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Capital One Reports First Quarter 2021 Net Income of $3.3 billion, or $7.03 per share

MCLEAN, Va., April 27, 2021 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2021 of $3.3 billion, or $7.03 per diluted common share, compared with net income of $2.6 billion, or $5.35 per diluted common share in the fourth quarter of 2020, and with a net loss of $1.3 billion, or $3.10 per diluted common share in the first quarter of 2020.

Capital One Financial (PRNewsfoto/Capital One Financial Corporati)

"Strikingly strong credit drove another quarter of record earnings per share, and our investments to transform our technology and how we work are paying off," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "Our modern technology is powering our response to the pandemic, and putting us in a strong position for opportunities that emerge as sweeping digital change transforms banking."

The quarter included the following notable item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact

Equity investment loss

$

(75)

$

(0.12)

All comparisons below are for the first quarter of 2021 compared with the fourth quarter of 2020 unless otherwise noted.

First Quarter 2021 Income Statement Summary:

  • Total net revenue decreased 3 percent to $7.1 billion.
  • Total non-interest expense decreased 7 percent to $3.7 billion:
    • 11 percent decrease in marketing.
    • 6 percent decrease in operating expenses.
  • Pre-provision earnings increased 1 percent to $3.4 billion(1).
  • Provision for credit losses decreased $1.1 billion to $(823) million:
    • Net charge-offs of $740 million.
    • $1.6 billion loan reserve release.
  • Net interest margin of 5.99 percent, an decrease of 6 basis points.
  • Efficiency ratio of 52.58 percent.
  • Operating efficiency ratio of 45.54 percent.

First Quarter 2021 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 14.6 percent at March 31, 2021.
  • Period-end loans held for investment in the quarter decreased $8.5 billion, or 3 percent, to $243.1 billion.
    • Credit Card period-end loans decreased $7.8 billion, or 7 percent, to $99.1 billion.
      • Domestic Card period-end loans decreased $7.4 billion, or 8 percent, to $91.1 billion.
    • Consumer Banking period-end loans increased $1.3 billion, or 2 percent, to $70.2 billion.
      • Auto period-end loans increased $1.3 billion, or 2 percent, to $67.1 billion.
    • Commercial Banking period-end loans decreased $2.0 billion, or 3 percent, to $73.8 billion.
  • Average loans held for investment in the quarter decreased $3.8 billion, or 2 percent, to $243.9 billion.
    • Credit Card average loans decreased $3.0 billion, or 3 percent, to $100.5 billion.
      • Domestic Card average loans decreased $2.9 billion, or 3 percent, to $92.6 billion.
    • Consumer Banking average loans increased $426 million, or 1 percent, to $69.2 billion.
      • Auto average loans increased $595 million, or 1 percent, to $66.2 billion.
    • Commercial Banking average loans decreased $1.2 billion, or 2 percent, to $74.2 billion.
  • Period-end total deposits increased $4.9 billion, or 2 percent, to $310.3 billion, while average deposits increased $543 million, or less than 1 percent, to $305.1 billion.
  • Interest-bearing deposits rate paid decreased 12 basis points to 0.39 percent.

 

(1)

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

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on April 27, 2021 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through May 11, 2021 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, 2020.

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 $310.3 billion in deposits and $425.2 billion in total assets as of  March 31, 2021. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement(1)(2)

First Quarter 2021

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

7


Table 5:

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

10


Table 6:

Average Balances, Net Interest Income and Net Interest Margin

11


Table 7:

Loan Information and Performance Statistics

12


Table 8:

Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

15

Business Segment Results



Table 9:

Financial Summary—Business Segment Results

16


Table 10:

Financial & Statistical Summary—Credit Card Business

17


Table 11:

Financial & Statistical Summary—Consumer Banking Business

19


Table 12:

Financial & Statistical Summary—Commercial Banking Business

20


Table 13:

Financial & Statistical Summary—Other and Total

21

Other



Table 14:

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

22


Table 15:

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

23

__________

(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended March 31, 2021 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














2021 Q1 vs.

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


2021


2020


2020


2020


2020


2020


2020


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Income Statement















Net interest income


$

5,822



$

5,873



$

5,555



$

5,460



$

6,025



(1)

%


(3)

%

Non-interest income


1,291



1,464



1,826



1,096



1,224



(12)



5


Total net revenue(1)


7,113



7,337



7,381



6,556



7,249



(3)



(2)


Provision (benefit) for credit losses


(823)



264



331



4,246



5,423



**



**


Non-interest expense:















Marketing


501



563



283



273



491



(11)



2


Operating expense


3,239



3,446



3,265



3,497



3,238



(6)




Total non-interest expense


3,740



4,009



3,548



3,770



3,729



(7)




Income (loss) from continuing operations before income taxes


4,196



3,064



3,502



(1,460)



(1,903)



37



**


Income tax provision (benefit)


869



496



1,096



(543)



(563)



75



**


Income (loss) from continuing operations, net of tax


3,327



2,568



2,406



(917)



(1,340)



30



**


Loss from discontinued operations, net of tax


(2)



(2)





(1)







**


Net income (loss)


3,325



2,566



2,406



(918)



(1,340)



30



**


Dividends and undistributed earnings allocated to participating securities(2)


(28)



(19)



(20)



(1)



(3)



47



**


Preferred stock dividends


(61)



(68)



(67)



(90)



(55)



(10)



11


Issuance cost for redeemed preferred stock(3)




(17)







(22)



**



**


Net income (loss) available to common stockholders


$

3,236



$

2,462



$

2,319



$

(1,009)



$

(1,420)



31



**


Common Share Statistics















Basic earnings per common share:(2)















Net income (loss) from continuing operations


$

7.06



$

5.36



$

5.07



$

(2.21)



$

(3.10)



32

%


**


Net income (loss) per basic common share


$

7.06



$

5.36



$

5.07



$

(2.21)



$

(3.10)



32



**


Diluted earnings per common share:(2)















Net income (loss) from continuing operations


$

7.03



$

5.35



$

5.06



$

(2.21)



$

(3.10)



31



**


Net income (loss) per diluted common share


$

7.03



$

5.35



$

5.06



$

(2.21)



$

(3.10)



31



**


Weighted-average common shares outstanding (in millions):















Basic


458.6



459.1



457.8



456.7



457.6






Diluted


460.1



460.2



458.5



456.7



457.6





1

%

Common shares outstanding (period-end, in millions)


456.8



459.0



457.4



456.3



455.3






Dividends declared and paid per common share


$

0.40



$

0.10



$

0.10



$

0.40



$

0.40



**




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


90.96



88.34



83.67



78.82



80.68



3



13















2021 Q1 vs.

(Dollars in millions)


2021


2020


2020


2020


2020


2020


2020


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Balance Sheet (Period-End)















Loans held for investment


$

243,131



$

251,624



$

248,223



$

251,512



$

262,990



(3)

%


(8)

%

Interest-earning assets


392,485



388,917



390,040



389,829



364,472



1



8


Total assets


425,175



421,602



421,883



421,296



396,878



1



7


Interest-bearing deposits


276,325



274,300



276,092



275,183



245,142



1



13


Total deposits


310,328



305,442



305,725



304,238



269,689



2



15


Borrowings


38,450



40,539



42,795



44,900



55,681



(5)



(31)


Common equity


56,341



55,356



53,093



50,835



51,620



2



9


Total stockholders' equity


61,188



60,204



58,424



56,045



56,830



2



8


Balance Sheet (Average Balances)















Loans held for investment


$

243,937



$

247,689



$

249,511



$

253,358



$

262,889



(2)

%


(7)

%

Interest-earning assets


388,572



388,252



391,451



378,145



355,347





9


Total assets


421,808



420,011



422,854



411,075



390,380





8


Interest-bearing deposits


273,358



274,142



276,339



261,256



241,115





13


Total deposits


305,056



304,513



305,516



288,344



264,653





15


Borrowings


39,911



40,662



44,161



49,827



51,795



(2)



(23)


Common equity


55,775



54,220



51,995



52,413



53,186



3



5


Total stockholders' equity


60,623



59,389



57,223



57,623



58,568



2



4


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated














2021 Q1 vs.

(Dollars in millions, except as noted)


2021


2020


2020


2020


2020


2020


2020


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Performance Metrics















Net interest income growth (period over period)


(1)

%


6

%


2

%


(9)

%


(1)

%


**



**


Non-interest income growth (period over period)


(12)



(20)



67



(10)



(10)



**



**


Total net revenue growth (period over period)


(3)



(1)



13



(10)



(2)



**



**


Total net revenue margin(5)


7.32



7.56



7.54



6.93



8.16



(24)

bps


(84)

bps

Net interest margin(6)


5.99



6.05



5.68



5.78



6.78



(6)



(79)


Return on average assets


3.16



2.45



2.28



(0.89)



(1.37)



71



**


Return on average tangible assets(7)


3.27



2.54



2.36



(0.93)



(1.43)



73



**


Return on average common equity(8)


23.22



18.18



17.84



(7.69)



(10.68)



5

%


**


Return on average tangible common equity(9)


31.61



25.02



24.98



(10.74)



(14.85)



7



**


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


6.13



6.47



5.69



5.95



5.67



(34)

bps


46

bps

Efficiency ratio(10)


52.58



54.64



48.07



57.50



51.44



(206)



114


Operating efficiency ratio(11)


45.54



46.97



44.24



53.34



44.67



(143)



87


Effective income tax rate for continuing operations


20.7



16.2



31.3



37.2



29.6



5

%


(9)

%

Employees (period-end, in thousands)


51.7



52.0



52.5



53.1



52.1



(1)



(1)


Credit Quality Metrics















Allowance for credit losses


$

14,017



$

15,564



$

16,129



$

16,832



$

14,073



(10)

%



Allowance coverage ratio


5.77

%


6.19

%


6.50

%


6.69

%


5.35

%


(42)

bps


42

bps

Net charge-offs


$

740



$

856



$

1,073



$

1,505



$

1,791



(14)

%


(59)

%

Net charge-off rate(12)


1.21

%


1.38

%


1.72

%


2.38

%


2.72

%


(17)

bps


(151)

bps

30+ day performing delinquency rate(13)


1.82



2.41



1.97



2.09



2.95



(59)



(113)


30+ day delinquency rate(13)


1.98



2.61



2.22



2.30



3.16



(63)



(118)


Capital Ratios(14)















Common equity Tier 1 capital


14.6

%


13.7

%


13.0

%


12.4

%


12.0

%


90

bps


260

bps

Tier 1 capital


16.2



15.3



14.8



14.2



13.7



90



250


Total capital


18.6



17.7



17.3



16.7



16.1



90



250


Tier 1 leverage


11.7



11.2



10.6



10.3



11.0



50



70


Tangible common equity ("TCE")(15)


10.1



10.0



9.4



8.8



9.6



10



50


 

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














2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

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


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Interest income:















Loans, including loans held for sale


$

5,854



$

5,954



$

5,758



$

5,820



$

6,542



(2)

