Capital One Reports Third Quarter 2013 Net Income of $1.1 billion, or $1.86 per share

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Oct 17, 2013, 04:05 ET

MCLEAN, Va., Oct. 17, 2013 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2013 of $1.1 billion, or $1.86 per diluted common share, flat to the second quarter of 2013 with net income of $1.1 billion, or $1.87 per diluted common share, and down from the third quarter of 2012 with net income of $1.2 billion, or $2.01 per diluted common.

"Our businesses continue to deliver attractive, sustainable, and resilient returns and generate capital on a strong trajectory," said Richard D. Fairbank, Chairman and CEO. "We remain focused on important levers that will sustain and improve our profitability and our ability to distribute capital."

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

Third Quarter 2013 Income Highlights:

Total net revenue increased less than 1 percent to $5.7 billion
Total non-interest expense increased 3 percent to $3.1 billion
Pre-provision earnings decreased 3 percent to $2.5 billion
Provision for credit losses increased 11 percent to $849 million
Non-interest expense includes $101 million for litigation reserves

Third Quarter 2013 Balance Sheet Highlights:

Tier 1 common ratio of 12.7 percent, up 60 basis points
Net interest margin of 6.89 percent, up 6 basis points
Period-end loans held for investment increased $302 million, or less than 1 percent, to $191.8 billion
- Domestic Card period-end loans decreased $554 million, or less than 1 percent, to $69.9 billion
- Commercial Banking period-end loans increased $1.6 billion, or 4 percent, to $42.4 billion
- Consumer Banking:
  - Auto Finance period-end loans increased $1.4 billion, or 5 percent, to $30.8 billion
  - Home loans period-end loans decreased $2.3 billion, or 6 percent, to $36.8 billion, driven by run-off of acquired portfolios
Average loans held for investment in the quarter increased $573 million, or less than 1 percent, to $191.1 billion
- Domestic Card average loans declined $19 million, or less than 1 percent, to $69.9 billion
- Commercial Banking average loans increased $2.1 billion, or 5 percent, to $41.6 billion
- Consumer Banking:
  - Auto Finance average loans increased $1.5 billion, or 5 percent, to $30.2 billion
  - Home loans decreased by $2.7 billion, or 7 percent, to $37.9 billion, driven by run-off of acquired portfolios
Period-end total deposits decreased $3.0 billion, or 1 percent, to $206.8 billion, while average deposits declined $2.3 billion, or 1 percent, to $208.3 billion
Deposit interest rates declined 2 basis points to 0.79 percent

Detailed segment information will be available in the company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on October 17, 2013, at 5:00 PM, Eastern Daylight 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 November 7, 2013 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 $206.9 billion in deposits and $289.9 billion in total assets as of September 30, 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
Third 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 Quarterly Report on Form 10-Q for the period ended September 30, 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)	Q3		Q2		Q3
Earnings
Net interest income	$	4,560	$	4,553	$	4,646
Non-interest income⁽²⁾	1,091		1,085		1,136
Total net revenue⁽³⁾	5,651		5,638		5,782
Provision for credit losses	849		762		1,014
Non-interest expense:
Marketing	299		330		316
Amortization of intangibles⁽⁴⁾	161		167		199
Acquisition-related⁽⁵⁾	37		50		48
Operating expenses	2,650		2,512		2,482
Total non-interest expense	3,147		3,059		3,045
Income from continuing operations before income taxes	1,655		1,817		1,723
Income tax provision	525		581		535
Income from continuing operations, net of tax	1,130		1,236		1,188
Loss from discontinued operations, net of tax⁽²⁾	(13)		(119)		(10)
Net income	1,117		1,117		1,178
Dividends and undistributed earnings allocated to participating securities⁽⁶⁾	(5)		(4)		(5)
Preferred stock dividends	(13)		(13)		—
Net income available to common stockholders	$	1,099	$	1,100	$	1,173
Common Share Statistics
Basic EPS:⁽⁶⁾
Income from continuing operations, net of tax	$	1.91	$	2.09	$	2.05
Loss from discontinued operations, net of tax	(0.02)		(0.20)		(0.02)
Net income per common share	$	1.89	$	1.89	$	2.03
Diluted EPS:⁽⁶⁾
Income from continuing operations, net of tax	$	1.88	$	2.07	$	2.03
Loss from discontinued operations, net of tax	(0.02)		(0.20)		(0.02)
Net income per common share	$	1.86	$	1.87	$	2.01
Weighted average common shares outstanding (in millions) for:
Basic EPS	582.3		581.5		578.3
Diluted EPS	591.1		588.8		584.1
Common shares outstanding (period end, in millions)	582.0		584.9		581.3
Dividends per common share	$	0.30	$	0.30	$	0.05
Tangible book value per common share (period end)⁽⁷⁾	43.19		41.57		38.70
Balance Sheet (Period End)
Loans held for investment⁽⁸⁾	$	191,814	$	191,512	$	203,132
Interest-earning assets	259,152		265,693		270,661
Total assets	289,888		296,542		301,989
Interest-bearing deposits	184,553		187,768		192,488
Total deposits	206,834		209,865		213,255
Borrowings	31,845		36,231		38,377
Common equity	40,897		40,188		38,819
Total stockholders' equity	41,750		41,041		39,672
Balance Sheet (Quarterly Average Balances)
Loans held for investment⁽⁸⁾	$	191,135	$	190,562	$	202,856
Interest-earning assets	264,796		266,544		266,803
Total assets	294,939		297,766		297,154
Interest-bearing deposits	186,752		189,311		193,700
Total deposits	208,340		210,650		213,323
Borrowings	36,355		36,915		36,451
Common equity	40,431		40,726		38,079
Total stockholders' equity	41,284		41,579		38,535

