Capital One Financial Corporation

Q3 2026 headline results beat “adjusted” optics, driven by allowance release + strong ops - Reported net income: $3.5B ($5.61/share). - Adjusting items tied to Discover and Brex acquisitions; net adjusted EPS: $6.69. - Linked-quarter loans/deposits: loans +1%, deposits -1% (both end and average). - Revenue +3% and non-interest expense -2% QoQ → pre-provision earnings +10% (adjusted: +9%). - Provision for credit losses decreased $73M (-2%) to $2.9B, reflecting $3.1B net charge-offs offset by $225M allowance release.

Credit quality: still good; allowance/coverage dynamics are a key swing factor (good + potentially noisy) - Allowance coverage ratio: 4.92% (-10 bps QoQ). - Domestic card: released $250M allowance; coverage 6.86% (-13 bps)—driven by favorable observed credit, partially offset by more downside consideration tied to geopolitical risk. - Consumer banking: built $41M allowance; coverage 2.34% (-5 bps)—mainly auto growth partially offset by improved vehicle value outlook. - Commercial: allowance flat ~ $1.5B, coverage ~1.6% (-2 bps). - Card performance: domestic card charge-off rate 3.98% (-73 bps QoQ, -65 bps YoY), supported by improving delinquencies and strong recoveries; delinquencies 3.74% (+35 bps QoQ, -15 bps YoY)—described as normal seasonality.

Net interest margin strengthened meaningfully; liquidity modestly down - NIM: 8.41%, up +40 bps QoQ—attributed to higher yield in domestic card, $13B decline in average cash, and an extra day in the quarter. - Liquidity reserves: ~$134B, down $10B QoQ. - Ending cash: ~$49B (down ~$6B); investment securities market value down ~$3B. - Preliminary average LCR ~163%.