Capital One Reports First Quarter 2017 Net Income of $810 million, or $1.54 per share

April 25, 2017 4:06 PM

MCLEAN, Va., April 25, 2017 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2017 of $810 million, or $1.54 per diluted common share, compared to the fourth quarter of 2016 with net income of $791 million, or $1.45 per diluted common share, and the first quarter of 2016 with net income of $1.0 billion, or $1.84 per diluted common share. We recorded a build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve") of $99 million in the first quarter of 2017. Excluding this adjusting item, net income for the first quarter of 2017 was $910 million or $1.75 per diluted common share(1).

"In the first quarter, we continued to deliver resilient growth," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "As banking is being revolutionized by digital, we are investing to lead the transformation and drive growth opportunities. We are improving efficiency. And we are building an enduring customer franchise. We remain well positioned to deliver attractive growth and returns, as well as significant capital distribution, subject to regulatory approval."

All comparisons below are for the first quarter of 2017 compared with the fourth quarter of 2016 unless otherwise noted.

First Quarter 2017 Income Statement Summary:

Total net revenue remained flat at $6.5 billion.
Total non-interest expense decreased 7 percent to $3.4 billion:

31 percent decrease in marketing.
1 percent decrease in operating expenses.

Pre-provision earnings increased 7 percent to $3.1 billion(2).
Provision for credit losses increased 14 percent to $2.0 billion:

Net charge-offs of $1.5 billion.
$482 million reserve build.

Net interest margin of 6.88 percent, up 3 basis points.
Efficiency ratio of 52.55 percent:

Efficiency ratio excluding the U.K. PPI Reserve build of $99 million was 51.55 percent(1).

First Quarter 2017 Balance Sheet Summary:

Common equity Tier 1 capital ratio under Basel III Standardized Approach of 10.4 percent at March 31, 2017.
Period-end loans held for investment in the quarter decreased $5.0 billion, or 2 percent, to $240.6 billion.

Domestic Card period-end loans decreased $6.0 billion, or 6 percent, to $91.1 billion.
Consumer Banking period-end loans increased $928 million, or 1 percent, to $74.0 billion:

Auto period-end loans increased $1.9 billion, or 4 percent, to $49.8 billion.
Home loans period-end loans decreased $846 million, or 4 percent, to $20.7 billion, driven by run-off of acquired portfolios.

Commercial Banking period-end loans increased $404 million, or 1 percent, to $67.3 billion.

Average loans held for investment in the quarter increased $1.5 billion, or less than 1 percent, to $241.5 billion.

Domestic Card average loans increased $411 million, or less than 1 percent, to $93.0 billion.
Consumer Banking average loans increased $672 million, or 1 percent, to $73.3 billion:

Auto average loans increased $1.5 billion, or 3 percent, to $48.7 billion.
Home loans average loans decreased $835 million, or 4 percent, to $21.1 billion, driven by run-off of acquired portfolios.

Commercial Banking average loans increased $423 million, or 1 percent, to $66.9 billion.

Period-end total deposits increased $4.4 billion, or 2 percent, to $241.2 billion, while average deposits increased $6.3 billion, or 3 percent, to $238.6 billion.
Interest-bearing deposits rate paid increased 2 basis points to 0.66 percent.

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

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

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on April 25, 2017 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 9, 2017 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, 2016.

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 $241.2 billion in deposits and $348.5 billion in total assets as of March 31, 2017. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Exhibit 99.2
Capital One Financial Corporation
Financial Supplement(1)(2)
First Quarter 2017
Table of Contents

Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	6
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	8
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	10
	Table 7:	Loan Information and Performance Statistics	11
	Table 8:	Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity	13
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	14
	Table 10:	Financial & Statistical Summary—Credit Card Business	15
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	17
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	18
	Table 13:	Financial & Statistical Summary—Other and Total	19
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	20
Other
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	21
_____________
(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, 2017 once it is filed with the Securities and Exchange Commission.
(2)	This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. ("GAAP"), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 1: Financial Summary—Consolidated

											2017 Q1 vs.
(Dollars in millions, except per share data and as noted)	2017		2016		2016		2016		2016		2016		2016
(Dollars in millions, except per share data and as noted)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Income Statement
Net interest income	$	5,474	$	5,447	$	5,277	$	5,093	$	5,056	—		8	%
Non-interest income	1,061		1,119		1,184		1,161		1,164		(5)	%	(9)
Total net revenue(1)	6,535		6,566		6,461		6,254		6,220		—		5
Provision for credit losses	1,992		1,752		1,588		1,592		1,527		14		30
Non-interest expense:
Marketing	396		575		393		415		428		(31)		(7)
Amortization of intangibles	62		101		89		95		101		(39)		(39)
Operating expenses	2,976		3,003		2,879		2,785		2,694		(1)		10
Total non-interest expense	3,434		3,679		3,361		3,295		3,223		(7)		7
Income from continuing operations before income taxes	1,109		1,135		1,512		1,367		1,470		(2)		(25)
Income tax provision	314		342		496		424		452		(8)		(31)
Income from continuing operations, net of tax	795		793		1,016		943		1,018		—		(22)
Income (loss) from discontinued operations, net of tax(2)	15		(2)		(11)		(1)		(5)		**		**
Net income	810		791		1,005		942		1,013		2		(20)
Dividends and undistributed earnings allocated to participating securities(3)	(5)		(6)		(6)		(6)		(6)		(17)		(17)
Preferred stock dividends	(53)		(75)		(37)		(65)		(37)		(29)		43
Net income available to common stockholders	$	752	$	710	$	962	$	871	$	970	6		(22)
Common Share Statistics
Basic earnings per common share:(3)
Net income from continuing operations	$	1.53	$	1.47	$	1.94	$	1.70	$	1.86	4	%	(18)	%
Income (loss) from discontinued operations	0.03		—		(0.02)		—		(0.01)		**		**
Net income per basic common share	$	1.56	$	1.47	$	1.92	$	1.70	$	1.85	6		(16)
Diluted earnings per common share:(3)
Net income from continuing operations	$	1.51	$	1.45	$	1.92	$	1.69	$	1.85	4		(18)
Income (loss) from discontinued operations	0.03		—		(0.02)		—		(0.01)		**		**
Net income per diluted common share	$	1.54	$	1.45	$	1.90	$	1.69	$	1.84	6		(16)
Weighted-average common shares outstanding (in millions):
Basic	482.3		483.5		501.1		511.7		523.5		—		(8)
Diluted	487.9		489.2		505.9		516.5		528.0		—		(8)
Common shares outstanding (period-end, in millions)	482.8		480.2		489.2		505.9		514.5		1		(6)
Dividends paid per common share	$	0.40	$	0.40	$	0.40	$	0.40	$	0.40	—		—
Tangible book value per common share (period-end)(4)	58.66		57.76		59.00		57.84		55.94		2		5

