Capital One Reports Second Quarter 2016 Net Income of $942 million, or $1.69 per share

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Excluding Adjusting items, Second Quarter 2016 Net Income of $979 million or $1.76 per share

July 21, 2016 4:06 PM EDT

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MCLEAN, Va., July 21, 2016 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2016 of $942 million, or $1.69 per diluted common share, compared to the first quarter of 2016 with net income of $1.0 billion, or $1.84 per diluted common share, and the second quarter of 2015 with net income of $863 million, or $1.50 per diluted common share. Excluding Adjusting items, net income for the second quarter of 2016 was $979 million or $1.76 per share.

"In the second quarter, Capital One sustained top-line growth, delivered successful 2016 CCAR results, and affirmed our guidance for domestic card credit and total company efficiency ratio," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We remain well positioned to deliver growth and returns at the higher end of banks and distribute significant capital to shareholders, subject to regulatory approval."

All comparisons below are for the second quarter of 2016 compared with the first quarter of 2016 unless otherwise noted.

Second Quarter 2016 Income Statement Summary:

Total net revenue increased 1 percent to $6.3 billion.
Total non-interest expense increased 2 percent to $3.3 billion.
- 3 percent decrease in marketing.
- 3 percent increase in operating expenses.
Pre-provision earnings decreased 1 percent to $3.0 billion.
Provision for credit losses increased 4 percent to $1.6 billion.
- Net charge-offs of $1.2 billion.
- $465 million allowance build.
Net interest margin of 6.73 percent, down 2 basis points.
Efficiency ratio of 52.69 percent.
- Efficiency ratio net of adjustments of 52.32 percent.

Second Quarter 2016 Balance Sheet Summary:

Common equity Tier 1 capital ratio under Basel III Standardized Approach of 10.9 percent at June 30, 2016.
Period-end loans held for investment in the quarter increased $7.0 billion, or 3 percent, to $234.6 billion.
- Domestic Card period-end loans increased $4.0 billion, or 5 percent, to $88.6 billion.
- Consumer Banking period-end loans increased $824 million, or 1 percent, to $71.4 billion.
  - Auto period-end loans increased $1.8 billion, or 4 percent, to $44.5 billion.
  - Home loans period-end loans decreased $985 million, or 4 percent, to $23.4 billion, driven by planned run-off of acquired portfolios.
- Commercial Banking period-end loans increased $2.0 billion, or 3 percent, to $66.2 billion.
Average loans held for investment in the quarter increased $3.6 billion, or 2 percent, to $230.4 billion.
- Domestic Card average loans increased $833 million, or 1 percent, to $86.0 billion.
- Consumer Banking average loans increased $692 million, or 1 percent, to $71.0 billion:
  - Auto average loans increased $1.6 billion, or 4 percent, to $43.6 billion.
  - Home loans average loans decreased $946 million, or 4 percent, to $23.8 billion, driven by planned run-off of acquired portfolios.
- Commercial Banking average loans increased $1.6 billion, or 2 percent, to $64.9 billion.
Period-end total deposits decreased $720 million, or less than 1 percent, to $221.1 billion, while average deposits increased $2.0 billion, or 1 percent, to $221.1 billion.
Interest-bearing deposits rate paid increased by 2 basis points to 0.60 percent.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 21, 2016 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 August 4, 2016 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, 2015.

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 $221.1 billion in deposits and $339.1 billion in total assets as of June 30, 2016. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Exhibit 99.2
Capital One Financial Corporation
Financial Supplement
Second Quarter 2016(1)
Table of Contents

Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	4
	Table 3:	Consolidated Statements of Income	5
	Table 4:	Consolidated Balance Sheets	7
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	9
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	11
	Table 7:	Loan Information and Performance Statistics	12
	Table 8:	Allowance for Loan and Lease 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
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	21
Other
	Table 15:	Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital 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 June 30, 2016 once it is filed with the Securities and Exchange Commission.

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 1: Financial Summary—Consolidated
											2016 Q2 vs.				Six Months Ended June 30,
(Dollars in millions, except per share data and as noted) (unaudited)	2016		2016		2015		2015		2015		2016		2015						2016 vs.
	Q2		Q1		Q4		Q3		Q2		Q1		Q2		2016		2015		2015
Income Statement
Net interest income	$	5,093	$	5,056	$	4,961	$	4,760	$	4,537	1	%	12	%	$	10,149	$	9,113	11	%
Non-interest income	1,161		1,164		1,233		1,140		1,135		—		2		2,325		2,206		5
Total net revenue(1)	6,254		6,220		6,194		5,900		5,672		1		10		12,474		11,319		10
Provision for credit losses	1,592		1,527		1,380		1,092		1,129		4		41		3,119		2,064		51
Non-interest expense:
Marketing	415		428		564		418		387		(3)		7		843		762		11
Amortization of intangibles	95		101		103		106		111		(6)		(14)		196		221		(11)
Operating expenses	2,785		2,694		2,813		2,636		2,809		3		(1)		5,479		5,373		2
Total non-interest expense	3,295		3,223		3,480		3,160		3,307		2		—		6,518		6,356		3
Income from continuing operations before income taxes	1,367		1,470		1,334		1,648		1,236		(7)		11		2,837		2,899		(2)
Income tax provision	424		452		426		530		384		(6)		10		876		913		(4)
Income from continuing operations, net of tax	943		1,018		908		1,118		852		(7)		11		1,961		1,986		(1)
Income (loss) from discontinued operations, net of tax(2)	(1)		(5)		12		(4)		11		(80)		**		(6)		30		**
Net income	942		1,013		920		1,114		863		(7)		9		1,955		2,016		(3)
Dividends and undistributed earnings allocated to participating securities(3)	(6)		(6)		(4)		(6)		(4)		—		50		(12)		(10)		20
Preferred stock dividends	(65)		(37)		(68)		(29)		(29)		76		124		(102)		(61)		67
Net income available to common stockholders	$	871	$	970	$	848	$	1,079	$	830	(10)		5		$	1,841	$	1,945	(5)
Common Share Statistics
Basic earnings per common share:(3)
Net income from continuing operations	$	1.70	$	1.86	$	1.58	$	2.01	$	1.50	(9)	%	13	%	$	3.57	$	3.49	2	%
Income (loss) from discontinued operations	—		(0.01)		0.02		(0.01)		0.02		**		**		(0.01)		0.06		**
Net income per basic common share	$	1.70	$	1.85	$	1.60	$	2.00	$	1.52	(8)		12		$	3.56	$	3.55	—
Diluted earnings per common share:(3)
Net income from continuing operations	$	1.69	$	1.85	$	1.56	$	1.99	$	1.48	(9)		14		$	3.53	$	3.45	2
Income (loss) from discontinued operations	—		(0.01)		0.02		(0.01)		0.02		**		**		(0.01)		0.06		**
Net income per diluted common share(4)	$	1.69	$	1.84	$	1.58	$	1.98	$	1.50	(8)		13		$	3.52	$	3.51	—
Weighted-average common shares outstanding (in millions):
Basic	511.7		523.5		530.8		540.6		545.6		(2)		(6)		517.6		548.0		(6)
Diluted	516.5		528.0		536.3		546.3		552.0		(2)		(6)		522.3		554.7		(6)
Common shares outstanding (period end, in millions)	505.9		514.5		527.3		534.9		542.5		(2)		(7)		505.9		542.5		(7)
Dividends paid per common share	$	0.40	$	0.40	$	0.40	$	0.40	$	0.40	—		—		$	0.80	$	0.70	14
Tangible book value per common share (period end)(5)	57.84		55.94		53.65		54.66		52.74		3		10		57.84		52.74		10

