First Capital, Inc. Credit (COF.US) Q4 profit falls below expectations, invests $5.15 billion in the acquisition of financial technology company Brex.

First Capital, Inc. announced its fourth quarter performance for 2025 on Thursday, and also announced the acquisition of the financial technology company Brex, which focuses on corporate expense management and accounting businesses, for $5.15 billion. The financial report showed that First Capital, Inc.'s fourth quarter revenue was $15.583 billion, a 53% increase year-over-year. Net Interest Income (NII) was $12.466 billion, a 54% increase year-over-year. Net profit was $2.134 billion, a 95% increase year-over-year. Adjusted earnings per share were $3.86, lower than the analyst average expectation of $4.15. Credit loss provision increased significantly by 57% compared to the same period last year, reaching $4.142 billion. It is worth noting that the net interest income of the company's credit card business soared 64% to $9.48 billion in the fourth quarter. However, this profitable project is facing attacks from U.S. President Trump, who earlier this month requested to set a cap of 10% on credit card interest rates for a period of one year. This week in Davos, Switzerland, Trump reiterated his demand for Congress to set a cap on credit card interest rates at 10%. In response, Richard Fairbank, CEO of First Capital, Inc., stated that such an interest rate cap would reduce credit supply and could potentially lead the U.S. economy into a recession. He added, "Significant contraction in available credit could have multiple impacts on the entire economy." Meanwhile, First Capital, Inc. revealed its plan to acquire the privately held company Brex with approximately 50% cash and 50% stock. This deal will be the largest acquisition for First Capital, Inc. since acquiring Discover Financial Services for about $35 billion last year, creating the largest credit card loan institution in the U.S. Fairbank noted, "Since its establishment, we have been committed to building a payment company at the forefront of the technological revolution. Acquiring Brex will accelerate this process, especially in the enterprise payment market." The company expects to complete the acquisition of Brex by mid-year, and its CEO, Pedro Franceschi, will continue to lead the business. Brex was valued at $23 billion in January 2021 and had considered an initial public offering last year. Franceschi stated in an interview after the announcement of the transaction, "If you look at the valuation multiples of companies similar to Brex currently trading in the public market, the premium level of this transaction is very high."