Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

2b5f235ea20a73a8b280b0e27c7d729baee4ecf22ecd001e61bce77743c35d47

Capital One Financial Corporation (COF) is a diversified financial services holding company that operates through both banking and non-banking subsidiaries. The company provides a wide array of financial products and services to consumers, small businesses, and commercial clients via digital channels, branch locations, cafés, and other distribution channels **[0000927628-24-000264_cof-20240630.htm:3]** **[0000927628-24-000174_cof-20240331.htm:3]** **[0000927628-24-000306_cof-20240930.htm:3]** **[0000927628-24-000094_cof-20231231.htm:179]**. COF's operations are primarily organized into three major business segments: Credit Card, Consumer Banking, and Commercial Banking, each contributing significantly to the company's revenue through various lending and financial services **[0000927628-24-000264_cof-20240630.htm:3]** **[0000927628-24-000174_cof-20240331.htm:3]** **[0000927628-24-000306_cof-20240930.htm:3]** **[0000927628-24-000094_cof-20231231.htm:179]** **[0000927628-24-000094_cof-20231231.htm:262]**.

1. **Credit Card** - Engages in domestic consumer and small business card lending, as well as international card businesses in the United Kingdom and Canada, significantly contributing to the company's revenue.
2. **Consumer Banking** - Involves deposit gathering and lending activities for consumers and small businesses, along with national auto lending.
3. **Commercial Banking** - Provides lending, deposit gathering, capital markets, and treasury management services to commercial real estate and industrial customers.

e0a9e3cee080116017cb18f16d2da1dd8b532dea832c8ddd3860f1618b06e515

Cash and Cash Equivalents [USD, Millions]

PP&E [USD, Millions]

Goodwill [USD, Millions]

Shareholders' Equity [USD, Millions]

Retained Earnings [USD, Millions]

Common Stock [USD, Millions]

Additional Paid-in Capital [USD, Millions]

