Company Announcements

Capital One Reports Third Quarter 2021 Net Income of $3.1 billion, or $6.78 per share

MCLEAN, Va., Oct. 26, 2021 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2021 of $3.1 billion, or $6.78 per diluted common share, compared with net income of $3.5 billion, or $7.62 per diluted common share in the second quarter of 2021, and with a net income of $2.4 billion, or $5.06 per diluted common share in the third quarter of 2020. Excluding adjusting items, net income for the third quarter of 2021 was $6.86 per diluted common share.(1)

Capital_One_Logo

"Our modern technology stack is powering our performance and our opportunity," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "It's setting us up to capitalize on the accelerating digital revolution in banking, and it's the engine that drives enduring value creation over the long-term."

The quarter included the following adjusting item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact



Legal reserve activity

$

45


$

0.08




All comparisons below are for the third quarter of 2021 compared with the second quarter of 2021 unless otherwise noted.

Third Quarter 2021 Income Statement Summary: ·      

  • Total net revenue increased 6 percent to $7.8 billion.
  • Total non-interest expense increased 6 percent to $4.2 billion:
    • 21 percent increase in marketing.
    • 3 percent increase in operating expenses.
  • Pre-provision earnings increased 7 percent to $3.6 billion.(2)
  • Provision (benefit) for credit losses increased $818.0 million to $(342.0) million:
    • Net charge-offs of $426.0 million.
    • $770.0 million loan reserve release.
  • Net interest margin of 6.35 percent, an increase of 46 basis points.
  • Efficiency ratio of 53.46 percent.
    • Efficiency ratio excluding adjusting items of 52.89 percent.(1)
  • Operating efficiency ratio of 43.87 percent.
    • Operating efficiency ratio excluding adjusting items of 43.30 percent.(1)

Third Quarter 2021 Balance Sheet Summary: ·      

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 13.8 percent at September 30, 2021.
  • Period-end loans held for investment in the quarter increased $11.8 billion, or 5 percent, to $261.4 billion.
    • Credit Card period-end loans increased $4.0 billion, or 4 percent, to $105.0 billion.
      • Domestic Card period-end loans increased $3.9 billion, or 4 percent, to $99.3 billion.
    • Consumer Banking period-end loans increased $2.4 billion, or 3 percent, to $77.1 billion.
      • Auto period-end loans increased $3.0 billion, or 4 percent, to $74.7 billion.
    • Commercial Banking period-end loans increased $5.4 billion, or 7 percent, to $79.2 billion.
  • Average loans held for investment in the quarter increased $6.6 billion, or 3 percent, to $253.1 billion.
    • Credit Card average loans increased $2.4 billion, or 2 percent, to $102.0 billion.
      • Domestic Card average loans increased $4.8 billion, or 5 percent, to $96.3 billion.
    • Consumer Banking average loans increased $3.3 billion, or 5 percent, to $76.0 billion.
      • Auto average loans increased $3.8 billion, or 5 percent, to $73.3 billion.
    • Commercial Banking average loans increased $1.0 billion, or 1 percent, to $75.1 billion.
  • Period-end total deposits decreased $370 million, or less than 1 percent, to $305.9 billion, while average deposits decreased $3.2 billion, or 1 percent, to $305.0 billion.
  • Interest-bearing deposits rate paid decreased 1 basis point to 0.34 percent. 

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on October 26, 2021 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 November 9, 2021 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, 2020.

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 $305.9 billion in deposits and $425.4 billion in total assets as of September 30, 2021. 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. Management believes that this financial metric is useful in enabling investors and others to assess the Company's ability to generate income to cover credit losses through a credit cycle, which can vary significantly between periods.

 

Exhibit 99.2


Capital One Financial Corporation

Financial Supplement(1)(2)

Third Quarter 2021

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

7


Table 5:

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

10


Table 6:

Average Balances, Net Interest Income and Net Interest Margin

11


Table 7:

Loan Information and Performance Statistics

12


Table 8:

Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

14

Business Segment Results



Table 9:

Financial Summary—Business Segment Results

15


Table 10:

Financial & Statistical Summary—Credit Card Business

16


Table 11:

Financial & Statistical Summary—Consumer Banking Business

18


Table 12:

Financial & Statistical Summary—Commercial Banking Business

19


Table 13:

Financial & Statistical Summary—Other and Total

20

Other



Table 14:

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

21


Table 15:

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

22





(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation.
Investors should refer to our Quarterly Report on Form 10-Q for the period ended September 30, 2021 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














2021 Q3 vs.


Nine Months Ended September 30,

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


2021


2021


2021


2020


2020


2021


2020






2021 vs.


Q3


Q2


Q1


Q4


Q3


Q2


Q3


2021


2020


2020

Income Statement





















Net interest income


$

6,156



$

5,743



$

5,822



$

5,873



$

5,555



7

%


11

%


$

17,721



$

17,040



4

%

Non-interest income


1,674



1,631



1,291



1,464



1,826



3



(8)



4,596



4,146



11


Total net revenue(1)


7,830



7,374



7,113



7,337



7,381



6



6



22,317



21,186



5


Provision (benefit) for credit losses


(342)



(1,160)



(823)



264



331



(71)



**


(2,325)



10,000



**

Non-interest expense:





















Marketing


751



620



501



563



283



21



165



1,872



1,047



79


Operating expense


3,435



3,346



3,239



3,446



3,265



3



5



10,020



10,000




Total non-interest expense


4,186



3,966



3,740



4,009



3,548



6



18



11,892



11,047



8


Income from continuing operations before income taxes


3,986



4,568



4,196



3,064



3,502



(13)



14



12,750



139



**

Income tax provision (benefit)


882



1,031



869



496



1,096



(14)



(20)



2,782



(10)



**

Income from continuing operations, net of tax


3,104



3,537



3,327



2,568



2,406



(12)



29



9,968



149



**

Loss from discontinued operations, net of tax




(1)



(2)



(2)





**




(3)



(1)



**

Net income


3,104



3,536



3,325



2,566



2,406



(12)



29



9,965



148



**

Dividends and undistributed earnings allocated to participating
securities(2)


(26)



(30)



(28)



(19)



(20)



(13)



30



(84)



(5)



**

Preferred stock dividends


(79)



(60)



(61)



(68)



(67)



32



18



(200)



(212)



(6)


Issuance cost for redeemed preferred stock(3)


(12)







(17)





**


**


(12)



(22)



(45)


Net income (loss) available to common stockholders


$

2,987



$

3,446



$

3,236



$

2,462



$

2,319



(13)



29



$

9,669



$

(91)



**

Common Share Statistics





















Basic earnings per common share:(2)





















Net income (loss) from continuing operations


$

6.81



$

7.65



$

7.06



$

5.36



$

5.07



(11)

%


34

%


$

21.53



$

(0.20)



**

Income (loss) from discontinued operations
















(0.01)





**

Net income (loss) per basic common share


$

6.81



$

7.65



$

7.06



$

5.36



$

5.07



(11)



34



$

21.52



$

(0.20)



**

Diluted earnings per common share:(2)





















Net income (loss) from continuing operations


$

6.78



$

7.62



$

7.03



$

5.35



$

5.06



(11)

%


34

%


$

21.45



$

(0.20)



**

Income (loss) from discontinued operations
















(0.01)





**

Net income (loss) per diluted common share


$

6.78



$

7.62



$

7.03



$

5.35



$

5.06



(11)



34



$

21.44



$

(0.20)



**

Weighted-average common shares outstanding (in millions):





















Basic


438.8



450.6



458.6



459.1



457.8



(3)

%


(4)

%


449.2



457.4



(2)

%

Diluted


440.5



452.3



460.1



460.2



458.5



(3)



(4)



450.9



457.4



(1)


Common shares outstanding (period-end, in millions)


430.4



446.1



456.8



459.0



457.4



(4)



(6)



430.4



457.4



(6)


Dividends declared and paid per common share


$

1.20



$

0.40



$

0.40



$

0.10



$

0.10



**


**


$

2.00



$

0.90



122


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


99.60



97.20



90.96



88.34



83.67



2



19



99.60



83.67



19













































2021 Q3 vs.


Nine Months Ended September 30,

(Dollars in millions)


2021


2021


2021


2020


2020


2021


2020






2021 vs.


