EFTA01090509.pdf

• C Subject to completion, dated August 17, 2015 0 0 Ft PRELIMINARY PROSPECTUS SUPPLEMENT n' — D,1= (To prospectus dated March 31, 2015) G 03 C CD en •-• rn = CapitajOne 03 E )- rL, Capital One Financial Corporation = co — .= Depositary Shares Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series F E We are offering of our depositary shares each representing a 1/40* ownership interest in a share of our fixed rate non- c cumulative perpetual preferred stock. Series F (the "Preferred Stock"). with a liquidation preference of S25 per depositary share (equivalent to al c 51.000 per share of Preferred Stock). As a holder of depositary shares. you will be entitled to all proportional rights and preferences of the Preferred Stock (including dividend. voting. redemption and liquidation rights). You must exercise any such rights through the depositary. ... • C We will pay dividends on the Preferred Stock, when. as. and if declared to the extent that we have lawfully available funds to pay O.= dividends. Dividends will accrue and be payable from the date of issuance at a rate of % per annum, payable quarterly in arrears. on E March I. June I. September I and December I of each year. beginning on December 1. 2015. Upon payment of any dividends on the Preferred Stock. holders of depositary shares are expected to receive a proportionate payment. Dividends on the Preferred Stock will not be cumulative. If for any reason our Board of Directors or a duly authorized committee of the Board of Directors does not declare a dividend on the Preferred Stock for any dividend period. such dividend will not accrue or be payable. = and we will have no obligation to pay dividends for such dividend period, whether or not dividends on the Preferred Stock am declared for r, any future dividend period. Dividends on the Preferred Stock will not be declared, paid or set aside for payment to the extent such act would cause us to fail to comply with applicable laws and regulations, including applicable capital adequacy guidelines. ap Co We may redeem the Preferred Stock at our option. subject to regulatory approval. (I) in whole or in part, from time to time, on any 0 Co dividend payment date on or after December 1.2020 at a redemption price equal to 51.000 per share, plus any declared and unpaid dividends. 0.= or (2) in whole but not in part. at any time within 90 days following a regulatory capital treatment event (as defined herein). at a redemption ra ••. price equal to 51.(X) per share. plus any declared and unpaid dividends. If we redeem the Preferred Stock, the depositary is expected to C redeem a proportionate number of depositary shares. = Application will be made to list the depositary shares on the New York Stock Exchange (the - NYSE- ) under the symbol "C'OFTRE- O. CD Trading of the depositary shares is expected to commence within a 30-day period after the original issue date of the depositary shares. Our E common stock is listed on the NYSE under the symbol "COE." .0 The Preferred Stock will not have any voting rights. except as set forth under "Description of Preferred Stock—Voting Rights" _ beginning on page 5-20. 0) Per Depositary Share Total 'C Public offering price C o= Underwriting discounts and commissionsm o Proceeds, before expenses. to usto • = E (1) Reflects depositary shares sold to institutional investors. for which the underwriters received an underwriting discount of cu o c S per depositary share, and depositary shares sold to retail investors• for which the underwriters received an 6 d underwriting discount of S per depositary share. = (2) Assumes no exercise of the underwriters over-allotment option described below. Co, 03 CO co We have granted the underwriters an option to purchase up to an additional depositary shares within 30 days after the date of this = prospectus supplement at the public offering price, less underwriting discounts and commissions. solely to cover over-allotments. if any. m s') o . en a, Investing in our depositary shares involves risks. Before buying any depositary shares representing an interest in o • a 413 our Preferred Stock, you should read this prospectus supplement, the related prospectus and all information a. 0,..= incorporated by reference herein, including the discussion of material risks of investing in our depositary shares = =E representing an interest in our Preferred Stock in the "Risk Factors- section beginning on page S-I0 of this prospectus = CD supplement. Neither the depositary shares nor the Preferred Stock are investment grade rated by certain rating C la agencies and therefore remain subject to the risks associated with non-investment grade securities. 4t3 E = Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved o. o of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any es en fa representation to the contrary is a criminal offense. E (13 .2 Neither the depositary shares nor the Preferred Stock are a deposit, savings account or other obligation of a bank and neither = CD are insured or guaranteed by the Federal Deposit Insurance Corporation (the "FDIC") or any other governmental agency or = instrumentality. — 0 The underwriters expect to deliver the depositary shares in book-entry form only through the facilities of The Depository Trust Company is and its participants. including Euroclear System and Clearstream Banking. S.A. on or about . 