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Capital One Reports First Quarter 2022 Net Income of $2.4 billion, or $5.62 per share

Published: 2022-04-26 20:05:00 ET
<<<  go to COF company page

MCLEAN, Va., April 26, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2022 of $2.4 billion, or $5.62 per diluted common share, compared with net income of $2.4 billion, or $5.41 per diluted common share in the fourth quarter of 2021, and with net income of $3.3 billion, or $7.03 per diluted common share in the first quarter of 2021.

Capital One Financial (PRNewsfoto/Capital One Financial Corporation)

"We continued to deliver strong growth across our businesses in the first quarter," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We remain well-positioned to capitalize on opportunities that emerge as sweeping digital change and modern technology transform banking."

The quarter included the following notable item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact

Gain on sale of partnership card portfolios

$                   192

$                   0.35

All comparisons below are for the first quarter of 2022 compared with the fourth quarter of 2021 unless otherwise noted.

First Quarter 2022 Income Statement Summary:

  • Total net revenue increased 1 percent to $8.2 billion.
  • Total non-interest expense decreased 3 percent to $4.6 billion:
    • 8 percent decrease in marketing.
    • 1 percent decrease in operating expenses.
  • Pre-provision earnings increased 5 percent to $3.6 billion.(1)
  • Provision for credit losses increased $296 million to $677 million:
    • Net charge-offs of $767 million.
    • $119 million loan reserve release.
  • Net interest margin of 6.49 percent, a decrease of 11 basis points.
  • Efficiency ratio of 55.68 percent.
  • Operating efficiency ratio of 44.45 percent.

First Quarter 2022 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.7 percent at March 31, 2022.
  • Period-end loans held for investment in the quarter increased $3.1 billion, or 1 percent, to $280.5 billion.
    • Credit Card period-end loans decreased $810 million, or 1 percent, to $114.0 billion.
      • Domestic Card period-end loans decreased $736 million, or 1 percent, to $108.0 billion.
    • Consumer Banking period-end loans increased $2.7 billion, or 3 percent, to $80.3 billion.
      • Auto period-end loans increased $2.8 billion, or 4 percent, to $78.6 billion.
    • Commercial Banking period-end loans increased $1.3 billion, or 1 percent, to $86.2 billion.
  • Average loans held for investment in the quarter increased $8.2 billion, or 3 percent, to $275.3 billion.
    • Credit Card average loans increased $2.9 billion, or 3 percent, to $111.5 billion.
      • Domestic Card average loans increased $2.8 billion, or 3 percent, to $105.5 billion.
    • Consumer Banking average loans increased $1.2 billion, or 2 percent, to $78.7 billion.
      • Auto average loans increased $1.6 billion, or 2 percent, to $76.9 billion.
    • Commercial Banking average loans increased $4.0 billion, or 5 percent, to $85.2 billion.
  • Period-end total deposits increased $2.4 billion, or 1 percent, to $313.4 billion, while average deposits increased $2.3 billion, or 1 percent, to $309.6 billion.
  • Interest-bearing deposits rate paid decreased 1 basis point to 0.32 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 April 26, 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 May 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 whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $313.4 billion in deposits and $434.2 billion in total assets as of March 31, 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)

First 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 March 31, 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 Q1 vs.

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

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

Income Statement

Net interest income

$      6,397

$     6,450

$      6,156

$      5,743

$      5,822

(1)%

10%

Non-interest income

1,776

1,668

1,674

1,631

1,291

6

38

Total net revenue(1)

8,173

8,118

7,830

7,374

7,113

1

15

Provision (benefit) for credit losses

677

381

(342)

(1,160)

(823)

78

**

Non-interest expense:

Marketing

918

999

751

620

501

(8)

83

Operating expense

3,633

3,679

3,435

3,346

3,239

(1)

12

Total non-interest expense

4,551

4,678

4,186

3,966

3,740

(3)

22

Income from continuing operations before income taxes

2,945

3,059

3,986

4,568

4,196

(4)

(30)

Income tax provision

542

633

882

1,031

869

(14)

(38)

Income from continuing operations, net of tax

2,403

2,426

3,104

3,537

3,327

(1)

(28)

Loss from discontinued operations, net of tax

—

(1)

—

(1)

(2)

**

**

Net income

2,403

2,425

3,104

3,536

3,325

(1)

(28)

Dividends and undistributed earnings allocated to participating securities(2)

(28)

(21)

(26)

(30)

(28)

33

—

Preferred stock dividends

(57)

(74)

(79)

(60)

(61)

(23)

(7)

Issuance cost for redeemed preferred stock(3)

—

(34)

(12)

—

—

**

—

Net income available to common stockholders

$      2,318

$     2,296

$      2,987

$      3,446

$     3,236

1

(28)

Common Share Statistics

Basic earnings per common share:(2)

Net income from continuing operations

$        5.65

$       5.43

$        6.81

$        7.65

$       7.06

4%

(20)%

Net income per basic common share

$        5.65

$       5.43

$        6.81

$        7.65

$       7.06

4

(20)

Diluted earnings per common share:(2)

Net income from continuing operations

$        5.62

$       5.41

$        6.78

$        7.62

$       7.03

4%

(20)%

Net income per diluted common share

$        5.62

$       5.41

$        6.78

$        7.62

$       7.03

4

(20)

Weighted-average common shares outstanding (in millions):

Basic

410.4

422.5

438.8

450.6

458.6

(3)%

(11)%

Diluted

412.2

424.3

440.5

452.3

460.1

(3)

