Capital One Reports Third Quarter 2018 Net Income of $1.5 billion, or $2.99 per share

Excluding adjusting items, Third Quarter 2018 Net Income of $3.12 per share(1)

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Oct 23, 2018, 16:05 ET

MCLEAN, Va., Oct. 23, 2018 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2018 of $1.5 billion, or $2.99 per diluted common share, compared with net income of $1.9 billion, or $3.71 per diluted common share, in the second quarter of 2018, and with net income of $1.1 billion, or $2.14 per diluted common share, in the third quarter of 2017. Excluding adjusting items, net income for the third quarter of 2018 was $3.12 per diluted common share⁽¹⁾.

"Our digital and technology transformation is accelerating, and is powering our ability to grow new customer relationships and deepen engagement with new and existing customers," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We continue to build an enduringly great franchise with the scale, brand, capabilities, and infrastructure to succeed as the digital revolution transforms our industry and our society."

Adjusting items in the third quarter of 2018, which are excluded from diluted EPS and 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
Net gains on the sales of exited businesses	$	141	$	0.22
Legal reserve build	(170)		(0.35)

Notable item in the third quarter of 2018 included:


	Pre-Tax		Diluted EPS
(Dollars in millions, except per share data)	Impact		Impact
Investment portfolio impairment charges	$	(200)	$	(0.32)


⁽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. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.

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

Third Quarter 2018 Income Statement Summary:

Total net revenue decreased 3 percent to $7.0 billion.
Recognized net gains of $141 million on the sales of exited businesses.
Total non-interest expense increased 10 percent to $3.8 billion:

9 percent increase in operating expenses.
19 percent increase in marketing.

Pre-provision earnings decreased 15 percent to $3.2 billion⁽²⁾.
Provision for credit losses decreased 1 percent to $1.3 billion:

Net charge-offs of $1.4 billion.
$157 million reserve release.

Net interest margin of 7.01 percent, up 35 basis points.
Efficiency ratio of 54.19 percent.

Efficiency ratio excluding adjusting items was 52.70 percent⁽¹⁾.

Operating efficiency ratio of 46.95 percent.

Operating efficiency ratio excluding adjusting items was 45.29 percent⁽¹⁾.

Third Quarter 2018 Balance Sheet Summary:

Common equity Tier 1 capital ratio under Basel III Standardized Approach of 11.2 percent at September 30, 2018.
Period-end loans held for investment in the quarter increased $2.6 billion, or 1 percent, to $238.8 billion.

Credit Card period-end loans increased $908 million, or 1 percent, to $110.7 billion.

Domestic Card period-end loans increased $850 million, or 1 percent, to $101.6 billion.

Consumer Banking period-end loans increased $602 million, or 1 percent, to $59.3 billion:

Auto period-end loans increased $641 million, or 1 percent, to $56.4 billion.

Commercial Banking period-end loans increased $1.1 billion, or 2 percent, to $68.7 billion.

Average loans held for investment in the quarter decreased $4.0 billion, or 2 percent, to $236.8 billion.

Credit Card average loans increased $1.6 billion, or 1 percent, to $109.5 billion.

Domestic Card average loans increased $1.7 billion, or 2 percent, to $100.6 billion.

Consumer Banking average loans decreased $7.3 billion, or 11 percent, to $59.2 billion:

Auto average loans increased $999 million, or 2 percent, to $56.3 billion.
Home loans average loans decreased $8.1 billion, or 100 percent, driven by the timing of the sale of substantially all of our consumer home loan portfolio.

Commercial Banking average loans increased $1.7 billion, or 3 percent, to $68.0 billion.

Period-end total deposits decreased $1.0 billion, or less than 1 percent, to $247.2 billion, while average deposits decreased $2.1 billion, or 1 percent, to $246.7 billion.
Interest-bearing deposits rate paid increased 11 basis points to 1.23 percent.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on October 23, 2018 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 November 6, 2018 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 $247.2 billion in deposits and $362.9 billion in total assets as of September 30, 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. 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⁾
Third 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	6
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	8
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	9
	Table 7:	Loan Information and Performance Statistics	10
	Table 8:	Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity	12
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	13
	Table 10:	Financial & Statistical Summary—Credit Card Business	14
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	16
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	17
	Table 13:	Financial & Statistical Summary—Other and Total	18
Other
	Table 14:	Notes to Loan, Allowance and Business Segment Disclosures (Tables 7—13)	19
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	20

__________
⁽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 Quarterly Report on Form 10-Q for the period ended September 30, 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 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except per share data and as noted)	2018		2018		2018		2017		2017		2018		2017						2018 vs.
(Dollars in millions, except per share data and as noted)	Q3		Q2		Q1		Q4		Q3		Q2		Q3		2018		2017		2017
Income Statement
Net interest income	$	5,786	$	5,551	$	5,718	$	5,813	$	5,700	4	%	2	%	$	17,055	$	16,647	2	%
Non-interest income	1,176		1,641		1,191		1,200		1,285		(28)		(8)		4,008		3,577		12
Total net revenue⁽¹⁾	6,962		7,192		6,909		7,013		6,985		(3)		—		21,063		20,224		4
Provision for credit losses	1,268		1,276		1,674		1,926		1,833		(1)		(31)		4,218		5,625		(25)
Non-interest expense:
Marketing	504		425		414		460		379		19		33		1,343		1,210		11
Operating expenses	3,269		2,999		3,159		3,319		3,188		9		3		9,427		9,205		2
Total non-interest expense	3,773		3,424		3,573		3,779		3,567		10		6		10,770		10,415		3
Income from continuing operations before income taxes	1,921		2,492		1,662		1,308		1,585		(23)		21		6,075		4,184		45
Income tax provision	420		575		319		2,170		448		(27)		(6)		1,314		1,205		9
Income (loss) from continuing operations, net of tax	1,501		1,917		1,343		(862)		1,137		(22)		32		4,761		2,979		60
Income (loss) from discontinued operations, net of tax	1		(11)		3		(109)		(30)		**		**		(7)		(26)		(73)
Net income (loss)	1,502		1,906		1,346		(971)		1,107		(21)		36		4,754		2,953		61
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(9)		(12)		(10)		(1)		(8)		(25)		13		(32)		(21)		52
Preferred stock dividends	(53)		(80)		(52)		(80)		(52)		(34)		2		(185)		(185)		—
Net income (loss) available to common stockholders	$	1,440	$	1,814	$	1,284	$	(1,052)	$	1,047	(21)		38		$	4,537	$	2,747	65
Common Share Statistics
Basic earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	3.01	$	3.76	$	2.63	$	(1.95)	$	2.22	(20)	%	36	%	$	9.40	$	5.73	64	%
Income (loss) from discontinued operations	—		(0.02)		0.01		(0.22)		(0.06)		**		**		(0.01)		(0.05)		(80)
Net income (loss) per basic common share	$	3.01	$	3.74	$	2.64	$	(2.17)	$	2.16	(20)		39		$	9.39	$	5.68	65
Diluted earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	2.99	$	3.73	$	2.61	$	(1.95)	$	2.20	(20)		36		$	9.33	$	5.68	64
Income (loss) from discontinued operations	—		(0.02)		0.01		(0.22)		(0.06)		**		**		(0.01)		(0.05)		(80)
Net income (loss) per diluted common share	$	2.99	$	3.71	$	2.62	$	(2.17)	$	2.14	(19)		40		$	9.32	$	5.63	66
Weighted-average common shares outstanding (in millions):
Basic	477.8		485.1		486.9		485.7		484.9		(2)		(1)		483.2		483.7		—
Diluted	480.9		488.3		490.8		485.7		489.0		(2)		(2)		486.7		488.1		—
Common shares outstanding (period-end, in millions)	473.7		478.4		485.9		485.5		484.4		(1)		(2)		473.7		484.4		(2)
Dividends declared and paid per common share	$	0.40	$	0.40	$	0.40	$	0.40	$	0.40	—		—		$	1.20	$	1.20	—
Tangible book value per common share (period-end)⁽³⁾	66.15		63.86		61.29		60.28		63.06		4		5		66.15		63.06		5

