Wells Fargo said Wednesday that it had net income of $3.8 billion, or $0.67 per share, in the first quarter, up 52% from $2.5 billion, or $0.45 per share, in the year-ago period, but $0.01 shy of analysts' estimates.
Revenue was $20.3 billion, down 5% from $21.4 billion in first quarter 2010 and missing analysts' estimates of $21.2 billion. In the most-recent period, Wells Fargo said it had lower mortgage banking revenue and lower net interest income.
"Our strong first-quarter results reflected positive trends in our business fundamentals as credit quality improved, capital ratios increased and cross-selling reached new highs," said Chairman and CEO John Stumpf in a press release. "Our Pennsylvania banking stores were converted successfully this past weekend and we expect to convert all remaining Wachovia stores by the end of this year."
"Our focus on expanding customer relationships was evident in this quarter's growth in core deposits, net checking accounts and many commercial loan portfolios," said CFO Tim Sloan in a statement. "While revenue declined from the prior quarter, our expense and risk management discipline helped produce record results … We believe our franchise has never been better positioned to capture future growth opportunities."
Wealth Management
Wells Fargo's wealth, brokerage and retirement unit said it had net income of $339 million, up $142 million – or 72% — from fourth quarter 2010 and up $57 million – or 20% — from first quarter 2010.
Revenue was roughly $3.2 billion, up 4% from fourth quarter, due to asset-based revenues and brokerage-securities gains, and up 8% from the year-ago quarter, driven by higher asset-based revenues and net interest income, according to the company.
The retail brokerage business saw client assets expand 6% year over year to $1.2 trillion. Managed account assets expanded 21% year over year, by about $45 billion, thanks to net flows and solid market gains.
Wells said it "successfully completed the brokerage conversion in January, converting legacy Wells Fargo brokerage customers to the Wells Fargo Advisors common platform [with Wachovia], providing greater access to more products and services."