%


(11)

%

Investment securities


391



422



443



482



530



(7)



(26)


Other


16



15



14



16



37



7



(57)


Total interest income


6,261



6,391



6,215



6,318



7,109



(2)



(12)


Interest expense:















Deposits


269



347



476



611



731



(22)



(63)


Securitized debt obligations


32



34



43



56



99



(6)



(68)


Senior and subordinated notes


129



128



132



180



239



1



(46)


Other borrowings


9



9



9



11



15





(40)


Total interest expense


439



518



660



858



1,084



(15)



(60)


Net interest income


5,822



5,873



5,555



5,460



6,025



(1)



(3)


Provision (benefit) for credit losses


(823)



264



331



4,246



5,423



**



**


Net interest income after provision for credit losses


6,645



5,609



5,224



1,214



602



18



**


Non-interest income:















Interchange fees, net


817



818



775



672



752





9


Service charges and other customer-related fees


352



338



320



258



327



4



8


Net securities gains


4





25







**



**


Other


118



308



706



166



145



(62)



(19)


Total non-interest income


1,291



1,464



1,826



1,096



1,224



(12)



5


Non-interest expense:















Salaries and associate benefits


1,847



1,755



1,719



1,704



1,627



5



14


Occupancy and equipment


472



572



506



523



517



(17)



(9)


Marketing


501



563



283



273



491



(11)



2


Professional services


292



394



327



304



287



(26)



2


Communications and data processing


302



295



310



308



302



2




Amortization of intangibles


6



8



14



16



22



(25)



(73)


Other


320



422



389



642



483



(24)



(34)


Total non-interest expense


3,740



4,009



3,548



3,770



3,729



(7)




Income (loss) from continuing operations before income taxes


4,196



3,064



3,502



(1,460)



(1,903)



37



**


Income tax provision (benefit)


869



496



1,096



(543)



(563)



75



**


Income (loss) from continuing operations, net of tax


3,327



2,568



2,406



(917)



(1,340)



30



**


Loss from discontinued operations, net of tax


(2)



(2)





(1)







**


Net income (loss)


3,325



2,566



2,406



(918)



(1,340)



30



**


Dividends and undistributed earnings allocated to participating securities(2)


(28)



(19)



(20)



(1)



(3)



47



**


Preferred stock dividends


(61)



(68)



(67)



(90)



(55)



(10)



11


Issuance cost for redeemed preferred stock(3)




(17)







(22)



**



**


Net income (loss) available to common stockholders


$

3,236



$

2,462



$

2,319



$

(1,009)



$

(1,420)



31



**












































2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

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


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Basic earnings per common share:(2)















Net income (loss) from continuing operations


$

7.06



$

5.36



$

5.07



$

(2.21)



$

(3.10)



32

%


**


Net income (loss) per basic common share


$

7.06



$

5.36



$

5.07



$

(2.21)



$

(3.10)



32



**


Diluted earnings per common share:(2)















Net income (loss) from continuing operations


$

7.03



$

5.35



$

5.06



$

(2.21)



$

(3.10)



31



**


Net income (loss) per diluted common share


$

7.03



$

5.35



$

5.06



$

(2.21)



$

(3.10)



31



**


Weighted-average common shares outstanding (in millions):















Basic common shares


458.6



459.1



457.8



456.7



457.6






Diluted common shares


460.1



460.2



458.5



456.7



457.6





1

%

 

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














2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

(Dollars in millions)


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Assets:















Cash and cash equivalents:















Cash and due from banks


$

4,670



$

4,708



$

4,267



$

4,583



$

4,545



(1)

%


3

%

Interest-bearing deposits and other short-term investments


45,825



35,801



39,839



51,235



20,391



28



125


Total cash and cash equivalents


50,495



40,509



44,106



55,818



24,936



25



102


Restricted cash for securitization investors


1,779



262



895



740



364



**



**


Securities available for sale


99,165



100,445



99,853



87,859



81,423



(1)



22


Loans held for investment:















Unsecuritized loans held for investment


219,182



225,698



217,878



222,310



231,318



(3)



(5)


Loans held in consolidated trusts


23,949



25,926



30,345



29,202



31,672



(8)



(24)


Total loans held for investment


243,131



251,624



248,223



251,512



262,990



(3)



(8)


Allowance for credit losses


(14,017)



(15,564)



(16,129)



(16,832)



(14,073)



(10)




Net loans held for investment


229,114



236,060



232,094



234,680



248,917



(3)



(8)


Loans held for sale


2,896



2,710



3,433



711



1,056



7



174


Premises and equipment, net


4,277



4,287



4,333



4,324



4,336





(1)


Interest receivable


1,380



1,471



1,551



1,574



1,687



(6)



(18)


Goodwill


14,654



14,653



14,648



14,645



14,645






Other assets


21,415



21,205



20,970



20,945



19,514



1



10


Total assets


$

425,175



$

421,602



$

421,883



$

421,296



$

396,878



1



7





























2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

(Dollars in millions)


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Liabilities:















Interest payable


$

288



$

352



$

332



$

380



$

359



(18)

%


(20)

%

Deposits:















Non-interest-bearing deposits


34,003



31,142



29,633



29,055



24,547



9



39


Interest-bearing deposits


276,325



274,300



276,092



275,183



245,142



1



13


Total deposits


310,328



305,442



305,725



304,238



269,689



2



15


Securitized debt obligations


12,071



12,414



13,566



15,761



17,141



(3)



(30)


Other debt:















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


842



668



702



573



399



26



111


Senior and subordinated notes


25,467



27,382



28,448



28,481



32,049



(7)



(21)


Other borrowings


70



75



79



85



6,092



(7)



(99)


Total other debt


26,379



28,125



29,229



29,139



38,540



(6)



(32)


Other liabilities


14,921



15,065



14,607



15,733



14,319



(1)



4


Total liabilities


363,987



361,398



363,459



365,251



340,048



1



7

















Stockholders' equity:















Preferred stock


0



0



0



0



0






Common stock


7



7



7



7



7






Additional paid-in capital, net


33,671



33,480



33,793



33,556



33,450



1



1


Retained earnings


43,167



40,088



37,653



35,361



36,552



8



18


Accumulated other comprehensive income


1,783



3,494



3,833



3,981



3,679



(49)



(52)


Treasury stock, at cost


(17,440)



(16,865)



(16,862)



(16,860)



(16,858)



3



3


Total stockholders' equity


61,188



60,204



58,424



56,045



56,830



2



8


Total liabilities and stockholders' equity


$

425,175



$

421,602



$

421,883



$

421,296



$

396,878



1



7


 

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 $180 million in Q1 2021, $177 million in Q4 2020, $235 million in Q3 2020, $318 million in Q2 2020 and $389 million in Q1 2020 for credit card finance charges and fees charged-off as uncollectible.

(2)

Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(3)

On December 1, 2020, we redeemed all outstanding shares of our fixed rate 6.20% non-cumulative perpetual preferred stock Series F, which reduced our net income available to common shareholders by $17 million in Q4 2020. On March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B, which increased our net loss available to common shareholders by $22 million in Q1 2020.

(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 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 include the impact of COVID-19 customer assistance programs where applicable.

(14)

Capital ratios as of the end of Q1 2021 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.

**

Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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





2021 Q1


2020 Q4


2020 Q1

(Dollars in millions, except as noted)


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

Interest-earning assets:



















Loans, including loans held for sale


$

246,675



$

5,854



9.49

%


$

251,135



$

5,954



9.48

%


$

263,631



$

6,542



9.93

%

Investment securities


98,296



391



1.59



97,640



422



1.73



78,212



530



2.71


Cash equivalents and other


43,601



16



0.15



39,477



15



0.15



13,504



37



1.10


Total interest-earning assets


$

388,572



$

6,261



6.45



$

388,252



$

6,391



6.58



$

355,347



$

7,109



8.00


Interest-bearing liabilities:



















Interest-bearing deposits


$

273,358



$

269



0.39



$

274,143



$

347



0.51



$

241,115



$

731



1.21


Securitized debt obligations


12,240



32



1.05



12,651



34



1.08



18,054



99



2.20


Senior and subordinated notes


26,968



129



1.91



27,386



128



1.87



31,342



239



3.04


Other borrowings and liabilities


2,210



9



1.62



2,095



9



1.75



3,779



15



1.62


Total interest-bearing liabilities


$

314,776



$

439



0.56



$

316,275



$

518



0.65



$

294,290



$

1,084



1.47


Net interest income/spread




$

5,822



5.89





$

5,873



5.93





$

6,025



6.53


Impact of non-interest-bearing funding






0.10







0.12







0.25


Net interest margin






5.99

%






6.05

%






6.78

%

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics














2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

(Dollars in millions, except as noted)


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Loans Held for Investment (Period-End)















Credit card:















   Domestic credit card(1)


$

91,099



$

98,504



$

95,541



$

99,390



$

109,549



(8)

%


(17)

%

   International card businesses


8,028



8,452



8,100



7,920



8,248



(5)



(3)


Total credit card


99,127



106,956



103,641



107,310



117,797



(7)



(16)


Consumer banking:















   Auto


67,059



65,762



65,394



63,319



61,364



2



9


   Retail banking


3,143



3,126



3,294



3,393



2,669



1



18


Total consumer banking


70,202



68,888



68,688



66,712



64,033



2



10


Commercial banking:















   Commercial and multifamily real estate


30,008



30,681



31,197



30,953



32,373



(2)



(7)


   Commercial and industrial


43,794



45,099



44,697



46,537



48,787



(3)



(10)


Total commercial banking


73,802



75,780



75,894



77,490



81,160



(3)



(9)


Total loans held for investment


$

243,131



$

251,624



$

248,223



$

251,512



$

262,990



(3)



(8)


Loans Held for Investment (Average)















Credit card:















   Domestic credit card


$

92,594



$

95,453



$

97,306



$

100,996



$

113,711



(3)

%


(19)

%

   International card businesses


7,940



8,108



8,061



7,752



9,065



(2)



(12)


Total credit card


100,534



103,561



105,367



108,748



122,776



(3)



(18)


Consumer banking:















   Auto


66,185



65,590



64,476



61,798



61,005



1



8


   Retail banking


3,049



3,218



3,346



3,053



2,666



(5)



14


Total consumer banking


69,234



68,808



67,822



64,851



63,671



1



9


Commercial banking:















   Commercial and multifamily real estate


29,856



30,825



30,918



31,723



31,081



(3)



(4)


   Commercial and industrial


44,313



44,495



45,404



48,036



45,361





(2)


Total commercial banking


74,169



75,320



76,322



79,759



76,442



(2)



(3)


Total average loans held for investment


$

243,937



$

247,689



$

249,511



$

253,358



$

262,889



(2)



(7)




















2021 Q1 vs.



2021



2020



2020



2020



2020



2020


2020



Q1



Q4



Q3



Q2



Q1



Q4


Q1

Net Charge-Off Rates




















Credit card:




















   Domestic credit card


2.54

%


2.69

%


3.64

%


4.53

%


4.68

%


(15)

bps


(214)

bps

   International card businesses


2.30



1.86



2.89



3.47



4.65



44



(235)


Total credit card


2.52



2.63



3.58



4.46



4.68



(11)



(216)


Consumer banking:




















   Auto


0.47



0.47



0.23



1.16



1.51





(104)


   Retail banking


1.68



1.88



1.38



1.78



2.37



(20)



(69)


Total consumer banking


0.52



0.53



0.28



1.19



1.54



(1)



(102)


Commercial banking:




















   Commercial and multifamily real estate


0.06



0.02



0.41



0.09





4



6


   Commercial and industrial


0.11



0.74



0.45



0.78



0.96



(63)



(85)


Total commercial banking


0.09



0.45



0.43



0.51



0.57



(36)



(48)


Total net charge-offs


1.21



1.38



1.72



2.38



2.72



(17)



(151)


30+ Day Performing Delinquency Rates(2)




















Credit card:




















   Domestic credit card


2.24

%


2.42

%


2.21

%


2.74

%


3.69

%


(18)

bps


(145)

bps

   International card businesses


2.51



2.61



2.15



2.71



3.66



(10)



(115)


Total credit card


2.26



2.44



2.20



2.74



3.69



(18)



(143)


Consumer banking:




















   Auto


3.12



4.78



3.76



3.28



5.29



(166)



(217)


   Retail banking


1.02



1.32



0.83



0.89



1.27



(30)



(25)


Total consumer banking


3.03



4.62



3.62



3.16



5.12



(159)



(209)


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




















Credit card:




















   International card businesses


0.17

%


0.24

%


0.25

%


0.29

%


0.29

%


(7)

bps


(12)

bps

Total credit card


0.01



0.02



0.02



0.02



0.02



(1)



(1)


Consumer banking:




















   Auto


0.29



0.45



0.36



0.41



0.62



(16)



(33)


   Retail banking


1.16



0.96



0.77



0.70



0.88



20



28


Total consumer banking


0.33



0.47



0.38



0.43



0.63



(14)



(30)


Commercial banking:




















   Commercial and multifamily real estate


0.78



0.65



0.58



0.54



0.22



13



56


   Commercial and industrial


1.02



1.00



1.31



1.06



0.87



2



15


Total commercial banking


0.92



0.86



1.01



0.85



0.61



6



31


Total nonperforming loans


0.38



0.40



0.42



0.38



0.35



(2)



3


Total nonperforming assets


0.40



0.41



0.44



0.39



0.37



(1)



3



 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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





Three Months Ended March 31, 2021



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, 2020


$

10,650



$

541



$

11,191



$

2,615



$

100



$

2,715



$

1,658



$

15,564


Charge-offs


(904)



(89)



(993)



(324)



(18)



(342)



(19)



(1,354)


Recoveries


317



43



360



246



5



251



3



614


Net charge-offs


(587)



(46)



(633)



(78)



(13)



(91)



(16)



(740)


Provision (benefit) for credit losses


(491)



(1)



(492)



(132)



6



(126)



(195)



(813)


Allowance build (release) for credit losses


(1,078)



(47)



(1,125)



(210)



(7)



(217)



(211)



(1,553)


Other changes(5)




6



6











6


Balance as of March 31, 2021


9,572



500



10,072



2,405



93



2,498



1,447



14,017


Reserve for unfunded lending commitments:

















Balance as of December 31, 2020














195



195


Provision (benefit) for losses on unfunded lending commitments














(8)



(8)


Balance as of March 31, 2021














187



187


Combined allowance and reserve as of March 31, 2021


$

9,572



$

500



$

10,072



$

2,405



$

93



$

2,498



$

1,634



$

14,204


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results





Three Months Ended March 31, 2021

(Dollars in millions)


Credit Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total

Net interest income (loss)


$

3,372



$

2,030



$

520



$

(100)



$

5,822


Non-interest income (loss)


1,029



141



240



(119)



1,291


Total net revenue (loss)


4,401



2,171



760



(219)



7,113


Provision (benefit) for credit losses


(492)



(126)



(203)



(2)



(823)


Non-interest expense


2,135



1,117



419



69



3,740


Income (loss) from continuing operations before income taxes


2,758



1,180



544



(286)



4,196


Income tax provision (benefit)


653



278



128



(190)



869


Income (loss) from continuing operations, net of tax


$

2,105



$

902



$

416



$

(96)



$

3,327















Three Months Ended December 31, 2020

(Dollars in millions)


Credit Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total

Net interest income (loss)


$

3,413



$

2,012



$

522



$

(74)



$

5,873


Non-interest income


1,054



136



268



6



1,464


Total net revenue (loss)


4,467



2,148



790



(68)



7,337


Provision (benefit) for credit losses


231



60



(28)



1



264


Non-interest expense


2,311



1,121



445



132



4,009


Income (loss) from continuing operations before income taxes


1,925



967



373



(201)



3,064


Income tax provision (benefit)


454



230



88



(276)



496


Income from continuing operations, net of tax


$

1,471



$

737



$

285



$

75



$

2,568















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)













 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business














2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

(Dollars in millions, except as noted)


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Credit Card















Earnings:















Net interest income


$

3,372



$

3,413



$

3,292



$

3,369



$

3,702



(1)

%


(9)

%

Non-interest income


1,029



1,054



1,013



845



911



(2)



13


Total net revenue


4,401



4,467



4,305



4,214



4,613



(1)



