cof-20240331


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock (par value $.01 per share)	COF	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series I	COF PRI	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series J	COF PRJ	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series K	COF PRK	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series L	COF PRL	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series N	COF PRN	New York Stock Exchange
0.800% Senior Notes Due 2024	COF24	New York Stock Exchange
1.650% Senior Notes Due 2029	COF29	New York Stock Exchange

This discussion contains forward-looking statements that are based upon management’s current expectations and are subject to significant uncertainties and changes in circumstances. Please review “Forward-Looking Statements” for more information on the forward-looking statements in this Quarterly Report on Form 10-Q (“this Report”). All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. Our actual results may differ materially from those included in these forward-looking statements due to a variety of factors including, but not limited to, those described in “Part I—Item 1A. Risk Factors” in our 2023 Annual Report on Form 10-K (“2023 Form 10-K”) and “Part II—Item 1A. Risk Factors” in this Report. Unless otherwise specified, references to notes to our consolidated financial statements refer to the notes to our consolidated financial statements as of March 31, 2024 included in this Report.

Our principal operations are organized for management reporting purposes into three major business segments, which are defined primarily based on the products and services provided or the types of customers served: Credit Card, Consumer Banking and Commercial Banking. The operations of acquired businesses have been integrated into or managed as a part of our existing business segments. Certain activities that are not part of a business segment are included in the Other category, such as the management of our corporate investment portfolio and asset/liability positions performed by our centralized Corporate Treasury group and any residual tax expense or benefit beyond what is assessed to our business segments in order to arrive at the consolidated effective tax rate. The Other category also includes unallocated corporate expenses that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance, such as certain restructuring charges.

On February 19, 2024, the Company entered into an agreement and plan of merger (the “Merger Agreement”), by and among Capital One, Discover Financial Services, a Delaware corporation (“Discover”) and Vega Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”), pursuant to which (a) Merger Sub will merge with and into Discover, with Discover as the surviving entity in the merger (the “Merger”); (b) immediately following the Merger, Discover, as the surviving entity, will merge with and into Capital One, with Capital One as the surviving entity in the second-step merger (the “Second Step Merger”); and (c) immediately following the Second Step Merger, Discover Bank, a Delaware-chartered and wholly owned subsidiary of Discover, will merge with and into CONA, with CONA as the surviving entity in the merger (the “CONA Bank Merger,” and collectively with the Merger and the Second Step Merger, the “Transaction”). The Merger Agreement was unanimously approved by the Boards of Directors of each of Capital One and Discover.

At the effective time of the Merger, each share of common stock of Discover outstanding immediately prior to the effective time of the Merger, other than certain shares held by Discover or Capital One, will be converted into the right to receive 1.0192 shares of common stock of Capital One. Holders of Discover common stock will receive cash in lieu of fractional shares. At the effective time of the Second Step Merger, each share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C, of Discover, and each share of 6.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series D, of Discover, in each case outstanding immediately prior to the effective time of the Second Step Merger, will be converted into the right to receive a share of newly created series of preferred stock of Capital One having terms that are not materially less favorable than the applicable series of Discover preferred stock. The closing of the Transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and approval by the stockholders of each of Capital One and Discover.

The following table presents selected consolidated financial data and performance from our results of operations for the first quarters of 2024 and 2023 and selected comparative balance sheet data as of March 31, 2024 and December 31, 2023. We also provide selected key metrics we use in evaluating our performance, including certain metrics that are computed using non-GAAP measures. We consider these metrics to be key financial measures that management uses in assessing our operating performance, capital adequacy and the level of returns generated. We believe these non-GAAP metrics provide useful insight to investors and users of our financial information as they provide an alternate measurement of our performance and assist in assessing our capital adequacy and the level of return generated. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.


	Three Months Ended March 31,
(Dollars in millions, except per share data and as noted)		2024		2023		Change
Income statement


Net interest income		$	7,488	$	7,186	4%
Non-interest income		1,914		1,717		11
Total net revenue		9,402		8,903		6
Provision for credit losses		2,683		2,795		(4)
Non-interest expense:
Marketing		1,010		897		13
Operating expense		4,127		4,048		2
Total non-interest expense		5,137		4,945		4
Income from continuing operations before income taxes		1,582		1,163		36
Income tax provision		302		203		49


Net income		1,280		960		33
Dividends and undistributed earnings allocated to participating securities		(23)		(16)		44
Preferred stock dividends		(57)		(57)		—

Net income available to common stockholders		$	1,200	$	887	35
Common share statistics
Basic earnings per common share:


Net income per basic common share		$	3.14	$	2.32	35%
Diluted earnings per common share:


Net income per diluted common share		$	3.13	$	2.31	35%
Weighted-average common shares outstanding (in millions):
Basic		382.2		382.6		—
Diluted		383.4		383.8		—
Common shares outstanding (period-end, in millions)		382.1		382.0		—
Dividends declared and paid per common share		$	0.60	$	0.60	—

Tangible book value per common share (period-end)(1)		98.67		90.86		9%


	Three Months Ended March 31,
(Dollars in millions, except per share data and as noted)		2024			2023			Change
Balance sheet (average balances)
Loans held for investment		$	314,614		$	307,756		2%
Interest-earning assets		447,803			435,199			3
Total assets		474,995			462,324			3
Interest-bearing deposits		318,450			308,788			3
Total deposits		345,657			340,123			2
Borrowings		50,474			48,016			5
Common equity		53,152			49,927			6
Total stockholders’ equity		57,998			54,773			6
Selected performance metrics
Purchase volume		$	150,171		$	141,658		6%
Total net revenue margin(2)		8.40%			8.18		%	22bps
Net interest margin		6.69			6.60			9
Return on average assets(3)		1.08			0.83			25
Return on average tangible assets(4)		1.11			0.86			25
Return on average common equity(5)		9.03			7.11			192
Return on average tangible common equity(6)		12.67			10.15			252
Equity-to-assets ratio(7)		12.21			11.85			36

Efficiency ratio(8)		54.64			55.54			(90)
Operating efficiency ratio(9)		43.89			45.47			(158)
Adjusted operating efficiency ratio(10)		43.45			45.47			(202)
Effective income tax rate from continuing operations		19.1			17.5			160
Net charge-offs		$	2,616		$	1,697		54%
Net charge-off rate		3.33		%	2.21		%	112bps



(Dollars in millions, except as noted)	March 31, 2024			December 31, 2023			Change
Balance sheet (period-end)
Loans held for investment	$	315,154		$	320,472		(2)%
Interest-earning assets	453,557			449,701			1
Total assets	481,720			478,464			1
Interest-bearing deposits	323,352			320,389			1
Total deposits	350,969			348,413			1
Borrowings	50,361			49,856			1
Common equity	52,955			53,244			(1)
Total stockholders’ equity	57,801			58,089			—
Credit quality metrics
Allowance for credit losses	$	15,380		$	15,296		1%
Allowance coverage ratio	4.88		%	4.77		%	11	bps
30+ day performing delinquency rate	3.40			3.71			(31)
30+ day delinquency rate	3.67			3.99			(32)

Net interest income represents the difference between interest income, including certain fees, earned on our interest-earning assets and the interest expense incurred on our interest-bearing liabilities. Our interest-earning assets include loans, investment securities and other interest-earning assets, while our interest-bearing liabilities include interest-bearing deposits, securitized debt obligations, senior and subordinated notes, other borrowings and other interest-bearing liabilities. Generally, we include in interest income any past due fees, net of reversals, on loans that we deem collectible. Our net interest margin, based on our consolidated results, represents the difference between the yield on our interest-earning assets and the cost of our interest-bearing liabilities, including the notional impact of non-interest-bearing funding. We expect net interest income and our net interest margin to fluctuate based on changes in interest rates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities.

Table 2: Average Balances, Net Interest Income and Net Interest Margin


	Three Months Ended March 31,
	2024						2023
(Dollars in millions)	Average Balance		Interest Income/ Expense		Average Yield/ Rate(1)		Average Balance		Interest Income/ Expense		Average Yield/ Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Credit card	$	150,049	$	7,067	18.84	%	$	134,669	$	6,053	17.98	%
Consumer banking	75,091		1,564		8.33		79,000		1,461		7.40
Commercial banking(3)	90,423		1,612		7.13		94,446		1,488		6.30
Other(4)	—		(323)		**		—		(279)		**
Total loans, including loans held for sale	315,563		9,920		12.57		308,115		8,723		11.32
Investment securities	88,581		687		3.10		89,960		615		2.73
Cash equivalents and other interest-earning assets	43,659		570		5.21		37,124		416		4.49
Total interest-earning assets	447,803		11,177		9.98		435,199		9,754		8.96
Cash and due from banks	3,947						4,155
Allowance for credit losses	(15,293)						(13,203)
Premises and equipment, net	4,391						4,349
Other assets	34,147						31,824
Total assets	$	474,995					$	462,324
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Interest-bearing deposits	$	318,450	$	2,812	3.53	%	$	308,788	$	1,856	2.40	%
Securitized debt obligations	17,836		261		5.85		17,251		211		4.90
Senior and subordinated notes	32,211		606		7.52		30,136		489		6.49
Other borrowings and interest-bearing liabilities(5)	2,373		10		1.78		2,335		12		2.08
Total interest-bearing liabilities	370,870		3,689		3.98		358,510		2,568		2.87
Non-interest-bearing deposits	27,207						31,335
Other liabilities	18,920						17,706
Total liabilities	416,997						407,551
Stockholders’ equity	57,998						54,773
Total liabilities and stockholders’ equity	$	474,995					$	462,324
Net interest income/spread			$	7,488	6.00				$	7,186	6.10
Impact of non-interest-bearing funding					0.69						0.50
Net interest margin					6.69	%					6.60%

__________

Our investment securities portfolio consists of the following: U.S. government-sponsored enterprise or agency (“GSE” or “Agency”) and non-agency residential mortgage-backed securities (“RMBS”), agency commercial mortgage-backed securities (“CMBS”), U.S. Treasury securities and other securities. Agency securities include Government National Mortgage Association (“Ginnie Mae”) guaranteed securities, Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) issued securities. The carrying value of our investments in Agency and U.S. Treasury securities represented 96% and 97% of our total investment securities portfolio as of March 31, 2024 and December 31, 2023, respectively.

