MCLEAN, Va., Jan. 21, 2020 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2019 of $1.2 billion, or $2.25 per diluted common share, compared with net income of $1.3 billion, or $2.69 per diluted common share in the third quarter of 2019, and with net income of $1.3 billion, or $2.48 per diluted common share in the fourth quarter of 2018. Excluding adjusting items, net income for the fourth quarter of 2019 was $2.49 per diluted common share(1).

"In the fourth quarter and for the full year 2019, Capital One continued to post solid results as we invest to grow and to drive our digital transformation," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "As the many benefits from our technology transformation continue and increase, we are well positioned to succeed in a rapidly changing marketplace."

Adjusting items in the fourth quarter of 2019, which are excluded from diluted earnings per share (EPS), efficiency ratio and operating efficiency ratio metrics (see Table 15 in our Financial Supplement for additional information):


Pre-Tax

Diluted EPS

(Dollars in millions, except per share data)

Impact

Impact

Initial allowance build on acquired Walmart portfolio

$

84


$

0.13


Walmart launch and related integration expenses

48


0.08


Cybersecurity Incident expenses, net of insurance

16


0.03


All comparisons below are for the fourth quarter of 2019 compared with the third quarter of 2019 unless otherwise noted.

Fourth Quarter 2019 Income Statement Summary:

  • Total net revenue increased 7 percent to $7.4 billion.
  • Total non-interest expense increased 7 percent to $4.2 billion:
    • 42 percent increase in marketing.
    • 2 percent increase in operating expenses.
  • Pre-provision earnings increased 6 percent to $3.3 billion(2).
  • Provision for credit losses increased 31 percent to $1.8 billion:
    • Net charge-offs of $1.7 billion.
    • $135 million reserve build.
  • Net interest margin of 6.95 percent, increased 22 basis points.
  • Efficiency ratio of 56.03 percent.
    • Efficiency ratio excluding adjusting items of 55.16 percent(1).
  • Operating efficiency ratio of 46.47 percent.
    • Operating efficiency ratio excluding adjusting items of 45.60 percent(1).

Fourth Quarter 2019 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.2 percent at December 31, 2019.
  • Period-end loans held for investment in the quarter increased $16.5 billion, or 7 percent, to $265.8 billion.
    • Credit Card period-end loans increased $14.6 billion, or 13 percent, to $128.2 billion.
      • Domestic Card period-end loans increased $13.9 billion, or 13 percent, to $118.6 billion.
    • Consumer Banking period-end loans increased $1.1 billion, or 2 percent, to $63.1 billion.
      • Auto period-end loans increased $1.1 billion, or 2 percent, to $60.4 billion.
    • Commercial Banking period-end loans increased $849 million, or 1 percent, to $74.5 billion.
  • Average loans held for investment in the quarter increased $12.7 billion, or 5 percent, to $258.9 billion.
    • Credit Card average loans increased $9.7 billion, or 9 percent, to $122.1 billion.
      • Domestic Card average loans increased $9.5 billion, or 9 percent, to $113.0 billion.
    • Consumer Banking average loans increased $1.3 billion, or 2 percent, to $62.6 billion.
      • Auto average loans increased $1.4 billion, or 2 percent, to $59.9 billion.
    • Commercial Banking average loans increased $1.7 billion, or 2 percent, to $74.2 billion.
  • Period-end total deposits increased $5.5 billion, or 2 percent, to $262.7 billion, while average deposits increased $5.0 billion, or 2 percent, to $260.0 billion.
  • Interest-bearing deposits rate paid decreased 14 basis points to 1.41 percent.

All comparisons below are for the full year of 2019 compared with the full year of 2018 unless otherwise noted.

2019 Full Year Income Statement Summary:

  • Total net revenue increased 2 percent to $28.6 billion.
  • Total non-interest expense increased 4 percent to $15.5 billion:
    • 5 percent increase in marketing.
    • 4 percent increase in operating expenses.
  • Pre-provision earnings remained flat at $13.1 billion(2).
  • Provision for credit losses increased 6 percent to $6.2 billion.
  • Efficiency ratio of 54.15 percent.
    • Efficiency ratio excluding adjusting items was 52.67 percent(1).
  • Operating efficiency ratio of 46.20 percent.
    • Operating efficiency ratio excluding adjusting items was 44.76 percent(1).

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 21, 2020 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through February 4, 2020 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2018 and the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $262.7 billion in deposits and $390.4 billion in total assets as of  December 31, 2019. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

(1)

Amounts excluding adjusting items are non-GAAP measures that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance, both in the current period and across periods. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.

(2)

Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period.

 

 

Exhibit 99.2


Capital One Financial Corporation


Financial Supplement(1)(2)


Fourth Quarter 2019


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

9



Table 7:

Loan Information and Performance Statistics

10



Table 8:

Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity

12


Business Segment Results




Table 9:

Financial Summary—Business Segment Results

13



Table 10:

Financial & Statistical Summary—Credit Card Business

14



Table 11:

Financial & Statistical Summary—Consumer Banking Business

16



Table 12:

Financial & Statistical Summary—Commercial Banking Business

17



Table 13:

Financial & Statistical Summary—Other and Total

18


Other




Table 14:

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

19



Table 15:

Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures

20


__________


(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Annual Report on Form 10-K for the period ended December 31, 2019 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 generally accepted accounting principles 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














2019 Q4 vs.


Year Ended December 31,

(Dollars in millions, except per share data and as noted)


2019


2019


2019


2019


2018


2019


2018






2019 vs.


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Income Statement





















Net interest income


$

6,066



$

5,737



$

5,746



$

5,791



$

5,820



6

%


4

%


$

23,340



$

22,875



2

%

Non-interest income


1,361



1,222



1,378



1,292



1,193



11



14



5,253



5,201



1


Total net revenue(1)


7,427



6,959



7,124



7,083



7,013



7



6



28,593



28,076



2


Provision for credit losses


1,818



1,383



1,342



1,693



1,638



31



11



6,236



5,856



6


Non-interest expense:





















Marketing


710



501



546



517



831



42



(15)



2,274



2,174



5


Operating expense


3,451



3,371



3,233



3,154



3,301



2



5



13,209



12,728



4


Total non-interest expense


4,161



3,872



3,779



3,671



4,132



7



1



15,483



14,902



4


Income from continuing operations before income taxes


1,448



1,704



2,003



1,719



1,243



(15)



16



6,874



7,318



(6)


Income tax provision (benefit)


270



375



387



309



(21)



(28)



**



1,341



1,293



4


Income from continuing operations, net of tax


1,178



1,329



1,616



1,410



1,264



(11)



(7)



5,533



6,025



(8)


Income (loss) from discontinued operations, net of tax


(2)



4



9



2



(3)



**



(33)



13



(10)



**


Net income


1,176



1,333



1,625



1,412



1,261



(12)



(7)



5,546



6,015



(8)


Dividends and undistributed earnings allocated to participating securities(2)


(7)



(10)



(12)



(12)



(9)



(30)



(22)



(41)



(40)



3


Preferred stock dividends


(97)



(53)



(80)



(52)



(80)



83



21



(282)



(265)



6


Issuance cost for redeemed preferred stock(3)


(31)











**



**



(31)





**


Net income available to common stockholders


$

1,041



$

1,270



$

1,533



$

1,348



$

1,172



(18)



(11)



$

5,192



$

5,710



(9)


Common Share Statistics





















Basic earnings per common share:(2)





















Net income from continuing operations


$

2.26



$

2.70



$

3.24



$

2.87



$

2.50



(16)

%


(10)

%


$

11.07



$

11.92



(7)

%

Income (loss) from discontinued operations




0.01



0.02





(0.01)



**



**



0.03



(0.02)



**


Net income per basic common share


$

2.26



$

2.71



$

3.26



$

2.87



$

2.49



(17)



(9)



$

11.10



$

11.90



(7)


Diluted earnings per common share:(2)





















Net income from continuing operations


$

2.25



$

2.68



$

3.22



$

2.86



$

2.49



(16)



(10)



$

11.02



$

11.84



(7)


Income (loss) from discontinued operations




0.01



0.02





(0.01)



**



**



0.03



(0.02)



**


Net income per diluted common share


$

2.25



$

2.69



$

3.24



$

2.86



$

2.48



(16)



(9)



$

11.05



$

11.82



(7)


Weighted-average common shares outstanding (in millions):





















Basic


460.9



469.5



470.8



469.4



470.0



(2)



(2)



467.6



479.9



(3)


Diluted


463.4



471.8



473.0



471.6



472.7



(2)



(2)



469.9



483.1



(3)


Common shares outstanding (period-end, in millions)


456.6



465.7



470.3



469.6



467.7



(2)



(2)



456.6



467.7



(2)


Dividends declared and paid per common share


$

0.40



$

0.40



$

0.40



$

0.40



$

0.40







$

1.60



$

1.60




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


83.72



80.46



77.65



72.86



69.20



4



21



83.72



69.20



21













































2019 Q4 vs.


Year Ended December 31,

(Dollars in millions)


2019


2019


2019


2019


2018


2019


2018






2019 vs.


