1. Presented: 4/19/2016 Tianyu (Jack) Shen Bi (Brian) Ge Fang Liu Siwei (Lerrisa) Li

2. Holding Overview Ticker: COF(NYSE) Bought 100 shares @ $73.13 on 12/9/2013 As of 4/18/2016 EDT: – Market Cap: $37.20B – Current Price: $71.66 – Loss: -2.01% – 14.90% of portfolio (mkt, equity only) Source: Yahoo Finance

3. Business Introduction As of December 31, 2015: One of the ten largest banks based in the US on deposits Largest online direct banking institution in the US by deposits Fourth largest issuer of Visa and MasterCard credit cards in the US based on the outstanding balance of credit card loans ATMs and branch locations primarily across New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia Source: Capital one 10-K FY2015

4. Company History 19881994 1996 20002007-2008 2012 Fairbank and Morris began building the foundation for Capital One Spun-off from Signet as OakStone; Renamed Capital One; IPO @ $16 Initiated international operations Added to the Fortune 500 list; Began to seek acquisition opportunity Suffered in the financial crisis; Acquired North fork and Chevy Chase Fined for misleading customers; M&A with ING and HSBC

5. Business Overview Commercial Banking Domestic consumer Small business International Deposit gathering Lending Home loan Lending Deposit gathering Treasury management Source: Capital one 10-K FY2015

6. Management Chairman, President & CEO: Richard D. Fairbank – Founder of Capital One – Served on the board of directors of MasterCard International and BITS Technology Forum – Served as the Chairman of MasterCard International's U.S. Region Board of Director s CFO: Stephen Crawford since May 24, 2013 – Co-funder and former Partner of Centerview Partners LLC – Spent more than 20 years in various positions at Morgan Stanley, which included serving as Co-President, CFO, Chief Administrative Officer, Chief Strategic Officer, and head of the Financial Institutions Group Source: Company Website

7. Strategy “Monoline” “Broadly Diversified Financial Services Company” Innovation Staying ahead in the intense competition Technology & Know-how Big data and modeling M&A Diversify Expand Source: Capitalone.com

8. Merger & Acquisition 20012005-2006 2009 20122013 2015 May: AmeriFee Corporation October: PeopleFirst Inc. 2005: Hibernia National Bank 2006: North Fork Bank February: Chevy Chase Bank (Renamed Capital One Bank) May: HSBC’s U.S. credit card operations October: American ING Direct division November: Beech Street Capital December: Healthcare Financial Services business of General Electric Capital Source: Capital one 10-K FY2015, NYT Dealbook

9. Financial Performance Total net revenue $23,413 million Net Income $4,050 million By Segment, FY 2015: Source: Capital one 10-K FY2015

10. Industry Outlook Credit Card Issuing Industry Mature industry Sensitive to macroeconomic environment Going mobile, going electronic Vulnerable to cyber-attack and system malfunction Source: IBIS World

11. Macroeconomic Driver Source: IBIS World

12. Porter’s Five Forces Supplier Bargaining Power High Transaction processor Manufacturer Depositor Threat of Substitutes Moderate Substitute: cash, debit card, consumer loan Threat of New Entrants Moderate Capital requirement, Network Threat of Rivalry High Highly fragmented industry Buyer Bargaining Power Moderate Minimal product differentiation Fixed terms Credit Card Industry

13. SWOT Analysis Strengths Good reputation; Solid mkt share; Established network & relationship; Advanced model; Effective M&A strategy Weaknesses Geographic and industry concentration; Vulnerable transaction process Opportunities Economic recovery; International mkt; Healthcare loan mkt Threats Mkt fluctuation; Competition; Regulation; Cyber-attack; Bad debt

14. Loan Analysis

15. Financial Ratio Analysis Net interest margin= net interest income/total interest earning assets

16. Comparable Companies Companies that issue Credit Cards and Companies that are small-cap consumer and commercial banks are comparable to Capital One Capital OneAmerican ExpressDiscoverAlly TickerNYSE: COFNYSE: AXPNYSE: DFSNYSE: ALLY Business Description Payment services, consumer banking, and commercial banking Charge and credit payment card products Direct banking and payment services Diversified financial services company Market Cap.$37.03B$59.55B$21.48B$8.43B Share Price$71.34$62.14$51.87$17.51

17. Comparable Valuation

18. Interest Income Projection

19. Interest Expense Projection

20. Residual Income Valuation

21. Stock Price Movement

22. Technical Analysis

23. Recommendation Comparable Valuation $86.75 Residual Valuation $84.47 Current Price $72.60 Hold