Capital One Reports Fourth Quarter 2013 Net Income of $859 million, or $1.45 per share

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Jan 16, 2014, 04:05 ET

MCLEAN, Va., Jan. 16, 2014 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2013 of $859 million, or $1.45 per diluted common share, compared to the third quarter of 2013 with net income of $1.1 billion, or $1.86 per diluted common share, and up from the fourth quarter of 2012 with net income of $843 million, or $1.41 per diluted common share. Net income for the full year 2013 was $4.2 billion, or $6.96 per diluted common share, compared with net income of $3.5 billion, or $6.16 per diluted common share, for 2012.

"Capital One delivered strong financial performance in 2013," said Richard D. Fairbank, Chairman and CEO. "We remain focused on resilient growth, disciplined cost management, and returning capital to shareholders in 2014."

All comparisons below are for the fourth quarter of 2013 compared with the third quarter of 2013 unless otherwise noted.

Fourth Quarter 2013 Income Highlights:

Total net revenue decreased 2 percent to $5.5 billion.
Total non-interest expense increased 4 percent to $3.3 billion.
Pre-provision earnings decreased 10 percent to $2.3 billion.
Provision for credit losses increased 13 percent to $957 million.

Fourth Quarter 2013 Balance Sheet Highlights:

Tier 1 common ratio of 12.2 percent, down 50 basis points
Net interest margin of 6.73 percent, down 16 basis points
Domestic Card period-end loans increased $3.3 billion, or 5 percent, to $73.3 billion.
Commercial Banking period-end loans increased $2.6 billion, or 6 percent, to $45.0 billion.
Consumer Banking:
- Automobile period-end loans increased $1.1 billion, or 3 percent, to $31.9 billion.
- Home loans period-end loans decreased $1.5 billion, or 4 percent, to $35.3 billion, driven by expected run-off of acquired portfolios.
Average loans held for investment in the quarter increased $1.7 billion, or less than 1 percent, to $192.8 billion.
- Domestic Card average loans increased $421 million, or less than 1 percent, to $70.4 billion.
- Commercial Banking average loans increased $1.8 billion, or 4 percent, to $43.4 billion.
- Consumer Banking:
  - Automobile average loans increased $1.3 billion, or 4 percent, to $31.4 billion.
  - Home loans average loans decreased by $1.9 billion, or 5 percent, to $36.0 billion, driven by expected run-off of acquired portfolios.
Period-end total deposits decreased $2.3 billion, or 1 percent, to $204.5 billion, while average deposits declined $2.6 billion, or 1 percent, to $205.7 billion.
Deposit interest rates declined 3 basis points to 0.63 percent.

Detailed segment information will be available in the company's Annual Report on Form 10-K for the year ended December 31, 2013.

Earnings Conference Call Webcast Information
The company will hold an earnings conference call on January 16, 2014, at 5:00 PM, Eastern Standard Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us", then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through January 30, 2014 at 5:00 PM.

Forward Looking Statements
Certain statements in this release are 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, 2012.

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 $204.5 billion in deposits and $297 billion in total assets as of December 31, 2013. 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 more than 900 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Exhibit 99.2

Capital One Financial Corporation
Financial Supplement
Fourth Quarter 2013⁽¹⁾⁽²⁾Table of Contents

Capital One Financial Corporation Consolidated			Page
	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 Under Basel I	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 Annual Report on Form 10-K for the period ended December 31, 2013 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.

