8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

FORM 8-K

____________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

January 21, 2020

Date of Report (Date of earliest event reported)

____________________________________

CAPITAL ONE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

____________________________________

Delaware		001-13300	54-1719854
(State or other jurisdiction of incorporation)		(Commission File Number)	(IRS Employer Identification No.)
1680 Capital One Drive,
McLean,	Virginia		22102
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (703) 720-1000

(Not applicable)

(Former name or former address, if changed since last report)

____________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock (par value $.01 per share)	COF	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B	COF PRP	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series F	COF PRF	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series G	COF PRG	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series H	COF PRH	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series I	COF PRI	New York Stock Exchange
0.800% Senior Notes Due 2024	COF24	New York Stock Exchange
1.650% Senior Notes Due 2029	COF29	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On January 21, 2020, Capital One Financial Corporation (the “Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 2019. Copies of the Company’s press release and financial supplement are attached and furnished herewith as Exhibits 99.1 and 99.2 to this Form 8-K and are incorporated herein by reference.

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

1

Item 9.01.    Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated January 21, 2020 - Fourth Quarter 2019
99.2	Financial Supplement - Fourth Quarter 2019
104	The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

Earnings Conference Call Webcast Information.

The Company will hold an earnings conference call on January 21, 2020 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). Under “About,” choose “Investors” to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. A replay of the webcast will be archived on the Company’s website through February 4, 2020 at 5:00 PM Eastern Time.

2

SIGNATURE

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

	CAPITAL ONE FINANCIAL CORPORATION
Date: January 21, 2020	By:	/s/ TIMOTHY P. GOLDEN
		Timothy P. Golden
		Controller and Principal Accounting Officer

3

EX-99.1

Capital One Fourth Quarter 2019 Earnings

Page 1

Exhibit 99.1

News Release

Contacts:
Investor Relations		Media Relations
Jeff Norris	Danielle Dietz	Sie Soheili	Tatiana Stead
703.720.2455	703.720.2455	703.720.3929	703.720.2352

FOR IMMEDIATE RELEASE: January 21, 2020

Capital One Reports Fourth Quarter2019 Net Income of $1.2 billion,or $2.25 per share

Excluding adjusting items, Fourth Quarter2019 Net Income of $2.49 per share⁽¹⁾ 

McLean, Va. (January 21, 2020) – Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2019 of $1.2 billion, or $2.25 per diluted common share, compared with net income of $1.3 billion, or $2.69 per diluted common share in the third quarter of 2019, and with net income of $1.3 billion, or $2.48 per diluted common share in the fourth quarter of 2018. Excluding adjusting items, net income for the fourth quarter of 2019 was $2.49 per diluted common share⁽¹⁾.

“In the fourth quarter and for the full year 2019, Capital One continued to post solid results as we invest to grow and to drive our digital transformation,” said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. “As the many benefits from our technology transformation continue and increase, we are well positioned to succeed in a rapidly changing marketplace.”

Adjusting items in the fourth quarter of 2019, which are excluded from diluted earnings per share (EPS), efficiency ratio and operating efficiency ratio metrics (see Table 15 in our Financial Supplement for additional information):

	Pre-Tax		Diluted EPS
(Dollars in millions, except per share data)	Impact		Impact
Initial allowance build on acquired Walmart portfolio	$	84	$	0.13
Walmart launch and related integration expenses	48		0.08
Cybersecurity Incident expenses, net of insurance	16		0.03

All comparisons below are for the fourth quarter of 2019 compared with the third quarter of 2019 unless otherwise noted.

Fourth Quarter2019 Income Statement Summary:

• Total net revenue increased7 percent to $7.4 billion.

• Total non-interest expense increased7 percent to $4.2 billion:

◦ 42 percent increase in marketing.

⁽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, both in the current period and across periods. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.

Capital One Fourth Quarter 2019 Earnings

Page 2

◦ 2 percent increase in operating expenses.

• Pre-provision earnings increased6 percent to $3.3 billion⁽²⁾.

• Provision for credit losses increased31 percent to $1.8 billion:

◦ Net charge-offs of $1.7 billion.

◦ $135 million reserve build.

• Net interest margin of 6.95 percent, increased22 basis points.

• Efficiency ratio of 56.03 percent.

◦Efficiency ratio excluding adjusting items of 55.16 percent⁽¹⁾.

• Operating efficiency ratio of 46.47 percent.

◦Operating efficiency ratio excluding adjusting items of 45.60 percent⁽¹⁾.

Fourth Quarter2019 Balance Sheet Summary:

• Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.2 percent at December 31, 2019.

• Period-end loans held for investment in the quarter increased$16.5 billion, or 7 percent, to $265.8 billion.

◦ Credit Card period-end loans increased$14.6 billion, or 13 percent, to $128.2 billion.

• Domestic Card period-end loans increased$13.9 billion, or 13 percent, to $118.6 billion.

◦ Consumer Banking period-end loans increased$1.1 billion, or 2 percent, to $63.1 billion.

• Auto period-end loans increased$1.1 billion, or 2 percent, to $60.4 billion.

◦ Commercial Banking period-end loans increased$849 million, or 1 percent, to $74.5 billion.

• Average loans held for investment in the quarter increased$12.7 billion, or 5 percent, to $258.9 billion.

◦ Credit Card average loans increased$9.7 billion, or 9 percent, to $122.1 billion.

• Domestic Card average loans increased$9.5 billion, or 9 percent, to $113.0 billion.

◦ Consumer Banking average loans increased$1.3 billion, or 2 percent, to $62.6 billion.

▪ Auto average loans increased$1.4 billion, or 2 percent, to $59.9 billion.

◦Commercial Banking average loans increased$1.7 billion, or 2 percent, to $74.2 billion.

• Period-end total deposits increased$5.5 billion, or 2 percent, to $262.7 billion, while average deposits increased$5.0 billion, or 2 percent, to $260.0 billion.

• Interest-bearing deposits rate paid decreased14 basis points to 1.41 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, both in the current period and across periods. 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.

Capital One Fourth Quarter 2019 Earnings

Page 3

All comparisons below are for the full year of 2019 compared with the full year of 2018 unless otherwise noted.

2019 Full Year Income Statement Summary:

• Total net revenue increased 2 percent to $28.6 billion.

• Total non-interest expense increased 4 percent to $15.5 billion:

◦ 5 percent increase in marketing.

◦ 4 percent increase in operating expenses.

• Pre-provision earnings remained flat at $13.1 billion⁽²⁾.

• Provision for credit losses increased6 percent to $6.2 billion.

• Efficiency ratio of 54.15 percent.

◦ Efficiency ratio excluding adjusting items was 52.67 percent⁽¹⁾.

• Operating efficiency ratio of 46.20 percent.

◦ Operating efficiency ratio excluding adjusting items was 44.76 percent⁽¹⁾.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 21, 2020 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). Under “About,” 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 February 4, 2020 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, 2018 and the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019.

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 $262.7 billion in deposits and $390.4 billion in total assets as of December 31, 2019. 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.

###

⁽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, both in the current period and across periods. 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.

EX-99.2

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement⁽¹⁾⁽²⁾ 

Fourth Quarter2019

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	5
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	7
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	8
	Table 7:	Loan Information and Performance Statistics	9
	Table 8:	Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity	11
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	12
	Table 10:	Financial & Statistical Summary—Credit Card Business	13
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	15
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	16
	Table 13:	Financial & Statistical Summary—Other and Total	17
Other
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	18
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	19

__________

⁽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 Annual Report on Form 10-K for the period ended December 31, 2019 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

