Capital One (COF) shares fell nearly 6 percent in after-hours trading following a mark-missing Q1 2017 earnings release.
Net income for the bank holding company hit $810 million this quarter, or $1.54 per share, down year over year from just over $1 billion and $1.84 per share in Q1 2016 — missing analysts’ expectations of $1.93 per share.
Capital One’s revenue fell to $6.22 billion from $6.54 billion year over year. Net interest income was up 8 percent year over year to $5.47 billion, while non-interest income was down 9 percent to $1.061 billion.
“In the first quarter, we continued to deliver resilient growth,” said Richard D. Fairbank, founder, chairman and chief executive officer of Capital One. “As banking is being revolutionized by digital, we are investing to lead the transformation and drive growth opportunities. We are improving efficiency. And we are building an enduring customer franchise. We remain well-positioned to deliver attractive growth and returns, as well as significant capital distribution, subject to regulatory approval.”
It’s the credit metrics that are really hitting a sour note here. Provision for credit losses was up 14 percent to $1.99 billion from Q4 2016 and up a full 30 percent year over year.
Likewise, Capital One reported allowance for loan and lease losses also rose 29 percent year over year (YoY) to $6.98 billion.
For the quarter, Capital One also saw its net charge-offs rise to hit $1.5 billion, up 28 percent YoY. Likewise, the net charge-off rate and 30-day delinquency rate both rose for the quarter. The former hit 2.5 percent in the quarter, up 42 basis points, while the latter saw a rate of 2.92 percent, up 28 basis points for the quarter.