UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Introduction
The following unaudited pro forma condensed combined financial information and notes thereto have been prepared in accordance with Article 11 of Regulation S-X in order to give effect to the Mergers and pro forma adjustments described in the accompanying notes.
On February 19, 2024, Capital One Financial Corporation, a Delaware corporation (“Capital One”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Discover Financial Services, a Delaware corporation (“Discover”), and Xxxx Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Capital One (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Discover (the “Merger”), with Discover continuing as the surviving corporation in the Merger (the “Surviving Company”), and immediately following the Merger, the Surviving Company will merge with and into Capital One (the “Second Step Merger”, and together with the Merger, the “Mergers”), with Capital One continuing as the surviving corporation in the Second Step Merger. Immediately following the Second Step Merger, Discover’s wholly owned Delaware-chartered bank subsidiary, Discover Bank, will merge with and into Capital One’s wholly owned national bank subsidiary, Capital One, National Association (the “Bank Merger”), with Capital One, National Association continuing as the surviving entity in the Bank Merger. The Merger Agreement was unanimously approved by the board of directors of each of Capital One, Discover and Merger Sub.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.01 per share, of Discover (“Discover Common Stock”) outstanding immediately prior to the Effective Time, other than certain shares held by Capital One or Discover, will be converted into the right to receive 1.0192 shares (the “Exchange Ratio”) of common stock, par value $0.01 per share, of Capital One (“Capital One Common Stock”). Holders of Discover Common Stock will receive cash in lieu of fractional shares.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Second Step Merger (the “Second Effective Time”), (i) each share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C, par value $0.01 per share, of Discover (“Discover Series C Preferred Stock”) and (ii) each share of 6.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series D, par value $0.01 per share, of Discover (“Discover Series D Preferred Stock” and collectively with the Discover Series C Preferred Stock, the “Discover Preferred Stock”), outstanding immediately prior to the Second Effective Time will be converted into the right to receive one share of an applicable newly created series of preferred stock of Capital One having terms that are not materially less favorable than the Discover Series C Preferred Stock or Discover Series D Preferred Stock, as applicable (“New Capital One Preferred Stock”).
Subject to the terms and conditions of the Merger Agreement, at the Effective Time, (i) each outstanding Discover restricted stock unit award will be converted into a corresponding award with respect to Capital One Common Stock, with the number of shares underlying such award adjusted based on the Exchange Ratio, and (ii) each outstanding Discover performance stock unit award will be converted into a cash-based award, with the number of shares underlying such award determined based on the greater of target and actual performance for awards for which more than one year of the performance period has elapsed, and target performance for awards for which one year or less of the performance period has elapsed, with the per share cash amount determined using the product of the Exchange Ratio and the average of the closing sale prices of Capital One Common Stock for the five trading days ending on the day preceding the closing date of the Mergers. Each such converted Capital One award will otherwise continue to be subject to the same terms and conditions as applied to the corresponding Discover equity award.
The unaudited pro forma condensed combined statement of income for the year ended December 31, 2023 combines the historical results of Capital One and Discover, giving effect to the Mergers and the issuance of shares of Capital One Common Stock and New Capital One Preferred Stock in the Mergers as if those transactions had occurred on January 1, 2023, the first day of Capital One’s fiscal year. The unaudited pro forma condensed combined balance sheet as of December 31, 2023 combines the historical consolidated balance sheets of Capital One and Discover as of December 31, 2023, giving effect to the Mergers and the issuance of shares of Capital One Common Stock and New Capital One Preferred Stock in the Mergers as if those transactions had occurred on December 31, 2023.
The historical consolidated financial information of Capital One and Discover has been adjusted in the accompanying unaudited pro forma condensed combined financial information to give effect to pro forma events that are necessary to account for the Mergers and the issuance of shares of Capital One Common Stock and New Capital One Preferred Stock in the Mergers, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable. The unaudited pro forma condensed combined financial information contained herein does not reflect the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies, impacts of Discover’s contemplation of its disposition of its private student loan portfolio, or any other business changes or synergies that may result from the Mergers. Based on known facts and circumstances and because the Mergers are not contingent on the disposition of Discover’s private student loan portfolio, the unaudited pro forma condensed combined financial information does not reflect any transaction accounting adjustments related to a potential sale of Discover’s private student loan portfolio and presents that portfolio consistent with Discover’s historical audited consolidated financial statements as of December 31, 2023. Certain reclassifications have also been made to conform the historical financial statement presentation of Discover to that of Capital One.
The following unaudited pro forma condensed combined financial information should be read in conjunction with:
• | the accompanying notes to the unaudited pro forma condensed combined financial information; |
• | the separate historical audited consolidated financial statements of Capital One as of and for the fiscal year ended December 31, 2023, and the related notes, included in Capital One’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023; and |
• | the separate historical audited consolidated financial statements of Discover as of and for the fiscal year ended December 31, 2023, and the related notes, included in Discover’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. |
Accounting for the Mergers
The Mergers are being accounted for as a business combination using the acquisition method with Capital One as the accounting acquirer in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Under this method of accounting, the aggregate purchase consideration will be allocated to Discover’s assets acquired and liabilities assumed based upon their estimated fair values at the date of completion of the Mergers. The process of valuing the net assets of Discover immediately prior to the Mergers, as well as evaluating accounting policies for conformity, is preliminary. Any differences between the estimated fair value of the consideration transferred and the estimated fair value of the assets acquired and liabilities assumed will be recorded as goodwill. Accordingly, the purchase price allocation and related adjustments reflected in this unaudited pro forma condensed combined financial information are preliminary and subject to revision until a final determination of fair value of the assets acquired and liabilities assumed is performed. Refer to Note 1 - Basis of Presentation for more information.
All financial data included in the unaudited condensed combined financial information is presented in millions of U.S. Dollars and has been prepared on the basis of U.S. GAAP and Capital One’s accounting policies.
