Q - BankUnited,
For the period ended Jun 30, 2025. Filed Aug 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 5, 2025
BKU$44.02-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001504008-25-000012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0001504008-25-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 234 previous paragraphs and 235 current paragraphs.
150 unchanged; 57 reworded; 27 added; 25 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 45 previous and 47 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Quarterly highlights include:
Current report
•Net Income for the three months ended June 30, 2025 was $68.8 million, or $0.91 per diluted share, compared to $58.5 million or $0.78 per diluted share for the immediately preceding quarter ended March 31, 2025, an 18% increase. Net income was $53.7 million, or $0.72 per diluted share for the three months ended June 30, 2024. Net income for the six months ended June 30, 2025 was $127.2 million, or $1.68 per diluted share, compared to $101.7 million, or $1.36 per diluted share for the six months ended June 30, 2024, an increase of 25%.
Current report
•As expected, the net interest margin, calculated on a tax-equivalent basis, expanded by 0.12%, to 2.93% for the three months ended June 30, 2025 from 2.81% for the immediately preceding three months ended March 31, 2025. The net interest margin was 2.72% for the three months ended June 30, 2024.
Current report
•In July 2025, the Company's Board of Directors authorized the repurchase of up to $100 million in shares of its outstanding common stock. Any repurchases will be made in accordance with applicable securities laws from time to time in open market or private transactions. The extent to which the Company repurchases shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, the Company’s capital position and amount of retained earnings, regulatory requirements and other considerations. No time limit was set for the completion of the share repurchase program, and the program may be suspended or discontinued at any time.
Current report
•In July 2025, the Company's Board of Directors authorized the redemption of all of its outstanding 4.875% senior notes due November 2025.
Current report
(2)Annualized.
Current report
(3) At fair value.
Current report
Three months ended June 30, 2025 compared to the immediately preceding three months ended March 31, 2025
Current report
•The net interest margin was positively impacted by the increase in average NIDDA as a percentage of both total deposits and total funding. Average NIDDA grew by $581 million for the three months ended June 30, 2025, while average interest bearing deposits declined by $290 million.
Current report
•The tax-equivalent yield on loans increased to 5.55% for the three months ended June 30, 2025, from 5.48% for the three months ended March 31, 2025. This increase reflected the origination of new loans at higher rates, paydowns and maturities of lower rate loans, including some strategic exits of lower-margin loans, and balance sheet repositioning.
Current report
Three and six months ended June 30, 2025 compared to the three andsix months ended June 30, 2024
Current report
Net interest income, calculated on a tax-equivalent basis, was $486.1 million for the six months ended June 30, 2025, compared to $448.9 million for the six months ended June 30, 2024, an increase of $37.2 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $68.4 million and $105.7 million, respectively.
Current report
The net interest margin, calculated on a tax-equivalent basis, increased to 2.93% and 2.87% for the three and six months ended June 30, 2025, respectively, from 2.72% and 2.64% for the three and six months ended June 30, 2024, increases of 0.21% and 0.23%, respectively. Both the yield on interest earning assets and the cost of interest bearing liabilities declined over these comparative periods reflecting a lower interest rate environment, however the decline in the cost of interest bearing liabilities outpaced the decline in the yield on interest earning assets, primarily as a result of balance sheet repositioning, particularly an improved funding mix.
Current report
The most significant factor impacting the provision for credit losses for the three and six months ended June 30, 2025 was increases in specific reserves. The provision was also impacted, although to a lesser extent, by (i) deterioration in the economic forecast, (ii) a net increase in qualitative factors, (iii) upgrades and payoffs of criticized and classified commercial loans, (iv) shifts in portfolio composition, (v) improved borrower financials in some portfolio sub-segments, and (vi) routine modeling and assumption updates.
Current report
The more significant items included in other non-interest income typically include commercial card revenue, lending related fees other than origination fees, income related to BOLI, securities gains and losses and capital markets revenue such as customer derivative, FX and syndication fees, none of which are individually material for any of the periods presented. The increase in other non-interest income for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, was primarily driven by an increases in capital markets and BOLI revenue.
Current report
We have continued to execute on our organic balance sheet transformation strategy, focused on improving both the funding profile and asset mix. For the six months ended June 30, 2025, NIDDA grew by $1.5 billion from 27% to 32% of total deposits, and non-brokered deposits grew by $1.9 billion. Wholesale funding, including FHLB advances and brokered deposits, declined by $1.8 billion. Year-over-year, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, average NIDDA grew by $700 million. While growth of the core C&I and CRE loan portfolio segments fell short of our expectations, declining by $38 million for the six months ended June 30, 2025, consistent with our balance sheet strategy, lower yielding residential loans declined by $277 million, and franchise, equipment, and municipal finance declined by a combined $90 million. The core C&I and CRE portfolio segments comprised 63.4% of total loans at June 30, 2025, up from 62.5% at December 31, 2024 while residential loans declined to 30.5% of total loans at June 30, 2025 from 31.2% at December 31, 2024. The securities portfolio grew by $271 million over this six month period. The loan-to-deposit ratio improved to 83.6% at June 30, 2025 from 87.2% at December 31, 2024.
