Capital One Reports Second Quarter 2020 Net Loss of $918 million, or $2.21 per share

Excluding adjusting items, Second Quarter 2020 Net Loss of $1.61 per share(1)

News provided by

Capital One Financial Corporation

Jul 21, 2020, 16:05 ET

MCLEAN, Va., July 21, 2020 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net loss for the second quarter of 2020 of $918 million, or $2.21 per diluted common share, compared with net loss of $1.3 billion, or $3.10 per diluted common share in the first quarter of 2020, and with net income of $1.6 billion, or $3.24 per diluted common share in the second quarter of 2019. Excluding adjusting items, net loss for the second quarter of 2020 was $1.61 per diluted common share(1).

"Our investments to transform our technology and how we work, and our efforts to drive the company to digital are powering our response to the pandemic," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We remain well positioned to weather the downturn, emerge with strength, and deliver shareholder value over the long-term."

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


Pre-Tax

Diluted EPS

(Dollars in millions, except per share data)

Impact

Impact

Legal reserve builds

$

265


$

0.58


Cybersecurity Incident expenses, net of insurance

11


0.02


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

Second Quarter 2020 Income Statement Summary:

  • Total net revenue decreased 10 percent to $6.6 billion.
  • Total non-interest expense increased 1 percent to $3.8 billion:
    • 44 percent decrease in marketing.
    • 8 percent increase in operating expenses.
  • Pre-provision earnings decreased 21 percent to $2.8 billion(2).
  • Provision for credit losses decreased 22 percent to $4.2 billion:
    • Net charge-offs of $1.5 billion.
    • $2.7 billion reserve build.
  • Net interest margin of 5.78 percent, decreased 100 basis points.
  • Efficiency ratio of 57.50 percent.
    • Efficiency ratio excluding adjusting items of 53.29 percent(1).
  • Operating efficiency ratio of 53.34 percent.
    • Operating efficiency ratio excluding adjusting items of 49.13 percent(1).

Second Quarter 2020 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.4 percent at June 30, 2020.
  • Period-end loans held for investment in the quarter decreased $11.5 billion, or 4 percent, to $251.5 billion.
    • Credit Card period-end loans decreased $10.5 billion, or 9 percent, to $107.3 billion.
      • Domestic Card period-end loans decreased $10.2 billion, or 9 percent, to $99.4 billion.
    • Consumer Banking period-end loans increased $2.7 billion, or 4 percent, to $66.7 billion
      • Auto period-end loans increased $2.0 billion, or 3 percent, to $63.3 billion.
    • Commercial Banking period-end loans decreased $3.7 billion, or 5 percent, to $77.5 billion.
  • Average loans held for investment in the quarter decreased $9.5 billion, or 4 percent, to $253.4 billion.
    • Credit Card average loans decreased $14.0 billion, or 11 percent, to $108.7 billion
      • Domestic Card average loans decreased $12.7 billion, or 11 percent, to $101.0 billion.
    • Consumer Banking average loans increased $1.2 billion, or 2 percent, to $64.9 billion.
      • Auto average loans increased $793 million, or 1 percent, to $61.8 billion.
    • Commercial Banking average loans increased $3.3 billion, or 4 percent, to $79.8 billion.
  • Period-end total deposits increased $34.5 billion, or 13 percent, to $304.2 billion, while average deposits increased $23.7 billion, or 9 percent, to $288.3 billion.
  • Interest-bearing deposits rate paid decreased 27 basis points to 0.94 percent.

(1)

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

(2)

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

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 21, 2020 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through August 4, 2020 at 5:00 PM Eastern Time.

Forward-Looking Statements

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

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $304.2 billion in deposits and $421.3 billion in total assets as of  June 30, 2020. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Exhibit 99.2


Capital One Financial Corporation

Financial Supplement(1)(2)

Second Quarter 2020

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

14


Table 10:

Financial & Statistical Summary—Credit Card Business

15


Table 11:

Financial & Statistical Summary—Consumer Banking Business

17


Table 12:

Financial & Statistical Summary—Commercial Banking Business

18


Table 13:

Financial & Statistical Summary—Other and Total

19

Other



Table 14:

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

20


Table 15:

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

21

__________



(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, 2020 once it is filed

with the Securities and Exchange Commission.

(2)

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

users of our financial information as they provide an alternate measurement of our performance and assist in assessing our

capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported

results determined in accordance with generally accepted accounting principles in the U.S. ("GAAP"), nor are they necessarily

comparable to non-GAAP measures that may be presented by other companies.

            


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated














2020 Q2 vs.


Six Months Ended June 30,

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


2020


2020


2019


2019


2019


2020


2019






2020 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Income Statement





















Net interest income


$

5,460



$

6,025



$

6,066



$

5,737



$

5,746



(9)

%


(5)

%


$

11,485



$

11,537



—


Non-interest income


1,096



1,224



1,361



1,222



1,378



(10)



(20)



2,320



2,670



(13)

%

Total net revenue(1)


6,556



7,249



7,427



6,959



7,124



(10)



(8)



13,805



14,207



(3)


Provision for credit losses


4,246



5,423



1,818



1,383



1,342



(22)



**



9,669



3,035



**


Non-interest expense:





















Marketing


273



491



710



501



546



(44)



(50)



764



1,063



(28)


Operating expense


3,497



3,238



3,451



3,371



3,233



8



8



6,735



6,387



5


Total non-interest expense


3,770



3,729



4,161



3,872



3,779



1



—



7,499



7,450



1


Income (loss) from continuing operations before income taxes


(1,460)



(1,903)



1,448



1,704



2,003



(23)



**



(3,363)



3,722



**


Income tax provision (benefit)


(543)



(563)



270



375



387



(4)



**



(1,106)



696



**


Income (loss) from continuing operations, net of tax


(917)



(1,340)



1,178



1,329



1,616



(32)



**



(2,257)



3,026



**


Income (loss) from discontinued operations, net of tax


(1)



—



(2)



4



9



**



**



(1)



11



**


Net income (loss)


(918)



(1,340)



1,176



1,333



1,625



(31)



**



(2,258)



3,037



**


Dividends and undistributed earnings allocated to participating securities(2)


(1)



(3)



(7)



(10)



(12)



(67)



(92)



(4)



(24)



(83)


Preferred stock dividends


(90)



(55)



(97)



(53)



(80)



64



13



(145)



(132)



10


Issuance cost for redeemed preferred stock(3)


—



(22)



(31)



—



—



**



—



(22)



—



**


Net income (loss) available to common stockholders


$

(1,009)



$

(1,420)



$

1,041



$

1,270



$

1,533



(29)



**



$

(2,429)



$

2,881



**


Common Share Statistics





















Basic earnings per common share:(2)





















Net income (loss) from continuing operations


$

(2.21)



$

(3.10)



$

2.26



$

2.70



$

3.24



(29)

%


**



$

(5.31)



$

6.11



**


Income from discontinued operations


—



—



—



0.01



0.02



—



**



—



0.02



**


Net income (loss) per basic common share


$

(2.21)



$

(3.10)



$

2.26



$

2.71



$

3.26



(29)



**



$

(5.31)



$

6.13



**


Diluted earnings per common share:(2)





















Net income (loss) from continuing operations


$

(2.21)



$

(3.10)



$

2.25



$

2.68



$

3.22



(29)



**



$

(5.31)



$

6.08



**


Income from discontinued operations


—



—



—



0.01



0.02



—



**



—



0.02



**


Net income (loss) per diluted common share


$

(2.21)



$

(3.10)



$

2.25



$

2.69



$

3.24



(29)



**



$

(5.31)



$

6.10



**


Weighted-average common shares outstanding (in millions):





















Basic


456.7



457.6



460.9



469.5



470.8



—



(3)

%


457.1



470.1



(3)

%

Diluted


456.7



457.6



463.4



471.8



473.0



—



(3)



457.1



472.3



(3)


Common shares outstanding (period-end, in millions)


