But the strategy also makes Wells Fargo a target for lawmakers, regulators and customers who blame risky mortgage lending for the 2008 global financial crisis. The latest example came Monday, when Wells Fargo and nine other banks agreed to spend a combined $8.5 billion to settle the government's charges that they had wrongfully foreclosed on some homeowners. Wells Fargo said it would pay $766 million and set aside an extra $1.2 billion for "foreclosure prevention actions," such as modifying mortgages for struggling homeowners.
No one knows what other regulatory fines could be waiting for the banking industry. For some analysts, that makes the industry's future earnings a wild card.
When Jefferies analyst Ken Usdin asked on a conference call how much more the bank might have to spend on buying back soured mortgages from investors, CFO Sloan replied: "The biggest mistake anybody in this industry can make is predict when that is going to end."
When Deutsche Bank analyst Matt O'Connor asked if there were "other skeletons in the closet" in the mortgage unit, CEO Stumpf said he couldn't predict what might come up. But, he added: "I can tell you I am pleased that we are this far through the process and we have gotten a lot of big things behind us."
In an interview, Sloan acknowledged that legal and regulatory fees are unpredictable. He pointed to the bank's record earnings as proof that it could handle them.
"What we need to do is say, 'Look, we understand there are headwinds, some of them are legal and regulatory, how do we deal with them, how do we grow despite those?'" Sloan told The Associated Press. "Other institutions may not be able to address those as well as we can."
For the quarter, revenue rose 7 percent, to $21.9 billion, beating the $21.3 billion expected by analysts polled by FactSet. Wells Fargo increased its business in credit cards, wealth management and other units, and charged more in fees.
The bank earned $4.9 billion after paying dividends on preferred stock, up 25 percent from $3.9 billion a year ago. That amounted to 91 cents per share, more than the 87 cents per share analysts were expecting, and up from 73 cents last year. Revenue and earnings were also up for the full year.