A Record First Half and a Genuine Earnings Inflection, But the Re-Rating Got There First: Initiating SCHW at Hold

Results vs. Consensus

Q2 2025 Scorecard

Year-Over-Year Comparisons

Quarter-Over-Quarter Comparisons

Quality of Beat

Revenue: The headline 2.6% revenue beat understates the quality because the mix is so clean. Net interest revenue of $2,822M (+31% YoY, +4.3% sequentially) carried the quarter, and it grew for the right reason: management swapped roughly $10.4B of expensive wholesale funding for cheaper deposit and cash flow, so the same balance sheet now throws off more spread. Trading revenue of $952M (+23%) reflected genuine engagement, with daily average trades of 7.6 million up 38% year-over-year after the record sessions of early April. Asset management and administration fees of $1,570M (+14%) tracked a record client-asset base. There is no single line carrying an outsized one-time benefit; the breadth is the point.

Margins: The 50.1% adjusted pre-tax margin is the cleanest number in the release. It is up 910bp year-over-year and roughly 390bp sequentially, and it was achieved while adjusted expenses rose only about 5%. That is operating leverage in its textbook form: revenue up 25%, costs up 5%, and the gap falling to the bottom line. The robust trading backdrop flattered the margin modestly (high-volume quarters are high-incremental-margin quarters), so a small mean-reversion is reasonable to assume, but the structural driver, the funding paydown plus expense discipline, is durable.

EPS: Adjusted EPS of $1.14 grew 56% year-over-year against revenue growth of 25%, the classic signature of a de-leveraging financial: spread income and operating leverage compound on top of revenue. The $0.06 GAAP-to-adjusted bridge is the Ameritrade integration's final innings ($128M pre-tax of transaction-related costs). Share count is drifting lower as buybacks resume, a modest additional tailwind. This is a high-quality EPS beat with very little to discount.

Revenue-Line Performance

Schwab reports a single integrated franchise rather than discrete operating segments, so the most useful decomposition is by revenue line. The story of Q2 is that all five lines grew double digits simultaneously, which has now happened three quarters running.

Net Interest Revenue — 48% of Revenue, the Center of the Thesis

Net interest revenue of $2,822M is the single most important figure in the report. It grew 31% year-over-year and 4.3% sequentially, and net interest margin expanded 12bp to 2.65%. CFO Mike Verdeschi was explicit that three things drove it: the further reduction of high-cost bank borrowings, a sequential build in client transactional sweep cash, and a late-quarter uptick in securities-lending activity. The first of those is the durable one. Every dollar of 5%-plus wholesale funding that Schwab retires and replaces with sub-1% sweep deposits or with cash thrown off by the maturing securities book widens the spread mechanically, regardless of where the Fed sits.

"The further reduction of high-cost borrowings at the bank, sequential build in client transactional sweep cash and a late quarter uptick in securities lending activity helped expand net interest margin and drive a 31% increase in net interest revenue versus 2Q '24." — Mike Verdeschi, CFO

Assessment: The NII story has two legs. Leg one, almost complete, is the liability-side paydown of supplemental borrowing. Leg two, just beginning, is the asset side: the low-yielding securities portfolio bought in 2020–2021 keeps maturing and rolling into materially higher-yielding paper, and lending balances keep growing. Management framed leg two as "the next wave of earnings growth." We agree it is the more durable driver, and it is why NIM can keep grinding higher even as rate cuts arrive.

Asset Management & Administration Fees — The Ballast

AMA fees of $1,570M (+14% YoY) are the franchise's annuity. They scale with client assets, which reached a record $10.76T, and with adoption of higher-value solutions. Managed investing net flows grew 37% year-over-year, an all-time first-half record, with the flagship Schwab Wealth Advisory taking in over $10B in the first half and Schwab Personalized Indexing flows up 44%. This is the revenue line that diversifies Schwab away from its rate sensitivity, and it is growing organically rather than on market beta alone.

Assessment: The more AMA fees grow as a share of the total, the higher the quality of Schwab's earnings, because fee revenue is recurring and rate-agnostic. The "bull market for advice" that management keeps describing is real, and Schwab's scale makes it the natural consolidator of that demand. Watch the AMA share of total revenue over the next several quarters; a rising share is a structural positive.

