Should banks tap their reserves for loan losses?

The CFO for JPMorgan says that banks are at "20-year lows for delinquencies".  Bank of America says that more borrowers are paying their loans on time, which allows the lenders to keep less money on hand to cover loan losses.  So, naturally they don't need as much money in reserve for loan losses and they can use some of that money to boost their earnings.  Howsomever, mortgage lending has slowed down, cutting into a key source of income growth for the banks.  Overall loan growth has been tepid, plus litigation costs are rising.  And the banks believe their leverage ratios are just fine.  When will banks accept reality rather than cook the books?