Capital One Reports Second Quarter 2015 Net Income of $863 million, or $1.50 per share

EPS from Continuing Operations of $1.48; EPS excluding Adjusting Items of $1.78

Jul 23, 2015, 16:05 ET from Capital One Financial Corporation

MCLEAN, Va., July 23, 2015 /PRNewswire/ --  Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2015 of $863 million, or $1.50 per diluted common share, compared to the first quarter of 2015 with net income of $1.2 billion, or $2.00 per diluted common share, and the second quarter of 2014 with net income of $1.2 billion, or $2.04 per diluted common share. Net income for the second quarter of 2015, adjusted for the impact of restructuring charges of $147 million and a build in the U.K. PPI reserve of $78 million, was $1.0 billion or $1.78 per diluted common share.

"Capital One continues to deliver attractive risk-adjusted returns today and invest to sustain growth and returns over the long term," said Richard D. Fairbank, Chair and Chief Executive Officer. "We remain compelled by the opportunity, need, and urgency of digital transformation, and we continue to see growth opportunities across our businesses, particularly in Domestic Card. Capital One is well positioned to sustain attractive shareholder returns over the long term."

All comparisons below are for the second quarter of 2015 compared with the first quarter of 2015 unless otherwise noted.

Second Quarter 2015 Income Statement Summary:

  • Total net revenue remained flat at $5.7 billion, including ($37) million of contra-revenue from a build in the U.K. PPI reserve.
  • Total non-interest expense increased 8 percent to $3.3 billion:
    • 3 percent increase in marketing.
    • 10 percent increase in operating expense, including $147 million in restructuring charges and a build of $41 million in the U.K. PPI reserve.
  • Pre-provision earnings decreased 9 percent to $2.4 billion.
  • Provision for credit losses increased 21 percent to $1.1 billion.
  • Mortgage representation & warranty benefit of $36 million, including $27 million ($17 million net of tax) in discontinued operations.
  • Efficiency ratio of 58.30 percent; Efficiency ratio excluding restructuring charges and a build in the U.K. PPI reserve of 54.63 percent.

Second Quarter 2015 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.1 percent at June 30, 2015.
  • Net interest margin of 6.56 percent, down 1 basis points; Net interest margin excluding the contra-revenue impact of the build in the U.K. PPI reserve of 6.58 percent.
  • Period-end loans held for investment in the quarter increased $5.7 billion, or 3 percent, to $209.7 billion.
    • Domestic Card period-end loans increased $4.9 billion, or 7 percent, to $79.0 billion.
    • Consumer Banking period-end loans decreased $203 million, or less than 1 percent, to $71.2 billion:
      • Auto period-end loans increased $1.1 billion, or 3 percent, to $40.0 billion.
      • Home loans period-end loans decreased $1.3 billion, or 5 percent, to $27.6 billion, driven by run-off of acquired portfolios.
    • Commercial Banking period-end loans increased $490 million, or less than 1 percent, to $51.2 billion.
  • Average loans held for investment in the quarter increased $1.1 billion, or less than 1 percent, to $206.3 billion.
    • Domestic Card average loans increased $1.2 billion, or 2 percent, to $75.9 billion.
    • Consumer Banking average loans decreased $74 million, or less than 1 percent, to $71.4 billion:
      • Auto average loans increased $1.2 billion, or 3 percent, to $39.5 billion.
      • Home loans average loans decreased by $1.2 billion, or 4 percent, to $28.3 billion, driven by run-off of acquired portfolios.
    • Commercial Banking average loans decreased $94 million, or less than 1 percent, to $51.0 billion.
  • Period-end total deposits decreased $1.7 billion, or less than 1 percent, to $208.8 billion, while average deposits increased $1.3 billion to $209.1 billion.
  • Interest-bearing deposit rate remained relatively flat at 0.59 percent.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 23, 2015 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us", then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through August 3, 2015 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release are forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2014.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $208.8 billion in deposits and $310.5 billion in total assets as of June 30, 2015. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement

Second Quarter 2015(1) 

Table of Contents

Capital One Financial Corporation Consolidated Results

Page

Table 1:

Financial Summary—Consolidated

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 Quarterly Report on Form 10-Q for the period ended June 30, 2015 once it is filed with the Securities and Exchange Commission.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated(1) 

2015 Q2 vs.

Six Months Ended June 30,

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

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

2015 Q1

2014 Q2

2015

2014

2015 vs. 2014

Income Statement

Net interest income

$

4,537

$

4,576

$

4,656

$

4,497

$

4,315

(1)%

5%

$

9,113

$

8,665

5%

Non-interest income(2)

1,135

1,071

1,157

1,142

1,153

6

(2)

2,206

2,173

2

Total net revenue(3)

5,672

5,647

5,813

5,639

5,468

4

11,319

10,838

4

Provision for credit losses

1,129

935

1,109

993

704

21

60

2,064

1,439

43

Non-interest expense:

     Marketing

387

375

509

392

335

3

16

762

660

15

     Amortization of intangibles

111

110

123

130

136

1

(18)

221

279

(21)

     Operating expenses(4)

2,809

2,564

2,652

2,463

2,508

10

12

5,373

4,972

8

Total non-interest expense

3,307

3,049

3,284

2,985

2,979

8

11

6,356

5,911

8

Income from continuing operations before income taxes

1,236

1,663

1,420

1,661

1,785

(26)

(31)

2,899

3,488

(17)

Income tax provision

384

529

450

536

581

(27)

(34)

913

1,160

(21)

Income from continuing operations, net of tax

852

1,134

970

1,125

1,204

(25)

(29)

1,986

2,328

(15)

Income (loss) from discontinued operations, net of tax(2)

11

19

29

(44)

(10)

(42)

