Exhibit 99.2

EX-99.2 3 dex992.htm EXHIBIT 99.2 Exhibit 99.2

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement

Second Quarter 2011

Table of Contents


	Page
Capital One Financial Consolidated

Table 1: Financial & Statistical Summary—Consolidated		1

Table 2: Notes to Consolidated Financial & Statistical Summary (Table 1)		2

Table 3: Consolidated Statements of Income		3

Table 4: Consolidated Balance Sheets		4

Table 5: Average Balances, Net Interest Income and Net Interest Margin		5

Table 6: Loan Information and Performance Statistics		6

Table 7: Notes to Loan Information and Performance Statistics (Table 6)		7

Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures		8

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 1: Financial & Statistical Summary—Consolidated


(Dollars in millions, except per share data and as noted) (unaudited)	2011 Q2			2011 Q1			2010 Q4			2010 Q3			2010 Q2
Earnings
Net interest income	$	3,136		$	3,140		$	3,023		$	3,109		$	3,097
Non-interest income ⁽¹⁾⁽²⁾		857			942			939			907			807

Total revenue	$	3,993		$	4,082		$	3,962		$	4,016		$	3,904
Provision for loan and lease losses		343			534			839			867			723
Marketing expenses		329			276			308			250			219
Operating expenses ⁽³⁾		1,926			1,886			1,783			1,746			1,781

Income from continuing operations before income taxes	$	1,395		$	1,386		$	1,032		$	1,153		$	1,181
Income tax provision		450			354			331			335			369

Income from continuing operations, net of tax		945			1,032			701			818			812
Loss from discontinued operations, net of tax ⁽²⁾		(34)			(16)			(4)			(15)			(204)

Net income	$	911		$	1,016		$	697		$	803		$	608

Common Share Statistics
Basic EPS:
Income from continuing operations, net of tax	$	2.07		$	2.27		$	1.55		$	1.81		$	1.79
Loss from discontinued operations, net of tax		(0.07)			(0.03)			(0.01)			(0.03)			(0.45)

Net income per common share	$	2.00		$	2.24		$	1.54		$	1.78		$	1.34

Diluted EPS:
Income from continuing operations, net of tax	$	2.04		$	2.24		$	1.53		$	1.79		$	1.78
Loss from discontinued operations, net of tax		(0.07)			(0.03)			(0.01)			(0.03)			(0.45)

