Capital One 2014 Annual Report Download - page 86

pertaining to Payment Protection Insurance, which had an unfavorable impact on total net revenue and non-interest
expense in 2012; and (ii) a reduction in the provision for credit losses attributable to lower net charge-offs, reflecting
the improvement in the credit environment in Canada and the U.K.
Consumer Banking Business
The primary sources of revenue for our Consumer Banking business are net interest income from loans and deposits
and non-interest income from service charges and customer-related fees. Expenses primarily consist of the provision
for credit losses, ongoing operating costs, such as salaries and associate benefits, occupancy and equipment costs,
professional services, communications and data processing expenses, as well as marketing expenses.
Our Consumer Banking business generated net income from continuing operations of $1.2 billion, $1.5 billion and
$1.4 billion in 2014, 2013 and 2012, respectively.
Table 7 summarizes the financial results of our Consumer Banking business and displays selected key metrics for
the periods indicated.
Table 7: Consumer Banking Business Results
Change
Year Ended December 31, 2014 vs. 2013 vs.
(Dollars in millions) 2014 2013 2012 2013 2012
Selected income statement data:
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,748 $ 5,905 $ 5,788 (3)% 2%
Non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 684 749 782 (9) (4)
Total net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,432 6,654 6,570 (3) 1
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . 703 656 589 7 11
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,869 3,745 3,871 3 (3)
Income from continuing operations before income taxes . . . 1,860 2,253 2,110 (17) 7
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 665 802 747 (17) 7
Income from continuing operations, net of tax . . . . . . . . . . . $ 1,195 $ 1,451 $ 1,363 (18) 6
Selected performance metrics:
Average loans held for investment:
(1)
Auto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34,769 $ 29,446 $ 24,976 18% 18%
Home loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,589 39,322 42,764 (17) (8)
Retail banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,606 3,699 4,096 (3) (10)
Total consumer banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,964 $ 72,467 $ 71,836 (2) 1
Average yield on loans held for investment
(2)
. . . . . . . . . . . . 6.26% 6.10% 6.28% 16 bps (18) bps
Average deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $168,623 $169,683 $162,637 (1)% 4%
Average deposit interest rate . . . . . . . . . . . . . . . . . . . . . . . . . 0.57% 0.63% 0.70% (6) bps (7) bps
Core deposit intangible amortization . . . . . . . . . . . . . . . . . . $ 108 $ 138 $ 159 (22)% (13)%
Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675 616 531 10 16
Net charge-off rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.95% 0.85% 0.74% 10 bps 11 bps
Net charge-off rate (excluding Acquired Loans) . . . . . . . . . 1.49 1.51 1.45 (2) 6
Auto loan originations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,903 $ 17,388 $ 15,960 20% 9%
64 Capital One Financial Corporation (COF)