Current report
Total criticized classified loans declined by $156 million for the three months ended June 30, 2025, although total non-accrual loans increased by $117 million. Of the net increase in non-accrual loans, $86 million was office related exposure. At June 30, 2025, 75% of non-accrual loans were current.
Current report
(1)Includes $60 million and $85 million of office exposure at June 30, 2025 and December 31 ,2024, respectively.
Current report
The majority of the increase in non-performing loan and non-performing asset ratios for the three months ended June 30, 2025 is attributable to office exposure. The decline in the ratio of the ACL to non-performing loans at June 30, 2025 compared to March 31, 2025 is reflective of non-performing loans that have no or minimal related ACL due to the adequacy of estimated collateral value to cover the remaining amortized cost basis, which is in some cases net of partial charge-offs recognized. At June 30, 2025 75% of non-accrual loans were current.
Current report
(1) Annualized for the six months ended June 30, 2025 and the three months ended March 31, 2025.
Current report
As depicted in the chart above, the most significant factor impacting the ACL for the three months ended June 30, 2025 was an increase in specific reserves, net of overall positive risk rating migration. The ACL was also impacted by (i) upgrades and payoffs of criticized and classified commercial loans, (ii) improving borrower financial performance in some segments of the pass rated portfolio, (iii) a reduction in certain qualitative factors and (iv) shifts in portfolio composition, partially offset by deterioration in the economic forecast. Net charge-offs also reduced the ACL.
Current report
•The ACL for the CRE portfolio sub-segment decreased by $7.1 million during the three months ended June 30, 2025, from 1.06% to 0.90% of loans, primarily a result of net charge-offs.
Current report
•The ACL for the commercial and industrial sub-segment increased by $12.4 million during the three months ended June 30, 2025, from 1.54% to 1.72% of loans, primarily a result of increases in specific reserves.
Current report
In July 2025, the Company's Board of Directors authorized the redemption of all of its outstanding 4.875% senior notes due November 2025 at a redemption price equal to 100% of the aggregate principal amount of the notes to be redeemed, plus accrued and unpaid interest.
Current report
The following table provides information regarding regulatory capital for the Company and the Bank as of June 30, 2025 (dollars in thousands):
Current report
(1)There is no Tier 1 leverage ratio component in the definition of a well-capitalized bank holding company.
Current report
In July 2025, the Company's Board of Directors authorized the repurchase of up to $100 million in shares of its outstanding common stock. Any repurchases under the program will be made in accordance with applicable securities laws from time to time in open market or private transactions. No time limit was set for the completion of the share repurchase program, and the program may be suspended or discontinued without prior notice at any time.
Removed paragraphs (25)
Previous report
Near-term strategic priorities focused on improving the Company's core profitability include:
Previous report
•Improve the Bank's funding profile by growing core deposits and paying down higher cost funding;
Previous report
•Improve the asset mix by re-positioning the balance sheet away from typically lower yielding transactional business such as residential mortgages and organically growing core commercial loans;
Previous report
•Improve the net interest margin, largely a function of more profitable balance sheet composition;
Previous report
•Maintaining robust liquidity and capital;
Previous report
•Managing credit;
Previous report
•Managing the rate of growth in operating expenses.
Previous report
•The net interest margin, calculated on a tax-equivalent basis, was 2.81% for the three months ended March 31, 2025 compared to 2.84% for the immediately preceding quarter, reflecting the impact of declining rates on a modestly asset sensitive balance sheet and the expiration of certain cash flow hedges.
Previous report
•Our commercial real estate exposure totaled 26% of loans and 173% of the Bank's total risk based capital at March 31, 2025. By comparison, based on call report data as of December 31, 2024 for banks with between $10 billion and $100 billion in assets, the median level of CRE to total loans was 34% and the median level of CRE to total risk based capital was 218%.
Previous report
•The Company announced an increase of $0.02 per share in its common stock dividend for the quarter ended March 31, 2025, to $0.31 per common share, a 7% increase from the previous level of $0.29 per share.
Previous report
Three months ended March 31, 2025 compared to thethree months ended December 31, 2024
Previous report
•The tax-equivalent yield on loans declined to 5.48% for the three months ended March 31, 2025, from 5.60% for the three months ended December 31, 2024. The primary driver of this decrease was coupon rate resets on variable rate loans.
