Bank earnings are taking a hit this quarter, and the recent financial reports from major banks like JPMorgan Chase, Bank of America, and Citigroup have left analysts and investors puzzled. JPMorgan Chase, the largest US bank by assets, reported a 15% drop in fourth-quarter profit, which fell to $9.3 billion, significantly lower than the expected $3.04 per share. However, the bank also announced a record-breaking annual revenue of $158 billion, marking a 23% increase from the previous year.

So, what’s behind this apparent contradiction? The answer lies in a one-time charge related to the regional banking crisis. JPMorgan had to pay a hefty $2.9 billion fee linked to the cleanup of the aftermath of Silicon Valley Bank and Signature Bank collapses, which significantly impacted its reported earnings. Without this exceptional expense, JPMorgan’s earnings would have surpassed the estimates, coming in closer to $3.97 per share.

But JPMorgan is not alone in facing the repercussions of the banking crisis. Bank of America and Citigroup also bore the brunt of the fallout. Bank of America reported earnings of 35 cents per share, missing the estimated 53 cents per share, while Citigroup posted an earnings loss of $1.16 per share, well below the expected 11 cents per share. Both banks attributed these lower-than-expected results to one-time fees associated with the FDIC’s intervention in the banking crisis.

It is evident that the impact of the regional banking crisis has reverberated across the financial sector, leading to unexpected charges and dampening the quarterly earnings of major banks. The fallout from the collapses of Silicon Valley Bank and Signature Bank continues to cast a shadow over the banking industry, with additional costs and restructuring efforts further complicating the financial landscape for banks like Citigroup.

As the banking sector grapples with the aftermath of the regional banking crisis, investors and analysts will closely monitor how these institutions navigate the challenges and uncertainties in the coming quarters. The financial reports from JPMorgan, Bank of America, and Citigroup serve as a stark reminder of the far-reaching implications of financial crises and the resilience required to weather such storms in the banking industry.