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EX-99.1 - EXHIBIT 99.1 - CAPITAL ONE FINANCIAL CORPq42016earningsrelease-ex991.htm
8-K - 8-K - CAPITAL ONE FINANCIAL CORPq42016earningsrelease8-k.htm


Exhibit 99.2

Capital One Financial Corporation
Financial Supplement
Fourth Quarter 2016(1)(2) 
Table of Contents

Capital One Financial Corporation Consolidated Results
Page
 
Table 1:
Financial Summary—Consolidated
 
Table 2:
Selected Metrics—Consolidated
 
Table 3:
Consolidated Statements of Income
 
Table 4:
Consolidated Balance Sheets
 
Table 5:
Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)
 
Table 6:
Average Balances, Net Interest Income and Net Interest Margin
 
Table 7:
Loan Information and Performance Statistics
 
Table 8:
Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity
Business Segment Results
 
 
Table 9:
Financial Summary—Business Segment Results
 
Table 10:
Financial & Statistical Summary—Credit Card Business
 
Table 11:
Financial & Statistical Summary—Consumer Banking Business
 
Table 12:
Financial & Statistical Summary—Commercial Banking Business
 
Table 13:
Financial & Statistical Summary—Other and Total
 
Table 14:
Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)
Other
 
 
Table 15:
Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures
__________
(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, 2016 once it is filed with the Securities and Exchange Commission.
(2) 
This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with accounting principles generally accepted in the U.S. (“GAAP”), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary—Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
(Dollars in millions, except per share data and as noted)
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
 

 

 
2016 vs.
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
5,447

 
$
5,277

 
$
5,093

 
$
5,056

 
$
4,961

 
3%

 
10%

 
$
20,873

 
$
18,834

 
11%

Non-interest income
 
1,119

 
1,184

 
1,161

 
1,164

 
1,233

 
(5
)
 
(9
)
 
4,628

 
4,579

 
1

Total net revenue(1)
 
6,566

 
6,461

 
6,254

 
6,220

 
6,194

 
2

 
6

 
25,501

 
23,413

 
9

Provision for credit losses
 
1,752

 
1,588

 
1,592

 
1,527

 
1,380

 
10

 
27

 
6,459

 
4,536

 
42

Non-interest expense:
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 

Marketing
 
575

 
393

 
415

 
428

 
564

 
46

 
2

 
1,811

 
1,744

 
4

Amortization of intangibles
 
101

 
89

 
95

 
101

 
103

 
13

 
(2
)
 
386

 
430

 
(10
)
Operating expenses
 
3,003

 
2,879

 
2,785

 
2,694

 
2,813

 
4

 
7

 
11,361

 
10,822

 
5

Total non-interest expense
 
3,679

 
3,361

 
3,295

 
3,223

 
3,480

 
9

 
6

 
13,558

 
12,996

 
4

Income from continuing operations before income taxes
 
1,135

 
1,512

 
1,367

 
1,470

 
1,334

 
(25
)
 
(15
)
 
5,484

 
5,881

 
(7
)
Income tax provision
 
342

 
496

 
424

 
452

 
426

 
(31
)
 
(20
)
 
1,714

 
1,869

 
(8
)
Income from continuing operations, net of tax
 
793

 
1,016

 
943

 
1,018

 
908

 
(22
)
 
(13
)
 
3,770

 
4,012

 
(6
)
Income (loss) from discontinued operations, net of tax(2)
 
(2
)
 
(11
)
 
(1
)
 
(5
)
 
12

 
(82
)
 
**

 
(19
)
 
38

 
**

Net income
 
791

 
1,005

 
942

 
1,013

 
920

 
(21
)
 
(14
)
 
3,751

 
4,050

 
(7
)
Dividends and undistributed earnings allocated to participating securities(3)
 
(6
)
 
(6
)
 
(6
)
 
(6
)
 
(4
)
 

 
50

 
(24
)
 
(20
)
 
20

Preferred stock dividends
 
(75
)
 
(37
)
 
(65
)
 
(37
)
 
(68
)
 
103

 
10

 
(214
)
 
(158
)
 
35

Net income available to common stockholders
 
$
710

 
$
962

 
$
871

 
$
970

 
$
848

 
(26
)
 
(16
)
 
$
3,513

 
$
3,872

 
(9
)
Common Share Statistics
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 

Basic earnings per common share:(3)
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 

Net income from continuing operations
 
$
1.47

 
$
1.94

 
$
1.70

 
$
1.86

 
$
1.58

 
(24)%

 
(7)%

 
$
7.00

 
$
7.08

 
(1)%

Income (loss) from discontinued operations
 

 
(0.02
)
 

 
(0.01
)
 
0.02

 
**

 
**

 
(0.04
)
 
0.07

 
**

Net income per basic common share
 
$
1.47

 
$
1.92

 
$
1.70

 
$
1.85

 
$
1.60

 
(23
)
 
(8
)
 
$
6.96

 
$
7.15

 
(3
)
Diluted earnings per common share:(3)
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 

Net income from continuing operations
 
$
1.45

 
$
1.92

 
$
1.69

 
$
1.85

 
$
1.56

 
(24
)
 
(7
)
 
$
6.93

 
$
7.00

 
(1
)
Income (loss) from discontinued operations
 

 
(0.02
)
 

 
(0.01
)
 
0.02

 
**

 
**

 
(0.04
)
 
0.07

 
**

Net income per diluted common share
 
$
1.45

 
$
1.90

 
$
1.69

 
$
1.84

 
$
1.58

 
(24
)
 
(8
)
 
$
6.89

 
$
7.07

 
(3
)
Weighted-average common shares outstanding (in millions):
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 

Basic
 
483.5

 
501.1

 
511.7

 
523.5

 
530.8

 
(4
)
 
(9
)
 
504.9

 
541.8

 
(7
)
Diluted
 
489.2

 
505.9

 
516.5

 
528.0

 
536.3

 
(3
)
 
(9
)
 
509.8

 
548.0

 
(7
)
Common shares outstanding (period-end, in millions)
 
480.2

 
489.2

 
505.9

 
514.5

 
527.3

 
(2
)
 
(9
)
 
480.2

 
527.3

 
(9
)
Dividends paid per common share
 
$
0.40

 
$
0.40

 
$
0.40

 
$
0.40

 
$
0.40

 

 

 
$
1.60

 
$
1.50

 
7

Tangible book value per common share (period-end)(4)
 
57.76

 
59.00

 
57.84

 
55.94

 
53.65

 
(2
)
 
8

 
57.76

 
53.65

 
8


1


 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
(Dollars in millions)
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Balance Sheet (Period-End)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for investment(5)
 
$
245,586

 
$
238,019

 
$
234,603

 
$
227,613

 
$
229,851

 
3%

 
7%

 
$
245,586

 
$
229,851

 
7%

Interest-earning assets
 
321,807

 
313,431

 
307,163

 
298,348

 
302,007

 
3

 
7

 
321,807

 
302,007

 
7

Total assets
 
357,033

 
345,061

 
339,117

 
330,346

 
334,048

 
3

 
7

 
357,033

 
334,048

 
7

Interest-bearing deposits
 
211,266

 
200,416

 
195,635

 
196,597

 
191,874

 
5

 
10

 
211,266

 
191,874

 
10

Total deposits
 
236,768

 
225,981

 
221,059

 
221,779

 
217,721

 
5

 
9

 
236,768

 
217,721

 
9

Borrowings
 
60,460

 
59,820

 
59,181

 
50,497

 
59,115

 
1

 
2

 
60,460

 
59,115

 
2

Common equity
 
43,154

 
44,336

 
44,813

 
44,411

 
43,990

 
(3
)
 
(2
)
 
43,154

 
43,990

 
(2
)
Total stockholders’ equity
 
47,514

 
48,213

 
48,108

 
47,707

 
47,284

 
(1
)
 

 
47,514

 
47,284

 

Balance Sheet (Average Balances)
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 

Loans held for investment(5)
 
$
240,027

 
$
235,843

 
$
230,379

 
$
226,736

 
$
220,052

 
2%

 
9%

 
$
233,272

 
$
210,745

 
11%

Interest-earning assets
 
317,853

 
310,987

 
302,764

 
299,456

 
292,054

 
2

 
9

 
307,796

 
282,581

 
9

Total assets
 
350,225

 
343,153

 
334,479

 
331,919

 
323,354

 
2

 
8

 
339,974

 
313,474

 
8

Interest-bearing deposits
 
206,464

 
196,913

 
195,641

 
194,125

 
189,885

 
5

 
9

 
198,304

 
185,677

 
7

Total deposits
 
232,204

 
222,251

 
221,146

 
219,180

 
215,899

 
4

 
8

 
223,714

 
210,989

 
6

Borrowings
 
58,624

 
60,708

 
54,359

 
53,761

 
48,850

 
(3
)
 
20

 
56,878

 
45,420

 
25

Common equity
 
43,921

 
45,314

 
45,640

 
45,782

 
45,418

 
(3
)
 
(3
)
 
45,162

 
45,072

 

Total stockholders’ equity
 
47,972

 
49,033

 
48,934

 
49,078

 
48,712

 
(2
)
 
(2
)
 
48,753

 
47,713

 
2

    

2



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
(Dollars in millions except as noted)
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Performance Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income growth (period over period)
 
3%

 
4%

 
1%

 
2%

 
4%

 
**


**

 
11%

 
6%

 
**

Non-interest income growth (period over period)
 
(5
)
 
2

 