Previous report
•The tax-equivalent yield on investment securities declined to 5.07% for the three months ended March 31, 2025, from 5.31% for the three months ended December 31, 2024. This decrease resulted primarily from coupon rate resets on variable rate securities.
Previous report
Three months ended March 31, 2025 compared to thethree months ended March 31, 2024
Previous report
The decrease in tax-equivalent interest income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was attributable to a decrease in the yields on interest earning assets. The decrease in interest expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was attributable to decreases in both the average balance and cost of interest bearing liabilities.
Previous report
Decreased yields on average interest earning assets as well as the decrease in the cost of interest bearing liabilities were primarily attributable to the declining interest rate environment.
Previous report
The most significant factors impacting the provision for credit losses for the three months ended March 31, 2025 included an increase in certain specific reserves and risk rating migration, and an increase in qualitative loss factors, particularly related to economic uncertainty.
Previous report
We continued to improve our funding profile over the three months ended March 31, 2025. NIDAA grew by $453 million to 29% of total deposits and non-brokered deposits grew by $719 million. Wholesale funding, including FHLB advances and brokered deposits, declined by $1.1 billion. On the asset side of the balance sheet, total loans declined by $308 million. While production was in line with expectations, core C&I and CRE segments decreased by $106 million, partly due to seasonality as well as a continued high level of unscheduled payoffs. Consistent with our balance sheet transformation strategy, lower yielding residential loans declined by $116 million, and franchise, equipment, and municipal finance declined by a combined $80 million. The loan-to-deposit ratio improved to 85.5% at March 31, 2025 from 87.2% at December 31, 2024.
Previous report
(1)Special mention CRE is composed entirely of office property type, representing 4.1% and 3.3% of the office portfolio at March 31, 2025 and December 31, 2024, respectively.
Previous report
At March 31, 2025, we had an estimated $109 million in residential loans in zip codes identified as exposed to the recent Los Angeles area wildfires. Approximately $13 million of these loans were more than 30 days past due at March 31, 2025. We do not expect to find instances in which properties are uninsured or under-insured, and do not currently expect this exposure to lead to significant credit losses although we may experience an increase in delinquencies while insurance claims are being processed.
Previous report
Non-Performing CRE by Property Type
Previous report
Construction and land non-performing loans in the chart above is related to one office relationship.
Previous report
•The ACL for the CRE portfolio sub-segment decreased by $4.9 million during the three months ended March 31, 2025, from 1.13% to 1.06% of loans, the substantial majority of the decrease was related to the office portfolio and resulted primarily from net charge-offs. The substantial majority of charge-offs related to one office loan that had been in workout for some time.
Previous report
•The ACL for the residential and MWL segments increased by $3.6 million during the three months ended March 31, 2025, from 0.15% to 0.20% of loans, primarily due to updated prepayment assumptions, the impact of increased delinquencies, and an increase in qualitative loss factors related to the California wildfires.
Previous report
(1) The interest rate collar consists of a combination of zero-premium interest rate options. The Company sold a pay-variable cap with a strike price of 5.58%; sold a 0% floor; and purchased a receive-variable floor with a strike price of 1.50%.
Reworded paragraphs (57)
Previous wording
The following discussion and analysis is intended to focus on significant matters impacting and changes in the financial condition and results of operations of the Company during the three months ended March 31, 2025 and should be read in conjunction with the consolidated financial statements and notes hereto included in this Quarterly Report on Form 10-Q and BKU's 2024 Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report on Form 10-K").
Current wording
The following discussion and analysis is intended to focus on significant matters impacting and changes in the financial condition and results of operations of the Company during the three and six months ended June 30, 2025 and should be read in conjunction with the consolidated financial statements and notes hereto included in this Quarterly Report on Form 10-Q and BKU's 2024 Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report on Form 10-K").
Previous wording
Net Income for the three months ended March 31, 2025 was $58.5 million, or $0.78 per diluted share, compared to $48.0 million, or $0.64 per diluted share for the three months ended March 31, 2024. For the three months ended March 31, 2025, the annualized return on average stockholders' equity was 8.2% and annualized return on average assets was 0.68%.
Current wording
•For the three months ended June 30, 2025, the annualized return on average stockholders' equity was 9.4% compared to 8.2% for the three months ended March 31, 2025 and 8.0% for the three months ended June 30, 2024. Return on average assets improved to 0.78% for the three months ended June 30, 2025, from 0.68% and 0.61% for the three months ended March 31, 2025 and June 30, 2024, respectively.
