Capital One Reports Fourth Quarter 2018 Net Income of $1.3 billion, or $2.48 per share

Excluding adjusting items, Fourth Quarter 2018 Net Income of $1.87 per share(1)

News provided by

Jan 22, 2019, 16:05 ET

MCLEAN, Va., Jan. 22, 2019 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2018 of $1.3 billion, or $2.48 per diluted common share, compared with net income of $1.5 billion, or $2.99 per diluted common share in the third quarter of 2018, and with net loss of $971 million, or $2.17 per diluted common share in the fourth quarter of 2017. Excluding adjusting items, net income for the fourth quarter of 2018 was $1.87 per diluted common share⁽¹⁾.

"In the fourth quarter, Capital One posted solid results as we invest to grow and to drive our digital transformation," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "For full year 2018, we delivered 41 percent growth in earnings per share, excluding adjusting items⁽¹⁾."

Adjusting items in the fourth quarter of 2018, which are excluded from diluted EPS and our 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
Benefit as a result of tax methodology change on rewards costs	$	284	$	0.60
Net gains on the sales of exited businesses	74		0.12
U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve")	(50)		(0.11)

All comparisons below are for the fourth quarter of 2018 compared with the third quarter of 2018 unless otherwise noted.

Fourth Quarter 2018 Income Statement Summary:

Total net revenue increased 1 percent to $7.0 billion.
Recognized net gains of $74 million on the sales of exited businesses.

⁽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. Growth in earnings

per share, excluding adjusting items provides useful information to users of our financial information largely due

to the impacts of the Tax Act on full year 2017 results. See Table 15 in Exhibit 99.2 for a reconciliation of our

selected reported results to these non-GAAP measures.

Total non-interest expense increased 10 percent to $4.1 billion:

65 percent increase in marketing.
1 percent increase in operating expenses.

Pre-provision earnings decreased 10 percent to $2.9 billion⁽²⁾.
Provision for credit losses increased 29 percent to $1.6 billion:

Net charge-offs of $1.6 billion.
$28 million reserve build.

Net interest margin of 6.96 percent, decreased 5 basis points.
Efficiency ratio of 58.92 percent.

Efficiency ratio excluding adjusting items was 58.92 percent⁽¹⁾.

Operating efficiency ratio of 47.07 percent.

Operating efficiency ratio excluding adjusting items was 46.97 percent⁽¹⁾.

Fourth Quarter 2018 Balance Sheet Summary:

Common equity Tier 1 capital ratio under Basel III Standardized Approach of 11.2 percent at December 31, 2018.
Period-end loans held for investment in the quarter increased $7.1 billion, or 3 percent, to $245.9 billion.

Credit Card period-end loans increased $5.7 billion, or 5 percent, to $116.4 billion.

Domestic Card period-end loans increased $5.8 billion, or 6 percent, to $107.4 billion.

Consumer Banking period-end loans decreased $124 million, or less than 1 percent, to $59.2 billion.

Auto period-end loans decreased $81 million, or less than 1 percent, to $56.3 billion.

Commercial Banking period-end loans increased $1.6 billion, or 2 percent, to $70.3 billion.

Average loans held for investment in the quarter increased $4.6 billion, or 2 percent, to $241.4 billion.

Credit Card average loans increased $2.8 billion, or 3 percent, to $112.3 billion.

Domestic Card average loans increased $2.8 billion, or 3 percent, to $103.4 billion.

Consumer Banking average loans increased $122 million, or less than 1 percent, to $59.3 billion.

Auto average loans increased $172 million, or less than 1 percent, to $56.5 billion.

Commercial Banking average loans increased $1.6 billion, or 2 percent, to $69.7 billion.

Period-end total deposits increased $2.6 billion, or 1 percent, to $249.8 billion, while average deposits increased $943 million, or less than 1 percent, to $247.7 billion.
Interest-bearing deposits rate paid increased 13 basis points to 1.36 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.

All comparisons below are for the full year of 2018 compared with the full year of 2017 unless otherwise noted.

2018 Full Year Income Statement Summary:

Total net revenue increased 3 percent to $28.1 billion.
Recognized net gains of $615 million on the sales of exited businesses.
Total non-interest expense increased 5 percent to $14.9 billion:

30 percent increase in marketing.
2 percent increase in operating expenses.

Pre-provision earnings increased 1 percent to $13.2 billion⁽²⁾.
Provision for credit losses decreased 22 percent to $5.9 billion.
Efficiency ratio of 53.08 percent.

Efficiency ratio excluding adjusting items was 53.11 percent⁽¹⁾.

Operating efficiency ratio of 45.33 percent.

Operating efficiency ratio excluding adjusting items was 45.21 percent⁽¹⁾.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 22, 2019 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About Us," then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through February 5, 2019 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2017.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $249.8 billion in deposits and $372.5 billion in total assets as of December 31, 2018. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

⁽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.

Exhibit 99.2

Capital One Financial Corporation
Financial Supplement⁽¹⁾⁽²⁾
Fourth Quarter 2018
Table of Contents

Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	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, 2018 once it is filed with the Securities and Exchange Commission.
⁽²⁾	This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. ("GAAP"), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.

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

											2018 Q4 vs.				Year Ended December 31,
(Dollars in millions, except per share data and as noted)	2018		2018		2018		2018		2017		2018		2017						2018 vs.
(Dollars in millions, except per share data and as noted)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2018		2017		2017
Income Statement
Net interest income	$	5,820	$	5,786	$	5,551	$	5,718	$	5,813	1	%	—		$	22,875	$	22,460	2	%
Non-interest income	1,193		1,176		1,641		1,191		1,200		1		(1)	%	5,201		4,777		9
Total net revenue⁽¹⁾	7,013		6,962		7,192		6,909		7,013		1		—		28,076		27,237		3
Provision for credit losses	1,638		1,268		1,276		1,674		1,926		29		(15)		5,856		7,551		(22)
Non-interest expense:
Marketing	831		504		425		414		460		65		81		2,174		1,670		30
Operating expenses	3,301		3,269		2,999		3,159		3,319		1		(1)		12,728		12,524		2
Total non-interest expense	4,132		3,773		3,424		3,573		3,779		10		9		14,902		14,194		5
Income from continuing operations before income taxes	1,243		1,921		2,492		1,662		1,308		(35)		(5)		7,318		5,492		33
Income tax provision (benefit)	(21)		420		575		319		2,170		**		**		1,293		3,375		(62)
Income (loss) from continuing operations, net of tax	1,264		1,501		1,917		1,343		(862)		(16)		**		6,025		2,117		185
Income (loss) from discontinued operations, net of tax	(3)		1		(11)		3		(109)		**		(97)		(10)		(135)		(93)
Net income (loss)	1,261		1,502		1,906		1,346		(971)		(16)		**		6,015		1,982		**
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(9)		(9)		(12)		(10)		(1)		—		**		(40)		(13)		**
Preferred stock dividends	(80)		(53)		(80)		(52)		(80)		51		—		(265)		(265)		—
Net income (loss) available to common stockholders	$	1,172	$	1,440	$	1,814	$	1,284	$	(1,052)	(19)		**		$	5,710	$	1,704	**
Common Share Statistics
Basic earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	2.50	$	3.01	$	3.76	$	2.63	$	(1.95)	(17)	%	**		$	11.92	$	3.80	**
Income (loss) from discontinued operations	(0.01)		—		(0.02)		0.01		(0.22)		**		(95)	%	(0.02)		(0.28)		(93)	%
Net income (loss) per basic common share	$	2.49	$	3.01	$	3.74	$	2.64	$	(2.17)	(17)		**		$	11.90	$	3.52	**
Diluted earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	2.49	$	2.99	$	3.73	$	2.61	$	(1.95)	(17)		**		$	11.84	$	3.76	**
Income (loss) from discontinued operations	(0.01)		—		(0.02)		0.01		(0.22)		**		(95)		(0.02)		(0.27)		(93)
Net income (loss) per diluted common share	$	2.48	$	2.99	$	3.71	$	2.62	$	(2.17)	(17)		**		$	11.82	$	3.49	**
Weighted-average common shares outstanding (in millions):
Basic	470.0		477.8		485.1		486.9		485.7		(2)		(3)		479.9		484.2		(1)
Diluted	472.7		480.9		488.3		490.8		485.7		(2)		(3)		483.1		488.6		(1)
Common shares outstanding (period-end, in millions)	467.7		473.7		478.4		485.9		485.5		(1)		(4)		467.7		485.5		(4)
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)⁽³⁾	69.20		66.15		63.86		61.29		60.28		5		15		69.20		60.28		15

