1. Capital One Financial Corporation (NYSE:COF) December 5, 2013 Valerie Chan, Hisham Haider Dewan Caleb Pierson, Harout Sahakian

2. Agenda 2 Introduction Company overview Macro-economic overview Industry analysis Financial analysis and projections Valuation Recommendation

3. COMPANY OVERVIEW 3

4. Introduction to Capital One Headquartered in McLean, Virginia One of Nation’s 10 largest banks based on deposits Fourth largest issuer of Visa and MasterCard credit cards 40,000 employees – none are covered under a collective bargaining agreement Dividends - $.30/share each of the last 3 quarters in 2013 4 Source: 2012 Capital One 10K

5. 5 COF Subsidiaries & Business Segments Capital One Bank, National Association (COBNA) Capital One, National Association (CONA) Source: 2012 Capital One 10K Page 1 Credit Card Consumer Banking Commercial Banking

6. Credit Card Source: COF 2012 10K. Pg. 71, 183. Domestic and international Interest income and non-interest income from customers Primary source of revenue $1.5B in 2012 vs. $2.3 in 2011 Post acquisition charges, including provision for credit losses Net income from continuing operations Domestic: California, Texas, New York, Florida, Illinois International: Canada, U.K. Risk Profile 6

7. Consumer Banking Retail banking, home and auto loans Net interest income from loans and deposits and non-interest income from customer fees Primary source of revenue $1.4B in 2012 vs. $809M in 2011 Due to the addition of home loans from the acquisition of ING direct Net income from continuing operations Auto: Texas, California Home: California, New York Retail Banking: Louisiana, New York, Texas Risk Profile Source: COF 2012 10K. Pg. 78, 184. 7

8. Commercial Banking Business banking, commercial and industrial loans Net interest income from loans and deposits and non-interest income from customer fees Primary source of revenue $835M in 2012 vs. $595 in 2011 Increase in loan balances and decrease in loan loss provisions Net income from continuing operations Loans: Northeast Risk Profile Source: COF 2012 10K. Pg. 82, 190. 8

9. Assets by Segment 9 Source: Bank of America Merrill Lynch 2013 Banking & Financial Services Conference November 12, 2013

10. Segment Revenue Trends *in millions Source: Capital IQ 10

11. Operation & Income Trends Source: Capital IQ 11

12. Recent Developments July 2013 Board of Directors approve the repurchase of up to $1B of common shares November 2013 Closed on an agreement to acquire Beech Street Capital, an originator and servicer of multifamily commercial real estate loans November 2013 Richard Fairbank, Founder, CEO, Chairman of the Board sold 910,000 shares for $44M as part of pre- disclosed plan Source: COF 2013 3Q 10Q. Pg. 11. http://www.bloomberg.com/news/2013-11-21/capital-one-ceo-sells-44- million-of-stock-in-november.html?cmpid=yhoohttp://www.bloomberg.com/news/2013-11-21/capital-one-ceo-sells-44- million-of-stock-in-november.html?cmpid=yhoo 12

13. Regulation Dodd-Frank Act CFPB – Consumer Financial Protection Bureau Debit interchange fees Credit CARD ActComprehensive Capital Analysis & Review (CCAR)Federal Deposit Insurance Corporation Improvement Act (FDICIA)USA Patriot ActInternational Regulation: U.K. and Canada Source: COF 2012 10K. Pgs. 9-17. 13

14. MACRO-ECONOMIC OVERVIEW 14

15. 15 U.S. Household debt

16. Treasury Yield Curve 16 Source: ycharts.com Source: federalreserve.gov

17. INDUSTRY ANALYSIS 17

18. Credit Card Issuing Commercial Banking 18 Source: 1) IBISWorld Industry Report 52221, Credit Card Issuing in the US, October 2013 2) IBISWorld Industry Report 52211, Commercial Banking in the US, August 2013

