0117 citibank
A pedestrian walks by a CitiBank branch office on April 18, 2011 in San Francisco, Calif. Citi reported earnings today. - 

Jeremy Hobson: We got earnings this morning from two banks. Citigroup said it made $1.2 billion dollars last quarter, down 11 percent from a year earlier. Wells Fargo said it made $4.1 billion; that is up 20 percent from a year earlier.

For more, let's bring in our New York bureau chief Heidi Moore, who joins us live. Good morning, Heidi.

Heidi Moore: Good morning, Jeremy.

Hobson: So make sense of these earnings for us.

Moore: Sure, absolutely. Well what we saw was the banks still profitable, which is great. But we have to take a close look at the fourth quarter, which is the last three months of the year. The banks who have reported so far -- J.P. Morgan, Citigroup, Wells Fargo -- all did really well until October.

And then, that's when the European debt crisis hit, and we saw the evidence of a credit crunch. And we're still seeing that evidence of a credit crunch, so that's what we have to keep an eye on going forward. That's where the banks got hit.

Hobson: Why the difference between these two banks this morning -- with Wells Fargo doing better than it did a year earlier, and Citi doing worse?

Moore: This is where you see the banks start to distinguish themselves in how they've chosen to run their businesses, right? So, Citigroup still has significant investment banking -- it serves companies and does a lot of trading. Wells Fargo focuses on businesses, and consumers, and lending, and right now, that's doing quite a bit better. Wall Street is suffering -- you're seeing that where Citi and J.P. Morgan are concerned. And Wells Fargo's doing very well because the consumer is doing better.

Hobson: Heidi, what do these earnings tell us -- if anything -- about the health of the overall economy?

Moore: It tell us quite a bit. It does tell us that there's probably some strength left there. Lending still can go up -- and is going up -- at Wells Fargo and at J.P. Morgan. And it's also telling us that we have to be careful at the higher reaches of finance -- where Europe is concerned, where debt is concerned, where investment banking is concerned -- because once that hits the banks, it can crawl throughout the economy. So we have to keep an eye there.

Hobson: Marketplace New York bureau chief Heidi Moore. Heidi, thanks a lot.

Moore: Thank you, Jeremy.

Follow Heidi N. Moore at @moorehn