SEC Filing | Capital One Financial Corp.

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cof-20230427

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

FORM 8-K

____________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

April 27, 2023

Date of Report (Date of earliest event reported)

____________________________________

CAPITAL ONE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

____________________________________


Delaware		001-13300	54-1719854
(State or other jurisdiction of incorporation)		(Commission File Number)	(IRS Employer Identification No.)
1680 Capital One Drive,
McLean,	Virginia		22102
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (703) 720-1000

(Not applicable)

(Former name or former address, if changed since last report)

____________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock (par value $.01 per share)	COF	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series I	COF PRI	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series J	COF PRJ	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series K	COF PRK	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series L	COF PRL	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series N	COF PRN	New York Stock Exchange
0.800% Senior Notes Due 2024	COF24	New York Stock Exchange
1.650% Senior Notes Due 2029	COF29	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On April 27, 2023, Capital One Financial Corporation (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2023. Copies of the Company’s press release and financial supplement are attached and furnished herewith as Exhibits 99.1 and 99.2 to this Form 8-K and are incorporated herein by reference.

Note: Information in this report (including Exhibits 99.1 and 99.2) furnished pursuant to Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.						Description
99.1						Press Release, dated April 27 , 2023 - First Quarter 2023
99.2						Financial Supplement - First Quarter 2023
104						The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

Earnings Conference Call Webcast Information.

The Company will hold an earnings conference call on April 27, 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. A replay of the webcast will be archived on the Company’s website through May 11, 2023 at 5:00 PM Eastern Time.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

CAPITAL ONE FINANCIAL CORPORATION

Date: April 27, 2023

By:

/s/ TIMOTHY P. GOLDEN

Timothy P. Golden

Controller and Principal Accounting Officer

Document

Exhibit 99.1

News Release

https://cdn.kscope.io/ed404e02121e1054e2bb082c0ba04aaf-earningsslidesvfinal1b58a.jpg


Contacts:
Investor Relations		Media Relations
Jeff Norris	Danielle Dietz	Sie Soheili
jeff.norris@capitalone.com	danielle.dietz@capitalone.com	sie.soheili@capitalone.com

FOR IMMEDIATE RELEASE: April 27, 2023

Capital One Reports First Quarter 2023 Net Income of $960 million,
or $2.31 per share

McLean, Va. (April 27, 2023) – Capital One Financial Corporation (NYSE: COF) today announced net income for the first quarter of 2023 of $960 million, or $2.31 per diluted common share, compared with net income of $1.2 billion, or $3.03 per diluted common share in the fourth quarter of 2022, and with net income of $2.4 billion, or $5.62 per diluted common share in the first quarter of 2022.

“In the first quarter, we built additional balance sheet strength as we grew retail deposits, and maintained or increased strong levels of capital and liquidity,” said Richard D. Fairbank, Founder, Chairman, and Chief Executive Officer. “At the same time, we continue to see attractive growth opportunities in our domestic card business and our “digital first” national retail bank, and our investments to transform our technology and to drive resilient growth put us in a strong position to capture opportunities and deliver compelling long-term shareholder value.”

All comparisons below are for the first quarter of 2023 compared with the fourth quarter of 2022 unless otherwise noted.

First Quarter 2023 Income Statement Summary:

•Total net revenue decreased 2 percent to $8.9 billion.

•Total non-interest expense decreased 3 percent to $4.9 billion:

◦20 percent decrease in marketing.

◦2 percent increase in operating expenses.

•Pre-provision earnings(1) remained flat at $4.0 billion.

•Provision for credit losses increased $379 million to $2.8 billion:

◦Net charge-offs of $1.7 billion.

◦$1.1 billion loan reserve build.

•Net interest margin of 6.60 percent, a decrease of 24 basis points.

•Efficiency ratio of 55.54 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 April 27, 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.

Capital One First Quarter 2023 Earnings

Page 2

•Operating efficiency ratio of 45.47 percent.

First Quarter 2023 Balance Sheet Summary:

•Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.5 percent at March 31, 2023.

•Period-end loans held for investment in the quarter decreased $3.5 billion, or 1 percent, to $308.8 billion.

◦Credit Card period-end loans decreased $588 million, or less than 1 percent, to $137.1 billion.

•Domestic Card period-end loans decreased $601 million, or less than 1 percent, to $131.0 billion.

◦Consumer Banking period-end loans decreased $1.8 billion, or 2 percent, to $78.2 billion.

•Auto period-end loans decreased $1.7 billion, or 2 percent, to $76.7 billion.

◦Commercial Banking period-end loans decreased $1.1 billion, or 1 percent, to $93.5 billion.

•Average loans held for investment in the quarter increased $875 million, or less than 1 percent, to $307.8 billion.

◦Credit Card average loans increased $4.0 billion, or 3 percent, to $134.7 billion.

•Domestic Card average loans increased $3.7 billion, or 3 percent, to $128.6 billion.

◦Consumer Banking average loans decreased $1.7 billion, or 2 percent, to $79.0 billion.

•Auto average loans decreased $1.6 billion, or 2 percent, to $77.5 billion.

◦Commercial Banking average loans decreased $1.4 billion, or 2 percent, to $94.1 billion.

•Period-end total deposits increased $16.8 billion, or 5 percent, to $349.8 billion, while average deposits increased $13.6 billion, or 4 percent, to $340.1 billion.

•Interest-bearing deposits rate paid increased 58 basis points to 2.40 percent.

Capital One First Quarter 2023 Earnings

Page 3

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on April 27, 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 May 11, 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 $349.8 billion in deposits and $471.7 billion in total assets as of March 31, 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 located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey 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.

