And we can provide both off our sort of exceptionally strong long-time DCM franchise. So that’s been a priority. And we’re actually already starting to see some results from that across both the Commercial Bank and the CIB, with certain client segments. And in the bigger picture, of course, in the context of the Basel III Endgame, people talk a lot about the risk of certain lending activity getting pushed out of the regulated perimeter. It’s important to be clear, right, these are important clients of ours too. We compete with them. They’re also clients. And in the end, our point here is just people, and regulators in particular, should just be aware of the likely consequences of what’s happening here and make sure that the results are intentional and that we’re looking around the corner a little bit.
Glenn Schorr: Anything specific on asset back? It’s an important part of your business too. Do you see it following the same path as direct lending has?
Jeremy Barnum: It’s interesting. I haven’t heard much about that, Glenn, so we can look into it for you. But to be honest, the fact that I haven’t heard much makes me think that it’s maybe not such a big driver right now.
Glenn Schorr: Okay. Cool. Thank you for that.
Operator: And for our final question, we’ll go to the line of Charles Peabody from Portales Partners. You may proceed.
Charles Peabody: Thank you. I have a question about the role that First Republic plays in your NII forecast. I’m assuming because you’ll have a full year in ’24 First Republic, that their contribution of NII will be up, let’s say from $3.7 billion this year to $5 billion to $6 billion next year. But given that you’re forecasting six rate cuts, is that a detractor to your assumptions of NII from First Republic? Or – I mean, you have that FDIC note, and then you also have a significant amount of adjustable rate mortgages that I assume are repricing upwards. So if you’re talking about rate cuts, that would hurt your NII forecast from First Republic, I’m guessing. But if rates stay higher for longer, wouldn’t First Republic be a much bigger contributor? So talk about the sensitivities of First Republic there.
Jeremy Barnum: Yes. Thanks, Charlie. So one thing that we said when we kind of gave First Republic guidance at Investor Day earlier this year is that while we understood the need to track that, and we’ve been splitting out First Republic in our reported results in order to improve period on period comparability, we kind of want to stay out of the business of guiding on First Republic. And so we really focused on having our guidance be firm-wide, including First Republic, now that everything is embedded in the franchise. Having said that, let me just react to a couple of things that you said. So again, I don’t want to get into like micro validation one way or the other of some of your back-of-the-envelope math, but we did have some accelerated pull to par on some of the accretion of some of the loans that we purchased this year.
So I think the annualization that you’re doing is maybe a bit high for the 2024 number. And then from a sensitivities perspective, I actually think I can simplify the math for you a little bit and just kind of direct you to the EAR for my response to the prior question, because that EAR fully includes all of the First Republic assets and liabilities with all of their various dynamics. And so I think that’s kind of like an easier way to think about it for the company.
Charles Peabody: Just to make sure I understood what you’re saying. So you have NII ex-Markets going from $94 billion to $88 billion. Within that, would the contribution from First Republic be down as well, or up?
Jamie Dimon: It was kind of head-matched the day we did it, so.
Jeremy Barnum: Yes. I mean, I can probably answer that question if I think about it for a second, but it sort of violates my prior statement that I really don’t want to get into the business of guiding on First Republic. If I do the big picture, right, so big picture, 2023, we had eight months of First Republic NII. 2024, we’re going to have 12. So all else equal, there’s calendarization in there. What’s also true is that in 2023, as a result of the impact of the NII of the pull to par of certain relatively short-dated assets that we fair valued at a meaningful discount as part of the transaction, that sort of – that pulled to par happens quite quickly and therefore probably juice the 2023 number a little bit. So therefore, straight annualization is probably not the right way to think about it. Then you just get into the questions about the FTP and the funding and whatever, and then it’s just like too complicated. So I’d rather not go there.
Charles Peabody: All right. Thank you.
Operator: And we do have no further questions at this time.
Jeremy Barnum: Okay. Thanks very much, everyone.
Operator: Thank you all for participating in today’s conference. You may disconnect at this time and enjoy the rest of your day.
