Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q1 2023 Earnings Presentation
18 slides from Capital One Financial's earnings presentation, Apr 27, 2023
Slide 1: First Quarter 2023 Results
First Quarter 2023 Results April 27, 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: Q1 2023 Company Highlights
Q1 2023 Company Highlights (1) • Net income of $960 million, or $2.31 per diluted common share • Pre-provision earnings(2) remained flat at $4.0 billion • Provision for credit losses of $2.8 billion • Efficiency ratio of 55.54% • Operating efficiency ratio of 45.47% • Common equity Tier 1 capital ra
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 December 31, 2022 $ 9,545 $ 2,237 $ 1,458 $ 13,240 Cumulative effects of accounting standards adoption(1) (63) — — (63) Balance as of January 1, 2023 9,4
Slide 5: Allowance Coverage Ratios by Segment
Allowance Coverage Ratios by Segment Allowance for credit losses ($M) Allowance Coverage Ratio Branded Card 8.6% Credit Card Domestic Card $11,191 $10,410 $10,650 $10,032 $9,545 $9,165 $8,098 $8,280 $7,968 $7,673 10.81% 10.46% 7.27% 7.59% 7.38% 7.66% 6.93% 6.47% 6.97% 6.31% /23 /23 /22 /22 /22 /22 /
Slide 6: Liquidity
Liquidity Average Quarterly Total Liquidity Reserves ($M)(1) Liquidity Coverage Ratio (LCR) 519 % Q/Q 5 15% Y/Y $126,697 $110,545 $106,577 $93,207 $92,800 148% $90,557 144% 143% 140% 139% 1Q22 2Q22 3Q22 4Q22 1Q23 4Q19 1Q22 2Q22 3Q22 4Q22 1Q23 Liquidity coverage ratio FHLB eligible loans Cash and cas
Slide 7: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin ↓15bps Q/Q 512% Y/Y $7,197 $7,186 $7,003 $6,397 $6,517 6.80% 6.84% 6.49% 6.54% 6.60% 1Q22 2Q22 3Q22 4Q22 1Q23 Net Interest Income ($M) Net Interest Margin First Quarter 2023 Highlights • Net interest margin decreased 24 basis points quarter-over-quarter dr
Slide 8: Capital
Capital Amount Ratio Common Equity Tier 1 Capital Ratio (Dollars in millions) Common equity Tier 1 (CET1) as of December 31, $ 44,731 12.5% 2022 Q1 2023 Net income 960 27 bps CECL Transition Provisions (599) (17)bps 12.7% 12.1% 12.2% 12.5% 12.5% Common & Preferred Stock Dividends (294) (8)bps Share
Slide 9: Financial Summary—Business Segment Results
Financial Summary—Business Segment Results Three Months Ended March 31, 2023 Consumer Commercial (Dollars in millions) Credit Card Banking Banking Other 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 2,4
Slide 10: Credit Card
Credit Card 2023 Q1 vs. First Quarter 2023 Highlights 2023 2022 2022 2022 2022 (Dollars in millions, except as noted) Q1 Q4 Q1 Q4 Q1 • Ending loans held for investment up Earnings: $23.2 billion, or 20%, year-over-year; Net interest income $ 4,657 $ 4,533 $ 3,839 3% 21% average loans held for invest
Slide 11: Domestic Card
Domestic Card 2023 Q1 vs. First Quarter 2023 Highlights 2023 2022 2022 2022 2022 (Dollars in millions, except as noted) Q1 Q4 Q1 Q4 Q1 • Ending loans held for investment up Earnings: $23.0 billion, or 21%, year-over-year; Net interest income $ 4,390 $ 4,280 $ 3,620 3% 21% average loans held for inve
Slide 12: Consumer Banking
Consumer Banking 2023 Q1 vs. First Quarter 2023 Highlights 2023 2022 2022 2022 2022 (Dollars in millions, except as noted) Q1 Q4 Q1 Q4 Q1 • Ending loans held for investment down Earnings: $2.2 billion, or 3%, year-over-year; Net interest income $ 2,360 $ 2,394 $ 2,113 (1)% 12% average loans held for
Slide 13: Commercial Banking
Commercial Banking 2023 Q1 vs. 2023 2022 2022 2022 2022 First Quarter 2023 Highlights (Dollars in millions, except as noted) Q1 Q4 Q1 Q4 Q1 Earnings: • Ending loans held for investment down $1.1 Net interest income (1) $ 648 $ 520 $ 607 25% 7% billion, or 1%, quarter-over-quarter; average loans held
Slide 14: Appendix
Appendix
Slide 15: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2023 2022 2022 2022 2022 (Dollars in millions) Q1 Q4 Q3 Q2 Q1 Total net revenue (GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,903 $ 9,040 $ 8,805 $ 8,232 $ 8,173 Ope
Slide 17: Commercial Office Real Estate ACL Coverage
Commercial Office Real Estate Funded Balance ACL Coverage $4,800 50.00% $4,033 $4,019 $3,984 $3,955 $3,643 40.00% $3,600 Funded Balance ($M) ACL Coverage % 30.00% $2,400 20.00% 13.87% $1,200 6.15% 10.00% 2.65% 3.67% 1.76% $— —% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Net charge-off rate(1) —% —% —% 0.37 % 1.8
Slide 18: Deposits
Deposits Deposits by Segment Total Deposits $400 $400 $350 $350 $350 $333 $20 $350 $343 $333 $333 $22 $38 $300 $41 $300 $250 $291 $271 $250 $200 $B 12/31/22 03/31/23 Consumer banking Commercial banking $200 (1) Other Category $B 12/31/22 01/31/23 2/28/2023 03/31/23 First Quarter 2023 Highlights • In
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