456.3



455.3



456.6



465.7



470.3



—



(3)



456.3



470.3



(3)


Dividends declared and paid per common share


$

0.40



$

0.40



$

0.40



$

0.40



$

0.40



—



—



$

0.80



$

0.80



—


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


78.82



80.68



83.72



80.46



77.65



(2)



2



78.82



77.65



2












































































2020 Q2 vs.


Six Months Ended June 30,

(Dollars in millions)


2020


2020


2019


2019


2019


2020


2019






2020 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Balance Sheet (Period-End)





















Loans held for investment


$

251,512



$

262,990



$

265,809



$

249,355



$

244,460



(4)

%


3

%


$

251,512



$

244,460



3

%

Interest-earning assets


389,829



364,472



355,202



344,643



339,160



7



15



389,829



339,160



15


Total assets


421,296



396,878



390,365



378,810



373,619



6



13



421,296



373,619



13


Interest-bearing deposits


275,183



245,142



239,209



234,084



231,161



12



19



275,183



231,161



19


Total deposits


304,238



269,689



262,697



257,148



254,535



13



20



304,238



254,535



20


Borrowings


44,900



55,681



55,697



50,149



49,233



(19)



(9)



44,900



49,233



(9)


Common equity


50,835



51,620



53,157



52,412



51,406



(2)



(1)



50,835



51,406



(1)


Total stockholders' equity


56,045



56,830



58,011



58,235



55,767



(1)



—



56,045



55,767



—


Balance Sheet (Average Balances)





















Loans held for investment


$

253,358



$

262,889



$

258,870



$

246,147



$

242,653



(4)

%


4

%


$

258,124



$

242,307



7

%

Interest-earning assets


378,145



355,347



349,150



340,949



338,026



6



12



366,746



337,913



9


Total assets


411,075



390,380



383,162



374,905



371,095



5



11



400,845



370,746



8


Interest-bearing deposits


261,256



241,115



236,250



232,063



230,452



8



13



251,185



229,020



10


Total deposits


288,344



264,653



260,040



255,082



253,634



9



14



276,498



252,528



9


Borrowings


49,827



51,795



51,442



49,413



49,982



(4)



—



50,810



51,510



(1)


Common equity


52,413



53,186



52,641



52,566



50,209



(1)



4



52,799



49,289



7


Total stockholders' equity


57,623



58,568



58,148



57,245



54,570



(2)



6



58,096



53,650



8


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated














2020 Q2 vs.


Six Months Ended June 30,

(Dollars in millions, except as noted)


2020


2020


2019


2019


2019


2020


2019






2020 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Performance Metrics





















Net interest income growth (period over period)


(9)

%


(1)

%


6

%


—



(1)

%


**



**



—



2

%


**


Non-interest income growth (period over period)


(10)



(10)



11



(11)

%


7



**



**



(13)

%


(6)



**


Total net revenue growth (period over period)


(10)



(2)



7



(2)



1



**



**



(3)



1



**


Total net revenue margin(5)


6.93



8.16



8.51



8.16



8.43



(123)

bps


(150)

bps


7.53



8.41



(88)

bps

Net interest margin(6)


5.78



6.78



6.95



6.73



6.80



(100)



(102)



6.26



6.83



(57)


Return on average assets


(0.89)



(1.37)



1.23



1.42



1.74



48



**



(1.13)



1.63



**


Return on average tangible assets(7)


(0.93)



(1.43)



1.28



1.48



1.82



50



**



(1.17)



1.70



**


Return on average common equity(8)


(7.69)



(10.68)



7.93



9.63



12.14



299



**



(9.20)



11.65



**


Return on average tangible common equity(9)


(10.74)



(14.85)



11.07



13.45



17.26



4

%


**



(12.81)



16.70



**


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


5.95



5.67



6.43



6.29



6.23



28

bps


(28)



5.81



6.15



(34)


Efficiency ratio(10)


57.50



51.44



56.03



55.64



53.05



6

%


4

%


54.32



52.44



2

%

Operating efficiency ratio(11)


53.34



44.67



46.47



48.44



45.38



9



8



48.79



44.96



4


Effective income tax rate for continuing operations


37.2



29.6



18.6



22.0



19.3



8



18



32.9



18.7



14


Employees (period-end, in thousands)


53.1



52.1



51.9



52.1



50.7



2



5



53.1



50.7



5


Credit Quality Metrics





















Allowance for credit losses


$

16,832



$

14,073



$

7,208



$

7,037



$

7,133



20

%


136

%


$

16,832



$

7,133



136

%

Allowance coverage ratio


6.69

%


5.35

%


2.71

%


2.82

%


2.92

%


134

bps


377

bps


6.69

%


2.92

%


377

bps

Net charge-offs


$

1,505



$

1,791



$

1,683



$

1,462



$

1,508



(16)

%


—



$

3,296



$

3,107



6

%

Net charge-off rate(12)


2.38

%


2.72

%


2.60

%


2.38

%


2.48

%


(34)

bps


(10)

bps


2.55

%


2.56

%


(1)

bps

30+ day performing delinquency rate(13)


2.09



2.95



3.51



3.28



3.15



(86)



(106)



2.09



3.15



(106)


30+ day delinquency rate(13)


2.30



3.16



3.74



3.51



3.35



(86)



(105)



2.30



3.35



(105)


Capital Ratios(14)





















Common equity Tier 1 capital


12.4

%


12.0

%


12.2

%


12.5

%


12.3

%


40

bps


10

bps


12.4

%


12.3

%


10

bps

Tier 1 capital


14.2



13.7



13.7



14.4



13.8



50



40



14.2



13.8



40


Total capital


16.7



16.1



16.1



16.8



16.2



60



50



16.7



16.2



50


Tier 1 leverage


10.3



11.0



11.7



11.9



11.4



(70)



(110)



10.3



11.4



(110)


Tangible common equity ("TCE")(15)


8.8



9.6



10.2



10.3



10.2



(80)



(140)



8.8



10.2



(140)



CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income














2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019






2020 vs.

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


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Interest income:





















Loans, including loans held for sale


$

5,820



$

6,542



$

6,682



$

6,429



$

6,383



(11)

%


(9)

%


$

12,362



$

12,751



(3)

%

Investment securities


482



530



544



583



629



(9)



(23)



1,012



1,284



(21)


Other


16



37



44



63



64



(57)



(75)



53



133



(60)


Total interest income


6,318



7,109



7,270



7,075



7,076



(11)



(11)



13,427



14,168



(5)


Interest expense:





















Deposits


611



731



832



901



870



(16)



(30)



1,342



1,687



(20)


Securitized debt obligations


56



99



118



123



139



(43)



(60)



155



282



(45)


Senior and subordinated notes


180



239



236



299



310



(25)



(42)



419



624



(33)


Other borrowings


11



15



18



15



11



(27)



—



26



38



(32)


Total interest expense


858



1,084



1,204



1,338



1,330



(21)



(35)



1,942



2,631



(26)


Net interest income


5,460



6,025



6,066



5,737



5,746



(9)



(5)



11,485



11,537



—


Provision for credit losses


4,246



5,423



1,818



1,383



1,342



(22)



**



9,669



3,035



**


Net interest income after provision for credit losses


1,214



602



4,248



4,354



4,404



102



(72)



1,816



8,502



(79)


Non-interest income:





















Interchange fees, net


672



752



811



790



820



(11)



(18)



1,424



1,578



(10)


Service charges and other customer-related fees


258



327



342



283



352



(21)



(27)



585



705



(17)


Net securities gains (losses)


—



—



(18)



5



15



—



**



—



39



**


Other


166



145



226



144



191



14



(13)



311



348



(11)


Total non-interest income


1,096



1,224



1,361



1,222



1,378



(10)



(20)



2,320



2,670



(13)


Non-interest expense:





















Salaries and associate benefits


1,704



1,627



1,652



1,605



1,558



5



9



3,331



3,131



6


Occupancy and equipment


523



517



565



519



521



1



—



1,040



1,014



3


Marketing


273



491



710



501



546



(44)



