UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________
FORM 8-K
_____________________________________________
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
January 22, 2015
Date of Report (Date of earliest event reported)
_____________________________________________
CAPITAL ONE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
_____________________________________________
Commission File No. 1-13300
Delaware | 54-1719854 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. 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)
_____________________________________________
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):
¬ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¬ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¬ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¬ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On January 22, 2015, Capital One Financial Corporation (the “Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 2014. 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 January 22, 2015 – Fourth Quarter 2014 | |
99.2 | Financial Supplement – Fourth Quarter 2014 | |
Earnings Conference Call Webcast Information.
The Company will hold an earnings conference call on January 22, 2015 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 January 31, 2015 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: January 22, 2015 | By: | /s/ Stephen S. Crawford |
Stephen S. Crawford | ||
Chief Financial Officer | ||
Exhibit 99.1
News Release
Contacts: | |||
Investor Relations | Media Relations | ||
Jeff Norris | Danielle Dietz | Julie Rakes | Tatiana Stead |
703.720.2455 | 703.720.2455 | 804.284.5800 | 703.720.2352 |
FOR IMMEDIATE RELEASE: January 22, 2015
Capital One Reports Fourth Quarter 2014 Net Income of $999 million,
or $1.73 per share
or $1.73 per share
McLean, Va. (January 22, 2015) – Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2014 of $999 million, or $1.73 per diluted common share, compared to the third quarter of 2014 with net income of $1.1 billion, or $1.86 per diluted common share, and the fourth quarter of 2013 with net income of $852 million, or $1.43 per diluted common share.
“2014 was a strong year for Capital One. We returned to growth in our Domestic Card business, delivered $10.1 billion in pre-provision earnings, and returned significant capital to our shareholders. We’re poised to build on the momentum in 2015,” said Richard D. Fairbank, Chairman and Chief Executive Officer. “Our strategic priorities for 2015 have not changed, and we remain focused on the levers to create value and sustain strong performance for our shareholders.”
All comparisons below are for the full year of 2013 compared to the full year of 2014 unless otherwise noted.
2014 Full Year Income Summary:
• | Total net revenue remained flat at $22.3 billion. |
• | Total non-interest expense decreased 1 percent to $12.2 billion. |
• | Pre-provision earnings increased 1 percent to $10.1 billion. |
• | Provision for credit losses increased 3 percent to $3.5 billion. |
All comparisons below are for the fourth quarter of 2014 compared to the third quarter of 2014 unless otherwise noted.
Fourth Quarter 2014 Income Summary:
• | Total net revenue increased 3 percent to $5.8 billion. |
• | Total non-interest expense increased 10 percent to $3.3 billion: |
Capital One Fourth Quarter 2014 Earnings
Page 2
◦ | 30 percent increase in marketing |
◦ | 8 percent increase in operating expense |
• | Pre-provision earnings decreased 5 percent to $2.5 billion. |
• | Provision for credit losses increased 12 percent to $1.1 billion. |
• | Mortgage representation & warranty benefit of $41 million ($26 million net of tax) in discontinued operations. |
Fourth Quarter 2014 Balance Sheet Summary:
• | Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.4 percent at December 31, 2014. |
• | Net interest margin of 6.81 percent, up 12 basis points. |
• | Period-end loans held for investment in the quarter increased $6.7 billion, or 3 percent, to $208.3 billion. |
• | Domestic Card period-end loans increased $4.6 billion, or 6 percent, to $77.7 billion. |
• | Commercial Banking period-end loans increased $1.1 billion, or 2 percent, to $50.9 billion. |
• | Consumer Banking period-end loans increased $378 million, or 1 percent, to $71.4 billion: |
• | Auto period-end loans increased $1.6 billion, or 4 percent, to $37.8 billion. |
• | Home loans period-end loans decreased $1.2 billion, or 4 percent, to $30.0 billion, driven by run-off of acquired portfolios. |
• | Average loans held for investment in the quarter increased $4.0 billion, or 2 percent, to $203.4 billion. |
• | Domestic Card average loans increased $2.2 billion, or 3 percent, to $74.0 billion. |
• | Commercial Banking average loans increased $1.6 billion, or 3 percent, to $50.3 billion. |
• | Consumer Banking average loans increased $206 million, or less than 1 percent, to $71.3 billion: |
• | Auto average loans increased $1.5 billion, or 4 percent, to $37.1 billion. |
• | Home loans average loans decreased by $1.3 billion, or 4 percent, to $30.6 billion, driven by run-off of acquired portfolios. |
• | Period-end total deposits increased $1.3 billion, or less than 1 percent, to $205.5 billion, while average deposits increased $156 million to $205.4 billion. |
• | Interest-bearing deposit rate remained flat at 0.60 percent. |
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on January 22, 2015, 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 January 31, 2015 at 5:00 PM, Eastern Time.
Forward-Looking Statements
Certain statements in this release are 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
Capital One Fourth Quarter 2014 Earnings
Page 3
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, 2013.
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 $205.5 billion in deposits and $308.9 billion in total assets as of December 31, 2014. 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, New Jersey, Texas, Louisiana, Maryland, Virginia 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
Fourth Quarter 2014(1)(2)
Table of Contents
Capital One Financial Corporation Consolidated Results | Page | ||
Table 1: | Financial Summary—Consolidated | ||
Table 2: | Selected Metrics—Consolidated | ||
Table 3: | Consolidated Statements of Income | ||
Table 4: | Consolidated Balance Sheets | ||
Table 5: | Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1—4) | ||
Table 6: | Average Balances, Net Interest Income and Net Interest Margin | ||
Table 7: | Loan Information and Performance Statistics | ||
Business Segments Detail | |||
Table 8: | Financial Summary—Business Segments | ||
Table 9: | Financial & Statistical Summary—Credit Card Business | ||
Table 10: | Financial & Statistical Summary—Consumer Banking Business | ||
Table 11: | Financial & Statistical Summary—Commercial Banking Business | ||
Table 12: | Financial & Statistical Summary—Other and Total | ||
Table 13: | Notes to Loan and Business Segments Disclosures (Tables 7—12) | ||
Other | |||
Table 14: | Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures | ||
__________
(1) | The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Annual Report on Form 10-K for the period ended December 31, 2014 once it is filed with the Securities and Exchange Commission. |
(2) | We adopted ASU 2014-01 “Accounting for Investments in Qualified Affordable Housing Projects” as of January 1, 2014. Prior period results and related metrics have been recast to conform to this presentation. |
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary—Consolidated(1)
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data and as noted) (unaudited) | 2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | |||||||||||||||||||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | ||||||||||||||||||||||||||||||
Earnings | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 4,656 | $ | 4,497 | $ | 4,315 | $ | 4,350 | $ | 4,423 | 4 | % | 5 | % | $ | 17,818 | $ | 18,106 | (2 | )% | |||||||||||||||||
Non-interest income(2) | 1,157 | 1,142 | 1,153 | 1,020 | 1,121 | 1 | 3 | 4,472 | 4,278 | 5 | |||||||||||||||||||||||||||
Total net revenue(3) | 5,813 | 5,639 | 5,468 | 5,370 | 5,544 | 3 | 5 | 22,290 | 22,384 | — | |||||||||||||||||||||||||||
Provision for credit losses | 1,109 | 993 | 704 | 735 | 957 | 12 | 16 | 3,541 | 3,453 | 3 | |||||||||||||||||||||||||||
Non-interest expense: | |||||||||||||||||||||||||||||||||||||
Marketing | 509 | 392 | 335 | 325 | 427 | 30 | 19 | 1,561 | 1,373 | 14 | |||||||||||||||||||||||||||
Amortization of intangibles | 123 | 130 | 136 | 143 | 166 | (5 | ) | (26 | ) | 532 | 671 | (21 | ) | ||||||||||||||||||||||||
Acquisition-related(4) | 10 | 13 | 18 | 23 | 60 | (23 | ) | (83 | ) | 64 | 193 | (67 | ) | ||||||||||||||||||||||||
Operating expenses | 2,642 | 2,450 | 2,490 | 2,441 | 2,582 | 8 | 2 | 10,023 | 10,116 | (1 | ) | ||||||||||||||||||||||||||
Total non-interest expense | 3,284 | 2,985 | 2,979 | 2,932 | 3,235 | 10 | 2 | 12,180 | 12,353 | (1 | ) | ||||||||||||||||||||||||||
Income from continuing operations before income taxes | 1,420 | 1,661 | 1,785 | 1,703 | 1,352 | (15 | ) | 5 | 6,569 | 6,578 | — | ||||||||||||||||||||||||||
Income tax provision | 450 | 536 | 581 | 579 | 477 | (16 | ) | (6 | ) | 2,146 | 2,224 | (4 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | 970 | 1,125 | 1,204 | 1,124 | 875 | (14 | ) | 11 | 4,423 | 4,354 | 2 | ||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax(2) | 29 | (44 | ) | (10 | ) | 30 | (23 | ) | ** | ** | 5 | (233 | ) | ** | |||||||||||||||||||||||
Net income | 999 | 1,081 | 1,194 | 1,154 | 852 | (8 | ) | 17 | 4,428 | 4,121 | 7 | ||||||||||||||||||||||||||
Dividends and undistributed earnings allocated to participating securities(5) | (4 | ) | (5 | ) | (4 | ) | (5 | ) | (4 | ) | (20 | ) | — | (18 | ) | (17 | ) | 6 | |||||||||||||||||||
Preferred stock dividends(5) | (21 | ) | (20 | ) | (13 | ) | (13 | ) | (13 | ) | 5 | 62 | (67 | ) | (53 | ) | 26 | ||||||||||||||||||||
