Wells Fargo said second-quarter net income was little changed as rising rates have eroded Wells Fargo's dominance in the mortgage market.
Net income fell to $5.72 billion, or $1.03 a share, from $5.73 billion, or $1.01, a year earlier, the San Francisco-based bank said Tuesday in a statement. The figures matched analysts' estimates and the stock fell in early trading.
Higher rates have curtailed refinancings, traditionally an area of strength for Wells Fargo because of its industry-leading servicing portfolio. Wells Fargo made about 13% of U.S. home loans in the first quarter, down from 28% three years ago.
"They get such an outsize share" of refinancings, Jason Goldberg, an analyst at Barclays, said before the results were announced. "So when refi comes down, their share is going to go down."
The average rate on a 30-year fixed-rate mortgage jumped to 4.27% during the week ended June 26 from 3.74% at the beginning of April, according to bankrate.com.
Home lenders originated $378 billion of mortgages in the second quarter, a 21% increase over the preceding period and a 27% gain from a year earlier, according to a June 18 forecast from the Mortgage Bankers Association. Wells Fargo entered the quarter with $44 billion of in-process loan applications, the most in seven quarters.
JPMorgan Chase reported earnings earlier on Tuesday. Bank of America and Citigroup will report later this week.