← Back to COF filing summaryOriginal filing text · Part I
Item 2 — Management's Discussion and Analysis
Capital One Financial Corp · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
View complete filing on SEC EDGAR ↗This is the extracted source text from the SEC filing. Formatting may differ from the original document.
This discussion contains forward-looking statements that are based upon management’s current expectations and are subject to significant uncertainties and changes in circumstances. Please review “Forward-Looking Statements” for more information on the forward-looking statements in this Quarterly Report on Form 10-Q (“this Report”). All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. Our actual results may differ materially from those included in these forward-looking statements due to a variety of factors including, but not limited to, those described in “Part I—Item 1A. Risk Factors” in our 2025 Annual Report on Form 10-K (“2025 Form 10-K”) and “Part II—Item 1A. Risk Factors” in this Report. Unless otherwise specified, references to notes to our consolidated financial statements refer to the notes to our consolidated financial statements as of June 30, 2026 included in this Report.
Management monitors a variety of key indicators to evaluate our business results and financial condition. The following MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and related notes in this Report and the more detailed information contained in our 2025 Form 10-K.
INTRODUCTION
Capital One Financial Corporation, a Delaware corporation established in 1994 and headquartered in McLean, Virginia, is a diversified financial services holding company with banking and non-banking subsidiaries. Capital One Financial Corporation and its subsidiaries (the “Company” or “Capital One”) operate as a global payments provider and diversified financial institution, delivering a broad array of financial products and services to consumers, small businesses and commercial clients through digital channels, branch locations, cafés and other distribution channels.
Capital One Financial Corporation’s principal operating subsidiary was Capital One, National Association (“CONA”). On May 18, 2025 (the “Closing Date”), Discover Financial Services (“Discover”) merged into Capital One and Discover Bank merged into CONA. See “Part II—Item 8. Financial Statements and Supplementary Data—Note 2—Business Combinations and Discontinued Operations” in our 2025 Form 10-K for additional information. The Company is hereafter collectively referred to as “we,” “us” or “our.” CONA is referred to as the “Bank.”
We offer credit cards, debit cards, bank lending, treasury management and depository services, auto loans, and other consumer lending products in markets across the United States (“U.S.”). We service banking customer accounts through digital channels and our network of branch locations, cafés, call centers and automated teller machines (“ATMs”). Additionally, through the acquisition of Discover, we acquired new products, including personal loans as well as the Discover Network, the PULSE Network and Diners Club (collectively, the “Global Payment Network”).
We also offer credit card products and certain other services outside of the U.S. principally through Capital One (Europe) plc (“COEP”), an indirect subsidiary of CONA organized and located in the United Kingdom (“U.K.”), and through a branch of CONA in Canada. Both COEP and our Canadian branch of CONA have the authority to provide credit card loans. In addition, we offer Global Payment Network services globally.
Our consolidated total net revenues are derived primarily from lending to consumer and commercial customers net of funding costs associated with our deposits, long-term debt and other borrowings. We also earn non-interest income which primarily consists of discount and interchange income, net of reward expenses, and service charges and other customer-related fees. Our expenses primarily consist of the provision for credit losses, operating expenses, marketing expenses and income taxes.
Our principal operations are organized for management reporting purposes into three major business segments, which are defined primarily based on the products and services provided or the types of customers served: Credit Card, Consumer Banking and Commercial Banking. The operations of acquired businesses have been integrated into or managed as a part of our existing business segments. Certain activities that are not part of a business segment are included in the Other category, such as the management of our corporate investment portfolio and asset/liability positions performed by our centralized Corporate Treasury group and any residual tax expense or benefit beyond what is assessed to our business segments in order to arrive at the consolidated effective tax rate. The Other category also includes unallocated corporate expenses that do not directly support
4 Capital One Financial Corporation (COF)
Table of Contents
the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance, such as certain restructuring charges and Discover integration expenses.
•Credit Card: Consists of our domestic consumer card lending, personal loans, domestic small business card lending, corporate card lending and international card businesses in the U.K. and Canada.
•Consumer Banking: Consists of our deposit gathering and lending activities for consumers and small businesses, national auto lending and services offered by the Global Payment Network.
•Commercial Banking: Consists of our lending, deposit gathering, capital markets and treasury management services to commercial real estate and commercial and industrial customers. Our customers typically include companies with annual revenues between $20 million and $2 billion.
Business Developments
We regularly explore and evaluate opportunities to acquire financial products and services as well as financial assets, including credit card and other loan portfolios, and enter into strategic partnerships as part of our growth strategy. We also explore opportunities to acquire technology companies and related assets to improve our information technology infrastructure and to deliver on our digital strategy. We may issue equity or debt to fund our acquisitions. In addition, we regularly consider the potential disposition of certain of our assets, branches, partnership agreements or lines of business.
Discover Acquisition
On February 19, 2024, the Company entered into an agreement and plan of merger (the “Merger Agreement”), by and among Capital One, Discover, a Delaware corporation and Vega Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”). On May 18, 2025, the Company closed the acquisition of Discover, pursuant to which (i) Merger Sub merged with and into Discover, with Discover as the surviving entity in the merger (the “Merger”); (ii) immediately following the Merger, Discover, as the surviving entity, merged with and into Capital One, with Capital One as the surviving entity in the second-step merger (the “Second Step Merger”); and (iii) immediately following the Second Step Merger, Discover Bank, a Delaware-chartered and wholly owned subsidiary of Discover, merged with and into CONA, with CONA as the surviving entity in the merger (the “CONA Bank Merger,” and collectively with the Merger and Second Step Merger, the “Transaction” or “Discover acquisition”).
For additional information on the Transaction, see “Part II—Item 8. Financial Statements and Supplementary Data—Note 2—Business Combinations and Discontinued Operations” in our 2025 Form 10-K.
Brex Acquisition
On April 7, 2026, the Company completed its previously announced acquisition of Brex Inc., a Delaware corporation (“Brex” and such acquisition, the “Brex acquisition”), pursuant to the terms of an Agreement and Plan of Merger and Reorganization, dated as of January 22, 2026 with Brex and certain other parties thereto. Brex offers businesses solutions to issue corporate cards, automate expense management and make secure, real-time payments. The Brex acquisition enhances the Company’s offerings in the business payments marketplace. The total consideration paid to Brex shareholders for the acquisition was approximately $4.5 billion and included $2.6 billion of cash consideration and 10.6 million shares of common stock, par value $0.01 per share, of the Company with a fair value of $1.9 billion. The consideration is also subject to customary post-closing adjustments. Immediately following the completion of the Brex acquisition, the Company paid off Brex’s outstanding debt of $1.1 billion.
5 Capital One Financial Corporation (COF)
Table of Contents
SELECTED FINANCIAL DATA
The following table presents selected consolidated financial data and performance from our results of operations for the second quarter and first six months of 2026 and 2025 and selected comparative balance sheet data as of June 30, 2026 and December 31, 2025. We also provide selected key metrics we use in evaluating our performance, including certain metrics that are computed using non-GAAP measures. We consider these metrics to be key financial measures that management uses in assessing our operating performance, capital adequacy and the level of returns generated. We believe these non-GAAP metrics provide useful insight to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.
Table 1: Consolidated Financial Highlights
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions, except per share data and as noted) 2026 2025 Change 2026 2025 Change
Income statement
Net interest income $ 12,374 $ 9,995 24% $ 24,519 $ 18,008 36%
Non-interest income 3,476 2,497 39 6,562 4,484 46
Total net revenue 15,850 12,492 27 31,081 22,492 38
Provision for credit losses 2,989 11,430 (74) 7,057 13,799 (49)
Non-interest expense:
Marketing 1,661 1,345 23 3,158 2,547 24
Operating expense 7,382 5,646 31 14,349 10,346 39
Total non-interest expense 9,043 6,991 29 17,507 12,893 36
Income (loss) from continuing operations before income taxes 3,818 (5,929) ** 6,517 (4,200) **
Income tax provision (benefit) 798 (1,666) ** 1,316 (1,341) **
Income (loss) from continuing operations, net of tax 3,020 (4,263) ** 5,201 (2,859) **
Income (loss) from discontinued operations, net of tax — (14) ** (7) (14) (50)
Net income (loss) 3,020 (4,277) ** 5,194 (2,873) **
Dividends and undistributed earnings allocated to participating securities (28) (4) ** (48) (9) **
Preferred stock dividends (57) (65) (12) (130) (122) 7
Discount on redeemed preferred stock — 6 ** — 6 **
Net income (loss) available to common stockholders $ 2,935 $ (4,340) ** $ 5,016 $ (2,998) **
Common share statistics
Basic earnings per common share:
Net income (loss) from continuing operations $ 4.73 $ (8.55) ** $ 8.08 $ (6.71) **
Income (loss) from discontinued operations — (0.03) ** (0.01) (0.03) (67)%
Net income (loss) per basic common share $ 4.73 $ (8.58) ** $ 8.07 $ (6.74) **
Diluted earnings per common share:
Net income (loss) from continuing operations $ 4.73 $ (8.55) ** $ 8.08 $ (6.71) **
Income (loss) from discontinued operations — (0.03) ** (0.01) (0.03) (67)%
Net income (loss) per diluted common share $ 4.73 $ (8.58) ** $ 8.07 $ (6.74) **
Weighted-average common shares outstanding (in millions):
Basic 620.5 505.6 23% 621.5 444.7 40%
Diluted 621.1 505.6 23 622.3 444.7 40
Common shares outstanding (period-end, in millions) 613.5 639.5 (4) 613.5 639.5 (4)
6 Capital One Financial Corporation (COF)
Table of Contents
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions, except per share data and as noted) 2026 2025 Change 2026 2025 Change
Dividends declared and paid per common share $ 0.80 $ 0.60 33% $ 1.60 $ 1.20 33%
Tangible book value per common share (period-end)(1) 105.21 99.35 6 105.21 99.35 6
Balance sheet (average balances)
Loans held for investment $ 450,679 $ 378,157 19% $ 448,469 $ 350,425 28%
Interest-earning assets 617,583 524,929 18 617,378 494,022 25
Total assets 682,079 572,446 19 679,050 532,354 28
Interest-bearing deposits 458,130 387,139 18 455,060 362,626 25
Total deposits 486,791 414,568 17 483,393 389,462 24
Borrowings 49,092 46,601 5 50,710 45,531 11
Common equity 109,111 81,563 34 109,130 69,546 57
Total stockholders’ equity 114,518 86,918 32 114,537 74,647 53
Selected performance metrics
Purchase volume $ 253,750 $ 201,453 26% $ 474,290 $ 359,401 32 %
Global Payment Network volume 189,612 74,014 156 363,944 74,014 **
Total net revenue margin(2) 10.27% 9.52% 75 bps 10.07% 9.11% 96 bps
Net interest margin 8.01 7.62 39 7.94 7.29 65
Return on average assets(3) 1.77 (2.98) 475 1.53 (1.07) 260
Return on average tangible assets(4) 1.89 (3.14) 503 1.63 (1.12) 275
Return on average common equity(5) 10.76 (21.22) 3,198 9.21 (8.58) 1,779
Return on average tangible common equity(6) 18.04 (32.99) 5,103 15.05 (12.60) 2,765
Equity-to-assets ratio(7) 16.79 15.18 161 16.87 14.02 285
Efficiency ratio(8) 57.05 55.96 109 56.33 57.32 (99)
Operating efficiency ratio(9) 46.57 45.20 137 46.17 46.00 17
Effective income tax rate from continuing operations 20.9 28.1 (720) 20.2 31.9 (1,170)
Net charge-offs $ 3,642 $ 3,060 19% $ 7,489 $ 5,796 29%
Net charge-off rate 3.23 % 3.24 % (1)bps 3.34 % 3.31 % 3 bps
(Dollars in millions, except as noted) June 30, 2026 December 31, 2025 Change
Balance sheet (period-end)
Loans held for investment $ 457,168 $ 453,622 1%
Interest-earning assets 610,913 613,750 —
Total assets 673,835 669,009 1
Interest-bearing deposits 456,464 448,386 2
Total deposits 484,257 475,771 2
Borrowings 45,371 51,000 (11)
Common equity 108,386 108,209 —
Total stockholders’ equity 113,793 113,616 —
Credit quality metrics
Allowance for credit losses $ 22,966 $ 23,409 (2)%
Allowance coverage ratio 5.02 % 5.16 % (14)bps
30+ day performing delinquency rate 2.91 3.41 (50)
30+ day delinquency rate 3.13 3.59 (46)
7 Capital One Financial Corporation (COF)
Table of Contents
(Dollars in millions, except as noted) June 30, 2026 December 31, 2025 Change
Capital ratios
Common equity Tier 1 capital(10) 13.7 % 14.3 % (60)bps
Tier 1 capital(10) 14.8 15.3 (50)
Total capital(10) 16.6 17.2 (60)
Tier 1 leverage(10) 11.8 12.5 (70)
Tangible common equity (“TCE”)(11) 10.2 10.7 (50)
Supplementary leverage(10) 10.1 10.6 (50)
Other
Employees (period-end, in thousands) 78.4 76.3 3%
__________
(1)Tangible book value per common share is a non-GAAP measure calculated based on TCE divided by common shares outstanding. See “Supplemental Table—Table A—Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.
(2)Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period.
(3)Return on average assets is calculated based on annualized net income (loss) less annualized income (loss) from discontinued operations, net of tax, for the period divided by average total assets for the period.
(4)Return on average tangible assets is a non-GAAP measure calculated based on annualized net income (loss) less annualized income (loss) from discontinued operations, net of tax, for the period divided by average tangible assets for the period. See “Supplemental Table—Table A—Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.
(5)Return on average common equity is calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies.
(6)Return on average TCE is a non-GAAP measure calculated based on annualized net income (loss) available to common stockholders less annualized income (loss) from discontinued operations, net of tax, for the period, divided by average TCE. See “Supplemental Table—Table A—Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures.
(7)Equity-to-assets ratio is calculated based on average stockholders’ equity for the period divided by average total assets for the period.
(8)Efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period.
(9)Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period.
(10)Capital ratios are calculated based on the Basel III standardized approach framework. See “Capital Management” for additional information.
(11)TCE ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See “Supplemental Table—Table A—Reconciliation of Non-GAAP Measures” for the calculation of this measure and reconciliation to the comparative U.S. GAAP measure.
** Not meaningful.
8 Capital One Financial Corporation (COF)
Table of Contents
EXECUTIVE SUMMARY
Financial Highlights
We reported net income of $3.0 billion ($4.73 per diluted common share) on total net revenue of $15.9 billion and net income of $5.2 billion ($8.07 per diluted common share) on total net revenue of $31.1 billion for the second quarter and first six months of 2026, respectively. In comparison, we reported net loss of $4.3 billion ($(8.58) per diluted common share) on total net revenue of $12.5 billion and net loss of $2.9 billion ($(6.74) per diluted common share) on total net revenue of $22.5 billion for the second quarter and first six months of 2025, respectively.
Our common equity Tier 1 (“CET1”) capital ratio as calculated under the Basel III standardized approach was 13.7% and 14.3% as of June 30, 2026 and December 31, 2025, respectively. See “Capital Management” for additional information.
In the second quarter of 2026, we declared and paid common stock dividends of $501 million and repurchased $2.7 billion of our common stock. During the first six months of 2026, we declared and paid common stock dividends of $1.0 billion and repurchased $5.2 billion of our common stock. See “Capital Management—Dividend Policy and Stock Purchases” for additional information.
Below are additional highlights of our performance in the second quarter and first six months of 2026. These highlights are based on a comparison between the results of the second quarter and first six months of 2026 and 2025, except as otherwise noted. Highlights related to changes in our financial condition and credit performance are based on June 30, 2026 compared to December 31, 2025. We provide a more detailed discussion of our financial performance in the sections following this “Executive Summary.”
Total Company Performance
•Earnings:
Our net income increased by $7.3 billion to $3.0 billion in the second quarter of 2026 compared to the second quarter of 2025 and increased by $8.1 billion to $5.2 billion in the first six months of 2026 compared to the first six months of 2025 primarily driven by:
◦Lower provision for credit losses primarily driven by the absence of the initial allowance for credit losses for loans acquired in the Discover acquisition.
◦Higher net interest income primarily driven by higher average credit card loan balances, largely due to the addition of Discover.
◦Higher non-interest income primarily driven by growth in our credit card loan portfolio, including the addition of Discover, as well as impacts from the reissuance of legacy Capital One customer debit cards onto the Global Payment Network.
These drivers were partially offset by:
◦Higher non-interest expense primarily driven by the addition of Discover and higher acquisition amortization expenses.
•Loans Held for Investment:
◦Loans held for investment increased by $3.5 billion to $457.2 billion as of June 30, 2026 compared to December 31, 2025 primarily driven by growth in our auto and commercial loan portfolios, partially offset by seasonal paydowns in our credit card loan portfolio.
◦Average loans held for investment increased by $72.5 billion to $450.7 billion in the second quarter of 2026 compared to the second quarter of 2025 and increased by $98.0 billion to $448.5 billion in the first six months of 2026 compared to the first six months of 2025 primarily driven by the addition of Discover.
9 Capital One Financial Corporation (COF)
Table of Contents
•Net Charge-Off and Delinquency Metrics:
◦Our net charge-off rate decreased by 1 basis point (“bps”) to 3.23% in the second quarter of 2026 compared to the second quarter of 2025 and increased by 3 bps to 3.34% in the first six months of 2026 compared to the first six months of 2025.
◦Our 30+ day delinquency rate decreased by 46 bps to 3.13% as of June 30, 2026 from December 31, 2025.
•Allowance for Credit Losses: Our allowance for credit losses decreased by $443 million to $23.0 billion as of June 30, 2026 compared to December 31, 2025 primarily driven by an allowance release in our Domestic Card loan portfolio, partially offset by a build in our auto loan portfolio. Our allowance coverage ratio decreased by 14 bps to 5.02% as of June 30, 2026 compared to December 31, 2025 primarily driven by favorable credit performance in our Domestic Card loan portfolio.
CONSOLIDATED RESULTS OF OPERATIONS
The section below provides a comparative discussion of our consolidated financial performance for the second quarter and first six months of 2026 and 2025. We provide a discussion of our business segment results in the following section, “Business Segment Financial Performance.” This section should be read together with our “Executive Summary,” where we discuss trends and other factors that we expect will affect our future results of operations.
Net Interest Income
Net interest income represents the difference between interest income, including certain fees, earned on our interest-earning assets and the interest expense incurred on our interest-bearing liabilities. Our interest-earning assets include loans, investment securities and other interest-earning assets, while our interest-bearing liabilities include interest-bearing deposits, securitized debt obligations, senior and subordinated notes, other borrowings and other interest-bearing liabilities. Generally, we include in interest income any past due fees, net of reversals, on loans that we deem collectible. Our net interest margin represents the difference between the yield on our interest-earning assets and the cost of our interest-bearing liabilities, including the notional impact of non-interest-bearing funding and excluding discontinued operations. We expect net interest income and our net interest margin to fluctuate based on changes in interest rates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities. Loans, other assets and liabilities associated with discontinued operations, and their related income and expense, are excluded from the net interest margin calculation.
10 Capital One Financial Corporation (COF)
Table of Contents
Table 2 below presents the average outstanding balance, interest income earned, interest expense incurred and average yield for the second quarter and first six months of 2026 and 2025 for each major category of our interest-earning assets and interest-bearing liabilities. Nonperforming loans are included in the average loan balances below.
