CAPITAL ONE FINANCIAL CORPORATION 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 the Cybersecurity Incident
described in "Note 13-Commitments, Contingencies, Guarantees and Others" as well
as the potential impacts of the Coronavirus Disease of 2019 ("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 2021 Annual Report on Form 10-K ("2021 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 2021 Form 10-K.
INTRODUCTION
As of
•Capital One Bank (
•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 Corporate Treasury 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 in the
4 Capital One Financial Corporation (COF)
--------------------------------------------------------------------------------
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
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 or exit 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 third quarter of 2022, we plan to move to 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 the extent to which the COVID-19 pandemic impacted our financial results, refer to "Part I-Item 2. MD&A." The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations, and financial condition will depend on future developments that are still uncertain and cannot be predicted, including the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities and other third parties in response to the COVID-19 pandemic. For more information see "Part I-Item 1A. Risk Factors" in our 2021 Form 10-K.
5 Capital One Financial Corporation (COF)
--------------------------------------------------------------------------------
Table of Contents SELECTED FINANCIAL DATA
The following table presents selected consolidated financial data and
performance from our results of operations for the second quarter and first six
months of 2022 and 2021 and selected comparative balance sheet data as of
Table 1: Consolidated Financial Highlights
© Edgar Online, source
