CAPITAL ONE FINANCIAL CORP - FORM 8-K - EX-99.2

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8-K - 8-K - CAPITAL ONE FINANCIAL CORP	d711557d8k.htm
EX-99.1 - EX-99.1 - CAPITAL ONE FINANCIAL CORP	d711557dex991.htm

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement

First Quarter 2014^(1)(2)(3)

Table of Contents


		Page

Capital One Financial Corporation Consolidated

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		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 Quarterly Report on Form 10-Q for the period ended March 31, 2014 once it is filed with the Securities and Exchange Commission.

⁽²⁾

References to ING Direct refers to business and assets acquired and liabilities assumed in the February 17, 2012 acquisition. Reference 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.

⁽³⁾

We adopted ASU 2014-01 “Accounting for Investments in Qualified Affordable Housing Projects” as of January 1, 2014. As permitted by the guidance, we adopted the proportional amortization method of accounting for Qualified Affordable Housing Projects. The proportional amortization method amortizes the cost of the investment over the period in which we will receive tax credits and other tax benefits, and the resulting amortization is recognized as a component of income taxes attributable to continuing operations. Historically, these investments were accounted for under the equity method of accounting and the passive losses related to the investments were recognized within non-interest expense. Prior period results and related metrics have been restated to conform to this presentation.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated⁽¹⁾


	2014			2013			2013			2013			2013
(Dollars in millions, except per share data and as noted) (unaudited)	Q1			Q4			Q3			Q2			Q1
Earnings
Net interest income	$	4,350		$	4,423		$	4,560		$	4,553		$	4,570
Non-interest income⁽²⁾		1,020			1,121			1,091			1,085			981

Total net revenue⁽³⁾		5,370			5,544			5,651			5,638			5,551

Provision for credit losses		735			957			849			762			885
Non-interest expense:
Marketing		325			427			299			330			317
Amortization of intangibles⁽⁴⁾		143			166			161			167			177
Acquisition-related⁽⁵⁾		23			60			37			50			46
Operating expenses		2,441			2,582			2,612			2,471			2,451

Total non-interest expense		2,932			3,235			3,109			3,018			2,991

Income from continuing operations before income taxes		1,703			1,352			1,693			1,858			1,675
Income tax provision		579			477			575			631			541

Income from continuing operations, net of tax		1,124			875			1,118			1,227			1,134
Income/(Loss) from discontinued operations, net of tax⁽²⁾		30			(23	)		(13	)		(119	)		(78	)

Net income		1,154			852			1,105			1,108			1,056
Dividends and undistributed earnings allocated to participating securities⁽⁶⁾		(5	)		(4	)		(5	)		(4	)		(5	)
Preferred stock dividends⁽⁶⁾		(13	)		(13	)		(13	)		(13	)		(13	)

Net income available to common stockholders	$	1,136		$	835		$	1,087		$	1,091		$	1,038

Common Share Statistics
Basic EPS:⁽⁶⁾
Net income from continuing operations	$	1.94		$	1.50		$	1.89		$	2.08		$	1.92
Income/(Loss) from discontinued operations		0.05			(0.04	)		(0.02	)		(0.20	)		(0.13	)

Net income per basic common share	$	1.99		$	1.46		$	1.87		$	1.88		$	1.79

Diluted EPS:⁽⁶⁾
Net income from continuing operations	$	1.91		$	1.46		$	1.86		$	2.05		$	1.90
Income/(Loss) from discontinued operations		0.05			(0.03	)		(0.02	)		(0.20	)		(0.13	)

Net income per diluted common share	$	1.96		$	1.43		$	1.84		$	1.85		$	1.77

Weighted average common shares outstanding (in millions) for:
Basic EPS		571.0			573.4			582.3			581.5			580.5
Diluted EPS		580.3			582.6			591.1			588.8			586.3
Common shares outstanding (period end, in millions)		572.9			572.7			582.0			584.9			584.0
Dividends per common share	$	0.30		$	0.30		$	0.30		$	0.30		$	0.05
Tangible book value per common share (period end)⁽⁷⁾		45.88			43.64			43.01			41.41			41.72
Balance Sheet (Period End)
Loans held for investment⁽⁸⁾	$	192,941		$	197,199		$	191,814		$	191,512		$	191,333
Interest-earning assets		259,422			265,170			259,152			265,693			268,479
Total assets		290,500			296,933			289,866			296,524			300,145
Interest-bearing deposits		184,214			181,880			184,553			187,768			191,093
Total deposits		208,324			204,523			206,834			209,865			212,410
Borrowings		30,118			40,654			31,845			36,231			37,492
Common equity		41,948			40,779			40,792			40,094			40,358
Total stockholders’ equity		42,801			41,632			41,645			40,947			41,211
Balance Sheet (Quarterly Average Balances)
Loans held for investment⁽⁸⁾	$	193,722		$	192,813		$	191,135		$	190,562		$	195,997
Interest-earning assets		262,659			262,957			264,796			266,544			272,345
Total assets		294,275			294,040			294,919			297,748			303,226
Interest-bearing deposits		184,183			184,206			186,752			189,311			190,612
Total deposits		205,842			205,706			208,340			210,650			211,555
Borrowings		35,978			36,463			36,355			36,915			41,574
Common equity		42,006			41,502			40,332			40,637			40,027
Total stockholders’ equity		42,859			42,355			41,185			41,490			40,880

