2Q‘26 Earnings: Beat & Raise Quarter Driven by Loan Growth & Capital Markets

Research evidence excerpt

2Q‘26 Earnings: Beat & Raise Quarter Driven by Loan Growth & Capital Markets

modest upward estimate revisions. *Rev. (MM)

Guidance for FY26 raised across loans, NII, fees, revenue, and expenses, reflecting stronger

business momentum and supporting modest upward PPNR revisions. Loan (avg) growth

guidance for FY26 was raised to 12.5% (vs.11% prior), driven by broad-based C&I growth, higher

utilization rates, continued share gains in newer markets, and improving CRE pipelines. NII growth

guidance was raised to 15%-15.5% (vs. 14.5% prior), while fee income growth was increased to 9%

(vs. 6% prior) and total revenue growth to 13.0% (vs. 11.0% prior), reflecting stronger capital markets

activity and treasury management growth. Adjusted expense growth guidance was increased

to 8.5% (vs. 7.0% prior), which management attributed to higher business activity and revenue

opportunities, while maintaining its effective tax rate outlook at 19.5%. For 3Q26, management

expects avg. loans to increase 1%-2%, NII to increase 3.0%-3.5%, fee income to decline 5.0%-5.5%

from elevated 2Q'26 levels, adjusted expenses to decline 2.0%-3.0%, and NCOs of $225M.

Estimate changes and recommendation. We are increasing our 2026/2027 core EPS estimates

to $19.25/$21.80 from $19.20/$21.35, reflecting stronger loan growth, improved NII expectations,

and higher fee income, partially offset by a higher expense outlook. We maintain our BUY rating,

supported by strong loan growth, durable NII momentum, a diversified fee franchise, improving

operating leverage, and robust capital generation.

David Chiaverini, CFA * | Equity Analyst

+1 (212) 778-8554 | dchiaverini@jefferies.com

Brian Violino, CFA * | Equity Analyst

+1 (212) 444-4139 | bviolino@jefferies.com