Capital One Reports Third Quarter 2022 Net Income of $1.7 billion, or $4.20 per share

Rhea-AI Summary

Capital One Financial Corporation (NYSE: COF) reported a net income of $1.7 billion, or $4.20 per diluted share, for Q3 2022, a decline from $2.0 billion in Q2 2022 and $3.1 billion in Q3 2021. Total net revenue rose by 7% to $8.8 billion, while non-interest expenses increased by 8% to $4.9 billion. The provision for credit losses rose by $584 million to $1.7 billion, with net charge-offs at $931 million. loans held for investment increased by 3% to $303.9 billion. Overall, the company maintains strong market positioning with a net interest margin of 6.80% and a Tier 1 capital ratio of 12.2%.

Positive

• Total net revenue increased 7% to $8.8 billion.
• Pre-provision earnings rose 6% to $3.9 billion.
• Average loans held for investment increased 5% to $300.2 billion.
• Net interest margin rose by 26 basis points to 6.80%.
• Period-end total deposits increased 3% to $317.2 billion.

Negative

• Net income decreased to $1.7 billion from $2.0 billion in Q2 2022 and $3.1 billion in Q3 2021.
• Non-interest expenses increased by 8%, with an 11% rise in operating expenses.
• Provision for credit losses increased by $584 million to $1.7 billion.

MCLEAN, Va., Oct. 27, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2022 of $1.7 billion, or $4.20 per diluted common share, compared with net income of $2.0 billion, or $4.96 per diluted common share in the second quarter of 2022, and with net income of $3.1 billion, or $6.78 per diluted common share in the third quarter of 2021.

"We delivered strong growth and revenue in the third quarter, and we continue to see opportunities to lean into marketing and resilient asset growth that can deliver sustained revenue annuities," said Richard D. Fairbank, Founder, Chairman, and Chief Executive Officer. "We're in a strong position to deliver compelling long-term shareholder value as modern digital technology continues to transform banking."

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

Third Quarter 2022 Income Statement Summary:

• Total net revenue increased 7 percent to $8.8 billion.
• Total non-interest expense increased 8 percent to $4.9 billion:
• 2 percent decrease in marketing.
• 11 percent increase in operating expenses.
• Pre-provision earnings increased 6 percent to $3.9 billion.⁽¹⁾
• Provision for credit losses increased $584 million to $1.7 billion:
• Net charge-offs of $931 million.
• $734 million loan reserve build.
• Net interest margin of 6.80 percent, an increase of 26 basis points.
• Efficiency ratio of 56.21 percent.
• Operating efficiency ratio of 45.10 percent.

Third Quarter 2022 Balance Sheet Summary:

• Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.2 percent at September 30, 2022.
• Period-end loans held for investment in the quarter increased $7.6 billion, or 3 percent, to $303.9 billion.
• Credit Card period-end loans increased $6.0 billion, or 5 percent, to $126.9 billion.
• Domestic Card period-end loans increased $6.3 billion, or 5 percent, to $121.3 billion.
• Consumer Banking period-end loans decreased $332 million, or less than 1 percent, to $81.2 billion.
• Auto period-end loans decreased $346 million, or less than 1 percent, to $79.6 billion.
• Commercial Banking period-end loans increased $1.9 billion, or 2 percent, to $95.8 billion.
• Average loans held for investment in the quarter increased $14.1 billion, or 5 percent, to $300.2 billion.
• Credit Card average loans increased $7.5 billion, or 6 percent, to $123.4 billion.
• Domestic Card average loans increased $7.5 billion, or 7 percent, to $117.5 billion.
• Consumer Banking average loans increased $358 million, or less than 1 percent, to $81.3 billion.
• Auto average loans increased $428 million, or 1 percent, to $79.7 billion.
• Commercial Banking average loans increased $6.2 billion, or 7 percent, to $95.5 billion.
• Period-end total deposits increased $9.3 billion, or 3 percent, to $317.2 billion, while average deposits increased $6.0 billion, or 2 percent, to $311.9 billion.
• Interest-bearing deposits rate paid increased 56 basis points to 1.00 percent.

 

(1)

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

 

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on October 27, 2022 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through November 10, 2022 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2021.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company which, along with its subsidiaries, had $317.2 billion in deposits and $444.2 billion in total assets as of September 30, 2022. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

 

			Exhibit 99.2
Capital One Financial Corporation Financial Supplement(1)(2) Third Quarter 2022 Table of Contents
Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	6
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	8
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	9
	Table 7:	Loan Information and Performance Statistics	10
	Table 8:	Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity	12
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	13
	Table 10:	Financial & Statistical Summary—Credit Card Business	14
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	16
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	17
	Table 13:	Financial & Statistical Summary—Other and Total	18
Other
	Table 14:	Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)	19
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	20

__________

(1)

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

(2)

This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. ("GAAP"), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 1: Financial Summary—Consolidated
												2022 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except per share data and as noted)		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
Income Statement
Net interest income		$      7,003		$      6,517		$      6,397		$      6,450		$      6,156		7 %		14 %		$    19,917		$    17,721		12 %
Non-interest income		1,802		1,715		1,776		1,668		1,674		5		8		5,293		4,596		15
Total net revenue(1)		8,805		8,232		8,173		8,118		7,830		7		12		25,210		22,317		13
Provision (benefit) for credit losses		1,669		1,085		677		381		(342)		54		**		3,431		(2,325)		**
Non-interest expense:
Marketing		978		1,003		918		999		751		(2)		30		2,899		1,872		55
Operating expense		3,971		3,580		3,633		3,679		3,435		11		16		11,184		10,020		12
Total non-interest expense		4,949		4,583		4,551		4,678		4,186		8		18		14,083		11,892		18
Income from continuing operations before income taxes		2,187		2,564		2,945		3,059		3,986		(15)		(45)		7,696		12,750		(40)
Income tax provision		493		533		542		633		882		(8)		(44)		1,568		2,782		(44)
Income from continuing operations, net of tax		1,694		2,031		2,403		2,426		3,104		(17)		(45)		6,128		9,968		(39)
Income (loss) from discontinued operations, net of tax		—		—		—		(1)		—		—		—		—		(3)		**
Net income		1,694		2,031		2,403		2,425		3,104		(17)		(45)		6,128		9,965		(39)
Dividends and undistributed earnings allocated to participating securities(2)		(21)		(25)		(28)		(21)		(26)		(16)		(19)		(74)		(84)		(12)
Preferred stock dividends		(57)		(57)		(57)		(74)		(79)		—		(28)		(171)		(200)		(15)
Issuance cost for redeemed preferred stock(3)		—		—		—		(34)		(12)		—		**		—		(12)		**
Net income available to common stockholders		$      1,616		$      1,949		$      2,318		$      2,296		$      2,987		(17)		(46)		$      5,883		$      9,669		(39)
Common Share Statistics
Basic earnings per common share:(2)
Net income from continuing operations		$       4.21		$       4.98		$       5.65		$       5.43		$       6.81		(15) %		(38) %		$      14.90		$      21.53		(31) %
Income (loss) from discontinued operations		—		—		—		—		—		—		—		—		(0.01)		**
Net income per basic common share		$       4.21		$       4.98		$       5.65		$       5.43		$       6.81		(15)		(38)		$      14.90		$      21.52		(31)
Diluted earnings per common share:(2)
Net income from continuing operations		$       4.20		$       4.96		$       5.62		$       5.41		$       6.78		(15) %		(38) %		$      14.84		$      21.45		(31) %
Income (loss) from discontinued operations		—		—		—		—		—		—		—		—		(0.01)		**
Net income per diluted common share		$       4.20		$       4.96		$       5.62		$       5.41		$       6.78		(15)		(38)		$      14.84		$      21.44		(31)
Weighted-average common shares outstanding (in millions):
Basic		383.4		391.2		410.4		422.5		438.8		(2) %		(13) %		394.9		449.2		(12) %
Diluted		384.6		392.6		412.2		424.3		440.5		(2)		(13)		396.4		450.9		(12)
Common shares outstanding (period-end, in millions)		382.0		383.8		399.0		413.9		430.4		—		(11)		382.0		430.4		(11)
Dividends declared and paid per common share		$       0.60		$       0.60		$       0.60		$       0.60		$       1.20		—		(50)		$       1.80		$       2.00		(10)
Tangible book value per common share (period-end)(4)		81.38		87.84		91.77		99.74		99.60		(7)		(18)		81.38		99.60		(18)
												2022 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions)		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
Balance Sheet (Period-End)
Loans held for investment		$  303,943		$  296,384		$  280,466		$  277,340		$  261,390		3 %		16 %		$  303,943		$  261,390		16 %
Interest-earning assets		415,262		406,565		398,241		397,341		387,208		2		7		415,262		387,208		7
Total assets		444,232		440,288		434,195		432,381		425,377		1		4		444,232		425,377		4
Interest-bearing deposits		282,802		270,881		275,648		272,937		269,134		4		5		282,802		269,134		5
Total deposits		317,193		307,885		313,429		310,980		305,938		3		4		317,193		305,938		4
Borrowings		54,607		58,938		45,358		43,086		37,501		(7)		46		54,607		37,501		46
Common equity		46,015		48,564		51,499		56,184		57,632		(5)		(20)		46,015		57,632		(20)
Total stockholders' equity		50,861		53,410		56,345		61,029		63,544		(5)		(20)		50,861		63,544		(20)
Balance Sheet (Average Balances)
Loans held for investment		$  300,186		$  286,110		$  275,342		$  267,159		$  253,101		5 %		19 %		$  287,304		$  247,867		16 %
Interest-earning assets		412,171		398,934		394,082		390,868		387,766		3		6		401,793		388,820		3
Total assets		447,088		435,327		430,372		427,845		424,506		3		5		437,523		423,457		3
Interest-bearing deposits		275,900		268,104		271,823		269,951		269,278		3		2		271,957		272,022		—
Total deposits		311,928		305,954		309,597		307,272		305,035		2		2		309,168		306,102		1
Borrowings		58,628		53,208		42,277		39,943		37,464		10		56		51,431		38,134		35
Common equity		49,696		49,319		54,591		56,946		58,230		1		(15)		51,184		56,972		(10)
Total stockholders' equity		54,541		54,165		59,437		62,498		64,682		1		(16)		56,030		62,575		(10)

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 2: Selected Metrics—Consolidated
												2022 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
Performance Metrics
Net interest income growth (period over period)		7 %		2 %		(1) %		5 %		7 %		**		**		12 %		4 %		**
Non-interest income growth (period over period)		5		(3)		6		—		3		**		**		15		11		**
Total net revenue growth (period over period)		7		1		1		4		6		**		**		13		5		**
Total net revenue margin(5)		8.55		8.25		8.30		8.31		8.08		30 bps		47 bps		8.37		7.65		72 bps
Net interest margin(6)		6.80		6.54		6.49		6.60		6.35		26		45		6.61		6.08		53
Return on average assets		1.52		1.87		2.23		2.27		2.92		(35)		(140)		1.87		3.14		(127)
Return on average tangible assets(7)		1.57		1.93		2.31		2.35		3.03		(36)		(146)		1.93		3.25		(132)
Return on average common equity(8)		13.01		15.81		16.98		16.13		20.52		(3) %		(8) %		15.33		22.64		(7) %
Return on average tangible common equity(9)		18.59		22.63		23.36		21.82		27.50		(4)		(9)		21.62		30.57		(9)
Non-interest expense as a percentage of average loans held for investment		6.59		6.41		6.61		7.00		6.62		18 bps		(3) bps		6.54		6.40		14 bps
Efficiency ratio(10)		56.21		55.67		55.68		57.63		53.46		54		275		55.86		53.29		257
Operating efficiency ratio(11)		45.10		43.49		44.45		45.32		43.87		161		123		44.36		44.90		(54)
Effective income tax rate for continuing operations		22.5		20.8		18.4		20.7		22.1		170		40		20.4		21.8		(140)
Employees (period-end, in thousands)		55.1		53.6		51.5		50.8		50.8		3 %		8 %		55.1		50.8		8 %
Credit Quality Metrics
Allowance for credit losses		$    12,209		$    11,491		$    11,308		$    11,430		$    11,573		6 %		5 %		$    12,209		$    11,573		5 %
Allowance coverage ratio		4.02 %		3.88 %		4.03 %		4.12 %		4.43 %		14 bps		(41) bps		4.02 %		4.43 %		(41) bps
Net charge-offs		$         931		$         845		$         767		$         527		$         426		10 %		119 %		$      2,543		$      1,707		49 %
Net charge-off rate(12)		1.24 %		1.18 %		1.11 %		0.79 %		0.67 %		6 bps		57 bps		1.18 %		0.92 %		26 bps
30+ day performing delinquency rate		2.58		2.36		2.08		2.25		1.97		22		61		2.58		1.97		61
30+ day delinquency rate		2.78		2.54		2.21		2.41		2.13		24		65		2.78		2.13		65
Capital Ratios(13)
Common equity Tier 1 capital		12.2 %		12.1 %		12.7 %		13.1 %		13.8 %		10 bps		(160) bps		12.2 %		13.8 %		(160) bps
Tier 1 capital		13.6		13.5		14.1		14.5		15.7		10		(210)		13.6		15.7		(210)
Total capital		15.7		15.7		16.4		16.9		18.2		—		(250)		15.7		18.2		(250)
Tier 1 leverage		11.0		11.1		11.3		11.6		12.2		(10)		(120)		11.0		12.2		(120)
Tangible common equity ("TCE")(14)		7.2		7.9		8.7		9.9		10.4		(70)		(320)		7.2		10.4		(320)

