Capital One Financial Corp (COF, Financial) announced its Q3 2023 earnings on October 26, 2023. The company reported a net income of $1.8 billion, or $4.45 per diluted common share, marking an increase from the net income of $1.4 billion, or $3.52 per diluted common share, in Q2 2023. This also shows an improvement from the net income of $1.7 billion, or $4.20 per diluted common share, in Q3 2022.
Income Statement Summary
Capital One's total net revenue for Q3 2023 increased by 4% to $9.4 billion. The total non-interest expense saw a slight increase of 1% to $4.9 billion, with a 10% increase in marketing and a 1% decrease in operating expenses. Pre-provision earnings increased by 7% to $4.5 billion. The provision for credit losses decreased by $206 million to $2.3 billion, with net charge-offs of $2.0 billion and a $322 million loan reserve build. The net interest margin was 6.69%, an increase of 21 basis points. The efficiency ratio stood at 51.89%, and the operating efficiency ratio was 41.51%.
Balance Sheet Summary
Capital One's common equity Tier 1 capital ratio under the Basel III Standardized Approach was 13.0%. The period-end loans held for investment in the quarter increased by $3.5 billion, or 1%, to $314.8 billion. Credit Card period-end loans increased by $4.3 billion, or 3%, to $146.8 billion, with Domestic Card period-end loans increasing by $4.3 billion, or 3%, to $140.3 billion. The period-end total deposits increased by $2.3 billion, or 1%, to $346.0 billion, while average deposits increased by $1.3 billion, or less than 1%, to $345.0 billion. The interest-bearing deposits rate paid increased by 39 basis points to 3.30%.
Company's Performance
Capital One's Q3 2023 performance was marked by solid results, driven by strong top-line growth in the domestic card business. Richard D. Fairbank, Founder, Chairman, and Chief Executive Officer, stated,
In the third quarter we continued to deliver solid results fueled by strong top-line growth in our domestic card business. Our modern technology capabilities are generating opportunities and driving performance improvements across our businesses.”
Overall, Capital One's Q3 2023 earnings report indicates a positive financial performance with increased net income, revenue growth, and a decrease in provision for credit losses. The company's balance sheet also shows an increase in loans held for investment and total deposits, indicating a healthy financial position.
Explore the complete 8-K earnings release (here) from Capital One Financial Corp for further details.