The unaudited pro forma condensed combined financial information presented is for informational purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the Mergers and the issuance of shares of Capital One Common Stock and New Capital One Preferred Stock in the Mergers had been completed on the dates set forth above, nor is it indicative of the future results or financial position of Capital One following the Mergers. The unaudited pro forma adjustments are preliminary and are subject to change as additional information becomes available and as additional analysis is performed. To the extent information was publicly available, such preliminary fair value estimates were corroborated against readily available information, inclusive of fair value marks disclosed on comparable portfolios of financial assets and liabilities. The preliminary pro forma adjustments have been made solely for the purpose of providing the unaudited pro forma condensed combined financial statements.
1
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of December 31, 2023
($ in millions)
Capital One Historical |
Discover Reclassed (Note 2) |
Transaction Accounting Adjustments |
Note 4 | Pro Forma Combined |
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Assets |
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Cash and cash equivalents |
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Cash and due from banks |
$ | 4,903 | $ | 2,000 | $ | (150 | ) | (a | ) | $ | 6,753 | |||||||||
Interest-bearing deposits and other short-term investments |
38,394 | 9,685 | — | 48,079 | ||||||||||||||||
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Total cash and cash equivalents |
43,297 | 11,685 | (150 | ) | 54,832 | |||||||||||||||
Restricted cash for securitization investors |
458 | 43 | — | 501 | ||||||||||||||||
Securities available for sale |
79,117 | 13,655 | (19 | ) | (b | ) | 92,753 | |||||||||||||
Loans held for investment: |
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Unsecuritized loans held for investment |
289,229 | 97,969 | 436 | (c | ) | 387,634 | ||||||||||||||
Loans held in consolidated trusts |
31,243 | 30,440 | 956 | (d | ) | 62,639 | ||||||||||||||
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Total loans held for investment |
320,472 | 128,409 | 1,392 | 450,273 | ||||||||||||||||
Allowance for credit losses |
(15,296 | ) | (9,283 | ) | — | (e | ) | (24,579 | ) | |||||||||||
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Net loans held for investment |
305,176 | 119,126 | 1,392 | 425,694 | ||||||||||||||||
Loans held for sale |
854 | — | 854 | |||||||||||||||||
Premises and equipment, net |
4,375 | 1,091 | — | 5,466 | ||||||||||||||||
Interest receivable |
2,478 | 1,365 | — | 3,843 | ||||||||||||||||
Goodwill |
15,065 | 255 | 7,222 | (f | ) | 22,542 | ||||||||||||||
Other assets |
27,644 | 4,302 | 7,675 | (g | ) | 39,621 | ||||||||||||||
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Total assets |
$ | 478,464 | $ | 151,522 | $ | 16,120 | $ | 646,106 | ||||||||||||
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Liabilities: |
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Interest payable |
$ | 649 | $ | $ | — | $ | 649 | |||||||||||||
Deposits: |
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Non-interest-bearing deposits |
28,024 | 1,438 | — | 29,462 | ||||||||||||||||
Interest-bearing deposits |
320,389 | 107,493 | 93 | (h | ) | 427,975 | ||||||||||||||
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Total deposits |
348,413 | 108,931 | 93 | 457,437 | ||||||||||||||||
Securitized debt obligations |
18,043 | 10,993 | (158 | ) | (i | ) | 28,878 | |||||||||||||
Other debt: |
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Federal funds purchased and securities loaned or sold under agreements to repurchase |
538 | — | 538 | |||||||||||||||||
Senior and subordinated notes |
31,248 | 9,588 | (119 | ) | (j | ) | 40,717 | |||||||||||||
Other borrowings |
27 | 750 | — | 777 | ||||||||||||||||
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Total other debt |
31,813 | 10,338 | (119 | ) | 42,032 | |||||||||||||||
Other liabilities |
21,457 | 6,432 | — | 27,889 | ||||||||||||||||
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Total liabilities |
420,375 | 136,694 | (184 | ) | 556,885 | |||||||||||||||
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Stockholders’ equity |
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Preferred stock |
— | 0 | — | (k | ) | 0 | ||||||||||||||
Common stock |
7 | 6 | (3 | ) | (k | ) | 10 | |||||||||||||
Additional paid-in capital, net |
35,541 | 5,609 | 30,488 | (k | ) | 71,638 | ||||||||||||||
Retained earnings |
60,945 | 30,448 | (35,416 | ) | (k | ) | 55,977 | |||||||||||||
Accumulated other comprehensive loss |
(8,268 | ) | (225 | ) | 225 | (k | ) | (8,268 | ) | |||||||||||
Treasury stock, at cost |
(30,136 | ) | (21,010 | ) | 21,010 | (k | ) | (30,136 | ) | |||||||||||
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Total stockholders’ equity |
58,089 | 14,828 | 16,304 | 89,221 | ||||||||||||||||
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Total liabilities and stockholders’ Equity |
$ | 478,464 | $ | 151,522 | $ | 16,120 | $ | 646,106 | ||||||||||||
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See the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information
2
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
For the Year Ended December 31, 2023
($ in millions, except share and per share data)
Capital One Historical |
Discover Reclassed (Note 2) |
Transaction Accounting Adjustments |
Note 5 | Pro Forma Combined |
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Interest income: |
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Loans, including loans held for sale |
$ | 37,410 | $ | 16,953 | $ | (1,067 | ) | (a | ) | $ | 53,296 | |||||||||
Investment securities |
2,550 | 449 | — | 2,999 | ||||||||||||||||
Other |
1,978 | 443 | — | 2,421 | ||||||||||||||||
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Total interest income |
41,938 | 17,845 | (1,067 | ) | 58,716 | |||||||||||||||
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Interest expense: |
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Deposits |
9,489 | 3,886 | (31 | ) | (b | ) | 13,344 | |||||||||||||
Securitized debt obligations |
959 | — | 53 | (c | ) | 1,012 | ||||||||||||||
Senior and subordinated notes |
2,204 | 855 | 40 | (d | ) | 3,099 | ||||||||||||||
Other borrowings |
45 | 5 | — | 50 | ||||||||||||||||
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Total interest expense |
12,697 | 4,746 | 62 | 17,505 | ||||||||||||||||
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Net interest income |
29,241 | 13,099 | (1,129 | ) | 41,211 | |||||||||||||||
Provision for credit losses |
10,426 | 6,018 | 6,422 | (e | ) | 22,866 | ||||||||||||||
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Net interest income after provision for credit losses |
18,815 | 7,081 | (7,551 | ) | 18,345 | |||||||||||||||