Table 2: Average Balances, Net Interest Income and Net Interest Margin
Three Months Ended June 30,
2026 2025
(Dollars in millions) Average Balance Interest Income/ Expense Average Yield/Rate(1) Average Balance Interest Income/ Expense Average Yield/Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Credit card $ 271,197 $ 11,670 17.21 % $ 209,693 $ 9,407 17.94 %
Consumer banking 88,583 2,121 9.57 80,095 1,861 9.30
Commercial banking(3) 91,082 1,308 5.75 88,749 1,421 6.40
Other(4) — (188) ** — (240) **
Total loans, including loans held for sale 450,862 14,911 13.23 378,537 12,449 13.15
Investment securities 99,339 850 3.42 93,024 784 3.37
Cash equivalents and other interest-earning assets 67,382 624 3.70 53,368 595 4.46
Total interest-earning assets $ 617,583 $ 16,385 10.61% $ 524,929 $ 13,828 10.54%
Cash and due from banks 4,771 4,694
Allowance for credit losses (23,643) (19,902)
Premises and equipment, net 6,294 5,099
Other assets 77,074 53,689
Assets of discontinued operations — 3,937
Total assets $ 682,079 $ 572,446
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Interest-bearing deposits $ 458,130 $ 3,338 2.91 % $ 387,139 $ 3,120 3.22 %
Securitized debt obligations 10,190 117 4.59 13,043 164 5.06
Senior and subordinated notes 37,498 535 5.70 32,872 535 6.51
Other borrowings and interest-bearing liabilities(5) 3,838 21 2.30 2,872 14 1.85
Total interest-bearing liabilities $ 509,656 $ 4,011 3.15% $ 435,926 $ 3,833 3.52%
Non-interest-bearing deposits 28,661 27,429
Other liabilities 29,244 22,172
Liabilities of discontinued operations — 1
Total liabilities 567,561 485,528
Stockholders’ equity 114,518 86,918
Total liabilities and stockholders’ equity $ 682,079 $ 572,446
Net interest income/spread $ 12,374 7.46 $ 9,995 7.02
Impact of non-interest-bearing funding 0.55 0.60
Net interest margin 8.01% 7.62 %
11 Capital One Financial Corporation (COF)
Table of Contents
Six Months Ended June 30,
2026 2025
(Dollars in millions) Average Balance Interest Income/ Expense Average Yield/Rate(1) Average Balance Interest Income/ Expense Average Yield/Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Credit card $ 271,086 $ 23,303 17.19 % $ 183,197 $ 16,655 18.18 %
Consumer banking 87,150 4,141 9.50 79,292 3,634 9.17
Commercial banking(3) 90,576 2,586 5.71 88,319 2,803 6.35
Other(4) — (384) ** — (486) **
Total loans, including loans held for sale 448,812 29,646 13.21 350,808 22,606 12.89
Investment securities 98,575 1,682 3.41 92,843 1,554 3.35
Cash equivalents and other interest-earning assets 69,991 1,288 3.68 50,371 1,086 4.31
Total interest-earning assets 617,378 32,616 10.57 494,022 25,246 10.22
Cash and due from banks 5,016 4,384
Allowance for credit losses (23,529) (18,087)
Premises and equipment, net 5,981 4,818
Other assets 74,204 45,236
Assets of discontinued operations — 1,981
Total assets $ 679,050 $ 532,354
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Interest-bearing deposits $ 455,060 $ 6,725 2.96 % $ 362,626 $ 5,835 3.22 %
Securitized debt obligations 11,326 258 4.55 13,385 340 5.09
Senior and subordinated notes 37,671 1,067 5.66 31,609 1,040 6.58
Other borrowings and interest-bearing liabilities(5) 4,037 47 2.37 2,593 23 1.73
Total interest-bearing liabilities 508,094 8,097 3.19 410,213 7,238 3.53
Non-interest-bearing deposits 28,333 26,836
Other liabilities 28,089 20,657
Liabilities of discontinued operations (3) 1
Total liabilities 564,513 457,707
Stockholders’ equity 114,537 74,647
Total liabilities and stockholders’ equity $ 679,050 $ 532,354
Net interest income/spread $ 24,519 7.38 $ 18,008 6.69
Impact of non-interest-bearing funding 0.56 0.60
Net interest margin 7.94 % 7.29 %
__________
(1)Average yield is calculated based on annualized interest income for the period divided by average loans during the period. Average yield is calculated using whole dollar values for average balances and interest income/expense.
(2)Past due fees, net of reversals, included in interest income totaled approximately $677 million and $1.3 billion in the second quarter and first six months of 2026, respectively, and $634 million and $1.2 billion in the second quarter and first six months of 2025, respectively.
(3)Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using a blended federal and state statutory tax rate, with offsetting reductions to the Other category. Taxable-equivalent adjustments included in the interest income and yield computations for our commercial loans totaled approximately $20 million and $40 million in the second quarter and first six months of 2026, respectively, and $20 million and $40 million in the second quarter and first six months of 2025, respectively, with corresponding reductions to the Other category.
(4)Interest income/expense in the Other category represents the impact of hedge accounting on our loan portfolios and the offsetting reduction of the taxable-equivalent adjustments of our commercial loans as described above.
(5)Includes amounts related to entities that provide capital to low-income and rural communities of $2.4 billion and $2.3 billion in the second quarter and first six months of 2026, respectively, and $2.2 billion and $2.1 billion in the second quarter and first six months of 2025, respectively. Related interest expense was $9 million and $17 million for the second quarter and first six months of 2026, respectively, and $8 million and $15 million for the second quarter and first six months of 2025, respectively.
** Not meaningful.
12 Capital One Financial Corporation (COF)
Table of Contents
Net interest income increased by $2.4 billion to $12.4 billion in the second quarter of 2026 compared to the second quarter of 2025 and increased by $6.5 billion to $24.5 billion in the first six months of 2026 compared to the first six months of 2025 primarily driven by higher average credit card loan balances, largely due to the addition of Discover.
Net interest margin increased by 39 bps to 8.01% in the second quarter of 2026 compared to the second quarter of 2025 and increased by 65 bps to 7.94% in the first six months of 2026 compared to the first six months of 2025 primarily driven by higher average credit card loan balances, largely due to the addition of Discover.
Our total company cumulative interest-bearing deposit beta increased to 37% as of June 30, 2026, from 23% as of December 31, 2025. We define cumulative deposit beta as the ratio of changes in the average rate paid on our average interest-bearing deposits to changes in the upper bound of the federal funds rate during the falling interest rate cycle.
Table 3 displays the change in our net interest income between periods and the extent to which the variance is attributable to:
•Changes in the volume of our interest-earning assets and interest-bearing liabilities; or
•Changes in the interest rates related to these assets and liabilities.
Table 3: Rate/Volume Analysis of Net Interest Income(1)
Three Months Ended June 30, Six Months Ended June 30,
2026 vs. 2025 2026 vs. 2025
(Dollars in millions) Total Variance Volume Rate Total Variance Volume Rate
Interest income:
Loans:
Credit card $ 2,263 $ 2,646 $ (383) $ 6,648 $ 7,555 $ (907)
Consumer banking 260 202 58 507 370 137
Commercial banking(2) (113) 34 (147) (217) 64 (281)
Other(3) 52 — 52 102 — 102
Total loans, including loans held for sale 2,462 2,882 (420) 7,040 7,989 (949)
Investment securities 66 54 12 128 97 31
Cash equivalents and other interest-earning assets 29 130 (101) 202 361 (159)
Total interest income 2,557 3,066 (509) 7,370 8,447 (1,077)
Interest expense:
Interest-bearing deposits 218 517 (299) 890 1,366 (476)
Securitized debt obligations (47) (33) (14) (82) (49) (33)
Senior and subordinated notes — 66 (66) 27 172 (145)
Other borrowings and liabilities 7 5 2 24 15 9
Total interest expense 178 555 (377) 859 1,504 (645)
Net interest income $ 2,379 $ 2,511 $ (132) $ 6,511 $ 6,943 $ (432)
__________
(1)We calculate the change in interest income and interest expense separately for each item. The portion of interest income or interest expense attributable to both volume and rate is allocated proportionately when the calculation results in a positive value. When the portion of interest income or interest expense attributable to both volume and rate results in a negative value, the total amount is allocated to volume or rate, depending on which amount is positive. The portion of interest income or interest expense attributable to both volume and rate is calculated using rounded dollars in millions for average balances and interest income/expense.
(2)Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using a blended federal and state statutory tax rate, with offsetting reductions to the Other category.
(3)Interest income/expense in the Other category represents the impact of hedge accounting on our loan portfolios and the offsetting reduction of the taxable-equivalent adjustments of our commercial loans as described above.
13 Capital One Financial Corporation (COF)
Table of Contents
Non-Interest Income
Table 4 displays the components of non-interest income for the second quarter and first six months of 2026 and 2025.
Table 4: Non-Interest Income
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions) 2026 2025 2026 2025
Discount and interchange fees, net $ 2,256 $ 1,478 $ 4,220 $ 2,701
Service charges and other customer-related fees 808 658 1,617 1,167
Other(1)(2) 412 361 725 616
Total non-interest income $ 3,476 $ 2,497 $ 6,562 $ 4,484
__________
(1)Primarily consists of revenue from Capital One Shopping, treasury income and auto industry services.
(2)Includes gains of $94 million and $76 million on deferred compensation plan investments in the second quarter and first six months of 2026, respectively, and gains of $57 million and $41 million on deferred compensation plan investments in the second quarter and first six months of 2025, respectively. These amounts have corresponding offsets in non-interest expense.
Non-interest income increased by $979 million to $3.5 billion in the second quarter of 2026 compared to the second quarter of 2025 and increased by $2.1 billion to $6.6 billion in the first six months of 2026 compared to the first six months of 2025 primarily driven by growth in our credit card loan portfolio, including the addition of Discover, as well as impacts from the reissuance of legacy Capital One customer debit cards onto the Global Payment Network.
Provision for Credit Losses
Our provision for credit losses in each period is driven by net charge-offs, changes to the allowance for credit losses and changes to the reserve for unfunded lending commitments. Our provision for credit losses decreased by $8.4 billion to $3.0 billion in the second quarter of 2026 and decreased by $6.7 billion to $7.1 billion in the first six months of 2026 primarily driven by the absence of the initial allowance for credit losses for loans acquired in the Discover acquisition.
We provide additional information on the provision for credit losses and changes in the allowance for credit losses within “Credit Risk Profile” and “Part I—Item 1. Financial Statements—Note 5—Allowance for Credit Losses and Reserve for Unfunded Lending Commitments.” For information on the allowance methodology, see “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2025 Form 10-K.
14 Capital One Financial Corporation (COF)
Table of Contents
Non-Interest Expense
Table 5 displays the components of non-interest expense for the second quarter and first six months of 2026 and 2025.
Table 5: Non-Interest Expense
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions) 2026 2025 2026 2025
Operating expense:
Salaries and associate benefits(1) $ 3,769 $ 2,999 $ 7,440 $ 5,545
Occupancy and equipment 969 737 1,836 1,352
Professional services 667 653 1,252 1,090
Communications and data processing 489 413 985 812
Amortization of intangibles 507 271 999 287
Other non-interest expense:
Bankcard, regulatory and other fee assessments 191 58 373 123
Collections 252 170 496 278
Other 538 345 968 859
Total other non-interest expense 981 573 1,837 1,260
Total operating expense $ 7,382 $ 5,646 $ 14,349 $ 10,346
Marketing 1,661 1,345 3,158 2,547
Total non-interest expense $ 9,043 $ 6,991 $ 17,507 $ 12,893
_________
(1)Includes expenses of $94 million and $76 million related to our deferred compensation plan investments for the second quarter and first six months of 2026, respectively, and expenses of $57 million and $41 million related to our deferred compensation plan investments for the second quarter and first six months of 2025, respectively. These amounts have corresponding offsets from investments in other non-interest income.
Non-interest expense increased by $2.1 billion to $9.0 billion in the second quarter of 2026 compared to the second quarter of 2025 and increased by $4.6 billion to $17.5 billion in the first six months of 2026 compared to the first six months of 2025 primarily driven by the addition of Discover and higher acquisition amortization expenses.
Integration Expenses
Discover integration expenses remained substantially flat at $298 million in the second quarter of 2026 compared to the second quarter of 2025. Discover integration expenses increased by $304 million to $713 million in the first six months of 2026 compared to the first six months of 2025 primarily driven by higher salaries and associate benefits, which are included within operating expense in our consolidated statements of income and within the Other category for business segment results. Since the announcement of the Transaction in the first quarter of 2024, we have incurred $2.1 billion of Discover integration expenses as of June 30, 2026.
In the second quarter and first six months of 2026, we incurred $96 million of integration expenses related to the Brex acquisition, primarily driven by salaries and associate benefits and professional services, which are included within operating expense in our consolidated statements of income and within Domestic Card for business segment results.
15 Capital One Financial Corporation (COF)
Table of Contents
Income Taxes
We recorded an income tax expense of $798 million (20.9% effective income tax rate) and $1.3 billion (20.2% effective income tax rate) in the second quarter and first six months of 2026, respectively, compared to an income tax benefit of $1.7 billion (28.1% effective income tax rate) and $1.3 billion (31.9% effective income tax rate) in the second quarter and first six months of 2025, respectively. The difference in our tax provision and effective tax rate was primarily driven by the $8.8 billion initial allowance for credit losses for loans acquired in the Discover acquisition in the second quarter of 2025.
Our effective tax rate on income from continuing operations varies between periods due to the impact of changes in pre-tax income and changes in tax credits, tax-exempt income and non-deductible expenses relative to our pre-tax earnings.
We provide additional information on items affecting our income taxes and effective tax rate in “Part II—Item 8. Financial Statements and Supplementary Data—Note 16—Income Taxes” in our 2025 Form 10-K.
CONSOLIDATED BALANCE SHEETS ANALYSIS
Total assets increased by $4.8 billion to $673.8 billion as of June 30, 2026 from December 31, 2025 primarily driven by growth in loans held for investment.
Total liabilities increased by $4.6 billion to $560.0 billion as of June 30, 2026 from December 31, 2025 primarily driven by continued deposit growth from our national banking strategy, partially offset by securitized debt maturities.
Stockholders’ equity remained substantially flat at $113.8 billion as of June 30, 2026 from December 31, 2025 primarily driven by net income, partially offset by net purchases of treasury stock.
The following is a discussion of material changes in the major components of our assets and liabilities during the first six months of 2026. Period-end balance sheet amounts may vary from average balance sheet amounts due to the timing of normal balance sheet management activities that are intended to support our capital and liquidity positions, our market risk profile and the needs of our customers.
Investment Securities
Our investment securities portfolio consists of the following debt securities: U.S. government-sponsored enterprise or agency (“GSE” or “Agency”) and non-agency residential mortgage-backed securities (“RMBS”), agency commercial mortgage-backed securities (“CMBS”), U.S. Treasury securities and other debt securities. Agency securities include securities guaranteed by the Government National Mortgage Association (“Ginnie Mae”) and securities issued by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). The carrying value of our investments in Agency and U.S. Treasury securities represented 96% and 97% of our total investment securities portfolio as of June 30, 2026 and December 31, 2025, respectively.
The carrying value of our investment securities portfolio increased by $1.7 billion to $92.8 billion as of June 30, 2026 from December 31, 2025 primarily driven by net purchases.
16 Capital One Financial Corporation (COF)
Table of Contents
Loans Held for Investment
Total loans held for investment consists of both unsecuritized loans and loans held in our consolidated trusts. Table 6 summarizes by segment the carrying value of our loans held for investment, the allowance for credit losses and net loan balance as of June 30, 2026 and December 31, 2025.
Table 6: Loans Held for Investment
June 30, 2026 December 31, 2025
(Dollars in millions) Loans Allowance Net Loans Loans Allowance Net Loans
Credit Card $ 275,408 $ (19,329) $ 256,079 $ 279,570 $ (20,066) $ 259,504
Consumer Banking 90,467 (2,162) 88,305 84,790 (1,892) 82,898
Commercial Banking 91,293 (1,475) 89,818 89,262 (1,451) 87,811
Total $ 457,168 $ (22,966) $ 434,202 $ 453,622 $ (23,409) $ 430,213
Loans held for investment increased by $3.5 billion to $457.2 billion as of June 30, 2026 compared to December 31, 2025 primarily driven by growth in our auto and commercial loan portfolios, partially offset by seasonal paydowns in our credit card loan portfolio.
We provide additional information on the composition of our loan portfolio and credit quality in “Credit Risk Profile,” “Consolidated Results of Operations” and “Part I—Item 1. Financial Statements—Note 4—Loans.”
Funding Sources
Our funding sources include deposits, senior and subordinated notes, securitized debt obligations, federal funds purchased, securities loaned or sold under agreements to repurchase and advances from the Federal Home Loan Bank (“FHLB”) secured by certain portions of our loan and securities portfolios. Insured deposits in our Consumer Banking business represent our primary source of funding, as they are a relatively stable and low cost source of funding.
Table 7 provides the composition of our primary sources of funding as of June 30, 2026 and December 31, 2025.
Table 7: Funding Sources Composition
June 30, 2026 December 31, 2025
(Dollars in millions) Amount % of Total Amount % of Total
Deposits:
Consumer Banking $ 435,221 82 % $ 423,932 80 %
Commercial Banking 30,841 6 31,250 6
Other(1) 18,195 3 20,589 4
Total deposits 484,257 91 475,771 90
Securitized debt obligations 8,502 2 12,853 3
Other debt 36,869 7 38,147 7
Total funding sources $ 529,628 100 % $ 526,771 100 %
__________
(1)Includes brokered deposits of $16.7 billion and $19.2 billion as of June 30, 2026 and December 31, 2025, respectively.
Total deposits increased by $8.5 billion to $484.3 billion as of June 30, 2026 from December 31, 2025 primarily driven by continued growth from our national banking strategy.
As of June 30, 2026 and December 31, 2025, we held $72.3 billion and $71.9 billion, respectively, of estimated uninsured deposits. These amounts were primarily comprised of checking and savings deposits. These estimated uninsured deposits comprised approximately 15% of our total deposits as of both June 30, 2026 and December 31, 2025. We estimate our uninsured amounts based on methodologies and assumptions used for our “Consolidated Reports of Condition and Income” Federal Financial Institutions Examination Council (“FFIEC”) 031 filed with the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”), hereafter collectively referred to as the “Federal Banking Agencies,” adjusted to exclude intercompany
17 Capital One Financial Corporation (COF)
Table of Contents
balances and cash collateral received on certain derivative contracts which are not presented within deposits on our consolidated balance sheet.
Securitized debt obligations decreased by $4.4 billion to $8.5 billion as of June 30, 2026 from December 31, 2025 primarily driven by net maturities and paydowns.
Other debt decreased by $1.3 billion to $36.9 billion as of June 30, 2026 from December 31, 2025 primarily driven by net maturities of subordinated debt and FHLB advances, partially offset by net issuances of unsecured senior debt.
We provide additional information on our funding sources in “Liquidity Risk Profile” and “Part I—Item 1. Financial Statements—Note 8—Deposits and Borrowings.”
OFF-BALANCE SHEET ARRANGEMENTS
In the ordinary course of business, we engage in certain activities that are not reflected on our consolidated balance sheets, generally referred to as off-balance sheet arrangements. These activities typically involve transactions with unconsolidated variable interest entities (“VIEs”) as well as other arrangements, such as letters of credit, loan commitments and guarantees, to meet the financing needs of our customers and support their ongoing operations. We provide additional information regarding these types of activities in “Part I—Item 1. Financial Statements—Note 6—Variable Interest Entities and Securitizations” and “Part I—Item 1. Financial Statements—Note 14—Commitments, Contingencies, Guarantees and Others.”
18 Capital One Financial Corporation (COF)
Table of Contents
BUSINESS SEGMENT FINANCIAL PERFORMANCE
Our principal operations are organized for management reporting purposes into three major business segments, which are defined primarily based on the products and services provided or the types of customer served: Credit Card, Consumer Banking and Commercial Banking. The operations of acquired businesses have been integrated into or managed as a part of our existing business segments. Certain activities that are not part of a business segment are included in the Other category, such as the management of our corporate investment portfolio and asset/liability positions performed by our centralized Corporate Treasury group and any residual tax expense or benefit beyond what is assessed to our business segments in order to arrive at the consolidated effective tax rate. The Other category also includes unallocated corporate expenses that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance, such as certain restructuring charges and Discover integration expenses.
The results of our individual businesses, which we report on a continuing operations basis, reflect the manner in which management evaluates performance and makes decisions about funding our operations and allocating resources. We may periodically change our business segments or reclassify business segment results based on modifications to our management reporting methodologies and changes in organizational alignment. Our business segment results are intended to reflect each segment as if it were a stand-alone business. We use an internal management and reporting process to derive our business segment results. Our internal management and reporting process employs various allocation methodologies, including funds transfer pricing, to assign certain balance sheet assets, deposits and other liabilities and their related revenues and expenses directly or indirectly attributable to each business. Total interest income and non-interest income are directly attributable to the segment in which they are reported. The net interest income of each segment reflects the results of our funds transfer pricing process, which is primarily based on a matched funding concept that takes into consideration market interest rates. Our funds transfer pricing process is managed by our centralized Corporate Treasury group and provides a funds credit for sources of funds, such as deposits generated by our Consumer Banking and Commercial Banking businesses, and a charge for the use of funds by each business. The allocation is unique to each business and is based on the composition of assets and liabilities. The funds transfer pricing process considers the interest rate and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically, the methodology and assumptions utilized in the funds transfer pricing process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the businesses. We regularly assess the assumptions, methodologies and reporting classifications used for segment reporting, which may result in the implementation of refinements or changes in future periods. We provide additional information on the allocation methodologies used to derive our business segment results in “Part II—Item 8. Financial Statements and Supplementary Data—Note 18—Business Segments and Revenue from Contracts with Customers” in our 2025 Form 10-K.
We refer to the business segment results derived from our internal management accounting and reporting process as our “managed” presentation, which differs in some cases from our reported results prepared based on U.S. GAAP. There is no comprehensive authoritative body of guidance for management accounting equivalent to U.S. GAAP; therefore, the managed presentation of our business segment results may not be comparable to similar information provided by other financial services companies. In addition, our individual business segment results should not be used as a substitute for comparable results determined in accordance with U.S. GAAP.
We summarize our business segment results for the second quarter and first six months of 2026 and 2025 and provide a comparative discussion of these results, as well as changes in our financial condition and credit performance metrics as of June 30, 2026 compared to December 31, 2025. We provide a reconciliation of our total business segment results to our reported consolidated results in “Part I—Item 1. Financial Statements—Note 13—Business Segments and Revenue from Contracts with Customers.”
19 Capital One Financial Corporation (COF)
Table of Contents
Business Segment Financial Performance
Table 8 summarizes our business segment results, which we report based on total net revenue (loss) and net income (loss) from continuing operations, for the second quarter and first six months of 2026 and 2025.
Table 8: Business Segment Results(1)
Three Months Ended June 30,
2026 2025
Total Net Revenue (Loss)(2) Net Income(Loss)(3) Total Net Revenue (Loss)(2) Net Income(Loss)(3)
(Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
Credit Card $ 11,765 74% $ 2,411 80% $ 9,095 73% $ (4,917) 116%
Consumer Banking 3,209 20 486 16 2,556 20 450 (11)
Commercial Banking(4) 850 6 239 8 937 8 280 (7)
Other(4) 26 — (116) (4) (96) (1) (76) 2
Total $ 15,850 100% $ 3,020 100% $ 12,492 100% $ (4,263) 100%
Six Months Ended June 30,
2026 2025
Total Net Revenue (Loss)(2) Net Income(Loss)(3) Total Net Revenue (Loss)(2) Net Income(Loss)(3)
(Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
Credit Card $ 23,154 74% $ 4,280 82% $ 16,260 72% $ (3,698) 129%
Consumer Banking 6,121 20 784 15 4,682 21 636 (22)
Commercial Banking(4) 1,759 6 445 9 1,821 8 475 (17)
Other(4) 47 — (308) (6) (271) (1) (272) 10
Total $ 31,081 100% $ 5,201 100% $ 22,492 100% $ (2,859) 100%
__________
(1)Effective in the second quarter of 2026, Domestic Card results include Brex and our legacy corporate card product.
(2)Total net revenue (loss) consists of net interest income and non-interest income.
(3)Net income (loss) for our business segments and the Other category is based on income (loss) from continuing operations, net of tax.
(4)Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using a blended federal and state statutory tax rate, with offsetting reductions to the Other category.
20 Capital One Financial Corporation (COF)
Table of Contents
Credit Card Business
The primary sources of revenue for our Credit Card business are net interest income, net discount and interchange income and fees collected from customers. Expenses primarily consist of operating costs, the provision for credit losses and marketing expenses.
Our Credit Card business generated income from continuing operations, net of tax, of $2.4 billion and $4.3 billion in the second quarter and first six months of 2026, respectively, compared to loss from continuing operations, net of tax, of $4.9 billion and $3.7 billion in the second quarter and first six months of 2025, respectively.
Table 9 summarizes the financial results of our Credit Card business and displays selected key metrics for the periods indicated.
Table 9: Credit Card Business Results
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions, except as noted) 2026 2025 Change 2026 2025 Change
Selected income statement data:
Net interest income $ 9,252 $ 7,293 27% $ 18,488 $ 12,947 43%
Non-interest income 2,513 1,802 39 4,666 3,313 41
Total net revenue(1) 11,765 9,095 29 23,154 16,260 42
Provision for credit losses 2,474 11,098 (78) 5,885 13,024 (55)
Non-interest expense 6,098 4,447 37% 11,599 8,085 43%
Income (loss) from continuing operations before income taxes 3,193 (6,450) ** 5,670 (4,849) **
Income tax provision (benefit) 782 (1,533) ** 1,390 (1,151) **
Income (loss) from continuing operations, net of tax $ 2,411 $ (4,917) ** $ 4,280 $ (3,698) **
Selected performance metrics:
Average loans held for investment:
Domestic credit card $ 254,625 $ 197,808 29% $ 254,332 $ 173,858 46%
Personal loans 8,866 4,778 86 9,087 2,402 **
International card businesses 7,706 7,107 8 7,667 6,938 11
Total credit card $ 271,197 $ 209,693 29 $ 271,086 $ 183,198 48
Average yield on loans(2) 17.21 % 17.94 % (73)bps 17.19 % 18.18 % (99)bps
Total net revenue margin(3) 17.35 17.35 — 17.08 17.75 (67)
Net charge-offs $ 3,192 $ 2,728 17% $ 6,611 $ 5,127 29%
Net charge-off rate(4) 4.71 % 5.20 % (49)bps 4.88 % 5.60 % (72)bps
Purchase volume $ 253,750 $ 201,453 26% $ 474,290 $ 359,401 32%
(Dollars in millions, except as noted) June 30, 2026 December 31, 2025 Change
Selected period-end data:
Loans held for investment:
Domestic credit card $ 259,005 $ 262,403 (1) %
Personal loans 8,619 9,499 (9)
International card businesses 7,784 7,668 2
Total credit card $ 275,408 $ 279,570 (1)
30+ day performing delinquency rate 3.37 % 3.93 % (56) bps
30+ day delinquency rate 3.37 3.94 (57)
Nonperforming loan rate(5) 0.01 0.01 —
Allowance for credit losses $ 19,329 $ 20,066 (4) %
Allowance coverage ratio 7.02% 7.18 % (16) bps
__________
(1)We recognize finance charges and fee income on open-ended loans in accordance with the contractual provisions of the credit arrangements and charge off any uncollectible amounts. Total net revenue was reduced by $898 million and $1.9 billion in the second quarter and first six months of 2026
21 Capital One Financial Corporation (COF)
Table of Contents
respectively, compared to $785 million and $1.5 billion in the second quarter and first six months of 2025, respectively, for finance charges and fees charged off as uncollectible.
(2)Average yield is calculated based on annualized interest income for the period divided by average loans during the period and does not include any allocations, such as funds transfer pricing.
(3)Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans during the period.
(4)Charge-offs exclude $19.4 billion of Discover loans acquired in the second quarter of 2025 that were fully charged-off, with expected recoveries of $3.3 billion included as a benefit to the allowance for credit losses.
(5)Within our credit card loan portfolio, certain loans in our international card and personal loan businesses are classified as nonperforming. See “Nonperforming Loans and Other Nonperforming Assets” for additional information.
** Not meaningful.
Key factors affecting the results of our Credit Card business for the second quarter and first six months of 2026 compared to the second quarter and first six months of 2025, and changes in financial condition and credit performance between June 30, 2026 and December 31, 2025 include the following:
•Net Interest Income: Net interest income increased by $2.0 billion to $9.3 billion in the second quarter of 2026 and increased by $5.5 billion to $18.5 billion in the first six months of 2026 primarily driven by higher average loan balances, largely due to the addition of Discover.
•Non-Interest Income: Non-interest income increased by $711 million to $2.5 billion in the second quarter of 2026 and increased by $1.4 billion to $4.7 billion in the first six months of 2026 primarily driven by growth in our portfolio, including the addition of Discover.
•Provision for Credit Losses: Provision for credit losses decreased by $8.6 billion to $2.5 billion in the second quarter of 2026 and decreased by $7.1 billion to $5.9 billion in the first six months of 2026 primarily driven by the absence of the initial allowance for credit losses for loans acquired in the Discover acquisition.
•Non-Interest Expense: Non-interest expense increased by $1.7 billion to $6.1 billion in the second quarter of 2026 and increased by $3.5 billion to $11.6 billion in the first six months of 2026 primarily driven by growth in our portfolio, including the addition of Discover, and higher acquisition amortization expenses.
Loans Held for Investment:
•Period-end loans held for investment decreased by $4.2 billion to $275.4 billion as of June 30, 2026 from December 31, 2025 primarily driven by seasonal paydowns, partially offset by the Brex acquisition.
•Average loans held for investment increased by $61.5 billion to $271.2 billion in the second quarter of 2026 compared to the second quarter of 2025 and increased by $87.9 billion to $271.1 billion in the first six months of 2026 compared to the first six months of 2025 primarily driven by the addition of Discover.
Net Charge-Off and Delinquency Metrics:
•The net charge-off rate decreased by 49 bps to 4.71% in the second quarter of 2026 compared to the second quarter of 2025 and decreased by 72 bps to 4.88% in the first six months of 2026 compared to the first six months of 2025 primarily due to favorable observed credit performance.
•The 30+ day delinquency rate decreased by 57 bps to 3.37% as of June 30, 2026 from December 31, 2025.
22 Capital One Financial Corporation (COF)
Table of Contents
Domestic Card Business
The Domestic Card business generated income from continuing operations, net of tax, of $2.3 billion and $4.0 billion in the second quarter and first six months of 2026, respectively, compared to loss from continuing operations, net of tax, of $4.4 billion and $3.3 billion in the second quarter and first six months of 2025, respectively. In each of the second quarter and first six months of 2026 and 2025, the Domestic Card business accounted for greater than 90% of total net revenue of our Credit Card business.
Table 9.1 summarizes the financial results for our Domestic Card business and displays selected key metrics for the periods indicated.
Table 9.1: Domestic Card Business Results
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions, except as noted) 2026 2025 Change 2026 2025 Change
Selected income statement data:
Net interest income $ 8,643 $ 6,822 27% $ 17,261 $ 12,165 42%
Non-interest income 2,460 1,749 41 4,567 3,209 42
Total net revenue(1) 11,103 8,571 30 21,828 15,374 42
Provision for credit losses 2,292 10,200 (78) 5,528 12,056 (54)
Non-interest expense 5,771 4,192 38% 10,950 7,614 44%
Income (loss) from continuing operations before income taxes 3,040 (5,821) ** 5,350 (4,296) **
Income tax provision (benefit) 745 (1,385) ** 1,311 (1,022) **
Income (loss) from continuing operations, net of tax $ 2,295 $ (4,436) ** $ 4,039 $ (3,274) **
Selected performance metrics:
Average loans held for investment $ 254,625 $ 197,808 29% $ 254,332 $ 173,858 46%
Average yield on loans(2) 17.16 % 17.88 % (72)bps 17.15 % 18.10 % (95)bps
Total net revenue margin(3) 17.44 17.33 11 17.16 17.69 (53)
Net charge-offs $ 2,997 $ 2,594 16% $ 6,238 $ 4,908 27%
Net charge-off rate(4) 4.71% 5.25 % (54)bps 4.91 % 5.65 % (74)bps
Purchase volume $ 249,195 $ 197,308 26% $ 465,708 $ 351,699 32%
(Dollars in millions, except as noted) June 30, 2026 December 31, 2025 Change
Selected period-end data:
Loans held for investment $ 259,005 $ 262,403 (1)%
30+ day performing delinquency rate 3.39 % 3.99 % (60)bps
Allowance for credit losses $ 18,101 $ 18,811 (4)%
Allowance coverage ratio 6.99 % 7.17 % (18)bps
__________
(1)We recognize finance charges and fee income on open-ended loans in accordance with the contractual provisions of the credit arrangements and charge off any uncollectible amounts. Finance charges and fees charged off as uncollectible are reflected as a reduction in total net revenue.
(2)Average yield is calculated based on annualized interest income for the period divided by average loans during the period and does not include any allocations, such as funds transfer pricing.
(3)Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans during the period.
(4)Charge-offs exclude $18.0 billion of Discover domestic credit card loans acquired in the second quarter of 2025 that are fully charged-off, with expected recoveries of $3.1 billion included as a benefit to the allowance for credit losses.
** Not meaningful.
Because our Domestic Card business accounts for the substantial majority of our Credit Card business, the key factors driving the results are similar to the key factors affecting our total Credit Card business. Net income for our Domestic Card business increased in the second quarter and first six months of 2026 compared to the second quarter and first six months of 2025 primarily driven by:
23 Capital One Financial Corporation (COF)
Table of Contents
•Lower provision for credit losses primarily driven by the absence of the initial allowance for credit losses for loans acquired in the Discover acquisition.
•Higher net interest income primarily driven by higher average loan balances, largely due to the addition of Discover.
•Higher non-interest income primarily driven by growth in our portfolio, including the addition of Discover.
These drivers were partially offset by:
•Higher non-interest expense primarily driven by growth in our portfolio, including the addition of Discover, and higher acquisition amortization expenses.
Consumer Banking Business
The primary sources of revenue for our Consumer Banking business are net interest income from loans and deposits as well as service charges and customer-related fees, including revenue from processing transactions on the Global Payment Network. Expenses primarily consist of operating costs, the provision for credit losses and marketing expenses.
Our Consumer Banking business generated income from continuing operations, net of tax, of $486 million and $784 million in the second quarter and first six months of 2026, respectively, and $450 million and $636 million in the second quarter and first six months of 2025, respectively.
Table 10 summarizes the financial results of our Consumer Banking business and displays selected key metrics for the periods indicated.
Table 10: Consumer Banking Business Results
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions, except as noted) 2026 2025 Change 2026 2025 Change
Selected income statement data:
Net interest income $ 2,431 $ 2,162 12% $ 4,660 $ 4,105 14%
Non-interest income 778 394 97 1,461 577 153
Total net revenue 3,209 2,556 26 6,121 4,682 31
Provision for credit losses 444 252 76 963 553 74
Non-interest expense 2,121 1,713 24 4,119 3,294 25
Income from continuing operations before income taxes 644 591 9 1,039 835 24
Income tax provision 158 141 12 255 199 28
Income from continuing operations, net of tax $ 486 $ 450 8% $ 784 $ 636 23%
Selected performance metrics:
Average loans held for investment:
Auto $ 87,419 $ 78,875 11% $ 85,979 $ 78,056 10%
Retail banking 1,164 1,220 (5) 1,171 1,236 (5)
Total consumer banking $ 88,583 $ 80,095 11 $ 87,150 $ 79,292 10
Average yield on loans held for investment(1) 9.57 % 9.30 % 27bps 9.50 % 9.17 % 33bps
Average deposits $ 435,890 $ 365,359 19% $ 432,161 $ 342,780 26%
Average deposits interest rate 2.76 % 3.02 % (26)bps 2.80 % 3.01 % (21)bps
Net charge-offs $ 329 $ 260 27% $ 693 $ 573 21%
Net charge-off rate 1.48 % 1.30 % 18bps 1.59 % 1.45 % 14bps
Global Payment Network volume $ 189,612 $ 74,014 156% $ 363,944 $ 74,014 **
Auto loan originations 12,916 10,861 19 24,046 20,071 20%
24 Capital One Financial Corporation (COF)
Table of Contents
(Dollars in millions, except as noted) June 30, 2026 December 31, 2025 Change
Selected period-end data:
Loans held for investment:
Auto $ 89,311 $ 83,600 7%
Retail banking 1,156 1,190 (3)
Total consumer banking $ 90,467 $ 84,790 7
30+ day performing delinquency rate 4.28 % 5.17 % (89)bps
30+ day delinquency rate 4.76 5.73 (97)
Nonperforming loan rate 0.62 0.69 (7)
Nonperforming asset rate(2) 0.72 0.79 (7)
Allowance for credit losses $ 2,162 $ 1,892 14%
Allowance coverage ratio 2.39 % 2.23 % 16bps
Deposits $ 435,221 $ 423,932 3%
_________
(1)Average yield is calculated based on annualized interest income for the period divided by average loans during the period and does not include any allocations, such as funds transfer pricing.
(2)Nonperforming assets primarily consist of nonperforming loans and repossessed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment and repossessed assets.
** Not meaningful.
Key factors affecting the results of our Consumer Banking business for the second quarter and first six months of 2026 compared to the second quarter and first six months of 2025, and changes in financial condition and credit performance between June 30, 2026 and December 31, 2025 include the following:
•Net Interest Income: Net interest income increased by $269 million to $2.4 billion in the second quarter of 2026 and increased by $555 million to $4.7 billion in the first six months of 2026 primarily driven by higher deposits due to the addition of Discover and higher average loan balances in our auto business, partially offset by lower margins in our retail banking business.
•Non-Interest Income: Non-interest income increased by $384 million to $778 million in the second quarter of 2026 and increased by $884 million to $1.5 billion in the first six months of 2026 primarily due to the addition of the Global Payment Network and impacts from the reissuance of legacy Capital One customer debit cards onto the Global Payment Network.
•Provision for Credit Losses: Provision for credit losses increased by $192 million to $444 million in the second quarter of 2026 and increased by $410 million to $963 million in the first six months of 2026 primarily driven by allowance builds in our auto loan portfolio compared to a release in the first and second quarters of 2025.
•Non-Interest Expense: Non-interest expense increased by $408 million to $2.1 billion in the second quarter of 2026 and increased by $825 million to $4.1 billion in the first six months of 2026 primarily driven by the addition of Discover, higher marketing and investment in technology, partially offset by the absence of legal reserve builds recorded in the first six months of 2025.
Loans Held for Investment:
•Period-end loans held for investment increased by $5.7 billion to $90.5 billion as of June 30, 2026 from December 31, 2025 primarily driven by growth in our auto loan portfolio.
•Average loans held for investment increased by $8.5 billion to $88.6 billion in the second quarter of 2026 compared to the second quarter of 2025 and increased by $7.9 billion to $87.2 billion in the first six months of 2026 compared to the first six months of 2025 primarily driven by growth in our auto loan portfolio.
Deposits:
•Period-end deposits increased by $11.3 billion to $435.2 billion as of June 30, 2026 from December 31, 2025 primarily driven by continued growth from our national banking strategy.
25 Capital One Financial Corporation (COF)
Table of Contents
Net Charge-Off and Delinquency Metrics:
•The net charge-off rate increased by 18 bps to 1.48% in the second quarter of 2026 compared to the second quarter of 2025 and increased by 14 bps to 1.59% in the first six months of 2026 compared to the first six months of 2025.
•The 30+ day delinquency rate decreased by 97 bps to 4.76% as of June 30, 2026 compared to December 31, 2025.
Commercial Banking Business
The primary sources of revenue for our Commercial Banking business are net interest income from loans and deposits and non-interest income earned from products and services provided to our clients such as capital markets, advisory services and treasury management. Because our Commercial Banking business has loans and investments that generate tax-exempt income, tax credits or other tax benefits, we present the revenues on a taxable-equivalent basis. Expenses primarily consist of operating costs and the provision for credit losses.
Our Commercial Banking business generated income from continuing operations, net of tax, of $239 million and $445 million in the second quarter and first six months of 2026, respectively, and $280 million and $475 million in the second quarter and first six months of 2025, respectively.
26 Capital One Financial Corporation (COF)
Table of Contents
Table 11 summarizes the financial results of our Commercial Banking business and displays selected key metrics for the periods indicated.
Table 11: Commercial Banking Business Results
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions, except as noted) 2026 2025 Change 2026 2025 Change
Selected income statement data:
Net interest income $ 585 $ 602 (3) % $ 1,166 $ 1,174 (1) %
Non-interest income 265 335 (21) 593 647 (8)
Total net revenue(1) 850 937 (9) 1,759 1,821 (3)
Provision for credit losses(2) 71 81 (12) 209 223 (6)
Non-interest expense 462 489 (6) 960 975 (2)
Income from continuing operations before income taxes 317 367 (14) 590 623 (5)
Income tax provision 78 87 (10) 145 148 (2)
Income from continuing operations, net of tax $ 239 $ 280 (15) % $ 445 $ 475 (6) %
Selected performance metrics:
Average loans held for investment:
Commercial and multifamily real estate $ 33,978 $ 32,522 4 % $ 33,759 $ 32,129 5 %
Commercial and industrial 56,921 55,847 2 56,474 55,806 1
Total commercial banking $ 90,899 $ 88,369 3 $ 90,233 $ 87,935 3
Average yield on loans held for investment(1)(3) 5.75 % 6.40 % (65) bps 5.71 % 6.35 % (64) bps
Average deposits $ 31,248 $ 30,444 3 % $ 31,193 $ 31,045 — %
Average deposits interest rate 1.81 % 2.06 % (25) bps 1.82 % 2.09 % (27) bps
Net charge-offs $ 121 $ 72 68 % $ 185 $ 96 93 %
Net charge-off rate 0.53 % 0.33 % 20 bps 0.41 % 0.22 % 19 bps
(Dollars in millions, except as noted) June 30, 2026 December 31, 2025 Change
Selected period-end data:
Loans held for investment:
Commercial and multifamily real estate $ 34,290 $ 33,618 2 %
Commercial and industrial 57,003 55,644 2
Total commercial banking $ 91,293 $ 89,262 2
Nonperforming loan rate 1.32 % 1.36 % (4) bps
Nonperforming asset rate(4) 1.39 1.39 —
Allowance for credit losses(2) $ 1,475 $ 1,451 2 %
Allowance coverage ratio 1.62 % 1.63 % (1) bps
Deposits $ 30,841 $ 31,250 (1) %
Loans serviced for others 52,221 52,240 —
__________
(1)Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using a blended federal and state statutory tax rate, with offsetting reductions to the Other category.
