Countrywide’s Profit More Than Doubles

Mortgage lender Countrywide Financial Corp. said its first-quarter earnings more than doubled, boosted by the accelerated growth of its banking division.

The company raised its profit forecast for the year.

Net income increased to $691 million, or $2.22 a share, from $326.3 million, or $1.22, a year earlier, Calabasas-based Countrywide said.

The average estimate of 18 analysts surveyed by Thomson First Call was $1.75. The results reflected a 3-for-2 stock split completed in April.

Countrywide’s bank assets, which include savings accounts, jumped 166% to $23.7 billion last quarter and may gain an additional 48% by the end of the year. Countrywide is offering more banking services amid expectations that demand for mortgages and refinancings will slow if the expanding U.S. economy leads the Federal Reserve to raise interest rates.

Countrywide Bank’s earnings grew 232% during the recent quarter as the company added seven banking centers. It now operates 38 locations.

“Our goal is to reach approximately $35 billion [in bank assets] by the end of the year and $120 billion by 2008,” said Angelo Mozilo, Countrywide’s chairman and chief executive.

The company boosted its forecast for per-share earnings this year to $7 to $8.25 from $6 to $8. The average estimate of 19 analysts surveyed by Thomson First Call was $7.18.

Shares of Countrywide rose $1.98 on Wednesday to $57.17 on the New York Stock Exchange.

The company loaned $32 billion for home purchases last quarter, a 32% gain from a year earlier. The loan servicing portfolio, or mortgages administered for a fee, rose 36% to $682.8 billion.

Profit margins were bolstered as Countrywide administered more sub-prime and home equity loans.