Bank profits strong

Wells Fargo & Co., Washington Mutual Inc. and U.S. Bancorp posted first-quarter profits Tuesday that shrugged off a recent home-mortgage slowdown caused by rising interest rates.

Earnings at San Francisco-based Wells Fargo, the fifth-largest U.S. bank, rose 9 percent to $2.02 billion — marking the first time in the company’s 154-year old history it passed the $2 billion mark. Meanwhile, Washington Mutual reported a 9 percent jump in profit from stronger fee income, and U.S. Bancorp posted a 7.7 percent increase to $1.15 billion.

For the three banks, the secret to earnings success was the same: diversification in their businesses. They used acquisitions and an expansion of their retail branch network to increase lending revenue despite the cooling of the mortgage market.

“We had solid, broad-based and, in many businesses, accelerating revenue growth, with revenue in businesses other than home mortgage up a combined 17 percent from a year ago,” Wells Fargo Chief Financial Officer Howard Atkins said in a statement.

Wells Fargo — the nation’s second-largest mortgage originator behind Calabasas, Calif.-based Countrywide Financial Corp. — reported earnings rose to $1.19 per share from $1.08 in the year-ago period. Revenue totaled $8.56 billion, a 6 percent increase from $8.09 billion a year ago.

Wamu, the nation’s largest savings and loan, reported profit rose to $985 million on $3.84 billion of revenue.

The Seattle-based thrift said its $6.45 billion acquisition of credit-card issuer Providian Financial Corp. boosted profit on some 417,000 new accounts opened since the deal closed in October. Also boosting results was fee income, which spiked 29 percent from the year-ago period to $1.73 billion.

Profit at U.S. Bancorp climbed to 63 cents a share, from $1.07 billion, or 57 cents, a year earlier. Revenue climbed 7 percent to $3.34 billion from last year’s $3.13 billion.

“Northwest Bancorp., Inc.’s net income rose 35 percent in the first quarter compared with the same period the previous year, the bank announced Monday.

The Spokane-based parent company of Inland Northwest Bank reported income of about $609,000, or 28 cents a share, compared with earnings of about $450,000, or 21 cents a share, in the first quarter of 2005. Total assets were $259 million at the end of March, up 17 percent from assets of $222 million at the same time last year.

Inland Northwest Bank will open its newest branch next week at the northeast corner of Ruby Street and Ermina Avenue, in Spokane.

“Allstate Corp., the second-largest U.S. personal-lines insurer, said profit rose 26 percent in the first quarter as the company collected more premiums and saw less damage to insured homes and automobiles.

Net income totaled $1.42 billion, or $2.19 per share, for the three months ended March 31 compared with $1.12 billion, or $1.64 per share, in the year-ago quarter. Consolidated revenue was $9.1 billion, an increase of 4 percent from $8.7 billion a year earlier.

“Johnson & Johnson’s first-quarter profit jumped 17 percent, mainly due to a big termination fee from its failed attempt to acquire heart-device maker Guidant Corp., while revenue was hurt by generic competition from some former blockbuster drugs.

The world’s most diversified health products maker on Tuesday reported net income grew to $3.31 billion, or $1.10 per share, from $2.84 billion, or 94 cents per share, a year ago.

“Yahoo Inc.’s first-quarter profit met analyst expectations as the Internet icon continued to capitalize on the rapidly growing online advertising market.

The Sunnyvale, Calif.-based company said it earned $159.6 million, or 11 cents per share, during the first three months of the year. That represented a 22 percent decrease from net income of $204.6 million, or 14 cents per share, at the same time a year ago.

“The residual effects of sweeping cost cuts helped boost International Business Machines Corp.’s first-quarter earnings by 22 percent as the technology company beat analysts’ expectations Tuesday despite minor revenue growth.

In the first three months of the year, IBM earned $1.71 billion, or $1.08 per share, on revenue of $20.7 billion.

Wall Street’s consensus estimates were for earnings of $1.05 a share and $20.7 billion in revenue, according to Thomson Financial.

In the same period of 2005, IBM’s net income was $1.40 billion, or 84 cents per share, with revenue of $22.9 billion. But those results included IBM’s personal-computer division, since sold to Lenovo Group Ltd.

“Motorola Inc., the world’s No. 2 cell phone manufacturer, reported a slight drop in first-quarter income Tuesday but said a 23 percent jump in sales helped it gain market share and close the gap on rival Nokia Corp.

Motorola’s net income fell to $686 million, or 27 cents per share, from $692 million, or 28 cents per share, in the same period a year earlier.