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JPMorgan Chase’s profit rose 6% in the first quarter, although its shares dropped after the bank’s forecast for its income from interest payments came in below analysts’ expectations.

High borrowing costs have helped lenders boost net interest income (NII), or the difference between what banks earn on loans and pay out for deposits.

However, banks are factoring in the possibility of cuts in interest rates by the U.S. Federal Reserve later this year.

JPMorgan, the biggest U.S. bank by assets, also added billions of dollars of loans to its balance sheet after acquiring failed First Republic Bank in May last year, fueling its interest income further.

CEO Jamie Dimon, however, stuck to his cautious tone, despite growing optimism in the last several months about a soft landing for the economy.

“Many economic indicators continue to be favorable. However, looking ahead, we remain alert to a number of significant uncertain forces,” he said in a statement.

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Those include “unsettling” global conflicts, persistent inflationary pressure and quantitative tightening, Dimon said.

The bank expects full-year NII, excluding trading, of $89 billion, depending on market fluctuations. That is up from a previous estimate of $88 billion but lower than the $90.68 billion analysts had expected, according to LSEG.

Shares of the bank fell 3.5% in trading before the bell. The bank’s executives have warned for months that its surging NII was not sustainable.

Despite the fall in shares, analysts believe that this was yet another “solid” quarter from JPMorgan.

“The bank’s financials looked very encouraging,” said Octavio Marenzi, CEO of management consultancy firm Opimas, adding that the only negative was the increase in non-interest expenses.

The lender also earmarked $725 million to replenish a government deposit insurance fund, less than the $3 billion it set aside at the end of last year.

JPMorgan was among the banking giants that made up the bulk of contributions to the Federal Deposit Insurance Corp fund, which was drained when three regional lenders failed last year.

That drove the bank’s expense forecast to $91 billion, compared with the $90 billion it had estimated earlier.

In contrast to peers that are trimming staff, JPMorgan added about 2,000 employees to its workforce of 311,921. That is 5% higher than a year earlier.

Profit was $13.42 billion, or $4.44 per share, for the three months ended March 31, compared with $12.62 billion, or $4.10 per share, a year earlier.

“Consumers remain financially healthy, supported by a resilient labor market,” Chief Financial Officer Jeremy Barnum said.

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Loans jumped 16% to $1.31 trillion, while NII rose 11% to $23.2 billion. Excluding the impact of First Republic, NII was still 5% higher than last year.

JPMorgan set aside $1.88 billion as provisions for credit losses, compared with $2.28 billion last year.

Trading revenue at the bank fell 5% to $8 billion, with revenue from fixed income, currency and commodities (FICC) dropping 7% and equities flat.

Investment banking revenue gained 27% to $2 billion, driven by higher fees earned on debt and stock underwriting. Fees earned advising on mergers and acquisitions (M&A), however, fell.

“We have some momentum in announced M&A, which is good to see, but there are regulatory headwinds there,” Barnum said.

Overall revenue rose 9% to $41.93 billion.

Succession

JPMorgan’s succession plans have been in focus for months, especially after Morgan Stanley and Lazard named new CEOs.

Contenders for the top job include Jennifer Piepszak and Troy Rohrbaugh, recently appointed co-CEOs of JPMorgan’s expanded commercial and investment bank, and Marianne Lake, CEO of consumer and community banking.

“We do not have any reason to believe that Dimon will depart in the immediate future,” said Brian Mulberry, client portfolio manager at Zacks Investment Management.

“There is a lot of speculation around him being offered some kind of Cabinet position in a new administration but neither candidate nor Dimon have given any indication that the rumor is even remotely plausible right now.”

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