2014

Capital One Reports Fourth Quarter 2013 Net Income of $859 million, or $1.45 per share

MCLEAN, Va., Jan. 16, 2014 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2013 of $859 million, or $1.45 per diluted common share, compared to the third quarter of 2013 with net income of $1.1 billion, or $1.86 per diluted common share, and up from the fourth quarter of 2012 with net income of $843 million, or $1.41 per diluted common share. Net income for the full year 2013 was $4.2 billion, or $6.96 per diluted common share, compared with net income of $3.5 billion, or $6.16 per diluted common share, for 2012.

"Capital One delivered strong financial performance in 2013," said Richard D. Fairbank, Chairman and CEO.  "We remain focused on resilient growth, disciplined cost management, and returning capital to shareholders in 2014."

All comparisons below are for the fourth quarter of 2013 compared with the third quarter of 2013 unless otherwise noted.  

Fourth Quarter 2013 Income Highlights:

  • Total net revenue decreased 2 percent to $5.5 billion.
  • Total non-interest expense increased 4 percent to $3.3 billion.
  • Pre-provision earnings decreased 10 percent to $2.3 billion.
  • Provision for credit losses increased 13 percent to $957 million.

Fourth Quarter 2013 Balance Sheet Highlights:

  • Tier 1 common ratio of 12.2 percent, down 50 basis points
  • Net interest margin of 6.73 percent, down 16 basis points
  • Domestic Card period-end loans increased $3.3 billion, or 5 percent, to $73.3 billion.
  • Commercial Banking period-end loans increased $2.6 billion, or 6 percent, to $45.0 billion.
  • Consumer Banking:
    • Automobile period-end loans increased $1.1 billion, or 3 percent, to $31.9 billion.
    • Home loans period-end loans decreased $1.5 billion, or 4 percent, to $35.3 billion, driven by expected run-off of acquired portfolios.
  • Average loans held for investment in the quarter increased $1.7 billion, or less than 1 percent, to $192.8 billion.
    • Domestic Card average loans increased $421 million, or less than 1 percent, to $70.4 billion.
    • Commercial Banking average loans increased $1.8 billion, or 4 percent, to $43.4 billion.
    • Consumer Banking:
      • Automobile average loans increased $1.3 billion, or 4 percent, to $31.4 billion.
      • Home loans average loans decreased by $1.9 billion, or 5 percent, to $36.0 billion, driven by expected run-off of acquired portfolios.
  • Period-end total deposits decreased $2.3 billion, or 1 percent, to $204.5 billion, while average deposits declined $2.6 billion, or 1 percent, to $205.7 billion.
  • Deposit interest rates declined 3 basis points to 0.63 percent.

Detailed segment information will be available in the company's Annual Report on Form 10-K for the year ended December 31, 2013.

Earnings Conference Call Webcast Information
The company will hold an earnings conference call on January 16, 2014, at 5:00 PM, Eastern Standard Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us", then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through January 30, 2014 at 5:00 PM.

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 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, 2012.

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 $204.5 billion in deposits and $297 billion in total assets as of December 31, 2013. 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 more than 900 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Exhibit 99.2

Capital One Financial Corporation
Financial Supplement
Fourth Quarter 2013(1)(2)
Table of Contents

Capital One Financial Corporation Consolidated

Page


Table 1:

Financial Summary—Consolidated

1


Table 2:

Selected Metrics—Consolidated

2


Table 3:

Consolidated Statements of Income

3


Table 4:

Consolidated Balance Sheets

4


Table 5:

Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 - 4)

5


Table 6:

Average Balances, Net Interest Income and Net Interest Margin

6


Table 7:

Loan Information and Performance Statistics

7

Business Segment Detail



Table 8:

Financial & Statistical Summary—Credit Card Business

8


Table 9:

Financial & Statistical Summary—Consumer Banking Business

9


Table 10:

Financial & Statistical Summary—Commercial Banking Business

10


Table 11:

Financial & Statistical Summary—Other and Total

11


Table 12:

Notes to Loan and Business Segment Disclosures (Tables 7 - 11)

12

Other



Table 13:

Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I

13

___________ 

(1)  The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our Annual Report on Form 10-K for the period ended December 31, 2013 once it is filed with the Securities and Exchange Commission.

(2)  References to ING Direct refer to the business and assets acquired and liabilities assumed in the February 17, 2012 acquisition. References to the 2012 U.S. card acquisition refer to the May 1, 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States.