(2)The provision for losses on unfunded lending commitments is included in the provision for credit losses in our consolidated statements of income and the related reserve is included in other liabilities on our consolidated balance sheets. Our reserve for unfunded lending commitments totaled $142 million as of both June 30, 2026 and December 31, 2025.
(3)Average yield is calculated based on annualized interest income for the period divided by average loans during the period and does not include any allocations, such as funds transfer pricing.
(4)Nonperforming assets consist of nonperforming loans and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment and other foreclosed assets.
27 Capital One Financial Corporation (COF)
Table of Contents
Key factors affecting the results of our Commercial Banking business for the second quarter and first six months of 2026 compared to the second quarter and first six months of 2025, and changes in financial condition and credit performance between June 30, 2026 and December 31, 2025 include the following:
•Net Interest Income: Net interest income remained substantially flat at $585 million in the second quarter of 2026 compared to the second quarter of 2025 and at $1.2 billion in the first six months of 2026 compared to the first six months of 2025.
•Non-Interest Income: Non-interest income decreased by $70 million to $265 million in the second quarter of 2026 and decreased by $54 million to $593 million in the first six months of 2026 primarily driven by the reclassification of the legacy corporate card product to Domestic Card and lower revenue earned on certain capital markets services.
•Provision for Credit Losses: Provision for credit losses remained substantially flat at $71 million in the second quarter of 2026 compared to the second quarter of 2025 and at $209 million in the first six months of 2026 compared to the first six months of 2025.
•Non-Interest Expense: Non-interest expense decreased by $27 million to $462 million in the second quarter of 2026 and decreased by $15 million to $960 million in the first six months of 2026 primarily driven by the reclassification of the legacy corporate card product to Domestic Card.
Loans Held for Investment:
•Period-end loans held for investment increased by $2.0 billion to $91.3 billion as of June 30, 2026 from December 31, 2025 primarily due to growth across our loan portfolio.
•Average loans held for investment increased by $2.5 billion to $90.9 billion in the second quarter of 2026 compared to the second quarter of 2025 and increased by $2.3 billion to $90.2 billion in the first six months of 2026 compared to the first six months of 2025 primarily due to growth across our loan portfolio.
Deposits:
•Period-end deposits remained substantially flat at $30.8 billion as of June 30, 2026 from December 31, 2025.
Net Charge-Off and Nonperforming Metrics:
•The net charge-off rate increased by 20 bps to 0.53% in the second quarter of 2026 and increased by 19 bps to 0.41% in the first six months of 2026.
•The nonperforming loan rate decreased by 4 bps to 1.32% as of June 30, 2026 compared to December 31, 2025.
Other Category
Other includes unallocated amounts related to our centralized Corporate Treasury group activities, such as management of our corporate investment securities portfolio, asset/liability management and oversight of our funds transfer pricing process. Other also includes:
•unallocated corporate revenue and expenses that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance, such as certain restructuring charges and Discover integration expenses;
•residual tax expense or benefit to arrive at the consolidated effective tax rate that is not assessed to our primary business segments; and
•foreign exchange rate fluctuations on foreign currency-denominated balances. As a result of our derivative management activities, we believe our net exposure to foreign exchange risk is minimal.
28 Capital One Financial Corporation (COF)
Table of Contents
Table 12 summarizes the financial results of our Other category for the periods indicated.
Table 12: Other Category Results
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions) 2026 2025 Change 2026 2025 Change
Selected income statement data:
Net interest income (loss) $ 106 $ (62) ** $ 205 $ (218) **
Non-interest loss (80) (34) 135% (158) (53) 198%
Total net revenue (loss)(1) 26 (96) ** 47 (271) **
Provision (benefit) for credit losses — (1) ** — (1) **
Non-interest expense 362 342 6 829 539 54
Loss from continuing operations before income taxes (336) (437) (23) (782) (809) (3)
Income tax benefit (220) (361) (39) (474) (537) (12)
Loss from continuing operations, net of tax $ (116) $ (76) 53% $ (308) $ (272) 13%
__________
(1)Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using a blended federal and state statutory tax rate, with offsetting reductions to the Other category.
** Not meaningful.
Loss from continuing operations, net of tax increased by $40 million to a loss of $116 million in the second quarter of 2026 compared to the second quarter of 2025 primarily driven by the absence of a tax benefit due to a State of California law change in the second quarter of 2025, partially offset by higher treasury income. Loss from continuing operations, net of tax increased by $36 million to a loss of $308 million in the first six months of 2026 compared to the first six months of 2025 primarily driven by higher Discover integration expenses, partially offset by higher treasury income.
Discover integration expenses remained substantially flat at $298 million in the second quarter of 2026 compared to the second quarter of 2025. Discover integration expenses increased by $304 million to $713 million in the first six months of 2026 compared to the first six months of 2025 primarily driven by higher salaries and associate benefits, which are included within operating expense in our consolidated statements of income and within the Other category for business segment results. Since the announcement of the Transaction in the first quarter of 2024, we have incurred $2.1 billion of Discover integration expenses as of June 30, 2026.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in accordance with U.S. GAAP requires management to make a number of judgments, estimates and assumptions that affect the amount of assets, liabilities, income and expenses on the consolidated financial statements. Understanding our accounting policies and the extent to which we use management judgment and estimates in applying these policies is integral to understanding our financial statements. We provide a summary of our significant accounting policies under “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2025 Form 10-K.
We have identified the following accounting estimates as critical because they require significant judgments and assumptions about highly complex and inherently uncertain matters and the use of reasonably different estimates and assumptions could have a material impact on our results of operations or financial condition. Our critical accounting policies and estimates are as follows:
•Loan loss reserves
•Goodwill
•Fair value
•Customer rewards reserve
29 Capital One Financial Corporation (COF)
Table of Contents
We evaluate our critical accounting estimates and judgments on an ongoing basis and update them as necessary, based on changing conditions.
There have been no changes to our critical accounting policies and estimates described in our 2025 Form 10-K under “Part II—Item 7. MD&A—Critical Accounting Policies and Estimates.”
ACCOUNTING CHANGES AND DEVELOPMENTS
Accounting Standards Issued but Not Adopted as of June 30, 2026
Standard Guidance Adoption Timing and Financial Statement Impacts
Disaggregation of Income Statement Expenses Accounting Standards Update (“ASU”) No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses Issued November 2024 Requires entities to separately disclose specific disaggregated expense categories on an annual and interim basis as well as disclose selling expenses on an annual basis. Effective beginning with our annual period ending on December 31, 2027, with early adoption permitted. Prospective and retrospective applications are permitted. We are still assessing the extent of the impacts of adoption to our disclosures.
Internal-Use Software ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software Issued September 2025 Requires entities to capitalize costs associated with internal-use software based on a new methodology, which focuses on management’s authorization and commitment to funding the project and the probability that the software will be completed and used to perform the function intended. Effective beginning with our interim period ending on March 31, 2028, with early adoption permitted. Prospective, retrospective and modified transition applications are each permitted. We are still assessing the extent of the impacts of adoption to our consolidated financial statements.
Purchased Seasoned Loans ASU No. 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans Issued November 2025 Expands the population of acquired financial assets subject to the gross-up approach in Topic 326, which requires an entity to record an initial allowance for credit losses through an adjustment to the asset’s amortized cost basis rather than through a current-period provision for credit losses. The expanded population includes loan receivables, excluding credit cards, acquired without credit deterioration that are deemed “seasoned,” as defined by the update. Effective beginning with our interim period ending on March 31, 2027, with early adoption permitted. Prospective application is required. We are still assessing the extent of the impacts of adoption to our consolidated financial statements.
Hedge Accounting Improvements ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements Issued November 2025 Enables entities to achieve and maintain hedge accounting to a greater number of highly effective economic hedges. Effective beginning with our interim period ending on March 31, 2027, with early adoption permitted. Prospective application is required. We are still assessing the extent of the impacts of adoption to our consolidated financial statements.
30 Capital One Financial Corporation (COF)
Table of Contents
CAPITAL MANAGEMENT
The level and composition of our capital are determined by multiple factors, including our consolidated regulatory capital requirements as described in more detail below and internal risk-based capital assessments such as internal stress testing. The level and composition of our capital may also be influenced by rating agency guidelines, subsidiary capital requirements, business environment, conditions in the financial markets and assessments of potential future losses due to adverse changes in our business and market environments.
Capital Standards and Prompt Corrective Action
The Company and the Bank are subject to the regulatory capital requirements established by the Federal Reserve and the OCC, respectively (the “Basel III Capital Rules”). The Basel III Capital Rules implement certain capital requirements published by the Basel Committee on Banking Supervision (“Basel Committee”), along with certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) and other capital provisions.
As a bank holding company (“BHC”) with total consolidated assets of at least $250 billion but less than $700 billion and not exceeding any of the applicable risk-based thresholds, the Company is a Category III institution under the Basel III Capital Rules.
The Bank, as a subsidiary of a Category III institution, is a Category III bank. Moreover, the Bank, as an insured depository institution, is subject to prompt corrective action (“PCA”) capital regulations.
Basel III and U.S. Capital Rules
Under the Basel III Capital Rules, we must maintain a minimum CET1 capital ratio of 4.5%, a Tier 1 capital ratio of 6.0% and a total capital ratio of 8.0%, in each case in relation to risk-weighted assets. In addition, we must maintain a minimum leverage ratio of 4.0% and a minimum supplementary leverage ratio of 3.0%. We are also subject to the capital conservation buffer requirement and countercyclical capital buffer requirement, each as described below. Our capital and leverage ratios are calculated based on the Basel III standardized approach framework.
We have elected to exclude certain elements of accumulated other comprehensive income (“AOCI”) from our regulatory capital as permitted for a Category III institution. For information on the recognition of AOCI in regulatory capital under the proposed changes to the Basel III Capital Rules, see “Part I—Item 2. MD&A—Supervision and Regulation—Basel III Finalization Proposals” in our Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Q1 2026 Form 10-Q”).
Global systemically important banks (“G-SIBs”) that are based in the U.S. are subject to an additional CET1 capital requirement known as the “G-SIB Surcharge.” We are not a G-SIB based on the most recent available data and thus we are not subject to a G-SIB Surcharge.
Capital Buffer Requirements
The Basel III Capital Rules require banking institutions to maintain a capital conservation buffer, composed of CET1 capital, above the regulatory minimum ratios. Under the Federal Reserve’s final rule to implement the stress capital buffer requirement (“Stress Capital Buffer Rule”), the Company’s “standardized approach capital conservation buffer” includes its stress capital buffer requirement (as described below), any G-SIB Surcharge (which is not applicable to us) and the countercyclical capital buffer requirement (which is currently set at 0%). Any determination to increase the countercyclical capital buffer applicable to the Company generally would be effective twelve months after the announcement of such an increase, unless the Federal Reserve sets an earlier effective date.
The Company’s stress capital buffer requirement is recalibrated every year based on the Company’s supervisory stress test results, unless otherwise determined by the Federal Reserve. In particular, the Company’s stress capital buffer requirement equals, subject to a floor of 2.5%, the sum of (i) the difference between the Company’s starting CET1 capital ratio and its lowest projected CET1 capital ratio under the severely adverse scenario of the Federal Reserve’s supervisory stress test plus (ii) the ratio of the Company’s projected four quarters of common stock dividends (for the fourth to seventh quarters of the planning horizon) to the projected risk-weighted assets for the quarter in which the Company’s projected CET1 capital ratio reaches its minimum under the supervisory stress test.
31 Capital One Financial Corporation (COF)
Table of Contents
Based on the Company’s 2025 supervisory stress test results, the Company’s final stress capital buffer requirement for the period beginning on October 1, 2025 through September 30, 2026 is 4.5%. On February 4, 2026, the Federal Reserve notified all participating firms, including the Company, that because the Stress Testing Transparency Proposal remains subject to public comment, the Federal Reserve is maintaining stress capital buffer requirements for all such firms at their current levels. Consequently, absent further action from the Federal Reserve, the Company’s stress capital buffer requirement will remain at 4.5% until September 30, 2027. Therefore, the Company’s minimum capital requirements plus the standardized approach capital conservation buffer for CET1 capital, Tier 1 capital and total capital ratios under the stress capital buffer framework are 9.0%, 10.5% and 12.5%, respectively, for the period from October 1, 2025 through September 30, 2027. For additional information regarding the proposed rulemaking to modify the stress capital buffer framework and the Stress Testing Transparency Proposal, see “Part I—Item 1. Business—Supervision and Regulation—Prudential Regulation of Banking—Capital and Stress Testing Regulation—Capital Buffer Requirements” in our 2025 Form 10-K.
The Stress Capital Buffer Rule does not apply to the Bank. Pursuant to the OCC’s capital regulations, which are only applicable to the Bank, the capital conservation buffer for the Bank continues to be fixed at 2.5%. The Bank is also subject to the countercyclical capital buffer requirement (which is currently set at 0%). Any determination to increase the countercyclical capital buffer applicable to the Bank generally would be effective twelve months after the announcement of such an increase, unless the OCC sets an earlier effective date. Accordingly, the Bank’s minimum capital requirements plus its capital conservation buffer for CET1 capital, Tier 1 capital and total capital ratios are 7.0%, 8.5% and 10.5%, respectively.
If the Company or the Bank fails to maintain its capital ratios above the minimum capital requirements plus the applicable capital conservation buffer requirements, it will face increasingly strict automatic limitations on capital distributions and discretionary bonus payments to certain executive officers.
As of June 30, 2026 and December 31, 2025, respectively, the Company and the Bank each exceeded the minimum capital requirements and the capital conservation buffer requirements applicable to them, and the Company and the Bank were each “well-capitalized.” The “well-capitalized” standards applicable to the Company are established in the Federal Reserve’s regulations, and the “well-capitalized” standards applicable to the Bank are established in the OCC’s PCA capital requirements.
Market Risk Rule
The “Market Risk Rule” supplements the Basel III Capital Rules by requiring institutions subject to the rule to adjust their risk-based capital ratios to reflect the market risk in their trading book. The Market Risk Rule generally applies to institutions with aggregate trading assets and liabilities equal to 10% or more of total assets of $1 billion or more. As of June 30, 2026, the Company and the Bank are subject to the Market Risk Rule. See “Market Risk Profile” below for additional information.
For a description of the regulatory capital rules to which we are subject, see “Part I—Item 1. Business—Supervision and Regulation” in our 2025 Form 10-K”.
32 Capital One Financial Corporation (COF)
Table of Contents
Table 13 provides a comparison of our regulatory capital ratios under the Basel III standardized approach, the regulatory minimum capital adequacy ratios and the applicable well-capitalized standards as of June 30, 2026 and December 31, 2025.
Table 13: Capital Ratios Under Basel III(1)(2)
June 30, 2026 December 31, 2025
Ratio Minimum Capital Adequacy Well- Capitalized Ratio Minimum Capital Adequacy Well- Capitalized
Capital One Financial Corp:
Common equity Tier 1 capital(3) 13.7 % 4.5 % N/A 14.3 % 4.5 % N/A
Tier 1 capital(4) 14.8 6.0 6.0 % 15.3 6.0 6.0 %
Total capital(5) 16.6 8.0 10.0 17.2 8.0 10.0
Tier 1 leverage(6) 11.8 4.0 N/A 12.5 4.0 N/A
Supplementary leverage(7) 10.1 3.0 N/A 10.6 3.0 N/A
CONA:
Common equity Tier 1 capital(3) 13.2 4.5 6.5 13.4 4.5 6.5
Tier 1 capital(4) 13.2 6.0 8.0 13.4 6.0 8.0
Total capital(5) 14.9 8.0 10.0 15.1 8.0 10.0
Tier 1 leverage(6) 10.6 4.0 5.0 10.9 4.0 5.0
Supplementary leverage(7) 9.0 3.0 N/A 9.3 3.0 N/A
__________
(1)Capital requirements that are not applicable are denoted by “N/A.”
(2)Ratios as of June 30, 2026 are preliminary and therefore subject to change until we file our June 30, 2026 Form FR Y-9C—Consolidated Financial Statements for Holding Companies and Call Reports.
(3)CET1 capital ratio is a regulatory capital measure calculated based on CET1 capital divided by risk-weighted assets.
(4)Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(5)Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets.
(6)Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets.
(7)Supplementary leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by total leverage exposure.
33 Capital One Financial Corporation (COF)
Table of Contents
Table 14 presents regulatory capital under the Basel III standardized approach and regulatory capital metrics as of June 30, 2026 and December 31, 2025.
Table 14: Regulatory Risk-Based Capital Components and Regulatory Capital Metrics
(Dollars in millions) June 30, 2026 December 31, 2025
Regulatory capital under Basel III standardized approach
Common equity excluding AOCI $ 114,686 $ 113,677
Adjustments and deductions:
AOCI, net of tax(1) 62 81
Goodwill, net of related deferred tax liabilities (31,559) (28,217)
Other intangible and deferred tax assets, net of deferred tax liabilities (12,413) (12,493)
Common equity Tier 1 capital 70,776 73,048
Tier 1 capital instruments 5,407 5,407
Tier 1 capital 76,183 78,455
Tier 2 capital instruments 2,941 2,940
Qualifying allowance for credit losses 6,647 6,605
Tier 2 capital 9,588 9,545
Total capital $ 85,771 $ 88,000
Regulatory capital metrics
Risk-weighted assets $ 516,287 $ 511,794
Adjusted average assets(2) 643,349 629,997
Total leverage exposure(3) 753,394 737,911
__________
(1)Excludes certain components of AOCI in accordance with rules applicable to Category III institutions. See “Capital Management—Capital Standards and Prompt Corrective Action—Basel III and U.S. Capital Rules” in this Report.
(2)Includes on-balance sheet asset adjustments subject to deduction from Tier 1 capital under the Basel III Capital Rules.
(3)Reflects on- and off-balance sheet amounts for the denominator of the supplementary leverage ratio as set forth by the Basel III Capital Rules.
Capital Planning and Regulatory Stress Testing
During the second quarter and first six months of 2026, we repurchased $2.7 billion and $5.2 billion of our common stock, respectively.
On February 4, 2026, the Federal Reserve notified all participating firms, including the Company, that because the Stress Testing Transparency Proposal remains subject to public comment, the Federal Reserve is maintaining stress capital buffer requirements for all such firms at their current levels. Consequently, absent further action from the Federal Reserve, the Company’s stress capital buffer requirement will remain at 4.5% until September 30, 2027. Therefore, the Company’s minimum capital requirements plus the standardized approach capital conservation buffer for CET1 capital, Tier 1 capital and total capital ratios under the stress capital buffer framework are 9.0%, 10.5% and 12.5%, respectively, for the period from October 1, 2025 through September 30, 2027.
On June 24, 2026, the Federal Reserve released the results of its supervisory stress tests for the 2026 cycle, which did not impact the Company’s stress capital buffer requirement.
For a description of the regulatory capital planning rules and stress testing requirements to which we are subject, see “Part I—Item 1. Business—Supervision and Regulation” in our 2025 Form 10-K and for additional information on the potential impacts of proposed amendments and recent regulatory developments, see “Part I—Item 2. MD&A—Supervision and Regulation” in our Q1 2026 Form 10-Q.
Dividend Policy and Stock Purchases
In the first six months of 2026, we declared and paid common stock dividends of $1.0 billion, or $1.60 per share. We declared and paid $130 million of preferred stock dividends in the first six months of 2026.
34 Capital One Financial Corporation (COF)
Table of Contents
The following table summarizes the dividends paid per share on our various preferred stock series in the first and second quarters of 2026.
