|To: Adam Nash who wrote (1254)||4/10/2000 5:26:00 PM|
|From: David C. Burns|
Wells Fargo & Company and First Security Corporation Agree to Merge|
SAN FRANCISCO and SALT LAKE CITY, April 10 /PRNewswire/ -- Wells Fargo & Company (NYSE: WFC) and First Security Corporation (Nasdaq: FSCO) said today they have signed a definitive agreement for the merger of Wells Fargo and First Security. The combined company will be the largest banking franchise in deposits in Utah, Nevada, New Mexico, and Idaho, which comprise the nation's fastest growing regional economy.
First Security, based in Salt Lake City, at year-end 1999 had $23 billion in assets, 333 banking locations (including 45 in-store locations), 535 ATMs, and 9,600 employees. The company owns Utah's largest bank, is the second largest independent bank holding company in the western United States and the nation's oldest multi-state bank holding company, founded in June 1928. Among its subsidiaries are CrossLand Mortgage, which has 135 offices in 28 states and originated $14.5 billion in mortgages last year, and FS Van Kasper, a full service investment banking and brokerage business with 12 regional offices.
Under terms of the agreement, approved by the boards of both companies, First Security stockholders will receive 0.355 of a share of Wells Fargo common stock in exchange for each share of First Security common stock.
The transaction is expected to be completed in the second half of this year. It is expected to be accounted for as a pooling of interests and requires approval from banking regulators and First Security shareholders. The transaction is expected to be tax-free for First Security stockholders.
In addition, First Security has granted to Wells Fargo an option exercisable, in whole or in part, under certain circumstances to purchase authorized but unissued shares of First Security common stock equal to 19.9 percent of First Security's shares currently outstanding.
The transaction, based on Wells Fargo's closing stock price of $43.6875 on April 3, 2000, values each First Security share at $15.50 for a total transaction value of approximately $3.2 billion. First Security has approximately 206 million diluted shares. The transaction exceeds Wells Fargo's internal rate of return goals and is expected to add to Wells Fargo's earnings per share in the second year of operations. For the integration of the two companies, Wells Fargo expects to incur merger and integration charges of approximately $375 million.
"After careful consideration of our alternatives, we believe it's in the long-term best interests of our employees, customers, communities and stockholders that First Security partner with an outstanding organization whose vision, values and history are very similar to ours," said Spencer F. Eccles, First Security's chairman and CEO. "Like First Security, Wells Fargo is committed to its employees, has a reputation for outstanding customer service and local decision-making, and is committed to being an outstanding corporate citizen.
"This combination will provide our customers with more convenience than ever before across virtually all of the midwestern and western United States. It also will provide our stockholders with an investment in a highly-regarded company with significant growth potential." Eccles is expected to be elected to the Wells Fargo board of directors.
"First Security and its outstanding team of people have earned a reputation as one of the best banking franchises in the western United States because they put customers and communities first," said Dick Kovacevich, Wells Fargo's president and CEO. "The customers and cultures of our two companies are remarkably similar. Both companies compete not just in banking but in the far larger, faster growing industry called financial services. First Security and Wells Fargo also share a commitment to people as a competitive advantage, outstanding customer service, local decision-making and community involvement. We look forward to combining our resources so we can satisfy all the financial needs of First Security's customers -- individuals, small businesses, middle market businesses, farmers and ranchers, and large corporate customers -- and help them succeed financially. Together, we want to be known as the premier provider of financial services in every single one of our communities across our combined banking franchise, soon to be 23 states."
To receive federal regulatory approval and comply with government anti-trust guidelines, Wells Fargo and First Security expect to sell about $1.2 billion of deposits and associated loans. First Security expects to release its first quarter 2000 earnings on April 19, 2000. First Security's earnings will reflect special charges incurred for its termination of the merger agreement with Zions Bancorporation.
First Security has banking operations in seven states: Utah (138 locations), Idaho (87), New Mexico (45), Nevada (23), California (15), Oregon (14), and Wyoming (8).