Page 1

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated⁽¹⁾


	2014			2013			2013			2013			2013
(Dollars in millions, except per share data and as noted) (unaudited)	Q1			Q4			Q3			Q2			Q1
Performance Metrics
Net interest income growth (quarter over quarter)		(2	)%		(3	)%		—	%		—	%		1	%
Non-interest income growth (quarter over quarter)		(9	)		3			1			11			(10	)
Total net revenue growth (quarter over quarter)		(3	)		(2	)		—			2			(1	)
Total net revenue margin⁽⁹⁾		8.18			8.43			8.54			8.46			8.15
Net interest margin⁽¹⁰⁾		6.62			6.73			6.89			6.83			6.71
Return on average assets⁽¹¹⁾		1.53			1.19			1.52			1.65			1.50
Return on average tangible assets⁽¹²⁾		1.61			1.26			1.60			1.74			1.58
Return on average common equity⁽¹³⁾		10.53			8.27			10.91			11.91			11.15
Return on average tangible common equity⁽¹⁴⁾		16.83			13.38			17.96			19.62			18.69
Non-interest expense as a % of average loans held for investment⁽¹⁵⁾		6.05			6.71			6.51			6.33			6.10
Efficiency ratio⁽¹⁶⁾		54.60			58.35			55.02			53.53			53.88
Effective income tax rate for continuing operations		34.0			35.3			34.0			34.0			32.3
Full-time equivalent employees (in thousands), period end		41.1			42.0			39.6			39.6			39.3
Credit Quality Metrics⁽⁸⁾
Allowance for loan and lease losses	$	4,098		$	4,315		$	4,333		$	4,407		$	4,606
Allowance as a % of loans held for investment		2.12	%		2.19	%		2.26	%		2.30	%		2.41	%
Allowance as a % of loans held for investment (excluding acquired loans)		2.45			2.54			2.66			2.74			2.91
Net charge-offs	$	931		$	969		$	917		$	969		$	1,079
Net charge-off rate⁽¹⁷⁾		1.92	%		2.01	%		1.92	%		2.03	%		2.20	%
Net charge-off rate (excluding acquired loans)⁽¹⁷⁾		2.24			2.37			2.29			2.46			2.69
30+ day performing delinquency rate		2.22			2.63			2.54			2.35			2.37
30+ day performing delinquency rate (excluding acquired loans)		2.59			3.08			3.01			2.83			2.90
30+ day delinquency rate		2.51			2.96			2.88			2.71			2.74
30+ day delinquency rate (excluding acquired loans)		2.93			3.46			3.41			3.26			3.35
Capital Ratios⁽¹⁸⁾
Common equity Tier 1 capital ratio		13.0	%		N/A			N/A			N/A			N/A
Tier 1 common ratio		N/A			12.2	%		12.7	%		12.0	%		11.7	%
Tier 1 risk-based capital ratio		13.4			12.6			13.1			12.4			12.1
Total risk-based capital ratio		15.4			14.7			15.2			14.6			14.4
Tier 1 leverage ratio		10.4			10.1			10.0			9.7			9.1
Tangible common equity (“TCE”) ratio		9.6			8.9			9.1			8.6			8.6

Page 2

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income⁽¹⁾


	Three Months Ended
(Dollars in millions, except per share data) (unaudited)	March 31, 2014			December 31, 2013			March 31, 2013
Interest income:
Loans, including loans held for sale	$	4,307		$	4,398		$	4,649
Investment securities		416			414			374
Other		30			27			28

Total interest income		4,753			4,839			5,051

Interest expense:
Deposits		276			288			326
Securitized debt obligations		38			40			56
Senior and subordinated notes		77			75			82
Other borrowings		12			13			17

Total interest expense		403			416			481

Net interest income		4,350			4,423			4,570
Provision for credit losses		735			957			885

Net interest income after provision for credit losses		3,615			3,466			3,685

Non-interest income:⁽²⁾
Service charges and other customer-related fees		474			504			550
Interchange fees, net		440			489			445
Net other-than-temporary impairment losses recognized in earnings		(5	)		(1	)		(25	)
Other		111			129			11

Total non-interest income		1,020			1,121			981

Non-interest expense:
Salaries and associate benefits		1,161			1,115			1,095
Occupancy and equipment		405			437			357
Marketing		325			427			317
Professional services		287			357			322
Communications and data processing		196			220			216
Amortization of intangibles⁽⁴⁾		143			166			177
Other		415			513			507

Total non-interest expense		2,932			3,235			2,991

Income from continuing operations before income taxes		1,703			1,352			1,675
Income tax provision		579			477			541

Income from continuing operations, net of tax		1,124			875			1,134
Income/(Loss) from discontinued operations, net of tax⁽²⁾		30			(23	)		(78	)

Net income		1,154			852			1,056
Dividends and undistributed earnings allocated to participating securities⁽⁶⁾		(5	)		(4	)		(5	)
Preferred stock dividends⁽⁶⁾		(13	)		(13	)		(13	)

