Capital One Reports Second Quarter 2021 Net Income of $3.5 billion, or $7.62 per share

MCLEAN, Va., July 22, 2021 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2021 of $3.5 billion, or $7.62 per diluted common share, compared with net income of $3.3 billion, or $7.03 per diluted common share in the first quarter of 2021, and with a net loss of $918 million, or $2.21 per diluted common share in the second quarter of 2020. Excluding adjusting items, net income for the second quarter of 2021 was $7.71 per diluted common share.(1)

"We are seeing increasing near-term opportunities to build our franchise as we emerge from the pandemic," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "Our modern technology is powering our current performance and setting us up to capitalize on the accelerating digital revolution in banking."

The quarter included the following adjusting item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact



Legal reserve build

$

55


$

0.09











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

Second Quarter 2021 Income Statement Summary:

  • Total net revenue increased 4 percent to $7.4 billion.
  • Total non-interest expense increased 6 percent to $4.0 billion:
    • 24 percent increase in marketing.
    • 3 percent increase in operating expenses.
  • Pre-provision earnings increased 1 percent to $3.4 billion.(2)
  • Provision (benefit) for credit losses decreased $337 million to $(1.2) billion:
    • Net charge-offs of $541 million.
    • $1.7 billion loan reserve release.
  • Net interest margin of 5.89 percent, a decrease of 10 basis points.
  • Efficiency ratio of 53.78 percent.
    • Efficiency ratio excluding adjusting items of 53.04 percent.(1)
  • Operating efficiency ratio of 45.38 percent.
    • Operating efficiency ratio excluding adjusting items of 44.63 percent.(1)

Second Quarter 2021 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 14.5 percent at June 30, 2021.
  • Period-end loans held for investment in the quarter increased $6.5 billion, or 3 percent, to $249.6 billion.
    • Credit Card period-end loans increased $1.9 billion, or 2 percent, to $101.0 billion.
      • Domestic Card period-end loans increased $4.2 billion, or 5 percent, to $95.3 billion.
    • Consumer Banking period-end loans increased $4.6 billion, or 6 percent, to $74.8 billion.
      • Auto period-end loans increased $4.7 billion, or 7 percent, to $71.7 billion.
    • Commercial Banking period-end loans increased $19 million, or less than 1 percent, to $73.8 billion.
  • Average loans held for investment in the quarter increased $2.5 billion, or 1 percent, to $246.5 billion.
    • Credit Card average loans decreased $860 million, or 1 percent, to $99.7 billion.
      • Domestic Card average loans decreased $1.1 billion, or 1 percent, to $91.5 billion.
    • Consumer Banking average loans increased $3.5 billion, or 5 percent, to $72.7 billion.
      • Auto average loans increased $3.4 billion, or 5 percent, to $69.5 billion.
    • Commercial Banking average loans decreased $85 million, or less than 1 percent, to $74.1 billion.
  • Period-end total deposits decreased $4.0 billion, or 1 percent, to $306.3 billion, while average deposits increased $3.2 billion, or 1 percent, to $308.2 billion.
  • Interest-bearing deposits rate paid decreased 4 basis points to 0.35 percent.

(1)

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

(2)

Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period. 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 July 22, 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 August 5, 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 $306.3 billion in deposits and $423.4 billion in total assets as of June 30, 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)

Second 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

14

Business Segment Results



Table 9:

Financial Summary—Business Segment Results

15


Table 10:

Financial & Statistical Summary—Credit Card Business

16


Table 11:

Financial & Statistical Summary—Consumer Banking Business

18


Table 12:

Financial & Statistical Summary—Commercial Banking Business

19


Table 13:

Financial & Statistical Summary—Other and Total

20

Other



Table 14:

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

21


Table 15:

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

22

__________

(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 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 Q2 vs.


Six Months Ended June 30,

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


2021


2021


2020


2020


2020


2021


2020






2021 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Income Statement





















Net interest income


$

5,743



$

5,822



$

5,873



$

5,555



$

5,460



(1)

%


5

%


$

11,565



$

11,485



1

%

Non-interest income


1,631



1,291



1,464



1,826



1,096



26



49



2,922



2,320



26


Total net revenue(1)


7,374



7,113



7,337



7,381



6,556



4



12



14,487



13,805



5


Provision (benefit) for credit losses


(1,160)



(823)



264



331



4,246



41



**



(1,983)



9,669



**


Non-interest expense:





















Marketing


620



501



563



283



273



24



127



1,121



764



47


Operating expense


3,346



3,239



3,446



3,265



3,497



3



(4)



6,585



6,735



(2)


Total non-interest expense


3,966



3,740



4,009



3,548



3,770



6



5



7,706



7,499



3


Income (loss) from continuing operations before income taxes


4,568



4,196



3,064



3,502



(1,460)



9



**



8,764



(3,363)



**


Income tax provision (benefit)


1,031



869



496



1,096



(543)



19



**



1,900



(1,106)



**


Income (loss) from continuing operations, net of tax


3,537



3,327



2,568



2,406



(917)



6



**



6,864



(2,257)



**


Loss from discontinued operations, net of tax


(1)



(2)



(2)





(1)



(50)





(3)



(1)



**


Net income (loss)


3,536



3,325



2,566



2,406



(918)



6



**



6,861



(2,258)



**


Dividends and undistributed earnings allocated to participating securities(2)


(30)



(28)



(19)



(20)



(1)



7



**



(58)



(4)



**


Preferred stock dividends


(60)



(61)



(68)



(67)



(90)



(2)



(33)



(121)



(145)



(17)


Issuance cost for redeemed preferred stock(3)






(17)













(22)



**


Net income (loss) available to common stockholders


$

3,446



$

3,236



$

2,462



$

2,319



$

(1,009)



6



**



$

6,682



$

(2,429)



**


Common Share Statistics





















Basic earnings per common share:(2)





















Net income (loss) from continuing operations


$

7.65



$

7.06



$

5.36



$

5.07



$

(2.21)



8

%


**



$

14.70



$

(5.31)



**


Net income (loss) per basic common share


$

7.65



$

7.06



$

5.36



$

5.07



$

(2.21)



8



**



$

14.70



$

(5.31)



**


Diluted earnings per common share:(2)





















Net income (loss) from continuing operations


$

7.62



$

7.03



$

5.35



$

5.06



$

(2.21)



8



**



$

14.65



$

(5.31)



**


Net income (loss) per diluted common share


$

7.62



$

7.03



$

5.35



$

5.06



$

(2.21)



8



**



$

14.65



$

(5.31)



**


Weighted-average common shares outstanding (in millions):





















Basic


450.6



458.6



459.1



457.8



456.7



(2)



(1)

%


454.6



457.1



(1)

%

Diluted


452.3



460.1



460.2



458.5



456.7



(2)



(1)



456.2



457.1




Common shares outstanding (period-end, in millions)


446.1



456.8



459.0



457.4



456.3



(2)



(2)



446.1



456.3



(2)


