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
July 23, 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):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On July 23, 2015, Capital One Financial Corporation (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2015. Copies of the Company’s press release and financial supplement are attached and furnished herewith as Exhibits 99.1 and 99.2 to this Form 8-K and are incorporated herein by reference.
Note: Information in this report (including Exhibits 99.1 and 99.2) furnished pursuant to Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits. |
Exhibit No. | Description of Exhibit | |
99.1 | Press Release, dated July 23, 2015 – Second Quarter 2015 | |
99.2 | Financial Supplement – Second Quarter 2015 | |
Earnings Conference Call Webcast Information.
The Company will hold an earnings conference call on July 23, 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 August 3, 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: July 23, 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: July 23, 2015
Capital One Reports Second Quarter 2015 Net Income of $863 million,
or $1.50 per share
or $1.50 per share
EPS from Continuing Operations of $1.48; EPS excluding Adjusting Items of $1.78
McLean, Va. (July 23, 2015) – Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2015 of $863 million, or $1.50 per diluted common share, compared to the first quarter of 2015 with net income of $1.2 billion, or $2.00 per diluted common share, and the second quarter of 2014 with net income of $1.2 billion, or $2.04 per diluted common share. Net income for the second quarter of 2015, adjusted for the impact of restructuring charges of $147 million and a build in the U.K. PPI reserve of $78 million, was $1.0 billion or $1.78 per diluted common share.
“Capital One continues to deliver attractive risk-adjusted returns today and invest to sustain growth and returns over the long term,” said Richard D. Fairbank, Chair and Chief Executive Officer. “We remain compelled by the opportunity, need, and urgency of digital transformation, and we continue to see growth opportunities across our businesses, particularly in Domestic Card. Capital One is well positioned to sustain attractive shareholder returns over the long term.”
All comparisons below are for the second quarter of 2015 compared with the first quarter of 2015 unless otherwise noted.
Second Quarter 2015 Income Statement Summary:
• | Total net revenue remained flat at $5.7 billion, including ($37) million of contra-revenue from a build in the U.K. PPI reserve. |
• | Total non-interest expense increased 8 percent to $3.3 billion: |
• | 3 percent increase in marketing. |
• | 10 percent increase in operating expense, including $147 million in restructuring charges and a build of $41 million in the U.K. PPI reserve. |
• | Pre-provision earnings decreased 9 percent to $2.4 billion. |
• | Provision for credit losses increased 21 percent to $1.1 billion. |
Capital One Second Quarter 2015 Earnings
Page 2
• | Mortgage representation & warranty benefit of $36 million, including $27 million ($17 million net of tax) in discontinued operations. |
• | Efficiency ratio of 58.30 percent; Efficiency ratio excluding restructuring charges and a build in the U.K. PPI reserve of 54.63 percent. |
Second Quarter 2015 Balance Sheet Summary:
• | Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.1 percent at June 30, 2015. |
• | Net interest margin of 6.56 percent, down 1 basis points; Net interest margin excluding the contra-revenue impact of the build in the U.K. PPI reserve of 6.58 percent. |
• | Period-end loans held for investment in the quarter increased $5.7 billion, or 3 percent, to $209.7 billion. |
• | Domestic Card period-end loans increased $4.9 billion, or 7 percent, to $79.0 billion. |
• | Consumer Banking period-end loans decreased $203 million, or less than 1 percent, to $71.2 billion: |
• | Auto period-end loans increased $1.1 billion, or 3 percent, to $40.0 billion. |
• | Home loans period-end loans decreased $1.3 billion, or 5 percent, to $27.6 billion, driven by run-off of acquired portfolios. |
• | Commercial Banking period-end loans increased $490 million, or less than 1 percent, to $51.2 billion. |
• | Average loans held for investment in the quarter increased $1.1 billion, or less than 1 percent, to $206.3 billion. |
• | Domestic Card average loans increased $1.2 billion, or 2 percent, to $75.9 billion. |
• | Consumer Banking average loans decreased $74 million, or less than 1 percent, to $71.4 billion: |
• | Auto average loans increased $1.2 billion, or 3 percent, to $39.5 billion. |
• | Home loans average loans decreased by $1.2 billion, or 4 percent, to $28.3 billion, driven by run-off of acquired portfolios. |
• | Commercial Banking average loans decreased $94 million, or less than 1 percent, to $51.0 billion. |
• | Period-end total deposits decreased $1.7 billion, or less than 1 percent, to $208.8 billion, while average deposits increased $1.3 billion to $209.1 billion. |
• | Interest-bearing deposit rate remained relatively flat at 0.59 percent. |
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on July 23, 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 August 3, 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 listed from
Capital One Second Quarter 2015 Earnings
Page 3
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, 2014.
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 $208.8 billion in deposits and $310.5 billion in total assets as of June 30, 2015. 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
Second Quarter 2015(1)
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 Summary, 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 Segment Results | |||
Table 8: | Financial Summary—Business Segment Results | ||
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 Quarterly Report on Form 10-Q for the period ended June 30, 2015 once it is filed with the Securities and Exchange Commission. |
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary—Consolidated(1)
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data and as noted) (unaudited) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | 2015 vs. | |||||||||||||||||||||||||||||
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | ||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 4,537 | $ | 4,576 | $ | 4,656 | $ | 4,497 | $ | 4,315 | (1)% | 5% | $ | 9,113 | $ | 8,665 | 5% | ||||||||||||||||||||
Non-interest income(2) | 1,135 | 1,071 | 1,157 | 1,142 | 1,153 | 6 | (2 | ) | 2,206 | 2,173 | 2 | ||||||||||||||||||||||||||
Total net revenue(3) | 5,672 | 5,647 | 5,813 | 5,639 | 5,468 | — | 4 | 11,319 | 10,838 | 4 | |||||||||||||||||||||||||||
Provision for credit losses | 1,129 | 935 | 1,109 | 993 | 704 | 21 | 60 | 2,064 | 1,439 | 43 | |||||||||||||||||||||||||||
Non-interest expense: | |||||||||||||||||||||||||||||||||||||
Marketing | 387 | 375 | 509 | 392 | 335 | 3 | 16 | 762 | 660 | 15 | |||||||||||||||||||||||||||
Amortization of intangibles | 111 | 110 | 123 | 130 | 136 | 1 | (18 | ) | 221 | 279 | (21 | ) | |||||||||||||||||||||||||
Operating expenses(4) | 2,809 | 2,564 | 2,652 | 2,463 | 2,508 | 10 | 12 | 5,373 | 4,972 | 8 | |||||||||||||||||||||||||||
Total non-interest expense | 3,307 | 3,049 | 3,284 | 2,985 | 2,979 | 8 | 11 | 6,356 | 5,911 | 8 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 1,236 | 1,663 | 1,420 | 1,661 | 1,785 | (26 | ) | (31 | ) | 2,899 | 3,488 | (17 | ) | ||||||||||||||||||||||||
Income tax provision | 384 | 529 | 450 | 536 | 581 | (27 | ) | (34 | ) | 913 | 1,160 | (21 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | 852 | 1,134 | 970 | 1,125 | 1,204 | (25 | ) | (29 | ) | 1,986 | 2,328 | (15 | ) | ||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax(2) | 11 | 19 | 29 | (44 | ) | (10 | ) | (42 | ) | ** | 30 | 20 | 50 | ||||||||||||||||||||||||
Net income | 863 | 1,153 | 999 | 1,081 | 1,194 | (25 | ) | (28 | ) | 2,016 | 2,348 | (14 | ) | ||||||||||||||||||||||||
Dividends and undistributed earnings allocated to participating securities(5) | (4 | ) | (6 | ) | (4 | ) | (5 | ) | (4 | ) | (33 | ) | — | (10 | ) | (9 | ) | 11 | |||||||||||||||||||
Preferred stock dividends(5) | (29 | ) | (32 | ) | (21 | ) | (20 | ) | (13 | ) | (9 | ) | 123 | (61 | ) | (26 | ) | 135 | |||||||||||||||||||
Net income available to common stockholders | $ | 830 | $ | 1,115 | $ | 974 | $ | 1,056 | $ | 1,177 | (26 | ) | (29 | ) | $ | 1,945 | $ | 2,313 | (16 | ) | |||||||||||||||||
Common Share Statistics | |||||||||||||||||||||||||||||||||||||
Basic earnings per common share:(5) | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 1.50 | $ | 2.00 | $ | 1.71 | $ | 1.97 | $ | 2.09 | (25)% | (28)% | $ | 3.49 | $ | 4.03 | (13)% | ||||||||||||||||||||
Income (loss) from discontinued operations | 0.02 | 0.03 | 0.05 | (0.08 | ) | (0.02 | ) | (33 | ) | ** | 0.06 | 0.03 | 100 | ||||||||||||||||||||||||
Net income per basic common share | $ | 1.52 | $ | 2.03 | $ | 1.76 | $ | 1.89 | $ | 2.07 | (25 | ) | (27 | ) | $ | 3.55 | $ | 4.06 | (13 | ) | |||||||||||||||||
Diluted earnings per common share:(5) | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 1.48 | $ | 1.97 | $ | 1.68 | $ | 1.94 | $ | 2.06 | (25 | ) | (28 | ) | $ | 3.45 | $ | 3.97 | (13 | ) | |||||||||||||||||