1532bb801f3dc5ce66550cffeeb78ea9184f6d7503e6227133c17bbbaf338354

1379fa1aca839fb5a96812ba01fe6cb302f7688e1557ebf8a62c844fe7f7c6d2

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

52e6ce55d987266d5e0dab0c35191261f919fdbff07662ea910db1e5894e6f52

| Metric / Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Net Charge-off Rate** | **1.86%**  **[0000927628-23-000014_ex992q42022earningsrelease.htm:3]**  | **2.21%**  **[0000927628-23-000168_cof-20230331.htm:37]** **[0000927628-23-000156_ex992q12023earningsrelease.htm:2]**  | **2.82%**  **[0000927628-23-000231_ex992q22023earningsrelease.htm:3]**  | **2.56%**  **[0000927628-23-000296_cof-20230930.htm:43]** **[0000927628-23-000284_ex992q32023earningsrelease.htm:3]**  | **3.21%**  **[0000927628-24-000008_ex992q42023earningsrelease.htm:3]**  | **3.33%**  **[0000927628-24-000158_ex992q12024earningsrelease.htm:2]**  | **3.36%**  **[0000927628-24-000264_cof-20240630.htm:10]** **[0000927628-24-000264_cof-20240630.htm:46]**  | **3.27%**  **[0000927628-24-000296_ex992q32024earningsrelease.htm:3]**  |
| **30+ Day Delinquency Rate** | **3.21%**  **[0000927628-23-000117_cof-20221231.htm:129]**  | **3.09%**  **[0000927628-23-000168_cof-20230331.htm:35]**  | **3.36%**  **[0000927628-23-000250_cof-20230630.htm:8]** **[0000927628-23-000250_cof-20230630.htm:40]**  | **3.71%**  **[0000927628-23-000296_cof-20230930.htm:41]**  | **3.99%**  **[0000927628-24-000094_cof-20231231.htm:141]**  | **3.67%**  **[0000927628-24-000158_ex992q12024earningsrelease.htm:2]**  | **3.63%**  **[0000927628-24-000264_cof-20240630.htm:44]**  | **3.89%**  **[0000927628-24-000306_cof-20240930.htm:43]**  |
| **Allowance Coverage Ratio** | **4.24%**  **[0000927628-23-000117_cof-20221231.htm:136]** **[0000927628-23-000014_ex992q42022earningsrelease.htm:3]**  | **4.64%**  **[0000927628-23-000156_ex992q12023earningsrelease.htm:2]**  | **4.70%**  **[0000927628-23-000231_ex992q22023earningsrelease.htm:3]**  | **4.75%**  **[0000927628-23-000284_ex992q32023earningsrelease.htm:3]**  | **4.77%**  **[0000927628-24-000094_cof-20231231.htm:147]** **[0000927628-24-000008_ex992q42023earningsrelease.htm:3]**  | **4.88%**  **[0000927628-24-000158_ex992q12024earningsrelease.htm:2]**  | **5.23%**  **[0000927628-24-000253_ex992q22024earningsrelease.htm:3]** **[0000927628-24-000264_cof-20240630.htm:10]**  | **5.16%**  **[0000927628-24-000296_ex992q32024earningsrelease.htm:3]**  |
| **30+ Day Performing Delinquency Rate** | **2.96%**  **[0000927628-23-000014_ex992q42022earningsrelease.htm:3]**  | **2.88%**  **[0000927628-23-000156_ex992q12023earningsrelease.htm:2]**  | **3.08%**  **[0000927628-23-000231_ex992q22023earningsrelease.htm:3]**  | **3.42%**  **[0000927628-23-000284_ex992q32023earningsrelease.htm:3]**  | **3.71%**  **[0000927628-24-000008_ex992q42023earningsrelease.htm:3]**  | **3.40%**  **[0000927628-24-000158_ex992q12024earningsrelease.htm:2]**  | **3.36%**  **[0000927628-24-000253_ex992q22024earningsrelease.htm:3]**  | **3.58%**  **[0000927628-24-000296_ex992q32024earningsrelease.htm:3]**  |
| **90+ Day Delinquent Loans Accruing Interest** | **$2,240**  **[0000927628-23-000117_cof-20221231.htm:192]**  | **$2,465**  **[0000927628-23-000168_cof-20230331.htm:71]** **[0000927628-23-000168_cof-20230331.htm:35]**  | **$2,491**  **[0000927628-23-000250_cof-20230630.htm:81]** **[0000927628-23-000250_cof-20230630.htm:40]**  | **$3,032**  **[0000927628-23-000296_cof-20230930.htm:41]**  | **$3,554**  **[0000927628-24-000094_cof-20231231.htm:141]**  | **$3,502**  **[0000927628-24-000174_cof-20240331.htm:74]**  | **$3,148**  **[0000927628-24-000264_cof-20240630.htm:83]** **[0000927628-24-000264_cof-20240630.htm:44]**  | **$3,456**  **[0000927628-24-000306_cof-20240930.htm:82]** **[0000927628-24-000306_cof-20240930.htm:43]**  |
| **Nonperforming Loans Without an Allowance** | **$548**  **[0000927628-23-000117_cof-20221231.htm:192]**  | **$492**  **[0000927628-23-000168_cof-20230331.htm:71]**  | **$540**  **[0000927628-23-000250_cof-20230630.htm:81]**  | **$534**  **[0000927628-23-000296_cof-20230930.htm:81]**  | **$547**  **[0000927628-24-000094_cof-20231231.htm:204]**  | **$737**  **[0000927628-24-000174_cof-20240331.htm:74]**  | **$765**  **[0000927628-24-000264_cof-20240630.htm:83]**  | **$880**  **[0000927628-24-000306_cof-20240930.htm:82]**  |
| **Auto Loan Originations** | **$6,635**  **[0000927628-23-000014_ex992q42022earningsrelease.htm:16]**  | **$6,211**  **[0000927628-23-000156_ex992q12023earningsrelease.htm:12]** **[0000927628-23-000168_cof-20230331.htm:19]**  | **$7,160**  **[0000927628-23-000231_ex992q22023earningsrelease.htm:14]**  | **$7,452**  **[0000927628-23-000284_ex992q32023earningsrelease.htm:14]** **[0000927628-23-000296_cof-20230930.htm:23]**  | **$6,157**  **[0000927628-24-000008_ex992q42023earningsrelease.htm:15]**  | **$7,522**  **[0000927628-24-000158_ex992q12024earningsrelease.htm:12]** **[0000927628-24-000174_cof-20240331.htm:21]**  | **$8,463**  **[0000927628-24-000253_ex992q22024earningsrelease.htm:14]**  | **$9,158**  **[0000927628-24-000296_ex992q32024earningsrelease.htm:14]** **[0000927628-24-000306_cof-20240930.htm:26]**  |
| **Total Loans Held for Investment** | **$312,331**  **[0000927628-23-000117_cof-20221231.htm:125]**  | **$308,836**  **[0000927628-23-000168_cof-20230331.htm:31]**  | **$311,323**  **[0000927628-23-000250_cof-20230630.htm:36]**  | **$314,780**  **[0000927628-23-000296_cof-20230930.htm:37]**  | **$320,472**  **[0000927628-24-000094_cof-20231231.htm:137]**  | **$315,154**  **[0000927628-24-000174_cof-20240331.htm:34]**  | **$318,186**  **[0000927628-24-000264_cof-20240630.htm:40]**  | **$320,243**  **[0000927628-24-000306_cof-20240930.htm:39]**  |
| **Liquidity Coverage Ratio** | **143%**  **[0000927628-23-000117_cof-20221231.htm:137]** **[COF_3141708_1]**  | **148%**  **[0000927628-23-000168_cof-20230331.htm:41]**  | **150%**  **[0000927628-23-000250_cof-20230630.htm:48]**  | **155%**  **[0000927628-23-000296_cof-20230930.htm:49]**  | **167%**  **[0000927628-24-000094_cof-20231231.htm:148]** **[COF_3370908_1]**  | **164%**  **[0000927628-24-000174_cof-20240331.htm:43]**  | **155%**  **[0000927628-24-000264_cof-20240630.htm:52]**  | **163%**  **[0000927628-24-000306_cof-20240930.htm:51]**  |
| **Net Stable Funding Ratio** | N/A  **[0000927628-23-000117_cof-20221231.htm:137]**  | N/A  **[0000927628-23-000168_cof-20230331.htm:41]**  | **134%**  **[0000927628-23-000250_cof-20230630.htm:48]** **[COF_3255040_1]**  | N/A  **[0000927628-23-000296_cof-20230930.htm:49]**  | **135%**  **[0000927628-24-000094_cof-20231231.htm:148]**  | N/A  **[0000927628-24-000174_cof-20240331.htm:44]**  | **135%**  **[0000927628-24-000264_cof-20240630.htm:52]**  | N/A  **[0000927628-24-000306_cof-20240930.htm:51]**  |
| **Interest Rate Reduction** | N/A  **[0000927628-23-000014_ex992q42022earningsrelease.htm:9]**  | N/A  **[0000927628-23-000168_cof-20230331.htm:38]**  | N/A  **[COF_3255040_2]** **[0000927628-23-000231_ex991q22023earningsrelease.htm:0]**  | **$23**  **[0000927628-23-000296_cof-20230930.htm:89]**  | **$687**  **[0000927628-24-000094_cof-20231231.htm:209]**  | **$270**  **[0000927628-24-000174_cof-20240331.htm:79]**  | N/A  **[0000927628-24-000264_cof-20240630.htm:14]** **[0000927628-24-000253_ex992q22024earningsrelease.htm:7]**  | N/A  **[0000927628-24-000306_cof-20240930.htm:90]**  |
| **Term Extension** | N/A  **[0000927628-23-000117_cof-20221231.htm:196]**  | **$240**  **[0000927628-23-000168_cof-20230331.htm:77]**  | **$361**  **[0000927628-23-000250_cof-20230630.htm:87]**  | **$291**  **[0000927628-23-000296_cof-20230930.htm:87]**  | **$970**  **[0000927628-24-000094_cof-20231231.htm:209]**  | **$459**  **[0000927628-24-000174_cof-20240331.htm:79]**  | **$61**  **[0000927628-24-000264_cof-20240630.htm:93]**  | **$731**  **[0000927628-24-000306_cof-20240930.htm:88]**  |
| **Principal Balance Reduction** | N/A    | **$7**  **[0000927628-23-000168_cof-20230331.htm:77]**  | **$20**  **[0000927628-23-000250_cof-20230630.htm:88]**  | **$8**  **[0000927628-23-000296_cof-20230930.htm:87]**  | **$21**  **[0000927628-24-000094_cof-20231231.htm:209]**  | **$9**  **[0000927628-24-000174_cof-20240331.htm:79]**  | **$23**  **[0000927628-24-000264_cof-20240630.htm:89]**  | **$0**  **[0000927628-24-000306_cof-20240930.htm:90]**  |
| **Weighted-average Interest Rate Reduction** | N/A  **[0000927628-23-000014_ex992q42022earningsrelease.htm:9]** **[0000927628-23-000014_ex991q42022earningsrelease.htm:0]**  | **20.37%**  **[0000927628-23-000168_cof-20230331.htm:77]**  | **19.06%**  **[0000927628-23-000250_cof-20230630.htm:88]**  | **19.40%**  **[0000927628-23-000296_cof-20230930.htm:88]**  | **13.85%**  **[0001193125-24-064255_d796210d425.htm:42]**  | **19.99%**  **[0000927628-24-000174_cof-20240331.htm:80]**  | **20.13%**  **[0000927628-24-000264_cof-20240630.htm:91]**  | **20.49%**  **[0000927628-24-000306_cof-20240930.htm:90]**  |
| **Delinquency Status of FDMs** | **$576 / $2,685**  **[0000927628-23-000117_cof-20221231.htm:132]**  | **$260 / $787**  **[0000927628-23-000168_cof-20230331.htm:78]**  | **$396 / $1,534**  **[0000927628-23-000250_cof-20230630.htm:88]**  | **$533 / $2,053**  **[0000927628-23-000296_cof-20230930.htm:88]**  | **$623 / $2,860**  **[0000927628-24-000094_cof-20231231.htm:210]**  | **$539 / $3,032**  **[0000927628-24-000174_cof-20240331.htm:80]**  | **$560 / $3,116**  **[0000927628-24-000264_cof-20240630.htm:92]**  | **$635 / $3,110**  **[0000927628-24-000306_cof-20240930.htm:91]**  |

93982db97bf02c731a2a18e8b21e06d2f69eb233cfe1f1286d39b63ef093f644

| Segment/Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-----------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Credit Card (USD Million)** | **5,982**  **[0000927628-23-000014_ex992q42022earningsrelease.htm:13]**  | **6,020**  **[0000927628-23-000168_cof-20230331.htm:16]**  | **6,226**  **[0000927628-23-000250_cof-20230630.htm:19]**  | **6,627**  **[0000927628-23-000296_cof-20230930.htm:19]**  | **6,796**  **[0000927628-24-000008_ex992q42023earningsrelease.htm:12]**  | **6,748**  **[0000927628-24-000174_cof-20240331.htm:18]**  | **6,800**  **[0000927628-24-000264_cof-20240630.htm:22]**  | **7,252**  **[0000927628-24-000306_cof-20240930.htm:21]**  |
| **Consumer Banking (USD Million)** | **2,533**  **[0000927628-23-000014_ex992q42022earningsrelease.htm:13]**  | **2,495**  **[0000927628-23-000168_cof-20230331.htm:16]**  | **2,418**  **[0000927628-23-000250_cof-20230630.htm:19]**  | **2,275**  **[0000927628-23-000296_cof-20230930.htm:19]**  | **2,114**  **[0000927628-24-000008_ex992q42023earningsrelease.htm:12]**  | **2,170**  **[0000927628-24-000174_cof-20240331.htm:18]**  | **2,197**  **[0000927628-24-000264_cof-20240630.htm:22]**  | **2,210**  **[0000927628-24-000306_cof-20240930.htm:21]**  |
| **Commercial Banking (USD Million)** | **781**  **[0000927628-23-000014_ex992q42022earningsrelease.htm:13]**  | **860**  **[0000927628-23-000168_cof-20230331.htm:16]**  | **889**  **[0000927628-23-000250_cof-20230630.htm:19]**  | **909**  **[0000927628-23-000296_cof-20230930.htm:19]**  | **862**  **[0000927628-24-000008_ex992q42023earningsrelease.htm:12]**  | **880**  **[0000927628-24-000174_cof-20240331.htm:18]**  | **880**  **[0000927628-24-000264_cof-20240630.htm:22]**  | **888**  **[0000927628-24-000306_cof-20240930.htm:21]**  |
| **Other (USD Million)** | **(256)**  **[0000927628-23-000014_ex992q42022earningsrelease.htm:13]**  | **(472)**  **[0000927628-23-000168_cof-20230331.htm:16]**  | **(521)**  **[0000927628-23-000250_cof-20230630.htm:19]**  | **(445)**  **[0000927628-23-000296_cof-20230930.htm:19]**  | **(266)**  **[0000927628-24-000008_ex992q42023earningsrelease.htm:12]**  | **(396)**  **[0000927628-24-000174_cof-20240331.htm:18]**  | **(371)**  **[0000927628-24-000264_cof-20240630.htm:22]**  | **(336)**  **[0000927628-24-000306_cof-20240930.htm:21]**  |
| **Total Revenue (USD Million)** | **9,040**  **[0000927628-23-000014_ex992q42022earningsrelease.htm:13]**  | **8,903**  **[0000927628-23-000168_cof-20230331.htm:16]**  | **9,012**  **[0000927628-23-000250_cof-20230630.htm:19]**  | **9,366**  **[0000927628-23-000296_cof-20230930.htm:19]**  | **9,506**  **[0000927628-24-000008_ex992q42023earningsrelease.htm:12]**  | **9,402**  **[0000927628-24-000174_cof-20240331.htm:18]**  | **9,506**  **[0000927628-24-000264_cof-20240630.htm:22]**  | **10,014**  **[0000927628-24-000306_cof-20240930.htm:21]**  |

a4212a6d3c893bcf8b564757264fd23655fa946db4b738fc107c07c83568a044

- **Capital One's credit performance is stabilizing**, with **card delinquencies improving on a seasonally adjusted basis** in Q4 2024 and ending the year **slightly lower on a year-over-year basis**. This indicates effective credit risk management and a strong consumer base.  **[COF_3412935_5]**
- **The Auto business has returned to growth**, with **auto delinquencies consistently below pre-pandemic levels** and **lower year-over-year for the past two quarters**. Capital One is **bullish about the Auto segment**, citing positive trends in margins, credit performance, and competition, bolstered by significant investments in technology and underwriting.  **[COF_3412935_8]**
- **Capital One continues to enhance operating efficiency**, achieving a **700 basis point improvement** since 2013 through its technology transformation. The company expects further efficiency gains, which are an important way it creates value for investors, even as it invests in new areas like the Discover acquisition.  **[COF_3412935_6]** **[COF_3412935_10]**

7b331da9e409c2836e5512cf0c91dcc3c65d66d36f3da569a7f6a43628a3e6bf

- **Capital One is experiencing increased credit risk as a higher proportion of customers are making only minimum payments**, which is running somewhat above pre-pandemic levels. This is consistent with **delinquencies running above pre-pandemic levels** and could signal increased credit risk. Additionally, **higher interest rates remain a source of pressure** for consumers with higher debt servicing burdens.  **[COF_3412935_5]**
- **The pending Discover acquisition may constrain Capital One's capital returns** due to regulatory limitations until the merger is approved and completed. This could impact the company's ability to conduct share repurchases and affect shareholders' return expectations.  **[COF_3412935_19]** ,  **[COF_3412935_13]**
- **Capital One may face Net Interest Margin pressure** due to lower asset yields and potential increases in deposit costs as deposit competition ramps up. The company is modestly asset-sensitive, and if rates continue to decrease or deposit betas are lower or slower to decrease, it could negatively impact NIM.  **[COF_3412935_12]**

e25630e89d34afb8862b2e3dd49669203f40a49a857deb5758b59456213ff7d1

1. **Credit Outlook and Consumer Health**  
   **Q:** How do you view the consumer and credit trends?  
   **A:** The U.S. consumer remains strong, with a solid labor market and growing incomes.  **[COF_3412935_5]**  While we see some pockets of pressure from inflation and higher interest rates, overall delinquencies have stabilized and **improved slightly**.  **[COF_3412935_5]**  We believe **delayed charge-offs** are still working through the system, but over time, credit losses should return to pre-pandemic levels.  **[COF_3412935_5]** 

2. **Impact of Interest Rates on Credit Losses**  
   **Q:** Will higher rates keep charge-offs elevated?  
   **A:** If interest rates stabilize and wages keep up with inflation, we believe charge-off rates could return to historic levels even in a higher rate environment.  **[COF_3412935_9]**  Higher rates increase debt servicing burdens, especially for variable-rate products like credit cards, but over time, consumers adjust.  **[COF_3412935_9]** 

3. **Pending Discover Acquisition**  
   **Q:** Is the Discover deal on track?  
   **A:** The approval process is moving forward, and we've made substantial progress.  **[COF_3412935_19]**  We've received necessary approvals and remain engaged with regulators, expecting to close the deal **early this year**.  **[COF_3412935_19]**  We're excited about the strategic and financial benefits the deal will bring.  **[COF_3412935_11]** 

4. **Operating Efficiency Post-Deal**  
   **Q:** How will the Discover deal affect efficiency?  
   **A:** We expect to continue improving our operating efficiency ratio over time.  **[COF_3412935_6]**  While there are investment areas needing focus, such as compliance and network development, we believe the synergies from the deal will support ongoing efficiency improvements.  **[COF_3412935_20]**  Discover operates with a significantly lower efficiency ratio, which is beneficial.  **[COF_3412935_20]** 