###

Document

Exhibit 99.2

Capital One Financial Corporation

Financial Supplement(1)(2)

First 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	13
	Table 10:	Financial & Statistical Summary—Credit Card Business	14
	Table 11:	Financial & Statistical Summary—Consumer Banking Business	16
	Table 12:	Financial & Statistical Summary—Commercial Banking Business	17
	Table 13:	Financial & Statistical Summary—Other and Total	18
Other
	Table 14:	Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)	19
	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	20

__________

(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, 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 Q1 vs.
(Dollars in millions, except per share data and as noted)	2023		2022		2022		2022		2022		2022		2022
	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Income Statement
Net interest income	$	7,186	$	7,197	$	7,003	$	6,517	$	6,397	—		12	%
Non-interest income	1,717		1,843		1,802		1,715		1,776		(7)	%	(3)
Total net revenue(1)	8,903		9,040		8,805		8,232		8,173		(2)		9
Provision for credit losses	2,795		2,416		1,669		1,085		677		16		**
Non-interest expense:
Marketing	897		1,118		978		1,003		918		(20)		(2)
Operating expense	4,048		3,962		3,971		3,580		3,633		2		11
Total non-interest expense	4,945		5,080		4,949		4,583		4,551		(3)		9
Income from continuing operations before income taxes	1,163		1,544		2,187		2,564		2,945		(25)		(61)
Income tax provision	203		312		493		533		542		(35)		(63)


Net income	960		1,232		1,694		2,031		2,403		(22)		(60)
Dividends and undistributed earnings allocated to participating securities(2)	(16)		(14)		(21)		(25)		(28)		14		(43)
Preferred stock dividends	(57)		(57)		(57)		(57)		(57)		—		—

Net income available to common stockholders	$	887	$	1,161	$	1,616	$	1,949	$	2,318	(24)		(62)
Common Share Statistics
Basic earnings per common share:(2)


Net income per basic common share	$	2.32	$	3.03	$	4.21	$	4.98	$	5.65	(23)	%	(59)	%
Diluted earnings per common share:(2)


Net income per diluted common share	$	2.31	$	3.03	$	4.20	$	4.96	$	5.62	(24)	%	(59)	%
Weighted-average common shares outstanding (in millions):
Basic	382.6		382.6		383.4		391.2		410.4		—		(7)	%
Diluted	383.8		383.7		384.6		392.6		412.2		—		(7)
Common shares outstanding (period-end, in millions)	382.0		381.3		382.0		383.8		399.0		—		(4)
Dividends declared and paid per common share	$	0.60	$	0.60	$	0.60	$	0.60	$	0.60	—		—
Tangible book value per common share (period-end)(3)	90.86		86.11		81.38		87.84		91.77		6	%	(1)


											2023 Q1 vs.
(Dollars in millions)	2023		2022		2022		2022		2022		2022	2022
	Q1		Q4		Q3		Q2		Q1		Q4	Q1
Balance Sheet (Period-End)
Loans held for investment	$	308,836	$	312,331	$	303,943	$	296,384	$	280,466	(1)%	10%
Interest-earning assets	445,166		427,248		415,262		406,565		398,241		4	12
Total assets	471,660		455,249		444,232		440,288		434,195		4	9
Interest-bearing deposits	318,641		300,789		282,802		270,881		275,648		6	16
Total deposits	349,827		332,992		317,193		307,885		313,429		5	12
Borrowings	48,777		48,715		54,607		58,938		45,358		—	8
Common equity	49,807		47,737		46,015		48,564		51,499		4	(3)
Total stockholders’ equity	54,653		52,582		50,861		53,410		56,345		4	(3)
Balance Sheet (Average Balances)
Loans held for investment	$	307,756	$	306,881	$	300,186	$	286,110	$	275,342	—	12%
Interest-earning assets	435,199		421,051		412,171		398,934		394,082		3%	10
Total assets	462,324		449,659		447,088		435,327		430,372		3	7
Interest-bearing deposits	308,788		292,793		275,900		268,104		271,823		5	14
Total deposits	340,123		326,558		311,928		305,954		309,597		4	10
Borrowings	48,016		49,747		58,628		53,208		42,277		(3)	14
Common equity	49,927		47,594		49,696		49,319		54,591		5	(9)
Total stockholders’ equity	54,773		52,439		54,541		54,165		59,437		4	(8)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 2: Selected Metrics—Consolidated


																2023 Q1 vs.
(Dollars in millions, except as noted)	2023			2022			2022			2022			2022			2022		2022
	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Performance Metrics
Net interest income growth (period over period)	—			3		%	7		%	2		%	(1)		%	**		**
Non-interest income growth (period over period)	(7)		%	2			5			(3)			6			**		**
Total net revenue growth (period over period)	(2)			3			7			1			1			**		**
Total net revenue margin(4)	8.18			8.59			8.55			8.25			8.30			(41)	bps	(12)	bps
Net interest margin(5)	6.60			6.84			6.80			6.54			6.49			(24)		11
Return on average assets	0.83			1.10			1.52			1.87			2.23			(27)		(140)
Return on average tangible assets(6)	0.86			1.13			1.57			1.93			2.31			(27)		(145)
Return on average common equity(7)	7.11			9.76			13.01			15.81			16.98			(265)		(987)
Return on average tangible common equity(8)	10.15			14.22			18.59			22.63			23.36			(407)		(1,321)

Efficiency ratio(9)	55.54			56.19			56.21			55.67			55.68			(65)		(14)
Operating efficiency ratio(10)	45.47			43.83			45.10			43.49			44.45			164		102
Effective income tax rate for continuing operations	17.5			20.2			22.5			20.8			18.4			(270)		(90)
Employees (period-end, in thousands)	56.1			56.0			55.1			53.6			51.5			—		9%
Credit Quality Metrics
Allowance for credit losses	$	14,318		$	13,240		$	12,209		$	11,491		$	11,308		8%		27%
Allowance coverage ratio	4.64		%	4.24		%	4.02		%	3.88		%	4.03		%	40	bps	61	bps
Net charge-offs	$	1,697		$	1,430		$	931		$	845		$	767		19%		121%
Net charge-off rate(11)	2.21		%	1.86		%	1.24		%	1.18		%	1.11		%	35	bps	110	bps
30+ day performing delinquency rate	2.88			2.96			2.58			2.36			2.08			(8)		80
30+ day delinquency rate	3.09			3.21			2.78			2.54			2.21			(12)		88
Capital Ratios(12)
Common equity Tier 1 capital	12.5		%	12.5		%	12.2		%	12.1		%	12.7		%	—		(20)	bps
Tier 1 capital	13.9			13.9			13.6			13.5			14.1			—		(20)
Total capital	15.9			15.8			15.7			15.7			16.4			10	bps	(50)
Tier 1 leverage	10.9			11.1			11.0			11.1			11.3			(20)		(40)
Tangible common equity (“TCE”)(13)	7.6			7.5			7.2			7.9			8.7			10		(110)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 3: Consolidated Statements of Income


