Capital One Financial Stock Earnings Reports

Capital One reported Q1 2026 GAAP EPS of $3.34 ($2.2 billion); adjusted EPS was $4.42 after integration and purchase accounting items. Revenue was down 2% sequentially while noninterest expense fell 9%, driving a sequential increase in pre-provision earnings (~$530 million; ~$430 million on an adjusted basis). The provision for credit losses was roughly flat at $4.1 billion, including ~$3.8 billion of net charge-offs and a $230 million allowance build, bringing the allowance to $23.6 billion and total coverage to 5.28%. Domestic Card showed strong purchase volume (40% YoY including Discover; ~8% ex-Discover) and continued credit improvement; Discover-related “brownout” in some vintage growth was noted but credited with stronger credit performance. Consumer Banking and Commercial Banking grew loans and deposits (including Discover contribution); consumer deposits benefited from the Discover deposit addition. Net interest margin fell to 7.87% (-39 bps QoQ) largely due to seasonality (fewer days), lower average card balances, and elevated cash/liquidity (~$76 billion cash; total liquidity reserves ~$165 billion; LCR ~166%). Capital remained strong: CET1 at 14.4% (up 10 bps QoQ) after $2.5 billion of buybacks in Q1; management noted Brex close (approx. $4.5 billion consideration) will reduce CET1 by a little over 40 bps in Q2 once purchase accounting is finalized. Management reiterated they remain on track to deliver the Discover integration synergies (target ~$2.5 billion) by mid-2027, with expense synergies more backloaded due to technology conversions and revenue synergies (debit) already materializing. Management emphasized continued heavy investment in technology, AI, marketing, Brex growth enablement, and bringing Hopper travel tech in-house — all of which will pressure efficiency metrics near-term but, management says, underpin long-term earnings power and growth. Key near-term items for investors: integration progress and timing (Discover card originations on Capital One platform targeted to be fully transitioned by end of Q3, back-book by Q1 2027), expected synergy realization timeline (full by mid-2027), Brex integration approach (enablement-first, phased), and NIM trajectory (seasonal improvement as cash normalizes but structural level post-Discover expected to persist).