5. **Capital Return Plans**  
   **Q:** Will you increase share buybacks post-deal?  
   **A:** In the near term, we're maintaining a cautious approach due to the pending deal and regulatory requirements.  **[COF_3412935_13]**  After closing and assessing the combined capital needs, we'll have more flexibility to consider increasing capital return.  **[COF_3412935_13]** 

6. **Net Interest Margin Outlook**  
   **Q:** What are expectations for NIM in 2025?  
   **A:** In the first quarter, NIM will decrease by about **15 basis points** due to fewer days.  **[COF_3412935_12]**  Longer term, factors like modest asset sensitivity, deposit betas, and card growth—which is a tailwind—will influence NIM.  **[COF_3412935_12]**  Card becoming a larger part of the balance sheet supports NIM.  **[COF_3412935_12]** 

7. **Auto Business Growth**  
   **Q:** Will you lean into auto loan growth?  
   **A:** Yes, we are bullish on the auto business.  **[COF_3412935_8]**  Credit performance is strong, with delinquencies **below pre-pandemic levels**.  **[COF_3412935_8]**  Margins are now more normal, and competition and other factors make this an opportune time to grow.  **[COF_3412935_8]** 

8. **Mix of Consumer Book**  
   **Q:** How will your customer mix evolve?  
   **A:** We continue to serve across the credit spectrum but are seeing a gradual shift **upmarket**.  **[COF_3412935_21]**  We're heavily investing in higher-spend customers and expect this trend to continue.  **[COF_3412935_21]**  The Discover acquisition will add more prime customers to our portfolio.  **[COF_3412935_21]** 

9. **Reserve Levels and Expectations**  
   **Q:** How will reserve levels change moving forward?  
   **A:** Seasonal factors will cause some upward pressure on coverage.  **[COF_3412935_16]**  Future changes will depend on growth and loss forecasts.  **[COF_3412935_16]**  Improved loss forecasts will eventually flow through to lower reserves as uncertainties diminish.  **[COF_3412935_16]** 

10. **Recent Vintage Credit Performance**  
    **Q:** How are recent credit card vintages performing?  
    **A:** Our recent originations show **stable performance**, with vintages in line with pre-pandemic levels.  **[COF_3412935_18]**  We adjusted for inflated credit scores, which has helped maintain credit quality.  **[COF_3412935_18]**  Industry data shows higher delinquencies, but our proactive measures have mitigated this.  **[COF_3412935_18]** 

11. **Purchase Volume Growth**  
    **Q:** Is higher purchase volume growth sustainable?  
    **A:** Purchase volume growth is driven by growth in our branded card customer base.  **[COF_3412935_17]**  **Spend per customer** picked up in mid-2024 and grew further in Q4.  **[COF_3412935_17]**  This positive trajectory indicates consumer confidence.  **[COF_3412935_17]** 

12. **Non-Prime Business Stability**  
    **Q:** What is the outlook for non-prime segments?  
    **A:** The word is **stability**.  **[COF_3412935_15]**  Credit performance has been stable, and originations are consistent.  **[COF_3412935_15]**  We continue to lean into both card and auto in the non-prime segments due to this stability.  **[COF_3412935_15]** 

13. **Debit Strategy Post-Discover Deal**  
    **Q:** Will you offer debit rewards with Discover?  
    **A:** While we haven't completed the deal, we're pleased with our current debit strategy.  **[COF_3412935_14]**  Owning the Discover network enhances our ability to invest in our national banking business.  **[COF_3412935_14]**  We plan to continue our approach, leveraging the network's benefits.  **[COF_3412935_14]** 

14. **Efficiency Ratio Guidance**  
    **Q:** Will the 42% efficiency ratio hold in 2025?  
    **A:** While we don't provide short-term guidance, we see long-term opportunities to improve efficiency.  **[COF_3412935_10]**  Factors like continued technology investment and strategic imperatives may influence the ratio year over year.  **[COF_3412935_10]** 

37e717289a56d553467057fc424aca6eefb7d6c61d9e150c971d370b8146a0d2

db76edd742f9137526bbb2a44f4d9741aa0c5ff9328c61b2e59fa0a45761b971

1. Given the significant uncertainties around regulatory changes like the endgame rule, macroeconomic factors, and the pending Discover acquisition, how do you plan to manage your capital levels and share buyback program to balance shareholder returns with prudent capital management?
2. With the anticipated significant impact on revenue from the potential implementation of the late fee rule, what specific strategies are you considering to mitigate this revenue loss, and how might this affect your customer relationships and overall business model?
3. As you continue to invest heavily in the Venture X product to win at the top of the market, can you provide more detail on how you are measuring the return on investment for these initiatives, and what safeguards are in place to ensure long-term profitability given the competitive landscape?
4. In light of the delayed charge-offs from the pandemic period and the potential pockets of consumer pressure you've mentioned, how are you preparing for a potential uptick in credit losses, and what impact do you anticipate on your provisioning and reserve levels moving forward?
5. Given that recent spend growth is largely driven by new accounts while spend per customer has remained flat, how sustainable is this growth strategy, and what are the implications for customer acquisition costs and long-term profitability if consumer caution persists?

4a1bd64839017731b6ea24f85aeb7c513e1e7a608670659c082874573e6f1e4a

**Net Charge-off Rate**

**30+ Day Delinquency Rate**

**Allowance Coverage Ratio**

**30+ Day Performing Delinquency Rate**

**90+ Day Delinquent Loans Accruing Interest**

**Nonperforming Loans Without an Allowance**

**Auto Loan Originations**

**Liquidity Coverage Ratio**

**Net Stable Funding Ratio**

**Interest Rate Reduction**

**Term Extension**

**Principal Balance Reduction**

**Weighted-average Interest Rate Reduction**

**Delinquency Status of FDMs**

11bb05407f304dcf4d47dd534302ea8d6a6b56c30d6d44158ddebceda71e2726

Credit Card

- Net Interest Income

- Non-Interest Income

Consumer Banking

Commercial Banking

Other

Total Revenue

295012404792e7e97561278188c3e7852e4409287ed85ef13442174a0f5e9610

**Annual guidance for 2027:**
- **EPS accretion**: 15%+  **[COF_3412935_11]**  (no prior guidance)  
- **Purchase volume**: $175B  **[COF_3412935_11]**  (no prior guidance)  

No other metrics from Q4 2024 match those from Q3 2024, and thus there are no “raised,” “lowered,” or “no change” comparisons to report. All other items mentioned in Q4 2024 were historical or non-numeric and did not constitute forward guidance.