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Non-interest income: |
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Interchange fees, net |
4,793 | 1,447 | — | 6,240 | ||||||||||||||||
Service charges and other customer-related fees |
1,667 | 1,238 | — | 2,905 | ||||||||||||||||
Net securities gains (losses) |
(34 | ) | — | — | (34 | ) | ||||||||||||||
Other |
1,120 | 76 | — | 1,196 | ||||||||||||||||
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Total non-interest income |
7,546 | 2,761 | — | 10,307 | ||||||||||||||||
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Non-interest expense: |
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Salaries and associate benefits |
9,302 | 2,434 | — | 11,736 | ||||||||||||||||
Occupancy and equipment |
2,160 | 89 | — | 2,249 | ||||||||||||||||
Marketing |
4,009 | 1,164 | — | 5,173 | ||||||||||||||||
Professional services |
1,268 | 1,041 | 150 | (f | ) | 2,459 | ||||||||||||||
Communications and data processing |
1,383 | 608 | — | 1,991 | ||||||||||||||||
Amortization of intangibles |
82 | — | 2,621 | (g | ) | 2,703 | ||||||||||||||
Other |
2,112 | 680 | — | 2,792 | ||||||||||||||||
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Total non-interest expense |
20,316 | 6,016 | 2,771 | 29,103 | ||||||||||||||||
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Income from continuing operations before income taxes |
6,045 | 3,826 | (10,322 | ) | (451 | ) | ||||||||||||||
Income tax provision |
1,158 | 886 | (2,520 | ) | (h | ) | (476 | ) | ||||||||||||
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Net income |
4,887 | 2,940 | (7,802 | ) | 25 | |||||||||||||||
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Dividends and undistributed earnings allocated to participating securities |
(77 | ) | (19 | ) | — | (96 | ) | |||||||||||||
Preferred stock dividends |
(228 | ) | (62 | ) | — | (290 | ) | |||||||||||||
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Net income available to common stockholders |
$ | 4,582 | $ | 2,859 | $ | (7,802 | ) | $ | (361 | ) | ||||||||||
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Basic earnings (loss) per share |
$ | 11.98 | (i | ) | $ | (0.57 | ) | |||||||||||||
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Diluted earnings (loss) per share |
$ | 11.95 | (i | ) | $ | (0.57 | ) | |||||||||||||
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See the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information.
3
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Note 1 - Basis of Presentation
The unaudited pro forma condensed combined financial information and related notes are prepared in accordance with Article 11 of Regulation S-X.
As discussed in Note 2, certain reclassifications were made to align Discover with Capital One’s financial statement presentation. Capital One is currently in the process of evaluating Discover’s accounting policies with the information currently available and has determined that no significant adjustments are necessary to conform Discover’s financial statements to the accounting policies used by Capital One. Therefore, the only changes noted herein are those related to presentation. As a result of this ongoing review and as more information becomes available, additional differences could be identified between the accounting policies of the two companies until finalized upon completion of the Mergers.
The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting in accordance with ASC 805, with Capital One as the accounting acquirer, using the fair value concepts defined in ASC Topic 820, Fair Value Measurement, and based on the historical financial statements of Capital One and Discover. Under ASC 805, all assets acquired and liabilities assumed in a business combination are recognized and measured at their fair values as of the acquisition date, while transaction costs associated with the business combination are expensed as incurred. The excess of purchase consideration over the estimated fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.
The allocation of the aggregate purchase consideration depends upon certain estimates and assumptions, all of which are preliminary. As of the date of this filing, Capital One has not completed the valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair market value of Discover’s assets to be acquired or liabilities to be assumed, other than a preliminary estimate for intangible assets and certain financial assets and financial liabilities. Accordingly, apart from the aforementioned, certain Discover assets and liabilities are presented at their respective carrying amounts and should therefore be treated as preliminary. A final determination of the fair value of Discover’s assets and liabilities will be based on Discover’s actual assets and liabilities as of the closing date of the Mergers and, therefore, cannot be made prior to the consummation of the Mergers. The allocation of the aggregate purchase consideration has been made for the purpose of developing the unaudited pro forma condensed combined financial information. The final determination of fair values of assets acquired and liabilities assumed relating to the Mergers could differ materially from the preliminary allocation of aggregate purchase consideration. The final valuation will be based on the actual net tangible and intangible assets of Discover existing at the acquisition date.
The unaudited pro forma condensed combined balance sheet, as of December 31, 2023, and the unaudited pro forma condensed combined statement of income for the year ended December 31, 2023, presented herein, are based on the historical financial statements of Capital One and Discover. The unaudited pro forma condensed combined balance sheet as of December 31, 2023 is presented as if Capital One’s acquisition of Discover had occurred on December 31, 2023 and combines the historical balance sheet of Capital One as of December 31, 2023 with the historical balance sheet of Discover as of December 31, 2023. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2023 has been prepared as if the Mergers had occurred on January 1, 2023 and combines Capital One’s historical statement of income for the fiscal year ended December 31, 2023 with Discover’s historical statement of income for the fiscal year ended December 31, 2023.
The unaudited pro forma condensed combined financial information does not reflect any anticipated synergies or dis-synergies, operating efficiencies or cost savings that may result from the Mergers or any acquisition and integration costs that may be incurred. The pro forma adjustments represent management’s best estimates and are based upon currently available information and certain assumptions that Capital One believes are reasonable under the circumstances. There are no material transactions between Capital One and Discover during the period presented. Accordingly, adjustments to eliminate transactions between Capital One and Discover have not been reflected in the unaudited pro forma condensed combined financial information.
