UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_____________________________________________
  
FORM 8-K

_____________________________________________
  
CURRENT REPORT 
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
 
April 23, 2015
Date of Report (Date of earliest event reported)

_____________________________________________
 
CAPITAL ONE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

_____________________________________________

Commission File No. 1-13300
Delaware
 
54-1719854
(State or Other Jurisdiction
of Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
1680 Capital One Drive McLean, Virginia
 
22102
(Address of Principal Executive Offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code: (703) 720-1000
 
(Former name or former address, if changed since last report)
 _____________________________________________
    
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 
 
 




Item 2.02.    Results of Operations and Financial Condition.

On April 23, 2015, Capital One Financial Corporation (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2015. Copies of the Company’s press release and financial supplement are attached and furnished herewith as Exhibits 99.1 and 99.2 to this Form 8-K and are incorporated herein by reference.

Note: Information in this report (including Exhibits 99.1 and 99.2) furnished pursuant to Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. 




Item 9.01.    Financial Statements and Exhibits.
 
(d)
Exhibits.

Exhibit No.
 
Description of Exhibit
99.1
 
Press Release, dated April 23, 2015 – First Quarter 2015
99.2
 
Financial Supplement – First Quarter 2015
 
Earnings Conference Call Webcast Information.

The Company will hold an earnings conference call on April 23, 2015 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). Choose “About Us,” then 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. A replay of the webcast will be archived on the Company’s website through May 5, 2015 at 5:00 PM Eastern Time.




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized. 

 
CAPITAL ONE FINANCIAL CORPORATION
 
 
Dated: April 23, 2015
By:
/s/ Stephen S. Crawford
 
 
Stephen S. Crawford
 
 
Chief Financial Officer






Exhibit 99.1
News Release
    
Contacts:
 
 
 
Investor Relations
Media Relations
Jeff Norris
Danielle Dietz
Julie Rakes
Tatiana Stead
703.720.2455
703.720.2455
804.284.5800
703.720.2352
                        
FOR IMMEDIATE RELEASE: April 23, 2015
Capital One Reports First Quarter 2015 Net Income of $1.2 billion,
or $2.00 per share
McLean, Va. (April 23, 2015) – Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2015 of $1.2 billion, or $2.00 per diluted common share, compared to the fourth quarter of 2014 with net income of $999 million, or $1.73 per diluted common share, and the first quarter of 2014 with net income of $1.2 billion, or $1.96 per diluted common share.
“In the first quarter, we continued to post strong results across our businesses,” said Richard D. Fairbank, Chair and Chief Executive Officer. “As always, we’re focused on sustaining strong performance and shareholder value. We are pursuing growth and resilience, managing costs tightly while we invest to grow, and actively working to return capital to shareholders.”
All comparisons below are for the first quarter of 2015 compared with the fourth quarter of 2014 unless otherwise noted.
First Quarter 2015 Income Summary:
•
Total net revenue decreased 3 percent to $5.6 billion.
•
Total non-interest expense decreased 7 percent to $3.0 billion:
•
26 percent decrease in marketing.
•
3 percent decrease in operating expense.
•
Pre-provision earnings increased 3 percent to $2.6 billion.
•
Provision for credit losses decreased 16 percent to $935 million.
•
Mortgage representation & warranty benefit of $19 million ($12 million net of tax) in discontinued operations.


Capital One First Quarter 2015 Earnings
Page 2


First Quarter 2015 Balance Sheet Summary:
•
Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.5 percent at March 31, 2015.
•
Net interest margin of 6.57 percent, down 24 basis points.
•
Period-end loans held for investment in the quarter decreased $4.3 billion, or 2 percent, to $204.0 billion.
•
Domestic Card period-end loans decreased $3.6 billion, or 5 percent, to $74.1 billion.
•
Consumer Banking period-end loans decreased $60 million, or less than 1 percent, to $71.4 billion:
•
Auto period-end loans increased $1.1 billion, or 3 percent, to $38.9 billion.
•
Home loans period-end loans decreased $1.1 billion, or 4 percent, to $28.9 billion, driven by run-off of acquired portfolios.
•
Commercial Banking period-end loans decreased $149 million, or less than 1 percent, to $50.7 billion.

•
Average loans held for investment in the quarter increased $1.8 billion, or less than 1 percent, to $205.2 billion.
•
Domestic Card average loans increased $744 million, or 1 percent, to $74.8 billion.
•
Consumer Banking average loans increased $187 million, or less than 1 percent, to $71.4 billion:
•
Auto average loans increased $1.3 billion, or 4 percent, to $38.4 billion.
•
Home loans average loans decreased by $1.1 billion, or 4 percent, to $29.5 billion, driven by run-off of acquired portfolios.
•
Commercial Banking average loans increased $731 million, or 1 percent, to $51.1 billion.

•
Period-end total deposits increased $4.9 billion, or 2 percent, to $210.4 billion, while average deposits increased $2.5 billion to $207.9 billion.
•
Interest-bearing deposit rate remained relatively flat at 0.59 percent.
Earnings Conference Call Webcast Information
The company will hold an earnings conference call on April 23, 2015 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). Choose “About Us”, then 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 5, 2015 at 5:00 PM Eastern Time.
Forward-Looking Statements
Certain statements in this release are 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, 2014.
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 $210.4 billion in deposits and $306.2 billion in total assets as of


Capital One First Quarter 2015 Earnings
Page 3


March 31, 2015. 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, New Jersey, Texas, Louisiana, Maryland, Virginia 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
First Quarter 2015(1) 
Table of Contents

Capital One Financial Corporation Consolidated Results
Page
 
Table 1:
Financial Summary—Consolidated
 
Table 2:
Selected Metrics—Consolidated
 
Table 3:
Consolidated Statements of Income
 
Table 4:
Consolidated Balance Sheets
 
Table 5:
Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1—4)
 
Table 6:
Average Balances, Net Interest Income and Net Interest Margin
 
Table 7:
Loan Information and Performance Statistics
Business Segments Detail
 
 
Table 8:
Financial Summary—Business Segments
 
Table 9:
Financial & Statistical Summary—Credit Card Business
 
Table 10:
Financial & Statistical Summary—Consumer Banking Business
 
Table 11:
Financial & Statistical Summary—Commercial Banking Business
 
Table 12:
Financial & Statistical Summary—Other and Total
 
Table 13:
Notes to Loan and Business Segments Disclosures (Tables 7—12)
Other
 
 
Table 14:
Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures
__________
(1)
The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended March 31, 2015 once it is filed with the Securities and Exchange Commission.





CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary—Consolidated(1) 
 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
(Dollars in millions, except per share data and as noted) (unaudited)
 
2015
 
2014
 
2014
 
2014
 
2014
 
2014
 
2014
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q1
Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
4,576

 
$
4,656

 
$
4,497

 
$
4,315

 
$
4,350

 
(2)%

 
5%

Non-interest income(2)
 
1,071

 
1,157

 
1,142

 
1,153

 
1,020

 
(7
)
 
5

Total net revenue(3)
 
$
5,647

 
$
5,813

 
$
5,639

 
$
5,468

 
$
5,370

 
(3
)
 
5

Provision for credit losses
 
935

 
1,109

 
993

 
704

 
735

 
(16
)
 
27

Non-interest expense:
 
 
 
 
 
 
 
 
 
 
 

 

Marketing
 
375

 
509

 
392

 
335

 
325

 
(26
)
 
15

Amortization of intangibles
 
110

 
123

 
130

 
136

 
143

 
(11
)
 
(23
)
Acquisition-related(4)
 
7

 
10

 
13

 
18

 
23

 
(30
)
 
(70
)
Operating expenses
 
2,557

 
2,642

 
2,450

 
2,490

 
2,441

 
(3
)
 
5

Total non-interest expense
 
3,049

 
3,284

 
2,985

 
2,979

 
2,932

 
(7
)
 
4

Income from continuing operations before income taxes
 
1,663

 
1,420

 
1,661

 
1,785

 
1,703

 
17

 
(2
)
Income tax provision
 
529

 
450

 
536

 
581

 
579

 
18

 
(9
)
Income from continuing operations, net of tax
 
1,134

 
970

 
1,125

 
1,204

 
1,124

 
17

 
1

Income (loss) from discontinued operations, net of tax(2)
 
19

 
29

 
(44
)
 
(10
)
 
30

 
(34
)
 
(37
)
Net income
 
1,153

 
999

 
1,081

 
1,194

 
1,154

 
15

 
—

Dividends and undistributed earnings allocated to participating securities(5)
 
