Wells Fargo CEO Charles Scharf stated Tuesday that the company is starting to see borrower defaults rise from their lows during the pandemic, as conditions improve.

At the Goldman Sachs U.S. Financial Services Conference, he stated that “we would say the top has been reached.”

Scharf stated that the company is beginning to notice “very, very minor amounts of delinquency rises,” and described the shift as “nothing significant, but slightly different from what we would have seen in the last quarter.”

The industry was prepared last year for the possibility of defaults due to the pandemic. However, stimulus programs and government aid prevented the losses. The U.S. Bank Charge-Off and Delinquency Rates are at their lowest level in decades, according to dataTracked by the Federal Reserve

There are many banks this year including Wells Fargo released billions of dollars from loan loss reservesAfter higher than expected credit costs, profit increases.

“These cushions that have been built in with all this liquidity and demand for labor … will continue to provide a cushion for a period of time. Scharf stated that normalization is needed as soon as we enter ’22. This will be more toward the end of the year than the beginning. Scharf stated that the charge-offs will not remain at their current level.

—CNBC’s Hugh Son contributed to this report.