Capital One Financial Corporation

Good day and thank you for standing by. Welcome to the Capital One Q4 2025 earnings call. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. I would now like to hand the conference over to your speaker today, Jeff Norris, Senior Vice President of Finance, Please go ahead.

Thanks very much, Josh, and welcome everyone. To access the live webcast of the call, please go to the investor section of Capital One's website at CapitalOne.com. A copy of the earnings presentation, press release, and financial supplement can also be found in the investor section of Capital One's website, CapitalOne.com, by selecting financials and then quarterly earnings release. With me this evening are Mr. Richard Fairbank, Capital One's Chairman and Chief Executive Officer, and Mr. Andrew Young, Capital One's Chief Financial Officer. Rich and Andrew are going to walk you through this presentation that summarizes our fourth quarter 2025 results. Please note that this presentation may contain forward-looking statements. Information regarding Capital One's financial performance and any forward-looking statements contained in today's discussion and the materials speak only as of the particular date or dates indicated in the materials. Capital One does not undertake any obligation to update or revise any of this information, whether as a result of new information, future events, or otherwise. Numerous factors could cause our actual results to differ materially from those described in forward-looking statements, and for more information on these factors, please see the section titled Forward-Looking Information in the earnings release presentation, and the Risk Factors section of our annual and quarterly reports, accessible at Capital One's website and filed with the SEC. With that, I'll turn the call over to Mr. Young. Andrew.

Thanks, Jeff, and good afternoon, everyone. Let me begin by saying that we are incredibly excited to announce that we have entered into a definitive agreement to acquire Brex. Rich will talk more about the Brex acquisition in a moment. I'll start tonight's presentation by covering the highlights of our fourth quarter results on slide three. In the fourth quarter, Capital One earned $2.1 billion or $3.26 per diluted common share. For the full year, Capital One earned $2.5 billion or $4.03 per share. We completed the sale of the $8.8 billion Discover Home Loans portfolio in the quarter. After refining our preliminary purchase accounting estimates, The proceeds resulted in a net gain on sale of $483 million, which is reported in the results for discontinued operations. You can find the revised Discover Purchase Consideration Walk and amortization schedules in the appendix of tonight's presentation. Net of the home loan sales and the other adjusting items, fourth quarter earnings per share were $3.86. Full year adjusted earnings per share were $19.61. We also had two notable items in the quarter, $200 million of accelerated philanthropy contributions and $37 million of pension termination expense. Relative to the prior quarter, fourth quarter revenue increased about 1% and non-interest expense increased 13%. Pre-provision earnings declined 12% or 10% net of adjustments. Our provision for credit losses was $4.1 billion in the quarter, an increase of about $1.4 billion relative to the third quarter. The increase was driven by an allowance build of $302 million in the quarter versus last quarter's release, as well as a $360 million increase in net charge-offs. Turning to slide four, I'll now cover the allowance in greater detail. The $302 million allowance billed in the quarter brought the allowance balance to $23.4 billion. Our total portfolio coverage ratio decreased five basis points and now stands at 5.16%. I'll cover the drivers of the changes in allowance and coverage ratio by segment on slide five. In our domestic card segment, our coverage ratio declined by 11 basis points and now stands at 7.17%. The $335 million allowance bill was largely driven by loan growth in the quarter. The allowance balance in our consumer banking segment was largely flat at $1.9 billion. Growth in the auto business was largely offset by continued observed credit favorability. The coverage ratio ended the quarter at 2.23%, three basis points lower than the prior quarter. And finally, in our commercial banking segment, we released $47 million of allowance. The allowance release was largely driven by charge-offs in the quarter. The commercial banking coverage ratio declined six basis points and now stands at 1.63%. Turning to page six, I'll now discuss liquidity. Total liquidity reserves ended the fourth quarter at about $144 billion, up modestly from the prior quarter. Our preliminary average liquidity coverage ratio increased to 173% in the quarter, driven by higher average cash and lower net outflows. Turning to page seven, I'll cover our net interest margin. Our fourth quarter net interest margin was 8.26%, 10 basis points lower than the prior quarter. The decline was driven by lower asset yields and a higher cash balance as the impact of the sale of the Discover Home Loans portfolio more than offset the typical seasonal decline in cash. Turning to slide eight, I will end by discussing our capital position. Our common equity tier one capital ratio ended the quarter at 14.3%, approximately 10 basis points lower than the prior quarter. Quarterly earnings were more than offset by $2.5 billion in share repurchases and the increase in risk-weighted assets. With that, I will turn the call over to Rich. Rich?