BankUnited, Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
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.
Mar 31, 2026 · Filed May 7, 2026
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 2025-09-30; filed 2025-11-05.
0001504008-25-000046
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001504008-26-000043
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 241 previous paragraphs and 213 current paragraphs.
144 unchanged; 42 reworded; 24 added; 53 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 49 previous and 39 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 (24)
Current report
•Net income for the three months ended March 31, 2026 was $61.9 million, or $0.83 per diluted share, compared to $69.3 million, or $0.90, per diluted share for the immediately preceding three months ended December 31, 2025 and $58.5 million, or $0.78 per diluted share for the three months ended March 31, 2025. PPNR increased by 12%, to $106.3 million for the three months ended March 31, 2026, from $95.2 million for the three months ended March 31, 2025.
Current report
•For the three months ended March 31, 2026, the annualized ROAA was 0.72% and annualized ROAE was 8.1%.
Current report
•The net interest margin, calculated on a tax-equivalent basis, declined to 2.99% for the three months ended March 31, 2026 from 3.06% for the immediately preceding quarter, reflecting seasonal trends; however the net interest margin increased 18 bps from 2.81% for the three months ended March 31, 2025. The decrease in the net interest margin from the immediately preceding quarter was primarily a result of variable rate assets repricing faster than continued improvement in funding cost and funding mix dynamics.
Current report
•Total deposits, excluding brokered deposits, grew by $277 million for the three months ended March 31, 2026. NIDDA declined by $166 million during the three months ended March 31, 2026, primarily due to seasonality, and represented 30% of total deposits at March 31, 2026. NIDDA grew by $875 million compared to March 31, 2025, one year ago.
Current report
•The ratio of the ACL to total loans declined to 0.87% at March 31, 2026, from 0.91% at December 31, 2025. The ratio of the ACL to non-performing loans increased to 75.90% at March 31, 2026 from 58.99% at December 31, 2025, reflecting the decline in non-performing loans. The provision for credit losses was $24.6 million for the three months ended March 31, 2026, compared to $15.1 million for the three months ended March 31, 2025.
Current report
•At March 31, 2026, CET1 was 12.2%. The ratio of tangible common equity to tangible assets was 8.3%.
Current report
•During the three months ended March 31, 2026, the Company repurchased approximately 1.3 million shares of its common stock for an aggregate purchase price of $60.0 million. In January 2026, the Company's Board of Directors authorized the repurchase of up to an additional $200 million in shares of its outstanding common stock.
Current report
•The Company announced an increase of $0.02 per share in its common stock dividends for the three months ended March 31, 2026, to $0.33 per common share, a 6% increase from the previous level of $0.31 per share.
Current report
Net interest income, calculated on a tax-equivalent basis, was $252.4 million for the three months ended March 31, 2026, compared to $261.6 million for the three months ended December 31, 2025, a decrease of $9.3 million. The decrease was comprised of decreases in tax-equivalent interest income and interest expense of $20.3 million and $11.0 million, respectively. The quarter-over-quarter decline in interest income was primarily due to lower yields on earning assets as coupon rates on floating rate instruments reset down, and was further impacted by lower SOFR/Fed fund basis. The decline in interest expense primarily related to a lower average cost of funds.
Current report
•The tax-equivalent yield on investment securities decreased to 4.55% for the three months ended March 31, 2026, from 4.93% for the three months ended December 31, 2025 primarily impacted by resets on variable rate securities.
Current report
•The tax-equivalent yield on loans decreased to 5.31% for thethree months ended March 31, 2026, from 5.37% for thethree months ended December 31, 2025, reflecting the impact of declining market rates on the predominantly floating-rate commercial loan portfolio.
Current report
•The average cost of interest bearing deposits decreased to 3.01% for the three months ended March 31, 2026, from 3.15% for the three months ended December 31, 2025 as we continued to reduce deposit pricing in response to a lower federal fund rate. The average cost of interest bearing deposits was impacted by seasonal declines in average NIDDA, which resulted in increased reliance on higher-cost wholesale funding, including brokered deposits.
Current report
Net interest income, calculated on a tax-equivalent basis, was $252.4 million for the three months ended March 31, 2026 compared to $236.6 million for the three months ended March 31, 2025, an increase of $15.8 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $21.6 million and $37.4 million, respectively.
Current report
The decrease in tax-equivalent interest income for the three months ended March 31, 2026 compared to the three months ended three months ended March 31, 2025 was attributable to a decrease in the yields on interest earnings assets. The decrease in interest expense for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, was attributable to decreases in both average balance and cost of interest bearing liabilities.