											2016 Q2 vs.				Six Months Ended June 30,
(Dollars in millions) (unaudited)	2016		2016		2015		2015		2015		2016		2015						2016 vs.
(Dollars in millions) (unaudited)	Q2		Q1		Q4		Q3		Q2		Q1		Q2		2016		2015		2015
Balance Sheet (Period End)
Loans held for investment(6)	$	234,603	$	227,613	$	229,851	$	213,329	$	209,705	3	%	12	%	$	234,603	$	209,705	12	%
Interest-earning assets	307,163		298,348		302,007		283,073		280,137		3		10		307,163		280,137		10
Total assets	339,117		330,346		334,048		313,700		310,510		3		9		339,117		310,510		9
Interest-bearing deposits	195,635		196,597		191,874		187,848		183,657		—		7		195,635		183,657		7
Total deposits	221,059		221,779		217,721		212,903		208,780		—		6		221,059		208,780		6
Borrowings	59,181		50,497		59,115		42,778		45,766		17		29		59,181		45,766		29
Common equity	44,813		44,411		43,990		44,391		43,849		1		2		44,813		43,849		2
Total stockholders' equity	48,108		47,707		47,284		47,685		46,659		1		3		48,108		46,659		3
Balance Sheet (Average Balances)
Loans held for investment(6)	$	230,379	$	226,736	$	220,052	$	211,227	$	206,337	2	%	12	%	$	228,557	$	205,768	11	%
Interest-earning assets	302,764		299,456		292,054		283,082		276,585		1		9		301,106		277,501		9
Total assets	334,479		331,919		323,354		313,822		307,206		1		9		333,197		308,295		8
Interest-bearing deposits	195,641		194,125		189,885		185,800		183,946		1		6		194,883		183,475		6
Total deposits	221,146		219,180		215,899		210,974		209,143		1		6		220,163		208,501		6
Borrowings	54,359		53,761		48,850		45,070		41,650		1		31		54,060		43,854		23
Common equity	45,640		45,782		45,418		45,407		44,878		—		2		45,711		44,727		2
Total stockholders' equity	48,934		49,078		48,712		48,456		47,255		—		4		49,007		46,828		5

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 2: Selected Metrics—Consolidated
																2016 Q2 vs.				Six Months Ended June 30,
(Dollars in millions except as noted) (unaudited)	2016			2016			2015			2015			2015			2016		2015								2016 vs.
(Dollars in millions except as noted) (unaudited)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2016			2015			2015
Performance Metrics
Net interest income growth (period over period)	1		%	2		%	4		%	5		%	(1)		%	**		**		11		%	5		%	**
Non-interest income growth (period over period)	—			(6)			8			—			6			**		**		5			2			**
Total net revenue growth (period over period)	1			—			5			4			—			**		**		10			4			**
Total net revenue margin(7)	8.26			8.31			8.48			8.34			8.20			(5)	bps	6	bps	8.29			8.16			13	bps
Net interest margin(8)	6.73			6.75			6.79			6.73			6.56			(2)		17		6.74			6.57			17
Return on average assets	1.13			1.23			1.12			1.43			1.11			(10)		2		1.18			1.29			(11)
Return on average tangible assets(9)	1.18			1.29			1.18			1.50			1.17			(11)		1		1.24			1.36			(12)
Return on average common equity(10)	7.64			8.52			7.36			9.54			7.30			(88)		34		8.08			8.56			(48)
Return on average tangible common equity(11)	11.61			12.94			11.11			14.33			11.06			(133)		55		12.28			13.01			(73)
Non-interest expense as a percentage of average loans held for investment	5.72			5.69			6.33			5.98			6.41			3		(69)		5.70			6.18			(48)
Efficiency ratio(12)	52.69			51.82			56.18			53.56			58.30			87		(561)		52.25			56.15			(390)
Effective income tax rate for continuing operations	31.0			30.7			31.9			32.2			31.1			30		(10)		30.9			31.5			(60)
Employees (in thousands), period end	46.1			45.8			45.4			46.9			47.5			1	%	(3)	%	46.1			47.5			(3)	%
Credit Quality Metrics
Allowance for loan and lease losses	$	5,881		$	5,416		$	5,130		$	4,847		$	4,676		9	%	26	%	$	5,881		$	4,676		26	%
Allowance as a percentage of loans held for investment	2.51		%	2.38		%	2.23		%	2.27		%	2.23		%	13	bps	28	bps	2.51		%	2.23		%	28	bps
Net charge-offs	$	1,155		$	1,178		$	1,078		$	890		$	846		(2)	%	37	%	$	2,333		$	1,727		35	%
Net charge-off rate(13)	2.01		%	2.08		%	1.96		%	1.69		%	1.64		%	(7)	bps	37	bps	2.04		%	1.68		%	36	bps
30+ day performing delinquency rate	2.47			2.33			2.69			2.63			2.33			14		14		2.47			2.33			14
30+ day delinquency rate	2.79			2.64			3.00			2.95			2.65			15		14		2.79			2.65			14
Capital Ratios(14)
Common equity Tier 1 capital	10.9		%	11.1		%	11.1		%	12.1		%	12.1		%	(20)	bps	(120)	bps	10.9		%	12.1		%	(120)	bps
Tier 1 capital	12.2			12.4			12.4			13.4			13.3			(20)		(110)		12.2			13.3			(110)
Total capital	14.4			14.6			14.6			15.1			15.1			(20)		(70)		14.4			15.1			(70)
Tier 1 leverage	10.2			10.2			10.6			11.1			11.1			—		(90)		10.2			11.1			(90)
Tangible common equity ("TCE")(15)	9.0			9.1			8.9			9.8			9.7			(10)		(70)		9.0			9.7			(70)

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 3: Consolidated Statements of Income

	Three Months Ended						2016 Q2 vs.				Six Months Ended June 30,
(Dollars in millions, except per share data and as noted) (unaudited)	2016		2016		2015		2016		2015						2016 vs.
	Q2		Q1		Q2		Q1		Q2		2016		2015		2015
Interest income:
Loans, including loans held for sale	$	5,148	$	5,085	$	4,531	1	%	14	%	$	10,233	$	9,071	13	%
Investment securities	405		415		382		(2)		6		820		788		4
Other	18		17		24		6		(25)		35		52		(33)
Total interest income	5,571		5,517		4,937		1		13		11,088		9,911		12
Interest expense:
Deposits	292		283		272		3		7		575		543		6
Securitized debt obligations	47		48		36		(2)		31		95		69		38
Senior and subordinated notes	111		106		80		5		39		217		159		36
Other borrowings	28		24		12		17		133		52		27		93
Total interest expense	478		461		400		4		20		939		798		18
Net interest income	5,093		5,056		4,537		1		12		10,149		9,113		11
Provision for credit losses	1,592		1,527		1,129		4		41		3,119		2,064		51
Net interest income after provision for credit losses	3,501		3,529		3,408		(1)		3		7,030		7,049		—
Non-interest income:
Service charges and other customer-related fees	371		404		429		(8)		(14)		775		866		(11)
Interchange fees, net	616		596		567		3		9		1,212		1,063		14
Net other-than-temporary impairment recognized in earnings	(2)		(8)		(7)		(75)		(71)		(10)		(22)		(55)
Other	176		172		146		2		21		348		299		16
Total non-interest income	1,161		1,164		1,135		—		2		2,325		2,206		5
Non-interest expense:
Salaries and associate benefits	1,279		1,270		1,360		1		(6)		2,549		2,571		(1)
Occupancy and equipment	465		458		439		2		6		923		874		6
Marketing	415		428		387		(3)		7		843		762		11
Professional services	304		278		334		9		(9)		582		630		(8)
Communications and data processing	262		243		208		8		26		505		410		23
Amortization of intangibles	95		101		111		(6)		(14)		196		221		(11)
Other	475		445		468		7		1		920		888		4
Total non-interest expense	3,295		3,223		3,307		2		—		6,518		6,356		3
Income from continuing operations before income taxes	1,367		1,470		1,236		(7)		11		2,837		2,899		(2)
Income tax provision	424		452		384		(6)		10		876		913		(4)
Income from continuing operations, net of tax	943		1,018		852		(7)		11		1,961		1,986		(1)
Income (loss) from discontinued operations, net of tax(2)	(1)		(5)		11		(80)		**		(6)		30		**
Net income	942		1,013		863		(7)		9		1,955		2,016		(3)
Dividends and undistributed earnings allocated to participating securities(3)	(6)		(6)		(4)		—		50		(12)		(10)		20
Preferred stock dividends	(65)		(37)		(29)		76		124		(102)		(61)		67
Net income available to common stockholders	$	871	$	970	$	830	(10)		5		$	1,841	$	1,945	(5)