(6
)
 
(4
)
 
(5
)
 
(4
)
 
(5
)
 
50

 
20

Preferred stock dividends(5)
 
(32
)
 
(21
)
 
(20
)
 
(13
)
 
(13
)
 
52

 
146

Net income available to common stockholders
 
$
1,115

 
$
974

 
$
1,056

 
$
1,177

 
$
1,136

 
14

 
(2
)
Common Share Statistics
 
 
 
 
 
 
 
 
 
 
 

 

Basic earnings per common share:(5)
 
 
 
 
 
 
 
 
 
 
 

 

Net income from continuing operations
 
$
2.00

 
$
1.71

 
$
1.97

 
$
2.09

 
$
1.94

 
17%

 
3%

Income (loss) from discontinued operations
 
0.03

 
0.05

 
(0.08
)
 
(0.02
)
 
0.05

 
(40
)
 
(40
)
Net income per basic common share
 
$
2.03

 
$
1.76

 
$
1.89

 
$
2.07

 
$
1.99

 
15

 
2

Diluted earnings per common share:(5)
 
 
 
 
 
 
 
 
 
 
 

 

Net income from continuing operations
 
$
1.97

 
$
1.68

 
$
1.94

 
$
2.06

 
$
1.91

 
17

 
3

Income (loss) from discontinued operations
 
0.03

 
0.05

 
(0.08
)
 
(0.02
)
 
0.05

 
(40
)
 
(40
)
Net income per diluted common share
 
$
2.00

 
$
1.73

 
$
1.86

 
$
2.04

 
$
1.96

 
16

 
2

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

 

Basic common shares
 
550.2

 
554.3

 
559.9

 
567.5

 
571.0

 
(1
)
 
(4
)
Diluted common shares
 
557.2

 
561.8

 
567.9

 
577.6

 
580.3

 
(1
)
 
(4
)
Common shares outstanding (period end, in millions)
 
548.0

 
553.4

 
558.5

 
561.8

 
572.9

 
(1
)
 
(4
)
Dividends paid per common share
 
$
0.30

 
$
0.30

 
$
0.30

 
$
0.30

 
$
0.30

 
—

 
—

Tangible book value per common share (period end)(6)
 
52.19

 
50.32

 
48.72

 
47.90

 
45.88

 
4

 
14


1

 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
(Dollars in millions) (unaudited)
 
2015
 
2014
 
2014
 
2014
 
2014
 
2014
 
2014
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q1
Balance Sheet (Period End)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for investment(7)
 
$
203,978

 
$
208,316

 
$
201,592

 
$
198,528

 
$
192,941

 
(2
)%
 
6
 %
Interest-earning assets
 
275,837

 
277,849

 
270,001

 
266,720

 
259,422

 
(1
)
 
6

Total assets
 
306,224

 
308,167

 
299,640

 
297,434

 
289,814

 
(1
)
 
6

Interest-bearing deposits
 
185,208

 
180,467

 
178,876

 
180,970

 
184,214

 
3

 
1

Total deposits
 
210,440

 
205,548

 
204,264

 
205,890

 
208,324

 
2

 
1

Borrowings
 
41,029

 
48,457

 
42,243

 
39,114

 
30,118

 
(15
)
 
36

Common equity
 
43,908

 
43,231

 
42,682

 
42,477

 
41,948

 
2

 
5

Total stockholders’ equity
 
45,730

 
45,053

 
44,018

 
43,815

 
42,801

 
2

 
7

Balance Sheet (Average Balances)
 
 
 
 
 
 
 
 
 
 
 

 

Loans held for investment(7)
 
$
205,194

 
$
203,436

 
$
199,422

 
$
194,996

 
$
193,722

 
1%

 
6
 %
Interest-earning assets
 
278,427

 
273,436

 
268,890

 
263,570

 
262,659

 
2

 
6

Total assets
 
309,401

 
304,153

 
298,913

 
294,089

 
293,551

 
2

 
5

Interest-bearing deposits
 
182,998

 
179,401

 
179,928

 
182,053

 
184,183

 
2

 
(1
)
Total deposits
 
207,851

 
205,355

 
205,199

 
206,315

 
205,842

 
1

 
1

Borrowings
 
46,082

 
43,479

 
40,314

 
35,658

 
35,978

 
6

 
28

Common equity
 
44,575

 
43,895

 
43,489

 
42,797

 
42,006

 
2

 
6

Total stockholders’ equity
 
46,397

 
45,576

 
44,827

 
43,767

 
42,859

 
2

 
8

    

2


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated(1) 
 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
(Dollars in millions except as noted) (unaudited)
 
2015
 
2014
 
2014
 
2014
 
2014
 
2014
 
2014
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q1
Performance Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income growth (quarter over quarter)
 
(2)%

 
4%

 
4%

 
(1)%

 
(2)%

 
**

**
Non-interest income growth (quarter over quarter)
 
(7
)
 
1

 
(1
)
 
13

 
(9
)
 
**
 
**
Total net revenue growth (quarter over quarter)
 
(3
)
 
3

 
3

 
2

 
(3
)
 
**
 
**
Total net revenue margin(8)
 
8.11

 
8.50

 
8.39

 
8.30

 
8.18

 
(39
)bps
 
(7
)bps
Net interest margin(9)
 
6.57

 
6.81

 
6.69

 
6.55

 
6.62

 
(24
)
 
(5
)
Return on average assets
 
1.47

 
1.28

 
1.51

 
1.64

 
1.53

 
19

 
(6
)
Return on average tangible assets(10)
 
1.54

 
1.34

 
1.59

 
1.73

 
1.62

 
20

 
(8
)
Return on average common equity(11)
 
9.84

 
8.61

 
10.12

 
11.09

 
10.53

 
123

 
(69
)
Return on average tangible common equity(12)
 
15.00

 
13.28

 
15.73

 
17.47

 
16.83

 
172

 
(183
)
Non-interest expense as a percentage of average loans held for investment
 
5.94

 
6.46

 
5.99

 
6.11

 
6.05

 
(52
)
 
(11
)
Efficiency ratio(13)
 
53.99

 
56.49

 
52.93

 
54.48

 
54.60

 
(250
)
 
(61
)
Effective income tax rate for continuing operations
 
31.8

 
31.7

 
32.3

 
32.5

 
34.0

 
10

 
(220
)
Employees (in thousands), period end(14)
 
47.0

 
46.0

 
44.9

 
44.6

 
44.9

 
2%


5%

Credit Quality Metrics(7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan and lease losses
 
$
4,405

 
$
4,383

 
$
4,212

 
$
3,998

 
$
4,098

 
1%


7%

Allowance as a percentage of loans held for investment
 
2.16%

 
2.10%

 
2.09%

 
2.01%

 
2.12%

 
6
bps

4
bps
Allowance as a percentage of loans held for investment (excluding acquired loans)
 
2.41

 
2.36

 
2.37

 
2.30

 
2.45

 
5

 
(4
)
Net charge-offs
 
$
881

 
$
915

 
$
756

 
$
812

 
$
931

 
(4)%


(5)%

Net charge-off rate(15)
 
1.72%

 
1.80%

 
1.52%

 
1.67%

 
1.92%

 
(8
)bps

(20
)bps
Net charge-off rate (excluding acquired loans)(15)
 
1.93

 
2.04

 
1.73

 
1.93

 
2.24

 
(11
)
 
(31
)
30+ day performing delinquency rate
 
2.32

 
2.62

 
2.46

 
2.24

 
2.22

 
(30
)
 
10

30+ day performing delinquency rate (excluding acquired loans)
 
2.61

 
2.95

 
2.81

 
2.58

 
2.59

 
(34
)
 
2

30+ day delinquency rate
 
2.58

 
2.91

 
2.76

 
2.53

 
2.51

 
(33
)
 
7

30+ day delinquency rate (excluding acquired loans)
 
2.90

 
3.28

 
3.14

 
2.91

 
2.93

 
(38
)
 
(3
)
Capital Ratios(16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital ratio 
 
12.5%

 
12.5%

 
12.7%

 
12.7%

 
13.0%

 
—


(50
)bps
Tier 1 risk-based capital ratio
 
13.2

 
13.2

 
13.3

 
13.3

 
13.4

 
—

 
(20
)
Total risk-based capital ratio
 
15.1

 
15.1

 
15.2

 
15.4

 
15.4

 
—

 
(30
)
Tier 1 leverage ratio
 
10.7

 
10.8

 
10.6

 
10.7

 
10.4

 
(10
)
 
