Bank stocks came into the second half of 2026 with an unusually strong set of quarterly numbers. JPMorgan Chase (JPM) earned $21.2 billion, or $7.70 per share, in the second quarter, including a $4.6 billion gain on Visa shares, and $16.9 billion excluding one-time items [1]. Bank of America (BAC) earned $9.1 billion, Wells Fargo (WFC) $6.4 billion and Citigroup (C) $5.8 billion, up 45% [2][3][4]. Net interest income grew between 5% and 13% at the four largest banks, net charge-off rates stayed near recent norms, and JPMorgan, Wells Fargo and Citigroup alone returned more than $18 billion to shareholders in the quarter [1][3][4]. The stocks have been slower than the earnings: the S&P 500 Financials sector fell 1.2% in the first half, the worst of the eleven sectors [5].
Net interest income: still growing as rates fall
Net interest income (NII), the spread between what a bank earns on loans and securities and what it pays on deposits, was expected to stall once the Federal Reserve began cutting rates. It has not. JPMorgan's NII rose 10% to $25.6 billion, driven by higher markets-related NII, higher deposit balances, higher revolving card balances and higher wholesale loan balances, partly offset by the impact of lower rates [1]. Wells Fargo's NII rose 5% to $12.3 billion on average loan growth of 12% and deposit growth of 10% [3]. Citigroup's NII rose 13% [4]. Bank of America reported NII of $16.0 billion [2].
| Bank | Q2 2026 net income | Diluted EPS | Net interest income | ROTCE | CET1 ratio |
|---|---|---|---|---|---|
| JPMorgan Chase | $21.2 billion | $7.70 | $25.6 billion, +10% | 29% (23% ex-items) | 14.1% |
| Bank of America | $9.1 billion | $1.21 | $16.0 billion | 16.5% | 11.2% |
| Wells Fargo | $6.4 billion | $2.00 | $12.3 billion, +5% | 17.7% | 10.3% |
| Citigroup | $5.8 billion | $3.15 | +13% | 13.0% | 12.8% |
Sources: company earnings releases and supplements filed July 14, 2026 [1][2][3][4].
The reason NII keeps rising is volume rather than margin. Loans and deposits are growing again, and the assets banks bought at low yields in 2020 and 2021 are still maturing and being reinvested at higher rates. Wells Fargo's 12% loan growth is the clearest example, and it is notable for a bank that spent most of the last decade under a regulatory asset cap [3]. Fee income was the bigger surprise: JPMorgan's noninterest revenue rose 45% to $32.4 billion, Wells Fargo's rose 13% to $10.3 billion and Citigroup's rose 18%, reflecting record capital markets activity as well as the one-time gains [1][3][4].
Credit quality: contained, not pristine
The consumer credit cycle has been the main worry for bank stocks since 2023, and the second-quarter data show it stable at a level that is elevated by pre-pandemic standards. JPMorgan's Card Services net charge-off rate was 3.34%, and the firm booked $2.4 billion of net charge-offs and a $2.5 billion provision for credit losses [1]. Wells Fargo's net loan charge-off ratio was 0.34% annualized on $876 million of charge-offs, with a $914 million provision and an allowance for credit losses of $14.4 billion, or 1.40% of total loans [3]. Citigroup's net credit losses rose 8% to $2.4 billion, and its allowance stood at $22.2 billion, or 2.5% of funded loans [4]. Bank of America's provision was $1.37 billion [2].
What the reserve ratios say
Provisions roughly matching charge-offs means banks are neither building nor releasing reserves in size. That is what a mid-cycle credit environment looks like: losses on cards and some commercial real estate are running above the very low levels of 2021 and 2022, but not accelerating. Investors may consider that the risk is not in the reported numbers but in the sensitivity of card losses to unemployment, which remains the single variable most likely to change the picture.
Buybacks and dividends after the stress test
Capital return was large across the group. JPMorgan paid a $1.50 quarterly dividend ($4.0 billion) and repurchased $6.2 billion of stock, while holding a CET1 ratio of 14.1% [1]. Wells Fargo repurchased 37.4 million shares for $3.0 billion and said it expects to raise its third-quarter dividend to $0.50 per share, with CET1 at 10.3% [3]. Citigroup returned about $5.0 billion, announced a planned 12% dividend increase and holds CET1 of 12.8% [4]. Bank of America's CET1 ratio was 11.2% and it paid a $0.28 dividend [2]. Book value per share rose 9% at JPMorgan to $133.01 and 7% at Citigroup to $114.74, and tangible book value rose 10% and 7% respectively [1][4].
