BankUnited, Inc.
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 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-K
Period ended 2024-12-31; filed 2025-02-28.
0001504008-25-000005
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0001504008-26-000011
Item 7. 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 302 previous paragraphs and 274 current paragraphs.
159 unchanged; 78 reworded; 34 added; 59 removed; 6 previous and 3 current paragraphs rearranged.
Tables are not compared: 53 previous and 51 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 (34)
Current report
◦Grow NIDDA particularly in national deposit verticals, middle-market and small business;
Current report
◦Invest in payments technology and leverage treasury solutions to enhance deposit acquisition and promote customer retention;
Current report
◦Rebalance the loan portfolio toward higher-yielding commercial lending as lower-yielding residential loans roll off, driving NIM expansion through mix shift;
Current report
•Focus on key markets and geographies, specifically Florida, Texas, Georgia and New Jersey;
Current report
Overview
Current report
•During the year ended December 31, 2025, the Company repurchased approximately 1.1 million shares of its common stock for an aggregate purchase price of $44.8 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
•In the first quarter of 2025, the Company increased its quarterly dividends by $0.02, to $0.31 per share, reflecting a 7% increase from the previous quarterly cash dividend of $0.29 per share and maintained that quarterly level through 2025. In January 2026, the Company's Board of Directors announced an increase of $0.02 in the Company's common stock dividend for future quarterly dividends to $0.33 per common share, an increase of 6%.
Current report
•In August 2025, the Company redeemed all of its outstanding senior notes due November 2025 at par value plus accrued interest.
Current report
The ACL estimates incorporate a probability‑weighted blend of macroeconomic scenarios, with weights determined by an evaluation of each scenario’s key assumptions and narrative, the projected paths of principal economic variables, such as real GDP growth and the unemployment rate, and other relevant market indicators and consensus forecasts. Scenarios include (i) a baseline forecast; (ii) an upside scenario reflecting above-baseline levels of output and lower unemployment rate; and (iii) a downside scenario reflecting softer business investment, depressed consumer sentiment, and generally weaker economic activity.
Current report
To illustrate directional sensitivity to the choice of scenario, excluding the impact of qualitative factors, the impact of using only the upside scenario would result in an estimated $21 million decrease in the ACL, while using only the downside scenario would result in an estimated increase of $111 million in the ACL. The sensitivity analysis result does not represent management’s view of expected credit losses nor is it intended to estimate future changes in ACL levels.
Current report
The net interest margin, calculated on a tax-equivalent basis, increased to 2.95% for the year ended December 31, 2025, from 2.73% for the year ended December 31, 2024. Both the yield on interest earning assets and the cost of interest bearing liabilities declined during the year, 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 average cost of interest bearing deposits decreased to 3.39% for the year ended December 31, 2025, from 4.10% for the year ended December 31, 2024. This decline reflected actions taken to proactively reduce deposit pricing in response to a lower Federal funds rate and re-pricing of term deposits.
Current report
The most significant factor impacting the provision for credit losses for the year ended December 31, 2025 was an increase in specific reserves, partially offset by; (i) changes in portfolio composition and borrower financial performance, (ii) improvements in the economic forecast, and (iii) routine modeling and assumption updates.
Current report
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, BOLI income and securities gains and losses. The increase for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily a result of increase in BOLI income.
Current report
The increase in compensation relates to investments we are making in people to support future growth of the commercial business, regular merit increases, and increased variable compensation cost, related in part to an increase in the Company's stock price.
Current report
Other non-interest expense for the year ended December 31, 2025 included $3.8 million of write downs of previously capitalized software.
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 year ended December 31, 2025, NIDDA grew by $1.5 billion from 27% to 31% of total deposits, and non-brokered deposits grew by $1.8 billion. Wholesale funding, including FHLB advances and brokered deposits, declined by $1.7 billion. For the year ended December 31, 2025 compared to the year ended December 31, 2024, average NIDDA grew by $844 million.