Net income available to common stockholders	$	1,136		$	835		$	1,038


Basic earnings per common share:⁽⁶⁾
Net income from continuing operations	$	1.94		$	1.50		$	1.92
Income/(Loss) from discontinued operations		0.05			(0.04	)		(0.13	)

Net income per basic common share	$	1.99		$	1.46		$	1.79


Diluted earnings per common share:⁽⁶⁾
Net income from continuing operations	$	1.91		$	1.46		$	1.90
Income/(Loss) from discontinued operations		0.05			(0.03	)		(0.13	)

Net income per diluted common share	$	1.96		$	1.43		$	1.77


Weighted average common shares outstanding (in millions) for:
Basic EPS		571.0			573.4			580.5
Diluted EPS		580.3			582.6			586.3
Dividends paid per common share	$	0.30		$	0.30		$	0.05

Page 3

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets⁽¹⁾


*(Dollars in millions)(unaudited)*	March 31, 2014			December 31, 2013			March 31, 2013
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,373		$	2,821		$	1,947
Interest-bearing deposits with banks		2,641			3,131			4,563
Federal funds sold and securities purchased under agreements to resell		168			339			236

Total cash and cash equivalents		6,182			6,291			6,746
Restricted cash for securitization investors		550			874			1,018
Securities available for sale, at fair value		40,721			41,800			63,968
Securities held to maturity, at carrying value		20,150			19,132			—
Loans held for investment:
Unsecuritized loans held for investment		156,072			157,651			150,721
Restricted loans for securitization investors		36,869			39,548			40,612

Total loans held for investment		192,941			197,199			191,333
Less: Allowance for loan and lease losses		(4,098	)		(4,315	)		(4,606	)

Net loans held for investment		188,843			192,884			186,727
Loans held for sale, at lower of cost or fair value		259			218			6,410
Premises and equipment, net		3,807			3,839			3,736
Interest receivable		1,325			1,418			1,378
Goodwill		13,974			13,978			13,900
Other		14,689			16,499			16,262

Total assets	$	290,500		$	296,933		$	300,145


Liabilities:
Interest payable	$	259		$	307		$	310
Customer deposits:
Non-interest bearing deposits		24,110			22,643			21,317
Interest-bearing deposits		184,214			181,880			191,093

Total customer deposits		208,324			204,523			212,410
Securitized debt obligations		9,783			10,289			11,046
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase		1,544			915			855
Senior and subordinated notes		14,891			13,134			13,255
Other borrowings		3,900			16,316			12,336

Total other debt		20,335			30,365			26,446
Other liabilities		8,998			9,817			8,722

Total liabilities		247,699			255,301			258,934


Stockholders’ equity:
Preferred stock		—			—			—
Common stock		6			6			6
Additional paid-in capital, net		26,605			26,526			26,256
Retained earnings		21,259			20,292			17,791
Accumulated other comprehensive income (“AOCI”)		(710	)		(872	)		473
Treasury stock, at cost		(4,359	)		(4,320	)		(3,315	)

Total stockholders’ equity		42,801			41,632			41,211

Total liabilities and stockholders’ equity	$	290,500		$	296,933		$	300,145

Page 4

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 the following related to mortgage representation and warranty losses: a benefit of $33 million in Q1 2014 (which includes a benefit of $47 million before taxes in discontinued operations and a provision of $14 million before taxes in continuing operations), a provision of $33 million in Q4 2013, a benefit of $4 million in Q3 2013, and provisions of $183 million and $97 million in Q2 2013 and Q1 2013 respectively. Historically, the majority of the provision for representation and warranty losses is 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 $1.1 billion as of March 31, 2014, $1.2 billion as of December 31, 2013 and $994 million as of March 31, 2013.

⁽³⁾	Total net revenue was reduced by $163 million in Q1 2014, $185 million in Q4 2013, $154 million in Q3 2013, $192 million in Q2 2013 and $265 million in Q1 2013 for the estimated uncollectible amount of billed finance charges and fees.

⁽⁴⁾

Includes purchased credit card relationship (“PCCR”) intangible amortization of $98 million in Q1 2014, $102 million in Q4 2013, $106 million in Q3 2013, $110 million in Q2 2013 and $116 million in Q1 2013, the substantial majority of which is attributable to the 2012 U.S. card acquisition. Includes core deposit intangible amortization of $36 million in Q1 2014, $38 million in Q4 2013, $40 million in Q3 2013, $43 million in Q2 2013 and $44 million in Q1 2013.

⁽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” 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”). The table below presents amounts related to acquired loans accounted for under SOP 03-3:


*(Dollars in millions) (unaudited)*	2014 Q1		2013 Q4		2013 Q3		2013 Q2		2013 Q1
Acquired loans accounted for under SOP 03-3:
Period-end unpaid principal balance	$	28,549	$	29,761	$	31,377	$	33,620	$	36,216
Period-end loans held for investment		27,390		28,550		30,080		32,275		34,943
Average loans held for investment		27,760		29,055		30,713		33,144		35,706

⁽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 by average tangible assets for the period. See “Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” 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” 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⁾

Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. We calculated regulatory capital measures for periods prior to the first quarter of 2014 under Basel I. Ratios as of the end of Q1 2014 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” for information on the calculation of each of these ratios.

