Capital One Reports First Quarter 2022 Net Income of $2.4 billion, or $5.62 per share

News provided by

Capital One Financial Corporation

Apr 26, 2022, 16:05 ET

MCLEAN, Va., April 26, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2022 of $2.4 billion, or $5.62 per diluted common share, compared with net income of $2.4 billion, or $5.41 per diluted common share in the fourth quarter of 2021, and with net income of $3.3 billion, or $7.03 per diluted common share in the first quarter of 2021.

"We continued to deliver strong growth across our businesses in the first quarter," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We remain well-positioned to capitalize on opportunities that emerge as sweeping digital change and modern technology transform banking."

The quarter included the following notable item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact



Gain on sale of partnership card portfolios

$                   192

$                   0.35


All comparisons below are for the first quarter of 2022 compared with the fourth quarter of 2021 unless otherwise noted.

First Quarter 2022 Income Statement Summary:

  • Total net revenue increased 1 percent to $8.2 billion.
  • Total non-interest expense decreased 3 percent to $4.6 billion:
    • 8 percent decrease in marketing.
    • 1 percent decrease in operating expenses.
  • Pre-provision earnings increased 5 percent to $3.6 billion.(1)
  • Provision for credit losses increased $296 million to $677 million:
    • Net charge-offs of $767 million.
    • $119 million loan reserve release.
  • Net interest margin of 6.49 percent, a decrease of 11 basis points.
  • Efficiency ratio of 55.68 percent.
  • Operating efficiency ratio of 44.45 percent.

First Quarter 2022 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.7 percent at March 31, 2022.
  • Period-end loans held for investment in the quarter increased $3.1 billion, or 1 percent, to $280.5 billion.
    • Credit Card period-end loans decreased $810 million, or 1 percent, to $114.0 billion.
      • Domestic Card period-end loans decreased $736 million, or 1 percent, to $108.0 billion.
    • Consumer Banking period-end loans increased $2.7 billion, or 3 percent, to $80.3 billion.
      • Auto period-end loans increased $2.8 billion, or 4 percent, to $78.6 billion.
    • Commercial Banking period-end loans increased $1.3 billion, or 1 percent, to $86.2 billion.
  • Average loans held for investment in the quarter increased $8.2 billion, or 3 percent, to $275.3 billion.
    • Credit Card average loans increased $2.9 billion, or 3 percent, to $111.5 billion.
      • Domestic Card average loans increased $2.8 billion, or 3 percent, to $105.5 billion.
    • Consumer Banking average loans increased $1.2 billion, or 2 percent, to $78.7 billion.
      • Auto average loans increased $1.6 billion, or 2 percent, to $76.9 billion.
    • Commercial Banking average loans increased $4.0 billion, or 5 percent, to $85.2 billion.
  • Period-end total deposits increased $2.4 billion, or 1 percent, to $313.4 billion, while average deposits increased $2.3 billion, or 1 percent, to $309.6 billion.
  • Interest-bearing deposits rate paid decreased 1 basis point to 0.32 percent.

(1)

Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period. Management believes that this financial metric is useful in enabling investors and others to assess the Company's ability to generate income to cover credit losses through a credit cycle, which can vary significantly between periods.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on April 26, 2022 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through May 10, 2022 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, 2021.

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 $313.4 billion in deposits and $434.2 billion in total assets as of March 31, 2022. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.


Exhibit 99.2

Capital One Financial Corporation

Financial Supplement(1)(2)

First Quarter 2022

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

9






Table 7:

Loan Information and Performance Statistics

10






Table 8:

Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

12





Business Segment Results





Table 9:

Financial Summary—Business Segment Results

13






Table 10:

Financial & Statistical Summary—Credit Card Business

14






Table 11:

Financial & Statistical Summary—Consumer Banking Business

16






Table 12:

Financial & Statistical Summary—Commercial Banking Business

17






Table 13:

Financial & Statistical Summary—Other and Total

18





Other





Table 14:

Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)

19






Table 15:

Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP 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 Quarterly Report on Form 10-Q for the period ended March 31, 2022 once it is filed with the Securities

and Exchange Commission.

(2)   

This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our

financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the

level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance

with generally accepted accounting principles in the U.S. ("GAAP"), nor are they necessarily comparable to non-GAAP measures that may

be presented by other companies.


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated













2022 Q1 vs.

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


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

Income Statement















Net interest income


$      6,397


$     6,450


$      6,156


$      5,743


$      5,822


(1)%


10%

Non-interest income


1,776


1,668


1,674


1,631


1,291


6


38

Total net revenue(1)


8,173


8,118


7,830


7,374


7,113


1


15

Provision (benefit) for credit losses


677


381


(342)


(1,160)


(823)


78


**

Non-interest expense:















Marketing


918


999


751


620


501


(8)


83

Operating expense


3,633


3,679


3,435


3,346


3,239


(1)


12

Total non-interest expense


4,551


4,678


4,186


3,966


3,740


(3)


22

Income from continuing operations before income taxes


2,945


3,059


3,986


4,568


4,196


(4)


(30)

Income tax provision


542


633


882


1,031


869


(14)


(38)

Income from continuing operations, net of tax


2,403


2,426


3,104


3,537


3,327


(1)


(28)

Loss from discontinued operations, net of tax


—


(1)


—


(1)


(2)


**


**

Net income


2,403


2,425


3,104


3,536


3,325


(1)


(28)

Dividends and undistributed earnings allocated to participating securities(2)


(28)


(21)


(26)


(30)


(28)


33


—

Preferred stock dividends


(57)


(74)


(79)


(60)


(61)


(23)


(7)

Issuance cost for redeemed preferred stock(3)


—


(34)


(12)


—


—


**


—

Net income available to common stockholders


$      2,318


$     2,296


$      2,987


$      3,446


$     3,236


1


(28)

Common Share Statistics















Basic earnings per common share:(2)















