During Wells Fargo's (WFC) earnings call Friday, an analyst flattered the company's top executives by asserting: "You're clearly an earnings machine." No one quibbled with the characterization.

Once again, the company's quarterly net income billion had set a record, $5.9 billion, thanks largely to expense cuts, strong credit quality, and loan growth in areas other than the mortgage business. Earnings per share, at $1.05, easily outpaced analysts' consensus expectations of 96 cents.

Wells Fargo's profits, up 14% year over year, looked especially impressive in comparison to those of JPMorgan Chase (JPM), where earnings were down 19% from the same period a year earlier. JPMorgan's stock price was down 3% in midday trading, while Wells Fargo's was up 1%.

But attention immediately turned Friday to the question of whether Wells can continue to reach the higher bar it keeps setting for itself. To achieve its strong first-quarter results, the bank had to overcome a 3% decline in revenue from the same period a year earlier.

Timothy Sloan, Wells Fargo's chief financial officer, is moving into a new role with the company, and Mike Mayo, an analyst at CLSA, asked him whether the company can continue its hot streak. "What are you leaving for your successor?" Mayo asked.

Wells Fargo's answer is that it still has a lot of metaphorical levers to pull on its earnings machine. Here's a look at how the San Francisco bank hopes to continue its current roll.

Lending More

Outside of the mortgage origination business, where loan demand has fallen sharply, Wells has been experiencing solid loan growth.

Commercial and industrial loans grew by 7% in the first quarter compared with a year earlier, while credit card loans climbed by 8%, and automobile loans rose by 11%. Its loan growth of 4% was impressive considering the extent to which it had been riding the mortgage refinance boom.

Chief executive officer John Stumpf sounded upbeat about the company's lending prospects for the rest of 2014. "Households have reduced their leverage to the lowest level since 2001," he said. "Also, businesses are well-positioned to hire and invest with ample amounts of cash."

But in a follow-up interview, Sloan was asked what the biggest threat is to the continued improvement in earnings at Wells.

"Economic growth," he told American Banker. "It's the risks out there that we don't control. And the key is that we need to continue to have positive economic growth."

Expecting a Mortgage Rebound

Wells Fargo's residential mortgage originations tumbled to just $36 billion in the first quarter, down from $109 billion in the same period a year earlier.

Some of the lost income in originations was recouped with a $229 million increase in mortgage servicing income, as that business benefited from the fact that fewer homeowners fell behind on their payments. Still, Wells announced that 1,100 mortgage-related job cuts in the first quarter.

But Stumpf sounded upbeat about the rest of the year. He suggested that mortgage originations will begin to rise again, noting that the application pipeline at the end of March was $27 billion, up from $25 billion three months earlier.

"Our mortgage team is poised and ready to take advantage of a stronger selling season," he said.

Squeezing a Bit More from Reserve Releases

Several skeptical questions from analysts Friday involved the extent to which reserve releases have been powering Wells Fargo's earnings. In the first quarter, the firm released $500 million in reserves as it benefited from a drop in charged-off loans.

Nancy Bush of NAB Research asked whether delinquencies on commercial loans are currently about as low as they can be. Among commercial loans that are not guaranteed or insured by the government, Wells currently classifies only $95 million as 90 days or more past due, down from $265 million a year earlier.

Sloan responded by pointing out that the company's reserve release in the first quarter was smaller than it's been the two previous quarters.

"I don't know what the release is going to be in the second quarter. We do believe we're going to have a release," he said. "But it's a fair point. This is not going to go on forever."

Making Acquisitions

When an analyst asked the inevitable question Wells Fargo seems to get every quarter — Are you looking to make any acquisitions? — Stumpf sounded a bit warmer to that option than he has in the recent past.

More specifically, Stumpf raised the possibility that Wells Fargo might make an acquisition in wealth management.

"Is there a way to enhance wealth, brokerage, retirement? Possibly. That would be interesting to us," he said.

Stumpf also mentioned the credit card business, where Wells has been looking to expand. He noted that Wells recently announced a credit card partnership with department store chain Dillard's, and added: "Those are the kind of things that we like doing."

But then Stumpf added his standard disclaimer about acquisitions. "If we don't do anything," he said, "that's also fine."

Finding the Next CEO

A recent shuffling of top executives at Wells led to questions Friday about succession planning.

In May, Sloan will replace the retiring David Hoyt as head of wholesale banking. John Shrewsberry, the current head of Wells Fargo Securities, will become the company's new chief financial officer. The moves have been seen as a step in the company's efforts to prepare for Stumpf's eventual departure.

Stumpf is now 60 years old, and he said Friday that the company's board wants him to remain on the job through his 65th birthday. "We have a terrific team of leaders," he added.

When Sloan, 53, was asked whether he wants the CEO job, he demurred. "I hope the right person takes his place. Whether that's me or someone else, the board will decide," Sloan told American Banker.

"I think how we go about go about developing our management team is very important. We take it very seriously," he said. "You've got to have a deep bench."

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