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Balance Sheet (Period-End)





















Loans held for investment


$

265,809



$

249,355



$

244,460



$

240,273



$

245,899



7

%


8

%


$

265,809



$

245,899



8

%

Interest-earning assets


355,202



344,643



339,160



340,071



341,293



3



4



355,202



341,293



4


Total assets


390,365



378,810



373,619



373,191



372,538



3



5



390,365



372,538



5


Interest-bearing deposits


239,209



234,084



231,161



230,199



226,281



2



6



239,209



226,281



6


Total deposits


262,697



257,148



254,535



255,107



249,764



2



5



262,697



249,764



5


Borrowings


55,697



50,149



49,233



50,358



58,905



11



(5)



55,697



58,905



(5)


Common equity


53,157



52,412



51,406



49,120



47,307



1



12



53,157



47,307



12


Total stockholders' equity


58,011



58,235



55,767



53,481



51,668





12



58,011



51,668



12


Balance Sheet (Average Balances)





















Loans held for investment


$

258,870



$

246,147



$

242,653



$

241,959



$

241,371



5

%


7

%


$

247,450



$

242,118



2

%

Interest-earning assets


349,150



340,949



338,026



337,793



334,714



2



4



341,510



332,738



3


Total assets


383,162



374,905



371,095



370,394



365,243



2



5



374,924



363,036



3


Interest-bearing deposits


236,250



232,063



230,452



227,572



222,827



2



6



231,609



221,760



4


Total deposits


260,040



255,082



253,634



251,410



247,663



2



5



255,065



247,117



3


Borrowings


51,442



49,413



49,982



53,055



53,994



4



(5)



50,965



53,144



(4)


Common equity


52,641



52,566



50,209



48,359



46,753





13



50,960



45,831



11


Total stockholders' equity


58,148



57,245



54,570



52,720



51,114



2



14



55,690



50,192



11


               

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated














2019 Q4 vs.


Year Ended December 31,

(Dollars in millions, except as noted)


2019


2019


2019


2019


2018


2019


2018






2019 vs.


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Performance Metrics





















Net interest income growth (period over period)


6

%




(1)

%




1

%


**



**



2

%


2

%


**


Non-interest income growth (period over period)


11



(11)

%


7



8

%


1



**



**



1



9



**


Total net revenue growth (period over period)


7



(2)



1



1



1



**



**



2



3



**


Total net revenue margin(5)


8.51



8.16



8.43



8.39



8.38



35

bps


13

bps


8.37



8.44



(7)

bps

Net interest margin(6)


6.95



6.73



6.80



6.86



6.96



22



(1)



6.83



6.87



(4)


Return on average assets


1.23



1.42



1.74



1.52



1.38



(19)



(15)



1.48



1.66



(18)


Return on average tangible assets(7)


1.28



1.48



1.82



1.59



1.44



(20)



(16)



1.54



1.73



(19)


Return on average common equity(8)


7.93



9.63



12.14



11.13



10.05



(170)



(212)



10.16



12.48



(232)


Return on average tangible common equity(9)


11.07



13.45



17.26



16.11



14.78



(238)



(371)



14.37



18.56



(419)


Non-interest expense as a percentage of average loans held for investment


6.43



6.29



6.23



6.07



6.85



14



(42)



6.26



6.15



11


Efficiency ratio(10)


56.03



55.64



53.05



51.83



58.92



39



(289)



54.15



53.08



107


Operating efficiency ratio(11)


46.47



48.44



45.38



44.53



47.07



(197)



(60)



46.20



45.33



87


Effective income tax rate for continuing operations


18.6



22.0



19.3



18.0



(1.7)



(340)



**



19.5



17.7



180


Employees (period-end, in thousands)


51.9



52.1



50.7



48.8



47.6





9

%


51.9



47.6



9

%

Credit Quality Metrics





















Allowance for loan and lease losses


$

7,208



$

7,037



$

7,133



$

7,313



$

7,220



2

%




$

7,208



$

7,220




Allowance as a percentage of loans held for investment


2.71

%


2.82

%


2.92

%


3.04

%


2.94

%


(11)

bps


(23)

bps


2.71

%


2.94

%


(23)

bps

Net charge-offs


$

1,683



$

1,462



$

1,508



$

1,599



$

1,610



15

%


5

%


$

6,252



$

6,112



2

%

Net charge-off rate(12)


2.60

%


2.38

%


2.48

%


2.64

%


2.67

%


22

bps


(7)

bps


2.53

%


2.52

%


1

bps

30+ day performing delinquency rate


3.51



3.28



3.15



3.23



3.62



23



(11)



3.51



3.62



(11)


30+ day delinquency rate


3.74



3.51



3.35



3.40



3.84



23



(10)



3.74



3.84



(10)


Capital Ratios(13)





















Common equity Tier 1 capital


12.2

%


12.5

%


12.3

%


11.9

%


11.2

%


(30)

bps


100

bps


12.2

%


11.2

%


100

bps

Tier 1 capital


13.7



14.4



13.8



13.4



12.7



(70)



100



13.7



12.7



100


Total capital


16.1



16.8



16.2



15.8



15.1



(70)



100



16.1



15.1



100


Tier 1 leverage


11.7



11.9



11.4



11.0



10.7



(20)



100



11.7



10.7



100


Tangible common equity ("TCE")(14)


10.2



10.3



10.2



9.6



9.1



(10)



110



10.2



9.1



110


 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income














2019 Q4 vs.


Year Ended December 31,



2019


2019


2019


2019


2018


2019


2018






2019 vs.

(Dollars in millions, except per share data and as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Interest income:





















Loans, including loans held for sale


$

6,682



$

6,429



$

6,383



$

6,368



$

6,358



4

%


5

%


$

25,862



$

24,728



5

%

Investment securities


544



583



629



655



627



(7)



(13)



2,411



2,211



9


Other


44



63



64



69



63



(30)



(30)



240



237



1


Total interest income


7,270



7,075



7,076



7,092



7,048



3



3



28,513



27,176



5


Interest expense:





















Deposits


832



901



870



817



756



(8)



10



3,420



2,598



32


Securitized debt obligations


118



123



139



143



138



(4)



(14)



523



496



5


Senior and subordinated notes


236



299



310



314



297



(21)



(21)



1,159



1,125



3


Other borrowings


18



15



11



27



37



20



(51)



71



82



(13)


Total interest expense


1,204



1,338



1,330



1,301



1,228



(10)



(2)



5,173



4,301



20


Net interest income


6,066



5,737



5,746



5,791



5,820



6



4



23,340



22,875



2


Provision for credit losses


1,818



1,383



1,342



1,693



1,638



31



11



6,236



5,856



6


Net interest income after provision for credit losses


4,248



4,354



4,404



4,098



4,182



(2)



2



17,104



17,019




Non-interest income:





















Interchange fees, net


811



790



820



758



743



3



9



3,179



2,823



13


Service charges and other customer-related fees


342



283



352



353



352



21



(3)



1,330



1,585



(16)


Net securities gains (losses)


(18)



5



15



24



(20)



**



(10)



26



(209)



**


Other


226



144



191



157



118



57



92



718



1,002



(28)


