Capital One Reports Fourth Quarter 2015 Net Income of $920 million, or $1.58 per share

26 Jan, 2016, 16:05 ET from Capital One Financial Corporation

MCLEAN, Va., Jan. 26, 2016 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2015 of $920 million, or $1.58 per diluted common share, compared to the third quarter of 2015 with net income of $1.1 billion, or $1.98 per diluted common share, and the fourth quarter of 2014 with net income of $999 million, or $1.73 per diluted common share.

Net income, excluding adjustments(1) for the fourth quarter of 2015 was $966 million or $1.67 per diluted common share. Adjustments are comprised of charges totaling $72 million associated with (i) closing the GE Healthcare acquisition and establishing an initial allowance and reserve related to the loans acquired; (ii) certain planned site closures; and (iii) revisions to the restructuring charges recorded in Q2 2015 to reflect updated information.

"The headline for 2015 was industry-leading growth in Domestic Card loans and purchase volumes," said Richard D. Fairbank, Chairman and Chief Executive Officer.  "Our 2015 results and the choices that drove them have put us in a strong position to deliver attractive shareholder returns, driven by growth and sustainable returns at the higher end of banks, as well as significant capital distribution, subject to regulatory approval."

All comparisons below are for the full year of 2015 compared to the full year of 2014 unless otherwise noted.

2015 Full Year Income Statement Summary:

  • Total net revenue increased 5 percent to $23.4 billion, including ($86) million of contra-revenue from a build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve").
  • Total non-interest expense increased 7 percent to $13.0 billion:
    • 12 percent increase in marketing.
    • 7 percent increase in operating expenses, including $150 million in restructuring and related site closure charges, $61 million build in the U.K. PPI Reserve, and $20 million of charges associated with closing the GE Healthcare acquisition.
  • Pre-provision earnings increased 3 percent to $10.4 billion
  • Provision for credit losses increased 28 percent to $4.5 billion.
  • Efficiency ratio of 55.51 percent; Efficiency ratio excluding restructuring and site closure charges, the build in the U.K. PPI Reserve and charges associated with the closing of the GE Healthcare acquisition was 54.32 percent.

All comparisons below are for the fourth quarter of 2015 compared to the third quarter of 2015 unless otherwise noted.

Fourth Quarter 2015 Income Statement Summary:

  • Total net revenue increased 5 percent to $6.2 billion.
  • Total non-interest expense increased 10 percent to $3.5 billion:
    • 35 percent increase in marketing.
    • 7 percent increase in operating expenses.
  • Pre-provision earnings decreased 1 percent to $2.7 billion
  • Provision for credit losses increased 26 percent to $1.4 billion.
  • Net interest margin of 6.79 percent, up 6 basis points.

All comparisons below are as of December 31, 2015 as compared to December 31, 2014 unless otherwise noted.

Fourth Quarter 2015 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 11.1 percent at December 31, 2015.
  • Period-end loans held for investment in the quarter increased $16.5 billion, or 8 percent, to $229.9 billion.
    • Domestic Card period-end loans increased $5.8 billion, or 7 percent, to $87.9 billion.
    • Consumer Banking period-end loans decreased $618 million, or less than 1 percent, to $70.4 billion:
      • Auto period-end loans increased $497 million, or 1 percent, to $41.5 billion.
      • Home loans period-end loans decreased $1.1 billion, or 4 percent, to $25.2 billion, driven by run-off of acquired portfolios.
    • Commercial Banking period-end loans increased $11.2 billion, or 21 percent, to $63.3 billion, including the acquired GE Healthcare loans.
  • Average loans held for investment in the quarter increased $8.8 billion, or 4 percent, to $220.1 billion.
    • Domestic Card average loans increased $3.4 billion, or 4 percent, to $83.8 billion.
    • Consumer Banking average loans decreased $393 million, or less than 1 percent, to $70.7 billion:
      • Auto average loans increased $773 million, or 2 percent, to $41.3 billion
      • Home loans average loans decreased by $1.2 billion, or 4 percent, to $25.8 billion, driven by run-off of acquired portfolios.
    • Commercial Banking average loans increased $5.8 billion, or 11 percent, to $57.4 billion, including the acquired GE Healthcare loans.
  • Period-end total deposits increased $4.8 billion, or 2 percent, to $217.7 billion, while average deposits increased $4.9 billion, or 2 percent to $215.9 billion.
  • Interest-bearing deposit rate remained flat at 0.58 percent.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 26, 2016 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us," then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through February 9, 2016 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, 2014.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $217.7 billion in deposits and $334.0 billion in total assets as of December 31, 2015. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

   (1) Net income excluding adjustments is a non-GAAP measure, which we believe is helpful for investors to understand the effect of the excluded items on our reported results. See Table 5 in Exhibit 99.2 for a reconciliation to the reported results on a GAAP basis.

 

 

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement

Fourth Quarter 2015(1) 

Table of Contents

Capital One Financial Corporation Consolidated Results

Page

Table 1:

Financial Summary—Consolidated

1

Table 2:

Selected Metrics—Consolidated

3

Table 3:

Consolidated Statements of Income

4

Table 4:

Consolidated Balance Sheets

6

Table 5:

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

8

Table 6:

Average Balances, Net Interest Income and Net Interest Margin

10

Table 7:

Loan Information and Performance Statistics

11

Business Segment Results

Table 8:

Financial Summary—Business Segment Results

13

Table 9:

Financial & Statistical Summary—Credit Card Business

14

Table 10:

Financial & Statistical Summary—Consumer Banking Business

16

Table 11:

Financial & Statistical Summary—Commercial Banking Business

17

Table 12:

Financial & Statistical Summary—Other and Total

18

Table 13:

Notes to Loan and Business Segments Disclosures (Tables 7—12)

19

Other

Table 14:

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

20

__________

(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Annual Report on Form 10-K for the period ended December 31, 2015 once it is filed with the Securities and Exchange Commission.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated(1) 

2015 Q4 vs.

Year Ended

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

2015

2015

2015

2015

2014

2015

2014

2015 vs.