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

	2013		2013		2012
(Dollars in millions, except per share data and as noted) (unaudited)	Q4		Q3		Q4
Earnings
Net interest income	$	4,423	$	4,560	$	4,528
Non-interest income⁽²⁾	1,121		1,091		1,096
Total net revenue⁽³⁾	5,544		5,651		5,624
Provision for credit losses	957		849		1,151
Non-interest expense:
Marketing	427		299		393
Amortization of intangibles⁽⁴⁾	166		161		191
Acquisition-related⁽⁵⁾	60		37		69
Operating expenses	2,627		2,650		2,602
Total non-interest expense	3,280		3,147		3,255
Income from continuing operations before income taxes	1,307		1,655		1,218
Income tax provision	425		525		370
Income from continuing operations, net of tax	882		1,130		848
Loss from discontinued operations, net of tax⁽²⁾	(23)		(13)		(5)
Net income	859		1,117		843
Dividends and undistributed earnings allocated to participating securities⁽⁶⁾	(4)		(5)		(3)
Preferred stock dividends⁽⁶⁾	(13)		(13)		(15)
Net income available to common stockholders	$	842	$	1,099	$	825
Common Share Statistics
Basic EPS:⁽⁶⁾
Net income from continuing operations, net of tax	$	1.51	$	1.91	$	1.43
Loss from discontinued operations, net of tax	(0.04)		(0.02)		(0.01)
Net income available to common stockholders per common share	$	1.47	$	1.89	$	1.42
Diluted EPS:⁽⁶⁾
Net income from continuing operations, net of tax	$	1.48	$	1.88	$	1.42
Loss from discontinued operations, net of tax	(0.03)		(0.02)		(0.01)
Net income available to common stockholders per common share	$	1.45	$	1.86	$	1.41
Weighted average common shares outstanding (in millions) for:
Basic EPS	573.4		582.3		579.2
Diluted EPS	582.6		591.1		585.6
Common shares outstanding (period end, in millions)	572.7		582.0		582.2
Dividends per common share	$	0.30	$	0.30	$	0.05
Tangible book value per common share (period end)⁽⁷⁾	42.47		43.19		40.23
Balance Sheet (Period End)
Loans held for investment⁽⁸⁾	$	197,199	$	191,814	$	205,889
Interest-earning assets	265,170		259,152		280,096
Total assets	297,048		289,888		312,918
Interest-bearing deposits	181,880		184,553		190,018
Total deposits	204,523		206,834		212,485
Borrowings	40,654		31,845		49,910
Common equity	40,891		40,897		39,646
Total stockholders' equity	41,744		41,750		40,499
Balance Sheet (Quarterly Average Balances)
Loans held for investment⁽⁸⁾	$	192,813	$	191,135	$	202,944
Interest-earning assets	262,957		264,796		277,886
Total assets	294,108		294,939		308,096
Interest-bearing deposits	184,206		186,752		192,122
Total deposits	205,706		208,340		213,494
Borrowings	36,463		36,355		44,189
Common equity	41,610		40,431		39,359
Total stockholders' equity	42,463		41,284		40,212

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated⁽¹⁾

	2013			2013			2012
(Dollars in millions, except per share data and as noted) (unaudited)	Q4			Q3			Q4
Performance Metrics
Net interest income growth (quarter over quarter)	(3)		%	—		%	(3)		%
Non-interest income growth (quarter over quarter)	3			1			(4)
Total net revenue growth (quarter over quarter)	(2)			—			(3)
Total net revenue margin⁽⁹⁾	8.43			8.54			8.10
Net interest margin⁽¹⁰⁾	6.73			6.89			6.52
Return on average assets⁽¹¹⁾	1.20			1.53			1.10
Return on average tangible assets⁽¹²⁾	1.27			1.62			1.16
Return on average common equity⁽¹³⁾	8.32			11.00			8.44
Return on average tangible common equity⁽¹⁴⁾	13.81			18.08			14.42
Non-interest expense as a % of average loans held for investment⁽¹⁵⁾	6.80			6.59			6.42
Efficiency ratio⁽¹⁶⁾	59.16			55.69			57.88
Effective income tax rate for continuing operations	32.5			31.7			30.4
Full-time equivalent employees (in thousands), period end	42.0			39.6			39.6
Credit Quality Metrics⁽⁸⁾
Allowance for loan and lease losses	$	4,315		$	4,333		$	5,156
Allowance as a % of loans held for investment	2.19		%	2.26		%	2.50		%
Allowance as a % of loans held for investment (excluding acquired loans)	2.54			2.66			3.02
Net charge-offs	$	969		$	917		$	1,150
Net charge-off rate⁽¹⁷⁾	2.01		%	1.92		%	2.26		%
Net charge-off rate (excluding acquired loans)⁽¹⁷⁾	2.37			2.29			2.78
30+ day performing delinquency rate	2.63			2.54			2.70
30+ day performing delinquency rate (excluding acquired loans)	3.08			3.01			3.29
30+ day delinquency rate	2.96			2.88			3.09
30+ day delinquency rate (excluding acquired loans)	3.46			3.41			3.77
Capital Ratios ⁽¹⁸⁾
Tier 1 common ratio	12.2		%	12.7		%	11.0		%
Tier 1 risk-based capital ratio	12.6			13.1			11.3
Total risk-based capital ratio	14.7			15.3			13.6
Tangible common equity ("TCE") ratio	8.7			9.2			7.9

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 3: Consolidated Statements of Income⁽¹⁾

