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Capital One's Q4'19 adjusted net income rises sharply

Capital One Financial Corp. posted fourth-quarter 2019 adjusted net income attributable to common shareholders of $1.15 billion, or $2.49 per share, up from $884 million, or $1.87 per share, in the year-ago period.

The S&P Global Market Intelligence consensus normalized EPS estimate for the quarter was $2.35.

The card issuer's GAAP earnings fell slightly. Capital One reported fourth-quarter 2019 net income available to common stockholders of $1.04 billion, or $2.25 per share, down from $1.17 billion, or $2.48 per share, for the fourth quarter of 2018.

The company's adjusted results excluded costs connected to the initial allowance build on its acquired Walmart Inc. portfolio, worth 13 cents per share; its card launch with the retailer, worth 8 cents per share; and cybersecurity incident expenses, worth 3 cents per share.

Loans held for investment as of Dec. 31, 2019, totaled $265.81 billion, an 8% increase from the year-ago quarter. Deposits for the quarter climbed 5% year over year to $262.70 billion.

The company's net interest margin was 6.95%, compared with the third quarter's 6.73% and the prior-year period's 6.96%.

Capital One recorded a provision for credit losses of $1.82 billion, up from the prior quarter's $1.38 billion and the fourth quarter of 2018's $1.64 billion. Net charge-offs for the period were $1.68 billion, versus $1.46 billion in the third quarter and $1.61 billion in the same three-month period of 2018.

The company's efficiency ratio for the quarter was 56.03%. In comparison, Capital One posted an efficiency ratio of 55.64% in the third quarter and 58.92% in the year-ago quarter.

For full year 2019, Capital One reported adjusted net income attributable to common shareholders of $5.68 billion, or $12.09 per share, compared with $5.26 billion, or $10.88 per share, in 2018.

The S&P Global Market Intelligence consensus normalized EPS estimate for the year was $11.76.

GAAP net income available to common shareholders totaled $5.19 billion, or $11.05 per share, down from $5.71 billion, or $11.82 per share, for the prior year.