	Three Months Ended						2016 Q2 vs.				Six Months Ended June 30,
(Dollars in millions, except per share data and as noted) (unaudited)	2016		2016		2015		2016		2015						2016 vs.
	Q2		Q1		Q2		Q1		Q2		2016		2015		2015
Basic earnings per common share:(3)
Net income from continuing operations	$	1.70	$	1.86	$	1.50	(9)	%	13	%	$	3.57	$	3.49	2	%
Income (loss) from discontinued operations	—		(0.01)		0.02		**		**		(0.01)		0.06		**
Net income per basic common share(4)	$	1.70	$	1.85	$	1.52	(8)		12		$	3.56	$	3.55	—
Diluted earnings per common share:(3)
Net income from continuing operations	$	1.69	$	1.85	$	1.48	(9)		14		$	3.53	$	3.45	2
Income (loss) from discontinued operations	—		(0.01)		0.02		**		**		(0.01)		0.06		**
Net income per diluted common share(4)	$	1.69	$	1.84	$	1.50	(8)		13		$	3.52	$	3.51	—
Weighted-average common shares outstanding (in millions):
Basic common shares	511.7		523.5		545.6		(2)		(6)		517.6		548.0		(6)
Diluted common shares	516.5		528.0		552.0		(2)		(6)		522.3		554.7		(6)
Dividends paid per common share	$	0.40	$	0.40	$	0.40	—		—		$	0.80	$	0.70	14

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 4: Consolidated Balance Sheets
							June 30, 2016 vs.
(Dollars in millions) (unaudited)	June 30, 2016		December 31, 2015		June 30, 2015		December 31, 2015		June 30,2015
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,253	$	3,407	$	2,879	(5)	%	13	%
Interest-bearing deposits with banks	3,840		4,577		4,275		(16)		(10)
Federal funds sold and securities purchased under agreements to resell	56		39		2		44		**
Total cash and cash equivalents	7,149		8,023		7,156		(11)		—
Restricted cash for securitization investors	265		1,017		253		(74)		5
Securities available for sale, at fair value	39,960		39,061		39,136		2		2
Securities held to maturity, at carrying value	25,120		24,619		23,668		2		6
Loans held for investment:(6)
Unsecuritized loans held for investment	202,778		196,068		175,407		3		16
Loans held in consolidated trusts	31,825		33,783		34,298		(6)		(7)
Total loans held for investment	234,603		229,851		209,705		2		12
Allowance for loan and lease losses	(5,881)		(5,130)		(4,676)		15		26
Net loans held for investment	228,722		224,721		205,029		2		12
Loans held for sale, at lower of cost or fair value	1,220		904		1,066		35		14
Premises and equipment, net	3,556		3,584		3,602		(1)		(1)
Interest receivable	1,236		1,189		1,056		4		17
Goodwill	14,495		14,480		13,984		—		4
Other assets	17,394		16,450		15,560		6		12
Total assets	$	339,117	$	334,048	$	310,510	2		9

							June 30, 2016 vs.
(Dollars in millions) (unaudited)	June 30,2016		December 31, 2015		June 30,2015		December 31, 2015		June 30,2015
Liabilities:
Interest payable	$	301	$	299	$	262	1	%	15	%
Deposits:
Non-interest-bearing deposits	25,424		25,847		25,123		(2)		1
Interest-bearing deposits	195,635		191,874		183,657		2		7
Total deposits	221,059		217,721		208,780		2		6
Securitized debt obligations	16,130		16,166		13,785		—		17
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	999		981		1,888		2		(47)
Senior and subordinated notes	21,872		21,837		19,987		—		9
Other borrowings	20,180		20,131		10,106		—		100
Total other debt	43,051		42,949		31,981		—		35
Other liabilities	10,468		9,629		9,043		9		16
Total liabilities	291,009		286,764		263,851		1		10

Stockholders' equity:
Preferred stock	0		0		0		—		—
Common stock	7		6		6		17		17
Additional paid-in capital, net	29,786		29,655		29,063		—		2
Retained earnings	28,479		27,045		25,540		5		12
Accumulated other comprehensive income (loss)	241		(616)		(397)		**		**
Treasury stock, at cost	(10,405)		(8,806)		(7,553)		18		38
Total stockholders' equity	48,108		47,284		46,659		2		3
Total liabilities and stockholders' equity	$	339,117	$	334,048	$	310,510	2		9



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

**	Not meaningful.

(1)	Total net revenue was reduced by $244 million in Q2 2016, $228 million in Q1 2016, $222 million in Q4 2015, $195 million in Q3 2015 and $168 million in Q2 2015 for the estimated uncollectible amount of billed finance charges and fees and related losses.

(2)	Historically, the majority of the provision (benefit) for representation and warranty losses has been included, net of tax, in discontinued operations. The provision (benefit) for mortgage representation and warranty losses included the following activity:

																2016		2016		2015		2015		2015
	(Dollars in millions) (unaudited)															Q2		Q1		Q4		Q3		Q2
	Provision (benefit) for mortgage representation and warranty losses before income taxes:
	Recorded in continuing operations															$	(1)	$	(1)	$	(1)	$	(7)	$	(9)
	Recorded in discontinued operations															2		3		(21)		3		(27)
	Total provision (benefit) for mortgage representation and warranty losses before income taxes															$	1	$	2	$	(22)	$	(4)	$	(36)

	The mortgage representation and warranty reserve was $614 million as of June 30, 2016, $610 million as of December 31, 2015 and $636 million as of June 30, 2015.

(3)	Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.

(4)	In Q2 2016, we recorded charges totaling $30 million associated with (i) a build of $54 million in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve"); offset by (ii) a gain of $24 million related to the exchange of our ownership interest in Visa Europe with Visa Inc. as a result of Visa Inc's acquisition of Visa Europe. In Q4 2015, we recorded charges totaling $72 million associated with (i) closing the GE Healthcare Financial Services ("HFS") acquisition and establishing an initial allowance and reserve related to the loans acquired; (ii) certain planned site closures; and (iii) revisions to the restructuring charges recorded in Q2 2015 to reflect updated information. In Q3 2015, we recorded a build in the U.K. PPI Reserve of $69 million. In Q2 2015, we recorded charges totaling $225 million associated with (i) a restructuring charge of $147 million for severance and related benefits pursuant to our ongoing benefit programs as a result of the realignment of our workforce; and (ii) a build in the U.K. PPI Reserve of $78 million. We report the following non-GAAP financial measures that we believe are helpful for investors and users of our financial information to understand the effect of these items on our reported results. The table below presents a reconciliation of our reported results to these non-GAAP financial measures. Period not presented had no adjustments.

		2016 Q2						2015 Q4						2015 Q3						2015 Q2
	(Dollars in millions, except per share data) (unaudited)	Pre-Tax Income		Net Income		Diluted EPS		Pre-Tax Income		Net Income		Diluted EPS		Pre-Tax Income		Net Income		Diluted EPS		Pre-Tax Income		Net Income		Diluted EPS
	Reported results	$	1,367	$	942	$	1.69	$	1,334	$	920	$	1.58	$	1,648	$	1,114	$	1.98	$	1,236	$	863	$	1.50
	Adjustments	30		37		0.07		72		46		0.09		69		69		0.12		225		155		0.28
	Results excluding adjustments	$	1,397	$	979	$	1.76	$	1,406	$	966	$	1.67	$	1,717	$	1,183	$	2.10	$	1,461	$	1,018	$	1.78

(5)	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on non-GAAP measures.

(6)	Included in loans held for investment are purchased credit-impaired loans ("PCI loans") recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3," or Accounting Standards Codification 310-30). These include certain of our consumer and commercial loans that were acquired through business combinations. The table below presents amounts related to PCI loans:

																2016		2016		2015		2015		2015
	(Dollars in millions) (unaudited)															Q2		Q1		Q4		Q3		Q2
	PCI loans:
	Period-end unpaid principal balance															$	18,256	$	19,492	$	20,434	$	20,585	$	21,841
	Period-end loans held for investment															17,358		18,568		19,518		19,743		20,970
	Average loans held for investment															17,783		18,894		19,319		20,116		21,440

(7)	Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.

(8)	Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

(9)	Return on average tangible assets is a non-GAAP measure calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on non-GAAP measures.

(10)	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.

(11)	Return on average tangible common equity ("ROTCE") is a non-GAAP measure 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. Our calculation of ROTCE may not be comparable to similarly titled measures reported by other companies. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on non-GAAP measures.

(12)	Calculated based on total non-interest expense for the period divided by total net revenue for the period. The efficiency ratio, excluding the adjustments discussed above in Footnote 4, was 52.32% for Q2 2016, 55.82% for Q4 2015, 52.78% for Q3 2015 and 54.63% for Q2 2015. The adjusted efficiency ratios are non-GAAP measures that we believe would provide useful information to investors and users of our financial information.

(13)	Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

(14)	Ratios as of the end of Q2 2016 are preliminary and therefore subject to change. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.

(15)	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on non-GAAP measures.

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin

	2016 Q2						2016 Q1						2015 Q2
	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)	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)
Interest-earning assets:
Loans, including loans held for sale	$	231,496	$	5,148	8.90	%	$	227,573	$	5,085	8.94	%	$	207,335	$	4,531	8.74	%
Investment securities	65,754		405		2.46		65,156		415		2.55		63,771		382		2.40
Cash equivalents and other	5,514		18		1.31		6,727		17		1.01		5,479		24		1.75
Total interest-earning assets	$	302,764	$	5,571	7.36		$	299,456	$	5,517	7.37		$	276,585	$	4,937	7.14

Interest-bearing liabilities:
Interest-bearing deposits	$	195,641	$	292	0.60		$	194,125	$	283	0.58		$	183,946	$	272	0.59
Securitized debt obligations	15,226		47		1.23		15,361		48		1.25		13,219		36		1.09
Senior and subordinated notes	21,717		111		2.04		21,993		106		1.93		20,336		80		1.57
Other borrowings and liabilities	18,255		28		0.61		17,176		24		0.56		8,857		12		0.54
Total interest-bearing liabilities	$	250,839	$	478	0.76		$	248,655	$	461	0.74		$	226,358	$	400	0.71
Net interest income/spread			$	5,093	6.60				$	5,056	6.63				$	4,537	6.43
Impact of non-interest-bearing funding					0.13						0.12						0.13
Net interest margin					6.73	%					6.75	%					6.56	%

							Six Months Ended June 30,
							2016						2015
							Average Balance		Interest Income/Expense(1)		Yield/Rate(1)		Average Balance		Interest Income/Expense(1)		Yield/Rate(1)
(Dollars in millions) (unaudited)							Average Balance		Interest Income/Expense(1)		Yield/Rate(1)		Average Balance		Interest Income/Expense(1)		Yield/Rate(1)
Interest-earning assets:
Loans, including loans held for sale							$	229,534	$	10,233	8.92	%	$	206,598	$	9,071	8.78	%
Investment securities							65,455		820		2.51		63,477		788		2.48
Cash equivalents and other							6,117		35		1.14		7,426		52		1.40
Total interest-earning assets							$	301,106	$	11,088	7.36		$	277,501	$	9,911	7.14

Interest-bearing liabilities:
Interest-bearing deposits							$	194,883	$	575	0.59		$	183,475	$	543	0.59
Securitized debt obligations							15,293		95		1.24		12,396		69		1.11
Senior and subordinated notes							21,855		217		1.99		20,465		159		1.55
Other borrowings and liabilities							17,716		52		0.59		11,771		27		0.46
Total interest-bearing liabilities							$	249,747	$	939	0.75		$	228,107	$	798	0.70
Net interest income/spread									$	10,149	6.61				$	9,113	6.44
Impact of non-interest-bearing funding											0.13						0.13
Net interest margin											6.74	%					6.57	%

__________
(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.

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics

																2016 Q2 vs.				Six Months Ended June 30,
(Dollars in millions) (unaudited)	2016Q2			2016Q1			2015Q4			2015Q3			2015Q2			2016Q1		2015Q2		2016			2015			2016 vs.2015
Loans Held For Investment (Period End)
Credit card:
Domestic credit card	$	88,581		$	84,561		$	87,939		$	82,178		$	78,984		5	%	12	%	$	88,581		$	78,984		12	%
International credit card	8,323			8,138			8,186			7,957			8,219			2		1		8,323			8,219			1
Total credit card	96,904			92,699			96,125			90,135			87,203			5		11		96,904			87,203			11
Consumer banking:
Auto	44,502			42,714			41,549			41,052			39,991			4		11		44,502			39,991			11
Home loan	23,358			24,343			25,227			26,340			27,595			(4)		(15)		23,358			27,595			(15)
Retail banking	3,555			3,534			3,596			3,598			3,590			1		(1)		3,555			3,590			(1)
Total consumer banking	71,415			70,591			70,372			70,990			71,176			1		—		71,415			71,176			—
Commercial banking:
Commercial and multifamily real estate	26,341			25,559			25,518			23,585			22,886			3		15		26,341			22,886			15
Commercial and industrial	39,313			38,102			37,135			27,873			27,660			3		42		39,313			27,660			42
Total commercial lending	65,654			63,661			62,653			51,458			50,546			3		30		65,654			50,546			30
Small-ticket commercial real estate	548			580			613			654			685			(6)		(20)		548			685			(20)
Total commercial banking	66,202			64,241			63,266			52,112			51,231			3		29		66,202			51,231			29
Other loans	82			82			88			92			95			—		(14)		82			95			(14)
Total loans held for investment	$	234,603		$	227,613		$	229,851		$	213,329		$	209,705		3		12		$	234,603		$	209,705		12
Loans Held For Investment (Average)
Credit card:
Domestic credit card	$	85,981		$	85,148		$	83,760		$	80,402		$	75,924		1	%	13	%	$	85,564		$	75,349		14	%
International credit card	8,401			7,839			8,127			8,048			7,977			7		5		8,120			7,895			3
Total credit card	94,382			92,987			91,887			88,450			83,901			2		12		93,684			83,244			13
Consumer banking:
Auto	43,605			41,962			41,333			40,560			39,546			4		10		42,784			38,970			10
Home loan	23,835			24,781			25,776			26,934			28,251			(4)		(16)		24,308			28,869			(16)
Retail banking	3,548			3,553			3,595			3,603			3,570			—		(1)		3,550			3,565			—
Total consumer banking	70,988			70,296			70,704			71,097			71,367			1		(1)		70,642			71,404			(1)
Commercial banking:
Commercial and multifamily real estate	25,661			25,015			25,613			23,305			22,853			3		12		25,338			22,985			10
Commercial and industrial	38,713			37,762			31,132			27,620			27,414			3		41		38,237			27,303			40
Total commercial lending	64,374			62,777			56,745			50,925			50,267			3		28		63,575			50,288			26
Small-ticket commercial real estate	564			598			634			667			709			(6)		(20)		581			735			(21)
Total commercial banking	64,938			63,375			57,379			51,592			50,976			2		27		64,156			51,023			26
Other loans	71			78			82			88			93			(9)		(24)		75			97			(23)
Total average loans held for investment	$	230,379		$	226,736		$	220,052		$	211,227		$	206,337		2		12		$	228,557		$	205,768		11
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card	4.07		%	4.16		%	3.75		%	3.08		%	3.42		%	(9)	bps	65	bps	4.12		%	3.49		%	63	bps
International credit card	3.54			3.24			2.76			1.80			2.65			30		89		3.39			2.73			66
Total credit card	4.02			4.09			3.66			2.96			3.35			(7)		67		4.05			3.42			63

