1 Second Quarter 2024 Results July 23, 2024 Forward-Looking Statements This presentation and related communications should be read in conjunction with the financial statements, notes, and other information contained in Capital One's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Please note that the following materials containing information regarding Capital One's financial performance is preliminary and based on Capital One's data available at the time of the ...

Core Insights - For the quarter ended June 2024, Capital One reported revenue of $9.51 billion, reflecting a year-over-year increase of 5.5% [1] - The earnings per share (EPS) was $3.14, down from $3.52 in the same quarter last year, indicating a decline [1] - The reported revenue was slightly below the Zacks Consensus Estimate by -0.03%, while the EPS fell short by -4.27% compared to the consensus estimate [1] Financial Metrics - Net Interest Margin stood at 6.7%, matching the average estimate from five analysts [2] - The net charge-off rate was reported at 3.4%, slightly above the average estimate of 3.3% from four analysts [2] - The Efficiency Ratio was 52%, better than the estimated 53.9% from four analysts [2] - Average Balance of Total interest-earning assets was $450.91 billion, exceeding the estimate of $450.15 billion [2] - Consumer Banking net charge-off rate was 1.9%, higher than the estimated 1.8% [2] - Commercial Banking net charge-off rate was 0.2%, lower than the estimated 0.5% [2] - International credit card businesses net charge-off rate was 5%, below the estimate of 5.7% [2] Revenue Breakdown - Total net revenue from Credit Card was $6.80 billion, slightly below the average estimate of $6.85 billion, but showing a year-over-year increase of 9.2% [2] - Total net revenue from Consumer Banking was $2.20 billion, matching the estimate but representing a decline of 9.1% year-over-year [2] - Total net revenue from Domestic Credit Card was $6.44 billion, slightly below the estimate of $6.46 billion, with a year-over-year increase of 9.5% [2] - Total net revenue from Other was reported at -$371 million, better than the estimate of -$443.27 million, reflecting a year-over-year decline of 28.8% [2] - Total net revenue from Commercial Banking was $880 million, exceeding the estimate of $869.94 million, with a year-over-year decrease of 1% [2] Stock Performance - Capital One shares have returned +5.4% over the past month, outperforming the Zacks S&P 500 composite's +2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Earnings Performance - Capital One reported quarterly earnings of $3.14 per share, missing the Zacks Consensus Estimate of $3.28 per share, and down from $3.52 per share a year ago, representing an earnings surprise of -4.27% [1] - The company posted revenues of $9.51 billion for the quarter ended June 2024, slightly missing the Zacks Consensus Estimate by 0.03%, and up from $9.01 billion year-over-year [1] Market Performance - Capital One shares have increased by approximately 10.7% since the beginning of the year, compared to the S&P 500's gain of 16.7% [2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $3.98 on revenues of $9.67 billion, and for the current fiscal year, it is $13.40 on revenues of $38.48 billion [4] - The estimate revisions trend for Capital One is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [4] Industry Context - The Financial - Consumer Loans industry, to which Capital One belongs, is currently in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [5] - Another company in the same industry, PROG Holdings, is expected to report quarterly earnings of $0.71 per share, reflecting a year-over-year decline of -22.8% [5][6]

