Capital One Reports Third Quarter 2017 Net Income of $1.1 billion, or $2.14 per share

Excluding adjusting items, Third Quarter 2017 Net Income of $2.42 per share(1)

MCLEAN, Va., Oct. 24, 2017 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2017 of $1.1 billion, or $2.14 per diluted common share, compared with net income of $1.0 billion, or $1.94 per diluted common share in the second quarter of 2017, and with net income of $1.0 billion, or $1.90 per diluted common share in the third quarter of 2016. Excluding adjusting items, net income for the third quarter of 2017 was $2.42 per diluted common share(1).

Capital One

"We posted another quarter of resilient and responsible growth," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We continue to carefully manage risk across our businesses. And, we're driving improving efficiency even as we invest to grow and to transform our company as banking goes digital."

Adjusting items in the third quarter of 2017 included:






Pre-Tax

Diluted EPS

(Dollars in millions, except per share data)

Impact

Impact

Deal-specific impacts of the Cabela's acquisition

$

(105)

$

(0.14)

Restructuring charges

(108)

(0.14)

Notable items in the third quarter of 2017 included:






Pre-Tax

Diluted EPS

(Dollars in millions, except per share data)

Impact

Impact

Impact of hurricanes Harvey and Irma

$

(114)

$

(0.15)

Gains on investment portfolio repositioning

69

0.09

All comparisons below are for the third quarter of 2017 compared with the second quarter of 2017 unless otherwise noted.

Third Quarter 2017 Income Statement Summary:

  • Total net revenue increased 4 percent to $7.0 billion.
  • Total non-interest expense increased 4 percent to $3.6 billion:
    • 7 percent increase in operating expenses.
    • 13 percent decrease in marketing.
  • Pre-provision earnings increased 4 percent to $3.4 billion(2).
  • Provision for credit losses increased 2 percent to $1.8 billion:
    • Net charge-offs of $1.6 billion.
    • $227 million reserve build.
  • Net interest margin of 7.08 percent, up 20 basis points.
  • Efficiency ratio of 51.07 percent:
    • Efficiency ratio excluding adjusting items was 49.28 percent(1).

Third Quarter 2017 Balance Sheet Summary:  

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 10.7 percent at September 30, 2017.
  • Period-end loans held for investment in the quarter increased $8.1 billion, or 3 percent, to $252.4 billion.
    • Domestic Card period-end loans increased $7.1 billion, or 8 percent, to $100.0 billion.
    • Consumer Banking period-end loans increased $591 million, or 1 percent, to $75.6 billion:
      • Auto period-end loans increased $1.5 billion, or 3 percent, to $53.3 billion.
      • Home loans period-end loans decreased $904 million, or 5 percent, to $18.8 billion, driven by run-off of acquired portfolios.
    • Commercial Banking period-end loans decreased $2 million, or less than 1 percent, to $67.7 billion.
  • Average loans held for investment in the quarter increased $3.6 billion, or 1 percent, to $245.8 billion.
    • Domestic Card average loans increased $2.0 billion, or 2 percent, to $93.7 billion.
    • Consumer Banking average loans increased $894 million, or 1 percent, to $75.4 billion:
      • Auto average loans increased $1.8 billion, or 4 percent, to $52.6 billion.
      • Home loans average loans decreased $901 million, or 4 percent, to $19.3 billion, driven by run-off of acquired portfolios.
    • Commercial Banking average loans increased $190 million, or less than 1 percent, to $67.9 billion.
  • Period-end total deposits decreased $701 million, or less than 1 percent, to $239.1 billion, while average deposits decreased $1.7 billion, or 1 percent, to $238.8 billion.
  • Interest-bearing deposits rate paid increased 6 basis points to 0.77 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. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures. 


(2)

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

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on October 24, 2017 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). Choose "About Us," then 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 November 7, 2017 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, 2016.

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 $239.1 billion in deposits and $361.4 billion in total assets as of September 30, 2017. 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)

Third Quarter 2017

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

10

Table 7:

Loan Information and Performance Statistics

11

Table 8:

Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity

13

Business Segment Results

Table 9:

Financial Summary—Business Segment Results

14

Table 10:

Financial & Statistical Summary—Credit Card Business

15

Table 11:

Financial & Statistical Summary—Consumer Banking Business

17

Table 12:

Financial & Statistical Summary—Commercial Banking Business

18

Table 13:

Financial & Statistical Summary—Other and Total

19

Table 14:

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

20

Other

Table 15:

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

21




(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended September 30, 2017 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













2017 Q3 vs

Nine Months Ended September 30,

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

2017

2017

2017

2016

2016

2017

2016




2017 vs

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Income Statement



















Net interest income

$

5,700

$

5,473

$

5,474

$

5,447

$

5,277

4

%

8

%

$

16,647

$

15,426

8

%

Non-interest income

1,285

1,231

1,061

1,119

1,184

4

9

3,577

3,509

2

Total net revenue(1)

6,985

6,704

6,535

6,566

6,461

4

8

20,224

18,935

7

Provision for credit losses

1,833

1,800

1,992

1,752

1,588

2

15

5,625

4,707

20

Non-interest expense:



















Marketing

379

435

396

575

393

(13)

(4)

1,210

1,236

(2)

Amortization of intangibles

61

61

62

101

89

—

(31)

184

285

(35)

Operating expenses

3,127

2,918

2,976

3,003

2,879

7

9

9,021

8,358

8

Total non-interest expense

3,567

3,414

3,434

3,679

3,361

4

6

10,415

9,879

5

Income from continuing operations before income taxes

1,585

1,490

1,109

1,135

1,512

6

5

4,184

4,349

(4)

Income tax provision

448

443

314

342

496

1

(10)

1,205

1,372

(12)

Income from continuing operations, net of tax

1,137

1,047

795

793

1,016

9

12

2,979

2,977

—

Income (loss) from discontinued operations, net of tax(2)

(30)

(11)

15

(2)

(11)

173

173

(26)

(17)

53

Net income

1,107

1,036

810

791

1,005

7

10

2,953

2,960

—

Dividends and undistributed earnings allocated to participating securities(3)

(8)

(8)

(5)

(6)

(6)

—

33

(21)

(18)

17

Preferred stock dividends

(52)

(80)

(53)

(75)

(37)

(35)

41

(185)

(139)

33

Net income available to common stockholders

$

1,047

$

948

$

752

$

710

$

962

10

9

$

2,747

$

2,803

(2)

Common Share Statistics



















Basic earnings per common share:(3)



















Net income from continuing operations

$

2.22

$

1.98

$

1.53

$

1.47

$

1.94

12

%

14

%

$

5.73

$

5.50

4

%

Income (loss) from discontinued operations

(0.06)

(0.02)

0.03

—

(0.02)

200

200

(0.05)

(0.03)

67

Net income per basic common share

$

2.16

$

1.96

$

1.56

$

1.47

$

1.92

10

13

$

5.68

$

5.47

4

Diluted earnings per common share:(3)



















Net income from continuing operations

$

2.20

$

1.96

$

1.51

$

1.45

$

1.92

12

15

$

5.68

$

5.45

4

Income (loss) from discontinued operations

(0.06)

(0.02)

0.03

—

(0.02)

200

200

(0.05)

(0.03)

67

Net income per diluted common share

$

2.14

$

1.94

$

1.54

$

1.45

$

1.90

10

13

$

5.63

$

5.42

4

Weighted-average common shares outstanding (in millions):



















Basic

484.9

484.0

482.3

483.5

501.1

—

(3)

483.7

512.0

(6)

Diluted

489.0

488.1

487.9

489.2

505.9

—

(3)

488.1

516.8

(6)

Common shares outstanding (period-end, in millions)

484.4

483.7

482.8

480.2

489.2

—

(1)

484.4

489.2

(1)

Dividends paid per common share

$

0.40

$

0.40

$

0.40

$

0.40

$

0.40

—

—

$

1.20

$

1.20

—

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

63.06

60.94

58.66

57.76

59.00

3

7

63.06

59.00

7













2017 Q3 vs

Nine Months Ended September 30,

(Dollars in millions)

2017

2017

2017

2016

2016

2017

2016




2017 vs

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Balance Sheet (Period-End)



















Loans held for investment(5)