Previous wording
•The Company's funding profile continued to improve. NIDDA grew by $453 million, or 5.9%, for the three months ended March 31, 2025, to 29% of total deposits, up from 27% at December 31, 2024. NIDDA grew by $830 million compared to March 31, 2024, one year ago.
Current wording
•The Company's funding profile continued to improve. NIDDA grew by $1.0 billion, or 13% during the three months ended June 30, 2025, to 32% of total deposits, up from 29% at March 31, 2025. NIDDA was also up $1.0 billion compared to June 30, 2024, one year ago. Average NIDDA grew $581 million for the three months ended June 30, 2025.
Previous wording
•Non-brokered deposits grew by $719 million, or 3.2%, for the three months ended March 31, 2025, while total deposits grew by $192 million.
Current wording
•Non-brokered deposits grew by $1.2 billion, or 5.1%, for the three months ended June 30, 2025, while total deposits grew by $588 million.
Previous wording
•The average cost of total deposits declined by 0.14% to 2.58% for the three months ended March 31, 2025, from 2.72% for the immediately preceding quarter ended December 31, 2024. The spot APY of total deposits declined to 2.52% at March 31, 2025 from 2.63% at December 31, 2024.
Current wording
•The average cost of total deposits declined by 0.11% to 2.47% for the three months ended June 30, 2025, from 2.58% for the immediately preceding three months ended March 31, 2025. The spot APY of total deposits declined by 0.15% to 2.37% at June 30, 2025 from 2.52% at March 31, 2025. The spot APY of total deposits was 3.09% at June 30, 2024, one year ago.
Previous wording
•Wholesale funding, including FHLB advances and brokered deposits, declined by $1.1 billion for the three months ended March 31, 2025.
Current wording
•Wholesale funding, including FHLB advances and brokered deposits, declined by $749 million for the three months ended June 30, 2025 and by $1.8 billion for the six months ended June 30, 2025.
Previous wording
•Total loans declined by $308 million for the three months ended March 31, 2025. The core C&I and CRE categories declined by $106 million. Commercial growth is typically seasonally lower in the first quarter, and continued to be impacted by a high level of unscheduled payoffs. Consistent with our balance sheet strategy, the residential, franchise, equipment and municipal finance portfolios declined by a combined $196 million.
Current wording
•For the three months ended June 30, 2025, CRE loans grew by $267 million, largely in line with our expectations. C&I loans declined by $199 million; a continued high level of unscheduled payoffs and some strategic exits impacted C&I growth. Consistent with our balance sheet strategy, the residential, franchise, equipment and municipal finance portfolios declined by a combined $171 million. Total loans declined by $56 million for the three months ended June 30, 2025.
Previous wording
•The loan to deposit ratio declined to 85.5% at March 31, 2025, from 87.2% at December 31, 2024.
Current wording
•The loan to deposit ratio declined to 83.6% at June 30, 2025, from 85.5% at March 31, 2025 and 87.2% at December 31, 2024.
Previous wording
•The annualized net charge-off ratio for the three months ended March 31, 2025, was 0.33%. The net charge-off ratio for the trailing twelve months was 0.24%. The NPA ratio was 0.76%, including 0.09% related to the guaranteed portion of non-performing SBA loans at March 31, 2025, compared to 0.73% including 0.10% related to the guaranteed portion of non-accrual SBA loans at December 31, 2024.
Current wording
•With respect to credit, total criticized and classified loans declined by $156 million for the three months ended June 30, 2025. We experienced net migration of $117 million of loans to non-accrual for the quarter, the majority of which, not unexpectedly, was attributable to office exposure. The NPA ratio at June 30, 2025 was 1.08%, including 0.10% related to the guaranteed portion of non-performing SBA loans, compared to 0.76% including 0.09% related to the guaranteed portion of non-accrual SBA loans at March 31, 2025. The annualized net charge-off ratio for the six months ended June 30, 2025, was 0.27%. The net charge-off ratio for the trailing twelve months was 0.23%.
Previous wording
•The ratio of the ACL to total loans was 0.92% at March 31, 2025, consistent with the prior quarter-end. The ratio of the ACL to non-performing loans was 84.58%, The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.34% at March 31, 2025 and the ACL to loans ratio for CRE office loans was 1.99%. The provision for credit losses was $15.1 million for the three months ended March 31, 2025 compared to $11.0 million for the preceding quarter.
Current wording
•The ratio of the ACL to total loans was 0.93% at June 30, 2025, compared to 0.92% at March 31, 2025. The ratio of the ACL to non-performing loans was 59.18%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.36% at June 30, 2025 and the ACL to loans ratio for CRE office loans was 1.92%. The provision for credit losses was $15.7 million for the three months ended June 30, 2025 compared to $15.1 million for the preceding three months ended March 31, 2025 and $19.5 million for the three months ended June 30, 2024.