(50)



764



1,063



(28)


Professional services


304



287



318



314



314



6



(3)



591



605



(2)


Communications and data processing


308



302



346



312



329



2



(6)



610



632



(3)


Amortization of intangibles


16



22



28



25



29



(27)



(45)



38



59



(36)


Other(16)


642



483



542



596



482



33



33



1,125



946



19


Total non-interest expense


3,770



3,729



4,161



3,872



3,779



1



—



7,499



7,450



1


Income (loss) from continuing operations before income taxes


(1,460)



(1,903)



1,448



1,704



2,003



(23)



**



(3,363)



3,722



**


Income tax provision (benefit)


(543)



(563)



270



375



387



(4)



**



(1,106)



696



**


Income (loss) from continuing operations, net of tax


(917)



(1,340)



1,178



1,329



1,616



(32)



**



(2,257)



3,026



**


Income (loss) from discontinued operations, net of tax


(1)



—



(2)



4



9



**



**



(1)



11



**


Net income (loss)


(918)



(1,340)



1,176



1,333



1,625



(31)



**



(2,258)



3,037



**


Dividends and undistributed earnings allocated to participating securities(2)


(1)



(3)



(7)



(10)



(12)



(67)



(92)



(4)



(24)



(83)


Preferred stock dividends


(90)



(55)



(97)



(53)



(80)



64



13



(145)



(132)



10


Issuance cost for redeemed preferred stock(3)


—



(22)



(31)



—



—



**



—



(22)



—



**


Net income (loss) available to common stockholders


$

(1,009)



$

(1,420)



$

1,041



$

1,270



$

1,533



(29)



**



$

(2,429)



$

2,881



**
























































2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019






2020 vs.

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


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Basic earnings per common share:(2)





















Net income (loss) from continuing operations


$

(2.21)



$

(3.10)



$

2.26



$

2.70



$

3.24



(29)

%


**



$

(5.31)



$

6.11



**


Income from discontinued operations


—



—



—



0.01



0.02



—



**



—



0.02



**


Net income (loss) per basic common share


$

(2.21)



$

(3.10)



$

2.26



$

2.71



$

3.26



(29)



**



$

(5.31)



$

6.13



**


Diluted earnings per common share:(2)





















Net income (loss) from continuing operations


$

(2.21)



$

(3.10)



$

2.25



$

2.68



$

3.22



(29)



**



$

(5.31)



$

6.08



**


Income from discontinued operations


—



—



—



0.01



0.02



—



**



—



0.02



**


Net income (loss) per diluted common share


$

(2.21)



$

(3.10)



$

2.25



$

2.69



$

3.24



(29)



**



$

(5.31)



$

6.10



**


Weighted-average common shares outstanding (in millions):





















Basic common shares


456.7



457.6



460.9



469.5



470.8



—



(3)

%


457.1



470.1



(3)

%

Diluted common shares


456.7



457.6



463.4



471.8



473.0



—



(3)



457.1



472.3



(3)



CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets














2020 Q2 vs.



2020


2020


2019


2019


2019


2020


2019

(Dollars in millions)


Q2


Q1


Q4


Q3


Q2


Q1


Q2

Assets:















Cash and cash equivalents:















Cash and due from banks


$

4,583



$

4,545



$

4,129



$

4,452



$

5,184



1

%


(12)

%

Interest-bearing deposits and other short-term investments


51,235



20,391



9,278



12,668



9,927



151



416


Total cash and cash equivalents


55,818



24,936



13,407



17,120



15,111



124



269


Restricted cash for securitization investors


740



364



342



417



710



103



4


Investment securities:















Securities available for sale


87,859



81,423



79,213



46,168



45,658



8



92


Securities held to maturity


—



—



—



33,894



35,475



—



**


Total investment securities


87,859



81,423



79,213



80,062



81,133



8



8


Loans held for investment:















Unsecuritized loans held for investment


222,310



231,318



231,992



215,892



211,556



(4)



5


Loans held in consolidated trusts


29,202



31,672



33,817



33,463



32,904



(8)



(11)


Total loans held for investment


251,512



262,990



265,809



249,355



244,460



(4)



3


Allowance for credit losses


(16,832)



(14,073)



(7,208)



(7,037)



(7,133)



20



136


Net loans held for investment


234,680



248,917



258,601



242,318



237,327



(6)



(1)


Loans held for sale


711



1,056



400



1,245



1,829



(33)



(61)


Premises and equipment, net


4,324



4,336



4,378



4,311



4,243



—



2


Interest receivable


1,574



1,687



1,758



1,627



1,544



(7)



2


Goodwill


14,645



14,645



14,653



14,624



14,545



—



1


Other assets


20,945



19,514



17,613



17,086



17,177



7



22


Total assets


$

421,296



$

396,878



$

390,365



$

378,810



$

373,619



6



13





























2020 Q2 vs.



2020


2020


2019


2019


2019


2020


2019

(Dollars in millions)


Q2


Q1


Q4


Q3


Q2


Q1


Q2

Liabilities:















Interest payable


$

380



$

359



$

439



$

370



$

437



6

%


(13)

%

Deposits:















Non-interest-bearing deposits


29,055



24,547



23,488



23,064



23,374



18



24


Interest-bearing deposits


275,183



245,142



239,209



234,084



231,161



12



19


Total deposits


304,238



269,689



262,697



257,148



254,535



13



20


Securitized debt obligations


15,761



17,141



17,808



18,910



16,959



(8)



(7)


Other debt:















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


573



399



314



464



359



44



60


Senior and subordinated notes


28,481



32,049



30,472



30,682



31,822



(11)



(10)


Other borrowings


85



6,092



7,103



93



93



(99)



(9)


Total other debt


29,139



38,540



37,889



31,239



32,274



(24)



(10)


Other liabilities


15,733



14,319



13,521



12,908



13,647



10



15


Total liabilities


365,251



340,048



332,354



320,575



317,852



7



15

















Stockholders' equity:















Preferred stock


0



0



0



0



0



—



—


Common stock


7



7



7



7



7



—



—


Additional paid-in capital, net


33,556



33,450



32,980



33,826



32,262



—



4


Retained earnings


35,361



36,552



40,340



39,476



38,386



(3)



(8)


Accumulated other comprehensive income


3,981



3,679



1,156



453



170



8



**


Treasury stock, at cost


(16,860)



(16,858)



(16,472)



(15,527)



(15,058)



—



12


Total stockholders' equity


56,045



56,830



58,011



58,235



55,767



(1)



—


Total liabilities and stockholders' equity


$

421,296



$

396,878



$

390,365



$

378,810



$

373,619



6



13



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 $318 million in Q2 2020 and $389 million in Q1 2020 for credit card finance charges and fees charged-off as uncollectible,

and by $365 million in Q4 2019, $330 million in Q3 2019 and $318 million in Q2 2019 for the estimated uncollectible amount of credit card finance charges

and fees and related losses.

(2)

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

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

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

measures.

(3)

On March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B. The redemption increased

our net loss available to common shareholders by $22 million in Q1 2020. On December 2, 2019, we redeemed all outstanding shares of our fixed rate 6.25%

non-cumulative perpetual preferred stock Series C and fixed rate 6.70% non-cumulative perpetual preferred stock Series D. The redemption reduced our net

income available to common shareholders by $31 million in Q4 2019.

(4)

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

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

(5)

Total net revenue margin is calculated based on 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 net income (loss) available to common stockholders less income (loss) from discontinued operations,

net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled

measures reported by other companies.

(9)

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

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

TCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and

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

(10)

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

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

information on our non-GAAP measures.

(11)

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

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

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

(12)

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

(13)

Metrics for Q2 2020 and Q1 2020 include the impact of COVID-19 customer assistance programs where applicable.

(14)

Capital ratios as of the end of Q2 2020 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and

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

(15)

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.

