Capital One Financial Corporation · NYSE:COF
Capital One Financial — Q4 2023 Earnings Presentation
18 slides from Capital One Financial's earnings presentation, Jan 25, 2024
Slide 1: Fourth Quarter 2023 Results
Fourth Quarter 2023 Results January 25, 2024 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: Q4 2023 Company Highlights
Q4 2023 Company Highlights • Net income of $706 million, or $1.67 per diluted common share for the fourth quarter of 2023; net income of $4.9 billion, or $11.95 per diluted common share for full year 2023 ◦ Adjusted net income per diluted common share(1) of $2.24 for the fourth quarter of 2023 and $
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 September 30, 2023 $ 11,324 $ 2,049 $ 1,582 $ 14,955 Charge-offs (2,306) (674) (126) (3,106) Recoveries 323 245 5 573 Net charge-offs (1,983) (429) (121)
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 $11,324 $11,709 $11,261 $10,976 $10,576 $10,925 $10,410 $10,032 $9,545 $9,165 $8,098 $7,673 7.59% 7.70% 7.71% 7.58% 7.66% 7.78% 7.79% 7.63% 6.93% 6.47% 6.97% 6.3
Slide 6: Liquidity
Liquidity Total Liquidity Reserves ($M)(1) Average Quarterly Liquidity Coverage Ratio ("LCR") 52% Q/Q 5 13% Y/Y $126,697 $117,963 $118,352 $120,652 $106,577 167% $90,557 155% 148% 150% 143% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q19 4Q22 1Q23 2Q23 3Q23 4Q23 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 51% Q/Q NII 54% Y/Y NII $7,423 $7,519 $7,197 $7,186 $7,113 6.84% 6.73% 6.60% 6.69% 6.48% 4Q22 1Q23 2Q23 3Q23 4Q23 Net Interest Income (NII) ($M) Net Interest Margin Fourth Quarter 2023 Highlights • Net interest margin increased 4 basis points quarter-over-
Slide 8: Capital
Capital Amount Ratio Common Equity Tier 1 Capital Ratio (Dollars in millions) Common equity Tier 1 (CET1) as of September 30, 2023 $ 47,106 13.0% Q4 2023 Net income 706 19 bps Common & Preferred Stock Dividends (289) (8)bps 12.5% 12.5% 12.7% 13.0% 12.9% Share Repurchases (150) (4)bps Other quarterly
Slide 9: Financial Summary—Business Segment Results
Financial Summary—Business Segment Results Three Months Ended December 31, 2023 Consumer Commercial (Dollars in millions) Credit Card Banking Banking Other Total Net interest income (loss) $ 5,231 $ 1,951 $ 617 $ (280) $ 7,519 Non-interest income 1,565 163 245 14 1,987 Total net revenue (loss) 6,796
Slide 10: Credit Card
Credit Card 2023 Q4 Fourth Quarter 2023 Highlights 2023 2023 2022 2023 2022 (Dollars in millions, except as noted) Q4 Q3 Q4 Q3 Q4 • Ending loans held for investment up Earnings: $16.8 billion, or 12%, year-over-year; Net interest income $ 5,231 $ 5,114 $ 4,533 2% 15% average loans held for investmen
Slide 11: Domestic Card
Domestic Card 2023 Q4 Fourth Quarter 2023 Highlights 2023 2023 2022 2023 2022 (Dollars in millions, except as noted) Q4 Q3 Q4 Q3 Q4 • Ending loans held for investment up Earnings: $16.1 billion, or 12%, year-over-year; Net interest income $ 4,940 $ 4,827 $ 4,280 2% 15% average loans held for investm
Slide 12: Consumer Banking
Consumer Banking 2023 Q4 Fourth Quarter 2023 Highlights 2023 2023 2022 2023 2022 (Dollars in millions, except as noted) Q4 Q3 Q4 Q3 Q4 • Ending loans held for investment down Earnings: $4.5 billion, or 6%, year-over-year; Net interest income $ 1,951 $ 2,133 $ 2,394 (9)% (19)% average loans held for
Slide 13: Commercial Banking
Commercial Banking 2023 Q4 2023 2023 2022 2023 2022 Fourth Quarter 2023 Highlights (Dollars in millions, except as noted) Q4 Q3 Q4 Q3 Q4 Earnings: • Ending loans held for investment down Net interest income $ 617 $ 621 $ 520 (1)% 19% $665 million, or 1%, quarter-over-quarter; average loans held for
Slide 14: Appendix
Appendix
Slide 15: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2023 2023 2023 2023 2022 Year Ended December 31, (Dollars in millions, except per share data and as noted) Q4 Q3 Q2 Q1 Q4 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 2023 2023 2023 2023 2022 Year Ended December 31, (Dollars in millions) Q4 Q3 Q2 Q1 Q4 2023 2022 Adjusted operating efficiency ratio: Operating expense (GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,463 $
Slide 17: ACL Coverage % - Commercial Office Real Estate
Commercial Office Real Estate LHFI ACL Coverage on LHFI $4,800 50.00% $3,955 $3,643 40.00% Funded Balance ($M) $3,600 ACL Coverage % $2,577 30.00% $2,425 $2,400 $2,268 20.00% 13.87% 13.36% 13.23% 11.05% $1,200 6.15% 10.00% $— —% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Annualized Net charge-off rate for LHFI(1
Slide 18: Deposits
Deposits Period-end Deposits by Segment $400 $350 $346 $348 $350 $344 $333 $20 $21 $19 $20 $22 $38 $36 $33 $300 $37 $41 $250 $296 $291 $286 $291 $271 $200 $B Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 (1) Consumer banking Commercial banking Other Category Fourth Quarter 2023 Highlights • Period-end insured depos
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