											2017 Q1 vs.
(Dollars in millions)	2017		2016		2016		2016		2016		2016		2016
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Balance Sheet (Period-End)
Loans held for investment(5)	$	240,588	$	245,586	$	238,019	$	234,603	$	227,613	(2)	%	6	%
Interest-earning assets	316,712		321,807		313,431		307,163		298,348		(2)		6
Total assets	348,549		357,033		345,061		339,117		330,346		(2)		6
Interest-bearing deposits	214,818		211,266		200,416		195,635		196,597		2		9
Total deposits	241,182		236,768		225,981		221,059		221,779		2		9
Borrowings	48,439		60,460		59,820		59,181		50,497		(20)		(4)
Common equity	43,680		43,154		44,336		44,813		44,411		1		(2)
Total stockholders' equity	48,040		47,514		48,213		48,108		47,707		1		1
Balance Sheet (Average Balances)
Loans held for investment(5)	$	241,505	$	240,027	$	235,843	$	230,379	$	226,736	1	%	7	%
Interest-earning assets	318,358		317,853		310,987		302,764		299,456		—		6
Total assets	351,641		350,225		343,153		334,479		331,919		—		6
Interest-bearing deposits	212,973		206,464		196,913		195,641		194,125		3		10
Total deposits	238,550		232,204		222,251		221,146		219,180		3		9
Borrowings	53,357		58,624		60,708		54,359		53,761		(9)		(1)
Common equity	43,833		43,921		45,314		45,640		45,782		—		(4)
Total stockholders' equity	48,193		47,972		49,033		48,934		49,078		—		(2)

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated

																2017 Q1 vs.
(Dollars in millions, except as noted)	2017			2016			2016			2016			2016			2016		2016
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Performance Metrics
Net interest income growth (period over period)	—			3		%	4		%	1		%	2		%	**		**
Non-interest income growth (period over period)	(5)		%	(5)			2			—			(6)			**		**
Total net revenue growth (period over period)	—			2			3			1			—			**		**
Total net revenue margin(6)	8.21			8.26			8.31			8.26			8.31			(5)	bps	(10)	bps
Net interest margin(7)	6.88			6.85			6.79			6.73			6.75			3		13
Return on average assets	0.90			0.91			1.18			1.13			1.23			(1)		(33)
Return on average tangible assets(8)	0.95			0.95			1.24			1.18			1.29			—		(34)
Return on average common equity(9)	6.73			6.48			8.59			7.64			8.52			25		(179)
Return on average tangible common equity(10)	10.37			10.00			13.06			11.61			12.94			37		(257)
Non-interest expense as a percentage of average loans held for investment	5.69			6.13			5.70			5.72			5.69			(44)		—
Efficiency ratio(11)	52.55			56.03			52.02			52.69			51.82			(348)		73
Effective income tax rate for continuing operations	28.3			30.1			32.8			31.0			30.7			(180)		(240)
Employees (in thousands), period-end	48.4			47.3			46.5			46.1			45.8			2	%	6	%
Credit Quality Metrics
Allowance for loan and lease losses	$	6,984		$	6,503		$	6,258		$	5,881		$	5,416		7	%	29	%
Allowance as a percentage of loans held for investment	2.90		%	2.65		%	2.63		%	2.51		%	2.38		%	25	bps	52	bps
Net charge-offs	$	1,510		$	1,489		$	1,240		$	1,155		$	1,178		1	%	28	%
Net charge-off rate(12)	2.50		%	2.48		%	2.10		%	2.01		%	2.08		%	2	bps	42	bps
30+ day performing delinquency rate	2.61			2.93			2.71			2.47			2.33			(32)		28
30+ day delinquency rate	2.92			3.27			3.04			2.79			2.64			(35)		28
Capital Ratios(13)
Common equity Tier 1 capital	10.4		%	10.1		%	10.6		%	10.9		%	11.1		%	30	bps	(70)	bps
Tier 1 capital	12.0			11.6			12.0			12.2			12.4			40		(40)
Total capital	14.7			14.3			14.7			14.4			14.6			40		10
Tier 1 leverage	9.9			9.9			10.1			10.2			10.2			—		(30)
Tangible common equity ("TCE")(14)	8.5			8.1			8.8			9.0			9.1			40		(60)

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

	Three Months Ended						2017 Q1 vs.
	2017		2016		2016		2016		2016
(Dollars in millions, except per share data and as noted)	Q1		Q4		Q1		Q4		Q1
Interest income:
Loans, including loans held for sale	$	5,626	$	5,587	$	5,085	1	%	11	%
Investment securities	416		393		415		6		—
Other	28		29		17		(3)		65
Total interest income	6,070		6,009		5,517		1		10
Interest expense:
Deposits	353		332		283		6		25
Securitized debt obligations	69		65		48		6		44
Senior and subordinated notes	149		138		106		8		41
Other borrowings	25		27		24		(7)		4
Total interest expense	596		562		461		6		29
Net interest income	5,474		5,447		5,056		—		8
Provision for credit losses	1,992		1,752		1,527		14		30
Net interest income after provision for credit losses	3,482		3,695		3,529		(6)		(1)
Non-interest income:(15)(16)
Service charges and other customer-related fees	371		412		423		(10)		(12)
Interchange fees, net	570		624		604		(9)		(6)
Net securities gains (losses)	—		(4)		(8)		**		**
Other	120		87		145		38		(17)
Total non-interest income	1,061		1,119		1,164		(5)		(9)
Non-interest expense:(15)(16)
Salaries and associate benefits	1,471		1,336		1,270		10		16
Occupancy and equipment	471		522		458		(10)		3
Marketing	396		575		428		(31)		(7)
Professional services	247		312		241		(21)		2
Communications and data processing	288		297		280		(3)		3
Amortization of intangibles	62		101		101		(39)		(39)
Other	499		536		445		(7)		12
Total non-interest expense	3,434		3,679		3,223		(7)		7
Income from continuing operations before income taxes	1,109		1,135		1,470		(2)		(25)
Income tax provision	314		342		452		(8)		(31)
Income from continuing operations, net of tax	795		793		1,018		—		(22)
Income (loss) from discontinued operations, net of tax(2)	15		(2)		(5)		**		**
Net income	810		791		1,013		2		(20)
Dividends and undistributed earnings allocated to participating securities(3)	(5)		(6)		(6)		(17)		(17)
Preferred stock dividends	(53)		(75)		(37)		(29)		43
Net income available to common stockholders	$	752	$	710	$	970	6		(22)

