Goinginto the first-quarter earnings season, the largest U.S. banks gave a heads-up tothe market: Investment banking revenues had been poor and energy reserves wouldbe higher. Analysts accordingly pulled down EPS estimates, and earnings matchedor easily cleared the lower bar.

The first-quarter data included substantial year-over-year dropsin operating EPS growth. Among other factors, equity and debt underwriting weredown from a year ago, by 49% and 35%, respectively, at JPMorgan Chase & Co. and by 49% and 22% at Bank of America Corp.'s investment banking fees dipped 22%from the same period last year.

For JPMorgan, there was also a 13-cent-per-share hit from wholesale credit costs, largelyfrom oil and gas and, to a lesser extent, metals and mining. At BofA, energy reservesincreased more than a half-billiondollars sequentially. Total nonaccrual loans at Citi increased sequentially forthe first time since the third quarter of 2012. Within the company's corporate division,nonaccruals were up 46%from the prior quarter and 97% from a year ago, again mostly because of energy.

With the market already expecting oil-and-gas issues, the absenceof increased provisions would have been met with skepticism, noted Piper Jaffray's Kevin Barker.Their presence, meanwhile, indicated "banks [had] put themselves in a positionto handle the credit losses sooner rather than later."

remained crucial — but insufficient. BofA lowered noninterestexpense by almost $1 billion year over year, and still barely budged its efficiencyratio. On the other hand, "regulatory and compliance costs have started toplateau," according to Citi CFO John Gerspach. Legal reserves, meanwhile, wereno longer dead weight. And"regulatory and compliance costs," Citi CFO John Gerspach said, actually"started to plateau."

At ,the first quarter was highlighted by revenuegrowth, in what Oppenheimer's Chris Kotowski called "a bit of amessy quarter." Wells was the only one of the four with positive operatingrevenue growth year over year, and much of that was attributed to recently acquiredassets from GE Capital.

The restof 2016 may hold reason for optimism. The December 2015 rate hike has begun to bearfruit — JPMorgan's net interest margin was at a three-year high. Investment bankingpipelines are also looking strong. Gerspach commented on Citi's "significantbacklog of [pending]deals" with clients, and BofA CFO Paul Donofrio pointed out on an earningscall that the recent volatility has pushed transactions back— not canceled them.

Gerspachwas wary of discussing targets while "still trying to figure out what the marketenvironment is going to be for the balance of this year." JPMorgan CFO MarianneLake, on the other hand, noted March's relative stability has continued into April— though she added they are still proneto corrections.