Wells Fargo 4Q income rose to $3.4 billion from $2.8 billion year ago
Wells Fargo & Co.'s (WFC) fourth-quarter income rose 21% as most of the company's units grew revenues and the level of nonperforming loans decreased. The nation's largest mortgage originator said earnings climbed to a record $3.41 billion, or 61 cents a share, from $2.82 billion, or 8 cents a share, a year earlier, which was hurt by the federal redemption of preferred stock received by the government under the Troubled Asset Relief Program in exchange for bailout funds. Revenue for the three months ended Dec. 31 increased 12% to $21.5 billion from the $20.87 billion the prior quarter and down 5.3% $22.7 billion a year earlier. Wells Fargo said applications for home mortgages fell to $158 billion in the fouth quarter, down 19.4% from the prior quarter and up almost 10% from $144 billion a year earlier. The bank's closed the quarter with a pipeline of first mortgages initiated yet unclosed of $73 billion, which is down from $101 billion at Sept. 30 but up from 457 billion at Dec. 31, 2009. The banking giant said a significant improvement in credit quality led to a $2.1 billion drop in nonperforming loans during the quarter. Chief Financial Officer Howard Atkins said the company has now earned "strong and consistent" profits in each of the eight quarters since the 2008 merger with Wachovia. "The Wachovia merger is already proving to be a financial success, with substantially all of the expected expense savings already realized and growing revenue synergies reflective of market share gains in many businesses including deposits, mortgage, auto dealer services and investment banking," Atkins said. For the full year, Wells Fargo earned $12.36 billion, or a $2.21 share, up from $12.28 billion, or $1.75 a share, for 2009. Revenue for 2010 slid to $85.2 billion from $88.7 billion a year earlier. Wells Fargo has completed more than 620,000 active trial or completed loan modifications since the beginning of 2009. Some 530,000 were facilitated through the company’s own programs, with the remaining 90,000 through the government’s Home Affordable Modification Program. Write to Jason Philyaw.