How much did Capital One pay for Discover?

The preliminary purchase consideration is about $51.6 billion. It consists of roughly 256.5 million newly issued Capital One common shares (about $50.6 billion at $197.22 per share as of May 16, 2025) and about $1.1 billion of new Capital One preferred stock issued in exchange for Discover's Series C and D preferred shares.

What does the pro forma data show about the combined company's earnings?

For Q1 2025, pro forma net income was about $2.16 billion, with pro forma diluted EPS of $3.20. For FY2024, pro forma income from continuing operations available to common stockholders was only about $469 million (EPS $0.73), because it includes an $8.1 billion one-time allowance build for non-PCD loans and about $2.5 billion of annual intangible amortization. These pro forma figures are illustrative, not a forecast.

How strong was Discover's standalone performance?

Discover reported 2024 net income of $4.54 billion (up from $2.80 billion in 2023), diluted EPS of $17.72, and a return supported by $14.3 billion of net interest income. Its allowance for credit losses dropped to $8.3 billion, partly due to the private student loan sale, which produced a one-time $450 million gain. In Q1 2025, Discover earned $1.1 billion, up from $851 million a year earlier.

Are these pro forma numbers final?

No. Capital One states that the purchase price allocation is preliminary, that its valuation of Discover's assets and liabilities is not complete, and that the fair value marks, intangible lives, and deferred tax estimates are subject to change. The pro forma statements also exclude integration costs, synergies, and the effects of post-closing dispositions, so actual results may differ materially.

What is the impact on capital and goodwill?

Pro forma stockholders' equity at March 31, 2025 is about $109 billion, compared with Capital One's historical $63.5 billion, reflecting the share issuance. Pro forma goodwill rises to about $34.9 billion from $15.1 billion, and intangible assets are added. Investors should watch future goodwill impairment testing and the amortization schedule for purchased credit card relationships, which is about $1.6 billion for the rest of 2025 and about $1.8 billion in 2026.

CAPITAL ONE FINANCIAL CORP 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K/A filed May 22, 2025. Cited figures are marked; the original filing is the authoritative source.

Capital One (COF) filed this Form 8-K/A to add the financial statements of Discover Financial Services (audited FY2024/2023/2022, unaudited Q1 2025) and unaudited pro forma combined financial information, following the completion of its all-stock acquisition of Discover on May 18, 2025.

The pro forma statements are presented for informational purposes only and do not project future results. The filing is an amendment to the original 8-K filed May 19, 2025, and does not otherwise change those disclosures. The key pro forma figures for investors are a preliminary purchase consideration of about $51.6 billion^a (roughly 256.5 million Capital One shares issued at a 1.0192 exchange ratio, plus $1.06 billion of preferred stock) and preliminary goodwill of about $19.9 billion.

Discover's standalone results were solid: 2024 net income of $4.5 billion^b, diluted EPS of $17.72, and a $450 million one-time gain from the private student loan sale. Discover's allowance for credit losses fell to $8.3 billion at year-end 2024, and Q1 2025 net income was $1.1 billion. Pro forma Q1 2025 net income was about $2.2 billion, and pro forma 2024 income from continuing operations was about $863 million after an $8.1 billion day-one allowance build for non-PCD loans and about $2.5 billion of intangible amortization.

The purchase accounting remains preliminary. Capital One notes that the valuation of Discover's assets and liabilities is incomplete, and that roughly $10 billion^c of acquired debt securities were sold after closing. Investors should therefore treat the pro forma goodwill, intangible amortization, and credit-mark figures as provisional, and expect them to change as the final fair value work is finished.

02—Key points

Key Highlights

Acquisition closed May 18, 2025: Discover holders received 1.0192 Capital One shares per Discover share, with Capital One shareholders owning roughly 60% of the combined company.
Preliminary purchase consideration of about $51.6 billion, including about $50.6 billion in common stock and $1.1 billion in new Capital One preferred stock.
Preliminary goodwill of about $19.9 billion, with about $10.3 billion of identifiable intangibles (mainly purchased credit card relationships, amortized over 7 years).
Pro forma Q1 2025 net income of $2.16 billion and pro forma diluted EPS of $3.20; pro forma FY2024 diluted EPS from continuing operations of $0.73, depressed by the $8.1 billion non-PCD allowance build.
Discover standalone FY2024: net income $4.54 billion, diluted EPS $17.72, $8.3 billion allowance for credit losses, and $147.6 billion total assets; Q1 2025 net income $1.1 billion.
Pro forma combined balance sheet at March 31, 2025 totals about $668 billion in assets, with about $109 billion of stockholders' equity and about $476 billion of deposits.
Purchase accounting is preliminary, and about $10 billion of acquired debt securities were sold after closing, so final goodwill, intangible, and credit-mark figures may differ materially.

03—Questions

Frequently Asked Questions

How much did Capital One pay for Discover?
The preliminary purchase consideration is about $51.6 billion. It consists of roughly 256.5 million newly issued Capital One common shares (about $50.6 billion at $197.22 per share as of May 16, 2025) and about $1.1 billion of new Capital One preferred stock issued in exchange for Discover's Series C and D preferred shares.
What does the pro forma data show about the combined company's earnings?
For Q1 2025, pro forma net income was about $2.16 billion, with pro forma diluted EPS of $3.20. For FY2024, pro forma income from continuing operations available to common stockholders was only about $469 million (EPS $0.73), because it includes an $8.1 billion one-time allowance build for non-PCD loans and about $2.5 billion of annual intangible amortization. These pro forma figures are illustrative, not a forecast.
How strong was Discover's standalone performance?
Discover reported 2024 net income of $4.54 billion (up from $2.80 billion in 2023), diluted EPS of $17.72, and a return supported by $14.3 billion of net interest income. Its allowance for credit losses dropped to $8.3 billion, partly due to the private student loan sale, which produced a one-time $450 million gain. In Q1 2025, Discover earned $1.1 billion, up from $851 million a year earlier.
Are these pro forma numbers final?
No. Capital One states that the purchase price allocation is preliminary, that its valuation of Discover's assets and liabilities is not complete, and that the fair value marks, intangible lives, and deferred tax estimates are subject to change. The pro forma statements also exclude integration costs, synergies, and the effects of post-closing dispositions, so actual results may differ materially.
What is the impact on capital and goodwill?
Pro forma stockholders' equity at March 31, 2025 is about $109 billion, compared with Capital One's historical $63.5 billion, reflecting the share issuance. Pro forma goodwill rises to about $34.9 billion from $15.1 billion, and intangible assets are added. Investors should watch future goodwill impairment testing and the amortization schedule for purchased credit card relationships, which is about $1.6 billion for the rest of 2025 and about $1.8 billion in 2026.

04—Continue

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