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1:  Financial Summary—Consolidated(1)



2013


2013



2012

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


Q4


Q3



Q4

Earnings








Net interest income


$

4,423



$

4,560




$

4,528


Non-interest income(2)


1,121



1,091




1,096


Total net revenue(3)


5,544



5,651




5,624


Provision for credit losses


957



849




1,151


Non-interest expense:








Marketing


427



299




393


Amortization of intangibles(4)


166



161




191


Acquisition-related(5)


60



37




69


Operating expenses


2,627



2,650




2,602


Total non-interest expense


3,280



3,147




3,255


Income from continuing operations before income taxes


1,307



1,655




1,218


Income tax provision


425



525




370


Income from continuing operations, net of tax


882



1,130




848


Loss from discontinued operations, net of tax(2)


(23)



(13)




(5)


Net income


859



1,117




843


Dividends and undistributed earnings allocated to participating securities(6)


(4)



(5)




(3)


Preferred stock dividends(6)


(13)



(13)




(15)


Net income available to common stockholders


$

842



$

1,099




$

825


Common Share Statistics








Basic EPS:(6)








Net income from continuing operations, net of tax


$

1.51



$

1.91




$

1.43


Loss from discontinued operations, net of tax


(0.04)



(0.02)




(0.01)


Net income available to common stockholders per common share


$

1.47



$

1.89




$

1.42


Diluted EPS:(6)








Net income from continuing operations, net of tax


$

1.48



$

1.88




$

1.42


Loss from discontinued operations, net of tax


(0.03)



(0.02)




(0.01)


Net income available to common stockholders per common share


$

1.45



$

1.86




$

1.41


Weighted average common shares outstanding (in millions) for:








Basic EPS


573.4



582.3




579.2


Diluted EPS


582.6



591.1




585.6


Common shares outstanding (period end, in millions)


572.7



582.0




582.2


Dividends per common share


$

0.30



$

0.30




$

0.05


Tangible book value per common share (period end)(7)


42.47



43.19




40.23


Balance Sheet (Period End)








Loans held for investment(8)


$

197,199



$

191,814




$

205,889


Interest-earning assets


265,170



259,152




280,096


Total assets


297,048



289,888




312,918


Interest-bearing deposits


181,880



184,553




190,018


Total deposits


204,523



206,834




212,485


Borrowings


40,654



31,845




49,910


Common equity


40,891



40,897




39,646


Total stockholders' equity


41,744



41,750




40,499


Balance Sheet (Quarterly Average Balances)








Loans held for investment(8)


$

192,813



$

191,135




$

202,944


Interest-earning assets


262,957



264,796




277,886


Total assets


294,108



294,939




308,096


Interest-bearing deposits


184,206



186,752




192,122


Total deposits


205,706



208,340




213,494


Borrowings


36,463



36,355




44,189


Common equity


41,610



40,431




39,359


Total stockholders' equity


42,463



41,284




40,212

















 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2:  Selected Metrics—Consolidated(1)

 



2013


2013


2012


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


Q4


Q3


Q4


Performance Metrics








Net interest income growth (quarter over quarter)


(3)


%


%

(3)


%

Non-interest income growth (quarter over quarter)


3



1



(4)



Total net revenue growth (quarter over quarter)


(2)





(3)



Total net revenue margin(9)


8.43



8.54



8.10



Net interest margin(10)


6.73



6.89



6.52



Return on average assets(11)


1.20



1.53



1.10



Return on average tangible assets(12)


1.27



1.62



1.16



Return on average common equity(13)


8.32



11.00



8.44



Return on average tangible common equity(14)


13.81



18.08



14.42



Non-interest expense as a % of average loans held for investment(15)


6.80



6.59



6.42



Efficiency ratio(16)


59.16



55.69



57.88



Effective income tax rate for continuing operations


32.5



31.7



30.4



Full-time equivalent employees (in thousands), period end


42.0



39.6



39.6



Credit Quality Metrics(8)








Allowance for loan and lease losses


$

4,315



$

4,333



$

5,156



Allowance as a % of loans held for investment


2.19


%

2.26


%

2.50


%

Allowance as a % of loans held for investment (excluding acquired loans)


2.54



2.66



3.02



Net charge-offs


$

969



$

917



$

1,150



Net charge-off rate(17)


2.01


%

1.92


%

2.26


%

Net charge-off rate (excluding acquired  loans)(17)


2.37



2.29



2.78



30+ day performing delinquency rate


2.63



2.54



2.70



30+ day performing delinquency rate (excluding acquired loans)


3.08



3.01



3.29



30+ day delinquency rate


2.96



2.88



3.09



30+ day delinquency rate (excluding acquired loans)


3.46



3.41



3.77



Capital Ratios (18)








Tier 1 common ratio


12.2


%

12.7


%

11.0


%

Tier 1 risk-based capital ratio


12.6



13.1



11.3



Total risk-based capital ratio


14.7



15.3



13.6



Tangible common equity ("TCE") ratio


8.7



9.2



7.9



 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income(1)

 




Three Months Ended


Year Ended



December 31,


September 30,


December 31,


December 31,


December 31,

(Dollars in millions, except per share data) (unaudited)


2013


2013


2012


2013


2012

Interest income:











Loans, including loans held for sale


$

4,398



$

4,579



$

4,727



$

18,222



$

17,544


Investment securities


414



396



361



1,575



1,329


Other


27



23



27



101



91


Total interest income


4,839



4,998



5,115



19,898



18,964


Interest expense:











Deposits


288



309



348



1,241



1,403


Securitized debt obligations


40



42



58



183



271


Senior and subordinated notes


75



76



85



315



345


Other borrowings


13



11



96



53



356


Total interest expense


416



438



587



1,792



2,375


Net interest income


4,423



4,560



4,528



18,106



16,589


Provision for credit losses


957



849



1,151



3,453



4,415


Net interest income after provision for credit losses


3,466



3,711



3,377



14,653



12,174


Non-interest income:(2)











Service charges and other customer-related fees


504



530



595



2,118



2,106


Interchange fees, net


489



476



459



1,896



1,647


Net other-than-temporary impairment losses recognized in earnings


(1)



(11)



(12)



(41)



(52)


Bargain purchase gain(19)










594


Other


129



96



54



305



512


Total non-interest income


1,121



1,091



1,096



4,278



4,807


Non-interest expense:











Salaries and associate benefits


1,103



1,145



1,039



4,432



3,876


Occupancy and equipment


429



369



380



1,504



1,327


Marketing


427



299



393



1,373



1,364


Professional services


347



320



354



1,303



1,270


Communications and data processing


218



224



205



885



778


Amortization of intangibles(4)


166



161



191



671



609


Acquisition-related(5)


60



37



69



193



336


Other


530



592



624



2,153



2,386


Total non-interest expense


3,280



3,147



3,255



12,514



11,946


Income from continuing operations before income taxes


1,307



1,655



1,218



6,417



5,035


Income tax provision


425



525



370



2,025



1,301


Income from continuing operations, net of tax


882



1,130



848



4,392



3,734


Loss from discontinued operations, net of tax(2)


(23)



(13)



(5)



(233)



(217)


Net income


859



1,117



843



4,159



3,517


Dividends and undistributed earnings allocated to participating securities(6)


(4)



(5)



(3)



(17)



(15)


Preferred stock dividends(6)


(13)



(13)



(15)



(53)



(15)


Net income available to common stockholders


$

842



$

1,099



$

825



$

4,089



$

3,487













Basic earnings per common share:(6)











Net income from continuing operations


$

1.51



$

1.91



$

1.43



$

7.45



$

6.60


Loss from discontinued operations


(0.04)



(0.02)



(0.01)



(0.40)



(0.39)


Net income per basic common share


$

1.47



$

1.89



$

1.42



$

7.05



$

6.21













Diluted earnings per common share:(6)











Net income from continuing operations


$

1.48



$

1.88



$

1.42



$

7.35



$

6.54


Loss from discontinued operations


(0.03)



(0.02)



(0.01)



(0.39)



(0.38)


Net income per diluted common share


$

1.45



$

1.86



$

1.41



$

6.96



$

6.16













Weighted average common shares outstanding (in millions) for:











Basic EPS


573.4



582.3



579.2



579.7



561.1


Diluted EPS


582.6



591.1



585.6



587.6



566.5


Dividends paid per common share


$

0.30



$

0.30



$

0.05



$

0.95



$

0.20


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4:  Consolidated Balance Sheets(1)

 



December 31,


September 30,


December 31,

(Dollars in millions)(unaudited)


2013


2013


2012

Assets:







Cash and cash equivalents:







Cash and due from banks


$

2,821



$

2,855



$

3,440


Interest-bearing deposits with banks


3,131



2,481



7,617


Federal funds sold and securities purchased under agreements to resell


339



382



1


Total cash and cash equivalents


6,291



5,718



11,058


Restricted cash for securitization investors


874



390



428


Securities available for sale, at fair value


41,800



43,132



63,979


Securities held to maturity, at carrying value


19,132



18,276



9


Loans held for investment:







Unsecuritized loans held for investment


157,651



152,332



162,059


Restricted loans for securitization investors


39,548



39,482



43,830


Total loans held for investment


197,199



191,814



205,889


Less: Allowance for loan and lease losses


(4,315)



(4,333)



(5,156)


Net loans held for investment


192,884



187,481



200,733


Loans held for sale, at lower of cost or fair value


218



180



201


Premises and equipment, net


3,839



3,792



3,587


Interest receivable


1,418



1,304



1,694


Goodwill


13,978



13,906



13,904


Other


16,614



15,709



17,325


Total assets


$

297,048



$

289,888



$

312,918









Liabilities:







Interest payable


$

307



$

276



$

450


Customer deposits:







Non-interest bearing deposits


22,643



22,281



22,467


Interest-bearing deposits


181,880



184,553



190,018


Total customer deposits


204,523



206,834



212,485


Securitized debt obligations


10,289



9,544



11,398


Other debt:







Federal funds purchased and securities loaned or sold under agreements to repurchase


915



1,686



1,248


Senior and subordinated notes


13,134



12,395



12,686


Other borrowings


16,316



8,220



24,578


Total other debt


30,365



22,301



38,512


Other liabilities


9,820



9,183



9,574


Total liabilities


255,304



248,138



272,419









Stockholders' equity:







Preferred stock







Common stock


6



6



6


Additional paid-in capital, net


26,526



26,426



26,188


Retained earnings


20,404



19,731



16,853


Accumulated other comprehensive income ("AOCI")


(872)



(839)



739


Treasury stock, at cost


(4,320)



(3,574)



(3,287)


Total stockholders' equity


41,744



41,750



40,499


Total liabilities and stockholders' equity


$

297,048



$

289,888



$

312,918


 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 - 4)

(1)  Certain prior period amounts have been reclassified to conform to the current period presentation.

(2)  We recorded a provision for mortgage representation and warranty losses of $33 million in Q4 2013. We recorded a benefit for mortgage representation and warranty losses of $4 million in Q3 2013. We did not record a provision for mortgage representation and warranty losses in Q4 2012. The majority of the provision for representation and warranty losses is generally included net of tax in discontinued operations, with the remaining amount included pre-tax in non-interest income. The mortgage representation and warranty reserve was $1.2 billion as of both December 31, 2013 and September 30, 2013, and $899 million as of December 31, 2012.

(3)  Total net revenue was reduced by $185 million in Q4 2013, $154 million in Q3 2013 and $318 million in Q4 2012 for the estimated uncollectible amount of billed finance charges and fees.

(4)  Includes purchased credit card relationship ("PCCR") intangible amortization of $102 million in Q4 2013, $106 million in Q3 2013 and $127 million in Q4 2012, the substantial majority of which is attributable to the 2012 U.S. card acquisition. Includes core deposit intangible amortization of $38 million in Q4 2013, $40 million in Q3 2013 and $47 million in Q4 2012.

(5)  Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense.

(6)  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.

(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 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for additional information.

(8)  Loans held for investment includes acquired loans accounted for based on cash flows expected to be collected. We use the term "acquired loans" to refer to a limited portion of the credit card loans acquired in the 2012 U.S. card acquisition and the substantial majority of loans acquired in the ING Direct and Chevy Chase Bank acquisitions, which 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"). See "Table 12: Notes to Loan and Business Segment Disclosures (Tables 7 — 11)" for information on the amount of acquired loans for each of the periods presented.

(9)  Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.

(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 total assets for the period.

(12)  Calculated based on annualized income from continuing operations, net of tax, for the period divided average tangible assets for the period. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for additional information.

(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 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.

(14)  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. Our calculation of return on average tangible common equity may not be comparable to similarly titled measures reported by other companies. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for additional information.

(15)  Calculated based on annualized non-interest expense for the period divided by average loans held for investment for the period.

(16)  Calculated based on non-interest expense for the period divided by total net revenue for the period.

(17)  Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

(18)  Capital ratios are calculated under Basel I. Ratios as of the end of Q4 2013 are preliminary and therefore subject to change. TCE ratio is a non-GAAP measure. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for information on the calculation of each of these ratios.

(19)  A bargain purchase gain of $594 million was recognized in earnings in Q1 2012 attributable to the February 17, 2012 acquisition of ING Direct. The bargain purchase gain represents the excess of the fair value of the net assets acquired in the ING Direct acquisition as of the acquisition date over the consideration transferred.


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6:  Average Balances, Net Interest Income and Net Interest Margin(1)

 



2013 Q4




2013 Q3




2012 Q4





Average

Balance


Interest

Income/

Expense(2)


 

Yield/

Rate(2)



Average Balance


Interest

Income/

Expense(2)


Yield/

Rate(2)



Average

Balance


Interest

Income/

Expense(2)


Yield/

Rate(2)


(Dollars in millions)(unaudited)













Interest-earning assets:






















Loans, including loans held for sale


$

193,368



$

4,398



9.10


%


$

195,839



$

4,579



9.35


%


$

203,132



$

4,727



9.31


%

Investment securities(3)


62,919



414



2.63




63,317



396



2.50




64,174



361



2.25



Cash equivalents and other


6,670



27



1.62




5,640



23



1.63




10,580



27



1.02



Total interest-earning assets


$

262,957



$

4,839



7.36


%


$

264,796



$

4,998



7.55


%


$

277,886



$

5,115



7.36


%























Interest-bearing liabilities:






















Interest-bearing deposits

 


$

184,206



$

288



0.63


%


$

186,752



$

309



0.66


%


$

192,122



$

348



0.72


%

Securitized debt obligations


9,873



40



1.62




10,243



42



1.64




12,119



58



1.91



Senior and subordinated notes


12,765



75



2.35




12,314



76



2.47




11,528



85



2.95



Other borrowings


13,825



13



0.38




13,798



11



0.32




20,542



96



1.87



Total interest-bearing liabilities


$

220,669



$

416



0.75


%


$

223,107



$

438



0.79


%


$

236,311



$

587



0.99


%

Net interest income/spread




$

4,423



6.61


%




$

4,560



6.76


%




$

4,528



6.37


%

Impact of non-interest bearing funding






0.12








0.13








0.15



Net interest margin






6.73


%






6.89


%






6.52


%
































  