Table 15: Preferred Stock Dividends Paid Per Share(1)
Series Description Issuance Date Per Annum Dividend Rate Dividend Frequency 2026
Q2 Q1
Series I 5.000% Non-Cumulative September 11, 2019 5.000% Quarterly $12.50 $12.50
Series J 4.800% Non-Cumulative January 31, 2020 4.800% Quarterly 12.00 12.00
Series K 4.625% Non-Cumulative September 17, 2020 4.625% Quarterly 11.56 11.56
Series L 4.375% Non-Cumulative May 4, 2021 4.375% Quarterly 10.94 10.94
Series M 3.950% Fixed Rate Reset Non-Cumulative June 10, 2021 3.950% through 8/31/2026; resets 9/1/2026 and every subsequent 5 year anniversary at 5-Year Treasury Rate +3.157% Quarterly 9.88 9.88
Series N 4.250% Non-Cumulative July 29, 2021 4.250% Quarterly 10.63 10.63
Series O Fixed-to-Floating Rate Non-Cumulative May 18, 2025 5.500% through 10/29/2027; resets 10/30/2027 and every quarter thereafter at three-month term SOFR + 3.338% Semi-Annually through 10/30/2027; Quarterly thereafter 2,750.00 —
__________
(1)For Series I, J, K, L, M and N, the liquidation preference for each share of non-cumulative perpetual preferred stock is $1,000 per share of preferred stock. For Series O, the liquidation preference for each share of non-cumulative perpetual preferred stock is $100,000 per share of preferred stock. For Series I, J, K, L and N, ownership is held in the form of depositary shares, each representing a 1/40th interest in a share of non-cumulative perpetual preferred stock. For Series O, ownership is held in the form of depositary shares, each representing a 1/100th interest in a share of non-cumulative perpetual preferred stock.
The declaration and payment of dividends to our stockholders, as well as the amount thereof, are subject to the discretion of our Board of Directors and depend upon our results of operations, financial condition, capital levels, cash requirements, future prospects, regulatory requirements and other factors deemed relevant by the Board of Directors. For additional information related to capital distributions, see “Capital Management—Capital Planning and Regulatory Stress Testing” in this Report.
As a BHC, our ability to pay dividends is largely dependent upon the receipt of dividends or other payments from our subsidiaries. The Bank is subject to regulatory restrictions that limit its ability to transfer funds to our BHC. As of June 30, 2026, funds available for dividend payments from the Bank were $2.5 billion. There can be no assurance that we will declare and pay any dividends to stockholders.
During the second quarter and first six months of 2026, we repurchased $2.7 billion and $5.2 billion of our common stock, respectively. The timing and exact amount of any future common stock repurchases will depend on various factors, including market conditions, opportunities for growth, our capital position and the amount of retained earnings, as well as regulatory considerations. The Board authorized stock repurchase program does not include specific price targets or number of shares, may be executed through open market purchases, tender offers, or privately negotiated transactions, including utilizing Rule 10b5-1 plans, does not have a set expiration date and may be modified, suspended or terminated at any time. For additional information on dividends and stock repurchases, see “Capital Management—Capital Planning and Regulatory Stress Testing” and “Part II—Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” in this Report, and “Part I—Item 1. Business—Supervision and Regulation—Prudential Regulation of Banking—Capital and Stress Testing Regulation” and “Part I—Item 1. Business—Supervision and Regulation—Prudential Regulation of Banking—Funding and Dividends from Subsidiaries” in our 2025 Form 10-K.
35 Capital One Financial Corporation (COF)
Table of Contents
RISK MANAGEMENT
Risk Management Framework
Our Risk Management Framework (the “Framework”) sets consistent expectations for risk management across the Company. It also sets expectations for our “Three Lines of Defense” model, which defines the roles, responsibilities and accountabilities for taking and managing risk across the Company. Accountability for overseeing an effective Framework resides with our Board of Directors either directly or through its committees. The Company is in the process of integrating Discover into its existing risk management practices, policies and processes.
First Line Identifies and Owns Risk Second Line Advises & Challenges First Line Third Line Provides Independent Assurance
Definition Business areas that are accountable for risk and responsible for: i) generating revenue or reducing expenses; ii) supporting the business to provide products or services to customers; or iii) providing technology services for the first line. Independent Risk Management (“IRM”) and Support Functions (e.g., Human Resources, Accounting, Legal) that provide support services to the Company. Internal Audit and Credit Review.
Key Responsibilities Identify, assess, measure, monitor, control and report the risks associated with their business. IRM: Independently oversees and assesses risk-taking activities for the first line of defense. Support Functions: Centers of specialized expertise that provide support services to the enterprise. Provides independent and objective assurance to the Board of Directors and senior management that the systems and governance processes are designed and working as intended.
36 Capital One Financial Corporation (COF)
Table of Contents
Our Framework sets consistent expectations for risk management across the Company and consists of the following nine elements:
Governance and Accountability
Strategy and Risk Alignment
Risk Identification Assessment, Measurement and Response Monitoring and Testing Aggregation, Reporting and Escalation
Capital and Liquidity Management (including Stress Testing)
Risk Data and Enabling Technology
Culture and Talent Management
We provide additional discussion of our risk management principles, roles and responsibilities, framework and risk appetite under “Part II—Item 7. MD&A—Risk Management” in our 2025 Form 10-K.
Risk Categories
We apply our Framework to protect the Company from the major categories of risk that we are exposed to through our business activities. We have seven major categories of risk as noted below. We provide a description of these categories and how we manage them under “Part II—Item 7. MD&A—Risk Management” in our 2025 Form 10-K.
•Compliance risk
•Credit risk
•Liquidity risk
•Market risk
•Operational risk
•Reputation risk
•Strategic risk
37 Capital One Financial Corporation (COF)
Table of Contents
CREDIT RISK PROFILE
Our loan portfolio accounts for the substantial majority of our credit risk exposure. Our lending activities are governed under our credit policies and are subject to independent review and approval. Below we provide information about the composition of our loan portfolio, key concentrations and credit performance metrics.
We also engage in certain non-lending activities that may give rise to ongoing credit and counterparty settlement risk, including purchasing securities for our investment securities portfolio, entering into derivative transactions to manage our market risk exposure and to accommodate customers, extending short-term advances on syndication activity, including bridge financing transactions we have underwritten, depositing certain operational cash balances in other financial institutions, executing certain foreign exchange transactions and extending customer overdrafts. We provide additional information related to our investment securities portfolio under “Consolidated Balance Sheets Analysis—Investment Securities” and “Part I—Item 1. Financial Statements—Note 3—Investment Securities” as well as credit risk related to derivative transactions in “Part I—Item 1. Financial Statements—Note 9—Derivative Instruments and Hedging Activities.”
38 Capital One Financial Corporation (COF)
Table of Contents
Geographic Composition
We market our credit card products throughout the U.S., the U.K. and Canada. Our credit card loan portfolio is geographically diversified due to our product and marketing approach. The table below presents the geographic profile of our domestic credit card loan portfolio as of June 30, 2026 and December 31, 2025.
Table 16: Domestic Credit Card Loan Portfolio by Geographic Region
June 30, 2026 December 31, 2025
(Dollars in millions) Amount % of Total Amount % of Total
Domestic credit card:
California $ 25,341 9.8 % $ 25,430 9.7 %
Texas 22,958 8.9 23,197 8.8
Florida 19,732 7.6 20,050 7.7
New York 16,531 6.4 16,664 6.4
Pennsylvania 11,117 4.3 11,363 4.3
Illinois 10,787 4.2 11,001 4.2
Ohio 9,306 3.6 9,520 3.6
New Jersey 8,598 3.3 8,741 3.3
Georgia 8,274 3.2 8,429 3.2
North Carolina 7,367 2.8 7,429 2.8
Other 118,994 45.9 120,579 46.0
Total domestic credit card $ 259,005 100.0 % $ 262,403 100.0 %
39 Capital One Financial Corporation (COF)
Table of Contents
Our auto loan portfolio is geographically diversified in the U.S. due to our product and marketing approach. The table below presents the geographic profile of our auto loan portfolio as of June 30, 2026 and December 31, 2025.
Table 17: Auto Loan Portfolio by Geographic Region
June 30, 2026 December 31, 2025
(Dollars in millions) Amount % of Total Amount % of Total
Auto:
Texas $ 11,889 13.3 % $ 10,802 12.9 %
California 8,737 9.8 8,561 10.2
Florida 7,898 8.8 7,397 8.8
Ohio 4,383 4.9 4,014 4.8
Pennsylvania 3,993 4.5 3,806 4.6
Illinois 3,640 4.1 3,401 4.1
Georgia 3,601 4.0 3,330 4.0
North Carolina 2,963 3.3 2,746 3.3
New Jersey 2,586 2.9 2,603 3.1
New York 2,569 2.9 2,502 3.0
Other 37,052 41.5 34,438 41.2
Total auto $ 89,311 100.0 % $ 83,600 100.0 %
40 Capital One Financial Corporation (COF)
Table of Contents
We originate commercial and multifamily real estate loans in most regions of the U.S. The table below presents the geographic profile of our commercial real estate loan portfolio as of June 30, 2026 and December 31, 2025.
Table 18: Commercial Real Estate Loan Portfolio by Region
June 30, 2026 December 31, 2025
(Dollars in millions) Amount % of Total Amount % of Total
Geographic concentration:(1)
Northeast $ 12,363 36.0 % $ 12,149 36.1 %
South 9,185 26.8 7,724 23.0
Pacific West 5,006 14.6 5,477 16.3
Mid-Atlantic 3,328 9.7 3,200 9.5
Mountain 2,397 7.0 2,719 8.1
Midwest 2,011 5.9 2,349 7.0
Total $ 34,290 100.0 % $ 33,618 100.0 %
__________
(1)Geographic concentration is generally determined by the location of the borrower’s business or the location of the collateral associated with the loan. Northeast consists of: CT, MA, ME, NH, NJ, NY, PA, RI and VT. South consists of: AL, AR, FL, GA, KY, LA, MS, NC, OK, SC, TN and TX. Pacific West consists of: AK, CA, HI, OR and WA. Mid-Atlantic consists of: DC, DE, MD, VA and WV. Midwest consists of: IA, IL, IN, KS, MI, MN, MO, ND, NE, OH, SD and WI. Mountain consists of: AZ, CO, ID, MT, NM, NV, UT and WY.
41 Capital One Financial Corporation (COF)
Table of Contents
Commercial Loans by Industry
Table 19 summarizes our commercial loans held for investment by industry classification as of June 30, 2026 and December 31, 2025. Industry classifications below are based on our interpretation of the Federal Loan Classification codes as they pertain to each individual loan.
Table 19: Commercial Loans by Industry
(Percentage of portfolio) June 30, 2026 December 31, 2025
Industry Classification:
Finance 43 % 42 %
Real Estate & Construction 25 25
Government & Education 8 8
Commercial Services 4 4
Health Care & Pharmaceuticals 3 3
Food & Beverage Manufacturing & Wholesale 3 3
Oil, Gas & Pipelines 2 2
Technology, Telecommunications & Media 2 2
Retail 2 2
Other 8 9
Total 100 % 100 %
42 Capital One Financial Corporation (COF)
Table of Contents
Credit Risk Measurement
We closely monitor economic conditions and loan performance trends to assess and manage our exposure to credit risk. Trends in delinquency rates are the key credit quality indicator for our credit card, personal loans and retail banking loan portfolios as changes in delinquency rates can provide an early warning of changes in potential future credit losses. The key indicator we monitor when assessing the credit quality and risk of our auto loan portfolio is borrower credit scores as they provide insight into borrower risk profiles, which give indications of potential future credit losses. The key credit quality indicator for our commercial loan portfolio is our internal risk ratings as we generally classify loans that have been delinquent for an extended period of time and other loans with significant risk of loss as nonperforming. In addition to these credit quality indicators, we also manage and monitor other credit quality metrics such as level of nonperforming loans and net charge-off rates.
We underwrite most consumer loans using proprietary models, which typically include credit bureau data, such as borrower credit scores, application information and, where applicable, collateral and deal structure data. We continuously adjust our management of credit lines and collection strategies based on customer behavior and risk profile changes. We also use borrower credit scores for subprime classification, for competitive benchmarking and, in some cases, to drive product segmentation decisions.
Table 20 provides details on the credit scores of our domestic credit card, personal and auto loan portfolios as of June 30, 2026 and December 31, 2025.
Table 20: Credit Score Distribution
(Percentage of portfolio) June 30, 2026 December 31, 2025
Domestic credit card—Refreshed FICO scores:(1)
Greater than 660 74 % 73 %
660 or below 26 27
Total 100 % 100 %
Personal loans—Refreshed FICO scores:(1)
Greater than 660 94 % 94 %
621 - 660 3 3
620 or below 3 3
Total 100 % 100 %
Auto—At origination FICO scores:(2)
Greater than 660 49 % 51 %
621 - 660 19 19
620 or below 32 30
Total 100 % 100 %
__________
(1)Percentages represent period-end loans held for investment in each credit score category. Domestic credit card and personal loan credit scores generally represent Fair Isaac Corporation (“FICO”) scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter and may be based on different versions of FICO over time. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category for Domestic credit card and 620 or below for personal loans.We do not use FICO scores in our corporate credit card business and therefore it is excluded from this disclosure.
(2)Percentages represent period-end loans held for investment in each credit score category. Auto loan credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.
In our commercial loan portfolio, we assign internal risk ratings to loans based on relevant information about the ability of the borrowers to repay their debt. In determining the risk rating of a particular loan, some of the factors considered are the borrower’s current financial condition, historical and projected future credit performance, prospects for support from financially responsible guarantors, the estimated realizable value of any collateral and current economic trends.
We present information in the section below on the credit performance of our loan portfolio, including the key metrics we use in tracking changes in the credit quality of our loan portfolio. See “Part I—Item 1. Financial Statements—Note 4—Loans” for additional credit quality information in this Report and see “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2025 Form 10-K for information on our accounting policies for delinquent and nonperforming loans, charge-offs and loan modifications and restructurings for each of our loan categories.
43 Capital One Financial Corporation (COF)
Table of Contents
Delinquency Rates
We consider the entire balance of an account to be delinquent if the minimum required payment is not received by the customer’s due date, measured at each balance sheet date. Our 30+ day delinquency metrics include all loans held for investment that are 30 or more days past due, whereas our 30+ day performing delinquency metrics include all loans held for investment that are 30 or more days past due but are currently classified as performing and accruing interest. The 30+ day delinquency and 30+ day performing delinquency metrics are the same for domestic credit card loans, as we continue to classify these loans as performing until the account is charged off, typically when the account is 180 days past due. See “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2025 Form 10-K for information on our policies for classifying loans as nonperforming for each of our loan categories. We provide additional information on our credit quality metrics in “Business Segment Financial Performance.”
Table 21 presents our 30+ day performing delinquency rates and 30+ day delinquency rates of our portfolio of loans held for investment, by portfolio, as of June 30, 2026 and December 31, 2025.
Table 21: 30+ Day Delinquencies
June 30, 2026 December 31, 2025
30+ Day Performing Delinquencies 30+ Day Delinquencies 30+ Day Performing Delinquencies 30+ Day Delinquencies
(Dollars in millions) Amount Rate(1) Amount Rate(1) Amount Rate(1) Amount Rate(1)
Credit Card:
Domestic credit card $ 8,770 3.39 % $ 8,770 3.39 % $ 10,471 3.99 % $ 10,471 3.99 %
Personal loans 144 1.67 151 1.75 165 1.74 174 1.83
International card businesses 358 4.60 370 4.75 355 4.62 364 4.75
Total credit card 9,272 3.37 9,291 3.37 10,991 3.93 11,009 3.94
Consumer Banking:
Auto 3,862 4.32 4,288 4.80 4,371 5.23 4,842 5.79
Retail banking 14 1.15 23 1.95 13 1.09 19 1.60
Total consumer banking 3,876 4.28 4,311 4.76 4,384 5.17 4,861 5.73
Commercial Banking:
Commercial and multifamily real estate 158 0.46 338 0.98 55 0.16 117 0.35
Commercial and industrial 5 0.01 358 0.63 33 0.06 314 0.56
Total commercial banking 163 0.18 696 0.76 88 0.10 431 0.48
Total $ 13,311 2.91 $ 14,298 3.13 $ 15,463 3.41 $ 16,301 3.59
__________
(1)Delinquency rates are calculated by dividing delinquency amounts by period-end loans held for investment for each specified loan category.
44 Capital One Financial Corporation (COF)
Table of Contents
Table 22 presents our 30+ day delinquent loans held for investment, by aging and geography, as of June 30, 2026 and December 31, 2025.
Table 22: Aging and Geography of 30+ Day Delinquent Loans
June 30, 2026 December 31, 2025
(Dollars in millions) Amount Rate(1) Amount Rate(1)
Delinquency status:
30 – 59 days $ 5,775 1.26 % $ 6,492 1.43 %
60 – 89 days 3,359 0.74 3,773 0.83
> 90 days 5,164 1.13 6,036 1.33
Total $ 14,298 3.13 % $ 16,301 3.59 %
Geographic region:
Domestic $ 13,928 3.05 % $ 15,937 3.51 %
International 370 0.08 364 0.08
Total $ 14,298 3.13 % $ 16,301 3.59 %
__________
(1)Delinquency rates are calculated by dividing delinquency amounts by total period-end loans held for investment.
Table 23 summarizes loans that were 90+ days delinquent, in regards to interest or principal payments, and still accruing interest as of June 30, 2026 and December 31, 2025. These loans consist primarily of credit card accounts between 90 days and 179 days past due. As permitted by regulatory guidance issued by the FFIEC, we continue to accrue interest and fees on domestic credit card loans through the date of charge-off, which is typically in the period the account becomes 180 days past due.
Table 23: 90+ Day Delinquent Loans Accruing Interest
June 30, 2026 December 31, 2025
(Dollars in millions) Amount Rate(1) Amount Rate(1)
Loan segment:
Credit card $ 4,391 1.59 % $ 5,352 1.91 %
Total $ 4,391 0.96 $ 5,352 1.18
Geographic region:
Domestic $ 4,228 0.94 % $ 5,195 1.16 %
International 163 2.10 157 2.05
Total $ 4,391 0.96 $ 5,352 1.18
__________
(1)Delinquency rates are calculated by dividing delinquency amounts by period-end loans held for investment for each specified loan category.
45 Capital One Financial Corporation (COF)
Table of Contents
Nonperforming Loans and Nonperforming Assets
Nonperforming loans include loans that have been placed on nonaccrual status. Nonperforming assets consist of nonperforming loans, repossessed assets and other foreclosed assets. See “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2025 Form 10-K for information on our policies for classifying loans as nonperforming for each of our loan portfolios.
Table 24 presents our nonperforming loans by portfolio and other nonperforming assets as of June 30, 2026 and December 31, 2025. We do not classify loans held for sale as nonperforming. We provide additional information on our credit quality metrics in “Business Segment Financial Performance.”
Table 24: Nonperforming Loans and Other Nonperforming Assets(1)
June 30, 2026 December 31, 2025
(Dollars in millions) Amount Rate Amount Rate
Nonperforming loans held for investment:(2)
Credit Card:
Personal loans $ 10 0.12 % $ 12 0.13 %
International card businesses 14 0.18 12 0.16
Total credit card 24 0.01 24 0.01
Consumer Banking:
Auto 546 0.61 566 0.68
Retail banking 18 1.59 17 1.45
Total consumer banking 564 0.62 583 0.69
Commercial Banking:
Commercial and multifamily real estate 443 1.29 320 0.95
Commercial and industrial 758 1.33 892 1.60
Total commercial banking 1,201 1.32 1,212 1.36
Total nonperforming loans held for investment(3) 1,789 0.39 1,819 0.40
Other nonperforming assets(4) 156 0.04 115 0.03
Total nonperforming assets $ 1,945 0.43 $ 1,934 0.43
__________
(1)We recognized interest income for loans classified as nonperforming of $23 million and $20 million in the first six months of 2026 and 2025, respectively.
(2)Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.
(3)Excluding the impact of domestic credit card loans, nonperforming loans as a percentage of total loans held for investment was 0.90% and 0.95% as of June 30, 2026 and December 31, 2025, respectively.
(4)The denominators used in calculating nonperforming asset rates consist of total loans held for investment and other nonperforming assets.
46 Capital One Financial Corporation (COF)
Table of Contents
Net Charge-Offs
Net charge-offs consist of the amortized cost basis, excluding accrued interest, of loans held for investment that we determine to be uncollectible, net of recovered amounts. Recoveries are recognized for payments received after a loan has been charged off, up to the amount that was charged off. The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications, repossession of collateral, the periodic sale of charged off loans as well as additional strategies, such as litigation. Uncollectible finance charges and fees are reversed through revenue and certain fraud losses are recorded in other non-interest expense. Generally, costs to recover charged-off loans are recorded as collection expenses as incurred and are included in our consolidated statements of income as a component of other non-interest expense. Our charge-off policy for loans varies based on the loan type. See “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2025 Form 10-K for information on our charge-off policy for each of our loan portfolios.