Dividends declared and paid per common share


$

0.40



$

0.40



$

0.10



$

0.10



$

0.40







$

0.80



$

0.80




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


97.20



90.96



88.34



83.67



78.82



7



23



97.20



78.82



23















2021 Q2 vs.


Six Months Ended June 30,

(Dollars in millions)


2021


2021


2020


2020


2020


2021


2020






2021 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Balance Sheet (Period-End)





















Loans held for investment


$

249,597



$

243,131



$

251,624



$

248,223



$

251,512



3

%


(1)

%


$

249,597



$

251,512



(1)

%

Interest-earning assets


387,295



392,485



388,917



390,040



389,829



(1)



(1)



387,295



389,829



(1)


Total assets


423,420



425,175



421,602



421,883



421,296





1



423,420



421,296



1


Interest-bearing deposits


271,314



276,325



274,300



276,092



275,183



(2)



(1)



271,314



275,183



(1)


Total deposits


306,308



310,328



305,442



305,725



304,238



(1)



1



306,308



304,238



1


Borrowings


36,343



38,450



40,539



42,795



44,900



(5)



(19)



36,343



44,900



(19)


Common equity


58,136



56,341



55,356



53,093



50,835



3



14



58,136



50,835



14


Total stockholders' equity


64,624



61,188



60,204



58,424



56,045



6



15



64,624



56,045



15


Balance Sheet (Average Balances)





















Loans held for investment


$

246,463



$

243,937



$

247,689



$

249,511



$

253,358



1

%


(3)

%


$

245,207



$

258,124



(5)

%

Interest-earning assets


390,129



388,572



388,252



391,451



378,145





3



389,355



366,746



6


Total assets


424,099



421,808



420,011



422,854



411,075



1



3



422,959



400,845



6


Interest-bearing deposits


273,476



273,358



274,142



276,339



261,256





5



273,417



251,185



9


Total deposits


308,217



305,056



304,513



305,516



288,344



1



7



306,645



276,498



11


Borrowings


37,054



39,911



40,662



44,161



49,827



(7)



(26)



38,475



50,810



(24)


Common equity


56,885



55,775



54,220



51,995



52,413



2



9



56,333



52,799



7


Total stockholders' equity


62,376



60,623



59,389



57,223



57,623



3



8



61,504



58,096



6


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated













2021 Q2 vs.


Six Months Ended June 30,

(Dollars in millions, except as noted)


2021


2021


2020


2020


2020


2021


2020






2021 vs.


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Performance Metrics





















Net interest income growth (period over period)


(1)

%


(1)

%


6

%


2

%


(9)

%


**



**



1

%




**


Non-interest income growth (period over period)


26



(12)



(20)



67



(10)



**



**



26



(13)

%


**


Total net revenue growth (period over period)


4



(3)



(1)



13



(10)



**



**



5



(3)



**


Total net revenue margin(5)


7.56



7.32



7.56



7.54



6.93



24

bps


63

bps


7.44



7.53



(9)

bps

Net interest margin(6)


5.89



5.99



6.05



5.68



5.78



(10)



11



5.94



6.26



(32)


Return on average assets


3.34



3.16



2.45



2.28



(0.89)



18



4

%


3.25



(1.13)



4

%

Return on average tangible assets(7)


3.46



3.27



2.54



2.36



(0.93)



19



4



3.36



(1.17)



5


Return on average common equity(8)


24.24



23.22



18.18



17.84



(7.69)



102



32



23.73



(9.20)



33


Return on average tangible common equity(9)


32.75



31.61



25.02



24.98



(10.74)



114



43



32.19



(12.81)



45


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


6.44



6.13



6.47



5.69



5.95



31



49

bps


6.29



5.81



48

bps

Efficiency ratio(10)


53.78



52.58



54.64



48.07



57.50



120



(4)

%


53.19



54.32



(113)


Operating efficiency ratio(11)


45.38



45.54



46.97



44.24



53.34



(16)



(8)



45.45



48.79



(334)


Effective income tax rate for continuing operations


22.6



20.7



16.2



31.3



37.2



190



(15)



21.7



32.9



(11)

%

Employees (period-end, in thousands)


52.0



51.7



52.0



52.5



53.1



1

%


(2)



52.0



53.1



(2)


Credit Quality Metrics





















Allowance for credit losses


$

12,346



$

14,017



$

15,564



$

16,129



$

16,832



(12)

%


(27)

%


$

12,346



$

16,832



(27)

%

Allowance coverage ratio


4.95

%


5.77

%


6.19

%


6.50

%


6.69

%


(82)

bps


(174)

bps


4.95

%


6.69

%


(174)

bps

Net charge-offs


$

541



$

740



$

856



$

1,073



$

1,505



(27)

%


(64)

%


$

1,281



$

3,296



(61)

%

Net charge-off rate(12)


0.88

%


1.21

%


1.38

%


1.72

%


2.38

%


(33)

bps


(150)

bps


1.04

%


2.55

%


(151)

bps

30+ day performing delinquency rate(13)


1.75



1.82



2.41



1.97



2.09



(7)



(34)



1.75



2.09



(34)


30+ day delinquency rate(13)


1.89



1.98



2.61



2.22



2.30



(9)



(41)



1.89



2.30



(41)


Capital Ratios(14)





















Common equity Tier 1 capital


14.5

%


14.6

%


13.7

%


13.0

%


12.4

%


(10)

bps


210

bps


14.5

%


12.4

%


210

bps

Tier 1 capital


16.6



16.2



15.3



14.8



14.2



40



240



16.6



14.2



240


Total capital


18.8



18.6



17.7



17.3



16.7



20



210



18.8



16.7



210


Tier 1 leverage


12.4



11.7



11.2



10.6



10.3



70



210



12.4



10.3



210


Tangible common equity ("TCE")(15)


10.6



10.1



10.0



9.4



8.8



50



180



10.6



8.8



180


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income













2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020






2021 vs.

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


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Interest income:





















Loans, including loans held for sale


$

5,753



$

5,854



$

5,954



$

5,758



$

5,820



(2)

%


(1)

%


$

11,607



$

12,362



(6)

%

Investment securities


370



391



422



443



482



(5)



(23)



761



1,012



(25)


Other


16



16



15



14



16







32



53



(40)


Total interest income


6,139



6,261



6,391



6,215



6,318



(2)



(3)



12,400



13,427



(8)


Interest expense:





















Deposits


237



269



347



476



611



(12)



(61)



506



1,342



(62)


Securitized debt obligations


28



32



34



43



56



(13)



(50)



60



155



(61)


Senior and subordinated notes


122



129



128



132



180



(5)



(32)



251



419



(40)


Other borrowings


9



9



9



9



11





(18)



18



26



(31)


Total interest expense


396



439



518



660



858



(10)



(54)



835



1,942



(57)


Net interest income


5,743



5,822



5,873



5,555



5,460



(1)



5



11,565



11,485



1


Provision (benefit) for credit losses


(1,160)



(823)



264



331



4,246



41



**



(1,983)