Income (loss) from discontinued operations | 0.02 | 0.03 | 0.05 | (0.08 | ) | (0.02 | ) | (33 | ) | ** | 0.06 | 0.03 | 100 | ||||||||||||||||||||||||
Net income per diluted common share(6) | $ | 1.50 | $ | 2.00 | $ | 1.73 | $ | 1.86 | $ | 2.04 | (25 | ) | (26 | ) | $ | 3.51 | $ | 4.00 | (12 | ) | |||||||||||||||||
Weighted-average common shares outstanding (in millions): | |||||||||||||||||||||||||||||||||||||
Basic | 545.6 | 550.2 | 554.3 | 559.9 | 567.5 | (1 | ) | (4 | ) | 548.0 | 569.2 | (4 | ) | ||||||||||||||||||||||||
Diluted | 552.0 | 557.2 | 561.8 | 567.9 | 577.6 | (1 | ) | (4 | ) | 554.7 | 578.9 | (4 | ) | ||||||||||||||||||||||||
Common shares outstanding (period end, in millions) | 542.5 | 548.0 | 553.4 | 558.5 | 561.8 | (1 | ) | (3 | ) | 542.5 | 561.8 | (3 | ) | ||||||||||||||||||||||||
Dividends paid per common share | $ | 0.40 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | 33 | 33 | $ | 0.70 | $ | 0.60 | 17 | ||||||||||||||||||||
Tangible book value per common share (period end)(7) | 52.74 | 52.19 | 50.32 | 48.72 | 47.90 | 1 | 10 | 52.74 | 47.90 | 10 | |||||||||||||||||||||||||||
1
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | 2015 vs. | |||||||||||||||||||||||||||
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | ||||||||||||||||||||||||||
Balance Sheet (Period End) | |||||||||||||||||||||||||||||||||||
Loans held for investment(8) | $ | 209,705 | $ | 203,978 | $ | 208,316 | $ | 201,592 | $ | 198,528 | 3% | 6% | $ | 209,705 | $ | 198,528 | 6% | ||||||||||||||||||
Interest-earning assets | 280,137 | 275,837 | 277,849 | 270,001 | 266,720 | 2 | 5 | 280,137 | 266,720 | 5 | |||||||||||||||||||||||||
Total assets | 310,510 | 306,224 | 308,167 | 299,640 | 297,434 | 1 | 4 | 310,510 | 297,434 | 4 | |||||||||||||||||||||||||
Interest-bearing deposits | 183,657 | 185,208 | 180,467 | 178,876 | 180,970 | (1 | ) | 1 | 183,657 | 180,970 | 1 | ||||||||||||||||||||||||
Total deposits | 208,780 | 210,440 | 205,548 | 204,264 | 205,890 | (1 | ) | 1 | 208,780 | 205,890 | 1 | ||||||||||||||||||||||||
Borrowings | 45,766 | 41,029 | 48,457 | 42,243 | 39,114 | 12 | 17 | 45,766 | 39,114 | 17 | |||||||||||||||||||||||||
Common equity | 43,849 | 43,908 | 43,231 | 42,682 | 42,477 | — | 3 | 43,849 | 42,477 | 3 | |||||||||||||||||||||||||
Total stockholders’ equity | 46,659 | 45,730 | 45,053 | 44,018 | 43,815 | 2 | 6 | 46,659 | 43,815 | 6 | |||||||||||||||||||||||||
Balance Sheet (Average Balances) | |||||||||||||||||||||||||||||||||||
Loans held for investment(8) | $ | 206,337 | $ | 205,194 | $ | 203,436 | $ | 199,422 | $ | 194,996 | 1% | 6% | $ | 205,768 | $ | 194,362 | 6% | ||||||||||||||||||
Interest-earning assets | 276,585 | 278,427 | 273,436 | 268,890 | 263,570 | (1 | ) | 5 | 277,501 | 263,119 | 5 | ||||||||||||||||||||||||
Total assets | 307,206 | 309,401 | 304,153 | 298,913 | 294,089 | (1 | ) | 4 | 308,295 | 293,798 | 5 | ||||||||||||||||||||||||
Interest-bearing deposits | 183,946 | 182,998 | 179,401 | 179,928 | 182,053 | 1 | 1 | 183,475 | 182,431 | 1 | |||||||||||||||||||||||||
Total deposits | 209,143 | 207,851 | 205,355 | 205,199 | 206,315 | 1 | 1 | 208,501 | 206,080 | 1 | |||||||||||||||||||||||||
Borrowings | 41,650 | 46,082 | 43,479 | 40,314 | 35,658 | (10 | ) | 17 | 43,854 | 35,817 | 22 | ||||||||||||||||||||||||
Common equity | 44,878 | 44,575 | 43,895 | 43,489 | 42,797 | 1 | 5 | 44,727 | 42,408 | 5 | |||||||||||||||||||||||||
Total stockholders’ equity | 47,255 | 46,397 | 45,576 | 44,827 | 43,767 | 2 | 8 | 46,828 | 43,320 | 8 | |||||||||||||||||||||||||
2
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated(1)
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
(Dollars in millions except as noted) (unaudited) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | 2015 vs. | |||||||||||||||||||||||||||||
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | ||||||||||||||||||||||||||||
Performance Metrics | |||||||||||||||||||||||||||||||||||||
Net interest income growth (quarter over quarter) | (1)% | (2)% | 4% | 4% | (1)% | ** | ** | 5% | (5)% | ** | |||||||||||||||||||||||||||
Non-interest income growth (quarter over quarter) | 6 | (7 | ) | 1 | (1 | ) | 13 | ** | ** | 2 | 5 | ** | |||||||||||||||||||||||||
Total net revenue growth (quarter over quarter) | — | (3 | ) | 3 | 3 | 2 | ** | ** | 4 | (3 | ) | ** | |||||||||||||||||||||||||
Total net revenue margin(9) | 8.20 | 8.11 | 8.50 | 8.39 | 8.30 | 9 | bps | (10 | )bps | 8.16 | 8.24 | (8 | )bps | ||||||||||||||||||||||||
Net interest margin(10) | 6.56 | 6.57 | 6.81 | 6.69 | 6.55 | (1 | ) | 1 | 6.57 | 6.59 | (2 | ) | |||||||||||||||||||||||||
Return on average assets | 1.11 | 1.47 | 1.28 | 1.51 | 1.64 | (36 | ) | (53 | ) | 1.29 | 1.58 | (29 | ) | ||||||||||||||||||||||||
Return on average tangible assets(11) | 1.17 | 1.54 | 1.34 | 1.59 | 1.73 | (37 | ) | (56 | ) | 1.36 | 1.67 | (31 | ) | ||||||||||||||||||||||||
Return on average common equity(12) | 7.30 | 9.84 | 8.61 | 10.12 | 11.09 | (254 | ) | (379 | ) | 8.56 | 10.81 | (225 | ) | ||||||||||||||||||||||||
Return on average tangible common equity(13) | 11.06 | 15.00 | 13.28 | 15.73 | 17.47 | (394 | ) | (641 | ) | 13.01 | 17.15 | (414 | ) | ||||||||||||||||||||||||
Non-interest expense as a percentage of average loans held for investment | 6.41 | 5.94 | 6.46 | 5.99 | 6.11 | 47 | 30 | 6.18 | 6.08 | 10 | |||||||||||||||||||||||||||
Efficiency ratio(14) | 58.30 | 53.99 | 56.49 | 52.93 | 54.48 | 431 | 382 | 56.15 | 54.54 | 161 | |||||||||||||||||||||||||||
Effective income tax rate for continuing operations | 31.1 | 31.8 | 31.7 | 32.3 | 32.5 | (70 | ) | (140 | ) | 31.5 | 33.3 | (180 | ) | ||||||||||||||||||||||||
Employees (in thousands), period end | 47.5 | 47.0 | 46.0 | 44.9 | 44.6 | 1% | 7% | 47.5 | 44.6 | 7% | |||||||||||||||||||||||||||
Credit Quality Metrics(8) | |||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses | $ | 4,676 | $ | 4,405 | $ | 4,383 | $ | 4,212 | $ | 3,998 | 6% | 17% | $ | 4,676 | $ | 3,998 | 17% | ||||||||||||||||||||
Allowance as a percentage of loans held for investment | 2.23% | 2.16% | 2.10% | 2.09% | 2.01% | 7 | bps | 22 | bps | 2.23% | 2.01% | 22 | bps | ||||||||||||||||||||||||
Allowance as a percentage of loans held for investment (excluding acquired loans) | 2.46 | 2.41 | 2.36 | 2.37 | 2.30 | 5 | 16 | 2.46 | 2.30 | 16 | |||||||||||||||||||||||||||
Net charge-offs | $ | 846 | $ | 881 | $ | 915 | $ | 756 | $ | 812 | (4)% | 4% | $ | 1,727 | $ | 1,743 | (1)% | ||||||||||||||||||||
Net charge-off rate(15) | 1.64% | 1.72% | 1.80% | 1.52% | 1.67% | (8 | )bps | (3 | )bps | 1.68% | 1.79 | % | (11 | )bps | |||||||||||||||||||||||
Net charge-off rate (excluding acquired loans)(15) | 1.83 | 1.93 | 2.04 | 1.73 | 1.93 | (10 | ) | (10 | ) | 1.88 | 2.08 | (20 | ) | ||||||||||||||||||||||||
30+ day performing delinquency rate | 2.33 | 2.32 | 2.62 | 2.46 | 2.24 | 1 | 9 | 2.33 | 2.24 | 9 | |||||||||||||||||||||||||||
30+ day performing delinquency rate (excluding acquired loans) | 2.59 | 2.61 | 2.95 | 2.81 | 2.58 | (2 | ) | 1 | 2.59 | 2.58 | 1 | ||||||||||||||||||||||||||
30+ day delinquency rate | 2.65 | 2.58 | 2.91 | 2.76 | 2.53 | 7 | 12 | 2.65 | 2.53 | 12 | |||||||||||||||||||||||||||
30+ day delinquency rate (excluding acquired loans) | 2.94 | 2.90 | 3.28 | 3.14 | 2.91 | 4 | 3 | 2.94 | 2.91 | 3 | |||||||||||||||||||||||||||
Capital Ratios(16) | |||||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio | 12.1% | 12.5% | 12.5% | 12.7% | 12.7% | (40 | )bps | (60 | )bps | 12.1% | 12.7 | % | (60 | )bps | |||||||||||||||||||||||
Tier 1 risk-based capital ratio | 13.3 | 13.2 | 13.2 | 13.3 | 13.3 | 10 | — | 13.3 | 13.3 | — | |||||||||||||||||||||||||||
Total risk-based capital ratio | 15.1 | 15.1 | 15.1 | 15.2 | 15.4 | — | (30 | ) | 15.1 | 15.4 | (30 | ) | |||||||||||||||||||||||||
Tier 1 leverage ratio | 11.1 | 10.7 | 10.8 | 10.6 | 10.7 | 40 | 40 | 11.1 | 10.7 | 40 | |||||||||||||||||||||||||||
Tangible common equity (“TCE”) ratio(17) | 9.7 | 9.8 | 9.5 | 9.6 | 9.5 | (10 | ) | 20 | 9.7 | 9.5 | 20 | ||||||||||||||||||||||||||
3
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
Three Months Ended | 2015 Q2 vs. | Six Months Ended June 30, | |||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2015 | 2014 | 2015 vs. | ||||||||||||||||||||||||
(Dollars in millions, except per share data and as noted) (unaudited) | Q2 | Q1 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | |||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||||
Loans, including loans held for sale | $ | 4,531 | $ | 4,540 | $ | 4,279 | — | 6% | $ | 9,071 | $ | 8,586 | 6% | ||||||||||||||||
Investment securities | 382 | 406 | 409 | (6)% | (7 | ) | 788 | 825 | (4 | ) | |||||||||||||||||||
Other | 24 | 28 | 24 | (14 | ) | — | 52 | 54 | (4 | ) | |||||||||||||||||||
Total interest income | 4,937 | 4,974 | 4,712 | (1 | ) | 5 | 9,911 | 9,465 | 5 | ||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||||
Deposits | 272 | 271 | 272 | — | — | 543 | 548 | (1 | ) | ||||||||||||||||||||
Securitized debt obligations | 36 | 33 | 39 | 9 | (8 | ) | 69 | 77 | (10 | ) | |||||||||||||||||||
Senior and subordinated notes | 80 | 79 | 78 | 1 | 3 | 159 | 155 | 3 | |||||||||||||||||||||
Other borrowings | 12 | 15 | 8 | (20 | ) | 50 | 27 | 20 | 35 | ||||||||||||||||||||
Total interest expense | 400 | 398 | 397 | 1 | 1 | 798 | 800 | — | |||||||||||||||||||||
