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Capital One Reports Second Quarter 2018 Net Income of $1.9 billion, or $3.71 per share

July 19, 2018 4:05 PM

MCLEAN, Va., July 19, 2018 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2018 of $1.9 billion, or $3.71 per diluted common share, compared with net income of $1.3 billion, or $2.62 per diluted common share, in the first quarter of 2018, and with net income of $1.0 billion, or $1.94 per diluted common share, in the second quarter of 2017. Excluding adjusting items, net income for the second quarter of 2018 was $3.22 per diluted common share(1).

Capital One

"Capital One delivered another quarter of strong financial performance as we continued to invest to grow and drive our digital transformation," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We saw credit improvement across our businesses, and growth math is now helping overall domestic credit card trends."

All comparisons below are for the second quarter of 2018 compared with the first quarter of 2018 unless otherwise noted.

Second Quarter 2018 Income Statement Summary:

  • Total net revenue increased 4 percent to $7.2 billion.
  • Recognized $400 million net gain on the sale of the substantial majority of our consumer home loan portfolio.
  • Total non-interest expense decreased 4 percent to $3.4 billion:
    • 5 percent decrease in operating expenses.
    • 3 percent increase in marketing.
  • Pre-provision earnings increased 13 percent to $3.8 billion(2).

(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.

  • Provision for credit losses decreased 24 percent to $1.3 billion:
    • Net charge-offs of $1.5 billion.
    • $183 million reserve release.
  • Net interest margin of 6.66 percent, down 27 basis points.
  • Efficiency ratio of 47.61 percent.
    • Efficiency ratio excluding adjusting items was 49.28 percent(1).
  • Operating efficiency ratio of 41.70 percent.
    • Operating efficiency ratio excluding adjusting items was 43.08 percent(1).

Second Quarter 2018 Balance Sheet Summary:

  • Common equity Tier 1 capital ratio under Basel III Standardized Approach of 11.1 percent at June 30, 2018.
  • Period-end loans held for investment in the quarter decreased $12.1 billion, or 5 percent, to $236.1 billion.
    • Credit Card period-end loans increased $2.2 billion, or 2 percent, to $109.8 billion.
      • Domestic Card period-end loans increased $2.2 billion, or 2 percent, to $100.7 billion.
    • Consumer Banking period-end loans decreased $15.9 billion, or 21 percent, to $58.7 billion:
      • Auto period-end loans increased $970 million, or 2 percent, to $55.8 billion.
      • Home loans period-end loans decreased $16.6 billion, driven by the sale of the substantial majority of our consumer home loan portfolio and the transfer of remaining portfolio to loans held for sale.
    • Commercial Banking period-end loans increased $1.7 billion, or 3 percent, to $67.6 billion.
  • Average loans held for investment in the quarter decreased $9.0 billion, or 4 percent, to $240.8 billion.
    • Credit Card average loans decreased $1.6 billion, or 1 percent, to $107.9 billion.
      • Domestic Card average loans decreased $1.6 billion, or 2 percent, to $98.9 billion.
    • Consumer Banking average loans decreased $8.5 billion, or 11 percent, to $66.5 billion:
      • Auto average loans increased $954 million, or 2 percent, to $55.3 billion.
      • Home loans average loans decreased $9.1 billion, or 53 percent, to $8.1 billion, driven by the sale of the substantial majority of our consumer home loan portfolio and the transfer of remaining portfolio to loans held for sale.
    • Commercial Banking average loans increased $1.2 billion, or 2 percent, to $66.4 billion.
  • Period-end total deposits decreased $2.6 billion, or 1 percent, to $248.2 billion, while average deposits increased $3.5 billion, or 1 percent, to $248.8 billion.
  • Interest-bearing deposits rate paid increased 14 basis points to 1.12 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.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 19, 2018 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 2, 2018 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, 2017.

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 $248.2 billion in deposits and $364.0 billion in total assets as of June 30, 2018. 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)

Second Quarter 2018

Table of Contents

Capital One Financial Corporation Consolidated Results

Page

Table 1:

Financial Summary—Consolidated

1

Table 2:

Selected Metrics—Consolidated

3

Table 3:

Consolidated Statements of Income

4

Table 4:

Consolidated Balance Sheets

6

Table 5:

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

8

Table 6:

Average Balances, Net Interest Income and Net Interest Margin

9

Table 7:

Loan Information and Performance Statistics

10

Table 8:

Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity

12

Business Segment Results

Table 9:

Financial Summary—Business Segment Results

13

Table 10:

Financial & Statistical Summary—Credit Card Business

14

Table 11:

Financial & Statistical Summary—Consumer Banking Business

16

Table 12:

Financial & Statistical Summary—Commercial Banking Business

17

Table 13:

Financial & Statistical Summary—Other and Total

18

Table 14:

Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)

19

Other

Table 15:

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

20

___________

(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2018 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

2018 Q2 vs.

Six Months Ended June 30,

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

2018

2018

2017

2017

2017

2018

2017

2018 vs.

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Income Statement

Net interest income

$

5,551

$

5,718

$

5,813

$

5,700

$

5,473

(3)

%

1

%

$

11,269

$

10,947

3

%

Non-interest income

1,641

1,191

1,200

1,285

1,231

38

33

2,832

2,292

24

Total net revenue(1)

7,192

6,909

7,013

6,985

6,704

4

7

14,101

13,239

7

Provision for credit losses

1,276

1,674

1,926

1,833

1,800

(24)

(29)

2,950

3,792

(22)

Non-interest expense:

Marketing

425

414

460

379

435

3

(2)

839

831

1

Operating expenses

2,999

3,159

3,319

3,188

2,979

(5)

1

6,158

6,017

2

Total non-interest expense

3,424

3,573

3,779

3,567

3,414

(4)

—

6,997

6,848

2

Income from continuing operations before income taxes

2,492

1,662

1,308

1,585

1,490

50

67

4,154

2,599

60

Income tax provision

575

319

2,170

448

443

80

30

894

757

18

Income (loss) from continuing operations, net of tax

1,917

1,343

(862)

1,137

1,047

43

83

3,260

1,842

77

Income (loss) from discontinued operations, net of tax

(11)

3

(109)

(30)

(11)

**

—

(8)

4

**

Net income (loss)

1,906

1,346

(971)

1,107

1,036

42

84

3,252

1,846

76

Dividends and undistributed earnings allocated to participating securities(2)

(12)

(10)

(1)

(8)

(8)

20

50

(23)

(13)

77

Preferred stock dividends

(80)

(52)

(80)

(52)

(80)

54

—

(132)

(133)

(1)

Net income (loss) available to common stockholders

$

1,814

$

1,284

$

(1,052)

$

1,047

$

948

41

91

$

3,097

$

1,700

82

Common Share Statistics

Basic earnings per common share:(2)

Net income (loss) from continuing operations

$

3.76

$

2.63

$

(1.95)

$

2.22

$

1.98

43

%

90

%

$

6.39

$

3.51

82

%

Income (loss) from discontinued operations

(0.02)

0.01

(0.22)

(0.06)

(0.02)

**

—

(0.02)

0.01

**

Net income (loss) per basic common share

$

3.74

$

2.64

$

(2.17)

$

2.16

$

1.96

42

91

$

6.37

$

3.52

81

Diluted earnings per common share:(2)

Net income (loss) from continuing operations

$

3.73

$

2.61

$

(1.95)

$

2.20

$

1.96

43

90

$

6.35

$

3.48

82

Income (loss) from discontinued operations

(0.02)

0.01

(0.22)

(0.06)

(0.02)

**

—

(0.02)

0.01

**

Net income (loss) per diluted common share

$

3.71

$

2.62

$

(2.17)

$

2.14

$

1.94

42

91

$

6.33

$

3.49

81

Weighted-average common shares outstanding (in millions):

Basic

485.1

486.9

485.7

484.9

484.0

—

—

485.9

483.1

1

Diluted

488.3

490.8

485.7

489.0

488.1

(1)

—

489.6

487.7

—

Common shares outstanding (period-end, in millions)

478.4

485.9

485.5

484.4

483.7

(2)

(1)

478.4

483.7

(1)

Dividends declared and paid per common share

$

0.40

$

0.40

$

0.40

$

0.40

$

0.40

—

—

$

0.80

$

0.80

—

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

63.86

61.29

60.28

63.06

60.94

4

5

63.86

60.94

5

2018 Q2 vs.

Six Months Ended June 30,

(Dollars in millions)

2018

2018

2017

2017

2017

2018

2017

2018 vs.

