While the stock market has rushed to record highs in recent months and companies are issuing bonds like nobody’s business, big banks have been unable to take advantage of the situation.

The 10 largest U.S. commercial banks and securities firms that have so far reported third-quarter earnings, registered a 6.9 percent drop in combined adjusted net income, The Wall Street Journal reported.

In particular, banks have suffered from falling demand for mortgages, poor results in bond trading and the tepid pace of economic recovery, according to the paper.

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"It continues to be a tough and uncertain environment," Kevin Kabat, chief executive of Fifth Third Bancorp, said in a conference call with analysts last week, The Journal noted.

While his bank’s profit surged 19 percent in the third quarter, lifted by an asset sale, this environment "doesn't give you anything," Kabat said. "You have to execute and take it."

Some bank analysts say results could be even worse in the fourth quarter, forcing the institutions to make layoffs, according to The Journal.

"If revenue is soft, folks don't get paid," Frederick Cannon, an analyst at Keefe, Bruyette & Woods, told the paper.

A substantial portion of the earnings that banks are reporting now comes from the release of loan-loss reserves, and that's not high-quality earnings.

"Everyone is looking at this," Moshe Orenbach, a bank analyst at Credit Suisse, told Fortune. "At some point this runs out."

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