Capital One Financial reported flat third-quarter earnings Thursday as rising loss provisions offset modest loan growth.
The McLean, Va., company announced net income of $1.08 billion, which was slightly below the $1.11 billion it earned in the third quarter of 2013. The firm's net income per share was $1.86, which was up from $1.84 in the same period a year earlier.
Capital One, which is best known for its credit card business but also make auto, home and commercial loans, recorded a $993 million provision for credit losses. That was up 17% from the same period a year earlier.
The company bolstered its loss provisions despite the fact that chargeoff rates on its loans continued to fall. Its total net chargeoff rate was 1.52% in the third quarter, down from 1.92% in the third quarter of 2013.
Capital One's revenue was basically flat in the third quarter. The firm reported $5.64 billion in total net revenue, which compared with $5.65 billion in the three-month period in 2013.
The company's net interest margin fell slightly as the yield rate on its loans shrunk. Capital One's net interest margin was 6.69% in the third quarter, down from 6.89% one year earlier.
Loan growth was a bright spot for Capital One, except in mortgages.
Average home loans held for investment totaled $35.6 billion in the third quarter, down 16% from the same period a year earlier.
But in commercial banking, average loans held for investment totaled $49.8 billion during the third quarter, up 17% from the third quarter of last year.
And in Capital One's flagship credit card business, average loans held for investment totaled $79.4 billion during the third quarter, up 2% from a year earlier.
In a news release, Capital One Chief Executive Officer Richard Fairbank called the results "solid," adding that the company has "the financial strength to deliver very attractive risk-adjusted returns while we invest to drive future growth."