Wells’ 1st-Quarter Profit Up 12%
Wells Fargo & Co., the fourth-largest U.S. bank, said Tuesday that first-quarter profit rose 12% as gains on the sale of investments and branches bolstered revenue.
Net income was $1.17 billion, or 67 cents a share, compared with $1.04 billion, or 61 cents, in the same period last year. The results matched analysts’ estimates.
Revenue rose 12% to $5.23 billion. Non-interest income rose 18% to $2.41 billion as the San Francisco-based bank profited from selling securities and shedding 39 branches after its $2.9-billion purchase of First Security Corp. last year.
Wells shares fell $1.45 to $45.70 on the New York Stock Exchange.
Net interest income, the difference between what Wells pays to depositors and what it earns from lending money, rose 7% to $2.82 billion.
Troubled loans rose to $1.36 billion during the quarter, up 14% from year’s end, as the slowing U.S. economy left some borrowers struggling to make payments. Wells set aside $361 million to cover possible bad loans, up from $276 million a year earlier.
Wells, created in 1998 when Norwest Corp. bought the old Wells Fargo and took its name, said bad loans are likely to increase further this year.
At a Glance
Other bank and financial services earnings, excluding one-time gains and charges unless noted:
* Chicago-based Bank One Corp., the fifth-largest U.S. bank, said first-quarter profit fell 1.5% on losses in commercial banking. Profit fell to $679 million, or 58 cents a share, from $689 million, or 60 cents, in the year-earlier quarter. Chief Executive Jamie Dimon said he expects earnings, which have declined for six straight quarters, to improve in the next two quarters. Net interest income rose 7% to $1.3 billion.
* Beverly Hills-based City National Corp. said first-quarter profit rose 8% as deposits and loans increased. Net income rose to $33.6 million, or 69 cents a share, from $31 million, or 66 cents, in the year-earlier quarter, matching estimates. Net interest income rose 13% to $108.1 million.
* Comerica Inc. said its first-quarter earnings dropped 52% to $94 million, or 50 cents a share, and warned that full-year profit will miss expectations as its asset management business, including Munder Capital Management, falters.
Comerica, which earlier this year acquired California’s Imperial Bancorp for $1.3 billion, said it expects 2001 profit of $4.75 to $4.95 a share. That would be up 11% from a year ago but well below the $5.05 consensus estimate of analysts.
* FleetBoston Financial Corp., the No. 7 U.S. bank, said first-quarter profit fell 6% as it made less money from capital markets. Profit from operations was $870 million, or 79 cents a share, compared with $927 million, or 84 cents, a year earlier. Net interest income fell 6.3% to $1.94 billion. Total revenue fell 18% to $3.73 billion.
* Golden State Bancorp Inc. of San Francisco, the publicly traded parent of California Federal Bank, reported first-quarter net income of $92.8 million, or 65 cents a share, compared with $83.8 million, or 63 cents, a year ago. Net interest income rose 8% to $310.4 million.
* U.S. Bancorp, based in Minneapolis, reported first-quarter earnings of $797.3 million, or 42 cents a share, compared with $729.8 million, or 38 cents, a year ago. The results matched estimates. Net interest income rose 4% to $1.6 billion.
* Washington Mutual Inc., the largest U.S. savings and loan, said first-quarter profit soared 40% to $641 million, or $1.15 a share, exceeding analysts’ expectations of $1.02, as the company expanded its mortgage services. Total loan volume was up 90% to $24.38 billion. The company also said it will split its stock 3 for 2 and raise its cash dividend payment 6%.