4
Note 2 – Conforming Accounting Policies and Reclassification Adjustments
During the preparation of this unaudited pro forma condensed combined financial information, management performed a preliminary analysis of Discover’s financial information to identify differences in accounting policies as compared to those of Capital One and differences in financial statement presentation as compared to the presentation of Capital One. With the information currently available, Capital One is not aware of any differences in accounting policies that would have a material impact on the unaudited pro forma condensed combined financial statements. However, certain reclassification adjustments have been made to conform Discover’s historical financial statement presentation to Capital One’s historical financial statement presentation. Following the completion of the Mergers, or as more information becomes available, Capital One will finalize the review of accounting policies and reclassifications, which could be materially different from the amounts set forth in the unaudited pro forma condensed combined financial information presented herein.
A. | The following items represent certain reclassification adjustments to conform Discover’s Consolidated Balance Sheet presentation to Capital One’s Consolidated Balance Sheet presentation, which have no impact on net assets and are summarized below (in millions): |
5
Capital One Consolidated Balance Sheet Line Items |
Discover
Historical Line Items |
Discover As of December 31, 2023 |
Reclassification | Note 2A |
Discover Reclassed As of December 31, 2023 |
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Assets |
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Cash and cash equivalents |
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Cash and due from banks |
$ | — | $ | 2,000 | (i | ) | $ | 2,000 | ||||||||||
Interest-bearing deposits and other short-term investments |
— | 9,685 | (i | ) | 9,685 | |||||||||||||
Cash and cash equivalents | 11,685 | (11,685 | ) | (i | ) | — | ||||||||||||
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Total cash and cash equivalents |
11,685 | — | 11,685 | |||||||||||||||
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Restricted cash for securitization investors |
Restricted cash | 43 | — | 43 | ||||||||||||||
Securities available for sale |
Investment securities | 13,655 | — | 13,655 | ||||||||||||||
Loans held for investment: |
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Unsecuritized loans held for investment |
— | 97,969 | (ii | ) | 97,969 | |||||||||||||
Loans held in consolidated trusts |
— | 30,440 | (ii | ) | 30,440 | |||||||||||||
Loan receivables | 128,409 | (128,409 | ) | (ii | ) | — | ||||||||||||
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Total loans held for investment |
128,409 | — | 128,409 | |||||||||||||||
Allowance for credit losses |
Allowance for credit losses | (9,283 | ) | — | (9,283 | ) | ||||||||||||
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Net loans held for investment |
119,126 | — | 119,126 | |||||||||||||||
Loans held for sale |
— | — | — | |||||||||||||||
Premises and equipment, net |
Premises and equipment, net | 1,091 | — | 1,091 | ||||||||||||||
Interest receivable |
— | 1,365 | (iii | ) | 1,365 | |||||||||||||
Goodwill |
Goodwill | 255 | — | 255 | ||||||||||||||
Other assets |
Other assets | 5,667 | (1,365 | ) | (iii | ) | 4,302 | |||||||||||
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Total assets |
$ | 151,522 | $ | — | $ | 151,522 | ||||||||||||
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Liabilities: |
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Interest payable |
$ | — | $ | — | $ | — | ||||||||||||
Deposits: |
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Non-interest-bearing deposits |
Non-interest-bearing deposit accounts | 1,438 | — | 1,438 | ||||||||||||||
Interest-bearing deposits |
Interest-bearing deposit accounts | 107,493 | — | 107,493 | ||||||||||||||
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Total deposits |
108,931 | — | 108,931 | |||||||||||||||
Securitized debt obligations |
— | 10,993 | (iv | ) | 10,993 | |||||||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase |
— | — | — | |||||||||||||||
Senior and subordinated notes |
Long-term borrowings | 20,581 | (10,993 | ) | (iv | ) | 9,588 | |||||||||||
Other borrowings |
Short-term borrowings | 750 | — | 750 | ||||||||||||||
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Total other debt |
21,331 | (10,993 | ) | 10,338 | ||||||||||||||
Other liabilities |
Accrued expenses and other liabilities | 6,432 | — | 6,432 | ||||||||||||||
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Total liabilities |
136,694 | — | 136,694 | |||||||||||||||
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Stockholders’ equity: |
||||||||||||||||||
Preferred stock |
Preferred Stock | 1,056 | (1,056 | ) | (v | ) | 0 | |||||||||||
Common stock |
Common Stock | 6 | — | 6 | ||||||||||||||
Additional paid-in capital, net |
Additional paid-in capital | 4,553 | 1,056 | (v | ) | 5,609 |
6
Retained earnings |
Retained earnings | 30,448 | — | 30,448 | ||||||||||||||
Accumulated other comprehensive income (loss) |
Accumulated other comprehensive loss | (225 | ) | — | (225 | ) | ||||||||||||
Treasury stock, at cost |
Treasury stock, at cost | (21,010 | ) | — | (21,010 | ) | ||||||||||||
|
|
|
|
|||||||||||||||
Total stockholders’ equity |
14,828 | — | 14,828 | |||||||||||||||
|
|
|
|
|||||||||||||||
Total liabilities and stockholders’ equity |
$ | 151,522 | $ | — | $ | 151,522 | ||||||||||||
|
|
|
|
i. | To reclassify Discover’s Cash and cash equivalents balance into the two component line items presented by Capital One (Cash and due from banks and Interest-bearing deposits and other short-term investments). |
