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

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EX-99.1 - EXHIBIT 99.1 - CAPITAL ONE FINANCIAL CORP	q32016earningsrelease-ex991.htm
8-K - 8-K - CAPITAL ONE FINANCIAL CORP	q32016earningsrelease8-k.htm

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement

Third Quarter2016⁽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
	Table 8:	Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity	13
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	14
	Table 10:	Financial & Statistical Summary—Credit Card Business	15
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	18
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	19
	Table 13:	Financial & Statistical Summary—Other and Total	20
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	21
Other
	Table 15:	Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures	22

__________


⁽¹⁾	The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended September 30, 2016 once it is filed with the Securities and Exchange Commission.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated



																2016 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except per share data and as noted) (unaudited)	2016			2016			2016			2015			2015			2016		2015								2016 vs.
	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2016			2015			2015
Income Statement
Net interest income	$	5,277		$	5,093		$	5,056		$	4,961		$	4,760		4%		11%		$	15,426		$	13,873		11%
Non-interest income	1,184			1,161			1,164			1,233			1,140			2		4		3,509			3,346			5
Total net revenue⁽¹⁾	6,461			6,254			6,220			6,194			5,900			3		10		18,935			17,219			10
Provision for credit losses	1,588			1,592			1,527			1,380			1,092			—		45		4,707			3,156			49
Non-interest expense:
Marketing	393			415			428			564			418			(5	)	(6	)	1,236			1,180			5
Amortization of intangibles	89			95			101			103			106			(6	)	(16	)	285			327			(13	)
Operating expenses	2,879			2,785			2,694			2,813			2,636			3		9		8,358			8,009			4
Total non-interest expense	3,361			3,295			3,223			3,480			3,160			2		6		9,879			9,516			4
Income from continuing operations before income taxes	1,512			1,367			1,470			1,334			1,648			11		(8	)	4,349			4,547			(4	)
Income tax provision	496			424			452			426			530			17		(6	)	1,372			1,443			(5	)
Income from continuing operations, net of tax	1,016			943			1,018			908			1,118			8		(9	)	2,977			3,104			(4	)
Income (loss) from discontinued operations, net of tax⁽²⁾	(11		)	(1		)	(5		)	12			(4		)	**		175		(17		)	26			**
Net income	1,005			942			1,013			920			1,114			7		(10	)	2,960			3,130			(5	)
Dividends and undistributed earnings allocated to participating securities⁽³⁾	(6		)	(6		)	(6		)	(4		)	(6		)	—		—		(18		)	(16		)	13
Preferred stock dividends	(37		)	(65		)	(37		)	(68		)	(29		)	(43	)	28		(139		)	(90		)	54
Net income available to common stockholders	$	962		$	871		$	970		$	848		$	1,079		10		(11	)	$	2,803		$	3,024		(7	)
Common Share Statistics
Basic earnings per common share:⁽³⁾
Net income from continuing operations	$	1.94		$	1.70		$	1.86		$	1.58		$	2.01		14%		(3)%		$	5.50		$	5.49		—
Income (loss) from discontinued operations	(0.02		)	—			(0.01		)	0.02			(0.01		)	**		**		(0.03		)	0.05			**
Net income per basic common share	$	1.92		$	1.70		$	1.85		$	1.60		$	2.00		13		(4	)	$	5.47		$	5.54		(1)%
Diluted earnings per common share:⁽³⁾
Net income from continuing operations	$	1.92		$	1.69		$	1.85		$	1.56		$	1.99		14		(4	)	$	5.45		$	5.43		—
Income (loss) from discontinued operations	(0.02		)	—			(0.01		)	0.02			(0.01		)	**		**		(0.03		)	0.05			**
Net income per diluted common share⁽⁴⁾	$	1.90		$	1.69		$	1.84		$	1.58		$	1.98		12		(4	)	$	5.42		$	5.48		(1	)
Weighted-average common shares outstanding (in millions):
Basic	501.1			511.7			523.5			530.8			540.6			(2	)	(7	)	512.0			545.5			(6	)
Diluted	505.9			516.5			528.0			536.3			546.3			(2	)	(7	)	516.8			551.9			(6	)
Common shares outstanding (period-end, in millions)	489.2			505.9			514.5			527.3			534.9			(3	)	(9	)	489.2			534.9			(9	)
Dividends paid per common share	$	0.40		$	0.40		$	0.40		$	0.40		$	0.40		—		—		$	1.20		$	1.10		9
Tangible book value per common share (period-end)⁽⁵⁾	59.00			57.84			55.94			53.65			54.66			2		8		59.00			54.66			8



											2016 Q3 vs.			Nine Months Ended September 30,
(Dollars in millions) (unaudited)	2016		2016		2016		2015		2015		2016		2015					2016 vs.
(Dollars in millions) (unaudited)	Q3		Q2		Q1		Q4		Q3		Q2		Q3	2016		2015		2015
Balance Sheet (Period-End)
Loans held for investment⁽⁶⁾	$	238,019	$	234,603	$	227,613	$	229,851	$	213,329	1%		12%	$	238,019	$	213,329	12%
Interest-earning assets	313,431		307,163		298,348		302,007		283,073		2		11	313,431		283,073		11
Total assets	345,061		339,117		330,346		334,048		313,700		2		10	345,061		313,700		10
Interest-bearing deposits	200,416		195,635		196,597		191,874		187,848		2		7	200,416		187,848		7
Total deposits	225,981		221,059		221,779		217,721		212,903		2		6	225,981		212,903		6
Borrowings	59,820		59,181		50,497		59,115		42,778		1		40	59,820		42,778		40
Common equity	44,336		44,813		44,411		43,990		44,391		(1	)	—	44,336		44,391		—
Total stockholders’ equity	48,213		48,108		47,707		47,284		47,685		—		1	48,213		47,685		1
Balance Sheet (Average Balances)
Loans held for investment⁽⁶⁾	$	235,843	$	230,379	$	226,736	$	220,052	$	211,227	2%		12%	$	231,004	$	207,608	11%
Interest-earning assets	310,987		302,764		299,456		292,054		283,082		3		10	304,423		279,388		9
Total assets	343,153		334,479		331,919		323,354		313,822		3		9	336,539		310,146		9
Interest-bearing deposits	196,913		195,641		194,125		189,885		185,800		1		6	195,565		184,258		6
Total deposits	222,251		221,146		219,180		215,899		210,974		—		5	220,864		209,334		6
Borrowings	60,708		54,359		53,761		48,850		45,070		12		35	56,292		44,264		27
Common equity	45,314		45,640		45,782		45,418		45,407		(1	)	—	45,578		44,956		1
Total stockholders’ equity	49,033		48,934		49,078		48,712		48,456		—		1	49,015		47,376		3

