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21.07.2022 22:05:00

Capital One Reports Second Quarter 2022 Net Income of $2.0 billion, or $4.96 per share

MCLEAN, Va., July 21, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2022 of $2.0 billion, or $4.96 per diluted common share, compared with net income of $2.4 billion, or $5.62 per diluted common share in the first quarter of 2022, and with net income of $3.5 billion, or $7.62 per diluted common share in the second quarter of 2021.

Capital_One_Logo

"We continued to drive attractive and resilient growth in the second quarter, and we're staying focused on the most resilient businesses and opportunities," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "The choices we're making today put us in a strong position to continue to deliver long-term value as the sweeping digital transformation of banking continues."

All comparisons below are for the second quarter of 2022 compared with the first quarter of 2022 unless otherwise noted.

Second Quarter 2022 Income Statement Summary:

  • Total net revenue increased 1 percent to $8.2 billion.
  • Total non-interest expense increased 1 percent to $4.6 billion:
    • 9 percent increase in marketing.
    • 1 percent decrease in operating expenses.
  • Pre-provision earnings increased 1 percent to $3.6 billion.(1)
  • Provision for credit losses increased $408 million to $1.1 billion:
    • Net charge-offs of $845 million.
    • $200 million loan reserve build.
  • Net interest margin of 6.54 percent, an increase of 5 basis points.
  • Efficiency ratio of 55.67 percent.
  • Operating efficiency ratio of 43.49 percent.

Second Quarter 2022 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.1 percent at June 30, 2022.
  • Period-end loans held for investment in the quarter increased $15.9 billion, or 6 percent, to $296.4 billion.
    • Credit Card period-end loans increased $6.9 billion, or 6 percent, to $120.9 billion.
      • Domestic Card period-end loans increased $7.0 billion, or 6 percent, to $115.0 billion.
    • Consumer Banking period-end loans increased $1.2 billion, or 1 percent, to $81.5 billion.
      • Auto period-end loans increased $1.3 billion, or 2 percent, to $79.9 billion.
    • Commercial Banking period-end loans increased $7.8 billion, or 9 percent, to $94.0 billion.
  • Average loans held for investment in the quarter increased $10.8 billion, or 4 percent, to $286.1 billion.
    • Credit Card average loans increased $4.4 billion, or 4 percent, to $115.8 billion.
      • Domestic Card average loans increased $4.4 billion, or 4 percent, to $110.0 billion.
    • Consumer Banking average loans increased $2.3 billion, or 3 percent, to $81.0 billion.
      • Auto average loans increased $2.4 billion, or 3 percent, to $79.3 billion.
    • Commercial Banking average loans increased $4.1 billion, or 5 percent, to $89.3 billion.
  • Period-end total deposits decreased $5.5 billion, or 2 percent, to $307.9 billion, while average deposits decreased $3.6 billion, or 1 percent, to $306.0 billion.
  • Interest-bearing deposits rate paid increased 12 basis points to 0.44 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 July 21, 2022 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through August 4, 2022 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, 2021.

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 $307.9 billion in deposits and $440.3 billion in total assets as of June 30, 2022. 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 2022

Table of Contents

 




Capital One Financial Corporation Consolidated Results

Page




Table 1:

Financial Summary—Consolidated

1






Table 2:

Selected Metrics—Consolidated

3






Table 3:

Consolidated Statements of Income

4






Table 4:

Consolidated Balance Sheets

6






Table 5:

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

8






Table 6:

Average Balances, Net Interest Income and Net Interest Margin

9






Table 7:

Loan Information and Performance Statistics

10






Table 8:

Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

12





Business Segment Results





Table 9:

Financial Summary—Business Segment Results

13






Table 10:

Financial & Statistical Summary—Credit Card Business

14






Table 11:

Financial & Statistical Summary—Consumer Banking Business

16






Table 12:

Financial & Statistical Summary—Commercial Banking Business

17






Table 13:

Financial & Statistical Summary—Other and Total

18





Other





Table 14:

Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)

19






Table 15:

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

20

__________

(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2022 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














2022 Q2 vs


Six Months Ended June 30,


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


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021







Income Statement



























Net interest income


$      6,517


$      6,397


$      6,450


$      6,156


$      5,743


2 %


13 %


$    12,914


$    11,565


12 %







Non-interest income


1,715


1,776


1,668


1,674


1,631


(3)


5


3,491


2,922


19







Total net revenue(1)


8,232


8,173


8,118


7,830


7,374


1


12


16,405


14,487


13







Provision (benefit) for credit losses


1,085


677


381


(342)


(1,160)


60


**


1,762


(1,983)


**







Non-interest expense:



























Marketing


1,003


918


999


751


620


9


62


1,921


1,121


71







Operating expense


3,580


3,633


3,679


3,435


3,346


(1)


7


7,213


6,585


10







Total non-interest expense


4,583


4,551


4,678


4,186


3,966


1


16


9,134


7,706


19







Income from continuing operations before income taxes


2,564


2,945


3,059


3,986


4,568


(13)


(44)


5,509


8,764


(37)







Income tax provision


533


542


633


882


1,031


(2)


(48)


1,075


1,900


(43)







Income from continuing operations, net of tax


2,031


2,403


2,426


3,104


3,537


(15)


(43)


4,434


6,864


(35)







Loss from discontinued operations, net of tax


—


—


(1)


—


(1)


—


**


—


(3)


**







Net income


2,031


2,403


2,425


3,104


3,536


(15)


(43)


4,434


6,861


(35)







Dividends and undistributed earnings allocated to participating securities(2)


(25)


(28)


(21)


(26)


(30)


(11)


(17)


(53)


(58)


(9)







Preferred stock dividends


(57)


(57)


(74)


(79)


(60)


—


(5)


(114)


(121)


(6)







Issuance cost for redeemed preferred stock(3)


—


—


(34)


(12)


—


—


—


—


—


—







Net income available to common stockholders


$      1,949


$      2,318


$      2,296


$      2,987


$      3,446


(16)


(43)


$      4,267


$      6,682


(36)







Common Share Statistics



























Basic earnings per common share:(2)



























Net income from continuing operations


$       4.98


$       5.65


$       5.43


$       6.81


$       7.65


(12) %


(35) %


$      10.65


$      14.70


(28) %







Net income per basic common share


$       4.98


$       5.65


$       5.43


$       6.81


$       7.65


(12)


(35)


$      10.65


$      14.70


(28)







Diluted earnings per common share:(2)



























Net income from continuing operations


$       4.96


$       5.62


$       5.41


$       6.78


$       7.62


(12) %


(35) %


$      10.61


$      14.65


(28) %







Net income per diluted common share


$       4.96


$       5.62


$       5.41


$       6.78


$       7.62


(12)


(35)


$      10.61


$      14.65


(28)







Weighted-average common shares outstanding (in millions):



























Basic


391.2


410.4


422.5


438.8


450.6


(5) %


(13) %


400.8


454.6


(12) %







Diluted


392.6


412.2


424.3


440.5


452.3


(5)


