Wells Fargo & Co., the largest U.S. home lender, reported record third-quarter profits that beat most analysts’ estimates as credit conditions improved, and said it’s not planning to halt foreclosures, according to Bloomberg.

Net income rose 3.1 percent to $3.34 billion, or 60 cents per share, from $3.24 billion, or 56 cents per share, in the same period a year earlier, the bank said today. Wells Fargo is based in San Francisco and has major offices in Central Iowa.

“Wells Fargo continues to be one of our top picks,” Oppenheimer & Co. bank analyst Christopher Kotowski wrote in a Sept. 20 report. “Near term, the continued improvement in asset quality will be the driver.”

Wells Fargo CEO John Stumpf is more than halfway through the integration of Wachovia Corp., the lender bought at the depths of the credit crisis, and is using the economic recovery to streamline businesses. In July, Wells Fargo said it slashed 3,800 jobs and closed its consumer-finance branch network.

Results included a 13 percent increase in net income from community banking and a 2 percent increase from wholesale banking, according to the bank. Net loan charge-offs dropped 9 percent from the second period, the bank said.

The bank ranks among the biggest mortgage servicers, which perform billing and collections, and is seeking to reassure investors it’s not among the companies that seized homes based on faulty documents. Attorneys general in all 50 states started a probe into foreclosure practices after court documents surfaced showing employees signed papers without ensuring their accuracy. That prompted Bank of America Corp., JPMorgan Chase & Co. and Ally Financial Inc. to suspend some foreclosures.

Bloomberg also reported that Morgan Stanley, owner of the world’s largest brokerage, reported an unexpected third-quarter loss after its worst trading quarter since 2008.

The loss of 7 cents a share, or profit of $131 million before preferred dividends, compared with earnings of $757 million, or 38 cents per share, in the third quarter of 2009, the New York-based company said today in a statement.