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)	Q3			Q2			Q3
Performance Metrics
Net interest income growth (quarter over quarter)	—		%	—		%	16		%
Non-interest income growth (quarter over quarter)	1			11			8
Total net revenue growth (quarter over quarter)	—			2			14
Total net revenue margin⁽⁹⁾	8.54			8.46			8.67
Net interest margin⁽¹⁰⁾	6.89			6.83			6.97
Return on average assets⁽¹¹⁾	1.53			1.66			1.60
Return on average tangible assets⁽¹²⁾	1.62			1.75			1.69
Return on average common equity⁽¹³⁾	11.00			11.97			12.43
Return on average tangible common equity⁽¹⁴⁾	18.08			19.70			21.84
Non-interest expense as a % of average loans held for investment⁽¹⁵⁾	6.59			6.42			6.00
Efficiency ratio⁽¹⁶⁾	55.69			54.26			52.66
Effective income tax rate for continuing operations	31.7			32.0			31.1
Full-time equivalent employees (in thousands), period end	39.6			39.6			37.6
Credit Quality Metrics⁽⁸⁾
Allowance for loan and lease losses	$	4,333		$	4,407		$	5,154
Allowance as a % of loans held for investment	2.26		%	2.30		%	2.54		%
Allowance as a % of loans held for investment (excluding acquired loans)	2.66			2.74			3.11
Net charge-offs	$	917		$	969		$	887
Net charge-off rate⁽¹⁷⁾	1.92		%	2.03		%	1.75		%
Net charge-off rate (excluding acquired loans)⁽¹⁷⁾	2.29			2.46			2.18
30+ day performing delinquency rate	2.54			2.35			2.54
30+ day performing delinquency rate (excluding acquired loans)	3.01			2.83			3.15
30+ day delinquency rate⁽¹⁸⁾	**			2.71			2.92
30+ day delinquency rate (excluding acquired loans)⁽¹⁸⁾	**			3.26			3.62
Capital Ratios ⁽¹⁹⁾
Tier 1 common ratio	12.7		%	12.1		%	10.7		%
Tier 1 risk-based capital ratio	13.1			12.4			12.7
Total risk-based capital ratio	15.3			14.7			15.0
Tangible common equity ("TCE") ratio	9.2			8.7			7.9