Previous wording
•Our capital position is robust, At March 31, 2025, CET1 was 12.2% and pro-forma CET1, including accumulated other comprehensive income, was 11.2%. The ratio of tangible common equity/tangible assets increased to 8.11%.
Current wording
•Our capital position is robust. At June 30, 2025, CET1 was 12.2% and pro-forma CET1, including accumulated other comprehensive income, was 11.3%. The ratio of tangible common equity/tangible assets increased to 8.1%.
Previous wording
•Book value and tangible book value per common share continued to accrete, to $38.51 and $37.48, respectively, at March 31, 2025, compared to $37.65 and $36.61, respectively, at December 31, 2024, and $35.31 and $34.27, respectively, at March 31, 2024.
Current wording
•Book value and tangible book value per common share continued to accrete, to $39.26 and $38.23, respectively, at June 30, 2025, compared to $38.51 and $37.48, respectively, at March 31, 2025, and $36.11 and $35.07, respectively, at June 30, 2024. This represents a 9% year-over-year increase in tangible book value per share.
Previous wording
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $2.7 million for the three months ended March 31, 2025, $2.9 million for the three months ended December 31, 2024, and $3.2 million for the three months ended March 31, 2024. The tax-equivalent adjustment for tax-exempt investment securities was $0.7 million for both the three months ended March 31, 2025 and December 31, 2024, and $0.8 million for the three months ended March 31, 2024.
Current wording
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $2.7 million for both the three months ended June 30, 2025 and March 31, 2025, and $3.1 million for the three months ended June 30, 2024. The tax-equivalent adjustment for tax-exempt investment securities was $0.7 million for both the three months ended June 30, 2025 and March 31, 2025, and $0.9 million for the three months ended June 30, 2024.
Previous wording
Net interest income, calculated on a tax-equivalent basis, was $236.6 million for the three months ended March 31, 2025, compared to $242.9 million for the three months ended December 31, 2024, a decrease of $6.3 million. The decrease was comprised of decreases in tax-equivalent interest income and interest expense of $24.5 million and $18.2 million, respectively. The quarter-over-quarter decline in interest income related to lower yields on interest earning assets as coupon rates on floating rate instruments reset down, and to a lesser extent, the lower average balance of interest earning assets. The decline in interest expense related to both a lower average cost of funds and lower average balance of interest bearing liabilities.
Current wording
Net interest income, calculated on a tax-equivalent basis, was $249.5 million for the three months ended June 30, 2025, compared to $236.6 million for the three months ended March 31, 2025, an increase of $12.9 million. The increase was comprised of an increase in tax-equivalent interest income of $10.1 million and a decrease in interest expense of $2.9 million for the three months ended June 30, 2025, compared to the three months ended March 31, 2025. The quarter-over-quarter increase in interest income was primarily related to higher yields on loans. The decline in interest expense related to both a lower average cost of funds and lower average balance of interest bearing liabilities.
Previous wording
The net interest margin, calculated on a tax-equivalent basis, was 2.81% for the three months ended March 31, 2025, compared to 2.84% for the three months ended December 31, 2024. The decline in margin reflects the impact of a declining rate environment on a modestly asset sensitive balance sheet and expiration of certain cash flow hedges, which negatively impacted the net interest margin by 0.03%. Factors impacting the net interest margin for the three months ended March 31, 2025, compared to the three months ended December 31, 2024, included:
Current wording
The net interest margin, calculated on a tax-equivalent basis, increased by 0.12% to 2.93% for the three months ended June 30, 2025, compared to 2.81% for the immediately preceding three months ended March 31, 2025. Factors impacting the net interest margin for the three months ended June 30, 2025 compared to the three months ended March 31, 2025 included:
Previous wording
•The average rate paid on interest bearing deposits declined to 3.54% for the three months ended March 31, 2025, from 3.75% for the three months ended December 31, 2024. This decline reflected continued initiatives taken to lower rates paid on deposits as short-term market rates declined, including the re-pricing of time deposits.
Current wording
•The average rate paid on interest bearing deposits declined to 3.48% for the three months ended June 30, 2025, from 3.54% for the three months ended March 31, 2025. This decline reflected the maturity of higher-rate term deposits, a reduction in higher priced brokered deposits and continued pricing discipline.
Previous wording
•The average rate paid on FHLB advances declined to 3.69% for the three months ended March 31, 2025, from 3.82% for the three months ended December 31, 2024, primarily due to repayment of higher rate short-term advances partially offset by expiration of cash flow hedges.
Current wording
•The average rate paid on FHLB advances increased to 3.79% for the three months ended June 30, 2025, from 3.69% for the three months ended March 31, 2025, primarily due to expiration of cash flow hedges, partially offset by maturities of higher rate advances.
