Bank results fail to impress Wall Street

JPMorgan's and Wells Fargo's shares slip despite record profits.

By Jonathan Berr Oct 12, 2012 11:46AM
Image: Stock market copyright Zurbar, age fotostockJPMorgan (JPM) and Wells Fargo (WFC) reported record quarterly results Friday as an improved real-estate market offset weaknesses in other businesses. The shares of both companies, however, remained under pressure because of government investigations that could prove costly.

Net income at JPMorgan
surged 34% to $4.3 billion, or $1.40 per share. Revenue jumped 6% to $25.9 billion. 
Wells Fargo earned $4.94 billion, or 88 cents a share, up 22% from $4.06 billion, or 72 cents, a year earlier. Revenue rose 8.1% to $21.2 billion. JPMorgan was expected to earn $1.24 on revenue of $24.53 billion. Wall Street analysts expected Wells Fargo to earn 87 cents on revenue of $21.47 billion.

The results may heighten the feeling that Wall Street continues to thrive at the expense of Main Street, where unemployment remains high, though recently it has come down. 
JPMorgan and Wells Fargo also continue to operate under a cloud. The FBI is investigating JPMorgan's $5.8 billion in trading losses racked up by the so-called London Whale earlier this year. And in a federal lawsuit seeking hundreds of millions in damages, Wells Fargo was accused this week of making reckless mortgage loans. It will be interesting to see how these issues play out after the next White House occupant is chosen.

During the third quarter, JPMorgan benefited from strong results across the board. Mortgage bank originations jumped 29% to $47 billion, prompting CEO Jamie Dimon to remark that "the housing market has turned the corner." Investment banking surged 38% to $1.4 billion, buoyed by double-digit gains in debt and equity underwriting. Commercial Banking loan balances increased 15% to a record $124 billion, its ninth consecutive increase. 

The picture at Wells Fargo was not as bright. Investors were displeased that net interest margin declined 25 basis points to 3.66% as fee income fell against a backdrop of record-low interest rates. There were gains in community banking and wholesale banking, along with mixed results in wealth, brokerage and retirement.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jdberr.

Oct 12, 2012 12:29PM
Remember when you knew your local banker.
Break these monopolies up!
Oct 12, 2012 12:15PM
It only goes to show you that it doesn't matter what the earnings are.  If you can't impress the Bull Crappers of W/S you are licked!  And every bank today is screwed on account of the traditional Bull Crap excuse, "Failed to Impress the Street!!!!!!!!!!!!  Well ,W/S has never impressed me and never will!!!!!!!!!!!!!!!!!!!!!!!
Oct 12, 2012 12:22PM
Jamie Dimon pumped out a bunch of bad mortgages and sold them to the Federal Reserve so he could outrun his "whale" losses. He's a sitting Board Member of the Fed, so he used his influence to hurt America but save his stock price. Why there isn't a DEATH PENALTY yet for banksters is a mystery. LOOK at the damage they have done and keep doing. WHY would you own JPM stock? A share in a terror cell that kills us pumping and pushing paper is aiding and abetting in the collapse of the nation.

Close the banks. End the Federal Reserve. Get rid of Wall Street. These are the vehicles of our demise and have no real value to the nation or our society. Jamie Dimon is a loser.

Oct 12, 2012 12:23PM
Wall street is so socialist it just make me laugh
Oct 12, 2012 12:29PM
The only thing that impresses the WS parasites is someone bending over in front of them while looking in the same direction as they are! It's a perfect time for a repeat of the Thursday, February 14, 1929 "cleansing" that took place at 2122 North Clark St in Lincoln Park, Chicago.
Oct 12, 2012 1:22PM
Can you imagine the infinate and blatent b--t kissing, groveling, schmoozing, and golfing it must take to get ahead at one of these big banks. To reach the executive level, you would have to be one of the king brown-nosers of all time.
Oct 12, 2012 12:38PM
I use local credit unions. The money above insured limits is kept directly invested by me. You can do this, they just do not advertise this as they make no money on you.
Oct 12, 2012 1:13PM
I understand all theses big banks are still way underwater: ie the assets backing the loans they have given aren't worth as much as is owed them. In other words they're broke.
Oct 12, 2012 1:44PM
If you Libs hate the banks so much why are you going to vote for Obama? It was Bush, McCaine and Obama that annointed the banks "To Big To Fail". Romney had nothing to do with that. You idiots will cry and whine about the banks then vote for one of their tools.
Oct 12, 2012 2:20PM
Shares of JPMorgan Chase and Wells Fargo slip despite posting record profits ... Nah, the stock market is as honest as Hell!!!