Current report
Decreased yields on average interest earnings assets as well as the decrease in the cost of interest bearing liabilities were primarily attributable to rate cuts throughout the later part of 2025.
Current report
The most significant factor impacting the provision for credit losses for the three months ended March 31, 2026 was an increase in specific reserves, primarily related to two C&I loans in unrelated industries.
Current report
Total loans declined by $139 million for the three months ended March 31, 2026, primarily due to seasonally low commercial volume and continued runoff of non-core loans. Core loans increased by $9 million while the residential, franchise, equipment and municipal finance portfolios declined by $148 million. The securities portfolio grew by $242 million for the three months ended March 31, 2026. The loan-to-deposit ratio was 82.3% at March 31, 2026 compared to 82.7% at December 31, 2025.
Current report
The office segment totaled $1.4 billion at March 31, 2026. Medical office comprised approximately $334 million or 24% of the total office portfolio.
Current report
Total criticized and classified loans declined by $146 million for the three months ended March 31, 2026, while total criticized and classified CRE loans declined by $105 million for the same period. Non-accrual loans declined by $98 million, or 26%, for the three months ended March 31, 2026.
Current report
The increase in the ACL to non-performing loans coverage ratio reflected overall lower non-performing loan balances at March 31, 2026 compared to December 31, 2025.
Current report
As depicted in the chart above, the most significant factors impacting the ACL for the three months ended March 31, 2026, were net charge-offs, partially offset by increases in specific reserves. The ACL was also impacted, although to a lesser extent, by an increase in certain qualitative factors and decreases related to (i) improvement in the economic forecast, (ii) changes in portfolio composition and borrower financial performance and (iii) routine modeling and assumption changes.
Current report
•The ACL for the CRE portfolio sub-segment decreased by $2.6 million during the three months ended March 31, 2026, from 0.86% to 0.81% of loans, primarily a result of improvements in criticized and classified loans.
Current report
Non-interest bearing demand deposits declined by 2%, or $166 million during the quarter ended March 31, 2026, primarily due to seasonality. Total deposits were essentially flat, quarter-over-quarter, increasing by $7 million while non-brokered deposits grew by $277 million during the quarter ended March 31, 2026.
Current report
PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts.
Removed paragraphs (53)
Previous report
•For the three months ended September 30, 2025, the annualized return on average stockholders' equity was 9.5% compared to 9.4% for the three months ended June 30, 2025 and 8.8% for the three months ended September 30, 2024. Return on average assets improved to 0.82% for the three months ended September 30, 2025, from 0.78% and 0.69% for the three months ended June 30, 2025 and September 30, 2024, respectively.
Previous report
•The net interest margin, calculated on a tax-equivalent basis, expanded by 0.07%, to 3.00% for the three months ended September 30, 2025 from 2.93% for the immediately preceding three months ended June 30, 2025. The net interest margin was 2.78% for the three months ended September 30, 2024.
Previous report
•As expected, NIDDA declined by $488 million during the three months ended September 30, 2025, in part due to expected seasonality in the title solutions vertical, and represented 30% of total deposits at September 30, 2025. NIDDA was up $990 million compared to September 30, 2024, one year ago. Average NIDDA grew $210 million for the three months ended September 30, 2025 compared to the immediately preceding three months ended June 30, 2025, and by $741 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Previous report
•Total deposits was essentially flat quarter-over-quarter, declining by $28 million. Non-brokered deposits grew by $1.2 billion compared to one year ago but, as expected, declined by $439 million for the three months ended September 30, 2025 largely due to normal seasonality in the title solutions and government banking verticals.
Previous report
•The ratio of the ACL to total loans was 0.93% at September 30, 2025, consistent with prior quarter-end. The ratio of the ACL to non-performing loans was 57.95%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.35% at September 30, 2025 and the ACL to loans ratio for CRE office loans was 2.21%. The provision for credit losses was $11.6 million for the three months ended September 30, 2025 compared to $15.7 million for the preceding three months ended June 30, 2025 and $9.2 million for the three months ended September 30, 2024.
Previous report
•Our capital position is robust. At September 30, 2025, CET1 was 12.5% and pro-forma CET1, including accumulated other comprehensive income, was 11.7%. The ratio of tangible common equity/tangible assets increased to 8.4%.
Previous report
•As previously reported, in August 2025, the Company redeemed all of its outstanding senior notes due November 2025 at par value plus accrued interest.
Previous report
(2)Annualized.
Previous report
(3) At fair value.
