Capital One Reports Second Quarter 2022 Net Income of $2.0 billion, or $4.96 per share

MCLEAN, Va., July 21, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2022 of $2.0 billion, or $4.96 per diluted common share, compared with net income of $2.4 billion, or $5.62 per diluted common share in the first quarter of 2022, and with net income of $3.5 billion, or $7.62 per diluted common share in the second quarter of 2021.

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"We continued to drive attractive and resilient growth in the second quarter, and we're staying focused on the most resilient businesses and opportunities," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "The choices we're making today put us in a strong position to continue to deliver long-term value as the sweeping digital transformation of banking continues."

All comparisons below are for the second quarter of 2022 compared with the first quarter of 2022 unless otherwise noted.

Second Quarter 2022 Income Statement Summary:

  • Total net revenue increased 1 percent to $8.2 billion.
  • Total non-interest expense increased 1 percent to $4.6 billion:
    • 9 percent increase in marketing.
    • 1 percent decrease in operating expenses.
  • Pre-provision earnings increased 1 percent to $3.6 billion.(1)
  • Provision for credit losses increased $408 million to $1.1 billion:
    • Net charge-offs of $845 million.
    • $200 million loan reserve build.
  • Net interest margin of 6.54 percent, an increase of 5 basis points.
  • Efficiency ratio of 55.67 percent.
  • Operating efficiency ratio of 43.49 percent.

Second Quarter 2022 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.1 percent at June 30, 2022.
  • Period-end loans held for investment in the quarter increased $15.9 billion, or 6 percent, to $296.4 billion.
    • Credit Card period-end loans increased $6.9 billion, or 6 percent, to $120.9 billion.
      • Domestic Card period-end loans increased $7.0 billion, or 6 percent, to $115.0 billion.
    • Consumer Banking period-end loans increased $1.2 billion, or 1 percent, to $81.5 billion.
      • Auto period-end loans increased $1.3 billion, or 2 percent, to $79.9 billion.
    • Commercial Banking period-end loans increased $7.8 billion, or 9 percent, to $94.0 billion.
  • Average loans held for investment in the quarter increased $10.8 billion, or 4 percent, to $286.1 billion.
    • Credit Card average loans increased $4.4 billion, or 4 percent, to $115.8 billion.
      • Domestic Card average loans increased $4.4 billion, or 4 percent, to $110.0 billion.
    • Consumer Banking average loans increased $2.3 billion, or 3 percent, to $81.0 billion.
      • Auto average loans increased $2.4 billion, or 3 percent, to $79.3 billion.
    • Commercial Banking average loans increased $4.1 billion, or 5 percent, to $89.3 billion.
  • Period-end total deposits decreased $5.5 billion, or 2 percent, to $307.9 billion, while average deposits decreased $3.6 billion, or 1 percent, to $306.0 billion.
  • Interest-bearing deposits rate paid increased 12 basis points to 0.44 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 July 21, 2022 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through August 4, 2022 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2021.

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 $307.9 billion in deposits and $440.3 billion in total assets as of June 30, 2022. 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) 

 Second Quarter 2022 

 Table of Contents 

 


 Capital One Financial Corporation Consolidated Results 

 Page 



 Table 1: 

 Financial Summary—Consolidated 

1





 Table 2: 

 Selected Metrics—Consolidated 

3





 Table 3: 

 Consolidated Statements of Income 

4





 Table 4: 

 Consolidated Balance Sheets 

6





 Table 5: 

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

8





 Table 6: 

 Average Balances, Net Interest Income and Net Interest Margin 

9





 Table 7: 

 Loan Information and Performance Statistics 

10





 Table 8: 

 Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity 

12




 Business Segment Results 



 Table 9: 

 Financial Summary—Business Segment Results 

13





 Table 10: 

 Financial & Statistical Summary—Credit Card Business 

14





 Table 11: 

 Financial & Statistical Summary—Consumer Banking Business 

16





 Table 12: 

 Financial & Statistical Summary—Commercial Banking Business 

17





 Table 13: 

 Financial & Statistical Summary—Other and Total 

18




 Other 



 Table 14: 

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

19





 Table 15: 

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

20

__________

 (1)  

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2022 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 













 2022 Q2 vs 

 Six Months Ended June 30, 

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

 2022 

 Q2 

 2022 

 Q1 

 2021 

 Q4 

 2021 

 Q3 

 2021 

 Q2 

 2022 

 Q1 

 2021 

 Q2 

2022

2021

 2022 vs 

 2021 





 Income Statement 

























Net interest income

$      6,517

$      6,397

$      6,450

$      6,156

$      5,743

2 %

13 %

$    12,914

$    11,565

12 %





Non-interest income

1,715

1,776

1,668

1,674

1,631

(3)

