Wells Fargo recently announced that the company has cut nearly 500 mortgage employees for housing market-related changes.
Wells Fargo told DS News that the reason behind the massive amount of job cuts was "the result of continuing market changes, including improvements in delinquency and foreclosure rates and reduced demand for mortgage financing."
According to the financial institution, a grand total of 490 team members were affected across the country. The jobs that were cut were all in Wells Fargo's mortgage servicing department.
Wells Fargo said that all team members will receive pay and benefits until December 19, 2015.
"The decision to reduce our workforce is made with great concern for the team members who are affected," said Alfredo Padilla, a Wells Fargo spokesperson. "Wells Fargo is committed to retaining valued team members and, where possible, we will work to identify other opportunities within Wells Fargo."
Just last week, Wells Fargo reported a net income of $5.8 billion, or $1.05 per diluted common share, an increase of 1 percent year-over-year, according to the bank's 2015 third quarter earnings statement.
Wells Fargo's strong third quarter results was led by growth in loans, deposits, and capital, and positive credit quality.
The bank saw strong growth in loans and deposits, with total average loans of $895.1 billion, up 7 percent or $61.9 billion year-over-year. As of September 30, 2015, total loans were $903.2 billion. Quarter-end loans rose $64.4 billion to $903.2 billion, while total average deposits increased $71.8 billion to $1.2 trillion.
"Wells Fargo is committed to retaining valued team members and, where possible, we will work to identify other opportunities within Wells Fargo."—Alfredo Padilla, Wells Fargo spokesman
Revenue at Wells Fargo totaled $21.9 billion, an increase of three percent from $21.2 billion last year. Driven by growth n investment securities and loans, net interest income rose $187 million from the second quarter of 2015 to $11.5 billion in the current quarter. Meanwhile, the company's net interest margin was 2.96 percent, down 1 basis point from last quarter.
Mortgage banking noninterest income fell $116 million from the second quarter to $1.6 billion, Wells Fargo reported. In addition, residential mortgage originations were $55 billion in the third quarter, down $7 billion linked quarter. The production margin on residential held-for-sale mortgage originations was 1.88 percent, compared with 1.75 percent in the previous quarter. Net mortgage servicing rights (MSRs) results were $253 million, compared with $107 million in second quarter 2015.
John Stumpf, chairman and CEO of Wells Fargo, noted that the strong third quarter results "reflected the ability of our diversified business model to generate consistent financial performance in an uneven economic environment while continuing to meet our customers' financial needs."
"Compared with a year ago, we grew loans, deposits and capital, and returned more capital to shareholders through dividends and share buybacks," he said. "Our balance sheet and credit results remained strong and our 265,000 team members continue to focus on helping our customers succeed financially."