2015-01-22 | Capital One Reports Fourth Quarter 2014 Net Income of $999 million, or $1.73 per share | NYSE:COF

MCLEAN, Va., Jan. 22, 2015 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2014 of $999 million, or $1.73 per diluted common share, compared to the third quarter of 2014 with net income of $1.1 billion, or $1.86 per diluted common share, and the fourth quarter of 2013 with net income of $852 million, or $1.43 per diluted common share.

"2014 was a strong year for Capital One. We returned to growth in our Domestic Card business, delivered $10.1 billion in pre-provision earnings, and returned significant capital to our shareholders. We're poised to build on the momentum in 2015," said Richard D. Fairbank, Chairman and Chief Executive Officer. "Our strategic priorities for 2015 have not changed, and we remain focused on the levers to create value and sustain strong performance for our shareholders."

All comparisons below are for the full year of 2013 compared to the full year of 2014 unless otherwise noted.

2014 Full Year Income Summary:

Total net revenue remained flat at $22.3 billion.
Total non-interest expense decreased 1 percent to $12.2 billion.
Pre-provision earnings increased 1 percent to $10.1 billion.
Provision for credit losses increased 3 percent to $3.5 billion.

All comparisons below are for the fourth quarter of 2014 compared to the third quarter of 2014 unless otherwise noted.

Fourth Quarter 2014 Income Summary:

Total net revenue increased 3 percent to $5.8 billion.
Total non-interest expense increased 10 percent to $3.3 billion:
- 30 percent increase in marketing
- 8 percent increase in operating expense
Pre-provision earnings decreased 5 percent to $2.5 billion.
Provision for credit losses increased 12 percent to $1.1 billion.
Mortgage representation & warranty benefit of $41 million ($26 million net of tax) in discontinued operations.

Fourth Quarter 2014 Balance Sheet Summary:

Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.4 percent at December 31, 2014.
Net interest margin of 6.81 percent, up 12 basis points.
Period-end loans held for investment in the quarter increased $6.7 billion, or 3 percent, to $208.3 billion.
- Domestic Card period-end loans increased $4.6 billion, or 6 percent, to $77.7 billion.
- Commercial Banking period-end loans increased $1.1 billion, or 2 percent, to $50.9 billion.
- Consumer Banking period-end loans increased $378 million, or 1 percent, to $71.4 billion:
  - Auto period-end loans increased $1.6 billion, or 4 percent, to $37.8 billion.
  - Home loans period-end loans decreased $1.2 billion, or 4 percent, to $30.0 billion, driven by run-off of acquired portfolios.
Average loans held for investment in the quarter increased $4.0 billion, or 2 percent, to $203.4 billion.
- Domestic Card average loans increased $2.2 billion, or 3 percent, to $74.0 billion.
- Commercial Banking average loans increased $1.6 billion, or 3 percent, to $50.3 billion.
- Consumer Banking average loans increased $206 million, or less than 1 percent, to $71.3 billion:
  - Auto average loans increased $1.5 billion, or 4 percent, to $37.1 billion.
  - Home loans average loans decreased by $1.3 billion, or 4 percent, to $30.6 billion, driven by run-off of acquired portfolios.
Period-end total deposits increased $1.3 billion, or less than 1 percent, to $205.5 billion, while average deposits increased $156 million to $205.4 billion.
Interest-bearing deposit rate remained flat at 0.60 percent.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 22, 2015, at 5:00 PM, Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Choose "About us", then choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through January 31, 2015 at 5:00 PM, Eastern Time.

Forward-Looking Statements

Certain statements in this release are forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2013.

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 $205.5 billion in deposits and $308.9 billion in total assets as of December 31, 2014. 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, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

Exhibit 99.2
Capital One Financial Corporation
Financial Supplement
Fourth Quarter 2014⁽¹⁾⁽²⁾
Table of Contents



Capital One Financial Corporation Consolidated Results
	Table 1:	Financial Summary—Consolidated
	Table 2:	Selected Metrics—Consolidated
	Table 3:	Consolidated Statements of Income
	Table 4:	Consolidated Balance Sheets
	Table 5:	Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1—4)
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin
	Table 7:	Loan Information and Performance Statistics
Business Segments Detail
	Table 8:	Financial Summary—Business Segments
	Table 9:	Financial & Statistical Summary—Credit Card Business
	Table 10:	Financial & Statistical Summary—Consumer Banking Business
	Table 11:	Financial & Statistical Summary—Commercial Banking Business
	Table 12:	Financial & Statistical Summary—Other and Total
	Table 13:	Notes to Loan and Business Segments Disclosures (Tables 7—12)
Other
	Table 14:	Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures


⁽¹⁾	The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Annual Report on Form 10-K for the period ended December 31, 2014 once it is filed with the Securities and Exchange Commission.

⁽²⁾	We adopted ASU 2014-01 "Accounting for Investments in Qualified Affordable Housing Projects" as of January 1, 2014. Prior period results and related metrics have been recast to conform to this presentation.

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

											2014 Q4 vs.				Year Ended				2014
(Dollars in millions, except per share data and as noted) (unaudited)	2014		2014		2014		2014		2013		2014		2013		2014		2013		vs.
	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2014		2013		2013
Earnings
Net interest income	$	4,656	$	4,497	$	4,315	$	4,350	$	4,423	4	%	5	%	$	17,818	$	18,106	(2)	%
Non-interest income⁽²⁾	1,157		1,142		1,153		1,020		1,121		1		3		4,472		4,278		5
Total net revenue⁽³⁾	5,813		5,639		5,468		5,370		5,544		3		5		22,290		22,384		—
Provision for credit losses	1,109		993		704		735		957		12		16		3,541		3,453		3
Non-interest expense:
Marketing	509		392		335		325		427		30		19		1,561		1,373		14
Amortization of intangibles	123		130		136		143		166		(5)		(26)		532		671		(21)
Acquisition-related⁽⁴⁾	10		13		18		23		60		(23)		(83)		64		193		(67)
Operating expenses	2,642		2,450		2,490		2,441		2,582		8		2		10,023		10,116		(1)
Total non-interest expense	3,284		2,985		2,979		2,932		3,235		10		2		12,180		12,353		(1)
Income from continuing operations before income taxes	1,420		1,661		1,785		1,703		1,352		(15)		5		6,569		6,578		—
Income tax provision	450		536		581		579		477		(16)		(6)		2,146		2,224		(4)
Income from continuing operations, net of tax	970		1,125		1,204		1,124		875		(14)		11		4,423		4,354		2
Income (loss) from discontinued operations, net of tax⁽²⁾	29		(44)		(10)		30		(23)		**		**		5		(233)		**
Net income	999		1,081		1,194		1,154		852		(8)		17		4,428		4,121		7
Dividends and undistributed earnings allocated to participating securities⁽⁵⁾	(4)		(5)		(4)		(5)		(4)		(20)		—		(18)		(17)		6
Preferred stock dividends⁽⁵⁾	(21)		(20)		(13)		(13)		(13)		5		62		(67)		(53)		26
Net income available to common stockholders	$	974	$	1,056	$	1,177	$	1,136	$	835	(8)		17		$	4,343	$	4,051	7
Common Share Statistics
Basic earnings per common share:⁽⁵⁾
Net income from continuing operations	$	1.71	$	1.97	$	2.09	$	1.94	$	1.50	(13)	%	14	%	$	7.70	$	7.39	4	%
Income (loss) from discontinued operations	0.05		(0.08)		(0.02)		0.05		(0.04)		**		**		0.01		(0.40)		**
Net income per basic common share	$	1.76	$	1.89	$	2.07	$	1.99	$	1.46	(7)		21		$	7.71	$	6.99	10
Diluted earnings per common share:⁽⁵⁾
Net income from continuing operations	$	1.68	$	1.94	$	2.06	$	1.91	$	1.46	(13)		15		$	7.58	$	7.28	4
Income (loss) from discontinued operations	0.05		(0.08)		(0.02)		0.05		(0.03)		**		**		0.01		(0.39)		**
Net income per diluted common share	$	1.73	$	1.86	$	2.04	$	1.96	$	1.43	(7)		21		$	7.59	$	6.89	10
Weighted-average common shares outstanding (in millions) for:
Basic common shares	554.3		559.9		567.5		571.0		573.4		(1)		(3)		563.1		579.7		(3)
Diluted common shares	561.8		567.9		577.6		580.3		582.6		(1)		(4)		571.9		587.6		(3)
Common shares outstanding (period end, in millions)	553.4		558.5		561.8		572.9		572.7		(1)		(3)		553.4		572.7		(3)
Dividends per common share	$	0.30	$	0.30	$	0.30	$	0.30	$	0.30	—		—		$	1.20	$	0.95	26
Tangible book value per common share (period end)⁽⁶⁾	50.32		48.72		47.90		45.88		43.64		3		15		50.32		43.64		15
Balance Sheet (Period End)
Loans held for investment⁽⁷⁾	$	208,316	$	201,592	$	198,528	$	192,941	$	197,199	3	%	6	%	$	208,316	$	197,199	6	%
Interest-earning assets	277,849		270,001		266,720		259,422		265,170		3		5		277,849		265,170		5
Total assets	308,854		300,202		298,317		290,500		296,933		3		4		308,854		296,933		4
Interest-bearing deposits	180,467		178,876		180,970		184,214		181,880		1		(1)		180,467		181,880		(1)
Total deposits	205,548		204,264		205,890		208,324		204,523		1		1		205,548		204,523		1
Borrowings	48,457		42,243		39,114		30,118		40,654		15		19		48,457		40,654		19
Common equity	43,231		42,682		42,477		41,948		40,779		1		6		43,231		40,779		6
Total stockholders' equity	45,053		44,018		43,815		42,801		41,632		2		8		45,053		41,632		8
Balance Sheet (Average Balances)
Loans held for investment⁽⁷⁾	$	203,436	$	199,422	$	194,996	$	193,722	$	192,813	2	%	6	%	$	197,925	$	192,614	3	%
Interest-earning assets	273,436		268,890		263,570		262,659		262,957		2		4		267,174		266,423		—
Total assets	304,711		299,523		294,744		294,275		294,040		2		4		298,300		297,264		—
Interest-bearing deposits	179,401		179,928		182,053		184,183		184,206		—		(3)		181,036		187,700		(4)
Total deposits	205,355		205,199		206,315		205,842		205,706		—		—		205,675		209,045		(2)
Borrowings	43,479		40,314		35,658		35,978		36,463		8		19		38,882		37,807		3
Common equity	43,895		43,489		42,797		42,006		41,502		1		6		43,055		40,629		6
Total stockholders' equity	45,576		44,827		43,767		42,859		42,355		2		8		44,268		41,482		7

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 2: Selected Metrics—Consolidated⁽¹⁾

																2014 Q4 vs.				Year Ended						2014
(Dollars in millions) (unaudited)	2014			2014			2014			2014			2013			2014		2013		2014			2013			vs.
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2014			2013			2013
Performance Metrics
Net interest income growth (quarter over quarter/ year over year)	4		%	4		%	(1)		%	(2)		%	(3)		%	**		**		(2)		%	9		%	**
Non-interest income growth (quarter over quarter/ year over year)	1			(1)			13			(9)			3			**		**		5			(11)			**
Total net revenue growth (quarter over quarter/ year over year)	3			3			2			(3)			(2)			**		**		0			5			**
Total net revenue margin⁽⁸⁾	8.50			8.39			8.30			8.18			8.43			11	bps	7	bps	8.34			8.40			(6)	bps
Net interest margin⁽⁹⁾	6.81			6.69			6.55			6.62			6.73			12		8		6.67			6.80			(13)
Return on average assets	1.27			1.50			1.63			1.53			1.19			(23)		8		1.48			1.46			2
Return on average tangible assets⁽¹⁰⁾	1.34			1.58			1.73			1.61			1.26			(24)		8		1.56			1.55			1
Return on average common equity⁽¹¹⁾	8.61			10.12			11.09			10.53			8.27			(151)		34		10.08			10.54			(46)
Return on average tangible common equity⁽¹²⁾	13.28			15.73			17.47			16.83			13.38			(245)		(10)		15.79			17.35			(156)
Non-interest expense as a % of average loans held for investment	6.46			5.99			6.11			6.05			6.71			47		(25)		6.15			6.41			(26)
Efficiency ratio⁽¹³⁾	56.49			52.93			54.48			54.60			58.35			356		(186)		54.64			55.19			(55)
Effective income tax rate for continuing operations	31.7			32.3			32.5			34.0			35.3			(60)		(360)		32.7			33.8			(110)
Employees (in thousands), period end⁽¹⁴⁾	46.0			44.9			44.6			44.9			45.4			2	%	1	%	46.0			45.4			1	%
Credit Quality Metrics⁽⁷⁾
Allowance for loan and lease losses	$	4,383		$	4,212		$	3,998		$	4,098		$	4,315		4	%	2	%	$	4,383		$	4,315		2	%
Allowance as a % of loans held for investment	2.10		%	2.09		%	2.01		%	2.12		%	2.19		%	1	bps	(9)	bps	2.10		%	2.19		%	(9)	bps
Allowance as a % of loans held for investment (excluding acquired loans)	2.36			2.37			2.30			2.45			2.54			(1)		(18)		2.36			2.54			(18)
Net charge-offs	$	915		$	756		$	812		$	931		$	969		21	%	(6)	%	$	3,414		$	3,934		(13)	%
Net charge-off rate⁽¹⁵⁾	1.80		%	1.52		%	1.67		%	1.92		%	2.01		%	28	bps	(21)	bps	1.72		%	2.04		%	(32)	bps
Net charge-off rate (excluding acquired loans)⁽¹⁵⁾	2.04			1.73			1.93			2.24			2.37			31		(33)		1.98			2.45			(47)
30+ day performing delinquency rate	2.62			2.46			2.24			2.22			2.63			16		(1)		2.62			2.63			(1)
30+ day performing delinquency rate (excluding acquired loans)	2.95			2.81			2.58			2.59			3.08			14		(13)		2.95			3.08			(13)
30+ day delinquency rate	2.91			2.76			2.53			2.51			2.96			15		(5)		2.91			2.96			(5)
30+ day delinquency rate (excluding acquired loans)	3.28			3.14			2.91			2.93			3.46			14		(18)		3.28			3.46			(18)
Capital Ratios⁽¹⁶⁾
Common equity Tier 1 capital ratio	12.4		%	12.7		%	12.7		%	13.0		%	N/A			(30)	bps	N/A		12.4		%	N/A			N/A
Tier 1 common ratio	N/A			N/A			N/A			N/A			12.2		%	N/A		N/A		N/A			12.2		%	N/A
Tier 1 risk-based capital ratio	13.2		%	13.3		%	13.3		%	13.4		%	12.6			(10)	bps	60	bps	13.2		%	12.6			60	bps
Total risk-based capital ratio	15.1			15.2			15.4			15.4			14.7			(10)		40		15.1			14.7			40
Tier 1 leverage ratio	10.8			10.6			10.7			10.4			10.1			20		70		10.8			10.1			70
Tangible common equity ("TCE") ratio⁽¹⁷⁾	9.5			9.6			9.5			9.6			8.9			(10)		60		9.5			8.9			60

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

	Three Months Ended						2014 Q4 vs.				Year Ended				2014
	2014		2014		2013		2014		2013		2014		2013		vs.
(Dollars in millions, except per share data and as noted) (unaudited)	Q4		Q3		Q4		Q3		Q4		2014		2013		2013
Interest income:
Loans, including loans held for sale	$	4,613	$	4,463	$	4,398	3	%	5	%	$	17,662	$	18,222	(3)	%
Investment securities	405		398		414		2		(2)		1,628		1,575		3
Other	27		26		27		4		—		107		101		6
Total interest income	5,045		4,887		4,839		3		4		19,397		19,898		(3)
Interest expense:
Deposits	269		271		288		(1)		(7)		1,088		1,241		(12)
Securitized debt obligations	36		32		40		13		(10)		145		183		(21)
Senior and subordinated notes	73		71		75		3		(3)		299		315		(5)
Other borrowings	11		16		13		(31)		(15)		47		53		(11)
Total interest expense	389		390		416		—		(6)		1,579		1,792		(12)
Net interest income	4,656		4,497		4,423		4		5		17,818		18,106		(2)
Provision for credit losses	1,109		993		957		12		16		3,541		3,453		3
Net interest income after provision for credit losses	3,547		3,504		3,466		1		2		14,277		14,653		(3)
Non-interest income:⁽²⁾
Service charges and other customer-related fees	462		471		504		(2)		(8)		1,867		2,118		(12)
Interchange fees, net	523		523		489		—		7		2,021		1,896		7
Net other-than-temporary impairment recognized in earnings	(9)		(9)		(1)		—		**		(24)		(41)		(41)
Other	181		157		129		15		40		608		305		99
Total non-interest income	1,157		1,142		1,121		1		3		4,472		4,278		5
Non-interest expense:
Salaries and associate benefits	1,179		1,128		1,115		5		6		4,593		4,480		3
Occupancy and equipment	474		419		437		13		8		1,745		1,541		13
Marketing	509		392		427		30		19		1,561		1,373		14
Professional services	329		304		357		8		(8)		1,216		1,347		(10)
Communications and data processing	203		196		220		4		(8)		798		897		(11)
Amortization of intangibles	123		130		166		(5)		(26)		532		671		(21)
Other	467		416		513		12		(9)		1,735		2,044		(15)
Total non-interest expense	3,284		2,985		3,235		10		2		12,180		12,353		(1)
Income from continuing operations before income taxes	1,420		1,661		1,352		(15)		5		6,569		6,578		—
Income tax provision	450		536		477		(16)		(6)		2,146		2,224		(4)
Income from continuing operations, net of tax	970		1,125		875		(14)		11		4,423		4,354		2
Income (loss) from discontinued operations, net of tax⁽²⁾	29		(44)		(23)		**		**		5		(233)		**
Net income	999		1,081		852		(8)		17		4,428		4,121		7
Dividends and undistributed earnings allocated to participating securities⁽⁵⁾	(4)		(5)		(4)		(20)		—		(18)		(17)		6
Preferred stock dividends⁽⁵⁾	(21)		(20)		(13)		5		62		(67)		(53)		26
Net income available to common stockholders	$	974	$	1,056	$	835	(8)		17		$	4,343	$	4,051	7
Basic earnings per common share:⁽⁵⁾
Net income from continuing operations	$	1.71	$	1.97	$	1.50	(13)	%	14	%	$	7.70	$	7.39	4	%
Income (loss) from discontinued operations	0.05		(0.08)		(0.04)		**		**		0.01		(0.40)		**
Net income per basic common share	$	1.76	$	1.89	$	1.46	(7)		21		$	7.71	$	6.99	10
Diluted earnings per common share:⁽⁵⁾
Net income from continuing operations	$	1.68	$	1.94	$	1.46	(13)	%	15	%	$	7.58	$	7.28	4	%
Income (loss) from discontinued operations	0.05		(0.08)		(0.03)		**		**		0.01		(0.39)		**
Net income per diluted common share	$	1.73	$	1.86	$	1.43	(7)		21		$	7.59	$	6.89	10
Weighted average common shares outstanding (in millions):
Basic common shares	554.3		559.9		573.4		(1)		(3)		563.1		579.7		(3)
Diluted common shares	561.8		567.9		582.6		(1)		(4)		571.9		587.6		(3)
Dividends paid per common share	$	0.30	$	0.30	$	0.30	—		—		$	1.20	$	0.95	26

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

							December 31, 2014 vs.
(Dollars in millions) (unaudited)	December 31, 2014		September 30, 2014		December 31, 2013		September 30, 2014		December 31, 2013
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,147	$	2,652	$	2,821	19	%	12	%
Interest-bearing deposits with banks	4,095		3,212		3,131		27		31
Federal funds sold and securities purchased under agreements to resell	0		284		339		**		**
Total cash and cash equivalents	7,242		6,148		6,291		18		15
Restricted cash for securitization investors	234		405		874		(42)		(73)
Securities available for sale, at fair value	39,508		39,665		41,800		—		(5)
Securities held to maturity, at carrying value	22,500		22,182		19,132		1		18
Loans held for investment:
Unsecuritized loans held for investment	171,771		165,021		157,651		4		9
Restricted loans for securitization investors	36,545		36,571		39,548		—		(8)
Total loans held for investment	208,316		201,592		197,199		3		6
Allowance for loan and lease losses	(4,383)		(4,212)		(4,315)		4		2
Net loans held for investment	203,933		197,380		192,884		3		6
Loans held for sale, at lower of cost or fair value	626		427		218		47		187
Premises and equipment, net	3,685		3,752		3,839		(2)		(4)
Interest receivable	1,435		1,268		1,418		13		1
Goodwill	13,978		13,970		13,978		—		—
Other assets	15,713		15,005		16,499		5		(5)
Total assets	$	308,854	$	300,202	$	296,933	3		4

Liabilities:
Interest payable	$	317	$	249	$	307	27	%	3	%
Deposits:
Non-interest bearing deposits	25,081		25,388		22,643		(1)		11
Interest-bearing deposits	180,467		178,876		181,880		1		(1)
Total deposits	205,548		204,264		204,523		1		1
Securitized debt obligations	11,624		10,508		10,289		11		13
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	880		2,330		915		(62)		(4)
Senior and subordinated notes	18,684		18,534		13,134		1		42
Other borrowings	17,269		10,871		16,316		59		6
Total other debt	36,833		31,735		30,365		16		21
Other liabilities	9,479		9,428		9,817		1		(3)
Total liabilities	263,801		256,184		255,301		3		3

Stockholders' equity:
Preferred stock	0		0		0		—		—
Common stock	6		6		6		—		—
Additional paid-in capital, net	27,869		27,272		26,526		2		5
Retained earnings	23,973		23,162		20,292		4		18
Accumulated other comprehensive income ("AOCI")	(430)		(559)		(872)		(23)		(51)
Treasury stock, at cost	(6,365)		(5,863)		(4,320)		9		47
Total stockholders' equity	45,053		44,018		41,632		2		8
Total liabilities and stockholders' equity	$	308,854	$	300,202	$	296,933	3		4

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial & Selected Metrics and Consolidated Financial Statements (Tables 1 — 4)

^**	Not meaningful.
⁽¹⁾	Certain prior period amounts have been recast to conform to the current period presentation.
⁽²⁾	We recorded the following related to the mortgage representation and warranty reserve:



	2014		2014		2014		2014		2013
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4
(Benefit) provision for mortgage representation and warranty losses before income taxes:
Recorded in continuing operations	$	(11)	$	—	$	(29)	$	14	$	3
Recorded in discontinued operations	(41)		70		11		(47)		30
Total (benefit) provision for mortgage representation and warranty losses before income taxes	$	(52)	$	70	$	(18)	$	(33)	$	33


	Historically, the majority of the provision for representation and warranty losses is included net of tax in discontinued operations, with the remaining amount included before income taxes in non-interest income. The mortgage representation and warranty reserve was $731 million as of December 31, 2014, $1.1 billion as of September 30, 2014 and $1.2 billion as of December 31, 2013.
⁽³⁾	Total net revenue was reduced by $165 million in Q4 2014, $164 million in Q3 2014, $153 million in Q2 2014, $163 million in Q1 2014 and $185 million in Q4 2013 for the estimated uncollectible amount of billed finance charges and fees.

⁽⁴⁾	Acquisition-related costs include transaction costs, legal and other professional or consulting fees, restructuring costs, and integration expense.

⁽⁵⁾	Dividends and undistributed earnings allocated to participating securities, earnings per share, and preferred stock dividends are computed independently for each period. Accordingly, the sum of each quarter may not agree to the year-to-date total.

⁽⁶⁾	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information on tangible common equity.

