Capital One Reports Fourth Quarter 2020 Net Income of $2.6 billion, or $5.35 per share

Rhea-AI Summary

Capital One Financial Corporation (NYSE: COF) reported a net income of $2.6 billion for Q4 2020, up from $2.4 billion in Q3 2020 and $1.2 billion in Q4 2019. Earnings per diluted share increased to $5.35 from $5.06 QoQ and $2.25 YoY. Total net revenue decreased 1% to $7.3 billion, while total non-interest expense rose 13% to $4.0 billion. The Board approved a $7.5 billion stock repurchase program. Despite challenges, Capital One's strategic positioning remains strong amidst ongoing digital transformation.

Positive

• Net income increased to $2.6 billion, up from $2.4 billion QoQ.
• Earnings per diluted share rose to $5.35, compared to $5.06 in Q3 2020.
• Authorized a common stock repurchase program of $7.5 billion.

Negative

• Total net revenue decreased by 1% to $7.3 billion.
• Total non-interest expense increased by 13% to $4.0 billion.
• Pre-provision earnings decreased by 13% to $3.3 billion.

MCLEAN, Va., Jan. 26, 2021 /PRNewswire/ --  Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2020 of $2.6 billion, or $5.35 per diluted common share, compared with net income of $2.4 billion, or $5.06 per diluted common share in the third quarter of 2020, and with net income of $1.2 billion, or $2.25 per diluted common share in the fourth quarter of 2019. Excluding adjusting items, net income for the fourth quarter of 2020 was $5.29 per diluted common share⁽¹⁾. In addition, Capital One's Board of Directors has authorized a common stock repurchase program of up to $7.5 billion.

"Our long-standing strategic choices put us in a strong position to respond to both the near-term challenges and the emerging opportunities as the pandemic plays out," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "Despite the pressures of the pandemic in the near-term, nothing has changed about where we think our businesses are headed, or the long-term strategic opportunities that are being created as sweeping digital change continues to transform banking."

Adjusting items in the fourth quarter of 2020, which are excluded from diluted earnings per share (EPS), efficiency ratio and operating efficiency ratio metrics (see Table 15 in our Financial Supplement for additional information):

(Dollars in millions, except per share data)	Pre-Tax Impact			Diluted EPS Impact
Legal reserve activity, including insurance recoveries	$	37		$	0.07
Cybersecurity Incident expenses, net of insurance	(6)			(0.01)
The quarter included the following notable item:
(Dollars in millions, except per share data)	Pre-Tax Impact			Diluted EPS Impact
Equity investment gain	$	60		$	0.10

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

Fourth Quarter 2020 Income Statement Summary:

• Total net revenue decreased 1 percent to $7.3 billion.
• Total non-interest expense increased 13 percent to $4.0 billion:
• 99 percent increase in marketing.
• 6 percent increase in operating expenses.
• Pre-provision earnings decreased 13 percent to $3.3 billion⁽²⁾.
• Provision for credit losses decreased 20 percent to $264 million:
• Net charge-offs of $856 million.
• $593 million loan reserve release.
• Net interest margin of 6.05 percent, an increase of 37 basis points.
• Efficiency ratio of 54.64 percent.
• Efficiency ratio excluding adjusting items of 55.06 percent⁽¹⁾.
• Operating efficiency ratio of 46.97 percent.
• Operating efficiency ratio excluding adjusting items of 47.39 percent⁽¹⁾.

Fourth Quarter 2020 Balance Sheet Summary:

• Common equity Tier 1 capital ratio under Basel III Standardized Approach of 13.7 percent at December 31, 2020.
• Period-end loans held for investment in the quarter increased $3.4 billion, or 1 percent, to $251.6 billion.
• Credit Card period-end loans increased $3.3 billion, or 3 percent, to $107.0 billion.
• Domestic Card period-end loans increased $3.0 billion, or 3 percent, to $98.5 billion.
• Consumer Banking period-end loans increased $200 million, or less than 1 percent, to $68.9 billion.
• Auto period-end loans increased $368 million, or 1 percent, to $65.8 billion.
• Commercial Banking period-end loans decreased $114 million, or less than 1 percent, to $75.8 billion.
• Average loans held for investment in the quarter decreased $1.8 billion, or 1 percent, to $247.7 billion.
• Credit Card average loans decreased $1.8 billion, or 2 percent, to $103.6 billion.
• Domestic Card average loans decreased $1.9 billion, or 2 percent, to $95.5 billion.
• Consumer Banking average loans increased $986 million, or 1 percent, to $68.8 billion.
• Auto average loans increased $1.1 billion, or 2 percent, to $65.6 billion.
• Commercial Banking average loans decreased $1.0 billion, or 1 percent, to $75.3 billion.
• Period-end total deposits decreased $283 million, or less than 1 percent, to $305.4 billion, while average deposits decreased $1.0 billion, or less than 1 percent, to $304.5 billion.
• Interest-bearing deposits rate paid decreased 18 basis points to 0.51 percent.

All comparisons below are for the full year of 2020 compared with the full year of 2019 unless otherwise noted.

 2020 Full Year Income Statement Summary:

• Total net revenue decreased less than 1% to $28.5 billion.
• Total non-interest expense decreased 3 percent to $15.1 billion:
• 29 percent decrease in marketing.
• 2 percent increase in operating expenses.
• Pre-provision earnings increased 3 percent to $13.5 billion⁽²⁾.
• Provision for credit losses increased 65 percent to $10.3 billion:
• Efficiency ratio of 52.79 percent.
• Efficiency ratio excluding adjusting items of 51.66 percent⁽¹⁾.
• Operating efficiency ratio of 47.14 percent.
• Operating efficiency ratio excluding adjusting items of 46.01 percent⁽¹⁾.

(1)

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

(2)

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

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 26, 2021 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through February 9, 2021 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2019.