(10)

Common shares outstanding (period-end, in millions)

399.0

413.9

430.4

446.1

456.8

(4)

(13)

Dividends declared and paid per common share

$        0.60

$       0.60

$        1.20

$        0.40

$       0.40

—

50

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

91.77

99.74

99.60

97.20

90.96

(8)

1

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions)

Balance Sheet (Period-End)

Loans held for investment

$  280,466

$  277,340

$  261,390

$  249,597

$  243,131

1%

15%

Interest-earning assets

398,241

397,341

387,208

387,295

392,485

—

1

Total assets

434,195

432,381

425,377

423,420

425,175

—

2

Interest-bearing deposits

275,648

272,937

269,134

271,314

276,325

1

—

Total deposits

313,429

310,980

305,938

306,308

310,328

1

1

Borrowings

45,358

43,086

37,501

36,343

38,450

5

18

Common equity

51,499

56,184

57,632

58,136

56,341

(8)

(9)

Total stockholders' equity

56,345

61,029

63,544

64,624

61,188

(8)

(8)

Balance Sheet (Average Balances)

Loans held for investment

$  275,342

$  267,159

$  253,101

$  246,463

$  243,937

3%

13%

Interest-earning assets

394,082

390,868

387,766

390,129

388,572

1

1

Total assets

430,372

427,845

424,506

424,099

421,808

1

2

Interest-bearing deposits

271,823

269,951

269,278

273,476

273,358

1

(1)

Total deposits

309,597

307,272

305,035

308,217

305,056

1

1

Borrowings

42,277

39,943

37,464

37,054

39,911

6

6

Common equity

54,591

56,946

58,230

56,885

55,775

(4)

(2)

Total stockholders' equity

59,437

62,498

64,682

62,376

60,623

(5)

(2)

        

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated

2022 Q1 vs.

(Dollars in millions, except as noted)

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

Performance Metrics

Net interest income growth (period over period)

(1)%

5%

7%

(1)%

(1)%

**

**

Non-interest income growth (period over period)

6

—

3

26

(12)

**

**

Total net revenue growth (period over period)

1

4

6

4

(3)

**

**

Total net revenue margin(5)

8.30

8.31

8.08

7.56

7.32

(1) bps

98 bps

Net interest margin(6)

6.49

6.60

6.35

5.89

5.99

(11)

50

Return on average assets

2.23

2.27

2.92

3.34

3.16

(4)

(93)

Return on average tangible assets(7)

2.31

2.35

3.03

3.46

3.27

(4)

(96)

Return on average common equity(8)

16.98

16.13

20.52

24.24

23.22

85

(6)%

Return on average tangible common equity(9)

23.36

21.82

27.50

32.75

31.61

154

(8)

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

6.61

7.00

6.62

6.44

6.13

(39)

48 bps

Efficiency ratio(10)

55.68

57.63

53.46

53.78

52.58

(195)

310

Operating efficiency ratio(11)

44.45

45.32

43.87

45.38

45.54

(87)

(109)

Effective income tax rate for continuing operations

18.4

20.7

22.1

22.6

20.7

(230)

(230)

Employees (period-end, in thousands)

51.5

50.8

50.8

52.0

51.7

1%

—%

Credit Quality Metrics

Allowance for credit losses

$  11,308

$   11,430

$   11,573

$   12,346

$   14,017

(1)%

(19)%

Allowance coverage ratio

4.03%

4.12%

4.43%

4.95%

5.77%

(9) bps

(174) bps

Net charge-offs

$       767

$        527

$        426

$        541

$        740

46%

4%

Net charge-off rate(12)

1.11%

0.79%

0.67%

0.88%

1.21%

32 bps

(10) bps

30+ day performing delinquency rate

2.08

2.25

1.97

1.75

1.82

(17)

26

30+ day delinquency rate

2.21

2.41

2.13

1.89

1.98

(20)

23

Capital Ratios(13)

Common equity Tier 1 capital 

12.7%

13.1%

13.8%

14.5%

14.6%

(40) bps

(190) bps

Tier 1 capital

14.1

14.5

15.7

16.6

16.2

(40)

(210)

Total capital

16.4

16.9

18.2

18.8

18.6

(50)

(220)

Tier 1 leverage

11.3

11.6

12.2

12.4

11.7

(30)

(40)

Tangible common equity ("TCE")(14)

8.7

9.9

10.4

10.6

10.1

(120)

(140)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

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

Interest income:

Loans, including loans held for sale

$      6,367

$      6,451

$      6,205

$      5,753

$      5,854

(1)%

9%

Investment securities

402

368

317

370

391

9

3

Other

15

12

16

16

16

25

(6)

Total interest income

6,784

6,831

6,538

6,139

6,261

(1)

8

Interest expense:

Deposits

218

222

228

237

269

(2)

(19)

Securitized debt obligations

29

30

29

28

32

(3)

(9)

Senior and subordinated notes

131

121

116

122

129

8

2

Other borrowings

9

8

9

9

9

13

—

Total interest expense

387

381

382

396

439

2

(12)

Net interest income

6,397

6,450

6,156

5,743

5,822

(1)

10

Provision (benefit) for credit losses

677

381

(342)

(1,160)

(823)

78

**

Net interest income after provision for credit losses

5,720

6,069

6,498

6,903

6,645

(6)

(14)

Non-interest income:

Interchange fees, net

1,033

1,005

1,022

1,016

817

3

26

Service charges and other customer-related fees

400

435

407

384

352

(8)

