SAN FRANCISCO -- Despite a weaker mortgage business, Wells Fargo powered to record quarterly profits of $5.89 billion, bolstered by an improved loan portfolio and reduced expenses, the bank reported Friday.

"We grew loans, deposits and increased cross-sell," Wells Fargo CEO John Stumpf said in a prepared release. "First quarter 2014 earnings were another record for our company."

Profits in the first quarter jumped 14 percent compared to last year's January-March period, when profits totaled $5.17 billion.

San Francisco-based Wells Fargo beat Wall Street's expectations. Analysts had predicted a profit of 97 cents a share. The results equated to $1.05 a share. Wells Fargo shares jumped 0.8 percent, or 37 cents, and closed at $48.08.

"Wells Fargo always finds a way to come through, " said Ken Thomas, a Miami-based independent bank analyst and operator of BranchLocation.com. "Betting against Wells Fargo is a bad idea."

Revenue totaled $20.6 billion, a 3.3 percent decrease from year ago revenue of $21.3 billion.

"We reduced expenses year-over-year and compared with fourth quarter of last year," Chief Financial Officer Timothy Sloan said in a prepared release.

Bank executives told analysts during a conference call they are optimistic about future economic growth, which should underpin earnings.


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"Consumers and businesses have continued to improve their financial conditions," Stumpf told analysts. "Households have reduced their leverage to the lowest level since 2001. Also businesses are well-positioned to hire and invest with ample supplies of cash."

The mortgage market is the primary sour spot for Wells, which is the nation's largest originator of home loans. Residential mortgage originations fell 28 percent year over year to $36 billion, while mortgage applications slipped nearly 8 percent to $60 billion.

"Wells Fargo looks like a strong story for the foreseeable quarters ahead," said Michael Yoshikami, president of Walnut Creek-based Destination Wealth Management. "Housing will again become very positive for Wells Fargo as long as there are not massive increases in mortgage rates."

Contact George Avalos at 408-859-5167. Follow at twitter.com/georgeavalos