Bank earnings beat expectations, but are they sustainable?

Earnings at most big banks outpaced expectations in the third quarter. Some banks, like JPMorgan Chase (JPM) and Wells Fargo (WFC), could even brag that they'd brought in record income so far this year. But for many investors, the question is whether better-than-forecast results are sustainable.

When it appears they aren't, things can take a turn for the worse in a hurry. While bank stocks recovered on Thursday, they fell significantly a day earlier when veteran banking analyst Richard Bove at Rochdale Securities cast doubt on Wells Fargo's chances to repeat its strong performance and recommended clients sell the stock as a result. Within moments of Bove's recommendation, the S&P 500 had fallen by 1.5 percent.