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

Attached files

file	filename
EX-99.2 - EXHIBIT 99.2 PDF - CAPITAL ONE FINANCIAL CORP	q42015earningsreleaseexhibit.pdf
8-K - 8-K - CAPITAL ONE FINANCIAL CORP	q42015earningsrelease8-k.htm
EX-99.1 - EXHIBIT 99.1 - CAPITAL ONE FINANCIAL CORP	q42015earningsrelease-ex991.htm

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement

Fourth Quarter2015⁽¹⁾

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	10
	Table 7:	Loan Information and Performance Statistics	11
Business Segment Results
	Table 8:	Financial Summary—Business Segment Results	13
	Table 9:	Financial & Statistical Summary—Credit Card Business	14
	Table 10:	Financial & Statistical Summary—Consumer Banking Business	16
	Table 11:	Financial & Statistical Summary—Commercial Banking Business	17
	Table 12:	Financial & Statistical Summary—Other and Total	18
	Table 13:	Notes to Loan and Business Segments Disclosures (Tables 7—12)	19
Other
	Table 14:	Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital 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 Annual Report on Form 10-K for the period ended December 31, 2015 once it is filed with the Securities and Exchange Commission.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated⁽¹⁾



																2015 Q4 vs.				Year Ended
(Dollars in millions, except per share data and as noted) (unaudited)	2015			2015			2015			2015			2014			2015		2014								2015 vs.
	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2015			2014			2014
Income Statement
Net interest income	$	4,961		$	4,760		$	4,537		$	4,576		$	4,656		4%		7%		$	18,834		$	17,818		6%
Non-interest income	1,233			1,140			1,135			1,071			1,157			8		7		4,579			4,472			2
Total net revenue⁽²⁾	6,194			5,900			5,672			5,647			5,813			5		7		23,413			22,290			5
Provision for credit losses	1,380			1,092			1,129			935			1,109			26		24		4,536			3,541			28
Non-interest expense:
Marketing	564			418			387			375			509			35		11		1,744			1,561			12
Amortization of intangibles	103			106			111			110			123			(3	)	(16	)	430			532			(19	)
Operating expenses	2,813			2,636			2,809			2,564			2,652			7		6		10,822			10,087			7
Total non-interest expense	3,480			3,160			3,307			3,049			3,284			10		6		12,996			12,180			7
Income from continuing operations before income taxes	1,334			1,648			1,236			1,663			1,420			(19	)	(6	)	5,881			6,569			(10	)
Income tax provision	426			530			384			529			450			(20	)	(5	)	1,869			2,146			(13	)
Income from continuing operations, net of tax	908			1,118			852			1,134			970			(19	)	(6	)	4,012			4,423			(9	)
Income (loss) from discontinued operations, net of tax⁽³⁾	12			(4		)	11			19			29			**		(59	)	38			5			**
Net income	920			1,114			863			1,153			999			(17	)	(8	)	4,050			4,428			(9	)
Dividends and undistributed earnings allocated to participating securities⁽⁴⁾	(4		)	(6		)	(4		)	(6		)	(4		)	(33	)	—		(20		)	(18		)	11
Preferred stock dividends⁽⁴⁾	(68		)	(29		)	(29		)	(32		)	(21		)	134		224		(158		)	(67		)	136
Net income available to common stockholders	$	848		$	1,079		$	830		$	1,115		$	974		(21	)	(13	)	$	3,872		$	4,343		(11	)
Common Share Statistics
Basic earnings per common share:⁽⁴⁾
Net income from continuing operations	$	1.58		$	2.01		$	1.50		$	2.00		$	1.71		(21)%		(8)%		$	7.08		$	7.70		(8)%
Income (loss) from discontinued operations	0.02			(0.01		)	0.02			0.03			0.05			**		(60	)	0.07			0.01			**
Net income per basic common share	$	1.60		$	2.00		$	1.52		$	2.03		$	1.76		(20	)	(9	)	$	7.15		$	7.71		(7	)
Diluted earnings per common share:⁽⁴⁾
Net income from continuing operations	$	1.56		$	1.99		$	1.48		$	1.97		$	1.68		(22	)	(7	)	$	7.00		$	7.58		(8	)
Income (loss) from discontinued operations	0.02			(0.01		)	0.02			0.03			0.05			**		(60	)	0.07			0.01			**
Net income per diluted common share⁽⁵⁾	$	1.58		$	1.98		$	1.50		$	2.00		$	1.73		(20	)	(9	)	$	7.07		$	7.59		(7	)
Weighted-average common shares outstanding (in millions):
Basic	530.8			540.6			545.6			550.2			554.3			(2	)	(4	)	541.8			563.1			(4	)
Diluted	536.3			546.3			552.0			557.2			561.8			(2	)	(5	)	548.0			571.9			(4	)
Common shares outstanding (period end, in millions)	527.3			534.9			542.5			548.0			553.4			(1	)	(5	)	527.3			553.4			(5	)
Dividends paid per common share	$	0.40		$	0.40		$	0.40		$	0.30		$	0.30		—		33		$	1.50		$	1.20		25
Tangible book value per common share (period end)⁽⁶⁾	53.65			54.66			52.74			52.19			50.32			(2	)	7		53.65			50.32			7



											2015 Q4 vs.			Year Ended
(Dollars in millions) (unaudited)	2015		2015		2015		2015		2014		2015		2014					2015 vs.
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4		Q3		Q4	2015		2014		2014
Balance Sheet (Period End)
Loans held for investment⁽⁷⁾	$	229,851	$	213,329	$	209,705	$	203,978	$	208,316	8%		10%	$	229,851	$	208,316	10%
Interest-earning assets	302,007		283,073		280,137		275,837		277,849		7		9	302,007		277,849		9
Total assets	334,048		313,700		310,510		306,224		308,167		6		8	334,048		308,167		8
Interest-bearing deposits	191,874		187,848		183,657		185,208		180,467		2		6	191,874		180,467		6
Total deposits	217,721		212,903		208,780		210,440		205,548		2		6	217,721		205,548		6
Borrowings	59,115		42,778		45,766		41,029		48,457		38		22	59,115		48,457		22
Common equity	43,990		44,391		43,849		43,908		43,231		(1	)	2	43,990		43,231		2
Total stockholders’ equity	47,284		47,685		46,659		45,730		45,053		(1	)	5	47,284		45,053		5
Balance Sheet (Average Balances)
Loans held for investment⁽⁷⁾	$	220,052	$	211,227	$	206,337	$	205,194	$	203,436	4%		8%	$	210,745	$	197,925	6%
Interest-earning assets	292,054		283,082		276,585		278,427		273,436		3		7	282,581		267,174		6
Total assets	323,354		313,822		307,206		309,401		304,153		3		6	313,474		297,659		5
Interest-bearing deposits	189,885		185,800		183,946		182,998		179,401		2		6	185,677		181,036		3
Total deposits	215,899		210,974		209,143		207,851		205,355		2		5	210,989		205,675		3
Borrowings	48,850		45,070		41,650		46,082		43,479		8		12	45,420		38,882		17
Common equity	45,418		45,407		44,878		44,575		43,895		—		3	45,072		43,055		5
Total stockholders’ equity	48,712		48,456		47,255		46,397		45,576		1		7	47,713		44,268		8

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated⁽¹⁾



												2015 Q4 vs.				Year Ended
(Dollars in millions except as noted) (unaudited)	2015		2015		2015		2015			2014		2015		2014						2015 vs.
(Dollars in millions except as noted) (unaudited)	Q4		Q3		Q2		Q1			Q4		Q3		Q4		2015		2014		2014
Performance Metrics
Net interest income growth (period over period)	4%		5%		(1)%		(2)%			4%		**		**		6%		(2)%		**
Non-interest income growth (period over period)	8		—		6		(7		)	1		**		**		2		5		**
Total net revenue growth (period over period)	5		4		—		(3		)	3		**		**		5		—		**
Total net revenue margin⁽⁸⁾	8.48		8.34		8.20		8.11			8.50		14	bps	(2	)bps	8.29		8.34		(5	)bps
Net interest margin⁽⁹⁾	6.79		6.73		6.56		6.57			6.81		6		(2	)	6.66		6.67		(1	)
Return on average assets	1.12		1.43		1.11		1.47			1.28		(31	)	(16	)	1.28		1.49		(21	)
Return on average tangible assets⁽¹⁰⁾	1.18		1.50		1.17		1.54			1.34		(32	)	(16	)	1.35		1.57		(22	)
Return on average common equity⁽¹¹⁾	7.36		9.54		7.30		9.84			8.61		(218	)	(125	)	8.51		10.08		(157	)
Return on average tangible common equity⁽¹²⁾	11.11		14.33		11.06		15.00			13.28		(322	)	(217	)	12.87		15.79		(292	)
Non-interest expense as a percentage of average loans held for investment	6.33		5.98		6.41		5.94			6.46		35		(13	)	6.17		6.15		2
Efficiency ratio⁽¹³⁾	56.18		53.56		58.30		53.99			56.49		262		(31	)	55.51		54.64		87
Effective income tax rate for continuing operations	31.9		32.2		31.1		31.8			31.7		(30	)	20		31.8		32.7		(90	)
Employees (in thousands), period end	45.4		46.9		47.5		47.0			46.0		(3)%		(1)%		45.4		46.0		(1)%
Credit Quality Metrics⁽⁷⁾
Allowance for loan and lease losses	$	5,130	$	4,847	$	4,676	$	4,405		$	4,383	6%		17%		$	5,130	$	4,383	17%
Allowance as a percentage of loans held for investment	2.23%		2.27%		2.23%		2.16%			2.10%		(4	)bps	13	bps	2.23%		2.10%		13	bps
Net charge-offs	$	1,078	$	890	$	846	$	881		$	915	21%		18%		$	3,695	$	3,414	8%
Net charge-off rate⁽¹⁴⁾	1.96%		1.69%		1.64%		1.72%			1.80%		27	bps	16	bps	1.75%		1.72%		3	bps
30+ day performing delinquency rate	2.69		2.63		2.33		2.32			2.62		6		7		2.69		2.62		7
30+ day delinquency rate	3.00		2.95		2.65		2.58			2.91		5		9		3.00		2.91		9
Capital Ratios⁽¹⁵⁾
Common equity Tier 1 capital ratio	11.1%		12.1%		12.1%		12.5%			12.5%		(100	)bps	(140	)bps	11.1%		12.5%		(140	)bps
Tier 1 capital ratio	12.3		13.4		13.3		13.2			13.2		(110	)	(90	)	12.3		13.2		(90	)
Total capital ratio	14.6		15.1		15.1		15.1			15.1		(50	)	(50	)	14.6		15.1		(50	)
Tier 1 leverage ratio	10.6		11.1		11.1		10.7			10.8		(50	)	(20	)	10.6		10.8		(20	)
Tangible common equity (“TCE”) ratio⁽¹⁶⁾	8.9		9.8		9.7		9.8			9.5		(90	)	(60	)	8.9		9.5		(60	)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income



	Three Months Ended									2015 Q4 vs.				Year Ended
	2015			2015			2014			2015		2014								2015 vs.
(Dollars in millions, except per share data and as noted) (unaudited)	Q4			Q3			Q4			Q3		Q4		2015			2014			2014
Interest income:
Loans, including loans held for sale	$	4,961		$	4,753		$	4,613		4%		8%		$	18,785		$	17,662		6%
Investment securities	401			386			405			4		(1	)	1,575			1,628			(3	)
Other	22			25			27			(12	)	(19	)	99			107			(7	)
Total interest income	5,384			5,164			5,045			4		7		20,459			19,397			5
Interest expense:
Deposits	277			271			269			2		3		1,091			1,088			—
Securitized debt obligations	43			39			36			10		19		151			145			4
Senior and subordinated notes	89			82			73			9		22		330			299			10
Other borrowings	14			12			11			17		27		53			47			13
Total interest expense	423			404			389			5		9		1,625			1,579			3
Net interest income	4,961			4,760			4,656			4		7		18,834			17,818			6
Provision for credit losses	1,380			1,092			1,109			26		24		4,536			3,541			28
Net interest income after provision for credit losses	3,581			3,668			3,547			(2	)	1		14,298			14,277			—
Non-interest income:
Service charges and other customer-related fees	426			423			462			1		(8	)	1,715			1,867			(8	)
Interchange fees, net	617			555			523			11		18		2,235			2,021			11
Net other-than-temporary impairment recognized in earnings	(3		)	(5		)	(9		)	(40	)	(67	)	(30		)	(24		)	25
Other	193			167			181			16		7		659			608			8
Total non-interest income	1,233			1,140			1,157			8		7		4,579			4,472			2
Non-interest expense:
Salaries and associate benefits	1,215			1,189			1,179			2		3		4,975			4,593			8
Occupancy and equipment	511			444			474			15		8		1,829			1,745			5
Marketing	564			418			509			35		11		1,744			1,561			12
Professional services	349			313			329			12		6		1,292			1,216			6
Communications and data processing	247			226			203			9		22		883			798			11
Amortization of intangibles	103			106			123			(3	)	(16	)	430			532			(19	)
Other	491			464			467			6		5		1,843			1,735			6
Total non-interest expense	3,480			3,160			3,284			10		6		12,996			12,180			7
Income from continuing operations before income taxes	1,334			1,648			1,420			(19	)	(6	)	5,881			6,569			(10	)
Income tax provision	426			530			450			(20	)	(5	)	1,869			2,146			(13	)
Income from continuing operations, net of tax	908			1,118			970			(19	)	(6	)	4,012			4,423			(9	)
Income (loss) from discontinued operations, net of tax⁽³⁾	12			(4		)	29			**		(59	)	38			5			**
Net income	920			1,114			999			(17	)	(8	)	4,050			4,428			(9	)
Dividends and undistributed earnings allocated to participating securities⁽⁴⁾	(4		)	(6		)	(4		)	(33	)	—		(20		)	(18		)	11
Preferred stock dividends⁽⁴⁾	(68		)	(29		)	(21		)	134		224		(158		)	(67		)	136
Net income available to common stockholders	$	848		$	1,079		$	974		(21	)	(13	)	$	3,872		$	4,343		(11	)



	Three Months Ended							2015 Q4 vs.				Year Ended
	2015		2015			2014		2015		2014						2015 vs.
(Dollars in millions, except per share data and as noted) (unaudited)	Q4		Q3			Q4		Q3		Q4		2015		2014		2014
Basic earnings per common share:⁽⁴⁾
Net income from continuing operations	$	1.58	$	2.01		$	1.71	(21)%		(8)%		$	7.08	$	7.70	(8)%
Income (loss) from discontinued operations	0.02		(0.01		)	0.05		**		(60	)	0.07		0.01		**
Net income per basic common share	$	1.60	$	2.00		$	1.76	(20	)	(9	)	$	7.15	$	7.71	(7	)
Diluted earnings per common share:⁽⁴⁾
Net income from continuing operations	$	1.56	$	1.99		$	1.68	(22	)	(7	)	$	7.00	$	7.58	(8	)
Income (loss) from discontinued operations	0.02		(0.01		)	0.05		**		(60	)	0.07		0.01		**
Net income per diluted common share⁽⁵⁾	$	1.58	$	1.98		$	1.73	(20	)	(9	)	$	7.07	$	7.59	(7	)
Weighted average common shares outstanding (in millions):
Basic common shares	530.8		540.6			554.3		(2	)	(4	)	541.8		563.1		(4	)
Diluted common shares	536.3		546.3			561.8		(2	)	(5	)	548.0		571.9		(4	)
Dividends paid per common share	$	0.40	$	0.40		$	0.30	—		33		$	1.50	$	1.20	25