											2023 Q1 vs.
(Dollars in millions, except as noted)	2023		2022		2022		2022		2022		2022		2022
	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Interest income:
Loans, including loans held for sale	$	8,723	$	8,360	$	7,578	$	6,605	$	6,367	4	%	37	%
Investment securities	615		548		499		435		402		12		53
Other	416		250		123		55		15		66		**
Total interest income	9,754		9,158		8,200		7,095		6,784		7		44
Interest expense:
Deposits	1,856		1,335		689		293		218		39		**
Securitized debt obligations	211		170		120		65		29		24		**
Senior and subordinated notes	489		430		319		194		131		14		**
Other borrowings	12		26		69		26		9		(54)		33
Total interest expense	2,568		1,961		1,197		578		387		31		**
Net interest income	7,186		7,197		7,003		6,517		6,397		—		12
Provision for credit losses	2,795		2,416		1,669		1,085		677		16		**
Net interest income after provision for credit losses	4,391		4,781		5,334		5,432		5,720		(8)		(23)
Non-interest income:
Interchange fees, net	1,139		1,177		1,195		1,201		1,033		(3)		10
Service charges and other customer-related fees	379		395		415		415		400		(4)		(5)

Other	199		271		192		99		343		(27)		(42)
Total non-interest income	1,717		1,843		1,802		1,715		1,776		(7)		(3)
Non-interest expense:
Salaries and associate benefits	2,427		2,266		2,187		1,946		2,026		7		20
Occupancy and equipment	508		554		502		481		513		(8)		(1)
Marketing	897		1,118		978		1,003		918		(20)		(2)
Professional services	324		481		471		458		397		(33)		(18)
Communications and data processing	350		352		349		339		339		(1)		3
Amortization of intangibles	14		25		17		14		14		(44)		—
Other	425		284		445		342		344		50		24
Total non-interest expense	4,945		5,080		4,949		4,583		4,551		(3)		9
Income from continuing operations before income taxes	1,163		1,544		2,187		2,564		2,945		(25)		(61)
Income tax provision	203		312		493		533		542		(35)		(63)


Net income	960		1,232		1,694		2,031		2,403		(22)		(60)
Dividends and undistributed earnings allocated to participating securities(2)	(16)		(14)		(21)		(25)		(28)		14		(43)
Preferred stock dividends	(57)		(57)		(57)		(57)		(57)		—		—

Net income available to common stockholders	$	887	$	1,161	$	1,616	$	1,949	$	2,318	(24)		(62)


											2023 Q1 vs.
	2023		2022		2022		2022		2022		2022		2022
	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Basic earnings per common share:(2)


Net income per basic common share	$	2.32	$	3.03	$	4.21	$	4.98	$	5.65	(23)	%	(59)	%
Diluted earnings per common share:(2)


Net income per diluted common share	$	2.31	$	3.03	$	4.20	$	4.96	$	5.62	(24)	%	(59)	%
Weighted-average common shares outstanding (in millions):
Basic common shares	382.6		382.6		383.4		391.2		410.4		—		(7)
Diluted common shares	383.8		383.7		384.6		392.6		412.2		—		(7)

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 4: Consolidated Balance Sheets


											2023 Q1 vs.
	2023		2022		2022		2022		2022		2022		2022
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,347	$	5,193	$	3,716	$	4,825	$	5,107	(36)	%	(34)	%
Interest-bearing deposits and other short-term investments	43,166		25,663		21,176		16,728		21,697		68		99
Total cash and cash equivalents	46,513		30,856		24,892		21,553		26,804		51		74
Restricted cash for securitization investors	460		400		399		697		281		15		64
Securities available for sale	81,925		76,919		75,303		83,022		89,076		7		(8)
Loans held for investment:
Unsecuritized loans held for investment	280,093		283,282		277,576		271,339		257,505		(1)		9
Loans held in consolidated trusts	28,743		29,049		26,367		25,045		22,961		(1)		25
Total loans held for investment	308,836		312,331		303,943		296,384		280,466		(1)		10
Allowance for credit losses	(14,318)		(13,240)		(12,209)		(11,491)		(11,308)		8		27
Net loans held for investment	294,518		299,091		291,734		284,893		269,158		(2)		9
Loans held for sale	363		203		1,729		875		1,155		79		(69)
Premises and equipment, net	4,365		4,351		4,265		4,238		4,238		—		3
Interest receivable	2,250		2,104		1,853		1,611		1,479		7		52
Goodwill	14,779		14,777		14,771		14,778		14,784		—		—
Other assets	26,487		26,548		29,286		28,621		27,220		—		(3)
Total assets	$	471,660	$	455,249	$	444,232	$	440,288	$	434,195	4		9


											2023 Q1 vs.
	2023		2022		2022		2022		2022		2022		2022
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Liabilities:
Interest payable	$	621	$	527	$	433	$	333	$	261	18	%	138	%
Deposits:
Non-interest-bearing deposits	31,186		32,203		34,391		37,004		37,781		(3)		(17)
Interest-bearing deposits	318,641		300,789		282,802		270,881		275,648		6		16
Total deposits	349,827		332,992		317,193		307,885		313,429		5		12
Securitized debt obligations	17,813		16,973		15,926		17,466		13,740		5		30
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	542		883		528		440		594		(39)		(9)
Senior and subordinated notes	30,398		30,826		30,615		30,489		26,976		(1)		13
Other borrowings	24		33		7,538		10,543		4,048		(27)		(99)
Total other debt	30,964		31,742		38,681		41,472		31,618		(2)		(2)
Other liabilities	17,782		20,433		21,138		19,722		18,802		(13)		(5)
Total liabilities	417,007		402,667		393,371		386,878		377,850		4		10

