Wells Fargo & Company (NYSE:WFC) reported its third quarter earnings this morning. The banking company beat on earnings, topping the consensus of $0.87 with earnings per share for the quarter of $0.88, however it missed on revenue by a hair. Wells Fargo’s revenue for the third quarter was $21.21 billion; analysts had predicted $21.47 billion.
According to the San Francisco-based company, record low interest rates provoked many homeowners to refinance. The phenomenon boosted the bank’s mortgage unit as a result, but unfortunately for investors, those gains were not felt as the lower interest rates also meant less income from its loans and other investments.
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In the end, this meant less third quarter revenue in spite of the bank increasing the volume of new mortgages issues significantly. Wells Fargo & Company (NYSE:WFC) wrote $139 billion in new mortgages during the third quarter, up from $131 billion in the second quarter this year and over the $89 billion it wrote in the same quarter last year.
“Through the efforts of our more than 265,000 team members, we’ve now achieved six consecutive quarters of record net income and EPS,” said Chairman and CEO John Stumpf. “By focusing on earning all of our customers’ business and providing outstanding service, we continued to generate growth across our diversified set of businesses. In the third quarter, core loans grew by $11.9 billion and we saw continued strength in our mortgage and deposit businesses. We remained diligent in managing costs and continued to have strong underlying credit performance as our loss mitigation efforts and the low interest rate environment helped improve affordability for our customers.”
Wells Fargo & Company (NYSE:WFC) Chief Financial Officer Tim Sloan added, “Our third quarter results demonstrated that the Company’s business model continues to serve shareholders well,” but investors appear mixed.
Shares in Wells Fargo & Company (NYSE:WFC) fell to a day low of $33.65 shortly after the report, before rising to a day high of $34.42 and settling somewhere between the two by mid-morning. The company currently trading at $34.04 with a 52-week range of $23.19 to $36.60.