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Balance Sheet (Period-End)

Loans held for investment

$

236,124

$

248,256

$

254,473

$

252,422

$

244,302

(5)

%

(3)

%

$

236,124

$

244,302

(3)

%

Interest-earning assets

332,167

332,251

334,124

329,002

319,286

—

4

332,167

319,286

4

Total assets

363,989

362,857

365,693

361,402

350,593

—

4

363,989

350,593

4

Interest-bearing deposits

222,605

224,671

217,298

212,956

213,810

(1)

4

222,605

213,810

4

Total deposits

248,225

250,847

243,702

239,062

239,763

(1)

4

248,225

239,763

4

Borrowings

53,310

50,693

60,281

59,458

49,954

5

7

53,310

49,954

7

Common equity

45,566

44,842

44,370

45,794

44,777

2

2

45,566

44,777

2

Total stockholders' equity

49,926

49,203

48,730

50,154

49,137

1

2

49,926

49,137

2

Balance Sheet (Average Balances)

Loans held for investment

$

240,758

$

249,726

$

252,566

$

245,822

$

242,241

(4)

%

(1)

%

$

245,218

$

241,875

1

%

Interest-earning assets

333,495

330,183

330,742

322,015

318,078

1

5

331,850

318,215

4

Total assets

363,929

362,049

363,045

355,191

349,891

1

4

362,988

350,761

3

Interest-bearing deposits

223,079

219,670

215,258

213,137

214,412

2

4

221,384

213,696

4

Total deposits

248,790

245,270

241,562

238,843

240,550

1

3

247,040

239,555

3

Borrowings

52,333

54,588

58,109

54,271

48,838

(4)

7

53,454

51,085

5

Common equity

45,466

44,670

46,350

45,816

44,645

2

2

45,070

44,241

2

Total stockholders' equity

49,827

49,031

50,710

50,176

49,005

2

2

49,431

48,602

2

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated

2018 Q2 vs.

Six Months Ended June 30,

(Dollars in millions, except as noted)

2018

2018

2017

2017

2017

2018

2017

2018 vs.

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Performance Metrics

Net interest income growth (period over period)

(3)

%

(2)

%

2

%

4

%

—

**

**

3

%

8

%

**

Non-interest income growth (period over period)

38

(1)

(7)

4

16

%

**

**

24

(1)

**

Total net revenue growth (period over period)

4

(1)

—

4

3

**

**

7

6

**

Total net revenue margin(4)

8.63

8.37

8.48

8.68

8.43

26

bps

20

bps

8.50

8.32

18

bps

Net interest margin(5)

6.66

6.93

7.03

7.08

6.88

(27)

(22)

6.79

6.88

(9)

Return on average assets

2.11

1.48

(0.95)

1.28

1.20

63

91

1.80

1.05

75

Return on average tangible assets(6)

2.20

1.55

(0.99)

1.34

1.25

65

95

1.87

1.10

77

Return on average common equity(7)

16.06

11.47

(8.14)

9.40

8.59

5

%

7

%

13.78

7.67

6

%

Return on average tangible common equity(8)

23.99

17.32

(12.12)

14.11

13.09

7

11

20.70

11.75

9

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

5.69

5.72

5.98

5.80

5.64

(3)

bps

5

bps

5.71

5.66

5

bps

Efficiency ratio(9)

47.61

51.72

53.89

51.07

50.92

(4)

%

(3)

%

49.62

51.73

(2)

%

Operating efficiency ratio(10)

41.70

45.72

47.33

45.64

44.44

(4)

(3)

43.67

45.45

(2)

Effective income tax rate for continuing operations

23.1

19.2

165.9

28.3

29.7

4

(7)

21.5

29.1

(8)

Employees (in thousands), period-end

47.8

47.9

49.3

50.4

49.9

—

(4)

47.8

49.9

(4)

Credit Quality Metrics

Allowance for loan and lease losses

$

7,368

$

7,567

$

7,502

$

7,418

$

7,170

(3)

%

3

%

$

7,368

$

7,170

3

%

Allowance as a percentage of loans held for investment

3.12

%

3.05

%

2.95

%

2.94

%

2.93

%

7

bps

19

bps

3.12

%

2.93

%

19

bps

Net charge-offs

$

1,459

$

1,618

$

1,828

$

1,606

$

1,618

(10)

%

(10)

%

$

3,077

$

3,128

(2)

%

Net charge-off rate(11)

2.42

%

2.59

%

2.89

%

2.61

%

2.67

%

(17)

bps

(25)

bps

2.51

%

2.59

%

(8)

bps

30+ day performing delinquency rate

2.88

2.72

3.23

2.93

2.69

16

19

2.88

2.69

19

30+ day delinquency rate

3.05

2.91

3.48

3.24

2.99

14

6

3.05

2.99

6

Capital Ratios(12)

Common equity Tier 1 capital

11.1

%

10.5

%

10.3

%

10.7

%

10.7

%

60

bps

40

bps

11.1

%

10.7

%

40

bps

Tier 1 capital

12.6

12.0

11.8

12.2

12.2

60

40

12.6

12.2

40

Total capital

15.1

14.5

14.4

14.8

14.9

60

20

15.1

14.9

20

Tier 1 leverage

10.3

10.1

9.9

10.5

10.3

20

—

10.3

10.3

—

Tangible common equity ("TCE")(13)

8.8

8.6

8.3

8.8

8.8

20

—

8.8

8.8

—

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income

2018 Q2 vs.

Six Months Ended June 30,

2018

2018

2017

2017

2017

2018

2017

2018 vs.

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

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Interest income:

Loans, including loans held for sale

$

5,989

$

6,134

$

6,133

$

5,960

$

5,669

(2)

%

6

%

$

12,123

$

11,295

7

%

Investment securities

539

452

431

431

433

19

24

991

849

17

Other

68

51

40

29

26

33

162

119

54

120

Total interest income

6,596

6,637

6,604

6,420

6,128

(1)

8

13,233

12,198

8

Interest expense:

Deposits

622

539

457

410

382

15

63

1,161

735

58

Securitized debt obligations

124

107

91

85

82

16

51

231

151

53

Senior and subordinated notes

289

251

209

194

179

15

61

540

328

65

Other borrowings

10

22

34

31

12

(55)

(17)

32

37

(14)

Total interest expense

1,045

919

791

720

655

14

60

1,964

1,251

57

Net interest income

5,551

5,718

5,813

5,700

5,473

(3)

1

11,269

10,947

3

Provision for credit losses

1,276

1,674

1,926

1,833

1,800

(24)

(29)

2,950

3,792

(22)

Net interest income after provision for credit losses

4,275

4,044

3,887

3,867

3,673

6

16

8,319

7,155

16

Non-interest income:

Interchange fees, net

723

643

665

662

676

12

7

1,366

1,246

10

Service charges and other customer-related fees

391

432

394

414

418

(9)

(6)

823

789

4

Net securities gains (losses)

(1)

8

1

68

(4)

**

(75)

7

(4)

**

Other(14)

528

108

140

141

141

**

**

636

261

144

Total non-interest income

1,641

1,191

1,200

1,285

1,231

38

33

2,832

2,292

24

Non-interest expense:

Salaries and associate benefits

1,430

1,520

1,521

1,524

1,383

(6)

3

2,950

2,854

3

Occupancy and equipment

503

490

523

471

474

3

6

993

945

5

Marketing

425

414

460

379

435

3

(2)

839

831

1

Professional services

234

210

274

297

279

11

(16)

444

526

(16)

Communications and data processing

317

306

306

294

289

4

10

623

577

8

Amortization of intangibles

43

44

61

61

61

(2)

(30)

87

123

(29)

Other

472

589

634

541

493

(20)

(4)

1,061

992

7

Total non-interest expense

3,424

3,573

3,779

3,567

3,414

(4)

—

6,997

6,848

2

Income from continuing operations before income taxes

2,492

1,662

1,308

1,585

1,490

50

67

4,154

2,599

60

Income tax provision

575

319

2,170

448

443

80

30

894

757

18

Income (loss) from continuing operations, net of tax

1,917

1,343

(862)

1,137

1,047

43

83

3,260

1,842

77

Income (loss) from discontinued operations, net of tax

(11)

3

(109)

(30)

(11)

**

—

(8)

4

**

Net income (loss)

1,906

1,346

(971)

1,107

1,036

42

84

3,252

1,846

76

Dividends and undistributed earnings allocated to participating securities(2)

(12)

(10)

(1)

(8)

(8)

20

50

(23)

(13)

77

Preferred stock dividends

(80)

(52)

(80)

(52)

(80)

54

—

(132)

(133)

(1)

Net income (loss) available to common stockholders

$

1,814

$

1,284

$

(1,052)

$

1,047

$

948

41

91

$

3,097

$

1,700

82

2018 Q2 vs.

Six Months Ended June 30,

2018

2018

2017

2017

2017

2018

2017

2018 vs.