Table 25 presents our net charge-off amounts and rates, by portfolio, in the second quarter and first six months of 2026 and 2025.
Table 25: Net Charge-Offs (Recoveries)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(Dollars in millions) Amount Rate(1) Amount Rate(1) Amount Rate(1) Amount Rate(1)
Credit Card:(2)
Domestic credit card $ 2,997 4.71 % $ 2,594 5.25 % $ 6,238 4.91 % $ 4,908 5.65 %
Personal loans 83 3.77 42 3.47 172 3.79 42 3.46
International card businesses 112 5.82 92 5.17 201 5.24 177 5.10
Total credit card 3,192 4.71 2,728 5.20 6,611 4.88 5,127 5.60
Consumer Banking:
Auto 313 1.43 245 1.25 659 1.53 544 1.40
Retail banking 16 5.39 15 4.54 34 5.69 29 4.65
Total consumer banking 329 1.48 260 1.30 693 1.59 573 1.45
Commercial Banking:
Commercial and multifamily real estate 8 0.09 (4) (0.06) 10 0.06 3 0.02
Commercial and industrial 113 0.80 76 0.55 175 0.62 93 0.33
Total commercial banking 121 0.53 72 0.33 185 0.41 96 0.22
Total net charge-offs $ 3,642 3.23 $ 3,060 3.24 $ 7,489 3.34 $ 5,796 3.31
Average loans held for investment $ 450,679 $ 378,157 $ 448,469 $ 350,425
__________
(1)Net charge-off rates are calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(2)Charge-offs exclude $19.4 billion of acquired Discover loans acquired in the second quarter of 2025 that were fully charged off, with expected recoveries of $3.3 billion included as a benefit to the allowance for credit losses.
47 Capital One Financial Corporation (COF)
Table of Contents
Financial Difficulty Modifications to Borrowers
A financial difficulty modification (“FDM”) occurs when a modification in the form of principal forgiveness, interest rate reduction, an other-than-insignificant payment delay, a term extension or a combination of these modifications is granted to a borrower experiencing financial difficulty.
As part of our loss mitigation efforts, we may provide short-term (one to twelve months) or long-term (greater than twelve months) modifications to a borrower experiencing financial difficulty to improve long-term collectibility of the loan and to avoid the need for repossession or foreclosure of collateral.
We consider the impact of all loan modifications, including FDMs, when estimating the credit quality of our loan portfolio and establishing allowance levels. For our Commercial Banking customers, loan modifications are also considered in the assignment of an internal risk rating.
In our Credit Card business, the majority of our FDMs receive an interest rate reduction and are placed on a fixed payment plan not exceeding 60 months. If the customer does not comply with the modified payment terms, then the credit card loan agreement may revert to its original payment terms, generally resulting in any loan outstanding being reflected in the appropriate delinquency category and charged off in accordance with our standard charge-off policy.
In our Consumer Banking business, the majority of our FDMs receive an extension, an interest rate reduction, principal reduction, or a combination of these modifications.
In our Commercial Banking business, the majority of our FDMs receive an extension. A portion of FDMs receive an interest rate reduction, principal reduction, or a combination of modifications.
For more information on FDMs, see “Part I—Item 1. Financial Statements—Note 4—Loans.”
Allowance for Credit Losses and Reserve for Unfunded Lending Commitments
Our allowance for credit losses represents management’s current estimate of expected credit losses over the contractual terms of our loans held for investment as of each balance sheet date. Expected recoveries of amounts previously charged off or expected to be charged off are recognized within the allowance. Charge-offs of uncollectible amounts result in a reduction to the allowance and recoveries of previously charged off amounts are credited to the allowance. We also estimate expected credit losses related to unfunded lending commitments that are not unconditionally cancellable. The provision for losses on unfunded lending commitments is included in the provision for credit losses in our consolidated statements of income and the related reserve for unfunded lending commitments is included in other liabilities on our consolidated balance sheets. We provide additional information on the methodologies and key assumptions used in determining our allowance for credit losses and our reserve for unfunded lending commitments in “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2025 Form 10-K.
48 Capital One Financial Corporation (COF)
Table of Contents
Table 26 presents changes in our allowance for credit losses and reserve for unfunded lending commitments for the second quarter and first six months of 2026 and 2025, and details by portfolio for the provision for credit losses, charge-offs and recoveries.
Table 26: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
Three Months Ended June 30, 2026
Credit Card Consumer Banking
(Dollars in millions) Domestic Card Personal Loans International Card Businesses Total Credit Card Auto Retail Banking Total Consumer Banking Commercial Banking Total
Allowance for credit losses:
Balance as of March 31, 2026 $ 18,806 $ 702 $ 541 $ 20,049 $ 2,026 $ 21 $ 2,047 $ 1,534 $ 23,630
Charge-offs (4,182) (116) (160) (4,458) (683) (19) (702) (123) (5,283)
Recoveries(1)(2) 1,185 33 48 1,266 370 3 373 2 1,641
Net charge-offs (2,997) (83) (112) (3,192) (313) (16) (329) (121) (3,642)
Provision for credit losses 2,292 37 145 2,474 429 15 444 62 2,980
Allowance build (release) for credit losses (705) (46) 33 (718) 116 (1) 115 (59) (662)
Other changes(3) — — (2) (2) — — — — (2)
Balance as of June 30, 2026 18,101 656 572 19,329 2,142 20 2,162 1,475 22,966
Reserve for unfunded lending commitments:
Balance as of March 31, 2026 — — — — — — — 133 133
Provision for losses on unfunded lending commitments — — — — — — — 9 9
Balance as of June 30, 2026 — — — — — — — 142 142
Combined allowance and reserve as of June 30, 2026 $ 18,101 $ 656 $ 572 $ 19,329 $ 2,142 $ 20 $ 2,162 $ 1,617 $ 23,108
Six Months Ended June 30, 2026
Credit Card Consumer Banking
(Dollars in millions) Domestic Card Personal Loans International Card Businesses Total Credit Card Auto Retail Banking Total Consumer Banking Commercial Banking Total
Allowance for credit losses:
Balance as of December 31, 2025 $ 18,811 $ 731 $ 524 $ 20,066 $ 1,869 $ 23 $ 1,892 $ 1,451 $ 23,409
Charge-offs (8,552) (237) (310) (9,099) (1,394) (43) (1,437) (192) (10,728)
Recoveries(1)(2) 2,314 65 109 2,488 735 9 744 7 3,239
Net charge-offs (6,238) (172) (201) (6,611) (659) (34) (693) (185) (7,489)
Provision for credit losses 5,528 97 260 5,885 932 31 963 209 7,057
Allowance build (release) for credit losses (710) (75) 59 (726) 273 (3) 270 24 (432)
Other changes(3) — — (11) (11) — — — — (11)
Balance as of June 30, 2026 18,101 656 572 19,329 2,142 20 2,162 1,475 22,966
Reserve for unfunded lending commitments:
Balance as of December 31, 2025 — — — — — — — 142 142
Provision for losses on unfunded lending commitments — — — — — — — — —
Balance as of June 30, 2026 — — — — — — — 142 142
Combined allowance and reserve as of June 30, 2026 $ 18,101 $ 656 $ 572 $ 19,329 $ 2,142 $ 20 $ 2,162 $ 1,617 $ 23,108
49 Capital One Financial Corporation (COF)
Table of Contents
Three Months Ended June 30, 2025
Credit Card Consumer Banking
(Dollars in millions) Domestic Card Personal Loans International Card Businesses Total Credit Card Auto Retail Banking Total Consumer Banking Commercial Banking Total
Allowance for credit losses:
Balance as of March 31, 2025 $ 12,036 — $ 474 $ 12,510 $ 1,845 $ 27 $ 1,872 $ 1,517 $ 15,899
Charge-offs(4) (3,396) $ (56) (138) (3,590) (593) (19) (612) (81) (4,283)
Recoveries(1)(2) 802 14 46 862 348 4 352 9 1,223
Net charge-offs (2,594) (42) (92) (2,728) (245) (15) (260) (72) (3,060)
Initial allowance for purchased credit deteriorated loans 2,722 148 — 2,870 — — — — 2,870
Benefit from expected recoveries of charged off loans(5) (3,135) (170) — (3,305) — — — — (3,305)
Provision for credit losses(6) 10,200 826 72 11,098 238 14 252 90 11,440
Allowance build (release) for credit losses 7,193 762 (20) 7,935 (7) (1) (8) 18 7,945
Other changes(3) — — 29 29 — — — — 29
Balance as of June 30, 2025 19,229 762 483 20,474 1,838 26 1,864 1,535 23,873
Reserve for unfunded lending commitments:
Balance as of March 31, 2025 — — — — — — — 144 144
Provision (benefit) for losses on unfunded lending commitments — — — — — — — (9) (9)
Balance as of June 30, 2025 — — — — — — — 135 135
Combined allowance and reserve as of June 30, 2025 $ 19,229 $ 762 $ 483 $ 20,474 $ 1,838 $ 26 $ 1,864 $ 1,670 $ 24,008
Six Months Ended June 30, 2025
Credit Card Consumer Banking
(Dollars in millions) Domestic Card Personal Loans International Card Businesses Total Credit Card Auto Retail Banking Total Consumer Banking Commercial Banking Total
Allowance for credit losses:
Balance as of December 31, 2024 $ 12,494 — $ 480 $ 12,974 $ 1,859 $ 25 $ 1,884 $ 1,400 $ 16,258
Charge-offs(4) (6,248) $ (56) (264) (6,568) (1,249) (39) (1,288) (119) (7,975)
Recoveries(1)(2) 1,340 14 87 1,441 705 10 715 23 2,179
Net charge-offs (4,908) (42) (177) (5,127) (544) (29) (573) (96) (5,796)
Initial allowance for purchased credit deteriorated loans 2,722 148 — 2,870 — — — — 2,870
Benefit from expected recoveries of charged off loans(5) (3,135) (170) — (3,305) — — — — (3,305)
Provision for credit losses(6) 12,056 826 142 13,024 523 30 553 231 13,808
Allowance build (release) for credit losses 6,735 762 (35) 7,462 (21) 1 (20) 135 7,577
Other changes(3) — — 38 38 — — — — 38
Balance as of June 30, 2025 19,229 762 483 20,474 1,838 26 1,864 1,535 23,873
Reserve for unfunded lending commitments:
Balance as of December 31, 2024 — — — — — — — 143 143
Provision (benefit) for losses on unfunded lending commitments — — — — — — — (8) (8)
Balance as of June 30, 2025 — — — — — — — 135 135
Combined allowance and reserve as of June 30, 2025 $ 19,229 $ 762 $ 483 $ 20,474 $ 1,838 $ 26 $ 1,864 $ 1,670 $ 24,008
__________
(1)The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications, repossession of collateral, the periodic sale of charged off loans as well as additional strategies, such as litigation.
(2)Third-party collection expenses of $252 million and $496 million for the three and six months ended June 30, 2026, respectively, and $170 million and $278 million for the three and six months ended June 30, 2025, respectively, are included in other non-interest expense.
(3)Primarily represents foreign currency translation adjustments.
(4)Charge-offs exclude $19.4 billion of Discover loans acquired in the second quarter of 2025 that were fully charged-off, with expected recoveries of $3.3 billion included as a benefit to the allowance for credit losses.
50 Capital One Financial Corporation (COF)
Table of Contents
(5)Represents contractual rights to collect on recoveries of acquired Discover loans that were charged off.
(6)Amount includes the initial allowance for credit losses of $8.8 billion for non-purchased credit deteriorated (“non-PCD”) loans acquired in the Transaction.
LIQUIDITY RISK PROFILE
We manage our funding and liquidity risk in an integrated manner in support of the current and future cash flow needs of our business. We maintained liquidity reserves of $144.1 billion and $144.0 billion as of June 30, 2026 and December 31, 2025, respectively, as shown in Table 27 below. Included in liquidity reserves are cash and cash equivalents, investment securities and FHLB borrowing capacity secured by loans.
As of June 30, 2026, we had available issuance capacity of $39.0 billion under shelf registrations associated with our credit card and auto loan securitization programs. We also maintain a shelf registration that enables us to issue an indeterminate amount of senior or subordinated debt securities, preferred stock, depositary shares, common stock, purchase contracts, warrants and units. Our ability to issue under each shelf registration is subject to market conditions.
Finally, as of June 30, 2026, we had access to available contingent liquidity sources totaling $113.3 billion through the prepositioning of collateral, including a portion of the investment securities included in the liquidity reserves amount in the following table, at the Federal Reserve Discount Window, the Standing Repo Operations, FHLB and the Fixed Income Clearing Corporation - Government Securities Division (“FICC - GSD”).
As of June 30, 2026 and December 31, 2025, our funding sources totaled $529.6 billion and $526.8 billion, respectively, primarily composed of consumer deposits, as shown in “Consolidated Balance Sheets Analysis—Table 7: Funding Sources Composition.”
Our liquidity reserves, borrowing capacity, contingent liquidity sources and total funding sources are all discussed in more detail in the following sections. Both our investment securities available for sale and held to maturity are presented at fair value in the measurement of liquidity reserves.
Table 27 below presents the composition of our liquidity reserves as of June 30, 2026 and December 31, 2025.
Table 27: Liquidity Reserves
(Dollars in millions) June 30, 2026 December 31, 2025
Cash and cash equivalents $ 54,714 $ 57,434
Investment securities at fair value(1) 92,754 91,051
FHLB borrowing capacity secured by loans 4,047 4,447
Outstanding FHLB advances and letters of credit secured by loans and investment securities (1,130) (1,839)
Other encumbrances of investment securities (6,281) (7,121)
Total liquidity reserves $ 144,104 $ 143,972
________
(1) Includes investment securities that have been pledged or otherwise encumbered within the below Liquidity Reserves line items “Outstanding FHLB advances and letters of credit secured by loans and investment securities” and “Other encumbrances of investment securities.”
Our liquidity reserves as of June 30, 2026 remained relatively flat compared to December 31, 2025. In addition to these liquidity reserves, we maintain access to a diversified mix of funding sources as discussed in the “Borrowing Capacity” and “Funding Sources” sections below. See “Part II—Item 7. MD&A—Risk Management” in our 2025 Form 10-K for additional information on our management of liquidity risk.
51 Capital One Financial Corporation (COF)
Table of Contents
Liquidity Coverage Ratio
We are subject to the final rules published by the Basel Committee and as implemented by the Federal Reserve and the OCC for the Basel III Liquidity Coverage Ratio (“LCR”) in the U.S. (the “LCR Rule”). The LCR Rule requires both the Company and the Bank to calculate its respective LCR daily. It also requires the Company to publicly disclose, on a quarterly basis, its LCR, certain related quantitative liquidity metrics, and a qualitative discussion of its LCR. Our average LCR during the second quarter of 2026 was 165%, which exceeded the LCR Rule requirement of 100%. The calculation and the underlying components are based on our interpretations, expectations and assumptions of relevant regulations, as well as interpretations provided by our regulators, and are subject to change based on changes to future regulations and interpretations. See “Part I—Item 1. Business—Supervision and Regulation” in our 2025 Form 10-K for additional information.
Net Stable Funding Ratio
We are subject to the final rules published by the Basel Committee and as implemented by the Federal Reserve and the OCC for the Basel III Net Stable Funding Ratio (“NSFR”) in the U.S. (the “NSFR Rule”). The NSFR Rule requires each of the Company and the Bank to maintain an NSFR of 100% on an ongoing basis. It also requires the Company to publicly disclose, on a semi-annual basis each second and fourth quarter, its NSFR, certain related quantitative liquidity metrics and qualitative discussion of its NSFR. Our average NSFR for the first and second quarters of 2026 were 137% and 136%, respectively, which exceeded the NSFR Rule requirement of 100%. The calculation and the underlying components are based on our interpretations, expectations and assumptions of the relevant regulations, as well as interpretations provided by our regulators, and are subject to change based on changes to future regulations and interpretations. See “Part I—Item 1. Business—Supervision and Regulation” in our 2025 Form 10-K for additional information.
Borrowing Capacity
We maintain a shelf registration with the U.S. Securities and Exchange Commission (“SEC”) so that we may periodically offer and sell an indeterminate aggregate amount of senior or subordinated debt securities, preferred stock, depositary shares, common stock, purchase contracts, warrants and units. There is no limit under this shelf registration to the amount or number of such securities that we may offer and sell, subject to market conditions. In addition, we also maintain a shelf registration associated with our Capital One Multi-asset Execution Trust (“COMET”) that allows us to periodically offer and sell up to $24.0 billion of securitized debt obligations and a shelf registration associated with our Capital One Prime Auto Receivables Trusts (“COPAR”) that allows us to periodically offer and sell up to $18.6 billion of securitized debt obligations. These shelf registration statements are subject to periodic renewal and, thus, change, which may be reviewed by the SEC at the time of each such renewal. As part of each periodic renewal, we assess registered amounts under each shelf registration statement which may be updated as appropriate. As of June 30, 2026, we had $21.5 billion and $17.5 billion of available issuance capacity in our COMET and COPAR securitization programs, respectively.
In addition to our issuance capacity under the shelf registration statements, we also have collateral pledged to support our access to FHLB advances, the Federal Reserve Discount Window, the Standing Repo Operations and FICC - GSD general collateral financing repurchase agreement service. For each of these programs, the ability to borrow utilizing these sources is dependent on meeting the respective membership requirements. Our borrowing capacity in each program is a function of the collateral the Bank has posted with each counterparty, including any respective haircuts applied to that collateral.
As of June 30, 2026, we pledged loans and securities to the FHLB to secure a maximum borrowing capacity of $34.4 billion, of which $607 million was used. Our FHLB membership is supported by our investment in FHLB stock of $42 million and $89 million as of June 30, 2026 and December 31, 2025, respectively.
As of June 30, 2026, we pledged loans to secure a borrowing capacity of $55.0 billion under the Federal Reserve Discount Window. Our membership with the Federal Reserve is supported by our investment in Federal Reserve stock of $2.6 billion as of both June 30, 2026 and December 31, 2025.
As a member of FICC - GSD, we have $23.9 billion of readily available borrowing capacity secured by securities from our investment portfolio as of June 30, 2026. Our FICC - GSD membership is supported by our investment in Depository Trust and Clearing Corporation common stock of $575 thousand and $488 thousand as of June 30, 2026 and December 31, 2025, respectively.
52 Capital One Financial Corporation (COF)
Table of Contents
Deposits
Table 28 provides a comparison of the average balances, interest expense and average deposits interest rates for the second quarter and first six months of 2026 and 2025.
Table 28: Deposits Composition and Average Deposits Interest Rates
Three Months Ended June 30,
2026 2025
(Dollars in millions) Average Balance Interest Expense Average Deposits Interest Rate Average Balance Interest Expense Average Deposits Interest Rate
Interest-bearing checking accounts(1) $ 39,759 $ 116 1.17 % $ 35,776 $ 108 1.20 %
Saving deposits(2) 314,378 2,210 2.81 265,622 2,064 3.11
Time deposits 103,993 1,012 3.89 85,741 948 4.42
Total interest-bearing deposits $ 458,130 $ 3,338 2.91 $ 387,139 $ 3,120 3.22
Six Months Ended June 30,
2026 2025
(Dollars in millions) Average Balance Interest Expense Average Deposits Interest Rate Average Balance Interest Expense Average Deposits Interest Rate
Interest-bearing checking accounts(1) $ 39,204 $ 230 1.17 % $ 36,030 $ 227 1.26 %
Saving deposits(2) 311,873 4,473 2.87 246,805 3,832 3.11
Time deposits 103,983 2,022 3.89 79,791 1,776 4.45
Total interest-bearing deposits $ 455,060 $ 6,725 2.96 $ 362,626 $ 5,835 3.22
__________
(1)Includes negotiable order of withdrawal accounts.
(2)Includes money market deposit accounts.
The FDIC limits the acceptance of brokered deposits to well-capitalized insured depository institutions and, with a waiver from the FDIC, to adequately-capitalized institutions. The Bank was well capitalized, as defined under the federal banking regulatory guidelines, as of both June 30, 2026 and December 31, 2025. See “Part I—Item 1. Business—Supervision and Regulation” in our 2025 Form 10-K for additional information. We provide additional information on the composition of deposits in “Consolidated Balance Sheets Analysis—Table 7: Funding Sources Composition” and in “Part I—Item 1. Financial Statements—Note 8—Deposits and Borrowings.”
Funding Sources
Our funding sources include deposits, senior and subordinated notes, securitized debt obligations, federal funds purchased, securities loaned or sold under agreements to repurchase and FHLB advances secured by certain portions of our loan and securities portfolios. A key objective in our use of these markets is to maintain access to a diversified mix of wholesale funding sources. Insured deposits in our Consumer Banking business represent our primary source of funding, as they are a relatively stable and low cost source of funding. See “Consolidated Balance Sheets Analysis—Table 7: Funding Sources Composition” for additional information on our primary sources of funding.
53 Capital One Financial Corporation (COF)
Table of Contents
Short-Term Borrowings and Long-Term Debt
We also meet our funding needs through the issuance of senior and subordinated notes, securitized debt obligations and federal funds purchased and securities loaned or sold under agreements to repurchase. In addition, we have access to short-term and long-term FHLB advances secured by certain investment securities, multifamily real estate loans and commercial real estate loans.
Our short-term borrowings, which include those borrowings with an original contractual maturity of one year or less, typically consist of federal funds purchased, securities loaned or sold under agreements to repurchase or short-term FHLB advances, and do not include the current portion of long-term debt. Our short-term borrowings decreased by $393 million to $694 million as of June 30, 2026 from December 31, 2025 primarily driven by net maturities of short-term FHLB advances, partially offset by an increase in repurchase agreements.
Our long-term funding primarily consists of securitized debt obligations, senior and subordinated notes and long-term FHLB advances. Our long-term funding decreased by $5.2 billion to $44.7 billion as of June 30, 2026 from December 31, 2025 primarily driven by net maturities of securitized debt, subordinated debt and long-term FHLB advances, partially offset by net issuances of unsecured senior debt. We provide more information on our securitization activity in “Part I—Item 1. Financial Statements—Note 6—Variable Interest Entities and Securitizations” and on our borrowings in “Part I—Item 1. Financial Statements—Note 8—Deposits and Borrowings.”
The following table summarizes issuances of securitized debt obligations, senior and subordinated notes, long-term FHLB advances and their respective maturities or redemptions for the second quarter and first six months of 2026 and 2025.
Table 29: Long-Term Debt Funding Activities
Issuances(1)(2) Maturities/Redemptions(2)
Three Months Ended June 30, Three Months Ended June 30,
(Dollars in millions) 2026 2025 2026 2025
Securitized debt obligations $ 1,093 $ 5,850 $ 3,858 $ 2,935
Senior and subordinated notes — 6,783 2,521 —
Long-term FHLB advances — 523 — —
Total $ 1,093 $ 13,156 $ 6,379 $ 2,935
Issuances(1)(2) Maturities/Redemptions(2)
Six Months Ended June 30, Six Months Ended June 30,
(Dollars in millions) 2026 2025 2026 2025
Securitized debt obligations $ 1,093 $ 5,850 $ 5,421 $ 5,561
Senior and subordinated notes 3,000 8,533 2,939 3,447
Long-term FHLB advances — 523 500 —
Total $ 4,093 $ 14,906 $ 8,860 $ 9,008
__________
(1)Total issuances for the second quarter and first six months of 2025 include $13.2 billion of debt assumed in the Discover acquisition.
(2)Securitized debt obligations for the second quarter and first six months of 2026 include $1.1 billion of outstanding debt that was paid off immediately following the completion of the Brex acquisition.
54 Capital One Financial Corporation (COF)
Table of Contents
Credit Ratings
Our credit ratings impact our ability to access capital markets and our borrowing costs. For more information, see “Part I—Item 1A. Risk Factors” under the heading in our 2025 Form 10-K “A downgrade in our credit ratings could significantly impact our liquidity, funding costs and access to the capital markets.”
Table 30 provides a summary of the credit ratings for the senior unsecured long-term debt of Capital One Financial Corporation and CONA as of June 30, 2026 and December 31, 2025.
Table 30: Senior Unsecured Long-Term Debt Credit Ratings
June 30, 2026 December 31, 2025
Capital One Financial Corporation CONA Capital One Financial Corporation CONA
Moody’s Baa1 A3 Baa1 A3
S&P BBB BBB+ BBB BBB+
Fitch A- A A- A
As of July 22, 2026, Moody’s Investors Service (“Moody’s”) has our credit ratings on a stable outlook, Standard & Poor’s (“S&P”) has our credit ratings on a positive outlook. On May 12, 2026, Fitch Ratings (“Fitch”) put our ratings on review for possible downgrade.
Funding Uses and Commitments
In the normal course of business, we enter into various contractual obligations that may require future cash payments that affect our short-term and long-term liquidity and capital resource needs. Our future contractual cash outflows primarily relate to deposits, borrowings, operating leases and other contractual obligations. Other contractual obligations include lending commitments, leases, purchase obligations and other contractual arrangements. The actual timing and amounts of future cash payments may vary over time due to a number of factors, such as early debt redemptions and changes in deposit balances.
As of June 30, 2026 and December 31, 2025, our total unfunded lending commitments were $762.5 billion and $729.6 billion, respectively, consisting of credit card lines, loan commitments to customers of both our Commercial Banking and Consumer Banking businesses, as well as standby and commercial letters of credit. We generally manage the potential risk of unfunded lending commitments by limiting the total amount of arrangements, monitoring the size and maturity structure of these portfolios and applying the same credit standards for all of our credit activities. For additional information, refer to “Part I—Item 1. Financial Statements—Note 14—Commitments, Contingencies, Guarantees and Others” in this Report.
Our primary involvement with leases is in the capacity as a lessee where we lease premises to support our business. The majority of our leases are operating leases of office space, retail bank branches and cafés. Our operating leases expire at various dates through 2071, although some have extension or termination options, and we assess the likelihood of exercising such options. If it is reasonably certain that we will exercise the options, then we include the impact in the measurement of our right-of-use assets and lease liabilities. As of June 30, 2026 and December 31, 2025, we had $1.4 billion and $1.5 billion in aggregate operating lease obligations, respectively. We provide more information on our lease activity in “Part II—Item 8. Financial Statements and Supplementary Data—Note 8—Premises, Equipment and Leases” in our 2025 Form 10-K.
We have enforceable and legally binding purchase obligations for goods and services such as data management, media and other software and third-party services. As of June 30, 2026 and December 31, 2025, we had $4.0 billion and $3.8 billion, respectively, in aggregate purchase obligations.
We also enter into various contractual arrangements that may require future cash payments, including short-term obligations such as trade payables, commitments to fund certain equity investments, obligations for pension and post-retirement benefit plans, and representation and warranty reserves. These arrangements are discussed in more detail in “Part I—Item 1. Financial Statements—Note 6—Variable Interest Entities and Securitizations,” and “Part I—Item 1. Financial Statements—Note 14—Commitments, Contingencies, Guarantees and Others” in this Report and “Part II—Item 8. Financial Statements and Supplementary Data—Note 15—Employee Benefit Plans” in our 2025 Form 10-K.
55 Capital One Financial Corporation (COF)
Table of Contents
MARKET RISK PROFILE
Our primary market risk exposures include interest rate risk, foreign exchange risk and commodity pricing risk. We are exposed to market risk primarily from the following operations and activities:
•Traditional banking activities of deposit gathering and lending;
•Asset/liability management activities including the management of investment securities, short-term and long-term borrowings and derivatives;
•Foreign operations within our Credit Card and Consumer Banking businesses; and
•Customer accommodation activities within our Commercial Banking business.
We have enterprise-wide risk management policies and limits, approved by our Board of Directors, which govern our market risk management activities. Our objective is to manage our exposure to market risk in accordance with these policies and limits based on prevailing market conditions and long-term expectations. We provide additional information below about our primary sources of market risk, our market risk management strategies and the measures that we use to evaluate these exposures.
Interest Rate Risk
Interest rate risk represents exposure to financial instruments whose values vary with the level or volatility of interest rates. We are exposed to interest rate risk primarily from the differences in the timing between the maturities or repricing of assets and liabilities. We manage our interest rate risk primarily by entering into interest rate swaps and other derivative instruments, which could include caps, floors, options, futures and forward contracts.
We use various industry standard market risk measurement techniques and analyses to measure, assess and manage the impact of changes in interest rates on our net interest income and our economic value of equity and changes in foreign exchange rates on our non-dollar-denominated funding and non-dollar equity investments in foreign operations.
Net Interest Income Sensitivity
Our net interest income sensitivity measure estimates the impact of hypothetical instantaneous movements in interest rates relative to our baseline interest rate forecast on our projected 12-month net interest income. Net interest income sensitivity metrics are derived using the following key assumptions:
•As of June 30, 2026, our metrics assume a market implied baseline interest rate projection for the upper limit of the Federal Funds Target Rate of 4.25% and 4.00% at December 31, 2026 and 2027, respectively.
•In addition to our existing assets, liabilities and derivative positions, we incorporate expected future business growth assumptions. These assumptions include loan and deposit growth, pricing, plans for projected changes in our funding mix and our securities and cash position from our internal corporate outlook that is used in our financial planning process.
•The analysis assumes this forecast of expected future business growth remains unchanged between the baseline rate forecast and rate shock scenarios, including no changes to our interest rate risk management activities like securities and hedging actions.
•We incorporate the dynamic nature of deposit repricing, which includes pricing lags and changes in deposit beta and mix as interest rates change, and the prepayment sensitivity of our mortgage securities to the level of interest rates. In our models, deposit betas and mortgage security prepayments vary dynamically based on the level of interest rates and by product type. In the contexts used in this section, “beta” refers to the change in deposit rate paid relative to the change in the federal funds rate.
•In instances where an interest rate scenario would result in a rate less than 0%, we assume a rate of 0% for that scenario. This assumption applies only to jurisdictions that do not have a practice of employing negative policy rates. In jurisdictions that have negative policy rates, we do not floor interest rates at 0%.
56 Capital One Financial Corporation (COF)
Table of Contents
At the current level of interest rates, our projected 12-month net interest income is expected to remain largely unchanged in higher rate scenarios and decrease in lower rate scenarios. The decrease in lower rate scenarios is driven by lower interest income from our assets, including floating rate credit card and commercial loans, being partially offset by lower interest expense from our deposits and other liabilities, net of our interest rate hedges. The most significant driver in the decrease of our combined 12-month net interest income sensitivity as compared to December 31, 2025, was higher projected interest rates. As we incorporate the dynamic nature of deposit repricing, higher interest rates result in an increase in projected deposit betas under higher and lower rate scenarios.
Economic Value of Equity Sensitivity
Our economic value of equity sensitivity measure estimates the impact of hypothetical instantaneous movements in interest rates on the net present value of our assets and liabilities, including derivative exposures. Economic value of equity sensitivity metrics are derived using the following key assumptions:
•As of June 30, 2026, our metrics assume a market implied baseline interest rate projection for the upper limit of the Federal Funds Target Rate of 4.25% and 4.00% at December 31, 2026 and 2027, respectively.
•The analysis includes only existing assets, liabilities and derivative positions and does not incorporate business growth assumptions or projected balance sheet changes.
•Similar to our net interest income sensitivity measure, we incorporate the dynamic nature of deposit repricing and attrition, which includes pricing lags and changes in deposit beta as interest rates change and the prepayment sensitivity of our mortgage securities to the level of interest rates. In our models, deposit betas and mortgage security prepayments vary dynamically based on the level of interest rates and by product type.
•Balance attrition assumptions for loans, including credit card, personal, auto and commercial loans, remain unchanged between the baseline interest rate forecast and interest rate shock scenarios as the majority of these loans are floating rate or shorter duration fixed rate loans and hence paydowns have a low sensitivity to the level of interest rates.
•For assets and liabilities with embedded optionality, such as mortgage securities and deposit balances, we utilize Monte Carlo simulations to assess economic value with industry-standard term structure modeling of interest rates.
•Our calculations of net present value apply appropriate spreads over the benchmark yield curve for select assets and liabilities to capture the inherent risks (including credit risk) to discount expected interest and principal cash flows.
•In instances where an interest rate scenario would result in a rate less than 0%, we assume a rate of 0% for that scenario. This assumption applies only to jurisdictions that do not have a practice of employing negative policy rates. In jurisdictions that have negative policy rates, we do not floor interest rates at 0%.
Our current economic value of equity sensitivity profile demonstrates that our economic value of equity decreases in higher interest rate scenarios and increases in lower interest rate scenarios. The decrease in higher rate scenarios is due to the decline in the projected value of our fixed rate assets being only partially offset by corresponding movements in the projected value of our deposits and other liabilities. The pace of economic value of equity decrease is larger for the +200 bps scenario as our deposits are assumed to reprice more rapidly in higher interest rate environments. The most significant driver in the increase of our combined economic value of equity sensitivity as compared to December 31, 2025 was higher projected interest rates.
57 Capital One Financial Corporation (COF)
Table of Contents
Table 31 shows the estimated percentage impact on our projected baseline net interest income and our current economic value of equity calculated under the methodology described above as of June 30, 2026 and December 31, 2025.
Table 31: Interest Rate Sensitivity Analysis
June 30, 2026 December 31, 2025
Estimated impact on projected baseline net interest income:
+200 bps — % 1.0 %
+100 bps 0.1 0.6
+50 bps 0.1 0.3
–50 bps (0.1) (0.3)
–100 bps (0.1) (0.7)
–200 bps (1.1) (2.7)
Estimated impact on economic value of equity:
+200 bps (6.0) (4.5)
+100 bps (2.8) (2.0)
+50 bps (1.3) (0.9)
–50 bps 1.2 0.7
–100 bps 2.3 1.2
–200 bps 3.6 1.1
In addition to these industry standard measures, we also consider the potential impact of alternative interest rate scenarios, such as larger rate shocks, higher than +/- 200 bps, as well as steepening and flattening yield curve scenarios in our internal interest rate risk management decisions. We also regularly review the sensitivity of our interest rate risk metrics to changes in our key modeling assumptions, such as our loan and deposit balance forecasts, mortgage prepayments and deposit repricing.
Limitations of Market Risk Measures
The interest rate risk models that we use in deriving these measures incorporate contractual information, internally developed assumptions and proprietary modeling methodologies, which project borrower and depositor behavior patterns in certain interest rate environments. Other market inputs, such as interest rates, market prices and interest rate volatility, are also critical components of our interest rate risk measures. We regularly evaluate, update and enhance these assumptions, models and analytical tools as we believe appropriate to reflect our best assessment of the market environment and the expected behavior patterns of our existing assets and liabilities.
There are inherent limitations in any methodology used to estimate the exposure to changes in market interest rates. The sensitivity analysis described above contemplates only certain movements in interest rates and is performed at a particular point in time based on our existing balance sheet and, in some cases, expected future business growth and funding mix assumptions. The strategic actions that management may take to manage our balance sheet may differ significantly from our projections, which could cause our actual earnings and economic value of equity sensitivities to differ substantially from the above sensitivity analysis.
For further information on our interest rate exposures, see “Part I—Item 1. Financial Statements—Note 9—Derivative Instruments and Hedging Activities.”
58 Capital One Financial Corporation (COF)
Table of Contents
Foreign Exchange Risk
Foreign exchange risk represents exposure to changes in the values of current holdings and future cash flows denominated in other currencies. We are exposed to foreign exchange risk primarily from the intercompany funding denominated in pound sterling (“GBP”) and the Canadian dollar (“CAD”) that we provide to our businesses in the U.K. and Canada and net equity investments in those businesses. We are also exposed to foreign exchange risk due to changes in the dollar-denominated value of future earnings and cash flows from our foreign operations and from our Euro (“EUR”)-denominated borrowing.
Our non-dollar denominated intercompany funding and EUR-denominated borrowing expose our earnings to foreign exchange transaction risk. We manage these transaction risks by using forward foreign currency derivatives and cross-currency swaps to hedge our exposures. We measure our foreign exchange transaction risk exposures by applying a 1% U.S. dollar appreciation shock against the value of the non-dollar denominated intercompany funding and EUR-denominated borrowing and their related hedges, which shows the impact to our earnings from foreign exchange risk. Our nominal intercompany funding outstanding with interest accrued was 1.7 billion GBP and 1.5 billion GBP as of June 30, 2026 and December 31, 2025, respectively, and 953 million CAD and 1.1 billion CAD as of June 30, 2026 and December 31, 2025, respectively. Our nominal EUR-denominated borrowing outstanding with interest accrued was 500 million EUR and 505 million EUR as of June 30, 2026 and December 31, 2025, respectively.
Certain non-dollar equity investments in foreign operations expose our balance sheet and capital ratios to translation risk in AOCI. We manage our translation risk by entering into foreign currency derivatives designated as net investment hedges. We measure these exposures by applying a 30% U.S. dollar appreciation shock, which we believe approximates a significant adverse shock over a one-year time horizon, against the value of the equity invested in our foreign operations net of related net investment hedges where applicable. Our primary exposure is to our U.K. and Canadian operations and the gross equity amounts were 2.4 billion GBP and 2.3 billion GBP as of June 30, 2026 and December 31, 2025, respectively, and 2.9 billion CAD and 2.8 billion CAD as of June 30, 2026 and December 31, 2025, respectively. Additionally, we have immaterial foreign translation exposure to a small number of other currencies.
As a result of our derivative management activities, we believe our net exposure to foreign exchange risk is minimal. For more information, see “Item 1. Financial Statements—Note 9—Derivative Instruments and Hedging Activities” and “Item 1. Financial Statements—Note 10—Stockholders’ Equity.”
Risk Related to Customer Accommodation Derivatives
We offer interest rate, commodity and foreign currency derivatives as an accommodation to our customers within our Commercial Banking business. We offset the majority of the market risk of these customer accommodation derivatives by entering into offsetting derivatives transactions with other counterparties. We use value-at-risk (“VaR”) as the primary method to measure the market risk in our customer accommodation derivative activities on a daily basis. VaR is a statistical risk measure used to estimate the potential loss from movements observed in the recent market environment. We employ a historical simulation approach using the most recent 500 business days and use a 99% confidence level and a holding period of one business day. As a result of offsetting our customer exposures with other counterparties, we believe that our net exposure to market risk in our customer accommodation derivatives is minimal. For further information on our risk related to customer accommodation derivatives, see “Item 1. Financial Statements—Note 9—Derivative Instruments and Hedging Activities.”
59 Capital One Financial Corporation (COF)
Table of Contents
SUPERVISION AND REGULATION
We provide information on our Supervision and Regulation in our 2025 Form 10-K under “Part I—Item 1. Business—Supervision and Regulation” and in our Q1 2026 Form 10-Q under “Part I—Item 2. MD&A—Supervision and Regulation.”
60 Capital One Financial Corporation (COF)
Table of Contents
FORWARD-LOOKING STATEMENTS
From time to time, we have made and will make forward-looking statements, including those that discuss, among other things: strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns, expenses, assets, liabilities, capital and liquidity measures, capital allocation plans, accruals for claims in litigation and for other claims against us; earnings per share, efficiency ratio, operating efficiency ratio or other financial measures for us; future financial and operating results; our plans, objectives, expectations and intentions; and the assumptions that underlie these matters.
To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements often use words such as “will,” “anticipate,” “target,” “expect,” “think,” “estimate,” “intend,” “plan,” “goal,” “believe,” “forecast,” “outlook” or other words of similar meaning. Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new information, future events or otherwise. For additional information on factors that could materially influence forward-looking statements included in this Report, see the risk factors set forth under “Part I—Item 1A. Risk Factors” in our 2025 Form 10-K. You should carefully consider the factors discussed below, and in our Risk Factors or other disclosures, in evaluating these forward-looking statements.
