66,515			66,034			64,938			1		4		67,305			64,156			5
Average yield on loans held for investment⁽⁶⁾⁽⁷⁾	3.81%			3.65%			3.55%			3.50%			3.45%			16	bps	36	bps	3.73%			3.42%			31	bps
Period-end deposits	$	33,153		$	33,735		$	33,866		$	33,611		$	34,281		(2)%		(3)%		$	33,153		$	34,281		(3)%
Average deposits	34,263			34,219			34,029			33,498			33,764			—		1		34,241			33,920			1
Average deposits interest rate	0.36%			0.31%			0.30%			0.30%			0.27%			5	bps	9	bps	0.34%			0.27%			7	bps
Net charge-off rate	0.80			0.14			0.47			0.66			0.37			66		43		0.47			0.33			14
Nonperforming loan rate⁽²⁾	1.01			1.25			1.53			1.50			1.59			(24	)	(58	)	1.01			1.59			(58	)
Nonperforming asset rate⁽³⁾	1.04			1.27			1.54			1.51			1.60			(23	)	(56	)	1.04			1.60			(56	)
Risk category:⁽¹²⁾
Noncriticized	$	63,802		$	63,390		$	62,828		$	62,336		$	61,926		1%		3%		$	63,802		$	61,926		3%
Criticized performing	2,660			2,492			2,453			2,473			2,456			7		8		2,660			2,456			8
Criticized nonperforming	686			844			1,022			994			1,050			(19	)	(35	)	686			1,050			(35	)
PCI loans	524			594			613			654			770			(12	)	(32	)	524			770			(32	)
Total commercial loans	$	67,672		$	67,320		$	66,916		$	66,457		$	66,202		1		2		$	67,672		$	66,202		2
Risk category as a percentage of period-end loans held for investment:⁽¹²⁾
Noncriticized	94.3%			94.2%			93.9%			93.8%			93.5%			10	bps	80	bps	94.3%			93.5%			80	bps
Criticized performing	3.9			3.7			3.7			3.7			3.7			20		20		3.9			3.7			20
Criticized nonperforming	1.0			1.2			1.5			1.5			1.6			(20	)	(60	)	1.0			1.6			(60	)
PCI loans	0.8			0.9			0.9			1.0			1.2			(10	)	(40	)	0.8			1.2			(40	)
Total commercial loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%					100.0		%	100.0		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total



																2017 Q2 vs.				Six Months Ended June 30,
	2017			2017			2016			2016			2016			2017		2016								2017 vs.
(Dollars in millions)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2017			2016			2016
Other
Earnings:
Net interest income	$	32		$	45		$	31		$	46		$	50		(29)%		(36)%		$	77		$	116		(34	)%
Non-interest income	(10		)	(30		)	(71		)	2			(2		)	(67	)	**		(40		)	6			**
Total net revenue (loss)⁽⁶⁾	22			15			(40		)	48			48			47		(54	)	37			122			(70	)
Benefit for credit losses	(5		)	(2		)	(1		)	(1		)	(1		)	150		**		(7		)	(3		)	133
Non-interest expense	56			72			104			94			63			(22	)	(11	)	128			111			15
Income (loss) from continuing operations before income taxes	(29		)	(55		)	(143		)	(45		)	(14		)	(47	)	107		(84		)	14			**
Income tax benefit	(101		)	(118		)	(125		)	(71		)	(78		)	(14	)	29		(219		)	(143		)	53
Income (loss) from continuing operations, net of tax	$	72		$	63		$	(18	)	$	26		$	64		14		13		$	135		$	157		(14	)
Selected performance metrics:
Period-end loans held for investment	$	67		$	73		$	64		$	76		$	82		(8	)	(18	)	$	67		$	82		(18	)
Average loans held for investment	60			67			62			66			71			(10	)	(15	)	64			75			(15	)
Period-end deposits	20,003			19,231			20,985			13,577			10,438			4		92		20,003			10,438			92
Average deposits	19,298			20,395			18,156			11,351			10,574			(5	)	83		19,843			10,712			85
Total
Earnings:
Net interest income	$	5,473		$	5,474		$	5,447		$	5,277		$	5,093		—		7%		$	10,947		$	10,149		8%
Non-interest income	1,231			1,061			1,119			1,184			1,161			16%		6		2,292			2,325			(1	)
Total net revenue	6,704			6,535			6,566			6,461			6,254			3		7		13,239			12,474			6
Provision for credit losses	1,800			1,992			1,752			1,588			1,592			(10	)	13		3,792			3,119			22
Non-interest expense	3,414			3,434			3,679			3,361			3,295			(1	)	4		6,848			6,518			5
Income from continuing operations before income taxes	1,490			1,109			1,135			1,512			1,367			34		9		2,599			2,837			(8	)
Income tax provision	443			314			342			496			424			41		4		757			876			(14	)
Income from continuing operations, net of tax	$	1,047		$	795		$	793		$	1,016		$	943		32		11		$	1,842		$	1,961		(6	)
Selected performance metrics:
Period-end loans held for investment	$	244,302		$	240,588		$	245,586		$	238,019		$	234,603		2		4		$	244,302		$	234,603		4
Average loans held for investment	242,241			241,505			240,027			235,843			230,379			—		5		241,875			228,557			6
Period-end deposits	239,763			241,182			236,768			225,981			221,059			(1	)	8		239,763			221,059			8
Average deposits	240,550			238,550			232,204			222,251			221,146			1		9		239,555			220,163			9

