Capital One Financial Corporation (NYSE:COF) shares moved lower in U.S. premarket trading on Friday after the lender unveiled plans to acquire fintech firm Brex Inc. and reported fourth-quarter earnings that fell short of market expectations.
Capital One said it has signed a definitive agreement to purchase Brex, a provider of corporate credit cards, in a transaction valued at $5.15 billion. The deal will be funded with roughly equal parts cash and stock. The acquisition is seen as a strategic move to broaden Capital One’s business mix beyond its core consumer base, potentially strengthening its resilience in a future economic slowdown.
Analysts at BTIG said in a note to clients that the Brex acquisition “makes sense” over the long term, but they reduced their projections for Capital One’s near-term returns “primarily due to both the near-term dilution […] and the slowing of our share repurchases for the next two years.”
For the fourth quarter of 2025, Capital One reported adjusted earnings per share of $3.86, missing the analyst consensus estimate of $4.17. Revenue totaled $15.6 billion, slightly ahead of expectations of $15.47 billion and up from the same period a year earlier.
“Our fourth quarter and full year results reflect solid top line growth and strong and stable credit performance,” said CEO Richard Fairbank in a statement. “Years of strategic preparation and our choices to consistently invest to sustain long-term growth and returns enable our results and put us in a strong position going forward.”
Credit costs increased during the quarter, with the provision for credit losses rising by $1.4 billion to $4.1 billion. This included net charge-offs of $3.8 billion and a $302 million build in loan loss reserves.
Loans held for investment at quarter end grew 2% to $453.6 billion, driven in part by a 3% increase in credit card balances to $279.6 billion. Total deposits rose 1% to $475.8 billion.
Net interest margin edged lower to 8.26% in the fourth quarter, down 10 basis points from the prior quarter. Capital One ended the year with a strong capital base, reporting a Common Equity Tier 1 capital ratio of 14.3% under the Basel III Standardized Approach as of December 31, 2025.
For the full year, Capital One posted a 37% increase in total net revenue to $53.4 billion, while total non-interest expenses climbed 42% to $30.5 billion.