Net interest income | 4,537 | 4,576 | 4,315 | (1 | ) | 5 | 9,113 | 8,665 | 5 | ||||||||||||||||||||
Provision for credit losses | 1,129 | 935 | 704 | 21 | 60 | 2,064 | 1,439 | 43 | |||||||||||||||||||||
Net interest income after provision for credit losses | 3,408 | 3,641 | 3,611 | (6 | ) | (6 | ) | 7,049 | 7,226 | (2 | ) | ||||||||||||||||||
Non-interest income:(2) | |||||||||||||||||||||||||||||
Service charges and other customer-related fees | 429 | 437 | 460 | (2 | ) | (7 | ) | 866 | 934 | (7 | ) | ||||||||||||||||||
Interchange fees, net | 567 | 496 | 535 | 14 | 6 | 1,063 | 975 | 9 | |||||||||||||||||||||
Net other-than-temporary impairment recognized in earnings | (7 | ) | (15 | ) | (1 | ) | (53 | ) | 600 | (22 | ) | (6 | ) | 267 | |||||||||||||||
Other | 146 | 153 | 159 | (5 | ) | (8 | ) | 299 | 270 | 11 | |||||||||||||||||||
Total non-interest income | 1,135 | 1,071 | 1,153 | 6 | (2 | ) | 2,206 | 2,173 | 2 | ||||||||||||||||||||
Non-interest expense: | |||||||||||||||||||||||||||||
Salaries and associate benefits | 1,360 | 1,211 | 1,125 | 12 | 21 | 2,571 | 2,286 | 12 | |||||||||||||||||||||
Occupancy and equipment | 439 | 435 | 447 | 1 | (2 | ) | 874 | 852 | 3 | ||||||||||||||||||||
Marketing | 387 | 375 | 335 | 3 | 16 | 762 | 660 | 15 | |||||||||||||||||||||
Professional services | 334 | 296 | 296 | 13 | 13 | 630 | 583 | 8 | |||||||||||||||||||||
Communications and data processing | 208 | 202 | 203 | 3 | 2 | 410 | 399 | 3 | |||||||||||||||||||||
Amortization of intangibles | 111 | 110 | 136 | 1 | (18 | ) | 221 | 279 | (21 | ) | |||||||||||||||||||
Other | 468 | 420 | 437 | 11 | 7 | 888 | 852 | 4 | |||||||||||||||||||||
Total non-interest expense | 3,307 | 3,049 | 2,979 | 8 | 11 | 6,356 | 5,911 | 8 | |||||||||||||||||||||
Income from continuing operations before income taxes | 1,236 | 1,663 | 1,785 | (26 | ) | (31 | ) | 2,899 | 3,488 | (17 | ) | ||||||||||||||||||
Income tax provision | 384 | 529 | 581 | (27 | ) | (34 | ) | 913 | 1,160 | (21 | ) | ||||||||||||||||||
Income from continuing operations, net of tax | 852 | 1,134 | 1,204 | (25 | ) | (29 | ) | 1,986 | 2,328 | (15 | ) | ||||||||||||||||||
Income (loss) from discontinued operations, net of tax(2) | 11 | 19 | (10 | ) | (42 | ) | ** | 30 | 20 | 50 | |||||||||||||||||||
Net income | 863 | 1,153 | 1,194 | (25 | ) | (28 | ) | 2,016 | 2,348 | (14 | ) | ||||||||||||||||||
Dividends and undistributed earnings allocated to participating securities(5) | (4 | ) | (6 | ) | (4 | ) | (33 | ) | — | (10 | ) | (9 | ) | 11 | |||||||||||||||
Preferred stock dividends(5) | (29 | ) | (32 | ) | (13 | ) | (9 | ) | 123 | (61 | ) | (26 | ) | 135 | |||||||||||||||
Net income available to common stockholders | $ | 830 | $ | 1,115 | $ | 1,177 | (26 | ) | (29 | ) | $ | 1,945 | $ | 2,313 | (16 | ) | |||||||||||||
4
Three Months Ended | 2015 Q2 vs. | Six Months Ended June 30, | |||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2015 | 2014 | 2015 vs. | ||||||||||||||||||||||||
(Dollars in millions, except per share data and as noted) (unaudited) | Q2 | Q1 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | |||||||||||||||||||||
Basic earnings per common share:(5) | |||||||||||||||||||||||||||||
Net income from continuing operations | $ | 1.50 | $ | 2.00 | $ | 2.09 | (25)% | (28)% | $ | 3.49 | $ | 4.03 | (13)% | ||||||||||||||||
Income (loss) from discontinued operations | 0.02 | 0.03 | (0.02 | ) | (33 | ) | ** | 0.06 | 0.03 | 100 | |||||||||||||||||||
Net income per basic common share | $ | 1.52 | $ | 2.03 | $ | 2.07 | (25 | ) | (27 | ) | $ | 3.55 | $ | 4.06 | (13 | ) | |||||||||||||
Diluted earnings per common share:(5) | |||||||||||||||||||||||||||||
Net income from continuing operations | $ | 1.48 | $ | 1.97 | $ | 2.06 | (25 | ) | (28 | ) | $ | 3.45 | $ | 3.97 | (13 | ) | |||||||||||||
Income (loss) from discontinued operations | 0.02 | 0.03 | (0.02 | ) | (33 | ) | ** | 0.06 | 0.03 | 100 | |||||||||||||||||||
Net income per diluted common share(6) | $ | 1.50 | $ | 2.00 | $ | 2.04 | (25 | ) | (26 | ) | $ | 3.51 | $ | 4.00 | (12 | ) | |||||||||||||
Weighted average common shares outstanding (in millions): | |||||||||||||||||||||||||||||
Basic common shares | 545.6 | 550.2 | 567.5 | (1 | ) | (4 | ) | 548.0 | 569.2 | (4 | ) | ||||||||||||||||||
Diluted common shares | 552.0 | 557.2 | 577.6 | (1 | ) | (4 | ) | 554.7 | 578.9 | (4 | ) | ||||||||||||||||||
Dividends paid per common share | $ | 0.40 | $ | 0.30 | $ | 0.30 | 33 | 33 | $ | 0.70 | $ | 0.60 | 17 | ||||||||||||||||
5
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets(1)
June 30, 2015 vs. | ||||||||||||||||||
(Dollars in millions) (unaudited) | June 30, 2015 | December 31, 2014 | June 30, 2014 | December 31, 2014 | June 30, 2014 | |||||||||||||
Assets: | ||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||
Cash and due from banks | $ | 2,879 | $ | 3,147 | $ | 3,598 | (9)% | (20)% | ||||||||||
Interest-bearing deposits with banks | 4,275 | 4,095 | 2,954 | 4 | 45 | |||||||||||||
Federal funds sold and securities purchased under agreements to resell | 2 | 0 | 180 | ** | (99 | ) | ||||||||||||
Total cash and cash equivalents | 7,156 | 7,242 | 6,732 | (1 | ) | 6 | ||||||||||||
Restricted cash for securitization investors | 253 | 234 | 361 | 8 | (30 | ) | ||||||||||||
Securities available for sale, at fair value | 39,136 | 39,508 | 41,113 | (1 | ) | (5 | ) | |||||||||||
Securities held to maturity, at carrying value | 23,668 | 22,500 | 20,688 | 5 | 14 | |||||||||||||
Loans held for investment:(8) | ||||||||||||||||||
Unsecuritized loans held for investment | 175,407 | 171,771 | 161,224 | 2 | 9 | |||||||||||||
Restricted loans for securitization investors | 34,298 | 36,545 | 37,304 | (6 | ) | (8 | ) | |||||||||||
Total loans held for investment | 209,705 | 208,316 | 198,528 | 1 | 6 | |||||||||||||
Allowance for loan and lease losses | (4,676 | ) | (4,383 | ) | (3,998 | ) | 7 | 17 | ||||||||||
Net loans held for investment | 205,029 | 203,933 | 194,530 | 1 | 5 | |||||||||||||
Loans held for sale, at lower of cost or fair value | 1,066 | 626 | 709 | 70 | 50 | |||||||||||||
Premises and equipment, net | 3,602 | 3,685 | 3,764 | (2 | ) | (4 | ) | |||||||||||
Interest receivable | 1,056 | 1,079 | 1,012 | (2 | ) | 4 | ||||||||||||
Goodwill | 13,984 | 13,978 | 13,977 | — | — | |||||||||||||
Other assets | 15,560 | 15,382 | 14,548 | 1 | 7 | |||||||||||||
Total assets | $ | 310,510 | $ | 308,167 | $ | 297,434 | 1 | 4 | ||||||||||
6
June 30, 2015 vs. | ||||||||||||||||||
(Dollars in millions) (unaudited) | June 30, 2015 | December 31, 2014 | June 30, 2014 | December 31, 2014 | June 30, 2014 | |||||||||||||
Liabilities: | ||||||||||||||||||
Interest payable | $ | 262 | $ | 254 | $ | 234 | 3% | 12% | ||||||||||
Deposits: | ||||||||||||||||||
Non-interest bearing deposits | 25,123 | 25,081 | 24,920 | — | 1 | |||||||||||||
Interest-bearing deposits | 183,657 | 180,467 | 180,970 | 2 | 1 | |||||||||||||
Total deposits | 208,780 | 205,548 | 205,890 | 2 | 1 | |||||||||||||
Securitized debt obligations | 13,785 | 11,624 | 10,010 | 19 | 38 | |||||||||||||
Other debt: | ||||||||||||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase | 1,888 | 880 | 2,030 | 115 | (7 | ) | ||||||||||||
Senior and subordinated notes | 19,987 | 18,684 | 16,628 | 7 | 20 | |||||||||||||
Other borrowings | 10,106 | 17,269 | 10,446 | (41 | ) | (3 | ) | |||||||||||
Total other debt | 31,981 | 36,833 | 29,104 | (13 | ) | 10 | ||||||||||||
Other liabilities | 9,043 | 8,855 | 8,381 | 2 | 8 | |||||||||||||
Total liabilities | 263,851 | 263,114 | 253,619 | — | 4 | |||||||||||||
Stockholders’ equity: | ||||||||||||||||||
Preferred stock | 0 | 0 | 0 | — | — | |||||||||||||
Common stock | 6 | 6 | 6 | — | — | |||||||||||||
Additional paid-in capital, net | 29,063 | 27,869 | 27,210 | 4 | 7 | |||||||||||||
Retained earnings | 25,540 | 23,973 | 22,270 | 7 | 15 | |||||||||||||
Accumulated other comprehensive income (“AOCI”) | (397 | ) | (430 | ) | (371 | ) | (8 | ) | 7 | |||||||||
Treasury stock, at cost | (7,553 | ) | (6,365 | ) | (5,300 | ) | 19 | 43 | ||||||||||
Total stockholders’ equity | 46,659 | 45,053 | 43,815 | 4 | 6 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 310,510 | $ | 308,167 | $ | 297,434 | 1 | 4 | ||||||||||
7
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)
** | Not meaningful. |
(1) | As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the related right to reclaim cash collateral or obligation to return cash collateral. Prior period results, excluding regulatory ratios, have been recast to conform to this presentation. |
(2) | Mortgage representation and warranty reserve is comprised of the following: |
2015 | 2015 | 2014 | 2014 | 2014 | ||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
(Benefit) provision for mortgage representation and warranty losses before income taxes: | ||||||||||||||||||||
Recorded in continuing operations | $ | (9 | ) | $ | 1 | $ | (11 | ) | $ | — | $ | (29 | ) | |||||||
Recorded in discontinued operations | (27 | ) | (19 | ) | (41 | ) | 70 | 11 | ||||||||||||
Total (benefit) provision for mortgage representation and warranty losses before income taxes | $ | (36 | ) | $ | (18 | ) | $ | (52 | ) | $ | 70 | $ | (18 | ) | ||||||
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 $636 million as of June 30, 2015, $731 million as of December 31, 2014 and $1.0 billion as of June 30, 2014.
(3) | Total net revenue was reduced by $168 million in Q2 2015, $147 million in Q1 2015, $165 million in Q4 2014, $164 million in Q3 2014 and $153 million in Q2 2014 for the estimated uncollectible amount of billed finance charges and fees. |
(4) | Includes acquisition-related costs of $8 million in Q2 2015, $7 million in Q1 2015, $10 million in Q4 2014, $13 million in Q3 2014 and $18 million in Q2 2014. 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) We recorded restructuring charges of $147 million under our existing benefit plans as a result of the realignment of our workforce, and a $78 million build in the U.K. Payment Protection Insurance customer refund reserve (“U.K. PPI Reserve”), reflecting our updated estimate of future complaint levels. We report the following non-GAAP financial measures that we believe are helpful for investors to understand the effect of these items on our reported results as they provide an additional presentation of our performance. The table below presents a reconciliation of our reported results to these non-GAAP financial measures:
(Dollars in millions, except per share data) (unaudited) | Pretax Income | Net Income | Net Income Available to Common Stockholders | Diluted EPS | ||||||||||||
Reported results | $ | 1,236 | $ | 863 | $ | 830 | $ | 1.50 | ||||||||
Restructuring charges and build in the U.K. PPI Reserve | 225 | 155 | 155 | 0.28 | ||||||||||||
Adjusted results | $ | 1,461 | $ | 1,018 | $ | 985 | $ | 1.78 | ||||||||
(7) | 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. |
(8) | 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 2012 transaction where we acquired the assets and assumed the liabilities of substantially all of ING Direct; (ii) the February 2009 Chevy Chase Bank acquisition; and (iii) the May 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”, or Accounting Standard Codification 310-30). The table below presents amounts related to acquired loans accounted for under SOP 03-3: |
2015 | 2015 | 2014 | 2014 | 2014 | ||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Acquired loans accounted for under SOP 03-3: | ||||||||||||||||||||
Period-end unpaid principal balance | $ | 21,841 | $ | 23,248 | $ | 24,473 | $ | 25,726 | $ | 27,117 | ||||||||||
Period-end loans held for investment | 20,970 | 22,334 | 23,500 | 24,685 | 26,019 | |||||||||||||||
Average loans held for investment | 21,440 | 22,773 | 23,907 | 25,104 | 26,491 | |||||||||||||||
(9) | Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period. |
8
(10) | Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period. |
(11) | 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. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information. |
(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 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. |
(13) | 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. |
(14) | Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the restructuring charges and build in the U.K. PPI Reserve discussed above in Footnote 6, was 54.63% for Q2 2015. |
(15) | Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. |
(16) | Ratios as of the end of Q2 2015 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. |
9
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
2015 Q2 | 2015 Q1 | 2014 Q2 | ||||||||||||||||||||||||||||
Average Balance | Interest Income/Expense(1) | Yield/Rate(1) | Average Balance | Interest Income/Expense(1) | Yield/Rate(1) | Average Balance | Interest Income/Expense(1) | Yield/Rate(1) | ||||||||||||||||||||||
(Dollars in millions) (unaudited) | ||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||
Loans, including loans held for sale | $ | 207,335 | $ | 4,531 | 8.74% | $ | 205,854 | $ | 4,540 | 8.82% | $ | 195,322 | $ | 4,279 | 8.76% | |||||||||||||||
Investment securities | 63,771 | 382 | 2.40 | 63,181 | 406 | 2.57 | 62,518 | 409 | 2.62 | |||||||||||||||||||||
Cash equivalents and other | 5,479 | 24 | 1.75 | 9,392 | 28 | 1.19 | 5,730 | 24 | 1.68 | |||||||||||||||||||||
Total interest-earning assets | $ | 276,585 | $ | 4,937 | 7.14 | $ | 278,427 | $ | 4,974 | 7.15 | $ | 263,570 | $ | 4,712 | 7.15 | |||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 183,946 | $ | 272 | 0.59 | $ | 182,998 | $ | 271 | 0.59 | $ | 182,053 | $ | 272 | 0.60 | |||||||||||||||
Securitized debt obligations | 13,219 | 36 | 1.09 | 11,563 | 33 | 1.14 | 10,731 | 39 | 1.45 | |||||||||||||||||||||
Senior and subordinated notes | 20,336 | 80 | 1.57 | 20,595 | 79 | 1.53 | 16,004 | 78 | 1.95 | |||||||||||||||||||||
Other borrowings and liabilities | 8,857 | 12 | 0.54 | 14,721 | 15 | 0.41 | 8,923 | 8 | 0.36 | |||||||||||||||||||||
Total interest-bearing liabilities | $ | 226,358 | $ | 400 | 0.71 | $ | 229,877 | $ | 398 | 0.69 | $ | 217,711 | $ | 397 | 0.73 | |||||||||||||||
Net interest income/spread | $ | 4,537 | 6.43 | $ | 4,576 | 6.46 | $ | 4,315 | 6.42 | |||||||||||||||||||||
Impact of non-interest bearing funding | 0.13 | 0.11 | 0.13 | |||||||||||||||||||||||||||
Net interest margin | 6.56% | 6.57% | 6.55% | |||||||||||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
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 | $ | 206,598 | $ | 9,071 | 8.78% | $ | 194,674 | $ | 8,586 | 8.82% | ||||||||||
Investment securities | 63,477 | 788 | 2.48 | 62,322 | 825 | 2.65 | ||||||||||||||
Cash equivalents and other | 7,426 | 52 | 1.40 | 6,123 | 54 | 1.76 | ||||||||||||||
Total interest-earning assets | $ | 277,501 | $ | 9,911 | 7.14 | $ | 263,119 | $ | 9,465 | 7.19 | ||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing deposits | $ | 183,475 | $ | 543 | 0.59 | $ | 182,431 | $ | 548 | 0.60 | ||||||||||
Securitized debt obligations | 12,396 | 69 | 1.11 | 10,576 | 77 | 1.46 | ||||||||||||||
Senior and subordinated notes | 20,465 | 159 | 1.55 | 15,088 | 155 | 2.05 | ||||||||||||||
Other borrowings and liabilities | 11,771 | 27 | 0.46 | 10,153 | 20 | 0.39 | ||||||||||||||
Total interest-bearing liabilities | $ | 228,107 | $ | 798 | 0.70 | $ | 218,248 | $ | 800 | 0.73 | ||||||||||
Net interest income/spread | $ | 9,113 | 6.44 | $ | 8,665 | 6.46 | ||||||||||||||
Impact of non-interest bearing funding | 0.13 | 0.13 | ||||||||||||||||||
Net interest margin | 6.57% | 6.59% | ||||||||||||||||||
(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. |
10
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | 2015 Q2 | 2015 Q1 | 2014 Q4 | 2014 Q3 | 2014 Q2 | 2015 Q1 | 2014 Q2 | 2015 | 2014 | 2015 vs. 2014 | |||||||||||||||||||||||||||
Loans Held For Investment (Period End) | |||||||||||||||||||||||||||||||||||||
Credit card: | |||||||||||||||||||||||||||||||||||||
Domestic credit card | $ | 78,984 | $ | 74,131 | $ | 77,704 | $ | 73,143 | $ | 71,165 | 7% | 11% | $ | 78,984 | $ | 71,165 | 11% | ||||||||||||||||||||
International credit card | 8,219 | 7,623 | 8,172 | 7,488 | 7,853 | 8 | 5 | 8,219 | 7,853 | 5 | |||||||||||||||||||||||||||
Total credit card | 87,203 | 81,754 | 85,876 | 80,631 | 79,018 | 7 | 10 | 87,203 | 79,018 | 10 | |||||||||||||||||||||||||||
Consumer banking: | |||||||||||||||||||||||||||||||||||||
Auto | 39,991 | 38,937 | 37,824 | 36,254 | 34,792 | 3 | 15 | 39,991 | 34,792 | 15 | |||||||||||||||||||||||||||
Home loan | 27,595 | 28,905 | 30,035 | 31,203 | 32,644 | (5 | ) | (15 | ) | 27,595 | 32,644 | (15 | ) | ||||||||||||||||||||||||
Retail banking | 3,590 | 3,537 | 3,580 | 3,604 | 3,626 | 1 | (1 | ) | 3,590 | 3,626 | (1 | ) | |||||||||||||||||||||||||
Total consumer banking | 71,176 | 71,379 | 71,439 | 71,061 | 71,062 | — | — | 71,176 | 71,062 | — | |||||||||||||||||||||||||||
Commercial banking: | |||||||||||||||||||||||||||||||||||||
Commercial and multifamily real estate | 22,886 | 22,831 | 23,137 | 22,895 | 22,040 | — | 4 | 22,886 | 22,040 | 4 | |||||||||||||||||||||||||||
Commercial and industrial | 27,660 | 27,172 | 26,972 | 26,071 | 25,402 | 2 | 9 | 27,660 | 25,402 | 9 | |||||||||||||||||||||||||||
Total commercial lending | 50,546 | 50,003 | 50,109 | 48,966 | 47,442 | 1 | 7 | 50,546 | 47,442 | 7 | |||||||||||||||||||||||||||
Small-ticket commercial real estate | 685 | 738 | 781 | 822 | 879 | (7 | ) | (22 | ) | 685 | 879 | (22 | ) | ||||||||||||||||||||||||
Total commercial banking | 51,231 | 50,741 | 50,890 | 49,788 | 48,321 | 1 | 6 | 51,231 | 48,321 | 6 | |||||||||||||||||||||||||||
Other loans | 95 | 104 | 111 | 112 | 127 | (9 | ) | (25 | ) | 95 | 127 | (25 | ) | ||||||||||||||||||||||||
Total loans held for investment | $ | 209,705 | $ | 203,978 | $ | 208,316 | $ | 201,592 | $ | 198,528 | 3 | 6 | $ | 209,705 | $ | 198,528 | 6 | ||||||||||||||||||||
Loans Held For Investment (Average) | |||||||||||||||||||||||||||||||||||||
Credit card: | |||||||||||||||||||||||||||||||||||||
Domestic credit card | $ | 75,924 | $ | 74,770 | $ | 74,026 | $ | 71,784 | $ | 69,376 | 2% | 9% | $ | 75,349 | $ | 69,592 | 8% | ||||||||||||||||||||
International credit card | 7,977 | 7,811 | 7,714 | 7,710 | 7,621 | 2 | 5 | 7,895 | 7,656 | 3 | |||||||||||||||||||||||||||
Total credit card | 83,901 | 82,581 | 81,740 | 79,494 | 76,997 | 2 | 9 | 83,244 | 77,248 | 8 | |||||||||||||||||||||||||||
Consumer banking: | |||||||||||||||||||||||||||||||||||||
Auto | 39,546 | 38,387 | 37,072 | 35,584 | 33,972 | 3 | 16 | 38,970 | 33,184 | 17 | |||||||||||||||||||||||||||
Home loan | 28,251 | 29,493 | 30,604 | 31,859 | 33,299 | (4 | ) | (15 | ) | 28,869 | 33,969 | (15 | ) | ||||||||||||||||||||||||
Retail banking | 3,570 | 3,561 | 3,578 | 3,605 | 3,613 | — | (1 | ) | 3,565 | 3,621 | (2 | ) | |||||||||||||||||||||||||
Total consumer banking | 71,367 | 71,441 | 71,254 | 71,048 | 70,884 | — | 1 | 71,404 | 70,774 | 1 | |||||||||||||||||||||||||||
Commercial banking: | |||||||||||||||||||||||||||||||||||||
Commercial and multifamily real estate | 22,853 | 23,120 | 23,129 | 22,409 | 21,484 | (1 | ) | 6 | 22,985 | 21,224 | 8 | ||||||||||||||||||||||||||
Commercial and industrial | 27,414 | 27,190 | 26,409 | 25,512 | 24,611 | 1 | 11 | 27,303 | 24,079 | 13 | |||||||||||||||||||||||||||
Total commercial lending | 50,267 | 50,310 | 49,538 | 47,921 | 46,095 | — | 9 | 50,288 | 45,303 | 11 | |||||||||||||||||||||||||||
Small-ticket commercial real estate | 709 | 760 | 801 | 845 | 896 | (7 | ) | (21 | ) | 735 | 914 | (20 | ) | ||||||||||||||||||||||||
Total commercial banking | 50,976 | 51,070 | 50,339 | 48,766 | 46,991 | — | 8 | 51,023 | 46,217 | 10 | |||||||||||||||||||||||||||
Other loans | 93 | 102 | 103 | 114 | 124 | (9 | ) | (25 | ) | 97 | 123 | (21 | ) | ||||||||||||||||||||||||
Total average loans held for investment | $ | 206,337 | $ | 205,194 | $ | 203,436 | $ | 199,422 | $ | 194,996 | 1 | 6 | $ | 205,768 | $ | 194,362 | 6 | ||||||||||||||||||||
Net Charge-off Rates | |||||||||||||||||||||||||||||||||||||
Credit card: | |||||||||||||||||||||||||||||||||||||
Domestic credit card | 3.42% | 3.55% | 3.39% | 2.83% | 3.52% | (13 | )bps | (10 | )bps | 3.49% | 3.77% | (28 | )bps | ||||||||||||||||||||||||
International credit card | 2.65 | 2.80 | 3.34 | 3.32 | 3.93 | (15 | ) | (128 | ) | 2.73 | 4.05 | (132 | ) | ||||||||||||||||||||||||
Total credit card | 3.35 | 3.48 | 3.38 | 2.88 | 3.56 | (13 | ) | (21 | ) | 3.42 | 3.79 | (37 | ) | ||||||||||||||||||||||||
11
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | 2015 Q2 | 2015 Q1 | 2014 Q4 | 2014 Q3 | 2014 Q2 | 2015 Q1 | 2014 Q2 | 2015 | 2014 | 2015 vs. 2014 | |||||||||||||||||
Consumer banking: | |||||||||||||||||||||||||||
Auto | 1.22% | 1.55% | 2.14% | 1.98% | 1.31% | (33 | )bps | (9 | )bps | 1.38% | 1.48% | (10 | )bps | ||||||||||||||
Home loan | 0.04 | 0.03 | 0.07 | 0.02 | 0.05 | 1 | (1 | ) | 0.03 | 0.06 | (3 | ) | |||||||||||||||
Retail banking | 1.39 | 0.96 | 1.28 | 1.36 | 0.70 | 43 | 69 | 1.18 | 0.82 | 36 | |||||||||||||||||
Total consumer banking | 0.76 | 0.89 | 1.20 | 1.07 | 0.69 | (13 | ) | 7 | 0.83 | 0.76 | 7 | ||||||||||||||||
Commercial banking: | |||||||||||||||||||||||||||
Commercial and multifamily real estate | (0.04 | ) | (0.03 | ) | 0.01 | (0.10 | ) | — | (1 | ) | (4 | ) | (0.03 | ) | — | (3 | ) | ||||||||||
Commercial and industrial | 0.13 | 0.05 | 0.10 | (0.01 | ) | 0.04 | 8 | 9 | 0.09 | 0.03 | 6 | ||||||||||||||||
Total commercial lending | 0.05 | 0.01 | 0.06 | (0.05 | ) | 0.02 | 4 | 3 | 0.03 | 0.02 | 1 | ||||||||||||||||
Small-ticket commercial real estate | 0.15 | 0.47 | 0.80 | (0.01 | ) | 0.61 | (32 | ) | (46 | ) | 0.32 | 0.64 | (32 | ) | |||||||||||||
Total commercial banking | 0.05 | 0.02 | 0.07 | (0.05 | ) | 0.03 | 3 | 2 | 0.04 | 0.03 | 1 | ||||||||||||||||
Other loans | (0.79 | ) | 1.56 | 0.47 | (0.61 | ) | 2.18 | ** | ** | 0.44 | 0.77 | (33) | |||||||||||||||
Total net charge-offs | 1.64 | 1.72 | 1.80 | 1.52 | 1.67 | (8 | ) | (3 | ) | 1.68 | 1.79 | (11 | ) | ||||||||||||||
30+ Day Performing Delinquency Rates | |||||||||||||||||||||||||||
Credit card: | |||||||||||||||||||||||||||
Domestic credit card | 2.84% | 2.92% | 3.27% | 3.21% | 2.83% | (8 | )bps | 1 | bps | 2.84% | 2.83% | 1 | bps | ||||||||||||||
International credit card | 2.65 | 2.81 | 2.94 | 3.34 | 3.40 | (16 | ) | (75 | ) | 2.65 | 3.40 | (75 | ) | ||||||||||||||
Total credit card | 2.82 | 2.91 | 3.24 | 3.22 | 2.89 | (9 | ) | (7 | ) | 2.82 | 2.89 | (7 | ) | ||||||||||||||
Consumer banking: | |||||||||||||||||||||||||||
Auto | 5.58 | 5.21 | 6.57 | 6.14 | 5.77 | 37 | (19 | ) | 5.58 | 5.77 | (19 | ) | |||||||||||||||
Home loan | 0.17 | 0.18 | 0.21 | 0.14 | 0.13 | (1 | ) | 4 | 0.17 | 0.13 | 4 | ||||||||||||||||
Retail banking | 0.66 | 0.60 | 0.64 | 0.53 | 0.48 | 6 | 18 | 0.66 | 0.48 | 18 | |||||||||||||||||
Total consumer banking | 3.24 | 2.95 | 3.60 | 3.22 | 2.91 | 29 | 33 | 3.24 | 2.91 | 33 | |||||||||||||||||
Nonperforming Loans and Nonperforming Assets Rates(1)(2) | |||||||||||||||||||||||||||
Credit card: | |||||||||||||||||||||||||||
International credit card | 0.83% | 0.84% | 0.86% | 0.98% | 1.03% | (1 | )bps | (20 | )bps | 0.83% | 1.03% | (20 | )bps | ||||||||||||||
Total credit card | 0.08 | 0.08 | 0.08 | 0.09 | 0.10 | — | (2 | ) | 0.08 | 0.10 | (2 | ) | |||||||||||||||
Consumer banking: | |||||||||||||||||||||||||||
Auto | 0.40 | 0.31 | 0.52 | 0.49 | 0.43 | 9 | (3 | ) | 0.40 | 0.43 | (3 | ) | |||||||||||||||
Home loan | 1.13 | 1.16 | 1.10 | 1.04 | 1.07 | (3 | ) | 6 | 1.13 | 1.07 | 6 | ||||||||||||||||
Retail banking | 0.79 | 0.71 | 0.61 | 0.54 | 0.79 | 8 | — | 0.79 | 0.79 | — | |||||||||||||||||
Total consumer banking | 0.70 | 0.67 | 0.77 | 0.73 | 0.75 | 3 | (5 | ) | 0.70 | 0.75 | (5 | ) | |||||||||||||||
Commercial banking: | |||||||||||||||||||||||||||
Commercial and multifamily real estate | 0.12 | 0.18 | 0.27 | 0.26 | 0.29 | (6 | ) | (17 | ) | 0.12 | 0.29 | (17 | ) | ||||||||||||||
Commercial and industrial | 1.56 | 0.39 | 0.39 | 0.37 | 0.41 | 117 | 115 | 1.56 | 0.41 | 115 | |||||||||||||||||
Total commercial lending | 0.91 | 0.29 | 0.33 | 0.32 | 0.36 | 62 | 55 | 0.91 | 0.36 | 55 | |||||||||||||||||
Small-ticket commercial real estate | 0.47 | 1.62 | 0.96 | 0.42 | 1.40 | (115 | ) | (93 | ) | 0.47 | 1.40 | (93 | ) | ||||||||||||||
Total commercial banking | 0.90 | 0.31 | 0.34 | 0.32 | 0.38 | 59 | 52 | 0.90 | 0.38 | 52 | |||||||||||||||||
Other loans | 10.68 | 13.33 | 13.37 | 14.66 | 12.74 | (265 | ) | (206 | ) | 10.68 | 12.74 | (206 | ) | ||||||||||||||
Total nonperforming loans | 0.50 | 0.35 | 0.39 | 0.38 | 0.41 | 15 | 9 | 0.50 | 0.41 | 9 | |||||||||||||||||
Total nonperforming assets | 0.64 | 0.50 | 0.54 | 0.53 | 0.55 | 14 | 9 | 0.64 | 0.55 | 9 | |||||||||||||||||
12
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary—Business Segment Results
Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Total | Credit Card | Consumer Banking | Commercial Banking | Other | Total | Credit Card | Consumer Banking | Commercial Banking | Other | ||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 4,537 | $ | 2,633 | $ | 1,444 | $ | 466 | $ | (6 | ) | $ | 9,113 | $ | 5,299 | $ | 2,878 | $ | 927 | $ | 9 | |||||||||||||||||||
Non-interest income | 1,135 | 845 | 196 | 123 | (29 | ) | 2,206 | 1,661 | 354 | 237 | (46 | ) | ||||||||||||||||||||||||||||
Total net revenue (loss)(3) | 5,672 | 3,478 | 1,640 | 589 | (35 | ) | 11,319 | 6,960 | 3,232 | 1,164 | (37 | ) | ||||||||||||||||||||||||||||
Provision for credit losses | 1,129 | 895 | 185 | 49 | — | 2,064 | 1,564 | 391 | 109 | — | ||||||||||||||||||||||||||||||
Non-interest expense | 3,307 | 1,857 | 998 | 270 | 182 | 6,356 | 3,633 | 1,968 | 542 | 213 | ||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 1,236 | 726 | 457 | 270 | (217 | ) | 2,899 | 1,763 | 873 | 513 | (250 | ) | ||||||||||||||||||||||||||||
Income tax provision (benefit) | 384 | 263 | 166 | 98 | (143 | ) | 913 | 632 | 316 | 186 | (221 | ) | ||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of tax | $ | 852 | $ | 463 | $ | 291 | $ | 172 | $ | (74 | ) | $ | 1,986 | $ | 1,131 | $ | 557 | $ | 327 | $ | (29 | ) | ||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Total | Credit Card | Consumer Banking | Commercial Banking | Other | |||||||||||||||||||||||||||||||||||
Net interest income | $ | 4,576 | $ | 2,666 | $ | 1,434 | $ | 461 | $ | 15 | ||||||||||||||||||||||||||||||
Non-interest income | 1,071 | 816 | 158 | 114 | (17 | ) | ||||||||||||||||||||||||||||||||||
Total net revenue (loss)(3) | 5,647 | 3,482 | 1,592 | 575 | (2 | ) | ||||||||||||||||||||||||||||||||||
Provision for credit losses | 935 | 669 | 206 | 60 | — | |||||||||||||||||||||||||||||||||||
Non-interest expense | 3,049 | 1,776 | 970 | 272 | 31 | |||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 1,663 | 1,037 | 416 | 243 | (33 | ) | ||||||||||||||||||||||||||||||||||