											2018 Q4 vs.				Year Ended December 31,
(Dollars in millions)	2018		2018		2018		2018		2017		2018		2017						2018 vs.
(Dollars in millions)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2018		2017		2017
Balance Sheet (Period-End)
Loans held for investment	$	245,899	$	238,761	$	236,124	$	248,256	$	254,473	3	%	(3)	%	$	245,899	$	254,473	(3)	%
Interest-earning assets	341,293		331,293		332,167		332,251		334,124		3		2		341,293		334,124		2
Total assets	372,538		362,909		363,989		362,857		365,693		3		2		372,538		365,693		2
Interest-bearing deposits	226,281		222,356		222,605		224,671		217,298		2		4		226,281		217,298		4
Total deposits	249,764		247,195		248,225		250,847		243,702		1		2		249,764		243,702		2
Borrowings	58,905		52,205		53,310		50,693		60,281		13		(2)		58,905		60,281		(2)
Common equity	47,307		46,277		45,566		44,842		44,370		2		7		47,307		44,370		7
Total stockholders' equity	51,668		50,638		49,926		49,203		48,730		2		6		51,668		48,730		6
Balance Sheet (Average Balances)
Loans held for investment	$	241,371	$	236,766	$	240,758	$	249,726	$	252,566	2	%	(4)	%	$	242,118	$	245,565	(1)	%
Interest-earning assets	334,714		330,272		333,495		330,183		330,742		1		1		332,738		322,330		3
Total assets	365,243		360,937		363,929		362,049		363,045		1		1		363,036		354,924		2
Interest-bearing deposits	222,827		221,431		223,079		219,670		215,258		1		4		221,760		213,949		4
Total deposits	247,663		246,720		248,790		245,270		241,562		—		3		247,117		239,882		3
Borrowings	53,994		51,684		52,333		54,588		58,109		4		(7)		53,144		53,659		(1)
Common equity	46,753		46,407		45,466		44,670		46,350		1		1		45,831		45,170		1
Total stockholders' equity	51,114		50,768		49,827		49,031		50,710		1		1		50,192		49,530		1

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

																2018 Q4 vs.				Year Ended December 31,
(Dollars in millions, except as noted)	2018			2018			2018			2018			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2018			2017			2017
Performance Metrics
Net interest income growth (period over period)	1		%	4		%	(3)		%	(2)		%	2		%	**		**		2		%	8		%	**
Non-interest income growth (period over period)	1			(28)			38			(1)			(7)			**		**		9			3			**
Total net revenue growth (period over period)	1			(3)			4			(1)			—			**		**		3			7			**
Total net revenue margin⁽⁴⁾	8.38			8.43			8.63			8.37			8.48			(5)	bps	(10)	bps	8.44			8.45			(1)	bps
Net interest margin⁽⁵⁾	6.96			7.01			6.66			6.93			7.03			(5)		(7)		6.87			6.97			(10)
Return on average assets	1.38			1.66			2.11			1.48			(0.95)			(28)		233		1.66			0.60			106
Return on average tangible assets⁽⁶⁾	1.44			1.74			2.20			1.55			(0.99)			(30)		243		1.73			0.62			111
Return on average common equity⁽⁷⁾	10.05			12.40			16.06			11.47			(8.14)			(2)	%	18	%	12.48			4.07			8	%
Return on average tangible common equity⁽⁸⁾	14.78			18.32			23.99			17.32			(12.12)			(4)		27		18.56			6.16			12
Non-interest expense as a percentage of average loans held for investment	6.85			6.37			5.69			5.72			5.98			48	bps	87	bps	6.15			5.78			37	bps
Efficiency ratio⁽⁹⁾	58.92			54.19			47.61			51.72			53.89			5	%	5	%	53.08			52.11			1	%
Operating efficiency ratio⁽¹⁰⁾	47.07			46.95			41.70			45.72			47.33			—		—		45.33			45.98			(1)
Effective income tax rate for continuing operations	(1.7)			21.9			23.1			19.2			165.9			(24)		(168)		17.7			61.5			(44)
Employees (in thousands), period-end	47.6			47.6			47.8			47.9			49.3			—		(3)		47.6			49.3			(3)
Credit Quality Metrics
Allowance for loan and lease losses	$	7,220		$	7,219		$	7,368		$	7,567		$	7,502		—		(4)	%	$	7,220		$	7,502		(4)	%
Allowance as a percentage of loans held for investment	2.94		%	3.02		%	3.12		%	3.05		%	2.95		%	(8)	bps	(1)	bps	2.94		%	2.95		%	(1)	bps
Net charge-offs	$	1,610		$	1,425		$	1,459		$	1,618		$	1,828		13	%	(12)	%	$	6,112		$	6,562		(7)	%
Net charge-off rate⁽¹¹⁾	2.67		%	2.41		%	2.42		%	2.59		%	2.89		%	26	bps	(22)	bps	2.52		%	2.67		%	(15)	bps
30+ day performing delinquency rate	3.62			3.28			2.88			2.72			3.23			34		39		3.62			3.23			39
30+ day delinquency rate	3.84			3.48			3.05			2.91			3.48			36		36		3.84			3.48			36
Capital Ratios⁽¹²⁾
Common equity Tier 1 capital	11.2		%	11.2		%	11.1		%	10.5		%	10.3		%	—		90	bps	11.2		%	10.3		%	90	bps
Tier 1 capital	12.7			12.8			12.6			12.0			11.8			(10)	bps	90		12.7			11.8			90
Total capital	15.1			15.2			15.1			14.5			14.4			(10)		70		15.1			14.4			70
Tier 1 leverage	10.7			10.6			10.3			10.1			9.9			10		80		10.7			9.9			80
Tangible common equity ("TCE")⁽¹³⁾	9.1			9.0			8.8			8.6			8.3			10		80		9.1			8.3			80

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

											2018 Q4 vs.				Year Ended December 31,
	2018		2018		2018		2018		2017		2018		2017						2018 vs.
(Dollars in millions, except per share data and as noted)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2018		2017		2017
Interest income:
Loans, including loans held for sale	$	6,358	$	6,247	$	5,989	$	6,134	$	6,133	2	%	4	%	$	24,728	$	23,388	6	%
Investment securities	627		593		539		452		431		6		45		2,211		1,711		29
Other	63		55		68		51		40		15		58		237		123		93
Total interest income	7,048		6,895		6,596		6,637		6,604		2		7		27,176		25,222		8
Interest expense:
Deposits	756		681		622		539		457		11		65		2,598		1,602		62
Securitized debt obligations	138		127		124		107		91		9		52		496		327		52
Senior and subordinated notes	297		288		289		251		209		3		42		1,125		731		54
Other borrowings	37		13		10		22		34		185		9		82		102		(20)
Total interest expense	1,228		1,109		1,045		919		791		11		55		4,301		2,762		56
Net interest income	5,820		5,786		5,551		5,718		5,813		1		—		22,875		22,460		2
Provision for credit losses	1,638		1,268		1,276		1,674		1,926		29		(15)		5,856		7,551		(22)
Net interest income after provision for credit losses	4,182		4,518		4,275		4,044		3,887		(7)		8		17,019		14,909		14
Non-interest income:
Interchange fees, net	743		714		723		643		665		4		12		2,823		2,573		10
Service charges and other customer-related fees	352		410		391		432		394		(14)		(11)		1,585		1,597		(1)
Net securities gains (losses)	(20)		(196)		(1)		8		1		(90)		**		(209)		65		**
Other	118		248		528		108		140		(52)		(16)		1,002		542		85
Total non-interest income	1,193		1,176		1,641		1,191		1,200		1		(1)		5,201		4,777		9
Non-interest expense:
Salaries and associate benefits	1,345		1,432		1,430		1,520		1,521		(6)		(12)		5,727		5,899		(3)
Occupancy and equipment	610		515		503		490		523		18		17		2,118		1,939		9
Marketing	831		504		425		414		460		65		81		2,174		1,670		30
Professional services	426		275		234		210		274		55		55		1,145		1,097		4
Communications and data processing	326		311		317		306		306		5		7		1,260		1,177		7
Amortization of intangibles	43		44		43		44		61		(2)		(30)		174		245		(29)
Other	551		692		472		589		634		(20)		(13)		2,304		2,167		6
Total non-interest expense	4,132		3,773		3,424		3,573		3,779		10		9		14,902		14,194		5
Income from continuing operations before income taxes	1,243		1,921		2,492		1,662		1,308		(35)		(5)		7,318		5,492		33
Income tax provision (benefit)	(21)		420		575		319		2,170		**		**		1,293		3,375		(62)
Income (loss) from continuing operations, net of tax	1,264		1,501		1,917		1,343		(862)		(16)		**		6,025		2,117		185
Income (loss) from discontinued operations, net of tax	(3)		1		(11)		3		(109)		**		(97)		(10)		(135)		(93)
Net income (loss)	1,261		1,502		1,906		1,346		(971)		(16)		**		6,015		1,982		**
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(9)		(9)		(12)		(10)		(1)		—		**		(40)		(13)		**
Preferred stock dividends	(80)		(53)		(80)		(52)		(80)		51		—		(265)		(265)		—
Net income (loss) available to common stockholders	$	1,172	$	1,440	$	1,814	$	1,284	$	(1,052)	(19)		**		$	5,710	$	1,704	**

											2018 Q4 vs.				Year Ended December 31,
	2018		2018		2018		2018		2017		2018		2017						2018 vs.
(Dollars in millions, except per share data and as noted)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2018		2017		2017
Basic earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	2.50	$	3.01	$	3.76	$	2.63	$	(1.95)	(17)	%	**		$	11.92	$	3.80	**
Income (loss) from discontinued operations	(0.01)		—		(0.02)		0.01		(0.22)		**		(95)	%	(0.02)		(0.28)		(93)	%
Net income (loss) per basic common share	$	2.49	$	3.01	$	3.74	$	2.64	$	(2.17)	(17)		**		$	11.90	$	3.52	**
Diluted earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	2.49	$	2.99	$	3.73	$	2.61	$	(1.95)	(17)		**		$	11.84	$	3.76	**
Income (loss) from discontinued operations	(0.01)		—		(0.02)		0.01		(0.22)		**		(95)		(0.02)		(0.27)		(93)
Net income (loss) per diluted common share	$	2.48	$	2.99	$	3.71	$	2.62	$	(2.17)	(17)		**		$	11.82	$	3.49	**
Weighted-average common shares outstanding (in millions):
Basic common shares	470.0		477.8		485.1		486.9		485.7		(2)		(3)		479.9		484.2		(1)
Diluted common shares	472.7		480.9		488.3		490.8		485.7		(2)		(3)		483.1		488.6		(1)

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

											2018 Q4 vs.
	2018		2018		2018		2018		2017		2018		2017
(Dollars in millions)	Q4		Q3		Q2		Q1		Q4		Q3		Q4
Assets:
Cash and cash equivalents:
Cash and due from banks	$	4,768	$	4,547	$	4,499	$	4,220	$	4,458	5	%	7	%
Interest-bearing deposits and other short-term investments	8,418		6,335		7,774		9,788		9,582		33		(12)
Total cash and cash equivalents	13,186		10,882		12,273		14,008		14,040		21		(6)
Restricted cash for securitization investors	303		746		1,023		309		312		(59)		(3)
Investment securities:
Securities available for sale	46,150		47,384		50,691		47,155		37,655		(3)		23
Securities held to maturity	36,771		34,631		33,464		23,075		28,984		6		27
Total investment securities	82,921		82,015		84,155		70,230		66,639		1		24
Loans held for investment:
Unsecuritized loans held for investment	211,702		204,796		201,222		213,313		218,806		3		(3)
Loans held in consolidated trusts	34,197		33,965		34,902		34,943		35,667		1		(4)
Total loans held for investment	245,899		238,761		236,124		248,256		254,473		3		(3)
Allowance for loan and lease losses	(7,220)		(7,219)		(7,368)		(7,567)		(7,502)		—		(4)
Net loans held for investment	238,679		231,542		228,756		240,689		246,971		3		(3)
Loans held for sale, at lower of cost or fair value	1,192		1,402		1,480		1,498		971		(15)		23
Premises and equipment, net	4,191		4,149		4,095		4,055		4,033		1		4
Interest receivable	1,614		1,518		1,493		1,496		1,536		6		5
Goodwill	14,544		14,513		14,531		14,536		14,533		—		—
Other assets	15,908		16,142		16,183		16,036		16,658		(1)		(5)
Total assets	$	372,538	$	362,909	$	363,989	$	362,857	$	365,693	3		2

											2018 Q4 vs.
	2018		2018		2018		2018		2017		2018		2017
(Dollars in millions)	Q4		Q3		Q2		Q1		Q4		Q3		Q4
Liabilities:
Interest payable	$	458	$	391	$	450	$	353	$	413	17	%	11	%
Deposits:
Non-interest-bearing deposits	23,483		24,839		25,620		26,176		26,404		(5)		(11)
Interest-bearing deposits	226,281		222,356		222,605		224,671		217,298		2		4
Total deposits	249,764		247,195		248,225		250,847		243,702		1		2
Securitized debt obligations	18,307		18,649		19,649		18,665		20,010		(2)		(9)
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	352		384		553		656		576		(8)		(39)
Senior and subordinated notes	30,826		31,291		32,920		31,051		30,755		(1)		—
Other borrowings	9,420		1,881		188		321		8,940		**		5
Total other debt	40,598		33,556		33,661		32,028		40,271		21		1
Other liabilities	11,743		12,480		12,078		11,761		12,567		(6)		(7)
Total liabilities	320,870		312,271		314,063		313,654		316,963		3		1

Stockholders' equity:
Preferred stock	0		0		0		0		0		—		—
Common stock	7		7		7		7		7		—		—
Additional paid-in capital, net	32,040		31,978		31,868		31,779		31,656		—		1
Retained earnings	35,875		34,883		33,626		31,996		30,700		3		17
Accumulated other comprehensive loss	(1,263)		(1,877)		(1,793)		(1,599)		(926)		(33)		36
Treasury stock, at cost	(14,991)		(14,353)		(13,782)		(12,980)		(12,707)		4		18
Total stockholders' equity	51,668		50,638		49,926		49,203		48,730		2		6
Total liabilities and stockholders' equity	$	372,538	$	362,909	$	363,989	$	362,857	$	365,693	3		2

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 $391 million in Q4 2018, $305 million in Q3 2018, $309 million in Q2 2018, $335 million in Q1 2018 and $377 million in Q4 2017 for the estimated uncollectible amount of billed finance charges and fees and related losses.
⁽²⁾	Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
⁽³⁾	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
⁽⁴⁾	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
⁽⁵⁾	Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
⁽⁶⁾	Return on average tangible assets is a non-GAAP measure calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
⁽⁷⁾	Return on average common equity is calculated based on annualized (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.
⁽⁸⁾	Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Our calculation of ROTCE may not be comparable to similarly-titled measures reported by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
⁽⁹⁾	Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
⁽¹⁰⁾	Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
⁽¹¹⁾	Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
⁽¹²⁾	Capital ratios as of the end of Q4 2018 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.
⁽¹³⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
**	Not meaningful.