Stockholders’ equity:
Preferred stock	0		0		0		0		0		—		—
Common stock	7		7		7		7		7		—		—
Additional paid-in capital, net	34,952		34,725		34,579		34,425		34,286		1		2
Retained earnings	57,898		57,184		56,240		54,836		53,099		1		9
Accumulated other comprehensive loss	(8,540)		(9,916)		(10,704)		(6,916)		(4,093)		(14)		109
Treasury stock, at cost	(29,664)		(29,418)		(29,261)		(28,942)		(26,954)		1		10
Total stockholders’ equity	54,653		52,582		50,861		53,410		56,345		4		(3)
Total liabilities and stockholders’ equity	$	471,660	$	455,249	$	444,232	$	440,288	$	434,195	4		9

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 $405 million in Q1 2023, $321 million in Q4 2022, $222 million in Q3 2022, $211 million in Q2 2022 and $192 million in Q1 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 Q1 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 Q1						2022 Q4						2022 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
Interest-earning assets:
Loans, including loans held for sale	$	308,115	$	8,723	11.32	%	$	307,852	$	8,360	10.86	%	$	279,022	$	6,367	9.13	%
Investment securities	89,960		615		2.73		87,110		548		2.52		94,700		402		1.70
Cash equivalents and other	37,124		416		4.49		26,089		250		3.84		20,360		15		0.29
Total interest-earning assets	$	435,199	$	9,754	8.96		$	421,051	$	9,158	8.70		$	394,082	$	6,784	6.89
Interest-bearing liabilities:
Interest-bearing deposits	$	308,788	$	1,856	2.40		$	292,793	$	1,335	1.82		$	271,823	$	218	0.32
Securitized debt obligations	17,251		211		4.90		16,478		170		4.13		13,740		29		0.84
Senior and subordinated notes	30,136		489		6.49		30,718		430		5.59		26,481		131		1.98
Other borrowings and liabilities	2,335		12		2.08		4,289		26		2.50		3,633		9		1.00
Total interest-bearing liabilities	$	358,510	$	2,568	2.87		$	344,278	$	1,961	2.28		$	315,677	$	387	0.49
Net interest income/spread			$	7,186	6.10				$	7,197	6.42				$	6,397	6.40
Impact of non-interest-bearing funding					0.50						0.42						0.09
Net interest margin					6.60	%					6.84	%					6.49	%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 7: Loan Information and Performance Statistics


											2023 Q1 vs.
	2023		2022		2022		2022		2022		2022		2022
(Dollars in millions, except as noted)	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Loans Held for Investment (Period-End)
Credit card:
Domestic credit card	$	130,980	$	131,581	$	121,279	$	115,004	$	107,987	—		21	%
International card businesses	6,162		6,149		5,634		5,876		5,975		—		3
Total credit card	137,142		137,730		126,913		120,880		113,962		—		20
Consumer banking:
Auto	76,652		78,373		79,580		79,926		78,604		(2)	%	(2)
Retail banking	1,499		1,552		1,619		1,605		1,726		(3)		(13)
Total consumer banking	78,151		79,925		81,199		81,531		80,330		(2)		(3)
Commercial banking:
Commercial and multifamily real estate	37,132		37,453		38,225		37,845		34,354		(1)		8
Commercial and industrial	56,411		57,223		57,606		56,128		51,820		(1)		9
Total commercial banking	93,543		94,676		95,831		93,973		86,174		(1)		9

Total loans held for investment	$	308,836	$	312,331	$	303,943	$	296,384	$	280,466	(1)		10
Loans Held for Investment (Average)
Credit card:
Domestic credit card	$	128,562	$	124,816	$	117,467	$	109,962	$	105,536	3	%	22	%
International card businesses	6,108		5,836		5,890		5,873		5,944		5		3
Total credit card	134,670		130,652		123,357		115,835		111,480		3		21
Consumer banking:
Auto	77,465		79,108		79,741		79,313		76,892		(2)		1
Retail banking	1,529		1,592		1,598		1,668		1,797		(4)		(15)
Total consumer banking	78,994		80,700		81,339		80,981		78,689		(2)		—
Commercial banking:
Commercial and multifamily real estate	37,373		37,848		38,230		35,754		34,671		(1)		8
Commercial and industrial	56,719		57,681		57,260		53,540		50,502		(2)		12
Total commercial banking	94,092		95,529		95,490		89,294		85,173		(2)		10
Total average loans held for investment	$	307,756	$	306,881	$	300,186	$	286,110	$	275,342	—		12


