MCLEAN, Va., April 27, 2023 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2023 of $960 million, or $2.31 per diluted common share, compared with net income of $1.2 billion, or $3.03 per diluted common share in the fourth quarter of 2022, and with net income of $2.4 billion, or $5.62 per diluted common share in the first quarter of 2022.

Capital One Financial

"In the first quarter, we built additional balance sheet strength as we grew retail deposits, and maintained or increased strong levels of capital and liquidity," said Richard D. Fairbank, Founder, Chairman, and Chief Executive Officer. "At the same time, we continue to see attractive growth opportunities in our domestic card business and our "digital first" national retail bank, and our investments to transform our technology and to drive resilient growth put us in a strong position to capture opportunities and deliver compelling long-term shareholder value."

All comparisons below are for the first quarter of 2023 compared with the fourth quarter of 2022 unless otherwise noted.

First Quarter 2023 Income Statement Summary:

  • Total net revenue decreased 2 percent to $8.9 billion.
  • Total non-interest expense decreased 3 percent to $4.9 billion:
    • 20 percent decrease in marketing.
    • 2 percent increase in operating expenses.
  • Pre-provision earnings(1) remained flat at $4.0 billion.
  • Provision for credit losses increased $379 million to $2.8 billion:
    • Net charge-offs of $1.7 billion.
    • $1.1 billion loan reserve build.
  • Net interest margin of 6.60 percent, a decrease of 24 basis points.
  • Efficiency ratio of 55.54 percent.
  • Operating efficiency ratio of 45.47 percent.

First Quarter 2023 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.5 percent at March 31, 2023.
  • Period-end loans held for investment in the quarter decreased $3.5 billion, or 1 percent, to $308.8 billion.
    • Credit Card period-end loans decreased $588 million, or less than 1 percent, to $137.1 billion.
      • Domestic Card period-end loans decreased $601 million, or less than 1 percent, to $131.0 billion.
    • Consumer Banking period-end loans decreased $1.8 billion, or 2 percent, to $78.2 billion.
      • Auto period-end loans decreased $1.7 billion, or 2 percent, to $76.7 billion.
    • Commercial Banking period-end loans decreased $1.1 billion, or 1 percent, to $93.5 billion.
  • Average loans held for investment in the quarter increased $875 million, or less than 1 percent, to $307.8 billion.
    • Credit Card average loans increased $4.0 billion, or 3 percent, to $134.7 billion.
      • Domestic Card average loans increased $3.7 billion, or 3 percent, to $128.6 billion.
    • Consumer Banking average loans decreased $1.7 billion, or 2 percent, to $79.0 billion.
      • Auto average loans decreased $1.6 billion, or 2 percent, to $77.5 billion.
    • Commercial Banking average loans decreased $1.4 billion, or 2 percent, to $94.1 billion.
  • Period-end total deposits increased $16.8 billion, or 5 percent, to $349.8 billion, while average deposits increased $13.6 billion, or 4 percent, to $340.1 billion.
  • Interest-bearing deposits rate paid increased 58 basis points to 2.40 percent.

(1)

Pre-provision earnings is a non-GAAP metric calculated based on total net revenue less non-interest expense for the period. Management believes that this financial metric is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses. See our Financial Supplement, filed as Exhibit 99.2 to our Current Report on From 8-K on April 27, 2023 with the Securities and Exchange Commission (the "SEC"), "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for a reconciliation and additional information on non-GAAP measures.

 

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on April 27, 2023 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 May 11, 2023 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. Forward-looking statements often use words such as "will," "anticipate," "target," "expect," "think," "estimate," "intend," "plan," "goal," "believe," "forecast," "outlook" or other words of similar meaning. Any forward-looking statements made by Capital One or on its behalf speak only as of the date they are made or as of the date indicated, and Capital One does not undertake any obligation to update forward-looking statements as a result of new information, future events or otherwise. 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. For additional information on factors that could materially influence forward-looking statements included in this earnings press release, see the risk factors set forth under "Part I—Item 1A. Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC and Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company which, along with its subsidiaries, had $349.8 billion in deposits and $471.7 billion in total assets as of March 31, 2023. 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.

 


Exhibit 99.2

 


Capital One Financial Corporation

Financial Supplement(1)(2)

First Quarter 2023

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 Credit 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 Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—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 Quarterly Report on Form 10-Q for the period ended March 31, 2023 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. See "Table 15 - Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for a reconciliation of any non-GAAP financial measures.

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial Summary—Consolidated














2023 Q1 vs

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


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Income Statement















Net interest income


$     7,186


$     7,197


$     7,003


$     6,517


$     6,397


—


12 %

Non-interest income


1,717


1,843


1,802


1,715


1,776


(7) %


(3)

Total net revenue(1)


8,903


9,040


8,805


8,232


8,173


(2)


9

Provision for credit losses


2,795


2,416


1,669


1,085


677


16


**

Non-interest expense:















Marketing


897


1,118


978


1,003


918


(20)


(2)

Operating expense


4,048


3,962


3,971


3,580


3,633


2


11

Total non-interest expense


4,945


5,080


4,949


4,583


4,551


(3)


9

Income from continuing operations before income taxes


1,163


1,544


2,187


2,564


2,945


(25)


(61)

Income tax provision


203


312


493


533


542


(35)


(63)

Net income


960


1,232


1,694


2,031


2,403


(22)


(60)

Dividends and undistributed earnings allocated to participating securities(2)


(16)


(14)


(21)


(25)


(28)


14


(43)

Preferred stock dividends


(57)


(57)


(57)


(57)


(57)


—


—

Net income available to common stockholders


$        887


$     1,161


$     1,616


$     1,949


$     2,318


(24)


(62)

Common Share Statistics















Basic earnings per common share:(2)















Net income per basic common share


$       2.32


$       3.03


$       4.21


$       4.98


$       5.65


(23) %


(59) %

Diluted earnings per common share:(2)















Net income per diluted common share


$       2.31


$       3.03


$       4.20


$       4.96


$       5.62


(24) %


(59) %

Weighted-average common shares outstanding (in millions):