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

⁽¹⁾

In Q2 2017, we implemented changes in our charge-off practices for certain consumer banking loans. The Q2 2017 Auto net charge-offs amount includes approximately $48 million associated with implementing these changes, with an impact to the net charge-off rate of 38 basis points and 19 basis points for the three and six months ended June 30, 2017, respectively. Excluding this impact, the Auto net charge-off rate in those periods would have been 1.32% and 1.48%, respectively. The impact to the Consumer Banking net charge-off rate was 26 basis points and 13 basis points for the three and six months ended June 30, 2017, respectively. Excluding this impact, the Consumer Banking net charge-off rate in those periods would have been 0.99% and 1.09%, respectively.


⁽²⁾	Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.

⁽³⁾

Nonperforming assets consist of nonperforming loans, real estate owned (“REO”) and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, REO and other foreclosed assets. Prior to Q4 2016, the nonperforming asset rate for our Consumer Banking business excluded the impact of REOs related to our acquired home loan portfolio which, if included, would increase the nonperforming asset rate by approximately 10 basis points in each of the prior periods presented.


⁽⁴⁾	Primarily consists of the legacy loan portfolio of our discontinued GreenPoint mortgage operations.


⁽⁵⁾	Represents foreign currency translation adjustments and the net impact of loan transfers and sales.

⁽⁶⁾

Some of our tax-related commercial investments generate tax-exempt income or tax credits. Accordingly, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35% with offsetting reclassifications to the Other category.


⁽⁷⁾	Average yield on loans held for investment is calculated based on annualized interest income for the period divided by average loans held for investment during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and does not include any allocations, such as funds transfer pricing.


⁽⁸⁾	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the respective loan category.


⁽⁹⁾	Includes purchase transactions, net of returns, for the period for loans both classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.

⁽¹⁰⁾

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


⁽¹¹⁾	Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.


⁽¹²⁾	Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.


^**	Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



	Basel III Standardized Approach
(Dollars in millions, except as noted)	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Regulatory Capital Metrics
Common equity excluding AOCI	$	45,459		$	44,614		$	44,103		$	44,214		$	44,572
Adjustments:
AOCI⁽²⁾⁽³⁾	(593		)	(807		)	(674		)	199			332
Goodwill, net of related deferred tax liabilities	(14,299		)	(14,302		)	(14,307		)	(14,288		)	(14,296		)
Intangible assets, net of related deferred tax liabilities⁽³⁾	(418		)	(465		)	(384		)	(435		)	(483		)
Other	77			121			65			(498		)	(639		)
Common equity Tier 1 capital	$	30,226		$	29,161		$	28,803		$	29,192		$	29,486
Tier 1 capital	$	34,585		$	33,519		$	33,162		$	33,069		$	32,780
Total capital⁽⁴⁾	42,101			40,979			40,817			40,564			38,767
Risk-weighted assets	283,231			279,302			285,756			275,198			269,667
Adjusted average assets⁽⁵⁾	335,248			336,990			335,835			328,627			319,968
Capital Ratios
Common equity Tier 1 capital⁽⁶⁾	10.7		%	10.4		%	10.1%			10.6%			10.9%
Tier 1 capital⁽⁷⁾	12.2			12.0			11.6			12.0			12.2
Total capital⁽⁸⁾	14.9			14.7			14.3			14.7			14.4
Tier 1 leverage⁽⁵⁾	10.3			9.9			9.9			10.1			10.2
Tangible common equity (“TCE”)⁽⁹⁾	8.8			8.5			8.1			8.8			9.0