 
(6
)
 
8

 
**

 
**

 
1

 
2

 
**

Total net revenue growth (period over period)
 
2

 
3

 
1

 

 
5

 
**

 
**

 
9

 
5

 
**

Total net revenue margin(6)
 
8.26

 
8.31

 
8.26

 
8.31

 
8.48

 
(5
)bps
 
(22
)bps
 
8.29

 
8.29

 

Net interest margin(7)
 
6.85

 
6.79

 
6.73

 
6.75

 
6.79

 
6

 
6

 
6.78

 
6.66

 
12
bps
Return on average assets
 
0.91

 
1.18

 
1.13

 
1.23

 
1.12

 
(27
)
 
(21
)
 
1.11

 
1.28

 
(17
)
Return on average tangible assets(8)
 
0.95

 
1.24

 
1.18

 
1.29

 
1.18

 
(29
)
 
(23
)
 
1.16

 
1.35

 
(19
)
Return on average common equity(9)
 
6.48

 
8.59

 
7.64

 
8.52

 
7.36

 
(211
)
 
(88
)
 
7.82

 
8.51

 
(69
)
Return on average tangible common equity(10)
 
10.00

 
13.06

 
11.61

 
12.94

 
11.11

 
(306
)
 
(111
)
 
11.93

 
12.87

 
(94
)
Non-interest expense as a percentage of average loans held for investment
 
6.13

 
5.70

 
5.72

 
5.69

 
6.33

 
43

 
(20
)
 
5.81

 
6.17

 
(36
)
Efficiency ratio(11)
 
56.03

 
52.02

 
52.69

 
51.82

 
56.18

 
401

 
(15
)
 
53.17

 
55.51

 
(234
)
Effective income tax rate for continuing operations
 
30.1

 
32.8

 
31.0

 
30.7

 
31.9

 
(270
)
 
(180
)
 
31.3

 
31.8

 
(50
)
Employees (in thousands), period-end
 
47.3

 
46.5

 
46.1

 
45.8

 
45.4

 
2%


4%

 
47.3

 
45.4

 
4%

Credit Quality Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan and lease losses
 
$
6,503

 
$
6,258

 
$
5,881

 
$
5,416

 
$
5,130

 
4%


27%

 
$
6,503

 
$
5,130

 
27%

Allowance as a percentage of loans held for investment
 
2.65%

 
2.63%

 
2.51%

 
2.38%

 
2.23%

 
2
bps

42
bps
 
2.65%

 
2.23%

 
42
bps
Net charge-offs
 
$
1,489

 
$
1,240

 
$
1,155

 
$
1,178

 
$
1,078

 
20%


38%

 
$
5,062

 
$
3,695

 
37%

Net charge-off rate(12)
 
2.48%

 
2.10%

 
2.01%

 
2.08%

 
1.96%

 
38
bps

52
bps
 
2.17%

 
1.75%

 
42
bps
30+ day performing delinquency rate
 
2.93

 
2.71

 
2.47

 
2.33

 
2.69

 
22

 
24

 
2.93

 
2.69

 
24

30+ day delinquency rate
 
3.27

 
3.04

 
2.79

 
2.64

 
3.00

 
23

 
27

 
3.27

 
3.00

 
27

Capital Ratios(13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital 
 
10.1%

 
10.6%

 
10.9%

 
11.1%

 
11.1%

 
(50
)bps

(100
)bps
 
10.1%

 
11.1%

 
(100
)bps
Tier 1 capital
 
11.6

 
12.0

 
12.2

 
12.4

 
12.4

 
(40
)
 
(80
)
 
11.6

 
12.4

 
(80
)
Total capital
 
14.3

 
14.7

 
14.4

 
14.6

 
14.6

 
(40
)
 
(30
)
 
14.3

 
14.6

 
(30
)
Tier 1 leverage
 
9.9

 
10.1

 
10.2

 
10.2

 
10.6

 
(20
)
 
(70
)
 
9.9

 
10.6

 
(70
)
Tangible common equity (“TCE”)(14)
 
8.1

 
8.8

 
9.0

 
9.1

 
8.9

 
(70
)
 
(80
)
 
8.1

 
8.9

 
(80
)
 

3



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
 
 
Three Months Ended
 
2016 Q4 vs.
 
Year Ended December 31,
 
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
(Dollars in millions, except per share data and as noted)
 
Q4
 
Q3
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, including loans held for sale
 
$
5,587

 
$
5,383

 
$
4,961

 
4%

 
13%

 
$
21,203

 
$
18,785

 
13%

Investment securities
 
393

 
386

 
401

 
2

 
(2
)
 
1,599

 
1,575

 
2

Other
 
29

 
25

 
22

 
16

 
32

 
89

 
99

 
(10
)
Total interest income
 
6,009

 
5,794

 
5,384

 
4

 
12

 
22,891

 
20,459

 
12

Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
 
332

 
306

 
277

 
8

 
20

 
1,213

 
1,091

 
11

Securitized debt obligations
 
65

 
56

 
43

 
16

 
51

 
216

 
151

 
43

Senior and subordinated notes
 
138

 
121

 
89

 
14

 
55

 
476

 
330

 
44

Other borrowings
 
27

 
34

 
14

 
(21
)
 
93

 
113

 
53

 
113

Total interest expense
 
562

 
517

 
423

 
9

 
33

 
2,018

 
1,625

 
24

Net interest income
 
5,447

 
5,277

 
4,961

 
3

 
10

 
20,873

 
18,834

 
11

Provision for credit losses
 
1,752

 
1,588

 
1,380

 
10

 
27

 
6,459

 
4,536

 
42

Net interest income after provision for credit losses
 
3,695

 
3,689

 
3,581

 

 
3

 
14,414

 
14,298

 
1

Non-interest income:(15)(16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges and other customer-related fees
 
412

 
417

 
463

 
(1
)
 
(11
)
 
1,646

 
1,856

 
(11
)
Interchange fees, net
 
624

 
603

 
625

 
3

 

 
2,452

 
2,264

 
8

Net securities gains (losses)
 
(4
)
 
1

 
(9
)
 
**

 
(56
)
 
(11
)
 
(32
)
 
(66
)
Other
 
87

 
163

 
154

 
(47
)
 
(44
)
 
541

 
491

 
10

Total non-interest income
 
1,119

 
1,184

 
1,233

 
(5
)
 
(9
)
 
4,628

 
4,579

 
1

Non-interest expense:(15)(16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and associate benefits
 
1,336

 
1,317

 
1,215

 
1

 
10

 
5,202

 
4,975

 
5

Occupancy and equipment
 
522

 
499

 
511

 
5

 
2

 
1,944

 
1,829

 
6

Marketing
 
575

 
393

 
564

 
46

 
2

 
1,811

 
1,744

 
4

Professional services
 
312

 
257

 
307

 
21

 
2

 
1,075

 
1,120

 
(4
)
Communications and data processing
 
297

 
291

 
289

 
2

 
3

 
1,169

 
1,055

 
11

Amortization of intangibles
 
101

 
89

 
103

 
13

 
(2
)
 
386

 
430

 
(10
)
Other
 
536

 
515

 
491

 
4

 
9

 
1,971

 
1,843

 
7

Total non-interest expense
 
3,679

 
3,361

 
3,480

 
9

 
6

 
13,558

 
12,996

 
4

Income from continuing operations before income taxes
 
1,135

 
1,512

 
1,334

 
(25
)
 
(15
)
 
5,484

 
5,881

 
(7
)
Income tax provision
 
342

 
496

 
426

 
(31
)
 
(20
)
 
1,714

 
1,869

 
(8
)
Income from continuing operations, net of tax
 
793

 
1,016

 
908

 
(22
)
 
(13
)
 
3,770

 
4,012

 
(6
)
Income (loss) from discontinued operations, net of tax(2)
 
(2
)
 
(11
)
 
12

 
(82
)
 
**

 
(19
)
 
38

 
**

Net income
 
791

 
1,005

 
920

 
(21
)
 
(14
)
 
3,751

 
4,050

 
(7
)
Dividends and undistributed earnings allocated to participating securities(3)
 
(6
)
 
(6
)
 
(4
)
 

 
50

 
(24
)
 
(20
)
 
20

Preferred stock dividends
 
(75
)
 
(37
)
 
(68
)
 
103

 
10

 
(214
)
 
(158
)
 
35

Net income available to common stockholders
 
$
710

 
$
962

 
$
848

 
(26
)
 
(16
)
 
$
3,513

 
$
3,872

 
(9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

4



 
 
Three Months Ended
 
2016 Q4 vs.
 
Year Ended December 31,
 
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
(Dollars in millions, except per share data and as noted)
 
Q4
 
Q3
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Basic earnings per common share:(3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income from continuing operations
 
$
1.47

 
$
1.94

 
$
1.58

 
(24)%

 
(7)%

 
$
7.00

 
$
7.08

 
(1)%

Income (loss) from discontinued operations
 

 
(0.02
)
 
0.02

 
**

 
**

 
(0.04
)
 
0.07

 
**

Net income per basic common share
 
$
1.47

 
$
1.92

 
$
1.60

 
(23
)
 
(8
)
 
$
6.96

 
$
7.15

 
(3
)
Diluted earnings per common share:(3)
 
 
 
 
 
 
 


 


 
 
 
 
 
 
Net income from continuing operations
 
$
1.45

 
$
1.92

 
$
1.56

 
(24
)
 
(7
)
 
