NEW YORK (TheStreet) -- JPMorgan Chase (JPM) a year ago laid out a path toward "normalized" earnings of $27.5 billion, and that figure may be pushed significantly higher at the bank's annual investor conference on Tuesday.
The nation's largest bank holding company earned $17.9 billion, or $4.35 a share during 2013, with earnings lowered significantly by $7.2 billion, or $1.85 a share in after-tax litigation expenses, including a build-up of litigation reserves, during the third quarter. This prepared the company for $17.5 billion in residential mortgage-backed securities settlements with government authorities and private investors during the third quarter. JPMorgan's 2013 earnings also suffered from $1.1 billion, or 27 cents a share in fourth-quarter legal expenses, which included the company's deferred prosecution agreement with the Department of Justice over its role in the Bernard Madoff Ponzi scheme.
To put the normalized annual earnings goal of $27.5 billion into better perspective, JPMorgan earned a record $19.0 billion, or $4.48 a share, during 2012, despite losses exceeding $6 billion, before tax, from the "London Whale" hedge trading debacle.
JPMorgan's executives may be relieved that the company hasn't seen much in the way of negative headlines this month, following the Madoff settlement in January and a seemingly endless array of headlines -- many seemingly driven by leaks from regulators and the Justice Department -- last year.
The company's stock is the second-cheapest among large-cap U.S. banks, trading for just ___ times the consensus 2015 earnings estimate of $6.35 a share, among analysts polled by Thomson Reuters, based on Thursday's closing price of $57.58. The consensus 2014 EPS estimate is $4.98.