9,669



**


Net interest income after provision for credit losses


6,903



6,645



5,609



5,224



1,214



4



**



13,548



1,816



**


Non-interest income:





















Interchange fees, net


1,016



817



818



775



672



24



51



1,833



1,424



29


Service charges and other customer-related fees


384



352



338



320



258



9



49



736



585



26


Net securities gains




4





25





**





4





**


Other


231



118



308



706



166



96



39



349



311



12


Total non-interest income


1,631



1,291



1,464



1,826



1,096



26



49



2,922



2,320



26


Non-interest expense:





















Salaries and associate benefits


1,781



1,847



1,755



1,719



1,704



(4)



5



3,628



3,331



9


Occupancy and equipment


523



472



572



506



523



11





995



1,040



(4)


Marketing


620



501



563



283



273



24



127



1,121



764



47


Professional services


341



292



394



327



304



17



12



633



591



7


Communications and data processing


315



302



295



310



308



4



2



617



610



1


Amortization of intangibles


5



6



8



14



16



(17)



(69)



11



38



(71)


Other


381



320



422



389



642



19



(41)



701



1,125



(38)


Total non-interest expense


3,966



3,740



4,009



3,548



3,770



6



5



7,706



7,499



3


Income (loss) from continuing operations before income taxes


4,568



4,196



3,064



3,502



(1,460)



9



**



8,764



(3,363)



**


Income tax provision (benefit)


1,031



869



496



1,096



(543)



19



**



1,900



(1,106)



**


Income (loss) from continuing operations, net of tax


3,537



3,327



2,568



2,406



(917)



6



**



6,864



(2,257)



**


Loss from discontinued operations, net of tax


(1)



(2)



(2)





(1)



(50)





(3)



(1)



**


Net income (loss)


3,536



3,325



2,566



2,406



(918)



6



**



6,861



(2,258)



**


Dividends and undistributed earnings allocated to participating securities(2)


(30)



(28)



(19)



(20)



(1)



7



**



(58)



(4)



**


Preferred stock dividends


(60)



(61)



(68)



(67)



(90)



(2)



(33)



(121)



(145)



(17)


Issuance cost for redeemed preferred stock(3)






(17)













(22)



**


Net income (loss) available to common stockholders


$

3,446



$

3,236



$

2,462



$

2,319



$

(1,009)



6



**



$

6,682



$

(2,429)



**



































2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020






2021 vs.

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


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Basic earnings per common share:(2)





















Net income (loss) from continuing operations


$

7.65



$

7.06



$

5.36



$

5.07



$

(2.21)



8

%


**



$

14.70



$

(5.31)



**


Net income (loss) per basic common share


$

7.65



$

7.06



$

5.36



$

5.07



$

(2.21)



8



**



$

14.70



$

(5.31)



**


Diluted earnings per common share:(2)





















Net income (loss) from continuing operations


$

7.62



$

7.03



$

5.35



$

5.06



$

(2.21)



8



**



$

14.65



$

(5.31)



**


Net income (loss) per diluted common share


$

7.62



$

7.03



$

5.35



$

5.06



$

(2.21)



8



**



$

14.65



$

(5.31)



**


Weighted-average common shares outstanding (in millions):





















Basic common shares


450.6



458.6



459.1



457.8



456.7



(2)



(1)

%


454.6



457.1



(1)

%

Diluted common shares


452.3



460.1



460.2



458.5



456.7



(2)



(1)



456.2



457.1




 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets













2021 Q2 vs.



2021


2021


2020


2020


2020


2021


2020

(Dollars in millions)


Q2


Q1


Q4


Q3


Q2


Q1


Q2

Assets:















Cash and cash equivalents:















Cash and due from banks


$

5,312



$

4,670



$

4,708



$

4,267



$

4,583



14

%


16

%

Interest-bearing deposits and other short-term investments


29,534



45,825



35,801



39,839



51,235



(36)



(42)


Total cash and cash equivalents


34,846



50,495



40,509



44,106



55,818



(31)



(38)


Restricted cash for securitization investors


242



1,779



262



895



740



(86)



(67)


Securities available for sale


101,766



99,165



100,445



99,853



87,859



3



16


Loans held for investment:















Unsecuritized loans held for investment


226,130



219,182



225,698



217,878



222,310



3



2


Loans held in consolidated trusts


23,467



23,949



25,926



30,345



29,202



(2)



(20)


Total loans held for investment


249,597



243,131



251,624



248,223



251,512



3



(1)


Allowance for credit losses


(12,346)



(14,017)



(15,564)



(16,129)



(16,832)



(12)



(27)


Net loans held for investment


237,251



229,114



236,060



232,094



234,680



4



1


Loans held for sale


6,522



2,896



2,710



3,433



711



125



**


Premises and equipment, net


4,227



4,277



4,287



4,333



4,324



(1)



(2)


Interest receivable


1,372



1,380



1,471



1,551



1,574



(1)



(13)


Goodwill


14,654



14,654



14,653



14,648



14,645






Other assets


22,540



21,415



21,205



20,970



20,945



5



8


Total assets


$

423,420



$

425,175



$

421,602



$

421,883



$

421,296





1














2021 Q2 vs.



2021


2021


2020


2020


2020


2021


2020

(Dollars in millions)


Q2


Q1


Q4


Q3


Q2


Q1


Q2

Liabilities:















Interest payable


$

301



$

288



$

352



$

332



$

380



5

%


(21)

%

Deposits:















Non-interest-bearing deposits


34,994



34,003



31,142



29,633



29,055



3



20


Interest-bearing deposits


271,314



276,325



274,300



276,092



275,183



(2)



(1)


Total deposits


306,308



310,328



305,442



305,725



304,238



(1)



1


Securitized debt obligations


10,561



12,071



12,414



13,566



15,761



(13)



(33)


Other debt:















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


845



842



668



702



573





47


Senior and subordinated notes


24,878



25,467



27,382



28,448



28,481



(2)



(13)


Other borrowings


59



70



75



79



85



(16)



(31)


Total other debt


25,782



26,379



28,125



29,229



29,139



(2)



(12)


Other liabilities


15,844



14,921



15,065



14,607



15,733



6



1


Total liabilities


358,796



363,987



361,398



363,459



365,251



(1)



(2)

















Stockholders' equity:















Preferred stock


0



0



0



0



0






Common stock


7



7



7



7



7






Additional paid-in capital, net


35,472



33,671



33,480



33,793



33,556



5



6


Retained earnings


46,461



43,167



40,088



37,653



35,361



8



31


Accumulated other comprehensive income


1,792



1,783



3,494



3,833



3,981



1



(55)


Treasury stock, at cost


(19,108)



(17,440)



(16,865)



(16,862)



(16,860)



10



13


Total stockholders' equity


64,624



61,188



60,204



58,424



56,045



6



15


Total liabilities and stockholders' equity


$

423,420



$

425,175



$

421,602



$

421,883



$

421,296





1


 


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 $175 million in Q2 2021, $180 million in Q1 2021, $177 million in Q4 2020, $235 million in Q3 2020 and $318 million in Q2 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 annualized total net revenue for the period divided by average interest-earning assets for the period.

(6)

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

(7)

Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(8)

Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.

(9)

Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity ("TCE"). Our calculation of return on average TCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(10)

Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(11)

Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(12)

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

(13)

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

(14)

Capital ratios as of the end of Q2 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 Q2


2021 Q1


2020 Q2

(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


$

249,280



$

5,753



9.23

%


$

246,675



$

5,854



9.49

%


$

254,402



$

5,820



9.15

%

Investment securities


100,071



370



1.48



98,296



391



1.59



81,095



482



2.38


Cash equivalents and other


40,778



16



0.16



43,601



16



0.15



42,648



16



0.15


Total interest-earning assets


$

390,129



$

6,139



6.29



$

388,572



$

6,261



6.45



$

378,145



$

6,318



6.68


Interest-bearing liabilities:



















Interest-bearing deposits


$

273,476



$

237



0.35



$

273,358



$

269



0.39



$

261,256



$

611



0.94


Securitized debt obligations


10,890



28



1.03



12,240



32



1.05



16,432



56



1.37


Senior and subordinated notes


25,487



122



1.92



26,968



129



1.91



31,294



180



2.30


Other borrowings and liabilities


2,198



9



1.67



2,210



9



1.62



3,554



11



1.21


Total interest-bearing liabilities


$

312,051



$

396



0.50



$

314,776



$

439



0.56



$

312,536



$

858



1.10


Net interest income/spread




$

5,743



5.79





$

5,822



5.89





$

5,460



5.58


Impact of non-interest-bearing funding






0.10







0.10







0.20


Net interest margin






5.89

%






5.99

%






5.78

%


























Six Months Ended June 30,














2021


2020














Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

(Dollars in millions, except as noted)


















Interest-earning assets:
























Loans, including loans held for sale













$

247,984



$

11,607



9.36

%


$

259,017



$

12,362



9.55

%

Investment securities













99,189



761



1.53



79,654



1,012



2.54


Cash equivalents and other













42,182



32



0.15



28,075



53



0.38


Total interest-earning assets













$

389,355



$

12,400



6.37



$

366,746



$

13,427



7.32


Interest-bearing liabilities:
























Interest-bearing deposits













$

273,417



$

506



0.37



$

251,185



$

1,342



1.07


Securitized debt obligations













11,561



60



1.04



17,243



155



1.80


Senior and subordinated notes













26,223



251



1.92



31,318



419



2.67


Other borrowings and liabilities













2,205



18



1.65



3,667



26



1.42


Total interest-bearing liabilities













$

313,406



$

835



0.53



$

303,413



$

1,942



1.28


Net interest income/spread















$

11,565



5.84





$

11,485



6.04


Impact of non-interest-bearing funding

















0.10







0.22


Net interest margin

















5.94

%






6.26

%

                                                                                                                                                                                                                

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics













2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020


2021


2020


2021 vs.
2020

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2

Loans Held for Investment (Period-End)





















Credit card:





















   Domestic credit card(1)


$

95,309



$

91,099



$

98,504



$

95,541



$

99,390



5

%


(4)

%


$

95,309



$

99,390



(4)

%

   International card businesses(2)


5,708



8,028



8,452



8,100



7,920



(29)



(28)



5,708



7,920



(28)


Total credit card


101,017



99,127



106,956



103,641



107,310



2



(6)



101,017



107,310



(6)


Consumer banking:





















   Auto


71,713



67,059



65,762



65,394



63,319



7



13



71,713



63,319



13


   Retail banking


3,046



3,143



3,126



3,294



3,393



(3)



(10)



3,046



3,393



(10)


Total consumer banking


74,759



70,202



68,888



68,688



66,712



6



12



74,759



66,712



12


Commercial banking:





















   Commercial and multifamily real estate(3)


29,616



30,008



30,681



31,197



30,953



(1)



(4)



29,616



30,953



(4)


   Commercial and industrial


44,205



43,794



45,099



44,697



46,537



1



(5)



44,205



46,537



(5)


Total commercial banking


73,821



73,802



75,780



75,894



77,490





(5)



73,821



77,490



(5)


Total loans held for investment


249,597



243,131



251,624



248,223



251,512



3



(1)



249,597



251,512



(1)


Loans Held for Investment (Average)





















Credit card:





















   Domestic credit card


$

91,535



$

92,594



$

95,453



$

97,306



$

100,996



(1)

%


(9)

%


$

92,062



$

107,354



(14)

%

   International card businesses


8,139



7,940



8,108



8,061



7,752



3



5



8,040



8,408



(4)


Total credit card


99,674



100,534



103,561



105,367



108,748



(1)



(8)



100,102



115,762



(14)


Consumer banking:





















   Auto


69,543



66,185



65,590



64,476



61,798



5



13



67,873



61,401



11


   Retail banking


3,162



3,049



3,218



3,346



3,053



4



4



3,106



2,860



9


Total consumer banking


72,705



69,234



68,808



67,822



64,851



5



12



70,979



64,261



10


Commercial banking:





















   Commercial and multifamily real estate


30,124



29,856



30,825



30,918



31,723



1



(5)



29,991



31,402



(4)


   Commercial and industrial


43,960



44,313



44,495



45,404



48,036



(1)



(8)



44,135



46,699



(5)


Total commercial banking


74,084



74,169



75,320



76,322



79,759





(7)



74,126



78,101



(5)


Total average loans held for investment


$

246,463



$

243,937



$

247,689



$

249,511



$

253,358



1



(3)



$

245,207



$

258,124



(5)




















2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020


2021


2020


2021 vs. 2020



Q2


Q1


Q4


Q3


Q2


Q1


Q2

Net Charge-Off (Recovery) Rates



























Credit card:




























   Domestic credit card



2.28

%



2.54

%



2.69

%



3.64

%



4.53

%


(26)

bps


(225)

bps



2.41

%



4.61

%


(220)

bps

   International card businesses



2.41




2.30




1.86




2.89




3.47



11



(106)




2.36




4.11



(175)


Total credit card



2.29




2.52




2.63




3.58




4.46



(23)



(217)




2.41




4.57



(216)


Consumer banking:




























   Auto



(0.12)




0.47




0.47




0.23




1.16



(59)



(128)




0.17




1.33



(116)


   Retail banking



1.41




1.68




1.88




1.38




1.78



(27)



(37)




1.54




2.05



(51)


Total consumer banking



(0.06)




0.52




0.53




0.28




1.19



(58)



(125)




0.23




1.36



(113)


Commercial banking:




























   Commercial and multifamily real estate



0.04




0.06




0.02




0.41




0.09



(2)



(5)




0.05




0.04



1


   Commercial and industrial



(0.21)




0.11




0.74




0.45




0.78



(32)



(99)




(0.05)




0.87



(92)


Total commercial banking



(0.11)




0.09




0.45




0.43




0.51



(20)



(62)




(0.01)




0.54



(55)


Total net charge-offs



0.88




1.21




1.38




1.72




2.38



(33)



(150)




