Wells Fargo & Co.'s (WFC) fourth-quarter earnings rose 21% as the banking giant posted stronger-than-expected revenue amid $850 million being released from reserves due to improved portfolio performance.

Shares slipped 1.3% to $32.06 premarket.

Chief Financial Officer Howard Atkins said the latest period included revenue growth in roughly two-thirds of its businesses and a "significant improvement" in credit quality.

The bottom lines at big banks, including Wells Fargo, have generally been bolstered by credit improvements rather than leaps in revenue. A number of lenders have had an improvement in business loan demand in the latest quarter, but challenges remain from mounting foreclosures, demands to repurchase bad mortgage loans and anticipated costs from new banking regulations.

The west coast-based bank reported for the third quarter rising demand for loans from a variety of borrowers, ranging from bigger businesses to students and credit-card borrowers. On Wednesday, it reported sequential growth in total loans of 2% including growth in its major categories.

Wells Fargo reported credit-loss provisions declined to $3 billion in the latest period from $5.91 billion a year earlier.

Wells Fargo, the fourth-largest U.S. bank by assets, reported a profit of $3.41 billion, or 61 cents a share, up from $2.82 billion, or 8 cents a share, a year earlier. Prior-year results were reduced by 47 cents for TARP-related preferred-stock dividends.

Revenue fell 5.3% to $21.5 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of 61 cents on revenue of $21 billion.

Net charge-offs, or loans lenders don't think are collectible, fell to 2.02% of average loans from 2.71% a year earlier and 2.14% in the third quarter. Nonperforming assets came in at 4.27% versus 3.12% and 4.59%, respectively.

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