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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.

Capital One Financial (PRNewsfoto/Capital One Financial Corporati)

"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


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


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


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