Capital One Reports First Quarter 2013 Net Income of $1.1 billion, or $1.79 per share

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement

     First Quarter 2013 ^{(1) (2) (3)}

    Table of Contents 

Page 

Capital One Financial Corporation Consolidated

Table   1:   

Financial Summary―Consolidated

1

Table   2:

Selected Metrics―Consolidated

2

Table   3:

Consolidated Statements of Income

3

Table   4:

Consolidated Balance Sheets

4

Table   5:

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

5

Table   6:

Average Balances, Net Interest Income and Net Interest Margin

6

Table   7:

Loan Information and Performance Statistics

7

Business Segment Detail

Table   8:

Financial & Statistical Summary―Credit Card Business

8

Table   9:

Financial & Statistical Summary―Consumer Banking Business

9

Table 10:

Financial & Statistical Summary―Commercial Banking Business

10

Table 11:

Financial & Statistical Summary―Other and Total 

11

Table 12:

Notes to Loan and Business Segment Disclosures (Tables 7 — 11)

12

Other

Table 13:

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

13

⁽¹⁾

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our March 31, 2013 Quarterly Report on Form 10-Q once it is filed with the Securities and Exchange Commission. 

⁽²⁾

References to ING Direct refer to the business and assets acquired and liabilities assumed in the February 17, 2012 acquisition. References to the 2012 U.S. card acquisition refer to the May 1, 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States.

⁽³⁾

We use the term "acquired loans" to refer to a limited portion of the credit card loans acquired in the 2012 U.S. card acquisition and the substantial majority of loans acquired in the ING Direct and Chevy Chase Bank ("CCB") acquisitions, which were recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3"). Because SOP 03-3 takes into consideration future credit losses expected to be incurred over the life of the loans, there are no charge-offs or an allowance associated with these loans unless the estimated cash flows expected to be collected decrease subsequent to acquisition. In addition, these loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans. The accounting and classification of these loans may significantly alter some of our reported credit quality metrics. We therefore supplement certain reported credit quality metrics with metrics adjusted to exclude the impact of these acquired loans.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1:  Financial Summary—Consolidated ^(1)(2)(3)

2013

2012

2012

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

Q1

Q4

Q1

Earnings

Net interest income

$    4,570

$    4,528

$    3,414

Non-interest income^{(4) (5)}

981

1,096

1,521

Total net revenue⁽⁶⁾

5,551

5,624

4,935

Provision for credit losses

885

1,151

573

Non-interest expense:

    Marketing

317

393

321

    Amortization of intangibles⁽⁷⁾

177

191

62

    Acquisition-related ⁽⁸⁾

46

69

86

    Operating expenses

2,488

2,602

2,035

Total non-interest expense

3,028

3,255

2,504

Income from continuing operations before income taxes 

1,638

1,218

1,858

Income tax provision

494

370

353

Income from continuing operations, net of tax

1,144

848

1,505

Loss from discontinued operations, net of tax⁽⁴⁾

(78)

(5)

(102)

Net income

1,066

843

1,403

Dividends and undistributed earnings allocated to participating securities⁽⁹⁾

(5)

(3)

(7)

Preferred stock dividends

(13)

(15)

—

Net income available to common stockholders

$    1,048

$      825

$    1,396

Common Share Statistics

Basic EPS:⁽⁹⁾ 

   Income from continuing operations, net of tax

$     1.94

$     1.43

$     2.94

   Loss from discontinued operations, net of tax

(0.13)

(0.01)

(0.20)

   Net income per common share 

$     1.81

$     1.42

$     2.74

Diluted EPS:⁽⁹⁾ 

   Income from continuing operations, net of tax

$     1.92

$     1.42

$     2.92

   Loss from discontinued operations, net of tax

(0.13)

(0.01)

(0.20)

   Net income per common share

$     1.79

$     1.41

$     2.72

Weighted average common shares outstanding (in millions) for:

   Basic EPS

580.5

579.2

508.7

   Diluted EPS

586.3

585.6

513.1

Common shares outstanding (period end, in millions)

584.0

582.2

580.2

Dividends per common share

$     0.05

$     0.05

$     0.05

Tangible book value per common share (period end)⁽¹⁰⁾

41.87

40.23

39.37

Balance Sheet (Period End)

Loans held for investment⁽¹¹⁾

$191,333

$205,889

$173,822

Interest-earning assets

268,479

280,096

265,398

Total assets

300,163

312,918

294,481

Interest-bearing deposits

191,093

190,018

197,254

Total deposits

212,410

212,485

216,528

Borrowings

37,492

49,910

32,885

Stockholders' equity

41,296

40,499

36,950

Balance Sheet (Quarterly Average Balances)