$
6.93

 
$
7.00

 
(1
)
Income (loss) from discontinued operations
 

 
(0.02
)
 
0.02

 
**

 
**

 
(0.04
)
 
0.07

 
**

Net income per diluted common share
 
$
1.45

 
$
1.90

 
$
1.58

 
(24
)
 
(8
)
 
$
6.89

 
$
7.07

 
(3
)
Weighted-average common shares outstanding (in millions):
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Basic common shares
 
483.5

 
501.1

 
530.8

 
(4
)
 
(9
)
 
504.9

 
541.8

 
(7
)
Diluted common shares
 
489.2

 
505.9

 
536.3

 
(3
)
 
(9
)
 
509.8

 
548.0

 
(7
)
Dividends paid per common share
 
$
0.40

 
$
0.40

 
$
0.40

 

 

 
$
1.60

 
$
1.50

 
7


5



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets
 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
4,185

 
$
3,350

 
$
3,253

 
$
3,241

 
$
3,407

 
25%

 
23%

Interest-bearing deposits and other short-term investments
 
5,791

 
5,744

 
3,896

 
1,994

 
4,616

 
1

 
25

Total cash and cash equivalents
 
9,976

 
9,094

 
7,149

 
5,235

 
8,023

 
10

 
24

Restricted cash for securitization investors
 
2,517

 
287

 
265

 
960

 
1,017

 
**

 
147

Securities available for sale, at fair value
 
40,737

 
41,511

 
39,960

 
40,092

 
39,061

 
(2
)
 
4

Securities held to maturity, at carrying value
 
25,712

 
25,019

 
25,120

 
25,080

 
24,619

 
3

 
4

Loans held for investment:(5)
 
 
 
 
 
 
 
 
 
 
 

 

Unsecuritized loans held for investment
 
213,824

 
206,763

 
202,778

 
195,705

 
196,068

 
3

 
9

Loans held in consolidated trusts
 
31,762

 
31,256

 
31,825

 
31,908

 
33,783

 
2

 
(6
)
Total loans held for investment
 
245,586

 
238,019

 
234,603

 
227,613

 
229,851

 
3

 
7

Allowance for loan and lease losses
 
(6,503
)
 
(6,258
)
 
(5,881
)
 
(5,416
)
 
(5,130
)
 
4

 
27

Net loans held for investment
 
239,083

 
231,761

 
228,722

 
222,197

 
224,721

 
3

 
6

Loans held for sale, at lower of cost or fair value
 
1,043

 
994

 
1,220

 
1,251

 
904

 
5

 
15

Premises and equipment, net
 
3,675

 
3,561

 
3,556

 
3,542

 
3,584

 
3

 
3

Interest receivable
 
1,351

 
1,251

 
1,236

 
1,221

 
1,189

 
8

 
14

Goodwill
 
14,519

 
14,493

 
14,495

 
14,492

 
14,480

 

 

Other assets
 
18,420

 
17,090

 
17,394

 
16,276

 
16,450

 
8

 
12

Total assets
 
$
357,033

 
$
345,061

 
$
339,117

 
$
330,346

 
$
334,048

 
3

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

6



 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest payable
 
$
327

 
$
237

 
$
301

 
$
217

 
$
299

 
38%

 
9%

Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing deposits
 
25,502

 
25,565

 
25,424

 
25,182

 
25,847

 

 
(1
)
Interest-bearing deposits
 
211,266

 
200,416

 
195,635

 
196,597

 
191,874

 
5

 
10

Total deposits
 
236,768

 
225,981

 
221,059

 
221,779

 
217,721

 
5

 
9

Securitized debt obligations
 
18,826

 
18,411

 
16,130

 
14,913

 
16,166

 
2

 
16

Other debt:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and securities loaned or sold under agreements to repurchase
 
992

 
1,079

 
999

 
917

 
981

 
(8
)
 
1

Senior and subordinated notes
 
23,431

 
24,001

 
21,872

 
21,736

 
21,837

 
(2
)
 
7

Other borrowings
 
17,211

 
16,329

 
20,180

 
12,931

 
20,131

 
5

 
(15
)
Total other debt
 
41,634

 
41,409

 
43,051

 
35,584

 
42,949

 
1

 
(3
)
Other liabilities
 
11,964

 
10,810

 
10,468

 
10,146

 
9,629

 
11

 
24

Total liabilities
 
309,519

 
296,848

 
291,009

 
282,639

 
286,764

 
4

 
8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders equity:
 
 
 
 
 
 
 
 
 
 
 

 
 
Preferred stock
 
0

 
0

 
0

 
0

 
0

 

 

Common stock
 
7

 
7

 
7

 
7

 
6

 

 
17

Additional paid-in capital, net
 
31,157

 
30,439

 
29,786

 
29,709

 
29,655

 
2

 
5

Retained earnings
 
29,766

 
29,245

 
28,479

 
27,808

 
27,045

 
2

 
10

Accumulated other comprehensive income (loss)
 
(949
)
 
121

 
241

 
(41
)
 
(616
)
 
**

 
54

Treasury stock, at cost
 
(12,467
)
 
(11,599
)
 
(10,405
)
 
(9,776
)
 
(8,806
)
 
7

 
42

Total stockholders equity
 
47,514

 
48,213

 
48,108

 
47,707

 
47,284

 
(1
)
 

Total liabilities and stockholders equity
 
$
357,033

 
$
345,061

 
$
339,117

 
$
330,346

 
$
334,048

 
3

 
7


7



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 $321 million in Q4 2016, $289 million in Q3 2016, $244 million in Q2 2016, $228 million in Q1 2016 and $222 million in Q4 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
 
2016
 
2015
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
Provision (benefit) for mortgage representation and warranty losses before income taxes:
 
 
 
 
 
 
 
 
 
 
Recorded in continuing operations
 

 

 
$
(1
)
 
$
(1
)
 
$
(1
)
Recorded in discontinued operations
 
(2
)
 
18

 
2

 
3

 
(21
)
Total provision (benefit) for mortgage representation and warranty losses before income taxes
 
$
(2
)
 
$
18

 
$
1

 
$
2

 
$
(22
)
The mortgage representation and warranty reserve was $630 million as of December 31, 2016, $632 million as of September 30, 2016 and $610 million as of December 31, 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) 
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.
(5) 
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
 
2016
 
2015
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
PCI loans:
 
 
 
 
 
 
 
 
 
 
Period-end unpaid principal balance
 
$
15,896

 
$
17,011

 
$
18,256

 
$
19,492

 
$
20,434

Period-end loans held for investment
 
15,071

 
16,149

 
17,358

 
18,568

 
19,518

Average loans held for investment
 
15,443

 
16,529

 
17,783

 
18,894

 
19,319

(6) 
Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(7) 
Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(8) 
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.
(9) 
Return on average common equity is 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.
(10) 
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.
(11) 
Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio which is a non-GAAP measure. See “Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information on our non-GAAP measures.
(12) 
Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(13) 
Capital ratios as of the end of Q4 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.
(14) 
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.

8



(15) 
We made certain non-interest income and non-interest expense reclassifications in Q4 2016. The changes were primarily related to a reclassification of certain consumer and commercial banking income from Other to Service charges and other customer-related fees within Non-interest income, and a reclassification of certain system processing costs from Professional services to Communications and data processing within Non-interest expense. We have also consolidated the Non-interest income presentation of Other-than-temporary impairment (“OTTI”) with net realized gains or losses from investment securities into a new Net securities gains (losses) line. These reclassifications were made to better reflect the nature of income earned and expenses incurred. All prior period amounts presented have been reclassified to conform to the current period presentation.
(16) 
The primary net effects of the reclassifications discussed in footnote 15 above for Q3 2016, Q4 2015, and the years ended December 31, 2016 and 2015 were (i) increases to Service charges and other customer-related fees of $30 million, $37 million, $71 million and $141 million, respectively; (ii) decreases to Other non-interest income of $31 million, $39 million, $84 million and $168 million, respectively; and (iii) increases to Communications and data processing expense of $39 million, $43 million, $115 million and $172 million, respectively, with corresponding decreases to Professional services.
**  
Not meaningful.

9



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
 
 
2016 Q4
 
2016 Q3
 
2015 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)
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, including loans held for sale
 
$
241,110

 
$
5,587

 
9.27%
 
$
237,067

 
$
5,383

 
9.08%
 
$
220,760

 
$
4,961

 
8.99%
Investment securities
 
67,827

 
393

 
2.32
 
66,291

 
386

 
2.33
 
64,444

 
401

 
2.49
Cash equivalents and other
 
8,916

 
29

 
1.30
 
7,629

 
25

 
1.31
 
6,850

 
22

 
1.28
Total interest-earning assets
 
$
317,853

 
$
6,009

 
7.56
 
$
310,987

 
$
5,794

 
7.45
 
$
292,054

 
$
5,384

 
7.37
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Interest-bearing deposits
 
$
206,464

 
$
332

 
0.64
 
$
196,913

 
$
306

 
0.62
 
$
189,885

 
$
277

 
0.58
Securitized debt obligations
 
18,300

 
65

 
1.42
 
17,389

 
56

 
1.29
 
15,993

 
43

 
1.08
Senior and subordinated notes
 
23,605

 
138

 
2.34
 
22,342

 
121

 
2.17
 
21,987

 
89

 
1.62
Other borrowings and liabilities
 
17,654

 
27

 
0.61
 
21,840

 
34

 
0.62
 
11,542

 
14

 
0.49
Total interest-bearing liabilities
 
$
266,023

 
$
562

 
0.85
 
$
258,484

 
$
517

 
0.80
 
$
239,407

 
$
423

 
0.71
Net interest income/spread
 
 
 
