PR Newswire | Jul 21, 2020 04:06PM EDT

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07/21 15:05 CDT

Capital One Reports Second Quarter 2020 Net Loss of $918 million, or $2.21 per shareExcluding adjusting items, Second Quarter 2020 Net Loss of $1.61 per share(1) MCLEAN, Va., July 21, 2020

MCLEAN, Va., July 21, 2020 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net loss for the second quarter of 2020 of $918 million, or $2.21 per diluted common share, compared with net loss of $1.3 billion, or $3.10 per diluted common share in the first quarter of 2020, and with net income of $1.6 billion, or $3.24 per diluted common share in the second quarter of 2019. Excluding adjusting items, net loss for the second quarter of 2020 was $1.61 per diluted common share(1).

"Our investments to transform our technology and how we work, and our efforts to drive the company to digital are powering our response to the pandemic," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "We remain well positioned to weather the downturn, emerge with strength, and deliver shareholder value over the long-term."

Adjusting items in the second quarter of 2020, which are excluded from diluted earnings per share (EPS), efficiency ratio and operating 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

Legal reserve builds $ 265 $ 0.58

Cybersecurity Incident expenses, net of insurance 11 0.02

All comparisons below are for the second quarter of 2020 compared with the first quarter of 2020 unless otherwise noted.

Second Quarter 2020 Income Statement Summary:

* Total net revenue decreased 10 percent to $6.6 billion. * Total non-interest expense increased 1 percent to $3.8 billion: * 44 percent decrease in marketing. * 8 percent increase in operating expenses.

* Pre-provision earnings decreased 21 percent to $2.8 billion(2). * Provision for credit losses decreased 22 percent to $4.2 billion: * Net charge-offs of $1.5 billion. * $2.7 billion reserve build.

* Net interest margin of 5.78 percent, decreased 100 basis points. * Efficiency ratio of 57.50 percent. * Efficiency ratio excluding adjusting items of 53.29 percent(1).

* Operating efficiency ratio of 53.34 percent. * Operating efficiency ratio excluding adjusting items of 49.13 percent(1).

Second Quarter 2020 Balance Sheet Summary:

* Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.4 percent at June 30, 2020. * Period-end loans held for investment in the quarter decreased $11.5 billion, or 4 percent, to $251.5 billion. * Credit Card period-end loans decreased $10.5 billion, or 9 percent, to $107.3 billion. * Domestic Card period-end loans decreased $10.2 billion, or 9 percent, to $99.4 billion.

* Consumer Banking period-end loans increased $2.7 billion, or 4 percent, to $66.7 billion * Auto period-end loans increased $2.0 billion, or 3 percent, to $63.3 billion.

* Commercial Banking period-end loans decreased $3.7 billion, or 5 percent, to $77.5 billion.

* Average loans held for investment in the quarter decreased $9.5 billion, or 4 percent, to $253.4 billion. * Credit Card average loans decreased $14.0 billion, or 11 percent, to $108.7 billion * Domestic Card average loans decreased $12.7 billion, or 11 percent, to $101.0 billion.

* Consumer Banking average loans increased $1.2 billion, or 2 percent, to $64.9 billion. * Auto average loans increased $793 million, or 1 percent, to $61.8 billion.

* Commercial Banking average loans increased $3.3 billion, or 4 percent, to $79.8 billion.

* Period-end total deposits increased $34.5 billion, or 13 percent, to $304.2 billion, while average deposits increased $23.7 billion, or 9 percent, to $288.3 billion. * Interest-bearing deposits rate paid decreased 27 basis points to 0.94 percent.

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

(2)Pre-provision earnings is calculated based on the sum of net interest income and non-interest income, less non-interest expense for the period.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on July 21, 2020 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 4, 2020 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, 2019.

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 $304.2 billion in deposits and $421.3 billion in total assets as of June 30, 2020. 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 2020

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 8 Statements (Tables 1-4)

Table 6: Average Balances, Net Interest Income and Net Interest Margin 9

Table 7: Loan Information and Performance Statistics 10

Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments 12 Activity

Business Segment Results

Table 9: Financial Summary-Business Segment Results 14

Table 10: Financial & Statistical Summary-Credit Card Business 15

Table 11: Financial & Statistical Summary-Consumer Banking Business 17

Table 12: Financial & Statistical Summary-Commercial Banking Business 18

Table 13: Financial & Statistical Summary-Other and Total 19

Other

Table 14: Notes to Loan, Allowance and Business Segment Disclosures (Tables 7-13) 20

Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP 21 Measures

__________

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings

^(1) presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2020 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

^(2) 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



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.(Dollars in millions, except per share data and as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Income Statement

Net interest income $5,460 $6,025 $6,066 $5,737 $5,746 (9) %(5) %$11,485 $11,537 -

Non-interest income 1,096 1,224 1,361 1,222 1,378 (10) (20) 2,320 2,670 (13) %

Total net revenue^(1) 6,556 7,249 7,427 6,959 7,124 (10) (8) 13,805 14,207 (3)

Provision for credit losses 4,246 5,423 1,818 1,383 1,342 (22) ** 9,669 3,035 **

Non-interest expense:

Marketing 273 491 710 501 546 (44) (50) 764 1,063 (28)

Operating expense 3,497 3,238 3,451 3,371 3,233 8 8 6,735 6,387 5

Total non-interest expense 3,770 3,729 4,161 3,872 3,779 1 - 7,499 7,450 1

Income (loss) from continuing operations before income taxes (1,460) (1,903) 1,448 1,704 2,003 (23) ** (3,363) 3,722 **

Income tax provision (benefit) (543) (563) 270 375 387 (4) ** (1,106) 696 **

Income (loss) from continuing operations, net of tax (917) (1,340) 1,178 1,329 1,616 (32) ** (2,257) 3,026 **

Income (loss) from discontinued operations, net of tax (1) - (2) 4 9 ** ** (1) 11 **

Net income (loss) (918) (1,340) 1,176 1,333 1,625 (31) ** (2,258) 3,037 **

Dividends and undistributed earnings allocated to participating securities^(2)(1) (3) (7) (10) (12) (67) (92) (4) (24) (83)

Preferred stock dividends (90) (55) (97) (53) (80) 64 13 (145) (132) 10

Issuance cost for redeemed preferred stock^(3) - (22) (31) - - ** - (22) - **

Net income (loss) available to common stockholders $(1,009)$(1,420)$1,041 $1,270 $1,533 (29) ** $(2,429)$2,881 **

Common Share Statistics

Basic earnings per common share:^(2)

Net income (loss) from continuing operations $(2.21) $(3.10) $2.26 $2.70 $3.24 (29)%** $(5.31) $6.11 **

Income from discontinued operations - - - 0.01 0.02 - ** - 0.02 **

Net income (loss) per basic common share $(2.21) $(3.10) $2.26 $2.71 $3.26 (29) ** $(5.31) $6.13 **

Diluted earnings per common share:^(2)

Net income (loss) from continuing operations $(2.21) $(3.10) $2.25 $2.68 $3.22 (29) ** $(5.31) $6.08 **

Income from discontinued operations - - - 0.01 0.02 - ** - 0.02 **

Net income (loss) per diluted common share $(2.21) $(3.10) $2.25 $2.69 $3.24 (29) ** $(5.31) $6.10 **