**

30

20

50

Net income

863

1,153

999

1,081

1,194

(25)

(28)

2,016

2,348

(14)

Dividends and undistributed earnings allocated to participating securities(5)

(4)

(6)

(4)

(5)

(4)

(33)

(10)

(9)

11

Preferred stock dividends(5)

(29)

(32)

(21)

(20)

(13)

(9)

123

(61)

(26)

135

Net income available to common stockholders

$

830

$

1,115

$

974

$

1,056

$

1,177

(26)

(29)

$

1,945

$

2,313

(16)

Common Share Statistics

Basic earnings per common share:(5)

     Net income from continuing operations

$

1.50

$

2.00

$

1.71

$

1.97

$

2.09

(25)%

(28)%

$

3.49

$

4.03

(13)%

     Income (loss) from discontinued operations

0.02

0.03

0.05

(0.08)

(0.02)

(33)

**

0.06

0.03

100

     Net income per basic common share

$

1.52

$

2.03

$

1.76

$

1.89

$

2.07

(25)

(27)

$

3.55

$

4.06

(13)

Diluted earnings per common share:(5)

     Net income from continuing operations

$

1.48

$

1.97

$

1.68

$

1.94

$

2.06

(25)

(28)

$

3.45

$

3.97

(13)

     Income (loss) from discontinued operations

0.02

0.03

0.05

(0.08)

(0.02)

(33)

**

0.06

0.03

100

     Net income per diluted common share(6)

$

1.50

$

2.00

$

1.73

$

1.86

$

2.04

(25)

(26)

$

3.51

$

4.00

(12)

Weighted-average common shares outstanding (in millions):

     Basic

545.6

550.2

554.3

559.9

567.5

(1)

(4)

548.0

569.2

(4)

     Diluted

552.0

557.2

561.8

567.9

577.6

(1)

(4)

554.7

578.9

(4)

Common shares outstanding (period end, in millions)

542.5

548.0

553.4

558.5

561.8

(1)

(3)

542.5

561.8

(3)

Dividends paid per common share

$

0.40

$

0.30

$

0.30

$

0.30

$

0.30

33

33

$

0.70

$

0.60

17

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

52.74

52.19

50.32

48.72

47.90

1

10

52.74

47.90

10

2015 Q2 vs.

Six Months Ended June 30,

(Dollars in millions) (unaudited)

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

2015 Q1

2014 Q2

2015

2014

2015 vs. 2014

Balance Sheet (Period End)

Loans held for investment(8)

$

209,705

$

203,978

$

208,316

$

201,592

$

198,528

3%

6%

$

209,705

$

198,528

6%

Interest-earning assets

280,137

275,837

277,849

270,001

266,720

2

5

280,137

266,720

5

Total assets

310,510

306,224

308,167

299,640

297,434

1

4

310,510

297,434

4

Interest-bearing deposits

183,657

185,208

180,467

178,876

180,970

(1)

1

183,657

180,970

1

Total deposits

208,780

210,440

205,548

204,264

205,890

(1)

1

208,780

205,890

1

Borrowings

45,766

41,029

48,457

42,243

39,114

12

17

45,766

39,114

17

Common equity

43,849

43,908

43,231

42,682

42,477

3

43,849

42,477

3

Total stockholders' equity

46,659

45,730

45,053

44,018

43,815

2

6

46,659

43,815

6

Balance Sheet (Average Balances)

Loans held for investment(8)

$

206,337

$

205,194

$

203,436

$

199,422

$

194,996

1%

6%

$

205,768

$

194,362

6%

Interest-earning assets

276,585

278,427

273,436

268,890

263,570

(1)

5

277,501

263,119

5

Total assets

307,206

309,401

304,153

298,913

294,089

(1)

4

308,295

293,798

5

Interest-bearing deposits

183,946

182,998

179,401

179,928

182,053

1

1

183,475

182,431

1

Total deposits

209,143

207,851

205,355

205,199

206,315

1

1

208,501

206,080

1

Borrowings

41,650

46,082

43,479

40,314

35,658

(10)

17

43,854

35,817

22

Common equity

44,878

44,575

43,895

43,489

42,797

1

5

44,727

42,408

5

Total stockholders' equity

47,255

46,397

45,576

44,827

43,767

2

8

46,828

43,320

8

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated(1) 

2015 Q2 vs.

Six Months Ended June 30,

(Dollars in millions except as noted) (unaudited)

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

2015 Q1

2014 Q2

2015

2014

2015 vs. 2014

Performance Metrics

Net interest income growth (quarter over quarter)

(1)%

(2)%

4%

4%

(1)%

**

**

5%

(5)%

**

Non-interest income growth (quarter over quarter)

6

(7)

1

(1)

13

**

**

2

5

**

Total net revenue growth (quarter over quarter)

(3)

3

3

2

**

**

4

(3)

**

Total net revenue margin(9)

8.20

8.11

8.50

8.39

8.30

9

bps

(10)

bps

8.16

8.24

(8)

bps

Net interest margin(10)

6.56

6.57

6.81

6.69

6.55

(1)

1

6.57

6.59

(2)

Return on average assets

1.11

1.47

1.28

1.51

1.64

(36)

(53)

1.29

1.58

(29)

Return on average tangible assets(11)

1.17

1.54

1.34

1.59

1.73

(37)

(56)

1.36

1.67

(31)

Return on average common equity(12)

7.30

9.84

8.61

10.12

11.09

(254)

(379)

8.56

10.81

(225)

Return on average tangible common equity(13)

11.06

15.00

13.28

15.73

17.47

(394)

(641)

13.01

17.15

(414)

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

6.41

5.94

6.46

5.99

6.11

47

30

6.18

6.08

10

Efficiency ratio(14)

