CAPITAL ONE FINANCIAL CORP

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. Expenses primarily consist of the provision for credit losses, operating costs and marketing expenses.

Our Consumer Banking business generated net income from continuing operations of $403 million and $1.3 billion in the third quarter and first nine months of 2024, respectively, and $611 million and $2.0 billion in the third quarter and first nine months of 2023, 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

(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.

Key factors affecting the results of our Consumer Banking business for the third quarter and first nine months of 2024 compared to the third quarter and first nine months of 2023, and changes in financial condition and credit performance between September 30, 2024 and December 31, 2023 include the following:

•Net Interest Income: Net interest income decreased by $105 million to $2.0 billion in the third quarter of 2024 and decreased by $698 million to $6.1 billion in the first nine months of 2024 primarily driven by lower margins in our retail banking business, partially offset by higher deposits in our retail banking business.

•Non-Interest Income: Non-interest income increased by $40 million to $182 million in the third quarter of 2024 and increased by $87 million to $513 million in the first nine months of 2024 primarily driven by higher interchange revenue from an increase in debit card purchase volume and revenue earned from auto industry services.

•Provision for Credit Losses: Provision for credit losses increased by $138 million to $351 million in the third quarter of 2024 and increased by $360 million to $1.1 billion in the first nine months of 2024 primarily driven by higher net charge-offs and a smaller allowance release in our auto loan portfolio.

•Non-Interest Expense: Non-interest expense remained substantially flat at $1.3 billion in the third quarter of 2024 compared to the third quarter of 2023 and $3.8 billion in the first nine months of 2024 compared to the first nine months of 2023.

•Period-end loans held for investment increased by $1.3 billion to $76.8 billion as of September 30, 2024 from December 31, 2023 primarily driven by growth in our auto loan portfolio.

•Average loans held for investment decreased by $972 million to $76.2 billion in the third quarter of 2024 compared to the third quarter of 2023 and decreased by $2.4 billion to $75.6 billion in the first nine months of 2024 compared to the first nine months of 2023 primarily driven by the impact of lower auto originations in the second half of 2022 and throughout 2023.

Deposits:

•Period-end deposits increased by $13.4 billion to $309.6 billion as of September 30, 2024 from December 31, 2023 primarily driven by continued growth from our national consumer banking strategy.

Net Charge-Off and Delinquency Metrics:

•The net charge-off rate increased by 30 bps to 2.11% in the third quarter of 2024 compared to the third quarter of 2023 and increased by 40 bps to 2.00% in the first nine months of 2024 compared to the first nine months of 2023 primarily driven by higher net charge-offs in our auto loan portfolio.

•The 30+ day delinquency rate decreased by 77 bps to 6.31% as of September 30, 2024 compared to December 31, 2023 primarily driven by lower auto delinquency inventories.