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 $305.4 billion in deposits and $421.6 billion in total assets as of  December 31, 2020. 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)
Fourth Quarter 2020
Table of Contents
Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	7
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	10
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	11
	Table 7:	Loan Information and Performance Statistics	12
	Table 8:	Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity	15
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	17
	Table 10:	Financial & Statistical Summary—Credit Card Business	18
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	20
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	21
	Table 13:	Financial & Statistical Summary—Other and Total	22
Other
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	23
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	24
__________
(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 Annual Report on Form 10-K for the period ended December 31, 2020 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
																						2020 Q4 vs.						Year Ended December 31,
(Dollars in millions, except per share data and as noted)		2020				2020				2020				2020				2019				2020			2019											2020 vs.
		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Income Statement
Net interest income		$	5,873			$	5,555			$	5,460			$	6,025			$	6,066			6	%		(3)	%		$	22,913			$	23,340			(2)	%
Non-interest income		1,464				1,826				1,096				1,224				1,361				(20)			8			5,610				5,253				7
Total net revenue(1)		7,337				7,381				6,556				7,249				7,427				(1)			(1)			28,523				28,593				—
Provision for credit losses		264				331				4,246				5,423				1,818				(20)			(85)			10,264				6,236				65
Non-interest expense:
Marketing		563				283				273				491				710				99			(21)			1,610				2,274				(29)
Operating expense		3,446				3,265				3,497				3,238				3,451				6			—			13,446				13,209				2
Total non-interest expense		4,009				3,548				3,770				3,729				4,161				13			(4)			15,056				15,483				(3)
Income (loss) from continuing operations before income taxes		3,064				3,502				(1,460)				(1,903)				1,448				(13)			112			3,203				6,874				(53)
Income tax provision (benefit)		496				1,096				(543)				(563)				270				(55)			84			486				1,341				(64)
Income (loss) from continuing operations, net of tax		2,568				2,406				(917)				(1,340)				1,178				7			118			2,717				5,533				(51)
Income (loss) from discontinued operations, net of tax		(2)				—				(1)				—				(2)				**			—			(3)				13				**
Net income (loss)		2,566				2,406				(918)				(1,340)				1,176				7			118			2,714				5,546				(51)
Dividends and undistributed earnings allocated to participating securities(2)		(19)				(20)				(1)				(3)				(7)				(5)			171			(20)				(41)				(51)
Preferred stock dividends		(68)				(67)				(90)				(55)				(97)				1			(30)			(280)				(282)				(1)
Issuance cost for redeemed preferred stock(3)		(17)				—				—				(22)				(31)				**			(45)			(39)				(31)				26
Net income (loss) available to common stockholders		$	2,462			$	2,319			$	(1,009)			$	(1,420)			$	1,041			6			137			$	2,375			$	5,192			(54)
Common Share Statistics
Basic earnings per common share:(2)
Net income (loss) from continuing operations		$	5.36			$	5.07			$	(2.21)			$	(3.10)			$	2.26			6	%		137	%		$	5.20			$	11.07			(53)	%
Income (loss) from discontinued operations		—				—				—				—				—				—			—			(0.01)				0.03				**
Net income (loss) per basic common share		$	5.36			$	5.07			$	(2.21)			$	(3.10)			$	2.26			6			137			$	5.19			$	11.10			(53)
Diluted earnings per common share:(2)
Net income (loss) from continuing operations		$	5.35			$	5.06			$	(2.21)			$	(3.10)			$	2.25			6			138			$	5.19			$	11.02			(53)
Income (loss) from discontinued operations		—				—				—				—				—				—			—			(0.01)				0.03				**
Net income (loss) per diluted common share		$	5.35			$	5.06			$	(2.21)			$	(3.10)			$	2.25			6			138			$	5.18			$	11.05			(53)
Weighted-average common shares outstanding (in millions):
Basic		459.1				457.8				456.7				457.6				460.9				—			—			457.8				467.6				(2)
Diluted		460.2				458.5				456.7				457.6				463.4				—			(1)			458.9				469.9				(2)
Common shares outstanding (period-end, in millions)		459.0				457.4				456.3				455.3				456.6				—			1			459.0				456.6				1
Dividends declared and paid per common share		$	0.10			$	0.10			$	0.40			$	0.40			$	0.40			—			(75)			$	1.00			$	1.60			(38)
Tangible book value per common share (period-end)(4)		88.34				83.67				78.82				80.68				83.72				6			6			88.34				83.72				6
																						2020 Q4 vs.						Year Ended December 31,
(Dollars in millions)		2020				2020				2020				2020				2019				2020			2019											2020 vs.
		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Balance Sheet (Period-End)
Loans held for investment		$	251,624			$	248,223			$	251,512			$	262,990			$	265,809			1	%		(5)	%		$	251,624			$	265,809			(5)	%
Interest-earning assets		388,917				390,040				389,829				364,472				355,202				—			9			388,917				355,202				9
Total assets		421,602				421,883				421,296				396,878				390,365				—			8			421,602				390,365				8
Interest-bearing deposits		274,300				276,092				275,183				245,142				239,209				(1)			15			274,300				239,209				15
Total deposits		305,442				305,725				304,238				269,689				262,697				—			16			305,442				262,697				16
Borrowings		40,539				42,795				44,900				55,681				55,697				(5)			(27)			40,539				55,697				(27)
Common equity		55,356				53,093				50,835				51,620				53,157				4			4			55,356				53,157				4
Total stockholders' equity		60,204				58,424				56,045				56,830				58,011				3			4			60,204				58,011				4
Balance Sheet (Average Balances)
Loans held for investment		$	247,689			$	249,511			$	253,358			$	262,889			$	258,870			(1)	%		(4)	%		$	253,335			$	247,450			2	%
Interest-earning assets		388,252				391,451				378,145				355,347				349,150				(1)			11			378,362				341,510				11
Total assets		420,011				422,854				411,075				390,380				383,162				(1)			10			411,187				374,924				10
Interest-bearing deposits		274,142				276,339				261,256				241,115				236,250				(1)			16			263,279				231,609				14
Total deposits		304,513				305,516				288,344				264,653				260,040				—			17			290,835				255,065				14
Borrowings		40,662				44,161				49,827				51,795				51,442				(8)			(21)			46,588				50,965				(9)
Common equity		54,220				51,995				52,413				53,186				52,641				4			3			52,954				50,960				4
Total stockholders' equity		59,389				57,223				57,623				58,568				58,148				4			2			58,201				55,690				5

 

               

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated
																						2020 Q4 vs.						Year Ended December 31,
(Dollars in millions, except as noted)		2020				2020				2020				2020				2019				2020			2019											2020 vs.
		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Performance Metrics
Net interest income growth (period over period)		6		%		2		%		(9)		%		(1)		%		6		%		**			**			(2)		%		2		%		**
Non-interest income growth (period over period)		(20)				67				(10)				(10)				11				**			**			7				1				**
Total net revenue growth (period over period)		(1)				13				(10)				(2)				7				**			**			—				2				**
Total net revenue margin(5)		7.56				7.54				6.93				8.16				8.51				2	bps		(95)	bps		7.54				8.37				(83)	bps
Net interest margin(6)		6.05				5.68				5.78				6.78				6.95				37			(90)			6.06				6.83				(77)
Return on average assets		2.45				2.28				(0.89)				(1.37)				1.23				17			122			0.66				1.48				(82)
Return on average tangible assets(7)		2.54				2.36				(0.93)				(1.43)				1.28				18			126			0.69				1.54				(85)
Return on average common equity(8)		18.18				17.84				(7.69)				(10.68)				7.93				34			10	%		4.49				10.16				(6)	%
Return on average tangible common equity(9)		25.02				24.98				(10.74)				(14.85)				11.07				4			14			6.24				14.37				(8)
Non-interest expense as a percentage of average loans held for investment		6.47				5.69				5.95				5.67				6.43				78			4	bps		5.94				6.26				(32)	bps
Efficiency ratio(10)		54.64				48.07				57.50				51.44				56.03				7	%		(139)			52.79				54.15				(136)
Operating efficiency ratio(11)		46.97				44.24				53.34				44.67				46.47				273	bps		50			47.14				46.20				94
Effective income tax rate for continuing operations		16.2				31.3				37.2				29.6				18.6				(15)	%		(240)			15.2				19.5				(4)	%
Employees (period-end, in thousands)		52.0				52.5				53.1				52.1				51.9				(1)			—			52.0				51.9				—
Credit Quality Metrics
Allowance for credit losses		$	15,564			$	16,129			$	16,832			$	14,073			$	7,208			(4)	%		116	%		$	15,564			$	7,208			116	%
Allowance coverage ratio		6.19		%		6.50		%		6.69		%		5.35		%		2.71		%		(31)	bps		348	bps		6.19		%		2.71		%		348	bps
Net charge-offs		$	856			$	1,073			$	1,505			$	1,791			$	1,683			(20)	%		(49)	%		$	5,225			$	6,252			(16)	%
Net charge-off rate(12)		1.38		%		1.72		%		2.38		%		2.72		%		2.60		%		(34)	bps		(122)	bps		2.06		%		2.53		%		(47)	bps
30+ day performing delinquency rate(13)		2.41				1.97				2.09				2.95				3.51				44			(110)			2.41				3.51				(110)
30+ day delinquency rate(13)		2.61				2.22				2.30				3.16				3.74				39			(113)			2.61				3.74				(113)
Capital Ratios(14)
Common equity Tier 1 capital		13.7		%		13.0		%		12.4		%		12.0		%		12.2		%		70	bps		150	bps		13.7		%		12.2		%		150	bps
Tier 1 capital		15.3				14.8				14.2				13.7				13.7				50			160			15.3				13.7				160
Total capital		17.7				17.3				16.7				16.1				16.1				40			160			17.7				16.1				160
Tier 1 leverage		11.2				10.6				10.3				11.0				11.7				60			(50)			11.2				11.7				(50)
Tangible common equity ("TCE")(15)		10.0				9.4				8.8				9.6				10.2				60			(20)			10.0				10.2				(20)

