NEW YORK - Wells Fargo says the economy is getting better: It sees signs of recovery in its loan business.

The big bank may be more of an exception than a leading indicator, however.

Breaking from the cautious even downbeat forecasts of rivals such as JPMorgan Chase & Co., Wells Fargo on Wednesday used words such as "favorable" and "confidence" about its future amid tentative signs that its loan defaults are close to a peak or have peaked. The company thinks the recession-weary consumer could be making a comeback.

The company is way ahead of other banks, although the CEO of Bank of America, which lost more than $5 billion last quarter, expressed mild optimism that sagging consumer sentiment may be turning around.

Many banking analysts aren't so sure. The reason: Ongoing problems including the deteriorating commercial real estate market and rising credit card defaults could still trip up a recovery. Although Wells' profit report was good news, the bank is ahead of its competitors by having already taken losses on many of its bad loans.

San Francisco-based Wells Fargo said it earned $394 million, or 8 cents a share, during the fourth quarter. That surprised analysts polled by Thomson Reuters, who were expecting a loss of 1 cent a share.

Adam Barkstrom, a managing director at Birmingham, Ala.-based Sterne Agee, shared the skepticism over the bank's forecast of an economic recovery, saying: "I think it's still too early to make that prediction."

He said the bank is still highly exposed to risky mortgage markets such as Florida and California.

Charlotte, N.C.-based Bank of America, meanwhile, said it lost $5.2 billion after paying preferred dividends, repaying government bailout funds and continuing losses from loans.