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

	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,		September 30,
(Dollars in millions, except per share data) (unaudited)	2013		2013		2012		2013		2012
Interest income:
Loans, including loans held for sale	$	4,579	$	4,596	$	4,903	$	13,824	$	12,817
Investment securities	396		391		335		1,161		968
Other	23		23		16		74		64
Total interest income	4,998		5,010		5,254		15,059		13,849
Interest expense:
Deposits	309		318		371		953		1,055
Securitized debt obligations	42		45		64		143		213
Senior and subordinated notes	76		82		85		240		260
Other borrowings	11		12		88		40		260
Total interest expense	438		457		608		1,376		1,788
Net interest income	4,560		4,553		4,646		13,683		12,061
Provision for credit losses	849		762		1,014		2,496		3,264
Net interest income after provision for credit losses	3,711		3,791		3,632		11,187		8,797
Non-interest income⁽²⁾:
Service charges and other customer-related fees	530		534		557		1,614		1,511
Interchange fees, net	476		486		452		1,407		1,188
Net other-than-temporary impairment losses recognized in earnings	(11)		(4)		(13)		(40)		(40)
Bargain purchase gain⁽²⁰⁾	—		—		—		—		594
Other	96		69		140		176		458
Total non-interest income	1,091		1,085		1,136		3,157		3,711
Non-interest expense:
Salaries and associate benefits	1,145		1,104		1,002		3,329		2,837
Occupancy and equipment	369		356		354		1,075		947
Marketing	299		330		316		946		971
Professional services	320		329		310		956		916
Communications and data processing	224		233		198		667		573
Amortization of intangibles⁽⁴⁾	161		167		199		505		418
Acquisition-related⁽⁵⁾	37		50		48		133		267
Other	592		490		618		1,623		1,762
Total non-interest expense	3,147		3,059		3,045		9,234		8,691
Income from continuing operations before income taxes	1,655		1,817		1,723		5,110		3,817
Income tax provision	525		581		535		1,600		931
Income from continuing operations, net of tax	1,130		1,236		1,188		3,510		2,886
Loss from discontinued operations, net of tax⁽²⁾	(13)		(119)		(10)		(210)		(212)
Net income	1,117		1,117		1,178		3,300		2,674
Dividends and undistributed earnings allocated to participating securities⁽⁶⁾	(5)		(4)		(5)		(14)		(12)
Preferred stock dividends	(13)		(13)		—		(39)		—
Net income available to common stockholders	$	1,099	$	1,100	$	1,173	$	3,247	$	2,662

Basic earnings per common share:⁽⁶⁾
Income from continuing operations	$	1.91	$	2.09	$	2.05	$	5.94	$	5.18
Loss from discontinued operations	(0.02)		(0.20)		(0.02)		(0.36)		(0.38)
Net income per basic common share	$	1.89	$	1.89	$	2.03	$	5.58	$	4.80

Diluted earnings per common share:⁽⁶⁾
Income from continuing operations	$	1.88	$	2.07	$	2.03	$	5.87	$	5.13
Loss from discontinued operations	(0.02)		(0.20)		(0.02)		(0.36)		(0.38)
Net income per diluted common share	$	1.86	$	1.87	$	2.01	$	5.51	$	4.75

Weighted average common shares outstanding (in millions) for:
Basic EPS	582.3		581.5		578.3		581.4		555.0
Diluted EPS	591.1		588.8		584.1		589.0		560.1
Dividends paid per common share	$	0.30	$	0.30	$	0.05	$	0.65	$	0.15

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

	September 30,		December 31,		September 30,
*(Dollars in millions)(unaudited)*	2013		2012		2012
Assets:
Cash and cash equivalents:
Cash and due from banks	$	2,855	$	3,440	$	1,855
Interest-bearing deposits with banks	2,481		7,617		3,860
Federal funds sold and securities purchased under agreements to resell	382		1		254
Total cash and cash equivalents	5,718		11,058		5,969
Restricted cash for securitization investors	390		428		760
Securities available for sale, at fair value	43,132		63,979		61,464
Securities held to maturity, at amortized cost	18,276		9		—
Loans held for investment:
Unsecuritized loans held for investment	152,332		162,059		159,219
Restricted loans for securitization investors	39,482		43,830		43,913
Total loans held for investment	191,814		205,889		203,132
Less: Allowance for loan and lease losses	(4,333)		(5,156)		(5,154)
Net loans held for investment	187,481		200,733		197,978
Loans held for sale, at lower of cost or fair value	180		201		187
Premises and equipment, net	3,792		3,587		3,519
Interest receivable	1,304		1,694		1,614
Goodwill	13,906		13,904		13,901
Other	15,709		17,325		16,597
Total assets	$	289,888	$	312,918	$	301,989