1.04




2.55



(151)


30+ Day Performing Delinquency Rates(4)




























Credit card:




























   Domestic credit card



1.68

%



2.24

%



2.42

%



2.21

%



2.74

%


(56)

bps


(106)

bps



1.68

%



2.74

%


(106)

bps

   International card businesses



2.89




2.51




2.61




2.15




2.71



38



18




2.89




2.71



18


Total credit card



1.75




2.26




2.44




2.20




2.74



(51)



(99)




1.75




2.74



(99)


Consumer banking:




























   Auto



3.26




3.12




4.78




3.76




3.28



14



(2)




3.26




3.28



(2)


   Retail banking



0.79




1.02




1.32




0.83




0.89



(23)



(10)




0.79




0.89



(10)


Total consumer banking



3.16




3.03




4.62




3.62




3.16



13






3.16




3.16




Nonperforming Loans and Nonperforming Assets Rates(5)(6)




























Credit card:




























   International card businesses



0.20

%



0.17

%



0.24

%



0.25

%



0.29

%


3

bps


(9)

bps



0.20

%



0.29

%


(9)

bps

Total credit card



0.01




0.01




0.02




0.02




0.02





(1)




0.01




0.02



(1)


Consumer banking:




























   Auto



0.29




0.29




0.45




0.36




0.41





(12)




0.29




0.41



(12)


   Retail banking



1.75




1.16




0.96




0.77




0.70



59



105




1.75




0.70



105


Total consumer banking



0.35




0.33




0.47




0.38




0.43



2



(8)




0.35




0.43



(8)


Commercial banking:




























   Commercial and multifamily real estate



1.02




0.78




0.65




0.58




0.54



24



48




1.02




0.54



48


   Commercial and industrial



1.03




1.02




1.00




1.31




1.06



1



(3)




1.03




1.06



(3)


Total commercial banking



1.03




0.92




0.86




1.01




0.85



11



18




1.03




0.85



18


Total nonperforming loans



0.41




0.38




0.40




0.42




0.38



3



3




0.41




0.38



3


Total nonperforming assets



0.43




0.40




0.41




0.44




0.39



3



4




0.43




0.39



4


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




Three Months Ended June 30, 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 March 31, 2021


$

9,572



$

500



$

10,072



$

2,405



$

93



$

2,498



$

1,447



$

14,017


Charge-offs


(874)



(93)



(967)



(245)



(15)



(260)



(8)



(1,235)


Recoveries


352



44



396



267



4



271



27



694


Net recoveries (charge-offs)


(522)



(49)



(571)



22



(11)



11



19



(541)


Provision (benefit) for credit losses


(561)



(74)



(635)



(305)



(1)



(306)



(196)



(1,137)


Allowance build (release) for credit losses


(1,083)



(123)



(1,206)



(283)



(12)



(295)



(177)



(1,678)


Other changes(7)




7



7











7


Balance as of June 30, 2021


8,489



384



8,873



2,122



81



2,203



1,270



12,346


Reserve for unfunded lending commitments:

















Balance as of March 31, 2021














187



187


Provision (benefit) for losses on unfunded lending commitments














(23)



(23)


Balance as of June 30, 2021














164



164


Combined allowance and reserve as of June 30, 2021


$

8,489



$

384



$

8,873



$

2,122



$

81



$

2,203



$

1,434



$

12,510





Six Months Ended June 30, 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


(1,778)



(182)



(1,960)



(569)



(33)



(602)



(27)



(2,589)


Recoveries


669



87



756



513



9



522



30



1,308


Net recoveries (charge-offs)


(1,109)



(95)



(1,204)



(56)



(24)



(80)



3



(1,281)


Provision (benefit) for credit losses


(1,052)



(75)



(1,127)



(437)



5



(432)



(391)



(1,950)


Allowance build (release) for credit losses


(2,161)



(170)



(2,331)



(493)



(19)



(512)



(388)



(3,231)


Other changes(7)




13



13











13


Balance as of June 30, 2021


8,489



384



8,873



2,122



81



2,203



1,270



12,346


Reserve for unfunded lending commitments:

















Balance as of December 31, 2020














195



195


Provision (benefit) for losses on unfunded lending commitments














(31)



(31)


Balance as of June 30, 2021














164



164


Combined allowance and reserve as of June 30, 2021


$

8,489



$

384



$

8,873



$

2,122



$

81



$

2,203



$

1,434



$

12,510


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results




Three Months Ended June 30, 2021


Six Months Ended June 30, 2021

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(8)


Other(8)


Total


Credit
Card


Consumer
Banking


Commercial
Banking(8)


Other(8)


Total

Net interest income (loss)


$

3,217



$

2,101



$

460



$

(35)



$

5,743



$

6,589



$

4,131



$

980



$

(135)



$

11,565


Non-interest income (loss)


1,253



144



257



(23)



1,631



2,282



285



497



(142)



2,922


Total net revenue (loss)


4,470



2,245



717



(58)



7,374



8,871



4,416



1,477



(277)



14,487


Provision (benefit) for credit losses


(635)



(306)



(219)





(1,160)



(1,127)



(432)



(422)



(2)



(1,983)


Non-interest expense


2,263



1,123



417



163



3,966



4,398



2,240



836



232



7,706


Income (loss) from continuing operations before income taxes


2,842



1,428



519



(221)



4,568



5,600



2,608



1,063



(507)



8,764


Income tax provision (benefit)


672



337



123



(101)



1,031



1,325



615



251



(291)



1,900


Income (loss) from continuing operations, net of tax


$

2,170



$

1,091



$

396



$

(120)



$

3,537



$

4,275



$

1,993



$

812



$

(216)



$

6,864

























Three Months Ended March 31, 2021











(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(8)


Other(8)


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 June 30, 2020


Six Months Ended June 30, 2020

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(8)


Other(8)


Total


Credit
Card


Consumer
Banking


Commercial
Banking(8)


Other(8)


Total

Net interest income (loss)


$

3,369



$

1,665



$

518



$

(92)



$

5,460



$

7,071



$

3,322



$

1,009



$

83



$

11,485


Non-interest income (loss)


845



97



180



(26)



1,096



1,756



223



418



(77)



2,320


Total net revenue (loss)


4,214



1,762



698



(118)



6,556



8,827



3,545



1,427



6



13,805


Provision (benefit) for credit losses


2,944



876



427



(1)



4,246



6,646



1,736



1,283



4



9,669


Non-interest expense


1,969



1,036



425



340



3,770



4,177



2,027



837



458



7,499


Loss from continuing operations before income taxes


(699)



(150)



(154)



(457)



(1,460)



(1,996)



(218)



(693)



(456)



(3,363)


Income tax benefit


(166)



(36)



(36)



(305)



(543)



(472)



(52)



(164)



(418)



(1,106)


Loss from continuing operations, net of tax


$

(533)



$

(114)



$

(118)



$

(152)



$

(917)



$

(1,524)



$

(166)



$

(529)



$

(38)



$

(2,257)


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business













2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020






2021 vs.