																2019 Q4 vs.				Year Ended December 31,
(Dollars in millions, except per share data and as noted)	2019			2019			2019			2019			2018			2019		2018								2019 vs.
	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Income Statement
Net interest income	$	6,066		$	5,737		$	5,746		$	5,791		$	5,820		6	%	4	%	$	23,340		$	22,875		2	%
Non-interest income	1,361			1,222			1,378			1,292			1,193			11		14		5,253			5,201			1
Total net revenue(1)	7,427			6,959			7,124			7,083			7,013			7		6		28,593			28,076			2
Provision for credit losses	1,818			1,383			1,342			1,693			1,638			31		11		6,236			5,856			6
Non-interest expense:
Marketing	710			501			546			517			831			42		(15	)	2,274			2,174			5
Operating expense	3,451			3,371			3,233			3,154			3,301			2		5		13,209			12,728			4
Total non-interest expense	4,161			3,872			3,779			3,671			4,132			7		1		15,483			14,902			4
Income from continuing operations before income taxes	1,448			1,704			2,003			1,719			1,243			(15	)	16		6,874			7,318			(6	)
Income tax provision (benefit)	270			375			387			309			(21		)	(28	)	**		1,341			1,293			4
Income from continuing operations, net of tax	1,178			1,329			1,616			1,410			1,264			(11	)	(7	)	5,533			6,025			(8	)
Income (loss) from discontinued operations, net of tax	(2		)	4			9			2			(3		)	**		(33	)	13			(10		)	**
Net income	1,176			1,333			1,625			1,412			1,261			(12	)	(7	)	5,546			6,015			(8	)
Dividends and undistributed earnings allocated to participating securities(2)	(7		)	(10		)	(12		)	(12		)	(9		)	(30	)	(22	)	(41		)	(40		)	3
Preferred stock dividends	(97		)	(53		)	(80		)	(52		)	(80		)	83		21		(282		)	(265		)	6
Issuance cost for redeemed preferred stock(3)	(31		)	—			—			—			—			**		**		(31		)	—			**
Net income available to common stockholders	$	1,041		$	1,270		$	1,533		$	1,348		$	1,172		(18	)	(11	)	$	5,192		$	5,710		(9	)
Common Share Statistics
Basic earnings per common share:(2)
Net income from continuing operations	$	2.26		$	2.70		$	3.24		$	2.87		$	2.50		(16	)%	(10	)%	$	11.07		$	11.92		(7	)%
Income (loss) from discontinued operations	—			0.01			0.02			—			(0.01		)	**		**		0.03			(0.02		)	**
Net income per basic common share	$	2.26		$	2.71		$	3.26		$	2.87		$	2.49		(17	)	(9	)	$	11.10		$	11.90		(7	)
Diluted earnings per common share:(2)
Net income from continuing operations	$	2.25		$	2.68		$	3.22		$	2.86		$	2.49		(16	)	(10	)	$	11.02		$	11.84		(7	)
Income (loss) from discontinued operations	—			0.01			0.02			—			(0.01		)	**		**		0.03			(0.02		)	**
Net income per diluted common share	$	2.25		$	2.69		$	3.24		$	2.86		$	2.48		(16	)	(9	)	$	11.05		$	11.82		(7	)
Weighted-average common shares outstanding (in millions):
Basic	460.9			469.5			470.8			469.4			470.0			(2	)	(2	)	467.6			479.9			(3	)
Diluted	463.4			471.8			473.0			471.6			472.7			(2	)	(2	)	469.9			483.1			(3	)
Common shares outstanding (period-end, in millions)	456.6			465.7			470.3			469.6			467.7			(2	)	(2	)	456.6			467.7			(2	)
Dividends declared and paid per common share	$	0.40		$	0.40		$	0.40		$	0.40		$	0.40		—		—		$	1.60		$	1.60		—
Tangible book value per common share (period-end)(4)	83.72			80.46			77.65			72.86			69.20			4		21		83.72			69.20			21

1

											2019 Q4 vs.				Year Ended December 31,
(Dollars in millions)	2019		2019		2019		2019		2018		2019		2018						2019 vs.
	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2019		2018		2018
Balance Sheet (Period-End)
Loans held for investment	$	265,809	$	249,355	$	244,460	$	240,273	$	245,899	7	%	8	%	$	265,809	$	245,899	8	%
Interest-earning assets	355,202		344,643		339,160		340,071		341,293		3		4		355,202		341,293		4
Total assets	390,365		378,810		373,619		373,191		372,538		3		5		390,365		372,538		5
Interest-bearing deposits	239,209		234,084		231,161		230,199		226,281		2		6		239,209		226,281		6
Total deposits	262,697		257,148		254,535		255,107		249,764		2		5		262,697		249,764		5
Borrowings	55,697		50,149		49,233		50,358		58,905		11		(5	)	55,697		58,905		(5	)
Common equity	53,157		52,412		51,406		49,120		47,307		1		12		53,157		47,307		12
Total stockholders’ equity	58,011		58,235		55,767		53,481		51,668		—		12		58,011		51,668		12
Balance Sheet (Average Balances)
Loans held for investment	$	258,870	$	246,147	$	242,653	$	241,959	$	241,371	5	%	7	%	$	247,450	$	242,118	2	%
Interest-earning assets	349,150		340,949		338,026		337,793		334,714		2		4		341,510		332,738		3
Total assets	383,162		374,905		371,095		370,394		365,243		2		5		374,924		363,036		3
Interest-bearing deposits	236,250		232,063		230,452		227,572		222,827		2		6		231,609		221,760		4
Total deposits	260,040		255,082		253,634		251,410		247,663		2		5		255,065		247,117		3
Borrowings	51,442		49,413		49,982		53,055		53,994		4		(5	)	50,965		53,144		(4	)
Common equity	52,641		52,566		50,209		48,359		46,753		—		13		50,960		45,831		11
Total stockholders’ equity	58,148		57,245		54,570		52,720		51,114		2		14		55,690		50,192		11

2

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated

																2019 Q4 vs.				Year Ended December 31,
(Dollars in millions, except as noted)	2019			2019			2019			2019			2018			2019		2018								2019 vs.
	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Performance Metrics
Net interest income growth (period over period)	6		%	—			(1		)%	—			1		%	**		**		2		%	2		%	**
Non-interest income growth (period over period)	11			(11		)%	7			8		%	1			**		**		1			9			**
Total net revenue growth (period over period)	7			(2		)	1			1			1			**		**		2			3			**
Total net revenue margin(5)	8.51			8.16			8.43			8.39			8.38			35	bps	13	bps	8.37			8.44			(7	)bps
Net interest margin(6)	6.95			6.73			6.80			6.86			6.96			22		(1	)	6.83			6.87			(4	)
Return on average assets	1.23			1.42			1.74			1.52			1.38			(19	)	(15	)	1.48			1.66			(18	)
Return on average tangible assets(7)	1.28			1.48			1.82			1.59			1.44			(20	)	(16	)	1.54			1.73			(19	)
Return on average common equity(8)	7.93			9.63			12.14			11.13			10.05			(170	)	(212	)	10.16			12.48			(232	)
Return on average tangible common equity(9)	11.07			13.45			17.26			16.11			14.78			(238	)	(371	)	14.37			18.56			(419	)
Non-interest expense as a percentage of average loans held for investment	6.43			6.29			6.23			6.07			6.85			14		(42	)	6.26			6.15			11
Efficiency ratio(10)	56.03			55.64			53.05			51.83			58.92			39		(289	)	54.15			53.08			107
Operating efficiency ratio(11)	46.47			48.44			45.38			44.53			47.07			(197	)	(60	)	46.20			45.33			87
Effective income tax rate for continuing operations	18.6			22.0			19.3			18.0			(1.7		)	(340	)	**		19.5			17.7			180
Employees (period-end, in thousands)	51.9			52.1			50.7			48.8			47.6			—		9	%	51.9			47.6			9	%
Credit Quality Metrics
Allowance for loan and lease losses	$	7,208		$	7,037		$	7,133		$	7,313		$	7,220		2	%	—		$	7,208		$	7,220		—
Allowance as a percentage of loans held for investment	2.71		%	2.82		%	2.92		%	3.04		%	2.94		%	(11	)bps	(23	)bps	2.71		%	2.94		%	(23	)bps
Net charge-offs	$	1,683		$	1,462		$	1,508		$	1,599		$	1,610		15	%	5	%	$	6,252		$	6,112		2	%
Net charge-off rate(12)	2.60		%	2.38		%	2.48		%	2.64		%	2.67		%	22	bps	(7	)bps	2.53		%	2.52		%	1	bps
30+ day performing delinquency rate	3.51			3.28			3.15			3.23			3.62			23		(11	)	3.51			3.62			(11	)
30+ day delinquency rate	3.74			3.51			3.35			3.40			3.84			23		(10	)	3.74			3.84			(10	)
Capital Ratios(13)
Common equity Tier 1 capital	12.2		%	12.5		%	12.3		%	11.9		%	11.2		%	(30	)bps	100	bps	12.2		%	11.2		%	100	bps
Tier 1 capital	13.7			14.4			13.8			13.4			12.7			(70	)	100		13.7			12.7			100
Total capital	16.1			16.8			16.2			15.8			15.1			(70	)	100		16.1			15.1			100
Tier 1 leverage	11.7			11.9			11.4			11.0			10.7			(20	)	100		11.7			10.7			100
Tangible common equity (“TCE”)(14)	10.2			10.3			10.2			9.6			9.1			(10	)	110		10.2			9.1			110