Wells Fargo has banking operations in 22 states: Arizona (312 banking stores), California (1,006), Colorado (116), Idaho (17), Illinois (8), Indiana (43), Iowa (43), Michigan (34), Minnesota (163), Montana (41), Nebraska (30), Nevada (116), New Mexico (93), North Dakota (26), Ohio (1), Oregon (126), South Dakota (51), Texas (430), Utah (24), Washington (136), Wisconsin (60), and Wyoming (9). By the end of this quarter, Wells Fargo is scheduled to enter its 23rd banking state with the acquisition of National Bancorp of Alaska which has $3 billion in assets and 54 banking locations.
Wells Fargo is a $218 billion diversified financial services company providing banking, insurance, investments, mortgage and consumer finance from more than 5,300 financial services stores and the Internet (wellsfargo.com) across North America and elsewhere internationally.
This news release has forward-looking statements about the financial condition, results of operations and business of Wells Fargo on a pro forma basis assuming completion of the proposed merger transaction with First Security. These include statements about: (a) the anticipated closing date of the merger; (b) the expected effect of the merger on Wells Fargo's future earnings per share; (c) the expenses expected to be incurred by Wells Fargo to integrate the two companies; (d) the accounting method Wells Fargo is expected to use to account for the merger; (e) the business opportunities and strategies expected for Wells Fargo and First Security after the merger; and (f) other statements that include the words "believes," "expects," "anticipates," "intends," "estimates," "should" or similar expressions.
These forward-looking statements involve risks and uncertainties. Factors that could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements include, among other things: (a) expected cost savings from the merger cannot be fully realized or realized within the expected time; (b) revenues following the merger are lower than expected; (c) costs or difficulties related to the integration of the businesses of Wells Fargo and First Security are greater than expected; and (d) the merger is accounted for as a purchase instead of a pooling of interests.
Wells Fargo's reports filed with the SEC, including Wells Fargo's Form 10-K for the year ended December 31, 1999, describe more factors that could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements, including certain credit, market, operational, liquidity and interest rate risks associated with Wells Fargo's business and operations. Other factors described in Wells Fargo's December 31, 1999 Form 10-K include changes in business and economic conditions, competition, fiscal and monetary policies, customers choosing not to use banks for transactions, legislation, the combination of the former Norwest Corporation and the former Wells Fargo & Company, and other acquisitions by Wells Fargo.
This news release may be deemed to be solicitation material in respect of the proposed acquisition of First Security by Wells Fargo through the merger of a wholly-owned subsidiary of Wells Fargo with and into First Security, pursuant to an Agreement and Plan of Reorganization, dated as of April 9, 2000, by and between First Security and Wells Fargo (including all exhibits attached thereto, the "Agreement"). This filing is being made in connection with Regulation of Takeovers and Security Holder Communications (Release No. 33-7760, 34-42055) promulgated by the Securities and Exchange Commission (SEC). First Security and its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the Agreement. These directors and executive officers include the following: Spencer F. Eccles, Morgan J. Evans, L. Scott Nelson, J. Pat McMurray, Brad D. Hardy, Scott C. Ulbrich, Michael P. Caughlin, Mark D. Howell and David R. Golden
Of these directors and executive officers, Spencer F. Eccles may be deemed a beneficial owner of approximately 6,999,381 million shares of First Security's common stock (constituting approximately 3.3% of the outstanding common stock). None of the other persons listed above owns more than 1% of the outstanding shares of First Security's common stock. The ownership information is as of December 31, 1999. In addition, in connection with the merger, each of Spencer F. Eccles, Morgan J. Evans, L. Scott Nelson, J. Pat McMurray, Brad D. Hardy, Scott C. Ulbrich, Michael P. Caughlin, Mark D. Howell and David R. Golden has entered into an employment agreement that provides for payments in connection with continued employment after certain business combinations, including the merger.