Liabilities:
Interest payable	$	276	$	450	$	368
Customer deposits:
Non-interest bearing deposits	22,281		22,467		20,767
Interest-bearing deposits	184,553		190,018		192,488
Total customer deposits	206,834		212,485		213,255
Securitized debt obligations	9,544		11,398		12,686
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	1,686		1,248		967
Senior and subordinated notes	12,395		12,686		11,756
Other borrowings	8,220		24,578		12,968
Total other debt	22,301		38,512		25,691
Other liabilities	9,183		9,574		10,317
Total liabilities	248,138		272,419		262,317

Stockholders' equity:
Preferred stock	—		—		853
Common stock	6		6		6
Additional paid-in capital, net	26,426		26,188		25,265
Retained earnings	19,731		16,853		16,054
Accumulated other comprehensive income ("AOCI")	(839)		739		781
Treasury stock, at cost	(3,574)		(3,287)		(3,287)
Total stockholders' equity	41,750		40,499		39,672
Total liabilities and stockholders' equity	$	289,888	$	312,918	$	301,989

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 benefit for mortgage representation and warranty losses of $4 million in Q3 2013, and a provision for mortgage representation and warranty losses of $183 million in Q2 2013. We did not record a provision for mortgage representation and warranty losses in Q3 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 September 30, 2013, $899 million as of December 31, 2012, and $919 million as of September 30, 2012.
⁽³⁾	Total net revenue was reduced by $154 million in Q3 2013, $192 million in Q2 2013, and $185 million in Q3 2012 for the estimated uncollectible amount of billed finance charges and fees.
⁽⁴⁾	Includes purchased credit card relationship ("PCCR") intangible amortization of $106 million in Q32013, $110 million in Q2 2013, and $131 million in Q3 2012, the substantial majority which is attributable to the 2012 U.S. card acquisition. See "Table 8: Financial & Statistical Summary Credit Card Business". Includes core deposit intangible amortization of $40 million in Q3 2013, $43 million in Q2 2013, and $49 million in Q3 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 and EPS 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 ("CCB") acquisitions, which were recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3"). 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 by 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. Our calculation of return on average common equity may not be comparable to similarly titled measures reported by other companies.
⁽¹⁴⁾	Calculated as 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. 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, excluding goodwill impairment charges, 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⁾	The 30+ day delinquency rate as of the end of Q3 2013 will be provided in the Quarterly Report on Form 10-Q for the period ended September 30, 2013.
⁽¹⁹⁾	Capital ratios are calculated under Basel I. Ratios as of the end of Q3 2013 are preliminary and therefore subject to change. TCE ratio is a non-GAAP capital ratio. See "Table 13: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures Under Basel I" for information on the calculation of each of these ratios.
⁽²⁰⁾	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 Q3						2013 Q2						2012 Q3
	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	$	195,839	$	4,579	9.35	%	$	196,874	$	4,596	9.34	%	$	203,463	$	4,903	9.64	%
Investment securities⁽³⁾	63,317		396		2.50		63,907		391		2.45		57,928		335		2.31
Cash equivalents and other	5,640		23		1.63		5,763		23		1.60		5,412		16		1.18
Total interest-earning assets	$	264,796	$	4,998	7.55	%	$	266,544	$	5,010	7.52	%	$	266,803	$	5,254	7.88	%

Interest-bearing liabilities:
Interest-bearing deposits	$	186,752	$	309	0.66	%	$	189,311	$	318	0.67	%	$	193,700	$	371	0.77	%
Securitized debt obligations	10,243		42		1.64		10,942		45		1.65		13,331		64		1.92
Senior and subordinated notes	12,314		76		2.47		12,692		82		2.58		11,035		85		3.08
Other borrowings	13,798		11		0.32		13,281		12		0.36		12,085		88		2.91
Total interest-bearing liabilities	$	223,107	$	438	0.79	%	$	226,226	$	457	0.81	%	$	230,151	$	608	1.06	%
Net interest income/spread			$	4,560	6.76	%			$	4,553	6.71	%			$	4,646	6.82	%
Impact of non-interest bearing funding					0.13						0.12						0.15
Net interest margin					6.89	%					6.83	%					6.97	%