Current report
Total loans declined by $24 million for the year ended December 31, 2025. Consistent with our balance sheet strategy, residential, franchise, equipment and municipal finance portfolios declined by $810 million, while core loans grew by $786 million. The core loan portfolio segments comprised 68.2% of total loans at December 31, 2025, up from 64.9% at December 31, 2024, while residential loans declined to 28.8% of total loans at December 31, 2025 from 31.2% at December 31, 2024. The securities portfolio grew by $133 million. The loan-to-deposit ratio was 82.7% at December 31, 2025 compared to 87.2% at December 31, 2024.
Current report
The office segment totaled $1.4 billion at December 31, 2025, a decline of $343 million for the year. Medical office comprised approximately $307 million or 22% of the total office portfolio.
Current report
The following chart presents the geographic distribution of the commercial and industrial portfolio at December 31, 2025:
Current report
C&I Geographic Distribution
Current report
The following chart presents a further breakdown of the NDFI portfolio at December 31, 2025:
Current report
NDFI Portfolio Distribution
Current report
NDFI exposure totaled $1.5 billion, or 6% of total loans, at December 31, 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 two loans totaling $44 million rated non-pass.
Current report
Total criticized classified loans declined by $185 million for the year ended December 31, 2025, while total criticized and classified CRE loans declined by $122 million for the same period.
Current report
(2)Commercial includes C&I, and franchise and equipment finance.
Current report
(1)Includes $58 million and $85 million of office exposure at December 31, 2025 and 2024, respectively.
Current report
The year-over-year decline in the ratio of the ACL to non-performing loans is related to non-performing loans that have no or relatively low related ACL due to the adequacy of estimated collateral value to cover the remaining outstanding balance, which is in some cases net of partial charge-offs recognized.
Current report
The following charts present non-performing CRE loans by property type at the dates indicated (in millions):
Current report
As depicted in the chart above, the most significant factors impacting the ACL for the year ended December 31, 2025, were increases in specific reserves, partially offset by net charge-offs. The ACL was also impacted although to a lesser extent, by an increases in certain qualitative factors and risk rating migration 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 $12.1 million during the year ended December 31, 2025, from 1.13% to 0.86% of loans, primarily a result of net charge-offs, partially offset by an increase in qualitative overlays related to the office sub-segment and New York rent regulated multi-family loans.
Current report
•The ACL for the commercial and industrial sub-segment increased by $10.7 million during the year ended December 31, 2025, from 1.54% to 1.65% of loans. The increase was primarily a result of increases in specific reserves, offset by net charge-offs and improvement in current economic conditions and the economic forecast.
Current report
In August 2025, the Company redeemed all of its outstanding senior notes due November 2025 at par value plus accrued interest.
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 (59)
Previous report
◦Pay down high-cost wholesale borrowings;
Previous report
◦As lower-yielding residential mortgages amortize and pay off, replace them with higher yielding core C&I and CRE loans within established risk parameters
Previous report
Macro-Environmental Considerations
Previous report
The macro-environment has been challenging for the banking industry over the last several years. The FRB rate hiking cycle that commenced in 2022 continued through the first half of 2023 before stabilizing. Although a series of FRB rate cuts totaling 1% in the aggregate took place beginning in September 2024, monetary policy remains generally restrictive. Three highly publicized regional bank closures in 2023 eroded confidence in the banking system, specifically with respect to regional and mid-size banks, leading to outflows of deposits from regional and mid-size banks, including BankUnited, to the largest money-center banks and to volatility in bank valuations. Deposit flows, liquidity and market perceptions have stabilized since those events, however, the impacts of those events and a volatile interest rate environment on bank balance sheets and margins, including those of BankUnited, are still evident and have influenced our Company's strategic priorities.
Previous report
We made significant progress executing on our strategic priorities in 2024:
Previous report
•The funding mix improved considerably for the year ended December 31, 2024:
Previous report
◦NIDDA grew by $781 million to 27% of total deposits.
Previous report
◦Non-brokered deposits grew by $1.4 billion and total deposits grew by $1.3 billion.