Total non-interest income


1,361



1,222



1,378



1,292



1,193



11



14



5,253



5,201



1


Non-interest expense:





















Salaries and associate benefits


1,652



1,605



1,558



1,573



1,345



3



23



6,388



5,727



12


Occupancy and equipment


565



519



521



493



610



9



(7)



2,098



2,118



(1)


Marketing


710



501



546



517



831



42



(15)



2,274



2,174



5


Professional services


318



314



314



291



426



1



(25)



1,237



1,145



8


Communications and data processing


346



312



329



303



326



11



6



1,290



1,260



2


Amortization of intangibles


28



25



29



30



43



12



(35)



112



174



(36)


Other(15)


542



596



482



464



551



(9)



(2)



2,084



2,304



(10)


Total non-interest expense


4,161



3,872



3,779



3,671



4,132



7



1



15,483



14,902



4


Income from continuing operations before income taxes


1,448



1,704



2,003



1,719



1,243



(15)



16



6,874



7,318



(6)


Income tax provision (benefit)


270



375



387



309



(21)



(28)



     **



1,341



1,293



4


Income from continuing operations, net of tax


1,178



1,329



1,616



1,410



1,264



(11)



(7)



5,533



6,025



(8)


Income (loss) from discontinued operations, net of tax


(2)



4



9



2



(3)



     **



(33)



13



(10)



     **

Net income


1,176



1,333



1,625



1,412



1,261



(12)



(7)



5,546



6,015



(8)


Dividends and undistributed earnings allocated to participating securities(2)


(7)



(10)



(12)



(12)



(9)



(30)



(22)



(41)



(40)



3


Preferred stock dividends


(97)



(53)



(80)



(52)



(80)



83



21



(282)



(265)



6


Issuance cost for redeemed preferred stock(3)


(31)











**



**



(31)





**


Net income available to common stockholders


$

1,041



$

1,270



$

1,533



$

1,348



$

1,172



(18)



(11)



$

5,192



$

5,710



(9)



































2019 Q4 vs.


Year Ended December 31,



2019


2019


2019


2019


2018


2019


2018






2019 vs.

(Dollars in millions, except per share data and as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Basic earnings per common share:(2)





















Net income from continuing operations


$

2.26



$

2.70



$

3.24



$

2.87



$

2.50



(16)

%


(10)

%


$

11.07



$

11.92



(7)

%

Income (loss) from discontinued operations




0.01



0.02





(0.01)



     **



     **



0.03



(0.02)



     **


Net income per basic common share


$

2.26



$

2.71



$

3.26



$

2.87



$

2.49



(17)



(9)



$

11.10



$

11.90



(7)


Diluted earnings per common share:(2)





















Net income from continuing operations


$

2.25



$

2.68



$

3.22



$

2.86



$

2.49



(16)



(10)



$

11.02



$

11.84



(7)


Income (loss) from discontinued operations




0.01



0.02





(0.01)



     **



     **



0.03



(0.02)



     **


Net income per diluted common share


$

2.25



$

2.69



$

3.24



$

2.86



$

2.48



(16)



(9)



$

11.05



$

11.82



(7)


Weighted-average common shares outstanding (in millions):





















Basic common shares


460.9



469.5



470.8



469.4



470.0



(2)



(2)



467.6



479.9



(3)


Diluted common shares


463.4



471.8



473.0



471.6



472.7



(2)



(2)



469.9



483.1



(3)


 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets














2019 Q4 vs.



2019


2019


2019


2019


2018


2019


2018

(Dollars in millions)


Q4


Q3


Q2


Q1


Q4


Q3


Q4

Assets:















Cash and cash equivalents:















Cash and due from banks


$

4,129



$

4,452



$

5,184



$

4,572



$

4,768



(7)

%


(13)

%

Interest-bearing deposits and other short-term investments


9,278



12,668



9,927



12,897



8,418



(27)



10


Total cash and cash equivalents


13,407



17,120



15,111



17,469



13,186



(22)



2


Restricted cash for securitization investors


342



417



710



1,969



303



(18)



13


Investment securities:















Securities available for sale


79,213



46,168



45,658



45,888



46,150



72



72


Securities held to maturity




33,894



35,475



36,503



36,771



(100)



(100)


Total investment securities


79,213



80,062



81,133



82,391



82,921



(1)



(4)


Loans held for investment:















Unsecuritized loans held for investment


231,992



215,892



211,556



208,591



211,702



7



10


Loans held in consolidated trusts


33,817



33,463



32,904



31,682



34,197



1



(1)


Total loans held for investment


265,809



249,355



244,460



240,273



245,899



7



8


Allowance for loan and lease losses


(7,208)



(7,037)



(7,133)



(7,313)



(7,220)



2




Net loans held for investment


258,601



242,318



237,327



232,960



238,679



7



8


Loans held for sale


400



1,245



1,829



905



1,192



(68)



(66)


Premises and equipment, net


4,378



4,311



4,243



4,205



4,191



2



4


Interest receivable


1,758



1,627



1,544



1,615



1,614



8



9


Goodwill


14,653



14,624



14,545



14,546



14,544





1


Other assets


17,613



17,086



17,177



17,131



15,908



3



11


Total assets


$

390,365



$

378,810



$

373,619



$

373,191



$

372,538



3



5





























2019 Q4 vs.



2019


2019


2019


2019


2018


2019


2018

(Dollars in millions)


Q4


Q3


Q2


Q1


Q4


Q3


Q4

Liabilities:















Interest payable


$

439



$

370



$

437



$

382



$

458



19

%


(4)

%

Deposits:















Non-interest-bearing deposits


23,488



23,064



23,374



24,908



23,483



2




Interest-bearing deposits


239,209



234,084



231,161



230,199



226,281



2



6


Total deposits


262,697



257,148



254,535



255,107



249,764



2



5


Securitized debt obligations


17,808



18,910



16,959



19,273



18,307



(6)



(3)


Other debt:















Federal funds purchased and securities loaned or sold under agreements to repurchase


314



464



359



335



352



(32)



(11)


Senior and subordinated notes


30,472



30,682



31,822



30,645



30,826



(1)



(1)


Other borrowings


7,103



93



93



105



9,420



**



(25)


Total other debt


37,889



31,239



32,274



31,085



40,598



21



(7)


Other liabilities


13,521



12,908



13,647



13,863



11,743



5



15


Total liabilities


332,354



320,575



317,852



319,710



320,870



4



4

















Stockholders' equity:















Preferred stock


0



0



0



0



0






Common stock


7



7



7



7



7






Additional paid-in capital, net


32,980



33,826



32,262



32,160



32,040



(3)



3


Retained earnings


40,340



39,476



38,386



37,030



35,875



2



12


Accumulated other comprehensive income (loss)


1,156



453



170



(660)



(1,263)



155



**


Treasury stock, at cost


(16,472)



(15,527)



(15,058)



(15,056)



(14,991)



6



10


Total stockholders' equity


58,011



58,235



55,767



53,481



51,668





12


Total liabilities and stockholders' equity


$

390,365



$

378,810



$

373,619



$

373,191



$

372,538



3



5


 


 

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 $365 million in Q4 2019, $330 million in Q3 2019, $318 million in Q2 2019, $376 million in Q1 2019 and $391 million in Q4 2018 for the estimated uncollectible amount of billed finance charges and fees and related losses.

(2)

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. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(3)

On December 2, 2019, we redeemed all outstanding shares of our fixed rate 6.25% non-cumulative perpetual preferred stock Series C and fixed rate 6.70% non-cumulative perpetual preferred stock Series D. The redemption reduced our net income available to common shareholders by $31 million in Q4 2019.

(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: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(5)

Total net revenue margin is calculated based on total net revenue for the period divided by average interest-earning assets for the period.

(6)

Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

(7)

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: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(8)

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.

(9)

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: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(10)

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: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(11)

Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP 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 2019 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP 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: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

(15)

Includes $16 million of net Cybersecurity Incident expenses in Q4 2019, consisting of $23 million of expenses and $7 million of insurance recoveries; and $22 million of net Cybersecurity Incident expenses in Q3 2019, consisting of $49 million of expenses and $27 million of insurance recoveries.