58.30

53.99

56.49

52.93

54.48

431

382

56.15

54.54

161

Effective income tax rate for continuing operations

31.1

31.8

31.7

32.3

32.5

(70)

(140)

31.5

33.3

(180)

Employees (in thousands), period end

47.5

47.0

46.0

44.9

44.6

1%

7%

47.5

44.6

7%

Credit Quality Metrics(8)

Allowance for loan and lease losses

$

4,676

$

4,405

$

4,383

$

4,212

$

3,998

6%

17%

$

4,676

$

3,998

17%

Allowance as a percentage of loans held for investment

2.23%

2.16%

2.10%

2.09%

2.01%

7

bps

22

bps

2.23%

2.01%

22

bps

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

2.46

2.41

2.36

2.37

2.30

5

16

2.46

2.30

16

Net charge-offs

$

846

$

881

$

915

$

756

$

812

(4)%

4%

$

1,727

$

1,743

(1)%

Net charge-off rate(15)

1.64%

1.72%

1.80%

1.52%

1.67%

(8)

bps

(3)

bps

1.68%

1.79%

(11)

bps

Net charge-off rate (excluding acquired loans)(15)

1.83

1.93

2.04

1.73

1.93

(10)

(10)

1.88

2.08

(20)

30+ day performing delinquency rate

2.33

2.32

2.62

2.46

2.24

1

9

2.33

2.24

9

30+ day performing delinquency rate (excluding acquired loans)

2.59

2.61

2.95

2.81

2.58

(2)

1

2.59

2.58

1

30+ day delinquency rate

2.65

2.58

2.91

2.76

2.53

7

12

2.65

2.53

12

30+ day delinquency rate (excluding acquired loans)

2.94

2.90

3.28

3.14

2.91

4

3

2.94

2.91

3

Capital Ratios(16)

Common equity Tier 1 capital ratio 

12.1%

12.5%

12.5%

12.7%

12.7%

(40)

bps

(60)

bps

12.1%

12.7%

(60)

bps

Tier 1 risk-based capital ratio

13.3

13.2

13.2

13.3

13.3

10

13.3

13.3

Total risk-based capital ratio

15.1

15.1

15.1

15.2

15.4

(30)

15.1

15.4

(30)

Tier 1 leverage ratio

11.1

10.7

10.8

10.6

10.7

40

40

11.1

10.7

40

Tangible common equity ("TCE") ratio(17)

9.7

9.8

9.5

9.6

9.5

(10)

20

9.7

9.5

20

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income

Three Months Ended

2015 Q2 vs.

Six Months Ended June 30,

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

2015 Q2

2015 Q1

2014 Q2

2015 Q1

2014 Q2

2015

2014

2015 vs. 2014

Interest income:

     Loans, including loans held for sale

$

4,531

$

4,540

$

4,279

6%

$

9,071

$

8,586

6%

     Investment securities

382

406

409

(6)%

(7)

788

825

(4)

     Other

24

28

24

(14)

52

54

(4)

Total interest income

4,937

4,974

4,712

(1)

5

9,911

9,465

5

Interest expense:

     Deposits

272

271

272

543

548

(1)

     Securitized debt obligations

36

33

39

9

(8)

69

77

(10)

     Senior and subordinated notes

80

79

78

1

3

159

155

3

     Other borrowings

12

15

8

(20)

50

27

20

35

Total interest expense

400

398

397

1

1

798

800

Net interest income

4,537

4,576

4,315

(1)

5

9,113

8,665

5

     Provision for credit losses

1,129

935

704

21

60

2,064

1,439

43

Net interest income after provision for credit losses

3,408

3,641

3,611

(6)

(6)

7,049

7,226

(2)

Non-interest income:(2)

     Service charges and other customer-related fees

429

437

460

(2)

(7)

866

934

(7)

     Interchange fees, net

567

496

535

14

6

1,063

975

9

     Net other-than-temporary impairment recognized in earnings

(7)

(15)

(1)

(53)

600

(22)

(6)

267

     Other

146

153

159

(5)

(8)

299

270

11

Total non-interest income

1,135

1,071

1,153

6

(2)

2,206

2,173

2

Non-interest expense:

     Salaries and associate benefits

1,360

1,211

1,125

12

21

2,571

2,286

12

     Occupancy and equipment

439

435

447

1

(2)

874

852

3

     Marketing

387

375

335

3

16

762

660

15

     Professional services

334

296

296

13

13

630

583

8

     Communications and data processing

208

202

203

3

2

410

399

3

     Amortization of intangibles

111

110

136

1

(18)

221

279

(21)

     Other

468

420

437

11

7

888

852

4

Total non-interest expense

3,307

3,049

2,979

8

11

6,356

5,911

8

Income from continuing operations before income taxes

1,236

1,663

1,785

(26)

(31)

2,899

3,488

(17)

Income tax provision

384

529

581

(27)

(34)

913

1,160

(21)

Income from continuing operations, net of tax

852

1,134

1,204

(25)

(29)

1,986

2,328

(15)

Income (loss) from discontinued operations, net of tax(2)

11

19

(10)

(42)

   **

30

20

50

Net income

863

1,153

1,194

(25)

(28)

2,016

2,348

(14)

Dividends and undistributed earnings allocated to participating securities(5)

(4)

(6)

(4)

(33)

(10)

(9)

11

Preferred stock dividends(5)

(29)

(32)

(13)

(9)

123

(61)

(26)

135

Net income available to common stockholders

$

830

$

1,115

$

1,177

(26)

(29)

$

1,945

$

2,313

(16)

Three Months Ended

2015 Q2 vs.

Six Months Ended June 30,

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

2015 Q2

2015 Q1

2014 Q2

2015 Q1

2014 Q2

2015

2014

2015 vs. 2014

Basic earnings per common share:(5)

