5/3 SF Protests Wells Fargo; 48% Profit Increase: Pay Up

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Last year Wells Fargo acquired Wachovia making it the biggest bank acquisition in the nation’s history. Wells Fargo is the third largest brokerage in U.S. and the fourth largest bank in the country.

Yet Wells Fargo paid nothing in federal taxes after it was allowed to write off 74 billion dollars in losses due to the acquisition of Wachovia. In addition to this Wells Fargo was the recipient of 25 billion dollars in taxpayer bailout money.

And how did Wells Fargo thank the U.S. tax payers? Wells Fargo denied millions of Americans the right to renegotiate their home mortgage s and foreclosed on millions of Americans and rewarded their chief executive officer by more than doubling his salary to $5.6 million paid in cash and stock and stock awards of more than $13 million. I thought the whole problem with the financial crisis of 2008 was that the banks were too big to fail. So why is it that Wells Fargo was able to acquire Wachovia in the first place? since 2009 Wells Fargo has continually posted recorded amount of profits. In the 1Q of 2009 Wells Fargo posted just underneath 2.5 billion and ended the 3Q with 3.2 billion. The trend continued into the 4Q of 2010 Wells Fargo posted a 3.4 billion profit. The republican lead House presented a bill that would cut 61 billion from the federal budget.

If corporations like Wells Fargo and the other banks that caused the financial crisis would have paid its taxes we wouldn't be talking about cutting billions from education and other vital public services. It's time to demand justice! The Federal deficit will not be balanced on the backs of working class people we will not share the burden!
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Moveon:
Our Deadbeat Dozen Tax Dodgers list includes: GE, Boeing, BP, FedEx, Google, Citigroup, Amazon, Chase, Goldman Sachs, ExxonMobil, WellsFargo, and Bank of America.
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Profits rise 48% at Wells Fargo
By Suzanne Kapner and Shannon Bond in New York

Published: April 20 2011 14:15 | Last updated: April 20 2011 19:20

Wells Fargo reported a 48 per cent increase in first-quarter profit, but the stock sank in morning trading on concerns about revenue and loan growth, highlighting the fragility of the economic recovery.

The fourth-largest US bank by assets on Wednesday reported net income of $3.8bn, or 67 cents a share, compared with $2.5bn, or 45 cents, in the same quarter last year.

The results were slightly ahead of analysts’ expectations of 66 cents a share.

Profits were helped by a $1bn release of pre-tax loan-loss reserves, which had been held to cover the cost of bad loans, a further sign that credit quality is improving. Wells Fargo said it expected to release additional reserves in the future barring any significant economic deterioration.

But revenue fell 5 per cent to $20.3bn, compared with $21.4bn in the fourth quarter of 2010, mainly because of sharply lower mortgage banking fees.

To grow, Wells Fargo, like other US banks, will need to lend more to small businesses and consumers and also recoup lost fees from checking and credit card customers.

Total loans increased slightly to $624.3bn, compared with $623.9bn in the prior quarter, excluding about $127bn in loans set aside to run off.

All of that growth came from commercial lending. Loans to consumers declined from $309.8bn a year earlier to $308.6bn.

“Consumers continue to be hesitant to borrow,” said John Stumpf, Wells Fargo’s chief executive.

Net interest income, the difference between interest earned on loans and interest paid to deposit holders, also declined from $11.1bn in the fourth quarter to $10.7bn.

The charges that Wells Fargo collects from depositors dipped 24 per cent compared with a year ago, due to new regulations that restrict overdraft and other fees. Additional rules currently being written by the Federal Reserve that will limit so-called swipe fees on debit card transactions will cost Wells Fargo $325m per quarter after taxes in lost revenue, more than the $250m after-tax quarterly revenue loss that the bank had previously predicted.

Non-interest income was $9.7bn, a 6 per cent decline from a year ago, almost entirely due to lower mortgage banking fees. Home mortgage applications totalled $102bn at the end of the first quarter, compared with $158bn at the end of the fourth quarter. Mortgages in the pipeline and new originations also fell sharply.

Wells Fargo shares were down $1.37, or nearly 5 per cent, to $28.70 at midday in New York.

Analysts said they were surprised by the magnitude of deterioration in some divisions, particularly mortgage banking. Scott Siefers of Sandler O’Neill said mortgage banking was “much weaker” than it had forecast.