MCLEAN, Va., Jan. 25, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE:COF) today announced net income for the fourth quarter of 2021 of $2.4 billion, or $5.41 per diluted common share, compared with net income of $3.1 billion, or $6.78 per diluted common share in the third quarter of 2021, and with net income of $2.6 billion, or $5.35 per diluted common share in the fourth quarter of 2020.

"In the fourth quarter, we posted strong growth with strikingly strong credit results, and we continued to return capital to our shareholders," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "As we enter 2022, we continue to see attractive opportunities to grow and build our franchise."

The quarter included the following notable item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

Diluted EPS

Impact

Legacy rewards program upgrade

$ (92)

$ (0.16)

All comparisons below are for the fourth quarter of 2021 compared with the third quarter of 2021 unless otherwise noted.

Fourth Quarter 2021 Income Statement Summary:

Total net revenue increased 4 percent to $8.1 billion.
Total non-interest expense increased 12 percent to $4.7 billion:

33 percent increase in marketing.
7 percent increase in operating expenses.

Pre-provision earnings decreased 6 percent to $3.4 billion.⁽¹⁾
Provision for credit losses increased $723 million to $381 million:

Net charge-offs of $527 million.
$145 million loan reserve release.

Net interest margin of 6.60 percent, an increase of 25 basis points.
Efficiency ratio of 57.63 percent.
Operating efficiency ratio of 45.32 percent.

Fourth Quarter 2021 Balance Sheet Summary:

Common equity Tier 1 capital ratio under Basel III Standardized Approach of 13.1 percent at December 31, 2021.
Period-end loans held for investment in the quarter increased $16.0 billion, or 6 percent, to $277.3 billion.

Credit Card period-end loans increased $9.7 billion, or 9 percent, to $114.8 billion.

Domestic Card period-end loans increased $9.5 billion, or 10 percent, to $108.7 billion.

Consumer Banking period-end loans increased $534 million, or 1 percent, to $77.6 billion.

Auto period-end loans increased $1.1 billion, or 1 percent, to $75.8 billion.

Commercial Banking period-end loans increased $5.7 billion, or 7 percent, to $84.9 billion.

Average loans held for investment in the quarter increased $14.1 billion, or 6 percent, to $267.2 billion.

Credit Card average loans increased $6.5 billion, or 6 percent, to $108.6 billion.

Domestic Card average loans increased $6.4 billion, or 7 percent, to $102.7 billion.

Consumer Banking average loans increased $1.4 billion, or 2 percent, to $77.4 billion.

Auto average loans increased $2.0 billion, or 3 percent, to $75.3 billion.

Commercial Banking average loans increased $6.1 billion, or 8 percent, to $81.1 billion.

Period-end total deposits increased $5.0 billion, or 2 percent, to $311.0 billion, while average deposits increased $2.2 billion, or 1 percent, to $307.3 billion.
Interest-bearing deposits rate paid decreased 1 basis point to 0.33 percent.

2021 Full Year Income Statement Summary:

Total net revenue increased 7% to $30.4 billion.
Total non-interest expense increased 10 percent to $16.6 billion:

78 percent increase in marketing.
2 percent increase in operating expenses.

Pre-provision earnings increased 3 percent to $13.9 billion⁽¹⁾.
Provision for credit losses decreased 119 percent to $1.9 billion:
Net interest margin of 6.21 percent, an increase of 15 basis points.
Efficiency ratio of 54.44 percent.

Efficiency ratio excluding adjusting items of 54.12 percent⁽²⁾.

Operating efficiency ratio of 45.01 percent.

Operating efficiency ratio excluding adjusting items of 44.68 percent⁽²⁾.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 25, 2022 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 February 8, 2022 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2020.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $311.0 billion in deposits and $432.4 billion in total assets as of December 31, 2021. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

⁽¹⁾

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

⁽²⁾

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.

Exhibit 99.2

Capital One Financial Corporation
Financial Supplement⁽¹⁾⁽²⁾
Fourth Quarter 2021
Table of Contents

Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	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	13
	Table 10:	Financial & Statistical Summary—Credit Card Business	14
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	16
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	17
	Table 13:	Financial & Statistical Summary—Other and Total	18
Other
	Table 14:	Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)	19
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	20

__________
⁽¹⁾	The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Annual Report on Form 10-K for the period ended December 31, 2021 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

						2021 Q4 vs		Year Ended December 31,
(Dollars in millions, except per share data and as noted)	2021	2021	2021	2021	2020	2021	2020			2021 vs
(Dollars in millions, except per share data and as noted)	Q4	Q3	Q2	Q1	Q4	Q3	Q4	2021	2020	2020
Income Statement
Net interest income	$ 6,450	$ 6,156	$ 5,743	$ 5,822	$ 5,873	5%	10%	$ 24,171	$ 22,913	5%
Non-interest income	1,668	1,674	1,631	1,291	1,464	—	14	6,264	5,610	12
Total net revenue⁽¹⁾	8,118	7,830	7,374	7,113	7,337	4	11	30,435	28,523	7
Provision (benefit) for credit losses	381	(342)	(1,160)	(823)	264	**	44	(1,944)	10,264	**
Non-interest expense:
Marketing	999	751	620	501	563	33	77	2,871	1,610	78
Operating expense	3,679	3,435	3,346	3,239	3,446	7	7	13,699	13,446	2
Total non-interest expense	4,678	4,186	3,966	3,740	4,009	12	17	16,570	15,056	10
Income from continuing operations before income taxes	3,059	3,986	4,568	4,196	3,064	(23)	—	15,809	3,203	**
Income tax provision	633	882	1,031	869	496	(28)	28	3,415	486	**
Income from continuing operations, net of tax	2,426	3,104	3,537	3,327	2,568	(22)	(6)	12,394	2,717	**
Income from discontinued operations, net of tax	(1)	—	(1)	(2)	(2)	**	(50)	(4)	(3)	33
Net income	2,425	3,104	3,536	3,325	2,566	(22)	(5)	12,390	2,714	**
Dividends and undistributed earnings allocated to participating securities⁽²⁾	(21)	(26)	(30)	(28)	(19)	(19)	11	(105)	(20)	**
Preferred stock dividends	(74)	(79)	(60)	(61)	(68)	(6)	9	(274)	(280)	(2)
Issuance cost for redeemed preferred stock⁽³⁾	(34)	(12)	—	—	(17)	183	100	(46)	(39)	18
Net income available to common stockholders	$ 2,296	$ 2,987	$ 3,446	$ 3,236	$ 2,462	(23)	(7)	$ 11,965	$ 2,375	**
Common Share Statistics
Basic earnings per common share:⁽²⁾
Net income from continuing operations	$ 5.43	$ 6.81	$ 7.65	$ 7.06	$ 5.36	(20)%	1%	$ 27.05	$ 5.20	**
Income (loss) from discontinued operations	—	—	—	—	—	—	—	(0.01)	(0.01)	—
Net income per basic common share	$ 5.43	$ 6.81	$ 7.65	$ 7.06	$ 5.36	(20)	1	$ 27.04	$ 5.19	**
Diluted earnings per common share:⁽²⁾
Net income from continuing operations	$ 5.41	$ 6.78	$ 7.62	$ 7.03	$ 5.35	(20)%	1%	$ 26.95	$ 5.19	**
Income (loss) from discontinued operations	—	—	—	—	—	—	—	(0.01)	(0.01)	—
Net income per diluted common share	$ 5.41	$ 6.78	$ 7.62	$ 7.03	$ 5.35	(20)	1	$ 26.94	$ 5.18	**
Weighted-average common shares outstanding (in millions):
Basic	422.5	438.8	450.6	458.6	459.1	(4)%	(8)%	442.5	457.8	(3)%
Diluted	424.3	440.5	452.3	460.1	460.2	(4)	(8)	444.2	458.9	(3)
Common shares outstanding (period-end, in millions)	413.9	430.4	446.1	456.8	459.0	(4)	(10)	413.9	459.0	(10)
Dividends declared and paid per common share	$ 0.60	$ 1.20	$ 0.40	$ 0.40	$ 0.10	(50)	**	$ 2.60	$ 1.00	160
Tangible book value per common share (period-end)⁽⁴⁾	99.74	99.60	97.20	90.96	88.34	—	13	99.74	88.34	13