(16)

Includes net Cybersecurity Incident expenses of $11 million in Q2 2020, $4 million in Q1 2020, $16 million in Q4 2019 and $22 million in Q3 2019, respectively.

**

Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




2020 Q2


2020 Q1


2019 Q2



Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

(Dollars in millions, except as noted)










Interest-earning assets:



















Loans, including loans held for sale


$

254,402



$

5,820



9.15

%


$

263,631



$

6,542



9.93

%


$

243,831



$

6,383



10.47

%

Investment securities


81,095



482



2.38



78,212



530



2.71



82,383



629



3.05


Cash equivalents and other


42,648



16



0.15



13,504



37



1.10



11,812



64



2.16


Total interest-earning assets


$

378,145



$

6,318



6.68



$

355,347



$

7,109



8.00



$

338,026



$

7,076



8.37


Interest-bearing liabilities:



















Interest-bearing deposits


$

261,256



$

611



0.94



$

241,115



$

731



1.21



$

230,452



$

870



1.51


Securitized debt obligations


16,432



56



1.37



18,054



99



2.20



18,262



139



3.04


Senior and subordinated notes


31,294



180



2.30



31,342



239



3.04



30,630



310



4.05


Other borrowings and liabilities


3,554



11



1.21



3,779



15



1.62



2,322



11



1.91


Total interest-bearing liabilities


$

312,536



$

858



1.10



$

294,290



$

1,084



1.47



$

281,666



$

1,330



1.89


Net interest income/spread




$

5,460



5.58





$

6,025



6.53





$

5,746



6.48


Impact of non-interest-bearing funding






0.20







0.25







0.32


Net interest margin






5.78

%






6.78

%






6.80

%





Six Months Ended June 30,



2020


2019



Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

(Dollars in millions, except as noted)







Interest-earning assets:













Loans, including loans held for sale


$

259,017



$

12,362



9.55

%


$

243,383



$

12,751



10.48

%

Investment securities


79,654



1,012



2.54



83,027



1,284



3.09


Cash equivalents and other


28,075



53



0.38



11,503



133



2.31


Total interest-earning assets


$

366,746



$

13,427



7.32



$

337,913



$

14,168



8.39


Interest-bearing liabilities:













Interest-bearing deposits


$

251,185



$

1,342



1.07



$

229,020



$

1,687



1.47


Securitized debt obligations


17,243



155



1.80



18,503



282



3.05


Senior and subordinated notes


31,318



419



2.67



30,732



624



4.06


Other borrowings and liabilities


3,667



26



1.42



3,497



38



2.20


Total interest-bearing liabilities


$

303,413



$

1,942



1.28



$

281,752



$

2,631



1.87


Net interest income/spread




$

11,485



6.04





$

11,537



6.52


Impact of non-interest-bearing funding






0.22







0.31


Net interest margin






6.26

%






6.83

%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics














2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019


2020


2019


2020 vs.
2019

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2

Loans Held for Investment (Period-End)





















Credit card:





















   Domestic credit card


$

99,390



$

109,549



$

118,606



$

104,664



$

102,959



(9)

%


(3)

%


$

99,390



$

102,959



(3)

%

   International card businesses


7,920



8,248



9,630



9,017



9,182



(4)



(14)



7,920



9,182



(14)


Total credit card(1)


107,310



117,797



128,236



113,681



112,141



(9)



(4)



107,310



112,141



(4)


Consumer banking:





















   Auto


63,319



61,364



60,362



59,278



57,556



3



10



63,319



57,556



10


   Retail banking


3,393



2,669



2,703



2,737



2,771



27



22



3,393



2,771



22


Total consumer banking


66,712



64,033



63,065



62,015



60,327



4



11



66,712



60,327



11


Commercial banking:





















   Commercial and multifamily real estate


30,953



32,373



30,245



30,009



29,861



(4)



4



30,953



29,861



4


   Commercial and industrial


46,537



48,787



44,263



43,650



42,125



(5)



10



46,537



42,125



10


  Total commercial lending


77,490



81,160



74,508



73,659



71,986



(5)



8



77,490



71,986



8


   Small-ticket commercial real estate


—



—



—



—



6



**



**



—



6



**


Total commercial banking


77,490



81,160



74,508



73,659



71,992



(5)



8



77,490



71,992



8


Total loans held for investment


$

251,512



$

262,990



$

265,809



$

249,355



$

244,460



(4)



3



$

251,512



$

244,460



3


Loans Held for Investment (Average)





















Credit card:





















   Domestic credit card


$

100,996



$

113,711



$

112,965



$

103,426



$

101,930



(11)

%


(1)

%


$

107,354



$

102,296



5

%

   International card businesses


7,752



9,065



9,120



8,945



8,868



(14)



(13)



8,408



8,829



(5)


Total credit card(1)


108,748



122,776



122,085



112,371



110,798



(11)



(2)



115,762



111,125



4


Consumer banking:





















   Auto


61,798



61,005



59,884



58,517



57,070



1



8



61,401



56,654



8


   Retail banking


3,053



2,666



2,712



2,752



2,788



15



10



2,860



2,809



2


Total consumer banking


64,851



63,671



62,596



61,269



59,858



2



8



64,261



59,463



8


Commercial banking:





















   Commercial and multifamily real estate


31,723



31,081



30,173



29,698



29,514



2



7



31,402



29,276



7


   Commercial and industrial


48,036



45,361



44,016



42,807



42,476



6



13



46,699



42,304



10


  Total commercial lending


79,759



76,442



74,189



72,505



71,990



4



11



78,101



71,580



9


   Small-ticket commercial real estate


—



—



—



2



7



**



**



—



139



**


Total commercial banking


79,759



76,442



74,189



72,507



71,997



4



11



78,101



71,719



9


Total average loans held for investment


$

253,358



$

262,889



$

258,870



$

246,147



$

242,653



(4)



4



$

258,124



$

242,307



7





















2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019


2020


2019


2020 vs.
2019



Q2


Q1


Q4


Q3


Q2


Q1


Q2

Net Charge-Off Rates




























Credit card:




























   Domestic credit card



4.53

%



4.68

%



4.32

%



4.12

%



4.86

%


(15)

bps


(33)

bps



4.61

%



4.95

%


(34)

bps

   International card businesses



3.47




4.65




4.22




3.78




3.63



(118)



(16)




4.11




3.41



70


Total credit card



4.46




4.68




4.31




4.09




4.76



(22)



(30)




4.57




4.83



(26)


Consumer banking:




























   Auto



1.16




1.51




1.90




1.60




1.09



(35)



7




1.33




1.26



7


   Retail banking



1.78




2.37




2.77




2.55




2.42



(59)



(64)




2.05




2.49



(44)


Total consumer banking



1.19




1.54




1.93




1.64




1.15



(35)



4




1.36




1.32



4


Commercial banking:




























   Commercial and multifamily real estate



0.09




—




—




0.02




—



9



9




0.04




—



4


   Commercial and industrial



0.78




0.96




0.60




0.55




0.15



(18)



63




0.87




0.14



73


Total commercial banking



0.51




0.57




0.35




0.33




0.09



(6)



42




0.54




0.08



46


Total net charge-offs



2.38




2.72




2.60




2.38




2.48



(34)



(10)




2.55




2.56



(1)


30+ Day Performing Delinquency Rates(2)




























Credit card:




























   Domestic credit card



2.74

%



3.69

%



3.93

%



3.71

%



3.40

%


(95)

bps


(66)

bps



2.74

%



3.40

%


(66)

bps

   International card businesses



2.71




3.66




3.47




3.52




3.40



(95)



(69)




2.71




3.40



(69)


Total credit card



2.74




3.69




3.89




3.69




3.40



(95)



(66)




2.74




3.40



(66)


Consumer banking:




























   Auto



3.28




5.29




6.88




6.47




6.10



(201)



(282)




3.28




6.10



(282)


   Retail banking



0.89




1.27




1.02




1.01




0.93



(38)



(4)