3

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income

																2019 Q4 vs.				Year Ended December 31,
	2019			2019			2019			2019			2018			2019		2018								2019 vs.
(Dollars in millions, except per share data and as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Interest income:
Loans, including loans held for sale	$	6,682		$	6,429		$	6,383		$	6,368		$	6,358		4	%	5	%	$	25,862		$	24,728		5	%
Investment securities	544			583			629			655			627			(7	)	(13	)	2,411			2,211			9
Other	44			63			64			69			63			(30	)	(30	)	240			237			1
Total interest income	7,270			7,075			7,076			7,092			7,048			3		3		28,513			27,176			5
Interest expense:
Deposits	832			901			870			817			756			(8	)	10		3,420			2,598			32
Securitized debt obligations	118			123			139			143			138			(4	)	(14	)	523			496			5
Senior and subordinated notes	236			299			310			314			297			(21	)	(21	)	1,159			1,125			3
Other borrowings	18			15			11			27			37			20		(51	)	71			82			(13	)
Total interest expense	1,204			1,338			1,330			1,301			1,228			(10	)	(2	)	5,173			4,301			20
Net interest income	6,066			5,737			5,746			5,791			5,820			6		4		23,340			22,875			2
Provision for credit losses	1,818			1,383			1,342			1,693			1,638			31		11		6,236			5,856			6
Net interest income after provision for credit losses	4,248			4,354			4,404			4,098			4,182			(2	)	2		17,104			17,019			—
Non-interest income:
Interchange fees, net	811			790			820			758			743			3		9		3,179			2,823			13
Service charges and other customer-related fees	342			283			352			353			352			21		(3	)	1,330			1,585			(16	)
Net securities gains (losses)	(18		)	5			15			24			(20		)	**		(10	)	26			(209		)	**
Other	226			144			191			157			118			57		92		718			1,002			(28	)
Total non-interest income	1,361			1,222			1,378			1,292			1,193			11		14		5,253			5,201			1
Non-interest expense:
Salaries and associate benefits	1,652			1,605			1,558			1,573			1,345			3		23		6,388			5,727			12
Occupancy and equipment	565			519			521			493			610			9		(7	)	2,098			2,118			(1	)
Marketing	710			501			546			517			831			42		(15	)	2,274			2,174			5
Professional services	318			314			314			291			426			1		(25	)	1,237			1,145			8
Communications and data processing	346			312			329			303			326			11		6		1,290			1,260			2
Amortization of intangibles	28			25			29			30			43			12		(35	)	112			174			(36	)
Other(15)	542			596			482			464			551			(9	)	(2	)	2,084			2,304			(10	)
Total non-interest expense	4,161			3,872			3,779			3,671			4,132			7		1		15,483			14,902			4
Income from continuing operations before income taxes	1,448			1,704			2,003			1,719			1,243			(15	)	16		6,874			7,318			(6	)
Income tax provision (benefit)	270			375			387			309			(21		)	(28	)	**		1,341			1,293			4
Income from continuing operations, net of tax	1,178			1,329			1,616			1,410			1,264			(11	)	(7	)	5,533			6,025			(8	)
Income (loss) from discontinued operations, net of tax	(2		)	4			9			2			(3		)	**		(33	)	13			(10		)	**
Net income	1,176			1,333			1,625			1,412			1,261			(12	)	(7	)	5,546			6,015			(8	)
Dividends and undistributed earnings allocated to participating securities(2)	(7		)	(10		)	(12		)	(12		)	(9		)	(30	)	(22	)	(41		)	(40		)	3
Preferred stock dividends	(97		)	(53		)	(80		)	(52		)	(80		)	83		21		(282		)	(265		)	6
Issuance cost for redeemed preferred stock(3)	(31		)	—			—			—			—			**		**		(31		)	—			**
Net income available to common stockholders	$	1,041		$	1,270		$	1,533		$	1,348		$	1,172		(18	)	(11	)	$	5,192		$	5,710		(9	)
																2019 Q4 vs.				Year Ended December 31,
	2019			2019			2019			2019			2018			2019		2018								2019 vs.
(Dollars in millions, except per share data and as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Basic earnings per common share:(2)
Net income from continuing operations	$	2.26		$	2.70		$	3.24		$	2.87		$	2.50		(16	)%	(10	)%	$	11.07		$	11.92		(7	)%
Income (loss) from discontinued operations	—			0.01			0.02			—			(0.01		)	**		**		0.03			(0.02		)	**
Net income per basic common share	$	2.26		$	2.71		$	3.26		$	2.87		$	2.49		(17	)	(9	)	$	11.10		$	11.90		(7	)
Diluted earnings per common share:(2)
Net income from continuing operations	$	2.25		$	2.68		$	3.22		$	2.86		$	2.49		(16	)	(10	)	$	11.02		$	11.84		(7	)
Income (loss) from discontinued operations	—			0.01			0.02			—			(0.01		)	**		**		0.03			(0.02		)	**
Net income per diluted common share	$	2.25		$	2.69		$	3.24		$	2.86		$	2.48		(16	)	(9	)	$	11.05		$	11.82		(7	)
Weighted-average common shares outstanding (in millions):
Basic common shares	460.9			469.5			470.8			469.4			470.0			(2	)	(2	)	467.6			479.9			(3	)
Diluted common shares	463.4			471.8			473.0			471.6			472.7			(2	)	(2	)	469.9			483.1			(3	)

4

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets

																2019 Q4 vs.
	2019			2019			2019			2019			2018			2019		2018
(Dollars in millions)	Q4			Q3			Q2			Q1			Q4			Q3		Q4
Assets:
Cash and cash equivalents:
Cash and due from banks	$	4,129		$	4,452		$	5,184		$	4,572		$	4,768		(7	)%	(13	)%
Interest-bearing deposits and other short-term investments	9,278			12,668			9,927			12,897			8,418			(27	)	10
Total cash and cash equivalents	13,407			17,120			15,111			17,469			13,186			(22	)	2
Restricted cash for securitization investors	342			417			710			1,969			303			(18	)	13
Investment securities:
Securities available for sale	79,213			46,168			45,658			45,888			46,150			72		72
Securities held to maturity	—			33,894			35,475			36,503			36,771			(100	)	(100	)
Total investment securities	79,213			80,062			81,133			82,391			82,921			(1	)	(4	)
Loans held for investment:
Unsecuritized loans held for investment	231,992			215,892			211,556			208,591			211,702			7		10
Loans held in consolidated trusts	33,817			33,463			32,904			31,682			34,197			1		(1	)
Total loans held for investment	265,809			249,355			244,460			240,273			245,899			7		8
Allowance for loan and lease losses	(7,208		)	(7,037		)	(7,133		)	(7,313		)	(7,220		)	2		—
Net loans held for investment	258,601			242,318			237,327			232,960			238,679			7		8
Loans held for sale	400			1,245			1,829			905			1,192			(68	)	(66	)
Premises and equipment, net	4,378			4,311			4,243			4,205			4,191			2		4
Interest receivable	1,758			1,627			1,544			1,615			1,614			8		9
Goodwill	14,653			14,624			14,545			14,546			14,544			—		1
Other assets	17,613			17,086			17,177			17,131			15,908			3		11
Total assets	$	390,365		$	378,810		$	373,619		$	373,191		$	372,538		3		5

5

																2019 Q4 vs.
	2019			2019			2019			2019			2018			2019		2018
(Dollars in millions)	Q4			Q3			Q2			Q1			Q4			Q3		Q4
Liabilities:
Interest payable	$	439		$	370		$	437		$	382		$	458		19	%	(4	)%
Deposits:
Non-interest-bearing deposits	23,488			23,064			23,374			24,908			23,483			2		—
Interest-bearing deposits	239,209			234,084			231,161			230,199			226,281			2		6
Total deposits	262,697			257,148			254,535			255,107			249,764			2		5
Securitized debt obligations	17,808			18,910			16,959			19,273			18,307			(6	)	(3	)
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	314			464			359			335			352			(32	)	(11	)
Senior and subordinated notes	30,472			30,682			31,822			30,645			30,826			(1	)	(1	)
Other borrowings	7,103			93			93			105			9,420			**		(25	)
Total other debt	37,889			31,239			32,274			31,085			40,598			21		(7	)
Other liabilities	13,521			12,908			13,647			13,863			11,743			5		15
Total liabilities	332,354			320,575			317,852			319,710			320,870			4		4
Stockholders’ equity:
Preferred stock	0			0			0			0			0			—		—
Common stock	7			7			7			7			7			—		—
Additional paid-in capital, net	32,980			33,826			32,262			32,160			32,040			(3	)	3
Retained earnings	40,340			39,476			38,386			37,030			35,875			2		12
Accumulated other comprehensive income (loss)	1,156			453			170			(660		)	(1,263		)	155		**
Treasury stock, at cost	(16,472		)	(15,527		)	(15,058		)	(15,056		)	(14,991		)	6		10
Total stockholders’ equity	58,011			58,235			55,767			53,481			51,668			—		12
Total liabilities and stockholders’ equity	$	390,365		$	378,810		$	373,619		$	373,191		$	372,538		3		5

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 $365 million in Q4 2019, $330 million in Q3 2019, $318 million in Q2 2019, $376 million in Q1 2019 and $391 million in Q4 2018 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⁾  On December 2, 2019, we redeemed all outstanding shares of our fixed rate 6.25% non-cumulative perpetual preferred stock Series C and fixed rate 6.70% non-cumulative perpetual preferred stock Series D. The redemption reduced our net income available to common shareholders by $31 million in Q4 2019.

