Capital One Reports Third Quarter 2023 Net Income of $1.8 billion, or $4.45 per share

Rhea-AI Summary

Capital One reports net income of $1.8 billion for Q3 2023, driven by strong growth in domestic card business. Total net revenue increased by 4% to $9.4 billion. Provision for credit losses decreased by $206 million to $2.3 billion. Common equity Tier 1 capital ratio of 13.0%. Period-end loans held for investment increased by $3.5 billion to $314.8 billion. Total deposits increased by $2.3 billion to $346.0 billion.

Positive

• Capital One reports net income of $1.8 billion for Q3 2023, driven by strong growth in domestic card business. Total net revenue increased by 4% to $9.4 billion. Common equity Tier 1 capital ratio of 13.0%. Period-end loans held for investment increased by $3.5 billion to $314.8 billion. Total deposits increased by $2.3 billion to $346.0 billion.

Negative

• None.

MCLEAN, Va., Oct. 26, 2023 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the third quarter of 2023 of $1.8 billion, or $4.45 per diluted common share, compared with net income of $1.4 billion, or $3.52 per diluted common share in the second quarter of 2023, and with net income of $1.7 billion, or $4.20 per diluted common share in the third quarter of 2022.

"In the third quarter we continued to deliver solid results fueled by strong top-line growth in our domestic card business," said Richard D. Fairbank, Founder, Chairman, and Chief Executive Officer. "Our modern technology capabilities are generating opportunities and driving performance improvements across our businesses."

All comparisons below are for the third quarter of 2023 compared with the second quarter of 2023 unless otherwise noted.

Third Quarter 2023 Income Statement Summary:

• Total net revenue increased 4 percent to $9.4 billion.
• Total non-interest expense increased 1 percent to $4.9 billion:
  • 10 percent increase in marketing.
  • 1 percent decrease in operating expenses.
• Pre-provision earnings⁽¹⁾  increased 7 percent to $4.5 billion.
• Provision for credit losses decreased $206 million to $2.3 billion:
  • Net charge-offs of $2.0 billion.
  • $322 million loan reserve build.
• Net interest margin of 6.69 percent, an increase of 21 basis points.
• Efficiency ratio of 51.89 percent.
• Operating efficiency ratio of 41.51 percent.

Third Quarter 2023 Balance Sheet Summary:

• Common equity Tier 1 capital ratio under Basel III Standardized Approach of 13.0 percent.
• Period-end loans held for investment in the quarter increased $3.5 billion, or 1 percent, to $314.8 billion.
  • Credit Card period-end loans increased $4.3 billion, or 3 percent, to $146.8 billion.
    • Domestic Card period-end loans increased $4.3 billion, or 3 percent, to $140.3 billion.
  • Consumer Banking period-end loans decreased $436 million, or 1 percent, to $76.8 billion.
    • Auto period-end loans decreased $385 million, or 1 percent, to $75.5 billion.
  • Commercial Banking period-end loans decreased $399 million, or less than 1 percent, to $91.2 billion.
• Average loans held for investment in the quarter increased $3.1 billion, or 1 percent, to $312.8 billion.
  • Credit Card average loans increased $5.3 billion, or 4 percent, to $144.0 billion.
    • Domestic Card average loans increased $5.0 billion, or 4 percent, to $137.5 billion.
  • Consumer Banking average loans decreased $544 million, or 1 percent, to $77.2 billion.
    • Auto average loans decreased $493 million, or 1 percent, to $75.7 billion.
  • Commercial Banking average loans decreased $1.6 billion, or 2 percent, to $91.6 billion.
• Period-end total deposits increased $2.3 billion, or 1 percent, to $346.0 billion, while average deposits increased $1.3 billion, or less than 1 percent, to $345.0 billion.
• Interest-bearing deposits rate paid increased 39 basis points to 3.30 percent.

(1)

Pre-provision earnings is a non-GAAP metric calculated based on total net revenue less non-interest expense for the period. Management believes that this financial metric is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses. See our Financial Supplement, filed as Exhibit 99.2 to our Current Report on From 8-K on October 26, 2023 with the Securities and Exchange Commission (the "SEC"), "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for a reconciliation and additional information on non-GAAP measures.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on October 26, 2023 at 5:00 PM Eastern Time. The conference call will be accessible through live webcast. Interested investors and other individuals can access the webcast via the company's home page (www.capitalone.com). Under "About," choose "Investors" to access the Investor Center and view and/or download the earnings press release, the financial supplement, including a reconciliation of non-GAAP financial measures, and the earnings release presentation. The replay of the webcast will be archived on the company's website through November 9, 2023 at 5:00 PM Eastern Time.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Forward-looking statements often use words such as "will," "anticipate," "target," "expect," "think," "estimate," "intend," "plan," "goal," "believe," "forecast," "outlook" or other words of similar meaning. Any forward-looking statements made by Capital One or on its behalf speak only as of the date they are made or as of the date indicated, and Capital One does not undertake any obligation to update forward-looking statements as a result of new information, future events or otherwise. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors. For additional information on factors that could materially influence forward-looking statements included in this earnings press release, see the risk factors set forth under "Part I—Item 1A. Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC and Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company which, along with its subsidiaries, had $346.0 billion in deposits and $471.4 billion in total assets as of September 30, 2023. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches and Cafés located primarily in New York, Louisiana, Texas, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

 

Exhibit 99.2
Capital One Financial Corporation Financial Supplement(1)(2) Third Quarter 2023 Table of Contents
Capital One Financial Corporation Consolidated Results			Page
	Table 1:	Financial Summary—Consolidated	1
	Table 2:	Selected Metrics—Consolidated	3
	Table 3:	Consolidated Statements of Income	4
	Table 4:	Consolidated Balance Sheets	6
	Table 5:	Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)	8
	Table 6:	Average Balances, Net Interest Income and Net Interest Margin	9
	Table 7:	Loan Information and Performance Statistics	10
	Table 8:	Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity	12
Business Segment Results
	Table 9:	Financial Summary—Business Segment Results	14
	Table 10:	Financial & Statistical Summary—Credit Card Business	15
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	17
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	18
	Table 13:	Financial & Statistical Summary—Other and Total	19
Other
	Table 14:	Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)	20
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	21

__________

(1)

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation. Investors should refer to our Quarterly Report on Form 10-Q for the period ended September 30, 2023 once it is filed with the Securities and Exchange Commission.

(2)

This Financial Supplement includes non-GAAP measures. We believe these non-GAAP measures are useful to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. ("GAAP"), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for a reconciliation of any non-GAAP financial measures.

  