5

3,491

2,922

19





Total net revenue(1)

8,232

8,173

8,118

7,830

7,374

1

12

16,405

14,487

13





Provision (benefit) for credit losses

1,085

677

381

(342)

(1,160)

60

**

1,762

(1,983)

**





Non-interest expense:

























Marketing

1,003

918

999

751

620

9

62

1,921

1,121

71





Operating expense

3,580

3,633

3,679

3,435

3,346

(1)

7

7,213

6,585

10





Total non-interest expense

4,583

4,551

4,678

4,186

3,966

1

16

9,134

7,706

19





Income from continuing operations before income taxes

2,564

2,945

3,059

3,986

4,568

(13)

(44)

5,509

8,764

(37)





Income tax provision

533

542

633

882

1,031

(2)

(48)

1,075

1,900

(43)





Income from continuing operations, net of tax

2,031

2,403

2,426

3,104

3,537

(15)

(43)

4,434

6,864

(35)





Loss from discontinued operations, net of tax

—

—

(1)

—

(1)

—

**

—

(3)

**





Net income

2,031

2,403

2,425

3,104

3,536

(15)

(43)

4,434

6,861

(35)





Dividends and undistributed earnings allocated to participating securities(2)

(25)

(28)

(21)

(26)

(30)

(11)

(17)

(53)

(58)

(9)





Preferred stock dividends

(57)

(57)

(74)

(79)

(60)

—

(5)

(114)

(121)

(6)





Issuance cost for redeemed preferred stock(3)

—

—

(34)

(12)

—

—

—

—

—

—





Net income available to common stockholders

$      1,949

$      2,318

$      2,296

$      2,987

$      3,446

(16)

(43)

$      4,267

$      6,682

(36)





 Common Share Statistics 

























 Basic earnings per common share:(2) 

























Net income from continuing operations

$       4.98

$       5.65

$       5.43

$       6.81

$       7.65

(12) %

(35) %

$      10.65

$      14.70

(28) %





Net income per basic common share

$       4.98

$       5.65

$       5.43

$       6.81

$       7.65

(12)

(35)

$      10.65

$      14.70

(28)





 Diluted earnings per common share:(2) 

























Net income from continuing operations

$       4.96

$       5.62

$       5.41

$       6.78

$       7.62

(12) %

(35) %

$      10.61

$      14.65

(28) %





Net income per diluted common share

$       4.96

$       5.62

$       5.41

$       6.78

$       7.62

(12)

(35)

$      10.61

$      14.65

(28)





 Weighted-average common shares outstanding (in millions): 

























Basic

391.2

410.4

422.5

438.8

450.6

(5) %

(13) %

400.8

454.6

(12) %





Diluted

392.6

412.2

424.3

440.5

452.3

(5)

(13)

402.3

456.2

(12)





Common shares outstanding (period-end, in millions)

383.8

399.0

413.9

430.4

446.1

(4)

(14)

383.8

446.1

(14)





Dividends declared and paid per common share

$       0.60

$       0.60

$       0.60

$       1.20

$       0.40

—

50

$        1.20

$        0.80

50





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

87.84

91.77

99.74

99.60

97.20

(4)

(10)

87.84

97.20

(10)































 2022 Q2 vs 

 Six Months Ended June 30, 





 (Dollars in millions) 

 2022 

 Q2 

 2022 

 Q1 

 2021 

 Q4 

 2021 

 Q3 

 2021 

 Q2 

 2022 

 Q1 

 2021 

 Q2 

2022

2021

 2022 vs 

 2021 





 Balance Sheet (Period-End) 

























Loans held for investment

$  296,384

$  280,466

$  277,340

$  261,390

$  249,597

6 %

19 %

$  296,384

$  249,597

19 %





Interest-earning assets

406,565

398,241

397,341

387,208

387,295

2

5

406,565

387,295

5





Total assets

440,288

434,195

432,381

425,377

423,420

1

4

440,288

423,420

4





Interest-bearing deposits

270,881

275,648

272,937

269,134

271,314

(2)

—

270,881

271,314

—





Total deposits

307,885

313,429

310,980

305,938

306,308

(2)

1

307,885

306,308

1





Borrowings

58,938

45,358

43,086

37,501

36,343

30

62

58,938

36,343

62





Common equity

48,564

51,499

56,184

57,632

58,136

(6)