						2021 Q4 vs		Year Ended December 31,
(Dollars in millions)	2021	2021	2021	2021	2020	2021	2020			2021 vs
(Dollars in millions)	Q4	Q3	Q2	Q1	Q4	Q3	Q4	2021	2020	2020
Balance Sheet (Period-End)
Loans held for investment	$ 277,340	$ 261,390	$ 249,597	$ 243,131	$ 251,624	6%	10%	$ 277,340	$ 251,624	10%
Interest-earning assets	397,341	387,208	387,295	392,485	388,917	3	2	397,341	388,917	2
Total assets	432,381	425,377	423,420	425,175	421,602	2	3	432,381	421,602	3
Interest-bearing deposits	272,937	269,134	271,314	276,325	274,300	1	—	272,937	274,300	—
Total deposits	310,980	305,938	306,308	310,328	305,442	2	2	310,980	305,442	2
Borrowings	43,086	37,501	36,343	38,450	40,539	15	6	43,086	40,539	6
Common equity	56,184	57,632	58,136	56,341	55,356	(3)	1	56,184	55,356	1
Total stockholders' equity	61,029	63,544	64,624	61,188	60,204	(4)	1	61,029	60,204	1
Balance Sheet (Average Balances)
Loans held for investment	$ 267,159	$ 253,101	$ 246,463	$ 243,937	$ 247,689	6%	8%	$ 252,730	$ 253,335	—
Interest-earning assets	390,868	387,766	390,129	388,572	388,252	1	1	389,336	378,362	3%
Total assets	427,845	424,506	424,099	421,808	420,011	1	2	424,521	411,187	3
Interest-bearing deposits	269,951	269,278	273,476	273,358	274,142	—	(2)	271,500	263,279	3
Total deposits	307,272	305,035	308,217	305,056	304,513	1	1	306,397	290,835	5
Borrowings	39,943	37,464	37,054	39,911	40,662	7	(2)	38,590	46,588	(17)
Common equity	56,946	58,230	56,885	55,775	54,220	(2)	5	56,966	52,954	8
Total stockholders' equity	62,498	64,682	62,376	60,623	59,389	(3)	5	62,556	58,201	7

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

						2021 Q4 vs		Year Ended December 31,
(Dollars in millions, except as noted)	2021	2021	2021	2021	2020	2021	2020			2021 vs
(Dollars in millions, except as noted)	Q4	Q3	Q2	Q1	Q4	Q3	Q4	2021	2020	2020
Performance Metrics
Net interest income growth (period over period)	5%	7%	(1)%	(1)%	6%	**	**	5%	(2)%	**
Non-interest income growth (period over period)	—	3	26	(12)	(20)	**	**	12	7	**
Total net revenue growth (period over period)	4	6	4	(3)	(1)	**	**	7	—	**
Total net revenue margin⁽⁵⁾	8.31	8.08	7.56	7.32	7.56	23 bps	75 bps	7.82	7.54	28 bps
Net interest margin⁽⁶⁾	6.60	6.35	5.89	5.99	6.05	25	55	6.21	6.06	15
Return on average assets	2.27	2.92	3.34	3.16	2.45	(65)	(18)	2.92	0.66	226
Return on average tangible assets⁽⁷⁾	2.35	3.03	3.46	3.27	2.54	(68)	(19)	3.03	0.69	234
Return on average common equity⁽⁸⁾	16.13	20.52	24.24	23.22	18.18	(4)%	(205)	21.01	4.49	17%
Return on average tangible common equity⁽⁹⁾	21.82	27.50	32.75	31.61	25.02	(6)	(320)	28.39	6.24	22
Non-interest expense as a percentage of average loans held for investment	7.00	6.62	6.44	6.13	6.47	38 bps	53	6.56	5.94	62 bps
Efficiency ratio⁽¹⁰⁾	57.63	53.46	53.78	52.58	54.64	4%	299	54.44	52.79	165
Operating efficiency ratio⁽¹¹⁾	45.32	43.87	45.38	45.54	46.97	145 bps	(165)	45.01	47.14	(213)
Effective income tax rate for continuing operations	20.7	22.1	22.6	20.7	16.2	(140)	5%	21.6	15.2	6%
Employees (period-end, in thousands)	50.8	50.8	52.0	51.7	52.0	—	(2)	50.8	52.0	(2)
Credit Quality Metrics
Allowance for credit losses	$ 11,430	$ 11,573	$ 12,346	$ 14,017	$ 15,564	(1)%	(27)%	$ 11,430	$ 15,564	(27)%
Allowance coverage ratio	4.12%	4.43%	4.95%	5.77%	6.19%	(31) bps	(207) bps	4.12%	6.19%	(207) bps
Net charge-offs	$ 527	$ 426	$ 541	$ 740	$ 856	24%	(38)%	$ 2,234	$ 5,225	(57)%
Net charge-off rate⁽¹²⁾	0.79%	0.67%	0.88%	1.21%	1.38%	12 bps	(59) bps	0.88%	2.06%	(118) bps
30+ day performing delinquency rate	2.25	1.97	1.75	1.82	2.41	28	(16)	2.25	2.41	(16)
30+ day delinquency rate	2.41	2.13	1.89	1.98	2.61	28	(20)	2.41	2.61	(20)
Capital Ratios⁽¹³⁾
Common equity Tier 1 capital	13.1%	13.8%	14.5%	14.6%	13.7%	(70) bps	(60) bps	13.1%	13.7%	(60) bps
Tier 1 capital	14.5	15.7	16.6	16.2	15.3	(120)	(80)	14.5	15.3	(80)
Total capital	16.9	18.2	18.8	18.6	17.7	(130)	(80)	16.9	17.7	(80)
Tier 1 leverage	11.6	12.2	12.4	11.7	11.2	(60)	40	11.6	11.2	40
Tangible common equity ("TCE")⁽¹⁴⁾	9.9	10.4	10.6	10.1	10.0	(50)	(10)	9.9	10.0	(10)