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 1: Financial Summary—Consolidated
												2023 Q3				Nine Months Ended September 30,
(Dollars in millions, except per share data and as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Income Statement
Net interest income		$      7,423		$      7,113		$      7,186		$      7,197		$      7,003		4 %		6 %		$    21,722		$    19,917		9 %
Non-interest income		1,943		1,899		1,717		1,843		1,802		2		8		5,559		5,293		5
Total net revenue(1)		9,366		9,012		8,903		9,040		8,805		4		6		27,281		25,210		8
Provision for credit losses		2,284		2,490		2,795		2,416		1,669		(8)		37		7,569		3,431		121
Non-interest expense:
Marketing		972		886		897		1,118		978		10		(1)		2,755		2,899		(5)
Operating expense		3,888		3,908		4,048		3,962		3,971		(1)		(2)		11,844		11,184		6
Total non-interest expense		4,860		4,794		4,945		5,080		4,949		1		(2)		14,599		14,083		4
Income from continuing operations before income taxes		2,222		1,728		1,163		1,544		2,187		29		2		5,113		7,696		(34)
Income tax provision		432		297		203		312		493		45		(12)		932		1,568		(41)
Net income		1,790		1,431		960		1,232		1,694		25		6		4,181		6,128		(32)
Dividends and undistributed earnings allocated to participating securities(2)		(28)		(23)		(16)		(14)		(21)		22		33		(67)		(74)		(9)
Preferred stock dividends		(57)		(57)		(57)		(57)		(57)		—		—		(171)		(171)		—
Net income available to common stockholders		$      1,705		$      1,351		$         887		$      1,161		$      1,616		26		6		$      3,943		$      5,883		(33)
Common Share Statistics
Basic earnings per common share:(2)
Net income per basic common share		$        4.46		$        3.53		$        2.32		$        3.03		$        4.21		26 %		6 %		$      10.31		$      14.90		(31) %
Diluted earnings per common share:(2)
Net income per diluted common share		$        4.45		$        3.52		$       2.31		$       3.03		$        4.20		26 %		6 %		$      10.28		$      14.84		(31) %
Weighted-average common shares outstanding (in millions):
Basic		382.5		382.8		382.6		382.6		383.4		—		—		382.7		394.9		(3) %
Diluted		383.3		383.7		383.8		383.7		384.6		—		—		383.6		396.4		(3)
Common shares outstanding (period-end, in millions)		381.0		381.4		382.0		381.3		382.0		—		—		381.0		382.0		—
Dividends declared and paid per common share		$        0.60		$        0.60		$        0.60		$        0.60		$        0.60		—		—		$        1.80		$        1.80		—
Tangible book value per common share (period-end)(3)		87.97		90.07		90.86		86.11		81.38		(2) %		8 %		87.97		81.38		8
												2023 Q3				Nine Months Ended September 30,
(Dollars in millions)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Balance Sheet (Period-End)
Loans held for investment		$  314,780		$  311,323		$  308,836		$  312,331		$  303,943		1 %		4 %		$  314,780		$  303,943		4 %
Interest-earning assets		445,428		441,250		445,166		427,248		415,262		1		7		445,428		415,262		7
Total assets		471,435		467,800		471,660		455,249		444,232		1		6		471,435		444,232		6
Interest-bearing deposits		317,217		314,393		318,641		300,789		282,802		1		12		317,217		282,802		12
Total deposits		346,011		343,705		349,827		332,992		317,193		1		9		346,011		317,193		9
Borrowings		49,247		50,258		48,777		48,715		54,607		(2)		(10)		49,247		54,607		(10)
Common equity		48,823		49,713		49,807		47,737		46,015		(2)		6		48,823		46,015		6
Total stockholders' equity		53,668		54,559		54,653		52,582		50,861		(2)		6		53,668		50,861		6
Balance Sheet (Average Balances)
Loans held for investment		$  312,759		$  309,655		$  307,756		$  306,881		$  300,186		1 %		4 %		$  310,075		$  287,304		8 %
Interest-earning assets		443,532		439,139		435,199		421,051		412,171		1		8		439,321		401,793		9
Total assets		469,860		466,652		462,324		449,659		447,088		1		5		466,279		437,523		7
Interest-bearing deposits		316,032		313,207		308,788		292,793		275,900		1		15		312,702		271,957		15
Total deposits		345,013		343,678		340,123		326,558		311,928		—		11		342,956		309,168		11
Borrowings		49,736		48,468		48,016		49,747		58,628		3		(15)		48,746		51,431		(5)
Common equity		50,166		50,511		49,927		47,594		49,696		(1)		1		50,202		51,184		(2)
Total stockholders' equity		55,012		55,357		54,773		52,439		54,541		(1)		1		55,048		56,030		(2)

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 2: Selected Metrics—Consolidated
												2023 Q3				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Performance Metrics
Net interest income growth (period over period)		4 %		(1) %		—		3 %		7 %		**		**		9 %		12 %		**
Non-interest income growth (period over period)		2		11		(7) %		2		5		**		**		5		15		**
Total net revenue growth (period over period)		4		1		(2)		3		7		**		**		8		13		**
Total net revenue margin(4)		8.45		8.21		8.18		8.59		8.55		24 bps		(10) bps		8.28		8.37		(9) bps
Net interest margin(5)		6.69		6.48		6.60		6.84		6.80		21		(11)		6.59		6.61		(2)
Return on average assets		1.52		1.23		0.83		1.10		1.52		29		—		1.20		1.87		(67)
Return on average tangible assets(6)		1.58		1.27		0.86		1.13		1.57		31		1		1.24		1.93		(69)
Return on average common equity(7)		13.59		10.70		7.11		9.76		13.01		289		58		10.47		15.33		(486)
Return on average tangible common equity(8)		19.59		15.30		10.15		14.22		18.59		429		100		15.01		21.62		(661)
Efficiency ratio(9)		51.89		53.20		55.54		56.19		56.21		(131)		(432)		53.51		55.86		(235)
Operating efficiency ratio(10)		41.51		43.36		45.47		43.83		45.10		(185)		(359)		43.41		44.36		(95)
Effective income tax rate for continuing operations		19.4		17.2		17.5		20.2		22.5		220		(310)		18.2		20.4		(220)
Employees (period-end, in thousands)		54.2		55.6		56.1		56.0		55.1		(3) %		(2) %		54.2		55.1		(2) %
Credit Quality Metrics
Allowance for credit losses		$  14,955		$  14,646		$  14,318		$  13,240		$  12,209		2 %		22 %		$    14,955		$    12,209		22 %
Allowance coverage ratio		4.75 %		4.70 %		4.64 %		4.24 %		4.02 %		5 bps		73 bps		4.75 %		4.02 %		73 bps
Net charge-offs		$    1,999		$    2,185		$    1,697		$    1,430		$       931		(9) %		115 %		$      5,881		$      2,543		131 %
Net charge-off rate(11)		2.56 %		2.82 %		2.21 %		1.86 %		1.24 %		(26) bps		132 bps		2.53 %		1.18 %		135 bps
30+ day performing delinquency rate		3.42		3.08		2.88		2.96		2.58		34		84		3.42		2.58		84
30+ day delinquency rate		3.71		3.36		3.09		3.21		2.78		35		93		3.71		2.78		93
Capital Ratios(12)
Common equity Tier 1 capital		13.0 %		12.7 %		12.5 %		12.5 %		12.2 %		30 bps		80 bps		13.0 %		12.2 %		80 bps
Tier 1 capital		14.3		14.0		13.9		13.9		13.6		30		70		14.3		13.6		70
Total capital		16.2		16.0		15.9		15.8		15.7		20		50		16.2		15.7		50
Tier 1 leverage		11.2		11.0		10.9		11.1		11.0		20		20		11.2		11.0		20
Tangible common equity ("TCE")(13)		7.3		7.6		7.6		7.5		7.2		(30)		10		7.3		7.2		10