$

252,422

$

244,302

$

240,588

$

245,586

$

238,019

3

%

6

%

$

252,422

$

238,019

6

%

Interest-earning assets

329,002

319,286

316,712

321,807

313,431

3

5

329,002

313,431

5

Total assets

361,402

350,593

348,549

357,033

345,061

3

5

361,402

345,061

5

Interest-bearing deposits

212,956

213,810

214,818

211,266

200,416

—

6

212,956

200,416

6

Total deposits

239,062

239,763

241,182

236,768

225,981

—

6

239,062

225,981

6

Borrowings

59,458

49,954

48,439

60,460

59,820

19

(1)

59,458

59,820

(1)

Common equity

45,794

44,777

43,680

43,154

44,336

2

3

45,794

44,336

3

Total stockholders' equity

50,154

49,137

48,040

47,514

48,213

2

4

50,154

48,213

4

Balance Sheet (Average Balances)



















Loans held for investment(5)

$

245,822

$

242,241

$

241,505

$

240,027

$

235,843

1

%

4

%

$

243,205

$

231,004

5

%

Interest-earning assets

322,015

318,078

318,358

317,853

310,987

1

4

319,497

304,423

5

Total assets

355,191

349,891

351,641

350,225

343,153

2

4

352,216

336,539

5

Interest-bearing deposits

213,137

214,412

212,973

206,464

196,913

(1)

8

213,508

195,565

9

Total deposits

238,843

240,550

238,550

232,204

222,251

(1)

7

239,316

220,864

8

Borrowings

54,271

48,838

53,357

58,624

60,708

11

(11)

52,159

56,292

(7)

Common equity

45,816

44,645

43,833

43,921

45,314

3

1

44,772

45,578

(2)

Total stockholders' equity

50,176

49,005

48,193

47,972

49,033

2

2

49,132

49,015

—

 

 

               


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated













2017 Q3 vs

Nine Months Ended September 30,

(Dollars in millions, except as noted)

2017

2017

2017

2016

2016

2017

2016




2017 vs

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Performance Metrics



















Net interest income growth (period over period)

4

%

—

—

3

%

4

%

**

**

8

%

11

%

**

Non-interest income growth (period over period)

4

16

%

(5)

%

(5)

2

**

**

2

5

**

Total net revenue growth (period over period)

4

3

—

2

3

**

**

7

10

**

Total net revenue margin(6)

8.68

8.43

8.21

8.26

8.31

25

bps

37

bps

8.44

8.29

15

bps

Net interest margin(7)

7.08

6.88

6.88

6.85

6.79

20

29

6.95

6.76

19

Return on average assets

1.28

1.20

0.90

0.91

1.18

8

10

1.13

1.18

(5)

Return on average tangible assets(8)

1.34

1.25

0.95

0.95

1.24

9

10

1.18

1.24

(6)

Return on average common equity(9)

9.40

8.59

6.73

6.48

8.59

81

81

8.26

8.25

1

Return on average tangible common equity(10)

14.11

13.09

10.37

10.00

13.06

102

105

12.56

12.54

2

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

5.80

5.64

5.69

6.13

5.70

16

10

5.71

5.70

1

Efficiency ratio(11)

51.07

50.92

52.55

56.03

52.02

15

(95)

51.50

52.17

(67)

Effective income tax rate for continuing operations

28.3

29.7

28.3

30.1

32.8

(140)

(450)

28.8

31.5

(270)

Employees (in thousands), period-end

50.4

49.9

48.4

47.3

46.5

1

%

8

%

50.4

46.5

8

%

Credit Quality Metrics



















Allowance for loan and lease losses

$

7,418

$

7,170

$

6,984

$

6,503

$

6,258

3

%

19

%

$

7,418

$

6,258

19

%

Allowance as a percentage of loans held for investment

2.94

%

2.93

%

2.90

%

2.65

%

2.63

%

1

bps

31

bps

2.94

%

2.63

%

31

bps

Net charge-offs

$

1,606

$

1,618

$

1,510

$

1,489

$

1,240

(1)

%

30

%

$

4,734

$

3,573

32

%

Net charge-off rate(12)

2.61

%

2.67

%

2.50

%

2.48

%

2.10

%

(6)

bps

51

bps

2.60

%

2.06

%

54

bps

30+ day performing delinquency rate(13)

2.93

2.69

2.61

2.93

2.71

24

22

2.93

2.71

22

30+ day delinquency rate

3.24

2.99

2.92

3.27

3.04

25

20

3.24

3.04

20

Capital Ratios(14)



















Common equity Tier 1 capital

10.7

%

10.7

%

10.4

%

10.1

%

10.6

%

—

10

bps

10.7

%

10.6

%

10

bps

Tier 1 capital

12.2

12.2

12.0

11.6

12.0

—

20

12.2

12.0

20

Total capital

14.8

14.9

14.7

14.3

14.7

(10)

bps

10

14.8

14.7

10

Tier 1 leverage

10.5

10.3

9.9

9.9

10.1

20

40

10.5

10.1

40

Tangible common equity ("TCE")(15)

8.8

8.8

8.5

8.1

8.8

—

—

8.8

8.8

—

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income













2017 Q3 vs

Nine Months Ended September 30,


2017

2017

2017

2016

2016

2017

2016




2017 vs

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

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Interest income:



















Loans, including loans held for sale

$

5,960

$

5,669

$

5,626

$

5,587

$

5,383

5

%

11

%

$

17,255

$

15,616

10

%

Investment securities

431

433

416

393

386

—

12

1,280

1,206

6

Other

29

26

28

29

25

12

16

83

60

38

Total interest income

6,420

6,128

6,070

6,009

5,794

5

11

18,618

16,882

10

Interest expense:



















Deposits

410

382

353

332

306

7

34

1,145

881

30

Securitized debt obligations

85

82

69

65

56

4

52

236

151

56

Senior and subordinated notes

194

179

149

138

121

8

60

522

338

54

Other borrowings

31

12

25

27

34

158

(9)

68

86

(21)

Total interest expense

720

655

596

562

517

10

39

1,971

1,456

35

Net interest income

5,700

5,473

5,474

5,447

5,277

4

8

16,647

15,426

8

Provision for credit losses

1,833

1,800

1,992

1,752

1,588

2

15

5,625

4,707

20

Net interest income after provision for credit losses

3,867

3,673

3,482

3,695

3,689

5

5

11,022

10,719

3

Non-interest income:(16)(17)



















Service charges and other customer-related fees

414

418

371

412

417

(1)

(1)

1,203

1,233

(2)

Interchange fees, net

662

676

570

624

603

(2)

10

1,908

1,828

4

Net securities gains (losses)

68

(4)

—

(4)

1

**

**

64

(7)

**

Other

141

141

120

87

163

—

(13)

402

455

(12)

Total non-interest income

1,285

1,231

1,061

1,119

1,184

4

9

3,577

3,509

2

Non-interest expense:(16)(17)



















Salaries and associate benefits

1,524

1,383

1,471

1,336

1,317

10

16

4,378

3,866

13

Occupancy and equipment

471

474

471

522

499

(1)

(6)

1,416

1,422

—

Marketing

379

435

396

575

393

(13)

(4)

1,210

1,236

(2)

Professional services

297

279

247

312

257

6

16

823

762

8

Communications and data processing

294

289

288

297

291

2

1

871

873

—

Amortization of intangibles

61

61

62

101

89

—

(31)

184

285

(35)

Other

541

493

499

536

515

10

5

1,533

1,435

7

Total non-interest expense

3,567

3,414

3,434

3,679

3,361

4

6

10,415

9,879

5

Income from continuing operations before income taxes

1,585

1,490

1,109

1,135

1,512

6

5

4,184

4,349

(4)

Income tax provision

448

443

314

342

496

1

(10)

1,205

1,372

(12)

Income from continuing operations, net of tax

1,137

1,047

795

793

1,016

9

12

2,979

2,977

—

Income (loss) from discontinued operations, net of tax(2)

(30)

(11)

15

(2)

(11)

173

173

(26)

(17)

53

Net income

1,107

1,036

810

791

1,005

7

10

2,953

2,960

—

Dividends and undistributed earnings allocated to participating securities(3)

(8)

(8)

(5)

(6)

(6)

—

33

(21)

(18)

17

Preferred stock dividends

(52)

(80)

(53)

(75)

(37)

(35)

41

(185)

