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.
Fool contributor John Grgurich owns no shares of any of the companies mentioned in this column. Follow John's dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich. The Motley Fool owns shares of JPMorgan Chase.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a scintillating disclosure policy.