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
																						2020 Q4 vs.						Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019											2020 vs.
(Dollars in millions, except per share data and as noted)		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Interest income:
Loans, including loans held for sale		$	5,954			$	5,758			$	5,820			$	6,542			$	6,682			3	%		(11)	%		$	24,074			$	25,862			(7)	%
Investment securities		422				443				482				530				544				(5)			(22)			1,877				2,411				(22)
Other		15				14				16				37				44				7			(66)			82				240				(66)
Total interest income		6,391				6,215				6,318				7,109				7,270				3			(12)			26,033				28,513				(9)
Interest expense:
Deposits		347				476				611				731				832				(27)			(58)			2,165				3,420				(37)
Securitized debt obligations		34				43				56				99				118				(21)			(71)			232				523				(56)
Senior and subordinated notes		128				132				180				239				236				(3)			(46)			679				1,159				(41)
Other borrowings		9				9				11				15				18				—			(50)			44				71				(38)
Total interest expense		518				660				858				1,084				1,204				(22)			(57)			3,120				5,173				(40)
Net interest income		5,873				5,555				5,460				6,025				6,066				6			(3)			22,913				23,340				(2)
Provision for credit losses		264				331				4,246				5,423				1,818				(20)			(85)			10,264				6,236				65
Net interest income after provision for credit losses		5,609				5,224				1,214				602				4,248				7			32			12,649				17,104				(26)
Non-interest income:
Interchange fees, net		818				775				672				752				811				6			1			3,017				3,179				(5)
Service charges and other customer-related fees		338				320				258				327				342				6			(1)			1,243				1,330				(7)
Net securities gains (losses)		—				25				—				—				(18)				**			**			25				26				(4)
Other		308				706				166				145				226				(56)			36			1,325				718				85
Total non-interest income		1,464				1,826				1,096				1,224				1,361				(20)			8			5,610				5,253				7
Non-interest expense:
Salaries and associate benefits		1,755				1,719				1,704				1,627				1,652				2			6			6,805				6,388				7
Occupancy and equipment		572				506				523				517				565				13			1			2,118				2,098				1
Marketing		563				283				273				491				710				99			(21)			1,610				2,274				(29)
Professional services		394				327				304				287				318				20			24			1,312				1,237				6
Communications and data processing		295				310				308				302				346				(5)			(15)			1,215				1,290				(6)
Amortization of intangibles		8				14				16				22				28				(43)			(71)			60				112				(46)
Other(16)		422				389				642				483				542				8			(22)			1,936				2,084				(7)
Total non-interest expense		4,009				3,548				3,770				3,729				4,161				13			(4)			15,056				15,483				(3)
Income (loss) from continuing operations before income taxes		3,064				3,502				(1,460)				(1,903)				1,448				(13)			112			3,203				6,874				(53)
Income tax provision (benefit)		496				1,096				(543)				(563)				270				(55)			84			486				1,341				(64)
Income (loss) from continuing operations, net of tax		2,568				2,406				(917)				(1,340)				1,178				7			118			2,717				5,533				(51)
Income (loss) from discontinued operations, net of tax		(2)				—				(1)				—				(2)				**			—			(3)				13				**
Net income (loss)		2,566				2,406				(918)				(1,340)				1,176				7			118			2,714				5,546				(51)
Dividends and undistributed earnings allocated to participating securities(2)		(19)				(20)				(1)				(3)				(7)				(5)			171			(20)				(41)				(51)
Preferred stock dividends		(68)				(67)				(90)				(55)				(97)				1			(30)			(280)				(282)				(1)
Issuance cost for redeemed preferred stock(3)		(17)				—				—				(22)				(31)				**			(45)			(39)				(31)				26
Net income (loss) available to common stockholders		$	2,462			$	2,319			$	(1,009)			$	(1,420)			$	1,041			6			137			$	2,375			$	5,192			(54)
																						2020 Q4 vs.						Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019											2020 vs.
(Dollars in millions, except per share data and as noted)		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Basic earnings per common share:(2)
Net income (loss) from continuing operations		$	5.36			$	5.07			$	(2.21)			$	(3.10)			$	2.26			6	%		137	%		$	5.20			$	11.07			(53)	%
Income (loss) from discontinued operations		—				—				—				—				—				—			—			(0.01)				0.03				**
Net income (loss) per basic common share		$	5.36			$	5.07			$	(2.21)			$	(3.10)			$	2.26			6			137			$	5.19			$	11.10			(53)
Diluted earnings per common share:(2)
Net income (loss) from continuing operations		$	5.35			$	5.06			$	(2.21)			$	(3.10)			$	2.25			6			138			$	5.19			$	11.02			(53)
Income (loss) from discontinued operations		—				—				—				—				—				—			—			(0.01)				0.03				**
Net income (loss) per diluted common share		$	5.35			$	5.06			$	(2.21)			$	(3.10)			$	2.25			6			138			$	5.18			$	11.05			(53)
Weighted-average common shares outstanding (in millions):
Basic common shares		459.1				457.8				456.7				457.6				460.9				—			—			457.8				467.6				(2)
Diluted common shares		460.2				458.5				456.7				457.6				463.4				—			(1)			458.9				469.9				(2)

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets
																						2020 Q4 vs.
		2020				2020				2020				2020				2019				2020			2019
(Dollars in millions)		Q4				Q3				Q2				Q1				Q4				Q3			Q4
Assets:
Cash and cash equivalents:
Cash and due from banks		$	4,708			$	4,267			$	4,583			$	4,545			$	4,129			10	%		14	%
Interest-bearing deposits and other short-term investments		35,801				39,839				51,235				20,391				9,278				(10)			**
Total cash and cash equivalents		40,509				44,106				55,818				24,936				13,407				(8)			**
Restricted cash for securitization investors		262				895				740				364				342				(71)			(23)
Securities available for sale		100,445				99,853				87,859				81,423				79,213				1			27
Loans held for investment:
Unsecuritized loans held for investment		225,698				217,878				222,310				231,318				231,992				4			(3)
Loans held in consolidated trusts		25,926				30,345				29,202				31,672				33,817				(15)			(23)
Total loans held for investment		251,624				248,223				251,512				262,990				265,809				1			(5)
Allowance for credit losses		(15,564)				(16,129)				(16,832)				(14,073)				(7,208)				(4)			116
Net loans held for investment		236,060				232,094				234,680				248,917				258,601				2			(9)
Loans held for sale		2,710				3,433				711				1,056				400				(21)			**
Premises and equipment, net		4,287				4,333				4,324				4,336				4,378				(1)			(2)
Interest receivable		1,471				1,551				1,574				1,687				1,758				(5)			(16)
Goodwill		14,653				14,648				14,645				14,645				14,653				—			—
Other assets		21,205				20,970				20,945				19,514				17,613				1			20
Total assets		$	421,602			$	421,883			$	421,296			$	396,878			$	390,365			—			8
																						2020 Q4 vs.
		2020				2020				2020				2020				2019				2020			2019
(Dollars in millions)		Q4				Q3				Q2				Q1				Q4				Q3			Q4
Liabilities:
Interest payable		$	352			$	332			$	380			$	359			$	439			6	%		(20)	%
Deposits:
Non-interest-bearing deposits		31,142				29,633				29,055				24,547				23,488				5			33
Interest-bearing deposits		274,300				276,092				275,183				245,142				239,209				(1)			15
Total deposits		305,442				305,725				304,238				269,689				262,697				—			16
Securitized debt obligations		12,414				13,566				15,761				17,141				17,808				(8)			(30)
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase		668				702				573				399				314				(5)			113
Senior and subordinated notes		27,382				28,448				28,481				32,049				30,472				(4)			(10)
Other borrowings		75				79				85				6,092				7,103				(5)			(99)
Total other debt		28,125				29,229				29,139				38,540				37,889				(4)			(26)
Other liabilities		15,065				14,607				15,733				14,319				13,521				3			11
Total liabilities		361,398				363,459				365,251				340,048				332,354				(1)			9
Stockholders' equity:
Preferred stock		0				0				0				0				0				—			—
Common stock		7				7				7				7				7				—			—
Additional paid-in capital, net		33,480				33,793				33,556				33,450				32,980				(1)			2
Retained earnings		40,088				37,653				35,361				36,552				40,340				6			(1)
Accumulated other comprehensive income		3,494				3,833				3,981				3,679				1,156				(9)			**
Treasury stock, at cost		(16,865)				(16,862)				(16,860)				(16,858)				(16,472)				—			2
Total stockholders' equity		60,204				58,424				56,045				56,830				58,011				3			4
Total liabilities and stockholders' equity		$	421,602			$	421,883			$	421,296			$	396,878			$	390,365			—			8

 

 