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

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Basic earnings per common share:(2)

Net income (loss) from continuing operations

$

3.76

$

2.63

$

(1.95)

$

2.22

$

1.98

43

%

90

%

$

6.39

$

3.51

82

%

Income (loss) from discontinued operations

(0.02)

0.01

(0.22)

(0.06)

(0.02)

**

—

(0.02)

0.01

**

Net income (loss) per basic common share

$

3.74

$

2.64

$

(2.17)

$

2.16

$

1.96

42

91

$

6.37

$

3.52

81

Diluted earnings per common share:(2)

Net income (loss) from continuing operations

$

3.73

$

2.61

$

(1.95)

$

2.20

$

1.96

43

90

$

6.35

$

3.48

82

Income (loss) from discontinued operations

(0.02)

0.01

(0.22)

(0.06)

(0.02)

**

—

(0.02)

0.01

**

Net income (loss) per diluted common share

$

3.71

$

2.62

$

(2.17)

$

2.14

$

1.94

42

91

$

6.33

$

3.49

81

Weighted-average common shares outstanding (in millions):

Basic common shares

485.1

486.9

485.7

484.9

484.0

—

—

485.9

483.1

1

Diluted common shares

488.3

490.8

485.7

489.0

488.1

(1)

—

489.6

487.7

—

Dividends declared and paid per common share

$

0.40

$

0.40

$

0.40

$

0.40

$

0.40

—

—

$

0.80

$

0.80

—

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets

2018 Q2 vs.

2018

2018

2017

2017

2017

2018

2017

(Dollars in millions)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

Assets:

Cash and cash equivalents:

Cash and due from banks

$

4,499

$

4,220

$

4,458

$

4,154

$

3,352

7

%

34

%

Interest-bearing deposits and other short-term investments

7,774

9,788

9,582

4,330

3,363

(21)

131

Total cash and cash equivalents

12,273

14,008

14,040

8,484

6,715

(12)

83

Restricted cash for securitization investors

1,023

309

312

304

300

**

**

Investment securities:

Securities available for sale, at fair value

50,691

47,155

37,655

39,742

41,120

7

23

Securities held to maturity, at carrying value

33,464

23,075

28,984

28,650

27,720

45

21

Total investment securities

84,155

70,230

66,639

68,392

68,840

20

22

Loans held for investment:

Unsecuritized loans held for investment

201,222

213,313

218,806

217,659

214,864

(6)

(6)

Loans held in consolidated trusts

34,902

34,943

35,667

34,763

29,438

—

19

Total loans held for investment

236,124

248,256

254,473

252,422

244,302

(5)

(3)

Allowance for loan and lease losses

(7,368)

(7,567)

(7,502)

(7,418)

(7,170)

(3)

3

Net loans held for investment

228,756

240,689

246,971

245,004

237,132

(5)

(4)

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

1,480

1,498

971

1,566

777

(1)

90

Premises and equipment, net

4,095

4,055

4,033

3,955

3,825

1

7

Interest receivable

1,493

1,496

1,536

1,426

1,346

—

11

Goodwill

14,531

14,536

14,533

14,532

14,524

—

—

Other assets

16,183

16,036

16,658

17,739

17,134

1

(6)

Total assets

$

363,989

$

362,857

$

365,693

$

361,402

$

350,593

—

4

2018 Q2 vs.

2018

2018

2017

2017

2017

2018

2017

(Dollars in millions)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

Liabilities:

Interest payable

$

450

$

353

$

413

$

301

$

376

27

%

20

%

Deposits:

Non-interest-bearing deposits

25,620

26,176

26,404

26,106

25,953

(2)

(1)

Interest-bearing deposits

222,605

224,671

217,298

212,956

213,810

(1)

4

Total deposits

248,225

250,847

243,702

239,062

239,763

(1)

4

Securitized debt obligations

19,649

18,665

20,010

17,087

18,358

5

7

Other debt:

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

553

656

576

767

958

(16)

(42)

Senior and subordinated notes

32,920

31,051

30,755

28,420

28,478

6

16

Other borrowings

188

321

8,940

13,184

2,160

(41)

(91)

Total other debt

33,661

32,028

40,271

42,371

31,596

5

7

Other liabilities

12,078

11,761

12,567

12,427

11,363

3

6

Total liabilities

314,063

313,654

316,963

311,248

301,456

—

4

Stockholders' equity:

Preferred stock

0

0

0

0

0

—

—

Common stock

7

7

7

7

7

—

—

Additional paid-in capital, net

31,868

31,779

31,656

31,526

31,413

—

1

Retained earnings

33,626

31,996

30,700

31,946

31,086

5

8

Accumulated other comprehensive loss

(1,793)

(1,599)

(926)

(622)

(683)

12

163

Treasury stock, at cost

(13,782)

(12,980)

(12,707)

(12,703)

(12,686)

6

9

Total stockholders' equity

49,926

49,203

48,730

50,154

49,137

1

2

Total liabilities and stockholders' equity

$

363,989

$

362,857

$

365,693

$

361,402

$

350,593

—

4

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 $309 million in Q2 2018, $335 million in Q1 2018, $377 million in Q4 2017, $356 million in Q3 2017 and $313 million in Q2 2017 for the estimated uncollectible amount of billed finance charges and fees and related losses.

(2)

Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(3)

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

(4)

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

(5)

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

(6)

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

(7)

Return on average common equity is calculated based on annualized (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.

(8)

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.

(9)

Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(10)

Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.

(11)

Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

(12)

Capital ratios as of the end of Q2 2018 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.

(13)

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

(14)

In the second quarter of 2018, we sold the substantial majority of our consumer home loan portfolio and the related servicing. We also transferred the remaining consumer home loan portfolio of $398 million to loans held for sale as of June 30, 2018. These actions resulted in a net gain of approximately $400 million, including a benefit for credit losses of $46 million, which is reflected in the Other category.

