2Q‘26 Earnings: Modest Beat; Solid Loan & Deposit Trends; FY Guide Reiterated

Research evidence excerpt

2Q‘26 Earnings: Modest Beat; Solid Loan & Deposit Trends; FY Guide Reiterated

rated at 2.5%-4.0%, supported by fixed-rate asset turnover, funding cost *Rev.Source:(MM)Visible Alpha

management, and loan growth, and assumes a mostly stable yield curve with a constant fed funds Source: Visible Alpha

rate. NII for 3Q'26 was guided to increase 2% sequentially (in-line with our prior forecast). NIM for

3Q'26 was guided to be stable to modestly higher from 2Q'26 level of 3.66%, exiting the year at

3.70% (our prior 4Q'26 forecast was 3.71%). Adjusted fee income guidance for 2026 was lowered to

the low end of prior guide of 3%-5%. Capital markets quarterly revenue guide for 2026 was reiterated

at $90-$105 mn, with 3Q'26 capital markets income at the lower end of the range compared to our

prior forecast of $98 mn for 3Q'26. Adjusted expense guide for 2026 was reiterated at 1.5%-3.5%. RF

reiterated its expectation to generate positive operating leverage in 2026. Loan growth (avg) guide

for 2026 was reiterated at LSD. Deposit growth (avg) guide for 2026 was reiterated at LSD. Net

charge-off guide for 2026 was reiterated at 40-50 bp of average loans. Near-term CET-1 (inclusive

of AOCI) guide was reiterated at the midpoint of 9.25%-9.75% operating range (2Q was 9.70%). Tax

rate guide for 2026 was reiterated at 20.5%-21.5%.

Estimate changes and recommendation. There are no changes to our 2026/2027 core EPS

estimates of $2.60/$2.85. We maintain our HOLD rating as we believe that the company's outlook

is appropriately reflected in its relative valuation.

David Chiaverini, CFA * | Equity Analyst

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

Brian Violino, CFA * | Equity Analyst

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

FY (Dec) 2024A 2025A 2026E 2027E Frank Williams * | Equity Analyst