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 3: Consolidated Statements of Income
												2022 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
Interest income:
Loans, including loans held for sale		$      7,578		$      6,605		$      6,367		$      6,451		$      6,205		15 %		22 %		$   20,550		$   17,812		15 %
Investment securities		499		435		402		368		317		15		57		1,336		1,078		24
Other		123		55		15		12		16		124		**		193		48		**
Total interest income		8,200		7,095		6,784		6,831		6,538		16		25		22,079		18,938		17
Interest expense:
Deposits		689		293		218		222		228		135		**		1,200		734		63
Securitized debt obligations		120		65		29		30		29		85		**		214		89		140
Senior and subordinated notes		319		194		131		121		116		64		175		644		367		75
Other borrowings		69		26		9		8		9		165		**		104		27		**
Total interest expense		1,197		578		387		381		382		107		**		2,162		1,217		78
Net interest income		7,003		6,517		6,397		6,450		6,156		7		14		19,917		17,721		12
Provision (benefit) for credit losses		1,669		1,085		677		381		(342)		54		**		3,431		(2,325)		**
Net interest income after provision for credit losses		5,334		5,432		5,720		6,069		6,498		(2)		(18)		16,486		20,046		(18)
Non-interest income:
Interchange fees, net		1,195		1,201		1,033		1,005		1,022		—		17		3,429		2,855		20
Service charges and other customer-related fees		415		415		400		435		407		—		2		1,230		1,143		8
Other		192		99		343		228		245		94		(22)		634		598		6
Total non-interest income		1,802		1,715		1,776		1,668		1,674		5		8		5,293		4,596		15
Non-interest expense:
Salaries and associate benefits		2,187		1,946		2,026		1,941		1,852		12		18		6,159		5,480		12
Occupancy and equipment		502		481		513		527		481		4		4		1,496		1,476		1
Marketing		978		1,003		918		999		751		(2)		30		2,899		1,872		55
Professional services		471		458		397		449		358		3		32		1,326		991		34
Communications and data processing		349		339		339		326		319		3		9		1,027		936		10
Amortization of intangibles		17		14		14		13		5		21		**		45		16		181
Other		445		342		344		423		420		30		6		1,131		1,121		1
Total non-interest expense		4,949		4,583		4,551		4,678		4,186		8		18		14,083		11,892		18
Income from continuing operations before income taxes		2,187		2,564		2,945		3,059		3,986		(15)		(45)		7,696		12,750		(40)
Income tax provision		493		533		542		633		882		(8)		(44)		1,568		2,782		(44)
Income from continuing operations, net of tax		1,694		2,031		2,403		2,426		3,104		(17)		(45)		6,128		9,968		(39)
Income (loss) from discontinued operations, net of tax		—		—		—		(1)		—		—		—		—		(3)		**
Net income		1,694		2,031		2,403		2,425		3,104		(17)		(45)		6,128		9,965		(39)
Dividends and undistributed earnings allocated to participating securities(2)		(21)		(25)		(28)		(21)		(26)		(16)		(19)		(74)		(84)		(12)
Preferred stock dividends		(57)		(57)		(57)		(74)		(79)		—		(28)		(171)		(200)		(15)
Issuance cost for redeemed preferred stock(3)		—		—		—		(34)		(12)		—		**		—		(12)		**
Net income available to common stockholders		$      1,616		$      1,949		$      2,318		$      2,296		$      2,987		(17)		(46)		$    5,883		$     9,669		(39)
												2022 Q3 vs.				Nine Months Ended September 30,
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
Basic earnings per common share:(2)
Net income from continuing operations		$        4.21		$        4.98		$        5.65		$        5.43		$        6.81		(15) %		(38) %		$    14.90		$     21.53		(31) %
Income (loss) from discontinued operations		—		—		—		—		—		—		—		—		(0.01)		**
Net income per basic common share		$        4.21		$        4.98		$        5.65		$        5.43		$        6.81		(15)		(38)		$    14.90		$     21.52		(31)
Diluted earnings per common share:(2)
Net income from continuing operations		$        4.20		$        4.96		$        5.62		$        5.41		$        6.78		(15)		(38)		$    14.84		$     21.45		(31)
Income (loss) from discontinued operations		—		—		—		—		—		—		—		—		(0.01)		**
Net income per diluted common share		$        4.20		$        4.96		$        5.62		$        5.41		$        6.78		(15)		(38)		$    14.84		$     21.44		(31)
Weighted-average common shares outstanding (in millions):
Basic common shares		383.4		391.2		410.4		422.5		438.8		(2)		(13)		394.9		449.2		(12)
Diluted common shares		384.6		392.6		412.2		424.3		440.5		(2)		(13)		396.4		450.9		(12)

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 4: Consolidated Balance Sheets
												2022 Q3 vs.
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3
(Dollars in millions)
Assets:
Cash and cash equivalents:
Cash and due from banks		$     3,716		$     4,825		$     5,107		$     4,164		$     5,444		(23) %		(32) %
Interest-bearing deposits and other short-term investments		21,176		16,728		21,697		17,582		21,180		27		—
Total cash and cash equivalents		24,892		21,553		26,804		21,746		26,624		15		(7)
Restricted cash for securitization investors		399		697		281		308		234		(43)		71
Securities available for sale		75,303		83,022		89,076		95,261		98,149		(9)		(23)
Loans held for investment:
Unsecuritized loans held for investment		277,576		271,339		257,505		252,468		238,475		2		16
Loans held in consolidated trusts		26,367		25,045		22,961		24,872		22,915		5		15
Total loans held for investment		303,943		296,384		280,466		277,340		261,390		3		16
Allowance for credit losses		(12,209)		(11,491)		(11,308)		(11,430)		(11,573)		6		5
Net loans held for investment		291,734		284,893		269,158		265,910		249,817		2		17
Loans held for sale		1,729		875		1,155		5,888		6,300		98		(73)
Premises and equipment, net		4,265		4,238		4,238		4,210		4,204		1		1
Interest receivable		1,853		1,611		1,479		1,460		1,418		15		31
Goodwill		14,771		14,778		14,784		14,782		14,652		—		1
Other assets		29,286		28,621		27,220		22,816		23,979		2		22
Total assets		$ 444,232		$ 440,288		$ 434,195		$ 432,381		$ 425,377		1		4
												2022 Q3 vs.
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3
(Dollars in millions)
Liabilities:
Interest payable		$        433		$        333		$        261		$        281		$        241		30 %		80 %
Deposits:
Non-interest-bearing deposits		34,391		37,004		37,781		38,043		36,804		(7)		(7)
Interest-bearing deposits		282,802		270,881		275,648		272,937		269,134		4		5
Total deposits		317,193		307,885		313,429		310,980		305,938		3		4
Securitized debt obligations		15,926		17,466		13,740		14,994		12,635		(9)		26
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase		528		440		594		820		825		20		(36)
Senior and subordinated notes		30,615		30,489		26,976		27,219		23,983		—		28
Other borrowings		7,538		10,543		4,048		53		58		(29)		**
Total other debt		38,681		41,472		31,618		28,092		24,866		(7)		56
Other liabilities		21,138		19,722		18,802		17,005		18,153		7		16
Total liabilities		393,371		386,878		377,850		371,352		361,833		2		9
Stockholders' equity:
Preferred stock		0		0		0		0		0		—		—
Common stock		7		7		7		7		7		—		—
Additional paid-in capital, net		34,579		34,425		34,286		34,112		35,051		—		(1)
Retained earnings		56,240		54,836		53,099		51,006		48,944		3		15
Accumulated other comprehensive income (loss)		(10,704)		(6,916)		(4,093)		374		1,360		55		**
Treasury stock, at cost		(29,261)		(28,942)		(26,954)		(24,470)		(21,818)		1		34
Total stockholders' equity		50,861		53,410		56,345		61,029		63,544		(5)		(20)
Total liabilities and stockholders' equity		$ 444,232		$ 440,288		$ 434,195		$ 432,381		$ 425,377		1		4