Oct 12, 2012 2:15PM
This is a first ... Wall St doesnt trust Blankfein or Dimon.  I
Oct 12, 2012 2:09PM
But why should "liberals" vote for Romney? I highly doubt Romney/Ryan would be heading up a proposal to break up the big banks.... even less likely than an Obama administration.
Oct 12, 2012 2:06PM
I am surprised i am allowed to comment here, after all it is Jonathan Berr's website where rational thought, facts, and supportable economic  causes and effects are usually off limits.   So I di dnot know that Iran is no threat or that the last 4 years have been so great or that my health care costs went down as well s the cost of energy and food.
Oct 12, 2012 12:42PM

This is for V_L: (thought I'd post it here too for you)


We're flying out tomorrow for the North Carolina Smokey Mountains. We don't need to stay at Jack Welsh's resort, we have had our own place up there since 87'. But, if you would like to visit, I'll ask Jack if he can put up up there for a few day's- I need someone that can dig for worms when I fish for rainbow trout


I got to go pack the suit cases now- hope to see you-----C-YA!!!!

Oct 12, 2012 2:44PM
Music7, Romney's plan is to cut taxes and increase military spending is just what Bush did, the result was the worst 8 years of growth since the Great Depression, only a 2.09% average for 8 years, worst job growth of just 1 million and a pathetic payroll expansion of just 2.3%, at least payroll expanded over 13% under Jimmy Carter. Why would anybody in their right mind, think this is a good idea to create growth?
Oct 12, 2012 2:18PM
I don't expect Liberals to vote for Romney but it should be based on something besides Wall Street and the big banks. Liberals that think money drives the Republican party and not the Democratic party are insane. The class bashing is not making the USA stronger or changing the situation. If you want to vote for Obama I would hope it was because you believe abortion is ok and gays should have the right to get married or any of the real differences between conservatives and liberals.
Oct 12, 2012 12:49PM
While the banksters are today trying to take the dow up with so called good news The market investors ar not buying it. It seems like its a rotational media three ring circus ...Two days ago Unemployment, Yesterday Consumer confidence today Banks report they are all taking turns to boost the DEAD ECONOMY.....Today I just found out that many Hospitals are conducting MANDATORY- DNA and IQ test on all it's ER nurses quietly......What are they getting ready for? The collapse is coming but the Trigger is and could be many scenarios....IT is war? it is Nibaru fly bye and possible world disaster solar flare? Is it both as they can use the Fly buy to bomb Iran. and start WW III.....One thing for sure....if this happens The radiation  from all the nuclear plants going Explosive will kill us all  and  it will be the end to a long list of people that will die......of Starvation, Decease, Riots , earthquakes and Disasters.....ALL the governments and market seem like they are waiting for something....a trigger to start the collapse the Solar flare, war the earthquakes...etc..The Federal government is ready to save it's own dear elitist few to try to weather the solar storms having build underground military bases in 19 different locations around the country.....We are all expendable.....All I know if they are stuck down there......It was God's will.. and good ridance! They stoled and inflicted enough pain to plenty around the globe...!
Oct 12, 2012 2:19PM
The economy is horrible and getting matter what pretend world this administration is living in!! It certainly in NOT the world of reality! Every excuse imaginable has been used to keep the market up.........for Obama's sake.........and it isn't working!! So tired of the lies and manipulation! If Obama is re-elected uncertainty will remain! If Romney is elected.........we will see growth!!!
Oct 12, 2012 2:23PM
Obama stole my children's lunch money this morning ... really!!!!
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123 rated 1
262 rated 2
480 rated 3
651 rated 4
649 rated 5
629 rated 6
616 rated 7
496 rated 8
346 rated 9
111 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.