(139)

33

Net income available to common stockholders

$

1,047

$

948

$

752

$

710

$

962

10

9

$

2,747

$

2,803

(2)

































2017 Q3 vs

Nine Months Ended September 30,


2017

2017

2017

2016

2016

2017

2016




2017 vs

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

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Basic earnings per common share:(3)



















Net income from continuing operations

$

2.22

$

1.98

$

1.53

$

1.47

$

1.94

12

%

14

%

$

5.73

$

5.50

4

%

Income (loss) from discontinued operations

(0.06)

(0.02)

0.03

—

(0.02)

200

200

(0.05)

(0.03)

67

Net income per basic common share

$

2.16

$

1.96

$

1.56

$

1.47

$

1.92

10

13

$

5.68

$

5.47

4

Diluted earnings per common share:(3)



















Net income from continuing operations

$

2.20

$

1.96

$

1.51

$

1.45

$

1.92

12

15

$

5.68

$

5.45

4

Income (loss) from discontinued operations

(0.06)

(0.02)

0.03

—

(0.02)

200

200

(0.05)

(0.03)

67

Net income per diluted common share

$

2.14

$

1.94

$

1.54

$

1.45

$

1.90

10

13

$

5.63

$

5.42

4

Weighted-average common shares outstanding (in millions):



















Basic common shares

484.9

484.0

482.3

483.5

501.1

—

(3)

483.7

512.0

(6)

Diluted common shares

489.0

488.1

487.9

489.2

505.9

—

(3)

488.1

516.8

(6)

Dividends paid per common share

$

0.40

$

0.40

$

0.40

$

0.40

$

0.40

—

—

$

1.20

$

1.20

—

 

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets














2017 Q3 vs


2017

2017

2017

2016

2016

2017

2016

(Dollars in millions)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

Assets:













Cash and cash equivalents:













Cash and due from banks

$

4,154

$

3,352

$

3,489

$

4,185

$

3,350

24

%

24

%

Interest-bearing deposits and other short-term investments

4,330

3,363

5,826

5,791

5,744

29

(25)

Total cash and cash equivalents

8,484

6,715

9,315

9,976

9,094

26

(7)

Restricted cash for securitization investors

304

300

486

2,517

287

1

6

Securities available for sale, at fair value

39,742

41,120

41,260

40,737

41,511

(3)

(4)

Securities held to maturity, at carrying value

28,650

27,720

26,170

25,712

25,019

3

15

Loans held for investment:(5)













Unsecuritized loans held for investment

217,659

214,864

211,038

213,824

206,763

1

5

Loans held in consolidated trusts

34,763

29,438

29,550

31,762

31,256

18

11

Total loans held for investment

252,422

244,302

240,588

245,586

238,019

3

6

Allowance for loan and lease losses

(7,418)

(7,170)

(6,984)

(6,503)

(6,258)

3

19

Net loans held for investment

245,004

237,132

233,604

239,083

231,761

3

6

Loans held for sale, at lower of cost or fair value

1,566

777

735

1,043

994

102

58

Premises and equipment, net

3,955

3,825

3,727

3,675

3,561

3

11

Interest receivable

1,426

1,346

1,368

1,351

1,251

6

14

Goodwill

14,532

14,524

14,521

14,519

14,493

—

—

Other assets

17,739

17,134

17,363

18,420

17,090

4

4

Total assets

$

361,402

$

350,593

$

348,549

$

357,033

$

345,061

3

5



























2017 Q3 vs


2017

2017

2017

2016

2016

2017

2016

(Dollars in millions)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

Liabilities:













Interest payable

$

301

$

376

$

260

$

327

$

237

(20)

%

27

%

Deposits:













Non-interest-bearing deposits

26,106

25,953

26,364

25,502

25,565

1

2

Interest-bearing deposits

212,956

213,810

214,818

211,266

200,416

—

6

Total deposits

239,062

239,763

241,182

236,768

225,981

—

6

Securitized debt obligations

17,087

18,358

18,528

18,826

18,411

(7)

(7)

Other debt:













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

767

958

1,046

992

1,079

(20)

(29)

Senior and subordinated notes

28,420

28,478

26,405

23,431

24,001

—

18

Other borrowings

13,184

2,160

2,460

17,211

16,329

**

(19)

Total other debt

42,371

31,596

29,911

41,634

41,409

34

2

Other liabilities

12,427

11,363

10,628

11,964

10,810

9

15

Total liabilities

311,248

301,456

300,509

309,519

296,848

3

5















Stockholders' equity:













Preferred stock

0

0

0

0

0

—

—

Common stock

7

7

7

7

7

—

—

Additional paid-in capital, net

31,526

31,413

31,326

31,157

30,439

—

4

Retained earnings

31,946

31,086

30,326

29,766

29,245

3

9

Accumulated other comprehensive income (loss)

(622)

(683)

(934)

(949)

121

(9)

**

Treasury stock, at cost

(12,703)

(12,686)

(12,685)

(12,467)

(11,599)

—

10

Total stockholders' equity

50,154

49,137

48,040

47,514

48,213

2

4

Total liabilities and stockholders' equity

$

361,402

$

350,593

$

348,549

$

357,033

$

345,061

3

5

 

 

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 $356 million in Q3 2017, $313 million in Q2 2017, $321 million in both Q1 2017 and Q4 2016 and $289 million in Q3 2016 for the estimated uncollectible amount of billed finance charges and fees and related losses.

(2)

The provision (benefit) for mortgage representation and warranty losses included the following activity:







2017

2017

2017

2016

2016

(Dollars in millions)

Q3

Q2

Q1

Q4

Q3

Provision (benefit) for mortgage representation and warranty losses before income taxes:










Recorded in continuing operations

$

(1)

$

—

$

(25)

$

—

$

—

Recorded in discontinued operations

13

6

(67)

(2)

18

Total provision (benefit) for mortgage representation and warranty losses before income taxes

$

12

$

6

$

(92)

$

(2)

$

18




The mortgage representation and warranty reserve was $401 million as of September 30, 2017, $521 million as of June 30, 2017, $516 million as of March 31, 2017, $630 million as of December 31, 2016 and $632
million as of September 30, 2016.

(3)

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.

(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)

Included in loans held for investment are purchased credit-impaired loans ("PCI loans") recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3," or Accounting Standards Codification 310-30). These include certain of our consumer and commercial loans that were acquired through business combinations. The table below presents amounts related to PCI loans:







2017

2017

2017

2016

2016

(Dollars in millions)

Q3

Q2

Q1

Q4

Q3

PCI loans:










Period-end unpaid principal balance

$

12,658

$

13,599

$

14,838

$

15,896

$

17,011

Period-end loans held for investment

11,985

12,895

14,102

15,071

16,149

Average loans held for investment

12,270

13,305

14,433

15,443

16,529


(6)

Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.

(7)

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

(8)

Return on average tangible assets is a non-GAAP measure calculated based on annualized income 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.

(9)

Return on average common equity is calculated based on annualized (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.

(10)

Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Our calculation of ROTCE 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.

(11)

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.

(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)

On September 25, 2017, we completed the acquisition from Synovus Bank of the credit card assets and related liabilities of Cabela's wholly-owned subsidiary, World's Foremost Bank, which added approximately $5.7 billion to our loans held for investment portfolio as of the acquisition date ("Cabela's acquisition"). The credit quality metrics as of September 30, 2017 include the impact of this acquisition. Excluding this impact, the 30+ day performing delinquency rate as of September 30, 2017 would have been 2.98%.

(14)

Capital ratios as of the end of Q3 2017 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.

(15)

TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(16)

We made certain Non-interest income and Non-interest expense reclassifications in Q4 2016. The changes were primarily related to a reclassification of certain consumer and commercial banking income from Other to Service charges and other customer-related fees within Non-interest income, and a reclassification of certain system processing costs from Professional services to Communications and data processing within Non-interest expense. We also consolidated the Non-interest income presentation of Other-than-temporary impairment ("OTTI") with net realized gains or losses from investment securities into a new Net securities gains (losses) line. These reclassifications were made to better reflect the nature of income earned and expenses incurred. All prior period amounts presented have been reclassified to conform to the current period presentation.

