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Regulatory and Capital Adequacy | 12 Months Ended
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Dec. 31, 2024
Mortgage Banking [Abstract] |
Regulatory and Capital Adequacy |
NOTE 12—REGULATORY AND CAPITAL ADEQUACY
Regulation and Capital Adequacy The Company and the Bank are subject to the regulatory capital requirements established by the Board of Governors of the Federal Reserve System (“Federal Reserve”) and the Office of the Comptroller of the Currency (“OCC”), respectively (the “Basel III Capital Rules”). The Basel III Capital Rules implement certain capital requirements published by the Basel Committee on Banking Supervision (“Basel Committee”), along with certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) and other capital provisions. As a bank holding company (“BHC”) with total consolidated assets of at least $250 billion but less than $700 billion and not exceeding any of the applicable risk-based thresholds, the Company is a Category III institution under the Basel III Capital Rules. The Bank, as a subsidiary of a Category III institution, is a Category III bank. Moreover, the Bank, as an insured depository institution, is subject to prompt corrective action (“PCA”) capital regulations. Under the Basel III Capital Rules, we must maintain a minimum common equity Tier 1 (“CET1”) capital ratio of 4.5%, a Tier 1 capital ratio of 6.0% and a total capital ratio of 8.0%, in each case in relation to risk-weighted assets. In addition, we must maintain a minimum leverage ratio of 4.0% and a minimum supplementary leverage ratio of 3.0%. We are also subject to the capital conservation buffer requirement and countercyclical capital buffer requirement, each as described in “Part I—Item 1. Business—Supervision and Regulation—Capital and Stress Testing Regulation—Stress Capital Buffer Rule.” Our capital and leverage ratios are calculated based on the Basel III standardized approach framework. We have elected to exclude certain elements of accumulated other comprehensive income (“AOCI”) from our regulatory capital as permitted for a Category III institution. For information on the recognition of AOCI in regulatory capital under the proposed changes to the Basel III Capital Rules, see “Part I—Item 1. Business—Supervision and Regulation—Capital and Stress Testing Regulation—Basel III Finalization Proposal.” The Federal Reserve, OCC, and the Federal Deposit Insurance Corporation (“FDIC”) (collectively, “Federal Banking Agencies”) adopted a final rule (“CECL Transition Rule”) that provides banking institutions an optional five-year transition period to phase in the impact of the CECL standard on their regulatory capital (the “CECL Transition Election”). We adopted the CECL standard (for accounting purposes) as of January 1, 2020, and made the CECL Transition Election (for regulatory capital purposes) in the first quarter of 2020. Therefore, the applicable amounts presented in this Report reflect such election. 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 were 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.
|  | Capital Impact Delayed |  | Phase In Period
|  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025
“Day 1” CECL adoption impact |  | Capital impact delayed to 2022 |  | 25% Phased In |  | 50% Phased In |  | 75% Phased In |  | Fully Phased In
Cumulative “day 2” ongoing impact |  | 25% scaling factor as an approximation of the increase in allowance under CECL |  |  |  |
As of December 31, 2021, we added back an aggregate amount of $2.4 billion to our regulatory capital pursuant to the CECL Transition Rule. Consistent with the rule, we have phased in 75% of this amount as of January 1, 2024. The remaining $600 million has been phased in on January 1, 2025. As of December 31, 2024, the Company’s CET1 capital ratio, reflecting the CECL Transition Rule, was 13.5% and would have been 13.3% excluding the impact of the CECL Transition Rule (or “on a fully phased-in basis”). For additional information about the regulatory capital rules to which we are subject, including recent proposed amendments to these rules, see “Part I—Item 1. Business—Supervision and Regulation.” The following table provides a comparison of our regulatory capital amounts and ratios under the Basel III standardized approach subject to the applicable transition provisions, the regulatory minimum capital adequacy ratios and the applicable well-capitalized standard for each ratio as of December 31, 2024 and 2023. Table 12.1: Capital Ratios Under Basel III(1)
|  | December 31, 2024 |  | December 31, 2023
(Dollars in millions) |  | Capital Amount |  | Capital Ratio |  | Minimum Capital Adequacy |  | Well- Capitalized |  | Capital Amount |  | Capital Ratio |  | Minimum Capital Adequacy |  | Well- Capitalized
Capital One Financial Corp: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common equity Tier 1 capital(2) |  | $ | 50,807 |  |  | 13.5 | % |  | 4.5 | % |  | N/A |  | $ | 47,615 |  |  | 12.9 | % |  | 4.5 | % |  | N/A
Tier 1 capital(3) |  | 55,652 |  |  | 14.8 |  | 6.0 |  | 6.0% |  | 52,460 |  |  | 14.2 |  | 6.0 |  | 6.0%
Total capital(4) |  | 61,805 |  |  | 16.4 |  | 8.0 |  | 10.0 |  | 59,124 |  |  | 16.0 |  | 8.0 |  | 10.0
Tier 1 leverage(5) |  | 55,652 |  |  | 11.6 |  | 4.0 |  | N/A |  | 52,460 |  |  | 11.2 |  | 4.0 |  | N/A
Supplementary leverage(6) |  | 55,652 |  |  | 9.9 |  | 3.0 |  | N/A |  | 52,460 |  |  | 9.6 |  | 3.0 |  | N/A
CONA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common equity Tier 1 capital(2) |  | 51,118 |  |  | 13.6 |  | 4.5 |  | 6.5 |  | 47,933 |  |  | 13.1 |  | 4.5 |  | 6.5
Tier 1 capital(3) |  | 51,118 |  |  | 13.6 |  | 6.0 |  | 8.0 |  | 47,933 |  |  | 13.1 |  | 6.0 |  | 8.0
Total capital(4) |  | 56,937 |  |  | 15.2 |  | 8.0 |  | 10.0 |  | 52,636 |  |  | 14.3 |  | 8.0 |  | 10.0
Tier 1 leverage(5) |  | 51,118 |  |  | 10.7 |  | 4.0 |  | 5.0 |  | 47,933 |  |  | 10.3 |  | 4.0 |  | 5.0
Supplementary leverage(6) |  | 51,118 |  |  | 9.2 |  | 3.0 |  | N/A |  | 47,933 |  |  | 8.8 |  | 3.0 |  | N/A
__________ (1)Capital requirements that are not applicable are denoted by “N/A.” (2)CET1 capital ratio is a regulatory capital measure calculated based on CET1 capital divided by risk-weighted assets. (3)Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets. (4)Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets. (5)Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets. (6)Supplementary leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by total leverage exposure. We exceeded the minimum capital requirements and the Bank exceeded the minimum regulatory requirements and was well-capitalized under PCA requirements as of both December 31, 2024 and 2023. Regulatory restrictions exist that limit the ability of CONA to transfer funds to our BHC. As of December 31, 2024, funds available for dividend payments from the Bank were $8.9 billion. Applicable provisions that may be contained in our borrowing agreements or the borrowing agreements of our subsidiaries may limit our subsidiaries’ ability to pay dividends to us or our ability to pay dividends to our stockholders.While the Merger Agreement is in effect and until the Merger Agreement is terminated or the Transaction is completed, we are restricted from paying quarterly cash dividends on our common stock in excess of $0.60 per share per quarter. There can be no assurance that we will declare and pay any dividends to stockholders. For additional information on the prior approval requirement on our capital distributions associated with our capital plan resubmission, see “Part I—Item 1. Business—Supervision and Regulation—Capital and Stress Testing Regulation—Capital Planning and Stress Testing.”

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- Definition The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (c)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1D -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1D Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1F -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1F + Details
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