SEC Filing | Capital One Financial Corp.

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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

April 23, 2020

Date of Report (Date of earliest event reported)

____________________________________

CAPITAL ONE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

____________________________________



Delaware		001-13300	54-1719854
(State or other jurisdiction of incorporation)		(Commission File Number)	(IRS 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

(Not applicable)

(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))

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock (par value $.01 per share)	COF	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series F	COF PRF	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series G	COF PRG	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series H	COF PRH	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series I	COF PRI	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series J	COF PRJ	New York Stock Exchange
0.800% Senior Notes Due 2024	COF24	New York Stock Exchange
1.650% Senior Notes Due 2029	COF29	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02	Results of Operations and Financial Condition.

On April 23, 2020, Capital One Financial Corporation (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2020. 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 8.01 Other Events.

The following risk factor supplements the “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The following risk factor disclosure should be read in conjunction with the risk factors described in the Annual Report on Form 10-K.

The COVID-19 pandemic has adversely impacted our business and financial results, and the extent to which the pandemic and measures taken in response to the pandemic could materially and adversely impact our business, financial condition, liquidity, capital and results of operations will depend on future developments, which are highly uncertain and are difficult to predict.

Global health concerns relating to the COVID-19 pandemic and related government actions taken to reduce the spread of the virus have impacted the macroeconomic environment, significantly increased economic uncertainty and reduced economic activity. The pandemic has also caused governmental authorities to implement numerous measures to try to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns. These measures have negatively impacted and may further negatively impact consumer and business payment and spending patterns.

The COVID-19 pandemic has adversely impacted, and may continue to adversely impact, our business, financial condition, capital and results of operations. The extent of these impacts depends on future developments, which are highly uncertain and difficult to predict, including, but not limited to, the duration and magnitude of the pandemic, the actions taken to contain the virus or treat its impact, the effectiveness of economic stimulus measures in the United States, and how quickly and to what extent economic and operating conditions and consumer and business spending can return to their pre-pandemic levels. As a result, our purchase volume, loan growth and the overall demand for our products and services may be significantly impacted, which could adversely affect our revenue and other results of operations. In addition, we could experience higher credit losses in our loan portfolios and increases in our allowance for credit losses. For example, as a result of the significant uncertainty due to the COVID-19 pandemic we realized a substantial build in our allowance for credit losses for the first quarter of 2020. We could also experience impairments of other financial assets and other negative impacts on our financial position, including possible constraints on liquidity and capital, as well as higher costs of capital. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business and results of operations, which could be material, as a result of the macroeconomic impact and any recession that has occurred or may occur in the future.

The spread of COVID-19 has caused us to modify our business practices and operations, including providing a range of forbearance options to our customers in certain circumstances. We may need to further modify our practices and operations as this event unfolds. In addition, in response to the pandemic, we have temporarily suspended share repurchases and could take other capital actions. We have also implemented work-from-home policies for a vast majority of our employees, and social distancing plans for our employees who are working from Capital One facilities. We have temporarily closed all of our Cafés and our bank branches where appropriate social distancing could not be implemented. These measures could impair our ability to perform critical functions and may adversely impact our results of operations. We may take further actions as required by government authorities or that we otherwise determine are in the best interests of our customers, employees and business partners.

Federal, state, local and foreign governmental authorities have enacted, and may enact in the future, legislation, regulations and protocols in response to the COVID-19 pandemic, including governmental programs intended to provide economic relief to businesses and individuals. Our participation in and execution of any such programs may cause operational, compliance, reputational and credit risks, which could result in litigation, governmental action or other forms of loss. The extent of these impacts, which may be substantial, will depend on the degree of our participation in these programs. There remains significant uncertainty regarding the measures that authorities will enact in the future and the ultimate impact of the legislation, regulations and protocols that have been and will be enacted. Moreover, we expect that the effects of the COVID-19 pandemic will heighten many of the other known risks described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2019.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.



Exhibit No.		Description
99.1		Press Release, dated April 23, 2020 - First Quarter 2020
99.2		Financial Supplement - First Quarter 2020
104		The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

Earnings Conference Call Webcast Information.

The Company will hold an earnings conference call on April 23, 2020 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the Company’s home page (www.capitalone.com). Under “About,” choose “Investors” to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. A replay of the webcast will be archived on the Company’s website through May 7, 2020 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

Date: April 23, 2020	By:	/s/ TIMOTHY P. GOLDEN
		Timothy P. Golden
		Controller and Principal Accounting Officer

Exhibit

Capital One First Quarter 2020 Earnings

Page 1

Exhibit 99.1

News Release

https://cdn.kscope.io/9189dee816160c6f3b3bfa72c7872fec-earningsslidesvfinal1b46.jpg



Contacts:
Investor Relations		Media Relations
Jeff Norris	Danielle Dietz	Sie Soheili	Tatiana Stead
703.720.2455	703.720.2455	703.720.3929	703.720.2352

FOR IMMEDIATE RELEASE: April 23, 2020

Capital One Reports First Quarter 2020 Net Loss of $1.3 billion,
or $3.10 per share

Excluding adjusting items, First Quarter 2020 Net Loss of $3.02 per share⁽¹⁾

McLean, Va. (April 23, 2020) – Capital One Financial Corporation (NYSE: COF) today announced net loss for the first quarter of 2020 of $1.3 billion, or $3.10 per diluted common share, compared with net income of $1.2 billion, or $2.25 per diluted common share in the fourth quarter of 2019, and with net income of $1.4 billion, or $2.86 per diluted common share in the first quarter of 2019. Excluding adjusting items, net loss for the first quarter of 2020 was $3.02 per diluted common share⁽¹⁾.

“In the first quarter, Capital One rapidly mobilized to respond to COVID-19 and the disruption it is causing, with a focus on our associates, our customers, and our communities,” said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. “We are well positioned to navigate and manage through these uncertain times, and to emerge with strength on the other side.”

Adjusting items in the first quarter of 2020, which are excluded from diluted earnings per share (EPS), efficiency ratio and operating efficiency ratio metrics (see Table 15 in our Financial Supplement for additional information):

All comparisons below are for the first quarter of 2020 compared with the fourth quarter of 2019 unless otherwise noted.

First Quarter 2020 Income Statement Summary:


•	Total net revenue decreased 2 percent to $7.2 billion.


•	Total non-interest expense decreased 10 percent to $3.7 billion:


◦	31 percent decrease in marketing.


◦	6 percent decrease in operating expenses.

⁽¹⁾

Amounts excluding adjusting items are non-GAAP measures that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance, both in the current period and across periods. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.

Capital One First Quarter 2020 Earnings

Page 2


•	Pre-provision earnings increased 8 percent to $3.5 billion⁽²⁾.


•	Provision for credit losses increased 198 percent to $5.4 billion:


◦	Net charge-offs of $1.8 billion.


◦	$3.6 billion reserve build.


•	Net interest margin of 6.78 percent, decreased 17 basis points.


•	Efficiency ratio of 51.44 percent.

◦Efficiency ratio excluding adjusting items of 50.77 percent⁽¹⁾.


•	Operating efficiency ratio of 44.67 percent.