Weighted-average common shares outstanding (in millions):

Basic 456.7 457.6 460.9 469.5 470.8 - (3) %457.1 470.1 (3) %

Diluted 456.7 457.6 463.4 471.8 473.0 - (3) 457.1 472.3 (3)

Common shares outstanding (period-end, in millions) 456.3 455.3 456.6 465.7 470.3 - (3) 456.3 470.3 (3)

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

Tangible book value per common share (period-end)^(4) 78.82 80.68 83.72 80.46 77.65 (2) 2 78.82 77.65 2





2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Balance Sheet (Period-End)

Loans held for investment $251,512$262,990$265,809$249,355$244,460(4) %3 %$251,512$244,4603 %

Interest-earning assets 389,829 364,472 355,202 344,643 339,160 7 15 389,829 339,160 15

Total assets 421,296 396,878 390,365 378,810 373,619 6 13 421,296 373,619 13

Interest-bearing deposits 275,183 245,142 239,209 234,084 231,161 12 19 275,183 231,161 19

Total deposits 304,238 269,689 262,697 257,148 254,535 13 20 304,238 254,535 20

Borrowings 44,900 55,681 55,697 50,149 49,233 (19) (9) 44,900 49,233 (9)

Common equity 50,835 51,620 53,157 52,412 51,406 (2) (1) 50,835 51,406 (1)

Total stockholders' equity 56,045 56,830 58,011 58,235 55,767 (1) - 56,045 55,767 -

Balance Sheet (Average Balances)

Loans held for investment $253,358$262,889$258,870$246,147$242,653(4) %4 %$258,124$242,3077 %

Interest-earning assets 378,145 355,347 349,150 340,949 338,026 6 12 366,746 337,913 9

Total assets 411,075 390,380 383,162 374,905 371,095 5 11 400,845 370,746 8

Interest-bearing deposits 261,256 241,115 236,250 232,063 230,452 8 13 251,185 229,020 10

Total deposits 288,344 264,653 260,040 255,082 253,634 9 14 276,498 252,528 9

Borrowings 49,827 51,795 51,442 49,413 49,982 (4) - 50,810 51,510 (1)

Common equity 52,413 53,186 52,641 52,566 50,209 (1) 4 52,799 49,289 7

Total stockholders' equity 57,623 58,568 58,148 57,245 54,570 (2) 6 58,096 53,650 8

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics-Consolidated



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs. (Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Performance Metrics

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

Non-interest income growth (period over period) (10) (10) 11 (11) %7 ** ** (13) %(6) **

Total net revenue growth (period over period) (10) (2) 7 (2) 1 ** ** (3) 1 **

Total net revenue margin^(5) 6.93 8.16 8.51 8.16 8.43 (123)bps(150)bps7.53 8.41 (88) bps

Net interest margin^(6) 5.78 6.78 6.95 6.73 6.80 (100) (102) 6.26 6.83 (57)

Return on average assets (0.89) (1.37) 1.23 1.42 1.74 48 ** (1.13) 1.63 **

Return on average tangible assets^(7) (0.93) (1.43) 1.28 1.48 1.82 50 ** (1.17) 1.70 **

Return on average common equity^(8) (7.69) (10.68) 7.93 9.63 12.14 299 ** (9.20) 11.65 **

Return on average tangible common equity^(9) (10.74) (14.85) 11.07 13.45 17.26 4 % ** (12.81) 16.70 **

Non-interest expense as a percentage of average loans held for investment5.95 5.67 6.43 6.29 6.23 28 bps(28) 5.81 6.15 (34)

Efficiency ratio^(10) 57.50 51.44 56.03 55.64 53.05 6 % 4 % 54.32 52.44 2 %

Operating efficiency ratio^(11) 53.34 44.67 46.47 48.44 45.38 9 8 48.79 44.96 4

Effective income tax rate for continuing operations 37.2 29.6 18.6 22.0 19.3 8 18 32.9 18.7 14

Employees (period-end, in thousands) 53.1 52.1 51.9 52.1 50.7 2 5 53.1 50.7 5

Credit Quality Metrics

Allowance for credit losses $16,832 $14,073 $7,208 $7,037 $7,133 20 % 136 % $16,832 $7,133 136 %

Allowance coverage ratio 6.69 %5.35 %2.71 %2.82 %2.92 %134 bps377 bps6.69 %2.92 %377 bps

Net charge-offs $1,505 $1,791 $1,683 $1,462 $1,508 (16) % - $3,296 $3,107 6 %

Net charge-off rate^(12) 2.38 %2.72 %2.60 %2.38 %2.48 %(34) bps(10) bps2.55 %2.56 %(1) bps

30+ day performing delinquency rate^(13) 2.09 2.95 3.51 3.28 3.15 (86) (106) 2.09 3.15 (106)

30+ day delinquency rate^(13) 2.30 3.16 3.74 3.51 3.35 (86) (105) 2.30 3.35 (105)

Capital Ratios^(14)

Common equity Tier 1 capital 12.4 %12.0 %12.2 %12.5 %12.3 %40 bps10 bps12.4 %12.3 %10 bps

Tier 1 capital 14.2 13.7 13.7 14.4 13.8 50 40 14.2 13.8 40

Total capital 16.7 16.1 16.1 16.8 16.2 60 50 16.7 16.2 50

Tier 1 leverage 10.3 11.0 11.7 11.9 11.4 (70) (110) 10.3 11.4 (110)

Tangible common equity ("TCE")^(15) 8.8 9.6 10.2 10.3 10.2 (80) (140) 8.8 10.2 (140)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.

(Dollars in millions, except per share data and as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Interest income:

Loans, including loans held for sale $5,820 $6,542 $6,682$6,429$6,383(11)%(9) %$12,362 $12,751(3) %

Investment securities 482 530 544 583 629 (9) (23) 1,012 1,284 (21)

Other 16 37 44 63 64 (57) (75) 53 133 (60)

Total interest income 6,318 7,109 7,270 7,075 7,076 (11) (11) 13,427 14,168 (5)

Interest expense:

Deposits 611 731 832 901 870 (16) (30) 1,342 1,687 (20)

Securitized debt obligations 56 99 118 123 139 (43) (60) 155 282 (45)

Senior and subordinated notes 180 239 236 299 310 (25) (42) 419 624 (33)

Other borrowings 11 15 18 15 11 (27) - 26 38 (32)

Total interest expense 858 1,084 1,204 1,338 1,330 (21) (35) 1,942 2,631 (26)

Net interest income 5,460 6,025 6,066 5,737 5,746 (9) (5) 11,485 11,537 -

Provision for credit losses 4,246 5,423 1,818 1,383 1,342 (22) ** 9,669 3,035 **

Net interest income after provision for credit losses 1,214 602 4,248 4,354 4,404 102 (72) 1,816 8,502 (79)

Non-interest income:

Interchange fees, net 672 752 811 790 820 (11) (18) 1,424 1,578 (10)

Service charges and other customer-related fees 258 327 342 283 352 (21) (27) 585 705 (17)

Net securities gains (losses) - - (18) 5 15 - ** - 39 **

Other 166 145 226 144 191 14 (13) 311 348 (11)

Total non-interest income 1,096 1,224 1,361 1,222 1,378 (10) (20) 2,320 2,670 (13)

Non-interest expense:

Salaries and associate benefits 1,704 1,627 1,652 1,605 1,558 5 9 3,331 3,131 6

Occupancy and equipment 523 517 565 519 521 1 - 1,040 1,014 3

Marketing 273 491 710 501 546 (44) (50) 764 1,063 (28)

Professional services 304 287 318 314 314 6 (3) 591 605 (2)

Communications and data processing 308 302 346 312 329 2 (6) 610 632 (3)

Amortization of intangibles 16 22 28 25 29 (27) (45) 38 59 (36)

Other^(16) 642 483 542 596 482 33 33 1,125 946 19

Total non-interest expense 3,770 3,729 4,161 3,872 3,779 1 - 7,499 7,450 1

Income (loss) from continuing operations before income taxes (1,460) (1,903) 1,448 1,704 2,003 (23) ** (3,363) 3,722 **

Income tax provision (benefit) (543) (563) 270 375 387 (4) ** (1,106) 696 **

Income (loss) from continuing operations, net of tax (917) (1,340) 1,178 1,329 1,616 (32) ** (2,257) 3,026 **

Income (loss) from discontinued operations, net of tax (1) - (2) 4 9 ** ** (1) 11 **

Net income (loss) (918) (1,340) 1,176 1,333 1,625 (31) ** (2,258) 3,037 **

Dividends and undistributed earnings allocated to participating securities^(2)(1) (3) (7) (10) (12) (67) (92) (4) (24) (83)

Preferred stock dividends (90) (55) (97) (53) (80) 64 13 (145) (132) 10

Issuance cost for redeemed preferred stock^(3) - (22) (31) - - ** - (22) - **

Net income (loss) available to common stockholders $(1,009)$(1,420)$1,041$1,270$1,533(29) ** $(2,429)$2,881 **





2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.

(Dollars in millions, except per share data and as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Basic earnings per common share:^(2)

Net income (loss) from continuing operations $(2.21) $(3.10) $2.26 $2.70 $3.24 (29)%** $(5.31) $6.11 **

Income from discontinued operations - - - 0.01 0.02 - ** - 0.02 **

Net income (loss) per basic common share $(2.21) $(3.10) $2.26 $2.71 $3.26 (29) ** $(5.31) $6.13 **

Diluted earnings per common share:^(2)

Net income (loss) from continuing operations $(2.21) $(3.10) $2.25 $2.68 $3.22 (29) ** $(5.31) $6.08 **

Income from discontinued operations - - - 0.01 0.02 - ** - 0.02 **

Net income (loss) per diluted common share $(2.21) $(3.10) $2.25 $2.69 $3.24 (29) ** $(5.31) $6.10 **

Weighted-average common shares outstanding (in millions):

Basic common shares 456.7 457.6 460.9 469.5 470.8 - (3) %457.1 470.1 (3) %

Diluted common shares 456.7 457.6 463.4 471.8 473.0 - (3) 457.1 472.3 (3)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets



2020 Q2 vs.

2020 2020 2019 2019 2019 2020 2019

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

Assets:

Cash and cash equivalents:

Cash and due from banks $4,583 $4,545 $4,129 $4,452 $5,184 1 %(12)%

Interest-bearing deposits and other short-term investments 51,235 20,391 9,278 12,668 9,927 151 416

Total cash and cash equivalents 55,818 24,936 13,407 17,120 15,111 124 269

Restricted cash for securitization investors 740 364 342 417 710 103 4

Investment securities:

Securities available for sale 87,859 81,423 79,213 46,168 45,658 8 92

Securities held to maturity - - - 33,894 35,475 - **

Total investment securities 87,859 81,423 79,213 80,062 81,133 8 8

Loans held for investment:

Unsecuritized loans held for investment 222,310 231,318 231,992 215,892 211,556 (4) 5

Loans held in consolidated trusts 29,202 31,672 33,817 33,463 32,904 (8) (11)

Total loans held for investment 251,512 262,990 265,809 249,355 244,460 (4) 3

Allowance for credit losses (16,832) (14,073) (7,208) (7,037) (7,133) 20 136

Net loans held for investment 234,680 248,917 258,601 242,318 237,327 (6) (1)

Loans held for sale 711 1,056 400 1,245 1,829 (33) (61)

Premises and equipment, net 4,324 4,336 4,378 4,311 4,243 - 2

Interest receivable 1,574 1,687 1,758 1,627 1,544 (7) 2

Goodwill 14,645 14,645 14,653 14,624 14,545 - 1

Other assets 20,945 19,514 17,613 17,086 17,177 7 22

Total assets $421,296$396,878$390,365$378,810$373,6196 13



2020 Q2 vs.

2020 2020 2019 2019 2019 2020 2019

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

Liabilities:

Interest payable $380 $359 $439 $370 $437 6 %(13)%

Deposits:

Non-interest-bearing deposits 29,055 24,547 23,488 23,064 23,374 18 24

Interest-bearing deposits 275,183 245,142 239,209 234,084 231,161 12 19

Total deposits 304,238 269,689 262,697 257,148 254,535 13 20

Securitized debt obligations 15,761 17,141 17,808 18,910 16,959 (8) (7)

Other debt:

Federal funds purchased and securities loaned or sold under agreements to 573 399 314 464 359 44 60 repurchase

Senior and subordinated notes 28,481 32,049 30,472 30,682 31,822 (11) (10)

Other borrowings 85 6,092 7,103 93 93 (99) (9)

Total other debt 29,139 38,540 37,889 31,239 32,274 (24) (10)

Other liabilities 15,733 14,319 13,521 12,908 13,647 10 15

Total liabilities 365,251 340,048 332,354 320,575 317,852 7 15



Stockholders' equity:

Preferred stock 0 0 0 0 0 - -

Common stock 7 7 7 7 7 - -

Additional paid-in capital, net 33,556 33,450 32,980 33,826 32,262 - 4

Retained earnings 35,361 36,552 40,340 39,476 38,386 (3) (8)

Accumulated other comprehensive income 3,981 3,679 1,156 453 170 8 **

Treasury stock, at cost (16,860) (16,858) (16,472) (15,527) (15,058) - 12

Total stockholders' equity 56,045 56,830 58,011 58,235 55,767 (1) -

Total liabilities and stockholders' equity $421,296$396,878$390,365$378,810$373,6196 13

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



Total net revenue was reduced by $318 million in Q2 2020 and $389 million in Q1 2020 for credit card finance charges and fees charged-off as uncollectible, ^(1) and by $365 million in Q4 2019, $330 million in Q3 2019 and $318 million in Q2 2019 for the estimated uncollectible amount of credit card finance charges and fees and related losses.

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 ^(2) 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 March 2, 2020, we redeemed all outstanding shares of our fixed rate 6.00% non-cumulative perpetual preferred stock Series B. The redemption increased our net loss available to common shareholders by $22 million in Q1 2020. On December 2, 2019, we redeemed all outstanding shares of our fixed rate 6.25% ^(3) non-cumulative perpetual preferred stock Series C and fixed rate 6.70% non-cumulative perpetual preferred stock Series D. The redemption reduced our net income available to common shareholders by $31 million in Q4 2019.

Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See ^(4) "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

^(5) Total net revenue margin is calculated based on annualized total net 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 the period ^(7) 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 net income (loss) available to common stockholders less income (loss) from discontinued operations, ^(8) 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 net income (loss) available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity ("TCE"). Our calculation of return on average ^(9) 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 adjusted efficiency ^(10) 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 adjusted ^(11)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.

^(12)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.

^(13)Metrics for Q2 2020 and Q1 2020 include the impact of COVID-19 customer assistance programs where applicable.

Capital ratios as of the end of Q2 2020 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and ^(14) 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 and ^(15) Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.

Includes net Cybersecurity Incident expenses of $11 million in Q2 2020, $4 ^(16)million in Q1 2020, $16 million in Q4 2019 and $22 million in Q3 2019, respectively.

** Not meaningful.

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



2020 Q2 2020 Q1 2019 Q2

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

Interest-earning assets:

Loans, including loans held for sale $254,402$5,8209.15 % $263,631$6,542 9.93 % $243,831$6,383 10.47 %

Investment securities 81,095 482 2.38 78,212 530 2.71 82,383 629 3.05

Cash equivalents and other 42,648 16 0.15 13,504 37 1.10 11,812 64 2.16

Total interest-earning assets $378,145$6,3186.68 $355,347$7,109 8.00 $338,026$7,076 8.37

Interest-bearing liabilities:

Interest-bearing deposits $261,256$611 0.94 $241,115$731 1.21 $230,452$870 1.51

Securitized debt obligations 16,432 56 1.37 18,054 99 2.20 18,262 139 3.04

Senior and subordinated notes 31,294 180 2.30 31,342 239 3.04 30,630 310 4.05

Other borrowings and liabilities 3,554 11 1.21 3,779 15 1.62 2,322 11 1.91

Total interest-bearing liabilities $312,536$858 1.10 $294,290$1,084 1.47 $281,666$1,330 1.89

Net interest income/spread $5,4605.58 $6,025 6.53 $5,746 6.48

Impact of non-interest-bearing funding 0.20 0.25 0.32

Net interest margin 5.78 % 6.78 % 6.80 %





Six Months Ended June 30,

2020 2019

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 $259,017$12,3629.55 % $243,383$12,75110.48 %

Investment securities 79,654 1,012 2.54 83,027 1,284 3.09

Cash equivalents and other 28,075 53 0.38 11,503 133 2.31

Total interest-earning assets $366,746$13,4277.32 $337,913$14,1688.39

Interest-bearing liabilities:

Interest-bearing deposits $251,185$1,342 1.07 $229,020$1,687 1.47

Securitized debt obligations 17,243 155 1.80 18,503 282 3.05

Senior and subordinated notes 31,318 419 2.67 30,732 624 4.06

Other borrowings and liabilities 3,667 26 1.42 3,497 38 2.20

Total interest-bearing liabilities $303,413$1,942 1.28 $281,752$2,631 1.87

Net interest income/spread $11,4856.04 $11,5376.52

Impact of non-interest-bearing funding 0.22 0.31

Net interest margin 6.26 % 6.83 %

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs. 2020 2019 2019 (Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2

Loans Held for Investment (Period-End)

Credit card:

Domestic credit card $99,390 $109,549 $118,606 $104,664 $102,959 (9) % (3) % $99,390 $102,959 (3) %

International card businesses 7,920 8,248 9,630 9,017 9,182 (4) (14) 7,920 9,182 (14)

Total credit card^(1) 107,310 117,797 128,236 113,681 112,141 (9) (4) 107,310 112,141 (4)

Consumer banking:

Auto 63,319 61,364 60,362 59,278 57,556 3 10 63,319 57,556 10

Retail banking 3,393 2,669 2,703 2,737 2,771 27 22 3,393 2,771 22

Total consumer banking 66,712 64,033 63,065 62,015 60,327 4 11 66,712 60,327 11

Commercial banking:

Commercial and multifamily real estate 30,953 32,373 30,245 30,009 29,861 (4) 4 30,953 29,861 4

Commercial and industrial 46,537 48,787 44,263 43,650 42,125 (5) 10 46,537 42,125 10

Total commercial lending 77,490 81,160 74,508 73,659 71,986 (5) 8 77,490 71,986 8

Small-ticket commercial real estate - - - - 6 ** ** - 6 **

Total commercial banking 77,490 81,160 74,508 73,659 71,992 (5) 8 77,490 71,992 8

Total loans held for investment $251,512 $262,990 $265,809 $249,355 $244,460 (4) 3 $251,512 $244,460 3

Loans Held for Investment (Average)

Credit card:

Domestic credit card $100,996 $113,711 $112,965 $103,426 $101,930 (11) % (1) % $107,354 $102,296 5 %

International card businesses 7,752 9,065 9,120 8,945 8,868 (14) (13) 8,408 8,829 (5)

Total credit card^(1) 108,748 122,776 122,085 112,371 110,798 (11) (2) 115,762 111,125 4

Consumer banking:

Auto 61,798 61,005 59,884 58,517 57,070 1 8 61,401 56,654 8

Retail banking 3,053 2,666 2,712 2,752 2,788 15 10 2,860 2,809 2

Total consumer banking 64,851 63,671 62,596 61,269 59,858 2 8 64,261 59,463 8

Commercial banking:

Commercial and multifamily real estate 31,723 31,081 30,173 29,698 29,514 2 7 31,402 29,276 7

Commercial and industrial 48,036 45,361 44,016 42,807 42,476 6 13 46,699 42,304 10

Total commercial lending 79,759 76,442 74,189 72,505 71,990 4 11 78,101 71,580 9

Small-ticket commercial real estate - - - 2 7 ** ** - 139 **

Total commercial banking 79,759 76,442 74,189 72,507 71,997 4 11 78,101 71,719 9

Total average loans held for investment $253,358 $262,889 $258,870 $246,147 $242,653 (4) 4 $258,124 $242,307 7





2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs. 2020 2019 2019 Q2 Q1 Q4 Q3 Q2 Q1 Q2

Net Charge-Off Rates

Credit card:

Domestic credit card 4.53 % 4.68 % 4.32 % 4.12 % 4.86 %(15) bps(33) bps 4.61 % 4.95 %(34) bps

International card businesses 3.47 4.65 4.22 3.78 3.63 (118) (16) 4.11 3.41 70

Total credit card 4.46 4.68 4.31 4.09 4.76 (22) (30) 4.57 4.83 (26)

Consumer banking:

Auto 1.16 1.51 1.90 1.60 1.09 (35) 7 1.33 1.26 7

Retail banking 1.78 2.37 2.77 2.55 2.42 (59) (64) 2.05 2.49 (44)

Total consumer banking 1.19 1.54 1.93 1.64 1.15 (35) 4 1.36 1.32 4

Commercial banking:

Commercial and multifamily real estate 0.09 - - 0.02 - 9 9 0.04 - 4

Commercial and industrial 0.78 0.96 0.60 0.55 0.15 (18) 63 0.87 0.14 73

Total commercial banking 0.51 0.57 0.35 0.33 0.09 (6) 42 0.54 0.08 46

Total net charge-offs 2.38 2.72 2.60 2.38 2.48 (34) (10) 2.55 2.56 (1)

30+ Day Performing Delinquency Rates^(2)

Credit card:

Domestic credit card 2.74 % 3.69 % 3.93 % 3.71 % 3.40 %(95) bps(66) bps 2.74 % 3.40 %(66) bps