Trading Revenue — Strong, but the Most Cyclical Line

Trading revenue of $952M (+23% YoY) reflected 7.6 million daily average trades, up 38% year-over-year, with engagement across equities, ETFs, and index options. April's tariff-driven volatility produced record trading days, and engagement stayed elevated through the quarter. Management's own full-year scenario prudently assumes some pullback in volumes from the first-half pace.

Assessment: This is the line to normalize in any forward model. High-volume quarters flatter both the revenue line and the incremental margin; a return to a more typical trading cadence would trim both. It is a quality problem (engagement is a sign of franchise health), but it argues against extrapolating the 50% pre-tax margin straight-line.

Bank Deposit Account Fees — A Quiet +61%

Bank deposit account fees of $247M jumped 61% year-over-year as a growing share of the TD-legacy BDA balances converted to the floating-rate bucket, lifting the net yield Schwab earns on those off-balance-sheet deposits. The underlying BDA balance is shrinking modestly (down a few percent), but the improved economics more than offset the runoff.

Assessment: Small in absolute dollars but a clean example of the same theme running through the whole P&L: Schwab is repricing legacy, low-economics balances into higher-economics structures. The floating-rate conversion does add some rate sensitivity here, a nuance worth tracking as cuts arrive.

Key Client & Balance-Sheet KPIs

Key Topics & Management Commentary

Overall Management Tone: Confident, growth-forward, and notably free of the defensiveness that characterized Schwab's calls through the 2023–2024 cash-sorting episode. The recurring phrase was "playing offense," and the numbers earned it. Management spoke as operators executing a known plan (pay down expensive funding, deepen client relationships, return excess capital) rather than as a team managing a crisis. The one area of deliberate restraint was forward cash behavior, where the framing stayed measured ("normal client cash trends," "we'll keep a close eye on macro factors").

1. The Earnings Inflection Is the Story

The single most important macro point on the call is that Schwab has moved from defense to offense, and the financials reflect a genuine inflection rather than a cyclical bounce. Revenue grew 25%, adjusted EPS grew 56%, and the adjusted pre-tax margin crossed 50%. President and CEO Rick Wurster opened by framing the half as evidence that the strategy is working.

"Schwab delivered growth on all fronts during the second quarter. The firm's diversified revenue model, coupled with our best-in-class scale and efficiency, produced quarterly records for both revenue and earnings per share." — Rick Wurster, President & CEO

Assessment: The inflection is real and self-driven. The question for the stock is not whether the inflection is happening (it is) but how much of it the market has already paid for. After a year in which the shares roughly tracked the earnings recovery higher, the easy part of the re-rating is behind us.

2. High-Cost Funding Paydown — The Self-Help Engine

Schwab retired another $10.4B of high-cost bank supplemental funding in Q2, following nearly $12B in Q1, taking the balance to $27.7B, more than 70% below the peak. This is the clearest, most controllable driver of the NII inflection, and management was explicit that it has further to run.

"Client transactional sweep cash finished June at $412.1 billion, enabling us to further reduce higher cost bank funding by $10.4 billion to $27.7 billion at quarter-end." — Mike Verdeschi, CFO

Verdeschi added that the firm does not intend to take wholesale funding to zero, but expects to keep making progress each quarter until the balance reaches a level "more consistent with our long-term diversified funding profile." That implies several more quarters of paydown-driven NII benefit before this particular lever is fully pulled.

Assessment: This is the highest-conviction element of the bull case because it is mechanical and within management's control. It also has a finite life: once the balance reaches the target range, the liability-side benefit ends and the burden of NII growth shifts entirely to the asset side (securities reinvestment and lending). The handoff between the two legs is the thing to monitor.

3. Net Interest Margin and the Rate-Cut Setup

NIM expanded to 2.65% and management guided full-year NIM to 2.65–2.75%, with the Q4 exit rate "well into the 280 basis point range." Crucially, this guidance bakes in a forward curve that now calls for two 25bp cuts before year-end, up from the single cut assumed in January. In other words, management expects NIM to keep climbing through the cuts.

The reason is structural: the paydown and reinvestment dynamics overwhelm the modest drag from lower short-end rates, and management has hedged roughly one-third of its downward-rate exposure using swaps that convert fixed-rate liabilities to floating (to benefit as rates reset lower) and some floating lending to fixed.