Average loans held for investment⁽¹⁰⁾

$195,997

$202,944

$152,900

Average interest-earning assets

272,345

277,886

220,246

Average total assets

303,223

308,096

246,384

Average interest-bearing deposits

190,612

192,122

151,625

Average total deposits

211,555

213,494

170,259

Average borrowings

41,574

44,189

35,994

Average stockholders' equity

40,960

40,212

32,982

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2:  Selected Metrics—Consolidated ^(1)(2)(3)

2013

2012

2012

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

Q1

Q4

Q1

Performance Metrics

Net interest income growth (quarter over quarter) 

1

%

(3)

%

7

%

Non-interest income growth(quarter over quarter)

(10)

(4)

75

Total net revenue growth(quarter over quarter)

(1)

(3)

22

Total net revenue margin⁽¹²⁾

8.15

8.10

8.96

Net interest margin⁽¹³⁾

6.71

6.52

6.20

Return on average assets⁽¹⁴⁾

1.51

1.10

2.44

Return on average total stockholders' equity⁽¹⁵⁾

11.17

8.44

18.25

Return on average tangible common equity⁽¹⁶⁾ 

19.09

14.74

31.60

Non-interest expense as a % of average loans held for investment⁽¹⁷⁾

6.18

6.42

6.55

Efficiency ratio⁽¹⁸⁾

54.55

57.88

50.74

Effective income tax rate

30.2

30.4

19.0

Full-time equivalent employees (in thousands), period end

39.3

39.6

34.2

Credit Quality Metrics^(11)(19)

Allowance for loan and lease losses 

$    4,606

$    5,156

$    4,060

Allowance as a % of loans held for investment 

2.41

%

2.50

%

2.34

%

Allowance as a % of loans held for investment (excluding acquired loans) 

2.91

3.02

3.08

Net charge-offs 

$    1,079

$    1,150

$      780

Net charge-off rate⁽²⁰⁾

2.20

%

2.26

%

2.04

%

Net charge-off rate (excluding acquired loans)⁽²⁰⁾

2.69

2.78

2.40

30+ day performing delinquency rate

2.37

2.70

2.23

30+ day performing delinquency rate (excluding acquired loans)

2.90

3.29

2.96

30+ day delinquency rate⁽²¹⁾ 

**

3.09

2.69

30+ day delinquency rate (excluding acquired loans)⁽²¹⁾ 

**

3.77

3.57

Capital Ratios ⁽²²⁾

Tier 1 common ratio

11.8

%

11.0

%

11.9

%

Tier 1 risk-based capital ratio

12.2

11.3

13.9

Total risk-based capital ratio

14.4

13.6

16.5

Tangible common equity ("TCE") ratio

8.6

7.9

8.2

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3:  Consolidated Statements of Income^(1)(2)(3)

Three Months Ended

March 31,

December 31,

March 31,

(Dollars in millions, except per share data) (unaudited)

2013

2012

2012

Interest income:

Loans, including loans held for sale

$              4,649

$              4,727

$              3,657

Investment securities

374

361

298

Other

28

27

24

    Total interest income

5,051

5,115

3,979

Interest expense:

Deposits

326

348

311

Securitized debt obligations

56

58

80

Senior and subordinated notes

82

85

88

Other borrowings

17

96

86

    Total interest expense

481

587

565

Net interest income

4,570

4,528

3,414

Provision for credit losses

885

1,151

573

    Net interest income after provision for credit losses

3,685

3,377

2,841

Non-interest income:

Service charges and other customer-related fees

550

595

415

Interchange fees, net

445

459

328

Net other-than-temporary impairment losses recognized in earnings

(25)

(12)

(14)

Bargain purchase gain⁽⁵⁾

—

—

594

Other

11

54

198

    Total non-interest income

981

1,096

1,521

Non-interest expense:

Salaries and associate benefits

1,080

1,039

864

Occupancy and equipment

350

380

270

Marketing

317

393

321

Professional services

307

354

293

Communications and data processing

210

205

172

Amortization of intangibles⁽⁷⁾

177

191

62

Acquisition-related⁽⁸⁾

46

69

86

Other

541

624

436

    Total non-interest expense

3,028

3,255

2,504

Income from continuing operations before income taxes

1,638

1,218

1,858

Income tax provision

494

370

353

Income from continuing operations, net of tax

1,144

848

1,505

Loss from discontinued operations, net of tax⁽⁴⁾

(78)

(5)

(102)

    Net income

1,066

843

1,403

Dividends and undistributed earnings allocated to participating securities⁽⁹⁾

(5)

(3)

(7)

Preferred stock dividends

(13)

(15)

-

    Net income available to common stockholders

$              1,048

$                 825

$              1,396

Basic earnings per common share:⁽⁹⁾

    Income from continuing operations

$                1.94

$                1.43

$                2.94

    Loss from discontinued operations

(0.13)

(0.01)

(0.20)

    Net income per basic common share

$                1.81

$                1.42

$                2.74

Diluted earnings per common share:⁽⁹⁾

    Income from continuing operations

$                1.92

$                1.42

$                2.92

    Loss from discontinued operations

(0.13)

(0.01)

(0.20)

    Net income per diluted common share

$                1.79

$                1.41

$                2.72

Weighted average common shares outstanding (in millions) for:

    Basic EPS

580.5

579.2

508.7

    Diluted EPS

586.3

585.6

513.1

Dividends paid per common share

$                0.05

$                0.05

$                0.05

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4:  Consolidated Balance Sheets

March 31,

December 31,

March 31,

(Dollars in millions)(unaudited)

2013

2012

2012

Assets:

Cash and cash equivalents:

Cash and due from banks

$             1,947

$             3,440

$             2,183

Interest-bearing deposits with banks

4,563

7,617

28,165

Federal funds sold and securities purchased under agreements to resell

236

1

308

Total cash and cash equivalents

6,746

11,058

30,656

Restricted cash for securitization investors

1,018

428

1,090

Securities available for sale, at fair value

63,968

63,979

60,810

Loans held for investment:

Unsecuritized loans held for investment

150,721

162,059

128,927

Restricted loans for securitization investors

40,612

43,830

44,895

Total loans held for investment

191,333

205,889

173,822

    Less: Allowance for loan and lease losses

(4,606)

(5,156)

(4,060)

Net loans held for investment

186,727

200,733

169,762

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

6,410

201

627

Premises and equipment, net

3,736

3,587

3,062

Interest receivable

1,378

1,694

1,157

Goodwill

13,900

13,904

13,595

Other

16,280

17,334

13,722

Total assets

$         300,163

$         312,918

$         294,481

Liabilities:

Interest payable

$                310

$                450

$                384

Customer deposits:

Non-interest bearing deposits

21,317

22,467

19,274

Interest-bearing deposits

191,093

190,018

197,254

Total customer deposits

212,410

212,485

216,528

Securitized debt obligations

11,046

11,398

15,474

Other debt:

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

855

1,248

770

Senior and subordinated notes

13,255

12,686

11,948

Other borrowings

12,336

24,578

4,693

Total other debt

26,446

38,512

17,411

Other liabilities

8,655

9,574

7,734

Total liabilities

258,867

272,419

257,531

Stockholders' equity:

Preferred stock

—

—

—

Common stock

6

6

6

Additional paid-in capital, net

26,256

26,188

25,136

Retained earnings

17,876

16,853

14,841

Accumulated other comprehensive income

473

739

253

Treasury stock, at cost

(3,315)

(3,287)

(3,286)

Total stockholders' equity

41,296

40,499

36,950

Total liabilities and stockholders' equity

$         300,163

$         312,918

$         294,481

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 — 4)

⁽¹⁾

Certain prior period amounts have been reclassified to conform to the current period presentation.

⁽²⁾

Results for Q2 2012 and thereafter include the impact of the May 1, 2012 closing of the 2012 U.S. card acquisition, which resulted in the addition of $28.2 billion in credit card receivables at closing.

⁽³⁾

Results for Q1 2012 and thereafter include the impact of the February 17, 2012 acquisition of ING Direct, which resulted in the addition of loans of $40.4 billion, other assets of $53.9 billion and deposits of $84.4 billion at acquisition.

⁽⁴⁾

We recorded a provision for mortgage representation and warranty losses of $97 million in Q1 2013.  We did not record a provision for mortgage representation and warranty losses in Q4 2012. We recorded a provision for mortgage representation and warranty losses of $169 million in Q1 2012. The majority of the provision for representation and warranty losses is generally included net of tax in discontinued operations, with the remaining amount included pre-tax in non-interest income. The mortgage representation and warranty reserve increased to $994 million as of March 31, 2013, from $899 million as of December 31, 2012.

⁽⁵⁾

Includes a bargain purchase gain of $594 million recognized in earnings in Q1 2012 attributable to the February 17, 2012 acquisition of ING Direct. Represents the excess of the fair value of the net assets acquired in the ING Direct acquisition as of the acquisition date of February 17, 2012 over the consideration transferred.

⁽⁶⁾

Total net revenue was reduced by $265 million in Q1 2013, $318 million in Q4 2012, and $123 million in Q1 2012 for the estimated uncollectible amount of billed finance charges and fees.  Premium amortization related to the 2012 U.S. card and ING Direct acquisitions reduced revenue by $111 million in Q1 2013, $124 million in Q4 2012, and $30 million in Q1 2012. 

⁽⁷⁾

Includes purchased credit card relationship ("PCCR") intangible amortization of $116 million in Q1 2013, $127 million in Q4 2012, and $4 million in Q1 2012, the substantial majority of which is attributable to the 2012 U.S. card acquisition. Includes core deposit intangible amortization of $44 million in Q1 2013, $47 million in Q4 2012, and $46 million in Q1 2012. 

