Chase Reports 50 Percent Drop in First Quarter Income

April 16, 2008 No Comments »

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JP Morgan Chase reported first quarter earnings of $2.4 billion, or 68 cents per share, compared to net income of $4.8 billion, or $1.34 per share, a year earlier.

Net revenue of $16.9 billion was off by 11 percent, due in part to markdowns of $1.2 billion on prime, Alt-A and subprime mortgages, along with $1.1 billion on leveraged lending funded and unfunded commitments.

The provision for credit losses was $5.1 billion, up from $3.5 billion a year ago, reflecting increases in the allowance for credit losses related to home equity loans and subprime mortgage loans and higher net charge-offs.

The firm had total nonperforming assets of $5.4 billion at March 31, 2008, up from $2.4 billion in 2007.

Mortgage banking net income increased from $84 million a year ago to $132 million, while net revenue climbed $147 million, or 24 percent, to $751 million.

Mortgage loan originations stood at $47.1 billion, up 30 percent from the prior year and 18 percent from the fourth quarter, while total third-party mortgage loans serviced were $627.1 billion, an increase of $81.0 billion, or 15 percent.

Interestingly, wholesale originations (those originated by mortgage brokers) of $10.6 billion surpassed the $9.9 billion originated in the first quarter of 2007.

Shares of the New York City-based bank and mortgage lender were up $1.89, or 4.49%, to $44.01 in late afternoon trading on Wall Street.

(photo: wilhei)

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