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets⁽¹⁾



										December 31, 2015 vs.
(Dollars in millions) (unaudited)	December 31, 2015			September 30, 2015			December 31, 2014			September 30, 2015		December 31, 2014
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,407		$	2,701		$	3,147		26%		8%
Interest-bearing deposits with banks	4,577			3,952			4,095			16		12
Federal funds sold and securities purchased under agreements to resell	39			184			0			(79	)	**
Total cash and cash equivalents	8,023			6,837			7,242			17		11
Restricted cash for securitization investors	1,017			586			234			74		**
Securities available for sale, at fair value	39,061			39,431			39,508			(1	)	(1	)
Securities held to maturity, at carrying value	24,619			23,711			22,500			4		9
Loans held for investment:⁽⁷⁾
Unsecuritized loans held for investment	196,068			179,748			171,771			9		14
Restricted loans for securitization investors	33,783			33,581			36,545			1		(8	)
Total loans held for investment	229,851			213,329			208,316			8		10
Allowance for loan and lease losses	(5,130		)	(4,847		)	(4,383		)	6		17
Net loans held for investment	224,721			208,482			203,933			8		10
Loans held for sale, at lower of cost or fair value	904			566			626			60		44
Premises and equipment, net	3,584			3,629			3,685			(1	)	(3	)
Interest receivable	1,189			1,101			1,079			8		10
Goodwill	14,480			13,983			13,978			4		4
Other assets	16,450			15,374			15,382			7		7
Total assets	$	334,048		$	313,700		$	308,167		6		8



										December 31, 2015 vs.
(Dollars in millions) (unaudited)	December 31, 2015			September 30, 2015			December 31, 2014			September 30, 2015		December 31, 2014
Liabilities:
Interest payable	$	299		$	198		$	254		51%		18%
Deposits:
Non-interest bearing deposits	25,847			25,055			25,081			3		3
Interest-bearing deposits	191,874			187,848			180,467			2		6
Total deposits	217,721			212,903			205,548			2		6
Securitized debt obligations	16,166			15,656			11,624			3		39
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	981			1,021			880			(4	)	11
Senior and subordinated notes	21,837			21,773			18,684			—		17
Other borrowings	20,131			4,328			17,269			**		17
Total other debt	42,949			27,122			36,833			58		17
Other liabilities	9,629			10,136			8,855			(5	)	9
Total liabilities	286,764			266,015			263,114			8		9

Stockholders’ equity:
Preferred stock	0			0			0			—		—
Common stock	6			6			6			—		—
Additional paid-in capital, net	29,655			29,594			27,869			—		6
Retained earnings	27,045			26,407			23,973			2		13
Accumulated other comprehensive loss	(616		)	(142		)	(430		)	**		43
Treasury stock, at cost	(8,806		)	(8,180		)	(6,365		)	8		38
Total stockholders’ equity	47,284			47,685			45,053			(1	)	5
Total liabilities and stockholders’ equity	$	334,048		$	313,700		$	308,167		6		8

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)


^**	Not meaningful.


⁽¹⁾	As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the related right to reclaim cash collateral or obligation to return cash collateral. Prior period results, excluding regulatory ratios, have been recast to conform to this presentation.


⁽²⁾	Total net revenue was reduced by $222 million in Q4 2015, $195 million in Q3 2015, $168 million in Q2 2015, $147 million in Q1 2015 and $165 million in Q4 2014 for the estimated uncollectible amount of billed finance charges and fees.


⁽³⁾	Historically, the majority of the (benefit) provision for representation and warranty losses is included net of tax in discontinued operations. The (benefit) provision for mortgage representation and warranty losses included the following activity:



	2015			2015			2015			2015			2014
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4
(Benefit) provision for mortgage representation and warranty losses before income taxes:
Recorded in continuing operations	$	(1	)	$	(7	)	$	(9	)	$	1		$	(11	)
Recorded in discontinued operations	(21		)	3			(27		)	(19		)	(41		)
Total (benefit) provision for mortgage representation and warranty losses before income taxes	$	(22	)	$	(4	)	$	(36	)	$	(18	)	$	(52	)

The mortgage representation and warranty reserve was $610 million as of December 31, 2015, $632 million as of September 30, 2015 and $731 million as of December 31, 2014.


⁽⁴⁾	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.

⁽⁵⁾

On December 1, 2015, we completed the acquisition of Healthcare Financial Services business of General Electric Capital Corporation (“GE Healthcare acquisition”). In Q4 2015, we recorded charges totaling $72 million associated with (i) closing the acquisition of Healthcare Financial Services business of General Electric Capital Corporation (“GE Healthcare acquisition”) and establishing an initial allowance and reserve related to the loans acquired; (ii) certain planned site closures; and (iii) revisions to the restructuring charges recorded in Q2 2015 to reflect updated information. We recorded a build in the U.K. Payment Protection Insurance customer refund reserve (“U.K. PPI Reserve”) of $69 million in Q3 2015 and $78 million in Q2 2015. In Q2 2015, we also recorded restructuring charges of $147 million for severance and related benefits pursuant to our ongoing benefit programs, as a result of the realignment of our workforce. We report the following non-GAAP financial measures that we believe are helpful for investors to understand the effect of the excluded items on our reported results. The table below presents a reconciliation of our reported results to these non-GAAP financial measures:



	2015 Q4						2015 Q3						2015 Q2						Year Ended December 31, 2015
(Dollars in millions, except per share data) (unaudited)	Pre-Tax Income		Net Income		Diluted EPS		Pre-Tax Income		Net Income		Diluted EPS		Pre-Tax Income		Net Income		Diluted EPS		Pre-Tax Income		Net Income		Diluted EPS
Reported results	$	1,334	$	920	$	1.58	$	1,648	$	1,114	$	1.98	$	1,236	$	863	$	1.50	$	5,881	$	4,050	$	7.07
Adjustments	72		46		0.09		69		69		0.12		225		155		0.28		366		270		0.49
Results excluding adjustments	$	1,406	$	966	$	1.67	$	1,717	$	1,183	$	2.10	$	1,461	$	1,018	$	1.78	$	6,247	$	4,320	$	7.56


⁽⁶⁾	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information on tangible common equity.

⁽⁷⁾

Included in loans held for investment are acquired loans 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,” or Accounting Standard Codification 310-30). These include certain of our consumer and commercial loans that were acquired through business acquisitions. The table below presents amounts related to acquired loans accounted for under SOP 03-3:



	2015		2015		2015		2015		2014
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4
Acquired loans accounted for under SOP 03-3:
Period-end unpaid principal balance	$	20,434	$	20,585	$	21,841	$	23,248	$	24,473
Period-end loans held for investment	19,518		19,743		20,970		22,334		23,500
Average loans held for investment	19,319		20,116		21,440		22,773		23,907


⁽⁸⁾	Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.


⁽⁹⁾	Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.


⁽¹⁰⁾	Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. Return on average tangible assets is a non-GAAP measure. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information.