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

	2018 Q4						2018 Q3						2017 Q4
	Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾
(Dollars in millions, except as noted)	Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans, including loans held for sale	$	242,534	$	6,358	10.49	%	$	238,150	$	6,247	10.49	%	$	254,080	$	6,133	9.66	%
Investment securities	83,391		627		3.01		83,894		593		2.83		68,992		431		2.50
Cash equivalents and other	8,789		63		2.87		8,228		55		2.66		7,670		40		2.09
Total interest-earning assets	$	334,714	$	7,048	8.42		$	330,272	$	6,895	8.35		$	330,742	$	6,604	7.99
Interest-bearing liabilities:
Interest-bearing deposits	$	222,827	$	756	1.36		$	221,431	$	681	1.23		$	215,258	$	457	0.85
Securitized debt obligations	18,312		138		2.99		18,917		127		2.68		19,751		91		1.84
Senior and subordinated notes	30,831		297		3.86		31,660		288		3.63		30,020		209		2.78
Other borrowings and liabilities	6,123		37		2.43		3,084		13		1.67		10,355		34		1.31
Total interest-bearing liabilities	$	278,093	$	1,228	1.77		$	275,092	$	1,109	1.62		$	275,384	$	791	1.15
Net interest income/spread			$	5,820	6.65				$	5,786	6.73				$	5,813	6.84
Impact of non-interest-bearing funding					0.31						0.28						0.19
Net interest margin					6.96	%					7.01	%					7.03	%

							Year Ended December 31,
							2018						2017
							Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾
(Dollars in millions, except as noted)							Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/ Expense⁽¹⁾		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans, including loans held for sale							$	243,371	$	24,728	10.16	%	$	246,613	$	23,388	9.48	%
Investment securities							79,224		2,211		2.79		68,896		1,711		2.48
Cash equivalents and other							10,143		237		2.33		6,821		123		1.80
Total interest-earning assets							$	332,738	$	27,176	8.17		$	322,330	$	25,222	7.82
Interest-bearing liabilities:
Interest-bearing deposits							$	221,760	$	2,598	1.17		$	213,949	$	1,602	0.75
Securitized debt obligations							19,014		496		2.61		18,237		327		1.79
Senior and subordinated notes							31,295		1,125		3.60		27,866		731		2.62
Other borrowings and liabilities							4,028		82		2.04		8,917		102		1.14
Total interest-bearing liabilities							$	276,097	$	4,301	1.56		$	268,969	$	2,762	1.03
Net interest income/spread									$	22,875	6.61				$	22,460	6.79
Impact of non-interest-bearing funding											0.26						0.18
Net interest margin											6.87	%					6.97	%

__________

⁽¹⁾

Interest income and interest expense and the calculation of average yields on interest-earning assets and

average rates on interest-bearing liabilities include the impact of hedge accounting. In the first quarter of

2018, we adopted Accounting Standard Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted

Improvements to Accounting for Hedging Activities. As a result, interest income and interest expense

amounts shown above include $1 million and $2 million for Q4 2018, respectively, and $2 million and $38

million for the year ended December 31, 2018, respectively, related to hedge ineffectiveness that was

previously included in other non-interest income.

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

																2018 Q4 vs.				Year Ended December 31,
(Dollars in millions, except as noted)	2018 Q4			2018 Q3			2018 Q2			2018 Q1			2017 Q4			2018 Q3		2017 Q4		2018			2017			2018 vs. 2017
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card	$	107,350		$	101,564		$	100,714		$	98,535		$	105,293		6	%	2	%	$	107,350		$	105,293		2	%
International card businesses	9,011			9,121			9,063			9,041			9,469			(1)		(5)		9,011			9,469			(5)
Total credit card	116,361			110,685			109,777			107,576			114,762			5		1		116,361			114,762			1
Consumer banking:
Auto	56,341			56,422			55,781			54,811			53,991			—		4		56,341			53,991			4
Home loan⁽¹⁾	—			—			—			16,630			17,633			**		**		—			17,633			**
Retail banking	2,864			2,907			2,946			3,233			3,454			(1)		(17)		2,864			3,454			(17)
Total consumer banking	59,205			59,329			58,727			74,674			75,078			—		(21)		59,205			75,078			(21)
Commercial banking:
Commercial and multifamily real estate	28,899			29,064			28,292			27,360			26,150			(1)		11		28,899			26,150			11
Commercial and industrial	41,091			39,325			38,948			38,208			38,025			4		8		41,091			38,025			8
Total commercial lending	69,990			68,389			67,240			65,568			64,175			2		9		69,990			64,175			9
Small-ticket commercial real estate	343			358			369			385			400			(4)		(14)		343			400			(14)
Total commercial banking	70,333			68,747			67,609			65,953			64,575			2		9		70,333			64,575			9
Other loans	—			—			11			53			58			**		**		—			58			**
Total loans held for investment	$	245,899		$	238,761		$	236,124		$	248,256		$	254,473		3		(3)		$	245,899		$	254,473		(3)
Loans Held for Investment (Average)
Credit card:
Domestic credit card	$	103,391		$	100,566		$	98,895		$	100,450		$	101,087		3	%	2	%	$	100,832		$	94,923		6	%
International card businesses	8,958			8,944			8,998			9,052			8,942			—		—		8,988			8,545			5
Total credit card	112,349			109,510			107,893			109,502			110,029			3		2		109,820			103,468			6
Consumer banking:
Auto	56,469			56,297			55,298			54,344			53,747			—		5		55,610			51,477			8
Home loan⁽¹⁾	—			—			8,098			17,224			18,109			**		**		6,266			19,681			(68)
Retail banking	2,873			2,923			3,084			3,429			3,433			(2)		(16)		3,075			3,463			(11)
Total consumer banking	59,342			59,220			66,480			74,997			75,289			—		(21)		64,951			74,621			(13)
Commercial banking:
Commercial and multifamily real estate	28,855			28,354			27,302			26,542			27,770			2		4		27,771			27,370			1
Commercial and industrial	40,476			39,318			38,686			38,246			39,020			3		4		39,188			39,606			(1)
Total commercial lending	69,331			67,672			65,988			64,788			66,790			2		4		66,959			66,976			—
Small-ticket commercial real estate	349			364			376			393			410			(4)		(15)		371			442			(16)
Total commercial banking	69,680			68,036			66,364			65,181			67,200			2		4		67,330			67,418			—
Other loans	—			—			21			46			48			**		**		17			58			(71)
Total average loans held for investment	$	241,371		$	236,766		$	240,758		$	249,726		$	252,566		2		(4)		$	242,118		$	245,565		(1)