Q3


Q2


Q1


Q4


Q3


Q2


Q3


2021


2020


2020

Balance Sheet (Period-End)





















Loans held for investment


$

261,390



$

249,597



$

243,131



$

251,624



$

248,223



5

%


5

%


$

261,390



$

248,223



5

%

Interest-earning assets


387,208



387,295



392,485



388,917



390,040





(1)



387,208



390,040



(1)


Total assets


425,377



423,420



425,175



421,602



421,883





1



425,377



421,883



1


Interest-bearing deposits


269,134



271,314



276,325



274,300



276,092



(1)



(3)



269,134



276,092



(3)


Total deposits


305,938



306,308



310,328



305,442



305,725







305,938



305,725




Borrowings


37,501



36,343



38,450



40,539



42,795



3



(12)



37,501



42,795



(12)


Common equity


57,632



58,136



56,341



55,356



53,093



(1)



9



57,632



53,093



9


Total stockholders' equity


63,544



64,624



61,188



60,204



58,424



(2)



9



63,544



58,424



9


Balance Sheet (Average Balances)





















Loans held for investment


$

253,101



$

246,463



$

243,937



$

247,689



$

249,511



3

%


1

%


$

247,867



$

255,232



(3)

%

Interest-earning assets


387,766



390,129



388,572



388,252



391,451



(1)



(1)



388,820



375,041



4


Total assets


424,506



424,099



421,808



420,011



422,854







423,457



408,233



4


Interest-bearing deposits


269,278



273,476



273,358



274,142



276,339



(2)



(3)



272,022



259,631



5


Total deposits


305,035



308,217



305,056



304,513



305,516



(1)





306,102



286,242



7


Borrowings


37,464



37,054



39,911



40,662



44,161



1



(15)



38,134



48,577



(21)


Common equity


58,230



56,885



55,775



54,220



51,995



2



12



56,972



52,529



8


Total stockholders' equity


64,682



62,376



60,623



59,389



57,223



4



13



62,575



57,802



8


               

               


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated














2021 Q3 vs.


Nine Months Ended September 30,

(Dollars in millions, except as noted)


2021


2021


2021


2020


2020


2021


2020






2021 vs.


Q3


Q2


Q1


Q4


Q3


Q2


Q3


2021


2020


2020

Performance Metrics





















Net interest income growth (period over period)


7

%


(1)

%


(1)

%


6

%


2

%


**


**


4

%


(1)

%


**

Non-interest income growth (period over period)


3



26



(12)



(20)



67



**


**


11



7



**

Total net revenue growth (period over period)


6



4



(3)



(1)



13



**


**


5





**

Total net revenue margin(5)


8.08



7.56



7.32



7.56



7.54



52

bps


54

bps


7.65



7.53



12

bps

Net interest margin(6)


6.35



5.89



5.99



6.05



5.68



46



67



6.08



6.06



2


Return on average assets


2.92



3.34



3.16



2.45



2.28



(42)



64



3.14



0.05



309


Return on average tangible assets(7)


3.03



3.46



3.27



2.54



2.36



(43)



67



3.25



0.05



320


Return on average common equity(8)


20.52



24.24



23.22



18.18



17.84



(372)



268



22.64



(0.23)



23

%

Return on average tangible common equity(9)


27.50



32.75



31.61



25.02



24.98



(5)

%


252



30.57



(0.32)



31


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


6.62



6.44



6.13



6.47



5.69



18

bps


93



6.40



5.77



63

bps

Efficiency ratio(10)


53.46



53.78



52.58



54.64



48.07



(32)



