(Bloomberg News) JPMorgan Chase & Co., the second- biggest U.S. bank by assets, said profit rose 67% to a second straight record as provisions for bad mortgages and credit-card loans tumbled.
First-quarter net income climbed to $5.56 billion, or $1.28 a share, from $3.33 billion, or 74 cents, in the same period a year earlier and from $4.83 billion, or $1.12, in the fourth quarter, the New York-based company said today in a statement. The results beat the average per-share estimate for adjusted earnings of $1.15 by 26 analysts surveyed by Bloomberg.
Provisions for credit losses dropped 83% to $1.17 billion as defaults and late payments declined. JPMorgan, led by Chief Executive Officer Jamie Dimon, posted a record $17.4 billion in earnings last year, in part by releasing about $7 billion of reserves against bad loans back into income as the U.S. economy improved. Dimon, 55, has said he doesn't consider reserve releases as "quality" earnings because they don't represent growth in the bank's businesses.
"This is setting the bar very high for the others, and this major beat of the estimate is going to be tough for others to follow," Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York, said in an interview with Tom Keene on Bloomberg Radio. JPMorgan is the first of the largest U.S. banks to report earnings.
JPMorgan rose 1.3% to $47.26 in New York trading at 8:31 a.m. The shares were up 10% this year through yesterday.
First-quarter revenue fell 8% to $25.8 billion. Fixed-income and equity markets revenue was $6.6 billion, compared with $6.9 billion a year earlier and $4 billion in the fourth quarter.
The retail bank posted a $208 million loss. Dimon said in the statement that the business had "good underlying performance" that was "more than offset by the extraordinarily high losses we still are bearing on mortgage-related issues. Unfortunately, these losses will continue for a while."
The company took a $1.1 billion charge against mortgage- servicing assets related to a pending consent agreement with regulators over foreclosure practices, Chief Financial Officer Doug Braunstein told reporters on a conference call. The accord may be announced later today, Dimon said.
Citigroup Inc., the third-biggest behind JPMorgan and Bank of America Corp., may report first-quarter profit of $2.78 billion when it releases results on April 18, the survey of analysts shows. Charlotte, North Carolina-based Bank of America may report a profit of $2.99 billion on April 15.