                    Year Ended December 31,












2013




2012












Average Balance


Interest Income/
Expense(2)


 Yield/
Rate(2)



Average Balance


Interest Income/
Expense(2)


 Yield/
Rate(2)


(Dollars in millions)(unaudited)
















Interest-earning assets:






















Loans, including loans held for sale









$

196,609



$

18,222



9.27


%


$

188,466



$

17,544



9.31


%

Investment securities(3)









63,522



1,575



2.48




57,424



1,329



2.31



Cash equivalents and other









6,292



101



1.61




9,189



91



0.99



Total interest-earning assets









$

266,423



$

19,898



7.47


%


$

255,079



$

18,964



7.43


%























Interest-bearing liabilities:






















Interest-bearing deposits









$

187,700



$

1,241



0.66


%


$

183,314



$

1,403



0.77


%

Securitized debt obligations









10,697



183



1.71




14,138



271



1.92



Senior and subordinated notes









12,440



315



2.53




11,012



345



3.13



Other borrowings









14,670



53



0.36




12,875



356



2.77



Total interest-bearing liabilities









$

225,507



$

1,792



0.79


%


$

221,339



$

2,375



1.07


%

Net interest income/spread











$

18,106



6.68


%




$

16,589



6.36


%

Impact of non-interest bearing funding













0.12








0.14



Net interest margin













6.80


%






6.50


%

___________ 

(1)  Certain prior period amounts have been reclassified to conform to the current period presentation.

(2)  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.

(3)  Prior to Q2 2013, average balances for investment securities were calculated based on fair value amounts. Effective Q2 2013, average balances are calculated based on the amortized cost of investment securities. The impact of this change on prior period yields is not material.


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics(1)(2)

 



2013


2013


2012


(Dollars in millions)(unaudited)


Q4


Q3


Q4


Period-end Loans Held For Investment








Credit card:








Domestic credit card


$

73,255



$

69,936



$

83,141



International credit card


8,050



8,031



8,614



Total credit card


81,305



77,967



91,755



Consumer banking:








Automobile


31,857



30,803



27,123



Home loan


35,282



36,817



44,100



Retail banking


3,623



3,665



3,904



Total consumer banking


70,762



71,285



75,127



Commercial banking:








Commercial and multifamily real estate


20,750



19,523



17,732



Commercial and industrial


23,309



21,848



19,892



Total commercial lending


44,059



41,371



37,624



Small-ticket commercial real estate


952



1,028



1,196



Total commercial banking


45,011



42,399



38,820



Other loans


121



163



187



Total


$

197,199



$

191,814



$

205,889



Average Loans Held For Investment








Credit card:








Domestic credit card


$

70,368



$

69,947



$

80,718



International credit card


7,899



7,782



8,372



Total credit card


78,267



77,729



89,090



Consumer banking:








Automobile


31,424



30,157



26,881



Home loan


35,974



37,852



45,250



Retail banking


3,635



3,655



3,967



Total consumer banking


71,033



71,664



76,098



Commercial banking:








Commercial and multifamily real estate


19,928



19,047



17,005



Commercial and industrial


22,445



21,491



19,344



Total commercial lending


42,373



40,538



36,349



Small-ticket commercial real estate


986



1,038



1,249



Total commercial banking


43,359



41,576



37,598



Other loans


154



166



158



Total


$

192,813



$

191,135



$

202,944



Net Charge-off Rates








Credit card:








Domestic credit card


3.89


%

3.67


%

4.35


%

International credit card


4.74



4.71



3.99



Total credit card


3.98



3.78



4.32



Consumer banking:








Automobile


2.30



2.01



2.24



Home loan


0.03



0.06



(0.06)



Retail banking


1.09



1.38



2.45



Total consumer banking


1.09



0.95



0.88



Commercial banking:








Commercial and multifamily real estate


(0.11)



(0.11)



(0.08)



Commercial and industrial


0.04



0.18



0.13



Total commercial lending


(0.03)



0.04



0.03



Small-ticket commercial real estate


(0.81)



1.26



2.02



Total commercial banking


(0.05)



0.07



0.10



Other loans


4.68



12.17



24.23



Total


2.01


%

1.92


%

2.26


%

30+ Day Performing Delinquency Rates








Credit card:








Domestic credit card


3.43


%

3.46


%

3.61


%

International credit card


3.71



3.86



3.58



Total credit card


3.46


%

3.51


%

3.61


%









Consumer banking:








Automobile


6.85


%

6.29


%

7.00


%

Home loan


0.16



0.14



0.13



Retail banking


0.69



0.68



0.76



Total consumer banking


3.20


%

2.82


%

2.65


%

Nonperforming Asset Rates(3)








Credit card:








International credit card


1.10


%

1.16


%

1.16


%

Total credit card


0.11


%

0.12


%

0.11


%

Consumer banking:








Automobile(10)


1.11


%

0.92


%

0.95


%

Home loan


1.14



1.08



1.00



Retail banking


1.13



1.10



1.85



Total consumer banking


1.12


%

1.01


%

1.02


%

Commercial banking:








Commercial and multifamily real estate


0.29


%

0.40


%

0.82


%

Commercial and industrial


0.44



0.65



0.72



Total commercial lending


0.37


%

0.53


%

0.77


%

Small-ticket commercial real estate


0.43



1.49



0.97



Total commercial banking


0.37


%

0.56


%

0.77


%
















 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial & Statistical Summary—Credit Card Business(1)(2)

 




2013


2013


2012


(Dollars in millions) (unaudited)


Q4


Q3


Q4


Credit Card








Earnings:








Net interest income


$

2,576



$

2,757



$

2,849



Non-interest income


833



834



883



Total net revenue


3,409



3,591



3,732



Provision for credit losses


751



617



1,000



Non-interest expense


1,868



1,904



1,933



Income from continuing operations before taxes


790



1,070



799



Income tax provision


274



376



279



Income from continuing operations, net of tax


$

516



$

694



$

520



Selected performance metrics:








Period-end loans held for investment


$

81,305



$

77,967



$

91,755



Average loans held for investment


78,267



77,729



89,090



Average yield on loans held for investment(4)


14.64


%

15.72


%

14.33


%

Total net revenue margin(5)


17.43



18.48



16.76



Net charge-off rate


3.98



3.78



4.32



30+ day performing delinquency rate


3.46



3.51



3.61



30+ day delinquency rate


3.54



3.60


%

3.69



Nonperforming loan rate(3)


0.11



0.12



0.11



Card loan premium amortization and other intangible accretion(6)


$

39



$

45



$

65



PCCR intangible amortization


102



106



127



Purchase volume(7)


54,245



50,943



52,853



Domestic Card








Earnings:








Net interest income


$

2,303



$

2,492



$

2,583



Non-interest income


747



749



798



Total net revenue


3,050



3,241



3,381



Provision for credit losses


679



529



911



Non-interest expense


1,664



1,713



1,727



Income from continuing operations before taxes


707



999



743



Income tax provision


252



355



263



Income from continuing operations, net of tax


$

455



$

644



$

480



Selected performance metrics:








Period-end loans held for investment


$

73,255



$

69,936



$

83,141



Average loans held for investment


70,368



69,947



80,718



Average yield on loans held for investment(4)


14.44


%

15.65


%

14.20


%

Total net revenue margin(5)


17.34



18.53



16.75



Net charge-off rate


3.89



3.67



4.35



30+ day performing delinquency rate


3.43



3.46



3.61



30+ day delinquency rate


3.43



3.46


%

3.61



Purchase volume(7)


$

50,377



$

47,420



$

48,918



International Card








Earnings:








Net interest income


$

273



$

265



$

266



Non-interest income


86



85



85



Total net revenue


359



350



351



Provision for credit losses


72



88



89



Non-interest expense


204



191



206



Income from continuing operations before taxes


83



71



56



Income tax provision


22



21



16



Income from continuing operations, net of tax


$

61



$

50



$

40



Selected performance metrics:








Period-end loans held for investment


$

8,050



$

8,031



$

8,614



Average loans held for investment


7,899



7,782



8,372



Average yield on loans held for investment


16.48


%

16.35


%

15.59


%

Total net revenue margin


18.20



17.99



16.77



Net charge-off rate


4.74



4.71



3.99



30+ day performing delinquency rate


3.71



3.86



3.58



30+ day delinquency rate


4.56



4.78



4.49



Nonperforming loan rate(3)


1.10



1.16



1.16



Purchase volume(7)


$

3,868



$

3,523



$

3,935



 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary—Consumer Banking Business(1)(2)

 



2013


2013


2012


(Dollars in millions) (unaudited)


Q4


Q3


Q4


Consumer Banking








Earnings:








Net interest income


$

1,468



$

1,481



$

1,503



Non-interest income


195



184



161



Total net revenue


1,663



1,665



1,664



Provision for credit losses


212



202



169



Non-interest expense


1,018



927



992



Income from continuing operations before taxes


433



536



503



Income tax provision


154



191



178



Income from continuing operations, net of tax


$

279



$

345



$

325











Selected performance metrics:








Period-end loans held for investment


$

70,762



$

71,285



$

75,127



Average loans held for investment


71,033



71,664



76,098



Average yield on loans held for investment


6.30


%

6.21


%

5.94


%

Auto loan originations


$

4,322



$

4,752



$

3,479



Period-end deposits


167,652



168,437



172,396



Average deposits


167,870



169,082



172,654



Deposit interest expense rate


0.60


%

0.63


%

0.68


%

Core deposit intangible amortization


$

32



$

34



$

39



Net charge-off rate


1.09


%

0.95


%

0.88


%

30+ day performing delinquency rate


3.20



2.82



2.65



30+ day delinquency rate


3.89



3.46



3.34



Nonperforming loan rate(3)


0.86



0.79



0.85



Nonperforming asset rate(3)(10)


1.12



1.01



1.02



Period-end loans serviced for others


$

7,665



$

14,043



$

15,333



 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10:  Financial & Statistical Summary—Commercial Banking Business(1)(2)



2013


2013


2012


(Dollars in millions) (unaudited)


Q4


Q3


Q4


Commercial Banking








Earnings:








Net interest income


$

504



$

480



$

450



Non-interest income


131



87



86



Total net revenue(8)


635



567



536



Provision for credit losses


(6)



31



(20)



Non-interest expense


326



266



294



Income from continuing operations before taxes


315



270



262



Income tax provision


113



96



93



Income from continuing operations, net of tax


$

202



$

174



$

169











Selected performance metrics:








Period-end loans held for investment


$

45,011



$

42,399



$

38,820



Average loans held for investment


43,359



41,576



37,598



Average yield on loans held for investment(8)


3.92


%

3.87


%

4.15


%

Period-end deposits


$

30,567



$

30,592



$

29,866



Average deposits


31,033



30,685



29,476



Deposit interest expense rate


0.25


%

0.27


%

0.28


%

Core deposit intangible amortization


$

6



$

6



$

8



Net charge-off rate


(0.05)


%

0.07


%

0.10


%

Nonperforming loan rate(3)


0.33



0.47



0.73



Nonperforming asset rate(3)


0.37



0.56



0.77











Risk category:(9)








Noncriticized


$

43,593



$

40,940



$

36,839



Criticized performing


1,007



968



1,340



Criticized nonperforming


149



201



282



Total risk-rated loans


44,749



42,109



38,461



Acquired commercial loans


262



290



359



Total commercial loans


$

45,011



$

42,399



$

38,820











% of period-end commercial loans held for investment:








Noncriticized


96.9


%

96.5


%

94.9


%

Criticized performing


2.2



2.3



3.5



Criticized nonperforming


0.3



0.5



0.7



Total risk-rated loans


99.4



99.3



99.1



Acquired commercial loans


0.6



0.7



0.9



Total commercial loans


100.0


%

100.0


%

100.0


%

 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Other and Total(1)(2)

 



2013


2013


2012


(Dollars in millions) (unaudited)


Q4


Q3


Q4


Other








Earnings:








Net interest expense


$

(125)



$

(158)



$

(274)



Non-interest income


(38)



(14)



(34)



Total net revenue


(163)



(172)



(308)



Provision for credit losses




(1)



2



Non-interest expense


68



50



36



Loss from continuing operations before taxes


(231)



(221)



(346)



Income tax benefit


(116)



(138)



(180)



Loss from continuing operations, net of tax


$

(115)



$

(83)



$

(166)











Selected performance metrics:








Period-end loans held for investment


$

121



$

163



$

187



Average loans held for investment


154



166



158



Period-end deposits


6,304



7,805



10,223



Average deposits


6,803



8,573



11,364



Total








Earnings:








Net interest income


$

4,423



$

4,560



$

4,528



Non-interest income


1,121



1,091



1,096



Total net revenue


5,544



5,651



5,624



Provision for credit losses


957



849



1,151



Non-interest expense


3,280



3,147



3,255



Income from continuing operations before taxes


1,307



1,655



1,218



Income tax provision


425



525



370



Income from continuing operations, net of tax


$

882



$

1,130



$

848











Selected performance metrics:








Period-end loans held for investment


$

197,199



$

191,814



$

205,889



Average loans held for investment


192,813



191,135



202,944



Period-end deposits


204,523



206,834



212,485



Average deposits


205,706



208,340



213,494



 


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12:  Notes to Loan and Business Segment Disclosures (Tables 7 - 11)

(1)  Certain prior period amounts have been reclassified to conform to the current period presentation.

(2)  Loans acquired as part of the ING Direct, Chevy Chase Bank and 2012 U.S. card acquisitions are included in the denominator used in calculating our reported credit quality metrics. We therefore present certain reported credit quality metrics, adjusted to exclude from the denominator acquired loans accounted for based on estimated cash flows expected to be collected over the life of the loans (formerly "SOP 03-3").  The table below presents amounts related to acquired loans accounted for under SOP 03-3.

 



2013


2013


2012

(Dollars in millions) (unaudited)


Q4


Q3


Q4

Acquired loans accounted for under SOP 03-3:







Period-end unpaid principal balance


$

29,761



$

31,377



$

38,477


Period-end loans held for investment


28,550



30,080



37,134


Average loans held for investment


29,055



30,713



37,899


 

(3)  Nonperforming assets consist of nonperforming loans, real estate owned ("REO") and other foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each category divided by the combined period-end total of loans held for investment, REO and other foreclosed assets for each respective category. The nonperforming loan ratios are calculated based on nonperforming loans for each category divided by period-end loans held for investment for each respective category.

