Capital One 2014 Annual Report Download - page 49

existing operations or are not able to achieve the anticipated benefits of any merger, acquisition or strategic partnership,
including cost savings and other synergies, our business could be negatively affected. In addition, it is possible that the
ongoing integration processes could result in the loss of key employees, errors or delays in systems implementation, the
disruption of our ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely
affect our ability to maintain relationships with partners, clients, customers, depositors and employees or to achieve the
anticipated benefits of any merger, acquisition or strategic partnership. Integration efforts also may divert management
attention and resources. These integration matters may have an adverse effect on us during any transition period.
In addition, we may face the following risks in connection with any merger, acquisition or strategic partnership:
•New Businesses and Geographic or Other Markets: Our merger, acquisition or strategic partnership activity may
involve our entry into new businesses and new geographic areas or other markets which present risks resulting
from our relative inexperience in these new businesses or markets. These new businesses or markets may change
the overall character of our consolidated portfolio of businesses and could react differently to economic and other
external factors. We face the risk that we will not be successful in these new businesses or in these new markets.
•Identification and Assessment of Merger and Acquisition Targets and Deployment of Acquired Assets: We cannot
assure you that we will identify or acquire suitable financial assets or institutions to supplement our 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;
27 Capital One Financial Corporation (COF)