JPMorganChase & Co. (NYSE: JPM – $64.51) posted stronger-than-expected quarterly earnings and a surprise increase in revenue, while its expenses declined. The largest U.S. bank by assets reported a profit of $6.2 billion, or $1.55 a share. That compares with a profit of $6.29 billion, or $1.54 a share, in the same period of 2015. Analysts had expected per share earnings of $1.44. Adjusted revenue rose over 2.5% to $25.21 billion, greater than the $24.16 billion consensus estimate. The bank reported a 16% growth in average loans thanks to double-digit growth in residential and commercial real-estate loans and 10% growth in deposits for the period. The company’s trading revenue increased 23% to $5.56 billion from $4.51 billion a year ago. Costs in the segment decreased 5.9% to $13.64 billion from $14.5 billion a year earlier, an effort the bank continues to drill down on. The bank’s provision for credit losses, however, increased 50% to $1.4 billion from $935 million due to reserve increases and higher net charge-offs.
Shares moved higher in early trading and investors willing to accept some risk in the volatile banking sector can hold on for now. The shares also return 3% in dividends and increases, such as this quarters four cent quarterly jump, are likely along with additional share buybacks.