PR Newswire | Jul 22, 2021 04:06PM EDT

per share

07/22 15:05 CDT

Capital One Reports Second Quarter 2021 Net Income of $3.5 billion, or $7.62 per shareExcluding adjusting items, Second Quarter 2021 Net Income of $7.71 per share(1) MCLEAN, Va., July 22, 2021

MCLEAN, Va., July 22, 2021 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the second quarter of 2021 of $3.5 billion, or $7.62 per diluted common share, compared with net income of $3.3 billion, or $7.03 per diluted common share in the first quarter of 2021, and with a net loss of $918 million, or $2.21 per diluted common share in the second quarter of 2020. Excluding adjusting items, net income for the second quarter of 2021 was $7.71 per diluted common share.(1)

"We are seeing increasing near-term opportunities to build our franchise as we emerge from the pandemic," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "Our modern technology is powering our current performance and setting us up to capitalize on the accelerating digital revolution in banking."

The quarter included the following adjusting item:

Pre-TaxDiluted EPS(Dollars in millions, except per share data) Impact Impact

Legal reserve build $55 $0.09



All comparisons below are for the second quarter of 2021 compared with the first quarter of 2021 unless otherwise noted.

Second Quarter 2021 Income Statement Summary:

* Total net revenue increased 4 percent to $7.4 billion. * Total non-interest expense increased 6 percent to $4.0 billion: * 24 percent increase in marketing. * 3 percent increase in operating expenses.

* Pre-provision earnings increased 1 percent to $3.4 billion.(2) * Provision (benefit) for credit losses decreased $337 million to $(1.2) billion: * Net charge-offs of $541 million. * $1.7 billion loan reserve release.

* Net interest margin of 5.89 percent, a decrease of 10 basis points. * Efficiency ratio of 53.78 percent. * Efficiency ratio excluding adjusting items of 53.04 percent.(1)

* Operating efficiency ratio of 45.38 percent. * Operating efficiency ratio excluding adjusting items of 44.63 percent.(1)

Second Quarter 2021 Balance Sheet Summary:

* Common equity Tier 1 capital ratio under Basel III Standardized Approach of 14.5 percent at June 30, 2021. * Period-end loans held for investment in the quarter increased $6.5 billion, or 3 percent, to $249.6 billion. * Credit Card period-end loans increased $1.9 billion, or 2 percent, to $101.0 billion. * Domestic Card period-end loans increased $4.2 billion, or 5 percent, to $95.3 billion.

* Consumer Banking period-end loans increased $4.6 billion, or 6 percent, to $74.8 billion. * Auto period-end loans increased $4.7 billion, or 7 percent, to $71.7 billion.

* Commercial Banking period-end loans increased $19 million, or less than 1 percent, to $73.8 billion.

* Average loans held for investment in the quarter increased $2.5 billion, or 1 percent, to $246.5 billion. * Credit Card average loans decreased $860 million, or 1 percent, to $99.7 billion. * Domestic Card average loans decreased $1.1 billion, or 1 percent, to $91.5 billion.

* Consumer Banking average loans increased $3.5 billion, or 5 percent, to $72.7 billion. * Auto average loans increased $3.4 billion, or 5 percent, to $69.5 billion.

* Commercial Banking average loans decreased $85 million, or less than 1 percent, to $74.1 billion.

* Period-end total deposits decreased $4.0 billion, or 1 percent, to $306.3 billion, while average deposits increased $3.2 billion, or 1 percent, to $308.2 billion. * Interest-bearing deposits rate paid decreased 4 basis points to 0.35 percent.

Amounts excluding adjusting items are non-GAAP measures that we believe help investors and users of our financial information understand the effect(1) of adjusting items on our selected reported results and provide alternate measurements of our performance, both in the current period and across periods. See Table 15 in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.

Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period.(2) Management believes that this financial metric is useful in enabling investors and others to assess the Company's ability to generate income to cover credit losses through a credit cycle, which can vary significantly between periods.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 22, 2021 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). Under "About," 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 August 5, 2021 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, 2020.

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 $306.3 billion in deposits and $423.4 billion in total assets as of June 30, 2021. 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.

Exhibit 99.2



Capital One Financial Corporation Financial Supplement^(1)(2) Second Quarter 2021 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 7

Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial 10 Statements (Tables 1-4)

Table 6: Average Balances, Net Interest Income and Net Interest Margin 11

Table 7: Loan Information and Performance Statistics 12

Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments 14 Activity

Business Segment Results

Table 9: Financial Summary-Business Segment Results 15

Table 10:Financial & Statistical Summary-Credit Card Business 16

Table 11:Financial & Statistical Summary-Consumer Banking Business 18

Table 12:Financial & Statistical Summary-Commercial Banking Business 19

Table 13:Financial & Statistical Summary-Other and Total 20

Other

Table 14:Notes to Loan, Allowance and Business Segment Disclosures (Tables 7-13) 21

Table 15:Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP 22 Measures

__________

The information contained in this Financial Supplement is preliminary and^ based on data available at the time of the earnings presentation. Investors(1) should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2021 once it is filed with the Securities and Exchange Commission.

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.(2) 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



2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.(Dollars in millions, except per share data and as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Income Statement

Net interest income $5,743 $5,822 $5,873 $5,555 $5,460 (1) %5 %$11,565 $11,485 1 %

Non-interest income 1,631 1,291 1,464 1,826 1,096 26 49 2,922 2,320 26

Total net revenue^(1) 7,374 7,113 7,337 7,381 6,556 4 12 14,487 13,805 5

Provision (benefit) for credit losses (1,160) (823) 264 331 4,246 41 ** (1,983) 9,669 **

Non-interest expense:

Marketing 620 501 563 283 273 24 127 1,121 764 47

Operating expense 3,346 3,239 3,446 3,265 3,497 3 (4) 6,585 6,735 (2)

Total non-interest expense 3,966 3,740 4,009 3,548 3,770 6 5 7,706 7,499 3

Income (loss) from continuing operations before income taxes 4,568 4,196 3,064 3,502 (1,460) 9 ** 8,764 (3,363) **

Income tax provision (benefit) 1,031 869 496 1,096 (543) 19 ** 1,900 (1,106) **

Income (loss) from continuing operations, net of tax 3,537 3,327 2,568 2,406 (917) 6 ** 6,864 (2,257) **

Loss from discontinued operations, net of tax (1) (2) (2) - (1) (50) - (3) (1) **

Net income (loss) 3,536 3,325 2,566 2,406 (918) 6 ** 6,861 (2,258) **

Dividends and undistributed earnings allocated to participating (30) (28) (19) (20) (1) 7 ** (58) (4) ** securities^(2)

Preferred stock dividends (60) (61) (68) (67) (90) (2) (33) (121) (145) (17)

Issuance cost for redeemed preferred stock^(3) - - (17) - - - - - (22) **

Net income (loss) available to common stockholders $3,446 $3,236 $2,462 $2,319 $(1,009)6 ** $6,682 $(2,429)**

Common Share Statistics

Basic earnings per common share:^(2)

Net income (loss) from continuing operations $7.65 $7.06 $5.36 $5.07 $(2.21) 8 %** $14.70 $(5.31) **

Net income (loss) per basic common share $7.65 $7.06 $5.36 $5.07 $(2.21) 8 ** $14.70 $(5.31) **

Diluted earnings per common share:^(2)