**

Not meaningful.


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




2019 Q4


2019 Q3


2018 Q4



Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

(Dollars in millions, except as noted)










Interest-earning assets:



















Loans, including loans held for sale


$

259,855



$

6,682



10.29

%


$

247,419



$

6,429



10.39

%


$

242,534



$

6,358



10.49

%

Investment securities


79,104



544



2.75



80,762



583



2.88



83,391



627



3.01


Cash equivalents and other


10,191



44



1.70



12,768



63



2.00



8,789



63



2.87


Total interest-earning assets


$

349,150



$

7,270



8.33



$

340,949



$

7,075



8.30



$

334,714



$

7,048



8.42


Interest-bearing liabilities:



















Interest-bearing deposits


$

236,250



$

832



1.41



$

232,063



$

901



1.55



$

222,827



$

756



1.36


Securitized debt obligations


18,339



118



2.58



16,750



123



2.94



18,312



138



2.99


Senior and subordinated notes


30,597



236



3.08



31,220



299



3.84



30,831



297



3.86


Other borrowings and liabilities


3,789



18



1.95



2,698



15



2.14



6,123



37



2.43


Total interest-bearing liabilities


$

288,975



$

1,204



1.67



$

282,731



$

1,338



1.89



$

278,093



$

1,228



1.77


Net interest income/spread




$

6,066



6.66





$

5,737



6.41





$

5,820



6.65


Impact of non-interest-bearing funding






0.29







0.32







0.31


Net interest margin






6.95

%






6.73

%






6.96

%




Year Ended December 31,



2019


2018



Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

(Dollars in millions, except as noted)







Interest-earning assets:













Loans, including loans held for sale


$

248,552



$

25,862



10.41

%


$

243,371



$

24,728



10.16

%

Investment securities


81,467



2,411



2.96



79,224



2,211



2.79


Cash equivalents and other


11,491



240



2.08



10,143



237



2.33


Total interest-earning assets


$

341,510



$

28,513



8.35



$

332,738



$

27,176



8.17


Interest-bearing liabilities:













Interest-bearing deposits


$

231,609



$

3,420



1.48



$

221,760



$

2,598



1.17


Securitized debt obligations


18,020



523



2.90



19,014



496



2.61


Senior and subordinated notes


30,821



1,159



3.76



31,295



1,125



3.60


Other borrowings and liabilities


3,369



71



2.12



4,028



82



2.04


Total interest-bearing liabilities


$

283,819



$

5,173



1.82



$

276,097



$

4,301



1.56


Net interest income/spread




$

23,340



6.53





$

22,875



6.61


Impact of non-interest-bearing funding






0.30







0.26


Net interest margin






6.83

%






6.87

%


 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics














2019 Q4 vs.


Year Ended December 31,

(Dollars in millions, except as noted)


2019
Q4


2019
Q3


2019
Q2


2019
Q1


2018
Q4


2019
Q3


2018
Q4


2019


2018


2019 vs.
2018

Loans Held for Investment (Period-End)





















Credit card:





















   Domestic credit card


$

118,606



$

104,664



$

102,959



$

101,052



$

107,350



13

%


10

%


$

118,606



$

107,350



10

%

   International card businesses


9,630



9,017



9,182



8,784



9,011



7



7



9,630



9,011



7


Total credit card


128,236



113,681



112,141



109,836



116,361



13



10



128,236



116,361



10


Consumer banking:





















   Auto


60,362



59,278



57,556



56,444



56,341



2



7



60,362



56,341



7


   Retail banking


2,703



2,737



2,771



2,804



2,864



(1)



(6)



2,703



2,864



(6)


Total consumer banking


63,065



62,015



60,327



59,248



59,205



2



7



63,065



59,205



7


Commercial banking:





















   Commercial and multifamily real estate


30,245



30,009



29,861



28,984



28,899



1



5



30,245



28,899



5


   Commercial and industrial


44,263



43,650



42,125



42,197



41,091



1



8



44,263



41,091



8


     Total commercial lending


74,508



73,659



71,986



71,181



69,990



1



6



74,508



69,990



6


   Small-ticket commercial real estate






6



8



343



     **



     **





343



     **


Total commercial banking


74,508



73,659



71,992



71,189



70,333



1



6



74,508



70,333



6


Total loans held for investment


$

265,809



$

249,355



$

244,460



$

240,273



$

245,899



7



8



$

265,809



$

245,899



8


Loans Held for Investment (Average)





















Credit card:





















   Domestic credit card


$

112,965



$

103,426



$

101,930



$

102,667



$

103,391



9

%


9

%


$

105,270



$

100,832



4

%

   International card businesses


9,120



8,945



8,868



8,789



8,958



2



2



8,932



8,988



(1)


Total credit card


122,085



112,371



110,798



111,456



112,349



9



9



114,202



109,820



4


Consumer banking:





















   Auto


59,884



58,517



57,070



56,234



56,469



2



6



57,938



55,610



4


   Home loan(1)












     **



     **





6,266



     **


   Retail banking


2,712



2,752



2,788



2,831



2,873



(1)



(6)



2,770



3,075



(10)


Total consumer banking


62,596



61,269



59,858



59,065



59,342



2



5



60,708



64,951



(7)


Commercial banking:





















   Commercial and multifamily real estate


30,173



29,698



29,514



29,034



28,855



2



5



29,608



27,771



7


   Commercial and industrial


44,016



42,807



42,476



42,132



40,476



3



9



42,863



39,188



9


     Total commercial lending


74,189



72,505



71,990



71,166



69,331



2



7



72,471



66,959



8


   Small-ticket commercial real estate




2



7



272



349



     **



     **



69



371



(81)


Total commercial banking


74,189



72,507



71,997



71,438



69,680



2



6



72,540



67,330



8


Other loans












     **



     **





17



     **


Total average loans held for investment


$

258,870



$

246,147



$

242,653



$

241,959



$

241,371



5



7



$

247,450



$

242,118



2




















2019 Q4 vs.


Year Ended December 31,



2019
Q4


2019
Q3


2019
Q2


2019
Q1


2018
Q4


2019
Q3


2018
Q4


2019


2018


2019 vs.
2018

Net Charge-Off (Recovery) Rates




























Credit card:




























   Domestic credit card(2)



4.32

%



4.12

%



4.86

%



5.04

%



4.64

%


20

bps


(32)

bps



4.58

%



4.74

%


(16)

bps

   International card businesses



4.22




3.78




3.63




3.20




4.22



44






3.71




3.19



52


Total credit card



4.31




4.09




4.76




4.90




4.61



22



(30)




4.51




4.62



(11)


Consumer banking:




























   Auto



1.90




1.60




1.09




1.44




1.98



30



(8)




1.51




1.64



(13)


   Retail banking



2.77




2.55




2.42




2.56




2.56



22



21




2.57




2.26



31


Total consumer banking



1.93




1.64




1.15




1.49




2.01



29



(8)




1.56




1.51



5


Commercial banking:




























   Commercial and multifamily real estate






0.02










(0.01)



(2)



1







0.01



(1)


   Commercial and industrial



0.60




0.55




0.15




0.13




0.17



5



43




0.36




0.14



22


     Total commercial lending



0.36




0.33




0.09




0.08




0.10



3



26




0.22




0.08



14


Total commercial banking



0.35




0.33




0.09




0.08




0.10



2



25




0.22




0.08



14


Total net charge-offs



2.60




2.38




2.48




2.64




2.67



22



(7)




2.53




2.52



1


30+ Day Performing Delinquency Rates




























Credit card:




























   Domestic credit card(2)



3.93

%



3.71

%



3.40

%



3.72

%



4.04

%


22

bps


(11)

bps



3.93

%



4.04

%


(11)

bps

   International card businesses



3.47




3.52




3.40




3.61




3.52



(5)



(5)




3.47




3.52



(5)


Total credit card



3.89




3.69




3.40




3.71




4.00



20



(11)




3.89




4.00



(11)


Consumer banking:




























   Auto



6.88




6.47




6.10




5.78




6.95



41



(7)




6.88




6.95



(7)