(17)

The primary net effects of the reclassifications discussed in footnote 16 above for Q3 2016 and the nine months ended September 30, 2016, compared to previously reported results were (i) an increase to Service charges and other customer-related fees of $30 million and $71 million, respectively; (ii) a decrease to Other non-interest income of $31 million and $87 million, respectively; and (iii) increase to Communications and data processing expense of $39 million and $116 million, respectively, with corresponding decreases to Professional services.

**

Not meaningful.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




2017 Q3

2017 Q2

2016 Q3


Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

(Dollars in millions, except as noted)








Interest-earning assets:

















Loans, including loans held for sale

$

247,022

$

5,960

9.65

%

$

242,967

$

5,669

9.33

%

$

237,067

$

5,383

9.08

%

Investment securities

69,302

431

2.49

68,857

433

2.52

66,291

386

2.33

Cash equivalents and other

5,691

29

2.04

6,254

26

1.66

7,629

25

1.31

Total interest-earning assets

$

322,015

$

6,420

7.97

$

318,078

$

6,128

7.71

$

310,987

$

5,794

7.45

Interest-bearing liabilities:

















Interest-bearing deposits

$

213,137

$

410

0.77

$

214,412

$

382

0.71

$

196,913

$

306

0.62

Securitized debt obligations

17,598

85

1.93

18,400

82

1.78

17,389

56

1.29

Senior and subordinated notes

28,753

194

2.70

27,821

179

2.57

22,342

121

2.17

Other borrowings and liabilities

9,320

31

1.33

3,656

12

1.31

21,840

34

0.62

Total interest-bearing liabilities

$

268,808

$

720

1.07

$

264,289

$

655

0.99

$

258,484

$

517

0.80

Net interest income/spread


$

5,700

6.90



$

5,473

6.72



$

5,277

6.65

Impact of non-interest-bearing funding




0.18





0.16





0.14

Net interest margin




7.08

%




6.88

%




6.79

%



Nine Months Ended September 30,


2017

2016


Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

(Dollars in millions, except as noted)





Interest-earning assets:











Loans, including loans held for sale

$

244,097

$

17,255

9.43

%

$

232,064

$

15,616

8.97

%

Investment securities

68,862

1,280

2.48

65,735

1,206

2.45

Cash equivalents and other

6,538

83

1.69

6,624

60

1.21

Total interest-earning assets

$

319,497

$

18,618

7.77

$

304,423

$

16,882

7.39

Interest-bearing liabilities:











Interest-bearing deposits

$

213,508

$

1,145

0.72

$

195,565

$

881

0.60

Securitized debt obligations

17,726

236

1.78

15,997

151

1.26

Senior and subordinated notes

27,140

522

2.56

22,019

338

2.05

Other borrowings and liabilities

8,434

68

1.08

19,099

86

0.60

Total interest-bearing liabilities

$

266,808

$

1,971

0.98

$

252,680

$

1,456

0.77

Net interest income/spread


$

16,647

6.79



$

15,426

6.62

Impact of non-interest-bearing funding




0.16





0.14

Net interest margin




6.95

%




6.76

%

__________

(1)     Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics














2017 Q3 vs

Nine Months Ended September 30,

(Dollars in millions, except as noted)

2017
Q3

2017
Q2

2017
Q1

2016
Q4

2016
Q3

2017
Q2

2016
Q3

2017

2016

2017 vs.
2016

Loans Held For Investment (Period-End)



















Credit card:



















   Domestic credit card

$

99,981

$

92,866

$

91,092

$

97,120

$

90,955

8

%

10

%

$

99,981

$

90,955

10

%

   International card businesses

9,149

8,724

8,121

8,432

8,246

5

11

9,149

8,246

11

Total credit card

109,130

101,590

99,213

105,552

99,201

7

10

109,130

99,201

10

Consumer banking:



















   Auto

53,290

51,765

49,771

47,916

46,311

3

15

53,290

46,311

15

   Home loan

18,820

19,724

20,738

21,584

22,448

(5)

(16)

18,820

22,448

(16)

   Retail banking

3,454

3,484

3,473

3,554

3,526

(1)

(2)

3,454

3,526

(2)

Total consumer banking

75,564

74,973

73,982

73,054

72,285

1

5

75,564

72,285

5

Commercial banking:



















   Commercial and multifamily real estate

27,944

27,428

27,218

26,609

26,507

2

5

27,944

26,507

5

   Commercial and industrial

39,306

39,801

39,638

39,824

39,432

(1)

—

39,306

39,432

—

  Total commercial lending

67,250

67,229

66,856

66,433

65,939

—

2

67,250

65,939

2

   Small-ticket commercial real estate

420

443

464

483

518

(5)

(19)

420

518

(19)

Total commercial banking

67,670

67,672

67,320

66,916

66,457

—

2

67,670

66,457

2

Other loans

58

67

73

64

76

(13)

(24)

58

76

(24)

Total loans held for investment

$

252,422

$

244,302

$

240,588

$

245,586

$

238,019

3

6

$

252,422

$

238,019

6

Loans Held For Investment (Average)



















Credit card:



















   Domestic credit card

$

93,729

$

91,769

$

93,034

$

92,623

$

89,763

2

%

4

%

$

92,847

$

86,974

7

%

   International card businesses

8,816

8,274

8,135

8,168

8,253

7

7

8,411

8,165

3

Total credit card

102,545

100,043

101,169

100,791

98,016

3

5

101,258

95,139

6

Consumer banking:



















   Auto

52,615

50,803

48,673

47,126

45,355

4

16

50,711

43,647

16

   Home loan

19,302

20,203

21,149

21,984

22,852

(4)

(16)

20,211

23,819

(15)

   Retail banking

3,446

3,463

3,509

3,549

3,520

—

(2)

3,473

3,540

(2)

Total consumer banking

75,363

74,469

73,331

72,659

71,727

1

5

74,395

71,006

5

Commercial banking:



















   Commercial and multifamily real estate

27,703

27,401

26,587

26,445

26,154

1

6

27,235

25,612

6

   Commercial and industrial

39,723

39,815

39,877

39,573

39,346

—

1

39,804

38,610

3

  Total commercial lending

67,426

67,216

66,464

66,018

65,500

—

3

67,039

64,222

4

   Small-ticket commercial real estate

433

453

474

497

534

(4)

(19)

453

565

(20)

Total commercial banking

67,859

67,669

66,938

66,515

66,034

—

3

67,492

64,787

4

Other loans

55

60

67

62

66

(8)

(17)

60

72

(17)

Total average loans held for investment

$

245,822

$

242,241

$

241,505

$

240,027

$

235,843

1

4

$

243,205

$

231,004

5


































2017 Q3 vs

Nine Months Ended September 30,


2017
Q3

2017
Q2

2017
Q1

2016
Q4

2016
Q3

2017
Q2

2016
Q3

2017

2016

2017 vs.
2016

Net Charge-Off (Recovery) Rates


























Credit card:


























   Domestic credit card(1)

4.64

%

5.11

%

5.14

%

4.66

%

3.74

%

(47)

bps

90

bps

4.96

%

3.99

%

97

bps

   International card businesses

3.08


4.08


3.69


3.35


3.18

(100)

(10)


3.60


3.32

28

Total credit card(1)

4.51


5.02


5.02


4.56


3.70

(51)

81


4.85


3.93

92

Consumer banking:


























   Auto

1.96


1.70


1.64


2.07


1.85

26

11


1.77


1.55

22

   Home loan

0.02


0.04


0.03


0.08


0.03

(2)

(1)


0.03


0.05

(2)

   Retail banking

2.10


1.71


1.92


1.73


1.75

39

35


1.91


1.46

45

Total consumer banking

1.47


1.25


1.19


1.45


1.26

22

21


1.30


1.04

26

Commercial banking:


























   Commercial and multifamily real estate

(0.01)


0.03


—


(0.02)


0.01

(4)

(2)


0.01


(0.01)

2

   Commercial and industrial

1.64


1.34


0.22


0.80


1.09

30

55


1.07


0.74

33

  Total commercial lending

0.97


0.81


0.13


0.47


0.66

16

31


0.64


0.44

20

   Small-ticket commercial real estate

0.12


(0.22)


1.05


(0.02)


0.74

34

(62)


0.33


0.39

(6)

Total commercial banking

0.96


0.80


0.14


0.47


0.66

16

30


0.64


0.44

20

Total net charge-offs

2.61


2.67


2.50


2.48


2.10

(6)