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2015

2014

2014

Income Statement

Net interest income

$

4,961

$

4,760

$

4,537

$

4,576

$

4,656

4%

7%

$

18,834

$

17,818

6%

Non-interest income

1,233

1,140

1,135

1,071

1,157

8

7

4,579

4,472

2

Total net revenue(2)

6,194

5,900

5,672

5,647

5,813

5

7

23,413

22,290

5

Provision for credit losses

1,380

1,092

1,129

935

1,109

26

24

4,536

3,541

28

Non-interest expense:

Marketing

564

418

387

375

509

35

11

1,744

1,561

12

Amortization of intangibles

103

106

111

110

123

(3)

(16)

430

532

(19)

Operating expenses

2,813

2,636

2,809

2,564

2,652

7

6

10,822

10,087

7

Total non-interest expense

3,480

3,160

3,307

3,049

3,284

10

6

12,996

12,180

7

Income from continuing operations before income taxes

1,334

1,648

1,236

1,663

1,420

(19)

(6)

5,881

6,569

(10)

Income tax provision

426

530

384

529

450

(20)

(5)

1,869

2,146

(13)

Income from continuing operations, net of tax

908

1,118

852

1,134

970

(19)

(6)

4,012

4,423

(9)

Income (loss) from discontinued operations, net of tax(3)

12

(4)

11

19

29

**

(59)

38

5

**

Net income

920

1,114

863

1,153

999

(17)

(8)

4,050

4,428

(9)

Dividends and undistributed earnings allocated to participating securities(4)

(4)

(6)

(4)

(6)

(4)

(33)

(20)

(18)

11

Preferred stock dividends(4)

(68)

(29)

(29)

(32)

(21)

134

224

(158)

(67)

136

Net income available to common stockholders

$

848

$

1,079

$

830

$

1,115

$

974

(21)

(13)

$

3,872

$

4,343

(11)

Common Share Statistics

Basic earnings per common share:(4)

Net income from continuing operations

$

1.58

$

2.01

$

1.50

$

2.00

$

1.71

(21)%

(8)%

$

7.08

$

7.70

(8)%

Income (loss) from discontinued operations

0.02

(0.01)

0.02

0.03

0.05

**

(60)

0.07

0.01

**

Net income per basic common share

$

1.60

$

2.00

$

1.52

$

2.03

$

1.76

(20)

(9)

$

7.15

$

7.71

(7)

Diluted earnings per common share:(4)

Net income from continuing operations

$

1.56

$

1.99

$

1.48

$

1.97

$

1.68

(22)

(7)

$

7.00

$

7.58

(8)

Income (loss) from discontinued operations

0.02

(0.01)

0.02

0.03

0.05

**

(60)

0.07

0.01

**

Net income per diluted common share(5)

$

1.58

$

1.98

$

1.50

$

2.00

$

1.73

(20)

(9)

$

7.07

$

7.59

(7)

Weighted-average common shares outstanding (in millions):

Basic

530.8

540.6

545.6

550.2

554.3

(2)

(4)

541.8

563.1

(4)

Diluted

536.3

546.3

552.0

557.2

561.8

(2)

(5)

548.0

571.9

(4)

Common shares outstanding (period end, in millions)

527.3

534.9

542.5

548.0

553.4

(1)

(5)

527.3

553.4

(5)

Dividends paid per common share

$

0.40

$

0.40

$

0.40

$

0.30

$

0.30

33

$

1.50

$

1.20

25

Tangible book value per common share (period end)(6)

53.65

54.66

52.74

52.19

50.32

(2)

7

53.65

50.32

7

2015 Q4 vs.

Year Ended

(Dollars in millions) (unaudited)

2015

2015

2015

2015

2014

2015

2014

2015 vs.

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2015

2014

2014

Balance Sheet (Period End)

Loans held for investment(7)

$

229,851

$

213,329

$

209,705

$

203,978

$

208,316

8%

10%

$

229,851

$

208,316

10%

Interest-earning assets

302,007

283,073

280,137

275,837

277,849

7

9

302,007

277,849

9

Total assets

334,048

313,700

310,510

306,224

308,167

6

8

334,048

308,167

8

Interest-bearing deposits

191,874

187,848

183,657

185,208

180,467

2

6

191,874

180,467

6

Total deposits

217,721

212,903

208,780

210,440

205,548

2

6

217,721

205,548

6

Borrowings

59,115

42,778

45,766

41,029

48,457

38

22

59,115

48,457

22

Common equity

43,990

44,391

43,849

43,908

43,231

(1)

2

43,990

43,231

2

Total stockholders' equity

47,284

47,685

46,659

45,730

45,053

(1)

5

47,284

45,053

5

Balance Sheet (Average Balances)

Loans held for investment(7)

$

220,052

$

211,227

$

206,337

$

205,194

$

203,436

4%

8%

$

210,745

$

197,925

6%

Interest-earning assets

292,054

283,082

276,585

278,427

273,436

3

7

282,581

267,174

6

Total assets

323,354

313,822

307,206

309,401

304,153

3

6

313,474

297,659

5

Interest-bearing deposits

189,885

185,800

183,946

182,998

179,401

2

6

185,677

181,036

3

Total deposits

215,899

210,974

209,143

207,851

205,355

2

5

210,989

205,675

3

Borrowings

48,850

45,070

41,650

46,082

43,479

8

12

45,420

38,882

17

Common equity

45,418

45,407

44,878

44,575

43,895

3

45,072

43,055

5

Total stockholders' equity

48,712

48,456

47,255

46,397

45,576

1

7

47,713

44,268

8

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated(1)

2015 Q4 vs.

Year Ended

(Dollars in millions except as noted) (unaudited)

2015

2015

2015

2015

2014

2015

2014

2015 vs.