In the ordinary course of business, we engage in certain activities that are not reflected on our consolidated balance sheets, generally referred to as off-balance sheet arrangements. These activities typically involve transactions with unconsolidated variable interest entities (“VIEs”) as well as other arrangements, such as letters of credit, loan commitments and guarantees, to meet the financing needs of our customers and support their ongoing operations. We provide additional information regarding these types of activities in “Part I—Item 1. Financial Statements and Supplementary Data—Note 6—Variable Interest Entities and Securitizations” and “Part I—Item 1. Financial Statements and Supplementary Data—Note 14—Commitments, Contingencies, Guarantees and Others.”

Our principal operations are organized for management reporting purposes into three major business segments, which are defined primarily based on the products and services provided or the types of customer served: Credit Card, Consumer Banking and Commercial Banking. The operations of acquired businesses have been integrated into or managed as a part of our existing business segments. Certain activities that are not part of a business segment are included in the Other category, such as the management of our corporate investment portfolio and asset/liability positions performed by our centralized Corporate Treasury group and any residual tax expense or benefit beyond what is assessed to our business segments in order to arrive at the consolidated effective tax rate. The Other category also includes unallocated corporate expenses that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance, such as certain restructuring charges.

The results of our individual businesses, which we report on a continuing operations basis, reflect the manner in which management evaluates performance and makes decisions about funding our operations and allocating resources. We may periodically change our business segments or reclassify business segment results based on modifications to our management reporting methodologies and changes in organizational alignment. Our business segment results are intended to reflect each segment as if it were a stand-alone business. We use an internal management and reporting process to derive our business segment results. Our internal management and reporting process employs various allocation methodologies, including funds transfer pricing, to assign certain balance sheet assets, deposits and other liabilities and their related revenues and expenses directly or indirectly attributable to each business segment. Total interest income and non-interest income are directly attributable to the segment in which they are reported. The net interest income of each segment reflects the results of our funds transfer pricing process, which is primarily based on a matched funding concept that takes into consideration market interest rates. Our funds transfer pricing process is managed by our centralized Corporate Treasury group and provides a funds credit for sources of funds, such as deposits generated by our Consumer Banking and Commercial Banking businesses, and a charge for the use of funds by each segment. The allocation is unique to each business segment and acquired business and is based on the composition of assets and liabilities. The funds transfer pricing process considers the interest rate and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically, the methodology and assumptions utilized in the funds transfer pricing process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the business segments. We regularly assess the assumptions, methodologies and reporting classifications used for segment reporting, which may result in the implementation of refinements or changes in future periods. We provide additional information on the allocation methodologies used to derive our business segment results in “Part II—Item 8. Financial Statements and Supplementary Data—Note 17—Business Segments and Revenue from Contracts with Customers” in our 2023 Form 10-K.

Table of Contents

Credit Card Business

The primary sources of revenue for our Credit Card business are net interest income, net interchange income and fees collected from customers. Expenses primarily consist of the provision for credit losses, operating costs and marketing expenses.

Our Credit Card business generated net income from continuing operations of $961 million and $549 million in the first quarters of 2024 and 2023, respectively.

Table 9 summarizes the financial results of our Credit Card business and displays selected key metrics for the periods indicated.

Table 9: Credit Card Business Results


	Three Months Ended March 31,
(Dollars in millions, except as noted)		2024			2023			Change
Selected income statement data:
Net interest income		$	5,272		$	4,657		13%
Non-interest income		1,476			1,363			8
Total net revenue(1)		6,748			6,020			12
Provision for credit losses		2,259			2,261			—
Non-interest expense		3,229			3,038			6
Income from continuing operations before income taxes		1,260			721			75
Income tax provision		299			172			74
Income from continuing operations, net of tax		$	961		$	549		75
Selected performance metrics:
Average loans held for investment		$	149,645		$	134,670		11
Average yield on loans(2)		18.84		%	17.98		%	86bps
Total net revenue margin(3)		17.99			17.88			11
Net charge-offs		$	2,207		$	1,369		61%
Net charge-off rate		5.90		%	4.06		%	184bps
Purchase volume		$	150,171		$	141,658		6%

(Dollars in millions, except as noted)		March 31, 2024			December 31, 2023			Change
Selected period-end data:
Loans held for investment		$	150,594		$	154,547		(3)%
30+ day performing delinquency rate		4.50		%	4.61		%	(11)bps
30+ day delinquency rate		4.50			4.62			(12)
Nonperforming loan rate(4)		0.01			0.01			—
Allowance for credit losses		$	11,754		$	11,709		—%
Allowance coverage ratio		7.81		%	7.58		%	23bps

__________

(1)We recognize finance charges and fee income on open-ended loans in accordance with the contractual provisions of the credit arrangements and charge off any uncollectible amounts. Total net revenue was reduced by $630 million and $405 million in the first quarters of 2024 and 2023, respectively, for finance charges and fees charged-off as uncollectible.

(2)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.

(3)Total net revenue margin is calculated based on annualized total net revenue for the period divided by average loans during the period.

(4)Within our credit card loan portfolio, only certain loans in our international card businesses are classified as nonperforming. See “Nonperforming Loans and Other Nonperforming Assets” for additional information.

Key factors affecting the results of our Credit Card business for the first quarter of 2024 compared to the first quarter of 2023, and changes in financial condition and credit performance between March 31, 2024 and December 31, 2023 include the following:

•Net Interest Income: Net interest income increased by $615 million to $5.3 billion in the first quarter of 2024 primarily driven by higher average loan balances and margins.



			22			Capital One Financial Corporation (COF)

Table of Contents

•Non-Interest Income: Non-interest income increased by $113 million to $1.5 billion in the first quarter of 2024 due to growth in our Credit Card business.

•Provision for Credit Losses: Provision for credit losses remained substantially flat at $2.3 billion in the first quarter of 2024 compared to the first quarter of 2023.

•Non-Interest Expense: Non-interest expense increased by $191 million to $3.2 billion in the first quarter of 2024 primarily driven by increased marketing spend.

Loans Held for Investment:

•Period-end loans held for investment decreased by $4.0 billion to $150.6 billion as of March 31, 2024 from December 31, 2023 primarily driven by seasonal paydowns.

•Average loans held for investment increased by $15.0 billion to $149.6 billion in the first quarter of 2024 compared to the first quarter of 2023 primarily driven by growth across our portfolio.

Net Charge-Off and Delinquency Metrics:

•The net charge-off rate increased by 184 bps to 5.90% in the first quarter of 2024 compared to the first quarter of 2023 primarily driven by higher net charge-offs in our domestic credit card loan portfolio.

•The 30+ day delinquency rate decreased by 12 bps to 4.50% as of March 31, 2024 from December 31, 2023 primarily driven by seasonally lower delinquency inventories in our domestic credit card loan portfolio.



			23			Capital One Financial Corporation (COF)


	Three Months Ended March 31,
(Dollars in millions, except as noted)		2024			2023			Change
Selected income statement data:
Net interest income		$	4,972		$	4,390		13%
Non-interest income		1,411			1,298			9
Total net revenue(1)		6,383			5,688			12
Provision for credit losses		2,157			2,174			(1)
Non-interest expense		3,025			2,847			6
Income from continuing operations before income taxes		1,201			667			80
Income tax provision		283			157			80
Income from continuing operations, net of tax		$	918		$	510		80

Selected performance metrics:
Average loans held for investment		$	142,887		$	128,562		11
Average yield on loans(2)		18.76		%	17.88		%	88bps
Total net revenue margin(3)		17.82			17.70			12
Net charge-offs		$	2,120		$	1,299		63%
Net charge-off rate		5.94		%	4.04		%	190bps
Purchase volume		$	146,696		$	138,310		6%

(Dollars in millions, except as noted)		March 31, 2024			December 31, 2023			Change
Selected period-end data:
Loans held for investment		$	143,861		$	147,666		(3)%
30+ day performing delinquency rate		4.48		%	4.61		%	(13)	bps
Allowance for credit losses		$	11,298		$	11,261		—%
Allowance coverage ratio		7.85		%	7.63		%	22	bps

__________

Our Consumer Banking business generated net income from continuing operations of $381 million and $716 million in the first quarters of 2024 and 2023, respectively.

Table 10 summarizes the financial results of our Consumer Banking business and displays selected key metrics for the periods indicated.

Table 10: Consumer Banking Business Results


	Three Months Ended March 31,
(Dollars in millions, except as noted)		2024			2023			Change
Selected income statement data:
Net interest income		$	2,011		$	2,360		(15)%
Non-interest income		159			135			18
Total net revenue		2,170			2,495			(13)
Provision for credit losses		426			275			55
Non-interest expense		1,246			1,283			(3)
Income from continuing operations before income taxes		498			937			(47)
Income tax provision		117			221			(47)
Income from continuing operations, net of tax		$	381		$	716		(47)
Selected performance metrics:
Average loans held for investment:
Auto		$	73,768		$	77,465		(5)
Retail banking		1,324			1,529			(13)
Total consumer banking		$	75,092		$	78,994		(5)
Average yield on loans held for investment(1)		8.33		%	7.40%			93bps
Average deposits		$	294,448		$	278,772		6%
Average deposits interest rate		3.15		%	1.96		%	119bps
Net charge-offs		$	380		$	307		24%
Net charge-off rate		2.03		%	1.56		%	47bps
Auto loan originations		$	7,522		$	6,211		21%

(Dollars in millions, except as noted)		March 31, 2024			December 31, 2023			Change
Selected period-end data:
Loans held for investment:
Auto		$	73,801		$	74,075		—
Retail banking		1,298			1,362			(5)%
Total consumer banking		$	75,099		$	75,437		—
30+ day performing delinquency rate		5.21		%	6.25		%	(104)	bps
30+ day delinquency rate		5.86			7.08			(122)
Nonperforming loan rate		0.83			1.00			(17)
Nonperforming asset rate(2)		0.91			1.09			(18)
Allowance for credit losses		$	2,088		$	2,042		2%



Allowance coverage ratio		2.78		%	2.71		%	7bps
Deposits		$	300,806		$	296,171		2%

_________


	Three Months Ended March 31,
(Dollars in millions, except as noted)		2024			2023			Change
Selected income statement data:
Net interest income		$	599		$	648		(8)%
Non-interest income		281			212			33
Total net revenue(1)		880			860			2
Provision (benefit) for credit losses(2)		(2)			259			**
Non-interest expense		515			530			(3)
Income from continuing operations before income taxes		367			71			**
Income tax provision		87			17			**
Income from continuing operations, net of tax		$	280		$	54		**
Selected performance metrics:
Average loans held for investment:
Commercial and multifamily real estate		$	34,310		$	37,373		(8)
Commercial and industrial		55,567			56,719			(2)


Total commercial banking		$	89,877		$	94,092		(4)
Average yield on loans held for investment(1)(3)		7.14		%	6.31		%	83bps
Average deposits		$	31,844		$	39,941		(20)%
Average deposits interest rate		2.65		%	2.34		%	31bps
Net charge-offs		$	29		$	21		38%
Net charge-off rate		0.13		%	0.09		%	4bps

(Dollars in millions, except as noted)		March 31, 2024			December 31, 2023			Change
Selected period-end data:
Loans held for investment:
Commercial and multifamily real estate		$	34,272		$	34,446		(1)%
Commercial and industrial		55,189			56,042			(2)
Total commercial banking		$	89,461		$	90,488		(1)
Nonperforming loan rate		1.28		%	0.84		%	44	bps
Nonperforming asset rate(4)		1.28			0.84			44
Allowance for credit losses(2)		$	1,538		$	1,545		—%
Allowance coverage ratio		1.72%			1.71%			1	bps
Deposits		$	31,082		$	32,712		(5)%
Loans serviced for others		52,241			52,341			—

__________

Standard

Guidance

Adoption Timing and
Financial Statement Impacts

Income Tax Disclosures

Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

Issued December 2023

Requires entities to annually provide additional information in the income tax rate reconciliation and make additional disclosures about income taxes paid.