51


2.60


2.06

54

30+ Day Performing Delinquency Rates


























Credit card:


























   Domestic credit card(1)

3.94

%

3.63

%

3.71

%

3.95

%

3.68

%

31

bps

26

bps

3.94

%

3.68

%

26

bps

   International card businesses

3.54


3.28


3.39


3.36


3.33

26

21


3.54


3.33

21

Total credit card(1)

3.91


3.60


3.68


3.91


3.65

31

26


3.91


3.65

26

Consumer banking:


























   Auto

5.71


5.40


5.03


6.12


5.67

31

4


5.71


5.67

4

   Home loan

0.17


0.14


0.15


0.20


0.19

3

(2)


0.17


0.19

(2)

   Retail banking

0.73


0.54


0.59


0.70


0.59

19

14


0.73


0.59

14

Total consumer banking

4.10


3.79


3.45


4.10


3.72

31

38


4.10


3.72

38

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


























Credit card:


























   International card businesses

0.28

%

0.37

%

0.47

%

0.50

%

0.53

%

(9)

bps

(25)

bps

0.28

%

0.53

%

(25)

bps

Total credit card

0.02


0.03


0.04


0.04


0.04

(1)

(2)


0.02


0.04

(2)

Consumer banking:


























   Auto

0.65


0.53


0.36


0.47


0.43

12

22


0.65


0.43

22

   Home loan

0.84


1.31


1.27


1.26


1.23

(47)

(39)


0.84


1.23

(39)

   Retail banking

0.97


0.96


0.82


0.86


1.05

1

(8)


0.97


1.05

(8)

Total consumer banking

0.71


0.75


0.64


0.72


0.71

(4)

—


0.71


0.71

—

Commercial banking:


























   Commercial and multifamily real estate

0.23


0.13


0.13


0.11


0.08

10

15


0.23


0.08

15

   Commercial and industrial

1.82


1.62


2.02


2.48


2.44

20

(62)


1.82


2.44

(62)

  Total commercial lending

1.16


1.01


1.25


1.53


1.49

15

(33)


1.16


1.49

(33)

   Small-ticket commercial real estate

1.59


1.89


1.65


0.85


2.13

(30)

(54)


1.59


2.13

(54)

Total commercial banking

1.16


1.01


1.25


1.53


1.50

15

(34)


1.16


1.50

(34)

Total nonperforming loans

0.54


0.53


0.57


0.65


0.66

1

(12)


0.54


0.66

(12)

Total nonperforming assets

0.60


0.60


0.66


0.76


0.77

—

(17)


0.60


0.77

(17)

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




Three Months Ended September 30, 2017


Credit Card

Consumer Banking





(Dollars in millions)

Domestic Card

International Card Businesses

Total Credit Card

Auto

Home
Loan

Retail
Banking

Total
Consumer
Banking

Commercial Banking

Other(4)

Total

Allowance for loan and lease losses:



















Balance as of June 30, 2017

$

4,825

$

385

$

5,210

$

1,066

$

59

$

74

$

1,199

$

758

$

3

$

7,170

Charge-offs

(1,351)

(120)

(1,471)

(411)

(2)

(22)

(435)

(168)

(36)

(2,110)

Recoveries

264

52

316

154

1

4

159

5

24

504

Net charge-offs

(1,087)

(68)

(1,155)

(257)

(1)

(18)

(276)

(163)

(12)

(1,606)

Provision for loan and lease losses

1,417

49

1,466

274

3

15

292

75

11

1,844

Allowance build (release) for loan and lease losses

330

(19)

311

17

2

(3)

16

(88)

(1)

238

Other changes(5)

—

13

13

—

(2)

—

(2)

(1)

—

10

Balance as of September 30, 2017

5,155

379

5,534

1,083

59

71

1,213

669

2

7,418

Reserve for unfunded lending commitments:



















Balance as of June 30, 2017

—

—

—

—

—

7

7

132

—

139

Provision (benefit) for losses on unfunded lending commitments

—

—

—

—

—

1

1

(12)

—

(11)

Balance as of September 30, 2017

—

—

—

—

—

8

8

120

—

128

Combined allowance and reserve as of September 30, 2017

$

5,155

$

379

$

5,534

$

1,083

$

59

$

79

$

1,221

$

789

$

2

$

7,546



Nine Months Ended September 30, 2017


Credit Card

Consumer Banking





(Dollars in millions)

Domestic Card

International Card Businesses

Total Credit Card

Auto

Home
Loan

Retail
Banking

Total
Consumer
Banking

Commercial Banking

Other(4)

Total

Allowance for loan and lease losses:



















Balance as of December 31, 2016

$

4,229

$

377

$

4,606

$

957

$

65

$

80

$

1,102

$

793

$

2

$

6,503

Charge-offs

(4,289)

(355)

(4,644)

(1,119)

(9)

(61)

(1,189)

(334)

(36)

(6,203)

Recoveries

834

128

962

448

4

11

463

12

32

1,469

Net charge-offs

(3,455)

(227)

(3,682)

(671)

(5)

(50)

(726)

(322)

(4)

(4,734)

Provision for loan and lease losses

4,381

199

4,580

797

1

41

839

210

4

5,633

Allowance build (release) for loan and lease losses

926

(28)

898

126

(4)

(9)

113

(112)

—

899

Other changes(5)

—

30

30

—

(2)

—

(2)

(12)

—

16

Balance as of September 30, 2017

5,155

379

5,534

1,083

59

71

1,213

669

2

7,418

Reserve for unfunded lending commitments:



















Balance as of December 31, 2016

—

—

—

—

—

7

7

129

—

136

Provision (benefit) for losses on unfunded lending commitments

—

—

—

—

—

1

1

(9)

—

(8)

Balance as of September 30, 2017

—

—

—

—

—

8

8

120

—

128

Combined allowance and reserve as of September 30, 2017

$

5,155

$

379

$

5,534

$

1,083

$

59

$

79

$

1,221

$

789

$

2

$

7,546

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results




Three Months Ended September 30, 2017

Nine Months Ended September 30, 2017

(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking

Other

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Total

Net interest income

$

3,440

$

1,649

$

560

$

51

$

5,700

$

10,080

$

4,744

$

1,695

$

128

$

16,647

Non-interest income

865

192

179

49

1,285

2,478

570

520

9

3,577

Total net revenue(6)

4,305

1,841

739

100

6,985

12,558

5,314

2,215

137

20,224

Provision for credit losses

1,466

293

63

11

1,833

4,580

840

201

4

5,625

Non-interest expense

1,961

1,051

394

161

3,567

5,808

3,152

1,166

289

10,415

Income (loss) from continuing operations before income taxes

878

497

282

(72)

1,585

2,170

1,322

848

(156)

4,184

Income tax provision (benefit)

306

181

103

(142)

448

774

482

310

(361)

1,205

Income from continuing operations, net of tax

$

572

$

316

$

179

$

70

$

1,137

$

1,396

$

840

$

538

$

205

$

2,979























Three Months Ended June 30, 2017









(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking

Other

Total









Net interest income

$

3,294

$

1,578

$

569

$

32

$

5,473










Non-interest income

875

183

183

(10)

1,231










Total net revenue(6)

4,169

1,761

752

22

6,704










Provision (benefit) for credit losses

1,397

268

140

(5)

1,800










Non-interest expense

1,918

1,059

381

56

3,414










Income (loss) from continuing operations before income taxes

854

434

231

(29)

1,490










Income tax provision (benefit)

301

158

85

(101)

443










Income from continuing operations, net of tax

$

553

$

276

$

146

$

72

$

1,047

































Three Months Ended September 30, 2016

Nine Months Ended September 30, 2016

(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking

Other

Total

Credit Card

Consumer Banking

Commercial Banking

Other

Total

Net interest income

$

3,204

$

1,472

$

555

$

46

$

5,277

$

9,282

$

4,331

$

1,651

$

162

$

15,426

Non-interest income

825

201

156

2

1,184

2,531

567

403

8

3,509

Total net revenue(6)

4,029

1,673

711

48

6,461

11,813

4,898

2,054

170

18,935

Provision (benefit) for credit losses

1,272

256

61

(1)

1,588

3,604

690

417

(4)

4,707

Non-interest expense

1,884

1,034

349

94

3,361

5,630

3,030

1,014

205

9,879

Income (loss) from continuing operations before income taxes

873

383

301

(45)