◦Operating efficiency ratio excluding adjusting items of 43.99 percent⁽¹⁾.

First Quarter 2020 Balance Sheet Summary:


•	Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.0 percent at March 31, 2020.


•	Period-end loans held for investment in the quarter decreased $2.8 billion, or 1 percent, to $263.0 billion.


◦	Credit Card period-end loans decreased $10.4 billion, or 8 percent, to $117.8 billion.


•	Domestic Card period-end loans decreased $9.1 billion, or 8 percent, to $109.5 billion.


◦	Consumer Banking period-end loans increased $968 million, or 2 percent, to $64.0 billion.


•	Auto period-end loans increased $1.0 billion, or 2 percent, to $61.4 billion.


◦	Commercial Banking period-end loans increased $6.7 billion, or 9 percent, to $81.2 billion.


•	Average loans held for investment in the quarter increased $4.0 billion, or 2 percent, to $262.9 billion.


◦	Credit Card average loans increased $691 million, or 1 percent, to $122.8 billion.


•	Domestic Card average loans increased $746 million, or 1 percent, to $113.7 billion.


◦	Consumer Banking average loans increased $1.1 billion, or 2 percent, to $63.7 billion.

•Auto average loans increased $1.1 billion, or 2 percent, to $61.0 billion.

◦Commercial Banking average loans increased $2.3 billion, or 3 percent, to $76.4 billion.


•	Period-end total deposits increased $7.0 billion, or 3 percent, to $269.7 billion, while average deposits increased $4.6 billion, or 2 percent, to $264.7 billion.


•	Interest-bearing deposits rate paid decreased 20 basis points to 1.21 percent.

⁽¹⁾


⁽²⁾	Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period.

Capital One First Quarter 2020 Earnings

Page 3

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on April 23, 2020 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company’s home page (www.capitalone.com). Under “About,” choose “Investors” to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company’s website through May 7, 2020 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2019.

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 $269.7 billion in deposits and $396.9 billion in total assets as of March 31, 2020. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.

###

Exhibit

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement⁽¹⁾⁽²⁾

First Quarter2020

Table of Contents



Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	5
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	7
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	8
	Table 7:	Loan Information and Performance Statistics	9
	Table 8:	Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity	11
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	12
	Table 10:	Financial & Statistical Summary—Credit Card Business	13
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	15
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	16
	Table 13:	Financial & Statistical Summary—Other and Total	17
Other
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	18
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	19

__________


⁽¹⁾	The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended March 31, 2020 once it is filed with the Securities and Exchange Commission.

⁽²⁾

This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated



																2020 Q1 vs.
(Dollars in millions, except per share data and as noted)	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions, except per share data and as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Income Statement
Net interest income	$	6,025		$	6,066		$	5,737		$	5,746		$	5,791		(1	)%	4	%
Non-interest income	1,224			1,361			1,222			1,378			1,292			(10	)	(5	)
Total net revenue⁽¹⁾	7,249			7,427			6,959			7,124			7,083			(2	)	2
Provision for credit losses	5,423			1,818			1,383			1,342			1,693			198		220
Non-interest expense:
Marketing	491			710			501			546			517			(31	)	(5	)
Operating expense	3,238			3,451			3,371			3,233			3,154			(6	)	3
Total non-interest expense	3,729			4,161			3,872			3,779			3,671			(10	)	2
Income (loss) from continuing operations before income taxes	(1,903		)	1,448			1,704			2,003			1,719			**		**
Income tax provision (benefit)	(563		)	270			375			387			309			**		**
Income (loss) from continuing operations, net of tax	(1,340		)	1,178			1,329			1,616			1,410			**		**
Income (loss) from discontinued operations, net of tax	—			(2		)	4			9			2			**		**
Net income (loss)	(1,340		)	1,176			1,333			1,625			1,412			**		**
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(3		)	(7		)	(10		)	(12		)	(12		)	(57	)	(75	)
Preferred stock dividends	(55		)	(97		)	(53		)	(80		)	(52		)	(43	)	6
Issuance cost for redeemed preferred stock⁽³⁾	(22		)	(31		)	—			—			—			(29	)	**
Net income (loss) available to common stockholders	$	(1,420	)	$	1,041		$	1,270		$	1,533		$	1,348		**		**
Common Share Statistics
Basic earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	(3.10	)	$	2.26		$	2.70		$	3.24		$	2.87		**		**
Income from discontinued operations	—			—			0.01			0.02			—			**		**
Net income (loss) per basic common share	$	(3.10	)	$	2.26		$	2.71		$	3.26		$	2.87		**		**
Diluted earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	(3.10	)	$	2.25		$	2.68		$	3.22		$	2.86		**		**
Income from discontinued operations	—			—			0.01			0.02			—			**		**
Net income (loss) per diluted common share	$	(3.10	)	$	2.25		$	2.69		$	3.24		$	2.86		**		**
Weighted-average common shares outstanding (in millions):
Basic	457.6			460.9			469.5			470.8			469.4			(1	)%	(3	)%
Diluted	457.6			463.4			471.8			473.0			471.6			(1	)	(3	)
Common shares outstanding (period-end, in millions)	455.3			456.6			465.7			470.3			469.6			—		(3	)
Dividends declared and paid per common share	$	0.40		$	0.40		$	0.40		$	0.40		$	0.40		—		—
Tangible book value per common share (period-end)⁽⁴⁾	80.68			83.72			80.46			77.65			72.86			(4	)	11



											2020 Q1 vs.
(Dollars in millions)	2020		2019		2019		2019		2019		2019		2019
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Balance Sheet (Period-End)
Loans held for investment	$	262,990	$	265,809	$	249,355	$	244,460	$	240,273	(1	)%	9	%
Interest-earning assets	364,472		355,202		344,643		339,160		340,071		3		7
Total assets	396,878		390,365		378,810		373,619		373,191		2		6
Interest-bearing deposits	245,142		239,209		234,084		231,161		230,199		2		6
Total deposits	269,689		262,697		257,148		254,535		255,107		3		6
Borrowings	55,681		55,697		50,149		49,233		50,358		—		11
Common equity	51,620		53,157		52,412		51,406		49,120		(3	)	5
Total stockholders’ equity	56,830		58,011		58,235		55,767		53,481		(2	)	6
Balance Sheet (Average Balances)
Loans held for investment	$	262,889	$	258,870	$	246,147	$	242,653	$	241,959	2	%	9	%
Interest-earning assets	355,347		349,150		340,949		338,026		337,793		2		5
Total assets	390,380		383,162		374,905		371,095		370,394		2		5
Interest-bearing deposits	241,115		236,250		232,063		230,452		227,572		2		6
Total deposits	264,653		260,040		255,082		253,634		251,410		2		5
Borrowings	51,795		51,442		49,413		49,982		53,055		1		(2	)
Common equity	53,186		52,641		52,566		50,209		48,359		1		10
Total stockholders’ equity	58,568		58,148		57,245		54,570		52,720		1		11

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated



																2020 Q1 vs.
(Dollars in millions, except as noted)	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Performance Metrics
Net interest income growth (period over period)	(1		)%	6		%	—			(1		)%	—			**		**
Non-interest income growth (period over period)	(10		)	11			(11		)%	7			8		%	**		**
Total net revenue growth (period over period)	(2		)	7			(2		)	1			1			**		**
Total net revenue margin⁽⁵⁾	8.16			8.51			8.16			8.43			8.39			(35	)bps	(23	)bps
Net interest margin⁽⁶⁾	6.78			6.95			6.73			6.80			6.86			(17	)	(8	)
Return on average assets	(1.37		)	1.23			1.42			1.74			1.52			**		**
Return on average tangible assets⁽⁷⁾	(1.43		)	1.28			1.48			1.82			1.59			**		**
Return on average common equity⁽⁸⁾	(10.68		)	7.93			9.63			12.14			11.13			**		**
Return on average tangible common equity⁽⁹⁾	(14.85		)	11.07			13.45			17.26			16.11			**		**
Non-interest expense as a percentage of average loans held for investment	5.67			6.43			6.29			6.23			6.07			(76	)	(40	)
Efficiency ratio⁽¹⁰⁾	51.44			56.03			55.64			53.05			51.83			(459	)	(39	)
Operating efficiency ratio⁽¹¹⁾	44.67			46.47			48.44			45.38			44.53			(180	)	14
Effective income tax rate for continuing operations	29.6			18.6			22.0			19.3			18.0			59	%	64	%
Employees (period-end, in thousands)	52.1			51.9			52.1			50.7			48.8			—		7
Credit Quality Metrics
Allowance for credit losses	$	14,073		$	7,208		$	7,037		$	7,133		$	7,313		95	%	92	%
Allowance coverage ratio	5.35		%	2.71		%	2.82		%	2.92		%	3.04		%	264	bps	231	bps
Net charge-offs	$	1,791		$	1,683		$	1,462		$	1,508		$	1,599		6	%	12	%
Net charge-off rate⁽¹²⁾	2.72		%	2.60		%	2.38		%	2.48		%	2.64		%	12	bps	8	bps
30+ day performing delinquency rate⁽¹⁶⁾	2.95			3.51			3.28			3.15			3.23			(56	)	(28	)
30+ day delinquency rate⁽¹⁶⁾	3.16			3.74			3.51			3.35			3.40			(58	)	(24	)
Capital Ratios⁽¹³⁾
Common equity Tier 1 capital	12.0		%	12.2		%	12.5		%	12.3		%	11.9		%	(20	)bps	10	bps
Tier 1 capital	13.7			13.7			14.4			13.8			13.4			—		30
Total capital	16.1			16.1			16.8			16.2			15.8			—		30
Tier 1 leverage	11.0			11.7			11.9			11.4			11.0			(70	)	—
Tangible common equity (“TCE”)⁽¹⁴⁾	9.6			10.2			10.3			10.2			9.6			(60	)	—

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income



																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions, except per share data and as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Interest income:
Loans, including loans held for sale	$	6,542		$	6,682		$	6,429		$	6,383		$	6,368		(2	)%	3	%
Investment securities	530			544			583			629			655			(3	)	(19	)
Other	37			44			63			64			69			(16	)	(46	)
Total interest income	7,109			7,270			7,075			7,076			7,092			(2	)	—
Interest expense:
Deposits	731			832			901			870			817			(12	)	(11	)
Securitized debt obligations	99			118			123			139			143			(16	)	(31	)
Senior and subordinated notes	239			236			299			310			314			1		(24	)
Other borrowings	15			18			15			11			27			(17	)	(44	)
Total interest expense	1,084			1,204			1,338			1,330			1,301			(10	)	(17	)
Net interest income	6,025			6,066			5,737			5,746			5,791			(1	)	4
Provision for credit losses	5,423			1,818			1,383			1,342			1,693			198		220
Net interest income after provision for credit losses	602			4,248			4,354			4,404			4,098			(86	)	(85	)
Non-interest income:
Interchange fees, net	752			811			790			820			758			(7	)	(1	)
Service charges and other customer-related fees	327			342			283			352			353			(4	)	(7	)
Net securities gains (losses)	—			(18		)	5			15			24			**		**
Other	145			226			144			191			157			(36	)	(8	)
Total non-interest income	1,224			1,361			1,222			1,378			1,292			(10	)	(5	)
Non-interest expense:
Salaries and associate benefits	1,627			1,652			1,605			1,558			1,573			(2	)	3
Occupancy and equipment	517			565			519			521			493			(8	)	5
Marketing	491			710			501			546			517			(31	)	(5	)
Professional services	287			318			314			314			291			(10	)	(1	)
Communications and data processing	302			346			312			329			303			(13	)	—
Amortization of intangibles	22			28			25			29			30			(21	)	(27	)
Other⁽¹⁵⁾	483			542			596			482			464			(11	)	4
Total non-interest expense	3,729			4,161			3,872			3,779			3,671			(10	)	2
Income (loss) from continuing operations before income taxes	(1,903		)	1,448			1,704			2,003			1,719			**		**
Income tax provision (benefit)	(563		)	270			375			387			309			**		**
Income (loss) from continuing operations, net of tax	(1,340		)	1,178			1,329			1,616			1,410			**		**
Income (loss) from discontinued operations, net of tax	—			(2		)	4			9			2			**		**
Net income (loss)	(1,340		)	1,176			1,333			1,625			1,412			**		**
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(3		)	(7		)	(10		)	(12		)	(12		)	(57	)	(75	)
Preferred stock dividends	(55		)	(97		)	(53		)	(80		)	(52		)	(43	)	6
Issuance cost for redeemed preferred stock⁽³⁾	(22		)	(31		)	—			—			—			(29	)	**
Net income (loss) available to common stockholders	$	(1,420	)	$	1,041		$	1,270		$	1,533		$	1,348		**		**


																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions, except per share data and as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Basic earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	(3.10	)	$	2.26		$	2.70		$	3.24		$	2.87		**		**
Income from discontinued operations	—			—			0.01			0.02			—			**		**
Net income (loss) per basic common share	$	(3.10	)	$	2.26		$	2.71		$	3.26		$	2.87		**		**
Diluted earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	(3.10	)	$	2.25		$	2.68		$	3.22		$	2.86		**		**
Income from discontinued operations	—			—			0.01			0.02			—			**		**
Net income (loss) per diluted common share	$	(3.10	)	$	2.25		$	2.69		$	3.24		$	2.86		**		**
Weighted-average common shares outstanding (in millions):
Basic common shares	457.6			460.9			469.5			470.8			469.4			(1	)%	(3	)%
Diluted common shares	457.6			463.4			471.8			473.0			471.6			(1	)	(3	)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets



																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Assets:
Cash and cash equivalents:
Cash and due from banks	$	4,545		$	4,129		$	4,452		$	5,184		$	4,572		10	%	(1	)%
Interest-bearing deposits and other short-term investments	20,391			9,278			12,668			9,927			12,897			120		58
Total cash and cash equivalents	24,936			13,407			17,120			15,111			17,469			86		43
Restricted cash for securitization investors	364			342			417			710			1,969			6		(82	)
Investment securities:
Securities available for sale	81,423			79,213			46,168			45,658			45,888			3		77
Securities held to maturity	—			—			33,894			35,475			36,503			—		(100	)
Total investment securities	81,423			79,213			80,062			81,133			82,391			3		(1	)
Loans held for investment:
Unsecuritized loans held for investment	231,318			231,992			215,892			211,556			208,591			—		11
Loans held in consolidated trusts	31,672			33,817			33,463			32,904			31,682			(6	)	—
Total loans held for investment	262,990			265,809			249,355			244,460			240,273			(1	)	9
Allowance for credit losses	(14,073		)	(7,208		)	(7,037		)	(7,133		)	(7,313		)	95		92
Net loans held for investment	248,917			258,601			242,318			237,327			232,960			(4	)	7
Loans held for sale	1,056			400			1,245			1,829			905			164		17
Premises and equipment, net	4,336			4,378			4,311			4,243			4,205			(1	)	3
Interest receivable	1,687			1,758			1,627			1,544			1,615			(4	)	4
Goodwill	14,645			14,653			14,624			14,545			14,546			—		1
Other assets	19,514			17,613			17,086			17,177			17,131			11		14
Total assets	$	396,878		$	390,365		$	378,810		$	373,619		$	373,191		2		6



																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Liabilities:
Interest payable	$	359		$	439		$	370		$	437		$	382		(18	)%	(6	)%
Deposits:
Non-interest-bearing deposits	24,547			23,488			23,064			23,374			24,908			5		(1	)
Interest-bearing deposits	245,142			239,209			234,084			231,161			230,199			2		6
Total deposits	269,689			262,697			257,148			254,535			255,107			3		6
Securitized debt obligations	17,141			17,808			18,910			16,959			19,273			(4	)	(11	)
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	399			314			464			359			335			27		19
Senior and subordinated notes	32,049			30,472			30,682			31,822			30,645			5		5
Other borrowings	6,092			7,103			93			93			105			(14	)	**
Total other debt	38,540			37,889			31,239			32,274			31,085			2		24
Other liabilities	14,319			13,521			12,908			13,647			13,863			6		3
Total liabilities	340,048			332,354			320,575			317,852			319,710			2		6

Stockholders’ equity:
Preferred stock	0			0			0			0			0			—		—
Common stock	7			7			7			7			7			—		—
Additional paid-in capital, net	33,450			32,980			33,826			32,262			32,160			1		4
Retained earnings	36,552			40,340			39,476			38,386			37,030			(9	)	(1	)
Accumulated other comprehensive income (loss)	3,679			1,156			453			170			(660		)	**		**
Treasury stock, at cost	(16,858		)	(16,472		)	(15,527		)	(15,058		)	(15,056		)	2		12
Total stockholders’ equity	56,830			58,011			58,235			55,767			53,481			(2	)	6
Total liabilities and stockholders’ equity	$	396,878		$	390,365		$	378,810		$	373,619		$	373,191		2		6

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)


⁽¹⁾	Total net revenue was reduced by $389 million in Q1 2020 for credit card finance charges and fees charged-off as uncollectible, and by $365 million in Q4 2019, $330 million in Q3 2019, $318 million in Q2 2019 and $376 million in Q1 2019 for the estimated uncollectible amount of credit card finance charges and fees and related losses.

⁽²⁾

Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on our non-GAAP measures.

⁽³⁾

On March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B. The redemption increased our net loss available to common shareholders by $22 million in Q1 2020. On December 2, 2019, we redeemed all outstanding shares of our fixed rate 6.25% non-cumulative perpetual preferred stock Series C and fixed rate 6.70% non-cumulative perpetual preferred stock Series D. The redemption reduced our net income available to common shareholders by $31 million in Q4 2019.


⁽⁴⁾	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.


⁽⁵⁾	Total net revenue margin is calculated based on total net revenue for the period divided by average interest-earning assets for the period.


⁽⁶⁾	Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.


⁽⁷⁾	Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period divided by average tangible assets for the period. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.


⁽⁸⁾	Return on average common equity is calculated based on net income (loss) available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.

⁽⁹⁾

Return on average tangible common equity (“ROTCE”) is a non-GAAP measure calculated based on net income (loss) available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity (“TCE”). Our calculation of return on average TCE may not be comparable to similarly-titled measures reported by other companies. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.


⁽¹⁰⁾	Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on our non-GAAP measures.


⁽¹¹⁾	Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on our non-GAAP measures.


⁽¹²⁾	Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.


⁽¹³⁾	Capital ratios as of the end of Q1 2020 are preliminary and therefore subject to change. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for information on the calculation of each of these ratios.


⁽¹⁴⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See “Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.


⁽¹⁵⁾	Includes net Cybersecurity Incident expenses of $4 million in Q1 2020, $16 million in Q4 2019, and $22 million in Q3 2019, respectively.


⁽¹⁶⁾	Metrics for Q1 2020 include the impact of COVID-19 customer assistance programs where applicable.


**	Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 6: Average Balances, Net Interest Income and Net Interest Margin



	2020 Q1						2019 Q4						2019 Q1
	Average Balance		Interest Income/ Expense		Yield/Rate		Average Balance		Interest Income/ Expense		Yield/Rate		Average Balance		Interest Income/ Expense		Yield/Rate
(Dollars in millions, except as noted)	Average Balance		Interest Income/ Expense		Yield/Rate		Average Balance		Interest Income/ Expense		Yield/Rate		Average Balance		Interest Income/ Expense		Yield/Rate
Interest-earning assets:
Loans, including loans held for sale	$	263,631	$	6,542	9.93	%	$	259,855	$	6,682	10.29	%	$	242,929	$	6,368	10.49	%
Investment securities	78,212		530		2.71		79,104		544		2.75		83,679		655		3.13
Cash equivalents and other	13,504		37		1.10		10,191		44		1.70		11,185		69		2.47
Total interest-earning assets	$	355,347	$	7,109	8.00		$	349,150	$	7,270	8.33		$	337,793	$	7,092	8.40
Interest-bearing liabilities:
Interest-bearing deposits	$	241,115	$	731	1.21		$	236,250	$	832	1.41		$	227,572	$	817	1.44
Securitized debt obligations	18,054		99		2.20		18,339		118		2.58		18,747		143		3.05
Senior and subordinated notes	31,342		239		3.04		30,597		236		3.08		30,836		314		4.07
Other borrowings and liabilities	3,779		15		1.62		3,789		18		1.95		4,684		27		2.34
Total interest-bearing liabilities	$	294,290	$	1,084	1.47		$	288,975	$	1,204	1.67		$	281,839	$	1,301	1.85
Net interest income/spread			$	6,025	6.53				$	6,066	6.66				$	5,791	6.55
Impact of non-interest-bearing funding					0.25						0.29						0.31
Net interest margin					6.78	%					6.95	%					6.86	%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics



											2020 Q1 vs.
	2020		2019		2019		2019		2019		2019		2019
(Dollars in millions, except as noted)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card	$	109,549	$	118,606	$	104,664	$	102,959	$	101,052	(8	)%	8	%
International card businesses	8,248		9,630		9,017		9,182		8,784		(14	)	(6	)
Total credit card⁽¹⁾	117,797		128,236		113,681		112,141		109,836		(8	)	7
Consumer banking:
Auto	61,364		60,362		59,278		57,556		56,444		2		9
Retail banking	2,669		2,703		2,737		2,771		2,804		(1	)	(5	)
Total consumer banking	64,033		63,065		62,015		60,327		59,248		2		8
Commercial banking:
Commercial and multifamily real estate	32,373		30,245		30,009		29,861		28,984		7		12
Commercial and industrial	48,787		44,263		43,650		42,125		42,197		10		16
Total commercial lending	81,160		74,508		73,659		71,986		71,181		9		14
Small-ticket commercial real estate	—		—		—		6		8		**		**
Total commercial banking	81,160		74,508		73,659		71,992		71,189		9		14
Total loans held for investment	$	262,990	$	265,809	$	249,355	$	244,460	$	240,273	(1	)	9
Loans Held for Investment (Average)
Credit card:
Domestic credit card	$	113,711	$	112,965	$	103,426	$	101,930	$	102,667	1	%	11	%
International card businesses	9,065		9,120		8,945		8,868		8,789		(1	)	3
Total credit card⁽¹⁾	122,776		122,085		112,371		110,798		111,456		1		10
Consumer banking:
Auto	61,005		59,884		58,517		57,070		56,234		2		8
Retail banking	2,666		2,712		2,752		2,788		2,831		(2	)	(6	)
Total consumer banking	63,671		62,596		61,269		59,858		59,065		2		8
Commercial banking:
Commercial and multifamily real estate	31,081		30,173		29,698		29,514		29,034		3		7
Commercial and industrial	45,361		44,016		42,807		42,476		42,132		3		8
Total commercial lending	76,442		74,189		72,505		71,990		71,166		3		7
Small-ticket commercial real estate	—		—		2		7		272		**		**
Total commercial banking	76,442		74,189		72,507		71,997		71,438		3		7
Total average loans held for investment	$	262,889	$	258,870	$	246,147	$	242,653	$	241,959	2		9



											2020 Q1 vs.
	2020		2019		2019		2019		2019		2019		2019
	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Net Charge-Off Rates
Credit card:
Domestic credit card	4.68	%	4.32	%	4.12	%	4.86	%	5.04	%	36	bps	(36	)bps
International card businesses	4.65		4.22		3.78		3.63		3.20		43		145
Total credit card	4.68		4.31		4.09		4.76		4.90		37		(22	)
Consumer banking:
Auto	1.51		1.90		1.60		1.09		1.44		(39	)	7
Retail banking	2.37		2.77		2.55		2.42		2.56		(40	)	(19	)
Total consumer banking	1.54		1.93		1.64		1.15		1.49		(39	)	5
Commercial banking:
Commercial and multifamily real estate	—		—		0.02		—		—		—		—
Commercial and industrial	0.96		0.60		0.55		0.15		0.13		36		83
Total commercial banking	0.57		0.35		0.33		0.09		0.08		22		49
Total net charge-offs	2.72		2.60		2.38		2.48		2.64		12		8
30+ Day Performing Delinquency Rates⁽¹⁴⁾
Credit card:
Domestic credit card	3.69	%	3.93	%	3.71	%	3.40	%	3.72	%	(24	)bps	(3	)bps
International card businesses	3.66		3.47		3.52		3.40		3.61		19		5
Total credit card	3.69		3.89		3.69		3.40		3.71		(20	)	(2	)
Consumer banking:
Auto	5.29		6.88		6.47		6.10		5.78		(159	)	(49	)
Retail banking	1.27		1.02		1.01		0.93		0.84		25		43
Total consumer banking	5.12		6.63		6.23		5.87		5.55		(151	)	(43	)
Nonperforming Loans and Nonperforming Assets Rates⁽²⁾⁽³⁾
Credit card:
International card businesses	0.29	%	0.26	%	0.25	%	0.25	%	0.26	%	3	bps	3	bps
Total credit card	0.02		0.02		0.02		0.02		0.02		—		—
Consumer banking:
Auto	0.62		0.81		0.73		0.64		0.57		(19	)	5
Retail banking	0.88		0.87		0.91		1.02		1.10		1		(22	)
Total consumer banking	0.63		0.81		0.74		0.66		0.59		(18	)	4
Commercial banking:
Commercial and multifamily real estate	0.22		0.12		0.12		0.14		0.24		10		(2	)
Commercial and industrial	0.87		0.93		0.95		0.74		0.71		(6	)	16
Total commercial banking	0.61		0.60		0.61		0.50		0.53		1		8
Total nonperforming loans	0.35		0.37		0.37		0.32		0.31		(2	)	4
Total nonperforming assets	0.37		0.39		0.40		0.34		0.33		(2	)	4

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity



	Three Months Ended March 31, 2020
	Credit Card									Consumer Banking
(Dollars in millions)	Domestic Card			International Card Businesses			Total Credit Card			Auto			Retail Banking			Total Consumer Banking			Commercial Banking			Total
Allowance for credit losses:
Balance as of December 31, 2019	$	4,997		$	398		$	5,395		$	984		$	54		$	1,038		$	775		$	7,208
Cumulative effects from adoption of the current expected credit loss (“CECL”) standard	2,237			4			2,241			477			25			502			102			2,845
Finance charge and fee reserve reclassification⁽¹⁾	439			23			462			—			—			—			—			462
Balance as of January 1, 2020	7,673			425			8,098			1,461			79			1,540			877			10,515
Charge-offs	(1,715		)	(134		)	(1,849		)	(476		)	(20		)	(496		)	(112		)	(2,457		)
Recoveries	384			29			413			246			4			250			3			666
Net charge-offs	(1,331		)	(105		)	(1,436		)	(230		)	(16		)	(246		)	(109		)	(1,791		)
Provision for credit losses	3,464			238			3,702			827			33			860			805			5,367
Allowance build for credit losses	2,133			133			2,266			597			17			614			696			3,576
Other changes⁽⁴⁾	—			(18		)	(18		)	—			—			—			—			(18		)
Balance as of March 31, 2020	9,806			540			10,346			2,058			96			2,154			1,573			14,073
Reserve for unfunded lending commitments:
Balance as of December 31, 2019	—			—			—			—			5			5			130			135
Cumulative effects from adoption of the CECL standard	—			—			—			—			(5		)	(5		)	42			37
Balance as of January 1, 2020	—			—			—			—			—			—			172			172
Provision for losses on unfunded lending commitments	—			—			—			—			—			—			51			51
Balance as of March 31, 2020	—			—			—			—			—			—			223			223
Combined allowance and reserve as of March 31, 2020	$	9,806		$	540		$	10,346		$	2,058		$	96		$	2,154		$	1,796		$	14,296