Net income available to common stockholders | $ | 974 | $ | 1,056 | $ | 1,177 | $ | 1,136 | $ | 835 | (8 | ) | 17 | $ | 4,343 | $ | 4,051 | 7 | |||||||||||||||||||
Common Share Statistics | |||||||||||||||||||||||||||||||||||||
Basic earnings per common share:(5) | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 1.71 | $ | 1.97 | $ | 2.09 | $ | 1.94 | $ | 1.50 | (13 | )% | 14 | % | $ | 7.70 | $ | 7.39 | 4 | % | |||||||||||||||||
Income (loss) from discontinued operations | 0.05 | (0.08 | ) | (0.02 | ) | 0.05 | (0.04 | ) | ** | ** | 0.01 | (0.40 | ) | ** | |||||||||||||||||||||||
Net income per basic common share | $ | 1.76 | $ | 1.89 | $ | 2.07 | $ | 1.99 | $ | 1.46 | (7 | ) | 21 | $ | 7.71 | $ | 6.99 | 10 | |||||||||||||||||||
Diluted earnings per common share:(5) | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 1.68 | $ | 1.94 | $ | 2.06 | $ | 1.91 | $ | 1.46 | (13 | ) | 15 | $ | 7.58 | $ | 7.28 | 4 | |||||||||||||||||||
Income (loss) from discontinued operations | 0.05 | (0.08 | ) | (0.02 | ) | 0.05 | (0.03 | ) | ** | ** | 0.01 | (0.39 | ) | ** | |||||||||||||||||||||||
Net income per diluted common share | $ | 1.73 | $ | 1.86 | $ | 2.04 | $ | 1.96 | $ | 1.43 | (7 | ) | 21 | $ | 7.59 | $ | 6.89 | 10 | |||||||||||||||||||
Weighted-average common shares outstanding (in millions) for: | |||||||||||||||||||||||||||||||||||||
Basic common shares | 554.3 | 559.9 | 567.5 | 571.0 | 573.4 | (1 | ) | (3 | ) | 563.1 | 579.7 | (3 | ) | ||||||||||||||||||||||||
Diluted common shares | 561.8 | 567.9 | 577.6 | 580.3 | 582.6 | (1 | ) | (4 | ) | 571.9 | 587.6 | (3 | ) | ||||||||||||||||||||||||
Common shares outstanding (period end, in millions) | 553.4 | 558.5 | 561.8 | 572.9 | 572.7 | (1 | ) | (3 | ) | 553.4 | 572.7 | (3 | ) | ||||||||||||||||||||||||
Dividends per common share | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | — | — | $ | 1.20 | $ | 0.95 | 26 | ||||||||||||||||||||
Tangible book value per common share (period end)(6) | 50.32 | 48.72 | 47.90 | 45.88 | 43.64 | 3 | 15 | 50.32 | 43.64 | 15 | |||||||||||||||||||||||||||
1
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | 2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | |||||||||||||||||||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | ||||||||||||||||||||||||||||||
Balance Sheet (Period End) | |||||||||||||||||||||||||||||||||||||
Loans held for investment(7) | $ | 208,316 | $ | 201,592 | $ | 198,528 | $ | 192,941 | $ | 197,199 | 3 | % | 6 | % | $ | 208,316 | $ | 197,199 | 6 | % | |||||||||||||||||
Interest-earning assets | 277,849 | 270,001 | 266,720 | 259,422 | 265,170 | 3 | 5 | 277,849 | 265,170 | 5 | |||||||||||||||||||||||||||
Total assets | 308,854 | 300,202 | 298,317 | 290,500 | 296,933 | 3 | 4 | 308,854 | 296,933 | 4 | |||||||||||||||||||||||||||
Interest-bearing deposits | 180,467 | 178,876 | 180,970 | 184,214 | 181,880 | 1 | (1 | ) | 180,467 | 181,880 | (1 | ) | |||||||||||||||||||||||||
Total deposits | 205,548 | 204,264 | 205,890 | 208,324 | 204,523 | 1 | 1 | 205,548 | 204,523 | 1 | |||||||||||||||||||||||||||
Borrowings | 48,457 | 42,243 | 39,114 | 30,118 | 40,654 | 15 | 19 | 48,457 | 40,654 | 19 | |||||||||||||||||||||||||||
Common equity | 43,231 | 42,682 | 42,477 | 41,948 | 40,779 | 1 | 6 | 43,231 | 40,779 | 6 | |||||||||||||||||||||||||||
Total stockholders’ equity | 45,053 | 44,018 | 43,815 | 42,801 | 41,632 | 2 | 8 | 45,053 | 41,632 | 8 | |||||||||||||||||||||||||||
Balance Sheet (Average Balances) | |||||||||||||||||||||||||||||||||||||
Loans held for investment(7) | $ | 203,436 | $ | 199,422 | $ | 194,996 | $ | 193,722 | $ | 192,813 | 2 | % | 6 | % | $ | 197,925 | $ | 192,614 | 3 | % | |||||||||||||||||
Interest-earning assets | 273,436 | 268,890 | 263,570 | 262,659 | 262,957 | 2 | 4 | 267,174 | 266,423 | — | |||||||||||||||||||||||||||
Total assets | 304,711 | 299,523 | 294,744 | 294,275 | 294,040 | 2 | 4 | 298,300 | 297,264 | — | |||||||||||||||||||||||||||
Interest-bearing deposits | 179,401 | 179,928 | 182,053 | 184,183 | 184,206 | — | (3 | ) | 181,036 | 187,700 | (4 | ) | |||||||||||||||||||||||||
Total deposits | 205,355 | 205,199 | 206,315 | 205,842 | 205,706 | — | — | 205,675 | 209,045 | (2 | ) | ||||||||||||||||||||||||||
Borrowings | 43,479 | 40,314 | 35,658 | 35,978 | 36,463 | 8 | 19 | 38,882 | 37,807 | 3 | |||||||||||||||||||||||||||
Common equity | 43,895 | 43,489 | 42,797 | 42,006 | 41,502 | 1 | 6 | 43,055 | 40,629 | 6 | |||||||||||||||||||||||||||
Total stockholders’ equity | 45,576 | 44,827 | 43,767 | 42,859 | 42,355 | 2 | 8 | 44,268 | 41,482 | 7 | |||||||||||||||||||||||||||
2
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated(1)
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | 2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | |||||||||||||||||||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | ||||||||||||||||||||||||||||||
Performance Metrics | |||||||||||||||||||||||||||||||||||||
Net interest income growth (quarter over quarter/ year over year) | 4 | % | 4 | % | (1 | )% | (2 | )% | (3 | )% | ** | ** | (2 | )% | 9 | % | ** | ||||||||||||||||||||
Non-interest income growth (quarter over quarter/ year over year) | 1 | (1 | ) | 13 | (9 | ) | 3 | ** | ** | 5 | (11 | ) | ** | ||||||||||||||||||||||||
Total net revenue growth (quarter over quarter/ year over year) | 3 | 3 | 2 | (3 | ) | (2 | ) | ** | ** | 0 | 5 | ** | |||||||||||||||||||||||||
Total net revenue margin(8) | 8.50 | 8.39 | 8.30 | 8.18 | 8.43 | 11 | bps | 7 | bps | 8.34 | 8.40 | (6 | ) bps | ||||||||||||||||||||||||
Net interest margin(9) | 6.81 | 6.69 | 6.55 | 6.62 | 6.73 | 12 | 8 | 6.67 | 6.80 | (13 | ) | ||||||||||||||||||||||||||
Return on average assets | 1.27 | 1.50 | 1.63 | 1.53 | 1.19 | (23 | ) | 8 | 1.48 | 1.46 | 2 | ||||||||||||||||||||||||||
Return on average tangible assets(10) | 1.34 | 1.58 | 1.73 | 1.61 | 1.26 | (24 | ) | 8 | 1.56 | 1.55 | 1 | ||||||||||||||||||||||||||
Return on average common equity(11) | 8.61 | 10.12 | 11.09 | 10.53 | 8.27 | (151 | ) | 34 | 10.08 | 10.54 | (46 | ) | |||||||||||||||||||||||||
Return on average tangible common equity(12) | 13.28 | 15.73 | 17.47 | 16.83 | 13.38 | (245 | ) | (10 | ) | 15.79 | 17.35 | (156 | ) | ||||||||||||||||||||||||
Non-interest expense as a % of average loans held for investment | 6.46 | 5.99 | 6.11 | 6.05 | 6.71 | 47 | (25 | ) | 6.15 | 6.41 | (26 | ) | |||||||||||||||||||||||||
Efficiency ratio(13) | 56.49 | 52.93 | 54.48 | 54.60 | 58.35 | 356 | (186 | ) | 54.64 | 55.19 | (55 | ) | |||||||||||||||||||||||||
Effective income tax rate for continuing operations | 31.7 | 32.3 | 32.5 | 34.0 | 35.3 | (60 | ) | (360 | ) | 32.7 | 33.8 | (110 | ) | ||||||||||||||||||||||||
Employees (in thousands), period end(14) | 46.0 | 44.9 | 44.6 | 44.9 | 45.4 | 2 | % | 1 | % | 46.0 | 45.4 | 1 | % | ||||||||||||||||||||||||
Credit Quality Metrics(7) | |||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses | $ | 4,383 | $ | 4,212 | $ | 3,998 | $ | 4,098 | $ | 4,315 | 4 | % | 2 | % | $ | 4,383 | $ | 4,315 | 2 | % | |||||||||||||||||
Allowance as a % of loans held for investment | 2.10 | % | 2.09 | % | 2.01 | % | 2.12 | % | 2.19 | % | 1 | bps | (9 | ) bps | 2.10 | % | 2.19 | % | (9 | ) bps | |||||||||||||||||
Allowance as a % of loans held for investment (excluding acquired loans) | 2.36 | 2.37 | 2.30 | 2.45 | 2.54 | (1 | ) | (18 | ) | 2.36 | 2.54 | (18 | ) | ||||||||||||||||||||||||
Net charge-offs | $ | 915 | $ | 756 | $ | 812 | $ | 931 | $ | 969 | 21 | % | (6 | ) % | $ | 3,414 | $ | 3,934 | (13 | ) % | |||||||||||||||||
Net charge-off rate(15) | 1.80 | % | 1.52 | % | 1.67 | % | 1.92 | % | 2.01 | % | 28 | bps | (21 | ) bps | 1.72 | % | 2.04 | % | (32 | ) bps | |||||||||||||||||
Net charge-off rate (excluding acquired loans)(15) | 2.04 | 1.73 | 1.93 | 2.24 | 2.37 | 31 | (33 | ) | 1.98 | 2.45 | (47 | ) | |||||||||||||||||||||||||
30+ day performing delinquency rate | 2.62 | 2.46 | 2.24 | 2.22 | 2.63 | 16 | (1 | ) | 2.62 | 2.63 | (1 | ) | |||||||||||||||||||||||||
30+ day performing delinquency rate (excluding acquired loans) | 2.95 | 2.81 | 2.58 | 2.59 | 3.08 | 14 | (13 | ) | 2.95 | 3.08 | (13 | ) | |||||||||||||||||||||||||
30+ day delinquency rate | 2.91 | 2.76 | 2.53 | 2.51 | 2.96 | 15 | (5 | ) | 2.91 | 2.96 | (5 | ) | |||||||||||||||||||||||||
30+ day delinquency rate (excluding acquired loans) | 3.28 | 3.14 | 2.91 | 2.93 | 3.46 | 14 | (18 | ) | 3.28 | 3.46 | (18 | ) | |||||||||||||||||||||||||
Capital Ratios(16) | |||||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio | 12.4 | % | 12.7 | % | 12.7 | % | 13.0 | % | N/A | (30 | ) bps | N/A | 12.4 | % | N/A | N/A | |||||||||||||||||||||
Tier 1 common ratio | N/A | N/A | N/A | N/A | 12.2 | % | N/A | N/A | N/A | 12.2 | % | N/A | |||||||||||||||||||||||||
Tier 1 risk-based capital ratio | 13.2 | % | 13.3 | % | 13.3 | % | 13.4 | % | 12.6 | (10 | ) bps | 60 | bps | 13.2 | % | 12.6 | 60 | bps | |||||||||||||||||||
Total risk-based capital ratio | 15.1 | 15.2 | 15.4 | 15.4 | 14.7 | (10 | ) | 40 | 15.1 | 14.7 | 40 | ||||||||||||||||||||||||||
Tier 1 leverage ratio | 10.8 | 10.6 | 10.7 | 10.4 | 10.1 | 20 | 70 | 10.8 | 10.1 | 70 | |||||||||||||||||||||||||||
Tangible common equity (“TCE”) ratio(17) | 9.5 | 9.6 | 9.5 | 9.6 | 8.9 | (10 | ) | 60 | 9.5 | 8.9 | 60 | ||||||||||||||||||||||||||
3
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income(1)
Three Months Ended | 2014 Q4 vs. | Year Ended | 2014 | ||||||||||||||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | ||||||||||||||||||||||
(Dollars in millions, except per share data and as noted) (unaudited) | Q4 | Q3 | Q4 | Q3 | Q4 | 2013 | |||||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||||
Loans, including loans held for sale | $ | 4,613 | $ | 4,463 | $ | 4,398 | 3 | % | 5 | % | $ | 17,662 | $ | 18,222 | (3 | ) % | |||||||||||||
Investment securities | 405 | 398 | 414 | 2 | (2 | ) | 1,628 | 1,575 | 3 | ||||||||||||||||||||
Other | 27 | 26 | 27 | 4 | — | 107 | 101 | 6 | |||||||||||||||||||||