$
5,447

 
6.71
 
 
 
$
5,277

 
6.65
 
 
 
$
4,961

 
6.66
Impact of non-interest-bearing funding
 
 
 
 
 
0.14
 
 
 
 
 
0.14
 
 
 
 
 
0.13
Net interest margin
 
 
 
 
 
6.85%
 
 
 
 
 
6.79%
 
 
 
 
 
6.79%
 
 
Year Ended December 31,
 
 
2016
 
2015
 
 
Average Balance
 
Interest Income/Expense(1)
 
Yield/Rate(1)
 
Average Balance
 
Interest Income/Expense(1)
 
Yield/Rate(1)
(Dollars in millions)
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Loans, including loans held for sale
 
$
234,338

 
$
21,203

 
9.05%
 
$
211,549

 
$
18,785

 
8.88%
Investment securities
 
66,260

 
1,599

 
2.41
 
63,738

 
1,575

 
2.47
Cash equivalents and other
 
7,198

 
89

 
1.24
 
7,294

 
99

 
1.36
Total interest-earning assets
 
$
307,796

 
$
22,891

 
7.44
 
$
282,581

 
$
20,459

 
7.24
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
$
198,304

 
$
1,213

 
0.61
 
$
185,677

 
$
1,091

 
0.59
Securitized debt obligations
 
16,576

 
216

 
1.30
 
13,929

 
151

 
1.08
Senior and subordinated notes
 
22,417

 
476

 
2.12
 
20,935

 
330

 
1.58
Other borrowings and liabilities
 
18,736

 
113

 
0.60
 
11,297

 
53

 
0.47
Total interest-bearing liabilities
 
$
256,033

 
$
2,018

 
0.79
 
$
231,838

 
$
1,625

 
0.70
Net interest income/spread
 
 
 
$
20,873

 
6.65
 
 
 
$
18,834

 
6.54
Impact of non-interest-bearing funding
 
 
 
 
 
0.13
 
 
 
 
 
0.12
Net interest margin
 
 
 
 
 
6.78%
 
 
 
 
 
6.66%
__________
(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.

10



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics
 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
(Dollars in millions)
 
2016
Q4
 
2016
Q3
 
2016
Q2
 
2016
Q1
 
2015
Q4
 
2016
Q3
 
2015
Q4
 
2016
 
2015
 
2016 vs.
2015
Loans Held For Investment (Period-End)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Domestic credit card
 
$
97,120

 
$
90,955

 
$
88,581

 
$
84,561

 
$
87,939

 
7%

 
10%

 
$
97,120

 
$
87,939

 
10%

   International credit card
 
8,432

 
8,246

 
8,323

 
8,138

 
8,186

 
2

 
3

 
8,432

 
8,186

 
3

Total credit card
 
105,552

 
99,201

 
96,904

 
92,699

 
96,125

 
6

 
10

 
105,552

 
96,125

 
10

Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


   Auto
 
47,916

 
46,311

 
44,502

 
42,714

 
41,549

 
3

 
15

 
47,916

 
41,549

 
15

   Home loan
 
21,584

 
22,448

 
23,358

 
24,343

 
25,227

 
(4
)
 
(14
)
 
21,584

 
25,227

 
(14
)
   Retail banking
 
3,554

 
3,526

 
3,555

 
3,534

 
3,596

 
1

 
(1
)
 
3,554

 
3,596

 
(1
)
Total consumer banking
 
73,054

 
72,285

 
71,415

 
70,591

 
70,372

 
1

 
4

 
73,054

 
70,372

 
4

Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


   Commercial and multifamily real estate
 
26,609

 
26,507

 
26,341

 
25,559

 
25,518

 

 
4

 
26,609

 
25,518

 
4

   Commercial and industrial
 
39,824

 
39,432

 
39,313

 
38,102

 
37,135

 
1

 
7

 
39,824

 
37,135

 
7

Total commercial lending
 
66,433

 
65,939

 
65,654

 
63,661

 
62,653

 
1

 
6

 
66,433

 
62,653

 
6

   Small-ticket commercial real estate
 
483

 
518

 
548

 
580

 
613

 
(7
)
 
(21
)
 
483

 
613

 
(21
)
Total commercial banking
 
66,916

 
66,457

 
66,202

 
64,241

 
63,266

 
1

 
6

 
66,916

 
63,266

 
6

Other loans
 
64

 
76

 
82

 
82

 
88

 
(16
)
 
(27
)
 
64

 
88

 
(27
)
Total loans held for investment
 
$
245,586

 
$
238,019

 
$
234,603

 
$
227,613

 
$
229,851

 
3

 
7

 
$
245,586

 
$
229,851

 
7

Loans Held For Investment (Average)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


   Domestic credit card
 
$
92,623

 
$
89,763

 
$
85,981

 
$
85,148

 
$
83,760

 
3%

 
11%

 
$
88,394

 
$
78,743

 
12%

   International credit card
 
8,168

 
8,253

 
8,401

 
7,839

 
8,127

 
(1
)
 
1

 
8,166

 
7,992

 
2

Total credit card
 
100,791

 
98,016

 
94,382

 
92,987

 
91,887

 
3

 
10

 
96,560

 
86,735

 
11

Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


   Auto
 
47,126

 
45,355

 
43,605

 
41,962

 
41,333

 
4

 
14

 
44,521

 
39,967

 
11

   Home loan
 
21,984

 
22,852

 
23,835

 
24,781

 
25,776

 
(4
)
 
(15
)
 
23,358

 
27,601

 
(15
)
   Retail banking
 
3,549

 
3,520

 
3,548

 
3,553

 
3,595

 
1

 
(1
)
 
3,543

 
3,582

 
(1
)
Total consumer banking
 
72,659

 
71,727

 
70,988

 
70,296

 
70,704

 
1

 
3

 
71,422

 
71,150

 

Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


   Commercial and multifamily real estate
 
26,445

 
26,154

 
25,661

 
25,015

 
25,613

 
1

 
3

 
25,821

 
23,728

 
9

   Commercial and industrial
 
39,573

 
39,346

 
38,713

 
37,762

 
31,132

 
1

 
27

 
38,852

 
28,349

 
37

Total commercial lending
 
66,018

 
65,500

 
64,374

 
62,777

 
56,745

 
1

 
16

 
64,673

 
52,077

 
24

   Small-ticket commercial real estate
 
497

 
534

 
564

 
598

 
634

 
(7
)
 
(22
)
 
548

 
692

 
(21
)
Total commercial banking
 
66,515

 
66,034

 
64,938

 
63,375

 
57,379

 
1

 
16

 
65,221

 
52,769

 
24

Other loans
 
62

 
66

 
71

 
78

 
82

 
(6
)
 
(24
)
 
69

 
91

 
(24
)
Total average loans held for investment
 
$
240,027

 
$
235,843

 
$
230,379

 
$
226,736

 
$
220,052

 
2

 
9

 
$
233,272

 
$
210,745

 
11


11



 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
 
 
2016
Q4
 
2016
Q3
 
2016
Q2
 
2016
Q1
 
2015
Q4
 
2016
Q3
 
2015
Q4
 
2016
 
2015
 
2016 vs.
2015
Net Charge-Off (Recovery) Rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Domestic credit card
 
4.66%

 
3.74%

 
4.07%

 
4.16%

 
3.75%

 
92
bps
 
91
bps
 
4.16%

 
3.45%

 
71
bps
   International credit card
 
3.35

 
3.18

 
3.54

 
3.24

 
2.76

 
17

 
59

 
3.33

 
2.50

 
83

Total credit card
 
4.56

 
3.70

 
4.02

 
4.09

 
3.66

 
86

 
90

 
4.09

 
3.36

 
73

Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Auto
 
2.07

 
1.85

 
1.20

 
1.60

 
2.10

 
22

 
(3
)
 
1.69

 
1.69

 

   Home loan
 
0.08

 
0.03

 
0.09

 
0.05

 
0.05

 
5

 
3

 
0.06

 
0.03

 
3

   Retail banking
 
1.73

 
1.75

 
1.26

 
1.36

 
1.43

 
(2
)
 
30

 
1.53

 
1.33

 
20

Total consumer banking
 
1.45

 
1.26

 
0.83

 
1.04

 
1.32

 
19

 
13

 
1.15

 
1.03

 
12

Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commercial and multifamily real estate
 
(0.02
)
 
0.01

 
(0.02
)
 
(0.01
)
 
(0.03
)
 
(3
)
 
1

 
(0.01
)
 
(0.06
)
 
5

   Commercial and industrial
 
0.80

 
1.09

 
0.62

 
0.49

 
0.07

 
(29
)
 
73

 
0.75

 
0.21

 
54

Total commercial lending
 
0.47

 
0.66

 
0.37

 
0.29

 
0.02

 
(19
)
 
45

 
0.45

 
0.09

 
36

   Small-ticket commercial real estate
 
(0.02
)
 
0.74

 
0.33

 
0.13

 
0.34

 
(76
)
 
(36
)
 
0.30

 
0.36

 
(6
)
Total commercial banking
 
0.47

 
0.66

 
0.37

 
0.29

 
0.03

 
(19
)
 
44

 
0.45

 
0.09

 
36

Total net charge-offs
 
2.48

 
2.10

 
2.01

 
2.08

 
1.96

 
38

 
52

 
2.17

 
1.75

 
42

30+ Day Performing Delinquency Rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Domestic credit card
 
