JPMorgan Chase Moves Higher After Earnings Beat

JPMorgan Chase (JPM) kicked off the fourth quarter earnings round for the big banks this morning with net earnings of $1.32 per share and $23.7 billion in revenue. Analysts had been expecting earnings of $1.27 per share and $22.89 billion in revenue. In the previous year’s fourth quarter, the bank reported earnings of $1.19 per share and $23.5 billion in revenue.

JPMorgan’s results by segment

JPMorgan said its Consumer and Business Banking saw net income increase by 12% year over year to $968 million, while net revenue for the segment rose 1% to $4.6 billion. The Mortgage Banking unit’s net income fell 21% to $266 million, while its net revenue declined 10% to $1.7 billion. The Card, Commerce Solutions and Auto division recorded a 20% increase in net income to $1.2 billion and a 10% increase in net revenue.

The Corporate and Investment Bank’s net income plunged 80% to $1.7 billion with lower legal expenses being the main driver. The unit’s net revenue fell 4% to $7.1 billion. The Commercial Banking division’s net income fell 21% to $550 million, while its net revenue fell 1% to $1.8 billion. JPMorgan’s Asset Management unit saw its net income fall 6% to $507 million, while its net revenue fell 5% to $3 billion.

The Corporate segment saw its net income plummet from $547 million in the fourth quarter of 2014 to $222 million in the fourth quarter of 2015. The segment’s net revenue skyrocketed from $247 million in the previous year to $651 million in 2015.

JPMorgan updates capital ratios

JPMorgan spent $99 million or 3 cents per share on legal natters during the fourth quarter, including $417 million in legal expenses, which was mostly offset by a benefit of $319 million in connection with a legal settlement.

Return on tangible common equity was 11%, while tangible book value per share climbed 8% to $48.13. The Basel III common equity Tier 1 Capital was $173 billion with an 11.6% ratio. At the end of the quarter, the balance sheet was down $220 billion. JPMorgan Chase had a 65% loans to deposits ratio, a 9% increase during the year. Average core loans climbed 16%. The bank’s credit card sales volume increased 6%, while merchant processing volume climbed 12%.