International card businesses 2.71 3.66 3.47 3.52 3.40 (95) (69) 2.71 3.40 (69)

Total credit card 2.74 3.69 3.89 3.69 3.40 (95) (66) 2.74 3.40 (66)

Consumer banking:

Auto 3.28 5.29 6.88 6.47 6.10 (201) (282) 3.28 6.10 (282)

Retail banking 0.89 1.27 1.02 1.01 0.93 (38) (4) 0.89 0.93 (4)

Total consumer banking 3.16 5.12 6.63 6.23 5.87 (196) (271) 3.16 5.87 (271)

Nonperforming Loans and Nonperforming Assets Rates^(3)(4)

Credit card:

International card businesses 0.29 % 0.29 % 0.26 % 0.25 % 0.25 %- 4 bps 0.29 % 0.25 %4 bps

Total credit card 0.02 0.02 0.02 0.02 0.02 - - 0.02 0.02 -

Consumer banking:

Auto 0.41 0.62 0.81 0.73 0.64 (21) bps(23) 0.41 0.64 (23)

Retail banking 0.70 0.88 0.87 0.91 1.02 (18) (32) 0.70 1.02 (32)

Total consumer banking 0.43 0.63 0.81 0.74 0.66 (20) (23) 0.43 0.66 (23)

Commercial banking:

Commercial and multifamily real estate 0.54 0.22 0.12 0.12 0.14 32 40 0.54 0.14 40

Commercial and industrial 1.06 0.87 0.93 0.95 0.74 19 32 1.06 0.74 32

Total commercial banking 0.85 0.61 0.60 0.61 0.50 24 35 0.85 0.50 35

Total nonperforming loans 0.38 0.35 0.37 0.37 0.32 3 6 0.38 0.32 6

Total nonperforming assets 0.39 0.37 0.39 0.40 0.34 2 5 0.39 0.34 5

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



Three Months Ended June 30, 2020

Credit Card Consumer Banking

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

Allowance for credit losses:

Balance as of March 31, 2020 $9,806 $540 $10,346$2,058$96 $2,154$1,573 $14,073

Charge-offs (1,493) (119) (1,612) (399) (17) (416) (103) (2,131)

Recoveries 350 51 401 220 4 224 1 626

Net charge-offs (1,143) (68) (1,211) (179) (13) (192) (102) (1,505)

Provision for credit losses 2,906 38 2,944 847 29 876 432 4,252

Allowance build (release) for credit losses 1,763 (30) 1,733 668 16 684 330 2,747

Other changes^(5) - 12 12 - - - - 12

Balance as of June 30, 2020 11,569 522 12,091 2,726 112 2,838 1,903 16,832

Reserve for unfunded lending commitments:

Balance as of March 31, 2020 - - - - - - 223 223

Benefit for losses on unfunded lending commitments - - - - - - (5) (5)

Balance as of June 30, 2020 - - - - - - 218 218

Combined allowance and reserve as of June 30, 2020 $11,569$522 $12,091$2,726$112 $2,838$2,121 $17,050





Six Months Ended June 30, 2020

Credit Card Consumer Banking

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

Allowance for credit losses:

Balance as of December 31, 2019 $4,997 $398 $5,395 $984 $54 $1,038$775 $7,208

Cumulative effects from adoption of the current expected credit loss ("CECL") 2,237 4 2,241 477 25 502 102 2,845 standard

Finance charge and fee reserve reclassification^(1) 439 23 462 - - - - 462

Balance as of January 1, 2020 7,673 425 8,098 1,461 79 1,540 877 10,515

Charge-offs (3,208) (253) (3,461) (875) (37) (912) (215) (4,588)

Recoveries 734 80 814 466 8 474 4 1,292

Net charge-offs (2,474) (173) (2,647) (409) (29) (438) (211) (3,296)

Provision for credit losses 6,370 276 6,646 1,674 62 1,736 1,237 9,619

Allowance build for credit losses 3,896 103 3,999 1,265 33 1,298 1,026 6,323

Other changes^(5) - (6) (6) - - - - (6)

Balance as of June 30, 2020 11,569 522 12,091 2,726 112 2,838 1,903 16,832

Reserve for unfunded lending commitments:

Balance as of December 31, 2019 - - - - 5 5 130 135

Cumulative effects from adoption of the CECL standard - - - - (5) (5) 42 37

Balance as of January 1, 2020 - - - - - - 172 172

Provision for losses on unfunded lending commitments - - - - - - 46 46

Balance as of June 30, 2020 - - - - - - 218 218

Combined allowance and reserve as of June 30, 2020 $11,569$522 $12,091$2,726$112 $2,838$2,121 $17,050

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary-Business Segment Results



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

(Dollars in millions) Credit ConsumerCommercial Other^(6)Total Credit ConsumerCommercial Other^(6)Total Card Banking Banking^(6) Card Banking Banking^(6)

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)



Three Months Ended March 31, 2020

(Dollars in millions) Credit ConsumerCommercial Other^(6)Total Card Banking Banking^(6)

Net interest income $3,702$1,657$491 $175 $6,025

Non-interest income (loss) 911 126 238 (51) 1,224

Total net revenue 4,613 1,783 729 124 7,249

Provision for credit losses 3,702 860 856 5 5,423

Non-interest expense 2,208 991 412 118 3,729

Income (loss) from continuing operations before income taxes(1,297)(68) (539) 1 (1,903)

Income tax benefit (306) (16) (128) (113) (563)

Income (loss) from continuing operations, net of tax $(991)$(52) $(411) $114 $(1,340)



Three Months Ended June 30, 2019 Six Months Ended June 30, 2019

(Dollars in millions) Credit ConsumerCommercial Other^(6)Total Credit ConsumerCommercial Other^(6)Total Card Banking Banking^(6) Card Banking Banking^(6)

Net interest income (loss) $3,531$1,709$514 $(8) $5,746 $7,121 $3,388$1,003 $25 $11,537

Non-interest income (loss) 1,038 166 200 (26) 1,378 1,988 326 387 (31) 2,670

Total net revenue (loss) 4,569 1,875 714 (34) 7,124 9,109 3,714 1,390 (6) 14,207

Provision for credit losses 1,095 165 82 - 1,342 2,484 400 151 - 3,035

Non-interest expense 2,253 1,002 427 97 3,779 4,424 1,996 844 186 7,450

Income (loss) from continuing operations before income taxes1,221 708 205 (131) 2,003 2,201 1,318 395 (192) 3,722

Income tax provision (benefit) 283 165 48 (109) 387 512 307 92 (215) 696

Income (loss) from continuing operations, net of tax $938 $543 $157 $(22) $1,616 $1,689 $1,011$303 $23 $3,026



CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary-Credit Card Business



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.