(16)

48,564

58,136

(16)





Total stockholders' equity

53,410

56,345

61,029

63,544

64,624

(5)

(17)

53,410

64,624

(17)





 Balance Sheet (Average Balances) 

























Loans held for investment

$  286,110

$  275,342

$  267,159

$  253,101

$  246,463

4 %

16 %

$  280,756

$  245,207

14 %





Interest-earning assets

398,934

394,082

390,868

387,766

390,129

1

2

396,521

389,355

2





Total assets

435,327

430,372

427,845

424,506

424,099

1

3

432,806

422,959

2





Interest-bearing deposits

268,104

271,823

269,951

269,278

273,476

(1)

(2)

269,953

273,417

(1)





Total deposits

305,954

309,597

307,272

305,035

308,217

(1)

(1)

307,765

306,645

—





Borrowings

53,208

42,277

39,943

37,464

37,054

26

44

47,773

38,475

24





Common equity

49,319

54,591

56,946

58,230

56,885

(10)

(13)

51,940

56,333

(8)





Total stockholders' equity

54,165

59,437

62,498

64,682

62,376

(9)

(13)

56,786

61,504

(8)





 

 CAPITAL ONE FINANCIAL CORPORATION (COF) 

 Table 2: Selected Metrics—Consolidated 













 2022 Q2 vs 

 Six Months Ended June 30, 

 (Dollars in millions, except as noted) 

 2022 

 Q2 

 2022 

 Q1 

 2021 

 Q4 

 2021 

 Q3 

 2021 

 Q2 

 2022 

 Q1 

 2021 

 Q2 

2022

2021

 2022 vs 

 2021 

 Performance Metrics 



















Net interest income growth (period over period)

2 %

(1) %

5 %

7 %

(1) %

**

**

12 %

1 %

**

Non-interest income growth (period over period)

(3)

6

—

3

26

**

**

19

26

**

Total net revenue growth (period over period)

1

1

4

6

4

**

**

13

5

**

Total net revenue margin(5)

8.25

8.30

8.31

8.08

7.56

(5) bps

69 bps

8.27

7.44

83 bps

Net interest margin(6)

6.54

6.49

6.60

6.35

5.89

5

65

6.51

5.94

57

Return on average assets

1.87

2.23

2.27

2.92

3.34

(36)

(147)

2.05

3.25

(120)

Return on average tangible assets(7)

1.93

2.31

2.35

3.03

3.46

(38)

(153)

2.12

3.36

(124)

Return on average common equity(8)

15.81

16.98

16.13

20.52

24.24

(117)

(8) %

16.43

23.73

(7) %

Return on average tangible common equity(9)

22.63

23.36

21.82

27.50

32.75

(73)

(10)

23.03

32.19

(9)

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

6.41

6.61

7.00

6.62

6.44

(20)

(3) bps

6.51

6.29

22 bps

Efficiency ratio(10)

55.67

55.68

57.63

53.46

53.78

(1)

189

55.68

53.19

249

Operating efficiency ratio(11)

43.49

44.45

45.32

43.87

45.38

(96)

(189)

43.97

45.45

(148)

Effective income tax rate for continuing operations


20.8

18.4

20.7

22.1

22.6

240

(180)

19.5

21.7

(220)

Employees (period-end, in thousands)

53.6

51.5

50.8

50.8

52.0

4 %

3 %

53.6

52.0

3 %

 Credit Quality Metrics 



















Allowance for credit losses

$  11,491

$   11,308

$   11,430

$   11,573

$   12,346

2 %

(7) %

$  11,491

$   12,346

(7) %

Allowance coverage ratio

3.88 %

4.03 %

4.12 %

4.43 %

4.95 %

(15) bps

(107) bps

3.88 %

4.95 %

(107) bps

Net charge-offs

$       845

$        767

$        527

$        426

$       541

10 %

56 %

$    1,612

$     1,281

26 %

Net charge-off rate(12)

1.18 %

1.11 %

0.79 %

0.67 %

0.88 %

7 bps

30 bps

1.15 %

1.04 %

11 bps

30+ day performing delinquency rate

2.36

2.08

2.25

1.97

1.75

28

61

2.36

1.75

61

30+ day delinquency rate

2.54

2.21

2.41

2.13

1.89

33

65

2.54

1.89

65

 Capital Ratios(13) 



