14

Other

343

228

245

231

122

50

181

Total non-interest income

1,776

1,668

1,674

1,631

1,291

6

38

Non-interest expense:

Salaries and associate benefits

2,026

1,941

1,852

1,781

1,847

4

10

Occupancy and equipment

513

527

481

523

472

(3)

9

Marketing

918

999

751

620

501

(8)

83

Professional services

397

449

358

341

292

(12)

36

Communications and data processing

339

326

319

315

302

4

12

Amortization of intangibles

14

13

5

5

6

8

133

Other

344

423

420

381

320

(19)

8

Total non-interest expense

4,551

4,678

4,186

3,966

3,740

(3)

22

Income from continuing operations before income taxes

2,945

3,059

3,986

4,568

4,196

(4)

(30)

Income tax provision

542

633

882

1,031

869

(14)

(38)

Income from continuing operations, net of tax

2,403

2,426

3,104

3,537

3,327

(1)

(28)

Loss from discontinued operations, net of tax

—

(1)

—

(1)

(2)

**

**

Net income

2,403

2,425

3,104

3,536

3,325

(1)

(28)

Dividends and undistributed earnings allocated to participating securities(2)

(28)

(21)

(26)

(30)

(28)

33

—

Preferred stock dividends

(57)

(74)

(79)

(60)

(61)

(23)

(7)

Issuance cost for redeemed preferred stock(3)

—

(34)

(12)

—

—

**

—

Net income available to common stockholders

$      2,318

$      2,296

$      2,987

$      3,446

$      3,236

1

(28)

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

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

Basic earnings per common share:(2)

Net income from continuing operations

$        5.65

$        5.43

$        6.81

$        7.65

$        7.06

4%

(20)%

Net income per basic common share

$        5.65

$        5.43

$        6.81

$        7.65

$        7.06

4

(20)

Diluted earnings per common share:(2)

Net income from continuing operations

$        5.62

$        5.41

$        6.78

$        7.62

$        7.03

4

(20)

Net income per diluted common share

$        5.62

$        5.41

$        6.78

$        7.62

$        7.03

4

(20)

Weighted-average common shares outstanding (in millions):

Basic common shares

410.4

422.5

438.8

450.6

458.6

(3)

(11)

Diluted common shares

412.2

424.3

440.5

452.3

460.1

(3)

(10)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions)

Assets:

Cash and cash equivalents:

Cash and due from banks

$     5,107

$     4,164

$     5,444

$     5,312

$     4,670

23%

9%

Interest-bearing deposits and other short-term investments

21,697

17,582

21,180

29,534

45,825

23

(53)

Total cash and cash equivalents

26,804

21,746

26,624

34,846

50,495

23

(47)

Restricted cash for securitization investors

281

308

234

242

1,779

(9)

(84)

Securities available for sale

89,076

95,261

98,149

101,766

99,165

(6)

(10)

Loans held for investment:

Unsecuritized loans held for investment

257,505

252,468

238,475

226,130

219,182

2

17

Loans held in consolidated trusts

22,961

24,872

22,915

23,467

23,949

(8)

(4)

Total loans held for investment

280,466

277,340

261,390

249,597

243,131

1

15

Allowance for credit losses

(11,308)

(11,430)

(11,573)

(12,346)

(14,017)

(1)

(19)

Net loans held for investment

269,158

265,910

249,817

237,251

229,114

1

17

Loans held for sale

1,155

5,888

6,300

6,522

2,896

(80)

(60)

Premises and equipment, net

4,238

4,210

4,204

4,227

4,277

1

(1)

Interest receivable

1,479

1,460

1,418

1,372

1,380

1

7

Goodwill

14,784

14,782

14,652

14,654

14,654

—

1

Other assets

27,220

22,816

23,979

22,540

21,415

19

27

Total assets

$ 434,195

$ 432,381

$ 425,377

$ 423,420

$ 425,175

—

2

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions)

Liabilities:

Interest payable

$        261

$        281

$        241

$        301

$        288

(7)%

(9)%

Deposits:

Non-interest-bearing deposits

37,781

38,043

36,804

34,994

34,003

(1)

11

Interest-bearing deposits

275,648

272,937

269,134

271,314

276,325

1

—

Total deposits

313,429

310,980

305,938

306,308

310,328

1

1

Securitized debt obligations

13,740

14,994

12,635

10,561

12,071

(8)

14

Other debt:

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

594

820

825

845

842

(28)

(29)

Senior and subordinated notes

26,976

27,219

23,983

24,878

25,467

(1)

6

Other borrowings

4,048

53

58

59

70

**

**

Total other debt

31,618

28,092

24,866

25,782

26,379

13

20

Other liabilities

18,802

17,005

18,153

15,844

14,921

11

26

Total liabilities

377,850

371,352

361,833

358,796

363,987

2

4

Stockholders' equity:

Preferred stock

0

0

0

0

0

—

—

Common stock

7

7

7

7

7

—

—

Additional paid-in capital, net

34,286

34,112

35,051

35,472

33,671

1

2

Retained earnings

53,099

51,006

48,944

46,461

43,167

4

23

Accumulated other comprehensive income (loss)

(4,093)

374

1,360

1,792

1,783

**

**

Treasury stock, at cost

(26,954)

(24,470)

(21,818)

(19,108)

(17,440)

10

55

Total stockholders' equity

56,345

61,029

63,544

64,624

61,188

(8)

(8)

Total liabilities and stockholders' equity

$ 434,195

$ 432,381

$ 425,377

$ 423,420

$ 425,175

—

2

 

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 $192 million in Q1 2022, $151 million in Q4 2021, $123 million in Q3 2021, $175 million in Q2 2021 and $180 million in Q1

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 tangible common equity divided by common shares outstanding. See

"Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(5)

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

(6)

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

(7)

Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period

divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for

additional information on non-GAAP measures.