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 $177 million in Q4 2020, $235 million in Q3 2020, $318 million in Q2 2020 and $389 million in Q1 2020 for credit card finance charges and fees charged-off as uncollectible, and by $365 million in Q4 2019 for the estimated uncollectible amount of credit card finance charges and fees and related losses.
(2)	Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(3)	On December 1, 2020, we redeemed all outstanding shares of our fixed rate 6.20% non-cumulative perpetual preferred stock Series F, which reduced our net income available to common shareholders by $17 million in Q4 2020. On March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B, which increased our net loss available to common shareholders by $22 million in Q1 2020. On December 2, 2019, we redeemed all outstanding shares of our fixed rate 6.25% non-cumulative perpetual preferred stock Series C and fixed rate 6.70% non-cumulative perpetual preferred stock Series D, which reduced our net income available to common shareholders by $31 million in Q4 2019.
(4)	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(5)	Total net revenue margin is calculated based on total net revenue for the period divided by average interest-earning assets for the period.
(6)	Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(7)	Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(8)	Return on average common equity is calculated based on net income (loss) available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.
(9)	Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on net income (loss) available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity ("TCE"). Our calculation of return on average TCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(10)	Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(11)	Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(12)	Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(13)	Metrics for Q4 2020, Q3 2020, Q2 2020 and Q1 2020 include the impact of COVID-19 customer assistance programs where applicable.
(14)	Capital ratios as of the end of Q4 2020 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)	Includes net Cybersecurity Incident expenses of $6 million in Q4 2020, $6 million in Q3 2020, $11 million in Q2 2020, $4 million in Q1 2020 and $16 million in Q4 2019, respectively.
**	Not meaningful.

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
		2020 Q4											2020 Q3											2019 Q4
		Average Balance				Interest Income/ Expense				Yield/Rate			Average Balance				Interest Income/ Expense				Yield/Rate			Average Balance				Interest Income/ Expense				Yield/Rate
(Dollars in millions, except as noted)
Interest-earning assets:
Loans, including loans held for sale		$	251,135			$	5,954			9.48	%		$	250,525			$	5,758			9.19	%		$	259,855			$	6,682			10.29	%
Investment securities		97,640				422				1.73			91,777				443				1.93			79,104				544				2.75
Cash equivalents and other		39,477				15				0.15			49,149				14				0.11			10,191				44				1.70
Total interest-earning assets		$	388,252			$	6,391			6.58			$	391,451			$	6,215			6.35			$	349,150			$	7,270			8.33
Interest-bearing liabilities:
Interest-bearing deposits		$	274,143			$	347			0.51			$	276,339			$	476			0.69			$	236,250			$	832			1.41
Securitized debt obligations		12,651				34				1.08			15,032				43				1.14			18,339				118				2.58
Senior and subordinated notes		27,386				128				1.87			28,497				132				1.86			30,597				236				3.08
Other borrowings and liabilities		2,095				9				1.75			2,119				9				1.77			3,789				18				1.95
Total interest-bearing liabilities		$	316,275			$	518			0.65			$	321,987			$	660			0.82			$	288,975			$	1,204			1.67
Net interest income/spread						$	5,873			5.93							$	5,555			5.53							$	6,066			6.66
Impact of non-interest-bearing funding										0.12											0.15											0.29
Net interest margin										6.05	%										5.68	%										6.95	%
													Year Ended December 31,
													2020											2019
													Average Balance				Interest Income/ Expense				Yield/Rate			Average Balance				Interest Income/ Expense				Yield/Rate
(Dollars in millions, except as noted)
Interest-earning assets:
Loans, including loans held for sale													$	254,901			$	24,074			9.44	%		$	248,552			$	25,862			10.41	%
Investment securities													87,222				1,877				2.15			81,467				2,411				2.96
Cash equivalents and other													36,239				82				0.23			11,491				240				2.08
Total interest-earning assets													$	378,362			$	26,033			6.88			$	341,510			$	28,513			8.35
Interest-bearing liabilities:
Interest-bearing deposits													$	263,279			$	2,165			0.82			$	231,609			$	3,420			1.48
Securitized debt obligations													15,533				232				1.49			18,020				523				2.90
Senior and subordinated notes													29,621				679				2.29			30,821				1,159				3.76
Other borrowings and liabilities													2,882				44				1.55			3,369				71				2.12
Total interest-bearing liabilities													$	311,315			$	3,120			1.00			$	283,819			$	5,173			1.82
Net interest income/spread																	$	22,913			5.88							$	23,340			6.53
Impact of non-interest-bearing funding																					0.18											0.30
Net interest margin																					6.06	%										6.83	%

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics
																						2020 Q4 vs.						Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019			2020				2019				2020 vs. 2019
(Dollars in millions, except as noted)		Q4				Q3				Q2				Q1				Q4				Q3			Q4
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card(7)		$	98,504			$	95,541			$	99,390			$	109,549			$	118,606			3	%		(17)	%		$	98,504			$	118,606			(17)	%
International card businesses		8,452				8,100				7,920				8,248				9,630				4			(12)			8,452				9,630				(12)
Total credit card(1)		106,956				103,641				107,310				117,797				128,236				3			(17)			106,956				128,236				(17)
Consumer banking:
Auto		65,762				65,394				63,319				61,364				60,362				1			9			65,762				60,362				9
Retail banking		3,126				3,294				3,393				2,669				2,703				(5)			16			3,126				2,703				16
Total consumer banking		68,888				68,688				66,712				64,033				63,065				—			9			68,888				63,065				9
Commercial banking:
Commercial and multifamily real estate		30,681				31,197				30,953				32,373				30,245				(2)			1			30,681				30,245				1
Commercial and industrial		45,099				44,697				46,537				48,787				44,263				1			2			45,099				44,263				2
Total commercial banking		75,780				75,894				77,490				81,160				74,508				—			2			75,780				74,508				2
Total loans held for investment		$	251,624			$	248,223			$	251,512			$	262,990			$	265,809			1			(5)			$	251,624			$	265,809			(5)
Loans Held for Investment (Average)
Credit card:
Domestic credit card		$	95,453			$	97,306			$	100,996			$	113,711			$	112,965			(2)	%		(16)	%		$	101,837			$	105,270			(3)	%
International card businesses		8,108				8,061				7,752				9,065				9,120				1			(11)			8,245				8,932				(8)
Total credit card(1)		103,561				105,367				108,748				122,776				122,085				(2)			(15)			110,082				114,202				(4)
Consumer banking:
Auto		65,590				64,476				61,798				61,005				59,884				2			10			63,227				57,938				9
Retail banking		3,218				3,346				3,053				2,666				2,712				(4)			19			3,072				2,770				11
Total consumer banking		68,808				67,822				64,851				63,671				62,596				1			10			66,299				60,708				9
Commercial banking:
Commercial and multifamily real estate		30,825				30,918				31,723				31,081				30,173				—			2			31,135				29,608				5
Commercial and industrial		44,495				45,404				48,036				45,361				44,016				(2)			1			45,819				42,863				7
Total commercial lending		75,320				76,322				79,759				76,442				74,189				(1)			2			76,954				72,471				6
Small-ticket commercial real estate		—				—				—				—				—				**			**			—				69				**
Total commercial banking		75,320				76,322				79,759				76,442				74,189				(1)			2			76,954				72,540				6
Total average loans held for investment		$	247,689			$	249,511			$	253,358			$	262,889			$	258,870			(1)			(4)			$	253,335			$	247,450			2
																						2020 Q4 vs.							Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019			2020				2019				2020 vs. 2019
		Q4				Q3				Q2				Q1				Q4				Q3			Q4
Net Charge-Off Rates
Credit card:
Domestic credit card			2.69	%			3.64	%			4.53	%			4.68	%			4.32	%		(95)	bps		(163)	bps			3.93	%			4.58	%		(65)	bps
International card businesses			1.86				2.89				3.47				4.65				4.22			(103)			(236)				3.26				3.71			(45)
Total credit card			2.63				3.58				4.46				4.68				4.31			(95)			(168)				3.88				4.51			(63)
Consumer banking:
Auto			0.47				0.23				1.16				1.51				1.90			24			(143)				0.83				1.51			(68)
Retail banking			1.88				1.38				1.78				2.37				2.77			50			(89)				1.82				2.57			(75)
Total consumer banking			0.53				0.28				1.19				1.54				1.93			25			(140)				0.87				1.56			(69)
Commercial banking:
Commercial and multifamily real estate			0.02				0.41				0.09				—				—			(39)			2				0.13				—			13
Commercial and industrial			0.74				0.45				0.78				0.96				0.60			29			14				0.73				0.36			37
Total commercial banking			0.45				0.43				0.51				0.57				0.35			2			10				0.49				0.22			27
Total net charge-offs			1.38				1.72				2.38				2.72				2.60			(34)			(122)				2.06				2.53			(47)
30+ Day Performing Delinquency Rates(2)
Credit card:
Domestic credit card			2.42	%			2.21	%			2.74	%			3.69	%			3.93	%		21	bps		(151)	bps			2.42	%			3.93	%		(151)	bps
International card businesses			2.61				2.15				2.71				3.66				3.47			46			(86)				2.61				3.47			(86)
Total credit card			2.44				2.20				2.74				3.69				3.89			24			(145)				2.44				3.89			(145)
Consumer banking:
Auto			4.78				3.76				3.28				5.29				6.88			102			(210)				4.78				6.88			(210)
Retail banking			1.32				0.83				0.89				1.27				1.02			49			30				1.32				1.02			30
Total consumer banking			4.62				3.62				3.16				5.12				6.63			100			(201)				4.62				6.63			(201)
Nonperforming Loans and Nonperforming Assets Rates(3)(4)
Credit card:
International card businesses			0.24	%			0.25	%			0.29	%			0.29	%			0.26	%		(1)	bps		(2)	bps			0.24	%			0.26	%		(2)	bps
Total credit card			0.02				0.02				0.02				0.02				0.02			—			—				0.02				0.02			—
Consumer banking:
Auto			0.45				0.36				0.41				0.62				0.81			9			(36)				0.45				0.81			(36)
Retail banking			0.96				0.77				0.70				0.88				0.87			19			9				0.96				0.87			9
Total consumer banking			0.47				0.38				0.43				0.63				0.81			9			(34)				0.47				0.81			(34)
Commercial banking:
Commercial and multifamily real estate			0.65				0.58				0.54				0.22				0.12			7			53				0.65				0.12			53
Commercial and industrial			1.00				1.31				1.06				0.87				0.93			(31)			7				1.00				0.93			7
Total commercial banking			0.86				1.01				0.85				0.61				0.60			(15)			26				0.86				0.60			26
Total nonperforming loans			0.40				0.42				0.38				0.35				0.37			(2)			3				0.40				0.37			3
Total nonperforming assets			0.41				0.44				0.39				0.37				0.39			(3)			2				0.41				0.39			2

