Capital One Financial Stock Earnings Reports

Capital One reported Q1 2026 GAAP earnings of $2.2 billion ($3.34 per share) and adjusted EPS of $4.42. Sequentially, revenue was down ~2% while noninterest expense fell ~9%, driving a sequential increase in pre-provision earnings of ~$530 million (8%); adjusted PPRE rose ~6%. The provision for credit losses was roughly flat at $4.1 billion, with net charge-offs of ~$3.8 billion and a modest $230 million allowance build, bringing total allowance to $23.6 billion and overall coverage to 5.28%. Domestic Card posted strong year-over-year purchase volume (40% including Discover; ~8% ex-Discover) and improved credit metrics, though Discover-originated loans are in a temporary "brownout" due to prior Discover credit pullbacks and transitional policy changes. Consumer Banking grew auto originations and deposits (helped by Discover), while Commercial Banking credit metrics remain generally healthy but somewhat lumpier. NIM declined to 7.87% (down 39 bps) driven by seasonality (fewer days), seasonal card balance paydowns, and elevated low-yielding cash (large deposit growth, Discover Home Loans sale). Liquidity remains ample (~$165 billion reserves; cash ~$76 billion; prelim LCR 166%). Capital: CET1 was 14.4% (up 10 bps q/q) after $2.5 billion of buybacks in Q1. The company closed the Brex acquisition for ~$4.5 billion after quarter-end (expected to lower CET1 by ~40 bps in Q2) and completed the debit conversion to Discover; full Discover integration (expense synergies) is expected to complete by mid-2027 with $2.5 billion of total synergies targeted. Management reiterated they will continue to invest (tech, AI, marketing, Brex and travel/Hopper) and expect the Discover-related earnings power (ROTCE basis, normalized to a 12.5% capital assumption) to be consistent with prior expectations, while acknowledging near-term impacts to efficiency ratio and the phased nature of synergies. Key risks highlighted: geopolitical energy price shock (Middle East) and related macro downside, and the usual timing/seasonality effects on NIM and allowances.