3.95%

 
3.68%

 
3.14%

 
3.09%

 
3.39%

 
27
bps
 
56
bps
 
3.95%

 
3.39%

 
56
bps
   International credit card
 
3.36

 
3.33

 
3.24

 
3.32

 
2.98

 
3

 
38

 
3.36

 
2.98

 
38

Total credit card
 
3.91

 
3.65

 
3.15

 
3.11

 
3.36

 
26

 
55

 
3.91

 
3.36

 
55

Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Auto
 
6.12

 
5.67

 
5.59

 
5.14

 
6.69

 
45

 
(57
)
 
6.12

 
6.69

 
(57
)
   Home loan
 
0.20

 
0.19

 
0.14

 
0.14

 
0.16

 
1

 
4

 
0.20

 
0.16

 
4

   Retail banking
 
0.70

 
0.59

 
0.62

 
0.61

 
0.76

 
11

 
(6
)
 
0.70

 
0.76

 
(6
)
Total consumer banking
 
4.10

 
3.72

 
3.56

 
3.19

 
4.05

 
38

 
5

 
4.10

 
4.05

 
5

Nonperforming Loans and Nonperforming Assets Rates(1)(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   International credit card
 
0.50%

 
0.53%

 
0.53%

 
0.59%

 
0.65%

 
(3
)bps
 
(15
)bps
 
0.50%

 
0.65%

 
(15
)bps
Total credit card
 
0.04

 
0.04

 
0.05

 
0.05

 
0.06

 

 
(2
)
 
0.04

 
0.06

 
(2
)
Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Auto
 
0.47

 
0.43

 
0.38

 
0.31

 
0.53

 
4

 
(6
)
 
0.47

 
0.53

 
(6
)
   Home loan
 
1.26

 
1.23

 
1.24

 
1.26

 
1.23

 
3

 
3

 
1.26

 
1.23

 
3

   Retail banking
 
0.86

 
1.05

 
0.89

 
0.83

 
0.77

 
(19
)
 
9

 
0.86

 
0.77

 
9

Total consumer banking
 
0.72

 
0.71

 
0.69

 
0.66

 
0.79

 
1

 
(7
)
 
0.72

 
0.79

 
(7
)
Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commercial and multifamily real estate
 
0.11

 
0.08

 
0.10

 
0.12

 
0.03

 
3

 
8

 
0.11

 
0.03

 
8

   Commercial and industrial
 
2.48

 
2.44

 
2.58

 
2.66

 
1.45

 
4

 
103

 
2.48

 
1.45

 
103

Total commercial lending
 
1.53

 
1.49

 
1.59

 
1.64

 
0.87

 
4

 
66

 
1.53

 
0.87

 
66

   Small-ticket commercial real estate
 
0.85

 
2.13

 
1.59

 
1.11

 
0.83

 
(128
)
 
2

 
0.85

 
0.83

 
2

Total commercial banking
 
1.53

 
1.50

 
1.59

 
1.63

 
0.87

 
3

 
66

 
1.53

 
0.87

 
66

Total nonperforming loans
 
0.65

 
0.66

 
0.68

 
0.69

 
0.51

 
(1
)
 
14

 
0.65

 
0.51

 
14

Total nonperforming assets
 
0.76

 
0.77

 
0.80

 
0.83

 
0.65

 
(1
)
 
11

 
0.76

 
0.65

 
11


12



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity
 
 
Three Months Ended December 31, 2016
 
 
Credit Card
 
Consumer Banking
 
 
 
 
 
 
(Dollars in millions)

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 September 30, 2016

$
4,079


$
366


$
4,445

 
$
862

 
$
62

 
$
79

 
$
1,003

 
$
808

 
$
2

 
$
6,258

Provision (benefit) for loan and lease losses

1,229


93


1,322

 
339

 
8

 
17

 
364

 
63

 
(1
)
 
1,748

Charge-offs

(1,299
)

(112
)

(1,411
)
 
(339
)
 
(7
)
 
(18
)
 
(364
)
 
(83
)
 
(1
)
 
(1,859
)
Recoveries

220


43


263

 
95

 
2

 
3

 
100

 
5

 
2

 
370

Net charge-offs

(1,079
)

(69
)

(1,148
)
 
(244
)
 
(5
)
 
(15
)
 
(264
)
 
(78
)
 
1

 
(1,489
)
Other changes(4)



(13
)

(13
)
 

 

 
(1
)
 
(1
)
 

 

 
(14
)
Balance as of December 31, 2016

4,229


377


4,606

 
957

 
65

 
80

 
1,102

 
793

 
2

 
6,503

Reserve for unfunded lending commitments:







 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of September 30, 2016






 

 

 
6

 
6

 
126

 

 
132

Provision (benefit) for losses on unfunded lending commitments






 

 

 
1

 
1

 
3

 

 
4

Balance as of December 31, 2016






 

 

 
7

 
7

 
129

 

 
136

Combined allowance and reserve as of December 31, 2016

$
4,229


$
377


$
4,606

 
$
957

 
$
65

 
$
87

 
$
1,109

 
$
922

 
$
2

 
$
6,639

 
 
Year Ended December 31, 2016
 
 
Credit Card
 
Consumer Banking
 
 
 
 
 
 
(Dollars in millions)
 
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
 
4,555

 
371

 
4,926

 
983

 
9

 
63

 
1,055

 
515

 
(5
)
 
6,491

Charge-offs
 
(4,586
)
 
(433
)
 
(5,019
)
 
(1,135
)
 
(22
)
 
(69
)
 
(1,226
)
 
(307
)
 
(3
)
 
(6,555
)
Recoveries
 
905

 
161

 
1,066

 
383

 
8

 
15

 
406

 
15

 
6

 
1,493

Net charge-offs
 
(3,681
)
 
(272
)
 
(3,953
)
 
(752
)
 
(14
)
 
(54
)
 
(820
)
 
(292
)
 
3

 
(5,062
)
Other changes(4)
 

 
(21
)
 
(21
)
 

 

 
(1
)
 
(1
)
 
(34
)
 

 
(56
)
Balance as of December 31, 2016
 
4,229

 
377

 
4,606

 
957

 
65

 
80

 
1,102

 
793

 
2

 
6,503

Reserve for unfunded lending commitments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2015
 

 

 

 

 

 
7

 
7

 
161

 

 
168

Provision (benefit) for losses on unfunded lending commitments
 

 

 

 

 

 

 

 
(32
)
 

 
(32
)
Balance as of December 31, 2016
 

 

 

 

 

 
7

 
7

 
129

 

 
136

Combined allowance and reserve as of December 31, 2016
 
$
4,229

 
$
377

 
$
4,606

 
$
957

 
$
65

 
$
87

 
$
1,109

 
$
922

 
$
2

 
$
6,639




13



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial Summary—Business Segment Results
 
 
Three Months Ended December 31, 2016
 
Year Ended December 31, 2016
(Dollars in millions)
 
Credit Card
 
Consumer Banking
 
Commercial Banking
 
Other
 
Total
 
Credit Card
 
Consumer Banking
 
Commercial Banking
 
Other
 
Total
Net interest income
 
$
3,353

 
$
1,498

 
$
565

 
$
31

 
$
5,447

 
$
12,635

 
$
5,829

 
$
2,216

 
$
193

 
$
20,873

Non-interest income
 
849

 
166

 
175

 
(71
)
 
1,119

 
3,380

 
733

 
578

 
(63
)
 
4,628

Total net revenue(5)
 
4,202

 
1,664

 
740

 
(40
)
 
6,566

 
16,015

 
6,562

 
2,794

 
130

 
25,501

Provision (benefit) for credit losses
 
1,322

 
365

 
66

 
(1
)
 
1,752

 
4,926

 
1,055

 
483

 
(5
)
 
6,459

Non-interest expense
 
2,073

 
1,109

 
393

 
104

 
3,679

 
7,703

 
4,139

 
1,407

 
309

 
13,558

Income (loss) from continuing operations before income taxes
 
807

 
190

 
281

 
(143
)
 
1,135

 
3,386

 
1,368

 
904

 
(174
)
 
5,484

Income tax provision (benefit)
 
295

 
70

 
102

 
(125
)
 
342

 
1,226

 
498

 
329

 
(339
)
 
1,714

Income (loss) from continuing operations, net of tax
 
$
512

 
$
120

 
$
179

 
$
(18
)
 
$
793

 
$
2,160

 
$
870

 
$
575

 
$
165

 
$
3,770

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2016
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
 
Credit Card
 
Consumer Banking
 
Commercial Banking
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
3,204

 
$
1,472

 
$
555

 
$
46

 
$
5,277

 
 
 
 
 
 
 
 
 
 
Non-interest income
 
825

 
201

 
156

 
2

 
1,184

 
 
 
 
 
 
 
 
 
 
Total net revenue(5)
 
4,029

 
1,673

 
711

 
48

 
6,461

 
 
 
 
 
 
 
 
 
 
Provision (benefit) for credit losses
 
1,272

 
256

 
61

 
(1
)
 
1,588

 
 
 
 
 
 
 
 
 
 
Non-interest expense
 
1,884

 
1,034

 
349

 
94

 
3,361

 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes
 
873

 
383

 
301

 
(45
)
 
1,512

 
 
 
 
 
 
 
 
 
 
Income tax provision (benefit)
 
318

 
139

 
110

 
(71
)
 