⁽¹¹⁾

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.

⁽¹²⁾

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. Return on average tangible common equity is a non-GAAP measure and our calculation may not be comparable to similarly titled measures reported by other companies. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information.


⁽¹³⁾	Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the adjustments discussed above in Footnote 5, was 55.82% for Q4 2015, 52.78% for Q3 2015, 54.63% for Q2 2015 and 54.32% for the year ended December 31, 2015.


⁽¹⁴⁾	Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.


⁽¹⁵⁾	Ratios as of the end of Q4 2015 are preliminary and therefore subject to change. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for information on the calculation of each of these ratios.


⁽¹⁶⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 6: Average Balances, Net Interest Income and Net Interest Margin



	2015 Q4						2015 Q3						2014 Q4
	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
(Dollars in millions) (unaudited)	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans, including loans held for sale	$	220,760	$	4,961	8.99%		$	212,076	$	4,753	8.96%		$	204,137	$	4,613	9.04%
Investment securities	64,444		401		2.49		63,541		386		2.43		62,952		405		2.57
Cash equivalents and other	6,850		22		1.28		7,465		25		1.34		6,347		27		1.70
Total interest-earning assets	$	292,054	$	5,384	7.37		$	283,082	$	5,164	7.30		$	273,436	$	5,045	7.38

Interest-bearing liabilities:
Interest-bearing deposits	$	189,885	$	277	0.58	%	$	185,800	$	271	0.58	%	$	179,401	$	269	0.60	%
Securitized debt obligations	15,993		43		1.08		14,881		39		1.05		11,479		36		1.25
Senior and subordinated notes	21,987		89		1.62		20,806		82		1.58		18,680		73		1.56
Other borrowings and liabilities	11,542		14		0.49		10,114		12		0.47		14,058		11		0.31
Total interest-bearing liabilities	$	239,407	$	423	0.71		$	231,601	$	404	0.70		$	223,618	$	389	0.70
Net interest income/spread			$	4,961	6.66				$	4,760	6.60				$	4,656	6.68
Impact of non-interest bearing funding					0.13						0.13						0.13
Net interest margin					6.79%						6.73%						6.81%



	Year Ended December 31,
	2015						2014
	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
(Dollars in millions) (unaudited)	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans, including loans held for sale	$	211,549	$	18,785	8.88%		$	198,419	$	17,662	8.90%
Investment securities	63,738		1,575		2.47		62,547		1,628		2.60
Cash equivalents and other	7,294		99		1.36		6,208		107		1.72
Total interest-earning assets	$	282,581	$	20,459	7.24		$	267,174	$	19,397	7.26

Interest-bearing liabilities:
Interest-bearing deposits	$	185,677	$	1,091	0.59	%	$	181,036	$	1,088	0.60	%
Securitized debt obligations	13,929		151		1.08		10,686		145		1.36
Senior and subordinated notes	20,935		330		1.58		16,543		299		1.81
Other borrowings and liabilities	11,297		53		0.47		12,325		47		0.38
Total interest-bearing liabilities	$	231,838	$	1,625	0.70		$	220,590	$	1,579	0.72
Net interest income/spread			$	18,834	6.54				$	17,818	6.54
Impact of non-interest bearing funding					0.12						0.13
Net interest margin					6.66%						6.67%

__________


⁽¹⁾	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.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics



											2015 Q4 vs.				Year Ended
(Dollars in millions) (unaudited)	2015 Q4		2015 Q3		2015 Q2		2015 Q1		2014 Q4		2015 Q3		2014 Q4		2015		2014		2015 vs. 2014
Loans Held For Investment (Period End)
Credit card:
Domestic credit card	$	87,939	$	82,178	$	78,984	$	74,131	$	77,704	7%		13%		$	87,939	$	77,704	13%
International credit card	8,186		7,957		8,219		7,623		8,172		3		—		8,186		8,172		—
Total credit card	96,125		90,135		87,203		81,754		85,876		7		12		96,125		85,876		12
Consumer banking:
Auto	41,549		41,052		39,991		38,937		37,824		1		10		41,549		37,824		10
Home loan	25,227		26,340		27,595		28,905		30,035		(4	)	(16	)	25,227		30,035		(16	)
Retail banking	3,596		3,598		3,590		3,537		3,580		—		—		3,596		3,580		—
Total consumer banking	70,372		70,990		71,176		71,379		71,439		(1	)	(1	)	70,372		71,439		(1	)
Commercial banking:
Commercial and multifamily real estate	25,518		23,585		22,886		22,831		23,137		8		10		25,518		23,137		10
Commercial and industrial	37,135		27,873		27,660		27,172		26,972		33		38		37,135		26,972		38
Total commercial lending	62,653		51,458		50,546		50,003		50,109		22		25		62,653		50,109		25
Small-ticket commercial real estate	613		654		685		738		781		(6	)	(22	)	613		781		(22	)
Total commercial banking	63,266		52,112		51,231		50,741		50,890		21		24		63,266		50,890		24
Other loans	88		92		95		104		111		(4	)	(21	)	88		111		(21	)
Total loans held for investment	$	229,851	$	213,329	$	209,705	$	203,978	$	208,316	8		10		$	229,851	$	208,316	10
Loans Held For Investment (Average)
Credit card:
Domestic credit card	$	83,760	$	80,402	$	75,924	$	74,770	$	74,026	4%		13%		$	78,743	$	71,262	10%
International credit card	8,127		8,048		7,977		7,811		7,714		1		5		7,992		7,684		4
Total credit card	91,887		88,450		83,901		82,581		81,740		4		12		86,735		78,946		10
Consumer banking:
Auto	41,333		40,560		39,546		38,387		37,072		2		11		39,967		34,769		15
Home loan	25,776		26,934		28,251		29,493		30,604		(4	)	(16	)	27,601		32,589		(15	)
Retail banking	3,595		3,603		3,570		3,561		3,578		—		—		3,582		3,606		(1	)
Total consumer banking	70,704		71,097		71,367		71,441		71,254		(1	)	(1	)	71,150		70,964		—
Commercial banking:
Commercial and multifamily real estate	25,613		23,305		22,853		23,120		23,129		10		11		23,728		22,003		8
Commercial and industrial	31,132		27,620		27,414		27,190		26,409		13		18		28,349		25,028		13
Total commercial lending	56,745		50,925		50,267		50,310		49,538		11		15		52,077		47,031		11
Small-ticket commercial real estate	634		667		709		760		801		(5	)	(21	)	692		868		(20	)
Total commercial banking	57,379		51,592		50,976		51,070		50,339		11		14		52,769		47,899		10
Other loans	82		88		93		102		103		(7	)	(20	)	91		116		(22	)
Total average loans held for investment	$	220,052	$	211,227	$	206,337	$	205,194	$	203,436	4		8		$	210,745	$	197,925	6
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card	3.75%		3.08%		3.42%		3.55%		3.39%		67	bps	36	bps	3.45%		3.43%		2	bps
International credit card	2.76		1.80		2.65		2.80		3.34		96		(58	)	2.50		3.69		(119	)
Total credit card	3.66		2.96		3.35		3.48		3.38		70		28		3.36		3.46		(10	)