Page 5

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 6: Average Balances, Net Interest Income and Net Interest Margin⁽¹⁾


	2014 Q1							2013 Q4							2013 Q1
(Dollars in millions)(unaudited)	Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾			Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾			Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾
Interest-earning assets:
Loans, including loans held for sale	$	194,020	$	4,307		8.88	%	$	193,368	$	4,398		9.10	%	$	200,441	$	4,649		9.28	%
Investment securities⁽³⁾		62,124		416		2.68			62,919		414		2.63			64,798		374		2.31
Cash equivalents and other		6,515		30		1.84			6,670		27		1.62			7,106		28		1.58

Total interest-earning assets	$	262,659	$	4,753		7.24	%	$	262,957	$	4,839		7.36	%	$	272,345	$	5,051		7.42	%


Interest-bearing liabilities:
Interest-bearing deposits	$	184,183	$	276		0.60	%	$	184,206	$	288		0.63	%	$	190,612	$	326		0.68	%
Securitized debt obligations		10,418		38		1.46			9,873		40		1.62			11,758		56		1.91
Senior and subordinated notes		14,162		77		2.17			12,765		75		2.35			11,984		82		2.74
Other borrowings		11,398		12		0.42			13,825		13		0.38			17,832		17		0.38

Total interest-bearing liabilities	$	220,161	$	403		0.73	%	$	220,669	$	416		0.75	%	$	232,186	$	481		0.83	%

Net interest income/spread			$	4,350		6.51	%			$	4,423		6.61	%			$	4,570		6.59	%

Impact of non-interest bearing funding						0.11							0.12							0.12

Net interest margin						6.62	%						6.73	%						6.71	%

⁽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.

Page 6

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics⁽¹⁾


(Dollars in millions)(unaudited)	2014 Q1			2013 Q4			2013 Q3			2013 Q2			2013 Q1
Period-end Loans Held For Investment
Credit card:
Domestic credit card	$	68,275		$	73,255		$	69,936		$	70,490		$	70,361
International credit card		7,575			8,050			8,031			7,820			8,036

Total credit card		75,850			81,305			77,967			78,310			78,397

Consumer banking:
Auto		33,080			31,857			30,803			29,369			27,940
Home loan		34,035			35,282			36,817			39,163			41,931
Retail banking		3,612			3,623			3,665			3,686			3,742

Total consumer banking		70,727			70,762			71,285			72,218			73,613

Commercial banking:
Commercial and multifamily real estate		21,256			20,750			19,523			18,570			17,878
Commercial and industrial		24,064			23,309			21,848			21,170			20,127

Total commercial lending		45,320			44,059			41,371			39,740			38,005
Small-ticket commercial real estate		910			952			1,028			1,065			1,145

Total commercial banking		46,230			45,011			42,399			40,805			39,150

Other loans		134			121			163			179			173

Total	$	192,941		$	197,199		$	191,814		$	191,512		$	191,333

Average Loans Held For Investment
Credit card:
Domestic credit card	$	69,810		$	70,368		$	69,947		$	69,966		$	74,714
International credit card		7,692			7,899			7,782			7,980			8,238

Total credit card		77,502			78,267			77,729			77,946			82,952

Consumer banking:
Auto		32,387			31,424			30,157			28,677			27,477
Home loan		34,646			35,974			37,852			40,532			43,023
Retail banking		3,630			3,635			3,655			3,721			3,786

Total consumer banking		70,663			71,033			71,664			72,930			74,286

Commercial banking:
Commercial and multifamily real estate		20,962			19,928			19,047			18,084			17,454
Commercial and industrial		23,541			22,445			21,491			20,332			19,949

Total commercial lending		44,503			42,373			40,538			38,416			37,403
Small-ticket commercial real estate		932			986			1,038			1,096			1,173

Total commercial banking		45,435			43,359			41,576			39,512			38,576

Other loans		122			154			166			174			183

Total	$	193,722		$	192,813		$	191,135		$	190,562		$	195,997

Net Charge-off Rates
Credit card:
Domestic credit card		4.01	%		3.89	%		3.67	%		4.28	%		4.43	%
International credit card		4.17			4.74			4.71			5.08			4.59

Total credit card		4.02			3.98			3.78			4.36			4.45

Consumer banking:
Auto		1.66			2.30			2.01			1.28			1.78
Home loan		0.06			0.03			0.06			0.03			0.04
Retail banking		0.95			1.09			1.38			1.50			1.85

Total consumer banking		0.84			1.09			0.95			0.60			0.78

Commercial banking:
Commercial and multifamily real estate		0.01			(0.11	)		(0.11	)		0.04			0.01
Commercial and industrial		0.03			0.04			0.18			0.03			0.04

Total commercial lending		0.02			(0.03	)		0.04			0.03			0.03
Small-ticket commercial real estate		0.67			(0.81	)		1.26			0.45			1.41

