Banks Continue to Surprise to the Upside

Going into the second quarter of 2014, investors had very modest expectations for banks. Throughout the quarter, the major universal banks, such as JPMorgan (JPM) and Citigroup (C), talked down quarterly expectations because of difficult fixed-income trading and mortgage markets. To top it off, interest rates declined while net interest margins (NIM) for investment books continued to contract. The quarter was not looking favorable for the banking group. 

On Friday, July 11, Wells Fargo (WFC) kicked off the bank earnings season with in-line earnings. Rising deposit, loan, fee and credit quality levels were offset by continued net interest margin (NIM) contraction, falling mortgage activity and continued legal and regulatory expenses. It looked like it was going to be a blasé quarter, at best....443 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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