Shares of Capital One Financial (NYSE: COF) fell more than 6% intra-day on Friday after the lender announced plans to acquire fintech firm Brex Inc. and reported fourth-quarter earnings that missed expectations.
Capital One said it entered into a definitive agreement to acquire Brex, a corporate credit card specialist, for $5.15 billion, with the transaction structured as approximately 50% cash and 50% stock. The acquisition was viewed as a strategic effort to diversify Capital One’s revenue base beyond consumer lending and potentially provide greater resilience during future economic downturns.
For the fourth quarter of 2025, the company reported adjusted earnings per share of $3.86, below the analyst consensus estimate of $4.17. Revenue totaled $15.6 billion, modestly above expectations of $15.47 billion and higher than the year-ago period.
Capital One’s provision for credit losses increased by $1.4 billion to $4.1 billion, including $3.8 billion in net charge-offs and a $302 million build in loan reserves. Period-end loans held for investment rose 2% to $453.6 billion, with credit card loans increasing 3% to $279.6 billion. Total deposits grew 1% to $475.8 billion.
Net interest margin declined by 10 basis points from the prior quarter to 8.26%. The company reported a Common Equity Tier 1 capital ratio of 14.3% under the Basel III standardized framework as of December 31, 2025.
For full-year 2025, Capital One posted a 37% increase in total net revenue to $53.4 billion, while total non-interest expenses rose 42% to $30.5 billion.