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated



												2016 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions except as noted) (unaudited)	2016		2016		2016			2015		2015		2016		2015						2016 vs.
(Dollars in millions except as noted) (unaudited)	Q3		Q2		Q1			Q4		Q3		Q2		Q3		2016		2015		2015
Performance Metrics
Net interest income growth (period over period)	4%		1%		2%			4%		5%		**		**		11%		5%		**
Non-interest income growth (period over period)	2		—		(6		)	8		—		**		**		5		1		**
Total net revenue growth (period over period)	3		1		—			5		4		**		**		10		5		**
Total net revenue margin⁽⁷⁾	8.31		8.26		8.31			8.48		8.34		5	bps	(3	)bps	8.29		8.22		7	bps
Net interest margin⁽⁸⁾	6.79		6.73		6.75			6.79		6.73		6		6		6.76		6.62		14
Return on average assets	1.18		1.13		1.23			1.12		1.43		5		(25	)	1.18		1.33		(15	)
Return on average tangible assets⁽⁹⁾	1.24		1.18		1.29			1.18		1.50		6		(26	)	1.24		1.40		(16	)
Return on average common equity⁽¹⁰⁾	8.59		7.64		8.52			7.36		9.54		95		(95	)	8.25		8.89		(64	)
Return on average tangible common equity⁽¹¹⁾	13.06		11.61		12.94			11.11		14.33		145		(127	)	12.54		13.46		(92	)
Non-interest expense as a percentage of average loans held for investment	5.70		5.72		5.69			6.33		5.98		(2	)	(28	)	5.70		6.11		(41	)
Efficiency ratio⁽¹²⁾	52.02		52.69		51.82			56.18		53.56		(67	)	(154	)	52.17		55.26		(309	)
Effective income tax rate for continuing operations	32.8		31.0		30.7			31.9		32.2		180		60		31.5		31.7		(20	)
Employees (in thousands), period-end	46.5		46.1		45.8			45.4		46.9		1%		(1)%		46.5		46.9		(1)%
Credit Quality Metrics
Allowance for loan and lease losses	$	6,258	$	5,881	$	5,416		$	5,130	$	4,847	6%		29%		$	6,258	$	4,847	29%
Allowance as a percentage of loans held for investment	2.63%		2.51%		2.38%			2.23%		2.27%		12	bps	36	bps	2.63%		2.27%		36	bps
Net charge-offs	$	1,240	$	1,155	$	1,178		$	1,078	$	890	7%		39%		$	3,573	$	2,617	37%
Net charge-off rate⁽¹³⁾	2.10%		2.01%		2.08%			1.96%		1.69%		9	bps	41	bps	2.06%		1.68%		38	bps
30+ day performing delinquency rate	2.71		2.47		2.33			2.69		2.63		24		8		2.71		2.63		8
30+ day delinquency rate	3.04		2.79		2.64			3.00		2.95		25		9		3.04		2.95		9
Capital Ratios⁽¹⁴⁾
Common equity Tier 1 capital	10.6%		10.9%		11.1%			11.1%		12.1%		(30	)bps	(150	)bps	10.6%		12.1%		(150	)bps
Tier 1 capital	12.0		12.2		12.4			12.4		13.4		(20	)	(140	)	12.0		13.4		(140	)
Total capital	14.7		14.4		14.6			14.6		15.1		30		(40	)	14.7		15.1		(40	)
Tier 1 leverage	10.1		10.2		10.2			10.6		11.1		(10	)	(100	)	10.1		11.1		(100	)
Tangible common equity (“TCE”)⁽¹⁵⁾	8.8		9.0		9.1			8.9		9.8		(20	)	(100	)	8.8		9.8		(100	)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income



	Three Months Ended									2016 Q3 vs.				Nine Months Ended September 30,
	2016			2016			2015			2016		2015								2016 vs.
(Dollars in millions, except per share data and as noted) (unaudited)	Q3			Q2			Q3			Q2		Q3		2016			2015			2015
Interest income:
Loans, including loans held for sale	$	5,383		$	5,148		$	4,753		5%		13%		$	15,616		$	13,824		13%
Investment securities	386			405			386			(5	)	—		1,206			1,174			3
Other	25			18			25			39		—		60			77			(22	)
Total interest income	5,794			5,571			5,164			4		12		16,882			15,075			12
Interest expense:
Deposits	306			292			271			5		13		881			814			8
Securitized debt obligations	56			47			39			19		44		151			108			40
Senior and subordinated notes	121			111			82			9		48		338			241			40
Other borrowings	34			28			12			21		183		86			39			121
Total interest expense	517			478			404			8		28		1,456			1,202			21
Net interest income	5,277			5,093			4,760			4		11		15,426			13,873			11
Provision for credit losses	1,588			1,592			1,092			—		45		4,707			3,156			49
Net interest income after provision for credit losses	3,689			3,501			3,668			5		1		10,719			10,717			—
Non-interest income:
Service charges and other customer-related fees	387			371			423			4		(9	)	1,162			1,289			(10	)
Interchange fees, net	603			616			555			(2	)	9		1,815			1,618			12
Net other-than-temporary impairment recognized in earnings	—			(2		)	(5		)	**		**		(10		)	(27		)	(63	)
Other	194			176			167			10		16		542			466			16
Total non-interest income	1,184			1,161			1,140			2		4		3,509			3,346			5
Non-interest expense:
Salaries and associate benefits	1,317			1,279			1,189			3		11		3,866			3,760			3
Occupancy and equipment	499			465			444			7		12		1,422			1,318			8
Marketing	393			415			418			(5	)	(6	)	1,236			1,180			5
Professional services	296			304			313			(3	)	(5	)	878			943			(7	)
Communications and data processing	252			262			226			(4	)	12		757			636			19
Amortization of intangibles	89			95			106			(6	)	(16	)	285			327			(13	)
Other	515			475			464			8		11		1,435			1,352			6
Total non-interest expense	3,361			3,295			3,160			2		6		9,879			9,516			4
Income from continuing operations before income taxes	1,512			1,367			1,648			11		(8	)	4,349			4,547			(4	)
Income tax provision	496			424			530			17		(6	)	1,372			1,443			(5	)
Income from continuing operations, net of tax	1,016			943			1,118			8		(9	)	2,977			3,104			(4	)
Income (loss) from discontinued operations, net of tax⁽²⁾	(11		)	(1		)	(4		)	**		175		(17		)	26			**
Net income	1,005			942			1,114			7		(10	)	2,960			3,130			(5	)
Dividends and undistributed earnings allocated to participating securities⁽³⁾	(6		)	(6		)	(6		)	—		—		(18		)	(16		)	13
Preferred stock dividends	(37		)	(65		)	(29		)	(43	)	28		(139		)	(90		)	54
Net income available to common stockholders	$	962		$	871		$	1,079		10		(11	)	$	2,803		$	3,024		(7	)



	Three Months Ended								2016 Q3 vs.				Nine Months Ended September 30,
	2016			2016		2015			2016		2015							2016 vs.
(Dollars in millions, except per share data and as noted) (unaudited)	Q3			Q2		Q3			Q2		Q3		2016			2015		2015
Basic earnings per common share:⁽³⁾
Net income from continuing operations	$	1.94		$	1.70	$	2.01		14%		(3)%		$	5.50		$	5.49	—
Income (loss) from discontinued operations	(0.02		)	—		(0.01		)	**		**		(0.03		)	0.05		**
Net income per basic common share	$	1.92		$	1.70	$	2.00		13		(4	)	$	5.47		$	5.54	(1)%
Diluted earnings per common share:⁽³⁾
Net income from continuing operations	$	1.92		$	1.69	$	1.99		14		(4	)	$	5.45		$	5.43	—
Income (loss) from discontinued operations	(0.02		)	—		(0.01		)	**		**		(0.03		)	0.05		**
Net income per diluted common share⁽⁴⁾	$	1.90		$	1.69	$	1.98		12		(4	)	$	5.42		$	5.48	(1	)
Weighted-average common shares outstanding (in millions):
Basic common shares	501.1			511.7		540.6			(2	)	(7	)	512.0			545.5		(6	)
Diluted common shares	505.9			516.5		546.3			(2	)	(7	)	516.8			551.9		(6	)
Dividends paid per common share	$	0.40		$	0.40	$	0.40		—		—		$	1.20		$	1.10	9

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets



																2016 Q3 vs.
	2016			2016			2016			2015			2015			2015		2015
(Dollars in millions) (unaudited)	Q3			Q2			Q1			Q4			Q3			Q4		Q3
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,350		$	3,253		$	3,241		$	3,407		$	2,701		(2)%		24%
Interest-bearing deposits with banks	5,744			3,896			1,994			4,616			4,136			24		39
Total cash and cash equivalents	9,094			7,149			5,235			8,023			6,837			13		33
Restricted cash for securitization investors	287			265			960			1,017			586			(72	)	(51	)
Securities available for sale, at fair value	41,511			39,960			40,092			39,061			39,431			6		5
Securities held to maturity, at carrying value	25,019			25,120			25,080			24,619			23,711			2		6
Loans held for investment:⁽⁶⁾
Unsecuritized loans held for investment	206,763			202,778			195,705			196,068			179,748			5		15
Loans held in consolidated trusts	31,256			31,825			31,908			33,783			33,581			(7	)	(7	)
Total loans held for investment	238,019			234,603			227,613			229,851			213,329			4		12
Allowance for loan and lease losses	(6,258		)	(5,881		)	(5,416		)	(5,130		)	(4,847		)	22		29
Net loans held for investment	231,761			228,722			222,197			224,721			208,482			3		11
Loans held for sale, at lower of cost or fair value	994			1,220			1,251			904			566			10		76
Premises and equipment, net	3,561			3,556			3,542			3,584			3,629			(1	)	(2	)
Interest receivable	1,251			1,236			1,221			1,189			1,101			5		14
Goodwill	14,493			14,495			14,492			14,480			13,983			—		4
Other assets	17,090			17,394			16,276			16,450			15,374			4		11
Total assets	$	345,061		$	339,117		$	330,346		$	334,048		$	313,700		3		10