Previous report
•The asset mix also improved in 2024:
Previous report
◦The core CRE and C&I loan segments grew by $470 million and mortgage warehouse grew by $153 million. The pace of C&I growth over the course of 2024 was impacted by an increased level of payoffs and rationalization of non-relationship credits.
Previous report
•Primarily due to those balance sheet compositional changes, for the year ended December 31, 2024, the net interest margin, calculated on a tax-equivalent basis, improved to 2.73% from 2.56% for the year ended December 31, 2023.
Previous report
•Capital and liquidity were robust:
Previous report
◦Consolidated CET1 capital was 12.0% and pro-forma CET1, including accumulated other comprehensive income, was 10.9% at December 31, 2024.
Previous report
◦Total same day available liquidity was $15.5 billion at December 31, 2024.
Previous report
•our estimate of expected cash flows on AFS debt securities in unrealized loss positions.
Previous report
Increases in interest income for the year ended December 31, 2024 compared to the year ended December 31, 2023 reflected rising yields on interest earning assets that more than offset the decline in average interest earning assets. Similarly, increases in interest expense for the year ended December 31, 2024 compared to the year ended December 31, 2023, resulted from increases in the cost of interest bearing liabilities that more than offset the decline in average interest bearing liabilities.
Previous report
In part, increased yields on average interest earning assets as well as increases in the cost of deposits reflected the impact of a generally more sustained higher rate environment.
Previous report
•The average cost of interest bearing deposits increased to 4.10% for the year ended December 31, 2024, from 3.52% for the year ended December 31, 2023. This increase primarily reflected the ongoing impact of higher prevailing market interest rates, which did not start to reverse until the latter part of 2024.
Previous report
The most significant factors impacting the provision for credit losses for the year ended December 31, 2024 included (i) risk rating migration and increases in certain specific reserves; and (ii) an increase in qualitative loss factors, partially offset by an improved economic forecast.
Previous report
The losses on marketable equity securities during the years ended December 31, 2023 and 2022, were attributable to losses related to certain preferred equity investments.
Previous report
The increase in other non-interest income for the year ended December 31, 2024, compared to the year ended December 31, 2023, reflected increases in BOLI income, higher loan-related and syndication fees and increased revenue from our customer derivative and commercial card businesses.
Previous report
The most significant reason for the year-over-year increase in compensation was an increase in variable compensation expense. This increase was related to the improved performance of the Company for 2024 compared to 2023 as well as to the impact of an increase in the Company's stock price on the valuation of liability classified share awards. Increased head count and routine salary increases also contributed to this trend.
Previous report
The most significant factor impacting the increase in other non-interest expense for the year ended December 31, 2024, compared to the year ended December 31, 2023 was an increase in costs related to certain customer rebate and commission programs. This increase resulted primarily from an increase in balances participating in these programs. See Note 6 to the consolidated financial statements for more information about these costs.
Previous report
As we continued to execute on our balance sheet transformation strategy over the course of theyear ended December 31, 2024, total deposits grew by $1.3 billion, $781 million of which was growth in NIDDA. Non-brokered deposits grew by $1.4 billion while wholesale funding, including FHLB advances and brokered deposits, declined by $2.3 billion. On the asset side of the balance sheet, although total loans declined by $336 million, the core C&I and CRE segments grew by $470 million and MWL grew by $153 million. Lower yielding residential loans declined by $628 million, and franchise, equipment, and municipal finance declined by a combined $331 million. The loan-to-deposit ratio improved to 87.2% at December 31, 2024 from 92.8% at December 31, 2023.