							Nine Months Ended September 30,
							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							$	197,701	$	13,824	9.32	%	$	183,542	$	12,817	9.31	%
Investment securities⁽³⁾							63,725		1,161		2.43		55,158		968		2.34
Cash equivalents and other							6,164		74		1.60		8,762		64		0.97
Total interest-earning assets							$	267,590	$	15,059	7.50	%	$	247,462	$	13,849	7.46	%

Interest-bearing liabilities:
Interest-bearing deposits							$	188,877	$	953	0.67	%	$	180,372	$	1,055	0.78	%
Securitized debt obligations							10,975		143		1.74		14,816		213		1.92
Senior and subordinated notes							12,331		240		2.60		10,839		260		3.20
Other borrowings							14,955		40		0.36		10,301		260		3.37
Total interest-bearing liabilities							$	227,138	$	1,376	0.81	%	$	216,328	$	1,788	1.10	%
Net interest income/spread									$	13,683	6.69	%			$	12,061	6.36	%
Impact of non-interest bearing funding											0.13						0.14
Net interest margin											6.82	%					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)	Q3			Q2			Q3
Period-end Loans Held For Investment
Credit card:
Domestic credit card	$	69,936		$	70,490		$	80,621
International credit card	8,031			7,820			8,412
Total credit card	77,967			78,310			89,033
Consumer banking:
Automobile	30,803			29,369			26,434
Home loan	36,817			39,163			46,275
Retail banking	3,665			3,686			4,029
Total consumer banking	71,285			72,218			76,738
Commercial banking:
Commercial and multifamily real estate	19,523			18,570			16,963
Commercial and industrial	21,848			21,170			18,965
Total commercial lending	41,371			39,740			35,928
Small-ticket commercial real estate	1,028			1,065			1,281
Total commercial banking	42,399			40,805			37,209
Other loans	163			179			152
Total	$	191,814		$	191,512		$	203,132
Average Loans Held For Investment
Credit card:
Domestic credit card	$	69,947		$	69,966		$	80,502
International credit card	7,782			7,980			8,154
Total credit card	77,729			77,946			88,656
Consumer banking:
Automobile	30,157			28,677			25,923
Home loan	37,852			40,532			47,262
Retail banking	3,655			3,721			4,086
Total consumer banking	71,664			72,930			77,271
Commercial banking:
Commercial and multifamily real estate	19,047			18,084			16,654
Commercial and industrial	21,491			20,332			18,817
Total commercial lending	40,538			38,416			35,471
Small-ticket commercial real estate	1,038			1,096			1,296
Total commercial banking	41,576			39,512			36,767
Other loans	166			174			162
Total	$	191,135		$	190,562		$	202,856
Net Charge-off Rates
Credit card:
Domestic credit card	3.67		%	4.28		%	3.04		%
International credit card	4.71			5.08			4.95
Total credit card	3.78			4.36			3.22
Consumer banking:
Automobile	2.01			1.28			1.79
Home loan	0.06			0.03			0.28
Retail banking	1.38			1.50			1.20
Total consumer banking	0.95			0.60			0.83
Commercial banking:
Commercial and multifamily real estate	(0.11)			0.04			(0.05)
Commercial and industrial	0.18			0.03			—
Total commercial lending	0.04			0.03			(0.03)
Small-ticket commercial real estate	1.26			0.45			0.79
Total commercial banking	0.07			0.04			—
Other loans	12.17			13.10			30.11
Total	1.92		%	2.03		%	1.75		%
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card	3.46		%	3.05		%	3.52		%
International credit card	3.86			3.84			4.92
Total credit card	3.51		%	3.13		%	3.65		%
Consumer banking:
Automobile	6.29		%	6.03		%	6.12		%
Home loan	0.14			0.12			0.15
Retail banking	0.68			0.68			0.73
Total consumer banking	2.82		%	2.55		%	2.23		%
Nonperforming Asset Rates⁽³⁾
Credit card:
International credit card	1.16		%	1.20		%	—		%
Total credit card	0.12		%	0.12		%	—		%
Consumer banking:
Automobile	0.58		%	0.50		%	0.52		%
Home loan	1.08			1.08			0.98
Retail banking	1.10			1.11			2.25
Total consumer banking	0.87		%	0.84		%	0.89		%
Commercial banking:
Commercial and multifamily real estate	0.40		%	0.56		%	1.04		%
Commercial and industrial	0.65			0.65			0.68
Total commercial lending	0.53		%	0.61		%	0.85		%
Small-ticket commercial real estate	1.49			1.11			1.49
Total commercial banking	0.56		%	0.62		%	0.87		%

