This discussion contains forward-looking statements that are based upon
management's current expectations and are subject to significant uncertainties
and changes in circumstances. Please review "MD&A-Forward-Looking Statements"
for more information on the forward-looking statements in this Quarterly Report
on Form 10-Q ("this Report"). All statements that address operating performance,
events or developments that we expect or anticipate will occur in the future,
including those relating to operating results and "Note 13-Commitments,
Contingencies, Guarantees and Others" as well as the potential impacts of the
COVID-19 pandemic described in "MD&A-Introduction-Coronavirus Disease 2019
(COVID-19) Pandemic" are forward-looking statements. Our actual results may
differ materially from those included in these forward-looking statements due to
a variety of factors including, but not limited to, those described in "Part
I-Item 1A. Risk Factors" in our 2020 Annual Report on Form 10-K ("2020 Form
10-K") and "Part II-Item 1A. Risk Factors" in this Report. Unless otherwise
specified, references to notes to our consolidated financial statements refer to
the notes to our consolidated financial statements as of
Management monitors a variety of key indicators to evaluate our business results and financial condition. The following MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and related notes in this Report and the more detailed information contained in our 2020 Form 10-K. INTRODUCTION
Capital One Financial Corporation , aDelaware corporation established in 1994 and headquartered inMcLean, Virginia , is a diversified financial services holding company with banking and non-banking subsidiaries.Capital One Financial Corporation and its subsidiaries (the "Company") offer a broad array of financial products and services to consumers, small businesses and commercial clients through digital channels, branches, Cafés and other distribution channels. As ofSeptember 30, 2021 , our principal subsidiaries included: •Capital One Bank (USA ), National Association ("COBNA"), which offers credit card products along with other lending products and consumer services; and •Capital One, National Association ("CONA"), which offers a broad spectrum of banking products and financial services to consumers, small businesses and commercial clients. The Company is hereafter collectively referred to as "we," "us" or "our." COBNA and CONA are collectively referred to as the "Banks." Certain business terms used in this document are defined in the "MD&A-Glossary and Acronyms" and should be read in conjunction with the consolidated financial statements included in this Report. Our consolidated total net revenues are derived primarily from lending to consumer, small business and commercial customers net of funding costs associated with interest on deposits, long-term debt and other borrowings. We also earn non-interest income which primarily consists of interchange income, net of reward expenses, service charges and other customer-related fees. Our expenses primarily consist of the provision for credit losses, operating expenses, marketing expenses and income taxes. Our principal operations are organized for management reporting purposes into three major business segments, which are defined primarily based on the products and services provided or the types of customer served: Credit Card, Consumer Banking and Commercial Banking. The operations of acquired businesses have been integrated into or managed as a part of our existing business segments. Certain activities that are not part of a segment, such as management of our corporate investment portfolio, asset/liability management by our centralized CorporateTreasury group and residual tax expense or benefit to arrive at the consolidated effective tax rate that is not assessed to our primary business segments, are included in the Other category. •Credit Card: Consists of our domestic consumer and small business card lending, and international card businesses inCanada and theUnited Kingdom ("U.K."). 4Capital One Financial Corporation (COF)
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Table of Contents •Consumer Banking: Consists of our deposit gathering and lending activities for consumers and small businesses, and national auto lending. •Commercial Banking: Consists of our lending, deposit gathering, capital markets and treasury management services to commercial real estate and commercial and industrial customers. Our commercial and industrial customers typically include companies with annual revenues between$20 million and$2 billion . Business Developments We regularly explore and evaluate opportunities to acquire financial services and products as well as financial assets, including credit card and other loan portfolios, and enter into strategic partnerships as part of our growth strategy. We also explore opportunities to acquire technology companies and related assets to improve our information technology infrastructure and to deliver on our digital strategy. We may issue equity or debt to fund our acquisitions. In addition, we regularly consider the potential disposition of certain assets, branches, partnership agreements or lines of business. Coronavirus Disease 2019 (COVID-19) Pandemic The COVID-19 pandemic resulted in a global public-health crisis, disrupting economies and introducing significant volatility into financial markets. We transformed how we work in order to protect the well-being of our associates and our customers, and were able to continue to serve our customers, successfully manage critical functions, and keep our lines of business operating. Since the start of the COVID-19 pandemic, a significant majority of our associates across our workforce have transitioned to working remotely, relying on our technology infrastructure and systems that have been designed for resilience and security. The majority of our associates continue to work remotely. In the future, we plan to adopt a hybrid work methodology that allows for in-office collaboration while still enabling associates to work remotely. We continue to monitor local conditions to ensure the safety of our associates. For more information see "Part I-Item 1. Business-Overview-Coronavirus Disease 2019 (COVID-19) Pandemic" and "Part I-Item 1A. Risk Factors" in our 2020 Form 10-K along with "Part I-Item 2. MD&A-Introduction-Coronavirus Disease 2019 (COVID-19) Pandemic" and "Part I-Item 2. MD&A-Credit Risk Profile-COVID-19 Customer Assistance Programs and Loan Modifications" in our Quarterly Report on Form 10-Q for the period endedMarch 31, 2021 . 5Capital One Financial Corporation (COF)
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Table of Contents SELECTED FINANCIAL DATA
The following table presents selected consolidated financial data and
performance from our results of operations for the third quarter and first nine
months of 2021 and 2020 and selected comparative balance sheet data as of
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