⁽⁷⁾

Loans held for investment includes acquired loans. We use the term "acquired loans" to refer to a certain portion of the loans acquired in the following transactions: (i) the February 17, 2012 transaction where we acquired the assets and assumed the liabilities of substantially all of ING Direct; (ii) the February 29, 2009 Chevy Chase Bank acquisition; and (iii) May 1, 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States. These loans were recorded at fair value at acquisition and subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard formerly known as "SOP 03-3"). The table below presents amounts related to acquired loans accounted for under SOP 03-3:



	2014		2014		2014		2014		2013
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4
Acquired loans accounted for under SOP 03-3:
Period-end unpaid principal balance	$	24,473	$	25,726	$	27,117	$	28,549	$	29,761
Period-end loans held for investment	23,500		24,685		26,019		27,390		28,550
Average loans held for investment	23,907		25,104		26,491		27,760		29,055


⁽⁸⁾	Calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
⁽⁹⁾	Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
⁽¹⁰⁾	Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. Return on average tangible assets is a non-GAAP measure and See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
⁽¹¹⁾	Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average common equity for the period. Our calculation of return on average common equity may not be comparable to similarly titled measures reported by other companies.
⁽¹²⁾	Calculated based on the annualized sum of (i) income from continuing operations, net of tax; (ii) less dividends and undistributed earnings allocated to participating securities; (iii) less preferred stock dividends, for the period, divided by average tangible common equity for the period. Return on average tangible common equity is a non-GAAP measure and our calculation may not be comparable to similarly titled measures reported by other companies. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
⁽¹³⁾	Calculated based on total non-interest expense for the period divided by total net revenue for the period.
⁽¹⁴⁾	Effective Q2 2014, we changed our presentation from total full-time equivalent employees to total employees. All prior periods have been recast to conform to the current presentation.
⁽¹⁵⁾	Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
⁽¹⁶⁾	Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. We calculated regulatory capital measures for periods prior to Q1 2014 under Basel I. Ratios as of the end of Q4 2014 are preliminary and therefore subject to change. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.
⁽¹⁷⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.

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

	2014 Q4						2014 Q3						2013 Q4
	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
(Dollars in millions) (unaudited)	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans, including loans held for sale	$	204,137	$	4,613	9.04	%	$	200,066	$	4,463	8.92	%	$	193,368	$	4,398	9.10	%
Investment securities	62,952		405		2.57		62,582		398		2.54		62,919		414		2.63
Cash equivalents and other	6,347		27		1.70		6,242		26		1.67		6,670		27		1.62
Total interest-earning assets	$	273,436	$	5,045	7.38		$	268,890	$	4,887	7.27		$	262,957	$	4,839	7.36

Interest-bearing liabilities:
Interest-bearing deposits	$	179,401	$	269	0.60		$	179,928	$	271	0.60		$	184,206	$	288	0.63
Securitized debt obligations	11,479		36		1.25		10,110		32		1.27		9,873		40		1.62
Senior and subordinated notes	18,680		73		1.56		17,267		71		1.64		12,765		75		2.35
Other borrowings and liabilities	14,058		11		0.31		12,937		16		0.49		13,825		13		0.38
Total interest-bearing liabilities	$	223,618	$	389	0.70		$	220,242	$	390	0.71		$	220,669	$	416	0.75
Net interest income/spread			$	4,656	6.68				$	4,497	6.56				$	4,423	6.61
Impact of non-interest bearing funding					0.13						0.13						0.12
Net interest margin					6.81	%					6.69	%					6.73	%



	Year Ended December 31,
	2014						2013
	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
(Dollars in millions) (unaudited)	Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾		Average Balance		Interest Income/Expense⁽¹⁾		Yield/Rate⁽¹⁾
Interest-earning assets:
Loans, including loans held for sale	$	198,419	$	17,662	8.90	%	$	196,609	$	18,222	9.27	%
Investment securities	62,547		1,628		2.60		63,522		1,575		2.48
Cash equivalents and other	6,208		107		1.72		6,292		101		1.61
Total interest-earning assets	$	267,174	$	19,397	7.26		$	266,423	$	19,898	7.47

Interest-bearing liabilities:
Interest-bearing deposits	$	181,036	$	1,088	0.60		$	187,700	$	1,241	0.66
Securitized debt obligations	10,686		145		1.36		10,697		183		1.71
Senior and subordinated notes	16,543		299		1.81		12,440		315		2.53
Other borrowings and liabilities	12,325		47		0.38		14,670		53		0.36
Total interest-bearing liabilities	$	220,590	$	1,579	0.72		$	225,507	$	1,792	0.79
Net interest income/spread			$	17,818	6.54				$	18,106	6.68
Impact of non-interest bearing funding					0.13						0.12
Net interest margin					6.67	%					6.80	%


⁽¹⁾	Interest income and interest expense and the calculation of average yields on interest-earning assets and average rates on interest-bearing liabilities include the impact of hedge accounting.

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 7: Loan Information and Performance Statistics⁽¹⁾