0.89




0.93



(4)


Total consumer banking



3.16




5.12




6.63




6.23




5.87



(196)



(271)




3.16




5.87



(271)


Nonperforming Loans and Nonperforming Assets Rates(3)(4)




























Credit card:




























   International card businesses



0.29

%



0.29

%



0.26

%



0.25

%



0.25

%


—



4

bps



0.29

%



0.25

%


4

bps

Total credit card



0.02




0.02




0.02




0.02




0.02



—



—




0.02




0.02



—


Consumer banking:




























   Auto



0.41




0.62




0.81




0.73




0.64



(21)

bps


(23)




0.41




0.64



(23)


   Retail banking



0.70




0.88




0.87




0.91




1.02



(18)



(32)




0.70




1.02



(32)


Total consumer banking



0.43




0.63




0.81




0.74




0.66



(20)



(23)




0.43




0.66



(23)


Commercial banking:




























   Commercial and multifamily real estate



0.54




0.22




0.12




0.12




0.14



32



40




0.54




0.14



40


   Commercial and industrial



1.06




0.87




0.93




0.95




0.74



19



32




1.06




0.74



32


Total commercial banking



0.85




0.61




0.60




0.61




0.50



24



35




0.85




0.50



35


Total nonperforming loans



0.38




0.35




0.37




0.37




0.32



3



6




0.38




0.32



6


Total nonperforming assets



0.39




0.37




0.39




0.40




0.34



2



5




0.39




0.34



5


CAPITAL ONE FINANCIAL CORPORATION (COF)

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




Three Months Ended June 30, 2020



Credit Card


Consumer Banking





(Dollars in millions)


Domestic
Card


International
Card
Businesses


Total
Credit
Card


Auto


Retail
Banking


Total
Consumer
Banking


Commercial
Banking


Total

Allowance for credit losses:

















Balance as of March 31, 2020


$

9,806



$

540



$

10,346



$

2,058



$

96



$

2,154



$

1,573



$

14,073


Charge-offs


(1,493)



(119)



(1,612)



(399)



(17)



(416)



(103)



(2,131)


Recoveries


350



51



401



220



4



224



1



626


Net charge-offs


(1,143)



(68)



(1,211)



(179)



(13)



(192)



(102)



(1,505)


Provision for credit losses


2,906



38



2,944



847



29



876



432



4,252


Allowance build (release) for credit losses


1,763



(30)



1,733



668



16



684



330



2,747


Other changes(5)


—



12



12



—



—



—



—



12


Balance as of June 30, 2020


11,569



522



12,091



2,726



112



2,838



1,903



16,832


Reserve for unfunded lending commitments:

















Balance as of March 31, 2020


—



—



—



—



—



—



223



223


Benefit for losses on unfunded lending commitments


—



—



—



—



—



—



(5)



(5)


Balance as of June 30, 2020


—



—



—



—



—



—



218



218


Combined allowance and reserve as of June 30, 2020


$

11,569



$

522



$

12,091



$

2,726



$

112



$

2,838



$

2,121



$

17,050






Six Months Ended June 30, 2020



Credit Card


Consumer Banking





(Dollars in millions)


Domestic
Card


International
Card
Businesses


Total
Credit
Card


Auto


Retail
Banking


Total
Consumer
Banking


Commercial
Banking


Total

Allowance for credit losses:

















Balance as of December 31, 2019


$

4,997



$

398



$

5,395



$

984



$

54



$

1,038



$

775



$

7,208


Cumulative effects from adoption of the current expected credit loss ("CECL") standard


2,237



4



2,241



477



25



502



102



2,845


Finance charge and fee reserve reclassification(1)


439



23



462



—



—



—



—



462


Balance as of January 1, 2020


7,673



425



8,098



1,461



79



1,540



877



10,515


Charge-offs


(3,208)



(253)



(3,461)



(875)



(37)



(912)



(215)



(4,588)


Recoveries


734



80



814



466



8



474



4



1,292


Net charge-offs


(2,474)



(173)



(2,647)



(409)



(29)



(438)



(211)



(3,296)


Provision for credit losses


6,370



276



6,646



1,674



62



1,736



1,237



9,619


Allowance build for credit losses


3,896



103



3,999



1,265



33



1,298



1,026



6,323


Other changes(5)


—



(6)



(6)



—



—



—



—



(6)


Balance as of June 30, 2020


11,569



522



12,091



2,726



112



2,838



1,903



16,832


Reserve for unfunded lending commitments:

















Balance as of December 31, 2019


—



—



—



—



5



5



130



135


Cumulative effects from adoption of the CECL standard


—



—



—



—



(5)



(5)



42



37


Balance as of January 1, 2020


—



—



—



—



—



—



172



172


Provision for losses on unfunded lending commitments


—



—



—



—



—



—



46



46


Balance as of June 30, 2020


—



—



—



—



—



—



218



218


Combined allowance and reserve as of June 30, 2020


$

11,569



$

522



$

12,091



$

2,726



$

112



$

2,838



$

2,121



$

17,050



CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results




Three Months Ended June 30, 2020


Six Months Ended June 30, 2020

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total


Credit
Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total

Net interest income (loss)


$

3,369



$

1,665



$

518



$

(92)



$

5,460



$

7,071



$

3,322



$

1,009



$

83



$

11,485


Non-interest income (loss)


845



97



180



(26)



1,096



1,756



223



418



(77)



2,320


Total net revenue (loss)


4,214



1,762



698



(118)



6,556



8,827



3,545



1,427



6



13,805


Provision (benefit) for credit losses


2,944



876



427



(1)



4,246



6,646



1,736



1,283



4



9,669


Non-interest expense


1,969



1,036



425



340



3,770



4,177



2,027



837



458



7,499


Loss from continuing operations before income taxes


(699)



(150)



(154)



(457)



(1,460)



(1,996)



(218)



(693)



(456)



(3,363)


Income tax benefit


(166)



(36)



(36)



(305)



(543)



(472)



(52)



(164)



(418)



(1,106)


Loss from continuing operations, net of tax


$

(533)



$

(114)



$

(118)



$

(152)



$

(917)



$

(1,524)



$

(166)



$

(529)



$

(38)



$

(2,257)

























Three Months Ended March 31, 2020











(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total











Net interest income


$

3,702



$

1,657



$

491



$

175



$

6,025












Non-interest income (loss)


911



126



238



(51)



1,224












Total net revenue


4,613



1,783



729



124



7,249












Provision for credit losses


3,702



860



856



5



5,423












Non-interest expense


2,208



991



412



118



3,729












Income (loss) from continuing operations before income taxes


(1,297)



(68)



(539)



1



(1,903)












Income tax benefit


(306)



(16)



(128)



(113)



(563)












Income (loss) from continuing operations, net of tax


$

(991)



$

(52)



$

(411)



$

114



$

(1,340)



































Three Months Ended June 30, 2019


Six Months Ended June 30, 2019

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total


Credit
Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total

Net interest income (loss)


$

3,531



$

1,709



$

514



$

(8)



$

5,746



$

7,121



$

3,388



$

1,003



$

25



$

11,537


Non-interest income (loss)


1,038



166



200



(26)



1,378



1,988



326



387



(31)



2,670


Total net revenue (loss)


4,569



1,875



714



(34)



7,124



9,109



3,714



1,390



(6)



14,207


Provision for credit losses


1,095



165



82



—



1,342



2,484



400



151



—



3,035


Non-interest expense


2,253



1,002



427



97



3,779



4,424



1,996



844



186



7,450


Income (loss) from continuing operations before income taxes


1,221



708



205



(131)



2,003



2,201



1,318



395



(192)



3,722


Income tax provision (benefit)


283



165



48



(109)



387



512



307



92



(215)



696


Income (loss) from continuing operations, net of tax


$

938



$

543



$

157



$

(22)



$

1,616



$

1,689



$

1,011



$

303



$

23



$

3,026
























CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business














2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019






2020 vs.