817aad2e40b898f094120dd850ca045852d07eb2993c9e19b67f9c44170d96a0

- Visa and MasterCard issuers: Competitors in the credit card business  **[0000927628-24-000094_cof-20231231.htm:8]** .
- American Express®: Competitor in the credit card business  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Discover Card®: Competitor in the credit card business  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Private-label card brands: Competitors in the credit card business  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Debit card issuers: Competitors to some extent in the credit card business  **[0000927628-24-000094_cof-20231231.htm:8]** .
- National, state, and direct banks: Competitors in consumer and commercial banking for deposits and loans  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Savings and loan associations: Competitors for loans and deposits  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Credit unions: Competitors for loans and deposits  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Automotive finance companies: Competitors in providing loans  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Commercial banking companies: Competitors in providing loans and deposits  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Non-depository institutions: Competitors offering similar products and services  **[0000927628-24-000094_cof-20231231.htm:8]** .
- Digital and mobile payments companies: Emerging competitors in financial technology  **[0000927628-24-000094_cof-20231231.htm:8]** .

ebb9a327ae2198d511d7224f075e7fc567ad04aa2ea5bce81a365670cb9a7611

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Credit Normalization**: No specific guidance, but factors influencing future credit performance were discussed, such as delayed charge-offs and economic conditions  **[COF_3403699_7]** .
  - **Allowance and Coverage**: Potential modest declines in the coverage ratio if projected losses decrease  **[COF_3403699_7]** .
  - **Net Interest Margin (NIM)**: Influenced by higher card and auto yields, with potential headwinds and tailwinds  **[COF_3403699_5]** .
  - **Consumer Spending**: Largely flat with slight increases driven by new accounts  **[COF_3403699_12]** .
  - **Capital and Liquidity**: CET1 capital ratio at 13.6%, liquidity reserves at $132 billion  **[COF_3403699_1]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Operating Efficiency Ratio**: Expected to be modestly down compared to 2023  **[COF_3393968_4]** .
  - **Marketing Expenses**: Higher in the second half of 2024 compared to the first half  **[COF_3393968_4]** .
  - **Allowance and Reserve Rate**: Coverage ratio might remain flat due to uncertainties  **[COF_3393968_6]** .
  - **Capital Actions**: Subject to Federal Reserve preapproval due to the pending acquisition of Discover  **[COF_3393968_12]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Credit Performance**: Charge-offs expected to settle at about 15% higher than pre-pandemic levels  **[COF_3380812_10]** **[COF_3380812_6]** .
  - **Allowance and Coverage Ratio**: Coverage ratio increased to 4.88%  **[COF_3380812_1]** .
  - **Marketing Expenses**: Continued investment in marketing, no specific full-year guidance  **[COF_3370908_14]** .
  - **Capital Return and CET1 Ratio**: CET1 ratio expected to be just shy of 14%  **[COF_3380812_12]** .
  - **Liquidity and NIM**: Liquidity reserves at $127 billion, NIM at 6.69%  **[COF_3380812_1]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Operating Efficiency Ratio**: Expected to be flat to modestly down compared to 2023  **[COF_3370908_5]** .
  - **Charge-Offs and Delinquencies**: Stabilizing at about 15% above 2019 levels  **[COF_3370908_3]** .
  - **Marketing Expense**: Continued efforts, particularly in Domestic Card business  **[COF_3370908_14]** .
  - **Allowance and Coverage Ratio**: Expected to remain flat or modestly decline  **[COF_3370908_7]** .
  - **Net Interest Margin (NIM)**: Affected by growth in card balances and deposit betas  **[COF_3370908_7]** .
  - **Auto Business**: Cautious outlook with easing headwinds  **[COF_3370908_10]** .
  - **Capital Return**: Operating around a 13% CET1 capital ratio  **[COF_3370908_16]** .
  - **Impact of CFPB Late Fee Rule**: Expected reduction in late fees by approximately 75%  **[COF_3370908_9]** .

efa557a0a51f153736aa67a0f48774e27723be4d4900273520f73a4a6e4a57fc

52e0f5d8efc283bc8a648fef4a5d671ef6b77796944a5e7e90ff31a51ecfa3d4

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | April 2022  **[0000927628-24-000306_cof-20240930.htm:143]**      |
| End Date/Duration        | N/A                |
| Total additional amount  | $5.0 billion  **[0000927628-24-000306_cof-20240930.htm:143]**    |
| Remaining authorization  | $4.184 billion  **[0000927628-24-000306_cof-20240930.htm:143]**  |
| Details                  | Manage capital position effectively; no set expiration date; may be suspended at any time.  **[0000927628-23-000168_cof-20230331.htm:29]** **[0000927628-24-000174_cof-20240331.htm:32]** **[0000927628-23-000250_cof-20230630.htm:34]** **[0000927628-23-000296_cof-20230930.htm:35]** **[0000927628-24-000264_cof-20240630.htm:38]** **[0000927628-24-000094_cof-20231231.htm:127]**  |

1ecfffa1eaa18eb3be8967a1667d5864e04f0051f77838e038ba6f52215439a0

1a0f0540a3c7f9c7e232bb2e4f7053ba429bec0e1d4f2601aac9258d2197fd37

Capital One’s Q4 shows stable credit trends: card delinquencies slightly lower YoY, auto delinquencies below pre-pandemic for 2 quarters, and a 700 bps efficiency ratio improvement since 2013. Management sees margin headwinds but remains bullish on auto.

597bb4079acab97336238c267e9af9350171b3637ae54e3c33dbce71a02a2298

1. **Charge-Offs Outlook**  
   **Q:** Will charge-offs rise in the second half of the year?  
   **A:** Management expects charge-offs to stabilize at about **15% above 2019 levels** ( **[COF_3370908_11]** ). They note that delinquencies have leveled off, tracking consistently with normal seasonality, and charge-offs are now catching up to this stabilized trend. By focusing on stable benchmarks like 2018 and 2019, they conclude that the charge-off rates are settling without expected increases in the latter half of the year.

2. **Impact of CFPB's Late Fee Proposal**  
   **Q:** How will you offset the impact of reduced late fees?  
   **A:** The CFPB's proposed rule could reduce late fees by **approximately 75%** ( **[COF_3370908_9]** ). While the final rule and its timing are uncertain, Capital One is developing mitigating actions—including changes to policies, products, and investment choices—to gradually resolve the financial impact within a couple of years after the rule takes effect.

3. **Marketing Strategy and Growth**  
   **Q:** Are you increasing marketing spend to drive growth?  
   **A:** The company continues to **lean in** on marketing to capitalize on strong growth opportunities across the business ( **[COF_3370908_8]** ). Investments in technology enhance data leverage and machine learning models, allowing for better identification of attractive opportunities and customized solutions, particularly focusing on heavy spenders and building their national bank.

4. **Credit Environment and Growth Plans**  
   **Q:** Does the current economic environment affect your growth plans?  
   **A:** Management feels confident in the health of the consumer and is **continuing to lean in** on growth ( **[COF_3370908_16]** ). They cite a resilient labor market, low consumer debt servicing burdens, real wage growth, and stable competitive conditions as supportive factors for their positive outlook on growth.

5. **Auto Loan Business Outlook**  
   **Q:** Will you increase auto loan originations?  
   **A:** After a period of caution, Capital One sees some headwinds easing and feels **more bullish** about the auto business ( **[COF_3370908_10]** ). Improved margins and strong performance of recent originations suggest potential for growth, though they will remain disciplined and adjust strategies as opportunities arise.

6. **Commercial Real Estate Exposure**  
   **Q:** What's the outlook on commercial real estate, especially office loans?  
   **A:** The company experienced over **$80 million** in office loan losses this quarter, with balances reduced to **$2.3 billion**, representing less than **1%** of total loans ( **[COF_3370908_14]** ). They have ceased originating new office loans and maintain a coverage ratio of around **13%** for the remaining portfolio.

7. **Opportunities in Lower Credit Spectrum**  
   **Q:** Are you expanding into lower-end credit segments?  
   **A:** Capital One feels good about opportunities across the credit spectrum, including the lower end, and plans to **lean in** where appropriate ( **[COF_3370908_12]** ). Their long-standing experience and disciplined approach in serving subprime customers support their confidence in this segment.

8. **Heavy Spender Strategy**  
   **Q:** How is the investment in heavy spenders progressing?  
   **A:** The quest to win at the top of the market is an ongoing effort, and they are seeing **increasing traction** with heavy spenders ( **[COF_3370908_15]** ). Continued investments aim to build scale, enhancing offerings like digital experiences, customer servicing, and exclusive services.

9. **Reserve Rates and NIM Outlook**  
   **Q:** How should we think about reserve rates and NIM going forward?  
   **A:** Reserve rates are expected to remain stable or only modestly decline as projected losses inform coverage ( **[COF_3370908_7]** ). For NIM, factors such as growth in card balances, deposit betas, and interest rate movements create a mix of tailwinds and headwinds, making near-term prediction challenging. Over the longer term, nothing structurally suggests NIM will be materially different from pre-pandemic levels.

10. **Higher Net Charge-Off Rate**  
    **Q:** Is the higher charge-off rate a new normal?  
    **A:** Management believes underlying credit dynamics are similar to pre-pandemic levels, and the higher net charge-offs are due to temporary effects like lower recoveries and delayed charge-offs from the pandemic period ( **[COF_3370908_17]** ). They anticipate that as these effects diminish, charge-off rates will normalize closer to historical levels.

a2bf36698abd4d7f69615bb102ebafc5a15f38f916adc463840e675532a3f84b

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1994  **[0000927628-24-000094_cof-20231231.htm:173]**    | Present  | Current auditor   |

219ace130e296abb31823060995e8f49c0aa14afb54b5cfb5142acae4a75d54a

Purchase volume for total credit card (USD millions)

Auto loan originations (USD millions)

30+ day delinquency rate for total credit card (percentage)

Net charge-off rate for total credit card (percentage)

30+ day delinquency rate for Consumer Banking (percentage)

Nonperforming loan rate for Commercial Banking (percentage)

Allowance coverage ratio for total credit card (percentage)

2f69d21d397448f7f18a88bb28d4b16f3848860049e238c55441e9e5d3eedbe1

44f0396d66da5937ce2167a6b535042583a4d4af83eef7b5f1ee106d7319da71

| Year   | Amount Due (in billions) | Debt Type                  | Interest Rate (%)       | % of Total Debt                                                                 |
|------------|------------------------------|---------------------------------|-----------------------------|------------------------------------------------------------------------------------|
| 2024-2028  | 15.881 **[0000927628-24-000306_cof-20240930.htm:104]**               | Securitized Debt Obligations   | 0.77 - 6.11 **[0000927628-24-000306_cof-20240930.htm:104]**         | 32.2% = (15.881 / 49.336) * 100 **[0000927628-24-000306_cof-20240930.htm:104]**                                           |
| 2024-2035  | 29.102 **[0000927628-24-000306_cof-20240930.htm:104]**               | Fixed Unsecured Senior Debt    | 1.65 - 7.62 **[0000927628-24-000306_cof-20240930.htm:104]**         | 59.0% = (29.102 / 49.336) * 100 **[0000927628-24-000306_cof-20240930.htm:104]**                                           |
| 2025-2032  | 3.809 **[0000927628-24-000306_cof-20240930.htm:104]**                | Fixed Unsecured Subordinated Debt | 2.36 - 4.20 **[0000927628-24-000306_cof-20240930.htm:104]**      | 7.7% = (3.809 / 49.336) * 100 **[0000927628-24-000306_cof-20240930.htm:104]**                                             |
| 2024-2031  | 0.024 **[0000927628-24-000306_cof-20240930.htm:104]**                | Other Long-Term Borrowings     | 1.20 - 9.91 **[0000927628-24-000306_cof-20240930.htm:104]**         | 0.05% = (0.024 / 49.336) * 100 **[0000927628-24-000306_cof-20240930.htm:104]**                                            |
| 2024       | 0.520 **[0000927628-24-000306_cof-20240930.htm:104]**                | Short-Term Borrowings          | Not Provided **[0000927628-24-000306_cof-20240930.htm:104]**        | 1.1% = (0.520 / 49.336) * 100 **[0000927628-24-000306_cof-20240930.htm:104]**                                             |

66e76704834ec8838bed0612c9724026cd84dce0f0ab78d8e2a6e65e4701ad11

- **Auto loan originations grew 18% year-over-year in Q2**, with margins improving, indicating enhanced opportunities in the auto business.  **[COF_3393968_13]**
- Targeting higher-end customers is successful, leading to higher spend rates, and **the highest growth rates in purchase volume are at the top of the market**.  **[COF_3393968_9]**
- **Credit performance is stabilizing**, with payment rates higher than pre-pandemic levels and consumer credit trends showing stability.  **[COF_3393968_7]** **[COF_3393968_12]** **[COF_3393968_10]**

b01074eae6c72be5069e4f09775ec140f31b4abf5e4249ed0cec0f0fa8572a8a

1. **Credit Outlook**  
   **Q:** Will charge-offs peak in H2 given delinquency trends?  
   **A:** Management sees credit settling out nicely in the card business but won't specify if charge-offs will peak in H2. They noted that seasonal patterns are normalizing, and they feel **very good** about the credit performance in recent months.  **[COF_3393968_10]** 

2. **Reserve Rate Outlook**  
   **Q:** How should we think about the reserve rate going forward?  
   **A:** The reserve rate modestly increased due to added qualitative factors for uncertainties, even though trends are favorable. Management won't predict future changes but notes that eventual stabilizing losses will influence the allowance.  **[COF_3393968_6]** 

3. **Consumer Spending Trends**  
   **Q:** Are you seeing changes in consumer spending or payment behavior?  
   **A:** Consumer behavior is stable; spending per customer is **flat**, and payment rates remain **above pre-pandemic levels**. There is a slight increase in customers making minimum payments, but overall, consumers are in **reasonably good shape** relative to historical benchmarks.  **[COF_3393968_8]** 

4. **Marketing Spend Increase**  
   **Q:** What's driving the increase in marketing spend?  
   **A:** The increase is due to success in building a franchise at the top of the market, requiring investment in customer acquisition and brand building. Competitive intensity is increasing, especially at the high end, and they are leaning into growth opportunities.  **[COF_3393968_9]** 

5. **Net Interest Margin Outlook**  
   **Q:** How will deposit betas trend during Fed rate cuts?  
   **A:** While hard to predict precisely, management indicates that deposit betas may not decline symmetrically with rate cuts. Market dynamics and competitive actions will influence future betas, with past cumulative beta at **62%**.  **[COF_3393968_7]** 

6. **Capital Return and Share Buybacks**  
   **Q:** How should we think about incremental buybacks?  
   **A:** Capital return is subject to Fed preapproval due to the pending Discover acquisition. Buybacks will be dictated by the approval process, and they are not operating under the SCB currently.  **[COF_3393968_10]** 

7. **Auto Loan Growth**  
   **Q:** How are you seeing loan growth in auto lending?  
   **A:** Auto originations grew **18%** year-over-year in Q2. Management is optimistic about auto, seeing enhanced opportunities with improved margins and stable loss performance. They are mindful of used car values but feel **positive** about the business.  **[COF_3393968_11]** 

8. **Shift to Higher-Income Customers**  
   **Q:** How does targeting higher-income customers change your portfolio?  
   **A:** The portfolio is gradually shifting toward higher-income customers who have higher payment rates and spending levels. This leads to higher payment rates overall, but outstandings growth is still driven by the mass market segment.  **[COF_3393968_7]** 