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)
(1)	Total net revenue was reduced by $222 million in Q3 2022, $211 million in Q2 2022, $192 million in Q1 2022, $151 million in Q4 2021 and $123 million in Q3 2021 for credit card finance charges and fees charged-off as uncollectible.
(2)	Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(3)	On September 1, 2021, we redeemed all outstanding shares of our fixed-to-floating rate non-cumulative perpetual preferred stock Series E, which reduced our net income available to common shareholders by $12 million in Q3 2021. On December 1, 2021, we redeemed all outstanding shares of our fixed rate 5.20% non-cumulative perpetual preferred stock Series G and our fixed rate 6.00% non-cumulative perpetual preferred stock Series H, which together reduced our net income available to common shareholders by $34 million in Q4 2021.
(4)	Tangible book value per common share is a non-GAAP measure calculated based on TCE divided by common shares outstanding. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(5)	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(6)	Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(7)	Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(8)	Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.
(9)	Return on average tangible common equity is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average TCE. Our calculation of return on average TCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(10)	Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(11)	Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(12)	Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(13)	Capital ratios as of the end of Q3 2022 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.
(14)	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
**    Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 6: Average Balances, Net Interest Income and Net Interest Margin
		2022 Q3						2022 Q2						2021 Q3
(Dollars in millions, except as noted)		Average Balance		Interest Income/ Expense		Yield/Rate(1)		Average Balance		Interest Income/ Expense		Yield/Rate(1)		Average Balance		Interest Income/ Expense		Yield/Rate
Interest-earning assets:
Loans, including loans held for sale		$   300,952		$      7,578		10.07 %		$   287,134		$      6,605		9.20 %		$   260,235		$      6,205		9.54 %
Investment securities		88,666		499		2.25		92,062		435		1.89		98,802		317		1.28
Cash equivalents and other		22,553		123		2.19		19,738		55		1.10		28,729		16		0.22
Total interest-earning assets		$   412,171		$      8,200		7.96		$   398,934		$      7,095		7.11		$   387,766		$      6,538		6.74
Interest-bearing liabilities:
Interest-bearing deposits		$   275,900		$         689		1.00		$   268,104		$         293		0.44		$   269,278		$         228		0.34
Securitized debt obligations		17,108		120		2.81		15,041		65		1.73		12,420		29		0.93
Senior and subordinated notes		30,962		319		4.13		28,919		194		2.68		24,241		116		1.91
Other borrowings and liabilities		12,296		69		2.20		10,922		26		0.98		2,357		9		1.49
Total interest-bearing liabilities		$   336,266		$      1,197		1.42		$   322,986		$         578		0.72		$   308,296		$         382		0.49
Net interest income/spread				$      7,003		6.53				$      6,517		6.40				$      6,156		6.25
Impact of non-interest-bearing funding						0.27						0.14						0.10
Net interest margin						6.80 %						6.54 %						6.35 %
								Nine Months Ended September 30,
								2022						2021
(Dollars in millions, except as noted)								Average Balance		Interest Income/ Expense		Yield/Rate(1)		Average Balance		Interest Income/ Expense		Yield/Rate
Interest-earning assets:
Loans, including loans held for sale								$   289,116		$     20,550		9.48 %		$   252,113		$     17,812		9.42 %
Investment securities								91,788		1,336		1.94		99,059		1,078		1.45
Cash equivalents and other								20,889		193		1.23		37,648		48		0.17
Total interest-earning assets								$   401,793		$     22,079		7.33		$   388,820		$     18,938		6.49
Interest-bearing liabilities:
Interest-bearing deposits								$   271,957		$       1,200		0.59		$   272,022		$          734		0.36
Securitized debt obligations								15,309		214		1.87		11,851		89		1.00
Senior and subordinated notes								28,804		644		2.98		25,555		367		1.92
Other borrowings and liabilities								8,982		104		1.53		2,256		27		1.59
Total interest-bearing liabilities								$   325,052		$       2,162		0.89		$   311,684		$       1,217		0.52
Net interest income/spread										$     19,917		6.44				$     17,721		5.97
Impact of non-interest-bearing funding												0.17						0.11
Net interest margin												6.61 %						6.08 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 7: Loan Information and Performance Statistics
												2022 Q3 vs.				Nine Months Ended September 30,
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
(Dollars in millions, except as noted)
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card		$   121,279		$   115,004		$   107,987		$   108,723		$     99,258		5 %		22 %		$ 121,279		$   99,258		22 %
International card businesses		5,634		5,876		5,975		6,049		5,772		(4)		(2)		5,634		5,772		(2)
Total credit card		126,913		120,880		113,962		114,772		105,030		5		21		126,913		105,030		21
Consumer banking:
Auto		79,580		79,926		78,604		75,779		74,716		—		7		79,580		74,716		7
Retail banking		1,619		1,605		1,726		1,867		2,396		1		(32)		1,619		2,396		(32)
Total consumer banking		81,199		81,531		80,330		77,646		77,112		—		5		81,199		77,112		5
Commercial banking:
Commercial and multifamily real estate		38,225		37,845		34,354		35,262		33,096		1		15		38,225		33,096		15
Commercial and industrial		57,606		56,128		51,820		49,660		46,152		3		25		57,606		46,152		25
Total commercial banking		95,831		93,973		86,174		84,922		79,248		2		21		95,831		79,248		21
Total loans held for investment		$   303,943		$   296,384		$   280,466		$   277,340		$   261,390		3		16		$ 303,943		$ 261,390		16
Loans Held for Investment (Average)
Credit card:
Domestic credit card		$   117,467		$   109,962		$   105,536		$   102,717		$     96,309		7 %		22 %		$ 111,032		$   93,493		19 %
International card businesses		5,890		5,873		5,944		5,871		5,737		—		3		5,902		7,264		(19)
Total credit card		123,357		115,835		111,480		108,588		102,046		6		21		116,934		100,757		16
Consumer banking:
Auto		79,741		79,313		76,892		75,284		73,296		1		9		78,659		69,700		13
Retail banking		1,598		1,668		1,797		2,160		2,700		(4)		(41)		1,687		2,969		(43)
Total consumer banking		81,339		80,981		78,689		77,444		75,996		—		7		80,346		72,669		11
Commercial banking:
Commercial and multifamily real estate		38,230		35,754		34,671		33,591		30,314		7		26		36,231		30,100		20
Commercial and industrial		57,260		53,540		50,502		47,536		44,745		7		28		53,793		44,341		21
Total commercial banking		95,490		89,294		85,173		81,127		75,059		7		27		90,024		74,441		21
Total average loans held for investment		$   300,186		$   286,110		$   275,342		$   267,159		$   253,101		5		19		$ 287,304		$ 247,867		16
												2022 Q3 vs.				Nine Months Ended September 30,
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card(2)		2.20 %		2.26 %		2.12 %		1.49 %		1.36 %		(6) bps		84 bps		2.19 %		2.05 %		14 bps
International card businesses		3.30		3.82		3.20		0.14		2.72		(52)		58		3.44		2.45		99
Total credit card		2.25		2.34		2.18		1.42		1.43		(9)		82		2.26		2.08		18
Consumer banking:
Auto		1.05		0.61		0.66		0.58		0.18		44		87		0.77		0.17		60
Retail banking		3.89		3.62		4.31		6.69		2.45		27		144		3.95		1.82		213
Total consumer banking		1.10		0.67		0.75		0.75		0.27		43		83		0.84		0.24		60
Commercial banking:
Commercial and multifamily real estate		0.03		(0.08)		—		—		0.01		11		2		(0.02)		0.04		(6)
Commercial and industrial		0.06		0.29		0.11		(0.03)		0.07		(23)		(1)		0.15		(0.01)		16
Total commercial banking		0.05		0.14		0.06		(0.02)		0.05		(9)		—		0.08		0.01		7
Total net charge-offs		1.24		1.18		1.11		0.79		0.67		6		57		1.18		0.92		26
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card		2.97 %		2.35 %		2.32 %		2.22 %		1.93 %		62 bps		104 bps		2.97 %		1.93 %		104 bps
International card businesses		3.90		3.67		3.58		3.42		3.27		23		63		3.90		3.27		63
Total credit card		3.01		2.42		2.38		2.28		2.00		59		101		3.01		2.00		101
Consumer banking:
Auto		4.85		4.47		3.85		4.32		3.65		38		120		4.85		3.65		120
Retail banking		0.84		0.67		0.74		1.92		1.15		17		(31)		0.84		1.15		(31)
Total consumer banking		4.77		4.39		3.78		4.26		3.58		38		119		4.77		3.58		119
Nonperforming Loans and Nonperforming Assets Rates(3)(4)
Credit card:
International card businesses		0.14 %		0.13 %		0.14 %		0.16 %		0.16 %		1 bps		(2) bps		0.14 %		0.16 %		(2) bps
Total credit card		0.01		0.01		0.01		0.01		0.01		—		—		0.01		0.01		—
Consumer banking:
Auto		0.60		0.50		0.41		0.45		0.36		10		24		0.60		0.36		24
Retail banking		2.62		2.61		2.63		2.51		2.20		1		42		2.62		2.20		42
Total consumer banking		0.64		0.54		0.46		0.50		0.42		10		22		0.64		0.42		22
Commercial banking:
Commercial and multifamily real estate		0.64		0.78		0.98		1.09		0.87		(14)		(23)		0.64		0.87		(23)
Commercial and industrial		0.53		0.64		0.69		0.64		0.68		(11)		(15)		0.53		0.68		(15)
Total commercial banking		0.57		0.70		0.81		0.82		0.76		(13)		(19)		0.57		0.76		(19)
Total nonperforming loans		0.35		0.37		0.38		0.40		0.35		(2)		—		0.35		0.35		—
Total nonperforming assets		0.37		0.39		0.40		0.41		0.37		(2)		—		0.37		0.37		—

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
		Three Months Ended September 30, 2022
		Credit Card						Consumer Banking
(Dollars in millions)		Domestic Card		International Card Businesses		Total Credit Card		Auto		Retail Banking		Total Consumer Banking		Commercial Banking		Total
Allowance for credit losses:
Balance as of June 30, 2022		$         7,840		$             326		$         8,166		$         1,999		$             48		$         2,047		$         1,278		$       11,491
Charge-offs		(960)		(87)		(1,047)		(389)		(21)		(410)		(13)		(1,470)
Recoveries		313		39		352		181		5		186		1		539
Net charge-offs		(647)		(48)		(695)		(208)		(16)		(224)		(12)		(931)
Provision for credit losses		1,167		94		1,261		266		19		285		119		1,665
Allowance build for credit losses		520		46		566		58		3		61		107		734
Other changes(5)		10		(26)		(16)		—		—		—		—		(16)
Balance as of September 30, 2022		8,370		346		8,716		2,057		51		2,108		1,385		12,209
Reserve for unfunded lending commitments:
Balance as of June 30, 2022		—		—		—		—		—		—		239		239
Provision for losses on unfunded lending commitments		—		—		—		—		—		—		4		4
Balance as of September 30, 2022		—		—		—		—		—		—		243		243
Combined allowance and reserve as of September 30, 2022		$         8,370		$             346		$         8,716		$         2,057		$             51		$         2,108		$         1,628		$       12,452

 

		Nine Months Ended September 30, 2022
		Credit Card						Consumer Banking
(Dollars in millions)		Domestic Card		International Card Businesses		Total Credit Card		Auto		Retail Banking		Total Consumer Banking		Commercial Banking		Total
Allowance for credit losses:
Balance as of December 31, 2021		$         7,968		$             377		$         8,345		$         1,852		$             66		$         1,918		$         1,167		$       11,430
Charge-offs		(2,747)		(264)		(3,011)		(1,026)		(64)		(1,090)		(73)		(4,174)
Recoveries		919		112		1,031		570		14		584		16		1,631
Net charge-offs		(1,828)		(152)		(1,980)		(456)		(50)		(506)		(57)		(2,543)
Provision for credit losses		2,220		167		2,387		661		35		696		275		3,358
Allowance build (release) for credit losses		392		15		407		205		(15)		190		218		815
Other changes(5)		10		(46)		(36)		—		—		—		—		(36)
Balance as of September 30, 2022		8,370		346		8,716		2,057		51		2,108		1,385		12,209
Reserve for unfunded lending commitments:
Balance as of December 31, 2021		—		—		—		—		—		—		165		165
Provision for losses on unfunded lending commitments		—		—		—		—		—		—		78		78
Balance as of September 30, 2022		—		—		—		—		—		—		243		243
Combined allowance and reserve as of September 30, 2022		$         8,370		$             346		$         8,716		$         2,057		$             51		$         2,108		$         1,628		$       12,452

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 9: Financial Summary—Business Segment Results
		Three Months Ended September 30, 2022										Nine Months Ended September 30, 2022
(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)		$        4,313		$       2,311		$             699		$      (320)		$      7,003		$       12,051		$       6,571		$          1,941		$      (646)		$    19,917
Non-interest income (loss)		1,454		129		319		(100)		1,802		4,322		330		868		(227)		5,293
Total net revenue (loss)		5,767		2,440		1,018		(420)		8,805		16,373		6,901		2,809		(873)		25,210
Provision (benefit) for credit losses		1,261		285		123		—		1,669		2,387		696		353		(5)		3,431
Non-interest expense		3,004		1,340		542		63		4,949		8,558		3,862		1,515		148		14,083
Income (loss) from continuing operations before income taxes		1,502		815		353		(483)		2,187		5,428		2,343		941		(1,016)		7,696
Income tax provision (benefit)		356		193		83		(139)		493		1,291		555		223		(501)		1,568
Income (loss) from continuing operations, net of tax		$        1,146		$          622		$             270		$      (344)		$      1,694		$        4,137		$       1,788		$             718		$      (515)		$      6,128
		Three Months Ended June 30, 2022
(Dollars in millions)		Credit Card		Consumer Banking		Commercial Banking(6)		Other(6)		Total
Net interest income (loss)		$        3,899		$       2,147		$             635		$      (164)		$      6,517
Non-interest income (loss)		1,410		96		272		(63)		1,715
Total net revenue (loss)		5,309		2,243		907		(227)		8,232
Provision for credit losses		581		281		222		1		1,085
Non-interest expense		2,771		1,286		485		41		4,583
Income (loss) from continuing operations before income taxes		1,957		676		200		(269)		2,564
Income tax provision (benefit)		466		160		48		(141)		533
Income (loss) from continuing operations, net of tax		$        1,491		$          516		$             152		$      (128)		$      2,031
		Three Months Ended September 30, 2021										Nine Months Ended September 30, 2021
(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)		$        3,620		$       2,159		$             578		$      (201)		$      6,156		$       10,209		$       6,290		$          1,558		$      (336)		$    17,721
Non-interest income (loss)		1,263		127		306		(22)		1,674		3,545		412		803		(164)		4,596
Total net revenue (loss)		4,883		2,286		884		(223)		7,830		13,754		6,702		2,361		(500)		22,317
Provision (benefit) for credit losses		(198)		(91)		(53)		—		(342)		(1,325)		(523)		(475)		(2)		(2,325)
Non-interest expense		2,424		1,186		459		117		4,186		6,822		3,426		1,295		349		11,892
Income (loss) from continuing operations before income taxes		2,657		1,191		478		(340)		3,986		8,257		3,799		1,541		(847)		12,750
Income tax provision (benefit)		627		282		113		(140)		882		1,952		897		364		(431)		2,782
Income (loss) from continuing operations, net of tax		$        2,030		$          909		$             365		$      (200)		$      3,104		$        6,305		$       2,902		$          1,177		$      (416)		$      9,968