5

%


53.29



52.14



115


Operating efficiency ratio(11)


43.87



45.38



45.54



46.97



44.24



(151)



(37)

bps


44.90



47.20



(230)


Effective income tax rate for continuing operations


22.1



22.6



20.7



16.2



31.3



(50)



(9)

%


21.8



(7.2)



29

%

Employees (period-end, in thousands)


50.8



52.0



51.7



52.0



52.5



(2)

%


(3)



50.8



52.5



(3)


Credit Quality Metrics





















Allowance for credit losses


$

11,573



$

12,346



$

14,017



$

15,564



$

16,129



(6)

%


(28)

%


$

11,573



$

16,129



(28)

%

Allowance coverage ratio


4.43

%


4.95

%


5.77

%


6.19

%


6.50

%


(52)

bps


(207)

bps


4.43

%


6.50

%


(207)

bps

Net charge-offs


$

426



$

541



$

740



$

856



$

1,073



(21)

%


(60)

%


$

1,707



$

4,369



(61)

%

Net charge-off rate(12)


0.67

%


0.88

%


1.21

%


1.38

%


1.72

%


(21)

bps


(105)

bps


0.92

%


2.28

%


(136)

bps

30+ day performing delinquency rate


1.97



1.75



1.82



2.41



1.97



22





1.97



1.97




30+ day delinquency rate


2.13



1.89



1.98



2.61



2.22



24



(9)



2.13



2.22



(9)


Capital Ratios(13)





















Common equity Tier 1 capital


13.8

%


14.5

%


14.6

%


13.7

%


13.0

%


(70)

bps


80

bps


13.8

%


13.0

%


80

bps

Tier 1 capital


15.7



16.6



16.2



15.3



14.8



(90)



90



15.7



14.8



90


Total capital


18.2



18.8



18.6



17.7



17.3



(60)



90



18.2



17.3



90


Tier 1 leverage


12.2



12.4



11.7



11.2



10.6



(20)



160



12.2



10.6



160


Tangible common equity ("TCE")(14)


10.4



10.6



10.1



10.0



9.4



(20)



100



10.4



9.4



100


 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income














2021 Q3 vs.


Nine Months Ended September 30,



2021


2021


2021


2020


2020


2021


2020






2021 vs.

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


Q3


Q2


Q1


Q4


Q3


Q2


Q3


2021


2020


2020

Interest income:





















Loans, including loans held for sale


$

6,205



$

5,753



$

5,854



$

5,954



$

5,758



8

%


8

%


$

17,812



$

18,120



(2)

%

Investment securities


317



370



391



422



443



(14)



(28)



1,078



1,455



(26)


Other


16



16



16



15



14





14



48



67



(28)


Total interest income


6,538



6,139



6,261



6,391



6,215



6



5



18,938



19,642



(4)


Interest expense:





















Deposits


228



237



269



347



476



(4)



(52)



734



1,818



(60)


Securitized debt obligations


29



28



32



34



43



4



(33)



89



198



(55)


Senior and subordinated notes


116



122



129



128



132



(5)



(12)



367



551



(33)


Other borrowings


9



9



9



9



9







27



35



(23)


Total interest expense


382



396



439



518



660



(4)



(42)



1,217



2,602



(53)


Net interest income


6,156



5,743



5,822



5,873



5,555



7



11



17,721



17,040



4


Provision (benefit) for credit losses


(342)



(1,160)



(823)



264



331



(71)



**


(2,325)



10,000



**

Net interest income after provision for credit losses


6,498



6,903



6,645



5,609



5,224



(6)



24



20,046



7,040



185


Non-interest income:





















Interchange fees, net


1,022



1,016



817



818



775



1



32



2,855



2,199



30


Service charges and other customer-related fees


407



384



352



338



320



6



27



1,143



905



26


Net securities gains


2





4





25





(92)



6



25



(76)


Other


243



231



118



308



706



5



(66)



592



1,017



(42)


Total non-interest income


1,674



1,631



1,291



1,464



1,826



3



(8)