 

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
		Three Months Ended December 31, 2020
		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 September 30, 2020		$	11,062			$	550			$	11,612			$	2,647			$	100			$	2,747			$	1,770			$	16,129
Charge-offs		(912)				(80)				(992)				(309)				(18)				(327)				(91)				(1,410)
Recoveries		269				43				312				232				3				235				7				554
Net charge-offs		(643)				(37)				(680)				(77)				(15)				(92)				(84)				(856)
Provision (benefit) for credit losses		231				—				231				45				15				60				(28)				263
Allowance release for credit losses		(412)				(37)				(449)				(32)				—				(32)				(112)				(593)
Other changes(5)		—				28				28				—				—				—				—				28
Balance as of December 31, 2020		10,650				541				11,191				2,615				100				2,715				1,658				15,564
Reserve for unfunded lending commitments:
Balance as of September 30, 2020		—				—				—				—				—				—				195				195
Provision for losses on unfunded lending commitments		—				—				—				—				—				—				—				—
Balance as of December 31, 2020		—				—				—				—				—				—				195				195
Combined allowance and reserve as of December 31, 2020		$	10,650			$	541			$	11,191			$	2,615			$	100			$	2,715			$	1,853			$	15,759
		Year Ended December 31, 2020
		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, 2019		$	4,997			$	398			$	5,395			$	984			$	54			$	1,038			$	775			$	7,208
Cumulative effects from adoption of the current expected credit loss ("CECL") standard		2,237				4				2,241				477				25				502				102				2,845
Finance charge and fee reserve reclassification(1)		439				23				462				—				—				—				—				462
Balance as of January 1, 2020		7,673				425				8,098				1,461				79				1,540				877				10,515
Charge-offs		(5,318)				(431)				(5,749)				(1,464)				(70)				(1,534)				(394)				(7,677)
Recoveries		1,316				163				1,479				942				14				956				17				2,452
Net charge-offs		(4,002)				(268)				(4,270)				(522)				(56)				(578)				(377)				(5,225)
Provision for credit losses		6,979				348				7,327				1,676				77				1,753				1,158				10,238
Allowance build for credit losses		2,977				80				3,057				1,154				21				1,175				781				5,013
Other changes(5)		—				36				36				—				—				—				—				36
Balance as of December 31, 2020		10,650				541				11,191				2,615				100				2,715				1,658				15,564
Reserve for unfunded lending commitments:
Balance as of December 31, 2019		—				—				—				—				5				5				130				135
Cumulative effects from adoption of the CECL standard		—				—				—				—				(5)				(5)				42				37
Balance as of January 1, 2020		—				—				—				—				—				—				172				172
Provision for losses on unfunded lending commitments		—				—				—				—				—				—				23				23
Balance as of December 31, 2020		—				—				—				—				—				—				195				195
Combined allowance and reserve as of December 31, 2020		$	10,650			$	541			$	11,191			$	2,615			$	100			$	2,715			$	1,853			$	15,759

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial Summary—Business Segment Results
		Three Months Ended December 31, 2020																				Year Ended December 31, 2020
(Dollars in millions)		Credit Card				Consumer Banking				Commercial Banking(6)				Other(6)				Total				Credit Card				Consumer Banking				Commercial Banking(6)				Other(6)				Total
Net interest income (loss)		$	3,413			$	2,012			$	522			$	(74)			$	5,873			$	13,776			$	7,238			$	2,048			$	(149)			$	22,913
Non-interest income		1,054				136				268				6				1,464				3,823				466				923				398				5,610
Total net revenue (loss)		4,467				2,148				790				(68)				7,337				17,599				7,704				2,971				249				28,523
Provision (benefit) for credit losses		231				60				(28)				1				264				7,327				1,753				1,181				3				10,264
Non-interest expense		2,311				1,121				445				132				4,009				8,491				4,159				1,706				700				15,056
Income (loss) from continuing operations before income taxes		1,925				967				373				(201)				3,064				1,781				1,792				84				(454)				3,203
Income tax provision (benefit)		454				230				88				(276)				496				420				425				19				(378)				486
Income (loss) from continuing operations, net of tax		$	1,471			$	737			$	285			$	75			$	2,568			$	1,361			$	1,367			$	65			$	(76)			$	2,717
		Three Months Ended September 30, 2020
(Dollars in millions)		Credit Card				Consumer Banking				Commercial Banking(6)				Other(6)				Total
Net interest income (loss)		$	3,292			$	1,904			$	517			$	(158)			$	5,555
Non-interest income		1,013				107				237				469				1,826
Total net revenue		4,305				2,011				754				311				7,381
Provision (benefit) for credit losses		450				(43)				(74)				(2)				331
Non-interest expense		2,003				1,011				424				110				3,548
Income (loss) from continuing operations before income taxes		1,852				1,043				404				203				3,502
Income tax provision (benefit)		438				247				95				316				1,096
Income (loss) from continuing operations, net of tax		$	1,414			$	796			$	309			$	(113)			$	2,406
		Three Months Ended December 31, 2019																				Year Ended December 31, 2019
(Dollars in millions)		Credit Card				Consumer Banking				Commercial Banking(6)				Other(6)				Total				Credit Card				Consumer Banking				Commercial Banking(6)				Other(6)				Total
Net interest income		$	3,794			$	1,662			$	494			$	116			$	6,066			$	14,461			$	6,732			$	1,983			$	164			$	23,340
Non-interest income (loss)		1,030				152				223				(44)				1,361				3,888				643				831				(109)				5,253
Total net revenue		4,824				1,814				717				72				7,427				18,349				7,375				2,814				55				28,593
Provision for credit losses		1,421				335				62				—				1,818				4,992				938				306				—				6,236
Non-interest expense		2,487				1,110				441				123				4,161				9,271				4,091				1,699				422				15,483
Income (loss) from continuing operations before income taxes		916				369				214				(51)				1,448				4,086				2,346				809				(367)				6,874
Income tax provision (benefit)		212				86				50				(78)				270				959				547				188				(353)				1,341
Income (loss) from continuing operations, net of tax		$	704			$	283			$	164			$	27			$	1,178			$	3,127			$	1,799			$	621			$	(14)			$	5,533

