CAPITAL ONE FINANCIAL CORPORATION 
By MCLEAN, Va., Jan. 16, 2014 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2013 of $859 million, or $1.45 per diluted common share, compared to the third quarter of 2013 with net income of $1.1 billion, or $1.86 per diluted common share, and up from the fourth quarter of 2012 with net income of $843 million, or $1.41 per diluted common share. Net income for the full year 2013 was $4.2 billion, or $6.96 per diluted common share, compared with net income of $3.5 billion, or $6.16 per diluted common share, for 2012.
"Capital One delivered strong financial performance in 2013," said Richard D. Fairbank, Chairman and CEO. "We remain focused on resilient growth, disciplined cost management, and returning capital to shareholders in 2014."
All comparisons below are for the fourth quarter of 2013 compared with the third quarter of 2013 unless otherwise noted.
Fourth Quarter 2013 Income Highlights:
-- Total net revenue decreased 2 percent to $5.5 billion.
-- Total non-interest expense increased 4 percent to $3.3 billion.
-- Pre-provision earnings decreased 10 percent to $2.3 billion.
-- Provision for credit losses increased 13 percent to $957 million.
Fourth Quarter 2013 Balance Sheet Highlights:
-- Tier 1 common ratio of 12.2 percent, down 50 basis points
-- Net interest margin of 6.73 percent, down 16 basis points
-- Domestic Card period-end loans increased $3.3 billion, or 5 percent, to
$73.3 billion.
-- Commercial Banking period-end loans increased $2.6 billion, or 6
percent, to $45.0 billion.
-- Consumer Banking:
-- Automobile period-end loans increased $1.1 billion, or 3 percent, to
$31.9 billion.
-- Home loans period-end loans decreased $1.5 billion, or 4 percent, to
$35.3 billion, driven by expected run-off of acquired portfolios.
-- Average loans held for investment in the quarter increased $1.7 billion,
or less than 1 percent, to $192.8 billion.
-- Domestic Card average loans increased $421 million, or less than 1
percent, to $70.4 billion.
-- Commercial Banking average loans increased $1.8 billion, or 4
percent, to $43.4 billion.
-- Consumer Banking:
-- Automobile average loans increased $1.3 billion, or 4 percent,
to $31.4 billion.
-- Home loans average loans decreased by $1.9 billion, or 5
percent, to $36.0 billion, driven by expected run-off of
acquired portfolios.
-- Period-end total deposits decreased $2.3 billion, or 1 percent, to
$204.5 billion, while average deposits declined $2.6 billion, or 1
percent, to $205.7 billion.
-- Deposit interest rates declined 3 basis points to 0.63 percent.
Detailed segment information will be available in the company's Annual Report on Form 10-K for the year ended December 31, 2013.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on January 16, 2014, at 5:00 PM, Eastern Standard 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). Choose "About Us", then 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 January 30, 2014 at 5:00 PM.
Forward Looking Statements
Certain statements in this release are 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, 2012.
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 $204.5 billion in deposits and $297 billion in total assets as of December 31, 2013. 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 more than 900 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia 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
Fourth Quarter 2013((1)(2)
)Table of Contents
Capital One Financial Corporation Consolidated Page
----
Table
1: Financial Summary-Consolidated 1
Table
2: Selected Metrics-Consolidated 2
Table
3: Consolidated Statements of Income 3
Table
4: Consolidated Balance Sheets 4
Table
5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 - 4) 5
Table
6: Average Balances, Net Interest Income and Net Interest Margin 6
Table
7: Loan Information and Performance Statistics 7
Business Segment Detail
Table
8: Financial & Statistical Summary-Credit Card Business 8
Table
9: Financial & Statistical Summary-Consumer Banking Business 9
Table
10: Financial & Statistical Summary-Commercial Banking Business 10
Table
11: Financial & Statistical Summary-Other and Total 11
Table
12: Notes to Loan and Business Segment Disclosures (Tables 7 - 11) 12
Other
Table
13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I 13
___________
((1)) The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our Annual Report on Form 10-K for the period ended December 31, 2013 once it is filed with the Securities and Exchange Commission.
((2)) References to ING Direct refer to the business and assets acquired and liabilities assumed in the February 17, 2012 acquisition. References to the 2012 U.S. card acquisition refer to the May 1, 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary--Consolidated((1))
2013 2013 2012
(Dollars in millions, except per share data and as noted) (unaudited) Q4 Q3 Q4
--- --- ---
Earnings
--------
Net interest income $4,423 $4,560 $4,528
Non-interest income(2) 1,121 1,091 1,096
----- -----
Total net revenue(3) 5,544 5,651 5,624
----- ----- -----
Provision for credit losses 957 849 1,151
Non-interest expense:
Marketing 427 299 393
Amortization of intangibles(4) 166 161 191
Acquisition-related(5) 60 37 69
Operating expenses 2,627 2,650 2,602
Total non-interest expense 3,280 3,147 3,255
----- ----- -----
Income from continuing operations before income taxes 1,307 1,655 1,218
Income tax provision 425 525 370
--- --- ---
Income from continuing operations, net of tax 882 1,130 848
Loss from discontinued operations, net of tax(2) (23) (13) (5)
--- --- ---
Net income 859 1,117 843
Dividends and undistributed earnings allocated to participating securities(6) (4) (5) (3)
Preferred stock dividends(6) (13) (13) (15)
Net income available to common stockholders $842 $1,099 $825
==== ====== ====
Common Share Statistics
-----------------------
Basic EPS:(6)
Net income from continuing operations, net of tax $1.51 $1.91 $1.43
Loss from discontinued operations, net of tax (0.04) (0.02) (0.01)
Net income available to common stockholders per common share $1.47 $1.89 $1.42
===== ===== =====
Diluted EPS:(6)
Net income from continuing operations, net of tax $1.48 $1.88 $1.42
Loss from discontinued operations, net of tax (0.03) (0.02) (0.01)
Net income available to common stockholders per common share $1.45 $1.86 $1.41
===== ===== =====
Weighted average common shares outstanding (in millions) for:
Basic EPS 573.4 582.3 579.2
Diluted EPS 582.6 591.1 585.6
Common shares outstanding (period end, in millions) 572.7 582.0 582.2
Dividends per common share $0.30 $0.30 $0.05
Tangible book value per common share (period end)(7) 42.47 43.19 40.23
Balance Sheet (Period End)
-------------------------
Loans held for investment(8) $197,199 $191,814 $205,889
Interest-earning assets 265,170 259,152 280,096
Total assets 297,048 289,888 312,918
Interest-bearing deposits 181,880 184,553 190,018
Total deposits 204,523 206,834 212,485
Borrowings 40,654 31,845 49,910
Common equity 40,891 40,897 39,646
Total stockholders' equity 41,744 41,750 40,499
Balance Sheet (Quarterly Average Balances)
-----------------------------------------
Loans held for investment(8) $192,813 $191,135 $202,944
Interest-earning assets 262,957 264,796 277,886
Total assets 294,108 294,939 308,096
Interest-bearing deposits 184,206 186,752 192,122
Total deposits 205,706 208,340 213,494
Borrowings 36,463 36,355 44,189
Common equity 41,610 40,431 39,359
Total stockholders' equity 42,463 41,284 40,212
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics--Consolidated((1))
2013 2013 2012
(Dollars in millions, except per share data and as noted) (unaudited) Q4 Q3 Q4
--- --- ---
Performance Metrics
-------------------
Net interest income growth (quarter over quarter) (3) % - % (3) %
Non-interest income growth (quarter over quarter) 3 1 (4)
Total net revenue growth (quarter over quarter) (2) - (3)
Total net revenue margin(9) 8.43 8.54 8.10
Net interest margin(10) 6.73 6.89 6.52
Return on average assets(11) 1.20 1.53 1.10
Return on average tangible assets(12) 1.27 1.62 1.16
Return on average common equity(13) 8.32 11.00 8.44
Return on average tangible common equity(14) 13.81 18.08 14.42
Non-interest expense as a % of average loans held for investment(15) 6.80 6.59 6.42
Efficiency ratio(16) 59.16 55.69 57.88
Effective income tax rate for continuing operations 32.5 31.7 30.4
Full-time equivalent employees (in thousands), period end 42.0 39.6 39.6
Credit Quality Metrics(8)
------------------------
Allowance for loan and lease losses $4,315 $4,333 $5,156
Allowance as a % of loans held for investment 2.19 % 2.26 % 2.50 %
Allowance as a % of loans held for investment (excluding acquired loans) 2.54 2.66 3.02
Net charge-offs $969 $917 $1,150
Net charge-off rate(17) 2.01 % 1.92 % 2.26 %
Net charge-off rate (excluding acquired loans)(17) 2.37 2.29 2.78
30+ day performing delinquency rate 2.63 2.54 2.70
30+ day performing delinquency rate (excluding acquired loans) 3.08 3.01 3.29
30+ day delinquency rate 2.96 2.88 3.09
30+ day delinquency rate (excluding acquired loans) 3.46 3.41 3.77
Capital Ratios (18)
------------------
Tier 1 common ratio 12.2 % 12.7 % 11.0 %
Tier 1 risk-based capital ratio 12.6 13.1 11.3
Total risk-based capital ratio 14.7 15.3 13.6
Tangible common equity ("TCE") ratio 8.7 9.2 7.9
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income((1))
Three Months Ended Year Ended
------------------ ----------
December 31, September December December December
30, 31, 31, 31,
(Dollars in millions, except per share data) (unaudited) 2013 2013 2012 2013 2012
------------------------------------------------------- ---- ---- ---- ---- ----
Interest income:
Loans, including loans held for sale $4,398 $4,579 $4,727 $18,222 $17,544
Investment securities 414 396 361 1,575 1,329
Other 27 23 27 101 91
Total interest income 4,839 4,998 5,115 19,898 18,964
