Summary
Capital One Financial Corporation reported a solid second quarter for 2016, demonstrating robust revenue growth and improved profitability compared to the prior year period. Total net revenue increased by 10% year-over-year, driven by strong performance in the Credit Card segment, which benefited from increased purchase volume and net interest income. The Consumer Banking segment saw a slight revenue decline due to the planned run-off of its acquired home loan portfolio, while the Commercial Banking segment showed healthy loan growth. The company's net income available to common stockholders grew by 5% to $871 million in Q2 2016, with diluted earnings per share rising to $1.69 from $1.50 in Q2 2015. This performance was supported by disciplined expense management, although the provision for credit losses increased by 41% due to higher charge-offs and an increased allowance build driven by loan growth and portfolio seasoning, particularly in the credit card and auto loan portfolios, as well as adverse conditions in the oil and gas portfolio. Capital One also made progress on its capital return strategy, completing its $3.125 billion 2015 Stock Repurchase Program and announcing a new $2.5 billion repurchase program for 2016. The company's capital ratios remained strong, exceeding regulatory requirements and demonstrating a well-capitalized position.
Financial Highlights
39 data points| Revenue | $6.25B |
| Operating Income | $1.96B |
| Interest Expense | $478.00M |
| Net Income | $942.00M |
| EPS (Basic) | $1.70 |
| EPS (Diluted) | $1.69 |
| Shares Outstanding (Basic) | 511.70M |
| Shares Outstanding (Diluted) | 516.50M |
Key Highlights
- 1Total net revenue increased by 10% to $6.25 billion in Q2 2016 compared to Q2 2015.
- 2Net income available to common stockholders increased by 5% to $871 million in Q2 2016 compared to Q2 2015.
- 3Diluted earnings per common share increased by 13% to $1.69 in Q2 2016 compared to $1.50 in Q2 2015.
- 4The provision for credit losses increased significantly by 41% to $1.59 billion, primarily due to higher charge-offs and allowance builds.
- 5Loans held for investment increased by 2% to $234.6 billion as of June 30, 2016, driven by growth in auto, commercial, and credit card portfolios.
- 6The Common Equity Tier 1 capital ratio was 10.9% as of June 30, 2016, remaining strong and above regulatory minimums.
- 7Capital One completed its 2015 Stock Repurchase Program and announced a new $2.5 billion repurchase authorization for 2016.