Wells Fargo & Co.'s first-quarter earnings fell 16% as credit-loss provisions rose, but the giant bank said credit "has turned the corner."

"We're encouraged by signs of improvement in the credit cycle, and by the savings and cross sell opportunities we're realizing as more Wachovia bank stores convert to Wells Fargo," said Chairman and Chief Executive John Stumpf.

Shares declined 1.3% to $33.24 premarket. As of Tuesday's close, the stock had risen 79% in the past year.

Wells Fargo's recent earnings have been strong, but the bank still has to prove that it is sustainable. The company has seen ever-higher loan problems but has also spun more than enough profits to cover those costs. Competing giant banks, including JPMorgan & Chase Co. and Citigroup Inc., in the past week have reported improved first-quarter results as the economy heals.

Wells Fargo reported a profit of $2.55 billion, or 45 cents a share, down from $3.05 billion, or 56 cents, a year earlier. The most-recent quarter included $247 million of integration expenses, while the year-earlier quarter included $516 million of investment write-downs.

Revenue rose 2% to $21.45 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 42 cents on $21.71 billion in revenue.

Credit-loss provisions were $5.33 billion, up from $4.56 billion a year earlier but down from $5.91 billion in the prior quarter. Net charge-offs were 2.71% of average loans, compared with 1.54% and 2.71%, respectively. Nonperforming assets increased to 3.49% from 1.25% and 3.12%.

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