Summary
Capital One Financial Corporation (COF) reported a net loss of $1.3 billion ($3.10 per diluted common share) for the first quarter of 2020, a significant downturn from a net income of $1.4 billion ($2.86 per diluted common share) in the same period of 2019. This loss was primarily driven by a substantial increase in the provision for credit losses, amounting to $5.4 billion, up from $1.7 billion in the prior year. This increase reflects the anticipated economic worsening and significant uncertainty stemming from the COVID-19 pandemic, as well as credit deterioration in the company's commercial energy loan portfolio. The company's total net revenue saw a slight increase of 2% to $7.2 billion, supported by higher net interest income which grew 4% to $6.0 billion, benefiting from loan portfolio growth and lower interest expenses on deposits and borrowings due to declining interest rates. However, non-interest income decreased by 5% to $1.2 billion, largely due to market volatility impacting deferred compensation plan investments. The company suspended its share repurchase program in March 2020 in response to the pandemic, though it maintained its quarterly common stock dividend.
Financial Highlights
41 data points| Revenue | $7.25B |
| Operating Income | -$1.34B |
| Interest Expense | $1.08B |
| Net Income | -$1.34B |
| EPS (Basic) | $-3.10 |
| EPS (Diluted) | $-3.10 |
| Shares Outstanding (Basic) | 457.60M |
| Shares Outstanding (Diluted) | 457.60M |
Key Highlights
- 1Net Loss of $1.3 billion ($3.10 per diluted share) in Q1 2020, compared to Net Income of $1.4 billion ($2.86 per diluted share) in Q1 2019.
- 2Provision for credit losses surged by 220% to $5.4 billion, primarily due to COVID-19 impacts and commercial energy loan portfolio deterioration.
- 3Total net revenue increased by 2% to $7.2 billion, driven by a 4% increase in net interest income.
- 4Allowance for credit losses more than doubled from $7.2 billion at year-end 2019 to $14.1 billion at March 31, 2020, reflecting the adoption of CECL and the economic outlook.
- 5Common Equity Tier 1 capital ratio remained strong at 12.0% as of March 31, 2020.
- 6Share repurchase program suspended in March 2020 due to COVID-19.
- 7Total assets increased by 2% to $396.9 billion, while total stockholders' equity decreased by 2% to $56.8 billion, impacted by the net loss and CECL adoption.