Big Bank Earnings Breakdown: Here's What You Need to Know

Big Bank Earnings Breakdown: Here’s What You Need to Know

Earnings season is now underway, and we’ve seen the latest numbers from all of the big U.S. banks. In this installment of Industry Focus: Financials , host Jason Moser and contributor Matt Frankel, CFP, discuss third-quarter results from JPMorgan Chase ( NYSE:JPM ), Bank of America ( NYSE:BAC ), Wells Fargo ( NYSE:WFC ), Citigroup ( NYSE:C ), and Goldman Sachs ( NYSE:GS ). Hear which bank had the best quarter, and what stocks Jason and Matt are keeping an eye on this week.

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This video was recorded on Oct. 18, 2021.

Jason Moser: [MUSIC] It’s Monday, October 18th. I’m your host, Jason Moser. If you caught last week’s Financials show, then you heard our earnings preview for the big banks. This week, we’re jumping into what they all had to say with our earnings review here to make sense of it at all. It’s the one, it’s the only certified financial planner Mr. Matt Frankel. Matt, how is everything going?

Matt Frankel: Just fine it’s a nice, sunny and not-too-hot day in South Carolina. You only get a few of those before winter, our fall is like a week long.

Moser: It’s contagious, it’s throughout that way up here to Virginia, it’s really nice sunny day, cool outside seems like it’s really starting to turn into fall, which I think we’re all kind of happy about. You get some Halloween decorating done over the weekend. My kids are very proud of what I put out there this year.

Frankel: Our house is all decorated and we have a golf cart, so one of my kids’ favorite things to do this time of year as drive around the neighborhood on the golf cart looking at all the decorations. [laughs]

Moser: Nice, good deal. Well, Matt, we were talking last week about all of the banks that we’re getting ready to announce earnings as earnings season has gotten underway here. We wanted to circle back this week and then take a look at these reports and see if there were any underlying themes and just generally see how these banks are doing. It has been a much different year, I would say, this year versus last for these big banks. We’re having a very good year to date for the most part and a good trailing 12 months, too when you look at the performance for these big five. Let’s just go in order here. We’ll take JPMorgan first because they announced last Wednesday. What stood out to you in JPMorgan’s report? We’re always paying a little bit, I think closer attention because of Jamie Dimon, but what’s stood out to you in JPMorgan’s most recent quarter?

Frankel: There are a few common themes among all of these earnings reports, they were all generally good first of all. All five of the banks we’re going to talk about beat earnings expectations, which is pretty impressive. There were a lot of reserve releases, which is one of the things we mentioned in the preview show last week if you remember. Banks have more visibility into their loan losses now, now that COVID is, I don’t want to say winding down, but definitely we’re moving on with life in general.

Moser: We’re in a much different place now than we were before and it’s much better situation for sure.

Frankel: Right. Just to run down JPMorgan, they had a $2.1 billion reserve release. The reason I’m mentioning that first is because that was a big part of its earnings beat. It beat expectations and it earned $3.74 a share versus $3 EBITDA was the expectation. But over $0.50 of those earnings were in the form of a reserve release. […]

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