																2014 Q4 vs.				Year Ended							2014
	2014			2014			2014			2014			2013			2014		2013		2014			2013				vs.
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2014			2013				2013
Period-end Loans Held For Investment
Credit card:
Domestic credit card	$	77,704		$	73,143		$	71,165		$	68,275		$	73,255		6	%	6	%	$	77,704		$	73,255			6	%
International credit card	8,172			7,488			7,853			7,575			8,050			9		2		8,172			8,050				2
Total credit card	85,876			80,631			79,018			75,850			81,305			7		6		85,876			81,305				6
Consumer banking:
Auto	37,824			36,254			34,792			33,080			31,857			4		19		37,824			31,857				19
Home loan	30,035			31,203			32,644			34,035			35,282			(4)		(15)		30,035			35,282				(15)
Retail banking	3,580			3,604			3,626			3,612			3,623			(1)		(1)		3,580			3,623				(1)
Total consumer banking	71,439			71,061			71,062			70,727			70,762			1		1		71,439			70,762				1
Commercial banking:
Commercial and multifamily real estate	23,137			22,895			22,040			21,256			20,750			1		12		23,137			20,750				12
Commercial and industrial	26,972			26,071			25,402			24,064			23,309			3		16		26,972			23,309				16
Total commercial lending	50,109			48,966			47,442			45,320			44,059			2		14		50,109			44,059				14
Small-ticket commercial real estate	781			822			879			910			952			(5)		(18)		781			952				(18)
Total commercial banking⁽²⁾	50,890			49,788			48,321			46,230			45,011			2		13		50,890			45,011				13
Other loans	111			112			127			134			121			(1)		(8)		111			121				(8)
Total loans held for investment⁽²⁾	$	208,316		$	201,592		$	198,528		$	192,941		$	197,199		3		6		$	208,316		$	197,199			6
Average Loans Held For Investment
Credit card:
Domestic credit card	$	74,026		$	71,784		$	69,376		$	69,810		$	70,368		3	%	5	%	$	71,262		$	71,234			—	%
International credit card	7,714			7,710			7,621			7,692			7,899			—		(2)		7,684			7,973				(4)
Total credit card	81,740			79,494			76,997			77,502			78,267			3		4		78,946			79,207				—
Consumer banking:
Auto	37,072			35,584			33,972			32,387			31,424			4		18		34,769			29,446				18
Home loan	30,604			31,859			33,299			34,646			35,974			(4)		(15)		32,589			39,322				(17)
Retail banking	3,578			3,605			3,613			3,630			3,635			(1)		(2)		3,606			3,699				(3)
Total consumer banking	71,254			71,048			70,884			70,663			71,033			—		—		70,964			72,467				(2)
Commercial banking:
Commercial and multifamily real estate	23,129			22,409			21,484			20,962			19,928			3		16		22,003			18,636				18
Commercial and industrial	26,409			25,512			24,611			23,541			22,445			4		18		25,028			21,062				19
Total commercial lending	49,538			47,921			46,095			44,503			42,373			3		17		47,031			39,698				18
Small-ticket commercial real estate	801			845			896			932			986			(5)		(19)		868			1,073				(19)
Total commercial banking	50,339			48,766			46,991			45,435			43,359			3		16		47,899			40,771				17
Other loans	103			114			124			122			154			(10)		(33)		116			169				(31)
Total average loans held for investment	$	203,436		$	199,422		$	194,996		$	193,722		$	192,813		2		6		$	197,925		$	192,614			3
Net Charge-off Rates
Credit card:
Domestic credit card		3.39	%		2.83	%		3.52	%		4.01	%		3.89	%	56	bps	(50)	bps		3.43	%	4.08		%	(65)		bps
International credit card		3.34			3.32			3.93			4.17			4.74		2		(140)			3.69		4.78			(109)
Total credit card		3.38			2.88			3.56			4.02			3.98		50		(60)			3.46		4.15			(69)
Consumer banking:
Auto		2.14			1.98			1.31			1.66			2.30		16		(16)			1.78		1.85			(7)
Home loan		0.07			0.02			0.05			0.06			0.03		5		4			0.05		0.04			1
Retail banking		1.28			1.36			0.70			0.95			1.09		(8)		19			1.07		1.46			(39)
Total consumer banking		1.20			1.07			0.69			0.84			1.09		13		11			0.95		0.85			10
Commercial banking:
Commercial and multifamily real estate		0.01			(0.10)			—			0.01			(0.11)		11		12			(0.02)		(0.04)			2
Commercial and industrial		0.10			(0.01)			0.04			0.03			0.04		11		6			0.04		0.07			(3)
Total commercial lending		0.06			(0.05)			0.02			0.02			(0.03)		11		9			0.01		0.02			(1)
Small-ticket commercial real estate		0.80			(0.01)			0.61			0.67			(0.81)		81		161			0.52		0.62			(10)
Total commercial banking		0.07			(0.05)			0.03			0.04			(0.05)		12		12			0.02		0.03			(1)
Other loans		0.47			(0.61)			2.18			(0.68)			4.68		108		(421)			0.36		11.34			**
Total net charge-offs		1.80			1.52			1.67			1.92			2.01		28		(21)			1.72		2.04			(32)
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card		3.27	%		3.21	%		2.83	%		3.02	%		3.43	%	6	bps	(16)	bps		3.27	%	3.43		%	(16)		bps
International credit card		2.94			3.34			3.40			3.59			3.71		(40)		(77)			2.94		3.71			(77)
Total credit card		3.24			3.22			2.89			3.08			3.46		2		(22)			3.24		3.46			(22)
Consumer banking:
Auto		6.57			6.14			5.77			5.29			6.85		43		(28)			6.57		6.85			(28)
Home loan		0.21			0.14			0.13			0.12			0.16		7		5			0.21		0.16			5
Retail banking		0.64			0.53			0.48			0.74			0.69		11		(5)			0.64		0.69			(5)
Total consumer banking		3.60			3.22			2.91			2.57			3.20		38		40			3.60		3.20			40
Nonperforming Assets Rates⁽³⁾
Credit card:
International credit card		0.86	%		0.98	%		1.03	%		1.07	%		1.10	%	(12)	bps	(24)	bps		0.86	%	1.10		%	(24)		bps
Total credit card		0.08			0.09			0.10			0.11			0.11		(1)		(3)			0.08		0.11			(3)
Consumer banking:
Auto⁽⁴⁾		1.00			0.94			0.88			0.81			1.11		6		(11)			1.00		1.11			(11)
Home loan		1.19			1.13			1.16			1.17			1.14		6		5			1.19		1.14			5
Retail banking		0.61			0.54			0.79			1.15			1.13		7		(52)			0.61		1.13			(52)
Total consumer banking		1.06			1.01			1.01			1.00			1.12		5		(6)			1.06		1.12			(6)
Commercial banking:
Commercial and multifamily real estate		0.27			0.29			0.32			0.31			0.29		(2)		(2)			0.27		0.29			(2)
Commercial and industrial		0.42			0.40			0.45			0.40			0.44		2		(2)			0.42		0.44			(2)
Total commercial lending		0.35			0.35			0.39			0.35			0.37		—		(2)			0.35		0.37			(2)
Small-ticket commercial real estate		0.96			0.42			1.40			0.73			0.43		54		53			0.96		0.43			53
Total commercial banking		0.36			0.35			0.41			0.36			0.37		1		(1)			0.36		0.37			(1)
Total nonperforming assets		0.54			0.53			0.55			0.54			0.58		1		(4)			0.54		0.58			(4)

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 8: Financial Summary—Business Segments⁽¹⁾

	Three Months Ended December 31, 2014										Year Ended December 31, 2014
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other		Total		Credit Card		Consumer Banking		Commercial Banking		Other
Earnings:
Net interest income	$	4,656	$	2,697	$	1,459	$	455	$	45	17,818		$	10,310	$	5,748	$	1,751	$	9
Non-interest income	1,157		841		185		132		(1)		4,472		3,311		684		450		27
Total net revenue⁽⁵⁾⁽⁶⁾	5,813		3,538		1,644		587		44		22,290		13,621		6,432		2,201		36
Provision (benefit) for credit losses	1,109		856		222		32		(1)		3,541		2,750		703		93		(5)
Non-interest expense	3,284		1,888		1,045		293		58		12,180		7,063		3,869		1,083		165
Income (loss) from continuing operations before income taxes	1,420		794		377		262		(13)		6,569		3,808		1,860		1,025		(124)
Income tax provision (benefit)	450		275		135		93		(53)		2,146		1,329		665		366		(214)
Income from continuing operations, net of tax	$	970	$	519	$	242	$	169	$	40	$	4,423	$	2,479	$	1,195	$	659	$	90

	Three Months Ended September 30, 2014
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other
Earnings:
Net interest income	$	4,497	$	2,627	$	1,425	$	439	$	6
Non-interest income	1,142		846		179		122		(5)
Total net revenue⁽⁵⁾⁽⁶⁾	5,639		3,473		1,604		561		1
Provision (benefit) for credit losses	993		787		198		9		(1)
Non-interest expense	2,985		1,730		956		268		31
Income (loss) from continuing operations before income taxes	1,661		956		450		284		(29)
Income tax provision (benefit)	536		332		161		102		(59)
Income from continuing operations, net of tax	$	1,125	$	624	$	289	$	182	$	30

	Three Months Ended December 31, 2013										Year Ended December 31, 2013
(Dollars in millions) (unaudited)	Total		Credit Card		Consumer Banking		Commercial Banking		Other		Total		Credit Card		Consumer Banking		Commercial Banking		Other
Earnings:
Net interest income (expense)	$	4,423	$	2,576	$	1,468	$	447	$	(68)	$	18,106	$	10,967	$	5,905	$	1,674	$	(440)
Non-interest income	1,121		833		195		131		(38)		4,278		3,320		749		395		(186)
Total net revenue (loss)⁽⁵⁾⁽⁶⁾	5,544		3,409		1,663		578		(106)		22,384		14,287		6,654		2,069		(626)
Provision (benefit) for credit losses	957		751		212		(6)		—		3,453		2,824		656		(24)		(3)
Non-interest expense	3,235		1,868		1,018		281		68		12,353		7,439		3,745		958		211
Income (loss) from continuing operations before income taxes	1,352		790		433		303		(174)		6,578		4,024		2,253		1,135		(834)
Income tax provision (benefit)	477		274		154		108		(59)		2,224		1,409		802		404		(391)
Income (loss) from continuing operations, net of tax	$	875	$	516	$	279	$	195	$	(115)	$	4,354	$	2,615	$	1,451	$	731	$	(443)

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 9: Financial & Statistical Summary—Credit Card Business⁽¹⁾

