JP Morgan Chase & Co. (JPM) announced Thursday a 77.6 percent plunge in fourth-quarter profits, driven by a loss in investment banking largely attributed to continued markdowns and poor trading results, according to a statement by the company. Nonetheless, JP Morgan still managed to post a $702 million, or 7 cents per share, fourth-quarter profit -- largely due to a $1.1 billion boost from its acquisition of Washington Mutual -- compared to a profit of $3 billion, or 86 cents a share, in the same period last year. Without WaMu, JP Morgan told the Wall Street Journal it would have lost 28 cents a share. Chase's total net revenue eased to $17.23 billion in the quarter, from $17.38 billion last year. CEO Jamie Dimon called the results "very disappointing" in a press release Thursday morning, a tone he has taken for the better part of a year now. In addition to $2.9 billion in markdowns, Dimon noted that JPM boosted loan loss reserves by $4.1 billion during the quarter. Provision for credit losses jumped to $7.31 billion, a 26 percent rise from the third quarter. Benefits from hedging its mortgage servicing business, as well as gains from the WaMu acquisition, helped keep the company's retail financial services business in the black. The retail financial unit's net income fell to $624 million from the prior year, due to a $3.6 billion credit provision tied to rising estimated losses -- much of which sits in the company's home equity portfolio. Home equity losses rose sharply in the quarter, with charge-offs of $770 million in Q4 2008, compared to $248 million a year ago. Retail banking remained strong, however, as net income and revenue jumped a monstrous 85 percent and 78 percent, respectively (almost entirely due to a boost in deposits via WaMu). Straight-shooting Dimon warned of a "terrible" November and December in an interview with CNBC last month, thanks to what he called "normal culprits" of mortgages and credit. He did point out that the company continues to grow, despite industry headwinds. It bought the Canadian energy and global agricultural arms of UBS AG in Q4. "Earnings themselves may go up or down, but if you continue to grow the franchise, you'll do in the long run a very good job," Dimon told CNBC. Looking ahead to 2009, Dimon said Thursday that “if the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves." JP Morgan had originally planned to release earnings next week, but pushed that date up, making it the first of the major banks and to post fourth-quarter earnings. Write to Kelly Curran at kelly.curran@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.