(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Credit Card

Earnings:

Net interest income $3,369 $3,702 $3,794 $3,546 $3,531 (9) % (5) % $7,071 $7,121 (1) %

Non-interest income 845 911 1,030 870 1,038 (7) (19) 1,756 1,988 (12)

Total net revenue 4,214 4,613 4,824 4,416 4,569 (9) (8) 8,827 9,109 (3)

Provision for credit losses 2,944 3,702 1,421 1,087 1,095 (20) 169 6,646 2,484 168

Non-interest expense 1,969 2,208 2,487 2,360 2,253 (11) (13) 4,177 4,424 (6)

Income (loss) from continuing operations before income taxes(699) (1,297) 916 969 1,221 (46) ** (1,996) 2,201 **

Income tax provision (benefit) (166) (306) 212 235 283 (46) ** (472) 512 **

Income (loss) from continuing operations, net of tax $(533) $(991) $704 $734 $938 (46) ** $(1,524) $1,689 **

Selected performance metrics:

Period-end loans held for investment^(1) $107,310 $117,797 $128,236 $113,681 $112,141 (9) (4) $107,310 $112,141 (4)

Average loans held for investment^(1) 108,748 122,776 122,085 112,371 110,798 (11) (2) 115,762 111,125 4

Average yield on loans held for investment^(7) 13.72 %14.46 %15.02 %15.55 %15.66 %(74)bps(194)bps14.11 %15.72 %(161)bps

Total net revenue margin^(8) 15.50 15.03 15.80 15.72 16.50 47 (100) 15.25 16.39 (114)

Net charge-off rate 4.46 4.68 4.31 4.09 4.76 (22) (30) 4.57 4.83 (26)

30+ day performing delinquency rate 2.74 3.69 3.89 3.69 3.40 (95) (66) 2.74 3.40 (66)

30+ day delinquency rate 2.75 3.70 3.91 3.71 3.42 (95) (67) 2.75 3.42 (67)

Nonperforming loan rate^(3) 0.02 0.02 0.02 0.02 0.02 - - 0.02 0.02 -

Purchase volume^(9) $90,149 $99,920 $116,631 $108,034 $106,903 (10)% (16) % $190,069 $200,100 (5) %



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.

(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Domestic Card

Earnings:

Net interest income $3,094 $3,381 $3,473 $3,299 $3,220 (8) % (4) % $6,475 $6,493 -

Non-interest income 795 842 962 878 971 (6) (18) 1,637 1,844 (11) %

Total net revenue 3,889 4,223 4,435 4,177 4,191 (8) (7) 8,112 8,337 (3)

Provision for credit losses 2,906 3,464 1,346 1,010 1,024 (16) 184 6,370 2,315 175

Non-interest expense 1,776 1,984 2,249 2,076 2,034 (10) (13) 3,760 3,983 (6)

Income (loss) from continuing operations before income taxes(793) (1,225) 840 1,091 1,133 (35) ** (2,018) 2,039 **

Income tax provision (benefit) (188) (290) 196 254 264 (35) ** (478) 475 **

Income (loss) from continuing operations, net of tax $(605) $(935) $644 $837 $869 (35) ** $(1,540) $1,564 **

Selected performance metrics:

Period-end loans held for investment^(1) $99,390 $109,549 $118,606 $104,664 $102,959 (9) (3) $99,390 $102,959 (3)

Average loans held for investment^(1) 100,996 113,711 112,965 103,426 101,930 (11) (1) 107,354 102,296 5

Average yield on loans held for investment^(7) 13.52 %14.30 %14.91 %15.74 %15.60 %(78)bps(208)bps13.93 %15.65 %(172)bps

Total net revenue margin^(8) 15.40 14.86 15.70 16.15 16.45 54 (105) 15.11 16.30 (119)

Net charge-off rate 4.53 4.68 4.32 4.12 4.86 (15) (33) 4.61 4.95 (34)

30+ day performing delinquency rate 2.74 3.69 3.93 3.71 3.40 (95) (66) 2.74 3.40 (66)

Purchase volume^(9) $82,860 $92,248 $107,154 $99,087 $98,052 (10)% (15) % $175,108 $183,790 (5) %

Refreshed FICO scores:^(10)

Greater than 660 67 %65 %67 %68 %68 %2 (1) 67 %68 %(1)

660 or below 33 35 33 32 32 (2) 1 33 32 1

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

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary-Consumer Banking Business



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.

(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Consumer Banking

Earnings:

Net interest income $1,665 $1,657 $1,662 $1,682 $1,709 - (3) % $3,322 $3,388 (2) %

Non-interest income 97 126 152 165 166 (23) % (42) 223 326 (32)

Total net revenue 1,762 1,783 1,814 1,847 1,875 (1) (6) 3,545 3,714 (5)

Provision for credit losses 876 860 335 203 165 2 ** 1,736 400 **

Non-interest expense 1,036 991 1,110 985 1,002 5 3 2,027 1,996 2

Income (loss) from continuing operations before income taxes(150) (68) 369 659 708 121 ** (218) 1,318 **

Income tax provision (benefit) (36) (16) 86 154 165 125 ** (52) 307 **

Income (loss) from continuing operations, net of tax $(114) $(52) $283 $505 $543 119 ** $(166) $1,011 **

Selected performance metrics:

Period-end loans held for investment $66,712 $64,033 $63,065 $62,015 $60,327 4 11 $66,712 $60,327 11

Average loans held for investment 64,851 63,671 62,596 61,269 59,858 2 8 64,261 59,463 8

Average yield on loans held for investment^(7) 8.41 %8.46 %8.51 %8.47 %8.36 %(5) bps5 bps8.44 %8.25 %19 bps

Auto loan originations $8,292 $7,640 $7,527 $8,175 $7,327 9 % 13 % $15,931 $13,549 18 %

Period-end deposits 246,804 217,607 213,099 206,423 205,220 13 20 246,804 205,220 20

Average deposits 232,293 215,071 209,783 204,933 204,164 8 14 223,682 202,627 10

Average deposits interest rate 0.89 %1.06 %1.20 %1.31 %1.26 %(17) bps(37) bps0.97 %1.22 %(25) bps

Net charge-off rate 1.19 1.54 1.93 1.64 1.15 (35) 4 1.36 1.32 4

30+ day performing delinquency rate 3.16 5.12 6.63 6.23 5.87 (196) (271) 3.16 5.87 (271)

30+ day delinquency rate 3.48 5.65 7.34 6.86 6.41 (217) (293) 3.48 6.41 (293)

Nonperforming loan rate^(3) 0.43 0.63 0.81 0.74 0.66 (20) (23) 0.43 0.66 (23)

Nonperforming asset rate^(4) 0.46 0.71 0.91 0.83 0.75 (25) (29) 0.46 0.75 (29)

Auto-At origination FICO scores:^(11)

Greater than 660 46 %47 %48 %48 %49 %(1) % (3) % 46 %49 %(3) %

621 - 660 20 20 20 20 19 - 1 20 19 1

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

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

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary-Commercial Banking Business



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.