(13)


402.3


456.2


(12)







Common shares outstanding (period-end, in millions)


383.8


399.0


413.9


430.4


446.1


(4)


(14)


383.8


446.1


(14)







Dividends declared and paid per common share


$       0.60


$       0.60


$       0.60


$       1.20


$       0.40


—


50


$        1.20


$        0.80


50







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


87.84


91.77


99.74


99.60


97.20


(4)


(10)


87.84


97.20


(10)

































2022 Q2 vs


Six Months Ended June 30,







(Dollars in millions)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021







Balance Sheet (Period-End)



























Loans held for investment


$  296,384


$  280,466


$  277,340


$  261,390


$  249,597


6 %


19 %


$  296,384


$  249,597


19 %







Interest-earning assets


406,565


398,241


397,341


387,208


387,295


2


5


406,565


387,295


5







Total assets


440,288


434,195


432,381


425,377


423,420


1


4


440,288


423,420


4







Interest-bearing deposits


270,881


275,648


272,937


269,134


271,314


(2)


—


270,881


271,314


—







Total deposits


307,885


313,429


310,980


305,938


306,308


(2)


1


307,885


306,308


1







Borrowings


58,938


45,358


43,086


37,501


36,343


30


62


58,938


36,343


62







Common equity


48,564


51,499


56,184


57,632


58,136


(6)


(16)


48,564


58,136


(16)







Total stockholders' equity


53,410


56,345


61,029


63,544


64,624


(5)


(17)


53,410


64,624


(17)







Balance Sheet (Average Balances)



























Loans held for investment


$  286,110


$  275,342


$  267,159


$  253,101


$  246,463


4 %


16 %


$  280,756


$  245,207


14 %







Interest-earning assets


398,934


394,082


390,868


387,766


390,129


1


2


396,521


389,355


2







Total assets


435,327


430,372


427,845


424,506


424,099


1


3


432,806


422,959


2







Interest-bearing deposits


268,104


271,823


269,951


269,278


273,476


(1)


(2)


269,953


273,417


(1)







Total deposits


305,954


309,597


307,272


305,035


308,217


(1)


(1)


307,765


306,645


—







Borrowings


53,208


42,277


39,943


37,464


37,054


26


44


47,773


38,475


24







Common equity


49,319


54,591


56,946


58,230


56,885


(10)


(13)


51,940


56,333


(8)







Total stockholders' equity


54,165


59,437


62,498


64,682


62,376


(9)


(13)


56,786


61,504


(8)







 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated














2022 Q2 vs


Six Months Ended June 30,

(Dollars in millions, except as noted)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021

Performance Metrics





















Net interest income growth (period over period)


2 %


(1) %


5 %


7 %


(1) %


**


**


12 %


1 %


**

Non-interest income growth (period over period)


(3)


6


—


3


26


**


**


19


26


**

Total net revenue growth (period over period)


1


1


4


6


4


**


**


13


5


**

Total net revenue margin(5)


8.25


8.30


8.31


8.08


7.56


(5) bps


69 bps


8.27


7.44


83 bps

Net interest margin(6)


6.54


6.49


6.60


6.35


5.89


5


65


6.51


5.94


57

Return on average assets


1.87


2.23


2.27


2.92


3.34


(36)


(147)


2.05


3.25


(120)

Return on average tangible assets(7)


1.93


2.31


2.35


3.03


3.46


(38)


(153)


2.12


3.36


(124)

Return on average common equity(8)


15.81


16.98


16.13


20.52


24.24


(117)


(8) %


16.43


23.73


(7) %

Return on average tangible common equity(9)


22.63


23.36


21.82


27.50


32.75


(73)


(10)


23.03


32.19


(9)

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


6.41


6.61


7.00


6.62


6.44


(20)


(3) bps


6.51


6.29


22 bps

Efficiency ratio(10)


55.67


55.68


57.63


53.46


53.78


(1)


189


55.68


53.19


249

Operating efficiency ratio(11)


43.49


44.45


45.32


43.87


45.38


(96)


(189)


43.97


45.45


(148)

Effective income tax rate for continuing operations


20.8


18.4


20.7


22.1


22.6


240


(180)


19.5


21.7


(220)

Employees (period-end, in thousands)


53.6


51.5


50.8


50.8


52.0


4 %


3 %


53.6


52.0


3 %

Credit Quality Metrics





















Allowance for credit losses


$  11,491


$   11,308


$   11,430


$   11,573


$   12,346


2 %


(7) %


$  11,491


$   12,346


(7) %

Allowance coverage ratio


3.88 %


4.03 %


4.12 %


4.43 %


4.95 %


(15) bps


(107) bps


3.88 %


4.95 %


(107) bps

Net charge-offs


$       845


$        767


$        527


$        426


$       541


10 %


56 %


$    1,612


$     1,281


26 %

Net charge-off rate(12)


1.18 %


1.11 %


0.79 %


0.67 %


0.88 %


7 bps


30 bps


1.15 %


1.04 %


11 bps

30+ day performing delinquency rate


2.36


2.08


2.25


1.97


1.75


28


61


2.36


1.75


61

30+ day delinquency rate


2.54


2.21


2.41


2.13


1.89


33


65


2.54


1.89


65

Capital Ratios(13)





















Common equity Tier 1 capital


12.1 %


12.7 %


13.1 %


13.8 %


14.5 %


(60) bps


(240) bps


12.1 %


14.5 %


(240) bps

Tier 1 capital


13.5


14.1


14.5


15.7


16.6


(60)


(310)


13.5


16.6


(310)

Total capital


15.7


16.4


16.9


18.2


18.8


(70)


(310)


15.7


18.8


(310)

Tier 1 leverage


11.1


11.3


11.6


12.2


12.4


(20)


(130)


11.1


12.4


(130)

Tangible common equity ("TCE")(14)


7.9


8.7


9.9


10.4


10.6


(80)


(270)


7.9


10.6


(270)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income














2022 Q2 vs


Six Months Ended June 30,

(Dollars in millions, except as noted)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021

Interest income:





















Loans, including loans held for sale


$      6,605


$      6,367


$      6,451


$      6,205


$      5,753


4 %


15 %


$   12,972


$   11,607


12 %

Investment securities


435


402


368


317


370


8


18


837


761


10

Other


55


15


12


16


16


**


**


70


32


119

Total interest income


7,095


6,784


6,831


6,538


6,139


5


16


13,879


12,400


12

Interest expense:





















Deposits


293


218


222


228


237


34


24


511


506


1

Securitized debt obligations


65


29


30


29


28


124


132


94


60


57

Senior and subordinated notes


194


131


121


116


122


48


59


325


251


29

Other borrowings


26


9


8


9


9


189


189


35


18


94

Total interest expense


578


387


381


382


396


49


46


965


835


16

Net interest income


6,517


6,397


6,450


6,156


5,743


2


13


12,914


11,565


12

Provision (benefit) for credit losses


1,085


677


381


(342)


(1,160)


60


**


1,762


(1,983)


