CAPITAL ONE FINANCIAL CORP
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
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Credit Card Business Results
Credit Card Business
The primary sources of revenue for our Credit Card business are net interest income, net interchange income and fees collected from customers. Expenses primarily consist of the provision for credit losses, operating costs and marketing expenses.
Our Credit Card business generated net income from continuing operations of $1.2 billion and $961 million in the first quarters of 2025 and 2024, 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 March 31, | |||
|---|---|---|---|
| (Dollars in millions, except as noted) | 2025 | 2024 | Change |
| Selected income statement data: | |||
| Net interest income | $5,654 | $5,272 | 7% |
| Non-interest income | 1,511 | 1,476 | 2 |
| Total net revenue(1) | 7,165 | 6,748 | 6 |
| Provision for credit losses | 1,926 | 2,259 | (15) |
| Non-interest expense | 3,638 | 3,229 | 13 |
| Income from continuing operations before income taxes | 1,601 | 1,260 | 27 |
| Income tax provision | 382 | 299 | 28 |
| Income from continuing operations, net of tax | $1,219 | $961 | 27 |
| Selected performance metrics: | |||
| Average loans held for investment | $156,407 | $149,645 | 5 |
| Average yield on loans(2) | 18.54% | 18.84% | (30)bps |
| Total net revenue margin(3) | 18.32 | 17.99 | 33 |
| Net charge-offs | $2,399 | $2,207 | 9% |
| Net charge-off rate | 6.14% | 5.90% | 24bps |
| Purchase volume | $157,948 | $150,171 | 5% |
| (Dollars in millions, except as noted) | March 31, 2025 | December 31, 2024 | Change |
| Selected period-end data: | |||
| Loans held for investment | $157,189 | $162,508 | (3)% |
| 30+ day performing delinquency rate | 4.26% | 4.53% | (27)bps |
| 30+ day delinquency rate | 4.27 | 4.54 | (27) |
| Nonperforming loan rate(4) | 0.01 | 0.01 | — |
| Allowance for credit losses | $12,510 | $12,974 | (4)% |
| Allowance coverage ratio | 7.96% | 7.98% | (2)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 $705 million and $630 million in the first quarters of 2025 and 2024, 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)Within our credit card loan portfolio, certain loans in our international card businesses are classified as nonperforming. See “Nonperforming Loans and Other Nonperforming Assets” for additional information.
| 21 | Capital One Financial Corporation (COF) |
Key factors affecting the results of our Credit Card business for the first quarter of 2025 compared to the first quarter of 2024, and changes in financial condition and credit performance between March 31, 2025 and December 31, 2024 include the following:
Net Interest Income: Net interest income increased by $382 million to $5.7 billion in the first quarter of 2025 primarily driven by higher average loan balances and the impacts of the elimination of revenue sharing provisions due to the Walmart Program Termination.
Non-Interest Income: Non-interest income increased by $35 million to $1.5 billion in the first quarter of 2025 primarily due to higher net interchange fees due to an increase in purchase volume.
Provision for Credit Losses: Provision for credit losses decreased by $333 million to $1.9 billion in the first quarter of 2025 primarily driven by an allowance release of $473 million compared to an allowance build of $52 million in the first quarter of 2024.
Non-Interest Expense: Non-interest expense increased by $409 million to $3.6 billion in the first quarter of 2025 primarily driven by continued investment in technology and increased marketing spend.
Period-end loans held for investment decreased by $5.3 billion to $157.2 billion as of March 31, 2025 from December 31, 2024 primarily driven by seasonal paydowns.
Average loans held for investment increased by $6.8 billion to $156.4 billion in the first quarter of 2025 compared to the first quarter of 2024 driven by growth in purchase volume.
Net Charge-Off and Delinquency Metrics:
The net charge-off rate increased by 24 bps to 6.14% in the first quarter of 2025 compared to the first quarter of 2024 primarily driven by the 41 bps impact of the elimination of loss sharing provisions due to the Walmart Program Termination. Absent the impact of the elimination of these loss sharing provisions, the net charge-off rate would have been 5.73% in the first quarter of 2025.
The 30+ day delinquency rate decreased by 27 bps to 4.27% as of March 31, 2025 from December 31, 2024.
| 22 | Capital One Financial Corporation (COF) |
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