UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

April 7, 2023

Date of Report (Date of earliest event reported)

CAPITAL ONE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (703) 720-1000

(Not applicable)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

On April 6, 2023, Capital One, National Association, a subsidiary of Capital One Financial Corporation (“Capital One” or the “Company”), received from Walmart a notice of termination of the credit card partnership agreement (the “CCPA”) under which Capital One is the exclusive issuer of Walmart’s private label and co-branded credit card program in the U.S. (the “Card Program”). On April 7, 2023, Walmart filed a lawsuit in the Southern District of New York seeking a declaratory judgment that it has the contractual right to terminate the Card Program early. Capital One disputes that Walmart has any right to terminate the Card Program mid-stream and will vigorously defend our contractual rights in court.

As of December 31, 2022, the Card Program consisted of approximately $8.3 billion in ending outstanding loan balances and the allowance for credit losses related to the Card Program portfolio was approximately $314 million. The allowance for credit losses as well as the capital we hold against the Card Program portfolio are lower than they would be otherwise due to the loss sharing arrangement agreed to as part of the Card Program. For the year ended December 31, 2022, the Card Program produced approximately $214 million in net income after taxes. Any future financial impacts will depend on the timing and final resolution of this matter, including the related litigation, and future management actions.

If a court finds that Walmart is permitted to terminate the Card Program early, we would expect the resulting transfer of the card portfolio to a new issuer to occur no earlier than January 2025. The CCPA also requires that Walmart or one or more new issuers pay to Capital One a purchase price that is equal to par for the private label accounts, and equal to fair market value for the co-branded accounts, in each case, that are part of the Card Program. Capital One is entitled under the CCPA to retain any premium above 1.5% of the par value of the co-branded accounts upon sale.

Cautionary Statements Regarding Forward-Looking Statements.

The information provided in this Form 8-K contains forward-looking statements, which involve a number of risks and uncertainties. The Company cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that the Company files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2022. Forward-looking statements speak only as of the date made. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Note: Information in this report furnished pursuant to Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. This report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD. Furthermore, the information provided in this Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

(d)       Exhibits

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.