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Credit Card





















Earnings:





















Net interest income


$

3,217



$

3,372



$

3,413



$

3,292



$

3,369



(5)

%


(5)

%


$

6,589



$

7,071



(7)

%

Non-interest income


1,253



1,029



1,054



1,013



845



22



48



2,282



1,756



30


Total net revenue


4,470



4,401



4,467



4,305



4,214



2



6



8,871



8,827




Provision (benefit) for credit losses


(635)



(492)



231



450



2,944



29



**



(1,127)



6,646



**


Non-interest expense


2,263



2,135



2,311



2,003



1,969



6



15



4,398



4,177



5


Income (loss) from continuing operations before income taxes


2,842



2,758



1,925



1,852



(699)



3



**



5,600



(1,996)



**


Income tax provision (benefit)


672



653



454



438



(166)



3



**



1,325



(472)



**


Income (loss) from continuing operations, net of tax


$

2,170



$

2,105



$

1,471



$

1,414



$

(533)



3



**



$

4,275



$

(1,524)



**


Selected performance metrics:





















Period-end loans held for investment(1)(2)


$

101,017



$

99,127



$

106,956



$

103,641



$

107,310



2



(6)



$

101,017



$

107,310



(6)


Average loans held for investment


99,674



100,534



103,561



105,367



108,748



(1)



(8)



100,102



115,762



(14)


Average yield on loans outstanding(9)


14.04

%


14.49

%


14.24

%


13.83

%


13.72

%


(45)

bps


32

bps


14.26

%


14.11

%


15

bps

Total net revenue margin(10)


17.59



17.17



16.92



16.34



15.50



42



209



17.38



15.25



213


Net charge-off rate


2.29



2.52



2.63



3.58



4.46



(23)



(217)



2.41



4.57



(216)


30+ day performing delinquency rate


1.75



2.26



2.44



2.20



2.74



(51)



(99)



1.75



2.74



(99)


30+ day delinquency rate


1.75



2.27



2.45



2.21



2.75



(52)



(100)



1.75



2.75



(100)


Nonperforming loan rate(5)


0.01



0.01



0.02



0.02



0.02





(1)



0.01



0.02



(1)


Purchase volume(11)


$

132,676



$

108,333



$

117,141



$

107,102



$

90,149



22

%


47

%


$

241,009



$

190,069



27

%



















































2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020






2021 vs.

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Domestic Card





















Earnings:





















Net interest income


$

2,944



$

3,095



$

3,129



$

2,995



$

3,094



(5)

%


(5)

%


$

6,039



$

6,475



(7)

%

Non-interest income


1,183



959



994



952



795



23



49



2,142



1,637



31


Total net revenue


4,127



4,054



4,123



3,947



3,889



2



6



8,181



8,112



1


Provision (benefit) for credit losses


(561)



(491)



231



378



2,906



14



**



(1,052)



6,370



**


Non-interest expense


2,034



1,923



2,063



1,802



1,776



6



15



3,957



3,760



5


Income (loss) from continuing operations before income taxes


2,654



2,622



1,829



1,767



(793)



1



**



5,276



(2,018)



**


Income tax provision (benefit)


626



619



433



419



(188)



1



**



1,245



(478)



**


Income (loss) from continuing operations, net of tax


$

2,028



$

2,003



$

1,396



$

1,348



$

(605)



1



**



$

4,031



$

(1,540)



**


Selected performance metrics:





















Period-end loans held for investment(1)


$

95,309



$

91,099



$

98,504



$

95,541



$

99,390



5



(4)



$

95,309



$

99,390



(4)


Average loans held for investment


91,535



92,594



95,453



97,306



100,996



(1)



(9)



92,062



107,354



(14)


Average yield on loans outstanding(9)


13.91

%


14.34

%


14.07

%


13.57

%


13.52

%


(43)

bps


39

bps


14.13

%


13.93

%


20

bps

Total net revenue margin(10)


17.66



17.15



16.91



16.22



15.40



51



226



17.40



15.11



229


Net charge-off rate


2.28



2.54



2.69



3.64



4.53



(26)



(225)



2.41



4.61



(220)


30+ day performing delinquency rate


1.68



2.24



2.42



2.21



2.74



(56)



(106)



1.68



2.74



(106)


Purchase volume(11)


$

122,456



$

99,960



$

107,572



$

98,107



$

82,860



23

%


48

%


$

222,416



$

175,108



27

%

Refreshed FICO scores:(12)





















Greater than 660


72

%


70

%


69

%


69

%


67

%


2



5



72

%


67

%


5


660 or below


28



30



31



31



33



(2)



(5)



28



33



(5)


Total


100

%


100

%


100

%


100

%


100

%






100

%


100

%



 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business













2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020






2021 vs.

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Consumer Banking





















Earnings:





















Net interest income


$

2,101



$

2,030



$

2,012



$

1,904



$

1,665



3

%


26

%


$

4,131



$

3,322



24

%

Non-interest income


144



141



136



107



97



2



48



285



223



28


Total net revenue


2,245



2,171



2,148



2,011



1,762



3



27



4,416



3,545



25


Provision (benefit) for credit losses


(306)



(126)



60



(43)



876



143



**



(432)



1,736



**


Non-interest expense


1,123



1,117



1,121



1,011



1,036



1



8



2,240



2,027



11


Income (loss) from continuing operations before income taxes


1,428



1,180



967



1,043



(150)



21



**



2,608



(218)



**


Income tax provision (benefit)


337



278



230



247



(36)



21



**



615



(52)



**


Income (loss) from continuing operations, net of tax


$

1,091



$

902



$

737



$

796



$

(114)



21



**



$

1,993



$

(166)



**


Selected performance metrics:





















Period-end loans held for investment


$

74,759



$

70,202



$

68,888



$

68,688



$

66,712



6



12



$

74,759



$

66,712



12


Average loans held for investment


72,705



69,234



68,808



67,822



64,851



5



12



70,979



64,261



10


Average yield on loans held for investment(9)


7.99

%


8.16

%


8.28

%


8.36

%


8.41

%


(17)

bps


(42)

bps


8.07

%


8.44

%


(37)

bps

Auto loan originations


$

12,959



$

8,833



$

7,371



$

8,979



$

8,292



47

%


56

%


$

21,792



$

15,931



37

%

Period-end deposits


251,155



254,001



249,815



249,684



246,804



(1)



2



251,155



246,804



2


Average deposits


252,488



249,499



249,419



248,418



232,293



1



9



251,002



223,682



12


Average deposits interest rate


0.31

%


0.36

%


0.47

%


0.66

%


0.89

%


(5)

bps


(58)

bps


0.33

%


0.97

%


(64)

bps

Net charge-off (recovery) rate


(0.06)



0.52



0.53



0.28



1.19



(58)



(125)



0.23



1.36



(113)


30+ day performing delinquency rate


3.16



3.03



4.62



3.62



3.16



13





3.16



3.16




30+ day delinquency rate


3.40



3.25



5.00



3.90



3.48



15



(8)



3.40



3.48



(8)


Nonperforming loan rate(5)


0.35



0.33



0.47



0.38



0.43



2



(8)



0.35



0.43



(8)


Nonperforming asset rate(6)


0.40



0.39



0.54



0.43



0.46



1



(6)



0.40



0.46



(6)


Auto—At origination FICO scores:(13)





















Greater than 660


48

%


47

%


46

%


46

%


46

%


1

%


2

%


48

%


46

%


2

%

621 - 660


20



20



20



20



20







20



20




620 or below


32



33



34



34



34



(1)



(2)



32



34



(2)


Total


100

%


100

%


100

%


100

%


100

%






100

%


100

%
























 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business













2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020






2021 vs.