   Retail banking



1.02




1.01




0.93




0.84




1.01



1



1




1.02




1.01



1


Total consumer banking



6.63




6.23




5.87




5.55




6.67



40



(4)




6.63




6.67



(4)


Nonperforming Loans and Nonperforming Assets Rates(3)(4)




























Credit card:




























   International card businesses



0.26

%



0.25

%



0.25

%



0.26

%



0.25

%


1

bps


1

bps



0.26

%



0.25

%


1

bps

Total credit card



0.02




0.02




0.02




0.02




0.02








0.02




0.02




Consumer banking:




























   Auto



0.81




0.73




0.64




0.57




0.80



8



1




0.81




0.80



1


   Retail banking



0.87




0.91




1.02




1.10




1.04



(4)



(17)




0.87




1.04



(17)


Total consumer banking



0.81




0.74




0.66




0.59




0.81



7






0.81




0.81




Commercial banking:




























   Commercial and multifamily real estate



0.12




0.12




0.14




0.24




0.29





(17)




0.12




0.29



(17)


   Commercial and industrial



0.93




0.95




0.74




0.71




0.54



(2)



39




0.93




0.54



39


     Total commercial lending



0.60




0.61




0.49




0.52




0.44



(1)



16




0.60




0.44



16


Total commercial banking



0.60




0.61




0.50




0.53




0.44



(1)



16




0.60




0.44



16


Total nonperforming loans



0.37




0.37




0.32




0.31




0.33





4




0.37




0.33



4


Total nonperforming assets



0.39




0.40




0.34




0.33




0.35



(1)



4




0.39




0.35



4



 


 

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, 2019



Credit Card


Consumer Banking





(Dollars in millions)


Domestic
Card


International
Card
Businesses


Total
Credit Card


Auto


Retail
Banking


Total
Consumer
Banking


Commercial
Banking


Total

Allowance for loan and lease losses:

















Balance as of September 30, 2019


$

4,870



$

400



$

5,270



$

952



$

55



$

1,007



$

760



$

7,037


Charge-offs


(1,554)



(133)



(1,687)



(511)



(23)



(534)



(72)



(2,293)


Recoveries


335



38



373



227



4



231



6



610


Net charge-offs


(1,219)



(95)



(1,314)



(284)



(19)



(303)



(66)



(1,683)


Provision for loan and lease losses


1,346



75



1,421



316



18



334



81



1,836


Allowance build (release) for loan and lease losses


127



(20)



107



32



(1)



31



15



153


Other changes(5)




18



18











18


Balance as of December 31, 2019


4,997



398



5,395



984



54



1,038



775



7,208


Reserve for unfunded lending commitments:

















Balance as of September 30, 2019










4



4



149



153


Provision (benefit) for losses on unfunded lending commitments










1



1



(19)



(18)


Balance as of December 31, 2019










5



5



130



135


Combined allowance and reserve as of December 31, 2019


$

4,997



$

398



$

5,395



$

984



$

59



$

1,043



$

905



$

7,343





Year Ended December 31, 2019



Credit Card


Consumer Banking





(Dollars in millions)


Domestic
Card


International
Card
Businesses


Total
Credit Card


Auto


Retail
Banking


Total
Consumer
Banking


Commercial
Banking


Total

Allowance for loan and lease losses:

















Balance as of December 31, 2018


$

5,144



$

391



$

5,535



$

990



$

58



$

1,048



$

637



$

7,220


Charge-offs


(6,189)



(522)



(6,711)



(1,829)



(88)



(1,917)



(181)



(8,809)


Recoveries


1,371



191



1,562



953



17



970



25



2,557


Net charge-offs


(4,818)



(331)



(5,149)



(876)



(71)



(947)



(156)



(6,252)


Provision for loan and lease losses


4,671



321



4,992



870



67



937



294



6,223


Allowance build (release) for loan and lease losses


(147)



(10)



(157)



(6)



(4)



(10)



138



(29)


Other changes(5)




17



17











17


Balance as of December 31, 2019


4,997



398



5,395



984



54



1,038



775



7,208


Reserve for unfunded lending commitments:

















Balance as of December 31, 2018










4



4



118



122


Provision for losses on unfunded lending commitments










1



1



12



13


Balance as of December 31, 2019










5



5



130



135


Combined allowance and reserve as of December 31, 2019


$

4,997



$

398



$

5,395



$

984



$

59



$

1,043



$

905



$

7,343


 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results




Three Months Ended December 31, 2019


Year Ended December 31, 2019

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total


Credit
Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total

Net interest income


$

3,794



$

1,662



$

494



$

116



$

6,066



$

14,461



$

6,732



$

1,983



$

164



$

23,340


Non-interest income (loss)


1,030



152



223



(44)



1,361



3,888



643



831



(109)



5,253


Total net revenue


4,824



1,814



717



72



7,427



18,349



7,375



2,814



55



28,593


Provision for credit losses


1,421



335



62





1,818



4,992



938



306





6,236


Non-interest expense


2,487



1,110



441



123



4,161



9,271



4,091



1,699



422



15,483


Income (loss) from continuing operations before income taxes


916



369



214



(51)



1,448



4,086



2,346



809



(367)



6,874


Income tax provision (benefit)


212



86



50



(78)



270



959



547



188



(353)



1,341


Income (loss) from continuing operations, net of tax


$

704



$

283



$

164



$

27



$

1,178



$

3,127



$

1,799



$

621



$

(14)



$

5,533

























Three Months Ended September 30, 2019











(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(6)


Other(6)


Total











Net interest income


$

3,546



$

1,682



$

486



$

23



$

5,737












Non-interest income (loss)


870



165



221



(34)



1,222












Total net revenue (loss)


4,416



1,847



707



(11)



6,959












Provision for credit losses


1,087



203



93





1,383












Non-interest expense


2,360



985



414



113



3,872












Income (loss) from continuing operations before income taxes


969



659



200



(124)



1,704












Income tax provision (benefit)


235



154



46



(60)



375












Income (loss) from continuing operations, net of tax


$

734



$

505



$

154



$

(64)



$

1,329



































Three Months Ended December 31, 2018


Year Ended December 31, 2018

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(6)(7)


Other(6)(7)


Total


Credit
Card


Consumer
Banking


Commercial
Banking(6)(7)


Other(6)(7)


Total

Net interest income


$

3,617



$

1,689



$

508



$

6



$

5,820



$

14,167



$

6,549



$

2,044



$

115



$

22,875


Non-interest income (loss)


886



159



159



(11)



1,193



3,520



663



744



274



5,201


Total net revenue (loss)


4,503



1,848



667



(5)



7,013



17,687



7,212



2,788



389



28,076


Provision (benefit) for credit losses


1,326



303



9





1,638



4,984



838



83



(49)



5,856


Non-interest expense


2,496



1,085



434



117



4,132



8,542



4,027



1,654



679



14,902


Income (loss) from continuing operations before income taxes


681



460



224



(122)



1,243



4,161



2,347



1,051



(241)



7,318


Income tax provision (benefit)


160



107



52



(340)



(21)



970



547



245



(469)



1,293


Income from continuing operations, net of tax


$

521



$

353



$

172



$

218



$

1,264



$

3,191



$

1,800



$

806



$

228



$

6,025























 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business














2019 Q4 vs.


Year Ended December 31,



2019


2019


2019


2019


2018


2019


2018






2019 vs.