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

⁽⁶⁾  Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

⁽⁷⁾  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.

⁽⁸⁾  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.

⁽⁹⁾  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.

⁽¹⁰⁾  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.

⁽¹¹⁾  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.

⁽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 Q4 2019 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⁾  Includes $16 million of net Cybersecurity Incident expenses in Q4 2019, consisting of $23 million of expenses and $7 million of insurance recoveries; and $22 million of net Cybersecurity Incident expenses in Q3 2019, consisting of $49 million of expenses and $27 million of insurance recoveries.

** Not meaningful.

7

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

	2019 Q4						2019 Q3						2018 Q4
	Average Balance		Interest Income/ Expense		Yield/Rate		Average Balance		Interest Income/ Expense		Yield/Rate		Average Balance		Interest Income/ Expense		Yield/Rate
(Dollars in millions, except as noted)
Interest-earning assets:
Loans, including loans held for sale	$	259,855	$	6,682	10.29	%	$	247,419	$	6,429	10.39	%	$	242,534	$	6,358	10.49	%
Investment securities	79,104		544		2.75		80,762		583		2.88		83,391		627		3.01
Cash equivalents and other	10,191		44		1.70		12,768		63		2.00		8,789		63		2.87
Total interest-earning assets	$	349,150	$	7,270	8.33		$	340,949	$	7,075	8.30		$	334,714	$	7,048	8.42
Interest-bearing liabilities:
Interest-bearing deposits	$	236,250	$	832	1.41		$	232,063	$	901	1.55		$	222,827	$	756	1.36
Securitized debt obligations	18,339		118		2.58		16,750		123		2.94		18,312		138		2.99
Senior and subordinated notes	30,597		236		3.08		31,220		299		3.84		30,831		297		3.86
Other borrowings and liabilities	3,789		18		1.95		2,698		15		2.14		6,123		37		2.43
Total interest-bearing liabilities	$	288,975	$	1,204	1.67		$	282,731	$	1,338	1.89		$	278,093	$	1,228	1.77
Net interest income/spread			$	6,066	6.66				$	5,737	6.41				$	5,820	6.65
Impact of non-interest-bearing funding					0.29						0.32						0.31
Net interest margin					6.95	%					6.73	%					6.96	%

	Year Ended December 31,
	2019						2018
	Average Balance		Interest Income/ Expense		Yield/Rate		Average Balance		Interest Income/ Expense		Yield/Rate
(Dollars in millions, except as noted)
Interest-earning assets:
Loans, including loans held for sale	$	248,552	$	25,862	10.41	%	$	243,371	$	24,728	10.16	%
Investment securities	81,467		2,411		2.96		79,224		2,211		2.79
Cash equivalents and other	11,491		240		2.08		10,143		237		2.33
Total interest-earning assets	$	341,510	$	28,513	8.35		$	332,738	$	27,176	8.17
Interest-bearing liabilities:
Interest-bearing deposits	$	231,609	$	3,420	1.48		$	221,760	$	2,598	1.17
Securitized debt obligations	18,020		523		2.90		19,014		496		2.61
Senior and subordinated notes	30,821		1,159		3.76		31,295		1,125		3.60
Other borrowings and liabilities	3,369		71		2.12		4,028		82		2.04
Total interest-bearing liabilities	$	283,819	$	5,173	1.82		$	276,097	$	4,301	1.56
Net interest income/spread			$	23,340	6.53				$	22,875	6.61
Impact of non-interest-bearing funding					0.30						0.26
Net interest margin					6.83	%					6.87	%

8

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics

											2019 Q4 vs.				Year Ended December 31,
(Dollars in millions, except as noted)	2019 Q4		2019 Q3		2019 Q2		2019 Q1		2018 Q4		2019 Q3		2018 Q4		2019		2018		2019 vs. 2018
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card	$	118,606	$	104,664	$	102,959	$	101,052	$	107,350	13	%	10	%	$	118,606	$	107,350	10	%
International card businesses	9,630		9,017		9,182		8,784		9,011		7		7		9,630		9,011		7
Total credit card	128,236		113,681		112,141		109,836		116,361		13		10		128,236		116,361		10
Consumer banking:
Auto	60,362		59,278		57,556		56,444		56,341		2		7		60,362		56,341		7
Retail banking	2,703		2,737		2,771		2,804		2,864		(1	)	(6	)	2,703		2,864		(6	)
Total consumer banking	63,065		62,015		60,327		59,248		59,205		2		7		63,065		59,205		7
Commercial banking:
Commercial and multifamily real estate	30,245		30,009		29,861		28,984		28,899		1		5		30,245		28,899		5
Commercial and industrial	44,263		43,650		42,125		42,197		41,091		1		8		44,263		41,091		8
Total commercial lending	74,508		73,659		71,986		71,181		69,990		1		6		74,508		69,990		6
Small-ticket commercial real estate	—		—		6		8		343		**		**		—		343		**
Total commercial banking	74,508		73,659		71,992		71,189		70,333		1		6		74,508		70,333		6
Total loans held for investment	$	265,809	$	249,355	$	244,460	$	240,273	$	245,899	7		8		$	265,809	$	245,899	8
Loans Held for Investment (Average)
Credit card:
Domestic credit card	$	112,965	$	103,426	$	101,930	$	102,667	$	103,391	9	%	9	%	$	105,270	$	100,832	4	%
International card businesses	9,120		8,945		8,868		8,789		8,958		2		2		8,932		8,988		(1	)
Total credit card	122,085		112,371		110,798		111,456		112,349		9		9		114,202		109,820		4
Consumer banking:
Auto	59,884		58,517		57,070		56,234		56,469		2		6		57,938		55,610		4
Home loan(1)	—		—		—		—		—		**		**		—		6,266		**
Retail banking	2,712		2,752		2,788		2,831		2,873		(1	)	(6	)	2,770		3,075		(10	)
Total consumer banking	62,596		61,269		59,858		59,065		59,342		2		5		60,708		64,951		(7	)
Commercial banking:
Commercial and multifamily real estate	30,173		29,698		29,514		29,034		28,855		2		5		29,608		27,771		7
Commercial and industrial	44,016		42,807		42,476		42,132		40,476		3		9		42,863		39,188		9
Total commercial lending	74,189		72,505		71,990		71,166		69,331		2		7		72,471		66,959		8
Small-ticket commercial real estate	—		2		7		272		349		**		**		69		371		(81	)
Total commercial banking	74,189		72,507		71,997		71,438		69,680		2		6		72,540		67,330		8
Other loans	—		—		—		—		—		**		**		—		17		**
Total average loans held for investment	$	258,870	$	246,147	$	242,653	$	241,959	$	241,371	5		7		$	247,450	$	242,118	2

