U.S. Mid- and Small-Cap Banks Post 2Q26 Earnings Outlook: With Messaging around Deposit Cost Competition Playing Out as Expected, We Remain Cautious

Research evidence excerpt

U.S. Mid- and Small-Cap Banks Post 2Q26 Earnings Outlook: With Messaging around Deposit Cost Competition Playing Out as Expected, We Remain Cautious

J P M O R G A N North America Equity Research

31 July 2026

U.S. Mid- and Small-Cap Banks

Post 2Q26 Earnings Outlook

With Messaging around Deposit Cost Competition

Playing Out as Expected, We Remain Cautious

While many of our banks beat consensus EPS estimates, regional bank stocks U.S. Mid and Small Cap Banks

AClargely performed in line with the broader markets and large banks since the start Anthony Elian, CFA

of earnings season. Despite the widespread beats, we were not surprised to see that (1-212) 622-5067

regional banks (as measured by the KRX) trade in line through earnings with the anthony.elian@jpmorgan.com

large banks (BKX) and broader markets (SPX) tied to (1) the outperformance that Michael Pietrini

regional banks have logged YTD heading into earnings season combined with (2) (1-212) 622-0618

“just enough” earnings and outlooks that were sufficient to maintain the michael.pietrini@jpmorgan.com

J.P. Morgan Securities LLC

outperformance YTD rather than drive any additional outperformance. Beyond

earnings, we continue to take a cautious approach on the sector tied to our view that

deposit cost competition, which has been the number one area of investor focus,

Snapshot of 2Q26 Median Resultswill intensify from already elevated levels as (1) loan growth trends remain solid

per recent management commentary with little to suggest a slowdown in 2H26, Category Median

while (2) the forward curve calls for a couple of rate hikes over the next few

NII Chg +9%

quarters. We note that while we were cautious on the sector heading into earnings Fee Rev Chg +22%