JPMorgan Chase (NYSE:JPM) reported fourth-quarter earnings this morning, the first big bank to do so. Overall, they were fantastic -- a $3.3 billion, or $0.74-per-share, profit on revenue of $25.2 billion. For full-year 2009, net income was $11.7 billion, or $2.26 per share. Not bad for one of the deepest recessions in decades.

But before declaring victory, I always like to dig into the earnings supplemental and find out exactly where the income came from. When broken out by segment, here's how it looked last quarter:


Q4 Net Income

Investment banking

$1.9 billion

Retail financial services

($399 million)

Card services

($306 million)

Commercial banking

$224 million

Treasury and securities services

$237 million

Asset management

$424 million

Corporate/private equity

$1.2 billion


$3.3 billion

Ah … just like every quarter of the past year, the money's flowing heavily in investment banking and corporate (essentially trading), while traditional commercial banking segments are still a mess.

To show where exactly the investment banking segment is pulling it in, we can dissect that segment further. Since JPMorgan doesn’t break out the net income, here is a breakdown of the $4.9 billion revenue that led to the $1.9 billion in investment banking net income:


Q4 Revenue


$611 million

Equity underwriting

$549 million

Debt underwriting

$732 million

Fixed-income markets

$2.7 billion

Equity markets

$971 million

Credit portfolio

($669 million)


$4.9 billion

Note how incredibly important the fixed-income markets line is.

Look at it this way: Investment banking accounts for 58% of net total income, and fixed-income accounts for 55% of investment banking revenue. Fixed-income revenue was down by almost half compared with the previous three quarters, but it's still a huge contributor to the bottom line.

Digging deeper into the credit quality of commercial banking, here's what you'll find:


Q4 2009

Q3 2009

Net charge-off rate



Allowance for losses/average loans



Nonperforming loans/average loans



And for credit cards …


Q4 2009

Q3 2009

30-days+ delinquent



90-days+ delinquent



Net charged-off rate



Bottom line
These results are good, but need an important caveat: Capital markets are extremely strong, while traditional lending remains quite bad. This is exactly why Goldman Sachs (NYSE:GS) has done extremely well, JPMorgan has done pretty well, and Citigroup (NYSE:C) and Bank of America (NYSE:BAC) have done not so well over the past year. Banking results have tended to track the segmental mix of a company's balance sheet more than they have the skill and expertise of that bank.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. The Fool has a disclosure policy.