Atlantic Equities analyst Richard Staite rates JPMorgan "overweight," with a price target of $54, and said in a report on Friday that excluding the 18-cent after-tax benefit from the reserve release and another two-cent benefit from debit valuation adjustments (DVA), "we calculate adjusted EPS of $1.38 vs our adjusted EPS estimate of $1.33." JPMorgan Chase's shares declined 1% to close at $49.01.
Wells Fargo ( WFC) on Friday also set an earnings record, reporting a first-quarter profit of $5.2 billion, or 92 cents a share, compared to 91 cents the previous quarter and 75 cents a year earlier. First-quarter mortgage revenue totaled $2.8 billion, declining from $3.1 billion in the fourth quarter, and from $2.9 billion in the first quarter of 2012. First-quarter mortgage loan originations declined to $109 billion from $125 billion the previous quarter. Wells Fargo's net interest income declined to $10.5 billion from $10.6 billion in the fourth quarter and $10.9 billion in the first quarter of 2012. The net interest margin -- the difference between the average yield on loans and investments and the average cost for deposits and borrowings -- narrowed to 3.48% in the first quarter from 3.56% the previous quarter and 3.91% a year earlier. The declines in mortgage revenue and interest income were more than offset by declines in expenses. The quarterly provision for loan losses -- that is, the amount added to reserves in anticipation of losses on the loan portfolio -- declined to $1.2 billion in the first quarter, from $1.8 billion in the fourth quarter and $2.0 billion a year earlier. Wells Fargo saw continued improvement to its already solid credit quality, with its annualized ratio of net charge-offs to average loans declining to 0.72% in the first quarter from 1.05% the previous quarter and 1.25% a year earlier. The company said this was the lowest net charge-off ratio since the second quarter of 2006. Wells Fargo's total noninterest expense declined to $12.4 billion in the first quarter from $12.9 billion the previous quarter and $13.0 billion a year earlier. The company said that the sequential improvement was "primarily due to lower operating losses associated with the Independent Foreclosure Review settlement and a $250 million charitable contribution to the Wells Fargo Foundation in the fourth quarter."