Effective beginning with our annual period ending on December 31, 2025, with early adoption permitted. Prospective application is required and retrospective application is also permitted.

We plan to adopt this standard for the above annual period and to apply the new requirements prospectively. We expect such adoption to result in additional information being included in our income tax footnote and consolidated statements of cash flows.

Segment Reporting Disclosures

ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

Issued November 2023

Requires disclosure of incremental segment information on an annual and interim basis.

Effective beginning with our annual period ending on December 31, 2024 and interim periods within fiscal years beginning January 1, 2025, with early adoption permitted. Retrospective application is required.

We plan to adopt this standard for the above annual period and to apply the new requirements retrospectively. We are still assessing the extent of the impacts of adoption to the disclosures in our business segment footnote.

The Basel III Capital Rules require banking institutions to maintain a capital conservation buffer, composed of CET1 capital, above the regulatory minimum ratios. Under the Federal Reserve’s final rule to implement the stress capital buffer requirement (“Stress Capital Buffer Rule”), the Company’s “standardized approach capital conservation buffer” includes its stress capital buffer requirement (as described below), any G-SIB Surcharge (which is not applicable to us) and the countercyclical capital buffer requirement (which is currently set at 0%). Any determination to increase the countercyclical capital buffer generally would be effective twelve months after the announcement of such an increase, unless the Federal Reserve, OCC and the FDIC, hereafter collectively referred to as the “Federal Banking Agencies,” set an earlier effective date.

The Company’s stress capital buffer requirement is recalibrated every year based on the Company’s supervisory stress test results. In particular, the Company’s stress capital buffer requirement equals, subject to a floor of 2.5%, the sum of (i) the difference between the Company’s starting CET1 capital ratio and its lowest projected CET1 capital ratio under the severely adverse scenario of the Federal Reserve’s supervisory stress test plus (ii) the ratio of the Company’s projected four quarters of common stock dividends (for the fourth to seventh quarters of the planning horizon) to the projected risk-weighted assets for the quarter in which the Company’s projected CET1 capital ratio reaches its minimum under the supervisory stress test.

Pursuant to the CECL Transition Rule, a banking institution could elect to delay the estimated impact of adopting CECL on its regulatory capital through December 31, 2021 and then phase in the estimated cumulative impact from January 1, 2022 through December 31, 2024. For the “day 2” ongoing impact of CECL during the initial two years, the Federal Banking Agencies used a uniform “scaling factor” of 25% as an approximation of the increase in the allowance under the CECL standard compared to the prior incurred loss methodology. Accordingly, from January 1, 2020 through December 31, 2021, electing banking institutions were permitted to add back to their regulatory capital an amount equal to the sum of the after-tax “day 1” CECL adoption impact and 25% of the increase in the allowance since the adoption of the CECL standard. From January 1, 2022 through December 31, 2024, the after-tax “day 1” CECL adoption impact and the cumulative “day 2” ongoing impact are being phased in to regulatory capital at 25% per year. The following table summarizes the capital impact delay and phase in period on our regulatory capital from years 2020 to 2025.


(Dollars in millions)	March 31, 2024		December 31, 2023
Regulatory capital under Basel III standardized approach
Common equity excluding AOCI	$	63,088	$	62,710
Adjustments and deductions:
AOCI, net of tax(1)	14		27
Goodwill, net of related deferred tax liabilities	(14,804)		(14,811)
Other intangible and deferred tax assets, net of deferred tax liabilities	(291)		(311)
Common equity Tier 1 capital	48,007		47,615
Tier 1 capital instruments	4,845		4,845

Tier 1 capital	52,852		52,460
Tier 2 capital instruments	1,932		1,936
Qualifying allowance for credit losses	4,700		4,728
Tier 2 capital	6,632		6,664
Total capital	$	59,484	$	59,124

Regulatory capital metrics
Risk-weighted assets	$	366,161	$	369,206
Adjusted average assets(2)	468,030		467,553
Total leverage exposure(3)	547,984		546,909

__________

The Federal Reserve’s capital plan rule provides that if a BHC determines there has been or will be a material change in its risk profile, financial condition, or corporate structure since it last submitted the capital plan, it must update and resubmit its capital plan within 30 calendar days, subject to a potential 60-day extension. We determined that our proposed acquisition of Discover constitutes a material change and, therefore, we are required to resubmit an updated capital plan. The capital plan rule further provides that upon the occurrence of an event requiring resubmission, a BHC may not make any capital distribution unless it has received approval of the Federal Reserve. Accordingly, all our capital distributions are now subject to the prior approval of the Federal Reserve pending the Federal Reserve’s consideration of our resubmitted capital plan. We have received prior approval of the Federal Reserve to make certain capital distributions.

As a BHC, our ability to pay dividends is largely dependent upon the receipt of dividends or other payments from our subsidiaries. The Bank is subject to regulatory restrictions that limit its ability to transfer funds to our BHC. As of March 31, 2024, funds available for dividend payments from the Bank were $6.6 billion. There can be no assurance that we will declare and pay any dividends to stockholders.

We repurchased $103 million of shares of our common stock during the first quarter of 2024. The timing and exact amount of any future common stock repurchases will depend on various factors, including regulatory approval, market conditions, opportunities for growth, our capital position and the amount of retained earnings. The Board authorized stock repurchase program does not include specific price targets, may be executed through open market purchases, tender offers, or privately negotiated transactions, including utilizing Rule 10b5-1 programs, does not have a set expiration date and may be suspended at any time. For additional information on dividends and stock repurchases, see “Capital Management—Capital Planning and Regulatory Stress Testing,” and “Part II—Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” in this Report and “Part I—Item 1. Business—Supervision and Regulation—Funding and Dividends from Subsidiaries” in our 2023 Form 10-K.

First Line

Identifies and Owns Risk

Second Line

Advises & Challenges First Line

Third Line

Provides Independent Assurance

Definition

Business areas that are accountable for risk and responsible for: i) generating revenue or reducing expenses; ii) supporting the business to provide products or services to customers; or iii) providing technology services for the first line.

Independent Risk Management (“IRM”) and Support Functions (e.g., Human Resources, Accounting, Legal) that provide support services to the Company.

Internal Audit and Credit Review

Key Responsibilities

Identify, assess, measure, monitor, control, and report the risks associated with their business.

IRM: Independently oversees and assesses risk taking activities for the first line of defense.

Support Functions: Centers of specialized expertise that provide support services to the enterprise.

Provides independent and objective assurance to the Board of Directors and senior management that the systems and governance processes are designed and working as intended.

We also engage in certain non-lending activities that may give rise to ongoing credit and counterparty settlement risk, including purchasing securities for our investment securities portfolio, entering into derivative transactions to manage our market risk exposure and to accommodate customers, extending short-term advances on syndication activity including bridge financing transactions we have underwritten, depositing certain operational cash balances in other financial institutions, executing certain foreign exchange transactions and extending customer overdrafts. We provide additional information related to our investment securities portfolio under “Consolidated Balance Sheets Analysis—Investment Securities” and “Part I—Item 1. Financial Statements and Supplementary Data—Note 3—Investment Securities” as well as credit risk related to derivative transactions in “Part I— Item 1. Financial Statements and Supplementary Data—Note 9—Derivative Instruments and Hedging Activities.”

We closely monitor economic conditions and loan performance trends to assess and manage our exposure to credit risk. Trends in delinquency rates are the key credit quality indicator for our credit card and retail banking loan portfolios as changes in delinquency rates can provide an early warning of changes in potential future credit losses. The key indicator we monitor when assessing the credit quality and risk of our auto loan portfolio is borrower credit scores as they provide insight into borrower risk profiles, which give indications of potential future credit losses. The key credit quality indicator for our commercial loan portfolios is our internal risk ratings as we generally classify loans that have been delinquent for an extended period of time and other loans with significant risk of loss as nonperforming. In addition to these credit quality indicators, we also manage and monitor other credit quality metrics such as level of nonperforming loans and net charge-off rates.

We consider the entire balance of an account to be delinquent if the minimum required payment is not received by the customer’s due date, measured at each balance sheet date. Our 30+ day delinquency metrics include all loans held for investment that are 30 or more days past due, whereas our 30+ day performing delinquency metrics include all loans held for investment that are 30 or more days past due but are currently classified as performing and accruing interest. The 30+ day delinquency and 30+ day performing delinquency metrics are the same for domestic credit card loans, as we continue to classify these loans as performing until the account is charged off, typically when the account is 180 days past due. See “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2023 Form 10-K for information on our policies for classifying loans as nonperforming for each of our loan categories. We provide additional information on our credit quality metrics in “Business Segment Financial Performance.”