																2018 Q4 vs.				Year Ended December 31,
	2018 Q4			2018 Q3			2018 Q2			2018 Q1			2017 Q4			2018 Q3		2017 Q4		2018			2017			2018 vs. 2017
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card⁽²⁾		4.64	%		4.35	%		4.72	%		5.26	%		5.08	%	29	bps	(44)	bps		4.74	%		4.99	%	(25)	bps
International card businesses		4.22			1.92			4.14			2.49			3.92		230		30			3.19			3.69		(50)
Total credit card⁽²⁾		4.61			4.15			4.67			5.03			4.99		46		(38)			4.62			4.88		(26)
Consumer banking:
Auto		1.98			1.73			1.32			1.53			2.12		25		(14)			1.64			1.86		(22)
Home loan⁽¹⁾		—			—			—			(0.03)			0.23		**		**			(0.02)			0.08		**
Retail banking		2.56			2.62			2.07			1.89			1.94		(6)		62			2.26			1.92		34
Total consumer banking		2.01			1.77			1.19			1.19			1.66		24		35			1.51			1.39		12
Commercial banking:
Commercial and multifamily real estate		(0.01)			0.04			—			—			(0.01)		(5)		—			0.01			—		1
Commercial and industrial		0.17			0.25			(0.07)			0.20			1.47		(8)		(130)			0.14			1.17		(103)
Total commercial lending		0.10			0.16			(0.04)			0.12			0.86		(6)		(76)			0.08			0.69		(61)
Small-ticket commercial real estate		0.13			0.56			(0.40)			(0.18)			(0.05)		(43)		18			0.02			0.24		(22)
Total commercial banking		0.10			0.16			(0.04)			0.11			0.85		(6)		(75)			0.08			0.69		(61)
Total net charge-offs		2.67			2.41			2.42			2.59			2.89		26		(22)			2.52			2.67		(15)
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card		4.04	%		3.80	%		3.32	%		3.57	%		4.01	%	24	bps	3	bps		4.04	%		4.01	%	3	bps
International card businesses		3.52			3.55			3.39			3.62			3.64		(3)		(12)			3.52			3.64		(12)
Total credit card		4.00			3.78			3.32			3.58			3.98		22		2			4.00			3.98		2
Consumer banking:
Auto		6.95			6.27			5.57			5.15			6.51		68		44			6.95			6.51		44
Home loan⁽¹⁾		—			—			—			0.20			0.20		**		**			—			0.20		**
Retail banking		1.01			0.80			0.84			0.75			0.76		21		25			1.01			0.76		25
Total consumer banking		6.67			6.01			5.33			3.86			4.76		66		191			6.67			4.76		191
Nonperforming Loans and Nonperforming Assets Rates⁽³⁾⁽⁴⁾
Credit card:
International card businesses		0.25	%		0.22	%		0.22	%		0.25	%		0.25	%	3	bps	—			0.25	%		0.25	%	—
Total credit card		0.02			0.02			0.02			0.02			0.02		—		—			0.02			0.02		—
Consumer banking:
Auto		0.80			0.70			0.55			0.50			0.70		10		10	bps		0.80			0.70		10	bps
Home loan⁽¹⁾		—			—			—			0.86			1.00		**		**			—			1.00		**
Retail banking		1.04			1.13			1.15			1.04			1.00		(9)		4			1.04			1.00		4
Total consumer banking		0.81			0.72			0.58			0.61			0.78		9		3			0.81			0.78		3
Commercial banking:
Commercial and multifamily real estate		0.29			0.13			0.01			0.01			0.15		16		14			0.29			0.15		14
Commercial and industrial		0.54			0.55			0.57			0.78			0.63		(1)		(9)			0.54			0.63		(9)
Total commercial lending		0.44			0.37			0.33			0.46			0.43		7		1			0.44			0.43		1
Small-ticket commercial real estate		1.80			1.65			1.18			1.46			1.65		15		15			1.80			1.65		15
Total commercial banking		0.44			0.38			0.34			0.47			0.44		6		—			0.44			0.44		—
Total nonperforming loans		0.33			0.30			0.25			0.32			0.35		3		(2)			0.33			0.35		(2)
Total nonperforming assets		0.35			0.33			0.30			0.35			0.41		2		(6)			0.35			0.41		(6)

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, 2018
					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, 2018					$	5,116	$	404	$	5,520	$	985	$	58	$	1,043	$	656	$	7,219
Charge-offs					(1,503)		(122)		(1,625)		(496)		(22)		(518)		(43)		(2,186)
Recoveries					302		28		330		217		3		220		26		576
Net charge-offs					(1,201)		(94)		(1,295)		(279)		(19)		(298)		(17)		(1,610)
Provision (benefit) for loan and lease losses					1,229		97		1,326		284		19		303		(3)		1,626
Allowance build (release) for loan and lease losses					28		3		31		5		—		5		(20)		16
Other changes⁽⁵⁾					—		(16)		(16)		—		—		—		1		(15)
Balance as of December 31, 2018					5,144		391		5,535		990		58		1,048		637		7,220
Reserve for unfunded lending commitments:
Balance as of September 30, 2018					—		—		—		—		4		4		106		110
Provision for losses on unfunded lending commitments					—		—		—		—		—		—		12		12
Balance as of December 31, 2018					—		—		—		—		4		4		118		122
Combined allowance and reserve as of December 31, 2018					$	5,144	$	391	$	5,535	$	990	$	62	$	1,052	$	755	$	7,342

	Year Ended December 31, 2018
	Credit Card						Consumer Banking
(Dollars in millions)	Domestic Card		International Card Businesses		Total Credit Card		Auto		Home Loan⁽¹⁾		Retail Banking		Total Consumer Banking		Commercial Banking		Other⁽¹⁾		Total
Allowance for loan and lease losses:
Balance as of December 31, 2017	$	5,273	$	375	$	5,648	$	1,119	$	58	$	65	$	1,242	$	611	$	1	$	7,502
Charge-offs	(6,152)		(505)		(6,657)		(1,746)		—		(86)		(1,832)		(119)		(7)		(8,615)
Recoveries	1,370		218		1,588		834		1		16		851		63		1		2,503
Net charge-offs	(4,782)		(287)		(5,069)		(912)		1		(70)		(981)		(56)		(6)		(6,112)
Provision (benefit) for loan and lease losses	4,653		331		4,984		783		(6)		64		841		82		(49)		5,858
Allowance build (release) for loan and lease losses	(129)		44		(85)		(129)		(5)		(6)		(140)		26		(55)		(254)
Other changes⁽¹⁾⁽⁵⁾	—		(28)		(28)		—		(53)		(1)		(54)		—		54		(28)
Balance as of December 31, 2018	5,144		391		5,535		990		—		58		1,048		637		—		7,220
Reserve for unfunded lending commitments:
Balance as of December 31, 2017	—		—		—		—		—		7		7		117		—		124
Provision (benefit) for losses on unfunded lending commitments	—		—		—		—		—		(3)		(3)		1		—		(2)
Balance as of December 31, 2018	—		—		—		—		—		4		4		118		—		122
Combined allowance and reserve as of December 31, 2018	$	5,144	$	391	$	5,535	$	990	$	—	$	62	$	1,052	$	755	$	—	$	7,342

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial Summary—Business Segment Results

	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 (loss)	$	3,617	$	1,689	$	528	$	(14)	$	5,820	$	14,167	$	6,549	$	2,152	$	7	$	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		687		(25)		7,013		17,687		7,212		2,896		281		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		244		(142)		1,243		4,161		2,347		1,159		(349)		7,318
Income tax provision (benefit)	160		107		57		(345)		(21)		970		547		270		(494)		1,293
Income from continuing operations, net of tax	$	521	$	353	$	187	$	203	$	1,264	$	3,191	$	1,800	$	889	$	145	$	6,025

	Three Months Ended September 30, 2018
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking⁽⁶⁾⁽⁷⁾		Other⁽⁶⁾⁽⁷⁾		Total
Net interest income	$	3,596	$	1,636	$	539	$	15	$	5,786
Non-interest income (loss)	893		155		189		(61)		1,176
Total net revenue (loss)	4,489		1,791		728		(46)		6,962
Provision (benefit) for credit losses	1,031		184		54		(1)		1,268
Non-interest expense	2,103		979		408		283		3,773
Income (loss) from continuing operations before income taxes	1,355		628		266		(328)		1,921
Income tax provision (benefit)	315		146		62		(103)		420
Income (loss) from continuing operations, net of tax	$	1,040	$	482	$	204	$	(225)	$	1,501

	Three Months Ended December 31, 2017										Year Ended December 31, 2017
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking⁽⁶⁾		Other⁽⁶⁾		Total		Credit Card		Consumer Banking		Commercial Banking⁽⁶⁾		Other⁽⁶⁾		Total
Net interest income	$	3,568	$	1,636	$	566	$	43	$	5,813	$	13,648	$	6,380	$	2,261	$	171	$	22,460
Non-interest income (loss)	847		179		188		(14)		1,200		3,325		749		708		(5)		4,777
Total net revenue	4,415		1,815		754		29		7,013		16,973		7,129		2,969		166		27,237
Provision for credit losses	1,486		340		100		—		1,926		6,066		1,180		301		4		7,551
Non-interest expense	2,108		1,081		437		153		3,779		7,916		4,233		1,603		442		14,194
Income (loss) from continuing operations before income taxes	821		394		217		(124)		1,308		2,991		1,716		1,065		(280)		5,492
Income tax provision	297		144		79		1,650		2,170		1,071		626		389		1,289		3,375
Income (loss) from continuing operations, net of tax	$	524	$	250	$	138	$	(1,774)	$	(862)	$	1,920	$	1,090	$	676	$	(1,569)	$	2,117

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 10: Financial & Statistical Summary—Credit Card Business