Assessment: The market reflexively treats Schwab as a rate-sensitive asset-gatherer that suffers when the Fed cuts. Q2's guidance complicates that reflex: NIM is expanding into the cuts because the dominant drivers are balance-sheet self-help, not the level of front-end rates. That nuance is the crux of why the bears' rate-cut argument is weaker than it looks, and why we would upgrade on confirmation it holds.

4. Organic Growth and the Ameritrade Turn

Core NNA of $80.3B (+31%) and 1.1 million new brokerage accounts speak for themselves, but the more important disclosure is the inflection in legacy Ameritrade households. Having gone from asset attrition during the integration to stability last year, that cohort is now growing net new assets more than 100% year-over-year.

"We've seen over 100% growth in the last year in our net new assets from Ameritrade clients... at first, they were dealing with a new system, a new platform... and now they say they've never been happier in their investing life." — Rick Wurster, President & CEO

Assessment: The Ameritrade integration was the largest in the industry's history and the biggest single risk to the franchise over the past three years. Converting that cohort from a drag to a 100%-plus NNA grower removes a major overhang and adds a multi-year growth tailwind that the market spent 2023–2024 doubting. This is a genuine de-risking of the long-term story.

5. Revenue Diversification — Wealth, Lending, and "More for Clients"

Wurster repeatedly emphasized a second growth prong beyond NNA: doing more for the existing 45 million accounts. Managed investing flows grew 37%, pledged-asset-line (PAL) originations more than doubled, bank lending balances grew 19%, and PAL balances reached a record $21B. Management teased "a meaningful revenue opportunity" from monetizing product platforms, with details promised in coming quarters.

"There is a bull market for convenience in our country. Our 45 million client accounts would love to handle more of their financial life here at Schwab." — Rick Wurster, President & CEO

Assessment: This is the lever that can extend the growth story beyond the funding-paydown window. Cross-sell into wealth and lending raises revenue per client and tilts the mix toward recurring, rate-agnostic fees. It is also the least visible part of the model today, which makes it both an upside option and a "show-me."

6. Capital Return Resumes in Multiple Forms

Schwab returned $2.8B of excess capital in Q2, comprising the redemption of roughly $2.5B of Series G preferred stock and just over $350M of common buyback (the first open-market common repurchase since the cash-sorting episode). First-half capital return totaled $5.3B including the dividend, and the firm raised the common dividend earlier in the year. Capital ratios finished slightly above the firm's 6.75–7% adjusted Tier 1 leverage target.

Assessment: The resumption of common buybacks is a confidence signal: management would not be repurchasing stock if it were worried about the capital position or the cash trajectory. Retiring the high-coupon preferred is accretive. As capital builds organically and the unrealized-loss marks pull to par, the buyback capacity should grow, which supports EPS and is a structural positive for the equity story.

7. Cash Trends Normalizing

Transactional sweep cash finished June at $412.1B, up roughly $4.3B sequentially despite the usual Q2 tax-season outflows. Management characterized the environment as "normal client cash behaviors," a meaningful change in tone from the realignment years when sweep cash was in persistent decline.

"We're really seeing that normalized cash environment allowing us to continue to progress the paydown of those supplemental borrowings nicely." — Mike Verdeschi, CFO

Assessment: Stabilizing, then growing, sweep cash is the foundation that makes the funding paydown possible. If cash were still draining, Schwab would be forced to keep expensive wholesale funding in place. The normalization is therefore a precondition the bull case depends on, and it is currently being met, though it remains the variable most exposed to a market shock.

8. Digital Assets — Optionality, Not Yet a Driver

Management spent meaningful airtime on crypto. Schwab already custodies roughly $25B of client assets in crypto ETPs, about a 20% market share, and plans to launch spot Bitcoin and Ethereum trading, with a stablecoin to follow. Wurster framed spot crypto as a future "meaningful growth driver," citing clients who hold the bulk of their assets at Schwab and want to consolidate their crypto there too.

Assessment: This is genuine optionality rather than a near-term earnings line, and we model nothing for it today. The strategic logic, capturing assets clients currently hold elsewhere, is sound, and the existing 20% ETP share shows latent demand. It is a free call option on the long-term thesis, not a reason to own the stock now.

Guidance & Outlook

Schwab guides via a full-year "financial scenario" built on explicit macro inputs rather than point estimates. Management refreshed every input this quarter.