(5)


Provision (benefit) for credit losses


(492)



231



450



2,944



3,702



**



**


Non-interest expense


2,135



2,311



2,003



1,969



2,208



(8)



(3)


Income (loss) from continuing operations before income taxes


2,758



1,925



1,852



(699)



(1,297)



43



**


Income tax provision (benefit)


653



454



438



(166)



(306)



44



**


Income (loss) from continuing operations, net of tax


$

2,105



$

1,471



$

1,414



$

(533)



$

(991)



43



**


Selected performance metrics:















Period-end loans held for investment(1)


$

99,127



$

106,956



$

103,641



$

107,310



$

117,797



(7)



(16)


Average loans held for investment


100,534



103,561



105,367



108,748



122,776



(3)



(18)


Average yield on loans outstanding(7)


14.49

%


14.24

%


13.83

%


13.72

%


14.46

%


25

bps


3

bps

Total net revenue margin(8)


17.17



16.92



16.34



15.50



15.03



25



214


Net charge-off rate


2.52



2.63



3.58



4.46



4.68



(11)



(216)


30+ day performing delinquency rate


2.26



2.44



2.20



2.74



3.69



(18)



(143)


30+ day delinquency rate


2.27



2.45



2.21



2.75



3.70



(18)



(143)


Nonperforming loan rate(3)


0.01



0.02



0.02



0.02



0.02



(1)



(1)


Purchase volume(9)


$

108,333



$

117,141



$

107,102



$

90,149



$

99,920



(8)

%


8

%








































2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

(Dollars in millions, except as noted)


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Domestic Card















Earnings:















Net interest income


$

3,095



$

3,129



$

2,995



$

3,094



$

3,381



(1)

%


(8)

%

Non-interest income


959



994



952



795



842



(4)



14


Total net revenue


4,054



4,123



3,947



3,889



4,223



(2)



(4)


Provision (benefit) for credit losses


(491)



231



378



2,906



3,464



**



**


Non-interest expense


1,923



2,063



1,802



1,776



1,984



(7)



(3)


Income (loss) from continuing operations before income taxes


2,622



1,829



1,767



(793)



(1,225)



43



**


Income tax provision (benefit)


619



433



419



(188)



(290)



43



**


Income (loss) from continuing operations, net of tax


$

2,003



$

1,396



$

1,348



$

(605)



$

(935)



43



**


Selected performance metrics:















Period-end loans held for investment(1)


$

91,099



$

98,504



$

95,541



$

99,390



$

109,549



(8)



(17)


Average loans held for investment


92,594



95,453



97,306



100,996



113,711



(3)



(19)


Average yield on loans outstanding(7)


14.34

%


14.07

%


13.57

%


13.52

%


14.30

%


27

bps


4

bps

Total net revenue margin(8)


17.15



16.91



16.22



15.40



14.86



24



229


Net charge-off rate


2.54



2.69



3.64



4.53



4.68



(15)



(214)


30+ day performing delinquency rate


2.24



2.42



2.21



2.74



3.69



(18)



(145)


Purchase volume(9)


$

99,960



$

107,572



$

98,107



$

82,860



$

92,248



(7)

%


8

%

Refreshed FICO scores:(10)















Greater than 660


70

%


69

%


69

%


67

%


65

%


1



5


660 or below


30



31



31



33



35



(1)



(5)


Total


100

%


100

%


100

%


100

%


100

%





 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business














2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

(Dollars in millions, except as noted)


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Consumer Banking















Earnings:















Net interest income


$

2,030



$

2,012



$

1,904



$

1,665



$

1,657



1

%


23

%

Non-interest income


141



136



107



97



126



4



12


Total net revenue


2,171



2,148



2,011



1,762



1,783



1



22


Provision (benefit) for credit losses


(126)



60



(43)



876



860



**



**


Non-interest expense


1,117



1,121



1,011



1,036



991





13


Income (loss) from continuing operations before income taxes


1,180



967



1,043



(150)



(68)



22



**


Income tax provision (benefit)


278



230



247



(36)



(16)



21



**


Income (loss) from continuing operations, net of tax


$

902



$

737



$

796



$

(114)



$

(52)



22



**


Selected performance metrics:















Period-end loans held for investment


$

70,202



$

68,888



$

68,688



$

66,712



$

64,033



2



10


Average loans held for investment


69,234



68,808



67,822



64,851



63,671



1



9


Average yield on loans held for investment(7)


8.16

%


8.28

%


8.36

%


8.41

%


8.46

%


(12)

bps


(30)

bps

Auto loan originations


$

8,833



$

7,371



$

8,979



$

8,292



$

7,640



20

%


16

%

Period-end deposits


254,001



249,815



249,684



246,804



217,607



2



17


Average deposits


249,499



249,419



248,418



232,293



215,071





16


Average deposits interest rate


0.36

%


0.47

%


0.66

%


0.89

%


1.06

%


(11)

bps


(70)

bps

Net charge-off rate


0.52



0.53



0.28



1.19



1.54



(1)



(102)


30+ day performing delinquency rate


3.03



4.62



3.62



3.16



5.12



(159)



(209)


30+ day delinquency rate


3.25



5.00



3.90



3.48



5.65



(175)



(240)


Nonperforming loan rate(3)


0.33



0.47



0.38



0.43



0.63



(14)



(30)


Nonperforming asset rate(4)


0.39



0.54



0.43



0.46



0.71



(15)



(32)


Auto—At origination FICO scores:(11)















