Wide-moat JPMorgan JPM reported better-than-expected third-quarter earnings, with normalized EPS of $3.09 compared with S&P Market Intelligence consensus of $2.24. Revenue also beat consensus. JPMorgan again showed why it is one of the premier U.S. banking franchises, as earnings continued to hold up remarkably well, even against a challenging macro backdrop. The adjusted return on tangible common equity was 19%. Net interest income came in roughly as expected, at $13 billion, while investment banking, trading, and mortgage fees all delivered strong growth in the quarter. The continued strength of the I-banking and trading operations has been impressive.
While these line items will eventually retreat to more normalized run rates, they have helped noninterest income grow substantially in 2020 in what otherwise should have been a uniquely challenging year. Mortgage fees had their best quarter in years, coming in at over $1 billion. Card income also continued its recovery in the quarter, and lending/deposit related fees returned to positive year-over-year growth. We project that net interest income will be lower in 2020 than in 2019, which is not surprising, given the more difficult rate environment. However, we project that the gains in fees of over $4 billion for the year will more than make up for our projected decline in net interest income of roughly $3 billion. Expenses came in as expected for the quarter. The company maintained guidance of $55 billion for net interest income and $66 billion for expenses.
After updating our projections for the latest quarterly results, we plan to increase our fair value estimate to $112 per share from $111 per share.
Another piece of good news was reserve development. Provisioning came in at only $600 million for the quarter compared with over $10 billion last quarter. Deferral development was also encouraging, with a little over half of deferral balances exiting their deferral arrangements during the quarter.
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