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 10: Financial & Statistical Summary—Credit Card Business
												2022 Q3 vs.				Nine Months Ended September 30,
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
(Dollars in millions, except as noted)
Credit Card
Earnings:
Net interest income		$    4,313		$   3,899		$   3,839		$   3,865		$   3,620		11 %		19 %		$  12,051		$  10,209		18 %
Non-interest income		1,454		1,410		1,458		1,261		1,263		3		15		4,322		3,545		22
Total net revenue		5,767		5,309		5,297		5,126		4,883		9		18		16,373		13,754		19
Provision (benefit) for credit losses		1,261		581		545		423		(198)		117		**		2,387		(1,325)		**
Non-interest expense		3,004		2,771		2,783		2,799		2,424		8		24		8,558		6,822		25
Income from continuing operations before income taxes		1,502		1,957		1,969		1,904		2,657		(23)		(43)		5,428		8,257		(34)
Income tax provision		356		466		469		451		627		(24)		(43)		1,291		1,952		(34)
Income from continuing operations, net of tax		$    1,146		$   1,491		$   1,500		$   1,453		$   2,030		(23)		(44)		$    4,137		$   6,305		(34)
Selected performance metrics:
Period-end loans held for investment		$  126,913		$ 120,880		$ 113,962		$ 114,772		$ 105,030		5		21		$  126,913		$ 105,030		21
Average loans held for investment		123,357		115,835		111,480		108,588		102,046		6		21		116,934		100,757		16
Average yield on loans outstanding(1)		16.74 %		15.24 %		14.97 %		14.94 %		14.88 %		150 bps		186 bps		15.67 %		14.47 %		120 bps
Total net revenue margin(7)		18.70		18.33		18.56		18.11		18.33		37		37		18.53		17.70		83
Net charge-off rate		2.25		2.34		2.18		1.42		1.43		(9)		82		2.26		2.08		18
30+ day performing delinquency rate		3.01		2.42		2.38		2.28		2.00		59		101		3.01		2.00		101
30+ day delinquency rate		3.02		2.42		2.39		2.29		2.00		60		102		3.02		2.00		102
Nonperforming loan rate(3)		0.01		0.01		0.01		0.01		0.01		—		—		0.01		0.01		—
Purchase volume(8)		$  149,497		$ 148,491		$ 133,662		$ 149,982		$ 136,614		1 %		9 %		$  431,650		$ 377,623		14 %
												2022 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
Domestic Card
Earnings:
Net interest income		$    4,065		$   3,651		$   3,620		$   3,558		$   3,319		11 %		22 %		$  11,336		$   9,358		21 %
Non-interest income		1,383		1,340		1,248		1,190		1,200		3		15		3,971		3,342		19
Total net revenue		5,448		4,991		4,868		4,748		4,519		9		21		15,307		12,700		21
Provision (benefit) for credit losses		1,167		494		559		384		(200)		136		**		2,220		(1,252)		**
Non-interest expense		2,803		2,594		2,564		2,564		2,191		8		28		7,961		6,148		29
Income from continuing operations before income taxes		1,478		1,903		1,745		1,800		2,528		(22)		(42)		5,126		7,804		(34)
Income tax provision		351		450		414		424		597		(22)		(41)		1,215		1,842		(34)
Income from continuing operations, net of tax		$    1,127		$   1,453		$   1,331		$   1,376		$   1,931		(22)		(42)		$    3,911		$   5,962		(34)
Selected performance metrics:
Period-end loans held for investment		$  121,279		$ 115,004		$ 107,987		$ 108,723		$   99,258		5		22		$  121,279		$   99,258		22
Average loans held for investment		117,467		109,962		105,536		102,717		96,309		7		22		111,032		93,493		19
Average yield on loans outstanding(1)		16.61 %		15.03 %		14.82 %		14.86 %		14.80 %		158 bps		181 bps		15.51 %		14.36 %		115 bps
Total net revenue margin(7)		18.55		18.16		18.28		18.14		18.40		39		15		18.33		17.74		59
Net charge-off rate (2)		2.20		2.26		2.12		1.49		1.36		(6)		84		2.19		2.05		14
30+ day performing delinquency rate		2.97		2.35		2.32		2.22		1.93		62		104		2.97		1.93		104
Purchase volume(8)		$  145,805		$ 144,668		$ 126,284		$ 138,825		$ 126,057		1 %		16 %		$  416,757		$ 348,472		20 %
Refreshed FICO scores:(9)
Greater than 660		70 %		70 %		70 %		71 %		71 %		—		(1)		70 %		71 %		(1)
660 or below		30		30		30		29		29		—		1		30		29		1
Total		100 %		100 %		100 %		100 %		100 %						100 %		100 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 11: Financial & Statistical Summary—Consumer Banking Business
												2022 Q3 vs.				Nine Months Ended September 30,
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
(Dollars in millions, except as noted)
Consumer Banking
Earnings:
Net interest income		$  2,311		$   2,147		$   2,113		$   2,158		$   2,159		8 %		7 %		$  6,571		$   6,290		4 %
Non-interest income		129		96		105		142		127		34		2		330		412		(20)
Total net revenue		2,440		2,243		2,218		2,300		2,286		9		7		6,901		6,702		3
Provision (benefit) for credit losses		285		281		130		2		(91)		1		**		696		(523)		**
Non-interest expense		1,340		1,286		1,236		1,285		1,186		4		13		3,862		3,426		13
Income from continuing operations before income taxes		815		676		852		1,013		1,191		21		(32)		2,343		3,799		(38)
Income tax provision		193		160		202		239		282		21		(32)		555		897		(38)
Income from continuing operations, net of tax		$     622		$      516		$      650		$      774		$      909		21		(32)		$  1,788		$   2,902		(38)
Selected performance metrics:
Period-end loans held for investment		$   81,199		$   81,531		$   80,330		$   77,646		$   77,112		—		5		$   81,199		$   77,112		5
Average loans held for investment		81,339		80,981		78,689		77,444		75,996		—		7		80,346		72,669		11
Average yield on loans held for investment(1)		7.20 %		7.08 %		7.17 %		7.55 %		7.78 %		12 bps		(58) bps		7.15 %		7.97 %		(82) bps
Auto loan originations		$     8,289		$   10,328		$   11,713		$     9,721		$   11,570		(20) %		(28) %		$   30,330		$   33,362		(9) %
Period-end deposits		256,661		255,904		258,359		256,407		252,387		—		2		256,661		252,387		2
Average deposits		255,843		254,336		255,265		253,372		251,307		1		2		255,150		251,105		2
Average deposits interest rate		0.79 %		0.38 %		0.29 %		0.30 %		0.30 %		41 bps		49 bps		0.49 %		0.32 %		17 bps
Net charge-off rate		1.10		0.67		0.75		0.75		0.27		43		83		0.84		0.24		60
30+ day performing delinquency rate		4.77		4.39		3.78		4.26		3.58		38		119		4.77		3.58		119
30+ day delinquency rate		5.28		4.81		4.13		4.66		3.88		47		140		5.28		3.88		140
Nonperforming loan rate(3)		0.64		0.54		0.46		0.50		0.42		10		22		0.64		0.42		22
Nonperforming asset rate(4)		0.71		0.60		0.52		0.56		0.47		11		24		0.71		0.47		24
Auto—At origination FICO scores:(10)
Greater than 660		52 %		52 %		51 %		50 %		49 %		—		3 %		52 %		49 %		3 %
621 - 660		20		20		20		20		20		—		—		20		20		—
620 or below		28		28		29		30		31		—		(3)		28		31		(3)
Total		100 %		100 %		100 %		100 %		100 %						100 %		100 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 12: Financial & Statistical Summary—Commercial Banking Business
												2022 Q3 vs.				Nine Months Ended September 30,
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
(Dollars in millions, except as noted)
Commercial Banking
Earnings:
Net interest income		$     699		$      635		$      607		$      595		$      578		10 %		21 %		$     1,941		$     1,558		25 %
Non-interest income		319		272		277		345		306		17		4		868		803		8
Total net revenue(6)		1,018		907		884		940		884		12		15		2,809		2,361		19
Provision (benefit) for credit losses		123		222		8		(44)		(53)		(45)		**		353		(475)		**
Non-interest expense		542		485		488		520		459		12		18		1,515		1,295		17
Income from continuing operations before income taxes		353		200		388		464		478		77		(26)		941		1,541		(39)
Income tax provision		83		48		92		109		113		73		(27)		223		364		(39)
Income from continuing operations, net of tax		$     270		$      152		$      296		$      355		$      365		78		(26)		$       718		$     1,177		(39)
Selected performance metrics:
Period-end loans held for investment		$   95,831		$   93,973		$   86,174		$   84,922		$   79,248		2		21		$   95,831		$   79,248		21
Average loans held for investment		95,490		89,294		85,173		81,127		75,059		7		27		90,024		74,441		21
Average yield on loans held for investment(1)(6)		4.40 %		3.18 %		2.66 %		2.71 %		2.77 %		122 bps		163 bps		3.44 %		2.75 %		69 bps
Period-end deposits		$   41,058		$   38,844		$   45,232		$   44,809		$   43,347		6 %		(5) %		$   41,058		$   43,347		(5) %
Average deposits		39,799		40,536		45,008		44,206		42,729		(2)		(7)		41,762		41,725		—
Average deposits interest rate		0.83 %		0.19 %		0.12 %		0.12 %		0.15 %		64 bps		68 bps		0.37 %		0.15 %		22 bps
Net charge-off (recovery) rate		0.05		0.14		0.06		(0.02)		0.05		(9)		—		0.08		0.01		7
Nonperforming loan rate(3)		0.57		0.70		0.81		0.82		0.76		(13)		(19)		0.57		0.76		(19)
Nonperforming asset rate(4)		0.57		0.70		0.81		0.82		0.76		(13)		(19)		0.57		0.76		(19)
Risk category:(11)
Noncriticized		$   89,559		$   88,349		$   80,586		$   79,014		$   73,218		1 %		22 %		$   89,559		$   73,218		22 %
Criticized performing		5,722		4,969		4,893		5,209		5,429		15		5		5,722		5,429		5
Criticized nonperforming		550		655		695		699		601		(16)		(8)		550		601		(8)
Total commercial banking loans		$   95,831		$   93,973		$   86,174		$   84,922		$   79,248		2		21		$   95,831		$   79,248		21
Risk category as a percentage of period-end loans held for investment:(11)
Noncriticized		93.46 %		94.01 %		93.51 %		93.05 %		92.39 %		(55) bps		107 bps		93.46 %		92.39 %		107 bps
Criticized performing		5.97		5.29		5.68		6.13		6.85		68		(88)		5.97		6.85		(88)
Criticized nonperforming		0.57		0.70		0.81		0.82		0.76		(13)		(19)		0.57		0.76		(19)
Total commercial banking loans		100.00 %		100.00 %		100.00 %		100.00 %		100.00 %						100.00 %		100.00 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 13: Financial & Statistical Summary—Other and Total
												2022 Q3 vs.				Nine Months Ended September 30,
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		2022 Q2		2021 Q3		2022		2021		2022 vs. 2021
(Dollars in millions)
Other
Earnings:
Net interest loss		$        (320)		$        (164)		$        (162)		$        (168)		$        (201)		95 %		59 %		$        (646)		$        (336)		92 %
Non-interest loss		(100)		(63)		(64)		(80)		(22)		59		**		(227)		(164)		38
Total net loss(6)		(420)		(227)		(226)		(248)		(223)		85		88		(873)		(500)		75
Provision (benefit) for credit losses		—		1		(6)		—		—		**		—		(5)		(2)		150
Non-interest expense(12)		63		41		44		74		117		54		(46)		148		349		(58)
Loss from continuing operations before income taxes		(483)		(269)		(264)		(322)		(340)		80		42		(1,016)		(847)		20
Income tax benefit		(139)		(141)		(221)		(166)		(140)		(1)		(1)		(501)		(431)		16
Loss from continuing operations, net of tax		$        (344)		$        (128)		$          (43)		$        (156)		$        (200)		169		72		$        (515)		$        (416)		24
Selected performance metrics:
Period-end deposits		$    19,474		$    13,137		$      9,838		$      9,764		$    10,204		48		91		$    19,474		$    10,204		91
Average deposits		16,286		11,082		9,324		9,694		10,999		47		48		12,256		13,272		(8)
Total
Earnings:
Net interest income		$      7,003		$      6,517		$      6,397		$      6,450		$      6,156		7 %		14 %		$    19,917		$    17,721		12 %
Non-interest income		1,802		1,715		1,776		1,668		1,674		5		8		5,293		4,596		15
Total net revenue		8,805		8,232		8,173		8,118		7,830		7		12		25,210		22,317		13
Provision (benefit) for credit losses		1,669		1,085		677		381		(342)		54		**		3,431		(2,325)		**
Non-interest expense		4,949		4,583		4,551		4,678		4,186		8		18		14,083		11,892		18
Income from continuing operations before income taxes		2,187		2,564		2,945		3,059		3,986		(15)		(45)		7,696		12,750		(40)
Income tax provision		493		533		542		633		882		(8)		(44)		1,568		2,782		(44)
Income from continuing operations, net of tax		$      1,694		$      2,031		$      2,403		$      2,426		$      3,104		(17)		(45)		$      6,128		$      9,968		(39)
Selected performance metrics:
Period-end loans held for investment		$  303,943		$  296,384		$  280,466		$  277,340		$  261,390		3		16		$  303,943		$  261,390		16
Average loans held for investment		300,186		286,110		275,342		267,159		253,101		5		19		287,304		247,867		16
Period-end deposits		317,193		307,885		313,429		310,980		305,938		3		4		317,193		305,938		4
Average deposits		311,928		305,954		309,597		307,272		305,035		2		2		309,168		306,102		1

