Wells Fargo said Friday that it is still seeing historically low loan delinquencies, but it made a decision to build up reserves as the economy slows, cutting into its third-quarter profits.

Wells Fargo shares were up more than 3%, as its results topped expectations.

Here’s how the bank did compared with Refinitiv estimates:

• Earnings per share: $1.30 adjusted vs. $1.09 expected
• Revenue: $19.51 billion vs. $18.78 billion expected

In the quarter ended Sept. 30, net income fell more than 30% to $3.53 billion, or 85 cents per share, from $5.12 billion, or $1.17 per share, during the same quarter a year ago.

After adjustments, Wells earned $1.30 per share, topping analysts estimates.

The company’s performance was significantly hurt by operating losses of $2 billion, or 45 cents per share, related to litigation, customer remediation, and regulatory matters, the company said in a statement.

Wells is operating under a series of consent orders tied to its 2016 fake accounts scandal, including one from the Fed that caps its asset growth.

In the latest period, the bank set aside $784 million for credit losses after reducing its provisions by $1.4 billion a year ago. The provision included a $385 million increase in the allowance for credit losses reflecting loan growth and a less favorable economic environment, the bank said.

“Wells Fargo is positioned well as we will continue to benefit from higher rates and ongoing disciplined expense management,” Chief Executive Charlie Scharf said, in a statement. “Both consumer and business customers remain in a strong financial condition, and we continue to see historically low delinquencies and high payment rates across our portfolios.”

As the most mortgage-dependent of the six biggest U.S. banks, Wells Fargo faced pressure as sales and refinancing activity has fallen steeply as the average rate for a 30-year mortgage has climbed to a 20-year high near 7%.

Wells Fargo said its home lending revenue fell 52% in the third quarter as the pace of mortgage originations slowed. Home lending originations were down 59% from the year-ago period to $21.5 billion.

It’s one of the impacts of the Federal Reserve’s campaign to fight inflation by aggressively raising rates. Wells Fargo, with its focus on retail and commercial banking, was widely expected to be one of the big beneficiaries of higher rates.

Net interest income increased 36%, primarily due to the impact of higher interest rates and higher loan balances, the bank said.

Wells’ better-than-expected revenue was supported by a 28% jump in banking on the bank of stronger treasury management results. Commercial real estate revenue was up 29%, reflecting higher loan balances and the impact of higher interest rates, the bank said.

Concerns that the Fed would inadvertently tip the economy into recession have grown this year, weighing heavily on the shares of banks. That’s because more borrowers would default on loans, from credit cards to mortgages to commercial lines of credit, in a recession.

Shares of Wells are down about 12% this year, faring better than the S&P 500.

Read the full earnings release.

— CNBC’s Hugh Son contributed reporting.