ii. | To reclassify Discover’s Loans receivable balance into the two component line items presented by Capital One (Unsecuritized loans held for investment and Loans held in consolidated trusts). |
iii. | To reclassify $1,365 million of accrued interest receivable within Other assets to Interest receivable. |
iv. | To reclassify $10,993 million of Long-term borrowings to Securitized debt obligations. |
v. | To reclassify $1,056 million of the excess Preferred stock over par, $0.01 per share, to Additional paid-in capital, net. |
7
B. | The following items represent certain reclassification adjustments to conform Discover’s Consolidated Statement of Income presentation to Capital One’s Consolidated Statement of Income presentation, which have no impact on Net income and are summarized below (in millions): |
Capital Consolidated Statement of Income Line Items |
Discover Historical |
Discover Year Ended December 31, 2023 |
Reclassification | Note 2B |
Discover Reclassed Year Ended December 31, 2023 |
|||||||||||||||||||||||||
Interest income: |
Interest income | $ | $ | $ | ||||||||||||||||||||||||||
Loans, including loans held for sale |
Credit card loans | 14,438 | 2,515 | (i | ) | 16,953 | ||||||||||||||||||||||||
Other loans | 2,515 | (2,515 | ) | (i | ) | — | ||||||||||||||||||||||||
Investment securities |
Investment securities | 449 | — | 449 | ||||||||||||||||||||||||||
Other |
Other interest income | 443 | — | 443 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Total interest income |
Total interest income | 17,845 | — | 17,845 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Interest expense: |
Interest expense | |||||||||||||||||||||||||||||
Deposits |
Deposits | 3,886 | — | 3,886 | ||||||||||||||||||||||||||
Securitized debt obligations |
— | — | — | |||||||||||||||||||||||||||
Senior and subordinated notes |
Long-term borrowings | 855 | — | 855 | ||||||||||||||||||||||||||
Other borrowings |
Short-term borrowings | 5 | — | 5 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Total interest expense |
4,746 | — | 4,746 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Net interest income |
Net interest income | 13,099 | — | 13,099 | ||||||||||||||||||||||||||
Provision for credit losses |
Provision for credit losses | 6,018 | — | 6,018 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Net interest income after provision for credit losses |
Net interest income after provision for credit losses | 7,081 | — | 7,081 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Non-interest income: |
Other income | |||||||||||||||||||||||||||||
Interchange fees, net |
Discount and interchange revenue, net | 1,447 | — | 1,447 | ||||||||||||||||||||||||||
Service charges and other customer-related fees |
— | 1,238 | (ii | ) | 1,238 | |||||||||||||||||||||||||
Protection products revenue | 172 | (172 | ) | (ii | ) | — | ||||||||||||||||||||||||
Loan fee income | 763 | (763 | ) | (ii | ) | — | ||||||||||||||||||||||||
Transaction processing revenue | 303 | (303 | ) | (ii | ) | — | ||||||||||||||||||||||||
Net securities gains (losses) |
— | — | — | |||||||||||||||||||||||||||
Other |
Other income | 85 | (9 | ) | (iii | ) | 76 | |||||||||||||||||||||||
(Losses) gains on equity investments | (9 | ) | 9 | (iii | ) | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Total non-interest income |
Total other income | 2,761 | — | 2,761 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Non-interest expense: |
Other expense | |||||||||||||||||||||||||||||
Salaries and associate benefits |
Employee compensation and benefits | 2,434 | — | 2,434 | ||||||||||||||||||||||||||
Occupancy and equipment |
Premises and equipment | 89 | — | 89 | ||||||||||||||||||||||||||
Marketing |
Marketing and business development | 1,164 | — | 1,164 | ||||||||||||||||||||||||||
Professional services |
Professional fees | 1,041 | — | 1,041 | ||||||||||||||||||||||||||
Communications and data processing |
Information processing and communications | 608 | — | 608 | ||||||||||||||||||||||||||
Amortization of intangibles |
— | — | — | |||||||||||||||||||||||||||
Other |
Other expense | 680 | — | 680 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Total non-interest expense |
Total other expense | 6,016 | — | 6,016 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Income from continuing operations before income taxes |
Income before income taxes | 3,826 | — | 3,826 | ||||||||||||||||||||||||||
Income tax provision |
Income tax expense | 886 | — | 886 | ||||||||||||||||||||||||||
|
|
|
|
|
|
8
|
|
|
|
|||||||||||||||||||||||
Net Income |
Net Income | 2,940 | — | 2,940 | ||||||||||||||||||||||
Dividends and undistributed earnings allocated to participating securities |
Income allocated to participating securities | (19 | ) | — | (19 | ) | ||||||||||||||||||||
Preferred stock dividends |
Preferred stock dividends | (62 | ) | — | (62 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
Net income available to common stockholders |
Net income allocated to common stockholders | $ | 2,859 | $ | — | $ | 2,859 | |||||||||||||||||||
|
|
|
|
|
|
i. | To reclassify Interest income from Other loans to Interest income from Loans, including loans held for sale. |
ii. | To reclassify Protection products revenue, Loan fee income, and Transaction processing revenue to Service charges and other customer-related fees. |
iii. | To reclassify (Losses) gains on equity investments to Other within Non-interest income. |
9
Note 3 – Preliminary Purchase Price Allocation
Estimated preliminary purchase consideration
The following table summarizes the determination of the preliminary estimated purchase consideration for Discover with a sensitivity analysis assuming a 10% increase and 10% decrease in the price per share of Capital One Common Stock and a sensitivity in the carrying value of Discover Preferred Stock from March 8, 2024 baseline with its impact on the preliminary goodwill.
(in millions, expect per share data) |
Amount | |||
Share consideration: |
||||
Shares of Discover Common Stock issued and outstanding immediately prior to the Mergers (i) |
250,555,294 | |||
Exchange Ratio (ii) |
1.0192 | |||
|
|
|||
Estimated number of shares of Capital One Common Stock to be issued in the Mergers |
255,365,956 | |||
Price per share of Capital One Common Stock as of March 8, 2024 |
$ | 137.23 | ||
|
|
|||
Estimated fair value of consideration for outstanding common stock |
35,044 | |||
Estimated fair value of consideration for preferred stock (iii) |
1,056 | |||
|
|
|||
Estimated fair value of preliminary purchase price consideration (iv) |
$ | 36,100 | ||
|
|
i) | Assumed based on Discover’s shares of common stock issued and outstanding as of March 8, 2024. |
ii) | Exchange Ratio pursuant to the terms of the Merger Agreement. |
iii) | In connection with the Mergers, Capital One will convert the Discover Series C Preferred Stock and the Discover Series D Preferred Stock into New Capital One Preferred Stock of Capital One. At this time, there is not sufficient and reliable information available for Capital One to complete the analysis and calculations in sufficient detail necessary to determine whether any adjustment to the current carrying value is reasonable. Capital One performed a sensitivity analysis of the potential difference between carrying value and fair value and determined it to be not significant for the purpose of these unaudited pro forma condensed combined financial statements. |
iv) | In connection with the Mergers, Capital One has agreed to convert certain equity awards held by Discover employees into Capital One equity awards. At this time, Capital One has not completed its analysis and calculations in sufficient detail related to eligible employees and vesting schedules in order to quantify a pro forma adjustment. Any resulting adjustment may result in the recognition of an incremental component of purchase consideration transferred, which is not currently reflected in the preliminary estimated purchase consideration. |
10
The value of the purchase consideration to be paid by Capital One in shares of Capital One Common Stock and New Capital One Preferred Stock upon the consummation of the Mergers will be determined based on the closing price of Capital One Common Stock and New Capital One Preferred Stock on the closing date and the number of issued and outstanding shares of Discover Common Stock and Discover Preferred Stock immediately prior to the closing. Actual adjustments may differ from the amounts reflected in the unaudited pro forma condensed combined financial information, and the differences may be material. As the preliminary estimated purchase consideration could significantly differ from the amounts presented due to movements in Capital One share price up to the closing date. A sensitivity analysis related to the fluctuation in Capital One share price was performed to assess the impact a hypothetical change of 10% on the closing price of Capital One Common Stock and carrying value of Discover Preferred Stock on March 8, 2024 would have on the estimated preliminary aggregate purchase consideration and its impact on the preliminary goodwill as of the closing date:
Share Price | Estimated Consideration (Equity Portion) |
Preliminary Goodwill Impact |
||||||||||
Capital One Common stock: |
||||||||||||
10% increase |
$ | 150.95 | $ | 38,548 | $ | 3,504 | ||||||
10% decrease |
$ | 123.51 | $ | 31,539 | $ | (3,504 | ) | |||||
New Capital One Preferred stock: |
||||||||||||
10% increase |
$ | 1,162 | $ | 106 | ||||||||
10% decrease |
$ | 950 | $ | (106 | ) |
Preliminary purchase consideration allocation
The assumed accounting for the Mergers, including the preliminary purchase consideration, is based on provisional amounts, and the associated purchase accounting is not final. The preliminary allocation of the purchase price to the acquired assets and assumed liabilities was based upon preliminary estimates of fair value. The final determination of the estimated fair values, the assets’ useful lives, and the amortization methods are dependent upon certain valuations and other analyses that have not yet been completed. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information. The unaudited pro forma adjustments are based upon available information and certain assumptions that Capital One believes are reasonable under the circumstances. The purchase price adjustments relating to the Discover and Capital One combined financial information are preliminary and subject to change, as additional information becomes available and as additional analyses are performed.
11
The following table summarizes the allocation of the preliminary purchase price consideration to the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed of Discover, as if the Mergers had been completed on December 31, 2023, with the excess recorded to Goodwill:
(in millions) |
Amount | |||
Preliminary fair value of assets acquired: |
||||
Cash and cash equivalents |
$ | 11,728 | ||
Securities available for sale |
13,636 | |||
Loans held for investment, net of Allowance for credit losses |
126,940 | |||
Premises and equipment, net |
1,091 | |||
Interest receivable |
1,365 | |||
Intangible assets |
10,579 | |||
Other assets |
(206 | ) | ||
Preliminary fair value of liabilities assumed: |
||||
Non-interest-bearing deposits |
1,438 | |||
Interest-bearing deposits |
107,586 | |||
Securitized debt obligations |
10,835 | |||
Senior and subordinated notes |
9,469 | |||
Other borrowings |
750 | |||
Other liabilities |
6,432 | |||
|
|
|||
Preliminary fair value of net assets acquired |
28,623 | |||
|
|
|||
Preliminary Goodwill |
7,477 | |||
|
|
|||
Estimated preliminary purchase price consideration |
$ | 36,100 | ||
|
|
Note 4 – Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet
The following pro forma adjustments have been reflected in the Transaction Accounting Adjustments column in the accompanying unaudited pro forma condensed combined balance sheet as of December 31, 2023. All adjustments are based on preliminary assumptions and valuations, which are subject to change.
(a) Represents an adjustment of ($150) million to Cash and due from banks for the payment of expected transaction costs related to the Mergers for legal fees, advisory services, and accounting and other professional fees.
(b) Represents an adjustment of ($19) million to Securities available for sale to reflect the estimated fair value of residential mortgage-backed securities. The fair value estimate was prepared in a manner consistent with both Discover’s most recent audited financial statements and Capital One’s internal fair value measurements for similar instruments. Detailed valuations have not been performed and, accordingly, the fair value adjustment reflects preliminary estimates made by Capital One and is subject to change once further analyses are performed and as additional information becomes available.
12
(c) Represents adjustments to Unsecuritized loans held for investment consisting of the following:
(in millions) |
Amount | |||
Estimate of fair value related to current interest rates and liquidity |
$ | 5,943 | ||
Estimate of lifetime credit losses on acquired Unsecuritized loans held for investment |
(7,911 | ) | ||
|
|
|||
Net fair value pro forma adjustments |
(1,968 | ) | ||
Gross up of Purchase Credit Deteriorated (“PCD”) loans for credit mark (see Note e below for allowance for credit loss) |
2,404 | |||
|
|
|||
Net pro forma transaction accounting adjustment to Unsecuritized loans held for investment |
$ | 436 |
The fair value estimate was prepared in a manner consistent with both Discover’s most recent audited financial statements and Capital One’s internal income approach. Detailed valuations have not been performed and, accordingly, the fair value adjustment reflects preliminary estimates made by Capital One and is subject to change once further analyses are performed and as additional information becomes available.
(d) Represents adjustments to Loans held in consolidated trusts consisting of the following:
(in millions) |
Amount | |||
Estimate of fair value related to current interest rates and liquidity |
$ | 1,871 | ||
Estimate of lifetime credit losses on acquired Loans held in consolidated trusts |
(1,372 | ) | ||
|
|
|||
Net fair value pro forma adjustments |
499 | |||
Gross up of PCD loans for credit xxxx (see Note e below for allowance for credit loss) |
457 | |||
|
|
|||
Net pro forma transaction accounting adjustment to Loans held in consolidated trusts |
$ | 956 |
The fair value estimate was prepared in a manner consistent with both Discover’s most recent audited financial statements and Capital One’s internal income approach. Detailed valuations have not been performed and, accordingly, the fair value adjustment reflects preliminary estimates made by Capital One and is subject to change once further analyses are performed and as additional information becomes available.
(e) Represents adjustments to Allowance for credit losses consisting of the following:
(in millions) |
Amount | |||
Reversal of historical Discover Allowance for credit losses |
$ | 9,283 | ||
Establishment of the Allowance for credit losses for PCD loans’ estimated lifetime losses |
(2,861 | ) | ||
|
|
|||
Net pro forma transaction accounting adjustments to Allowance for credit losses |
6,422 | |||
Establishment of the Allowance for credit losses for non-PCD loans’ estimated lifetime losses |
(6,422 | ) | ||
|
|
|||
Net change to Allowance for credit losses resulting from the Mergers |
$ | — |
For purposes of this pro forma presentation, the non-PCD loans portfolio and PCD loans portfolio were estimated to have a weighted-average life of 3 years, and 1 year, respectively.
13
(f) Represents an adjustment to Goodwill to reflect the resulting goodwill that would have been recorded if the Mergers occurred on January 1, 2023:
(in millions) |
Amount | |||
Goodwill resulting from the Mergers (Note 3) |
$ | 7,477 | ||
Less: Elimination of Discover’s historical Goodwill |
(255 | ) | ||
|
|
|||
Net pro forma transaction accounting adjustments to Goodwill |
$ | 7,222 |
(g) Represents adjustments to Other Assets consisting of the following:
(in millions) |
Amount | Estimated Useful Life (Years) |
||||||
Estimated Fair Value - Purchased Credit Card Relationships (i) |
$ | 10,226 | 7 | |||||
Estimated Fair Value - Core Deposits (i) |
353 | 10 | ||||||
Estimated deferred income taxes (ii) |
(2,904 | ) | ||||||
|
|
|
|
|||||
Net pro forma transaction accounting adjustments to Other Assets |
$ | 7,675 |
(i) The estimated fair values for identifiable intangible assets are preliminary and are based on a market participant approach. As the preliminary estimated fair values could significantly differ from the amounts presented a sensitivity analysis was performed to assess the impact of a hypothetical change of 10%. A 10% change in the valuation of intangible assets would cause a corresponding increase or decrease in the intangible assets by approximately $1,058 million. The amount of intangibles following the Mergers may differ significantly based upon the final assigned fair value of each identifiable intangible asset. The identification and valuation of intangible assets is preliminary and subject to change and could vary materially from the final determination of the fair value.
(ii) Represents an adjustment for the estimated tax impacts of the pro forma adjustments to deferred income taxes as a result of purchase accounting in the unaudited pro forma condensed combined balance sheet by using a statutory tax rate of 24.4% for the year ended December 31, 2023. The total effective tax rate of Capital One following the Mergers could be significantly different depending on the post-acquisition geographical mix of income and other factors. Because the tax rate used for this unaudited pro forma condensed combined financial information is an estimate, it will likely vary from the actual rate in periods subsequent to the completion of the business combination and those differences may be material.
14
(h) Represents an adjustment of $93 million to Interest Bearing Deposits to reflect the estimated fair value of time deposits. The fair value estimate was prepared in a manner consistent with both Discover’s most recent audited financial statements and Capital One’s internal fair value measurements for similar instruments. Detailed valuations have not been performed and, accordingly, the fair value adjustment reflects preliminary estimates made by Capital One and is subject to change once further analyses are performed and as additional information becomes available.
(i) Represents an adjustment of ($158) million to Securitized debt obligations to reflect the estimated fair value of long-term borrowings – owed to securitization investors. The fair value estimate was prepared in a manner consistent with both Discover’s most recent audited financial statements and Capital One’s internal fair value measurements for similar instruments. Detailed valuations have not been performed and, accordingly, the fair value adjustment reflects preliminary estimates made by Capital One and is subject to change once further analyses are performed and as additional information becomes available.
(j) Represents an adjustment of ($119) million to Senior and Subordinated Notes to reflect the estimated fair value of other long-term borrowings. The fair value estimate was prepared in a manner consistent with both Discover’s most recent audited financial statements and Capital One’s internal fair value measurements for similar instruments. Detailed valuations have not been performed and, accordingly, the fair value adjustment reflects preliminary estimates made by Capital One and is subject to change once further analyses are performed and as additional information becomes available.