																2018 Q4 vs.				Year Ended December 31,
	2018			2018			2018			2018			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2018			2017			2017
Credit Card
Earnings:
Net interest income	$	3,617		$	3,596		$	3,396		$	3,558		$	3,568		1	%	1	%	$	14,167		$	13,648		4	%
Non-interest income	886			893			884			857			847			(1)		5		3,520			3,325			6
Total net revenue	4,503			4,489			4,280			4,415			4,415			—		2		17,687			16,973			4
Provision for credit losses	1,326			1,031			1,171			1,456			1,486			29		(11)		4,984			6,066			(18)
Non-interest expense	2,496			2,103			1,904			2,039			2,108			19		18		8,542			7,916			8
Income from continuing operations before income taxes	681			1,355			1,205			920			821			(50)		(17)		4,161			2,991			39
Income tax provision	160			315			282			213			297			(49)		(46)		970			1,071			(9)
Income from continuing operations, net of tax	$	521		$	1,040		$	923		$	707		$	524		(50)		(1)		$	3,191		$	1,920		66
Selected performance metrics:
Period-end loans held for investment	$	116,361		$	110,685		$	109,777		$	107,576		$	114,762		5		1		$	116,361		$	114,762		1
Average loans held for investment	112,349			109,510			107,893			109,502			110,029			3		2		109,820			103,468			6
Average yield on loans held for investment⁽⁸⁾	15.63		%	15.79		%	15.06		%	15.24		%	15.13		%	(16)	bps	50	bps	15.43		%	15.21		%	22	bps
Total net revenue margin⁽⁹⁾	16.03			16.40			15.87			16.13			16.05			(37)		(2)		16.11			16.40			(29)
Net charge-off rate⁽²⁾	4.61			4.15			4.67			5.03			4.99			46		(38)		4.62			4.88			(26)
30+ day performing delinquency rate	4.00			3.78			3.32			3.58			3.98			22		2		4.00			3.98			2
30+ day delinquency rate	4.01			3.80			3.33			3.59			3.99			21		2		4.01			3.99			2
Nonperforming loan rate⁽³⁾	0.02			0.02			0.02			0.02			0.02			—		—		0.02			0.02			—
Purchase volume⁽¹⁰⁾	$	105,696		$	97,469		$	97,392		$	86,545		$	95,659		8	%	10	%	$	387,102		$	336,440		15	%

																2018 Q4 vs.				Year Ended December 31,
	2018			2018			2018			2018			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2018			2017			2017
Domestic Card
Earnings:
Net interest income	$	3,309		$	3,280		$	3,108		$	3,229		$	3,268		1	%	1	%	$	12,926		$	12,504		3	%
Non-interest income	828			819			818			774			781			1		6		3,239			3,069			6
Total net revenue	4,137			4,099			3,926			4,003			4,049			1		2		16,165			15,573			4
Provision for credit losses	1,229			950			1,094			1,380			1,402			29		(12)		4,653			5,783			(20)
Non-interest expense	2,216			1,890			1,683			1,832			1,880			17		18		7,621			7,078			8
Income from continuing operations before income taxes	692			1,259			1,149			791			767			(45)		(10)		3,891			2,712			43
Income tax provision	162			293			268			184			280			(45)		(42)		907			990			(8)
Income from continuing operations, net of tax	$	530		$	966		$	881		$	607		$	487		(45)		9		$	2,984		$	1,722		73
Selected performance metrics:
Period-end loans held for investment	$	107,350		$	101,564		$	100,714		$	98,535		$	105,293		6		2		$	107,350		$	105,293		2
Average loans held for investment	103,391			100,566			98,895			100,450			101,087			3		2		100,832			94,923			6
Average yield on loans held for investment⁽⁸⁾	15.58		%	15.73		%	15.05		%	15.10		%	15.08		%	(15)	bps	50	bps	15.36		%	15.16		%	20	bps
Total net revenue margin⁽⁹⁾	16.01			16.30			15.88			15.94			16.03			(29)		(2)		16.03			16.41			(38)
Net charge-off rate⁽²⁾	4.64			4.35			4.72			5.26			5.08			29		(44)		4.74			4.99			(25)
30+ day delinquency rate	4.04			3.80			3.32			3.57			4.01			24		3		4.04			4.01			3
Purchase volume⁽¹⁰⁾	$	96,818		$	89,205		$	88,941		$	79,194		$	87,287		9	%	11	%	$	354,158		$	306,824		15	%
Refreshed FICO scores:⁽¹¹⁾
Greater than 660	67		%	67		%	68		%	66		%	66		%	—		1		67		%	66		%	1
660 or below	33			33			32			34			34			—		(1)		33			34			(1)
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Consumer Banking Business

																2018 Q4 vs.				Year Ended December 31,
	2018			2018			2018			2018			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2018			2017			2017
Consumer Banking
Earnings:
Net interest income	$	1,689		$	1,636		$	1,609		$	1,615		$	1,636		3	%	3	%	$	6,549		$	6,380		3	%
Non-interest income	159			155			175			174			179			3		(11)		663			749			(11)
Total net revenue	1,848			1,791			1,784			1,789			1,815			3		2		7,212			7,129			1
Provision for credit losses	303			184			118			233			340			65		(11)		838			1,180			(29)
Non-interest expense	1,085			979			963			1,000			1,081			11		—		4,027			4,233			(5)
Income from continuing operations before income taxes	460			628			703			556			394			(27)		17		2,347			1,716			37
Income tax provision	107			146			164			130			144			(27)		(26)		547			626			(13)
Income from continuing operations, net of tax	$	353		$	482		$	539		$	426		$	250		(27)		41		$	1,800		$	1,090		65
Selected performance metrics:
Period-end loans held for investment⁽¹⁾	$	59,205		$	59,329		$	58,727		$	74,674		$	75,078		—		(21)		$	59,205		$	75,078		(21)
Average loans held for investment⁽¹⁾	59,342			59,220			66,480			74,997			75,289			—		(21)		64,951			74,621			(13)
Average yield on loans held for investment⁽⁸⁾	8.14		%	8.03		%	7.32		%	6.86		%	6.84		%	11	bps	130	bps	7.54		%	6.67		%	87	bps
Auto loan originations	$	5,932		$	6,643		$	6,994		$	6,707		$	6,215		(11)	%	(5)	%	$	26,276		$	27,737		(5)	%
Period-end deposits	198,607			196,635			194,962			193,073			185,842			1		7		198,607			185,842			7
Average deposits	196,348			194,687			193,278			187,785			184,799			1		6		193,053			185,201			4
Average deposits interest rate	1.10		%	1.00		%	0.88		%	0.80		%	0.69		%	10	bps	41	bps	0.95		%	0.62		%	33	bps
Net charge-off rate	2.01			1.77			1.19			1.19			1.66			24		35		1.51			1.39			12
30+ day performing delinquency rate	6.67			6.01			5.33			3.86			4.76			66		191		6.67			4.76			191
30+ day delinquency rate	7.36			6.61			5.80			4.27			5.34			75		202		7.36			5.34			202
Nonperforming loan rate⁽³⁾	0.81			0.72			0.58			0.61			0.78			9		3		0.81			0.78			3
Nonperforming asset rate⁽⁴⁾	0.90			0.82			0.73			0.70			0.91			8		(1)		0.90			0.91			(1)
Auto—At origination FICO scores:⁽¹²⁾
Greater than 660	50		%	50		%	50		%	51		%	51		%	—		(1)	%	50		%	51		%	(1)	%
621 - 660	19			19			19			18			18			—		1		19			18			1
620 or below	31			31			31			31			31			—		—		31			31			—
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Commercial Banking Business