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 3: Consolidated Statements of Income
												2023 Q3				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Interest income:
Loans, including loans held for sale		$      9,696		$      9,057		$      8,723		$      8,360		$      7,578		7 %		28 %		$     27,476		$     20,550		34 %
Investment securities		627		639		615		548		499		(2)		26		1,881		1,336		41
Other		550		470		416		250		123		17		**		1,436		193		**
Total interest income		10,873		10,166		9,754		9,158		8,200		7		33		30,793		22,079		39
Interest expense:
Deposits		2,611		2,277		1,856		1,335		689		15		**		6,744		1,200		**
Securitized debt obligations		249		236		211		170		120		6		108		696		214		**
Senior and subordinated notes		579		528		489		430		319		10		82		1,596		644		148
Other borrowings		11		12		12		26		69		(8)		(84)		35		104		(66)
Total interest expense		3,450		3,053		2,568		1,961		1,197		13		188		9,071		2,162		**
Net interest income		7,423		7,113		7,186		7,197		7,003		4		6		21,722		19,917		9
Provision for credit losses		2,284		2,490		2,795		2,416		1,669		(8)		37		7,569		3,431		121
Net interest income after provision for credit losses		5,139		4,623		4,391		4,781		5,334		11		(4)		14,153		16,486		(14)
Non-interest income:
Interchange fees, net		1,234		1,213		1,139		1,177		1,195		2		3		3,586		3,429		5
Service charges and other customer-related fees		453		411		379		395		415		10		9		1,243		1,230		1
Other		256		275		199		271		192		(7)		33		730		634		15
Total non-interest income		1,943		1,899		1,717		1,843		1,802		2		8		5,559		5,293		5
Non-interest expense:
Salaries and associate benefits		2,274		2,317		2,427		2,266		2,187		(2)		4		7,018		6,159		14
Occupancy and equipment		518		506		508		554		502		2		3		1,532		1,496		2
Marketing		972		886		897		1,118		978		10		(1)		2,755		2,899		(5)
Professional services		295		290		324		481		471		2		(37)		909		1,326		(31)
Communications and data processing		344		344		350		352		349		—		(1)		1,038		1,027		1
Amortization of intangibles		24		22		14		25		17		9		41		60		45		33
Other		433		429		425		284		445		1		(3)		1,287		1,131		14
Total non-interest expense		4,860		4,794		4,945		5,080		4,949		1		(2)		14,599		14,083		4
Income from continuing operations before income taxes		2,222		1,728		1,163		1,544		2,187		29		2		5,113		7,696		(34)
Income tax provision		432		297		203		312		493		45		(12)		932		1,568		(41)
Net income		1,790		1,431		960		1,232		1,694		25		6		4,181		6,128		(32)
Dividends and undistributed earnings allocated to participating securities(2)		(28)		(23)		(16)		(14)		(21)		22		33		(67)		(74)		(9)
Preferred stock dividends		(57)		(57)		(57)		(57)		(57)		—		—		(171)		(171)		—
Net income available to common stockholders		$      1,705		$      1,351		$         887		$      1,161		$      1,616		26		6		$       3,943		$       5,883		(33)
												2023 Q3				Nine Months Ended September 30,
		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Basic earnings per common share:(2)
Net income per basic common share		$        4.46		$        3.53		$        2.32		$        3.03		$        4.21		26 %		6 %		$       10.31		$       14.90		(31) %
Diluted earnings per common share:(2)
Net income per diluted common share		$        4.45		$        3.52		$        2.31		$        3.03		$        4.20		26 %		6 %		$       10.28		$       14.84		(31) %
Weighted-average common shares outstanding (in millions):
Basic common shares		382.5		382.8		382.6		382.6		383.4		—		—		382.7		394.9		(3)
Diluted common shares		383.3		383.7		383.8		383.7		384.6		—		—		383.6		396.4		(3)

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 4: Consolidated Balance Sheets
												2023 Q3
(Dollars in millions)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3
Assets:
Cash and cash equivalents:
Cash and due from banks		$     4,620		$     3,360		$     3,347		$     5,193		$     3,716		38 %		24 %
Interest-bearing deposits and other short-term investments		40,249		38,236		43,166		25,663		21,176		5		90
Total cash and cash equivalents		44,869		41,596		46,513		30,856		24,892		8		80
Restricted cash for securitization investors		435		452		460		400		399		(4)		9
Securities available for sale		74,837		78,412		81,925		76,919		75,303		(5)		(1)
Loans held for investment:
Unsecuritized loans held for investment		284,953		280,933		280,093		283,282		277,576		1		3
Loans held in consolidated trusts		29,827		30,390		28,743		29,049		26,367		(2)		13
Total loans held for investment		314,780		311,323		308,836		312,331		303,943		1		4
Allowance for credit losses		(14,955)		(14,646)		(14,318)		(13,240)		(12,209)		2		22
Net loans held for investment		299,825		296,677		294,518		299,091		291,734		1		3
Loans held for sale		742		1,211		363		203		1,729		(39)		(57)
Premises and equipment, net		4,378		4,359		4,365		4,351		4,265		—		3
Interest receivable		2,469		2,297		2,250		2,104		1,853		7		33
Goodwill		15,048		15,060		14,779		14,777		14,771		—		2
Other assets		28,832		27,736		26,487		26,548		29,286		4		(2)
Total assets		$ 471,435		$ 467,800		$ 471,660		$ 455,249		$ 444,232		1		6
												2023 Q3
(Dollars in millions)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3
Liabilities:
Interest payable		$        685		$        637		$        621		$        527		$        433		8 %		58 %
Deposits:
Non-interest-bearing deposits		28,794		29,312		31,186		32,203		34,391		(2)		(16)
Interest-bearing deposits		317,217		314,393		318,641		300,789		282,802		1		12
Total deposits		346,011		343,705		349,827		332,992		317,193		1		9
Securitized debt obligations		17,417		17,861		17,813		16,973		15,926		(2)		9
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase		522		649		542		883		528		(20)		(1)
Senior and subordinated notes		31,283		31,627		30,398		30,826		30,615		(1)		2
Other borrowings		25		121		24		33		7,538		(79)		(100)
Total other debt		31,830		32,397		30,964		31,742		38,681		(2)		(18)
Other liabilities		21,824		18,641		17,782		20,433		21,138		17		3
Total liabilities		417,767		413,241		417,007		402,667		393,371		1		6
Stockholders' equity:
Preferred stock		0		0		0		0		0		—		—
Common stock		7		7		7		7		7		—		—
Additional paid-in capital, net		35,334		35,163		34,952		34,725		34,579		—		2
Retained earnings		60,529		59,028		57,898		57,184		56,240		3		8
Accumulated other comprehensive loss		(12,224)		(9,818)		(8,540)		(9,916)		(10,704)		25		14
Treasury stock, at cost		(29,978)		(29,821)		(29,664)		(29,418)		(29,261)		1		2
Total stockholders' equity		53,668		54,559		54,653		52,582		50,861		(2)		6
Total liabilities and stockholders' equity		$ 471,435		$ 467,800		$ 471,660		$ 455,249		$ 444,232		1		6

