Wells Fargo 3rd-Quarter Profit Rises

A woman puts away her money after visiting a Wells Fargo automated teller machine in a San Francisco file photo from July 17, 2006. Wells Fargo & Co., the nation's fifth-largest bank, said third-quarter profit rose 11 percent, led by particular strength in regional banking and wholesale/commercial banking. (AP Photo/Eric Risberg, File) (Eric Risberg - AP)

SAN FRANCISCO -- Wells Fargo & Co., the nation's fifth-largest bank, said Tuesday that its third-quarter profit rose 11 percent, led by strong performance in its regional banking and wholesale/commercial banking divisions.

Net income rose to $2.19 billion, or 64 cents per share, from $1.98 billion, or 58 cents per share, a year earlier. The latest period includes $28 million of stock option expense.

Quarterly revenue climbed 5 percent to $8.93 billion in the July-September period from $8.50 billion a year earlier as combined sales of businesses other than home mortgage grew 13 percent. Sales at Wells Fargo Home Mortgage dropped to $923 million from $1.4 billion in the year-ago period, largely due to $356 million of mortgage servicing rights income recorded in last year's quarter.

Analysts polled by Thomson Financial were looking for third-quarter earnings of 63 cents per share revenue of $8.94 billion.

In morning trading, Wells Fargo shares fell 34 cents, or 1 percent, to $35.86 on the New York Stock Exchange.

"Despite the uncertain economic and interest rate environment, our diverse group of more than 80 businesses once again produced double-digit earnings growth, led by particular strength in regional banking and wholesale/commercial banking," said Chief Financial Officer Howard Atkins. "The company had continued strong performance on numerous financial measures, including a wider net interest margin, improved operating efficiency and, at 20 percent, the highest return on equity since first quarter 2004."

Net interest income rose 8 percent to $5.05 billion from $4.68 billion last year, and was up 5 percent sequentially.

Noninterest income climbed 2 percent to $3.89 billion from $3.83 billion, and rose 9 percent from the second quarter. Excluding mortgage banking, noninterest income increased 10 percent on strong year-over-year growth in deposit service charges, trust and investment fees, debit and credit card fees and insurance fees.

For the first nine months of the year, net income totaled $6.3 billion, or $1.85 a share, up from $5.74 billion, or $1.68 a share in 2005. Revenue was $26.28 billion, up from $24.46 billion in 2005.

___

On the Net:

http://www.wellsfargo.com