CAPITAL ONE FINANCIAL CORP
For the period ended Sep 30, 2025. Filed Nov 3, 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.
Sep 30, 2025 · Filed Nov 3, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
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Commercial Banking Business Results
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, net interchange 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 $286 million and $761 millionin the third quarter and first nine months of 2025, respectively, and $263 million and $821 million in the third quarter and first nine months of 2024, respectively.
| 28 | Capital One Financial Corporation (COF) |
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 September 30, · Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions, except as noted) · 2025 · 2024 · Change · 2025 · 2024 · Change | |||||||||||
| Selected income statement data: | |||||||||||
| Net interest income | $586 | $596 | (2)% | $1,760 | $1,804 | (2)% | |||||
| Non-interest income | 318 | 292 | 9 | 965 | 844 | 14 | |||||
| Total net revenue(1) | 904 | 888 | 2 | 2,725 | 2,648 | 3 | |||||
| Provision for credit losses(2) | 9 | 48 | (81) | 232 | 80 | 190 | |||||
| Non-interest expense | 520 | 495 | 5 | 1,495 | 1,493 | — | |||||
| Income from continuing operations before income taxes | 375 | 345 | 9 | 998 | 1,075 | (7) | |||||
| Income tax provision | 89 | 82 | 9 | 237 | 254 | (7) | |||||
| Income from continuing operations, net of tax | $286 | $263 | 9 | $761 | $821 | (7) | |||||
| Selected performance metrics: | |||||||||||
| Average loans held for investment: | |||||||||||
| Commercial and multifamily real estate | $33,104 | $32,416 | 2 | $32,458 | $33,505 | (3) | |||||
| Commercial and industrial | 55,285 | 55,685 | (1) | 55,630 | 55,496 | — | |||||
| Total commercial banking | $88,389 | $88,101 | — | $88,088 | $89,001 | (1) | |||||
| Average yield on loans held for investment(1)(3) | 6.42% | 7.25% | (83)bps | 6.37% | 7.21% | (84)bps | |||||
| Average deposits | $29,889 | $30,365 | (2)% | $30,656 | $31,004 | (1)% | |||||
| Average deposits interest rate | 2.13% | 2.55% | (42)bps | 2.11% | 2.58% | (47)bps | |||||
| Net charge-offs | $46 | $49 | (6)% | $142 | $111 | 28% | |||||
| Net charge-off rate | 0.21% | 0.22% | (1)bps | 0.21% | 0.17% | 4bps | |||||
| (Dollars in millions, except as noted) | September 30, 2025 | December 31, 2024 | Change | ||||||||
| Selected period-end data: | |||||||||||
| Loans held for investment: | |||||||||||
| Commercial and multifamily real estate | $33,461 | $31,903 | 5% | ||||||||
| Commercial and industrial | 55,431 | 55,272 | — | ||||||||
| Total commercial banking | $88,892 | $87,175 | 2 | ||||||||
| Nonperforming loan rate | 1.39% | 1.39% | — | ||||||||
| Nonperforming asset rate(4) | 1.40 | 1.39 | 1bps | ||||||||
| Allowance for credit losses(2) | $1,498 | $1,400 | 7% | ||||||||
| Allowance coverage ratio | 1.69% | 1.61% | 8bps | ||||||||
| Deposits | $29,920 | $31,691 | (6)% | ||||||||
| Loans serviced for others | 51,994 | 52,749 | (1) | ||||||||
(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 the federal statutory tax rate of 21% and state taxes where applicable, 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 $135 million and $143 million as of September 30, 2025 and December 31, 2024, respectively.
(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.
| 29 | Capital One Financial Corporation (COF) |
Key factors affecting the results of our Commercial Banking business for the third quarter and first nine months of 2025 compared to the third quarter and first nine months of 2024, and changes in financial condition and credit performance between September 30, 2025 and December 31, 2024 include the following:
Net Interest Income: Net interest income decreased by $10 million to $586 million in the third quarter of 2025 compared to the third quarter of 2024 and decreased by $44 million to $1.8 billion in the first nine months of 2025 compared to the first nine months of 2024 primarily driven by lower margins.
Non-Interest Income: Non-interest income increased by $26 million to $318 million in the third quarter of 2025 and increased by $121 million to $965 million in the first nine months of 2025 primarily driven by increased fees in our capital markets business.
Provision for Credit Losses: Provision for credit losses decreased by $39 million to $9 million in the third quarter of 2025 primarily driven by a larger allowance release compared to the third quarter of 2024. Provision for credit losses increased by $152 million to $232 million in the first nine months of 2025 primarily driven by a net allowance build compared to an allowance release in the first nine months of 2024.
Non-Interest Expense: Non-interest expense increased $25 million to $520 million in the third quarter of 2025 primarily driven by continued investments in technology. Non-interest expense remained substantially flat at $1.5 billion in the first nine months of 2025 compared to the first nine months of 2024.
Period-end loans held for investment increased by $1.7 billion to $88.9 billion as of September 30, 2025 from December 31, 2024 primarily due to originations outpacing customer payments.
Average loans held for investment increased by $288 million to $88.4 billion in the third quarter of 2025 compared to the third quarter of 2024 primarily due to originations outpacing customer payments. Average loans held for investment decreased by $913 million to $88.1 billion in the first nine months of 2025 compared to the first nine months of 2024 primarily due to customer payments outpacing originations.
Deposits:
Period-end deposits decreased by $1.8 billion to $29.9 billion as of September 30, 2025 from December 31, 2024 primarily driven by seasonality.
Net Charge-Off and Nonperforming Metrics:
The net charge-off rate decreased by 1 bps to 0.21% in the third quarter of 2025 compared to the third quarter of 2024 and increased by 4 bps to 0.21% in the first nine months of 2025 compared to the first nine months of 2024.
The nonperforming loan rate remained flat at 1.39% as of September 30, 2025 compared to December 31, 2024.
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