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 5: Notes to Financial Summary, Selected Metrics and Consolidated Financial Statements (Tables 1—4)
(1)	Total net revenue was reduced by $449 million in Q3 2023, $443 million in Q2 2023, $405 million in Q1 2023, $321 million in Q4 2022 and $222 million in Q3 2022 for credit card finance charges and fees charged-off as uncollectible.
(2)	Dividends and undistributed earnings allocated to participating securities and earnings per share are computed independently for each period. Accordingly, the sum of each quarterly amount may not agree to the year-to-date total. We also provide adjusted diluted earnings per share, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(3)	Tangible book value per common share is a non-GAAP measure calculated based on TCE divided by common shares outstanding. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(4)	Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(5)	Net interest margin is calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(6)	Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period divided by average tangible assets for the period. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(7)	Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.
(8)	Return on average tangible common equity is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average TCE. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
(9)	Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period. We also provide an adjusted efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(10)	Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. We also provide an adjusted operating efficiency ratio, which is a non-GAAP measure. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on our non-GAAP measures.
(11)	Net charge-off rate is calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(12)	Capital ratios as of the end of Q3 2023 are preliminary and therefore subject to change. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for information on the calculation of each of these ratios.
(13)	TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" for additional information on non-GAAP measures.
**    Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 6: Average Balances, Net Interest Income and Net Interest Margin
		2023 Q3						2023 Q2						2022 Q3
(Dollars in millions, except as noted)		Average Balance		Interest Income/ Expense		Yield/Rate(1)		Average Balance		Interest Income/ Expense		Yield/Rate(1)		Average Balance		Interest Income/ Expense		Yield/Rate(1)
Interest-earning assets:
Loans, including loans held for sale		$   313,461		$       9,696		12.37 %		$   310,335		$      9,057		11.67 %		$   300,952		$       7,578		10.07 %
Investment securities		87,845		627		2.86		89,994		639		2.84		88,666		499		2.25
Cash equivalents and other		42,226		550		5.21		38,810		470		4.84		22,553		123		2.19
Total interest-earning assets		$   443,532		$     10,873		9.81		$   439,139		$     10,166		9.26		$   412,171		$       8,200		7.96
Interest-bearing liabilities:
Interest-bearing deposits		$   316,032		$       2,611		3.30		$   313,207		$       2,277		2.91		$   275,900		$          689		1.00
Securitized debt obligations		17,649		249		5.63		17,771		236		5.31		17,108		120		2.81
Senior and subordinated notes		31,522		579		7.36		30,161		528		7.00		30,962		319		4.13
Other borrowings and liabilities		2,473		11		1.79		2,419		12		1.95		12,296		69		2.20
Total interest-bearing liabilities		$   367,676		$       3,450		3.75		$   363,558		$       3,053		3.36		$   336,266		$       1,197		1.42
Net interest income/spread				$       7,423		6.05				$       7,113		5.90				$       7,003		6.53
Impact of non-interest-bearing funding						0.64						0.58						0.27
Net interest margin						6.69 %						6.48 %						6.80 %
								Nine Months Ended September 30,
								2023						2022
(Dollars in millions, except as noted)								Average Balance		Interest Income/ Expense		Yield/Rate(1)		Average Balance		Interest Income/ Expense		Yield/Rate(1)
Interest-earning assets:
Loans, including loans held for sale								$   310,657		$     27,476		11.79 %		$   289,116		$     20,550		9.48 %
Investment securities								89,259		1,881		2.81		91,788		1,336		1.94
Cash equivalents and other								39,405		1,436		4.86		20,889		193		1.23
Total interest-earning assets								$   439,321		$     30,793		9.35		$   401,793		$     22,079		7.33
Interest-bearing liabilities:
Interest-bearing deposits								$   312,702		$       6,744		2.88		$   271,957		$       1,200		0.59
Securitized debt obligations								17,558		696		5.28		15,309		214		1.87
Senior and subordinated notes								30,611		1,596		6.95		28,804		644		2.98
Other borrowings and liabilities								2,410		35		1.94		8,982		104		1.53
Total interest-bearing liabilities								$   363,281		$       9,071		3.33		$   325,052		$       2,162		0.89
Net interest income/spread										$     21,722		6.02				$     19,917		6.44
Impact of non-interest-bearing funding												0.57						0.17
Net interest margin												6.59 %						6.61 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 7: Loan Information and Performance Statistics
												2023 Q3				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs. 2022
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card		$   140,320		$   135,975		$   130,980		$   131,581		$   121,279		3 %		16 %		$ 140,320		$ 121,279		16 %
International card businesses		6,463		6,516		6,162		6,149		5,634		(1)		15		6,463		5,634		15
Total credit card		146,783		142,491		137,142		137,730		126,913		3		16		146,783		126,913		16
Consumer banking:
Auto		75,456		75,841		76,652		78,373		79,580		(1)		(5)		75,456		79,580		(5)
Retail banking		1,388		1,439		1,499		1,552		1,619		(4)		(14)		1,388		1,619		(14)
Total consumer banking		76,844		77,280		78,151		79,925		81,199		(1)		(5)		76,844		81,199		(5)
Commercial banking:
Commercial and multifamily real estate		35,622		36,041		37,132		37,453		38,225		(1)		(7)		35,622		38,225		(7)
Commercial and industrial		55,531		55,511		56,411		57,223		57,606		—		(4)		55,531		57,606		(4)
Total commercial banking		91,153		91,552		93,543		94,676		95,831		—		(5)		91,153		95,831		(5)
Total loans held for investment		$   314,780		$   311,323		$   308,836		$   312,331		$   303,943		1		4		$ 314,780		$ 303,943		4
Loans Held for Investment (Average)
Credit card:
Domestic credit card		$   137,500		$   132,505		$   128,562		$   124,816		$   117,467		4 %		17 %		$ 132,889		$ 111,032		20 %
International card businesses		6,549		6,257		6,108		5,836		5,890		5		11		6,306		5,902		7
Total credit card		144,049		138,762		134,670		130,652		123,357		4		17		139,195		116,934		19
Consumer banking:
Auto		75,740		76,233		77,465		79,108		79,741		(1)		(5)		76,473		78,659		(3)
Retail banking		1,414		1,465		1,529		1,592		1,598		(3)		(12)		1,469		1,687		(13)
Total consumer banking		77,154		77,698		78,994		80,700		81,339		(1)		(5)		77,942		80,346		(3)
Commercial banking:
Commercial and multifamily real estate		35,964		37,068		37,373		37,848		38,230		(3)		(6)		36,796		36,231		2
Commercial and industrial		55,592		56,127		56,719		57,681		57,260		(1)		(3)		56,142		53,793		4
Total commercial banking		91,556		93,195		94,092		95,529		95,490		(2)		(4)		92,938		90,024		3
Total average loans held for investment		$   312,759		$   309,655		$   307,756		$   306,881		$   300,186		1		4		$ 310,075		$ 287,304		8
												2023 Q3				Nine Months Ended September 30,
		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs. 2022
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card(2)		4.40 %		4.38 %		4.04 %		3.22 %		2.20 %		2 bps		220 bps		4.28 %		2.19 %		209 bps
International card businesses		4.87		4.98		4.54		4.29		3.30		(11)		157		4.80		3.44		136
Total credit card		4.42		4.41		4.06		3.27		2.25		1		217		4.30		2.26		204
Consumer banking:
Auto		1.77		1.40		1.53		1.66		1.05		37		72		1.57		0.77		80
Retail banking		3.80		3.25		2.97		5.15		3.89		55		(9)		3.33		3.95		(62)
Total consumer banking		1.81		1.43		1.56		1.73		1.10		38		71		1.60		0.84		76
Commercial banking:
Commercial and multifamily real estate		0.27		3.91		0.19		0.05		0.03		(364)		24		1.46		(0.02)		148
Commercial and industrial		0.24		0.11		0.03		0.06		0.06		13		18		0.13		0.15		(2)
Total commercial banking		0.25		1.62		0.09		0.06		0.05		(137)		20		0.66		0.08		58
Total net charge-offs		2.56		2.82		2.21		1.86		1.24		(26)		132		2.53		1.18		135
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card		4.31 %		3.74 %		3.66 %		3.43 %		2.97 %		57 bps		134  bps		4.31 %		2.97 %		134 bps
International card businesses		4.43		4.24		4.20		4.03		3.90		19		53		4.43		3.90		53
Total credit card		4.32		3.77		3.68		3.46		3.01		55		131		4.32		3.01		131
Consumer banking:
Auto		5.64		5.38		5.00		5.62		4.85		26		79		5.64		4.85		79
Retail banking		1.07		1.19		0.56		1.02		0.84		(12)		23		1.07		0.84		23
Total consumer banking		5.55		5.30		4.92		5.53		4.77		25		78		5.55		4.77		78
Nonperforming Loans and Nonperforming Assets Rates(3)(4)
Credit card:
International card businesses		0.14 %		0.16 %		0.12 %		0.14 %		0.14 %		(2) bps		—		0.14 %		0.14 %		—
Total credit card		0.01		0.01		0.01		0.01		0.01		—		—		0.01		0.01		—
Consumer banking:
Auto		0.85		0.77		0.67		0.76		0.60		8		25 bps		0.85		0.60		25 bps
Retail banking		3.28		2.99		2.94		2.49		2.62		29		66		3.28		2.62		66
Total consumer banking		0.89		0.82		0.72		0.79		0.64		7		25		0.89		0.64		25
Commercial banking:
Commercial and multifamily real estate		1.29		1.15		0.90		0.72		0.64		14		65		1.29		0.64		65
Commercial and industrial		0.65		0.71		0.72		0.75		0.53		(6)		12		0.65		0.53		12
Total commercial banking		0.90		0.89		0.79		0.74		0.57		1		33		0.90		0.57		33
Total nonperforming loans		0.48		0.47		0.42		0.43		0.35		1		13		0.48		0.35		13
Total nonperforming assets		0.50		0.48		0.44		0.45		0.37		2		13		0.50		0.37		13