											2023 Q1 vs.
	2023		2022		2022		2022		2022		2022		2022
	Q1		Q4		Q3		Q2		Q1		Q4		Q1
Net Charge-Off (Recovery) Rates
Credit card:
Domestic credit card(2)	4.04	%	3.22	%	2.20	%	2.26	%	2.12	%	82	bps	192	bps
International card businesses	4.54		4.29		3.30		3.82		3.20		25		134
Total credit card	4.06		3.27		2.25		2.34		2.18		79		188
Consumer banking:
Auto	1.53		1.66		1.05		0.61		0.66		(13)		87
Retail banking	2.97		5.15		3.89		3.62		4.31		(218)		(134)
Total consumer banking	1.56		1.73		1.10		0.67		0.75		(17)		81
Commercial banking:
Commercial and multifamily real estate	0.19		0.05		0.03		(0.08)		—		14		19
Commercial and industrial	0.03		0.06		0.06		0.29		0.11		(3)		(8)
Total commercial banking	0.09		0.06		0.05		0.14		0.06		3		3
Total net charge-offs	2.21		1.86		1.24		1.18		1.11		35		110
30+ Day Performing Delinquency Rates
Credit card:
Domestic credit card	3.66	%	3.43	%	2.97	%	2.35	%	2.32	%	23	bps	134	bps
International card businesses	4.20		4.03		3.90		3.67		3.58		17		62
Total credit card	3.68		3.46		3.01		2.42		2.38		22		130
Consumer banking:
Auto	5.00		5.62		4.85		4.47		3.85		(62)		115
Retail banking	0.56		1.02		0.84		0.67		0.74		(46)		(18)
Total consumer banking	4.92		5.53		4.77		4.39		3.78		(61)		114
Nonperforming Loans and Nonperforming Assets Rates(3)(4)
Credit card:
International card businesses	0.12	%	0.14	%	0.14	%	0.13	%	0.14	%	(2)	bps	(2)	bps
Total credit card	0.01		0.01		0.01		0.01		0.01		—		—
Consumer banking:
Auto	0.67		0.76		0.60		0.50		0.41		(9)		26
Retail banking	2.94		2.49		2.62		2.61		2.63		45		31
Total consumer banking	0.72		0.79		0.64		0.54		0.46		(7)		26
Commercial banking:
Commercial and multifamily real estate	0.90		0.72		0.64		0.78		0.98		18		(8)
Commercial and industrial	0.72		0.75		0.53		0.64		0.69		(3)		3
Total commercial banking	0.79		0.74		0.57		0.70		0.81		5		(2)
Total nonperforming loans	0.42		0.43		0.35		0.37		0.38		(1)		4
Total nonperforming assets	0.44		0.45		0.37		0.39		0.40		(1)		4

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 8: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity



	Three Months Ended March 31, 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(5)	(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	(1,587)		(101)		(1,688)		(515)		(16)		(531)		(24)		(2,243)
Recoveries	288		31		319		219		5		224		3		546
Net charge-offs	(1,299)		(70)		(1,369)		(296)		(11)		(307)		(21)		(1,697)
Provision for credit losses	2,174		87		2,261		274		1		275		266		2,802
Allowance build (release) for credit losses	875		17		892		(22)		(10)		(32)		245		1,105
Other changes(6)	32		4		36		—		—		—		—		36
Balance as of March 31, 2023	10,032		378		10,410		2,165		40		2,205		1,703		14,318
Reserve for unfunded lending commitments:
Balance as of December 31, 2022	—		—		—		—		—		—		218		218


Provision (benefit) for losses on unfunded lending commitments	—		—		—		—		—		—		(7)		(7)

Balance as of March 31, 2023	—		—		—		—		—		—		211		211
Combined allowance and reserve as of March 31, 2023	$	10,032	$	378	$	10,410	$	2,165	$	40	$	2,205	$	1,914	$	14,529

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 9: Financial Summary—Business Segment Results


	Three Months Ended March 31, 2023
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking(7)		Other(7)		Total
Net interest income (loss)	$	4,657	$	2,360	$	648	$	(479)	$	7,186
Non-interest income	1,363		135		212		7		1,717
Total net revenue (loss)	6,020		2,495		860		(472)		8,903
Provision (benefit) for credit losses	2,261		275		259		—		2,795
Non-interest expense	3,038		1,283		530		94		4,945
Income (loss) from continuing operations before income taxes	721		937		71		(566)		1,163
Income tax provision (benefit)	172		221		17		(207)		203
Income (loss) from continuing operations, net of tax	$	549	$	716	$	54	$	(359)	$	960

	Three Months Ended December 31, 2022
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking(7)		Other(7)		Total
Net interest income (loss)	$	4,533	$	2,394	$	520	$	(250)	$	7,197
Non-interest income (loss)	1,449		139		261		(6)		1,843
Total net revenue (loss)	5,982		2,533		781		(256)		9,040
Provision (benefit) for credit losses	1,878		477		62		(1)		2,416
Non-interest expense	3,069		1,450		555		6		5,080
Income (loss) from continuing operations before income taxes	1,035		606		164		(261)		1,544
Income tax provision (benefit)	245		144		39		(116)		312
Income (loss) from continuing operations, net of tax	$	790	$	462	$	125	$	(145)	$	1,232

	Three Months Ended March 31, 2022
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking(7)		Other(7)		Total
Net interest income (loss)	$	3,839	$	2,113	$	607	$	(162)	$	6,397
Non-interest income (loss)	1,458		105		277		(64)		1,776
Total net revenue (loss)	5,297		2,218		884		(226)		8,173
Provision (benefit) for credit losses	545		130		8		(6)		677
Non-interest expense	2,783		1,236		488		44		4,551
Income (loss) from continuing operations before income taxes	1,969		852		388		(264)		2,945
Income tax provision (benefit)	469		202		92		(221)		542
Income (loss) from continuing operations, net of tax	$	1,500	$	650	$	296	$	(43)	$	2,403

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 10: Financial & Statistical Summary—Credit Card Business


																2023 Q1 vs.
	2023			2022			2022			2022			2022			2022		2022
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Credit Card
Earnings:
Net interest income	$	4,657		$	4,533		$	4,313		$	3,899		$	3,839		3%		21%
Non-interest income	1,363			1,449			1,454			1,410			1,458			(6)		(7)
Total net revenue	6,020			5,982			5,767			5,309			5,297			1		14
Provision for credit losses	2,261			1,878			1,261			581			545			20		**
Non-interest expense	3,038			3,069			3,004			2,771			2,783			(1)		9
Income from continuing operations before income taxes	721			1,035			1,502			1,957			1,969			(30)		(63)
Income tax provision	172			245			356			466			469			(30)		(63)
Income from continuing operations, net of tax	$	549		$	790		$	1,146		$	1,491		$	1,500		(31)		(63)
Selected performance metrics:
Period-end loans held for investment	$	137,142		$	137,730		$	126,913		$	120,880		$	113,962		—		20
Average loans held for investment	134,670			130,652			123,357			115,835			111,480			3		21
Average yield on loans outstanding(1)	17.98		%	17.69		%	16.74		%	15.24		%	14.97		%	29	bps	301	bps
Total net revenue margin(8)	17.88			18.32			18.70			18.33			18.56			(44)		(68)
Net charge-off rate	4.06			3.27			2.25			2.34			2.18			79		188
30+ day performing delinquency rate	3.68			3.46			3.01			2.42			2.38			22		130
30+ day delinquency rate	3.69			3.46			3.02			2.42			2.39			23		130
Nonperforming loan rate(3)	0.01			0.01			0.01			0.01			0.01			—		—
Purchase volume(9)	$	141,658		$	155,633		$	149,497		$	148,491		$	133,662		(9)%		6%