Numerous factors could cause our actual results to differ materially from those described in such forward-looking statements, including, among other things:
•risks related to the integration of the Transaction, including our ability to successfully integrate our businesses, incur substantial expenses related to the Transaction and to the integration of Discover, and the expenses may be greater than anticipated due to factors, some or all of which may be outside our control; our ability to realize all of the anticipated benefits of the Transaction, or those benefits may take longer to realize than expected due to factors that may be outside our control; the integration of Discover may have an adverse effect on our business and results of operations due to the diversion of a substantial portion of the time and attention of our management team; potential employee attrition; and other factors that may affect our future results;
•changes and instability in the macroeconomic environment, resulting from factors that include, but are not limited to, monetary, fiscal and trade policy actions such as tariffs, geopolitical conflicts or instability, such as the war in Ukraine, the ongoing conflict in the Middle East and the political instability in Venezuela, labor shortages, government shutdowns, inflation and deflation, changes in energy costs, potential recessions, technology-driven disruption of certain industries, adverse developments impacting the U.S. or global banking industry, including a deterioration in private credit markets and potential spread to other credit markets, changing immigration policies, lower demand for credit, changes in deposit practices and payment patterns;
•fluctuations in interest rates;
•our ability to maintain adequate sources of funding and liquidity to operate our business;
•increases in credit losses and delinquencies and the impact of incorrectly estimated expected losses, which could result in inadequate reserves;
•our ability to maintain adequate capital or liquidity levels or to comply with revised capital or liquidity requirements, which could have a negative impact on our financial results and our ability to return capital to our stockholders;
•limitations on our ability to receive dividends from our subsidiaries;
•a downgrade in our credit ratings;
•our ability to develop, operate and adapt our operational, technology and organizational infrastructure suitable for the nature of our business;
•increased costs, reductions in revenue, reputational damage, legal exposure and business disruptions that can result from a cyber-attack or other security incident on us or third parties (including their supply chains) with which we conduct business, including an incident that results in the theft, loss, manipulation or misuse of information, or the disabling of systems and access to information critical to business operations;
61 Capital One Financial Corporation (COF)
Table of Contents
•the use, reliability and accuracy of the models, AI, and data on which we rely;
•our ability to manage risks of internal and external fraud;
•compliance with new and existing domestic and foreign laws, regulations and regulatory expectations, which may change over time including as a result of the political and policy goals of elected and appointed officials;
•compliance with applicable laws and regulations related to privacy, data protection and data security, in addition to compliance with our own privacy policies and contractual obligations to third parties;
•developments, changes or actions relating to any litigation, governmental investigation or regulatory enforcement action or matter involving us;
•our response to competitive pressures;
•the amount and rate of deposit growth and changes in deposit costs;
•our ability to execute on our strategic initiatives and operational plans;
•change in market preference towards other operators of payment networks and alternative payment providers;
•our ability to create and maintain a strong base of network licensees and achieving meaningful global card acceptance;
•legislation, regulation and merchants’ efforts to reduce the fees (including the interchange component) charged by credit and debit card networks and acquirers to facilitate card transactions;
•the number of large merchants that accept cards on our recently acquired Discover Network or PULSE Network;
•defaults or risks from bankruptcies, liquidations, restructurings, consolidations and outages by our network participants;
•our ability to invest successfully in and introduce digital and other technological developments across all our businesses;
•our success in integrating acquired businesses and loan portfolios, and our ability to realize anticipated benefits from announced transactions and strategic partnerships;
•changes in the reputation of, or expectations regarding, us or the financial services industry with respect to practices, products, services or financial condition;
•our ability to protect our intellectual property rights;
•the success of our marketing efforts in attracting and retaining customers;
•our risk management strategies;
•our ability to attract, develop, retain and motivate key senior leaders and skilled employees;
•our ability to manage risks from catastrophic events;
•climate change manifesting as physical or transition risks;
•our assumptions or estimates in our financial statements;
•the soundness of other financial institutions and other third parties, actual or perceived; and
•other risk factors identified from time to time in our public disclosures, including in the reports that we file with the SEC.
62 Capital One Financial Corporation (COF)
Table of Contents
SUPPLEMENTAL TABLE
Reconciliation of Non-GAAP Measures
Table A—Reconciliation of Non-GAAP Measures
The following non-GAAP measures consist of TCE, tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio. We consider these metrics to be key financial performance measures that management uses when assessing returns and capital management over time. While these non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies. The following table presents reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with U.S. GAAP. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with U.S. GAAP.
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in millions, except as noted) 2026 2025 2026 2025
TCE (average):
Stockholders’ equity $ 114,518 $ 86,918 $ 114,537 $ 74,647
Goodwill and other intangible assets(1) (44,033) (29,114) (42,380) (22,170)
Noncumulative perpetual preferred stock (5,407) (5,355) (5,407) (5,101)
TCE $ 65,078 $ 52,449 $ 66,750 $ 47,376
Return on TCE (average):
Net income (loss) available to common stockholders $ 2,935 $ (4,340) $ 5,016 $ (2,998)
Income (loss) from discontinued operations, net of tax — (14) (7) (14)
Net income (loss) available to common stockholders less income (loss) from discontinued operations 2,935 (4,326) 5,023 (2,984)
TCE (average) $ 65,078 $ 52,449 $ 66,750 $ 47,376
Return on TCE 18.04% (32.99)% 15.05% (12.60)%
Tangible assets (average):
Total assets $ 682,079 $ 572,446 $ 679,050 $ 532,354
Goodwill and other intangible assets(1) (44,033) (29,114) (42,380) (22,170)
Tangible assets $ 638,046 $ 543,332 $ 636,670 $ 510,184
Return on tangible assets (average):
Net income (loss) $ 3,020 $ (4,277) $ 5,194 $ (2,873)
Income (loss) from discontinued operations, net of tax — (14) (7) (14)
Net income (loss) less income (loss) from discontinued operations, net of tax 3,020 (4,263) 5,201 (2,859)
Tangible assets (average) $ 638,046 $ 543,332 $ 636,670 $ 510,184
Return on tangible assets 1.89 % (3.14)% 1.63% (1.12)%
63 Capital One Financial Corporation (COF)
Table of Contents
(Dollars in millions, except as noted) June 30, 2026 June 30, 2025 December 31, 2025
TCE (period-end):
Stockholders’ equity $ 113,793 $ 110,956 $ 113,616
Goodwill and other intangible assets(1) (43,840) (42,012) (40,876)
Noncumulative perpetual preferred stock (5,407) (5,407) (5,407)
TCE $ 64,546 $ 63,537 $ 67,333
Tangible assets (period-end):
Total assets $ 673,835 $ 658,968 $ 669,009
Goodwill and other intangible assets(1) (43,840) (42,012) (40,876)
Tangible assets $ 629,995 $ 616,956 $ 628,133
Tangible book value per common share:
TCE (period-end) $ 64,546 $ 63,537 $ 67,333
Outstanding common shares 613.5 639.5 625.1
Tangible book value per common share $ 105.21 $ 99.35 $ 107.72
TCE ratio
TCE (period-end) $ 64,546 $ 63,537 $ 67,333
Tangible assets (period-end) 629,995 616,956 628,133
TCE ratio 10.2 % 10.3% 10.7 %
__________
(1)Includes impact of related deferred taxes.
64 Capital One Financial Corporation (COF)
Table of Contents
Glossary and Acronyms
2022 Call Report: Consolidated Reports of Condition and Income (FFIEC 031) as of December 31, 2022.
Allowance coverage ratio: Allowance for credit losses as a percentage of loans held for investment.
Amortized cost basis: The amount at which a financing receivable or investment is originated or acquired, adjusted for applicable accrued interest, accretion, or amortization of premium, discount, and net deferred fees or costs, collection of cash, write-offs, foreign exchange and fair value hedge accounting adjustments.
Annual Report: References to our “2025 Form 10-K” are to our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Bank: CONA, Capital One Financial Corporation’s principal operating subsidiary.
Basel Committee: The Basel Committee on Banking Supervision.
Basel III Capital Rules: The regulatory capital requirements established by the Federal Banking Agencies in July 2013 to implement the Basel III capital framework developed by the Basel Committee as well as certain Dodd-Frank Act and other capital provisions.
Basel III Finalization Proposals: Two notices of proposed rulemakings released by the Federal Banking Agencies on March 19, 2026 to revise the Basel III Capital Rules applicable to certain U.S. banking organizations.
Basel III standardized approach: The Basel III Capital Rules modified Basel I to create the Basel III standardized approach.
Brex: A payment services fintech company that specializes in streamlining the process for businesses to issue corporate cards, automate expense management and make secure, real-time payments.
Brex acquisition: On April 7, 2026, we completed the acquisition of Brex pursuant to the terms of an Agreement and Plan of Merger and Reorganization dated January 22, 2026.
Brex Closing Date: The acquisition of Brex was completed on April 7, 2026.
Capital One or the Company: Capital One Financial Corporation and its subsidiaries.
Carrying value (with respect to loans): The amount at which a loan is recorded on the consolidated balance sheets. For loans recorded at amortized cost basis, carrying value is the unpaid principal balance net of unamortized deferred loan origination fees and costs, and unamortized purchase premium or discount. For loans that are or have been on nonaccrual status, the carrying value is also reduced by any net charge-offs that have been recorded and the amount of interest payments applied as a reduction of principal under the cost recovery method. For credit card loans, the carrying value also includes interest that has been billed to the customer, net of any related reserves. Loans held for sale are recorded at either fair value (if we elect the fair value option) or at the lower of cost or fair value.
Closing Date: The Discover acquisition was completed on May 18, 2025.
Common equity Tier 1 (“CET1”) capital: CET1 capital primarily includes qualifying common shareholders’ equity, retained earnings and certain AOCI amounts less certain deductions for goodwill, intangible assets, and certain deferred tax assets.
CONA: Capital One, National Association, one of our wholly-owned subsidiaries, which offers a broad spectrum of banking products and financial services to consumers, small businesses and commercial clients.
CONA Bank Merger: The merger of Discover Bank into CONA with CONA as the surviving entity.
Credit risk: The risk to current or projected financial condition and resilience arising from an obligor’s failure to meet the terms of any contract with the Company or otherwise perform as agreed.
Derivative: A contract or agreement whose value is derived from changes in interest rates, foreign exchange rates, prices of securities or commodities, creditworthiness for credit default swaps or financial or commodity indices.
65 Capital One Financial Corporation (COF)
Table of Contents
Diners Club: Diners Club International, a global payments network of licensees, which are generally financial institutions, that issue Diners Club branded charge cards and/or provide card acceptance services.
Discontinued operations: The operating results of a component of an entity, as defined by Accounting Standards Codification 205, that are removed from continuing operations when that component has been disposed of or it is management’s intention to sell the component.
Discover: Discover Financial Services, a Delaware corporation.
Discover Card Product Misclassification: Discover’s incorrect classification of certain credit card accounts into its highest merchant and merchant acquirer pricing tier.
Discover Network: The network that provides transaction processing and settlement services for credit and debit cards.
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”): Regulatory reform legislation signed into law on July 21, 2010. This law broadly affects the financial services industry and contains numerous provisions aimed at strengthening the sound operation of the financial services sector.
Exchange Act: The Securities Exchange Act of 1934, as amended.
eXtensible Business Reporting Language (“XBRL”): A language for the electronic communication of business and financial data.
Federal Banking Agencies: The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation.
Federal Deposit Insurance Corporation (“FDIC”): An independent U.S. governmental agency that administers the Deposit Insurance Fund.
Federal Reserve: The Board of Governors of the Federal Reserve System.
FICO score: A measure of consumer credit risk provided by credit bureaus, typically produced from statistical modeling software created by FICO (formerly known as “Fair Isaac Corporation”) utilizing data collected by the credit bureaus.
Financial difficulty modification (“FDM”): An FDM is deemed to occur when a loan modification is made to a borrower experiencing financial difficulty in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination of these modifications in the current reporting period.
Foreign exchange contracts: Contracts that provide for the future receipt or delivery of foreign currency at previously agreed-upon terms.
Framework: The Capital One enterprise-wide risk management framework.
Global Payment Network: The Discover Network, PULSE Network and Diners Club, collectively.
GSE or Agency: A government-sponsored enterprise or agency is a financial services corporation created by the U.S. Congress. Examples of U.S. government agencies include the Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), Government National Mortgage Association (“Ginnie Mae”) and the Federal Home Loan Bank (“FHLB”).
Globally Systematically Important Bank Surcharge (“G-SIB Surcharge”): The capital buffer imposed on U.S. banking organizations designated as global systematically important banks (“G-SIBs”) under the Federal Reserve’s capital framework. The surcharge increases a G-SIB’s minimum Common Equity Tier 1 (“CET1”) capital requirement based on its systematic risk score, which considers factors such as size, interconnectedness, complexity, cross-jurisdictional activity, and sustainability.
Interest rate sensitivity: The exposure to interest rate movements.
Interest rate swaps: Contracts in which a series of interest rate flows in a single currency are exchanged over a prescribed period. Interest rate swaps are the most common type of derivative contract that we use in our asset/liability management activities.
66 Capital One Financial Corporation (COF)
Table of Contents
Investment grade: Represents a Moody’s long-term rating of Baa3 or better; and/or an S&P long-term rating of BBB- or better; and/or a Fitch long-term rating of BBB- or better; or if unrated, an equivalent rating using our internal risk ratings. Instruments that fall below these levels are considered to be non-investment grade.
Investor Entities: Entities that invest in community development entities (“CDEs”) that provide debt financing to businesses and non-profit entities in low-income and rural communities.
LCR Rule: The final rules published by the Basel Committee and as implemented by the Federal Banking Agencies in 2014 for the Basel III Liquidity Coverage Ratio (“LCR”) in the U.S. The LCR is calculated by dividing the amount of an institution’s high-quality, unencumbered liquid assets by its estimated net cash outflow, as defined and calculated in accordance with the LCR Rule.
Leverage ratio: Tier 1 capital divided by average assets after certain adjustments, as defined by regulators.
Liquidity risk: The risk that the Company will not be able to meet its future financial obligations as they come due, or invest in future asset growth because of an inability to obtain funds at a reasonable price within a reasonable time.
Loss severity: Loss given default.
Managed presentation: A non-GAAP presentation of business segment results derived from our internal management accounting and reporting process, which employs various allocation methodologies, including funds transfer pricing, to assign certain balance sheet assets, deposits and other liabilities and their related revenues and expenses directly or indirectly attributable to each business segment. The results of our individual businesses reflect the manner in which management evaluates performance and makes decisions about funding our operations and allocating resources and are intended to reflect each segment as if it were a stand-alone business.
Market risk: The risk that an institution’s earnings or the economic value of equity could be adversely impacted by changes in interest rates, foreign exchange rates or other market factors.
Master netting agreement: An agreement between two counterparties that have multiple contracts with each other that provides for the net settlement of all contracts through a single payment in the event of default or termination of any one contract.
Merger: The merger of Merger Sub with and into Discover, with Discover as the surviving entity, pursuant to the Merger Agreement.
Merger Agreement: Agreement and Plan of Merger, dated as of February 19, 2024, by and among Discover, Capital One and Merger Sub.
Merger Sub: Vega Merger Sub, Inc.
Mortgage servicing rights (“MSRs”): The right to service a mortgage loan when the underlying loan is sold or securitized. Servicing includes collections of principal, interest and escrow payments from borrowers and accounting for and remitting principal and interest payments to investors.
Net charge-off rate: Represents (annualized) net charge-offs divided by average loans held for investment for the period. Negative net charge-offs and related rates are captioned as net recoveries.
Net interest margin: Represents (annualized) net interest income divided by average interest-earning assets for the period.
Nonperforming loans: Generally include loans that have been placed on nonaccrual status. We do not report loans classified as held for sale as nonperforming.
NSFR Rule: The final rules published by the Basel Committee and as issued by the Federal Banking Agencies in October 2020 implementing the Basel III Net Stable Funding Ratio (“NSFR”) in the U.S. The NSFR measures the stability of our funding profile and requires us to maintain minimum amounts of stable funding to support our assets, commitments and derivatives exposures over a one-year period.
67 Capital One Financial Corporation (COF)
Table of Contents
Public Fund Deposits: Deposits that are derived from a variety of political subdivisions such as school districts and municipalities.
PULSE Network: The network which operates an electronic funds transfer network, providing financial institutions issuing debit cards on the PULSE Network with access to ATMs domestically and internationally, as well as merchant acceptance throughout the U.S. for debit card transactions.
Purchase volume: Consists of purchase transactions, net of returns, for the period, and excludes cash advance and balance transfer transactions.
Rating agency: An independent agency that assesses the credit quality and likelihood of default of an issue or issuer and assigns a rating to that issue or issuer.
Repurchase agreement: An instrument used to raise short-term funds whereby securities are sold with an agreement for the seller to buy back the securities at a later date.
Restructuring charges: Charges associated with the realignment of resources supporting various businesses, primarily consisting of severance and related benefits pursuant to our ongoing benefit programs and impairment of certain assets related to the business locations and/or activities being exited.
Risk-weighted assets: On- and off-balance sheet assets that are assigned to one of several broad risk categories and weighted by factors representing their risk and potential for default.
Second Step Merger: The merger of Discover with and into Capital One, with Capital One as the surviving entity.
Securitized debt obligations: A type of asset-backed security and structured credit product constructed from a portfolio of fixed-income assets.
Stress capital buffer requirement: A component of our standardized approach capital conservation buffer, which is recalibrated annually based on the results of our supervisory stress tests.
Stress Capital Buffer Rule: The final rule issued by the Federal Reserve in March 2020 to implement the stress capital buffer requirement.
Stress Testing Transparency Proposal: The Federal Reserve’s October 2025 proposal for the Federal Reserve to annually publish comprehensive documentation on the stress test models, invite public comment on any material changes to those models, and annually publish the stress test scenarios for comment.
Subprime: For purposes of lending in our Credit Card business, we generally consider FICO scores of 660 or below, or other equivalent risk scores, to be subprime. For purposes of auto lending in our Consumer Banking business, we generally consider FICO scores of 620 or below to be subprime.
Tangible common equity (“TCE”): A non-GAAP financial measure calculated as common equity less goodwill and other intangible assets, inclusive of any related deferred tax liabilities.
This Report: Quarterly Report on Form 10-Q for the period ended June 30, 2026.
Transaction or Discover acquisition: On May 18, 2025, we completed the acquisition of Discover in an all-stock transaction as outlined in the Merger Agreement dated February 19, 2024.
Unfunded lending commitments: Legally binding agreements to provide a defined level of financing until a specified future date.
U.S. GAAP: Generally accepted accounting principles in the U.S. Accounting rules and conventions defining acceptable practices in preparing financial statements in the U.S.
Variable interest entity (“VIE”): An entity that, by design, either (i) lacks sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties; or (ii) has equity investors that do not have (a) the ability to make significant decisions relating to the entity’s operations through voting rights, (b) the obligation to absorb the expected losses, and/or (c) the right to receive the residual returns of the entity.
68 Capital One Financial Corporation (COF)
Table of Contents
Acronyms
ABS: Asset-backed securities
AOCI: Accumulated other comprehensive income
ASU: Accounting Standards Update
ATM: Automated teller machine
BHC: Bank holding company
bps: Basis points
CAD: Canadian dollar
CCP: Central Counterparty Clearinghouse, or Central Clearinghouse
CDE: Community development entities
CEO: Chief Executive Officer
CET1: Common equity Tier 1 capital
CFO: Chief Financial Officer
CFPB: Consumer Financial Protection Bureau
CMBS: Commercial mortgage-backed securities
CME: Chicago Mercantile Exchange
CODM: Chief Operating Decision Maker
COEP: Capital One (Europe) plc
COF: Capital One Financial Corporation
COMET: Capital One Multi-asset Execution Trust
CONA: Capital One, National Association
COPAR: Capital One Prime Auto Receivables Trusts
CVA: Credit valuation adjustment
DCENT: Discover Card Execution Note Trust
DCF: Discounted cash flow
EUR: Euro
Fannie Mae: Federal National Mortgage Association
FCM: Futures commission merchant
FDIC: Federal Deposit Insurance Corporation
FDM: Financial difficulty modification
FFIEC: Federal Financial Institutions Examination Council
FHLB: Federal Home Loan Bank
FICC - GSD: Fixed Income Clearing Corporation - Government Securities Division
FICO: Fair Isaac Corporation
Fitch: Fitch Ratings
Freddie Mac: Federal Home Loan Mortgage Corporation
GAAP: Generally accepted accounting principles in the U.S.
GBP: Pound sterling
Ginnie Mae: Government National Mortgage Association
G-SIB: Global systemically important banks
GSE or Agency: Government-sponsored enterprise
ICE: Intercontinental Exchange
IRM: Independent Risk Management
LCH: LCH Group
69 Capital One Financial Corporation (COF)
Table of Contents
LCR: Liquidity coverage ratio
LLC: Limited liability company
Moody’s: Moody’s Investors Service
MSRs: Mortgage servicing rights
NSFR: Net stable funding ratio
OCC: Office of the Comptroller of the Currency
OCI: Other comprehensive income
OTC: Over-the-counter
PCA: Prompt corrective action
RMBS: Residential mortgage-backed securities
S&P: Standard & Poor’s
SEC: U.S. Securities and Exchange Commission
SOFR: Secured Overnight Financing Rate
TCE: Tangible common equity
U.K.: United Kingdom
U.S.: United States of America
VaR: Value-At-Risk
VIE: Variable interest entity
70 Capital One Financial Corporation (COF)
Table of Contents