																2016 Q3 vs.
	2016			2016			2016			2015			2015			2015		2015
(Dollars in millions) (unaudited)	Q3			Q2			Q1			Q4			Q3			Q4		Q3
Liabilities:
Interest payable	$	237		$	301		$	217		$	299		$	198		(21)%		20%
Deposits:
Non-interest-bearing deposits	25,565			25,424			25,182			25,847			25,055			(1	)	2
Interest-bearing deposits	200,416			195,635			196,597			191,874			187,848			4		7
Total deposits	225,981			221,059			221,779			217,721			212,903			4		6
Securitized debt obligations	18,411			16,130			14,913			16,166			15,656			14		18
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	1,079			999			917			981			1,021			10		6
Senior and subordinated notes	24,001			21,872			21,736			21,837			21,773			10		10
Other borrowings	16,329			20,180			12,931			20,131			4,328			(19	)	277
Total other debt	41,409			43,051			35,584			42,949			27,122			(4	)	53
Other liabilities	10,810			10,468			10,146			9,629			10,136			12		7
Total liabilities	296,848			291,009			282,639			286,764			266,015			4		12

Stockholders’ equity:
Preferred stock	0			0			0			0			0			—		—
Common stock	7			7			7			6			6			17		17
Additional paid-in capital, net	30,439			29,786			29,709			29,655			29,594			3		3
Retained earnings	29,245			28,479			27,808			27,045			26,407			8		11
Accumulated other comprehensive income (loss)	121			241			(41		)	(616		)	(142		)	**		**
Treasury stock, at cost	(11,599		)	(10,405		)	(9,776		)	(8,806		)	(8,180		)	32		42
Total stockholders’ equity	48,213			48,108			47,707			47,284			47,685			2		1
Total liabilities and stockholders’ equity	$	345,061		$	339,117		$	330,346		$	334,048		$	313,700		3		10

CAPITAL ONE FINANCIAL CORPORATION (COF)

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


⁽¹⁾	Total net revenue was reduced by $289 million in Q3 2016, $244 million in Q2 2016, $228 million in Q1 2016, $222 million in Q4 2015 and $195 million in Q3 2015 for the estimated uncollectible amount of billed finance charges and fees and related losses.


⁽²⁾	Historically, the majority of the provision (benefit) for representation and warranty losses has been included, net of tax, in discontinued operations. The provision (benefit) for mortgage representation and warranty losses included the following activity:



	2016		2016			2016			2015			2015
(Dollars in millions) (unaudited)	Q3		Q2			Q1			Q4			Q3
Provision (benefit) for mortgage representation and warranty losses before income taxes:
Recorded in continuing operations	$	—	$	(1	)	$	(1	)	$	(1	)	$	(7	)
Recorded in discontinued operations	18		2			3			(21		)	3
Total provision (benefit) for mortgage representation and warranty losses before income taxes	$	18	$	1		$	2		$	(22	)	$	(4	)

The mortgage representation and warranty reserve was $632 million as of September 30, 2016, $610 million as of December 31, 2015 and $632 million as of September 30, 2015.


⁽³⁾	Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total.

⁽⁴⁾

In Q3 2016, we recorded a build in the U.K. Payment Protection Insurance customer refund reserve (“U.K. PPI Reserve”) of $63 million. In Q2 2016, we recorded charges totaling $30 million associated with a build of $54 million in the U.K. PPI Reserve, partially offset by a gain of $24 million related to the exchange of our ownership interest in Visa Europe with Visa Inc. as a result of Visa Inc.’s acquisition of Visa Europe. In Q4 2015, we recorded charges totaling $72 million associated with (i) closing the GE Healthcare Financial Services (“HFS”) 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. In Q3 2015, we recorded a build in the U.K. PPI Reserve of $69 million. We report the following non-GAAP financial measures that we believe are helpful for investors and users of our financial information to understand the effect of these items on our reported results. The table below presents a reconciliation of our reported results to these non-GAAP financial measures. The period not presented had no adjustments.



	2016 Q3						2016 Q2						2015 Q4						2015 Q3
(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	$	1,512	$	1,005	$	1.90	$	1,367	$	942	$	1.69	$	1,334	$	920	$	1.58	$	1,648	$	1,114	$	1.98
Adjustments	63		63		0.13		30		37		0.07		72		46		0.09		69		69		0.12
Results excluding adjustments	$	1,575	$	1,068	$	2.03	$	1,397	$	979	$	1.76	$	1,406	$	966	$	1.67	$	1,717	$	1,183	$	2.10


⁽⁵⁾	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See “Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information on non-GAAP measures.

⁽⁶⁾

Included in loans held for investment are purchased credit-impaired loans (“PCI 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 Standards Codification 310-30). These include certain of our consumer and commercial loans that were acquired through business combinations. The table below presents amounts related to PCI loans:



	2016		2016		2016		2015		2015
(Dollars in millions) (unaudited)	Q3		Q2		Q1		Q4		Q3
PCI loans:
Period-end unpaid principal balance	$	17,011	$	18,256	$	19,492	$	20,434	$	20,585
Period-end loans held for investment	16,149		17,358		18,568		19,518		19,743
Average loans held for investment	16,529		17,783		18,894		19,319		20,116


⁽⁷⁾	Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.


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


⁽⁹⁾	Return on average tangible assets is a non-GAAP measure calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See “Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information on non-GAAP measures.

⁽¹⁰⁾

Calculated based on annualized (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.

⁽¹¹⁾

Return on average tangible common equity (“ROTCE”) is a non-GAAP measure calculated based on annualized (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 ROTCE may not be comparable to similarly titled measures reported by other companies. See “Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information on non-GAAP measures.

⁽¹²⁾

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 4, was 51.40% for Q3 2016, 52.32% for Q2 2016, 55.82% for Q4 2015 and 52.78% for Q3 2015 . The adjusted efficiency ratios are non-GAAP measures that we believe would provide useful information to investors and users of our financial information.


⁽¹³⁾	Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.


⁽¹⁴⁾	Ratios as of the end of Q3 2016 are preliminary and therefore subject to change. See “Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for information on the calculation of each of these ratios.


⁽¹⁵⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See “Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information on non-GAAP measures.


^**	Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



	2016 Q3					2016 Q2					2015 Q3
	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	$	237,067	$	5,383	9.08%	$	231,496	$	5,148	8.90%	$	212,076	$	4,753	8.96%
Investment securities	66,291		386		2.33	65,754		405		2.46	63,541		386		2.43
Cash equivalents and other	7,629		25		1.31	5,514		18		1.31	7,465		25		1.34
Total interest-earning assets	$	310,987	$	5,794	7.45	$	302,764	$	5,571	7.36	$	283,082	$	5,164	7.30
Interest-bearing liabilities:
Interest-bearing deposits	$	196,913	$	306	0.62	$	195,641	$	292	0.60	$	185,800	$	271	0.58
Securitized debt obligations	17,389		56		1.29	15,226		47		1.23	14,881		39		1.05
Senior and subordinated notes	22,342		121		2.17	21,717		111		2.04	20,806		82		1.58
Other borrowings and liabilities	21,840		34		0.62	18,255		28		0.61	10,114		12		0.47
Total interest-bearing liabilities	$	258,484	$	517	0.80	$	250,839	$	478	0.76	$	231,601	$	404	0.70
Net interest income/spread			$	5,277	6.65			$	5,093	6.60			$	4,760	6.60
Impact of non-interest-bearing funding					0.14					0.13					0.13
Net interest margin					6.79%					6.73%					6.73%



	Nine Months Ended September 30,
	2016					2015
	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	$	232,064	$	15,616	8.97%	$	208,444	$	13,824	8.84%
Investment securities	65,735		1,206		2.45	63,500		1,174		2.47
Cash equivalents and other	6,624		60		1.21	7,444		77		1.38
Total interest-earning assets	$	304,423	$	16,882	7.39	$	279,388	$	15,075	7.19
Interest-bearing liabilities:
Interest-bearing deposits	$	195,565	$	881	0.60	$	184,258	$	814	0.59
Securitized debt obligations	15,997		151		1.26	13,233		108		1.09
Senior and subordinated notes	22,019		338		2.05	20,580		241		1.56
Other borrowings and liabilities	19,099		86		0.60	11,214		39		0.46
Total interest-bearing liabilities	$	252,680	$	1,456	0.77	$	229,285	$	1,202	0.70
Net interest income/spread			$	15,426	6.62			$	13,873	6.49
Impact of non-interest-bearing funding					0.14					0.13
Net interest margin					6.76%					6.62%

__________


⁽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



											2016 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions) (unaudited)	2016 Q3		2016 Q2		2016 Q1		2015 Q4		2015 Q3		2016 Q2		2015 Q3		2016		2015		2016 vs. 2015
Loans Held For Investment (Period-End)
Credit card:
Domestic credit card	$	90,955	$	88,581	$	84,561	$	87,939	$	82,178	3%		11%		$	90,955	$	82,178	11%
International credit card	8,246		8,323		8,138		8,186		7,957		(1	)	4		8,246		7,957		4
Total credit card	99,201		96,904		92,699		96,125		90,135		2		10		99,201		90,135		10
Consumer banking:
Auto	46,311		44,502		42,714		41,549		41,052		4		13		46,311		41,052		13
Home loan	22,448		23,358		24,343		25,227		26,340		(4	)	(15	)	22,448		26,340		(15	)
Retail banking	3,526		3,555		3,534		3,596		3,598		(1	)	(2	)	3,526		3,598		(2	)
Total consumer banking	72,285		71,415		70,591		70,372		70,990		1		2		72,285		70,990		2
Commercial banking:
Commercial and multifamily real estate	26,507		26,341		25,559		25,518		23,585		1		12		26,507		23,585		12
Commercial and industrial	39,432		39,313		38,102		37,135		27,873		—		41		39,432		27,873		41
Total commercial lending	65,939		65,654		63,661		62,653		51,458		—		28		65,939		51,458		28
Small-ticket commercial real estate	518		548		580		613		654		(5	)	(21	)	518		654		(21	)
Total commercial banking	66,457		66,202		64,241		63,266		52,112		—		28		66,457		52,112		28
Other loans	76		82		82		88		92		(7	)	(17	)	76		92		(17	)
Total loans held for investment	$	238,019	$	234,603	$	227,613	$	229,851	$	213,329	1		12		$	238,019	$	213,329	12
Loans Held For Investment (Average)
Credit card:
Domestic credit card	$	89,763	$	85,981	$	85,148	$	83,760	$	80,402	4%		12%		$	86,974	$	77,053	13%
International credit card	8,253		8,401		7,839		8,127		8,048		(2	)	3		8,165		7,946		3
Total credit card	98,016		94,382		92,987		91,887		88,450		4		11		95,139		84,999		12
Consumer banking:
Auto	45,355		43,605		41,962		41,333		40,560		4		12		43,647		39,505		10
Home loan	22,852		23,835		24,781		25,776		26,934		(4	)	(15	)	23,819		28,217		(16	)
Retail banking	3,520		3,548		3,553		3,595		3,603		(1	)	(2	)	3,540		3,578		(1	)
Total consumer banking	71,727		70,988		70,296		70,704		71,097		1		1		71,006		71,300		—
Commercial banking:
Commercial and multifamily real estate	26,154		25,661		25,015		25,613		23,305		2		12		25,612		23,092		11
Commercial and industrial	39,346		38,713		37,762		31,132		27,620		2		42		38,610		27,411		41
Total commercial lending	65,500		64,374		62,777		56,745		50,925		2		29		64,222		50,503		27
Small-ticket commercial real estate	534		564		598		634		667		(5	)	(20	)	565		712		(21	)
Total commercial banking	66,034		64,938		63,375		57,379		51,592		2		28		64,787		51,215		27
Other loans	66		71		78		82		88		(7	)	(25	)	72		94		(23	)
Total average loans held for investment	$	235,843	$	230,379	$	226,736	$	220,052	$	211,227	2		12		$	231,004	$	207,608	11



										2016 Q3 vs.				Nine Months Ended September 30,
(unaudited)	2016 Q3	2016 Q2		2016 Q1		2015 Q4		2015 Q3		2016 Q2		2015 Q3		2016		2015		2016 vs. 2015
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card	3.74%	4.07%		4.16%		3.75%		3.08%		(33	)bps	66	bps	3.99%		3.35%		64	bps
International credit card	3.18	3.54		3.24		2.76		1.80		(36	)	138		3.32		2.41		91
Total credit card	3.70	4.02		4.09		3.66		2.96		(32	)	74		3.93		3.26		67
Consumer banking:
Auto	1.85	1.20		1.60		2.10		1.85		65		—		1.55		1.54		1
Home loan	0.03	0.09		0.05		0.05		0.01		(6	)	2		0.05		0.03		2
Retail banking	1.75	1.26		1.36		1.43		1.53		49		22		1.46		1.30		16
Total consumer banking	1.26	0.83		1.04		1.32		1.14		43		12		1.04		0.93		11
Commercial banking:
Commercial and multifamily real estate	0.01	(0.02	)	(0.01	)	(0.03	)	(0.15	)	3		16		(0.01	)	(0.07	)	6
Commercial and industrial	1.09	0.62		0.49		0.07		0.61		47		48		0.74		0.26		48
Total commercial lending	0.66	0.37		0.29		0.02		0.26		29		40		0.44		0.11		33
Small-ticket commercial real estate	0.74	0.33		0.13		0.34		0.50		41		24		0.39		0.37		2
Total commercial banking	0.66	0.37		0.29		0.03		0.26		29		40		0.44		0.11		33
Total net charge-offs	2.10	2.01		2.08		1.96		1.69		9		41		2.06		1.68		38
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card	3.68%	3.14%		3.09%		3.39%		3.28%		54	bps	40	bps	3.68%		3.28%		40	bps
International credit card	3.33	3.24		3.32		2.98		2.81		9		52		3.33		2.81		52
Total credit card	3.65	3.15		3.11		3.36		3.24		50		41		3.65		3.24		41
Consumer banking:
Auto	5.67	5.59		5.14		6.69		6.10		8		(43	)	5.67		6.10		(43	)
Home loan	0.19	0.14		0.14		0.16		0.18		5		1		0.19		0.18		1
Retail banking	0.59	0.62		0.61		0.76		0.62		(3	)	(3	)	0.59		0.62		(3	)
Total consumer banking	3.72	3.56		3.19		4.05		3.62		16		10		3.72		3.62		10
Nonperforming Loans and Nonperforming Assets Rates⁽¹⁾⁽²⁾
Credit card:
International credit card	0.53%	0.53%		0.59%		0.65%		0.77%		—		(24	)bps	0.53%		0.77%		(24	)bps
Total credit card	0.04	0.05		0.05		0.06		0.07		(1	)bps	(3	)	0.04		0.07		(3	)
Consumer banking:
Auto	0.43	0.38		0.31		0.53		0.49		5		(6	)	0.43		0.49		(6	)
Home loan	1.23	1.24		1.26		1.23		1.18		(1	)	5		1.23		1.18		5
Retail banking	1.05	0.89		0.83		0.77		0.74		16		31		1.05		0.74		31
Total consumer banking	0.71	0.69		0.66		0.79		0.76		2		(5	)	0.71		0.76		(5	)
Commercial banking:
Commercial and multifamily real estate	0.08	0.10		0.12		0.03		0.03		(2	)	5		0.08		0.03		5
Commercial and industrial	2.44	2.58		2.66		1.45		1.58		(14	)	86		2.44		1.58		86
Total commercial lending	1.49	1.59		1.64		0.87		0.87		(10	)	62		1.49		0.87		62
Small-ticket commercial real estate	2.13	1.59		1.11		0.83		0.65		54		148		2.13		0.65		148
Total commercial banking	1.50	1.59		1.63		0.87		0.87		(9	)	63		1.50		0.87		63
Total nonperforming loans	0.66	0.68		0.69		0.51		0.50		(2	)	16		0.66		0.50		16
Total nonperforming assets	0.77	0.80		0.83		0.65		0.64		(3	)	13		0.77		0.64		13

