Forward-looking statements and additional information
In accordance with the Private Securities Litigation Reform Act of 1995, we caution you that each of the presentations relating to Wells Fargo’s 2012 Investor Conference may contain forward-looking statements about our future financial performance and business. We make forward-looking statements when we use words such as "believe," "expect," "anticipate," "estimate," "target," "project," "plan," "forecast," "should," "may," "could," "can," "will," "outlook," "appears" or similar expressions. Forward-looking statements in these presentations may include, among others, statements about future financial results of Wells Fargo and Wells Fargo’s plans, objectives and strategies, including our belief that we have more opportunity to increase cross-sell of our products and services; future credit quality and expectations regarding future loan losses in our loan portfolios and the adequacy of our allowance for credit losses, including our current expectation of future allowance releases in 2012; mortgage repurchase exposure and exposure related to mortgage servicing and foreclosure practices; our expectations regarding declines in noninterest expense, including expected noninterest expense declines in second quarter 2012 and our targeted noninterest expense for fourth quarter 2012 as part of our expense management initiatives; the future economic environment; loan growth; net interest margin; potential future revenue and/or earnings opportunities in our businesses; the estimated impact of regulatory reform on our financial results and business and expectations regarding our efforts to mitigate such impact; our targets for various financial measures, including return on equity, return on assets, and our efficiency ratio; our estimated Tier 1 common equity ratio as of March 31, 2012, under proposed Basel capital rules; and our target capital structure and potential capital payout ratios.
Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. Several factors could cause actual results to differ materially from expectations including: current and future economic and market conditions, including the effects of further declines in housing prices and high unemployment rates, U.S. fiscal debt and budget matters, and the sovereign debt crisis and economic difficulties in Europe; our capital and liquidity requirements (including under regulatory capital and liquidity standards, such as the proposed Basel III standards, as determined and interpreted by applicable regulatory authorities); financial services reform and other current, pending or future legislation and regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and regulation and legislation relating to overdraft fees, debit card interchange fees, credit cards, and other bank services, as well as the extent of our ability to offset the loss of revenue and income from financial services reform and other regulation and legislation; our ability to realize our noninterest expense target as part of our expense management initiatives when and in the amount targeted, including as a result of business and economic cyclicality, seasonality, changes in our business composition and operating environment, growth in our businesses and/or acquisitions, and unexpected expenses relating to, among other things, litigation and regulatory matters; the amount of mortgage loan repurchase demands that we receive and our ability to satisfy any such demands without having to repurchase loans related thereto or otherwise indemnify or reimburse third parties, and the credit quality of or losses on such repurchased mortgage loans; negative effects relating to our mortgage servicing and foreclosure practices, including our ability to meet our obligations under our recent settlement with state and federal government entities related to our mortgage servicing and foreclosure practices, as well as changes in our procedures or practices, and/or industry standards or practices, regulatory or judicial requirements, penalties or fines, and increased servicing and other costs or obligations; the extent of success in our loan modification efforts, as well as the effects of regulatory requirements or guidance regarding loan modifications or changes in such requirements or guidance; the adequacy of our allowance for credit losses; recognition of other-than-temporary impairment on securities held in our available-for-sale portfolio; the effect of the current low interest rate environment or changes in interest rates on our net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale; hedging gains or losses; disruptions in the capital markets and the effect of market volatility or a fall in stock market prices on fee income from our brokerage, asset management, wealth management, and capital markets businesses; changes in our accounting policies or in accounting standards or in how accounting standards are to be applied; mergers, acquisitions and divestitures; changes in our credit ratings and changes in the credit quality of our customers or counterparties; reputational damage from negative publicity, fines, penalties and other negative consequences from regulatory violations and legal actions; a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors and other service providers; and fiscal and monetary policies of the Federal Reserve Board. For more information about factors that could cause actual results to differ materially from expectations, refer to our annual, quarterly and current reports filed with the Securities and Exchange Commission and available on the SEC’s website at www.sec.gov, including the discussion under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2011 and in our 2012 quarterly reports. Any factor described above or in our SEC reports could, by itself or together with one or more other factors, adversely affect our financial results and condition.
Purchased credit-impaired loan portfolio
Loans that were acquired from Wachovia that were considered credit impaired were written down at acquisition date in purchase accounting to an amount estimated to be collectible and the related allowance for loan losses was not carried over to Wells Fargo’s allowance. In addition, such purchased credit-impaired loans are not classified as nonaccrual or nonperforming, and are not included in loans that were contractually 90+ days past due and still accruing. Any losses on such loans are charged against the nonaccretable difference established in purchase accounting and are not reported as charge-offs (until such difference is fully utilized). As a result of accounting for purchased loans with evidence of credit deterioration, certain ratios of Wells Fargo are not comparable to a portfolio that does not include purchased credit-impaired loans.
In certain cases, the purchased credit-impaired loans may affect portfolio credit ratios and trends. Management believes that the presentation of information adjusted to exclude the purchased credit-impaired loans provides useful disclosure regarding the credit quality of the non-impaired loan portfolio. Accordingly, certain of the loan balances and credit ratios in our presentations have been adjusted to exclude the purchased credit-impaired loans.
Non-GAAP Financial Measures
Certain of the presentations include non-GAAP financial measures. Information about any such non-GAAP financial measures, including a reconciliation of those measures to GAAP, can be found in the presentations and/or in our SEC reports available on our website at wellsfargo.com.