																2023 Q1 vs.
	2023			2022			2022			2022			2022			2022		2022
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Domestic Card
Earnings:
Net interest income	$	4,390		$	4,280		$	4,065		$	3,651		$	3,620		3%		21%
Non-interest income	1,298			1,392			1,383			1,340			1,248			(7)		4
Total net revenue	5,688			5,672			5,448			4,991			4,868			—		17
Provision for credit losses	2,174			1,800			1,167			494			559			21		**
Non-interest expense	2,847			2,866			2,803			2,594			2,564			(1)		11
Income from continuing operations before income taxes	667			1,006			1,478			1,903			1,745			(34)		(62)
Income tax provision	157			238			351			450			414			(34)		(62)
Income from continuing operations, net of tax	$	510		$	768		$	1,127		$	1,453		$	1,331		(34)		(62)
Selected performance metrics:
Period-end loans held for investment	$	130,980		$	131,581		$	121,279		$	115,004		$	107,987		—		21
Average loans held for investment	128,562			124,816			117,467			109,962			105,536			3		22
Average yield on loans outstanding(1)	17.88		%	17.58		%	16.61		%	15.03		%	14.82		%	30	bps	306	bps
Total net revenue margin(8)	17.70			18.18			18.55			18.16			18.28			(48)		(58)
Net charge-off rate(2)	4.04			3.22			2.20			2.26			2.12			82		192
30+ day performing delinquency rate	3.66			3.43			2.97			2.35			2.32			23		134
Purchase volume(9)	$	138,310		$	151,995		$	145,805		$	144,668		$	126,284		(9)%		10%
Refreshed FICO scores:(10)
Greater than 660	68		%	69		%	70		%	70		%	70		%	(1)		(2)
660 or below	32			31			30			30			30			1		2
Total	100		%	100		%	100		%	100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 11: Financial & Statistical Summary—Consumer Banking Business


																2023 Q1 vs.
	2023			2022			2022			2022			2022			2022		2022
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Consumer Banking
Earnings:
Net interest income	$	2,360		$	2,394		$	2,311		$	2,147		$	2,113		(1)%		12%
Non-interest income	135			139			129			96			105			(3)		29
Total net revenue	2,495			2,533			2,440			2,243			2,218			(2)		12
Provision for credit losses	275			477			285			281			130			(42)		112
Non-interest expense	1,283			1,450			1,340			1,286			1,236			(12)		4
Income from continuing operations before income taxes	937			606			815			676			852			55		10
Income tax provision	221			144			193			160			202			53		9
Income from continuing operations, net of tax	$	716		$	462		$	622		$	516		$	650		55		10
Selected performance metrics:
Period-end loans held for investment	$	78,151		$	79,925		$	81,199		$	81,531		$	80,330		(2)		(3)
Average loans held for investment	78,994			80,700			81,339			80,981			78,689			(2)		—
Average yield on loans held for investment(1)	7.40		%	7.31		%	7.20		%	7.08		%	7.17		%	9	bps	23	bps
Auto loan originations	$	6,211		$	6,635		$	8,289		$	10,328		$	11,713		(6)%		(47)%
Period-end deposits	291,163			270,592			256,661			255,904			258,359			8		13
Average deposits	278,772			262,844			255,843			254,336			255,265			6		9
Average deposits interest rate	1.96		%	1.42		%	0.79		%	0.38		%	0.29		%	54	bps	167	bps
Net charge-off rate	1.56			1.73			1.10			0.67			0.75			(17)		81
30+ day performing delinquency rate	4.92			5.53			4.77			4.39			3.78			(61)		114
30+ day delinquency rate	5.46			6.18			5.28			4.81			4.13			(72)		133
Nonperforming loan rate(3)	0.72			0.79			0.64			0.54			0.46			(7)		26
Nonperforming asset rate(4)	0.78			0.87			0.71			0.60			0.52			(9)		26
Auto—At origination FICO scores:(11)
Greater than 660	52		%	53		%	52		%	52		%	51		%	(1)%		1%
621 - 660	20			20			20			20			20			—		—
620 or below	28			27			28			28			29			1		(1)
Total	100		%	100		%	100		%	100		%	100		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 12: Financial & Statistical Summary—Commercial Banking Business