Net income per common share	$	1.97		$	2.21		$	1.52		$	1.76		$	1.33

Weighted average common shares outstanding (in millions):
Basic EPS		455.6			454.1			452.7			452.5			452.1
Diluted EPS		462.2			460.3			457.2			456.6			456.4
Common shares outstanding (period end)		455.8			455.2			452.8			452.6			452.3
Dividends per common share	$	0.05		$	0.05		$	0.05		$	0.05		$	0.05
Tangible book value per common share (period end)⁽⁴⁾		32.33			29.70			27.73			26.60			24.89
Stock price per common share (period end)		51.67			51.96			42.56			39.55			40.30
Total market capitalization (period end)		23,551			23,652			19,271			17,900			18,228
Balance Sheet (Period End)
Loans held for investment ⁽⁵⁾	$	128,965		$	124,092		$	125,947		$	126,334		$	127,140
Interest-earning assets		174,302			172,849			172,024			170,520			170,547
Total assets		199,753			199,300			197,503			196,933			197,489
Tangible assets⁽⁶⁾		185,778			184,928			183,158			182,904			183,474
Interest-bearing deposits		109,278			109,097			107,162			104,741			103,172
Total deposits		126,117			125,446			122,210			119,212			117,331
Borrowings		37,735			39,797			41,796			44,333			48,018
Stockholders’ equity		28,681			27,550			26,541			26,061			25,270
Tangible common equity (TCE) ⁽⁷⁾		14,737			13,520			12,558			12,037			11,259
Balance Sheet (Quarterly Average Balances)
Average loans held for investment ⁽⁵⁾	$	127,916		$	125,077		$	125,441		$	126,391		$	128,203
Average interest-earning assets		174,143			173,540			173,992			172,473			174,650
Average total assets		199,229			198,075			197,704			196,598			199,357
Average interest-bearing deposits		109,251			108,633			106,597			104,186			104,163
Average total deposits		125,834			124,158			121,736			118,255			118,484
Average borrowings		39,451			40,538			42,428			45,910			50,404
Average stockholders’ equity		28,255			27,009			26,255			25,307			24,526
Performance Metrics
Net interest income growth (quarter over quarter)		0	%		4	%		(3)	%		0	%		(4)	%
Non-interest income growth (quarter over quarter)		(9)			0			4			12			(24)
Revenue growth (quarter over quarter)		(2)			3			(1)			3			(9)
Revenue margin ⁽⁸⁾		9.17			9.41			9.11			9.31			8.94
Net interest margin ⁽⁹⁾		7.20			7.24			6.95			7.21			7.09
Risk-adjusted margin ⁽¹⁰⁾		7.03			6.77			5.90			5.78			5.01
Return on average assets ⁽¹¹⁾		1.90			2.08			1.42			1.66			1.63
Return on average equity ⁽¹²⁾		13.38			15.28			10.68			12.93			13.24
Return on average tangible common equity⁽¹³⁾		26.47			31.73			22.90			28.95			30.97
Non-interest expense as a % of average loans held for investment ⁽¹⁴⁾		7.05			6.91			6.67			6.32			6.23
Efficiency ratio ⁽¹⁵⁾		56.47			52.96			52.78			49.70			51.23
Effective income tax rate		32.3			25.5			32.1			29.1			31.2
Full-time equivalent employees (in thousands)		28.2			27.9			25.7			25.7			25.7
Credit Quality Metrics
Allowance for loan and lease losses	$	4,488		$	5,067		$	5,628		$	6,175		$	6,799
Allowance as a % of loans held for investment		3.48	%		4.08	%		4.47	%		4.89	%		5.34	%
Net charge-offs	$	931		$	1,145		$	1,394		$	1,522		$	1,717
Net charge-off rate ^{(16) (17)}		2.91	%		3.66	%		4.45	%		4.82	%		5.35	%
30+ day performing delinquency rate		2.90			3.07			3.52			3.71			3.81
Capital Ratios
Tier 1 risk-based capital ratio ⁽¹⁸⁾		11.6	%		10.9	%		11.6	%		11.1	%		9.9	%
Tier 1 common equity ratio ⁽¹⁹⁾		9.2			8.4			8.8			8.2			7.0
Total risk-based capital ratio ⁽²⁰⁾		14.8			14.2			16.8			16.4			17.0
Tangible common equity (TCE) ratio⁽²¹⁾		7.9			7.3			6.9			6.6			6.1

Page 1

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Notes to Consolidated Financial & Statistical Summary (Table 1)

(1)	Includes the impact from the change in fair value of retained interests, including interest-only strips, which totaled $16 million in Q2 2011, $7 million in Q1 2011, $8 million in Q4 2010, $6 million in Q3 2010 and $17 million in Q2 2010.

(2)

The mortgage representation and warranty reserve increased to $869 million as of June 30, 2011, from $846 million as of March 31, 2011. We recorded a provision for repurchase losses of $37 million in Q2 2011, $44 million in Q1 2011, $(7) million in Q4 2010, $16 million in Q3 2010 and $404 million in Q2 2010. The majority of the provision for repurchase losses is included in discontinued operations, with the remaining portion included in non-interest income.

(3)

Includes core deposit intangible amortization expense of $44 million in Q2 2011, $45 million in Q1 2011, $47 million in Q4 2010, $49 million in Q3 2010 and $50 million in Q2 2010 and integration costs of $0 in Q2 2011, $2 million in Q1 2011, $15 million in Q4 2010, $27 million in Q3 2010 and $22 million in Q2 2010.

(4)	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See “Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for the calculation of this measure.

(5)	Reflects the impact of the April 1, 2011 acquisition of the existing private-label credit card loan portfolio of Kohl’s Department Stores (“Kohl’s”), which had an outstanding principal and interest balance of approximately $3.7 billion at acquisition.

(6)	Tangible assets is a non-GAAP measure consisting of total assets less assets from discontinued operations and intangible assets. See “Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for the calculation of this measure.

(7)	Tangible common equity is a non-GAAP measure consisting of total stockholders’ equity less intangible assets. See “Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for the calculation of this measure.

(8)	Calculated based on annualized total 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 total revenue less net charge-offs for the period divided by average interest-earning assets for the period.

(11)	Calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period.

(12)	Calculated based on annualized income from continuing operations, net of tax, for the period divided by average stockholders’ equity for the period.

(13)	Calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible common equity for the period.

(14)	Calculated based on annualized non-interest expense for the period divided by average loans held for investment for the period.

(15)	Calculated based on non-interest expense for the period divided by total revenue for the period.

(16)	In accordance with our loss share agreement with Kohl’s, charge-offs for the portfolio are reported net of any reimbursement of credit losses from Kohl’s, which has the impact of lowering the overall charge-off rate.

(17)	Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period. Average loans held for investment include purchased credit impaired loans acquired as part of the Chevy Chase Bank acquisition.

(18)	Tier 1 risk-based capital ratio is a regulatory measure calculated based on Tier 1 capital divided by risk-weighted assets. See “Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for the calculation of this ratio.

(19)	Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-weighted assets. See “Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for the calculation of this ratio and non-GAAP reconciliation.

(20)	Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighted assets. See “Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for the calculation of this ratio.

(21)	Tangible common equity ratio (“TCE ratio”) is a non-GAAP measure calculated based on tangible common equity divided by tangible assets. See “Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures” for the calculation of this ratio and non-GAAP reconciliation.

Page 2

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income


	Three Months Ended						Six Months Ended
(Dollars in millions, except per share data) (unaudited)	June 30, 2011		March 31, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Interest income:
Loans held for investment, including past-due fees	$	3,367	$	3,417	$	3,476	$	6,784	$	7,134
Investment securities		313		316		342		629		691
Other		19		19		17		38		40

Total interest income		3,699		3,752		3,835		7,451		7,865

Interest expense:
Deposits		307		322		368		629		767
Securitized debt obligations		113		140		212		253		454
Senior and subordinated notes		63		64		72		127		140
Other borrowings		80		86		86		166		179

Total interest expense		563		612		738		1,175		1,540


Net interest income		3,136		3,140		3,097		6,276		6,325
Provision for loan and lease losses		343		534		723		877		2,201

Net interest income after provision for loan and lease losses		2,793		2,606		2,374		5,399		4,124

Non-interest income:
Servicing and securitizations		12		11		21		23		(15)
Service charges and other customer-related fees		460		525		496		985		1,081
Interchange		331		320		333		651		644
Net other-than-temporary impairment losses recognized in earnings		(6)		(3)		(26)		(9)		(57)
Other		60		89		(17)		149		215

Total non-interest income		857		942		807		1,799		1,868

Non-interest expense:
Salaries and associate benefits		715		741		650		1,456		1,296
Marketing		329		276		219		605		399
Communications and data processing		162		164		164		326		333
Supplies and equipment		124		135		129		259		253
Occupancy		118		119		117		237		237
Other		807		727		721		1,534		1,329

Total non-interest expense		2,255		2,162		2,000		4,417		3,847

Income from continuing operations before income taxes		1,395		1,386		1,181		2,781		2,145
Income tax provision		450		354		369		804		613

Income from continuing operations, net of tax		945		1,032		812		1,977		1,532
Loss from discontinued operations, net of tax		(34)		(16)		(204)		(50)		(288)

Net income	$	911	$	1,016	$	608	$	1,927	$	1,244


Basic earnings per common share:
Income from continuing operations	$	2.07	$	2.27	$	1.79	$	4.35	$	3.38
Loss from discontinued operations		(0.07)		(0.03)		(0.45)		(0.11)		(0.63)

Net income per common share	$	2.00	$	2.24	$	1.34	$	4.24	$	2.75


Diluted earnings per common share:
Income from continuing operations	$	2.04	$	2.24	$	1.78	$	4.29	$	3.36
Loss from discontinued operations		(0.07)		(0.03)		(0.45)		(0.11)		(0.63)

