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# Capital One's Fairbank Says Discover Deal's Earnings Power Is Visible Now: 'You Can Squint Your Eyes And See It'
- URL: https://www.bullished.co/capital-ones-fairbank-says-discover-deals-earnings-power-is-visible-now-you-can-squint-0b44d2f2/
- Published: 2026-10-20T23:11:13.000Z
- Updated: 2026-10-20T23:11:13.000Z
- Description: The CEO listed adjustments to 2026 results, but gave no figure for earnings power and no guidance on efficiency.
- Author: Matteo Parrino
- Tags: Earnings, COF, Industry: Financials

[Capital One](https://www.bullished.co/tag/cof/) Chairman and CEO Richard Fairbank said on the company's third-quarter earnings call that the earnings power promised when the Discover deal was announced can already be seen in 2026 results. "You can squint your eyes and see it now in the first three quarters of 2026," he said, after the company reported [$3.5 billion of net income](https://finance.yahoo.com/markets/stocks/articles/capital-one-q3-earnings-snapshot-201226746.html?ref=bullished.co), or $5.61 per diluted share.

## The recipe, and what Fairbank would not say

In his prepared remarks, Fairbank laid out the adjustments. Normalize for the sizable allowance release so far this year, and add the higher marketing expected in the fourth quarter. Looking forward, add the remaining synergies and deduct lost interchange revenue likely to come from the Visa MasterCard settlement.

He said the remaining synergies and the settlement are roughly offsetting in magnitude. Year-to-date results reflect about $1.8 billion of annualized combined synergies, he said, and Capital One is achieving the expected synergies ahead of schedule.

A Goldman Sachs analyst asked whether the math pointed to returns of 20% or more. Fairbank said Capital One is "not in the precise number business" and gave no figure.

An Evercore ISI analyst and a Bank of America analyst pressed on whether more marketing, technology and AI spending would eat into that earnings power. Fairbank said the company will keep investing and does not plan to give earnings-power guidance year after year. Asked separately by an analyst about the efficiency ratio, he said the company is not giving specific guidance on it.

## Marketing, the settlement and the Discover brownout

Fairbank said he expects to lean harder into marketing in 2027, including Discover marketing. Total company marketing was about $1.6 billion in the quarter, up 14% from a year earlier.

On the settlement, he said the company puts a pretty high likelihood on final approval and is planning for it, though the estimate carries a "pretty wide error bar." The hearing on final approval of the revised settlement takes place in November.

Legacy Discover card loans shrank about 3% from a year earlier; Fairbank put Discover card outstandings down 2.9% in the quarter. He said the company expects continued contraction over the next several quarters, then positive loan growth. New Discover originations rose year over year for the first time since the deal closed.

## Quarter figures

Adjusted for items tied to the Discover and Brex acquisitions, third-quarter earnings were [$6.69 per share](https://finance.yahoo.com/markets/stocks/articles/capital-one-q3-earnings-snapshot-201226746.html?ref=bullished.co), CFO Andrew Young said. The provision for credit losses was $2.9 billion, including a $225 million allowance release. The common equity tier one capital ratio was 13.8%, with $2.6 billion of share repurchases in the quarter. Young said the preliminary average liquidity coverage ratio was 163%.

The next dated item is the November hearing on final approval of the Visa and MasterCard merchant settlement, which Fairbank said Capital One is already planning around.

### Sources

- [Capital One: Q3 Earnings Snapshot](https://finance.yahoo.com/markets/stocks/articles/capital-one-q3-earnings-snapshot-201226746.html?ref=bullished.co) — Associated Press
- [Capital One stock climbs as lower credit loss provision, expenses drive Q3 earnings beat (COF:NYSE) | Seeking Alpha](https://seekingalpha.com/news/4654920-capital-one-stock-climbs-as-lower-credit-loss-provision-expenses-drive-q3-earnings-beat?ref=bullished.co) — seekingalpha.com
- [Capital One (COF) Q3 Earnings: What To Expect](https://finance.yahoo.com/markets/stocks/articles/capital-one-cof-q3-earnings-043817620.html?ref=bullished.co) — Yahoo Finance
- [Capital One reports Q3 2026 earnings with $3.5 billion net income](https://qz.com/capital-one-earnings-net-income-discover-integration-102026?ref=bullished.co) — qz.com
- [Capital One (COF) Beats Q3 Earnings and Revenue Estimates](https://finance.yahoo.com/markets/stocks/articles/capital-one-cof-beats-q3-202002229.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance

### More on Capital One Financial

- [Capital One Third-Quarter Net Income Rises To $3.5 Billion From $3.0 Billion In Second Quarter](https://www.bullished.co/capital-one-third-quarter-net-income-rises-to-3-5-billion-from-3-0-billion-in-second-ef27bfae/)
- [Capital One's September Card Charge-Offs Ran At 3.66%, Auto Delinquencies At 4.64%](https://www.bullished.co/capital-ones-september-card-charge-offs-ran-at-3-66-auto-delinquencies-at-4-64-658061d2/)

[All Capital One Financial (COF) coverage →](https://www.bullished.co/tag/cof/)