30

Tangible common equity (“TCE”) ratio(17)
 
9.8

 
9.5

 
9.6

 
9.5

 
9.6

 
30

 
20

 

3


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income
 
 
Three Months Ended
 
2015 Q1 vs.
 
 
2015
 
2014
 
2014
 
2014
 
2014
(Dollars in millions, except per share data and as noted) (unaudited)
 
Q1
 
Q4
 
Q1
 
Q4
 
Q1
Interest income:
 
 
 
 
 
 
 
 
 
 
Loans, including loans held for sale
 
$
4,540

 
$
4,613

 
$
4,307

 
(2)%

 
5%

Investment securities
 
406

 
405

 
416

 
—

 
(2
)
Other
 
28

 
27

 
30

 
4

 
(7
)
Total interest income
 
4,974

 
5,045

 
4,753

 
(1
)
 
5

Interest expense:
 
 
 
 
 
 
 
 
 
 
Deposits
 
271

 
269

 
276

 
1

 
(2
)
Securitized debt obligations
 
33

 
36

 
38

 
(8
)
 
(13
)
Senior and subordinated notes
 
79

 
73

 
77

 
8

 
3

Other borrowings
 
15

 
11

 
12

 
36

 
25

Total interest expense
 
398

 
389

 
403

 
2

 
(1
)
Net interest income
 
4,576

 
4,656

 
4,350

 
(2
)
 
5

Provision for credit losses
 
935

 
1,109

 
735

 
(16
)
 
27

Net interest income after provision for credit losses
 
3,641

 
3,547

 
3,615

 
3

 
1

Non-interest income:(2)
 
 
 
 
 
 
 
 
 
 
Service charges and other customer-related fees
 
437

 
462

 
474

 
(5
)
 
(8
)
Interchange fees, net
 
496

 
523

 
440

 
(5
)
 
13

Net other-than-temporary impairment recognized in earnings
 
(15
)
 
(9
)
 
(5
)
 
67

 
200
Other
 
153

 
181

 
111

 
(15
)
 
38

Total non-interest income
 
1,071

 
1,157

 
1,020

 
(7
)
 
5

Non-interest expense:
 
 
 
 
 
 
 
 
 
 
Salaries and associate benefits
 
1,211

 
1,179

 
1,161

 
3

 
4

Occupancy and equipment
 
435

 
474

 
405

 
(8
)
 
7

Marketing
 
375

 
509

 
325

 
(26
)
 
15

Professional services
 
296

 
329

 
287

 
(10
)
 
3

Communications and data processing
 
202

 
203

 
196

 
—

 
3

Amortization of intangibles
 
110

 
123

 
143

 
(11
)
 
(23
)
Other
 
420

 
467

 
415

 
(10
)
 
1

Total non-interest expense
 
3,049

 
3,284

 
2,932

 
(7
)
 
4

Income from continuing operations before income taxes
 
1,663

 
1,420

 
1,703

 
17

 
(2
)
Income tax provision
 
529

 
450

 
579

 
18

 
(9
)
Income from continuing operations, net of tax
 
1,134

 
970

 
1,124

 
17

 
1

Income from discontinued operations, net of tax(2)
 
19

 
29

 
30

 
(34)
 
(37)
Net income
 
1,153

 
999

 
1,154

 
15

 
—

Dividends and undistributed earnings allocated to participating securities(5)
 
(6
)
 
(4
)
 
(5
)
 
50

 
20

Preferred stock dividends(5)
 
(32
)
 
(21
)
 
(13
)
 
52

 
146

Net income available to common stockholders
 
$
1,115

 
$
974

 
$
1,136

 
14

 
(2
)
 
 
 
 
 
 
 
 
 
 
 

4


 
 
Three Months Ended
 
2015 Q1 vs.
 
 
2015
 
2014
 
2014
 
2014
 
2014
(Dollars in millions, except per share data and as noted) (unaudited)
 
Q1
 
Q4
 
Q1
 
Q4
 
Q1
Basic earnings per common share:(5)
 
 
 
 
 
 
 
 
 
 
Net income from continuing operations
 
$
2.00

 
$
1.71

 
$
1.94

 
17%

 
3%

Income from discontinued operations
 
0.03

 
0.05

 
0.05

 
(40
)
 
(40
)
Net income per basic common share
 
$
2.03

 
$
1.76

 
$
1.99

 
15

 
2

Diluted earnings per common share:(5)
 
 
 
 
 
 
 
 
 
 
Net income from continuing operations
 
$
1.97

 
$
1.68

 
$
1.91

 
17

 
3

Income from discontinued operations
 
0.03

 
0.05

 
0.05

 
(40
)
 
(40
)
Net income per diluted common share
 
$
2.00

 
$
1.73

 
$
1.96

 
16

 
2

Weighted average common shares outstanding (in millions):
 
 
 
 
 
 
 
 
 
 
Basic common shares
 
550.2

 
554.3

 
571.0

 
(1
)
 
(4
)
Diluted common shares
 
557.2

 
561.8

 
580.3

 
(1
)
 
(4
)
Dividends paid per common share
 
$
0.30

 
$
0.30

 
$
0.30

 
—

 
—


5


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets(1) 
 
 
 
 
 
 
 
 
March 31, 2015 vs.
(Dollars in millions) (unaudited)
 
March 31, 2015
 
December 31, 2014
 
March 31, 2014
 
December 31, 2014
 
March 31, 2014
Assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
2,853

 
$
3,147

 
$
3,373

 
(9)%

 
(15)%

Interest-bearing deposits with banks
 
6,038

 
4,095

 
2,641

 
47

 
129

Federal funds sold and securities purchased under agreements to resell
 
0

 
0

 
168

 
—

 
**

Total cash and cash equivalents
 
8,891

 
7,242

 
6,182

 
23

 
44

Restricted cash for securitization investors
 
234

 
234

 
550

 
—

 
(57
)
Securities available for sale, at fair value
 
39,321

 
39,508

 
40,721

 
—

 
(3
)
Securities held to maturity, at carrying value
 
23,241

 
22,500

 
20,150

 
3

 
15

Loans held for investment:(7)
 
 
 
 
 
 
 

 

Unsecuritized loans held for investment
 
170,040

 
171,771

 
156,072

 
(1
)
 
9

Restricted loans for securitization investors
 
33,938

 
36,545

 
36,869

 
(7
)
 
(8
)
Total loans held for investment
 
203,978

 
208,316

 
192,941

 
(2
)
 
6

Allowance for loan and lease losses
 
(4,405
)
 
(4,383
)
 
(4,098
)
 
1

 
7

Net loans held for investment
 
199,573

 
203,933

 
188,843

 
(2
)
 
6

Loans held for sale, at lower of cost or fair value
 
1,331

 
626

 
259

 
113

 
414

Premises and equipment, net
 
3,684

 
3,685

 
3,807

 
—

 
(3
)
Interest receivable
 
1,078

 
1,079

 
1,045

 
—

 
3

Goodwill
 
13,978

 
13,978

 
13,974

 
—

 
—

Other assets
 
14,893

 
15,382

 
14,283

 
(3
)
 
4

Total assets
 
$
306,224

 
$
308,167

 
$
289,814

 
(1
)
 
6

 
 
 
 
 
 
 
 
 
 
 

6


 
 
 
 
 
 
 
 
March 31, 2015 vs.
(Dollars in millions) (unaudited)
 
March 31, 2015
 
December 31, 2014
 
March 31, 2014
 
December 31, 2014
 
March 31, 2014
Liabilities:
 
 
 
 
 
 
 
 
 
 
Interest payable
 
$
195

 
$
254

 
$
182

 
(23)%

 
7%

Deposits:
 
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits
 
25,232

 
25,081

 
24,110

 
1

 
5

Interest-bearing deposits
 
185,208

 
180,467

 
184,214

 
3

 
1

Total deposits
 
210,440

 
205,548

 
208,324

 
2

 
1

Securitized debt obligations
 
12,717

 
11,624

 
9,783

 
9

 
30

Other debt:
 
 
 
 
 
 
 
 
 
 
Federal funds purchased and securities loaned or sold under agreements to repurchase
 
933

 
880

 
1,544

 
6

 
(40
)
Senior and subordinated notes
 
20,559

 
18,684

 
14,891

 
10

 
38

Other borrowings
 
6,820

 
17,269

 
3,900

 
(61
)
 