Total interest income | 5,045 | 4,887 | 4,839 | 3 | 4 | 19,397 | 19,898 | (3 | ) | ||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||||
Deposits | 269 | 271 | 288 | (1 | ) | (7 | ) | 1,088 | 1,241 | (12 | ) | ||||||||||||||||||
Securitized debt obligations | 36 | 32 | 40 | 13 | (10 | ) | 145 | 183 | (21 | ) | |||||||||||||||||||
Senior and subordinated notes | 73 | 71 | 75 | 3 | (3 | ) | 299 | 315 | (5 | ) | |||||||||||||||||||
Other borrowings | 11 | 16 | 13 | (31 | ) | (15 | ) | 47 | 53 | (11 | ) | ||||||||||||||||||
Total interest expense | 389 | 390 | 416 | — | (6 | ) | 1,579 | 1,792 | (12 | ) | |||||||||||||||||||
Net interest income | 4,656 | 4,497 | 4,423 | 4 | 5 | 17,818 | 18,106 | (2 | ) | ||||||||||||||||||||
Provision for credit losses | 1,109 | 993 | 957 | 12 | 16 | 3,541 | 3,453 | 3 | |||||||||||||||||||||
Net interest income after provision for credit losses | 3,547 | 3,504 | 3,466 | 1 | 2 | 14,277 | 14,653 | (3 | ) | ||||||||||||||||||||
Non-interest income:(2) | |||||||||||||||||||||||||||||
Service charges and other customer-related fees | 462 | 471 | 504 | (2 | ) | (8 | ) | 1,867 | 2,118 | (12 | ) | ||||||||||||||||||
Interchange fees, net | 523 | 523 | 489 | — | 7 | 2,021 | 1,896 | 7 | |||||||||||||||||||||
Net other-than-temporary impairment recognized in earnings | (9 | ) | (9 | ) | (1 | ) | — | ** | (24 | ) | (41 | ) | (41 | ) | |||||||||||||||
Other | 181 | 157 | 129 | 15 | 40 | 608 | 305 | 99 | |||||||||||||||||||||
Total non-interest income | 1,157 | 1,142 | 1,121 | 1 | 3 | 4,472 | 4,278 | 5 | |||||||||||||||||||||
Non-interest expense: | |||||||||||||||||||||||||||||
Salaries and associate benefits | 1,179 | 1,128 | 1,115 | 5 | 6 | 4,593 | 4,480 | 3 | |||||||||||||||||||||
Occupancy and equipment | 474 | 419 | 437 | 13 | 8 | 1,745 | 1,541 | 13 | |||||||||||||||||||||
Marketing | 509 | 392 | 427 | 30 | 19 | 1,561 | 1,373 | 14 | |||||||||||||||||||||
Professional services | 329 | 304 | 357 | 8 | (8 | ) | 1,216 | 1,347 | (10 | ) | |||||||||||||||||||
Communications and data processing | 203 | 196 | 220 | 4 | (8 | ) | 798 | 897 | (11 | ) | |||||||||||||||||||
Amortization of intangibles | 123 | 130 | 166 | (5 | ) | (26 | ) | 532 | 671 | (21 | ) | ||||||||||||||||||
Other | 467 | 416 | 513 | 12 | (9 | ) | 1,735 | 2,044 | (15 | ) | |||||||||||||||||||
Total non-interest expense | 3,284 | 2,985 | 3,235 | 10 | 2 | 12,180 | 12,353 | (1 | ) | ||||||||||||||||||||
Income from continuing operations before income taxes | 1,420 | 1,661 | 1,352 | (15 | ) | 5 | 6,569 | 6,578 | — | ||||||||||||||||||||
Income tax provision | 450 | 536 | 477 | (16 | ) | (6 | ) | 2,146 | 2,224 | (4 | ) | ||||||||||||||||||
Income from continuing operations, net of tax | 970 | 1,125 | 875 | (14 | ) | 11 | 4,423 | 4,354 | 2 | ||||||||||||||||||||
Income (loss) from discontinued operations, net of tax(2) | 29 | (44 | ) | (23 | ) | ** | ** | 5 | (233 | ) | ** | ||||||||||||||||||
Net income | 999 | 1,081 | 852 | (8 | ) | 17 | 4,428 | 4,121 | 7 | ||||||||||||||||||||
Dividends and undistributed earnings allocated to participating securities(5) | (4 | ) | (5 | ) | (4 | ) | (20 | ) | — | (18 | ) | (17 | ) | 6 | |||||||||||||||
Preferred stock dividends(5) | (21 | ) | (20 | ) | (13 | ) | 5 | 62 | (67 | ) | (53 | ) | 26 | ||||||||||||||||
Net income available to common stockholders | $ | 974 | $ | 1,056 | $ | 835 | (8 | ) | 17 | $ | 4,343 | $ | 4,051 | 7 | |||||||||||||||
4
Three Months Ended | 2014 Q4 vs. | Year Ended | 2014 | ||||||||||||||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | ||||||||||||||||||||||
(Dollars in millions, except per share data and as noted) (unaudited) | Q4 | Q3 | Q4 | Q3 | Q4 | 2013 | |||||||||||||||||||||||
Basic earnings per common share:(5) | |||||||||||||||||||||||||||||
Net income from continuing operations | $ | 1.71 | $ | 1.97 | $ | 1.50 | (13 | )% | 14 | % | $ | 7.70 | $ | 7.39 | 4 | % | |||||||||||||
Income (loss) from discontinued operations | 0.05 | (0.08 | ) | (0.04 | ) | ** | ** | 0.01 | (0.40 | ) | ** | ||||||||||||||||||
Net income per basic common share | $ | 1.76 | $ | 1.89 | $ | 1.46 | (7 | ) | 21 | $ | 7.71 | $ | 6.99 | 10 | |||||||||||||||
Diluted earnings per common share:(5) | |||||||||||||||||||||||||||||
Net income from continuing operations | $ | 1.68 | $ | 1.94 | $ | 1.46 | (13 | )% | 15 | % | $ | 7.58 | $ | 7.28 | 4 | % | |||||||||||||
Income (loss) from discontinued operations | 0.05 | (0.08 | ) | (0.03 | ) | ** | ** | 0.01 | (0.39 | ) | ** | ||||||||||||||||||
Net income per diluted common share | $ | 1.73 | $ | 1.86 | $ | 1.43 | (7 | ) | 21 | $ | 7.59 | $ | 6.89 | 10 | |||||||||||||||
Weighted average common shares outstanding (in millions): | |||||||||||||||||||||||||||||
Basic common shares | 554.3 | 559.9 | 573.4 | (1 | ) | (3 | ) | 563.1 | 579.7 | (3 | ) | ||||||||||||||||||
Diluted common shares | 561.8 | 567.9 | 582.6 | (1 | ) | (4 | ) | 571.9 | 587.6 | (3 | ) | ||||||||||||||||||
Dividends paid per common share | $ | 0.30 | $ | 0.30 | $ | 0.30 | — | — | $ | 1.20 | $ | 0.95 | 26 | ||||||||||||||||
5
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets(1)
December 31, 2014 vs. | ||||||||||||||||||
(Dollars in millions) (unaudited) | December 31, 2014 | September 30, 2014 | December 31, 2013 | September 30, 2014 | December 31, 2013 | |||||||||||||
Assets: | ||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||
Cash and due from banks | $ | 3,147 | $ | 2,652 | $ | 2,821 | 19 | % | 12 | % | ||||||||
Interest-bearing deposits with banks | 4,095 | 3,212 | 3,131 | 27 | 31 | |||||||||||||
Federal funds sold and securities purchased under agreements to resell | 0 | 284 | 339 | ** | ** | |||||||||||||
Total cash and cash equivalents | 7,242 | 6,148 | 6,291 | 18 | 15 | |||||||||||||
Restricted cash for securitization investors | 234 | 405 | 874 | (42 | ) | (73 | ) | |||||||||||
Securities available for sale, at fair value | 39,508 | 39,665 | 41,800 | — | (5 | ) | ||||||||||||
Securities held to maturity, at carrying value | 22,500 | 22,182 | 19,132 | 1 | 18 | |||||||||||||
Loans held for investment: | ||||||||||||||||||
Unsecuritized loans held for investment | 171,771 | 165,021 | 157,651 | 4 | 9 | |||||||||||||
Restricted loans for securitization investors | 36,545 | 36,571 | 39,548 | — | (8 | ) | ||||||||||||
Total loans held for investment | 208,316 | 201,592 | 197,199 | 3 | 6 | |||||||||||||
Allowance for loan and lease losses | (4,383 | ) | (4,212 | ) | (4,315 | ) | 4 | 2 | ||||||||||
Net loans held for investment | 203,933 | 197,380 | 192,884 | 3 | 6 | |||||||||||||
Loans held for sale, at lower of cost or fair value | 626 | 427 | 218 | 47 | 187 | |||||||||||||
Premises and equipment, net | 3,685 | 3,752 | 3,839 | (2 | ) | (4 | ) | |||||||||||
Interest receivable | 1,435 | 1,268 | 1,418 | 13 | 1 | |||||||||||||
Goodwill | 13,978 | 13,970 | 13,978 | — | — | |||||||||||||
Other assets | 15,713 | 15,005 | 16,499 | 5 | (5 | ) | ||||||||||||
Total assets | $ | 308,854 | $ | 300,202 | $ | 296,933 | 3 | 4 | ||||||||||
6
December 31, 2014 vs. | ||||||||||||||||||
(Dollars in millions) (unaudited) | December 31, 2014 | September 30, 2014 | December 31, 2013 | September 30, 2014 | December 31, 2013 | |||||||||||||
Liabilities: | ||||||||||||||||||
Interest payable | $ | 317 | $ | 249 | $ | 307 | 27 | % | 3 | % | ||||||||
Deposits: | ||||||||||||||||||
Non-interest bearing deposits | 25,081 | 25,388 | 22,643 | (1 | ) | 11 | ||||||||||||
Interest-bearing deposits | 180,467 | 178,876 | 181,880 | 1 | (1 | ) | ||||||||||||
Total deposits | 205,548 | 204,264 | 204,523 | 1 | 1 | |||||||||||||
Securitized debt obligations | 11,624 | 10,508 | 10,289 | 11 | 13 | |||||||||||||
Other debt: | ||||||||||||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase | 880 | 2,330 | 915 | (62 | ) | (4 | ) | |||||||||||
Senior and subordinated notes | 18,684 | 18,534 | 13,134 | 1 | 42 | |||||||||||||
Other borrowings | 17,269 | 10,871 | 16,316 | 59 | 6 | |||||||||||||
Total other debt | 36,833 | 31,735 | 30,365 | 16 | 21 | |||||||||||||
Other liabilities | 9,479 | 9,428 | 9,817 | 1 | (3 | ) | ||||||||||||
Total liabilities | 263,801 | 256,184 | 255,301 | 3 | 3 | |||||||||||||
Stockholders’ equity: | ||||||||||||||||||
Preferred stock | 0 | 0 | 0 | — | — | |||||||||||||
Common stock | 6 | 6 | 6 | — | — | |||||||||||||
Additional paid-in capital, net | 27,869 | 27,272 | 26,526 | 2 | 5 | |||||||||||||
Retained earnings | 23,973 | 23,162 | 20,292 | 4 | 18 | |||||||||||||
Accumulated other comprehensive income (“AOCI”) | (430 | ) | (559 | ) | (872 | ) | (23 | ) | (51 | ) | ||||||||
Treasury stock, at cost | (6,365 | ) | (5,863 | ) | (4,320 | ) | 9 | 47 | ||||||||||
Total stockholders’ equity | 45,053 | 44,018 | 41,632 | 2 | 8 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 308,854 | $ | 300,202 | $ | 296,933 | 3 | 4 | ||||||||||
7
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 — 4)
** | Not meaningful. |
(1) | Certain prior period amounts have been recast to conform to the current period presentation. |
(2) | We recorded the following related to the mortgage representation and warranty reserve: |
2014 | 2014 | 2014 | 2014 | 2013 | ||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | |||||||||||||||
(Benefit) provision for mortgage representation and warranty losses before income taxes: | ||||||||||||||||||||
Recorded in continuing operations | $ | (11 | ) | $ | — | $ | (29 | ) | $ | 14 | $ | 3 | ||||||||
Recorded in discontinued operations | (41 | ) | 70 | 11 | (47 | ) | 30 | |||||||||||||
Total (benefit) provision for mortgage representation and warranty losses before income taxes | $ | (52 | ) | $ | 70 | $ | (18 | ) | $ | (33 | ) | $ | 33 | |||||||
Historically, the majority of the provision for representation and warranty losses is included net of tax in discontinued operations, with the remaining amount included before income taxes in non-interest income. The mortgage representation and warranty reserve was $731 million as of December 31, 2014, $1.1 billion as of September 30, 2014 and $1.2 billion as of December 31, 2013.
(3) | Total net revenue was reduced by $165 million in Q4 2014, $164 million in Q3 2014, $153 million in Q2 2014, $163 million in Q1 2014 and $185 million in Q4 2013 for the estimated uncollectible amount of billed finance charges and fees. |
(4) | Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense. |
(5) | Dividends and undistributed earnings allocated to participating securities, earnings per share, and preferred stock dividends are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total. |
(6) | Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information on tangible common equity. |
(7) | Loans held for investment includes acquired loans. We use the term “acquired loans” to refer to a certain portion of the loans acquired in the following transactions: (i) the February 17, 2012 transaction where we acquired the assets and assumed the liabilities of substantially all of ING Direct; (ii) the February 29, 2009 Chevy Chase Bank acquisition; and (iii) May 1, 2012 transaction in which we acquired substantially all of HSBC’s credit card and private-label credit card business in the United States. These loans were 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”). The table below presents amounts related to acquired loans accounted for under SOP 03-3: |
2014 | 2014 | 2014 | 2014 | 2013 | ||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | |||||||||||||||
Acquired loans accounted for under SOP 03-3: | ||||||||||||||||||||
Period-end unpaid principal balance | $ | 24,473 | $ | 25,726 | $ | 27,117 | $ | 28,549 | $ | 29,761 | ||||||||||
Period-end loans held for investment | 23,500 | 24,685 | 26,019 | 27,390 | 28,550 | |||||||||||||||
Average loans held for investment | 23,907 | 25,104 | 26,491 | 27,760 | 29,055 | |||||||||||||||
(8) | Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period. |
(9) | Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
(10) | Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. Return on average tangible assets is a non-GAAP measure and See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information. |
(11) | Calculated based on the annualized sum of (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. |
(12) | Calculated based on the annualized sum of (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. Return on average tangible common equity is a non-GAAP measure and our calculation may not be comparable to similarly titled measures reported by other companies. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information. |
(13) | Calculated based on total non-interest expense for the period divided by total net revenue for the period. |
(14) | Effective Q2 2014, we changed our presentation from total full-time equivalent employees to total employees. All prior periods have been recast to conform to the current presentation. |
(15) | Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
(16) | Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. We calculated regulatory capital measures for periods prior to Q1 2014 under Basel I. Ratios as of the end of Q4 2014 are preliminary and therefore subject to change. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for information on the calculation of each of these ratios. |
(17) | TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information. |
8
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
2014 Q4 | 2014 Q3 | 2013 Q4 | |||||||||||||||||||||||||||||||
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) (unaudited) | |||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||
Loans, including loans held for sale | $ | 204,137 | $ | 4,613 | 9.04 | % | $ | 200,066 | $ | 4,463 | 8.92 | % | $ | 193,368 | $ | 4,398 | 9.10 | % | |||||||||||||||
Investment securities | 62,952 | 405 | 2.57 | 62,582 | 398 | 2.54 | 62,919 | 414 | 2.63 | ||||||||||||||||||||||||
Cash equivalents and other | 6,347 | 27 | 1.70 | 6,242 | 26 | 1.67 | 6,670 | 27 | 1.62 | ||||||||||||||||||||||||
Total interest-earning assets | $ | 273,436 | $ | 5,045 | 7.38 | $ | 268,890 | $ | 4,887 | 7.27 | $ | 262,957 | $ | 4,839 | 7.36 | ||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 179,401 | $ | 269 | 0.60 | $ | 179,928 | $ | 271 | 0.60 | $ | 184,206 | $ | 288 | 0.63 | ||||||||||||||||||
Securitized debt obligations | 11,479 | 36 | 1.25 | 10,110 | 32 | 1.27 | 9,873 | 40 | 1.62 | ||||||||||||||||||||||||
Senior and subordinated notes | 18,680 | 73 | 1.56 | 17,267 | 71 | 1.64 | 12,765 | 75 | 2.35 | ||||||||||||||||||||||||
Other borrowings and liabilities | 14,058 | 11 | 0.31 | 12,937 | 16 | 0.49 | 13,825 | 13 | 0.38 | ||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 223,618 | $ | 389 | 0.70 | $ | 220,242 | $ | 390 | 0.71 | $ | 220,669 | $ | 416 | 0.75 | ||||||||||||||||||
Net interest income/spread | $ | 4,656 | 6.68 | $ | 4,497 | 6.56 | $ | 4,423 | 6.61 | ||||||||||||||||||||||||
Impact of non-interest bearing funding | 0.13 | 0.13 | 0.12 | ||||||||||||||||||||||||||||||
Net interest margin | 6.81 | % | 6.69 | % | 6.73 | % | |||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||
Average Balance | Interest Income/Expense(1) | Yield/Rate(1) | Average Balance | Interest Income/Expense(1) | Yield/Rate(1) | |||||||||||||||||
(Dollars in millions) (unaudited) | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Loans, including loans held for sale | $ | 198,419 | $ | 17,662 | 8.90 | % | $ | 196,609 | $ | 18,222 | 9.27 | % | ||||||||||
Investment securities | 62,547 | 1,628 | 2.60 | 63,522 | 1,575 | 2.48 | ||||||||||||||||
Cash equivalents and other | 6,208 | 107 | 1.72 | 6,292 | 101 | 1.61 | ||||||||||||||||
Total interest-earning assets | $ | 267,174 | $ | 19,397 | 7.26 | $ | 266,423 | $ | 19,898 | 7.47 | ||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing deposits | $ | 181,036 | $ | 1,088 | 0.60 | $ | 187,700 | $ | 1,241 | 0.66 | ||||||||||||
Securitized debt obligations | 10,686 | 145 | 1.36 | 10,697 | 183 | 1.71 | ||||||||||||||||
Senior and subordinated notes | 16,543 | 299 | 1.81 | 12,440 | 315 | 2.53 | ||||||||||||||||
Other borrowings and liabilities | 12,325 | 47 | 0.38 | 14,670 | 53 | 0.36 | ||||||||||||||||
Total interest-bearing liabilities | $ | 220,590 | $ | 1,579 | 0.72 | $ | 225,507 | $ | 1,792 | 0.79 | ||||||||||||
Net interest income/spread | $ | 17,818 | 6.54 | $ | 18,106 | 6.68 | ||||||||||||||||
Impact of non-interest bearing funding | 0.13 | 0.12 | ||||||||||||||||||||
Net interest margin | 6.67 | % | 6.80 | % | ||||||||||||||||||
__________
(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. |
9
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics(1)
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | ||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | |||||||||||||||||||||||||||||
Period-end Loans Held For Investment | |||||||||||||||||||||||||||||||||||||
Credit card: | |||||||||||||||||||||||||||||||||||||
Domestic credit card | $ | 77,704 | $ | 73,143 | $ | 71,165 | $ | 68,275 | $ | 73,255 | 6 | % | 6 | % | $ | 77,704 | $ | 73,255 | 6 | % | |||||||||||||||||
International credit card | 8,172 | 7,488 | 7,853 | 7,575 | 8,050 | 9 | 2 | 8,172 | 8,050 | 2 | |||||||||||||||||||||||||||
Total credit card | 85,876 | 80,631 | 79,018 | 75,850 | 81,305 | 7 | 6 | 85,876 | 81,305 | 6 | |||||||||||||||||||||||||||
Consumer banking: | |||||||||||||||||||||||||||||||||||||
Auto | 37,824 | 36,254 | 34,792 | 33,080 | 31,857 | 4 | 19 | 37,824 | 31,857 | 19 | |||||||||||||||||||||||||||
Home loan | 30,035 | 31,203 | 32,644 | 34,035 | 35,282 | (4 | ) | (15 | ) | 30,035 | 35,282 | (15 | ) | ||||||||||||||||||||||||
Retail banking | 3,580 | 3,604 | 3,626 | 3,612 | 3,623 | (1 | ) | (1 | ) | 3,580 | 3,623 | (1 | ) | ||||||||||||||||||||||||
Total consumer banking | 71,439 | 71,061 | 71,062 | 70,727 | 70,762 | 1 | 1 | 71,439 | 70,762 | 1 | |||||||||||||||||||||||||||
Commercial banking: | |||||||||||||||||||||||||||||||||||||
Commercial and multifamily real estate | 23,137 | 22,895 | 22,040 | 21,256 | 20,750 | 1 | 12 | 23,137 | 20,750 | 12 | |||||||||||||||||||||||||||
Commercial and industrial | 26,972 | 26,071 | 25,402 | 24,064 | 23,309 | 3 | 16 | 26,972 | 23,309 | 16 | |||||||||||||||||||||||||||
Total commercial lending | 50,109 | 48,966 | 47,442 | 45,320 | 44,059 | 2 | 14 | 50,109 | 44,059 | 14 | |||||||||||||||||||||||||||
Small-ticket commercial real estate | 781 | 822 | 879 | 910 | 952 | (5 | ) | (18 | ) | 781 | 952 | (18 | ) | ||||||||||||||||||||||||
Total commercial banking(2) | 50,890 | 49,788 | 48,321 | 46,230 | 45,011 | 2 | 13 | 50,890 | 45,011 | 13 | |||||||||||||||||||||||||||
Other loans | 111 | 112 | 127 | 134 | 121 | (1 | ) | (8 | ) | 111 | 121 | (8 | ) | ||||||||||||||||||||||||
Total loans held for investment(2) | $ | 208,316 | $ | 201,592 | $ | 198,528 | $ | 192,941 | $ | 197,199 | 3 | 6 | $ | 208,316 | $ | 197,199 | 6 | ||||||||||||||||||||
Average Loans Held For Investment | |||||||||||||||||||||||||||||||||||||
Credit card: | |||||||||||||||||||||||||||||||||||||
Domestic credit card | $ | 74,026 | $ | 71,784 | $ | 69,376 | $ | 69,810 | $ | 70,368 | 3 | % | 5 | % | $ | 71,262 | $ | 71,234 | — | % | |||||||||||||||||
International credit card | 7,714 | 7,710 | 7,621 | 7,692 | 7,899 | — | (2 | ) | 7,684 | 7,973 | (4 | ) | |||||||||||||||||||||||||
