JPMorgan Chase, the first of the major U.S. banks to report earnings, posted a second-quarter profit of $1.09 a share, coming in well ahead of the consensus of 70 cents a share. Results included a 36-cent-a-share benefit from the reduction in loan loss reserves and a 14-cent-a-share charge related to a U.K. bonus tax.
JPMorgan said revenue on a managed basis was $25.6 billion, down from $27.7 billion in the year-ago quarter and $28.2 billion in the first quarter of 2010. Credit loss provisions dropped 65% from a year ago to $3.4 billion, the bank said. Nonperforming assets in the second quarter totaled $18.2 billion, down from $19 billion in the first quarter of 2010 but up from $17.5 billion in the year-ago quarter. After opening Thursday's higher in positive territory, shares of JPMorgan were lately down 71 cents, or 1.8%, to $39.64. Bank of America ( BAC) and Citigroup ( C), which are both scheduled to post second-quarter financial results early Friday, were down 2.8% and 2.3%, respectively. Analysts expect that Bank of America will report a second-quarter profit of 22 cents a share on revenue of $29.75 billion. Meanwhile, Citigroup should record earnings of 5 cents a share on revenue of $22.16 billion, according to Thomson Reuters. Among other U.S. bank stocks, Morgan Stanley ( MS) lost 2.4% to $24.92, and Wells Fargo ( WFC) was down 1.5% to $27.26. Goldman Sachs ( GS) held up slightly better, falling only 0.3% to $138.62, on a report the bank held discussions with regulators to settle fraud charges. The Wall Street Journal reports that Goldman, which reports quarterly results next week, and the Securities and Exchange Commission held talks about a possible settlement that would resolve both the fraud lawsuit against the firm as well as some of the other probes into Goldman's mortgage department. In other financial news, Harvey Golub has resigned as chairman American International Group ( AIG), effective immediately. Fellow AIG board member Steve Miller will replace Golub, who leaves the insurer after battles with AIG CEO Robert Benmosche.
Earlier this month, Bloomberg reported that Benmosche threatened to resign from AIG unless Golub left. The ultimatum came shortly after AIG's failure to sell its Asian unit to Prudential PLC ( PUK) for $35.5 billion. Benmosche said during a June 25 board meeting that he wanted more control over the divestiture, the report says. Golub reportedly was opposed the sale of AIA because even though it would yield more money that could be used to repay bailout funds, it was riskier, one person told Bloomberg. Shares of AIG were lately down 63 cents, or 1.7%, to $36.90. Among the winners of the financial sector, TD Ameritrade ( AMTD) shares rose after Bank of America/Merrill Lynch analysts upgraded the stock to neutral from underperform. Shares of TD Ameritrade were up 0.5% to $15.68. Elsewhere, share of NY Magic ( NYM) rallied 21.4% to $25.32 after ProSight Specialty Insurances offered to buy the property and casualty insurer for $25.75 a share in cash. -- Written by Robert Holmes in Boston. Follow Robert Holmes on Twitter and become a fan of TheStreet.com on Facebook.