																2023 Q1 vs.
	2023			2022			2022			2022			2022			2022		2022
(Dollars in millions, except as noted)	Q1			Q4			Q3			Q2			Q1			Q4		Q1
Commercial Banking
Earnings:
Net interest income(12)	$	648		$	520		$	699		$	635		$	607		25%		7%
Non-interest income	212			261			319			272			277			(19)		(23)
Total net revenue(7)	860			781			1,018			907			884			10		(3)
Provision for credit losses	259			62			123			222			8			**		**
Non-interest expense	530			555			542			485			488			(5)		9
Income from continuing operations before income taxes	71			164			353			200			388			(57)		(82)
Income tax provision	17			39			83			48			92			(56)		(82)
Income from continuing operations, net of tax	$	54		$	125		$	270		$	152		$	296		(57)		(82)
Selected performance metrics:
Period-end loans held for investment	$	93,543		$	94,676		$	95,831		$	93,973		$	86,174		(1)		9
Average loans held for investment	94,092			95,529			95,490			89,294			85,173			(2)		10
Average yield on loans held for investment(1)(7)	6.31		%	5.63		%	4.40		%	3.18		%	2.66		%	68	bps	365	bps
Period-end deposits	$	38,380		$	40,808		$	41,058		$	38,844		$	45,232		(6)%		(15)%
Average deposits	39,941			42,779			39,799			40,536			45,008			(7)		(11)
Average deposits interest rate	2.34		%	1.80		%	0.83		%	0.19		%	0.12		%	54	bps	222	bps
Net charge-off rate	0.09			0.06			0.05			0.14			0.06			3		3
Nonperforming loan rate(3)	0.79			0.74			0.57			0.70			0.81			5		(2)
Nonperforming asset rate(4)	0.79			0.74			0.57			0.70			0.81			5		(2)
Risk category:(13)
Noncriticized	$	85,964		$	87,620		$	89,559		$	88,349		$	80,586		(2)%		7%
Criticized performing	6,839			6,355			5,722			4,969			4,893			8		40
Criticized nonperforming	740			701			550			655			695			6		6
Total commercial banking loans	$	93,543		$	94,676		$	95,831		$	93,973		$	86,174		(1)		9
Risk category as a percentage of period-end loans held for investment:(13)
Noncriticized	91.90		%	92.55		%	93.46		%	94.01		%	93.51		%	(65)	bps	(161)	bps
Criticized performing	7.31			6.71			5.97			5.29			5.68			60		163
Criticized nonperforming	0.79			0.74			0.57			0.70			0.81			5		(2)
Total commercial banking loans	100.00		%	100.00		%	100.00		%	100.00		%	100.00		%

CAPITAL ONE FINANCIAL CORPORATION (COF)

Table 13: Financial & Statistical Summary—Other and Total


											2023 Q1 vs.
	2023		2022		2022		2022		2022		2022	2022
(Dollars in millions)	Q1		Q4		Q3		Q2		Q1		Q4	Q1
Other
Earnings:
Net interest loss(12)	$	(479)	$	(250)	$	(320)	$	(164)	$	(162)	92%	196%
Non-interest income (loss)	7		(6)		(100)		(63)		(64)		**	**
Total net loss(7)	(472)		(256)		(420)		(227)		(226)		84	109
Provision (benefit) for credit losses	—		(1)		—		1		(6)		**	**
Non-interest expense(14)	94		6		63		41		44		**	114
Loss from continuing operations before income taxes	(566)		(261)		(483)		(269)		(264)		117	114
Income tax benefit	(207)		(116)		(139)		(141)		(221)		78	(6)
Loss from continuing operations, net of tax	$	(359)	$	(145)	$	(344)	$	(128)	$	(43)	148	**
Selected performance metrics:
Period-end deposits	$	20,284	$	21,592	$	19,474	$	13,137	$	9,838	(6)	106
Average deposits	21,410		20,935		16,286		11,082		9,324		2	130
Total
Earnings:
Net interest income	$	7,186	$	7,197	$	7,003	$	6,517	$	6,397	—	12%
Non-interest income	1,717		1,843		1,802		1,715		1,776		(7)%	(3)
Total net revenue	8,903		9,040		8,805		8,232		8,173		(2)	9
Provision for credit losses	2,795		2,416		1,669		1,085		677		16	**
Non-interest expense	4,945		5,080		4,949		4,583		4,551		(3)	9
Income from continuing operations before income taxes	1,163		1,544		2,187		2,564		2,945		(25)	(61)
Income tax provision	203		312		493		533		542		(35)	(63)
Income from continuing operations, net of tax	$	960	$	1,232	$	1,694	$	2,031	$	2,403	(22)	(60)
Selected performance metrics:
Period-end loans held for investment	$	308,836	$	312,331	$	303,943	$	296,384	$	280,466	(1)	10
Average loans held for investment	307,756		306,881		300,186		286,110		275,342		—	12
Period-end deposits	349,827		332,992		317,193		307,885		313,429		5	12
Average deposits	340,123		326,558		311,928		305,954		309,597		4	10

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)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.

(6)Primarily represents the initial allowance for purchased credit-deteriorated loans and foreign currency translation adjustments. The initial allowance of purchased credit-deteriorated loans was $32 million for the three months ended March 31, 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 the company.

(13)Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.

(14)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)	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
Regulatory Capital Metrics
Common equity excluding AOCI	$	59,546	$	59,450	$	58,516	$	57,278	$	57,390
Adjustments:
AOCI, net of tax(2)	(3)		(17)		(120)		(72)		(20)
Goodwill, net of related deferred tax liabilities	(14,538)		(14,540)		(14,537)		(14,548)		(14,559)
Other Intangible and deferred tax assets, net of deferred tax liabilities	(371)		(162)		(194)		(95)		(110)
Common equity Tier 1 capital	$	44,634	$	44,731	$	43,665	$	42,563	$	42,701
Tier 1 capital	$	49,479	$	49,576	$	48,510	$	47,408	$	47,547
Total capital(3)	56,611		56,714		55,938		55,100		55,059
Risk-weighted assets	356,089		357,920		356,801		351,746		336,739
Adjusted average assets(4)	455,477		444,704		439,479		427,446		418,957
Capital Ratios
Common equity Tier 1 capital(5)	12.5%		12.5%		12.2%		12.1%		12.7%
Tier 1 capital(6)	13.9		13.9		13.6		13.5		14.1
Total capital(7)	15.9		15.8		15.7		15.7		16.4
Tier 1 leverage(4)	10.9		11.1		11.0		11.1		11.3
TCE(8)	7.6		7.5		7.2		7.9		8.7

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.