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)
(1)	Average yield is calculated based on annualized interest income for the period divided by average loans during the period. Annualized interest income does not include any allocations, such as funds transfer pricing. Average yield is calculated using whole dollar values for average balances and interest income/expense. Accordingly, total interest earning assets less total interest bearing liabilities may not total net interest income/spread.
(2)	In August 2022, in addition to our normal recovery activity, we sold a pool of charged-off loans that resulted in elevated debt sale recovery activity of approximately $33 million, which decreased the Domestic Credit Card net charge-off rate for the third quarter of 2022 by approximately 11 basis points. Excluding the impact, the Domestic Credit Card net charge-off rate would have been 2.31% for the third quarter of 2022.
(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. For Commercial Banking, loans categorized as nonperforming are considered criticized nonperforming.
(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)	Primarily represents foreign currency translation adjustments and initial allowance builds for purchase credit-deteriorated loans.
(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)	Total net revenue margin is calculated based on total net revenue for the period divided by average loans outstanding during the period.
(8)	Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.
(9)	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.
(10)	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.
(11)	Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
(12)	Includes charges incurred as a result of restructuring activities.
**     Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures(1)
		Basel III Standardized Approach
(Dollars in millions, except as noted)		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
Regulatory Capital Metrics
Common equity excluding AOCI		$      58,516		$        57,278		$        57,390		$         58,206		$        58,705
Adjustments:
AOCI, net of tax(2)		(120)		(72)		(20)		(23)		(33)
Goodwill, net of related deferred tax liabilities		(14,537)		(14,548)		(14,559)		(14,562)		(14,435)
Intangible assets, net of related deferred tax liabilities		(180)		(80)		(94)		(108)		(84)
Other		(14)		(15)		(16)		(12)		(15)
Common equity Tier 1 capital		$      43,665		$        42,563		$        42,701		$         43,501		$        44,138
Tier 1 capital		$      48,510		$        47,408		$        47,547		$         48,346		$        50,049
Total capital(3)		55,938		55,100		55,059		56,089		57,851
Risk-weighted assets		356,817		351,746		336,739		332,673		318,729
Adjusted average assets(4)		439,479		427,446		418,957		415,141		411,216
Capital Ratios
Common equity Tier 1 capital(5)		12.2 %		12.1 %		12.7 %		13.1 %		13.8 %
Tier 1 capital(6)		13.6		13.5		14.1		14.5		15.7
Total capital(7)		15.7		15.7		16.4		16.9		18.2
Tier 1 leverage(4)		11.0		11.1		11.3		11.6		12.2
Tangible common equity ("TCE")(8)		7.2		7.9		8.7		9.9		10.4