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Credit Card





















Earnings:





















Net interest income


$

3,369



$

3,702



$

3,794



$

3,546



$

3,531



(9)

%


(5)

%


$

7,071



$

7,121



(1)

%

Non-interest income


845



911



1,030



870



1,038



(7)



(19)



1,756



1,988



(12)


Total net revenue


4,214



4,613



4,824



4,416



4,569



(9)



(8)



8,827



9,109



(3)


Provision for credit losses


2,944



3,702



1,421



1,087



1,095



(20)



169



6,646



2,484



168


Non-interest expense


1,969



2,208



2,487



2,360



2,253



(11)



(13)



4,177



4,424



(6)


Income (loss) from continuing operations before income taxes


(699)



(1,297)



916



969



1,221



(46)



**



(1,996)



2,201



**


Income tax provision (benefit)


(166)



(306)



212



235



283



(46)



**



(472)



512



**


Income (loss) from continuing operations, net of tax


$

(533)



$

(991)



$

704



$

734



$

938



(46)



**



$

(1,524)



$

1,689



**


Selected performance metrics:





















Period-end loans held for investment(1)


$

107,310



$

117,797



$

128,236



$

113,681



$

112,141



(9)



(4)



$

107,310



$

112,141



(4)


Average loans held for investment(1)


108,748



122,776



122,085



112,371



110,798



(11)



(2)



115,762



111,125



4


Average yield on loans held for investment(7)


13.72

%


14.46

%


15.02

%


15.55

%


15.66

%


(74)

bps


(194)

bps


14.11

%


15.72

%


(161)

bps

Total net revenue margin(8)


15.50



15.03



15.80



15.72



16.50



47



(100)



15.25



16.39



(114)


Net charge-off rate


4.46



4.68



4.31



4.09



4.76



(22)



(30)



4.57



4.83



(26)


30+ day performing delinquency rate


2.74



3.69



3.89



3.69



3.40



(95)



(66)



2.74



3.40



(66)


30+ day delinquency rate


2.75



3.70



3.91



3.71



3.42



(95)



(67)



2.75



3.42



(67)


Nonperforming loan rate(3)


0.02



0.02



0.02



0.02



0.02



—



—



0.02



0.02



—


Purchase volume(9)


$

90,149



$

99,920



$

116,631



$

108,034



$

106,903



(10)

%


(16)

%


$

190,069



$

200,100



(5)

%



















































2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019






2020 vs.

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Domestic Card





















Earnings:





















Net interest income


$

3,094



$

3,381



$

3,473



$

3,299



$

3,220



(8)

%


(4)

%


$

6,475



$

6,493



—


Non-interest income


795



842



962



878



971



(6)



(18)



1,637



1,844



(11)

%

Total net revenue


3,889



4,223



4,435



4,177



4,191



(8)



(7)



8,112



8,337



(3)


Provision for credit losses


2,906



3,464



1,346



1,010



1,024



(16)



184



6,370



2,315



175


Non-interest expense


1,776



1,984



2,249



2,076



2,034



(10)



(13)



3,760



3,983



(6)


Income (loss) from continuing operations before income taxes


(793)



(1,225)



840



1,091



1,133



(35)



**



(2,018)



2,039



**


Income tax provision (benefit)


(188)



(290)



196



254



264



(35)



**



(478)



475



**


Income (loss) from continuing operations, net of tax


$

(605)



$

(935)



$

644



$

837



$

869



(35)



**



$

(1,540)



$

1,564



**


Selected performance metrics:





















Period-end loans held for investment(1)


$

99,390



$

109,549



$

118,606



$

104,664



$

102,959



(9)



(3)



$

99,390



$

102,959



(3)


Average loans held for investment(1)


100,996



113,711



112,965



103,426



101,930



(11)



(1)



107,354



102,296



5


Average yield on loans held for investment(7)


13.52

%


14.30

%


14.91

%


15.74

%


15.60

%


(78)

bps


(208)

bps


13.93

%


15.65

%


(172)

bps

Total net revenue margin(8)


15.40



14.86



15.70



16.15



16.45



54



(105)



15.11



16.30



(119)


Net charge-off rate


4.53



4.68



4.32



4.12



4.86



(15)



(33)



4.61



4.95



(34)


30+ day performing delinquency rate


2.74



3.69



3.93



3.71



3.40



(95)



(66)



2.74



3.40



(66)


Purchase volume(9)


$

82,860



$

92,248



$

107,154



$

99,087



$

98,052



(10)

%


(15)

%


$

175,108



$

183,790



(5)

%

Refreshed FICO scores:(10)





















Greater than 660


67

%


65

%


67

%


68

%


68

%


2



(1)



67

%


68

%


(1)


660 or below


33



35



33



32



32



(2)



1



33



32



1


Total


100

%


100

%


100

%


100

%


100

%






100

%


100

%



CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business














2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019






2020 vs.

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Consumer Banking





















Earnings:





















Net interest income


$

1,665



$

1,657



$

1,662



$

1,682



$

1,709



—



(3)

%


$

3,322



$

3,388



(2)

%

Non-interest income


97



126



152



165



166



(23)

%


(42)



223



326



(32)


Total net revenue


1,762



1,783



1,814



1,847



1,875



(1)



(6)



3,545



3,714



(5)


Provision for credit losses


876



860



335



203



165



2



**



1,736



400



**


Non-interest expense


1,036



991



1,110



985



1,002



5



3



2,027



1,996



2


Income (loss) from continuing operations before income taxes


(150)



(68)



369



659



708



121



**



(218)



1,318



**


Income tax provision (benefit)


(36)



(16)



86



154



165



125



**



(52)



307



**


Income (loss) from continuing operations, net of tax


$

(114)



$

(52)



$

283



$

505



$

543



119



**



$

(166)



$

1,011



**


Selected performance metrics:





















Period-end loans held for investment


$

66,712



$

64,033



$

63,065



$

62,015



$

60,327



4



11



$

66,712



$

60,327



11


Average loans held for investment


64,851



63,671



62,596



61,269



59,858



2



8



64,261



59,463



8


Average yield on loans held for investment(7)


8.41

%


8.46

%


8.51

%


8.47

%


8.36

%


(5)

bps


5

bps


8.44

%


8.25

%


19

bps

Auto loan originations


$

8,292



$

7,640



$

7,527



$

8,175



$

7,327



9

%


13

%


$

15,931



$

13,549



18

%

Period-end deposits


246,804



217,607



213,099



206,423



205,220



13



20



246,804



205,220



20


Average deposits


232,293



215,071



209,783



204,933



204,164



8



14



223,682



202,627



10


Average deposits interest rate


0.89

%


1.06

%


1.20

%


1.31

%


1.26

%


(17)

bps


(37)

bps


0.97

%


1.22

%


(25)

bps

Net charge-off rate


1.19



1.54



1.93



1.64



1.15



(35)



4



1.36



1.32



4


30+ day performing delinquency rate


3.16



5.12



6.63



6.23



5.87



(196)



(271)



3.16



5.87



(271)


30+ day delinquency rate


3.48



5.65



7.34



6.86



6.41



(217)



(293)



3.48



6.41



(293)


Nonperforming loan rate(3)


0.43



0.63



0.81



0.74



0.66



(20)



(23)



0.43



0.66



(23)


Nonperforming asset rate(4)


0.46



0.71



0.91



0.83



0.75



(25)



(29)



0.46



0.75



(29)


Auto—At origination FICO scores:(11)





















Greater than 660


46

%


47

%


48

%


48

%


49

%


(1)

%


(3)

%


46

%


49

%


(3)

%

621 - 660


20



20



20



20



19



—



1



20



19



1


620 or below


34



33



32



32



32



1



2



34



32



2


Total


100

%


100

%


100

%


100

%


100

%






100

%


100

%




CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business














2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019






2020 vs.

