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46 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T ORIGINATION THE LATEST JPMorgan Earnings Beat Expectations AMID RECORD-BREAKING EARNINGS, JPMORGAN CHASE'S MORTGAGE DIVISION POSTED A SIGNIFICANT NEW YORK // JPMorgan Chase, one of the nation's largest lend- ers, announced its fourth-quarter earnings wrapped 2015 on a positive note, but could trouble be brewing in the mortgage banking division of the company? According to the 2015 fourth- quarter earnings statement, JPMorgan's net income reached $5.4 billion, or $1.32 per share for the fourth quarter, down from the 6.8 billion, or $1.68 per share that was reported in the third quarter. Last year, during this same period, earnings were $4.9 billion. But despite the quarter-to- quarter decline, JPMorgan can say that it had an outstanding year in 2015 overall. Year-over-year in the fourth quarter of 2015, JPMorgan's earnings totaled a record-breaking $23.7 billion, up from $23.5 billion in the fourth quarter of 2014. "We had a good quarter as 2015 came to a close. The businesses generated strong loan growth and credit quality, except for some stress in energy," said Jamie Dimon, Chairman and CEO of JPMorgan. "The consumer busi - ness continues to gather deposits, outpacing the industry. Markets were somewhat quieter, and we saw the impact reflected in the results of our trading and Asset Management businesses." The earnings statement also showed JPMorgan's net revenue rose 1 percent to $23.7 billion, thanks to higher revenue in corporate banking and consumer and community banking, but largely offset by lower revenue in corporate and investment bank - ing as well as asset management. Meanwhile, noninterest expense was $14.3 billion in the fourth quarter of 2015, down 7 percent. "Looking at performance for the full year, 2015 was another record year for the Firm for net income and EPS, and impor - tantly we exceeded on all of our commitments–balance sheet optimization, capital, GSIB, and expense," Dimon explained. "On operating leverage, we delivered core efficiencies while continu - ing to invest in innovation and technology, infrastructure, and talent–crucial for protecting the company and customers, and for our growth." The mortgage banking divi- sion of the bank experienced a disappointing fourth quarter, with net income totaling $266 million, down 21 percent year-over-year. Net revenue also fell 10 percent to $1.7 billion. On the bright side, higher loan balances pushed net interest income up 11 percent to $1.1 billion. Noninterest revenue at JPMorgan was $533 million, down 37 percent, due to lower repurchase benefit and lower net servicing revenue, the lender reported. Net revenue increased 8 percent quarter-over-quarter, driven by higher MSR risk management and loan growth, partially offset by lower repur- chase benefit. "The Firm is getting safer and stronger each year. We are continuing to adjust our strategy to the new world and to meeting all requirements. We see exciting opportunities to invest for the future, to continue to deliver bet - ter and faster for our clients and customers," Dimon concluded. Bank of America and PHH Renew Mortgage Agreement BANK OF AMERICA WILL CONTINUE OUTSOURCING MORTGAGE ORIGINATIONS TO PHH CORP. NORTH CAROLINA // Charlotte- based Bank of America will continuing outsourcing origination services through PHH Corp., to its Merrill Lynch clients. The previous agreement between the two companies expired at the end of 2015, and the new agreement began at the start of 2016. "We are extremely pleased to continue our relationship with our largest private label client, a trusted and well-respected firm," said Glen A. Messina, President and CEO of PHH Corp. "We thank the Bank of America and Merrill Lynch teams for working with us to achieve our mutual objectives and are committed to fulfill our obliga - tions and commitments under our new agreement." A Bank of America spokes- person was not immediately available to comment at the time of publication. PHH Corp., third-quarter 2015 financial results took a large hit of $50 million or $0.84 per share. In addition, the results showed PHH's mortgage production seg - ment took a loss of $10 million, compared to the $3 million gain recorded in the second quarter and the $28 million loss in last year's third quarter. "We are resolute in our com - mitment to executing a capital deployment framework to achieve our long-term return objectives," Messina said. "The current dy - namics in the mortgage industry reinforce the need to meaningful- ly increase scale in both our pro- duction and servicing segments to achieve sustained profitability. We are making the necessary invest- ments in our business that we believe will generate shareholder value, and we look forward to continuing to respond to the challenges and opportunities that lie ahead for our business." On the other hand, Bank of America posted strong financial results, with a third-quarter net income of $4.5 billion, or $0.37 per share, the bank's earnings state - ment showed. Bank of America's year-to-date net income totals $13.2 billion or $1.09 per share. Revenue de - clined $521 million to $20.9 billion from last year, mostly driven by higher negative market-related adjustments on its debt securities portfolio due to lower long-term interest rates. The company originated $13.7