Capital One earned $3.0B ($4.73/share) on revenue up 27% to $15.85B, swinging from last year's Discover-driven loss as NIM rose to 8.01% and card charge-offs fell, while auto credit worsened.
Revenue
$15.8B
+26.9% YoY
Net income
$2.9B
Diluted EPS
$4.73
Overview
Capital One earned $3.0 billion in the second quarter of 2026 (quarter ended June 30), or $4.73 per diluted share, on total net revenue of $15.85 billion, up 27% from a year earlier. A year ago the company lost $4.3 billion ($-8.58 per share). The swing is mostly an accounting effect of the Discover acquisition, not a sudden change in the underlying business. Discover closed on May 18, 2025. Under the accounting rules for acquired loans, Capital One had to book an $8.8 billion initial allowance for credit losses on Discover's loans as an expense that quarter. (An allowance is money set aside for loans the bank expects will not be repaid.) No such charge recurred this year, so the provision for credit losses fell from $11.4 billion to $3.0 billion.
The comparison also flatters revenue. Q2 2025 contained only about six weeks of Discover, while Q2 2026 contains a full quarter. That is why average loans grew 19% and average diluted share count grew 23% year over year. The more useful reads this quarter are the operating trends. Net interest margin widened to 8.01%. Card credit improved (the domestic card net charge-off rate fell to 4.71% from 5.25%). Auto credit is the one area getting worse. Capital One also kept returning capital, with $2.7 billion of buybacks in the quarter.
Two deals shape the quarter. Discover integration costs were $298 million in Q2 and have reached $2.1 billion cumulatively since the deal was announced. On April 7, 2026, Capital One also closed its roughly $4.5 billion acquisition of Brex, a corporate-card and expense-management fintech. It paid $2.6 billion in cash plus 10.6 million shares, then immediately repaid $1.1 billion of Brex debt. From this quarter, Brex and Capital One's legacy corporate card sit inside the Domestic Card business.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total net revenue
$15,850M
Read 0 community reports on Capital One, or write your own.Write a report
Net income (loss) available to common stockholders
$2,935M
$(4,340)M
n/m
Diluted EPS
$4.73
$(8.58)
n/m
Net interest margin
8.01%
7.62%
+39 bps
Net charge-off rate (total company)
3.23%
3.24%
-1 bp
Domestic card net charge-off rate
4.71%
5.25%
-54 bps
Auto net charge-off rate
1.43%
1.25%
+18 bps
Efficiency ratio (non-interest expense / revenue)
57.05%
55.96%
+109 bps
Return on average tangible common equity
18.04%
(32.99)%
n/m
Weighted-average diluted shares
621.1M
505.6M
+23%
n/m = not meaningful because of the swing from loss to profit. "Net income available to common stockholders" is profit after preferred dividends and amounts allocated to participating securities, and it is the figure behind EPS. Source: Form 10-Q, Table 1 and Table 25.
Year to date (first six months): total net revenue was $31.1 billion (+38%). Net income was $5.2 billion ($8.07 per diluted share), compared with a $2.9 billion loss ($-6.74) in the first half of 2025. Net income available to common stockholders was $5.0 billion. The net charge-off rate was 3.34%, compared with 3.31%.
What drove revenue
Net interest income, the interest earned on loans minus the interest paid on deposits and debt, rose $2.4 billion to $12.4 billion. The 10-Q attributes this "primarily" to "higher average credit card loan balances, largely due to the addition of Discover." Average credit card loans were $271.2 billion, compared with $209.7 billion a year earlier.
Net interest margin (NIM) is net interest income as an annualized share of interest-earning assets, which measures how profitably the bank lends out its money. It rose 39 bps to 8.01%, and 14 bps from Q1 2026 according to the earnings release. That is very high for a US bank because credit cards carry high interest rates. The same Discover card balances drove this increase. The funding side helped too. Capital One's cumulative interest-bearing deposit beta rose to 37% as of June 30 from 23% at year-end 2025. Deposit beta is the share of the Fed's rate cuts that the bank has passed on to depositors as lower rates. The earnings release says the rate paid on interest-bearing deposits fell 9 bps from Q1 to 2.91%.