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



	Three Months Ended September 30, 2016
	Credit Card									Consumer Banking
(Dollars in millions) (unaudited)	Domestic Card			International Card			Total Credit Card			Auto			Home Loan			Retail Banking			Total Consumer Banking			Commercial Banking			Other⁽³⁾			Total
Allowance for loan and lease losses:
Balance as of June 30, 2016	$	3,730		$	356		$	4,086		$	833		$	58		$	81		$	972		$	821		$	2		$	5,881
Provision (benefit) for loan and lease losses	1,190			82			1,272			239			5			14			258			96			(1		)	1,625
Charge-offs	(1,062		)	(109		)	(1,171		)	(300		)	(3		)	(20		)	(323		)	(112		)	—			(1,606		)
Recoveries	221			44			265			90			2			4			96			4			1			366
Net charge-offs	(841		)	(65		)	(906		)	(210		)	(1		)	(16		)	(227		)	(108		)	1			(1,240		)
Other changes⁽⁴⁾	—			(7		)	(7		)	—			—			—			—			(1		)	—			(8		)
Balance as of September 30, 2016	4,079			366			4,445			862			62			79			1,003			808			2			6,258
Reserve for unfunded lending commitments:
Balance as of June 30, 2016	—			—			—			—			—			8			8			161			—			169
Provision (benefit) for losses on unfunded lending commitments	—			—			—			—			—			(2		)	(2		)	(35		)	—			(37		)
Balance as of September 30, 2016	—			—			—			—			—			6			6			126			—			132
Combined allowance and reserve as of September 30, 2016	$	4,079		$	366		$	4,445		$	862		$	62		$	85		$	1,009		$	934		$	2		$	6,390



	Nine Months Ended September 30, 2016
	Credit Card									Consumer Banking
(Dollars in millions) (unaudited)	Domestic Card			International Card			Total Credit Card			Auto			Home Loan			Retail Banking			Total Consumer Banking			Commercial Banking			Other⁽³⁾			Total
Allowance for loan and lease losses:
Balance as of December 31, 2015	$	3,355		$	299		$	3,654		$	726		$	70		$	72		$	868		$	604		$	4		$	5,130
Provision (benefit) for loan and lease losses	3,326			278			3,604			644			1			46			691			452			(4		)	4,743
Charge-offs	(3,287		)	(321		)	(3,608		)	(796		)	(15		)	(51		)	(862		)	(224		)	(2		)	(4,696		)
Recoveries	685			118			803			288			6			12			306			10			4			1,123
Net charge-offs	(2,602		)	(203		)	(2,805		)	(508		)	(9		)	(39		)	(556		)	(214		)	2			(3,573		)
Other changes⁽⁴⁾	—			(8		)	(8		)	—			—			—			—			(34		)	—			(42		)
Balance as of September 30, 2016	4,079			366			4,445			862			62			79			1,003			808			2			6,258
Reserve for unfunded lending commitments:
Balance as of December 31, 2015	—			—			—			—			—			7			7			161			—			168
Provision (benefit) for losses on unfunded lending commitments	—			—			—			—			—			(1		)	(1		)	(35		)	—			(36		)
Balance as of September 30, 2016	—			—			—			—			—			6			6			126			—			132
Combined allowance and reserve as of September 30, 2016	$	4,079		$	366		$	4,445		$	862		$	62		$	85		$	1,009		$	934		$	2		$	6,390

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results



	Three Months Ended September 30, 2016											Nine Months Ended September 30, 2016
(Dollars in millions) (unaudited)	Credit Card		Consumer Banking		Commercial Banking		Other			Total		Credit Card		Consumer Banking		Commercial Banking		Other			Total
Net interest income	$	3,204	$	1,472	$	555	$	46		$	5,277	$	9,282	$	4,331	$	1,651	$	162		$	15,426
Non-interest income	825		201		156		2			1,184		2,531		567		403		8			3,509
Total net revenue⁽⁵⁾	4,029		1,673		711		48			6,461		11,813		4,898		2,054		170			18,935
Provision (benefit) for credit losses	1,272		256		61		(1		)	1,588		3,604		690		417		(4		)	4,707
Non-interest expense	1,884		1,034		349		94			3,361		5,630		3,030		1,014		205			9,879
Income (loss) from continuing operations before income taxes	873		383		301		(45		)	1,512		2,579		1,178		623		(31		)	4,349
Income tax provision (benefit)	318		139		110		(71		)	496		931		428		227		(214		)	1,372
Income (loss) from continuing operations, net of tax	$	555	$	244	$	191	$	26		$	1,016	$	1,648	$	750	$	396	$	183		$	2,977

	Three Months Ended June 30, 2016
(Dollars in millions) (unaudited)	Credit Card		Consumer Banking		Commercial Banking		Other			Total
Net interest income	$	3,045	$	1,439	$	559	$	50		$	5,093
Non-interest income	859		175		129		(2		)	1,161
Total net revenue⁽⁵⁾	3,904		1,614		688		48			6,254
Provision (benefit) for credit losses	1,261		204		128		(1		)	1,592
Non-interest expense	1,883		1,006		343		63			3,295
Income (loss) from continuing operations before income taxes	760		404		217		(14		)	1,367
Income tax provision (benefit)	276		147		79		(78		)	424
Income (loss) from continuing operations, net of tax	$	484	$	257	$	138	$	64		$	943

	Three Months Ended September 30, 2015											Nine Months Ended September 30, 2015
(Dollars in millions) (unaudited)	Credit Card		Consumer Banking		Commercial Banking		Other			Total		Credit Card		Consumer Banking		Commercial Banking		Other			Total
Net interest income	$	2,866	$	1,443	$	454	$	(3	)	$	4,760	$	8,165	$	4,321	$	1,381	$	6		$	13,873
Non-interest income	858		174		108		—			1,140		2,519		528		345		(46		)	3,346
Total net revenue⁽⁵⁾	3,724		1,617		562		(3		)	5,900		10,684		4,849		1,726		(40		)	17,219
Provision (benefit) for credit losses	831		188		75		(2		)	1,092		2,395		579		184		(2		)	3,156
Non-interest expense	1,848		1,001		272		39			3,160		5,481		2,969		814		252			9,516
Income (loss) from continuing operations before income taxes	1,045		428		215		(40		)	1,648		2,808		1,301		728		(290		)	4,547
Income tax provision (benefit)	375		155		78		(78		)	530		1,007		471		264		(299		)	1,443
Income (loss) from continuing operations, net of tax	$	670	$	273	$	137	$	38		$	1,118	$	1,801	$	830	$	464	$	9		$	3,104

