Performance for the third quarter could rest as much on what happened in the courtroom as the boardroom.
No institution will feel that pinch more than Bank of America , which had to pay a $17 billion settlement during the quarter, primarily related to alleged misdeeds from Merrill Lynch and Countrywide, both of which were acquired during the dark days of the financial crisis. The settlements resolved claims over subprime lending, which saw mortgages approved for less-desirable borrowers often under onerous terms.
Ditto to a lesser degree for Citigroup , which shelled out $7 billion on its own behalf to settle claims.
As a result, the two firms will be on the lower end of earnings, reporting of which will begin this week when the four largest U.S. banks plus a few other big Wall Street names will provide quarterly results.
BofA, the second-largest bank, is on one end, and is expected to show a loss of 9 cents a share when it reports Wednesday, according to FactSet. That loss will come on expected revenue of $21.34 billion, which would be about a 1 percent drop.
On the other end of the big-bank spectrum is Goldman Sachs , which analysts expect on Thursday to report powerful earnings of $3.21 a share on sales of $7.82 billion.
In between are Citi, predicted to show a profit of $1.12 a share on sales of $19.16 billion, and Wells Fargo , which kicks things off Tuesday amid consensus expectations of $1.02 a share on revenue of $21.1 billion.
Other big earnings reports will come from JPMorgan Chase , the No. 1 bank in assets, which also is due up Tuesday and expected to show a $1.38 per share profit on $24 billion in revenue, and Bank of New York Mellon , the No. 5 bank, which reports Friday and likely made 61 cents a share on $3.73 billion in sales.
Some highlights to watch:
The fourth-largest bank by assets, red-hot Wells Fargo "has triple outperformed the S&P 500 so far this year," noted analyst Dick Bove at Rafferty Capital Markets.
"The company is overcoming weakness in its net interest margin and in the residential mortgage market due to its diversified product base and its strong marketing capabilities." Estimize noted that Wells only funded $47 billion in mortgages for the second quarter, a long-term lower number but much better than the first quarter's $36 billion total. "Investors will look for that momentum to continue in the third quarter."
For Citi, one of the most marked improvements has been in mergers and acquisitions. Compared with its competitors, Citi has made the biggest move into deal-making territory in 2014, with M&A revenue jumping 265 percent to $581.4 billion. It leapfrogged from ninth to third overall.
"We are extremely proud of the performance of our M&A franchise and the strategic advice and solutions that we have delivered to our clients in 2014," Mark Shafir, Citi's co-head of global M&A, said in a statement to CNBC.com. "Our strong results are in part because of the strategic investments that we made in our team, starting in 2010, such as in energy, industrial and (technology, media and telecommunications), as well as our intense focus on improving our sell-side business, led by the quality of our strategic dialogue."
More broadly, as loan growth expands, loss provisions also will have to grow. This could be problematic, as SNL Financial noted in an analysis:
Based on similar thinking, net charge-offs as a percentage of average loans are expected to climb for at least 14 of the top 20 banks. When charge-offs were steadily declining, most banks were able to release loan-loss reserves that they had built up following the crisis. This money then dropped to the bottom line and helped lift earnings.
"Earnings for ourselves and others have been augmented by unsustainable credit reserve releases," PNC Financial Services Group Inc. President and CEO William Demchak told investors at a conference in September.
Overall, for the top 20 banks Sandler O'Neill anticipates "flattish margins, rising net interest income and slight efficiency improvement," the firm said in a note cited by SNL.
For those banks, Sandler expects earnings growth of 1.6 percent, which is below the expectations for any of the broader sectors on the S&P 500. Financials overall are expected to grow 5.6 percent, according to S&P Capital IQ.
Read More Kudlow: Here's why I agree with Buffett