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
		Three Months Ended September 30, 2023
		Credit Card						Consumer Banking
(Dollars in millions)		Domestic Card		International Card Businesses		Total Credit Card		Auto		Retail Banking		Total Consumer Banking		Commercial Banking		Total
Allowance for credit losses:
Balance as of June 30, 2023		$       10,576		$             400		$       10,976		$         2,150		$             35		$         2,185		$         1,485		$       14,646
Charge-offs		(1,811)		(114)		(1,925)		(579)		(17)		(596)		(60)		(2,581)
Recoveries		299		34		333		244		3		247		2		582
Net charge-offs		(1,512)		(80)		(1,592)		(335)		(14)		(349)		(58)		(1,999)
Provision for credit losses		1,861		92		1,953		198		15		213		155		2,321
Allowance build (release) for credit losses		349		12		361		(137)		1		(136)		97		322
Other changes(5)		—		(13)		(13)		—		—		—		—		(13)
Balance as of September 30, 2023		10,925		399		11,324		2,013		36		2,049		1,582		14,955
Reserve for unfunded lending commitments:
Balance as of June 30, 2023		—		—		—		—		—		—		197		197
Provision (benefit) for losses on unfunded lending commitments		—		—		—		—		—		—		(39)		(39)
Balance as of September 30, 2023		—		—		—		—		—		—		158		158
Combined allowance and reserve as of September 30, 2023		$       10,925		$             399		$       11,324		$         2,013		$             36		$         2,049		$         1,740		$       15,113
		Nine Months Ended September 30, 2023
		Credit Card						Consumer Banking
(Dollars in millions)		Domestic Card		International Card Businesses		Total Credit Card		Auto		Retail Banking		Total Consumer Banking		Commercial Banking		Total
Allowance for credit losses:
Balance as of December 31, 2022		$         9,165		$             380		$         9,545		$         2,187		$             50		$         2,237		$         1,458		$       13,240
Cumulative effects of accounting standards adoption(6)		(40)		(23)		(63)		—		—		—		—		(63)
Balance as of January 1, 2023		9,125		357		9,482		2,187		50		2,237		1,458		13,177
Charge-offs		(5,156)		(325)		(5,481)		(1,602)		(51)		(1,653)		(462)		(7,596)
Recoveries		894		98		992		704		14		718		5		1,715
Net charge-offs		(4,262)		(227)		(4,489)		(898)		(37)		(935)		(457)		(5,881)
Provision for credit losses		6,030		268		6,298		724		23		747		581		7,626
Allowance build (release) for credit losses		1,768		41		1,809		(174)		(14)		(188)		124		1,745
Other changes(5)		32		1		33		—		—		—		—		33
Balance as of September 30, 2023		10,925		399		11,324		2,013		36		2,049		1,582		14,955
Reserve for unfunded lending commitments:
Balance as of December 31, 2022		—		—		—		—		—		—		218		218
Provision (benefit) for losses on unfunded lending commitments		—		—		—		—		—		—		(60)		(60)
Balance as of September 30, 2023		—		—		—		—		—		—		158		158
Combined allowance and reserve as of September 30, 2023		$       10,925		$             399		$       11,324		$         2,013		$             36		$         2,049		$         1,740		$       15,113

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 9: Financial Summary—Business Segment Results
		Three Months Ended September 30, 2023										Nine Months Ended September 30, 2023
(Dollars in millions)		Credit Card		Consumer Banking		Commercial Banking(7)		Other(7)		Total		Credit Card		Consumer Banking		Commercial Banking(7)		Other(7)		Total
Net interest income (loss)		$        5,114		$       2,133		$             621		$      (445)		$      7,423		$       14,498		$       6,762		$          1,901		$   (1,439)		$    21,722
Non-interest income (loss)		1,513		142		288		—		1,943		4,375		426		757		1		5,559
Total net revenue (loss)		6,627		2,275		909		(445)		9,366		18,873		7,188		2,658		(1,438)		27,281
Provision for credit losses		1,953		213		116		2		2,284		6,298		747		521		3		7,569
Non-interest expense		3,015		1,262		512		71		4,860		9,073		3,776		1,524		226		14,599
Income (loss) from continuing operations before income taxes		1,659		800		281		(518)		2,222		3,502		2,665		613		(1,667)		5,113
Income tax provision (benefit)		393		189		67		(217)		432		830		629		145		(672)		932
Income (loss) from continuing operations, net of tax		$        1,266		$          611		$             214		$      (301)		$      1,790		$        2,672		$       2,036		$             468		$      (995)		$      4,181
		Three Months Ended June 30, 2023
(Dollars in millions)		Credit Card		Consumer Banking		Commercial Banking(7)		Other(7)		Total
Net interest income (loss)		$        4,727		$       2,269		$             632		$      (515)		$      7,113
Non-interest income (loss)		1,499		149		257		(6)		1,899
Total net revenue (loss)		6,226		2,418		889		(521)		9,012
Provision for credit losses		2,084		259		146		1		2,490
Non-interest expense		3,020		1,231		482		61		4,794
Income (loss) from continuing operations before income taxes		1,122		928		261		(583)		1,728
Income tax provision (benefit)		265		219		61		(248)		297
Income (loss) from continuing operations, net of tax		$           857		$          709		$             200		$      (335)		$      1,431
		Three Months Ended September 30, 2022										Nine Months Ended September 30, 2022
(Dollars in millions)		Credit Card		Consumer Banking		Commercial Banking(7)		Other(7)		Total		Credit Card		Consumer Banking		Commercial Banking(7)		Other(7)		Total
Net interest income (loss)		$        4,313		$       2,311		$             699		$      (320)		$      7,003		$       12,051		$       6,571		$          1,941		$      (646)		$    19,917
Non-interest income (loss)		1,454		129		319		(100)		1,802		4,322		330		868		(227)		5,293
Total net revenue (loss)		5,767		2,440		1,018		(420)		8,805		16,373		6,901		2,809		(873)		25,210
Provision (benefit) for credit losses		1,261		285		123		—		1,669		2,387		696		353		(5)		3,431
Non-interest expense		3,004		1,340		542		63		4,949		8,558		3,862		1,515		148		14,083
Income (loss) from continuing operations before income taxes		1,502		815		353		(483)		2,187		5,428		2,343		941		(1,016)		7,696
Income tax provision (benefit)		356		193		83		(139)		493		1,291		555		223		(501)		1,568
Income (loss) from continuing operations, net of tax		$        1,146		$          622		$             270		$      (344)		$      1,694		$         4,137		$       1,788		$             718		$      (515)		$      6,128

