JPMorgan Chase, which holds the most assets of any bank in the country, said Friday that it issued more mortgage loans in the first three months of the year and turned a bigger profit than Wall Street expected.
The bank said it earned $5.4 billion for the first quarter, or $1.31 per share. Analysts were expecting $1.16 per share. Revenue and profit declined at most of JPMorgan's businesses, including investment banking.
As the largest bank, JPMorgan is a barometer of the economy and the financial industry. It is also the first major bank to report its results for the first quarter.
CEO Jamie Dimon said the bank expects high costs from the bursting of the real estate bubble last decade "for a while longer." The bank set aside $2.5 billion to fight legal battles, including over foreclosures.
But there were bright spots, too: Customers continued to pay credit card bills and mortgage loans on time, which allowed the bank to pick up $1.8 billion from the reserves it had set aside to cover loan losses.
JPMorgan Chase issued 6 percent more mortgage loans, and applications for mortgages grew 33 percent as more customers took advantage of historically low rates to refinance their loans.
The bank said its mortgage business earned $461 million, reversing a loss in the same period last year. And its chief financial officer said the bank has enough reserves for mortgage-related litigation.
Overall, JPMorgan's earnings fell 3 percent from the same quarter one year earlier, while its revenue grew 6 percent from last year to $24.4 billion.
JPMorgan Chase also gained $1.1 billion from a settlement related to Washington Mutual, the failed bank it bought during the depths of the 2008 financial crisis.
Though the bank ranked first in investment banking fees globally in the first quarter, both revenue and income fell, reflecting turbulence in the markets because of fears that Greece might default on its debt.
The stock market rallied in the first quarter, its best since 1998, but trading volume was low as many investors, particularly individuals, decided to stay away.
JPMorgan's revenue at its investment bank was $7.3 billion, compared with $8.2 billion last year. Fees fell 23 percent to $1.4 billion.
In pre-market trading, JPMorgan stock fell 31 cents to $44.53.