Daily Brief · July 27, 2026
Earnings strength meets higher spending and charter scrutiny
Major-bank profitability and capital remain strong, but expense resets, Flagstar runoff, and OCC charter actions sharpen execution risk.
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Earnings and capital allocation
The five largest U.S. banks posted record Q2 profits and large CET1 cushions
The five largest U.S. banks collectively earned $49 billion, up 39% from a year earlier, and each exceeded analysts’ earnings and revenue estimates. Morgan Stanley ended Q2 with a 14.8% common equity tier 1 ratio, 300 basis points above its regulatory minimum; JPMorgan ended at 14.1%, 260 basis points above its requirement; and Goldman Sachs was 150 basis points above its minimum. JPMorgan, Morgan Stanley and Citigroup also signaled willingness to explore M&A, linking strong capital cushions to possible deal capacity.
Source: Bankeration
PNC and JPMorgan raised expense outlooks
PNC raised its 2026 full-year outlook for net interest income, noninterest income and total revenue, but also lifted adjusted noninterest expense guidance from roughly 7% growth to approximately 8.5%. JPMorgan increased its adjusted expense forecast by $2.5 billion, with management tying the increase to higher activity and continued investment.
Sources: American Banker, Bankeration
Flagstar cut guidance but launched a buyback
Higher-than-expected commercial real estate payoffs and paydowns helped Flagstar’s portfolio remix toward fewer commercial real estate loans, but led the bank to reduce full-year 2026 net-interest-income guidance and several near-term targets. Management reaffirmed long-term financial targets, and the bank announced its first share-repurchase program since the company nearly collapsed in 2024.
Source: American Banker
Payments and regulatory perimeter
American Express lifted its full-year growth outlook
Second-quarter net income was $3.11 billion and revenue was $19.64 billion. American Express projected full-year growth of 10% and affirmed earnings-per-share guidance of $17.30 to $17.90, holding the profit range unchanged.
Source: American Banker
OCC approved Upstart conditionally and denied Wise
The Office of the Comptroller of the Currency granted Upstart conditional approval to establish a de novo bank subsidiary after a 120-day review process. The same regulator denied Wise’s de novo national trust bank charter application, citing Bank Secrecy Act, anti-money-laundering and countering-the-financing-of-terrorism deficiencies; Wise said it intends to submit a new national trust bank application under a GENIUS Act framework.
Sources: American Banker, Banking Dive
BPI and other bank groups criticized updated Clarity Act stablecoin-yield language, while ABA sought changes to OCC rule
Bank Policy Institute and other banking associations said updated Clarity Act language still permits interest-like yield on stablecoins and leaves anti-money-laundering gaps that could affect bank deposits, local lending and national security controls. The American Bankers Association supports the OCC’s proposed approach to treat stablecoin issuers like financial institutions for Bank Secrecy Act and sanctions compliance, but asked for equal treatment across regulated issuers and clearer exclusion of reserve custodian banks from issuer obligations.
Sources: Bank Policy Institute, ABA Banking Journal