Wells Fargo & Company reported its insurance services division's income grew 5 percent in the third quarter over last year.
The San Francisco-based banking company said insurance services grew $16 million in the quarter compared with the same period last year, to $329 million. For the first three months of 2007, insurance services grew 11 percent, or $119 billion, over last year to $1.2 billion, representing 8 percent of the company's non-interest income.
Chief Financial Officer Howard Atkins said in a recorded message that the increase in insurance fee income was driven by new customer growth and cross selling.
The decline in the overall trend of insurance growth when compared to the previous five reporting periods is "in line with normal seasonality," he said, adding that much of that decline was "offset by related declines in expenses."
Wells Fargo as a whole reported third-quarter net income increased 4 percent, or $90 million, to $2.28 billion, or 68 cents a share. Revenues increased $920 million to $9.85 billion.
For the three months, net income stands at $6.81 billion, an increase of 8 percent or $510 million. Earnings per share rose 16 cents to $2.01 a share. Revenues rose 11 percent, or $2.91 billion, to $29.19 billion.
Mr. Atkins noted that the company is not immune to the downturn in the housing market but that its diversity of income is well positioned to withstand the direction the markets are taking.
He noted the company's acquisition of Greater Bay Bancorp, which brought the insurance brokerage firm ABD Services into Wells Fargo Insurance Services, formerly the insurance brokerage firm Acordia.
The purchase of Greater Bay, Mr. Atkins said, with $7.4 billion in assets–the third-largest banking acquisition in the company's history–makes the company better able to serve "our community banking, commercial insurance brokerage, specialty finance and trust customers."
He said the company expects to see additional acquisitions in the future with focus on niche opportunities that add to shareholder value.
"We will not do any acquisitions unless they meet our longstanding financial criteria for equation and returns," he said.
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