Capital One 2011 Annual Report Download - page 38

• other risk factors listed from time to time in reports that we file with the SEC.
Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the
date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new
information, future events or otherwise. You should carefully consider the factors discussed above in evaluating
these forward-looking statements. For additional information on factors that could materially influence forward-
looking statements included in this Report, see the risk factors set forth under “Part I—Item 1A. Risk Factors” in
this Annual Report on Form 10-K.
Item 1A. Risk Factors
Business Risks
This section highlights specific risks that could affect our business. Although we have tried to discuss all material
risks of which we are aware at the time this Annual Report on Form 10-K has been filed, other risks may prove to
be important in the future, including those that are not currently ascertainable. In addition to the factors discussed
elsewhere in this Annual Report, other factors that could cause actual results to differ materially from our
forward looking statements include:
The Current Business Environment, Including A Slow or Delayed Economic Recovery, May Adversely Affect
Our Industry, Business, Results Of Operations And Capital Levels.
The recent global recession resulted in a general tightening in the credit markets, lower levels of liquidity,
reduced asset values (including commercial properties), sharp and prolonged declines in residential home values
and sales volumes, reduced business profits, increased rates of business and consumer repayment delinquency,
increased rates of business and consumer bankruptcy, and increased and prolonged unemployment, some of
which have had a negative impact on our results of operation. Although the overall economic recovery seems to
be underway, it has remained modest and fragile. A recovery that is only shallow and very gradual, marked by
continued elevated unemployment rates and reduced home prices, or another downturn, may have a material
adverse effect on our financial condition and results of operations as customers default on their loans or maintain
lower deposit levels or, in the case of credit card accounts, carry lower balances and reduce credit card purchase
activity.
In particular, we may face the following risks in connection with these events:
• Adverse macroeconomic conditions may affect consumer confidence levels and may cause adverse changes
in payment patterns, causing increases in delinquencies and default rates, which could have a negative
impact on our results of operations. In addition, changes in consumer behavior, including decreased
consumer spending and a shift in consumer payment behavior towards avoiding late fees, over-limit fees,
finance charges and other fees, could have an adverse impact on our results of operations.
• Increases in bankruptcies could cause increases in our charge-off rates, which could have a negative impact
on our results of operations.
• Our ability to recover debt that we have previously charged-off may be limited, which could have a negative
impact on our results of operations.
• The processes and models we use to estimate inherent losses may no longer be reliable because they rely on
complex judgments, including assumptions and forecasts of economic conditions which may no longer be
capable of accurate estimation in an unpredictable economic environment, which could have a negative
impact on our results of operations.
• Our ability to assess the creditworthiness of our customers may be impaired if the criteria or models we use
to underwrite and manage our customers become less predictive of future losses, which could cause our
losses to rise and have a negative impact on our results of operations.
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