by Will Kessler
The U.S.’ largest bank had another huge quarter as profits soared after reaching a deal with federal regulators to buy the failed First Republic Bank in May.
JPMorgan Chase reported that, for its third quarter of 2023, net income was up by $13.2 billion, or 35%, but excluding assets acquired from First Republic, it was only up 24%, according to the banking giant’s third quarter earnings report. First Republic was one of a few banks that failed earlier this year after a bank run that shook depositors, which resulted in JPMorgan acquiring the bank after federal regulators seized its assets and auctioned them in order to maintain funds for depositors.
“Our lines of business saw continued momentum in the quarter, demonstrating the power of our years of investment and the value of our consistency and fortress principles,” Jamie Dimon, CEO of JPMorgan, said in the earnings report. “Across the Firm, we continued to add a sizable number of new clients and deepen relationships. In [Consumer and Community Banking], we again ranked #1 in U.S. retail deposits based on the most recent [Federal Deposit Insurance Corporation] data, and we extended our leadership position as our growth from net new accounts was over 3x that of peers.”
The average for loans at the bank was up 17%, while average deposits were down 4% for the third quarter compared to the last, according to the earnings report. Banking and Wealth Management net revenue was up 43% as opposed to 30%, excluding First Republic.
Probability of a US recession, per JPMorgan: pic.twitter.com/nqbLkTk9A8
— unusual_whales (@unusual_whales) October 13, 2023
The Federal Deposit Insurance Corporation (FDIC) reached a deal with JPMorgan in May to acquire $92 billion in deposits, $173 billion in loans and $30 billion in securities after large banks were invited to a government-facilitated auction to sell the failed bank. The Office of the Comptroller of the Currency had to give JPMorgan special permission in the acquisition due to regulations prohibiting banks from holding over 10% of U.S. deposits from purchasing competitors.
First Republic followed the collapse of Silicon Valley Bank (SVB) after a bank run that ultimately led to it also being seized by the FDIC and depositors being bailed out through the taxpayer-funded Deposit Insurance Fund.
The huge earnings report follows a similarly successful second quarter for JPMorgan, where the bank reported $14.5 billion, or a 67% gain quarter-over-quarter, dropping down to 40% when First Republic is excluded.
“Currently, U.S. consumers and businesses generally remain healthy, although, consumers are spending down their excess cash buffers,” Dimon said. “However, persistently tight labor markets as well as extremely high government debt levels with the largest peacetime fiscal deficits ever are increasing the risks that inflation remains elevated and that interest rates rise further from here.”
JPMorgan deferred the Daily Caller News Foundation to the earnings report press release.
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Will Kessler is a reporter at Daily Caller News Foundation.
Photo “JP Morgan Chase” by Ben Sutherland. CC BY 2.0.