Net income (loss) from continuing operations $7.62 $7.03 $5.35 $5.06 $(2.21) 8 ** $14.65 $(5.31) **

Net income (loss) per diluted common share $7.62 $7.03 $5.35 $5.06 $(2.21) 8 ** $14.65 $(5.31) **

Weighted-average common shares outstanding (in millions):

Basic 450.6 458.6 459.1 457.8 456.7 (2) (1) %454.6 457.1 (1) %

Diluted 452.3 460.1 460.2 458.5 456.7 (2) (1) 456.2 457.1 -

Common shares outstanding (period-end, in millions) 446.1 456.8 459.0 457.4 456.3 (2) (2) 446.1 456.3 (2)

Dividends declared and paid per common share $0.40 $0.40 $0.10 $0.10 $0.40 - - $0.80 $0.80 -

Tangible book value per common share (period-end)^(4) 97.20 90.96 88.34 83.67 78.82 7 23 97.20 78.82 23



2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Balance Sheet (Period-End)

Loans held for investment $249,597$243,131$251,624$248,223$251,5123 %(1) %$249,597$251,512(1) %

Interest-earning assets 387,295 392,485 388,917 390,040 389,829 (1) (1) 387,295 389,829 (1)

Total assets 423,420 425,175 421,602 421,883 421,296 - 1 423,420 421,296 1

Interest-bearing deposits 271,314 276,325 274,300 276,092 275,183 (2) (1) 271,314 275,183 (1)

Total deposits 306,308 310,328 305,442 305,725 304,238 (1) 1 306,308 304,238 1

Borrowings 36,343 38,450 40,539 42,795 44,900 (5) (19) 36,343 44,900 (19)

Common equity 58,136 56,341 55,356 53,093 50,835 3 14 58,136 50,835 14

Total stockholders' equity 64,624 61,188 60,204 58,424 56,045 6 15 64,624 56,045 15

Balance Sheet (Average Balances)

Loans held for investment $246,463$243,937$247,689$249,511$253,3581 %(3) %$245,207$258,124(5) %

Interest-earning assets 390,129 388,572 388,252 391,451 378,145 - 3 389,355 366,746 6

Total assets 424,099 421,808 420,011 422,854 411,075 1 3 422,959 400,845 6

Interest-bearing deposits 273,476 273,358 274,142 276,339 261,256 - 5 273,417 251,185 9

Total deposits 308,217 305,056 304,513 305,516 288,344 1 7 306,645 276,498 11

Borrowings 37,054 39,911 40,662 44,161 49,827 (7) (26) 38,475 50,810 (24)

Common equity 56,885 55,775 54,220 51,995 52,413 2 9 56,333 52,799 7

Total stockholders' equity 62,376 60,623 59,389 57,223 57,623 3 8 61,504 58,096 6

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

2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs. (Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Performance Metrics

Net interest income growth (period over period) (1) %(1) %6 %2 %(9) %** ** 1 %- **

Non-interest income growth (period over period) 26 (12) (20) 67 (10) ** ** 26 (13) %**

Total net revenue growth (period over period) 4 (3) (1) 13 (10) ** ** 5 (3) **

Total net revenue margin^(5) 7.56 7.32 7.56 7.54 6.93 24 bps63 bps7.44 7.53 (9) bps

Net interest margin^(6) 5.89 5.99 6.05 5.68 5.78 (10) 11 5.94 6.26 (32)

Return on average assets 3.34 3.16 2.45 2.28 (0.89) 18 4 % 3.25 (1.13) 4 %

Return on average tangible assets^(7) 3.46 3.27 2.54 2.36 (0.93) 19 4 3.36 (1.17) 5

Return on average common equity^(8) 24.24 23.22 18.18 17.84 (7.69) 102 32 23.73 (9.20) 33

Return on average tangible common equity^(9) 32.75 31.61 25.02 24.98 (10.74) 114 43 32.19 (12.81) 45

Non-interest expense as a percentage of average loans held for investment6.44 6.13 6.47 5.69 5.95 31 49 bps6.29 5.81 48 bps

Efficiency ratio^(10) 53.78 52.58 54.64 48.07 57.50 120 (4) % 53.19 54.32 (113)

Operating efficiency ratio^(11) 45.38 45.54 46.97 44.24 53.34 (16) (8) 45.45 48.79 (334)

Effective income tax rate for continuing operations 22.6 20.7 16.2 31.3 37.2 190 (15) 21.7 32.9 (11) %

Employees (period-end, in thousands) 52.0 51.7 52.0 52.5 53.1 1 % (2) 52.0 53.1 (2)

Credit Quality Metrics

Allowance for credit losses $12,346 $14,017 $15,564 $16,129 $16,832 (12)% (27) % $12,346 $16,832 (27) %

Allowance coverage ratio 4.95 %5.77 %6.19 %6.50 %6.69 %(82)bps(174)bps4.95 %6.69 %(174)bps

Net charge-offs $541 $740 $856 $1,073 $1,505 (27)% (64) % $1,281 $3,296 (61) %

Net charge-off rate^(12) 0.88 %1.21 %1.38 %1.72 %2.38 %(33)bps(150)bps1.04 %2.55 %(151)bps

30+ day performing delinquency rate^(13) 1.75 1.82 2.41 1.97 2.09 (7) (34) 1.75 2.09 (34)

30+ day delinquency rate^(13) 1.89 1.98 2.61 2.22 2.30 (9) (41) 1.89 2.30 (41)

Capital Ratios^(14)

Common equity Tier 1 capital 14.5 %14.6 %13.7 %13.0 %12.4 %(10)bps210 bps14.5 %12.4 %210 bps

Tier 1 capital 16.6 16.2 15.3 14.8 14.2 40 240 16.6 14.2 240

Total capital 18.8 18.6 17.7 17.3 16.7 20 210 18.8 16.7 210

Tier 1 leverage 12.4 11.7 11.2 10.6 10.3 70 210 12.4 10.3 210

Tangible common equity ("TCE")^(15) 10.6 10.1 10.0 9.4 8.8 50 180 10.6 8.8 180

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

2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.

(Dollars in millions, except per share data and as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Interest income:

Loans, including loans held for sale $5,753$5,854$5,954$5,758$5,820 (2) %(1) %$11,607$12,362 (6) %

Investment securities 370 391 422 443 482 (5) (23) 761 1,012 (25)

Other 16 16 15 14 16 - - 32 53 (40)

Total interest income 6,139 6,261 6,391 6,215 6,318 (2) (3) 12,400 13,427 (8)

Interest expense:

Deposits 237 269 347 476 611 (12) (61) 506 1,342 (62)

Securitized debt obligations 28 32 34 43 56 (13) (50) 60 155 (61)

Senior and subordinated notes 122 129 128 132 180 (5) (32) 251 419 (40)

Other borrowings 9 9 9 9 11 - (18) 18 26 (31)

Total interest expense 396 439 518 660 858 (10) (54) 835 1,942 (57)

Net interest income 5,743 5,822 5,873 5,555 5,460 (1) 5 11,565 11,485 1

Provision (benefit) for credit losses (1,160)(823) 264 331 4,246 41 ** (1,983) 9,669 **

Net interest income after provision for credit losses 6,903 6,645 5,609 5,224 1,214 4 ** 13,548 1,816 **

Non-interest income:

Interchange fees, net 1,016 817 818 775 672 24 51 1,833 1,424 29

Service charges and other customer-related fees 384 352 338 320 258 9 49 736 585 26

Net securities gains - 4 - 25 - ** - 4 - **

Other 231 118 308 706 166 96 39 349 311 12

Total non-interest income 1,631 1,291 1,464 1,826 1,096 26 49 2,922 2,320 26

Non-interest expense:

Salaries and associate benefits 1,781 1,847 1,755 1,719 1,704 (4) 5 3,628 3,331 9

Occupancy and equipment 523 472 572 506 523 11 - 995 1,040 (4)

Marketing 620 501 563 283 273 24 127 1,121 764 47

Professional services 341 292 394 327 304 17 12 633 591 7

Communications and data processing 315 302 295 310 308 4 2 617 610 1

Amortization of intangibles 5 6 8 14 16 (17) (69) 11 38 (71)

Other 381 320 422 389 642 19 (41) 701 1,125 (38)

Total non-interest expense 3,966 3,740 4,009 3,548 3,770 6 5 7,706 7,499 3

Income (loss) from continuing operations before income taxes 4,568 4,196 3,064 3,502 (1,460) 9 ** 8,764 (3,363) **

Income tax provision (benefit) 1,031 869 496 1,096 (543) 19 ** 1,900 (1,106) **

Income (loss) from continuing operations, net of tax 3,537 3,327 2,568 2,406 (917) 6 ** 6,864 (2,257) **

Loss from discontinued operations, net of tax (1) (2) (2) - (1) (50) - (3) (1) **

Net income (loss) 3,536 3,325 2,566 2,406 (918) 6 ** 6,861 (2,258) **

Dividends and undistributed earnings allocated to participating (30) (28) (19) (20) (1) 7 ** (58) (4) ** securities^(2)

Preferred stock dividends (60) (61) (68) (67) (90) (2) (33) (121) (145) (17)

Issuance cost for redeemed preferred stock^(3) - - (17) - - - - - (22) **

Net income (loss) available to common stockholders $3,446$3,236$2,462$2,319$(1,009)6 ** $6,682 $(2,429)**



2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.

(Dollars in millions, except per share data and as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Basic earnings per common share:^(2)

Net income (loss) from continuing operations $7.65 $7.06 $5.36 $5.07 $(2.21) 8 %** $14.70 $(5.31) **

Net income (loss) per basic common share $7.65 $7.06 $5.36 $5.07 $(2.21) 8 ** $14.70 $(5.31) **

Diluted earnings per common share:^(2)

Net income (loss) from continuing operations $7.62 $7.03 $5.35 $5.06 $(2.21) 8 ** $14.65 $(5.31) **

Net income (loss) per diluted common share $7.62 $7.03 $5.35 $5.06 $(2.21) 8 ** $14.65 $(5.31) **

Weighted-average common shares outstanding (in millions):

Basic common shares 450.6 458.6 459.1 457.8 456.7 (2) (1) %454.6 457.1 (1) %

Diluted common shares 452.3 460.1 460.2 458.5 456.7 (2) (1) 456.2 457.1 -

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

2021 Q2 vs.

2021 2021 2020 2020 2020 2021 2020

(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2

Assets:

Cash and cash equivalents:

Cash and due from banks $5,312 $4,670 $4,708 $4,267 $4,583 14 %16 %

Interest-bearing deposits and other short-term investments 29,534 45,825 35,801 39,839 51,235 (36) (42)

Total cash and cash equivalents 34,846 50,495 40,509 44,106 55,818 (31) (38)

Restricted cash for securitization investors 242 1,779 262 895 740 (86) (67)

Securities available for sale 101,766 99,165 100,445 99,853 87,859 3 16

Loans held for investment:

Unsecuritized loans held for investment 226,130 219,182 225,698 217,878 222,310 3 2

Loans held in consolidated trusts 23,467 23,949 25,926 30,345 29,202 (2) (20)

Total loans held for investment 249,597 243,131 251,624 248,223 251,512 3 (1)

Allowance for credit losses (12,346) (14,017) (15,564) (16,129) (16,832) (12) (27)

Net loans held for investment 237,251 229,114 236,060 232,094 234,680 4 1

Loans held for sale 6,522 2,896 2,710 3,433 711 125 **

Premises and equipment, net 4,227 4,277 4,287 4,333 4,324 (1) (2)

Interest receivable 1,372 1,380 1,471 1,551 1,574 (1) (13)

Goodwill 14,654 14,654 14,653 14,648 14,645 - -

Other assets 22,540 21,415 21,205 20,970 20,945 5 8

Total assets $423,420$425,175$421,602$421,883$421,296- 1



2021 Q2 vs.

2021 2021 2020 2020 2020 2021 2020

(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2

Liabilities:

Interest payable $301 $288 $352 $332 $380 5 %(21)%

Deposits:

Non-interest-bearing deposits 34,994 34,003 31,142 29,633 29,055 3 20

Interest-bearing deposits 271,314 276,325 274,300 276,092 275,183 (2) (1)

Total deposits 306,308 310,328 305,442 305,725 304,238 (1) 1

Securitized debt obligations 10,561 12,071 12,414 13,566 15,761 (13) (33)

Other debt:

Federal funds purchased and securities loaned or sold under 845 842 668 702 573 - 47 agreements to repurchase

Senior and subordinated notes 24,878 25,467 27,382 28,448 28,481 (2) (13)

Other borrowings 59 70 75 79 85 (16) (31)

Total other debt 25,782 26,379 28,125 29,229 29,139 (2) (12)

Other liabilities 15,844 14,921 15,065 14,607 15,733 6 1

Total liabilities 358,796 363,987 361,398 363,459 365,251 (1) (2)



Stockholders' equity:

Preferred stock 0 0 0 0 0 - -

Common stock 7 7 7 7 7 - -

Additional paid-in capital, net 35,472 33,671 33,480 33,793 33,556 5 6

Retained earnings 46,461 43,167 40,088 37,653 35,361 8 31

Accumulated other comprehensive income 1,792 1,783 3,494 3,833 3,981 1 (55)

Treasury stock, at cost (19,108) (17,440) (16,865) (16,862) (16,860) 10 13

Total stockholders' equity 64,624 61,188 60,204 58,424 56,045 6 15

Total liabilities and stockholders' equity $423,420$425,175$421,602$421,883$421,296- 1

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 5: Notes to Financial Summary, Selected Metrics and ConsolidatedFinancial Statements (Tables 1-4)

Total net revenue was reduced by $175 million in Q2 2021, $180 million in^(1) Q1 2021, $177 million in Q4 2020, $235 million in Q3 2020 and $318 million in Q2 2020 for credit card finance charges and fees charged-off as uncollectible.

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^(2) 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.

On December 1, 2020, we redeemed all outstanding shares of our fixed rate 6.20% non-cumulative perpetual preferred stock Series F, which reduced our^(3) net income available to common shareholders by $17 million in Q4 2020. On March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B, which increased our net loss available to common shareholders by $22 million in Q1 2020.

Tangible book value per common share is a non-GAAP measure calculated^(4) 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.

Total net revenue margin is calculated based on annualized total net^(5) revenue for the period divided by average interest-earning assets for the period.

^(6) Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.

Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for^(7) 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.

Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income^(8) (loss) from discontinued operations, net of tax, 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.

Return on average tangible common equity ("ROTCE") is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations,^(9) net of tax, for the period, divided by average tangible common equity ("TCE"). Our calculation of return on average TCE 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.

