Capital One Q3 2026 Earnings: Revenue Growth Lifts Net Income

Capital One (NYSE: COF) reported Q3 2026 total net revenue of $16.34 billion, up 6% from $15.36 billion a year earlier, while diluted EPS rose 16% to $5.61 from $4.83. Net income increased 11% to $3.54 billion as net interest income and non-interest income grew, while a lower tax rate and fewer diluted shares helped EPS rise faster than pretax income.

Core Earnings Data

Net interest income increased 4% year over year to $12.89 billion, while non-interest income climbed 17% to $3.46 billion. Within non-interest income, net discount and interchange fees rose 29% to $2.34 billion.

These gains were partly offset by a 7% increase in non-interest expense and a 7% increase in the provision for credit losses. Pretax income consequently rose 4%, but the effective tax rate declined to 22.6% from 27.1%, contributing to the larger increase in net income. Diluted weighted-average shares also fell 5%, helping EPS grow faster than net income.

Business and Segment Performance

Period-end loans held for investment reached $462.53 billion, up 4% year over year and 1% from the preceding quarter. Most of the $5.4 billion sequential increase came from Consumer Banking, where loans grew $3.6 billion, or 4%, to $94.0 billion, driven by the auto portfolio’s increase to $92.9 billion.

Credit Card loans increased by $952 million sequentially to $276.4 billion, a gain of less than 1%. Commercial Banking loans rose $834 million, or 1%, to $92.1 billion. Average loans across the company increased 1% sequentially and 4% year over year to $457.4 billion.

Profitability, Credit, and the Balance Sheet

Capital One’s net interest margin expanded 40 basis points sequentially and 5 basis points year over year to 8.41%. Compared with Q2 2026, revenue rose 3% while non-interest expense declined 2%, lifting non-GAAP pre-provision earnings by 10% to $7.5 billion. The reported efficiency ratio improved sequentially to 54.19% from 57.05%, although it was 39 basis points higher than a year earlier.

Credit indicators were mixed. Net charge-offs declined 14% sequentially and 10% year over year to $3.12 billion, while the net charge-off rate fell to 2.73%. However, the 30-day-plus delinquency rate increased 28 basis points sequentially to 3.41%, though it remained 9 basis points below the prior-year level. The $2.92 billion provision included a $225 million loan reserve release.

Period-end deposits decreased 1% sequentially to $480.7 billion but remained 3% above the prior-year level. The rate paid on interest-bearing deposits increased 3 basis points sequentially to 2.94%, while borrowings rose 10% to $49.8 billion. The preliminary Common Equity Tier 1 ratio was 13.8%, up 10 basis points sequentially but down 60 basis points year over year.

Integration and Amortization Costs Reduced Reported EPS by $1.08

Capital One reported adjusted diluted EPS of $6.69, compared with GAAP diluted EPS of $5.61. The $1.08 difference reflected acquisition-related amortization and the costs of integrating Discover and Brex.

Adjusted EPS is a non-GAAP measure. CEO Richard Fairbank said the Discover integration continued to progress and that the company was making headway on its expected synergies, though the release did not provide a quantified synergy update.

Risks Investors Need to Watch

• Sequential delinquency increase: The charge-off rate improved, but the 30-day-plus delinquency rate rose 28 basis points from Q2. A continued increase could eventually affect charge-offs and credit-loss provisions.
• Funding mix changes: Deposits declined sequentially while borrowings increased 10% and the interest-bearing deposit rate edged higher. The interaction between funding costs and asset yields will remain important for the net interest margin.
• Integration execution: Discover and Brex integration expenses reduced reported earnings, while the expected Discover synergies were not quantified in this release.
• Lower capital ratios from a year earlier: The CET1 ratio declined 60 basis points year over year, while the tangible common equity ratio fell 100 basis points to 9.8%. The reported regulatory capital measures were preliminary.

Summary

Capital One’s Q3 2026 results reflected higher net interest and non-interest income, expanding sequential net interest margin, and lower charge-offs. Revenue growth, a lower effective tax rate, and a reduced share count supported double-digit growth in net income and EPS, while integration costs, rising sequential delinquencies, and changes in the funding mix remain the main areas to monitor.