Wells Fargo posts $4.1 billion profit, mortgage banking income rises
Wells Fargo Co. (WFC) posted a third-quarter profit of $4.1 billion, or 72 cents per share, on revenue of $19.6 billion as non-interest income on mortgage banking rose $214 million from the second quarter. That profit is up 21% from last year and 3% from the previous quarter. Comparatively, the bank posted a profit of $3.3 billion, or 60 cents per share, in the third quarter of 2010 and earnings of $3.9 billion, or 70 cents per share, in the most recent second quarter. In the mortgage banking segment, the Wells Fargo's non-interest income rose to $1.8 billion from the second quarter with the lender holding $89 billion in loan originations compared to $64 billion in the second quarter. The company's mortgage banking non-interest income in the third quarter included a $390 million provision on loan repurchase losses, up from $242 million last quarter. Meanwhile, net mortgage servicing rights saw a $607 million gain compared to a $374 million gain in the second quarter. Wells Fargo said "the ratio of MSRs to related loans serviced for others was 74 basis points and the average note rate on the servicing portfolio was 5.21%." The company said its unclosed pipeline at Sept. 30 was $84 billion, up from $51 billion at June 30. During the period, the company's credit quality improved with total net loan charge-offs — or debt declared as unlikely to be repaid — falling by $227 million from the previous quarter to $2.6 billion from $1.5 billion a year ago. Write to Kerri Panchuk.