In connection with the proposed merger, Wells Fargo will file a registration statement on Form S-4 with the SEC. Stockholders of First Security are encouraged to read the registration statement, including the proxy statement-prospectus that will be part of the registration statement, because it will contain important information about the merger. After the registration statement is filed with the SEC, it will be available for free, both on the SEC's web site (www.sec.gov) and from First Security's and Wells Fargo's corporate secretaries.
SOURCE Wells Fargo & Company; First Security Corporation
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|To: David C. Burns who wrote (1258)||4/10/2000 5:37:00 PM|
|From: David C. Burns|
D.A. Davidson Analyst to Interview On RadioWallStreet.com|
PHILADELPHIA--(BUSINESS WIRE)--April 10, 2000--Today, on RadioWallStreet.com, D.A. Davidson & Company Vice-President & Senior Analyst, James Bradshaw, will discuss Wells Fargo & Company (NYSE: WFC) and First Security Corporation (Nasdaq: FSCO).
This event will be broadcast Monday, April 10, 2000, at 3:30 PM EDT.
To access this RadioWallStreet.com broadcast, investors should go to radiowallstreet.com. It may be necessary for first time visitors to RadioWallStreet.com to go to the site to download and install any necessary audio software. There is no charge to access any event.
If you are viewing this release after the day of the event go to radiowallstreet.com.
Questions for this RadioWallStreet.com event may be submitted in advance by e-mailing firstname.lastname@example.org. Please reference date and time of the interview in the Subject of the e-mail.
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|To: Troll_29 who wrote (1246)||4/19/2000 3:08:00 AM|
|From: David C. Burns|
Wells Fargo Reports First Quarter Record Net Income of Over $1 Billion|
SAN FRANCISCO--(BUSINESS WIRE)--April 18, 2000--Wells Fargo & Company (NYSE:WFC)
First Quarter 2000 Highlights:
-- Record Net Income of $1.01 billion, up 14% from prior year
-- Record Diluted Earnings Per Share of $.61, up 15% from prior year
-- Return on Assets (ROA) of 1.88 percent, Cash ROA of 2.23 percent
-- Return on Common Equity (ROE) of 18.24 percent, Cash ROE of 34.15 percent
-- Loan growth of 15 percent from first quarter 1999
-- Cash efficiency ratio of 53.4 percent
2000 from 1999
Net Income (in millions) $1,010 14%
Diluted Earnings per Common Share .61 15
Diluted Cash Earnings per Common Share(a) .70 15
Return on Assets 1.88% 4
Return on Common Equity 18.24 5
Cash Efficiency Ratio 53.4 (3)
Net Interest Margin 5.56 --
(a) Cash earnings exclude goodwill and nonqualifying core deposit intangible amortization and balances.
Wells Fargo & Company (NYSE:WFC) today reported record net income of $1,010 million for the first quarter of 2000, the first quarter of over $1 billion in earnings, and an increase of 14 percent from $884 million in the first quarter of 1999.
Diluted earnings per common share were a record $.61 for the first quarter of 2000, an increase of 15 percent from $.53 in the first quarter of 1999. Return on average assets (ROA) was 1.88 percent for the first quarter of 2000, compared with 1.80 percent for the first quarter of 1999. Return on average common equity (ROE) was 18.24 percent for the first quarter of 2000, compared with 17.33 percent for
the first quarter of 1999. Diluted cash earnings per share were a record $.70 for the first quarter of 2000, an increase of 15 percent from $.61 per share for the same period of 1999. Cash earnings are earnings before the amortization of goodwill and nonqualifying core deposit intangible. Cash ROA was 2.23 percent and cash ROE was 34.15
percent for the first quarter of 2000, compared with 2.17 percent and 34.38 percent, respectively, for the first quarter of 1999.