										2015 Q4 vs.				Year Ended
(Dollars in millions) (unaudited)	2015 Q4		2015 Q3		2015 Q2		2015 Q1		2014 Q4	2015 Q3		2014 Q4		2015		2014		2015 vs. 2014
Consumer banking:
Auto	2.10%		1.85%		1.22%		1.55%		2.14%	25	bps	(4	)bps	1.69%		1.78%		(9	)bps
Home loan	0.05		0.01		0.04		0.03		0.07	4		(2	)	0.03		0.05		(2	)
Retail banking	1.43		1.53		1.39		0.96		1.28	(10	)	15		1.33		1.07		26
Total consumer banking	1.32		1.14		0.76		0.89		1.20	18		12		1.03		0.95		8
Commercial banking:
Commercial and multifamily real estate	(0.03	)	(0.15	)	(0.04	)	(0.03	)	0.01	12		**		(0.06	)	(0.02	)	(4	)
Commercial and industrial	0.07		0.61		0.13		0.05		0.10	(54	)	(3	)	0.21		0.04		17
Total commercial lending	0.02		0.26		0.05		0.01		0.06	(24	)	(4	)	0.09		0.01		8
Small-ticket commercial real estate	0.34		0.50		0.15		0.47		0.80	(16	)	(46	)	0.36		0.52		(16	)
Total commercial banking	0.03		0.26		0.05		0.02		0.07	(23	)	(4	)	0.09		0.02		7
Other loans	(2.53	)	(5.50	)	(0.79	)	1.56		0.47	297		**		(1.66	)	0.36		**
Total net charge-offs	1.96		1.69		1.64		1.72		1.80	27		16		1.75		1.72		3
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card	3.39%		3.28%		2.84%		2.92%		3.27%	11	bps	12	bps	3.39%		3.27%		12	bps
International credit card	2.98		2.81		2.65		2.81		2.94	17		4		2.98		2.94		4
Total credit card	3.36		3.24		2.82		2.91		3.24	12		12		3.36		3.24		12
Consumer banking:
Auto	6.69		6.10		5.58		5.21		6.57	59		12		6.69		6.57		12
Home loan	0.16		0.18		0.17		0.18		0.21	(2	)	(5	)	0.16		0.21		(5	)
Retail banking	0.76		0.62		0.66		0.60		0.64	14		12		0.76		0.64		12
Total consumer banking	4.05		3.62		3.24		2.95		3.60	43		45		4.05		3.60		45
Nonperforming Loans and Nonperforming Assets Rates⁽¹⁾⁽²⁾
Credit card:
International credit card	0.65%		0.77%		0.83%		0.84%		0.86%	(12	)bps	(21	)bps	0.65%		0.86%		(21	)bps
Total credit card	0.06		0.07		0.08		0.08		0.08	(1	)	(2	)	0.06		0.08		(2	)
Consumer banking:
Auto	0.53		0.49		0.40		0.31		0.52	4		1		0.53		0.52		1
Home loan	1.24		1.18		1.13		1.16		1.10	6		14		1.24		1.10		14
Retail banking	0.77		0.74		0.79		0.71		0.61	3		16		0.77		0.61		16
Total consumer banking	0.80		0.76		0.70		0.67		0.77	4		3		0.80		0.77		3
Commercial banking:
Commercial and multifamily real estate	0.03		0.03		0.12		0.18		0.27	—		(24	)	0.03		0.27		(24	)
Commercial and industrial	1.45		1.58		1.56		0.39		0.39	(13	)	106		1.45		0.39		106
Total commercial lending	0.87		0.87		0.91		0.29		0.33	—		54		0.87		0.33		54
Small-ticket commercial real estate	0.83		0.65		0.47		1.62		0.96	18		(13	)	0.83		0.96		(13	)
Total commercial banking	0.87		0.87		0.90		0.31		0.34	—		53		0.87		0.34		53
Other loans	12.35		12.10		10.68		13.33		13.37	25		(102	)	12.35		13.37		(102	)
Total nonperforming loans	0.51		0.50		0.50		0.35		0.39	1		12		0.51		0.39		12
Total nonperforming assets	0.65		0.64		0.64		0.50		0.54	1		11		0.65		0.54		11

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Financial Summary—Business Segment Results



	Three Months Ended December 31, 2015											Year Ended December 31, 2015
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other			Total		Credit Card		Consumer Banking		Commercial Banking		Other
Net interest income	$	4,961	$	2,996	$	1,434	$	484	$	47		$	18,834	$	11,161	$	5,755	$	1,865	$	53
Non-interest income	1,233		902		182		142		7			4,579		3,421		710		487		(39		)
Total net revenue⁽³⁾	6,194		3,898		1,616		626		54			23,413		14,582		6,465		2,352		14
Provision (benefit) for credit losses	1,380		1,022		240		118		—			4,536		3,417		819		302		(2		)
Non-interest expense	3,480		2,021		1,057		342		60			12,996		7,502		4,026		1,156		312
Income (loss) from continuing operations before income taxes	1,334		855		319		166		(6		)	5,881		3,663		1,620		894		(296		)
Income tax provision (benefit)	426		302		115		60		(51		)	1,869		1,309		586		324		(350		)
Income from continuing operations, net of tax	$	908	$	553	$	204	$	106	$	45		$	4,012	$	2,354	$	1,034	$	570	$	54

	Three Months Ended September 30, 2015
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other
Net interest income (expense)	$	4,760	$	2,866	$	1,443	$	454	$	(3	)
Non-interest income	1,140		858		174		108		—
Total net revenue (loss)⁽³⁾	5,900		3,724		1,617		562		(3		)
Provision (benefit) for credit losses	1,092		831		188		75		(2		)
Non-interest expense	3,160		1,848		1,001		272		39
Income (loss) from continuing operations before income taxes	1,648		1,045		428		215		(40		)
Income tax provision (benefit)	530		375		155		78		(78		)
Income from continuing operations, net of tax	$	1,118	$	670	$	273	$	137	$	38

	Three Months Ended December 31, 2014											Year Ended December 31, 2014
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other			Total		Credit Card		Consumer Banking		Commercial Banking		Other
Net interest income	$	4,656	$	2,697	$	1,459	$	455	$	45		$	17,818	$	10,310	$	5,748	$	1,751	$	9
Non-interest income	1,157		841		185		132		(1		)	4,472		3,311		684		450		27
Total net revenue⁽³⁾	5,813		3,538		1,644		587		44			22,290		13,621		6,432		2,201		36
Provision (benefit) for credit losses	1,109		856		222		32		(1		)	3,541		2,750		703		93		(5		)
Non-interest expense	3,284		1,888		1,045		293		58			12,180		7,063		3,869		1,083		165
Income (loss) from continuing operations before income taxes	1,420		794		377		262		(13		)	6,569		3,808		1,860		1,025		(124		)
Income tax provision (benefit)	450		275		135		93		(53		)	2,146		1,329		665		366		(214		)
Income from continuing operations, net of tax	$	970	$	519	$	242	$	169	$	40		$	4,423	$	2,479	$	1,195	$	659	$	90

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial & Statistical Summary—Credit Card Business