Table 22: 30+ Day Delinquencies




	March 31, 2024								December 31, 2023
	30+ Day Performing Delinquencies				30+ Day Delinquencies				30+ Day Performing Delinquencies				30+ Day Delinquencies
(Dollars in millions)	Amount		Rate(1)		Amount		Rate(1)		Amount		Rate(1)		Amount		Rate(1)
Credit Card:
Domestic credit card	$	6,445	4.48	%	$	6,445	4.48	%	$	6,806	4.61	%	$	6,806	4.61	%
International card businesses	325		4.83		332		4.94		321		4.67		329		4.77
Total credit card	6,770		4.50		6,777		4.50		7,127		4.61		7,135		4.62
Consumer Banking:
Auto	3,898		5.28		4,370		5.92		4,696		6.34		5,307		7.16
Retail banking	13		0.95		29		2.23		17		1.19		33		2.40
Total consumer banking	3,911		5.21		4,399		5.86		4,713		6.25		5,340		7.08
Commercial Banking:
Commercial and multifamily real estate	5		0.02		222		0.65		—		—		121		0.35
Commercial and industrial	22		0.04		170		0.31		55		0.10		181		0.32
Total commercial banking	27		0.03		392		0.44		55		0.06		302		0.33
Total	$	10,708	3.40		$	11,568	3.67		$	11,895	3.71		$	12,777	3.99

__________

Net charge-offs consist of the amortized cost basis, excluding accrued interest, of loans held for investment that we determine to be uncollectible, net of recovered amounts. We charge off loans as a reduction to the allowance for credit losses when we determine the loan is uncollectible and record subsequent recoveries of previously charged off amounts as increases to the allowance for credit losses. Uncollectible finance charges and fees are reversed through revenue and certain fraud losses are recorded in other non-interest expense. Generally, costs to recover charged off loans are recorded as collection expenses as incurred and are included in our consolidated statements of income as a component of other non-interest expense. Our charge-off policy for loans varies based on the loan type. See “Part II—Item 8. Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2023 Form 10-K for information on our charge-off policy for each of our loan categories.

Our allowance for credit losses represents management’s current estimate of expected credit losses over the contractual terms of our loans held for investment as of each balance sheet date. Expected recoveries of amounts previously charged off or expected to be charged off are recognized within the allowance. We also estimate expected credit losses related to unfunded lending commitments that are not unconditionally cancellable. 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 for unfunded lending commitments is included in other liabilities on our consolidated balance sheets. We provide additional information on the methodologies and key assumptions used in determining our allowance for credit losses in “Part II—Item 8.—Financial Statements and Supplementary Data—Note 1—Summary of Significant Accounting Policies” in our 2023 Form 10-K.


	Three Months Ended March 31, 2024
	Credit Card						Consumer Banking
(Dollars in millions)	Domestic Card		International Card Businesses		Total Credit Card		Auto		Retail Banking		Total Consumer Banking		Commercial Banking		Total














Allowance for credit losses:
Balance as of December 31, 2023	$	11,261	$	448	$	11,709	$	2,002	$	40	$	2,042	$	1,545	$	15,296


Charge-offs	(2,452)		(122)		(2,574)		(642)		(18)		(660)		(39)		(3,273)
Recoveries(1)	332		35		367		275		5		280		10		657
Net charge-offs	(2,120)		(87)		(2,207)		(367)		(13)		(380)		(29)		(2,616)
Provision for credit losses	2,157		102		2,259		422		4		426		22		2,707
Allowance build (release) for credit losses	37		15		52		55		(9)		46		(7)		91
Other changes(2)	—		(7)		(7)		—		—		—		—		(7)
Balance as of March 31, 2024	11,298		456		11,754		2,057		31		2,088		1,538		15,380
Reserve for unfunded lending commitments:
Balance as of December 31, 2023	—		—		—		—		—		—		158		158
Provision (benefit) for losses on unfunded lending commitments	—		—		—		—		—		—		(24)		(24)
Balance as of March 31, 2024	—		—		—		—		—		—		134		134
Combined allowance and reserve as of March 31, 2024	$	11,298	$	456	$	11,754	$	2,057	$	31	$	2,088	$	1,672	$	15,514


	Three Months Ended March 31, 2023
	Credit Card						Consumer Banking
(Dollars in millions)	Domestic Card		International Card Businesses		Total Credit Card		Auto		Retail Banking		Total Consumer Banking		Commercial Banking		Total
Allowance for credit losses:



















Balance as of December 31, 2022	$	9,165	$	380	$	9,545	$	2,187	$	50	$	2,237	$	1,458	$	13,240
Cumulative effects of accounting standards adoption(3)	(40)		(23)		(63)		—		—		—		—		(63)
Balance as of January 1, 2023	9,125		357		9,482		2,187		50		2,237		1,458		13,177
Charge-offs	(1,587)		(101)		(1,688)		(515)		(16)		(531)		(24)		(2,243)
Recoveries(1)	288		31		319		219		5		224		3		546
Net charge-offs	(1,299)		(70)		(1,369)		(296)		(11)		(307)		(21)		(1,697)
Provision for credit losses	2,174		87		2,261		274		1		275		266		2,802
Allowance build (release) for credit losses	875		17		892		(22)		(10)		(32)		245		1,105
Other changes(4)	32		4		36		—		—		—		—		36
Balance as of March 31, 2023	10,032		378		10,410		2,165		40		2,205		1,703		14,318
Reserve for unfunded lending commitments:
Balance as of December 31, 2022	—		—		—		—		—		—		218		218
Provision (benefit) for losses on unfunded lending commitments	—		—		—		—		—		—		(7)		(7)
Balance as of March 31, 2023	—		—		—		—		—		—		211		211
Combined allowance and reserve as of March 31, 2023	$	10,032	$	378	$	10,410	$	2,165	$	40	$	2,205	$	1,914	$	14,529

________

We are subject to the final rules published by the Basel Committee and as implemented by the Federal Reserve and the OCC for the Basel III Liquidity Coverage Ratio (“LCR”) in the United States (the “LCR Rule”). The LCR Rule requires each of the Company and the Bank to calculate its respective LCR daily. It also requires the Company to publicly disclose, on a quarterly basis, its LCR, certain related quantitative liquidity metrics, and a qualitative discussion of its LCR. Our average LCR during the first quarter of 2024 was 164%, which exceeded the LCR Rule requirement of 100%. The calculation and the underlying components are based on our interpretations, expectations and assumptions of relevant regulations, as well as interpretations provided by our regulators, and are subject to change based on changes to future regulations and interpretations. See “Part I—Item 1. Business—Supervision and Regulation” in our 2023 Form 10-K for additional information.

We are subject to the final rules published by the Basel Committee and as implemented by the Federal Reserve and the OCC for the Basel III Net Stable Funding Ratio (“NSFR”) in the United States (the “NSFR Rule”). The NSFR Rule requires each of the Company and the Bank to maintain an NSFR of 100% on an ongoing basis. It also requires the Company to publicly disclose, on a semi-annual basis each second and fourth quarter, its NSFR, certain related quantitative liquidity metrics and qualitative discussion of its NSFR. Our average NSFR for the first quarter of 2024 exceeded the NSFR Rule requirement of 100%. The calculation and the underlying components are based on our interpretations, expectations and assumptions of the relevant regulations, as well as interpretations provided by our regulators, and are subject to change based on changes to future regulations and interpretations. See “Part I—Item 1. Business—Supervision and Regulation” in our 2023 Form 10-K for additional information.

We maintain a shelf registration with the U.S. Securities and Exchange Commission (“SEC”) so that we may periodically offer and sell an indeterminate aggregate amount of senior or subordinated debt securities, preferred stock, depositary shares, common stock, purchase contracts, warrants and units. There is no limit under this shelf registration to the amount or number of such securities that we may offer and sell, subject to market conditions. In addition, we also maintain a shelf registration associated with our credit card securitization trust that allows us to periodically offer and sell up to $30 billion of securitized debt obligations and a shelf registration associated with our auto loan securitization trusts that allows us to periodically offer and sell up to $25 billion of securitized debt obligations. The registered amounts under these shelf registration statements are subject to continuing review and change in the future, including as part of the routine renewal process. As of March 31, 2024, we had $22.6 billion and $19.4 billion of available issuance capacity in our credit card and auto loan securitization programs, respectively.

As of March 31, 2024 and December 31, 2023, our total unfunded lending commitments were $452.6 billion and $441.3 billion, respectively, primarily consisting of credit card lines and loan commitments to customers of both our Commercial Banking and Consumer Banking businesses, as well as standby and commercial letters of credit. We generally manage the potential risk of unfunded lending commitments by limiting the total amount of arrangements, monitoring the size and maturity structure of these portfolios and applying the same credit standards for all of our credit activities. For additional information, refer to “Part I—Item 1. Financial Statements and Supplementary Data—Note 14—Commitments, Contingencies, Guarantees and Others” in this Report.

We also enter into various contractual arrangements that may require future cash payments, including short-term obligations such as trade payables, commitments to fund certain equity investments, obligations for pension and post-retirement benefit plans, and representation and warranty reserves. These arrangements are discussed in more detail in “Part I—Item 1. Financial Statements and Supplementary Data—Note 6—Variable Interest Entities and Securitizations,” and “Part I—Item 1. Financial Statements and Supplementary Data—Note 14—Commitments, Contingencies, Guarantees and Others” in this Report and “Part II—Item 8. Financial Statements and Supplementary Data—Note 14—Employee Benefit Plans” in our 2023 Form 10-K.

Our non-dollar denominated intercompany funding and EUR-denominated borrowings expose our earnings to foreign exchange transaction risk. We manage these transaction risks by using forward foreign currency derivatives and cross-currency swaps to hedge our exposures. 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 987 million GBP and 973 million GBP as of March 31, 2024 and December 31, 2023, respectively, and 1.6 billion CAD as of both March 31, 2024 and December 31, 2023. Our nominal EUR-denominated borrowings outstanding were 1.3 billion EUR as of both March 31, 2024 and December 31, 2023.

Our non-dollar equity investments in foreign operations expose our balance sheet and capital ratios to translation risk in AOCI. We manage our translation risk by entering into foreign currency derivatives designated as net investment hedges. We measure these exposures by applying a 30% U.S. dollar appreciation shock, which we believe approximates a significant adverse shock over a one-year time horizon, against the value of the equity invested in our foreign operations net of related net investment hedges where applicable. Our gross equity exposures in our U.K. and Canadian operations were 2.2 billion GBP as of both March 31, 2024 and December 31, 2023, and 2.4 billion CAD as of both March 31, 2024 and December 31, 2023.

