CAPITAL ONE FINANCIAL CORP Quarterly Report for Q3 Ended Sep 30, 2017

Summary

Capital One Financial Corporation's (COF) third quarter 2017 results show a solid increase in net income, driven by growth in interest income from its credit card and auto loan portfolios and higher yields due to rising interest rates. Total net revenue grew by 8% year-over-year for the quarter. The company also benefited from a lower income tax provision. However, these positive trends were partially offset by a 15% increase in the provision for credit losses, primarily due to higher charge-offs in the credit card and auto loan segments, and increased operating expenses related to investments in technology and restructuring activities. Despite an increase in the net charge-off rate, the company's capital position remains strong, with a Common Equity Tier 1 capital ratio of 10.7% as of September 30, 2017. Capital One also announced a new stock repurchase program, authorizing up to $1.85 billion in repurchases, signaling confidence in its financial stability and commitment to returning capital to shareholders. The company's outlook suggests continued earnings per share growth for the remainder of 2017 and into 2018, assuming stable economic conditions.

Key Highlights

• 1Net income available to common stockholders increased by 9% to $1,047 million in Q3 2017 compared to Q3 2016.
• 2Total net revenue increased by 8% to $6,985 million in Q3 2017 compared to Q3 2016.
• 3The provision for credit losses increased by 15% to $1,833 million in Q3 2017 compared to Q3 2016, driven by higher charge-offs.
• 4The net charge-off rate for the total company increased by 51 basis points to 2.61% in Q3 2017 compared to Q3 2016.
• 5Loans held for investment increased by 3% to $252,422 million as of September 30, 2017, compared to December 31, 2016.
• 6Common Equity Tier 1 capital ratio was strong at 10.7% as of September 30, 2017.
• 7The company announced a stock repurchase program of up to $1.85 billion.

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