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Commercial Banking





















Earnings:





















Net interest income


$

518



$

491



$

494



$

486



$

514



5

%


1

%


$

1,009



$

1,003



1

%

Non-interest income


180



238



223



221



200



(24)



(10)



418



387



8


Total net revenue(6)


698



729



717



707



714



(4)



(2)



1,427



1,390



3


Provision for credit losses


427



856



62



93



82



(50)



**



1,283



151



**


Non-interest expense


425



412



441



414



427



3



—



837



844



(1)


Income (loss) from continuing operations before income taxes


(154)



(539)



214



200



205



(71)



**



(693)



395



**


Income tax provision (benefit)


(36)



(128)



50



46



48



(72)



**



(164)



92



**


Income (loss) from continuing operations, net of tax


$

(118)



$

(411)



$

164



$

154



$

157



(71)



**



$

(529)



$

303



**


Selected performance metrics:





















Period-end loans held for investment


$

77,490



$

81,160



$

74,508



$

73,659



$

71,992



(5)



8



$

77,490



$

71,992



8


Average loans held for investment


79,759



76,442



74,189



72,507



71,997



4



11



78,101



71,719



9


Average yield on loans held for investment(6)(7)


3.00

%


3.88

%


4.22

%


4.45

%


4.75

%


(88)

bps


(175)

bps


3.43

%


4.68

%


(125)

bps

Period-end deposits


$

35,669



$

32,822



$

32,134



$

30,923



$

30,761



9

%


16

%


$

35,669



$

30,761



16

%

Average deposits


34,635



32,238



32,034



30,693



31,364



7



10



33,437



31,092



8


Average deposits interest rate


0.30

%


0.89

%


1.10

%


1.25

%


1.28

%


(59)

bps


(98)

bps


0.58

%


1.19

%


(61)

bps

Net charge-off rate


0.51



0.57



0.35



0.33



0.09



(6)



42



0.54



0.08



46


Nonperforming loan rate(3)


0.85



0.61



0.60



0.61



0.50



24



35



0.85



0.50



35


Nonperforming asset rate(4)


0.85



0.61



0.60



0.61



0.50



24



35



0.85



0.50



35


Risk category:(12)





















Noncriticized


$

70,881



$

77,714



$

71,848



$

71,144



$

69,390



(9)

%


2

%


$

70,881



$

69,390



2

%

Criticized performing


5,949



2,952



2,181



2,035



2,211



102



169



5,949



2,211



169


Criticized nonperforming


660



494



448



449



360



34



83



660



360



83


PCI loans


—



—



31



31



31



—



**



—



31



**


Total commercial banking loans


$

77,490



$

81,160



$

74,508



$

73,659



$

71,992



(5)



8



$

77,490



$

71,992



8


Risk category as a percentage of period-end loans held for investment:(12)
























Noncriticized


91.4

%


95.8

%


96.5

%


96.6

%


96.4

%


(4)



(5)



91.4

%


96.4

%


(5)


Criticized performing


7.7



3.6



2.9



2.8



3.1



4



5



7.7



3.1



5


Criticized nonperforming


0.9



0.6



0.6



0.6



0.5



30

bps


40

bps


0.9



0.5



40

bps

Total commercial banking loans


100.0

%


100.0

%


100.0

%


100.0

%


100.0

%






100.0

%


100.0

%




CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total














2020 Q2 vs.


Six Months Ended June 30,



2020


2020


2019


2019


2019


2020


2019






2020 vs.

(Dollars in millions)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2020


2019


2019

Other





















Earnings:





















Net interest income (loss)


$

(92)



$

175



$

116



$

23



$

(8)



**



**



$

83



$

25



**


Non-interest loss


(26)



(51)



(44)



(34)



(26)



(49)

%


—



(77)



(31)



148

%

Total net revenue (loss)(6)


(118)



124



72



(11)



(34)



**



**



6



(6)



**


Provision (benefit) for credit losses


(1)



5



—



—



—



**



**



4



—



**


Non-interest expense(13)(14)


340



118



123



113



97



188



**



458



186



146


Income (loss) from continuing operations before income taxes


(457)



1



(51)



(124)



(131)



**



**



(456)



(192)



138


Income tax benefit


(305)



(113)



(78)



(60)



(109)



170



180

%


(418)



(215)



94


Income (loss) from continuing operations, net of tax


$

(152)



$

114



$

27



$

(64)



$

(22)



**



**



$

(38)



$

23



**


Selected performance metrics:





















Period-end deposits


$

21,765



$

19,260



$

17,464



$

19,802



$

18,554



13



17



$

21,765



$

18,554



17


Average deposits


21,416



17,344



18,223



19,456



18,106



23



18



19,379



18,809



3


Total





















Earnings:





















Net interest income


$

5,460



$

6,025



$

6,066



$

5,737



$

5,746



(9)

%


(5)

%


$

11,485



$

11,537



—


Non-interest income


1,096



1,224



1,361



1,222



1,378



(10)



(20)



2,320



2,670



(13)

%

Total net revenue


6,556



7,249



7,427



6,959



7,124



(10)



(8)



13,805



14,207



(3)


Provision for credit losses


4,246



5,423



1,818



1,383



1,342



(22)



**



9,669



3,035



**


Non-interest expense


3,770



3,729



4,161



3,872



3,779



1



—



7,499



7,450



1


Income (loss) from continuing operations before income taxes


(1,460)



(1,903)



1,448



1,704



2,003



(23)



**



(3,363)



3,722



**


Income tax provision (benefit)


(543)



(563)



270



375



387



(4)



**



(1,106)



696



**


Income (loss) from continuing operations, net of tax


$

(917)



$

(1,340)



$

1,178



$

1,329



$

1,616



(32)



**



$

(2,257)



$

3,026



**


Selected performance metrics:





















Period-end loans held for investment


$

251,512



$

262,990



$

265,809



$

249,355



$

244,460



(4)



3



$

251,512



$

244,460



3


Average loans held for investment


253,358



262,889



258,870



246,147



242,653



(4)



4



258,124



242,307



7


Period-end deposits


304,238



269,689



262,697



257,148



254,535



13



20



304,238



254,535



20


Average deposits


288,344



264,653



260,040



255,082



253,634



9



14



276,498



252,528



9



CAPITAL ONE FINANCIAL CORPORATION (COF)

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



(1)

Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit

losses, with a corresponding increase to credit card loans held for investment.

(2)

Metrics for Q2 2020 and Q1 2020 include the impact of COVID-19 customer assistance programs where applicable.

(3)

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.

(4)

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.

(5)

Represents foreign currency translation adjustments.

(6)

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.

(7)

Average yield on loans held for investment is calculated based on annualized interest income for the period divided by average loans held for investment

during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and

does not include any allocations, such as funds transfer pricing.

(8)

Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans held for investment during the period

for the respective loan category.

(9)

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

(10)

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.

(11)

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.

(12)

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

(13)

Includes charges incurred as a result of restructuring activities.

(14)

Includes net Cybersecurity Incident expenses of $11 million in Q2 2020, $4 million in Q1 2020, $16 million in Q4 2019 and $22 million in Q3 2019, respectively.

**

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)


June 30,
2020


March 31,
2020


December 31,
2019


September 30,
2019


June 30,
2019

Regulatory Capital Metrics











Common equity excluding AOCI


$

50,614



$

51,018



$

52,001



$

51,959



$

51,236


Adjustments:











AOCI, net of tax(2)


(145)



(170)



1,156



453



170


Goodwill, net of related deferred tax liabilities


(14,449)



(14,453)



(14,465)



(14,439)



(14,365)


Intangible assets, net of related deferred tax liabilities


(135)



(151)



(170)



(180)



(194)


Other(2)


—



—



(360)



(588)



(401)


Common equity Tier 1 capital


$

35,885



$

36,244



$

38,162



$

37,205



$

36,446


Tier 1 capital


$

41,094



$

41,453



$

43,015



$

43,028



$

40,806


Total capital(3)


48,506



48,775



50,350



50,174



47,919


Risk-weighted assets


290,062



302,871



313,155



298,130



295,255


Adjusted average assets(4)


398,062



377,360



368,511



360,266



356,518


Capital Ratios











Common equity Tier 1 capital(5)


12.4

%


12.0

%


12.2

%


12.5

%


12.3

%

Tier 1 capital(6)


14.2



13.7



13.7



14.4



13.8


Total capital(7)


16.7



16.1



16.1



16.8



16.2


Tier 1 leverage(4)


10.3



11.0



11.7



11.9



11.4


Tangible common equity ("TCE")(8)


8.8



9.6



10.2



10.3



10.2


Reconciliation of Non-GAAP Measures


The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results. These adjusted results provide alternate measurements of our operating

performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.




