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What: Shares of JPMorgan Chase (NYSE:JPM), the largest bank in the United States, tumbled 13% in January, based on data from S&P Capital IQ, after delivering a fourth-quarter earnings report that failed to dazzle Wall Street and investors.

So what: For the quarter, JPMorgan Chase reported $4.9 billion in net income, or $1.19 per share, down from $5.3 billion, or $1.30 per share in Q4 2013. Revenue came in at $23.6 billion, down 2% year over year. Why the drop? JPMorgan found itself on the line for nearly $1 billion in after-tax legal charges and suffered from ongoing weakness in its mortgage and real estate business. In fact, mortgage banking net income fell to just $338 million from $593 million in Q4 2013.

Additionally, the provision for credit losses soared to $840 million from just $104 million the prior-year period, although it should be noted that consumer net charge-offs actually fell to 1.28% from 1.44% year over year.

There were also positive aspects to JPMorgan's report. Noninterest expense fell 1%, or $143 million to $15.4 billion, core loans rose a healthy 8% year over year, and its asset management unit continues to perform well, implying that JPMorgan Chase is doing a good job of luring in a clientele with higher net worth.

Source: Flickr user A Yee.  

Now what: This is shaping up as a pretty poor quarter for all banks, JPMorgan Chase included. Although its legal expenses were higher than Wall Street would have liked to have seen, we should also remember that these expenses are non-recurring. At some point soon the entire sector is going to put the mortgage crisis in the rear-view mirror, upon which their legal fees should drop considerably.

On the immediate horizon JPMorgan has a number of potential catalysts. The possibility of rising lending rates sometime in 2015 or 2016 should help improve its net interest income and pump up profits in its credit operations. It also doesn't hurt that the company is seeing a higher amount of deposits and loans. We often overlook that loans and deposits are the bread and butter of the banking industry, and as long as these metrics are moving higher, and JPMorgan Chase's credit quality at least stays level, it should see its results steadily improve.

At eight times forward earnings and with a yield of 3% I'd suggest that financially savvy investors, and income seekers, get JPMorgan on their radar.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.