Capital One Financial's earnings fell slightly in the first quarter when compared to a year earlier, as rising expenses outpaced revenue gains.
The McLean, Va., company reported net income of $1.12 billion, which was down 2% from the same period in 2014. Still, Capital One's earnings per share of $2.00 beat the $1.87 consensus expectation of analysts surveyed by Bloomberg.
"In the first quarter, we continued to post strong results across our businesses," Chief Executive Officer Richard Fairbank said Thursday in a news release. "We are pursuing growth and resilience, managing costs tightly while we invest to grow, and actively working to return capital to shareholders."
Capital One, the eleventh-largest U.S. banking company with $309 billion in assets, achieved loan growth in the first quarter across its biggest business lines.
In the company's flagship U.S. credit card business, period-end loans held for investment totaled $74.1 billion, up 9% from a year earlier. That marked the fourth consecutive quarter of growth in a portfolio that had contracted following the recession, along with much of the rest of the credit-card industry.
In its consumer banking business, which includes home and auto loans, period-end loans held for investment were $71.4 billion, a 1% increase from the first quarter of 2014.
And in commercial banking, period-end loans held for investment rose by 10% to $50.7 billion.
Capital One's performance was hurt by a net interest margin that shrunk by five basis points to 6.57%. Still, total net revenue increased by 5% to $5.65 billion.
The drag on earnings came from the expense side of the company's income statement.
Noninterest expenses rose by 4% to $3.05 billion, driven by a 15% boost in marketing costs and a 5% increase in operating expenses.
And Capital One's $935 million provision for credit losses was 27% higher than it was a year ago.
The larger provision appeared largely to be a reflection of loan growth, as certain indicators of credit quality showed improvement.
In Capital One's domestic credit card business, the rate of loans that were 30 days or more delinquent fell by 10 basis points to 2.92%, and the net charge-off rate fell by 46 basis points to 3.55%.