Capital One swings to a $3.02B Q2 profit as credit costs plunge and the Brex deal closes
COF sits 22% above its 52-week low of $174.24.
Summary
Capital One posted a $3.02B Q2 profit, reversing a year-ago loss, as credit costs normalized and the Discover acquisition boosted revenue. The Brex deal closed, and credit trends improved.
Key Events · Earnings and Guidance · COF
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Q2 Profit Rebound
Net income of $3.02B ($4.73 diluted EPS) versus a $4.28B loss in Q2 2025, driven by a 74% drop in provision for credit losses to $2.99B and 24% higher net interest income.
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Brex Acquisition Closed
Completed the $4.5B acquisition of Brex on April 7, 2026, paying $2.6B in cash and issuing 10.6M shares valued at $1.9B, adding corporate card and expense management capabilities.
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Credit Quality Improves
Net charge-off rate fell 1 bp YoY to 3.23%; 30+ day delinquency rate dropped 46 bps from year-end to 3.13%. Allowance for credit losses decreased $443M to $22.97B.
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Capital Returns
Repurchased $2.7B of common stock in Q2 ($5.2B in H1 2026) and paid $0.80 per share dividend. CET1 ratio declined 60 bps to 13.7%, still well above regulatory minimums.
Analysis · COF · Finance
A sharp rebound defined Capital One's Q2 2026, with net income reaching $3.02 billion compared to a $4.28 billion loss a year ago. The turnaround was fueled by a 74% drop in credit loss provisions—the prior year was inflated by a one-time $8.8 billion allowance build for the Discover acquisition—and a 24% jump in net interest income as the Discover portfolio contributed higher credit card balances. The company also closed the $4.5 billion Brex acquisition, adding corporate card capabilities. Credit quality improved, with the net charge-off rate edging down to 3.23% and delinquencies falling. Capital One returned $2.7 billion to shareholders via buybacks in the quarter. The CET1 ratio dipped to 13.7% but remains well above regulatory minimums. Fitch's review for downgrade is a watchpoint.
At the time of this filing, COF was trading at $212.35 on NYSE in the Finance sector, with a market capitalization of approximately $130.3B. The 52-week trading range was $174.24 to $259.64. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.