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 10: Financial & Statistical Summary—Credit Card Business
												2023 Q3 vs				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Credit Card
Earnings:
Net interest income		$      5,114		$     4,727		$     4,657		$     4,533		$     4,313		8 %		19 %		$    14,498		$   12,051		20 %
Non-interest income		1,513		1,499		1,363		1,449		1,454		1		4		4,375		4,322		1
Total net revenue		6,627		6,226		6,020		5,982		5,767		6		15		18,873		16,373		15
Provision for credit losses		1,953		2,084		2,261		1,878		1,261		(6)		55		6,298		2,387		164
Non-interest expense		3,015		3,020		3,038		3,069		3,004		—		—		9,073		8,558		6
Income from continuing operations before income taxes		1,659		1,122		721		1,035		1,502		48		10		3,502		5,428		(35)
Income tax provision		393		265		172		245		356		48		10		830		1,291		(36)
Income from continuing operations, net of tax		$      1,266		$        857		$        549		$        790		$     1,146		48		10		$      2,672		$     4,137		(35)
Selected performance metrics:
Period-end loans held for investment		$  146,783		$ 142,491		$ 137,142		$ 137,730		$ 126,913		3		16		$  146,783		$ 126,913		16
Average loans held for investment		144,049		138,762		134,670		130,652		123,357		4		17		139,195		116,934		19
Average yield on loans outstanding(1)		19.02 %		18.17 %		17.98 %		17.69 %		16.74 %		85 bps		228 bps		18.40 %		15.67 %		273 bps
Total net revenue margin(8)		18.40		17.95		17.88		18.32		18.70		45		(30)		18.08		18.53		(45)
Net charge-off rate		4.42		4.41		4.06		3.27		2.25		1		217		4.30		2.26		204
30+ day performing delinquency rate		4.32		3.77		3.68		3.46		3.01		55		131		4.32		3.01		131
30+ day delinquency rate		4.32		3.77		3.69		3.46		3.02		55		130		4.32		3.02		130
Nonperforming loan rate(3)		0.01		0.01		0.01		0.01		0.01		—		—		0.01		0.01		—
Purchase volume(9)		$  158,640		$ 157,937		$ 141,658		$ 155,633		$ 149,497		—		6 %		$  458,235		$ 431,650		6 %
												2023 Q3 vs				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Domestic Card
Earnings:
Net interest income		$      4,827		$     4,453		$     4,390		$     4,280		$     4,065		8 %		19 %		$    13,670		$   11,336		21 %
Non-interest income		1,445		1,431		1,298		1,392		1,383		1		4		4,174		3,971		5
Total net revenue		6,272		5,884		5,688		5,672		5,448		7		15		17,844		15,307		17
Provision for credit losses		1,861		1,995		2,174		1,800		1,167		(7)		59		6,030		2,220		172
Non-interest expense		2,810		2,805		2,847		2,866		2,803		—		—		8,462		7,961		6
Income from continuing operations before income taxes		1,601		1,084		667		1,006		1,478		48		8		3,352		5,126		(35)
Income tax provision		378		256		157		238		351		48		8		791		1,215		(35)
Income from continuing operations, net of tax		$      1,223		$        828		$        510		$        768		$     1,127		48		9		$      2,561		$     3,911		(35)
Selected performance metrics:
Period-end loans held for investment		$  140,320		$ 135,975		$ 130,980		$ 131,581		$ 121,279		3		16		$  140,320		$ 121,279		16
Average loans held for investment		137,500		132,505		128,562		124,816		117,467		4		17		132,889		111,032		20
Average yield on loans outstanding(1)		18.96 %		18.07 %		17.88 %		17.58 %		16.61 %		89 bps		235 bps		18.31 %		15.51 %		280 bps
Total net revenue margin(8)		18.24		17.76		17.70		18.18		18.55		48		(31)		17.90		18.33		(43)
Net charge-off rate(2)		4.40		4.38		4.04		3.22		2.20		2		220		4.28		2.19		209
30+ day performing delinquency rate		4.31		3.74		3.66		3.43		2.97		57		134		4.31		2.97		134
Purchase volume(9)		$  154,880		$ 154,184		$ 138,310		$ 151,995		$ 145,805		—		6 %		$  447,374		$ 416,757		7 %
Refreshed FICO scores:(10)
Greater than 660		69 %		69 %		68 %		69 %		70 %		—		(1)		69 %		70 %		(1)
660 or below		31		31		32		31		30		—		1		31		30		1
Total		100 %		100 %		100 %		100 %		100 %						100 %		100 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 11: Financial & Statistical Summary—Consumer Banking Business
												2023 Q3 vs				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Consumer Banking
Earnings:
Net interest income		$    2,133		$     2,269		$     2,360		$     2,394		$     2,311		(6) %		(8) %		$     6,762		$     6,571		3 %
Non-interest income		142		149		135		139		129		(5)		10		426		330		29
Total net revenue		2,275		2,418		2,495		2,533		2,440		(6)		(7)		7,188		6,901		4
Provision for credit losses		213		259		275		477		285		(18)		(25)		747		696		7
Non-interest expense		1,262		1,231		1,283		1,450		1,340		3		(6)		3,776		3,862		(2)
Income from continuing operations before income taxes		800		928		937		606		815		(14)		(2)		2,665		2,343		14
Income tax provision		189		219		221		144		193		(14)		(2)		629		555		13
Income from continuing operations, net of tax		$        611		$        709		$        716		$        462		$        622		(14)		(2)		$     2,036		$     1,788		14
Selected performance metrics:
Period-end loans held for investment		$   76,844		$   77,280		$   78,151		$   79,925		$   81,199		(1)		(5)		$   76,844		$   81,199		(5)
Average loans held for investment		77,154		77,698		78,994		80,700		81,339		(1)		(5)		77,942		80,346		(3)
Average yield on loans held for investment(1)		7.97 %		7.65 %		7.40 %		7.31 %		7.20 %		32 bps		77 bps		7.67 %		7.15 %		52 bps
Auto loan originations		$     7,452		$     7,160		$     6,211		$     6,635		$     8,289		4 %		(10) %		$   20,823		$   30,330		(31) %
Period-end deposits		290,789		286,174		291,163		270,592		256,661		2		13		290,789		256,661		13
Average deposits		287,457		285,647		278,772		262,844		255,843		1		12		283,991		255,150		11
Average deposits interest rate		2.85 %		2.46 %		1.96 %		1.42 %		0.79 %		39 bps		206 bps		2.43 %		0.49 %		194 bps
Net charge-off rate		1.81		1.43		1.56		1.73		1.10		38		71		1.60		0.84		76
30+ day performing delinquency rate		5.55		5.30		4.92		5.53		4.77		25		78		5.55		4.77		78
30+ day delinquency rate		6.27		5.95		5.46		6.18		5.28		32		99		6.27		5.28		99
Nonperforming loan rate(3)		0.89		0.82		0.72		0.79		0.64		7		25		0.89		0.64		25
Nonperforming asset rate(4)		0.96		0.88		0.78		0.87		0.71		8		25		0.96		0.71		25
Auto—At origination FICO scores:(11)
Greater than 660		52 %		52 %		52 %		53 %		52 %		—		—		52 %		52 %		—
621 - 660		20		20		20		20		20		—		—		20		20		—
620 or below		28		28		28		27		28		—		—		28		28		—
Total		100 %		100 %		100 %		100 %		100 %						100 %		100 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 12: Financial & Statistical Summary—Commercial Banking Business
												2023 Q3 vs				Nine Months Ended September 30,
(Dollars in millions, except as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Commercial Banking
Earnings:
Net interest income(12)		$        621		$        632		$        648		$       520		$       699		(2) %		(11) %		$     1,901		$      1,941		(2) %
Non-interest income		288		257		212		261		319		12		(10)		757		868		(13)
Total net revenue(7)		909		889		860		781		1,018		2		(11)		2,658		2,809		(5)
Provision for credit losses		116		146		259		62		123		(21)		(6)		521		353		48
Non-interest expense		512		482		530		555		542		6		(6)		1,524		1,515		1
Income from continuing operations before income taxes		281		261		71		164		353		8		(20)		613		941		(35)
Income tax provision		67		61		17		39		83		10		(19)		145		223		(35)
Income from continuing operations, net of tax		$        214		$        200		$          54		$        125		$      270		7		(21)		$        468		$        718		(35)
Selected performance metrics:
Period-end loans held for investment(13)		$   91,153		$   91,552		$   93,543		$   94,676		$   95,831		—		(5)		$   91,153		$   95,831		(5)
Average loans held for investment		91,556		93,195		94,092		95,529		95,490		(2)		(4)		92,938		90,024		3
Average yield on loans held for investment(1)(7)		7.16 %		6.75 %		6.31 %		5.63 %		4.40 %		41 bps		276 bps		6.73 %		3.44 %		329 bps
Period-end deposits		$   36,035		$   36,793		$   38,380		$   40,808		$   41,058		(2) %		(12) %		$   36,035		$   41,058		(12) %
Average deposits		37,279		37,960		39,941		42,779		39,799		(2)		(6)		38,383		41,762		(8)
Average deposits interest rate		2.93 %		2.68 %		2.34 %		1.80 %		0.83 %		25 bps		210 bps		2.65 %		0.37 %		228 bps
Net charge-off rate		0.25		1.62		0.09		0.06		0.05		(137)		20		0.66		0.08		58
Nonperforming loan rate(3)		0.90		0.89		0.79		0.74		0.57		1		33		0.90		0.57		33
Nonperforming asset rate(4)		0.90		0.89		0.79		0.74		0.57		1		33		0.90		0.57		33
Risk category:(14)
Noncriticized		$   82,968		$   84,583		$   85,964		$   87,620		$   89,559		(2) %		(7) %		$   82,968		$   89,559		(7) %
Criticized performing		7,363		6,158		6,839		6,355		5,722		20		29		7,363		5,722		29
Criticized nonperforming		822		811		740		701		550		1		49		822		550		49
Total commercial banking loans held for investment		$   91,153		$   91,552		$   93,543		$   94,676		$   95,831		—		(5)		$   91,153		$   95,831		(5)
Risk category as a percentage of period-end loans held for investment:(14)
Noncriticized		91.02 %		92.38 %		91.90 %		92.55 %		93.46 %		(136) bps		(244) bps		91.02 %		93.46 %		(244) bps
Criticized performing		8.08		6.73		7.31		6.71		5.97		135		211		8.08		5.97		211
Criticized nonperforming		0.90		0.89		0.79		0.74		0.57		1		33		0.90		0.57		33
Total commercial banking loans		100.00 %		100.00 %		100.00 %		100.00 %		100.00 %						100.00 %		100.00 %