Common equity Tier 1 capital

12.1 %

12.7 %

13.1 %

13.8 %

14.5 %

(60) bps

(240) bps

12.1 %

14.5 %

(240) bps

Tier 1 capital

13.5

14.1

14.5

15.7

16.6

(60)

(310)

13.5

16.6

(310)

Total capital

15.7

16.4

16.9

18.2

18.8

(70)

(310)

15.7

18.8

(310)

Tier 1 leverage

11.1

11.3

11.6

12.2

12.4

(20)

(130)

11.1

12.4

(130)

Tangible common equity ("TCE")(14)

7.9

8.7

9.9

10.4

10.6

(80)

(270)

7.9

10.6

(270)

 

 CAPITAL ONE FINANCIAL CORPORATION (COF) 

 Table 3: Consolidated Statements of Income 













 2022 Q2 vs 

 Six Months Ended June 30, 

 (Dollars in millions, except as noted) 

 2022 

 Q2 

 2022 

 Q1 

 2021 

 Q4 

 2021 

 Q3 

 2021 

 Q2 

 2022 

 Q1 

 2021 

 Q2 

2022

2021

 2022 vs 

 2021 

 Interest income: 



















Loans, including loans held for sale

$      6,605

$      6,367

$      6,451

$      6,205

$      5,753

4 %

15 %

$   12,972

$   11,607

12 %

Investment securities

435

402

368

317

370

8

18

837

761

10

Other

55

15

12

16

16

**

**

70

32

119

Total interest income

7,095

6,784

6,831

6,538

6,139

5

16

13,879

12,400

12

 Interest expense: 



















Deposits

293

218

222

228

237

34

24

511

506

1

Securitized debt obligations

65

29

30

29

28

124

132

94

60

57

Senior and subordinated notes

194

131

121

116

122

48

59

325

251

29

Other borrowings

26

9

8

9

9

189

189

35

18

94

Total interest expense

578

387

381

382

396

49

46

965

835

16

Net interest income

6,517

6,397

6,450

6,156

5,743

2

13

12,914

11,565

12

Provision (benefit) for credit losses

1,085

677

381

(342)

(1,160)

60

**

1,762

(1,983)

**

Net interest income after provision for credit losses

5,432

5,720

6,069

6,498

6,903

(5)

(21)

11,152

13,548

(18)

 Non-interest income: 



















Interchange fees, net

1,201

1,033

1,005

1,022

1,016

16

18

2,234

1,833

22

Service charges and other customer-related fees

415

400

435

407

384

4

8

815

736

11

Other

99

343

228

245

231

(71)

(57)

442

353

25

Total non-interest income

1,715

1,776

1,668

1,674

1,631

(3)

5

3,491

2,922

19

 Non-interest expense: 



















Salaries and associate benefits

1,946

2,026

1,941

1,852

1,781

(4)

9

3,972

3,628

9

Occupancy and equipment

481

513

527

481

523

(6)

(8)

994

995

—

Marketing

1,003

918

999

751

620

9

62

1,921

1,121

71

Professional services

458

397

449

358

341

15

34

855

633

35

Communications and data processing

339

339

326

319

315

—

8

678

617

10

Amortization of intangibles

14

14

13

5

5

—

180

28

11

155

Other

342

344

423

420

381

(1)

(10)

686

701

(2)

Total non-interest expense

4,583

4,551

4,678

4,186

3,966

1

16

9,134

7,706

19

Income from continuing operations before income taxes

2,564

2,945

3,059

3,986

4,568

(13)

(44)

5,509

8,764

(37)

Income tax provision

533

542

633

882

1,031

(2)

(48)

1,075

1,900

(43)

Income from continuing operations, net of tax

2,031

2,403

2,426

3,104

3,537

(15)

(43)

4,434

6,864

(35)

Loss from discontinued operations, net of tax

—

—

(1)

—

(1)

—

**

—

(3)

**

 Net income 

2,031

2,403

2,425

3,104

3,536

(15)

(43)

4,434

6,861

(35)

Dividends and undistributed earnings allocated to participating securities(2)

(25)

(28)

(21)

(26)

(30)

(11)

(17)

(53)

(58)

(9)

Preferred stock dividends

(57)

(57)

(74)

(79)

(60)

—

(5)

(114)

(121)

(6)

Issuance cost for redeemed preferred stock(3)

—

—

(34)

(12)

—

—

—

—

—

—

 Net income available to common stockholders 

$      1,949

$      2,318

$      2,296

$      2,987

$      3,446

(16)

(43)

$    4,267

$     6,682

(36)