Hot on the heels of announcements earlier this week from Bank of America (NYSE:BAC) and Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM) weighed in with an earnings report of its own yesterday -- and what a difference a year makes.

Before the morning bell, the firm announced second-quarter earnings of $0.28 per stub on net income of nearly $1 billion. That figure compares favorably with the one JP posted this time last year, when the firm lost more than half a billion dollars and shed $0.27 per share.

Making the announcement even more impressive is that JP took a pair of fat charges during the quarter. The biggest was a $1.9 billion hit meant to bolster the firm's legal reserves in the wake of its settlement of a class-action lawsuit related to the Enron debacle. The second, a smaller charge of $279 million, was connected to JP's merger with Bank One last July. Account for those costs -- or, rather, don't account for them -- and earnings per share come in at $0.66.

That number surpasses analyst expectations, but investors weren't much impressed, sending JP's shares down a fraction of a percent yesterday.


Well, for starters, owing to pre-announcement guidance about soft trading revenue, the number JP beat was a reduced figure. For finishers, with the bank's stock down some 7% on the year, investors don't appear to be convinced yet that the merger with Bank One is necessarily good news. My hypothesis: It might be that investors recall the company's 2000 consolidation with Chase, which took time to digest and contributed to a series of double-digit calendar-year losses between 2000 and 2002.

If you ask me, those were different times -- the market meltdown was in full swing, after all -- and JP came roaring back in 2003, posting a gain of 60%.

Could history repeat itself?

That's impossible to say, of course, but yesterday's announcement indicates that JP is in relatively sound fiscal shape. Its retail and credit card units were especially robust, reporting operating earnings of $980 million and $542 million, respectively.

Add a price-to-book ratio that's roughly half the industry average -- and discounted as well relative to less diversified rivals such as Merrill Lynch (NYSE:MER), UBS AG (NYSE:UBS), and Morgan Stanley (NYSE:MWD) -- and you've got a bank that might just be a bargain now.

Shannon Zimmerman heads up The Motley Fool's Champion Funds, the newsletter designed to beat the market -- and put the fun back into fund investing. Shannon doesn't own any of the securities mentioned above, and the Fool has a strictdisclosure policy.