CAPITAL ONE FINANCIAL CORP Quarterly Report for Q1 Ended Mar 31, 2018

Summary

Capital One Financial Corporation reported a strong first quarter of 2018, with net income soaring by 66% to $1.3 billion, or $2.62 per diluted share, compared to $810 million, or $1.54 per diluted share, in the first quarter of 2017. This significant earnings growth was primarily driven by a substantial increase in interest income, benefiting from growth in their domestic credit card and auto loan portfolios and higher interest rates, coupled with a notable reduction in the provision for credit losses. The company's total net revenue also saw a healthy 6% increase to $6.9 billion. This growth was supported by a strong performance in the Credit Card segment, which reported a 161% increase in net income, and solid contributions from the Consumer Banking and Commercial Banking segments. Capital One's capital position remains robust, with a Common Equity Tier 1 capital ratio of 10.5% as of March 31, 2018, exceeding regulatory requirements. The company also continued its share repurchase program, buying back approximately $200 million in common stock during the quarter, signaling confidence in its financial health and commitment to returning value to shareholders.

Key Highlights

• 1Net income significantly increased by 66% to $1.3 billion in Q1 2018 compared to $810 million in Q1 2017.
• 2Diluted earnings per share rose by 70% to $2.62 in Q1 2018 from $1.54 in Q1 2017.
• 3Total net revenue grew by 6% to $6.9 billion in Q1 2018.
• 4Provision for credit losses decreased by 16% to $1.7 billion in Q1 2018, primarily due to a smaller allowance build in the domestic credit card portfolio.
• 5The Credit Card segment saw a substantial 161% increase in net income, driven by loan growth and higher interchange fees.
• 6Common Equity Tier 1 capital ratio was healthy at 10.5% as of March 31, 2018.
• 7Capital One repurchased approximately $200 million of its common stock during the first quarter of 2018.

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