Capital One 2013 Annual Report Download - page 50

organic growth through acquisitions or strategic partnerships. In addition, we may incorrectly assess the
asset quality and value of the particular assets or institutions we acquire. Further, our ability to achieve the
anticipated benefits of any merger, acquisition or strategic partnership will depend on our ability to assess
the asset quality and value of the particular assets or institutions we partner with, merge with or acquire. We
may be unable to profitably deploy any assets we acquire.
•Accuracy of Assumptions. In connection with any merger, acquisition or strategic partnership, we may make
certain assumptions relating to the proposed merger, acquisition or strategic partnership that may be, or may
prove to be, inaccurate, including as a result of the failure to realize the expected benefits of any merger,
acquisition or strategic partnership. The inaccuracy of any assumptions we may make could result in
unanticipated consequences that could have a material adverse effect on our results of operations or
financial condition. Assumptions we might make when considering a proposed merger, acquisition or
strategic partnership may relate to numerous matters, including:
• projections of a target or partner company’s future net income and our earnings per share;
• our ability to issue equity and debt to complete any merger or acquisition;
• our expected capital structure and capital ratios after any merger, acquisition or strategic partnership;
• projections as to the amount of future loan losses in any target or partner company’s portfolio;
• 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, or companies that we enter into strategic
partnerships with, 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
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