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TheStreet Open House

5 Takeaways From JPMorgan Chase Earnings (Update 3)

(JPMorgan earnings updated with information and management commentary throughout.)

NEW YORK (TheStreet) -- JPMorgan Chase (JPM) said strong investment banking results and an improvement in mortgage banking revenues powered profit in the first quarter.

The nation's largest bank by assets and deposits reported net income on a managed basis of $5.38 billion, or $1.31 per share, down slightly from $5.55 billion, or $1.29 a share, in the year-ago quarter. In the fourth quarter, the bank posted a net income of $3.7 billion, or 90 cents a share.

Profits included several one-off items including a $1.8 billion pretax benefit from reduced loan-loss reserves, a $1.1 billion pretax benefit from WaMu's bankruptcy settlement, which was offset by a $2.5 billion pretax expense for additional litigation reserves and a debt valuation adjustment loss of $900 million, an accounting loss incurred from tightening spreads on the bank's own debt.

Excluding items, "core" earnings per share were $1.39.

Revenue came in at $27.4 billion, up 6% from the year-earlier quarter and 24% over the previous quarter.

Analysts were expecting earnings per share of $1.18 on revenue of $24.68 billion.

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"We are pleased that our results for the quarter reflected positive credit trends for our consumer real estate and credit card portfolios," CEO Jamie Dimon said in a statement. "However, with respect to our Mortgage Banking business, we expect to see elevated levels of costs and losses associated with mortgage-related issues for a while longer. Credit trends across our wholesale portfolios were stable and continued to be strong."

Here are five headline numbers from JPMorgan's earnings.

1. Trading Revenue Rebounds: As was widely expected, JPMorgan reported a solid rebound in fixed income trading from the fourth quarter, with debt market activity picking up in the early part of the year.

Revenue from the trading of fixed income, currency and commodities -- known as FICC -- came in at $4.66 billion, down 8% from the year-ago quarter, but up 87% from the dismal fourth quarter revenue of $2.49 billion.

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Ex-DVA, fixed income revenue was up 91% sequentially at $5 billion.

Fixed income trading accounted for about 60% of the bank's investment banking revenue in 2011.

Equity trading revenue came in at $1.29 billion, down 8% from the year-ago quarter but up 66% from the fourth quarter.

Excluding DVA, equity revenue was up 77% sequentially and 2% year on year.

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