Net income from continuing operations


$        5.65


$       5.43


$        6.81


$        7.65


$       7.06


4%


(20)%

Net income per basic common share


$        5.65


$       5.43


$        6.81


$        7.65


$       7.06


4


(20)

Diluted earnings per common share:(2)















Net income from continuing operations


$        5.62


$       5.41


$        6.78


$        7.62


$       7.03


4%


(20)%

Net income per diluted common share


$        5.62


$       5.41


$        6.78


$        7.62


$       7.03


4


(20)

Weighted-average common shares outstanding (in millions):















Basic


410.4


422.5


438.8


450.6


458.6


(3)%


(11)%

Diluted


412.2


424.3


440.5


452.3


460.1


(3)


(10)

Common shares outstanding (period-end, in millions)


399.0


413.9


430.4


446.1


456.8


(4)


(13)

Dividends declared and paid per common share


$        0.60


$       0.60


$        1.20


$        0.40


$       0.40


—


50

Tangible book value per common share (period-end)(4)


91.77


99.74


99.60


97.20


90.96


(8)


1







































2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions)








Balance Sheet (Period-End)















Loans held for investment


$  280,466


$  277,340


$  261,390


$  249,597


$  243,131


1%


15%

Interest-earning assets


398,241


397,341


387,208


387,295


392,485


—


1

Total assets


434,195


432,381


425,377


423,420


425,175


—


2

Interest-bearing deposits


275,648


272,937


269,134


271,314


276,325


1


—

Total deposits


313,429


310,980


305,938


306,308


310,328


1


1

Borrowings


45,358


43,086


37,501


36,343


38,450


5


18

Common equity


51,499


56,184


57,632


58,136


56,341


(8)


(9)

Total stockholders' equity


56,345


61,029


63,544


64,624


61,188


(8)


(8)

Balance Sheet (Average Balances)















Loans held for investment


$  275,342


$  267,159


$  253,101


$  246,463


$  243,937


3%


13%

Interest-earning assets


394,082


390,868


387,766


390,129


388,572


1


1

Total assets


430,372


427,845


424,506


424,099


421,808


1


2

Interest-bearing deposits


271,823


269,951


269,278


273,476


273,358


1


(1)

Total deposits


309,597


307,272


305,035


308,217


305,056


1


1

Borrowings


42,277


39,943


37,464


37,054


39,911


6


6

Common equity


54,591


56,946


58,230


56,885


55,775


(4)


(2)

Total stockholders' equity


59,437


62,498


64,682


62,376


60,623


(5)


(2)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated


2022 Q1 vs.

(Dollars in millions, except as noted)


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1








Performance Metrics















Net interest income growth (period over period)


(1)%


5%


7%


(1)%


(1)%


**


**

Non-interest income growth (period over period)


6


—


3


26


(12)


**


**

Total net revenue growth (period over period)


1


4


6


4


(3)


**


**

Total net revenue margin(5)


8.30


8.31


8.08


7.56


7.32


(1) bps


98 bps

Net interest margin(6)


6.49


6.60


6.35


5.89


5.99


(11)


50

Return on average assets


2.23


2.27


2.92


3.34


3.16


(4)


(93)

Return on average tangible assets(7)


2.31


2.35


3.03


3.46


3.27


(4)


(96)

Return on average common equity(8)


16.98


16.13


20.52


24.24


23.22


85


(6)%

Return on average tangible common equity(9)


23.36


21.82


27.50


32.75


31.61


154


(8)

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


6.61


7.00


6.62


6.44


6.13


(39)


48 bps

Efficiency ratio(10)


55.68


57.63


53.46


53.78


52.58


(195)


310

Operating efficiency ratio(11)


44.45


45.32


43.87


45.38


45.54


(87)


(109)

Effective income tax rate for continuing operations


18.4


20.7


22.1


22.6


20.7


(230)


(230)

Employees (period-end, in thousands)


51.5


50.8


50.8


52.0


51.7


1%


—%

Credit Quality Metrics















Allowance for credit losses


$  11,308


$   11,430


$   11,573


$   12,346


$   14,017


(1)%


(19)%

Allowance coverage ratio


4.03%


4.12%


4.43%


4.95%


5.77%


(9) bps


(174) bps

Net charge-offs


$       767


$        527


$        426


$        541


$        740


46%


4%

Net charge-off rate(12)


1.11%


0.79%


0.67%


0.88%


1.21%


32 bps


(10) bps

30+ day performing delinquency rate


2.08


2.25


1.97


1.75


1.82


(17)


26

30+ day delinquency rate


2.21


2.41


2.13


1.89


1.98


(20)


23

Capital Ratios(13)















Common equity Tier 1 capital 


12.7%


13.1%


13.8%


14.5%


14.6%


(40) bps


(190) bps

Tier 1 capital


14.1


14.5


15.7


16.6


16.2


(40)


(210)

Total capital


16.4


16.9


18.2


18.8


18.6


(50)


(220)

Tier 1 leverage


11.3


11.6


12.2


12.4


11.7


(30)


(40)

Tangible common equity ("TCE")(14)


8.7


9.9


10.4


10.6


10.1


(120)


(140)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income













2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

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








Interest income:















Loans, including loans held for sale


$      6,367


$      6,451


$      6,205


$      5,753


$      5,854


(1)%


9%

Investment securities


402


368


317


370


391


9


3

Other


15


12


16


16


16


25


(6)

Total interest income


6,784


6,831


6,538


6,139


6,261


(1)


8

Interest expense:















Deposits


218


222


228


237


269


(2)


(19)

Securitized debt obligations


29


30


29


28


32


(3)


(9)

Senior and subordinated notes


131


121


116


122


129


8


2

Other borrowings


9


8


9


9


9


13


—

Total interest expense


387


381


382


396


439


2


(12)

Net interest income


6,397


6,450


6,156


5,743


5,822


(1)