Reconciliation of Non-GAAP Measures

We report certain non-GAAP measures that management uses in assessing its capital adequacy and the level of return generated. The following non-GAAP measures consist of selected adjusted results, tangible common equity (“TCE”), tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics key financial performance measures. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly-titled measures reported by other companies. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.



	2017									2017							Six Months Ended
	Q2									Q1							June 30, 2017
(Dollars in millions, except per share data and as noted)	Reported Results			Adj.⁽¹⁰⁾			Adjusted Results			Reported Results		Adj.⁽¹⁰⁾			Adjusted Results		Reported Results		Adj.⁽¹⁰⁾			Adjusted Results
Selected income statement data:
Net interest income	$	5,473		—			$	5,473		$	5,474	$	33		$	5,507	$	10,947	$	33		$	10,980
Non-interest income	1,231			—			1,231			1,061		37			1,098		2,292		37			2,329
Total net revenue	6,704			—			6,704			6,535		70			6,605		13,239		70			13,309
Provision for credit losses	1,800			—			1,800			1,992		—			1,992		3,792		—			3,792
Non-interest expense	3,414			$	(12	)	3,402			3,434		(29		)	3,405		6,848		(41		)	6,807
Income from continuing operations before income taxes	1,490			12			1,502			1,109		99			1,208		2,599		111			2,710
Income tax provision (benefit)	443			4			447			314		(1		)	313		757		3			760
Income from continuing operations, net of tax	1,047			8			1,055			795		100			895		1,842		108			1,950
Income (loss) from discontinued operations, net of tax	(11		)	—			(11		)	15		—			15		4		—			4
Net income	1,036			8			1,044			810		100			910		1,846		108			1,954
Net income available to common stockholders	948			8			956			752		100			852		1,700		108			1,808
Selected performance metrics:
Diluted EPS⁽¹²⁾	$	1.94		$0.02			$	1.96		$	1.54	$0.21			$	1.75	$	3.49	$0.22			$	3.71
Efficiency ratio	50.92%			(17		)bps	50.75%			52.55%		(100		)bps	51.55%		51.73%		(58		)bps	51.15%



	2016									2016									2016									Year Ended
	Q4									Q3									Q2									December 31, 2016
(Dollars in millions, except per share data and as noted)	Reported Results			Adj.⁽¹¹⁾			Adjusted Results			Reported Results			Adj.⁽¹¹⁾			Adjusted Results			Reported Results			Adj.⁽¹¹⁾			Adjusted Results			Reported Results			Adj.⁽¹¹⁾			Adjusted Results
Selected income statement data:
Net interest income	$	5,447		$	13		$	5,460		$	5,277		$	34		$	5,311		$	5,093		$	7		$	5,100		$	20,873		$	54		$	20,927
Non-interest income	1,119			14			1,133			1,184			13			1,197			1,161			8			1,169			4,628			35			4,663
Total net revenue	6,566			27			6,593			6,461			47			6,508			6,254			15			6,269			25,501			89			25,590
Provision for credit losses	1,752			—			1,752			1,588			—			1,588			1,592			—			1,592			6,459			—			6,459
Non-interest expense	3,679			(45		)	3,634			3,361			(16		)	3,345			3,295			(15		)	3,280			13,558			(76		)	13,482
Income from continuing operations before income taxes	1,135			72			1,207			1,512			63			1,575			1,367			30			1,397			5,484			165			5,649
Income tax provision (benefit)	342			10			352			496			—			496			424			(7		)	417			1,714			3			1,717
Income from continuing operations, net of tax	793			62			855			1,016			63			1,079			943			37			980			3,770			162			3,932
Income (loss) from discontinued operations, net of tax	(2		)	—			(2		)	(11		)	—			(11		)	(1		)	—			(1		)	(19		)	—			(19		)
Net income	791			62			853			1,005			63			1,068			942			37			979			3,751			162			3,913
Net income available to common stockholders	710			62			772			962			63			1,025			871			37			908			3,513			162			3,675
Selected performance metrics:
Diluted EPS⁽¹²⁾	$	1.45		$0.13			$	1.58		$	1.90		$0.13			$	2.03		$	1.69		$0.07			$	1.76		$	6.89		$0.32			$	7.21
Efficiency ratio	56.03		%	(91		)bps	55.12		%	52.02		%	(62		)bps	51.40		%	52.69		%	(37		)bps	52.32		%	53.17		%	(49		)bps	52.68		%