19. Banking More Mobile and Online 19

20. COMPETITIVE POSITION OF COF 20

21. COF Porter's Five Forces Analysis Threat of new entrant (Low) Only 3 new banks were started in 2011 Extensive capital and regulatory requirements Highly competitive industry Large assets base needed to be profitable Board members checked by fed Supplier of funds bargaining power (Low) Loose monetary policy led to increased supply of excess reserve Depositors have to accept low interest rates Borrower power (Medium) Large corporations can switch banks easily Many options for credit cards & consumer loan Consumers have little power over interest rate Threat of substitutes (High) Credit unions, savings & loan, non-banks, retailers issue credit cards, consumer loans, and commercial loans Rivalry among existing firms (High) - 5,937 FDIC insured banks 21 Source: FDIC Statistics At A Glance Sept 2013

22. SWOT Analysis of COF Strengths Credit quality of consumer and commercial loan portfolio Rising interest income High interest margins compared to industry Brand recognition of credit card Adequate capital Weaknesses Credit quality of credit card portfolio Delinquencies and charge-off of the HSBC card portfolio Geographic concentration Opportunities Growth in the banking sector the US Strategic acquisitions & partnerships International expansion Threats Economic slowdown in the U.S. Dodd-Frank Wall Street Reform Act Basel III capital requirements Volatility in financial markets Privacy breach & network security breach 22

23. FINANCIAL ANALYSIS 23

24. 24 Return on Assets vs. Competitors

25. Capital Ratio Balance Sheet as of:Sep-30-2012Sep-30-2013 Tier 1 Capital Ratio % 12.7% 13.1% Total Capital Ratio % 15.0% 15.3% Leverage Ratio % 9.9% 10.1% 25 Source: Capital IQ

26. Tier 1 Capital Ratio vs. Competitors 26 Source: Bank of America Merrill Lynch 2013 Banking & Financial Services Conference, November 12, 2013

27. Asset Quality 27 Source: Capital IQ 20082009201020112012 Sep-30- 2013 Nonperforming Loans / Total Loans % 0.81.41.00.80.5 Nonperforming Assets / Total Assets % 0.60.90.80.60.4 Nonperforming Assets / Equity % 3.65.8 4.23.2 2.8 Allow. for Credit Losses / Total Loans % 4.5 3.12.5 2.3 Net Charge-offs / Total Avg. Loans % 3.54.65.22.91.9NA

28. Loan Loss & Write-Offs 28 Income Statement20082009201020112012Sep-30-2013 Provision For Loan Losses 5,1014,2303,9072,3604,4153,647 Balance Sheet20082009201020112012 Sep-30- 2013 Gross Loans101,34290,767125,947135,892205,889191,814 Allowance For Loan Losses (4,524)(4,127)(5,628)(4,250)(5,156)(4,333)

29. Transforming Source of Funds Source: Bank of America Merrill Lynch 2013 Banking & Financial Services Conference, November 12, 2013 29

30. Profitability & Margin Analysis For the Fiscal Period Ending 20082009201020112012 LTM 12 months 30/092013 Profitability Return on Assets % 0.1% 0.6% 1.7% 1.6% 1.4% 1.5% Margin Analysis EBT Margin % 17.5% 17.6% 36.6% 34.2% 30.9% 35.9% Net Income Margin% (0.5%) 10.1% 22.4% 22.6% 21.5% 22.0% 30 Source: Capital IQ

31. Technical Analysis Current price $72.35* | P/E (ttm): 10.23*| P/B 1.009* 31 Source: Yahoo Finance http://finance.yahoo.com/q/ta?s=COF&t=1y&l=on&z=l&q=l&p=m50%2Cm200&a=&c=http://finance.yahoo.com/q/ta?s=COF&t=1y&l=on&z=l&q=l&p=m50%2Cm200&a=&c= As of 12/4/2013

32. COF Stock Performance vs. Competitors 32 Source: Yahoo Finance http://finance.yahoo.com/q/ta?s=COF&t=1y&l=on&z=l&q=l&p=m50%2Cm200&a=&c=http://finance.yahoo.com/q/ta?s=COF&t=1y&l=on&z=l&q=l&p=m50%2Cm200&a=&c= As of 12/4/2013