⁽⁸⁾

Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs and integration expense.

⁽⁹⁾

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

⁽¹⁰⁾

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

⁽¹¹⁾

Loans held for investment includes acquired loans accounted for based on cash flows expected to be collected.  See Table "Table 12: Notes to Loan and Business Segment Disclosures (Tables 7 — 11)" for information on the amount of acquired loans for each of the periods presented.

⁽¹²⁾

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

⁽¹³⁾

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

⁽¹⁴⁾

Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period. 

⁽¹⁵⁾

Calculated based on annualized income from continuing operations, net of tax, for the period divided by average stockholders' equity for the period. 

⁽¹⁶⁾

Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible common equity for the period.  See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

⁽¹⁷⁾

Calculated based on annualized non-interest expense for the period divided by average loans held for investment for the period.

⁽¹⁸⁾

Calculated based on non-interest expense, excluding goodwill impairment charges, for the period divided by total net revenue for the period. 

⁽¹⁹⁾

Loans acquired as part of the 2012 U.S. card, ING Direct and CCB acquisitions classified as held for investment are included in the denominator used in calculating our reported credit quality metrics.  We supplement certain reported credit quality metrics with metrics adjusted to exclude from the denominator acquired loans accounted for based on estimated expected cash flows to be collected (formerly SOP 03-3).

⁽²⁰⁾

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

⁽²¹⁾

The 30+ day delinquency rate as of the end of Q1 2013 will be provided in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.

⁽²²⁾

Capital ratios as of the end of Q1 2013 are preliminary and therefore subject to change. TCE ratio is a non-GAAP capital ratio. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.

CAPITAL ONE FINANCIAL CORPORATION (COF)

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

2013 Q1

2012 Q4

2012 Q1

Average

Interest Income/

 Yield/ 

Average

Interest Income/

 Yield/ 

Average

Interest Income/

 Yield/ 

(Dollars in millions)(unaudited)

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Interest-earning assets:

    Loans, including loans held for sale

$200,441

$  4,649

9.28

%

$203,132

$  4,727

9.31

%

$153,332

$  3,657

9.54

%

    Investment securities

64,798

374

2.31

64,174

361

2.25

50,543

298

2.36

    Cash equivalents and other

7,106

28

1.58

10,580

27

1.02

16,371

24

0.59

Total interest-earning assets 

$272,345

$  5,051

7.42

%

$277,886

$  5,115

7.36

%

$220,246

$  3,979

7.23

%

Interest-bearing liabilities:

    Interest-bearing deposits

$190,612

$     326

0.68

%

$192,122

$     348

0.72

%

$151,625

$     311

0.82

%

    Securitized debt obligations

11,758

56

1.91

12,119

58

1.91

16,185

80

1.98

    Senior and subordinated notes

11,984

82

2.74

11,528

85

2.95

10,268

88

3.43

    Other borrowings

17,832

17

0.38

20,542

96

1.87

9,541

86

3.61

Total interest-bearing liabilities

$232,186

$     481

0.83

%

$236,311

$     587

0.99

%

$187,619

$     565

1.20

%

Net interest income/spread

$  4,570

6.59

%

$  4,528

6.37

%

$  3,414

6.03

%

Impact of non-interest bearing funding

0.12

0.15

0.17

Net interest margin

6.71

%

6.52

%

6.20

%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics^(1)(2)(3)(4)

2013

2012

2012

(Dollars in millions)(unaudited)

Q1

Q4

Q1 

Period-end Loans Held For Investment

Credit card:

   Domestic credit card 

$           70,361

$           83,141

$           53,173

   International credit card

8,036

8,614

8,303

      Total credit card

78,397

91,755

61,476

Consumer banking:

   Automobile

27,940

27,123

23,568

   Home loan

41,931

44,100

49,550

   Retail banking

3,742

3,904

4,182

      Total consumer banking

73,613

75,127

77,300

Commercial banking:

   Commercial and multifamily real estate

17,878

17,732

15,702

   Commercial and industrial

20,127

19,892

17,761

      Total commercial lending

38,005

37,624

33,463

   Small-ticket commercial real estate

1,145

1,196

1,443

      Total commercial banking

39,150

38,820

34,906

Other loans

173

187

140

     Total 

$         191,333

$         205,889

$         173,822

Average Loans Held For Investment

Credit card:

   Domestic credit card 

$           74,714

$           80,718

$           54,131

   International credit card

8,238

8,372

8,301

      Total credit card

82,952

89,090

62,432

Consumer banking:

   Automobile

27,477

26,881

22,582

   Home loan 

43,023

45,250

29,502

   Retail banking

3,786

3,967

4,179

      Total consumer banking

74,286

76,098

56,263

Commercial banking:

   Commercial and multifamily real estate

17,454