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Credit Card





















Earnings:





















Net interest income


$

3,794



$

3,546



$

3,531



$

3,590



$

3,617



7

%


5

%


$

14,461



$

14,167



2

%

Non-interest income


1,030



870



1,038



950



886



18



16



3,888



3,520



10


Total net revenue


4,824



4,416



4,569



4,540



4,503



9



7



18,349



17,687



4


Provision for credit losses


1,421



1,087



1,095



1,389



1,326



31



7



4,992



4,984




Non-interest expense


2,487



2,360



2,253



2,171



2,496



5





9,271



8,542



9


Income from continuing operations before income taxes


916



969



1,221



980



681



(5)



35



4,086



4,161



(2)


Income tax provision


212



235



283



229



160



(10)



33



959



970



(1)


Income from continuing operations, net of tax


$

704



$

734



$

938



$

751



$

521



(4)



35



$

3,127



$

3,191



(2)


Selected performance metrics:





















Period-end loans held for investment


$

128,236



$

113,681



$

112,141



$

109,836



$

116,361



13



10



$

128,236



$

116,361



10


Average loans held for investment


122,085



112,371



110,798



111,456



112,349



9



9



114,202



109,820



4


Average yield on loans held for investment(8)


15.02

%


15.55

%


15.66

%


15.77

%


15.63

%


(53)

bps


(61)

bps


15.49

%


15.43

%


6

bps

Total net revenue margin(9)


15.80



15.72



16.50



16.29



16.03



8



(23)



16.07



16.11



(4)


Net charge-off rate


4.31



4.09



4.76



4.90



4.61



22



(30)



4.51



4.62



(11)


30+ day performing delinquency rate


3.89



3.69



3.40



3.71



4.00



20



(11)



3.89



4.00



(11)


30+ day delinquency rate


3.91



3.71



3.42



3.72



4.01



20



(10)



3.91



4.01



(10)


Nonperforming loan rate(3)


0.02



0.02



0.02



0.02



0.02







0.02



0.02




Purchase volume(10)


$

116,631



$

108,034



$

106,903



$

93,197



$

105,696



8

%


10

%


$

424,765



$

387,102



10

%



















































2019 Q4 vs.


Year Ended December 31,



2019


2019


2019


2019


2018


2019


2018






2019 vs.

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Domestic Card





















Earnings:





















Net interest income


$

3,473



$

3,299



$

3,220



$

3,273



$

3,309



5

%


5

%


$

13,265



$

12,926



3

%

Non-interest income


962



878



971



873



828



10



16



3,684



3,239



14


Total net revenue


4,435



4,177



4,191



4,146



4,137



6



7



16,949



16,165



5


Provision for credit losses


1,346



1,010



1,024



1,291



1,229



33



10



4,671



4,653




Non-interest expense


2,249



2,076



2,034



1,949



2,216



8



1



8,308



7,621



9


Income from continuing operations before income taxes


840



1,091



1,133



906



692



(23)



21



3,970



3,891



2


Income tax provision


196



254



264



211



162



(23)



21



925



907



2


Income from continuing operations, net of tax


$

644



$

837



$

869



$

695



$

530



(23)



22



$

3,045



$

2,984



2


Selected performance metrics:





















Period-end loans held for investment


$

118,606



$

104,664



$

102,959



$

101,052



$

107,350



13



10



$

118,606



$

107,350



10


Average loans held for investment


112,965



103,426



101,930



102,667



103,391



9



9



105,270



100,832



4


Average yield on loans held for investment(8)


14.91

%


15.74

%


15.60

%


15.69

%


15.58

%


(83)

bps


(67)

bps


15.47

%


15.36

%


11

bps

Total net revenue margin(9)


15.70



16.15



16.45



16.15



16.01



(45)



(31)



16.10



16.03



7


Net charge-off rate(2)


4.32



4.12



4.86



5.04



4.64



20



(32)



4.58



4.74



(16)


30+ day performing delinquency rate(2)


3.93



3.71



3.40



3.72



4.04



22



(11)



3.93



4.04



(11)


Purchase volume(10)


$

107,154



$

99,087



$

98,052



$

85,738



$

96,818



8

%


11

%


$

390,032



$

354,158



10

%

Refreshed FICO scores:(11)





















Greater than 660


67

%


68

%


68

%


66

%


67

%


(1)





67

%


67

%



660 or below


33



32



32



34



33



1





33



33




Total


100

%


100

%


100

%


100

%


100

%






100

%


100

%



 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business














2019 Q4 vs.


Year Ended December 31,



2019


2019


2019


2019


2018


2019


2018






2019 vs.

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Consumer Banking





















Earnings:





















Net interest income


$

1,662



$

1,682



$

1,709



$

1,679



$

1,689



(1)

%


(2)

%


$

6,732



$

6,549



3

%

Non-interest income


152



165



166



160



159



(8)



(4)



643



663



(3)


Total net revenue


1,814



1,847



1,875



1,839



1,848



(2)



(2)



7,375



7,212



2


Provision for credit losses


335



203



165



235



303



65



11



938



838



12


Non-interest expense


1,110



985



1,002



994



1,085



13



2



4,091



4,027



2


Income from continuing operations before income taxes


369



659



708



610



460



(44)



(20)



2,346



2,347




Income tax provision


86



154



165



142



107



(44)



(20)



547



547




Income from continuing operations, net of tax


$

283



$

505



$

543



$

468



$

353



(44)



(20)



$

1,799



$

1,800




Selected performance metrics:





















Period-end loans held for investment(1)


$

63,065



$

62,015



$

60,327



$

59,248



$

59,205



2



7



$

63,065



$

59,205



7


Average loans held for investment(1)


62,596



61,269



59,858



59,065



59,342



2



5



60,708



64,951



(7)


Average yield on loans held for investment(8)


8.51

%


8.47

%


8.36

%


8.15

%


8.14

%


4

bps


37

bps


8.37

%


7.54

%


83

bps

Auto loan originations


$

7,527



$

8,175



$

7,327



$

6,222



$

5,932



(8)

%


27

%


$

29,251



$

26,276



11

%

Period-end deposits


213,099



206,423



205,220



205,439



198,607



3



7



213,099



198,607



7


Average deposits


209,783



204,933



204,164



201,072



196,348



2



7



205,012



193,053



6


Average deposits interest rate


1.20

%


1.31

%


1.26

%


1.18

%


1.10

%


(11)

bps


10

bps


1.24

%


0.95

%


29

bps

Net charge-off rate


1.93



1.64



1.15



1.49



2.01



29



(8)



1.56



1.51



5


30+ day performing delinquency rate


6.63



6.23



5.87



5.55



6.67



40



(4)



6.63



6.67



(4)


30+ day delinquency rate


7.34



6.86



6.41



6.02



7.36



48



(2)



7.34



7.36



(2)


Nonperforming loan rate(3)


0.81



0.74



0.66



0.59



0.81



7





0.81



0.81




Nonperforming asset rate(4)


0.91



0.83



0.75



0.68



0.90



8



1



0.91



0.90



1


Auto—At origination FICO scores:(12)





















Greater than 660


48

%


48

%


49

%


49

%


50

%




(2)

%


48

%


50

%


(2)

%

621 - 660


20



20



19



19



19





1



20



19



1


620 or below


32



32



32



32



31





1



32



31



1


Total


100

%


100

%


100

%


100

%


100

%






100

%


100

%



 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business














2019 Q4 vs.


Year Ended December 31,



2019


2019


2019


2019


2018


2019


2018






2019 vs.

(Dollars in millions, except as noted)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Commercial Banking





















Earnings:





















Net interest income


$

494



$

486



$

514



$

489



$

508



2

%


(3)

%


$

1,983



$

2,044



(3)

%

Non-interest income


223



221



200



187



159



1



40



831



744



12


Total net revenue(6)(7)


717



707



714



676



667



1



7



2,814



2,788



1


Provision for credit losses


62



93



82



69



9



(33)



**



306



83



**


Non-interest expense


441



414



427



417



434



7



2



1,699



1,654



3


Income from continuing operations before income taxes


214



200



205



190



224



7



(4)



809



1,051



(23)


Income tax provision


50



46



48



44



52



9



(4)



188



245



(23)


Income from continuing operations, net of tax


$

164



$

154



$

157



$

146



$

172



6



(5)



$

621



$

806



(23)


Selected performance metrics:





















Period-end loans held for investment


$

74,508



$

73,659



$

71,992



$

71,189



$

70,333



1



6



$

74,508



$

70,333



6


Average loans held for investment


74,189



72,507



71,997



71,438



69,680



2



6



72,540



67,330



8


Average yield on loans held for investment(6)(8)