Greater than 660


47

%


46

%


46

%


46

%


47

%


1

%



621 - 660


20



20



20



20



20






620 or below


33



34



34



34



33



(1)




Total


100

%


100

%


100

%


100

%


100

%




















 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business














2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

(Dollars in millions, except as noted)


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Commercial Banking















Earnings:















Net interest income


$

520



$

522



$

517



$

518



$

491





6

%

Non-interest income


240



268



237



180



238



(10)

%


1


Total net revenue(6)


760



790



754



698



729



(4)



4


Provision (benefit) for credit losses


(203)



(28)



(74)



427



856



**



**


Non-interest expense


419



445



424



425



412



(6)



2


Income (loss) from continuing operations before income taxes


544



373



404



(154)



(539)



46



**


Income tax provision (benefit)


128



88



95



(36)



(128)



45



**


Income (loss) from continuing operations, net of tax


$

416



$

285



$

309



$

(118)



$

(411)



46



**


Selected performance metrics:















Period-end loans held for investment


$

73,802



$

75,780



$

75,894



$

77,490



$

81,160



(3)



(9)


Average loans held for investment


74,169



75,320



76,322



79,759



76,442



(2)



(3)


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


2.76

%


2.83

%


2.82

%


3.00

%


3.88

%


(7)

bps


(112)

bps

Period-end deposits


$

41,552



$

39,590



$

36,783



$

35,669



$

32,822



5

%


27

%

Average deposits


40,107



38,676



36,278



34,635



32,238



4



24


Average deposits interest rate


0.18

%


0.23

%


0.25

%


0.30

%


0.89

%


(5)

bps


(71)

bps

Net charge-off rate


0.09



0.45



0.43



0.51



0.57



(36)



(48)


Nonperforming loan rate(3)


0.92



0.86



1.01



0.85



0.61



6



31


Nonperforming asset rate(4)


0.92



0.86



1.01



0.85



0.61



6



31


Risk category:(12)















Noncriticized


$

66,299



$

67,964



$

68,533



$

70,881



$

77,714



(2)

%


(15)

%

Criticized performing


6,821



7,166



6,593



5,949



2,952



(5)



131


Criticized nonperforming


682



650



768



660



494



5



38


Total commercial banking loans


$

73,802



$

75,780



$

75,894



$

77,490



$

81,160



(3)



(9)


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



















Noncriticized


89.9

%


89.6

%


90.3

%


91.4

%


95.8

%


30

bps


(590)

bps

Criticized performing


9.2



9.5



8.7



7.7



3.6



(30)



560


Criticized nonperforming


0.9



0.9



1.0



0.9



0.6





30


Total commercial banking loans


100.0

%


100.0

%


100.0

%


100.0

%


100.0

%





 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total














2021 Q1 vs.



2021


2020


2020


2020


2020


2020


2020

(Dollars in millions)


Q1


Q4


Q3


Q2


Q1


Q4


Q1

Other















Earnings:















Net interest income (loss)


$

(100)



$

(74)



$

(158)



$

(92)



$

175



35

%


**


Non-interest income (loss)


(119)



6



469



(26)



(51)



**



133

%

Total net revenue (loss)(6)


(219)



(68)



311



(118)



124



**



**


Provision (benefit) for credit losses


(2)



1



(2)



(1)



5



**



**


Non-interest expense(13)


69



132



110



340



118



(48)



(42)


Income (loss) from continuing operations before income taxes


(286)



(201)



203



(457)



1



42



**


Income tax provision (benefit)


(190)



(276)



316



(305)



(113)



(31)



68


Income (loss) from continuing operations, net of tax


$

(96)



$

75



$

(113)



$

(152)



$

114



**



**


Selected performance metrics:















Period-end deposits


$

14,775



$

16,037



$

19,258



$

21,765



$

19,260



(8)



(23)


Average deposits


15,450



16,418



20,820



21,416



17,344



(6)



(11)


Total















Earnings:















Net interest income


$

5,822



$

5,873



$

5,555



$

5,460



$

6,025



(1)

%


(3)

%

Non-interest income


1,291



1,464



1,826



1,096



1,224



(12)



5


Total net revenue


7,113



7,337



7,381



6,556



7,249



(3)



(2)


Provision (benefit) for credit losses


(823)



264



331



4,246



5,423



**



**


Non-interest expense


3,740



4,009



3,548



3,770



3,729



(7)




Income (loss) from continuing operations before income taxes


4,196



3,064



3,502



(1,460)



(1,903)



37



**


Income tax provision (benefit)


869



496



1,096



(543)



(563)



75



**


Income (loss) from continuing operations, net of tax


$

3,327



$

2,568



$

2,406



$

(917)



$

(1,340)



30



**


Selected performance metrics:















Period-end loans held for investment


$

243,131



$

251,624



$

248,223



$

251,512



$

262,990



(3)



(8)


Average loans held for investment


243,937



247,689



249,511



253,358



262,889



(2)



(7)


Period-end deposits


310,328



305,442



305,725



304,238



269,689



2



15


Average deposits


305,056



304,513



305,516



288,344



264,653





15


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



(1)

We reclassified $2.1 billion in partnership loans to held for sale as of September 30, 2020.

(2)

Metrics 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 is calculated based on annualized interest income for the period divided by average loans during the period. Annualized interest income does not include any allocations, such as funds transfer pricing.

(8)

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

(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.

