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Litigation costs push JPMorgan into Q3 loss; shares gain

  • EPS of $1.42 excludes litigation expense and reserves of $7.2B (vs. less than $1B a year ago), or $1.85 per share and also excludes the benefit of reserve releases of $992M, or $0.26 per share.
  • Dimon: "The Board continues to seek a fair and reasonable settlement with the government on mortgage-related issues and one that recognizes the extraordinary circumstances of the Bear Stearns and WAMU transactions, which were undertaken at the request or encouragement of the U.S. Government."
  • Consumer & Community Banking revenue of $11.1B is off 13% Y/Y. Tipped weakness on mortgage banking doesn't disappoint, with noninterest revenue off 27%. Total mortgage originations fell 17% from Q2, but that's all refi business as purchase originations rose 15%.
  • Investment banking revenue of $8.2B is off 2% Y/Y, but includes a $397M DVA charge.
  • Commercial banking revenue of $1.7B is off 7% Y/Y.
  • Basel Tier 1 common ratio of 10.5%
  • CC at 8:30 ET.
  • Q3 results, press release.
  • JPM +1.4% premarket.
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Comments (8)
  • deercreekvols
    , contributor
    Comments (5698) | Send Message
     
    Not sure how the litigation expenses could be a surprise to anyone at JPM...very odd how it suddenly is an issue.

     

    Uber-smart CEO Jamie Dimon will fix everything. He always does.
    11 Oct 2013, 09:27 AM Reply Like
  • Swisser998
    , contributor
    Comments (133) | Send Message
     
    Looks like they just threw in the kitchen sink of negative items into this quarter. And they're still not terribly far from breaking even this quarter. Long JPM.
    11 Oct 2013, 09:32 AM Reply Like
  • june1234
    , contributor
    Comments (2649) | Send Message
     
    Yr over Yr revenues down 8%. Mortgage banking decline took the housing recovery big hit Jamie Dimon warned of on last earnings call
    11 Oct 2013, 10:03 AM Reply Like
  • almenard97
    , contributor
    Comments (2) | Send Message
     
    They are treating all this litigation noise in the media as an opportunity to clear the decks. The Feds (Holder) have a gun to JPM's head. So it's time to shed some potential liability by being as transparent as popssible. Most of this accrued expense is by it's nature non-recurring.

     

    On a going forward basis, this is an power house earnings behemoth. Once they get rid of the commodities businesses in energy,metals, and other non-core businesses, they will be printing earnings like the Fed is printing money.

     

    Their interest costs are de minimus. This is the new AT & T as long as Dimon hangs around. Should Dimon be forced out by the Washington jackals, that will be a tragedy for JPM stockholders as well as Wall Street in general.
    11 Oct 2013, 04:28 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    the recovery is still highly "uneven"...to the extent it even is one. commodities have rolled over so "risk" now becomes "real" (now that we know not all prices move in one direction anymore.) the lesson of Wal Mart is that low prices is the only sure fire way of creating demand in an economy. the only place where prices are now falling is at the pump...now materially so. that says to me anything selling gasoline "or other energy product" is creating demand. "curve flattening" is not to my knowledge good for banking...but i'll leave that to the experts. oil production however is to banks what gold was to Midas. Solar City going through the roof today says to me vis a vis incumbency "look out."
    12 Oct 2013, 12:23 AM Reply Like
  • keentolearn
    , contributor
    Comments (129) | Send Message
     
    Litigation costs finally started to show their impact.
    12 Oct 2013, 07:28 AM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (774) | Send Message
     
    I'm surprised Jamie Dimon still has a job.
    12 Oct 2013, 11:33 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Hope the stock tanks so I can back up the truck. Smart money seems to know they are a great bank with solid earnings. Litigation issues are mostly related to Bear and WAMU which are politically charged and based on management of those companies. Next time get a better agreement with the government.
    12 Oct 2013, 02:47 PM Reply Like
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