(Dollars in millions, except as noted) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Commercial Banking

Earnings:

Net interest income $ 518 $491 $494 $486 $514 5 % 1 % $1,009 $1,003 1 %

Non-interest income 180 238 223 221 200 (24) (10) 418 387 8

Total net revenue^(6) 698 729 717 707 714 (4) (2) 1,427 1,390 3

Provision for credit losses 427 856 62 93 82 (50) ** 1,283 151 **

Non-interest expense 425 412 441 414 427 3 - 837 844 (1)

Income (loss) from continuing operations before income taxes(154) (539) 214 200 205 (71) ** (693) 395 **

Income tax provision (benefit) (36) (128) 50 46 48 (72) ** (164) 92 **

Income (loss) from continuing operations, net of tax $ (118) $(411) $164 $154 $157 (71) ** $(529) $303 **

Selected performance metrics:

Period-end loans held for investment $ 77,490 $81,160 $74,508 $73,659 $71,992 (5) 8 $77,490 $71,992 8

Average loans held for investment 79,759 76,442 74,189 72,507 71,997 4 11 78,101 71,719 9

Average yield on loans held for investment^(6)(7) 3.00 %3.88 %4.22 %4.45 %4.75 %(88)bps(175)bps3.43 %4.68 %(125)bps

Period-end deposits $ 35,669 $32,822 $32,134 $30,923 $30,761 9 % 16 % $35,669 $30,761 16 %

Average deposits 34,635 32,238 32,034 30,693 31,364 7 10 33,437 31,092 8

Average deposits interest rate 0.30 %0.89 %1.10 %1.25 %1.28 %(59)bps(98) bps0.58 %1.19 %(61) bps

Net charge-off rate 0.51 0.57 0.35 0.33 0.09 (6) 42 0.54 0.08 46

Nonperforming loan rate^(3) 0.85 0.61 0.60 0.61 0.50 24 35 0.85 0.50 35

Nonperforming asset rate^(4) 0.85 0.61 0.60 0.61 0.50 24 35 0.85 0.50 35

Risk category:^(12)

Noncriticized $ 70,881 $77,714 $71,848 $71,144 $69,390 (9) % 2 % $70,881 $69,390 2 %

Criticized performing 5,949 2,952 2,181 2,035 2,211 102 169 5,949 2,211 169

Criticized nonperforming 660 494 448 449 360 34 83 660 360 83

PCI loans - - 31 31 31 - ** - 31 **

Total commercial banking loans $ 77,490 $81,160 $74,508 $73,659 $71,992 (5) 8 $77,490 $71,992 8

Risk category as a percentage of period-end loans held for investment:^(12)

Noncriticized 91.4 %95.8 %96.5 %96.6 %96.4 %(4) (5) 91.4 %96.4 %(5)

Criticized performing 7.7 3.6 2.9 2.8 3.1 4 5 7.7 3.1 5

Criticized nonperforming 0.9 0.6 0.6 0.6 0.5 30 bps40 bps0.9 0.5 40 bps

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



2020 Q2 vs. Six Months Ended June 30,

2020 2020 2019 2019 2019 2020 2019 2020 vs.

(Dollars in millions) Q2 Q1 Q4 Q3 Q2 Q1 Q2 2020 2019 2019

Other

Earnings:

Net interest income (loss) $(92) $175 $116 $23 $(8) ** ** $83 $25 **

Non-interest loss (26) (51) (44) (34) (26) (49)%- (77) (31) 148 %

Total net revenue (loss)^(6) (118) 124 72 (11) (34) ** ** 6 (6) **

Provision (benefit) for credit losses (1) 5 - - - ** ** 4 - **

Non-interest expense^(13)(14) 340 118 123 113 97 188 ** 458 186 146

Income (loss) from continuing operations before income taxes(457) 1 (51) (124) (131) ** ** (456) (192) 138

Income tax benefit (305) (113) (78) (60) (109) 170 180 %(418) (215) 94

Income (loss) from continuing operations, net of tax $(152) $114 $27 $(64) $(22) ** ** $(38) $23 **

Selected performance metrics:

Period-end deposits $21,765 $19,260 $17,464 $19,802 $18,554 13 17 $21,765 $18,554 17

Average deposits 21,416 17,344 18,223 19,456 18,106 23 18 19,379 18,809 3

Total

Earnings:

Net interest income $5,460 $6,025 $6,066 $5,737 $5,746 (9) %(5) %$11,485 $11,537 -

Non-interest income 1,096 1,224 1,361 1,222 1,378 (10) (20) 2,320 2,670 (13) %

Total net revenue 6,556 7,249 7,427 6,959 7,124 (10) (8) 13,805 14,207 (3)

Provision for credit losses 4,246 5,423 1,818 1,383 1,342 (22) ** 9,669 3,035 **

Non-interest expense 3,770 3,729 4,161 3,872 3,779 1 - 7,499 7,450 1

Income (loss) from continuing operations before income taxes(1,460) (1,903) 1,448 1,704 2,003 (23) ** (3,363) 3,722 **

Income tax provision (benefit) (543) (563) 270 375 387 (4) ** (1,106) 696 **

Income (loss) from continuing operations, net of tax $(917) $(1,340)$1,178 $1,329 $1,616 (32) ** $(2,257)$3,026 **

Selected performance metrics:

Period-end loans held for investment $251,512$262,990$265,809$249,355$244,460(4) 3 $251,512$244,4603

Average loans held for investment 253,358 262,889 258,870 246,147 242,653 (4) 4 258,124 242,307 7

Period-end deposits 304,238 269,689 262,697 257,148 254,535 13 20 304,238 254,535 20

Average deposits 288,344 264,653 260,040 255,082 253,634 9 14 276,498 252,528 9

CAPITAL ONE FINANCIAL CORPORATION (COF)

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



Concurrent with our adoption of the CECL standard in the first quarter of 2020, ^(1) we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment.

^(2) Metrics for Q2 2020 and Q1 2020 include the impact of COVID-19 customer assistance programs where applicable.

Nonperforming loan rates are calculated based on nonperforming loans for each ^(3) 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 calculated ^(4) based on total nonperforming assets divided by the combined period-end total loans held for investment, repossessed assets and other foreclosed assets.

^(5) 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 revenue ^(6) 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 on loans held for investment is calculated based on annualized interest income for the period divided by average loans held for investment ^(7) 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.

Total net revenue margin is calculated based on annualized total net revenue ^(8) for the period divided by average loans held for investment during the period for the respective loan category.

^(9) Purchase volume consists of purchase transactions, net of returns, for the 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 origination and are refreshed monthly thereafter. We approximate non-FICO credit scores ^(10) 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 ^(11)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.

^(12)Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.

^(13)Includes charges incurred as a result of restructuring activities.

Includes net Cybersecurity Incident expenses of $11 million in Q2 2020, $4 ^(14)million in Q1 2020, $16 million in Q4 2019 and $22 million in Q3 2019, respectively.

** 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) June 30, March 31, December 31, September 30, June 30, 2020 2020 2019 2019 2019

Regulatory Capital Metrics

Common equity excluding AOCI $50,614 $51,018 $ 52,001 $ 51,959 $51,236

Adjustments:

AOCI, net of tax^(2) (145) (170) 1,156 453 170

Goodwill, net of related deferred tax liabilities (14,449) (14,453) (14,465) (14,439) (14,365)

Intangible assets, net of related deferred tax liabilities(135) (151) (170) (180) (194)

Other^(2) - - (360) (588) (401)

Common equity Tier 1 capital $35,885 $36,244 $ 38,162 $ 37,205 $36,446

Tier 1 capital $41,094 $41,453 $ 43,015 $ 43,028 $40,806

Total capital^(3) 48,506 48,775 50,350 50,174 47,919

Risk-weighted assets 290,062 302,871 313,155 298,130 295,255

Adjusted average assets^(4) 398,062 377,360 368,511 360,266 356,518

Capital Ratios

Common equity Tier 1 capital^(5) 12.4 %12.0 %12.2 % 12.5 % 12.3 %

Tier 1 capital^(6) 14.2 13.7 13.7 14.4 13.8

Total capital^(7) 16.7 16.1 16.1 16.8 16.2

Tier 1 leverage^(4) 10.3 11.0 11.7 11.9 11.4

Tangible common equity ("TCE")^(8) 8.8 9.6 10.2 10.3 10.2

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.