(Dollars in millions, except as noted)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Commercial Banking





















Earnings:





















Net interest income


$

460



$

520



$

522



$

517



$

518



(12)

%


(11)

%


$

980



$

1,009



(3)

%

Non-interest income


257



240



268



237



180



7



43



497



418



19


Total net revenue(8)


717



760



790



754



698



(6)



3



1,477



1,427



4


Provision (benefit) for credit losses


(219)



(203)



(28)



(74)



427



8



**



(422)



1,283



**


Non-interest expense


417



419



445



424



425





(2)



836



837




Income (loss) from continuing operations before income taxes


519



544



373



404



(154)



(5)



**



1,063



(693)



**


Income tax provision (benefit)


123



128



88



95



(36)



(4)



**



251



(164)



**


Income (loss) from continuing operations, net of tax


$

396



$

416



$

285



$

309



$

(118)



(5)



**



$

812



$

(529)



**


Selected performance metrics:





















Period-end loans held for investment(3)


$

73,821



$

73,802



$

75,780



$

75,894



$

77,490





(5)



$

73,821



$

77,490



(5)


Average loans held for investment


74,084



74,169



75,320



76,322



79,759





(7)



74,126



78,101



(5)


Average yield on loans held for investment(8)(9)


2.72

%


2.76

%


2.83

%


2.82

%


3.00

%


(4)

bps


(28)

bps


2.74

%


3.43

%


(69)

bps

Period-end deposits


$

42,973



$

41,552



$

39,590



$

36,783



$

35,669



3

%


20

%


$

42,973



$

35,669



20

%

Average deposits


42,311



40,107



38,676



36,278



34,635



5



22



41,215



33,437



23


Average deposits interest rate


0.14

%


0.18

%


0.23

%


0.25

%


0.30

%


(4)

bps


(16)

bps


0.16

%


0.58

%


(42)

bps

Net charge-off (recovery) rate


(0.11)



0.09



0.45



0.43



0.51



(20)



(62)



(0.01)



0.54



(55)


Nonperforming loan rate(5)


1.03



0.92



0.86



1.01



0.85



11



18



1.03



0.85



18


Nonperforming asset rate(6)


1.03



0.92



0.86



1.01



0.85



11



18



1.03



0.85



18


Risk category:(14)





















Noncriticized


$

67,481



$

66,299



$

67,964



$

68,533



$

70,881



2

%


(5)

%


$

67,481



$

70,881



(5)

%

Criticized performing


5,581



6,821



7,166



6,593



5,949



(18)



(6)



5,581



5,949



(6)


Criticized nonperforming


759



682



650



768



660



11



15



759



660



15


Total commercial banking loans


$

73,821



$

73,802



$

75,780



$

75,894



$

77,490





(5)



$

73,821



$

77,490



(5)


Risk category as a percentage of period-end loans held for investment:(14)

















Noncriticized


91.4

%


89.9

%


89.6

%


90.3

%


91.4

%


150

bps




91.4

%


91.4

%



Criticized performing


7.6



9.2



9.5



8.7



7.7



(160)



(10)

bps


7.6



7.7



(10)

bps

Criticized nonperforming


1.0



0.9



0.9



1.0



0.9



10



10



1.0



0.9



10


Total commercial banking loans


100.0

%


100.0

%


100.0

%


100.0

%


100.0

%






100.0

%


100.0

%



 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total













2021 Q2 vs.


Six Months Ended June 30,



2021


2021


2020


2020


2020


2021


2020






2021 vs.

(Dollars in millions)


Q2


Q1


Q4


Q3


Q2


Q1


Q2


2021


2020


2020

Other





















Earnings:





















Net interest income (loss)


$

(35)



$

(100)



$

(74)



$

(158)



$

(92)



(65)

%


(62)

%


$

(135)



$

83



**


Non-interest income (loss)


(23)



(119)



6



469



(26)



(81)



(12)



(142)



(77)



84

%

Total net revenue (loss)(8)


(58)



(219)



(68)



311



(118)



(74)



(51)



(277)



6



**


Provision (benefit) for credit losses




(2)



1



(2)



(1)



**



**



(2)



4



**


Non-interest expense(15)


163



69



132



110



340



136



(52)



232



458



(49)


Income (loss) from continuing operations before income taxes


(221)



(286)



(201)



203



(457)



(23)



(52)



(507)



(456)



11


Income tax provision (benefit)


(101)



(190)



(276)



316



(305)



(47)



(67)



(291)



(418)



(30)


Income (loss) from continuing operations, net of tax


$

(120)



$

(96)



$

75



$

(113)



$

(152)



25



(21)



$

(216)



$

(38)



**


Selected performance metrics:





















Period-end deposits


$

12,180



$

14,775



$

16,037



$

19,258



$

21,765



(18)



(44)



$

12,180



$

21,765



(44)


Average deposits


13,418



15,450



16,418



20,820



21,416



(13)



(37)



14,428



19,379



(26)


Total





















Earnings:





















Net interest income


$

5,743



$

5,822



$

5,873



$

5,555



$

5,460



(1)

%


5

%


$

11,565



$

11,485



1

%

Non-interest income


1,631



1,291



1,464



1,826



1,096



26



49



2,922



2,320



26


Total net revenue


7,374



7,113



7,337



7,381



6,556



4



12



14,487



13,805



5


Provision (benefit) for credit losses


(1,160)



(823)



264



331



4,246



41



**



(1,983)



9,669



**


Non-interest expense


3,966



3,740



4,009



3,548



3,770



6



5



7,706



7,499



3


Income (loss) from continuing operations before income taxes


4,568



4,196



3,064



3,502



(1,460)



9



**



8,764



(3,363)



**


Income tax provision (benefit)


1,031



869



496



1,096



(543)



19



**



1,900



(1,106)



**


Income (loss) from continuing operations, net of tax


$

3,537



$

3,327



$

2,568



$

2,406



$

(917)



6



**



$

6,864



$

(2,257)



**


Selected performance metrics:





















Period-end loans held for investment


$

249,597



$

243,131



$

251,624



$

248,223



$

251,512



3



(1)



$

249,597



$

251,512



(1)


Average loans held for investment


246,463



243,937



247,689



249,511



253,358



1



(3)



245,207



258,124



(5)


Period-end deposits


306,308



310,328



305,442



305,725



304,238



(1)



1



306,308



304,238



1


Average deposits


308,217



305,056



304,513



305,516



288,344



1



7



306,645



276,498



11


 


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)

We reclassified $2.6 billion in international partnership loans to held for sale as of June 30, 2021.

(3) 

We reclassified $1.5 billion in commercial loans to held for sale as of June 30, 2021.

(4)

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

(5)

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.

(6)

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.

(7)

Represents foreign currency translation adjustments.

(8)

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.

(9)

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.

(10)

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

(11)

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

(12)

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.

(13)

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.

(14)

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

(15)

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)


June 30,

2021


March 31,

2021


December 31,

2020


September 30,

2020


June 30,

2020

Regulatory Capital Metrics











Common equity excluding AOCI


$

58,969



$

57,607



$

55,299



$

52,839



$

50,614


Adjustments:











AOCI, net of tax(2)


(5)



(13)



(29)



(122)



(145)


Goodwill, net of related deferred tax liabilities


(14,440)



(14,444)



(14,448)



(14,448)



(14,449)


Intangible assets, net of related deferred tax liabilities


(76)



(81)



(86)



(95)



(135)


Other


(16)



(18)








Common equity Tier 1 capital


$

44,432



$

43,051



$

40,736



$

38,174



$

35,885


Tier 1 capital


$

50,920



$

47,898



$

45,583



$

43,505



$

41,094


Total capital(3)


57,932



54,780



52,788



50,955



48,508


Risk-weighted assets


307,372



295,209



297,903



293,852



290,222


Adjusted average assets(4)


411,032



408,596



406,762



409,602



398,062


Capital Ratios











Common equity Tier 1 capital(5)


14.5

%


14.6

%


13.7

%


13.0

%


12.4

%

Tier 1 capital(6)


16.6



16.2



15.3



14.8



14.2


Total capital(7)


18.8



18.6



17.7



17.3



16.7


Tier 1 leverage(4)


12.4



11.7



11.2



10.6



10.3


Tangible common equity ("TCE")(8)


10.6



10.1



10.0



9.4



8.8


 

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


Six Months Ended June 30,

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


Q2


Q1


Q2


Q1


2021


2020

Adjusted diluted EPS:













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


$

3,446



$

3,236



$

(1,009)



$

(1,420)



$

6,682



$

(2,429)


Legal reserve activity, including insurance recoveries


55





265



45



55



310


Cybersecurity Incident expenses, net of insurance






11



4





15


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


3,501



3,236



(733)



(1,371)



6,737



(2,104)


Income tax impacts


(13)





(3)



(12)



(13)



(15)


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


$

3,488



$

3,236



$

(736)



$

(1,383)



$

6,724



$

(2,119)















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


452.3



460.1



456.7



457.6



456.2



457.1















Diluted EPS (GAAP)


$

7.62



$

7.03



$

(2.21)



$

(3.10)



$

14.65



$

(5.31)


Impact of adjustments noted above


0.09





0.60



0.08



0.09



0.67


Adjusted diluted EPS (non-GAAP)


$

7.71



$

7.03



$

(1.61)



$

(3.02)



$

14.74



$

(4.64)















Adjusted efficiency ratio:













Non-interest expense (GAAP)


$

3,966



$

3,740



$

3,770



$

3,729



$

7,706



$

7,499


Legal reserve activity, including insurance recoveries


(55)





(265)



(45)



(55)



(310)


Cybersecurity Incident expenses, net of insurance






(11)



(4)





(15)


Adjusted non-interest expense (non-GAAP)


$

3,911



$

3,740



$

3,494



$

3,680



$

7,651



$

7,174















Total net revenue (GAAP)


$

7,374



$

7,113



$

6,556



$

7,249



$

14,487



$

13,805















Efficiency ratio (GAAP)


53.78

%


52.58

%


57.50

%


51.44

%


53.19

%


54.32

%

Impact of adjustments noted above


(74)

bps


bps


(421)

bps


(67)

bps


(38)

bps


(235)

bps

Adjusted efficiency ratio (non-GAAP)


53.04

%


52.58

%


53.29

%


50.77

%


52.81

%


51.97

%














Adjusted operating efficiency ratio:













Operating expense (GAAP)


$

3,346



$

3,239



$

3,497



$

3,238



$

6,585



$

6,735


Legal reserve activity, including insurance recoveries


(55)





(265)



(45)



(55)



(310)


Cybersecurity Incident expenses, net of insurance






(11)



(4)





(15)


Adjusted operating expense (non-GAAP)


$

3,291



$

3,239



$

3,221



$

3,189



$

6,530



$

6,410















Total net revenue (GAAP)


$

7,374



$

7,113



$

6,556



$

7,249



$

14,487



$

13,805















Operating efficiency ratio (GAAP)


45.38

%


45.54

%


53.34

%


44.67

%


45.45

%


48.79

%

Impact of adjustments noted above


(75)

bps


bps


(421)

bps


(68)

bps


(38)

bps


(236)

bps

Adjusted operating efficiency ratio (non-GAAP)


44.63

%


45.54

%


49.13

%


43.99

%


45.07

%


46.43

%


 

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


2021


2020


2020


2020

(Dollars in millions)


Q2


Q1


Q4


Q3


Q2

Tangible Common Equity (Period-End)











Stockholders' equity


$

64,624



$

61,188



$

60,204



$

58,424



$

56,045


Goodwill and intangible assets(9)


(14,774)



(14,789)



(14,809)



(14,825)



(14,869)


Noncumulative perpetual preferred stock


(6,488)



(4,847)



(4,847)



(5,330)



(5,209)


Tangible common equity


$

43,362



$

41,552



$

40,548



$

38,269



$

35,967


Tangible Common Equity (Average)











Stockholders' equity


$

62,376



$

60,623



$

59,389



$

57,223



$

57,623


Goodwill and intangible assets(9)


(14,788)



(14,807)



(14,824)



(14,867)



(14,880)


Noncumulative perpetual preferred stock


(5,491)



(4,847)



(5,168)



(5,228)



(5,209)


Tangible common equity


$

42,097



$

40,969



$

39,397



$

37,128



$

37,534


Tangible Assets (Period-End)











Total assets


$

423,420



$

425,175



$

421,602



$

421,883



$

421,296


Goodwill and intangible assets(9)


(14,774)



(14,789)



(14,809)



(14,825)



(14,869)


Tangible assets


$

408,646



$

410,386



$

406,793



$

407,058



$

406,427


Tangible Assets (Average)











Total assets


$

424,099



$

421,808



$

420,011



$

422,854



$

411,075


Goodwill and intangible assets(9)


(14,788)



(14,807)



(14,824)



(14,867)



(14,880)


Tangible assets


$

409,311



$

407,001



$

405,187



$

407,987



$

396,195


__________

(1)

Regulatory capital metrics and capital ratios as of June 30, 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:https://www.prnewswire.com/news-releases/capital-one-reports-second-quarter-2021-net-income-of-3-5-billion-or-7-62-per-share-301339852.html

SOURCE Capital One Financial Corporation

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.