(k) Represents adjustments to Stockholders’ equity consisting of the following:
(in millions) |
Preferred Stock |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated other comprehensive loss |
Treasury Stock |
||||||||||||||||||
Pro forma transaction accounting adjustments: |
||||||||||||||||||||||||
Elimination of Discover’s historical equity balances |
$ | 0 | $ | (6 | ) | $ | (5,609 | ) | $ | (30,448 | ) | $ | 225 | $ | 21,010 | |||||||||
Issuance of shares of Capital One common stock |
— | 3 | 35,041 | — | — | — | ||||||||||||||||||
Issuance of shares of Capital One preferred stock |
(0 | ) | — | 1,056 | — | — | — | |||||||||||||||||
Establishment of the Allowance for credit losses for non-PCD loans estimated lifetime losses |
— | — | — | (4,855 | ) | — | — | |||||||||||||||||
Represents after-tax transaction fees and expenses related to the Mergers |
— | — | — | (113 | ) | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net pro forma transaction accounting adjustments to equity |
$ | — | $ | (3 | ) | $ | 30,488 | $ | (35,416 | ) | $ | 225 | 21,010 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
15
Note 5 – Pro Forma Adjustments to the Unaudited Condensed Combined Statement of Income
The following pro forma adjustments have been included in the Transaction Accounting Adjustments column to give effect as if the Mergers had been completed on January 1, 2023 in the accompanying unaudited pro forma condensed combined statement of income for the fiscal year ended December 31, 2023:
(a) Represents adjustments to Interest income consisting of the following:
(in millions) |
For the Year Ended December 31, 2023 |
|||
Pro forma transaction accounting adjustments: |
||||
Amortization of fair value adjustments to Unsecuritized loans held for investments |
$ | (593 | ) | |
Amortization of fair value adjustments to Loans held in consolidated trusts |
(474 | ) | ||
|
|
|||
Net pro forma transaction accounting adjustments to Loans, including loans held for sale income |
$ | (1,067 | ) |
Pro forma amortization is preliminary and based on the use of straight-line amortization over 3 years and 1 year for non-PCD loans and PCD loans, respectively. The amount of amortization following the Mergers may differ significantly between periods based upon the final value assigned and accretion methodology.
(b) Represents an adjustment of ($31) million to Deposits expense within Interest expense to reflect the amortization of fair value adjustments to Time deposits. Pro forma amortization is preliminary and based on the use of straight-line methodology, using an estimated useful life of 3 years.
(c) Represents an adjustment of $53 million to Securitized debt obligation expense within Interest expense to reflect the accretion of fair value adjustment to Securitized debt obligations. Pro forma accretion is preliminary and based on the use of straight-line methodology, using an estimated useful life of 3 years.
(d) Represents an adjustment of $40 million to Senior and subordinated notes expense within Interest expense to reflect the accretion of fair value adjustment to Senior and subordinated notes. Pro forma accretion is preliminary and based on the use of straight-line methodology, using an estimated useful life of 3 years.
16
(e) Reflects the adjustments to Provision for credit losses consist of the following:
(in millions) |
For the Year Ended December 31, 2023 |
|||
Pro forma transaction accounting adjustments: |
||||
Estimate of increase in Provision for Credit losses for non-PCD Unsecuritized loans held for investment estimated lifetime losses |
5,507 | |||
Estimate of the increase in the Provision for Credit losses for non-PCD Loans held in consolidated trusts estimated lifetime losses |
915 | |||
|
|
|||
Net pro forma transaction accounting adjustments to Provision for credit losses |
$ | 6,422 |
(f) Represents an adjustment of $150 million to Professional services expense within Non-interest expense to reflect one-time transaction fees and expenses incurred related to the Mergers, which consist of professional, legal, and other merger related fees.
(g) Represents adjustments to Non-interest expenses consisting of the following:
(in millions) |
For the Year Ended December 31, 2023 |
|||
Pro forma transaction accounting adjustments: |
||||
Amortization of intangible assets – Purchased Credit Card Relationships |
$ | 2,557 | ||
Amortization of intangible assets – Core Deposits |
64 | |||
|
|
|||
Net pro forma transaction accounting adjustments to Amortization of intangibles expense |
$ | 2,621 |
A 10% change in the valuation of intangible assets would cause a corresponding increase or decrease in the amortization expense of approximately $262 million for the year ended December 31, 2023. Pro forma amortization is preliminary and based on the use of sum of the year’s digits method. The amount of amortization following the Mergers may differ significantly between periods based upon the final value assigned and amortization methodology used for each identifiable intangible asset.
The effect on operating results for the five years following the Mergers based on the use of sum of the year’s digits for the Purchased Credit Card Relationships is as follows:
(in millions) |
Effect on Operating Results |
|||
For the Year Ended December 31, |
||||
2023 |
$ | 2,557 | ||
2024 |
2,191 | |||
2025 |
1,826 | |||
2026 |
1,461 | |||
2027 |
1,096 |
17
(h) Represents an adjustment to record the estimated income tax impact of the pro forma adjustments utilizing a statutory income tax rate in effect of 24.4% for the year ended December 31, 2023. The effective tax rate of Capital One following the Mergers could be significantly different (either higher or lower) depending on post-merger activities, including cash needs, the geographical mix of income and changes in tax law. Because the tax rates used for the pro forma financial information are estimated, the pro forma tax rate will likely vary from the actual effective rate in periods subsequent to completion of the Mergers. This determination is preliminary and subject to change based upon the final determination of the fair value of the acquired assets and assumed liabilities.
(i) Represents the adjustment to earnings per share for the year ended December 31, 2023 to present pro forma basic and diluted weighted average shares of Capital One following the Mergers using the historical weighted average shares of Capital One Common Stock outstanding combined with the additional Capital One Common Stock issued in conjunction with the Mergers. Due to the net loss for the year ended December 31, 2023, there are no common shares added to calculate dilutive earnings per share because the effect would be anti-dilutive. The following table sets forth a reconciliation of the numerators and denominators used to compute pro forma basic and diluted earnings per share:
(in millions, except per share data) |
For the Year Ended December 31, 2023 |
|||
Pro forma net income (loss) attributable to common shareholders |
$ | (361 | ) | |
Historical weighted average Capital One Common Stock outstanding – Basic and Diluted |
382.4 | |||
Issuance of shares to Discover Common Stock shareholders |
255.4 | |||
|
|
|||
Pro forma weighted average shares – Basic and Diluted |
637.8 | |||
|
|
|||
Pro forma basic and diluted earnings per share |
$ | (0.57 | ) | |
|
|
18