Previous wording
Net interest income, calculated on a tax-equivalent basis, was $236.6 million for the three months ended March 31, 2025, compared to $218.9 million for the three months ended March 31, 2024, an increase of $17.7 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $38.4 million and $56.1 million, respectively.
Current wording
Net interest income, calculated on a tax-equivalent basis, was $249.5 million for the three months ended June 30, 2025, compared to $230.0 million for the three months ended June 30, 2024, an increase of $19.5 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $30.1 million and $49.6 million, respectively.
Previous wording
The net interest margin, calculated on a tax-equivalent basis, increased to 2.81% for the three months ended March 31, 2025, from 2.57% for the three months ended March 31, 2024. The increase in the net interest margin for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily a result of balance sheet repositioning, particularly an improved funding mix. For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, average NIDDA grew by $852 million while average FHLB advances declined by $1.6 billion. Average NIDDA was 27.1% of average total deposits for the three months ended March 31, 2025, up from 24.7% for the three months ended March 31, 2024. Within interest bearing deposits, there was a shift from generally higher priced time deposits to generally lower priced forms of interest bearing deposits. On the asset side of the balance sheet, average core C&I and CRE loans increased to 62.8% of average loans from 61.9% of average loans, while residential loans declined to 31.4% of average loans from 31.9% of average loans.
Current wording
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024, average NIDDA grew by $545 million while average FHLB advances declined by $823 million. For the six months ended June 30, 2025 compared to the six months ended June 30, 2024, average NIDDA grew by $700 million while average FHLB advances declined by $1.2 billion. Within interest bearing deposits, there was a shift from generally higher priced time deposits to generally lower priced forms of interest bearing deposits for both the three and six month periods. On the asset side of the balance sheet, average core C&I and CRE loans increased to 63.0% and 62.8% of average loans for the three and six months ended June 30, 2025, respectively, from 60.4% and 60.1% of average loans for the three and six months ended June 30, 2024, respectively, while generally lower yielding residential loans declined to 30.9% and 31.2% of average loans from 32.8% and 33.1% of average loans for the respective periods.
Previous wording
The decrease in lease financing revenue for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was attributable to the continuing decline in the size of the operating lease equipment portfolio and lower residual income. Expense related to the depreciation of operating lease equipment reflected a corresponding decline over these comparative periods.
Current wording
The decrease in lease financing revenue for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, was attributable to the continuing decline in the size of the operating lease equipment portfolio and lower residual income. Expense related to the depreciation of operating lease equipment reflected a corresponding decline over these comparative periods.
Previous wording
The increase in compensation was primarily attributable to increased head count and routine salary increases as well as increases in variable compensation.
Current wording
The increase in compensation was primarily attributable to increased head count as we invest in the growth of the franchise and routine salary increases.
Previous wording
The decrease in deposit insurance expense was primarily attributable to a $5.2 million FDIC special assessment incurred during the three months ended March 31, 2024.
Current wording
The decrease in deposit insurance expense was primarily attributable to a $5.2 million FDIC special assessment incurred during the six months ended June 30, 2024.
Previous wording
The decline in depreciation of operating lease equipment for the three months ended March 31, 2025 was primarily attributable to the continued decline in the size of the operating lease equipment portfolio as discussed above.
Current wording
The decline in depreciation of operating lease equipment for the six months ended June 30, 2025 was primarily attributable to the continued decline in the size of the operating lease equipment portfolio as discussed above.
Previous wording
Our investment strategy is focused on ensuring adequate liquidity, maintaining a suitable balance of high credit quality, diverse assets, managing interest rate risk, and generating acceptable returns given our established risk parameters. We have sought to maintain liquidity by investing a significant portion of the portfolio in high quality liquid securities including U.S. Treasury and U.S. Government Agency and sponsored enterprise securities. We have also invested in highly-rated structured products, including private-label commercial and residential MBS, collateralized loan obligations, single family real estate-backed securities and non-mortgage asset-backed securities that, while somewhat less liquid, are generally pledgeable at either the FHLB or the FRB and provide us with attractive yields. Investment grade municipal securities provide liquidity and attractive tax-equivalent yields. We remain committed to keeping the duration of our securities portfolio short; relatively short effective portfolio duration helps mitigate interest rate risk. The estimated effective duration of the investment portfolio was 1.79 years andthe estimated weighted average life of the portfolio was 5.3 yearsas of March 31, 2025. Approximately 70% of the securities portfolio was floating rate at March 31, 2025.