Income tax provision (benefit) | 529 | 369 | 150 | 88 | (78 | ) | ||||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 1,134 | $ | 668 | $ | 266 | $ | 155 | $ | 45 | ||||||||||||||||||||||||||||||
Three Months Ended June 30, 2014 | Six Months Ended June 30, 2014 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Total | Credit Card | Consumer Banking | Commercial Banking | Other | Total | Credit Card | Consumer Banking | Commercial Banking | Other | ||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 4,315 | $ | 2,461 | $ | 1,431 | $ | 436 | $ | (13 | ) | $ | 8,665 | $ | 4,986 | $ | 2,864 | $ | 857 | $ | (42 | ) | ||||||||||||||||||
Non-interest income | 1,153 | 839 | 170 | 109 | 35 | 2,173 | 1,624 | 320 | 196 | 33 | ||||||||||||||||||||||||||||||
Total net revenue (loss)(3) | 5,468 | 3,300 | 1,601 | 545 | 22 | 10,838 | 6,610 | 3,184 | 1,053 | (9 | ) | |||||||||||||||||||||||||||||
Provision (benefit) for credit losses | 704 | 549 | 143 | 12 | — | 1,439 | 1,107 | 283 | 52 | (3 | ) | |||||||||||||||||||||||||||||
Non-interest expense | 2,979 | 1,719 | 938 | 267 | 55 | 5,911 | 3,445 | 1,868 | 522 | 76 | ||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 1,785 | 1,032 | 520 | 266 | (33 | ) | 3,488 | 2,058 | 1,033 | 479 | (82 | ) | ||||||||||||||||||||||||||||
Income tax provision (benefit) | 581 | 364 | 186 | 95 | (64 | ) | 1,160 | 722 | 369 | 171 | (102 | ) | ||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 1,204 | $ | 668 | $ | 334 | $ | 171 | $ | 31 | $ | 2,328 | $ | 1,336 | $ | 664 | $ | 308 | $ | 20 | ||||||||||||||||||||
13
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary—Credit Card Business
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | 2015 vs. | ||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | |||||||||||||||||||||||||||
Credit Card(4) | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 2,633 | $ | 2,666 | $ | 2,697 | $ | 2,627 | $ | 2,461 | (1)% | 7% | $ | 5,299 | $ | 4,986 | 6% | ||||||||||||||||||||
Non-interest income | 845 | 816 | 841 | 846 | 839 | 4 | 1 | 1,661 | 1,624 | 2 | |||||||||||||||||||||||||||
Total net revenue | 3,478 | 3,482 | 3,538 | 3,473 | 3,300 | — | 5 | 6,960 | 6,610 | 5 | |||||||||||||||||||||||||||
Provision for credit losses | 895 | 669 | 856 | 787 | 549 | 34 | 63 | 1,564 | 1,107 | 41 | |||||||||||||||||||||||||||
Non-interest expense | 1,857 | 1,776 | 1,888 | 1,730 | 1,719 | 5 | 8 | 3,633 | 3,445 | 5 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 726 | 1,037 | 794 | 956 | 1,032 | (30 | ) | (30 | ) | 1,763 | 2,058 | (14 | ) | ||||||||||||||||||||||||
Income tax provision | 263 | 369 | 275 | 332 | 364 | (29 | ) | (28 | ) | 632 | 722 | (12 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 463 | $ | 668 | $ | 519 | $ | 624 | $ | 668 | (31 | ) | (31 | ) | $ | 1,131 | $ | 1,336 | (15 | ) | |||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 87,203 | $ | 81,754 | $ | 85,876 | $ | 80,631 | $ | 79,018 | 7% | 10% | $ | 87,203 | $ | 79,018 | 10% | ||||||||||||||||||||
Average loans held for investment | 83,901 | 82,581 | 81,740 | 79,494 | 76,997 | 2 | 9 | 83,244 | 77,248 | 8 | |||||||||||||||||||||||||||
Average yield on loans held for investment(5) | 13.98% | 14.30% | 14.61% | 14.65% | 14.22% | (32 | )bps | (24 | )bps | 14.14% | 14.33% | (19 | )bps | ||||||||||||||||||||||||
Total net revenue margin(6) | 16.58 | 16.87 | 17.31 | 17.48 | 17.14 | (29 | ) | (56 | ) | 16.72 | 17.11 | (39 | ) | ||||||||||||||||||||||||
Net charge-off rate | 3.35 | 3.48 | 3.38 | 2.88 | 3.56 | (13 | ) | (21 | ) | 3.42 | 3.79 | (37 | ) | ||||||||||||||||||||||||
30+ day performing delinquency rate | 2.82 | 2.91 | 3.24 | 3.22 | 2.89 | (9 | ) | (7 | ) | 2.82 | 2.89 | (7 | ) | ||||||||||||||||||||||||
30+ day delinquency rate | 2.88 | 2.97 | 3.30 | 3.29 | 2.97 | (9 | ) | (9 | ) | 2.88 | 2.97 | (9 | ) | ||||||||||||||||||||||||
Nonperforming loan rate(1) | 0.08 | 0.08 | 0.08 | 0.09 | 0.10 | — | (2 | ) | 0.08 | 0.10 | (2 | ) | |||||||||||||||||||||||||
Card loan premium amortization and other intangible accretion(7) | $ | 7 | $ | 11 | $ | 11 | $ | 18 | $ | 31 | (36)% | (77)% | $ | 18 | $ | 68 | (74)% | ||||||||||||||||||||
PCCR intangible amortization | 80 | 84 | 87 | 90 | 94 | (5 | ) | (15 | ) | 164 | 192 | (15 | ) | ||||||||||||||||||||||||
Purchase volume(8) | 68,559 | 57,383 | 63,484 | 57,474 | 56,358 | 19 | 22 | 125,942 | 103,792 | 21 | |||||||||||||||||||||||||||
14
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | 2015 vs. | ||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | |||||||||||||||||||||||||||
Domestic Card | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 2,395 | $ | 2,421 | $ | 2,432 | $ | 2,361 | $ | 2,193 | (1)% | 9% | $ | 4,816 | $ | 4,448 | 8% | ||||||||||||||||||||
Non-interest income | 796 | 743 | 768 | 763 | 768 | 7 | 4 | 1,539 | 1,470 | 5 | |||||||||||||||||||||||||||
Total net revenue | 3,191 | 3,164 | 3,200 | 3,124 | 2,961 | 1 | 8 | 6,355 | 5,918 | 7 | |||||||||||||||||||||||||||
Provision for credit losses | 853 | 610 | 765 | 738 | 504 | 40 | 69 | 1,463 | 990 | 48 | |||||||||||||||||||||||||||
Non-interest expense | 1,621 | 1,580 | 1,676 | 1,530 | 1,513 | 3 | 7 | 3,201 | 3,058 | 5 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 717 | 974 | 759 | 856 | 944 | (26 | ) | (24 | ) | 1,691 | 1,870 | (10 | ) | ||||||||||||||||||||||||
Income tax provision | 259 | 353 | 272 | 306 | 337 | (27 | ) | (23 | ) | 612 | 668 | (8 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 458 | $ | 621 | $ | 487 | $ | 550 | $ | 607 | (26 | ) | (25 | ) | $ | 1,079 | $ | 1,202 | (10 | ) | |||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 78,984 | $ | 74,131 | $ | 77,704 | $ | 73,143 | $ | 71,165 | 7% | 11% | $ | 78,984 | $ | 71,165 | 11% | ||||||||||||||||||||
Average loans held for investment | 75,924 | 74,770 | 74,026 | 71,784 | 69,376 | 2 | 9 | 75,349 | 69,592 | 8 | |||||||||||||||||||||||||||
Average yield on loans held for investment(5) | 13.95% | 14.23% | 14.43% | 14.46% | 13.95% | (28 | )bps | — | 14.09% | 14.07% | 2 | bps | |||||||||||||||||||||||||
Total net revenue margin(6) | 16.81 | 16.93 | 17.29 | 17.41 | 17.07 | (12 | ) | (26 | )bps | 16.87 | 17.01 | (14 | ) | ||||||||||||||||||||||||
Net charge-off rate | 3.42 | 3.55 | 3.39 | 2.83 | 3.52 | (13 | ) | (10 | ) | 3.49 | 3.77 | (28 | ) | ||||||||||||||||||||||||
30+ day performing delinquency rate | 2.84 | 2.92 | 3.27 | 3.21 | 2.83 | (8 | ) | 1 | 2.84 | 2.83 | 1 | ||||||||||||||||||||||||||
30+ day delinquency rate | 2.84 | 2.92 | 3.27 | 3.21 | 2.83 | (8 | ) | 1 | 2.84 | 2.83 | 1 | ||||||||||||||||||||||||||
Purchase volume(8) | $ | 62,198 | $ | 52,025 | $ | 58,234 | $ | 53,690 | $ | 52,653 | 20% | 18% | $ | 114,223 | $ | 96,792 | 18% | ||||||||||||||||||||
International Card(4) | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 238 | $ | 245 | $ | 265 | $ | 266 | $ | 268 | (3)% | (11)% | $ | 483 | $ | 538 | (10)% | ||||||||||||||||||||
Non-interest income | 49 | 73 | 73 | 83 | 71 | (33 | ) | (31 | ) | 122 | 154 | (21 | ) | ||||||||||||||||||||||||
Total net revenue | 287 | 318 | 338 | 349 | 339 | (10 | ) | (15 | ) | 605 | 692 | (13 | ) | ||||||||||||||||||||||||
Provision for credit losses | 42 | 59 | 91 | 49 | 45 | (29 | ) | (7 | ) | 101 | 117 | (14 | ) | ||||||||||||||||||||||||
Non-interest expense | 236 | 196 | 212 | 200 | 206 | 20 | 15 | 432 | 387 | 12 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 9 | 63 | 35 | 100 | 88 | (86 | ) | (90 | ) | 72 | 188 | (62 | ) | ||||||||||||||||||||||||
Income tax provision | 4 | 16 | 3 | 26 | 27 | (75 | ) | (85 | ) | 20 | 54 | (63 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 5 | $ | 47 | $ | 32 | $ | 74 | $ | 61 | (89 | ) | (92 | ) | $ | 52 | $ | 134 | (61 | ) | |||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 8,219 | $ | 7,623 | $ | 8,172 | $ | 7,488 | $ | 7,853 | 8% | 5% | $ | 8,219 | $ | 7,853 | 5% | ||||||||||||||||||||
Average loans held for investment | 7,977 | 7,811 | 7,714 | 7,710 | 7,621 | 2 | 5 | 7,895 | 7,656 | 3 | |||||||||||||||||||||||||||
Average yield on loans held for investment(5) | 14.29 | % | 14.93% | 16.31% | 16.42% | 16.74% | (64 | )bps | (245 | )bps | 14.60% | 16.69% | (209 | )bps | |||||||||||||||||||||||
Total net revenue margin(6) | 14.36 | 16.31 | 17.55 | 18.13 | 17.76 | (195 | ) | (340 | ) | 15.33 | 18.07 | (274 | ) | ||||||||||||||||||||||||
Net charge-off rate | 2.65 | 2.80 | 3.34 | 3.32 | 3.93 | (15 | ) | (128 | ) | 2.73 | 4.05 | (132 | ) | ||||||||||||||||||||||||
30+ day performing delinquency rate | 2.65 | 2.81 | 2.94 | 3.34 | 3.40 | (16 | ) | (75 | ) | 2.65 | 3.40 | (75 | ) | ||||||||||||||||||||||||
30+ day delinquency rate | 3.29 | 3.44 | 3.60 | 4.08 | 4.20 | (15 | ) | (91 | ) | 3.29 | 4.20 | (91 | ) | ||||||||||||||||||||||||