4,596



4,146



11


Non-interest expense:





















Salaries and associate benefits


1,852



1,781



1,847



1,755



1,719



4



8



5,480



5,050



9


Occupancy and equipment


481



523



472



572



506



(8)



(5)



1,476



1,546



(5)


Marketing


751



620



501



563



283



21



165



1,872



1,047



79


Professional services


358



341



292



394



327



5



9



991



918



8


Communications and data processing


319



315



302



295



310



1



3



936



920



2


Amortization of intangibles


5



5



6



8



14





(64)



16



52



(69)


Other


420



381



320



422



389



10



8



1,121



1,514



(26)


Total non-interest expense


4,186



3,966



3,740



4,009



3,548



6



18



11,892



11,047



8


Income from continuing operations before income taxes


3,986



4,568



4,196



3,064



3,502



(13)



14



12,750



139



**

Income tax provision (benefit)


882



1,031



869



496



1,096



(14)



(20)



2,782



(10)



**

Income from continuing operations, net of tax


3,104



3,537



3,327



2,568



2,406



(12)



29



9,968



149



**

Income (loss) from discontinued operations, net of tax




(1)



(2)



(2)





**




(3)



(1)



200


Net income


3,104



3,536



3,325



2,566



2,406



(12)



29



9,965



148



**

Dividends and undistributed earnings allocated to participating
securities(2)


(26)



(30)



(28)



(19)



(20)



(13)



30



(84)



(5)



**

Preferred stock dividends


(79)



(60)



(61)



(68)



(67)



32



18



(200)



(212)



(6)


Issuance cost for redeemed preferred stock(3)


(12)







(17)





**


**


(12)



(22)



(45)


Net income (loss) available to common stockholders


$

2,987



$

3,446



$

3,236



$

2,462



$

2,319



(13)



29



$

9,669



$

(91)



**























































2021 Q3 vs.


Nine Months Ended September 30,



2021


2021


2021


2020


2020


2021


2020






2021 vs.

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


Q3


Q2


Q1


Q4


Q3


Q2


Q3


2021


2020


2020

Basic earnings per common share:(2)





















Net income (loss) from continuing operations


$

6.81



$

7.65



$

7.06



$

5.36



$

5.07



(11)

%


34

%


$

21.53



$

(0.20)



**

Income (loss) from discontinued operations
















(0.01)





**

Net income (loss) per basic common share


$

6.81



$

7.65



$

7.06



$

5.36



$

5.07



(11)



34



$

21.52



$

(0.20)



**

Diluted earnings per common share:(2)





















Net income (loss) from continuing operations


$

6.78



$

7.62



$

7.03



$

5.35



$

5.06



(11)



34



$

21.45



$

(0.20)



**

Income (loss) from discontinued operations
















(0.01)





**

Net income (loss) per diluted common share


$

6.78



$

7.62



$

7.03



$

5.35



$

5.06



(11)



34



$

21.44



$

(0.20)



**

Weighted-average common shares outstanding (in millions):





















Basic common shares


438.8



450.6



458.6



459.1



457.8



(3)



(4)



449.2



457.4



(2)

%

Diluted common shares


440.5



452.3



460.1



460.2



458.5



(3)



(4)



450.9



457.4



(1)


 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets














2021 Q3 vs.



2021


2021


2021


2020


2020


2021


2020

(Dollars in millions)


Q3


Q2


Q1


Q4


Q3


Q2


Q3

Assets:















Cash and cash equivalents:















Cash and due from banks


$

5,444



$

5,312



$

4,670



$

4,708



$

4,267



2

%


28

%

Interest-bearing deposits and other short-term investments


21,180



29,534



45,825



35,801



39,839



(28)



(47)


Total cash and cash equivalents


26,624



34,846



50,495



40,509



44,106



(24)



(40)


Restricted cash for securitization investors


234



242



1,779



262



895



(3)



(74)


Securities available for sale


98,149



101,766



99,165



100,445



99,853



(4)



(2)