"Thanks to our diverse businesses and talented team members, we've begun 2000 with significant earnings momentum as we continue to meet our ambitious business and profitability goals," said President and CEO Dick Kovacevich. "This is our fifth consecutive quarter of record
growth in all key measures of financial performance since the completion of the merger of equals of the former Norwest and the former Wells Fargo -- another indication of our ability to deliver on what we said we'd do. Revenue for the quarter increased by 9 percent over 1999 -- close to our ambitious long-term goal of double-digit revenue increases. This performance is all the more remarkable when you consider that, at the same time, our people have successfully combined systems in five of our banking states with no significant problems for our more than two million banking households in those states -- Arizona, New Mexico, Nevada, Texas and Utah. We're also bringing more than one million new banking households into the Wells Fargo family with recent announced acquisitions including Michigan Financial Corporation, First Commerce Bancshares of Nebraska, National Bancorp of Alaska and our recent agreement to merge with First Security Corporation of Salt Lake City. Our goal, however, is not to be the biggest financial services company in America, our goal is to be the best, with service quality number one, second to none and gaining 100 percent of our customers' financial services business. As an indicator of our financial success and low-risk profile, Moody's increased our debt ratings from Aa3 to Aa2 this quarter."
"The $.70 diluted cash earnings per share reported for the first quarter of 2000 roughly reflect the core operating performance of the company," said Ross Kari, chief financial officer. "Venture capital gains of $885 million were substantially offset by losses of $602 million on the sales of securities from the continued restructuring of the investment portfolio, a $160 million write-down of auto lease residuals due to continuing deterioration in used car prices, integration and other expenses."
"During the quarter we continued to make progress in developing integrated online products and services for our varied and diverse customer segments, including small businesses, commercial enterprises, investors and consumers," said Clyde Ostler, group executive vice president of the Internet Services Group. "Importantly, we signed a significant partnership with eBay and Billpoint to develop an integrated online person-to-person payment capability for eBay's 10 million registered users. Through our joint ownership of Billpoint we will have a proven end-to-end solution for such payments on the Internet. In the future we plan to provide this capability to other sites and businesses on the Internet. Online Consumer Banking continued to grow at over 100,000 new customers per month. We currently have over 1.7 million active online users, representing almost one in four retail checking households. Over 450,000 of our online customers use our bill paying service as well. We were recognized by Nielsen NetRatings as having more unique visitors to our website than any other bank as of February 2000."
Net Interest Income
Net interest income on a taxable-equivalent basis was a record $2,456 million in the first quarter of 2000, compared with $2,281 million for the same quarter a year ago. The net interest margin was 5.56 percent for the first quarter of 2000, compared with 5.58 percent for the same period of 1999.
"Net interest income grew $45 million in the first quarter, as compared to fourth quarter 1999, due primarily to higher loan balances of 4.5 percent from December 31, 1999," said Kari. "The margin declined 5 basis points to 5.56 percent during the quarter due primarily to the use of higher costing short-term borrowings to partially fund this loan growth and other earning asset mix changes, including a $2.9 billion temporary increase in the investment securities portfolio. As part of our restructuring program, we purchased securities before selling existing securities to take advantage of market opportunities."
"Core deposits are up slightly versus the fourth quarter with reductions due to normal seasonality being offset by the impact of acquisitions plus modest growth," Kari added. "Also, deposits in off balance sheet sweep accounts showed continued strong growth. Sweep balances currently total approximately $20 billion and have grown 26% over the past year."
Noninterest income in the first quarter of 2000 was $1,911 million, an increase of 11 percent from $1,727 million in the same quarter of 1999. The increase was primarily due to net venture capital gains of $885 million, offset by losses of $602 million on the sales of securities that resulted from the continued restructuring of the securities available for sale portfolio and a $160 million write-down of auto lease residuals.
Noninterest expense was $2,479 million in the first quarter of 2000, an increase of 6 percent from $2,342 million in the same quarter of 1999. The efficiency ratio improved to 57.0 percent for the first quarter of 2000, compared with 58.7 percent for the same quarter of 1999. On a cash basis, this ratio improved to 53.4 percent, compared
with 54.9 percent for the same quarter of 1999.