The standout is that management raised NIM guidance while adding a second rate cut to the assumed path, which only makes sense if the balance-sheet self-help is more powerful than the rate drag. The implied full-year adjusted-EPS range of $4.55–4.65, which explicitly excludes the benefit of any second-half buybacks, represents potential year-over-year earnings growth "into the very high 40% zone," and pre-tax margins in the "very high 40s" for the year.

Implied 2H ramp: First-half adjusted EPS was $2.17, so the $4.55–4.65 full-year frame implies $2.38–2.48 in the second half, a step up from the first half before any buyback benefit. The Q4 NIM exit "well into the 280s" is the mechanism.

Street at: Consensus sits near the lower end of the implied EPS frame, leaving room for upside if buybacks accelerate or trading stays elevated. Management's exclusion of 2H buybacks from the guide is conservative and likely sandbags the figure modestly.

Guidance style: Consistent with Schwab's historical pattern of building scenarios on conservative macro inputs and then beating them. The decision to raise revenue and NIM guidance after a single strong half is itself a confidence signal.

Analyst Q&A Highlights

Competing With the Disruptors

The lead question pressed whether Schwab, the original disruptor, now risks being disrupted by the Robinhoods and Webulls winning younger traders, an Innovator's Dilemma framing. Management rejected the premise, leaning on breadth of platform, in-person presence, and the firm's own willingness to "disrupt ourselves," and pivoted to crypto as evidence it is meeting younger-client demand.

Q: "Chuck built this business, in part by disrupting the incumbents, and we continue to see pockets of success... from emerging firms like Robinhood and Webull... In addition to spot crypto, can you talk about... how you're adjusting the strategy, the services and the marketing to pursue some of the opportunities that these younger, smaller brokers are capitalizing on."
— Ken Worthington, JPMorgan

A: "I would not trade positions with anyone... we can deliver platforms far beyond our competitors... we are always willing to disrupt ourselves... one in six new-to-firm retail households are under the age of 24... nearly 60% are under the age of 40."
— Rick Wurster, President & CEO

Assessment: Management's answer was credible because it was backed by data, the firm is in fact winning younger households, not losing them. The Innovator's Dilemma risk is real over a long horizon, but the near-term evidence cuts against it. This is a watch item, not a present threat.

Sustainability of Cash and Account Trends

A recurring line of questioning probed whether the strong account growth, elevated trading, and June cash build are sustainable into 2026. Management split the answer: the CEO took the client-growth side (pointing to accelerating monthly NNA), and the CFO took the cash side (attributing the June build to normalized behavior, net selling, and redemptions rather than a one-off).

Q: "You guys are seeing great account growth, elevated retail trading. And now in June, you had cash levels building despite the market grinding up. So... talk about the sustainability of these trends as we think about the rest of this year and into next year?"
— Dan Fannon, Jefferies

A: "June was up, I believe, 46% over last June... we're really seeing that normalized cash environment allowing us to continue to progress the paydown of those supplemental borrowings nicely."
— Rick Wurster, CEO, and Mike Verdeschi, CFO

Assessment: The cash answer is the load-bearing one for the thesis. Management sounded confident but appropriately measured, declining to promise that cash trends are immune to a market shock. The 46% June NNA acceleration is the strongest forward data point on the call.

Balance-Sheet Capacity and the Buyback Path

An analyst walked through the math of 5–7% organic growth on a $10T base generating $50–70B of incremental cash per year, and asked how Schwab would split that between balance-sheet growth and buybacks. Management reaffirmed its priority stack: support client needs first, then safety and soundness, then optimize for durable earnings, with a return to securities purchases coming as the funding paydown completes.

Q: "If I think about a 5% to 7% organic growth rate on a $10 trillion denominator... you're going to be generating $50 billion to $70 billion of cash per annum. Wondering how you think about maybe redeploying that to balance sheet growth versus other initiatives... and a more sustained buyback opportunity?"
— Bill Katz, TD Cowen

A: "At some point, we will be resuming... more securities purchases... that will be able to put that to work nicely in the way that's going to be accretive... build us durable earnings... allow us to ensure we could build that capital to support the growth of the franchise, but also be able to return it in multiple forms as well."
— Mike Verdeschi, CFO

Assessment: The answer confirmed that the asset side (securities reinvestment plus lending) is the next earnings leg once the paydown finishes, and that capital return scales with organic capital generation. It frames buybacks as a growing, not a one-time, source of EPS support.

The Profitability Ceiling

With pre-tax margin north of 50%, the question was where the franchise's ultimate profitability lands once AI efficiencies, asset monetization, and the NII trajectory are layered in. The CFO declined to name a number, instead describing a "balanced approach" of investing for growth while expanding margin as a natural output.

Q: "As you think about the margins of the business over time and where they could go off of this number, balancing with obviously reinvestment back in the business... What do you think is the ultimate profitability destination for the firm?"
— Alexander Blostein, Goldman Sachs

A: "We're investing in growth, we're investing in scale and efficiency as well that's enabling us to expand margin rather nicely. But that expense management objective... is that balanced approach... a natural outcome of that approach is that expansion."
— Mike Verdeschi, CFO

Assessment: A non-answer on the absolute ceiling, but a directionally bullish one: management expects margin to keep expanding as revenue diversification and scale compound. The refusal to anchor a number is sensible given trading-driven volatility in any single quarter's margin.

Interest-Rate Hedging Into the Cuts

An analyst pressed on the newer swap programs and whether more could be done to insulate earnings from the short end as cuts approach, given how much of the asset base and the BDA reprice with front-end rates.

Q: "I'm just curious if you could outline the recent steps you've taken on the hedging program to manage that short-end rate exposure and whether... there's incrementally more that could be done with derivatives... to further reduce some of that earnings exposure to the short end as we're approaching cuts."
— Kyle Voigt, KBW

A: "We've taken off roughly 1/3 of that interest rate risk profile in that downward rate environment... either you're looking at your fixed rate liabilities and converting those to float... or... floating rate lending activities and converting them to fix."
— Rick Wurster / Mike Verdeschi

Assessment: Hedging one-third of the downward-rate exposure is a material, if partial, insulation. It supports the claim that NIM can expand through the first cuts, while leaving two-thirds of the exposure live, which is why a faster or deeper cutting cycle remains the key swing risk to model.

Off-Balance-Sheet Cash Strategy

A question revisited Schwab's prior commentary about de-emphasizing the balance sheet over time by sweeping more client cash off it. Management reframed off-balance-sheet sweep as a tactical "capability" to preserve, not the primary strategy, emphasizing that on-balance-sheet cash is "quite accretive."

Q: "You all brought up kind of longer-term plans to deemphasize the balance sheet a bit over time, just increasingly sweeping customer cash off balance sheet... I'm just curious whether that's still the plan?"
— Devin Ryan, Citizens

A: "I think about that off-balance sheet activity as more a tactical capability, not really a primary driver of our strategy, which is growth... cash on balance sheet is quite accretive."
— Rick Wurster, President & CEO

Assessment: A subtle but important clarification: Schwab intends to keep the economics of client cash on its own balance sheet rather than giving them away to third-party banks, except in unusual low-rate conditions. That preserves the NII engine and is a modest positive versus the prior "de-emphasize the balance sheet" narrative.

What They're NOT Saying

1. An absolute target for "where margins go": management repeatedly declined to put a number on the ultimate pre-tax margin, which is prudent given trading-driven quarter-to-quarter swings but leaves the upside case unquantified.
2. The size of the Ameritrade NNA contribution: Wurster confirmed legacy Ameritrade NNA is up "over 100%" but explicitly would not share the absolute dollar figure, so the market cannot yet size how much of the 31% core-NNA growth is the Ameritrade turn versus underlying Schwab strength.
3. A spot-crypto launch date: asked directly whether spot Bitcoin/Ethereum would launch before year-end or slip to 2026, management gave only "we're working on launching" with no committed timeline.
4. The dollar magnitude of the "meaningful revenue opportunity" from platform monetization: teased as significant, with details deferred to "coming quarters," leaving a key future driver undisclosed.
5. A 2026 framework: the guide is a refreshed 2025 scenario only; there is no early read on how NII trends once the funding paydown is complete and the asset-side leg has to carry growth on its own.