Net income from continuing operations

$

1.50

$

2.00

$

2.09

(25)%

(28)%

$

3.49

$

4.03

(13)%

Income (loss) from discontinued operations

0.02

0.03

(0.02)

(33)

**

0.06

0.03

100

Net income per basic common share

$

1.52

$

2.03

$

2.07

(25)

(27)

$

3.55

$

4.06

(13)

Diluted earnings per common share:(5)

Net income from continuing operations

$

1.48

$

1.97

$

2.06

(25)

(28)

$

3.45

$

3.97

(13)

Income (loss) from discontinued operations

0.02

0.03

(0.02)

(33)

**

0.06

0.03

100

Net income per diluted common share(6)

$

1.50

$

2.00

$

2.04

(25)

(26)

$

3.51

$

4.00

(12)

Weighted average common shares outstanding (in millions):

Basic common shares

545.6

550.2

567.5

(1)

(4)

548.0

569.2

(4)

Diluted common shares

552.0

557.2

577.6

(1)

(4)

554.7

578.9

(4)

Dividends paid per common share

$

0.40

$

0.30

$

0.30

33

33

$

0.70

$

0.60

17

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets(1) 

June 30, 2015 vs.

(Dollars in millions) (unaudited)

June 30, 2015

December 31, 2014

June 30, 2014

December 31, 2014

June 30, 2014

Assets:

Cash and cash equivalents:

     Cash and due from banks

$

2,879

$

3,147

$

3,598

(9)%

(20)%

     Interest-bearing deposits with banks

4,275

4,095

2,954

4

45

     Federal funds sold and securities purchased under agreements to resell

2

0

180

**   

(99)

Total cash and cash equivalents

7,156

7,242

6,732

(1)

6

Restricted cash for securitization investors

253

234

361

8

(30)

Securities available for sale, at fair value

39,136

39,508

41,113

(1)

(5)

Securities held to maturity, at carrying value

23,668

22,500

20,688

5

14

Loans held for investment:(8)

     Unsecuritized loans held for investment

175,407

171,771

161,224

2

9

     Restricted loans for securitization investors

34,298

36,545

37,304

(6)

(8)

Total loans held for investment

209,705

208,316

198,528

1

6

     Allowance for loan and lease losses

(4,676)

(4,383)

(3,998)

7

17

Net loans held for investment

205,029

203,933

194,530

1

5

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

1,066

626

709

70

50

Premises and equipment, net

3,602

3,685

3,764

(2)

(4)

Interest receivable

1,056

1,079

1,012

(2)

4

Goodwill

13,984

13,978

13,977

Other assets

15,560

15,382

14,548

1

7

Total assets

$

310,510

$

308,167

$

297,434

1

4

June 30, 2015 vs.

(Dollars in millions) (unaudited)

June 30, 2015

December 31, 2014

June 30, 2014

December 31, 2014

June 30, 2014

Liabilities:

Interest payable

$

262

$

254

$

234

3%

12%

Deposits:

     Non-interest bearing deposits

25,123

25,081

24,920

1

     Interest-bearing deposits

183,657

180,467

180,970

2

1

Total deposits

208,780

205,548

205,890

2

1

Securitized debt obligations

13,785

11,624

10,010

19

38

Other debt:

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

1,888

880

2,030

115

(7)

     Senior and subordinated notes

19,987

18,684

16,628

7

20

     Other borrowings

10,106

17,269

10,446

(41)

(3)

Total other debt

31,981

36,833

29,104

(13)

10

Other liabilities

9,043

8,855

8,381

2

8

Total liabilities

263,851

263,114

253,619

4

Stockholders' equity:

Preferred stock

0

0

0

Common stock

6

6

6

Additional paid-in capital, net

29,063

27,869

27,210

4

7

Retained earnings

25,540

23,973

22,270

7

15

Accumulated other comprehensive income ("AOCI")

(397)

(430)

(371)

(8)

7

Treasury stock, at cost

(7,553)

(6,365)

(5,300)

19

43

Total stockholders' equity

46,659

45,053

43,815

4

6

Total liabilities and stockholders' equity

$

310,510

$

308,167

$

297,434

1

4

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

   **

Not meaningful.

(1) 

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

(2) 

Mortgage representation and warranty reserve is comprised of the following:

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

(Dollars in millions) (unaudited)

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

     Recorded in continuing operations

$

(9)

$

1

$

(11)

$

$

(29)

     Recorded in discontinued operations

(27)

(19)

(41)

70

11

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

$

(36)

$

(18)

$

(52)

$

70

$

(18)

Historically, the majority of the provision for representation and warranty losses is included net of tax in discontinued operations, with the remaining amount included before income taxes in non-interest income. The mortgage representation and warranty reserve was $636 million as of June 30, 2015, $731 million as of December 31, 2014 and $1.0 billion as of June 30, 2014.

(3) 

Total net revenue was reduced by $168 million in Q2 2015, $147 million in Q1 2015, $165 million in Q4 2014, $164 million in Q3 2014 and $153 million in Q2 2014 for the estimated uncollectible amount of billed finance charges and fees.

(4) 

Includes acquisition-related costs of $8 million in Q2 2015, $7 million in Q1 2015, $10 million in Q4 2014, $13 million in Q3 2014 and $18 million in Q2 2014. Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense.

(5) 

Dividends and undistributed earnings allocated to participating securities, earnings per share, and preferred stock dividends are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.