----- ----- ----- ------ ------
Interest expense:
Deposits 288 309 348 1,241 1,403
Securitized debt obligations 40 42 58 183 271
Senior and subordinated notes 75 76 85 315 345
Other borrowings 13 11 96 53 356
Total interest expense 416 438 587 1,792 2,375
--- --- --- ----- -----
Net interest income 4,423 4,560 4,528 18,106 16,589
Provision for credit losses 957 849 1,151 3,453 4,415
Net interest income after provision for credit losses 3,466 3,711 3,377 14,653 12,174
----- ----- ----- ------ ------
Non-interest income:(2)
Service charges and other customer-related fees 504 530 595 2,118 2,106
Interchange fees, net 489 476 459 1,896 1,647
Net other-than-temporary impairment losses recognized in earnings (1) (11) (12) (41) (52)
Bargain purchase gain(19) - - - - 594
Other 129 96 54 305 512
Total non-interest income 1,121 1,091 1,096 4,278 4,807
----- ----- ----- ----- -----
Non-interest expense:
Salaries and associate benefits 1,103 1,145 1,039 4,432 3,876
Occupancy and equipment 429 369 380 1,504 1,327
Marketing 427 299 393 1,373 1,364
Professional services 347 320 354 1,303 1,270
Communications and data processing 218 224 205 885 778
Amortization of intangibles(4) 166 161 191 671 609
Acquisition-related(5) 60 37 69 193 336
Other 530 592 624 2,153 2,386
Total non-interest expense 3,280 3,147 3,255 12,514 11,946
----- ----- ----- ------ ------
Income from continuing operations before income taxes 1,307 1,655 1,218 6,417 5,035
Income tax provision 425 525 370 2,025 1,301
--- --- --- ----- -----
Income from continuing operations, net of tax 882 1,130 848 4,392 3,734
Loss from discontinued operations, net of tax(2) (23) (13) (5) (233) (217)
--- --- --- ---- ----
Net income 859 1,117 843 4,159 3,517
Dividends and undistributed earnings allocated to participating securities(6) (4) (5) (3) (17) (15)
Preferred stock dividends(6) (13) (13) (15) (53) (15)
Net income available to common stockholders $842 $1,099 $825 $4,089 $3,487
==== ====== ==== ====== ======
Basic earnings per common share:(6)
Net income from continuing operations $1.51 $1.91 $1.43 $7.45 $6.60
Loss from discontinued operations (0.04) (0.02) (0.01) (0.40) (0.39)
Net income per basic common share $1.47 $1.89 $1.42 $7.05 $6.21
===== ===== ===== ===== =====
Diluted earnings per common share:(6)
Net income from continuing operations $1.48 $1.88 $1.42 $7.35 $6.54
Loss from discontinued operations (0.03) (0.02) (0.01) (0.39) (0.38)
Net income per diluted common share $1.45 $1.86 $1.41 $6.96 $6.16
===== ===== ===== ===== =====
Weighted average common shares outstanding (in millions) for:
Basic EPS 573.4 582.3 579.2 579.7 561.1
Diluted EPS 582.6 591.1 585.6 587.6 566.5
Dividends paid per common share $0.30 $0.30 $0.05 $0.95 $0.20
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets((1))
December 31, September 30, December 31,
(Dollars
in
millions)(unaudited) 2013 2013 2012
-------------------- ---- ---- ----
Assets:
Cash
and
cash
equivalents:
Cash
and
due
from
banks $2,821 $2,855 $3,440
Interest-
bearing
deposits
with
banks 3,131 2,481 7,617
Federal
funds
sold
and
securities
purchased
under
agreements
to
resell 339 382 1
--- --- ---
Total
cash
and
cash
equivalents 6,291 5,718 11,058
Restricted
cash
for
securitization
investors 874 390 428
Securities
available
for
sale,
at
fair
value 41,800 43,132 63,979
Securities
held
to
maturity,
at
carrying
value 19,132 18,276 9
Loans
held
for
investment:
Unsecuritized
loans
held
for
investment 157,651 152,332 162,059
Restricted
loans
for
securitization
investors 39,548 39,482 43,830
------ ------ ------
Total
loans
held
for
investment 197,199 191,814 205,889
Less:
Allowance
for
loan
and
lease
losses (4,315) (4,333) (5,156)
------ ------ ------
Net
loans
held
for
investment 192,884 187,481 200,733
Loans
held
for
sale,
at
lower
of
cost
or
fair
value 218 180 201
Premises
and
equipment,
net 3,839 3,792 3,587
Interest
receivable 1,418 1,304 1,694
Goodwill 13,978 13,906 13,904
Other 16,614 15,709 17,325
------ ------ ------
Total
assets $297,048 $289,888 $312,918
======== ======== ========
Liabilities:
Interest
payable $307 $276 $450
Customer
deposits:
Non-
interest
bearing
deposits 22,643 22,281 22,467
Interest-
bearing
deposits 181,880 184,553 190,018
------- ------- -------
Total
customer
deposits 204,523 206,834 212,485
Securitized
debt
obligations 10,289 9,544 11,398
Other
debt:
Federal
funds repurchase
purchased
and
securities
loaned
or
sold
under
agreements
to 915 1,686 1,248
Senior
and
subordinated
notes 13,134 12,395 12,686
Other
borrowings 16,316 8,220 24,578
------ ----- ------
Total
other
debt 30,365 22,301 38,512
Other
liabilities 9,820 9,183 9,574
----- ----- -----
Total
liabilities 255,304 248,138 272,419
------- ------- -------
Stockholders'
equity:
Preferred
stock - - -
Common
stock 6 6 6
Additional
paid-
in
capital,
net 26,526 26,426 26,188
Retained
earnings 20,404 19,731 16,853
Accumulated
other
comprehensive
income
("AOCI") (872) (839) 739
Treasury
stock,
at
cost (4,320) (3,574) (3,287)
------ ------ ------
Total
stockholders'
equity 41,744 41,750 40,499
------ ------ ------
Total
liabilities
and
stockholders'
equity $297,048 $289,888 $312,918
======== ======== ========
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 - 4)
((1) )Certain prior period amounts have been reclassified to conform to the current period presentation.