We offer interest rate, commodity and foreign currency derivatives as an accommodation to our customers within our Commercial Banking business. We offset the majority of the market risk of these customer accommodation derivatives by entering into offsetting derivatives transactions with other counterparties. We use value-at-risk (“VaR”) as the primary method to measure the market risk in our customer accommodation derivative activities on a daily basis. VaR is a statistical risk measure used to estimate the potential loss from movements observed in the recent market environment. We employ a historical simulation approach using the most recent 500 business days and use a 99 percent confidence level and a holding period of one business day. As a result of offsetting our customer exposures with other counterparties, we believe that our net exposure to market risk in our customer accommodation derivatives is minimal. For further information on our risk related to customer accommodation derivatives, see “Part I—Item 1. Financial Statements and Supplementary Data—Note 9—Derivative Instruments and Hedging Activities.”

On March 5, 2024, the Consumer Financial Protection Bureau (“CFPB”) issued a final rule amending Regulation Z that, when effective, would significantly lower the safe harbor amount for past due fees that a large credit card issuer, including the Bank, can charge on consumer credit card accounts. The final rule currently has an effective date of May 14, 2024 but is subject to ongoing litigation, the outcome of which remains uncertain. For more information on risks related to these rules, see the risk factors set forth under Part I—Item 1A. Risk Factors” in our 2023 Form 10-K” and for more information on the potential impact on our business see “Introduction—Business Developments—Consumer Financial Protection Bureau Final Rule.”

Forward-looking statements often use words such as “will,” “anticipate,” “target,” “expect,” “think,” “estimate,” “intend,” “plan,” “goal,” “believe,” “forecast,” “outlook” or other words of similar meaning. Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new information, future events or otherwise. For additional information on factors that could materially influence forward-looking statements included in this Report, see the risk factors set forth under “Part I—Item 1A. Risk Factors” in our 2023 Form 10-K. You should carefully consider the factors discussed below, and in our Risk Factors or other disclosures, in evaluating these forward-looking statements.

•risks relating to the pending Transaction, including the risk that the cost savings and any revenue synergies and other anticipated benefits from the Transaction may not be fully realized or may take longer than anticipated to be realized; disruption to our business and to Discover’s business as a result of the announcement and pendency of the Transaction; the risk that the integration of Discover’s business and operations into ours, including into our compliance management program, will be materially delayed or will be more costly or difficult than expected, or that we are otherwise unable to successfully integrate Discover’s business into ours, including as a result of unexpected factors or events; the possibility that the requisite regulatory, stockholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated (and the risk that requisite regulatory approvals may result in the imposition of conditions that could adversely affect us or the expected benefits of the Transaction following the closing of the Transaction); reputational risk and the reaction of customers, suppliers, employees or other business partners of ours or of Discover to the Transaction; the failure of the closing conditions in the Merger Agreement to be satisfied, or any unexpected delay in completing the Transaction or the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; the dilution caused by our issuance of additional shares of our common stock in connection with the Transaction; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; risks related to management and oversight of our expanded business and operations following the Transaction due to the increased size and complexity of our business; the possibility of increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Transaction or the size, scope and complexity of our business operations following the Transaction; the outcome of any legal or regulatory proceedings that may be currently pending or later instituted against us (before or after the Transaction) or against Discover; the risk that expectations regarding the timing, completion and accounting and tax treatments of the Transaction are not met; the risk that any announcements relating to the Transaction could have adverse effects on the market price of our common stock; certain restrictions during the pendency of the Transaction; the diversion of management’s attention from ongoing business operations and opportunities; the risk that revenues following the Transaction may be lower than expected and/or the risk that certain expenses, such as the provision for credit losses, of Discover or the surviving entity may be greater than expected; our and Discover’s success in executing their respective business plans and strategies and managing the risks involved in the foregoing; effects of the announcement, pendency or completion of the Transaction on our or Discover’s ability to retain customers and retain and hire key personnel and maintain relationships with our and Discover’s suppliers and other business partners, and on our and Discover’s operating results and businesses generally; and other factors that may affect our future results or the future results of Discover;

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. We consider these metrics to be key financial performance measures that management uses in assessing capital adequacy and the level of returns generated. While these non-GAAP measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly-titled measures reported by other companies. The following table presents reconciliations of these non-GAAP measures to the applicable amounts measured in accordance with U.S. GAAP. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with U.S. GAAP.


	Three Months Ended March 31,
(Dollars in millions, except as noted)		2024		2023
Tangible Common Equity (Average):
Stockholders’ equity		$	57,998	$	54,773
Goodwill and other intangible assets(1)		(15,280)		(14,984)
Noncumulative perpetual preferred stock		(4,845)		(4,845)
Tangible common equity		$	37,873	$	34,944
Return on Tangible Common Equity (Average):
Net income available to common stockholders		$	1,200	$	887
Tangible common equity (Average)		37,873		34,944
Return on tangible common equity(2)		12.67%		10.15%




Tangible Assets (Average):
Total assets		$	474,995	$	462,324
Goodwill and other intangible assets(1)		(15,280)		(14,984)
Tangible assets		$	459,715	$	447,340
Return on Tangible Assets (Average):
Net income		$	1,280	$	960
Tangible assets (Average)		459,715		447,340
Return on tangible assets(3)		1.11%		0.86%


(Dollars in millions, except as noted)	March 31, 2024		March 31, 2023		December 31, 2023
Tangible Common Equity (Period-End):
Stockholders’ equity	$	57,801	$	54,653	$	58,089
Goodwill and other intangible assets(1)	(15,257)		(15,098)		(15,289)
Noncumulative perpetual preferred stock	(4,845)		(4,845)		(4,845)
Tangible common equity	$	37,699	$	34,710	$	37,955
Tangible Assets (Period-End):
Total assets	$	481,720	$	471,660	$	478,464
Goodwill and other intangible assets(1)	(15,257)		(15,098)		(15,289)
Tangible assets	$	466,463	$	456,562	$	463,175
Tangible Book Value per Common Share:
Tangible common equity (period-end)	$	37,699	$	34,710	$	37,955
Outstanding Common Shares	382.1		382.0		380.4
Tangible book value per common share	$	98.67	$	90.86	$	99.78
TCE Ratio
Tangible common equity (Period-end)	$	37,699	$	34,710	$	37,955
Tangible Assets (Period-end)	466,463		456,562		463,175
TCE Ratio(4)	8.1%		7.6%		8.2%

Carrying value (with respect to loans): The amount at which a loan is recorded on the consolidated balance sheets. For loans recorded at amortized cost, carrying value is the unpaid principal balance net of unamortized deferred loan origination fees and costs, and unamortized purchase premium or discount. For loans that are or have been on nonaccrual status, the carrying value is also reduced by any net charge-offs that have been recorded and the amount of interest payments applied as a reduction of principal under the cost recovery method. For credit card loans, the carrying value also includes interest that has been billed to the customer, net of any related reserves. Loans held for sale are recorded at either fair value (if we elect the fair value option) or at the lower of cost or fair value.


	Three Months Ended March 31,
(Dollars in millions, except per share-related data)		2024		2023
Interest income:
Loans, including loans held for sale		$	9,920	$	8,723
Investment securities		687		615
Other		570		416
Total interest income		11,177		9,754
Interest expense:
Deposits		2,812		1,856
Securitized debt obligations		261		211
Senior and subordinated notes		606		489
Other borrowings		10		12
Total interest expense		3,689		2,568
Net interest income		7,488		7,186
Provision for credit losses		2,683		2,795
Net interest income after provision for credit losses		4,805		4,391
Non-interest income:
Interchange fees, net		1,145		1,139
Service charges and other customer-related fees		462		379

Other		307		199
Total non-interest income		1,914		1,717
Non-interest expense:
Salaries and associate benefits		2,478		2,427
Occupancy and equipment		554		508
Marketing		1,010		897
Professional services		262		324
Communications and data processing		351		350
Amortization of intangibles		19		14
Other		463		425
Total non-interest expense		5,137		4,945
Income from continuing operations before income taxes		1,582		1,163
Income tax provision		302		203


Net income		1,280		960
Dividends and undistributed earnings allocated to participating securities		(23)		(16)
Preferred stock dividends		(57)		(57)

Net income available to common stockholders		$	1,200	$	887
Basic earnings per common share:


Net income per basic common share		$	3.14	$	2.32
Diluted earnings per common share:


Net income per diluted common share		$	3.13	$	2.31


(Dollars in millions, except per share-related data)	March 31, 2024		December 31, 2023
Assets:
Cash and cash equivalents:
Cash and due from banks	$	4,671	$	4,903
Interest-bearing deposits and other short-term investments	46,357		38,394
Total cash and cash equivalents	51,028		43,297
Restricted cash for securitization investors	474		458
Securities available for sale (amortized cost of $88.5 billion and $88.1 billion as of March 31, 2024 and December 31, 2023, respectively, and allowance for credit losses of $4 million as of both March 31, 2024 and December 31, 2023)	78,398		79,117
Loans held for investment:
Unsecuritized loans held for investment	285,577		289,229
Loans held in consolidated trusts	29,577		31,243
Total loans held for investment	315,154		320,472
Allowance for credit losses	(15,380)		(15,296)
Net loans held for investment	299,774		305,176
Loans held for sale ($1.2 billion and $347 million carried at fair value as of March 31, 2024 and December 31, 2023, respectively)	1,631		854
Premises and equipment, net	4,366		4,375
Interest receivable	2,514		2,478
Goodwill	15,062		15,065
Other assets	28,473		27,644
Total assets	$	481,720	$	478,464

Liabilities:
Interest payable	$	762	$	649
Deposits:
Non-interest-bearing deposits	27,617		28,024
Interest-bearing deposits	323,352		320,389
Total deposits	350,969		348,413
Securitized debt obligations	17,661		18,043
Other debt:
Federal funds purchased and securities loaned or sold under agreements to repurchase	568		538
Senior and subordinated notes	32,108		31,248
Other borrowings	24		27
Total other debt	32,700		31,813
Other liabilities	21,827		21,457
Total liabilities	423,919		420,375
Commitments, contingencies and guarantees (see Note 14)
Stockholders’ equity:
Preferred stock (par value $0.01 per share; 50,000,000 shares authorized; 4,975,000 shares issued and outstanding as of both March 31, 2024 and December 31, 2023)	0		0
Common stock (par value $0.01 per share; 1,000,000,000 shares authorized; 699,753,620 and 696,242,668 shares issued as of March 31, 2024 and December 31, 2023, respectively; 382,063,343 and 380,389,609 shares outstanding as of March 31, 2024 and December 31, 2023, respectively)	7		7
Additional paid-in capital, net	35,808		35,541
Retained earnings	61,905		60,945
Accumulated other comprehensive loss	(9,534)		(8,268)
Treasury stock, at cost (par value $0.01 per share; 317,690,277 and 315,853,059 shares as of March 31, 2024 and December 31, 2023, respectively)	(30,385)		(30,136)
Total stockholders’ equity	57,801		58,089
Total liabilities and stockholders’ equity	$	481,720	$	478,464