Previous report
Three months ended September 30, 2025 compared to the immediately preceding three months ended June 30, 2025
Previous report
Net interest income, calculated on a tax-equivalent basis, was $253.7 million for the three months ended September 30, 2025, compared to $249.5 million for the three months ended June 30, 2025, an increase of $4.2 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $0.7 million and $4.9 million, respectively, for the three months ended September 30, 2025 compared to the three months ended June 30, 2025. The decline in interest expense related to both a lower average cost of funds and lower average balance of interest bearing liabilities.
Previous report
•The net interest margin was positively impacted by a more favorable funding mix. Average NIDDA increased as a percentage of both total deposits and total funding, growing by $210 million for the three months ended September 30, 2025, while average interest bearing liabilities declined by $526 million.
Previous report
•The average cost of interest bearing liabilities declined to 3.52% for the three months ended September 30, 2025 from 3.57% for the prior three months ended June 30, 2025.
Previous report
•The average rate paid on interest bearing deposits declined to 3.40% for the three months ended September 30, 2025, from 3.48% for the three months ended June 30, 2025. This decline reflected the maturity of higher-rate term deposits, actions taken to proactively reduce deposit pricing in response to a lower Federal funds rate and higher priced brokered deposits, on average, declining for the quarter. The redemption of higher cost senior debt also positively impacted the cost of funds.
Previous report
•The yield on interest earning assets held flat quarter-over-quarter at 5.38%. While the tax equivalent yield on loans declined marginally, the tax equivalent yield on investment securities increased to 5.13% for the three months ended September 30, 2025, from 5.06% for the three months ended June 30, 2025. This increase related to coupon resets during periods of rate volatility and to changes in portfolio composition.
Previous report
Three and nine months ended September 30, 2025 compared to the three andnine months ended September 30, 2024
Previous report
Net interest income, calculated on a tax-equivalent basis, was $253.7 million for the three months ended September 30, 2025, compared to $238.0 million for the three months ended September 30, 2024, an increase of $15.7 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $39.7 million and $55.4 million, respectively.
Previous report
Net interest income, calculated on a tax-equivalent basis, was $739.8 million for the nine months ended September 30, 2025, compared to $686.9 million for the nine months ended September 30, 2024, an increase of $52.9 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $108.2 million and $161.1 million, respectively.
Previous report
The net interest margin, calculated on a tax-equivalent basis, increased to 3.00% and 2.92% for the three and nine months ended September 30, 2025, respectively, from 2.78% and 2.69% for the three and nine months ended September 30, 2024, increases of 0.22% 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.
Previous report
The decrease in lease financing revenue for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, was attributable primarily to the continuing decline of the operating lease equipment portfolio. Expense related to the depreciation of operating lease equipment also reflected a declining trend over these comparative periods.
Previous report
The decline in depreciation of operating lease equipment for the nine months ended September 30, 2025 was primarily attributable to the continued decline in the size of the operating lease equipment portfolio as discussed above.
Previous report
Total loans declined by $595 million for the nine months ended September 30, 2025. Consistent with our balance sheet strategy, the residential, franchise, equipment and municipal finance portfolios declined by $612 million, while the core commercial portfolio segments and mortgage warehouse grew by $17 million. The core C&I and CRE portfolio segments comprised 63.6% of total loans at September 30, 2025, up from 62.5% at December 31, 2024 while residential loans declined to 30.1% of total loans at September 30, 2025 from 31.2% at December 31, 2024. The securities portfolio grew by $337 million over this nine month period. The loan-to-deposit ratio was 82.8% at September 30, 2025 compared to 87.2% at December 31, 2024.
Previous report
We have implemented a robust credit stress testing framework with respect to our non-agency securities. The following table presents subordination levels and average internal stress scenario losses for select non-agency portfolio segments at September 30, 2025:
Previous report
The high credit quality of these securities and adequacy of subordination to cover projected collateral losses supports the conclusion that there is no credit loss impairment. The scenario used to project stress scenario losses is generally calibrated to the level of stress experienced in the Great Financial Crisis. For further discussion of our analysis of impaired investment securities AFS for credit loss impairment, see Note 3 to the consolidated financial statements.
Previous report
The following charts present the distribution of the commercial loan portfolio at the dates indicated (dollars in millions):
Previous report
(1)BankUnited, N.A. information as of September 30, 2025
Previous report
(2)CRE peer information based on June 30, 2025 Call Report data for banks with total assets between $10 billion and $100 billion
Previous report
The following table presents weighted average DSCR and weighted average LTV for the Florida and New York tri-state CRE portfolios, by property type, at September 30, 2025:
Previous report
The office segment totaled $1.5 billion at September 30, 2025, a decline of $122 million for the quarter. Medical office comprised approximately $292 million or 19% of the total office portfolio. The following charts present the sub-market geographic distribution of the Florida and NY tri-state office portfolios at September 30, 2025:
Previous report
The New York tri-state market encompasses approximately 18% of the office segment, with $85 million of exposure in Manhattan. As of September 30, 2025, the Manhattan office portfolio was approximately 98% occupied with 9% rent rollover expected in the next 12 months. The Florida office portfolio is predominantly suburban.
