(Bloomberg) – Capital One Financial Corp. (COF), the bank looking to take over rival Discover Financial Services (DFS), posted a profit that beat Wall Street estimates on the strength of its credit card and auto loan businesses.

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Net income of $1.78 billion was little changed from a year ago, McLean, Virginia-based Capital One said in a statement Thursday. The lender posted adjusted earnings per share of $4.51, beating analysts' average estimate in a Bloomberg survey of $3.77.

Shares of Capital One rose 3.7% to $159 in extended trading at 6:27 p.m. in New York. The stock was up 17% this year through the end of regular trading.

Earlier this year, Capital One agreed to acquire Discover in a $35 billion deal that is now subject to regulatory review. On Wednesday, New York Attorney General Letitia James asked a court for permission to subpoena the lender as part of an ongoing antitrust investigation, saying the deal would have a “significant impact” on consumers in the state. The US banking regulator and the Justice Department are also examining the planned transaction.

“We continue to work through the regulatory approval process and are fully mobilized to plan and execute a successful integration,” Capital One Chief Executive Officer Richard Fairbank said in the statement.

In a conference call with analysts Thursday, Fairbank said the company expects to complete its acquisition of Riverwoods, Illinois-based Discover early next year, subject to regulatory approval.

Last week, consumer lender Ally Financial Inc. (ALLY) released results that showed borrowers buckled under pressure from expensive debt reflected in the company's auto loan portfolio. Fairbank said Capital One has largely managed to prevent such consumer weakness from impacting profits.

“What we are seeing in the industry data is that post-pandemic credit years are at higher risk than pre-pandemic vintages, likely due to increased credit during the pandemic,” he said on the call. “There is some underlying deterioration in the market that may be evident elsewhere and that we have been able to offset through some of our decisions.”

Other highlights of the third quarter:

• Credit card loans rose $2.8 billion, or 2%, to $156.7 billion

• Auto loans rose $1.1 billion, or 2%, to $75.5 billion

• Net sales rose 5% to $10 billion

• Loan loss provisions fell $1.4 billion to $2.5 billion

• Net charge-offs totaled $2.6 billion

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