COF

MKT CAP $126.8BP/E 12.4DIV YIELD 1.45%FCF YIELD 23.43%REV TTM $62B +45.3%NET INCOME $10.5BNET CASH $12B52W 176.10 – 257.94SEC XBRL · TTM TO Invalid Date

How COF rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Risk Factors”— “A downgrade in our credit ratings could significantly impact our liquidity, funding costs and access to the capital markets.” Table 31 provides a summary of the credit ratings for the senior unsecured long-term debt of Capital One Financial Corporation and CONA as of December 31, 2025 and 2024.
Table 31: Senior Unsecured Long-Term Debt Credit Ratings December 31, 2025 December 31, 2024 Capital One Financial Corporation CONA Capital One Financial Corporation CONA Moody’s Baa1 A3 Baa1 A3 S&P BBB BBB+ BBB BBB+ Fitch A- A A- A As of February 13, 2026, Moody’s Investors Service (“Moody’s”) and Fitch Ratings (“Fitch”) have our credit ratings on a stable outlook and Standard & Poor’s (“S&P”) has our credit ratings on a positive outlook.
Capital One Financial Corporation (COF) Other Commitments In the normal course of business, we enter into other contractual obligations that may require future cash payments that affect our short-term and long-term liquidity and capital resource needs.
As of December 31, 2025 and 2024, our total unfunded lending commitments were $729.6 billion an d $458.1 billion, respectively, consisting of credit card lines, loan commitments to customers of both our Commercial Banking and Consumer Banking businesses, as well as standby and commercial letters of credit.
Our operating leases expire at various dates th rough 2071, although some have extension or termination options, and we assess the likelihood of exercising such options.
As of both December 31, 2025 and 2024 , we had $1.5 billion in a ggregate operating lease obligations, of which $254 million will be due the following 12 months.
Financial Statements and Supplementary Data—Note 8—Premises, Equipment and Leases” in this Report.
We have enforceable and legally binding purchase obligations for goods and services such as data management, media and other software and third-party services.
As of December 31, 2025 and 2024, we had $3.8 billion and $4 billion, respectively, in aggregate purchase obligations.
Financial Statements and Supplementary Data—Note 19—Commitments, Contingencies, Guarantees and Others.” MARKET RISK PROFILE Our primary market risk exposures include interest rate risk, foreign exchange risk and commodity pricing risk.
We are exposed to market risk primarily from the following operations and activities: • Traditional banking activities of deposit gathering and lending; • Asset/liability management activities including the management of investment securities, short-term and long-term borrowings and derivatives; • Foreign operations within our Credit Card and Consumer Banking businesses; and • Customer accommodation activities within our Commercial Banking business.
Capital One Financial Corporation (COF) We use various industry standard market risk measurement techniques and analyses to measure, assess and manage the impact of changes in interest rates on our net interest income and our economic value of equity and changes in foreign exchange rates on our non-dollar-denominated funding and non-dollar equity investments in foreign operations.
As of June 30, 2025, we integrated the acquired assets and assumed liabilities of Discover that are part of our continuing operations into our interest rate risk framework.
The Transaction, and subsequent business actions, have resulted in modest impacts to both our net interest income and economic value of equity sensitivities.
Net interest income sensitivity metrics are derived using the following key assumptions : • As of December 31, 2025, our metrics assume a market implied baseline interest rate projection for the upper limit of the Federal Funds Target Rate of 3.25% at both December 31, 2026 and 2027. • In addition to our existing assets, liabilities and derivative positions, we incorporate expected future business growth assumptions.
In the contexts used in this section, “beta” refers to the change in deposit rate paid relative to the change in the federal funds rate. • In instances where an interest rate scenario would result in a rate less th an 0%, we assume a rate of 0% for that scenario.
In jurisdictions that have negative policy rates, we do not floor interest rates a t 0%.
At the current level of interest rates, our projected 12-month net interest income is expected to increase in higher rate scenarios and decrease in lower rate scenarios.
Our combined 12-month net interest income sensitivity was largely unchanged as compared to December 31, 2024.
Capital One Financial Corporation (COF) Economic Value of Equity Sensitivity Our economic value of equity sensitivity measure estimates the impact of hypothetical instantaneous movements in interest rates on the net present value of our assets and liabilities, including derivative exposures.