Net income per common share	$	1.97	$	2.21	$	1.33	$	4.18	$	2.73


Weighted average common shares outstanding (in millions):
Basic EPS		455.6		454.1		452.1		454.9		451.6
Diluted EPS		462.2		460.3		456.4		461.3		455.9
Dividends per common share	$	0.05	$	0.05	$	0.05	$	0.10	$	0.10

Page 3

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets


(Dollars in millions)(unaudited)	June 30, 2011		December 31, 2010		June 30, 2010

Assets:
Cash and due from banks	$	1,954	$	2,067	$	2,668
Interest-bearing deposits with banks		4,037		2,776		2,147
Federal funds sold and repurchase agreements		652		406		384

Cash and cash equivalents		6,643		5,249		5,199
Restricted cash for securitization investors		1,328		1,602		3,446
Securities available for sale, at fair value		39,474		41,537		39,424
Loans held for investment:
Unsecuritized loans held for investment, at amortized cost		81,585		71,921		71,491
Restricted loans for securitization investors		47,380		54,026		55,649

Total loans held for investment		128,965		125,947		127,140
Less: Allowance for loan and lease losses		(4,488)		(5,628)		(6,799)

Net loans held for investment		124,477		120,319		120,341
Loans held for sale, at lower-of-cost-or-fair-value		80		228		249
Accounts receivable from securitizations		106		118		206
Premises and equipment, net		2,754		2,749		2,730
Interest receivable		1,027		1,070		1,077
Goodwill		13,596		13,591		13,588
Other		10,268		11,040		11,229

Total assets	$	199,753	$	197,503	$	197,489


Liabilities:
Interest payable	$	469	$	488	$	543
Customer deposits:
Non-interest bearing deposits		16,839		15,048		14,159
Interest-bearing deposits		109,278		107,162		103,172

Total customer deposits		126,117		122,210		117,331
Securitized debt obligations		19,860		26,915		33,009
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase		2,575		1,517		728
Senior and subordinated notes		8,664		8,650		9,424
Other borrowings		6,636		4,714		4,857

Total other debt		17,875		14,881		15,009
Other liabilities		6,751		6,468		6,327

Total liabilities		171,072		170,962		172,219


Stockholders’ equity:
Common stock		5		5		5
Paid-in capital, net		19,188		19,084		19,029
Retained earnings		12,287		10,406		8,969
Accumulated other comprehensive income		442		248		467
Less: Treasury stock, at cost		(3,241)		(3,202)		(3,200)

Total stockholders’ equity		28,681		26,541		25,270

Total liabilities and stockholders’ equity	$	199,753	$	197,503	$	197,489

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CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 5: Average Balances, Net Interest Income and Net Interest Margin


	Quarter Ended 06/30/11							Quarter Ended 03/31/11							Quarter Ended 06/30/10
(Dollars in millions)(unaudited)	Average Balance		Interest Income/ Expense		Yield/ Rate			Average Balance		Interest Income/ Expense		Yield/ Rate			Average Balance		Interest Income/ Expense		Yield/Rate
Interest-earning assets:
Loans held for investment	$	127,916	$	3,367		10.53	%	$	125,077	$	3,417		10.93	%	$	128,203	$	3,476		10.85	%
Investment securities		40,381		313		3.10			41,532		316		3.04			39,022		342		3.51
Other		5,846		19		1.30			6,931		19		1.10			7,425		17		0.92

Total interest-earning assets	$	174,143	$	3,699		8.50	%	$	173,540	$	3,752		8.65	%	$	174,650	$	3,835		8.78	%


Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts	$	13,186	$	9		0.27	%	$	13,648	$	9		0.26	%	$	11,601	$	10		0.34	%
Money market deposit accounts		45,527		99		0.87			45,613		110		0.96			42,127		99		0.94
Savings accounts		29,329		60		0.82			26,801		55		0.82			21,017		44		0.84
Other consumer time deposits		14,330		91		2.54			15,344		99		2.58			20,744		150		2.89
Public fund CD’s of $100,000 or more		110		1		3.64			149		1		2.68			240		1		1.67
CD’s of $100,000 or more		5,867		46		3.14			6,097		47		3.08			7,601		63		3.32
Foreign time deposits		902		1		0.44			981		1		0.41			833		1		0.48

