Led by traditional banking activities, Wells Fargo & Co. said Thursday that its business in the first quarter was strong, adding that the purchase of Wachovia had exceeded expectations.

The company issued a report today saying it expects to earn a record $3 billion in net income for the first three months of 2009.

Below are comments contained in the report from Chief Executive John Stumpf and Chief Financial Officer Howard Atkins:

Record profits

“Our business momentum is strong, and we expect our operating margins to remain at the top of our peer group,” Stumpf said.

Wachovia does better than expected

“Wachovia’s outstanding franchise has proven to be everything we thought it would be when we announced this acquisition, and the financial contribution from Wachovia exceeded our expectations in the first quarter,” Stumpf added.

Traditional banking a strength

“Business momentum in the quarter reflected strength in our traditional banking businesses, strong capital markets activities, and exceptionally strong mortgage banking results -- $100 billion in mortgage originations, with a 41 percent increase in the unclosed application pipeline to $100 billion at quarter end, an indication of strong second quarter mortgage originations,” said CFO Howard Atkins.

Credit offers ongoing

“Our commitment to serving credit-worthy consumer, small business and commercial customers has continued throughout the credit crisis, and, in fact, accelerated during the quarter and we’re providing significant support to U.S. homeowners.”

Profit a result of business model

“Wells Fargo’s business model typically produces above-peer revenue growth particularly during difficult economic times like these when others in the industry are incurring losses on activities in which we did not participate,” Atkins said.

Wachovia merger a “huge opportunity”

“With the acquisition of Wachovia, we’re now serving almost one of every three U.S. households. Revenue synergies from cross-sell are a huge opportunity much like the Wells Fargo-Norwest merger ten years ago.”