																2014 Q4 vs.				Year Ended						2014
	2014			2014			2014			2014			2013			2014		2013		2014			2013			vs.
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2014			2013			2013
Credit Card
Earnings:
Net interest income	$	2,697		$	2,627		$	2,461		$	2,525		$	2,576		3	%	5	%	$	10,310		$	10,967		(6)	%
Non-interest income	841			846			839			785			833			(1)		1		3,311			3,320			—
Total net revenue	3,538			3,473			3,300			3,310			3,409			2		4		13,621			14,287			(5)
Provision for credit losses	856			787			549			558			751			9		14		2,750			2,824			(3)
Non-interest expense	1,888			1,730			1,719			1,726			1,868			9		1		7,063			7,439			(5)
Income from continuing operations before income taxes	794			956			1,032			1,026			790			(17)		1		3,808			4,024			(5)
Income tax provision	275			332			364			358			274			(17)		—		1,329			1,409			(6)
Income from continuing operations, net of tax	$	519		$	624		$	668		$	668		$	516		(17)		1		$	2,479		$	2,615		(5)
Selected performance metrics:
Period-end loans held for investment	$	85,876		$	80,631		$	79,018		$	75,850		$	81,305		7	%	6	%	$	85,876		$	81,305		6	%
Average loans held for investment	81,740			79,494			76,997			77,502			78,267			3		4		78,946			79,207			—
Average yield on loans held for investment⁽⁷⁾⁽⁸⁾	14.61		%	14.65		%	14.22		%	14.43		%	14.64		%	(4)	bps	(3)	bps	14.48		%	15.37		%	(89)	bps
Total net revenue margin⁽⁹⁾	17.31			17.48			17.14			17.08			17.43			(17)		(12)		17.25			18.04			(79)
Net charge-off rate	3.38			2.88			3.56			4.02			3.98			50		(60)		3.46			4.15			(69)
30+ day performing delinquency rate	3.24			3.22			2.89			3.08			3.46			2		(22)		3.24			3.46			(22)
30+ day delinquency rate	3.30			3.29			2.97			3.16			3.54			1		(24)		3.30			3.54			(24)
Nonperforming loan rate	0.08			0.09			0.10			0.11			0.11			(1)		(3)		0.08			0.11			(3)
Card loan premium amortization and other intangible accretion⁽¹⁰⁾	$	11		$	18		$	31		$	37		$	39		(39)	%	(72)	%	$	97		$	198		(51)	%
PCCR intangible amortization	87			90			94			98			102			(3)		(15)		369			434			(15)
Purchase volume⁽¹¹⁾	63,484			57,474			56,358			47,434			54,245			10		17		224,750			201,074			12
Domestic Card
Earnings:
Net interest income	$	2,432		$	2,361		$	2,193		$	2,255		$	2,303		3	%	6	%	$	9,241		$	9,887		(7)	%
Non-interest income	768			763			768			702			747			1		3		3,001			2,957			1
Total net revenue	3,200			3,124			2,961			2,957			3,050			2		5		12,242			12,844			(5)
Provision for credit losses	765			738			504			486			679			4		13		2,493			2,502			—
Non-interest expense	1,676			1,530			1,513			1,545			1,664			10		1		6,264			6,645			(6)
Income from continuing operations before income taxes	759			856			944			926			707			(11)		7		3,485			3,697			(6)
Income tax provision	272			306			337			331			252			(11)		8		1,246			1,316			(5)
Income from continuing operations, net of tax	$	487		$	550		$	607		$	595		$	455		(11)		7		$	2,239		$	2,381		(6)
Selected performance metrics:
Period-end loans held for investment	$	77,704		$	73,143		$	71,165		$	68,275		$	73,255		6	%	6	%	$	77,704		$	73,255		6%
Average loans held for investment	74,026			71,784			69,376			69,810			70,368			3		5		71,262			71,234			—
Average yield on loans held for investment⁽⁷⁾⁽⁸⁾	14.43		%	14.46		%	13.95		%	14.19		%	14.44		%	(3)	bps	(1)	bps	14.26		%	15.27		%	(101)	bps
Total net revenue margin⁽⁹⁾	17.29			17.41			17.07			16.94			17.34			(12)		(5)		17.18			18.03			(85)
Net charge-off rate	3.39			2.83			3.52			4.01			3.89			56		(50)		3.43			4.08			(65)
30+ day performing delinquency rate	3.27			3.21			2.83			3.02			3.43			6		(16)		3.27			3.43			(16)
30+ day delinquency rate	3.27			3.21			2.83			3.02			3.43			6		(16)		3.27			3.43			(16)
Purchase volume⁽¹¹⁾	$	58,234		$	53,690		$	52,653		$	44,139		$	50,377		8	%	16	%	$	208,716		$	186,901		12%
International Card
Earnings:
Net interest income	$	265		$	266		$	268		$	270		$	273		—		(3)	%	$	1,069		$	1,080		(1)	%
Non-interest income	73			83			71			83			86			(12)		(15)		310			363			(15)
Total net revenue	338			349			339			353			359			(3)		(6)		1,379			1,443			(4)
Provision for credit losses	91			49			45			72			72			86		26		257			322			(20)
Non-interest expense	212			200			206			181			204			6		4		799			794			1
Income from continuing operations before income taxes	35			100			88			100			83			(65)		(58)		323			327			(1)
Income tax provision	3			26			27			27			22			(88)		(86)		83			93			(11)
Income from continuing operations, net of tax	$	32		$	74		$	61		$	73		$	61		(57)		(48)		$	240		$	234		3
Selected performance metrics:
Period-end loans held for investment	$	8,172		$	7,488		$	7,853		$	7,575		$	8,050		9	%	2	%	$	8,172		$	8,050		2	%
Average loans held for investment	7,714			7,710			7,621			7,692			7,899			—		(2)		7,684			7,973			(4)
Average yield on loans held for investment⁽⁸⁾	16.31		%	16.42		%	16.74		%	16.64		%	16.48		%	(11)	bps	(17)	bps	16.53		%	16.24		%	29	bps
Total net revenue margin	17.55			18.13			17.76			18.38			18.20			(58)		(65)		17.95			18.10			(15)
Net charge-off rate	3.34			3.32			3.93			4.17			4.74			2		(140)		3.69			4.78			(109)
30+ day performing delinquency rate	2.94			3.34			3.40			3.59			3.71			(40)		(77)		2.94			3.71			(77)
30+ day delinquency rate	3.60			4.08			4.20			4.41			4.56			(48)		(96)		3.60			4.56			(96)
Nonperforming loan rate	0.86			0.98			1.03			1.07			1.10			(12)		(24)		0.86			1.10			(24)
Purchase volume⁽¹¹⁾	$	5,250		$	3,784		$	3,705		$	3,295		$	3,868		39%		36	%	$	16,034		$	14,173		13	%

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

																2014 Q4 vs.				Year Ended					2014
	2014			2014			2014			2014			2013			2014		2013		2014			2013		vs.
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2014			2013		2013
Consumer Banking
Earnings:
Net interest income	$	1,459		$	1,425		$	1,431		$	1,433		$	1,468		2	%	(1)	%	$	5,748		$	5,905	(3)	%
Non-interest income	185			179			170			150			195			3		(5)		684			749		(9)
Total net revenue	1,644			1,604			1,601			1,583			1,663			2		(1)		6,432			6,654		(3)
Provision for credit losses	222			198			143			140			212			12		5		703			656		7
Non-interest expense	1,045			956			938			930			1,018			9		3		3,869			3,745		3
Income from continuing operations before income taxes	377			450			520			513			433			(16)		(13)		1,860			2,253		(17)
Income tax provision	135			161			186			183			154			(16)		(12)		665			802		(17)
Income from continuing operations, net of tax	$	242		$	289		$	334		$	330		$	279		(16)		(13)		$	1,195		$	1,451	(18)
Selected performance metrics:
Period-end loans held for investment	$	71,439		$	71,061		$	71,062		$	70,727		$	70,762		1 %		1 %		$	71,439		$	70,762	1	%
Average loans held for investment	71,254			71,048			70,884			70,663			71,033			—		—		70,964			$	72,467	(2)
Average yield on loans held for investment⁽⁸⁾	6.45		%	6.18		%	6.22		%	6.18		%	6.30		%	27	bps	15	bps	6.26		%	6.10%		16	bps
Auto loan originations	$	5,390		$	5,410		$	5,376		$	4,727		$	4,322		—		25	%	$	20,903		$	17,388	20	%
Period-end deposits	168,078			167,624			169,153			171,529			167,652			—		—		168,078			167,652		—
Average deposits	167,727			168,407			169,694			168,676			167,870			—		—		168,623			169,683		(1)
Average deposit interest rate	0.57		%	0.58		%	0.57		%	0.57		%	0.60		%	(1)	bps	(3)	bps	0.57		%	0.63%		(6)	bps
Core deposit intangible amortization	$	24		$	26		$	28		$	30		$	32		(8)	%	(25)	%	$	108		$	138	(22)	%
Net charge-off rate	1.20		%	1.07		%	0.69		%	0.84		%	1.09		%	13	bps	11	bps	0.95		%	0.85%		10	bps
30+ day performing delinquency rate	3.60			3.22			2.91			2.57			3.20			38		40		3.60			3.20		40
30+ day delinquency rate	4.23			3.82			3.49			3.14			3.89			41		34		4.23			3.89		34
Nonperforming loan rate	0.77			0.73			0.75			0.74			0.86			4		(9)		0.77			0.86		(9)
Nonperforming asset rate⁽³⁾	1.06			1.01			1.01			1.00			1.12			5		(6)		1.06			1.12		(6)