	2017			2017			2016			2016			2016
(Dollars in millions)	Q2			Q1			Q4			Q3			Q2
Tangible Common Equity (Period-End)
Stockholders’ equity	$	49,137		$	48,040		$	47,514		$	48,213		$	48,108
Goodwill and intangible assets⁽¹³⁾	(15,301		)	(15,360		)	(15,420		)	(15,475		)	(15,553		)
Noncumulative perpetual preferred stock	(4,360		)	(4,360		)	(4,360		)	(3,877		)	(3,294		)
Tangible common equity	$	29,476		$	28,320		$	27,734		$	28,861		$	29,261
Tangible Common Equity (Average)
Stockholders’ equity	$	49,005		$	48,193		$	47,972		$	49,033		$	48,934
Goodwill and intangible assets⁽¹³⁾	(15,336		)	(15,395		)	(15,455		)	(15,507		)	(15,585		)
Noncumulative perpetual preferred stock	(4,360		)	(4,360		)	(4,051		)	(3,719		)	(3,294		)
Tangible common equity	$	29,309		$	28,438		$	28,466		$	29,807		$	30,055
Tangible Assets (Period-End)
Total assets	$	350,593		$	348,549		$	357,033		$	345,061		$	339,117
Goodwill and intangible assets⁽¹³⁾	(15,301		)	(15,360		)	(15,420		)	(15,475		)	(15,553		)
Tangible assets	$	335,292		$	333,189		$	341,613		$	329,586		$	323,564
Tangible Assets (Average)
Total assets	$	349,891		$	351,641		$	350,225		$	343,153		$	334,479
Goodwill and intangible assets⁽¹³⁾	(15,336		)	(15,395		)	(15,455		)	(15,507		)	(15,585		)
Tangible assets	$	334,555		$	336,246		$	334,770		$	327,646		$	318,894

__________


⁽¹⁾	Regulatory capital metrics and capital ratios as of June 30, 2017 are preliminary and therefore subject to change.


⁽²⁾	Amounts presented are net of tax.


⁽³⁾	Amounts based on transition provisions for regulatory capital deductions and adjustments of 60% for 2016 and 80% for 2017.


⁽⁴⁾	Total capital equals the sum of Tier 1 capital and Tier 2 capital.


⁽⁵⁾	Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.


⁽⁶⁾	Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.


⁽⁷⁾	Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.


⁽⁸⁾	Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.


⁽⁹⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.


⁽¹⁰⁾	In Q2 2017, we incurred $12 million of costs related to our anticipated close of the Cabela’s acquisition, which is subject to regulatory approval. In Q1 2017, we recorded a build in the U.K. Payment Protection Insurance customer refund reserve (“U.K. PPI Reserve”) of $99 million.

⁽¹¹⁾

In Q4 2016, we recorded charges totaling $72 million consisting of a build in the U.K. PPI Reserve of $44 million and an impairment associated with certain acquired intangible and software assets of $28 million. In Q3 2016, we recorded a build in the U.K. PPI Reserve of $63 million. In Q2 2016, we recorded charges totaling $30 million associated with a build of $54 million in the U.K. PPI Reserve, partially offset by a gain of $24 million related to the exchange of our ownership interest in Visa Europe with Visa Inc. as a result of Visa Inc.’s acquisition of Visa Europe. There were no adjustments to our reported results in Q1 2016.


⁽¹²⁾	Earnings per share is computed independently for each period. Accordingly, the sum of each quarter amount may not agree to the year-to-date total.


⁽¹³⁾	Includes impact of related deferred taxes.