**

Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

2018 Q2

2018 Q1

2017 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, except as noted)

Interest-earning assets:

Loans, including loans held for sale

$

242,043

$

5,989

9.90

%

$

250,906

$

6,134

9.78

%

$

242,967

$

5,669

9.33

%

Investment securities

79,829

539

2.70

69,576

452

2.60

68,857

433

2.52

Cash equivalents and other

11,623

68

2.34

9,701

51

2.10

6,254

26

1.66

Total interest-earning assets

$

333,495

$

6,596

7.91

$

330,183

$

6,637

8.04

$

318,078

$

6,128

7.71

Interest-bearing liabilities:

Interest-bearing deposits

$

223,079

$

622

1.12

$

219,670

$

539

0.98

$

214,412

$

382

0.71

Securitized debt obligations

19,147

124

2.59

19,698

107

2.17

18,400

82

1.78

Senior and subordinated notes

32,250

289

3.58

30,430

251

3.30

27,821

179

2.57

Other borrowings and liabilities

4,132

10

0.97

6,849

22

1.28

3,656

12

1.31

Total interest-bearing liabilities

$

278,608

$

1,045

1.50

$

276,647

$

919

1.33

$

264,289

$

655

0.99

Net interest income/spread

$

5,551

6.41

$

5,718

6.71

$

5,473

6.72

Impact of non-interest-bearing funding

0.25

0.22

0.16

Net interest margin

6.66

%

6.93

%

6.88

%

Six Months Ended June 30,

2018

2017

Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

Average Balance

Interest Income/Expense(1)

Yield/Rate(1)

(Dollars in millions, except as noted)

Interest-earning assets:

Loans, including loans held for sale

$

246,451

$

12,123

9.84

%

$

242,610

$

11,295

9.31

%

Investment securities

74,731

991

2.65

68,637

849

2.47

Cash equivalents and other

10,668

119

2.23

6,968

54

1.55

Total interest-earning assets

$

331,850

$

13,233

7.98

$

318,215

$

12,198

7.67

Interest-bearing liabilities:

Interest-bearing deposits

$

221,384

$

1,161

1.05

$

213,696

$

735

0.69

Securitized debt obligations

19,421

231

2.38

17,791

151

1.70

Senior and subordinated notes

31,345

540

3.45

26,321

328

2.49

Other borrowings and liabilities

5,483

32

1.17

7,981

37

0.93

Total interest-bearing liabilities

$

277,633

$

1,964

1.41

$

265,789

$

1,251

0.94

Net interest income/spread

$

11,269

6.57

$

10,947

6.73

Impact of non-interest-bearing funding

0.22

0.15

Net interest margin

6.79

%

6.88

%

_________

(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. In the first quarter of 2018, we adopted Accounting Standard Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. As a result, interest income and interest expense amounts shown above include $2 million and $16 million for Q2 2018, and $3 million and $46 million for the six months ended June 30, 2018, respectively, related to hedge ineffectiveness that was previously included in other non-interest income.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics

2018 Q2 vs.

Six Months Ended June 30,

(Dollars in millions, except as noted)

2018Q2

2018Q1

2017Q4

2017Q3

2017Q2

2018Q1

2017Q2

2018

2017

2018 vs.2017

Loans Held for Investment (Period-End)

Credit card:

Domestic credit card

$

100,714

$

98,535

$

105,293

$

99,981

$

92,866

2

%

8

%

$

100,714

$

92,866

8

%

International card businesses

9,063

9,041

9,469

9,149

8,724

—

4

9,063

8,724

4

Total credit card

109,777

107,576

114,762

109,130

101,590

2

8

109,777

101,590

8

Consumer banking:

Auto

55,781

54,811

53,991

53,290

51,765

2

8

55,781

51,765

8

Home loan(1)

—

16,630

17,633

18,820

19,724

**

**

—

19,724

**

Retail banking

2,946

3,233

3,454

3,454

3,484

(9)

(15)

2,946

3,484

(15)

Total consumer banking

58,727

74,674

75,078

75,564

74,973

(21)

(22)

58,727

74,973

(22)

Commercial banking:

Commercial and multifamily real estate

28,292

27,360

26,150

27,944

27,428

3

3

28,292

27,428

3

Commercial and industrial

38,948

38,208

38,025

39,306

39,801

2

(2)

38,948

39,801

(2)

Total commercial lending

67,240

65,568

64,175

67,250

67,229

3

—

67,240

67,229

—

Small-ticket commercial real estate

369

385

400

420

443

(4)

(17)

369

443

(17)

Total commercial banking

67,609

65,953

64,575

67,670

67,672

3

—

67,609

67,672

—

Other loans

11

53

58

58

67

(79)

(84)

11

67

(84)

Total loans held for investment

$

236,124

$

248,256

$

254,473

$

252,422

$

244,302

(5)

(3)

$

236,124

$

244,302

(3)

Loans Held for Investment (Average)

Credit card:

Domestic credit card

$

98,895

$

100,450

$

101,087

$

93,729

$

91,769

(2)

%

8

%

$

99,668

$

92,398

8

%

International card businesses

8,998

9,052

8,942

8,816

8,274

(1)

9

9,025

8,205

10

Total credit card

107,893

109,502

110,029

102,545

100,043

(1)

8

108,693

100,603

8

Consumer banking:

Auto

55,298

54,344

53,747

52,615

50,803

2

9

54,824

49,743

10

Home loan(1)

8,098

17,224

18,109

19,302

20,203

(53)

(60)

12,635

20,674

(39)

Retail banking

3,084

3,429

3,433

3,446

3,463

(10)

(11)

3,256

3,486

(7)

Total consumer banking

66,480

74,997

75,289

75,363

74,469

(11)

(11)

70,715

73,903

(4)

Commercial banking:

Commercial and multifamily real estate

27,302

26,542

27,770

27,703

27,401

3

—

26,924

26,997

—

Commercial and industrial

38,686

38,246

39,020

39,723

39,815

1

(3)

38,467

39,845

(3)

Total commercial lending

65,988

64,788

66,790

67,426

67,216

2

(2)

65,391

66,842

(2)

Small-ticket commercial real estate

376

393

410

433

453

(4)

(17)

385

463

(17)

Total commercial banking

66,364

65,181

67,200

67,859

67,669

2

(2)

65,776

67,305

(2)

Other loans

21

46

48

55

60

(54)

(65)

34

64

(47)

Total average loans held for investment

$

240,758

$

249,726

$

252,566

$

245,822

$

242,241

(4)

(1)

$

245,218

$

241,875

1

2018 Q2 vs.

Six Months Ended June 30,

(Dollars in millions, except as noted)

2018Q2

2018Q1

2017Q4

2017Q3

2017Q2

2018Q1

2017Q2

2018

2017

2018 vs.2017

Net Charge-Off (Recovery) Rates

Credit card:

Domestic credit card

4.72

%

5.26

%

5.08

%

4.64

%

5.11

%

(54)

bps

(39)

bps

4.99

%

5.12

%

(13)

bps

International card businesses

4.14

2.49

3.92

3.08

4.08

165

6

3.32

3.88

(56)

Total credit card

4.67

5.03

4.99

4.51

5.02

(36)

(35)

4.85

5.02

(17)

Consumer banking:

Auto

1.32

1.53

2.12

1.96

1.70

(21)

(38)

1.42

1.67

(25)

Home loan(1)

—

(0.03)

0.23

0.02

0.04

3

(4)

(0.02)

0.03

(5)

Retail banking

2.07

1.89

1.94

2.10

1.71

18

36

1.97

1.81

16

Total consumer banking

1.19

1.19

1.66

1.47

1.25

—

(6)

1.19

1.22

(3)

Commercial banking:

Commercial and multifamily real estate

—

—

(0.01)

(0.01)

0.03

—

(3)

—

0.02

(2)

Commercial and industrial

(0.07)

0.20

1.47

1.64

1.34

(27)

(141)

0.06

0.78

(72)

Total commercial lending

(0.04)

0.12

0.86

0.97

0.81

(16)

(85)

0.04

0.47

(43)

Small-ticket commercial real estate

(0.40)

(0.18)

(0.05)

0.12

(0.22)

(22)

(18)

(0.29)

0.43

(72)

Total commercial banking

(0.04)

0.11

0.85

0.96

0.80

(15)

(84)

0.04

0.47

(43)

Total net charge-offs

2.42

2.59

2.89

2.61

2.67

(17)

(25)

2.51

2.59

(8)

30+ Day Performing Delinquency Rates

Credit card:

Domestic credit card

3.32

%

3.57

%

4.01

%

3.94

%

3.63

%

(25)

bps

(31)

bps

3.32

%

3.63

%

(31)

bps

International card businesses

3.39

3.62

3.64

3.54

3.28

(23)

11

3.39

3.28

11

Total credit card

3.32

3.58

3.98

3.91

3.60

(26)

(28)

3.32

3.60

(28)

Consumer banking:

Auto

5.57

5.15

6.51

5.71

5.40

42

17

5.57

5.40

17

Home loan(1)

—

0.20

0.20

0.17

0.14

(20)

(14)

—

0.14

(14)