**

Net interest income after provision for credit losses


5,432


5,720


6,069


6,498


6,903


(5)


(21)


11,152


13,548


(18)

Non-interest income:





















Interchange fees, net


1,201


1,033


1,005


1,022


1,016


16


18


2,234


1,833


22

Service charges and other customer-related fees


415


400


435


407


384


4


8


815


736


11

Other


99


343


228


245


231


(71)


(57)


442


353


25

Total non-interest income


1,715


1,776


1,668


1,674


1,631


(3)


5


3,491


2,922


19

Non-interest expense:





















Salaries and associate benefits


1,946


2,026


1,941


1,852


1,781


(4)


9


3,972


3,628


9

Occupancy and equipment


481


513


527


481


523


(6)


(8)


994


995


—

Marketing


1,003


918


999


751


620


9


62


1,921


1,121


71

Professional services


458


397


449


358


341


15


34


855


633


35

Communications and data processing


339


339


326


319


315


—


8


678


617


10

Amortization of intangibles


14


14


13


5


5


—


180


28


11


155

Other


342


344


423


420


381


(1)


(10)


686


701


(2)

Total non-interest expense


4,583


4,551


4,678


4,186


3,966


1


16


9,134


7,706


19

Income from continuing operations before income taxes


2,564


2,945


3,059


3,986


4,568


(13)


(44)


5,509


8,764


(37)

Income tax provision


533


542


633


882


1,031


(2)


(48)


1,075


1,900


(43)

Income from continuing operations, net of tax


2,031


2,403


2,426


3,104


3,537


(15)


(43)


4,434


6,864


(35)

Loss from discontinued operations, net of tax


—


—


(1)


—


(1)


—


**


—


(3)


**

Net income


2,031


2,403


2,425


3,104


3,536


(15)


(43)


4,434


6,861


(35)

Dividends and undistributed earnings allocated to participating securities(2)


(25)


(28)


(21)


(26)


(30)


(11)


(17)


(53)


(58)


(9)

Preferred stock dividends


(57)


(57)


(74)


(79)


(60)


—


(5)


(114)


(121)


(6)

Issuance cost for redeemed preferred stock(3)


—


—


(34)


(12)


—


—


—


—


—


—

Net income available to common stockholders


$      1,949


$      2,318


$      2,296


$      2,987


$      3,446


(16)


(43)


$    4,267


$     6,682


(36)












































































2022 Q2 vs


Six Months Ended June 30,



2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021

Basic earnings per common share:(2)





















Net income from continuing operations


$        4.98


$        5.65


$        5.43


$        6.81


$        7.65


(12) %


(35) %


$    10.65


$     14.70


(28) %

Net income per basic common share


$        4.98


$        5.65


$        5.43


$        6.81


$        7.65


(12)


(35)


$    10.65


$     14.70


(28)

Diluted earnings per common share:(2)





















Net income from continuing operations


$        4.96


$        5.62


$        5.41


$        6.78


$        7.62


(12)


(35)


$    10.61


$     14.65


(28)

Net income per diluted common share


$        4.96


$        5.62


$        5.41


$        6.78


$        7.62


(12)


(35)


$    10.61


$     14.65


(28)

Weighted-average common shares outstanding (in millions):





















Basic common shares


391.2


410.4


422.5


438.8


450.6


(5)


(13)


400.8


454.6


(12)

Diluted common shares


392.6


412.2


424.3


440.5


452.3


(5)


(13)


402.3


456.2


(12)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets














2022 Q2 vs


(Dollars in millions)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2

Assets:















Cash and cash equivalents:















Cash and due from banks


$     4,825


$     5,107


$     4,164


$     5,444


$     5,312


(6) %


(9) %

Interest-bearing deposits and other short-term investments


16,728


21,697


17,582


21,180


29,534


(23)


(43)

Total cash and cash equivalents


21,553


26,804


21,746


26,624


34,846


(20)


(38)

Restricted cash for securitization investors


697


281


308


234


242


148


188

Securities available for sale


83,022


89,076


95,261


98,149


101,766


(7)


(18)

Loans held for investment:















Unsecuritized loans held for investment


271,339


257,505


252,468


238,475


226,130


5


20

Loans held in consolidated trusts


25,045


22,961


24,872


22,915


23,467


9


7

Total loans held for investment


296,384


280,466


277,340


261,390


249,597


6


19

Allowance for credit losses


(11,491)


(11,308)


(11,430)


(11,573)


(12,346)


2


(7)

Net loans held for investment


284,893


269,158


265,910


249,817


237,251


6


20

Loans held for sale


875


1,155


5,888


6,300


6,522


(24)


(87)

Premises and equipment, net


4,238


4,238


4,210


4,204


4,227


—


—

Interest receivable


1,611


1,479


1,460


1,418


1,372


9


17

Goodwill


14,778


14,784


14,782


14,652


14,654


—


1

Other assets


28,621


27,220


22,816


23,979


22,540


5


27

Total assets


$ 440,288


$ 434,195


$ 432,381


$ 425,377


$ 423,420


1


4




























2022 Q2 vs



2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2

(Dollars in millions)








Liabilities:















Interest payable


$        333


$        261


$        281


$        241


$        301


28 %


11 %

Deposits:















Non-interest-bearing deposits


37,004


37,781


38,043


36,804


34,994


(2)


6

Interest-bearing deposits


270,881


275,648


272,937


269,134


271,314


(2)


—

Total deposits


307,885


313,429


310,980


305,938


306,308


(2)


1

Securitized debt obligations


17,466


13,740


14,994


12,635


10,561


27


65

Other debt:















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


440


594


820


825


845


(26)


(48)

Senior and subordinated notes


30,489


26,976


27,219


23,983


24,878


13


23

Other borrowings


10,543


4,048


53


58


59


160


**

Total other debt


41,472


31,618


28,092


24,866


25,782


31


61

Other liabilities


19,722


18,802


17,005


18,153


15,844


5


24

Total liabilities


386,878


377,850


371,352


361,833


358,796


2


8
















Stockholders' equity:















Preferred stock


0


0


0


0


0


—


—

Common stock


7


7


7


7


7


—


—

Additional paid-in capital, net


34,425


34,286


34,112


35,051


35,472


—


(3)

Retained earnings


54,836


53,099


51,006


48,944


46,461


3


18

Accumulated other comprehensive income (loss)


(6,916)


(4,093)


374


1,360


1,792


69


**

Treasury stock, at cost


(28,942)


(26,954)


(24,470)


(21,818)


(19,108)


7


51

Total stockholders' equity


53,410


56,345


61,029


63,544


64,624


(5)


(17)

Total liabilities and stockholders' equity


$ 440,288


$ 434,195


$ 432,381


$ 425,377


$ 423,420


1


4

 

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 $211 million in Q2 2022, $192 million in Q1 2022, $151 million in Q4 2021, $123 million in Q3 2021 and $175 million in Q2 2021 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 September 1, 2021, we redeemed all outstanding shares of our fixed-to-floating rate non-cumulative perpetual preferred stock Series E, which reduced our net income available to common shareholders by $12 million in Q3 2021. On December 1, 2021, we redeemed all outstanding shares of our fixed rate 5.20% non-cumulative perpetual preferred stock Series G and our fixed rate 6.00% non-cumulative perpetual preferred stock Series H, which together reduced our net income available to common shareholders by $34 million in Q4 2021.

