Big banks and major trading desks appear poised to report positive first quarter results as two of the nation's biggest banks beat Wall Street's expectations on Tuesday, analysts said.
Large institutions are benefiting from the strength of trading activity, while medium-size banks may only turn in mediocre results as it remains difficult to drum up income from loans and other interest-based businesses, analyst Dick Bove said.
"I think there will be a split in terms of where the earnings show up. They'll be good for the big banks, won't be as good for the middle-sized banks," Rafferty Capital Markets' vice president of equity research said on CNBC's "Squawk Box."
JPMorgan's performance was driven by growth in its fixed income and equities trading businesses, which grew 5 percent and 22 percent, respectively, said Paul Miller, analyst at FBR Capital Markets.
They've been struggling a little bit on the principle trading because of that lack of volatility in the currency and commodity markets," Miller said on CNBC's "Squawk on the Street," adding that the return to normal levels of volatility should help trading lines.
Traders are typically able to find opportunities for profit when asset prices are volatile.
Other banks with big trading desks—Goldman Sachs, Morgan Stanley and Citigroup—will have some explaining to do if their trading businesses do not follow the same trend as JPMorgan's first quarter performance, Miller said.
As for lending, commercial and industrial loans performed well throughout the winter, which should boost big regional banks, Bove said.
But weakness in residential loans will be a drag on smaller regional and community banks and will continue to weigh on big banks' balance sheets, analysts said.
"Anything to do with residential lending, whether it's home equity loans or mortgages, did very badly," Bove said, noting the poor performance was not due to lack of demand, but government regulation that discourages banks from issuing home equity loans.