If investors had any apprehension about Goldman Sachs (GS), that fear should have dissolved early Thursday as the investment-banking firm released its quarterly earnings. Here are some of the highlights from the report:

• The bank had earnings per share of $1.98
• Revenue of $9.07 billion, -0.5% year over year, but beating the consensus by $290 million
• Litigation costs came up to $1.45 billion, or $2.77 per share
• The investment-banking segment is doing well with a 13% year over year increase in revenue. Additionally, investment management revenue is up by 14% and equities revenue is up 24%
• Struggling business segments include investing and lending (-13% year over year), institutional client services (-6%) and fixed income, currencies and commodities (FICC) (-28%)

Backing the litigation out, we’re seeing a $4.75 earnings per share, which beats the analyst estimates by $0.86. All things considered, Goldman Sachs is proving its mettle as it makes strides and putting the financial crisis behind it.

While there are still some issues, the biggest at hand, FICC, can be blamed on external factors, such as the price of oil plummeting and gold and silver prices reacting strangely to uncertainty in global equity markets. All in all, Goldman Sachs has a solid footing.

Not the only bank doing well

Citigroup (C) also released its earnings report on Thursday, beating on both earnings and revenue. Check out the highlights:

• Earnings per share of $1.45, beating by $0.11
• Revenue of $19.15 billion, down 1.6% from this time last year, but beating the consensus by $40 million
• Consumer banking revenue down 4% year over year (up 1% if you take out currency fluctuations)
• Institutional client group revenue up 6% year over year
• Citi Holdings revenue down 16%

The biggest news about Citigroup is it delivered its highest profit in eight years. The main reason for that is that the third-largest U.S. bank was able to slash its litigation costs. This time last year, the firm’s profits were almost completely wiped out by the $3.7 billion it paid to the Justice Department over mortgage-related probes.

The bank continues to cut costs in its consumer-banking segment by moving more toward technology platforms and exiting some countries. Bloomberg reports that the big bank “agreed Tuesday to sell its operations in Panama and Costa Rica to Bank of Nova Scotia, which agreed last year to buy the lender’s retail-and commercial banking business in Peru.”

Citi Holdings, which is where Citigroup has stashed its unwanted assets it wanted to sell, had a profit of $163 million. So while revenues are down for the business, it’s mostly because assets are down, by $116 billion.

Last week, we got some more-or-less good news from the first big banks to kick off the earnings season. Wells Fargo’s (WFC) earnings were in line with a $1.03 per share estimate, though its revenues of $21.3 billion missed by $390 million. JPMorgan Chase (JPM) also beat earnings estimates with $1.54 per share, beating the consensus by $0.10. Its revenues came in weaker than expected, though, its $24.53 billion missing the estimate by $800 million. Regardless, both banks saw their stocks soar after their earnings.

What this means

As the banking industry gets further away from the mortgage-bond fueled financial crisis and litigation costs peter out, it’s becoming more and more apparent that they’re putting their best foot forward and getting back on the right track. Although there are still some lagging litigation issues that may hold value growth back, now is the time to start investing in banks again.