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

Rhea-AI Summary

Capital One Financial Corporation (NYSE: COF) reported a net income of $3.5 billion, or $7.62 per diluted share, for Q2 2021, up from $3.3 billion in Q1 2021. The company had a significant turnaround from a net loss of $918 million in Q2 2020. Total net revenue rose 4% to $7.4 billion, while total non-interest expenses increased by 6% to $4.0 billion. Credit loss provisions decreased by $337 million, reflecting a net charge-off of $541 million. The Common Equity Tier 1 capital ratio stands at 14.5%, and period-end loans held for investment climbed to $249.6 billion.

Positive

• Net income of $3.5 billion, a significant increase from the previous quarter.
• Total net revenue increased by 4% to $7.4 billion.
• Credit loss provisions decreased by $337 million, indicating improved credit conditions.
• Common Equity Tier 1 capital ratio of 14.5%, showcasing strong capital position.
• Period-end loans held for investment rose by $6.5 billion (3%) to $249.6 billion.

Negative

• Total non-interest expenses increased by 6% to $4.0 billion, driven by a 24% rise in marketing costs.
• Net interest margin decreased by 10 basis points to 5.89%, indicating reduced income from loans.

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

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

The quarter included the following adjusting item:

(Dollars in millions, except per share data)	Pre-Tax Impact			Diluted EPS Impact
Legal reserve build	$	55		$	0.09

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

Second Quarter 2021 Income Statement Summary:

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

Second Quarter 2021 Balance Sheet Summary:

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

(1)

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

(2)

Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period. Management believes that this financial metric is useful in enabling investors and others to assess the Company's ability to generate income to cover credit losses through a credit cycle, which can vary significantly between periods.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 22, 2021 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through August 5, 2021 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2020.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $306.3 billion in deposits and $423.4 billion in total assets as of June 30, 2021. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

 

Exhibit 99.2
Capital One Financial Corporation Financial Supplement(1)(2) Second Quarter 2021 Table of Contents
Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	7
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	10
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	11
	Table 7:	Loan Information and Performance Statistics	12
	Table 8:	Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity	14
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	15
	Table 10:	Financial & Statistical Summary—Credit Card Business	16
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	18
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	19
	Table 13:	Financial & Statistical Summary—Other and Total	20
Other
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	21
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	22

__________
(1)	The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2021 once it is filed with the Securities and Exchange Commission.
(2)	This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. ("GAAP"), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 1: Financial Summary—Consolidated
																						2021 Q2 vs.						Six Months Ended June 30,
(Dollars in millions, except per share data and as noted)		2021				2021				2020				2020				2020				2021			2020											2021 vs.
		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Income Statement
Net interest income		$	5,743			$	5,822			$	5,873			$	5,555			$	5,460			(1)	%		5	%		$	11,565			$	11,485			1	%
Non-interest income		1,631				1,291				1,464				1,826				1,096				26			49			2,922				2,320				26
Total net revenue(1)		7,374				7,113				7,337				7,381				6,556				4			12			14,487				13,805				5
Provision (benefit) for credit losses		(1,160)				(823)				264				331				4,246				41			**			(1,983)				9,669				**
Non-interest expense:
Marketing		620				501				563				283				273				24			127			1,121				764				47
Operating expense		3,346				3,239				3,446				3,265				3,497				3			(4)			6,585				6,735				(2)
Total non-interest expense		3,966				3,740				4,009				3,548				3,770				6			5			7,706				7,499				3
Income (loss) from continuing operations before income taxes		4,568				4,196				3,064				3,502				(1,460)				9			**			8,764				(3,363)				**
Income tax provision (benefit)		1,031				869				496				1,096				(543)				19			**			1,900				(1,106)				**
Income (loss) from continuing operations, net of tax		3,537				3,327				2,568				2,406				(917)				6			**			6,864				(2,257)				**
Loss from discontinued operations, net of tax		(1)				(2)				(2)				—				(1)				(50)			—			(3)				(1)				**
Net income (loss)		3,536				3,325				2,566				2,406				(918)				6			**			6,861				(2,258)				**
Dividends and undistributed earnings allocated to participating securities(2)		(30)				(28)				(19)				(20)				(1)				7			**			(58)				(4)				**
Preferred stock dividends		(60)				(61)				(68)				(67)				(90)				(2)			(33)			(121)				(145)				(17)
Issuance cost for redeemed preferred stock(3)		—				—				(17)				—				—				—			—			—				(22)				**
Net income (loss) available to common stockholders		$	3,446			$	3,236			$	2,462			$	2,319			$	(1,009)			6			**			$	6,682			$	(2,429)			**
Common Share Statistics
Basic earnings per common share:(2)
Net income (loss) from continuing operations		$	7.65			$	7.06			$	5.36			$	5.07			$	(2.21)			8	%		**			$	14.70			$	(5.31)			**
Net income (loss) per basic common share		$	7.65			$	7.06			$	5.36			$	5.07			$	(2.21)			8			**			$	14.70			$	(5.31)			**
Diluted earnings per common share:(2)
Net income (loss) from continuing operations		$	7.62			$	7.03			$	5.35			$	5.06			$	(2.21)			8			**			$	14.65			$	(5.31)			**
Net income (loss) per diluted common share		$	7.62			$	7.03			$	5.35			$	5.06			$	(2.21)			8			**			$	14.65			$	(5.31)			**
Weighted-average common shares outstanding (in millions):
Basic		450.6				458.6				459.1				457.8				456.7				(2)			(1)	%		454.6				457.1				(1)	%
Diluted		452.3				460.1				460.2				458.5				456.7				(2)			(1)			456.2				457.1				—
Common shares outstanding (period-end, in millions)		446.1				456.8				459.0				457.4				456.3				(2)			(2)			446.1				456.3				(2)
Dividends declared and paid per common share		$	0.40			$	0.40			$	0.10			$	0.10			$	0.40			—			—			$	0.80			$	0.80			—
Tangible book value per common share (period-end)(4)		97.20				90.96				88.34				83.67				78.82				7			23			97.20				78.82				23
																						2021 Q2 vs.						Six Months Ended June 30,
(Dollars in millions)		2021				2021				2020				2020				2020				2021			2020											2021 vs.
		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Balance Sheet (Period-End)
Loans held for investment		$	249,597			$	243,131			$	251,624			$	248,223			$	251,512			3	%		(1)	%		$	249,597			$	251,512			(1)	%
Interest-earning assets		387,295				392,485				388,917				390,040				389,829				(1)			(1)			387,295				389,829				(1)
Total assets		423,420				425,175				421,602				421,883				421,296				—			1			423,420				421,296				1
Interest-bearing deposits		271,314				276,325				274,300				276,092				275,183				(2)			(1)			271,314				275,183				(1)
Total deposits		306,308				310,328				305,442				305,725				304,238				(1)			1			306,308				304,238				1
Borrowings		36,343				38,450				40,539				42,795				44,900				(5)			(19)			36,343				44,900				(19)
Common equity		58,136				56,341				55,356				53,093				50,835				3			14			58,136				50,835				14
Total stockholders' equity		64,624				61,188				60,204				58,424				56,045				6			15			64,624				56,045				15
Balance Sheet (Average Balances)
Loans held for investment		$	246,463			$	243,937			$	247,689			$	249,511			$	253,358			1	%		(3)	%		$	245,207			$	258,124			(5)	%
Interest-earning assets		390,129				388,572				388,252				391,451				378,145				—			3			389,355				366,746				6
Total assets		424,099				421,808				420,011				422,854				411,075				1			3			422,959				400,845				6
Interest-bearing deposits		273,476				273,358				274,142				276,339				261,256				—			5			273,417				251,185				9
Total deposits		308,217				305,056				304,513				305,516				288,344				1			7			306,645				276,498				11
Borrowings		37,054				39,911				40,662				44,161				49,827				(7)			(26)			38,475				50,810				(24)
Common equity		56,885				55,775				54,220				51,995				52,413				2			9			56,333				52,799				7
Total stockholders' equity		62,376				60,623				59,389				57,223				57,623				3			8			61,504				58,096				6

