SAN FRANCISCO ( TheStreet) - Wells Fargo's (WFC) continued credit quality improvement enabled the company to release $1 billion in reserves during the first quarter, boosting earnings and following the trend for the largest U.S. banks that had already reported earnings.
The company's net charge-offs -- loan losses less recoveries -- fell for the fifth-straight quarter to $3.2 billion, a 16% decline from the previous quarter and a 40% decline from a year earlier. The company's annualized ratio of net charge-offs to average loans was 1.73%, improving from 2.02% in the fourth quarter and 2.71% in the first quarter of 2010. With loan loss reserves covering 2.98% of total loans as of March 31, it appeared the company was well-positioned for further reserve releases in coming quarters, which would continue to boost earnings.
|Wells Fargo CEO John Stumpf|
Wells Fargo's reserve release was in line with the other "big four" U.S. banks, including
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