(8)

Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from

discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be

comparable to similarly-titled measures reported by other companies.

(9)

Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized net income (loss) available to common

stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity ("TCE"). Our

calculation of return on average TCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of

Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(10)

Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted

efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for

additional information on our non-GAAP measures.

(11)

Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted

operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP

Measures" for additional information on our non-GAAP measures.

(12)

Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

(13)

Capital ratios as of the end of Q1 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 Q1

2021 Q4

2021 Q1

(Dollars in millions, except as noted)

AverageBalance

InterestIncome/Expense

Yield/Rate

AverageBalance

InterestIncome/ Expense

Yield/Rate

AverageBalance

InterestIncome/ Expense

Yield/Rate

Interest-earning assets:

Loans, including loans held for sale

$   279,022

$      6,367

9.13%

$   272,805

$      6,451

9.46%

$   246,675

$      5,854

9.49%

Investment securities

94,700

402

1.70

96,421

368

1.53

98,296

391

1.59

Cash equivalents and other

20,360

15

0.29

21,642

12

0.22

43,601

16

0.15

Total interest-earning assets

$   394,082

$      6,784

6.89

$   390,868

$      6,831

6.99

$   388,572

$      6,261

6.45

Interest-bearing liabilities:

Interest-bearing deposits

$   271,823

$         218

0.32

$   269,951

$         222

0.33

$   273,358

$         269

0.39

Securitized debt obligations

13,740

29

0.84

13,775

30

0.87

12,240

32

1.05

Senior and subordinated notes

26,481

131

1.98

25,454

121

1.90

26,968

129

1.91

Other borrowings and liabilities

3,633

9

1.00

2,279

8

1.50

2,210

9

1.62

Total interest-bearing liabilities

$   315,677

$         387

0.49

$   311,459

$         381

0.49

$   314,776

$         439

0.56

Net interest income/spread

$      6,397

6.40

$      6,450

6.50

$      5,822

5.89

Impact of non-interest-bearing funding

0.09

0.10

0.10

Net interest margin

6.49%

6.60%

5.99%

       

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions, except as noted)

Loans Held for Investment (Period-End)

Credit card:

   Domestic credit card

$   107,987

$   108,723

$     99,258

$     95,309

$     91,099

(1)%

19%

   International card businesses

5,975

6,049

5,772

5,708

8,028

(1)

(26)

Total credit card

113,962

114,772

105,030

101,017

99,127

(1)

15

Consumer banking:

   Auto

78,604

75,779

74,716

71,713

67,059

4

17

   Retail banking

1,726

1,867

2,396

3,046

3,143

(8)

(45)

Total consumer banking

80,330

77,646

77,112

74,759

70,202

3

14

Commercial banking:

   Commercial and multifamily real estate

34,354

35,262

33,096

29,616

30,008

(3)

14

   Commercial and industrial

51,820

49,660

46,152

44,205

43,794

4

18

Total commercial banking

86,174

84,922

79,248

73,821

73,802

1

17

Total loans held for investment

$   280,466

$   277,340

$   261,390

$   249,597

$   243,131

1

15

Loans Held for Investment (Average)

Credit card:

   Domestic credit card

$   105,536

$   102,717

$     96,309

$     91,535

$     92,594

3%

14%

   International card businesses

5,944

5,871

5,737

8,139

7,940

1

(25)

Total credit card

111,480

108,588

102,046

99,674

100,534

3

11

Consumer banking:

   Auto

76,892

75,284

73,296

69,543

66,185

2

16

   Retail banking

1,797

2,160

2,700

3,162

3,049

(17)

(41)

Total consumer banking

78,689

77,444

75,996

72,705

69,234

2

14

Commercial banking:

   Commercial and multifamily real estate

34,671

33,591

30,314

30,124

29,856

3

16

   Commercial and industrial

50,502

47,536

44,745

43,960

44,313

6

14

Total commercial banking

85,173

81,127

75,059

74,084

74,169

5

15

Total average loans held for investment

$   275,342

$   267,159

$   253,101

$   246,463

$   243,937

3

13

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

Net Charge-Off (Recovery) Rates

Credit card:

   Domestic credit card

2.12%

1.49%

1.36%

2.28%

2.54%

63 bps

(42) bps

   International card businesses

3.20

0.14

2.72

2.41

2.30

306

90

Total credit card

2.18

1.42

1.43

2.29

2.52

76

(34)

Consumer banking:

   Auto

0.66

0.58

0.18

(0.12)

0.47

8

19

   Retail banking

4.31

6.69

2.45

1.41

1.68

(238)

263

Total consumer banking

0.75

0.75

0.27

(0.06)

0.52

—

23

Commercial banking:

   Commercial and multifamily real estate

—

—

0.01

0.04

0.06

—

(6)

   Commercial and industrial

0.11

(0.03)

0.07

(0.21)

0.11

14

—

Total commercial banking

0.06

(0.02)

0.05

(0.11)

0.09

8

(3)

Total net charge-offs

1.11

0.79

0.67

0.88

1.21

32

(10)