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 2: Selected Metrics—Consolidated
																						2021 Q2 vs.						Six Months Ended June 30,
(Dollars in millions, except as noted)		2021				2021				2020				2020				2020				2021			2020											2021 vs.
		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Performance Metrics
Net interest income growth (period over period)		(1)		%		(1)		%		6		%		2		%		(9)		%		**			**			1		%		—				**
Non-interest income growth (period over period)		26				(12)				(20)				67				(10)				**			**			26				(13)		%		**
Total net revenue growth (period over period)		4				(3)				(1)				13				(10)				**			**			5				(3)				**
Total net revenue margin(5)		7.56				7.32				7.56				7.54				6.93				24	bps		63	bps		7.44				7.53				(9)	bps
Net interest margin(6)		5.89				5.99				6.05				5.68				5.78				(10)			11			5.94				6.26				(32)
Return on average assets		3.34				3.16				2.45				2.28				(0.89)				18			4	%		3.25				(1.13)				4	%
Return on average tangible assets(7)		3.46				3.27				2.54				2.36				(0.93)				19			4			3.36				(1.17)				5
Return on average common equity(8)		24.24				23.22				18.18				17.84				(7.69)				102			32			23.73				(9.20)				33
Return on average tangible common equity(9)		32.75				31.61				25.02				24.98				(10.74)				114			43			32.19				(12.81)				45
Non-interest expense as a percentage of average loans held for investment		6.44				6.13				6.47				5.69				5.95				31			49	bps		6.29				5.81				48	bps
Efficiency ratio(10)		53.78				52.58				54.64				48.07				57.50				120			(4)	%		53.19				54.32				(113)
Operating efficiency ratio(11)		45.38				45.54				46.97				44.24				53.34				(16)			(8)			45.45				48.79				(334)
Effective income tax rate for continuing operations		22.6				20.7				16.2				31.3				37.2				190			(15)			21.7				32.9				(11)	%
Employees (period-end, in thousands)		52.0				51.7				52.0				52.5				53.1				1	%		(2)			52.0				53.1				(2)
Credit Quality Metrics
Allowance for credit losses		$	12,346			$	14,017			$	15,564			$	16,129			$	16,832			(12)	%		(27)	%		$	12,346			$	16,832			(27)	%
Allowance coverage ratio		4.95		%		5.77		%		6.19		%		6.50		%		6.69		%		(82)	bps		(174)	bps		4.95		%		6.69		%		(174)	bps
Net charge-offs		$	541			$	740			$	856			$	1,073			$	1,505			(27)	%		(64)	%		$	1,281			$	3,296			(61)	%
Net charge-off rate(12)		0.88		%		1.21		%		1.38		%		1.72		%		2.38		%		(33)	bps		(150)	bps		1.04		%		2.55		%		(151)	bps
30+ day performing delinquency rate(13)		1.75				1.82				2.41				1.97				2.09				(7)			(34)			1.75				2.09				(34)
30+ day delinquency rate(13)		1.89				1.98				2.61				2.22				2.30				(9)			(41)			1.89				2.30				(41)
Capital Ratios(14)
Common equity Tier 1 capital		14.5		%		14.6		%		13.7		%		13.0		%		12.4		%		(10)	bps		210	bps		14.5		%		12.4		%		210	bps
Tier 1 capital		16.6				16.2				15.3				14.8				14.2				40			240			16.6				14.2				240
Total capital		18.8				18.6				17.7				17.3				16.7				20			210			18.8				16.7				210
Tier 1 leverage		12.4				11.7				11.2				10.6				10.3				70			210			12.4				10.3				210
Tangible common equity ("TCE")(15)		10.6				10.1				10.0				9.4				8.8				50			180			10.6				8.8				180

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 3: Consolidated Statements of Income
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020											2021 vs.
(Dollars in millions, except per share data and as noted)		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Interest income:
Loans, including loans held for sale		$	5,753			$	5,854			$	5,954			$	5,758			$	5,820			(2)	%		(1)	%		$	11,607			$	12,362			(6)	%
Investment securities		370				391				422				443				482				(5)			(23)			761				1,012				(25)
Other		16				16				15				14				16				—			—			32				53				(40)
Total interest income		6,139				6,261				6,391				6,215				6,318				(2)			(3)			12,400				13,427				(8)
Interest expense:
Deposits		237				269				347				476				611				(12)			(61)			506				1,342				(62)
Securitized debt obligations		28				32				34				43				56				(13)			(50)			60				155				(61)
Senior and subordinated notes		122				129				128				132				180				(5)			(32)			251				419				(40)
Other borrowings		9				9				9				9				11				—			(18)			18				26				(31)
Total interest expense		396				439				518				660				858				(10)			(54)			835				1,942				(57)
Net interest income		5,743				5,822				5,873				5,555				5,460				(1)			5			11,565				11,485				1
Provision (benefit) for credit losses		(1,160)				(823)				264				331				4,246				41			**			(1,983)				9,669				**
Net interest income after provision for credit losses		6,903				6,645				5,609				5,224				1,214				4			**			13,548				1,816				**
Non-interest income:
Interchange fees, net		1,016				817				818				775				672				24			51			1,833				1,424				29
Service charges and other customer-related fees		384				352				338				320				258				9			49			736				585				26
Net securities gains		—				4				—				25				—				**			—			4				—				**
Other		231				118				308				706				166				96			39			349				311				12
Total non-interest income		1,631				1,291				1,464				1,826				1,096				26			49			2,922				2,320				26
Non-interest expense:
Salaries and associate benefits		1,781				1,847				1,755				1,719				1,704				(4)			5			3,628				3,331				9
Occupancy and equipment		523				472				572				506				523				11			—			995				1,040				(4)
Marketing		620				501				563				283				273				24			127			1,121				764				47
Professional services		341				292				394				327				304				17			12			633				591				7
Communications and data processing		315				302				295				310				308				4			2			617				610				1
Amortization of intangibles		5				6				8				14				16				(17)			(69)			11				38				(71)
Other		381				320				422				389				642				19			(41)			701				1,125				(38)
Total non-interest expense		3,966				3,740				4,009				3,548				3,770				6			5			7,706				7,499				3
Income (loss) from continuing operations before income taxes		4,568				4,196				3,064				3,502				(1,460)				9			**			8,764				(3,363)				**
Income tax provision (benefit)		1,031				869				496				1,096				(543)				19			**			1,900				(1,106)				**
Income (loss) from continuing operations, net of tax		3,537				3,327				2,568				2,406				(917)				6			**			6,864				(2,257)				**
Loss from discontinued operations, net of tax		(1)				(2)				(2)				—				(1)				(50)			—			(3)				(1)				**
Net income (loss)		3,536				3,325				2,566				2,406				(918)				6			**			6,861				(2,258)				**
Dividends and undistributed earnings allocated to participating securities(2)		(30)				(28)				(19)				(20)				(1)				7			**			(58)				(4)				**
Preferred stock dividends		(60)				(61)				(68)				(67)				(90)				(2)			(33)			(121)				(145)				(17)
Issuance cost for redeemed preferred stock(3)		—				—				(17)				—				—				—			—			—				(22)				**
Net income (loss) available to common stockholders		$	3,446			$	3,236			$	2,462			$	2,319			$	(1,009)			6			**			$	6,682			$	(2,429)			**
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020											2021 vs.
(Dollars in millions, except per share data and as noted)		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Basic earnings per common share:(2)
Net income (loss) from continuing operations		$	7.65			$	7.06			$	5.36			$	5.07			$	(2.21)			8	%		**			$	14.70			$	(5.31)			**
Net income (loss) per basic common share		$	7.65			$	7.06			$	5.36			$	5.07			$	(2.21)			8			**			$	14.70			$	(5.31)			**
Diluted earnings per common share:(2)
Net income (loss) from continuing operations		$	7.62			$	7.03			$	5.35			$	5.06			$	(2.21)			8			**			$	14.65			$	(5.31)			**
Net income (loss) per diluted common share		$	7.62			$	7.03			$	5.35			$	5.06			$	(2.21)			8			**			$	14.65			$	(5.31)			**
Weighted-average common shares outstanding (in millions):
Basic common shares		450.6				458.6				459.1				457.8				456.7				(2)			(1)	%		454.6				457.1				(1)	%
Diluted common shares		452.3				460.1				460.2				458.5				456.7				(2)			(1)			456.2				457.1				—