																2016 Q2 vs.					Six Months Ended June 30,
(Dollars in millions) (unaudited)		2016Q2			2016Q1			2015Q4			2015Q3			2015Q2		2016Q1		2015Q2			2016			2015		2016 vs.2015
Consumer banking:
Auto		1.20	%		1.60	%		2.10	%		1.85	%		1.22	%	(40)	bps	(2)	bps		1.39	%		1.38	%	1	bps
Home loan		0.09			0.05			0.05			0.01			0.04		4		5			0.07			0.03		4
Retail banking		1.26			1.36			1.43			1.53			1.39		(10)		(13)			1.31			1.18		13
Total consumer banking		0.83			1.04			1.32			1.14			0.76		(21)		7			0.93			0.83		10
Commercial banking:
Commercial and multifamily real estate		(0.02)			(0.01)			(0.03)			(0.15)			(0.04)		(1)		2			(0.02)			(0.03)		1
Commercial and industrial		0.62			0.49			0.07			0.61			0.13		13		49			0.56			0.09		47
Total commercial lending		0.37			0.29			0.02			0.26			0.05		8		32			0.33			0.03		30
Small-ticket commercial real estate		0.33			0.13			0.34			0.50			0.15		20		18			0.23			0.32		(9)
Total commercial banking		0.37			0.29			0.03			0.26			0.05		8		32			0.33			0.04		29
Total net charge-offs		2.01			2.08			1.96			1.69			1.64		(7)		37			2.04			1.68		36
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card		3.14	%		3.09	%		3.39	%		3.28	%		2.84	%	5	bps	30	bps		3.14	%		2.84	%	30	bps
International credit card		3.24			3.32			2.98			2.81			2.65		(8)		59			3.24			2.65		59
Total credit card		3.15			3.11			3.36			3.24			2.82		4		33			3.15			2.82		33
Consumer banking:
Auto		5.59			5.14			6.69			6.10			5.58		45		1			5.59			5.58		1
Home loan		0.14			0.14			0.16			0.18			0.17		—		(3)			0.14			0.17		(3)
Retail banking		0.62			0.61			0.76			0.62			0.66		1		(4)			0.62			0.66		(4)
Total consumer banking		3.56			3.19			4.05			3.62			3.24		37		32			3.56			3.24		32
Nonperforming Loans and Nonperforming Assets Rates(1)(2)
Credit card:
International credit card		0.53	%		0.59	%		0.65	%		0.77	%		0.83	%	(6)	bps	(30)	bps		0.53	%		0.83	%	(30)	bps
Total credit card		0.05			0.05			0.06			0.07			0.08		—		(3)			0.05			0.08		(3)
Consumer banking:
Auto		0.38			0.31			0.53			0.49			0.40		7		(2)			0.38			0.40		(2)
Home loan		1.24			1.26			1.23			1.18			1.13		(2)		11			1.24			1.13		11
Retail banking		0.89			0.83			0.77			0.74			0.79		6		10			0.89			0.79		10
Total consumer banking		0.69			0.66			0.79			0.76			0.70		3		(1)			0.69			0.70		(1)
Commercial banking:
Commercial and multifamily real estate		0.10			0.12			0.03			0.03			0.12		(2)		(2)			0.10			0.12		(2)
Commercial and industrial		2.58			2.66			1.45			1.58			1.56		(8)		102			2.58			1.56		102
Total commercial lending		1.59			1.64			0.87			0.87			0.91		(5)		68			1.59			0.91		68
Small-ticket commercial real estate		1.59			1.11			0.83			0.65			0.47		48		112			1.59			0.47		112
Total commercial banking		1.59			1.63			0.87			0.87			0.90		(4)		69			1.59			0.90		69
Total nonperforming loans		0.68			0.69			0.51			0.50			0.50		(1)		18			0.68			0.50		18
Total nonperforming assets		0.80			0.83			0.65			0.64			0.64		(3)		16			0.80			0.64		16

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 8: Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity

	Three Months Ended June 30, 2016
	Credit Card						Consumer Banking
(Dollars in millions) (unaudited)	Domestic Card		International Card		Total Credit Card		Auto		HomeLoan		RetailBanking		TotalConsumer Banking		Commercial Banking		Other		Total
Allowance for loan and lease losses:
Balance as of March 31, 2016	$	3,440	$	345	$	3,785	$	772	$	64	$	78	$	914	$	714	$	3	$	5,416
Provision (benefit) for loan and lease losses	1,164		97		1,261		191		(1)		14		204		185		(1)		1,649
Charge-offs	(1,102)		(113)		(1,215)		(227)		(7)		(14)		(248)		(64)		(1)		(1,528)
Recoveries	228		38		266		97		2		3		102		4		1		373
Net charge-offs	(874)		(75)		(949)		(130)		(5)		(11)		(146)		(60)		—		(1,155)
Other changes(3)	—		(11)		(11)		—		—		—		—		(18)		—		(29)
Balance as of June 30, 2016	3,730		356		4,086		833		58		81		972		821		2		5,881
Reserve for unfunded lending commitments:
Balance as of March 31, 2016	—		—		—		—		—		8		8		218		—		226
Provision (benefit) for losses on unfunded lending commitments	—		—		—		—		—		—		—		(57)		—		(57)
Balance as of June 30, 2016	—		—		—		—		—		8		8		161		—		169
Combined allowance and reserve as of June 30, 2016	$	3,730	$	356	$	4,086	$	833	$	58	$	89	$	980	$	982	$	2	$	6,050

	Six Months Ended June 30, 2016
	Credit Card						Consumer Banking
(Dollars in millions) (unaudited)	Domestic Card		International Card		Total Credit Card		Auto		HomeLoan		RetailBanking		TotalConsumer Banking		Commercial Banking		Other		Total
Allowance for loan and lease losses:
Balance as of December 31, 2015	$	3,355	$	299	$	3,654	$	726	$	70	$	72	$	868	$	604	$	4	$	5,130
Provision (benefit) for loan and lease losses	2,136		196		2,332		405		(4)		32		433		356		(3)		3,118
Charge-offs	(2,225)		(212)		(2,437)		(496)		(12)		(31)		(539)		(112)		(2)		(3,090)
Recoveries	464		74		538		198		4		8		210		6		3		757
Net charge-offs	(1,761)		(138)		(1,899)		(298)		(8)		(23)		(329)		(106)		1		(2,333)
Other changes(3)	—		(1)		(1)		—		—		—		—		(33)		—		(34)
Balance as of June 30, 2016	3,730		356		4,086		833		58		81		972		821		2		5,881
Reserve for unfunded lending commitments:
Balance as of December 31, 2015	—		—		—		—		—		7		7		161		—		168
Provision (benefit) for losses on unfunded lending commitments	—		—		—		—		—		1		1		—		—		1
Balance as of June 30, 2016	—		—		—		—		—		8		8		161		—		169
Combined allowance and reserve as of June 30, 2016	$	3,730	$	356	$	4,086	$	833	$	58	$	89	$	980	$	982	$	2	$	6,050

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 9: Financial Summary—Business Segment Results

	Three Months Ended June 30, 2016										Six Months Ended June 30, 2016
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other		Total		Credit Card		Consumer Banking		Commercial Banking		Other
Net interest income (expense)	$	5,093	$	3,045	$	1,439	$	559	$	50	$	10,149	$	6,078	$	2,859	$	1,096	$	116
Non-interest income	1,161		859		175		129		(2)		2,325		1,706		366		247		6
Total net revenue (loss)(4)	6,254		3,904		1,614		688		48		12,474		7,784		3,225		1,343		122
Provision (benefit) for credit losses	1,592		1,261		204		128		(1)		3,119		2,332		434		356		(3)
Non-interest expense	3,295		1,883		1,006		343		63		6,518		3,746		1,996		665		111
Income (loss) from continuing operations before income taxes	1,367		760		404		217		(14)		2,837		1,706		795		322		14
Income tax provision (benefit)	424		276		147		79		(78)		876		613		289		117		(143)
Income (loss) from continuing operations, net of tax	$	943	$	484	$	257	$	138	$	64	$	1,961	$	1,093	$	506	$	205	$	157

	Three Months Ended March 31, 2016
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other
Net interest income (expense)	$	5,056	$	3,033	$	1,420	$	537	$	66
Non-interest income	1,164		847		191		118		8
Total net revenue (loss)(4)	6,220		3,880		1,611		655		74
Provision (benefit) for credit losses	1,527		1,071		230		228		(2)
Non-interest expense	3,223		1,863		990		322		48
Income (loss) from continuing operations before income taxes	1,470		946		391		105		28
Income tax provision (benefit)	452		337		142		38		(65)
Income (loss) from continuing operations, net of tax	$	1,018	$	609	$	249	$	67	$	93