Loans held for investment:















Unsecuritized loans held for investment


238,475



226,130



219,182



225,698



217,878



5



9


Loans held in consolidated trusts


22,915



23,467



23,949



25,926



30,345



(2)



(24)


Total loans held for investment


261,390



249,597



243,131



251,624



248,223



5



5


Allowance for credit losses


(11,573)



(12,346)



(14,017)



(15,564)



(16,129)



(6)



(28)


Net loans held for investment


249,817



237,251



229,114



236,060



232,094



5



8


Loans held for sale


6,300



6,522



2,896



2,710



3,433



(3)



84


Premises and equipment, net


4,204



4,227



4,277



4,287



4,333



(1)



(3)


Interest receivable


1,418



1,372



1,380



1,471



1,551



3



(9)


Goodwill


14,652



14,654



14,654



14,653



14,648






Other assets


23,979



22,540



21,415



21,205



20,970



6



14


Total assets


$

425,377



$

423,420



$

425,175



$

421,602



$

421,883





1





























2021 Q3 vs.



2021


2021


2021


2020


2020


2021


2020

(Dollars in millions)


Q3


Q2


Q1


Q4


Q3


Q2


Q3

Liabilities:















Interest payable


$

241



$

301



$

288



$

352



$

332



(20)

%


(27)

%

Deposits:















Non-interest-bearing deposits


36,804



34,994



34,003



31,142



29,633



5



24


Interest-bearing deposits


269,134



271,314



276,325



274,300



276,092



(1)



(3)


Total deposits


305,938



306,308



310,328



305,442



305,725






Securitized debt obligations


12,635



10,561



12,071



12,414



13,566



20



(7)


Other debt:















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


825



845



842



668



702



(2)



18


Senior and subordinated notes


23,983



24,878



25,467



27,382



28,448



(4)



(16)


Other borrowings


58



59



70



75



79



(2)



(27)


Total other debt


24,866



25,782



26,379



28,125



29,229



(4)



(15)


Other liabilities


18,153



15,844



14,921



15,065



14,607



15



24


Total liabilities


361,833



358,796



363,987



361,398



363,459



1



















Stockholders' equity:















Preferred stock


0



0



0



0



0






Common stock


7



7



7



7



7






Additional paid-in capital, net


35,051



35,472



33,671



33,480



33,793



(1)



4


Retained earnings


48,944



46,461



43,167



40,088



37,653



5



30


Accumulated other comprehensive income


1,360



1,792



1,783



3,494



3,833



(24)



(65)


Treasury stock, at cost


(21,818)



(19,108)



(17,440)



(16,865)



(16,862)



14



29


Total stockholders' equity


63,544



64,624



61,188



60,204



58,424



(2)



9


Total liabilities and stockholders' equity


$

425,377



$

423,420



$

425,175



$

421,602



$

421,883





1


 

 


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 $123 million in Q3 2021, $175 million in Q2 2021, $180 million in Q1 2021, $177 million in Q4 2020 and $235 million in Q3 2020 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)

On March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B, which increased our net loss available to common shareholders by $22 million in Q1 2020. On December 1, 2020, we redeemed all outstanding shares of our fixed rate 6.20% non-cumulative perpetual preferred stock Series F, which reduced our net income available to common shareholders by $17 million in Q4 2020. On September 1, 2021, we redeemed all outstanding shares of our fixed-to-floating rate non-cumulative perpetual preferred stock Series E, which reduced our net income available to common shareholders by $12 million in Q3 2021.

(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 annualized 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 (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.

(8)

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.

(9)

Return on average tangible common equity ("ROTCE") 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 tangible common equity ("TCE"). Our calculation of return on average TCE 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 Q3 2021 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.

**

Not meaningful.