One pressure point sits under the headline: the average yield on card loans fell to 17.21% from 17.94%. Capital One gets a wider margin mostly by having more card loans and paying less for deposits. The price it charges on each card loan is falling, not rising.
Non-interest income rose 39% to $3.5 billion. Discount and interchange fees (what merchants pay when customers swipe a card) rose to $2,256 million from $1,478 million. Service charges rose to $808 million from $658 million. Part of the gain comes from a Discover-specific shift. Capital One is reissuing its own legacy debit cards onto the Global Payment Network (the Discover, PULSE and Diners Club networks it now owns), so it keeps network fees it used to pay to others. Global Payment Network volume was $189.6 billion in the quarter, compared with $74.0 billion in the partial Q2 2025 period.
Costs: Discover integration and acquisition amortization
Non-interest expense rose 29% to $9.0 billion. Salaries rose to $3,769 million from $2,999 million. Marketing rose 23% to $1,661 million. Amortization of intangibles is the non-cash write-down of customer relationships and brand values booked at acquisition, and it rose to $507 million from $271 million. The efficiency ratio (expense as a share of revenue, where lower is better) worsened slightly to 57.05%.
The earnings release lists three "adjusting items" in the quarter: $494 million of acquisition amortization, $298 million of Discover integration expense and $96 million of Brex integration expense. That is $888 million pre-tax, or $1.08 per share after tax. Excluding them, the release reports adjusted EPS of $5.81 and an adjusted efficiency ratio of 51.38%. These are non-GAAP figures. The amortization will keep appearing in GAAP results for years. The integration costs should eventually stop.
Credit quality: card improving, auto worsening
The provision for credit losses is the expense a bank books to cover expected loan losses. It has two parts: the loans actually written off in the quarter (net charge-offs) and any change to the allowance for future losses. This quarter:
Net charge-offs were $3.64 billion (3.23% annualized), essentially flat in rate year over year.
The allowance fell by a net $662 million release. The Domestic Card allowance was cut by $705 million, while the auto allowance was built by $116 million (Table 26).
The total allowance ended at $23.0 billion, or 5.02% of loans, down from 5.16% at year-end.
Credit metric
Jun 30, 2026
Dec 31, 2025
Domestic card 30+ day delinquency rate
3.39%
3.99%
Auto 30+ day delinquency rate
4.80%
5.79%
Total 30+ day delinquency rate
3.13%
3.59%
Domestic card allowance coverage
6.99%
7.17%
Consumer Banking allowance coverage
2.39%
2.23%
A "30+ day delinquency" is a loan at least a month behind on payments. It is an early warning of future write-offs. Card delinquencies usually fall from year-end into mid-year for seasonal reasons, so part of the decline since December is normal. The year-over-year charge-off comparison is not seasonal, though, and it improved. The 10-Q attributes the drop in the card charge-off rate to "favorable observed credit performance."
The Q2 2025 charge-off rates are also distorted by the acquisition. They exclude $19.4 billion of Discover loans that were fully charged off at purchase, and those loans' expected $3.3 billion of recoveries went into the allowance instead.
Auto is going the other way. The auto net charge-off rate rose to 1.43% from 1.25%, and Capital One is building reserves there. Consumer Banking's provision rose 76% to $444 million, which the filing attributes to "allowance builds in our auto loan portfolio compared to a release" a year earlier. The auto book is also growing fast: originations were up 19% to $12.9 billion, and period-end auto loans reached $89.3 billion from $83.6 billion at year-end. Seasonally lower auto delinquencies (4.80%, compared with 5.79% in December) have not stopped management from adding to reserves, which suggests it expects losses on this book to rise.