10

Provision (benefit) for credit losses


677


381


(342)


(1,160)


(823)


78


**

Net interest income after provision for credit losses


5,720


6,069


6,498


6,903


6,645


(6)


(14)

Non-interest income:















Interchange fees, net


1,033


1,005


1,022


1,016


817


3


26

Service charges and other customer-related fees


400


435


407


384


352


(8)


14

Other


343


228


245


231


122


50


181

Total non-interest income


1,776


1,668


1,674


1,631


1,291


6


38

Non-interest expense:















Salaries and associate benefits


2,026


1,941


1,852


1,781


1,847


4


10

Occupancy and equipment


513


527


481


523


472


(3)


9

Marketing


918


999


751


620


501


(8)


83

Professional services


397


449


358


341


292


(12)


36

Communications and data processing


339


326


319


315


302


4


12

Amortization of intangibles


14


13


5


5


6


8


133

Other


344


423


420


381


320


(19)


8

Total non-interest expense


4,551


4,678


4,186


3,966


3,740


(3)


22

Income from continuing operations before income taxes


2,945


3,059


3,986


4,568


4,196


(4)


(30)

Income tax provision


542


633


882


1,031


869


(14)


(38)

Income from continuing operations, net of tax


2,403


2,426


3,104


3,537


3,327


(1)


(28)

Loss from discontinued operations, net of tax


—


(1)


—


(1)


(2)


**


**

Net income


2,403


2,425


3,104


3,536


3,325


(1)


(28)

Dividends and undistributed earnings allocated to participating securities(2)


(28)


(21)


(26)


(30)


(28)


33


—

Preferred stock dividends


(57)


(74)


(79)


(60)


(61)


(23)


(7)

Issuance cost for redeemed preferred stock(3)


—


(34)


(12)


—


—


**


—

Net income available to common stockholders


$      2,318


$      2,296


$      2,987


$      3,446


$      3,236


1


(28)











































2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

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








Basic earnings per common share:(2)















Net income from continuing operations


$        5.65


$        5.43


$        6.81


$        7.65


$        7.06


4%


(20)%

Net income per basic common share


$        5.65


$        5.43


$        6.81


$        7.65


$        7.06


4


(20)

Diluted earnings per common share:(2)















Net income from continuing operations


$        5.62


$        5.41


$        6.78


$        7.62


$        7.03


4


(20)

Net income per diluted common share


$        5.62


$        5.41


$        6.78


$        7.62


$        7.03


4


(20)

Weighted-average common shares outstanding (in millions):















Basic common shares


410.4


422.5


438.8


450.6


458.6


(3)


(11)

Diluted common shares


412.2


424.3


440.5


452.3


460.1


(3)


(10)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets













2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions)








Assets:















Cash and cash equivalents:















Cash and due from banks


$     5,107


$     4,164


$     5,444


$     5,312


$     4,670


23%


9%

Interest-bearing deposits and other short-term investments


21,697


17,582


21,180


29,534


45,825


23


(53)

Total cash and cash equivalents


26,804


21,746


26,624


34,846


50,495


23


(47)

Restricted cash for securitization investors


281


308


234


242


1,779


(9)


(84)

Securities available for sale


89,076


95,261


98,149


101,766


99,165


(6)


(10)

Loans held for investment:















Unsecuritized loans held for investment


257,505


252,468


238,475


226,130


219,182


2


17

Loans held in consolidated trusts


22,961


24,872


22,915


23,467


23,949


(8)


(4)

Total loans held for investment


280,466


277,340


261,390


249,597


243,131


1


15

Allowance for credit losses


(11,308)


(11,430)


(11,573)


(12,346)


(14,017)


(1)


(19)

Net loans held for investment


269,158


265,910


249,817


237,251


229,114


1


17

Loans held for sale


1,155


5,888


6,300


6,522


2,896


(80)


(60)

Premises and equipment, net


4,238


4,210


4,204


4,227


4,277


1


(1)

Interest receivable


1,479


1,460


1,418


1,372


1,380


1


7

Goodwill


14,784


14,782


14,652


14,654


14,654


—


1

Other assets


27,220


22,816


23,979


22,540


21,415


19


27

Total assets


$ 434,195


$ 432,381


$ 425,377


$ 423,420


$ 425,175


—


2




























2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions)








Liabilities:















Interest payable


$        261


$        281


$        241


$        301


$        288


(7)%


(9)%

Deposits:















Non-interest-bearing deposits


37,781


38,043


36,804


34,994


34,003


(1)


11

Interest-bearing deposits


275,648


272,937


269,134


271,314


276,325


1


—

Total deposits


313,429


310,980


305,938


306,308


310,328


1


1

Securitized debt obligations


13,740


14,994


12,635


10,561


12,071


(8)


14

Other debt:















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


594


820


825


845


842


(28)


(29)

Senior and subordinated notes


26,976


27,219


23,983


24,878


25,467


(1)


6

Other borrowings


4,048


53


58


59


70


**


**

Total other debt


31,618


28,092


24,866


25,782


26,379


13


20

Other liabilities


18,802


17,005


18,153


15,844


14,921


11


26

Total liabilities


377,850


371,352


361,833


358,796


363,987


2


4
















Stockholders' equity:















Preferred stock


0


0


0


0


0


—


—

Common stock


7


7


7


7


7


—


—

Additional paid-in capital, net


34,286


34,112


35,051


35,472


33,671


1


2

Retained earnings


53,099


51,006


48,944


46,461


43,167


4


23

Accumulated other comprehensive income (loss)


(4,093)


374


1,360


1,792


1,783


**


**

Treasury stock, at cost


(26,954)


(24,470)


(21,818)


(19,108)


(17,440)


10


55

Total stockholders' equity


56,345


61,029


63,544


64,624


61,188


(8)


(8)

Total liabilities and stockholders' equity


$ 434,195


$ 432,381


$ 425,377


$ 423,420


$ 425,175


—


2


CAPITAL ONE FINANCIAL CORPORATION (COF)

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



(1)

Total net revenue was reduced by $192 million in Q1 2022, $151 million in Q4 2021, $123 million in Q3 2021, $175 million in Q2 2021 and $180 million in Q1

2021 for credit card finance charges and fees charged-off as uncollectible.

(2)

Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the

sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure.

See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(3)

On September 1, 2021, we redeemed all outstanding shares of our fixed-to-floating rate non-cumulative perpetual preferred stock Series E, which reduced our net

 income available to common shareholders by $12 million in Q3 2021. On December 1, 2021, we redeemed all outstanding shares of our fixed rate 5.20% non-

cumulative perpetual preferred stock Series G, and our fixed rate 6.00% non-cumulative perpetual preferred stock Series H, which together reduced our net income

available to common shareholders by $34 million in Q4 2021.

(4)

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See

"Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(5)

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

(6)

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

(7)

Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period

divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for

additional information on non-GAAP measures.

(8)

Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from

discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be

comparable to similarly-titled measures reported by other companies.

(9)

Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized net income (loss) available to common

stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity ("TCE"). Our

calculation of return on average TCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of

Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(10)

Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted

efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for

additional information on our non-GAAP measures.

(11)

Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted

operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP

Measures" for additional information on our non-GAAP measures.

(12)

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

(13)

Capital ratios as of the end of Q1 2022 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and

Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.

(14)

TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and

Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

** 

Not meaningful.


CAPITAL ONE FINANCIAL CORPORATION (COF)

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



2022 Q1


2021 Q4


2021 Q1

(Dollars in millions, except as noted)


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

Interest-earning assets:



















Loans, including loans held for sale


$   279,022


$      6,367


9.13%


$   272,805


$      6,451


9.46%


$   246,675


$      5,854


9.49%

Investment securities


94,700


402


1.70


96,421


368


1.53


98,296


391


1.59

Cash equivalents and other


20,360


15


0.29


21,642


12


0.22


43,601


16


0.15

Total interest-earning assets


$   394,082


$      6,784


6.89


$   390,868


$      6,831


6.99


$   388,572


$      6,261


6.45

Interest-bearing liabilities:



















Interest-bearing deposits


$   271,823


$         218


0.32


$   269,951


$         222


0.33


$   273,358


$         269


0.39

Securitized debt obligations


13,740


29


0.84


13,775


30


0.87


12,240


32


1.05

Senior and subordinated notes


26,481


131


1.98


25,454


121


1.90


26,968


129


1.91

Other borrowings and liabilities


3,633


9


1.00


2,279


8


1.50


2,210


9


1.62

Total interest-bearing liabilities


$   315,677


$         387


0.49


$   311,459


$         381


0.49


$   314,776


$         439


0.56

Net interest income/spread




$      6,397


6.40




$      6,450


6.50




$      5,822


5.89

Impact of non-interest-bearing funding






0.09






0.10






0.10

Net interest margin






6.49%






6.60%






5.99%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics













2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions, except as noted)








Loans Held for Investment (Period-End)















Credit card:















   Domestic credit card


$   107,987


$   108,723


$     99,258


$     95,309


$     91,099


(1)%


19%

   International card businesses


5,975


6,049


5,772


5,708


8,028


(1)


(26)

Total credit card


113,962


114,772


105,030


101,017


99,127


(1)


15

Consumer banking:















   Auto


78,604


75,779


74,716


71,713


67,059


4


17

   Retail banking


1,726


1,867


2,396


3,046


3,143


(8)


(45)

Total consumer banking


80,330


77,646


77,112


74,759


70,202


3


14

Commercial banking:















   Commercial and multifamily real estate


34,354


35,262


33,096


29,616


30,008


(3)


14

   Commercial and industrial


51,820


49,660


46,152


44,205


43,794


4


18

Total commercial banking


86,174


84,922


79,248


73,821


73,802


1


17

Total loans held for investment


$   280,466


$   277,340


$   261,390


$   249,597


$   243,131


1


15

Loans Held for Investment (Average)















Credit card:















   Domestic credit card


$   105,536


$   102,717


$     96,309


$     91,535


$     92,594


3%


14%

   International card businesses


5,944


5,871


5,737


8,139


7,940


1


(25)

Total credit card


111,480


108,588


102,046


99,674


100,534


3


11

Consumer banking:















   Auto


76,892


75,284


73,296


69,543


66,185


2


16

   Retail banking


1,797


2,160


2,700


3,162


3,049


(17)


(41)

Total consumer banking


78,689


77,444


75,996


72,705


69,234


2


14

Commercial banking:















   Commercial and multifamily real estate


34,671


33,591


30,314


30,124


29,856


3


16

   Commercial and industrial


50,502


47,536


44,745


43,960


44,313


6


14

Total commercial banking


85,173


81,127


75,059


74,084


74,169


5


15

Total average loans held for investment


$   275,342


$   267,159


$   253,101


$   246,463


$   243,937


3


13








































2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1









Net Charge-Off (Recovery) Rates















Credit card:















   Domestic credit card


2.12%


1.49%


1.36%


2.28%


2.54%


63 bps


(42) bps

   International card businesses


3.20


0.14


2.72


2.41


2.30


306


90

Total credit card


2.18


1.42


1.43


2.29


2.52


76


(34)

Consumer banking:















   Auto


0.66


0.58


0.18


(0.12)


0.47


8


19

   Retail banking


4.31


6.69


2.45


1.41


1.68


(238)


263

Total consumer banking


0.75


0.75


0.27


(0.06)


0.52


—


23

Commercial banking:















   Commercial and multifamily real estate


—


—


0.01


0.04


0.06


—


(6)

   Commercial and industrial


0.11


(0.03)