2020


2020


Six Months Ended



Q2


Q1


June 30, 2020

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


Reported
Results


Adj.(9)


Adjusted
Results


Reported
Results


Adj.(9)


Adjusted
Results


Reported
Results


Adj.(9)


Adjusted
Results

Selected income statement data:



















Net interest income


$

5,460



—



$

5,460



$

6,025



—



$

6,025



$

11,485



—



$

11,485


Non-interest income


1,096



—



1,096



1,224



—



1,224



2,320



—



2,320


Total net revenue


6,556



—



6,556



7,249



—



7,249



13,805



—



13,805


Provision for credit losses


4,246



—



4,246



5,423



—



5,423



9,669



—



9,669


Non-interest expense


3,770



$

(276)



3,494



3,729



$

(49)



3,680



7,499



$

(325)



7,174


Income (loss) from continuing operations before income taxes


(1,460)



276



(1,184)



(1,903)



49



(1,854)



(3,363)



325



(3,038)


Income tax provision (benefit)


(543)



3



(540)



(563)



12



(551)



(1,106)



15



(1,091)


Income (loss) from continuing operations, net of tax


(917)



273



(644)



(1,340)



37



(1,303)



(2,257)



310



(1,947)


Income (loss) from discontinued operations, net of tax


(1)



—



(1)



—



—



—



(1)



—



(1)


Net income (loss)


(918)



273



(645)



(1,340)



37



(1,303)



(2,258)



310



(1,948)


Dividends and undistributed earnings allocated to participating securities(10)


(1)



—



(1)



(3)



—



(3)



(4)



—



(4)


Preferred stock dividends


(90)



—



(90)



(55)



—



(55)



(145)



—



(145)


Issuance cost for redeemed preferred stock


—



—



—



(22)



—



(22)



(22)



—



(22)


Net income (loss) available to common stockholders


$

(1,009)



$

273



$

(736)



$

(1,420)



$

37



$

(1,383)



$

(2,429)



$

310



$

(2,119)


Selected performance metrics:



















Diluted EPS(10)


$

(2.21)



$

0.60



$

(1.61)



$

(3.10)



$

0.08



$

(3.02)



$

(5.31)



$

0.67



$

(4.64)


Efficiency ratio


57.50

%


(421)

bps


53.29

%


51.44

%


(67)

bps


50.77

%


54.32

%


(235)

bps


51.97

%

Operating efficiency ratio


53.34



(421)



49.13



44.67



(68)



43.99



48.79



(236)



46.43




























































2019


2019


Six Months Ended



Q2


Q1


June 30, 2019

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


Reported
Results


Adj.(9)


Adjusted
Results


Reported
Results


Adj.(9)


Adjusted
Results


Reported
Results


Adj.(9)


Adjusted
Results

Selected income statement data:



















Net interest income


$

5,746



—



$

5,746



$

5,791



—



$

5,791



$

11,537



—



$

11,537


Non-interest income


1,378



$

1



1,379



1,292



—



1,292



2,670



$

1



2,671


Total net revenue


7,124



1



7,125



7,083



—



7,083



14,207



1



14,208


Provision for credit losses


1,342



—



1,342



1,693



—



1,693



3,035



—



3,035


Non-interest expense


3,779



(81)



3,698



3,671



$

(25)



3,646



7,450



(106)



7,344


Income from continuing operations before income taxes


2,003



82



2,085



1,719



25



1,744



3,722



107



3,829


Income tax provision


387



19



406



309



6



315



696



25



721


Income from continuing operations, net of tax


1,616



63



1,679



1,410



19



1,429



3,026



82



3,108


Income from discontinued operations, net of tax


9



—



9



2



—



2



11



—



11


Net income


1,625



63



1,688



1,412



19



1,431



3,037



82



3,119


Dividends and undistributed earnings allocated to participating securities(10)


(12)



(1)



(13)



(12)



—



(12)



(24)



(1)



(25)


Preferred stock dividends


(80)



—



(80)



(52)



—



(52)



(132)



—



(132)


Net income available to common stockholders


$

1,533



$

62



$

1,595



$

1,348



$

19



$

1,367



$

2,881



$

81



$

2,962


Selected performance metrics:



















Diluted EPS(10)


$

3.24



$

0.13



$

3.37



$

2.86



$

0.04



$

2.90



$

6.10



$

0.17



$

6.27


Efficiency ratio


53.05

%


(115)

bps


51.90

%


51.83

%


(35)

bps


51.48

%


52.44

%


(75)

bps


51.69

%

Operating efficiency ratio


45.38



(114)



44.24



44.53



(35)



44.18



44.96



(75)



44.21


Reconciliation of Non-GAAP Measures



The following non-GAAP measures consist of TCE, tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return

on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. While our non-

GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly-titled measures

reported by other companies. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.




2020


2020


2019


2019


2019

(Dollars in millions)


Q2


Q1


Q4


Q3


Q2

Tangible Common Equity (Period-End)











Stockholders' equity


$

56,045



$

56,830



$

58,011



$

58,235



$

55,767


Goodwill and intangible assets(11)


(14,869)



(14,888)



(14,932)



(14,940)



(14,886)


Noncumulative perpetual preferred stock


(5,209)



(5,209)



(4,853)



(5,823)



(4,360)


Tangible common equity


$

35,967



$

36,733



$

38,226



$

37,472



$

36,521


Tangible Common Equity (Average)











Stockholders' equity


$

57,623



$

58,568



$

58,148



$

57,245



$

54,570


Goodwill and intangible assets(11)


(14,880)



(14,930)



(14,967)



(14,908)



(14,900)


Noncumulative perpetual preferred stock


(5,209)



(5,382)



(5,506)



(4,678)



(4,360)


Tangible common equity


$

37,534



$

38,256



$

37,675



$

37,659



$

35,310


Tangible Assets (Period-End)











Total assets


$

421,296



$

396,878



$

390,365



$

378,810



$

373,619


Goodwill and intangible assets(11)


(14,869)



(14,888)



(14,932)



(14,940)



(14,886)


Tangible assets


$

406,427



$

381,990



$

375,433



$

363,870



$

358,733


Tangible Assets (Average)











Total assets


$

411,075



$

390,380



$

383,162



$

374,905



$

371,095


Goodwill and intangible assets(11)


(14,880)



(14,930)



(14,967)



(14,908)



(14,900)


Tangible assets


$

396,195



$

375,450



$

368,195



$

359,997



$

356,195



__________

(1)   Regulatory capital metrics and capital ratios as of June 30, 2020 are preliminary and therefore subject to change.

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

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

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

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

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

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

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

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




2020


2020


Six Months Ended


2019


2019


Six Months Ended

(Dollars in millions)


Q2


Q1


June 30, 2020


Q2


Q1


June 30, 2019

Legal reserve builds


$

265



$

45



$

310



—



—



—


Cybersecurity Incident expenses, net of insurance


11



4



15



—



—



—


Walmart launch and related integration expenses


—



—



—



$

54



$

25



$

79


Restructuring charges


—



—



—



28



—



28


Total


276



49



325



82



25



107


Income tax provision


3



12



15



19



6



25


Net income


$

273



$

37



$

310



$

63



$

19



$

82



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

(11)    Includes impact of related deferred taxes.

SOURCE Capital One Financial Corporation