Banks with capital ratios two to four percentage points above their requirements have room to keep buying back shares even if regulators tighten the rules, and every one of the big four is in that position. The counterpoint is that buybacks executed near record share prices add less book value per share than buybacks at the discounts of 2023, so the accretion from each dollar returned is lower than it was.
Valuation of bank stocks in August 2026
The sector has re-rated during the earnings season. DataPorium's sector P/E series for Nasdaq-listed companies shows the Financial Services multiple at 21.6 on August 21, 2026, up from 18.8 on June 26 and 20.5 on July 7 [6]. That is still well below the 43.7 multiple for Technology on the same date, and close to the 22.6 for Healthcare [6]. Readers can follow the sector series on DataPorium's stock market page and rank banks by return on equity and price to book with the stock screener [6]. Points investors may consider:
- The big four earned about $42 billion combined in the quarter, with JPMorgan alone above $21 billion [1][2][3][4].
- NII is growing on volume, not margin, which makes it less sensitive to further rate cuts than in 2024 [1][3].
- Charge-off rates are stable, with JPMorgan's card losses at 3.34% and Wells Fargo's total loan losses at 0.34% [1][3].
- Capital ratios of 10.3% to 14.1% leave room for continued buybacks [1][2][3][4].
- Financials underperformed in the first half despite the results, ending the half down 1.2% [5].
Second-quarter results show the large banks earning record profits on growing loans and stable credit, and the main question for bank stocks is how much of that strength the market has already paid for after the sector's re-rating in July and August.
Key takeaways
- JPMorgan earned $21.2 billion ($7.70 per share) in Q2 2026, or $16.9 billion excluding a $4.6 billion Visa gain, with NII up 10% to $25.6 billion [1].
- Wells Fargo grew loans 12% and NII 5%, Citigroup grew NII 13% and net income 45%, and Bank of America earned $9.1 billion [2][3][4].
- Credit remains stable: JPMorgan's card charge-off rate was 3.34% and Wells Fargo's total charge-off ratio 0.34% [1][3].
- The group returned capital heavily, including $6.2 billion of buybacks at JPMorgan and $3.0 billion at Wells Fargo, with CET1 ratios of 10.3% to 14.1% [1][3].
- The Financial Services sector P/E rose to 21.6 on August 21 from 18.8 on June 26 [6].
Frequently asked questions
How did the big banks do in Q2 2026?
JPMorgan earned $21.2 billion, Bank of America $9.1 billion, Wells Fargo $6.4 billion and Citigroup $5.8 billion, with net interest income growing 5% to 13% and fee income rising sharply [1][2][3][4].
Is bank net interest income still growing in 2026?
Yes. JPMorgan's NII rose 10% to $25.6 billion, Wells Fargo's rose 5% to $12.3 billion and Citigroup's rose 13%, driven by loan and deposit growth rather than wider margins [1][3][4].
Are bank credit losses rising in 2026?
Losses are stable rather than rising: JPMorgan's card net charge-off rate was 3.34%, Wells Fargo's total loan charge-off ratio was 0.34%, and Citigroup's net credit losses rose 8% to $2.4 billion [1][3][4].
How much are banks buying back in 2026?
In Q2 2026 JPMorgan repurchased $6.2 billion of stock, Wells Fargo $3.0 billion, and Citigroup returned about $5.0 billion in total while planning a 12% dividend increase [1][3][4].
Sources & References
- [1] JPMorganChase Reports Second-Quarter 2026 Financial Results (SEC Form 8-K exhibit, July 14, 2026)
- [2] Bank of America Second Quarter 2026 Supplemental Information (SEC Form 8-K exhibit, July 14, 2026)
- [3] Wells Fargo Reports Second Quarter 2026 Financial Results (SEC Form 8-K exhibit, July 14, 2026)
- [4] Citigroup Second Quarter 2026 Results (SEC Form 8-K exhibit, July 14, 2026)
- [5] RBC Wealth Management: First-half 2026 equity recap (July 1, 2026)
- [6] DataPorium Stock Market Analytics (Financial Services sector P/E)