Previous report
Office loans not secured by properties in Florida or the New York tri-state area comprised 21%, or approximately $314 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 12%; 14% for Florida and 10% for the New York tri-state area.
Previous report
The construction portfolio includes an additional $87 million in office related exposure, $83 million of which is in New York.
Previous report
Total criticized classified loans declined by $158 million for the nine months ended September 30, 2025 and was stable quarter-over-quarter, declining by $3 million. Non-accrual loans was also stable quarter-over-quarter, increasing by $3 million. Non-accrual loans increased by $129 million for the nine months ended September 30, 2025. At September 30, 2025 60% of non-accrual loans were current.
Previous report
The following graphs present trends in criticized and classified loans by segment over the periods indicated (in millions):
Previous report
(1)Excludes SBA
Previous report
(2)Includes C&I, and franchise and equipment finance.
Previous report
The following graphs present delinquency trends by segment over the periods indicated (in millions):
Previous report
(1)Includes C&I, franchise and equipment finance.
Previous report
Stress Testing Results
Previous report
The majority of our commercial portfolio is subject to quarterly stress test analysis. We continually re-evaluate our stress testing framework and adapt it to evolving macro-economic conditions, as necessary. On an annual basis, we also run a rigorous credit stress test incorporating the FRB's CCAR severely adverse scenario as well as additional idiosyncratic scenarios reflective of evolving macro-economic themes. The most recent stress test incorporating the FRB's CCAR severely adverse scenario was performed during 2025, based on the December 31, 2024 balance sheet.
Showing the first 40 of 53 passages. Open the source sections for the rest.
Reworded paragraphs (42)
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 and nine months ended September 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").
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 months ended March 31, 2026 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 2025 Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report on Form 10-K").
Previous wording
•The average cost of total deposits declined by 0.09% to 2.38% for the three months ended September 30, 2025, from 2.47% for the immediately preceding three months ended June 30, 2025. The spot APY of total deposits declined by 0.06% to 2.31% at September 30, 2025 from 2.37% at June 30, 2025. The spot APY of total deposits was 2.93% at September 30, 2024, one year ago.
Current wording
•The average cost of total deposits declined to 2.12% for the three months ended March 31, 2026, from 2.18% for the immediately preceding quarter, and 2.58% for the three months ended March 31, 2025. The spot APY of total deposits declined to 2.09% at March 31, 2026 from 2.10% at December 31, 2025.
Previous wording
•For the three months ended September 30, 2025 total loans declined by $231 million. In the aggregate, consistent with our balance sheet strategy, the residential, franchise, equipment and municipal finance portfolios declined by a combined $245 million while the core commercial portfolio segments and mortgage warehouse grew by a combined $14 million.
Current wording
•Total loans declined by $139 million for the three months ended March 31, 2026. Core loans increased by $9 million, impacted by seasonally low commercial volume in the first quarter. Residential, franchise, equipment and municipal finance portfolios declined by a combined $148 million reflective of our balance sheet repositioning strategy.
Previous wording
•The loan to deposit ratio declined to 82.8% at September 30, 2025, from 83.6% at June 30, 2025 and 87.2% at December 31, 2024.
Current wording
•The loan to deposit ratio declined to 82.3% at March 31, 2026, from 82.7% at December 31, 2025.
Previous wording
•Total criticized and classified loans declined by $3 million for the three months ended September 30, 2025 while non-accrual loans increased by $3 million. The annualized net charge-off ratio for the nine months ended September 30, 2025, was 0.26%; the net charge-off ratio for the trailing twelve months was 0.27%. The NPA ratio at September 30, 2025 was 1.10%, including 0.11% related to the guaranteed portion of non-performing SBA loans, compared to 1.08% including 0.10% related to the guaranteed portion of non-accrual SBA loans at June 30, 2025.
Current wording
•Total criticized and classified loans declined by $146 million, or 12%, while non-performing loans declined by $98 million, or 26%, for the three months ended March 31, 2026. The NPA ratio at March 31, 2026 was 0.79%, including 0.10% related to the guaranteed portion of non-performing SBA loans, compared to 1.08% including 0.11% related to the guaranteed portion of non-performing SBA loans at December 31, 2025. The annualized net charge-off ratio for the three months ended March 31, 2026, was 0.61%; the net charge-off for the trailing twelve months was 0.37%.