1,512

2,579

1,178

623

(31)

4,349

Income tax provision (benefit)

318

139

110

(71)

496

931

428

227

(214)

1,372

Income from continuing operations, net of tax

$

555

$

244

$

191

$

26

$

1,016

$

1,648

$

750

$

396

$

183

$

2,977





















 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business













2017 Q3 vs

Nine Months Ended September 30,


2017

2017

2017

2016

2016

2017

2016




2017 vs

(Dollars in millions, except as noted)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Credit Card



















Earnings:



















Net interest income

$

3,440

$

3,294

$

3,346

$

3,353

$

3,204

4

%

7

%

$

10,080

$

9,282

9

%

Non-interest income

865

875

738

849

825

(1)

5

2,478

2,531

(2)

Total net revenue

4,305

4,169

4,084

4,202

4,029

3

7

12,558

11,813

6

Provision for credit losses

1,466

1,397

1,717

1,322

1,272

5

15

4,580

3,604

27

Non-interest expense

1,961

1,918

1,929

2,073

1,884

2

4

5,808

5,630

3

Income from continuing operations before income taxes

878

854

438

807

873

3

1

2,170

2,579

(16)

Income tax provision

306

301

167

295

318

2

(4)

774

931

(17)

Income from continuing operations, net of tax

$

572

$

553

$

271

$

512

$

555

3

3

$

1,396

$

1,648

(15)

Selected performance metrics:



















Period-end loans held for investment

$

109,130

$

101,590

$

99,213

$

105,552

$

99,201

7

10

$

109,130

$

99,201

10

Average loans held for investment

102,545

100,043

101,169

100,791

98,016

3

5

101,258

95,139

6

Average yield on loans held for investment(7)

15.58

%

15.14

%

14.99

%

14.93

%

14.68

%

44

bps

90

bps

15.24

%

14.59

%

65

bps

Total net revenue margin(8)

16.79

16.67

16.14

16.68

16.44

12

35

16.54

16.56

(2)

Net charge-off rate(1)

4.51

5.02

5.02

4.56

3.70

(51)

81

4.85

3.93

92

30+ day performing delinquency rate(1)

3.91

3.60

3.68

3.91

3.65

31

26

3.91

3.65

26

30+ day delinquency rate

3.92

3.62

3.71

3.94

3.69

30

23

3.92

3.69

23

Nonperforming loan rate(2)

0.02

0.03

0.04

0.04

0.04

(1)

(2)

0.02

0.04

(2)

PCCR intangible amortization

$

43

$

44

$

44

$

58

$

62

(2)

%

(31)

%

$

131

$

199

(34)

%

Purchase volume(9)

84,505

83,079

73,197

82,824

78,106

2

8

240,781

224,314

7

































2017 Q3 vs

Nine Months Ended September 30,


2017

2017

2017

2016

2016

2017

2016




2017 vs

(Dollars in millions, except as noted)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Domestic Card



















Earnings:



















Net interest income

$

3,132

$

3,011

$

3,093

$

3,090

$

2,956

4

%

6

%

$

9,236

$

8,481

9

%

Non-interest income

787

802

699

791

759

(2)

4

2,288

2,325

(2)

Total net revenue

3,919

3,813

3,792

3,881

3,715

3

5

11,524

10,806

7

Provision for credit losses

1,417

1,327

1,637

1,229

1,190

7

19

4,381

3,326

32

Non-interest expense

1,754

1,727

1,717

1,859

1,696

2

3

5,198

5,036

3

Income from continuing operations before income taxes

748

759

438

793

829

(1)

(10)

1,945

2,444

(20)

Income tax provision

273

277

160

288

302

(1)

(10)

710

890

(20)

Income from continuing operations, net of tax

$

475

$

482

$

278

$

505

$

527

(1)

(10)

$

1,235

$

1,554

(21)

Selected performance metrics:



















Period-end loans held for investment

$

99,981

$

92,866

$

91,092

$

97,120

$

90,955

8

10

$

99,981

$

90,955

10

Average loans held for investment

93,729

91,769

93,034

92,623

89,763

2

4

92,847

86,974

7

Average yield on loans held for investment(7)

15.51

%

15.07

%

15.01

%

14.91

%

14.71

%

44

bps

80

bps

15.20

%

14.51

%

69

bps

Total net revenue margin(8)

16.72

16.62

16.30

16.76

16.55

10

17

16.55

16.57

(2)

Net charge-off rate(1)

4.64

5.11

5.14

4.66

3.74

(47)

90

4.96

3.99

97

30+ day delinquency rate

3.94

3.63

3.71

3.95

3.68

31

26

3.94

3.68

26

Purchase volume(9)

$

76,806

$

75,781

$

66,950

$

75,639

$

71,331

1

%

8

%

$

219,537

$

204,998

7

%

Refreshed FICO scores:(10)



















Greater than 660

65

%

64

%

63

%

64

%

64

%

1

1

65

%

64

%

1

660 or below

35

36

37

36

36

(1)

(1)

35

36

(1)

Total

100

%

100

%

100

%

100

%

100

%




100

%

100

%






















 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business














2017 Q3 vs

Nine Months Ended September 30,


2017

2017

2017

2016

2016

2017

2016




2017 vs

(Dollars in millions, except as noted)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Consumer Banking



















Earnings:



















Net interest income

$

1,649

$

1,578

$

1,517

$

1,498

$

1,472

4

%

12

%

$

4,744

$

4,331

10

%

Non-interest income

192

183

195

166

201

5

(4)

570

567

1

Total net revenue

1,841

1,761

1,712

1,664

1,673

5

10

5,314

4,898

8

Provision for credit losses

293

268

279

365

256

9

14

840

690

22

Non-interest expense

1,051

1,059

1,042

1,109

1,034

(1)

2

3,152

3,030

4

Income from continuing operations before income taxes

497

434

391

190

383

15

30

1,322

1,178

12

Income tax provision

181

158

143

70

139

15

30

482

428

13

Income from continuing operations, net of tax

$

316

$

276

$

248

$

120

$

244

14

30

$

840

$

750

12

Selected performance metrics:



















Period-end loans held for investment

$

75,564

$

74,973

$

73,982

$

73,054

$

72,285

1

5

$

75,564

$

72,285

5

Average loans held for investment

75,363

74,469

73,331

72,659

71,727

1

5

74,395

71,006

5

Average yield on loans held for investment(7)

6.79

%

6.56

%

6.48

%

6.50

%

6.41

%

23

bps

38

bps

6.61

%

6.29

%

32

bps

Auto loan originations

$

7,043

$

7,453

$

7,025

$

6,542

$

6,804

(6)

%

4

%

$

21,521

$

19,177

12

%

Period-end deposits

184,719

186,607

188,216

181,917

178,793

(1)

3

184,719

178,793

3

Average deposits

185,072

186,989

183,936

180,019

177,402

(1)

4

185,336

176,159

5

Average deposits interest rate

0.62

%

0.59

%

0.57

%

0.57

%

0.56

%

3

bps

6

bps

0.60

%

0.55

%

5

bps

Net charge-off rate

1.47

1.25

1.19

1.45

1.26

22

21

1.30

1.04

26

30+ day performing delinquency rate

4.10

3.79

3.45

4.10

3.72

31

38

4.10

3.72

38

30+ day delinquency rate

4.61

4.33

3.93

4.67

4.26

28

35

4.61

4.26

35

Nonperforming loan rate(2)

0.71

0.75

0.64

0.72

0.71

(4)

—

0.71

0.71

—

Nonperforming asset rate(3)

0.88

0.96

0.92

1.09

0.98

(8)

(10)

0.88

0.98

(10)

Auto—At origination FICO scores:(11)



















Greater than 660

51

%

51

%

51

%

52

%

51

%

—

—

51

%

51

%

—

621 - 660

18

18

18

17

17

—

1

%

18

17

1

%

620 or below

31

31

31

31

32

—

(1)

31

32

(1)

Total

100

%

100

%

100

%

100

%

100

%




100

%

100

%


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business













2017 Q3 vs

Nine Months Ended September 30,


2017

2017

2017

2016

2016

2017

2016




2017 vs

(Dollars in millions, except as noted)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Commercial Banking



















Earnings:



















