10-QPeriod: Q1 FY2015

CAPITAL ONE FINANCIAL CORP Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 5, 2015For Securities:COFCOF-PLCOF-PICOF-PKCOF-PNCOF-PJ

Summary

Capital One Financial Corporation (COF) reported a solid first quarter of 2015, with net income remaining flat at $1.2 billion year-over-year, translating to $2.00 per diluted share. Total net revenue saw a 5% increase to $5.6 billion, driven by higher net interest income and non-interest income, primarily from increased interchange fees. The company's credit quality metrics showed improvement, with a lower net charge-off rate of 1.72%, down 20 basis points from the prior year. Capital One also demonstrated strong capital adequacy, maintaining a Common Equity Tier 1 capital ratio of 12.46%. The company announced a significant increase in its quarterly dividend to $0.40 per share and authorized a new $3.125 billion stock repurchase program, signaling confidence in its financial position and commitment to returning capital to shareholders. The credit card segment remained the largest contributor to revenue and net income, while the consumer and commercial banking segments showed mixed performance with growth in auto and commercial loans offset by the run-off of acquired home loans.

Financial Highlights

38 data points
Beta

Revenue

$5.65B

Net Income

$1.15B

20.4% Net Margin

EPS (Diluted)

$2.00

Total Assets

$306.22B

Free Cash Flow

$1.84B

Financial Statements
Beta
Revenue$5.65B
Operating Income$1.13B
Interest Expense$398.00M
Net Income$1.15B
EPS (Basic)$2.03
EPS (Diluted)$2.00
Shares Outstanding (Basic)550.20M
Shares Outstanding (Diluted)557.20M

Key Highlights

  • 1Net income remained stable at $1.2 billion ($2.00 per diluted share) for Q1 2015.
  • 2Total net revenue increased by 5% to $5.6 billion, driven by growth in net interest income and non-interest income.
  • 3Net charge-off rate improved to 1.72%, a 20 basis point decrease year-over-year.
  • 4Common Equity Tier 1 capital ratio remained strong at 12.46%.
  • 5Quarterly common stock dividend increased to $0.40 per share.
  • 6A new stock repurchase program of up to $3.125 billion was authorized.
  • 7Credit Card segment drove revenue growth with increased purchase volume and interchange fees.

Frequently Asked Questions

Capital One's total net revenue increased by 5% to $5.6 billion in Q1 2015 compared to $5.4 billion in Q1 2014. This growth was primarily driven by a 5% increase in net interest income and a 5% increase in non-interest income, the latter being boosted by higher interchange fees.

Capital One showed an improvement in credit quality. The net charge-off rate decreased by 20 basis points to 1.72% in Q1 2015 compared to Q1 2014. The 30+ day delinquency rate also declined to 2.58% as of March 31, 2015, from 2.91% as of December 31, 2014.

Capital One completed its 2014 Stock Repurchase Program and authorized a new 2015 Stock Repurchase Program of up to $3.125 billion, to be executed from the second quarter of 2015 through the second quarter of 2016. Additionally, the Board of Directors authorized an increase in the quarterly common stock dividend from $0.30 to $0.40 per share, effective in the second quarter of 2015.

The Credit Card segment saw its net income remain flat at $668 million due to higher net interest income and non-interest income, offset by higher provisions and expenses. Consumer Banking's net income decreased to $266 million from $330 million, mainly due to a higher provision for credit losses and increased non-interest expenses. Commercial Banking reported an increase in net income to $155 million from $137 million, driven by loan growth and increased fee-based services.