((2) )We recorded a provision for mortgage representation and warranty losses of $33 million in Q4 2013. We recorded a benefit for mortgage representation and warranty losses of $4 million in Q3 2013. We did not record a provision for mortgage representation and warranty losses in Q4 2012. The majority of the provision for representation and warranty losses is generally included net of tax in discontinued operations, with the remaining amount included pre-tax in non-interest income. The mortgage representation and warranty reserve was $1.2 billion as of both December 31, 2013 and September 30, 2013, and $899 million as of December 31, 2012.
((3) )Total net revenue was reduced by $185 million in Q4 2013, $154 million in Q3 2013 and $318 million in Q4 2012 for the estimated uncollectible amount of billed finance charges and fees.
((4) )Includes purchased credit card relationship ("PCCR") intangible amortization of $102 million in Q4 2013, $106 million in Q3 2013 and $127 million in Q4 2012, the substantial majority of which is attributable to the 2012 U.S. card acquisition. Includes core deposit intangible amortization of $38 million in Q4 2013, $40 million in Q3 2013 and $47 million in Q4 2012.
((5) )Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense.
((6) )Dividends and undistributed earnings allocated to participating securities, earnings per share, and preferred stock dividends are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.
((7) )Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for additional information.
((8) )Loans held for investment includes acquired loans accounted for based on cash flows expected to be collected. We use the term "acquired loans" to refer to a limited portion of the credit card loans acquired in the 2012 U.S. card acquisition and the substantial majority of loans acquired in the ING Direct and Chevy Chase Bank acquisitions, which were recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3"). See "Table 12: Notes to Loan and Business Segment Disclosures (Tables 7 -- 11)" for information on the amount of acquired loans for each of the periods presented.
((9) )Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
((10) )Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
((11) )Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period.
((12) )Calculated based on annualized income from continuing operations, net of tax, for the period divided average tangible assets for the period. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for additional information.
((13) )Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly titled measures reported by other companies.
((14) )Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Our calculation of return on average tangible common equity may not be comparable to similarly titled measures reported by other companies. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for additional information.
((15) )Calculated based on annualized non-interest expense for the period divided by average loans held for investment for the period.
((16) )Calculated based on non-interest expense for the period divided by total net revenue for the period.
((17) )Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
((18) )Capital ratios are calculated under Basel I. Ratios as of the end of Q4 2013 are preliminary and therefore subject to change. TCE ratio is a non-GAAP measure. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for information on the calculation of each of these ratios.
((19) )A bargain purchase gain of $594 million was recognized in earnings in Q1 2012 attributable to the February 17, 2012 acquisition of ING Direct. The bargain purchase gain represents the excess of the fair value of the net assets acquired in the ING Direct acquisition as of the acquisition date over the consideration transferred.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin((1))
2013 Q4 2013 Q3 2012 Q4
------- ------- -------
Average Interest Average
Balance Interest Yield/ Average Interest Yield/
Balance Income/ Yield/ Income/ Rate(2) Balance Income/ Rate(2)
Expense(2) Rate(2) Expense(2) Expense(2)
---------- ------- ---------- ----------
(Dollars in millions)(unaudited)
-------------------------------
Interest-earning assets:
Loans, including loans held for sale $193,368 $4,398 9.10 % $195,839 $4,579 9.35 % $203,132 $4,727 9.31 %
Investment securities(3) 62,919 414 2.63 63,317 396 2.50 64,174 361 2.25
Cash equivalents and other 6,670 27 1.62 5,640 23 1.63 10,580 27 1.02
Total interest-earning assets $262,957 $4,839 7.36 % $264,796 $4,998 7.55 % $277,886 $5,115 7.36 %
-------- ------ ---- -------- ------ ---- -------- ------ ----
Interest-bearing liabilities:
Interest-bearing deposits $184,206 $288 0.63 % $186,752 $309 0.66 % $192,122 $348 0.72 %
Securitized debt obligations 9,873 40 1.62 10,243 42 1.64 12,119 58 1.91
Senior and subordinated notes 12,765 75 2.35 12,314 76 2.47 11,528 85 2.95
Other borrowings 13,825 13 0.38 13,798 11 0.32 20,542 96 1.87
Total interest-bearing liabilities $220,669 $416 0.75 % $223,107 $438 0.79 % $236,311 $587 0.99 %
-------- ---- -------- ---- -------- ----
Net interest income/spread $4,423 6.61 % $4,560 6.76 % $4,528 6.37 %
====== ====== ======
Impact of non-interest bearing funding 0.12 0.13 0.15
Net interest margin 6.73 % 6.89 % 6.52 %
==== ==== ====
Year Ended December 31,
-----------------------
2013 2012
---- ----
Average Interest Yield/ Average Interest
Balance Income/ Balance Income/ Yield/
Expense(2) Rate(2) Expense(2) Rate(2)
---------- ------- ---------- -------
(Dollars in millions)(unaudited)
-------------------------------
Interest-earning assets:
Loans, including loans held for sale $196,609 $18,222 9.27 % $188,466 $17,544 9.31 %
Investment securities(3) 63,522 1,575 2.48 57,424 1,329 2.31
Cash equivalents and other 6,292 101 1.61 9,189 91 0.99
Total interest-earning assets $266,423 $19,898 7.47 % $255,079 $18,964 7.43 %
-------- ------- ---- -------- ------- ----
Interest-bearing liabilities:
Interest-bearing deposits $187,700 $1,241 0.66 % $183,314 $1,403 0.77 %
Securitized debt obligations 10,697 183 1.71 14,138 271 1.92
Senior and subordinated notes 12,440 315 2.53 11,012 345 3.13
Other borrowings 14,670 53 0.36 12,875 356 2.77
----
Total interest-bearing liabilities $225,507 $1,792 0.79 % $221,339 $2,375 1.07 %
-------- ------ ---- -------- ----
Net interest income/spread $18,106 6.68 % $16,589 6.36 %
======= =======
Impact of non-interest bearing funding 0.12 0.14
Net interest margin 6.80 % 6.50 %
==== ====
___________
((1) )Certain prior period amounts have been reclassified to conform to the current period presentation.
