Capital One’s third-quarter profit reached $3.539 billion, while plans for heavier marketing and a pending card interchange settlement raise questions about how the bank’s Discover gains may be balanced by new costs.
The bank reported net income of $3.539 billion for the three months ended Sept. 30, compared with $3.192 billion a year earlier. Total net revenue was $16.344 billion, up 6% year over year and 3% from the second quarter. Diluted earnings were $5.61 per share under generally accepted accounting principles, while adjusted non-GAAP earnings were $6.69.
Capital One excluded $483 million in acquisition amortization, $338 million in Discover integration expenses and $47 million in Brex integration expenses, all before tax. The company said those adjustments added $1.08 per share to adjusted earnings after tax. Its financial supplement described the figures as preliminary and directed investors to the third-quarter Form 10-Q when filed.
The quarter included a $225 million release from the allowance for credit losses. The Domestic Card net charge-off rate fell 73 basis points from the second quarter to 3.98%. Domestic Card’s 30+ day performing delinquency rate rose 35 basis points sequentially to 3.74%, but was 15 basis points below its year-earlier level.
Marketing expense totaled $1.594 billion, up 14% from a year earlier and down 4% from the prior quarter. Fairbank said fourth-quarter growth from the third quarter should resemble the seasonal increase in 2025. He said the bank plans to “lean harder” into marketing in 2027, citing competition and efforts to attract heavy-spending card customers, grow Capital One Shopping and expand its national banking business. He gave no dollar forecast for next year’s spending.
Capital One completed its Discover acquisition in May 2025. Fairbank said year-to-date results reflected about $1.8 billion in annualized combined synergies. The company’s 2024 deal announcement set a 2027 pretax target of $2.7 billion, including $1.5 billion in expense savings and $1.2 billion in network synergies, expected in part from moving transaction volume onto Discover’s network.
On the Oct. 20 earnings call, Fairbank said the settlement would likely reduce Capital One’s interchange revenue but gave no dollar estimate. Separately, he said the remaining Discover synergies and the settlement were roughly offsetting in magnitude. Under the proposed settlement, each of Visa and Mastercard would have to keep its average effective credit card interchange rate at least 10 basis points below the two networks’ combined, volume-weighted average for the 12 months ended March 31, 2025, for five years. It would also cap posted rates on standard consumer credit cards at 125 basis points for at least eight years and give merchants more acceptance and surcharge options, reducing their interchange costs.
A court rejected preliminary approval of an earlier agreement in June 2024, then granted preliminary approval to the revised settlement in June 2026. The court-authorized settlement site lists Nov. 16, 2026, for the final approval hearing.
