Wells Fargo earnings up 11%; WaMu profit down

Wells Fargo & Co.’s first-quarter profit rose 11% despite its large exposure to risky sub-prime loans. But earnings fell 20% at Washington Mutual Inc., the largest savings and loan.

Shares of Wells Fargo declined 26 cents to $35.25. Washington Mutual shares fell 60 cents to $40.13 but rose $1.04 in after-hours trading as results topped forecasts.

Net income for San Francisco-based Wells Fargo rose to $2.24 billion, or 66 cents a share, from $2.02 billion, or 60 cents, a year earlier. Revenue rose 10% to $9.44 billion.

Analysts on average had forecast profit of 65 cents a share on revenue of $9.31 billion, according to Reuters Estimates.

The bank said commercial lending grew 11%, helping offset a $124-million write-off from a decline in the value of some mortgages to high-risk borrowers.

Credit losses rose 65%, but analysts and the bank said trends were manageable. Mortgage applications grew 19%, suggesting the bank was winning market share.

Profit at Seattle-based Washington Mutual fell to $784 million, or 86 cents a share, from $985 million, or 98 cents, topping forecasts by 2 cents a share. Rising profit in retail banking and credit cards offset higher credit costs and a $11-million loss from a home-loan unit.