											2015 Q4 vs.				Year Ended
	2015		2015		2015		2015		2014		2015		2014						2015 vs.
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2015		2014		2014
Credit Card⁽⁴⁾
Earnings:
Net interest income	$	2,996	$	2,866	$	2,633	$	2,666	$	2,697	5%		11%		$	11,161	$	10,310	8%
Non-interest income	902		858		845		816		841		5		7		3,421		3,311		3
Total net revenue	3,898		3,724		3,478		3,482		3,538		5		10		14,582		13,621		7
Provision for credit losses	1,022		831		895		669		856		23		19		3,417		2,750		24
Non-interest expense	2,021		1,848		1,857		1,776		1,888		9		7		7,502		7,063		6
Income from continuing operations before income taxes	855		1,045		726		1,037		794		(18	)	8		3,663		3,808		(4	)
Income tax provision	302		375		263		369		275		(19	)	10		1,309		1,329		(2	)
Income from continuing operations, net of tax	$	553	$	670	$	463	$	668	$	519	(17	)	7		$	2,354	$	2,479	(5	)
Selected performance metrics:
Period-end loans held for investment	$	96,125	$	90,135	$	87,203	$	81,754	$	85,876	7%		12%		$	96,125	$	85,876	12%
Average loans held for investment	91,887		88,450		83,901		82,581		81,740		4		12		86,735		78,946		10
Average yield on loans held for investment⁽⁵⁾	14.45%		14.39%		13.98%		14.30%		14.61%		6	bps	(16	)bps	14.28%		14.48%		(20	)bps
Total net revenue margin⁽⁶⁾	16.97		16.84		16.58		16.87		17.31		13		(34	)	16.81		17.25		(44	)
Net charge-off rate	3.66		2.96		3.35		3.48		3.38		70		28		3.36		3.46		(10	)
30+ day performing delinquency rate	3.36		3.24		2.82		2.91		3.24		12		12		3.36		3.24		12
30+ day delinquency rate	3.40		3.29		2.88		2.97		3.30		11		10		3.40		3.30		10
Nonperforming loan rate⁽¹⁾	0.06		0.07		0.08		0.08		0.08		(1	)	(2	)	0.06		0.08		(2	)
Card loan premium amortization and other intangible accretion⁽⁷⁾	$	5	$	5	$	7	$	11	$	11	—		(55)%		$	28	$	97	(71)%
PCCR intangible amortization	74		78		80		84		87		(5)%		(15	)	316		369		(14	)
Purchase volume⁽⁸⁾	75,350		69,875		68,559		57,383		63,484		8		19		271,167		224,750		21



												2015 Q4 vs.				Year Ended
	2015		2015			2015		2015		2014		2015		2014						2015 vs.
(Dollars in millions) (unaudited)	Q4		Q3			Q2		Q1		Q4		Q3		Q4		2015		2014		2014
Domestic Card
Earnings:
Net interest income	$	2,718	$	2,613		$	2,395	$	2,421	$	2,432	4%		12%		$	10,147	$	9,241	10%
Non-interest income	830		814			796		743		768		2		8		3,183		3,001		6
Total net revenue	3,548		3,427			3,191		3,164		3,200		4		11		13,330		12,242		9
Provision for credit losses	945		796			853		610		765		19		24		3,204		2,493		29
Non-interest expense	1,796		1,630			1,621		1,580		1,676		10		7		6,627		6,264		6
Income from continuing operations before income taxes	807		1,001			717		974		759		(19	)	6		3,499		3,485		—
Income tax provision	293		362			259		353		272		(19	)	8		1,267		1,246		2
Income from continuing operations, net of tax	$	514	$	639		$	458	$	621	$	487	(20	)	6		$	2,232	$	2,239	—
Selected performance metrics:
Period-end loans held for investment	$	87,939	$	82,178		$	78,984	$	74,131	$	77,704	7%		13%		$	87,939	$	77,704	13%
Average loans held for investment	83,760		80,402			75,924		74,770		74,026		4		13		78,743		71,262		10
Average yield on loans held for investment⁽⁵⁾	14.31%		14.35%			13.95%		14.23%		14.43%		(4	)bps	(12	)bps	14.21%		14.26%		(5	)bps
Total net revenue margin⁽⁶⁾	16.95		17.05			16.81		16.93		17.29		(10	)	(34	)	16.93		17.18		(25	)
Net charge-off rate	3.75		3.08			3.42		3.55		3.39		67		36		3.45		3.43		2
30+ day performing delinquency rate	3.39		3.28			2.84		2.92		3.27		11		12		3.39		3.27		12
30+ day delinquency rate	3.39		3.28			2.84		2.92		3.27		11		12		3.39		3.27		12
Purchase volume⁽⁸⁾	$	68,740	$	63,777		$	62,198	$	52,025	$	58,234	8%		18%		$	246,740	$	208,716	18%
International Card⁽⁴⁾
Earnings:
Net interest income	$	278	$	253		$	238	$	245	$	265	10%		5%		$	1,014	$	1,069	(5)%
Non-interest income	72		44			49		73		73		64		(1	)	238		310		(23	)
Total net revenue	350		297			287		318		338		18		4		1,252		1,379		(9	)
Provision for credit losses	77		35			42		59		91		120		(15	)	213		257		(17	)
Non-interest expense	225		218			236		196		212		3		6		875		799		10
Income from continuing operations before income taxes	48		44			9		63		35		9		37		164		323		(49	)
Income tax provision	9		13			4		16		3		(31	)	200		42		83		(49	)
Income from continuing operations, net of tax	$	39	$	31		$	5	$	47	$	32	26		22		$	122	$	240	(49	)
Selected performance metrics:
Period-end loans held for investment	$	8,186	$	7,957		$	8,219	$	7,623	$	8,172	3%		—		$	8,186	$	8,172	—
Average loans held for investment	8,127		8,048			7,977		7,811		7,714		1		5%		7,992		7,684		4%
Average yield on loans held for investment⁽⁵⁾	15.96%		14.88		%	14.29%		14.93%		16.31%		108	bps	(35	)bps	15.02%		16.53%		(151	)bps
Total net revenue margin⁽⁶⁾	17.21		14.77			14.36		16.31		17.55		244		(34	)	15.66		17.95		(229	)
Net charge-off rate	2.76		1.80			2.65		2.80		3.34		96		(58	)	2.50		3.69		(119	)
30+ day performing delinquency rate	2.98		2.81			2.65		2.81		2.94		17		4		2.98		2.94		4
30+ day delinquency rate	3.46		3.39			3.29		3.44		3.60		7		(14	)	3.46		3.60		(14	)
Nonperforming loan rate⁽¹⁾	0.65		0.77			0.83		0.84		0.86		(12	)	(21	)	0.65		0.86		(21	)
Purchase volume⁽⁸⁾	$	6,610	$	6,098		$	6,361	$	5,358	$	5,250	8%		26%		$	24,427	$	16,034	52%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Consumer Banking Business



											2015 Q4 vs.				Year Ended
	2015		2015		2015		2015		2014		2015		2014						2015 vs.
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2015		2014		2014
Consumer Banking
Earnings:
Net interest income	$	1,434	$	1,443	$	1,444	$	1,434	$	1,459	(1)%		(2)%		$	5,755	$	5,748	—
Non-interest income	182		174		196		158		185		5		(2	)	710		684		4%
Total net revenue	1,616		1,617		1,640		1,592		1,644		—		(2	)	6,465		6,432		1
Provision for credit losses	240		188		185		206		222		28		8		819		703		17
Non-interest expense	1,057		1,001		998		970		1,045		6		1		4,026		3,869		4
Income from continuing operations before income taxes	319		428		457		416		377		(25	)	(15	)	1,620		1,860		(13	)
Income tax provision	115		155		166		150		135		(26	)	(15	)	586		665		(12	)
Income from continuing operations, net of tax	$	204	$	273	$	291	$	266	$	242	(25	)	(16	)	$	1,034	$	1,195	(13	)
Selected performance metrics:
Period-end loans held for investment	$	70,372	$	70,990	$	71,176	$	71,379	$	71,439	(1)%		(1)%		$	70,372	$	71,439	(1)%
Average loans held for investment	70,704		71,097		71,367		71,441		71,254		(1	)	(1	)	71,150		70,964		—
Average yield on loans held for investment⁽⁵⁾	6.25%		6.25%		6.27%		6.26%		6.45%		—		(20	)bps	6.26%		6.26%		—
Auto loan originations	$	4,977	$	5,590	$	5,433	$	5,185	$	5,390	(11)%		(8)%		$	21,185	$	20,903	1%
Period-end deposits	172,702		170,866		170,321		172,502		168,078		1		3		172,702		168,078		3
Average deposits	171,521		170,816		171,076		169,593		167,727		—		2		170,757		168,623		1
Average deposit interest rate	0.54%		0.56%		0.57%		0.57%		0.57%		(2	)bps	(3	)bps	0.56%		0.57%		(1	)bps
Core deposit intangible amortization	$	17	$	19	$	21	$	22	$	24	(11)%		(29)%		$	79	$	108	(27)%
Net charge-off rate	1.32%		1.14%		0.76%		0.89%		1.20%		18	bps	12	bps	1.03%		0.95%		8	bps
30+ day performing delinquency rate	4.05		3.62		3.24		2.95		3.60		43		45		4.05		3.60		45
30+ day delinquency rate	4.67		4.22		3.80		3.46		4.23		45		44		4.67		4.23		44
Nonperforming loan rate⁽¹⁾	0.80		0.76		0.70		0.67		0.77		4		3		0.80		0.77		3
Nonperforming asset rate⁽²⁾	1.10		1.05		0.98		0.95		1.06		5		4		1.10		1.06		4

