(Reuters) - Wells Fargo & Co <WFC.N> reported a 17 percent increase in second-quarter profit on strong mortgage banking income and improved credit quality.
The nation's fourth-biggest bank on Friday said net income was $4.6 billion, or 82 cents a share, compared with $3.9 billion, or 70 cents a share, a year earlier.
Analysts' average estimate was 81 cents a share, according to Thomson Reuters I/B/E/S.
Wells Fargo, the U.S. leader in home loans, posted mortgage banking income of $2.9 billion, up from $1.6 billion a year ago and up slightly from the first quarter.
The bank also benefited by releasing $400 million in reserves previously booked for loan losses.
"Wells Fargo's strong financial results this quarter again reflect the benefit of our diversified business model," Chief Executive John Stumpf said in a statement.
Revenue was $21.3 billion, up from $20.4 billion a year ago. Expenses totaled $12.4 billion, down slightly from a year earlier.
The bank previously said it expected expenses to fall to $11.25 billion by the fourth quarter as part of an efficiency push. But on Friday it said it would miss that target.
The bank's shares were down 5 cents at $32.80 in premarket trading.
Wells Fargo and JPMorgan Chase & Co <JPM.N> kicked off bank earnings season on Friday.
JPMorgan, the largest U.S. bank, reported net income of $4.96 billion, or $1.21 a share, including a $4.4 billion trading loss. That compared with $5.43 billion, or $1.27 a share, a year earlier. <ID: nL2E8ID1WY>
(Reporting By Rick Rothacker in Charlotte, North Carolina; editing by John Wallace)
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