Retail banking

0.84

0.75

0.76

0.73

0.54

9

30

0.84

0.54

30

Total consumer banking

5.33

3.86

4.76

4.10

3.79

147

154

5.33

3.79

154

Nonperforming Loans and Nonperforming Assets Rates(2)(3)

Credit card:

International card businesses

0.22

%

0.25

%

0.25

%

0.28

%

0.37

%

(3)

bps

(15)

bps

0.22

%

0.37

%

(15)

bps

Total credit card

0.02

0.02

0.02

0.02

0.03

—

(1)

0.02

0.03

(1)

Consumer banking:

Auto

0.55

0.50

0.70

0.65

0.53

5

2

0.55

0.53

2

Home loan(1)

—

0.86

1.00

0.84

1.31

(86)

(131)

—

1.31

(131)

Retail banking

1.15

1.04

1.00

0.97

0.96

11

19

1.15

0.96

19

Total consumer banking

0.58

0.61

0.78

0.71

0.75

(3)

(17)

0.58

0.75

(17)

Commercial banking:

Commercial and multifamily real estate

0.01

0.01

0.15

0.23

0.13

—

(12)

0.01

0.13

(12)

Commercial and industrial

0.57

0.78

0.63

1.82

1.62

(21)

(105)

0.57

1.62

(105)

Total commercial lending

0.33

0.46

0.43

1.16

1.01

(13)

(68)

0.33

1.01

(68)

Small-ticket commercial real estate

1.18

1.46

1.65

1.59

1.89

(28)

(71)

1.18

1.89

(71)

Total commercial banking

0.34

0.47

0.44

1.16

1.01

(13)

(67)

0.34

1.01

(67)

Total nonperforming loans

0.25

0.32

0.35

0.54

0.53

(7)

(28)

0.25

0.53

(28)

Total nonperforming assets

0.30

0.35

0.41

0.60

0.60

(5)

(30)

0.30

0.60

(30)

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, 2018

Credit Card

Consumer Banking

(Dollars in millions)

Domestic Card

International Card Businesses

Total Credit Card

Auto

Home Loan(1)

RetailBanking

TotalConsumer Banking

Commercial Banking

Other(1)

Total

Allowance for loan and lease losses:

Balance as of March 31, 2018

$

5,332

$

394

$

5,726

$

1,137

$

53

$

63

$

1,253

$

587

$

1

$

7,567

Charge-offs

(1,549)

(130)

(1,679)

(393)

—

(21)

(414)

(7)

(9)

(2,109)

Recoveries

383

36

419

211

—

5

216

14

1

650

Net charge-offs

(1,166)

(94)

(1,260)

(182)

—

(16)

(198)

7

(8)

(1,459)

Provision (benefit) for loan and lease losses

1,094

77

1,171

105

—

14

119

30

(47)

1,273

Allowance build (release) for loan and lease losses

(72)

(17)

(89)

(77)

—

(2)

(79)

37

(55)

(186)

Other changes(1)(4)

—

(13)

(13)

—

(53)

(1)

(54)

—

54

(13)

Balance as of June 30, 2018

5,260

364

5,624

1,060

—

60

1,120

624

—

7,368

Reserve for unfunded lending commitments:

Balance as of March 31, 2018

—

—

—

—

—

6

6

108

—

114

Provision (benefit) for losses on unfunded lending commitments

—

—

—

—

—

(1)

(1)

4

—

3

Balance as of June 30, 2018

—

—

—

—

—

5

5

112

—

117

Combined allowance and reserve as of June 30, 2018

$

5,260

$

364

$

5,624

$

1,060

$

—

$

65

$

1,125

$

736

$

—

$

7,485

Six Months Ended June 30, 2018

Credit Card

Consumer Banking

(Dollars in millions)

Domestic Card

International Card Businesses

Total Credit Card

Auto

Home Loan(1)

RetailBanking

TotalConsumer Banking

Commercial Banking

Other(1)

Total

Allowance for loan and lease losses:

Balance as of December 31, 2017

$

5,273

$

375

$

5,648

$

1,119

$

58

$

65

$

1,242

$

611

$

1

$

7,502

Charge-offs

(3,246)

(258)

(3,504)

(803)

—

(42)

(845)

(28)

(8)

(4,385)

Recoveries

759

108

867

413

1

10

424

16

1

1,308

Net charge-offs

(2,487)

(150)

(2,637)

(390)

1

(32)

(421)

(12)

(7)

(3,077)

Provision (benefit) for loan and lease losses

2,474

153

2,627

331

(6)

28

353

25

(48)

2,957

Allowance build (release) for loan and lease losses

(13)

3

(10)

(59)

(5)

(4)

(68)

13

(55)

(120)

Other changes(1)(4)

—

(14)

(14)

—

(53)

(1)

(54)

—

54

(14)

Balance as of June 30, 2018

5,260

364

5,624

1,060

—

60

1,120

624

—

7,368

Reserve for unfunded lending commitments:

Balance as of December 31, 2017

—

—

—

—

—

7

7

117

—

124

Benefit for losses on unfunded lending commitments

—

—

—

—

—

(2)

(2)

(5)

—

(7)

Balance as of June 30, 2018

—

—

—

—

—

5

5

112

—

117

Combined allowance and reserve as of June 30, 2018

$

5,260

$

364

$

5,624

$

1,060

$

—

$

65

$

1,125

$

736

$

—

$

7,485

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results

Three Months Ended June 30, 2018

Six Months Ended June 30, 2018

(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking(6)(7)

Other(6)(7)

Total

Credit Card

Consumer Banking

Commercial Banking(6)(7)

Other(6)(7)

Total

Net interest income

$

3,396

$

1,609

$

549

$

(3)

$

5,551

$

6,954

$

3,224

$

1,085

$

6

$

11,269

Non-interest income

884

175

209

373

1,641

1,741

349

396

346

2,832

Total net revenue

4,280

1,784

758

370

7,192

8,695

3,573

1,481

352

14,101

Provision (benefit) for credit losses

1,171

118

34

(47)

1,276

2,627

351

20

(48)

2,950

Non-interest expense

1,904

963

409

148

3,424

3,943

1,963

812

279

6,997

Income from continuing operations before income taxes

1,205

703

315

269

2,492

2,125

1,259

649

121

4,154

Income tax provision (benefit)

282

164

73

56

575

495

294

151

(46)

894

Income from continuing operations, net of tax

$

923

$

539

$

242

$

213

$

1,917

$

1,630

$

965

$

498

$

167

$

3,260

Three Months Ended March 31, 2018

(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking(6)(7)

Other(6)(7)

Total

Net interest income

$

3,558

$

1,615

$

536

$

9

$

5,718

Non-interest income

857

174

187

(27)

1,191

Total net revenue (loss)

4,415

1,789

723

(18)

6,909

Provision (benefit) for credit losses

1,456

233

(14)

(1)

1,674

Non-interest expense

2,039

1,000

403

131

3,573

Income (loss) from continuing operations before income taxes

920

556

334

(148)

1,662

Income tax provision (benefit)

213

130

78

(102)

319

Income (loss) from continuing operations, net of tax

$

707

$

426

$

256

$

(46)

$

1,343

Three Months Ended June 30, 2017

Six Months Ended June 30, 2017

(Dollars in millions)

Credit Card

Consumer Banking

Commercial Banking(6)

Other(6)

Total

Credit Card

Consumer Banking

Commercial Banking(6)

Other(6)

Total

Net interest income

$

3,294

$

1,578

$

569

$

32

$

5,473

$

6,640

$

3,095

$

1,135

$

77

$

10,947

Non-interest income

875

183

183

(10)

1,231

1,613

378

341

(40)

2,292

Total net revenue

4,169

1,761

752

22

6,704

8,253

3,473

1,476

37

13,239

Provision (benefit) for credit losses

1,397

268

140

(5)

1,800

3,114

547

138

(7)

3,792

Non-interest expense

1,918

1,059

381

56

3,414

3,847

2,101

772

128

6,848

Income (loss) from continuing operations before income taxes

854

434

231

(29)

1,490

1,292

825

566

(84)

2,599

Income tax provision (benefit)

301

158

85

(101)

443

468

301

207

(219)

757

Income from continuing operations, net of tax

$

553

$

276

$

146

$

72

$

1,047

$

824

$

524

$

359

$

135

$

1,842

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business

2018 Q2 vs.

Six Months Ended June 30,

2018

2018

2017

2017

2017

2018

2017

2018 vs.