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(10) 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.

Operating efficiency ratio is calculated based on operating expense for^ the period divided by total net revenue for the period. We also provide an(11) 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.

^ Net charge-off rate is calculated based on annualized net charge-offs for(12) the period divided by average loans held for investment for the period.

^ Metrics include the impact of COVID-19 customer assistance programs where(13) applicable.

Capital ratios as of the end of Q2 2021 are preliminary and therefore^ subject to change. See "Table 15: Calculation of Regulatory Capital(14) Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.

TCE ratio is a non-GAAP measure calculated based on TCE divided by^ tangible assets. See "Table 15: Calculation of Regulatory Capital Measures(15) 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



2021 Q2 2021 Q1 2020 Q2

Interest Average Interest Average Interest (Dollars in millions, except as noted)Average BalanceIncome/ Yield/RateBalance Income/ Yield/RateBalance Income/ Yield/Rate Expense Expense Expense

Interest-earning assets:

Loans, including loans held for sale $249,280 $5,7539.23 % $246,675$5,854 9.49 % $254,402$5,820 9.15 %

Investment securities 100,071 370 1.48 98,296 391 1.59 81,095 482 2.38

Cash equivalents and other 40,778 16 0.16 43,601 16 0.15 42,648 16 0.15

Total interest-earning assets $390,129 $6,1396.29 $388,572$6,261 6.45 $378,145$6,318 6.68

Interest-bearing liabilities:

Interest-bearing deposits $273,476 $237 0.35 $273,358$269 0.39 $261,256$611 0.94

Securitized debt obligations 10,890 28 1.03 12,240 32 1.05 16,432 56 1.37

Senior and subordinated notes 25,487 122 1.92 26,968 129 1.91 31,294 180 2.30

Other borrowings and liabilities 2,198 9 1.67 2,210 9 1.62 3,554 11 1.21

Total interest-bearing liabilities $312,051 $396 0.50 $314,776$439 0.56 $312,536$858 1.10

Net interest income/spread $5,7435.79 $5,822 5.89 $5,460 5.58

Impact of non-interest-bearing funding 0.10 0.10 0.20

Net interest margin 5.89 % 5.99 % 5.78 %



Six Months Ended June 30,

2021 2020

Average Interest Average Interest Balance Income/ Yield/RateBalance Income/ Yield/Rate(Dollars in millions, except as noted) Expense Expense

Interest-earning assets:

Loans, including loans held for sale $247,984$11,6079.36 % $259,017$12,3629.55 %

Investment securities 99,189 761 1.53 79,654 1,012 2.54

Cash equivalents and other 42,182 32 0.15 28,075 53 0.38

Total interest-earning assets $389,355$12,4006.37 $366,746$13,4277.32

Interest-bearing liabilities:

Interest-bearing deposits $273,417$506 0.37 $251,185$1,342 1.07

Securitized debt obligations 11,561 60 1.04 17,243 155 1.80

Senior and subordinated notes 26,223 251 1.92 31,318 419 2.67

Other borrowings and liabilities 2,205 18 1.65 3,667 26 1.42

Total interest-bearing liabilities $313,406$835 0.53 $303,413$1,942 1.28

Net interest income/spread $11,5655.84 $11,4856.04

Impact of non-interest-bearing funding 0.10 0.22

Net interest margin 5.94 % 6.26 %

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

2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs. 2021 2020 2020 (Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2

Loans Held for Investment (Period-End)

Credit card:

Domestic credit card^(1) $95,309 $91,099 $98,504 $95,541 $99,390 5 % (4) % $95,309 $99,390 (4) %

International card businesses^(2) 5,708 8,028 8,452 8,100 7,920 (29) (28) 5,708 7,920 (28)

Total credit card 101,017 99,127 106,956 103,641 107,310 2 (6) 101,017 107,310 (6)

Consumer banking:

Auto 71,713 67,059 65,762 65,394 63,319 7 13 71,713 63,319 13

Retail banking 3,046 3,143 3,126 3,294 3,393 (3) (10) 3,046 3,393 (10)

Total consumer banking 74,759 70,202 68,888 68,688 66,712 6 12 74,759 66,712 12

Commercial banking:

Commercial and multifamily real estate^(3) 29,616 30,008 30,681 31,197 30,953 (1) (4) 29,616 30,953 (4)

Commercial and industrial 44,205 43,794 45,099 44,697 46,537 1 (5) 44,205 46,537 (5)

Total commercial banking 73,821 73,802 75,780 75,894 77,490 - (5) 73,821 77,490 (5)

Total loans held for investment 249,597 243,131 251,624 248,223 251,512 3 (1) 249,597 251,512 (1)

Loans Held for Investment (Average)

Credit card:

Domestic credit card $91,535 $92,594 $95,453 $97,306 $100,996 (1) % (9) % $92,062 $107,354 (14) %

International card businesses 8,139 7,940 8,108 8,061 7,752 3 5 8,040 8,408 (4)

Total credit card 99,674 100,534 103,561 105,367 108,748 (1) (8) 100,102 115,762 (14)

Consumer banking:

Auto 69,543 66,185 65,590 64,476 61,798 5 13 67,873 61,401 11

Retail banking 3,162 3,049 3,218 3,346 3,053 4 4 3,106 2,860 9

Total consumer banking 72,705 69,234 68,808 67,822 64,851 5 12 70,979 64,261 10

Commercial banking:

Commercial and multifamily real estate 30,124 29,856 30,825 30,918 31,723 1 (5) 29,991 31,402 (4)

Commercial and industrial 43,960 44,313 44,495 45,404 48,036 (1) (8) 44,135 46,699 (5)

Total commercial banking 74,084 74,169 75,320 76,322 79,759 - (7) 74,126 78,101 (5)

Total average loans held for investment $246,463 $243,937 $247,689 $249,511 $253,358 1 (3) $245,207 $258,124 (5)



2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs. 2021 2020 2020 Q2 Q1 Q4 Q3 Q2 Q1 Q2

Net Charge-Off (Recovery) Rates

Credit card:

Domestic credit card 2.28 % 2.54 % 2.69 % 3.64 % 4.53 %(26)bps(225)bps 2.41 % 4.61 %(220) bps

International card businesses 2.41 2.30 1.86 2.89 3.47 11 (106) 2.36 4.11 (175)

Total credit card 2.29 2.52 2.63 3.58 4.46 (23) (217) 2.41 4.57 (216)

Consumer banking:

Auto (0.12) 0.47 0.47 0.23 1.16 (59) (128) 0.17 1.33 (116)

Retail banking 1.41 1.68 1.88 1.38 1.78 (27) (37) 1.54 2.05 (51)

Total consumer banking (0.06) 0.52 0.53 0.28 1.19 (58) (125) 0.23 1.36 (113)

Commercial banking:

Commercial and multifamily real estate 0.04 0.06 0.02 0.41 0.09 (2) (5) 0.05 0.04 1

Commercial and industrial (0.21) 0.11 0.74 0.45 0.78 (32) (99) (0.05) 0.87 (92)

Total commercial banking (0.11) 0.09 0.45 0.43 0.51 (20) (62) (0.01) 0.54 (55)

Total net charge-offs 0.88 1.21 1.38 1.72 2.38 (33) (150) 1.04 2.55 (151)

30+ Day Performing Delinquency Rates^(4)

Credit card:

Domestic credit card 1.68 % 2.24 % 2.42 % 2.21 % 2.74 %(56)bps(106)bps 1.68 % 2.74 %(106) bps

International card businesses 2.89 2.51 2.61 2.15 2.71 38 18 2.89 2.71 18

Total credit card 1.75 2.26 2.44 2.20 2.74 (51) (99) 1.75 2.74 (99)

Consumer banking:

Auto 3.26 3.12 4.78 3.76 3.28 14 (2) 3.26 3.28 (2)

Retail banking 0.79 1.02 1.32 0.83 0.89 (23) (10) 0.79 0.89 (10)

Total consumer banking 3.16 3.03 4.62 3.62 3.16 13 - 3.16 3.16 -

Nonperforming Loans and Nonperforming Assets Rates^(5)(6)

Credit card:

International card businesses 0.20 % 0.17 % 0.24 % 0.25 % 0.29 %3 bps(9) bps 0.20 % 0.29 %(9) bps

Total credit card 0.01 0.01 0.02 0.02 0.02 - (1) 0.01 0.02 (1)

Consumer banking:

Auto 0.29 0.29 0.45 0.36 0.41 - (12) 0.29 0.41 (12)

Retail banking 1.75 1.16 0.96 0.77 0.70 59 105 1.75 0.70 105

Total consumer banking 0.35 0.33 0.47 0.38 0.43 2 (8) 0.35 0.43 (8)

Commercial banking:

Commercial and multifamily real estate 1.02 0.78 0.65 0.58 0.54 24 48 1.02 0.54 48

Commercial and industrial 1.03 1.02 1.00 1.31 1.06 1 (3) 1.03 1.06 (3)

Total commercial banking 1.03 0.92 0.86 1.01 0.85 11 18 1.03 0.85 18

Total nonperforming loans 0.41 0.38 0.40 0.42 0.38 3 3 0.41 0.38 3

Total nonperforming assets 0.43 0.40 0.41 0.44 0.39 3 4 0.43 0.39 4

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



Three Months Ended June 30, 2021

Credit Card Consumer Banking

Domestic InternationalTotal Credit Retail Total Commercial (Dollars in millions) Card Card Card Auto BankingConsumerBanking Total Businesses Banking

Allowance for credit losses:

Balance as of March 31, 2021 $9,572 $500 $10,072 $2,405$93 $2,498$ 1,447 $14,017

Charge-offs (874) (93) (967) (245) (15) (260) (8) (1,235)

Recoveries 352 44 396 267 4 271 27 694

Net recoveries (charge-offs) (522) (49) (571) 22 (11) 11 19 (541)

Provision (benefit) for credit losses (561) (74) (635) (305) (1) (306) (196) (1,137)

Allowance build (release) for credit losses (1,083) (123) (1,206) (283) (12) (295) (177) (1,678)

Other changes^(7) - 7 7 - - - - 7

Balance as of June 30, 2021 8,489 384 8,873 2,122 81 2,203 1,270 12,346

Reserve for unfunded lending commitments:

Balance as of March 31, 2021 - - - - - - 187 187

Provision (benefit) for losses on unfunded lending commitments- - - - - - (23) (23)

Balance as of June 30, 2021 - - - - - - 164 164

Combined allowance and reserve as of June 30, 2021 $8,489 $384 $8,873 $2,122$81 $2,203$ 1,434 $12,510



Six Months Ended June 30, 2021

Credit Card Consumer Banking

International Total (Dollars in millions) Domestic Card Total CreditAuto Retail CommercialTotal Card Businesses Card BankingConsumerBanking Banking

Allowance for credit losses:

Balance as of December 31, 2020 $10,650$541 $11,191 $2,615$100 $2,715$ 1,658 $15,564

Charge-offs (1,778) (182) (1,960) (569) (33) (602) (27) (2,589)

Recoveries 669 87 756 513 9 522 30 1,308

Net recoveries (charge-offs) (1,109) (95) (1,204) (56) (24) (80) 3 (1,281)

Provision (benefit) for credit losses (1,052) (75) (1,127) (437) 5 (432) (391) (1,950)

Allowance build (release) for credit losses (2,161) (170) (2,331) (493) (19) (512) (388) (3,231)

Other changes^(7) - 13 13 - - - - 13

Balance as of June 30, 2021 8,489 384 8,873 2,122 81 2,203 1,270 12,346

Reserve for unfunded lending commitments:

Balance as of December 31, 2020 - - - - - - 195 195

Provision (benefit) for losses on unfunded lending commitments- - - - - - (31) (31)

Balance as of June 30, 2021 - - - - - - 164 164

Combined allowance and reserve as of June 30, 2021 $8,489 $384 $8,873 $2,122$81 $2,203$ 1,434 $12,510

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



Three Months Ended June 30, 2021 Six Months Ended June 30, 2021

(Dollars in millions) Credit ConsumerCommercial Other^(8)Total Credit ConsumerCommercial Other^(8)Total Card Banking Banking^(8) Card Banking Banking^(8)

Net interest income (loss) $3,217$2,101$460 $(35) $5,743$6,589 $4,131$980 $(135) $11,565

Non-interest income (loss) 1,253 144 257 (23) 1,631 2,282 285 497 (142) 2,922

Total net revenue (loss) 4,470 2,245 717 (58) 7,374 8,871 4,416 1,477 (277) 14,487

Provision (benefit) for credit losses (635) (306) (219) - (1,160)(1,127) (432) (422) (2) (1,983)

Non-interest expense 2,263 1,123 417 163 3,966 4,398 2,240 836 232 7,706

Income (loss) from continuing operations before income taxes2,842 1,428 519 (221) 4,568 5,600 2,608 1,063 (507) 8,764

Income tax provision (benefit) 672 337 123 (101) 1,031 1,325 615 251 (291) 1,900

Income (loss) from continuing operations, net of tax $2,170$1,091$396 $(120) $3,537$4,275 $1,993$812 $(216) $6,864



Three Months Ended March 31, 2021

(Dollars in millions) Credit ConsumerCommercial Other^(8)Total Card Banking Banking^(8)

Net interest income (loss) $3,372$2,030$520 $(100) $5,822

Non-interest income (loss) 1,029 141 240 (119) 1,291

Total net revenue (loss) 4,401 2,171 760 (219) 7,113

Provision (benefit) for credit losses (492) (126) (203) (2) (823)

Non-interest expense 2,135 1,117 419 69 3,740

Income (loss) from continuing operations before income taxes2,758 1,180 544 (286) 4,196

Income tax provision (benefit) 653 278 128 (190) 869

Income (loss) from continuing operations, net of tax $2,105$902 $416 $(96) $3,327



Three Months Ended June 30, 2020 Six Months Ended June 30, 2020

(Dollars in millions) Credit ConsumerCommercial Other^(8)Total Credit ConsumerCommercial Other^(8)Total Card Banking Banking^(8) Card Banking Banking^(8)

Net interest income (loss) $3,369$1,665$518 $(92) $5,460$7,071 $3,322$1,009 $83 $11,485

Non-interest income (loss) 845 97 180 (26) 1,096 1,756 223 418 (77) 2,320

Total net revenue (loss) 4,214 1,762 698 (118) 6,556 8,827 3,545 1,427 6 13,805

Provision (benefit) for credit losses 2,944 876 427 (1) 4,246 6,646 1,736 1,283 4 9,669

Non-interest expense 1,969 1,036 425 340 3,770 4,177 2,027 837 458 7,499

Loss from continuing operations before income taxes (699) (150) (154) (457) (1,460)(1,996) (218) (693) (456) (3,363)

Income tax benefit (166) (36) (36) (305) (543) (472) (52) (164) (418) (1,106)

Loss from continuing operations, net of tax $(533)$(114)$(118) $(152) $(917)$(1,524)$(166)$(529) $(38) $(2,257)

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

2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.