Total interest-bearing deposits	$	109,251	$	307		1.12	%	$	108,633	$	322		1.19	%	$	104,163	$	368		1.41	%
Securitized debt obligations		22,191		113		2.04			25,515		140		2.19			35,248		212		2.41
Senior and subordinated notes		8,093		63		3.11			8,090		64		3.16			8,760		72		3.29
Other borrowings		9,167		80		3.49			6,933		86		4.96			6,396		86		5.38

Total interest-bearing liabilities	$	148,702	$	563		1.51	%	$	149,171	$	612		1.64	%	$	154,567	$	738		1.91	%


Net interest income/spread			$	3,136		6.99	%			$	3,140		7.01	%			$	3,097		6.87	%


Interest income to average interest-earning assets						8.50	%						8.65	%						8.78	%
Interest expense to average interest-earning assets						1.30							1.41							1.69

Net interest margin						7.20	%						7.24	%						7.09	%

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CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 6: Loan Information and Performance Statistics⁽¹⁾


(Dollars in millions)(unaudited)	2011 Q2			2011 Q1			2010 Q4			2010 Q3			2010 Q2
Period-end loans held for investment
Credit card:
Domestic credit card ⁽²⁾	$	53,994		$	50,570		$	53,849		$	53,839		$	54,628
International credit card		8,711			8,735			7,522			7,487			7,269

Total credit card		62,705			59,305			61,371			61,326			61,897

Consumer banking:
Automobile		19,223			18,342			17,867			17,643			17,221
Home loan		11,323			11,741			12,103			12,763			13,322
Retail banking		4,046			4,223			4,413			4,591			4,770

Total consumer banking		34,592			34,306			34,383			34,997			35,313

Commercial banking:
Commercial and multifamily real estate		14,035			13,543			13,396			13,475			13,580
Middle market		11,404			10,758			10,484			10,364			10,203
Specialty lending		4,122			3,936			4,020			3,813			3,815

Total commercial lending		29,561			28,237			27,900			27,652			27,598
Small-ticket commercial real estate		1,642			1,780			1,842			1,890			1,977

Total commercial banking		31,203			30,017			29,742			29,542			29,575

Other loans⁽³⁾		465			464			451			469			470

Total	$	128,965		$	124,092		$	125,947		$	126,334		$	127,255

Average loans held for investment
Credit card:
Domestic credit card ⁽²⁾	$	53,868		$	51,889		$	53,189		$	54,049		$	55,252
International credit card		8,823			8,697			7,419			7,342			7,427

Total credit card		62,691			60,586			60,608			61,391			62,679

Consumer banking:
Automobile		18,753			18,025			17,763			17,397			17,276
Home loan		11,534			11,960			12,522			13,024			13,573
Retail banking		4,154			4,251			4,466			4,669			4,811

Total consumer banking		34,441			34,236			34,751			35,090			35,660

Commercial banking:
Commercial and multifamily real estate		13,597			13,345			13,323			13,411			13,543
Middle market		10,979			10,666			10,460			10,352			10,276
Specialty lending		4,014			3,964			3,947			3,715			3,654

Total commercial lending		28,590			27,975			27,730			27,478			27,473
Small-ticket commercial real estate		1,726			1,818			1,887			1,957			2,060

Total commercial banking		30,316			29,793			29,617			29,435			29,533

Other loans ⁽³⁾		468			462			465			475			463

Total	$	127,916		$	125,077		$	125,441		$	126,391		$	128,335

Net charge-off rates
Credit card:
Domestic credit card ⁽⁴⁾		4.74	%		6.20	%		7.28	%		8.23	%		9.49	%
International credit card		7.02			5.74			6.68			7.60			8.38

Total credit card		5.06	%		6.13	%		7.21	%		8.16	%		9.36	%

Consumer banking:
Automobile		1.11	%		1.98	%		2.65	%		2.71	%		2.09	%
Home loan		0.60			0.71			0.89			0.41			0.46
Retail banking		1.73			2.24			2.40			2.20			2.11