	Three Months Ended						2017 Q1 vs.
	2017		2016		2016		2016		2016
(Dollars in millions, except per share data and as noted)	Q1		Q4		Q1		Q4		Q1
Basic earnings per common share:(3)
Net income from continuing operations	$	1.53	$	1.47	$	1.86	4	%	(18)	%
Income (loss) from discontinued operations	0.03		—		(0.01)		**		**
Net income per basic common share	$	1.56	$	1.47	$	1.85	6		(16)
Diluted earnings per common share:(3)
Net income from continuing operations	$	1.51	$	1.45	$	1.85	4		(18)
Income (loss) from discontinued operations	0.03		—		(0.01)		**		**
Net income per diluted common share	$	1.54	$	1.45	$	1.84	6		(16)
Weighted-average common shares outstanding (in millions):
Basic common shares	482.3		483.5		523.5		—		(8)
Diluted common shares	487.9		489.2		528.0		—		(8)
Dividends paid per common share	$	0.40	$	0.40	$	0.40	—		—

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets

											2017 Q1 vs.
	2017		2016		2016		2016		2016		2016		2016
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,489	$	4,185	$	3,350	$	3,253	$	3,241	(17)	%	8	%
Interest-bearing deposits and other short-term investments	5,826		5,791		5,744		3,896		1,994		1		192
Total cash and cash equivalents	9,315		9,976		9,094		7,149		5,235		(7)		78
Restricted cash for securitization investors	486		2,517		287		265		960		(81)		(49)
Securities available for sale, at fair value	41,260		40,737		41,511		39,960		40,092		1		3
Securities held to maturity, at carrying value	26,170		25,712		25,019		25,120		25,080		2		4
Loans held for investment:(5)
Unsecuritized loans held for investment	211,038		213,824		206,763		202,778		195,705		(1)		8
Loans held in consolidated trusts	29,550		31,762		31,256		31,825		31,908		(7)		(7)
Total loans held for investment	240,588		245,586		238,019		234,603		227,613		(2)		6
Allowance for loan and lease losses	(6,984)		(6,503)		(6,258)		(5,881)		(5,416)		7		29
Net loans held for investment	233,604		239,083		231,761		228,722		222,197		(2)		5
Loans held for sale, at lower of cost or fair value	735		1,043		994		1,220		1,251		(30)		(41)
Premises and equipment, net	3,727		3,675		3,561		3,556		3,542		1		5
Interest receivable	1,368		1,351		1,251		1,236		1,221		1		12
Goodwill	14,521		14,519		14,493		14,495		14,492		—		—
Other assets	17,363		18,420		17,090		17,394		16,276		(6)		7
Total assets	$	348,549	$	357,033	$	345,061	$	339,117	$	330,346	(2)		6


											2017 Q1 vs.
	2017		2016		2016		2016		2016		2016		2016
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Liabilities:
Interest payable	$	260	$	327	$	237	$	301	$	217	(20)	%	20	%
Deposits:
Non-interest-bearing deposits	26,364		25,502		25,565		25,424		25,182		3		5
Interest-bearing deposits	214,818		211,266		200,416		195,635		196,597		2		9
Total deposits	241,182		236,768		225,981		221,059		221,779		2		9
Securitized debt obligations	18,528		18,826		18,411		16,130		14,913		(2)		24
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	1,046		992		1,079		999		917		5		14
Senior and subordinated notes	26,405		23,431		24,001		21,872		21,736		13		21
Other borrowings	2,460		17,211		16,329		20,180		12,931		(86)		(81)
Total other debt	29,911		41,634		41,409		43,051		35,584		(28)		(16)
Other liabilities	10,628		11,964		10,810		10,468		10,146		(11)		5
Total liabilities	300,509		309,519		296,848		291,009		282,639		(3)		6

Stockholders' equity:
Preferred stock	0		0		0		0		0		—		—
Common stock	7		7		7		7		7		—		—
Additional paid-in capital, net	31,326		31,157		30,439		29,786		29,709		1		5
Retained earnings	30,326		29,766		29,245		28,479		27,808		2		9
Accumulated other comprehensive income (loss)	(934)		(949)		121		241		(41)		(2)		**
Treasury stock, at cost	(12,685)		(12,467)		(11,599)		(10,405)		(9,776)		2		30
Total stockholders' equity	48,040		47,514		48,213		48,108		47,707		1		1
Total liabilities and stockholders' equity	$	348,549	$	357,033	$	345,061	$	339,117	$	330,346	(2)		6

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

(1) Total net revenue was reduced by $321 million in both Q1 2017 and Q4 2016, $289 million in Q3 2016, $244 million in Q2 2016 and $228 million in Q1 2016 for the estimated uncollectible amount of billed finance charges and fees and related losses.
(2) The provision (benefit) for mortgage representation and warranty losses included the following activity:

	2017		2016		2016		2016		2016
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1
Provision (benefit) for mortgage representation and warranty losses before income taxes:
Recorded in continuing operations	$	(25)		—		—	$	(1)	$	(1)
Recorded in discontinued operations	(67)		$	(2)	$	18	2		3
Total provision (benefit) for mortgage representation and warranty losses before income taxes	$	(92)	$	(2)	$	18	$	1	$	2

The mortgage representation and warranty reserve was $516 million as of March 31, 2017, $630 million as of December 31, 2016, $632 million as of September 30, 2016, $614 million as of June 30, 2016 and $613 million as of March 31, 2016.
(3) Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(4) Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(5) 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:

	2017		2016		2016		2016		2016
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1
PCI loans:
Period-end unpaid principal balance	$	14,838	$	15,896	$	17,011	$	18,256	$	19,492
Period-end loans held for investment	14,102		15,071		16,149		17,358		18,568
Average loans held for investment	14,433		15,443		16,529		17,783		18,894

(6) Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(7) Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(8) Return on average tangible assets is a non-GAAP measure calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(9) Return on average common equity is calculated based on annualized (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.
(10) Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Our calculation of ROTCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(11) Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(12) Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(13) Capital ratios as of the end of Q1 2017 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.
(14) TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(15) We made certain Non-interest income and Non-interest expense reclassifications in Q4 2016. The changes were primarily related to a reclassification of certain consumer and commercial banking income from Other to Service charges and other customer-related fees within Non-interest income, and a reclassification of certain system processing costs from Professional services to Communications and data processing within Non-interest expense. We have also consolidated the Non-interest income presentation of Other-than-temporary impairment ("OTTI") with net realized gains or losses from investment securities into a new Net securities gains (losses) line. These reclassifications were made to better reflect the nature of income earned and expenses incurred. All prior period amounts presented have been reclassified to conform to the current period presentation.
(16) The primary net effects of the reclassifications discussed in footnote 15 above for Q1 2016 compared to previously reported results were (i) an increase to Service charges and other customer-related fees of $19 million; (ii) a decrease to Other non-interest income of $27 million; and (iii) an increase to Communications and data processing expense of $37 million, with a corresponding decrease to Professional services.
** Not meaningful.

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

	2017 Q1						2016 Q4						2016 Q1
	Average Balance		Interest Income/Expense(1)		Yield/Rate(1)		Average Balance		InterestIncome/Expense(1)		Yield/Rate(1)		Average Balance		Interest Income/Expense(1)		Yield/Rate(1)
(Dollars in millions except as noted)	Average Balance		Interest Income/Expense(1)		Yield/Rate(1)		Average Balance		InterestIncome/Expense(1)		Yield/Rate(1)		Average Balance		Interest Income/Expense(1)		Yield/Rate(1)
Interest-earning assets:
Loans, including loans held for sale	$	242,249	$	5,626	9.29	%	$	241,110	$	5,587	9.27	%	$	227,573	$	5,085	8.94	%
Investment securities	68,418		416		2.43		67,827		393		2.32		65,156		415		2.55
Cash equivalents and other	7,691		28		1.46		8,916		29		1.30		6,727		17		1.01
Total interest-earning assets	$	318,358	$	6,070	7.63		$	317,853	$	6,009	7.56		$	299,456	$	5,517	7.37
Interest-bearing liabilities:
Interest-bearing deposits	$	212,973	$	353	0.66		$	206,464	$	332	0.64		$	194,125	$	283	0.58
Securitized debt obligations	17,176		69		1.61		18,300		65		1.42		15,361		48		1.25
Senior and subordinated notes	24,804		149		2.40		23,605		138		2.34		21,993		106		1.93
Other borrowings and liabilities	12,356		25		0.81		17,654		27		0.61		17,176		24		0.56
Total interest-bearing liabilities	$	267,309	$	596	0.89		$	266,023	$	562	0.85		$	248,655	$	461	0.74
Net interest income/spread			$	5,474	6.74				$	5,447	6.71				$	5,056	6.63
Impact of non-interest-bearing funding					0.14						0.14						0.12
Net interest margin					6.88	%					6.85	%					6.75	%

__________
(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

																2017 Q1 vs.
(Dollars in millions except as noted)	2017Q1			2016Q4			2016Q3			2016Q2			2016Q1			2016Q4		2016Q1
Loans Held For Investment (Period-End)
Credit card:
Domestic credit card	$	91,092		$	97,120		$	90,955		$	88,581		$	84,561		(6)	%	8	%
International card businesses	8,121			8,432			8,246			8,323			8,138			(4)		—
Total credit card	99,213			105,552			99,201			96,904			92,699			(6)		7
Consumer banking:
Auto	49,771			47,916			46,311			44,502			42,714			4		17
Home loan	20,738			21,584			22,448			23,358			24,343			(4)		(15)
Retail banking	3,473			3,554			3,526			3,555			3,534			(2)		(2)
Total consumer banking	73,982			73,054			72,285			71,415			70,591			1		5
Commercial banking:
Commercial and multifamily real estate	27,218			26,609			26,507			26,341			25,559			2		6
Commercial and industrial	39,638			39,824			39,432			39,313			38,102			—		4
Total commercial lending	66,856			66,433			65,939			65,654			63,661			1		5
Small-ticket commercial real estate	464			483			518			548			580			(4)		(20)
Total commercial banking	67,320			66,916			66,457			66,202			64,241			1		5
Other loans	73			64			76			82			82			14		(11)
Total loans held for investment	$	240,588		$	245,586		$	238,019		$	234,603		$	227,613		(2)		6
Loans Held For Investment (Average)
Credit card:
Domestic credit card	$	93,034		$	92,623		$	89,763		$	85,981		$	85,148		—		9	%
International card businesses	8,135			8,168			8,253			8,401			7,839			—		4
Total credit card	101,169			100,791			98,016			94,382			92,987			—		9
Consumer banking:
Auto	48,673			47,126			45,355			43,605			41,962			3	%	16
Home loan	21,149			21,984			22,852			23,835			24,781			(4)		(15)
Retail banking	3,509			3,549			3,520			3,548			3,553			(1)		(1)
Total consumer banking	73,331			72,659			71,727			70,988			70,296			1		4
Commercial banking:
Commercial and multifamily real estate	26,587			26,445			26,154			25,661			25,015			1		6
Commercial and industrial	39,877			39,573			39,346			38,713			37,762			1		6
Total commercial lending	66,464			66,018			65,500			64,374			62,777			1		6
Small-ticket commercial real estate	474			497			534			564			598			(5)		(21)
Total commercial banking	66,938			66,515			66,034			64,938			63,375			1		6
Other loans	67			62			66			71			78			8		(14)
Total average loans held for investment	$	241,505		$	240,027		$	235,843		$	230,379		$	226,736		1		7