496

 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax
 
$
555

 
$
244

 
$
191

 
$
26

 
$
1,016

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2015
 
Year Ended December 31, 2015
(Dollars in millions)
 
Credit Card
 
Consumer Banking
 
Commercial Banking
 
Other
 
Total
 
Credit Card
 
Consumer Banking
 
Commercial Banking
 
Other
 
Total
Net interest income
 
$
2,996

 
$
1,434

 
$
484

 
$
47

 
$
4,961

 
$
11,161

 
$
5,755

 
$
1,865

 
$
53

 
$
18,834

Non-interest income
 
902

 
182

 
142

 
7

 
1,233

 
3,421

 
710

 
487

 
(39
)
 
4,579

Total net revenue(5)
 
3,898

 
1,616

 
626

 
54

 
6,194

 
14,582

 
6,465

 
2,352

 
14

 
23,413

Provision (benefit) for credit losses
 
1,022

 
240

 
118

 

 
1,380

 
3,417

 
819

 
302

 
(2
)
 
4,536

Non-interest expense
 
2,021

 
1,057

 
342

 
60

 
3,480

 
7,502

 
4,026

 
1,156

 
312

 
12,996

Income (loss) from continuing operations before income taxes
 
855

 
319

 
166

 
(6
)
 
1,334

 
3,663

 
1,620

 
894

 
(296
)
 
5,881

Income tax provision (benefit)
 
302

 
115

 
60

 
(51
)
 
426

 
1,309

 
586

 
324

 
(350
)
 
1,869

Income (loss) from continuing operations, net of tax
 
$
553

 
$
204

 
$
106

 
$
45

 
$
908

 
$
2,354

 
$
1,034

 
$
570

 
$
54

 
$
4,012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


14



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Credit Card Business
 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Credit Card
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
3,353

 
$
3,204

 
$
3,045

 
$
3,033

 
$
2,996

 
5%


12%

 
$
12,635

 
$
11,161

 
13%

Non-interest income
 
849

 
825

 
859

 
847

 
902

 
3

 
(6
)
 
3,380

 
3,421

 
(1
)
Total net revenue
 
4,202

 
4,029

 
3,904

 
3,880

 
3,898

 
4

 
8

 
16,015

 
14,582

 
10

Provision (benefit) for credit losses
 
1,322

 
1,272

 
1,261

 
1,071

 
1,022

 
4

 
29

 
4,926

 
3,417

 
44

Non-interest expense
 
2,073

 
1,884

 
1,883

 
1,863

 
2,021

 
10

 
3

 
7,703

 
7,502

 
3

Income (loss) from continuing operations before income taxes
 
807

 
873

 
760

 
946

 
855

 
(8
)
 
(6
)
 
3,386

 
3,663

 
(8
)
Income tax provision (benefit)
 
295

 
318

 
276

 
337

 
302

 
(7
)
 
(2
)
 
1,226

 
1,309

 
(6
)
Income (loss) from continuing operations, net of tax
 
$
512

 
$
555

 
$
484

 
$
609

 
$
553

 
(8
)

(7
)
 
$
2,160

 
$
2,354

 
(8
)
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans held for investment
 
$
105,552

 
$
99,201

 
$
96,904

 
$
92,699

 
$
96,125

 
6

 
10

 
$
105,552

 
$
96,125

 
10

Average loans held for investment
 
100,791

 
98,016

 
94,382

 
92,987

 
91,887

 
3

 
10

 
96,560

 
86,735

 
11

Average yield on loans held for investment(6)
 
14.93%


14.68%

 
14.49%

 
14.60%

 
14.45%


25
bps

48
bps
 
14.68%

 
14.28%

 
40
bps
Total net revenue margin(7)
 
16.68

 
16.44

 
16.55

 
16.69

 
16.97

 
24

 
(29
)
 
16.59

 
16.81

 
(22
)
Net charge-off rate
 
4.56

 
3.70

 
4.02

 
4.09

 
3.66

 
86

 
90

 
4.09

 
3.36

 
73

30+ day performing delinquency rate
 
3.91

 
3.65

 
3.15

 
3.11

 
3.36

 
26

 
55

 
3.91

 
3.36

 
55

30+ day delinquency rate
 
3.94

 
3.69

 
3.18

 
3.15

 
3.40

 
25

 
54

 
3.94

 
3.40

 
54

Nonperforming loan rate(1)
 
0.04

 
0.04

 
0.05

 
0.05

 
0.06

 

 
(2
)
 
0.04

 
0.06

 
(2
)
PCCR intangible amortization
 
$
58

 
$
62

 
$
67

 
$
70

 
$
74

 
(6)%

 
(22)%

 
$
257

 
$
316

 
(19)%

Purchase volume(8)
 
82,824

 
78,106

 
78,019

 
68,189

 
75,350

 
6

 
10

 
307,138

 
271,167

 
13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

15



 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Domestic Card
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Net interest income
 
$
3,090

 
$
2,956

 
$
2,769

 
$
2,756

 
$
2,718

 
5%


14%

 
$
11,571

 
$
10,147

 
14%

Non-interest income
 
791

 
759

 
792

 
774

 
830

 
4

 
(5
)
 
3,116

 
3,183

 
(2
)
Total net revenue
 
3,881

 
3,715

 
3,561

 
3,530

 
3,548

 
4

 
9

 
14,687

 
13,330

 
10

Provision (benefit) for credit losses
 
1,229

 
1,190

 
1,164

 
972

 
945

 
3

 
30

 
4,555

 
3,204

 
42

Non-interest expense
 
1,859

 
1,696

 
1,669

 
1,671

 
1,796

 
10

 
4

 
6,895

 
6,627

 
4

Income (loss) from continuing operations before income taxes
 
793

 
829

 
728

 
887

 
807

 
(4
)
 
(2
)
 
3,237

 
3,499

 
(7
)
Income tax provision (benefit)
 
288

 
302

 
265

 
323

 
293

 
(5
)
 
(2
)
 
1,178

 
1,267

 
(7
)
Income (loss) from continuing operations, net of tax
 
$
505

 
$
527

 
$
463

 
$
564

 
$
514

 
(4
)
 
(2
)
 
$
2,059

 
$
2,232

 
(8
)
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Period-end loans held for investment
 
$
97,120

 
$
90,955

 
$
88,581

 
$
84,561

 
$
87,939

 
7


10

 
$
97,120

 
$
87,939

 
10

Average loans held for investment
 
92,623

 
89,763

 
85,981

 
85,148

 
83,760

 
3

 
11

 
88,394

 
78,743

 
12

Average yield on loans held for investment(6)
 
14.91%


14.71%

 
14.40%

 
14.43%

 
14.31%


20
bps

60
bps
 
14.62%

 
14.21%

 
41
bps
Total net revenue margin(7)
 
16.76

 
16.55

 
16.57

 
16.58

 
16.95

 
21

 
(19
)
 
16.62

 
16.93

 
(31
)
Net charge-off rate
 
4.66

 
3.74

 
4.07

 
4.16

 
3.75

 
92

 
91

 
4.16

 
3.45

 
71

30+ day delinquency rate
 
3.95

 
3.68

 
3.14

 
3.09

 
3.39

 
27

 
56

 
3.95

 
3.39

 
56

Purchase volume(8)
 
$
75,639

 
$
71,331

 
$
71,050

 
$
62,617

 
$
68,740

 
6%


10%

 
$
280,637

 
$
246,740

 
14%

Refreshed FICO scores:(9)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Greater than 660
 
64
%
 
64
%
 
65
%
 
65
%
 
66
%
 

 
(2
)
 
64
%
 
66
%
 
(2
)
660 or below
 
36

 
36

 
35

 
35

 
34

 

 
2

 
36

 
34

 
2

Total
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 
 
100
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

16



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Consumer Banking Business
 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Consumer Banking
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
1,498

 
$
1,472

 
$
1,439

 
$
1,420

 
$
1,434

 
2%

 
4%

 
$
5,829

 
$
5,755

 
1%

Non-interest income
 
166

 
201

 
175

 
191

 
182

 
(17
)
 
(9
)
 
733

 
710

 
3

Total net revenue
 
1,664

 
1,673

 
1,614

 
1,611

 
1,616

 
(1
)
 
3

 
6,562

 
6,465

 
2

Provision (benefit) for credit losses
 
365

 
256

 
204

 
230

 
240

 
43

 
52

 
1,055

 
819

 
29

Non-interest expense
 
1,109

 
1,034

 
1,006

 
990

 
1,057

 
7

 
5

 
4,139

 
4,026

 
3

Income (loss) from continuing operations before income taxes
 
190

 
383

 
404

 
391

 
319

 
(50
)
 
(40
)
 
1,368

 
1,620

 
(16
)
Income tax provision (benefit)
 
70

 
139

 
147

 
142

 
115

 
(50
)
 
(39
)
 
498

 
586

 
(15
)
Income (loss) from continuing operations, net of tax
 
$
120

 
$
244

 
$
257

 
$
249

 
$
204

 
(51
)
 
(41
)
 
$
870

 
$
1,034

 
(16
)
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans held for investment
 
$
73,054

 
$
72,285

 
$
71,415

 
$
70,591

 
$
70,372

 
1

 
4

 
$
73,054

 
$
70,372

 
4

Average loans held for investment
 
72,659

 
71,727

 
70,988

 
70,296

 
70,704

 
1

 
3

 
71,422

 
71,150

 

Average yield on loans held for investment(6)
 