((2)) Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.
((3)) Prior to Q2 2013, average balances for investment securities were calculated based on fair value amounts. Effective Q2 2013, average balances are calculated based on the amortized cost of investment securities. The impact of this change on prior period yields is not material.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics((1)(2))
2013 2013 2012
(Dollars in millions)(unaudited) Q4 Q3 Q4
--- --- ---
Period-end Loans Held For Investment
------------------------------------
Credit card:
Domestic credit card $73,255 $69,936 $83,141
International credit card 8,050 8,031 8,614
----- ----- -----
Total credit card 81,305 77,967 91,755
------ ------ ------
Consumer banking:
Automobile 31,857 30,803 27,123
Home loan 35,282 36,817 44,100
Retail banking 3,623 3,665 3,904
----- ----- -----
Total consumer banking 70,762 71,285 75,127
------ ------ ------
Commercial banking:
Commercial and multifamily real estate 20,750 19,523 17,732
Commercial and industrial 23,309 21,848 19,892
------ ------ ------
Total commercial lending 44,059 41,371 37,624
Small-ticket commercial real estate 952 1,028 1,196
--- ----- -----
Total commercial banking 45,011 42,399 38,820
------ ------ ------
Other loans 121 163 187
Total $197,199 $191,814 $205,889
======== ====== ======
Average Loans Held For Investment
---------------------------------
Credit card:
Domestic credit card $70,368 $69,947 $80,718
International credit card 7,899 7,782 8,372
----- ----- -----
Total credit card 78,267 77,729 89,090
------ ------ ------
Consumer banking:
Automobile 31,424 30,157 26,881
Home loan 35,974 37,852 45,250
Retail banking 3,635 3,655 3,967
----- ----- -----
Total consumer banking 71,033 71,664 76,098
------ ------ ------
Commercial banking:
Commercial and multifamily real estate 19,928 19,047 17,005
Commercial and industrial 22,445 21,491 19,344
------ ------ ------
Total commercial lending 42,373 40,538 36,349
Small-ticket commercial real estate 986 1,038 1,249
--- ----- -----
Total commercial banking 43,359 41,576 37,598
------ ------ ------
Other loans 154 166 158
--- ---
Total $192,813 $191,135 $202,944
======== ====== ======
Net Charge-off Rates
--------------------
Credit card:
Domestic credit card 3.89 % 3.67 % 4.35 %
International credit card 4.74 4.71 3.99
Total credit card 3.98 3.78 4.32
---- ---- ----
Consumer banking:
Automobile 2.30 2.01 2.24
Home loan 0.03 0.06 (0.06)
Retail banking 1.09 1.38 2.45
Total consumer banking 1.09 0.95 0.88
---- ---- ----
Commercial banking:
Commercial and multifamily real estate (0.11) (0.11) (0.08)
Commercial and industrial 0.04 0.18 0.13
Total commercial lending (0.03) 0.04 0.03
Small-ticket commercial real estate (0.81) 1.26 2.02
Total commercial banking (0.05) 0.07 0.10
----- ---- ----
Other loans 4.68 12.17 24.23
Total 2.01 % 1.92 % 2.26 %
==== ==== ====
30+ Day Performing Delinquency Rates
------------------------------------
Credit card:
Domestic credit card 3.43 % 3.46 % 3.61 %
International credit card 3.71 3.86 3.58
Total credit card 3.46 % 3.51 % 3.61 %
---- ---- ----
Consumer banking:
Automobile 6.85 % 6.29 % 7.00 %
Home loan 0.16 0.14 0.13
Retail banking 0.69 0.68 0.76
Total consumer banking 3.20 % 2.82 % 2.65 %
---- ---- ----
Nonperforming Asset Rates(3)
---------------------------
Credit card:
International credit card 1.10 % 1.16 % 1.16 %
---- ---- ----
Total credit card 0.11 % 0.12 % 0.11 %
---- ---- ----
Consumer banking:
Automobile(10) 1.11 % 0.92 % 0.95 %
Home loan 1.14 1.08 1.00
Retail banking 1.13 1.10 1.85
Total consumer banking 1.12 % 1.01 % 1.02 %
---- ---- ----
Commercial banking:
Commercial and multifamily real estate 0.29 % 0.40 % 0.82 %
Commercial and industrial 0.44 0.65 0.72
Total commercial lending 0.37 % 0.53 % 0.77 %
Small-ticket commercial real estate 0.43 1.49 0.97
Total commercial banking 0.37 % 0.56 % 0.77 %
---- ---- ----
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial & Statistical Summary--Credit Card Business((1)(2))
2013 2013 2012
(Dollars in millions) (unaudited) Q4 Q3 Q4
-------------------------------- --- --- ---
Credit Card
-----------
Earnings:
Net interest income $2,576 $2,757 $2,849
Non-interest income 833 834 883
--- --- ---
Total net revenue 3,409 3,591 3,732
Provision for credit losses 751 617 1,000
Non-interest expense 1,868 1,904 1,933
----- ----- -----
Income from continuing operations before taxes 790 1,070 799
Income tax provision 274 376 279
Income from continuing operations, net of tax $516 $694 $520
==== ==== ====
Selected performance metrics:
Period-end loans held for investment $81,305 $77,967 $91,755
Average loans held for investment 78,267 77,729 89,090
Average yield on loans held for investment(4) 14.64 % 15.72 % 14.33 %
Total net revenue margin(5) 17.43 18.48 16.76
Net charge-off rate 3.98 3.78 4.32
30+ day performing delinquency rate 3.46 3.51 3.61
30+ day delinquency rate 3.54 3.60 % 3.69
Nonperforming loan rate(3) 0.11 0.12 0.11
Card loan premium amortization and other intangible accretion(6) $39 $45 $65
PCCR intangible amortization 102 106 127
Purchase volume(7) 54,245 50,943 52,853
Domestic Card
-------------
Earnings:
Net interest income $2,303 $2,492 $2,583
Non-interest income 747 749 798
--- --- ---
Total net revenue 3,050 3,241 3,381
Provision for credit losses 679 529 911
Non-interest expense 1,664 1,713 1,727
----- ----- -----
Income from continuing operations before taxes 707 999 743
Income tax provision 252 355 263
Income from continuing operations, net of tax $455 $644 $480
==== ==== ====
Selected performance metrics:
Period-end loans held for investment $73,255 $69,936 $83,141
Average loans held for investment 70,368 69,947 80,718
Average yield on loans held for investment(4) 14.44 % 15.65 % 14.20 %
Total net revenue margin(5) 17.34 18.53 16.75
Net charge-off rate 3.89 3.67 4.35
30+ day performing delinquency rate 3.43 3.46 3.61
30+ day delinquency rate 3.43 3.46 % 3.61
Purchase volume(7) $50,377 $47,420 $48,918
International Card
------------------
Earnings:
Net interest income $273 $265 $266
Non-interest income 86 85 85
--- --- ---
Total net revenue 359 350 351
Provision for credit losses 72 88 89
Non-interest expense 204 191 206
--- --- ---
Income from continuing operations before taxes 83 71 56
Income tax provision 22 21 16
--- ---
Income from continuing operations, net of tax $61 $50 $40
=== === ===
Selected performance metrics:
Period-end loans held for investment $8,050 $8,031 $8,614
Average loans held for investment 7,899 7,782 8,372
Average yield on loans held for investment 16.48 % 16.35 % 15.59 %
Total net revenue margin 18.20 17.99 16.77
Net charge-off rate 4.74 4.71 3.99
30+ day performing delinquency rate 3.71 3.86 3.58
30+ day delinquency rate 4.56 4.78 4.49
Nonperforming loan rate(3) 1.10 1.16 1.16
Purchase volume(7) $3,868 $3,523 $3,935
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary--Consumer Banking Business((1)(2))
2013 2013 2012
(Dollars in millions) (unaudited) Q4 Q3 Q4
-------------------------------- --- --- ---
Consumer Banking
----------------
Earnings:
Net interest income $1,468 $1,481 $1,503
Non-interest income 195 184 161
--- --- ---
Total net revenue 1,663 1,665 1,664
Provision for credit losses 212 202 169
Non-interest expense 1,018 927 992
----- --- ---
Income from continuing operations before taxes 433 536 503
Income tax provision 154 191 178
--- ---
Income from continuing operations, net of tax $279 $345 $325
==== ==== ====
Selected performance metrics:
Period-end loans held for investment $70,762 $71,285 $75,127
Average loans held for investment 71,033 71,664 76,098
Average yield on loans held for investment 6.30 % 6.21 % 5.94 %
Auto loan originations $4,322 $4,752 $3,479
Period-end deposits 167,652 168,437 172,396
Average deposits 167,870 169,082 172,654
Deposit interest expense rate 0.60 % 0.63 % 0.68 %
Core deposit intangible amortization $32 $34 $39
Net charge-off rate 1.09 % 0.95 % 0.88 %
30+ day performing delinquency rate 3.20 2.82 2.65
30+ day delinquency rate 3.89 3.46 3.34
Nonperforming loan rate(3) 0.86 0.79 0.85
Nonperforming asset rate(3)(10) 1.12 1.01 1.02
Period-end loans serviced for others $7,665 $14,043 $15,333
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary--Commercial Banking Business((1)(2))
2013 2013 2012
(Dollars in millions) (unaudited) Q4 Q3 Q4
-------------------------------- --- --- ---
Commercial Banking
------------------
Earnings:
Net interest income $504 $480 $450
Non-interest income 131 87 86
--- --- ---
Total net revenue(8) 635 567 536
Provision for credit losses (6) 31 (20)
