NEW YORK — A deluge of banks earnings on Tuesday took the pulse of the industry at a time growing mortgage and credit woes were forcing banks to charge off more loans or raise reserves against future defaults.

Rising core deposits and loans boosted first-quarter income at Wells Fargo & Co. 11 percent, despite growing problems in its subprime mortgage portfolio. Washington Mutual Inc. reported a 20 percent drop in earnings and the second consecutive quarterly loss in its housing division on subprime mortgage write-downs. The earnings still beat analysts’ estimates, however.

U.S. Bancorp’s first-quarter profit slid 2 percent as the difficult interest rate environment hindered its lending business.

Earlier, Citigroup Inc., which is headquartered in New York, and Wachovia Corp., of Charlotte, N.C., reported they were increasing their provisions for loan losses in the first quarter./AP

By the pound

British pound breaks through $2 barrier

The pound reached a high of $2.0074 before dropping back to $2.0040 in afternoon European trading, up from $1.9900 late Monday in New York. The last time the currency traded above $2 — on Sept. 16, 1992 — marked the end of Britain’s membership of the European Exchange Rate mechanism, which pegged the pound to the currencies of other EU members.

“We believe that sterling could well remain above $2 for an extended period,” said Howard Archer, chief economist at Global Insight.

Tourism operators expect the new round figure to jog interest in bookings to the United States, with shopping breaks in New York proving popular last time the pound threatened $2 in November.

Conversely, Britain will become more expensive for U.S. tourists — but economists noted that the euro is also strong against the dollar and local travel agencies do not expect to see a large drop in visitors given that the currency has been hovering near $2 for several months./AP

Earnings

Schwab in better position than TD Ameritrade

OMAHA, Neb. — A drop in trading dragged down TD Ameritrade Holding Corp.’s earnings in its most-recent quarter amid concerns over the real estate market and risky mortgages. Rival Charles Schwab Corp., which generates more of its revenue from assets, fared better.

Ameritrade officials said they want to start attracting more long-term investors later this year once they finish integrating TD Waterhouse’s U.S. retail securities business, which was acquired in January 2006.

“It’s a space that we really haven’t been in a comprehensive way,” Chief Executive Joe Moglia said. “We are going to be in that space now.”

Ameritrade said 61 percent of its $524.8 million revenue was asset-based in its second quarter.

The Omaha-based company said Tuesday it earned $141.1 million, or 23 cents per share. That’s down 18 percent from last year’s $172.8 million, or 30 cents per share, but the 2006 quarter included a one-time gain of 8 cents per share from the sale of the company’s investment in Knight Capital Group Inc.

Nearly 80 percent of Schwab’s $1.15 billion revenue came from asset-based fees during the quarter./AP

Beverage

Coke profits are up

ATLANTA — The Coca-Cola Co., the world’s largest beverage maker, said Tuesday its first-quarter profit jumped 14 percent on a double-digit rise in sales, despite continuing problems in its North America unit.

The results, announced before the market opened, beat Wall Street expectations.

The Atlanta-based company said it earned $1.26 billion, or 54 cents a share, for the three months ended March 30, compared with a profit of $1.11 billion, or 47 cents a share, for the same period a year ago.

Excluding one-time items, Coca-Cola said it earned $1.29 billion, or 56 cents a share, in the quarter. On that basis, analysts surveyed by Thomson Financial were expecting earnings of 53 cents a share.

Revenue in the January-March period rose 17 percent to $6.10 billion.

Coca-Cola said worldwide unit-case volume grew 6 percent in the quarter, the highest growth rate since 2002./AP

Earnings

Yahoo disappoints investors on earnings

SAN FRANCISCO — Yahoo Inc.’s first-quarter profit fell 11 percent, disappointing investors who have been betting that the Internet icon had regained its stride after stumbling through much of last year.

The Sunnyvale-based company said Tuesday that it earned $142.4 million, or 10 cents per share, during the first three months of the year. That compared with net income of $159.9 million, or 11 cents per share, at the same time last year.

The results were a penny below the average earnings estimate among analysts surveyed by Thomson Financial.

Revenue for the period rose 7 percent to $1.67 billion.

Yahoo’s revenue totaled $1.18 billion after subtracting the commissions that the company paid to its advertising partners. That figure fell about $25 million shy of the average projection, according to Thomson Financial./AP