"Wells Fargo stock was down last year. [But] I don't think the intrinsic business value shrunk. In fact ... I thought it probably increased a touch."

Those were the words of Berkshire Hathaway (NYSE: BRK-A) Chairman Warren Buffett last month, just days before the banking crisis capitulated, sending Bear Stearns (NYSE: BSC) into JPMorgan's (NYSE: JPM) arms.

Sure enough, San Francisco-based Wells Fargo (NYSE: WFC) has performed remarkably well amid one of the nuttiest banking markets in decades. First-quarter net income came in at $2 billion, or $0.60 per share, down just slightly from the $2.2 billion, or $0.66 per share earned in the same period last year. Revenue climbed to $10.6 billion, up around 12% from the first quarter of 2007. Like others in the banking sector, it pulled down a $334 million windfall profit from Visa's (NYSE: V) recent $18 billion IPO.

Wells Fargo, the nation's second-largest mortgage lender, is reaping the benefits of its conservative lending practices, providing a shield from the perils of the housing market. CEO John Stumpf called the quarter "one of the best we've ever had for our mortgage business." During the quarter, mortgage applications totaling some $132 billion made their way to Wells Fargo, the largest surge since 2003, when the housing boom was still booming. All things considered, that's quite an amazing statistic.

Even though it has exposure to some of the same markets pummeling competitors like Washington Mutual (NYSE: WM) and Bank of America (NYSE: BAC), Wells Fargo's disciplined strategy is worth its weight in gold. The bank's loan-to-value ratio -- which measures a borrower's equity cushion -- stood at around 80% (the lower the better from a risk perspective).

Despite the respectable performance, Wells Fargo wrote off $1.5 billion in bad loans, and set aside an additional $500 million to cover expected future losses. Its total allowance for credit-related losses now stands at $2 billion. 

With a solid 4.5% dividend yield, conservative balance sheet, proven business model, and Warren Buffett's backing, Wells Fargo will likely be one of the few shining stars to come out of the credit fiasco with its head held high.

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