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Regulatory and Capital Adequacy
 12 Months Ended
Dec. 31, 2019
Banking and Thrift [Abstract]  
Regulatory and Capital Adequacy
NOTE 11—REGULATORY AND CAPITAL ADEQUACY
Regulation and Capital Adequacy
Bank holding companies (“BHCs”) and national banks are subject to capital adequacy standards adopted by the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation (collectively, the “Federal Banking Agencies”), including the Basel III Capital Rule. Moreover, the Banks, as insured depository institutions, are subject to prompt corrective action (“PCA”) capital regulations, which require the Federal Banking Agencies to take prompt corrective action for banks that do not meet PCA capital requirements.
We entered parallel run under the Basel III Advanced Approaches on January 1, 2015, during which we calculated capital ratios under both the Basel III Standardized Approach and the Basel III Advanced Approaches, though we continued to use the Standardized Approach for purposes of meeting regulatory capital requirements.
In October 2019, the Federal Banking Agencies amended the Basel III Capital Rule to provide for tailored application of certain capital requirements across different categories of banking institutions (“Tailoring Rules”). As a bank holding company (“BHC”) with total consolidated assets of at least $250 billion that does not exceed any of the applicable risk-based thresholds, we are a Category III institution under the Tailoring Rules. As such, we are no longer subject to the Basel III Advanced Approaches and certain associated capital requirements, such as the requirement to include in regulatory capital certain elements of AOCI.
Under the Basel III Capital Rule, our regulatory minimum risk-based and leverage capital requirements include a common equity Tier 1 capital ratio of at least 4.5%, a Tier 1 capital ratio of at least 6.0%, a total capital ratio of at least 8.0%, a Tier 1 leverage capital ratio of at least 4.0%, and a supplementary leverage ratio of 3.0%.
For additional information about the capital adequacy guidelines we are subject to, see “Part I —Item 1. Business—Supervision and Regulation.”
The following table provides a comparison of our regulatory capital amounts and ratios under the Basel III Standardized Approach subject to the applicable transition provisions, the regulatory minimum capital adequacy ratios and the PCA well-capitalized level for each ratio,where applicable, as of December 31, 2019 and 2018.
Table 11.1: Capital Ratios Under Basel III(1)
 
 
December 31, 2019
 
December 31, 2018
(Dollars in millions)
 
Capital Amount
 
Capital
Ratio
 
Minimum
Capital
Adequacy
 
Well-
Capitalized
 
Capital Amount
 
Capital
Ratio
 
Minimum
Capital
Adequacy
 
Well-
Capitalized
Capital One Financial Corp:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital(2)
 
$
38,162

 
12.2
%
 
4.5
%
 
N/A

 
$
33,071

 
11.2
%
 
4.5
%
 
N/A

Tier 1 capital(3)
 
43,015

 
13.7

 
6.0

 
6.0
%
 
37,431

 
12.7

 
6.0

 
6.0
%
Total capital(4)
 
50,348

 
16.1

 
8.0

 
10.0

 
44,645

 
15.1

 
8.0

 
10.0

Tier 1 leverage(5)
 
43,015

 
11.7

 
4.0

 
N/A

 
37,431

 
10.7

 
4.0

 
N/A

Supplementary leverage(6)
 
43,015

 
9.9

 
3.0

 
N/A

 
37,431

 
9.0

 
3.0

 
N/A

COBNA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital(2)
 
17,883

 
16.1

 
4.5

 
6.5

 
16,378

 
15.3

 
4.5

 
6.5

Tier 1 capital(3)
 
17,883

 
16.1

 
6.0

 
8.0

 
16,378

 
15.3

 
6.0

 
8.0

Total capital(4)
 
20,109

 
18.1

 
8.0

 
10.0

 
18,788

 
17.6

 
8.0

 
10.0

Tier 1 leverage(5)
 
17,883

 
14.8

 
4.0

 
5.0

 
16,378

 
14.0

 
4.0

 
5.0

Supplementary leverage(6)
 
17,883

 
12.1

 
3.0

 
N/A

 
16,378

 
11.5

 
3.0

 
N/A

CONA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital(2)
 
28,445

 
13.4

 
4.5

 
6.5

 
25,637

 
13.0

 
4.5

 
6.5

Tier 1 capital(3)
 
28,445

 
13.4

 
6.0

 
8.0

 
25,637

 
13.0

 
6.0

 
8.0

Total capital(4)
 
30,852

 
14.5

 
8.0

 
10.0

 
27,912

 
14.2

 
8.0

 
10.0

Tier 1 leverage(5)
 
28,445

 
9.2

 
4.0

 
5.0

 
25,637

 
9.1

 
4.0

 
5.0

Supplementary leverage(6)
 
28,445

 
8.2

 
3.0

 
N/A

 
25,637

 
8.0

 
3.0

 
N/A

__________
(1) 
Capital requirements that are not applicable are denoted by “N/A.”
(2) 
Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.
(3) 
Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(4) 
Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.
(5) 
Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.
(6) 
Supplementary leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by total leverage exposure.
We exceeded the minimum capital requirements and each of the Banks exceeded the minimum regulatory requirements and were well-capitalized under PCA requirements as of both December 31, 2019 and 2018.
Regulatory restrictions exist that limit the ability of the Banks to transfer funds to our BHC. As of December 31, 2019, funds available for dividend payments from COBNA and CONA were $3.3 billion and $4.7 billion, respectively. Applicable provisions that may be contained in our borrowing agreements or the borrowing agreements of our subsidiaries may limit our subsidiaries’ ability to pay dividends to us or our ability to pay dividends to our stockholders.
The Federal Reserve requires depository institutions to maintain certain cash reserves against specified deposit liabilities. As of December 31, 2019 and 2018, our reserve requirements totaled $1.7 billion and $1.9 billion, respectively.