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Wells Fargo Looks to Stay Ahead of the Curve

Stocks in this article: JPM C WFC BAC

NEW YORK ( TheStreet) -- With 2013 stock gains of over 36% -- besting both JPMorgan Chase (JPM) and Citigroup (C) -- it should surprise no one that Wells Fargo (WFC) is one of the best performing large banks in the country, if not the best.

Despite what has been one of the toughest interest rate environments within the banking industry, Wells Fargo's management showed incredible fiscal awareness throughout all of 2013. The impressive boost in the company's bottom line occurred amid some slight increases in expenses. No small accomplishment, given the highly competitive nature of this sector.

[Read: Morici: Only 74,000 Jobs Added in December; Growth's Slipping]

Equally impressive has been the bank's success at growing loan balances, particularly given the sluggishness that JPMorgan and Bank of America (BAC) experienced in mortgage lending and overall loan demand. It certainly seems as if management's decision to expand its credit card business -- an effort to double its loan volume -- paid off handsomely. I had my doubts. They proved me wrong.

On Tuesday, Wells Fargo will announce fourth-quarter results. The Street will be looking for 98 cents in earnings per share on revenue of $20.66 billion, which would represent a year-over-year revenue decline of close to 6%. Given the struggles the industry has experienced with loan growth and weak home loan originations, revenue decline alone does not come close to telling the real story here.

Take the bank's third quarter results: Although revenue fell close to 4% year over year, Wells Fargo still grew profits by 13% while posting a 2-cent beat on a per-share basis. And this is even with a 42% decline in home loan originations as a result of the poor interest rate environment.

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