Segment results
Segment (Q2)
Revenue 2026
Revenue 2025
Net income 2026
Net income 2025
Credit Card
$11,765M
$9,095M
$2,411M
$(4,917)M
Consumer Banking
$3,209M
$2,556M
$486M
$450M
Commercial Banking
$850M
$937M
$239M
$280M
Other
$26M
$(96)M
$(116)M
$(76)M
Segment net income is income from continuing operations, net of tax (Table 8).
Credit Card accounts for 74% of revenue and 80% of profit. Its entire swing to profit comes from the absent Discover allowance charge. Provision fell $8.6 billion to $2.5 billion. Purchase volume rose 26% to $253.8 billion.
Consumer Banking profit rose 8%. Revenue grew 26% on Discover deposits and network fees, but higher auto provisions and costs absorbed most of that. Deposits reached $435.2 billion at period-end.
Commercial Banking profit fell 15%. Part of the decline is a reclassification: the legacy corporate card product moved to Domestic Card this quarter. Capital-markets revenue was also lower, and the commercial charge-off rate rose to 0.53% from 0.33%, mainly in commercial and industrial loans.
Other carries the Discover integration costs. Its loss widened partly because Q2 2025 benefited from a one-time California tax-law change that did not recur.
Capital and buybacks
The CET1 ratio (common equity Tier 1 capital as a share of risk-weighted assets, the main regulatory measure of a bank's loss-absorbing cushion) was 13.7%, down from 14.3% at year-end. That is still well above Capital One's 9.0% requirement including buffers. The Federal Reserve kept the company's stress capital buffer at 4.5% through September 30, 2027. The Fed's June 2026 stress test did not change it.
The ratio fell because Capital One is spending capital. It repurchased $2.7 billion of stock in Q2 (14.3 million shares at an average of about $190) and $5.2 billion in the first half. It also paid $501 million of common dividends in the quarter, after raising the dividend to $0.80 per share from $0.60 a year earlier, and it paid for Brex. Period-end shares outstanding were 613.5 million, down 4% from 639.5 million a year earlier, even after issuing shares for Brex. About $8.9 billion remained under the $16 billion buyback authorization at the end of June. Tangible book value per share was $105.21, compared with $99.35.
Takeaway: The swing from a $4.3 billion loss to a $3.0 billion profit is mostly the absence of last year's one-time $8.8 billion Discover reserve charge. The underlying business did improve, though. Pre-provision earnings (revenue minus operating costs, before credit losses) were $6.8 billion, compared with $5.5 billion. NIM is above 8%, card losses are falling, and the company can still buy back about $2.7 billion of stock a quarter with CET1 near 13.7%. The one weak spot is auto lending: charge-offs are rising and reserves are being built while the book grows 19% in originations.
Outlook
Neither the 10-Q nor the earnings release gives numeric guidance for the rest of 2026. The CEO's comment in the release is limited to "solid top line growth and strong credit performance" and integration "going well," 14 months in. Things to watch into Q3:
Card yields compared with funding costs. NIM expansion has come from mix and cheaper deposits while card yields fell 73 bps. If deposit-rate cuts slow, NIM could flatten.
Auto credit. Whether the auto reserve builds and rising charge-off rate continue as that book grows.
Integration costs and network migration. Integration costs have reached $2.1 billion so far and should eventually stop. Moving more debit (and eventually credit) volume onto the Global Payment Network is the main source of long-term cost savings and fee gains from the Discover deal.
Pace of capital return. CET1 fell 60 bps in six months. Buybacks at the Q2 rate would bring it down further, though it would still sit well above the 9.0% requirement.
Source: Capital One Form 10-Q for the quarter ended June 30, 2026 (filed July 28, 2026). Adjusted EPS, the adjusting-item amounts, quarter-over-quarter changes and the CEO quote come from the Q2 2026 earnings release (Form 8-K Exhibit 99.1, July 21, 2026). Pre-provision earnings is computed from the 10-Q's Table 1 (revenue minus non-interest expense).