Capital One Reports First Quarter 2021 Net Income of $3.3 billion, or $7.03 per share

First Quarter 2021 Net Income of $7.03 per share

MCLEAN, Va., April 27, 2021 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2021 of $3.3 billion, or $7.03 per diluted common share, compared with net income of $2.6 billion, or $5.35 per diluted common share in the fourth quarter of 2020, and with a net loss of $1.3 billion, or $3.10 per diluted common share in the first quarter of 2020.

"Strikingly strong credit drove another quarter of record earnings per share, and our investments to transform our technology and how we work are paying off," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "Our modern technology is powering our response to the pandemic, and putting us in a strong position for opportunities that emerge as sweeping digital change transforms banking."

The quarter included the following notable item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact

Equity investment loss

(75)

(0.12)

All comparisons below are for the first quarter of 2021 compared with the fourth quarter of 2020 unless otherwise noted.

First Quarter 2021 Income Statement Summary:

Total net revenue decreased 3 percent to $7.1 billion.
Total non-interest expense decreased 7 percent to $3.7 billion:

11 percent decrease in marketing.
6 percent decrease in operating expenses.

Pre-provision earnings increased 1 percent to $3.4 billion⁽¹⁾.
Provision for credit losses decreased $1.1 billion to $(823) million:

Net charge-offs of $740 million.
$1.6 billion loan reserve release.

Net interest margin of 5.99 percent, an decrease of 6 basis points.
Efficiency ratio of 52.58 percent.
Operating efficiency ratio of 45.54 percent.

First Quarter 2021 Balance Sheet Summary:

Common equity Tier 1 capital ratio under Basel III Standardized Approach of 14.6 percent at March 31, 2021.
Period-end loans held for investment in the quarter decreased $8.5 billion, or 3 percent, to $243.1 billion.

Credit Card period-end loans decreased $7.8 billion, or 7 percent, to $99.1 billion.

Domestic Card period-end loans decreased $7.4 billion, or 8 percent, to $91.1 billion.

Consumer Banking period-end loans increased $1.3 billion, or 2 percent, to $70.2 billion.

Auto period-end loans increased $1.3 billion, or 2 percent, to $67.1 billion.

Commercial Banking period-end loans decreased $2.0 billion, or 3 percent, to $73.8 billion.

Average loans held for investment in the quarter decreased $3.8 billion, or 2 percent, to $243.9 billion.

Credit Card average loans decreased $3.0 billion, or 3 percent, to $100.5 billion.

Domestic Card average loans decreased $2.9 billion, or 3 percent, to $92.6 billion.

Consumer Banking average loans increased $426 million, or 1 percent, to $69.2 billion.

Auto average loans increased $595 million, or 1 percent, to $66.2 billion.

Commercial Banking average loans decreased $1.2 billion, or 2 percent, to $74.2 billion.

Period-end total deposits increased $4.9 billion, or 2 percent, to $310.3 billion, while average deposits increased $543 million, or less than 1 percent, to $305.1 billion.
Interest-bearing deposits rate paid decreased 12 basis points to 0.39 percent.

(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.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on April 27, 2021 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (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 May 11, 2021 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2020.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $310.3 billion in deposits and $425.2 billion in total assets as of March 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.

Exhibit 99.2
Capital One Financial Corporation Financial Supplement⁽¹⁾⁽²⁾ First Quarter 2021 Table of Contents

Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	7
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	10
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	11
	Table 7:	Loan Information and Performance Statistics	12
	Table 8:	Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity	15
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	16
	Table 10:	Financial & Statistical Summary—Credit Card Business	17
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	19
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	20
	Table 13:	Financial & Statistical Summary—Other and Total	21
Other
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	22
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	23