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Credit Card

Earnings:

Net interest income

$

3,396

$

3,558

$

3,568

$

3,440

$

3,294

(5)

%

3

%

$

6,954

$

6,640

5

%

Non-interest income

884

857

847

865

875

3

1

1,741

1,613

8

Total net revenue

4,280

4,415

4,415

4,305

4,169

(3)

3

8,695

8,253

5

Provision for credit losses

1,171

1,456

1,486

1,466

1,397

(20)

(16)

2,627

3,114

(16)

Non-interest expense

1,904

2,039

2,108

1,961

1,918

(7)

(1)

3,943

3,847

2

Income from continuing operations before income taxes

1,205

920

821

878

854

31

41

2,125

1,292

64

Income tax provision

282

213

297

306

301

32

(6)

495

468

6

Income from continuing operations, net of tax

$

923

$

707

$

524

$

572

$

553

31

67

$

1,630

$

824

98

Selected performance metrics:

Period-end loans held for investment

$

109,777

$

107,576

$

114,762

$

109,130

$

101,590

2

8

$

109,777

$

101,590

8

Average loans held for investment

107,893

109,502

110,029

102,545

100,043

(1)

8

108,693

100,603

8

Average yield on loans held for investment(8)

15.06

%

15.24

%

15.13

%

15.58

%

15.14

%

(18)

bps

(8)

bps

15.15

%

15.06

%

9

bps

Total net revenue margin(9)

15.87

16.13

16.05

16.79

16.67

(26)

(80)

16.00

16.41

(41)

Net charge-off rate

4.67

5.03

4.99

4.51

5.02

(36)

(35)

4.85

5.02

(17)

30+ day performing delinquency rate

3.32

3.58

3.98

3.91

3.60

(26)

(28)

3.32

3.60

(28)

30+ day delinquency rate

3.33

3.59

3.99

3.92

3.62

(26)

(29)

3.33

3.62

(29)

Nonperforming loan rate(2)

0.02

0.02

0.02

0.02

0.03

—

(1)

0.02

0.03

(1)

Purchase volume(10)

$

97,392

$

86,545

$

95,659

$

84,505

$

83,079

13

%

17

%

$

183,937

$

156,276

18

%

2018 Q2 vs.

Six Months Ended June 30,

2018

2018

2017

2017

2017

2018

2017

2018 vs.

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Domestic Card

Earnings:

Net interest income

$

3,108

$

3,229

$

3,268

$

3,132

$

3,011

(4)

%

3

%

$

6,337

$

6,104

4

%

Non-interest income

818

774

781

787

802

6

2

1,592

1,501

6

Total net revenue

3,926

4,003

4,049

3,919

3,813

(2)

3

7,929

7,605

4

Provision for credit losses

1,094

1,380

1,402

1,417

1,327

(21)

(18)

2,474

2,964

(17)

Non-interest expense

1,683

1,832

1,880

1,754

1,727

(8)

(3)

3,515

3,444

2

Income from continuing operations before income taxes

1,149

791

767

748

759

45

51

1,940

1,197

62

Income tax provision

268

184

280

273

277

46

(3)

452

437

3

Income from continuing operations, net of tax

$

881

$

607

$

487

$

475

$

482

45

83

$

1,488

$

760

96

Selected performance metrics:

Period-end loans held for investment

$

100,714

$

98,535

$

105,293

$

99,981

$

92,866

2

8

$

100,714

$

92,866

8

Average loans held for investment

98,895

100,450

101,087

93,729

91,769

(2)

8

99,668

92,398

8

Average yield on loans held for investment(8)

15.05

%

15.10

%

15.08

%

15.51

%

15.07

%

(5)

bps

(2)

bps

15.07

%

15.04

%

3

bps

Total net revenue margin(9)

15.88

15.94

16.03

16.72

16.62

(6)

(74)

15.91

16.46

(55)

Net charge-off rate

4.72

5.26

5.08

4.64

5.11

(54)

(39)

4.99

5.12

(13)

30+ day delinquency rate

3.32

3.57

4.01

3.94

3.63

(25)

(31)

3.32

3.63

(31)

Purchase volume(10)

$

88,941

$

79,194

$

87,287

$

76,806

$

75,781

12

%

17

%

$

168,135

$

142,731

18

%

Refreshed FICO scores:(11)

Greater than 660

68

%

66

%

66

%

65

%

64

%

2

4

68

%

64

%

4

660 or below

32

34

34

35

36

(2)

(4)

32

36

(4)

Total

100

%

100

%

100

%

100

%

100

%

100

%

100

%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business

2018 Q2 vs.

Six Months Ended June 30,

2018

2018

2017

2017

2017

2018

2017

2018 vs.

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Consumer Banking

Earnings:

Net interest income

$

1,609

$

1,615

$

1,636

$

1,649

$

1,578

—

2

%

$

3,224

$

3,095

4

%

Non-interest income

175

174

179

192

183

1

%

(4)

349

378

(8)

Total net revenue

1,784

1,789

1,815

1,841

1,761

—

1

3,573

3,473

3

Provision for credit losses

118

233

340

293

268

(49)

(56)

351

547

(36)

Non-interest expense

963

1,000

1,081

1,051

1,059

(4)

(9)

1,963

2,101

(7)

Income from continuing operations before income taxes

703

556

394

497

434

26

62

1,259

825

53

Income tax provision

164

130

144

181

158

26

4

294

301

(2)

Income from continuing operations, net of tax

$

539

$

426

$

250

$

316

$

276

27

95

$

965

$

524

84

Selected performance metrics:

Period-end loans held for investment(1)

$

58,727

$

74,674

$

75,078

$

75,564

$

74,973

(21)

(22)

$

58,727

$

74,973

(22)

Average loans held for investment(1)

66,480

74,997

75,289

75,363

74,469

(11)

(11)

70,715

73,903

(4)

Average yield on loans held for investment(8)

7.32

%

6.86

%

6.84

%

6.79

%

6.56

%

46

bps

76

bps

7.08

%

6.52

%

56

bps

Auto loan originations

$

6,994

$

6,707

$

6,215

$

7,043

$

7,453

4

%

(6)

%

$

13,701

$

14,478

(5)

%

Period-end deposits

194,962

193,073

185,842

184,719

186,607

1

4

194,962

186,607

4

Average deposits

193,278

187,785

184,799

185,072

186,989

3

3

190,547

185,471

3

Average deposits interest rate

0.88

%

0.80

%

0.69

%

0.62

%

0.59

%

8

bps

29

bps

0.84

%

0.58

%

26

bps

Net charge-off rate

1.19

1.19

1.66

1.47

1.25

—

(6)

1.19

1.22

(3)

30+ day performing delinquency rate

5.33

3.86

4.76

4.10

3.79

147

154

5.33

3.79

154

30+ day delinquency rate

5.80

4.27

5.34

4.61

4.33

153

147

5.80

4.33

147

Nonperforming loan rate(2)

0.58

0.61

0.78

0.71

0.75

(3)

(17)

0.58

0.75

(17)

Nonperforming asset rate(3)

0.73

0.70

0.91

0.88

0.96

3

(23)

0.73

0.96

(23)

Auto—At origination FICO scores:(12)

Greater than 660

50

%

51

%

51

%

51

%

51

%

(1)

%

(1)

%

50

%

51

%

(1)

%

621-660

19

18

18

18

18

1

1

19

18

1

620 or below

31

31

31

31

31

—

—

31

31

—

Total

100

%

100

%

100

%

100

%

100

%

100

%

100

%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business

2018 Q2 vs.

Six Months Ended June 30,

2018

2018

2017

2017

2017

2018

2017

2018 vs.