 

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.
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3		Nine Months Ended September 30,
(Dollars in millions, except per share data and as noted)												2022		2021
Adjusted diluted earnings per share ("EPS"):
Net income available to common stockholders (GAAP)		$            1,616		$            1,949		$           2,318		$           2,296		$           2,987		$             5,883		$             9,669
Legal reserve activity, including insurance recoveries		—		—		—		—		45		—		100
Adjusted net income available to common stockholders before income tax impacts (non-GAAP)		1,616		1,949		2,318		2,296		3,032		5,883		9,769
Income tax impacts		—		—		—		—		(11)		—		(24)
Adjusted net income available to common stockholders (non-GAAP)		$            1,616		$            1,949		$           2,318		$           2,296		$           3,021		$             5,883		$             9,745
Diluted weighted-average common shares outstanding (in millions) (GAAP)		384.6		392.6		412.2		424.3		440.5		396.4		450.9
Diluted EPS (GAAP)		$             4.20		$              4.96		$             5.62		$             5.41		$             6.78		$             14.84		$             21.44
Impact of adjustments noted above		—		—		—		—		0.08		—		0.17
Adjusted diluted EPS (non-GAAP)		$             4.20		$              4.96		$             5.62		$             5.41		$             6.86		$             14.84		$             21.61
Adjusted efficiency ratio:
Non-interest expense (GAAP)		$            4,949		$            4,583		$           4,551		$           4,678		$           4,186		$           14,083		$           11,892
Legal reserve activity, including insurance recoveries		—		—		—		—		(45)		—		(100)
Adjusted non-interest expense (non-GAAP)		$            4,949		$            4,583		$           4,551		$           4,678		$           4,141		$           14,083		$           11,792
Total net revenue (GAAP)		$            8,805		$            8,232		$           8,173		$           8,118		$           7,830		$           25,210		$          22,317
Efficiency ratio (GAAP)		56.21 %		55.67 %		55.68 %		57.63 %		53.46 %		55.86 %		53.29 %
Impact of adjustments noted above		—		—		—		—		(57) bps		—		(45) bps
Adjusted efficiency ratio (non-GAAP)		56.21 %		55.67 %		55.68 %		57.63 %		52.89 %		55.86 %		52.84 %
Adjusted operating efficiency ratio:
Operating expense (GAAP)		$            3,971		$            3,580		$           3,633		$           3,679		$           3,435		$           11,184		$           10,020
Legal reserve activity, including insurance recoveries		—		—		—		—		(45)		—		(100)
Adjusted operating expense (non-GAAP)		$            3,971		$            3,580		$           3,633		$           3,679		$           3,390		$           11,184		$             9,920
Total net revenue (GAAP)		$            8,805		$            8,232		$           8,173		$           8,118		$           7,830		$           25,210		$           22,317
Operating efficiency ratio (GAAP)		45.10 %		43.49 %		44.45 %		45.32 %		43.87 %		44.36 %		44.90 %
Impact of adjustments noted above		—		—		—		—		(57) bps		—		(45) bps
Adjusted operating efficiency ratio (non-GAAP)		45.10 %		43.49 %		44.45 %		45.32 %		43.30 %		44.36 %		44.45 %

 

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.
		2022 Q3		2022 Q2		2022 Q1		2021 Q4		2021 Q3
(Dollars in millions)
Tangible Common Equity (Period-End)
Stockholders' equity		$          50,861		$          53,410		$          56,345		$          61,029		$          63,544
Goodwill and intangible assets(9)		(14,932)		(14,850)		(14,883)		(14,907)		(14,766)
Noncumulative perpetual preferred stock		(4,845)		(4,845)		(4,845)		(4,845)		(5,912)
Tangible common equity		$          31,084		$          33,715		$          36,617		$          41,277		$          42,866
Tangible Common Equity (Average)
Stockholders' equity		$          54,541		$          54,165		$          59,437		$          62,498		$          64,682
Goodwill and intangible assets(9)		(14,916)		(14,875)		(14,904)		(14,847)		(14,777)
Noncumulative perpetual preferred stock		(4,845)		(4,845)		(4,845)		(5,552)		(6,452)
Tangible common equity		$          34,780		$          34,445		$          39,688		$          42,099		$          43,453
Tangible Assets (Period-End)
Total assets		$        444,232		$        440,288		$        434,195		$        432,381		$        425,377
Goodwill and intangible assets(9)		(14,932)		(14,850)		(14,883)		(14,907)		(14,766)
Tangible assets		$        429,300		$        425,438		$        419,312		$        417,474		$        410,611
Tangible Assets (Average)
Total assets		$        447,088		$        435,327		$        430,372		$        427,845		$        424,506
Goodwill and intangible assets(9)		(14,916)		(14,875)		(14,904)		(14,847)		(14,777)
Tangible assets		$        432,172		$        420,452		$        415,468		$        412,998		$        409,729

__________

(1)	Regulatory capital metrics and capital ratios as of September 30, 2022 are preliminary and therefore subject to change.
(2)	Excludes certain components of AOCI as permitted under the Tailoring Rules.
(3)	Total capital equals the sum of Tier 1 capital and Tier 2 capital.
(4)	Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that are deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.
(5)	Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.
(6)	Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(7)	Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.
(8)	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
(9)	Includes impact of related deferred taxes.

 

 

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SOURCE Capital One Financial Corporation

FAQ

What were Capital One's Q3 2022 results for net income?

Capital One reported a net income of $1.7 billion, or $4.20 per diluted share, for Q3 2022.

How did Capital One's total net revenue change in Q3 2022?

Total net revenue increased by 7% to $8.8 billion in Q3 2022.

What was the provision for credit losses in Q3 2022 for COF?

The provision for credit losses rose by $584 million to $1.7 billion.

What is the net interest margin for Capital One in Q3 2022?

The net interest margin for Capital One was 6.80% in Q3 2022.

How much did Capital One's deposits increase in Q3 2022?

Period-end total deposits increased by 3% to $317.2 billion in Q3 2022.