Net interest income

$

560

$

569

$

566

$

565

$

555

(2)%

1

%

$

1,695

$

1,651

3

%

Non-interest income

179

183

158

175

156

(2)

15

520

403

29

Total net revenue(6)

739

752

724

740

711

(2)

4

2,215

2,054

8

Provision (benefit) for credit losses

63

140

(2)

66

61

(55)

3

201

417

(52)

Non-interest expense

394

381

391

393

349

3

13

1,166

1,014

15

Income from continuing operations before income taxes

282

231

335

281

301

22

(6)

848

623

36

Income tax provision

103

85

122

102

110

21

(6)

310

227

37

Income from continuing operations, net of tax

$

179

$

146

$

213

$

179

$

191

23

(6)

$

538

$

396

36

Selected performance metrics:



















Period-end loans held for investment

$

67,670

$

67,672

$

67,320

$

66,916

$

66,457

—

2

$

67,670

$

66,457

2

Average loans held for investment

67,859

67,669

66,938

66,515

66,034

—

3

67,492

64,787

4

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

3.98

%

3.81

%

3.65

%

3.55

%

3.50

%

17

bps

48

bps

3.81

%

3.45

%

36

bps

Period-end deposits

$

32,783

$

33,153

$

33,735

$

33,866

$

33,611

(1)

%

(2)

%

$

32,783

$

33,611

(2)

%

Average deposits

33,197

34,263

34,219

34,029

33,498

(3)

(1)

33,890

33,778

—

Average deposits interest rate

0.42

%

0.36

%

0.31

%

0.30

%

0.30

%

6

bps

12

bps

0.37

%

0.28

%

9

bps

Net charge-off rate

0.96

0.80

0.14

0.47

0.66

16

30

0.64

0.44

20

Nonperforming loan rate(2)

1.16

1.01

1.25

1.53

1.50

15

(34)

1.16

1.50

(34)

Nonperforming asset rate(3)

1.22

1.04

1.27

1.54

1.51

18

(29)

1.22

1.51

(29)

Risk category:(12)



















Noncriticized

$

63,501

$

63,802

$

63,390

$

62,828

$

62,336

—

2

%

$

63,501

$

62,336

2

%

Criticized performing

2,878

2,660

2,492

2,453

2,473

8

%

16

2,878

2,473

16

Criticized nonperforming

788

686

844

1,022

994

15

(21)

788

994

(21)

PCI loans

503

524

594

613

654

(4)

(23)

503

654

(23)

Total commercial loans

$

67,670

$

67,672

$

67,320

$

66,916

$

66,457

—

2

$

67,670

$

66,457

2

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



















Noncriticized

93.8

%

94.3

%

94.2

%

93.9

%

93.8

%

(50)

bps

—

93.8

%

93.8

%

—

Criticized performing

4.3

3.9

3.7

3.7

3.7

40

60

bps

4.3

3.7

60

bps

Criticized nonperforming

1.2

1.0

1.2

1.5

1.5

20

(30)

1.2

1.5

(30)

PCI loans

0.7

0.8

0.9

0.9

1.0

(10)

(30)

0.7

1.0

(30)

Total commercial 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














2017 Q3 vs

Nine Months Ended September 30,


2017

2017

2017

2016

2016

2017

2016




2017 vs

(Dollars in millions)

Q3

Q2

Q1

Q4

Q3

Q2

Q3

2017

2016

2016

Other



















Earnings:



















Net interest income

$

51

$

32

$

45

$

31

$

46

59

%

11

%

$

128

$

162

(21)

%

Non-interest income

49

(10)

(30)

(71)

2

**

**

9

8

13

Total net revenue (loss)(6)

100

22

15

(40)

48

**

108

137

170

(19)

Provision (benefit) for credit losses

11

(5)

(2)

(1)

(1)

**

**

4

(4)

**

Non-interest expense(13)

161

56

72

104

94

188

71

289

205

41

Loss from continuing operations before income taxes

(72)

(29)

(55)

(143)

(45)

148

60

(156)

(31)

**

Income tax benefit

(142)

(101)

(118)

(125)

(71)

41

100

(361)

(214)

69

Income (loss) from continuing operations, net of tax

$

70

$

72

$

63

$

(18)

$

26

(3)

169

$

205

$

183

12

Selected performance metrics:



















Period-end loans held for investment

$

58

$

67

$

73

$

64

$

76

(13)

(24)

$

58

$

76

(24)

Average loans held for investment

55

60

67

62

66

(8)

(17)

60

72

(17)

Period-end deposits

21,560

20,003

19,231

20,985

13,577

8

59

21,560

13,577

59

Average deposits

20,574

19,298

20,395

18,156

11,351

7

81

20,090

10,927

84

Total



















Earnings:



















Net interest income

$

5,700

$

5,473

$

5,474

$

5,447

$

5,277

4

%

8

%

$

16,647

$

15,426

8

%

Non-interest income

1,285

1,231

1,061

1,119

1,184

4

9

3,577

3,509

2

Total net revenue

6,985

6,704

6,535

6,566

6,461

4

8

20,224

18,935

7

Provision for credit losses

1,833

1,800

1,992

1,752

1,588

2

15

5,625

4,707

20

Non-interest expense

3,567

3,414

3,434

3,679

3,361

4

6

10,415

9,879

5

Income from continuing operations before income taxes

1,585

1,490

1,109

1,135

1,512

6

5

4,184

4,349

(4)

Income tax provision

448

443

314

342

496

1

(10)

1,205

1,372

(12)

Income from continuing operations, net of tax

$

1,137

$

1,047

$

795

$

793

$

1,016

9

12

$

2,979

$

2,977

—

Selected performance metrics:



















Period-end loans held for investment

$

252,422

$

244,302

$

240,588

$

245,586

$

238,019

3

6

$

252,422

$

238,019

6

Average loans held for investment

245,822

242,241

241,505

240,027

235,843

1

4

243,205

231,004

5

Period-end deposits

239,062

239,763

241,182

236,768

225,981

—

6

239,062

225,981

6

Average deposits

238,843

240,550

238,550

232,204

222,251

(1)

7

239,316

220,864

8

 

 


 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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


(1)

On September 25, 2017, we completed the Cabela's acquisition. The total credit card and domestic credit card metrics as of and for the three and nine months ended September 30, 2017 include the impact of this acquisition. Excluding this impact (i) the total credit card and domestic credit card net charge-off rate for the three months ended September 30, 2017 would have been 4.52% and 4.66%, respectively; (ii) the total credit card and domestic credit card net charge-off rate for the nine months ended September 30, 2017 would have been 4.85% and 4.97%, respectively; and (iii) the total credit card and domestic credit card 30+ day performing delinquency rate as of September 30, 2017 would have been 4.10% and 4.15%, respectively.

(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.

(3)

Nonperforming assets consist of nonperforming loans, real estate owned ("REO") 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, REO and other foreclosed assets. Prior to Q4 2016, the nonperforming asset rate for our Consumer Banking business excluded the impact of REOs related to our acquired home loan portfolio which, if included, would increase the nonperforming asset rate by approximately 10 basis points in each of the prior periods presented.

(4)

Primarily consists of the legacy loan portfolio of our discontinued GreenPoint mortgage operations.

(5)

Represents foreign currency translation adjustments and the net impact of loan transfers and sales.

(6)

Some of our tax-related commercial investments generate tax-exempt income or tax credits. Accordingly, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35% with offsetting reclassifications to the Other category.

(7)

Average yield on loans held for investment is calculated based on annualized interest income for the period divided by average loans held for investment during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and does not include any allocations, such as funds transfer pricing.

(8)

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

(9)

Includes purchase transactions, net of returns, for the period for loans both classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.

(10)

Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.

(11)

Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.

(12)

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

(13)

Includes charges incurred as a result of restructuring activities.

**

Not meaningful.

