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3 Quick Takeaways from JPMorgan Q4 Earnings

JPMorgan Chase (NYSE: JPM) has just released fourth-quarter earnings. The Foolish upshot? There's little to complain about, much to celebrate, and one unusual number that will unexpectedly leave the superbank $10 million ahead -- much to the financial dismay of a certain silver-haired CEO.

1. Record net-profits three years in a row
JPMorgan is reporting fourth-quarter net income of $5.7 billion, up from $3.7 billion a year earlier, for a whopping year-over-year increase of 54%. From an earnings-per-share perspective, that's $1.39, up from $0.90 the year earlier. Total revenue was up as well, to $24.4 billion for the quarter: a 10% rise from the previous year.  What's it all down to?

2. Back to basics
The bank is reporting strong performance across all its lines of business:

  • Deposits are up 10% in retail and business banking.
  • Mortgage originations are up by 33%, for a total of $51.2 billion.
  • Credit-card sales volume is up by 9%.
  • Asset management is reporting its 15th consecutive quarter of positive net long-term client flows, with record loan balances of $80.2 billion.

And what about that mystery $10 million credit mentioned earlier?

3. Dimon gets docked
The Jamie will lose half of his $20 million pay package due to the unflattering results of an internal report on the London Whale, which was presented to the board on Wednesday. According to the report: "He could have better tested his reliance on what he was told ... [but] ...he responded forcefully"  once he was aware of the issue.

Final Foolish takeaway
And after an initial drop this morning, JPMorgan's stock is right about where it closed yesterday, $46.36. But while the market seems nonplussed, I don't think you should be.

Rejoice, Fools. JPMorgan is making money hand over fist. Most importantly, it's doing it the right way: building deposits, lending money, and managing assets. Sure, investment banking is still in the mix, but it's not driving profits.

The $10 million hit to Dimon's checking account is steep -- steeper than I thought it would be, but in the end, it's good he's being held accountable in a significant way. Dimon has doubled down on risk and shaken top management to the core since the London Whale, and I expect we won't be hearing too much about that pesky marine mammal after this. If investors got nothing else out of this fourth-quarter report, that would have been enough. 

While you're in the JPMorgan mood, take a minute and check out a new Motley Fool report on the big bank. You'll learn where the key opportunities for the super-bank lie, where its core growth will come from, and what the potential business risks are. You'll also get an analysis of its leadership team. For instant access click here now.

Read/Post Comments (2) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 16, 2013, at 1:07 PM, kafantaris wrote:

    We like Jamie, but still he should resign. And this is about the best time to do so.

  • Report this Comment On January 16, 2013, at 2:39 PM, XMFGrgurich wrote:

    Hmmm, interesting. I think he's still as effective a leader as ever, maybe even more so now.

    I would have liked to have seen him as Treasury Secretary myself.

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9/27/2016 1:39 PM
JPM $66.27 Up +0.49 +0.75%
JPMorgan Chase CAPS Rating: ****