																2018 Q4 vs.				Year Ended December 31,
	2018			2018			2018			2018			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2018			2017			2017
Commercial Banking
Earnings:
Net interest income	$	528		$	539		$	549		$	536		$	566		(2)	%	(7)	%	$	2,152		$	2,261		(5)	%
Non-interest income	159			189			209			187			188			(16)		(15)		744			708			5
Total net revenue⁽⁶⁾⁽⁷⁾	687			728			758			723			754			(6)		(9)		2,896			2,969			(2)
Provision (benefit) for credit losses	9			54			34			(14)			100			(83)		(91)		83			301			(72)
Non-interest expense	434			408			409			403			437			6		(1)		1,654			1,603			3
Income from continuing operations before income taxes	244			266			315			334			217			(8)		12		1,159			1,065			9
Income tax provision	57			62			73			78			79			(8)		(28)		270			389			(31)
Income from continuing operations, net of tax	$	187		$	204		$	242		$	256		$	138		(8)		36		$	889		$	676		32
Selected performance metrics:
Period-end loans held for investment	$	70,333		$	68,747		$	67,609		$	65,953		$	64,575		2		9		$	70,333		$	64,575		9
Average loans held for investment	69,680			68,036			66,364			65,181			67,200			2		4		67,330			67,418			—
Average yield on loans held for investment⁽⁶⁾⁽⁸⁾	4.67		%	4.55		%	4.43		%	4.16		%	4.03		%	12	bps	64	bps	4.46		%	3.87		%	59	bps
Period-end deposits	$	29,480		$	30,474		$	31,078		$	34,449		$	33,938		(3)	%	(13)	%	$	29,480		$	33,938		(13)	%
Average deposits	30,680			31,061			32,951			34,057			34,117			(1)		(10)		32,175			33,947			(5)
Average deposits interest rate	0.95		%	0.79		%	0.65		%	0.52		%	0.46		%	16	bps	49	bps	0.72		%	0.39		%	33	bps
Net charge-off (recovery) rate	0.10			0.16			(0.04)			0.11			0.85			(6)		(75)		0.08			0.69			(61)
Nonperforming loan rate⁽³⁾	0.44			0.38			0.34			0.47			0.44			6		—		0.44			0.44			—
Nonperforming asset rate⁽⁴⁾	0.45			0.41			0.37			0.49			0.52			4		(7)		0.45			0.52			(7)
Risk category:⁽¹³⁾
Noncriticized	$	68,043		$	65,926		$	64,923		$	62,773		$	61,162		3	%	11	%	$	68,043		$	61,162		11	%
Criticized performing	1,848			2,204			2,088			2,432			2,649			(16)		(30)		1,848			2,649			(30)
Criticized nonperforming	312			259			229			309			284			20		10		312			284			10
PCI loans	130			358			369			439			480			(64)		(73)		130			480			(73)
Total commercial loans	$	70,333		$	68,747		$	67,609		$	65,953		$	64,575		2		9		$	70,333		$	64,575		9
Risk category as a percentage of period-end loans held for investment:⁽¹³⁾
Noncriticized	96.8		%	95.9		%	96.1		%	95.1		%	94.7		%	90	bps	210	bps	96.8		%	94.7		%	210	bps
Criticized performing	2.6			3.2			3.1			3.7			4.1			(60)		(150)		2.6			4.1			(150)
Criticized nonperforming	0.4			0.4			0.3			0.5			0.4			—		—		0.4			0.4			—
PCI loans	0.2			0.5			0.5			0.7			0.8			(30)		(60)		0.2			0.8			(60)
Total commercial loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%					100.0		%	100.0		%

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Financial & Statistical Summary—Other and Total

											2018 Q4 vs.				Year Ended December 31,
	2018		2018		2018		2018		2017		2018		2017						2018 vs.
(Dollars in millions)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2018		2017		2017
Other⁽¹⁴⁾
Earnings:
Net interest income (loss)	$	(14)	$	15	$	(3)	$	9	$	43	**		**		$	7	$	171	(96)	%
Non-interest income (loss)	(11)		(61)		373		(27)		(14)		(82)	%	(21)	%	274		(5)		**
Total net revenue (loss)⁽⁶⁾⁽⁷⁾	(25)		(46)		370		(18)		29		(46)		**		281		166		69
Provision (benefit) for credit losses	—		(1)		(47)		(1)		—		**		**		(49)		4		**
Non-interest expense⁽¹⁵⁾	117		283		148		131		153		(59)		(24)		679		442		54
Income (loss) from continuing operations before income taxes	(142)		(328)		269		(148)		(124)		(57)		15		(349)		(280)		25
Income tax provision (benefit)	(345)		(103)		56		(102)		1,650		**		**		(494)		1,289		**
Income (loss) from continuing operations, net of tax	$	203	$	(225)	$	213	$	(46)	$	(1,774)	**		**		$	145	$	(1,569)	**
Selected performance metrics:
Period-end loans held for investment	—		—		$	11	$	53	$	58	**		**		—		$	58	**
Average loans held for investment	—		—		21		46		48		**		**		$	17	58		(71)
Period-end deposits	$	21,677	$	20,086	22,185		23,325		23,922		8		(9)		21,677		23,922		(9)
Average deposits	20,635		20,972		22,561		23,428		22,646		(2)		(9)		21,889		20,734		6
Total
Earnings:
Net interest income	$	5,820	$	5,786	$	5,551	$	5,718	$	5,813	1	%	—		$	22,875	$	22,460	2	%
Non-interest income	1,193		1,176		1,641		1,191		1,200		1		(1)	%	5,201		4,777		9
Total net revenue	7,013		6,962		7,192		6,909		7,013		1		—		28,076		27,237		3
Provision for credit losses	1,638		1,268		1,276		1,674		1,926		29		(15)		5,856		7,551		(22)
Non-interest expense	4,132		3,773		3,424		3,573		3,779		10		9		14,902		14,194		5
Income from continuing operations before income taxes	1,243		1,921		2,492		1,662		1,308		(35)		(5)		7,318		5,492		33
Income tax provision (benefit)	(21)		420		575		319		2,170		**		**		1,293		3,375		(62)
Income (loss) from continuing operations, net of tax	$	1,264	$	1,501	$	1,917	$	1,343	$	(862)	(16)		**		$	6,025	$	2,117	185
Selected performance metrics:
Period-end loans held for investment	$	245,899	$	238,761	$	236,124	$	248,256	$	254,473	3		(3)		$	245,899	$	254,473	(3)
Average loans held for investment	241,371		236,766		240,758		249,726		252,566		2		(4)		242,118		245,565		(1)
Period-end deposits	249,764		247,195		248,225		250,847		243,702		1		2		249,764		243,702		2
Average deposits	247,663		246,720		248,790		245,270		241,562		—		3		247,117		239,882		3

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)

⁽¹⁾	In the second quarter of 2018, we sold the substantial majority of our consumer home loan portfolio and the related servicing. We also transferred the remaining consumer home loan portfolio of $398 million to loans held for sale as of June 30, 2018. These actions resulted in a net gain of approximately $400 million in the second quarter of 2018, including a benefit for credit losses of $46 million, which was reflected in the Other category. In the third quarter of 2018, we sold substantially all of the remaining consumer home loan portfolio and recognized a net gain of $99 million in the Other category. In the fourth quarter of 2018, we sold all of the remaining consumer home loan portfolio.
⁽²⁾	In August 2018, we accelerated charge-off recognition for certain domestic credit card accounts where the cardholder is deceased. This acceleration led to a one-time increase in net charge-offs of approximately $32 million, increasing the net charge-off rate for total credit card and domestic credit card by approximately 12 basis points and 13 basis points, respectively, for the third quarter of 2018, and 3 basis points for both total credit card and domestic credit card for the year ended December 31, 2018.
⁽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, real estate owned ("REO") and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, REO and other foreclosed assets.
⁽⁵⁾	Represents foreign currency translation adjustments and the net impact of loan transfers and sales where applicable.
⁽⁶⁾	Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate (21% and 35% for all periods presented in 2018 and 2017, respectively) and state taxes where applicable, with offsetting reductions to the Other category.
⁽⁷⁾	In the first quarter of 2018, we made a change in how revenue is measured in our Commercial Banking business to include the tax benefits of losses on certain tax-advantaged investments. These tax benefits are included in revenue on a taxable-equivalent basis within our Commercial Banking business, with an offsetting reduction to the Other category. In addition, all revenue presented on a taxable-equivalent basis in our Commercial Banking business was impacted by the reduction of the federal tax rate set forth in the Tax Act. The net impact of the measurement change and the reduction of the federal tax rate was a decrease of $40 million and $126 million in revenue in our Commercial Banking business in the fourth quarter and year ended December 31, 2018, respectively, with an offsetting impact to the Other category.
⁽⁸⁾	Average yield on loans held for investment is calculated based on annualized interest income for the period divided by average loans held for investment during the period for the respective loan category. Annualized interest income is computed based on the effective yield of the respective loan category and does not include any allocations, such as funds transfer pricing.
⁽⁹⁾	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans held for investment during the period for the respective loan category.
⁽¹⁰⁾	Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.
⁽¹¹⁾	Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.
⁽¹²⁾	Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.
⁽¹³⁾	Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
⁽¹⁴⁾	Charges for the impacts of the Tax Act of $1.77 billion were reflected in the Other category of our business segment results for Q4 2017. This amount was a reasonable estimate as of December 31, 2017, and there were no material adjustments made to this amount during the measurement period, which ended in December 2018. The Tax Act refers to the Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on budget for fiscal year 2018 enacted on December 22, 2017.
⁽¹⁵⁾	Includes charges incurred as a result of restructuring activities.
^**	Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures⁽¹⁾

