Summary
Capital One Financial Corporation (COF) reported a mixed financial performance for the third quarter of 2013, with net income available to common shareholders decreasing by 6% to $1.099 billion ($1.86 per diluted share) compared to the same period in 2012. However, for the first nine months of 2013, net income available to common shareholders increased by 22% to $3.247 billion ($5.51 per diluted share) compared to the prior year. This performance was significantly impacted by the prior year's inclusion of a bargain purchase gain from the ING Direct acquisition and a large provision for credit losses related to the HSBC U.S. card acquisition, which were absent in the current year's results for the nine-month period. Total net revenue for the quarter saw a slight decrease of 2% to $5.651 billion, while for the nine-month period it grew by 7% to $16.840 billion, primarily driven by higher average interest-earning assets from recent acquisitions. Credit quality metrics showed some improvement, with a decrease in the 30+ day delinquency rate to 2.88% as of September 30, 2013, compared to 3.09% at the end of 2012. The company also reported a decrease in its allowance for loan and lease losses by 16% to $4.3 billion, reflecting reduced loan balances and an improved credit outlook. Capital ratios remained strong, with the Tier 1 common ratio increasing to 12.74% as of September 30, 2013, up from 10.96% at the end of 2012, driven by strong internal capital generation from earnings. Management expects to complete its $1 billion share repurchase program by the end of the year and is planning for capital distributions in the 2014 CCAR cycle.
Financial Highlights
39 data points| Revenue | $5.65B |
| Operating Income | $1.12B |
| Interest Expense | $438.00M |
| Net Income | $1.10B |
| EPS (Basic) | $1.87 |
| EPS (Diluted) | $1.84 |
| Shares Outstanding (Basic) | 582.30M |
| Shares Outstanding (Diluted) | 591.10M |
Key Highlights
- 1Net income available to common shareholders decreased 6% to $1.099 billion in Q3 2013, but increased 22% to $3.247 billion for the first nine months of 2013.
- 2Total net revenue for Q3 2013 decreased 2% to $5.651 billion, while it increased 7% to $16.840 billion for the first nine months of 2013.
- 3Provision for credit losses decreased significantly by 16% in Q3 2013 and 24% for the nine-month period, reflecting improved credit outlook and the absence of prior year provisions.
- 4The company's Tier 1 common ratio improved to 12.74% as of September 30, 2013, up from 10.96% at year-end 2012.
- 5The 30+ day delinquency rate improved to 2.88% at September 30, 2013, down from 3.09% at December 31, 2012.
- 6Capital One completed the sale of the Best Buy private label and co-branded credit card portfolio for $6.4 billion during the third quarter.
- 7The company continued its $1 billion share repurchase program, having repurchased $256 million in the third quarter and expecting to complete the program by year-end.