Despite rising interest rates Wells Fargo & Co (NYSE: WFC) just reported record fourth-quarter and full year profits for 2013.

Investors have been underwhelmed by the news though, with shares opening the day off by nearly 1.5 percent though they’re steadily making up that lost ground.

We continue to have a positive view as the thesis we presented in The Best Bank Inflation Hedge continues to hold true; its sheer size (it originated 1 in 5 US mortgages last year) creates massive economies of scale, its credit quality is improving and it has relatively limited legal liabilities related to mortgage misdeeds in the boom years.

While the bank is subject to several lawsuits related to bad mortgages, it has the lowest legal cost exposure of any of the major banks with expenses falling 1.2 percent in the first nine months of the year.

While rising interest rates will dent mortgage originations, effective cost controls and the diversity of Wells Fargo & Co’s will continue to drive growing earnings and it is now a buy up to 51.