[click image]Wells Fargo projects record $3 billion 1Q profit
By STEPHEN BERNARD – 5 hours ago
NEW YORK (AP) — Wells Fargo & Co. said Thursday it expects record first-quarter earnings of $3 billion, easily surpassing analysts' estimates and providing an encouraging sign for the banking industry.
Wells Fargo is the first major bank to give an indication of how the first-quarter looked. Several pessimistic forecasts about potential loan losses have jolted the market in recent days, and investors have been anxious as Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. all report next week.
Wells Fargo's stock surged $3.31, or 22.2 percent, to $18.20 in late morning trading. Broader markets also surged on the Wells Fargo report, with the Dow Jones industrial average gaining more than 175 points to 8,012.
San Francisco-based Wells Fargo, which has received $25 billion in funds as part of the government's bank bailout plan, anticipates earnings after preferred dividends of about 55 cents per share. Revenue for the period ended March 31 is expected to climb 16 percent to $20 billion.
Analysts polled by Thomson Reuters forecast profit of 23 cents per share on revenue of $19 billion. Analysts' estimates typically exclude one-time items.
Wells Fargo earned $2 billion during the first quarter last year.
The bank's chief financial officer, however, did caution that the economy hasn't necessarily recovered yet.
"It's premature to conclude the economy has turned," said Howard Atkins, Wells Fargo's CFO. "All I can tell you is we're seeing a lot of business."
Revenue at Wells Fargo, which has been one of the strongest banks during the ongoing credit crisis and recession, was bolstered by strong mortgage banking and capital markets business, Atkins told The Associated Press. During the first quarter, Wells Fargo received about $190 billion in mortgage applications, a 64 percent jump from the previous quarter. More than 40 percent of that volume came in March.
Most of that business was refinance applications, but about 25 percent came from customers looking to purchase homes, Atkins said, noting the recent quarter's mortgage activity has been among the strongest quarters since the housing market began to collapse in 2007.
The government has been implementing many new programs in an effort to cut interest rates, hoping to bolster the beleaguered housing market, and those programs have definitely helped, Atkins said.
"For sure the reduction in interest rates is having an impact on the wave of activity in the mortgage market," Atkins said.
The company also credited its Wachovia acquisition, which was completed Jan. 1, for helping boost revenue. Atkins said Wachovia accounted for about 40 percent of revenue during the first quarter, and that business at Wachovia has steadily improved since Wells Fargo announced it would acquire the Charlotte, N.C.-based bank last fall.
Wells Fargo said charge-offs are expected to total $3.3 billion for the first quarter, compared with a combined $6.1 billion between Wells Fargo and Wachovia during the fourth quarter. Charge-offs are loans written off as not being repaid.
The bank is still facing loan losses as customers fall behind on repaying loans during the recession. It said its loan-loss provision will total about $4.6 billion for the first quarter, including adding $1.3 billion to its credit reserves. Wells Fargo now has $23 billion in reserves to cover future loan losses.
Wells Fargo is scheduled to report full quarterly results on April 22.
AP Business Writer Michelle Chapman in New York contributed to this report.
And I wonder if we'll be getting repaid any of that $25 billion....
Ya, from allowing you to use your ATM card for purchases even if you don't have the balance to cover it, then charge you $33 even if the purchase was for only $1. They give no warning to give you the choice to proceed with the purchase, then tell you it is for your convenience. Then they wait to charge the $33 so when you make a deposit the next morning to cover a purchase you are about to make you again overdraft when they apply the $33 penalty, hence another $33 charge.
ReplyDeleteSince my wife and I both use the cards there are times when both of us make purchases and inadvertently overdraft.
Also, since I started banking with Crocker - later bought by Wells Fargo - in 1977 they have always posted deposits first and then withdrawals when they do their nightly accounting. Recently this has changed and they do the opposite - again racking up the $33 fees.
Also, I swear they take the largest check or withdrawal first then bounce all of the small stuff to rack up multiple $33 charges.
I've complained about it but they say there is nothing they can do about it.
They royally suck!
But I can't find anything better - they all suck!
My wife also has an account at Schools Credit Union and they treat her well, but there are like 2 branches in Sacramento and try and find one of their ATMs so you don't have to pay a use fee!
Sure, if I was rich, I could carry a balance and not worry about bouncing things, but when on Monday you are trying to figure out how to buy gas and food until the next check comes in on Friday that just ain't gonna happen!
I pay all my bills and then take the rest out in cash. If I don't have the cash for it, it doesn't get bought. You should definitely move your money to the credit union, and don't buy stuff with the card. Pay cash. When you are out of it, nobody can charge you $33 for being out of it. This method taught me in a hurry which splurges I could splurge on and which were going to leave me hungry for X number of days.
ReplyDeleteDon't let the fuckers eat you alive. Do without their enticements... like handy ATMs. Reward good guys, punish fucksters.
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ReplyDeleteNOTICE TO SPAMMERS
IT DOESN'T MATTER HOW INGRATIATING YOUR COMMENTS ARE, NO ONE WANTS YOUR MERETRICIOUS CRAP ON THEIR BLOG.
WHAT AN ABUSE OF HUMAN FEELINGS.
GO AWAY.
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