JPMorgan allocated $11.1 billion to litigation and legal costs during the first nine months of 2013, the most among the six lenders, according to quarterly reports banks filed with the Federal Reserve. That compared with $4.8 billion at Bank of America Corp. and $1.4 billion at Citigroup Inc.

The six banks’ combined litigation and legal expenses in the nine months rose 76 percent from a year earlier to $18.7 billion, higher than any annual amount since at least 2008. The costs increased at all the firms except Wells Fargo, where they fell 1.2 percent to $413 million, and Morgan Stanley, which reported a 14 percent decline to $211 million.

“Even into 2014, legal could be a drag for the whole industry,” said Pri de Silva, senior banking analyst at CreditSights Inc. in New York. “But it can’t be any worse than it was last year.”

Spokesmen for the six banks, which also include Goldman Sachs Group Inc., declined to comment.

Settlements don’t always hit a bank’s earnings in the same quarter. That’s because firms set aside reserves as costs become probable, sometimes years before cases are resolved.

Mortgage Claims

JPMorgan wasn’t alone in settling government claims in 2013. Citigroup and Wells Fargo were among six firms that paid almost $3.9 billion to resolve Federal Housing Finance Agency claims that they sold faulty mortgage bonds to U.S.-controlled Fannie Mae and Freddie Mac. Bank of America also agreed to an $11.7 billion package designed to resolve most mortgage disputes with Fannie Mae.

Last year was the best for U.S. financial stocks since 1997. The 24-company KBW Bank Index climbed 35 percent amid a broader rise in equities and an accelerating U.S. economy. The index climbed 0.7 percent at 10:02 a.m. The industry’s revenue from equity trading probably jumped 33 percent from a year earlier, Matt O’Connor, a New York-based analyst at Deutsche Bank AG, wrote in a Dec. 20 note.

Annual earnings at Bank of America, the nation’s second- largest lender, and Citigroup, the third-biggest, surged in 2013, according to analysts’ estimates.

Earnings Rebound