Previous wording
•Book value and tangible book value per common share continued to accrete, to $40.30 and $39.27, respectively, at September 30, 2025, compared to $39.26 and $38.23, respectively, at June 30, 2025, and $37.56 and $36.52, respectively, at September 30, 2024. This represents an 8% year-over-year increase in tangible book value per share.
Current wording
•Book value and tangible book value per common share were, $41.11 and $40.05, respectively, at March 31, 2026, compared to $41.19 and $40.14, respectively, at December 31, 2025.
Previous wording
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $8.3 million and $9.3 million for the nine months ended September 30, 2025 and 2024, respectively. The tax-equivalent adjustment for tax-exempt investment securities was $2.1 million and $2.6 million for the nine months ended September 30, 2025 and 2024, respectively.
Current 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, 2026, December 31, 2025 and March 31, 2025. The tax-equivalent adjustment for tax-exempt investment securities was $0.7 million for the three months ended March 31, 2026, December 31, 2025, and March 31, 2025.
Previous wording
•Net income for the three months ended September 30, 2025 was $71.9 million, or $0.95 per diluted share, compared to $68.8 million or $0.91 per diluted share for the immediately preceding quarter ended June 30, 2025. Net income was $61.5 million, or $0.81 per diluted share for the three months ended September 30, 2024. Net income for the nine months ended September 30, 2025 was $199.1 million, or $2.63 per diluted share, compared to $163.2 million, or $2.17 per diluted share for the nine months ended September 30, 2024, an increase of 21% in diluted earnings per share.
Current wording
Three months ended March 31, 2026 compared to the three months ended December 31, 2025
Previous wording
The net interest margin, calculated on a tax-equivalent basis, increased by 0.07% to 3.00% for the three months ended September 30, 2025, compared to 2.93% for the immediately preceding three months ended June 30, 2025. Factors impacting the net interest margin for the three months ended September 30, 2025 compared to the three months ended June 30, 2025 included:
Current wording
The net interest margin, calculated on a tax-equivalent basis, was 2.99% for the three months ended March 31, 2026, compared to 3.06% for the three months ended December 31, 2025. The decline reflected variable rate assets repricing faster than the continued improvement in funding cost and funding mix dynamics. Factors impacting the net interest margin for the three months ended March 31, 2026 compared to the three months ended December 31, 2025 included:
Previous wording
•The average rate paid on FHLB advances increased to 3.94% for the three months ended September 30, 2025, from 3.79% for the three months ended June 30, 2025, primarily due to expiration of cash flow hedges.
Current wording
•The average rate paid on FHLB advances decreased to 3.68%for thethree months ended March 31, 2026, from 3.84%for thethree months ended December 31, 2025, driven by repayment of higher rate short-term advances, partially offset by the maturities of some cash flow hedges.
Previous wording
For the three months ended September 30, 2025 compared to the three months ended September 30, 2024, average NIDDA grew by $819 million while average FHLB advances declined by $545 million. For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, average NIDDA grew by $741 million while average FHLB advances declined by $980 million. 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 nine month periods. On the asset side of the balance sheet, average core C&I and CRE loans increased to 63.2% and 63.0% of average loans for the three and nine months ended September 30, 2025, respectively, from 61.4% and 60.6% of average loans for the three and nine months ended September 30, 2024, respectively, while generally lower yielding residential loans declined to 30.7% and 31.0% of average loans from 32.2% and 32.8% of average loans for the respective periods.
Current wording
The net interest margin, calculated on a tax-equivalent basis, increased to 2.99% for the three months ended March 31, 2026, from 2.81% for the three months ended March 31, 2025. The increase in the net interest margin for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily a result of balance sheet repositioning, particularly an improved funding mix. For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, average NIDDA grew by $1.1 billion while average FHLB advances declined by $797 million. Average NIDDA was 29.7% of average total deposits for the three months ended March 31, 2026, up from 27.1% for the three months ended March 31, 2025. 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 loans increased to 67.9% of average loans from 64.8% of average loans, while residential loans declined to 29.1% of average loans from 31.4% of average loans.
Previous wording
The more significant items included in other non-interest income in the table above typically may include commercial card revenue, lending related fees other than origination fees, syndication fees, BOLI income, securities gains and losses and FX fees.
Current wording
The more significant items included in other non-interest income in the table above typically may include commercial card revenue, lending related fees other than origination fees, and BOLI income. The increase for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily a result of increase in commercial card revenue.
Previous 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.
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. Employee compensation and benefits for the three months ended March 31, 2026 includes an additional $5.4 million compensation related expense.
Previous wording
The decrease in deposit insurance expense was primarily attributable to a $5.2 million FDIC special assessment incurred during the nine months ended September 30, 2024. A lower base assessment rate for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, also contributed to the decline in deposit insurance expense.