(4) 

Tangible book value per common share is a non-GAAP measure calculated based on TCE 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 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 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)   

Capital ratios as of the end of Q2 2022 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.

(14) 

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




2022 Q2


2022 Q1


2021 Q2

(Dollars in millions, except as noted)


Average
Balance


Interest
Income/
Expense


Yield/Rate(1)


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

Interest-earning assets:



















Loans, including loans held for sale


$   287,134


$      6,605


9.20 %


$   279,022


$      6,367


9.13 %


$   249,280


$      5,753


9.23 %

Investment securities


92,062


435


1.89


94,700


402


1.70


100,071


370


1.48

Cash equivalents and other


19,738


55


1.10


20,360


15


0.29


40,778


16


0.16

Total interest-earning assets


$   398,934


$      7,095


7.11


$   394,082


$      6,784


6.89


$   390,129


$      6,139


6.29

Interest-bearing liabilities:



















Interest-bearing deposits


$   268,104


$         293


0.44


$   271,823


$         218


0.32


$   273,476


$         237


0.35

Securitized debt obligations


15,041


65


1.73


13,740


29


0.84


10,890


28


1.03

Senior and subordinated notes


28,919


194


2.68


26,481


131


1.98


25,487


122


1.92

Other borrowings and liabilities


10,922


26


0.98


3,633


9


1.00


2,198


9


1.67

Total interest-bearing liabilities


$   322,986


$         578


0.72


$   315,677


$         387


0.49


$   312,051


$         396


0.50

Net interest income/spread




$      6,517


6.40




$      6,397


6.40




$      5,743


5.79

Impact of non-interest-bearing funding






0.14






0.09






0.10

Net interest margin






6.54 %






6.49 %






5.89 %











Six Months Ended June 30,









2022


2021

(Dollars in millions, except as noted)








Average
Balance


Interest
Income/
Expense


Yield/Rate(1)


Average
Balance


Interest
Income/
Expense


Yield/Rate

Interest-earning assets:



















Loans, including loans held for sale








$   283,100


$     12,972


9.16 %


$   247,984


$     11,607


9.36 %

Investment securities








93,374


837


1.79


99,189


761


1.53

Cash equivalents and other








20,047


70


0.69


42,182


32


0.15

Total interest-earning assets








$   396,521


$     13,879


7.00


$   389,355


$    12,400


6.37

Interest-bearing liabilities:



















Interest-bearing deposits








$   269,953


$          511


0.38


$   273,417


$         506


0.37

Securitized debt obligations








14,394


94


1.31


11,561


60


1.04

Senior and subordinated notes








27,707


325


2.34


26,223


251


1.92

Other borrowings and liabilities








7,298


35


0.98


2,205


18


1.65

Total interest-bearing liabilities








$   319,352


$          965


0.60


$   313,406


$         835


0.53

Net interest income/spread










$     12,914


6.40




$    11,565


5.84

Impact of non-interest-bearing funding












0.11






0.10

Net interest margin












6.51 %






5.94 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics














2022 Q2 vs


Six Months Ended June 30,


(Dollars in millions, except as noted)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs.
2021

Loans Held for Investment (Period-End)





















Credit card:





















   Domestic credit card


$   115,004


$   107,987


$   108,723


$     99,258


$     95,309


6 %


21 %


$ 115,004


$   95,309


21 %

   International card businesses


5,876


5,975


6,049


5,772


5,708


(2)


3


5,876


5,708


3

Total credit card


120,880


113,962


114,772


105,030


101,017


6


20


120,880


101,017


20

Consumer banking:





















   Auto


79,926


78,604


75,779


74,716


71,713


2


11


79,926


71,713


11

   Retail banking


1,605


1,726


1,867


2,396


3,046


(7)


(47)


1,605


3,046


(47)

Total consumer banking


81,531


80,330


77,646


77,112


74,759


1


9


81,531


74,759


9

Commercial banking:





















   Commercial and multifamily real estate


37,845


34,354


35,262


33,096


29,616


10


28


37,845


29,616


28

   Commercial and industrial


56,128


51,820


49,660


46,152


44,205


8


27


56,128


44,205


27

Total commercial banking


93,973


86,174


84,922


79,248


73,821


9


27


93,973


73,821


27

Total loans held for investment


$   296,384


$   280,466


$   277,340


$   261,390


$   249,597


6


19


$ 296,384


$ 249,597


19

Loans Held for Investment (Average)





















Credit card:





















   Domestic credit card


$   109,962


$   105,536


$   102,717


$     96,309


$     91,535


4 %


20 %


$ 107,761


$   92,062


17 %

   International card businesses


5,873


5,944


5,871


5,737


8,139


(1)


(28)


5,909


8,040


(27)

Total credit card


115,835


111,480


108,588


102,046


99,674


4


16


113,670


100,102


14

Consumer banking:





















   Auto


79,313


76,892


75,284


73,296


69,543


3


14


78,109


67,873


15

   Retail banking


1,668


1,797


2,160


2,700


3,162


(7)


(47)


1,732


3,106


(44)

Total consumer banking


80,981


78,689


77,444


75,996


72,705


3


11


79,841


70,979


12

Commercial banking:





















   Commercial and multifamily real estate


35,754


34,671


33,591


30,314


30,124


3


19


35,215


29,991


17

   Commercial and industrial


53,540


50,502


47,536


44,745


43,960


6


22


52,030


44,135


18

Total commercial banking


89,294


85,173


81,127


75,059


74,084


5


21


87,245


74,126


18

Total average loans held for investment


$   286,110


$   275,342


$   267,159


$   253,101


$   246,463


4


16


$ 280,756


$ 245,207


14























































2022 Q2 vs


Six Months Ended June 30,



2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs.
2021









Net Charge-Off (Recovery) Rates





















Credit card:





















   Domestic credit card


2.26 %


2.12 %


1.49 %


1.36 %


2.28 %


14 bps


(2) bps


2.19 %


2.41 %


(22) bps

   International card businesses


3.82


3.20


0.14


2.72


2.41


62


141


3.51


2.36


115

Total credit card


2.34


2.18


1.42


1.43


2.29


16


5


2.26


2.41


(15)

Consumer banking:





















   Auto


0.61


0.66


0.58


0.18


(0.12)


(5)


73


0.63


0.17


46

   Retail banking


3.62


4.31


6.69


2.45


1.41


(69)


221


3.98


1.54


244

Total consumer banking


0.67


0.75


0.75


0.27


(0.06)


(8)


73


0.71


0.23


48

Commercial banking:





















   Commercial and multifamily real estate


(0.08)


—


—


0.01


0.04


(8)