(6)

We recorded restructuring charges of $147 million under our existing benefit plans as a result of the realignment of our workforce, and a $78 million build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve"), reflecting our updated estimate of future complaint levels. We report the following non-GAAP financial measures that we believe are helpful for investors to understand the effect of these items on our reported results as they provide an additional presentation of our performance. The table below presents a reconciliation of our reported results to these non-GAAP financial measures:  

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

Pretax Income

Net Income

Net Income Available to Common Stockholders

Diluted EPS

Reported results

$

1,236

$

863

$

830

$

1.50

Restructuring charges and build in the U.K. PPI Reserve

225

155

155

0.28

Adjusted results

$

1,461

$

1,018

$

985

$

1.78

(7) 

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

(8) 

Loans held for investment includes acquired loans. We use the term "acquired loans" to refer to a certain portion of the loans acquired in the following transactions: (i) the February 2012 transaction where we acquired the assets and assumed the liabilities of substantially all of ING Direct; (ii) the February 2009 Chevy Chase Bank acquisition; and (iii) the May 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States. These loans were recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3", or Accounting Standard Codification 310-30). The table below presents amounts related to acquired loans accounted for under SOP 03-3:

(Dollars in millions) (unaudited)

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

Acquired loans accounted for under SOP 03-3:

     Period-end unpaid principal balance

$

21,841

$

23,248

$

24,473

$

25,726

$

27,117

     Period-end loans held for investment

20,970

22,334

23,500

24,685

26,019

     Average loans held for investment

21,440

22,773

23,907

25,104

26,491

(9) 

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

(10) 

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

(11) 

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

(12) 

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

(13) 

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

(14) 

Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the restructuring charges and build in the U.K. PPI Reserve discussed above in Footnote 6, was 54.63% for Q2 2015.

(15) 

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

(16) 

Ratios as of the end of Q2 2015 are preliminary and therefore subject to change. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.

(17) 

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

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

2015 Q2

2015 Q1

2014 Q2

(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

$

207,335

$

4,531

8.74%

$

205,854

$

4,540

8.82%

$

195,322

$

4,279

8.76%

Investment securities

63,771

382

2.40

63,181

406

2.57

62,518

409

2.62

Cash equivalents and other

5,479

24

1.75

9,392

28

1.19

5,730

24

1.68

Total interest-earning assets

$

276,585

$

4,937

7.14

$

278,427

$

4,974

7.15

$

263,570

$

4,712

7.15

Interest-bearing liabilities:

Interest-bearing deposits

$

183,946

$

272

0.59

$

182,998

$

271

0.59

$

182,053

$

272

0.60

Securitized debt obligations

13,219

36

1.09

11,563

33

1.14

10,731

39

1.45

Senior and subordinated notes

20,336

80

1.57

20,595

79

1.53

16,004

78

1.95

Other borrowings and liabilities

8,857

12

0.54

14,721

15

0.41

8,923

8

0.36

Total interest-bearing liabilities

$

226,358

$

400

0.71

$

229,877

$

398

0.69

$

217,711

$

397

0.73

Net interest income/spread

$

4,537

6.43

$

4,576

6.46

$

4,315

6.42

Impact of non-interest bearing funding

0.13

0.11

0.13

Net interest margin

6.56%

6.57%

6.55%

Six Months Ended June 30,

2015

2014

(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

$

206,598

$

9,071

8.78%

$

194,674

$

8,586

8.82%

Investment securities

63,477

788

2.48

62,322

825

2.65

Cash equivalents and other

7,426

52

1.40

6,123

54

1.76

Total interest-earning assets

$

277,501

$

9,911

7.14

$

263,119

$

9,465

7.19

Interest-bearing liabilities:

Interest-bearing deposits

$

183,475

$

543

0.59

$

182,431

$

548

0.60

Securitized debt obligations

12,396

69

1.11

10,576

77

1.46

Senior and subordinated notes

20,465

159

1.55

15,088

155

2.05

Other borrowings and liabilities

11,771

27

0.46

10,153

20

0.39

Total interest-bearing liabilities

$

228,107

$

798

0.70

$

218,248

$

800

0.73

Net interest income/spread

$

9,113

6.44

$

8,665

6.46

Impact of non-interest bearing funding

0.13

0.13

Net interest margin

6.57%

6.59%

__________

(1) 

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

10

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics

2015 Q2 vs.

Six Months Ended June 30,

(Dollars in millions) (unaudited)

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

2015 Q1

2014 Q2

2015

2014

2015 vs.

2014

Loans Held For Investment (Period End)

Credit card:

   Domestic credit card

$

78,984

$

74,131

$

77,704

$

73,143

$

71,165

7%

11%

$

78,984

$

71,165

11%

   International credit card

8,219

7,623

8,172

7,488

7,853

8

5

8,219

7,853

5

Total credit card

87,203

81,754

85,876

80,631

79,018

7

10

87,203

79,018

10

Consumer banking:

   Auto

39,991

38,937

37,824

36,254

34,792

3

15

39,991

34,792

15

   Home loan

27,595

28,905

30,035

31,203

32,644

(5)

(15)

27,595

32,644

(15)

   Retail banking

3,590

3,537

3,580

3,604

3,626

1

(1)

3,590

3,626

(1)

Total consumer banking

71,176

71,379

71,439

71,061

71,062

71,176

71,062

Commercial banking:

   Commercial and multifamily real estate

22,886

22,831

23,137

22,895

22,040

4

22,886

22,040

4

   Commercial and industrial

27,660

27,172

26,972

26,071

25,402

2

9

27,660

25,402

9

Total commercial lending

50,546

50,003

50,109

48,966

47,442

1

7

50,546

47,442

7

   Small-ticket commercial real estate

685

738

781

822

879

(7)

(22)

685

879

(22)

Total commercial banking

51,231

50,741

50,890

49,788

48,321

1

6

51,231

48,321

6

Other loans

95

104

111

112

127

(9)

(25)

95

127

(25)

Total loans held for investment

$

209,705

$

203,978

$

208,316

$

201,592

$

198,528

3

6

$

209,705

$

198,528

6

Loans Held For Investment (Average)

