Heather Shimmin
Capital One Financial (NYSE:COF) stock climbed 1.6% in Tuesday after-hours trading after the bank, which completed its acquisition of Discover Financial on May 18, turned in Q2 earnings that topped the Wall Street consensus and revenue that missed.
“We’re fully mobilized and hard at work on integration, which is going well,” said Chairman and CEO Richard D. Fairbank.
Q2 adjusted EPS of $5.48, topping the average analyst estimate of $3.72, fell from $4.06 in Q1 and $3.14 in last year’s Q2.
Total revenue of $12.5B, missing the $12.9B consensus, increased from $10.0B in the prior quarter and $9.51B a year ago.
Net interest income of $10.0B, which may not be comparable with the Visible Alpha consensus of $2.51B, climbed from $8.01B in Q1 and $7.55B in Q2 2024. Net interest margin of 7.62% grew from 6.93% in the prior quarter and 6.70% a year ago, reflecting growth in its credit card loan portfolio due to the Discover acquisition.
Provision for credit losses of $11.4B, vs. the Visible Alpha estimate of $7.28B, rose from $2.37B in the previous quarter and $3.91B a year ago. Q2 2025’s provision includes an allowance build of $7.9B driven by its Discover acquisition.
Net charge-off rate of 3.24% vs.3.40% in Q1 and 3.36% in last year’s Q2.
Noninterest expense totaled $6.99B, up from $5.90B in the prior quarter and $4.95B a year ago. Operating expense, rising 20% Q/Q and 45% Y/Y to $5.65B, increased at a faster pace than marketing expense, which grew 12% Q/Q and 26% Y/Y to $1.35B.
Total deposits of $468.1B at June 30, 2025, including $106.7B from the Discover acquisition, increased from $367.5B at March. 31, 2025.
Loans held for investment were $439.3B at June 30, vs. $323.6B at March 31. The Discover acquisition added $98.3B to domestic card loans and $9.9B to personal loans.
Conference call at 5:00 PM ET.
Earlier, Capital One Financial Non-GAAP EPS of $5.48 beats by $1.76, revenue of $12.5B misses by $370M