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 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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