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Commercial Banking Business



											2015 Q4 vs.				Year Ended
	2015		2015		2015		2015		2014		2015		2014						2015 vs.
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2015		2014		2014
Commercial Banking
Earnings:
Net interest income	$	484	$	454	$	466	$	461	$	455	7%		6%		$	1,865	$	1,751	7%
Non-interest income	142		108		123		114		132		31		8		487		450		8
Total net revenue⁽³⁾	626		562		589		575		587		11		7		2,352		2,201		7
Provision for credit losses	118		75		49		60		32		57		269		302		93		225
Non-interest expense	342		272		270		272		293		26		17		1,156		1,083		7
Income from continuing operations before income taxes	166		215		270		243		262		(23	)	(37	)	894		1,025		(13	)
Income tax provision	60		78		98		88		93		(23	)	(35	)	324		366		(11	)
Income from continuing operations, net of tax	$	106	$	137	$	172	$	155	$	169	(23	)	(37	)	$	570	$	659	(14	)
Selected performance metrics:
Period-end loans held for investment	$	63,266	$	52,112	$	51,231	$	50,741	$	50,890	21%		24%		$	63,266	$	50,890	24%
Average loans held for investment	57,379		51,592		50,976		51,070		50,339		11		14		52,769		47,899		10
Average yield on loans held for investment⁽³⁾⁽⁵⁾	3.18%		3.21%		3.26%		3.22%		3.33%		(3	)bps	(15	)bps	3.21%		3.42%		(21	)bps
Period-end deposits	$	34,257	$	32,751	$	32,909	$	32,575	$	31,954	5%		7%		$	34,257	$	31,954	7%
Average deposits	33,797		32,806		32,778		32,845		32,363		3		4		33,058		31,752		4
Average deposit interest rate	0.26%		0.25%		0.25%		0.24%		0.24%		1	bps	2	bps	0.25%		0.24%		1	bps
Core deposit intangible amortization	$	4	$	3	$	4	$	4	$	5	33%		(20)%		$	15	$	21	(29)%
Net charge-off rate	0.03%		0.26%		0.05%		0.02%		0.07%		(23	)bps	(4	)bps	0.09%		0.02%		7	bps
Nonperforming loan rate^(1)(10)	0.87		0.87		0.90		0.31		0.34		—		53		0.87		0.34		53
Nonperforming asset rate^(2)(10)	0.87		0.87		0.91		0.31		0.36		—		51		0.87		0.36		51
Risk category:^(9)(10)
Noncriticized	$	60,701	$	49,934	$	49,001	$	48,938	$	49,284	22%		23%		$	60,701	$	49,284	23%
Criticized performing	2,015		1,725		1,767		1,645		1,431		17		41		2,015		1,431		41
Criticized nonperforming	550		453		463		158		175		21		**		550		175		**
Total commercial loans	$	63,266	$	52,112	$	51,231	$	50,741	$	50,890	21		24		$	63,266	$	50,890	24
Risk category as a percentage of period-end commercial loans held for investment:⁽¹⁰⁾
Noncriticized	95.9%		95.8%		95.7%		96.5%		96.9%		10	bps	(100	)bps	95.9%		96.9%		(100	)bps
Criticized performing	3.2		3.3		3.4		3.2		2.8		(10	)	40		3.2		2.8		40
Criticized nonperforming	0.9		0.9		0.9		0.3		0.3		—		60		0.9		0.3		60
Total commercial loans	100.0%		100.0%		100.0%		100.0%		100.0%						100.0%		100.0%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Other and Total



																2015 Q4 vs.				Year Ended
	2015			2015			2015			2015			2014			2015		2014								2015 vs.
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2015			2014			2014
Other
Earnings:
Net interest income (expense)	$	47		$	(3	)	$	(6	)	$	15		$	45		**		4%		$	53		$	9		**
Non-interest income	7			—			(29		)	(17		)	(1		)	**		**		(39		)	27			**
Total net revenue (loss)⁽³⁾	54			(3		)	(35		)	(2		)	44			**		23		14			36			(61	)%
Benefit for credit losses	—			(2		)	—			—			(1		)	**		**		(2		)	(5		)	(60	)
Non-interest expense⁽¹¹⁾	60			39			182			31			58			54%		3		312			165			89
Loss from continuing operations before income taxes	(6		)	(40		)	(217		)	(33		)	(13		)	(85	)	(54	)	(296		)	(124		)	139
Income tax benefit	(51		)	(78		)	(143		)	(78		)	(53		)	(35	)	(4	)	(350		)	(214		)	64
Income (loss) from continuing operations, net of tax	$	45		$	38		$	(74	)	$	45		$	40		18		13		$	54		$	90		(40	)
Selected performance metrics:
Period-end loans held for investment	$	88		$	92		$	95		$	104		$	111		(4)%		(21)%		$	88		$	111		(21)%
Average loans held for investment	82			88			93			102			103			(7	)	(20	)	91			116			(22	)
Period-end deposits	10,762			9,286			5,550			5,363			5,516			16		95		10,762			5,516			95
Average deposits	10,581			7,352			5,289			5,413			5,265			44		101		7,174			5,300			35
Total
Earnings:
Net interest income	$	4,961		$	4,760		$	4,537		$	4,576		$	4,656		4%		7%		$	18,834		$	17,818		6%
Non-interest income	1,233			1,140			1,135			1,071			1,157			8		7		4,579			4,472			2
Total net revenue	6,194			5,900			5,672			5,647			5,813			5		7		23,413			22,290			5
Provision for credit losses	1,380			1,092			1,129			935			1,109			26		24		4,536			3,541			28
Non-interest expense	3,480			3,160			3,307			3,049			3,284			10		6		12,996			12,180			7
Income from continuing operations before income taxes	1,334			1,648			1,236			1,663			1,420			(19	)	(6	)	5,881			6,569			(10	)
Income tax provision	426			530			384			529			450			(20	)	(5	)	1,869			2,146			(13	)
Income from continuing operations, net of tax	$	908		$	1,118		$	852		$	1,134		$	970		(19	)	(6	)	$	4,012		$	4,423		(9	)
Selected performance metrics:
Period-end loans held for investment	$	229,851		$	213,329		$	209,705		$	203,978		$	208,316		8%		10%		$	229,851		$	208,316		10%
Average loans held for investment	220,052			211,227			206,337			205,194			203,436			4		8		210,745			197,925			6
Period-end deposits	217,721			212,903			208,780			210,440			205,548			2		6		217,721			205,548			6
Average deposits	215,899			210,974			209,143			207,851			205,355			2		5		210,989			205,675			3

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Notes to Loan and Business Segments Disclosures (Tables 7—12)


^**	Not meaningful.


