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 "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 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 2022 Annual Report on Form 10-K ("2022 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 2022 Form 10-K.
INTRODUCTION
As of
Our consolidated total net revenues are derived primarily from lending to consumer and commercial customers net of funding costs associated with 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 customers 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 and asset/liability management by our centralized Corporate Treasury group, are included in the Other category. The Other category also includes unallocated corporate expenses that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance, such as certain restructuring charges, as well as residual tax expense or benefit to arrive at the consolidated effective tax rate that is not assessed to our primary business segments.
•Credit Card: Consists of our domestic consumer and small business card lending,
and international card businesses in the
•Consumer Banking: Consists of our deposit gathering and lending activities for consumers and small businesses, and national auto lending.
4Capital One Financial Corporation (COF)
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Table of Contents
•Commercial Banking: Consists of our lending, deposit gathering, capital markets
and treasury management services to commercial real estate and commercial and
industrial customers. Our customers typically include companies with annual
revenues between
Business Developments
We regularly explore and evaluate opportunities to acquire financial products and services 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 of our assets, branches, partnership agreements or lines of business.
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 first quarters of 2023 and
2022 and selected comparative balance sheet data as of
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