																2017 Q1 vs.
	2017 Q1			2016 Q4			2016 Q3			2016 Q2			2016 Q1			2016 Q4		2016 Q1
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card		5.14	%		4.66	%		3.74	%		4.07	%		4.16	%	48	bps	98	bps
International card businesses		3.69			3.35			3.18			3.54			3.24		34		45
Total credit card		5.02			4.56			3.70			4.02			4.09		46		93
Consumer banking:
Auto		1.64			2.07			1.85			1.20			1.60		(43)		4
Home loan		0.03			0.08			0.03			0.09			0.05		(5)		(2)
Retail banking		1.92			1.73			1.75			1.26			1.36		19		56
Total consumer banking		1.19			1.45			1.26			0.83			1.04		(26)		15
Commercial banking:
Commercial and multifamily real estate		—			(0.02)			0.01			(0.02)			(0.01)		**		**
Commercial and industrial		0.22			0.80			1.09			0.62			0.49		(58)		(27)
Total commercial lending		0.13			0.47			0.66			0.37			0.29		(34)		(16)
Small-ticket commercial real estate		1.05			(0.02)			0.74			0.33			0.13		**		92
Total commercial banking		0.14			0.47			0.66			0.37			0.29		(33)		(15)
Total net charge-offs		2.50			2.48			2.10			2.01			2.08		2		42
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card		3.71	%		3.95	%		3.68	%		3.14	%		3.09	%	(24)	bps	62	bps
International card businesses		3.39			3.36			3.33			3.24			3.32		3		7
Total credit card		3.68			3.91			3.65			3.15			3.11		(23)		57
Consumer banking:
Auto		5.03			6.12			5.67			5.59			5.14		(109)		(11)
Home loan		0.15			0.20			0.19			0.14			0.14		(5)		1
Retail banking		0.59			0.70			0.59			0.62			0.61		(11)		(2)
Total consumer banking		3.45			4.10			3.72			3.56			3.19		(65)		26
Nonperforming Loans and Nonperforming Assets Rates(1)(2)
Credit card:
International card businesses		0.47	%		0.50	%		0.53	%		0.53	%		0.59	%	(3)	bps	(12)	bps
Total credit card		0.04			0.04			0.04			0.05			0.05		—		(1)
Consumer banking:
Auto		0.36			0.47			0.43			0.38			0.31		(11)		5
Home loan		1.27			1.26			1.23			1.24			1.26		1		1
Retail banking		0.82			0.86			1.05			0.89			0.83		(4)		(1)
Total consumer banking		0.64			0.72			0.71			0.69			0.66		(8)		(2)
Commercial banking:
Commercial and multifamily real estate		0.13			0.11			0.08			0.10			0.12		2		1
Commercial and industrial		2.02			2.48			2.44			2.58			2.66		(46)		(64)
Total commercial lending		1.25			1.53			1.49			1.59			1.64		(28)		(39)
Small-ticket commercial real estate		1.65			0.85			2.13			1.59			1.11		80		54
Total commercial banking		1.25			1.53			1.50			1.59			1.63		(28)		(38)
Total nonperforming loans		0.57			0.65			0.66			0.68			0.69		(8)		(12)
Total nonperforming assets		0.66			0.76			0.77			0.80			0.83		(10)		(17)

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

	Three Months Ended March 31, 2017
	Credit Card						Consumer Banking
(Dollars in millions)	Domestic Card		International Card Businesses		Total Credit Card		Auto		Home Loan		Retail Banking		Total Consumer Banking		Commercial Banking		Other(3)		Total
Allowance for loan and lease losses:
Balance as of December 31, 2016	$	4,229	$	377	$	4,606	$	957	$	65	$	80	$	1,102	$	793	$	2	$	6,503
Charge-offs	(1,484)		(117)		(1,601)		(339)		(4)		(21)		(364)		(26)		—		(1,991)
Recoveries	288		42		330		140		2		4		146		3		2		481
Net charge-offs	(1,196)		(75)		(1,271)		(199)		(2)		(17)		(218)		(23)		2		(1,510)
Provision (benefit) for loan and lease losses	1,637		80		1,717		270		(3)		12		279		(6)		(2)		1,988
Allowance build (release) for loan and lease losses	441		5		446		71		(5)		(5)		61		(29)		—		478
Other changes(4)	—		6		6		—		—		—		—		(3)		—		3
Balance as of March 31, 2017	4,670		388		5,058		1,028		60		75		1,163		761		2		6,984
Reserve for unfunded lending commitments:
Balance as of December 31, 2016	—		—		—		—		—		7		7		129		—		136
Provision for losses on unfunded lending commitments	—		—		—		—		—		—		—		4		—		4
Balance as of March 31, 2017	—		—		—		—		—		7		7		133		—		140
Combined allowance and reserve as of March 31, 2017	$	4,670	$	388	$	5,058	$	1,028	$	60	$	82	$	1,170	$	894	$	2	$	7,124

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

	Three Months Ended March 31, 2017
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking		Other		Total
Net interest income	$	3,346	$	1,517	$	566	$	45	$	5,474
Non-interest income	738		195		158		(30)		1,061
Total net revenue(5)	4,084		1,712		724		15		6,535
Provision (benefit) for credit losses	1,717		279		(2)		(2)		1,992
Non-interest expense	1,929		1,042		391		72		3,434
Income (loss) from continuing operations before income taxes	438		391		335		(55)		1,109
Income tax provision (benefit)	167		143		122		(118)		314
Income from continuing operations, net of tax	$	271	$	248	$	213	$	63	$	795

	Three Months Ended December 31, 2016
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking		Other		Total
Net interest income	$	3,353	$	1,498	$	565	$	31	$	5,447
Non-interest income	849		166		175		(71)		1,119
Total net revenue(5)	4,202		1,664		740		(40)		6,566
Provision (benefit) for credit losses	1,322		365		66		(1)		1,752
Non-interest expense	2,073		1,109		393		104		3,679
Income (loss) from continuing operations before income taxes	807		190		281		(143)		1,135
Income tax provision (benefit)	295		70		102		(125)		342
Income (loss) from continuing operations, net of tax	$	512	$	120	$	179	$	(18)	$	793

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

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Credit Card Business

																2017 Q1 vs.
	2017			2016			2016			2016			2016			2016		2016
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Credit Card
Earnings:
Net interest income	$	3,346		$	3,353		$	3,204		$	3,045		$	3,033		—		10	%
Non-interest income	738			849			825			859			847			(13)	%	(13)
Total net revenue	4,084			4,202			4,029			3,904			3,880			(3)		5
Provision for credit losses	1,717			1,322			1,272			1,261			1,071			30		60
Non-interest expense	1,929			2,073			1,884			1,883			1,863			(7)		4
Income from continuing operations before income taxes	438			807			873			760			946			(46)		(54)
Income tax provision	167			295			318			276			337			(43)		(50)
Income from continuing operations, net of tax	$	271		$	512		$	555		$	484		$	609		(47)		(56)
Selected performance metrics:
Period-end loans held for investment	$	99,213		$	105,552		$	99,201		$	96,904		$	92,699		(6)		7
Average loans held for investment	101,169			100,791			98,016			94,382			92,987			—		9
Average yield on loans held for investment(6)	14.99		%	14.93		%	14.68		%	14.49		%	14.60		%	6	bps	39	bps
Total net revenue margin(7)	16.14			16.68			16.44			16.55			16.69			(54)		(55)
Net charge-off rate	5.02			4.56			3.70			4.02			4.09			46		93
30+ day performing delinquency rate	3.68			3.91			3.65			3.15			3.11			(23)		57
30+ day delinquency rate	3.71			3.94			3.69			3.18			3.15			(23)		56
Nonperforming loan rate(1)	0.04			0.04			0.04			0.05			0.05			—		(1)
PCCR intangible amortization	$	44		$	58		$	62		$	67		$	70		(24)	%	(37)	%
Purchase volume(8)	73,197			82,824			78,106			78,019			68,189			(12)		7

																2017 Q1 vs.
	2017			2016			2016			2016			2016			2016		2016
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Domestic Card
Earnings:
Net interest income	$	3,093		$	3,090		$	2,956		$	2,769		$	2,756		—		12	%
Non-interest income	699			791			759			792			774			(12)	%	(10)
Total net revenue	3,792			3,881			3,715			3,561			3,530			(2)		7
Provision for credit losses	1,637			1,229			1,190			1,164			972			33		68
Non-interest expense	1,717			1,859			1,696			1,669			1,671			(8)		3
Income from continuing operations before income taxes	438			793			829			728			887			(45)		(51)
Income tax provision	160			288			302			265			323			(44)		(50)
Income from continuing operations, net of tax	$	278		$	505		$	527		$	463		$	564		(45)		(51)
Selected performance metrics:
Period-end loans held for investment	$	91,092		$	97,120		$	90,955		$	88,581		$	84,561		(6)		8
Average loans held for investment	93,034			92,623			89,763			85,981			85,148			—		9
Average yield on loans held for investment(6)	15.01		%	14.91		%	14.71		%	14.40		%	14.43		%	10	bps	58	bps
Total net revenue margin(7)	16.30			16.76			16.55			16.57			16.58			(46)		(28)
Net charge-off rate	5.14			4.66			3.74			4.07			4.16			48		98
30+ day delinquency rate	3.71			3.95			3.68			3.14			3.09			(24)		62
Purchase volume(8)	$	66,950		$	75,639		$	71,331		$	71,050		$	62,617		(11)	%	7	%
Refreshed FICO scores:(9)
Greater than 660	63		%	64		%	64		%	65		%	65		%	(1)		(2)
660 or below	37			36			36			35			35			1		2
Total	100		%	100		%	100		%	100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Consumer Banking Business

																2017 Q1 vs.
	2017			2016			2016			2016			2016			2016		2016
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Consumer Banking
Earnings:
Net interest income	$	1,517		$	1,498		$	1,472		$	1,439		$	1,420		1	%	7	%
Non-interest income	195			166			201			175			191			17		2
Total net revenue	1,712			1,664			1,673			1,614			1,611			3		6
Provision for credit losses	279			365			256			204			230			(24)		21
Non-interest expense	1,042			1,109			1,034			1,006			990			(6)		5
Income from continuing operations before income taxes	391			190			383			404			391			106		—
Income tax provision	143			70			139			147			142			104		1
Income from continuing operations, net of tax	$	248		$	120		$	244		$	257		$	249		107		—
Selected performance metrics:
Period-end loans held for investment	$	73,982		$	73,054		$	72,285		$	71,415		$	70,591		1		5
Average loans held for investment	73,331			72,659			71,727			70,988			70,296			1		4
Average yield on loans held for investment(6)	6.48		%	6.50		%	6.41		%	6.28		%	6.18		%	(2)	bps	30	bps
Auto loan originations	$	7,025		$	6,542		$	6,804		$	6,529		$	5,844		7	%	20	%
Period-end deposits	188,216			181,917			178,793			176,340			177,803			3		6
Average deposits	183,936			180,019			177,402			176,808			174,254			2		6
Average deposits interest rate	0.57		%	0.57		%	0.56		%	0.55		%	0.54		%	—		3	bps
Net charge-off rate	1.19			1.45			1.26			0.83			1.04			(26)	bps	15
30+ day performing delinquency rate	3.45			4.10			3.72			3.56			3.19			(65)		26
30+ day delinquency rate	3.93			4.67			4.26			4.07			3.67			(74)		26
Nonperforming loan rate(1)	0.64			0.72			0.71			0.69			0.66			(8)		(2)
Nonperforming asset rate(2)	0.92			1.09			0.98			0.96			0.95			(17)		(3)
Auto—At origination FICO scores:(10)
Greater than 660	51		%	52		%	51		%	51		%	51		%	(1)	%	—
621 - 660	18			17			17			17			17			1		1	%
620 or below	31			31			32			32			32			—		(1)
Total	100		%	100		%	100		%	100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Commercial Banking Business

