CAPITAL ONE FINANCIAL CORP

Table 5 displays the components of non-interest expense for the third quarter and first nine months of 2025 and 2024.

Table 5: Non-Interest Expense

(1)Includes expenses of $46 million and $87 million related to our deferred compensation plan investments for the third quarter and first nine months of 2025, respectively, and expenses of $36 million and $89 million related to our deferred compensation plan investments for the third quarter and first nine months of 2024, respectively. These amounts have corresponding offsets from investments in other non-interest income.

Non-interest expense increased by $2.9 billion to $8.3 billion in the third quarter of 2025 compared to the third quarter of 2024 and increased by $5.8 billion to $21.2 billion in the first nine months of 2025 compared to the first nine months of 2024 primarily driven by impacts from the Transaction, including integration expenses, as well as continued investments in technology.

For the three and nine months ended September 30, 2025, we incurred $348 million and $757 million, respectively, of integration expenses related to the Transaction, primarily driven by salaries and associate benefits and professional services, which are included within operating expense in our consolidated statements of income. Since the announcement of the Transaction in the first quarter of 2024, we have incurred $991 million of integration expenses as of September 30, 2025.

Income Taxes

We recorded an income tax expense of $1.2 billion (27.1% effective income tax rate) and an income tax benefit of $152 million (negative 83.5% effective income tax rate) in the third quarter and first nine months of 2025, respectively, compared to an income tax expense of $441 million (19.9% effective income tax rate) and $797 million (17.9% effective income tax rate) in the third quarter and first nine months of 2024, respectively. Our effective tax rate on income from continuing operations varies between periods due, in part, to the impact of changes in pre-tax income and changes in tax credits, tax-exempt income and non-deductible expenses relative to our pre-tax earnings.

We recorded discrete tax benefits of $1 million and $177 million in the third quarter and first nine months of 2025, respectively.

Our effective tax rate in the third quarter of 2025 was computed utilizing the annual method. We changed our methodology from the year-to-date method utilized in the second quarter of 2025 due to the return of the proportional relationship between our tax provision, tax credit investments and pre-tax income.

We provide additional information on items affecting our income taxes and effective tax rate in “Part II—Item 8. Financial Statements and Supplementary Data—Note 16—Income Taxes” in our 2024 Form 10-K.

Loss from Discontinued Operations, Net of Tax

Loss from discontinued operations consists of results from the discontinued Home Loan business acquired as a part of the Transaction. Loss from discontinued operations, net of tax was $1 million and $15 million in the third quarter and first nine months of 2025, respectively. See “Part I—Item 1. Financial Statements—Note 2—Business Combinations and Discontinued Operations” for additional information.