2Q‘26 Earnings: Mixed Qtr; Loan & NII Guides Raised but Offset by Expenses

研报英文原文证据摘录

2Q‘26 Earnings: Mixed Qtr; Loan & NII Guides Raised but Offset by Expenses

M&A, particularly in wealth management PREV 3,196.7

or strategically aligned banking franchises, but emphasized that organic growth remains the top *Adj*Rev.EPS(MM)

priority. Source: Visible Alpha

Source: Visible Alpha

Guidance updates were mixed, with higher NII and loan growth guidance offset by an increase

in the midpoint of the expense growth range, and all other items reiterated. NII growth for FY26

was guided to up 7–9% (vs. 6–8% prior), driven by stronger loan and deposit growth, particularly

noninterest-bearing, rather than the rate outlook, which now assumes flat rates (no cuts this year).

EOP loan growth was guided to 6–8% (vs. 5–7% prior), while operating expense growth was

narrowed to 8–9% (vs. 7–9% prior). All other guidance was reiterated, including the NCO ratio of

15–25 bps, a 22–23% tax rate, and $85–95M of tax credit and CRA investment amortization. The

company also continues to target double-digit Y/Y fee growth in 2026, and following record 2Q

noninterest income, wealth management fees are expected to keep growing, supported by recent

hires and platform investment. NIM is expected to remain relatively stable (vs. 3.43% in 2Q; in-line

with us but below 3.46% cons.), as balance sheet growth drives NII and continued DDA growth

offsets incremental deposit cost pressure.

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

estimates of $10.70/$11.35, as the higher NII guide is offset by higher expenses. We maintain our

BUY rating based on East West's strong growth, above-average capital levels, and ability to accrete

capital organically at a solid pace. David Chiaverini, CFA * | Equity Analyst

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