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

Published: 2022-10-27 20:05:00 ET
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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.

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"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)

AverageBalance

InterestIncome/Expense

Yield/Rate(1)

AverageBalance

InterestIncome/Expense

Yield/Rate(1)

AverageBalance

InterestIncome/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)

AverageBalance

InterestIncome/Expense

Yield/Rate(1)

AverageBalance

InterestIncome/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 AssetsRates(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)

DomesticCard

InternationalCardBusinesses

Total CreditCard

Auto

RetailBanking

TotalConsumerBanking

CommercialBanking

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)

DomesticCard

InternationalCardBusinesses

Total CreditCard

Auto

RetailBanking

TotalConsumerBanking

CommercialBanking

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

ConsumerBanking

CommercialBanking(6)

Other(6)

Total

Credit Card

ConsumerBanking

CommercialBanking(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

ConsumerBanking

CommercialBanking(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

ConsumerBanking

CommercialBanking(6)

Other(6)

Total

Credit Card

ConsumerBanking

CommercialBanking(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 alternatemeasurements 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, returnon average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that management uses in assessingcapital 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 capitalposition of financial services companies, they may not be comparable to similarly-titled measures reported by other companies. The following tables present reconciliations ofthese 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