	Three Months Ended June 30, 2015										Six Months Ended June 30, 2015
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other		Total		Credit Card		Consumer Banking		Commercial Banking		Other
Net interest income (expense)	$	4,537	$	2,633	$	1,444	$	466	$	(6)	$	9,113	$	5,299	$	2,878	$	927	$	9
Non-interest income	1,135		845		196		123		(29)		2,206		1,661		354		237		(46)
Total net revenue (loss)(4)	5,672		3,478		1,640		589		(35)		11,319		6,960		3,232		1,164		(37)
Provision (benefit) for credit losses	1,129		895		185		49		—		2,064		1,564		391		109		—
Non-interest expense	3,307		1,857		998		270		182		6,356		3,633		1,968		542		213
Income (loss) from continuing operations before income taxes	1,236		726		457		270		(217)		2,899		1,763		873		513		(250)
Income tax provision (benefit)	384		263		166		98		(143)		913		632		316		186		(221)
Income (loss) from continuing operations, net of tax	$	852	$	463	$	291	$	172	$	(74)	$	1,986	$	1,131	$	557	$	327	$	(29)

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 10: Financial & Statistical Summary—Credit Card Business
																2016 Q2 vs.				Six Months Ended June 30,
	2016			2016			2015			2015			2015			2016		2015								2016 vs.
(Dollars in millions) (unaudited)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2016			2015			2015
Credit Card(5)
Earnings:
Net interest income	$	3,045		$	3,033		$	2,996		$	2,866		$	2,633		—		16	%	$	6,078		$	5,299		15	%
Non-interest income	859			847			902			858			845			1	%	2		1,706			1,661			3
Total net revenue (loss)	3,904			3,880			3,898			3,724			3,478			1		12		7,784			6,960			12
Provision (benefit) for credit losses	1,261			1,071			1,022			831			895			18		41		2,332			1,564			49
Non-interest expense	1,883			1,863			2,021			1,848			1,857			1		1		3,746			3,633			3
Income (loss) from continuing operations before income taxes	760			946			855			1,045			726			(20)		5		1,706			1,763			(3)
Income tax provision (benefit)	276			337			302			375			263			(18)		5		613			632			(3)
Income (loss) from continuing operations, net of tax	$	484		$	609		$	553		$	670		$	463		(21)		5		$	1,093		$	1,131		(3)
Selected performance metrics:
Period-end loans held for investment	$	96,904		$	92,699		$	96,125		$	90,135		$	87,203		5	%	11	%	$	96,904		$	87,203		11	%
Average loans held for investment	94,382			92,987			91,887			88,450			83,901			2		12		93,684			83,244			13
Average yield on loans held for investment(6)	14.49		%	14.60		%	14.45		%	14.39		%	13.98		%	(11)	bps	51	bps	14.55		%	14.14		%	41	bps
Total net revenue margin(7)	16.55			16.69			16.97			16.84			16.58			(14)		(3)		16.62			16.72			(10)
Net charge-off rate	4.02			4.09			3.66			2.96			3.35			(7)		67		4.05			3.42			63
30+ day performing delinquency rate	3.15			3.11			3.36			3.24			2.82			4		33		3.15			2.82			33
30+ day delinquency rate	3.18			3.15			3.40			3.29			2.88			3		30		3.18			2.88			30
Nonperforming loan rate(1)	0.05			0.05			0.06			0.07			0.08			—		(3)		0.05			0.08			(3)
PCCR intangible amortization	$	67		$	70		$	74		$	78		$	80		(4)	%	(16)	%	$	137		$	164		(16)	%
Purchase volume(8)	78,019			68,189			75,350			69,875			68,559			14		14		146,208			125,942			16

																2016 Q2 vs.				Six Months Ended June 30,
	2016			2016			2015			2015			2015			2016		2015								2016 vs.
(Dollars in millions) (unaudited)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2016			2015			2015
Domestic Card
Earnings:
Net interest income	$	2,769		$	2,756		$	2,718		$	2,613		$	2,395		—		16	%	$	5,525		$	4,816		15	%
Non-interest income	792			774			830			814			796			2	%	(1)		1,566			1,539			2
Total net revenue (loss)	3,561			3,530			3,548			3,427			3,191			1		12		7,091			6,355			12
Provision (benefit) for credit losses	1,164			972			945			796			853			20		36		2,136			1,463			46
Non-interest expense	1,669			1,671			1,796			1,630			1,621			—		3		3,340			3,201			4
Income (loss) from continuing operations before income taxes	728			887			807			1,001			717			(18)		2		1,615			1,691			(4)
Income tax provision (benefit)	265			323			293			362			259			(18)		2		588			612			(4)
Income (loss) from continuing operations, net of tax	$	463		$	564		$	514		$	639		$	458		(18)		1		$	1,027		$	1,079		(5)
Selected performance metrics:
Period-end loans held for investment	$	88,581		$	84,561		$	87,939		$	82,178		$	78,984		5	%	12	%	$	88,581		$	78,984		12	%
Average loans held for investment	85,981			85,148			83,760			80,402			75,924			1		13		85,564			75,349			14
Average yield on loans held for investment(6)	14.40		%	14.43		%	14.31		%	14.35		%	13.95		%	(3)	bps	45	bps	14.41		%	14.09		%	32	bps
Total net revenue margin(7)	16.57			16.58			16.95			17.05			16.81			(1)		(24)		16.58			16.87			(29)
Net charge-off rate	4.07			4.16			3.75			3.08			3.42			(9)		65		4.12			3.49			63
30+ day delinquency rate	3.14			3.09			3.39			3.28			2.84			5		30		3.14			2.84			30
Purchase volume(8)	$	71,050		$	62,617		$	68,740		$	63,777		$	62,198		13	%	14	%	$	133,667		$	114,223		17	%
International Card(5)
Earnings:
Net interest income	$	276		$	277		$	278		$	253		$	238		—		16	%	$	553		$	483		14	%
Non-interest income	67			73			72			44			49			(8)	%	37		140			122			15
Total net revenue (loss)	343			350			350			297			287			(2)		20		693			605			15
Provision (benefit) for credit losses	97			99			77			35			42			(2)		131		196			101			94
Non-interest expense	214			192			225			218			236			11		(9)		406			432			(6)
Income (loss) from continuing operations before income taxes	32			59			48			44			9			(46)		**		91			72			26
Income tax provision (benefit)	11			14			9			13			4			(21)		175		25			20			25
Income (loss) from continuing operations, net of tax	$	21		$	45		$	39		$	31		$	5		(53)		**		$	66		$	52		27
Selected performance metrics:
Period-end loans held for investment	$	8,323		$	8,138		$	8,186		$	7,957		$	8,219		2	%	1	%	$	8,323		$	8,219		1	%
Average loans held for investment	8,401			7,839			8,127			8,048			7,977			7		5		8,120			7,895			3
Average yield on loans held for investment(6)	15.45		%	16.47		%	15.96		%	14.88		%	14.29		%	(102)	bps	116	bps	15.94		%	14.60		%	134	bps
Total net revenue margin(7)	16.32			17.85			17.21			14.77			14.36			(153)		196		17.06			15.33			173
Net charge-off rate	3.54			3.24			2.76			1.80			2.65			30		89		3.39			2.73			66
30+ day performing delinquency rate	3.24			3.32			2.98			2.81			2.65			(8)		59		3.24			2.65			59
30+ day delinquency rate	3.65			3.76			3.46			3.39			3.29			(11)		36		3.65			3.29			36
Nonperforming loan rate(1)	0.53			0.59			0.65			0.77			0.83			(6)		(30)		0.53			0.83			(30)
Purchase volume(8)	$	6,969		$	5,572		$	6,610		$	6,098		$	6,361		25	%	10	%	$	12,541		$	11,719		7	%

