Wells Fargo’s income jumped 51 percent in the first quarter as more people opened accounts with the bank with branches throughout Connecticut and business customers took out more loans, The Associated Press reports. Higher interest rates resulted in a sharp decline in new mortgages.
The San Francisco bank said Wednesday it earned $3.6 billion after paying preferred dividends, or 67 cents per share. That compared with $2.4 billion, or 45 cents a share in the first quarter of last year. The earnings were a penny better than the forecast of analysts surveyed by FactSet in Norwalk.
Revenue fell to $20.3 billion from $21.5 billion, largely due to lower income from mortgage fees.
Wells Fargo said more of its customers were paying their debts on time as the economy improves. Other major banks that have released results over the past week, including JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp., reported similar trends.
A sharp rise in mortgage rates hurt Wells’ home loan business. Rates for 30-year mortgages jumped to 4.84 percent in March from 4.35 percent in September. New mortgage loans at Wells fell to $84 billion from $128 billion the previous quarter.
Applications for home mortgages, an indicator of future lending, fell sharply to $102 billion from $158 billion in the prior quarter. The amount of pending applications also fell to $45 billion at the end of the first quarter from $73 billion at the end of December.
Wells Fargo recently converted the former Wachovia Bank network to its flag.