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

	2013			2013			2012
(Dollars in millions) (unaudited)	Q3			Q2			Q3
Credit Card
Earnings:
Net interest income	$	2,757		$	2,804		$	2,991
Non-interest income	834			832			826
Total net revenue	3,591			3,636			3,817
Provision for credit losses	617			713			892
Non-interest expense	1,904			1,819			1,790
Income (loss) from continuing operations before taxes	1,070			1,104			1,135
Income tax provision (benefit)	376			385			394
Income (loss) from continuing operations, net of tax	$	694		$	719		$	741
Selected performance metrics:
Period-end loans held for investment	$	77,967		$	78,310		$	89,033
Average loans held for investment	77,729			77,946			88,656
Average yield on loans held for investment⁽⁴⁾	15.72		%	15.94		%	15.03		%
Total net revenue margin⁽⁵⁾	18.48			18.66			17.22
Net charge-off rate	3.78			4.36			3.22
30+ day performing delinquency rate	3.51			3.13			3.65
30+ day delinquency rate⁽⁶⁾	**			3.22			3.65
Nonperforming loan rate⁽³⁾	0.12			0.12			—
Card loan premium amortization and other intangible accretion⁽⁷⁾	$	45		$	57		$	82
PCCR intangible amortization	106			110			131
Purchase volume⁽⁸⁾	50,943			50,788			48,020
Domestic Card
Earnings:
Net interest income	$	2,492		$	2,536		$	2,715
Non-interest income	749			737			722
Total net revenue	3,241			3,273			3,437
Provision for credit losses	529			647			811
Non-interest expense	1,713			1,635			1,584
Income (loss) from continuing operations before taxes	999			991			1,042
Income tax provision (benefit)	355			353			369
Income (loss) from continuing operations, net of tax	$	644		$	638		$	673
Selected performance metrics:
Period-end loans held for investment	$	69,936		$	70,490		$	80,621
Average loans held for investment	69,947			69,966			80,502
Average yield on loans held for investment⁽⁴⁾	15.65		%	15.91		%	14.88		%
Total net revenue margin⁽⁵⁾	18.53			18.71			17.08
Net charge-off rate	3.67			4.28			3.04
30+ day performing delinquency rate	3.46			3.05			3.52
30+ day delinquency rate⁽⁶⁾	**			3.05			3.52
Purchase volume⁽⁸⁾	$	47,420		$	47,273		$	44,552
International Card
Earnings:
Net interest income	$	265		$	268		$	276
Non-interest income	85			95			104
Total net revenue	350			363			380
Provision for credit losses	88			66			81
Non-interest expense	191			184			206
Income (loss) from continuing operations before taxes	71			113			93
Income tax provision (benefit)	21			32			25
Income (loss) from continuing operations, net of tax	$	50		$	81		$	68
Selected performance metrics:
Period-end loans held for investment	$	8,031		$	7,820		$	8,412
Average loans held for investment	7,782			7,980			8,154
Average yield on loans held for investment	16.35		%	16.19		%	16.47		%
Total net revenue margin	17.99			18.20			18.64
Net charge-off rate	4.71			5.08			4.95
30+ day performing delinquency rate	3.86			3.84			4.92
30+ day delinquency rate⁽⁶⁾	**			4.79			4.92
Nonperforming loan rate⁽³⁾	1.16			1.20			—
Purchase volume⁽⁸⁾	$	3,523		$	3,515		$	3,468

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial & Statistical Summary—Consumer Banking Business⁽¹⁾⁽²⁾

	2013			2013			2012
*(Dollars in millions) (unaudited)*	Q3			Q2			Q3
Consumer Banking
Earnings:
Net interest income	$	1,481		$	1,478		$	1,501
Non-interest income	184			189			260
Total net revenue	1,665			1,667			1,761
Provision for credit losses	202			67			202
Non-interest expense	927			910			977
Income from continuing operations before taxes	536			690			582
Income tax provision	191			246			206
Income from continuing operations, net of tax	$	345		$	444		$	376