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 11: Financial & Statistical Summary—Consumer Banking Business
																2016 Q2 vs.				Six Months Ended June 30,
	2016			2016			2015			2015			2015			2016		2015								2016 vs.
(Dollars in millions) (unaudited)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2016			2015			2015
Consumer Banking
Earnings:
Net interest income	$	1,439		$	1,420		$	1,434		$	1,443		$	1,444		1	%	—		$	2,859		$	2,878		(1)	%
Non-interest income	175			191			182			174			196			(8)		(11)	%	366			354			3
Total net revenue (loss)	1,614			1,611			1,616			1,617			1,640			—		(2)		3,225			3,232			—
Provision (benefit) for credit losses	204			230			240			188			185			(11)		10		434			391			11
Non-interest expense	1,006			990			1,057			1,001			998			2		1		1,996			1,968			1
Income (loss) from continuing operations before income taxes	404			391			319			428			457			3		(12)		795			873			(9)
Income tax provision (benefit)	147			142			115			155			166			4		(11)		289			316			(9)
Income (loss) from continuing operations, net of tax	$	257		$	249		$	204		$	273		$	291		3		(12)		$	506		$	557		(9)
Selected performance metrics:
Period-end loans held for investment	$	71,415		$	70,591		$	70,372		$	70,990		$	71,176		1	%	—		$	71,415		$	71,176		—
Average loans held for investment	70,988			70,296			70,704			71,097			71,367			1		(1)	%	70,642			71,404			(1)	%
Average yield on loans held for investment(6)	6.28		%	6.18		%	6.25		%	6.25		%	6.27		%	10	bps	1	bps	6.23		%	6.27		%	(4)	bps
Auto loan originations	$	6,529		$	5,844		$	4,977		$	5,590		$	5,433		12	%	20	%	$	12,373		$	10,618		17	%
Period-end deposits	176,340			177,803			172,702			170,866			170,321			(1)		4		176,340			170,321			4
Average deposits	176,808			174,254			171,521			170,816			171,076			1		3		175,531			170,339			3
Average deposit interest rate	0.55		%	0.54		%	0.54		%	0.56		%	0.57		%	1	bps	(2)	bps	0.54		%	0.57		%	(3)	bps
Net charge-off rate	0.83			1.04			1.32			1.14			0.76			(21)		7		0.93			0.83			10
30+ day performing delinquency rate	3.56			3.19			4.05			3.62			3.24			37		32		3.56			3.24			32
30+ day delinquency rate	4.07			3.67			4.67			4.22			3.80			40		27		4.07			3.80			27
Nonperforming loan rate(1)	0.69			0.66			0.79			0.76			0.70			3		(1)		0.69			0.70			(1)
Nonperforming asset rate(2)	0.96			0.95			1.10			1.05			0.98			1		(2)		0.96			0.98			(2)

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 12: Financial & Statistical Summary—Commercial Banking Business
																2016 Q2 vs.				Six Months Ended June 30,
	2016			2016			2015			2015			2015			2016		2015								2016 vs.
(Dollars in millions) (unaudited)	Q2			Q1			Q4			Q3			Q2			Q1		Q2		2016			2015			2015
Commercial Banking
Earnings:
Net interest income	$	559		$	537		$	484		$	454		$	466		4	%	20	%	$	1,096		$	927		18	%
Non-interest income	129			118			142			108			123			9		5		247			237			4
Total net revenue (loss)(4)	688			655			626			562			589			5		17		1,343			1,164			15
Provision (benefit) for credit losses	128			228			118			75			49			(44)		161		356			109			**
Non-interest expense	343			322			342			272			270			7		27		665			542			23
Income (loss) from continuing operations before income taxes	217			105			166			215			270			107		(20)		322			513			(37)
Income tax provision (benefit)	79			38			60			78			98			108		(19)		117			186			(37)
Income (loss) from continuing operations, net of tax	$	138		$	67		$	106		$	137		$	172		106		(20)		$	205		$	327		(37)
Selected performance metrics:
Period-end loans held for investment	$	66,202		$	64,241		$	63,266		$	52,112		$	51,231		3	%	29	%	$	66,202		$	51,231		29	%
Average loans held for investment	64,938			63,375			57,379			51,592			50,976			2		27		64,156			51,023			26
Average yield on loans held for investment(4)(6)	3.45		%	3.38		%	3.18		%	3.21		%	3.26		%	7	bps	19	bps	3.42		%	3.24		%	18	bps
Period-end deposits	$	34,281		$	33,383		$	34,257		$	32,751		$	32,909		3	%	4	%	$	34,281		$	32,909		4	%
Average deposits	33,764			34,076			33,797			32,806			32,778			(1)		3		33,920			32,811			3
Average deposit interest rate	0.27		%	0.27		%	0.26		%	0.25		%	0.25		%	—		2	bps	0.27		%	0.24		%	3	bps
Net charge-off rate	0.37			0.29			0.03			0.26			0.05			8	bps	32		0.33			0.04			29
Nonperforming loan rate(1)(9)	1.59			1.63			0.87			0.87			0.90			(4)		69		1.59			0.90			69
Nonperforming asset rate(2)(9)	1.60			1.64			0.87			0.87			0.91			(4)		69		1.60			0.91			69
Risk category:(9)(10)
Noncriticized	$	61,926		$	59,663		$	59,743		$	49,803		$	48,847		4	%	27	%	$	61,926		$	48,847		27	%
Criticized performing	2,456			2,595			2,015			1,725			1,767			(5)		39		2,456			1,767			39
Criticized nonperforming	1,050			1,050			550			453			463			—		127		1,050			463			127
PCI loans(9)	770			933			958			131			154			(17)		**		770			154			**
Total commercial loans	$	66,202		$	64,241		$	63,266		$	52,112		$	51,231		3		29		$	66,202		$	51,231		29
Risk category as a percentage of period-end loans held for investment:(9)(10)
Noncriticized	93.5		%	92.9		%	94.4		%	95.6		%	95.4		%	60	bps	(190)	bps	93.5		%	95.4		%	(190)	bps
Criticized performing	3.7			4.0			3.2			3.3			3.4			(30)		30		3.7			3.4			30
Criticized nonperforming	1.6			1.6			0.9			0.9			0.9			—		70		1.6			0.9			70
PCI loans(9)	1.2			1.5			1.5			0.2			0.3			(30)		90		1.2			0.3			90
Total commercial loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%					100.0		%	100.0		%

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 13: Financial & Statistical Summary—Other and Total
											2016 Q2 vs.				Six Months Ended June 30,
	2016		2016		2015		2015		2015		2016		2015						2016 vs.
(Dollars in millions) (unaudited)	Q2		Q1		Q4		Q3		Q2		Q1		Q2		2016		2015		2015
Other
Earnings:
Net interest income (expense)	$	50	$	66	$	47	$	(3)	$	(6)	(24)	%	**		$	116	$	9	**
Non-interest income	(2)		8		7		—		(29)		**		(93)	%	6		(46)		**
Total net revenue (loss)(4)	48		74		54		(3)		(35)		(35)		**		122		(37)		**
Provision (benefit) for credit losses	(1)		(2)		—		(2)		—		(50)		**		(3)		—		**
Non-interest expense(11)	63		48		60		39		182		31		(65)		111		213		(48)	%
Income (loss) from continuing operations before income taxes	(14)		28		(6)		(40)		(217)		**		(94)		14		(250)		**
Income tax provision (benefit)	(78)		(65)		(51)		(78)		(143)		20		(45)		(143)		(221)		(35)
Income (loss) from continuing operations, net of tax	$	64	$	93	$	45	$	38	$	(74)	(31)		**		$	157	$	(29)	**
Selected performance metrics:
Period-end loans held for investment	$	82	$	82	$	88	$	92	$	95	—		(14)	%	$	82	$	95	(14)	%
Average loans held for investment	71		78		82		88		93		(9)	%	(24)		75		97		(23)
Period-end deposits	10,438		10,593		10,762		9,286		5,550		(1)		88		10,438		5,550		88
Average deposits	10,574		10,850		10,581		7,352		5,289		(3)		100		10,712		5,351		100
Total
Earnings:
Net interest income	$	5,093	$	5,056	$	4,961	$	4,760	$	4,537	1	%	12	%	$	10,149	$	9,113	11	%
Non-interest income	1,161		1,164		1,233		1,140		1,135		—		2		2,325		2,206		5
Total net revenue (loss)	6,254		6,220		6,194		5,900		5,672		1		10		12,474		11,319		10
Provision (benefit) for credit losses	1,592		1,527		1,380		1,092		1,129		4		41		3,119		2,064		51
Non-interest expense	3,295		3,223		3,480		3,160		3,307		2		—		6,518		6,356		3
Income (loss) from continuing operations before income taxes	1,367		1,470		1,334		1,648		1,236		(7)		11		2,837		2,899		(2)
Income tax provision (benefit)	424		452		426		530		384		(6)		10		876		913		(4)
Income (loss) from continuing operations, net of tax	$	943	$	1,018	$	908	$	1,118	$	852	(7)		11		$	1,961	$	1,986	(1)
Selected performance metrics:
Period-end loans held for investment	$	234,603	$	227,613	$	229,851	$	213,329	$	209,705	3	%	12	%	$	234,603	$	209,705	12	%
Average loans held for investment	230,379		226,736		220,052		211,227		206,337		2		12		228,557		205,768		11
Period-end deposits	221,059		221,779		217,721		212,903		208,780		—		6		221,059		208,780		6
Average deposits	221,146		219,180		215,899		210,974		209,143		1		6		220,163		208,501		6

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

(1)	The nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.