											2018 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions)	2018		2018		2018		2017		2017		2018		2017						2018 vs.
(Dollars in millions)	Q3		Q2		Q1		Q4		Q3		Q2		Q3		2018		2017		2017
Balance Sheet (Period-End)
Loans held for investment	$	238,761	$	236,124	$	248,256	$	254,473	$	252,422	1	%	(5)	%	$	238,761	$	252,422	(5)	%
Interest-earning assets	331,293		332,167		332,251		334,124		329,002		—		1		331,293		329,002		1
Total assets	362,909		363,989		362,857		365,693		361,402		—		—		362,909		361,402		—
Interest-bearing deposits	222,356		222,605		224,671		217,298		212,956		—		4		222,356		212,956		4
Total deposits	247,195		248,225		250,847		243,702		239,062		—		3		247,195		239,062		3
Borrowings	52,205		53,310		50,693		60,281		59,458		(2)		(12)		52,205		59,458		(12)
Common equity	46,277		45,566		44,842		44,370		45,794		2		1		46,277		45,794		1
Total stockholders' equity	50,638		49,926		49,203		48,730		50,154		1		1		50,638		50,154		1
Balance Sheet (Average Balances)
Loans held for investment	$	236,766	$	240,758	$	249,726	$	252,566	$	245,822	(2)	%	(4)	%	$	242,369	$	243,205	—
Interest-earning assets	330,272		333,495		330,183		330,742		322,015		(1)		3		331,318		319,497		4	%
Total assets	360,937		363,929		362,049		363,045		355,191		(1)		2		362,293		352,216		3
Interest-bearing deposits	221,431		223,079		219,670		215,258		213,137		(1)		4		221,400		213,508		4
Total deposits	246,720		248,790		245,270		241,562		238,843		(1)		3		246,932		239,316		3
Borrowings	51,684		52,333		54,588		58,109		54,271		(1)		(5)		52,858		52,159		1
Common equity	46,407		45,466		44,670		46,350		45,816		2		1		45,521		44,772		2
Total stockholders' equity	50,768		49,827		49,031		50,710		50,176		2		1		49,882		49,132		2

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

																2018 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except as noted)	2018			2018			2018			2017			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2018			2017			2017
Performance Metrics
Net interest income growth (period over period)	4		%	(3)		%	(2)		%	2		%	4		%	**		**		2		%	8		%	**
Non-interest income growth (period over period)	(28)			38			(1)			(7)			4			**		**		12			2			**
Total net revenue growth (period over period)	(3)			4			(1)			—			4			**		**		4			7			**
Total net revenue margin⁽⁴⁾	8.43			8.63			8.37			8.48			8.68			(20)	bps	(25)	bps	8.48			8.44			4	bps
Net interest margin⁽⁵⁾	7.01			6.66			6.93			7.03			7.08			35		(7)		6.86			6.95			(9)
Return on average assets	1.66			2.11			1.48			(0.95)			1.28			(45)		38		1.75			1.13			62
Return on average tangible assets⁽⁶⁾	1.74			2.20			1.55			(0.99)			1.34			(46)		40		1.83			1.18			65
Return on average common equity⁽⁷⁾	12.40			16.06			11.47			(8.14)			9.40			(4)	%	3	%	13.31			8.26			5	%
Return on average tangible common equity⁽⁸⁾	18.32			23.99			17.32			(12.12)			14.11			(6)		4		19.88			12.56			7
Non-interest expense as a percentage of average loans held for investment	6.37			5.69			5.72			5.98			5.80			68	bps	57	bps	5.92			5.71			21	bps
Efficiency ratio⁽⁹⁾	54.19			47.61			51.72			53.89			51.07			7	%	3	%	51.13			51.50			—
Operating efficiency ratio⁽¹⁰⁾	46.95			41.70			45.72			47.33			45.64			5		1		44.76			45.52			(1)	%
Effective income tax rate for continuing operations	21.9			23.1			19.2			165.9			28.3			(1)		(6)		21.6			28.8			(7)
Employees (in thousands), period-end	47.6			47.8			47.9			49.3			50.4			—		(6)		47.6			50.4			(6)
Credit Quality Metrics
Allowance for loan and lease losses	$	7,219		$	7,368		$	7,567		$	7,502		$	7,418		(2)	%	(3)	%	$	7,219		$	7,418		(3)	%
Allowance as a percentage of loans held for investment	3.02		%	3.12		%	3.05		%	2.95		%	2.94		%	(10)	bps	8	bps	3.02		%	2.94		%	8	bps
Net charge-offs	$	1,425		$	1,459		$	1,618		$	1,828		$	1,606		(2)	%	(11)	%	$	4,502		$	4,734		(5)	%
Net charge-off rate⁽¹¹⁾	2.41		%	2.42		%	2.59		%	2.89		%	2.61		%	(1)	bps	(20)	bps	2.48		%	2.60		%	(12)	bps
30+ day performing delinquency rate	3.28			2.88			2.72			3.23			2.93			40		35		3.28			2.93			35
30+ day delinquency rate	3.48			3.05			2.91			3.48			3.24			43		24		3.48			3.24			24
Capital Ratios⁽¹²⁾
Common equity Tier 1 capital	11.2		%	11.1		%	10.5		%	10.3		%	10.7		%	10	bps	50	bps	11.2		%	10.7		%	50	bps
Tier 1 capital	12.8			12.6			12.0			11.8			12.2			20		60		12.8			12.2			60
Total capital	15.2			15.1			14.5			14.4			14.8			10		40		15.2			14.8			40
Tier 1 leverage	10.6			10.3			10.1			9.9			10.5			30		10		10.6			10.5			10
Tangible common equity ("TCE")⁽¹³⁾	9.0			8.8			8.6			8.3			8.8			20		20		9.0			8.8			20

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

											2018 Q3 vs.				Nine Months Ended September 30,
	2018		2018		2018		2017		2017		2018		2017						2018 vs.
(Dollars in millions, except per share data and as noted)	Q3		Q2		Q1		Q4		Q3		Q2		Q3		2018		2017		2017
Interest income:
Loans, including loans held for sale	$	6,247	$	5,989	$	6,134	$	6,133	$	5,960	4	%	5	%	$	18,370	$	17,255	6	%
Investment securities	593		539		452		431		431		10		38		1,584		1,280		24
Other	55		68		51		40		29		(19)		90		174		83		110
Total interest income	6,895		6,596		6,637		6,604		6,420		5		7		20,128		18,618		8
Interest expense:
Deposits	681		622		539		457		410		9		66		1,842		1,145		61
Securitized debt obligations	127		124		107		91		85		2		49		358		236		52
Senior and subordinated notes	288		289		251		209		194		—		48		828		522		59
Other borrowings	13		10		22		34		31		30		(58)		45		68		(34)
Total interest expense	1,109		1,045		919		791		720		6		54		3,073		1,971		56
Net interest income	5,786		5,551		5,718		5,813		5,700		4		2		17,055		16,647		2
Provision for credit losses	1,268		1,276		1,674		1,926		1,833		(1)		(31)		4,218		5,625		(25)
Net interest income after provision for credit losses	4,518		4,275		4,044		3,887		3,867		6		17		12,837		11,022		16
Non-interest income:
Interchange fees, net	714		723		643		665		662		(1)		8		2,080		1,908		9
Service charges and other customer-related fees	410		391		432		394		414		5		(1)		1,233		1,203		2
Net securities gains (losses)	(196)		(1)		8		1		68		**		**		(189)		64		**
Other	248		528		108		140		141		(53)		76		884		402		120
Total non-interest income	1,176		1,641		1,191		1,200		1,285		(28)		(8)		4,008		3,577		12
Non-interest expense:
Salaries and associate benefits	1,432		1,430		1,520		1,521		1,524		—		(6)		4,382		4,378		—
Occupancy and equipment	515		503		490		523		471		2		9		1,508		1,416		6
Marketing	504		425		414		460		379		19		33		1,343		1,210		11
Professional services	275		234		210		274		297		18		(7)		719		823		(13)
Communications and data processing	311		317		306		306		294		(2)		6		934		871		7
Amortization of intangibles	44		43		44		61		61		2		(28)		131		184		(29)
Other	692		472		589		634		541		47		28		1,753		1,533		14
Total non-interest expense	3,773		3,424		3,573		3,779		3,567		10		6		10,770		10,415		3
Income from continuing operations before income taxes	1,921		2,492		1,662		1,308		1,585		(23)		21		6,075		4,184		45
Income tax provision	420		575		319		2,170		448		(27)		(6)		1,314		1,205		9
Income (loss) from continuing operations, net of tax	1,501		1,917		1,343		(862)		1,137		(22)		32		4,761		2,979		60
Income (loss) from discontinued operations, net of tax	1		(11)		3		(109)		(30)		**		**		(7)		(26)		(73)
Net income (loss)	1,502		1,906		1,346		(971)		1,107		(21)		36		4,754		2,953		61
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(9)		(12)		(10)		(1)		(8)		(25)		13		(32)		(21)		52
Preferred stock dividends	(53)		(80)		(52)		(80)		(52)		(34)		2		(185)		(185)		—
Net income (loss) available to common stockholders	$	1,440	$	1,814	$	1,284	$	(1,052)	$	1,047	(21)		38		$	4,537	$	2,747	65