 

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

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




2021 Q3


2021 Q2


2020 Q3

(Dollars in millions, except as noted)


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

Interest-earning assets:



















Loans, including loans held for sale


$

260,235



$

6,205



9.54

%


$

249,280



$

5,753



9.23

%


$

250,525



$

5,758



9.19

%

Investment securities(1)


98,802



317



1.28



100,071



370



1.48



91,777



443



1.93


Cash equivalents and other


28,729



16



0.22



40,778



16



0.16



49,149



14



0.11


Total interest-earning assets


$

387,766



$

6,538



6.74



$

390,129



$

6,139



6.29



$

391,451



$

6,215



6.35


Interest-bearing liabilities:



















Interest-bearing deposits


$

269,278



$

228



0.34



$

273,476



$

237



0.35



$

276,339



$

476



0.69


Securitized debt obligations


12,420



29



0.93



10,890



28



1.03



15,032



43



1.14


Senior and subordinated notes


24,241



116



1.91



25,487



122



1.92



28,497



132



1.86


Other borrowings and liabilities


2,357



9



1.49



2,198



9



1.67



2,119



9



1.77


Total interest-bearing liabilities


$

308,296



$

382



0.49



$

312,051



$

396



0.50



$

321,987



$

660



0.82


Net interest income/spread




$

6,156



6.25





$

5,743



5.79





$

5,555



5.53


Impact of non-interest-bearing funding






0.10







0.10







0.15


Net interest margin






6.35

%






5.89

%






5.68

%




Nine Months Ended September 30,



2021


2020

(Dollars in millions, except as noted)


Average
Balance


Interest
Income/
Expense


Yield/Rate


Average
Balance


Interest
Income/
Expense


Yield/Rate

Interest-earning assets:













Loans, including loans held for sale


$

252,113



$

17,812



9.42

%


$

256,165



$

18,120



9.43

%

Investment securities


99,059



1,078



1.45



83,724



1,455



2.32


Cash equivalents and other


37,648



48



0.17



35,152



67



0.25


Total interest-earning assets


$

388,820



$

18,938



6.49



$

375,041



$

19,642



6.98


Interest-bearing liabilities:













Interest-bearing deposits


$

272,022



$

734



0.36



$

259,631



$

1,818



0.93


Securitized debt obligations


11,851



89



1.00



16,500



198



1.60


Senior and subordinated notes


25,555



367



1.92



30,371



551



2.42


Other borrowings and liabilities


2,256



27



1.59



3,147



35



1.50


Total interest-bearing liabilities


$

311,684



$

1,217



0.52



$

309,649



$

2,602



1.12


Net interest income/spread




$

17,721



5.97





$

17,040



5.86


Impact of non-interest-bearing funding






0.11







0.20


Net interest margin






6.08

%






6.06

%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

 


CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics














2021 Q3 vs.


Nine Months Ended September 30,



2021


2021


2021


2020


2020


2021


2020


2021


2020


2021 vs.
2020

(Dollars in millions, except as noted)


Q3


Q2


Q1


Q4


Q3


Q2


Q3

Loans Held for Investment (Period-End)





















Credit card:





















   Domestic credit card(2)


$

99,258



$

95,309



$

91,099



$

98,504



$

95,541



4

%


4

%


$

99,258



$

95,541



4

%

   International card businesses(3)


5,772



5,708



8,028



8,452



8,100



1



(29)



5,772



8,100



(29)


Total credit card


105,030



101,017



99,127



106,956



103,641



4



1



105,030



103,641



1


Consumer banking:





















   Auto


74,716



71,713



67,059



65,762



65,394



4



14



74,716



65,394



14


   Retail banking


2,396



3,046



3,143



3,126



3,294



(21)



(27)



2,396



3,294



(27)


Total consumer banking


77,112



74,759



70,202



68,888



68,688



3



12



77,112



68,688



12


Commercial banking:





















   Commercial and multifamily real estate(4)


33,096



29,616



30,008



30,681



31,197



12



6



33,096



31,197



6


   Commercial and industrial


46,152



44,205



43,794



45,099



44,697



4



3



46,152



44,697



3


Total commercial banking


79,248



73,821



73,802



75,780



75,894



7



4



79,248



75,894



4


Total loans held for investment


$

261,390



$

249,597



$

243,131



$

251,624



$

248,223



5



5



$

261,390



$

248,223



5


Loans Held for Investment (Average)





















Credit card:





















   Domestic credit card


$

96,309



$

91,535



$

92,594



$

95,453



$

97,306



5

%


(1)

%


$

93,493



$

103,980



(10)

%

   International card businesses


5,737



8,139



7,940



8,108



8,061



(30)



(29)



7,264



8,292



(12)


Total credit card


102,046



99,674



100,534



103,561



105,367



2



(3)



100,757



112,272



(10)


Consumer banking:





















   Auto


73,296



69,543



66,185



65,590



64,476



5



14



69,700



62,434



12


   Retail banking


2,700



3,162



3,049



3,218



3,346



(15)



(19)



2,969



3,023



(2)


Total consumer banking


75,996



72,705



69,234



68,808



67,822



5



12



72,669



65,457



11


Commercial banking:





















   Commercial and multifamily real estate


30,314



30,124



29,856



30,825



30,918



1



(2)



30,100



31,239



(4)


   Commercial and industrial


44,745



43,960



44,313



44,495



45,404



2



(1)



44,341



46,264



(4)


Total commercial banking


75,059



74,084



74,169



75,320



76,322



1



(2)



74,441



77,503



(4)


Total average loans held for investment


$

253,101



$

246,463



$

243,937



$

247,689



$

249,511



3



1



$

247,867



$

255,232



(3)









































2021 Q3 vs.


Nine Months Ended September 30,



2021


2021


2021


2020


2020


2021


2020


 

2021


 

2020


2021 vs.
2020



Q3


Q2


Q1


Q4


Q3


Q2


Q3

Net Charge-Off (Recovery) Rates




























Credit card:




























   Domestic credit card



1.36

%



2.28

%



2.54

%



2.69

%



3.64

%


(92)

bps


(228)

bps



2.05

%



4.31

%


(226)

bps

   International card businesses



2.72




2.41




2.30




1.86




2.89



31



(17)




2.45




3.71



(126)


Total credit card



1.43




2.29




2.52




2.63




3.58



(86)



(215)




2.08




4.26



(218)


Consumer banking:




























   Auto



0.18




(0.12)




0.47




0.47




0.23



30



(5)




0.17




0.95



(78)


   Retail banking



2.45




1.41




1.68




1.88




1.38



104



107




1.82




1.80



2


Total consumer banking



0.27




(0.06)




0.52




0.53




0.28



33



(1)




0.24




0.99



(75)


Commercial banking:




























   Commercial and multifamily real estate



0.01




0.04




0.06




0.02




0.41



(3)



(40)




0.04




0.17



(13)


   Commercial and industrial



0.07




(0.21)




0.11




0.74




0.45



28



(38)




(0.01)




0.73



(74)


Total commercial banking



0.05




(0.11)




0.09




0.45




0.43



16



(38)




0.01




0.50



(49)


Total net charge-offs



0.67




0.88




1.21




1.38




1.72



(21)



(105)




0.92




2.28



(136)


30+ Day Performing Delinquency Rates




























Credit card:




























   Domestic credit card



1.93

%



1.68

%



2.24

%



2.42

%



2.21

%


25

bps


(28)

bps



1.93

%



2.21

%


(28)

bps

   International card businesses



3.27




2.89




2.51




2.61




2.15



38



112




3.27




2.15



112


Total credit card



2.00




1.75




2.26




2.44




2.20



25



(20)




2.00




2.20



(20)


Consumer banking:




























   Auto



3.65




3.26




3.12




4.78




3.76



39



(11)




3.65




3.76



(11)


   Retail banking



1.15




0.79




1.02




1.32




0.83



36



32




1.15




0.83



32


Total consumer banking



3.58




3.16




3.03




4.62




3.62



42



(4)




3.58




3.62



(4)


Nonperforming Loans and Nonperforming Assets Rates(5)(6)




























Credit card:




























   International card businesses



0.16