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2015

2014

2014

Performance Metrics

Net interest income growth (period over period)

4%

5%

(1)%

(2)%

4%

**

**

6%

(2)%

**

Non-interest income growth (period over period)

8

6

(7)

1

**

**

2

5

**

Total net revenue growth (period over period)

5

4

(3)

3

**

**

5

**

Total net revenue margin(8)

8.48

8.34

8.20

8.11

8.50

14

bps

(2)

bps

8.29

8.34

(5)

bps

Net interest margin(9)

6.79

6.73

6.56

6.57

6.81

6

(2)

6.66

6.67

(1)

Return on average assets

1.12

1.43

1.11

1.47

1.28

(31)

(16)

1.28

1.49

(21)

Return on average tangible assets(10)

1.18

1.50

1.17

1.54

1.34

(32)

(16)

1.35

1.57

(22)

Return on average common equity(11)

7.36

9.54

7.30

9.84

8.61

(218)

(125)

8.51

10.08

(157)

Return on average tangible common equity(12)

11.11

14.33

11.06

15.00

13.28

(322)

(217)

12.87

15.79

(292)

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

6.33

5.98

6.41

5.94

6.46

35

(13)

6.17

6.15

2

Efficiency ratio(13)

56.18

53.56

58.30

53.99

56.49

262

(31)

55.51

54.64

87

Effective income tax rate for continuing operations

31.9

32.2

31.1

31.8

31.7

(30)

20

31.8

32.7

(90)

Employees (in thousands), period end

45.4

46.9

47.5

47.0

46.0

(3)%

(1)%

45.4

46.0

(1)%

Credit Quality Metrics(7)

Allowance for loan and lease losses

$

5,130

$

4,847

$

4,676

$

4,405

$

4,383

6%

17%

$

5,130

$

4,383

17%

Allowance as a percentage of loans held for investment

2.23%

2.27%

2.23%

2.16%

2.10%

(4)

bps

13

bps

2.23%

2.10%

13

bps

Net charge-offs

$

1,078

$

890

$

846

$

881

$

915

21%

18%

$

3,695

$

3,414

8%

Net charge-off rate(14)

1.96%

1.69%

1.64%

1.72%

1.80%

27

bps

16

bps

1.75%

1.72%

3

bps

30+ day performing delinquency rate

2.69

2.63

2.33

2.32

2.62

6

7

2.69

2.62

7

30+ day delinquency rate

3.00

2.95

2.65

2.58

2.91

5

9

3.00

2.91

9

Capital Ratios(15)

Common equity Tier 1 capital ratio 

11.1%

12.1%

12.1%

12.5%

12.5%

(100)

bps

(140)

bps

11.1%

12.5%

(140)

bps

Tier 1 capital ratio

12.3

13.4

13.3

13.2

13.2

(110)

(90)

12.3

13.2

(90)

Total capital ratio

14.6

15.1

15.1

15.1

15.1

(50)

(50)

14.6

15.1

(50)

Tier 1 leverage ratio

10.6

11.1

11.1

10.7

10.8

(50)

(20)

10.6

10.8

(20)

Tangible common equity ("TCE") ratio(16)

8.9

9.8

9.7

9.8

9.5

(90)

(60)

8.9

9.5

(60)

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income

Three Months Ended

2015 Q4 vs.

Year Ended

2015

2015

2014

2015

2014

2015 vs.

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

Q4

Q3

Q4

Q3

Q4

2015

2014

2014

Interest income:

Loans, including loans held for sale

$

4,961

$

4,753

$

4,613

4%

8%

$

18,785

$

17,662

6%

Investment securities

401

386

405

4

(1)

1,575

1,628

(3)

Other

22

25

27

(12)

(19)

99

107

(7)

Total interest income

5,384

5,164

5,045

4

7

20,459

19,397

5

Interest expense:

Deposits

277

271

269

2

3

1,091

1,088

Securitized debt obligations

43

39

36

10

19

151

145

4

Senior and subordinated notes

89

82

73

9

22

330

299

10

Other borrowings

14

12

11

17

27

53

47

13

Total interest expense

423

404

389

5

9

1,625

1,579

3

Net interest income

4,961

4,760

4,656

4

7

18,834

17,818

6

Provision for credit losses

1,380

1,092

1,109

26

24

4,536

3,541

28

Net interest income after provision for credit losses

3,581

3,668

3,547

(2)

1

14,298

14,277

Non-interest income:

Service charges and other customer-related fees

426

423

462

1

(8)

1,715

1,867

(8)

Interchange fees, net

617

555

523

11

18

2,235

2,021

11

Net other-than-temporary impairment recognized in earnings

(3)

(5)

(9)

(40)

(67)

(30)

(24)

25

Other

193

167

181

16

7

659

608

8

Total non-interest income

1,233

1,140

1,157

8

7

4,579

4,472

2

Non-interest expense:

Salaries and associate benefits

1,215

1,189

1,179

2

3

4,975

4,593

8

Occupancy and equipment

511

444

474

15

8

1,829

1,745

5

Marketing

564

418

509

35

11

1,744

1,561

12

Professional services

349

313

329

12

6

1,292

1,216

6

Communications and data processing

247

226

203

9

22

883

798

11

Amortization of intangibles

103

106

123

(3)

(16)

430

532

(19)

Other

491

464

467

6

5

1,843

1,735

6

Total non-interest expense

3,480

3,160

3,284

10

6

12,996

12,180

7

Income from continuing operations before income taxes

1,334

1,648

1,420

(19)

(6)

5,881

6,569

(10)

Income tax provision

426

530

450

(20)

(5)

1,869

2,146

(13)

Income from continuing operations, net of tax

908

1,118

970

(19)

(6)

4,012

4,423

(9)

Income (loss) from discontinued operations, net of tax(3)

12

(4)

29

**

(59)

38

5

**

Net income

920

1,114

999

(17)

(8)

4,050

4,428

(9)

Dividends and undistributed earnings allocated to participating securities(4)

(4)

(6)

(4)

(33)

(20)

(18)

11

Preferred stock dividends(4)

(68)

(29)

(21)

134

224

(158)

(67)

136

Net income available to common stockholders

$

848

$

1,079

$

974

(21)

(13)

$

3,872

$

4,343

(11)

Three Months Ended

2015 Q4 vs.

Year Ended

2015

2015

2014

2015

2014

2015 vs.