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 4: Consolidated Balance Sheets
																						2021 Q2 vs.
		2021				2021				2020				2020				2020				2021			2020
(Dollars in millions)		Q2				Q1				Q4				Q3				Q2				Q1			Q2
Assets:
Cash and cash equivalents:
Cash and due from banks		$	5,312			$	4,670			$	4,708			$	4,267			$	4,583			14	%		16	%
Interest-bearing deposits and other short-term investments		29,534				45,825				35,801				39,839				51,235				(36)			(42)
Total cash and cash equivalents		34,846				50,495				40,509				44,106				55,818				(31)			(38)
Restricted cash for securitization investors		242				1,779				262				895				740				(86)			(67)
Securities available for sale		101,766				99,165				100,445				99,853				87,859				3			16
Loans held for investment:
Unsecuritized loans held for investment		226,130				219,182				225,698				217,878				222,310				3			2
Loans held in consolidated trusts		23,467				23,949				25,926				30,345				29,202				(2)			(20)
Total loans held for investment		249,597				243,131				251,624				248,223				251,512				3			(1)
Allowance for credit losses		(12,346)				(14,017)				(15,564)				(16,129)				(16,832)				(12)			(27)
Net loans held for investment		237,251				229,114				236,060				232,094				234,680				4			1
Loans held for sale		6,522				2,896				2,710				3,433				711				125			**
Premises and equipment, net		4,227				4,277				4,287				4,333				4,324				(1)			(2)
Interest receivable		1,372				1,380				1,471				1,551				1,574				(1)			(13)
Goodwill		14,654				14,654				14,653				14,648				14,645				—			—
Other assets		22,540				21,415				21,205				20,970				20,945				5			8
Total assets		$	423,420			$	425,175			$	421,602			$	421,883			$	421,296			—			1
																						2021 Q2 vs.
		2021				2021				2020				2020				2020				2021			2020
(Dollars in millions)		Q2				Q1				Q4				Q3				Q2				Q1			Q2
Liabilities:
Interest payable		$	301			$	288			$	352			$	332			$	380			5	%		(21)	%
Deposits:
Non-interest-bearing deposits		34,994				34,003				31,142				29,633				29,055				3			20
Interest-bearing deposits		271,314				276,325				274,300				276,092				275,183				(2)			(1)
Total deposits		306,308				310,328				305,442				305,725				304,238				(1)			1
Securitized debt obligations		10,561				12,071				12,414				13,566				15,761				(13)			(33)
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase		845				842				668				702				573				—			47
Senior and subordinated notes		24,878				25,467				27,382				28,448				28,481				(2)			(13)
Other borrowings		59				70				75				79				85				(16)			(31)
Total other debt		25,782				26,379				28,125				29,229				29,139				(2)			(12)
Other liabilities		15,844				14,921				15,065				14,607				15,733				6			1
Total liabilities		358,796				363,987				361,398				363,459				365,251				(1)			(2)
Stockholders' equity:
Preferred stock		0				0				0				0				0				—			—
Common stock		7				7				7				7				7				—			—
Additional paid-in capital, net		35,472				33,671				33,480				33,793				33,556				5			6
Retained earnings		46,461				43,167				40,088				37,653				35,361				8			31
Accumulated other comprehensive income		1,792				1,783				3,494				3,833				3,981				1			(55)
Treasury stock, at cost		(19,108)				(17,440)				(16,865)				(16,862)				(16,860)				10			13
Total stockholders' equity		64,624				61,188				60,204				58,424				56,045				6			15
Total liabilities and stockholders' equity		$	423,420			$	425,175			$	421,602			$	421,883			$	421,296			—			1

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)
(1)	Total net revenue was reduced by $175 million in Q2 2021, $180 million in Q1 2021, $177 million in Q4 2020, $235 million in Q3 2020 and $318 million in Q2 2020 for credit card finance charges and fees charged-off as uncollectible.
(2)	Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(3)	On December 1, 2020, we redeemed all outstanding shares of our fixed rate 6.20% non-cumulative perpetual preferred stock Series F, which reduced our net income available to common shareholders by $17 million in Q4 2020. On March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B, which increased our net loss available to common shareholders by $22 million in Q1 2020.
(4)	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(5)	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(6)	Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(7)	Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(8)	Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.
(9)	Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity ("TCE"). Our calculation of return on average TCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(10)	Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(11)	Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(12)	Net charge-off  rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(13)	Metrics include the impact of COVID-19 customer assistance programs where applicable.
(14)	Capital ratios as of the end of Q2 2021 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.
(15)	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
**	Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 6: Average Balances, Net Interest Income and Net Interest Margin
		2021 Q2											2021 Q1											2020 Q2
(Dollars in millions, except as noted)		Average Balance				Interest Income/ Expense				Yield/Rate			Average Balance				Interest Income/ Expense				Yield/Rate			Average Balance				Interest Income/ Expense				Yield/Rate
Interest-earning assets:
Loans, including loans held for sale		$	249,280			$	5,753			9.23	%		$	246,675			$	5,854			9.49	%		$	254,402			$	5,820			9.15	%
Investment securities		100,071				370				1.48			98,296				391				1.59			81,095				482				2.38
Cash equivalents and other		40,778				16				0.16			43,601				16				0.15			42,648				16				0.15
Total interest-earning assets		$	390,129			$	6,139			6.29			$	388,572			$	6,261			6.45			$	378,145			$	6,318			6.68
Interest-bearing liabilities:
Interest-bearing deposits		$	273,476			$	237			0.35			$	273,358			$	269			0.39			$	261,256			$	611			0.94
Securitized debt obligations		10,890				28				1.03			12,240				32				1.05			16,432				56				1.37
Senior and subordinated notes		25,487				122				1.92			26,968				129				1.91			31,294				180				2.30
Other borrowings and liabilities		2,198				9				1.67			2,210				9				1.62			3,554				11				1.21
Total interest-bearing liabilities		$	312,051			$	396			0.50			$	314,776			$	439			0.56			$	312,536			$	858			1.10
Net interest income/spread						$	5,743			5.79							$	5,822			5.89							$	5,460			5.58
Impact of non-interest-bearing funding										0.10											0.10											0.20
Net interest margin										5.89	%										5.99	%										5.78	%
												Six Months Ended June 30,
													2021											2020
													Average Balance				Interest Income/ Expense				Yield/Rate			Average Balance				Interest Income/ Expense				Yield/Rate
(Dollars in millions, except as noted)
Interest-earning assets:
Loans, including loans held for sale													$	247,984			$	11,607			9.36	%		$	259,017			$	12,362			9.55	%
Investment securities													99,189				761				1.53			79,654				1,012				2.54
Cash equivalents and other													42,182				32				0.15			28,075				53				0.38
Total interest-earning assets													$	389,355			$	12,400			6.37			$	366,746			$	13,427			7.32
Interest-bearing liabilities:
Interest-bearing deposits													$	273,417			$	506			0.37			$	251,185			$	1,342			1.07
Securitized debt obligations													11,561				60				1.04			17,243				155				1.80
Senior and subordinated notes													26,223				251				1.92			31,318				419				2.67
Other borrowings and liabilities													2,205				18				1.65			3,667				26				1.42
Total interest-bearing liabilities													$	313,406			$	835			0.53			$	303,413			$	1,942			1.28
Net interest income/spread																	$	11,565			5.84							$	11,485			6.04
Impact of non-interest-bearing funding																					0.10											0.22
Net interest margin																					5.94	%										6.26	%