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results



	Three Months Ended March 31, 2020
(Dollars in millions)	Credit Card			Consumer Banking			Commercial Banking⁽⁵⁾			Other⁽⁵⁾			Total
Net interest income	$	3,702		$	1,657		$	491		$	175		$	6,025
Non-interest income (loss)	911			126			238			(51		)	1,224
Total net revenue	4,613			1,783			729			124			7,249
Provision for credit losses	3,702			860			856			5			5,423
Non-interest expense	2,208			991			412			118			3,729
Income (loss) from continuing operations before income taxes	(1,297		)	(68		)	(539		)	1			(1,903		)
Income tax benefit	(306		)	(16		)	(128		)	(113		)	(563		)
Income (loss) from continuing operations, net of tax	$	(991	)	$	(52	)	$	(411	)	$	114		$	(1,340	)

	Three Months Ended December 31, 2019
(Dollars in millions)	Credit Card			Consumer Banking			Commercial Banking⁽⁵⁾			Other⁽⁵⁾			Total
Net interest income	$	3,794		$	1,662		$	494		$	116		$	6,066
Non-interest income (loss)	1,030			152			223			(44		)	1,361
Total net revenue	4,824			1,814			717			72			7,427
Provision for credit losses	1,421			335			62			—			1,818
Non-interest expense	2,487			1,110			441			123			4,161
Income (loss) from continuing operations before income taxes	916			369			214			(51		)	1,448
Income tax provision (benefit)	212			86			50			(78		)	270
Income from continuing operations, net of tax	$	704		$	283		$	164		$	27		$	1,178

	Three Months Ended March 31, 2019
(Dollars in millions)	Credit Card			Consumer Banking			Commercial Banking⁽⁵⁾			Other⁽⁵⁾			Total
Net interest income	$	3,590		$	1,679		$	489		$	33		$	5,791
Non-interest income (loss)	950			160			187			(5		)	1,292
Total net revenue	4,540			1,839			676			28			7,083
Provision for credit losses	1,389			235			69			—			1,693
Non-interest expense	2,171			994			417			89			3,671
Income (loss) from continuing operations before income taxes	980			610			190			(61		)	1,719
Income tax provision (benefit)	229			142			44			(106		)	309
Income from continuing operations, net of tax	$	751		$	468		$	146		$	45		$	1,410

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business



																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Credit Card
Earnings:
Net interest income	$	3,702		$	3,794		$	3,546		$	3,531		$	3,590		(2	)%	3	%
Non-interest income	911			1,030			870			1,038			950			(12	)	(4	)
Total net revenue	4,613			4,824			4,416			4,569			4,540			(4	)	2
Provision for credit losses	3,702			1,421			1,087			1,095			1,389			161		167
Non-interest expense	2,208			2,487			2,360			2,253			2,171			(11	)	2
Income (loss) from continuing operations before income taxes	(1,297		)	916			969			1,221			980			**		**
Income tax provision (benefit)	(306		)	212			235			283			229			**		**
Income (loss) from continuing operations, net of tax	$	(991	)	$	704		$	734		$	938		$	751		**		**
Selected performance metrics:
Period-end loans held for investment⁽¹⁾	$	117,797		$	128,236		$	113,681		$	112,141		$	109,836		(8	)	7
Average loans held for investment⁽¹⁾	122,776			122,085			112,371			110,798			111,456			1		10
Average yield on loans held for investment⁽⁶⁾	14.46		%	15.02		%	15.55		%	15.66		%	15.77		%	(56	)bps	(131	)bps
Total net revenue margin⁽⁷⁾	15.03			15.80			15.72			16.50			16.29			(77	)	(126	)
Net charge-off rate	4.68			4.31			4.09			4.76			4.90			37		(22	)
30+ day performing delinquency rate	3.69			3.89			3.69			3.40			3.71			(20	)	(2	)
30+ day delinquency rate	3.70			3.91			3.71			3.42			3.72			(21	)	(2	)
Nonperforming loan rate⁽²⁾	0.02			0.02			0.02			0.02			0.02			—		—
Purchase volume⁽⁸⁾	$	99,920		$	116,631		$	108,034		$	106,903		$	93,197		(14	)%	7	%



																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Domestic Card
Earnings:
Net interest income	$	3,381		$	3,473		$	3,299		$	3,220		$	3,273		(3	)%	3	%
Non-interest income	842			962			878			971			873			(12	)	(4	)
Total net revenue	4,223			4,435			4,177			4,191			4,146			(5	)	2
Provision for credit losses	3,464			1,346			1,010			1,024			1,291			157		168
Non-interest expense	1,984			2,249			2,076			2,034			1,949			(12	)	2
Income (loss) from continuing operations before income taxes	(1,225		)	840			1,091			1,133			906			**		**
Income tax provision (benefit)	(290		)	196			254			264			211			**		**
Income (loss) from continuing operations, net of tax	$	(935	)	$	644		$	837		$	869		$	695		**		**
Selected performance metrics:
Period-end loans held for investment⁽¹⁾	$	109,549		$	118,606		$	104,664		$	102,959		$	101,052		(8	)	8
Average loans held for investment⁽¹⁾	113,711			112,965			103,426			101,930			102,667			1		11
Average yield on loans held for investment⁽⁶⁾	14.30		%	14.91		%	15.74		%	15.60		%	15.69		%	(61	)bps	(139	)bps
Total net revenue margin⁽⁷⁾	14.86			15.70			16.15			16.45			16.15			(84	)	(129	)
Net charge-off rate	4.68			4.32			4.12			4.86			5.04			36		(36	)
30+ day performing delinquency rate	3.69			3.93			3.71			3.40			3.72			(24	)	(3	)
Purchase volume⁽⁸⁾	$	92,248		$	107,154		$	99,087		$	98,052		$	85,738		(14	)%	8	%
Refreshed FICO scores:⁽⁹⁾
Greater than 660	65		%	67		%	68		%	68		%	66		%	(2	)	(1	)
660 or below	35			33			32			32			34			2		1
Total	100		%	100		%	100		%	100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business



																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Consumer Banking
Earnings:
Net interest income	$	1,657		$	1,662		$	1,682		$	1,709		$	1,679		—		(1	)%
Non-interest income	126			152			165			166			160			(17	)%	(21	)
Total net revenue	1,783			1,814			1,847			1,875			1,839			(2	)	(3	)
Provision for credit losses	860			335			203			165			235			157		**
Non-interest expense	991			1,110			985			1,002			994			(11	)	—
Income (loss) from continuing operations before income taxes	(68		)	369			659			708			610			**		**
Income tax provision (benefit)	(16		)	86			154			165			142			**		**
Income (loss) from continuing operations, net of tax	$	(52	)	$	283		$	505		$	543		$	468		**		**
Selected performance metrics:
Period-end loans held for investment	$	64,033		$	63,065		$	62,015		$	60,327		$	59,248		2		8
Average loans held for investment	63,671			62,596			61,269			59,858			59,065			2		8
Average yield on loans held for investment⁽⁶⁾	8.46		%	8.51		%	8.47		%	8.36		%	8.15		%	(5	)bps	31	bps
Auto loan originations	$	7,640		$	7,527		$	8,175		$	7,327		$	6,222		2	%	23	%
Period-end deposits	217,607			213,099			206,423			205,220			205,439			2		6
Average deposits	215,071			209,783			204,933			204,164			201,072			3		7
Average deposits interest rate	1.06		%	1.20		%	1.31		%	1.26		%	1.18		%	(14	)bps	(12	)bps
Net charge-off rate	1.54			1.93			1.64			1.15			1.49			(39	)	5
30+ day performing delinquency rate	5.12			6.63			6.23			5.87			5.55			(151	)	(43	)
30+ day delinquency rate	5.65			7.34			6.86			6.41			6.02			(169	)	(37	)
Nonperforming loan rate⁽²⁾	0.63			0.81			0.74			0.66			0.59			(18	)	4
Nonperforming asset rate⁽³⁾	0.71			0.91			0.83			0.75			0.68			(20	)	3
Auto—At origination FICO scores:⁽¹⁰⁾
Greater than 660	47		%	48		%	48		%	49		%	49		%	(1	)%	(2	)%
621 - 660	20			20			20			19			19			—		1
620 or below	33			32			32			32			32			1		1
Total	100		%	100		%	100		%	100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business