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

Q4

Q3

Q4

Q3

Q4

2015

2014

2014

Basic earnings per common share:(4)

Net income from continuing operations

$

1.58

$

2.01

$

1.71

(21)%

(8)%

$

7.08

$

7.70

(8)%

Income (loss) from discontinued operations

0.02

(0.01)

0.05

**

(60)

0.07

0.01

**

Net income per basic common share

$

1.60

$

2.00

$

1.76

(20)

(9)

$

7.15

$

7.71

(7)

Diluted earnings per common share:(4)

Net income from continuing operations

$

1.56

$

1.99

$

1.68

(22)

(7)

$

7.00

$

7.58

(8)

Income (loss) from discontinued operations

0.02

(0.01)

0.05

**

(60)

0.07

0.01

**

Net income per diluted common share(5)

$

1.58

$

1.98

$

1.73

(20)

(9)

$

7.07

$

7.59

(7)

Weighted average common shares outstanding (in millions):

Basic common shares

530.8

540.6

554.3

(2)

(4)

541.8

563.1

(4)

Diluted common shares

536.3

546.3

561.8

(2)

(5)

548.0

571.9

(4)

Dividends paid per common share

$

0.40

$

0.40

$

0.30

33

$

1.50

$

1.20

25

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets(1) 

December 31, 2015 vs.

(Dollars in millions) (unaudited)

December 31, 2015

September 30, 2015

December 31, 2014

September 30, 2015

December 31, 2014

Assets:

Cash and cash equivalents:

Cash and due from banks

$

3,407

$

2,701

$

3,147

26%

8%

Interest-bearing deposits with banks

4,577

3,952

4,095

16

12

Federal funds sold and securities purchased under agreements to resell

39

184

0

(79)

**

Total cash and cash equivalents

8,023

6,837

7,242

17

11

Restricted cash for securitization investors

1,017

586

234

74

**

Securities available for sale, at fair value

39,061

39,431

39,508

(1)

(1)

Securities held to maturity, at carrying value

24,619

23,711

22,500

4

9

Loans held for investment:(7)

Unsecuritized loans held for investment

196,068

179,748

171,771

9

14

Restricted loans for securitization investors

33,783

33,581

36,545

1

(8)

Total loans held for investment

229,851

213,329

208,316

8

10

Allowance for loan and lease losses

(5,130)

(4,847)

(4,383)

6

17

Net loans held for investment

224,721

208,482

203,933

8

10

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

904

566

626

60

44

Premises and equipment, net

3,584

3,629

3,685

(1)

(3)

Interest receivable

1,189

1,101

1,079

8

10

Goodwill

14,480

13,983

13,978

4

4

Other assets

16,450

15,374

15,382

7

7

Total assets

$

334,048

$

313,700

$

308,167

6

8

December 31, 2015 vs.

(Dollars in millions) (unaudited)

December 31, 2015

September 30, 2015

December 31, 2014

September 30, 2015

December 31, 2014

Liabilities:

Interest payable

$

299

$

198

$

254

51%

18%

Deposits:

Non-interest bearing deposits

25,847

25,055

25,081

3

3

Interest-bearing deposits

191,874

187,848

180,467

2

6

Total deposits

217,721

212,903

205,548

2

6

Securitized debt obligations

16,166

15,656

11,624

3

39

Other debt:

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

981

1,021

880

(4)

11

Senior and subordinated notes

21,837

21,773

18,684

17

Other borrowings

20,131

4,328

17,269

**

17

Total other debt

42,949

27,122

36,833

58

17

Other liabilities

9,629

10,136

8,855

(5)

9

Total liabilities

286,764

266,015

263,114

8

9

Stockholders' equity:

Preferred stock

0

0

0

Common stock

6

6

6

Additional paid-in capital, net

29,655

29,594

27,869

6

Retained earnings

27,045

26,407

23,973

2

13

Accumulated other comprehensive loss

(616)

(142)

(430)

**

43

Treasury stock, at cost

(8,806)

(8,180)

(6,365)

8

38

Total stockholders' equity

47,284

47,685

45,053

(1)

5

Total liabilities and stockholders' equity

$

334,048

$

313,700

$

308,167

6

8

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

**  

Not meaningful.

(1) 

As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the related right to reclaim cash collateral or obligation to return cash collateral. Prior period results, excluding regulatory ratios, have been recast to conform to this presentation.

(2) 

Total net revenue was reduced by $222 million in Q4 2015, $195 million in Q3 2015, $168 million in Q2 2015, $147 million in Q1 2015 and $165 million in Q4 2014 for the estimated uncollectible amount of billed finance charges and fees.

(3) 

Historically, the majority of the (benefit) provision for representation and warranty losses is included net of tax in discontinued operations. The (benefit) provision for mortgage representation and warranty losses included the following activity:

2015

2015

2015

2015

2014

(Dollars in millions) (unaudited)

Q4

Q3

Q2

Q1

Q4

(Benefit) provision for mortgage representation and warranty losses before income taxes:

Recorded in continuing operations

$

(1)

$

(7)

$

(9)

$

1

$

(11)

Recorded in discontinued operations

(21)

3

(27)

(19)

(41)

Total (benefit) provision for mortgage representation and warranty losses before income taxes

$

(22)

$

(4)

$

(36)

$

(18)

$

(52)

The mortgage representation and warranty reserve was $610 million as of December 31, 2015, $632 million as of September 30, 2015 and $731 million as of December 31, 2014.