																2017 Q1 vs.
	2017			2016			2016			2016			2016			2016		2016
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Commercial Banking
Earnings:
Net interest income	$	566		$	565		$	555		$	559		$	537		—		5	%
Non-interest income	158			175			156			129			118			(10)	%	34
Total net revenue(5)	724			740			711			688			655			(2)		11
Provision (benefit) for credit losses	(2)			66			61			128			228			**		**
Non-interest expense	391			393			349			343			322			(1)		21
Income from continuing operations before income taxes	335			281			301			217			105			19		219
Income tax provision	122			102			110			79			38			20		221
Income from continuing operations, net of tax	$	213		$	179		$	191		$	138		$	67		19		218
Selected performance metrics:
Period-end loans held for investment	$	67,320		$	66,916		$	66,457		$	66,202		$	64,241		1		5
Average loans held for investment	66,938			66,515			66,034			64,938			63,375			1		6
Average yield on loans held for investment(5)(6)	3.65		%	3.55		%	3.50		%	3.45		%	3.38		%	10	bps	27	bps
Period-end deposits	$	33,735		$	33,866		$	33,611		$	34,281		$	33,383		—		1	%
Average deposits	34,219			34,029			33,498			33,764			34,076			1	%	—
Average deposits interest rate	0.31		%	0.30		%	0.30		%	0.27		%	0.27		%	1	bps	4	bps
Net charge-off rate	0.14			0.47			0.66			0.37			0.29			(33)		(15)
Nonperforming loan rate(1)	1.25			1.53			1.50			1.59			1.63			(28)		(38)
Nonperforming asset rate(2)	1.27			1.54			1.51			1.60			1.64			(27)		(37)
Risk category:(11)
Noncriticized	$	63,390		$	62,828		$	62,336		$	61,926		$	59,663		1	%	6	%
Criticized performing	2,492			2,453			2,473			2,456			2,595			2		(4)
Criticized nonperforming	844			1,022			994			1,050			1,050			(17)		(20)
PCI loans	594			613			654			770			933			(3)		(36)
Total commercial loans	$	67,320		$	66,916		$	66,457		$	66,202		$	64,241		1		5
Risk category as a percentage of period-end loans held for investment:(11)
Noncriticized	94.2		%	93.9		%	93.8		%	93.5		%	92.9		%	30	bps	130	bps
Criticized performing	3.7			3.7			3.7			3.7			4.0			—		(30)
Criticized nonperforming	1.2			1.5			1.5			1.6			1.6			(30)		(40)
PCI loans	0.9			0.9			1.0			1.2			1.5			—		(60)
Total commercial loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Financial & Statistical Summary—Other and Total

											2017 Q1 vs.
	2017		2016		2016		2016		2016		2016		2016
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Other
Earnings:
Net interest income	$	45	$	31	$	46	$	50	$	66	45	%	(32)	%
Non-interest income	(30)		(71)		2		(2)		8		(58)		**
Total net revenue (loss)(5)	15		(40)		48		48		74		**		(80)
Benefit for credit losses	(2)		(1)		(1)		(1)		(2)		100		—
Non-interest expense	72		104		94		63		48		(31)		50
Income (loss) from continuing operations before income taxes	(55)		(143)		(45)		(14)		28		(62)		**
Income tax benefit	(118)		(125)		(71)		(78)		(65)		(6)		82
Income (loss) from continuing operations, net of tax	$	63	$	(18)	$	26	$	64	$	93	**		(32)
Selected performance metrics:
Period-end loans held for investment	$	73	$	64	$	76	$	82	$	82	14		(11)
Average loans held for investment	67		62		66		71		78		8		(14)
Period-end deposits	19,231		20,985		13,577		10,438		10,593		(8)		82
Average deposits	20,395		18,156		11,351		10,574		10,850		12		88
Total
Earnings:
Net interest income	$	5,474	$	5,447	$	5,277	$	5,093	$	5,056	—		8	%
Non-interest income	1,061		1,119		1,184		1,161		1,164		(5)	%	(9)
Total net revenue	6,535		6,566		6,461		6,254		6,220		—		5
Provision for credit losses	1,992		1,752		1,588		1,592		1,527		14		30
Non-interest expense	3,434		3,679		3,361		3,295		3,223		(7)		7
Income from continuing operations before income taxes	1,109		1,135		1,512		1,367		1,470		(2)		(25)
Income tax provision	314		342		496		424		452		(8)		(31)
Income from continuing operations, net of tax	$	795	$	793	$	1,016	$	943	$	1,018	—		(22)
Selected performance metrics:
Period-end loans held for investment	$	240,588	$	245,586	$	238,019	$	234,603	$	227,613	(2)		6
Average loans held for investment	241,505		240,027		235,843		230,379		226,736		1		7
Period-end deposits	241,182		236,768		225,981		221,059		221,779		2		9
Average deposits	238,550		232,204		222,251		221,146		219,180		3		9

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

(1)	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. Prior to Q4 2016, the nonperforming asset rate for our Consumer Banking business excluded the impact of REOs related to our acquired home loan portfolio which, if included, would increase the nonperforming asset rate by approximately 10 basis points in each of the prior periods presented.
(3)	Primarily consists of the legacy loan portfolio of our discontinued GreenPoint mortgage operations.
(4)	Represents foreign currency translation adjustments and the net impact of loan transfers and sales.
(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 to the Other category.
(6)	Average yield on loans held for investment is calculated based on annualized interest income for the period divided by average loans held for investment during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and does not include any allocations, such as funds transfer pricing.
(7)	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the respective loan category.
(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)	Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.
(10)	Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.
(11)	Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
**	Not meaningful.

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

	Basel III Standardized Approach
(Dollars in millions, except as noted)	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Regulatory Capital Metrics
Common equity excluding AOCI	$	44,614		$	44,103		$	44,214		$	44,572		$	44,452
Adjustments:
AOCI(2)(3)	(807)			(674)			199			332			117
Goodwill, net of related deferred tax liabilities	(14,302)			(14,307)			(14,288)			(14,296)			(14,301)
Intangible assets, net of related deferred tax liabilities(3)	(465)			(384)			(435)			(483)			(532)
Other	121			65			(498)			(639)			(505)
Common equity Tier 1 capital	$	29,161		$	28,803		$	29,192		$	29,486		$	29,231
Tier 1 capital	$	33,519		$	33,162		$	33,069		$	32,780		$	32,525
Total capital(4)	40,979			40,817			40,564			38,767			38,399
Risk-weighted assets	279,229			285,756			275,198			269,667			262,368
Adjusted average assets(5)	337,134			335,835			328,627			319,968			317,403
Capital Ratios
Common equity Tier 1 capital(6)	10.4		%	10.1		%	10.6		%	10.9		%	11.1		%
Tier 1 capital(7)	12.0			11.6			12.0			12.2			12.4
Total capital(8)	14.7			14.3			14.7			14.4			14.6
Tier 1 leverage(5)	9.9			9.9			10.1			10.2			10.2
Tangible common equity ("TCE")(9)	8.5			8.1			8.8			9.0			9.1

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 selected adjusted results, 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. We consider these metrics key financial performance measures. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly-titled measures reported by other companies. The tables below present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP. The results for Q1 2016 are not presented below as there were no adjustments to our reported results.