The provision for loan losses was $255 million for the first quarter of 2000, compared with $270 million for the same period in 1999. Net charge-offs totaled $254 million, or .84 percent of average loans (annualized), in the first quarter of 2000, compared with $273 million, or 1.03 percent of average loans (annualized), for the first quarter of 1999.
At March 31, 2000, the allowance for loan losses of $3,237 million was 2.59 percent of total loans, compared with 2.65 percent at December 31, 1999 and 2.92 percent at March 31, 1999. Total nonaccrual and restructured loans were $744 million at March 31, 2000, compared with $669 million at December 31, 1999 and $704 million at March 31, 1999.
Wells Fargo has four lines of business for management reporting:
Community Banking, Wholesale Banking, Wells Fargo Home Mortgage, and Norwest Financial (Consumer Finance). Net income of the four business segments was:
(in millions) 2000 1999
Community Banking $721 $622
Wholesale Banking 252 222
Wells Fargo Home Mortgage 67 66
Norwest Financial 56 54
More financial information on the business segments is on page 21.
Community Banking offers a complete line of diversified financial products and services for consumers and small businesses including investment, insurance and trust services primarily in 22 midwestern and western states.
Community Banking reported earnings of $721 million in the first quarter of 2000, 16 percent above first quarter 1999 earnings of $622 million.
"Our 11 percent increase in revenue growth is the direct result of the significant momentum we continue to see in sales and service across our entire community banking franchise," said Chief Operating Officer Les Biller. "For example, a recent cross-sell effort in Nevada between our bankers and our mortgage sales representatives resulted in mortgage leads that added 50 new bank customers and 70 mortgage applications in just six weeks. Our Commercial Banking team in Newport Beach, Calif., referred a corporate customer to Private Client Services who helped complete a $40 million loan and a customer relationship resulting in approximately $800,000 in annual revenue. And in Rapid City, South Dakota, after a team of our bankers helped a customer sell his business, the customer returned to invest several million dollars with us, and the new owners of the business also came to us for loans, insurance, corporate credit cards, merchant cards, and treasury management."
"Home Equity balances were up 5.4 percent during the quarter and 27 percent from first quarter 1999," Biller added. "We are particularly pleased with Home Equity sales through Wellsfargo.com. Our home equity Internet channel posted a 75 percent increase in application volume, with 30 percent of all online applications coming from outside our banking states."
Wholesale Banking serves businesses with annual sales in excess of $10 million and maintains relationships with major corporations throughout the United States. Wholesale Banking provides a complete line of commercial and corporate banking and real estate services.
Wholesale Banking reported earnings of $252 million in the first quarter of 2000, 14 percent above first quarter 1999 earnings of $222 million.
"Wholesale Banking began the year with a strong first quarter," said Dave Hoyt, group executive vice president of the Wholesale Bank. "Net income for the group is 17% above last quarter and 14% ahead of first quarter last year. We are seeing growth in all of our core businesses. For example, total revenue for middle market banking is up 23% over the first quarter 1999, equipment finance revenue is up 37% and asset-based lending revenue is up 29%. On the lending side, our total loan outstandings have grown 16% over first quarter last year. Credit quality remains good due to strong economic conditions. Also, our operating services continue to be a larger source of our earnings. These businesses, which include our institutional investment services, treasury management, international and domestic risk management, and our real estate investment bank Eastdil, now account for 43% of our total revenue."
Wells Fargo Home Mortgage (formerly Norwest Mortgage) is the largest retail originator and a leading servicer of home mortgage loans in the United States.
Wells Fargo Home Mortgage reported earnings of $67 million in the first quarter of 2000, 2 percent above first quarter 1999 earnings of $66 million.