9

											2019 Q4 vs.				Year Ended December 31,
	2019 Q4		2019 Q3		2019 Q2		2019 Q1		2018 Q4		2019 Q3		2018 Q4		2019		2018		2019 vs. 2018
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card(2)	4.32	%	4.12	%	4.86	%	5.04	%	4.64	%	20	bps	(32	)bps	4.58	%	4.74	%	(16	)bps
International card businesses	4.22		3.78		3.63		3.20		4.22		44		—		3.71		3.19		52
Total credit card	4.31		4.09		4.76		4.90		4.61		22		(30	)	4.51		4.62		(11	)
Consumer banking:
Auto	1.90		1.60		1.09		1.44		1.98		30		(8	)	1.51		1.64		(13	)
Retail banking	2.77		2.55		2.42		2.56		2.56		22		21		2.57		2.26		31
Total consumer banking	1.93		1.64		1.15		1.49		2.01		29		(8	)	1.56		1.51		5
Commercial banking:
Commercial and multifamily real estate	—		0.02		—		—		(0.01	)	(2	)	1		—		0.01		(1	)
Commercial and industrial	0.60		0.55		0.15		0.13		0.17		5		43		0.36		0.14		22
Total commercial lending	0.36		0.33		0.09		0.08		0.10		3		26		0.22		0.08		14
Total commercial banking	0.35		0.33		0.09		0.08		0.10		2		25		0.22		0.08		14
Total net charge-offs	2.60		2.38		2.48		2.64		2.67		22		(7	)	2.53		2.52		1
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card(2)	3.93	%	3.71	%	3.40	%	3.72	%	4.04	%	22	bps	(11	)bps	3.93	%	4.04	%	(11	)bps
International card businesses	3.47		3.52		3.40		3.61		3.52		(5	)	(5	)	3.47		3.52		(5	)
Total credit card	3.89		3.69		3.40		3.71		4.00		20		(11	)	3.89		4.00		(11	)
Consumer banking:
Auto	6.88		6.47		6.10		5.78		6.95		41		(7	)	6.88		6.95		(7	)
Retail banking	1.02		1.01		0.93		0.84		1.01		1		1		1.02		1.01		1
Total consumer banking	6.63		6.23		5.87		5.55		6.67		40		(4	)	6.63		6.67		(4	)
Nonperforming Loans and Nonperforming Assets Rates(3)(4)
Credit card:
International card businesses	0.26	%	0.25	%	0.25	%	0.26	%	0.25	%	1	bps	1	bps	0.26	%	0.25	%	1	bps
Total credit card	0.02		0.02		0.02		0.02		0.02		—		—		0.02		0.02		—
Consumer banking:
Auto	0.81		0.73		0.64		0.57		0.80		8		1		0.81		0.80		1
Retail banking	0.87		0.91		1.02		1.10		1.04		(4	)	(17	)	0.87		1.04		(17	)
Total consumer banking	0.81		0.74		0.66		0.59		0.81		7		—		0.81		0.81		—
Commercial banking:
Commercial and multifamily real estate	0.12		0.12		0.14		0.24		0.29		—		(17	)	0.12		0.29		(17	)
Commercial and industrial	0.93		0.95		0.74		0.71		0.54		(2	)	39		0.93		0.54		39
Total commercial lending	0.60		0.61		0.49		0.52		0.44		(1	)	16		0.60		0.44		16
Total commercial banking	0.60		0.61		0.50		0.53		0.44		(1	)	16		0.60		0.44		16
Total nonperforming loans	0.37		0.37		0.32		0.31		0.33		—		4		0.37		0.33		4
Total nonperforming assets	0.39		0.40		0.34		0.33		0.35		(1	)	4		0.39		0.35		4

10

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity

	Three Months Ended December 31, 2019
	Credit Card									Consumer Banking
(Dollars in millions)	Domestic Card			International Card Businesses			Total Credit Card			Auto			Retail Banking			Total Consumer Banking			Commercial Banking			Total
Allowance for loan and lease losses:
Balance as of September 30, 2019	$	4,870		$	400		$	5,270		$	952		$	55		$	1,007		$	760		$	7,037
Charge-offs	(1,554		)	(133		)	(1,687		)	(511		)	(23		)	(534		)	(72		)	(2,293		)
Recoveries	335			38			373			227			4			231			6			610
Net charge-offs	(1,219		)	(95		)	(1,314		)	(284		)	(19		)	(303		)	(66		)	(1,683		)
Provision for loan and lease losses	1,346			75			1,421			316			18			334			81			1,836
Allowance build (release) for loan and lease losses	127			(20		)	107			32			(1		)	31			15			153
Other changes(5)	—			18			18			—			—			—			—			18
Balance as of December 31, 2019	4,997			398			5,395			984			54			1,038			775			7,208
Reserve for unfunded lending commitments:
Balance as of September 30, 2019	—			—			—			—			4			4			149			153
Provision (benefit) for losses on unfunded lending commitments	—			—			—			—			1			1			(19		)	(18		)
Balance as of December 31, 2019	—			—			—			—			5			5			130			135
Combined allowance and reserve as of December 31, 2019	$	4,997		$	398		$	5,395		$	984		$	59		$	1,043		$	905		$	7,343

	Year Ended December 31, 2019
	Credit Card									Consumer Banking
(Dollars in millions)	Domestic Card			International Card Businesses			Total Credit Card			Auto			Retail Banking			Total Consumer Banking			Commercial Banking			Total
Allowance for loan and lease losses:
Balance as of December 31, 2018	$	5,144		$	391		$	5,535		$	990		$	58		$	1,048		$	637		$	7,220
Charge-offs	(6,189		)	(522		)	(6,711		)	(1,829		)	(88		)	(1,917		)	(181		)	(8,809		)
Recoveries	1,371			191			1,562			953			17			970			25			2,557
Net charge-offs	(4,818		)	(331		)	(5,149		)	(876		)	(71		)	(947		)	(156		)	(6,252		)
Provision for loan and lease losses	4,671			321			4,992			870			67			937			294			6,223
Allowance build (release) for loan and lease losses	(147		)	(10		)	(157		)	(6		)	(4		)	(10		)	138			(29		)
Other changes(5)	—			17			17			—			—			—			—			17
Balance as of December 31, 2019	4,997			398			5,395			984			54			1,038			775			7,208
Reserve for unfunded lending commitments:
Balance as of December 31, 2018	—			—			—			—			4			4			118			122
Provision for losses on unfunded lending commitments	—			—			—			—			1			1			12			13
Balance as of December 31, 2019	—			—			—			—			5			5			130			135
Combined allowance and reserve as of December 31, 2019	$	4,997		$	398		$	5,395		$	984		$	59		$	1,043		$	905		$	7,343

11

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results

	Three Months Ended December 31, 2019												Year Ended December 31, 2019
(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	$	3,794	$	1,662	$	494	$	116		$	6,066		$	14,461	$	6,732	$	1,983	$	164		$	23,340
Non-interest income (loss)	1,030		152		223		(44		)	1,361			3,888		643		831		(109		)	5,253
Total net revenue	4,824		1,814		717		72			7,427			18,349		7,375		2,814		55			28,593
Provision for credit losses	1,421		335		62		—			1,818			4,992		938		306		—			6,236
Non-interest expense	2,487		1,110		441		123			4,161			9,271		4,091		1,699		422			15,483
Income (loss) from continuing operations before income taxes	916		369		214		(51		)	1,448			4,086		2,346		809		(367		)	6,874
Income tax provision (benefit)	212		86		50		(78		)	270			959		547		188		(353		)	1,341
Income (loss) from continuing operations, net of tax	$	704	$	283	$	164	$	27		$	1,178		$	3,127	$	1,799	$	621	$	(14	)	$	5,533
	Three Months Ended September 30, 2019
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking(6)		Other(6)			Total
Net interest income	$	3,546	$	1,682	$	486	$	23		$	5,737
Non-interest income (loss)	870		165		221		(34		)	1,222
Total net revenue (loss)	4,416		1,847		707		(11		)	6,959
Provision for credit losses	1,087		203		93		—			1,383
Non-interest expense	2,360		985		414		113			3,872
Income (loss) from continuing operations before income taxes	969		659		200		(124		)	1,704
Income tax provision (benefit)	235		154		46		(60		)	375
Income (loss) from continuing operations, net of tax	$	734	$	505	$	154	$	(64	)	$	1,329
	Three Months Ended December 31, 2018												Year Ended December 31, 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	$	3,617	$	1,689	$	508	$	6		$	5,820		$	14,167	$	6,549	$	2,044	$	115		$	22,875
Non-interest income (loss)	886		159		159		(11		)	1,193			3,520		663		744		274			5,201
Total net revenue (loss)	4,503		1,848		667		(5		)	7,013			17,687		7,212		2,788		389			28,076
Provision (benefit) for credit losses	1,326		303		9		—			1,638			4,984		838		83		(49		)	5,856
Non-interest expense	2,496		1,085		434		117			4,132			8,542		4,027		1,654		679			14,902
Income (loss) from continuing operations before income taxes	681		460		224		(122		)	1,243			4,161		2,347		1,051		(241		)	7,318
Income tax provision (benefit)	160		107		52		(340		)	(21		)	970		547		245		(469		)	1,293
Income from continuing operations, net of tax	$	521	$	353	$	172	$	218		$	1,264		$	3,191	$	1,800	$	806	$	228		$	6,025

