This has been a banner year for Wells Fargo (NYSE:WFC), the nation's fourth largest bank by assets. Almost without exception, regardless of which metric you choose, it's not only improved over the previous year, but it's done so by a healthy margin. Suffice it to say, the financial crisis is now firmly in the California-based bank's rear-view mirror, and the road ahead is paved abundantly with profit.

2012: A banner year
There's really no other way to say this: Wells Fargo is essentially minting money at this point. Over the last 12 months, it recorded $17.9 billion in net income. To put that in perspective, that's more than all but three of the constituents on the Dow Jones Industrial Average (DJINDICES:^DJI) recorded over the same time period. Among others, it edges out Wal-Mart (NYSE:WMT), which made $16.6 billion, and it's more than triple the $5.5 billion that McDonald's (NYSE:MCD) earned. The only companies that outperform Wells Fargo in this regard are JPMorgan Chase (NYSE:JPM) and the nation's two largest oil conglomerates ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX).

Beyond the absolute figures, Wells Fargo is notching significant growth virtually across the board. With respect to its balance sheet, at the end of the third quarter, loans and deposits were respectively up 2.8% and 6.4% compared to the same quarter last year. And in terms of its income statement, year-to-date revenue and earnings were higher by 7.8% and 17.4%, respectively -- the latter figure is larger than the former because expenses grew at a considerably slower rate than revenue. As the company's chairman and chief executive officer, John Stumpf, reminded investors and analysts in the middle of October: "we've now achieved six consecutive quarters of record net income and [earnings per share]."

Much of Wells Fargo's success can be attributed to improvements in the housing market. While housing values remain well below their 2005-2006 peak, a growing chorus of evidence has emerged that suggests a recovery is well underway. Among other things, housing starts rose last month to their highest level in over four years, and sales of existing homes increased by 10.9% over the same month in 2011. So much evidence is accumulating, in fact, that our own Morgan Housel has predicted that it could ignite the next economic boom.

The reason this matters so much to Wells Fargo is because it's dominating the home-lending market at the same time that rivals like Bank of America (NYSE:BAC) and Citigroup (NYSE:C) are retreating to shore up their still-ailing balance sheets. In the most recent quarter, it originated a staggering $139 billion in home mortgages, up from an equally staggering $131 billion during the second quarter. The runner-up, JPMorgan Chase, underwrote a comparatively paltry $47 billion. During the first half of 2012, moreover, Wells Fargo originated an astounding one out of every three new mortgages in the entire country, up from one out of 10 in 2004. To put this in perspective, according to Stumpf, there are about 70 million homes in America, fifty million have a mortgage on them, and the average mortgage is $200,000. As a result, you're looking at a $10 trillion market.

Needless to say, this domination gives Wells Fargo a enormous advantage in the competition for a larger share of its customers' wallets. As Dick Bove, a bank analyst at Rochedale Securities put it: "Wells has always made the mortgage the key product for approaching the consumer. If you sell a household a mortgage, the household will ultimately bring you the student loan, home equity," and other loans.

Now, to be fair, 2012 hasn't been entirely problem-free. Among other things, the U.S. Department of Justice filed a lawsuit against Wells Fargo in the beginning of October alleging "reckless underwriting and fraudulent loan certification for thousands of FHA-insured loans that ultimately defaulted." In the latter half of the year, the Office of the Comptroller of the Currency, one of the banking industry's primary regulators, passed new accounting guidance that obliged Wells Fargo to increase it nonaccrual loans. And finally, shares in the bank were walloped last month after the lender reported that its net interest margin fell sequentially by 25 basis points during the third quarter. Importantly, however, all of these issues are mere sideshows to the bank's core money-making operations.

Making lemons out of lemonade
What does a bank do when it's faced with the worst financial crisis since the great depression? In Wells Fargo's case, the answer is to crush its competitors and sprint to the head of the pack. Indeed, the last few years have been a veritable godsend to the lender, and in recognition of this success, investors have made it the nation's most valuable bank measured by market capitalization. The question going forward, however, is whether it's shares are too dearly priced for the buy-and-hold investor.

To read why I think Wells Fargo may still be a buy at the current price, I encourage you to download our new in-depth report on the lender. In it, I cover the benefits and risks associated with holding Wells Fargo stock as well as the three things every investor in the company must watch. To access this report instantly, simply click here now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.