Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q4 2020 Earnings Presentation
19 slides from Capital One Financial's earnings presentation, Jan 26, 2021
Slide 1: Fourth Quarter 2020 Results
Fourth Quarter 2020 Results January 26, 2021 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Please note that the following materials containing information regarding Capital One’s financial performance speak only as of the particular date or dates indicated in these materials. Capital One does not undertake any obligation to update or revise any of the informatio
Slide 3: Company Highlights
Company Highlights • Net income for the fourth quarter of 2020 of $2.6 billion, or $5.35 per diluted common share; full year 2020 net income of $2.7 billion, or $5.18 per diluted common share ◦ Excluding adjusting items, net income per diluted common share for the fourth quarter of 2020 of $5.29; fu
Slide 4: Allowance and Provision for Credit Losses
Allowance and Provision for Credit Losses Credit Consumer Commercial Total Card Banking Banking (Dollars in millions) Allowance for credit losses: Balance as of December 31, 2019 $ 5,395 $ 1,038 $ 775 $ 7,208 CECL adoption 2,241 502 102 2,845 Finance charge and fee reserve reclassification 462 0 0 4
Slide 5: Allowance Coverage Ratios by Segment
Allowance Coverage Ratios by Segment Credit Card Domestic Card Branded Card 12.67% $12,091 $11,569 $11,612 $11,062 $11,191 $10,650 $10,346 $9,806 $8,098 $7,673 11.64% 11.58% 11.27% 11.20% 10.81% 10.46% 8.78% 8.95% $5,395 $4,997 6.31% 6.47% 4.21% 4.21% 12/31/19 01/01/20 03/31/20 06/30/20 09/30/20 12/
Slide 6: Liquidity
Liquidity Liquidity Coverage Ratio Total Liquidity Reserves ($M) 63% Q/Q 5 59% Y/Y $149,146 $148,431 $143,992 146% 147% $105,906 145% 145% 141% $90,557 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 Available FHLB capacity Cash and cash equivalents Liquidity coverage ratio Unencumbered investment
Slide 7: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin 56% Q/Q 63% Y/Y $6,066 $6,025 $5,873 $5,555 $5,460 6.95% 6.78% 6.05% 5.78% 5.68% 4Q19 1Q20 2Q20 3Q20 4Q20 Net Interest Income ($M) Net Interest Margin Fourth Quarter 2020 Highlights • Net interest margin increased 37 basis points quarter-over-quarter prima
Slide 8: Capital
Capital Common Equity Tier 1 Capital Ratio Amount Ratio (Dollars in millions) Common equity Tier 1 (CET1) as of September 30, 2020 $ 38,174 13.0% 13.7% Q4 2020 Net income 2,566 90 bps 13.0% CECL Transition Provisions (141) — bps 12.4% 12.2% 12.0% Other quarterly activities 137 — bps Risk Weighted As
Slide 9: Financial Summary—Business Segment Results
Financial Summary—Business Segment Results Three Months Ended December 31, 2020 Consumer Commercial (Dollars in millions) Credit Card Banking Banking Other Total Net interest income (loss) $ 3,413 $ 2,012 $ 522 $ (74) $ 5,873 Non-interest income 1,054 136 268 6 1,464 Total net revenue (loss) 4,467 2
Slide 10: Credit Card
Credit Card 2020 Q4 vs. Fourth Quarter 2020 Highlights 2020 2020 2019 2020 2019 (Dollars in millions, except as noted) Q4 Q3 Q4 Q3 Q4 Earnings: • Ending loans down $21.3 billion, or 17%, year-over-year; average loans Net interest income $ 3,413 $ 3,292 $ 3,794 4 % (10) % down $18.5 billion, or 15%,
Slide 11: Domestic Card
Domestic Card 2020 Q4 vs. Fourth Quarter 2020 Highlights 2020 2020 2019 2020 2019 (Dollars in millions, except as noted) Q4 Q3 Q4 Q3 Q4 Earnings: • Ending loans down $20.1 billion, or 17%, year-over-year; average loans Net interest income $ 3,129 $ 2,995 $ 3,473 4 % (10) % down $17.5 billion, or 16%
Slide 12: Consumer Banking
Consumer Banking 2020 Q4 vs. Fourth Quarter 2020 Highlights 2020 2020 2019 2020 2019 (Dollars in millions, except as noted) Q4 Q3 Q4 Q3 Q4 Earnings: • Ending loans up $5.8 billion, or 9%, Net interest income $ 2,012 $ 1,904 $ 1,662 6 % 21 % year-over-year; average loans up $6.2 billion, or 10%, year
Slide 13: Commercial Banking
Commercial Banking 2020 Q4 vs. Fourth Quarter 2020 Highlights 2020 2020 2019 2020 2019 (Dollars in millions, except as noted) Q4 Q3 Q4 Q3 Q4 Earnings: • Ending loans up $1.3 billion, or 2%, year-over-year; average loans up $1.1 Net interest income $ 522 $ 517 $ 494 1 % 6 % billion, or 2%, year-over-
Slide 14: Appendix
Appendix 14
Slide 15: Non-GAAP Measures
Non-GAAP Measures Year Ended 2020 2019 December 31, (Dollars in millions, except per share data and as noted) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 2020 2019 Adjusted diluted EPS: Net income (loss) available to common stockholders $ 2,462 $ 2,375 $ 2,319 $ (1,009) $ (1,420) $ 1,041 $ 1,270 $ 1,533 $ 1,348 $ 5,192
Slide 16: Non-GAAP Measures
Non-GAAP Measures Year Ended 2020 2019 December 31, (Dollars in millions, except per share data and as noted) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 2020 2019 Adjusted operating efficiency ratio: Operating expense (GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,446 $ 3,265 $ 3,497 $ 3,238 $ 3,451 $ 3,
Slide 17: COVID-19 Customer Assistance - Domestic Card
COVID-19 Customer Assistance - Domestic Card Weekly Enrollments as a % of Active Accounts Cumulative Enrollments as of a % of Active Accounts through 1/2/2021 through 12/31/2020 Total: 2.9% of Accounts 0.3% 3% No longer enrolled(3) 0.2% 2% Were enrolled last month and skipped their payment as permit
Slide 18: COVID-19 Customer Assistance - Auto
COVID-19 Customer Assistance - Auto Weekly Enrollments as a % of Accounts Cumulative Enrollments as of a % of Accounts through 01/02/2021 through 12/31/2020 Total: 17.8% of Accounts 3% 18% No longer enrolled(3) Were enrolled last month and skipped their payment as permitted (a portion may re-enroll)
Slide 19: Commercial Oil and Gas Portfolio
Commercial Oil and Gas Portfolio Total Exposure ($M) Total Reserves ($M) Exploration and production 70% Midstream and other 28% ($ in millions) 4Q19 1Q20 2Q20 3Q20 4Q20 Oilfield services 2% Allowance for $ 187 $ 549 $ 500 $ 470 $ 280 $6,853 Credit Losses $6,237 Reserves for $ 10 $ 54 $ 30 $ 22 $36 U
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