Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q2 2020 Earnings Presentation
19 slides from Capital One Financial's earnings presentation, Jul 21, 2020
Slide 1: Second Quarter 2020 Results
Second Quarter 2020 Results July 21, 2020 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 loss for the second quarter of 2020 of $918 million, or $2.21 per diluted common share ◦ Excluding adjusting items, net loss per diluted common share for the second quarter of 2020 of $1.61(1) • Pre-provision earnings decreased 21% to $2.8 billion for the second quarter of 2
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 (FCFR) reclassification 46
Slide 5: Allowance Coverage Ratios by Segment
Allowance Coverage Ratios by Segment (1) Credit Card Domestic Card $12,091 $11,569 $10,346 $9,806 $8,098 $7,673 11.64% 11.27% $5,395 8.78% 8.95% $4,997 6.31% 6.47% 4.21% 4.21% 12/31/19 01/01/20 03/31/20 06/30/20 12/31/19 01/01/20 03/31/20 06/30/20 Allowance for credit losses ($M) Allowance Coverage
Slide 6: Liquidity
Liquidity Liquidity Coverage Ratio Total Liquidity Reserves ($M) 541% Q/Q 550% Y/Y $149,146 146% 145% 146% $103,565 $105,906 141% 141% $99,544 $90,557 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Liquidity coverage ratio Unencumbered investment securities Cash and cash equivalents Available FHL
Slide 7: Capital
Capital Common Equity Tier 1 Capital Ratio Amount Ratio (Dollars in millions) Common equity Tier 1 (CET1) as of March 31, 2020 $ 36,244 12.0% Q2 2020 Net loss (918) (30) bps CECL Transition Provisions 689 23 bps 12.5% 12.4% 12.3% 12.2% 12.0% Other quarterly activities (130) (4) bps Risk Weighted Ass
Slide 8: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin $6,066 $6,025 69% Q/Q $5,746 $5,737 65% Y/Y $5,460 6.95% 6.80% 6.73% 6.78% 5.78% 2Q19 3Q19 4Q19 1Q20 2Q20 Net Interest Income ($M) Net Interest Margin Second Quarter 2020 Highlights • Net interest margin decreased 100 basis points quarter-over-quarter and
Slide 9: Financial Summary—Business Segment Results
Financial Summary—Business Segment Results Three Months Ended June 30, 2020 Consumer Commercial (Dollars in millions) Credit Card Banking Banking Other Total Net interest income (loss) $ 3,369 $ 1,665 $ 518 $ (92) $ 5,460 Non-interest income (loss) 845 97 180 (26) 1,096 Total net revenue (loss) 4,21
Slide 10: Credit Card
Credit Card 2020 Q2 vs. Second Quarter 2020 Highlights 2020 2020 2019 2020 2019 (Dollars in millions, except as noted) Q2 Q1 Q2 Q1 Q2 Earnings: • Ending loans down $4.8 billion, or 4%, year-over-year; average loans down Net interest income $ 3,369 $ 3,702 $ 3,531 (9)% (5)% $2.1 billion, or 2%, year-
Slide 11: Domestic Card
Domestic Card 2020 Q2 vs. Second Quarter 2020 Highlights 2020 2020 2019 2020 2019 (Dollars in millions, except as noted) Q2 Q1 Q2 Q1 Q2 Earnings: • Ending loans down $3.6 billion, or 3%, year-over-year; average loans down $934 Net interest income $ 3,094 $ 3,381 $ 3,220 (8)% (4)% million, or 1%, yea
Slide 12: COVID-19 Customer Assistance - Domestic Card
COVID-19 Customer Assistance - Domestic Card Weekly Enrollments as a % of Active Accounts Cumulative Enrollments as a % of Active Accounts through 7/4/20 through 6/30/20 Total: 2.0% of Accounts 0.3% 2.0% No longer enrolled(3) 1.5% Were enrolled last month 1.4% 0.2% and skipped their payment Re-Enrol
Slide 13: Consumer Banking
Consumer Banking 2020 Q2 vs. Second Quarter 2020 Highlights 2020 2020 2019 2020 2019 (Dollars in millions, except as noted) Q2 Q1 Q2 Q1 Q2 Earnings: • Ending loans up $6.4 billion, or 11%, year- Net interest income $ 1,665 $ 1,657 $ 1,709 — (3)% over-year; average loans up $5.0 billion, or 8%, year-
Slide 14: COVID-19 Customer Assistance - Auto
COVID-19 Customer Assistance - Auto Weekly Enrollments as a % of Accounts Cumulative Enrollments as a % of Accounts through 7/4/20 through 6/30/20 Total: 14.1% of Accounts 3% 15% No longer enrolled(3) 2% 10% Were enrolled last month 10.7% Re-Enrollment and skipped their payment as permitted (a porti
Slide 15: Commercial Banking
Commercial Banking 2020 Q2 vs. Second Quarter 2020 Highlights 2020 2020 2019 2020 2019 (Dollars in millions, except as noted) Q2 Q1 Q2 Q1 Q2 Earnings: • Ending loans up $5.5 billion, or 8%, year- Net interest income $ 518 $ 491 $ 514 5% 1% over-year; average loans up $7.8 billion, or 11%, year-over-
Slide 16: Appendix
Appendix 16
Slide 17: Non-GAAP Measures
Non-GAAP Measures Three Months Ended Three Months Ended Six Months Ended June 30, 2020 March 31, 2020 June 30, 2020 Reported Adjusted Reported Adjusted Reported Adjusted (Dollars in millions, except per share data and as noted) Results Adj.(1) Results Results Adj.(1) Results Results Adj.(1) Results
Slide 18: Non-GAAP Measures
Non-GAAP Measures Three Months Ended Three Months Ended Six Months Ended June 30, 2019 March 31, 2019 June 30, 2019 Reported Adjusted Reported Adjusted Reported Adjusted (Dollars in millions, except per share data and as noted) Results Adj.(1) Results Results Adj.(1) Results Results Adj.(1) Results
Slide 19: Commercial Oil and Gas Portfolio
Commercial Oil and Gas Portfolio Total Exposure ($M) Total Reserves ($M) Exploration and production 70% Midstream and other 27% Oilfield services 3% $7,624 $7,481 $603 $6,853 $6,237 $530 ($ in millions) 2Q19 3Q19 4Q19 1Q20 2Q20 $5,718 $3,806 $3,617 Allowance for $ 136 $ 154 $ 187 $ 549 $ 500 Credit
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