(Dollars in millions)	Preferred Stock			Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount





















Balance as of December 31, 2023	4,975,000	$	0	696,242,668	$	7	$	35,541	$	60,945	$	(8,268)	$	(30,136)	$	58,089




























Cumulative effects of accounting standards adoption(1)									(25)						(25)
Comprehensive income (loss)									1,280		(1,266)				14
Dividends—common stock(2)				24,969	0		3		(238)						(235)
Dividends—preferred stock									(57)						(57)
Purchases of treasury stock													(249)		(249)
Issuances of common stock and restricted stock, net of forfeitures				3,470,983	0		80								80
Exercises of stock options				15,000	0		1								1


Compensation expense for restricted stock units							183								183
Balance as of March 31, 2024	4,975,000	$	0	699,753,620	$	7	$	35,808	$	61,905	$	(9,534)	$	(30,385)	$	57,801



(Dollars in millions)	Preferred Stock			Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance as of December 31, 2022	4,975,000	$	0	690,334,422	$	7	$	34,725	$	57,184	$	(9,916)	$	(29,418)	$	52,582

























Cumulative effects of accounting standards adoption(3)									48						48
Comprehensive income									960		1,376				2,336
Dividends—common stock(2)				26,635	0		3		(237)						(234)
Dividends—preferred stock									(57)						(57)
Purchases of treasury stock													(246)		(246)
Issuances of common stock and restricted stock, net of forfeitures				2,972,149	0		76								76



Compensation expense for restricted stock units							148								148
Balance as of March 31, 2023	4,975,000	$	0	693,333,206	$	7	$	34,952	$	57,898	$	(8,540)	$	(29,664)	$	54,653

________


	Three Months Ended March 31,
(Dollars in millions)	2024		2023
Operating activities:
Income from continuing operations, net of tax	$	1,280	$	960

Net income	1,280		960
Adjustments to reconcile net income (loss) to net cash from operating activities:
Provision for credit losses	2,683		2,795
Depreciation and amortization, net	806		1,251
Deferred tax provision (benefit)	116		(169)

Loss (gain) on sales of loans	13		(5)
Stock-based compensation expense	193		154
Other	31		14
Loans held for sale:
Originations and purchases	(1,477)		(1,237)
Proceeds from sales and paydowns	610		1,064
Changes in operating assets and liabilities:
Changes in interest receivable	(36)		(131)
Changes in other assets	(670)		398
Changes in interest payable	113		94
Changes in other liabilities	(652)		(2,196)

Net cash from operating activities	3,010		2,992
Investing activities:

Securities available for sale:
Purchases	(2,732)		(5,843)
Proceeds from paydowns and maturities	2,397		1,990




Loans:
Net changes in loans originated as held for investment	1,906		3,396
Principal recoveries of loans previously charged off	657		546
Changes in premises and equipment	(247)		(235)
Net cash used in acquisition activities	0		(2,539)
Net cash used in other investing activities	(306)		(309)
Net cash used in investing activities	$	1,675	$	(2,994)


	Three Months Ended March 31,
(Dollars in millions)	2024		2023
Financing activities:
Deposits and borrowings:
Changes in deposits	$	2,620	$	16,648
Issuance of securitized debt obligations	0		1,248
Maturities and paydowns of securitized debt obligations	(367)		(560)
Issuance of senior and subordinated notes and long-term FHLB advances	1,992		2,241
Maturities and paydowns of senior and subordinated notes and long-term FHLB advances	(750)		(3,047)
Changes in other borrowings	27		(350)
Common stock:
Net proceeds from issuances	80		76
Dividends paid	(235)		(234)
Preferred stock:

Dividends paid	(57)		(57)

Purchases of treasury stock	(249)		(246)
Proceeds from share-based payment activities	1		0
Net cash from financing activities	3,062		15,719
Changes in cash, cash equivalents and restricted cash for securitization investors	7,747		15,717
Cash, cash equivalents and restricted cash for securitization investors, beginning of the period	43,755		31,256
Cash, cash equivalents and restricted cash for securitization investors, end of the period	$	51,502	$	46,973
Supplemental cash flow information:





Interest paid	$	3,108	$	2,084
Income tax paid	47		103

In the preamble to the final rule, the FDIC announced that it will conduct a review of the reporting methodology for estimated uninsured deposits and related items. It is reasonably possible amendments will be needed to our 2022 Call Report due to future legal and regulatory developments, which could result in additional expenses associated with the special assessment. The ultimate amount of expenses associated with the special assessment will also be impacted by the finalization of the losses incurred by the FDIC in the resolutions of Silicon Valley Bank and Signature Bank. The amount of reasonably possible additional special assessment fees beyond our existing accrual due to these factors is approximately $200 million.

Disclosure controls and procedures refer to controls and other procedures designed to provide reasonable assurance that information required to be disclosed in our financial reports is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding our required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we must apply judgment in evaluating and implementing possible controls and procedures.


Delaware		54-1719854
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1680 Capital One Drive,
McLean,	Virginia	22102
(Address of principal executive offices)		(Zip Code)


Item 3.	Quantitative and Qualitative Disclosures about Market Risk	133































Item 4.	Controls and Procedures	133












PART II—OTHER INFORMATION		134
Item 1.	Legal Proceedings	134
Item 1A.	Risk Factors	134
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	134
Item 3.	Defaults Upon Senior Securities	134
Item 4.	Mine Safety Disclosures	134
Item 5.	Other Information	134
Item 6.	Exhibits	134





EXHIBIT INDEX		135
SIGNATURES		136


	Three Months Ended March 31,
(Dollars in millions)		2024		2023		Change
Selected income statement data:
Net interest loss		$	(394)	$	(479)	(18)%
Non-interest income (loss)		(2)		7		**
Total net loss(1)		(396)		(472)		(16)

Non-interest expense		147		94		56
Loss from continuing operations before income taxes		(543)		(566)		(4)
Income tax benefit		(201)		(207)		(3)
Loss from continuing operations, net of tax		$	(342)	$	(359)	(5)


	March 31, 2024						December 31, 2023
	Ratio		Minimum Capital Adequacy		Well- Capitalized		Ratio		Minimum Capital Adequacy		Well- Capitalized
Capital One Financial Corp:
Common equity Tier 1 capital(3)	13.1	%	4.5	%	N/A		12.9	%	4.5	%	N/A
Tier 1 capital(4)	14.4		6.0		6.0	%	14.2		6.0		6.0	%
Total capital(5)	16.2		8.0		10.0		16.0		8.0		10.0
Tier 1 leverage(6)	11.3		4.0		N/A		11.2		4.0		N/A
Supplementary leverage(7)	9.6		3.0		N/A		9.6		3.0		N/A
CONA:
Common equity Tier 1 capital(3)	13.4		4.5		6.5		13.1		4.5		6.5
Tier 1 capital(4)	13.4		6.0		8.0		13.1		6.0		8.0
Total capital(5)	14.7		8.0		10.0		14.3		8.0		10.0
Tier 1 leverage(6)	10.5		4.0		5.0		10.3		4.0		5.0
Supplementary leverage(7)	8.9		3.0		N/A		8.8		3.0		N/A


	March 31, 2024				December 31, 2023
(Dollars in millions)	Amount		% of Total		Amount		% of Total
Domestic credit card:
California	$	14,831	9.8	%	$	15,167	9.8%
Texas	12,375		8.2		12,318		8.0
Florida	11,062		7.3		11,148		7.2
New York	9,271		6.2		9,578		6.2
Pennsylvania	5,845		3.9		5,824		3.8
Illinois	5,511		3.7		5,581		3.6
Ohio	4,899		3.3		4,845		3.1
New Jersey	4,723		3.1		4,702		3.0
Georgia	4,617		3.1		4,606		3.0
North Carolina	4,107		2.7		4,088		2.6
Other	66,620		44.2		69,809		45.2
Total domestic credit card	143,861		95.5		147,666		95.5	%
International card businesses:
United Kingdom	3,617		2.4		3,639		2.4
Canada	3,116		2.1		3,242		2.1
Total international card businesses	6,733		4.5		6,881		4.5
Total credit card	$	150,594	100.0	%	$	154,547	100.0%


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		Page
PART I - FINANCIAL INFORMATION		4














Item 1.	Financial Statements and Notes	72
	Consolidated Statements of Income	73
	Consolidated Statements of Comprehensive Income	74
	Consolidated Balance Sheets	75
	Consolidated Statements of Changes in Stockholders’ Equity	76
	Consolidated Statements of Cash Flows	77
	Notes to Consolidated Financial Statements	79
	Note 1—Summary of Significant Accounting Policies	79
	Note 2—Business Combinations	81
	Note 3—Investment Securities	82
	Note 4—Loans	85
	Note 5—Allowance for Credit Losses and Reserve for Unfunded Lending Commitments	96
	Note 6—Variable Interest Entities and Securitizations	100
	Note 7—Goodwill and Other Intangible Assets	104
	Note 8—Deposits and Borrowings	106
	Note 9—Derivative Instruments and Hedging Activities	107
	Note 10—Stockholders’ Equity	115
	Note 11—Earnings Per Common Share	118
	Note 12—Fair Value Measurement	119
	Note 13—Business Segments and Revenue from Contracts with Customers	126
	Note 14—Commitments, Contingencies, Guarantees and Others	129





Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)	4
	Introduction	4

	Selected Financial Data	6
	Executive Summary	9
	Consolidated Results of Operations	10
	Consolidated Balance Sheets Analysis	16
	Off-Balance Sheet Arrangements	19
	Business Segment Financial Performance	20
	Critical Accounting Policies and Estimates	29
	Accounting Changes and Developments	30
	Capital Management	31
	Risk Management	36
	Credit Risk Profile	38
	Liquidity Risk Profile	51
	Market Risk Profile	56
	Supervision and Regulation	59
	Forward-Looking Statements	61
	Supplemental Table	64
	Glossary and Acronyms	66


MD&A Tables:		Page
1	Consolidated Financial Highlights	6
2	Average Balances, Net Interest Income and Net Interest Margin	11
3	Rate/Volume Analysis of Net Interest Income	13
4	Non-Interest Income	14
5	Non-Interest Expense	15