0.07


(0.21)


0.11


14


—

Total commercial banking


0.06


(0.02)


0.05


(0.11)


0.09


8


(3)

Total net charge-offs


1.11


0.79


0.67


0.88


1.21


32


(10)

30+ Day Performing Delinquency Rates















Credit card:















   Domestic credit card


2.32%


2.22%


1.93%


1.68%


2.24%


10 bps


8 bps

   International card businesses


3.58


3.42


3.27


2.89


2.51


16


107

Total credit card


2.38


2.28


2.00


1.75


2.26


10


12

Consumer banking:















   Auto


3.85


4.32


3.65


3.26


3.12


(47)


73

   Retail banking


0.74


1.92


1.15


0.79


1.02


(118)


(28)

Total consumer banking


3.78


4.26


3.58


3.16


3.03


(48)


75

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















Credit card:















   International card businesses


0.14%


0.16%


0.16%


0.20%


0.17%


(2) bps


(3) bps

Total credit card


0.01


0.01


0.01


0.01


0.01


—


—

Consumer banking:















   Auto


0.41


0.45


0.36


0.29


0.29


(4)


12

   Retail banking


2.63


2.51


2.20


1.75


1.16


12


147

Total consumer banking


0.46


0.50


0.42


0.35


0.33


(4)


13

Commercial banking:















   Commercial and multifamily real estate


0.98


1.09


0.87


1.02


0.78


(11)


20

   Commercial and industrial


0.69


0.64


0.68


1.03


1.02


5


(33)

Total commercial banking


0.81


0.82


0.76


1.03


0.92


(1)


(11)

Total nonperforming loans


0.38


0.40


0.35


0.41


0.38


(2)


—

Total nonperforming assets


0.40


0.41


0.37


0.43


0.40


(1)


—

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



Three Months Ended March 31, 2022



Credit Card


Consumer Banking





(Dollars in millions)


Domestic
Card


International
Card
Businesses


Total Credit
Card


Auto


Retail
Banking


Total
Consumer
Banking


Commercial
Banking


Total

Allowance for credit losses:

















Balance as of December 31, 2021


$         7,968


$             377


$         8,345


$         1,852


$             66


$         1,918


$         1,167


$       11,430

Charge-offs


(867)


(88)


(955)


(326)


(23)


(349)


(17)


(1,321)

Recoveries


308


40


348


199


4


203


3


554

Net charge-offs


(559)


(48)


(607)


(127)


(19)


(146)


(14)


(767)

Provision (benefit) for credit losses


559


(14)


545


127


3


130


(27)


648

Allowance build (release) for credit losses


—


(62)


(62)


—


(16)


(16)


(41)


(119)

Other changes(3)


—


(3)


(3)


—


—


—


—


(3)

Balance as of March 31, 2022


7,968


312


8,280


1,852


50


1,902


1,126


11,308

Reserve for unfunded lending commitments:

















Balance as of December 31, 2021


—


—


—


—


—


—


165


165

Provision (benefit) for losses on unfunded lending commitments


—


—


—


—


—


—


35


35

Balance as of March 31, 2022


—


—


—


—


—


—


200


200

Combined allowance and reserve as of March 31, 2022


$         7,968


$             312


$         8,280


$         1,852


$             50


$         1,902


$         1,326


$       11,508

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results



Three Months Ended March 31, 2022

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(4)


Other(4)


Total

Net interest income (loss)


$        3,839


$       2,113


$             607


$      (162)


$      6,397

Non-interest income (loss)


1,458


105


277


(64)


1,776

Total net revenue (loss)


5,297


2,218


884


(226)


8,173

Provision (benefit) for credit losses


545


130


8


(6)


677

Non-interest expense


2,783


1,236


488


44


4,551

Income (loss) from continuing operations before income taxes


1,969


852


388


(264)


2,945

Income tax provision (benefit)


469


202


92


(221)


542

Income (loss) from continuing operations, net of tax


$        1,500


$          650


$             296


$        (43)


$      2,403














Three Months Ended December 31, 2021

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(4)


Other(4)


Total

Net interest income (loss)


$        3,865


$       2,158


$             595


$      (168)


$      6,450

Non-interest income (loss)


1,261


142


345


(80)


1,668

Total net revenue (loss)


5,126


2,300


940


(248)


8,118

Provision (benefit) for credit losses


423


2


(44)


—


381

Non-interest expense


2,799


1,285


520


74


4,678

Income (loss) from continuing operations before income taxes


1,904


1,013


464


(322)


3,059

Income tax provision (benefit)


451


239


109


(166)


633

Income (loss) from continuing operations, net of tax


$        1,453


$          774


$             355


$      (156)


$      2,426














Three Months Ended March 31, 2021

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(4)


Other(4)


Total

Net interest income (loss)


$        3,372


$       2,030


$             520


$      (100)


$      5,822

Non-interest income (loss)


1,029


141


240


(119)


1,291

Total net revenue (loss)


4,401


2,171


760


(219)


7,113

Provision (benefit) for credit losses


(492)


(126)


(203)


(2)


(823)

Non-interest expense


2,135


1,117


419


69


3,740

Income (loss) from continuing operations before income taxes


2,758


1,180


544


(286)


4,196

Income tax provision (benefit)


653


278


128


(190)


869

Income (loss) from continuing operations, net of tax


$        2,105


$          902


$             416


$        (96)


$      3,327

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business













2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions, except as noted)








Credit Card















Earnings:















Net interest income


$     3,839


$     3,865


$     3,620


$     3,217


$     3,372


(1)%


14%

Non-interest income


1,458


1,261


1,263


1,253


1,029


16


42

Total net revenue


5,297


5,126


4,883


4,470


4,401


3


20

Provision (benefit) for credit losses


545


423


(198)


(635)


(492)


29


**

Non-interest expense


2,783


2,799


2,424


2,263


2,135


(1)


30

Income from continuing operations before income taxes


1,969


1,904


2,657


2,842


2,758


3


(29)

Income tax provision


469


451


627


672


653


4


(28)

Income from continuing operations, net of tax


$     1,500


$     1,453


$     2,030


$      2,170


$     2,105


3


(29)

Selected performance metrics:















Period-end loans held for investment


$ 113,962


$ 114,772


$ 105,030


$  101,017


$   99,127


(1)


15

Average loans held for investment


111,480


108,588


102,046


99,674


100,534


3


11

Average yield on loans outstanding(5)


14.97%


14.94%


14.88%


14.04%


14.49%


3 bps


48 bps

Total net revenue margin(6)


18.56


18.11


18.33


17.59


17.17


45


139

Net charge-off rate


2.18


1.42


1.43


2.29


2.52


76


(34)

30+ day performing delinquency rate


2.38


2.28


2.00


1.75


2.26


10


12

30+ day delinquency rate


2.39


2.29


2.00


1.75


2.27


10


12

Nonperforming loan rate(1)


0.01


0.01


0.01


0.01


0.01


—


—

Purchase volume(7)


$ 133,662


$ 149,982


$ 136,614


$  132,676


$ 108,333


(11)%


23%




























2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions, except as noted)








Domestic Card















Earnings:















Net interest income


$     3,620


$     3,558


$     3,319


$      2,944


$     3,095


2%


17%

Non-interest income


1,248


1,190


1,200


1,183


959


5


30

Total net revenue


4,868


4,748


4,519


4,127


4,054


3


20

Provision (benefit) for credit losses


559


384


(200)


(561)


(491)


46


**

Non-interest expense


2,564


2,564


2,191


2,034


1,923


—


33

Income from continuing operations before income taxes


1,745


1,800


2,528


2,654


2,622


(3)


(33)

Income tax provision


414


424


597


626


619


(2)


(33)

Income from continuing operations, net of tax


$      1,331


$     1,376


$     1,931


$      2,028


$     2,003


(3)


(34)

Selected performance metrics:















Period-end loans held for investment


$  107,987


$ 108,723


$    99,258


$    95,309


$   91,099


(1)


19

Average loans held for investment


105,536


102,717


96,309


91,535


92,594


3


14

Average yield on loans outstanding(5)


14.82%


14.86%


14.80%


13.91%


14.34%


(4) bps


48 bps

Total net revenue margin(6)


18.28


18.14


18.40


17.66


17.15


14


113

Net charge-off rate


2.12


1.49


1.36


2.28


2.54


63


(42)

30+ day performing delinquency rate


2.32


2.22


1.93


1.68


2.24


10


8

Purchase volume(7)


$  126,284


$ 138,825


$  126,057


$  122,456


$   99,960


(9)%


26%

Refreshed FICO scores:(8)















Greater than 660


70%


71%


71%


72%


70%


(1)


—

660 or below


30


29


29


28


30


1


—

Total


100%


100%


100%


100%


100%





CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business













2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions, except as noted)








Consumer Banking















Earnings:















Net interest income


$   2,113


$   2,158


$   2,159


$   2,101


$   2,030


(2)%


4%

Non-interest income


105


142


127


144


141


(26)


(26)

Total net revenue


2,218


2,300


2,286


2,245


2,171


(4)


2

Provision (benefit) for credit losses


130


2


(91)


(306)


(126)


**


**

Non-interest expense


1,236


1,285


1,186


1,123


1,117


(4)


11

Income from continuing operations before income taxes


852


1,013


1,191


1,428


1,180


(16)


(28)

Income tax provision


202


239


282


337


278


(15)


(27)

Income from continuing operations, net of tax


$      650


$      774


$      909


$   1,091


$      902


(16)


(28)

Selected performance metrics:















Period-end loans held for investment


$ 80,330


$ 77,646


$ 77,112


$ 74,759


$ 70,202


3


14

Average loans held for investment


78,689


77,444


75,996


72,705


69,234


2


14

Average yield on loans held for investment(5)


7.17%


7.55%


7.78%


7.99%


8.16%


      (38) bps


      (99) bps

Auto loan originations


$ 11,713


$   9,721


$ 11,570


$ 12,959


$   8,833


20%


33%

Period-end deposits


258,359


256,407


252,387


251,155


254,001


1


2

Average deposits


255,265


253,372


251,307


252,488


249,499


1


2

Average deposits interest rate


0.29%


0.30%


0.30%


0.31%


0.36%


        (1) bps


        (7) bps

Net charge-off (recovery) rate


0.75


0.75


0.27


(0.06)


0.52


—


23

30+ day performing delinquency rate


3.78


4.26


3.58


3.16


3.03


(48)


75

30+ day delinquency rate


4.13


4.66


3.88


3.40


3.25


(53)


88

Nonperforming loan rate(1)


0.46


0.50


0.42


0.35


0.33


(4)


13

Nonperforming asset rate(2)


0.52


0.56


0.47


0.40


0.39


(4)


13

Auto—At origination FICO scores:(9)















Greater than 660


51%


50%


49%


48%


47%


1%


4%

621 - 660


20


20


20


20


20


—


—

620 or below


29


30


31


32


33


(1)


(4)

Total


100%


100%


100%


100%


100%




















CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business













2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions, except as noted)








Commercial Banking















Earnings:















Net interest income


$      607


$       595


$       578


$       460


$       520


2%


17%

Non-interest income


277


345


306


257


240


(20)


15

Total net revenue(6)


884


940


884


717


760


(6)


16

Provision (benefit) for credit losses


8


(44)


(53)


(219)


(203)


**


**

Non-interest expense


488


520


459


417


419


(6)


16

Income from continuing operations before income taxes


388


464


478


519


544


(16)


(29)

Income tax provision


92


109


113


123


128


(16)


(28)