Selected performance metrics:
Period-end loans held for investment	$	71,285		$	72,218		$	76,738
Average loans held for investment	71,664			72,930			77,271
Average yield on loans held for investment	6.21		%	5.99		%	6.05		%
Auto loan originations	$	4,752		$	4,525		$	3,905
Period-end deposits	168,437			169,789			173,100
Average deposits	169,082			170,733			173,334
Deposit interest expense rate	0.63		%	0.64		%	0.71		%
Core deposit intangible amortization	$	34		$	35		$	41
Net charge-off rate	0.95		%	0.60		%	0.83		%
30+ day performing delinquency rate	2.82			2.55			2.23
30+ day delinquency rate⁽⁶⁾	**			3.15			2.91
Nonperforming loan rate	0.79			0.78			0.84
Nonperforming asset rate⁽³⁾	0.87			0.84			0.89
Period-end loans serviced for others	$	14,043		$	14,313		$	15,659

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

	2013			2013			2012
(Dollars in millions) (unaudited)	Q3			Q2			Q3
Commercial Banking
Earnings:
Net interest income	$	480		$	457		$	432
Non-interest income	87			93			87
Total net revenue⁽⁹⁾	567			550			519
Provision for credit losses	31			(14)			(87)
Non-interest expense	266			269			253
Income from continuing operations before taxes	270			295			353
Income tax provision	96			105			125
Income from continuing operations, net of tax	$	174		$	190		$	228

Selected performance metrics:
Period-end loans held for investment	$	42,399		$	40,805		$	37,209
Average loans held for investment	41,576			39,512			36,767
Average yield on loans held for investment	3.87		%	3.84		%	4.14		%
Period-end deposits	$	30,592		$	30,869		$	28,670
Average deposits	30,685			30,746			28,063
Deposit interest expense rate	0.27		%	0.26		%	0.31		%
Core deposit intangible amortization	$	6		$	8		$	8
Net charge-off rate	0.07		%	0.04		%	—		%
Nonperforming loan rate	0.47			0.60			0.82
Nonperforming asset rate⁽³⁾	0.56			0.62			0.87

Risk category:⁽¹⁰⁾
Noncriticized	$	40,940		$	39,168		$	35,112
Criticized performing	968			1,087			1,394
Criticized nonperforming	201			244			305
Total risk-rated loans	42,109			40,499			36,811
Acquired commercial loans	290			306			398
Total commercial loans	$	42,399		$	40,805		$	37,209

% of period-end commercial loans held for investment:
Noncriticized	96.5		%	96.0		%	94.4		%
Criticized performing	2.3			2.7			3.7
Criticized nonperforming	0.5			0.6			0.8
Total risk-rated loans	99.3			99.3			98.9
Acquired commercial loans	0.7			0.7			1.1
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)	Q3		Q2		Q3
Other
Earnings:
Net interest expense	$	(158)	$	(186)	$	(278)
Non-interest income	(14)		(29)		(37)
Total net revenue	(172)		(215)		(315)
Provision for credit losses	(1)		(4)		7
Non-interest expense	50		61		25
Income (loss) from continuing operations before taxes	(221)		(272)		(347)
Income tax benefit	(138)		(155)		(190)
Income (loss) from continuing operations, net of tax	$	(83)	$	(117)	$	(157)

Selected performance metrics:
Period-end loans held for investment	$	163	$	179	$	152
Average loans held for investment	166		174		162
Period-end deposits	7,805		9,207		11,485
Average deposits	8,573		9,171		11,926
Total
Earnings:
Net interest income	$	4,560	$	4,553	$	4,646
Non-interest income	1,091		1,085		1,136
Total net revenue	5,651		5,638		5,782
Provision for credit losses	849		762		1,014
Non-interest expense	3,147		3,059		3,045
Income from continuing operations before taxes	1,655		1,817		1,723
Income tax provision	525		581		535
Income from continuing operations, net of tax	$	1,130	$	1,236	$	1,188

Selected performance metrics:
Period-end loans held for investment	$	191,814	$	191,512	$	203,132
Average loans held for investment	191,135		190,562		202,856
Period-end deposits	206,834		209,865		213,255
Average deposits	208,340		210,650		213,323

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, CCB, and the 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

31,377

33,620

40,749

Period-end loans held for investment

30,080

32,275

39,388

Average loans held for investment

30,713

33,144

40,158

⁽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 Card of 121 basis points and 110 basis points, respectively, in Q3 2013 and 168 basis points and 152 basis points, respectively, in Q2 2013. The sale of the Best Buy portfolio to Citi Bank, N.A 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 Card of 136 basis points and 123 basis points, respectively, in Q3 2013 and 188 basis points and 169 basis points, respectively, in Q2 2013. The sale of the Best Buy portfolio to Citi Bank, N.A was completed on September 6, 2013.