	Three Months Ended						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
(Dollars in millions, except per share data) (unaudited)	2013		2013		2012		2013		2012
Interest income:
Loans, including loans held for sale	$	4,398	$	4,579	$	4,727	$	18,222	$	17,544
Investment securities	414		396		361		1,575		1,329
Other	27		23		27		101		91
Total interest income	4,839		4,998		5,115		19,898		18,964
Interest expense:
Deposits	288		309		348		1,241		1,403
Securitized debt obligations	40		42		58		183		271
Senior and subordinated notes	75		76		85		315		345
Other borrowings	13		11		96		53		356
Total interest expense	416		438		587		1,792		2,375
Net interest income	4,423		4,560		4,528		18,106		16,589
Provision for credit losses	957		849		1,151		3,453		4,415
Net interest income after provision for credit losses	3,466		3,711		3,377		14,653		12,174
Non-interest income:⁽²⁾
Service charges and other customer-related fees	504		530		595		2,118		2,106
Interchange fees, net	489		476		459		1,896		1,647
Net other-than-temporary impairment losses recognized in earnings	(1)		(11)		(12)		(41)		(52)
Bargain purchase gain⁽¹⁹⁾	—		—		—		—		594
Other	129		96		54		305		512
Total non-interest income	1,121		1,091		1,096		4,278		4,807
Non-interest expense:
Salaries and associate benefits	1,103		1,145		1,039		4,432		3,876
Occupancy and equipment	429		369		380		1,504		1,327
Marketing	427		299		393		1,373		1,364
Professional services	347		320		354		1,303		1,270
Communications and data processing	218		224		205		885		778
Amortization of intangibles⁽⁴⁾	166		161		191		671		609
Acquisition-related⁽⁵⁾	60		37		69		193		336
Other	530		592		624		2,153		2,386
Total non-interest expense	3,280		3,147		3,255		12,514		11,946
Income from continuing operations before income taxes	1,307		1,655		1,218		6,417		5,035
Income tax provision	425		525		370		2,025		1,301
Income from continuing operations, net of tax	882		1,130		848		4,392		3,734
Loss from discontinued operations, net of tax⁽²⁾	(23)		(13)		(5)		(233)		(217)
Net income	859		1,117		843		4,159		3,517
Dividends and undistributed earnings allocated to participating securities⁽⁶⁾	(4)		(5)		(3)		(17)		(15)
Preferred stock dividends⁽⁶⁾	(13)		(13)		(15)		(53)		(15)
Net income available to common stockholders	$	842	$	1,099	$	825	$	4,089	$	3,487

Basic earnings per common share:⁽⁶⁾
Net income from continuing operations	$	1.51	$	1.91	$	1.43	$	7.45	$	6.60
Loss from discontinued operations	(0.04)		(0.02)		(0.01)		(0.40)		(0.39)
Net income per basic common share	$	1.47	$	1.89	$	1.42	$	7.05	$	6.21

Diluted earnings per common share:⁽⁶⁾
Net income from continuing operations	$	1.48	$	1.88	$	1.42	$	7.35	$	6.54
Loss from discontinued operations	(0.03)		(0.02)		(0.01)		(0.39)		(0.38)
Net income per diluted common share	$	1.45	$	1.86	$	1.41	$	6.96	$	6.16

Weighted average common shares outstanding (in millions) for:
Basic EPS	573.4		582.3		579.2		579.7		561.1
Diluted EPS	582.6		591.1		585.6		587.6		566.5
Dividends paid per common share	$	0.30	$	0.30	$	0.05	$	0.95	$	0.20

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 4: Consolidated Balance Sheets⁽¹⁾

	December 31,		September 30,		December 31,
*(Dollars in millions)(unaudited)*	2013		2013		2012
Assets:
Cash and cash equivalents:
Cash and due from banks	$	2,821	$	2,855	$	3,440
Interest-bearing deposits with banks	3,131		2,481		7,617
Federal funds sold and securities purchased under agreements to resell	339		382		1
Total cash and cash equivalents	6,291		5,718		11,058
Restricted cash for securitization investors	874		390		428
Securities available for sale, at fair value	41,800		43,132		63,979
Securities held to maturity, at carrying value	19,132		18,276		9
Loans held for investment:
Unsecuritized loans held for investment	157,651		152,332		162,059
Restricted loans for securitization investors	39,548		39,482		43,830
Total loans held for investment	197,199		191,814		205,889
Less: Allowance for loan and lease losses	(4,315)		(4,333)		(5,156)
Net loans held for investment	192,884		187,481		200,733
Loans held for sale, at lower of cost or fair value	218		180		201
Premises and equipment, net	3,839		3,792		3,587
Interest receivable	1,418		1,304		1,694
Goodwill	13,978		13,906		13,904
Other	16,614		15,709		17,325
Total assets	$	297,048	$	289,888	$	312,918

Liabilities:
Interest payable	$	307	$	276	$	450
Customer deposits:
Non-interest bearing deposits	22,643		22,281		22,467
Interest-bearing deposits	181,880		184,553		190,018
Total customer deposits	204,523		206,834		212,485
Securitized debt obligations	10,289		9,544		11,398
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	915		1,686		1,248
Senior and subordinated notes	13,134		12,395		12,686
Other borrowings	16,316		8,220		24,578
Total other debt	30,365		22,301		38,512
Other liabilities	9,820		9,183		9,574
Total liabilities	255,304		248,138		272,419

Stockholders' equity:
Preferred stock	—		—		—
Common stock	6		6		6
Additional paid-in capital, net	26,526		26,426		26,188
Retained earnings	20,404		19,731		16,853
Accumulated other comprehensive income ("AOCI")	(872)		(839)		739
Treasury stock, at cost	(4,320)		(3,574)		(3,287)
Total stockholders' equity	41,744		41,750		40,499
Total liabilities and stockholders' equity	$	297,048	$	289,888	$	312,918

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⁾We recorded a provision for mortgage representation and warranty losses of $33 million in Q4 2013. We recorded a benefit for mortgage representation and warranty losses of $4 million in Q3 2013. We did not record a provision for mortgage representation and warranty losses in Q4 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 was $1.2 billion as of both December 31, 2013 and September 30, 2013, and $899 million as of December 31, 2012.

