Capital One Financial Corporation

Strong Q3 profitability; growth + credit performance; allowance benefit drove EPS: - Q3 2026 net income $3.5B ( $5.61/share diluted). - Adjusted EPS: $6.69 (results included adjusting items tied to Discover and Brex acquisitions). - Net charge-offs $3.1B; allowance release $225M reduced the provision. - Provision for credit losses fell $73M (-2%) to $2.9B; this was a key driver of earnings strength. - PPE (pre-provision earnings): +10% QoQ, and non-interest expense -2% QoQ while revenue +3% QoQ.

Credit quality: improving but allow/coverage ratio drifting—watch coverage: - Allowance released $225M taking total allowance to $22.7B. - Total portfolio coverage ratio 4.92% ( -10 bps QoQ) — modest deterioration due to releases/builds by segment. - Domestic cards: allowance release $250M; coverage 6.86% (-13 bps). Management cited favorable observed credit, partially offset by more downside economic scenarios consideration tied to geopolitical risks. - Consumer banking (auto): allowance build $41M; coverage 2.34% (-5 bps); driven by strong auto growth partially offset by improved vehicle value outlook. - Commercial banking: allowance flat ~$1.5B; coverage 1.6% (-2 bps).

Net interest margin surged—then liquidity and NIM drivers are clear: - NIM: 8.41%, +40 bps QoQ. Drivers: higher domestic card yield, $13B decline in avg cash balances, and an extra day in the quarter. - Liquidity reserves: ended Q3 ~$134B, down $10B QoQ. Cash ~$49B; investment securities market value down ~ $3B. - Preliminary avg LCR: 163%.