Wells Fargo Reports First Quarter Net Income of $2.5 Billion

In the first quarter of 2010, ""Wells Fargo"":https://www.wellsfargo.com/ earned $2.5 billion, or $0.45 per common share, according to the bank's ""earnings report"":https://www.wellsfargo.com/downloads/pdf/press/1q10pr.pdf released Wednesday.

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In its report, Wells Fargo said all business segments contributed to the strong earnings results, with net income from community banking of $1.5 billion, wholesale banking income of $1.2 billion, and brokerage and retirement net income of $282 million.

The San Francisco-based bank's revenue of $21.4 billion was up 2 percent from the first quarter of 2009, and pre-tax pre-provision profit (PTPP) was $9.3 billion, marking the fifth consecutive quarter PTPP exceeded $9 billion.

Wells Fargo said is believes credit has ""turned the corner,"" as it supplied more than $128 billion in credit during the quarter, including mortgage originations and consumer and commercial loans and lines of credit.

At the end of the first quarter, the bank reported $125 billion in total home mortgage applications, including $76 billion in actual originations and an application pipeline of

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$59 billion. As of March 31, 2010, Wells Fargo's owned residential servicing portfolio totaled $1.8 trillion.

Citing data from _Inside Mortgage Finance_, Wells Fargo said the delinquency and foreclosure rates of loans included in its mortgage portfolio were less than three-fourths of the industry average. According to the bank's earnings report, less than 2 percent of loans secured by owner-occupied homes and serviced by Wells Fargo proceeded to foreclosure sales in the past 12 months.

The low rates of delinquency and foreclosure were the result of the bank's ""continued efforts to help homeowners"":http://dsnews.comarticles/wells-fargo-continues-to-deliver-modifications-troubled-borrowers-2010-04-15 stay in their homes. Between January 2009 and March 31, 2010, Wells Fargo had 523,336 active and completed trail modifications on its books. Of these, 144,932 were Home Affordable Modification Program (HAMP) active and completed modifications, including 30,014 permanent HAMP modifications. And nearly 380,000 were proprietary trial and completed modifications.

In addition to completing HAMP and proprietary modifications, Wells Fargo recently ""announced its participation"":http://dsnews.comarticles/wells-fargo-signs-onto-hamps-second-lien-program-2010-03-17 in the Second Lien Modification Program under HAMP to help struggling homeowners with a reduction in their home equity loan payments. In order to make these programs successful, the bank has added more than 10,000 staff focused on home preservation since January 2009. By the end of the first quarter of this year, Wells Fargo had a total of 17,400 staff focused directly on these efforts.

The bank's allowance for credit losses increased to $25.7 billion during the quarter, primarily due to a $693 million addition to allowance upon adoption of FAS 167. In addition, Wells Fargo provided $402 million to mortgage repurchase reserve.