Acquisitions, credit card securitizations, and branch sales helped Wachovia Corp. report a 13% gain in third-quarter net income on Wednesday, to $258 million.

The Winston-Salem, N.C., banking company had $5.3 million of merger-related expenses in the quarter. Earnings per share of $1.27 came in 1 cent above analysts' consensus prediction.

"In general, the numbers are O.K.," said George Bicher, a bank analyst at Deutsche Banc Alex. Brown. "Their basic franchise is fine, but there is a little concern about their reliance on nonrecurring revenue."

The $65.8 billion-asset company booked $9 million of gains from credit card securitizations and $8.5 million from branch sales. Wachovia, the country's 16th-largest banking company, securitized and sold $500 million of credit card receivables in late September.

"The credit card gain is off a portfolio that's not growing," Mr. Bicher said. "So you have to question the sustainability of that."

Without the special credit card and branch sale gains, "you could argue the real earnings per share number is closer to $1.23," Mr. Bicher said.

Though other analysts shared his concern, they noted that Wachovia regularly securitizes its credit card portfolio. "The credit card securitization is ongoing," though the amounts tend to be volatile, said Michael Ancell, a bank analyst at Edward Jones & Co. in St. Louis.

Net interest income increased 4.7% in the third quarter, to $617.1 million. "They adjusted to the Fed rate hikes with good loan growth," Mr. Ancell said. Average loans rose 7.1%, to $47 billion.

Wachovia's nonperforming loan total grew 48.3%, to $214.6 million. "The big concern for banks is credit quality," Mr. Ancell said. "Will more of this pop up next quarter? Only time will tell."

Wachovia increased its loan-loss reserves 1.1%, to $553.9 million, in the latest quarter. "That's the first time we've seen a material addition in a very long time," said Nancy Bush, an analyst at Ryan, Beck & Co. in Livingston, N.J. The last time Wachovia raised its reserves by more than 1% was in the fourth quarter of 1997.

"The question is, will these credits bite us in the future?" Ms. Bush said. Wachovia doesn't know the answer, she added.

The company reported a 39.4% increase in noninterest operating revenue, to $432.8 million. Fee income was boosted by the purchase of securities firm Interstate/Johnson Lane Inc. in April and the Sept. 1 acquisition of Offitbank Holdings, a money manager for wealthy individuals and families.

"Their fee income had a good quarter in almost every category," said Marni Pont O'Doherty, an analyst at Keefe, Bruyette & Woods Inc. "Mortgage and investment banking fees were down, but everything else was flat to up."

On the cost side, noninterest expenses, excluding merger-related charges, rose 19%, to $571.9 million, reflecting a higher expense base from the addition of recent acquisitions, the company said. "Core expenses were flat," Ms. O'Doherty said. "The quarter was driven by expense control and fee growth."

Wachovia shares fell $1.3125, to $79.875. That 1.6% drop compares with a 3.1% decline in the Standard & Poor's composite index of 29 large banks.

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