""JPMorgan Chase"":http://www.jpmorganchase.com kicked off the earnings reporting season for major U.S. lenders on Friday with its announcement that the company earned a record profit of $19 billion for the 2011 fiscal year. That compares with $17.4 billion in net income for the prior year. Earnings per share were $4.48 for 2011.[IMAGE]
The company reported net income of $3.7 billion for the fourth quarter of 2011, compared with $4.8 billion for the fourth quarter of 2010.
Although the numbers paint a picture of a company in full recovery mode from the financial crisis and recession, JPMorgan's latest results missed analysts' expectations as[COLUMN_BREAK]
the company continues to struggle with legacy issues stemming from the housing downturn.
Mortgage net charge-offs and delinquencies modestly improved over the final quarter of 2011, but both remained at elevated levels, the New York-based lender noted in its ""earnings report"":http://files.shareholder.com/downloads/ONE/1346090477x6476149x533390/4026b17b-89d6-4ada-be00-9548c93ff325/4Q11_JPM_EPR_FINAL.pdf.
JPMorgan's total nonperforming assets declined by 33 percent compared to a year earlier, but legal wranglings involving mortgages and investors' repurchase demands cut heavily into the company's profits.
The company doled out more than $3 billion in 2011 to cover legal proceedings related to its mortgage business. That tally marks a decline from the $5.7 billion that was laid down in 2010 but still represents a hefty sum of what could have gone to boosting the bottom line.
CEO Jamie Dimon says the company set aside $528 million in the final quarter of last year alone to address mortgage-related legal issues.
The handling of foreclosures and defaulted mortgages also carried a steep price tag. In the fourth quarter, JPMorgan's cost related to this part of the business added up to $925 million.
""There's still a huge drag [from housing issues],"" CEO Jamie Dimon told investors. ""You're talking about several billion dollars a year in mortgage [operations] alone.""