Americas Banks: Regional: Key takeaways from BKU earnings; updating COF and ALLY estimates post-EPS

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Americas Banks: Regional: Key takeaways from BKU earnings; updating COF and ALLY estimates post-EPS

Goldman Sachs Americas Banks: Regional

deposit growth fall shy of expectations or if commercial loan growth does not

materialize. Post results shares trade at 10.7x our updated 2027E EPS vs. regional peers

at 11.0x on average. We think the market will need greater visibility on the trajectory of

BKU’s NII through the year (and exit NIM) before shares can outperform.

Exhibit 1: BKU Guidance summary

2026 Guidance Table

BKU

2026 Medium/Long-term

- Expect NII to grow 5-6% from a base of $988mn implying $1.042bn

- Expect 4Q26 NIM of 3.15%

NII - Assumes 1 Fed funds rate hike in assumptions, and maintaining ~80%

deposit beta

-Margin expected to expand 2Q to 3Q then flatish in 4Q

- Derivatives, FX, card, and syndication business have tremendous

Fee Income - Expect fee income to increase 7% from a base of $106mn implying $113mn

growth potential

Expenses - Expect expenses to increase ~5% from a base of $664mn implying $697mn -Expect operating leverage to continue

Expect core loans to grow ~4-5%

- Expect Resi/other to decline ~8% - B/S growth in the MT

- Expect total loans to grow ~1-2% - Not stopping resi runoff - expect B/S to continue changing mix

Balance sheet

- Expect 13% growth in average NIDDA deposits - Expect 2026 to be an inflection point for loan growth

- Expect 6% growth in total excluding brokered deposits -Believe can grow NIDDA to above 34% of deposits over time

- Average NIDDA expected to keep growing

- Expect a provision for credit losses of $68-$72mn

- Targeting a 11.8% CET1 ratio -CET1 targeted to mid-11% over time

Capital and Credit

- Targeting up to $146mn in repurchases in 2H26 (rest of authorization) - Expect ROA, ROE, and margins to grow going forward