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Credit Card Business
																						2020 Q4 vs.						Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019											2020 vs.
(Dollars in millions, except as noted)		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Credit Card
Earnings:
Net interest income		$	3,413			$	3,292			$	3,369			$	3,702			$	3,794			4	%		(10)	%		$	13,776			$	14,461			(5)	%
Non-interest income		1,054				1,013				845				911				1,030				4			2			3,823				3,888				(2)
Total net revenue		4,467				4,305				4,214				4,613				4,824				4			(7)			17,599				18,349				(4)
Provision for credit losses		231				450				2,944				3,702				1,421				(49)			(84)			7,327				4,992				47
Non-interest expense		2,311				2,003				1,969				2,208				2,487				15			(7)			8,491				9,271				(8)
Income (loss) from continuing operations before income taxes		1,925				1,852				(699)				(1,297)				916				4			110			1,781				4,086				(56)
Income tax provision (benefit)		454				438				(166)				(306)				212				4			114			420				959				(56)
Income (loss) from continuing operations, net of tax		$	1,471			$	1,414			$	(533)			$	(991)			$	704			4			109			$	1,361			$	3,127			(56)
Selected performance metrics:
Period-end loans held for investment(1)(7)		$	106,956			$	103,641			$	107,310			$	117,797			$	128,236			3			(17)			$	106,956			$	128,236			(17)
Average loans held for investment(1)		103,561				105,367				108,748				122,776				122,085				(2)			(15)			110,082				114,202				(4)
Average yield on loans outstanding(8)		14.24		%		13.83		%		13.72		%		14.46		%		15.02		%		41	bps		(78)	bps		14.08		%		15.49		%		(141)	bps
Total net revenue margin(9)		16.92				16.34				15.50				15.03				15.80				58			112			15.91				16.07				(16)
Net charge-off rate		2.63				3.58				4.46				4.68				4.31				(95)			(168)			3.88				4.51				(63)
30+ day performing delinquency rate		2.44				2.20				2.74				3.69				3.89				24			(145)			2.44				3.89				(145)
30+ day delinquency rate		2.45				2.21				2.75				3.70				3.91				24			(146)			2.45				3.91				(146)
Nonperforming loan rate(3)		0.02				0.02				0.02				0.02				0.02				—			—			0.02				0.02				—
Purchase volume(10)		$	117,141			$	107,102			$	90,149			$	99,920			$	116,631			9	%		—			$	414,312			$	424,765			(2)	%
																						2020 Q4 vs.						Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019											2020 vs.
(Dollars in millions, except as noted)		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Domestic Card
Earnings:
Net interest income		$	3,129			$	2,995			$	3,094			$	3,381			$	3,473			4	%		(10)	%		$	12,599			$	13,265			(5)	%
Non-interest income		994				952				795				842				962				4			3			3,583				3,684				(3)
Total net revenue		4,123				3,947				3,889				4,223				4,435				4			(7)			16,182				16,949				(5)
Provision for credit losses		231				378				2,906				3,464				1,346				(39)			(83)			6,979				4,671				49
Non-interest expense		2,063				1,802				1,776				1,984				2,249				14			(8)			7,625				8,308				(8)
Income (loss) from continuing operations before income taxes		1,829				1,767				(793)				(1,225)				840				4			118			1,578				3,970				(60)
Income tax provision (benefit)		433				419				(188)				(290)				196				3			121			374				925				(60)
Income (loss) from continuing operations, net of tax		$	1,396			$	1,348			$	(605)			$	(935)			$	644			4			117			$	1,204			$	3,045			(60)
Selected performance metrics:
Period-end loans held for investment(1)(7)		$	98,504			$	95,541			$	99,390			$	109,549			$	118,606			3			(17)			$	98,504			$	118,606			(17)
Average loans held for investment(1)		95,453				97,306				100,996				113,711				112,965				(2)			(16)			101,837				105,270				(3)
Average yield on loans outstanding(8)		14.07		%		13.57		%		13.52		%		14.30		%		14.91		%		50	bps		(84)	bps		13.88		%		15.47		%		(159)	bps
Total net revenue margin(9)		16.91				16.22				15.40				14.86				15.70				69			121			15.80				16.10				(30)
Net charge-off rate		2.69				3.64				4.53				4.68				4.32				(95)			(163)			3.93				4.58				(65)
30+ day performing delinquency rate		2.42				2.21				2.74				3.69				3.93				21			(151)			2.42				3.93				(151)
Purchase volume(10)		$	107,572			$	98,107			$	82,860			$	92,248			$	107,154			10	%		—			$	380,787			$	390,032			(2)	%
Refreshed FICO scores:(11)
Greater than 660		69		%		69		%		67		%		65		%		67		%		—			2	%		69		%		67		%		2
660 or below		31				31				33				35				33				—			(2)			31				33				(2)
Total		100		%		100		%		100		%		100		%		100		%								100		%		100		%

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Consumer Banking Business
																						2020 Q4 vs.						Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019											2020 vs.
(Dollars in millions, except as noted)		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Consumer Banking
Earnings:
Net interest income		$	2,012			$	1,904			$	1,665			$	1,657			$	1,662			6	%		21	%		$	7,238			$	6,732			8	%
Non-interest income		136				107				97				126				152				27			(11)			466				643				(28)
Total net revenue		2,148				2,011				1,762				1,783				1,814				7			18			7,704				7,375				4
Provision (benefit) for credit losses		60				(43)				876				860				335				**			(82)			1,753				938				87
Non-interest expense		1,121				1,011				1,036				991				1,110				11			1			4,159				4,091				2
Income (loss) from continuing operations before income taxes		967				1,043				(150)				(68)				369				(7)			162			1,792				2,346				(24)
Income tax provision (benefit)		230				247				(36)				(16)				86				(7)			167			425				547				(22)
Income (loss) from continuing operations, net of tax		$	737			$	796			$	(114)			$	(52)			$	283			(7)			160			$	1,367			$	1,799			(24)
Selected performance metrics:
Period-end loans held for investment		$	68,888			$	68,688			$	66,712			$	64,033			$	63,065			—			9			$	68,888			$	63,065			9
Average loans held for investment		68,808				67,822				64,851				63,671				62,596				1			10			66,299				60,708				9
Average yield on loans held for investment(8)		8.28		%		8.36		%		8.41		%		8.46		%		8.51		%		(8)	bps		(23)	bps		8.37		%		8.37		%		—
Auto loan originations		$	7,371			$	8,979			$	8,292			$	7,640			$	7,527			(18)	%		(2)	%		$	32,282			$	29,251			10	%
Period-end deposits		249,815				249,684				246,804				217,607				213,099				—			17			249,815				213,099				17
Average deposits		249,419				248,418				232,293				215,071				209,783				—			19			236,369				205,012				15
Average deposits interest rate		0.47		%		0.66		%		0.89		%		1.06		%		1.20		%		(19)	bps		(73)	bps		0.76		%		1.24		%		(48)	bps
Net charge-off rate		0.53				0.28				1.19				1.54				1.93				25			(140)			0.87				1.56				(69)
30+ day performing delinquency rate		4.62				3.62				3.16				5.12				6.63				100			(201)			4.62				6.63				(201)
30+ day delinquency rate		5.00				3.90				3.48				5.65				7.34				110			(234)			5.00				7.34				(234)
Nonperforming loan rate(3)		0.47				0.38				0.43				0.63				0.81				9			(34)			0.47				0.81				(34)
Nonperforming asset rate(4)		0.54				0.43				0.46				0.71				0.91				11			(37)			0.54				0.91				(37)
Auto—At origination FICO scores:(12)
Greater than 660		46		%		46		%		46		%		47		%		48		%		—			(2)	%		46		%		48		%		(2)	%
621 - 660		20				20				20				20				20				—			—			20				20				—
620 or below		34				34				34				33				32				—			2			34				32				2
Total		100		%		100		%		100		%		100		%		100		%								100		%		100		%