**

Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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





Basel III Standardized Approach

(Dollars in millions, except as noted)


March 31,

2021


December 31,

2020


September 30,

2020


June 30,

2020


March 31,

2020

Regulatory Capital Metrics











Common equity excluding AOCI


$

57,606



$

55,299



$

52,839



$

50,614



$

51,018


Adjustments:











AOCI, net of tax(2)


(13)



(29)



(122)



(145)



(170)


Goodwill, net of related deferred tax liabilities


(14,444)



(14,448)



(14,448)



(14,449)



(14,453)


Intangible assets, net of related deferred tax liabilities


(81)



(86)



(95)



(135)



(151)


Other


(17)










Common equity Tier 1 capital


$

43,051



$

40,736



$

38,174



$

35,885



$

36,244


Tier 1 capital


$

47,898



$

45,583



$

43,505



$

41,094



$

41,453


Total capital(3)


54,779



52,788



50,955



48,508



48,775


Risk-weighted assets


295,187



297,903



293,852



290,222



302,871


Adjusted average assets(4)


408,596



406,762



409,602



398,062



377,360


Capital Ratios











Common equity Tier 1 capital(5)


14.6

%


13.7

%


13.0

%


12.4

%


12.0

%

Tier 1 capital(6)


16.2



15.3



14.8



14.2



13.7


Total capital(7)


18.6



17.7



17.3



16.7



16.1


Tier 1 leverage(4)


11.7



11.2



10.6



10.3



11.0


Tangible common equity ("TCE")(8)


10.1



10.0



9.4



8.8



9.6


 

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.




2021


2020


2020

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


Q1


Q4


Q1

Adjusted diluted EPS:







Net income (loss) available to common stockholders (GAAP)


$

3,236



$

2,462



$

(1,420)


Legal reserve activity, including insurance recoveries




(37)



45


Cybersecurity Incident expenses, net of insurance




6



4


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


3,236



2,431



(1,371)


Income tax impacts




5



(12)


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


$

3,236



$

2,436



$

(1,383)









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


460.1



460.2



457.6









Diluted EPS (GAAP)


$

7.03



$

5.35



$

(3.10)


Impact of adjustments noted above




(0.06)



0.08


Adjusted diluted EPS (non-GAAP)


$

7.03



$

5.29



$

(3.02)









Adjusted efficiency ratio:







Non-interest expense (GAAP)


$

3,740



$

4,009



$

3,729


Legal reserve activity, including insurance recoveries




37



(45)


Cybersecurity Incident expenses, net of insurance




(6)



(4)


Adjusted non-interest expense (non-GAAP)


$

3,740



$

4,040



$

3,680









Total net revenue (GAAP)


$

7,113



$

7,337



$

7,249









Efficiency ratio (GAAP)


52.58

%


54.64

%


51.44

%

Impact of adjustments noted above




42

bps


(67)

bps

Adjusted efficiency ratio (non-GAAP)


52.58

%


55.06

%


50.77

%








Adjusted operating efficiency ratio:







Operating expense (GAAP)


$

3,239



$

3,446



$

3,238


Legal reserve activity, including insurance recoveries




37



(45)


Cybersecurity Incident expenses, net of insurance




(6)



(4)


Adjusted operating expense (non-GAAP)


$

3,239



$

3,477



$

3,189









Total net revenue (GAAP)


$

7,113



$

7,337



$

7,249









Operating efficiency ratio (GAAP)


45.54

%


46.97

%


44.67

%

Impact of adjustments noted above




42

bps


(68)

bps

Adjusted operating efficiency ratio (non-GAAP)


45.54

%


47.39

%


43.99

%

 

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.




2021


2020


2020


2020


2020

(Dollars in millions)


Q1


Q4


Q3


Q2


Q1

Tangible Common Equity (Period-End)











Stockholders' equity


$

61,188



$

60,204



$

58,424



$

56,045



$

56,830


Goodwill and intangible assets(9)


(14,789)



(14,809)



(14,825)



(14,869)



(14,888)


Noncumulative perpetual preferred stock


(4,847)



(4,847)



(5,330)



(5,209)



(5,209)


Tangible common equity


$

41,552



$

40,548



$

38,269



$

35,967



$

36,733


Tangible Common Equity (Average)











Stockholders' equity


$

60,623



$

59,389



$

57,223



$

57,623



$

58,568


Goodwill and intangible assets(9)


(14,807)



(14,824)



(14,867)



(14,880)



(14,930)


Noncumulative perpetual preferred stock


(4,847)



(5,168)



(5,228)



(5,209)



(5,382)


Tangible common equity


$

40,969



$

39,397



$

37,128



$

37,534



$

38,256


Tangible Assets (Period-End)











Total assets


$

425,175



$

421,602



$

421,883



$

421,296



$

396,878


Goodwill and intangible assets(9)


(14,789)



(14,809)



(14,825)



(14,869)



(14,888)


Tangible assets


$

410,386



$

406,793



$

407,058



$

406,427



$

381,990


Tangible Assets (Average)











Total assets


$

421,808



$

420,011



$

422,854



$

411,075



$

390,380


Goodwill and intangible assets(9)


(14,807)



(14,824)



(14,867)



(14,880)



(14,930)


Tangible assets


$

407,001



$

405,187



$

407,987



$

396,195



$

375,450


__________

(1)

Regulatory capital metrics and capital ratios as of March 31, 2021 are preliminary and therefore subject to change.

(2)

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

(3)

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

(4)

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

(5)

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

(6)

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

(7)

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

(8)

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

(9) 

Includes impact of related deferred taxes.

 

Cision View original content:http://www.prnewswire.com/news-releases/capital-one-reports-first-quarter-2021-net-income-of-3-3-billion-or-7-03-per-share-301278330.html

SOURCE Capital One Financial Corporation

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