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Investors hardly reacted after banking giant JPMorgan Chase (JPM - Free JPMorgan Stock Report) posted better-than-expected March-quarter earnings of $1.28 a share. Reported results both exceeded our estimate of $1.00 and pulled well ahead of earnings of $0.74 in the year-earlier quarter.

A $2 billion reduction in the loan loss reserve in the bank's credit card division contributed $0.29 a share to earnings in the period, but this was mostly offset by a $0.16 negative adjustment for anticipated higher mortgage servicing costs and $0.10 of expenses related to mortgage foreclosure delays.

For the company, as a whole, revenues declined 9% and expenses were flattish, but the provision for loan losses fell by $6 billion, reflecting reductions in the retail financial services and credit card businesses. In the investment banking division, debt underwriting fees were strong. The commercial banking, treasury, and asset management businesses also turned in decent performances, offsetting a $200 million loss in retail financial services caused by the aforementioned higher mortgage costs.

For the balance of 2011, management looks for further improvement in the card division's credit costs and expects card outstandings, which have been declining, to stabilize. Although releases of credit card loan loss reserves in the next several periods may not be as large as in the March quarter and mortgage costs may stay high, we are raising our share-net estimate for 2011 by $0.50, to $5.00, and we are introducing a 2012 projection of $5.80.

With earnings still on the recovery track, JPMorgan shares look attractive for the long haul. And the recent increase in the annual per-share dividend rate, from $0.20 to $1.00, enhances the stock's total return potential.

About The Company: JPMorgan Chase & Co. is a global financial services firm offering a variety of services with operations in over 50 nations. At the end of 2010, JPMorgan held $2.1 trillion in assets and operations in more than 60 countries. Operational divisions include investment banking, treasury & securities services, asset management, commercial banking, retail financial services, card services, and private equity investment. The company had previously merged with Washington Mutual in September, 2008, Bank One in July, 2004, and Chase Manhattan in the final month of 2000.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.