Total commercial banking		0.04			(0.05	)		0.07			0.04			0.07

Other loans		(0.68	)		4.68			12.17			13.10			14.53

Total		1.92	%		2.01	%		1.92	%		2.03	%		2.20	%

30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card		3.02	%		3.43	%		3.46	%		3.05	%		3.37	%
International credit card		3.59			3.71			3.86			3.84			4.04

Total credit card		3.08			3.46			3.51			3.13			3.44

Consumer banking:
Auto		5.29			6.85			6.29			6.03			5.58
Home loan		0.12			0.16			0.14			0.12			0.14
Retail banking		0.74			0.69			0.68			0.68			0.83

Total consumer banking		2.57	%		3.20	%		2.82	%		2.55	%		2.24	%

Nonperforming Asset Rates⁽²⁾
Credit card:
International credit card		1.07	%		1.10	%		1.16	%		1.20	%		1.13	%

Total credit card		0.11			0.11			0.12			0.12			0.12

Consumer banking:
Auto⁽¹⁰⁾		0.81			1.11			0.92			0.81			0.71
Home loan		1.17			1.14			1.08			1.08			1.02
Retail banking		1.15			1.13			1.10			1.11			1.24

Total consumer banking		1.00			1.12			1.01			0.97			0.91

Commercial banking:
Commercial and multifamily real estate		0.31			0.29			0.40			0.56			0.76
Commercial and industrial		0.40			0.44			0.65			0.65			0.64

Total commercial lending		0.35			0.37			0.53			0.61			0.69
Small-ticket commercial real estate		0.73			0.43			1.49			1.11			2.42

Total commercial banking		0.36	%		0.37	%		0.56	%		0.62	%		0.74	%

Page 7

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Financial & Statistical Summary—Credit Card Business


	2014			2013			2013			2013			2013
(Dollars in millions) (unaudited)	Q1			Q4			Q3			Q2			Q1
Credit Card
Earnings:
Net interest income	$	2,525		$	2,576		$	2,757		$	2,804		$	2,830
Non-interest income		785			833			834			832			821

Total net revenue		3,310			3,409			3,591			3,636			3,651
Provision for credit losses		558			751			617			713			743
Non-interest expense		1,726			1,868			1,904			1,819			1,848

Income from continuing operations before taxes		1,026			790			1,070			1,104			1,060
Income tax provision		358			274			376			385			374

Income from continuing operations, net of tax	$	668		$	516		$	694		$	719		$	686

Selected performance metrics:
Period-end loans held for investment	$	75,850		$	81,305		$	77,967		$	78,310		$	78,397
Average loans held for investment		77,502			78,267			77,729			77,946			82,952
Average yield on loans held for investment⁽⁴⁾		14.43	%		14.64	%		15.72	%		15.94	%		15.16	%
Total net revenue margin⁽⁵⁾		17.08			17.43			18.48			18.66			17.61
Net charge-off rate		4.02			3.98			3.78			4.36			4.45
30+ day performing delinquency rate		3.08			3.46			3.51			3.13			3.44
30+ day delinquency rate		3.16			3.54			3.60			3.22			3.53
Nonperforming loan rate⁽³⁾		0.11			0.11			0.12			0.12			0.12
Card loan premium amortization and other intangible accretion⁽⁶⁾	$	37		$	39		$	45		$	57		$	57
PCCR intangible amortization		98			102			106			110			116
Purchase volume⁽⁷⁾		47,434			54,245			50,943			50,788			45,098
Domestic Card
Earnings:
Net interest income	$	2,255		$	2,303		$	2,492		$	2,536		$	2,556
Non-interest income		702			747			749			737			724

Total net revenue		2,957			3,050			3,241			3,273			3,280
Provision for credit losses		486			679			529			647			647
Non-interest expense		1,545			1,664			1,713			1,635			1,633

Income from continuing operations before taxes		926			707			999			991			1,000
Income tax provision		331			252			355			353			356

Income from continuing operations, net of tax	$	595		$	455		$	644		$	638		$	644

Selected performance metrics:
Period-end loans held for investment	$	68,275		$	73,255		$	69,936		$	70,490		$	70,361
Average loans held for investment		69,810			70,368			69,947			69,966			74,714
Average yield on loans held for investment⁽⁴⁾		14.19	%		14.44	%		15.65	%		15.91	%		15.07	%
Total net revenue margin⁽⁵⁾		16.94			17.34			18.53			18.71			17.56
Net charge-off rate		4.01			3.89			3.67			4.28			4.43
30+ day performing delinquency rate		3.02			3.43			3.46			3.05			3.37
30+ day delinquency rate		3.02			3.43			3.46			3.05			3.37
Purchase volume⁽⁷⁾	$	44,139		$	50,377		$	47,420		$	47,273		$	41,831
International Card
Earnings:
Net interest income	$	270		$	273		$	265		$	268		$	274
Non-interest income		83			86			85			95			97

Total net revenue		353			359			350			363			371
Provision for credit losses		72			72			88			66			96
Non-interest expense		181			204			191			184			215

Income from continuing operations before taxes		100			83			71			113			60
Income tax provision		27			22			21			32			18