9. **Partner/Private Label Business**  
   **Q:** Thoughts on partner card business after Walmart experience?  
   **A:** Capital One continues to believe in the partnership business but emphasizes being selective. They focus on healthy franchises where the card partnership is central to building the brand, and they are willing to walk away if terms aren't favorable.  **[COF_3393968_15]** 

08a2bda162ad1b821b87fa9d46580d5ee4e39fb5f8ebaedbf25ab0eeab8e7a5a

- **Capital One's Venture X card** has seen strong market response and customer engagement, leading to faster growth rates in higher spend segments.  **[COF_3403699_13]**
- The **auto business** has demonstrated strong credit performance with increasing interest margins, offering opportunities to grow in a disciplined way.  **[COF_3403699_8]**
- Capital One has a strong **CET1 capital ratio of 13.6%**, and once regulatory approvals are obtained, the company may return excess capital through share repurchases.  **[COF_3403699_14]**

f7fc04145e0a5586754be4ecf45412d8768dded5b13dae91593cae47d9915575

1. **Discover Acquisition and Regulatory Approval**  
   **Q:** Any update on the Discover acquisition and antitrust concerns?  
   **A:** We have filed our merger applications with the Fed and OCC and are engaged with the DOJ.  **[COF_3380812_8]**  We believe the merger will increase competition among banks, credit card issuers, and payment networks, benefiting consumers and merchants.  **[COF_3380812_8]**  While some have raised concerns about competition, we feel the facts support approval.  **[COF_3380812_8]**  The deal is still expected to close in late 2024 or early 2025, and we continue to have the same views about the timing.  **[COF_3380812_11]**  The extension of the comment period by the Fed is standard practice and doesn't signal any issues.  **[COF_3380812_11]** 

2. **Credit Performance and Outlook**  
   **Q:** How is the consumer credit outlook affecting charge-offs?  
   **A:** The U.S. consumer remains strong, with resilient labor markets and higher bank balances than before the pandemic.  **[COF_3380812_6]**  We see credit performance settling out and believe charge-offs may be about **15% above 2019 levels** in the near term.  **[COF_3380812_6]**  However, tax refunds are lower and later than historical patterns, which may affect near-term credit performance.  **[COF_3380812_6]** **[COF_3380812_10]**  We haven't provided full-year guidance but continue to feel good about credit across the spectrum.  **[COF_3380812_10]** **[COF_3380812_13]** 

3. **Impact of CFPB's Late Fee Rule**  
   **Q:** How will the CFPB's late fee rule affect financials?  
   **A:** The CFPB's rule on late fees is scheduled to take effect on **May 14**.  **[COF_3380812_14]**  We are prepared to implement the rule if necessary, but ongoing litigation creates uncertainty.  **[COF_3380812_14]**  When implemented, it will have a significant impact on our P&L.  **[COF_3380812_14]**  We expect this impact to gradually resolve within a couple of years through mitigating actions, including changes to policies, products, and investment choices.  **[COF_3380812_14]** 

4. **Capital Return and Buybacks**  
   **Q:** Will you continue share buybacks amid the Discover deal?  
   **A:** The agreement with Discover does not prohibit us from buying shares.  **[COF_3380812_12]**  We were blacked out for a period leading up to the deal, and SEC rules limit repurchases immediately after the announcement.  **[COF_3380812_12]**  In Q1, our buyback pace was less than recent quarters due to these limitations.  **[COF_3380812_12]**  Outside of blackouts, we're able to continue repurchasing shares.  **[COF_3380812_12]**  We're submitting a new capital plan; once approved, we'll have unlimited capacity relative to our SCB.  **[COF_3380812_16]** 

5. **Card Business Growth and Strategy**  
   **Q:** Are you leaning into growth in the card business?  
   **A:** Yes, we're leaning in across the board in the card business.  **[COF_3380812_9]**  We're seeing strong account originations and purchase volumes.  **[COF_3380812_9]**  Continued investments to win at the top of the market and our technology transformation are powering success.  **[COF_3380812_9]**  We're not altering our origination strategy due to the Discover deal.  **[COF_3380812_18]** 

6. **Auto Lending Outlook**  
   **Q:** What's your strategy in auto lending given market conditions?  
   **A:** We feel very good about the auto business.  **[COF_3380812_15]** **[COF_3380812_17]**  Q1 origination volumes were up **20%** year-over-year and quarter-over-quarter.  **[COF_3380812_15]**  While affordability remains a concern due to high interest rates and car prices, we've tightened credit since 2022, and recent originations are performing better than pre-pandemic.  **[COF_3380812_15]**  As margins have recovered somewhat, we're seeing an opportunity to lean back in.  **[COF_3380812_15]** 

7. **Allowance for Loan Losses**  
   **Q:** What drives your outlook for loan loss allowances?  
   **A:** A host of factors, including projected loss rates and growth, drive the allowance.  **[COF_3380812_7]**  Delinquencies are the best leading indicator.  **[COF_3380812_7]**  Even if projected losses decline, the coverage ratio may remain flat due to uncertainties.  **[COF_3380812_7]**  Seasonal balances affect the coverage ratio, which is largely in line with preceding quarters.  **[COF_3380812_7]** 

8. **Subprime Consumer Performance**  
   **Q:** How are subprime consumers affecting credit expectations?  
   **A:** Subprime performance has been strong and settled out earlier than the rest of our portfolio.  **[COF_3380812_13]**  Based on current performance, we feel good across the credit spectrum and continue to lean into growth opportunities.  **[COF_3380812_13]**  While we watch inflation closely, we're not seeing signs that change our outlook.  **[COF_3380812_13]** 

9. **Small Business Card Strategy**  
   **Q:** Can you discuss your new Venture X business card?  
   **A:** We launched the Venture X business card broadly in Q3 last year and are pleased with the market response.  **[COF_3380812_19]**  It offers business owners no preset spending limit, great travel benefits, and elevated earn rates.  **[COF_3380812_19]**  This launch builds on our investments to win at the top of the market in small business.  **[COF_3380812_19]** 

10. **Regulatory Preparedness (Category 2)**  
    **Q:** Are you prepared for potential Category 2 regulatory requirements?  
    **A:** We'll be below the **$700 billion** threshold at closing, and the trigger is based on a four-quarter average.  **[COF_3380812_17]**  The key differences between Category 2 and 3 involve liquidity requirements and capital calculations.  **[COF_3380812_17]**  We feel well-prepared for all implications of either Category 2 or the proposed Basel III endgame rules.  **[COF_3380812_17]** 

4a72646a26ffd0b73101b3948f9df140efd755f03c066a15691534e225979704

- **Capital One increased its reserve coverage ratio due to uncertainties, reflecting potential concerns about future credit losses.**  **[COF_3393968_6]**
- **Competitive intensity is increasing at the top of the market, requiring higher marketing expenses to attract and retain high-spending customers, which could pressure margins.**  **[COF_3393968_11]**
- **Regulatory approval for the Discover acquisition imposes constraints on capital actions, including share buybacks, until the merger process concludes, potentially limiting shareholder returns.**  **[COF_3393968_12]**