33. VALUATION Residual Income, Comparable Company, Benjamin Graham 33

34. 34 Residual Income Model Source: CFA Program 2013 Level 2 Volume 4 Page 373 to 386

35. Definition of Residual Income 35 Source: CFA Program 2013 Level 2 Volume 4 Page 373 to 386

36. Residual Income Valuation 36 20142015201620172018 Beginning Common Equity:$41,750$45,188$49,152$53,540$58,450 Plus: Net Income to Common: 4,5675,1605,6576,2186,853 Plus: Stock Issuances:264267270272275 Less: Stock Repurchases:(700) Less: Common Dividends:(693)(762)(838)(880)(924) Ending Common Equity$45,188$49,152$53,540$58,450$63,954 Residual Income = (Net Income to Common Equity) – (Beginning BV of Equity) X (Cost of Equity) 20142015201620172018 Net Income to Common Equity$4,567$5,160$5,657$6,218$6,853 Beginning BV of Equity$41,750$45,188$49,153$53,541$58,451 (Beginning BV of Equity) X (Cost of Equity) $4,577$4,954$5,389$5,870$6,409 Residual Income-$11$205$268$348$444

37. Residual Income Assumptions 37 Cost of equity using CAPM Beta1.256 Market risk premium (Rm-Rf)6.50% 10 year treasury yeild2.80% Cost of equity using CAPM10.964% Current Value of Common Equity$41,750 Sum of PV of Residual Income from 2014 to 2018$847 PV of Res. Inc. Terminal Value$2,407 Present Value of Equity$45,004 Shares Outstanding577.4 Implied Share Price$77.94 Terminal Value Calculation Terminal NI Growth Rate2.5% Estimated Year 6 NI to Common7,355 Return on Common Equity - Long-Term11.5%

38. Return on Equity 38 Cost of Equity using CAPM10.964%

39. Monte Carlo Simulation Provision For Loan Losses as % of Gross Loan Maximum Extreme distribution with parameters: Likeliest2.50% Scale0.50% 39

40. Public Comparable Company Company Name Weights on multiple American Express Company (NYSE:AXP)5.00% BB&T Corporation (NYSE:BBT)10.00% Discover Financial Services (NYSE:DFS)25.00% Fifth Third Bancorp (NasdaqGS:FITB)15.00% Regions Financial Corporation (NYSE:RF)15.00% The Allstate Corporation (NYSE:ALL)10.00% The Bank of New York Mellon Corporation (NYSE:BK) 5.00% The PNC Financial Services Group, Inc. (NYSE:PNC) 10.00% U.S. Bancorp (NYSE:USB)5.00% SUM100.0% 40

41. Comparable Company Valuation Multiple Multiple value Weight Implied Price per Share Market Cap/Total Revenues2.83 20% $92.23 Market Cap / Forward Total Revenues (Capital IQ) 2.63 15% $85.55 P/Diluted EPS Before Extra13.05 15% $96.29 Forward P/E (Capital IQ)11.73 15% $81.91 Market Cap / EBT Excl Unusual Items 7.61 20% $88.99 P/BV1.78 0% $128.71 P/TangBV2.22 15% $98.63 Implied Price per Share$90.60 41

42. Price to Book Ratio Increasing 42

43. Benjamin Graham’s Formula Current (normal earnings, $Mil.)4,143 Expected annual growth rate (%)2.5 Number of shares577.4 Estimated price per share$78.92 43

44. Valuation Summary Price per share Residual Income$77.94 Relative Valuation$90.60 Benjamin Graham formula$78.92 Current market price 12/05/2013$72.35 44

45. Recommendation 100 Shares of NYSE:COF @ Market Price 45 BUY Cost: $7,235 (at Dec 4, 2013 closing price) Approximately 4.5% of portfolio