Summary
Capital One Financial Corporation's (COF) 2016 10-K filing shows a net income of $3.8 billion for the year, a decrease from the previous year primarily due to higher provisions for credit losses and increased operating expenses. Despite a decrease in net income, the company reported growth in its loan portfolios, with period-end loans held for investment increasing by $15.7 billion. The net charge-off rate increased by 42 basis points, largely driven by growth and seasoning in the credit card portfolio and losses in specialized lending areas like taxi medallions and oil & gas. Capital One demonstrated strong capital adequacy, with its Common Equity Tier 1 capital ratio at 10.1% as of December 31, 2016, exceeding regulatory requirements. The company continued to return capital to shareholders through share repurchases, authorizing up to $2.5 billion under its 2016 Stock Repurchase Program. Looking ahead, Capital One expressed confidence in delivering solid EPS growth in 2017, assuming stable economic conditions, and expects an efficiency ratio in the low 50%s.
Financial Highlights
42 data points| Revenue | $25.50B |
| Operating Income | $3.77B |
| Interest Expense | $2.02B |
| Net Income | $3.75B |
| EPS (Basic) | $6.96 |
| EPS (Diluted) | $6.89 |
| Shares Outstanding (Basic) | 504.90M |
| Shares Outstanding (Diluted) | 509.80M |
Key Highlights
- 1Net income for 2016 was $3.8 billion, a decrease from $4.1 billion in 2015, primarily due to higher credit loss provisions and operating expenses.
- 2Total net revenue increased by 9% to $25.5 billion in 2016, driven by growth in loan portfolios and higher interest income.
- 3Loans held for investment increased by $15.7 billion to $245.6 billion at year-end 2016, reflecting growth across credit card, auto, and commercial loan portfolios.
- 4The net charge-off rate increased by 42 basis points to 2.17% in 2016, attributed to portfolio seasoning and specific industry challenges (taxi medallions, oil & gas).
- 5Capital ratios remained strong, with Common Equity Tier 1 capital at 10.1% as of December 31, 2016, well above regulatory minimums.
- 6The company continued its capital return program, repurchasing approximately $2.1 billion of common stock in 2016 and authorizing up to $2.5 billion for repurchase.
- 7The company expects continued EPS growth in 2017, contingent on stable economic and credit cycles, and aims for an efficiency ratio in the low 50%s.