                                                                                                                                                                                                                

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 7: Loan Information and Performance Statistics
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020			2021				2020				2021 vs. 2020
(Dollars in millions, except as noted)		Q2				Q1				Q4				Q3				Q2				Q1			Q2
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card(1)		$	95,309			$	91,099			$	98,504			$	95,541			$	99,390			5	%		(4)	%		$	95,309			$	99,390			(4)	%
International card businesses(2)		5,708				8,028				8,452				8,100				7,920				(29)			(28)			5,708				7,920				(28)
Total credit card		101,017				99,127				106,956				103,641				107,310				2			(6)			101,017				107,310				(6)
Consumer banking:
Auto		71,713				67,059				65,762				65,394				63,319				7			13			71,713				63,319				13
Retail banking		3,046				3,143				3,126				3,294				3,393				(3)			(10)			3,046				3,393				(10)
Total consumer banking		74,759				70,202				68,888				68,688				66,712				6			12			74,759				66,712				12
Commercial banking:
Commercial and multifamily real estate(3)		29,616				30,008				30,681				31,197				30,953				(1)			(4)			29,616				30,953				(4)
Commercial and industrial		44,205				43,794				45,099				44,697				46,537				1			(5)			44,205				46,537				(5)
Total commercial banking		73,821				73,802				75,780				75,894				77,490				—			(5)			73,821				77,490				(5)
Total loans held for investment		249,597				243,131				251,624				248,223				251,512				3			(1)			249,597				251,512				(1)
Loans Held for Investment (Average)
Credit card:
Domestic credit card		$	91,535			$	92,594			$	95,453			$	97,306			$	100,996			(1)	%		(9)	%		$	92,062			$	107,354			(14)	%
International card businesses		8,139				7,940				8,108				8,061				7,752				3			5			8,040				8,408				(4)
Total credit card		99,674				100,534				103,561				105,367				108,748				(1)			(8)			100,102				115,762				(14)
Consumer banking:
Auto		69,543				66,185				65,590				64,476				61,798				5			13			67,873				61,401				11
Retail banking		3,162				3,049				3,218				3,346				3,053				4			4			3,106				2,860				9
Total consumer banking		72,705				69,234				68,808				67,822				64,851				5			12			70,979				64,261				10
Commercial banking:
Commercial and multifamily real estate		30,124				29,856				30,825				30,918				31,723				1			(5)			29,991				31,402				(4)
Commercial and industrial		43,960				44,313				44,495				45,404				48,036				(1)			(8)			44,135				46,699				(5)
Total commercial banking		74,084				74,169				75,320				76,322				79,759				—			(7)			74,126				78,101				(5)
Total average loans held for investment		$	246,463			$	243,937			$	247,689			$	249,511			$	253,358			1			(3)			$	245,207			$	258,124			(5)
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020			2021				2020				2021 vs. 2020
		Q2				Q1				Q4				Q3				Q2				Q1			Q2
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card			2.28	%			2.54	%			2.69	%			3.64	%			4.53	%		(26)	bps		(225)	bps			2.41	%			4.61	%		(220)	bps
International card businesses			2.41				2.30				1.86				2.89				3.47			11			(106)				2.36				4.11			(175)
Total credit card			2.29				2.52				2.63				3.58				4.46			(23)			(217)				2.41				4.57			(216)
Consumer banking:
Auto			(0.12)				0.47				0.47				0.23				1.16			(59)			(128)				0.17				1.33			(116)
Retail banking			1.41				1.68				1.88				1.38				1.78			(27)			(37)				1.54				2.05			(51)
Total consumer banking			(0.06)				0.52				0.53				0.28				1.19			(58)			(125)				0.23				1.36			(113)
Commercial banking:
Commercial and multifamily real estate			0.04				0.06				0.02				0.41				0.09			(2)			(5)				0.05				0.04			1
Commercial and industrial			(0.21)				0.11				0.74				0.45				0.78			(32)			(99)				(0.05)				0.87			(92)
Total commercial banking			(0.11)				0.09				0.45				0.43				0.51			(20)			(62)				(0.01)				0.54			(55)
Total net charge-offs			0.88				1.21				1.38				1.72				2.38			(33)			(150)				1.04				2.55			(151)
30+ Day Performing Delinquency Rates(4)
Credit card:
Domestic credit card			1.68	%			2.24	%			2.42	%			2.21	%			2.74	%		(56)	bps		(106)	bps			1.68	%			2.74	%		(106)	bps
International card businesses			2.89				2.51				2.61				2.15				2.71			38			18				2.89				2.71			18
Total credit card			1.75				2.26				2.44				2.20				2.74			(51)			(99)				1.75				2.74			(99)
Consumer banking:
Auto			3.26				3.12				4.78				3.76				3.28			14			(2)				3.26				3.28			(2)
Retail banking			0.79				1.02				1.32				0.83				0.89			(23)			(10)				0.79				0.89			(10)
Total consumer banking			3.16				3.03				4.62				3.62				3.16			13			—				3.16				3.16			—
Nonperforming Loans and Nonperforming Assets Rates(5)(6)
Credit card:
International card businesses			0.20	%			0.17	%			0.24	%			0.25	%			0.29	%		3	bps		(9)	bps			0.20	%			0.29	%		(9)	bps
Total credit card			0.01				0.01				0.02				0.02				0.02			—			(1)				0.01				0.02			(1)
Consumer banking:
Auto			0.29				0.29				0.45				0.36				0.41			—			(12)				0.29				0.41			(12)
Retail banking			1.75				1.16				0.96				0.77				0.70			59			105				1.75				0.70			105
Total consumer banking			0.35				0.33				0.47				0.38				0.43			2			(8)				0.35				0.43			(8)
Commercial banking:
Commercial and multifamily real estate			1.02				0.78				0.65				0.58				0.54			24			48				1.02				0.54			48
Commercial and industrial			1.03				1.02				1.00				1.31				1.06			1			(3)				1.03				1.06			(3)
Total commercial banking			1.03				0.92				0.86				1.01				0.85			11			18				1.03				0.85			18
Total nonperforming loans			0.41				0.38				0.40				0.42				0.38			3			3				0.41				0.38			3
Total nonperforming assets			0.43				0.40				0.41				0.44				0.39			3			4				0.43				0.39			4