Income from continuing operations, net of tax	$	73		$	61		$	50		$	81		$	42

Selected performance metrics:
Period-end loans held for investment	$	7,575		$	8,050		$	8,031		$	7,820		$	8,036
Average loans held for investment		7,692			7,899			7,782			7,980			8,238
Average yield on loans held for investment		16.64	%		16.48	%		16.35	%		16.19	%		15.97	%
Total net revenue margin		18.38			18.20			17.99			18.20			18.01
Net charge-off rate		4.17			4.74			4.71			5.08			4.59
30+ day performing delinquency rate		3.59			3.71			3.86			3.84			4.04
30+ day delinquency rate		4.41			4.56			4.78			4.79			4.93
Nonperforming loan rate⁽³⁾		1.07			1.10			1.16			1.20			1.13
Purchase volume⁽⁷⁾	$	3,295		$	3,868		$	3,523		$	3,515		$	3,267

Page 8

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial & Statistical Summary—Consumer Banking Business


	2014			2013			2013			2013			2013
*(Dollars in millions) (unaudited)*	Q1			Q4			Q3			Q2			Q1
Consumer Banking
Earnings:
Net interest income	$	1,433		$	1,468		$	1,481		$	1,478		$	1,478
Non-interest income		150			195			184			189			181

Total net revenue		1,583			1,663			1,665			1,667			1,659
Provision for credit losses		140			212			202			67			175
Non-interest expense		930			1,018			927			910			890

Income from continuing operations before taxes		513			433			536			690			594
Income tax provision		183			154			191			246			211

Income from continuing operations, net of tax	$	330		$	279		$	345		$	444		$	383


Selected performance metrics:
Period-end loans held for investment	$	70,727		$	70,762		$	71,285		$	72,218		$	73,613
Average loans held for investment		70,663			71,033			71,664			72,930			74,286
Average yield on loans held for investment		6.18	%		6.30	%		6.21	%		5.99	%		5.93	%
Auto loan originations	$	4,727		$	4,322		$	4,752		$	4,525		$	3,789
Period-end deposits		171,529			167,652			168,437			169,789			172,605
Average deposits		168,676			167,870			169,082			170,733			171,089
Average deposit interest rate		0.57	%		0.60	%		0.63	%		0.64	%		0.64	%
Core deposit intangible amortization	$	30		$	32		$	34		$	35		$	37
Net charge-off rate		0.84	%		1.09	%		0.95	%		0.60	%		0.78	%
30+ day performing delinquency rate		2.57			3.20			2.82			2.55			2.24
30+ day delinquency rate		3.14			3.89			3.46			3.15			2.81
Nonperforming loan rate⁽³⁾		0.74			0.86			0.79			0.78			0.74
Nonperforming asset rate⁽²⁾		1.00			1.12			1.01			0.97			0.91
Period-end loans serviced for others	$	6,868		$	7,665		$	14,043		$	14,313		$	14,869

Page 9

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Commercial Banking Business⁽¹⁾


	2014			2013			2013			2013			2013
(Dollars in millions) (unaudited)	Q1			Q4			Q3			Q2			Q1
Commercial Banking
Earnings:
Net interest income	$	421		$	447		$	424		$	402		$	401
Non-interest income		87			131			87			93			84

Total net revenue^(8)(11)		508			578			511			495			485
Provision for credit losses		40			(6	)		31			(14	)		(35	)
Non-interest expense		255			281			228			228			221

Income from continuing operations before taxes		213			303			252			281			299
Income tax provision		76			108			90			100			106

Income from continuing operations, net of tax	$	137		$	195		$	162		$	181		$	193


Selected performance metrics:
Period-end loans held for investment	$	46,230		$	45,011		$	42,399		$	40,805		$	39,150
Average loans held for investment		45,435			43,359			41,576			39,512			38,576
Average yield on loans held for investment⁽⁸⁾		3.47	%		3.92	%		3.87	%		3.84	%		3.91	%
Period-end deposits	$	31,485		$	30,567		$	30,592		$	30,869		$	30,275
Average deposits		31,627			31,033			30,685			30,746			30,335
Average deposit interest rate		0.25	%		0.25	%		0.27	%		0.26	%		0.28	%
Core deposit intangible amortization	$	6		$	6		$	6		$	8		$	7
Net charge-off rate		0.04	%		(0.05	)%		0.07	%		0.04	%		0.07	%
Nonperforming loan rate⁽³⁾		0.33			0.33			0.47			0.60			0.71
Nonperforming asset rate⁽²⁾		0.36			0.37			0.56			0.62			0.74

Risk category:⁽⁹⁾
Noncriticized	$	44,904		$	43,593		$	40,940		$	39,168		$	37,359
Criticized performing		952			1,007			968			1,087			1,191
Criticized nonperforming		150			149			201			244			277

Total risk-rated loans		46,006			44,749			42,109			40,499			38,827
Acquired commercial loans		224			262			290			306			323

Total commercial loans	$	46,230		$	45,011		$	42,399		$	40,805		$	39,150


% of period-end commercial loans held for investment:
Noncriticized		97.1	%		96.9	%		96.5	%		96.0	%		95.4	%
Criticized performing		2.1			2.2			2.3			2.7			3.1
Criticized nonperforming		0.3			0.3			0.5			0.6			0.7

Total risk-rated loans		99.5			99.4			99.3			99.3			99.2
Acquired commercial loans		0.5			0.6			0.7			0.7			0.8