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 11: Financial & Statistical Summary—Commercial Banking Business⁽¹⁾

																2014 Q4 vs.				Year Ended						2014
	2014			2014			2014			2014			2013			2014		2013		2014			2013			vs.
(Dollars in millions) (unaudited)	Q4			Q3			Q2			Q1			Q4			Q3		Q4		2014			2013			2013
Commercial Banking
Earnings:
Net interest income	$	455		$	439		$	436		$	421		$	447		4	%	2	%	$	1,751		$	1,674		5	%
Non-interest income	132			122			109			87			131			8		1		450			395			14
Total net revenue⁽⁵⁾⁽⁶⁾	587			561			545			508			578			5		2		2,201			2,069			6
Provision (benefit) for credit losses	32			9			12			40			(6)			256		**		93			(24)			**
Non-interest expense	293			268			267			255			281			9		4		1,083			958			13
Income from continuing operations before income taxes	262			284			266			213			303			(8)		(14)		1,025			1,135			(10)
Income tax provision	93			102			95			76			108			(9)		(14)		366			404			(9)
Income from continuing operations, net of tax	$	169		$	182		$	171		$	137		$	195		(7)		(13)		$	659		$	731		(10)
Selected performance metrics:
Period-end loans held for investment	$	50,890		$	49,788		$	48,321		$	46,230		$	45,011		2	%	13	%	$	50,890		$	45,011		13	%
Average loans held for investment	50,339			48,766			46,991			45,435			43,359			3		16		47,899			40,771			17
Average yield on loans held for investment⁽⁶⁾⁽⁸⁾	3.33		%	3.39		%	3.50		%	3.47		%	3.92		%	(6)	bps	(59)	bps	3.42		%	3.88		%	(46)	bps
Period-end deposits	$	31,954		$	31,918		$	31,440		$	31,485		$	30,567		—	%	5	%	$	31,954		$	30,567		5	%
Average deposits	32,363			31,772			31,238			31,627			31,033			2		4		31,752			30,702			3
Average deposit interest rate	0.24		%	0.24		%	0.24		%	0.25		%	0.25		%	—	bps	(1)	bps	0.24		%	0.27		%	(3)	bps
Core deposit intangible amortization	$	5		$	5		$	5		$	6		$	6		—	%	(17)	%	21			27			(22)	%
Net charge-off (recovery) rate	0.07		%	(0.05)		%	0.03		%	0.04		%	(0.05)		%	12	bps	12	bps	0.02		%	0.03		%	(1)	bps
Nonperforming loan rate	0.34			0.32			0.38			0.33			0.33			2		1		0.34			0.33			1
Nonperforming asset rate⁽³⁾	0.36			0.35			0.41			0.36			0.37			1		(1)		0.36			0.37			(1)
Risk category:⁽¹²⁾
Noncriticized	$	49,284		$	48,408		$	46,881		$	45,103		$	43,823		2	%	12	%	$	49,284		$	43,823		12	%
Criticized performing	1,431			1,219			1,259			977			1,039			17		38		1,431			1,039			38
Criticized nonperforming	175			161			181			150			149			9		17		175			149			17
Total commercial loans	$	50,890		$	49,788		$	48,321		$	46,230		$	45,011		2		13		$	50,890		$	45,011		13
% of period-end commercial loans held for investment:
Noncriticized	96.9		%	97.3		%	97.0		%	97.5		%	97.4		%	(40)	bps	(50)	bps	96.9		%	97.4		%	(50)	bps
Criticized performing	2.8			2.4			2.6			2.2			2.3			40		50		2.8			2.3			50
Criticized nonperforming	0.3			0.3			0.4			0.3			0.3			—		—		0.3			0.3			—
Total commercial loans	100.0		%	100.0		%	100.0		%	100.0		%	100.0%		%	—		—		100.0		%	100.0		%	—

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 12: Financial & Statistical Summary—Other and Total⁽¹⁾

											2014 Q4 vs.				Year Ended				2014
	2014		2014		2014		2014		2013		2014		2013		2014		2013		vs.
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4		Q3		Q4		2014		2013		2013
Other
Earnings:
Net interest income (expense)	$	45	$	6	$	(13)	$	(29)	$	(68)	**		**		$	9	$	(440)	**
Non-interest income	(1)		(5)		35		(2)		(38)		(80)	%	(97)	%	27		(186)		**
Total net revenue (loss)⁽⁵⁾	44		1		22		(31)		(106)		**		**		36		(626)		**
Benefit for credit losses	(1)		(1)		—		(3)		—		—		—		(5)		(3)		67	%
Non-interest expense	58		31		55		21		68		87		(15)		165		211		(22)
Loss from continuing operations before income taxes	(13)		(29)		(33)		(49)		(174)		(55)		(93)		(124)		(834)		(85)
Income tax benefit	(53)		(59)		(64)		(38)		(59)		(10)		(10)		(214)		(391)		(45)
Income (loss) from continuing operations, net of tax	$	40	$	30	$	31	$	(11)	$	(115)	33		**		$	90	$	(443)	**
Selected performance metrics:
Period-end loans held for investment	$	111	$	112	$	127	$	134	$	121	(1)	%	(8)	%	$	111	$	121	(8)	%
Average loans held for investment	103		114		124		122		154		(10)		(33)		116		169		(31)
Period-end deposits	5,516		4,722		5,297		5,310		6,304		17		(13)		5,516		6,304		(13)
Average deposits	5,265		5,020		5,383		5,539		6,803		5		(23)		5,300		8,660		(39)
Total
Earnings:
Net interest income	$	4,656	$	4,497	$	4,315	$	4,350	$	4,423	4	%	5	%	$	17,818	$	18,106	(2)	%
Non-interest income	1,157		1,142		1,153		1,020		1,121		1		3		4,472		4,278		5
Total net revenue	5,813		5,639		5,468		5,370		5,544		3		5		22,290		22,384		—
Provision for credit losses	1,109		993		704		735		957		12		16		3,541		3,453		3
Non-interest expense	3,284		2,985		2,979		2,932		3,235		10		2		12,180		12,353		(1)
Income from continuing operations before income taxes	1,420		1,661		1,785		1,703		1,352		(15)		5		6,569		6,578		—
Income tax provision	450		536		581		579		477		(16)		(6)		2,146		2,224		(4)
Income from continuing operations, net of tax	$	970	$	1,125	$	1,204	$	1,124	$	875	(14)		11		$	4,423	$	4,354	2
Selected performance metrics:
Period-end loans held for investment⁽²⁾	$	208,316	$	201,592	$	198,528	$	192,941	$	197,199	3	%	6	%	$	208,316	$	197,199	6	%
Average loans held for investment	203,436		199,422		194,996		193,722		192,813		2		6		197,925		192,614		3
Period-end deposits	205,548		204,264		205,890		208,324		204,523		1		1		205,548		204,523		1
Average deposits	205,355		205,199		206,315		205,842		205,706		—		—		205,675		209,045		(2)