Basic


382.6


382.6


383.4


391.2


410.4


—


(7) %

Diluted


383.8


383.7


384.6


392.6


412.2


—


(7)

Common shares outstanding (period-end, in millions)


382.0


381.3


382.0


383.8


399.0


—


(4)

Dividends declared and paid per common share


$       0.60


$       0.60


$       0.60


$       0.60


$       0.60


—


—

Tangible book value per common share (period-end)(3)


90.86


86.11


81.38


87.84


91.77


6 %


(1)














2023 Q1 vs

(Dollars in millions)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Balance Sheet (Period-End)















Loans held for investment


$  308,836


$  312,331


$  303,943


$  296,384


$  280,466


(1) %


10 %

Interest-earning assets


445,166


427,248


415,262


406,565


398,241


4


12

Total assets


471,660


455,249


444,232


440,288


434,195


4


9

Interest-bearing deposits


318,641


300,789


282,802


270,881


275,648


6


16

Total deposits


349,827


332,992


317,193


307,885


313,429


5


12

Borrowings


48,777


48,715


54,607


58,938


45,358


—


8

Common equity


49,807


47,737


46,015


48,564


51,499


4


(3)

Total stockholders' equity


54,653


52,582


50,861


53,410


56,345


4


(3)

Balance Sheet (Average Balances)















Loans held for investment


$  307,756


$  306,881


$  300,186


$  286,110


$  275,342


—


12 %

Interest-earning assets


435,199


421,051


412,171


398,934


394,082


3 %


10

Total assets


462,324


449,659


447,088


435,327


430,372


3


7

Interest-bearing deposits


308,788


292,793


275,900


268,104


271,823


5


14

Total deposits


340,123


326,558


311,928


305,954


309,597


4


10

Borrowings


48,016


49,747


58,628


53,208


42,277


(3)


14

Common equity


49,927


47,594


49,696


49,319


54,591


5


(9)

Total stockholders' equity


54,773


52,439


54,541


54,165


59,437


4


(8)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated














2023 Q1 vs

(Dollars in millions, except as noted)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Performance Metrics















Net interest income growth (period over period)


—


3 %


7 %


2 %


(1) %


**


**

Non-interest income growth (period over period)


(7) %


2


5


(3)


6


**


**

Total net revenue growth (period over period)


(2)


3


7


1


1


**


**

Total net revenue margin(4)


8.18


8.59


8.55


8.25


8.30


(41) bps


(12) bps

Net interest margin(5)


6.60


6.84


6.80


6.54


6.49


(24)


11

Return on average assets


0.83


1.10


1.52


1.87


2.23


(27)


(140)

Return on average tangible assets(6)


0.86


1.13


1.57


1.93


2.31


(27)


(145)

Return on average common equity(7)


7.11


9.76


13.01


15.81


16.98


(265)


(987)

Return on average tangible common equity(8)


10.15


14.22


18.59


22.63


23.36


(407)


(1,321)

Efficiency ratio(9)


55.54


56.19


56.21


55.67


55.68


(65)


(14)

Operating efficiency ratio(10)


45.47


43.83


45.10


43.49


44.45


164


102

Effective income tax rate for continuing operations


17.5


20.2


22.5


20.8


18.4


(270)


(90)

Employees (period-end, in thousands)


56.1


56.0


55.1


53.6


51.5


—


9 %

Credit Quality Metrics















Allowance for credit losses


$    14,318


$    13,240


$    12,209


$    11,491


$    11,308


8 %


27 %

Allowance coverage ratio


4.64 %


4.24 %


4.02 %


3.88 %


4.03 %


40 bps


61 bps

Net charge-offs


$      1,697


$      1,430


$         931


$         845


$         767


19 %


121 %

Net charge-off rate(11)


2.21 %


1.86 %


1.24 %


1.18 %


1.11 %


35 bps


110 bps

30+ day performing delinquency rate


2.88


2.96


2.58


2.36


2.08


(8)


80

30+ day delinquency rate


3.09


3.21


2.78


2.54


2.21


(12)


88

Capital Ratios(12)















Common equity Tier 1 capital 


12.5 %


12.5 %


12.2 %


12.1 %


12.7 %


—


(20) bps

Tier 1 capital


13.9


13.9


13.6


13.5


14.1


—


(20)

Total capital


15.9


15.8


15.7


15.7


16.4


10 bps


(50)

Tier 1 leverage


10.9


11.1


11.0


11.1


11.3


(20)


(40)

Tangible common equity ("TCE")(13)


7.6


7.5


7.2


7.9


8.7


10


(110)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income














2023 Q1 vs

(Dollars in millions, except as noted)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Interest income:















Loans, including loans held for sale


$      8,723


$      8,360


$      7,578


$      6,605


$      6,367


4 %


37 %

Investment securities


615


548


499


435


402


12


53

Other


416


250


123


55


15


66


**

Total interest income


9,754


9,158


8,200


7,095


6,784


7


44

Interest expense:















Deposits


1,856


1,335


689


293


218


39


**

Securitized debt obligations


211


170


120


65


29


24


**

Senior and subordinated notes


489


430


319


194


131


14


**

Other borrowings


12


26


69


26


9


(54)


33

Total interest expense


2,568


1,961


1,197


578


387


31


**

Net interest income


7,186


7,197


7,003


6,517


6,397


—


12

Provision for credit losses


2,795


2,416


1,669


1,085


677


16


**

Net interest income after provision for credit losses


4,391


4,781


5,334


5,432


5,720


(8)


(23)

Non-interest income:















Interchange fees, net


1,139


1,177


1,195


1,201


1,033


(3)


10

Service charges and other customer-related fees


379


395


415


415


400


(4)


(5)

Other


199


271


192


99


343


(27)


(42)

Total non-interest income


1,717


1,843


1,802


1,715


1,776


(7)


(3)

Non-interest expense:















Salaries and associate benefits


2,427


2,266


2,187


1,946


2,026


7


20

Occupancy and equipment


508


554


502


481


513


(8)


(1)

Marketing


897


1,118


978


1,003


918


(20)


(2)

Professional services


324


481


471


458


397


(33)


(18)

Communications and data processing


350


352


349


339


339


(1)


3

Amortization of intangibles


14


25


17


14


14


(44)


—

Other


425


284


445


342


344


50


24

Total non-interest expense


4,945


5,080


4,949


4,583


4,551


(3)


9

Income from continuing operations before income taxes


1,163


1,544


2,187


2,564


2,945


(25)


(61)

Income tax provision


203


312


493


533


542


(35)


(63)

Net income


960


1,232


1,694


2,031


2,403


(22)


(60)

Dividends and undistributed earnings allocated to participating securities(2)


(16)


(14)


(21)


(25)


(28)


14


(43)

Preferred stock dividends


(57)


(57)


(57)


(57)


(57)


—


—

Net income available to common stockholders


$         887


$      1,161


$      1,616


$      1,949


$      2,318


(24)


(62)
























































































2023 Q1 vs



2023

Q1 


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022
Q1

Basic earnings per common share:(2)















Net income per basic common share


$        2.32


$        3.03


$        4.21


$        4.98


$        5.65


(23) %


(59) %

Diluted earnings per common share:(2)















Net income per diluted common share


$        2.31


$        3.03


$        4.20


$        4.96


$        5.62


(24) %


(59) %

Weighted-average common shares outstanding (in millions):















Basic common shares


382.6


382.6


383.4


391.2


410.4


—


(7)

Diluted common shares


383.8


383.7


384.6


392.6


412.2


—


(7)

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets














2023 Q1 vs


(Dollars in millions)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Assets:















Cash and cash equivalents:















Cash and due from banks


$     3,347


$      5,193


$      3,716


$     4,825


$     5,107


(36) %


(34) %

Interest-bearing deposits and other short-term investments


43,166


25,663


21,176


16,728


21,697


68


99

Total cash and cash equivalents


46,513


30,856


24,892


21,553


26,804


51


74

Restricted cash for securitization investors


460


400


399


697


281


15


64

Securities available for sale


81,925


76,919


75,303


83,022


89,076


7


(8)

Loans held for investment:















Unsecuritized loans held for investment


280,093


283,282


277,576


271,339


257,505


(1)


9

Loans held in consolidated trusts


28,743


29,049


26,367


25,045


22,961


(1)


25

Total loans held for investment


308,836


312,331


303,943


296,384


280,466


(1)


10

Allowance for credit losses


(14,318)


(13,240)


(12,209)


(11,491)


(11,308)


8


27

Net loans held for investment


294,518


299,091


291,734


284,893


269,158


(2)


9

Loans held for sale


363


203


1,729


875


1,155


79


(69)

Premises and equipment, net


4,365


4,351


4,265


4,238


4,238


—


3

Interest receivable


2,250


2,104


1,853


1,611


1,479


7


52

Goodwill


14,779


14,777


14,771


14,778


14,784


—


—

Other assets


26,487


26,548


29,286


28,621


27,220


—


(3)

Total assets


$  471,660


$  455,249


$  444,232


$ 440,288


$ 434,195


4


9




























2023 Q1 vs


(Dollars in millions)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Liabilities:















Interest payable


$        621


$        527


$         433


$        333


$        261


18 %


138 %

Deposits:















Non-interest-bearing deposits


31,186


32,203


34,391


37,004


37,781


(3)


(17)

Interest-bearing deposits


318,641


300,789


282,802


270,881


275,648


6


16

Total deposits


349,827


332,992


317,193


307,885


313,429


5


12

Securitized debt obligations


17,813


16,973


15,926


17,466


13,740


5


30

Other debt:















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


542


883


528


440


594


(39)


(9)

Senior and subordinated notes


30,398


30,826


30,615


30,489


26,976


(1)


13

Other borrowings


24


33


7,538


10,543


4,048


(27)


(99)

Total other debt


30,964


31,742


38,681


41,472


31,618


(2)


(2)

Other liabilities


17,782


20,433


21,138


19,722


18,802


(13)


(5)

Total liabilities


417,007


402,667


393,371


386,878


377,850


4


10
















Stockholders' equity:















Preferred stock


0


0


0


0


0


—


—

Common stock


7


7


7


7


7


—


—

Additional paid-in capital, net


34,952


34,725


34,579


34,425


34,286


1


2

Retained earnings


57,898


57,184


56,240


54,836


53,099


1


9

Accumulated other comprehensive loss


(8,540)


(9,916)


(10,704)


(6,916)


(4,093)


(14)


109

Treasury stock, at cost


(29,664)


(29,418)


(29,261)


(28,942)


(26,954)


1


10

Total stockholders' equity


54,653


52,582


50,861


53,410


56,345


4


(3)

Total liabilities and stockholders' equity


$  471,660


$ 455,249


$ 444,232


$  440,288


$ 434,195


4


9

 


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 $405 million in Q1 2023, $321 million in Q4 2022, $222 million in Q3 2022, $211 million in Q2 2022 and $192 million in Q1 2022 for credit card finance charges and fees charged-off as uncollectible.


(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)

Tangible book value per common share is a non-GAAP measure calculated based on TCE 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.


(4)

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


(5)

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


(6)

Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) 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.


(7)

Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.


(8)

Return on average tangible common equity is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average TCE. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.


(9)

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.


(10)

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.


(11)

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.


(12)

Capital ratios as of the end of Q1 2023 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.


(13)

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.


**  

Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




2023 Q1


2022 Q4


2022 Q1

(Dollars in millions, except as noted)


Average
Balance


Interest
Income/
Expense


Yield/Rate(1)


Average
Balance


Interest
Income/
Expense


Yield/Rate(1)


Average
Balance


Interest
Income/
Expense


Yield/Rate

Interest-earning assets:



















Loans, including loans held for sale


$   308,115


$      8,723


11.32 %


$   307,852


$      8,360


10.86 %


$   279,022


$      6,367


9.13 %

Investment securities


89,960


615


2.73


87,110


548


2.52


94,700


402


1.70

Cash equivalents and other


37,124


416


4.49


26,089


250


3.84


20,360


15


0.29

Total interest-earning assets


$   435,199


$      9,754


8.96


$   421,051


$      9,158


8.70


$   394,082


$      6,784


6.89

Interest-bearing liabilities:



















Interest-bearing deposits


$   308,788


$      1,856


2.40


$   292,793


$      1,335


1.82


$   271,823


$         218


0.32

Securitized debt obligations


17,251


211


4.90


16,478


170


4.13


13,740


29


0.84

Senior and subordinated notes


30,136


489


6.49


30,718


430


5.59


26,481


131


1.98

Other borrowings and liabilities


2,335


12


2.08


4,289


26


2.50


3,633


9


1.00

Total interest-bearing liabilities


$   358,510


$      2,568


2.87


$   344,278


$      1,961


2.28


$   315,677


$         387


0.49

Net interest income/spread




$      7,186


6.10




$      7,197


6.42




$      6,397


6.40

Impact of non-interest-bearing funding






0.50






0.42






0.09

Net interest margin






6.60 %






6.84 %






6.49 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics 














2023 Q1 vs


(Dollars in millions, except as noted)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Loans Held for Investment (Period-End)















Credit card:















   Domestic credit card


$   130,980


$   131,581


$   121,279


$   115,004


$   107,987


—


21 %

   International card businesses


6,162


6,149


5,634


5,876


5,975


—


3

Total credit card


137,142


137,730


126,913


120,880


113,962


—


20

Consumer banking:















   Auto


76,652


78,373


79,580


79,926


78,604


(2) %


(2)

   Retail banking


1,499


1,552


1,619


1,605


1,726


(3)


(13)

Total consumer banking


78,151


79,925


81,199


81,531


80,330


(2)


(3)

Commercial banking:















   Commercial and multifamily real estate


37,132


37,453


38,225


37,845


34,354


(1)


8

   Commercial and industrial


56,411


57,223


57,606


56,128


51,820


(1)


9

Total commercial banking


93,543


94,676


95,831


93,973


86,174


(1)


9

Total loans held for investment


$   308,836


$   312,331


$   303,943


$   296,384


$   280,466


(1)


10

Loans Held for Investment (Average)















Credit card:















   Domestic credit card


$   128,562


$   124,816


$   117,467


$   109,962


$   105,536


3 %


22 %

   International card businesses


6,108


5,836


5,890


5,873


5,944


5


3

Total credit card


134,670


130,652


123,357


115,835


111,480


3


21

Consumer banking:















   Auto


77,465


79,108


79,741


79,313


76,892


(2)


1

   Retail banking


1,529


1,592


1,598


1,668


1,797


(4)


(15)

Total consumer banking


78,994


80,700


81,339


80,981


78,689


(2)


—

Commercial banking:















   Commercial and multifamily real estate


37,373


37,848


38,230


35,754


34,671


(1)


8

   Commercial and industrial


56,719


57,681


57,260


53,540


50,502


(2)


12

Total commercial banking


94,092


95,529


95,490


89,294


85,173


(2)


10

Total average loans held for investment


$   307,756


$   306,881


$   300,186


$   286,110


$   275,342


—


12





























2023 Q1 vs



2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Net Charge-Off (Recovery) Rates















Credit card:















   Domestic credit card(2)


4.04 %


3.22 %


2.20 %


2.26 %


2.12 %


82 bps


192 bps

   International card businesses


4.54


4.29


3.30


3.82


3.20


25


134

Total credit card


4.06


3.27


2.25


2.34


2.18


79


188

Consumer banking:















   Auto


1.53


1.66


1.05


0.61


0.66


(13)


87

   Retail banking


2.97


5.15


3.89


3.62


4.31


(218)


(134)

Total consumer banking


1.56


1.73


1.10


0.67


0.75


(17)


81

Commercial banking:















   Commercial and multifamily real estate


0.19


0.05


0.03


(0.08)


—


14


19

   Commercial and industrial


0.03


0.06


0.06


0.29


0.11


(3)


(8)

Total commercial banking


0.09


0.06


0.05


0.14


0.06


3


3

Total net charge-offs


2.21


1.86


1.24


1.18


1.11


35


110

30+ Day Performing Delinquency Rates















Credit card:















   Domestic credit card


3.66 %


3.43 %


2.97 %


2.35 %


2.32 %


23 bps


134 bps

   International card businesses


4.20


4.03


3.90


3.67


3.58


17


62

Total credit card


3.68


3.46


3.01


2.42


2.38


22


130

Consumer banking:















   Auto


5.00


5.62


4.85


4.47


3.85


(62)


115

   Retail banking


0.56


1.02


0.84


0.67


0.74


(46)


(18)

Total consumer banking


4.92


5.53


4.77


4.39


3.78


(61)


114

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















Credit card:















   International card businesses


0.12 %


0.14 %


0.14 %


0.13 %


0.14 %


(2) bps


(2) bps

Total credit card


0.01


0.01


0.01


0.01


0.01


—


—

Consumer banking:















   Auto


0.67


0.76


0.60


0.50


0.41


(9)


26

   Retail banking


2.94


2.49


2.62


2.61


2.63


45


31

Total consumer banking


0.72


0.79


0.64


0.54


0.46


(7)


26

Commercial banking:















   Commercial and multifamily real estate


0.90


0.72


0.64


0.78


0.98


18


(8)

   Commercial and industrial


0.72


0.75


0.53


0.64


0.69


(3)


3

Total commercial banking


0.79


0.74


0.57


0.70


0.81


5


(2)

Total nonperforming loans


0.42


0.43


0.35


0.37


0.38


(1)


4

Total nonperforming assets


0.44


0.45


0.37


0.39


0.40


(1)


4

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

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




Three Months Ended March 31, 2023



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 credit losses:

















Balance as of December 31, 2022


$         9,165


$             380


$         9,545


$         2,187


$             50


$         2,237


$         1,458


$       13,240

Cumulative effects of accounting standards adoption(5)


(40)


(23)


(63)


—


—


—


—


(63)

Balance as of January 1, 2023


9,125


357


9,482


2,187


50


2,237


1,458


13,177

Charge-offs


(1,587)


(101)


(1,688)


(515)


(16)


(531)


(24)


(2,243)

Recoveries


288


31


319


219


5


224


3


546

Net charge-offs


(1,299)


(70)


(1,369)


(296)


(11)


(307)


(21)


(1,697)

Provision for credit losses


2,174


87


2,261


274


1


275


266


2,802

Allowance build (release) for credit losses


875


17


892


(22)


(10)


(32)


245


1,105

Other changes(6)


32


4


36


—


—


—


—


36

Balance as of March 31, 2023


10,032


378


10,410


2,165


40


2,205


1,703


14,318

Reserve for unfunded lending commitments:

















Balance as of December 31, 2022


—


—


—


—


—


—


218


218

Provision (benefit) for losses on unfunded lending commitments


—


—


—


—


—


—


(7)


(7)

Balance as of March 31, 2023


—


—


—


—


—


—


211


211

Combined allowance and reserve as of March 31, 2023


$       10,032


$             378


$       10,410


$         2,165


$             40


$         2,205


$         1,914


$       14,529

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results




Three Months Ended March 31, 2023

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(7)


Other(7)


Total

Net interest income (loss)


$        4,657


$       2,360


$             648


$       (479)


$      7,186

Non-interest income


1,363


135


212


7


1,717

Total net revenue (loss)


6,020


2,495


860


(472)


8,903

Provision (benefit) for credit losses


2,261


275


259


—


2,795

Non-interest expense


3,038


1,283


530


94


4,945

Income (loss) from continuing operations before income taxes


721


937


71


(566)


1,163

Income tax provision (benefit)


172


221


17


(207)


203

Income (loss) from continuing operations, net of tax


$           549


$          716


$               54


$       (359)


$         960














Three Months Ended December 31, 2022

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(7)


Other(7)


Total

Net interest income (loss)


$        4,533


$       2,394


$             520


$       (250)


$      7,197

Non-interest income (loss)


1,449


139


261


(6)


1,843

Total net revenue (loss)


5,982


2,533


781


(256)


9,040

Provision (benefit) for credit losses


1,878


477


62


(1)


2,416

Non-interest expense


3,069


1,450


555


6


5,080

Income (loss) from continuing operations before income taxes


1,035


606


164


(261)


1,544

Income tax provision (benefit)


245


144


39


(116)


312

Income (loss) from continuing operations, net of tax


$           790


$          462


$             125


$       (145)


$      1,232














Three Months Ended March 31, 2022

(Dollars in millions)


Credit
Card


Consumer
Banking


Commercial
Banking(7)


Other(7)


Total

Net interest income (loss)


$        3,839


$       2,113


$             607


$       (162)


$      6,397

Non-interest income (loss)


1,458


105


277


(64)


1,776

Total net revenue (loss)


5,297


2,218


884


(226)


8,173

Provision (benefit) for credit losses


545


130


8


(6)


677

Non-interest expense


2,783


1,236


488


44


4,551

Income (loss) from continuing operations before income taxes


1,969


852


388


(264)


2,945

Income tax provision (benefit)


469


202


92


(221)


542

Income (loss) from continuing operations, net of tax


$        1,500


$          650


$             296


$         (43)


$      2,403

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business














2023 Q1 vs


(Dollars in millions, except as noted)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Credit Card















Earnings:















Net interest income


$      4,657


$    4,533


$    4,313


$    3,899


$    3,839


3 %


21 %

Non-interest income


1,363


1,449


1,454


1,410


1,458


(6)


(7)

Total net revenue


6,020


5,982


5,767


5,309


5,297


1


14

Provision for credit losses


2,261


1,878


1,261


581


545


20


**

Non-interest expense


3,038


3,069


3,004


2,771


2,783


(1)


9

Income from continuing operations before income taxes


721


1,035


1,502


1,957


1,969


(30)


(63)

Income tax provision


172


245


356


466


469


(30)


(63)

Income from continuing operations, net of tax


$         549


$        790


$     1,146


$     1,491


$     1,500


(31)


(63)

Selected performance metrics:















Period-end loans held for investment


$  137,142


$ 137,730


$ 126,913


$ 120,880


$ 113,962


—


20

Average loans held for investment


134,670


130,652


123,357


115,835


111,480


3


21

Average yield on loans outstanding(1)


17.98 %


17.69 %


16.74 %


15.24 %


14.97 %


29 bps


301 bps

Total net revenue margin(8)


17.88


18.32


18.70


18.33


18.56


(44)


(68)

Net charge-off rate 


4.06


3.27


2.25


2.34


2.18


79


188

30+ day performing delinquency rate


3.68


3.46


3.01


2.42


2.38


22


130

30+ day delinquency rate


3.69


3.46


3.02


2.42


2.39


23


130

Nonperforming loan rate(3)


0.01


0.01


0.01


0.01


0.01


—


—

Purchase volume(9)


$  141,658


$ 155,633


$ 149,497


$ 148,491


$ 133,662


(9) %


6 %














2023 Q1 vs

(Dollars in millions, except as noted)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Domestic Card















Earnings:















Net interest income


$      4,390


$     4,280


$    4,065


$     3,651


$     3,620


3 %


21 %

Non-interest income


1,298


1,392


1,383


1,340


1,248


(7)


4

Total net revenue


5,688


5,672


5,448


4,991


4,868


—


17

Provision for credit losses


2,174


1,800


1,167


494


559


21


**

Non-interest expense


2,847


2,866


2,803


2,594


2,564


(1)


11

Income from continuing operations before income taxes


667


1,006


1,478


1,903


1,745


(34)


(62)

Income tax provision


157


238


351


450


414


(34)


(62)

Income from continuing operations, net of tax


$         510


$        768


$     1,127


$     1,453


$     1,331


(34)


(62)

Selected performance metrics:















Period-end loans held for investment


$  130,980


$ 131,581


$ 121,279


$ 115,004


$ 107,987


—


21

Average loans held for investment


128,562


124,816


117,467


109,962


105,536


3


22

Average yield on loans outstanding(1)


17.88 %


17.58 %


16.61 %


15.03 %


14.82 %


30 bps


306 bps

Total net revenue margin(8)


17.70


18.18


18.55


18.16


18.28


(48)


(58)

Net charge-off rate(2)


4.04


3.22


2.20


2.26


2.12


82


192

30+ day performing delinquency rate


3.66


3.43


2.97


2.35


2.32


23


134

Purchase volume(9)


$  138,310


$ 151,995


$ 145,805


$ 144,668


$ 126,284


(9) %


10 %

Refreshed FICO scores:(10)















Greater than 660


68 %


69 %


70 %


70 %


70 %


(1)


(2)

660 or below


32


31


30


30


30


1


2

Total


100 %


100 %


100 %


100 %


100 %





 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business














2023 Q1 vs

 

(Dollars in millions, except as noted)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Consumer Banking















Earnings:















Net interest income


$    2,360


$     2,394


$     2,311


$    2,147


$    2,113


(1) %


12 %

Non-interest income


135


139


129


96


105


(3)


29

Total net revenue


2,495


2,533


2,440


2,243


2,218


(2)


12

Provision for credit losses


275


477


285


281


130


(42)


112

Non-interest expense


1,283


1,450


1,340


1,286


1,236


(12)


4

Income from continuing operations before income taxes


937


606


815


676


852


55


10

Income tax provision


221


144


193


160


202


53


9

Income from continuing operations, net of tax


$        716


$        462


$        622


$        516


$        650


55


10

Selected performance metrics:















Period-end loans held for investment


$   78,151


$   79,925


$   81,199


$   81,531


$   80,330


(2)


(3)

Average loans held for investment


78,994


80,700


81,339


80,981


78,689


(2)


—

Average yield on loans held for investment(1)


7.40 %


7.31 %


7.20 %


7.08 %


7.17 %


9 bps


23 bps

Auto loan originations


$     6,211


$     6,635


$     8,289


$   10,328


$   11,713


(6) %


(47) %

Period-end deposits


291,163


270,592


256,661


255,904


258,359


8


13

Average deposits


278,772


262,844


255,843


254,336


255,265


6


9

Average deposits interest rate


1.96 %


1.42 %


0.79 %


0.38 %


0.29 %


54 bps


167 bps

Net charge-off rate


1.56


1.73


1.10


0.67


0.75


(17)


81

30+ day performing delinquency rate


4.92


5.53


4.77


4.39


3.78


(61)


114

30+ day delinquency rate


5.46


6.18


5.28


4.81


4.13


(72)


133

Nonperforming loan rate(3)


0.72


0.79


0.64


0.54


0.46


(7)


26

Nonperforming asset rate(4)


0.78


0.87


0.71


0.60


0.52


(9)


26

Auto—At origination FICO scores:(11)















Greater than 660


52 %


53 %


52 %


52 %


51 %


(1) %


1 %

621 - 660


20


20


20


20


20


—


—

620 or below


28


27


28


28


29


1


(1)

Total


100 %


100 %


100 %


100 %


100 %





 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business














2023 Q1 vs


(Dollars in millions, except as noted)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Commercial Banking















Earnings:















Net interest income(12)


$       648


$        520


$       699


$       635


$       607


25 %


7 %

Non-interest income


212


261


319


272


277


(19)


(23)

Total net revenue(7)


860


781


1,018


907


884


10


(3)

Provision for credit losses


259


62


123


222


8


**


**

Non-interest expense


530


555


542


485


488


(5)


9

Income from continuing operations before income taxes


71


164


353


200


388


(57)


(82)

Income tax provision


17


39


83


48


92


(56)


(82)

Income from continuing operations, net of tax


$          54


$        125


$        270


$        152


$        296


(57)


(82)

Selected performance metrics:















Period-end loans held for investment


$   93,543


$   94,676


$   95,831


$   93,973


$   86,174


(1)


9

Average loans held for investment


94,092


95,529


95,490


89,294


85,173


(2)


10

Average yield on loans held for investment(1)(7)


6.31 %


5.63 %


4.40 %


3.18 %


2.66 %


68 bps


365 bps

Period-end deposits


$   38,380


$   40,808


$   41,058


$   38,844


$   45,232


(6) %


(15) %

Average deposits


39,941


42,779


39,799


40,536


45,008


(7)


(11)

Average deposits interest rate


2.34 %


1.80 %


0.83 %


0.19 %


0.12 %


54 bps


222 bps

Net charge-off rate


0.09


0.06


0.05


0.14


0.06


3


3

Nonperforming loan rate(3)


0.79


0.74


0.57


0.70


0.81


5


(2)

Nonperforming asset rate(4)


0.79


0.74


0.57


0.70


0.81


5


(2)

Risk category:(13)















Noncriticized


$   85,964


$   87,620


$   89,559


$   88,349


$   80,586


(2) %


7 %

Criticized performing


6,839


6,355


5,722


4,969


4,893


8


40

Criticized nonperforming


740


701


550


655


695


6


6

Total commercial banking loans


$   93,543


$   94,676


$   95,831


$   93,973


$   86,174


(1)


9

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















Noncriticized


91.90 %


92.55 %


93.46 %


94.01 %


93.51 %


(65) bps


(161) bps

Criticized performing


7.31


6.71


5.97


5.29


5.68


60


163

Criticized nonperforming


0.79


0.74


0.57


0.70


0.81


5


(2)

Total commercial banking loans


100.00 %


100.00 %


100.00 %


100.00 %


100.00 %





 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total














2023 Q1 vs


(Dollars in millions)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1


2022

Q4


2022

Q1

Other















Earnings:















Net interest loss(12)


$       (479)


$       (250)


$       (320)


$       (164)


$       (162)


92 %


196 %

Non-interest income (loss)


7


(6)


(100)


(63)


(64)


**


**

Total net loss(7)


(472)


(256)


(420)


(227)


(226)


84


109

Provision (benefit) for credit losses


—


(1)


—


1


(6)


**


**

Non-interest expense(14)


94


6


63


41


44


**


114

Loss from continuing operations before income taxes


(566)


(261)


(483)


(269)


(264)


117


114

Income tax benefit


(207)


(116)


(139)


(141)


(221)


78


(6)

Loss from continuing operations, net of tax


$        (359)


$        (145)


$        (344)


$        (128)


$          (43)


148


**

Selected performance metrics:















Period-end deposits


$    20,284


$    21,592


$    19,474


$    13,137


$      9,838


(6)


106

Average deposits


21,410


20,935


16,286


11,082


9,324


2


130

Total















Earnings:















Net interest income


$      7,186


$      7,197


$      7,003


$      6,517


$      6,397


—


12 %

Non-interest income


1,717


1,843


1,802


1,715


1,776


(7) %


(3)

Total net revenue


8,903


9,040


8,805


8,232


8,173


(2)


9

Provision for credit losses


2,795


2,416


1,669


1,085


677


16


**

Non-interest expense


4,945


5,080


4,949


4,583


4,551


(3)


9

Income from continuing operations before income taxes


1,163


1,544


2,187


2,564


2,945


(25)


(61)

Income tax provision


203


312


493


533


542


(35)


(63)

Income from continuing operations, net of tax


$         960


$      1,232


$      1,694


$      2,031


$      2,403


(22)


(60)

Selected performance metrics:















Period-end loans held for investment


$  308,836


$  312,331


$  303,943


$  296,384


$  280,466


(1)


10

Average loans held for investment


307,756


306,881


300,186


286,110


275,342


—


12

Period-end deposits


349,827


332,992


317,193


307,885


313,429


5


12

Average deposits


340,123


326,558


311,928


305,954


309,597


4


10

 

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)



(1)

Average yield is calculated based on annualized interest income for the period divided by average loans during the period. Annualized interest income does not include any allocations, such as funds transfer pricing. Average yield is calculated using whole dollar values for average balances and interest income/expense. Accordingly, total interest earning assets less total interest bearing liabilities may not total net interest income/spread.

(2)

In August 2022, in addition to our normal recovery activity, we sold a pool of charged-off loans that resulted in elevated debt sale recovery activity of approximately $33 million, which decreased the Domestic Credit Card net charge-off rate for the third quarter of 2022 by approximately 11 basis points. Excluding the impact, the Domestic Credit Card net charge-off rate would have been 2.31% for the third quarter of 2022.

(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. For Commercial Banking, loans categorized as nonperforming are considered criticized nonperforming.

(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)

Impact from the adoption of ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures as of January 1, 2023. 

(6)

Primarily represents the initial allowance for purchased credit-deteriorated loans and foreign currency translation adjustments. The initial allowance of purchased credit-deteriorated loans was $32 million for the three months ended March 31, 2023.

(7)

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.

(8)

Total net revenue margin is calculated based on total net revenue for the period divided by average loans outstanding during the period.

(9)

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

(10)

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. 

(11)

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.

(12)

In the fourth quarter of 2022, an internal funds transfer pricing impact of $176 million decreased net interest income in the Commercial Banking business and increased the Other category, and was therefore neutral to the company.

(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.

**

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)


March 31,

2023


December 31,

2022


September 30,

2022


June 30,

2022


March 31,

2022

Regulatory Capital Metrics











Common equity excluding AOCI


$        59,546


$        59,450


$        58,516


$         57,278


$        57,390

Adjustments:











AOCI, net of tax(2)


(3)


(17)


(120)


(72)


(20)

Goodwill, net of related deferred tax liabilities


(14,538)


(14,540)


(14,537)


(14,548)


(14,559)

Other Intangible and deferred tax assets, net of deferred tax liabilities


(371)


(162)


(194)


(95)


(110)

Common equity Tier 1 capital


$        44,634


$        44,731


$        43,665


$         42,563


$        42,701

Tier 1 capital


$        49,479


$        49,576


$        48,510


$         47,408


$        47,547

Total capital(3)


56,611


56,714


55,938


55,100


55,059

Risk-weighted assets


356,089


357,920


356,801


351,746


336,739

Adjusted average assets(4)


455,477


444,704


439,479


427,446


418,957

Capital Ratios











Common equity Tier 1 capital(5)


12.5 %


12.5 %


12.2 %


12.1 %


12.7 %

Tier 1 capital(6)


13.9


13.9


13.6


13.5


14.1

Total capital(7)


15.9


15.8


15.7


15.7


16.4

Tier 1 leverage(4)


10.9


11.1


11.0


11.1


11.3

TCE(8)


7.6


7.5


7.2


7.9


8.7

 

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, however, they may not be comparable to similarly-titled measures reported by other companies. 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.













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


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1

Adjusted diluted earnings per share ("EPS"):











Net income available to common stockholders (GAAP)


$           887


$       1,161


$        1,616


$           1,949


$           2,318

Insurance recoveries and legal reserve activity


—


(177)


—


—


—

Restructuring Charges


—


72


—


—


—

Adjusted net income available to common stockholders before income tax impacts (non-GAAP)


887


1,056


1,616


1,949


2,318

Income tax impacts


—


25


—


—


—

Adjusted net income available to common stockholders (non-GAAP)


$           887


$       1,081


$        1,616


$           1,949


$           2,318












Diluted weighted-average common shares outstanding (in millions) (GAAP)


383.8


383.7


384.6


392.6


412.2












Diluted EPS (GAAP)


$          2.31


$         3.03


$          4.20


$             4.96


$             5.62

Impact of adjustments noted above


—


(0.21)


—


—


—

Adjusted diluted EPS (non-GAAP)


$          2.31


$         2.82


$          4.20


$             4.96


$             5.62












Adjusted efficiency ratio:











Non-interest expense (GAAP)


$        4,945


$          5,080


$        4,949


$           4,583


$           4,551

Insurance recoveries and legal reserve activity


—


177


—


—


—

Restructuring Charges


—


(72)


—


—


—

Adjusted non-interest expense (non-GAAP)


$        4,945


$          5,185


$        4,949


$           4,583


$           4,551












Total net revenue (GAAP)


$        8,903


$          9,040


$        8,805


$           8,232


$           8,173












Efficiency ratio (GAAP)


55.54 %


56.19 %


56.21 %


55.67 %


55.68 %

Impact of adjustments noted above


—


          117 bps


—


—


—

Adjusted efficiency ratio (non-GAAP)


55.54 %


57.36 %


56.21 %


55.67 %


55.68 %












Adjusted operating efficiency ratio:











Operating expense (GAAP)


$        4,048


$          3,962


$        3,971


$           3,580


$           3,633

Insurance recoveries and legal reserve activity


—


177


—


—


—

Restructuring Charges


—


(72)


—


—


—

Adjusted operating expense (non-GAAP)


$        4,048


$          4,067


$        3,971


$           3,580


$           3,633












Total net revenue (GAAP)


$        8,903


$          9,040


$        8,805


$           8,232


$           8,173












Operating efficiency ratio (GAAP)


45.47 %


43.83 %


45.10 %


43.49 %


44.45 %

Impact of adjustments noted above


—


          116 bps


—


—


—

Adjusted operating efficiency ratio (non-GAAP)


45.47 %


44.99 %


45.10 %


43.49 %


44.45 %

 

Reconciliation of Non-GAAP Measures


The following summarizes our non-GAAP measures. While these non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the operating performance and capital position of financial services companies, they may not be comparable to similarly-titled measures reported by other companies. The following table presents reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.












(Dollars in millions)


2023

Q1


2022

Q4


2022

Q3


2022

Q2


2022

Q1

Pre- Provision Earnings











Total net revenue


$        8,903


$         9,040


$         8,805


$         8,232


$         8,173

Non-interest expense


(4,945)


(5,080)


(4,949)


(4,583)


(4,551)

Pre-provision earnings(9)


$        3,958


$         3,960


$         3,856


$         3,649


$         3,622

Tangible Common Equity (Period-End)











Stockholders' equity


$      54,653


$       52,582


$       50,861


$       53,410


$       56,345

Goodwill and other intangible assets(10)


(15,098)


(14,902)


(14,932)


(14,850)


(14,883)

Noncumulative perpetual preferred stock


(4,845)


(4,845)


(4,845)


(4,845)


(4,845)

Tangible common equity(11)


$      34,710


$       32,835


$       31,084


$       33,715


$       36,617

Tangible Common Equity (Average)











Stockholders' equity


$      54,773


$       52,439


$       54,541


$       54,165


$       59,437

Goodwill and other intangible assets(10)


(14,984)


(14,926)


(14,916)


(14,875)


(14,904)

Noncumulative perpetual preferred stock


(4,845)


(4,845)


(4,845)


(4,845)


(4,845)

Tangible common equity(11)


$      34,944


$       32,668


$       34,780


$       34,445


$       39,688

Return on Tangible Common Equity (Average)











Net income available to common stockholders


$           887


$         1,161


$         1,616


$         1,949


$         2,318

Tangible common equity (Average)


34,944


32,668


34,780


34,445


39,688

Return on tangible common equity(11)(12)


10.15 %


14.22 %


18.59 %


22.63 %


23.36 %

Tangible Assets (Period-End)











Total assets


$     471,660


$     455,249


$     444,232


$     440,288


$     434,195

Goodwill and other intangible assets(10)


(15,098)


(14,902)


(14,932)


(14,850)


(14,883)

Tangible assets(11)


$     456,562


$     440,347


$     429,300


$     425,438


$     419,312

Tangible Assets (Average)











Total assets


$     462,324


$     449,659


$     447,088


$     435,327


$     430,372

Goodwill and other intangible assets(10)


(14,984)


(14,926)


(14,916)


(14,875)


(14,904)

Tangible assets(11)


$     447,340


$     434,733


$     432,172


$     420,452


$     415,468

Return on Tangible Assets (Average)











Net income


$            960


$         1,232


$         1,694


$         2,031


$         2,403

Tangible Assets (Average)


447,340


434,733


432,172


420,452


415,468

Return on tangible assets(11)(13)


0.86 %


1.13 %


1.57 %


1.93 %


2.31 %

TCE Ratio











Tangible common equity (Period-end)


$       34,710


$       32,835


$       31,084


$       33,715


$       36,617

Tangible Assets (Period-end)


456,562


440,347


429,300


425,438


419,312

TCE Ratio(11)


7.6 %


7.5 %


7.2 %


7.9 %


8.7 %

Tangible Book Value per Share











Tangible common equity (Period-end)


$       34,710


$       32,835


$       31,084


$       33,715


$       36,617

Outstanding Common Shares


382.0


381.3


382.0


383.8


399.0

Tangible book value per common share(11)


$         90.86


$         86.11


$         81.38


$         87.84


$         91.77

__________

(1)

Regulatory capital metrics and capital ratios as of March 31, 2023 are preliminary and therefore subject to change.      

(2)

Excludes certain components of AOCI as permitted under the Tailoring Rules.

(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)

Management believes that this financial metric is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.

(10)

Includes impact of related deferred taxes.

(11)

Management believes that this financial metric is useful in assessing capital adequacy and the level of returns generated.

(12)

Return on average tangible common equity is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average TCE.

(13)

Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period divided by average tangible assets for the period.

 

Cision View original content:https://www.prnewswire.com/news-releases/capital-one-reports-first-quarter-2023-net-income-of-960-million-or-2-31-per-share-301810102.html

SOURCE Capital One Financial Corporation