(12)


(0.04)


0.05


(9)

   Commercial and industrial


0.29


0.11


(0.03)


0.07


(0.21)


18


50


0.20


(0.05)


25

Total commercial banking


0.14


0.06


(0.02)


0.05


(0.11)


8


25


0.10


(0.01)


11

Total net charge-offs


1.18


1.11


0.79


0.67


0.88


7


30


1.15


1.04


11

30+ Day Performing Delinquency Rates





















Credit card:





















   Domestic credit card


2.35 %


2.32 %


2.22 %


1.93 %


1.68 %


3 bps


67 bps


2.35 %


1.68 %


67 bps

   International card businesses


3.67


3.58


3.42


3.27


2.89


9


78


3.67


2.89


78

Total credit card


2.42


2.38


2.28


2.00


1.75


4


67


2.42


1.75


67

Consumer banking:





















   Auto


4.47


3.85


4.32


3.65


3.26


62


121


4.47


3.26


121

   Retail banking


0.67


0.74


1.92


1.15


0.79


(7)


(12)


0.67


0.79


(12)

Total consumer banking


4.39


3.78


4.26


3.58


3.16


61


123


4.39


3.16


123

Nonperforming Loans and
Nonperforming Assets Rates(2)(3)





















Credit card:





















   International card businesses


0.13 %


0.14 %


0.16 %


0.16 %


0.20 %


(1) bps


(7) bps


0.13 %


0.20 %


(7) bps

Total credit card


0.01


0.01


0.01


0.01


0.01


—


—


0.01


0.01


—

Consumer banking:





















   Auto


0.50


0.41


0.45


0.36


0.29


9


21


0.50


0.29


21

   Retail banking


2.61


2.63


2.51


2.20


1.75


(2)


86


2.61


1.75


86

Total consumer banking


0.54


0.46


0.50


0.42


0.35


8


19


0.54


0.35


19

Commercial banking:





















   Commercial and multifamily real estate


0.78


0.98


1.09


0.87


1.02


(20)


(24)


0.78


1.02


(24)

   Commercial and industrial


0.64


0.69


0.64


0.68


1.03


(5)


(39)


0.64


1.03


(39)

Total commercial banking


0.70


0.81


0.82


0.76


1.03


(11)


(33)


0.70


1.03


(33)

Total nonperforming loans


0.37


0.38


0.40


0.35


0.41


(1)


(4)


0.37


0.41


(4)

Total nonperforming assets


0.39


0.40


0.41


0.37


0.43


(1)


(4)


0.39


0.43


(4)

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




Three Months Ended June 30, 2022



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, 2022


$         7,968


$             312


$         8,280


$         1,852


$             50


$         1,902


$         1,126


$       11,308

Charge-offs


(920)


(89)


(1,009)


(311)


(20)


(331)


(43)


(1,383)

Recoveries


298


33


331


190


5


195


12


538

Net charge-offs


(622)


(56)


(678)


(121)


(15)


(136)


(31)


(845)

Provision for credit losses


494


87


581


268


13


281


183


1,045

Allowance build (release) for credit losses


(128)


31


(97)


147


(2)


145


152


200

Other changes(4)


—


(17)


(17)


—


—


—


—


(17)

Balance as of June 30, 2022


7,840


326


8,166


1,999


48


2,047


1,278


11,491

Reserve for unfunded lending commitments:

















Balance as of March 31, 2022


—


—


—


—


—


—


200


200

Provision for losses on unfunded lending commitments


—


—


—


—


—


—


39


39

Balance as of June 30, 2022


—


—


—


—


—


—


239


239

Combined allowance and reserve as of June 30, 2022


$         7,840


$             326


$         8,166


$         1,999


$             48


$         2,047


$         1,517


$       11,730





Six Months Ended June 30, 2022



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, 2021


$         7,968


$             377


$         8,345


$         1,852


$             66


$         1,918


$         1,167


$       11,430

Charge-offs


(1,787)


(177)


(1,964)


(637)


(43)


(680)


(60)


(2,704)

Recoveries


606


73


679


389


9


398


15


1,092

Net charge-offs


(1,181)


(104)


(1,285)


(248)


(34)


(282)


(45)


(1,612)

Provision for credit losses


1,053


73


1,126


395


16


411


156


1,693

Allowance build (release) for credit losses


(128)


(31)


(159)


147


(18)


129


111


81

Other changes(4)


—


(20)


(20)


—


—


—


—


(20)

Balance as of June 30, 2022


7,840


326


8,166


1,999


48


2,047


1,278


11,491

Reserve for unfunded lending commitments:

















Balance as of December 31, 2021


—


—


—


—


—


—


165


165

Provision for losses on unfunded lending commitments


—


—


—


—


—


—


74


74

Balance as of June 30, 2022


—


—


—


—


—


—


239


239

Combined allowance and reserve as of June 30, 2022


$         7,840


$             326


$         8,166


$         1,999


$             48


$         2,047


$         1,517


$       11,730

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results




Three Months Ended June 30, 2022


Six Months Ended June 30, 2022

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(5)


Other(5)


Total


Credit
Card


Consumer
Banking


Commercial
Banking(5)


Other(5)


Total

Net interest income (loss)


$        3,899


$       2,147


$             635


$      (164)


$      6,517


$        7,738


$       4,260


$          1,242


$      (326)


$    12,914

Non-interest income (loss)


1,410


96


272


(63)


1,715


2,868


201


549


(127)


3,491

Total net revenue (loss)


5,309


2,243


907


(227)


8,232


10,606


4,461


1,791


(453)


16,405

Provision (benefit) for credit losses


581


281


222


1


1,085


1,126


411


230


(5)


1,762

Non-interest expense


2,771


1,286


485


41


4,583


5,554


2,522


973


85


9,134

Income (loss) from continuing operations before income taxes


1,957


676


200


(269)


2,564


3,926


1,528


588


(533)


5,509

Income tax provision (benefit)


466


160


48


(141)


533


935


362


140


(362)


1,075

Income (loss) from continuing operations, net of tax


$        1,491


$          516


$             152


$      (128)


$      2,031


$        2,991


$       1,166


$             448


$      (171)


$      4,434
























Three Months Ended March 31, 2022











(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(5)


Other(5)


Total











Net interest income (loss)


$        3,839


$       2,113


$             607


$      (162)


$      6,397











Non-interest income (loss)


1,458


105


277


(64)


1,776











Total net revenue (loss)


5,297


2,218


884


(226)


8,173











Provision (benefit) for credit losses


545


130


8


(6)


677











Non-interest expense


2,783


1,236


488


44


4,551











Income (loss) from continuing operations before income taxes


1,969


852


388


(264)


2,945











Income tax provision (benefit)


469


202


92


(221)


542











Income (loss) from continuing operations, net of tax


$        1,500


$          650


$             296


$        (43)


$      2,403


































Three Months Ended June 30, 2021


Six Months Ended June 30, 2021

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(5)


Other(5)


Total


Credit
Card


Consumer
Banking


Commercial
Banking(5)


Other(5)


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

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business














2022 Q2 vs


Six Months Ended June 30,

(Dollars in millions, except as noted)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021

Credit Card





















Earnings:





















Net interest income


$     3,899


$      3,839


$      3,865


$      3,620


$      3,217


2 %


21 %


$     7,738


$      6,589


17 %

Non-interest income


1,410


1,458


1,261


1,263


1,253


(3)


13


2,868


2,282


26

Total net revenue


5,309


5,297


5,126


4,883


4,470


—


19


10,606


8,871


20

Provision (benefit) for credit losses


581


545


423


(198)


(635)


7


**


1,126


(1,127)


**

Non-interest expense


2,771


2,783


2,799


2,424


2,263


—


22


5,554


4,398


26

Income from continuing operations before income taxes


1,957


1,969


1,904


2,657


2,842


(1)


(31)


3,926


5,600


(30)

Income tax provision


466


469


451


627


672


(1)


(31)


935


1,325


(29)

Income from continuing operations, net of tax


$     1,491


$      1,500


$      1,453


$      2,030


$      2,170


(1)


(31)


$     2,991


$      4,275


(30)

Selected performance metrics:





















Period-end loans held for investment


$ 120,880


$  113,962


$  114,772


$  105,030


$  101,017


6


20


$ 120,880


$  101,017


20

Average loans held for investment


115,835


111,480


108,588


102,046


99,674


4


16


113,670


100,102


14

Average yield on loans outstanding(1)


15.24 %


14.97 %


14.94 %


14.88 %


14.04 %


27 bps


120 bps


15.11 %


14.26 %


85 bps

Total net revenue margin(6)


18.33


18.56


18.11


18.33


17.59


(23)


74


18.44


17.38


106

Net charge-off rate


2.34


2.18


1.42


1.43


2.29


16


5


2.26


2.41


(15)

30+ day performing delinquency rate


2.42


2.38


2.28


2.00


1.75


4


67


2.42


1.75


67

30+ day delinquency rate


2.42


2.39


2.29


2.00


1.75


3


67


2.42


1.75


67

Nonperforming loan rate(2)


0.01


0.01


0.01


0.01


0.01


—


—


0.01


0.01


—

Purchase volume(7)


$ 148,491


$  133,662


$  149,982


$  136,614


$  132,676


11 %


12 %


$ 282,153


$  241,009


17 %


































2022 Q2 vs


Six Months Ended June 30,

(Dollars in millions, except as noted)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021

Domestic Card





















Earnings:





















Net interest income


$     3,651


$     3,620


$      3,558


$      3,319


$      2,944


1 %


24 %


$     7,271


$      6,039


20 %

Non-interest income


1,340


1,248


1,190


1,200


1,183


7


13


2,588


2,142


21

Total net revenue


4,991


4,868


4,748


4,519


4,127


3


21


9,859


8,181


21

Provision (benefit) for credit losses


494


559


384


(200)


(561)


(12)


**


1,053


(1,052)


**

Non-interest expense


2,594


2,564


2,564


2,191


2,034


1


28


5,158


3,957


30

Income from continuing operations before income taxes


1,903


1,745


1,800


2,528


2,654


9


(28)


3,648


5,276


(31)

Income tax provision


450


414


424


597


626


9


(28)


864


1,245


(31)

Income from continuing operations, net of tax


$     1,453


$      1,331


$      1,376


$      1,931


$      2,028


9


(28)


$     2,784


$      4,031


(31)

Selected performance metrics:





















Period-end loans held for investment


$ 115,004


$  107,987


$  108,723


$    99,258


$    95,309


6


21


$ 115,004


$    95,309


21

Average loans held for investment


109,962


105,536


102,717


96,309


91,535


4


20


107,761


92,062


17

Average yield on loans outstanding(1)


15.03 %


14.82 %


14.86 %


14.80 %


13.91 %


21 bps


112 bps


14.92 %


14.13 %


79 bps

Total net revenue margin(6)


18.16


18.28


18.14


18.40


17.66


(12)


50


18.21


17.40


81

Net charge-off rate


2.26


2.12


1.49


1.36


2.28


14


(2)


2.19


2.41


(22)

30+ day performing delinquency rate


2.35


2.32


2.22


1.93


1.68


3


67


2.35


1.68


67

Purchase volume(7)


$ 144,668


$  126,284


$  138,825


$  126,057


$  122,456


15 %


18 %


$ 270,952


$  222,416


22 %

Refreshed FICO scores:(8)





















Greater than 660


70 %


70 %


71 %


71 %


72 %


—


(2)


70 %


72 %


(2)

660 or below


30


30


29


29


28


—


2


30


28


2

Total


100 %


100 %


100 %


100 %


100 %






100 %


100 %



 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business














2022 Q2 vs


Six Months Ended June 30,

(Dollars in millions, except as noted)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021

Consumer Banking





















Earnings:





















Net interest income


$   2,147


$   2,113


$   2,158


$   2,159


$   2,101


2 %


2 %


$  4,260


$   4,131


3 %

Non-interest income


96


105


142


127


144


(9)


(33)


201


285


(29)

Total net revenue


2,243


2,218


2,300


2,286


2,245


1


—


4,461


4,416


1

Provision (benefit) for credit losses


281


130


2


(91)


(306)


116


**


411


(432)


**

Non-interest expense


1,286


1,236


1,285


1,186


1,123


4


15


2,522


2,240


13

Income from continuing operations before income taxes


676


852


1,013


1,191


1,428


(21)


(53)


1,528


2,608


(41)

Income tax provision


160


202


239


282


337


(21)


(53)


362


615


(41)

Income from continuing operations, net of tax


$      516


$      650


$      774


$      909


$   1,091


(21)


(53)


$  1,166


$   1,993


(41)

Selected performance metrics:





















Period-end loans held for investment


$ 81,531


$ 80,330


$ 77,646


$ 77,112


$ 74,759


1


9


$ 81,531


$ 74,759


9

Average loans held for investment


80,981


78,689


77,444


75,996


72,705


3


11


79,841


70,979


12

Average yield on loans held for investment(1)


7.08 %


7.17 %


7.55 %


7.78 %


7.99 %


(9) bps


(91) bps


7.13 %


8.07 %


(94) bps

Auto loan originations


$ 10,328


$ 11,713


$   9,721


$ 11,570


$ 12,959


(12) %


(20) %


$ 22,041


$ 21,792


1 %

Period-end deposits


255,904


258,359


256,407


252,387


251,155


(1)


2


255,904


251,155


2

Average deposits


254,336


255,265


253,372


251,307


252,488


—


1


254,798


251,002


2

Average deposits interest rate


0.38 %


0.29 %


0.30 %


0.30 %


0.31 %


9 bps


7 bps


0.33 %


0.33 %


—

Net charge-off (recovery) rate


0.67


0.75


0.75


0.27


(0.06)


(8)


73


0.71


0.23


48 bps

30+ day performing delinquency rate


4.39


3.78


4.26


3.58


3.16


61


123


4.39


3.16


123

30+ day delinquency rate


4.81


4.13


4.66


3.88


3.40


68


141


4.81


3.40


141

Nonperforming loan rate(2)


0.54


0.46


0.50


0.42


0.35


8


19


0.54


0.35


19

Nonperforming asset rate(3)


0.60


0.52


0.56


0.47


0.40


8


20


0.60


0.40


20

Auto—At origination FICO scores:(9)





















Greater than 660


52 %


51 %


50 %


49 %


48 %


1 %


4 %


52 %


48 %


4 %

621 - 660


20


20


20


20


20


—


—


20


20


—

620 or below


28


29


30


31


32


(1)


(4)


28


32


(4)

Total


100 %


100 %


100 %


100 %


100 %






100 %


100 %
























 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business














2022 Q2 vs


Six Months Ended June 30,

(Dollars in millions, except as noted)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021

Commercial Banking





















Earnings:





















Net interest income


$      635


$       607


$       595


$      578


$       460


5 %


38 %


$   1,242


$      980


27 %

Non-interest income


272


277


345


306


257


(2)


6


549


497


10

Total net revenue(5)


907


884


940


884


717


3


26


1,791


1,477


21

Provision (benefit) for credit losses


222


8


(44)


(53)


(219)


**


**


230


(422)


**

Non-interest expense


485


488


520


459


417


(1)


16


973


836


16

Income from continuing operations before income taxes


200


388


464


478


519


(48)


(61)


588


1,063


(45)

Income tax provision


48


92


109


113


123


(48)


(61)


140


251


(44)

Income from continuing operations, net of tax


$      152


$       296


$       355


$      365


$       396


(49)


(62)


$      448


$      812


(45)

Selected performance metrics:





















Period-end loans held for investment


$ 93,973


$  86,174


$  84,922


$  79,248


$  73,821


9


27


$ 93,973


$ 73,821


27

Average loans held for investment


89,294


85,173


81,127


75,059


74,084


5


21


87,245


74,126


18

Average yield on loans held for investment(1)(5)


3.18 %


2.66 %


2.71 %


2.77 %


2.72 %


52 bps


46 bps


2.92 %


2.74 %


18 bps

Period-end deposits


$ 38,844


$  45,232


$  44,809


$  43,347


$  42,973


(14) %


(10) %


$ 38,844


$ 42,973


(10) %

Average deposits


40,536


45,008


44,206


42,729


42,311


(10)


(4)


42,760


41,215


4

Average deposits interest rate


0.19 %


0.12 %


0.12 %


0.15 %


0.14 %


70 bps


5 bps


0.15 %


0.16 %


(1) bps

Net charge-off (recovery) rate


0.14


0.06


(0.02)


0.05


(0.11)


8


25


0.10


(0.01)


11

Nonperforming loan rate(2)


0.70


0.81


0.82


0.76


1.03


(11)


(33)


0.70


1.03


(33)

Nonperforming asset rate(3)


0.70


0.81


0.82


0.76


1.03


(11)


(33)


0.70


1.03


(33)

Risk category:(10)





















Noncriticized


$ 88,349


$  80,586


$  79,014


$  73,218


$  67,481


10 %


31 %


$ 88,349


$ 67,481


31 %

Criticized performing


4,969


4,893


5,209


5,429


5,581


2


(11)


4,969


5,581


(11)

Criticized nonperforming


655


695


699


601


759


(6)


(14)


655


759


(14)

Total commercial banking loans


$ 93,973


$  86,174


$  84,922


$  79,248


$  73,821


9


27


$ 93,973


$ 73,821


27

Risk category as a percentage of period-end loans

held for investment:(10)

















Noncriticized


94.01 %


93.51 %


93.05 %


92.39 %


91.41 %


50 bps


260 bps


94.01 %


91.41 %


260 bps

Criticized performing


5.29


5.68


6.13


6.85


7.56


(39)


(227)


5.29


7.56


(227)

Criticized nonperforming


0.70


0.81


0.82


0.76


1.03


(11)


(33)


0.70


1.03


(33)

Total commercial banking loans


100.00 %


100.00 %


100.00 %


100.00 %


100.00 %






100.00 %


100.00 %



 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total














2022 Q2 vs


Six Months Ended June 30,

(Dollars in millions)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


2022

Q1


2021

Q2


2022


2021


2022 vs

2021

Other





















Earnings:





















Net interest loss


$        (164)


$        (162)


$        (168)


$       (201)


$         (35)


1 %


**


$        (326)


$        (135)


141 %

Non-interest loss


(63)


(64)


(80)


(22)


(23)


(2)


174 %


(127)


(142)


(11)

Total net loss(5)


(227)


(226)


(248)


(223)


(58)


—


**


(453)


(277)


64

Provision (benefit) for credit losses


1


(6)


—


—


—


**


**


(5)


(2)


150

Non-interest expense(11)


41


44


74


117


163


(7)


(75)


85


232


(63)

Loss from continuing operations before income taxes


(269)


(264)


(322)


(340)


(221)


2


22


(533)


(507)


5

Income tax benefit


(141)


(221)


(166)


(140)


(101)


(36)


40


(362)


(291)


24

Loss from continuing operations, net of tax


$        (128)


$          (43)


$        (156)


$        (200)


$        (120)


198


7


$        (171)


$        (216)


(21)

Selected performance metrics:





















Period-end deposits


$    13,137


$      9,838


$      9,764


$    10,204


$    12,180


34


8


$    13,137


$    12,180


8

Average deposits


11,082


9,324


9,694


10,999


13,418


19


(17)


10,207


14,428


(29)

Total





















Earnings:





















Net interest income


$      6,517


$      6,397


$      6,450


$      6,156


$      5,743


2 %


13 %


$    12,914


$    11,565


12 %

Non-interest income


1,715


1,776


1,668


1,674


1,631


(3)


5


3,491


2,922


19

Total net revenue


8,232


8,173


8,118


7,830


7,374


1


12


16,405


14,487


13

Provision (benefit) for credit losses


1,085


677


381


(342)


(1,160)


60


**


1,762


(1,983)


**

Non-interest expense


4,583


4,551


4,678


4,186


3,966


1


16


9,134


7,706


19

Income from continuing operations before income taxes


2,564


2,945


3,059


3,986


4,568


(13)


(44)


5,509


8,764


(37)

Income tax provision


533


542


633


882


1,031


(2)


(48)


1,075


1,900


(43)

Income from continuing operations, net of tax


$      2,031


$      2,403


$      2,426


$      3,104


$      3,537


(15)


(43)


$      4,434


$      6,864


(35)

Selected performance metrics:





















Period-end loans held for investment


$  296,384


$  280,466


$  277,340


$  261,390


$  249,597


6


19


$  296,384


$  249,597


19

Average loans held for investment


286,110


275,342


267,159


253,101


246,463


4


16


280,756


245,207


14

Period-end deposits


307,885


313,429


310,980


305,938


306,308


(2)


1


307,885


306,308


1

Average deposits


305,954


309,597


307,272


305,035


308,217


(1)


(1)


307,765


306,645


—

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)


(1)

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. Average yield is calculated using whole dollar values for average balances and interest income/expense. Accordingly, total interest earning assets less total interest bearing liabilities may not total net interest income/spread.

