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  So far, so good for bank stocks.

This morning, July 14, JPMorgan Chase (JPM) reported second quarter earnings of $1.09 a share. Not only was that a 289% increase from the second quarter of 2009 but it beat Wall Street projections for a 159% jump in earnings and earnings of 73 cents a share.

Some—myself included—had worried that Wall Street expectations for bank earnings had gotten way ahead of themselves and that banks would be unlikely to meet those projections. (For more on that worry see my post July 7 post Watch for a buying opportunity on my watch-list banks if earnings disappoint this quarter .)

You can take that worry off your list.

But that’s not to say that Wall Street hasn’t found something to worry about in these numbers. The concern boils down to a banking specific version of the stock market’s general worry about economic growth. The surge in earnings, bank analysts are pointing out this morning, is due to a big reduction in provisions against loan losses. That’s fine if the bank has pegged the turn in the credit markets correctly. But if the economy is weaker than expected, these reductions won’t be repeated in future quarters and might even need to be reversed.

That plus the company’s caution in its just concluded conference call has muted the response to the earnings surprise. The shares opened at $40.72, just 37 cents a share above the previous close.

The big story in the earnings report was a huge drop provisions against bad loans. After seeing earnings take a hit quarter after quarter as the bank put aside more money against potential losses from bad loans, the trend is now working in the bank’s favor with cuts in loan loss provisions adding to earnings. For example, JPMorgan Chase cut loan loss provisions in its retail banking unit by $2 billion in the quarter. In the credit card business, a problem area during the recession, the bank cut loan loss provisions by $2.4 billion. That helped the credit card business earn $343 million against a loss of $672 million in the second quarter of 2009.

 Not all the news was great in the quarter. As expected, revenue from fixed-income fell for the quarter to $3.6 billion from $4.9 billion in the second quarter of 2009. Net income from investment banking fell by 6% from the second quarter of 2009.

 JPMorgan Chase was extremely cautious in its conference call, saying it expected home prices to continue to decline “a little bit more” and refusing to put a date on when the bank might begin to raise its dividend toward pre-financial crisis levels.