⁽¹⁾	The nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment.

⁽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. Calculation of nonperforming assets rates for our Consumer Banking and Commercial Banking businesses are adjusted to exclude the impact of acquired REO.

⁽³⁾

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% with offsetting reclassifications within the Other category.


⁽⁴⁾	Includes a build in our U.K. PPI Reserve in Q3 2015 and Q2 2015, which impacted both revenue and non-interest expense within our International Card business.


⁽⁵⁾	Calculated based on annualized interest income for the period divided by average loans held for investment during the period for the specified loan category. Annualized interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment.


⁽⁶⁾	Calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the specified loan category.


⁽⁷⁾	Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the May 2012 transaction in which we acquired substantially all of HSBC’s credit card and private-label credit card business in the United States.


⁽⁸⁾	Includes credit card purchase transactions, net of returns for loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.


⁽⁹⁾	Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.

⁽¹⁰⁾

The GE Healthcare acquisition included $835 million of acquired loans that are being accounted for under ASC 310-30 (formerly “SOP 03-3”) due to their deterioration in credit quality since origination. Because we expect to collect all of our recorded investments in these loans, they are classified and presented as performing and noncriticized in these tables. From a managed perspective, we evaluate loans based on their actual risk ratings, and accordingly we are also including our nonperforming and criticized ratios measured on that basis. Were these SOP 03-3 loans to be classified based on their risk ratings, both our nonperforming loan rate and nonperforming asset rate for Commercial Banking in Q4 2015 would be 0.93%; our Criticized performing balance and percentage would increase to $2.8 billion and 4.45%, respectively; Criticized nonperforming balance and percentage would increase to $587 million and 0.93%, respectively, with corresponding decreases to the balance and percentage of our Noncriticized category.


⁽¹¹⁾	Includes restructuring charges for employee severance and related benefits pursuant to our ongoing benefit programs.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures⁽¹⁾



	Basel III Standardized Approach
(Dollars in millions) (unaudited)	December 31, 2015		September 30, 2015		June 30, 2015		March 31, 2015		December 31, 2014
Regulatory Capital Metrics
Common equity Tier 1 capital	$	29,544	$	30,109	$	29,804	$	29,671	$	29,534
Tier 1 capital	32,838		33,402		32,614		31,493		31,355
Total capital⁽²⁾	38,846		37,694		37,115		35,878		35,879
Risk-weighted assets⁽³⁾	266,408		249,081		246,106		238,011		236,944
Average assets for the leverage ratio	309,037		300,010		293,291		295,556		291,243
Capital Ratios
Common equity Tier 1 capital ratio⁽⁴⁾	11.1%		12.1%		12.1%		12.5%		12.5%
Tier 1 capital ratio⁽⁵⁾	12.3		13.4		13.3		13.2		13.2
Total capital ratio⁽⁶⁾	14.6		15.1		15.1		15.1		15.1
Tier 1 leverage ratio⁽⁷⁾	10.6		11.1		11.1		10.7		10.8
Tangible common equity (“TCE”) ratio⁽⁸⁾	8.9		9.8		9.7		9.8		9.5

Reconciliation of Non-GAAP 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”) and tangible assets. The tables below provide the details of the calculation of our non-GAAP capital measures and regulatory capital. 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.



	2015			2015			2015			2015			2014
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4
Tangible Common Equity (Period End)
Stockholders’ equity	$	47,284		$	47,685		$	46,659		$	45,730		$	45,053
Goodwill and intangible assets⁽⁹⁾	(15,701		)	(15,153		)	(15,240		)	(15,307		)	(15,383		)
Noncumulative perpetual preferred stock⁽¹⁰⁾	(3,294		)	(3,294		)	(2,810		)	(1,822		)	(1,822		)
Tangible common equity	$	28,289		$	29,238		$	28,609		$	28,601		$	27,848
Tangible Common Equity (Average)
Average stockholders’ equity	$	48,712		$	48,456		$	47,255		$	46,397		$	45,576
Average goodwill and intangible assets⁽⁹⁾	(15,316		)	(15,183		)	(15,256		)	(15,339		)	(15,437		)
Average noncumulative perpetual preferred stock⁽¹⁰⁾	(3,294		)	(3,049		)	(2,377		)	(1,822		)	(1,681		)
Average tangible common equity	$	30,102		$	30,224		$	29,622		$	29,236		$	28,458



	2015			2015			2015			2015			2014
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4
Tangible Assets (Period End)
Total assets⁽¹¹⁾	$	334,048		$	313,700		$	310,510		$	306,224		$	308,167
Goodwill and intangible assets⁽⁹⁾	(15,701		)	(15,153		)	(15,240		)	(15,307		)	(15,383		)
Tangible assets⁽¹¹⁾	$	318,347		$	298,547		$	295,270		$	290,917		$	292,784
Tangible Assets (Average)
Average total assets⁽¹¹⁾	$	323,354		$	313,822		$	307,206		$	309,401		$	304,153
Average goodwill and intangible assets⁽⁹⁾	(15,316		)	(15,183		)	(15,256		)	(15,339		)	(15,437		)
Average tangible assets⁽¹¹⁾	$	308,038		$	298,639		$	291,950		$	294,062		$	288,716

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach



(Dollars in millions) (unaudited)	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014
Common equity excluding AOCI	$	44,606		$	44,533		$	44,246		$	44,120		$	43,661
Adjustments:
AOCI^(12)(13)	(254		)	75			(128		)	(26		)	(69		)
Goodwill⁽⁹⁾	(14,296		)	(13,805		)	(13,809		)	(13,801		)	(13,805		)
Intangible assets^(9)(13)	(393		)	(374		)	(413		)	(450		)	(243		)
Other	(119		)	(320		)	(92		)	(172		)	(10		)
Common equity Tier 1 capital	$	29,544		$	30,109		$	29,804		$	29,671		$	29,534
Risk-weighted assets⁽³⁾	$	266,408		$	249,081		$	246,106		$	238,011		$	236,944
Common equity Tier 1 capital ratio⁽⁴⁾	11.1%			12.1%			12.1%			12.5%			12.5%

__________


⁽¹⁾	Regulatory capital metrics and capital ratios as of the end of Q4 2015 are preliminary and therefore subject to change.


⁽²⁾	Total capital equals the sum of Tier 1 capital and Tier 2 capital.


⁽³⁾	As of January 1, 2015, risk-weighted assets are calculated under the Basel III Standardized Approach, subject to transition provisions. Prior to January 1, 2015 risk-weighted assets were calculated under Basel I.


⁽⁴⁾	Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.


⁽⁵⁾	Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.


⁽⁶⁾	Total capital ratio is a regulatory capital measure calculated based on Total capital divided by risk-weighted assets.


⁽⁷⁾	Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.


⁽⁸⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.


⁽⁹⁾	Includes impact of related deferred taxes.


⁽¹⁰⁾	Includes related surplus.


⁽¹¹⁾	As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the related right to reclaim cash collateral or obligation to return cash collateral. Prior period results, excluding regulatory ratios, have been recast to conform to this presentation.


⁽¹²⁾	Amounts presented are net of tax.


⁽¹³⁾	Amounts based on transition provisions for regulatory capital deductions and adjustments of 20% for 2014 and 40% for 2015.

CAPITAL ONE FINANCIAL CORP - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - January 26, 2016

Attached files