__________
⁽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 March 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 Q1 vs.
(Dollars in millions, except per share data and as noted)	2021		2020		2020		2020		2020		2020		2020
(Dollars in millions, except per share data and as noted)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Income Statement
Net interest income	$	5,822	$	5,873	$	5,555	$	5,460	$	6,025	(1)	%	(3)	%
Non-interest income	1,291		1,464		1,826		1,096		1,224		(12)		5
Total net revenue⁽¹⁾	7,113		7,337		7,381		6,556		7,249		(3)		(2)
Provision (benefit) for credit losses	(823)		264		331		4,246		5,423		**		**
Non-interest expense:
Marketing	501		563		283		273		491		(11)		2
Operating expense	3,239		3,446		3,265		3,497		3,238		(6)		—
Total non-interest expense	3,740		4,009		3,548		3,770		3,729		(7)		—
Income (loss) from continuing operations before income taxes	4,196		3,064		3,502		(1,460)		(1,903)		37		**
Income tax provision (benefit)	869		496		1,096		(543)		(563)		75		**
Income (loss) from continuing operations, net of tax	3,327		2,568		2,406		(917)		(1,340)		30		**
Loss from discontinued operations, net of tax	(2)		(2)		—		(1)		—		—		**
Net income (loss)	3,325		2,566		2,406		(918)		(1,340)		30		**
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(28)		(19)		(20)		(1)		(3)		47		**
Preferred stock dividends	(61)		(68)		(67)		(90)		(55)		(10)		11
Issuance cost for redeemed preferred stock⁽³⁾	—		(17)		—		—		(22)		**		**
Net income (loss) available to common stockholders	$	3,236	$	2,462	$	2,319	$	(1,009)	$	(1,420)	31		**
Common Share Statistics
Basic earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	7.06	$	5.36	$	5.07	$	(2.21)	$	(3.10)	32	%	**
Net income (loss) per basic common share	$	7.06	$	5.36	$	5.07	$	(2.21)	$	(3.10)	32		**
Diluted earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	7.03	$	5.35	$	5.06	$	(2.21)	$	(3.10)	31		**
Net income (loss) per diluted common share	$	7.03	$	5.35	$	5.06	$	(2.21)	$	(3.10)	31		**
Weighted-average common shares outstanding (in millions):
Basic	458.6		459.1		457.8		456.7		457.6		—		—
Diluted	460.1		460.2		458.5		456.7		457.6		—		1	%
Common shares outstanding (period-end, in millions)	456.8		459.0		457.4		456.3		455.3		—		—
Dividends declared and paid per common share	$	0.40	$	0.10	$	0.10	$	0.40	$	0.40	**		—
Tangible book value per common share (period-end)⁽⁴⁾	90.96		88.34		83.67		78.82		80.68		3		13

											2021 Q1 vs.
(Dollars in millions)	2021		2020		2020		2020		2020		2020		2020
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Balance Sheet (Period-End)
Loans held for investment	$	243,131	$	251,624	$	248,223	$	251,512	$	262,990	(3)	%	(8)	%
Interest-earning assets	392,485		388,917		390,040		389,829		364,472		1		8
Total assets	425,175		421,602		421,883		421,296		396,878		1		7
Interest-bearing deposits	276,325		274,300		276,092		275,183		245,142		1		13
Total deposits	310,328		305,442		305,725		304,238		269,689		2		15
Borrowings	38,450		40,539		42,795		44,900		55,681		(5)		(31)
Common equity	56,341		55,356		53,093		50,835		51,620		2		9
Total stockholders' equity	61,188		60,204		58,424		56,045		56,830		2		8
Balance Sheet (Average Balances)
Loans held for investment	$	243,937	$	247,689	$	249,511	$	253,358	$	262,889	(2)	%	(7)	%
Interest-earning assets	388,572		388,252		391,451		378,145		355,347		—		9
Total assets	421,808		420,011		422,854		411,075		390,380		—		8
Interest-bearing deposits	273,358		274,142		276,339		261,256		241,115		—		13
Total deposits	305,056		304,513		305,516		288,344		264,653		—		15
Borrowings	39,911		40,662		44,161		49,827		51,795		(2)		(23)
Common equity	55,775		54,220		51,995		52,413		53,186		3		5
Total stockholders' equity	60,623		59,389		57,223		57,623		58,568		2		4

