According to Gasparino’s blog at the Daily Beast, Goldman will repay its Tarp money next week:

According to sources, Goldman appears to be furthest along in getting final approval to repay the $10 billion loan; JP Morgan would have to repay $25 billion. These people, speaking on the condition of anonymity, say one obstacle JP Morgan may be facing is that unlike Goldman, which recently converted from a securities firm into a more traditional bank, JP Morgan has been a commercial bank from the beginning and thus it has large exposure to credit-card debt and other consumer loans that may go sour depending on the length and breadth of the recession.

Another person close to the situation says people at JP Morgan feel comfortable they have convinced both the Treasury and Fed that they should be allowed to repay the money along with the first group of banks that will be allowed to do so; that announcement, these people say, could be made as early as next week.

JP Morgan CEO Jamie Dimon has made no secret of his desire to repay the TARP money, and according to people close to JP Morgan, he’s likely “to go batshit if Goldman is able to repay before he does.”

Dimon just does not have the power over the administration that Goldman has, so it looks like he will be second whether he likes it or not…

JP Morgan Chase announced its first quarter earnings today at 40 cents compared to Bloomberg’s reported consensus expectations of 32 cents.  The release can be found here.  Most of their earnings came from investment banking activities which are non-recurring in nature:

“Revenue in the investment-banking unit was a record $8.3 billion, including $4.9 billion from fixed-income trading alone. The business generated $3 billion in the same period a year earlier. Investment-banking profit was $1.61 billion, compared with a loss of $87 million in the first quarter of 2008.”

Most of the investment banking unit’s business was handed to it by the federal government intent on making the sacred banks money by sacrificing taxpayer money at their alter.  So… about 75% of Dimon’s earnings for the quarter are not likely to recur.  In addition, the future for chargeoffs is bleak.

JP Morgan has, compared to the rest of the banks a fairly high Tangible Common Equity of $87.2 billion of tangible common equity or 7.2% of risk-weighted assets.  Rolfe Winkler shows TCE for Morgan at 72 as of year end.  How the company was able to increase its TCE by $15B  in one quarter is unclear to us. (update: Rolfe Winkler tells me in an email: “They’re ignoring mortgage-servicing rights, which FASB classifies as intangibles.  By my calc, TCE would go from $72 billion to $74 billion.”)  However, since they compare favorably to other banks in this conservative measure, they are proud of it (from footnote b of the release):

“Tangible Common Equity (“TCE”) represents common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less identifiable intangible assets (other than MSRs) and goodwill, net of related deferred tax liabilities. TCE is, in management’s view, a meaningful measure of capital quality.”

They should be proud of it – if its real.

We all recall the recent boasting by Citi, B of A and JP Morgan that earnings in Jan and Feb were positive and the subsequent backpedaling that occurred regarding March.  Euromoney is questioning whether the banks can deliver on these new raised expectations. They document that investment banking fee revenues have supplied some profits, but that the trend is down, globally. The other three main lines of business are also down:

“In other business lines, revenue has collapsed. Banks made just $679 million in net revenues from syndicated loans in the first three months of 2009, down from $1.5 billion in the fourth quarter of 2008 and $2.8 billion in the third quarter and just one-eighth as much as in the high-water-mark second quarter of 2007.

Revenue from M&A in the first quarter of 2009 was running at just above half the rate of that in the fourth quarter of 2008, down from $4.5 billion to $2.6 billion in the first quarter to March 27. Quarterly revenues from M&A had run above $5 billion for the first three quarters of 2008, having peaked at above $8 billion in the last quarter of 2007.

ECM revenue has not been as robust as one might have hoped, dropping to $1.8 billion with two days to go until the end of the first quarter from $2.6 billion in the final quarter of 2008 and at barely half the rate of $3.7 billion in the first quarter of 2008. ECM revenues’ most recent peak was in the final quarter of 2007 at $6.9billion.

Put the four business lines together and total revenue for the year to March 27 is $9.2 billion, compared with $10.7 billion for the prior final quarter of 2008, $15.4 billion for the comparable first quarter of 2008 and $26 billion in the record second quarter of 2007.

Oddly, as March drew to a close, at the end of a month in which Vikram Pandit had talked up Citi’s capital strength and earnings capacity, the bank’s own credit analysts delivered a warning: don’t lose sight of the downside.  “In our opinion, investors are simply too optimistic about the earnings of the financials and may be disappointed if their expectations are not met. Although the earnings from continuing operations might provide some boost, we are afraid that potential additional write-downs could more than offset this”. “

The next 2 weeks of first quarter earnings reports will truly be interesting for followers of many companies, but for the banks, are we in for a disappointment?