Nonperforming loan rate(1) | 0.83 | 0.84 | 0.86 | 0.98 | 1.03 | (1 | ) | (20 | ) | 0.83 | 1.03 | (20 | ) | ||||||||||||||||||||||||
Purchase volume(8) | $ | 6,361 | $ | 5,358 | $ | 5,250 | $ | 3,784 | $ | 3,705 | 19% | 72% | $ | 11,719 | $ | 7,000 | 67% | ||||||||||||||||||||
15
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Consumer Banking Business
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | 2015 vs. | ||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | |||||||||||||||||||||||||||
Consumer Banking | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 1,444 | $ | 1,434 | $ | 1,459 | $ | 1,425 | $ | 1,431 | 1% | 1% | $ | 2,878 | $ | 2,864 | — | ||||||||||||||||||||
Non-interest income | 196 | 158 | 185 | 179 | 170 | 24 | 15 | 354 | 320 | 11% | |||||||||||||||||||||||||||
Total net revenue | 1,640 | 1,592 | 1,644 | 1,604 | 1,601 | 3 | 2 | 3,232 | 3,184 | 2 | |||||||||||||||||||||||||||
Provision for credit losses | 185 | 206 | 222 | 198 | 143 | (10 | ) | 29 | 391 | 283 | 38 | ||||||||||||||||||||||||||
Non-interest expense | 998 | 970 | 1,045 | 956 | 938 | 3 | 6 | 1,968 | 1,868 | 5 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 457 | 416 | 377 | 450 | 520 | 10 | (12 | ) | 873 | 1,033 | (15 | ) | |||||||||||||||||||||||||
Income tax provision | 166 | 150 | 135 | 161 | 186 | 11 | (11 | ) | 316 | 369 | (14 | ) | |||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 291 | $ | 266 | $ | 242 | $ | 289 | $ | 334 | 9 | (13 | ) | $ | 557 | $ | 664 | (16 | ) | ||||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 71,176 | $ | 71,379 | $ | 71,439 | $ | 71,061 | $ | 71,062 | — | — | $ | 71,176 | $ | 71,062 | — | ||||||||||||||||||||
Average loans held for investment | 71,367 | 71,441 | 71,254 | 71,048 | 70,884 | — | 1% | 71,404 | 70,774 | 1% | |||||||||||||||||||||||||||
Average yield on loans held for investment(5) | 6.27% | 6.26% | 6.45% | 6.18% | 6.22% | 1 | bps | 5 | bps | 6.27% | 6.20% | 7 | bps | ||||||||||||||||||||||||
Auto loan originations | $ | 5,433 | $ | 5,185 | $ | 5,390 | $ | 5,410 | $ | 5,376 | 5% | 1% | $ | 10,618 | $ | 10,103 | 5% | ||||||||||||||||||||
Period-end deposits | 170,321 | 172,502 | 168,078 | 167,624 | 169,153 | (1 | ) | 1 | 170,321 | 169,153 | 1 | ||||||||||||||||||||||||||
Average deposits | 171,076 | 169,593 | 167,727 | 168,407 | 169,694 | 1 | 1 | 170,339 | 169,188 | 1 | |||||||||||||||||||||||||||
Average deposit interest rate | 0.57% | 0.57% | 0.57% | 0.58% | 0.57% | — | — | 0.57% | 0.57% | — | |||||||||||||||||||||||||||
Core deposit intangible amortization | $ | 21 | $ | 22 | $ | 24 | $ | 26 | $ | 28 | (5)% | (25)% | $ | 43 | $ | 58 | (26)% | ||||||||||||||||||||
Net charge-off rate | 0.76% | 0.89% | 1.20% | 1.07% | 0.69% | (13 | )bps | 7 | bps | 0.83% | 0.76% | 7 | bps | ||||||||||||||||||||||||
30+ day performing delinquency rate | 3.24 | 2.95 | 3.60 | 3.22 | 2.91 | 29 | 33 | 3.24 | 2.91 | 33 | |||||||||||||||||||||||||||
30+ day delinquency rate | 3.80 | 3.46 | 4.23 | 3.82 | 3.49 | 34 | 31 | 3.80 | 3.49 | 31 | |||||||||||||||||||||||||||
Nonperforming loan rate(1) | 0.70 | 0.67 | 0.77 | 0.73 | 0.75 | 3 | (5 | ) | 0.70 | 0.75 | (5 | ) | |||||||||||||||||||||||||
Nonperforming asset rate(2) | 0.98 | 0.95 | 1.06 | 1.01 | 1.01 | 3 | (3 | ) | 0.98 | 1.01 | (3 | ) | |||||||||||||||||||||||||
16
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Commercial Banking Business
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | 2015 vs. | ||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | |||||||||||||||||||||||||||
Commercial Banking | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 466 | $ | 461 | $ | 455 | $ | 439 | $ | 436 | 1% | 7% | $ | 927 | $ | 857 | 8% | ||||||||||||||||||||
Non-interest income | 123 | 114 | 132 | 122 | 109 | 8 | 13 | 237 | 196 | 21 | |||||||||||||||||||||||||||
Total net revenue(3) | 589 | 575 | 587 | 561 | 545 | 2 | 8 | 1,164 | 1,053 | 11 | |||||||||||||||||||||||||||
Provision for credit losses | 49 | 60 | 32 | 9 | 12 | (18 | ) | 308 | 109 | 52 | 110 | ||||||||||||||||||||||||||
Non-interest expense | 270 | 272 | 293 | 268 | 267 | (1 | ) | 1 | 542 | 522 | 4 | ||||||||||||||||||||||||||
Income from continuing operations before income taxes | 270 | 243 | 262 | 284 | 266 | 11 | 2 | 513 | 479 | 7 | |||||||||||||||||||||||||||
Income tax provision | 98 | 88 | 93 | 102 | 95 | 11 | 3 | 186 | 171 | 9 | |||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 172 | $ | 155 | $ | 169 | $ | 182 | $ | 171 | 11 | 1 | $ | 327 | $ | 308 | 6 | ||||||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 51,231 | $ | 50,741 | $ | 50,890 | $ | 49,788 | $ | 48,321 | 1% | 6% | $ | 51,231 | $ | 48,321 | 6% | ||||||||||||||||||||
Average loans held for investment | 50,976 | 51,070 | 50,339 | 48,766 | 46,991 | — | 8 | 51,023 | 46,217 | 10 | |||||||||||||||||||||||||||
Average yield on loans held for investment(3)(5) | 3.26% | 3.22% | 3.33% | 3.39% | 3.50% | 4 | bps | (24 | )bps | 3.24% | 3.48% | (24 | )bps | ||||||||||||||||||||||||
Period-end deposits | $ | 32,909 | $ | 32,575 | $ | 31,954 | $ | 31,918 | $ | 31,440 | 1% | 5% | $ | 32,909 | $ | 31,440 | 5% | ||||||||||||||||||||
Average deposits | 32,778 | 32,845 | 32,363 | 31,772 | 31,238 | — | 5 | 32,811 | 31,431 | 4 | |||||||||||||||||||||||||||
Average deposit interest rate | 0.25% | 0.24% | 0.24% | 0.24% | 0.24% | 1 | bps | 1 | bps | 0.24% | 0.24% | — | |||||||||||||||||||||||||
Core deposit intangible amortization | $ | 4 | $ | 4 | $ | 5 | $ | 5 | $ | 5 | — | (20)% | $ | 8 | $ | 11 | (27)% | ||||||||||||||||||||
Net charge-off (recovery) rate | 0.05% | 0.02% | 0.07% | (0.05)% | 0.03% | 3 | bps | 2 | bps | 0.04% | 0.03% | 1 | bps | ||||||||||||||||||||||||
Nonperforming loan rate(1) | 0.90 | 0.31 | 0.34 | 0.32 | 0.38 | 59 | 52 | 0.90 | 0.38 | 52 | |||||||||||||||||||||||||||
Nonperforming asset rate(2) | 0.91 | 0.31 | 0.36 | 0.35 | 0.41 | 60 | 50 | 0.91 | 0.41 | 50 | |||||||||||||||||||||||||||
Risk category:(9) | |||||||||||||||||||||||||||||||||||||
Noncriticized | $ | 49,001 | $ | 48,938 | $ | 49,284 | $ | 48,408 | $ | 46,881 | — | 5% | $ | 49,001 | $ | 46,881 | 5% | ||||||||||||||||||||
Criticized performing | 1,767 | 1,645 | 1,431 | 1,219 | 1,259 | 7% | 40 | 1,767 | 1,259 | 40 | |||||||||||||||||||||||||||
Criticized nonperforming | 463 | 158 | 175 | 161 | 181 | 193 | 156 | 463 | 181 | 156 | |||||||||||||||||||||||||||
Total commercial loans | $ | 51,231 | $ | 50,741 | $ | 50,890 | $ | 49,788 | $ | 48,321 | 1 | 6 | $ | 51,231 | $ | 48,321 | 6 | ||||||||||||||||||||
Risk category as a percentage of period-end commercial loans held for investment: | |||||||||||||||||||||||||||||||||||||
Noncriticized | 95.7% | 96.5% | 96.9% | 97.3% | 97.0% | (80 | )bps | (130 | )bps | 95.7% | 97.0% | (130 | )bps | ||||||||||||||||||||||||
Criticized performing | 3.4 | 3.2 | 2.8 | 2.4 | 2.6 | 20 | 80 | 3.4 | 2.6 | 80 | |||||||||||||||||||||||||||
Criticized nonperforming | 0.9 | 0.3 | 0.3 | 0.3 | 0.4 | 60 | 50 | 0.9 | 0.4 | 50 | |||||||||||||||||||||||||||
Total commercial loans | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | — | — | 100.0% | 100.0% | — | |||||||||||||||||||||||||||
17
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Other and Total
2015 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | 2015 vs. | ||||||||||||||||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q2 | 2015 | 2014 | 2014 | |||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest (expense) income | $ | (6 | ) | $ | 15 | $ | 45 | $ | 6 | $ | (13 | ) | ** | (54)% | $ | 9 | $ | (42 | ) | ** | |||||||||||||||||
Non-interest income | (29 | ) | (17 | ) | (1 | ) | (5 | ) | 35 | 71% | ** | (46 | ) | 33 | ** | ||||||||||||||||||||||
Total net (loss) revenue(3) | (35 | ) | (2 | ) | 44 | 1 | 22 | ** | ** | (37 | ) | (9 | ) | ** | |||||||||||||||||||||||
Benefit for credit losses | — | — | (1 | ) | (1 | ) | — | — | — | — | (3 | ) | ** | ||||||||||||||||||||||||
Non-interest expense(10) | 182 | 31 | 58 | 31 | 55 | ** | ** | 213 | 76 | 180% | |||||||||||||||||||||||||||
Loss from continuing operations before income taxes | (217 | ) | (33 | ) | (13 | ) | (29 | ) | (33 | ) | ** | ** | (250 | ) | (82 | ) | ** | ||||||||||||||||||||
Income tax benefit | (143 | ) | (78 | ) | (53 | ) | (59 | ) | (64 | ) | 83 | 123 | (221 | ) | (102 | ) | 117 | ||||||||||||||||||||
(Loss) income from continuing operations, net of tax | $ | (74 | ) | $ | 45 | $ | 40 | $ | 30 | $ | 31 | ** | ** | $ | (29 | ) | $ | 20 | ** | ||||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 95 | $ | 104 | $ | 111 | $ | 112 | $ | 127 | (9)% | (25)% | $ | 95 | $ | 127 | (25)% | ||||||||||||||||||||
Average loans held for investment | 93 | 102 | 103 | 114 | 124 | (9 | ) | (25) | 97 | 123 | (21 | ) | |||||||||||||||||||||||||