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Commercial Banking Business
																						2020 Q4 vs.						Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019											2020 vs.
(Dollars in millions, except as noted)		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Commercial Banking
Earnings:
Net interest income		$	522			$	517			$	518			$	491			$	494			1	%		6	%		$	2,048			$	1,983			3	%
Non-interest income		268				237				180				238				223				13			20			923				831				11
Total net revenue(6)		790				754				698				729				717				5			10			2,971				2,814				6
Provision (benefit) for credit losses		(28)				(74)				427				856				62				(62)			**			1,181				306				286
Non-interest expense		445				424				425				412				441				5			1			1,706				1,699				—
Income (loss) from continuing operations before income taxes		373				404				(154)				(539)				214				(8)			74			84				809				(90)
Income tax provision (benefit)		88				95				(36)				(128)				50				(7)			76			19				188				(90)
Income (loss) from continuing operations, net of tax		$	285			$	309			$	(118)			$	(411)			$	164			(8)			74			$	65			$	621			(90)
Selected performance metrics:
Period-end loans held for investment		$	75,780			$	75,894			$	77,490			$	81,160			$	74,508			—			2			$	75,780			$	74,508			2
Average loans held for investment		75,320				76,322				79,759				76,442				74,189				(1)			2			76,954				72,540				6
Average yield on loans held for investment(6)(8)		2.83		%		2.82		%		3.00		%		3.88		%		4.22		%		1	bps		(139)	bps		3.13		%		4.51		%		(138)	bps
Period-end deposits		$	39,590			$	36,783			$	35,669			$	32,822			$	32,134			8	%		23	%		$	39,590			$	32,134			23	%
Average deposits		38,676				36,278				34,635				32,238				32,034				7			21			35,468				31,229				14
Average deposits interest rate		0.23		%		0.25		%		0.30		%		0.89		%		1.10		%		(2)	bps		(87)	bps		0.40		%		1.18		%		(78)	bps
Net charge-off rate		0.45				0.43				0.51				0.57				0.35				2			10			0.49				0.22				27
Nonperforming loan rate(3)		0.86				1.01				0.85				0.61				0.60				(15)			26			0.86				0.60				26
Nonperforming asset rate(4)		0.86				1.01				0.85				0.61				0.60				(15)			26			0.86				0.60				26
Risk category:(13)
Noncriticized		$	67,964			$	68,533			$	70,881			$	77,714			$	71,848			(1)	%		(5)	%		$	67,964			$	71,848			(5)	%
Criticized performing		7,166				6,593				5,949				2,952				2,181				9			**			7,166				2,181				**
Criticized nonperforming		650				768				660				494				448				(15)			45			650				448				45
PCI loans		—				—				—				—				31				—			**			—				31				**
Total commercial banking loans		$	75,780			$	75,894			$	77,490			$	81,160			$	74,508			—			2			$	75,780			$	74,508			2
Risk category as a percentage of period-end loans held for investment:(13)
Noncriticized		89.6		%		90.3		%		91.4		%		95.8		%		96.5		%		(70)	bps		(690)	bps		89.6		%		96.5		%		(690)	bps
Criticized performing		9.5				8.7				7.7				3.6				2.9				80			660			9.5				2.9				660
Criticized nonperforming		0.9				1.0				0.9				0.6				0.6				(10)			30			0.9				0.6				30
Total commercial banking loans		100.0		%		100.0		%		100.0		%		100.0		%		100.0		%								100.0		%		100.0		%

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Financial & Statistical Summary—Other and Total
																						2020 Q4 vs.						Year Ended December 31,
		2020				2020				2020				2020				2019				2020			2019											2020 vs.
(Dollars in millions)		Q4				Q3				Q2				Q1				Q4				Q3			Q4			2020				2019				2019
Other
Earnings:
Net interest income (loss)		$	(74)			$	(158)			$	(92)			$	175			$	116			(53)	%		**			$	(149)			$	164			**
Non-interest income (loss)		6				469				(26)				(51)				(44)				(99)			**			398				(109)				**
Total net revenue (loss)(6)		(68)				311				(118)				124				72				**			**			249				55				**
Provision (benefit) for credit losses		1				(2)				(1)				5				—				**			**			3				—				**
Non-interest expense(14)(15)		132				110				340				118				123				20			7	%		700				422				66	%
Income (loss) from continuing operations before income taxes		(201)				203				(457)				1				(51)				**			**			(454)				(367)				24
Income tax provision (benefit)		(276)				316				(305)				(113)				(78)				**			254			(378)				(353)				7
Income (loss) from continuing operations, net of tax		$	75			$	(113)			$	(152)			$	114			$	27			**			178			$	(76)			$	(14)			**
Selected performance metrics:
Period-end deposits		$	16,037			$	19,258			$	21,765			$	19,260			$	17,464			(17)			(8)			$	16,037			$	17,464			(8)
Average deposits		16,418				20,820				21,416				17,344				18,223				(21)			(10)			18,998				18,824				1
Total
Earnings:
Net interest income		$	5,873			$	5,555			$	5,460			$	6,025			$	6,066			6	%		(3)	%		$	22,913			$	23,340			(2)	%
Non-interest income		1,464				1,826				1,096				1,224				1,361				(20)			8			5,610				5,253				7
Total net revenue		7,337				7,381				6,556				7,249				7,427				(1)			(1)			28,523				28,593				—
Provision for credit losses		264				331				4,246				5,423				1,818				(20)			(85)			10,264				6,236				65
Non-interest expense		4,009				3,548				3,770				3,729				4,161				13			(4)			15,056				15,483				(3)
Income (loss) from continuing operations before income taxes		3,064				3,502				(1,460)				(1,903)				1,448				(13)			112			3,203				6,874				(53)
Income tax provision (benefit)		496				1,096				(543)				(563)				270				(55)			84			486				1,341				(64)
Income (loss) from continuing operations, net of tax		$	2,568			$	2,406			$	(917)			$	(1,340)			$	1,178			7			118			$	2,717			$	5,533			(51)
Selected performance metrics:
Period-end loans held for investment		$	251,624			$	248,223			$	251,512			$	262,990			$	265,809			1			(5)			$	251,624			$	265,809			(5)
Average loans held for investment		247,689				249,511				253,358				262,889				258,870				(1)			(4)			253,335				247,450				2
Period-end deposits		305,442				305,725				304,238				269,689				262,697				—			16			305,442				262,697				16
Average deposits		304,513				305,516				288,344				264,653				260,040				—			17			290,835				255,065				14

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)
(1)	Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment.
(2)	Metrics for Q4 2020, Q3 2020, Q2 2020 and Q1 2020 include the impact of COVID-19 customer assistance programs where applicable.
(3)	Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.
(4)	Nonperforming assets consist of nonperforming loans, repossessed assets and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, repossessed assets and other foreclosed assets.
(5)	Represents foreign currency translation adjustments.
(6)	Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.
(7)	We reclassified $2.1 billion in partnership loans to held for sale as of September 30, 2020.
(8)	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.
(9)	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans outstanding during the period.
(10)	Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.
(11)	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.
(12)	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.
(13)	Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
(14)	Includes charges incurred as a result of restructuring activities.
(15)	Includes net Cybersecurity Incident expenses of $6 million in Q4 2020, $6 million in Q3 2020, $11 million in Q2 2020, $4 million in Q1 2020 and $16 million in Q4 2019, respectively.
**	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)		December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019
Regulatory Capital Metrics
Common equity excluding AOCI		$	55,299			$	52,839			$	50,614			$	51,018			$	52,001
Adjustments:
AOCI, net of tax(2)		(29)				(122)				(145)				(170)				1,156
Goodwill, net of related deferred tax liabilities		(14,448)				(14,448)				(14,449)				(14,453)				(14,465)
Intangible assets, net of related deferred tax liabilities		(86)				(95)				(135)				(151)				(170)
Other(2)		—				—				—				—				(360)
Common equity Tier 1 capital		$	40,736			$	38,174			$	35,885			$	36,244			$	38,162
Tier 1 capital		$	45,583			$	43,505			$	41,094			$	41,453			$	43,015
Total capital(3)		52,783				50,955				48,508				48,775				50,350
Risk-weighted assets		297,483				293,852				290,222				302,871				313,155
Adjusted average assets(4)		406,762				409,602				398,062				377,360				368,511
Capital Ratios
Common equity Tier 1 capital(5)		13.7		%		13.0		%		12.4		%		12.0		%		12.2		%
Tier 1 capital(6)		15.3				14.8				14.2				13.7				13.7
Total capital(7)		17.7				17.3				16.7				16.1				16.1
Tier 1 leverage(4)		11.2				10.6				10.3				11.0				11.7
Tangible common equity ("TCE")(8)		10.0				9.4				8.8				9.6				10.2

 

 

 

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.
		2020																2019																Year Ended December 31,
(Dollars in millions, except per share data and as noted)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1				2020				2019
Adjusted diluted EPS:
Net income (loss) available to common stockholders (GAAP)		$	2,462			$	2,319			$	(1,009)			$	(1,420)			$	1,041			$	1,270			$	1,533			$	1,348			$	2,375			$	5,192
Legal reserve activity, including insurance recoveries		(37)				40				265				45				—				—				—				—				313				—
U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve")		—				(36)				—				—				—				212				—				—				(36)				212
Cybersecurity Incident expenses, net of insurance		6				6				11				4				16				22				—				—				27				38
Initial allowance build on acquired Walmart portfolio		—				—				—				—				84				—				—				—				—				84
Walmart launch and related integration expenses		—				—				—				—				48				84				54				25				—				211
Restructuring charges		—				—				—				—				—				—				28				—				—				28
Adjusted net income (loss) available to common stockholders before income tax impacts (non-GAAP)		2,431				2,329				(733)				(1,371)				1,189				1,588				1,615				1,373				2,679				5,765
Income tax impacts		5				(12)				(3)				(12)				(35)				(21)				(19)				(6)				(22)				(81)
Dividends and undistributed earnings allocated to participating securities(9)		—				—				—				—				(1)				(2)				(1)				—				(2)				(3)
Adjusted net income (loss) available to common stockholders (non-GAAP)		$	2,436			$	2,317			$	(736)			$	(1,383)			$	1,153			$	1,565			$	1,595			$	1,367			$	2,655			$	5,681
Diluted weighted-average common shares outstanding (in millions) (GAAP)		460.2				458.5				456.7				457.6				463.4				471.8				473.0				471.6				458.9				469.9
Diluted EPS (GAAP)		$	5.35			$	5.06			$	(2.21)			$	(3.10)			$	2.25			$	2.69			$	3.24			$	2.86			$	5.18			$	11.05
Impact of adjustments noted above		(0.06)				(0.01)				0.60				0.08				0.24				0.63				0.13				0.04				0.61				1.04
Adjusted diluted EPS		$	5.29			$	5.05			$	(1.61)			$	(3.02)			$	2.49			$	3.32			$	3.37			$	2.90			$	5.79			$	12.09
Adjusted efficiency ratio:
Non-interest expense (GAAP)		$	4,009			$	3,548			$	3,770			$	3,729			$	4,161			$	3,872			$	3,779			$	3,671			$	15,056			$	15,483
Legal reserve activity, including insurance recoveries		37				(40)				(265)				(45)				—				—				—				—				(313)				—
Cybersecurity Incident expenses, net of insurance		(6)				(6)				(11)				(4)				(16)				(22)				—				—				(27)				(38)
Walmart launch and related integration expenses		—				—				—				—				(48)				(84)				(54)				(25)				—				(211)
U.K. PPI Reserve		—				—				—				—				—				(72)				—				—				—				(72)
Restructuring charges		—				—				—				—				—				—				(27)				—				—				(27)
Adjusted non-interest expense (non-GAAP)		$	4,040			$	3,502			$	3,494			$	3,680			$	4,097			$	3,694			$	3,698			$	3,646			$	14,716			$	15,135
Total net revenue (GAAP)		$	7,337			$	7,381			$	6,556			$	7,249			$	7,427			$	6,959			$	7,124			$	7,083			$	28,523			$	28,593
U.K. PPI Reserve		—				(36)				—				—				—				140				—				—				(36)				140
Restructuring charges		—				—				—				—				—				—				1				—				—				1
Adjusted net revenue (non-GAAP)		$	7,337			$	7,345			$	6,556			$	7,249			$	7,427			$	7,099			$	7,125			$	7,083			$	28,487			$	28,734
Adjusted efficiency ratio		55.06		%		47.68		%		53.29		%		50.77		%		55.16		%		52.04		%		51.90		%		51.48		%		51.66		%		52.67		%
		2020																2019																Year Ended December 31,
(Dollars in millions, except per share data and as noted)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1				2020				2019
Adjusted operating efficiency ratio:
Operating expense (GAAP)		$	3,446			$	3,265			$	3,497			$	3,238			$	3,451			$	3,371			$	3,233			$	3,154			$	13,446			$	13,209
Legal reserve activity, including insurance recoveries		37				(40)				(265)				(45)				—				—				—				—				(313)				—
Cybersecurity Incident expenses, net of insurance		(6)				(6)				(11)				(4)				(16)				(22)				—				—				(27)				(38)
Walmart launch and related integration expenses		—				—				—				—				(48)				(84)				(54)				(25)				—				(211)
U.K. PPI Reserve		—				—				—				—				—				(72)				—				—				—				(72)
Restructuring charges		—				—				—				—				—				—				(27)				—				—				(27)
Adjusted operating expense (non-GAAP)		$	3,477			$	3,219			$	3,221			$	3,189			$	3,387			$	3,193			$	3,152			$	3,129			$	13,106			$	12,861
Adjusted net revenue (non-GAAP)		$	7,337			$	7,345			$	6,556			$	7,249			$	7,427			$	7,099			$	7,125			$	7,083			$	28,487			$	28,734
Adjusted operating efficiency ratio		47.39		%		43.83		%		49.13		%		43.99		%		45.60		%		44.98		%		44.24		%		44.18		%		46.01		%		44.76		%

 

 

 

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.
		2020				2020				2020				2020				2019
(Dollars in millions)		Q4				Q3				Q2				Q1				Q4
Tangible Common Equity (Period-End)
Stockholders' equity		$	60,204			$	58,424			$	56,045			$	56,830			$	58,011
Goodwill and intangible assets(10)		(14,809)				(14,825)				(14,869)				(14,888)				(14,932)
Noncumulative perpetual preferred stock		(4,847)				(5,330)				(5,209)				(5,209)				(4,853)
Tangible common equity		$	40,548			$	38,269			$	35,967			$	36,733			$	38,226
Tangible Common Equity (Average)
Stockholders' equity		$	59,389			$	57,223			$	57,623			$	58,568			$	58,148
Goodwill and intangible assets(10)		(14,824)				(14,867)				(14,880)				(14,930)				(14,967)
Noncumulative perpetual preferred stock		(5,168)				(5,228)				(5,209)				(5,382)				(5,506)
Tangible common equity		$	39,397			$	37,128			$	37,534			$	38,256			$	37,675
Tangible Assets (Period-End)
Total assets		$	421,602			$	421,883			$	421,296			$	396,878			$	390,365
Goodwill and intangible assets(10)		(14,809)				(14,825)				(14,869)				(14,888)				(14,932)
Tangible assets		$	406,793			$	407,058			$	406,427			$	381,990			$	375,433
Tangible Assets (Average)
Total assets		$	420,011			$	422,854			$	411,075			$	390,380			$	383,162
Goodwill and intangible assets(10)		(14,824)				(14,867)				(14,880)				(14,930)				(14,967)
Tangible assets		$	405,187			$	407,987			$	396,195			$	375,450			$	368,195
__________
(1)        Regulatory capital metrics and capital ratios as of December 31, 2020 are preliminary and therefore subject to change.
(2)        In the first quarter of 2020, we elected to exclude from our regulatory capital ratios certain components of AOCI as permitted under the Tailoring Rules. As such, we revised our presentation herein to only include            those components of AOCI that impact our regulatory capital ratios.
(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)        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.
(10)      Includes impact of related deferred taxes.

 

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SOURCE Capital One Financial Corporation

FAQ

What was Capital One's net income for the fourth quarter of 2020?

Capital One reported a net income of $2.6 billion for Q4 2020.

How much did Capital One's earnings per diluted share increase in Q4 2020?

Earnings per diluted share increased to $5.35 in Q4 2020.

What stock repurchase program did Capital One authorize?

Capital One authorized a common stock repurchase program of up to $7.5 billion.

How did Capital One's total net revenue change in Q4 2020?

Total net revenue decreased by 1% to $7.3 billion in Q4 2020.

What happened to Capital One's non-interest expense in Q4 2020?

Total non-interest expense increased by 13% to $4.0 billion in Q4 2020.