12

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business

																2019 Q4 vs.				Year Ended December 31,
	2019			2019			2019			2019			2018			2019		2018								2019 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Credit Card
Earnings:
Net interest income	$	3,794		$	3,546		$	3,531		$	3,590		$	3,617		7	%	5	%	$	14,461		$	14,167		2	%
Non-interest income	1,030			870			1,038			950			886			18		16		3,888			3,520			10
Total net revenue	4,824			4,416			4,569			4,540			4,503			9		7		18,349			17,687			4
Provision for credit losses	1,421			1,087			1,095			1,389			1,326			31		7		4,992			4,984			—
Non-interest expense	2,487			2,360			2,253			2,171			2,496			5		—		9,271			8,542			9
Income from continuing operations before income taxes	916			969			1,221			980			681			(5	)	35		4,086			4,161			(2	)
Income tax provision	212			235			283			229			160			(10	)	33		959			970			(1	)
Income from continuing operations, net of tax	$	704		$	734		$	938		$	751		$	521		(4	)	35		$	3,127		$	3,191		(2	)
Selected performance metrics:
Period-end loans held for investment	$	128,236		$	113,681		$	112,141		$	109,836		$	116,361		13		10		$	128,236		$	116,361		10
Average loans held for investment	122,085			112,371			110,798			111,456			112,349			9		9		114,202			109,820			4
Average yield on loans held for investment(8)	15.02		%	15.55		%	15.66		%	15.77		%	15.63		%	(53	)bps	(61	)bps	15.49		%	15.43		%	6	bps
Total net revenue margin(9)	15.80			15.72			16.50			16.29			16.03			8		(23	)	16.07			16.11			(4	)
Net charge-off rate	4.31			4.09			4.76			4.90			4.61			22		(30	)	4.51			4.62			(11	)
30+ day performing delinquency rate	3.89			3.69			3.40			3.71			4.00			20		(11	)	3.89			4.00			(11	)
30+ day delinquency rate	3.91			3.71			3.42			3.72			4.01			20		(10	)	3.91			4.01			(10	)
Nonperforming loan rate(3)	0.02			0.02			0.02			0.02			0.02			—		—		0.02			0.02			—
Purchase volume(10)	$	116,631		$	108,034		$	106,903		$	93,197		$	105,696		8	%	10	%	$	424,765		$	387,102		10	%

13

																2019 Q4 vs.				Year Ended December 31,
	2019			2019			2019			2019			2018			2019		2018								2019 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Domestic Card
Earnings:
Net interest income	$	3,473		$	3,299		$	3,220		$	3,273		$	3,309		5	%	5	%	$	13,265		$	12,926		3	%
Non-interest income	962			878			971			873			828			10		16		3,684			3,239			14
Total net revenue	4,435			4,177			4,191			4,146			4,137			6		7		16,949			16,165			5
Provision for credit losses	1,346			1,010			1,024			1,291			1,229			33		10		4,671			4,653			—
Non-interest expense	2,249			2,076			2,034			1,949			2,216			8		1		8,308			7,621			9
Income from continuing operations before income taxes	840			1,091			1,133			906			692			(23	)	21		3,970			3,891			2
Income tax provision	196			254			264			211			162			(23	)	21		925			907			2
Income from continuing operations, net of tax	$	644		$	837		$	869		$	695		$	530		(23	)	22		$	3,045		$	2,984		2
Selected performance metrics:
Period-end loans held for investment	$	118,606		$	104,664		$	102,959		$	101,052		$	107,350		13		10		$	118,606		$	107,350		10
Average loans held for investment	112,965			103,426			101,930			102,667			103,391			9		9		105,270			100,832			4
Average yield on loans held for investment(8)	14.91		%	15.74		%	15.60		%	15.69		%	15.58		%	(83	)bps	(67	)bps	15.47		%	15.36		%	11	bps
Total net revenue margin(9)	15.70			16.15			16.45			16.15			16.01			(45	)	(31	)	16.10			16.03			7
Net charge-off rate(2)	4.32			4.12			4.86			5.04			4.64			20		(32	)	4.58			4.74			(16	)
30+ day performing delinquency rate(2)	3.93			3.71			3.40			3.72			4.04			22		(11	)	3.93			4.04			(11	)
Purchase volume(10)	$	107,154		$	99,087		$	98,052		$	85,738		$	96,818		8	%	11	%	$	390,032		$	354,158		10	%
Refreshed FICO scores:(11)
Greater than 660	67		%	68		%	68		%	66		%	67		%	(1	)	—		67		%	67		%	—
660 or below	33			32			32			34			33			1		—		33			33			—
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%

14

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business

																2019 Q4 vs.				Year Ended December 31,
	2019			2019			2019			2019			2018			2019		2018								2019 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Consumer Banking
Earnings:
Net interest income	$	1,662		$	1,682		$	1,709		$	1,679		$	1,689		(1	)%	(2	)%	$	6,732		$	6,549		3	%
Non-interest income	152			165			166			160			159			(8	)	(4	)	643			663			(3	)
Total net revenue	1,814			1,847			1,875			1,839			1,848			(2	)	(2	)	7,375			7,212			2
Provision for credit losses	335			203			165			235			303			65		11		938			838			12
Non-interest expense	1,110			985			1,002			994			1,085			13		2		4,091			4,027			2
Income from continuing operations before income taxes	369			659			708			610			460			(44	)	(20	)	2,346			2,347			—
Income tax provision	86			154			165			142			107			(44	)	(20	)	547			547			—
Income from continuing operations, net of tax	$	283		$	505		$	543		$	468		$	353		(44	)	(20	)	$	1,799		$	1,800		—
Selected performance metrics:
Period-end loans held for investment(1)	$	63,065		$	62,015		$	60,327		$	59,248		$	59,205		2		7		$	63,065		$	59,205		7
Average loans held for investment(1)	62,596			61,269			59,858			59,065			59,342			2		5		60,708			64,951			(7	)
Average yield on loans held for investment(8)	8.51		%	8.47		%	8.36		%	8.15		%	8.14		%	4	bps	37	bps	8.37		%	7.54		%	83	bps
Auto loan originations	$	7,527		$	8,175		$	7,327		$	6,222		$	5,932		(8	)%	27	%	$	29,251		$	26,276		11	%
Period-end deposits	213,099			206,423			205,220			205,439			198,607			3		7		213,099			198,607			7
Average deposits	209,783			204,933			204,164			201,072			196,348			2		7		205,012			193,053			6
Average deposits interest rate	1.20		%	1.31		%	1.26		%	1.18		%	1.10		%	(11	)bps	10	bps	1.24		%	0.95		%	29	bps
Net charge-off rate	1.93			1.64			1.15			1.49			2.01			29		(8	)	1.56			1.51			5
30+ day performing delinquency rate	6.63			6.23			5.87			5.55			6.67			40		(4	)	6.63			6.67			(4	)
30+ day delinquency rate	7.34			6.86			6.41			6.02			7.36			48		(2	)	7.34			7.36			(2	)
Nonperforming loan rate(3)	0.81			0.74			0.66			0.59			0.81			7		—		0.81			0.81			—
Nonperforming asset rate(4)	0.91			0.83			0.75			0.68			0.90			8		1		0.91			0.90			1
Auto—At origination FICO scores:(12)
Greater than 660	48		%	48		%	49		%	49		%	50		%	—		(2	)%	48		%	50		%	(2	)%
621 - 660	20			20			19			19			19			—		1		20			19			1
620 or below	32			32			32			32			31			—		1		32			31			1
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%

15

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business

																2019 Q4 vs.				Year Ended December 31,
	2019			2019			2019			2019			2018			2019		2018								2019 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Commercial Banking
Earnings:
Net interest income	$	494		$	486		$	514		$	489		$	508		2	%	(3	)%	$	1,983		$	2,044		(3	)%
Non-interest income	223			221			200			187			159			1		40		831			744			12
Total net revenue(6)(7)	717			707			714			676			667			1		7		2,814			2,788			1
Provision for credit losses	62			93			82			69			9			(33	)	**		306			83			**
Non-interest expense	441			414			427			417			434			7		2		1,699			1,654			3
Income from continuing operations before income taxes	214			200			205			190			224			7		(4	)	809			1,051			(23	)
Income tax provision	50			46			48			44			52			9		(4	)	188			245			(23	)
Income from continuing operations, net of tax	$	164		$	154		$	157		$	146		$	172		6		(5	)	$	621		$	806		(23	)
Selected performance metrics:
Period-end loans held for investment	$	74,508		$	73,659		$	71,992		$	71,189		$	70,333		1		6		$	74,508		$	70,333		6
Average loans held for investment	74,189			72,507			71,997			71,438			69,680			2		6		72,540			67,330			8
Average yield on loans held for investment(6)(8)	4.22		%	4.45		%	4.75		%	4.62		%	4.67		%	(23	)bps	(45	)bps	4.51		%	4.46		%	5	bps
Period-end deposits	$	32,134		$	30,923		$	30,761		$	31,248		$	29,480		4	%	9	%	$	32,134		$	29,480		9	%
Average deposits	32,034			30,693			31,364			30,816			30,680			4		4		31,229			32,175			(3	)
Average deposits interest rate	1.10		%	1.25		%	1.28		%	1.11		%	0.95		%	(15	)bps	15	bps	1.18		%	0.72		%	46	bps
Net charge-off rate	0.35			0.33			0.09			0.08			0.10			2		25		0.22			0.08			14
Nonperforming loan rate(3)	0.60			0.61			0.50			0.53			0.44			(1	)	16		0.60			0.44			16
Nonperforming asset rate(4)	0.60			0.61			0.50			0.53			0.45			(1	)	15		0.60			0.45			15
Risk category:(13)
Noncriticized	$	71,848		$	71,144		$	69,390		$	68,594		$	68,043		1	%	6	%	$	71,848		$	68,043		6	%
Criticized performing	2,181			2,035			2,211			2,094			1,848			7		18		2,181			1,848			18
Criticized nonperforming	448			449			360			378			312			—		44		448			312			44
PCI loans	31			31			31			123			130			—		(76	)	31			130			(76	)
Total commercial banking loans	$	74,508		$	73,659		$	71,992		$	71,189		$	70,333		1		6		$	74,508		$	70,333		6
Risk category as a percentage of period-end loans held for investment:(13)
Noncriticized	96.5		%	96.6		%	96.4		%	96.4		%	96.8		%	(10	)bps	(30	)bps	96.5		%	96.8		%	(30	)bps
Criticized performing	2.9			2.8			3.1			2.9			2.6			10		30		2.9			2.6			30
Criticized nonperforming	0.6			0.6			0.5			0.5			0.4			—		20		0.6			0.4			20
PCI loans	—			—			—			0.2			0.2			—		(20	)	—			0.2			(20	)
Total commercial banking loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%					100.0		%	100.0		%

16

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total

																2019 Q4 vs.				Year Ended December 31,
	2019			2019			2019			2019			2018			2019		2018								2019 vs.
(Dollars in millions)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2019			2018			2018
Other
Earnings:
Net interest income (loss)	$	116		$	23		$	(8	)	$	33		$	6		**		**		$	164		$	115		43	%
Non-interest income (loss)(1)	(44		)	(34		)	(26		)	(5		)	(11		)	29	%	**		(109		)	274			**
Total net revenue (loss)(6)(7)	72			(11		)	(34		)	28			(5		)	**		**		55			389			(86	)
Benefit for credit losses(1)	—			—			—			—			—			**		**		—			(49		)	**
Non-interest expense(14)(15)	123			113			97			89			117			9		5	%	422			679			(38	)
Loss from continuing operations before income taxes	(51		)	(124		)	(131		)	(61		)	(122		)	(59	)	(58	)	(367		)	(241		)	52
Income tax benefit	(78		)	(60		)	(109		)	(106		)	(340		)	30		(77	)	(353		)	(469		)	(25	)
Income (loss) from continuing operations, net of tax	$	27		$	(64	)	$	(22	)	$	45		$	218		**		(88	)	$	(14	)	$	228		**
Selected performance metrics:
Period-end deposits	$	17,464		$	19,802		$	18,554		$	18,420		$	21,677		(12	)	(19	)	$	17,464		$	21,677		(19	)
Average deposits	18,223			19,456			18,106			19,522			20,635			(6	)	(12	)	18,824			21,889			(14	)
Total
Earnings:
Net interest income	$	6,066		$	5,737		$	5,746		$	5,791		$	5,820		6	%	4	%	$	23,340		$	22,875		2	%
Non-interest income	1,361			1,222			1,378			1,292			1,193			11		14		5,253			5,201			1
Total net revenue	7,427			6,959			7,124			7,083			7,013			7		6		28,593			28,076			2
Provision for credit losses	1,818			1,383			1,342			1,693			1,638			31		11		6,236			5,856			6
Non-interest expense	4,161			3,872			3,779			3,671			4,132			7		1		15,483			14,902			4
Income from continuing operations before income taxes	1,448			1,704			2,003			1,719			1,243			(15	)	16		6,874			7,318			(6	)
Income tax provision (benefit)	270			375			387			309			(21		)	(28	)	**		1,341			1,293			4
Income from continuing operations, net of tax	$	1,178		$	1,329		$	1,616		$	1,410		$	1,264		(11	)	(7	)	$	5,533		$	6,025		(8	)
Selected performance metrics:
Period-end loans held for investment	$	265,809		$	249,355		$	244,460		$	240,273		$	245,899		7		8		$	265,809		$	245,899		8
Average loans held for investment	258,870			246,147			242,653			241,959			241,371			5		7		247,450			242,118			2
Period-end deposits	262,697			257,148			254,535			255,107			249,764			2		5		262,697			249,764			5
Average deposits	260,040			255,082			253,634			251,410			247,663			2		5		255,065			247,117			3

17

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

⁽¹⁾  In 2018, we sold all of our consumer home loan portfolio and recognized a net gain of approximately $499 million in the Other category, including a benefit for credit losses of $46 million.

⁽²⁾  On October 11, 2019, we completed the acquisition of the existing portfolio of Walmart’s cobrand and private label credit card receivables. This acquisition reduced the domestic credit card net charge-off rates by 29 basis points for the fourth quarter and 8 basis points for the year ended December 31, 2019, and increased the domestic credit card 30+ day performing delinquency rate by 17 basis points as of December 31, 2019.

⁽³⁾  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.

⁽⁴⁾  Nonperforming assets consist of nonperforming loans, repossessed assets 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, repossessed assets and other foreclosed assets.

⁽⁵⁾  Represents foreign currency translation adjustments.

⁽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 of 21% and state taxes where applicable, with offsetting reductions to the Other category.

⁽⁷⁾  In the first quarter of 2019, we made a change in how revenue is measured in our Commercial Banking business by revising the allocation of tax benefits on certain tax-advantaged investments. As such, prior period results have been recast to conform with the current period presentation. The result of this measurement change reduced the previously reported total net revenue in our Commercial Banking business by $20 million and $108 million for the fourth quarter and year ended December 31, 2018, with an offsetting increase in 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.

⁽¹⁵⁾  Includes $16 million of net Cybersecurity Incident expenses in Q4 2019, consisting of $23 million of expenses and $7 million of insurance recoveries; and $22 million of net Cybersecurity Incident expenses in Q3 2019, consisting of $49 million of expenses and $27 million of insurance recoveries.

** Not meaningful.

18

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)	December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018
Regulatory Capital Metrics
Common equity excluding AOCI	$	52,001		$	51,959		$	51,236		$	49,781		$	48,570
Adjustments:
AOCI(2)	1,156			453			170			(660		)	(1,263		)
Goodwill, net of related deferred tax liabilities	(14,465		)	(14,439		)	(14,365		)	(14,369		)	(14,373		)
Intangible assets, net of related deferred tax liabilities	(170		)	(180		)	(194		)	(223		)	(254		)
Other	(360		)	(588		)	(401		)	113			391
Common equity Tier 1 capital	$	38,162		$	37,205		$	36,446		$	34,642		$	33,071
Tier 1 capital	$	43,015		$	43,028		$	40,806		$	39,002		$	37,431
Total capital(3)	50,350			50,174			47,919			46,042			44,645
Risk-weighted assets	313,308			298,130			295,255			291,483			294,950
Adjusted average assets(4)	368,511			360,266			356,518			355,781			350,606
Capital Ratios
Common equity Tier 1 capital(5)	12.2		%	12.5		%	12.3		%	11.9		%	11.2		%
Tier 1 capital(6)	13.7			14.4			13.8			13.4			12.7
Total capital(7)	16.1			16.8			16.2			15.8			15.1
Tier 1 leverage(4)	11.7			11.9			11.4			11.0			10.7
Tangible common equity (“TCE”)(8)	10.2			10.3			10.2			9.6			9.1

19

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. These adjusted results provide alternate measurements of our operating performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

