Wells Fargo earnings call

Wells Fargo & Co. /quotes/zigman/239557 /quotes/nls/wfreported higher earnings, at a sum that almost certainly will make it the most profitable U.S. bank of the third quarter — but investors were not impressed
The bank said it made $5.32 billion for the quarter, up 13% from a year ago
But revenue fell 3%, hurt as the mortgage business ground slower, and shares were down in pre-market trading
Wells Fargo last month knocked out a mortgage-repurchase settlement with Freddie Mac, which had demanded that Wells Fargo buy back some of the mortgage-backed investments it had sold to Freddie Mac in the run-up to the financial crisis
Sloan says that the bank had already set aside enough money for the Freddie Mac settlement in previous quarters. In the third quarter, the bank set aside an extra $28 million for mortgage-repurchase losses, a notable improvement after setting aside an extra $462 million a year ago 
Sloan says Wells Fargo remains committed to the mortgage refinancing business, noting how important it is for customers
"We've managed through refi cycles in the past."
Sloan says he expects continued pressure on the net interest margin, which basically measures the profit the bank makes as it charges more for the loans it hands out than it pays on the deposits it accepts
The margin tends to improve when interest rates are higher, and the country's benchmark interest rate, the 10-year Treasury note, rose for most of the quarter
Wells Fargo's net interest margin, however, fell to 3.38% from 3.66% a year ago
That was because the bank continued to bring in deposits, which were up 5% over the year to $940 billion
But the bank made money by growing loans -- for nine consecutive quarters, as Sloan points out
It also cut expenses, including setting aside less money for legal reserves and bonuses, and it laid off employees in mortgage-related businesses, which will save money in the long run
Revenue in the wealth management unit was up
And unlike most of its peers, Wells Fargo has been adding jobs over the bulk of the past couple of years
The number of employees rose about 3,600, or 1%, to 270,600
CEO John Stumpf kicks off the earnings call
The bank recorded record earnings for the third quarter but revenue fell
That was partly because higher interest rates are crimping demand for mortgage refinancing, which carried results a year ago
Mortgage originations at Wells Fargo, the country's biggest mortgage lender, were $80 billion, down 42% from a year ago
Mortgage applications were $87 billion, down 54% from a year ago
CFO Tim Sloan says the mortgage business is in a "transitional period."