Capital One Reports Fourth Quarter 2023 Net Income of $706 million, or $1.67 per share - 25.01.24 - News

MCLEAN, Va., Jan. 25, 2024

MCLEAN, Va., Jan. 25, 2024 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2023 of $706 million, or $1.67 per diluted common share, compared with net income of $1.8 billion, or $4.45 per diluted common share in the third quarter of 2023, and with net income of $1.2 billion, or $3.03 per diluted common share in the fourth quarter of 2022. Adjusted net income⁽¹⁾ for the fourth quarter of 2023 was $2.24 per diluted common share.

"We delivered solid results with strong top line growth in 2023," said Richard D. Fairbank, Founder, Chairman, and Chief Executive Officer. "Our modern technology capabilities are driving resilient growth, enabling efficiency improvement, and putting us in a strong position to deliver long-term shareholder value."

The quarter included the following adjusting item:

(Dollars in millions, except per share data)

Pre-Tax

Impact

ARIVA.DE Börsen-Geflüster

Kurse

Capital One Financial

146,21 $

+0,16%

After-Tax
Diluted EPS

Impact

FDIC special assessment

$ 289

$ 0.57

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

Fourth Quarter 2023 Income Statement Summary:

Total net revenue increased 1 percent to $9.5 billion.
Total non-interest expense increased 18 percent to $5.7 billion:
- 29 percent increase in marketing.
- 15 percent increase in operating expenses.
Pre-provision earnings⁽²⁾ decreased 16 percent to $3.8 billion.
Provision for credit losses increased $573 million to $2.9 billion:
- Net charge-offs of $2.5 billion.
- $326 million loan reserve build.
Net interest margin of 6.73 percent, an increase of 4 basis points.
Efficiency ratio of 60.14 percent.
- Adjusted efficiency ratio⁽¹⁾ of 57.10 percent.
Operating efficiency ratio of 46.95 percent.
- Adjusted operating efficiency ratio⁽¹⁾ of 43.91 percent.

Fourth Quarter 2023 Balance Sheet Summary:

Common equity Tier 1 capital ratio under Basel III Standardized Approach of 12.9 percent at December 31, 2023.
Period-end loans held for investment in the quarter increased $5.7 billion, or 2 percent, to $320.5 billion.
- Credit Card period-end loans increased $7.8 billion, or 5 percent, to $154.5 billion.
  - Domestic Card period-end loans increased $7.3 billion, or 5 percent, to $147.7 billion.
- Consumer Banking period-end loans decreased $1.4 billion, or 2 percent, to $75.4 billion.
  - Auto period-end loans decreased $1.4 billion, or 2 percent, to $74.1 billion.
- Commercial Banking period-end loans decreased $665 million, or 1 percent, to $90.5 billion.
Average loans held for investment in the quarter increased $3.1 billion, or 1 percent, to $315.9 billion.
- Credit Card average loans increased $4.6 billion, or 3 percent, to $148.6 billion.
  - Domestic Card average loans increased $4.6 billion, or 3 percent, to $142.1 billion.
- Consumer Banking average loans decreased $916 million, or 1 percent, to $76.2 billion.
  - Auto average loans decreased $879 million, or 1 percent, to $74.9 billion.
- Commercial Banking average loans decreased $531 million, or 1 percent, to $91.0 billion.
Period-end total deposits increased $2.4 billion, or 1 percent, to $348.4 billion, while average deposits increased $315 million, or less than 1 percent, to $345.3 billion.
Interest-bearing deposits rate paid increased 17 basis points to 3.47 percent.

2023 Full Year Income Statement Summary:

Total net revenue increased 7 percent to $36.8 billion.
Total non-interest expense increased 6 percent to $20.3 billion:
- Marketing expense remained flat at $4.0 billion.
- 8 percent increase in operating expenses.
Pre-provision earnings⁽²⁾ increased 9 percent to $16.5 billion.
Provision for credit losses increased $4.6 billion to $10.4 billion.
Net interest margin of 6.63 percent, a decrease of 4 basis points.
Efficiency ratio of 55.23 percent.
- Adjusted efficiency ratio⁽¹⁾ of 54.44 percent.
Operating efficiency ratio of 44.33 percent.
- Adjusted operating efficiency ratio⁽¹⁾ of 43.54 percent.


⁽¹⁾	This is a non-GAAP measure. We believe non-GAAP measures help investors and users of our financial information understand the effect of adjusting items on our selected reported results and provide alternate measurements of our performance, both in the current period and across periods. "Table 15: Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures" in Exhibit 99.2 for a reconciliation of our selected reported results to these non-GAAP measures.
⁽²⁾	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 January 25, 2024 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.

Earnings Conference Call Webcast Information

The company will hold an earnings conference call on January 25, 2024 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 February 8, 2024 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.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company which, along with its subsidiaries, had $348.4 billion in deposits and $478.5 billion in total assets as of December 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 and Cafés located primarily in New York, Louisiana, Texas, Maryland, Virginia 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.

Exhibit 99.2
Capital One Financial Corporation Financial Supplement⁽¹⁾⁽²⁾ Fourth 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	14

	Table 10:	Financial & Statistical Summary—Credit Card Business	15

	Table 11:	Financial & Statistical Summary—Consumer Banking Business	17

	Table 12:	Financial & Statistical Summary—Commercial Banking Business	18

	Table 13:	Financial & Statistical Summary—Other and Total	19

Other

	Table 14:	Notes to Net Interest Margin, Loan, Allowance and Business Segment Disclosures (Tables 6—13)	20

	Table 15:	Calculation of Regulatory Capital Measures and Reconciliation of Non-GAAP Measures	21

__________

⁽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 Annual Report on Form 10-K for the period ended December 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 Q4

Year Ended December 31,

(Dollars in millions, except per share data and as noted)

2023

Q4

2023

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