NEW YORK (

TheStreet

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Wells Fargo

(WFC) - Get Report

reported first-quarter net income of $3.8 billion, or 67 cents a share, up from earnings of $2.5 billion, or 45 cents a share, a year earlier.

Wells Fargo's revenue fell to $20.3 billion from revenue of $21.4 billion in the first quarter of 2010. The decrease was mostly due to a $741 million decline in mortgage banking revenue and lower net interest income.

Earnings per share beat analysts expectations, but expected revenue fell short. Analysts surveyed by Thomson Reuters predicted the bank would report earnings of 66 cents a share on sales of $21.2 billion.

Mortgage banking income fell $741 million from the fourth quarter of 2010 to $2.02 billion. Mortgage originations fell from $128 billion in the fourth quarter of 2010 to $84 billion in the first quarter of 2011. Mortgage loan repurchase losses were $249 million compared with $464 million in the fourth quarter. In addition, net mortgage servicing rights (MSRs) gained $379 million compared with a $143 million loss in fourth quarter 2010.

Core deposits rose 5% from the fourth quarter of 2010 to $796.8 billion. Net charge-offs decreased from $3.8 billion in the fourth quarter of 2010 to $3.2 billion in the first quarter. The bank also took a $1.0 billion net reserve release.

"Our strong first-quarter results reflected positive trends in our business fundamentals as credit quality improved, capital ratios increased and cross-selling reached new highs," said Wells Fargo CEO John Stumpf in a press release.

Wells Fargo shares were down 42 cents in premarket trading Wednesday to $29.65.

--Written by Maria Woehr in New York.

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