	Three Months Ended									Nine Months Ended									Year Ended
	December 31, 2019									September 30, 2019									December 31, 2019
(Dollars in millions, except per share data and as noted)	Reported Results			Adj.(9)			Adjusted Results			Reported Results			Adj.(9)			Adjusted Results			Reported Results			Adj.(9)			Adjusted Results
Selected income statement data:
Net interest income	$	6,066		—			$	6,066		$	17,274		$	67		$	17,341		$	23,340		$	67		$	23,407
Non-interest income	1,361			—			1,361			3,892			74			3,966			5,253			74			5,327
Total net revenue	7,427			—			7,427			21,166			141			21,307			28,593			141			28,734
Provision for credit losses	1,818			$	(84	)	1,734			4,418			—			4,418			6,236			(84		)	6,152
Non-interest expense	4,161			(64		)	4,097			11,322			(284		)	11,038			15,483			(348		)	15,135
Income from continuing operations before income taxes	1,448			148			1,596			5,426			425			5,851			6,874			573			7,447
Income tax provision	270			35			305			1,071			46			1,117			1,341			81			1,422
Income from continuing operations, net of tax	1,178			113			1,291			4,355			379			4,734			5,533			492			6,025
Income (loss) from discontinued operations, net of tax	(2		)	—			(2		)	15			—			15			13			—			13
Net income	1,176			113			1,289			4,370			379			4,749			5,546			492			6,038
Dividends and undistributed earnings allocated to participating securities(11)	(7		)	(1		)	(8		)	(34		)	(3		)	(37		)	(41		)	(3		)	(44		)
Preferred stock dividends	(97		)	—			(97		)	(185		)	—			(185		)	(282		)	—			(282		)
Issuance cost for redeemed preferred stock	(31		)	—			(31		)	—			—			—			(31		)	—			(31		)
Net income available to common stockholders	$	1,041		$	112		$	1,153		$	4,151		$	376		$	4,527		$	5,192		$	489		$	5,681
Selected performance metrics:
Diluted EPS(11)	$	2.25		$	0.24		$	2.49		$	8.79		$	0.80		$	9.59		$	11.05		$	1.04		$	12.09
Efficiency ratio	56.03		%	(87		)bps	55.16		%	53.49		%	(169		)bps	51.80		%	54.15		%	(148		)bps	52.67		%
Operating efficiency ratio	46.47			(87		)	45.60			46.10			(164		)	44.46			46.20			(144		)	44.76

20

	Three Months Ended									Nine Months Ended									Year Ended
	December 31, 2018									September 30, 2018									December 31, 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	$	5,820		$	6		$	5,826		$	17,055		$	26		$	17,081		$	22,875		$	32		$	22,907
Non-interest income	1,193			(64		)	1,129			4,008			(514		)	3,494			5,201			(578		)	4,623
Total net revenue	7,013			(58		)	6,955			21,063			(488		)	20,575			28,076			(546		)	27,530
Provision for credit losses	1,638			—			1,638			4,218			48			4,266			5,856			48			5,904
Non-interest expense	4,132			(34		)	4,098			10,770			(248		)	10,522			14,902			(282		)	14,620
Income from continuing operations before income taxes	1,243			(24		)	1,219			6,075			(288		)	5,787			7,318			(312		)	7,006
Income tax provision (benefit)	(21		)	266			245			1,314			(121		)	1,193			1,293			145			1,438
Income from continuing operations, net of tax	1,264			(290		)	974			4,761			(167		)	4,594			6,025			(457		)	5,568
Income (loss) from discontinued operations, net of tax	(3		)	—			(3		)	(7		)	—			(7		)	(10		)	—			(10		)
Net income	1,261			(290		)	971			4,754			(167		)	4,587			6,015			(457		)	5,558
Dividends and undistributed earnings allocated to participating securities(11)	(9		)	2			(7		)	(32		)	1			(31		)	(40		)	3			(37		)
Preferred stock dividends	(80		)	—			(80		)	(185		)	—			(185		)	(265		)	—			(265		)
Net income available to common stockholders	$	1,172		$	(288	)	$	884		$	4,537		$	(166	)	$	4,371		$	5,710		$	(454	)	$	5,256
Selected performance metrics:
Diluted EPS(11)	$	2.48		$	(0.61	)	$	1.87		$	9.32		$	(0.34	)	$	8.98		$	11.82		$	(0.94	)	$	10.88
Efficiency ratio	58.92		%	—			58.92		%	51.13		%	1		bps	51.14		%	53.08		%	3		bps	53.11		%
Operating efficiency ratio	47.07			(10		)bps	46.97			44.76			(15		)	44.61			45.33			(12		)	45.21

21

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of 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 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 following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

	2019			2019			2019			2018			2018
(Dollars in millions)	Q4			Q3			Q2			Q1			Q4
Tangible Common Equity (Period-End)
Stockholders’ equity	$	58,011		$	58,235		$	55,767		$	53,481		$	51,668
Goodwill and intangible assets(12)	(14,932		)	(14,940		)	(14,886		)	(14,904		)	(14,941		)
Noncumulative perpetual preferred stock	(4,853		)	(5,823		)	(4,360		)	(4,360		)	(4,360		)
Tangible common equity	$	38,226		$	37,472		$	36,521		$	34,217		$	32,367
Tangible Common Equity (Average)
Stockholders’ equity	$	58,148		$	57,245		$	54,570		$	52,720		$	51,114
Goodwill and intangible assets(12)	(14,967		)	(14,908		)	(14,900		)	(14,932		)	(14,953		)
Noncumulative perpetual preferred stock	(5,506		)	(4,678		)	(4,360		)	(4,360		)	(4,360		)
Tangible common equity	$	37,675		$	37,659		$	35,310		$	33,428		$	31,801
Tangible Assets (Period-End)
Total assets	$	390,365		$	378,810		$	373,619		$	373,191		$	372,538
Goodwill and intangible assets(12)	(14,932		)	(14,940		)	(14,886		)	(14,904		)	(14,941		)
Tangible assets	$	375,433		$	363,870		$	358,733		$	358,287		$	357,597
Tangible Assets (Average)
Total assets	$	383,162		$	374,905		$	371,095		$	370,394		$	365,243
Goodwill and intangible assets(12)	(14,967		)	(14,908		)	(14,900		)	(14,932		)	(14,953		)
Tangible assets	$	368,195		$	359,997		$	356,195		$	355,462		$	350,290

__________

⁽¹⁾  Regulatory capital metrics and capital ratios as of December 31, 2019 are preliminary and therefore subject to change.

⁽²⁾  Amounts presented are net of tax.

⁽³⁾  Total capital equals the sum of Tier 1 capital and Tier 2 capital.

⁽⁴⁾  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.

⁽⁵⁾  Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.

⁽⁶⁾  Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.

⁽⁷⁾  Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.

⁽⁸⁾  TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.

22

⁽⁹⁾  The adjustments in 2019 consist of:

	Three Months Ended		Nine Months Ended		Year Ended
(Dollars in millions)	December 31, 2019		September 30, 2019		December 31, 2019
Initial allowance build on acquired Walmart portfolio	$	84	—		$	84
Walmart launch and related integration expenses	48		$	163	211
Cybersecurity Incident expenses, net of insurance	16		22		38
U.K. Payment Protection Insurance customer refund reserve build (“U.K. PPI Reserve”)	—		212		212
Restructuring charges	—		28		28
Total	148		425		573
Income tax provision	35		46		81
Net income	$	113	$	379	$	492

⁽¹⁰⁾  The adjustments in 2018 consist of:

	Three Months Ended			Nine Months Ended			Year Ended
(Dollars in millions)	December 31, 2018			September 30, 2018			December 31, 2018
Net gains on the sales of exited businesses	$	(74	)	$	(541	)	$	(615	)
Benefit as a result of tax methodology change on rewards costs	(284		)	—			(284		)
Legal reserve build	—			170			170
U.K. Payment Protection Insurance customer refund reserve (“U.K. PPI Reserve”)	50			49			99
Restructuring charges	—			34			34
Total	(308		)	(288		)	(596		)
Income tax provision	18			121			139
Net income	$	(290	)	$	(167	)	$	(457	)

⁽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.

23

XML

Cover	Jan. 21, 2020
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Jan. 21, 2020
Entity Registrant Name	CAPITAL ONE FINANCIAL CORP
Entity Incorporation, State or Country Code	DE
Entity File Number	001-13300
Entity Tax Identification Number	54-1719854
Entity Address, Address Line One	1680 Capital One Drive,
Entity Address, City or Town	McLean,
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22102
City Area Code	703
Local Phone Number	720-1000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000927628
Amendment Flag	false
Common Stock (par value $.01 per share)
Entity Information [Line Items]
Title of 12(b) Security	Common Stock (par value $.01 per share)
Trading Symbol	COF
Security Exchange Name	NYSE
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B
Trading Symbol	COF PRP
Security Exchange Name	NYSE
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series F
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series F
Trading Symbol	COF PRF
Security Exchange Name	NYSE
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series G
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series G
Trading Symbol	COF PRG
Security Exchange Name	NYSE
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series H
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series H
Trading Symbol	COF PRH
Security Exchange Name	NYSE
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series I
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series I
Trading Symbol	COF PRI
Security Exchange Name	NYSE
0.800% Senior Notes Due 2024
Entity Information [Line Items]
Title of 12(b) Security	0.800% Senior Notes Due 2024
Trading Symbol	COF24
Security Exchange Name	NYSE
1.650% Senior Notes Due 2029
Entity Information [Line Items]
Title of 12(b) Security	1.650% Senior Notes Due 2029
Trading Symbol	COF29
Security Exchange Name	NYSE