Economic value of equity sensitivity metrics are derived using the following key assumptions: • As of December 31, 2025, our metrics assume a market implied baseline interest rate projection for the upper limit of the Federal Funds Target Rate of 3.25% and 3.25% at both December 31, 2026 and 2027. • The analysis includes only existing assets, liabilities and derivative positions and does not incorporate business growth assumptions or projected balance sheet changes. • Similar to our net interest income sensitivity measure, we incorporate the dynamic nature of deposit repricing and attrition, which includes pricing lags and changes in deposit beta as interest rates change and the prepayment sensitivity of our mortgage securities to the level of interest rates.
In our models, deposit betas and mortgage security prepayments vary dynamically based on the level of interest rates and by product type. • Balance attrition assumptions for loans, including credit card, personal, auto and commercial loans, remain unchanged between the baseline interest rate forecast and interest rate shock scenarios as the majority of these loans are floating rate or shorter duration fixed rate loans and hence paydowns have a low sensitivity to the level of interest rates. • For assets and liabilities with embedded optionality, such as mortgage securities and deposit balances, we utilize Monte Carlo simulations to assess economic value with industry-standard term structure modeling of interest rates. • Our calculations of net present value apply appropriate spreads over the benchmark yield curve for select assets and liabilities to capture the inherent risks (including credit risk) to discount expected interest and principal cash flows. • In instances where an interest rate scenario would result in a rate less than 0%, we assume a rate of 0% for that scenario.
Our combined economic value of equity sensitivity decreased as compared to December 31, 2024, driven largely by the Transaction.
Discover’s assets had a large concentration of short duration, floating rate Credit Card balances and we terminated Discover’s existing interest rate swaps in cash flow hedging relationships as they no longer met the conditions of a qualifying accounting hedge at the Closing Date.
Capital One Financial Corporation (COF) Table 32 shows the estimated percentage impact on our projected baseline net interest income and our current economic value of equity calculated under the methodology described above as of December 31, 2025 and 2024.
Table 32: Interest Rate Sensitivity Analysis December 31, 2025 December 31, 2024 Estimated impact on projected baseline net interest income: +200 basis points 1.0 % 1.3 % +100 basis points 0.6 0.8 +50 basis points 0.3 0.4 –50 basis points (0.3) (0.4) –100 basis points (0.7) (0.8) –200 basis points (2.7) (1.9) Estimated impact on economic value of equity: +200 basis points (4.5) (6.3) +100 basis points (2.0) (3.0) +50 basis points (0.9) (1.4) –50 basis points 0.7 1.3 –100 basis points 1.2 2.5 –200 basis points 1.1 3.9 In addition to these industry standard measures, we also consider the potential impact of alternative interest rate scenarios, such as larger rate shocks, higher than +/- 200 bps, as well as steepening and flattening yield curve scenarios in our internal interest rate risk management decisions.
We are also exposed to foreign exchange risk due to changes in the dollar-denominated value of future earnings and cash flows from our foreign operations and from our Euro (“EUR”)-denominated borrowing.
Our non-dollar denominated intercompany funding and EUR-denominated borrowing expose our earnings to foreign exchange transaction risk.
We measure our foreign exchange transaction risk exposures by applying a 1% U.S. dollar appreciation shock against the value of the non-dollar denominated intercompany funding and EUR-denominated borrowing and their related hedges, which shows the impact to our earnings from foreign exchange risk.
Our nominal with interest accrued intercompany funding outstanding was 1.5 billion GBP and 1.3 billion GBP as of December 31, 2025 and 2024, respectively, and 1.1 billion CAD and 1.4 billion CAD as of December 31, 2025 and 2024, respectively.
Our nominal EUR-denominated borrowing outstanding with interest accrued were 505 million EUR as of both December 31, 2025 and 2024.
Certain non-dollar equity investments in foreign operations expose our balance sheet and capital ratios to translation risk in AOCI.
Our primary exposure is to our U.K. and Canadian operations and the gross equity amounts were 2.3 billion GBP and 2.2 billion GBP as of December 31, 2025 and 2024, respectively, and 2.8 billion CAD and 2.6 billion CAD as of December 31, 2025 and 2024, respectively.
Additionally, we have immaterial foreign translation exposure to a small number of other currencies.
