US Banks: 2Q26 Regional Bank Preview: Time to take center stage

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US Banks: 2Q26 Regional Bank Preview: Time to take center stage

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US Banks

2Q26 Regional Bank Preview: Time to take

center stage

Price Objective Change

Stage set for that elusive re-rating 07 July 2026 Corrected

We see the set-up in place for realizing the long sought after re-rating in regional bank Equity

stocks given a generally constructive operating backdrop (loan growth, credit quality, United States

capital flex) and improving macro visibility. The broadening out in the stock market rally Banks

– Russell 2000 outperformance vs. the S&P 500 – is also timely given the group's Ebrahim H. Poonawala

struggle in catching the interest of the generalist investor. This despite regional banks Research Analyst

being on track to deliver double-digit EPS growth in 2026 and again in 2027 based on BofAS+1 646 743 0490

BofA/consensus forecasts; with ROTCEs at their highest levels in over a decade. See ebrahim.poonawala@bofa.com

page 2 for EPS revisions & PO changes by bank. Brandon Berman

Research Analyst

BofAS

+1 646 855 3933But there is always a villain

brandon.berman@bofa.com

The single biggest bottom-up risk to EPS outlooks (or headwind to positive EPS

Gabriel Angelini

revisions) is increasing funding cost pressure as banks pay up for deposits, creating Research Analyst

uncertainty tied to the incremental EPS boost from fixed-asset repricing. While not BofAS

+1 646 855 3081

insurmountable, investors will need comfort that management teams can navigate these gabriel.angelini@bofa.com

pressures and translate potentially stronger revenue growth into positive EPS revisions. Michael Campos

We expect investors to be forgiving of incrementally worse net interest margins, as far Research Analyst BofAS

as NII growth momentum is maintained.