Wells Fargo & Co.'s profits topped $1 billion in the first quarter, the bank said Tuesday, as its 1998
merger with Norwest continued to progress smoothly.
The bank first-quarter net income totaled $1.01 billion, or 61
cents per share, beating analysts' average estimate by a penny,
according to a survey by First Call/Thomson Financial. The profit
represented a 14 percent increase from the first quarter last year
when Wells Fargo earned $884 million, or 53 cents a share.
Most key measures of the bank's financial performance rose in
the quarter, indicating that the November 1998 marriage between San
Francisco-based Wells and Minneapolis-based Norwest is functioning
better than many recent big bank mergers.
The company's stock was up 62 cents at $40 a share in morning
trading on the New York Stock Exchange.
While Wells has completed the mergers in several small Western
states, the bank still hasn't converted the customers in
California, the company's stronghold, to the new system being used
by the merged bank.
Wells executives said the bank attracted more customers in most
lines of business. Loans climbed by 15 percent from the first
quarter of 1999 and more than 100,000 new customers signed up for
the Wells' Internet banking service, a trend that could help lower
costs over the long haul. The bank said it now has 1.7 million
Internet banking customers and roughly one in every four of those
use the service to pay their bills online.
Home mortgages, a major part of the bank's business, showed some
sluggishness in the first quarter as rising interest rates
discouraged refinancing activity. The bank's mortgage division
earned $67 million in the quarter, up just 2 percent from the
Later this year, Wells expects to add about 1 million new
customers through the recently announced acquisitions of Michigan
Financial Corp., First Commerce Bancshares of Nebraska, National
Bancorp of Alaska and Salt Lake City-based First Security Corp.
Net-interest income in the first quarter was $2.46 billion, up
almost 7 percent from $2.28 billion in the year-ago period.
Noninterest income totaled $1.91 billion, a jump of almost 11
percent from the year-ago results of $1.73 billion.
Those results included $885 million in one-time gains realized
from venture capital investments that Wells has made in other
businesses, primarily near its San Francisco headquarters. Those
gains were largely offset by $602 million in losses on the sales of
securities in the bank's investment portfolio and a $160 million
writedown in its auto leases to reflecting declining used car