(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Credit Card

Earnings:

Net interest income $3,217 $3,372 $3,413 $3,292 $3,369 (5) % (5) % $6,589 $7,071 (7) %

Non-interest income 1,253 1,029 1,054 1,013 845 22 48 2,282 1,756 30

Total net revenue 4,470 4,401 4,467 4,305 4,214 2 6 8,871 8,827 -

Provision (benefit) for credit losses (635) (492) 231 450 2,944 29 ** (1,127) 6,646 **

Non-interest expense 2,263 2,135 2,311 2,003 1,969 6 15 4,398 4,177 5

Income (loss) from continuing operations before income taxes2,842 2,758 1,925 1,852 (699) 3 ** 5,600 (1,996) **

Income tax provision (benefit) 672 653 454 438 (166) 3 ** 1,325 (472) **

Income (loss) from continuing operations, net of tax $2,170 $2,105 $1,471 $1,414 $(533) 3 ** $4,275 $(1,524) **

Selected performance metrics:

Period-end loans held for investment^(1)(2) $101,017 $99,127 $106,956 $103,641 $107,310 2 (6) $101,017 $107,310 (6)

Average loans held for investment 99,674 100,534 103,561 105,367 108,748 (1) (8) 100,102 115,762 (14)

Average yield on loans outstanding^(9) 14.04 %14.49 %14.24 %13.83 %13.72 %(45)bps32 bps14.26 %14.11 %15 bps

Total net revenue margin^(10) 17.59 17.17 16.92 16.34 15.50 42 209 17.38 15.25 213

Net charge-off rate 2.29 2.52 2.63 3.58 4.46 (23) (217) 2.41 4.57 (216)

30+ day performing delinquency rate 1.75 2.26 2.44 2.20 2.74 (51) (99) 1.75 2.74 (99)

30+ day delinquency rate 1.75 2.27 2.45 2.21 2.75 (52) (100) 1.75 2.75 (100)

Nonperforming loan rate^(5) 0.01 0.01 0.02 0.02 0.02 - (1) 0.01 0.02 (1)

Purchase volume^(11) $132,676 $108,333 $117,141 $107,102 $90,149 22 % 47 % $241,009 $190,069 27 %



2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.

(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Domestic Card

Earnings:

Net interest income $2,944 $3,095 $3,129 $2,995 $3,094 (5) % (5) % $6,039 $6,475 (7) %

Non-interest income 1,183 959 994 952 795 23 49 2,142 1,637 31

Total net revenue 4,127 4,054 4,123 3,947 3,889 2 6 8,181 8,112 1

Provision (benefit) for credit losses (561) (491) 231 378 2,906 14 ** (1,052) 6,370 **

Non-interest expense 2,034 1,923 2,063 1,802 1,776 6 15 3,957 3,760 5

Income (loss) from continuing operations before income taxes2,654 2,622 1,829 1,767 (793) 1 ** 5,276 (2,018) **

Income tax provision (benefit) 626 619 433 419 (188) 1 ** 1,245 (478) **

Income (loss) from continuing operations, net of tax $2,028 $2,003 $1,396 $1,348 $(605) 1 ** $4,031 $(1,540) **

Selected performance metrics:

Period-end loans held for investment^(1) $95,309 $91,099 $98,504 $95,541 $99,390 5 (4) $95,309 $99,390 (4)

Average loans held for investment 91,535 92,594 95,453 97,306 100,996 (1) (9) 92,062 107,354 (14)

Average yield on loans outstanding^(9) 13.91 %14.34 %14.07 %13.57 %13.52 %(43)bps39 bps14.13 %13.93 %20 bps

Total net revenue margin^(10) 17.66 17.15 16.91 16.22 15.40 51 226 17.40 15.11 229

Net charge-off rate 2.28 2.54 2.69 3.64 4.53 (26) (225) 2.41 4.61 (220)

30+ day performing delinquency rate 1.68 2.24 2.42 2.21 2.74 (56) (106) 1.68 2.74 (106)

Purchase volume^(11) $122,456 $99,960 $107,572 $98,107 $82,860 23 % 48 % $222,416 $175,108 27 %

Refreshed FICO scores:^(12)

Greater than 660 72 %70 %69 %69 %67 %2 5 72 %67 %5

660 or below 28 30 31 31 33 (2) (5) 28 33 (5)

Total 100 %100 %100 %100 %100 % 100 %100 %

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

2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.

(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Consumer Banking

Earnings:

Net interest income $2,101 $2,030 $2,012 $1,904 $1,665 3 % 26 % $4,131 $3,322 24 %

Non-interest income 144 141 136 107 97 2 48 285 223 28

Total net revenue 2,245 2,171 2,148 2,011 1,762 3 27 4,416 3,545 25

Provision (benefit) for credit losses (306) (126) 60 (43) 876 143 ** (432) 1,736 **

Non-interest expense 1,123 1,117 1,121 1,011 1,036 1 8 2,240 2,027 11

Income (loss) from continuing operations before income taxes1,428 1,180 967 1,043 (150) 21 ** 2,608 (218) **

Income tax provision (benefit) 337 278 230 247 (36) 21 ** 615 (52) **

Income (loss) from continuing operations, net of tax $1,091 $902 $737 $796 $(114) 21 ** $1,993 $(166) **

Selected performance metrics:

Period-end loans held for investment $74,759 $70,202 $68,888 $68,688 $66,712 6 12 $74,759 $66,712 12

Average loans held for investment 72,705 69,234 68,808 67,822 64,851 5 12 70,979 64,261 10

Average yield on loans held for investment^(9) 7.99 %8.16 %8.28 %8.36 %8.41 %(17)bps(42) bps8.07 %8.44 %(37) bps

Auto loan originations $12,959 $8,833 $7,371 $8,979 $8,292 47 % 56 % $21,792 $15,931 37 %

Period-end deposits 251,155 254,001 249,815 249,684 246,804 (1) 2 251,155 246,804 2

Average deposits 252,488 249,499 249,419 248,418 232,293 1 9 251,002 223,682 12

Average deposits interest rate 0.31 %0.36 %0.47 %0.66 %0.89 %(5) bps(58) bps0.33 %0.97 %(64) bps

Net charge-off (recovery) rate (0.06) 0.52 0.53 0.28 1.19 (58) (125) 0.23 1.36 (113)

30+ day performing delinquency rate 3.16 3.03 4.62 3.62 3.16 13 - 3.16 3.16 -

30+ day delinquency rate 3.40 3.25 5.00 3.90 3.48 15 (8) 3.40 3.48 (8)

Nonperforming loan rate^(5) 0.35 0.33 0.47 0.38 0.43 2 (8) 0.35 0.43 (8)

Nonperforming asset rate^(6) 0.40 0.39 0.54 0.43 0.46 1 (6) 0.40 0.46 (6)

Auto-At origination FICO scores:^(13)

Greater than 660 48 %47 %46 %46 %46 %1 % 2 % 48 %46 %2 %

621 - 660 20 20 20 20 20 - - 20 20 -

620 or below 32 33 34 34 34 (1) (2) 32 34 (2)

Total 100 %100 %100 %100 %100 % 100 %100 %



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

2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.

