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Expenses increased as Wells set aside more money for commissions and bonuses in mortgage lending and other business areas, but the bank said it expects to trim expenses this quarter. Its headcount stands at 264,900 employees, down 5,300 from a year ago but up 700 from the previous quarter. There were encouraging signs about ability of borrowers to pay back their loans. The percentage of loans that were charge-offs, meaning the bank doesn't expect to collect on them, dropped to 1.25 percent from 1.73 percent a year ago. The bank said that was the lowest since 2007, before the financial crisis imploded. The bank also set aside less money for future potential losses. Chief risk officer Mike Loughlin said in a statement that he expected "continued but slower improvement" in losses for the rest of the year, "absent significant deterioration in the economy." Wells paid a 22-cent dividend in the first quarter, up from 12 cents a year ago, after passing the government's most recent round of stress tests. That compares with token dividends of just 1 cent at Bank of America and Citigroup. "Our shareholders have been very patient, and we are pleased to reward them with an additional return on their investment," chief financial officer Tim Sloan said in a statement. There are still challenges for Wells Fargo on the horizon. The bank's net-interest margin, which measures its profitability in lending, fell slightly from a year ago, to 3.91 percent from 4.05 percent. Low interest rates will continue to be a challenge, and the mortgage windfall will eventually run out of steam. Like other banks, Wells is also navigating a tricky new environment of greater government oversight. Some of its key sources of revenue, like fees that stores pay for debit card transactions, have been shattered by new rules. Wells and other banks are looking for new fees to charge without alienating its customers. Wells Fargo's stock fell $1.18, or 3.5 percent, to close at $32.84 Friday.
[Associated
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