Non-interest expense 326 266 294
--- --- ---
Income from continuing operations before taxes 315 270 262
Income tax provision 113 96 93
Income from continuing operations, net of tax $202 $174 $169
==== ==== ====
Selected performance metrics:
Period-end loans held for investment $45,011 $42,399 $38,820
Average loans held for investment 43,359 41,576 37,598
Average yield on loans held for investment(8) 3.92 % 3.87 % 4.15 %
Period-end deposits $30,567 $30,592 $29,866
Average deposits 31,033 30,685 29,476
Deposit interest expense rate 0.25 % 0.27 % 0.28 %
Core deposit intangible amortization $6 $6 $8
Net charge-off rate (0.05) % 0.07 % 0.10 %
Nonperforming loan rate(3) 0.33 0.47 0.73
Nonperforming asset rate(3) 0.37 0.56 0.77
Risk category:(9)
Noncriticized $43,593 $40,940 $36,839
Criticized performing 1,007 968 1,340
Criticized nonperforming 149 201 282
--- --- ---
Total risk-rated loans 44,749 42,109 38,461
Acquired commercial loans 262 290 359
Total commercial loans $45,011 $42,399 $38,820
======= ===== =====
% of period-end commercial loans held for investment:
Noncriticized 96.9 % 96.5 % 94.9 %
Criticized performing 2.2 2.3 3.5
Criticized nonperforming 0.3 0.5 0.7
--- --- ---
Total risk-rated loans 99.4 99.3 99.1
Acquired commercial loans 0.6 0.7 0.9
Total commercial loans 100.0 % 100.0 % 100.0 %
===== ===== =====
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary--Other and Total((1)(2))
2013 2013 2012
(Dollars in
millions)
(unaudited) Q4 Q3 Q4
--- --- ---
Other
-----
Earnings:
Net interest
expense $(125) $(158) $(274)
Non-interest
income (38) (14) (34)
--- --- ---
Total net revenue (163) (172) (308)
Provision for
credit losses - (1) 2
Non-interest
expense 68 50 36
--- --- ---
Loss from
continuing
operations
before taxes (231) (221) (346)
Income tax
benefit (116) (138) (180)
---- ---- ----
Loss from
continuing
operations, net
of tax $(115) $(83) $(166)
===== ==== =====
Selected
performance
metrics:
Period-end loans
held for
investment $121 $163 $187
Average loans
held for
investment 154 166 158
Period-end
deposits 6,304 7,805 10,223
Average deposits 6,803 8,573 11,364
Total
-----
Earnings:
Net interest
income $4,423 $4,560 $4,528
Non-interest
income 1,121 1,091 1,096
----- ----- -----
Total net revenue 5,544 5,651 5,624
Provision for
credit losses 957 849 1,151
Non-interest
expense 3,280 3,147 3,255
----- ----- -----
Income from
continuing
operations
before taxes 1,307 1,655 1,218
Income tax
provision 425 525 370
--- ---
Income from
continuing
operations, net
of tax $882 $1,130 $848
==== ====== ====
Selected
performance
metrics:
Period-end loans
held for
investment $197,199 $191,814 $205,889
Average loans
held for
investment 192,813 191,135 202,944
Period-end
deposits 204,523 206,834 212,485
Average deposits 205,706 208,340 213,494
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Notes to Loan and Business Segment Disclosures (Tables 7 - 11)
((1)) Certain prior period amounts have been reclassified to conform to the current period presentation.
((2)) Loans acquired as part of the ING Direct, Chevy Chase Bank and 2012 U.S. card acquisitions are included in the denominator used in calculating our reported credit quality metrics. We therefore present certain reported credit quality metrics, adjusted to exclude from the denominator acquired loans accounted for based on estimated cash flows expected to be collected over the life of the loans (formerly "SOP 03-3"). The table below presents amounts related to acquired loans accounted for under SOP 03-3.
2013 2013 2012
(Dollars in millions)
(unaudited) Q4 Q3 Q4
--------------------- --- --- ---
Acquired loans accounted for
under SOP 03-3:
Period-end unpaid principal
balance $29,761 $31,377 $38,477
Period-end loans held for
investment 28,550 30,080 37,134
Average loans held for
investment 29,055 30,713 37,899
((3)) Nonperforming assets consist of nonperforming loans, real estate owned ("REO") and other foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each category divided by the combined period-end total of loans held for investment, REO and other foreclosed assets for each respective category. The nonperforming loan ratios are calculated based on nonperforming loans for each category divided by period-end loans held for investment for each respective category.