2015. = • mm OE , Am y Joint Book-Running Managers o o.C. BofA Merrill Lynch J.P. Morgan Morgan Stanley UBS Investment Bank Wells Fargo Securities = 41, The date of this Prospectus Supplement is , 2015 EFTA01090509  TABLE OF CONTENTS About This Prospectus Supplement S-I Forward-Looking Statements S-I Summary of the Offering S-4 Risk Factors S-10 Use of Proceeds S-15 Description of Preferred Stock S-16 Description of Depositary Shares S-23 Book-Entry Procedures and Settlement S-25 Material United States Federal Income Tax Consequences S-28 Certain ERISA Considerations S-34 Underwriting S-36 Validity of the Preferred Stock 5.40 Experts S-40 Where You Can Find More Information S-40 You should rely only on the information contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell the depositary shares in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement (including any related free writing prospectus prepared by us or on our behalf, if any), the accompanying prospectus and the documents incorporated by reference herein and therein, is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates. S-i EFTA01090510  About This Prospectus Supplement We provide information to you about the depositary shares and the Preferred Stock in two separate documents: (I) this prospectus supplement (including any related free writing prospectus prepared by us or on our behalf, if any), which describes the specific terms of the depositary shares and the Preferred Stock and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference in that prospectus and (2) the accompanying prospectus, which provides general information about securities we may offer from time to time, including securities other than the depositary shares and the Preferred Stock. If information in this prospectus supplement or any related free writing prospectus, if any, is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement and any related free writing prospectus, if any. It is important for you to read and consider all of the information contained in this prospectus supplement and any related free writing prospectus, if any, and the accompanying prospectus in making your investment decision. You also should read and consider the information in the documents we have referred you to in the section entitled "Where You Can Find More Information" beginning on page S-40 of this prospectus supplement and page 3 of the accompanying prospectus. We include cross•references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find additional related discussions. The table of contents in this prospectus supplement provides the pages on which these captions are located. Unless the context requires otherwise, references to "Capital One," "issuer," "we," "our," or "us" in this prospectus supplement refer to Capital One Financial Corporation. a Delaware corporation. Forward-Looking Statements This prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein contain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act•), and Section 2IE of the Securities Exchange Act of 1934, as amended (the "Exchange Act•). Fonvard-looking statements include, among other things, information relating to our strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns, expenses, capital measures, accruals for claims in litigation and for other claims against us; earnings per share or other financial measures for us; future financial and operating results; our plans, objectives, expectations and intentions; and the assumptions that underlie these matters. Forward-looking statements also include statements using words such as "expect," "anticipate," "hope," "intend," "plan," "believe," "estimate," "will" or similar expressions. We have based these forward-looking statements on our current plans, estimates and projections, and you should not unduly rely on them. To the extent that any of the information in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995. Numerous factors could cause our actual results to differ materially from those described in such forward- looking statements, including, among other things: general economic and business conditions in the U.S., the U.K., Canada or our local markets, including conditions affecting employment levels, interest rates, collateral values, consumer income and confidence, spending and savings that may affect consumer bankruptcies, defaults, charge-offs and deposit activity; S-1 EFTA01090511 • an increase or decrease in credit losses (including increases due to a worsening of general economic conditions in the credit environment); • financial, legal, regulatory,, tax or accounting changes or actions, including the impact of the Dodd- Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and the regulations promulgated thereunder and regulations governing bank capital and liquidity standards, including Basel-related initiatives and potential changes to financial accounting and reporting standards; • developments, changes or actions relating to any litigation matter involving us; • the inability to sustain revenue and earnings growth; • increases or decreases in interest rates; • our ability to access the capital markets at attractive rates and terms to capitalize and fund our operations and future growth; • the success of our marketing efforts in attracting and retaining customers; • increases or decreases in our aggregate loan balances or the number of customers and the growth rate and composition thereof, including increases or decreases resulting from factors such as shifting product mix, amount of actual marketing expenses we incur and attrition of loan balances; • the level of future repurchase or indemnification requests we may receive, the actual future performance of mortgage loans relating to such requests, the success rates of claimants against us, any developments in litigation and the actual recoveries we may make on any collateral relating to claims against us: • the amount and rate of deposit growth; • changes in the reputation of, or expectations regarding, the financial services industry or us with respect to practices, products or financial condition; • any significant disruption in our operations or technology platform; • our ability to maintain a compliance and technology infrastructure suitable for the nature of ow business; • our ability to develop digital technology that addresses the needs of our customers; • our ability to control costs; • the amount of, and rate of growth in, our expenses as ow business develops or changes or as it expands into new market areas; • our ability to execute on our strategic and operational plans; • any significant disruption of, or loss of public confidence in, the United States mail service affecting our response rates and consumer payments: • any significant disruption of, or loss of public confidence in, the internet affecting the ability of ow customers to access their accounts and conduct banking transactions; • our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of new products and services; • changes in the labor and employment markets; • fraud or misconduct by our customers, employees or business partners; • competition from providers of products and services that compete with our businesses: and • other risk factors listed from time to time in reports that we file with the SEC. S-2 EFTA01090512  You should carefully consider the factors referred to above in evaluating these forward-looking statements. When considering these forward-looking statements, you should keep in mind these risks, uncertainties and other cautionary statements made in this prospectus supplement. the accompanying prospectus and in the documents incorporated by reference. See the factors set forth under the "Risk Factors" section beginning on page 5-10 of this prospectus supplement and in any other documents incorporated or deemed to be incorporated by reference herein, including our Annual Report on Form 10-K for the year ended December 31. 2014, as such discussion may be amended or updated in other reports filed by us with the SEC. for additional information that you should consider carefully in evaluating these forward-looking statements. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions, including the risk factors referred to above. Our future performance and actual results may differ materially from those expressed in forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. Any forward-looking statements made by us or on our behalf speak only as of the date that they are made or as of the date indicated, and we undertake no obligation to update forward-looking statements as a result of new information, future events or otherwise. S-3 EFTA01090513  Summary of the Offering The following summary highlights selected informationfrom this prospectus supplement and the accompanying prospectus about the depositary shares, the Preferred Stock and this offering. This description is not complete and does not contain all of the infonnation that you should consider before investing in the depositary shares. You should read this prospectus supplement and the accompanying prospectus, including the documents we incorporate by reference, carefully to understandfully the terms of the depositary shares and the Preferred Stock as well as other considerations that are important to you in making a decision about whether to invest in the depositary shares. You should pay special attention to the "Risk Factors" section beginning on page S-10 of this prospectus supplement and the "Risk Factors" section in our Annual Report on Form 10-Kfor the year ended December 31. 2014, as such discussion may be amended or updated in other reportsfried by us with the SEC, to determine whether an investment in the depositary shares is appropriate for you. This prospectus supplement includesforward-looking statements that involve risks and uncertainties. For a more complete understanding of the depositary shares and the Preferred Stock, you should read the section entitled "Description ofPreferred Stock" beginning on page S-16 and the section entitled "Description ofDepositary Shares" beginning on page S-23 of this prospectus supplement as well as the section entitled "Description of Preferred Stock" beginning on page 17 of the accompanying prospectus. To the extent the information in this prospectus supplement is inconsistent with the information in the accompanying prospectus, you should rely on the following infonnation. Issuer Capital One Financial Corporation Securities Offered depositary shares ( depositary shares if the underwriters exercise their over-allotment option in full), each representing a 1/40th ownership interest in a share of Fixed Rate Non- Cumulative Perpetual Preferred Stock. Series F. $0.01 par value (the "Preferred Stock"), with a liquidation preference of $25 per depositary share (equivalent to $1.000 per share of Preferred Stock) of Capital One. Each holder of a depositary share will be entitled, through the depositary, in proportion to the applicable fraction of a share of Preferred Stock represented by such depositary share, to all the rights and preferences of the Preferred Stock represented thereby (including with respect to dividends, voting, redemption and liquidation rights). We reserve the right to re-open this series of preferred stock and issue additional shares of the Preferred Stock either through public or private sales at any time and from time to time. The additional shares would form a single series with the Preferred Stock. Over-allotment Option We have granted the underwriters an option to purchase up to an additional depositary shares within 30 days after the date of this prospectus supplement at the public offering price, less underwriting discounts and commissions, solely to cover over- allotments, if any. Dividends We will pay dividends on the Preferred Stock, when, as. and if declared by ow Board of Directors or a duly authorized committee of the Board of Directors. Dividends will accrue and be payable from the date of issuance at a rate of % per annum, payable quarterly. in arrears. See also "—Dividend Payment Dates" on page S-7. Upon the S-4 EFTA01090514 payment of any dividends on the Preferred Stock, holders of depositary shares will receive a related proportionate payment. Dividends on the Preferred Stock will not be cumulative. If our Board of Directors or a duly authorized committee of the Board of Directors does not declare a dividend on the Preferred Stock in respect of a dividend period, then no dividend shall be deemed to have accrued for such dividend period, be payable on the applicable dividend payment date, or be cumulative, and we will have no obligation to pay any dividend for that dividend period, whether or not our Board of Directors or a duly authorized committee of our Board of Directors declares a dividend on the Preferred Stock for any future dividend period. Capital One's ability to pay dividends on the Preferred Stock depends on the ability of Capital One Bank (USA), National Association ("COBNA") and Capital One, National Association ("CONK') to pay dividends to Capital One. The ability of Capital One, COBNA and CONA to pay dividends in the future is subject to bank regulatory requirements and capital guidelines and policies established by the Board of Governors of the Federal Reserve System (the "Federal Reserve"). While the Preferred Stock is outstanding, unless, in each case, the full dividends for the preceding dividend period on all outstanding shares of Preferred Stock have been declared and paid or declared and a sum sufficient for the payment thereof has been set aside: • no dividend will be declared or paid or set aside for payment and no distribution will be declared or made or set aside for payment on any junior stock, other than: • a dividend payable solely in junior stock, or • any dividend in connection with the implementation of a shareholders' rights plan, or the redemption or repurchase of any rights under any such plan; • no shares of junior stock shall be repurchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (nor shall any monies be paid to or made available for a sinking fund for the redemption of any such securities by us) other than: • as a result of a reclassification of junior stock for or into other junior stock; • the exchange or conversion of one share of junior stock for or into another share of junior stock; • through the use of the proceeds of a substantially contemporaneous sale of other shares of junior stock; • purchases. redemptions or other acquisitions of shares of the junior stock in connection with any employment contract. S-5 EFTA01090515  benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants; • purchases of shares of junior stock pursuant to a contractually binding requirement to buy junior stock existing prior to the preceding dividend period, including under a contractually binding stock repurchase plan; • the purchase of fractional interests in shares of junior stock pursuant to the conversion or exchange provisions of such stock or the security being converted or exchanged; • purchases or other acquisitions by any of our broker-dealer subsidiaries solely for the purpose of market making; • stabilization or customer facilitation transactions in junior stock in the ordinary course of business; • purchases by any of our broker-dealer subsidiaries of our capital stock for resale pursuant to an offering by us of such capital stock underwritten by such broker-dealer subsidiary: or • the acquisition by us or any of our subsidiaries of record ownership in junior stock for the beneficial ownership of any other persons (other than for the beneficial ownership by us or any of our subsidiaries), including as trustees or custodians; and • no shares of parity stock, if any, shall be repurchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (nor shall any monies be paid to or made available for a sinking fund for the redemption of any such securities by during a dividend period, other than: • pursuant to pro rata offers to purchase all. or a pro rant portion, of the Preferred Stock and such parity stock, if any: • as a result of a reclassification of parity stock for or into other parity stock; • the exchange or conversion of parity stock for or into other parity stock or junior stock; • through the use of the proceeds of a substantially contemporaneous sale of other shares of parity stock; purchases of shares of parity stock pursuant to a contractually binding requirement to buy parity stock existing prior to the preceding dividend period, including under a contractually