Regulatory and Capital Adequacy

12 Months Ended

Dec. 31, 2016

Banking and Thrift [Abstract]

Regulatory and Capital Adequacy

NOTE 12—REGULATORY AND CAPITAL ADEQUACY

Regulation and Capital Adequacy

Bank holding companies (“BHCs”) and national banks are subject to capital adequacy standards adopted by the Federal Banking Agencies, including the Basel III Capital Rule. Moreover, the Banks, as insured depository institutions, are subject to PCA capital regulations,which require the Federal Banking Agencies to take prompt corrective action for banks that do not meet PCA capital requirements. The Company entered parallel run under Advanced Approaches on January 1, 2015, during which we calculate capital ratios under both the Basel III Standardized Approach and the Basel III Advanced Approaches, though we continue to use the Standardized Approach for purposes of meeting regulatory capital requirements.

As of January 1, 2015, under the Basel III Capital Rule, the regulatory minimum risk-based and leverage capital requirements for Advanced Approaches banking organizations include a common equity Tier 1 capital ratio of at least 4.5%, a Tier 1 capital ratio of at least 6.0%, a total capital ratio of at least 8.0% and a Tier 1 leverage capital ratio of at least 4.0%. The Basel III Capital Rule introduced a supplementary leverage ratio for all Advanced Approaches banking organizations, which compares Tier 1 capital to total leverage exposure, which includes all on-balance sheet assets and certain off-balance sheet exposures, including derivatives and unused commitments. Beginning in the first quarter of 2015, as an Advanced Approaches banking organization, we are required to calculate and publicly disclose our supplementary leverage ratio. The supplementary leverage ratio minimum requirement of 3.0% becomes effective on January 1, 2018.

For additional information about the capital adequacy guidelines we are subject to, see “Part 1—Item 1.Business—Supervision and Regulation.”

The following tableprovides a comparison of our regulatory capital amounts and ratios under the Basel III Standardized Approach subject to transition provisions, the regulatory minimum capital adequacy ratios and the PCA well-capitalized level for each ratio (where applicable) as of December 31, 2016 and 2015.

Table 12.1: Capital Ratios Under Basel III⁽¹⁾

	December 31, 2016					December 31, 2015
(Dollars in millions)	Capital Amount		Capital Ratio	Minimum Capital Adequacy	Well- Capitalized	Capital Amount		Capital Ratio	Minimum Capital Adequacy	Well- Capitalized
Capital One Financial Corp:
Common equity Tier 1 capital(2)	$	28,803	10.1%	4.5%	N/A	$	29,544	11.1%	4.5%	N/A
Tier 1 capital(3)	33,162		11.6	6.0	6.0%	32,838		12.4	6.0	6.0%
Total capital(4)	40,817		14.3	8.0	10.0	38,838		14.6	8.0	10.0
Tier 1 leverage(5)	33,162		9.9	4.0	N/A	32,838		10.6	4.0	N/A
Supplementary leverage(6)	33,162		8.6	N/A	N/A	32,838		9.2	N/A	N/A
Capital One Bank (USA), N.A.:
Common equity Tier 1 capital(2)	$	11,568	12.0%	4.5%	6.5%	$	10,644	12.2%	4.5%	6.5%
Tier 1 capital(3)	11,568		12.0	6.0	8.0	10,644		12.2	6.0	8.0
Total capital(4)	14,230		14.8	8.0	10.0	13,192		15.2	8.0	10.0
Tier 1 leverage(5)	11,568		10.8	4.0	5.0	10,644		10.8	4.0	5.0
Supplementary leverage(6)	11,568		8.9	N/A	N/A	10,644		9.0	N/A	N/A
Capital One, N.A.:
Common equity Tier 1 capital(2)	$	20,670	10.6%	4.5%	6.5%	$	21,765	11.8%	4.5%	6.5%
Tier 1 capital(3)	20,670		10.6	6.0	8.0	21,765		11.8	6.0	8.0
Total capital(4)	23,117		11.8	8.0	10.0	23,832		12.9	8.0	10.0
Tier 1 leverage(5)	20,670		7.7	4.0	5.0	21,765		8.8	4.0	5.0
Supplementary leverage(6)	20,670		6.9	N/A	N/A	21,765		7.9	N/A	N/A

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⁽¹⁾  Capital ratios are calculated based on the Basel III Standardized Approach framework, subject to applicable transition provisions,such as the inclusion of the unrealized gains and losses on securities available for sale included in AOCI and adjustments related to intangible assets other than goodwill. The inclusion of AOCI and the adjustments related to intangible assets are phased-in at 40% for 2015, 60% for 2016, 80% for 2017 and 100% for 2018. Capital ratios that are not applicable are denoted by “N/A.”

⁽²⁾   Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.

⁽³⁾   Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.

⁽⁴⁾   Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.

⁽⁵⁾   Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.

⁽⁶⁾  Supplementary leverage ratio (“SLR”) is a regulatory capital measure calculated based on Tier 1 capital divided by total leverage exposure.

The Company exceeded the minimum capital requirements and each of the Banks exceeded the minimum regulatory requirements and were well-capitalized under PCA requirements as of both December 31, 2016 and 2015.

Regulatory restrictions exist that limit the ability of the Banks to transfer funds to our BHC. As of December 31, 2016, funds available for dividend payments from COBNA and CONA were $3.9 billion and $1.0 billion, respectively. Applicable provisions that may be contained in our borrowing agreements or the borrowing agreements of our subsidiaries may limit our subsidiaries’ ability to pay dividends to us or our ability to pay dividends to our stockholders.