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 13: Notes to Loan and Business Segments Disclosures (Tables 7—12)

^**	Not meaningful.
⁽¹⁾	Certain prior period amounts have been recast to conform to the current period presentation.
⁽²⁾	Includes $3.7 billion of loans to the oil and gas industry as of December 31, 2014, which was approximately 1.8% of total loans held for investment.
⁽³⁾	Nonperforming assets consist of nonperforming loans, real estate owned ("REO") and other foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each category divided by the combined period-end total of loans held for investment, REO and other foreclosed assets for each respective category. Nonperforming assets related to acquired loans are excluded from the calculation.
⁽⁴⁾	Includes the net realizable value of auto loans that have been charged down as a result of a bankruptcy filing and repossessed assets obtained in satisfaction of auto loans.
⁽⁵⁾	Commercial Banking revenue related to qualified housing credits is presented on a taxable-equivalent basis. As a result of the adoption of ASU 2014-01 "Accounting for Investments in Qualified Affordable Housing Projects" as of January 1, 2014, losses related to these investments are now recognized, along with the associated tax benefits, as a component of income taxes attributable to continuing operations instead of non-interest expense. As such, losses related to these investments decrease the overall tax benefits recognized as a component of income taxes attributable to continuing operations and taxable-equivalent revenue in the Commercial Banking segment. This decrease in revenue is offset by an increase in revenue in the Other segment. Prior period amounts have been recast to conform to this presentation.
⁽⁶⁾	Some of our tax-related commercial investments generate tax-exempt income or tax credits. Accordingly, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35%.
⁽⁷⁾	The transfer of the Best Buy Stores, L.P. ("Best Buy") portfolio to held for sale resulted in an increase in the average yield of 99 basis points and 90 basis points for Domestic Card and Total Credit Card, respectively, in 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.
⁽⁸⁾	Calculated by dividing annualized interest income for the period by average loans held for investment during the period for the specified loan category. Annualized interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment.
⁽⁹⁾	The transfer of the Best Buy portfolio to held for sale resulted in an increase in the net revenue margin of 111 basis points and 100 basis points for Domestic Card and Total Credit Card, respectively, in 2013. The sale of the Best Buy portfolio was completed on September 6, 2013.
⁽¹⁰⁾	Represents the net reduction in interest income attributable to non-SOP 03-3 card loan premium amortization and other intangible accretion associated with the May 1, 2012 transaction in which we acquired substantially all of HSBC's credit card and private-label credit card business in the United States.
⁽¹¹⁾	Includes credit card purchase transactions, net of returns for both loans classified as held for investment and held for sale. Excludes cash advance and balance transfer transactions.
⁽¹²⁾	Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures

Beginning on January 1, 2014, we calculate our regulatory capital under Basel III Standardized Approach subject to transition provisions. Previously, we calculated regulatory capital under Basel I as shown below:


	Basel III Standardized												Basel I
(Dollars in millions) (unaudited)	December 2014			September 2014			June 2014			March 2014			December 2013
Regulatory Capital Metrics⁽³⁾
Common equity Tier 1 capital	$	29,534		$	29,116		$	28,774		$	28,434		N/A
Tier 1 common capital	N/A			N/A			N/A			N/A			$	27,375
Tier 1 capital	$	31,355		$	30,451		$	30,111		$	29,257		28,230
Total risk-based capital⁽¹⁾	35,886			34,860			34,743			33,784			32,987
Risk-weighted assets⁽²⁾	237,587			228,759			226,172			219,047			224,556
Average assets for the leverage ratio	291,243			286,070			281,345			280,907			280,574
Capital Ratios⁽³⁾
Common equity Tier 1 capital ratio⁽⁴⁾	12.4		%	12.7		%	12.7		%	13.0		%	N/A
Tier 1 common ratio	N/A			N/A			N/A			N/A			12.2		%
Tier 1 risk-based capital ratio⁽⁵⁾	13.2		%	13.3		%	13.3		%	13.4		%	12.6
Total risk-based capital ratio⁽⁶⁾	15.1			15.2			15.4			15.4			14.7
Tier 1 leverage ratio⁽⁷⁾	10.8			10.6			10.7			10.4			10.1
Tangible common equity ("TCE") ratio⁽⁸⁾	9.5			9.6			9.5			9.6			8.9

Reconciliation of Non-GAAP Measures

We report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and tangible assets. The tables below provide the details of the calculation of our non-GAAP capital measures and regulatory capital. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.



	2014		2014		2014		2014		2013
(Dollars in millions) (unaudited)	Q4		Q3		Q2		Q1		Q4
Tangible Common Equity (Average)
Average stockholders' equity	$	45,576	$	44,827	$	43,767	$	42,859	$	42,355
Average goodwill and other intangible assets⁽⁹⁾	(15,437)		(15,525)		(15,615)		(15,727)		(15,847)
Noncumulative perpetual preferred stock⁽¹⁰⁾	(1,681)		(1,338)		(970)		(853)		(853)
Average tangible common equity	$	28,458	$	27,964	$	27,182	$	26,279	$	25,655
Tangible Common Equity (Period End)
Stockholders' equity	$	45,053	$	44,018	$	43,815	$	42,801	$	41,632
Goodwill and other intangible assets⁽⁹⁾	(15,383)		(15,472)		(15,564)		(15,666)		(15,784)
Noncumulative perpetual preferred stock⁽¹⁰⁾	(1,822)		(1,336)		(1,338)		(853)		(853)
Tangible common equity	$	27,848	$	27,210	$	26,913	$	26,282	$	24,995
Tangible Assets (Average)
Average total assets	$	304,711	$	299,523	$	294,744	$	294,275	$	294,040
Average goodwill and other intangible assets⁽⁹⁾	(15,437)		(15,525)		(15,615)		(15,727)		(15,847)
Average tangible assets	$	289,274	$	283,998	$	279,129	$	278,548	$	278,193
Tangible Assets (Period End)
Total assets	$	308,854	$	300,202	$	298,317	$	290,500	$	296,933
Goodwill and other intangible assets⁽⁹⁾	(15,383)		(15,472)		(15,564)		(15,666)		(15,784)
Tangible assets	$	293,471	$	284,730	$	282,753	$	274,834	$	281,149

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach⁽³⁾


(Dollars in millions) (unaudited)	December 2014			September 2014			June 2014			March 2014
Common equity excluding AOCI	$	43,661		$	43,241		$	42,848		$	42,658
Adjustments:
AOCI^(11)(12)	(69)			(146)			6			(182)
Goodwill⁽⁹⁾	(13,805)			(13,801)			(13,811)			(13,811)
Intangible assets^(9)(12)	(243)			(266)			(289)			(314)
Other	(10)			88			20			83
Common equity Tier 1 capital	$	29,534		$	29,116		$	28,774		$	28,434
Risk-weighted assets⁽²⁾	$	237,587		$	228,759		$	226,172		$	219,047
Common equity Tier 1 capital ratio⁽⁴⁾	12.4		%	12.7		%	12.7		%	13.0		%


⁽¹⁾	Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.
⁽²⁾	Risk-weighted assets continue to be calculated based on Basel I in 2014.
⁽³⁾	Regulatory capital metrics as of the end of Q4 2014 are preliminary and therefore subject to change.
⁽⁴⁾	Common equity Tier 1 capital ratio is a regulatory measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
⁽⁵⁾	Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
⁽⁶⁾	Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.
⁽⁷⁾	Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
⁽⁸⁾	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets.
⁽⁹⁾	Includes impact of related deferred taxes.
⁽¹⁰⁾	Includes related surplus.
⁽¹¹⁾	Amounts presented are net of tax.
⁽¹²⁾	Amounts based on transition provisions for regulatory capital deductions and adjustments of 20% for 2014.

SOURCE Capital One Financial Corporation

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January 22, 2015 - 4:05 PM EST

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Capital One Reports Fourth Quarter 2014 Net Income of $999 million, or $1.73 per share

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Capital One Reports Fourth Quarter 2014 Net Income of $999 million, or $1.73 per share

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