[1]While JPMorgan Chase [2]’s earnings exceeded expectations for the fourth quarter of 2015, the bank’s Mortgage Banking division had a relatively disappointing quarter—which Chase hopes to turn around with a recent shakeup in Mortgage Banking Leadership.
According to Chase’s Q4 2015 earnings statement [3] released on Thursday, the bank pulled in a net income of $5.4 billion during the final quarter of the year—down from the $6.8 billion net income reported in Q3 but up from the $4.9 billion net income reported for the final quarter of 2014. Year-over-year in the fourth quarter of 2015, the bank's earnings totaled a record-breaking $23.7 billion, up from $23.5 billion in the fourth quarter of 2014.
"We had a good quarter as 2015 came to a close,” JPMorgan Chase CEO Jamie Dimon said. “The businesses generated strong loan growth and credit quality, except for some stress in energy. The consumer business continues to gather deposits, outpacing the industry. Markets were somewhat quieter, and we saw the impact reflected in the results of our trading and Asset Management businesses.”
The Mortgage Banking division of JPMorgan Chase experienced a disappointing fourth quarter, however, with net income totaling $266 million, down 21 percent year-over-year. Net revenue also fell 10 percent to $1.7 billion. On the bright side, higher loan balances pushed net interest income up 11 percent to $1.1 billion. The bank hopes that two recent changes in leadership can turn around the Mortgage Banking Division’s fortunes in 2016: In December, Mike Weinbach changed roles at the bank [4], moving from head of Mortgage Servicing to become the CEO of Mortgage Banking. Earlier in January, the bank named Peter Muriungi as head of Mortgage Servicing [5] to replace Weinbach.
[6]JPMorgan Chase started off 2016 on a positive note. On January 5, the Office of the Comptroller of the Currency announced it has released the bank from a mortgage-related consent order [7] than had been in effect since June 2015 after finding Chase to be in full compliance with the order. At the same time, the OCC issued a $48 million civil penalty to the bank for previous violations of the consent order.
The earnings statement also showed that JPMorgan's net revenue rose 1 percent to $23.7 billion, thanks to higher revenue in Corporate and Consumer & Community Banking, but largely offset by lower revenue in Corporate & Investment Banking and Asset Management. Meanwhile, noninterest expense was $14.3 billion in the fourth quarter of 2015, down 7 percent.
"The Firm is getting safer and stronger each year,” Dimon said. “We are continuing to adjust our strategy to the new world and to meeting all requirements. We see exciting opportunities to invest for the future, to continue to deliver better and faster for our clients and customers.”
Click here to see JPMorgan Chase’s entire Q4 2015 earnings statement [3].