JPMorgan Chase & Co.’s losses in prime mortgages rose “dramatically” in the second quarter, Michael Cavanagh, the company’s chief financial officer, told reporters in a conference call Thursday morning.

Cavanagh said that capital markets will stay “challenging” this year and that the company reported no gain in the second quarter from its acquisition of Bear Stearns Cos.

Earlier Thursday, JPMorgan reported a 53% plunge in second-quarter net income. Credit-loss provisions more than doubled, and its investment bank cut the value of leveraged-loan and mortgage-related securities by $1.1 billion.

JPMorgan’s earnings of 54 cents a share beat analysts’ average expectation of 44 cents a share, as calculated by Thomson Reuters, and the stock of JPMorgan rose in 4.6% in premarket trading to $37.61.