Capital One Reports First Quarter 2024 Net Income of $1.3 billion,
or $3.13 per share

Net of adjusting items, First Quarter 2024 Net Income of $3.21 per share(1)

McLean, Va. (April 25, 2024) – Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2024 of $1.3 billion, or $3.13 per diluted common share, compared with net income of $706 million, or $1.67 per diluted common share in the fourth quarter of 2023, and with net income of $960 million, or $2.31 per diluted common share in the first quarter of 2023. Adjusted net income(1) for the first quarter of 2024 was $3.21 per diluted common share.

“First quarter results continue to show top-line growth, stabilizing consumer credit, and balance sheet strength,” said Richard Fairbank, Founder, Chairman, and Chief Executive Officer “And in the quarter, we announced our definitive agreement to acquire Discover. The acquisition of Discover is a singular opportunity that creates a consumer banking and global payments platform with the capabilities, technology, brands, and customer franchise to create significant value for merchants, consumers, small businesses and shareholders."

The quarter included the following adjusting item:

All comparisons below are for the first quarter of 2024 compared with the fourth quarter of 2023 unless otherwise noted.

•Total net revenue decreased 1 percent to $9.4 billion.

•Total non-interest expense decreased 10 percent to $5.1 billion:

◦19 percent decrease in marketing.

◦8 percent decrease in operating expenses.

•Pre-provision earnings(2) increased 13 percent to $4.3 billion.

•Provision for credit losses decreased $174 million to $2.7 billion:

•Net charge-offs of $2.6 billion.

•$91 million loan reserve build.

•Net interest margin of 6.69 percent, a decrease of 4 basis points.

•Efficiency ratio of 54.64 percent.

◦Adjusted efficiency ratio(1) of 54.19 percent.

•Operating efficiency ratio of 43.89 percent.

◦Adjusted operating efficiency ratio(1) of 43.45 percent.

•Common equity Tier 1 capital ratio(3) under Basel III Standardized Approach of 13.1 percent at March 31, 2024.

•Period-end loans held for investment in the quarter decreased $5.3 billion, or 2 percent, to $315.2 billion.

◦Credit Card period-end loans decreased $4.0 billion, or 3 percent, to $150.6 billion.

•Domestic Card period-end loans decreased $3.8 billion, or 3 percent, to $143.9 billion.

◦Consumer Banking period-end loans decreased $338 million, or less than 1 percent, to $75.1 billion.

•Auto period-end loans decreased $274 million, or less than 1 percent, to $73.8 billion.

◦Commercial Banking period-end loans decreased $1.0 billion, or 1 percent, to $89.5 billion.

•Average loans held for investment in the quarter decreased $1.3 billion, or less than 1 percent, to $314.6 billion.

◦Credit Card average loans increased $1.0 billion, or 1 percent, to $149.6 billion.

•Domestic Card average loans increased $775 million, or 1 percent, to $142.9 billion.

◦Consumer Banking average loans decreased $1.1 billion, or 2 percent, to $75.1 billion.

•Auto average loans decreased $1.1 billion, or 1 percent, to $73.8 billion.

◦Commercial Banking average loans decreased $1.1 billion, or 1 percent, to $89.9 billion.

•Period-end total deposits increased $2.6 billion, or 1 percent, to $351.0 billion, while average deposits increased $329 million, or less than 1 percent, to $345.7 billion.

•Interest-bearing deposits rate paid increased 6 basis points to 3.53 percent.

The company will hold an earnings conference call on April 25, 2024 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 May 9, 2024 at 5:00 PM Eastern Time.

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, 2023 filed with the Securities and Exchange Commission (the “SEC”) and Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.

Capital One Financial Corporation (www.capitalone.com) is a financial holding company which, along with its subsidiaries, had $351.0 billion in deposits and $481.7 billion in total assets as of March 31, 2024. 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.

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Financial Supplement(1)(2)

First Quarter 2024

__________

(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 March 31, 2024 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.