Total credit card | 81,740 | 79,494 | 76,997 | 77,502 | 78,267 | 3 | 4 | 78,946 | 79,207 | — | |||||||||||||||||||||||||||
Consumer banking: | |||||||||||||||||||||||||||||||||||||
Auto | 37,072 | 35,584 | 33,972 | 32,387 | 31,424 | 4 | 18 | 34,769 | 29,446 | 18 | |||||||||||||||||||||||||||
Home loan | 30,604 | 31,859 | 33,299 | 34,646 | 35,974 | (4 | ) | (15 | ) | 32,589 | 39,322 | (17 | ) | ||||||||||||||||||||||||
Retail banking | 3,578 | 3,605 | 3,613 | 3,630 | 3,635 | (1 | ) | (2 | ) | 3,606 | 3,699 | (3 | ) | ||||||||||||||||||||||||
Total consumer banking | 71,254 | 71,048 | 70,884 | 70,663 | 71,033 | — | — | 70,964 | 72,467 | (2 | ) | ||||||||||||||||||||||||||
Commercial banking: | |||||||||||||||||||||||||||||||||||||
Commercial and multifamily real estate | 23,129 | 22,409 | 21,484 | 20,962 | 19,928 | 3 | 16 | 22,003 | 18,636 | 18 | |||||||||||||||||||||||||||
Commercial and industrial | 26,409 | 25,512 | 24,611 | 23,541 | 22,445 | 4 | 18 | 25,028 | 21,062 | 19 | |||||||||||||||||||||||||||
Total commercial lending | 49,538 | 47,921 | 46,095 | 44,503 | 42,373 | 3 | 17 | 47,031 | 39,698 | 18 | |||||||||||||||||||||||||||
Small-ticket commercial real estate | 801 | 845 | 896 | 932 | 986 | (5 | ) | (19 | ) | 868 | 1,073 | (19 | ) | ||||||||||||||||||||||||
Total commercial banking | 50,339 | 48,766 | 46,991 | 45,435 | 43,359 | 3 | 16 | 47,899 | 40,771 | 17 | |||||||||||||||||||||||||||
Other loans | 103 | 114 | 124 | 122 | 154 | (10 | ) | (33 | ) | 116 | 169 | (31 | ) | ||||||||||||||||||||||||
Total average loans held for investment | $ | 203,436 | $ | 199,422 | $ | 194,996 | $ | 193,722 | $ | 192,813 | 2 | 6 | $ | 197,925 | $ | 192,614 | 3 | ||||||||||||||||||||
10
2014 Q4 vs. | Year Ended | 2014 | ||||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | |||||||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | ||||||||||||||||||||||
Net Charge-off Rates | ||||||||||||||||||||||||||||||
Credit card: | ||||||||||||||||||||||||||||||
Domestic credit card | 3.39 | % | 2.83 | % | 3.52 | % | 4.01 | % | 3.89 | % | 56 | bps | (50 | ) bps | 3.43 | % | 4.08 | % | (65 | ) bps | ||||||||||
International credit card | 3.34 | 3.32 | 3.93 | 4.17 | 4.74 | 2 | (140 | ) | 3.69 | 4.78 | (109 | ) | ||||||||||||||||||
Total credit card | 3.38 | 2.88 | 3.56 | 4.02 | 3.98 | 50 | (60 | ) | 3.46 | 4.15 | (69 | ) | ||||||||||||||||||
Consumer banking: | ||||||||||||||||||||||||||||||
Auto | 2.14 | 1.98 | 1.31 | 1.66 | 2.30 | 16 | (16 | ) | 1.78 | 1.85 | (7 | ) | ||||||||||||||||||
Home loan | 0.07 | 0.02 | 0.05 | 0.06 | 0.03 | 5 | 4 | 0.05 | 0.04 | 1 | ||||||||||||||||||||
Retail banking | 1.28 | 1.36 | 0.70 | 0.95 | 1.09 | (8 | ) | 19 | 1.07 | 1.46 | (39 | ) | ||||||||||||||||||
Total consumer banking | 1.20 | 1.07 | 0.69 | 0.84 | 1.09 | 13 | 11 | 0.95 | 0.85 | 10 | ||||||||||||||||||||
Commercial banking: | ||||||||||||||||||||||||||||||
Commercial and multifamily real estate | 0.01 | (0.10 | ) | — | 0.01 | (0.11 | ) | 11 | 12 | (0.02 | ) | (0.04 | ) | 2 | ||||||||||||||||
Commercial and industrial | 0.10 | (0.01 | ) | 0.04 | 0.03 | 0.04 | 11 | 6 | 0.04 | 0.07 | (3 | ) | ||||||||||||||||||
Total commercial lending | 0.06 | (0.05 | ) | 0.02 | 0.02 | (0.03 | ) | 11 | 9 | 0.01 | 0.02 | (1 | ) | |||||||||||||||||
Small-ticket commercial real estate | 0.80 | (0.01 | ) | 0.61 | 0.67 | (0.81 | ) | 81 | 161 | 0.52 | 0.62 | (10 | ) | |||||||||||||||||
Total commercial banking | 0.07 | (0.05 | ) | 0.03 | 0.04 | (0.05 | ) | 12 | 12 | 0.02 | 0.03 | (1 | ) | |||||||||||||||||
Other loans | 0.47 | (0.61 | ) | 2.18 | (0.68 | ) | 4.68 | 108 | (421 | ) | 0.36 | 11.34 | ** | |||||||||||||||||
Total net charge-offs | 1.80 | 1.52 | 1.67 | 1.92 | 2.01 | 28 | (21 | ) | 1.72 | 2.04 | (32 | ) | ||||||||||||||||||
30+ Day Performing Delinquency Rates | ||||||||||||||||||||||||||||||
Credit card: | ||||||||||||||||||||||||||||||
Domestic credit card | 3.27 | % | 3.21 | % | 2.83 | % | 3.02 | % | 3.43 | % | 6 | bps | (16 | ) bps | 3.27 | % | 3.43 | % | (16 | ) bps | ||||||||||
International credit card | 2.94 | 3.34 | 3.40 | 3.59 | 3.71 | (40 | ) | (77 | ) | 2.94 | 3.71 | (77 | ) | |||||||||||||||||
Total credit card | 3.24 | 3.22 | 2.89 | 3.08 | 3.46 | 2 | (22 | ) | 3.24 | 3.46 | (22 | ) | ||||||||||||||||||
Consumer banking: | ||||||||||||||||||||||||||||||
Auto | 6.57 | 6.14 | 5.77 | 5.29 | 6.85 | 43 | (28 | ) | 6.57 | 6.85 | (28 | ) | ||||||||||||||||||
Home loan | 0.21 | 0.14 | 0.13 | 0.12 | 0.16 | 7 | 5 | 0.21 | 0.16 | 5 | ||||||||||||||||||||
Retail banking | 0.64 | 0.53 | 0.48 | 0.74 | 0.69 | 11 | (5 | ) | 0.64 | 0.69 | (5 | ) | ||||||||||||||||||
Total consumer banking | 3.60 | 3.22 | 2.91 | 2.57 | 3.20 | 38 | 40 | 3.60 | 3.20 | 40 | ||||||||||||||||||||
Nonperforming Assets Rates(3) | ||||||||||||||||||||||||||||||
Credit card: | ||||||||||||||||||||||||||||||
International credit card | 0.86 | % | 0.98 | % | 1.03 | % | 1.07 | % | 1.10 | % | (12 | ) bps | (24 | ) bps | 0.86 | % | 1.10 | % | (24 | ) bps | ||||||||||
Total credit card | 0.08 | 0.09 | 0.10 | 0.11 | 0.11 | (1 | ) | (3 | ) | 0.08 | 0.11 | (3 | ) | |||||||||||||||||
Consumer banking: | ||||||||||||||||||||||||||||||
Auto(4) | 1.00 | 0.94 | 0.88 | 0.81 | 1.11 | 6 | (11 | ) | 1.00 | 1.11 | (11 | ) | ||||||||||||||||||
Home loan | 1.19 | 1.13 | 1.16 | 1.17 | 1.14 | 6 | 5 | 1.19 | 1.14 | 5 | ||||||||||||||||||||
Retail banking | 0.61 | 0.54 | 0.79 | 1.15 | 1.13 | 7 | (52 | ) | 0.61 | 1.13 | (52 | ) | ||||||||||||||||||
Total consumer banking | 1.06 | 1.01 | 1.01 | 1.00 | 1.12 | 5 | (6 | ) | 1.06 | 1.12 | (6 | ) | ||||||||||||||||||
Commercial banking: | ||||||||||||||||||||||||||||||
Commercial and multifamily real estate | 0.27 | 0.29 | 0.32 | 0.31 | 0.29 | (2 | ) | (2 | ) | 0.27 | 0.29 | (2 | ) | |||||||||||||||||
Commercial and industrial | 0.42 | 0.40 | 0.45 | 0.40 | 0.44 | 2 | (2 | ) | 0.42 | 0.44 | (2 | ) | ||||||||||||||||||
Total commercial lending | 0.35 | 0.35 | 0.39 | 0.35 | 0.37 | — | (2 | ) | 0.35 | 0.37 | (2 | ) | ||||||||||||||||||
Small-ticket commercial real estate | 0.96 | 0.42 | 1.40 | 0.73 | 0.43 | 54 | 53 | 0.96 | 0.43 | 53 | ||||||||||||||||||||
Total commercial banking | 0.36 | 0.35 | 0.41 | 0.36 | 0.37 | 1 | (1 | ) | 0.36 | 0.37 | (1 | ) | ||||||||||||||||||
Total nonperforming assets | 0.54 | 0.53 | 0.55 | 0.54 | 0.58 | 1 | (4 | ) | 0.54 | 0.58 | (4 | ) | ||||||||||||||||||
11
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary—Business Segments(1)
Three Months Ended December 31, 2014 | Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Total | Credit Card | Consumer Banking | Commercial Banking | Other | Total | Credit Card | Consumer Banking | Commercial Banking | Other | ||||||||||||||||||||||||||||||
Earnings: | ||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 4,656 | $ | 2,697 | $ | 1,459 | $ | 455 | $ | 45 | 17,818 | $ | 10,310 | $ | 5,748 | $ | 1,751 | $ | 9 | |||||||||||||||||||||
Non-interest income | 1,157 | 841 | 185 | 132 | (1 | ) | 4,472 | 3,311 | 684 | 450 | 27 | |||||||||||||||||||||||||||||
Total net revenue(5)(6) | 5,813 | 3,538 | 1,644 | 587 | 44 | 22,290 | 13,621 | 6,432 | 2,201 | 36 | ||||||||||||||||||||||||||||||
Provision (benefit) for credit losses | 1,109 | 856 | 222 | 32 | (1 | ) | 3,541 | 2,750 | 703 | 93 | (5 | ) | ||||||||||||||||||||||||||||
Non-interest expense | 3,284 | 1,888 | 1,045 | 293 | 58 | 12,180 | 7,063 | 3,869 | 1,083 | 165 | ||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 1,420 | 794 | 377 | 262 | (13 | ) | 6,569 | 3,808 | 1,860 | 1,025 | (124 | ) | ||||||||||||||||||||||||||||
Income tax provision (benefit) | 450 | 275 | 135 | 93 | (53 | ) | 2,146 | 1,329 | 665 | 366 | (214 | ) | ||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 970 | $ | 519 | $ | 242 | $ | 169 | $ | 40 | $ | 4,423 | $ | 2,479 | $ | 1,195 | $ | 659 | $ | 90 | ||||||||||||||||||||
Three Months Ended September 30, 2014 | ||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Total | Credit Card | Consumer Banking | Commercial Banking | Other | |||||||||||||||||||||||||||||||||||
Earnings: | ||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 4,497 | $ | 2,627 | $ | 1,425 | $ | 439 | $ | 6 | ||||||||||||||||||||||||||||||
Non-interest income | 1,142 | 846 | 179 | 122 | (5 | ) | ||||||||||||||||||||||||||||||||||
Total net revenue(5)(6) | 5,639 | 3,473 | 1,604 | 561 | 1 | |||||||||||||||||||||||||||||||||||
Provision (benefit) for credit losses | 993 | 787 | 198 | 9 | (1 | ) | ||||||||||||||||||||||||||||||||||
Non-interest expense | 2,985 | 1,730 | 956 | 268 | 31 | |||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 1,661 | 956 | 450 | 284 | (29 | ) | ||||||||||||||||||||||||||||||||||
Income tax provision (benefit) | 536 | 332 | 161 | 102 | (59 | ) | ||||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 1,125 | $ | 624 | $ | 289 | $ | 182 | $ | 30 | ||||||||||||||||||||||||||||||
Three Months Ended December 31, 2013 | Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Total | Credit Card | Consumer Banking | Commercial Banking | Other | Total | Credit Card | Consumer Banking | Commercial Banking | Other | ||||||||||||||||||||||||||||||
Earnings: | ||||||||||||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 4,423 | $ | 2,576 | $ | 1,468 | $ | 447 | $ | (68 | ) | $ | 18,106 | $ | 10,967 | $ | 5,905 | $ | 1,674 | $ | (440 | ) | ||||||||||||||||||
