Cover and table of contents

22K characters. Original on sec.gov · Markdown

Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-13300

CAPITAL ONE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		54-1719854
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1680 Capital One Drive,
McLean,	Virginia	22102
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (703) 720-1000

(Not Applicable) (Former name, former address and former fiscal year, if changed since last report)____________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock (par value $.01 per share)	COF	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series I	COF PRI	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series J	COF PRJ	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series K	COF PRK	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series L	COF PRL	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series N	COF PRN	New York Stock Exchange
0.800% Senior Notes Due 2024	COF24	New York Stock Exchange
1.650% Senior Notes Due 2029	COF29	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 20, 2023, there were 380,846,771 shares of the registrant’s Common Stock outstanding.

TABLE OF CONTENTS


		Page
PART I —FINANCIAL INFORMATION		4













Item 1.	Financial Statements and Notes	67
	Consolidated Statements of Income	68
	Consolidated Statements of Comprehensive Income	69
	Consolidated Balance Sheets	70
	Consolidated Statements of Changes in Stockholders’ Equity	71
	Consolidated Statements of Cash Flows	73
	Notes to Consolidated Financial Statements	75
	Note 1—Summary of Significant Accounting Policies	75

	Note 2—Investment Securities	77
	Note 3—Loans	80
	Note 4—Allowance for Credit Losses and Reserve for Unfunded Lending Commitments	92
	Note 5—Variable Interest Entities and Securitizations	97
	Note 6—Goodwill and Other Intangible Assets	101
	Note 7—Deposits and Borrowings	102
	Note 8—Derivative Instruments and Hedging Activities	103
	Note 9—Stockholders’ Equity	112
	Note 10—Earnings Per Common Share	115
	Note 11—Fair Value Measurement	116
	Note 12—Business Segments and Revenue from Contracts with Customers	124
	Note 13—Commitments, Contingencies, Guarantees and Others	128





Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)	4
	Introduction	4

	Selected Financial Data	6
	Executive Summary	9
	Consolidated Results of Operations	10
	Consolidated Balance Sheets Analysis	16
	Off-Balance Sheet Arrangements	17
	Business Segment Financial Performance	18
	Critical Accounting Policies and Estimates	28
	Accounting Changes and Developments	29
	Capital Management	30
	Risk Management	34
	Credit Risk Profile	36
	Liquidity Risk Profile	47
	Market Risk Profile	52
	Supervision and Regulation	55
	Forward-Looking Statements	56
	Supplemental Table	59
	Glossary and Acronyms	61



			1			Capital One Financial Corporation (COF)


Item 3.	Quantitative and Qualitative Disclosures about Market Risk	131
Item 4.	Controls and Procedures	131

PART II—OTHER INFORMATION		132
Item 1.	Legal Proceedings	132
Item 1A.	Risk Factors	132
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	132
Item 3.	Defaults Upon Senior Securities	132
Item 4.	Mine Safety Disclosures	132
Item 5.	Other Information	132
Item 6.	Exhibits	133





EXHIBIT INDEX		134
SIGNATURES		135



			2			Capital One Financial Corporation (COF)

INDEX OF MD&A AND SUPPLEMENTAL TABLE


MD&A Tables:		Page
1	Consolidated Financial Highlights	6
2	Average Balances, Net Interest Income and Net Interest Margin	11
3	Rate/Volume Analysis of Net Interest Income	13
4	Non-Interest Income	14
5	Non-Interest Expense	15

6	Loans Held for Investment	16
7	Funding Sources Composition	16
8	Business Segment Results	19
9	Credit Card Business Results	20
9.1	Domestic Card Business Results	21
10	Consumer Banking Business Results	23
11	Commercial Banking Business Results	25
12	Other Category Results	27
13	Capital Ratios Under Basel III	32
14	Regulatory Risk-Based Capital Components and Regulatory Capital Metrics	33
15	Preferred Stock Dividends Paid Per Share	34
16	Portfolio Composition of Loans Held for Investment	36

17	Credit Card Portfolio by Geographic Region	37
18	Consumer Banking Portfolio by Geographic Region	37
19	Commercial Real Estate Portfolio by Region	38
20	Commercial Loans by Industry	39
21	Credit Score Distribution	39
22	30+ Day Delinquencies	40
23	Aging and Geography of 30+ Day Delinquent Loans	41
24	90+ Day Delinquent Loans Accruing Interest	42
25	Nonperforming Loans and Other Nonperforming Assets	42
26	Net Charge-Offs	44

27	Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity	46

28	Liquidity Reserves	48
29	Deposits Composition and Average Deposits Interest Rates	49

30	Long-Term Debt Funding Activities	51
31	Senior Unsecured Long-Term Debt Credit Ratings	51

32	Interest Rate Sensitivity Analysis	54


Supplemental Table:





A	Reconciliation of Non-GAAP Measures	59



			3			Capital One Financial Corporation (COF)

PART I—FINANCIAL INFORMATION

Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)