Credit card:

   Domestic credit card

$

75,924

$

74,770

$

74,026

$

71,784

$

69,376

2%

9%

$

75,349

$

69,592

8%

   International credit card

7,977

7,811

7,714

7,710

7,621

2

5

7,895

7,656

3

Total credit card

83,901

82,581

81,740

79,494

76,997

2

9

83,244

77,248

8

Consumer banking:

   Auto

39,546

38,387

37,072

35,584

33,972

3

16

38,970

33,184

17

   Home loan

28,251

29,493

30,604

31,859

33,299

(4)

(15)

28,869

33,969

(15)

   Retail banking

3,570

3,561

3,578

3,605

3,613

(1)

3,565

3,621

(2)

Total consumer banking

71,367

71,441

71,254

71,048

70,884

1

71,404

70,774

1

Commercial banking:

   Commercial and multifamily real estate

22,853

23,120

23,129

22,409

21,484

(1)

6

22,985

21,224

8

   Commercial and industrial

27,414

27,190

26,409

25,512

24,611

1

11

27,303

24,079

13

Total commercial lending

50,267

50,310

49,538

47,921

46,095

9

50,288

45,303

11

   Small-ticket commercial real estate

709

760

801

845

896

(7)

(21)

735

914

(20)

Total commercial banking

50,976

51,070

50,339

48,766

46,991

8

51,023

46,217

10

Other loans

93

102

103

114

124

(9)

(25)

97

123

(21)

Total average loans held for investment

$

206,337

$

205,194

$

203,436

$

199,422

$

194,996

1

6

$

205,768

$

194,362

6

Net Charge-off Rates

Credit card:

   Domestic credit card

3.42%

3.55%

3.39%

2.83%

3.52%

(13)

bps

(10)

bps

3.49%

3.77%

(28)

bps

   International credit card

2.65

2.80

3.34

3.32

3.93

(15)

(128)

2.73

4.05

(132)

Total credit card

3.35

3.48

3.38

2.88

3.56

(13)

(21)

3.42

3.79

(37)

 

 

2015 Q2 vs.

Six Months Ended June 30,

(Dollars in millions) (unaudited)

2015

Q2

2015

Q1

2014

Q4

2014

Q3

2014

Q2

2015

Q1

2014

Q2

2015

2014

2015 vs. 2014

Consumer banking:

   Auto

1.22%

1.55%

2.14%

1.98%

1.31%

(33)

bps

(9)

bps

1.38%

1.48%

(10)

bps

   Home loan

0.04

0.03

0.07

0.02

0.05

1

(1)

0.03

0.06

(3)

   Retail banking

1.39

0.96

1.28

1.36

0.70

43

69

1.18

0.82

36

Total consumer banking

0.76

0.89

1.20

1.07

0.69

(13)

7

0.83

0.76

7

Commercial banking:

   Commercial and multifamily real estate

(0.04)

(0.03)

0.01

(0.10)

(1)

(4)

(0.03)

(3)

   Commercial and industrial

0.13

0.05

0.10

(0.01)

0.04

8

9

0.09

0.03

6

Total commercial lending

0.05

0.01

0.06

(0.05)

0.02

4

3

0.03

0.02

1

   Small-ticket commercial real estate

0.15

0.47

0.80

(0.01)

0.61

(32)

(46)

0.32

0.64

(32)

Total commercial banking

0.05

0.02

0.07

(0.05)

0.03

3

2

0.04

0.03

1

Other loans

(0.79)

1.56

0.47

(0.61)

2.18

**

**

0.44

0.77

(33)

Total net charge-offs

1.64

1.72

1.80

1.52

1.67

(8)

(3)

1.68

1.79

(11)

30+ Day Performing Delinquency Rates

Credit card:

   Domestic credit card

2.84%

2.92%

3.27%

3.21%

2.83%

(8)

bps

1

bps

2.84%

2.83%

1

bps

   International credit card

2.65

2.81

2.94

3.34

3.40

(16)

(75)

2.65

3.40

(75)

Total credit card

2.82

2.91

3.24

3.22

2.89

(9)

(7)

2.82

2.89

(7)

Consumer banking:

   Auto

5.58

5.21

6.57

6.14

5.77

37

(19)

5.58

5.77

(19)

   Home loan

0.17

0.18

0.21

0.14

0.13

(1)

4

0.17

0.13

4

   Retail banking

0.66

0.60

0.64

0.53

0.48

6

18

0.66

0.48

18

Total consumer banking

3.24

2.95

3.60

3.22

2.91

29

33

3.24

2.91

33

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

Credit card:

   International credit card

0.83%

0.84%

0.86%

0.98%

1.03%

(1)

bps

(20)

bps

0.83%

1.03%

(20)

bps

Total credit card

0.08

0.08

0.08

0.09

0.10

(2)

0.08

0.10

(2)

Consumer banking:

   Auto

0.40

0.31

0.52

0.49

0.43

9

(3)

0.40

0.43

(3)

   Home loan

1.13

1.16

1.10

1.04

1.07

(3)

6

1.13

1.07

6

   Retail banking

0.79

0.71

0.61

0.54

0.79

8

0.79

0.79

Total consumer banking

0.70

0.67

0.77

0.73

0.75

3

(5)

0.70

0.75

(5)

Commercial banking:

   Commercial and multifamily real estate

0.12

0.18

0.27

0.26

0.29

(6)

(17)

0.12

0.29

(17)

   Commercial and industrial

1.56

0.39

0.39

0.37

0.41

117

115

1.56

0.41

115

Total commercial lending

0.91

0.29

0.33

0.32

0.36

62

55

0.91

0.36

55

   Small-ticket commercial real estate

0.47

1.62

0.96

0.42

1.40

(115)

(93)