30+ Day Performing Delinquency Rates

Credit card:

   Domestic credit card

2.32%

2.22%

1.93%

1.68%

2.24%

10 bps

8 bps

   International card businesses

3.58

3.42

3.27

2.89

2.51

16

107

Total credit card

2.38

2.28

2.00

1.75

2.26

10

12

Consumer banking:

   Auto

3.85

4.32

3.65

3.26

3.12

(47)

73

   Retail banking

0.74

1.92

1.15

0.79

1.02

(118)

(28)

Total consumer banking

3.78

4.26

3.58

3.16

3.03

(48)

75

Nonperforming Loans and Nonperforming Assets Rates(1)(2)

Credit card:

   International card businesses

0.14%

0.16%

0.16%

0.20%

0.17%

(2) bps

(3) bps

Total credit card

0.01

0.01

0.01

0.01

0.01

—

—

Consumer banking:

   Auto

0.41

0.45

0.36

0.29

0.29

(4)

12

   Retail banking

2.63

2.51

2.20

1.75

1.16

12

147

Total consumer banking

0.46

0.50

0.42

0.35

0.33

(4)

13

Commercial banking:

   Commercial and multifamily real estate

0.98

1.09

0.87

1.02

0.78

(11)

20

   Commercial and industrial

0.69

0.64

0.68

1.03

1.02

5

(33)

Total commercial banking

0.81

0.82

0.76

1.03

0.92

(1)

(11)

Total nonperforming loans

0.38

0.40

0.35

0.41

0.38

(2)

—

Total nonperforming assets

0.40

0.41

0.37

0.43

0.40

(1)

—

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

Three Months Ended March 31, 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

(867)

(88)

(955)

(326)

(23)

(349)

(17)

(1,321)

Recoveries

308

40

348

199

4

203

3

554

Net charge-offs

(559)

(48)

(607)

(127)

(19)

(146)

(14)

(767)

Provision (benefit) for credit losses

559

(14)

545

127

3

130

(27)

648

Allowance build (release) for credit losses

—

(62)

(62)

—

(16)

(16)

(41)

(119)

Other changes(3)

—

(3)

(3)

—

—

—

—

(3)

Balance as of March 31, 2022

7,968

312

8,280

1,852

50

1,902

1,126

11,308

Reserve for unfunded lending commitments:

Balance as of December 31, 2021

—

—

—

—

—

—

165

165

Provision (benefit) for losses on unfunded lending commitments

—

—

—

—

—

—

35

35

Balance as of March 31, 2022

—

—

—

—

—

—

200

200

Combined allowance and reserve as of March 31, 2022

$         7,968

$             312

$         8,280

$         1,852

$             50

$         1,902

$         1,326

$       11,508

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results

Three Months Ended March 31, 2022

(Dollars in millions)

CreditCard

ConsumerBanking

CommercialBanking(4)

Other(4)

Total

Net interest income (loss)

$        3,839

$       2,113

$             607

$      (162)

$      6,397

Non-interest income (loss)

1,458

105

277

(64)

1,776

Total net revenue (loss)

5,297

2,218

884

(226)

8,173

Provision (benefit) for credit losses

545

130

8

(6)

677

Non-interest expense

2,783

1,236

488

44

4,551

Income (loss) from continuing operations before income taxes

1,969

852

388

(264)

2,945

Income tax provision (benefit)

469

202

92

(221)

542

Income (loss) from continuing operations, net of tax

$        1,500

$          650

$             296

$        (43)

$      2,403

Three Months Ended December 31, 2021

(Dollars in millions)

Credit Card

ConsumerBanking

CommercialBanking(4)

Other(4)

Total

Net interest income (loss)

$        3,865

$       2,158

$             595

$      (168)

$      6,450

Non-interest income (loss)

1,261

142

345

(80)

1,668

Total net revenue (loss)

5,126

2,300

940

(248)

8,118

Provision (benefit) for credit losses

423

2

(44)

—

381

Non-interest expense

2,799

1,285

520

74

4,678

Income (loss) from continuing operations before income taxes

1,904

1,013

464

(322)

3,059

Income tax provision (benefit)

451

239

109

(166)

633

Income (loss) from continuing operations, net of tax

$        1,453

$          774

$             355

$      (156)

$      2,426

Three Months Ended March 31, 2021

(Dollars in millions)

CreditCard

ConsumerBanking

CommercialBanking(4)

Other(4)

Total

Net interest income (loss)

$        3,372

$       2,030

$             520

$      (100)

$      5,822

Non-interest income (loss)

1,029

141

240

(119)

1,291

Total net revenue (loss)

4,401

2,171

760

(219)

7,113

Provision (benefit) for credit losses

(492)

(126)

(203)

(2)

(823)

Non-interest expense

2,135

1,117

419

69

3,740

Income (loss) from continuing operations before income taxes

2,758

1,180

544

(286)

4,196

Income tax provision (benefit)

653

278

128

(190)

869

Income (loss) from continuing operations, net of tax

$        2,105

$          902

$             416

$        (96)

$      3,327

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions, except as noted)

Credit Card

Earnings:

Net interest income

$     3,839

$     3,865

$     3,620

$     3,217

$     3,372

(1)%

14%

Non-interest income

1,458

1,261

1,263

1,253

1,029

16

42

Total net revenue

5,297

5,126

4,883

4,470

4,401

3

20

Provision (benefit) for credit losses

545

423

(198)

(635)

(492)