(4)  The transfer of the Best Buy Stores, L.P. ("Best Buy") portfolio to held for sale resulted in an increase in the average yield for Domestic Card and Total Credit Card of 121 basis points and 110 basis points, respectively, in Q3 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.

(5)  The transfer of the Best Buy portfolio to held for sale resulted in an increase in the net revenue margin for Domestic Card and Total Credit Card of 136 basis points and 123 basis points, respectively, in Q3 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.

(6)  Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the 2012 U.S. card acquisition.

(7)  Includes credit card purchase transactions, net of returns for both loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.

(8)  Because some of our tax-related commercial investments generate tax-exempt income or tax credits, 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%.

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

(10) As reported in the third quarter 2013 Form 10-Q, we have begun including the net realizable value of auto loans that have been charged down as a result of a bankruptcy filing in addition to repossessed assets obtained in satisfaction of auto loans. Prior period amounts have been adjusted to conform to current period presentation.


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I

In addition to disclosing regulatory capital measures under Basel I, we also report certain non-GAAP measures that management uses in assessing its capital adequacy. These non-GAAP measures include average tangible assets, average tangible common equity, tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our Basel I regulatory capital and non-GAAP measures. 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.

 



2013


2013


2012


(Dollars in millions)(unaudited)


Q4


Q3


Q4


Average Equity to Non-GAAP Average Tangible Common Equity








Average total stockholders' equity


$

42,463



$

41,284



$

40,212



Adjustments:  Average goodwill and other intangible assets (1)


(16,564)



(15,829)



(16,340)



Noncumulative perpetual preferred stock(2)


(853)



(853)



(853)



Average tangible common equity(3)


$

25,046



$

24,602



$

23,019



Stockholders' Equity to Non-GAAP Tangible Common Equity








Total stockholders' equity


$

41,744



$

41,750



$

40,499



Adjustments:  Goodwill and other intangible assets (1)


(16,568)



(15,760)



(16,224)



Noncumulative perpetual preferred stock(2)


(853)



(853)



(853)



Tangible common equity(3)


$

24,323



$

25,137



$

23,422



Total Assets to Tangible Assets








Total assets


$

297,048



$

289,888



$

312,918



Adjustments:  Goodwill and other intangible assets(1)


(16,568)



(15,760)



(16,224)



Tangible assets


$

280,480



$

274,128



$

296,694



Total Average Assets to Average Tangible Assets








Average total assets


$

294,108



$

294,939



$

308,096



Adjustments:  Average goodwill and other intangible assets (1)


(16,564)



(15,829)



(16,340)



Average tangible assets


$

277,544



$

279,110



$

291,756



Non-GAAP TCE Ratio








TCE ratio(3)


8.7


%

9.2


%

7.9


%

Regulatory Capital Ratios(4)








Total stockholders' equity


$

41,744



$

41,750



$

40,499



Adjustments:  Net unrealized (gains) losses on AFS securities recorded in AOCI(5)


791



736



(712)



Net losses on cash flow hedges recorded in AOCI(5)


136



123



2



Disallowed goodwill and other intangible assets


(14,326)



(14,263)



(14,428)



Disallowed deferred tax assets








Noncumulative perpetual preferred stock(2)


(853)



(853)



(853)



Other


(5)



(5)



(12)



Tier 1 common capital


27,847



27,488



24,496



Adjustments:  Noncumulative perpetual preferred stock(2)


853



853



853



Tier 1 restricted core capital items(6)


2



2



2



Tier 1 capital


28,342



28,343



25,351



Adjustments:  Long-term debt qualifying as Tier 2 capital


1,914



1,909



2,119



Qualifying allowance for loan and lease losses


2,841



2,726



2,830



Other Tier 2 components


10



8



13



Tier 2 capital


4,765



4,643



4,962



Total risk-based capital(7)


$

33,107



$

32,986



$

30,313











Risk-weighted assets(8)


$

225,199



$

215,829



$

223,472



Tier 1 common ratio(9)


12.2


%

12.7


%

11.0


%

Tier 1 risk-based capital ratio(10)


12.6



13.1



11.3



Total risk-based capital ratio(11)


14.7



15.3



13.6



___________ 

(1)  Includes impact from related deferred taxes.

(2)  Noncumulative perpetual preferred stock qualifies for Tier 1 capital; however, it is excluded from Tier 1 common capital.

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

(4)  Regulatory capital ratios as of the end of Q4 2013 are preliminary and therefore subject to change.

(5)  Amounts presented are net of tax.

(6)  Consists primarily of trust preferred securities.

(7)  Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.

(8)  Calculated based on prescribed regulatory guidelines.

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

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

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

 

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

 

SOURCE Capital One Financial Corporation



RELATED LINKS
http://www.capitalone.com/

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