Current wording
Our investment strategy is focused on ensuring adequate liquidity, maintaining a suitable balance of high credit quality, diverse assets, managing interest rate risk, and generating acceptable returns given our established risk parameters. We have sought to maintain liquidity by investing a significant portion of the portfolio in high quality liquid securities including U.S. Treasury and U.S. Government Agency and sponsored enterprise securities. We have also invested in highly-rated structured products, including private-label commercial and residential MBS, CLOs, single family real estate-backed securities and non-mortgage asset-backed securities that, while somewhat less liquid, are generally pledgeable at either the FHLB or the FRB and provide us with attractive yields. Investment grade municipal securities provide liquidity and attractive tax-equivalent yields. We remain committed to keeping the duration of our securities portfolio short; relatively short effective portfolio duration helps mitigate interest rate risk. The estimated effective duration of the investment portfolio was 1.67 years andthe estimated weighted average life of the portfolio was 5.3 yearsas of June 30, 2025. Approximately 71% of the securities portfolio was floating rate at June 30, 2025.
Previous wording
The investment securities AFS portfolio was in a net unrealized loss position of $338.0 million at March 31, 2025, an improvement of $67.6 million compared to a net unrealized loss position of $405.6 million at December 31, 2024. Net unrealized losses at March 31, 2025 included $16.5 million of gross unrealized gains and $354.5 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at March 31, 2025 had an aggregate fair value of $5.5 billion. The unrealized losses resulted primarily from a sustained period of higher interest rates, and in some cases, wider spreads compared to the levels at which securities were purchased. None of the unrealized losses were attributable to credit loss impairments.
Current wording
The investment securities AFS portfolio was in a net unrealized loss position of $330.0 million at June 30, 2025, an improvement of $75.6 million compared to a net unrealized loss position of $405.6 million at December 31, 2024. Net unrealized losses at June 30, 2025 included $17.2 million of gross unrealized gains and $347.2 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at June 30, 2025 had an aggregate fair value of $5.8 billion. The unrealized losses resulted primarily from a sustained period of higher interest rates, and in some cases, wider spreads compared to the levels at which securities were purchased. None of the unrealized losses were attributable to credit loss impairments.
Previous wording
We do not intend to sell securities in significant unrealized loss positions at March 31, 2025. Based on an assessment of our liquidity position and internal and regulatory guidelines for permissible investments and concentrations, it is not more likely than not that we will be required to sell securities in significant unrealized loss positions prior to recovery of amortized cost basis, which may be at maturity. The substantial majority of our investment securities are eligible to be pledged at either the FHLB or FRB. We have not sold, and do not anticipate the need to sell, securities in unrealized loss positions to generate liquidity.
Current wording
We have not sold, and do not anticipate the need to sell, securities in unrealized loss positions to generate liquidity. Additionally, we do not intend to sell securities in significant unrealized loss positions at June 30, 2025. Based on an assessment of our liquidity position and internal and regulatory guidelines for permissible investments and concentrations, it is not more likely than not that we will be required to sell securities in significant unrealized loss positions prior to recovery of amortized cost basis, which may be at maturity. The substantial majority of our investment securities are eligible to be pledged at either the FHLB or FRB.
Previous wording
Commercial loans include a diverse portfolio of commercial and industrial loans and lines of credit, loans secured by owner-occupied commercial real-estate, income-producing non-owner occupied commercial real estate, a smaller amount of construction loans, SBA loans, mortgage warehouse lines of credit, municipal loans and leases originated by Pinnacle and franchise and equipment finance loans and leases originated by Bridge.
Current wording
Commercial loans include a diverse portfolio of commercial and industrial loans and lines of credit, loans secured by owner-occupied commercial real-estate, income-producing non-owner occupied commercial real estate, a smaller amount of construction loans, SBA loans, mortgage warehouse lines of credit, municipal loans and leases and franchise and equipment finance loans and leases.
Previous wording
Included in New York tri-state multifamily loans in the tables above is approximately $113 million of rent regulated exposure as of March 31, 2025.
Current wording
Included in New York tri-state multifamily loans in the tables above is approximately $110 million of rent regulated exposure as of June 30, 2025.
Previous wording
The following table presents information about CRE loans maturing in the next 12 months by property type at March 31, 2025 (dollars in thousands). 14% of the total CRE portfolio, with a weighted average coupon rate of 4.41%, is fixed rate to the borrower and maturing in the next 12 months.
Current wording
The following table presents information about CRE loans maturing in the next 12 months by property type at June 30, 2025 (dollars in thousands). 16% of the total CRE portfolio, with a weighted average coupon rate of 4.34%, is fixed rate to the borrower and maturing in the next 12 months.