Financial Statements and Supplementary Data—Note 10—Derivative Instruments and Hedging Activities.” Capital One Financial Corporation (COF) SUPPLEMENTAL TABLES Table A—Net Charge-Offs Year Ended December 31, (Dollars in millions) 2025 2024 2023 Average loans held for investment $ 396,725 $ 317,421 $ 311,541 Net charge-offs 13,102 10,748 8,414 Net charge-off rate 3.30 % 3.39 % 2.70 % Table B— Reconciliation of Non-GAAP Measures The following non-GAAP measures consist of TCE, tangible assets and metrics computed using these amounts, which include tangible book value per common share, return on average tangible assets, return on average TCE and TCE ratio.
December 31, (Dollars in millions, except as noted) 2025 2024 2023 Tangible Common Equity (Period-End): Stockholders’ equity $ 113,616 $ 60,784 $ 58,089 Goodwill and other intangible assets (1) (40,876) (15,157) (15,289) Noncumulative perpetual preferred stock (5,407) (4,845) (4,845) Tangible common equity $ 67,333 $ 40,782 $ 37,955 Tangible Assets (Period-End): Total assets $ 669,009 $ 490,144 $ 478,464 Goodwill and other intangible assets (1) (40,876) (15,157) (15,289) Tangible assets $ 628,133 $ 474,987 $ 463,175 Tangible Common Equity (Average): Stockholders’ equity $ 94,542 $ 59,799 $ 55,195 Goodwill and other intangible assets (1) (31,904) (15,237) (15,207) Noncumulative perpetual preferred stock (5,255) (4,845) (4,845) Tangible common equity $ 57,383 $ 39,717 $ 35,143 Tangible Assets (Average): Total assets $ 597,536 $ 480,451 $ 467,807 Goodwill and other intangible assets (1) (31,904) (15,237) (15,207) Tangible assets $ 565,632 $ 465,214 $ 452,600 Capital One Financial Corporation (COF) December 31, (Dollars in millions, except as noted) 2025 2024 2023 TCE Ratio: Tangible common equity (period-end) $ 67,333 $ 40,782 $ 37,955 Tangible assets (period-end) 628,133 474,987 463,175 TCE Ratio (2) 10.7% 8.6% 8.2% Tangible Book Value per Share: Tangible common equity (period-end) $ 67,333 $ 40,782 $ 37,955 Outstanding Common Shares 625.1 381.2 380.4 Tangible book value per common share (period-end) (3) $ 107.72 $ 106.97 $ 99.78 Return on Tangible Assets (Average): Net income $ 2,453 $ 4,750 $ 4,887 Income from discontinued operations, net of tax 365 — — Net income less income from discontinued operations, net of tax 2,088 4,750 4,887 Tangible assets (Average) 565,632 465,214 452,600 Return on tangible assets (4) 0.37% 1.02% 1.08% Return on Tangible Common Equity (Average): Net income available to common stockholders $ 2,181 $ 4,445 $ 4,582 Income from discontinued operations, net of tax 365 — — Net income available to common stockholders less income from discontinued operations, net of tax 1,816 4,445 4,582 Tangible common equity (Average) 57,383 39,717 35,143 Return on tangible common equity (5) 3.16% 11.18% 13.04% __________ (1) Includes impact of related deferred taxes.
(4) Return on average tangible assets is a non-GAAP measure calculated based on net income (loss) less income (loss) from discontinued operations, net of tax, for the period divided by average tangible assets for the period.
(5) Return on average tangible common equity is a non-GAAP measure calculated based on net income (loss) available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average TCE.
Amortized cost basis: The amount at which a financing receivable or investment is originated or acquired, adjusted for applicable accrued interest, accretion, or amortization of premium, discount, and net deferred fees or costs, collection of cash, write-offs, foreign exchange and fair value hedge accounting adjustments.
Annual Report: References to “this Report” or our “2025 Form 10-K” or “2025 Annual Report” are to our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

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Risk Factors”— “A downgrade in our credit ratings could significantly impact our liquidity, funding costs and access to the capital markets.” Table 31 provides a summary of the credit ratings for the senior unsecured long-term debt of Capital One Financial Corporation and CONA as of December 31, 2024 and 2023.
Table 31: Senior Unsecured Long-Term Debt Credit Ratings December 31, 2024 December 31, 2023 Capital One Financial Corporation CONA Capital One Financial Corporation CONA Moody’s Baa1 A3 Baa1 A3 S&P BBB BBB+ BBB BBB+ Fitch A- A A- A As of February 11, 2025 Standard & Poor’s (“S&P”) and Fitch Ratings (“Fitch”) have our credit ratings on a stable outlook.
