Financial services giant Wells Fargo, in reporting its first-quarter 2023 earnings, said that it added $643M during the quarter to its reserves to cover potential loan losses.

Specifically, the bank said the total reflected an increase in reserves for commercial real estate loans, especially loans associated with office assets. Wells Fargo also increased reserves to cover credit card and auto loans.

The bank had $725M in nonaccrual office loans at the end of Q1, up from $186M at the end of 2022. A nonaccrual loan means no payment has been made by the borrower for 90 days or more. Half of the bank's total nonaccural CRE loans are associated with office assets, up from 25% a year ago.

Some bad loans held by the bank are associated with well-known office properties.

Early in April, Wells Fargo filed suit against Michael Silberberg, founder and CEO of Berkley Properties, alleging he failed to meet his obligations as the guarantor of a loan on the Civic Opera Building in Downtown Chicago. The suit was the latest move in a wider foreclosure action involving the building that has been going on since 2021.

Overall, the San Francisco-based bank reported a strong quarter, with earnings of nearly $5B, up 32% from a year earlier.

Net interest income swelled 45% from a year ago, spurred along by higher interest rates. Noninterest income for the bank, by contrast, dropped 13%.

Nervous depositors didn't seem to be fleeing to the safety of the bank, which is the fourth-largest U.S. bank, despite the outflow of deposits that precipitated the failures of Silicon Valley Bank and Signature Bank in March. Average deposits at Wells Fargo dropped $24B, or 2%, quarter-over-quarter.

The bank's stock was up slightly on Friday, by 0.05%. Over the last year, it has lost about 14.3% of its value.