Wells Fargo & Co., the largest U.S. home lender, posted record fourth-quarter and full-year profit as expense cuts bolstered results.

Net income advanced 10 percent for the quarter to $5.61 billion, or $1 a share, from $5.09 billion, or 91 cents, a year earlier, the San Francisco-based company said today in a statement. The average estimate of 33 analysts surveyed by Bloomberg, excluding some items, was 98 cents a share. For the full year, profit rose 16 percent to $21.9 billion.

Chief Executive Officer John Stumpf, 60, is trimming staff and expenses as rising interest rates curtail demand for home refinancings. Wells Fargo had vowed to reduce overhead after expenses surged above its target in the previous three months.

"They have been taking a lot of costs out of the mortgage business, and we've seen the headlines about downsizing that business as refinancing activity has slowed," Jennifer Thompson, an analyst at Portales Partners LLC in New York, said before the results were announced.

The annual profit represents the fifth straight record year for the lender, which doubled its size with the 2008 purchase of Wachovia Corp. It was the first year since 2009 that profit surpassed New York-based JPMorgan Chase & Co., the biggest U.S. lender by assets, which earned $17.9 billion for all of 2013.

Wells Fargo, which ranks fourth, gained 33 percent in New York trading last year, trailing the 35 percent return for the 24-company KBW Bank Index. The stock closed at $45.56 yesterday in New York.

JPMorgan posted its results earlier today. Bank of America Corp. and Citigroup Inc., the second- and third-largest U.S. banks, are set to report later this week.

Wells Fargo, responsible for about 1 in 5 U.S. mortgages last year, has profited from Federal Reserve policies that lowered mortgage rates and sparked a refinancing wave. As rates have risen, applications have slowed and cut into originations. Rates on 30-year mortgages averaged 4.51 percent last week, up from 3.35 percent in early May, according to Freddie Mac.

Stumpf announced 5,300 job cuts in the third quarter, and another 925 in October. The impact began to take effect in the fourth quarter, according to a Nov. 7 presentation and may reduce costs by as much as $750 million annually, Deutsche Bank AG analysts wrote in a Jan. 3 report.

The bank is also facing fewer costs tied to litigation and legal expenses than its peers. Through the first nine months of 2013, those expenses fell 1.2 percent to $413 million, according to regulatory filings.

Legal settlements and other costs related to mortgage lending and sales should continue to decline, Stumpf said during a Dec. 10 investor conference. The bank began an internal ethics review this month that could last as long as two years, with plans examine standards for how employees should act and procedures for handling conflicts of interest across more than 80 business lines.

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