(2)	Nonperforming assets consist of nonperforming loans, real estate owned ("REO") and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, REO and other foreclosed assets. Calculation of nonperforming asset rates for our Consumer Banking and Commercial Banking businesses do not include the impact of acquired REOs.

(3)	Represents foreign currency translation adjustments and the net impact of loan transfers and sales.

(4)	Some of our tax-related commercial investments generate tax-exempt income or tax credits. Accordingly, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35% with offsetting reclassifications to the Other category.

(5)	Includes a build in our U.K. PPI Reserve in Q2 2016, Q3 2015 and Q2 2015, which impacted both total net revenue and non-interest expense within our International Card business.

(6)	Calculated based on annualized interest income for the period divided by average loans held for investment during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and does not include any allocations, such as funds transfer pricing.

(7)	Calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the respective loan category.

(8)	Includes purchase transactions, net of returns, for the period for loans both classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.

(9)	The loans held for investment acquired in the HFS acquisition included $667 million, $825 million and $835 million of PCI loans as of June 30, 2016, March 31, 2016 and December 31, 2015, respectively, that are being accounted for under ASC 310-30 (formerly "SOP 03-3") due to their deterioration in credit quality since origination. From a managed perspective, we evaluate loans based on their actual risk ratings, and accordingly we are also including our nonperforming and criticized ratios measured on that basis. The table below presents our nonperforming loan rate, nonperforming asset rate and risk category information as if these PCI loans were classified based on their risk ratings in each of the periods impacted by the HFS acquisition.

	2016		2016		2015
(Dollars in millions) (unaudited)	Q2		Q1		Q4
Selected performance metrics
Nonperforming loan rate	1.63%		1.69%		0.93%
Nonperforming asset rate	1.64		1.70		0.93
Risk category:
Noncriticized	$	62,058	$	59,729	$	59,743
Criticized performing	2,961		3,321		2,814
Criticized nonperforming	1,080		1,083		586
Risk category as a percentage of period-end loans held for investment:
Noncriticized	93.7%		93.0%		94.4%
Criticized performing	4.5		5.2		4.5
Criticized nonperforming	1.6		1.7		0.9

(10)

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

(11)

Includes restructuring charges for employee severance and related benefits pursuant to our ongoing benefit programs.

Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)Table 15: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures(1)

	Basel III Standardized Approach
(Dollars in millions) (unaudited)	June 30,2016			March 31,2016			December 31,2015			September 30,2015			June 30,2015
Regulatory Capital Metrics
Common equity Tier 1 capital	$	29,486		$	29,231		$	29,544		$	30,109		$	29,804
Tier 1 capital	32,780			32,525			32,838			33,402			32,614
Total capital(2)	38,768			38,399			38,838			37,694			37,115
Risk-weighted assets	269,710			262,368			265,739			249,081			246,106
Average assets for the leverage ratio	319,969			317,403			309,037			300,010			293,291
Capital Ratios
Common equity Tier 1 capital(3)	10.9		%	11.1		%	11.1		%	12.1		%	12.1		%
Tier 1 capital(4)	12.2			12.4			12.4			13.4			13.3
Total capital(5)	14.4			14.6			14.6			15.1			15.1
Tier 1 leverage(6)	10.2			10.2			10.6			11.1			11.1
Tangible common equity ("TCE")(7)	9.0			9.1			8.9			9.8			9.7

Reconciliation of Non-GAAP Measures

We report certain non-GAAP measures that management uses in assessing its capital adequacy and the level of return generated. These non-GAAP measures consist of tangible common equity ("TCE"), tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. These metrics are considered key financial performance measures for the Company. The tables below provide the details of the calculation of our non-GAAP measures and regulatory capital. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.

	2016			2016			2015			2015			2015
(Dollars in millions) (unaudited)	Q2			Q1			Q4			Q3			Q2
Tangible Common Equity (Period End)
Stockholders' equity	$	48,108		$	47,707		$	47,284		$	47,685		$	46,659
Goodwill and intangible assets(8)	(15,553)			(15,629)			(15,701)			(15,153)			(15,240)
Noncumulative perpetual preferred stock(9)	(3,294)			(3,296)			(3,294)			(3,294)			(2,810)
Tangible common equity	$	29,261		$	28,782		$	28,289		$	29,238		$	28,609
Tangible Common Equity (Average)
Average stockholders' equity	$	48,934		$	49,078		$	48,712		$	48,456		$	47,255
Average goodwill and intangible assets(8)	(15,585)			(15,654)			(15,316)			(15,183)			(15,256)
Average noncumulative perpetual preferred stock(9)	(3,294)			(3,296)			(3,294)			(3,049)			(2,377)
Average tangible common equity	$	30,055		$	30,128		$	30,102		$	30,224		$	29,622

	2016			2016			2015			2015			2015
(Dollars in millions) (unaudited)	Q2			Q1			Q4			Q3			Q2
Tangible Assets (Period End)
Total assets	$	339,117		$	330,346		$	334,048		$	313,700		$	310,510
Goodwill and intangible assets(8)	(15,553)			(15,629)			(15,701)			(15,153)			(15,240)
Tangible assets	$	323,564		$	314,717		$	318,347		$	298,547		$	295,270
Tangible Assets (Average)
Average total assets	$	334,479		$	331,919		$	323,354		$	313,822		$	307,206
Average goodwill and intangible assets(8)	(15,585)			(15,654)			(15,316)			(15,183)			(15,256)
Average tangible assets	$	318,894		$	316,265		$	308,038		$	298,639		$	291,950

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach

(Dollars in millions) (unaudited)	June 30,2016			March 31,2016			December 31,2015			September 30,2015			June 30,2015
Common equity excluding AOCI	$	44,572		$	44,452		$	44,606		$	44,533		$	44,246
Adjustments:
AOCI(10)(11)	332			117			(254)			75			(128)
Goodwill(8)	(14,296)			(14,301)			(14,296)			(13,805)			(13,809)
Intangible assets(8)(11)	(483)			(532)			(393)			(374)			(413)
Other	(639)			(505)			(119)			(320)			(92)
Common equity Tier 1 capital	$	29,486		$	29,231		$	29,544		$	30,109		$	29,804
Risk-weighted assets	$	269,710		$	262,368		$	265,739		$	249,081		$	246,106
Common equity Tier 1 capital ratio(3)	10.9		%	11.1		%	11.1		%	12.1		%	12.1		%

__________
(1)	Regulatory capital metrics and capital ratios as of June 30, 2016 are preliminary and therefore subject to change.
(2)	Total capital equals the sum of Tier 1 capital and Tier 2 capital.
(3)	Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
(4)	Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(5)	Total capital ratio is a regulatory capital measure calculated based on Total capital divided by risk-weighted assets.
(6)	Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
(7)	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
(8)	Includes impact of related deferred taxes.
(9)	Includes related surplus.
(10)	Amounts presented are net of tax.
(11)	Amounts based on transition provisions for regulatory capital deductions and adjustments of 40% for 2015 and 60% for 2016.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/capital-one-reports-second-quarter-2016-net-income-of-942-million-or-169-per-share-300302409.html

SOURCE Capital One Financial Corporation

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