Wells Fargo Reports 23% Surge in First-Quarter Profits

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Wells Fargo reported a higher-than-expected 23 percent rise in first-quarter profit on Friday as the bank set aside less money to cover bad loans and held down costs.

The fourth-biggest U.S. bank by assets, Wells Fargo & Co. (WFC) said net income applicable to common shareholders rose to $4.93 billion, or 92 cents a share, in the quarter, from $4.02 billion, or 75 cents a share, a year earlier.

Analysts on average had expected earnings of 88 cents a share, according to Thomson Reuters I/B/E/S. The results marked the 13th consecutive quarter in which the bank's earnings a share have risen from the preceding quarter.

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Wells Fargo has emerged from the financial crisis as the largest U.S. home lender as other banks have pulled back from a business that burned them during the housing boom. But the bank has now seen a decline in home loans for two consecutive quarters as fewer borrowers refinance at low interest rates.

The bank made $109 billion in home loans during the quarter, down from $129 billion in the same quarter a year ago and less than the $125 billion in loans extended in the fourth quarter. Fees from mortgages dropped 2 percent to $2.8 billion from $2.87 billion a year earlier, and were down 9 percent from the fourth-quarter.

Wells Fargo shares were down 1.6 percent at $36.90 in premarket trading.

Reporting by Rick Rothacker in Charlotte and Jochelle Mendonca in Bangalore; editing by Sriraj Kalluvila.