6	Loans Held for Investment	17
7	Funding Sources Composition	17
8	Business Segment Results	21
9	Credit Card Business Results	22
9.1	Domestic Card Business Results	24
10	Consumer Banking Business Results	25
11	Commercial Banking Business Results	26
12	Other Category Results	28
13	Capital Ratios Under Basel III	33
14	Regulatory Risk-Based Capital Components and Regulatory Capital Metrics	34
15	Preferred Stock Dividends Paid Per Share	35
16	Portfolio Composition of Loans Held for Investment	38

17	Credit Card Portfolio by Geographic Region	39
18	Consumer Banking Portfolio by Geographic Region	40
19	Commercial Real Estate Portfolio by Region	41
20	Commercial Loans by Industry	42
21	Credit Score Distribution	43
22	30+ Day Delinquencies	44
23	Aging and Geography of 30+ Day Delinquent Loans	45
24	90+ Day Delinquent Loans Accruing Interest	46
25	Nonperforming Loans and Other Nonperforming Assets	46
26	Net Charge-Of f s	47

27	Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity	50

28	Liquidity Reserves	51
29	Deposits Composition and Average Deposits Interest Rates	53

30	Long-Term Debt Funding Activities	54
31	Senior Unsecured Long-Term Debt Credit Ratings	55

32	Interest Rate Sensitivity Analysis	58


Supplemental Table:





A	Reconciliation of Non-GAAP Measures	64


	Three Months Ended March 31,
	2024 vs. 2023
(Dollars in millions)	Total Variance		Volume		Rate
Interest income:
Loans:
Credit card	$	1,014	$	713	$	301
Consumer banking	103		(72)		175
Commercial banking(2)	124		(63)		187
Other(3)	(44)		—		(44)
Total loans, including loans held for sale	1,197		578		619
Investment securities	72		(9)		81
Cash equivalents and other interest-earning assets	154		79		75
Total interest income	1,423		648		775
Interest expense:
Interest-bearing deposits	956		60		896
Securitized debt obligations	50		7		43
Senior and subordinated notes	117		35		82
Other borrowings and liabilities	(2)		—		(2)
Total interest expense	1,121		102		1,019
Net interest income	$	302	$	546	$	(244)


(Percentage of portfolio)	March 31, 2024		December 31, 2023
Industry Classification:
Finance	31%		31	%
Real Estate & Construction(1)	29		30

Government & Education	8		8
Health Care & Pharmaceuticals	6		6
Commercial Services	4		4
Technology, Telecommunications & Media	3		2
Oil, Gas & Pipelines	3		3
Other	16		16
Total	100	%	100	%


	Issuances				Maturities/Redemptions
	Three Months Ended March 31,				Three Months Ended March 31,
(Dollars in millions)	2024		2023			2024		2023
Securitized debt obligations	—		$	1,250		$	367	$	560
Senior and subordinated notes	$	2,000	2,250			750		3,047

Total	$	2,000	$	3,500		$	1,117	$	3,607


	March 31, 2024		December 31, 2023
Estimated impact on projected baseline net interest income:
+200 basis points	1.2	%	0.7	%
+100 basis points	0.9		0.8
+50 basis points	0.5		0.4
–50 basis points	(0.6)		(0.5)
–100 basis points	(1.2)		(0.9)
–200 basis points	(2.5)		(2.0)
Estimated impact on economic value of equity:
+200 basis points	(8.4)		(8.4)
+100 basis points	(3.7)		(3.7)
+50 basis points	(1.8)		(1.8)
–50 basis points	1.7		1.6
–100 basis points	3.2		2.9
–200 basis points	4.9		4.0


Item 1. Financial Statements and Supplementary Data
			Page



Consolidated Financial Statements			73
Consolidated Statements of Income			73
Consolidated Statements of Comprehensive Income			74
Consolidated Balance Sheets			75
Consolidated Statements of Changes in Stockholders’ Equity			76
Consolidated Statements of Cash Flows			77
Notes to Consolidated Financial Statements			79
Note 1—Summary of Significant Accounting Policies			79
Note 2—Business Combinations			81
Note 3—Investment Securities			82
Note 4—Loans			85
Note 5—Allowance for Credit Losses and Reserve for Unfunded Lending Commitments			96
Note 6—Variable Interest Entities and Securitizations			100
Note 7—Goodwill and Other Intangible Assets			104

Note 8—Deposits and Borrowings			106
Note 9—Derivative Instruments and Hedging Activities			107
Note 10—Stockholders’ Equity			115

Note 11—Earnings Per Common Share			118



Note 12—Fair Value Measurement			119
Note 13—Business Segments and Revenue from Contracts with Customers			126
Note 14—Commitments, Contingencies, Guarantees and Others			129


See Notes to Consolidated Financial Statements.
	73	Capital One Financial Corporation (COF)


INTRODUCTION


EXECUTIVE SUMMARY


CONSOLIDATED RESULTS OF OPERATIONS


	March 31, 2024
(Dollars in millions)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investment securities available for sale:
U.S. Treasury securities	$	5,764	$	0	$	3	$	(39)	$	5,728
RMBS:
Agency	71,153		0		74		(9,506)		61,721
Non-agency	600		(4)		86		(5)		677
Total RMBS	71,753		(4)		160		(9,511)		62,398
Agency CMBS	8,867		0		19		(693)		8,193
Other securities(1)	2,075		0		4		0		2,079
Total investment securities available for sale	$	88,459	$	(4)	$	186	$	(10,243)	$	78,398


	March 31, 2024
	Less than 12 Months				12 Months or Longer				Total
(Dollars in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Investment securities available for sale without an allowance for credit losses:
U.S. Treasury securities	$	443	$	(1)	$	2,099	$	(38)	$	2,542	$	(39)
RMBS:
Agency	3,213		(36)		53,912		(9,470)		57,125		(9,506)
Non-agency	5		0		14		(1)		19		(1)
Total RMBS	3,218		(36)		53,926		(9,471)		57,144		(9,507)
Agency CMBS	544		(5)		6,509		(688)		7,053		(693)
Other securities	398		0		99		0		497		0
Total investment securities available for sale in a gross unrealized loss position without an allowance for credit losses(1)	$	4,603	$	(42)	$	62,633	$	(10,197)	$	67,236	$	(10,239)


	March 31, 2024
(Dollars in millions)	Due in 1 Year or Less		Due > 1 Year through 5 Years		Due > 5 Years through 10 Years		Due > 10 Years		Total
Fair value of securities available for sale:
U.S. Treasury securities	$	1,892	$	3,542	$	294	$	0	$	5,728
RMBS(1):
Agency	2		92		1,073		60,554		61,721
Non-agency	0		0		5		672		677
Total RMBS	2		92		1,078		61,226		62,398
Agency CMBS(1)	494		2,482		3,221		1,996		8,193
Other securities	373		1,682		24		0		2,079
Total securities available for sale	$	2,761	$	7,798	$	4,617	$	63,222	$	78,398
Amortized cost of securities available for sale	$	2,788	$	7,986	$	5,013	$	72,672	$	88,459
Weighted-average yield for securities available for sale	3.50%		4.43%		3.52%		3.10%		3.26%


	March 31, 2024
			Delinquent Loans
(Dollars in millions)	Current		30-59 Days		60-89 Days		> 90 Days		Total Delinquent Loans		Total Loans
Credit Card:
Domestic credit card	$	137,416	$	1,735	$	1,371	$	3,339	$	6,445	$	143,861
International card businesses	6,401		113		75		144		332		6,733
Total credit card	143,817		1,848		1,446		3,483		6,777		150,594
Consumer Banking:
Auto	69,431		2,769		1,244		357		4,370		73,801
Retail banking	1,269		11		3		15		29		1,298
Total consumer banking	70,700		2,780		1,247		372		4,399		75,099
Commercial Banking:
Commercial and multifamily real estate	34,050		0		94		128		222		34,272
Commercial and industrial	55,019		3		29		138		170		55,189
Total commercial banking	89,069		3		123		266		392		89,461
Total loans(1)	$	303,586	$	4,631	$	2,816	$	4,121	$	11,568	$	315,154
% of Total loans	96.33%		1.47%		0.89%		1.31%		3.67%		100.00%


	March 31, 2024
	Term Loans by Vintage Year
(Dollars in millions)	2024		2023		2022		2021		2020		Prior		Total Term Loans		Revolving Loans		Revolving Loans Converted to Term		Total

Auto—At origination FICO scores:(1)
Greater than 660	$	4,180	$	11,141	$	11,433	$	8,457	$	2,654	$	1,132	$	38,997	$	0	$	0	$	38,997
621-660	1,367		4,526		4,030		2,974		1,148		600		14,645		0		0		14,645
620 or below	1,865		6,228		5,036		3,807		2,024		1,199		20,159		0		0		20,159
Total auto	7,412		21,895		20,499		15,238		5,826		2,931		73,801		0		0		73,801

Retail banking—Delinquency status:
Current	69		77		92		56		62		554		910		355		4		1,269
30-59 days	0		0		0		1		0		2		3		8		0		11
60-89 days	0		0		0		0		0		1		1		2		0		3
Greater than 90 days	0		0		0		0		1		7		8		5		2		15
Total retail banking	69		77		92		57		63		564		922		370		6		1,298
Total consumer banking	$	7,481	$	21,972	$	20,591	$	15,295	$	5,889	$	3,495	$	74,723	$	370	$	6	$	75,099


	Three Months Ended March 31, 2024
(Dollars in millions)	Interest Rate Reduction		Term Extension		Interest Rate Reduction and Term Extension		Total Loans
Credit Card:
Domestic credit card	$	74	$	0	$	1	$	75
International card businesses	17		0		0		17
Total credit card	91		0		1		92
Consumer Banking:
Auto	0		3		103		106

Total consumer banking	0		3		103		106
Commercial Banking:
Commercial and multifamily real estate	0		0		0		0
Commercial and industrial	0		67		0		67
Total commercial banking	0		67		0		67
Total	$	91	$	70	$	104	$	265


	March 31, 2024
	Consolidated				Unconsolidated
(Dollars in millions)	Carrying Amount of Assets		Carrying Amount of Liabilities		Carrying Amount of Assets		Carrying Amount of Liabilities		Maximum Exposure to Loss
Securitization-Related VIEs:(1)
Credit card loan securitizations(2)	$	24,393	$	14,692	$	0	$	0	$	0
Auto loan securitizations	4,491		3,655		0		0		0
Total securitization-related VIEs	28,884		18,347		0		0		0
Other VIEs:(3)
Affordable housing entities	295		23		5,650		2,001		5,650
Entities that provide capital to low-income and rural communities	2,872		10		0		0		0
Other(4)	0		0		411		0		411
Total other VIEs	3,167		33		6,061		2,001		6,061
Total VIEs	$	32,051	$	18,380	$	6,061	$	2,001	$	6,061