75

Total other debt
 
28,312

 
36,833

 
20,335

 
(23
)
 
39

Other liabilities
 
8,830

 
8,855

 
8,389

 
—

 
5

Total liabilities
 
260,494

 
263,114

 
247,013

 
(1
)
 
5

 
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
 
 
Preferred stock
 
0

 
0

 
0

 
—

 
—

Common stock
 
6

 
6

 
6

 
—

 
—

Additional paid-in capital, net
 
27,939

 
27,869

 
26,605

 
—

 
5

Retained earnings
 
24,925

 
23,973

 
21,259

 
4

 
17

Accumulated other comprehensive income (“AOCI”)
 
(212
)
 
(430
)
 
(710
)
 
(51
)
 
(70
)
Treasury stock, at cost
 
(6,928
)
 
(6,365
)
 
(4,359
)
 
9

 
59

Total stockholders’ equity
 
45,730

 
45,053

 
42,801

 
2

 
7

Total liabilities and stockholders’ equity
 
$
306,224

 
$
308,167

 
$
289,814

 
(1
)
 
6


7


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 — 4)

**  
Not meaningful.
(1) 
As of January 1, 2015, we changed our accounting principle from a gross basis of presentation to a net basis, for presenting qualifying derivative assets and liabilities, as well as the related fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable). Prior period results and related metrics have been recast to conform to this presentation. Prior period regulatory ratios have not been recast.
(2) 
We recorded the following related to the mortgage representation and warranty reserve:
 
 
2015
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
Provision (benefit) for mortgage representation and warranty losses before income taxes:
 
 
 
 
 
 
 
 
 
 
Recorded in continuing operations
 
$
1

 
$
(11
)
 
$
—

 
$
(29
)
 
$
14

Recorded in discontinued operations
 
(19
)
 
(41
)
 
70

 
11

 
(47
)
Total (benefit) provision for mortgage representation and warranty losses before income taxes
 
$
(18
)
 
$
(52
)
 
$
70

 
$
(18
)
 
$
(33
)
Historically, the majority of the provision for representation and warranty losses is included net of tax in discontinued operations, with the remaining amount included before income taxes in non-interest income. The mortgage representation and warranty reserve was $673 million as of March 31, 2015, $731 millions as of December 31, 2014 and $1.1 billion as of March 31, 2014.
(3) 
Total net revenue was reduced by $147 million in Q1 2015, $165 million in Q4 2014, $164 million in Q3 2014, $153 million in Q2 2014 and $163 million in Q1 2014 for the estimated uncollectible amount of billed finance charges and fees.
(4) 
Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense.
(5) 
Dividends and undistributed earnings allocated to participating securities, earnings per share, and preferred stock dividends are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.
(6) 
Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information on tangible common equity.
(7) 
Loans held for investment includes acquired loans. We use the term “acquired loans” to refer to a certain portion of the loans acquired in the following transactions: (i) the February 2012 transaction where we acquired the assets and assumed the liabilities of substantially all of ING Direct; (ii) the February 2009 Chevy Chase Bank acquisition; and (iii) May 2012 transaction in which we acquired substantially all of HSBC’s credit card and private-label credit card business in the United States. These loans were recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as “SOP 03-3”, or Accounting Standard Codification 310-30). The table below presents amounts related to acquired loans accounted for under SOP 03-3:
 
 
2015
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
Acquired loans accounted for under SOP 03-3:
 
 
 
 
 
 
 
 
 
 
Period-end unpaid principal balance
 
$
23,248

 
$
24,473

 
$
25,726

 
$
27,117

 
$
28,549

Period-end loans held for investment
 
22,334

 
23,500

 
24,685

 
26,019

 
27,390

Average loans held for investment
 
22,773

 
23,907

 
25,104

 
26,491

 
27,760

(8) 
Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(9) 
Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(10) 
Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. Return on average tangible assets is a non-GAAP measure and See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information.
(11) 
Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly titled measures reported by other companies.
(12) 
Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Return on average tangible common equity is a non-GAAP measure and our calculation may not be comparable to similarly titled measures reported by other companies. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information.
(13) 
Calculated based on total non-interest expense for the period divided by total net revenue for the period.
(14) 
Effective Q2 2014, we changed our presentation from total full-time equivalent employees to total employees. All prior periods have been recast to conform to the current presentation. 
(15) 
Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(16) 
Ratios as of the end of Q1 2015 are preliminary and therefore subject to change. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for information on the calculation of each of these ratios.
(17) 
TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See “Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for additional information.

8


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin
 
 
2015 Q1
 
2014 Q4
 
2014 Q1
 
 
Average Balance
 
Interest Income/Expense(1)
 
Yield/Rate(1)
 
Average Balance
 
Interest Income/Expense(1)
 
Yield/Rate(1)
 
Average Balance
 
Interest Income/Expense(1)
 
Yield/Rate(1)
(Dollars in millions) (unaudited)
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, including loans held for sale
 
$
205,854

 
$
4,540

 
8.82
%
 
$
204,137

 
$
4,613

 
9.04
%
 
$
194,020

 
$
4,307

 
8.88
%
Investment securities
 
63,181

 
406

 
2.57

 
62,952

 
405

 
2.57

 
62,124

 
416

 
2.68

Cash equivalents and other
 
9,392

 
28

 
1.19

 
6,347

 
27

 
1.70

 
6,515

 
30

 
1.84

Total interest-earning assets
 
$
278,427

 
$
4,974

 
7.15

 
$
273,436

 
$
5,045

 
7.38

 
$
262,659

 
$
4,753

 
7.24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Interest-bearing deposits
 
$
182,998

 
$
271

 
0.59

 
$
179,401

 
$
269

 
0.60

 
$
184,183

 
$
276

 
0.60

Securitized debt obligations
 
11,563

 
33

 
1.14

 
11,479

 
36

 
1.25

 
10,418

 
38

 
1.46

Senior and subordinated notes
 
20,595

 
79

 
1.53

 
18,680

 
73

 
1.56

 
14,162

 
77

 
2.17

Other borrowings and liabilities
 
14,721

 
15

 
0.41

 
14,058

 
11

 
0.31

 
11,398

 
12

 
0.42

Total interest-bearing liabilities
 
$
229,877

 
$
398

 
0.69

 
$
223,618

 
$
389

 
0.70

 
$
220,161

 
$
403

 
0.73

Net interest income/spread
 
 
 
$
4,576

 
6.46

 
 
 
$
4,656

 
6.68

 
 
 
$
4,350

 
6.51

Impact of non-interest bearing funding
 
 
 
 
 
0.11

 
 
 
 
 
0.13

 
 
 
 
 
0.11

Net interest margin
 
 
 
 
 
6.57
%
 
 
 
 
 
6.81
%
 
 
 
 
 
6.62
%
 
 
 
 
 
 
 
 
 
 
 
 
 
__________
(1) 
Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.


9


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics(1) 
 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
(Dollars in millions) (unaudited)
 
2015
Q1
 
2014
Q4
 
2014
Q3
 
2014
Q2
 
2014
Q1
 
2014
Q4
 
2014
Q1
Period-end Loans Held For Investment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Domestic credit card
 
$
74,131

 
$
77,704

 
$
73,143

 
$
71,165

 
$
68,275

 
(5)%

 
9%

   International credit card
 
7,623

 
8,172

 
7,488

 
7,853

 
7,575

 
(7
)
 
1

Total credit card
 
81,754

 
85,876

 
80,631

 
79,018

 
75,850

 
(5
)
 
8

Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Auto
 
38,937

 
37,824

 
36,254

 
34,792

 
33,080

 
3

 
18

   Home loan
 
28,905

 
30,035

 
31,203

 
32,644

 
34,035

 
(4
)
 
(15
)
   Retail banking
 
3,537

 
3,580

 
3,604

 
3,626

 
3,612

 
(1
)
 
(2
)
Total consumer banking
 
71,379

 
71,439

 
71,061

 
71,062

 
70,727

 
—

 
1

Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commercial and multifamily real estate
 
22,831

 
23,137

 
22,895

 
22,040

 
21,256

 
(1
)
 
7

   Commercial and industrial
 
27,172

 
26,972

 
26,071

 
25,402

 
24,064

 
1

 
13

Total commercial lending
 
50,003

 
50,109

 
48,966

 
47,442

 
45,320

 
—

 
10

   Small-ticket commercial real estate
 
738

 
781

 
822

 
879

 
910

 
(6
)
 
(19
)
Total commercial banking(2)
 
