Back in the High Life Again...2Q Preview

Research evidence excerpt

Back in the High Life Again...2Q Preview

Financials | Regional Banks

July 06, 2026

John Pancari Back in the High Life Again...2Q Preview

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john.pancari@evercoreisi.com 2Q regional bank & spec fin EPS trends likely solid, but outlooks

Girard Sweeney are key amid higher-for-longer backdrop. We expect another

646 551 8503 relatively solid quarter at the regional banks and specialty finance

girard.sweeney@evercoreisi.com names marked by double-digit annualized EPS growth, MSD-HSD

Russ Anderson annualized revenue growth, strengthening loan trends, generally stable

212-497-0887 NIMs, solid fees, intact credit, and steady capital return. Still, we expect

Russ.Anderson@evercoreisi.com a much heavier focus on mgmt outlooks given prevailing risks

(geopolitical uncertainty, volatile rates & funding pressures, inflationary

stress), but also clear tailwinds (solid balance sheet growth, conducive

regulatory environment). Our updated rate forecast now incorporates

no rate cuts through the end of 2027 vs two prior. Bottom line: We

model solid 2Q trends and do not forecast a material weakening in

fundamental expectations at this time. We acknowledge mounting

funding pressures, but expect stress to be partly mitigated by banks’

generally asset sensitive balance sheets in the HFL rate environment,

while strengthening B/S growth remains a key positive. Combined with

manageable credit & healthy capital return – we remain constructive on

the regionals. Regional bank & specialty finance shares fared relatively

well through 2Q, +14.2% and +12.9% respectively vs S&P +14.1%.

However, at ~10.5x 2027 EPS and 55% of the S&P 500 fwd multiple,

we see incremental upside as fundamentals remain solid and

inflationary conditions potentially improve.

Ideas into 2Q26 results.