Income from continuing operations, net of tax


$      296


$       355


$       365


$       396


$       416


(17)


(29)

Selected performance metrics:















Period-end loans held for investment


$ 86,174


$  84,922


$  79,248


$  73,821


$  73,802


1


17

Average loans held for investment


85,173


81,127


75,059


74,084


74,169


5


15

Average yield on loans held for investment(4)(5)


2.66%


2.71%


2.77%


2.72%


2.76%


(5) bps


(10) bps

Period-end deposits


$ 45,232


$  44,809


$  43,347


$  42,973


$  41,552


1%


9%

Average deposits


45,008


44,206


42,729


42,311


40,107


2


12

Average deposits interest rate


0.12%


0.12%


0.15%


0.14%


0.18%


—


(6) bps

Net charge-off (recovery) rate


0.06


(0.02)


0.05


(0.11)


0.09


8 bps


(3)

Nonperforming loan rate(1)


0.81


0.82


0.76


1.03


0.92


(1)


(11)

Nonperforming asset rate(2)


0.81


0.82


0.76


1.03


0.92


(1)


(11)

Risk category:(10)















Noncriticized


$ 80,586


$  79,014


$  73,218


$  67,481


$  66,299


2%


22%

Criticized performing


4,893


5,209


5,429


5,581


6,821


(6)


(28)

Criticized nonperforming


695


699


601


759


682


(1)


2

Total commercial banking loans


$ 86,174


$  84,922


$  79,248


$  73,821


$  73,802


1


17

Risk category as a percentage of period-end
loans held for investment:(10)











Noncriticized


93.5%


93.1%


92.3%


91.4%


89.9%


40 bps


360 bps

Criticized performing


5.7


6.1


6.9


7.6


9.2


(40)


(350)

Criticized nonperforming


0.8


0.8


0.8


1.0


0.9


—


(10)

Total commercial banking loans


100.0%


100.0%


100.0%


100.0%


100.0%





CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total













2022 Q1 vs.



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1


2021

Q4


2021

Q1

(Dollars in millions)








Other















Earnings:















Net interest loss


$        (162)


$        (168)


$        (201)


$          (35)


$        (100)


(4)%


62%

Non-interest loss


(64)


(80)


(22)


(23)


(119)


(20)


(46)

Total net loss(4)


(226)


(248)


(223)


(58)


(219)


(9)


3

Benefit for credit losses


(6)


—


—


—


(2)


**


**

Non-interest expense(11)


44


74


117


163


69


(41)


(36)

Loss from continuing operations before income taxes


(264)


(322)


(340)


(221)


(286)


(18)


(8)

Income tax benefit


(221)


(166)


(140)


(101)


(190)


33


16

Loss from continuing operations, net of tax


$          (43)


$        (156)


$        (200)


$        (120)


$          (96)


(72)


(55)

Selected performance metrics:















Period-end deposits


$      9,838


$      9,764


$    10,204


$    12,180


$    14,775


1


(33)

Average deposits


9,324


9,694


10,999


13,418


15,450


(4)


(40)

Total















Earnings:















Net interest income


$      6,397


$      6,450


$      6,156


$      5,743


$      5,822


(1)%


10%

Non-interest income


1,776


1,668


1,674


1,631


1,291


6


38

Total net revenue


8,173


8,118


7,830


7,374


7,113


1


15

Provision (benefit) for credit losses


677


381


(342)


(1,160)


(823)


78


**

Non-interest expense


4,551


4,678


4,186


3,966


3,740


(3)


22

Income from continuing operations before income taxes


2,945


3,059


3,986


4,568


4,196


(4)


(30)

Income tax provision


542


633


882


1,031


869


(14)


(38)

Income from continuing operations, net of tax


$      2,403


$      2,426


$      3,104


$      3,537


$      3,327


(1)


(28)

Selected performance metrics:















Period-end loans held for investment


$  280,466


$  277,340


$  261,390


$  249,597


$  243,131


1


15

Average loans held for investment


275,342


267,159


253,101


246,463


243,937


3


13

Period-end deposits


313,429


310,980


305,938


306,308


310,328


1


1

Average deposits


309,597


307,272


305,035


308,217


305,056


1


1

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)



(1)

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

(2)

Nonperforming assets consist of nonperforming loans, repossessed assets and other foreclosed assets. The total nonperforming asset rate is calculated based on total

nonperforming assets divided by the combined period-end total loans held for investment, repossessed assets and other foreclosed assets.

(3)

Primarily represents foreign currency translation adjustments.

(4)

Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields

on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.

(5)

Average yield is calculated based on annualized interest income for the period divided by average loans during the period. Annualized interest income does not include

any allocations, such as funds transfer pricing.

(6)

Total net revenue margin is calculated based on total net revenue for the period divided by average loans outstanding during the period.

(7)

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

(8)

Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores

are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO

scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.

(9)

Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from

three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included

in the 620 or below category.

(10)

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

(11)

Includes charges incurred as a result of restructuring activities.

** 

Not meaningful.


CAPITAL ONE FINANCIAL CORPORATION (COF)

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



Basel III Standardized Approach

(Dollars in millions, except as noted)


March 31,

2022


December 31,

2021


September 30,

2021


June 30,

2021


March 31,

2021

Regulatory Capital Metrics











Common equity excluding AOCI


$        57,390


$        58,206


$        58,705


$         58,969


$        57,607

Adjustments:











AOCI, net of tax(2)


(20)


(23)


(33)


(5)


(13)

Goodwill, net of related deferred tax liabilities


(14,559)


(14,562)


(14,435)


(14,440)


(14,444)

Intangible assets, net of related deferred tax liabilities


(94)


(108)


(84)


(76)


(81)

Other


(16)


(12)


(15)


(16)


(18)

Common equity Tier 1 capital


$        42,701


$        43,501


$        44,138


$         44,432


$        43,051

Tier 1 capital


$        47,547


$        48,346


$        50,049


$         50,920


$        47,898

Total capital(3)


