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Wells' Stumpf Mum on CFO Departure

NEW YORK ( TheStreet)-- Wells Fargo (WFC - Get Report) CEO John Stumpf wouldn't answer questions Wednesday on the departure of Howard Atkins, the bank's former financial chief, preferring instead to focus on the bank's dividend and buyback.

"That is so yesterday. We have a terrific CFO; we are going forward and we are looking to the future," said Stumpf in the bank's conference call Wednesday.

Stumpf said the bank's board approved a second-quarter dividend of 12 cents a share, the same amount as the first quarter, and will soon begin to buy back up to 200 million shares.

"This month the bank will start to buy back shares," said Stumpf. "It is going to be a function of how we view the stock price more than anything."

Shares of Wells Fargo were falling $1.35 to $28.72 in early afternoon trading Wednesday.
Wells Fargo CEO John Stumpf

Wells Fargo reported first-quarter net income of $3.8 billion, or 67 cents a share, on revenue of $20.3 billion. Analysts surveyed by Thomson Reuters predicted the bank would report earnings of 66 cents a share on sales of $21.2 billion.

"Weaker revenues stemming from mortgage banking were essentially offset by lower loan loss provisioning, resulting in the reported EPS being pretty much in line with consensus and our estimate. However, investors are likely to focus (rightfully so, in our view) on the revenue miss," said Stifel Nicolaus analyst Christopher Mutascio in a note.

Mortgage banking income fell $741 million from the fourth quarter of 2010 to $2.02 billion. As the business slowed management laid off 4,500 employees. Management also said costs to improve its foreclosure practices as discussed the foreclosure settlement were included in the quarter.

"We have already started making operational changes and incurring some of the costs from the consent order," said Wells Fargo Chief Financial Officer Tim Sloan, Atkins' replacement.

Wells Fargo saw an improvement in credit quality, which enabled the company to release $1 billion in reserves during the first quarter, boosting earnings.

"We would expect more releases absent significant deterioration in the economy and future reductions in the allowance for loan losses," said Sloan.

Sandler O'Neill analyst R. Scott Siefers, in a note, said credit costs were on track.
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