(2)

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. For Commercial Banking, loans categorized as nonperforming are considered criticized nonperforming.

(3)

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.

(4)

Primarily represents foreign currency translation adjustments.

(5)  

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.

(6)

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

(7)  

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

(8)

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.

(9)

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.

(10)

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

(11)

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,

2022


March 31,

2022


December 31,

2021


September 30,

2021


June 30,

2021

Regulatory Capital Metrics











Common equity excluding AOCI


$      57,278


$        57,390


$        58,206


$         58,705


$        58,969

Adjustments:











AOCI, net of tax(2)


(72)


(20)


(23)


(33)


(5)

Goodwill, net of related deferred tax liabilities


(14,548)


(14,559)


(14,562)


(14,435)


(14,440)

Intangible assets, net of related deferred tax liabilities


(80)


(94)


(108)


(84)


(76)

Other


(15)


(16)


(12)


(15)


(16)

Common equity Tier 1 capital


$      42,563


$        42,701


$        43,501


$         44,138


$        44,432

Tier 1 capital


$      47,408


$        47,547


$        48,346


$         50,049


$        50,920

Total capital(3)


55,104


55,059


56,089


57,851


57,932

Risk-weighted assets


352,064


336,739


332,673


318,729


307,334

Adjusted average assets(4)


427,446


418,957


415,141


411,216


411,032

Capital Ratios











Common equity Tier 1 capital(5)


12.1 %


12.7 %


13.1 %


13.8 %


14.5 %

Tier 1 capital(6)


13.5


14.1


14.5


15.7


16.6

Total capital(7)


15.7


16.4


16.9


18.2


18.8

Tier 1 leverage(4)


11.1


11.3


11.6


12.2


12.4

Tangible common equity ("TCE")(8)


7.9


8.7


9.9


10.4


10.6

 

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.


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


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2


Six Months Ended June 30,

2022


2021

Adjusted diluted earnings per share ("EPS"):















Net income available to common stockholders (GAAP)


$            1,949


$            2,318


$           2,296


$           2,987


$           3,446


$             4,267


$             6,682

Legal reserve activity, including insurance recoveries


—


—


—


45


55


—


55

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


1,949


2,318


2,296


3,032


3,501


4,267


6,737

Income tax impacts


—


—


—


(11)


(13)


—


(13)

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


$            1,949


$            2,318


$           2,296


$           3,021


$           3,488


$             4,267


$             6,724
















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


392.6


412.2


424.3


440.5


452.3


402.3


456.2
















Diluted EPS (GAAP)


$              4.96


$              5.62


$             5.41


$             6.78


$             7.62


$             10.61


$             14.65

Impact of adjustments noted above


—


—


—


0.08


0.09


—


0.09

Adjusted diluted EPS (non-GAAP)


$              4.96


$              5.62


$             5.41


$             6.86


$             7.71


$             10.61


$             14.74
















Adjusted efficiency ratio:















Non-interest expense (GAAP)


$            4,583


$            4,551


$           4,678


$           4,186


$           3,966


$             9,134


$             7,706

Legal reserve activity, including insurance recoveries


—


—


—


(45)


(55)


—


(55)

Adjusted non-interest expense (non-GAAP)


$            4,583


$            4,551


$           4,678


$           4,141


$           3,911


$             9,134


$             7,651
















Total net revenue (GAAP)


$            8,232


$            8,173


$           8,118


$           7,830


$           7,374


$           16,405


$           14,487
















Efficiency ratio (GAAP)


55.67 %


55.68 %


57.63 %


53.46 %


53.78 %


55.68 %


53.19 %

Impact of adjustments noted above


—


—


—


          (57) bps


          (74) bps


—


            (38) bps

Adjusted efficiency ratio (non-GAAP)


55.67 %


55.68 %


57.63 %


52.89 %


53.04 %


55.68 %


52.81 %
















Adjusted operating efficiency ratio:















Operating expense (GAAP)


$            3,580


$            3,633


$           3,679


$           3,435


$           3,346


$             7,213


$             6,585

Legal reserve activity, including insurance recoveries


—


—


—


(45)


(55)


—


(55)

Adjusted operating expense (non-GAAP)


$            3,580


$            3,633


$           3,679


$           3,390


$           3,291


$             7,213


$             6,530
















Total net revenue (GAAP)


$            8,232


$            8,173


$           8,118


$           7,830


$           7,374


$           16,405


$           14,487
















Operating efficiency ratio (GAAP)


43.49 %


44.45 %


45.32 %


43.87 %


45.38 %


43.97 %


45.45 %

Impact of adjustments noted above


—


—


—


          (57) bps


          (75) bps


—


            (38) bps

Adjusted operating efficiency ratio (non-GAAP)


43.49 %


44.45 %


45.32 %


43.30 %


44.63 %


43.97 %


45.07 %

 

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.


(Dollars in millions)


2022

Q2


2022

Q1


2021

Q4


2021

Q3


2021

Q2

Tangible Common Equity (Period-End)











Stockholders' equity


$          53,410


$          56,345


$          61,029


$          63,544


$          64,624

Goodwill and intangible assets(9)


(14,850)


(14,883)


(14,907)


(14,766)


(14,774)

Noncumulative perpetual preferred stock


(4,845)


(4,845)


(4,845)


(5,912)


(6,488)

Tangible common equity


$          33,715


$          36,617


$          41,277


$          42,866


$          43,362

Tangible Common Equity (Average)











Stockholders' equity


$          54,165


$          59,437


$          62,498


$          64,682


$          62,376

Goodwill and intangible assets(9)


(14,875)


(14,904)


(14,847)


(14,777)


(14,788)

Noncumulative perpetual preferred stock


(4,845)


(4,845)


(5,552)


(6,452)


(5,491)

Tangible common equity


$          34,445


$          39,688


$          42,099


$          43,453


$          42,097

Tangible Assets (Period-End)











Total assets


$        440,288


$        434,195


$        432,381


$        425,377


$        423,420

Goodwill and intangible assets(9)


(14,850)


(14,883)


(14,907)


(14,766)


(14,774)

Tangible assets


$        425,438


$        419,312


$        417,474


$        410,611


$        408,646

Tangible Assets (Average)











Total assets


$        435,327


$        430,372


$        427,845


$        424,506


$        424,099

Goodwill and intangible assets(9)


(14,875)


(14,904)


(14,847)


(14,777)


(14,788)

Tangible assets


$        420,452


$        415,468


$        412,998


$        409,729


$        409,311

__________

(1)  

Regulatory capital metrics and capital ratios as of June 30, 2022 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-2022-net-income-of-2-0-billion-or-4-96-per-share-301591311.html

SOURCE Capital One Financial Corporation

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