Period-end deposits | 5,550 | 5,363 | 5,516 | 4,722 | 5,297 | 3 | 5 | 5,550 | 5,297 | 5 | |||||||||||||||||||||||||||
Average deposits | 5,289 | 5,413 | 5,265 | 5,020 | 5,383 | (2 | ) | (2 | ) | 5,351 | 5,461 | (2 | ) | ||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||||||||||
Net interest income | $ | 4,537 | $ | 4,576 | $ | 4,656 | $ | 4,497 | $ | 4,315 | (1)% | 5% | $ | 9,113 | $ | 8,665 | 5% | ||||||||||||||||||||
Non-interest income | 1,135 | 1,071 | 1,157 | 1,142 | 1,153 | 6 | (2 | ) | 2,206 | 2,173 | 2 | ||||||||||||||||||||||||||
Total net revenue | 5,672 | 5,647 | 5,813 | 5,639 | 5,468 | — | 4 | 11,319 | 10,838 | 4 | |||||||||||||||||||||||||||
Provision for credit losses | 1,129 | 935 | 1,109 | 993 | 704 | 21 | 60 | 2,064 | 1,439 | 43 | |||||||||||||||||||||||||||
Non-interest expense | 3,307 | 3,049 | 3,284 | 2,985 | 2,979 | 8 | 11 | 6,356 | 5,911 | 8 | |||||||||||||||||||||||||||
Income from continuing operations before income taxes | 1,236 | 1,663 | 1,420 | 1,661 | 1,785 | (26 | ) | (31 | ) | 2,899 | 3,488 | (17 | ) | ||||||||||||||||||||||||
Income tax provision | 384 | 529 | 450 | 536 | 581 | (27 | ) | (34 | ) | 913 | 1,160 | (21 | ) | ||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 852 | $ | 1,134 | $ | 970 | $ | 1,125 | $ | 1,204 | (25 | ) | (29 | ) | $ | 1,986 | $ | 2,328 | (15 | ) | |||||||||||||||||
Selected performance metrics: | |||||||||||||||||||||||||||||||||||||
Period-end loans held for investment | $ | 209,705 | $ | 203,978 | $ | 208,316 | $ | 201,592 | $ | 198,528 | 3% | 6% | $ | 209,705 | $ | 198,528 | 6% | ||||||||||||||||||||
Average loans held for investment | 206,337 | 205,194 | 203,436 | 199,422 | 194,996 | 1 | 6 | 205,768 | 194,362 | 6 | |||||||||||||||||||||||||||
Period-end deposits | 208,780 | 210,440 | 205,548 | 204,264 | 205,890 | (1 | ) | 1 | 208,780 | 205,890 | 1 | ||||||||||||||||||||||||||
Average deposits | 209,143 | 207,851 | 205,355 | 205,199 | 206,315 | 1 | 1 | 208,501 | 206,080 | 1 | |||||||||||||||||||||||||||
18
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Notes to Loan and Business Segments Disclosures (Tables 7—12)
** | Not meaningful. |
(1) | The nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment. |
(2) | Nonperforming assets consist of nonperforming loans, real estate owned (“REO”) and other foreclosed assets. The nonperforming asset rates 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. Calculation of nonperforming assets rates for our Consumer Banking and Commercial Banking businesses are adjusted to exclude the impact of acquired REO. |
(3) | Some of our tax-related commercial investments generate tax-exempt income or tax credits. Accordingly, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35% with offsetting reclassifications within the Other category. |
(4) | Includes a build in our U.K. PPI Reserve, which impacted both revenue and non-interest expense for our International Card business. |
(5) | Calculated based on annualized interest income for the period divided 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. |
(6) | Calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the specified loan category. |
(7) | 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 2012 transaction in which we acquired substantially all of HSBC’s credit card and private-label credit card business in the United States. |
(8) | Includes credit card purchase transactions, net of returns for loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions. |
(9) | Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities. |
(10) | Includes restructuring charges for employee severance and related benefits. |
19
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures(1)
Basel III Standardized | ||||||||||||||||||||
(Dollars in millions) (unaudited) | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | |||||||||||||||
Regulatory Capital Metrics | ||||||||||||||||||||
Common equity Tier 1 capital | $ | 29,804 | $ | 29,671 | $ | 29,534 | $ | 29,116 | $ | 28,774 | ||||||||||
Tier 1 capital | 32,614 | 31,493 | 31,355 | 30,451 | 30,111 | |||||||||||||||
Total risk-based capital(2) | 37,114 | 35,878 | 35,879 | 34,860 | 34,743 | |||||||||||||||
Risk-weighted assets(3) | 246,030 | 238,011 | 236,944 | 228,759 | 226,172 | |||||||||||||||
Average assets for the leverage ratio | 293,291 | 295,556 | 291,243 | 286,070 | 281,345 | |||||||||||||||
Capital Ratios | ||||||||||||||||||||
Common equity Tier 1 capital ratio(4) | 12.1% | 12.5% | 12.5% | 12.7% | 12.7% | |||||||||||||||
Tier 1 risk-based capital ratio(5) | 13.3 | 13.2 | 13.2 | 13.3 | 13.3 | |||||||||||||||
Total risk-based capital ratio(6) | 15.1 | 15.1 | 15.1 | 15.2 | 15.4 | |||||||||||||||
Tier 1 leverage ratio(7) | 11.1 | 10.7 | 10.8 | 10.6 | 10.7 | |||||||||||||||
Tangible common equity (“TCE”) ratio(8) | 9.7 | 9.8 | 9.5 | 9.6 | 9.5 | |||||||||||||||
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.
2015 | 2015 | 2014 | 2014 | 2014 | ||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Tangible Common Equity (Period End) | ||||||||||||||||||||
Stockholders’ equity | $ | 46,659 | $ | 45,730 | $ | 45,053 | $ | 44,018 | $ | 43,815 | ||||||||||
Goodwill and intangible assets(9) | (15,240 | ) | (15,307 | ) | (15,383 | ) | (15,472 | ) | (15,564 | ) | ||||||||||
Noncumulative perpetual preferred stock(10) | (2,810 | ) | (1,822 | ) | (1,822 | ) | (1,336 | ) | (1,338 | ) | ||||||||||
Tangible common equity | $ | 28,609 | $ | 28,601 | $ | 27,848 | $ | 27,210 | $ | 26,913 | ||||||||||
Tangible Common Equity (Average) | ||||||||||||||||||||
Average stockholders’ equity | $ | 47,255 | $ | 46,397 | $ | 45,576 | $ | 44,827 | $ | 43,767 | ||||||||||
Average goodwill and intangible assets(9) | (15,256 | ) | (15,339 | ) | (15,437 | ) | (15,525 | ) | (15,615 | ) | ||||||||||
Noncumulative perpetual preferred stock(10) | (2,377 | ) | (1,822 | ) | (1,681 | ) | (1,338 | ) | (970 | ) | ||||||||||
Average tangible common equity | $ | 29,622 | $ | 29,236 | $ | 28,458 | $ | 27,964 | $ | 27,182 | ||||||||||
20
2015 | 2015 | 2014 | 2014 | 2014 | ||||||||||||||||
(Dollars in millions) (unaudited) | Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||
Tangible Assets (Period End) | ||||||||||||||||||||
Total assets(11) | $ | 310,510 | $ | 306,224 | $ | 308,167 | $ | 299,640 | $ | 297,434 | ||||||||||
Goodwill and intangible assets(9) | (15,240 | ) | (15,307 | ) | (15,383 | ) | (15,472 | ) | (15,564 | ) | ||||||||||
Tangible assets(11) | $ | 295,270 | $ | 290,917 | $ | 292,784 | $ | 284,168 | $ | 281,870 | ||||||||||
Tangible Assets (Average) | ||||||||||||||||||||
Average total assets(11) | $ | 307,206 | $ | 309,401 | $ | 304,153 | $ | 298,913 | $ | 294,089 | ||||||||||
Average goodwill and intangible assets(9) | (15,256 | ) | (15,339 | ) | (15,437 | ) | (15,525 | ) | (15,615 | ) | ||||||||||
Average tangible assets(11) | $ | 291,950 | $ | 294,062 | $ | 288,716 | $ | 283,388 | $ | 278,474 | ||||||||||
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
__________
(Dollars in millions) (unaudited) | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | |||||||||||||||
Common equity excluding AOCI | $ | 44,246 | $ | 44,120 | $ | 43,661 | $ | 43,241 | $ | 42,848 | ||||||||||
Adjustments: | ||||||||||||||||||||
AOCI(12)(13) | (128 | ) | (26 | ) | (69 | ) | (146 | ) | 6 | |||||||||||
Goodwill(9) | (13,809 | ) | (13,801 | ) | (13,805 | ) | (13,801 | ) | (13,811 | ) | ||||||||||
Intangible assets(9)(13) | (413 | ) | (450 | ) | (243 | ) | (266 | ) | (289 | ) | ||||||||||
Other | (92 | ) | (172 | ) | (10 | ) | 88 | 20 | ||||||||||||
Common equity Tier 1 capital | $ | 29,804 | $ | 29,671 | $ | 29,534 | $ | 29,116 | $ | 28,774 | ||||||||||
Risk-weighted assets(3) | $ | 246,030 | $ | 238,011 | $ | 236,944 | $ | 228,759 | $ | 226,172 | ||||||||||
Common equity Tier 1 capital ratio(4) | 12.1% | 12.5% | 12.5% | 12.7% | 12.7% | |||||||||||||||
(1) | Regulatory capital metrics and capital ratios as of the end of Q2 2015 are preliminary and therefore subject to change. |
(2) | Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital. |
(3) | As of January 1, 2015, risk-weighted assets are calculated under the Basel III Standardized Approach, subject to transition provisions. Prior to January 1, 2015 risk-weighted assets were calculated under Basel I. |
(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) | As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the related right to reclaim cash collateral or obligation to return cash collateral. Prior period results, excluding regulatory ratios, have been recast to conform to this presentation. |
(12) | Amounts presented are net of tax. |
(13) | Amounts based on transition provisions for regulatory capital deductions and adjustments of 20% for 2014 and 40% for 2015. |
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