Capital One Reports Second Quarter 2020 Net Loss of $918 million, or $2.21 per share
MCLEAN, Va., July 21, 2020 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net loss for the second quarter of 2020 of
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"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.
(1) | Amounts excluding adjusting items are non-GAAP measures that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance, 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
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 Statements (Tables 1—4) | 8 | |
Table 6: | Average Balances, Net Interest Income and Net Interest Margin | 9 | |
Table 7: | Loan Information and Performance Statistics | 10 | |
Table 8: | Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity | 12 | |
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 Measures | 21 | |
__________ | |||
(1) | The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended June 30, 2020 once it is filed with the Securities and Exchange Commission. | ||
(2) | This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. ("GAAP"), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies. |
CAPITAL ONE FINANCIAL CORPORATION (COF) | |||||||||||||||||||||||||||||||||||||
Table 1: Financial Summary—Consolidated | |||||||||||||||||||||||||||||||||||||
2020 Q2 vs. | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data and as noted) | 2020 | 2020 | 2019 | 2019 | 2019 | 2020 | 2019 | 2020 vs. | |||||||||||||||||||||||||||||
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 | ** | |||||||||||||||||||||||||||
Capital One Financial
NYSE:COFCOF RankingsCOF Latest NewsCOF Stock Data
54.31B
362.68M
4.34%
87.76%
2.97%
Credit Card Issuing
Finance and Insurance
United States of America
MCLEAN
About COFcapital one financial corporation, incorporated in july 21, 1994, is a diversified banking company focused primarily on consumer and commercial lending and deposit origination. its principal business segments are local banking and national lending. local banking includes consumer, small business and commercial deposits, and lending conducted within its branch network. the national lending segment consists of three sub-segments: the u.s. card sub-segment, which consists of domestic consumer credit and debit card activities; the auto finance sub-segment, which includes automobile and other motor vehicle financing activities, and the global financial services sub-segment consisting of international lending activities, small business lending, installment loans, home loans, healthcare financing and other diversified activities.
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