Wells Fargo & Co. said its third-quarter profit rose 22%, with its volume of mortgage lending up more than 50% as homeowners refinanced their home loans.
The San Francisco-based bank said in its earnings report Friday that net income totaled $4.94 billion, or 88 cents per share, up from $4.06 billion, 72 cents a share, in the third quarter last year.
Revenue of $21.21 billion was up 8.1% from a year earlier but down slightly from the second quarter and less than the $21.47 billion that analysts had expected.
Wells Fargo shares fell $1.36 to $33.82 in early trading, a nearly 4% decline.
The low interest-rate environment reduced lending income, more than offsetting rising income from fees.
The difference between what Wells Fargo pays for deposits and earns on loans fell to 3.66%, from 3.91% in the second quarter and 3.84% a year earlier, a bigger drop than it had warned of last month. This net interest margin is squeezing banks as high-earning older loans are paid down and replaced with loans made at today's low rates.