(4) 

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.

(5) 

On December 1, 2015, we completed the acquisition of Healthcare Financial Services business of General Electric Capital Corporation ("GE Healthcare acquisition"). In Q4 2015, we recorded charges totaling $72 million associated with (i) closing the acquisition of Healthcare Financial Services business of General Electric Capital Corporation ("GE Healthcare acquisition") and establishing an initial allowance and reserve related to the loans acquired; (ii) certain planned site closures; and (iii) revisions to the restructuring charges recorded in Q2 2015 to reflect updated information. We recorded a build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve") of $69 million in Q3 2015 and $78 million in Q2 2015. In Q2 2015, we also recorded restructuring charges of $147 million for severance and related benefits pursuant to our ongoing benefit programs, as a result of the realignment of our workforce. We report the following non-GAAP financial measures that we believe are helpful for investors to understand the effect of the excluded items on our reported results. The table below presents a reconciliation of our reported results to these non-GAAP financial measures:

2015 Q4

2015 Q3

2015 Q2

Year Ended December 31, 2015

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

Pre-Tax Income

Net Income

Diluted EPS

Pre-Tax Income

Net Income

Diluted EPS

Pre-Tax Income

Net Income

Diluted EPS

Pre-Tax Income

Net Income

Diluted EPS

Reported results

$

1,334

$

920

$

1.58

$

1,648

$

1,114

$

1.98

$

1,236

$

863

$

1.50

$

5,881

$

4,050

$

7.07

Adjustments

72

46

0.09

69

69

0.12

225

155

0.28

366

270

0.49

Results excluding adjustments

$

1,406

$

966

$

1.67

$

1,717

$

1,183

$

2.10

$

1,461

$

1,018

$

1.78

$

6,247

$

4,320

$

7.56

(6)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on tangible common equity.

(7)

Included in loans held for investment are acquired loans recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3," or Accounting Standard Codification 310-30). These include certain of our consumer and commercial loans that were acquired through business acquisitions. The table below presents amounts related to acquired loans accounted for under SOP 03-3:

2015

2015

2015

2015

2014

(Dollars in millions) (unaudited)

Q4

Q3

Q2

Q1

Q4

Acquired loans accounted for under SOP 03-3:

Period-end unpaid principal balance

$

20,434

$

20,585

$

21,841

$

23,248

$

24,473

Period-end loans held for investment

19,518

19,743

20,970

22,334

23,500

Average loans held for investment

19,319

20,116

21,440

22,773

23,907

(8) 

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

(9) 

Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

(10) 

Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. Return on average tangible assets is a non-GAAP measure. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

(11) 

Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly titled measures reported by other companies.

(12) 

Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Return on average tangible common equity is a non-GAAP measure and our calculation may not be comparable to similarly titled measures reported by other companies. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

(13) 

Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the adjustments discussed above in Footnote 5, was 55.82% for Q4 2015, 52.78% for Q3 2015, 54.63% for Q2 2015 and 54.32% for the year ended December 31, 2015.

(14) 

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

(15) 

Ratios as of the end of Q4 2015 are preliminary and therefore subject to change. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.

(16) 

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

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

2015 Q4

2015 Q3

2014 Q4

(Dollars in millions) (unaudited)

Average Balance

Interest Income/ Expense(1)

Yield/ Rate(1)

Average Balance

Interest Income/ Expense(1)

Yield/ Rate(1)

Average Balance

Interest Income/ Expense(1)

Yield/ Rate(1)

Interest-earning assets:

Loans, including loans held for sale

$

220,760

$

4,961

8.99%

$

212,076

$

4,753

8.96%

$

204,137

$

4,613

9.04%

Investment securities

64,444

401

2.49

63,541

386

2.43

62,952

405

2.57

Cash equivalents and other

6,850

22

1.28

7,465

25

1.34

6,347

27

1.70

Total interest-earning assets

$

292,054

$

5,384

7.37

$

283,082

$

5,164

7.30

$

273,436

$

5,045

7.38

Interest-bearing liabilities:

Interest-bearing deposits

$

189,885

$

277

0.58%

$

185,800

$

271

0.58%

$

179,401

$

269

0.60%

Securitized debt obligations

15,993

43

1.08

14,881

39

1.05

11,479

36

1.25

Senior and subordinated notes

21,987

89

1.62

20,806

82

1.58

18,680

73

1.56

Other borrowings and liabilities

11,542

14

0.49

10,114

12

0.47

14,058

11

0.31

Total interest-bearing liabilities

$

239,407

$

423

0.71

$

231,601

$

404

0.70

$

223,618

$

389

0.70

Net interest income/spread

$

4,961

6.66

$

4,760

6.60

$

4,656

6.68

Impact of non-interest bearing funding

0.13

0.13

0.13

Net interest margin

6.79%

6.73%

6.81%

Year Ended December 31,

2015

2014

(Dollars in millions) (unaudited)

Average Balance

Interest Income/ Expense(1)

Yield/ Rate(1)

 

Average Balance

Interest Income/ Expense(1)

Yield/ Rate(1)

Interest-earning assets:

Loans, including loans held for sale

$

211,549

$

18,785

8.88%

$

198,419

$

17,662

8.90%

Investment securities

63,738

1,575

2.47

62,547

1,628

2.60

Cash equivalents and other

7,294

99

1.36

6,208

107

1.72

Total interest-earning assets

$

282,581

$

20,459

7.24

$

267,174

$

19,397

7.26

Interest-bearing liabilities:

Interest-bearing deposits

$

185,677

$

1,091

0.59%

$

181,036

$

1,088

0.60%

Securitized debt obligations

13,929

151

1.08

10,686

145

1.36

Senior and subordinated notes

20,935

330

1.58

16,543

299

1.81

Other borrowings and liabilities

11,297

53

0.47

12,325

47

0.38

Total interest-bearing liabilities

$

231,838

$

1,625

0.70

$

220,590

$

1,579

0.72

Net interest income/spread

$

18,834

6.54

$

17,818

6.54

Impact of non-interest bearing funding

0.12

0.13

Net interest margin

6.66%

6.67%

__________

(1) 

Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics

2015 Q4 vs.

Year Ended

(Dollars in millions) (unaudited)

2015 Q4

2015 Q3

2015 Q2

2015 Q1

2014 Q4

2015 Q3

2014 Q4

2015

2014

2015 vs. 2014

Loans Held For Investment (Period End)

Credit card:

   Domestic credit card

$

87,939

$

82,178

$

78,984

$

74,131

$

77,704

7%

13%

$

87,939

$

77,704

13%

   International credit card

8,186

7,957

8,219

7,623

8,172

3

8,186

8,172

Total credit card

96,125

90,135

87,203

81,754

85,876

7

12

96,125

85,876

12

Consumer banking:

   Auto

41,549

41,052

39,991

38,937

37,824

1

10

41,549

37,824

10

   Home loan

25,227

26,340

27,595

28,905

30,035

(4)

(16)

25,227

30,035

(16)

   Retail banking

3,596

3,598

3,590

3,537

3,580

3,596

3,580

Total consumer banking

70,372

70,990

71,176

71,379

71,439

(1)

(1)

70,372

71,439

(1)

Commercial banking:

   Commercial and multifamily real estate

25,518

23,585

22,886

22,831

23,137

8

10

25,518

23,137

10

   Commercial and industrial

37,135

27,873

27,660

27,172

26,972

33

38

37,135

26,972

38

Total commercial lending

62,653

51,458

50,546

50,003

50,109

22

25

62,653

50,109

25

   Small-ticket commercial real estate

613

654

685

738

781

(6)

(22)

613

781

(22)

Total commercial banking

63,266

52,112

51,231

50,741

50,890

21

24

63,266

50,890

24

Other loans

88

92

95

104

111

(4)

(21)

88

111

(21)

Total loans held for investment

$

229,851

$

213,329

$

209,705

$

203,978

$

208,316

8

10

$

229,851

$

208,316

10

Loans Held For Investment (Average)

Credit card:

   Domestic credit card

$

83,760

$

80,402

$

75,924

$

74,770

$

74,026

4%

13%

$

78,743

$

71,262

10%

   International credit card

8,127

8,048

7,977

7,811

7,714

1

5

7,992

7,684

4

Total credit card

91,887

88,450

83,901

82,581

81,740

4

12

86,735

78,946

10

Consumer banking:

   Auto

41,333

40,560

39,546

38,387

37,072

2

11

39,967

34,769

15

   Home loan

25,776

26,934

28,251

29,493

30,604

(4)

(16)

27,601

32,589

(15)

   Retail banking

3,595

3,603

3,570

3,561

3,578

3,582

3,606

(1)

Total consumer banking

70,704

71,097

71,367

71,441

71,254

(1)

(1)

71,150

70,964

Commercial banking:

   Commercial and multifamily real estate

25,613

23,305

22,853

23,120

23,129

10

11

23,728

22,003

8

   Commercial and industrial

31,132

27,620

27,414

27,190

26,409

13

18

28,349

25,028

13

Total commercial lending

56,745

50,925

50,267

50,310

49,538

11

15

52,077

47,031

11

   Small-ticket commercial real estate

634

667

709

760

801

(5)

(21)

692

868

(20)

Total commercial banking

57,379

51,592

50,976

51,070

50,339

11

14

52,769

47,899

10

Other loans

82

88

93

102

103

(7)

(20)

91

116

(22)

Total average loans held for investment

$

220,052

$

211,227

$

206,337

$

205,194

$

203,436

4

8

$

210,745

$

197,925

6

Net Charge-Off (Recovery) Rates

Credit card:

   Domestic credit card

3.75%

3.08%

3.42%

3.55%

3.39%

67

bps

36

bps

3.45%

3.43%

2

bps

   International credit card

2.76

1.80

2.65

2.80

3.34

96

(58)

2.50

3.69

(119)

Total credit card

3.66

2.96

3.35

3.48

3.38

70

28

3.36

3.46

(10)

2015 Q4 vs.

Year Ended

(Dollars in millions) (unaudited)

2015 Q4

2015 Q3

2015 Q2

2015 Q1

2014 Q4

2015 Q3

2014 Q4

2015

2014

2015 vs. 2014

Consumer banking:

   Auto

2.10%

1.85%

1.22%

1.55%

2.14%

25

bps

(4)

bps

1.69%

1.78%

(9)

bps

   Home loan

0.05

0.01

0.04

0.03

0.07

4

(2)

0.03

0.05

(2)

   Retail banking

1.43

1.53

1.39

0.96

1.28

(10)

15

1.33

1.07

26

Total consumer banking

1.32

1.14

0.76

0.89

1.20

18

12

1.03

0.95

8

Commercial banking:

   Commercial and multifamily real estate

(0.03)

(0.15)

(0.04)

(0.03)

0.01

12

**

(0.06)

(0.02)

(4)

   Commercial and industrial

0.07

0.61

0.13

0.05

0.10

(54)

(3)

0.21

0.04

17

Total commercial lending

0.02

0.26

0.05

0.01

0.06

(24)

(4)

0.09

0.01

8

   Small-ticket commercial real estate

0.34

0.50

0.15

0.47

0.80

(16)

(46)

0.36

0.52

(16)

Total commercial banking

0.03

0.26

0.05

0.02

0.07

(23)

(4)

0.09

0.02

7

Other loans

(2.53)

(5.50)

(0.79)

1.56

0.47

297

**

(1.66)

0.36

**

Total net charge-offs

1.96

1.69

1.64

1.72

1.80

27

16

1.75

1.72

3

30+ Day Performing Delinquency Rates

Credit card:

   Domestic credit card

3.39%

3.28%

2.84%

2.92%

3.27%

11

bps

12

bps

3.39%

3.27%

12

bps

   International credit card

2.98

2.81

2.65

2.81

2.94

17

4

2.98

2.94

4

Total credit card

3.36

3.24

2.82

2.91

3.24

12

12

3.36

3.24

12

Consumer banking:

   Auto

6.69

6.10

5.58

5.21

6.57

59

12

6.69

6.57

12

   Home loan

0.16

0.18

0.17

0.18

0.21

(2)

(5)

0.16

0.21

(5)

   Retail banking

0.76

0.62

0.66

0.60

0.64

14

12

0.76

0.64

12

Total consumer banking

4.05

3.62

3.24

2.95

3.60

43

45

4.05

3.60

45

Nonperforming Loans and Nonperforming Assets Rates(1)(2)

Credit card:

   International credit card

0.65%

0.77%

0.83%

0.84%

0.86%

(12)

bps

(21)

bps

0.65%

0.86%

(21)

bps

Total credit card

0.06

0.07

0.08

0.08

0.08

(1)

(2)

0.06

0.08

(2)

Consumer banking:

   Auto

0.53

0.49

0.40

0.31

0.52

4

1

0.53

0.52

1

   Home loan

1.24

1.18

1.13

1.16

1.10

6

14

1.24

1.10

14

   Retail banking

0.77

0.74

0.79

0.71

0.61

3

16

0.77

0.61

16

Total consumer banking

0.80

0.76

0.70

0.67

0.77

4

3

0.80

0.77

3

Commercial banking:

   Commercial and multifamily real estate

0.03

0.03

0.12

0.18

0.27

(24)

0.03

0.27

(24)

   Commercial and industrial

1.45

1.58

1.56

0.39

0.39

(13)

106

1.45

0.39

106

Total commercial lending

0.87

0.87

0.91

0.29

0.33

54

0.87

0.33

54

   Small-ticket commercial real estate

0.83

0.65

0.47

1.62

0.96

18

(13)

0.83

0.96

(13)

Total commercial banking

0.87

0.87

0.90

0.31

0.34

53

0.87

0.34

53

Other loans

12.35

12.10

10.68

13.33

13.37

25

(102)

12.35

13.37

(102)

Total nonperforming loans

0.51

0.50

0.50

0.35

0.39

1

12

0.51

0.39

12

Total nonperforming assets

0.65

0.64

0.64

0.50

0.54

1

11

0.65

0.54

11

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Financial Summary—Business Segment Results

Three Months Ended December 31, 2015

Year Ended December 31, 2015

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Net interest income

$

4,961

$

2,996

$

1,434

$

484

$

47

$

18,834

$

11,161

$

5,755

$

1,865

$

53

Non-interest income

1,233

902

182

142

7

4,579

3,421

710

487

(39)

Total net revenue(3)

6,194

3,898

1,616

626

54

23,413

14,582

6,465

2,352

14

Provision (benefit) for credit losses

1,380

1,022

240

118

4,536

3,417

819

302

(2)

Non-interest expense

3,480

2,021

1,057

342

60

12,996

7,502

4,026

1,156

312

Income (loss) from continuing operations before income taxes

1,334

855

319

166

(6)

5,881

3,663

1,620

894

(296)

Income tax provision (benefit)

426

302

115

60

(51)

1,869

1,309

586

324

(350)

Income from continuing operations, net of tax

$

908

$

553

$

204

$

106

$

45

$

4,012

$

2,354

$

1,034

$

570

$

54

Three Months Ended September 30, 2015

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Net interest income (expense)

$

4,760

$

2,866

$

1,443

$

454

$

(3)

Non-interest income

1,140

858

174

108

Total net revenue (loss)(3)

5,900

3,724

1,617

562

(3)

Provision (benefit) for credit losses

1,092

831

188

75

(2)

Non-interest expense

3,160

1,848

1,001

272

39

Income (loss) from continuing operations before income taxes

1,648

1,045

428

215

(40)

Income tax provision (benefit)

530

375

155

78

(78)

Income from continuing operations, net of tax

$

1,118

$

670

$

273

$

137

$

38

Three Months Ended December 31, 2014

Year Ended December 31, 2014

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Net interest income

$

4,656

$

2,697

$

1,459

$

455

$

45

$

17,818

$

10,310

$

5,748

$

1,751

$

9

Non-interest income

1,157

841

185

132

(1)

4,472

3,311

684

450

27

Total net revenue(3)

5,813

3,538

1,644

587

44

22,290

13,621

6,432

2,201

36

Provision (benefit) for credit losses

1,109

856

222

32

(1)

3,541

2,750

703

93

(5)

Non-interest expense

3,284

1,888

1,045

293

58

12,180

7,063

3,869

1,083

165

Income (loss) from continuing operations before income taxes

1,420

794

377

262

(13)

6,569

3,808

1,860

1,025

(124)

Income tax provision (benefit)

450

275

135

93

(53)

2,146

1,329

665

366

(214)

Income from continuing operations, net of tax

$

970

$

519

$

242

$

169

$

40

$

4,423

$

2,479

$

1,195

$

659

$

90

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial & Statistical Summary—Credit Card Business

2015 Q4 vs.

Year Ended

2015

2015

2015

2015

2014

2015

2014

2015 vs.

