Core Viewpoint - Capital One's fourth-quarter 2025 results fell short of expectations, with adjusted earnings of $3.86 per share missing the Zacks Consensus Estimate of $4.12, despite showing year-over-year growth from $3.09 [1][8] Financial Performance - Adjusted earnings for 2025 were $19.61 per share, below the Zacks Consensus Estimate of $19.82, but improved from $13.96 in the previous year [3] - Total quarterly net revenues reached $15.58 billion, a 52.9% increase year over year, surpassing the Zacks Consensus Estimate of $15.37 billion [4] - Net revenues for 2025 were $53.43 billion, up 36.6% year over year, also exceeding the Zacks Consensus Estimate of $53.29 billion [4] - Quarterly net interest income (NII) surged 53.9% year over year to $12.5 billion, with net interest margin (NIM) expanding 123 basis points to 8.26% [4] Expense and Income Analysis - Non-interest income grew 49% year over year to $3.12 billion, driven by higher service charges and customer-related fees [5] - Non-interest expenses rose 53.4% year over year to $9.34 billion, attributed to increases in various cost components, particularly amortization of intangibles [5] - The efficiency ratio increased to 59.95%, indicating a decline in profitability compared to 59.75% in the prior-year quarter [6] Credit Quality - Provision for credit losses was $4.12 billion, a 56.8% increase from the prior-year quarter, with the allowance as a percentage of reported loans held for investment at 5.16%, up 20 basis points [7] - The net charge-off rate decreased by 14 basis points year over year to 3.45%, and the 30-plus-day-performing delinquency rate declined by 28 basis points to 3.41% [7] Strategic Developments - Capital One announced the acquisition of fintech Brex for $5.15 billion in a stock-and-cash deal, expected to close in mid-2026 [10][11] - The acquisition aims to enhance Capital One's position in the business payments marketplace, leveraging Brex's integrated platform [11] Capital Ratios - As of December 31, 2025, the Tier 1 risk-based capital ratio improved to 15.3% from 14.8% a year earlier, while the common equity Tier 1 capital ratio rose to 14.3% from 13.5% [9]

Core Viewpoint - Capital One's acquisition of Brex for $5.2 billion is a strategic move to enhance its business banking and payments capabilities, expanding beyond traditional card offerings [1][5][9] Group 1: Acquisition Details - The acquisition aims to integrate Brex's platform of business cards, spend management software, and banking services into Capital One's operations, addressing the fragmented tools currently used by businesses [5][7] - CEO Richard Fairbank emphasized that Brex's technology allows Capital One to reach a wider range of businesses, from startups to global enterprises, without the need to rebuild infrastructure [10][11] Group 2: Market Context - The business payments market is estimated at approximately $2 trillion in annual purchase volume, with a growing trend as companies shift away from cash and checks [9] - The business card market is growing at about 9% annually, with Brex experiencing even faster growth [10] Group 3: Financial Performance - Capital One's credit metrics are improving, with domestic card charge-offs declining and delinquency rates aligning with seasonal patterns, indicating a stabilization in credit performance [11] - Consumer spending remains resilient, with purchase volumes on Capital One's cards increasing by 6.2% excluding the impact of Discover operations [12] Group 4: Regulatory Concerns - Fairbank warned of potential "unintended consequences" from proposed regulations to cap credit card interest rates, suggesting that such measures could reduce access to credit and negatively impact consumer spending [14][15] Group 5: Future Integration - Brex will be integrated alongside Capital One's existing initiatives, including the Discover acquisition, with initial earnings dilution expected but no changes to capital plans or share repurchase cadence [16]

Fourth Quarter 2025 Results January 22, 2026 C O N F I D E N T IAL 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 avail ...