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Investors in JPMorgan Chase & Co.  (JPM) - Get JPMorgan Chase & Co. Report  are learning that rising U.S. interest rates aren't all they were cracked up to be. 

As the Federal Reserve started raising rates in late 2015, bank stocks rallied on analyst forecasts that lending revenue would swell, due to higher interest on loans and bonds. The stocks rallied further last year on speculation that President Donald Trump's tax cuts would stimulate the economy, ushering in an era of fast loan growth. 

But now, competition is heating up for deposits, forcing banks to raise their rates on deposits to keep customers from defecting, while bond- and stock-trading fees are suffering due to lower transaction volumes. Banking-industry loan growth, at 4.6% from a year earlier, isn't significantly outpacing the economy, currently growing at an estimated 3.2% clip, according to FactSet.    

JPMorgan's shares tumbled 5.7% this week through Thursday, even as many investors increased their expectations for Fed rate increases next year.      

Investors will get an update on how big U.S. banks are performing on Friday, Oct. 12, when JPMorgan and rivals Citigroup Inc. (C) - Get Citigroup Inc. Report and Wells Fargo & Co. (WFC) - Get Wells Fargo & Company Report report third-quarter earnings.

New York-based JPMorgan is expected to say that pretax income rose by 8.4% from a year earlier. Net income probably rose by a much faster 15% due to the impact of the tax cuts, which slashed the U.S. corporate rate. 

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The bank probably will report earnings of $2.26 a share on sales of $27.4 billion, accordint to a FactSet survey of 24 analysts. JPMorgan has beaten the quarterly estimates for 14 straight quarters, a sign of outperformance by the bank and CEO Jamie Dimon -- or perhaps simply a reflection of its investor-relations team's ability to coach analysts to keep their estimates low. 

The longtime bank analyst Dick Bove, chief strategist for Rafferty Capital Markets, wrote this week in a report that banks also face losses on their huge portfolios of investment securities, which is where the lenders invest extra deposits they don't need immediately for loans or regular operations. 

When interest rates rise, the prices for those investment securities fall, saddling the banks with big losses. Under current accounting rules, those losses aren't counted in profit statements. The losses do, however, subtract from shareholders' equity. And bank stocks often trade as a multiple of shareholders' equity, also known as book value. 

"We know that the value of these assets are declining as interest rates rise," Bove wrote. "What is unknown is by how much."

Time to find out.

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