Wells Fargo & Company (WFC) reported diluted earnings per common share of $4.10 for 2014, up 5% from $3.89 in 2013.

Full year net income was $23.1 billion, compared with $21.9 billion in 2013. For fourth quarter 2014, net income was $5.7 billion, or $1.02 per share, compared with $5.6 billion, or $1.00 per share, for fourth quarter 2013.

“Wells Fargo had another strong year in 2014, with continued strength in the fundamental drivers of long-term performance: growing customers, loans, deposits and capital," said Chairman and CEO John Stumpf. "As a result of this performance, we were able to return more capital to our shareholders during the year. Our success is the result of our 265,000 team members remaining focused on meeting the financial needs of our customers in the communities we serve. As the U.S. economy continues to build momentum, I'm optimistic that our diversified business model will continue to benefit all of our stakeholders in 2015.”

Revenue was $21.4 billion in the fourth quarter, up from $21.2 billion in third quarter 2014, driven by an increase in net interest income. Revenue sources remained balanced between spread and fee income and the sources of fee income were broad-based.

Mortgage banking in the fourth quarter saw originations of $44 billion, down from $48 billion in the third quarter, and applications of $66 billion, up from $64 billion in the third quarter.

The banking giant had a residential mortgage servicing portfolio of $1.8 trillion; ratio of MSRs to related loans serviced for others was 75 basis points, compared with 82 basis points in prior quarter

“Our performance in the fourth quarter was a great example of the benefit of our diversified business model and reflected a continuation of the solid results we generated all year. Compared with the prior quarter, we increased deposits and grew commercial and consumer loans while maintaining our risk and pricing discipline,” said Chief Financial Officer John Shrewsberry. “Revenue increased as net interest income benefited from loan growth and the prudent deployment of our liquidity.”

Net interest income in fourth quarter 2014 increased $239 million on a linked-quarter basis to $11.2 billion. The increase resulted primarily from loan growth, an increase in investment securities, higher trading assets and slightly higher income from variable sources, including purchased credit-impaired (PCI) loan resolutions and periodic dividends. This was partially offset by lower income from a reduction in loans held-for-sale and mortgages held-for-sale.

Net interest margin was 3.04%, down 2 basis points from third quarter 2014, predominantly due to an increase in the average balance of cash and short-term investments driven by strong customer deposit growth and higher average balances in liquidity-related funding. 

While the growth in these two categories had minimal impact to net interest income, the increased deposit balances diluted net interest margin by approximately 4 basis points and the liquidity actions diluted the margin by 2 basis points. The net impact of all other balance sheet growth and repricing resulted in 3 basis points of benefit, linked quarter due to a larger loan and investment portfolio. Higher interest income from variable sources benefited net interest margin by 1 basis point.

Noninterest income in the fourth quarter was $10.3 billion. On a linked-quarter basis, noninterest income was stable as increases in trust and investment fees, card fees, and other income, which included a $217 million gain related to the sale of an $8.3 billion portfolio of government guaranteed student loans, were offset by lower deposit service charges, mortgage banking fees, and market sensitive revenue, primarily equity gains.

Mortgage banking noninterest income was $1.5 billion, down $118 million from third quarter, primarily driven by a decrease in mortgage originations in the fourth quarter. Residential mortgage originations were $44 billion in the fourth quarter, down $4 billion linked quarter, due to the seasonal slowdown in the purchase market. The gain on sale margin was 1.8%, compared with 1.82% in third quarter.