Capital One Financial Corporation

Q3 results beat / solid momentum; adjusted EPS boosted by allowance release - Reported $3.5B net income ($5.61/share). - Adjusted EPS: $6.69 after “adjusting items” tied to Discover and Brex acquisitions. - Revenue +3% QoQ and non-interest expense -2% QoQ → pre-provision earnings +10% QoQ (adjusted pre-provision +9%). - Provision for credit losses -$73M (-2%) to $2.9B, reflecting $3.1B net charge-offs and $225M allowance release (a key driver of earnings strength).

Credit quality: strong but with mix/seasonality dynamics; allowance coverage edged down - Allowance balance ended at $22.7B; coverage ratio 4.92% (-10 bps) (slightly weaker coverage). - Domestic cards: $250M allowance release; coverage 6.86% (-13 bps). - Charge-off rate 3.98% (-73 bps QoQ, -65 bps YoY); delinquencies 3.74% (+35 bps QoQ, -15 bps YoY—in line with seasonality). - Consumer banking/auto: $41M allowance build; coverage 2.34% (-5 bps QoQ). - Auto charge-off 1.59% (+16 bps QoQ, +5 bps YoY); delinquency 4.64% (+32 bps QoQ). - Commercial banking: allowance ~flat (~$1.5B), coverage 1.6% (-2 bps).

Liquidity, NIM, capital: NIM up sharply; capital stable; liquidity down QoQ - Net interest margin (NIM): 8.41%, +40 bps QoQ, driven by higher domestic card yields, $13B lower avg cash balances, and one extra day. - Liquidity reserves ~ $134B, down ~$10B QoQ; cash position ~$49B; investment securities -~$3B. - Preliminary average LCR ~163% (solid). - CET1 ratio 13.8%, roughly flat; net income largely offset by ~$2.6B share repurchases plus dividends and growth.