	Basel III Standardized Approach
(Dollars in millions, except as noted)	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Regulatory Capital Metrics
Common equity excluding AOCI	$	48,570		$	48,154		$	47,359		$	46,441		$	45,296
Adjustments:
AOCI⁽²⁾⁽³⁾	(1,263)			(1,877)			(1,793)			(1,599)			(808)
Goodwill, net of related deferred tax liabilities	(14,373)			(14,345)			(14,368)			(14,379)			(14,380)
Intangible assets, net of related deferred tax liabilities⁽³⁾	(254)			(284)			(328)			(371)			(330)
Other	391			817			735			620			258
Common equity Tier 1 capital	$	33,071		$	32,465		$	31,605		$	30,712		$	30,036
Tier 1 capital	$	37,431		$	36,826		$	35,965		$	35,073		$	34,396
Total capital⁽⁴⁾	44,645			43,947			43,082			42,259			41,962
Risk-weighted assets	294,955			288,694			285,223			291,346			292,225
Adjusted average assets⁽⁵⁾	350,606			346,297			349,222			347,287			348,424
Capital Ratios
Common equity Tier 1 capital⁽⁶⁾	11.2		%	11.2		%	11.1		%	10.5		%	10.3		%
Tier 1 capital⁽⁷⁾	12.7			12.8			12.6			12.0			11.8
Total capital⁽⁸⁾	15.1			15.2			15.1			14.5			14.4
Tier 1 leverage⁽⁵⁾	10.7			10.6			10.3			10.1			9.9
Tangible common equity ("TCE")⁽⁹⁾	9.1			9.0			8.8			8.6			8.3

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance, both in the current period and across 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, 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⁽¹²⁾	(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⁽¹²⁾	$	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

	Three Months Ended									Nine Months Ended									Year Ended
	December 31, 2017									September 30, 2017									December 31, 2017
(Dollars in millions, except per share data and as noted)	Reported Results			Adj.⁽¹¹⁾			Adjusted Results			Reported Results			Adj.⁽¹¹⁾			Adjusted Results			Reported Results			Adj.⁽¹¹⁾			Adjusted Results
Selected income statement data:
Net interest income	$	5,813		$	11		$	5,824		$	16,647		$	33		$	16,680		$	22,460		$	44		$	22,504
Non-interest income	1,200			9			1,209			3,577			37			3,614			4,777			46			4,823
Total net revenue	7,013			20			7,033			20,224			70			20,294			27,237			90			27,327
Provision for credit losses	1,926			—			1,926			5,625			(88)			5,537			7,551			(88)			7,463
Non-interest expense	3,779			(87)			3,692			10,415			(166)			10,249			14,194			(253)			13,941
Income from continuing operations before income taxes	1,308			107			1,415			4,184			324			4,508			5,492			431			5,923
Income tax provision	2,170			(1,742)			428			1,205			82			1,287			3,375			(1,660)			1,715
Income (loss) from continuing operations, net of tax	(862)			1,849			987			2,979			242			3,221			2,117			2,091			4,208
Income (loss) from discontinued operations, net of tax	(109)			—			(109)			(26)			—			(26)			(135)			—			(135)
Net income (loss)	(971)			1,849			878			2,953			242			3,195			1,982			2,091			4,073
Dividends and undistributed earnings allocated to participating securities⁽¹²⁾	(1)			(5)			(6)			(21)			—			(21)			(13)			(15)			(28)
Preferred stock dividends	(80)			—			(80)			(185)			—			(185)			(265)			—			(265)
Net income (loss) available to common stockholders	$	(1,052)		$	1,844		$	792		$	2,747		$	242		$	2,989		$	1,704		$	2,076		$	3,780
Selected performance metrics:
Diluted EPS⁽¹²⁾	$	(2.17)		$	3.79		$	1.62		$	5.63		$	0.49		$	6.12		$	3.49		$	4.25		$	7.74
Efficiency ratio	53.89		%	(139)		bps	52.50		%	51.50		%	(100)		bps	50.50		%	52.11		%	(109)		bps	51.02		%
Operating efficiency ratio	47.33			(138)			45.95			45.52			(98)			44.54			45.98			(108)			44.90

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of tangible common equity ("TCE"), tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. While 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.

	2018		2018		2018		2018		2017
(Dollars in millions)	Q4		Q3		Q2		Q1		Q4
Tangible Common Equity (Period-End)
Stockholders' equity	$	51,668	$	50,638	$	49,926	$	49,203	$	48,730
Goodwill and intangible assets⁽¹³⁾	(14,941)		(14,945)		(15,013)		(15,063)		(15,106)
Noncumulative perpetual preferred stock	(4,360)		(4,360)		(4,360)		(4,360)		(4,360)
Tangible common equity	$	32,367	$	31,333	$	30,553	$	29,780	$	29,264
Tangible Common Equity (Average)
Stockholders' equity	$	51,114	$	50,768	$	49,827	$	49,031	$	50,710
Goodwill and intangible assets⁽¹³⁾	(14,953)		(14,982)		(15,043)		(15,092)		(15,223)
Noncumulative perpetual preferred stock	(4,360)		(4,360)		(4,360)		(4,360)		(4,360)
Tangible common equity	$	31,801	$	31,426	$	30,424	$	29,579	$	31,127
Tangible Assets (Period-End)
Total assets	$	372,538	$	362,909	$	363,989	$	362,857	$	365,693
Goodwill and intangible assets⁽¹³⁾	(14,941)		(14,945)		(15,013)		(15,063)		(15,106)
Tangible assets	$	357,597	$	347,964	$	348,976	$	347,794	$	350,587
Tangible Assets (Average)
Total assets	$	365,243	$	360,937	$	363,929	$	362,049	$	363,045
Goodwill and intangible assets⁽¹³⁾	(14,953)		(14,982)		(15,043)		(15,092)		(15,223)
Tangible assets	$	350,290	$	345,955	$	348,886	$	346,957	$	347,822
__________
⁽¹⁾Regulatory capital metrics and capital ratios as of December 31, 2018 are preliminary and therefore subject to change.
⁽²⁾Amounts presented are net of tax.
⁽³⁾ Amounts based on transition provisions for regulatory capital deductions and adjustments of 80% for 2017 and 100% for 2018.
⁽⁴⁾ Total capital equals the sum of Tier 1 capital and Tier 2 capital.
⁽⁵⁾Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that are deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.
⁽⁶⁾ Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.
⁽⁷⁾Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
⁽⁸⁾Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.
⁽⁹⁾ TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
⁽¹⁰⁾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⁾The adjustments in 2017 consist of:

	Three Months Ended		Nine Months Ended		Year Ended
(Dollars in millions)	December 31, 2017		September 30, 2017		December 31, 2017
Impacts of the Tax Act	$	1,769	—		$	1,769
Restructuring charges	76		$	108	184
U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve")	31		99		130
Charges related to the Cabela's acquisition	—		117		117
Total	1,876		324		2,200
Income tax benefit	(27)		(82)		(109)
Net income	$	1,849	$	242	$	2,091

⁽¹²⁾ 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.
⁽¹³⁾ Includes impact of related deferred taxes.