JPMorgan Chase (NYSE:JPM) kicked off bank earnings season Tuesday with a narrow miss. The bank reported diluted earnings per share of $1.36, missing the consensus expectation of $1.38.

Legal charges
JPMorgan's miss was largely the result of one line item: legal expenses. The bank reported unexpectedly high companywide legal charges of $1.1 billion.

This could be the start of something bigger. On the quarterly conference call, CFO Marianne Lake noted that outsized expenses resulted from an investigation into the company's foreign-exchange trading. Reports circulated Tuesday that JPMorgan's top currency trader in London had left the company. JPMorgan took the charge as part of a potential settlement for foreign-exchange collusion involving other major banks.

But don't let that sway your opinion about JPMorgan's profitability. The bank's core business lines continue to perform spectacularly. The consumer and community banking segment posted return on equity of 19%, with deposits up 9% year over year. Expenses were held to just 56% of total revenue, in line with the preceding quarter and what you would expect from the best-of-breed banking businesses.

This performance is notable because the weakest unit within the community banking business -- mortgage banking -- is also one of the largest at nearly one-third of its equity base. With the refinance index down 30% from the year-ago period, JPMorgan's spot as the No. 2 mortgage originator isn't contributing to earnings like it did in 2013. 

Its investment bank also kept its No. 1 spot in fees, while showing evidence of a revival in trading revenue. FICC-related trading revenue was up 2% from the previous quarter. The fourth quarter could be even better: JPMorgan's fiscal third quarter ended before a resurgence of volatility in October.

Finally, the asset management division put up some of its best-ever numbers. Assets under management hit a new record of $1.7 trillion, an 11% improvement year over year. Loans were up 15.5% from the year-ago period, and there is room for additional growth. Its average deposits exceed average loans by nearly $50 billion.

The Final word
JPMorgan delivered with a 13% return on tangible common equity, while maintaining its trademark "fortress" balance sheet. Its loan loss reserves fell roughly $440 million from the second quarter, in line with declining nonperforming loans. Credit quality remains strong, with the bank forecasting that net charge-offs would come in under $5 billion for the full year, better than the previous guidance.

While news about a foreign-exchange investigation might have some fearing a second London Whale event, JPMorgan's third-quarter earnings reveal that the company remains a well-capitalized, profitable banking machine -- and the 2.6% dividend yield (according to S&P Capital IQ) is a nice bonus.