By MARCY GORDON, Associated Press
Wells Fargo, the biggest U.S. mortgage lender, said its second-quarter profit surged 20 percent after it reduced expenses.
Net income rose to $5.27 billion from $4.40 billion a year earlier. On a per-share basis, earnings were 98 cents, beating the 93 cents forecast by Wall Street.
Revenue edged up to $21.4 billion from $21.3 billion and exceeded Wall Street expectations.
Wells Fargo cut expenses in the second quarter by $142 million, to $12.3 billion.
The bank's stock price was up 76 cents, or 1.8 percent, at $42.65 before regular trading began Friday.
San Francisco-based Wells Fargo controls nearly 28 percent of the U.S. mortgage market, and that has helped bolster its earnings in recent quarters. It funded $112 billion worth of mortgages, down from $131 billion in the second quarter of 2012. With mortgage rates rising sharply in recent weeks, analysts are concerned about the potential impact on the bank's mortgage business. Much of its recent lending came from refinancing, which has been reduced by the recent spike in rates.
Wells Fargo, the fourth-largest U.S. bank by assets, was little known outside the Western U.S. before scooping up a teetering Wachovia in the depths of the financial crisis in 2008. The bank has turned a profit every quarter since 2009, the year it wrapped up its acquisition of Wachovia.
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