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FRESH OUT OF COLLEGE 31 YEARS AGO, John Stumpf landed a job as a repo man in Minneapolis. He would show up at the bank at 10:00 a.m. and work the phones until 5:00 p.m. trying to track down borrowers whose auto loans were past due. Then, after a short break for dinner, he would change into casual clothes and head out to hunt down and seize cars, often long past midnight.

"When you collect bad loans," says Stumpf, "you sure learn a lot about making good ones."

That streetwise education has served Stumpf, 54, well. Perhaps nothing could have prepared him better for the challenges he faces today as CEO of Wells Fargo & Co. In late June, when he succeeded retail banking legend Richard Kovacevich, things were looking rosy enough. The bank was finishing a record second quarter that would produce $2.28 billion in net income, 9 percent better than a year earlier, on $9.9 billion in revenue, up 13 percent. The performance capped a sterling two-decade run of 17 percent compound annual growth in profit that coincided with Kovacevich's tenure -- first as vice chairman and, since 1993, as CEO of Norwest Corp., which bought San Francisco­based Wells in 1998 and took its name.

Stumpf had barely taken over when the nation's already wounded mortgage markets descended into the chaos that has cost three financial services CEOs -- Peter Wuffli of UBS, Stanley O'Neal of Merrill Lynch & Co. and Charles Prince of Citi -- their jobs and led to tens of billions of dollars of write-offs. An entire industry, it seems, must relearn lessons about making good loans and bad loans. Not Wells, though. It's bigger than any of these institutions in the mortgage business and more dependent on it. But it has come through the crisis relatively unscathed -- so far.

In the dismal third quarter just ended, as one bank after another tallied up its write-offs -- or losses -- Wells held steady. Net income, in fact, rose to a record $2.283 billion, up 4 percent on the preceding year's quarter, while revenues, at $9.85 billion, climbed 10 percent. Per-share earnings, at 68 cents, fell 2 cents short of the analyst consensus estimate.

It's a remarkable achievement. Wells Fargo, after all, is a dominant force in a market in near shambles. The fifth-biggest U.S. bank by assets, with $549 billion, Wells draws nearly one fifth of its income from mortgage and home equity: In 2006 it ranked second in originations in the U.S. and first in loans serviced, according to newsletter "Inside Mortgage Finance." In early November, brimming with confidence, Wells announced a plan to buy back up to 75 million shares, worth $2.3 billion at current prices. By contrast, consider the travails of Wells's nearest competitor, Countrywide Financial Corp. -- No. 1 in originations and No. 2 in servicing. It posted a loss of $1.2 billion in the third quarter, is laying off 12,000 employees and in August turned to Bank of America Corp. for an emergency $2 billion capital infusion.