binding stock repurchase plan; • the purchase of fractional interests in shares of parity stock pursuant to the conversion or exchange provisions of such stock or the security being converted or exchanged; • purchases or other acquisitions by any of our broker-dealer subsidiaries solely for the purpose of market making. S-6 EFTA01090516  stabilization or customer facilitation transactions in parity stock in the ordinary course of business; purchases by any of our broker-dealer subsidiaries of our capital stock for resale pursuant to an offering by us of such capital stock underwritten by such broker-dealer subsidiary: or • the acquisition by us or any of our subsidiaries of record ownership in parity stock for the beneficial ownership of any other persons (other than for the beneficial ownership by us or any of our subsidiaries), including as trustees or custodians. While the Preferred Stock is outstanding, unless the full dividends for the preceding dividend period on all outstanding shares of Preferred Stock have been declared and paid or declared and a sum sufficient for the payment thereof has been set aside, no dividend will be declared or paid or set aside for payment and no distribution will be declared or made or set aside for payment on any securities that rank equally with the Preferred Stock. When dividends are not paid in full upon the shares of Preferred Stock and parity stock, if any, all dividends declared upon shares of Preferred Stock and parity stock, if any, will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the then-current dividend period per share on Preferred Stock, and accrued dividends, including any accumulations, if any, on parity stock, if any. bear to each other. Dividends on the Preferred Stock will not be declared, paid or set aside for payment to the extent such act would cause us to fail to comply with applicable laws and regulations, including applicable capital adequacy guidelines. See "Description of Preferred Stock— Dividends" beginning on page S-16. Dividend Payment Dates Dividends on the Preferred Stock will be payable when, as, and if declared by ow Board of Directors or a duly authorized committee of our Board of Directors, quarterly on March 1, June 1, September I and December I of each year, beginning on December I. 2015 (each a "dividend payment date"). If any date on which dividends would otherwise be payable is not a business day, then the dividend payment date will be the next business day without any adjustment to the amount of dividends paid. Redemption The Preferred Stock is perpetual and has no maturity date. We may redeem the Preferred Stock at our option, (i) in whole or in part. from time to time, on any dividend payment date on or after December I. 2020 at a redemption price equal to $1.000 per share (equivalent to $25 per depositary share), plus any declared and unpaid dividends, or (ii) in whole but not in part. at any time within 90 days following a regulatory capital treatment event (as defined herein), at a redemption price equal to $1,000 per share (equivalent to $25 per depositary S-7 EFTA01090517  share), plus any declared and unpaid dividends. If we redeem the Preferred Stock, the depositary will redeem a proportionate number of depositary shares. Neither the holders of Preferred Stock nor holders of depositary shares will have the right to require the redemption or repurchase of the Preferred Stock. Any redemption of the Preferred Stock is subject to our receipt of any required prior approval by the Federal Reserve and to the satisfaction of any conditions set forth in the capital guidelines or regulations of the Federal Reserve applicable to redemption of the Preferred Stock. Neither the holders of the Preferred Stock nor the holders of the related depositary shares will have the right to require redemption. Liquidation Rights In the event we liquidate, dissolve or wind-up our business and affairs, either voluntarily or involuntarily, holders of the Preferred Stock are entitled to receive a liquidating distribution of $1,000 per share (equivalent to $25 per depositary share), plus any declared and unpaid dividends, without accumulation of any undeclared dividend, before we make any distribution of assets to the holders of our common stock or any other class or series of shares of junior stock. Distributions will be made only to the extent of Capital One's assets that are available after satisfaction of all liabilities to creditors and subject to the rights of holders of any securities ranking senior to the Preferred Stock and pro rata as to the Preferred Stock and any other shares of our stock ranking equally as to such distribution, if any. Voting Rights None, except with respect to authorizing or increasing the authorized amount of senior stock, certain changes in the terms of the Preferred Stock and in the case of certain dividend non-payments. See "Description of Preferred Stock—Voting Rights" beginning on page 5-20. Holders of depositary shares must act through the depositary to exercise any voting rights, as described under "Description of Depositary Shares—Voting the Preferred Stock" beginning on page S-24. Ranking Shares of the Preferred Stock will rank senior to our common stock. and at least equally with each other series of our preferred stock, if any, we have issued or may issue if provided for in the certificate of designations relating to such preferred stock or otherwise (except for any senior series that may be issued with the requisite