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 13: Financial & Statistical Summary—Other and Total
												2023 Q3 vs				Nine Months Ended September 30,
(Dollars in millions)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		2023 Q2		2022 Q3		2023		2022		2023 vs 2022
Other
Earnings:
Net interest loss(12)		$        (445)		$       (515)		$       (479)		$        (250)		$        (320)		(14) %		39 %		$     (1,439)		$        (646)		123 %
Non-interest income (loss)		—		(6)		7		(6)		(100)		**		**		1		(227)		**
Total net loss(7)		(445)		(521)		(472)		(256)		(420)		(15)		6		(1,438)		(873)		65
Provision (benefit) for credit losses		2		1		—		(1)		—		100		**		3		(5)		**
Non-interest expense(15)		71		61		94		6		63		16		13		226		148		53
Loss from continuing operations before income taxes		(518)		(583)		(566)		(261)		(483)		(11)		7		(1,667)		(1,016)		64
Income tax benefit		(217)		(248)		(207)		(116)		(139)		(13)		56		(672)		(501)		34
Loss from continuing operations, net of tax		$        (301)		$        (335)		$        (359)		$        (145)		$        (344)		(10)		(13)		$        (995)		$        (515)		93
Selected performance metrics:
Period-end deposits		$    19,187		$    20,738		$    20,284		$    21,592		$    19,474		(7)		(1)		$    19,187		$    19,474		(1)
Average deposits		20,277		20,071		21,410		20,935		16,286		1		25		20,582		12,256		68
Total
Earnings:
Net interest income		$      7,423		$      7,113		$      7,186		$      7,197		$      7,003		4 %		6 %		$    21,722		$    19,917		9 %
Non-interest income		1,943		1,899		1,717		1,843		1,802		2		8		5,559		5,293		5
Total net revenue		9,366		9,012		8,903		9,040		8,805		4		6		27,281		25,210		8
Provision for credit losses		2,284		2,490		2,795		2,416		1,669		(8)		37		7,569		3,431		121
Non-interest expense		4,860		4,794		4,945		5,080		4,949		1		(2)		14,599		14,083		4
Income from continuing operations before income taxes		2,222		1,728		1,163		1,544		2,187		29		2		5,113		7,696		(34)
Income tax provision		432		297		203		312		493		45		(12)		932		1,568		(41)
Income from continuing operations, net of tax		$      1,790		$      1,431		$         960		$      1,232		$      1,694		25		6		$      4,181		$      6,128		(32)
Selected performance metrics:
Period-end loans held for investment		$  314,780		$  311,323		$  308,836		$  312,331		$  303,943		1		4		$  314,780		$  303,943		4
Average loans held for investment		312,759		309,655		307,756		306,881		300,186		1		4		310,075		287,304		8
Period-end deposits		346,011		343,705		349,827		332,992		317,193		1		9		346,011		317,193		9
Average deposits		345,013		343,678		340,123		326,558		311,928		—		11		342,956		309,168		11

 

CAPITAL ONE FINANCIAL CORPORATION (COF)
Table 14: Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)
(1)	Average yield is calculated based on annualized interest income for the period divided by average loans during the period. Annualized interest income does not include any allocations, such as funds transfer pricing. Average yield is calculated using whole dollar values for average balances and interest income/expense. Accordingly, total interest earning assets less total interest bearing liabilities may not total net interest income/spread.
(2)	In August 2022, in addition to our normal recovery activity, we sold a pool of charged-off loans that resulted in elevated debt sale recovery activity of approximately $33 million, which decreased the Domestic Credit Card net charge-off rate for the third quarter of 2022 by approximately 11 basis points. Excluding the impact, the Domestic Credit Card net charge-off rate would have been 2.31% for the third quarter of 2022.
(3)	Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category. For Commercial Banking, loans categorized as nonperforming are considered criticized nonperforming.
(4)	Nonperforming assets consist of nonperforming loans, repossessed assets and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment, repossessed assets and other foreclosed assets.
(5)	Primarily represents the initial allowance for purchased credit-deteriorated loans and foreign currency translation adjustments. The initial allowance of purchased credit-deteriorated loans was $0 million and $32 million for the three and nine months ended September 30, 2023, respectively.
(6)	Impact from the adoption of ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures as of January 1, 2023.
(7)	Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.
(8)	Total net revenue margin is calculated based on total net revenue for the period divided by average loans outstanding during the period.
(9)	Purchase volume consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.
(10)	Percentages represent period-end loans held for investment in each credit score category. Domestic Card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category.
(11)	Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.
(12)	In the fourth quarter of 2022, an internal funds transfer pricing impact of $176 million decreased net interest income in the Commercial Banking business and increased the Other category, and was therefore neutral to Capital One Financial Corporation.
(13)	We reclassified $888 million in commercial office real estate loans from loans held for investment to loans held for sale as of June 30, 2023.
(14)	Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by bank regulatory authorities.
(15)	Includes charges incurred as a result of restructuring activities.
**    Not meaningful.

 

CAPITAL ONE FINANCIAL CORPORATION (COF) Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures(1)
		Basel III Standardized Approach
(Dollars in millions, except as noted)		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Regulatory Capital Metrics
Common equity excluding AOCI		$        62,245		$        60,729		$        59,546		$         59,450		$        58,516
Adjustments:
AOCI, net of tax(2)		(9)		31		(3)		(17)		(120)
Goodwill, net of related deferred tax liabilities		(14,797)		(14,813)		(14,538)		(14,540)		(14,537)
Other Intangible and deferred tax assets, net of deferred tax liabilities		(333)		(358)		(371)		(162)		(194)
Common equity Tier 1 capital		$        47,106		$        45,589		$        44,634		$         44,731		$        43,665
Tier 1 capital		$        51,952		$        50,434		$        49,479		$         49,576		$        48,510
Total capital(3)		58,844		57,607		56,611		56,714		55,938
Risk-weighted assets		362,945		359,613		356,079		357,920		356,801
Adjusted average assets(4)		464,286		459,732		455,477		444,704		439,479
Capital Ratios
Common equity Tier 1 capital(5)		13.0 %		12.7 %		12.5 %		12.5 %		12.2 %
Tier 1 capital(6)		14.3		14.0		13.9		13.9		13.6
Total capital(7)		16.2		16.0		15.9		15.8		15.7
Tier 1 leverage(4)		11.2		11.0		10.9		11.1		11.0
TCE(8)		7.3		7.6		7.6		7.5		7.2

 

Reconciliation of Non-GAAP Measures

The following non-GAAP measures consist of our adjusted results that we believe help investors and users of our financial information understand the effect of adjusting items on our selected reported results, however, they may not be comparable to similarly-titled measures reported by other companies. These adjusted results provide alternate measurements of our operating performance, both for the current period and trends across multiple periods. The following tables present reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

