JPMorgan Chase (JPM) disclosed a 7.3% slowdown in fourth-quarter profits on Tuesday, but managed to surpass forecasts thanks to lower loan-loss reserves that helped offset slumping investment-bank revenue.

Shares of the largest U.S. bank, which has been slammed by roughly $20 billion in legal settlements over the past year, ticked slightly higher on the earnings beat.

Kicking off earnings season for big banks, JPMorgan said it earned $5.28 billion, or $1.30 a share, last quarter, compared with a profit of $5.69 billion, or $1.39 a share, a year earlier. 

Excluding one-time items like 27 cents a share in legal costs, the bank said it earned $1.40 a share. Analysts had been calling for EPS of $1.35.

Revenue fell 1.1% to $24.11 billion, narrowly topping the Street’s view of $23.67 billion.

“We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter,” JPMorgan CEO Jamie Dimon said in a statement.

JPMorgan continues to benefit from lower reserves for bad loans. The bank’s earnings were boosted by $775 million, or 20 cents per share, due to reduced reserves in real estate portfolios and card services.

Overall provisions for credit losses slid to $104 million last quarter from $656 million the year before. Net charge-offs totaled $1.3 billion, down from $1.8 billion the year before.

The bank reported legal expenses of $1.1 billion during the fourth quarter, including costs associated with the settlement inked last week with U.S. authorities over the Madoff Ponzi scheme.

JPMorgan reported a 57% tumble in investment banking profits to $858 million as revenue fell to $6 billion from $7.6 billion. Net revenue was hurt by debit valuation adjustment losses of $536 million. Investment banking fees dipped 3% to $1.7 billion as debt underwriting fees slid 19% and advisory fees declined 7%.  

Looking ahead, Dimon sounded a positive tone on U.S. growth prospects.

“We are increasingly optimistic about the future of the U.S. economy and will continue to do our part to support growth, economic development and the creation of new jobs around the world,” Dimon said.

Shares of New York-based JPMorgan gained 0.52% to $58.00 in premarket trading on Tuesday morning. The bank’s shares have rallied about 26% over the past 12 months.

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