The firm earned $23.1 billion in NII in the first three months of 2024, up 11% from a year earlier, according to a statement Friday. It still expects to earn about $90 billion from the key revenue source this year but lifted its guidance excluding the markets business to about $89 billion. Chief Financial Officer Jeremy Barnum said the lower expected markets-related NII would be "bottom-line neutral."

The bank's NII haul ended a streak of seven quarters where it posted record levels of the metric. JPMorgan Chief Executive Officer Jamie Dimon cited deposit margin compression — tightening of profits between what the bank earns on loans and pays out on deposits — and lower deposit balances in the consumer business for the sequential decline.

"Looking ahead, we expect normalization to continue for both NII and credit costs," Dimon said.

Shares of JPMorgan, up 14.9% this year through Thursday, were down almost 5% at 10:30 a.m. in New York.

The results and outlook for revenue from lending bucked the forecasts of some analysts who'd been hoping for more.

"We'd expected the NII trend and commentary to steal the show for a minute and think the most bullish JPM fans were hoping for a bigger upside guide than we got," Evercore ISI analyst Glenn Schorr wrote in a note Friday. "As Jamie has been telling us, the beat & raise party had to end at some point."

Adjusted expenses, meanwhile, could come in at about $91 billion for the year, higher than predicted earlier. Costs for the first quarter were up 13%, driven by higher compensation and a $725 million charge for an additional Federal Deposit Insurance Corp. assessment tied to a pair of bank failures last year.

Friday's results come as investors seek to assess the Federal Reserve's interest rate trajectory, particularly after an inflation reading Wednesday came in higher than expected. Dimon has been warning for months that inflation could be stickier than markets predict and wrote in his annual shareholder letter on Monday that his firm is prepared for interest rates ranging from 2% to 8% "or even more."

On Friday, the CEO said the plethora of uncertainties including war, geopolitical tensions and inflationary pressures loom even as some economic indicators remain favorable.

"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," Dimon said.

Wells Fargo also missed estimates for net interest income when it reported results on Friday while Citigroup beat expectations with its first-quarter NII haul. Goldman Sachs Group, Bank of America and Morgan Stanley's earnings are scheduled for next week.

JPMorgan also reported a surprise $72 million net reserve release, while analysts had predicted a $556 million build.

Investment banking revenue came in at $2 billion, above analyst expectations. Markets revenue fell 5%, less than expected with both equity and fixed-income trading beating estimates.