Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q3 2023 Earnings Presentation
18 slides from Capital One Financial's earnings presentation, Oct 26, 2023
Slide 1: Third Quarter 2023 Results
Third Quarter 2023 Results October 26, 2023 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and related communications should be read in conjunction with the financial statements, notes, and other information contained in Capital One’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Please note that
Slide 3: Q3 2023 Company Highlights
Q3 2023 Company Highlights (1) • Net income of $1.8 billion, or $4.45 per diluted common share • Pre-provision earnings(2) increased 7% to $4.5 billion • Provision for credit losses of $2.3 billion • Efficiency ratio of 51.89% • Operating efficiency ratio of 41.51% • Common equity Tier 1 capital rat
Slide 4: Allowance for Credit Losses
Allowance for Credit Losses Credit Consumer Commercial Total Card Banking Banking (Dollars in millions) Allowance for credit losses: Balance as of June 30, 2023 $ 10,976 $ 2,185 $ 1,485 $ 14,646 Charge-offs (1,925) (596) (60) (2,581) Recoveries 333 247 2 582 Net charge-offs (1,592) (349) (58) (1,999
Slide 5: Allowance Coverage Ratios by Segment
Allowance Coverage Ratios by Segment Allowance for credit losses ($M) Allowance Coverage Ratio Branded Card 8.7% Credit Card Domestic Card $11,191 $10,976 $11,324 $10,925 $10,410 $10,650 $10,576 $10,032 $9,545 $9,165 $8,716 $8,370 $8,098 $7,673 10.46% 10.81% 7.59% 7.70% 7.71% 7.66% 7.78% 7.79% 6.87%
Slide 6: Liquidity
Liquidity Average Quarterly Total Liquidity Reserves ($M)(1) Liquidity Coverage Ratio ("LCR") Flat Q/Q 5 28% Y/Y $126,697 $117,963 $118,352 $106,577 $90,557 $92,800 155% 148% 150% 139% 143% 3Q22 4Q22 1Q23 2Q23 3Q23 4Q19 3Q22 4Q22 1Q23 2Q23 3Q23 Liquidity coverage ratio FHLB eligible loans Cash and c
Slide 7: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin 54% Q/Q 56% Y/Y $7,423 $7,197 $7,186 $7,113 $7,003 6.80% 6.84% 6.60% 6.69% 6.48% 3Q22 4Q22 1Q23 2Q23 3Q23 Net Interest Income ($M) Net Interest Margin Third Quarter 2023 Highlights • Net interest margin increased 21 basis points quarter-over-quarter driven
Slide 8: Capital
Capital Amount Ratio Common Equity Tier 1 Capital Ratio (Dollars in millions) Common equity Tier 1 (CET1) as of June 30, 2023 $ 45,589 12.7% Q3 2023 Net income 1,790 50 bps Common & Preferred Stock Dividends (290) (8)bps 12.2% 12.5% 12.5% 12.7% 13.0% Share Repurchases (150) (4)bps Other quarterly ac
Slide 9: Financial Summary—Business Segment Results
Financial Summary—Business Segment Results Three Months Ended September 30, 2023 Consumer Commercial (Dollars in millions) Credit Card Banking Banking Other Total Net interest income (loss) $ 5,114 $ 2,133 $ 621 $ (445) $ 7,423 Non-interest income (loss) 1,513 142 288 — 1,943 Total net revenue (loss
Slide 10: Credit Card
Credit Card 2023 Q3 Third Quarter 2023 Highlights 2023 2023 2022 2023 2022 (Dollars in millions, except as noted) Q3 Q2 Q3 Q2 Q3 • Ending loans held for investment up Earnings: $19.9 billion, or 16%, year-over-year; Net interest income $ 5,114 $ 4,727 $ 4,313 8% 19% average loans held for investment
Slide 11: Domestic Card
Domestic Card 2023 Q3 Third Quarter 2023 Highlights 2023 2023 2022 2023 2022 (Dollars in millions, except as noted) Q3 Q2 Q3 Q2 Q3 • Ending loans held for investment up Earnings: $19.0 billion, or 16%, year-over-year; Net interest income $ 4,827 $ 4,453 $ 4,065 8% 19% average loans held for investme
Slide 12: Consumer Banking
Consumer Banking 2023 Q3 Third Quarter 2023 Highlights 2023 2023 2022 2023 2022 (Dollars in millions, except as noted) Q3 Q2 Q3 Q2 Q3 • Ending loans held for investment down Earnings: $4.4 billion, or 5%, year-over-year; Net interest income $ 2,133 $ 2,269 $ 2,311 (6)% (8)% average loans held for in
Slide 13: Commercial Banking
Commercial Banking 2023 Q3 2023 2023 2022 2023 2022 Third Quarter 2023 Highlights (Dollars in millions, except as noted) Q3 Q2 Q3 Q2 Q3 Earnings: • Ending loans held for investment Net interest income $ 621 $ 632 $ 699 (2)% (11)% substantially flat quarter-over-quarter; average loans held for invest
Slide 14: Appendix
Appendix
Slide 15: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Nine Months Ended 2023 2023 2023 2022 2022 September 30, (Dollars in millions, except per share data and as noted) Q3 Q2 Q1 Q4 Q3 2023 2022 Adjusted diluted earnings per share (“EPS”): Net income available to common stockholders (GAAP) . . . . . . . . . . . . . .
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Nine Months Ended 2023 2023 2023 2022 2022 September 30, (Dollars in millions) Q3 Q2 Q1 Q4 Q3 2023 2022 Total net revenue (GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,366 $ 9,012 $ 8,903 $ 9,040 $ 8,8
Slide 17: ACL Coverage %
Commercial Office Real Estate LHFI ACL Coverage on LHFI $4,800 50.00% $3,984 $3,955 $3,643 40.00% Funded Balance ($M) $3,600 ACL Coverage % $2,577 30.00% $2,425 $2,400 20.00% 13.87% 13.36% 11.05% $1,200 6.15% 10.00% 3.67% $— —% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Annualized Net charge-off rate for LHFI(1)
Slide 18: Deposits
Deposits Period-end Deposits by Segment $400 $350 $346 $350 $344 $333 $20 $21 $19 $22 $38 $36 $300 $37 $41 $250 $291 $286 $291 $271 $200 $B Q4’22 Q1’23 Q2’23 Q3’23 (1) Consumer banking Commercial banking Other Category Third Quarter 2023 Highlights • Period-end insured deposits were $277.7 billion o
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