4.22

%


4.45

%


4.75

%


4.62

%


4.67

%


(23)

bps


(45)

bps


4.51

%


4.46

%


5

bps

Period-end deposits


$

32,134



$

30,923



$

30,761



$

31,248



$

29,480



4

%


9

%


$

32,134



$

29,480



9

%

Average deposits


32,034



30,693



31,364



30,816



30,680



4



4



31,229



32,175



(3)


Average deposits interest rate


1.10

%


1.25

%


1.28

%


1.11

%


0.95

%


(15)

bps


15

bps


1.18

%


0.72

%


46

bps

Net charge-off rate


0.35



0.33



0.09



0.08



0.10



2



25



0.22



0.08



14


Nonperforming loan rate(3)


0.60



0.61



0.50



0.53



0.44



(1)



16



0.60



0.44



16


Nonperforming asset rate(4)


0.60



0.61



0.50



0.53



0.45



(1)



15



0.60



0.45



15


Risk category:(13)





















Noncriticized


$

71,848



$

71,144



$

69,390



$

68,594



$

68,043



1

%


6

%


$

71,848



$

68,043



6

%

Criticized performing


2,181



2,035



2,211



2,094



1,848



7



18



2,181



1,848



18


Criticized nonperforming


448



449



360



378



312





44



448



312



44


PCI loans


31



31



31



123



130





(76)



31



130



(76)


Total commercial banking loans


$

74,508



$

73,659



$

71,992



$

71,189



$

70,333



1



6



$

74,508



$

70,333



6


Risk category as a percentage of period-end loans held for investment:(13)
























Noncriticized


96.5

%


96.6

%


96.4

%


96.4

%


96.8

%


(10)

bps


(30)

bps


96.5

%


96.8

%


(30)

bps

Criticized performing


2.9



2.8



3.1



2.9



2.6



10



30



2.9



2.6



30


Criticized nonperforming


0.6



0.6



0.5



0.5



0.4





20



0.6



0.4



20


PCI loans








0.2



0.2





(20)





0.2



(20)


Total commercial banking 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














2019 Q4 vs.


Year Ended December 31,



2019


2019


2019


2019


2018


2019


2018






2019 vs.

(Dollars in millions)


Q4


Q3


Q2


Q1


Q4


Q3


Q4


2019


2018


2018

Other





















Earnings:





















Net interest income (loss)


$

116



$

23



$

(8)



$

33



$

6



**



**



$

164



$

115



43

%

Non-interest income (loss)(1)


(44)



(34)



(26)



(5)



(11)



29

%


**



(109)



274



**


Total net revenue (loss)(6)(7)


72



(11)



(34)



28



(5)



**



**



55



389



(86)


Benefit for credit losses(1)












**



**





(49)



**


Non-interest expense(14)(15)


123



113



97



89



117



9



5

%


422



679



(38)


Loss from continuing operations before income taxes


(51)



(124)



(131)



(61)



(122)



(59)



(58)



(367)



(241)



52


Income tax benefit


(78)



(60)



(109)



(106)



(340)



30



(77)



(353)



(469)



(25)


Income (loss) from continuing operations, net of tax


$

27



$

(64)



$

(22)



$

45



$

218



**



(88)



$

(14)



$

228



**


Selected performance metrics:





















Period-end deposits


$

17,464



$

19,802



$

18,554



$

18,420



$

21,677



(12)



(19)



$

17,464



$

21,677



(19)


Average deposits


18,223



19,456



18,106



19,522



20,635



(6)



(12)



18,824



21,889



(14)


Total





















Earnings:





















Net interest income


$

6,066



$

5,737



$

5,746



$

5,791



$

5,820



6

%


4

%


$

23,340



$

22,875



2

%

Non-interest income


1,361



1,222



1,378



1,292



1,193



11



14



5,253



5,201



1


Total net revenue


7,427



6,959



7,124



7,083



7,013



7



6



28,593



28,076



2


Provision for credit losses


1,818



1,383



1,342



1,693



1,638



31



11



6,236



5,856



6


Non-interest expense


4,161



3,872



3,779



3,671



4,132



7



1



15,483



14,902



4


Income from continuing operations before income taxes


1,448



1,704



2,003



1,719



1,243



(15)



16



6,874



7,318



(6)


Income tax provision (benefit)


270



375



387



309



(21)



(28)



**



1,341



1,293



4


Income from continuing operations, net of tax


$

1,178



$

1,329



$

1,616



$

1,410



$

1,264



(11)



(7)



$

5,533



$

6,025



(8)


Selected performance metrics:





















Period-end loans held for investment


$

265,809



$

249,355



$

244,460



$

240,273



$

245,899



7



8



$

265,809



$

245,899



8


Average loans held for investment


258,870



246,147



242,653



241,959



241,371



5



7



247,450



242,118



2


Period-end deposits


262,697



257,148



254,535



255,107



249,764



2



5



262,697



249,764



5


Average deposits


260,040



255,082



253,634



251,410



247,663



2



5



255,065



247,117



3



 

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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


(1)

In 2018, we sold all of our consumer home loan portfolio and recognized a net gain of approximately $499 million in the Other category, including a benefit for credit losses of $46 million.

(2)

On October 11, 2019, we completed the acquisition of the existing portfolio of Walmart's cobrand and private label credit card receivables. This acquisition reduced the domestic credit card net charge-off rates by 29 basis points for the fourth quarter and 8 basis points for the year ended December 31, 2019, and increased the domestic credit card 30+ day performing delinquency rate by 17 basis points as of December 31, 2019.

(3)

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.

(4)

Nonperforming assets consist of nonperforming loans, repossessed assets 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, repossessed assets and other foreclosed assets.

(5)

Represents foreign currency translation adjustments.

(6)

Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.

(7)

In the first quarter of 2019, we made a change in how revenue is measured in our Commercial Banking business by revising the allocation of tax benefits on certain tax-advantaged investments. As such, prior period results have been recast to conform with the current period presentation. The result of this measurement change reduced the previously reported total net revenue in our Commercial Banking business by $20 million and $108 million for the fourth quarter and year ended December 31, 2018, with an offsetting increase in the Other category.

(8)

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.

(9)

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.

(10)

Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.

(11)

Percentages represent period-end loans held for investment in each credit score category. Domestic card 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.

(12)

Percentages represent period-end loans held for investment in each credit score category. Auto 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.

(13)

Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.

(14)

Includes charges incurred as a result of restructuring activities.

(15)

Includes $16 million of net Cybersecurity Incident expenses in Q4 2019, consisting of $23 million of expenses and $7 million of insurance recoveries; and $22 million of net Cybersecurity Incident expenses in Q3 2019, consisting of $49 million of expenses and $27 million of insurance recoveries.

**

Not meaningful.

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

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




Basel III Standardized Approach

(Dollars in millions, except as noted)


December 31,
2019


September 30,
2019


June 30,
2019


March 31,
2019


December 31,
2018

Regulatory Capital Metrics











Common equity excluding AOCI


$

52,001



$

51,959



$

51,236



$

49,781



$

48,570


Adjustments:











AOCI(2)


1,156



453



170



(660)



(1,263)


Goodwill, net of related deferred tax liabilities


(14,465)



(14,439)



(14,365)



(14,369)



(14,373)


Intangible assets, net of related deferred tax liabilities


(170)



(180)



(194)



(223)



(254)


Other


(360)



(588)



(401)



113



391


Common equity Tier 1 capital


$

38,162



$

37,205



$

36,446



$

34,642



$

33,071


Tier 1 capital


$

43,015



$

43,028



$

40,806



$

39,002



$

37,431


Total capital(3)


50,350



50,174



47,919



46,042



44,645


Risk-weighted assets


313,308



298,130



295,255



291,483



294,950


Adjusted average assets(4)


368,511



360,266



356,518



355,781



350,606


Capital Ratios











Common equity Tier 1 capital(5)


12.2

%


12.5

%


12.3

%


11.9

%


11.2

%

Tier 1 capital(6)


13.7



14.4



13.8



13.4



12.7


Total capital(7)


16.1



16.8



16.2



15.8



15.1


Tier 1 leverage(4)


11.7



11.9



11.4



11.0



10.7


Tangible common equity ("TCE")(8)


10.2



10.3



10.2



9.6



9.1


 

Reconciliation of Non-GAAP Measures


The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results. These adjusted results provide alternate measurements of our operating performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.