Non-interest income | 1,121 | 833 | 195 | 131 | (38 | ) | 4,278 | 3,320 | 749 | 395 | (186 | ) | ||||||||||||||||||||||||||||
Total net revenue (loss)(5)(6) | 5,544 | 3,409 | 1,663 | 578 | (106 | ) | 22,384 | 14,287 | 6,654 | 2,069 | (626 | ) | ||||||||||||||||||||||||||||
Provision (benefit) for credit losses | 957 | 751 | 212 | (6 | ) | — | 3,453 | 2,824 | 656 | (24 | ) | (3 | ) | |||||||||||||||||||||||||||
Non-interest expense | 3,235 | 1,868 | 1,018 | 281 | 68 | 12,353 | 7,439 | 3,745 | 958 | 211 | ||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 1,352 | 790 | 433 | 303 | (174 | ) | 6,578 | 4,024 | 2,253 | 1,135 | (834 | ) | ||||||||||||||||||||||||||||
Income tax provision (benefit) | 477 | 274 | 154 | 108 | (59 | ) | 2,224 | 1,409 | 802 | 404 | (391 | ) | ||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of tax | $ | 875 | $ | 516 | $ | 279 | $ | 195 | $ | (115 | ) | $ | 4,354 | $ | 2,615 | $ | 1,451 | $ | 731 | $ | (443 | ) | ||||||||||||||||||
12
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary—Credit Card Business(1)
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | ||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | |||||||||||||||||||||||||||||
Credit Card | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 2,697 | $ | 2,627 | $ | 2,461 | $ | 2,525 | $ | 2,576 | 3 | % | 5 | % | $ | 10,310 | $ | 10,967 | (6 | ) % | |||||||||||||||||
Non-interest income | 841 | 846 | 839 | 785 | 833 | (1 | ) | 1 | 3,311 | 3,320 | — | ||||||||||||||||||||||||||
Total net revenue | 3,538 | 3,473 | 3,300 | 3,310 | 3,409 | 2 | 4 | 13,621 | 14,287 | (5 | ) | ||||||||||||||||||||||||||
Provision for credit losses | 856 | 787 | 549 | 558 | 751 | 9 | 14 | 2,750 | 2,824 | (3 | ) | ||||||||||||||||||||||||||
Non-interest expense | 1,888 | 1,730 | 1,719 | 1,726 | 1,868 | 9 | 1 | 7,063 | 7,439 | (5 | ) | ||||||||||||||||||||||||||
Income from continuing operations before income taxes | 794 | 956 | 1,032 | 1,026 | 790 | (17 | ) | 1 | 3,808 | 4,024 | (5 | ) | |||||||||||||||||||||||||
Income tax provision | 275 | 332 | 364 | 358 | 274 | (17 | ) | — | 1,329 | 1,409 | (6 | ) | |||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 519 | $ | 624 | $ | 668 | $ | 668 | $ | 516 | (17 | ) | 1 | $ | 2,479 | $ | 2,615 | (5 | ) | ||||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 85,876 | $ | 80,631 | $ | 79,018 | $ | 75,850 | $ | 81,305 | 7 | % | 6 | % | $ | 85,876 | $ | 81,305 | 6 | % | |||||||||||||||||
Average loans held for investment | 81,740 | 79,494 | 76,997 | 77,502 | 78,267 | 3 | 4 | 78,946 | 79,207 | — | |||||||||||||||||||||||||||
Average yield on loans held for investment(7)(8) | 14.61 | % | 14.65 | % | 14.22 | % | 14.43 | % | 14.64 | % | (4 | ) bps | (3 | ) bps | 14.48 | % | 15.37 | % | (89 | ) bps | |||||||||||||||||
Total net revenue margin(9) | 17.31 | 17.48 | 17.14 | 17.08 | 17.43 | (17 | ) | (12 | ) | 17.25 | 18.04 | (79 | ) | ||||||||||||||||||||||||
Net charge-off rate | 3.38 | 2.88 | 3.56 | 4.02 | 3.98 | 50 | (60 | ) | 3.46 | 4.15 | (69 | ) | |||||||||||||||||||||||||
30+ day performing delinquency rate | 3.24 | 3.22 | 2.89 | 3.08 | 3.46 | 2 | (22 | ) | 3.24 | 3.46 | (22 | ) | |||||||||||||||||||||||||
30+ day delinquency rate | 3.30 | 3.29 | 2.97 | 3.16 | 3.54 | 1 | (24 | ) | 3.30 | 3.54 | (24 | ) | |||||||||||||||||||||||||
Nonperforming loan rate | 0.08 | 0.09 | 0.10 | 0.11 | 0.11 | (1 | ) | (3 | ) | 0.08 | 0.11 | (3 | ) | ||||||||||||||||||||||||
Card loan premium amortization and other intangible accretion(10) | $ | 11 | $ | 18 | $ | 31 | $ | 37 | $ | 39 | (39 | ) % | (72 | ) % | $ | 97 | $ | 198 | (51 | ) % | |||||||||||||||||
PCCR intangible amortization | 87 | 90 | 94 | 98 | 102 | (3 | ) | (15 | ) | 369 | 434 | (15 | ) | ||||||||||||||||||||||||
Purchase volume(11) | 63,484 | 57,474 | 56,358 | 47,434 | 54,245 | 10 | 17 | 224,750 | 201,074 | 12 | |||||||||||||||||||||||||||
Domestic Card | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 2,432 | $ | 2,361 | $ | 2,193 | $ | 2,255 | $ | 2,303 | 3 | % | 6 | % | $ | 9,241 | $ | 9,887 | (7 | ) % | |||||||||||||||||
Non-interest income | 768 | 763 | 768 | 702 | 747 | 1 | 3 | 3,001 | 2,957 | 1 | |||||||||||||||||||||||||||
Total net revenue | 3,200 | 3,124 | 2,961 | 2,957 | 3,050 | 2 | 5 | 12,242 | 12,844 | (5 | ) | ||||||||||||||||||||||||||
Provision for credit losses | 765 | 738 | 504 | 486 | 679 | 4 | 13 | 2,493 | 2,502 | — | |||||||||||||||||||||||||||
Non-interest expense | 1,676 | 1,530 | 1,513 | 1,545 | 1,664 | 10 | 1 | 6,264 | 6,645 | (6 | ) | ||||||||||||||||||||||||||
Income from continuing operations before income taxes | 759 | 856 | 944 | 926 | 707 | (11 | ) | 7 | 3,485 | 3,697 | (6 | ) | |||||||||||||||||||||||||
Income tax provision | 272 | 306 | 337 | 331 | 252 | (11 | ) | 8 | 1,246 | 1,316 | (5 | ) | |||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 487 | $ | 550 | $ | 607 | $ | 595 | $ | 455 | (11 | ) | 7 | $ | 2,239 | $ | 2,381 | (6 | ) | ||||||||||||||||||
13
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | ||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | |||||||||||||||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 77,704 | $ | 73,143 | $ | 71,165 | $ | 68,275 | $ | 73,255 | 6 | % | 6 | % | $ | 77,704 | $ | 73,255 | 6 | % | |||||||||||||||||
Average loans held for investment | 74,026 | 71,784 | 69,376 | 69,810 | 70,368 | 3 | 5 | 71,262 | 71,234 | — | |||||||||||||||||||||||||||
Average yield on loans held for investment(7)(8) | 14.43 | % | 14.46 | % | 13.95 | % | 14.19 | % | 14.44 | % | (3 | ) bps | (1 | ) bps | 14.26 | % | 15.27 | % | (101 | ) bps | |||||||||||||||||
Total net revenue margin(9) | 17.29 | 17.41 | 17.07 | 16.94 | 17.34 | (12 | ) | (5 | ) | 17.18 | 18.03 | (85 | ) | ||||||||||||||||||||||||
Net charge-off rate | 3.39 | 2.83 | 3.52 | 4.01 | 3.89 | 56 | (50 | ) | 3.43 | 4.08 | (65 | ) | |||||||||||||||||||||||||
30+ day performing delinquency rate | 3.27 | 3.21 | 2.83 | 3.02 | 3.43 | 6 | (16 | ) | 3.27 | 3.43 | (16 | ) | |||||||||||||||||||||||||
30+ day delinquency rate | 3.27 | 3.21 | 2.83 | 3.02 | 3.43 | 6 | (16 | ) | 3.27 | 3.43 | (16 | ) | |||||||||||||||||||||||||
Purchase volume(11) | $ | 58,234 | $ | 53,690 | $ | 52,653 | $ | 44,139 | $ | 50,377 | 8 | % | 16 | % | $ | 208,716 | $ | 186,901 | 12 | % | |||||||||||||||||
International Card | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 265 | $ | 266 | $ | 268 | $ | 270 | $ | 273 | — | (3 | ) % | $ | 1,069 | $ | 1,080 | (1 | ) % | ||||||||||||||||||
Non-interest income | 73 | 83 | 71 | 83 | 86 | (12 | ) | (15 | ) | 310 | 363 | (15 | ) | ||||||||||||||||||||||||
Total net revenue | 338 | 349 | 339 | 353 | 359 | (3 | ) | (6 | ) | 1,379 | 1,443 | (4 | ) | ||||||||||||||||||||||||
Provision for credit losses | 91 | 49 | 45 | 72 | 72 | 86 | 26 | 257 | 322 | (20 | ) | ||||||||||||||||||||||||||
Non-interest expense | 212 | 200 | 206 | 181 | 204 | 6 | 4 | 799 | 794 | 1 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 35 | 100 | 88 | 100 | 83 | (65 | ) | (58 | ) | 323 | 327 | (1 | ) | ||||||||||||||||||||||||
Income tax provision | 3 | 26 | 27 | 27 | 22 | (88 | ) | (86 | ) | 83 | 93 | (11 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 32 | $ | 74 | $ | 61 | $ | 73 | $ | 61 | (57 | ) | (48 | ) | $ | 240 | $ | 234 | 3 | ||||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 8,172 | $ | 7,488 | $ | 7,853 | $ | 7,575 | $ | 8,050 | 9 | % | 2 | % | $ | 8,172 | $ | 8,050 | 2 | % | |||||||||||||||||
Average loans held for investment | 7,714 | 7,710 | 7,621 | 7,692 | 7,899 | — | (2 | ) | 7,684 | 7,973 | (4 | ) | |||||||||||||||||||||||||
Average yield on loans held for investment(8) | 16.31 | % | 16.42 | % | 16.74 | % | 16.64 | % | 16.48 | % | (11 | ) bps | (17 | ) bps | 16.53 | % | 16.24 | % | 29 | bps | |||||||||||||||||
Total net revenue margin | 17.55 | 18.13 | 17.76 | 18.38 | 18.20 | (58 | ) | (65 | ) | 17.95 | 18.10 | (15 | ) | ||||||||||||||||||||||||
Net charge-off rate | 3.34 | 3.32 | 3.93 | 4.17 | 4.74 | 2 | (140 | ) | 3.69 | 4.78 | (109 | ) | |||||||||||||||||||||||||
30+ day performing delinquency rate | 2.94 | 3.34 | 3.40 | 3.59 | 3.71 | (40 | ) | (77 | ) | 2.94 | 3.71 | (77 | ) | ||||||||||||||||||||||||
30+ day delinquency rate | 3.60 | 4.08 | 4.20 | 4.41 | 4.56 | (48 | ) | (96 | ) | 3.60 | 4.56 | (96 | ) | ||||||||||||||||||||||||
Nonperforming loan rate | 0.86 | 0.98 | 1.03 | 1.07 | 1.10 | (12 | ) | (24 | ) | 0.86 | 1.10 | (24 | ) | ||||||||||||||||||||||||
Purchase volume(11) | $ | 5,250 | $ | 3,784 | $ | 3,705 | $ | 3,295 | $ | 3,868 | 39 | % | 36 | % | $ | 16,034 | $ | 14,173 | 13 | % | |||||||||||||||||
14
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Consumer Banking Business(1)
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | ||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | |||||||||||||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 1,459 | $ | 1,425 | $ | 1,431 | $ | 1,433 | $ | 1,468 | 2 % | (1) % | $ | 5,748 | $ | 5,905 | (3 | ) % | |||||||||||||||||||
Non-interest income | 185 | 179 | 170 | 150 | 195 | 3 | (5 | ) | 684 | 749 | (9 | ) | |||||||||||||||||||||||||
Total net revenue | 1,644 | 1,604 | 1,601 | 1,583 | 1,663 | 2 | (1 | ) | 6,432 | 6,654 | (3 | ) | |||||||||||||||||||||||||