(Dollars in millions) (unaudited)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2015

2014

2014

Credit Card(4)

Earnings:

Net interest income

$

2,996

$

2,866

$

2,633

$

2,666

$

2,697

5%

11%

$

11,161

$

10,310

8%

Non-interest income

902

858

845

816

841

5

7

3,421

3,311

3

Total net revenue

3,898

3,724

3,478

3,482

3,538

5

10

14,582

13,621

7

Provision for credit losses

1,022

831

895

669

856

23

19

3,417

2,750

24

Non-interest expense

2,021

1,848

1,857

1,776

1,888

9

7

7,502

7,063

6

Income from continuing operations before income taxes

855

1,045

726

1,037

794

(18)

8

3,663

3,808

(4)

Income tax provision

302

375

263

369

275

(19)

10

1,309

1,329

(2)

Income from continuing operations, net of tax

$

553

$

670

$

463

$

668

$

519

(17)

7

$

2,354

$

2,479

(5)

Selected performance metrics:

Period-end loans held for investment

$

96,125

$

90,135

$

87,203

$

81,754

$

85,876

7%

12%

$

96,125

$

85,876

12%

Average loans held for investment

91,887

88,450

83,901

82,581

81,740

4

12

86,735

78,946

10

Average yield on loans held for investment(5)

14.45%

14.39%

13.98%

14.30%

14.61%

6

bps

(16)

bps

14.28%

14.48%

(20)

bps

Total net revenue margin(6)

16.97

16.84

16.58

16.87

17.31

13

(34)

16.81

17.25

(44)

Net charge-off rate

3.66

2.96

3.35

3.48

3.38

70

28

3.36

3.46

(10)

30+ day performing delinquency rate

3.36

3.24

2.82

2.91

3.24

12

12

3.36

3.24

12

30+ day delinquency rate

3.40

3.29

2.88

2.97

3.30

11

10

3.40

3.30

10

Nonperforming loan rate(1)

0.06

0.07

0.08

0.08

0.08

(1)

(2)

0.06

0.08

(2)

Card loan premium amortization and other intangible accretion(7)

$

5

$

5

$

7

$

11

$

11

(55)%

$

28

$

97

(71)%

PCCR intangible amortization

74

78

80

84

87

(5)%

(15)

316

369

(14)

Purchase volume(8)

75,350

69,875

68,559

57,383

63,484

8

19

271,167

224,750

21

2015 Q4 vs.

Year Ended

2015

2015

2015

2015

2014

2015

2014

2015 vs.

(Dollars in millions) (unaudited)

Q4

Q3

Q2

Q1

Q4

Q3

Q4

2015

2014

2014

Domestic Card

Earnings:

Net interest income

$

2,718

$

2,613

$

2,395

$

2,421

$

2,432

4%

12%

$

10,147

$

9,241

10%

Non-interest income

830

814

796

743

768

2

8

3,183

3,001

6

Total net revenue

3,548

3,427

3,191

3,164

3,200

4

11

13,330

12,242

9

Provision for credit losses

945

796

853

610

765

19

24

3,204

2,493

29

Non-interest expense

1,796

1,630

1,621

1,580

1,676

10

7

6,627

6,264

6

Income from continuing operations before income taxes

807

1,001

717

974

759

(19)

6

3,499

3,485

Income tax provision

293

362

259

353

272

(19)

8

1,267

1,246

2

Income from continuing operations, net of tax

$

514

$

639

$

458

$

621

$

487

(20)

6

$

2,232

$

2,239

Selected performance metrics:

Period-end loans held for investment

$

87,939

$

82,178

$

78,984

$

74,131

$

77,704

7%

13%

$

87,939

$

77,704

13%

Average loans held for investment

83,760

80,402

75,924

74,770

74,026

4

13

78,743

71,262

10

Average yield on loans held for investment(5)

14.31%

14.35%

13.95%

14.23%

14.43%

(4)

bps

(12)

bps

14.21%

14.26%

(5)

bps

Total net revenue margin(6)

16.95

17.05

16.81

16.93

17.29

(10)

(34)

16.93

17.18

(25)

Net charge-off rate

3.75

3.08

3.42

3.55

3.39

67

36

3.45

3.43

2

30+ day performing delinquency rate

3.39

3.28

2.84

2.92

3.27

11

12

3.39

3.27

12

30+ day delinquency rate

3.39

3.28

2.84

2.92

3.27

11

12

3.39

3.27

12

Purchase volume(8)

$

68,740

$

63,777

$

62,198

$

52,025

$

58,234

8%

18%

$

246,740

$

208,716

18%

International Card(4)

Earnings:

Net interest income

$

278

$

253

$

238

$

245

$

265

10%

5%

$

1,014

$

1,069

(5)%

Non-interest income

72

44

49

73

73

64

(1)

238

310

(23)

Total net revenue

350

297

287

318

338

18

4

1,252

1,379

(9)

Provision for credit losses

77

35

42

59

91

120

(15)

213

257

(17)

Non-interest expense

225

218

236

196

212

3

6

875

799

10

Income from continuing operations before income taxes

48

44

9

63

35

9

37

164

323

(49)

Income tax provision

9

13

4

16

3

(31)

200

42

83

(49)

Income from continuing operations, net of tax

$

39

$

31

$

5

$

47

$

32

26

22

$

122

$

240

(49)

Selected performance metrics:

Period-end loans held for investment

$

8,186

$

7,957

$

8,219

$

7,623

$

8,172

3%

$

8,186

$

8,172

Average loans held for investment

8,127

8,048

7,977

7,811

7,714

1

5%

7,992

7,684

4%

Average yield on loans held for investment(5)

15.96%

14.88%

14.29%

14.93%

16.31%

108

bps

(35)

bps

15.02%

16.53%

(151)

bps

Total net revenue margin(6)

17.21

14.77

14.36

16.31

17.55

244

(34)

15.66

17.95

(229)

Net charge-off rate

2.76

1.80

2.65

2.80

3.34

96

(58)

2.50

3.69

(119)

30+ day performing delinquency rate

2.98

2.81

2.65

2.81

2.94

17

4

2.98

2.94

4

30+ day delinquency rate

3.46

3.39

3.29

3.44

3.60

7

(14)

3.46

3.60

(14)

Nonperforming loan rate(1)

0.65

0.77

0.83

0.84

0.86

(12)

(21)

0.65

0.86

(21)

Purchase volume(8)

$

6,610

$

6,098