																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Commercial Banking
Earnings:
Net interest income	$	491		$	494		$	486		$	514		$	489		(1	)%	—
Non-interest income	238			223			221			200			187			7		27	%
Total net revenue⁽⁵⁾	729			717			707			714			676			2		8
Provision for credit losses	856			62			93			82			69			**		**
Non-interest expense	412			441			414			427			417			(7	)	(1	)
Income (loss) from continuing operations before income taxes	(539		)	214			200			205			190			**		**
Income tax provision (benefit)	(128		)	50			46			48			44			**		**
Income (loss) from continuing operations, net of tax	$	(411	)	$	164		$	154		$	157		$	146		**		**
Selected performance metrics:
Period-end loans held for investment	$	81,160		$	74,508		$	73,659		$	71,992		$	71,189		9		14
Average loans held for investment	76,442			74,189			72,507			71,997			71,438			3		7
Average yield on loans held for investment⁽⁵⁾⁽⁶⁾	3.88		%	4.22		%	4.45		%	4.75		%	4.62		%	(34	)bps	(74	)bps
Period-end deposits	$	32,822		$	32,134		$	30,923		$	30,761		$	31,248		2	%	5	%
Average deposits	32,238			32,034			30,693			31,364			30,816			1		5
Average deposits interest rate	0.89		%	1.10		%	1.25		%	1.28		%	1.11		%	(21	)bps	(22	)bps
Net charge-off rate	0.57			0.35			0.33			0.09			0.08			22		49
Nonperforming loan rate⁽²⁾	0.61			0.60			0.61			0.50			0.53			1		8
Nonperforming asset rate⁽³⁾	0.61			0.60			0.61			0.50			0.53			1		8
Risk category:⁽¹¹⁾
Noncriticized	$	77,714		$	71,848		$	71,144		$	69,390		$	68,594		8	%	13	%
Criticized performing	2,952			2,181			2,035			2,211			2,094			35		41
Criticized nonperforming	494			448			449			360			378			10		31
PCI loans	—			31			31			31			123			**		**
Total commercial banking loans	$	81,160		$	74,508		$	73,659		$	71,992		$	71,189		9		14
Risk category as a percentage of period-end loans held for investment:⁽¹¹⁾
Noncriticized	95.8		%	96.5		%	96.6		%	96.4		%	96.4		%	(70	)bps	(60	)bps
Criticized performing	3.6			2.9			2.8			3.1			2.9			70		70
Criticized nonperforming	0.6			0.6			0.6			0.5			0.5			—		10
PCI loans	—			—			—			—			0.2			**		**
Total commercial banking loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total



																2020 Q1 vs.
	2020			2019			2019			2019			2019			2019		2019
(Dollars in millions)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Other
Earnings:
Net interest income	$	175		$	116		$	23		$	(8	)	$	33		51	%	**
Non-interest loss	(51		)	(44		)	(34		)	(26		)	(5		)	16		**
Total net revenue (loss)⁽⁵⁾	124			72			(11		)	(34		)	28			72		**
Provision for credit losses	5			—			—			—			—			**		**
Non-interest expense^(12)(13)	118			123			113			97			89			(4	)	33	%
Income (loss) from continuing operations before income taxes	1			(51		)	(124		)	(131		)	(61		)	**		**
Income tax benefit	(113		)	(78		)	(60		)	(109		)	(106		)	45		7
Income (loss) from continuing operations, net of tax	$	114		$	27		$	(64	)	$	(22	)	$	45		**		153
Selected performance metrics:
Period-end deposits	$	19,260		$	17,464		$	19,802		$	18,554		$	18,420		10		5
Average deposits	17,344			18,223			19,456			18,106			19,522			(5	)	(11	)
Total
Earnings:
Net interest income	$	6,025		$	6,066		$	5,737		$	5,746		$	5,791		(1	)%	4	%
Non-interest income	1,224			1,361			1,222			1,378			1,292			(10	)	(5	)
Total net revenue	7,249			7,427			6,959			7,124			7,083			(2	)	2
Provision for credit losses	5,423			1,818			1,383			1,342			1,693			198		220
Non-interest expense	3,729			4,161			3,872			3,779			3,671			(10	)	2
Income (loss) from continuing operations before income taxes	(1,903		)	1,448			1,704			2,003			1,719			**		**
Income tax provision (benefit)	(563		)	270			375			387			309			**		**
Income (loss) from continuing operations, net of tax	$	(1,340	)	$	1,178		$	1,329		$	1,616		$	1,410		**		**
Selected performance metrics:
Period-end loans held for investment	$	262,990		$	265,809		$	249,355		$	244,460		$	240,273		(1	)	9
Average loans held for investment	262,889			258,870			246,147			242,653			241,959			2		9
Period-end deposits	269,689			262,697			257,148			254,535			255,107			3		6
Average deposits	264,653			260,040			255,082			253,634			251,410			2		5

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)


⁽¹⁾	Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment.


⁽²⁾	Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.


⁽³⁾	Nonperforming assets consist of nonperforming loans, repossessed assets and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, repossessed assets and other foreclosed assets.


⁽⁴⁾	Represents foreign currency translation adjustments.


⁽⁵⁾	Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.


⁽⁶⁾	Average yield on loans held for investment is calculated based on annualized interest income for the period divided by average loans held for investment during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and does not include any allocations, such as funds transfer pricing.


⁽⁷⁾	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the respective loan category.


⁽⁸⁾	Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.

⁽⁹⁾

Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.


⁽¹⁰⁾	Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.


⁽¹¹⁾	Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.


⁽¹²⁾	Includes charges incurred as a result of restructuring activities.


⁽¹³⁾	Includes net Cybersecurity Incident expenses of $4 million in Q1 2020, $16 million in Q4 2019, and $22 million in Q3 2019, respectively.


⁽¹⁴⁾	Metrics for Q1 2020 include the impact of COVID-19 customer assistance programs where applicable.