Financial Performance - Net income for Q2 2024 was $597 million, a decrease of 53% compared to Q1 2024 and a 58% decrease year-over-year[3]. - Total net revenue for Q2 2024 was $9,506 million, a 1% increase from Q1 2024 and a 5% increase year-over-year[3]. - Net income available to common stockholders for Q2 2024 was $531 million, a 56% decrease from Q1 2024 and a 61% decrease year-over-year from Q2 2023[9]. - Basic earnings per share for Q2 2024 was $1.39, down 56% from Q1 2024 and down 61% year-over-year from Q2 2023[9]. - Diluted earnings per share for Q2 2024 was $1.38, a 56% decrease from Q1 2024 and a 61% decrease year-over-year from Q2 2023[9]. - Income from continuing operations before income taxes for the three months ended June 30, 2024, was $651 million, down from $2,233 million in the same period last year[30]. - The company reported a net income of $1,280 million for the three months ended June 30, 2024, down from $2,391 million in the same period last year[32]. Revenue and Income Sources - Net interest income increased to $7,546 million, up 1% from Q1 2024 and 6% year-over-year[3]. - Non-interest income totaled $1,960 million, a 2% increase from Q1 2024 and a 3% increase year-over-year from Q2 2023[8]. - Total interest income for Q2 2024 was $11,280 million, a 1% increase from Q1 2024 and a 13% increase year-over-year from Q2 2023[8]. - Total net revenue for the three months ended June 30, 2024, was $9,506 million, compared to $18,908 million for the same period in 2023, showing a significant decline[30]. Credit Losses and Provisions - Provision for credit losses rose significantly to $3,909 million, reflecting a 46% increase from Q1 2024 and a 57% increase year-over-year[3]. - The allowance for credit losses increased to $16,649 million in Q2 2024, up 8% from $15,380 million in Q1 2024[6]. - The provision for credit losses for the first half of 2024 was $6,621 million, which is higher than the $5,804 million recorded in the first half of 2023[27]. - Provision for credit losses significantly increased to $3,545 million in Q2 2024, up 57% from Q2 2023[34]. Assets and Liabilities - Total assets as of June 30, 2024, were $480,018 million, representing a 3% increase compared to the previous year[4]. - Total liabilities were reported at $422,037 million in Q2 2024, showing a marginal decrease from $423,919 million in Q1 2024 and an increase of 2% from $413,241 million in Q2 2023[13]. - Total deposits reached $351,442 million in Q2 2024, a slight increase from $350,969 million in Q1 2024 and a 2% rise from $343,705 million in Q2 2023[13]. Operational Efficiency - Non-interest expense decreased to $4,946 million, down 4% from Q1 2024[3]. - The efficiency ratio improved to 52.03% in Q2 2024 from 54.64% in Q1 2024, indicating better operational efficiency[6]. - The operating efficiency ratio (GAAP) improved to 40.84% in Q2 2024 from 43.89% in Q1 2024 and 43.36% in Q2 2023[52]. Capital and Equity - Common equity increased to $53,135 million, a 7% increase compared to the previous year[4]. - Common equity Tier 1 capital ratio improved to 13.2% in Q2 2024 from 13.1% in Q1 2024, showing a 10 basis point increase[6]. - Total capital reached $59,876 million, a rise from $57,607 million year-over-year, indicating an increase of 3.9%[48]. Charge-Offs and Delinquency Rates - The net charge-off rate for Q2 2024 was 3.36%, slightly up from 3.33% in Q1 2024[6]. - Domestic credit card net charge-off rate increased to 6.05% in Q2 2024 from 5.94% in Q1 2024, a rise of 11 basis points[23]. - Total net charge-offs rose to $3.36 billion in Q2 2024 compared to $3.33 billion in Q1 2024, an increase of $30 million[23]. Other Key Metrics - The number of employees at period-end increased to 52.1 thousand in Q2 2024, up 2% from 51.3 thousand in Q1 2024[6]. - The average yield on loans outstanding was 18.73% in Q2 2024, a decrease of 3 basis points from Q1 2024 and a decrease of 66 basis points from Q2 2023[36]. - The 30+ day delinquency rate was 6.05% in Q2 2024, an increase of 11 basis points from Q1 2024 and 167 basis points from Q2 2023[36].

Capital One (COF) is slated to report second-quarter 2024 results on Jul 23, after market close. Its earnings are expected to have witnessed a decrease on a year-over-year basis, while revenues are likely to have increased.In the last quarter, the company’s earnings lagged the Zacks Consensus Estimate. Results were adversely impacted by higher expenses and a sequential fall in loan balance. However, an increase in net interest income (NII) and non-interest income, and lower provisions acted as tailwinds.Cap ...

Capital One Announces $265 Billion Community Benefits PlanCapital One said Tuesday (July 16) that a combination of the bank with Discover Financial Services would provide more benefits to underserved communities than the organizations would offer separately.The bank said this in a press release announcing a $265 billion community benefits plan that it developed in partnership with four community groups.“We have a long history of developing innovative ways to serve these core constituencies, and we are commi ...

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