Market Reaction

• Pre-print setup: SCHW closed at $93.10 the day before the release, up roughly 25.8% year-to-date, up 49.5% over the trailing twelve months, and up 3.5% over the prior 30 days. The shares entered the print at the very top of their 52-week closing range ($61.74–$93.10), so expectations were elevated.
• Reaction session (Jul 18): the stock gapped up 2.8% at the open and closed at $95.80, up 2.9% (+$2.70) on the day, on volume of 23.6 million shares versus a 7.5 million 30-day average (3.2x). The S&P 500 was essentially flat, so the move was idiosyncratic and positive.
• Setup context: entering the print near all-time highs and up ~50% over twelve months, the bar was high; the +2.9% reaction reflects a beat that was strong enough to be rewarded but not so far ahead of expectations as to trigger a gap-and-go.

The market's read aligns with ours: a clean beat on a stock that had already discounted a lot. The 3.2x volume confirms real institutional engagement with the print, and the positive close against a flat tape shows the quarter cleared the elevated bar. But a +2.9% move on a +56% EPS beat-and-raise quarter is the tell that valuation, not fundamentals, is now the governor on the stock. That is the core of our Hold.

Street Perspective

Debate: Can NII Keep Compounding Through Rate Cuts?

Bull view: The funding paydown and securities-reinvestment legs overwhelm the front-end drag; management raised NIM guidance even after adding a second cut to the curve, and has hedged a third of the downward exposure. NIM exits the year "well into the 280s."

Bear view: Schwab is still fundamentally asset-sensitive; a faster or deeper cutting cycle than two-and-done would pressure asset yields and the floating-rate BDA economics faster than the paydown can offset, and consensus is extrapolating a self-help benefit that has a finite life.

Our take: The bulls have the better of this for the next several quarters because the paydown is mechanical and still has runway. The bears' case becomes live only once the paydown is complete and the cycle proves deeper than priced. We need one or two more quarters of NIM expansion through actual cuts before underwriting the bull case fully, which is precisely why we initiate at Hold rather than Outperform.

Debate: Is the Organic-Growth Rate Durable or Macro-Flattered?

Bull view: 1H core NNA of $218B (+39%), accelerating monthly NNA (June +46%), and the Ameritrade cohort turning to 100%+ growth are structural, not cyclical; the firm is comfortably tracking toward its 5–7% long-term organic band.

Bear view: Some of the strength rides elevated retail engagement and a strong tape; account and trading metrics could normalize if volatility fades, and the headline NNA benefits from one-time integration catch-up at Ameritrade.

Our take: The growth looks durable. Account formation above one million for three straight quarters and the Ameritrade turn are franchise-level wins, not tape-driven blips. We side with the bulls here, which is what keeps a low-quality-of-earnings discount off the stock.

Debate: Valuation — Quality Compounder or Priced for Perfection?

Bull view: A best-in-class asset gatherer growing EPS into the high-40% range this year, with multiple structural tailwinds (funding paydown, asset reinvestment, lending, AMA fees, buybacks) deserves a premium multiple; ~21x a sandbagged EPS guide is reasonable.

Bear view: After a 50% twelve-month run to all-time highs, the stock already capitalizes the visible earnings recovery; the EPS growth rate decelerates sharply once the paydown laps, and the multiple offers little margin of safety against a rate or market shock.

Our take: Both are partly right, which is the definition of a Hold. The franchise quality justifies a premium, but the entry point does not offer a margin of safety after the run. We would rather pay up on a pullback or on confirmation the asset-side NII leg can sustain growth than chase the stock at the high end of its range.

Model Implications

Valuation framework: At $95.80, SCHW trades at roughly 20.8x the midpoint of management's $4.55–4.65 adjusted-EPS scenario, or about 20x our $4.65–4.70 estimate inclusive of buybacks. That is a premium-but-not-extreme multiple for a high-quality compounder mid-inflection. A fair-value range of $92–102 (roughly 20–22x our forward estimate) brackets the current price, which implies low-to-mid single-digit upside to the midpoint, consistent with a market-perform setup. We would re-rate the multiple higher on evidence the asset-side NII leg sustains double-digit NII growth into 2026.

Thesis Scorecard Post-Earnings

As this is our initiation, we establish the standing thesis here; future quarters will grade against these same pillars.

Overall: The operating thesis is firmly intact and arguably stronger than the market's lingering "rate-sensitive asset gatherer" framing implies. The constraint is price, not fundamentals.

Action: Initiate at Hold. High-quality franchise mid-inflection, but the entry point lacks a margin of safety after a 50% run. Build the position on a pullback or on confirmation that NII compounds through the cutting cycle.