6.50%


6.41%

 
6.28%

 
6.18%

 
6.25%


9
bps
 
25
bps
 
6.34%

 
6.26%

 
8
bps
Auto loan originations
 
$
6,542

 
$
6,804

 
$
6,529

 
$
5,844

 
$
4,977

 
(4)%

 
31%

 
$
25,719

 
$
21,185

 
21%

Period-end deposits
 
181,917

 
178,793

 
176,340

 
177,803

 
172,702

 
2

 
5

 
181,917

 
172,702

 
5

Average deposits
 
180,019

 
177,402

 
176,808

 
174,254

 
171,521

 
1

 
5

 
177,129

 
170,757

 
4

Average deposit interest rate
 
0.57%


0.56%

 
0.55%

 
0.54%

 
0.54%


1
bps
 
3
bps
 
0.56%

 
0.56%

 

Net charge-off rate
 
1.45


1.26

 
0.83

 
1.04

 
1.32


19

 
13

 
1.15

 
1.03

 
12
bps
30+ day performing delinquency rate
 
4.10

 
3.72

 
3.56

 
3.19

 
4.05

 
38

 
5

 
4.10

 
4.05

 
5

30+ day delinquency rate
 
4.67

 
4.26

 
4.07

 
3.67

 
4.67

 
41

 

 
4.67

 
4.67

 

Nonperforming loan rate(1)
 
0.72

 
0.71

 
0.69

 
0.66

 
0.79

 
1

 
(7
)
 
0.72

 
0.79

 
(7
)
Nonperforming asset rate(2)
 
1.09

 
0.98

 
0.96

 
0.95

 
1.10

 
11

 
(1
)
 
1.09

 
1.10

 
(1
)
Auto—At origination FICO scores:(10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Greater than 660
 
52
%
 
51
%
 
51
%
 
51
%
 
51
%
 
1%

 
1%

 
52
%
 
51
%
 
1%

621 - 660
 
17

 
17

 
17

 
17

 
17

 

 

 
17

 
17

 

620 or below
 
31

 
32

 
32

 
32

 
32

 
(1
)
 
(1
)
 
31

 
32

 
(1
)
Total
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 
 
100
%
 
100
%
 
 

17



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Commercial Banking Business
 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Commercial Banking
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
565

 
$
555

 
$
559

 
$
537

 
$
484

 
2%


17%

 
$
2,216

 
$
1,865

 
19%

Non-interest income
 
175

 
156

 
129

 
118

 
142

 
12

 
23

 
578

 
487

 
19

Total net revenue(5)
 
740

 
711

 
688

 
655

 
626

 
4

 
18

 
2,794

 
2,352

 
19

Provision (benefit) for credit losses
 
66

 
61

 
128

 
228

 
118

 
8

 
(44
)
 
483

 
302

 
60

Non-interest expense
 
393

 
349

 
343

 
322

 
342

 
13

 
15

 
1,407

 
1,156

 
22

Income (loss) from continuing operations before income taxes
 
281

 
301

 
217

 
105

 
166

 
(7
)
 
69

 
904

 
894

 
1

Income tax provision (benefit)
 
102

 
110

 
79

 
38

 
60

 
(7
)
 
70

 
329

 
324

 
2

Income (loss) from continuing operations, net of tax
 
$
179

 
$
191

 
$
138

 
$
67

 
$
106

 
(6
)

69

 
$
575

 
$
570

 
1

Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans held for investment
 
$
66,916

 
$
66,457

 
$
66,202

 
$
64,241

 
$
63,266

 
1


6

 
$
66,916

 
$
63,266

 
6

Average loans held for investment
 
66,515

 
66,034

 
64,938

 
63,375

 
57,379

 
1

 
16

 
65,221

 
52,769

 
24

Average yield on loans held for investment(5)(6)
 
3.55%


3.50%

 
3.45%

 
3.38%

 
3.18%


5
bps

37
bps
 
3.47%

 
3.21%

 
26
bps
Period-end deposits
 
$
33,866

 
$
33,611

 
$
34,281

 
$
33,383

 
$
34,257

 
1%


(1)%

 
$
33,866

 
$
34,257

 
(1)%

Average deposits
 
34,029

 
33,498

 
33,764

 
34,076

 
33,797

 
2

 
1

 
33,841

 
33,058

 
2

Average deposit interest rate
 
0.30%


0.30%

 
0.27%

 
0.27%

 
0.26%




4
bps
 
0.28%

 
0.25%

 
3
bps
Net charge-off rate
 
0.47


0.66

 
0.37

 
0.29

 
0.03


(19
)bps

44

 
0.45

 
0.09

 
36

Nonperforming loan rate(1)(11)
 
1.53

 
1.50

 
1.59

 
1.63

 
0.87

 
3

 
66

 
1.53

 
0.87

 
66

Nonperforming asset rate(2)(11)
 
1.54

 
1.51

 
1.60

 
1.64

 
0.87

 
3

 
67

 
1.54

 
0.87

 
67

Risk category:(11)(12)
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Noncriticized
 
$
62,828

 
$
62,336

 
$
61,926

 
$
59,663

 
$
59,743

 
1%


5%

 
$
62,828

 
$
59,743

 
5%

Criticized performing
 
2,453

 
2,473

 
2,456

 
2,595

 
2,015

 
(1
)
 
22

 
2,453

 
2,015

 
22

Criticized nonperforming
 
1,022

 
994

 
1,050

 
1,050

 
550

 
3

 
86

 
1,022

 
550

 
86

PCI loans(11)
 
613

 
654

 
770

 
933

 
958

 
(6
)
 
(36
)
 
613

 
958

 
(36
)
Total commercial loans
 
$
66,916

 
$
66,457

 
$
66,202

 
$
64,241

 
$
63,266

 
1


6

 
$
66,916

 
$
63,266

 
6

Risk category as a percentage of period-end loans held for investment:(11)(12)
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Noncriticized
 
93.9%


93.8%

 
93.5%

 
92.9%

 
94.4%


10
bps

(50
)bps
 
93.9%

 
94.4%

 
(50
)bps
Criticized performing
 
3.7

 
3.7

 
3.7

 
4.0

 
3.2

 

 
50

 
3.7

 
3.2

 
50

Criticized nonperforming
 
1.5

 
1.5

 
1.6

 
1.6

 
0.9

 

 
60

 
1.5

 
0.9

 
60

PCI loans(11)
 
0.9

 
1.0

 
1.2

 
1.5

 
1.5

 
(10
)
 
(60
)
 
0.9

 
1.5

 
(60
)
Total commercial loans
 
100.0
%

100.0
%
 
100.0
%
 
100.0
%
 
100.0
%




 
100.0
%
 
100.0
%
 


18



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Financial & Statistical Summary—Other and Total
 
 
 
 
 
 
 
 
 
 
 
 
2016 Q4 vs.
 
Year Ended December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
2016 vs.
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q3
 
Q4
 
2016
 
2015
 
2015
Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income (expense)
 
$
31

 
$
46

 
$
50

 
$
66

 
$
47

 
(33)%


(34)%

 
$
193

 
$
53

 
**

Non-interest income
 
(71
)
 
2

 
(2
)
 
8

 
7

 
**

 
**

 
(63
)
 
(39
)
 
62
 %
Total net revenue (loss)(5)
 
(40
)
 
48

 
48

 
74

 
54

 
**

 
**

 
130

 
14

 
**

Provision (benefit) for credit losses
 
(1
)
 
(1
)
 
(1
)
 
(2
)
 

 

 
**

 
(5
)
 
(2
)
 
150

Non-interest expense
 
104

 
94

 
63

 
48

 
60

 
11

 
73

 
309

 
312

 
(1
)
Income (loss) from continuing operations before income taxes
 
(143
)
 
(45
)
 
(14
)
 
28

 
(6
)
 
**

 
**

 
(174
)
 
(296
)
 
(41
)
Income tax provision (benefit)
 
(125
)
 
(71
)
 
(78
)
 
(65
)
 
(51
)
 
76

 
145

 
(339
)
 
(350
)
 
(3
)
Income (loss) from continuing operations, net of tax
 
$
(18
)
 
$
26

 
$
64

 
$
93

 
$
45

 
**


**

 
$
165

 
$
54

 
**

Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans held for investment
 
$
64

 
$
76

 
$
82

 
$
82

 
$
88

 
(16
)

(27
)
 
$
64

 
$
88

 
(27
)
Average loans held for investment
 
62

 
66

 
71

 
78

 
82

 
(6
)
 
(24
)
 
69

 
91

 
(24
)
Period-end deposits
 
20,985

 
13,577

 
10,438

 
10,593

 
10,762

 
55

 
95

 
20,985

 
10,762

 
95

Average deposits
 
18,156

 
11,351

 
10,574

 
10,850

 
10,581

 
60

 
72

 
12,744

 
7,174

 
78

Total
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Net interest income
 
$
5,447

 
$
5,277

 
$
5,093

 
$
5,056

 
$
4,961

 
3%


10%

 
$
20,873

 
$
18,834

 
11%

Non-interest income
 
1,119

 
1,184

 
1,161

 
1,164

 
1,233

 
(5
)
 
(9
)
 
4,628

 
4,579

 
1

Total net revenue
 
6,566

 
6,461

 
6,254

 
6,220

 
6,194

 
2

 
6

 
25,501

 
23,413

 
9

Provision (benefit) for credit losses
 
1,752

 
1,588

 
1,592

 
1,527

 
1,380

 
10

 
27

 
6,459

 
4,536

 
42

Non-interest expense
 
3,679

 
3,361

 
3,295

 
3,223

 
3,480

 
9

 
6

 
13,558

 
12,996

 
4

Income (loss) from continuing operations before income taxes
 
1,135

 
1,512

 
1,367

 
1,470

 
1,334

 
(25
)
 