											2018 Q3 vs.				Nine Months Ended September 30,
	2018		2018		2018		2017		2017		2018		2017						2018 vs.
(Dollars in millions, except per share data and as noted)	Q3		Q2		Q1		Q4		Q3		Q2		Q3		2018		2017		2017
Basic earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	3.01	$	3.76	$	2.63	$	(1.95)	$	2.22	(20)	%	36	%	$	9.40	$	5.73	64	%
Income (loss) from discontinued operations	—		(0.02)		0.01		(0.22)		(0.06)		**		**		(0.01)		(0.05)		(80)
Net income (loss) per basic common share	$	3.01	$	3.74	$	2.64	$	(2.17)	$	2.16	(20)		39		$	9.39	$	5.68	65
Diluted earnings per common share:⁽²⁾
Net income (loss) from continuing operations	$	2.99	$	3.73	$	2.61	$	(1.95)	$	2.20	(20)		36		$	9.33	$	5.68	64
Income (loss) from discontinued operations	—		(0.02)		0.01		(0.22)		(0.06)		**		**		(0.01)		(0.05)		(80)
Net income (loss) per diluted common share	$	2.99	$	3.71	$	2.62	$	(2.17)	$	2.14	(19)		40		$	9.32	$	5.63	66
Weighted-average common shares outstanding (in millions):
Basic common shares	477.8		485.1		486.9		485.7		484.9		(2)		(1)		483.2		483.7		—
Diluted common shares	480.9		488.3		490.8		485.7		489.0		(2)		(2)		486.7		488.1		—
Dividends declared and paid per common share	$	0.40	$	0.40	$	0.40	$	0.40	$	0.40	—		—		$	1.20	$	1.20	—

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

											2018 Q3 vs.
	2018		2018		2018		2017		2017		2018		2017
(Dollars in millions)	Q3		Q2		Q1		Q4		Q3		Q2		Q3
Assets:
Cash and cash equivalents:
Cash and due from banks	$	4,547	$	4,499	$	4,220	$	4,458	$	4,154	1	%	9	%
Interest-bearing deposits and other short-term investments	6,335		7,774		9,788		9,582		4,330		(19)		46
Total cash and cash equivalents	10,882		12,273		14,008		14,040		8,484		(11)		28
Restricted cash for securitization investors	746		1,023		309		312		304		(27)		145
Investment securities:
Securities available for sale	47,384		50,691		47,155		37,655		39,742		(7)		19
Securities held to maturity	34,631		33,464		23,075		28,984		28,650		3		21
Total investment securities	82,015		84,155		70,230		66,639		68,392		(3)		20
Loans held for investment:
Unsecuritized loans held for investment	204,796		201,222		213,313		218,806		217,659		2		(6)
Loans held in consolidated trusts	33,965		34,902		34,943		35,667		34,763		(3)		(2)
Total loans held for investment	238,761		236,124		248,256		254,473		252,422		1		(5)
Allowance for loan and lease losses	(7,219)		(7,368)		(7,567)		(7,502)		(7,418)		(2)		(3)
Net loans held for investment	231,542		228,756		240,689		246,971		245,004		1		(5)
Loans held for sale, at lower of cost or fair value	1,402		1,480		1,498		971		1,566		(5)		(10)
Premises and equipment, net	4,149		4,095		4,055		4,033		3,955		1		5
Interest receivable	1,518		1,493		1,496		1,536		1,426		2		6
Goodwill	14,513		14,531		14,536		14,533		14,532		—		—
Other assets	16,142		16,183		16,036		16,658		17,739		—		(9)
Total assets	$	362,909	$	363,989	$	362,857	$	365,693	$	361,402	—		—

											2018 Q3 vs.
	2018		2018		2018		2017		2017		2018		2017
(Dollars in millions)	Q3		Q2		Q1		Q4		Q3		Q2		Q3
Liabilities:
Interest payable	$	391	$	450	$	353	$	413	$	301	(13)	%	30	%
Deposits:
Non-interest-bearing deposits	24,839		25,620		26,176		26,404		26,106		(3)		(5)
Interest-bearing deposits	222,356		222,605		224,671		217,298		212,956		—		4
Total deposits	247,195		248,225		250,847		243,702		239,062		—		3
Securitized debt obligations	18,649		19,649		18,665		20,010		17,087		(5)		9
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	384		553		656		576		767		(31)		(50)
Senior and subordinated notes	31,291		32,920		31,051		30,755		28,420		(5)		10
Other borrowings	1,881		188		321		8,940		13,184		**		(86)
Total other debt	33,556		33,661		32,028		40,271		42,371		—		(21)
Other liabilities	12,480		12,078		11,761		12,567		12,427		3		—
Total liabilities	312,271		314,063		313,654		316,963		311,248		(1)		—

Stockholders' equity:
Preferred stock	0		0		0		0		0		—		—
Common stock	7		7		7		7		7		—		—
Additional paid-in capital, net	31,978		31,868		31,779		31,656		31,526		—		1
Retained earnings	34,883		33,626		31,996		30,700		31,946		4		9
Accumulated other comprehensive loss	(1,877)		(1,793)		(1,599)		(926)		(622)		5		**
Treasury stock, at cost	(14,353)		(13,782)		(12,980)		(12,707)		(12,703)		4		13
Total stockholders' equity	50,638		49,926		49,203		48,730		50,154		1		1
Total liabilities and stockholders' equity	$	362,909	$	363,989	$	362,857	$	365,693	$	361,402	—		—

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 $305 million in Q3 2018, $309 million in Q2 2018, $335 million in Q1 2018, $377 million in Q4 2017 and $356 million in Q3 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 Q3 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 Q3						2018 Q2						2017 Q3
	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	$	238,150	$	6,247	10.49	%	$	242,043	$	5,989	9.90	%	$	247,022	$	5,960	9.65	%
Investment securities	83,894		593		2.83		79,829		539		2.70		69,302		431		2.49
Cash equivalents and other	8,228		55		2.66		11,623		68		2.34		5,691		29		2.04
Total interest-earning assets	$	330,272	$	6,895	8.35		$	333,495	$	6,596	7.91		$	322,015	$	6,420	7.97
Interest-bearing liabilities:
Interest-bearing deposits	$	221,431	$	681	1.23		$	223,079	$	622	1.12		$	213,137	$	410	0.77
Securitized debt obligations	18,917		127		2.68		19,147		124		2.59		17,598		85		1.93
Senior and subordinated notes	31,660		288		3.63		32,250		289		3.58		28,753		194		2.70
Other borrowings and liabilities	3,084		13		1.67		4,132		10		0.97		9,320		31		1.33
Total interest-bearing liabilities	$	275,092	$	1,109	1.62		$	278,608	$	1,045	1.50		$	268,808	$	720	1.07
Net interest income/spread			$	5,786	6.73				$	5,551	6.41				$	5,700	6.90
Impact of non-interest-bearing funding					0.28						0.25						0.18
Net interest margin					7.01	%					6.66	%					7.08	%

							Nine Months Ended September 30,
							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							$	243,653	$	18,370	10.05	%	$	244,097	$	17,255	9.43	%
Investment securities							77,819		1,584		2.71		68,862		1,280		2.48
Cash equivalents and other							9,846		174		2.36		6,538		83		1.69
Total interest-earning assets							$	331,318	$	20,128	8.10		$	319,497	$	18,618	7.77
Interest-bearing liabilities:
Interest-bearing deposits							$	221,400	$	1,842	1.11		$	213,508	$	1,145	0.72
Securitized debt obligations							19,251		358		2.46		17,726		236		1.78
Senior and subordinated notes							31,452		828		3.51		27,140		522		2.56
Other borrowings and liabilities							4,674		45		1.28		8,434		68		1.08
Total interest-bearing liabilities							$	276,777	$	3,073	1.49		$	266,808	$	1,971	0.98
Net interest income/spread									$	17,055	6.61				$	16,647	6.79
Impact of non-interest-bearing funding											0.25						0.16
Net interest margin											6.86	%					6.95	%


__________
⁽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 $2 million and $10 million for Q3 2018, and $1 million and $36 million for the nine months ended September 30, 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 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except as noted)	2018 Q3			2018 Q2			2018 Q1			2017 Q4			2017 Q3			2018 Q2		2017 Q3		2018			2017			2018 vs. 2017
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card	$	101,564		$	100,714		$	98,535		$	105,293		$	99,981		1	%	2	%	$	101,564		$	99,981		2	%
International card businesses	9,121			9,063			9,041			9,469			9,149			1		—		9,121			9,149			—
Total credit card	110,685			109,777			107,576			114,762			109,130			1		1		110,685			109,130			1
Consumer banking:
Auto	56,422			55,781			54,811			53,991			53,290			1		6		56,422			53,290			6
Home loan⁽¹⁾	—			—			16,630			17,633			18,820			**		**		—			18,820			**
Retail banking	2,907			2,946			3,233			3,454			3,454			(1)		(16)		2,907			3,454			(16)
Total consumer banking	59,329			58,727			74,674			75,078			75,564			1		(21)		59,329			75,564			(21)
Commercial banking:
Commercial and multifamily real estate	29,064			28,292			27,360			26,150			27,944			3		4		29,064			27,944			4
Commercial and industrial	39,325			38,948			38,208			38,025			39,306			1		—		39,325			39,306			—
Total commercial lending	68,389			67,240			65,568			64,175			67,250			2		2		68,389			67,250			2
Small-ticket commercial real estate	358			369			385			400			420			(3)		(15)		358			420			(15)
Total commercial banking	68,747			67,609			65,953			64,575			67,670			2		2		68,747			67,670			2
Other loans	—			11			53			58			58			**		**		—			58			**
Total loans held for investment	$	238,761		$	236,124		$	248,256		$	254,473		$	252,422		1		(5)		$	238,761		$	252,422		(5)
Loans Held for Investment (Average)
Credit card:
Domestic credit card	$	100,566		$	98,895		$	100,450		$	101,087		$	93,729		2	%	7	%	$	99,970		$	92,847		8	%
International card businesses	8,944			8,998			9,052			8,942			8,816			(1)		1		8,998			8,411			7
Total credit card	109,510			107,893			109,502			110,029			102,545			1		7		108,968			101,258			8
Consumer banking:
Auto	56,297			55,298			54,344			53,747			52,615			2		7		55,320			50,711			9
Home loan⁽¹⁾	—			8,098			17,224			18,109			19,302			**		**		8,377			20,211			(59)
Retail banking	2,923			3,084			3,429			3,433			3,446			(5)		(15)		3,144			3,473			(9)
Total consumer banking	59,220			66,480			74,997			75,289			75,363			(11)		(21)		66,841			74,395			(10)
Commercial banking:
Commercial and multifamily real estate	28,354			27,302			26,542			27,770			27,703			4		2		27,406			27,235			1
Commercial and industrial	39,318			38,686			38,246			39,020			39,723			2		(1)		38,754			39,804			(3)
Total commercial lending	67,672			65,988			64,788			66,790			67,426			3		—		66,160			67,039			(1)
Small-ticket commercial real estate	364			376			393			410			433			(3)		(16)		378			453			(17)
Total commercial banking	68,036			66,364			65,181			67,200			67,859			3		—		66,538			67,492			(1)
Other loans	—			21			46			48			55			**		**		22			60			(63)
Total average loans held for investment	$	236,766		$	240,758		$	249,726		$	252,566		$	245,822		(2)		(4)		$	242,369		$	243,205		—

																2018 Q3 vs.				Nine Months Ended September 30,
(Dollars in millions, except as noted)	2018 Q3			2018 Q2			2018 Q1			2017 Q4			2017 Q3			2018 Q2		2017 Q3		2018			2017			2018 vs. 2017
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card⁽²⁾		4.35	%		4.72	%		5.26	%		5.08	%		4.64	%	(37)	bps	(29)	bps		4.78	%		4.96	%	(18)	bps
International card businesses		1.92			4.14			2.49			3.92			3.08		(222)		(116)			2.85			3.60		(75)
Total credit card⁽²⁾		4.15			4.67			5.03			4.99			4.51		(52)		(36)			4.62			4.85		(23)
Consumer banking:
Auto		1.73			1.32			1.53			2.12			1.96		41		(23)			1.53			1.77		(24)
Home loan⁽¹⁾		—			—			(0.03)			0.23			0.02		**		**			(0.02)			0.03		**
Retail banking		2.62			2.07			1.89			1.94			2.10		55		52			2.18			1.91		27
Total consumer banking		1.77			1.19			1.19			1.66			1.47		58		30			1.36			1.30		6
Commercial banking:
Commercial and multifamily real estate		0.04			—			—			(0.01)			(0.01)		4		5			0.01			0.01		—
Commercial and industrial		0.25			(0.07)			0.20			1.47			1.64		32		(139)			0.13			1.07		(94)
Total commercial lending		0.16			(0.04)			0.12			0.86			0.97		20		(81)			0.08			0.64		(56)
Small-ticket commercial real estate		0.56			(0.40)			(0.18)			(0.05)			0.12		96		44			(0.02)			0.33		(35)
Total commercial banking		0.16			(0.04)			0.11			0.85			0.96		20		(80)			0.08			0.64		(56)
Total net charge-offs		2.41			2.42			2.59			2.89			2.61		(1)		(20)			2.48			2.60		(12)
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card		3.80	%		3.32	%		3.57	%		4.01	%		3.94	%	48	bps	(14)	bps		3.80	%		3.94	%	(14)	bps
International card businesses		3.55			3.39			3.62			3.64			3.54		16		1			3.55			3.54		1
Total credit card		3.78			3.32			3.58			3.98			3.91		46		(13)			3.78			3.91		(13)
Consumer banking:
Auto		6.27			5.57			5.15			6.51			5.71		70		56			6.27			5.71		56
Home loan⁽¹⁾		—			—			0.20			0.20			0.17		**		**			—			0.17		**
Retail banking		0.80			0.84			0.75			0.76			0.73		(4)		7			0.80			0.73		7
Total consumer banking		6.01			5.33			3.86			4.76			4.10		68		191			6.01			4.10		191
Nonperforming Loans and Nonperforming Assets Rates⁽³⁾⁽⁴⁾
Credit card:
International card businesses		0.22	%		0.22	%		0.25	%		0.25	%		0.28	%	—		(6)	bps		0.22	%		0.28	%	(6)	bps
Total credit card		0.02			0.02			0.02			0.02			0.02		—		—			0.02			0.02		—
Consumer banking:
Auto		0.70			0.55			0.50			0.70			0.65		15	bps	5			0.70			0.65		5
Home loan⁽¹⁾		—			—			0.86			1.00			0.84		**		**			—			0.84		**
Retail banking		1.13			1.15			1.04			1.00			0.97		(2)		16			1.13			0.97		16
Total consumer banking		0.72			0.58			0.61			0.78			0.71		14		1			0.72			0.71		1
Commercial banking:
Commercial and multifamily real estate		0.13			0.01			0.01			0.15			0.23		12		(10)			0.13			0.23		(10)
Commercial and industrial		0.55			0.57			0.78			0.63			1.82		(2)		(127)			0.55			1.82		(127)
Total commercial lending		0.37			0.33			0.46			0.43			1.16		4		(79)			0.37			1.16		(79)
Small-ticket commercial real estate		1.65			1.18			1.46			1.65			1.59		47		6			1.65			1.59		6
Total commercial banking		0.38			0.34			0.47			0.44			1.16		4		(78)			0.38			1.16		(78)
Total nonperforming loans		0.30			0.25			0.32			0.35			0.54		5		(24)			0.30			0.54		(24)
Total nonperforming assets		0.33			0.30			0.35			0.41			0.60		3		(27)			0.33			0.60		(27)

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity

			Three Months Ended September 30, 2018
			Credit Card						Consumer Banking
(Dollars in millions)			Domestic Card		International Card Businesses		Total Credit Card		Auto		Retail Banking		Total Consumer Banking		Commercial Banking		Other		Total
Allowance for loan and lease losses:
Balance as of June 30, 2018			$	5,260	$	364	$	5,624	$	1,060	$	60	$	1,120	$	624	—		$	7,368
Charge-offs			(1,403)		(125)		(1,528)		(447)		(22)		(469)		(48)		$	1	(2,044)
Recoveries			309		82		391		204		3		207		21		—		619
Net charge-offs			(1,094)		(43)		(1,137)		(243)		(19)		(262)		(27)		1		(1,425)
Provision (benefit) for loan and lease losses			950		81		1,031		168		17		185		60		(1)		1,275
Allowance build (release) for loan and lease losses			(144)		38		(106)		(75)		(2)		(77)		33		—		(150)
Other changes⁽⁵⁾			—		2		2		—		—		—		(1)		—		1
Balance as of September 30, 2018			5,116		404		5,520		985		58		1,043		656		—		7,219
Reserve for unfunded lending commitments:
Balance as of June 30, 2018			—		—		—		—		5		5		112		—		117
Benefit for losses on unfunded lending commitments			—		—		—		—		(1)		(1)		(6)		—		(7)
Balance as of September 30, 2018			—		—		—		—		4		4		106		—		110
Combined allowance and reserve as of September 30, 2018			$	5,116	$	404	$	5,520	$	985	$	62	$	1,047	$	762	$	—	$	7,329

	Nine Months Ended September 30, 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	(4,649)		(383)		(5,032)		(1,250)		—		(64)		(1,314)		(76)		(7)		(6,429)
Recoveries	1,068		190		1,258		617		1		13		631		37		1		1,927
Net charge-offs	(3,581)		(193)		(3,774)		(633)		1		(51)		(683)		(39)		(6)		(4,502)
Provision (benefit) for loan and lease losses	3,424		234		3,658		499		(6)		45		538		85		(49)		4,232
Allowance build (release) for loan and lease losses	(157)		41		(116)		(134)		(5)		(6)		(145)		46		(55)		(270)
Other changes⁽¹⁾⁽⁵⁾	—		(12)		(12)		—		(53)		(1)		(54)		(1)		54		(13)
Balance as of September 30, 2018	5,116		404		5,520		985		—		58		1,043		656		—		7,219
Reserve for unfunded lending commitments:
Balance as of December 31, 2017	—		—		—		—		—		7		7		117		—		124
Benefit for losses on unfunded lending commitments	—		—		—		—		—		(3)		(3)		(11)		—		(14)
Balance as of September 30, 2018	—		—		—		—		—		4		4		106		—		110
Combined allowance and reserve as of September 30, 2018	$	5,116	$	404	$	5,520	$	985	$	—	$	62	$	1,047	$	762	$	—	$	7,329

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

	Three Months Ended September 30, 2018										Nine Months Ended September 30, 2018
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking⁽⁶⁾⁽⁷⁾		Other⁽⁶⁾⁽⁷⁾		Total		Credit Card		Consumer Banking		Commercial Banking⁽⁶⁾⁽⁷⁾		Other⁽⁶⁾⁽⁷⁾		Total
Net interest income	$	3,596	$	1,636	$	539	$	15	$	5,786	$	10,550	$	4,860	$	1,624	$	21	$	17,055
Non-interest income	893		155		189		(61)		1,176		2,634		504		585		285		4,008
Total net revenue (loss)	4,489		1,791		728		(46)		6,962		13,184		5,364		2,209		306		21,063
Provision (benefit) for credit losses	1,031		184		54		(1)		1,268		3,658		535		74		(49)		4,218
Non-interest expense	2,103		979		408		283		3,773		6,046		2,942		1,220		562		10,770
Income (loss) from continuing operations before income taxes	1,355		628		266		(328)		1,921		3,480		1,887		915		(207)		6,075
Income tax provision (benefit)	315		146		62		(103)		420		810		440		213		(149)		1,314
Income (loss) from continuing operations, net of tax	$	1,040	$	482	$	204	$	(225)	$	1,501	$	2,670	$	1,447	$	702	$	(58)	$	4,761

	Three Months Ended June 30, 2018
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking⁽⁶⁾⁽⁷⁾		Other⁽⁶⁾⁽⁷⁾		Total
Net interest income	$	3,396	$	1,609	$	549	$	(3)	$	5,551
Non-interest income	884		175		209		373		1,641
Total net revenue	4,280		1,784		758		370		7,192
Provision (benefit) for credit losses	1,171		118		34		(47)		1,276
Non-interest expense	1,904		963		409		148		3,424
Income from continuing operations before income taxes	1,205		703		315		269		2,492
Income tax provision	282		164		73		56		575
Income from continuing operations, net of tax	$	923	$	539	$	242	$	213	$	1,917

	Three Months Ended September 30, 2017										Nine Months Ended September 30, 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	$	3,440	$	1,649	$	560	$	51	$	5,700	$	10,080	$	4,744	$	1,695	$	128	$	16,647
Non-interest income	865		192		179		49		1,285		2,478		570		520		9		3,577
Total net revenue	4,305		1,841		739		100		6,985		12,558		5,314		2,215		137		20,224
Provision for credit losses	1,466		293		63		11		1,833		4,580		840		201		4		5,625
Non-interest expense	1,961		1,051		394		161		3,567		5,808		3,152		1,166		289		10,415
Income (loss) from continuing operations before income taxes	878		497		282		(72)		1,585		2,170		1,322		848		(156)		4,184
Income tax provision (benefit)	306		181		103		(142)		448		774		482		310		(361)		1,205
Income from continuing operations, net of tax	$	572	$	316	$	179	$	70	$	1,137	$	1,396	$	840	$	538	$	205	$	2,979