Total commercial loans		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Page 10

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Other and Total⁽¹⁾


(Dollars in millions) (unaudited)	2014 Q1			2013 Q4			2013 Q3			2013 Q2			2013 Q1
Other
Earnings:
Net interest expense	$	(29	)	$	(68	)	$	(102	)	$	(131	)	$	(139	)
Non-interest income		(2	)		(38	)		(14	)		(29	)		(105	)

Total net revenue⁽¹¹⁾		(31	)		(106	)		(116	)		(160	)		(244	)
Provision for credit losses		(3	)		—			(1	)		(4	)		2
Non-interest expense		21			68			50			61			32

Loss from continuing operations before taxes		(49	)		(174	)		(165	)		(217	)		(278	)
Income tax benefit		(38	)		(59	)		(82	)		(100	)		(150	)

Loss from continuing operations, net of tax	$	(11	)	$	(115	)	$	(83	)	$	(117	)	$	(128	)


Selected performance metrics:
Period-end loans held for investment	$	134		$	121		$	163		$	179		$	173
Average loans held for investment		122			154			166			174			183
Period-end deposits		5,310			6,304			7,805			9,207			9,530
Average deposits		5,539			6,803			8,573			9,171			10,131
Total
Earnings:
Net interest income	$	4,350		$	4,423		$	4,560		$	4,553		$	4,570
Non-interest income		1,020			1,121			1,091			1,085			981

Total net revenue		5,370			5,544			5,651			5,638			5,551
Provision for credit losses		735			957			849			762			885
Non-interest expense		2,932			3,235			3,109			3,018			2,991

Income from continuing operations before taxes		1,703			1,352			1,693			1,858			1,675
Income tax provision		579			477			575			631			541

Income from continuing operations, net of tax	$	1,124		$	875		$	1,118		$	1,227		$	1,134


Selected performance metrics:
Period-end loans held for investment	$	192,941		$	197,199		$	191,814		$	191,512		$	191,333
Average loans held for investment		193,722			192,813			191,135			190,562			195,997
Period-end deposits		208,324			204,523			206,834			209,865			212,410
Average deposits		205,842			205,706			208,340			210,650			211,555

Page 11

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⁾

Nonperforming assets consist of nonperforming loans, real estate owned (“REO”) and other foreclosed assets. The nonperforming asset rates 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. Nonperforming assets related to acquired loans are excluded from the calculation.

⁽³⁾	The nonperforming loan rates 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, 168 basis points and 152 basis points, respectively, in Q2 2013 and 107 basis points and 97 basis points, respectively, in Q1 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, 188 basis points and 169 basis points, respectively, in Q2 2013 and 123 basis points and 112 basis points, respectively, in Q1 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⁾

Some of our tax-related commercial investments generate tax-exempt income or tax credits, accordingly 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⁾	Includes the net realizable value of auto loans that have been charged down as a result of a bankruptcy filing and repossessed assets obtained in satisfaction of auto loans.

⁽¹¹⁾

Commercial Banking revenue related to qualified housing credits is presented on a taxable-equivalent basis. As a result of the adoption of ASU 2014-01 “Accounting for Investments in Qualified Affordable Housing Projects”, losses related to these investments are now recognized, along with the associated tax benefits, as a component of income taxes attributable to continuing operations instead of non-interest expense. As such, losses related to these investments decrease the overall tax benefits recognized as a component of income taxes attributable to continuing operations and taxable-equivalent revenue in the Commercial Banking segment. This decrease in revenue is offset by an increase in revenue in the Other segment. Prior period amounts have been adjusted to conform to current period presentation.

Page 12

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures

We report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity (“TCE”), tangible assets, and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital 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.


(Dollars in millions)(unaudited)	2014 Q1			2013 Q4			2013 Q3			2013 Q2			2013 Q1
Average Equity to Non-GAAP Average Tangible Common Equity
Average stockholders’ equity	$	42,859			42,355		$	41,185		$	41,490		$	40,880
Adjustments: Average goodwill and other intangible assets⁽¹⁾		(15,727	)		(15,847	)		(15,829	)		(15,974	)		(16,141	)
Noncumulative perpetual preferred stock⁽²⁾		(853	)		(853	)		(853	)		(853	)		(853	)

Average tangible common equity	$	26,279		$	25,655		$	24,503		$	24,663		$	23,886

End of Period Stockholders’ Equity to Non-GAAP Tangible Common Equity
End of period stockholders’ equity	$	42,801		$	41,632		$	41,645		$	40,947		$	41,211
Adjustments: Goodwill and other intangible assets⁽¹⁾		(15,666	)		(15,784	)		(15,760	)		(15,872	)		(15,992	)
Noncumulative perpetual preferred stock⁽²⁾		(853	)		(853	)		(853	)		(853	)		(853	)

Tangible common equity	$	26,282		$	24,995		$	25,032		$	24,222		$	24,366

Average Assets to Average Tangible Assets
Average assets	$	294,275		$	294,040		$	294,919		$	297,748		$	303,226
Adjustments: Average goodwill and other intangible assets⁽¹⁾		(15,727	)		(15,847	)		(15,829	)		(15,974	)		(16,141	)