(Dollars in millions, except per share data and as noted)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3		Nine Months Ended September 30,
												2023		2022
Adjusted diluted earnings per share ("EPS"):
Net income available to common stockholders (GAAP)		$        1,705		$          1,351		$           887		$           1,161		$           1,616		$             3,943		$             5,883
Insurance recoveries and legal reserve activity		—		—		—		(177)		—		—		—
Restructuring charges		—		—		—		72		—		—		—
Adjusted net income available to common stockholders before income tax impacts (non-GAAP)		1,705		1,351		887		1,056		1,616		3,943		5,883
Income tax impacts		—		—		—		25		—		—		—
Adjusted net income available to common stockholders (non-GAAP)		$        1,705		$          1,351		$           887		$           1,081		$           1,616		$             3,943		$             5,883
Diluted weighted-average common shares outstanding (in millions) (GAAP)		383.3		383.7		383.8		383.7		384.6		383.6		396.4
Diluted EPS (GAAP)		$          4.45		$            3.52		$          2.31		$             3.03		$             4.20		$             10.28		$             14.84
Impact of adjustments noted above		—		—		—		(0.21)		—		—		—
Adjusted diluted EPS (non-GAAP)		$          4.45		$            3.52		$          2.31		$             2.82		$             4.20		$             10.28		$             14.84
Adjusted efficiency ratio:
Non-interest expense (GAAP)		$        4,860		$          4,794		$        4,945		$           5,080		$           4,949		$           14,599		$           14,083
Insurance recoveries and legal reserve activity		—		—		—		177		—		—		—
Restructuring charges		—		—		—		(72)		—		—		—
Adjusted non-interest expense (non-GAAP)		$        4,860		$          4,794		$        4,945		$           5,185		$           4,949		$           14,599		$           14,083
Total net revenue (GAAP)		$        9,366		$          9,012		$        8,903		$           9,040		$           8,805		$           27,281		$           25,210
Efficiency ratio (GAAP)		51.89 %		53.20 %		55.54 %		56.19 %		56.21 %		53.51 %		55.86 %
Impact of adjustments noted above		—		—		—		117 bps		—		—		—
Adjusted efficiency ratio (non-GAAP)		51.89 %		53.20 %		55.54 %		57.36 %		56.21 %		53.51 %		55.86 %
Adjusted operating efficiency ratio:
Operating expense (GAAP)		$        3,888		$          3,908		$        4,048		$           3,962		$           3,971		$           11,844		$           11,184
Insurance recoveries and legal reserve activity		—		—		—		177		—		—		—
Restructuring charges		—		—		—		(72)		—		—		—
Adjusted operating expense (non-GAAP)		$        3,888		$          3,908		$        4,048		$           4,067		$           3,971		$           11,844		$           11,184
Total net revenue (GAAP)		$        9,366		$          9,012		$        8,903		$           9,040		$           8,805		$           27,281		$           25,210
Operating efficiency ratio (GAAP)		41.51 %		43.36 %		45.47 %		43.83 %		45.10 %		43.41 %		44.36 %
Impact of adjustments noted above		—		—		—		116 bps		—		—		—
Adjusted operating efficiency ratio (non-GAAP)		41.51 %		43.36 %		45.47 %		44.99 %		45.10 %		43.41 %		44.36 %

 

Reconciliation of Non-GAAP Measures

The following summarizes our non-GAAP measures. While these non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the operating performance and capital position of financial services companies, they may not be comparable to similarly-titled measures reported by other companies. The following table presents reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with GAAP. 

(Dollars in millions)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3
Pre- Provision Earnings
Total net revenue		$         9,366		$         9,012		$         8,903		$         9,040		$         8,805
Non-interest expense		(4,860)		(4,794)		(4,945)		(5,080)		(4,949)
Pre-provision earnings(9)		$         4,506		$         4,218		$         3,958		$         3,960		$         3,856
Tangible Common Equity (Period-End)
Stockholders' equity		$       53,668		$       54,559		$       54,653		$       52,582		$       50,861
Goodwill and other intangible assets(10)		(15,308)		(15,356)		(15,098)		(14,902)		(14,932)
Noncumulative perpetual preferred stock		(4,845)		(4,845)		(4,845)		(4,845)		(4,845)
Tangible common equity(11)		$       33,515		$       34,358		$       34,710		$       32,835		$       31,084
Tangible Common Equity (Average)
Stockholders' equity		$       55,012		$       55,357		$       54,773		$       52,439		$       54,541
Goodwill and other intangible assets(10)		(15,348)		(15,187)		(14,984)		(14,926)		(14,916)
Noncumulative perpetual preferred stock		(4,845)		(4,845)		(4,845)		(4,845)		(4,845)
Tangible common equity(11)		$       34,819		$       35,325		$       34,944		$       32,668		$       34,780
Return on Tangible Common Equity (Average)
Net income available to common stockholders		$         1,705		$         1,351		$            887		$         1,161		$         1,616
Tangible common equity (Average)		34,819		35,325		34,944		32,668		34,780
Return on tangible common equity(11)(12)		19.59 %		15.30 %		10.15 %		14.22 %		18.59 %
Tangible Assets (Period-End)
Total assets		$     471,435		$     467,800		$     471,660		$     455,249		$     444,232
Goodwill and other intangible assets(10)		(15,308)		(15,356)		(15,098)		(14,902)		(14,932)
Tangible assets(11)		$     456,127		$     452,444		$     456,562		$     440,347		$     429,300
(Dollars in millions)		2023 Q3		2023 Q2		2023 Q1		2022 Q4		2022 Q3
Tangible Assets (Average)
Total assets		$     469,860		$     466,652		$     462,324		$     449,659		$     447,088
Goodwill and other intangible assets(10)		(15,348)		(15,187)		(14,984)		(14,926)		(14,916)
Tangible assets(11)		$     454,512		$     451,465		$     447,340		$     434,733		$     432,172
Return on Tangible Assets (Average)
Net income		$         1,790		$         1,431		$            960		$         1,232		$         1,694
Tangible Assets (Average)		454,512		451,465		447,340		434,733		432,172
Return on tangible assets(11)(13)		1.58 %		1.27 %		0.86 %		1.13 %		1.57 %
TCE Ratio
Tangible common equity (Period-end)		$       33,515		$       34,358		$       34,710		$       32,835		$       31,084
Tangible Assets (Period-end)		456,127		452,444		456,562		440,347		429,300
TCE Ratio(11)		7.3 %		7.6 %		7.6 %		7.5 %		7.2 %
Tangible Book Value per Share
Tangible common equity (Period-end)		$       33,515		$       34,358		$       34,710		$       32,835		$       31,084
Outstanding Common Shares		381.0		381.4		382.0		381.3		382.0
Tangible book value per common share(11)		$         87.97		$         90.07		$         90.86		$         86.11		$         81.38

__________

(1)	Regulatory capital metrics and capital ratios as of September 30, 2023 are preliminary and therefore subject to change.
(2)	Excludes certain components of AOCI in accordance with rules applicable to Category III institutions.
(3)	Total capital equals the sum of Tier 1 capital and Tier 2 capital.
(4)	Adjusted average assets for the purpose of calculating our Tier 1 leverage ratio represents total average assets adjusted for amounts that are deducted from Tier 1 capital, predominately goodwill and intangible assets. Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.
(5)	Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets.
(6)	Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(7)	Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.
(8)	TCE ratio is a Non-GAAP measure calculated based on TCE divided by tangible assets.
(9)	Management believes that this financial metric is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.
(10)	Includes impact of related deferred taxes.
(11)	Management believes that this financial metric is useful in assessing capital adequacy and the level of returns generated.
(12)	Return on average tangible common equity is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average TCE.
(13)	Return on average tangible assets is a non-GAAP measure calculated based on annualized income (loss) from continuing operations, net of tax, for the period divided by average tangible assets for the period.

 

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SOURCE Capital One Financial Corporation

FAQ

What is the net income of Capital One for Q3 2023?

Capital One reported a net income of $1.8 billion for Q3 2023.

What is the total net revenue for Q3 2023?

The total net revenue for Q3 2023 increased by 4% to $9.4 billion.

What is the common equity Tier 1 capital ratio?

The common equity Tier 1 capital ratio is 13.0%.

How much did period-end loans held for investment increase by?

Period-end loans held for investment increased by $3.5 billion to $314.8 billion.

How much did total deposits increase by?

Total deposits increased by $2.3 billion to $346.0 billion.