Wells Fargo projects record first-quarter earnings

Wells Fargo & Co. (WFC) today said it expects first-quarter earnings of $3 billion, easily exceeding Wall Street projections as the bank fights its way through the mortgage meltdown.

The bank, the nation's second-largest home lender, joins several rivals in saying results improved early this year. "Business momentum in the quarter reflected strength in our traditional banking businesses, strong capital markets activities, and exceptionally strong mortgage banking results," Chief Financial Officer Howard Atkins said in a statement issued two weeks before earnings will officially be released.

Wells Fargo, which acquired Wachovia Corp. in December, said its larger market share punched up the company's mortgage business during the quarter. The strong performance comes as the housing market showed signs of thawing and home owners rushed to refinance existing loans.

It expects to report earnings of $3 billion, or 55 cents a share, on revenue of about $20 billion. Analysts surveyed by Thomson Reuters were looking for earnings of 23 cents a share on revenue of $18.98 billion.

At just Wells Fargo, revenue is seen rising some 16 percent. Wachovia was expected to contribute about 40 percent of the combined company's revenue. Meanwhile, the expected quarterly profit would be a record for Wells Fargo.

The bank reported $100 billion in mortgage originations during the quarter, providing loans to more than 450,000 people either purchasing or refinancing a home. Wells Fargo mortgage applications rose 41 percent to $190 billion, with $100 billion yet to close at the end of the quarter.

Mr. Atkins said he sees this as a sign of strong second-quarter originations. The dollar value of applications was up 64 percent from the prior quarter, with a record number submitted in March.