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Wells Fargo (WFC 1.36%) reaffirmed its position atop the U.S. banking industry with record third-quarter earnings per share of $1.05, compared to the consensus estimate among analysts of $1.04 per share.

"Wells Fargo's 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," said Chairman and CEO John Stumpf. "Compared with a year ago, we grew loans, deposits and capital, and returned more capital to shareholders through dividends and share buybacks"

Although low interest rates continue to plague the entire bank industry, the increase in Wells Fargo's loan book combined with its growing hoard of inexpensive deposits, allowed the nation's fourth-biggest bank by assets to boost net interest income on both a sequential and year-over-year basis. For the three months ended Sept. 30, Wells Fargo generated $11.5 billion in net revenue from its $1.6 trillion asset portfolio. The same figures from the second quarter of 2015 and the third quarter of 2014 were $11.3 billion and $10.9 billion, respectively.

Higher noninterest income also contributed to Wells Fargo's performance last quarter. Compared to the same period last year, the California-based bank generated more money from account service charges, trust and investment fees, and fees from credit and debit cards, among other things.

All told, Wells Fargo's total revenue came in at $21.9 billion, compared to $21.2 billion in the same period of 2014. Analysts had expected the bank to post a $21.8 billion top line.

Lower expenses also played a role in Wells Fargo's solid performance. Despite increasing its loan book and total asset base, the bank's operating expenses declined slightly compared to the second quarter, though they were higher than the year-ago period. Third-quarter noninterest expenses added up to $12.4 billion, versus $12.5 billion in the second quarter and 12.3 billion in the third quarter of 2014.

By contrast, the amount of money that Wells Fargo sets aside each quarter in anticipation of future loan losses grew considerably in the three months ended Sept. 30. Its provisions for credit losses roughly doubled to $703 million in the quarter, relative to $300 million in the prior quarter and $368 million in the year-ago period.

Although this may seems ominous, there's no reason to be concerned about the quality of Wells Fargo's loan portfolio. This is because the lower figures in the previous periods were spurred by the release of previously set-aside provisions. As Chief Risk Officer Mike Loughlin explained:

Credit performance remained strong during the quarter. The quarterly loss rate (annualized) remained low at 0.31 percent and nonperforming assets declined by $1.1 billion, or 30 percent (annualized), from the prior quarter driven by lower nonaccrual loans. The allowance for credit losses in the third quarter remained flat (no reserve release) as continued credit quality improvements in the residential real estate portfolio were offset by higher commercial reserves reflecting deterioration in the energy sector. Future allowance levels may increase or decrease based on a variety of factors, including loan growth, portfolio performance and general economic conditions.

In sum, it was yet another strong performance for Wells Fargo. Shareholders in the bank should be pleased with its third-quarter results and can remain confident in its stock.