29

**

Non-interest expense

2,783

2,799

2,424

2,263

2,135

(1)

30

Income from continuing operations before income taxes

1,969

1,904

2,657

2,842

2,758

3

(29)

Income tax provision

469

451

627

672

653

4

(28)

Income from continuing operations, net of tax

$     1,500

$     1,453

$     2,030

$      2,170

$     2,105

3

(29)

Selected performance metrics:

Period-end loans held for investment

$ 113,962

$ 114,772

$ 105,030

$  101,017

$   99,127

(1)

15

Average loans held for investment

111,480

108,588

102,046

99,674

100,534

3

11

Average yield on loans outstanding(5)

14.97%

14.94%

14.88%

14.04%

14.49%

3 bps

48 bps

Total net revenue margin(6)

18.56

18.11

18.33

17.59

17.17

45

139

Net charge-off rate

2.18

1.42

1.43

2.29

2.52

76

(34)

30+ day performing delinquency rate

2.38

2.28

2.00

1.75

2.26

10

12

30+ day delinquency rate

2.39

2.29

2.00

1.75

2.27

10

12

Nonperforming loan rate(1)

0.01

0.01

0.01

0.01

0.01

—

—

Purchase volume(7)

$ 133,662

$ 149,982

$ 136,614

$  132,676

$ 108,333

(11)%

23%

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions, except as noted)

Domestic Card

Earnings:

Net interest income

$     3,620

$     3,558

$     3,319

$      2,944

$     3,095

2%

17%

Non-interest income

1,248

1,190

1,200

1,183

959

5

30

Total net revenue

4,868

4,748

4,519

4,127

4,054

3

20

Provision (benefit) for credit losses

559

384

(200)

(561)

(491)

46

**

Non-interest expense

2,564

2,564

2,191

2,034

1,923

—

33

Income from continuing operations before income taxes

1,745

1,800

2,528

2,654

2,622

(3)

(33)

Income tax provision

414

424

597

626

619

(2)

(33)

Income from continuing operations, net of tax

$      1,331

$     1,376

$     1,931

$      2,028

$     2,003

(3)

(34)

Selected performance metrics:

Period-end loans held for investment

$  107,987

$ 108,723

$    99,258

$    95,309

$   91,099

(1)

19

Average loans held for investment

105,536

102,717

96,309

91,535

92,594

3

14

Average yield on loans outstanding(5)

14.82%

14.86%

14.80%

13.91%

14.34%

(4) bps

48 bps

Total net revenue margin(6)

18.28

18.14

18.40

17.66

17.15

14

113

Net charge-off rate

2.12

1.49

1.36

2.28

2.54

63

(42)

30+ day performing delinquency rate

2.32

2.22

1.93

1.68

2.24

10

8

Purchase volume(7)

$  126,284

$ 138,825

$  126,057

$  122,456

$   99,960

(9)%

26%

Refreshed FICO scores:(8)

Greater than 660

70%

71%

71%

72%

70%

(1)

—

660 or below

30

29

29

28

30

1

—

Total

100%

100%

100%

100%

100%

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions, except as noted)

Consumer Banking

Earnings:

Net interest income

$   2,113

$   2,158

$   2,159

$   2,101

$   2,030

(2)%

4%

Non-interest income

105

142

127

144

141

(26)

(26)

Total net revenue

2,218

2,300

2,286

2,245

2,171

(4)

2

Provision (benefit) for credit losses

130

2

(91)

(306)

(126)

**

**

Non-interest expense

1,236

1,285

1,186

1,123

1,117

(4)

11

Income from continuing operations before income taxes

852

1,013

1,191

1,428

1,180

(16)

(28)

Income tax provision

202

239

282

337

278

(15)

(27)

Income from continuing operations, net of tax

$      650

$      774

$      909

$   1,091

$      902

(16)

(28)

Selected performance metrics:

Period-end loans held for investment

$ 80,330

$ 77,646

$ 77,112

$ 74,759

$ 70,202

3

14

Average loans held for investment

78,689

77,444

75,996

72,705

69,234

2

14

Average yield on loans held for investment(5)

7.17%

7.55%

7.78%

7.99%

8.16%

      (38) bps

      (99) bps

Auto loan originations

$ 11,713

$   9,721

$ 11,570

$ 12,959

$   8,833

20%

33%

Period-end deposits

258,359

256,407

252,387

251,155

254,001

1

2

Average deposits

255,265

253,372

251,307

252,488

249,499

1

2

Average deposits interest rate

0.29%

0.30%

0.30%

0.31%

0.36%

        (1) bps

        (7) bps

Net charge-off (recovery) rate

0.75

0.75

0.27

(0.06)

0.52

—

23

30+ day performing delinquency rate

3.78

4.26

3.58

3.16

3.03

(48)

75

30+ day delinquency rate

4.13

4.66

3.88

3.40

3.25

(53)

88

Nonperforming loan rate(1)

0.46

0.50

0.42

0.35

0.33

(4)

13

Nonperforming asset rate(2)

0.52

0.56

0.47

0.40

0.39

(4)

13

Auto—At origination FICO scores:(9)

Greater than 660

51%

50%

49%

48%

47%

1%

4%

621 - 660

20

20

20

20

20

—

—

620 or below

29

30

31

32

33

(1)

(4)

Total

100%

100%

100%

100%

100%

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions, except as noted)

Commercial Banking

Earnings:

Net interest income

$      607

$       595

$       578

$       460

$       520

2%

17%

Non-interest income

277

345

306

257

240

(20)

15

Total net revenue(6)

884

940

884

717

760

(6)

16

Provision (benefit) for credit losses

8

(44)

(53)

(219)

(203)

**

**

Non-interest expense

488

520

459

417

419

(6)

16

Income from continuing operations before income taxes

388

464

478

519

544

(16)

(29)

Income tax provision

92

109

113

123

128

(16)

(28)

Income from continuing operations, net of tax

$      296

$       355

$       365

$       396

$       416

(17)

(29)

Selected performance metrics:

Period-end loans held for investment

$ 86,174

$  84,922

$  79,248

$  73,821

$  73,802

1

17

Average loans held for investment

85,173

81,127

75,059

74,084

74,169

5

15

Average yield on loans held for investment(4)(5)

2.66%

2.71%

2.77%

2.72%

2.76%

(5) bps

(10) bps

Period-end deposits

$ 45,232

$  44,809

$  43,347

$  42,973

$  41,552

1%

9%

Average deposits

45,008

44,206

42,729

42,311

40,107

2

12

Average deposits interest rate

0.12%

0.12%

0.15%

0.14%

0.18%

—

(6) bps

Net charge-off (recovery) rate

0.06

(0.02)

0.05

(0.11)

0.09

8 bps

(3)

Nonperforming loan rate(1)

0.81

0.82

0.76

1.03

0.92

(1)

(11)

Nonperforming asset rate(2)

0.81

0.82

0.76

1.03

0.92

(1)

(11)

Risk category:(10)

Noncriticized

$ 80,586

$  79,014

$  73,218

$  67,481

$  66,299

2%

22%

Criticized performing

4,893

5,209

5,429

5,581

6,821

(6)

(28)

Criticized nonperforming

695

699

601

759

682

(1)

2

Total commercial banking loans

$ 86,174

$  84,922

$  79,248

$  73,821

$  73,802

1

17

Risk category as a percentage of period-endloans held for investment:(10)

Noncriticized

93.5%

93.1%

92.3%

91.4%

89.9%

40 bps

360 bps

Criticized performing

5.7

6.1

6.9

7.6

9.2

(40)

(350)

Criticized nonperforming

0.8

0.8

0.8

1.0

0.9

—

(10)

Total commercial banking loans

100.0%

100.0%

100.0%

100.0%

100.0%

 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total

2022 Q1 vs.

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2021

Q1

(Dollars in millions)

Other

Earnings:

Net interest loss

$        (162)

$        (168)

$        (201)

$          (35)

$        (100)

(4)%

62%

Non-interest loss

(64)

(80)

(22)

(23)

(119)

(20)

(46)

Total net loss(4)

(226)

(248)

(223)

(58)

(219)

(9)

3

Benefit for credit losses

(6)

—

—

—

(2)

**

**

Non-interest expense(11)

44

74

117

163

69

(41)

(36)

Loss from continuing operations before income taxes

(264)

(322)

(340)

(221)

(286)

(18)

(8)

Income tax benefit

(221)

(166)

(140)

(101)

(190)

33

16

Loss from continuing operations, net of tax

$          (43)

$        (156)

$        (200)

$        (120)

$          (96)

(72)

(55)

Selected performance metrics:

Period-end deposits

$      9,838

$      9,764

$    10,204

$    12,180

$    14,775

1

(33)

Average deposits

9,324

9,694

10,999

13,418

15,450

(4)

(40)

Total

Earnings:

Net interest income

$      6,397

$      6,450

$      6,156

$      5,743

$      5,822

(1)%

10%

Non-interest income

1,776

1,668

1,674

1,631

1,291

6

38

Total net revenue

8,173

8,118

7,830

7,374

7,113

1

15

Provision (benefit) for credit losses

677

381

(342)

(1,160)

(823)

78

**

Non-interest expense

4,551

4,678

4,186

3,966

3,740

(3)

22

Income from continuing operations before income taxes

2,945

3,059

3,986

4,568

4,196

(4)

(30)

Income tax provision

542

633

882

1,031

869

(14)

(38)

Income from continuing operations, net of tax

$      2,403

$      2,426

$      3,104

$      3,537

$      3,327

(1)

(28)

Selected performance metrics:

Period-end loans held for investment

$  280,466

$  277,340

$  261,390

$  249,597

$  243,131

1

15

Average loans held for investment

275,342

267,159

253,101

246,463

243,937

3

13

Period-end deposits

313,429

310,980

305,938

306,308

310,328

1

1

Average deposits

309,597

307,272

305,035

308,217

305,056

1

1

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)

(1)

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.

(2)

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.

(3)

Primarily represents foreign currency translation adjustments.

(4)

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.

(5)

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.

(6)

Total net revenue margin is calculated based on total net revenue for the period divided by average loans outstanding during the period.

(7)

Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.

(8)

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.

(9)

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.

(10)

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

(11)

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)

March 31,

2022

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

Regulatory Capital Metrics

Common equity excluding AOCI

$        57,390

$        58,206

$        58,705

$         58,969

$        57,607

Adjustments:

AOCI, net of tax(2)

(20)

(23)

(33)

(5)

(13)

Goodwill, net of related deferred tax liabilities

(14,559)

(14,562)

(14,435)

(14,440)

(14,444)

Intangible assets, net of related deferred tax liabilities

(94)

(108)

(84)

(76)

(81)

Other

(16)

(12)

(15)

(16)

(18)

Common equity Tier 1 capital

$        42,701

$        43,501

$        44,138

$         44,432

$        43,051

Tier 1 capital

$        47,547

$        48,346

$        50,049

$         50,920

$        47,898

Total capital(3)

55,059

56,089

57,851

57,932

54,780

Risk-weighted assets

336,739

332,673

318,729

307,334

295,209

Adjusted average assets(4)

418,957

415,141

411,216

411,032

408,596

Capital Ratios

Common equity Tier 1 capital(5)

12.7%

13.1%

13.8%

14.5%

14.6%

Tier 1 capital(6)

14.1

14.5

15.7

16.6

16.2

Total capital(7)

16.4

16.9

18.2

18.8

18.6

Tier 1 leverage(4)

11.3

11.6

12.2

12.4

11.7

Tangible common equity ("TCE")(8)

8.7

9.9

10.4

10.6

10.1

 

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 adjustedresults 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 applicableamounts measured in accordance with GAAP.

 

2022

Q1

2021

Q4

2021

Q3

2021

Q2

2021

Q1

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

Adjusted diluted EPS:

Net income available to common stockholders (GAAP)

$            2,318

$            2,296

$           2,987

$           3,446

$           3,236

Legal reserve activity, including insurance recoveries

—

—

45

55

—

Adjusted net income available to common stockholders before income tax impacts (non-GAAP)

2,318

2,296

3,032

3,501

3,236

Income tax impacts

—

—

(11)

(13)

—

Adjusted net income available to common stockholders (non-GAAP)

$            2,318

$            2,296

$           3,021

$           3,488

$           3,236

Diluted weighted-average common shares outstanding (in millions) (GAAP)

412.2

424.3

440.5

452.3

460.1

Diluted EPS (GAAP)

$              5.62

$              5.41

$             6.78

$             7.62

$             7.03

Impact of adjustments noted above

—

—

0.08

0.09

—

Adjusted diluted EPS (non-GAAP)

$              5.62

$              5.41

$             6.86

$             7.71

$             7.03

Adjusted efficiency ratio:

Non-interest expense (GAAP)

$            4,551

$            4,678

$           4,186

$           3,966

$           3,740

Legal reserve activity, including insurance recoveries

—

—

(45)

(55)

—

Adjusted non-interest expense (non-GAAP)

$            4,551

$            4,678

$           4,141

$           3,911

$           3,740

Total net revenue (GAAP)

$            8,173

$            8,118

$           7,830

$           7,374

$           7,113

Efficiency ratio (GAAP)

55.68%

57.63%

53.46%

53.78%

52.58%

Impact of adjustments noted above

—

—

          (57) bps

          (74) bps

—

Adjusted efficiency ratio (non-GAAP)

55.68%

57.63%

52.89%

53.04%

52.58%

Adjusted operating efficiency ratio:

Operating expense (GAAP)

$            3,633

$            3,679

$           3,435

$           3,346

$           3,239

Legal reserve activity, including insurance recoveries

—

—

(45)

(55)

—

Adjusted operating expense (non-GAAP)

$            3,633

$            3,679

$           3,390

$           3,291

$           3,239

Total net revenue (GAAP)

$            8,173

$            8,118

$           7,830

$           7,374

$           7,113

Operating efficiency ratio (GAAP)

44.45%

45.32%

43.87%

45.38%

45.54%

Impact of adjustments noted above

—

—

          (57) bps

          (75) bps

—

Adjusted operating efficiency ratio (non-GAAP)

44.45%

45.32%

43.30%

44.63%

45.54%

 

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 commonshare, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures thatmanagement uses in assessing capital adequacy and the level of returns generated. While our non-GAAP measures are widely used by investors, analysts andbank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly-titled measures reported by othercompanies. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

 

2022

2021

2021

2021

2021

(Dollars in millions)

Q1

Q4

Q3

Q2

Q1

Tangible Common Equity (Period-End)

Stockholders' equity

$          56,345

$          61,029

$          63,544

$          64,624

$          61,188

Goodwill and intangible assets(9)

(14,883)

(14,907)

(14,766)

(14,774)

(14,789)

Noncumulative perpetual preferred stock

(4,845)

(4,845)

(5,912)

(6,488)

(4,847)

Tangible common equity

$          36,617

$          41,277

$          42,866

$          43,362

$          41,552

Tangible Common Equity (Average)

Stockholders' equity

$          59,437

$          62,498

$          64,682

$          62,376

$          60,623

Goodwill and intangible assets(9)

(14,904)

(14,847)

(14,777)

(14,788)

(14,807)

Noncumulative perpetual preferred stock

(4,845)

(5,552)

(6,452)

(5,491)

(4,847)

Tangible common equity

$          39,688

$          42,099

$          43,453

$          42,097

$          40,969

Tangible Assets (Period-End)

Total assets

$        434,195

$        432,381

$        425,377

$        423,420

$        425,175

Goodwill and intangible assets(9)

(14,883)

(14,907)

(14,766)

(14,774)

(14,789)

Tangible assets

$        419,312

$        417,474

$        410,611

$        408,646

$        410,386

Tangible Assets (Average)

Total assets

$        430,372

$        427,845

$        424,506

$        424,099

$        421,808

Goodwill and intangible assets(9)

(14,904)

(14,847)

(14,777)

(14,788)

(14,807)

Tangible assets

$        415,468

$        412,998

$        409,729

$        409,311

$        407,001

__________

(1)

Regulatory capital metrics and capital ratios as of March 31, 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