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 December 31, 2024:
Previous report
While we have seen an increase in stress scenario losses for some securities over the last year, the level of subordination continues to provide more than sufficient coverage of stress scenario collateral losses, further supporting our determination that none of our securities are credit loss impaired. 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
We use third-party pricing services to assist us in estimating the fair value of investment securities. We perform a variety of procedures to ensure that we have a thorough understanding of the methodologies and assumptions used by the pricing services including obtaining and reviewing written documentation of the methods and assumptions employed, conducting interviews with valuation desk personnel, and reviewing model results and detailed assumptions used to value selected securities as considered necessary. Our classification of prices within the fair value hierarchy is based on an evaluation of the nature of the significant assumptions impacting the valuation of each type of security in the portfolio. Our primary pricing services utilize observable inputs when available, and employ unobservable inputs and proprietary models only when observable inputs are not available. As a matter of course, the services validate prices by comparison to recent trading activity whenever such activity exists. Quotes obtained from the pricing services are typically non-binding.
Previous report
Quarterly, prices obtained from primary third-party pricing services are validated by obtaining prices from an additional external source for most securities in the portfolio. We have established a robust price challenge process that includes a review by our treasury front office of all prices provided on a quarterly basis. Prices evidencing unexpected quarter over quarter fluctuations, deviations from our expectations based on recent observed trading activity and other information available in the marketplace that would impact the value of the security or deviations of primary prices from those provided by secondary sources beyond established parameters are challenged. Responses to the price challenges, which generally include specific information about inputs and assumptions incorporated in the valuation and their sources, are reviewed in detail. If considered necessary to resolve any discrepancies, a price will be obtained from additional independent valuation sources. We do not typically adjust the prices provided, other than through this established challenge process.
Previous report
The following charts present the distribution of the commercial loan portfolio at the dates indicated (dollars in millions):
Previous report
(1)BKU information as of December 31, 2024
Previous report
The geographic mix of the portfolio has remained relatively consistent year-over-year, with the majority in Florida, although the geographic distribution has become somewhat more diverse with the percentage outside of Florida and the New York tri-state market growing.
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 December 31, 2024:
Previous report
The office segment totaled $1.8 billion at December 31, 2024. Medical office comprised approximately $350 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 December 31, 2024:
Previous report
The New York tri-state market encompasses approximately 23% of the office segment, with $169 million of exposure in Manhattan. As of December 31, 2024, the Manhattan office portfolio was approximately 95% occupied with 10% 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 20%, or approximately $351 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%; 15% for Florida and 9% for the New York tri-state area.
Previous report
The construction portfolio includes an additional $88 million in office related exposure, $85 million of which is in New York.
Previous report
Bridge had exposure to the energy industry of $109 million at December 31, 2024. The majority of the energy exposure was in the operating lease equipment portfolio where energy exposure totaled $103 million, consisting primarily of railcars serving the petroleum industry.
Previous report
Total criticized and classified commercial loans increased by $247 million for the year ended December 31, 2024. Criticized and classified CRE loans increased by $286 million; $245 million of this increase was office exposure (including office related construction loans). As expected in the current environment, there has been some further risk rating migration within the CRE office category. Rent abatement periods, delays in completing build-out of leased space and in some cases lower occupancy levels have contributed to risk rating migration in the office portfolio. When office space is leased to new tenants, landlords frequently provide initial rent abatement periods. During these rent abatement periods, we do not include pro-forma rental payments to be made in the future under the terms of new leases in operating cash flows for the purposes of determining risk ratings. We believe we have now identified the population of potential problem CRE office loans.
Previous report
(2)Includes C&I, Pinnacle, franchise and equipment finance, and MWL
Previous report
(1)Includes Pinnacle and franchise and equipment finance
Showing the first 40 of 59 passages. Open the source sections for the rest.
Reworded paragraphs (78)
Previous wording
◦Continue to de-emphasize the BFG and Pinnacle portfolios;
Current wording
◦Continue to de-emphasize the BFG portfolio;
Previous wording
•Maintain robust liquidity and capital levels;
Current wording
•Maintain robust liquidity and capital levels, while returning excess capital to shareholders as appropriate;
Previous wording
•The future trajectories of the macro-economy, interest rates, and monetary and fiscal policy are uncertain. Additionally, with a new administration in place, there is uncertainty around the impact of a variety of potential policy and regulatory changes. The impact of these macro factors on our customers and prospective customers also impacts us. If macro conditions are less supportive than we currently anticipate, we may be less successful in executing our strategic priorities.
