Wells Fargo's profit rises, but mortgage banking income falls
Wells Fargo the biggest U.S. mortgage lender, reported a 13 percent rise in third-quarter profit, but its mortgage banking income fell sharply as the refinancing boom began to fade.
Net income applicable to common shareholders rose to $5.32 billion, or 99 cents per share, from $4.72 billion, or 88 cents per share, a year earlier.
Analysts on average had estimated that Wells Fargo would earn 97 cents per share, according to Thomson Reuters I/B/E/S.
Wells Fargo made $80 billion in home loans, down from $139 billion a year earlier.
Mortgage banking income fell 43 percent to $1.61 billion due to fewer loans as well as diminished gains on selling mortgages to investors.
After the earnings announcement, the company's shares initially rose by about a percent in pre-market trading, but then retreated. (Click here to track the company's shares following the report.)
Higher revenues from some of Wells Fargo's other businesses were able to offset some of the decline in mortgage banking. Trust and investment fees rose to $3.28 billion from $2.95 billion a year earlier.
The bank released $900 million from its loan loss reserves, the largest release since the second quarter of 2011.
Earlier on Friday, JPMorgan Chase, the biggest U.S. bank by assets, reported a rare quarterly loss after incurring $9.2 billion in legal expenses.
Wells Fargo shares were down 1.5 percent at $40.81 in trading before the bell on Friday. They closed at $41.11 on Thursday on the New York Stock Exchange.