Current wording
The decrease in deposit insurance expense was primarily attributable to a $6.7 million release of FDIC special assessment accrual during the three months ended March 31, 2026. A lower base assessment rate for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, also contributed to the decline in deposit insurance expense.
Previous wording
We have continued to execute on our organic balance sheet transformation strategy, focused on improving both the funding profile and asset mix. For the nine months ended September 30, 2025, NIDDA grew by $1.0 billion from 27% to 30% of total deposits, and non-brokered deposits grew by $1.5 billion. Wholesale funding, including FHLB advances and brokered deposits, declined by $1.6 billion. Year-over-year, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, average NIDDA grew by $741 million.
Current wording
We have continued to execute on our organic balance sheet transformation strategy, focused on improving both the funding profile and asset mix. For the three months ended March 31, 2026, total deposits remained relatively stable, increasing by $7 million, while non-brokered deposits increased by $277 million over the same period. Wholesale funding, including FHLB advances and brokered deposits, declined by $70 million. NIDDA declined by $166 million representing 30% of total deposits, primarily due to seasonality. Year-over-year, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, average NIDDA increased by $1.1 billion, consistent with continued progress in improving our funding profile.
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, 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 1.60 years andthe estimated weighted average life of the portfolio was 5.0 yearsas of September 30, 2025. Approximately 72% of the securities portfolio was floating rate at September 30, 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 1.93 years andthe estimated weighted average life of the portfolio was 5.2 yearsas of March 31, 2026. Approximately 65% of the securities portfolio was floating rate at March 31, 2026.
Previous wording
The investment securities AFS portfolio was in a net unrealized loss position of $289.9 million at September 30, 2025, an improvement of $115.7 million compared to a net unrealized loss position of $405.6 million at December 31, 2024. The improvement in unrealized losses is largely due to a declining interest rate environment. Net unrealized losses at September 30, 2025 included $22.5 million of gross unrealized gains and $312.4 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at September 30, 2025 had an aggregate fair value of $4.5 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 $274.1 million at March 31, 2026, increasing by $6.9 million compared to a net unrealized loss position of $267.1 million at December 31, 2025. Net unrealized losses at March 31, 2026 included $23.1 million of gross unrealized gains and $297.1 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at March 31, 2026 had an aggregate fair value of $5.2 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
Commercial real estate loans include term loans secured by non-owner occupied income producing properties including rental apartments, industrial properties, retail shopping centers, free-standing single-tenant buildings, medical and other office buildings, warehouse facilities, hotels, and real estate secured lines of credit. The Company’s commercial real estate underwriting standards most often provide for loan terms of five to seven years, with amortization schedules of no more than thirty years. Overall CRE exposure is modest in comparison to peer banks as presented in the charts below:
Current wording
Commercial real estate loans include term loans secured by non-owner occupied income producing properties including rental apartments, industrial properties, retail shopping centers, free-standing single-tenant buildings, medical and other office buildings, warehouse facilities, hotels, and real estate secured lines of credit. The Company’s commercial real estate underwriting standards most often provide for loan terms of five to seven years, with amortization schedules of no more than thirty years.
Previous wording
Geographic distribution in the tables above is based on location of the underlying collateral property. LTVs and DSCRs are based on the most recent available information; if current appraisals are not available, LTVs are adjusted by our models based on current and forecasted sub-market dynamics. DSCRs are calculated based on current contractually required payments, which in some cases may be interest only and on current levels of operating cash flows. DSCR calculations do not include secondary forms of repayment or pro-forma rental payments on in-place leases that are currently in initial rent abatement periods.
Current wording
Geographic distribution in the table above is based on location of the underlying collateral property. LTVs and DSCRs are based on the most recent available information; if current appraisals are not available, LTVs are adjusted by our models based on current and forecasted sub-market dynamics. DSCRs are calculated based on current contractually required payments, which in some cases may be interest only and on current levels of operating cash flows. DSCR calculations do not include secondary forms of repayment or pro-forma rental payments on in-place leases that are currently in initial rent abatement periods.
Previous wording
Included in New York tri-state multifamily loans in the tables above is approximately $107 million of rent regulated exposure as of September 30, 2025.
Current wording
Included in New York tri-state multifamily loans in the tables above is approximately $103 million of rent regulated exposure as of March 31, 2026.
Previous wording
The following table presents information about CRE loans maturing in the next 12 months by property type at September 30, 2025 (dollars in thousands). Sixteen percent 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 March 31, 2026 (dollars in thousands). 17% of the total CRE portfolio, with a weighted average coupon rate of 4.03%, is fixed rate to the borrower and maturing in the next 12 months.
