But weaknesses in other areas are causing the stock to drop.
Revenue declined 1.7% as the bank's usually stalwart mortgage business slipped. Mortgage banking noninterest income was down 2.6% from a year earlier. Home lending originations declined 13% from the fourth quarter, while loan application income fell 8%. Total loans showed no improvement from the previous quarter.
Those numbers are driving WFC shares down 2% in early trading. Of course, part of that could be a pullback given that the stock was up 7% year-to-date entering the day. Only a spotless earnings report would likely have sparked the shares to rally higher.
Still, the slowdown in the bank's mortgage business is a legitimate concern. Well Fargo has been the dominant player in the mortgage industry, where it commands close to a 30% share. That's what the company hangs its hat on, and is a major reason it has remained profitable for 13 straight quarters.
The housing industry is supposed to be in full recovery mode , with housing starts on the rise and home prices accelerating faster than at any time since 2006. So a slippage in America's largest mortgage lending bank is a red flag.
For now, that concern is overshadowing yet another very profitable quarter at Wells Fargo.