50,741

 
50,890

 
49,788

 
48,321

 
46,230

 
—

 
10

Other loans
 
104

 
111

 
112

 
127

 
134

 
(6
)
 
(22
)
Total loans held for investment(2)
 
$
203,978

 
$
208,316

 
$
201,592

 
$
198,528

 
$
192,941

 
(2
)
 
6

Average Loans Held For Investment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Domestic credit card
 
$
74,770

 
$
74,026

 
$
71,784

 
$
69,376

 
$
69,810

 
1%

 
7%

   International credit card
 
7,811

 
7,714

 
7,710

 
7,621

 
7,692

 
1

 
2

Total credit card
 
82,581

 
81,740

 
79,494

 
76,997

 
77,502

 
1

 
7

Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Auto
 
38,387

 
37,072

 
35,584

 
33,972

 
32,387

 
4

 
19

   Home loan
 
29,493

 
30,604

 
31,859

 
33,299

 
34,646

 
(4
)
 
(15
)
   Retail banking
 
3,561

 
3,578

 
3,605

 
3,613

 
3,630

 
—

 
(2
)
Total consumer banking
 
71,441

 
71,254

 
71,048

 
70,884

 
70,663

 
—

 
1

Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commercial and multifamily real estate
 
23,120

 
23,129

 
22,409

 
21,484

 
20,962

 
—

 
10

   Commercial and industrial
 
27,190

 
26,409

 
25,512

 
24,611

 
23,541

 
3

 
16

Total commercial lending
 
50,310

 
49,538

 
47,921

 
46,095

 
44,503

 
2

 
13

   Small-ticket commercial real estate
 
760

 
801

 
845

 
896

 
932

 
(5
)
 
(18
)
Total commercial banking
 
51,070

 
50,339

 
48,766

 
46,991

 
45,435

 
1

 
12

Other loans
 
102

 
103

 
114

 
124

 
122

 
(1
)
 
(16
)
Total average loans held for investment
 
$
205,194

 
$
203,436

 
$
199,422

 
$
194,996

 
$
193,722

 
1

 
6

Net Charge-off Rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Domestic credit card
 
3.55
%
 
3.39
%
 
2.83
%
 
3.52
%
 
4.01
%
 
16
bps
 
(46
)bps
   International credit card
 
2.80

 
3.34

 
3.32

 
3.93

 
4.17

 
(54
)
 
(137
)
Total credit card
 
3.48

 
3.38

 
2.88

 
3.56

 
4.02

 
10

 
(54
)

10


 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
(Dollars in millions) (unaudited)
 
2015
Q1
 
2014
Q4
 
2014
Q3
 
2014
Q2
 
2014
Q1
 
2014
Q4
 
2014
Q1
Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Auto
 
1.55
 %
 
2.14
%
 
1.98
 %
 
1.31
%
 
1.66
 %
 
(59
)bps
 
(11
)bps
   Home loan
 
0.03

 
0.07

 
0.02

 
0.05

 
0.06

 
(4
)
 
(3
)
   Retail banking
 
0.96

 
1.28

 
1.36

 
0.70

 
0.95

 
(32
)
 
1

Total consumer banking
 
0.89

 
1.20

 
1.07

 
0.69

 
0.84

 
(31
)
 
5

Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commercial and multifamily real estate
 
(0.03
)
 
0.01

 
(0.10
)
 
—

 
0.01

 
(4
)
 
(4
)
   Commercial and industrial
 
0.05

 
0.10

 
(0.01
)
 
0.04

 
0.03

 
(5
)
 
2

Total commercial lending
 
0.01

 
0.06

 
(0.05
)
 
0.02

 
0.02

 
(5
)
 
(1
)
   Small-ticket commercial real estate
 
0.47

 
0.80

 
(0.01
)
 
0.61

 
0.67

 
(33
)
 
(20
)
Total commercial banking
 
0.02

 
0.07

 
(0.05
)
 
0.03

 
0.04

 
(5
)
 
(2
)
Other loans
 
1.56

 
0.47

 
(0.61
)
 
2.18

 
(0.68
)
 
109

 
224
Total net charge-offs
 
1.72

 
1.80

 
1.52

 
1.67

 
1.92

 
(8
)
 
(20
)
30+ Day Performing Delinquency Rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Domestic credit card
 
2.92
 %
 
3.27
%
 
3.21
 %
 
2.83
%
 
3.02
 %
 
(35
)bps
 
(10
)bps
   International credit card
 
2.81

 
2.94

 
3.34

 
3.40

 
3.59

 
(13
)
 
(78
)
Total credit card
 
2.91

 
3.24

 
3.22

 
2.89

 
3.08

 
(33
)
 
(17
)
Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Auto
 
5.21

 
6.57

 
6.14

 
5.77

 
5.29

 
(136
)
 
(8
)
   Home loan
 
0.18

 
0.21

 
0.14

 
0.13

 
0.12

 
(3
)
 
6

   Retail banking
 
0.60

 
0.64

 
0.53

 
0.48

 
0.74

 
(4
)
 
(14
)
Total consumer banking
 
2.95

 
3.60

 
3.22

 
2.91

 
2.57

 
(65
)
 
38

Nonperforming Loans and Nonperforming Assets Rates(3)(4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   International credit card
 
0.84
 %
 
0.86
%
 
0.98
 %
 
1.03
%
 
1.07
 %
 
(2
)bps
 
(23
)bps
Total credit card
 
0.08

 
0.08

 
0.09

 
0.10

 
0.11

 
—

 
(3
)
Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Auto
 
0.31

 
0.52

 
0.49

 
0.43

 
0.34

 
(21
)
 
(3
)
   Home loan
 
1.16

 
1.10

 
1.04

 
1.07

 
1.09

 
6

 
7

   Retail banking
 
0.71

 
0.61

 
0.54

 
0.79

 
1.15

 
10

 
(44
)
Total consumer banking
 
0.67

 
0.77

 
0.73

 
0.75

 
0.74

 
(10
)
 
(7
)
Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Commercial and multifamily real estate
 
0.18

 
0.27

 
0.26

 
0.29

 
0.27

 
(9
)
 
(9
)
   Commercial and industrial
 
0.39

 
0.39

 
0.37

 
0.41

 
0.36

 
—

 
3

Total commercial lending
 
0.29

 
0.33

 
0.32

 
0.36

 
0.32

 
(4
)
 
(3
)
   Small-ticket commercial real estate
 
1.62

 
0.96

 
0.42

 
1.40

 
0.73

 
66

 
89

Total commercial banking
 
0.31

 
0.34

 
0.32

 
0.38

 
0.33

 
(3
)
 
(2
)
Other loans
 
13.33

 
13.37

 
14.66

 
12.74

 
12.47

 
(4
)
 
86

Total nonperforming loans
 
0.35

 
0.39

 
0.38

 
0.41

 
0.40

 
(4
)
 
(5
)
Total nonperforming assets
 
0.50

 
0.54

 
0.53

 
0.55

 
0.54

 
(4
)
 
(4
)

11


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary—Business Segments(1) 
 
 
Three Months Ended March 31, 2015
(Dollars in millions) (unaudited)
 
Total
 
Credit Card
 
Consumer Banking
 
Commercial Banking
 
Other
Earnings:
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
4,576

 
$
2,666

 
$
1,434

 
$
461

 
$
15

Non-interest income
 
1,071

 
816

 
158

 
114

 
(17
)
Total net revenue (loss)(5)
 
5,647

 
3,482

 
1,592

 
575

 
(2
)
Provision for credit losses
 
935

 
669

 
206

 
60

 
—

Non-interest expense
 
3,049

 
1,776

 
970

 
272

 
31

Income (loss) from continuing operations before income taxes
 
1,663

 
1,037

 
416

 
243

 
(33
)
Income tax provision (benefit)
 
529

 
369

 
150

 
88

 
(78
)
Income from continuing operations, net of tax
 
$
1,134

 
$
668

 
$
266

 
$
155

 
$
45

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2014
(Dollars in millions) (unaudited)
 
Total
 
Credit Card
 
Consumer Banking
 
Commercial Banking
 
Other
Earnings:
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
4,656

 
$
2,697

 
$
1,459

 
$
455

 
$
45

Non-interest income
 
1,157

 
841

 
185

 
132

 
(1
)
Total net revenue(5)
 
5,813

 
3,538

 
1,644

 
587

 
44

Provision (benefit) for credit losses
 
1,109

 
856

 
222

 
32

 
(1
)
Non-interest expense
 
3,284

 
1,888

 
1,045

 
293

 
58

Income (loss) from continuing operations before income taxes
 
1,420

 
794

 
377

 
262

 
(13
)
Income tax provision (benefit)
 