**	Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures⁽¹⁾



	Basel III Standardized Approach
(Dollars in millions, except as noted)	March 31, 2020			December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019
Regulatory Capital Metrics
Common equity excluding AOCI	$	51,014		$	52,001		$	51,959		$	51,236		$	49,781
Adjustments:
AOCI, net of tax⁽²⁾	(170		)	1,156			453			170			(660		)
Goodwill, net of related deferred tax liabilities	(14,453		)	(14,465		)	(14,439		)	(14,365		)	(14,369		)
Intangible assets, net of related deferred tax liabilities	(151		)	(170		)	(180		)	(194		)	(223		)
Other⁽²⁾	—			(360		)	(588		)	(401		)	113
Common equity Tier 1 capital	$	36,240		$	38,162		$	37,205		$	36,446		$	34,642
Tier 1 capital	$	41,450		$	43,015		$	43,028		$	40,806		$	39,002
Total capital⁽³⁾	48,771			50,350			50,174			47,919			46,042
Risk-weighted assets	302,888			313,155			298,130			295,255			291,483
Adjusted average assets⁽⁴⁾	377,356			368,511			360,266			356,518			355,781
Capital Ratios
Common equity Tier 1 capital⁽⁵⁾	12.0		%	12.2		%	12.5		%	12.3		%	11.9		%
Tier 1 capital⁽⁶⁾	13.7			13.7			14.4			13.8			13.4
Total capital⁽⁷⁾	16.1			16.1			16.8			16.2			15.8
Tier 1 leverage⁽⁴⁾	11.0			11.7			11.9			11.4			11.0
Tangible common equity (“TCE”)⁽⁸⁾	9.6			10.2			10.3			10.2			9.6

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results. These adjusted results provide alternate measurements of our operating performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.



	2020									2019									2019
	Q1									Q4									Q1
(Dollars in millions, except per share data and as noted)	Reported Results			Adj.⁽⁹⁾			Adjusted Results			Reported Results			Adj.⁽⁹⁾			Adjusted Results			Reported Results			Adj.⁽⁹⁾			Adjusted Results
Selected income statement data:
Net interest income	$	6,025		—			$	6,025		$	6,066		—			$	6,066		$	5,791		—			$	5,791
Non-interest income	1,224			—			1,224			1,361			—			1,361			1,292			—			1,292
Total net revenue	7,249			—			7,249			7,427			—			7,427			7,083			—			7,083
Provision for credit losses	5,423			—			5,423			1,818			$	(84	)	1,734			1,693			—			1,693
Non-interest expense	3,729			$	(49	)	3,680			4,161			(64		)	4,097			3,671			$	(25	)	3,646
Income (loss) from continuing operations before income taxes	(1,903		)	49			(1,854		)	1,448			148			1,596			1,719			25			1,744
Income tax provision (benefit)	(563		)	12			(551		)	270			35			305			309			6			315
Income (loss) from continuing operations, net of tax	(1,340		)	37			(1,303		)	1,178			113			1,291			1,410			19			1,429
Income (loss) from discontinued operations, net of tax	—			—			—			(2		)	—			(2		)	2			—			2
Net income (loss)	(1,340		)	37			(1,303		)	1,176			113			1,289			1,412			19			1,431
Dividends and undistributed earnings allocated to participating securities⁽¹⁰⁾	(3		)	—			(3		)	(7		)	(1		)	(8		)	(12		)	—			(12		)
Preferred stock dividends	(55		)	—			(55		)	(97		)	—			(97		)	(52		)	—			(52		)
Issuance cost for redeemed preferred stock	(22		)	—			(22		)	(31		)	—			(31		)	—			—			—
Net income (loss) available to common stockholders	$	(1,420	)	$	37		$	(1,383	)	$	1,041		$	112		$	1,153		$	1,348		$	19		$	1,367
Selected performance metrics:
Diluted EPS⁽¹⁰⁾	$	(3.10	)	$	0.08		$	(3.02	)	$	2.25		$	0.24		$	2.49		$	2.86		$	0.04		$	2.90
Efficiency ratio	51.44		%	(67		)bps	50.77		%	56.03		%	(87		)bps	55.16		%	51.83		%	(35		)bps	51.48		%
Operating efficiency ratio	44.67			(68		)	43.99			46.47			(87		)	45.60			44.53			(35		)	44.18

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of TCE, tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. While our non-GAAP 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. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.



	2020			2019			2019			2019			2019
(Dollars in millions)	Q1			Q4			Q3			Q2			Q1
Tangible Common Equity (Period-End)
Stockholders’ equity	$	56,830		$	58,011		$	58,235		$	55,767		$	53,481
Goodwill and intangible assets⁽¹¹⁾	(14,888		)	(14,932		)	(14,940		)	(14,886		)	(14,904		)
Noncumulative perpetual preferred stock	(5,209		)	(4,853		)	(5,823		)	(4,360		)	(4,360		)
Tangible common equity	$	36,733		$	38,226		$	37,472		$	36,521		$	34,217
Tangible Common Equity (Average)
Stockholders’ equity	$	58,568		$	58,148		$	57,245		$	54,570		$	52,720
Goodwill and intangible assets⁽¹¹⁾	(14,930		)	(14,967		)	(14,908		)	(14,900		)	(14,932		)
Noncumulative perpetual preferred stock	(5,382		)	(5,506		)	(4,678		)	(4,360		)	(4,360		)
Tangible common equity	$	38,256		$	37,675		$	37,659		$	35,310		$	33,428
Tangible Assets (Period-End)
Total assets	$	396,878		$	390,365		$	378,810		$	373,619		$	373,191
Goodwill and intangible assets⁽¹¹⁾	(14,888		)	(14,932		)	(14,940		)	(14,886		)	(14,904		)
Tangible assets	$	381,990		$	375,433		$	363,870		$	358,733		$	358,287
Tangible Assets (Average)
Total assets	$	390,380		$	383,162		$	374,905		$	371,095		$	370,394
Goodwill and intangible assets⁽¹¹⁾	(14,930		)	(14,967		)	(14,908		)	(14,900		)	(14,932		)
Tangible assets	$	375,450		$	368,195		$	359,997		$	356,195		$	355,462

__________


⁽¹⁾	Regulatory capital metrics and capital ratios as of March 31, 2020 are preliminary and therefore subject to change.


⁽²⁾	In the first quarter of 2020, we elected to exclude from our regulatory capital ratios certain components of AOCI as permitted under the Tailoring Rules. As such, we revised our presentation herein to only include those components of AOCI that impact our regulatory capital ratios.


⁽³⁾	Total capital equals the sum of Tier 1 capital and Tier 2 capital.


⁽⁴⁾	Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that are deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.


⁽⁵⁾	Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.


⁽⁶⁾	Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.


⁽⁷⁾	Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.


⁽⁸⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.


⁽⁹⁾	The adjustments for the following periods consist of:



	2020		2019		2019
(Dollars in millions)	Q1		Q4		Q1
Legal reserve build	$	45	—		—
Cybersecurity Incident expenses, net of insurance	4		$	16	—
Initial allowance build on acquired Walmart portfolio	—		84		—
Walmart launch and related integration expenses	—		48		$	25
Total	49		148		25
Income tax provision	12		35		6
Net income	$	37	$	113	$	19


⁽¹⁰⁾	Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total.


⁽¹¹⁾	Includes impact of related deferred taxes.