(Dollars in millions, except as noted)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Commercial Banking

Earnings:

Net interest income

$

549

$

536

$

566

$

560

$

569

2

%

(4)

%

$

1,085

$

1,135

(4)

%

Non-interest income

209

187

188

179

183

12

14

396

341

16

Total net revenue(6)(7)

758

723

754

739

752

5

1

1,481

1,476

—

Provision (benefit) for credit losses

34

(14)

100

63

140

**

(76)

20

138

(86)

Non-interest expense

409

403

437

394

381

1

7

812

772

5

Income from continuing operations before income taxes

315

334

217

282

231

(6)

36

649

566

15

Income tax provision

73

78

79

103

85

(6)

(14)

151

207

(27)

Income from continuing operations, net of tax

$

242

$

256

$

138

$

179

$

146

(5)

66

$

498

$

359

39

Selected performance metrics:

Period-end loans held for investment

$

67,609

$

65,953

$

64,575

$

67,670

$

67,672

3

—

$

67,609

$

67,672

—

Average loans held for investment

66,364

65,181

67,200

67,859

67,669

2

(2)

65,776

67,305

(2)

Average yield on loans held for investment(6)(8)

4.43

%

4.16

%

4.03

%

3.98

%

3.81

%

27

bps

62

bps

4.30

%

3.73

%

57

bps

Period-end deposits

$

31,078

$

34,449

$

33,938

$

32,783

$

33,153

(10)

%

(6)

%

$

31,078

$

33,153

(6)

%

Average deposits

32,951

34,057

34,117

33,197

34,263

(3)

(4)

33,501

34,241

(2)

Average deposits interest rate

0.65

%

0.52

%

0.46

%

0.42

%

0.36

%

13

bps

29

bps

0.59

%

0.34

%

25

bps

Net charge-off (recovery) rate

(0.04)

0.11

0.85

0.96

0.80

(15)

(84)

0.04

0.47

(43)

Nonperforming loan rate(2)

0.34

0.47

0.44

1.16

1.01

(13)

(67)

0.34

1.01

(67)

Nonperforming asset rate(3)

0.37

0.49

0.52

1.22

1.04

(12)

(67)

0.37

1.04

(67)

Risk category:(13)

Noncriticized

$

64,923

$

62,773

$

61,162

$

63,501

$

63,802

3

%

2

%

$

64,923

$

63,802

2

%

Criticized performing

2,088

2,432

2,649

2,878

2,660

(14)

(22)

2,088

2,660

(22)

Criticized nonperforming

229

309

284

788

686

(26)

(67)

229

686

(67)

PCI loans

369

439

480

503

524

(16)

(30)

369

524

(30)

Total commercial loans

$

67,609

$

65,953

$

64,575

$

67,670

$

67,672

3

—

$

67,609

$

67,672

—

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

Noncriticized

96.1

%

95.1

%

94.7

%

93.8

%

94.3

%

100

bps

180

bps

96.1

%

94.3

%

180

bps

Criticized performing

3.1

3.7

4.1

4.3

3.9

(60)

(80)

3.1

3.9

(80)

Criticized nonperforming

0.3

0.5

0.4

1.2

1.0

(20)

(70)

0.3

1.0

(70)

PCI loans

0.5

0.7

0.8

0.7

0.8

(20)

(30)

0.5

0.8

(30)

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

2018 Q2 vs.

Six Months Ended June 30,

2018

2018

2017

2017

2017

2018

2017

2018 vs.

(Dollars in millions)

Q2

Q1

Q4

Q3

Q2

Q1

Q2

2018

2017

2017

Other(5)

Earnings:

Net interest income

$

(3)

$

9

$

43

$

51

$

32

**

**

$

6

$

77

(92)

%

Non-interest income(1)

373

(27)

(14)

49

(10)

**

**

346

(40)

**

Total net revenue (loss)(6)(7)

370

(18)

29

100

22

**

**

352

37

**

Provision (benefit) for credit losses(1)

(47)

(1)

—

11

(5)

**

**

(48)

(7)

**

Non-interest expense(14)

148

131

153

161

56

13

%

164

%

279

128

118

Income (loss) from continuing operations before income taxes

269

(148)

(124)

(72)

(29)

**

**

121

(84)

**

Income tax provision (benefit)

56

(102)

1,650

(142)

(101)

**

**

(46)

(219)

(79)

Income (loss) from continuing operations, net of tax

$

213

$

(46)

$

(1,774)

$

70

$

72

**

196

$

167

$

135

24

Selected performance metrics:

Period-end loans held for investment

$

11

$

53

$

58

$

58

$

67

(79)

(84)

$

11

$

67

(84)

Average loans held for investment

21

46

48

55

60

(54)

(65)

34

64

(47)

Period-end deposits

22,185

23,325

23,922

21,560

20,003

(5)

11

22,185

20,003

11

Average deposits

22,561

23,428

22,646

20,574

19,298

(4)

17

22,992

19,843

16

Total

Earnings:

Net interest income

$

5,551

$

5,718

$

5,813

$

5,700

$

5,473

(3)

%

1

%

$

11,269

$

10,947

3

%

Non-interest income

1,641

1,191

1,200

1,285

1,231

38

33

2,832

2,292

24

Total net revenue

7,192

6,909

7,013

6,985

6,704

4

7

14,101

13,239

7

Provision for credit losses

1,276

1,674

1,926

1,833

1,800

(24)

(29)

2,950

3,792

(22)

Non-interest expense

3,424

3,573

3,779

3,567

3,414

(4)

—

6,997

6,848

2

Income from continuing operations before income taxes

2,492

1,662

1,308

1,585

1,490

50

67

4,154

2,599

60

Income tax provision

575

319

2,170

448

443

80

30

894

757

18

Income (loss) from continuing operations, net of tax

$

1,917

$

1,343

$

(862)

$

1,137

$

1,047

43

83

$

3,260

$

1,842

77

Selected performance metrics:

Period-end loans held for investment

$

236,124

$

248,256

$

254,473

$

252,422

$

244,302

(5)

(3)

$

236,124

$

244,302

(3)

Average loans held for investment

240,758

249,726

252,566

245,822

242,241

(4)

(1)

245,218

241,875

1

Period-end deposits

248,225

250,847

243,702

239,062

239,763

(1)

4

248,225

239,763

4

Average deposits

248,790

245,270

241,562

238,843

240,550

1

3

247,040

239,555

3

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)

(1)

In the second quarter of 2018, we sold the substantial majority of our consumer home loan portfolio and the related servicing. We also transferred the remaining consumer home loan portfolio of $398 million to loans held for sale as of June 30, 2018. These actions resulted in a net gain of approximately $400 million, including a benefit for credit losses of $46 million, which is reflected in the Other category.

(2)

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.

(3)

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.

(4)

Represents foreign currency translation adjustments and the net impact of loan transfers and sales where applicable.

(5)

Charges for the impacts of the Tax Act of $1.77 billion were reflected in the Other category of our business segment results for Q4 2017. This amount was a reasonable estimate as of December 31, 2017, which may be adjusted during the measurement period ending no later than December 2018. The Tax Act refers to the Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on budget for fiscal year 2018 enacted on December 22, 2017.

(6)

Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate (21% for all periods in 2018 and 35% for all periods in 2017) and state taxes where applicable, with offsetting reductions to the Other category.

(7)

In the first quarter of 2018, we made a change in how revenue is measured in our Commercial Banking business to include the tax benefits of losses on certain tax-advantaged investments. These tax benefits are included in revenue on a taxable-equivalent basis within our Commercial Banking business, with an offsetting reduction to the Other category. In addition, all revenue presented on a taxable-equivalent basis in our Commercial Banking business was impacted by the reduction of the federal tax rate set forth in the Tax Act. The net impact of the measurement change and the reduction of the federal tax rate was a decrease of $28 million and $56 million in revenue in our Commercial Banking business in the second quarter and first six months of 2018, respectively, with an offsetting impact to the Other category.

(8)

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.

(9)

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.

(10)

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

(11)

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.

(12)

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.

(13)

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

(14)

Includes charges incurred as a result of restructuring activities.