	March 31, 2024						December 31, 2023
	Notional or Contractual Amount		Derivative(1)				Notional or Contractual Amount		Derivative(1)
(Dollars in millions)			Assets		Liabilities				Assets		Liabilities
Derivatives designated as accounting hedges:
Interest rate contracts:
Fair value hedges	$	69,607	$	4	$	26	$	68,987	$	18	$	26
Cash flow hedges	79,300		134		20		70,350		216		23
Total interest rate contracts	148,907		138		46		139,337		234		49
Foreign exchange contracts:
Fair value hedges	1,349		0		135		1,380		0		113
Cash flow hedges	2,431		11		1		2,488		0		66
Net investment hedges	4,814		18		41		4,870		1		89
Total foreign exchange contracts	8,594		29		177		8,738		1		268
Total derivatives designated as accounting hedges	157,501		167		223		148,075		235		317
Derivatives not designated as accounting hedges:
Customer accommodation:
Interest rate contracts	101,903		1,224		1,474		103,489		1,188		1,382
Commodity contracts	34,638		1,174		1,172		33,495		1,161		1,147
Foreign exchange and other contracts	5,108		43		28		5,153		50		47
Total customer accommodation	141,649		2,441		2,674		142,137		2,399		2,576
Other interest rate exposures(2)	1,878		21		30		872		21		31
Other contracts	3,074		20		7		2,955		20		8
Total derivatives not designated as accounting hedges	146,601		2,482		2,711		145,964		2,440		2,615
Total derivatives	$	304,102	$	2,649	$	2,934	$	294,039	$	2,675	$	2,932
Less: netting adjustment(3)			(1,050)		(440)				(1,005)		(597)
Total derivative assets/liabilities			$	1,599	$	2,494			$	1,670	$	2,335


	March 31, 2024						December 31, 2023
	Carrying Amount Assets/(Liabilities)		Cumulative Amount of Basis Adjustments Included in the Carrying Amount				Carrying Amount Assets/(Liabilities)		Cumulative Amount of Basis Adjustments Included in the Carrying Amount
(Dollars in millions)			Total Assets/(Liabilities)		Discontinued-Hedging Relationships				Total Assets/(Liabilities)		Discontinued-Hedging Relationships
Line item on our consolidated balance sheets in which the hedged item is included:
Investment securities available for sale(1)(2)	$	6,022	$	(48)	$	109	$	6,108	$	(8)	$	126
Interest-bearing deposits	(16,991)		348		0		(17,374)		277		0
Securitized debt obligations	(13,358)		523		0		(13,375)		503		0
Senior and subordinated notes	(31,758)		1,325		(332)		(30,899)		971		(372)


	Gross Amounts		Gross Amounts Offset in the Balance Sheet				Net Amounts as Recognized		Securities Collateral Held Under Master Netting Agreements		Net Exposure
(Dollars in millions)			Financial Instruments		Cash Collateral Received
As of March 31, 2024
Derivative assets(1)	$	2,649	$	(268)	$	(782)	$	1,599	$	(19)	$	1,580
As of December 31, 2023
Derivative assets(1)	2,675		(433)		(572)		1,670		(22)		1,648


			Redeemable by Issuer Beginning	Per Annum Dividend Rate	Dividend Frequency	Liquidation Preference per Share		Total Shares Outstanding as of March 31, 2024	Carrying Value (in millions)
Series	Description	Issuance Date							March 31, 2024		December 31, 2023



Series I	5.000% Non-Cumulative	September 11, 2019	December 1, 2024	5.000%	Quarterly	$	1,000	1,500,000	$	1,462	$	1,462
Series J	4.800% Non-Cumulative	January 31, 2020	June 1, 2025	4.800	Quarterly	1,000		1,250,000	1,209		1,209
Series K	4.625% Non-Cumulative	September 17, 2020	December 1, 2025	4.625	Quarterly	1,000		125,000	122		122
Series L	4.375% Non-Cumulative	May 4, 2021	September 1, 2026	4.375	Quarterly	1,000		675,000	652		652
Series M	3.950% Fixed Rate Reset Non-Cumulative	June 10, 2021	September 1, 2026	3.950% through 8/31/2026; resets 9/1/2026 and every subsequent 5 year anniversary at 5-Year Treasury Rate +3.157%	Quarterly	1,000		1,000,000	988		988
Series N	4.250% Non-Cumulative	July 29, 2021	September 1, 2026	4.250%	Quarterly	1,000		425,000	412		412
Total									$	4,845	$	4,845


(Dollars in millions)	Securities Available for Sale		Hedging Relationships(1)		Foreign Currency Translation Adjustments(2)		Other		Total








AOCI as of December 31, 2023	$	(6,769)	$	(1,493)	$	26	$	(32)	$	(8,268)
Other comprehensive income (loss) before reclassifications	(844)		(587)		(13)		1		(1,443)
Amounts reclassified from AOCI into earnings	0		177		0		0		177
Other comprehensive income (loss), net of tax	(844)		(410)		(13)		1		(1,266)
AOCI as of March 31, 2024	$	(7,613)	$	(1,903)	$	13	$	(31)	$	(9,534)


(Dollars in millions)		Three Months Ended March 31,
AOCI Components	Affected Income Statement Line Item		2024		2023
Securities available for sale:
	Non-interest income (loss)		$	0	$	0
	Income tax provision (benefit)		0		0
	Net income (loss)		0		0
Hedging relationships:
Interest rate contracts:	Interest income (loss)		(309)		(262)
Foreign exchange contracts:	Interest income		2		3
	Interest expense		(1)		(1)
	Non-interest income (loss)		74		(8)
	Income (loss) from continuing operations before income taxes		(234)		(268)
	Income tax provision (benefit)		(57)		(65)
	Net income (loss)		(177)		(203)
Other:
	Non-interest income and non-interest expense		0		0
	Income tax provision (benefit)		0		0
	Net income		0		0
Total reclassifications			$	(177)	$	(203)


	Three Months Ended March 31,
(Dollars and shares in millions, except per share data)		2024		2023


Net income		$	1,280	$	960
Dividends and undistributed earnings allocated to participating securities		(23)		(16)
Preferred stock dividends		(57)		(57)

Net income available to common stockholders		$	1,200	$	887

Total weighted-average basic common shares outstanding		382.2		382.6
Effect of dilutive securities:(1)
Stock options		0.2		0.1
Other contingently issuable shares		1.0		1.1
Total effect of dilutive securities		1.2		1.2
Total weighted-average diluted common shares outstanding		383.4		383.8
Basic earnings per common share:


Net income per basic common share		$	3.14	$	2.32
Diluted earnings per common share:(1)


Net income per diluted common share		$	3.13	$	2.31


Level 1:						Valuation is based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2:						Valuation is based on observable market-based inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3:						Valuation is generated from techniques that use significant assumptions not observable in the market. Valuation techniques include pricing models, discounted cash flow (“DCF”) methodologies or similar techniques.


	March 31, 2024
	Fair Value Measurements Using						Netting Adjustments(1)
(Dollars in millions)	Level 1		Level 2		Level 3				Total
Assets:
Securities available for sale:
U.S. Treasury securities	$	5,728	$	0	$	0	0		$	5,728
RMBS	0		62,089		309		0		62,398
CMBS	0		8,064		129		0		8,193
Other securities	170		1,909		0		0		2,079
Total securities available for sale	5,898		72,062		438		0		78,398
Loans held for sale	0		1,212		0		0		1,212
Other assets:
Derivative assets(2)	733		942		974		$	(1,050)	1,599
Other(3)	649		3		35		0		687
Total assets	$	7,280	$	74,219	$	1,447	$	(1,050)	$	81,896
Liabilities:
Other liabilities:
Derivative liabilities(2)	$	593	$	1,421	$	920	$	(440)	$	2,494
Total liabilities	$	593	$	1,421	$	920	$	(440)	$	2,494


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Three Months Ended March 31, 2024
			Total Gains (Losses) (Realized/Unrealized)																		Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held as of March 31, 2024(1)
(Dollars in millions)	Balance, January 1, 2024		Included in Net Income(1)		Included in OCI		Purchases		Sales		Issuances		Settlements		Transfers Into Level 3		Transfers Out of Level 3		Balance, March 31, 2024
Securities available for sale:(2)
RMBS	$	146	$	2	$	0	$	0	$	0	$	0	$	(3)	$	182	$	(18)	$	309	$	2
CMBS	132		0		(2)		0		0		0		(1)		0		0		129		0

Total securities available for sale	278		2		(2)		0		0		0		(4)		182		(18)		438		2
Other assets:

Retained interests in securitizations	35		0		0		0		0		0		0		0		0		35		0
Net derivative assets (liabilities)(3)	58		6		0		0		0		(5)		(5)		0		0		54		(1)


	March 31, 2024
	Estimated Fair Value Hierarchy				Total
(Dollars in millions)	Level 2		Level 3
Loans held for investment	$	0	$	361	$	361
Loans held for sale	10		0		10
Other assets(1)	0		86		86
Total	$	10	$	447	$	457


	Total Gains (Losses)
	Three Months Ended March 31,
(Dollars in millions)	2024		2023
Loans held for investment	$	(127)	$	(105)
Loans held for sale	(10)		0
Other assets(1)	(63)		(37)
Total	$	(200)	$	(142)


	March 31, 2024
	Carrying Value		Estimated Fair Value		Estimated Fair Value Hierarchy
(Dollars in millions)					Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	51,028	$	51,028	$	4,671	$	46,357	$	0
Restricted cash for securitization investors	474		474		474		0		0

Net loans held for investment	299,774		302,943		0		0		302,943
Loans held for sale	419		431		0		431		0
Interest receivable	2,514		2,514		0		2,514		0
Other investments(1)	1,329		1,329		0		1,329		0
Financial liabilities:
Deposits with defined maturities	75,749		75,583		0		75,583		0
Securitized debt obligations	17,661		17,703		0		17,703		0
Senior and subordinated notes	32,108		32,894		0		32,894		0
Federal funds purchased and securities loaned or sold under agreements to repurchase	568		568		0		568		0

Interest payable	762		762		0		762		0