	2023		2022		2022		2022		2022
(Dollars in millions, except per share data and as noted)	Q1		Q4		Q3		Q2		Q1
Adjusted diluted earnings per share (“EPS”):
Net income available to common stockholders (GAAP)	$	887	$	1,161	$	1,616	$	1,949	$	2,318
Insurance recoveries and legal reserve activity	—		(177)		—		—		—
Restructuring Charges	—		72		—		—		—

Adjusted net income available to common stockholders before income tax impacts (non-GAAP)	887		1,056		1,616		1,949		2,318
Income tax impacts	—		25		—		—		—

Adjusted net income available to common stockholders (non-GAAP)	$	887	$	1,081	$	1,616	$	1,949	$	2,318

Diluted weighted-average common shares outstanding (in millions) (GAAP)	383.8		383.7		384.6		392.6		412.2

Diluted EPS (GAAP)	$	2.31	$	3.03	$	4.20	$	4.96	$	5.62
Impact of adjustments noted above	—		(0.21)		—		—		—
Adjusted diluted EPS (non-GAAP)	$	2.31	$	2.82	$	4.20	$	4.96	$	5.62

Adjusted efficiency ratio:
Non-interest expense (GAAP)	$	4,945	$	5,080	$	4,949	$	4,583	$	4,551
Insurance recoveries and legal reserve activity	—		177		—		—		—
Restructuring Charges	—		(72)		—		—		—
Adjusted non-interest expense (non-GAAP)	$	4,945	$	5,185	$	4,949	$	4,583	$	4,551

Total net revenue (GAAP)	$	8,903	$	9,040	$	8,805	$	8,232	$	8,173




Efficiency ratio (GAAP)	55.54%		56.19%		56.21%		55.67%		55.68%
Impact of adjustments noted above	—		117bps		—		—		—
Adjusted efficiency ratio (non-GAAP)	55.54%		57.36%		56.21%		55.67%		55.68%

Adjusted operating efficiency ratio:
Operating expense (GAAP)	$	4,048	$	3,962	$	3,971	$	3,580	$	3,633
Insurance recoveries and legal reserve activity	—		177		—		—		—
Restructuring Charges	—		(72)		—		—		—
Adjusted operating expense (non-GAAP)	$	4,048	$	4,067	$	3,971	$	3,580	$	3,633


	2023			2022		2022		2022		2022
(Dollars in millions, except per share data and as noted)	Q1			Q4		Q3		Q2		Q1
Total net revenue (GAAP)	$	8,903		$	9,040	$	8,805	$	8,232	$	8,173




Operating efficiency ratio (GAAP)	45.47%			43.83%		45.10%		43.49%		44.45%
Impact of adjustments noted above	—			116bps		—		—		—
Adjusted operating efficiency ratio (non-GAAP)	45.47		%	44.99%		45.10%		43.49%		44.45%

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.


	2023			2022			2022			2022			2022
(Dollars in millions)	Q1			Q4			Q3			Q2			Q1
Pre- Provision Earnings
Total net revenue	$	8,903		$	9,040		$	8,805		$	8,232		$	8,173
Non-interest expense	(4,945)			(5,080)			(4,949)			(4,583)			(4,551)
Pre-provision earnings(9)	$	3,958		$	3,960		$	3,856		$	3,649		$	3,622
Tangible Common Equity (Period-End)
Stockholders’ equity	$	54,653		$	52,582		$	50,861		$	53,410		$	56,345
Goodwill and other intangible assets(10)	(15,098)			(14,902)			(14,932)			(14,850)			(14,883)
Noncumulative perpetual preferred stock	(4,845)			(4,845)			(4,845)			(4,845)			(4,845)
Tangible common equity(11)	$	34,710		$	32,835		$	31,084		$	33,715		$	36,617
Tangible Common Equity (Average)
Stockholders’ equity	$	54,773		$	52,439		$	54,541		$	54,165		$	59,437
Goodwill and other intangible assets(10)	(14,984)			(14,926)			(14,916)			(14,875)			(14,904)
Noncumulative perpetual preferred stock	(4,845)			(4,845)			(4,845)			(4,845)			(4,845)
Tangible common equity(11)	$	34,944		$	32,668		$	34,780		$	34,445		$	39,688
Return on Tangible Common Equity (Average)
Net income available to common stockholders	$	887		$	1,161		$	1,616		$	1,949		$	2,318
Tangible common equity (Average)	34,944			32,668			34,780			34,445			39,688
Return on tangible common equity(11)(12)	10.15		%	14.22		%	18.59		%	22.63		%	23.36		%
Tangible Assets (Period-End)
Total assets	$	471,660		$	455,249		$	444,232		$	440,288		$	434,195
Goodwill and other intangible assets(10)	(15,098)			(14,902)			(14,932)			(14,850)			(14,883)
Tangible assets(11)	$	456,562		$	440,347		$	429,300		$	425,438		$	419,312
Tangible Assets (Average)
Total assets	$	462,324		$	449,659		$	447,088		$	435,327		$	430,372
Goodwill and other intangible assets(10)	(14,984)			(14,926)			(14,916)			(14,875)			(14,904)
Tangible assets(11)	$	447,340		$	434,733		$	432,172		$	420,452		$	415,468
Return on Tangible Assets (Average)
Net income	$	960		$	1,232		$	1,694		$	2,031		$	2,403
Tangible Assets (Average)	447,340			434,733			432,172			420,452			415,468
Return on tangible assets(11)(13)	0.86		%	1.13		%	1.57		%	1.93		%	2.31		%
TCE Ratio
Tangible common equity (Period-end)	$	34,710		$	32,835		$	31,084		$	33,715		$	36,617
Tangible Assets (Period-end)	456,562			440,347			429,300			425,438			419,312
TCE Ratio(11)	7.6		%	7.5		%	7.2		%	7.9		%	8.7		%
Tangible Book Value per Share
Tangible common equity (Period-end)	$	34,710		$	32,835		$	31,084		$	33,715		$	36,617
Outstanding Common Shares	382.0			381.3			382.0			383.8			399.0
Tangible book value per common share(11)	$	90.86		$	86.11		$	81.38		$	87.84		$	91.77

__________

(1)Regulatory capital metrics and capital ratios as of March 31, 2023 are preliminary and therefore subject to change.

(2)Excludes certain components of AOCI as permitted under the Tailoring Rules.

(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.