2Q‘26 Earnings: Headline Beat Overshadowed By NIM/NII Miss

Research evidence excerpt

2Q‘26 Earnings: Headline Beat Overshadowed By NIM/NII Miss

II could approach high-single-digit growth assuming one Fed rate hike, *Rev.Source:(MM)Visible Alpha

with additional upside under a two-hike scenario given the company's asset sensitivity, although Source: Visible Alpha

achievement of the outlook remains dependent on deposit growth occurring at attractive pricing.

While no explicit NIM guidance was provided, management expressed confidence that margin

has further upside, supported by fixed-asset repricing and a diminishing swap-related headwind.

Fee income is guided to be moderately increasing (in line with prior guidance), with management

continuing to anticipate results near the upper end of the range. Growth is expected to be broad-

based, with capital markets remaining a key contributor. Core expenses are guided to be moderately

increasing (in line with prior guidance), though management continues to expect positive operating

leverage, reaffirming its FY26 target of 100-150 bp (ex. Visa gain). Deposits are guided to benefit

from normal seasonal strength in 2H26, with interest-bearing deposit growth likely to outpace non-

interest-bearing deposit growth in the near term. Management also acknowledged some ongoing

funding cost pressure but remains constructive on deposit trends.

Estimate changes and valuation. We are raising our 2026 core EPS estimate to $6.80 from $6.60,

owing to lower loan loss provision assumptions. There is no change to our 2027 EPS estimate

of $6.90. We maintain our Buy rating, as we believe the company's outlook for key growth drivers

continues to skew favorably, driven by margin expansion, disciplined expense control, and operating

leverage. David Chiaverini, CFA * | Equity Analyst

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