Previous wording
The office segment totaled $1.7 billion at March 31, 2025. Medical office comprised approximately $347 million or 20% of the total office portfolio. The following charts present the sub-market geographic distribution of the Florida and NY tri-state office portfolios at March 31, 2025:
Current wording
The office segment totaled $1.6 billion at June 30, 2025. Medical office comprised approximately $337 million or 20% of the total office portfolio. The following charts present the sub-market geographic distribution of the Florida and NY tri-state office portfolios at June 30, 2025:
Previous wording
The New York tri-state market encompasses approximately 23% of the office segment, with $168 million of exposure in Manhattan. As of March 31, 2025, the Manhattan office portfolio was approximately 95% occupied with 9% rent rollover expected in the next 12 months. The Florida office portfolio is predominantly suburban.
Current wording
The New York tri-state market encompasses approximately 22% of the office segment, with $133 million of exposure in Manhattan. As of June 30, 2025, the Manhattan office portfolio was approximately 96% occupied with 6% rent rollover expected in the next 12 months. The Florida office portfolio is predominantly suburban.
Previous wording
Office loans not secured by properties in Florida or the New York tri-state area comprised 20%, or approximately $335 million of the segment, and exhibited no particular geographic concentration. Estimated rent rollover of the total office portfolio in the next 12 months is approximately 9%; 11% for Florida and 8% for the New York tri-state area.
Current wording
Office loans not secured by properties in Florida or the New York tri-state area comprised 19%, or approximately $315 million of the segment, and exhibited no particular geographic concentration. Estimated rent rollover of the total office portfolio in the next 12 months is approximately 9%; 10% for Florida and 7% for the New York tri-state area.
Previous wording
The construction portfolio includes an additional $87 million in office related exposure, $84 million of which is in New York.
Current wording
The construction portfolio includes an additional $88 million in office related exposure, $84 million of which is in New York.
Previous wording
Non-performing loans included $64 million of office exposure, including office exposure of $31 million in the construction portfolio, at March 31, 2025. Also see the section entitled "Asset Quality" below.
Current wording
Non-performing CRE loans, excluding SBA loans, totaled $142 million at June 30, 2025 and included $124 million of office exposure at June 30, 2025. Also see the section entitled "Asset Quality" below.
Previous wording
(1) Includes $2.0 billion of owner occupied real estate.
Current wording
(1) Includes $1.9 billion of owner occupied real estate.
Previous wording
The Company acquires non-performing FHA and VA insured mortgages from third party servicers who have exercised their right to purchase these loans out of GNMA securitizations upon default ("Buyout Loans"). Buyout Loans that re-perform, either through modification or self-cure, may be eligible for re-securitization. The Company and the servicer share in the economics of the sale of these loans into new securitizations. The balance of Buyout Loans totaled $1.0 billion at March 31, 2025. The Company is not the servicer of these loans.
Current wording
The Company acquires non-performing FHA and VA insured mortgages from third parties who have exercised their right to purchase these loans out of GNMA securitizations upon default ("Buyout Loans"). Buyout Loans that re-perform, either through modification or self-cure, may be eligible for re-securitization. The balance of Buyout Loans totaled $959 million at June 30, 2025.
Previous wording
Operating lease equipment, net totaled $219 million and $224 million at March 31, 2025 and December 31, 2024, respectively, consisting primarily of railcars and other transportation equipment. We expect the balance of operating lease equipment to continue to decline as this product offering is no longer considered core to our business strategy.
Current wording
Operating lease equipment, net totaled $214 million and $224 million at June 30, 2025 and December 31, 2024, respectively, consisting primarily of railcars and other transportation equipment. We expect the balance of operating lease equipment to continue to decline as this product offering is no longer considered core to our business strategy.
Previous wording
(2)Includes C&I, Pinnacle, franchise and equipment finance, and MWL
Current wording
(2)Includes C&I. and franchise and equipment finance.
Previous wording
(1)Includes C&I, Pinnacle, franchise and equipment finance, and MWL
Current wording
(1)Includes C&I, franchise and equipment finance.
Previous wording
(2) Annualized for the three months ended March 31, 2025; ratio for December 31, 2024 represents annual net charge-off rate.
Current wording
(2) Annualized for the six months ended June 30, 2025 and three months ended March 31, 2025; ratio for December 31, 2024 represents annual net charge-off rate.
Showing the first 40 of 57 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $5.4 million and $6.3 million for the six months ended June 30, 2025 and 2024, respectively. The tax-equivalent adjustment for tax-exempt investment securities was $1.4 million and $1.7 million for the six months ended June 30, 2025 and 2024, respectively.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
(1) Annualized for the three months ended March 31, 2025.
Previous report — wording carried elsewhere
loans are generally returned to accrual status when less than 60 days past due. Past due status of loans is determined based on the contractual next payment due date. Loans less than 30 days past due are reported as current.