Wells Fargo Again Proves It's Better Than JPMorgan

Updated with additional details in second and seventh paragraphs.

NEW YORK ( TheStreet) -- Bank earnings are complicated, but it's important not to lose the forest for the trees. W ells Fargo  ( WFC) grew its earnings; JPMorgan Chase  ( JPM) did not. Which do you think is the better performer?

It isn't a trick question. JPMorgan on Friday attributed its 18% first quarter earnings decline to "industry-wide headwinds in markets and mortgage." Fine--except that Wells Fargo is in the same industry and managed to grow its earnings by 14%. And it's not as though Wells Fargo looks good this quarter because it is coming off a poor prior performance. Wells posted higher net income than any other bank in the U.S. in 2013 and has grown earnings for 17 straight quarters.

Even though residential mortgage originations fell slightly at Wells Fargo compared to the fourth quarter, the San Francisco-based bank managed to more than offset the decline by fees from mortgage servicing.


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JPMorgan Chase CFO Marianne Lake instead complained about "severe weather" during Friday morning's conference call. And, while she conceded the bank lost market share, she argued it was because it is more disciplined than competitors.

"We're pricing the business to reflect the inherent risks. The risk of default and the cost associated with servicing defaulted loans is significantly higher for high LTV loans. As a result of pricing actions taken we believe we may have lost some share in the first quarter. But we will remain disciplined with respect to appropriate risk-adjusted returns," Lake said.

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