Capital One missed earnings and revenue estimates last quarter as it continued to absorb expenses from its purchase of credit card brand Discover.
Revenue was down 2% quarter-over-quarter to US$15.23 billion, missing Zacks consensus estimates by 0.9%. Adjusted earnings per share dropped to $4.42, up from $4.06 one year ago but under estimates of $4.61.
“Our results in the first quarter reflect solid top line growth and strong credit performance," said chair and CEO Richard Fairbank.
"The Discover integration continues to go well and we continue to build momentum from this game-changing acquisition.”
The company reported a hit of $1.08 from Discover amortisation and integration expenses. Capital One agreed to purchase Discover for $35.3 billion in 2024 in a bid to expand its credit card offerings, with the transaction completing last May.
Loans held for investment dropped 1% to $447.8 billion by the end of last quarter. This was largely due to a 3% decline in credit card loans, while consumer banking and commercial banking loans rose 2% and 1% respectively.
Average loans held for investment rose less than 1% to $446.2 billion. Total deposits at the quarter’s end climbed 3% to $489.1 billion, while average deposits increased 2% to $480.0 billion.
Net interest income was $12.14 billion, up 52% year-over-year but down 3% from the prior quarter.
Capital One’s common equity tier 1 ratio was 14.4%, rising slightly from the previous quarter’s 14.3% and well above the 13.6% seen one year ago.
Shares in Capital One (NYSE: COF) closed 1.6% lower at $202.50, and dropped a further 2.2% after-hours. Its market capitalisation is $128.10 billion.