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

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



Basel III Standardized Approach

(Dollars in millions, except as noted)

September 30,
2017

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

Regulatory Capital Metrics









Common equity excluding AOCI

$

46,415

$

45,459

$

44,614

$

44,103

$

44,214

Adjustments:









AOCI(2)(3)

(538)

(593)

(807)

(674)

199

Goodwill, net of related deferred tax liabilities

(14,300)

(14,299)

(14,302)

(14,307)

(14,288)

Intangible assets, net of related deferred tax liabilities(3)

(372)

(419)

(465)

(384)

(435)

Other

93

78

121

65

(498)

Common equity Tier 1 capital

$

31,298

$

30,226

$

29,161

$

28,803

$

29,192

Tier 1 capital

$

35,657

$

34,585

$

33,519

$

33,162

$

33,069

Total capital(4)

43,272

42,101

40,979

40,817

40,564

Risk-weighted assets

292,041

283,231

279,302

285,756

275,198

Adjusted average assets(5)

340,579

335,248

336,990

335,835

328,627

Capital Ratios









Common equity Tier 1 capital(6)

10.7

%

10.7

%

10.4

%

10.1

%

10.6

%

Tier 1 capital(7)

12.2

12.2

12.0

11.6

12.0

Total capital(8)

14.8

14.9

14.7

14.3

14.7

Tier 1 leverage(5)

10.5

10.3

9.9

9.9

10.1

Tangible common equity ("TCE")(9)

8.8

8.8

8.5

8.1

8.8

Reconciliation of Non-GAAP Measures

We report certain non-GAAP measures that management uses in assessing its capital adequacy and the level of return generated. The following non-GAAP measures consist of selected adjusted results, tangible common equity ("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 key financial performance measures. 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.



2017

2017

2017

Nine Months Ended


Q3

Q2

Q1

September 30, 2017

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

Reported Results

Adj.(10)

Adjusted Results

Reported Results

Adj.(10)

Adjusted Results

Reported Results

Adj.(10)

Adjusted Results

Reported Results

Adj.(10)

Adjusted Results

Selected income statement data:























Net interest income

$

5,700

—

$

5,700

$

5,473

—

$

5,473

$

5,474

$

33

$

5,507

$

16,647

$

33

$

16,680

Non-interest income

1,285

—

1,285

1,231

—

1,231

1,061

37

1,098

3,577

37

3,614

Total net revenue

6,985

—

6,985

6,704

—

6,704

6,535

70

6,605

20,224

70

20,294

Provision for credit losses

1,833

$

(88)

1,745

1,800

—

1,800

1,992

—

1,992

5,625

(88)

5,537

Non-interest expense

3,567

(125)

3,442

3,414

$

(12)

3,402

3,434

(29)

3,405

10,415

(166)

10,249

Income from continuing operations before income taxes

1,585

213

1,798

1,490

12

1,502

1,109

99

1,208

4,184

324

4,508

Income tax provision (benefit)

448

79

527

443

4

447

314

(1)

313

1,205

82

1,287

Income from continuing operations, net of tax

1,137

134

1,271

1,047

8

1,055

795

100

895

2,979

242

3,221

Income (loss) from discontinued operations, net of tax

(30)

—

(30)

(11)

—

(11)

15

—

15

(26)

—

(26)

Net income

1,107

134

1,241

1,036

8

1,044

810

100

910

2,953

242

3,195

Net income available to common stockholders

1,047

134

1,181

948

8

956

752

100

852

2,747

242

2,989

Selected performance metrics:























Diluted EPS(11)

$

2.14

$

0.28

$

2.42

$

1.94

$

0.02

$

1.96

$

1.54

$

0.21

$

1.75

$

5.63

$

0.49

$

6.12

Efficiency ratio

51.07

%

(179)

bps

49.28

%

50.92

%

(17)

bps

50.75

%

52.55

%

(100)

bps

51.55

%

51.50

%

(100)

bps

50.50

%



2016

2016

Year Ended


Q4

Q3

December 31, 2016

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

Reported Results

Adj.(10)

Adjusted Results

Reported Results

Adj.(10)

Adjusted Results

Reported Results

Adj.(10)

Adjusted Results

Selected income statement data:

















Net interest income

$

5,447

$

13

$

5,460

$

5,277

$

34

$

5,311

$

20,873

$

54

$

20,927

Non-interest income

1,119

14

1,133

1,184

13

1,197

4,628

35

4,663

Total net revenue

6,566

27

6,593

6,461

47

6,508

25,501

89

25,590

Provision for credit losses

1,752

—

1,752

1,588

—

1,588

6,459

—

6,459

Non-interest expense

3,679

(45)

3,634

3,361

(16)

3,345

13,558

(76)

13,482

Income from continuing operations before income taxes

1,135

72

1,207

1,512

63

1,575

5,484

165

5,649

Income tax provision (benefit)

342

10

352

496

—

496

1,714

3

1,717

Income from continuing operations, net of tax

793

62

855

1,016

63

1,079

3,770

162

3,932

Income (loss) from discontinued operations, net of tax

(2)

—

(2)

(11)

—

(11)

(19)

—

(19)

Net income

791

62

853

1,005

63

1,068

3,751

162

3,913

Net income available to common stockholders

710

62

772

962

63

1,025

3,513

162

3,675

Selected performance metrics:

















Diluted EPS(11)

$

1.45

$

0.13

$

1.58

$

1.90

$

0.13

$

2.03

$

6.89

$

0.32

$

7.21

Efficiency ratio

56.03

%

(91)

bps

55.12

%

52.02

%

(62)

bps

51.40

%

53.17

%

(49)

bps

52.68

%



2017

2017

2017

2016

2016

(Dollars in millions)

Q3

Q2

Q1

Q4

Q3

Tangible Common Equity (Period-End)









Stockholders' equity

$

50,154

$

49,137

$

48,040

$

47,514

$

48,213

Goodwill and intangible assets(12)

(15,249)

(15,301)

(15,360)

(15,420)

(15,475)

Noncumulative perpetual preferred stock

(4,360)

(4,360)

(4,360)

(4,360)

(3,877)

Tangible common equity

$

30,545

$

29,476

$

28,320

$

27,734

$

28,861

Tangible Common Equity (Average)









Stockholders' equity

$

50,176

$

49,005

$

48,193

$

47,972

$

49,033

Goodwill and intangible assets(12)

(15,277)

(15,336)

(15,395)

(15,455)

(15,507)

Noncumulative perpetual preferred stock

(4,360)

(4,360)

(4,360)

(4,051)

(3,719)

Tangible common equity

$

30,539

$

29,309

$

28,438

$

28,466

$

29,807

Tangible Assets (Period-End)









Total assets

$

361,402

$

350,593

$

348,549

$

357,033

$

345,061

Goodwill and intangible assets(12)

(15,249)

(15,301)

(15,360)

(15,420)

(15,475)

Tangible assets

$

346,153

$

335,292

$

333,189

$

341,613

$

329,586

Tangible Assets (Average)









Total assets

$

355,191

$

349,891

$

351,641

$

350,225

$

343,153

Goodwill and intangible assets(12)

(15,277)

(15,336)

(15,395)

(15,455)

(15,507)

Tangible assets

$

339,914

$

334,555

$

336,246

$

334,770

$

327,646

__________

(1)

Regulatory capital metrics and capital ratios as of September 30, 2017 are preliminary and therefore subject to change.

(2)

Amounts presented are net of tax.

(3)

Amounts based on transition provisions for regulatory capital deductions and adjustments of 60% for 2016 and 80% for 2017.

(4)

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

(5)

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.

(6)

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

(7)

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

(8)

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

(9)

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

(10)

On September 25, 2017, we completed the Cabela's acquisition. The primary Q3 2017 impacts of this acquisition were charges of $105 million which consisted of an initial quarterly allowance build related to the loans acquired and costs associated with closing the acquisition. In Q3 2017, we also incurred charges of $108 million as a result of restructuring activities. These restructuring activities primarily consisted of severance and related benefits pursuant to our ongoing benefit programs which were the result of exiting certain business locations and activities as well as the realignment of resources supporting our Credit Card and Consumer Banking businesses. In Q2 2017, we incurred $12 million of costs related to our anticipated close of the Cabela's acquisition. In Q1 2017, we recorded a build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve") of $99 million. In Q4 2016, we recorded charges totaling $72 million consisting of a build in the U.K. PPI Reserve of $44 million and an impairment associated with certain acquired intangible and software assets of $28 million. In Q3 2016, we recorded a build in the U.K. PPI Reserve of $63 million.

(11)

Earnings per share is computed independently for each period. Accordingly, the sum of each quarter amount may not agree to the year-to-date total.

(12)

Includes impact of related deferred taxes.

 

 

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SOURCE Capital One Financial Corporation

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