consent of the holders of the Preferred Stock and all other parity stock, if any), with respect to the payment of dividends and distributions upon liquidation, dissolution or winding up. See "Description of Preferred Stock—Other Preferred Stock." We will generally be able to pay dividends and distributions upon liquidation, dissolution or winding up only out of lawfully available assets for such payment after satisfaction of all claims for indebtedness and other non•equity claims. No Maturity The Preferred Stock does not have any maturity date, and we are not required to redeem the Preferred Stock. Accordingly. the Preferred 5.8 EFTA01090518  Stock will remain outstanding indefinitely, unless and until we decide to redeem it and receive prior approval of the Federal Reserve to do so. Preemptive and Conversion Rights None. Listing Application will be made to list the depositary shares on the NYSE under the symbol "COFPRF." Trading of the depositary shares on the NYSE is expected to commence within a 30-day period after the original issue date of the depositary shares. Tax Consequences For a discussion of the material U.S. federal income tax consequences relating to the Preferred Stock and the depositary shares, see the section entitled "Material United States Federal Income Tax Consequences" beginning on page 5-28 in this prospectus supplement. Use of Proceeds We estimate that the net proceeds from this offering, after deducting the underwriting discounts and commissions and offering expenses payable by us, will be approximately S . We intend to use the net proceeds from the sale of the depositary shares for general corporate purposes in the ordinary course of our business. General corporate purposes may include repayment of debt, acquisitions, additions to working capital. capital expenditures and investments in ow subsidiaries. Risk Factors Please refer to the section entitled "Risk Factors" beginning on page S-10 and other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus for a discussion of factors you should consider carefully before deciding to invest in our depositary shares. Depositary Agent, Transfer Agent & Registrar Computershare Trust Company, N.A will be the depositary, and, collectively with Computershare Inc., will be the transfer agent and registrar for the Preferred Stock. S-9 EFTA01090519  Risk Factors Investing in the depositary shares involves risks, including the risks described below that are specific to the depositary shares and the Preferred Stock and those that could affect us and our business. You should not purchase shares ofour depositary shares unless you understand these investment risks. Please be aware that other risks may prove to be important in thefuture. New risks may emerge at any time, and we cannot predict such risks or estimate the extent to which they may affect our financialperformance. Before purchasing any depositary shares, you should consider carefully the risks and other information in this prospectus supplement and the accompanying prospectus and carefully read the risks described in the documents incorporated by reference in this prospectus supplement and the accompanying prospectus, including the discussion under "Item IA—Risk Factors" in our Annual Report on Form 10-Kfor the year ended December 31, 2014, as such discussion may be amended or updated in other reports filed by us with the SEC. Risks Relating to the Depositary Shares and the Preferred Stock You are making an investment decision about both the depositary shares and the Preferred Stock. As described in this prospectus supplement. we are issuing depositary shares representing fractional interests in shares of Preferred Stock. The depositary will rely solely on the payments it receives on the Preferred Stock to fund all payments on the depositary shares. You should carefully review the information in this prospectus supplement and the accompanying prospectus regarding both of these securities. The Preferred Stock and the depositary shares will initially be rated below investment grade by certain rating agencies. Neither the Preferred Stock nor the depositary shares will initially be rated investment grade by certain rating agencies, and there can be no assurance that the rating of either will become investment grade in the future or otherwise be upgraded by those agencies or otherwise. Further, the depositary shares may be subject to a higher risk of price volatility than similar, higher-rated securities. In addition, increases in leverage or deteriorating outlooks for an issuer, or volatile markets, could lead to continued significant deterioration in market prices of below-investment grade rated securities, such as the depositary shares. Ratings only reflect the views of the issuing rating agency or agencies and such ratings could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency. Further, a rating is not a recommendation to purchase, sell or hold any particular security, including the depositary shares. In addition, ratings do not reflect market prices or suitability of a security for a particular investor and any rating of the depositary shares or the Preferred Stock may not reflect all risks related to us and our business, or the structure or market value of the depositary shares. The Preferred Stock will be an equity security and will be subordinate to our existing andfuture indebtedness. The shares of Preferred Stock will be equity interests in Capital One and will not constitute indebtedness. This