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First Quarter Earnings Reports Robust for Nation’s Largest Financial Firms

piggybank-cashFive of the nation's largest financial firms – Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Goldman Sachs – all reported strong first quarters in their respective earnings reports released earlier this week.

In the case of Goldman Sachs, the New York-based investment banking firm reported its highest net revenue in four years, $10.62 billion, with net earnings of $2.84 billion largely due to strong showings in the firm's institutional client services and investment banking sectors. Goldman CEO Lloyd Blankfein was pleased that “all of our major businesses contributed” to the strong first quarter. “Given more normalized markets and higher levels of client activity, we remain encouraged about the prospects for continued growth,

Chase, also headquartered in New York, reported a net revenue of $24.8 billion and a net income of $5.9 billion, both increases from Q1 2014 – driven by strong performance in corporate and investment bank, both in markets and investment banking.

“JPMorgan Chase continues to support consumers, businesses and communities and make a significant positive impact," Chase CEO Jamie Dimon said. "We have an outstanding franchise which is getting safer and stronger, and is gaining market share over time.

For San Francisco-based Wells Fargo in Q1, revenues increased by 3 percent year-over-year up to $21.3 billion. Although net income slightly declined from the same quarter a year ago from $5.9 billion to $5.8 billion, noninterest income for the bank jumped by $29 million up to $10.3 billion. The bank received higher income in Q1 from trading activities, debt security gains, mortgage origination gains, and insurance, but the higher income was offset by lower income in mortgage servicing, which was at $108 million for Q1 compared to $235 million for Q4 2014. Wells Fargo posted mortgage banking noninterest income of $1.5 billion for Q1.

"We continued to strengthen our customer relationships in the quarter, as reflected in strong growth in deposits and primary checking customers," Wells Fargo Chairman and CEO John Stumpf said. "In addition, our mortgage business was able to serve more customers by refinancing their mortgage loans with lower rates."

Bank of America originated $17 billion worth of first-lien residential mortgage loans and home equity loans in Q1, which helped the bank's net income rise to $3.4 billion for Q1. The Charlotte, North Carolina-based bank also reported a 45 percent year-over-year decline in the number of first mortgage loans serviced by its Legacy Assets unit that were 60 or more days delinquent, down to 153,000.

"Continuing the trend from last quarter, we saw core loan and deposit growth, higher mortgage originations, and increased wealth management client balances," Bank of America CEO Brian Moynihan said. "We retained a top position in investment banking as our team generated the highest advisory fees since the Merrill Lynch merger.

For Citi, which is headquartered in New York, net income rose in Q1 up to $4.8 billion, from $3.9 billion from the same quarter a year ago. Overall revenues for the bank were down year-over-year in Q1, however, falling from $20.2 billion down to $19.7 billion. Citigroup CEO Michael Corbat said despite the drop in revenue, "We had a strong quarter overall, particularly in executing against our top strategic priorities,” adding that the bank grew loans and deposits in its core businesses and tightly managed its expenses.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.

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