⁽³⁾Total net revenue was reduced by $185 million in Q4 2013, $154 million in Q3 2013 and $318 million in Q4 2012 for the estimated uncollectible amount of billed finance charges and fees.

⁽⁴⁾Includes purchased credit card relationship ("PCCR") intangible amortization of $102 million in Q4 2013, $106 million in Q3 2013 and $127 million in Q4 2012, the substantial majority of which is attributable to the 2012 U.S. card acquisition. Includes core deposit intangible amortization of $38 million in Q4 2013, $40 million in Q3 2013 and $47 million in Q4 2012.

⁽⁵⁾Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense.

⁽⁶⁾Dividends and undistributed earnings allocated to participating securities, earnings per share, and preferred stock dividends are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.

⁽⁷⁾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 Under Basel I" for additional information.

⁽⁸⁾Loans held for investment includes acquired loans accounted for based on cash flows expected to be collected. 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 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"). See "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.

⁽⁹⁾Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.

⁽¹⁰⁾Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

⁽¹¹⁾Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period.

⁽¹²⁾Calculated based on annualized income from continuing operations, net of tax, for the period divided average tangible assets for the period. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for additional information.

⁽¹³⁾Calculated based on the annualized sum of (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.

⁽¹⁴⁾Calculated based on the annualized sum of (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 return on average tangible common equity may not be comparable to similarly titled measures reported by other companies. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for additional information.

⁽¹⁵⁾Calculated based on annualized non-interest expense for the period divided by average loans held for investment for the period.

⁽¹⁶⁾Calculated based on non-interest expense for the period divided by total net revenue for the period.

⁽¹⁷⁾Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.

⁽¹⁸⁾Capital ratios are calculated under Basel I. Ratios as of the end of Q4 2013 are preliminary and therefore subject to change. TCE ratio is a non-GAAP measure. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for information on the calculation of each of these ratios.

⁽¹⁹⁾A bargain purchase gain of $594 million was recognized in earnings in Q1 2012 attributable to the February 17, 2012 acquisition of ING Direct. The bargain purchase gain represents the excess of the fair value of the net assets acquired in the ING Direct acquisition as of the acquisition date over the consideration transferred.

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 6: Average Balances, Net Interest Income and Net Interest Margin⁽¹⁾

	2013 Q4						2013 Q3						2012 Q4
	Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾		Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾		Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾
(Dollars in millions)(unaudited)	Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾		Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾		Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾
Interest-earning assets:
Loans, including loans held for sale	$	193,368	$	4,398	9.10	%	$	195,839	$	4,579	9.35	%	$	203,132	$	4,727	9.31	%
Investment securities⁽³⁾	62,919		414		2.63		63,317		396		2.50		64,174		361		2.25
Cash equivalents and other	6,670		27		1.62		5,640		23		1.63		10,580		27		1.02
Total interest-earning assets	$	262,957	$	4,839	7.36	%	$	264,796	$	4,998	7.55	%	$	277,886	$	5,115	7.36	%

Interest-bearing liabilities:
Interest-bearing deposits	$	184,206	$	288	0.63	%	$	186,752	$	309	0.66	%	$	192,122	$	348	0.72	%
Securitized debt obligations	9,873		40		1.62		10,243		42		1.64		12,119		58		1.91
Senior and subordinated notes	12,765		75		2.35		12,314		76		2.47		11,528		85		2.95
Other borrowings	13,825		13		0.38		13,798		11		0.32		20,542		96		1.87
Total interest-bearing liabilities	$	220,669	$	416	0.75	%	$	223,107	$	438	0.79	%	$	236,311	$	587	0.99	%
Net interest income/spread			$	4,423	6.61	%			$	4,560	6.76	%			$	4,528	6.37	%
Impact of non-interest bearing funding					0.12						0.13						0.15
Net interest margin					6.73	%					6.89	%					6.52	%

							Year Ended December 31,
							2013						2012
							Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾		Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾
(Dollars in millions)(unaudited)							Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾		Average Balance		Interest Income/ Expense⁽²⁾		Yield/ Rate⁽²⁾
Interest-earning assets:
Loans, including loans held for sale							$	196,609	$	18,222	9.27	%	$	188,466	$	17,544	9.31	%
Investment securities⁽³⁾							63,522		1,575		2.48		57,424		1,329		2.31
Cash equivalents and other							6,292		101		1.61		9,189		91		0.99
Total interest-earning assets							$	266,423	$	19,898	7.47	%	$	255,079	$	18,964	7.43	%

Interest-bearing liabilities:
Interest-bearing deposits							$	187,700	$	1,241	0.66	%	$	183,314	$	1,403	0.77	%
Securitized debt obligations							10,697		183		1.71		14,138		271		1.92
Senior and subordinated notes							12,440		315		2.53		11,012		345		3.13
Other borrowings							14,670		53		0.36		12,875		356		2.77
Total interest-bearing liabilities							$	225,507	$	1,792	0.79	%	$	221,339	$	2,375	1.07	%
Net interest income/spread									$	18,106	6.68	%			$	16,589	6.36	%
Impact of non-interest bearing funding											0.12						0.14
Net interest margin											6.80	%					6.50	%

___________

⁽¹⁾Certain prior period amounts have been reclassified to conform to the current period presentation.

⁽²⁾ Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.

⁽³⁾ Prior to Q2 2013, average balances for investment securities were calculated based on fair value amounts. Effective Q2 2013, average balances are calculated based on the amortized cost of investment securities. The impact of this change on prior period yields is not material.

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics⁽¹⁾⁽²⁾

	2013				2013			2012
(Dollars in millions)(unaudited)	Q4				Q3			Q4
Period-end Loans Held For Investment
Credit card:
Domestic credit card	$	73,255			$	69,936		$	83,141
International credit card	8,050				8,031			8,614
Total credit card	81,305				77,967			91,755
Consumer banking:
Automobile	31,857				30,803			27,123
Home loan	35,282				36,817			44,100
Retail banking	3,623				3,665			3,904
Total consumer banking	70,762				71,285			75,127
Commercial banking:
Commercial and multifamily real estate	20,750				19,523			17,732
Commercial and industrial	23,309				21,848			19,892
Total commercial lending	44,059				41,371			37,624
Small-ticket commercial real estate	952				1,028			1,196
Total commercial banking	45,011				42,399			38,820
Other loans	121				163			187
Total	$		197,199		$	191,814		$	205,889
Average Loans Held For Investment
Credit card:
Domestic credit card	$	70,368			$	69,947		$	80,718
International credit card	7,899				7,782			8,372
Total credit card	78,267				77,729			89,090
Consumer banking:
Automobile	31,424				30,157			26,881
Home loan	35,974				37,852			45,250
Retail banking	3,635				3,655			3,967
Total consumer banking	71,033				71,664			76,098
Commercial banking:
Commercial and multifamily real estate	19,928				19,047			17,005
Commercial and industrial	22,445				21,491			19,344
Total commercial lending	42,373				40,538			36,349
Small-ticket commercial real estate	986				1,038			1,249
Total commercial banking	43,359				41,576			37,598
Other loans	154				166			158
Total	$	192,813			$	191,135		$	202,944
Net Charge-off Rates
Credit card:
Domestic credit card	3.89			%	3.67		%	4.35		%
International credit card	4.74				4.71			3.99
Total credit card	3.98				3.78			4.32
Consumer banking:
Automobile	2.30				2.01			2.24
Home loan	0.03				0.06			(0.06)
Retail banking	1.09				1.38			2.45
Total consumer banking	1.09				0.95			0.88
Commercial banking:
Commercial and multifamily real estate	(0.11)				(0.11)			(0.08)
Commercial and industrial	0.04				0.18			0.13
Total commercial lending	(0.03)				0.04			0.03
Small-ticket commercial real estate	(0.81)				1.26			2.02
Total commercial banking	(0.05)				0.07			0.10
Other loans	4.68				12.17			24.23
Total	2.01			%	1.92		%	2.26		%
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card	3.43			%	3.46		%	3.61		%
International credit card	3.71				3.86			3.58
Total credit card	3.46			%	3.51		%	3.61		%

Consumer banking:
Automobile	6.85			%	6.29		%	7.00		%
Home loan	0.16				0.14			0.13
Retail banking	0.69				0.68			0.76
Total consumer banking	3.20			%	2.82		%	2.65		%
Nonperforming Asset Rates⁽³⁾
Credit card:
International credit card	1.10			%	1.16		%	1.16		%
Total credit card	0.11			%	0.12		%	0.11		%
Consumer banking:
Automobile⁽¹⁰⁾	1.11			%	0.92		%	0.95		%
Home loan	1.14				1.08			1.00
Retail banking	1.13				1.10			1.85
Total consumer banking	1.12			%	1.01		%	1.02		%
Commercial banking:
Commercial and multifamily real estate	0.29			%	0.40		%	0.82		%
Commercial and industrial	0.44				0.65			0.72
Total commercial lending	0.37			%	0.53		%	0.77		%
Small-ticket commercial real estate	0.43				1.49			0.97
Total commercial banking	0.37			%	0.56		%	0.77		%

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial & Statistical Summary—Credit Card Business⁽¹⁾⁽²⁾