0.47

1.40

(93)

Total commercial banking

0.90

0.31

0.34

0.32

0.38

59

52

0.90

0.38

52

Other loans

10.68

13.33

13.37

14.66

12.74

(265)

(206)

10.68

12.74

(206)

Total nonperforming loans

0.50

0.35

0.39

0.38

0.41

15

9

0.50

0.41

9

Total nonperforming assets

0.64

0.50

0.54

0.53

0.55

14

9

0.64

0.55

9

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Financial Summary—Business Segment Results

Three Months Ended June 30, 2015

Six Months Ended June 30, 2015

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Net interest income (expense)

$

4,537

$

2,633

$

1,444

$

466

$

(6)

$

9,113

$

5,299

$

2,878

$

927

$

9

Non-interest income

1,135

845

196

123

(29)

2,206

1,661

354

237

(46)

Total net revenue (loss)(3)

5,672

3,478

1,640

589

(35)

11,319

6,960

3,232

1,164

(37)

Provision for credit losses

1,129

895

185

49

2,064

1,564

391

109

Non-interest expense

3,307

1,857

998

270

182

6,356

3,633

1,968

542

213

Income (loss) from continuing operations before income taxes

1,236

726

457

270

(217)

2,899

1,763

873

513

(250)

Income tax provision (benefit)

384

263

166

98

(143)

913

632

316

186

(221)

Income (loss) from continuing operations, net of tax

$

852

$

463

$

291

$

172

$

(74)

$

1,986

$

1,131

$

557

$

327

$

(29)

Three Months Ended March 31, 2015

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Net interest income

$

4,576

$

2,666

$

1,434

$

461

$

15

Non-interest income

1,071

816

158

114

(17)

Total net revenue (loss)(3)

5,647

3,482

1,592

575

(2)

Provision for credit losses

935

669

206

60

Non-interest expense

3,049

1,776

970

272

31

Income (loss) from continuing operations before income taxes

1,663

1,037

416

243

(33)

Income tax provision (benefit)

529

369

150

88

(78)

Income from continuing operations, net of tax

$

1,134

$

668

$

266

$

155

$

45

Three Months Ended June 30, 2014

Six Months Ended June 30, 2014

(Dollars in millions) (unaudited)

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Net interest income (expense)

$

4,315

$

2,461

$

1,431

$

436

$

(13)

$

8,665

$

4,986

$

2,864

$

857

$

(42)

Non-interest income

1,153

839

170

109

35

2,173

1,624

320

196

33

Total net revenue (loss)(3)

5,468

3,300

1,601

545

22

10,838

6,610

3,184

1,053

(9)

Provision (benefit) for credit losses

704

549

143

12

1,439

1,107

283

52

(3)

Non-interest expense

2,979

1,719

938

267

55

5,911

3,445

1,868

522

76

Income (loss) from continuing operations before income taxes

1,785

1,032

520

266

(33)

3,488

2,058

1,033

479

(82)

Income tax provision (benefit)

581

364

186

95

(64)

1,160

722

369

171

(102)

Income from continuing operations, net of tax

$

1,204

$

668

$

334

$

171

$

31

$

2,328

$

1,336

$

664

$

308

$

20

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial & Statistical Summary—Credit Card Business

2015 Q2 vs.

Six Months Ended June 30,

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

2015 Q1

2014 Q2

2015 vs.

(Dollars in millions) (unaudited)

2015

2014

2014

Credit Card(4)

Earnings:

Net interest income

$

2,633

$

2,666

$

2,697

$

2,627

$

2,461

(1)%

7%

$

5,299

$

4,986

6%

Non-interest income

845

816

841

846

839

4

1

1,661

1,624

2

Total net revenue

3,478

3,482

3,538

3,473

3,300

5

6,960

6,610

5

Provision for credit losses

895

669

856

787

549

34

63

1,564

1,107

41

Non-interest expense

1,857

1,776

1,888

1,730

1,719

5

8

3,633

3,445

5

Income from continuing operations before income taxes

726

1,037

794

956

1,032

(30)

(30)

1,763

2,058

(14)

Income tax provision

263

369

275

332

364

(29)

(28)

632

722

(12)

Income from continuing operations, net of tax

$

463

$

668

$

519

$

624

$

668

(31)

(31)

$

1,131

$

1,336

(15)

Selected performance metrics:

Period-end loans held for investment

$

87,203

$

81,754

$

85,876

$

80,631

$

79,018

7%

10%

$

87,203

$

79,018

10%

Average loans held for investment

83,901

82,581

81,740

79,494

76,997

2

9

83,244

77,248

8

Average yield on loans held for investment(5)

13.98%

14.30%

14.61%

14.65%

14.22%

(32)

bps

(24)

bps

14.14%

14.33%

(19)

bps

Total net revenue margin(6)

16.58

16.87

17.31

17.48

17.14

(29)

(56)

16.72

17.11

(39)

Net charge-off rate

3.35

3.48

3.38

2.88

3.56

(13)

(21)

3.42

3.79

(37)

30+ day performing delinquency rate

2.82

2.91

3.24

3.22

2.89

(9)

(7)

2.82

2.89

(7)

30+ day delinquency rate

2.88

2.97

3.30

3.29

2.97

(9)

(9)

2.88

2.97

(9)

Nonperforming loan rate(1)

0.08

0.08

0.08

0.09

0.10

(2)

0.08

0.10

(2)

Card loan premium amortization and other intangible accretion(7)

$

7

$

11

$

11

$

18

$

31

(36)%

(77)%

$

18

$

68

(74)%

PCCR intangible amortization

80

84

87

90

94

(5)

(15)

164

192

(15)

Purchase volume(8)

68,559

57,383

63,484

57,474

56,358

19

22

125,942

103,792

21

2015 Q2 vs.

Six Months Ended June 30,

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

2015 Q1

2014 Q2

2015 vs.