Previous wording
Non-performing CRE loans, excluding SBA loans, totaled $136 million at September 30, 2025 and included $119 million of office exposure. Also see the section entitled "Asset Quality" below.
Current wording
Non-performing CRE loans, excluding SBA loans, totaled $67 million at March 31, 2026 and included $48 million of office exposure. Also see the section entitled "Asset Quality" below.
Previous wording
(1) Includes $1.9 billion of owner occupied real estate.
Current wording
(1) Includes $2.0 billion of owner occupied real estate.
Previous wording
NDFI exposure totaled $1.3 billion, or 5% of total loans, at September 30, 2025. The "Other" category in the chart above includes primarily REITs, B2C, private equity funds, insurance and investment services. The substantial majority of the NDFI portfolio is pass rated, with one $26 million loan rated non-pass.
Current wording
NDFI exposure totaled $1.4 billion, or 6% of total loans, at March 31, 2026. The "Other" category in the chart above includes primarily REITs, B2C, private equity funds, insurance and investment services. The substantial majority of the NDFI portfolio is pass rated, with three loans totaling $27 million rated non-pass.
Previous 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 $898 million at September 30, 2025.
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 $851 million at March 31, 2026.
Previous wording
Operating lease equipment, net totaled $202 million and $224 million at September 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.
Current wording
Operating lease equipment, net totaled $150 million and $171 million at March 31, 2026 and December 31, 2025, 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
(1)Includes $59 million and $85 million of office exposure at September 30, 2025 and December 31, 2024, respectively.
Current wording
(1)Includes $29 million and $58 million of office exposure at March 31, 2026 and December 31, 2025, respectively.
Previous wording
FICO scores are generally updated semi-annually and were most recently updated in the third quarter of 2025. LTVs are typically based on valuation at origination.
Current wording
FICO scores are generally updated semi-annually and were most recently updated in the first quarter of 2026. LTVs are typically based on valuation at origination.
Previous wording
Contractually delinquent government insured residential loans are typically Buyout Loans and are excluded from non-performing loans as defined in the table above due to their government guarantee. The carrying value of such loans contractually delinquent by 90 days or more was $163 million, $193 million and $226 million at September 30, 2025, June 30, 2025 and December 31, 2024 respectively.
Current wording
Contractually delinquent government insured residential loans are typically Buyout Loans and are excluded from non-performing loans as defined in the table above due to their government guarantee. The carrying value of such loans contractually delinquent by 90 days or more was $197 million and $159 million at March 31, 2026 and December 31, 2025, respectively.
Previous wording
For the substantial majority of portfolio segments and subsegments, including residential loans other than government insured loans and most commercial and commercial real estate loans, expected losses are estimated using econometric models. The models employ a factor based methodology, leveraging data sets containing extensive historical loss and recovery information by industry, geography, product type, collateral type and obligor characteristics, to estimate PD and LGD. Measures of PD for commercial loans incorporate current conditions through market cycle or credit cycle adjustments. For residential loans, the models consider FICO, adjusted LTVs and delinquencies. PDs and LGDs are then conditioned on the reasonable and supportable economic forecast. Projected PDs and LGDs, determined based on pool level characteristics, are applied to estimated exposure at default, considering the contractual term and payment structure of loans, adjusted for expected prepayments, to generate estimates of expected loss. For criticized or classified loans, PDs are adjusted to benchmark PDs established for each risk rating given that the most current financial information available is often not reflective of the borrowers' current financial condition. The ACL estimate incorporates a reasonable and supportable economic forecast through the use of externally developed macroeconomic scenarios applied in the models.
Current wording
For the substantial majority of portfolio segments and subsegments, including residential loans other than government insured loans and most commercial and commercial real estate loans, expected losses are estimated using econometric models.
Previous wording
At September 30, 2025, the ratio of the ACL to loans was 0.93%, consistent with June 30, 2025. The commercial ACL ratio, inclusive of C&I, CRE, and franchise and equipment finance was 1.35% at September 30, 2025 compared to 1.36% at June 30, 2025. The ACL to loans ratio for CRE office loans was 2.21% at September 30, 2025 compared to 1.92% at June 30, 2025. Further discussion of changes in the ACL for select portfolio sub-segments follows:
Current wording
At March 31, 2026, the ratio of the ACL to loans was 0.87%, compared to 0.91% at December 31, 2025. The commercial ACL ratio, inclusive of C&I, CRE, and franchise and equipment finance was 1.25% at March 31, 2026 compared to 1.30% at December 31, 2025. The ACL to loans ratio for CRE office loans was 1.69% at March 31, 2026 compared to 2.03% at December 31, 2025. Further discussion of changes in the ACL for select portfolio sub-segments follows:
Previous wording
•The ACL for the commercial and industrial sub-segment decreased by $6.1 million during the three months ended September 30, 2025, from 1.72% to 1.67% of loans. The most significant factors leading to the decrease were an improvement in current economic conditions and the economic forecast. Net charge-offs were partially offset by an increase in specific reserves.
Current wording
•The ACL for the commercial and industrial sub-segment decreased by $6.8 million during the three months ended March 31, 2026, from 1.65% to 1.60% of loans, primarily a result of net charge-offs, partially offset by increases in specific reserves.
Previous wording
•Labor market assumptions, which reflected national unemployment peaking at 4.8% and
Current wording
•Labor market assumptions, which reflected national unemployment peaking at 4.5% and
Previous wording
•Annualized growth in national GDP averaging 2.2%.
Current wording
•Annualized growth in national GDP averaging 2.8%.
Previous wording
The Company has a diverse deposit book. At September 30, 2025, our largest industry verticals were national title solutions with approximately $4.7 billion in total deposits and HOA with $2.1 billion in total deposits. Approximately 69% of our deposits were commercial or municipal deposits at September 30, 2025.
Current wording
The Company has a diverse deposit book. At March 31, 2026, our largest industry vertical was title insurance with approximately $4.1 billion in total deposits. Deposits in the HOA vertical totaled $2.3 billion at March 31, 2026. Approximately 70% of our deposits were commercial or municipal deposits at March 31, 2026.
Previous wording
Brokered deposits totaled $4.5 billion and $5.2 billion at September 30, 2025 and December 31, 2024, respectively. Brokered deposits are generally insured and typically a readily available source of funds, however, they are typically higher cost and in some circumstances, credit sensitive.
Current wording
Brokered deposits totaled $4.6 billion and $4.9 billion at March 31, 2026 and December 31, 2025, respectively. Brokered deposits are generally insured and typically a readily available source of funds, however, they are typically higher cost and in some circumstances, credit sensitive. We are strategically focused on reducing the level of brokered deposits in the future.
Previous wording
At September 30, 2025, the ratio of estimated insured and collateralized deposits to total deposits was 58% and the ratio of available liquidity to estimated uninsured, uncollateralized deposits was 138%. As a commercially focused bank, due to the inherent nature of commercial deposits and the fact that deposit insurance is designed primarily to protect consumers, a significant portion of our deposits are uninsured.
Current wording
At March 31, 2026, the ratio of estimated insured and collateralized deposits to total deposits was 57% and the ratio of available liquidity to estimated uninsured, uncollateralized deposits was 136%. As a commercially focused bank, due to the inherent nature of commercial deposits and the fact that deposit insurance is designed primarily to protect consumers, a significant portion of our deposits are uninsured.
Previous wording
•Prepayment speeds for loans, with CPRs ranging from 6.2% to 11.4% depending on loan characteristics and the magnitude of the modeled rate shock;
Current wording
•Prepayment speeds for loans, with CPRs ranging from 7.45% to 16.31% depending on loan characteristics and the magnitude of the modeled rate shock;
Previous wording
•Prepayment speeds for investment securities, with CPRs ranging from 4.3% to 13.1% depending on individual security collateral and characteristics and the magnitude of the modeled rate shock;
Current wording
•Prepayment speeds for investment securities, with CPRs ranging from 4.24% to 12.87% depending on individual security collateral and characteristics and the magnitude of the modeled rate shock;
Previous wording
•Deposit decay rates ranging between 17% and 22%;
Current wording
•Deposit decay rates ranging between 9.73% and 13.7%, depending on the magnitude of the modeled rate shock; and
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•Wholesale funding, including FHLB advances and brokered deposits, declined by $70 million for the three months ended March 31, 2026.
Current report — wording carried from elsewhere
Three months ended March 31, 2026 compared to the three months ended March 31, 2025
Current report — wording carried from elsewhere
The following tables reconcile the non-GAAP financial measurement to the comparable GAAP financial measurements at the dates and for the periods indicated (in thousands except share and per share data):
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $2.9 million for the three months ended September 30, 2025, $2.7 million for the three months ended June 30, 2025, and $3.0 million for the three months ended September 30, 2024. The tax-equivalent adjustment for tax-exempt investment securities was $0.7 million for both the three months ended September 30, 2025 and June 30, 2025, and $0.9 million for the three months ended September 30, 2024.
Previous report — wording carried elsewhere
The following graphs present trends in non-performing loans to total loans and non-performing assets to total assets over the periods indicated, as well as trends in net charge-offs.