Wells Fargo Posts Profit Increase
Wells Fargo & Company reported record diluted earnings per common share of $1.08 for first quarter 2005, compared with $1.03 in first quarter 2004, up 5 percent.
Net income was a record $1.86 billion, up 5 percent from $1.77 billion in first quarter 2004.
“This was another outstanding, record-breaking quarter with double-digit growth in loans, double-digit growth in revenue, the single most important measure of Wells Fargo’s long-term success, continued strengthening of our already strong balance sheet and solid profit performance throughout all our major business groups,” said Chairman and CEO Dick Kovacevich.
“Our 153,000 talented team members continued to increase market share by satisfying the financial needs of our more than 23 million customers and earning more of their business. Our credit quality continued to be excellent and among the very best in our industry, and Wells Fargo Bank, N.A. remained the only U.S. bank with the highest possible credit rating, ‘Aaa.’ Continuing the pace of last year’s store expansion, we opened 15 new banking stores during the quarter. New government data shows we’ve widened our lead as the nation’s #1 lender to small-business owners, and we’re also #1 in lending to small businesses in low-to-moderate income neighborhoods for loans less than $1 million. Business Ethics magazine named Wells Fargo one of the nation’s top 10 corporate citizens among all industries, and we were only the second company, ever, to receive the United Way of America’s highest possible recognition — all four of its Summit awards for corporate community involvement.”
Diluted earnings per share were a record $1.08, up 5 percent from $1.03 in first quarter 2004 and up 15 percent (annualized) from $1.04 in fourth quarter 2004. “Profit growth continued to be broad based across our businesses, with particular strength in regional banking, mortgage, consumer finance, institutional investment management, and large corporate banking — all of which had either double-digit revenue growth, double-digit profit growth, or both,” said Chief Financial Officer Howard Atkins.
First quarter results included pre-tax charges or losses of $410 million for several actions designed to further strengthen the Company’s balance sheet. First, in a step toward bringing the Company’s mortgage, home equity and consumer finance businesses onto common systems and conforming credit charge-off practices with the more stringent standards of the Federal Financial Institutions Examination Council (FFIEC), Wells Fargo Financial recognized $163 million in credit losses in its portfolios. Second, the Company incurred $117 million in expenses upon shortening the estimated lives of certain depreciable assets. Finally, the Company realized $130 million of losses related to the sale of $18 billion of its lowest-yielding adjustable rate mortgages (ARMs) and auto loans.
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