CAPITAL ONE FINANCIAL CORP

For the period ended Dec 31, 2023. Filed Feb 23, 2024.

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FY2023 · Filed Feb 23, 2024

COF$195.84-1.4%Stored close · as of Nov 10, 2026

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Contents

Average Balances, Net Interest Income and Net Interest Margin

Table 1 below presents the average outstanding balance, interest income earned, interest expense incurred and average yield for 2023, 2022 and 2021 for each major category of our interest-earning assets and interest-bearing liabilities. Nonperforming loans are included in the average loan balances below.

Table 1: Average Balances, Net Interest Income and Net Interest Margin

	Year Ended December 31,
2023 · 2022 · 2021
(Dollars in millions) · AverageBalance · Interest Income/Expense · Average Yield/Rate(1) · AverageBalance · Interest Income/Expense · Average Yield/Rate(1) · AverageBalance · Interest Income/Expense · Average Yield/Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Credit card	$141,675	$26,267	18.54%		$121,055		$19,626		16.21%	$106,016		$15,474	14.60%
Consumer banking	77,514	6,041	7.79		80,511		5,782		7.18	73,874		5,804	7.86
Commercial banking(3)	92,984	6,363	6.84		92,273		3,702		4.01	77,438		2,119	2.74
Other(4)	—	(1,261)	**		—		(200)		**	—		866	**
Total loans, including loans held for sale	312,173	37,410	11.98		293,839		28,910		9.84	257,328		24,263	9.43
Investment securities	89,105	2,550	2.86		90,608		1,884		2.08	98,394		1,446	1.47
Cash equivalents and other interest-earning assets	39,960	1,978	4.95		22,199		443		2.00	33,614		60	0.18
Total interest-earning assets	441,238	41,938	9.50		406,646		31,237		7.68	389,336		25,769	6.62
Cash and due from banks	3,869			5,054					5,281
Allowance for credit losses	(14,290)			(11,620)					(13,354)
Premises and equipment, net	4,373			4,265					4,257
Other assets	32,617			36,193					39,001
Total assets	$467,807			$440,538					$424,521
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Interest-bearing deposits	$313,737	$9,489	3.02%		$277,208		$2,535		0.91%	$271,500		$956	0.35%
Securitized debt obligations	17,675	959	5.42		15,603		384		2.46	12,336		119	0.96
Senior and subordinated notes	31,109	2,204	7.08		29,286		1,074		3.67	25,530		488	1.91
Other borrowings and liabilities	2,394	45	1.89		7,800		130		1.67	2,261		35	1.57
Total interest-bearing liabilities	364,915	12,697	3.48		329,897		4,123		1.25	311,627		1,598	0.51
Non-interest-bearing deposits	29,817			36,343					34,897
Other liabilities	17,880			19,173					15,441
Total liabilities	412,612			385,413					361,965
Stockholders’ equity	55,195			55,125					62,556
Total liabilities and stockholders’ equity	$467,807			$440,538					$424,521
Net interest income/spread	$29,241	6.03		$27,114		6.43			$24,171		6.11
Impact of non-interest-bearing funding	0.60		0.24					0.10
Net interest margin	6.63%		6.67%					6.21%

(1)Average yield is calculated based on interest income for the period divided by average loans during the period. Interest income does not include any allocations, such as funds transfer pricing. 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 $2.2 billion in 2023, $1.9 billion in 2022 and $1.4 billion in 2021.

(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 the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category. Taxable-equivalent adjustments included in the interest income and yield computations for our commercial loans totaled

55	Capital One Financial Corporation (COF)

approximately $74 million in 2023, 2022 and 2021, 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.

Net interest income increased by $2.1 billion to $29.2 billion in 2023 compared to 2022 primarily driven by higher average loan balances in our credit card loan portfolio and higher asset yields, partially offset by higher funding costs.

Net interest margin decreased by 4 bps to 6.63% in 2023 compared to 2022 primarily driven by higher rates paid on interest-bearing deposits, partially offset by higher asset yields and growth in our credit card loan portfolio.

Our cumulative deposit beta increased to 60% as of December 31, 2023, from 35% as of December 31, 2022 primarily driven by product mix shifts toward higher rate products, deposit pricing lags catching up to earlier increases in market interest rates and competition. We define cumulative deposit beta as the ratio of changes in the rate paid on our interest-bearing deposits to the increases in the upper limit of the federal funds rate during the current rising interest rate cycle.

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