This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bank Stocks Pull Bank Ahead of Earnings

Earnings Season

Earnings season for the nation's largest banks begins on Tuesday, with JPMorgan Chase (JPM - Get Report) leading off, followed by Wells Fargo (WFC - Get Report), both before the market open.

In the third quarter, JPMorgan Chase posted a surprise net loss of $380 million, or 17 cents a share, driven by $9.15 billion in provisions for litigation reserves.  The bank reported $23 billion in legal reserves set aside as of Sept. 30, which more than covers the $17.5 billion in residential mortgage-backed securities settlements the company entered into with government authorities and investors during the fourth quarter.  But JPMorgan did say its fourth-quarter after-tax earnings would be lowered by $850 million, as a result of its $2.6 billion settlement with the Department of Justice and regulators over its role in the Bernard Madoff Ponzi Scheme.

Analysts on average expect JPMorgan to post fourth-quarter earnings of $1.35 a share, down slightly from $1.39 a year earlier.  JPMorgan's shares were down 1.5% Monday to close at $57.60.  Please see What JPMorgan Shareholders Really Care About for more on what to expect from the company.

Wells Fargo continues its strong operating performance, with a return on tangible common equity (ROTCE) of 17.86% for the first three quarters of 2013, according to Thomson Reuters Bank insight.  The consensus fourth-quarter EPS estimate for the bank is 98 cents, down a penny from 99 cents during the third quarter, but up from 92 cents a share during the fourth quarter of 2012.

Wells Fargo's shares were down 0.8%, closing at $45.56.

Please see Regional Bank Earnings: What to Expect, for a detailed discussion of several challenges facing major U.S. banks, as wells as opportunities in 2014.

This chart shows the stock performance of State Street, JPMorgan and Wells Fargo against the KBW Bank Index and the S&P 500 since the end of 2011: 

STT Chart data by YCharts

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
JPM $62.12 -0.02%
WFC $52.54 0.67%
AAPL $109.49 -1.20%
FB $92.40 0.00%
GOOG $638.31 -0.63%


Chart of I:DJI
DOW 17,050.75 +138.46 0.82%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,810.7880 +19.6360 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs