JPMorgan Chase Earns $2.7 Billion

July 16, 2009— -- Wall Street got another pleasant surprise this morning, when JPMorgan Chase reported a second-quarter profit of $2.7 billion, an increase of 36 percent from the same period last year.

That's right. The nation's largest bank (by market capitalization) posted a profit, leading some to see this as a strong sign that the battered banking industry, and the U.S. economy as a whole, might finally be on the road to recovery.

Today's earnings report, which exceeded analyst expectations, comes two days after Goldman Sachs reported a $3.44 billion profit in the second quarter. Investors now look ahead to tomorrow's earnings reports from Bank of America, Citigroup and General Electric, which has a large lending arm.

"While we do not know if the economy will deteriorate further, we feel confident we can continue to reinvest in our businesses and do well for our clients, communities and shareholders over the long term," JP Morgan CEO Jamie Dimon said in a statement this morning.

"During the quarter, we maintained our efforts to support economic recovery and to help keep people in their homes," Dimon said.

Both JP Morgan and Goldman Sachs -- as well as all other major U.S. banks -- borrowed money at the end of 2008 from the federal government to help shore up their balance sheets. JP Morgan received $25 billion in TARP funds last fall, and Goldman received $10 billion.

"Banks are finally doing what they are supposed to be doing: They're making a lot of money," ABC's "Good Morning America" correspondent Bianna Golodryga said this morning from the floor of the New York Stock Exchange.