450

 
275

 
135

 
93

 
(53
)
Income from continuing operations, net of tax
 
$
970

 
$
519

 
$
242

 
$
169

 
$
40

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2014
(Dollars in millions) (unaudited)
 
Total
 
Credit Card
 
Consumer Banking
 
Commercial Banking
 
Other
Earnings:
 
 
 
 
 
 
 
 
 
 
Net interest income (expense)
 
$
4,350

 
$
2,525

 
$
1,433

 
$
421

 
$
(29
)
Non-interest income
 
1,020

 
785

 
150

 
87

 
(2
)
Total net revenue (loss)(5)
 
5,370

 
3,310

 
1,583

 
508

 
(31
)
Provision (benefit) for credit losses
 
735

 
558

 
140

 
40

 
(3
)
Non-interest expense
 
2,932

 
1,726

 
930

 
255

 
21

Income (loss) from continuing operations before income taxes
 
1,703

 
1,026

 
513

 
213

 
(49
)
Income tax provision (benefit)
 
579

 
358

 
183

 
76

 
(38
)
Income (loss) from continuing operations, net of tax
 
$
1,124

 
$
668

 
$
330

 
$
137

 
$
(11
)


12


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary—Credit Card Business(1) 
 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
 
 
2015
 
2014
 
2014
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q1
Credit Card
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
2,666

 
$
2,697

 
$
2,627

 
$
2,461

 
$
2,525

 
(1)%


6%

Non-interest income
 
816

 
841

 
846

 
839

 
785

 
(3
)
 
4

Total net revenue
 
3,482

 
3,538

 
3,473

 
3,300

 
3,310

 
(2
)
 
5

Provision for credit losses
 
669

 
856

 
787

 
549

 
558

 
(22
)
 
20

Non-interest expense
 
1,776

 
1,888

 
1,730

 
1,719

 
1,726

 
(6
)
 
3

Income from continuing operations before income taxes
 
1,037

 
794

 
956

 
1,032

 
1,026

 
31

 
1

Income tax provision
 
369

 
275

 
332

 
364

 
358

 
34

 
3

Income from continuing operations, net of tax
 
$
668

 
$
519

 
$
624

 
$
668

 
$
668

 
29


—

Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans held for investment
 
$
81,754

 
$
85,876

 
$
80,631

 
$
79,018

 
$
75,850

 
(5)%

 
8%

Average loans held for investment
 
82,581

 
81,740

 
79,494

 
76,997

 
77,502

 
1

 
7

Average yield on loans held for investment(6)
 
14.30
%

14.61
%
 
14.65
%
 
14.22
%
 
14.43
%

(31
)bps

(13
)bps
Total net revenue margin
 
16.87

 
17.31

 
17.48

 
17.14

 
17.08

 
(44
)
 
(21
)
Net charge-off rate
 
3.48

 
3.38

 
2.88

 
3.56

 
4.02

 
10

 
(54
)
30+ day performing delinquency rate
 
2.91

 
3.24

 
3.22

 
2.89

 
3.08

 
(33
)
 
(17
)
30+ day delinquency rate
 
2.97

 
3.30

 
3.29

 
2.97

 
3.16

 
(33
)
 
(19
)
Nonperforming loan rate(3)
 
0.08

 
0.08

 
0.09

 
0.10

 
0.11

 
—

 
(3
)
Card loan premium amortization and other intangible accretion(7)
 
$
11

 
$
11

 
$
18

 
$
31

 
$
37

 
—


(70)%

PCCR intangible amortization
 
84

 
87

 
90

 
94

 
98

 
(3
)
 
(14
)
Purchase volume(8)
 
57,383

 
63,484

 
57,474

 
56,358

 
47,434

 
(10
)
 
21

Domestic Card
 
 
 
 
 
 
 
 
 
 
 

 

Earnings:
 
 
 
 
 
 
 
 
 
 
 

 

Net interest income
 
$
2,421

 
$
2,432

 
$
2,361

 
$
2,193

 
$
2,255

 
—


7%

Non-interest income
 
743

 
768

 
763

 
768

 
702

 
(3
)
 
6

Total net revenue
 
3,164

 
3,200

 
3,124

 
2,961

 
2,957

 
(1
)
 
7

Provision for credit losses
 
610

 
765

 
738

 
504

 
486

 
(20
)
 
26

Non-interest expense
 
1,580

 
1,676

 
1,530

 
1,513

 
1,545

 
(6
)
 
2

Income from continuing operations before income taxes
 
974

 
759

 
856

 
944

 
926

 
28

 
5

Income tax provision
 
353

 
272

 
306

 
337

 
331

 
30

 
7

Income from continuing operations, net of tax
 
$
621

 
$
487

 
$
550

 
$
607

 
$
595

 
28

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

13


 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
 
 
2015
 
2014
 
2014
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q1
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 

 

Period-end loans held for investment
 
$
74,131

 
$
77,704

 
$
73,143

 
$
71,165

 
$
68,275

 
(5)%


9%

Average loans held for investment
 
74,770

 
74,026

 
71,784

 
69,376

 
69,810

 
1

 
7

Average yield on loans held for investment(6)
 
14.23
%

14.43
%
 
14.46
%
 
13.95
%
 
14.19
%

(20
)bps

4
bps
Total net revenue margin
 
16.93

 
17.29

 
17.41

 
17.07

 
16.94

 
(36
)
 
(1
)
Net charge-off rate
 
3.55

 
3.39

 
2.83

 
3.52

 
4.01

 
16

 
(46
)
30+ day performing delinquency rate
 
2.92

 
3.27

 
3.21

 
2.83

 
3.02

 
(35
)
 
(10
)
30+ day delinquency rate
 
2.92

 
3.27

 
3.21

 
2.83

 
3.02

 
(35
)
 
(10
)
Purchase volume(8)
 
$
52,025

 
$
58,234

 
$
53,690

 
$
52,653

 
$
44,139

 
(11
) %

18
  %
International Card
 
 
 
 
 
 
 
 
 
 
 

 

Earnings:
 
 
 
 
 
 
 
 
 
 
 

 

Net interest income
 
$
245

 
$
265

 
$
266

 
$
268

 
$
270

 
(8)%


(9)%

Non-interest income
 
73

 
73

 
83

 
71

 
83

 
—

 
(12
)
Total net revenue
 
318

 
338

 
349

 
339

 
353

 
(6
)
 
(10
)
Provision for credit losses
 
59

 
91

 
49

 
45

 
72

 
(35
)
 
(18
)
Non-interest expense
 
196

 
212

 
200

 
206

 
181

 
(8
)
 
8

Income from continuing operations before income taxes
 
63

 
35

 
100

 
88

 
100

 
80

 
(37
)
Income tax provision
 
16

 
3

 
26

 
27

 
27

 
**
 
(41
)
Income from continuing operations, net of tax
 
$
47

 
$
32

 
$
74

 
$
61

 
$
73

 
47


(36
)
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 

 

Period-end loans held for investment
 
$
7,623

 
$
8,172

 
$
7,488

 
$
7,853

 
$
7,575

 
(7)%


1%

Average loans held for investment
 
7,811

 
7,714

 
7,710

 
7,621

 
7,692

 
1

 
2

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

16.31
%
 
16.42
%
 
16.74
%
 
16.64
%

(138
)bps

(171
)bps
Total net revenue margin
 
16.31

 
17.55

 
18.13

 
17.76

 
18.38

 
(124
)
 
(207
)
Net charge-off rate
 
2.80

 
3.34

 
3.32

 
3.93

 
4.17

 
(54
)
 
(137
)
30+ day performing delinquency rate
 
2.81

 
2.94

 
3.34

 
3.40

 
3.59

 
(13
)
 
(78
)
30+ day delinquency rate
 
3.44

 
3.60

 
4.08

 
4.20

 
4.41

 
(16
)
 
(97
)
Nonperforming loan rate(3)
 
0.84

 
0.86

 
0.98

 
1.03

 
1.07

 
(2
)
 
(23
)
Purchase volume(8)
 
$
5,358

 
$
5,250

 
$
3,784

 
$
3,705

 
$
3,295

 
2%


63%



14


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Consumer Banking Business(1) 
 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
 
 
2015
 
2014
 
2014
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q1
Consumer Banking
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
1,434