(dollars in billions) 3/31/00 12/31/99 9/30/99 6/30/99 3/31/99
Quarter $12 $13 $19 $23 $28
Year to date 12 82 69 50 28
Unclosed pipeline 16 12 16 19 20
Servicing portfolio 284 280 274 266 257
rights (in millions):
Quarter 123 84 139 166 294
Year to date 123 683 599 460 294
Weighted average coupon 7.37% 7.33% 7.30% 7.30% 7.34%
rights as a percentage
of servicing portfolio 1.63 1.60 1.58 1.53 1.41
"Without the high level of refinancing activity we experienced in 1998 and 1999, mortgage originations this year are reflecting a more normal seasonal pattern," said Mark Oman, group executive vice president and chairman of Wells Fargo Home Mortgage. "Our strong earnings this quarter reflect the balance we have between our mortgage origination businesses and our $284 billion servicing portfolio. When refinancing activity slows down the servicing portfolio pre-payments also slow down. Lower pre-payments reduce capitalized servicing rights amortization expense. The lower amortization expense in the first quarter allowed us to report strong earnings despite the significantly lower level of originations compared to last year."
Norwest Financial offers consumer and commercial finance, leasing and technology services in 47 states, Canada, the Caribbean and Latin America.
Norwest Financial reported earnings of $56 million in the first quarter of 2000, 4 percent above first quarter 1999 earnings of $54 million.
"We were pleased with our first quarter results which were slightly ahead of 1999 and modestly ahead of our plan," said Dan Porter, group executive vice president of Norwest Financial. "We're looking at 2000 as a year to set the stage for future growth with new processes and products and a new excitement in our company as we take on the Wells Fargo name in the third quarter."
A recorded message reviewing the quarter is available through April 21, 2000. You may access the call by dialing 800-633-8284 (domestic) or 858-812-6440 (international). The access code is 14936275. The call is also available at www.wellsfargo.com/ir or www.vcall.com.
Wells Fargo & Company is a diversified financial services company with $222 billion in assets, providing banking, insurance, investments, mortgage and consumer finance from about 5,300 stores and the Internet (wellsfargo.com) across North America and elsewhere
Visit Wells Fargo at www.wellsfargo.com.
The following appears in accordance with the Private Securities
Litigation Reform Act of 1995:
This press release (including information incorporated by reference in this press release) may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may."
Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors--many of which are beyond the Company's control--could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's reports filed with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended December 31, 1999, describe some of these factors, including certain credit, market, operational, liquidity and interest rate risks associated with the Company's business and operations. Other factors described in the Company's December 31, 1999 Form 10-K include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, legislation including the Gramm-Leach-Bliley Act of 1999, the combination of the former Norwest Corporation and the former Wells Fargo & Company, and other mergers and acquisitions.
Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
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|To: Troll_29 who wrote (1246)||4/25/2000 5:19:00 PM|
|From: David C. Burns|
Wells Fargo & Company Announces Dividend|
SAN FRANCISCO, April 25 /PRNewswire/ -- Wells Fargo & Company (NYSE: WFC) today announced a quarterly common stock dividend of 22 cents per share, payable June 1, 2000 to stockholders of record May 5, 2000. Wells Fargo has approximately 1.6 billion shares of common stock outstanding.
Wells Fargo & Company is a $222 billion diversified financial services company providing banking, insurance, investments, mortgage and consumer finance through about 5,300 stores, the Internet and other distribution channels across North America, including all 50 states, and elsewhere internationally.
SOURCE Wells Fargo & Company
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|To: wiley murray who started this subject||4/20/2004 7:26:38 PM|
|From: David C. Burns|
|Wells Fargo Keeps Streak, Earning $1.77B|
By MICHAEL LIEDTKE
SAN FRANCISCO (AP) - Wells Fargo & Co. continued its recent earnings roll in the first quarter, propelled by a hard-driving sales culture that fed the banking giant's loan-hungry customers.
The San Francisco-based company said Tuesday that it earned $1.77 billion, or $1.03 per share, for the three months ending in March, an 18 percent increase from $1.49 billion, or 88 cents per share, a year ago.
Revenue totaled $7.15 billion, a 7 percent improvement from $6.68 billion last year.
The earnings per share exceeded the mean estimate of 98 cents among analysts polled by Thomson First Call.
The performance marked the 11th consecutive quarter of double-digit earnings growth for Wells, the largest bank based west of the Mississippi.