(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Commercial Banking

Earnings:

Net interest income $460 $520 $522 $517 $518 (12) % (11)% $ 980 $ 1,009 (3) %

Non-interest income 257 240 268 237 180 7 43 497 418 19

Total net revenue^(8) 717 760 790 754 698 (6) 3 1,477 1,427 4

Provision (benefit) for credit losses (219) (203) (28) (74) 427 8 ** (422) 1,283 **

Non-interest expense 417 419 445 424 425 - (2) 836 837 -

Income (loss) from continuing operations before income taxes519 544 373 404 (154) (5) ** 1,063 (693) **

Income tax provision (benefit) 123 128 88 95 (36) (4) ** 251 (164) **

Income (loss) from continuing operations, net of tax $396 $416 $285 $309 $(118) (5) ** $ 812 $ (529) **

Selected performance metrics:

Period-end loans held for investment^(3) $73,821 $73,802 $75,780 $75,894 $77,490 - (5) $ 73,821 $ 77,490 (5)

Average loans held for investment 74,084 74,169 75,320 76,322 79,759 - (7) 74,126 78,101 (5)

Average yield on loans held for investment^(8)(9) 2.72 %2.76 %2.83 %2.82 %3.00 %(4) bps(28)bps2.74 % 3.43 % (69) bps

Period-end deposits $42,973 $41,552 $39,590 $36,783 $35,669 3 % 20 % $ 42,973 $ 35,669 20 %

Average deposits 42,311 40,107 38,676 36,278 34,635 5 22 41,215 33,437 23

Average deposits interest rate 0.14 %0.18 %0.23 %0.25 %0.30 %(4) bps(16)bps0.16 % 0.58 % (42) bps

Net charge-off (recovery) rate (0.11) 0.09 0.45 0.43 0.51 (20) (62) (0.01) 0.54 (55)

Nonperforming loan rate^(5) 1.03 0.92 0.86 1.01 0.85 11 18 1.03 0.85 18

Nonperforming asset rate^(6) 1.03 0.92 0.86 1.01 0.85 11 18 1.03 0.85 18

Risk category:^(14)

Noncriticized $67,481 $66,299 $67,964 $68,533 $70,881 2 % (5) % $ 67,481 $ 70,881 (5) %

Criticized performing 5,581 6,821 7,166 6,593 5,949 (18) (6) 5,581 5,949 (6)

Criticized nonperforming 759 682 650 768 660 11 15 759 660 15

Total commercial banking loans $73,821 $73,802 $75,780 $75,894 $77,490 - (5) $ 73,821 $ 77,490 (5)

Risk category as a percentage of period-end loans held for investment:^(14)

Noncriticized 91.4 %89.9 %89.6 %90.3 %91.4 %150 bps- 91.4 % 91.4 % -

Criticized performing 7.6 9.2 9.5 8.7 7.7 (160) (10)bps7.6 7.7 (10) bps

Criticized nonperforming 1.0 0.9 0.9 1.0 0.9 10 10 1.0 0.9 10

Total commercial banking 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

2021 Q2 vs. Six Months Ended June 30,

2021 2021 2020 2020 2020 2021 2020 2021 vs.

(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2021 2020 2020

Other

Earnings:

Net interest income (loss) $(35) $(100) $(74) $(158) $(92) (65)%(62)%$(135) $83 **

Non-interest income (loss) (23) (119) 6 469 (26) (81) (12) (142) (77) 84 %

Total net revenue (loss)^(8) (58) (219) (68) 311 (118) (74) (51) (277) 6 **

Provision (benefit) for credit losses - (2) 1 (2) (1) ** ** (2) 4 **

Non-interest expense^(15) 163 69 132 110 340 136 (52) 232 458 (49)

Income (loss) from continuing operations before income taxes(221) (286) (201) 203 (457) (23) (52) (507) (456) 11

Income tax provision (benefit) (101) (190) (276) 316 (305) (47) (67) (291) (418) (30)

Income (loss) from continuing operations, net of tax $(120) $(96) $75 $(113) $(152) 25 (21) $(216) $(38) **

Selected performance metrics:

Period-end deposits $12,180 $14,775 $16,037 $19,258 $21,765 (18) (44) $12,180 $21,765 (44)

Average deposits 13,418 15,450 16,418 20,820 21,416 (13) (37) 14,428 19,379 (26)

Total

Earnings:

Net interest income $5,743 $5,822 $5,873 $5,555 $5,460 (1) %5 %$11,565 $11,485 1 %

Non-interest income 1,631 1,291 1,464 1,826 1,096 26 49 2,922 2,320 26

Total net revenue 7,374 7,113 7,337 7,381 6,556 4 12 14,487 13,805 5

Provision (benefit) for credit losses (1,160) (823) 264 331 4,246 41 ** (1,983) 9,669 **

Non-interest expense 3,966 3,740 4,009 3,548 3,770 6 5 7,706 7,499 3

Income (loss) from continuing operations before income taxes4,568 4,196 3,064 3,502 (1,460) 9 ** 8,764 (3,363) **

Income tax provision (benefit) 1,031 869 496 1,096 (543) 19 ** 1,900 (1,106) **

Income (loss) from continuing operations, net of tax $3,537 $3,327 $2,568 $2,406 $(917) 6 ** $6,864 $(2,257)**

Selected performance metrics:

Period-end loans held for investment $249,597$243,131$251,624$248,223$251,5123 (1) $249,597$251,512(1)

Average loans held for investment 246,463 243,937 247,689 249,511 253,358 1 (3) 245,207 258,124 (5)

Period-end deposits 306,308 310,328 305,442 305,725 304,238 (1) 1 306,308 304,238 1

Average deposits 308,217 305,056 304,513 305,516 288,344 1 7 306,645 276,498 11

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables7-13)

^(1) We reclassified $2.1 billion in partnership loans to held for sale as of September 30, 2020.

^(2) We reclassified $2.6 billion in international partnership loans to held for sale as of June 30, 2021.

^(3) We reclassified $1.5 billion in commercial loans to held for sale as of June 30, 2021.

^(4) Metrics include the impact of COVID-19 customer assistance programs where applicable.

Nonperforming loan rates are calculated based on nonperforming loans for^(5) each category divided by period-end total loans held for investment for each respective category.

Nonperforming assets consist of nonperforming loans, repossessed assets and other foreclosed assets. The total nonperforming asset rate is^(6) calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, repossessed assets and other foreclosed assets.

^(7) Represents foreign currency translation adjustments.

Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking^(8) revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.

Average yield is calculated based on annualized interest income for the^(9) period divided by average loans during the period. Annualized interest income does not include any allocations, such as funds transfer pricing.

^ Total net revenue margin is calculated based on total net revenue for the(10) period divided by average loans outstanding during the period.

^ Purchase volume consists of purchase transactions, net of returns, for the(11) period, and excludes cash advance and balance transfer transactions.

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(12) 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.

Percentages represent period-end loans held for investment in each credit^ score category. Auto credit scores generally represent average FICO scores(13) 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.

^ Criticized exposures correspond to the "Special Mention," "Substandard"(14) and "Doubtful" asset categories defined by bank regulatory authorities.

^ Includes charges incurred as a result of restructuring activities.(15)

** 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

June 30, March 31, December 31, September 30, June 30, (Dollars in millions, except as noted) 2021 2021 2020 2020 2020

Regulatory Capital Metrics

Common equity excluding AOCI $58,969 $57,607 $ 55,299 $ 52,839 $50,614

Adjustments:

AOCI, net of tax^(2) (5) (13) (29) (122) (145)

Goodwill, net of related deferred tax liabilities (14,440) (14,444) (14,448) (14,448) (14,449)

Intangible assets, net of related deferred tax liabilities(76) (81) (86) (95) (135)

Other (16) (18) - - -

Common equity Tier 1 capital $44,432 $43,051 $ 40,736 $ 38,174 $35,885

Tier 1 capital $50,920 $47,898 $ 45,583 $ 43,505 $41,094

Total capital^(3) 57,932 54,780 52,788 50,955 48,508

Risk-weighted assets 307,372 295,209 297,903 293,852 290,222

Adjusted average assets^(4) 411,032 408,596 406,762 409,602 398,062

Capital Ratios

Common equity Tier 1 capital^(5) 14.5 %14.6 %13.7 % 13.0 % 12.4 %

Tier 1 capital^(6) 16.6 16.2 15.3 14.8 14.2

Total capital^(7) 18.8 18.6 17.7 17.3 16.7

Tier 1 leverage^(4) 12.4 11.7 11.2 10.6 10.3

Tangible common equity ("TCE")^(8) 10.6 10.1 10.0 9.4 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. These adjusted results provide alternate measurements of our operating performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.



2021 2020 Six Months Ended June 30,

(Dollars in millions, except per share data and as noted) Q2 Q1 Q2 Q1 2021 2020

Adjusted diluted EPS:

Net income (loss) available to common stockholders (GAAP) $3,446 $3,236 $(1,009) $(1,420) $6,682 $(2,429)

Legal reserve activity, including insurance recoveries 55 - 265 45 55 310

Cybersecurity Incident expenses, net of insurance - - 11 4 - 15

Adjusted net income (loss) available to common stockholders before income tax 3,501 3,236 (733) (1,371) 6,737 (2,104) impacts (non-GAAP)

Income tax impacts (13) - (3) (12) (13) (15)

Adjusted net income (loss) available to common stockholders (non-GAAP) $3,488 $3,236 $(736) $(1,383) $6,724 $(2,119)



Diluted weighted-average common shares outstanding (in millions) (GAAP) 452.3 460.1 456.7 457.6 456.2 457.1



Diluted EPS (GAAP) $7.62 $7.03 $(2.21) $(3.10) $14.65 $(5.31)

Impact of adjustments noted above 0.09 - 0.60 0.08 0.09 0.67

Adjusted diluted EPS (non-GAAP) $7.71 $7.03 $(1.61) $(3.02) $14.74 $(4.64)



Adjusted efficiency ratio:

Non-interest expense (GAAP) $3,966 $3,740 $3,770 $3,729 $7,706 $7,499

Legal reserve activity, including insurance recoveries (55) - (265) (45) (55) (310)

Cybersecurity Incident expenses, net of insurance - - (11) (4) - (15)

Adjusted non-interest expense (non-GAAP) $3,911 $3,740 $3,494 $3,680 $7,651 $7,174



Total net revenue (GAAP) $7,374 $7,113 $6,556 $7,249 $14,487 $13,805



Efficiency ratio (GAAP) 53.78 % 52.58 % 57.50 % 51.44 % 53.19 % 54.32 %

Impact of adjustments noted above (74) bps- bps (421) bps(67) bps(38) bps(235) bps

Adjusted efficiency ratio (non-GAAP) 53.04 % 52.58 % 53.29 % 50.77 % 52.81 % 51.97 %



Adjusted operating efficiency ratio:

Operating expense (GAAP) $3,346 $3,239 $3,497 $3,238 $6,585 $6,735

Legal reserve activity, including insurance recoveries (55) - (265) (45) (55) (310)

Cybersecurity Incident expenses, net of insurance - - (11) (4) - (15)

Adjusted operating expense (non-GAAP) $3,291 $3,239 $3,221 $3,189 $6,530 $6,410



Total net revenue (GAAP) $7,374 $7,113 $6,556 $7,249 $14,487 $13,805



Operating efficiency ratio (GAAP) 45.38 % 45.54 % 53.34 % 44.67 % 45.45 % 48.79 %

Impact of adjustments noted above (75) bps- bps (421) bps(68) bps(38) bps(236) bps

Adjusted operating efficiency ratio (non-GAAP) 44.63 % 45.54 % 49.13 % 43.99 % 45.07 % 46.43 %

Reconciliation of Non-GAAP Measures



The following non-GAAP measures consist of TCE, tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. While our non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly-titled measures reported by other companies. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.



2021 2021 2020 2020 2020

(Dollars in millions) Q2 Q1 Q4 Q3 Q2

Tangible Common Equity (Period-End)

Stockholders' equity $64,624 $61,188 $60,204 $58,424 $56,045

Goodwill and intangible assets^(9) (14,774) (14,789) (14,809) (14,825) (14,869)

Noncumulative perpetual preferred stock(6,488) (4,847) (4,847) (5,330) (5,209)

Tangible common equity $43,362 $41,552 $40,548 $38,269 $35,967

Tangible Common Equity (Average)

Stockholders' equity $62,376 $60,623 $59,389 $57,223 $57,623

Goodwill and intangible assets^(9) (14,788) (14,807) (14,824) (14,867) (14,880)

Noncumulative perpetual preferred stock(5,491) (4,847) (5,168) (5,228) (5,209)

Tangible common equity $42,097 $40,969 $39,397 $37,128 $37,534

Tangible Assets (Period-End)

Total assets $423,420 $425,175 $421,602 $421,883$421,296

Goodwill and intangible assets^(9) (14,774) (14,789) (14,809) (14,825) (14,869)

Tangible assets $408,646 $410,386 $406,793 $407,058$406,427

Tangible Assets (Average)

Total assets $424,099 $421,808 $420,011 $422,854$411,075

Goodwill and intangible assets^(9) (14,788) (14,807) (14,824) (14,867) (14,880)

Tangible assets $409,311 $407,001 $405,187 $407,987$396,195

__________

^ Regulatory capital metrics and capital ratios as of June 30, 2021 are(1) preliminary and therefore subject to change.

^ Excludes certain components of AOCI as permitted under the Tailoring Rules.(2)

^ Total capital equals the sum of Tier 1 capital and Tier 2 capital.(3)

Adjusted average assets for the purpose of calculating our Tier 1 leverage^ ratio represents total average assets adjusted for amounts that are(4) 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.

^ Common equity Tier 1 capital ratio is a regulatory capital measure(5) calculated based on common equity Tier 1 capital divided by risk-weighted assets.

^ Tier 1 capital ratio is a regulatory capital measure calculated based on(6) Tier 1 capital divided by risk-weighted assets.

^ Total capital ratio is a regulatory capital measure calculated based on(7) total capital divided by risk-weighted assets.

^ TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible(8) assets.

^ Includes impact of related deferred taxes.(9)

View original content: https://www.prnewswire.com/news-releases/capital-one-reports-second-quarter-2021-net-income-of-3-5-billion-or-7-62-per-share-301339852.html

SOURCE Capital One Financial Corporation