Updated from 9:17 a.m. ESTWachovia Bank ( WB) on Tuesday reported fourth-quarter earnings nearly 98% lower than the year-ago period, as the bank suffered massive credit-related hits. The Charlotte, N.C.-based bank posted a net profit of $51 million, or 3 cents a share, vs. $2.30 billion, or $1.20 a share, in the fourth quarter of last year. Earnings were significantly impacted by the bank's decision to increase its provision for credit losses more than seven times, to $1.50 billion, from $206 million in the year ago period. Wachovia said it took the provision to cover expected losses due to "significant deterioration" in the housing market and related commercial real estate portfolios, as well as higher losses expected losses tied to consumer real estate and auto loan portfolios. Much of that hit is due to the bank's 2006 acquisition of option adjustable-rate mortgage lender Golden West. "We took active and prudent steps in the second half of the year to deal with the market disruption and credit deterioration, and we believe this allows us to move forward from a position of strength despite the uncertain economic environment," Chairman and CEO Ken Thompson said in a company statement.