((4)) The transfer of the Best Buy Stores, L.P. ("Best Buy") portfolio to held for sale resulted in an increase in the average yield for Domestic Card and Total Credit Card of 121 basis points and 110 basis points, respectively, in Q3 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.
((5)) The transfer of the Best Buy portfolio to held for sale resulted in an increase in the net revenue margin for Domestic Card and Total Credit Card of 136 basis points and 123 basis points, respectively, in Q3 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.
((6)) Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the 2012 U.S. card acquisition.
((7)) Includes credit card purchase transactions, net of returns for both loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.
((8)) Because some of our tax-related commercial investments generate tax-exempt income or tax credits, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35%.
((9)) Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
((10)) As reported in the third quarter 2013 Form 10-Q, we have begun including the net realizable value of auto loans that have been charged down as a result of a bankruptcy filing in addition to repossessed assets obtained in satisfaction of auto loans. Prior period amounts have been adjusted to conform to current period presentation.
CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I
In addition to disclosing regulatory capital measures under Basel I, we also report certain non-GAAP measures that management uses in assessing its capital adequacy. These non-GAAP measures include average tangible assets, average tangible common equity, tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our Basel I regulatory capital and non-GAAP measures. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
2013 2013 2012
(Dollars in millions)(unaudited) Q4 Q3 Q4
--- --- ---
Average Equity to Non-GAAP Average Tangible Common Equity
---------------------------------------------------------
Average total stockholders' equity $42,463 $41,284 $40,212
Adjustments: Average goodwill and other intangible assets (1) (16,564) (15,829) (16,340)
Noncumulative perpetual preferred stock(2) (853) (853) (853)
Average tangible common equity(3) $25,046 $24,602 $23,019
======= ======= =======
Stockholders' Equity to Non-GAAP Tangible Common Equity
-------------------------------------------------------
Total stockholders' equity $41,744 $41,750 $40,499
Adjustments: Goodwill and other intangible assets (1) (16,568) (15,760) (16,224)
Noncumulative perpetual preferred stock(2) (853) (853) (853)
Tangible common equity(3) $24,323 $25,137 $23,422
======= ======= =======
Total Assets to Tangible Assets
-------------------------------
Total assets $297,048 $289,888 $312,918
Adjustments: Goodwill and other intangible assets(1) (16,568) (15,760) (16,224)
Tangible assets $280,480 $274,128 $296,694
======== ====== ======
Total Average Assets to Average Tangible Assets
-----------------------------------------------
Average total assets $294,108 $294,939 $308,096
Adjustments: Average goodwill and other intangible assets (1) (16,564) (15,829) (16,340)
Average tangible assets $277,544 $279,110 $291,756
======== ====== ======
Non-GAAP TCE Ratio
------------------
TCE ratio(3) 8.7 % 9.2 % 7.9 %
Regulatory Capital Ratios(4)
---------------------------
Total stockholders' equity $41,744 $41,750 $40,499
Adjustments: Net unrealized (gains) losses on AFS securities recorded in AOCI(5) 791 736 (712)
Net losses on cash flow hedges recorded in AOCI(5) 136 123 2
Disallowed goodwill and other intangible assets (14,326) (14,263) (14,428)
Disallowed deferred tax assets - - -
Noncumulative perpetual preferred stock(2) (853) (853) (853)
Other (5) (5) (12)
--- --- ---
Tier 1 common capital 27,847 27,488 24,496
Adjustments: Noncumulative perpetual preferred stock(2) 853 853 853
Tier 1 restricted core capital items(6) 2 2 2
--- --- ---
Tier 1 capital 28,342 28,343 25,351
------ ------ ------
Adjustments: Long-term debt qualifying as Tier 2 capital 1,914 1,909 2,119
Qualifying allowance for loan and lease losses 2,841 2,726 2,830
Other Tier 2 components 10 8 13
--- --- ---
Tier 2 capital 4,765 4,643 4,962
Total risk-based capital(7) $33,107 $32,986 $30,313
======= ======= =======
Risk-weighted assets(8) $225,199 $215,829 $223,472
======== ====== ======
Tier 1 common ratio(9) 12.2 % 12.7 % 11.0 %
Tier 1 risk-based capital ratio(10) 12.6 13.1 11.3
Total risk-based capital ratio(11) 14.7 15.3 13.6
___________
((1) )Includes impact from related deferred taxes.
((2)) Noncumulative perpetual preferred stock qualifies for Tier 1 capital; however, it is excluded from Tier 1 common capital.
((3)) TCE ratio is a non-GAAP measure calculated based on tangible common equity divided by tangible assets.
((4)) Regulatory capital ratios as of the end of Q4 2013 are preliminary and therefore subject to change.
((5)) Amounts presented are net of tax.
((6)) Consists primarily of trust preferred securities.
((7)) Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.
((8) )Calculated based on prescribed regulatory guidelines.
((9) )Tier 1 common ratio is a regulatory capital measure calculated based on Tier 1 common capital divided by risk-weighted assets.
((10)) Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
((11)) Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighted assets.
Contacts:
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Jeff Norris Danielle Dietz Julie Rakes Tatiana Stead
703.720.2455 703.720.2455 804.284.5800 703.720.2352
SOURCE Capital One Financial Corporation