⁽⁶⁾ The 30+ day delinquency rate as of the end of Q3 2013 will be provided in our Quarterly Report on Form 10-Q for the period ended September 30, 2013.

⁽⁷⁾ 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.

⁽⁸⁾ Includes credit card purchase transactions, net of returns. Excludes cash advance transactions.

⁽⁹⁾ 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 on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35%.

⁽¹⁰⁾ Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.

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 capital 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 capital measures. While our non-GAAP capital 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)	Q3			Q2			Q3
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity	$	41,284		$	41,579		$	38,535
Adjustments: Average goodwill and other intangible assets ⁽¹⁾	(15,829)			(15,974)			(16,408)
Noncumulative perpetual preferred stock⁽²⁾	(853)			(853)			(456)
Average tangible common equity⁽³⁾	$	24,602		$	24,752		$	21,671
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity	$	41,750		$	41,041		$	39,672
Adjustments: Goodwill and other intangible assets ⁽¹⁾	(15,760)			(15,872)			(16,323)
Noncumulative perpetual preferred stock⁽²⁾	(853)			(853)			(853)
Tangible common equity⁽³⁾	$	25,137		$	24,316		$	22,496
Total Assets to Tangible Assets
Total assets	$	289,888		$	296,542		$	301,989
Adjustments: Goodwill and other intangible assets⁽¹⁾	(15,760)			(15,872)			(16,323)
Tangible assets	$	274,128		$	280,670		$	285,666
Total Average Assets to Average Tangible Assets
Average total assets	$	294,939		$	297,766		$	297,154
Adjustments: Average goodwill and other intangible assets ⁽¹⁾	(15,829)			(15,974)			(16,408)
Average tangible assets	$	279,110		$	281,792		$	280,746
Non-GAAP TCE Ratio
Tangible common equity⁽³⁾	$	25,137		$	24,316		$	22,496
Tangible assets	274,128			280,670			285,666
TCE ratio⁽³⁾	9.2		%	8.7		%	7.9		%
Regulatory Capital Ratios⁽⁴⁾
Total stockholders' equity	$	41,750		$	41,041		$	39,672
Adjustments: Net unrealized gains on AFS securities recorded in AOCI⁽⁵⁾	736			503			(752)
Net (gains) losses on cash flow hedges recorded in AOCI⁽⁵⁾	123			175			(6)
Disallowed goodwill and other intangible assets	(14,263)			(14,309)			(14,497)
Disallowed deferred tax assets	—			—			(221)
Noncumulative perpetual preferred stock⁽²⁾	(853)			(853)			(853)
Other	(5)			(5)			(12)
Tier 1 common capital	27,488			26,552			23,331
Adjustments: Noncumulative perpetual preferred stock⁽²⁾	853			853			853
Tier 1 restricted core capital items⁽⁶⁾	2			2			3,636
Tier 1 capital	28,343			27,407			27,820
Adjustments: Long-term debt qualifying as Tier 2 capital	1,909			2,104			2,119
Qualifying allowance for loan and lease losses	2,727			2,781			2,767
Other Tier 2 components	8			12			17
Tier 2 capital	4,644			4,897			4,903
Total risk-based capital⁽⁷⁾	$	32,987		$	32,304		$	32,723

Risk-weighted assets⁽⁸⁾	$	215,901		$	220,166		$	218,390
Tier 1 common ratio⁽⁹⁾	12.7		%	12.1		%	10.7		%
Tier 1 risk-based capital ratio⁽¹⁰⁾	13.1			12.4			12.7
Total risk-based capital ratio⁽¹¹⁾	15.3			14.7			15.0

⁽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 Q3 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 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.