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business



											2016 Q3 vs.				Nine Months Ended September 30,
	2016		2016		2016		2015		2015		2016		2015						2016 vs.
(Dollars in millions) (unaudited)	Q3		Q2		Q1		Q4		Q3		Q2		Q3		2016		2015		2015
Credit Card⁽⁶⁾
Earnings:
Net interest income	$	3,204	$	3,045	$	3,033	$	2,996	$	2,866	5%		12%		$	9,282	$	8,165	14%
Non-interest income	825		859		847		902		858		(4	)	(4	)	2,531		2,519		—
Total net revenue	4,029		3,904		3,880		3,898		3,724		3		8		11,813		10,684		11
Provision (benefit) for credit losses	1,272		1,261		1,071		1,022		831		1		53		3,604		2,395		50
Non-interest expense	1,884		1,883		1,863		2,021		1,848		—		2		5,630		5,481		3
Income (loss) from continuing operations before income taxes	873		760		946		855		1,045		15		(16	)	2,579		2,808		(8	)
Income tax provision (benefit)	318		276		337		302		375		15		(15	)	931		1,007		(8	)
Income (loss) from continuing operations, net of tax	$	555	$	484	$	609	$	553	$	670	15		(17	)	$	1,648	$	1,801	(8	)
Selected performance metrics:
Period-end loans held for investment	$	99,201	$	96,904	$	92,699	$	96,125	$	90,135	2		10		$	99,201	$	90,135	10
Average loans held for investment	98,016		94,382		92,987		91,887		88,450		4		11		95,139		84,999		12
Average yield on loans held for investment⁽⁷⁾	14.68%		14.49%		14.60%		14.45%		14.39%		19	bps	29	bps	14.59%		14.22%		37	bps
Total net revenue margin⁽⁸⁾	16.44		16.55		16.69		16.97		16.84		(11	)	(40	)	16.56		16.76		(20	)
Net charge-off rate	3.70		4.02		4.09		3.66		2.96		(32	)	74		3.93		3.26		67
30+ day performing delinquency rate	3.65		3.15		3.11		3.36		3.24		50		41		3.65		3.24		41
30+ day delinquency rate	3.69		3.18		3.15		3.40		3.29		51		40		3.69		3.29		40
Nonperforming loan rate⁽¹⁾	0.04		0.05		0.05		0.06		0.07		(1	)	(3	)	0.04		0.07		(3	)
PCCR intangible amortization	$	62	$	67	$	70	$	74	$	78	(7)%		(21)%		$	199	$	242	(18)%
Purchase volume⁽⁹⁾	78,106		78,019		68,189		75,350		69,875		—		12		224,314		195,817		15



																2016 Q3 vs.				Nine Months Ended September 30,
	2016			2016			2016			2015			2015			2016		2015								2016 vs.
(Dollars in millions) (unaudited)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2016			2015			2015
Domestic Card
Earnings:
Net interest income	$	2,956		$	2,769		$	2,756		$	2,718		$	2,613		7%		13%		$	8,481		$	7,429		14%
Non-interest income	759			792			774			830			814			(4	)	(7	)	2,325			2,353			(1	)
Total net revenue	3,715			3,561			3,530			3,548			3,427			4		8		10,806			9,782			10
Provision (benefit) for credit losses	1,190			1,164			972			945			796			2		49		3,326			2,259			47
Non-interest expense	1,696			1,669			1,671			1,796			1,630			2		4		5,036			4,831			4
Income (loss) from continuing operations before income taxes	829			728			887			807			1,001			14		(17	)	2,444			2,692			(9	)
Income tax provision (benefit)	302			265			323			293			362			14		(17	)	890			974			(9	)
Income (loss) from continuing operations, net of tax	$	527		$	463		$	564		$	514		$	639		14		(18	)	$	1,554		$	1,718		(10	)
Selected performance metrics:
Period-end loans held for investment	$	90,955		$	88,581		$	84,561		$	87,939		$	82,178		3		11		$	90,955		$	82,178		11
Average loans held for investment	89,763			85,981			85,148			83,760			80,402			4		12		86,974			77,053			13
Average yield on loans held for investment⁽⁷⁾	14.71%			14.40%			14.43%			14.31%			14.35%			31	bps	36	bps	14.51%			14.17%			34	bps
Total net revenue margin⁽⁸⁾	16.55			16.57			16.58			16.95			17.05			(2	)	(50	)	16.57			16.93			(36	)
Net charge-off rate	3.74			4.07			4.16			3.75			3.08			(33	)	66		3.99			3.35			64
30+ day delinquency rate	3.68			3.14			3.09			3.39			3.28			54		40		3.68			3.28			40
Purchase volume⁽⁹⁾	$	71,331		$	71,050		$	62,617		$	68,740		$	63,777		—		12%		$	204,998		$	178,000		15%
Refreshed FICO scores:⁽¹⁰⁾
Greater than 660	64		%	65		%	65		%	66		%	66		%	(1)%		(2	)	64		%	66		%	(2	)
660 or below	36			35			35			34			34			1		2		36			34			2
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%



												2016 Q3 vs.				Nine Months Ended September 30,
	2016		2016			2016		2015		2015		2016		2015						2016 vs.
(Dollars in millions) (unaudited)	Q3		Q2			Q1		Q4		Q3		Q2		Q3		2016		2015		2015
International Card⁽⁶⁾
Earnings:
Net interest income	$	248	$	276		$	277	$	278	$	253	(10)%		(2)%		$	801	$	736	9%
Non-interest income	66		67			73		72		44		(1	)	50		206		166		24
Total net revenue	314		343			350		350		297		(8	)	6		1,007		902		12
Provision (benefit) for credit losses	82		97			99		77		35		(15	)	134		278		136		104
Non-interest expense	188		214			192		225		218		(12	)	(14	)	594		650		(9	)
Income (loss) from continuing operations before income taxes	44		32			59		48		44		38		—		135		116		16
Income tax provision (benefit)	16		11			14		9		13		45		23		41		33		24
Income (loss) from continuing operations, net of tax	$	28	$	21		$	45	$	39	$	31	33		(10	)	$	94	$	83	13
Selected performance metrics:
Period-end loans held for investment	$	8,246	$	8,323		$	8,138	$	8,186	$	7,957	(1	)	4		$	8,246	$	7,957	4
Average loans held for investment	8,253		8,401			7,839		8,127		8,048		(2	)	3		8,165		7,946		3
Average yield on loans held for investment⁽⁷⁾	14.36%		15.45		%	16.47%		15.96%		14.88%		(109	)bps	(52	)bps	15.41%		14.70%		71	bps
Total net revenue margin⁽⁸⁾	15.24		16.32			17.85		17.21		14.77		(108	)	47		16.45		15.14		131
Net charge-off rate	3.18		3.54			3.24		2.76		1.80		(36	)	138		3.32		2.41		91
30+ day performing delinquency rate	3.33		3.24			3.32		2.98		2.81		9		52		3.33		2.81		52
30+ day delinquency rate	3.74		3.65			3.76		3.46		3.39		9		35		3.74		3.39		35
Nonperforming loan rate⁽¹⁾	0.53		0.53			0.59		0.65		0.77		—		(24	)	0.53		0.77		(24	)
Purchase volume⁽⁹⁾	$	6,775	$	6,969		$	5,572	$	6,610	$	6,098	(3)%		11%		$	19,316	$	17,817	8%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business