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

																2018 Q3 vs.				Nine Months Ended September 30,
	2018			2018			2018			2017			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2018			2017			2017
Credit Card
Earnings:
Net interest income	$	3,596		$	3,396		$	3,558		$	3,568		$	3,440		6	%	5	%	$	10,550		$	10,080		5	%
Non-interest income	893			884			857			847			865			1		3		2,634			2,478			6
Total net revenue	4,489			4,280			4,415			4,415			4,305			5		4		13,184			12,558			5
Provision for credit losses	1,031			1,171			1,456			1,486			1,466			(12)		(30)		3,658			4,580			(20)
Non-interest expense	2,103			1,904			2,039			2,108			1,961			10		7		6,046			5,808			4
Income from continuing operations before income taxes	1,355			1,205			920			821			878			12		54		3,480			2,170			60
Income tax provision	315			282			213			297			306			12		3		810			774			5
Income from continuing operations, net of tax	$	1,040		$	923		$	707		$	524		$	572		13		82		$	2,670		$	1,396		91
Selected performance metrics:
Period-end loans held for investment	$	110,685		$	109,777		$	107,576		$	114,762		$	109,130		1		1		$	110,685		$	109,130		1
Average loans held for investment	109,510			107,893			109,502			110,029			102,545			1		7		108,968			101,258			8
Average yield on loans held for investment⁽⁸⁾	15.79		%	15.06		%	15.24		%	15.13		%	15.58		%	73	bps	21	bps	15.37		%	15.24		%	13	bps
Total net revenue margin⁽⁹⁾	16.40			15.87			16.13			16.05			16.79			53		(39)		16.13			16.54			(41)
Net charge-off rate⁽²⁾	4.15			4.67			5.03			4.99			4.51			(52)		(36)		4.62			4.85			(23)
30+ day performing delinquency rate	3.78			3.32			3.58			3.98			3.91			46		(13)		3.78			3.91			(13)
30+ day delinquency rate	3.80			3.33			3.59			3.99			3.92			47		(12)		3.80			3.92			(12)
Nonperforming loan rate⁽³⁾	0.02			0.02			0.02			0.02			0.02			—		—		0.02			0.02			—
Purchase volume⁽¹⁰⁾	$	97,469		$	97,392		$	86,545		$	95,659		$	84,505		—		15	%	$	281,406		$	240,781		17	%

																2018 Q3 vs.				Nine Months Ended September 30,
	2018			2018			2018			2017			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2018			2017			2017
Domestic Card
Earnings:
Net interest income	$	3,280		$	3,108		$	3,229		$	3,268		$	3,132		6	%	5	%	$	9,617		$	9,236		4	%
Non-interest income	819			818			774			781			787			—		4		2,411			2,288			5
Total net revenue	4,099			3,926			4,003			4,049			3,919			4		5		12,028			11,524			4
Provision for credit losses	950			1,094			1,380			1,402			1,417			(13)		(33)		3,424			4,381			(22)
Non-interest expense	1,890			1,683			1,832			1,880			1,754			12		8		5,405			5,198			4
Income from continuing operations before income taxes	1,259			1,149			791			767			748			10		68		3,199			1,945			64
Income tax provision	293			268			184			280			273			9		7		745			710			5
Income from continuing operations, net of tax	$	966		$	881		$	607		$	487		$	475		10		103		$	2,454		$	1,235		99
Selected performance metrics:
Period-end loans held for investment	$	101,564		$	100,714		$	98,535		$	105,293		$	99,981		1		2		$	101,564		$	99,981		2
Average loans held for investment	100,566			98,895			100,450			101,087			93,729			2		7		99,970			92,847			8
Average yield on loans held for investment⁽⁸⁾	15.73		%	15.05		%	15.10		%	15.08		%	15.51		%	68	bps	22	bps	15.29		%	15.20		%	9	bps
Total net revenue margin⁽⁹⁾	16.30			15.88			15.94			16.03			16.72			42		(42)		16.04			16.55			(51)
Net charge-off rate⁽²⁾	4.35			4.72			5.26			5.08			4.64			(37)		(29)		4.78			4.96			(18)
30+ day delinquency rate	3.80			3.32			3.57			4.01			3.94			48		(14)		3.80			3.94			(14)
Purchase volume⁽¹⁰⁾	$	89,205		$	88,941		$	79,194		$	87,287		$	76,806		—		16	%	$	257,340		$	219,537		17	%
Refreshed FICO scores:⁽¹¹⁾
Greater than 660	67		%	68		%	66		%	66		%	65		%	(1)	%	2		67		%	65		%	2
660 or below	33			32			34			34			35			1		(2)		33			35			(2)
Total	100		%	100		%	100		%	100		%	100		%					100		%	100		%

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

																2018 Q3 vs.				Nine Months Ended September 30,
	2018			2018			2018			2017			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2018			2017			2017
Consumer Banking
Earnings:
Net interest income	$	1,636		$	1,609		$	1,615		$	1,636		$	1,649		2	%	(1)	%	$	4,860		$	4,744		2	%
Non-interest income	155			175			174			179			192			(11)		(19)		504			570			(12)
Total net revenue	1,791			1,784			1,789			1,815			1,841			—		(3)		5,364			5,314			1
Provision for credit losses	184			118			233			340			293			56		(37)		535			840			(36)
Non-interest expense	979			963			1,000			1,081			1,051			2		(7)		2,942			3,152			(7)
Income from continuing operations before income taxes	628			703			556			394			497			(11)		26		1,887			1,322			43
Income tax provision	146			164			130			144			181			(11)		(19)		440			482			(9)
Income from continuing operations, net of tax	$	482		$	539		$	426		$	250		$	316		(11)		53		$	1,447		$	840		72
Selected performance metrics:
Period-end loans held for investment⁽¹⁾	$	59,329		$	58,727		$	74,674		$	75,078		$	75,564		1		(21)		$	59,329		$	75,564		(21)
Average loans held for investment⁽¹⁾	59,220			66,480			74,997			75,289			75,363			(11)		(21)		66,841			74,395			(10)
Average yield on loans held for investment⁽⁸⁾	8.03		%	7.32		%	6.86		%	6.84		%	6.79		%	71	bps	124	bps	7.36		%	6.61		%	75	bps
Auto loan originations	$	6,643		$	6,994		$	6,707		$	6,215		$	7,043		(5)	%	(6)	%	$	20,345		$	21,521		(5)	%
Period-end deposits	196,635			194,962			193,073			185,842			184,719			1		6		196,635			184,719			6
Average deposits	194,687			193,278			187,785			184,799			185,072			1		5		191,942			185,336			4
Average deposits interest rate	1.00		%	0.88		%	0.80		%	0.69		%	0.62		%	12	bps	38	bps	0.89		%	0.60		%	29	bps
Net charge-off rate	1.77			1.19			1.19			1.66			1.47			58		30		1.36			1.30			6
30+ day performing delinquency rate	6.01			5.33			3.86			4.76			4.10			68		191		6.01			4.10			191
30+ day delinquency rate	6.61			5.80			4.27			5.34			4.61			81		200		6.61			4.61			200
Nonperforming loan rate⁽³⁾	0.72			0.58			0.61			0.78			0.71			14		1		0.72			0.71			1
Nonperforming asset rate⁽⁴⁾	0.82			0.73			0.70			0.91			0.88			9		(6)		0.82			0.88			(6)
Auto—At origination FICO scores:⁽¹²⁾
Greater than 660	50		%	50		%	51		%	51		%	51		%	—		(1)	%	50		%	51		%	(1)	%
621-660	19			19			18			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 Q3 vs.				Nine Months Ended September 30,
	2018			2018			2018			2017			2017			2018		2017								2018 vs.
(Dollars in millions, except as noted)	Q3			Q2			Q1			Q4			Q3			Q2		Q3		2018			2017			2017
Commercial Banking
Earnings:
Net interest income	$	539		$	549		$	536		$	566		$	560		(2)	%	(4)	%	$	1,624		$	1,695		(4)	%
Non-interest income	189			209			187			188			179			(10)		6		585			520			13
Total net revenue⁽⁶⁾⁽⁷⁾	728			758			723			754			739			(4)		(1)		2,209			2,215			—
Provision (benefit) for credit losses	54			34			(14)			100			63			59		(14)		74			201			(63)
Non-interest expense	408			409			403			437			394			—		4		1,220			1,166			5
Income from continuing operations before income taxes	266			315			334			217			282			(16)		(6)		915			848			8
Income tax provision	62			73			78			79			103			(15)		(40)		213			310			(31)
Income from continuing operations, net of tax	$	204		$	242		$	256		$	138		$	179		(16)		14		$	702		$	538		30
Selected performance metrics:
Period-end loans held for investment	$	68,747		$	67,609		$	65,953		$	64,575		$	67,670		2		2		$	68,747		$	67,670		2
Average loans held for investment	68,036			66,364			65,181			67,200			67,859			3		—		66,538			67,492			(1)
Average yield on loans held for investment⁽⁶⁾⁽⁸⁾	4.55		%	4.43		%	4.16		%	4.03		%	3.98		%	12	bps	57	bps	4.38		%	3.81		%	57	bps
Period-end deposits	$	30,474		$	31,078		$	34,449		$	33,938		$	32,783		(2)	%	(7)	%	$	30,474		$	32,783		(7)	%
Average deposits	31,061			32,951			34,057			34,117			33,197			(6)		(6)		32,679			33,890			(4)
Average deposits interest rate	0.79		%	0.65		%	0.52		%	0.46		%	0.42		%	14	bps	37	bps	0.65		%	0.37		%	28	bps
Net charge-off (recovery) rate	0.16			(0.04)			0.11			0.85			0.96			20		(80)		0.08			0.64			(56)
Nonperforming loan rate⁽³⁾	0.38			0.34			0.47			0.44			1.16			4		(78)		0.38			1.16			(78)
Nonperforming asset rate⁽⁴⁾	0.41			0.37			0.49			0.52			1.22			4		(81)		0.41			1.22			(81)
Risk category:⁽¹³⁾
Noncriticized	$	65,926		$	64,923		$	62,773		$	61,162		$	63,501		2	%	4	%	$	65,926		$	63,501		4	%
Criticized performing	2,204			2,088			2,432			2,649			2,878			6		(23)		2,204			2,878			(23)
Criticized nonperforming	259			229			309			284			788			13		(67)		259			788			(67)
PCI loans	358			369			439			480			503			(3)		(29)		358			503			(29)
Total commercial loans	$	68,747		$	67,609		$	65,953		$	64,575		$	67,670		2		2		$	68,747		$	67,670		2
Risk category as a percentage of period-end loans held for investment:⁽¹³⁾
Noncriticized	95.9		%	96.1		%	95.1		%	94.7		%	93.8		%	(20)	bps	210	bps	95.9		%	93.8		%	210	bps
Criticized performing	3.2			3.1			3.7			4.1			4.3			10		(110)		3.2			4.3			(110)
Criticized nonperforming	0.4			0.3			0.5			0.4			1.2			10		(80)		0.4			1.2			(80)
PCI loans	0.5			0.5			0.7			0.8			0.7			—		(20)		0.5			0.7			(20)
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 Q3 vs.				Nine Months Ended September 30,
	2018		2018		2018		2017		2017		2018		2017						2018 vs.
(Dollars in millions)	Q3		Q2		Q1		Q4		Q3		Q2		Q3		2018		2017		2017
Other⁽¹⁴⁾
Earnings:
Net interest income	$	15	$	(3)	$	9	$	43	$	51	**		(71)	%	$	21	$	128	(84)	%
Non-interest income	(61)		373		(27)		(14)		49		**		**		285		9		**
Total net revenue (loss)⁽⁶⁾⁽⁷⁾	(46)		370		(18)		29		100		**		**		306		137		123
Provision (benefit) for credit losses	(1)		(47)		(1)		—		11		(98)	%	**		(49)		4		**
Non-interest expense⁽¹⁵⁾	283		148		131		153		161		91		76		562		289		94
Income (loss) from continuing operations before income taxes	(328)		269		(148)		(124)		(72)		**		**		(207)		(156)		33
Income tax provision (benefit)	(103)		56		(102)		1,650		(142)		**		(27)		(149)		(361)		(59)
Income (loss) from continuing operations, net of tax	$	(225)	$	213	$	(46)	$	(1,774)	$	70	**		**		$	(58)	$	205	**
Selected performance metrics:
Period-end loans held for investment	—		$	11	$	53	$	58	$	58	**		**		—		$	58	**
Average loans held for investment	—		21		46		48		55		**		**		$	22	60		(63)
Period-end deposits	$	20,086	22,185		23,325		23,922		21,560		(9)		(7)		20,086		21,560		(7)
Average deposits	20,972		22,561		23,428		22,646		20,574		(7)		2		22,311		20,090		11
Total
Earnings:
Net interest income	$	5,786	$	5,551	$	5,718	$	5,813	$	5,700	4	%	2	%	$	17,055	$	16,647	2	%
Non-interest income	1,176		1,641		1,191		1,200		1,285		(28)		(8)		4,008		3,577		12
Total net revenue	6,962		7,192		6,909		7,013		6,985		(3)		—		21,063		20,224		4
Provision for credit losses	1,268		1,276		1,674		1,926		1,833		(1)		(31)		4,218		5,625		(25)
Non-interest expense	3,773		3,424		3,573		3,779		3,567		10		6		10,770		10,415		3
Income from continuing operations before income taxes	1,921		2,492		1,662		1,308		1,585		(23)		21		6,075		4,184		45
Income tax provision	420		575		319		2,170		448		(27)		(6)		1,314		1,205		9
Income (loss) from continuing operations, net of tax	$	1,501	$	1,917	$	1,343	$	(862)	$	1,137	(22)		32		$	4,761	$	2,979	60
Selected performance metrics:
Period-end loans held for investment	$	238,761	$	236,124	$	248,256	$	254,473	$	252,422	1		(5)		$	238,761	$	252,422	(5)
Average loans held for investment	236,766		240,758		249,726		252,566		245,822		(2)		(4)		242,369		243,205		—
Period-end deposits	247,195		248,225		250,847		243,702		239,062		—		3		247,195		239,062		3
Average deposits	246,720		248,790		245,270		241,562		238,843		(1)		3		246,932		239,316		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.
⁽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 4 basis points for both total credit card and domestic credit card for the first nine months of 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 $30 million and $86 million in revenue in our Commercial Banking business in the third quarter and first nine months of 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, which may be adjusted during the measurement period ending no later than 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)	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
Regulatory Capital Metrics
Common equity excluding AOCI	$	48,154		$	47,359		$	46,441		$	45,296		$	46,415
Adjustments:
AOCI⁽²⁾⁽³⁾	(1,877)			(1,793)			(1,599)			(808)			(538)
Goodwill, net of related deferred tax liabilities	(14,345)			(14,368)			(14,379)			(14,380)			(14,300)
Intangible assets, net of related deferred tax liabilities⁽³⁾	(284)			(328)			(371)			(330)			(372)
Other	817			735			620			258			93
Common equity Tier 1 capital	$	32,465		$	31,605		$	30,712		$	30,036		$	31,298
Tier 1 capital	$	36,826		$	35,965		$	35,073		$	34,396		$	35,657
Total capital⁽⁴⁾	43,946			43,082			42,259			41,962			43,272
Risk-weighted assets	288,678			285,223			291,346			292,225			292,041
Adjusted average assets⁽⁵⁾	346,297			349,222			347,287			348,424			340,579
Capital Ratios
Common equity Tier 1 capital⁽⁶⁾	11.2		%	11.1		%	10.5		%	10.3		%	10.7		%
Tier 1 capital⁽⁷⁾	12.8			12.6			12.0			11.8			12.2
Total capital⁽⁸⁾	15.2			15.1			14.5			14.4			14.8
Tier 1 leverage⁽⁵⁾	10.6			10.3			10.1			9.9			10.5
Tangible common equity ("TCE")⁽⁹⁾	9.0			8.8			8.6			8.3			8.8

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

	2018									2018									2018									Nine Months Ended
	Q3									Q2									Q1									September 30, 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			Reported Results			Adj.⁽¹⁰⁾			Adjusted Results
Selected income statement data:
Net interest income	$	5,786		—			$	5,786		$	5,551		$	26		$	5,577		$	5,718		—			$	5,718		$	17,055		$	26		$	17,081
Non-interest income	1,176			$	(155)		1,021			1,641			(361)			1,280			1,191			$	2		1,193			4,008			(514)			3,494
Total net revenue	6,962			(155)			6,807			7,192			(335)			6,857			6,909			2			6,911			21,063			(488)			20,575
Provision for credit losses	1,268			2			1,270			1,276			46			1,322			1,674			—			1,674			4,218			48			4,266
Non-interest expense	3,773			(186)			3,587			3,424			(45)			3,379			3,573			(17)			3,556			10,770			(248)			10,522
Income from continuing operations before income taxes	1,921			29			1,950			2,492			(336)			2,156			1,662			19			1,681			6,075			(288)			5,787
Income tax provision (benefit)	420			(33)			387			575			(92)			483			319			4			323			1,314			(121)			1,193
Income from continuing operations, net of tax	1,501			62			1,563			1,917			(244)			1,673			1,343			15			1,358			4,761			(167)			4,594
Income (loss) from discontinued operations, net of tax	1			—			1			(11)			—			(11)			3			—			3			(7)			—			(7)
Net income	1,502			62			1,564			1,906			(244)			1,662			1,346			15			1,361			4,754			(167)			4,587
Dividends and undistributed earnings allocated to participating securities⁽¹¹⁾	(9)			—			(9)			(12)			2			(10)			(10)			—			(10)			(32)			1			(31)
Preferred stock dividends	(53)			—			(53)			(80)			—			(80)			(52)			—			(52)			(185)			—			(185)
Net income available to common stockholders	$	1,440		$	62		$	1,502		$	1,814		$	(242)		$	1,572		$	1,284		$	15		$	1,299		$	4,537		$	(166)		$	4,371
Selected performance metrics:
Diluted EPS⁽¹¹⁾	$	2.99		$	0.13		$	3.12		$	3.71		$	(0.49)		$	3.22		$	2.62		$	0.03		$	2.65		$	9.32		$	(0.34)		$	8.98
Efficiency ratio	54.19		%	(149)		bps	52.70		%	47.61		%	167		bps	49.28		%	51.72		%	(27)		bps	51.45		%	51.13		%	1		bps	51.14		%
Operating efficiency ratio	46.95			(166)			45.29			41.70			138			43.08			45.72			(26)			45.46			44.76			(15)			44.61

	2017									2017									2017									Nine Months Ended
	Q3									Q2									Q1									September 30, 2017
(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			Reported Results			Adj.⁽¹⁰⁾			Adjusted Results
Selected income statement data:
Net interest income	$	5,700		—			$	5,700		$	5,473		—			$	5,473		$	5,474		$	33		$	5,507		$	16,647		$	33		$	16,680
Non-interest income	1,285			—			1,285			1,231			—			1,231			1,061			37			1,098			3,577			37			3,614
Total net revenue	6,985			—			6,985			6,704			—			6,704			6,535			70			6,605			20,224			70			20,294
Provision for credit losses	1,833			$	(88)		1,745			1,800			—			1,800			1,992			—			1,992			5,625			(88)			5,537
Non-interest expense	3,567			(125)			3,442			3,414			$	(12)		3,402			3,434			(29)			3,405			10,415			(166)			10,249
Income from continuing operations before income taxes	1,585			213			1,798			1,490			12			1,502			1,109			99			1,208			4,184			324			4,508
Income tax provision (benefit)	448			79			527			443			4			447			314			(1)			313			1,205			82			1,287
Income from continuing operations, net of tax	1,137			134			1,271			1,047			8			1,055			795			100			895			2,979			242			3,221
Income (loss) from discontinued operations, net of tax	(30)			—			(30)			(11)			—			(11)			15			—			15			(26)			—			(26)
Net income	1,107			134			1,241			1,036			8			1,044			810			100			910			2,953			242			3,195
Dividends and undistributed earnings allocated to participating securities⁽¹¹⁾	(8)			—			(8)			(8)			—			(8)			(5)			—			(5)			(21)			—			(21)
Preferred stock dividends	(52)			—			(52)			(80)			—			(80)			(53)			—			(53)			(185)			—			(185)
Net income available to common stockholders	$	1,047		$	134		$	1,181		$	948		$	8		$	956		$	752		$	100		$	852		$	2,747		$	242		$	2,989
Selected performance metrics:
Diluted EPS⁽¹¹⁾	$	2.14		$	0.28		$	2.42		$	1.94		$	0.02		$	1.96		$	1.54		$	0.21		$	1.75		$	5.63		$	0.49		$	6.12
Efficiency ratio	51.07		%	(179)		bps	49.28		%	50.92		%	(17)		bps	50.75		%	52.55		%	(100)		bps	51.55		%	51.50		%	(100)		bps	50.50		%
Operating efficiency ratio	45.64			(179)			43.85			44.44			(18)			44.26			46.49			(93)			45.56			45.52			(98)			44.54

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 these non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, our measures 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		2017		2017
(Dollars in millions)							Q3		Q2		Q1		Q4		Q3
Tangible Common Equity (Period-End)
Stockholders' equity							$	50,638	$	49,926	$	49,203	$	48,730	$	50,154
Goodwill and intangible assets⁽¹²⁾							(14,945)		(15,013)		(15,063)		(15,106)		(15,249)
Noncumulative perpetual preferred stock							(4,360)		(4,360)		(4,360)		(4,360)		(4,360)
Tangible common equity							$	31,333	$	30,553	$	29,780	$	29,264	$	30,545
Tangible Common Equity (Average)
Stockholders' equity							$	50,768	$	49,827	$	49,031	$	50,710	$	50,176
Goodwill and intangible assets⁽¹²⁾							(14,982)		(15,043)		(15,092)		(15,223)		(15,277)
Noncumulative perpetual preferred stock							(4,360)		(4,360)		(4,360)		(4,360)		(4,360)
Tangible common equity							$	31,426	$	30,424	$	29,579	$	31,127	$	30,539
Tangible Assets (Period-End)
Total assets							$	362,909	$	363,989	$	362,857	$	365,693	$	361,402
Goodwill and intangible assets⁽¹²⁾							(14,945)		(15,013)		(15,063)		(15,106)		(15,249)
Tangible assets							$	347,964	$	348,976	$	347,794	$	350,587	$	346,153
Tangible Assets (Average)
Total assets							$	360,937	$	363,929	$	362,049	$	363,045	$	355,191
Goodwill and intangible assets⁽¹²⁾							(14,982)		(15,043)		(15,092)		(15,223)		(15,277)
Tangible assets							$	345,955	$	348,886	$	346,957	$	347,822	$	339,914

__________
⁽¹⁾Regulatory capital metrics and capital ratios as of September 30, 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⁾Adjustments for the following periods consist of:

	2018		2018		2018		Nine Months Ended		2017		2017		2017		Nine Months Ended
(Dollars in millions)	Q3		Q2		Q1		September 30, 2018		Q3		Q2		Q1		September 30, 2017
Net gains on the sales of exited businesses	$	(141)	$	(400)	—		$	(541)	—		—		—		—
Legal reserve build	170		—		—		170		—		—		—		—
Restructuring charges	—		15		$	19	34		$	108	—		—		$	108
U.K. Payment Protection Insurance customer refund reserve ("U.K. PPI Reserve")	—		49		—		49		—		—		$	99	99
Charges related to the Cabela's acquisition	—		—		—		—		105		$	12	—		117
Total	29		(336)		19		(288)		213		12		99		324
Income tax provision (benefit)	(33)		(92)		4		(121)		79		4		(1)		82
Net income	$	62	$	(244)	$	15	$	(167)	$	134	$	8	$	100	$	242

⁽¹¹⁾ Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total.
⁽¹²⁾ Includes impact of related deferred taxes.