Total consumer banking		1.01	%		1.57	%		1.98	%		1.79	%		1.47	%

Commercial banking:
Commercial and multifamily real estate		0.39	%		0.56	%		1.15	%		1.78	%		1.17	%
Middle market		0.13			0.18			0.94			0.43			0.78
Specialty lending		0.47			0.30			0.63			0.64			0.87

Total commercial lending		0.30	%		0.38	%		1.00	%		1.11	%		0.98	%
Small-ticket commercial real estate		3.77			7.14			7.72			3.48			4.21

Total commercial banking		0.50	%		0.79	%		1.43	%		1.27	%		1.21	%

Other loans		10.59	%		19.91	%		21.11	%		17.63	%		27.95	%

Total		2.91	%		3.66	%		4.45	%		4.82	%		5.36	%

30+ day performing delinquency rates
Credit card:
Domestic credit card		3.33	%		3.59	%		4.09	%		4.53	%		4.79	%
International credit card		5.30			5.55			5.75			5.84			6.03

Total credit card		3.60	%		3.88	%		4.29	%		4.69	%		4.94	%

Consumer banking:
Automobile		6.09	%		5.79	%		7.58	%		7.42	%		7.25	%
Home loan		0.70			0.61			0.64			0.69			0.68
Retail banking		0.76			0.93			0.93			1.08			0.87

Total consumer banking		3.70	%		3.42	%		4.28	%		4.14	%		3.91	%


Nonperforming asset rates^{(5) (6)}
Consumer banking:
Automobile		0.49	%		0.39	%		0.64	%		0.60	%		0.56	%
Home loan		4.40			4.34			4.25			4.09			3.78
Retail banking		2.45			2.44			2.66			2.41			2.25

Total consumer banking		2.00	%		2.00	%		2.17	%		2.11	%		2.00	%

Commercial banking:
Commercial and multifamily real estate		2.35	%		2.63	%		2.23	%		2.42	%		2.82	%
Middle market		1.19			1.14			1.33			1.38			1.20
Specialty lending		0.95			1.19			1.30			1.75			1.94

Total commercial lending		1.71	%		1.86	%		1.76	%		1.94	%		2.10	%
Small-ticket commercial real estate		0.75			3.39			2.38			2.04			3.57

Total commercial banking		1.66	%		1.95	%		1.80	%		1.94	%		2.20	%

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CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Notes to Loan Information and Performance Statistics (Table 6)

(1)	Certain prior period amounts have been reclassified to conform to the current period presentation.

(2)	Reflects the impact of the April 1, 2011 acquisition of the existing private-label credit card loan portfolio of Kohl’s Department Stores (“Kohl’s”), which had an outstanding principal and interest balance of approximately $3.7 billion at acquisition.

(3)	Other loans held for investment includes unamortized premiums and discounts on loans acquired as part of the North Fork and Hibernia acquisitions.

(4)	In accordance with our loss share agreement with Kohl’s, charge-offs for the portfolio are reported net of any reimbursement of credit losses from Kohl’s, which has the impact of lowering the overall Domestic Card charge-off rate.

(5)

Nonperforming assets consist of nonperforming loans and real estate owned (“REO”) and foreclosed assets. The nonperforming asset ratios are calculated based on nonperforming assets for each segment divided by the combined total of loans held for investment, REO and foreclosed assets for each respective segment.

(6)

As permitted by regulatory guidance, our policy is generally to exempt delinquent credit card loans from being classified as nonperforming. We continue to accrue finance charges and fees on credit card loans until the loan is charged off, typically when the account becomes 180 days past due. Billed finance charges and fees considered uncollectible are not recognized in income.

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CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Reconciliation of Non-GAAP Measures and Calculation of Regulatory Capital Measures

In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include average tangible common equity, tangible common equity (TCE), TCE ratio, Tier 1 common equity and Tier 1 common equity ratio. The table below provides the details of the calculation of each of these measures. While these 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.


(Dollars in millions)(unaudited)	2011 Q2			2011 Q1			2010 Q4			2010 Q3			2010 Q2
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders’ equity	$	28,255		$	27,009		$	26,255		$	25,307		$	24,526
Less: Average intangible assets⁽¹⁾		(13,973)			(14,001)			(14,008)			(14,003)			(14,039)

Average tangible common equity	$	14,282		$	13,008		$	12,247		$	11,304		$	10,487

Stockholders’ Equity to Non-GAAP Tangible Common Equity
Total stockholders’ equity	$	28,681		$	27,550		$	26,541		$	26,061		$	25,270
Less: Intangible assets⁽¹⁾		(13,944)			(14,030)			(13,983)			(14,024)			(14,011)

Tangible common equity	$	14,737		$	13,520		$	12,558		$	12,037		$	11,259

Total Assets to Tangible Assets
Total assets	$	199,753		$	199,300		$	197,503		$	196,933		$	197,489
Less: Assets from discontinued operations		(31)			(342)			(362)			(5)			(4)

Total assets from continuing operations		199,722			198,958			197,141			196,928			197,485
Less: Intangible assets⁽¹⁾		(13,944)			(14,030)			(13,983)			(14,024)			(14,011)

Tangible assets	$	185,778		$	184,928		$	183,158		$	182,904		$	183,474

Non-GAAP TCE Ratio
Tangible common equity	$	14,737		$	13,520		$	12,558		$	12,037		$	11,259
Tangible assets		185,778			184,928			183,158			182,904			183,474

TCE ratio⁽²⁾		7.9	%		7.3	%		6.9	%		6.6	%		6.1	%

Non-GAAP Tier 1 Common Equity and Regulatory Capital Ratios
Total stockholders’ equity	$	28,681		$	27,550		$	26,541		$	26,061		$	25,270
Less: Net unrealized (gains) losses on AFS securities recorded in AOCI⁽³⁾		(482)			(314)			(368)			(580)			(661)
Net (gains) losses on cash flow hedges recorded in AOCI⁽³⁾		71			95			86			79			73
Disallowed goodwill and other intangible assets		(13,954)			(13,993)			(13,953)			(13,993)			(14,023)
Disallowed deferred tax assets		(648)			(1,377)			(1,150)			(1,324)			(1,977)
Other		(2)			(2)			(2)			(2)			(2)

Tier 1 common equity	$	13,666		$	11,959		$	11,154		$	10,241		$	8,680
Plus: Tier 1 restricted core capital items⁽⁴⁾		3,636			3,636			3,636			3,636			3,637

Tier 1 capital	$	17,302		$	15,595		$	14,790		$	13,877		$	12,317

Plus: Long-term debt qualifying as Tier 2 capital		2,727			2,827			2,827			2,827			2,898
Qualifying allowance for loan and lease losses		1,873			1,825			3,748			3,726			5,836
Other Tier 2 components		28			20			29			24			25

Tier 2 capital	$	4,628		$	4,672		$	6,604		$	6,577		$	8,759

Total risk-based capital⁽⁵⁾	$	21,930		$	20,267		$	21,394		$	20,454		$	21,076

Risk-weighted assets⁽⁶⁾	$	148,619		$	142,495		$	127,043		$	124,726		$	124,038

Tier 1 common equity ratio⁽⁷⁾		9.2	% ⁽¹⁰⁾		8.4	%		8.8	%		8.2	%		7.0	%
Tier 1 risk-based capital ratio⁽⁸⁾		11.6	⁽¹⁰⁾		10.9			11.6			11.1			9.9
Total risk-based capital ratio⁽⁹⁾		14.8	⁽¹⁰⁾		14.2			16.8			16.4			17.0

(1)	Includes impact from related deferred taxes.

(2)	Calculated based on tangible common equity divided by tangible assets.

(3)	Amounts presented are net of tax.

(4)	Consists primarily of trust preferred securities.

(5)	Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.

(6)	Calculated based on prescribed regulatory guidelines.

(7)	Tier 1 common equity ratio is a non-GAAP measure calculated based on Tier 1 common equity divided by risk-weighted assets.

(8)	Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.

(9)	Total risk-based capital ratio is a regulatory capital measure calculated based on total risk-based capital divided by risk-weighted assets.

(10)	Capital ratios as of the end of Q2 2011 are preliminary and therefore subject to change once the calculations have been finalized.

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