Capital One Financial Corp.

Solid Q3 earnings + credit + operating leverage (but EPS boosted by allowance release): - Q3 2026 net income: $3.5B ($5.61 diluted EPS). - Adjusting items tied to Discover and Brex; adjusted EPS: $6.69. - Linked-quarter: revenue +3%, non-interest expense -2% ⇒ pre-provision earnings +10% (adjusted +9%). - Provision for credit losses: $2.9B, down $73M (-2%); reflects $3.1B net charge-offs and $225M allowance release. - Important investor takeaway: credit performance is strong, but reported earnings were helped by allowance normalization/release (will affect “quality” of earnings vs run-rate).

Allowance / coverage signals ongoing improvement, especially in domestic cards (but lower coverage vs last quarter): - Allowance balance: $22.7B after the $225M release. - Total portfolio coverage: 4.92% (-10 bps sequential). - Domestic cards: released $250M, driven by favorable observed credit partly offset by more downside economic/geopolitical considerations; coverage 6.86% (-13 bps). - Consumer banking (auto-driven): built $41M, citing auto growth offset by improved vehicle value outlook; coverage 2.34% (-5 bps). - Commercial banking: allowance roughly flat (~$1.5B); coverage 1.6% (-2 bps).

Net interest margin jumped meaningfully; funding/liquidity moving but manageable: - Q3 NIM: 8.41%, up +40 bps QoQ. - Drivers mentioned: higher domestic card yield, $13B decline in avg cash balances, and an additional day in the quarter. - Liquidity reserves: ~$134B, down ~$10B QoQ; cash position ~$49B and investment securities MTM down ~ $3B. - Avg liquidity coverage ratio (preliminary): 163%.