(Dollars in millions) (unaudited)

2015

2014

2014

Domestic Card

Earnings:

Net interest income

$

2,395

$

2,421

$

2,432

$

2,361

$

2,193

(1)%

9%

$

4,816

$

4,448

8%

Non-interest income

796

743

768

763

768

7

4

1,539

1,470

5

Total net revenue

3,191

3,164

3,200

3,124

2,961

1

8

6,355

5,918

7

Provision for credit losses

853

610

765

738

504

40

69

1,463

990

48

Non-interest expense

1,621

1,580

1,676

1,530

1,513

3

7

3,201

3,058

5

Income from continuing operations before income taxes

717

974

759

856

944

(26)

(24)

1,691

1,870

(10)

Income tax provision

259

353

272

306

337

(27)

(23)

612

668

(8)

Income from continuing operations, net of tax

$

458

$

621

$

487

$

550

$

607

(26)

(25)

$

1,079

$

1,202

(10)

Selected performance metrics:

Period-end loans held for investment

$

78,984

$

74,131

$

77,704

$

73,143

$

71,165

7%

11%

$

78,984

$

71,165

11%

Average loans held for investment

75,924

74,770

74,026

71,784

69,376

2

9

75,349

69,592

8

Average yield on loans held for investment(5)

13.95%

14.23%

14.43%

14.46%

13.95%

(28)

bps

14.09%

14.07%

2

bps

Total net revenue margin(6)

16.81

16.93

17.29

17.41

17.07

(12)

(26)

bps

16.87

17.01

(14)

Net charge-off rate

3.42

3.55

3.39

2.83

3.52

(13)

(10)

3.49

3.77

(28)

30+ day performing delinquency rate

2.84

2.92

3.27

3.21

2.83

(8)

1

2.84

2.83

1

30+ day delinquency rate

2.84

2.92

3.27

3.21

2.83

(8)

1

2.84

2.83

1

Purchase volume(8)

$

62,198

$

52,025

$

58,234

$

53,690

$

52,653

20%

18%

$

114,223

$

96,792

18%

International Card(4)

Earnings:

Net interest income

$

238

$

245

$

265

$

266

$

268

(3)%

(11)%

$

483

$

538

(10)%

Non-interest income

49

73

73

83

71

(33)

(31)

122

154

(21)

Total net revenue

287

318

338

349

339

(10)

(15)

605

692

(13)

Provision for credit losses

42

59

91

49

45

(29)

(7)

101

117

(14)

Non-interest expense

236

196

212

200

206

20

15

432

387

12

Income from continuing operations before income taxes

9

63

35

100

88

(86)

(90)

72

188

(62)

Income tax provision

4

16

3

26

27

(75)

(85)

20

54

(63)

Income from continuing operations, net of tax

$

5

$

47

$

32

$

74

$

61

(89)

(92)

$

52

$

134

(61)

Selected performance metrics:

Period-end loans held for investment

$

8,219

$

7,623

$

8,172

$

7,488

$

7,853

8%

5%

$

8,219

$

7,853

5%

Average loans held for investment

7,977

7,811

7,714

7,710

7,621

2

5

7,895

7,656

3

Average yield on loans held for investment(5)

14.29

%

14.93%

16.31%

16.42%

16.74%

(64)

bps

(245)

bps

14.60%

16.69%

(209)

bps

Total net revenue margin(6)

14.36

16.31

17.55

18.13

17.76

(195)

(340)

15.33

18.07

(274)

Net charge-off rate

2.65

2.80

3.34

3.32

3.93

(15)

(128)

2.73

4.05

(132)

30+ day performing delinquency rate

2.65

2.81

2.94

3.34

3.40

(16)

(75)

2.65

3.40

(75)

30+ day delinquency rate

3.29

3.44

3.60

4.08

4.20

(15)

(91)

3.29

4.20

(91)

Nonperforming loan rate(1)

0.83

0.84

0.86

0.98

1.03

(1)

(20)

0.83

1.03

(20)

Purchase volume(8)

$

6,361

$

5,358

$

5,250

$

3,784

$

3,705

19%

72%

$

11,719

$

7,000

67%

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Consumer Banking Business

2015 Q2 vs.

Six Months Ended June 30,

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

2015

Q1

2014

Q2

2015 vs.

(Dollars in millions) (unaudited)

2015

2014

2014

Consumer Banking

Earnings:

Net interest income

$

1,444

$

1,434

$

1,459

$

1,425

$

1,431

1%

1%

$

2,878

$

2,864

Non-interest income

196

158

185

179

170

24

15

354

320

11%

Total net revenue

1,640

1,592

1,644

1,604

1,601

3

2

3,232

3,184

2

Provision for credit losses

185

206

222

198

143

(10)

29

391

283

38

Non-interest expense

998

970

1,045

956

938

3

6

1,968

1,868

5

Income from continuing operations before income taxes

457

416

377

450

520

10

(12)

873

1,033

(15)

Income tax provision

166

150

135

161

186

11

(11)

316

369

(14)

Income from continuing operations, net of tax

$

291

$

266

$

242

$

289

$

334

9

(13)

$

557

$

664

(16)

Selected performance metrics:

Period-end loans held for investment

$

71,176

$

71,379

$

71,439

$

71,061

$

71,062

$

71,176

$

71,062

Average loans held for investment

71,367

71,441

71,254

71,048

70,884

1%

71,404

70,774

1%

Average yield on loans held for investment(5)

6.27%

6.26%

6.45%

6.18%

6.22%

1

bps

5

bps

6.27%

6.20%

7

bps

Auto loan originations

$

5,433

$

5,185

$

5,390

$

5,410<