**

Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures(1)

Basel III Standardized Approach

(Dollars in millions, except as noted)

June 30,2018

March 31,2018

December 31,2017

September 30,2017

June 30,2017

Regulatory Capital Metrics

Common equity excluding AOCI

$

47,359

$

46,441

$

45,296

$

46,415

$

45,459

Adjustments:

AOCI(2)(3)

(1,793)

(1,599)

(808)

(538)

(593)

Goodwill, net of related deferred tax liabilities

(14,368)

(14,379)

(14,380)

(14,300)

(14,299)

Intangible assets, net of related deferred tax liabilities(3)

(328)

(371)

(330)

(372)

(419)

Other

735

620

258

93

78

Common equity Tier 1 capital

$

31,605

$

30,712

$

30,036

$

31,298

$

30,226

Tier 1 capital

$

35,965

$

35,073

$

34,396

$

35,657

$

34,585

Total capital(4)

43,082

42,259

41,962

43,272

42,101

Risk-weighted assets

285,262

291,346

292,225

292,041

283,231

Adjusted average assets(5)

349,222

347,287

348,424

340,579

335,248

Capital Ratios

Common equity Tier 1 capital(6)

11.1

%

10.5

%

10.3

%

10.7

%

10.7

%

Tier 1 capital(7)

12.6

12.0

11.8

12.2

12.2

Total capital(8)

15.1

14.5

14.4

14.8

14.9

Tier 1 leverage(5)

10.3

10.1

9.9

10.5

10.3

Tangible common equity ("TCE")(9)

8.8

8.6

8.3

8.8

8.8

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

2018

2018

Six Months Ended

Q2

Q1

June 30, 2018

(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

Selected income statement data:

Net interest income

$

5,551

$

26

$

5,577

$

5,718

—

$

5,718

$

11,269

$

26

$

11,295

Non-interest income

1,641

(361)

1,280

1,191

$

2

1,193

2,832

(359)

2,473

Total net revenue

7,192

(335)

6,857

6,909

2

6,911

14,101

(333)

13,768

Provision for credit losses

1,276

46

1,322

1,674

—

1,674

2,950

46

2,996

Non-interest expense

3,424

(45)

3,379

3,573

(17)

3,556

6,997

(62)

6,935

Income from continuing operations before income taxes

2,492

(336)

2,156

1,662

19

1,681

4,154

(317)

3,837

Income tax provision (benefit)

575

(92)

483

319

4

323

894

(88)

806

Income from continuing operations, net of tax

1,917

(244)

1,673

1,343

15

1,358

3,260

(229)

3,031

Income (loss) from discontinued operations, net of tax

(11)

—

(11)

3

—

3

(8)

—

(8)

Net income

1,906

(244)

1,662

1,346

15

1,361

3,252

(229)

3,023

Dividends and undistributed earnings allocated to participating securities(11)

(12)

2

(10)

(10)

—

(10)

(23)

2

(21)

Preferred stock dividends

(80)

—

(80)

(52)

—

(52)

(132)

—

(132)

Net income available to common stockholders

$

1,814

$

(242)

$

1,572

$

1,284

$

15

$

1,299

$

3,097

$

(227)

$

2,870

Selected performance metrics:

Diluted EPS(11)

$

3.71

$

(0.49)

$

3.22

$

2.62

$

0.03

$

2.65

$

6.33

$

(0.47)

$

5.86

Efficiency ratio

47.61

%

167

bps

49.28

%

51.72

%

(27)

bps

51.45

%

49.62

%

75

bps

50.37

%

Operating efficiency ratio

41.70

138

43.08

45.72

(26)

45.46

43.67

61

44.28

2017

2017

Six Months Ended

Q2

Q1

June 30, 2017

(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

Selected income statement data:

Net interest income

$

5,473

—

$

5,473

$

5,474

$

33

$

5,507

$

10,947

$

33

$

10,980

Non-interest income

1,231

—

1,231

1,061

37

1,098

2,292

37

2,329

Total net revenue

6,704

—

6,704

6,535

70

6,605

13,239

70

13,309

Provision for credit losses

1,800

—

1,800

1,992

—

1,992

3,792

—

3,792

Non-interest expense

3,414

$

(12)

3,402

3,434

(29)

3,405

6,848

(41)

6,807

Income from continuing operations before income taxes

1,490

12

1,502

1,109

99

1,208

2,599

111

2,710

Income tax provision (benefit)

443

4

447

314

(1)

313

757

3

760

Income from continuing operations, net of tax

1,047

8

1,055

795

100

895

1,842

108

1,950

Income (loss) from discontinued operations, net of tax

(11)

—

(11)

15

—

15

4

—

4

Net income

1,036

8

1,044

810

100

910

1,846

108

1,954

Dividends and undistributed earnings allocated to participating securities(11)

(8)

—

(8)

(5)

—

(5)

(13)

—

(13)

Preferred stock dividends

(80)

—

(80)

(53)

—

(53)

(133)

—

(133)

Net income available to common stockholders

$

948

$

8

$

956

$

752

$

100

$

852

$

1,700

$

108

$

1,808

Selected performance metrics:

Diluted EPS(11)

$

1.94

$

0.02

$

1.96

$

1.54

$

0.21

$

1.75

$

3.49

$

0.22

$

3.71

Efficiency ratio

50.92

%

(17)

bps

50.75

%

52.55

%

(100)

bps

51.55

%

51.73

%

(58)

bps

51.15

%

Operating efficiency ratio

44.44

(18)

44.26

46.49

(93)

45.56

45.45

(55)

44.90

Reconciliation of Non-GAAP Measures

The following 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. We consider these metrics to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. While these non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, our measures may not be comparable to similarly-titled measures reported by other companies. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

2018

2018

2017

2017

2017

(Dollars in millions)

Q2

Q1

Q4

Q3

Q2

Tangible Common Equity (Period-End)

Stockholders' equity

$

49,926

$

49,203

$

48,730

$

50,154

$

49,137

Goodwill and intangible assets(12)

(15,013)

(15,063)

(15,106)

(15,249)

(15,301)

Noncumulative perpetual preferred stock

(4,360)

(4,360)

(4,360)

(4,360)

(4,360)

Tangible common equity

$

30,553

$

29,780

$

29,264

$

30,545

$

29,476

Tangible Common Equity (Average)

Stockholders' equity

$

49,827

$

49,031

$

50,710

$

50,176

$

49,005

Goodwill and intangible assets(12)

(15,043)

(15,092)

(15,223)

(15,277)

(15,336)

Noncumulative perpetual preferred stock

(4,360)

(4,360)

(4,360)

(4,360)

(4,360)

Tangible common equity

$

30,424

$

29,579

$

31,127

$

30,539

$

29,309

Tangible Assets (Period-End)

Total assets

$

363,989

$

362,857

$

365,693

$

361,402

$

350,593

Goodwill and intangible assets(12)

(15,013)

(15,063)

(15,106)

(15,249)

(15,301)

Tangible assets

$

348,976

$

347,794

$

350,587

$

346,153

$

335,292

Tangible Assets (Average)

Total assets

$

363,929

$

362,049

$

363,045

$

355,191

$

349,891

Goodwill and intangible assets(12)

(15,043)

(15,092)

(15,223)

(15,277)

(15,336)

Tangible assets

$

348,886

$

346,957

$

347,822

$

339,914

$

334,555

_________

(1) Regulatory capital metrics and capital ratios as of June 30, 2018 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 80% for 2017 and 100% for 2018.

(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 are deducted from Tier

1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted

average assets.

(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) Adjustments for the following periods consist of:

2018

2018

Six Months Ended

2017

2017

Six Months Ended

(Dollars in millions)

Q2

Q1

June 30, 2018

Q2

Q1

June 30, 2017

Net gain on sale of home loans

$

(400)

—

$

(400)

—

—

—

Restructuring charges

15

$

19

34

—

—

—

U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve")

49

—

49

—

$

99

$

99

Charges related to the Cabela's acquisition

—

—

—

$

12

—

12

Total

(336)

19

(317)

12

99

111

Income tax provision (benefit)

(92)

4

(88)

4

(1)

3

Net income

$

(244)

$

15

$

(229)

$

8

$

100

$

108

(11) 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.

(12) Includes impact of related deferred taxes.

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/capital-one-reports-second-quarter-2018-net-income-of-1-9-billion-or-3-71-per-share-300683964.html

SOURCE Capital One Financial Corporation

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