Capital One 2011 Annual Report Download - page 48

— the amount of goodwill and intangibles that will result from any merger, acquisition or strategic
partnership;
— certain purchase accounting adjustments that we expect will be recorded in our financial statements in
connection with any merger, acquisition or strategic partnership;
— cost, deposit, cross-selling and balance sheet synergies in connection with any merger, acquisition or
strategic partnership;
— merger, acquisition or strategic partnership costs, including restructuring charges and transaction costs;
— our ability to maintain, develop and deepen relationships with customers of a target or partner
company;
— our ability to grow a target or partner company’s customer deposits and manage a target or partner
company’s assets and liabilities;
— higher than expected transaction and integration costs and unknown liabilities as well as general
economic and business conditions that adversely affect the combined company following any merger
or acquisition transaction;
— the extent and nature of regulatory oversight over a target or partner company;
— projected or expected tax benefits or assets;
— accounting matters related to the target or partner company, including accuracy of assumptions and
estimates used in preparation of financial statements such as those used to determine allowance for
loan losses, fair value of certain assets and liabilities, securities impairment and realization of deferred
tax assets;
— our expectations regarding macroeconomic conditions, including the unemployment rate, housing
prices, the interest rate environment, the shape of the yield curve, inflation and other economic
indicators; and other financial and strategic risks associated with any merger or acquisition.
•Target Specific Risk. Assets and companies that we acquire will have their own risks that are specific to a
particular asset or company. These risks include, but are not limited to, particular or specific regulatory,
accounting, operational, reputational and industry risks, any of which could have a material adverse effect
on our results of operations or financial condition. Indemnification rights, if any, may be insufficient to
compensate us for any losses or damages resulting from such risks. In addition to regulatory approvals
discussed above, certain of our merger, acquisitions or partnership activity may require third-party consents
in order for us to fully realize the anticipated benefits of any such transaction.
•Termination Fees. Termination of agreements relating to the acquisition of an entity or assets, or merger
with another entity, may, under certain circumstances, result in termination fees that could have a material
adverse effect on our results of operations or financial condition.
Reputational Risk and Social Factors May Impact Our Results.
Our ability to originate and maintain accounts is highly dependent upon the perceptions of consumer and
commercial borrowers and deposit holders and other external perceptions of our business practices or our
financial health. Adverse perceptions regarding our reputation in the consumer, commercial and funding markets
could lead to difficulties in generating and maintaining accounts as well as in financing them. In particular,
negative perceptions regarding our reputation could lead to decreases in the levels of deposits that consumer and
commercial customers and potential customers choose to maintain with us. Negative public opinion could also
result from actual or alleged conduct in any number of activities or circumstances, including lending practices,
regulatory compliance, inadequate protection of customer information, or sales and marketing, and from actions
taken by regulators or other persons in response to such conduct.
28