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Wells Fargo & Co. said Thursday it expects
record first-quarter earnings of $3 billion, easily surpassing
analysts' estimates and providing an encouraging sign for the
banking industry.


      Wells Fargo is the first major bank to give an indication of how
the first-quarter looked, and the unexpectedly upbeat news gave an
immediate boost to stock futures. Several pessimistic forecasts
about potential loan losses have jolted the market in recent days,
and investors have been anxious as Citigroup Inc., Goldman Sachs
Group Inc. and JPMorgan Chase & Co. all report next week.


      Wells Fargo's stock rose $4.87, or 32.7 percent, to $19.76 in
electronic premarket trading, while stock futures also surged on
the announcement.


      San Francisco-based Wells Fargo, which has receive $25 billion
in funds as part of the government's bank bailout plan, anticipates
earnings after preferred dividends of about 55 cents per share.
Revenue for the period ended March 31 is expected to climb 16
percent to $20 billion.


      Analysts polled by Thomson Reuters forecast profit of 23 cents
per share on revenue of $19 billion. Analysts' estimates typically
exclude one-time items.


      Wells Fargo earned $2 billion during the first quarter last
year.


      The bank's chief financial officer, however, did caution that
the economy hasn't necessarily recovered yet.


      "It's premature to conclude the economy has turned," said
Howard Atkins, Wells Fargo's CFO. "All I can tell you is we're
seeing a lot of business."


      Revenue at Wells Fargo, which has been one of the strongest
banks during the ongoing credit crisis and recession, was bolstered
by strong mortgage banking and capital markets business, Atkins
told The Associated Press. During the first quarter, Wells Fargo
received about $190 billion in mortgage applications, a 64 percent
jump from the previous quarter. More than 40 percent of that volume
came in March.


      Most of that business was refinance applications, but about 25
percent came from customers looking to purchase homes, Atkins said,
noting the recent quarter's mortgage activity has been among the
strongest quarters since the housing market began to collapse in
2007.


      The government has been implementing many new programs in an
effort to cut interest rates, hoping to bolster the beleaguered
housing market, and those programs have definitely helped, Atkins
said.


      "For sure the reduction in interest rates is having an impact
on the wave of activity in the mortgage market," Atkins said.


      The company also credited its Wachovia acquisition, which was
completed Jan. 1, for helping boost revenue. Atkins said Wachovia
accounted for about 40 percent of revenue during the first quarter,
and that business at Wachovia has steadily improved since Wells
Fargo announced it would acquire the Charlotte, N.C.-based bank
last fall.


      Wells Fargo said charge-offs are expected to total $3.3 billion
for the first quarter, compared with a combined $6.1 billion
between Wells Fargo and Wachovia during the fourth quarter.
Charge-offs are loans written off as not being repaid.


      The bank is still facing loan losses as customers fall behind on
repaying loans during the recession. It said its loan-loss
provision will total about $4.6 billion for the first quarter,
including adding $1.3 billion to its credit reserves. Wells Fargo
now has $23 billion in reserves to cover future loan losses.


      Wells Fargo is scheduled to report full quarterly results on
April 22.

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Business and Economic News

Wells Fargo & Co. said Thursday it expects
record first-quarter earnings of $3 billion, easily surpassing
analysts' estimates and providing an encouraging sign for the
banking industry.


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