    

    

																																				2024 Q1
(Dollars in millions, except as noted)						2024						2023						2023						2023						2023						2023						2023
						Q1						Q4						Q3						Q2						Q1						Q4						Q1
Performance Metrics
Net interest income growth (period over period)						—						1		%				4		%				(1)		%				—						**						**
Non-interest income growth (period over period)						(4)		%				2						2						11						(7)		%				**						**
Total net revenue growth (period over period)						(1)						1						4						1						(2)						**						**
Total net revenue margin(4)						8.40						8.51						8.45						8.21						8.18						(11)		bps				22		bps
Net interest margin(5)						6.69						6.73						6.69						6.48						6.60						(4)						9
Return on average assets						1.08						0.60						1.52						1.23						0.83						48						25
Return on average tangible assets(6)						1.11						0.62						1.58						1.27						0.86						49						25
Return on average common equity(7)						9.03						5.03						13.59						10.70						7.11						400						192
Return on average tangible common equity(8)						12.67						7.20						19.59						15.30						10.15						547						252
Efficiency ratio(9)						54.64						60.14						51.89						53.20						55.54						(550)						(90)
Operating efficiency ratio(10)						43.89						46.95						41.51						43.36						45.47						(306)						(158)
Effective income tax rate for continuing operations						19.1						24.2						19.4						17.2						17.5						(510)						160
Employees (period-end, in thousands)						51.3						52.0						54.2						55.6						56.1						(1)%						(9)%
Credit Quality Metrics
Allowance for credit losses						$	15,380					$	15,296					$	14,955					$	14,646					$	14,318					1%						7%
Allowance coverage ratio						4.88		%				4.77		%				4.75		%				4.70		%				4.64		%				11		bps				24		bps
Net charge-offs						$	2,616					$	2,533					$	1,999					$	2,185					$	1,697					3%						54%
Net charge-off rate(11)						3.33		%				3.21		%				2.56		%				2.82		%				2.21		%				12		bps				112		bps
30+ day performing delinquency rate						3.40						3.71						3.42						3.08						2.88						(31)						52
30+ day delinquency rate						3.67						3.99						3.71						3.36						3.09						(32)						58
Capital Ratios(12)
Common equity Tier 1 capital						13.1		%				12.9		%				13.0		%				12.7		%				12.5		%				20		bps				60		bps
Tier 1 capital						14.4						14.2						14.3						14.0						13.9						20						50
Total capital						16.3						16.0						16.2						16.0						15.9						30						40
Tier 1 leverage						11.3						11.2						11.2						11.0						10.9						10						40
Tangible common equity (“TCE”)(13)						8.1						8.2						7.3						7.6						7.6						(10)						50

    

 

(1)Total net revenue was reduced by $630 million in Q1 2024, $566 million in Q4 2023, $449 million in Q3 2023, $443 million in Q2 2023 and $405 million in Q1 2023 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 Q1 2024 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.

						2024 Q1																		2023 Q4																		2023 Q1
(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						$	315,563					$	9,920					12.57		%				$	316,670					$	9,934					12.55		%				$	308,115					$	8,723					11.32		%
Investment securities						88,581						687						3.10						88,650						669						3.02						89,960						615						2.73
Cash equivalents and other						43,659						570						5.21						41,609						542						5.21						37,124						416						4.49
Total interest-earning assets						$	447,803					$	11,177					9.98						$	446,929					$	11,145					9.97						$	435,199					$	9,754					8.96
Interest-bearing liabilities:
Interest-bearing deposits						$	318,450					$	2,812					3.53						$	316,808					$	2,745					3.47						$	308,788					$	1,856					2.40
Securitized debt obligations						17,836						261						5.85						18,022						263						5.84						17,251						211						4.90
Senior and subordinated notes						32,211						606						7.52						32,586						608						7.46						30,136						489						6.49
Other borrowings and liabilities(2)						2,373						10						1.78						2,349						10						1.74						2,335						12						2.08
Total interest-bearing liabilities						$	370,870					$	3,689					3.98						$	369,765					$	3,626					3.92						$	358,510					$	2,568					2.87
Net interest income/spread												$	7,488					6.00												$	7,519					6.05												$	7,186					6.10
Impact of non-interest-bearing funding																		0.69																		0.68																		0.50
Net interest margin																		6.69		%																6.73		%																6.60		%