By Christina Rexrode 

Mortgage banking is making up a much smaller piece of Wells Fargo & Co.'s fee pie.

Mortgage production accounted for 6%, or $572 million, of the bank's overall noninterest income in the first quarter, Chief Financial Officer John Shrewsberry noted in a presentation to investors Tuesday. In the same period a year ago, mortgage production accounted for 23% of fee income, or about $2.48 billion.

Over the same period, trust and investment fees expanded, as did the catchall "other" fee category, which includes brokerage advisory fees and card fees.

Like other banks, Wells Fargo is funding far fewer mortgages than it did a year ago, as interest-rate increases tamp down on homeowners' desire to refinance.

But the question about how to handle the change is especially pressing at Wells Fargo, which is the country's biggest mortgage lender.

Mr. Shrewsberry said investors were right to have asked two years ago what Wells Fargo would do when the refinancing boom fizzled. He said Tuesday he expects the mortgage business to stabilize--but, he added, bank executives "remain excited about" other lines of fee-earning business.

Mr. Shrewsberry was named to the CFO post last month but officially started the job Thursday. This marked his first public appearance as CFO.

Wells Fargo also increased its target payout ratio, a measure tied to the amount of dividends and share buybacks the bank is able to return to shareholders, to a range of 55% to 75%, up from 50% to 65% before.

The net payout ratio reflects the amount of value being returned to shareholders through dividends and buybacks as a percentage of the firm's profits. The bank had set its earlier target two years ago.

In March, Wells Fargo got permission from the Federal Reserve to raise its dividend to 35 cents from 30 cents per quarter, and to expand its share-buyback program. The bank's net payout ratio was 34% in 2013, up from 14% in 2011. The bank left other goals unchanged, including for return on equity and efficiency ratio.

Write to Christina Rexrode at cristina.rexrode@wsj.com

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