Three Months Ended


Nine Months Ended


Year Ended



December 31, 2019


September 30, 2019


December 31, 2019

(Dollars in millions, except per share data and as noted)


Reported
Results


Adj.(9)


Adjusted
Results


Reported
Results


Adj.(9)


Adjusted
Results


Reported
Results


Adj.(9)


Adjusted
Results

Selected income statement data:



















Net interest income


$

6,066





$

6,066



$

17,274



$

67



$

17,341



$

23,340



$

67



$

23,407


Non-interest income


1,361





1,361



3,892



74



3,966



5,253



74



5,327


Total net revenue


7,427





7,427



21,166



141



21,307



28,593



141



28,734


Provision for credit losses


1,818



$

(84)



1,734



4,418





4,418



6,236



(84)



6,152


Non-interest expense


4,161



(64)



4,097



11,322



(284)



11,038



15,483



(348)



15,135


Income from continuing operations before income taxes


1,448



148



1,596



5,426



425



5,851



6,874



573



7,447


Income tax provision


270



35



305



1,071



46



1,117



1,341



81



1,422


Income from continuing operations, net of tax


1,178



113



1,291



4,355



379



4,734



5,533



492



6,025


Income (loss) from discontinued operations, net of tax


(2)





(2)



15





15



13





13


Net income


1,176



113



1,289



4,370



379



4,749



5,546



492



6,038


Dividends and undistributed earnings allocated to participating securities(11)


(7)



(1)



(8)



(34)



(3)



(37)



(41)



(3)



(44)


Preferred stock dividends


(97)





(97)



(185)





(185)



(282)





(282)


Issuance cost for redeemed preferred stock


(31)





(31)









(31)





(31)


Net income available to common stockholders


$

1,041



$

112



$

1,153



$

4,151



$

376



$

4,527



$

5,192



$

489



$

5,681


Selected performance metrics:



















Diluted EPS(11)


$

2.25



$

0.24



$

2.49



$

8.79



$

0.80



$

9.59



$

11.05



$

1.04



$

12.09


Efficiency ratio


56.03

%


(87)

bps


55.16

%


53.49

%


(169)

bps


51.80

%


54.15

%


(148)

bps


52.67

%

Operating efficiency ratio


46.47



(87)



45.60



46.10



(164)



44.46



46.20



(144)



44.76
































Three Months Ended


Nine Months Ended


Year Ended



December 31, 2018


September 30, 2018


December 31, 2018

(Dollars in millions, except per share data and as noted)


Reported
Results


Adj.(10)


Adjusted
Results


Reported
Results


Adj.(10)


Adjusted
Results


Reported
Results


Adj.(10)


Adjusted
Results

Selected income statement data:



















Net interest income


$

5,820



$

6



$

5,826



$

17,055



$

26



$

17,081



$

22,875



$

32



$

22,907


Non-interest income


1,193



(64)



1,129



4,008



(514)



3,494



5,201



(578)



4,623


Total net revenue


7,013



(58)



6,955



21,063



(488)



20,575



28,076



(546)



27,530


Provision for credit losses


1,638





1,638



4,218



48



4,266



5,856



48



5,904


Non-interest expense


4,132



(34)



4,098



10,770



(248)



10,522



14,902



(282)



14,620


Income from continuing operations before income taxes


1,243



(24)



1,219



6,075



(288)



5,787



7,318



(312)



7,006


Income tax provision (benefit)


(21)



266



245



1,314



(121)



1,193



1,293



145



1,438


Income from continuing operations, net of tax


1,264



(290)



974



4,761



(167)



4,594



6,025



(457)



5,568


Income (loss) from discontinued operations, net of tax


(3)





(3)



(7)





(7)



(10)





(10)


Net income


1,261



(290)



971



4,754



(167)



4,587



6,015



(457)



5,558


Dividends and undistributed earnings allocated to participating securities(11)


(9)



2



(7)



(32)



1



(31)



(40)



3



(37)


Preferred stock dividends


(80)





(80)



(185)





(185)



(265)





(265)


Net income available to common stockholders


$

1,172



$

(288)



$

884



$

4,537



$

(166)



$

4,371



$

5,710



$

(454)



$

5,256


Selected performance metrics:



















Diluted EPS(11)


$

2.48



$

(0.61)



$

1.87



$

9.32



$

(0.34)



$

8.98



$

11.82



$

(0.94)



$

10.88


Efficiency ratio


58.92

%




58.92

%


51.13

%


1

bps


51.14

%


53.08

%


3

bps


53.11

%

Operating efficiency ratio


47.07



(10)

bps


46.97



44.76



(15)



44.61



45.33



(12)



45.21


 

 

Reconciliation of Non-GAAP Measures



The following non-GAAP measures consist of 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 to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. 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 following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.




2019


2019


2019


2018


2018

(Dollars in millions)


Q4


Q3


Q2


Q1


Q4

Tangible Common Equity (Period-End)











Stockholders' equity


$

58,011



$

58,235



$

55,767



$

53,481



$

51,668


Goodwill and intangible assets(12)


(14,932)



(14,940)



(14,886)



(14,904)



(14,941)


Noncumulative perpetual preferred stock


(4,853)



(5,823)



(4,360)



(4,360)



(4,360)


Tangible common equity


$

38,226



$

37,472



$

36,521



$

34,217



$

32,367


Tangible Common Equity (Average)











Stockholders' equity


$

58,148



$

57,245



$

54,570



$

52,720



$

51,114


Goodwill and intangible assets(12)


(14,967)



(14,908)



(14,900)



(14,932)



(14,953)


Noncumulative perpetual preferred stock


(5,506)



(4,678)



(4,360)



(4,360)



(4,360)


Tangible common equity


$

37,675



$

37,659



$

35,310



$

33,428



$

31,801


Tangible Assets (Period-End)











Total assets


$

390,365



$

378,810



$

373,619



$

373,191



$

372,538


Goodwill and intangible assets(12)


(14,932)



(14,940)



(14,886)



(14,904)



(14,941)


Tangible assets


$

375,433



$

363,870



$

358,733



$

358,287



$

357,597


Tangible Assets (Average)











Total assets


$

383,162



$

374,905



$

371,095



$

370,394



$

365,243


Goodwill and intangible assets(12)


(14,967)



(14,908)



(14,900)



(14,932)



(14,953)


Tangible assets


$

368,195



$

359,997



$

356,195



$

355,462



$

350,290



__________

(1)     Regulatory capital metrics and capital ratios as of December 31, 2019 are preliminary and therefore subject to change.




















(2)     Amounts presented are net of tax.

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

(4)     Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that are 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.

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

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

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

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

(9)     The adjustments in 2019 consist of:

 



Three Months Ended


Nine Months Ended


Year Ended

(Dollars in millions)


December 31, 2019


September 30, 2019


December 31, 2019

Initial allowance build on acquired Walmart portfolio


$

84





$

84


Walmart launch and related integration expenses


48



$

163



211


Cybersecurity Incident expenses, net of insurance


16



22



38


U.K. Payment Protection Insurance customer refund reserve build ("U.K. PPI Reserve")




212



212


Restructuring charges




28



28


Total


148



425



573


Income tax provision


35



46



81


Net income


$

113



$

379



$

492



(10)   The adjustments in 2018 consist of:




Three Months Ended


Nine Months Ended


Year Ended

(Dollars in millions)


December 31, 2018


September 30, 2018


December 31, 2018

Net gains on the sales of exited businesses


$

(74)



$

(541)



$

(615)


Benefit as a result of tax methodology change on rewards costs


(284)





(284)


Legal reserve build




170



170


U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve")


50



49



99


Restructuring charges




34



34


Total


(308)



(288)



(596)


Income tax provision


18



121



139


Net income


$

(290)



$

(167)



$

(457)



(11)     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.

(12)     Includes impact of related deferred taxes.

 

Cision View original content:http://www.prnewswire.com/news-releases/capital-one-reports-fourth-quarter-2019-net-income-of-1-2-billion-or-2-25-per-share-300990655.html

SOURCE Capital One Financial Corporation