(15
)
 
5,484

 
5,881

 
(7
)
Income tax provision (benefit)
 
342

 
496

 
424

 
452

 
426

 
(31
)
 
(20
)
 
1,714

 
1,869

 
(8
)
Income (loss) from continuing operations, net of tax
 
$
793

 
$
1,016

 
$
943

 
$
1,018

 
$
908

 
(22
)

(13
)
 
$
3,770

 
$
4,012

 
(6
)
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 
Period-end loans held for investment
 
$
245,586

 
$
238,019

 
$
234,603

 
$
227,613

 
$
229,851

 
3


7

 
$
245,586

 
$
229,851

 
7

Average loans held for investment
 
240,027

 
235,843

 
230,379

 
226,736

 
220,052

 
2

 
9

 
233,272

 
210,745

 
11

Period-end deposits
 
236,768

 
225,981

 
221,059

 
221,779

 
217,721

 
5

 
9

 
236,768

 
217,721

 
9

Average deposits
 
232,204

 
222,251

 
221,146

 
219,180

 
215,899

 
4

 
8

 
223,714

 
210,989

 
6


19



CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)

(1) 
Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.
(2) 
Nonperforming assets consist of nonperforming loans, 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. Prior to Q4 2016, the nonperforming asset rate for our Consumer Banking business excluded the impact of REOs related to our acquired home loan portfolio which, if included, would increase the nonperforming asset rate by approximately 10 basis points in each of the prior periods presented.
(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) 
Average yield on loans held for investment is 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.
(7) 
Total net revenue margin is 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.
(8) 
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.
(9) 
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.
(10)
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.
(11) 
The loans held for investment acquired in the HFS acquisition included $518 million, $556 million, $667 million, $825 million and $835 million of PCI loans as of December 31, 2016, 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
 
2016
 
2015
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
Nonperforming loan rate
 
1.56%

 
1.53%

 
1.63%

 
1.69%

 
0.93%

Nonperforming asset rate
 
1.57

 
1.54

 
1.64

 
1.70

 
0.93

Risk category:
 
 
 
 
 
 
 
 
 
 
Noncriticized
 
$
63,078

 
$
62,575

 
$
62,058

 
$
59,729

 
$
59,743

Criticized performing
 
2,700

 
2,766

 
2,961

 
3,321

 
2,814

Criticized nonperforming
 
1,042

 
1,018

 
1,080

 
1,083

 
586

Risk category as a percentage of period-end loans held for investment:
 
 
 
 
 
 
 
 
 
 
Noncriticized
 
94.3
%
 
94.2%

 
93.7%

 
93.0%

 
94.4%

Criticized performing
 
4.0

 
4.2

 
4.5

 
5.2

 
4.5

Criticized nonperforming
 
1.6

 
1.5

 
1.6

 
1.7

 
0.9

(12) 
Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.
**  
Not meaningful.

20



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)
 
December 31,
2016
 
September 30,
2016
 
June 30,
2016
 
March 31,
2016
 
December 31,
2015
Regulatory Capital Metrics
 
 
 
 
 
 
 
 
 
 
Common equity excluding AOCI
 
$
44,103

 
$
44,214

 
$
44,572

 
$
44,452

 
$
44,606

Adjustments:
 
 
 
 
 
 
 
 
 
 
AOCI(2)(3)
 
(674
)
 
199

 
332

 
117

 
(254
)
Goodwill(4)
 
(14,307
)
 
(14,288
)
 
(14,296
)
 
(14,301
)
 
(14,296
)
Intangible assets(3)(4)
 
(384
)
 
(435
)
 
(483
)
 
(532
)
 
(393
)
Other
 
65

 
(498
)
 
(639
)
 
(505
)
 
(119
)
Common equity Tier 1 capital
 
$
28,803

 
$
29,192

 
$
29,486

 
$
29,231

 
$
29,544

Tier 1 capital
 
$
33,162

 
$
33,069

 
$
32,780

 
$
32,525

 
$
32,838

Total capital(5)
 
40,816

 
40,564

 
38,767

 
38,399

 
38,838

Risk-weighted assets
 
285,654

 
275,198

 
269,667

 
262,368

 
265,739

Adjusted average assets(6)
 
335,835

 
328,627

 
319,968

 
317,403

 
309,037

Capital Ratios
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital(7)
 
10.1
%
 
10.6%

 
10.9%

 
11.1%

 
11.1%

Tier 1 capital(8)
 
11.6

 
12.0

 
12.2

 
12.4

 
12.4

Total capital(9)
 
14.3

 
14.7

 
14.4

 
14.6

 
14.6

Tier 1 leverage(6)
 
9.9

 
10.1

 
10.2

 
10.2

 
10.6

Tangible common equity (“TCE”)(10)
 
8.1

 
8.8

 
9.0

 
9.1

 
8.9


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 selected adjusted results, 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. We consider these metrics key financial performance measures. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies. The tables below present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

21



 
 
2016
 
2016
 
2016
 
Year Ended December 31,
 
 
Q4
 
Q3
 
Q2
 
2016
(Dollars in millions)
 
Reported Results
 
Adjustments(11)
 
Adjusted Results
 
Reported Results
 
Adjustments(11)
 
Adjusted Results
 
Reported Results
 
Adjustments(11)
 
Adjusted Results
 
Reported Results
 
Adjustments(11)
 
Adjusted Results
Selected income statement data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
5,447

 
$
13

 
$
5,460

 
$
5,277

 
$
34

 
$
5,311

 
$
5,093

 
$
7

 
$
5,100

 
$
20,873

 
$
54

 
$
20,927

Non-interest income
 
1,119

 
14

 
1,133

 
1,184

 
13

 
1,197

 
1,161

 
8

 
1,169

 
4,628

 
35

 
4,663

Total net revenue
 
6,566

 
27

 
6,593

 
6,461

 
47

 
6,508

 
6,254

 
15

 
6,269

 
25,501

 
89

 
25,590

Non-interest expense
 
3,679

 
(45
)
 
3,634

 
3,361

 
(16
)
 
3,345

 
3,295

 
(15
)
 
3,280

 
13,558

 
(76
)
 
13,482

Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
 
56.03%

 
(91
)bps
 
55.12%

 
52.02%

 
(62
)bps
 
51.40%

 
52.69%

 
(37
)bps
 
52.32%

 
53.17%

 
(49
)bps
 
52.68%

 
 
2016
 
2016
 
2016
 
2016
 
2015
(Dollars in millions)
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
Tangible Common Equity (Period-End)
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
$
47,514

 
$
48,213

 
$
48,108

 
$
47,707

 
$
47,284

Goodwill and intangible assets(4)
 
(15,420
)
 
(15,475
)
 
(15,553
)
 
(15,629
)
 
(15,701
)
Noncumulative perpetual preferred stock(12)
 
(4,360
)
 
(3,877
)
 
(3,294
)
 
(3,296
)
 
(3,294
)
Tangible common equity
 
$
27,734

 
$
28,861

 
$
29,261

 
$
28,782

 
$
28,289

Tangible Common Equity (Average)
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
$
47,972

 
$
49,033

 
$
48,934

 
$
49,078

 
$
48,712

Goodwill and intangible assets(4)
 
(15,455
)
 
(15,507
)
 
(15,585
)
 
(15,654
)
 
(15,316
)
Noncumulative perpetual preferred stock(12)
 
(4,051
)
 
(3,719
)
 
(3,294
)
 
(3,296
)
 
(3,294
)
Tangible common equity
 
$
28,466

 
$
29,807

 
$
30,055

 
$
30,128

 
$
30,102

Tangible Assets (Period-End)
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
357,033

 
$
345,061

 
$
339,117

 
$
330,346

 
$
334,048

Goodwill and intangible assets(4)
 
(15,420
)
 
(15,475
)
 
(15,553
)
 
(15,629
)
 
(15,701
)
Tangible assets
 
$
341,613

 
$
329,586

 
$
323,564

 
$
314,717

 
$
318,347

Tangible Assets (Average)
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
350,225

 
$
343,153

 
$
334,479

 
$
331,919

 
$
323,354

Goodwill and intangible assets(4)
 
(15,455
)
 
(15,507
)
 
(15,585
)
 
(15,654
)
 
(15,316
)
Tangible assets
 
$
334,770

 
$
327,646

 
$
318,894

 
$
316,265

 
$
308,038

_________
(1) 
Regulatory capital metrics and capital ratios as of December 31, 2016 are preliminary and therefore subject to change.
(2) 
Amounts presented are net of tax.
(3) 
Amounts based on transition provisions for regulatory capital deductions and adjustments of 40% for 2015 and 60% for 2016.
(4) 
Includes impact of related deferred taxes.
(5) 
Total capital equals the sum of Tier 1 capital and Tier 2 capital.
(6) 
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.
(7) 
Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.

22



(8) 
Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(9) 
Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.
(10) 
TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
(11) 
In Q4 2016, we recorded charges totaling $72 million consisting of a build in the U.K. Payment Protection Insurance customer refund reserve (“U.K. PPI Reserve”) of $44 million and an impairment associated with certain acquired intangible and software assets of $28 million. In Q3 2016, we recorded a build in the 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.
(12)  
Includes related surplus.

23