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
		Three Months Ended June 30, 2021
		Credit Card												Consumer Banking
(Dollars in millions)		Domestic Card				International Card Businesses				Total Credit Card				Auto				Retail Banking				Total Consumer Banking				Commercial Banking				Total
Allowance for credit losses:
Balance as of March 31, 2021		$	9,572			$	500			$	10,072			$	2,405			$	93			$	2,498			$	1,447			$	14,017
Charge-offs		(874)				(93)				(967)				(245)				(15)				(260)				(8)				(1,235)
Recoveries		352				44				396				267				4				271				27				694
Net recoveries (charge-offs)		(522)				(49)				(571)				22				(11)				11				19				(541)
Provision (benefit) for credit losses		(561)				(74)				(635)				(305)				(1)				(306)				(196)				(1,137)
Allowance build (release) for credit losses		(1,083)				(123)				(1,206)				(283)				(12)				(295)				(177)				(1,678)
Other changes(7)		—				7				7				—				—				—				—				7
Balance as of June 30, 2021		8,489				384				8,873				2,122				81				2,203				1,270				12,346
Reserve for unfunded lending commitments:
Balance as of March 31, 2021		—				—				—				—				—				—				187				187
Provision (benefit) for losses on unfunded lending commitments		—				—				—				—				—				—				(23)				(23)
Balance as of June 30, 2021		—				—				—				—				—				—				164				164
Combined allowance and reserve as of June 30, 2021		$	8,489			$	384			$	8,873			$	2,122			$	81			$	2,203			$	1,434			$	12,510
		Six Months Ended June 30, 2021
		Credit Card												Consumer Banking
(Dollars in millions)		Domestic Card				International Card Businesses				Total Credit Card				Auto				Retail Banking				Total Consumer Banking				Commercial Banking				Total
Allowance for credit losses:
Balance as of December 31, 2020		$	10,650			$	541			$	11,191			$	2,615			$	100			$	2,715			$	1,658			$	15,564
Charge-offs		(1,778)				(182)				(1,960)				(569)				(33)				(602)				(27)				(2,589)
Recoveries		669				87				756				513				9				522				30				1,308
Net recoveries (charge-offs)		(1,109)				(95)				(1,204)				(56)				(24)				(80)				3				(1,281)
Provision (benefit) for credit losses		(1,052)				(75)				(1,127)				(437)				5				(432)				(391)				(1,950)
Allowance build (release) for credit losses		(2,161)				(170)				(2,331)				(493)				(19)				(512)				(388)				(3,231)
Other changes(7)		—				13				13				—				—				—				—				13
Balance as of June 30, 2021		8,489				384				8,873				2,122				81				2,203				1,270				12,346
Reserve for unfunded lending commitments:
Balance as of December 31, 2020		—				—				—				—				—				—				195				195
Provision (benefit) for losses on unfunded lending commitments		—				—				—				—				—				—				(31)				(31)
Balance as of June 30, 2021		—				—				—				—				—				—				164				164
Combined allowance and reserve as of June 30, 2021		$	8,489			$	384			$	8,873			$	2,122			$	81			$	2,203			$	1,434			$	12,510

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 9: Financial Summary—Business Segment Results
		Three Months Ended June 30, 2021																				Six Months Ended June 30, 2021
(Dollars in millions)		Credit Card				Consumer Banking				Commercial Banking(8)				Other(8)				Total				Credit Card				Consumer Banking				Commercial Banking(8)				Other(8)				Total
Net interest income (loss)		$	3,217			$	2,101			$	460			$	(35)			$	5,743			$	6,589			$	4,131			$	980			$	(135)			$	11,565
Non-interest income (loss)		1,253				144				257				(23)				1,631				2,282				285				497				(142)				2,922
Total net revenue (loss)		4,470				2,245				717				(58)				7,374				8,871				4,416				1,477				(277)				14,487
Provision (benefit) for credit losses		(635)				(306)				(219)				—				(1,160)				(1,127)				(432)				(422)				(2)				(1,983)
Non-interest expense		2,263				1,123				417				163				3,966				4,398				2,240				836				232				7,706
Income (loss) from continuing operations before income taxes		2,842				1,428				519				(221)				4,568				5,600				2,608				1,063				(507)				8,764
Income tax provision (benefit)		672				337				123				(101)				1,031				1,325				615				251				(291)				1,900
Income (loss) from continuing operations, net of tax		$	2,170			$	1,091			$	396			$	(120)			$	3,537			$	4,275			$	1,993			$	812			$	(216)			$	6,864
		Three Months Ended March 31, 2021
(Dollars in millions)		Credit Card				Consumer Banking				Commercial Banking(8)				Other(8)				Total
Net interest income (loss)		$	3,372			$	2,030			$	520			$	(100)			$	5,822
Non-interest income (loss)		1,029				141				240				(119)				1,291
Total net revenue (loss)		4,401				2,171				760				(219)				7,113
Provision (benefit) for credit losses		(492)				(126)				(203)				(2)				(823)
Non-interest expense		2,135				1,117				419				69				3,740
Income (loss) from continuing operations before income taxes		2,758				1,180				544				(286)				4,196
Income tax provision (benefit)		653				278				128				(190)				869
Income (loss) from continuing operations, net of tax		$	2,105			$	902			$	416			$	(96)			$	3,327
		Three Months Ended June 30, 2020																				Six Months Ended June 30, 2020
(Dollars in millions)		Credit Card				Consumer Banking				Commercial Banking(8)				Other(8)				Total				Credit Card				Consumer Banking				Commercial Banking(8)				Other(8)				Total
Net interest income (loss)		$	3,369			$	1,665			$	518			$	(92)			$	5,460			$	7,071			$	3,322			$	1,009			$	83			$	11,485
Non-interest income (loss)		845				97				180				(26)				1,096				1,756				223				418				(77)				2,320
Total net revenue (loss)		4,214				1,762				698				(118)				6,556				8,827				3,545				1,427				6				13,805
Provision (benefit) for credit losses		2,944				876				427				(1)				4,246				6,646				1,736				1,283				4				9,669
Non-interest expense		1,969				1,036				425				340				3,770				4,177				2,027				837				458				7,499
Loss from continuing operations before income taxes		(699)				(150)				(154)				(457)				(1,460)				(1,996)				(218)				(693)				(456)				(3,363)
Income tax benefit		(166)				(36)				(36)				(305)				(543)				(472)				(52)				(164)				(418)				(1,106)
Loss from continuing operations, net of tax		$	(533)			$	(114)			$	(118)			$	(152)			$	(917)			$	(1,524)			$	(166)			$	(529)			$	(38)			$	(2,257)