	2017									2016									2016									2016									Year Ended December 31,
	Q1									Q4									Q3									Q2									2016
(Dollars in millions, except per share data and as noted)	Reported Results			Adj.(10)			Adjusted Results			Reported Results			Adj.(10)			Adjusted Results			Reported Results			Adj.(10)			Adjusted Results			Reported Results			Adj.(10)			Adjusted Results			Reported Results			Adj.(10)			Adjusted Results
Selected income statement data:
Net interest income	$	5,474		$	33		$	5,507		$	5,447		$	13		$	5,460		$	5,277		$	34		$	5,311		$	5,093		$	7		$	5,100		$	20,873		$	54		$	20,927
Non-interest income	1,061			37			1,098			1,119			14			1,133			1,184			13			1,197			1,161			8			1,169			4,628			35			4,663
Total net revenue	6,535			70			6,605			6,566			27			6,593			6,461			47			6,508			6,254			15			6,269			25,501			89			25,590
Provision for credit losses	1,992			—			1,992			1,752			—			1,752			1,588			—			1,588			1,592			—			1,592			6,459			—			6,459
Non-interest expense	3,434			(29)			3,405			3,679			(45)			3,634			3,361			(16)			3,345			3,295			(15)			3,280			13,558			(76)			13,482
Income from continuing operations before income taxes	1,109			99			1,208			1,135			72			1,207			1,512			63			1,575			1,367			30			1,397			5,484			165			5,649
Income tax provision (benefit)	314			(1)			313			342			10			352			496			—			496			424			(7)			417			1,714			3			1,717
Income from continuing operations, net of tax	795			100			895			793			62			855			1,016			63			1,079			943			37			980			3,770			162			3,932
Income (loss) from discontinued operations, net of tax	15			—			15			(2)			—			(2)			(11)			—			(11)			(1)			—			(1)			(19)			—			(19)
Net income	810			100			910			791			62			853			1,005			63			1,068			942			37			979			3,751			162			3,913
Net income available to common stockholders	752			100			852			710			62			772			962			63			1,025			871			37			908			3,513			162			3,675
Selected performance metrics:
Diluted EPS(11)	$	1.54		$	0.21		$	1.75		$	1.45		$	0.13		$	1.58		$	1.90		$	0.13		$	2.03		$	1.69		$	0.07		$	1.76		$	6.89		$	0.32		$	7.21
Efficiency ratio	52.55		%	(100)		bps	51.55		%	56.03		%	(91)		bps	55.12		%	52.02		%	(62)		bps	51.40		%	52.69		%	(37)		bps	52.32		%	53.17		%	(49)		bps	52.68		%

																															2017			2016			2016			2016			2016
(Dollars in millions)																															Q1			Q4			Q3			Q2			Q1
Tangible Common Equity (Period-End)
Stockholders' equity																															$	48,040		$	47,514		$	48,213		$	48,108		$	47,707
Goodwill and intangible assets(12)																															(15,360)			(15,420)			(15,475)			(15,553)			(15,629)
Noncumulative perpetual preferred stock																															(4,360)			(4,360)			(3,877)			(3,294)			(3,296)
Tangible common equity																															$	28,320		$	27,734		$	28,861		$	29,261		$	28,782
Tangible Common Equity (Average)
Stockholders' equity																															$	48,193		$	47,972		$	49,033		$	48,934		$	49,078
Goodwill and intangible assets(12)																															(15,395)			(15,455)			(15,507)			(15,585)			(15,654)
Noncumulative perpetual preferred stock																															(4,360)			(4,051)			(3,719)			(3,294)			(3,296)
Tangible common equity																															$	28,438		$	28,466		$	29,807		$	30,055		$	30,128
Tangible Assets (Period-End)
Total assets																															$	348,549		$	357,033		$	345,061		$	339,117		$	330,346
Goodwill and intangible assets(12)																															(15,360)			(15,420)			(15,475)			(15,553)			(15,629)
Tangible assets																															$	333,189		$	341,613		$	329,586		$	323,564		$	314,717
Tangible Assets (Average)
Total assets																															$	351,641		$	350,225		$	343,153		$	334,479		$	331,919
Goodwill and intangible assets(12)																															(15,395)			(15,455)			(15,507)			(15,585)			(15,654)
Tangible assets																															$	336,246		$	334,770		$	327,646		$	318,894		$	316,265


_________
(1)	Regulatory capital metrics and capital ratios as of March 31, 2017 are preliminary and therefore subject to change.
(2)	Amounts presented are net of tax.
(3)	Amounts based on transition provisions for regulatory capital deductions and adjustments of 60% for 2016 and 80% for 2017.
(4)	Total capital equals the sum of Tier 1 capital and Tier 2 capital.
(5)	Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.
(6)	Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.
(7)	Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(8)	Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.
(9)	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
(10)	In Q1 2017, we recorded a build in the U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve") of $99 million. In Q4 2016, we recorded charges totaling $72 million consisting of a build in the U.K. PPI Reserve of $44 million and an impairment associated with certain acquired intangible and software assets of $28 million. In Q3 2016, we recorded a build in the U.K. PPI Reserve of $63 million. In Q2 2016, we recorded charges totaling $30 million associated with a build of $54 million in the U.K. PPI Reserve, partially offset by 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. There were no adjustments to our reported results for Q1 2016.
(11)	Earnings per share is computed independently for each period. Accordingly, the sum of each quarter amount may not agree to the year-to-date total.
(12)	Includes impact of related deferred taxes.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/capital-one-reports-first-quarter-2017-net-income-of-810-million-or-154-per-share-300445516.html

SOURCE Capital One Financial Corporation

StreetInsider

Log in to your account:

Capital One Reports First Quarter 2017 Net Income of $810 million, or $1.54 per share

Categories

Next Articles