 
$
1,459

 
$
1,425

 
$
1,431

 
$
1,433

 
(2)%

 
—

Non-interest income
 
158

 
185

 
179

 
170

 
150

 
(15
)
 
5

Total net revenue
 
1,592

 
1,644

 
1,604

 
1,601

 
1,583

 
(3
)
 
1

Provision for credit losses
 
206

 
222

 
198

 
143

 
140

 
(7
)
 
47

Non-interest expense
 
970

 
1,045

 
956

 
938

 
930

 
(7
)
 
4

Income from continuing operations before income taxes
 
416

 
377

 
450

 
520

 
513

 
10

 
(19
)
Income tax provision
 
150

 
135

 
161

 
186

 
183

 
11

 
(18
)
Income from continuing operations, net of tax
 
$
266

 
$
242

 
$
289

 
$
334

 
$
330

 
10

 
(19
)
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans held for investment
 
$
71,379

 
$
71,439

 
$
71,061

 
$
71,062

 
$
70,727

 
—

 
1%

Average loans held for investment
 
71,441

 
71,254

 
71,048

 
70,884

 
70,663

 
—

 
1

Average yield on loans held for investment(6)
 
6.26%


6.45
%
 
6.18
%
 
6.22
%
 
6.18
%

(19
)bps
 
8
bps
Auto loan originations
 
$
5,185

 
$
5,390

 
$
5,410

 
$
5,376

 
$
4,727

 
(4)%

 
10%

Period-end deposits
 
172,502

 
168,078

 
167,624

 
169,153

 
171,529

 
3

 
1

Average deposits
 
169,593

 
167,727

 
168,407

 
169,694

 
168,676

 
1

 
1

Average deposit interest rate
 
0.57%


0.57
%
 
0.58
%
 
0.57
%
 
0.57
%

—

 
—

Core deposit intangible amortization
 
$
22

 
$
24

 
$
26

 
$
28

 
$
30

 
(8)%

 
(27)%

Net charge-off rate
 
0.89
%

1.20
%
 
1.07
%
 
0.69
%
 
0.84
%

(31
)bps
 
5
bps
30+ day performing delinquency rate
 
2.95

 
3.60

 
3.22

 
2.91

 
2.57

 
(65
)
 
38

30+ day delinquency rate
 
3.46

 
4.23

 
3.82

 
3.49

 
3.14

 
(77
)
 
32

Nonperforming loan rate(3)
 
0.67

 
0.77

 
0.73

 
0.75

 
0.74

 
(10
)
 
(7
)
Nonperforming asset rate(4)
 
0.95

 
1.06

 
1.01

 
1.01

 
1.00

 
(11
)
 
(5
)


15


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Commercial Banking Business(1) 
 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
 
 
2015
 
2014
 
2014
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q1
Commercial Banking
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
461

 
$
455

 
$
439

 
$
436

 
$
421

 
1%


10%

Non-interest income
 
114

 
132

 
122

 
109

 
87

 
(14
)
 
31

Total net revenue(5)
 
575

 
587

 
561

 
545

 
508

 
(2
)
 
13

Provision for credit losses
 
60

 
32

 
9

 
12

 
40

 
88

 
50

Non-interest expense
 
272

 
293

 
268

 
267

 
255

 
(7
)
 
7

Income from continuing operations before income taxes
 
243

 
262

 
284

 
266

 
213

 
(7
)
 
14

Income tax provision
 
88

 
93

 
102

 
95

 
76

 
(5
)
 
16

Income from continuing operations, net of tax
 
$
155

 
$
169

 
$
182

 
$
171

 
$
137

 
(8
)

13

Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans held for investment(2)
 
$
50,741

 
$
50,890

 
$
49,788

 
$
48,321

 
$
46,230

 
—


10%

Average loans held for investment
 
51,070

 
50,339

 
48,766

 
46,991

 
45,435

 
1

 
12

Average yield on loans held for investment(5)(6)
 
3.22
%

3.33
%
 
3.39%

 
3.50
%
 
3.47
%

(11
)bps

(25
)bps
Period-end deposits
 
$
32,575

 
$
31,954

 
$
31,918

 
$
31,440

 
$
31,485

 
2%


3%

Average deposits
 
32,845

 
32,363

 
31,772

 
31,238

 
31,627

 
1

 
4

Average deposit interest rate
 
0.24
%

0.24
%
 
0.24%

 
0.24
%
 
0.25
%

—


(1
)bps
Core deposit intangible amortization
 
$
4

 
$
5

 
$
5

 
$
5

 
$
6

 
(20)%


(33)%

Net charge-off (recovery) rate
 
0.02
%

0.07
%
 
(0.05
)%
 
0.03
%
 
0.04
%

(5
)bps

(2
)bps
Nonperforming loan rate(3)
 
0.31

 
0.34

 
0.32

 
0.38

 
0.33

 
(3
)
 
(2
)
Nonperforming asset rate(4)
 
0.31

 
0.36

 
0.35

 
0.41

 
0.36

 
(5
)
 
(5
)
Risk category:(9)
 
 
 
 
 
 
 
 
 
 
 

 

Noncriticized
 
$
48,938

 
$
49,284

 
$
48,408

 
$
46,881

 
$
45,103

 
(1)%


9%

Criticized performing
 
1,645

 
1,431

 
1,219

 
1,259

 
977

 
15

 
68

Criticized nonperforming
 
158

 
175

 
161

 
181

 
150

 
(10
)
 
5

Total commercial loans
 
$
50,741

 
$
50,890

 
$
49,788

 
$
48,321

 
$
46,230

 
—


10

Risk category as a percentage of period-end commercial loans held for investment:
 
 
 
 
 
 
 
 
 
 
 

 

Noncriticized
 
96.5
%

96.9
%
 
97.3%

 
97.0
%
 
97.5
%

(40
)bps

(100
)bps
Criticized performing
 
3.2

 
2.8

 
2.4

 
2.6

 
2.2

 
40

 
100

Criticized nonperforming
 
0.3

 
0.3

 
0.3

 
0.4

 
0.3

 
—

 
—

Total commercial loans
 
100.0
%

100.0
%
 
100.0%

 
100.0
%
 
100.0
%

—


—


16


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Other and Total(1) 
 
 
 
 
 
 
 
 
 
 
 
 
2015 Q1 vs.
 
 
2015
 
2014
 
2014
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
 
Q4
 
Q1
Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income (expense)
 
$
15

 
$
45

 
$
6

 
$
(13
)
 
$
(29
)
 
(67)%


**
Non-interest income
 
(17
)
 
(1
)
 
(5
)
 
35

 
(2
)
 
**
 
**
Total net (loss) revenue(5)
 
(2
)
 
44

 
1

 
22

 
(31
)
 
**
 
(94)%

Benefit for credit losses
 
—

 
(1
)
 
(1
)
 
—

 
(3
)
 
**
 
**
Non-interest expense
 
31

 
58

 
31

 
55

 
21

 
(47
)
 
48

Loss from continuing operations before income taxes
 
(33
)
 
(13
)
 
(29
)
 
(33
)
 
(49
)
 
154

 
(33
)
Income tax benefit
 
(78
)
 
(53
)
 
(59
)
 
(64
)
 
(38
)
 
47

 
105

Income (loss) from continuing operations, net of tax
 
$
45

 
$
40

 
$
30

 
$
31

 
$
(11
)
 
13


**
Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans held for investment
 
$
104

 
$
111

 
$
112

 
$
127

 
$
134

 
(6)%


(22)%

Average loans held for investment
 
102

 
103

 
114

 
124

 
122

 
(1
)
 
(16
)
Period-end deposits
 
5,363

 
5,516

 
4,722

 
5,297

 
5,310

 
(3
)
 
1

Average deposits
 
5,413

 
5,265

 
5,020

 
5,383

 
5,539

 
3

 
(2
)
Total
 
 
 
 
 
 
 
 
 
 
 

 

Earnings:
 
 
 
 
 
 
 
 
 
 
 

 

Net interest income
 
$
4,576

 
$
4,656

 
$
4,497

 
$
4,315

 
$
4,350

 
(2)%


5%

Non-interest income
 
1,071

 
1,157

 
1,142

 
1,153

 
1,020

 
(7
)
 
5

Total net revenue
 
5,647

 
5,813

 
5,639

 
5,468

 
5,370

 
(3
)
 
5

Provision for credit losses
 
935

 
1,109

 
993

 
704

 
735

 
(16
)
 
27

Non-interest expense
 
3,049

 
3,284

 
2,985

 
2,979

 
2,932

 
(7
)
 