359a2c4d9e2721ce18d5d44c96112e6abf0bef16c5cdd4289f680c67e7883d3f

- **Potential Regulatory Risk Impacting Revenue:** If the new **late fee rule is implemented**, it will have a **significant impact on Capital One's revenue**. The company is awaiting the outcome of industry litigation and acknowledges the rule could affect competition, pricing, customer behavior, volumes, and credit.  **[COF_3403699_16]**
- **Elevated Credit Losses Above Pre-Pandemic Levels:** Capital One's card credit losses have **settled out above pre-pandemic levels** due to factors like lower recoveries, cumulative effects of **inflation and higher interest rates** causing affordability pressures for consumers.  **[COF_3403699_5]**  The **delayed charge-off effect** is also still playing through.  **[COF_3403699_5]**
- **Regulatory Uncertainty Affecting Capital Management:** The pending **acquisition of Discover** requires Federal Reserve pre-approval of capital actions until the merger process concludes, limiting Capital One's flexibility in capital management, including **share repurchases**. Additionally, uncertainty around regulatory requirements like the **"endgame rule"** adds to challenges in capital planning.  **[COF_3403699_14]** **[COF_3403699_1]**

8377a51982d93c3682b5cc73c2c9da149e569e5e61b05ca62c5a5be7f07515b9

1. **Discover Merger Approval**  
   **Q:** Confident in Discover merger getting regulatory approval?  
   **A:** Yes, we believe the acquisition is pro-competitive, particularly in acquiring a network we don't have. We're making a strong case to regulators focusing on increased competition in a concentrated industry.  **[COF_3403699_11]** 

2. **Credit Trends & Losses**  
   **Q:** What are you seeing in consumer credit trends?  
   **A:** Consumer credit has stabilized, with delinquencies and charge-offs consistent with normal seasonality. Our credit results are strong and stable, settling above pre-pandemic levels due to lower recoveries, inflation effects, and delayed charge-offs from the pandemic.  **[COF_3403699_4]** 

3. **Capital Management & Buybacks**  
   **Q:** How is the Discover deal affecting capital and buybacks?  
   **A:** Uncertainties around regulatory rules and the pending Discover acquisition lead us to maintain current capital levels. We've been repurchasing **$150 million** per quarter but await CCAR results post-closing to assess capital needs and potential for increased buybacks.  **[COF_3403699_14]** 

4. **Net Interest Margin Outlook**  
   **Q:** Expectations for net interest margin from here?  
   **A:** Near-term modest headwinds from asset sensitivity as the Fed eases, but potential tailwinds from card growth. Longer-term factors like deposit betas and credit paths will influence NIM, but we've seen stability and a step up in the third quarter.  **[COF_3403699_4]** 

5. **Credit Normalization Path**  
   **Q:** What's the path to credit normalization and reserves?  
   **A:** Credit has settled, but delayed charge-offs and recovery inventory rebuilding will influence future losses. Moderating inflation is positive, but high interest rates may pressure some consumers. Reserve coverage may decrease as uncertainties resolve and loss forecasts materialize.  **[COF_3403699_6]** 

6. **CFPB Late Fee Rule Impact**  
   **Q:** How are you preparing for the late fee rule?  
   **A:** We're awaiting litigation outcomes. If implemented, the rule will significantly impact revenue, but also affect competition, pricing, and customer behavior. We've deferred some investments in anticipation but remain focused on preserving our customer franchise.  **[COF_3403699_16]** 

7. **Reserve Release & Credit Conditions**  
   **Q:** Does reserve release signal credit conditions improving?  
   **A:** The reserve release reflects stability in underlying credit trends and our confidence in those trends. We assess forecasts and economic factors, and improvements may suggest peak reserve rates are behind us.  **[COF_3403699_10]** 

8. **NIM and Revenue Suppression**  
   **Q:** Will revenue suppression be a NIM tailwind?  
   **A:** Yes, over time, as credit improves and loss rates decline, revenue suppression decreases, potentially benefiting NIM, excluding seasonal effects.  **[COF_3403699_9]** 

9. **Auto Loan Growth**  
   **Q:** Outlook for auto loan growth?  
   **A:** Auto originations have grown for **three consecutive quarters**. With interest margins increasing and credit stabilizing, we're seeing opportunities to grow in a disciplined way, leveraging our strong underwriting and dealer relationships.  **[COF_3403699_7]** 

10. **Consumer Spending Trends**  
    **Q:** How are consumer spending trends affecting business?  
    **A:** Spend per customer has remained largely flat since early 2023, ticking up recently. Growth is driven by new accounts. Discretionary and nondiscretionary spend growth rates are stable, and credit card use benefits from a macro shift away from cash and checks.  **[COF_3403699_12]** 

11. **Venture X Performance**  
    **Q:** Update on Venture X portfolio performance?  
    **A:** We're very pleased with the market response and customer engagement since launching Venture X in late 2021. It's key to our strategy to win at the top of the market. We're investing in experiences like our travel portal and lounges, and growth has been strong, especially in higher spend segments.  **[COF_3403699_13]** 

851999910a4997b04ce6b72394d54292c2939c396e8688e54c8899ea2fc37be7

- **Strong Growth in Auto Lending and Card Businesses**: Capital One is **"leaning in"** across the board, with Auto origination volumes up **20% year-over-year** in Q1 2024.  **[COF_3380812_15]**  In the Card business, they are experiencing **"strong new account growth"** and leveraging their technology transformation to enhance capabilities and customer experiences.  **[COF_3380812_9]**
- **Confidence in Credit Quality and Consumer Health**: Despite economic uncertainties, Capital One continues to **"feel very good about really the full spectrum of our customers"** and is confident in their credit performance, enabling them to **"lean into growth opportunities"**.  **[COF_3380812_13]**
- **Strategic Benefits from Proposed Discover Acquisition**: The acquisition of Discover is expected to **"increase competition among banks, credit card issuers and payment networks and provide significant benefits for consumers, merchants and the communities that we serve"**.  **[COF_3380812_8]**  Capital One believes the merger will be approved and enhance their position in the market.  **[COF_3380812_11]**

993e8ab2990ce02a92bd1460f81fe2fb95686e23acdcfc69403fb818ee8aa1d1

- **Lower and later tax refunds in 2024** are causing **higher charge-off rates** than expected, which could negatively impact **near-term credit performance**.  **[COF_3380812_6]**
- **Inflation and high interest rates** may be stretching some consumers financially, potentially leading to **worse credit performance among lower-income and subprime customers**.  **[COF_3380812_6]** **[COF_3380812_13]**
- **Capital returns, such as share repurchases, may be limited** in the near term due to **blackout restrictions** and regulatory processes related to the **Discover acquisition**, possibly affecting shareholder value.  **[COF_3380812_12]** **[COF_3380812_17]**

66285aab4f2c6a08c9b6a03524e4d23245441e0eb0ab15cc86a0d89abc39941d

- **Capital One's net charge-off rates have stabilized at approximately 15% above 2019 levels, potentially impacting profitability.**  **[COF_3370908_6]** ,  **[COF_3370908_17]**
- **The proposed CFPB late fee rule change is anticipated to significantly reduce income, affecting future financial performance.**  **[COF_3370908_13]**
- **The company experienced over **$80 million** in losses tied to commercial office loans this quarter, highlighting potential ongoing risks in the commercial real estate sector.**  **[COF_3370908_14]**

4bf923671091d8754b08969751c93ade979f2ac1946628c4feedf564bd5b89c9

Capital One Financial Corp (COF)

Financials