55,059


56,089


57,851


57,932


54,780

Risk-weighted assets


336,739


332,673


318,729


307,334


295,209

Adjusted average assets(4)


418,957


415,141


411,216


411,032


408,596

Capital Ratios











Common equity Tier 1 capital(5)


12.7%


13.1%


13.8%


14.5%


14.6%

Tier 1 capital(6)


14.1


14.5


15.7


16.6


16.2

Total capital(7)


16.4


16.9


18.2


18.8


18.6

Tier 1 leverage(4)


11.3


11.6


12.2


12.4


11.7

Tangible common equity ("TCE")(8)


8.7


9.9


10.4


10.6


10.1

Reconciliation of Non-GAAP Measures


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



2022

Q1


2021

Q4


2021

Q3


2021

Q2


2021

Q1

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






Adjusted diluted EPS:











Net income available to common stockholders (GAAP)


$            2,318


$            2,296


$           2,987


$           3,446


$           3,236

Legal reserve activity, including insurance recoveries


—


—


45


55


—

Adjusted net income available to common stockholders before income tax impacts (non-GAAP)


2,318


2,296


3,032


3,501


3,236

Income tax impacts


—


—


(11)


(13)


—

Adjusted net income available to common stockholders (non-GAAP)


$            2,318


$            2,296


$           3,021


$           3,488


$           3,236












Diluted weighted-average common shares outstanding (in millions) (GAAP)


412.2


424.3


440.5


452.3


460.1












Diluted EPS (GAAP)


$              5.62


$              5.41


$             6.78


$             7.62


$             7.03

Impact of adjustments noted above


—


—


0.08


0.09


—

Adjusted diluted EPS (non-GAAP)


$              5.62


$              5.41


$             6.86


$             7.71


$             7.03












Adjusted efficiency ratio:











Non-interest expense (GAAP)


$            4,551


$            4,678


$           4,186


$           3,966


$           3,740

Legal reserve activity, including insurance recoveries


—


—


(45)


(55)


—

Adjusted non-interest expense (non-GAAP)


$            4,551


$            4,678


$           4,141


$           3,911


$           3,740












Total net revenue (GAAP)


$            8,173


$            8,118


$           7,830


$           7,374


$           7,113












Efficiency ratio (GAAP)


55.68%


57.63%


53.46%


53.78%


52.58%

Impact of adjustments noted above


—


—


          (57) bps


          (74) bps


—

Adjusted efficiency ratio (non-GAAP)


55.68%


57.63%


52.89%


53.04%


52.58%












Adjusted operating efficiency ratio:











Operating expense (GAAP)


$            3,633


$            3,679


$           3,435


$           3,346


$           3,239

Legal reserve activity, including insurance recoveries


—


—


(45)


(55)


—

Adjusted operating expense (non-GAAP)


$            3,633


$            3,679


$           3,390


$           3,291


$           3,239












Total net revenue (GAAP)


$            8,173


$            8,118


$           7,830


$           7,374


$           7,113












Operating efficiency ratio (GAAP)


44.45%


45.32%


43.87%


45.38%


45.54%

Impact of adjustments noted above


—


—


          (57) bps


          (75) bps


—

Adjusted operating efficiency ratio (non-GAAP)


44.45%


45.32%


43.30%


44.63%


45.54%

Reconciliation of Non-GAAP Measures


The following non-GAAP measures consist of TCE, tangible assets and metrics computed using these amounts, which include tangible book value per common
share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that
management uses in assessing capital adequacy and the level of returns generated. While our non-GAAP measures are widely used by investors, analysts and
bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly-titled measures reported by other
companies. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.



2022


2021


2021


2021


2021

(Dollars in millions)


Q1


Q4


Q3


Q2


Q1

Tangible Common Equity (Period-End)











Stockholders' equity


$          56,345


$          61,029


$          63,544


$          64,624


$          61,188

Goodwill and intangible assets(9)


(14,883)


(14,907)


(14,766)


(14,774)


(14,789)

Noncumulative perpetual preferred stock


(4,845)


(4,845)


(5,912)


(6,488)


(4,847)

Tangible common equity


$          36,617


$          41,277


$          42,866


$          43,362


$          41,552

Tangible Common Equity (Average)











Stockholders' equity


$          59,437


$          62,498


$          64,682


$          62,376


$          60,623

Goodwill and intangible assets(9)


(14,904)


(14,847)


(14,777)


(14,788)


(14,807)

Noncumulative perpetual preferred stock


(4,845)


(5,552)


(6,452)


(5,491)


(4,847)

Tangible common equity


$          39,688


$          42,099


$          43,453


$          42,097


$          40,969

Tangible Assets (Period-End)











Total assets


$        434,195


$        432,381


$        425,377


$        423,420


$        425,175

Goodwill and intangible assets(9)


(14,883)


(14,907)


(14,766)


(14,774)


(14,789)

Tangible assets


$        419,312


$        417,474


$        410,611


$        408,646


$        410,386

Tangible Assets (Average)











Total assets


$        430,372


$        427,845


$        424,506


$        424,099


$        421,808

Goodwill and intangible assets(9)


(14,904)


(14,847)


(14,777)


(14,788)


(14,807)

Tangible assets


$        415,468


$        412,998


$        409,729


$        409,311


$        407,001

__________

(1)

Regulatory capital metrics and capital ratios as of March 31, 2022 are preliminary and therefore subject to change.

(2)

Excludes certain components of AOCI as permitted under the Tailoring Rules.

(3)

Total capital equals the sum of Tier 1 capital and Tier 2 capital.

(4)

Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that are deducted from

Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by

adjusted average assets.

(5)

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

(6)

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

(7)

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

(8)

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

(9)

Includes impact of related deferred taxes.

SOURCE Capital One Financial Corporation