4

Income from continuing operations before income taxes
 
1,663

 
1,420

 
1,661

 
1,785

 
1,703

 
17

 
(2
)
Income tax provision
 
529

 
450

 
536

 
581

 
579

 
18

 
(9
)
Income from continuing operations, net of tax
 
$
1,134

 
$
970

 
$
1,125

 
$
1,204

 
$
1,124

 
17


1

Selected performance metrics:
 
 
 
 
 
 
 
 
 
 
 

 

Period-end loans held for investment(2)
 
$
203,978

 
$
208,316

 
$
201,592

 
$
198,528

 
$
192,941

 
(2)%


6%

Average loans held for investment
 
205,194

 
203,436

 
199,422

 
194,996

 
193,722

 
1

 
6

Period-end deposits
 
210,440

 
205,548

 
204,264

 
205,890

 
208,324

 
2

 
1

Average deposits
 
207,851

 
205,355

 
205,199

 
206,315

 
205,842

 
1

 
1



17


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Notes to Loan and Business Segments Disclosures (Tables 7—12)

**  
Not meaningful.
(1) 
Certain prior period amounts have been recast to conform to the current period presentation.
(2) 
Includes $3.6 billion and $3.7 billion of loans to the oil and gas industry as of March 31, 2015 and December 31, 2014, respectively, representing approximately 1.8% of total loans held for investment for both periods.
(3) The nonperforming loan ratios are calculated based on nonperforming loans for each category divided by period-end total loans held for investments.
(4) 
Nonperforming assets consist of nonperforming loans, real estate owned (“REO”) and other foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each category divided by the combined period-end total of loans held for investment, REO and other foreclosed assets for each respective category. Calculation of nonperforming assets ratios for our Consumer Banking and Commercial Banking businesses are adjusted to exclude the impact of acquired loans.
(5) 
Some of our tax-related commercial investments generate tax-exempt income or tax credits. Accordingly, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35% with offsetting reclassifications within Other category.
(6) 
Calculated by dividing annualized interest income for the period by average loans held for investment during the period for the specified loan category. Annualized interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment.
(7) 
Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the May 2012 transaction in which we acquired substantially all of HSBC’s credit card and private-label credit card business in the United States.
(8) 
Includes credit card purchase transactions, net of returns for both loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.
(9) 
Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.


18


CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures(1) 
 
 
Basel III Standardized
(Dollars in millions) (unaudited)
 
March 31,
2015
 
December 31,
2014
 
September 30,
2014
 
June 30,
2014
 
March 31,
2014
Regulatory Capital Metrics
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital
 
$
29,671

 
$
29,534

 
$
29,116

 
$
28,774

 
$
28,434

Tier 1 capital
 
31,493

 
31,355

 
30,451

 
30,111

 
29,257

Total risk-based capital(2)
 
35,880

 
35,879

 
34,860

 
34,743

 
33,784

Risk-weighted assets(3)
 
238,197

 
236,944

 
228,759

 
226,172

 
219,047

Average assets for the leverage ratio
 
295,556

 
291,243

 
286,070

 
281,345

 
280,907

Capital Ratios
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital ratio(5)
 
12.5
%
 
12.5
%
 
12.7
%
 
12.7
%
 
13.0
%
Tier 1 risk-based capital ratio(6)
 
13.2

 
13.2

 
13.3

 
13.3

 
13.4

Total risk-based capital ratio(7)
 
15.1

 
15.1

 
15.2

 
15.4

 
15.4

Tier 1 leverage ratio(8)
 
10.7

 
10.8

 
10.6

 
10.7

 
10.4

Tangible common equity (“TCE”) ratio(9)
 
9.8

 
9.5

 
9.6

 
9.5

 
9.6

Reconciliation of Non-GAAP Measures
We report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity (“TCE”) and tangible assets. The tables below provide the details of the calculation of our non-GAAP capital measures and regulatory capital. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
 
 
2015
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
Tangible Common Equity (Average)
 
 
 
 
 
 
 
 
 
 
Average stockholders’ equity
 
$
46,397

 
$
45,576

 
$
44,827

 
$
43,767

 
$
42,859

Average goodwill and intangible assets(10)
 
(15,339
)
 
(15,437
)
 
(15,525
)
 
(15,615
)
 
(15,727
)
Noncumulative perpetual preferred stock(11)
 
(1,822
)
 
(1,681
)
 
(1,338
)
 
(970
)
 
(853
)
Average tangible common equity
 
$
29,236

 
$
28,458

 
$
27,964

 
$
27,182

 
$
26,279

Tangible Common Equity (Period End)
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
$
45,730

 
$
45,053

 
$
44,018

 
$
43,815

 
$
42,801

Goodwill and intangible assets(10)
 
(15,307
)
 
(15,383
)
 
(15,472
)
 
(15,564
)
 
(15,666
)
Noncumulative perpetual preferred stock(11)
 
(1,822
)
 
(1,822
)
 
(1,336
)
 
(1,338
)
 
(853
)
Tangible common equity
 
$
28,601

 
$
27,848

 
$
27,210

 
$
26,913

 
$
26,282

 
 
 
 
 
 
 
 
 
 
 

19


 
 
2015
 
2014
 
2014
 
2014
 
2014
(Dollars in millions) (unaudited)
 
Q1
 
Q4
 
Q3
 
Q2
 
Q1
Tangible Assets (Average)
 
 
 
 
 
 
 
 
 
 
Average total assets(4)
 
$
309,401

 
$
304,153

 
$
298,913

 
$
294,089

 
$
293,551

Average goodwill and intangible assets(10)
 
(15,339
)
 
(15,437
)
 
(15,525
)
 
(15,615
)
 
(15,727
)
Average tangible assets(4)
 
$
294,062

 
$
288,716

 
$
283,388

 
$
278,474

 
$
277,824

Tangible Assets (Period End)
 
 
 
 
 
 
 
 
 
 
Total assets(4)
 
$
306,224

 
$
308,167

 
$
299,640

 
$
297,434

 
$
289,814

Goodwill and intangible assets(10)
 
(15,307
)
 
(15,383
)
 
(15,472
)
 
(15,564
)
 
(15,666
)
Tangible assets(4)
 
$
290,917

 
$
292,784

 
$
284,168

 
$
281,870

 
$
274,148

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
(Dollars in millions) (unaudited)
 
March 31,
2015
 
December 31,
2014
 
September 30,
2014
 
June 30,
2014
 
March 31,
2014
Common equity excluding AOCI
 
$
44,120

 
$
43,661

 
$
43,241

 
$
42,848

 
$
42,658

Adjustments:
 
 
 
 
 


 
 
 
 
AOCI(12)(13)
 
(26
)
 
(69
)
 
(146
)
 
6

 
(182
)
Goodwill(10)
 
(13,801
)
 
(13,805
)
 
(13,801
)
 
(13,811
)
 
(13,811
)
Intangible assets(10)(13)
 
(450
)
 
(243
)
 
(266
)
 
(289
)
 
(314
)
Other
 
(172
)
 
(10
)
 
88

 
20

 
83

Common equity Tier 1 capital
 
$
29,671

 
$
29,534

 
$
29,116

 
$
28,774

 
$
28,434

Risk-weighted assets(3)
 
$
238,197

 
$
236,944

 
$
228,759

 
$
226,172

 
$
219,047

Common equity Tier 1 capital ratio(5)
 
12.5
%
 
12.5
%
 
12.7
%
 
12.7
%
 
13.0
%
__________
(1)  
Regulatory capital metrics and capital ratios as of the end of Q1 2015 are preliminary and therefore subject to change.
(2) 
Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.
(3) 
As of January 1, 2015, risk-weighted assets are calculated under the Basel III Standardized Approach, subject to transition provisions. Prior to January 1, 2015 risk-weighted assets were calculated under Basel I.
(4) 
As of January 1, 2015, we changed our accounting principle for presenting eligible derivative assets and liabilities, as well as the related interest receivables and payables, from a gross basis of presentation to a net basis. Prior period average assets and average tangible assets have been recast to conform to this presentation. Prior period regulatory ratios have not been recast.
(5) 
Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
(6) 
Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(7) 
Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.
(8) 
Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
(9) 
TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
(10) 
Includes impact of related deferred taxes.
(11) 
Includes related surplus.
(12) 
Amounts presented are net of tax.
(13)
Amounts based on transition provisions for regulatory capital deductions and adjustments of 20% for 2014 and 40% in 2015.



20
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