Capital One Financial (COF) stock dipped 4.1% in Thursday after-hours trading after the credit card company posted weaker-than-expected Q4 earnings as expenses and its provision for credit losses increased. Comparisons to year-ago results reflect the company’s acquisition of Discover Financial in May 2025.
The company also announced that it agreed to acquire fintech Brex for $5.15B.
Q4 adjusted EPS of $3.86, trailing the average analyst estimate of $4.14, fell from $5.95 in Q3 and $3.09 in Q4 2024.
During the quarter, Capital One (COF) recorded:
- A $509M intangible amortization expense on Discover,
- $352M of Discover integration expenses,
- $37M Discover loan and deposit fair value mark amortization, and
- Legal reserve of $117M
- Those are partly offset by a $483M gain on the sale of its home loan portfolio and
- The reversal of $29M on its FDIC special assessment.
That brought its Q4 GAAP EPS to $3.26, down from $4.83 in Q3 and up from $2.67 in Q4 2024.
Total revenue of $15.6B, beating the $15.5B consensus, increased from $15.4B in the prior quarter and $10.2B a year ago.
Net interest income of $12.5B, exceeding the Visible Alpha consensus of $12.4B, climbed from $12.4B in Q3 and $8.10B in Q4 2024. Its net interest margin of 8.26% narrowed from 8.36% in the previous quarter and grew from 7.03% a year ago. The Y/Y increase reflects its Discover acquisition. Adjusted net interest margin of 8.28% narrowed from 8.43% in the prior quarter and widened from 7.03% a year ago.
Q4 preprovision earnings of $6.24B, missing the Visible Alpha estimate of $6.80B, declined from $7.10B in Q3 and increased from $4.10B in the prior year’s Q4.
Provision for credit losses of $4.14B, exceeding the Visible Alpha estimate of $4.09B, jumped from $2.71B in the previous quarter and $2.64B a year ago.
Net charge-off rate of 3.45% vs. 3.16% in Q3 and 3.59% in the year-ago Q4.
Noninterest expense totaled $9.34B, up from $8.26B in the prior quarter and $6.09B a year ago.
Total deposits of $475.78B at Dec. 31, 2025, increased from $468.8B at Sept. 30. Loans held for investment were $453.6B at Dec. 31, 2025, vs. $443.2B at Sept. 30.
“Years of strategic preparation and our choices to consistently invest to sustain long-term growth and returns enable our results and put us in a strong position going forward,” said Founder, Chairman, and CEO Richard D. Fairbank.
Conference call at 5:00 PM ET.