“For the full year 2026, we now expect total net revenue growth of 7%-9% compared to the prior year, or in the range of 5%-7% excluding BTIG, up from our prior range of 4%-6%.”

In context

“John Stern: Thanks, Gunjan, good morning, everyone. This was another strong quarter for us as we continue to execute against our strategic priorities. We delivered meaningful revenue and fee growth, significant positive operating leverage, and improved profitability metrics that are well within our medium-term target ranges. If you turn to Slide 9, I'll start with some highlights, followed by a discussion of trends for the second quarter. We reported earnings per common share of $1.35 and generated record net revenue of $7.7 billion, representing 10.1% growth year-over-year. This quarter, we continued to see strong loan growth in areas like C&I, commercial real estate, and card, reflecting steady client activity across the franchise. Meanwhile, fee income growth accelerated across most line items. Notably, this includes one month of BTIG. However, fee growth was still approximately 10% excluding BTIG. Average total assets increased 0.9% linked quarter to $695 billion. Key credit quality metrics improved both sequentially and year-over-year, reflecting a stable economic backdrop and the continued fortitude of our clients. As of June 30th, our tangible book value per common share eclipsed $30 and increased more than 13% on a year-over-year basis. Slide 10 provides our key performance metrics. ROA, ROTCE, efficiency ratio, and NIM all improved both sequentially and year-over-year as results of a disciplined execution. We delivered strong returns, which includes a return on tangible common equity of 18.7% and a return on average assets of 1.26%. The efficiency ratio improved to 57.1%. Slide 11 provides a balance sheet summary. Total average deposits grew 2.4% year-over-year and were flat linked quarter. Consumer deposits reached another record this quarter, driven by our Smartly flagship product. The offset was typical seasonality in our wholesale and investment services businesses. Average loans totaled $405 billion, up 7.1% from the prior year quarter and 3.0% from the prior quarter. Growth was broad-based in strategic categories such as C&I, credit card, and commercial real estate, which brings ancillary fees with them. Turning to Slide 12. Net interest income on a fully taxable equivalent basis totaled $4.4 billion, an increase of 7.5% on a year-over-year basis above the range we had previously guided to, driven by stronger loan dynamics during the quarter. On a sequential basis, net interest income increased by $96 million, or 2.2%, driven by loan growth, recent investment portfolio repositioning, and ongoing benefits from fixed asset repricing. Net interest margin improved two basis points sequentially to 2.79%. Slide 13 highlights fee revenue trends within non-interest income. Total fee revenue accelerated during the quarter, reflecting broad-based strength across our businesses. Total fee income increased 13.2% year-over-year, driven by strong performance in capital markets, trust and investment management, payments, and other institutional fee businesses. In June, BTIG contributed approximately $98 million of capital markets fee revenue. Excluding BTIG, fee revenue grew 9.9% year-over-year. Capital markets revenue excluding BTIG increased approximately 31% year-over-year, reflecting strong client activity across foreign exchange, syndications, and corporate bond underwriting. Moving to Slide 14. Non-interest expense totaled approximately $4.4 billion and included approximately $84 million related to BTIG. Excluding BTIG, expenses grew roughly 1.9% sequentially and 3.9% versus the prior year. The increase in core expense primarily reflected continued investments in technology and marketing as well as higher incentive compensations associated with this quarter's strong revenue performance. These increases were partially offset by ongoing expense discipline across the franchise. Turning to Slide 15. This quarter highlights our ability to improve profitability while continuing to grow the franchise. Over the past several quarters, we have meaningfully improved profitability, significantly reducing our efficiency ratio from its recent peak. We remain committed to meaningful positive operating leverage as we fully integrate and normalize BTIG. While disciplined expense management remains an important contributor, we are increasingly seeing revenue growth become a larger driver of earnings growth. That combination of improving top-line momentum and ongoing expense discipline resulted in a year-over-year EPS growth of more than 20% this quarter. We remain confident in our ability to sustain strong profitability while continuing to invest for future growth. Slide 16 highlights our credit quality performance, which continues to improve. Our ratio of non-performing assets to loans and other real estate of 0.33% improved five basis points from the previous quarter and 11 basis points from a year ago. The second quarter net charge-off ratio was 0.53%, decreasing three basis points sequentially. Meanwhile, our allowance for credit losses remained steady at $8 billion, or 1.94% of period and loans. Turning to Slide 17. As of June 30th, our common equity Tier 1 capital ratio was 10.8%, or 9.4% including AOCI. Strong earnings generation this quarter supported capital distributions, strong loan growth, and 12 basis points of impact from the BTIG acquisition this quarter. On Slide 18, we provide a comparison of our second quarter results to our previous guidance, provide third quarter guidance, and update our full year 2026 outlook. Excluding BTIG, second quarter net interest income and fee revenue exceeded previous guidance, while non-interest expense came in as expected. Turning to forward-looking guidance for the third quarter and full year 2026, both of which are inclusive of BTIG and recently announced partnerships. For the third quarter, we expect net interest income growth of 4%-6% on a fully taxable equivalent basis compared to the third quarter of 2025. Total fee revenue growth in the range of 12%-14% compared to the third quarter of 2025, with contribution from BTIG of roughly $200 million per quarter in the back half of the year. Non-interest expense growth of approximately 8% compared to the third quarter of 2025. Excluding BTIG, we would expect our core expense growth to be approximately 3.5%. Additionally, we expect to recognize approximately $160 million of reserve build related to the Amazon Small Business Portfolio purchase, which we anticipate will close in mid-August. For the full year 2026, we now expect total net revenue growth of 7%-9% compared to the prior year, or in the range of 5%-7% excluding BTIG, up from our prior range of 4%-6%. We expect to deliver approximately 200 basis points of positive operating leverage this year and more than 300 basis points excluding the impact from BTIG. Moving to Slide 19. Second quarter results represented another consecutive quarter operating within all of our medium-term target ranges. We are encouraged by the momentum across the franchise and remain confident in our ability to continue to build on these results to deliver consistent, sustainable returns over time. Let me now hand it back to Gunjan for closing remarks.”