means that the depositary shares, which represent fractional interests in the shares of Preferred Stock, will rank junior to all existing and future indebtedness and other non-equity claims on Capital One with respect to assets available to satisfy claims on Capital One, including claims in the event of our liquidation. As of June 30, 2015, Capital One's total liabilities, including deposits, securitized debt obligations and other debt, were approximately $264 billion and we may incur additional indebtedness in the future. Capital One's existing and future indebtedness may restrict payment of dividends on the Preferred Stock. Additionally, unlike indebtedness, where principal and interest customarily are payable on specified due dates, in the case of preferred stock like the Preferred Stock, (1) dividends will be payable only if declared by our S-10 EFTA01090520 Board of Directors or a duly authorized committee of the Board of Directors. (2) dividends will not accumulate if they are not declared and (3) as a Delaware corporation, we may make dividend payments and redemption payments only out of funds legally available under Delaware law. Also, as a bank holding company, our ability to declare and pay dividends and redeem the Preferred Stock is dependent on certain federal regulatory considerations. In particular, the Dodd-Frank Act requires federal banking agencies to establish more stringent risk-based capital guidelines and leverage limits applicable to banks and bank holding companies, and especially those institutions with consolidated assets equal to or greater than $50 billion. The Federal Reserve, the Office of the Comptroller of the Currency and the FDIC released in July 2013 a final rule (the "Basel III Rule") that substantially revises the federal banking agencies' current capital rules and implements the Basel Committee on Banking Supervision's December 2010 regulatory capital reforms. known as Basel III. The Basel III Rule sets forth the criteria for qualifying additional Tier 1 capital instruments consistent with Basel III, including the requirement that any dividends on such instruments only be paid out of the banking organization's net income, retained earnings and surplus related to other additional Tier 1 capital instruments. In addition, restrictions may be applied to bank holding company dividends under the Federal Reserve's capital plan rule. Such provisions could adversely affect our ability to pay dividends or may result in additional limitations on ow ability to pay dividends or redeem shares of our Preferred Stock. Further, the Preferred Stock may be fully subordinated to interests held by the U.S. government in the event that we enter into a receivership, insolvency, liquidation, or similar proceeding, including a proceeding under the Orderly Liquidation Authority of the Dodd-Frank Act. The Preferred Stock places no restrictions on our business or operations or on our ability to incur indebtedness or engage in any transactions, subject only to the limited voting rights referred to below under "Description of Preferred Stock—Voting Rights" beginning on page S-20 of this prospectus supplement. The Preferred Stock may be junior in rights andpreferences to ourfuture preferred stock, including senior stock authorized and issued without your consent. The Preferred Stock may rank junior to preferred stock issued in the future that by its terms is expressly senior in rights and preferences to the Preferred Stock. It is possible that we may authorize and issue such shares without your vote or consent, although the affirmative vote or consent of the holders of at least two-thirds of all outstanding shares of the Preferred Stock is required to authorize or issue any shares of senior stock as described under "Description of Preferred Stock—Voting Rights." In addition, the terms of any of our future preferred stock expressly senior to the Preferred Stock may restrict dividend payments on the Preferred Stock, except for dividends payable solely in shares of the Preferred Stock. Unless full dividends for all of our outstanding preferred stock senior to the Preferred Stock have been declared and paid or set aside for payment, no dividends will be declared or paid and no distribution will be made on any shares of the Preferred Stock, and no shares of the Preferred Stock may be repurchased, redeemed, or otherwise acquired by us, directly or indirectly, for consideration. This could result in dividends on the Preferred Stock not being paid when due to you. Dividends on the Preferred Stock are discretionary and non-cumulative. Dividends on the Preferred Stock are discretionary and will not be cumulative. If our Board of Directors or a duly authorized committee of the Board of Directors does not declare a dividend on the Preferred Stock in respect of a dividend period, then no dividend shall be deemed to have accrued for such dividend period, be payable on the applicable dividend payment date or be cumulative, and we will have no obligation to pay any dividend for that dividend period, whether or not our Board of Directors or a duly authorized committee of the Board of Directors declares a dividend on the Preferred Stock for any future dividend period. Additionally, when dividends are not paid in full upon the Preferred Stock and parity stock, if any, all dividends declared upon the Preferred Stock and parity stock, if any. will be declared on a proportional basis so that the amount of dividends declared per share w