Provision for credit losses | 222 | 198 | 143 | 140 | 212 | 12 | 5 | 703 | 656 | 7 | |||||||||||||||||||||||||||
Non-interest expense | 1,045 | 956 | 938 | 930 | 1,018 | 9 | 3 | 3,869 | 3,745 | 3 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 377 | 450 | 520 | 513 | 433 | (16 | ) | (13 | ) | 1,860 | 2,253 | (17 | ) | ||||||||||||||||||||||||
Income tax provision | 135 | 161 | 186 | 183 | 154 | (16 | ) | (12 | ) | 665 | 802 | (17 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 242 | $ | 289 | $ | 334 | $ | 330 | $ | 279 | (16 | ) | (13 | ) | $ | 1,195 | $ | 1,451 | (18 | ) | |||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 71,439 | $ | 71,061 | $ | 71,062 | $ | 70,727 | $ | 70,762 | 1 % | 1 % | $ | 71,439 | $ | 70,762 | 1 % | ||||||||||||||||||||
Average loans held for investment | 71,254 | 71,048 | 70,884 | 70,663 | 71,033 | — | — | 70,964 | $ | 72,467 | (2 | ) | |||||||||||||||||||||||||
Average yield on loans held for investment(8) | 6.45% | 6.18 | % | 6.22 | % | 6.18 | % | 6.30 | % | 27 | bps | 15 | bps | 6.26 | % | 6.10 | % | 16 | bps | ||||||||||||||||||
Auto loan originations | $ | 5,390 | $ | 5,410 | $ | 5,376 | $ | 4,727 | $ | 4,322 | — | 25 % | $ | 20,903 | $ | 17,388 | 20 | % | |||||||||||||||||||
Period-end deposits | 168,078 | 167,624 | 169,153 | 171,529 | 167,652 | — | — | 168,078 | 167,652 | — | |||||||||||||||||||||||||||
Average deposits | 167,727 | 168,407 | 169,694 | 168,676 | 167,870 | — | — | 168,623 | 169,683 | (1 | ) | ||||||||||||||||||||||||||
Average deposit interest rate | 0.57% | 0.58 | % | 0.57 | % | 0.57 | % | 0.60 | % | (1 | ) bps | (3 | ) bps | 0.57 | % | 0.63 | % | (6 | ) bps | ||||||||||||||||||
Core deposit intangible amortization | $ | 24 | $ | 26 | $ | 28 | $ | 30 | $ | 32 | (8) % | (25) % | $ | 108 | $ | 138 | (22 | ) % | |||||||||||||||||||
Net charge-off rate | 1.20 | % | 1.07 | % | 0.69 | % | 0.84 | % | 1.09 | % | 13 | bps | 11 | bps | 0.95 | % | 0.85 | % | 10 | bps | |||||||||||||||||
30+ day performing delinquency rate | 3.60 | 3.22 | 2.91 | 2.57 | 3.20 | 38 | 40 | 3.60 | 3.20 | 40 | |||||||||||||||||||||||||||
30+ day delinquency rate | 4.23 | 3.82 | 3.49 | 3.14 | 3.89 | 41 | 34 | 4.23 | 3.89 | 34 | |||||||||||||||||||||||||||
Nonperforming loan rate | 0.77 | 0.73 | 0.75 | 0.74 | 0.86 | 4 | (9 | ) | 0.77 | 0.86 | (9 | ) | |||||||||||||||||||||||||
Nonperforming asset rate(3) | 1.06 | 1.01 | 1.01 | 1.00 | 1.12 | 5 | (6 | ) | 1.06 | 1.12 | (6 | ) | |||||||||||||||||||||||||
15
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Commercial Banking Business(1)
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | ||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | |||||||||||||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 455 | $ | 439 | $ | 436 | $ | 421 | $ | 447 | 4 % | 2 | % | $ | 1,751 | $ | 1,674 | 5 | % | ||||||||||||||||||
Non-interest income | 132 | 122 | 109 | 87 | 131 | 8 | 1 | 450 | 395 | 14 | |||||||||||||||||||||||||||
Total net revenue(5)(6) | 587 | 561 | 545 | 508 | 578 | 5 | 2 | 2,201 | 2,069 | 6 | |||||||||||||||||||||||||||
Provision (benefit) for credit losses | 32 | 9 | 12 | 40 | (6 | ) | 256 | ** | 93 | (24 | ) | ** | |||||||||||||||||||||||||
Non-interest expense | 293 | 268 | 267 | 255 | 281 | 9 | 4 | 1,083 | 958 | 13 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 262 | 284 | 266 | 213 | 303 | (8 | ) | (14 | ) | 1,025 | 1,135 | (10 | ) | ||||||||||||||||||||||||
Income tax provision | 93 | 102 | 95 | 76 | 108 | (9 | ) | (14 | ) | 366 | 404 | (9 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 169 | $ | 182 | $ | 171 | $ | 137 | $ | 195 | (7 | ) | (13 | ) | $ | 659 | $ | 731 | (10 | ) | |||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 50,890 | $ | 49,788 | $ | 48,321 | $ | 46,230 | $ | 45,011 | 2 % | 13 % | $ | 50,890 | $ | 45,011 | 13 % | ||||||||||||||||||||
Average loans held for investment | 50,339 | 48,766 | 46,991 | 45,435 | 43,359 | 3 | 16 | 47,899 | 40,771 | 17 | |||||||||||||||||||||||||||
Average yield on loans held for investment(6)(8) | 3.33 | % | 3.39 | % | 3.50 | % | 3.47 | % | 3.92 | % | (6 | ) bps | (59 | ) bps | 3.42 | % | 3.88 | % | (46 | ) bps | |||||||||||||||||
Period-end deposits | $ | 31,954 | $ | 31,918 | $ | 31,440 | $ | 31,485 | $ | 30,567 | — | 5 | % | $ | 31,954 | $ | 30,567 | 5 | % | ||||||||||||||||||
Average deposits | 32,363 | 31,772 | 31,238 | 31,627 | 31,033 | 2 | 4 | 31,752 | 30,702 | 3 | |||||||||||||||||||||||||||
Average deposit interest rate | 0.24 | % | 0.24 | % | 0.24 | % | 0.25 | % | 0.25 | % | — | (1 | ) bps | 0.24 | % | 0.27 | % | (3 | ) bps | ||||||||||||||||||
Core deposit intangible amortization | $ | 5 | $ | 5 | $ | 5 | $ | 6 | $ | 6 | — | (17 | ) % | 21 | 27 | (22 | ) % | ||||||||||||||||||||
Net charge-off (recovery) rate | 0.07 | % | (0.05 | )% | 0.03 | % | 0.04 | % | (0.05 | )% | 12 | bps | 12 | bps | 0.02 | % | 0.03 | % | (1 | ) bps | |||||||||||||||||
Nonperforming loan rate | 0.34 | 0.32 | 0.38 | 0.33 | 0.33 | 2 | 1 | 0.34 | 0.33 | 1 | |||||||||||||||||||||||||||
Nonperforming asset rate(3) | 0.36 | 0.35 | 0.41 | 0.36 | 0.37 | 1 | (1 | ) | 0.36 | 0.37 | (1 | ) | |||||||||||||||||||||||||
Risk category:(12) | |||||||||||||||||||||||||||||||||||||
Noncriticized | $ | 49,284 | $ | 48,408 | $ | 46,881 | $ | 45,103 | $ | 43,823 | 2 | % | 12 | % | $ | 49,284 | $ | 43,823 | 12 | % | |||||||||||||||||
Criticized performing | 1,431 | 1,219 | 1,259 | 977 | 1,039 | 17 | 38 | 1,431 | 1,039 | 38 | |||||||||||||||||||||||||||
Criticized nonperforming | 175 | 161 | 181 | 150 | 149 | 9 | 17 | 175 | 149 | 17 | |||||||||||||||||||||||||||
Total commercial loans | $ | 50,890 | $ | 49,788 | $ | 48,321 | $ | 46,230 | $ | 45,011 | 2 | 13 | $ | 50,890 | $ | 45,011 | 13 | ||||||||||||||||||||
% of period-end commercial loans held for investment: | |||||||||||||||||||||||||||||||||||||
Noncriticized | 96.9 | % | 97.3 | % | 97.0 | % | 97.5 | % | 97.4 | % | (40 | ) bps | (50 | ) bps | 96.9 | % | 97.4 | % | (50 | ) bps | |||||||||||||||||
Criticized performing | 2.8 | 2.4 | 2.6 | 2.2 | 2.3 | 40 | 50 | 2.8 | 2.3 | 50 | |||||||||||||||||||||||||||
Criticized nonperforming | 0.3 | 0.3 | 0.4 | 0.3 | 0.3 | — | — | 0.3 | 0.3 | — | |||||||||||||||||||||||||||
Total commercial loans | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | — | — | 100.0 | % | 100.0 | % | — | ||||||||||||||||||||
16
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Other and Total(1)
2014 Q4 vs. | Year Ended | 2014 | |||||||||||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | vs. | ||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q4 | 2013 | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 45 | $ | 6 | $ | (13 | ) | $ | (29 | ) | $ | (68 | ) | ** | ** | $ | 9 | $ | (440 | ) | ** | ||||||||||||||||
Non-interest income | (1 | ) | (5 | ) | 35 | (2 | ) | (38 | ) | (80 | )% | (97 | )% | 27 | (186 | ) | ** | ||||||||||||||||||||
Total net revenue (loss)(5) | 44 | 1 | 22 | (31 | ) | (106 | ) | ** | ** | 36 | (626 | ) | ** | ||||||||||||||||||||||||
Benefit for credit losses | (1 | ) | (1 | ) | — | (3 | ) | — | — | — | (5 | ) | (3 | ) | 67 | % | |||||||||||||||||||||
Non-interest expense | 58 | 31 | 55 | 21 | 68 | 87 | (15 | ) | 165 | 211 | (22 | ) | |||||||||||||||||||||||||
Loss from continuing operations before income taxes | (13 | ) | (29 | ) | (33 | ) | (49 | ) | (174 | ) | (55 | ) | (93 | ) | (124 | ) | (834 | ) | (85 | ) | |||||||||||||||||
Income tax benefit | (53 | ) | (59 | ) | (64 | ) | (38 | ) | (59 | ) | (10 | ) | (10 | ) | (214 | ) | (391 | ) | (45 | ) | |||||||||||||||||
Income (loss) from continuing operations, net of tax | $ | 40 | $ | 30 | $ | 31 | $ | (11 | ) | $ | (115 | ) | 33 | ** | $ | 90 | $ | (443 | ) | ** | |||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 111 | $ | 112 | $ | 127 | $ | 134 | $ | 121 | (1 | )% | (8 | )% | $ | 111 | $ | 121 | (8 | )% | |||||||||||||||||
Average loans held for investment | 103 | 114 | 124 | 122 | 154 | (10 | ) | (33 | ) | 116 | 169 | (31 | ) | ||||||||||||||||||||||||
Period-end deposits | 5,516 | 4,722 | 5,297 | 5,310 | 6,304 | 17 | (13 | ) | 5,516 | 6,304 | (13 | ) | |||||||||||||||||||||||||
Average deposits | 5,265 | 5,020 | 5,383 | 5,539 | 6,803 | 5 | (23 | ) | 5,300 | 8,660 | (39 | ) | |||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 4,656 | $ | 4,497 | $ | 4,315 | $ | 4,350 | $ | 4,423 | 4 | % | 5 | % | $ | 17,818 | $ | 18,106 | (2 | )% | |||||||||||||||||
Non-interest income | 1,157 | 1,142 | 1,153 | 1,020 | 1,121 | 1 | 3 | 4,472 | 4,278 | 5 | |||||||||||||||||||||||||||
Total net revenue | 5,813 | 5,639 | 5,468 | 5,370 | 5,544 | 3 | 5 | 22,290 | 22,384 | — | |||||||||||||||||||||||||||
Provision for credit losses | 1,109 | 993 | 704 | 735 | 957 | 12 | 16 | 3,541 | 3,453 | 3 | |||||||||||||||||||||||||||
Non-interest expense | 3,284 | 2,985 | 2,979 | 2,932 | 3,235 | 10 | 2 | 12,180 | 12,353 | (1 | ) | ||||||||||||||||||||||||||
Income from continuing operations before income taxes | 1,420 | 1,661 | 1,785 | 1,703 | 1,352 | (15 | ) | 5 | 6,569 | 6,578 | — | ||||||||||||||||||||||||||
Income tax provision | 450 | 536 | 581 | 579 | 477 | (16 | ) | (6 | ) | 2,146 | 2,224 | (4 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 970 | $ | 1,125 | $ | 1,204 | $ | 1,124 | $ | 875 | (14 | ) | 11 | $ | 4,423 | $ | 4,354 | 2 | |||||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment(2) | $ | 208,316 | $ | 201,592 | $ | 198,528 | $ | 192,941 | $ | 197,199 | 3 | % | 6 | % | $ | 208,316 | $ | 197,199 | 6 | % | |||||||||||||||||