Average tangible assets	$	278,548		$	278,193		$	279,090		$	281,774		$	287,085

End of Period Assets to Tangible Assets
End of period assets	$	290,500		$	296,933		$	289,866		$	296,524		$	300,145
Adjustments: Goodwill and other intangible assets⁽¹⁾		(15,666	)		(15,784	)		(15,760	)		(15,872	)		(15,992	)

Tangible assets	$	274,834		$	281,149		$	274,106		$	280,652		$	284,153

Non-GAAP TCE Ratio
Tangible common equity	$	26,282		$	24,995		$	25,032		$	24,222		$	24,366
Tangible assets		274,834			281,149			274,106			280,652			284,153
TCE ratio⁽³⁾		9.6	%		8.9	%		9.1	%		8.6	%		8.6	%

Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. Prior to January 1, 2014, we calculated regulatory capital under Basel I as shown in footnote 13.

(Dollars in millions)(unaudited)

2014
Q1

2013

2013
Q3

2013
Q2

2013
Q1

Regulatory Capital Ratios⁽⁴⁾

Prior periods disclosed under Basel I. See footnote 13.

Common equity excluding AOCI

42,658

Adjustments: AOCI⁽⁵⁾⁽⁶⁾

(182

)

Goodwill⁽¹⁾

(13,811

)

Intangible Assets⁽¹⁾⁽⁶⁾

(314

)

Other

Common equity Tier 1 capital

28,434

Adjustments: Tier 1 capital instruments⁽²⁾

853

Additional Tier 1 capital adjustments

(30

)

Tier 1 capital

29,257

Adjustments: Tier 2 capital instruments⁽²⁾

1,764

Qualifying allowance for loan and lease losses

2,751

Additional Tier 2 capital adjustments

Tier 2 capital

4,521

Total risk-based capital⁽⁷⁾

33,778

Risk-weighted assets⁽⁸⁾

219,151

Average assets for the leverage ratio

280,907

Common equity Tier 1 capital ratio⁽⁹⁾

13.0

Tier 1 risk-based capital ratio⁽¹⁰⁾

13.4

Total risk-based capital ratio⁽¹¹⁾

15.4

Tier 1 leverage ratio⁽¹²⁾

10.4

⁽¹⁾	Includes impact of related deferred taxes

⁽²⁾	Includes related surplus

⁽³⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.

⁽⁴⁾	Regulatory capital ratios as of the end of Q1 2014 are preliminary and therefore subject to change.

⁽⁵⁾	Amounts presented are net of tax.

⁽⁶⁾	Amounts based on transition provisions for regulatory capital deductions and adjustments of 20% for 2014.

⁽⁷⁾	Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.

⁽⁸⁾	Risk-weighted assets continue to be calculated based on Basel I in 2014 consistent with the transition provisions.

⁽⁹⁾	Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 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.

⁽¹²⁾	Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.

⁽¹³⁾

Table below shows prior period regulatory capital measures calculated under Basel I. We adopted ASU 2014-01 “Accounting for Investments in Qualified Affordable Housing Projects” as of January 1, 2014. Regulatory measures calculated under Basel I for prior quarters have been restated to conform to this presentation.


(Dollars in millions)(unaudited)	2013 Q4			2013 Q3			2013 Q2			2013 Q1
Total stockholders’ equity	$	41,632		$	41,645		$	40,947		$	41,211
Adjustments: Net unrealized (gains) losses on AFS securities recorded in AOCI		791			736			503			(583	)
Net (gains) losses on cash flow hedges recorded in AOCI		136			123			175			15
Disallowed goodwill and other intangible assets		(14,326	)		(14,263	)		(14,309	)		(14,360	)
Disallowed deferred tax assets		—			—			—			—
Noncumulative perpetual preferred stock		(853	)		(853	)		(853	)		(853	)
Other		(5	)		(5	)		(5	)		(4	)

Tier 1 common capital		27,375			27,383			26,458			25,426
Adjustments: Noncumulative perpetual preferred stock		853			853			853			853
Tier 1 restricted core capital items		2			2			2			1

Tier 1 capital		28,230			28,238			27,313			26,280

Adjustments: Long-term debt qualifying as Tier 2 capital		1,914			1,909			2,104			2,121
Qualifying allowance for loan and lease losses		2,833			2,726			2,781			2,737
Other Tier 2 components		10			8			12			11

Tier 2 capital		4,757			4,643			4,897			4,869

Total risk-based capital	$	32,987		$	32,881		$	32,210		$	31,149

Risk-weighted assets	$	224,556		$	215,809		$	220,150		$	216,441

Average assets for the leverage ratio	$	280,574		$	281,978		$	282,962		$	288,210

Tier 1 common ratio		12.2	%		12.7	%		12.0	%		11.7	%
Tier 1 risk-based capital ratio		12.6			13.1			12.4			12.1
Total risk-based capital ratio		14.7			15.2			14.6			14.4
Tier 1 leverage ratio		10.1			10.0			9.7			9.1

Page 13

CAPITAL ONE FINANCIAL CORP - FORM 8-K - EX-99.2 - April 16, 2014

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