	2013			2013			2012
(Dollars in millions) (unaudited)	Q4			Q3			Q4
Credit Card
Earnings:
Net interest income	$	2,576		$	2,757		$	2,849
Non-interest income	833			834			883
Total net revenue	3,409			3,591			3,732
Provision for credit losses	751			617			1,000
Non-interest expense	1,868			1,904			1,933
Income from continuing operations before taxes	790			1,070			799
Income tax provision	274			376			279
Income from continuing operations, net of tax	$	516		$	694		$	520
Selected performance metrics:
Period-end loans held for investment	$	81,305		$	77,967		$	91,755
Average loans held for investment	78,267			77,729			89,090
Average yield on loans held for investment⁽⁴⁾	14.64		%	15.72		%	14.33		%
Total net revenue margin⁽⁵⁾	17.43			18.48			16.76
Net charge-off rate	3.98			3.78			4.32
30+ day performing delinquency rate	3.46			3.51			3.61
30+ day delinquency rate	3.54			3.60		%	3.69
Nonperforming loan rate⁽³⁾	0.11			0.12			0.11
Card loan premium amortization and other intangible accretion⁽⁶⁾	$	39		$	45		$	65
PCCR intangible amortization	102			106			127
Purchase volume⁽⁷⁾	54,245			50,943			52,853
Domestic Card
Earnings:
Net interest income	$	2,303		$	2,492		$	2,583
Non-interest income	747			749			798
Total net revenue	3,050			3,241			3,381
Provision for credit losses	679			529			911
Non-interest expense	1,664			1,713			1,727
Income from continuing operations before taxes	707			999			743
Income tax provision	252			355			263
Income from continuing operations, net of tax	$	455		$	644		$	480
Selected performance metrics:
Period-end loans held for investment	$	73,255		$	69,936		$	83,141
Average loans held for investment	70,368			69,947			80,718
Average yield on loans held for investment⁽⁴⁾	14.44		%	15.65		%	14.20		%
Total net revenue margin⁽⁵⁾	17.34			18.53			16.75
Net charge-off rate	3.89			3.67			4.35
30+ day performing delinquency rate	3.43			3.46			3.61
30+ day delinquency rate	3.43			3.46		%	3.61
Purchase volume⁽⁷⁾	$	50,377		$	47,420		$	48,918
International Card
Earnings:
Net interest income	$	273		$	265		$	266
Non-interest income	86			85			85
Total net revenue	359			350			351
Provision for credit losses	72			88			89
Non-interest expense	204			191			206
Income from continuing operations before taxes	83			71			56
Income tax provision	22			21			16
Income from continuing operations, net of tax	$	61		$	50		$	40
Selected performance metrics:
Period-end loans held for investment	$	8,050		$	8,031		$	8,614
Average loans held for investment	7,899			7,782			8,372
Average yield on loans held for investment	16.48		%	16.35		%	15.59		%
Total net revenue margin	18.20			17.99			16.77
Net charge-off rate	4.74			4.71			3.99
30+ day performing delinquency rate	3.71			3.86			3.58
30+ day delinquency rate	4.56			4.78			4.49
Nonperforming loan rate⁽³⁾	1.10			1.16			1.16
Purchase volume⁽⁷⁾	$	3,868		$	3,523		$	3,935

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary—Consumer Banking Business⁽¹⁾⁽²⁾

	2013			2013			2012
*(Dollars in millions) (unaudited)*	Q4			Q3			Q4
Consumer Banking
Earnings:
Net interest income	$	1,468		$	1,481		$	1,503
Non-interest income	195			184			161
Total net revenue	1,663			1,665			1,664
Provision for credit losses	212			202			169
Non-interest expense	1,018			927			992
Income from continuing operations before taxes	433			536			503
Income tax provision	154			191			178
Income from continuing operations, net of tax	$	279		$	345		$	325

Selected performance metrics:
Period-end loans held for investment	$	70,762		$	71,285		$	75,127
Average loans held for investment	71,033			71,664			76,098
Average yield on loans held for investment	6.30		%	6.21		%	5.94		%
Auto loan originations	$	4,322		$	4,752		$	3,479
Period-end deposits	167,652			168,437			172,396
Average deposits	167,870			169,082			172,654
Deposit interest expense rate	0.60		%	0.63		%	0.68		%
Core deposit intangible amortization	$	32		$	34		$	39
Net charge-off rate	1.09		%	0.95		%	0.88		%
30+ day performing delinquency rate	3.20			2.82			2.65
30+ day delinquency rate	3.89			3.46			3.34
Nonperforming loan rate⁽³⁾	0.86			0.79			0.85
Nonperforming asset rate^(3)(10)	1.12			1.01			1.02
Period-end loans serviced for others	$	7,665		$	14,043		$	15,333

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Commercial Banking Business⁽¹⁾⁽²⁾

	2013			2013			2012
(Dollars in millions) (unaudited)	Q4			Q3			Q4
Commercial Banking
Earnings:
Net interest income	$	504		$	480		$	450
Non-interest income	131			87			86
Total net revenue⁽⁸⁾	635			567			536
Provision for credit losses	(6)			31			(20)
Non-interest expense	326			266			294
Income from continuing operations before taxes	315			270			262
Income tax provision	113			96			93
Income from continuing operations, net of tax	$	202		$	174		$	169

Selected performance metrics:
Period-end loans held for investment	$	45,011		$	42,399		$	38,820
Average loans held for investment	43,359			41,576			37,598
Average yield on loans held for investment⁽⁸⁾	3.92		%	3.87		%	4.15		%
Period-end deposits	$	30,567		$	30,592		$	29,866
Average deposits	31,033			30,685			29,476
Deposit interest expense rate	0.25		%	0.27		%	0.28		%
Core deposit intangible amortization	$	6		$	6		$	8
Net charge-off rate	(0.05)		%	0.07		%	0.10		%
Nonperforming loan rate⁽³⁾	0.33			0.47			0.73
Nonperforming asset rate⁽³⁾	0.37			0.56			0.77

Risk category:⁽⁹⁾
Noncriticized	$	43,593		$	40,940		$	36,839
Criticized performing	1,007			968			1,340
Criticized nonperforming	149			201			282
Total risk-rated loans	44,749			42,109			38,461
Acquired commercial loans	262			290			359
Total commercial loans	$	45,011		$	42,399		$	38,820

% of period-end commercial loans held for investment:
Noncriticized	96.9		%	96.5		%	94.9		%
Criticized performing	2.2			2.3			3.5
Criticized nonperforming	0.3			0.5			0.7
Total risk-rated loans	99.4			99.3			99.1
Acquired commercial loans	0.6			0.7			0.9
Total commercial loans	100.0		%	100.0		%	100.0		%

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Other and Total⁽¹⁾⁽²⁾

	2013		2013		2012
(Dollars in millions) (unaudited)	Q4		Q3		Q4
Other
Earnings:
Net interest expense	$	(125)	$	(158)	$	(274)
Non-interest income	(38)		(14)		(34)
Total net revenue	(163)		(172)		(308)
Provision for credit losses	—		(1)		2
Non-interest expense	68		50		36
Loss from continuing operations before taxes	(231)		(221)		(346)
Income tax benefit	(116)		(138)		(180)
Loss from continuing operations, net of tax	$	(115)	$	(83)	$	(166)

Selected performance metrics:
Period-end loans held for investment	$	121	$	163	$	187
Average loans held for investment	154		166		158
Period-end deposits	6,304		7,805		10,223
Average deposits	6,803		8,573		11,364
Total
Earnings:
Net interest income	$	4,423	$	4,560	$	4,528
Non-interest income	1,121		1,091		1,096
Total net revenue	5,544		5,651		5,624
Provision for credit losses	957		849		1,151
Non-interest expense	3,280		3,147		3,255
Income from continuing operations before taxes	1,307		1,655		1,218
Income tax provision	425		525		370
Income from continuing operations, net of tax	$	882	$	1,130	$	848

Selected performance metrics:
Period-end loans held for investment	$	197,199	$	191,814	$	205,889
Average loans held for investment	192,813		191,135		202,944
Period-end deposits	204,523		206,834		212,485
Average deposits	205,706		208,340		213,494

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Notes to Loan and Business Segment Disclosures (Tables 7 - 11)

⁽¹⁾ Certain prior period amounts have been reclassified to conform to the current period presentation.

⁽²⁾ Loans acquired as part of the ING Direct, Chevy Chase Bank and 2012 U.S. card acquisitions are included in the denominator used in calculating our reported credit quality metrics. We therefore present certain reported credit quality metrics, adjusted to exclude from the denominator acquired loans accounted for based on estimated cash flows expected to be collected over the life of the loans (formerly "SOP 03-3"). The table below presents amounts related to acquired loans accounted for under SOP 03-3.

2013

2012

(Dollars in millions) (unaudited)

Acquired loans accounted for under SOP 03-3:

Period-end unpaid principal balance

29,761

31,377

38,477

Period-end loans held for investment

28,550

30,080

37,134

Average loans held for investment

29,055

30,713

37,899

⁽³⁾ Nonperforming assets consist of nonperforming loans, real estate owned ("REO") and other foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each category divided by the combined period-end total of loans held for investment, REO and other foreclosed assets for each respective category. The nonperforming loan ratios are calculated based on nonperforming loans for each category divided by period-end loans held for investment for each respective category.

⁽⁴⁾ The transfer of the Best Buy Stores, L.P. ("Best Buy") portfolio to held for sale resulted in an increase in the average yield for Domestic Card and Total Credit Card of 121 basis points and 110 basis points, respectively, in Q3 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.

⁽⁵⁾ The transfer of the Best Buy portfolio to held for sale resulted in an increase in the net revenue margin for Domestic Card and Total Credit Card of 136 basis points and 123 basis points, respectively, in Q3 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.

⁽⁶⁾ Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the 2012 U.S. card acquisition.

⁽⁷⁾ Includes credit card purchase transactions, net of returns for both loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.

⁽⁸⁾ Because some of our tax-related commercial investments generate tax-exempt income or tax credits, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35%.

⁽⁹⁾ Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.

⁽¹⁰⁾ As reported in the third quarter 2013 Form 10-Q, we have begun including the net realizable value of auto loans that have been charged down as a result of a bankruptcy filing in addition to repossessed assets obtained in satisfaction of auto loans. Prior period amounts have been adjusted to conform to current period presentation.

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I

In addition to disclosing regulatory capital measures under Basel I, we also report certain non-GAAP measures that management uses in assessing its capital adequacy. These non-GAAP measures include average tangible assets, average tangible common equity, tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our Basel I regulatory capital and non-GAAP measures. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.

	2013			2013			2012
(Dollars in millions)(unaudited)	Q4			Q3			Q4
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity	$	42,463		$	41,284		$	40,212
Adjustments: Average goodwill and other intangible assets ⁽¹⁾	(16,564)			(15,829)			(16,340)
Noncumulative perpetual preferred stock⁽²⁾	(853)			(853)			(853)
Average tangible common equity⁽³⁾	$	25,046		$	24,602		$	23,019
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity	$	41,744		$	41,750		$	40,499
Adjustments: Goodwill and other intangible assets ⁽¹⁾	(16,568)			(15,760)			(16,224)
Noncumulative perpetual preferred stock⁽²⁾	(853)			(853)			(853)
Tangible common equity⁽³⁾	$	24,323		$	25,137		$	23,422
Total Assets to Tangible Assets
Total assets	$	297,048		$	289,888		$	312,918
Adjustments: Goodwill and other intangible assets⁽¹⁾	(16,568)			(15,760)			(16,224)
Tangible assets	$	280,480		$	274,128		$	296,694
Total Average Assets to Average Tangible Assets
Average total assets	$	294,108		$	294,939		$	308,096
Adjustments: Average goodwill and other intangible assets ⁽¹⁾	(16,564)			(15,829)			(16,340)
Average tangible assets	$	277,544		$	279,110		$	291,756
Non-GAAP TCE Ratio
TCE ratio⁽³⁾	8.7		%	9.2		%	7.9		%
Regulatory Capital Ratios⁽⁴⁾
Total stockholders' equity	$	41,744		$	41,750		$	40,499
Adjustments: Net unrealized (gains) losses on AFS securities recorded in AOCI⁽⁵⁾	791			736			(712)
Net losses on cash flow hedges recorded in AOCI⁽⁵⁾	136			123			2
Disallowed goodwill and other intangible assets	(14,326)			(14,263)			(14,428)
Disallowed deferred tax assets	—			—			—
Noncumulative perpetual preferred stock⁽²⁾	(853)			(853)			(853)
Other	(5)			(5)			(12)
Tier 1 common capital	27,847			27,488			24,496
Adjustments: Noncumulative perpetual preferred stock⁽²⁾	853			853			853
Tier 1 restricted core capital items⁽⁶⁾	2			2			2
Tier 1 capital	28,342			28,343			25,351
Adjustments: Long-term debt qualifying as Tier 2 capital	1,914			1,909			2,119
Qualifying allowance for loan and lease losses	2,841			2,726			2,830
Other Tier 2 components	10			8			13
Tier 2 capital	4,765			4,643			4,962
Total risk-based capital⁽⁷⁾	$	33,107		$	32,986		$	30,313

Risk-weighted assets⁽⁸⁾	$	225,199		$	215,829		$	223,472
Tier 1 common ratio⁽⁹⁾	12.2		%	12.7		%	11.0		%
Tier 1 risk-based capital ratio⁽¹⁰⁾	12.6			13.1			11.3
Total risk-based capital ratio⁽¹¹⁾	14.7			15.3			13.6

___________

⁽¹⁾Includes impact from related deferred taxes.

⁽²⁾ Noncumulative perpetual preferred stock qualifies for Tier 1 capital; however, it is excluded from Tier 1 common capital.

⁽³⁾ TCE ratio is a non-GAAP measure calculated based on tangible common equity divided by tangible assets.

⁽⁴⁾ Regulatory capital ratios as of the end of Q4 2013 are preliminary and therefore subject to change.

⁽⁵⁾ Amounts presented are net of tax.

⁽⁶⁾ Consists primarily of trust preferred securities.

⁽⁷⁾ Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.

⁽⁸⁾Calculated based on prescribed regulatory guidelines.

⁽⁹⁾Tier 1 common ratio is a regulatory capital measure calculated based on Tier 1 common capital divided by risk-weighted assets.

⁽¹⁰⁾ Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.

⁽¹¹⁾ Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighted assets.

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