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JPMorgan Chase beats in first-quarter earnings as Dimon warns of ‘unsettling’ global landscape

FILE - The logo of JPMorgan bank is pictured at the new French headquarters of JP Morgan bank, Tuesday, June 29, 2021, in Paris. JPMorgan Chase is defending itself against a lawsuit by the U.S. Virgin Islands accusing it of empowering Jeffrey Epstein to abuse teenage girls. Lawyers for the giant bank said in court papers Tuesday, May 23, 2023, that it was the islands that enabled the financier to commit his crimes. (AP Photo/Michel Euler, Pool, File)

New York (CNN) — JPMorgan Chase, the largest bank in the United States, kicked off earnings season Friday with a beat, but also a warning.

The bank’s first-quarter revenue increased by 9% from the year before, to $41.9 billion. That’s more than analysts surveyed by FactSet had expected.

Earnings per share came in at $4.44, also higher than the $4.17 estimated by FactSet.

Still, CEO Jamie Dimon warned investors that trouble could lie ahead. “Many economic indicators continue to be favorable. However, looking ahead, we remain alert to a number of significant uncertain forces,” he wrote in a press release Friday.

“First, the global landscape is unsettling — terrible wars and violence continue to cause suffering, and geopolitical tensions are growing. Second, there seems to be a large number of persistent inflationary pressures, which may likely continue. And finally, we have never truly experienced the full effect of quantitative tightening on this scale. We do not know how these factors will play out, but we must prepare the Firm for a wide range of potential environments to ensure that we can consistently be there for clients,” he said.

JPMorgan Chase acquired most of First Republic Bank’s assets last May after the San Francisco-based regional bank was seized by the government.

That acquisition added billions of dollars in loans to the bank’s balance sheet, boosting its income from interest.

JPMorgan Chase reported that average loans had increased 16% from the year before, mostly because of First Republic. Net interest income from those loans (that’s the money a bank earns from loans minus the interest it pays on deposits) increased by 11% to $23.2 billion.

The impact of ‘higher for longer’ rates

Net interest income, or NII, has been a key metric for analysts this quarter as they look to see how banks react to elevated interest rates by the Federal Reserve.

Banks, including JPMorgan, have brought in record profits, boosted by NII, as the central bank raised interest rates.

JPMorgan Chase also said on Friday that it would take a one-time $725 million charge by the Federal Deposit Insurance Corporation related to the mess that Silicon Valley Bank and Signature Bank left in the wake of their collapses last spring. It was large banks that mostly footed that bill.

Shares of the bank fell by 2.7% in premarket trading but are up 52% over the last 12 months.

Separately, investment giant BlackRock reported that its assets under management swelled to a record $10.5 trillion during the first quarter. The company also beat top- and bottom-line expectations.

Wells Fargo, which also reported its first-quarter earnings Friday, topped Wall Street’s expectations but saw an 8% decline in net interest income from the prior year. The company also noted a $284 million expense during the first quarter related to the FDIC’s special assessment.

This story is developing and will be updated.