Following the Company’s February 19, 2024 announcement of its agreement to acquire Discover, Moody’s Investors Service (“Moody’s”) placed our credit ratings on review for a downgrade.
Moody’s said its review for downgrade may continue until the Transaction has been completed.
Other Commitments In the normal course of business, we enter into other contractual obligations that may require future cash payments that affect our short-term and long-term liquidity and capital resource needs.
As of December 31, 2024 and 2023, our total unfunded lending commitments were $458.1 billion and $441.3 billion, respectively, consisting of credit card lines, loan commitments to customers of both our Commercial Banking and Consumer Banking businesses, as well as standby and commercial letters of credit.
Our operating leases expire at various dates through 2071, although some have extension or termination options, and we assess the likelihood of exercising such options.
As of both December 31, 2024 and 2023, we had $1.5 billion in aggregate operating lease obligations, of which $235 million will be due the following 12 months.
Financial Statements and Supplementary Data—Note 8—Premises, Equipment and Leases.” We have enforceable and legally binding purchase obligations for goods and services such as data management, media and other software and third-party services.
As of December 31, 2024 and 2023, we had $4.0 billion and $789 million, respectively, in aggregate purchase obligations.
This increase is mainly due to recently renewed commitments for certain long term purchase obligations for goods and services.
Financial Statements and Supplementary Data—Note 19—Commitments, Contingencies, Guarantees and Others.” Capital One Financial Corporation (COF) MARKET RISK PROFILE Our primary market risk exposures include interest rate risk, foreign exchange risk and commodity pricing risk.
We are exposed to market risk primarily from the following operations and activities: • Traditional banking activities of deposit gathering and lending; • Asset/liability management activities including the management of investment securities, short-term and long-term borrowings and derivatives; • Foreign operations in the U.K. and Canada within our Credit Card business; and • Customer accommodation activities within our Commercial Banking business.
We use various industry standard market risk measurement techniques and analyses to measure, assess and manage the impact of changes in interest rates on our net interest income and our economic value of equity and changes in foreign exchange rates on our non-dollar-denominated funding and non-dollar equity investments in foreign operations.
Net interest income sensitivity metrics are derived using the following key assumptions: • As of December 31, 2024, our metrics assume a market implied baseline interest rate projection for the upper limit of the Federal Funds Target Rate of 4.00% at both December 31, 2025 and 2026. • In addition to our existing assets, liabilities and derivative positions, we incorporate expected future business growth assumptions.
In the contexts used in this section, “beta” refers to the change in deposit rate paid relative to the change in the federal funds rate. • In instances where an interest rate scenario would result in a rate less than 0%, we assume a rate of 0% for that scenario.
Capital One Financial Corporation (COF) At the current level of interest rates, our projected 12-month net interest income is expected to increase in higher rate scenarios and decrease in lower rate scenarios.
Our 12-month net interest income sensitivity was largely unchanged as compared to December 31, 2023.
Economic Value of Equity Sensitivity Our economic value of equity sensitivity measure estimates the impact of hypothetical instantaneous movements in interest rates on the net present value of our assets and liabilities, including derivative exposures.
Economic value of equity sensitivity metrics are derived using the following key assumptions: • As of December 31, 2024, our metrics assume a market implied baseline interest rate projection for the upper limit of the Federal Funds Target Rate of 4.00% at both December 31, 2025 and 2026. • The analysis includes only existing assets, liabilities and derivative positions and does not incorporate business growth assumptions or projected balance sheet changes. • Similar to our net interest income sensitivity measure, we incorporate the dynamic nature of deposit repricing and attrition, which includes pricing lags and changes in deposit beta as interest rates change and the prepayment sensitivity of our mortgage securities to the level of interest rates.
In our models, deposit betas and mortgage security prepayments vary dynamically based on the level of interest rates and by product type. • Balance attrition assumptions for loans, including credit card, auto and commercial loans, remain unchanged between the baseline interest rate forecast and interest rate shock scenarios as those loans are mainly floating rate or shorter duration fixed rate loans and hence paydowns have a low sensitivity to the level of interest rates. • For assets and liabilities with embedded optionality, such as mortgage securities and deposit balances, we utilize Monte Carlo simulations to assess economic value with industry-standard term structure modeling of interest rates. • Our calculations of net present value apply appropriate spreads over the benchmark yield curve for select assets and liabilities to capture the inherent risks (including credit risk) to discount expected interest and principal cash flows. • In instances where an interest rate scenario would result in a rate less than 0%, we assume a rate of 0% for that scenario.