Average loans held for investment | 203,436 | 199,422 | 194,996 | 193,722 | 192,813 | 2 | 6 | 197,925 | 192,614 | 3 | |||||||||||||||||||||||||||
Period-end deposits | 205,548 | 204,264 | 205,890 | 208,324 | 204,523 | 1 | 1 | 205,548 | 204,523 | 1 | |||||||||||||||||||||||||||
Average deposits | 205,355 | 205,199 | 206,315 | 205,842 | 205,706 | — | — | 205,675 | 209,045 | (2 | ) | ||||||||||||||||||||||||||
17
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Notes to Loan and Business Segments Disclosures (Tables 7—12)
** | Not meaningful. |
(1) | Certain prior period amounts have been recast to conform to the current period presentation. |
(2) | Includes $3.7 billion of loans to the oil and gas industry as of December 31, 2014, which was approximately 1.8% of total loans held for investment. |
(3) | Nonperforming assets consist of nonperforming loans, real estate owned (“REO”) and other foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each category divided by the combined period-end total of loans held for investment, REO and other foreclosed assets for each respective category. Nonperforming assets related to acquired loans are excluded from the calculation. |
(4) | Includes the net realizable value of auto loans that have been charged down as a result of a bankruptcy filing and repossessed assets obtained in satisfaction of auto loans. |
(5) | Commercial Banking revenue related to qualified housing credits is presented on a taxable-equivalent basis. As a result of the adoption of ASU 2014-01 “Accounting for Investments in Qualified Affordable Housing Projects” as of January 1, 2014, losses related to these investments are now recognized, along with the associated tax benefits, as a component of income taxes attributable to continuing operations instead of non-interest expense. As such, losses related to these investments decrease the overall tax benefits recognized as a component of income taxes attributable to continuing operations and taxable-equivalent revenue in the Commercial Banking segment. This decrease in revenue is offset by an increase in revenue in the Other segment. Prior period amounts have been recast to conform to this presentation. |
(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%. |
(7) | The transfer of the Best Buy Stores, L.P. (“Best Buy”) portfolio to held for sale resulted in an increase in the average yield of 99 basis points and 90 basis points for Domestic Card and Total Credit Card, respectively, in 2013. The sale of the Best Buy portfolio was completed on September 6, 2013. |
(8) | Calculated by dividing annualized interest income for the period by average loans held for investment during the period for the specified loan category. Annualized interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment. |
(9) | The transfer of the Best Buy portfolio to held for sale resulted in an increase in the net revenue margin of 111 basis points and 100 basis points for Domestic Card and Total Credit Card, respectively, in 2013. The sale of the Best Buy portfolio was completed on September 6, 2013. |
(10) | Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the May 1, 2012 transaction in which we acquired substantially all of HSBC’s credit card and private-label credit card business in the United States. |
(11) | Includes credit card purchase transactions, net of returns for both loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions. |
(12) | Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities. |
18
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures
Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. Previously, we calculated regulatory capital under Basel I as shown below:
Basel III Standardized | Basel I | |||||||||||||||||||
(Dollars in millions) (unaudited) | December 2014 | September 2014 | June 2014 | March 2014 | December 2013 | |||||||||||||||
Regulatory Capital Metrics(3) | ||||||||||||||||||||
Common equity Tier 1 capital | $ | 29,534 | $ | 29,116 | $ | 28,774 | $ | 28,434 | N/A | |||||||||||
Tier 1 common capital | N/A | N/A | N/A | N/A | $ | 27,375 | ||||||||||||||
Tier 1 capital | $ | 31,355 | $ | 30,451 | $ | 30,111 | $ | 29,257 | 28,230 | |||||||||||
Total risk-based capital(1) | 35,886 | 34,860 | 34,743 | 33,784 | 32,987 | |||||||||||||||
Risk-weighted assets(2) | 237,587 | 228,759 | 226,172 | 219,047 | 224,556 | |||||||||||||||
Average assets for the leverage ratio | 291,243 | 286,070 | 281,345 | 280,907 | 280,574 | |||||||||||||||
Capital Ratios(3) | ||||||||||||||||||||
Common equity Tier 1 capital ratio(4) | 12.4 | % | 12.7 | % | 12.7 | % | 13.0 | % | N/A | |||||||||||
Tier 1 common ratio | N/A | N/A | N/A | N/A | 12.2 | % | ||||||||||||||
Tier 1 risk-based capital ratio(5) | 13.2 | % | 13.3 | % | 13.3 | % | 13.4 | % | 12.6 | |||||||||||
Total risk-based capital ratio(6) | 15.1 | 15.2 | 15.4 | 15.4 | 14.7 | |||||||||||||||
Tier 1 leverage ratio(7) | 10.8 | 10.6 | 10.7 | 10.4 | 10.1 | |||||||||||||||
Tangible common equity (“TCE”) ratio(8) | 9.5 | 9.6 | 9.5 | 9.6 | 8.9 | |||||||||||||||
Reconciliation of Non-GAAP Measures
We report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity (“TCE”) and tangible assets. The tables below provide the details of the calculation of our non-GAAP capital measures and regulatory capital. While our non-GAAP capital 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.
2014 | 2014 | 2014 | 2014 | 2013 | ||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | |||||||||||||||
Tangible Common Equity (Average) | ||||||||||||||||||||
Average stockholders’ equity | $ | 45,576 | $ | 44,827 | $ | 43,767 | $ | 42,859 | $ | 42,355 | ||||||||||
Average goodwill and other intangible assets(9) | (15,437 | ) | (15,525 | ) | (15,615 | ) | (15,727 | ) | (15,847 | ) | ||||||||||
Noncumulative perpetual preferred stock(10) | (1,681 | ) | (1,338 | ) | (970 | ) | (853 | ) | (853 | ) | ||||||||||
Average tangible common equity | $ | 28,458 | $ | 27,964 | $ | 27,182 | $ | 26,279 | $ | 25,655 | ||||||||||
Tangible Common Equity (Period End) | ||||||||||||||||||||
Stockholders’ equity | $ | 45,053 | $ | 44,018 | $ | 43,815 | $ | 42,801 | $ | 41,632 | ||||||||||
Goodwill and other intangible assets(9) | (15,383 | ) | (15,472 | ) | (15,564 | ) | (15,666 | ) | (15,784 | ) | ||||||||||
Noncumulative perpetual preferred stock(10) | (1,822 | ) | (1,336 | ) | (1,338 | ) | (853 | ) | (853 | ) | ||||||||||
Tangible common equity | $ | 27,848 | $ | 27,210 | $ | 26,913 | $ | 26,282 | $ | 24,995 | ||||||||||
19
2014 | 2014 | 2014 | 2014 | 2013 | ||||||||||||||||
(Dollars in millions) (unaudited) | Q4 | Q3 | Q2 | Q1 | Q4 | |||||||||||||||
Tangible Assets (Average) | ||||||||||||||||||||
Average total assets | $ | 304,711 | $ | 299,523 | $ | 294,744 | $ | 294,275 | $ | 294,040 | ||||||||||
Average goodwill and other intangible assets(9) | (15,437 | ) | (15,525 | ) | (15,615 | ) | (15,727 | ) | (15,847 | ) | ||||||||||
Average tangible assets | $ | 289,274 | $ | 283,998 | $ | 279,129 | $ | 278,548 | $ | 278,193 | ||||||||||
Tangible Assets (Period End) | ||||||||||||||||||||
Total assets | $ | 308,854 | $ | 300,202 | $ | 298,317 | $ | 290,500 | $ | 296,933 | ||||||||||
Goodwill and other intangible assets(9) | (15,383 | ) | (15,472 | ) | (15,564 | ) | (15,666 | ) | (15,784 | ) | ||||||||||
Tangible assets | $ | 293,471 | $ | 284,730 | $ | 282,753 | $ | 274,834 | $ | 281,149 | ||||||||||
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach(3)
__________
(Dollars in millions) (unaudited) | December 2014 | September 2014 | June 2014 | March 2014 | ||||||||||||
Common equity excluding AOCI | $ | 43,661 | $ | 43,241 | $ | 42,848 | $ | 42,658 | ||||||||
Adjustments: | ||||||||||||||||
AOCI(11)(12) | (69 | ) | (146 | ) | 6 | (182 | ) | |||||||||
Goodwill(9) | (13,805 | ) | (13,801 | ) | (13,811 | ) | (13,811 | ) | ||||||||
Intangible assets(9)(12) | (243 | ) | (266 | ) | (289 | ) | (314 | ) | ||||||||
Other | (10 | ) | 88 | 20 | 83 | |||||||||||
Common equity Tier 1 capital | $ | 29,534 | $ | 29,116 | $ | 28,774 | $ | 28,434 | ||||||||
Risk-weighted assets(2) | $ | 237,587 | $ | 228,759 | $ | 226,172 | $ | 219,047 | ||||||||
Common equity Tier 1 capital ratio(4) | 12.4 | % | 12.7 | % | 12.7 | % | 13.0 | % | ||||||||
(1) | Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital. |
(2) | Risk-weighted assets continue to be calculated based on Basel I in 2014. |
(3) | Regulatory capital metrics as of the end of Q4 2014 are preliminary and therefore subject to change. |
(4) | Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets. |
(5) | Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets. |
(6) | Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets. |
(7) | Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments. |
(8) | TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. |
(9) | Includes impact of related deferred taxes. |
(10) | Includes related surplus. |
(11) | Amounts presented are net of tax. |
(12) | Amounts based on transition provisions for regulatory capital deductions and adjustments of 20% for 2014. |
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