The ghosts of financial scandals past continue to weigh down Wells Fargo's present and future.

The U.S. banking giant said Friday that its quarterly profit from July through September dropped nearly 19%, an announcement that sent Wells Fargo shares down 2.75% to a $53.69 close Friday. The San Francisco-based company is coping with a scandal over millions of unauthorized accounts and investigations of its mortgage practices.

Wells Fargo reported net income of $4.57 billion, or 84 cents per share, in the third quarter, compared with $5.64 billion, or $1.03 a share, a year earlier.

Results were hit by $1 billion in upcoming legal costs tied to investigations of the bank's mortgage-lending practices. The cost reduced earnings per share by 20 cents and are not tax-deductible, Wells Fargo said.

regulatory filing in June said the bank responded to federal and state investigators' requests for information about its handling of residential mortgages. 

Wells Fargo CEO Tim Sloan acknowledged the financial impact of the mortgage-related accrual in a statement released with the quarterly results. He said the bank achieved growth in average deposits, as well as in residential mortgages, credit cards and subscription finance.

In a note on the financial results Friday, investment banking and security brokerage firm Keefe, Bruyette & Woods said Wells Fargo performed better in cutting costs — but not enough to offset lower-than-expected loan growth and a lower margin.

"We are waiting for the quarter that Wells shows stronger momentum across the business, and this was not the quarter," KBW said.

Even the weather has been a problem for the bank. Wells Fargo said it budgeted $450 million in reserve coverage for potential losses from the recent hurricanes that battered Texas, Florida and Puerto Rico.

Although Wells Fargo has reported consistent earnings growth that typically outpaced its major bank peers, the company's financial performance was badly hobbled by the scandal over unauthorized accounts.

The scandal made national news and startled consumers in September 2016 as the bank was hit with $185 million in penalties. They were part of a settlement with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and Los Angeles legal officials. Investigators in those agencies said Wells Fargo secretly opened millions of deposit and credit card accounts that harmed its customers.

The federal and state investigators found that the bank boosted its sales figures by secretly opening the accounts — then funding them by transferring money from customers' authorized accounts without their knowledge or permission.

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A civil action filed by the federal and state officials said the rationale was simple. Wells Fargo "victimized their customers by using pernicious and often illegal sales tactics to maintain high levels of sales of their banking and financial products," the legal action charged.

The bank initially reviewed 93.5 million current and former customer accounts opened from May 2011 through mid-2015 and identified roughly 2.1 million potentially unauthorized accounts.

In August 2016, Wells Fargo said a newly completed independent review, which examined more than 165 million retail banking accounts opened from January 2009 through September 2016, found approximately 3.5 million potentially unauthorized accounts.

The scandal prompted the resignation of then-CEO John Stumpf. Working to move past the episode, Wells Fargo has shaken up its board of directors, ousted several top executives and changed its compensation system by removing sales incentives as a factor in salary hike decisions for many employees.

Even while addressing the phony accounts issue, Wells Fargo said in July it would make $80 million in payments to more than 570,000 auto loan customers who were charged for auto insurance without their knowledge. A federal lawsuit accused the bank of charging mortgage borrowers fees to extend locked-in interest rates when closings on the loans were delayed.

In comments during a conference call with financial analysts Friday, Sloan declined to forecast any end date for the financial impact caused by the problems. "In the long term, we are very confident we will continue to grow," he said.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc