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 20212022 Form 10-K.

Capital One Financial Corporation, a Delaware corporation established in 1994 and headquartered in McLean, Virginia, is a diversified financial services holding company with banking and non-banking subsidiaries. Capital One Financial Corporation and its subsidiaries (the “Company” or “Capital One”) offer a broad array of financial products and services to consumers, small businesses and commercial clients through digital channels, branch locations, Cafécafés and other distribution channels.

As of September 30, 2022, our principal subsidiaries included:

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 customercustomers 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, andare 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, are included in the Other category.

We regularly explore and evaluate opportunities to acquire financial servicesproducts and productsservices 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 of our assets, branches, partnership agreements or lines of business.

We reported net income of $1.8 billion ($4.45 per diluted common share) on total net revenue of $9.4 billion and net income of $4.2 billion ($10.28 per diluted common share) on total net revenue of $27.3 billion for the third quarter and first nine months of 2023, respectively. In comparison, we reported net income of $1.7 billion ($4.20 per diluted common share) on total net revenue of $8.8 billion and net income of $6.1 billion ($14.84 per diluted common share) on total net revenue of $25.2 billion for the third quarter and first nine months of 2022. In comparison, we reported net income of $3.1 billion ($6.78 per diluted common share) on total net revenue of $7.8 billion and net income of $10.0 billion ($21.44 per diluted common share) on total net revenue of $22.3 billion for the third quarter and first nine months of 2021.2022, respectively.

Below are additional highlights of our performance in the third quarter and first nine months of 2022.2023. These highlights are based on a comparison between the results of the third quarter and first nine months of 20222023 and 2021,2022, except as otherwise noted. The changes in our financial condition and credit performance are generally based on our financial condition and credit performance as of September 30, 20222023 compared to December 31, 2021.2022. We provide a more detailed discussion of our financial performance in the sections following this “Executive Summary.”

The section below provides a comparative discussion of our consolidated financial performance for the third quarter and first nine months of 20222023 and 2021.2022. We provide a discussion of our business segment results in the following section, “MD&A—Business“Business Segment Financial Performance.” This section should be read together with our “MD&A—Executive“Executive Summary,” where we discuss trends and other factors that we expect will affect our future results of operations.

Net interest income represents the difference between interest income, including certain fees, earned on our interest-earning assets and the interest expense incurred on our interest-bearing liabilities. Our interest-earning assets include loans, investment securities and other interest-earning assets, while our interest-bearing liabilities include interest-bearing deposits, securitized debt obligations, senior and subordinated notes, other borrowings and other interest-bearing liabilities. Generally, we include in interest income any past due fees, net of reversals, on loans that we deem collectible. Our net interest margin, based on our consolidated results, represents the difference between the yield on our interest-earning assets and the cost of our interest-bearing liabilities, including the notional impact of non-interest-bearing funding. We expect net interest income and our net interest margin to fluctuate based on changes in interest rates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities.