CAPITAL ONE FINANCIAL CORP
For the period ended Dec 31, 2025. Filed Feb 19, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 19, 2026
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Capital One Financial Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Capital One Financial Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 19, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| 142 | Capital One Financial Corporation (COF) |
| Allowance for credit losses – Credit Card | |
| Description of the Matter | On December 31, 2025, the Company’s allowance for credit losses for the credit card portfolio was $20.1 billion. As more fully described in Note 1 and Note 5 of the consolidated financial statements, the allowance for credit losses (ACL or allowance) represents management’s current estimate of expected credit losses over the contractual terms of the Company’s held for investment (HFI) loan portfolios as of the balance sheet date and is comprised of two elements. The first is ‘quantitative’ and involves the use of loss forecasting models based upon historical data with adjustments for current conditions and reasonable and supportable forecasts of conditions. The second is ‘qualitative’ and involves factors that represent management’s judgment of the imprecision and risks inherent in the processes and assumptions used in establishing the allowance for credit losses. Auditing the allowance for the credit card portfolio was especially challenging and highly judgmental due to the significant judgment required in establishing certain components of the qualitative element. The qualitative element requires management to make judgments regarding current and forward-looking conditions, internal and external factors, and uncertainty as it relates to economic, model, or forecast risks, where not already captured in the modeled results. |
|---|---|
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of the internal controls over the ACL process, including, among others, controls over the development, operation, and monitoring of loss forecasting models and management review controls over key assumptions and qualitative judgments used in reviewing the final credit card allowance results. Our tests of controls included observation of certain of management’s quarterly ACL governance meetings, at which key management judgments, qualitative elements, and final ACL results are subjected to challenge by management groups independent of the group responsible for producing the ACL estimate.Our audit procedures included, among others, evaluating the comprehensive framework of the ACL, which involved specialists to evaluate the model methodology, model performance and model governance, as well as the conceptual soundness of certain qualitative elements. We also performed testing on data inputs utilized in the qualitative element calculation, as well as recalculated the qualitative element based on the framework. We evaluated the overall credit card ACL, inclusive of qualitative elements, and whether the recorded ACL appropriately reflects expected credit losses on the portfolio. Additionally, we performed searches for contrary evidence, which included reviewing historical loss statistics, peer bank metrics, and subsequent events and considered whether such information indicated that management’s judgements were not reasonable or consistently applied. |
| 143 | Capital One Financial Corporation (COF) |
| Business combination – Fair value of intangible assets | |
| Description of the Matter | As described in Note 2 to the consolidated financial statements, the Company acquired Discover Financial Services (Discover) on May 18, 2025. The Company accounted for this transaction as a business combination and recorded the assets acquired and liabilities assumed from Discover at their respective fair values as of the acquisition date. The fair value of intangible assets acquired from Discover was $17.7 billion as of the acquisition date. Intangible assets were valued using an income approach under which future cash flows for each intangible asset were forecasted, tax-effected and then discounted using an appropriate risk-adjusted discount rate. Auditing the fair value of certain intangible assets, including the purchased credit card relationships, Discover network, and Discover brand, was especially challenging and highly judgmental due to the significant judgment required by management in developing certain components of the discount rates used in the discounted cash flow methodology. These discount rate components are subjective given they are reflective of risk premiums for the market and specific risk profiles of the intangible assets relative to other assets acquired and the overall business. |
|---|---|
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of the internal controls over the process for estimating the fair value of the purchased credit card relationships, Discover network, and Discover brand, including management's controls over establishing the discount rates used in the discounted cash flow methodology and evaluating the completeness and accuracy of key inputs and assumptions used in the discounted cash flow methodology. Our tests of controls included observation and inspection of evidence of certain management valuation review meetings, at which key judgments made by management’s valuation specialists are subject to challenge. Our audit procedures included, among others, testing the estimated fair value of the purchased credit card relationships, Discover network, and Discover brand, which involved specialists to assist us in (i) testing management's methodology and certain significant assumptions used in measuring the fair value of the intangible assets and (ii) developing independent expectations for fair value estimates and discount rates based on third party market data and comparing management's values and discount rate assumptions to the independently developed ranges. We also tested the completeness and accuracy of the underlying data provided by management that was used in the discounted cash flow models. Additionally, we performed searches for contrary evidence, which included, but were not limited to, reviewing current external economic information, peer bank metrics, data points from historical banking acquisitions, and historical Company-specific information and considered whether this information corroborated or contradicted management’s selected assumptions. |
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1994.
Tysons, Virginia
February 19, 2026
| 144 | Capital One Financial Corporation (COF) |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.