Wells Fargo & Company's community banking division has reported net income of $3.22bn for the third quarter of 2016, down 9% compared to $3.56bn a year ago.

The unit’s total revenue during the quarter was $12.38bn, down 4% from $12.93bn in the year ago period. The bank attributed the decline to lower gains on equity investments, partially offset by higher deferred compensation plan investment results (offset in employee benefits expense), higher gains on sales of debt securities, card fees, and deposit service charges.

Noninterest expense at the unit rose 3% to $6.95bn from $6.78bn during the same quarter in 2015. Provision for credit losses dropped to $651m from $668m a year earlier.                      

The community banking segment offers a range of diversified financial products and services for consumers and small businesses such as checking and savings accounts, credit and debit cards, and auto, student, and small business lending.

The unit also offers investment, insurance and trust services in 39 states and D.C., and mortgage and home equity loans in all 50 states and D.C. through its Regional Banking and Wells Fargo Home Lending business units.

Overall, the banking group reported net income of $5.64bn for the third quarter of 2016, down 2.7% from $5.80bn a year ago. 

Wells Fargo CFO John Shrewsberry said: “Wells Fargo reported solid results for the third quarter, reflecting the benefits of our diversified business model, our strong balance sheet and improved credit performance. Revenue increased linked quarter on higher net interest income, driven by growth in earning assets and increased investment in our securities portfolio, as well as solid mortgage banking results.

“While expenses increased from second quarter, credit results improved from the prior period led by strong performance in consumer real estate and improvements in our oil and gas portfolio. Capital remained strong and our net payout ratio5 was 61 percent in the quarter, as we returned $3.2 billion to shareholders through common stock dividends and net share repurchases.”