2020 2020 Six Months Ended

Q2 Q1 June 30, 2020

(Dollars in millions, except per share data and as noted) Reported Adj.^(9) Adjusted Reported Adj.^(9) Adjusted Reported Adj.^(9) Adjusted Results Results Results Results Results Results

Selected income statement data:

Net interest income $5,460 - $5,460 $6,025 - $6,025 $11,485 - $11,485

Non-interest income 1,096 - 1,096 1,224 - 1,224 2,320 - 2,320

Total net revenue 6,556 - 6,556 7,249 - 7,249 13,805 - 13,805

Provision for credit losses 4,246 - 4,246 5,423 - 5,423 9,669 - 9,669

Non-interest expense 3,770 $(276) 3,494 3,729 $(49) 3,680 7,499 $(325) 7,174

Income (loss) from continuing operations before income taxes (1,460) 276 (1,184) (1,903) 49 (1,854) (3,363) 325 (3,038)

Income tax provision (benefit) (543) 3 (540) (563) 12 (551) (1,106) 15 (1,091)

Income (loss) from continuing operations, net of tax (917) 273 (644) (1,340) 37 (1,303) (2,257) 310 (1,947)

Income (loss) from discontinued operations, net of tax (1) - (1) - - - (1) - (1)

Net income (loss) (918) 273 (645) (1,340) 37 (1,303) (2,258) 310 (1,948)

Dividends and undistributed earnings allocated to participating securities^(10) (1) - (1) (3) - (3) (4) - (4)

Preferred stock dividends (90) - (90) (55) - (55) (145) - (145)

Issuance cost for redeemed preferred stock - - - (22) - (22) (22) - (22)

Net income (loss) available to common stockholders $(1,009) $273 $(736) $(1,420) $37 $(1,383) $(2,429) $310 $(2,119)

Selected performance metrics:

Diluted EPS^(10) $(2.21) $0.60 $(1.61) $(3.10) $0.08 $(3.02) $(5.31) $0.67 $(4.64)

Efficiency ratio 57.50 %(421) bps 53.29 %51.44 %(67) bps 50.77 %54.32 %(235) bps 51.97 %

Operating efficiency ratio 53.34 (421) 49.13 44.67 (68) 43.99 48.79 (236) 46.43





2019 2019 Six Months Ended

Q2 Q1 June 30, 2019

(Dollars in millions, except per share data and as noted) Reported Adj.^(9) Adjusted Reported Adj.^(9) Adjusted Reported Adj.^(9) Adjusted Results Results Results Results Results Results

Selected income statement data:

Net interest income $5,746 - $5,746 $5,791 - $5,791 $11,537 - $11,537

Non-interest income 1,378 $1 1,379 1,292 - 1,292 2,670 $1 2,671

Total net revenue 7,124 1 7,125 7,083 - 7,083 14,207 1 14,208

Provision for credit losses 1,342 - 1,342 1,693 - 1,693 3,035 - 3,035

Non-interest expense 3,779 (81) 3,698 3,671 $(25) 3,646 7,450 (106) 7,344

Income from continuing operations before income taxes 2,003 82 2,085 1,719 25 1,744 3,722 107 3,829

Income tax provision 387 19 406 309 6 315 696 25 721

Income from continuing operations, net of tax 1,616 63 1,679 1,410 19 1,429 3,026 82 3,108

Income from discontinued operations, net of tax 9 - 9 2 - 2 11 - 11

Net income 1,625 63 1,688 1,412 19 1,431 3,037 82 3,119

Dividends and undistributed earnings allocated to participating securities^(10) (12) (1) (13) (12) - (12) (24) (1) (25)

Preferred stock dividends (80) - (80) (52) - (52) (132) - (132)

Net income available to common stockholders $1,533 $62 $1,595 $1,348 $19 $1,367 $2,881 $81 $2,962

Selected performance metrics:

Diluted EPS^(10) $3.24 $0.13 $3.37 $2.86 $0.04 $2.90 $6.10 $0.17 $6.27

Efficiency ratio 53.05 %(115) bps 51.90 %51.83 %(35) bps 51.48 %52.44 %(75) bps 51.69 %

Operating efficiency ratio 45.38 (114) 44.24 44.53 (35) 44.18 44.96 (75) 44.21

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.



2020 2020 2019 2019 2019

(Dollars in millions) Q2 Q1 Q4 Q3 Q2

Tangible Common Equity (Period-End)

Stockholders' equity $ 56,045 $ 56,830 $ 58,011 $ 58,235 $ 55,767

Goodwill and intangible assets^(11) (14,869) (14,888) (14,932) (14,940) (14,886)

Noncumulative perpetual preferred stock (5,209) (5,209) (4,853) (5,823) (4,360)

Tangible common equity $ 35,967 $ 36,733 $ 38,226 $ 37,472 $ 36,521

Tangible Common Equity (Average)

Stockholders' equity $ 57,623 $ 58,568 $ 58,148 $ 57,245 $ 54,570

Goodwill and intangible assets^(11) (14,880) (14,930) (14,967) (14,908) (14,900)

Noncumulative perpetual preferred stock (5,209) (5,382) (5,506) (4,678) (4,360)

Tangible common equity $ 37,534 $ 38,256 $ 37,675 $ 37,659 $ 35,310

Tangible Assets (Period-End)

Total assets $ 421,296 $ 396,878 $ 390,365 $ 378,810 $ 373,619

Goodwill and intangible assets^(11) (14,869) (14,888) (14,932) (14,940) (14,886)

Tangible assets $ 406,427 $ 381,990 $ 375,433 $ 363,870 $ 358,733

Tangible Assets (Average)

Total assets $ 411,075 $ 390,380 $ 383,162 $ 374,905 $ 371,095

Goodwill and intangible assets^(11) (14,880) (14,930) (14,967) (14,908) (14,900)

Tangible assets $ 396,195 $ 375,450 $ 368,195 $ 359,997 $ 356,195



__________

(1) Regulatory capital metrics and capital ratios as of June 30, 2020 are preliminary and therefore subject to change.

(2) In the first quarter of 2020, we elected to exclude from our regulatory capital ratios certain components of AOCI as permitted under the Tailoring Rules. As such, we revised our presentation herein to only include those components of AOCI that impact our regulatory capital ratios.

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

(4) 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.

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

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

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

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

(9) The adjustments for the following periods consist of:



2020 2020 Six Months Ended 2019 2019 Six Months Ended

(Dollars in millions) Q2 Q1 June 30, 2020 Q2 Q1 June 30, 2019

Legal reserve builds $ 265 $ 45 $ 310 - - -

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

Walmart launch and related integration expenses - - - $ 54 $ 25 $ 79

Restructuring charges - - - 28 - 28

Total 276 49 325 82 25 107

Income tax provision 3 12 15 19 6 25

Net income $ 273 $ 37 $ 310 $ 63 $ 19 $ 82



^(10) 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.

^(11) Includes impact of related deferred taxes.

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SOURCE Capital One Financial Corporation