Our current economic value of equity sensitivity decreased modestly in higher rate scenarios while remaining largely unchanged for lower rate scenarios as compared to December 31, 2023.
The decrease in economic value of equity sensitivity in higher rate scenarios is mainly driven by modeling enhancements made to our deposit balance attrition forecast assumptions.
The enhancement modestly increased the projected average life (and duration) of our deposit balances.
In higher rate scenarios, the value of these deposits increased more due to longer duration, which provided modestly more offset to the decline in value of fixed-rate assets in these higher rate scenarios.
Capital One Financial Corporation (COF) Table 32 shows the estimated percentage impact on our projected baseline net interest income and our current economic value of equity calculated under the methodology described above as of December 31, 2024 and 2023.
Table 32: Interest Rate Sensitivity Analysis December 31, 2024 December 31, 2023 Estimated impact on projected baseline net interest income: +200 basis points 1.3 % 0.7 % +100 basis points 0.8 0.8 +50 basis points 0.4 0.4 –50 basis points (0.4) (0.5) –100 basis points (0.8) (0.9) –200 basis points (1.9) (2.0) Estimated impact on economic value of equity: +200 basis points (6.3) (8.4) +100 basis points (3.0) (3.7) +50 basis points (1.4) (1.8) –50 basis points 1.3 1.6 –100 basis points 2.5 2.9 –200 basis points 3.9 4.0 In addition to these industry standard measures, we also consider the potential impact of alternative interest rate scenarios, such as larger rate shocks, higher than +/- 200 bps, as well as steepening and flattening yield curve scenarios in our internal interest rate risk management decisions.
We are also exposed to foreign exchange risk due to changes in the dollar-denominated value of future earnings and cash flows from our foreign operations and from our Euro (“EUR”)-denominated borrowings.
Our non-dollar denominated intercompany funding and EUR-denominated borrowings expose our earnings to foreign exchange transaction risk.
We measure our foreign exchange transaction risk exposures by applying a 1% U.S. dollar appreciation shock against the value of the non-dollar denominated intercompany funding and EUR-denominated borrowings and their related hedges, which shows the impact to our earnings from foreign exchange risk.
Our nominal intercompany funding outstanding was 1.3 billion GBP and 973 million GBP as of December 31, 2024 and 2023, respectively, and 1.4 billion CAD and 1.6 billion CAD as of December 31, 2024 and 2023, respectively.
Our nominal EUR-denominated borrowings outstanding were 505 million EUR and 1.3 billion EUR as of December 31, 2024 and 2023, respectively.
Our non-dollar equity investments in foreign operations expose our balance sheet and capital ratios to translation risk in AOCI.
Our gross equity exposures in our U.K. and Canadian operations were 2.2 billion GBP as of both December 31, 2024 and 2023, and 2.6 billion CAD and 2.4 billion CAD as of December 31, 2024 and 2023, respectively.
Financial Statements and Supplementary Data—Note 10—Derivative Instruments and Hedging Activities.” Capital One Financial Corporation (COF) SUPPLEMENTAL TABLES Table A—Net Charge-Offs Year Ended December 31, (Dollars in millions) 2024 2023 2022 Average loans held for investment $ 317,421 $ 311,541 $ 292,238 Net charge-offs 10,748 8,414 3,973 Net charge-off rate 3.39 % 2.70 % 1.36 % Table B— Reconciliation of Non-GAAP Measures The following non-GAAP measure consists of our adjusted results that we believe helps investors and users of our financial information understand the effect of adjusting items on our selected reported results; however, it may not be comparable to similarly-titled measures reported by other companies.
This adjusted result provides alternate measurements of our operating performance, both for the current period and trends across multiple periods.
The following table presents reconciliations of the non-GAAP measure to the applicable amounts measured in accordance with U.S.
The non-GAAP measure below should not be viewed as a substitute for reported results determined in accordance with U.S.
December 31, (Dollars in millions, except as noted) 2024 2023 2022 Adjusted operating efficiency ratio: Operating expense (U.S.
GAAP) $ 16,924 $ 16,307 $ 15,146 Discover integration expenses (234) — — FDIC special assessment (41) (289) — Legal reserve activity (75) — — Insurance recoveries and legal reserve activity — — 177 Restructuring charges — — (72) Adjusted operating expense (non-GAAP) $ 16,574 $ 16,018 $ 15,251 Total net revenue (U.S.

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