																2016 Q3 vs.				Nine Months Ended September 30,
	2016			2016			2016			2015			2015			2016		2015								2016 vs.
(Dollars in millions) (unaudited)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2016			2015			2015
Consumer Banking
Earnings:
Net interest income	$	1,472		$	1,439		$	1,420		$	1,434		$	1,443		2%		2%		$	4,331		$	4,321		—
Non-interest income	201			175			191			182			174			15		16		567			528			7%
Total net revenue	1,673			1,614			1,611			1,616			1,617			4		3		4,898			4,849			1
Provision (benefit) for credit losses	256			204			230			240			188			25		36		690			579			19
Non-interest expense	1,034			1,006			990			1,057			1,001			3		3		3,030			2,969			2
Income (loss) from continuing operations before income taxes	383			404			391			319			428			(5	)	(11	)	1,178			1,301			(9	)
Income tax provision (benefit)	139			147			142			115			155			(5	)	(10	)	428			471			(9	)
Income (loss) from continuing operations, net of tax	$	244		$	257		$	249		$	204		$	273		(5	)	(11	)	$	750		$	830		(10	)
Selected performance metrics:
Period-end loans held for investment	$	72,285		$	71,415		$	70,591		$	70,372		$	70,990		1		2		$	72,285		$	70,990		2
Average loans held for investment	71,727			70,988			70,296			70,704			71,097			1		1		71,006			71,300			—
Average yield on loans held for investment⁽⁷⁾	6.41%			6.28%			6.18%			6.25%			6.25%			13	bps	16	bps	6.29%			6.26%			3	bps
Auto loan originations	$	6,804		$	6,529		$	5,844		$	4,977		$	5,590		4%		22%		$	19,177		$	16,208		18%
Period-end deposits	178,793			176,340			177,803			172,702			170,866			1		5		178,793			170,866			5
Average deposits	177,402			176,808			174,254			171,521			170,816			—		4		176,159			170,500			3
Average deposit interest rate	0.56%			0.55%			0.54%			0.54%			0.56%			1	bps	—		0.55%			0.57%			(2	)bps
Net charge-off rate	1.26			0.83			1.04			1.32			1.14			43		12	bps	1.04			0.93			11
30+ day performing delinquency rate	3.72			3.56			3.19			4.05			3.62			16		10		3.72			3.62			10
30+ day delinquency rate	4.26			4.07			3.67			4.67			4.22			19		4		4.26			4.22			4
Nonperforming loan rate⁽¹⁾	0.71			0.69			0.66			0.79			0.76			2		(5	)	0.71			0.76			(5	)
Nonperforming asset rate⁽²⁾	0.98			0.96			0.95			1.10			1.05			2		(7	)	0.98			1.05			(7	)
Auto—At origination FICO scores:⁽¹¹⁾
Greater than 660	51		%	51		%	51		%	51		%	50		%	—		1%		51		%	50		%	1%
621 - 660	17			17			17			17			17			—		—		17			17			—
620 or below	32			32			32			32			33			—		(1	)	32			33			(1	)
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business



																2016 Q3 vs.				Nine Months Ended September 30,
	2016			2016			2016			2015			2015			2016		2015								2016 vs.
(Dollars in millions) (unaudited)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2016			2015			2015
Commercial Banking
Earnings:
Net interest income	$	555		$	559		$	537		$	484		$	454		(1)%		22%		$	1,651		$	1,381		20%
Non-interest income	156			129			118			142			108			21		44		403			345			17
Total net revenue⁽⁵⁾	711			688			655			626			562			3		27		2,054			1,726			19
Provision (benefit) for credit losses	61			128			228			118			75			(52	)	(19	)	417			184			127
Non-interest expense	349			343			322			342			272			2		28		1,014			814			25
Income (loss) from continuing operations before income taxes	301			217			105			166			215			39		40		623			728			(14	)
Income tax provision (benefit)	110			79			38			60			78			39		41		227			264			(14	)
Income (loss) from continuing operations, net of tax	$	191		$	138		$	67		$	106		$	137		38		39		$	396		$	464		(15	)
Selected performance metrics:
Period-end loans held for investment	$	66,457		$	66,202		$	64,241		$	63,266		$	52,112		—		28		$	66,457		$	52,112		28
Average loans held for investment	66,034			64,938			63,375			57,379			51,592			2%		28		64,787			51,215			27
Average yield on loans held for investment⁽⁵⁾⁽⁷⁾	3.50%			3.45%			3.38%			3.18%			3.21%			5	bps	29	bps	3.45%			3.23%			22	bps
Period-end deposits	$	33,611		$	34,281		$	33,383		$	34,257		$	32,751		(2)%		3%		$	33,611		$	32,751		3%
Average deposits	33,498			33,764			34,076			33,797			32,806			(1	)	2		33,778			32,809			3
Average deposit interest rate	0.30%			0.27%			0.27%			0.26%			0.25%			3	bps	5	bps	0.28%			0.25%			3	bps
Net charge-off rate	0.66			0.37			0.29			0.03			0.26			29		40		0.44			0.11			33
Nonperforming loan rate^(1)(12)	1.50			1.59			1.63			0.87			0.87			(9	)	63		1.50			0.87			63
Nonperforming asset rate^(2)(12)	1.51			1.60			1.64			0.87			0.87			(9	)	64		1.51			0.87			64
Risk category:^(12)(13)
Noncriticized	$	62,336		$	61,926		$	59,663		$	59,743		$	49,803		1%		25%		$	62,336		$	49,803		25%
Criticized performing	2,473			2,456			2,595			2,015			1,725			1		43		2,473			1,725			43
Criticized nonperforming	994			1,050			1,050			550			453			(5	)	119		994			453			119
PCI loans⁽¹²⁾	654			770			933			958			131			(15	)	**		654			131			**
Total commercial loans	$	66,457		$	66,202		$	64,241		$	63,266		$	52,112		—		28		$	66,457		$	52,112		28
Risk category as a percentage of period-end loans held for investment:^(12)(13)
Noncriticized	93.8%			93.5%			92.9%			94.4%			95.6%			30	bps	(180	)bps	93.8%			95.6%			(180	)bps
Criticized performing	3.7			3.7			4.0			3.2			3.3			—		40		3.7			3.3			40
Criticized nonperforming	1.5			1.6			1.6			0.9			0.9			(10	)	60		1.5			0.9			60
PCI loans⁽¹²⁾	1.0			1.2			1.5			1.5			0.2			(20	)	80		1.0			0.2			80
Total commercial loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%					100.0		%	100.0		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total



																2016 Q3 vs.				Nine Months Ended September 30,
	2016			2016			2016			2015			2015			2016		2015								2016 vs.
(Dollars in millions) (unaudited)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2016			2015			2015
Other
Earnings:
Net interest income (expense)	$	46		$	50		$	66		$	47		$	(3	)	(8)%		**		$	162		$	6		**
Non-interest income	2			(2		)	8			7			—			**		**		8			(46		)	**
Total net revenue (loss)⁽⁵⁾	48			48			74			54			(3		)	—		**		170			(40		)	**
Provision (benefit) for credit losses	(1		)	(1		)	(2		)	—			(2		)	—		(50)%		(4		)	(2		)	100%
Non-interest expense	94			63			48			60			39			49		141		205			252			(19	)
Income (loss) from continuing operations before income taxes	(45		)	(14		)	28			(6		)	(40		)	**		13		(31		)	(290		)	(89	)
Income tax provision (benefit)	(71		)	(78		)	(65		)	(51		)	(78		)	(9	)	(9	)	(214		)	(299		)	(28	)
Income (loss) from continuing operations, net of tax	$	26		$	64		$	93		$	45		$	38		(59	)	(32	)	$	183		$	9		**
Selected performance metrics:
Period-end loans held for investment	$	76		$	82		$	82		$	88		$	92		(7	)	(17	)	$	76		$	92		(17)%
Average loans held for investment	66			71			78			82			88			(7	)	(25	)	72			94			(23	)
Period-end deposits	13,577			10,438			10,593			10,762			9,286			30		46		13,577			9,286			46
Average deposits	11,351			10,574			10,850			10,581			7,352			7		54		10,927			6,025			81
Total
Earnings:
Net interest income	$	5,277		$	5,093		$	5,056		$	4,961		$	4,760		4%		11%		$	15,426		$	13,873		11%
Non-interest income	1,184			1,161			1,164			1,233			1,140			2		4		3,509			3,346			5
Total net revenue	6,461			6,254			6,220			6,194			5,900			3		10		18,935			17,219			10
Provision (benefit) for credit losses	1,588			1,592			1,527			1,380			1,092			—		45		4,707			3,156			49
Non-interest expense	3,361			3,295			3,223			3,480			3,160			2		6		9,879			9,516			4
Income (loss) from continuing operations before income taxes	1,512			1,367			1,470			1,334			1,648			11		(8	)	4,349			4,547			(4	)
Income tax provision (benefit)	496			424			452			426			530			17		(6	)	1,372			1,443			(5	)
Income (loss) from continuing operations, net of tax	$	1,016		$	943		$	1,018		$	908		$	1,118		8		(9	)	$	2,977		$	3,104		(4	)
Selected performance metrics:
Period-end loans held for investment	$	238,019		$	234,603		$	227,613		$	229,851		$	213,329		1		12		$	238,019		$	213,329		12
Average loans held for investment	235,843			230,379			226,736			220,052			211,227			2		12		231,004			207,608			11
Period-end deposits	225,981			221,059			221,779			217,721			212,903			2		6		225,981			212,903			6
Average deposits	222,251			221,146			219,180			215,899			210,974			—		5		220,864			209,334			6

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)


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

⁽²⁾

Nonperforming assets consist of nonperforming loans, real estate owned (“REO”) and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, REO and other foreclosed assets. Calculation of nonperforming asset rates for our Consumer Banking and Commercial Banking businesses do not include the impact of acquired REOs.


⁽³⁾	Primarily consists of the legacy loan portfolio of our discontinued GreenPoint mortgage operations.


⁽⁴⁾	Represents foreign currency translation adjustments and the net impact of loan transfers and sales.

⁽⁵⁾

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 to the Other category.


⁽⁶⁾	Includes a build in our U.K. PPI Reserve in Q3 2016, Q2 2016 and Q3 2015, which impacted both total net revenue and non-interest expense within our International Card business.


⁽⁷⁾	Calculated based on annualized interest income for the period divided by average loans held for investment during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and does not include any allocations, such as funds transfer pricing.


⁽⁸⁾	Calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the respective loan category.


⁽⁹⁾	Includes purchase transactions, net of returns, for the period for loans both classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.

⁽¹⁰⁾

Percentages represent period-end loans held for investment in each credit score category. Credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.


⁽¹¹⁾	Percentages represent period-end loans held for investment in each credit score category. Credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.

⁽¹²⁾

The loans held for investment acquired in the HFS acquisition included $556 million, $667 million, $825 million and $835 million of PCI loans as of September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, respectively, that are being accounted for under ASC 310-30 (formerly “SOP 03-3”) due to their deterioration in credit quality since origination. 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. The table below presents our nonperforming loan rate, nonperforming asset rate and risk category information as if these PCI loans were classified based on their risk ratings in each of the periods impacted by the HFS acquisition.



	2016		2016		2016		2015
(Dollars in millions) (unaudited)	Q3		Q2		Q1		Q4
Selected performance metrics:
Nonperforming loan rate	1.53%		1.63%		1.69%		0.93%
Nonperforming asset rate	1.54		1.64		1.70		0.93
Risk category:
Noncriticized	$	62,575	$	62,058	$	59,729	$	59,743
Criticized performing	2,766		2,961		3,321		2,814
Criticized nonperforming	1,018		1,080		1,083		586
Risk category as a percentage of period-end loans held for investment:
Noncriticized	94.2%		93.7%		93.0%		94.4%
Criticized performing	4.2		4.5		5.2		4.5
Criticized nonperforming	1.5		1.6		1.7		0.9


⁽¹³⁾	Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.


^**	Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures⁽¹⁾



	Basel III Standardized Approach
(Dollars in millions) (unaudited)	September 30, 2016			June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015
Regulatory Capital Metrics
Common equity Tier 1 capital	$	29,192		$	29,486	$	29,231	$	29,544	$	30,109
Tier 1 capital	33,069			32,780		32,525		32,838		33,402
Total capital⁽²⁾	40,565			38,767		38,399		38,838		37,694
Risk-weighted assets	275,102			269,667		262,368		265,739		249,081
Adjusted average assets⁽³⁾	328,628			319,968		317,403		309,037		300,010
Capital Ratios
Common equity Tier 1 capital⁽⁴⁾	10.6		%	10.9%		11.1%		11.1%		12.1%
Tier 1 capital⁽⁵⁾	12.0			12.2		12.4		12.4		13.4
Total capital⁽⁶⁾	14.7			14.4		14.6		14.6		15.1
Tier 1 leverage⁽³⁾	10.1			10.2		10.2		10.6		11.1
Tangible common equity (“TCE”)⁽⁷⁾	8.8			9.0		9.1		8.9		9.8

Reconciliation of Non-GAAP Measures

We report certain non-GAAP measures that management uses in assessing its capital adequacy and the level of return generated. These non-GAAP measures consist of tangible common equity (“TCE”), tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. These metrics are considered key financial performance measures for the Company. The tables below provide the details of the calculation of our non-GAAP measures and regulatory capital. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.



	2016			2016			2016			2015			2015
(Dollars in millions) (unaudited)	Q3			Q2			Q1			Q4			Q3
Tangible Common Equity (Period-End)
Stockholders’ equity	$	48,213		$	48,108		$	47,707		$	47,284		$	47,685
Goodwill and intangible assets⁽⁸⁾	(15,475		)	(15,553		)	(15,629		)	(15,701		)	(15,153		)
Noncumulative perpetual preferred stock⁽⁹⁾	(3,877		)	(3,294		)	(3,296		)	(3,294		)	(3,294		)
Tangible common equity	$	28,861		$	29,261		$	28,782		$	28,289		$	29,238
Tangible Common Equity (Average)
Average stockholders’ equity	$	49,033		$	48,934		$	49,078		$	48,712		$	48,456
Average goodwill and intangible assets⁽⁸⁾	(15,507		)	(15,585		)	(15,654		)	(15,316		)	(15,183		)
Average noncumulative perpetual preferred stock⁽⁹⁾	(3,719		)	(3,294		)	(3,296		)	(3,294		)	(3,049		)
Average tangible common equity	$	29,807		$	30,055		$	30,128		$	30,102		$	30,224



	2016			2016			2016			2015			2015
(Dollars in millions) (unaudited)	Q3			Q2			Q1			Q4			Q3
Tangible Assets (Period-End)
Total assets	$	345,061		$	339,117		$	330,346		$	334,048		$	313,700
Goodwill and intangible assets⁽⁸⁾	(15,475		)	(15,553		)	(15,629		)	(15,701		)	(15,153		)
Tangible assets	$	329,586		$	323,564		$	314,717		$	318,347		$	298,547
Tangible Assets (Average)
Average total assets	$	343,153		$	334,479		$	331,919		$	323,354		$	313,822
Average goodwill and intangible assets⁽⁸⁾	(15,507		)	(15,585		)	(15,654		)	(15,316		)	(15,183		)
Average tangible assets	$	327,646		$	318,894		$	316,265		$	308,038		$	298,639

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach



(Dollars in millions) (unaudited)	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
Common equity excluding AOCI	$	44,214		$	44,572		$	44,452		$	44,606		$	44,533
Adjustments:
AOCI^(10)(11)	199			332			117			(254		)	75
Goodwill⁽⁸⁾	(14,288		)	(14,296		)	(14,301		)	(14,296		)	(13,805		)
Intangible assets^(8)(11)	(435		)	(483		)	(532		)	(393		)	(374		)
Other	(498		)	(639		)	(505		)	(119		)	(320		)
Common equity Tier 1 capital	$	29,192		$	29,486		$	29,231		$	29,544		$	30,109
Risk-weighted assets	$	275,102		$	269,667		$	262,368		$	265,739		$	249,081
Common equity Tier 1 capital ratio⁽⁴⁾	10.6%			10.9%			11.1%			11.1%			12.1%

__________


⁽¹⁾	Regulatory capital metrics and capital ratios as of September 30, 2016 are preliminary and therefore subject to change.


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


⁽³⁾	Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.


⁽⁴⁾	Common equity Tier 1 capital ratio is a regulatory capital 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⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.


⁽⁸⁾	Includes impact of related deferred taxes.


⁽⁹⁾	Includes related surplus.


⁽¹⁰⁾	Amounts presented are net of tax.


⁽¹¹⁾	Amounts based on transition provisions for regulatory capital deductions and adjustments of 40% for 2015 and 60% for 2016.

CAPITAL ONE FINANCIAL CORP - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - October 25, 2016

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