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 10: Financial & Statistical Summary—Credit Card Business
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020											2021 vs.
(Dollars in millions, except as noted)		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Credit Card
Earnings:
Net interest income		$	3,217			$	3,372			$	3,413			$	3,292			$	3,369			(5)	%		(5)	%		$	6,589			$	7,071			(7)	%
Non-interest income		1,253				1,029				1,054				1,013				845				22			48			2,282				1,756				30
Total net revenue		4,470				4,401				4,467				4,305				4,214				2			6			8,871				8,827				—
Provision (benefit) for credit losses		(635)				(492)				231				450				2,944				29			**			(1,127)				6,646				**
Non-interest expense		2,263				2,135				2,311				2,003				1,969				6			15			4,398				4,177				5
Income (loss) from continuing operations before income taxes		2,842				2,758				1,925				1,852				(699)				3			**			5,600				(1,996)				**
Income tax provision (benefit)		672				653				454				438				(166)				3			**			1,325				(472)				**
Income (loss) from continuing operations, net of tax		$	2,170			$	2,105			$	1,471			$	1,414			$	(533)			3			**			$	4,275			$	(1,524)			**
Selected performance metrics:
Period-end loans held for investment(1)(2)		$	101,017			$	99,127			$	106,956			$	103,641			$	107,310			2			(6)			$	101,017			$	107,310			(6)
Average loans held for investment		99,674				100,534				103,561				105,367				108,748				(1)			(8)			100,102				115,762				(14)
Average yield on loans outstanding(9)		14.04		%		14.49		%		14.24		%		13.83		%		13.72		%		(45)	bps		32	bps		14.26		%		14.11		%		15	bps
Total net revenue margin(10)		17.59				17.17				16.92				16.34				15.50				42			209			17.38				15.25				213
Net charge-off rate		2.29				2.52				2.63				3.58				4.46				(23)			(217)			2.41				4.57				(216)
30+ day performing delinquency rate		1.75				2.26				2.44				2.20				2.74				(51)			(99)			1.75				2.74				(99)
30+ day delinquency rate		1.75				2.27				2.45				2.21				2.75				(52)			(100)			1.75				2.75				(100)
Nonperforming loan rate(5)		0.01				0.01				0.02				0.02				0.02				—			(1)			0.01				0.02				(1)
Purchase volume(11)		$	132,676			$	108,333			$	117,141			$	107,102			$	90,149			22	%		47	%		$	241,009			$	190,069			27	%
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020											2021 vs.
(Dollars in millions, except as noted)		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Domestic Card
Earnings:
Net interest income		$	2,944			$	3,095			$	3,129			$	2,995			$	3,094			(5)	%		(5)	%		$	6,039			$	6,475			(7)	%
Non-interest income		1,183				959				994				952				795				23			49			2,142				1,637				31
Total net revenue		4,127				4,054				4,123				3,947				3,889				2			6			8,181				8,112				1
Provision (benefit) for credit losses		(561)				(491)				231				378				2,906				14			**			(1,052)				6,370				**
Non-interest expense		2,034				1,923				2,063				1,802				1,776				6			15			3,957				3,760				5
Income (loss) from continuing operations before income taxes		2,654				2,622				1,829				1,767				(793)				1			**			5,276				(2,018)				**
Income tax provision (benefit)		626				619				433				419				(188)				1			**			1,245				(478)				**
Income (loss) from continuing operations, net of tax		$	2,028			$	2,003			$	1,396			$	1,348			$	(605)			1			**			$	4,031			$	(1,540)			**
Selected performance metrics:
Period-end loans held for investment(1)		$	95,309			$	91,099			$	98,504			$	95,541			$	99,390			5			(4)			$	95,309			$	99,390			(4)
Average loans held for investment		91,535				92,594				95,453				97,306				100,996				(1)			(9)			92,062				107,354				(14)
Average yield on loans outstanding(9)		13.91		%		14.34		%		14.07		%		13.57		%		13.52		%		(43)	bps		39	bps		14.13		%		13.93		%		20	bps
Total net revenue margin(10)		17.66				17.15				16.91				16.22				15.40				51			226			17.40				15.11				229
Net charge-off rate		2.28				2.54				2.69				3.64				4.53				(26)			(225)			2.41				4.61				(220)
30+ day performing delinquency rate		1.68				2.24				2.42				2.21				2.74				(56)			(106)			1.68				2.74				(106)
Purchase volume(11)		$	122,456			$	99,960			$	107,572			$	98,107			$	82,860			23	%		48	%		$	222,416			$	175,108			27	%
Refreshed FICO scores:(12)
Greater than 660		72		%		70		%		69		%		69		%		67		%		2			5			72		%		67		%		5
660 or below		28				30				31				31				33				(2)			(5)			28				33				(5)
Total		100		%		100		%		100		%		100		%		100		%								100		%		100		%

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 11: Financial & Statistical Summary—Consumer Banking Business
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020											2021 vs.
(Dollars in millions, except as noted)		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Consumer Banking
Earnings:
Net interest income		$	2,101			$	2,030			$	2,012			$	1,904			$	1,665			3	%		26	%		$	4,131			$	3,322			24	%
Non-interest income		144				141				136				107				97				2			48			285				223				28
Total net revenue		2,245				2,171				2,148				2,011				1,762				3			27			4,416				3,545				25
Provision (benefit) for credit losses		(306)				(126)				60				(43)				876				143			**			(432)				1,736				**
Non-interest expense		1,123				1,117				1,121				1,011				1,036				1			8			2,240				2,027				11
Income (loss) from continuing operations before income taxes		1,428				1,180				967				1,043				(150)				21			**			2,608				(218)				**
Income tax provision (benefit)		337				278				230				247				(36)				21			**			615				(52)				**
Income (loss) from continuing operations, net of tax		$	1,091			$	902			$	737			$	796			$	(114)			21			**			$	1,993			$	(166)			**
Selected performance metrics:
Period-end loans held for investment		$	74,759			$	70,202			$	68,888			$	68,688			$	66,712			6			12			$	74,759			$	66,712			12
Average loans held for investment		72,705				69,234				68,808				67,822				64,851				5			12			70,979				64,261				10
Average yield on loans held for investment(9)		7.99		%		8.16		%		8.28		%		8.36		%		8.41		%		(17)	bps		(42)	bps		8.07		%		8.44		%		(37)	bps
Auto loan originations		$	12,959			$	8,833			$	7,371			$	8,979			$	8,292			47	%		56	%		$	21,792			$	15,931			37	%
Period-end deposits		251,155				254,001				249,815				249,684				246,804				(1)			2			251,155				246,804				2
Average deposits		252,488				249,499				249,419				248,418				232,293				1			9			251,002				223,682				12
Average deposits interest rate		0.31		%		0.36		%		0.47		%		0.66		%		0.89		%		(5)	bps		(58)	bps		0.33		%		0.97		%		(64)	bps
Net charge-off (recovery) rate		(0.06)				0.52				0.53				0.28				1.19				(58)			(125)			0.23				1.36				(113)
30+ day performing delinquency rate		3.16				3.03				4.62				3.62				3.16				13			—			3.16				3.16				—
30+ day delinquency rate		3.40				3.25				5.00				3.90				3.48				15			(8)			3.40				3.48				(8)
Nonperforming loan rate(5)		0.35				0.33				0.47				0.38				0.43				2			(8)			0.35				0.43				(8)
Nonperforming asset rate(6)		0.40				0.39				0.54				0.43				0.46				1			(6)			0.40				0.46				(6)
Auto—At origination FICO scores:(13)
Greater than 660		48		%		47		%		46		%		46		%		46		%		1	%		2	%		48		%		46		%		2	%
621 - 660		20				20				20				20				20				—			—			20				20				—
620 or below		32				33				34				34				34				(1)			(2)			32				34				(2)
Total		100		%		100		%		100		%		100		%		100		%								100		%		100		%

