Banking & Finance

Jamie Dimon Delivers J.P. Morgan Earnings Home, Discount to Book Value (JPM)

J.P. Morgan Chase & Co. (NYSE: JPM) is the first of the banks to report earnings and the results are ahead of estimates.  America’s top bank reported $1.27 EPS on $27.4 billion in revenues.  Thomson Reuters had estimates of $1.21 EPS and $25.13 billion in revenues. Net income was $2.1 billion, up 49% from the prior year’s Q2 period.

Jamie Dimon also reported that the Tier-1 capital ratio was 12.4% and the Tier-1 common ratio was 10.1%, while the bank turned in a return on equity of 20.1% and it estimated that its Basel III Tier 1 Common ratio is about 7.6%.  The bank’s provision for credit losses was down to $1.81 billion and the company claims to have hired 10,000 year-to-date.  While credit losses will remain elevated, the key note is that credit trends appear to have normalized.

Some additional highlights are that commercial banking saw record revenue and continued loan growth, even while loan demand remains weak.  The ban reduced loan loss reserves by $1.0 billion as estimated losses declined.

Shares of J.P. Morgan closed at $39.62 on Wednesday and the 52-week trading range is $35.55 to $48.36.  The early bird pre-market trading has shares up around $39.95.

One figure that investors may want to hang their hat is on the discount to book value, which was listed as 44.77 versus $43.34 one quarter ago and up from $40.99 a year earlier.

Update at 7:30 AM EST: J.P. Morgan shares are now trading up around $40.45 with about two hours until the market opens.