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

																2021 Q1 vs.
(Dollars in millions, except as noted)	2021			2020			2020			2020			2020			2020		2020
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Performance Metrics
Net interest income growth (period over period)	(1)		%	6		%	2		%	(9)		%	(1)		%	**		**
Non-interest income growth (period over period)	(12)			(20)			67			(10)			(10)			**		**
Total net revenue growth (period over period)	(3)			(1)			13			(10)			(2)			**		**
Total net revenue margin⁽⁵⁾	7.32			7.56			7.54			6.93			8.16			(24)	bps	(84)	bps
Net interest margin⁽⁶⁾	5.99			6.05			5.68			5.78			6.78			(6)		(79)
Return on average assets	3.16			2.45			2.28			(0.89)			(1.37)			71		**
Return on average tangible assets⁽⁷⁾	3.27			2.54			2.36			(0.93)			(1.43)			73		**
Return on average common equity⁽⁸⁾	23.22			18.18			17.84			(7.69)			(10.68)			5	%	**
Return on average tangible common equity⁽⁹⁾	31.61			25.02			24.98			(10.74)			(14.85)			7		**
Non-interest expense as a percentage of average loans held for investment	6.13			6.47			5.69			5.95			5.67			(34)	bps	46	bps
Efficiency ratio⁽¹⁰⁾	52.58			54.64			48.07			57.50			51.44			(206)		114
Operating efficiency ratio⁽¹¹⁾	45.54			46.97			44.24			53.34			44.67			(143)		87
Effective income tax rate for continuing operations	20.7			16.2			31.3			37.2			29.6			5	%	(9)	%
Employees (period-end, in thousands)	51.7			52.0			52.5			53.1			52.1			(1)		(1)
Credit Quality Metrics
Allowance for credit losses	$	14,017		$	15,564		$	16,129		$	16,832		$	14,073		(10)	%	—
Allowance coverage ratio	5.77		%	6.19		%	6.50		%	6.69		%	5.35		%	(42)	bps	42	bps
Net charge-offs	$	740		$	856		$	1,073		$	1,505		$	1,791		(14)	%	(59)	%
Net charge-off rate⁽¹²⁾	1.21		%	1.38		%	1.72		%	2.38		%	2.72		%	(17)	bps	(151)	bps
30+ day performing delinquency rate⁽¹³⁾	1.82			2.41			1.97			2.09			2.95			(59)		(113)
30+ day delinquency rate⁽¹³⁾	1.98			2.61			2.22			2.30			3.16			(63)		(118)
Capital Ratios⁽¹⁴⁾
Common equity Tier 1 capital	14.6		%	13.7		%	13.0		%	12.4		%	12.0		%	90	bps	260	bps
Tier 1 capital	16.2			15.3			14.8			14.2			13.7			90		250
Total capital	18.6			17.7			17.3			16.7			16.1			90		250
Tier 1 leverage	11.7			11.2			10.6			10.3			11.0			50		70
Tangible common equity ("TCE")⁽¹⁵⁾	10.1			10.0			9.4			8.8			9.6			10		50

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

											2021 Q1 vs.
	2021		2020		2020		2020		2020		2020		2020
(Dollars in millions, except per share data and as noted)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Interest income:
Loans, including loans held for sale	$	5,854	$	5,954	$	5,758	$	5,820	$	6,542	(2)	%	(11)	%
Investment securities	391		422		443		482		530		(7)		(26)
Other	16		15		14		16		37		7		(57)
Total interest income	6,261		6,391		6,215		6,318		7,109		(2)		(12)
Interest expense:
Deposits	269		347		476		611		731		(22)		(63)
Securitized debt obligations	32		34		43		56		99		(6)		(68)
Senior and subordinated notes	129		128		132		180		239		1		(46)
Other borrowings	9		9		9		11		15		—		(40)
Total interest expense	439		518		660		858		1,084		(15)		(60)
Net interest income	5,822		5,873		5,555		5,460		6,025		(1)		(3)
Provision (benefit) for credit losses	(823)		264		331		4,246		5,423		**		**
Net interest income after provision for credit losses	6,645		5,609		5,224		1,214		602		18		**
Non-interest income:
Interchange fees, net	817		818		775		672		752		—		9
Service charges and other customer-related fees	352		338		320		258		327		4		8
Net securities gains	4		—		25		—		—		**		**
Other	118		308		706		166		145		(62)		(19)
Total non-interest income	1,291		1,464		1,826		1,096		1,224		(12)		5
Non-interest expense:
Salaries and associate benefits	1,847		1,755		1,719		1,704		1,627		5		14
Occupancy and equipment	472		572		506		523		517		(17)		(9)
Marketing	501		563		283		273		491		(11)		2
Professional services	292		394		327		304		287		(26)		2
Communications and data processing	302		295		310		308		302		2		—
Amortization of intangibles	6		8		14		16		22		(25)		(73)
Other	320		422		389		642		483		(24)		(34)
Total non-interest expense	3,740		4,009		3,548		3,770		3,729		(7)		—
Income (loss) from continuing operations before income taxes	4,196		3,064		3,502		(1,460)		(1,903)		37		**
Income tax provision (benefit)	869		496		1,096		(543)		(563)		75		**
Income (loss) from continuing operations, net of tax	3,327		2,568		2,406		(917)		(1,340)		30		**
Loss from discontinued operations, net of tax	(2)		(2)		—		(1)		—		—		**
Net income (loss)	3,325		2,566		2,406		(918)		(1,340)		30		**
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(28)		(19)		(20)		(1)		(3)		47		**
Preferred stock dividends	(61)		(68)		(67)		(90)		(55)		(10)		11
Issuance cost for redeemed preferred stock⁽³⁾	—		(17)		—		—		(22)		**		**
Net income (loss) available to common stockholders	$	3,236	$	2,462	$	2,319	$	(1,009)	$	(1,420)	31		**


											2021 Q1 vs.
	2021		2020		2020		2020		2020		2020		2020
(Dollars in millions, except per share data and as noted)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Basic earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	7.06	$	5.36	$	5.07	$	(2.21)	$	(3.10)	32	%	**
Net income (loss) per basic common share	$	7.06	$	5.36	$	5.07	$	(2.21)	$	(3.10)	32		**
Diluted earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	7.03	$	5.35	$	5.06	$	(2.21)	$	(3.10)	31		**
Net income (loss) per diluted common share	$	7.03	$	5.35	$	5.06	$	(2.21)	$	(3.10)	31		**
Weighted-average common shares outstanding (in millions):
Basic common shares	458.6		459.1		457.8		456.7		457.6		—		—
Diluted common shares	460.1		460.2		458.5		456.7		457.6		—		1	%

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

											2021 Q1 vs.
	2021		2020		2020		2020		2020		2020		2020
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Assets:
Cash and cash equivalents:
Cash and due from banks	$	4,670	$	4,708	$	4,267	$	4,583	$	4,545	(1)	%	3	%
Interest-bearing deposits and other short-term investments	45,825		35,801		39,839		51,235		20,391		28		125
Total cash and cash equivalents	50,495		40,509		44,106		55,818		24,936		25		102
Restricted cash for securitization investors	1,779		262		895		740		364		**		**
Securities available for sale	99,165		100,445		99,853		87,859		81,423		(1)		22
Loans held for investment:
Unsecuritized loans held for investment	219,182		225,698		217,878		222,310		231,318		(3)		(5)
Loans held in consolidated trusts	23,949		25,926		30,345		29,202		31,672		(8)		(24)
Total loans held for investment	243,131		251,624		248,223		251,512		262,990		(3)		(8)
Allowance for credit losses	(14,017)		(15,564)		(16,129)		(16,832)		(14,073)		(10)		—
Net loans held for investment	229,114		236,060		232,094		234,680		248,917		(3)		(8)
Loans held for sale	2,896		2,710		3,433		711		1,056		7		174
Premises and equipment, net	4,277		4,287		4,333		4,324		4,336		—		(1)
Interest receivable	1,380		1,471		1,551		1,574		1,687		(6)		(18)
Goodwill	14,654		14,653		14,648		14,645		14,645		—		—
Other assets	21,415		21,205		20,970		20,945		19,514		1		10
Total assets	$	425,175	$	421,602	$	421,883	$	421,296	$	396,878	1		7

											2021 Q1 vs.
	2021		2020		2020		2020		2020		2020		2020
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Liabilities:
Interest payable	$	288	$	352	$	332	$	380	$	359	(18)	%	(20)	%
Deposits:
Non-interest-bearing deposits	34,003		31,142		29,633		29,055		24,547		9		39
Interest-bearing deposits	276,325		274,300		276,092		275,183		245,142		1		13
Total deposits	310,328		305,442		305,725		304,238		269,689		2		15
Securitized debt obligations	12,071		12,414		13,566		15,761		17,141		(3)		(30)
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	842		668		702		573		399		26		111
Senior and subordinated notes	25,467		27,382		28,448		28,481		32,049		(7)		(21)
Other borrowings	70		75		79		85		6,092		(7)		(99)
Total other debt	26,379		28,125		29,229		29,139		38,540		(6)		(32)
Other liabilities	14,921		15,065		14,607		15,733		14,319		(1)		4
Total liabilities	363,987