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 12: Financial & Statistical Summary—Commercial Banking Business
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020											2021 vs.
(Dollars in millions, except as noted)		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Commercial Banking
Earnings:
Net interest income		$	460			$	520			$	522			$	517			$	518			(12)	%		(11)	%		$	980			$	1,009			(3)	%
Non-interest income		257				240				268				237				180				7			43			497				418				19
Total net revenue(8)		717				760				790				754				698				(6)			3			1,477				1,427				4
Provision (benefit) for credit losses		(219)				(203)				(28)				(74)				427				8			**			(422)				1,283				**
Non-interest expense		417				419				445				424				425				—			(2)			836				837				—
Income (loss) from continuing operations before income taxes		519				544				373				404				(154)				(5)			**			1,063				(693)				**
Income tax provision (benefit)		123				128				88				95				(36)				(4)			**			251				(164)				**
Income (loss) from continuing operations, net of tax		$	396			$	416			$	285			$	309			$	(118)			(5)			**			$	812			$	(529)			**
Selected performance metrics:
Period-end loans held for investment(3)		$	73,821			$	73,802			$	75,780			$	75,894			$	77,490			—			(5)			$	73,821			$	77,490			(5)
Average loans held for investment		74,084				74,169				75,320				76,322				79,759				—			(7)			74,126				78,101				(5)
Average yield on loans held for investment(8)(9)		2.72		%		2.76		%		2.83		%		2.82		%		3.00		%		(4)	bps		(28)	bps		2.74		%		3.43		%		(69)	bps
Period-end deposits		$	42,973			$	41,552			$	39,590			$	36,783			$	35,669			3	%		20	%		$	42,973			$	35,669			20	%
Average deposits		42,311				40,107				38,676				36,278				34,635				5			22			41,215				33,437				23
Average deposits interest rate		0.14		%		0.18		%		0.23		%		0.25		%		0.30		%		(4)	bps		(16)	bps		0.16		%		0.58		%		(42)	bps
Net charge-off (recovery) rate		(0.11)				0.09				0.45				0.43				0.51				(20)			(62)			(0.01)				0.54				(55)
Nonperforming loan rate(5)		1.03				0.92				0.86				1.01				0.85				11			18			1.03				0.85				18
Nonperforming asset rate(6)		1.03				0.92				0.86				1.01				0.85				11			18			1.03				0.85				18
Risk category:(14)
Noncriticized		$	67,481			$	66,299			$	67,964			$	68,533			$	70,881			2	%		(5)	%		$	67,481			$	70,881			(5)	%
Criticized performing		5,581				6,821				7,166				6,593				5,949				(18)			(6)			5,581				5,949				(6)
Criticized nonperforming		759				682				650				768				660				11			15			759				660				15
Total commercial banking loans		$	73,821			$	73,802			$	75,780			$	75,894			$	77,490			—			(5)			$	73,821			$	77,490			(5)
Risk category as a percentage of period-end loans held for investment:(14)
Noncriticized		91.4		%		89.9		%		89.6		%		90.3		%		91.4		%		150	bps		—			91.4		%		91.4		%		—
Criticized performing		7.6				9.2				9.5				8.7				7.7				(160)			(10)	bps		7.6				7.7				(10)	bps
Criticized nonperforming		1.0				0.9				0.9				1.0				0.9				10			10			1.0				0.9				10
Total commercial banking loans		100.0		%		100.0		%		100.0		%		100.0		%		100.0		%								100.0		%		100.0		%

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 13: Financial & Statistical Summary—Other and Total
																						2021 Q2 vs.						Six Months Ended June 30,
		2021				2021				2020				2020				2020				2021			2020											2021 vs.
(Dollars in millions)		Q2				Q1				Q4				Q3				Q2				Q1			Q2			2021				2020				2020
Other
Earnings:
Net interest income (loss)		$	(35)			$	(100)			$	(74)			$	(158)			$	(92)			(65)	%		(62)	%		$	(135)			$	83			**
Non-interest income (loss)		(23)				(119)				6				469				(26)				(81)			(12)			(142)				(77)				84	%
Total net revenue (loss)(8)		(58)				(219)				(68)				311				(118)				(74)			(51)			(277)				6				**
Provision (benefit) for credit losses		—				(2)				1				(2)				(1)				**			**			(2)				4				**
Non-interest expense(15)		163				69				132				110				340				136			(52)			232				458				(49)
Income (loss) from continuing operations before income taxes		(221)				(286)				(201)				203				(457)				(23)			(52)			(507)				(456)				11
Income tax provision (benefit)		(101)				(190)				(276)				316				(305)				(47)			(67)			(291)				(418)				(30)
Income (loss) from continuing operations, net of tax		$	(120)			$	(96)			$	75			$	(113)			$	(152)			25			(21)			$	(216)			$	(38)			**
Selected performance metrics:
Period-end deposits		$	12,180			$	14,775			$	16,037			$	19,258			$	21,765			(18)			(44)			$	12,180			$	21,765			(44)
Average deposits		13,418				15,450				16,418				20,820				21,416				(13)			(37)			14,428				19,379				(26)
Total
Earnings:
Net interest income		$	5,743			$	5,822			$	5,873			$	5,555			$	5,460			(1)	%		5	%		$	11,565			$	11,485			1	%
Non-interest income		1,631				1,291				1,464				1,826				1,096				26			49			2,922				2,320				26
Total net revenue		7,374				7,113				7,337				7,381				6,556				4			12			14,487				13,805				5
Provision (benefit) for credit losses		(1,160)				(823)				264				331				4,246				41			**			(1,983)				9,669				**
Non-interest expense		3,966				3,740				4,009				3,548				3,770				6			5			7,706				7,499				3
Income (loss) from continuing operations before income taxes		4,568				4,196				3,064				3,502				(1,460)				9			**			8,764				(3,363)				**
Income tax provision (benefit)		1,031				869				496				1,096				(543)				19			**			1,900				(1,106)				**
Income (loss) from continuing operations, net of tax		$	3,537			$	3,327			$	2,568			$	2,406			$	(917)			6			**			$	6,864			$	(2,257)			**
Selected performance metrics:
Period-end loans held for investment		$	249,597			$	243,131			$	251,624			$	248,223			$	251,512			3			(1)			$	249,597			$	251,512			(1)
Average loans held for investment		246,463				243,937				247,689				249,511				253,358				1			(3)			245,207				258,124				(5)
Period-end deposits		306,308				310,328				305,442				305,725				304,238				(1)			1			306,308				304,238				1
Average deposits		308,217				305,056				304,513				305,516				288,344				1			7			306,645				276,498				11

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)
(1)	We reclassified $2.1 billion in partnership loans to held for sale as of September 30, 2020.
(2)	We reclassified $2.6 billion in international partnership loans to held for sale as of June 30, 2021.
(3)	We reclassified $1.5 billion in commercial loans to held for sale as of June 30, 2021.
(4)	Metrics include the impact of COVID-19 customer assistance programs where applicable.
(5)	Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.
(6)	Nonperforming assets consist of nonperforming loans, repossessed assets and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, repossessed assets and other foreclosed assets.
(7)	Represents foreign currency translation adjustments.
(8)	Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.
(9)	Average yield is calculated based on annualized interest income for the period divided by average loans during the period. Annualized interest income does not include any allocations, such as funds transfer pricing.
(10)	Total net revenue margin is calculated based on total net revenue for the period divided by average loans outstanding during the period.
(11)	Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.
(12)	Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.
(13)	Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.
(14)	Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
(15)	Includes charges incurred as a result of restructuring activities.
**	Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures(1)
		Basel III Standardized Approach
(Dollars in millions, except as noted)		June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020				June 30, 2020
Regulatory Capital Metrics
Common equity excluding AOCI		$	58,969			$	57,607			$	55,299			$	52,839			$	50,614
Adjustments:
AOCI, net of tax(2)		(5)				(13)				(29)				(122)				(145)
Goodwill, net of related deferred tax liabilities		(14,440)				(14,444)				(14,448)				(14,448)				(14,449)
Intangible assets, net of related deferred tax liabilities		(76)				(81)				(86)				(95)				(135)
Other		(16)				(18)				—				—				—
Common equity Tier 1 capital		$	44,432			$	43,051			$	40,736			$	38,174			$	35,885
Tier 1 capital		$	50,920			$	47,898			$	45,583			$	43,505			$	41,094
Total capital(3)		57,932				54,780				52,788				50,955				48,508
Risk-weighted assets		307,372				295,209				297,903				293,852				290,222
Adjusted average assets(4)		411,032				408,596				406,762				409,602				398,062
Capital Ratios
Common equity Tier 1 capital(5)		14.5		%		14.6		%		13.7		%		13.0		%		12.4		%
Tier 1 capital(6)		16.6				16.2				15.3				14.8				14.2
Total capital(7)		18.8				18.6				17.7				17.3				16.7
Tier 1 leverage(4)		12.4				11.7				11.2				10.6				10.3
Tangible common equity ("TCE")(8)		10.6				10.1				10.0				9.4				8.8

 

Reconciliation of Non-GAAP Measures
The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results. These adjusted results provide alternate measurements of our operating performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.
		2021								2020								Six Months Ended June 30,
(Dollars in millions, except per share data and as noted)		Q2				Q1				Q2				Q1				2021				2020
Adjusted diluted EPS:
Net income (loss) available to common stockholders (GAAP)		$	3,446			$	3,236			$	(1,009)			$	(1,420)			$	6,682			$	(2,429)
Legal reserve activity, including insurance recoveries		55				—				265				45				55				310
Cybersecurity Incident expenses, net of insurance		—				—				11				4				—				15
Adjusted net income (loss) available to common stockholders before income tax impacts (non-GAAP)		3,501				3,236				(733)				(1,371)				6,737				(2,104)
Income tax impacts		(13)				—				(3)				(12)				(13)				(15)
Adjusted net income (loss) available to common stockholders (non-GAAP)		$	3,488			$	3,236			$	(736)			$	(1,383)			$	6,724			$	(2,119)
Diluted weighted-average common shares outstanding (in millions) (GAAP)		452.3				460.1				456.7				457.6				456.2				457.1
Diluted EPS (GAAP)		$	7.62			$	7.03			$	(2.21)			$	(3.10)			$	14.65			$	(5.31)
Impact of adjustments noted above		0.09				—				0.60				0.08				0.09				0.67
Adjusted diluted EPS (non-GAAP)		$	7.71			$	7.03			$	(1.61)			$	(3.02)			$	14.74			$	(4.64)
Adjusted efficiency ratio:
Non-interest expense (GAAP)		$	3,966			$	3,740			$	3,770			$	3,729			$	7,706			$	7,499
Legal reserve activity, including insurance recoveries		(55)				—				(265)				(45)				(55)				(310)
Cybersecurity Incident expenses, net of insurance		—				—				(11)				(4)				—				(15)
Adjusted non-interest expense (non-GAAP)		$	3,911			$	3,740			$	3,494			$	3,680			$	7,651			$	7,174
Total net revenue (GAAP)		$	7,374			$	7,113			$	6,556			$	7,249			$	14,487			$	13,805
Efficiency ratio (GAAP)		53.78		%		52.58		%		57.50		%		51.44		%		53.19		%		54.32		%
Impact of adjustments noted above		(74)		bps		—		bps		(421)		bps		(67)		bps		(38)		bps		(235)		bps
Adjusted efficiency ratio (non-GAAP)		53.04		%		52.58		%		53.29		%		50.77		%		52.81		%		51.97		%
Adjusted operating efficiency ratio:
Operating expense (GAAP)		$	3,346			$	3,239			$	3,497			$	3,238			$	6,585			$	6,735
Legal reserve activity, including insurance recoveries		(55)				—				(265)				(45)				(55)				(310)
Cybersecurity Incident expenses, net of insurance		—				—				(11)				(4)				—				(15)
Adjusted operating expense (non-GAAP)		$	3,291			$	3,239			$	3,221			$	3,189			$	6,530			$	6,410
Total net revenue (GAAP)		$	7,374			$	7,113			$	6,556			$	7,249			$	14,487			$	13,805
Operating efficiency ratio (GAAP)		45.38		%		45.54		%		53.34		%		44.67		%		45.45		%		48.79		%
Impact of adjustments noted above		(75)		bps		—		bps		(421)		bps		(68)		bps		(38)		bps		(236)		bps
Adjusted operating efficiency ratio (non-GAAP)		44.63		%		45.54		%		49.13		%		43.99		%		45.07		%		46.43		%

 

Reconciliation of Non-GAAP Measures
The following non-GAAP measures consist of TCE, tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly-titled measures reported by other companies. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.
		2021				2021				2020				2020				2020
(Dollars in millions)		Q2				Q1				Q4				Q3				Q2
Tangible Common Equity (Period-End)
Stockholders' equity		$	64,624			$	61,188			$	60,204			$	58,424			$	56,045
Goodwill and intangible assets(9)		(14,774)				(14,789)				(14,809)				(14,825)				(14,869)
Noncumulative perpetual preferred stock		(6,488)				(4,847)				(4,847)				(5,330)				(5,209)
Tangible common equity		$	43,362			$	41,552			$	40,548			$	38,269			$	35,967
Tangible Common Equity (Average)
Stockholders' equity		$	62,376			$	60,623			$	59,389			$	57,223			$	57,623
Goodwill and intangible assets(9)		(14,788)				(14,807)				(14,824)				(14,867)				(14,880)
Noncumulative perpetual preferred stock		(5,491)				(4,847)				(5,168)				(5,228)				(5,209)
Tangible common equity		$	42,097			$	40,969			$	39,397			$	37,128			$	37,534
Tangible Assets (Period-End)
Total assets		$	423,420			$	425,175			$	421,602			$	421,883			$	421,296
Goodwill and intangible assets(9)		(14,774)				(14,789)				(14,809)				(14,825)				(14,869)
Tangible assets		$	408,646			$	410,386			$	406,793			$	407,058			$	406,427
Tangible Assets (Average)
Total assets		$	424,099			$	421,808			$	420,011			$	422,854			$	411,075
Goodwill and intangible assets(9)		(14,788)				(14,807)				(14,824)				(14,867)				(14,880)
Tangible assets		$	409,311			$	407,001			$	405,187			$	407,987			$	396,195

__________
(1)	Regulatory capital metrics and capital ratios as of June 30, 2021 are preliminary and therefore subject to change.
(2)	Excludes certain components of AOCI as permitted under the Tailoring Rules.
(3)	Total capital equals the sum of Tier 1 capital and Tier 2 capital.
(4)	Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that are deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.
(5)	Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.
(6)	Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(7)	Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.
(8)	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
(9)	Includes impact of related deferred taxes.

 

 

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SOURCE Capital One Financial Corporation

FAQ

What was Capital One's net income in Q2 2021?

Capital One reported a net income of $3.5 billion for Q2 2021.

How much was the diluted earnings per share for Capital One in Q2 2021?

The diluted earnings per share for Capital One in Q2 2021 was $7.62.

What is Capital One's Common Equity Tier 1 capital ratio as of June 30, 2021?

Capital One's Common Equity Tier 1 capital ratio was 14.5% as of June 30, 2021.

How did Capital One's total net revenue change in Q2 2021?

Total net revenue increased by 4% to $7.4 billion in Q2 2021 compared to the previous quarter.

What was the status of Capital One's provisioning for credit losses in Q2 2021?

In Q2 2021, Capital One experienced a benefit from credit losses, decreasing provisions by $337 million.