Chase Reports Profits Despite Mortgage Hits

JPMorgan Chase & Co. took losses on partially mortgage-related writedowns and the Bear Stearns merger during the second quarter, but it ultimately earned $2.0 billion and saw increases in mortgage banking income. The company took $1.1 billion in mortgage-related and leveraged lending writedowns and recorded a $540 million after-tax net loss on items related to the Bear Stearns merger during the period. JPMorgan Chase set aside a $1.3 billion provision for credit losses during the quarter, citing housing price declines that "have continued to result in significant increases in estimated losses, particularly for high loan-to-value home equity and mortgage loans." Mortgage banking net income was up 138% from that of a year earlier at $169 million due to gains in both production and net mortgage servicing revenues.