Biggest Real Estate Banks See Improvement in Loan Quality.(Wells Fargo, Washington Mutual, Citigroup and J.P. Morgan Chase )

For the most part, banks saw their nonperforming assets decline in the fourth quarter, according to quarterly financial results that have been released.

Some of the biggest real estate lenders - Wells Fargo, Washington Mutual, Citigroup and J.P. Morgan Chase - all reported declines in nonperforming assets during the fourth quarter.

Wells Fargo said that nonperforming assets declined by $57 million in the fourth quarter, improving to 0.66% of total assets, or $1.66 billion. That's down from 0.88%, or $1.72 billion on a dollar-volume basis, a year earlier.

Net charge-offs as a percentage of average loans declined to 0.78% from 0.94% in the prior year, Wells Fargo reported.

However, Wells Fargo reported that net charge-offs increased last year from the 2002 level and in the fourth quarter. Wells reported $465 million of net charge-offs during the fourth quarter, compared to $424 million in the fourth quarter of 2002.

For the full year, Wells had $1.72 billion of charge-offs, up from $1.68 billion of credit losses in 2002.

In the company's earnings release for the fourth quarter, chief credit officer Dave Munio said that credit quality continued to improve in the fourth quarter.