Wells' shares fell 55 cents to close at $55.36 on the New York Stock Exchange.
Chairman Dick Kovacevich is confident the bank will be able to sustain its recent earnings momentum as the economy gathers more steam. ``We're well positioned for even more growth,'' he said Tuesday.
The bank has been fattening its profits by catering to consumers eager to sample a smorgasbord of financial products.
That trend continued in the first quarter, despite a home mortgage lending slowdown that stemmed from a rise in interest rates.
Wells ended March with consumer loans totaling $165.5 billion, a 52 percent increase from $108.6 billion year ago. The gains included $19 billion in new consumer loans during the first three months of this year.
The steady rise reflects the bank's aggressive sales culture. Kovacevich, a former retailer, refers to Wells' 5,900 branches as ``stores'' to help foster a culture devoted to finding new ways to sell customers a mix of deposit accounts, loans and investment products.
The approach has been paying off. Wells said it sold 3.24 million products in the first quarter, a 23 percent increase from last year. The bank sells an average of five products to its customer households today, up from about three products in the late 1990s, said Howard Atkins, Wells' chief financial officer. Wells wants to average eight products per household.
Wells may be about to expand its product selection. The bank reportedly is among the bidders interested in buying mutual fund company Strong Financial Corp., which put itself on the auction block in December. Atkins declined to comment on Wells' interest in Strong Financial, but said in a telephone interview Tuesday that the bank remains interested in deals that would make it more profitable.
Home mortgages accounted for $125 billion, or 75 percent of Wells' consumer loans through the first quarter.
When interest rates began to climb last year, Wells' mortgage lending volume tapered off. The bank said its first-quarter revenue from home mortgages totaled $800 million, down 33 percent from $1.2 billion at the same time last year.
But demand for home mortgages surged in March when mortgage rates dipped again. The bank said it received $119 billion in mortgage applications during the first quarter, a 68 percent increase from the final three months of 2003. Wells entered the second quarter with about $72 billion in its mortgage pipeline.
Wells so far has been able to avoid major loan problems as its portfolio has swelled. The bank suffered first-quarter loan losses of $404 million, 3 percent less than the $415 million in loan losses registered a year ago.
On The Net:
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|To: wiley murray who started this subject||7/20/2004 9:05:41 AM|
|From: David C. Burns|
|Wells Fargo Reports 12 Percent Profit Jump|
SAN FRANCISCO (AP) - Wells Fargo & Co.'s second-quarter earnings rose more than 12 percent due to broad-based growth in revenue and improving credit quality.
The nation's fifth-largest bank by assets Tuesday reported second-quarter net income of $1.71 billion, or $1 a share, up from $1.53 billion, or 90 cents a share, in the same quarter a year earlier.
The latest quarter included charges of 14 cents a share to reposition the bank's balance sheet due to rising interest rates. The charges reflect a debt buyback and the sale of $14 billion in securities and adjustable rate mortgages.
Results also included 1 cent a share in market-sensitive income, which reflects net gains and losses on debt securities available for sale and equity investments.
A Thomson First Call survey of analysts produced an average earnings estimate of $1.04 a share.
Revenue increased 7 percent to $7.4 billion, despite a $222 million reduction for losses taken on the asset-repositioning actions. The First Call average estimate was $7.33 billion.
Wells Fargo said it had strong results in most of its businesses during the second quarter, including consumer deposits and loans, payment processing, insurance brokerage, trust and investments including private client services, small business, corporate banking, mortgage banking and consumer finance.
Second-quarter net loan charge-offs were down 6 percent, and nonperforming assets declined 8 percent. The provision for loan losses was $440 million in the latest quarter and $421 million a year earlier.
Average loans were up 30 percent to $266.2 billion, and average core deposits rose 9 percent to $224.9 billion. Wells Fargo said its average banking household now has 4.4 products with the company, a figure believed to be among the highest, if not the highest, in the country.
Commercial loan growth was broad-based in the second quarter and consumer credit demand continued to be strong, Wells Fargo said.
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