Originations Plunge, but Wells Profits Rise

Wells Fargo & Co., San Francisco, has reported net income of $1.75 billion ($1.02 per share) in the third quarter, up 12% from $1.56 billion ($0.92 per share) a year earlier, despite a 58% decline in mortgage originations.Mortgage originations totaled $68 billion in the third quarter, down $28 billion from the level recorded in the previous quarter and down $93 billion from $161 billion in the third quarter of 2003, the company said. However, Mark Oman, group executive vice president for home and consumer finance, put the best face on the results. "The advantage of Wells Fargo's multichannel, anytime, anywhere sales approach is reflected in the growth of the home equity portfolio, which is up 43% from the prior year to $46 billion," Mr. Oman said. Noting the "unusually volatile" markets in the third quarter, Wells chief financial officer Howard Atkins said the company sold approximately $4 billion of securities and adjustable-rate mortgages, resulting in $10 million of bond gains and $35 million of loan losses. The owned servicing portfolio (including commercial servicing) totaled $777 billion as of Sept. 30, up from $681 billion a year earlier. The company can be found online at http://www.wellsfargo.com.