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

						2021 Q4 vs		Year Ended December 31,
	2021	2021	2021	2021	2020	2021	2020			2021 vs
(Dollars in millions, except per share data and as noted)	Q4	Q3	Q2	Q1	Q4	Q3	Q4	2021	2020	2020
Interest income:
Loans, including loans held for sale	$ 6,451	$ 6,205	$ 5,753	$ 5,854	$ 5,954	4%	8%	$ 24,263	$ 24,074	1%
Investment securities	368	317	370	391	422	16	(13)	1,446	1,877	(23)
Other	12	16	16	16	15	(25)	(20)	60	82	(27)
Total interest income	6,831	6,538	6,139	6,261	6,391	4	7	25,769	26,033	(1)
Interest expense:
Deposits	222	228	237	269	347	(3)	(36)	956	2,165	(56)
Securitized debt obligations	30	29	28	32	34	3	(12)	119	232	(49)
Senior and subordinated notes	121	116	122	129	128	4	(5)	488	679	(28)
Other borrowings	8	9	9	9	9	(11)	(11)	35	44	(20)
Total interest expense	381	382	396	439	518	—	(26)	1,598	3,120	(49)
Net interest income	6,450	6,156	5,743	5,822	5,873	5	10	24,171	22,913	5
Provision (benefit) for credit losses	381	(342)	(1,160)	(823)	264	**	44	(1,944)	10,264	**
Net interest income after provision for credit losses	6,069	6,498	6,903	6,645	5,609	(7)	8	26,115	12,649	106
Non-interest income:
Interchange fees, net	1,005	1,022	1,016	817	818	(2)	23	3,860	3,017	28
Service charges and other customer-related fees	435	407	384	352	338	7	29	1,578	1,243	27
Net securities gains	(4)	2	—	4	—	**	**	2	25	(92)
Other	232	243	231	118	308	(5)	(25)	824	1,325	(38)
Total non-interest income	1,668	1,674	1,631	1,291	1,464	—	14	6,264	5,610	12
Non-interest expense:
Salaries and associate benefits	1,941	1,852	1,781	1,847	1,755	5	11	7,421	6,805	9
Occupancy and equipment	527	481	523	472	572	10	(8)	2,003	2,118	(5)
Marketing	999	751	620	501	563	33	77	2,871	1,610	78
Professional services	449	358	341	292	394	25	14	1,440<

Capital One Reports Fourth Quarter 2021 Net Income of $2.4 billion, or $5.41 per share