Wells Fargo & Co., the biggest U.S. home lender, posted a fifth straight quarterly profit as credit costs "turned the corner" and the economy struggled toward recovery.
First-quarter net income fell 16 percent to $2.55 billion, or 45 cents a share, compared with $3.05 billion, or 56 cents a share, in the same period a year earlier, the San Francisco-based bank said Wednesday. Revenue rose 2 percent, less than most analysts predicted, and the bank said borrowers aren't clamoring to take out new debt.
Chief Executive John Stumpf is trying to limit loan losses and steer the lender through the last stages of the credit crisis. He'll have to overcome an unemployment rate stuck near 10 percent and home prices almost 30 percent below their peak. Wells Fargo wrote off $5.3 billion of loans, an $83 million decrease, while fee income grew 7 percent and lending margins widened from a year earlier.
"We believe that credit at Wells Fargo has turned the corner," according to Chief Financial Officer Howard Atkins, who said in the statement that provisions and charge-offs peaked in 2009. Loan demand remained "soft," he said.
Shares of Wells Fargo dropped 68 cents, or 2 percent, to close at $33.01 Wednesday. The shares gained 15 percent during the first quarter and set a new 52-week high Tuesday.
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