Current wording
•The future trajectories of the macro-economy, interest rates, and monetary and fiscal policy are uncertain. The impact of these macro factors on our customers and prospective customers also impacts us. If macro conditions are less supportive than we currently anticipate, we may be less successful in executing our strategic priorities.
Previous wording
In evaluating our financial performance, we consider improvement in the funding mix and the composition of earning assets, the level of and trends in net interest income and the net interest margin, the cost of deposits, trends in non-interest income and non-interest expense, performance ratios such as the return on average equity and return on average assets and asset quality ratios, including the ratio of non-performing loans to total loans, non-performing assets to total assets, trends in criticized and classified assets and portfolio delinquency and charge-off trends. We analyze these ratios and trends against our own historical performance, our expected performance, our risk appetite and the financial condition and performance of comparable financial institutions.
Current wording
In evaluating our financial performance, we consider (i) the funding mix and the composition of interest earning assets; (ii) the level of and trends in net interest income and the net interest margin; (iii) the cost of deposits, trends in non-interest income and non-interest expense; (iv) performance ratios such as the return on average equity and return on average assets and trends in those metrics; and (v) asset quality metrics, including the level of criticized and classified assets, the ratios of non-performing loans to total loans and non-performing assets to total assets, delinquency and net charge-off rates, as well as trends in those metrics. We analyze these ratios and trends against our own historical performance, our expected performance, our risk appetite and the financial condition and performance of comparable financial institutions.
Previous wording
◦Net income for the year ended December 31, 2024, was $232.5 million, or $3.08 per diluted share, compared to $178.7 million, or $2.38 per diluted share for the year ended December 31, 2023.Results for the year ended December 31, 2023 were negatively impacted by a $35.4 million FDIC special assessment, pre-tax. This item reduced net income by $26.2 million and EPS by $0.35 for the year ended December 31, 2023.
Current wording
•Net income for the year ended December 31, 2025 was $268.4 million, or $3.53 per diluted share, compared to $232.5 million, or $3.08 per diluted share for the year ended December 31, 2024, an increase of 15%. PPNR increased by 16%, to $429.7 million for the year ended December 31, 2025, from $371.4 million for the year ended December 31, 2024.
Previous wording
◦ROAA improved to 0.66% for the year ended December 31, 2024 from 0.49% for the year ended December 31, 2023; ROAE improved to 8.49% from 7.01%.
Current wording
•ROAA improved to 0.77% for the year ended December 31, 2025, from 0.66% for the year ended December 31, 2024; ROAE improved to 9.0% from 8.5%.
Previous wording
◦The net interest margin, calculated on a tax-equivalent basis, expanded by 0.17%, to 2.73% for the year ended December 31, 2024 from 2.56% for the year ended December 31, 2023. The increase in the net interest margin was primarily a result of balance sheet repositioning, particularly an improved funding mix. The following chart provides a comparison of net interest margin, the average yield on interest earning assets and the average rate paid on interest bearing liabilities for the years ended December 31, 2024 and 2023 (on tax equivalent basis):
Current wording
•The net interest margin, calculated on a tax-equivalent basis, expanded by 0.22%, to 2.95% for the year ended December 31, 2025 from 2.73% for the year ended December 31, 2024. The increase in the net interest margin was primarily a result of balance sheet repositioning, particularly improved funding mix, and re-pricing of deposit costs in line with a lower interest rate environment. Net interest income grew by $73.3 million, or 8%, for the year ended December 31, 2025. The following chart provides a comparison of net interest margin, the average yield on interest earning assets, and the average rate on interest bearing liabilities for the years ended December 31, 2025 and 2024 (on a tax equivalent basis):
Previous wording
◦Consistent with industry trends, higher prevailing interest rates and restrictive monetary policy, the average cost of total deposits increased by 0.46% to 3.01% for the year ended December 31, 2024, from 2.55% for the year ended December 31, 2023, although the average cost of deposits has declined over the latter half of the year. The spot APY of total deposits declined to 2.63% at December 31, 2024 from 3.18% at December 31, 2023, reflecting the declines in the fed funds rate in the latter half of the year and an improved deposit mix.
Current wording
•The average cost of total deposits declined by 0.61% to 2.40% for the year ended December 31, 2025, from 3.01% for the year ended December 31, 2024. The spot APY of total deposits declined to 2.10% at December 31, 2025 from 2.63% at December 31, 2024.
Previous wording
◦NIDDA grew by 11%, or $781 million during the year ended December 31, 2024. Total deposits grew by $1.3 billion and non-brokered deposits grew by $1.4 billion. Average NIDDA increased by $148 million for the year ended December 31, 2024.
Current wording
•NIDDA grew by 20%, or $1.5 billion during the year ended December 31, 2025, and represented 31% of total deposits at December 31, 2025. Total deposits grew by $1.5 billion and non-brokered deposits grew by $1.8 billion. Average NIDDA increased by $844 million for the year ended December 31, 2025.
Previous wording
◦Wholesale funding, including FHLB advances and brokered deposits, declined by $2.3 billion.
Current wording
•Wholesale funding, including FHLB advances and brokered deposits, declined by $1.7 billion for the year ended December 31, 2025.
Previous wording
◦Loan portfolio composition shifted from residential to core commercial categories during the year ended December 31, 2024. Residential, franchise, equipment and municipal finance portfolios declined by a combined $959 million while the core C&I and CRE categories grew by $470 million for the year ended December 31, 2024, all reflective of our balance sheet repositioning strategy.
Current wording
•Loan portfolio composition continued to shift from residential to core commercial categories during the year ended December 31, 2025. Residential, franchise, equipment and municipal finance portfolios declined by a combined $810 million while the core loans grew by $786 million for the year ended December 31, 2025, reflective of our balance sheet repositioning strategy.
Previous wording
◦The loan to deposit ratio declined to 87.2% at December 31, 2024, from 92.8% at December 31, 2023.
Current wording
•The loan to deposit ratio declined to 82.7% at December 31, 2025, from 87.2% at December 31, 2024.
Previous wording
◦The net charge-off ratio for the year ended December 31, 2024, was 0.16%, a level we consider to be relatively low. The NPA ratio at December 31, 2024 was 0.73%, including 0.10% related to the guaranteed portion of non-performing SBA loans.
Current wording
•Total criticized and classified loans declined by $185 million while non-performing loans increased by $122 million for the year ended December 31, 2025. The net charge-off ratio for the year ended December 31, 2025, was 0.30%. The NPA ratio at December 31, 2025 was 1.08%, including 0.11% related to the guaranteed portion of non-performing SBA loans.
Previous wording
◦At December 31, 2024, CET1 was 12.0% and pro-forma CET1, including accumulated other comprehensive income, was 10.9%. The ratio of tangible common equity/tangible assets increased to 7.8%. The charts below present the Company's and the Bank's regulatory capital ratios at the dates indicated:
Current wording
•At December 31, 2025, CET1 was 12.3% up 0.30% from December 31, 2024. AOCI improved by $94.9 million from December 31, 2024. The ratio of tangible common equity to tangible assets increased to 8.5%. The charts below represent the Company's and the Bank's regulatory capital ratios at the dates indicated:
Previous wording
◦Book value and tangible book value per common share grew to $37.65 and $36.61, respectively, at December 31, 2024, from $34.66 and $33.62, respectively, at December 31, 2023.
Current wording
•Book value and tangible book value per common share continued to accrete, to $41.19 and $40.14, respectively, at December 31, 2025, compared to $37.65 and $36.61, respectively, at December 31, 2024. This represents a 10% year-over-year increase in tangible book value per share.
Previous wording
The ACL represents management's estimate of current expected credit losses, or the amount of amortized cost basis not expected to be collected, on our loan portfolio and the amount of credit loss impairment on our AFS securities portfolio. Determining the amount of the ACL is considered a critical accounting estimate because of its complexity and because it requires extensive judgment and estimation. Estimates that are particularly susceptible to change that may have a material impact on the amount of the ACL include:
Current wording
The ACL represents management's estimate of current expected credit losses, or the amount of amortized cost basis not expected to be collected, on our loan portfolio. Determining the amount of the ACL is considered a critical accounting estimate because of its complexity and because it requires extensive judgment and estimation. Estimates that are particularly susceptible to change that may have a material impact on the amount of the ACL include:
Previous wording
•the value of underlying collateral, which may impact loss severity and certain cash flow assumptions for collateral-dependent, criticized and classified loans; in the current environment, especially with respect to certain commercial real estate sectors like office, current and projected collateral values may be particularly challenging to estimate;
Current wording
•the value of underlying collateral, which may impact loss severity and certain cash flow assumptions for collateral-dependent, criticized and classified loans; in the current environment, especially with respect to certain commercial real estate sectors like office, current and projected collateral values may be particularly challenging to estimate; and
Previous wording
•our selection and evaluation of qualitative factors; and
Current wording
•our selection and evaluation of qualitative factors.
Previous wording
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $12.2 million, $13.4 million and $12.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. The tax-equivalent adjustment for tax-exempt investment securities was $3.3 million, $3.6 million and $3.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Current wording
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $11.0 million, $12.2 million and $13.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The tax-equivalent adjustment for tax-exempt investment securities was $2.8 million, $3.3 million and $3.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Previous wording
Net interest income, calculated on a tax-equivalent basis, was $929.8 million for the year ended December 31, 2024, compared to $890.8 million for the year ended December 31, 2023, an increase of $39.0 million. The increase was comprised of increases in tax-equivalent interest income and interest expense of $66.1 million and $27.1 million, respectively.
Current wording
Net interest income, calculated on a tax-equivalent basis, was $1.0 billion for the year ended December 31, 2025, compared to $929.8 million for the year ended December 31, 2024, an increase of $71.6 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $134.0 million and $205.6 million, respectively.
Previous wording
The net interest margin, calculated on a tax-equivalent basis, increased to 2.73% for the year ended December 31, 2024, from 2.56% for the year ended December 31, 2023. The increase in the net interest margin for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily a result of balance sheet repositioning, particularly an improved funding mix. For the year ended December 31, 2024 compared to the year ended December 31, 2023, average NIDDA grew by $148 million while average FHLB advances declined by $2.5 billion. Within interest bearing deposits, there was a shift from generally higher priced time deposits to generally lower priced forms of interest bearing deposits.
Current wording
For the year ended December 31, 2025 compared to the year ended December 31, 2024, average NIDDA grew by $844 million while average FHLB advances declined by $914 million. 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 65.9% of average loans for the year ended December 31, 2025, from 62.8% of average loans for the year ended December 31, 2024, while generally lower-yielding residential loans declined to 30.7% of average loans from 32.6% of average loans for the respective periods.
Previous wording
•The tax-equivalent yield on loans increased to 5.78% for theyear ended December 31, 2024, from 5.42% for theyear ended December 31, 2023. This increase reflected the origination of new loans at higher rates, paydowns of lower-rate loans and balance sheet repositioning.
Current wording
•The tax-equivalent yield on loans decreased to 5.48% for theyear ended December 31, 2025, from 5.78% for theyear ended December 31, 2024. This decrease reflected the impact of declining market rates on the predominantly floating rate commercial portfolio.
Previous wording
•The tax-equivalent yield on investment securities increased to 5.53% for the year ended December 31, 2024, from 5.33% for the year ended December 31, 2023. This increase resulted primarily from the reset of coupon rates on variable rate securities, purchases of higher-yielding securities and paydowns and sales of lower-yielding securities.
Current wording
•The tax-equivalent yield on investment securities decreased to 5.04% for the year ended December 31, 2025, from 5.53% for the year ended December 31, 2024. This decrease resulted primarily from the reset of coupon rates on variable rate securities.
Previous wording
•The average rate paid on FHLB advances decreased to 4.15%for theyear ended December 31, 2024, from 4.50%for theyear ended December 31, 2023, primarily due to repayment of higher rate advances, partially offset by maturities of some cash flow hedges.
Current wording
•The average rate paid on FHLB advances decreased to 3.82%for theyear ended December 31, 2025, from 4.15%for theyear ended December 31, 2024, primarily due to repayment of higher rate short-term advances, partially offset by the maturities of some cash flow hedges.
Previous wording
The decrease in lease financing revenue for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily attributable to the continued decline in the size of the operating lease equipment portfolio. Expense related to the depreciation of operating lease equipment reflected a corresponding decrease over these comparative periods. These declines are expected to continue.
Current wording
The decrease in lease financing revenue for the year ended December 31, 2025, compared to the year ended December 31, 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 wording
The decrease in deposit insurance expense was primarily attributable to a $35.4 million FDIC special assessment incurred during the year ended December 31, 2023. An additional $5.2 million FDIC special assessment was incurred during the year ended December 31, 2024.
Current wording
The decrease in deposit insurance expense was primarily attributable to a $5.2 million FDIC special assessment incurred during the year ended December 31, 2024. A lower base assessment rate for the year ended December 31, 2025 compared to the year ended December 31, 2024, also contributed to the decline in deposit insurance expense.
Previous wording
The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 was$83.9 million, $58.4 million and $90.2 million, respectively. The Company's effective income tax rate was 26.52%, 24.64% and 24.03% for the years ended 2024,2023 and 2022, respectively.
Current wording
The provision for income taxes for the years ended December 31, 2025, 2024 and 2023 was $93.4 million,$83.9 million and $58.4 million, respectively. The Company's effective income tax rate was 25.82%, 26.52% and 24.64% for the years ended 2025,2024 and 2023, respectively.
Previous wording
The following table shows the amortized cost and carrying value, which, with the exception of investment securities held to maturity, is fair value, of investment securities at the dates indicated (in thousands):
Current wording
The following table shows the amortized cost and carrying value, which is fair value, of investment securities at the dates indicated (in thousands):
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 1.85 years andthe estimated weighted average life of the portfolio was 5.6 yearsas of December 31, 2024. Approximately 69% of the securities portfolio is floating rate.
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 1.73 years andthe estimated weighted average life of the portfolio was 5.1 yearsas of December 31, 2025. Approximately 69% of the securities portfolio was floating rate at December 31, 2025.
Previous wording
The investment securities AFS portfolio was in a net unrealized loss position of $405.6 million at December 31, 2024, compared to a net unrealized loss position of $534.8 million at December 31, 2023, improving by $129.2 million during the year ended December 31, 2024. Net unrealized losses at December 31, 2024 included $8.4 million of gross unrealized gains and $414.0 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at December 31, 2024 had an aggregate fair value of $6.7 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 $267.1 million at December 31, 2025, an improvement of $138.5 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, and in some cases, tightening spreads. Net unrealized losses at December 31, 2025 included $26.7 million of gross unrealized gains and $293.9 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at December 31, 2025 had an aggregate fair value of $4.4 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 December 31, 2024. 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. At December 31, 2025, the Company did not have an intent to sell securities that were in significant unrealized loss positions, and it was not more likely than not that the Company would be required to sell these securities before recovery of the 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
The majority of our investment securities are classified within level 2 of the fair value hierarchy. U.S. Treasury securities and marketable equity securities are classified within level 1 of the hierarchy.
Current wording
The majority of our investment securities are classified within level 2 of the fair value hierarchy. U.S. Treasury securities and marketable equity securities are classified within level 1 of the hierarchy. For additional disclosure related to the fair values of investment securities, see Note 14 to the consolidated financial statements.
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, construction loans, SBA loans, mortgage warehouse lines of credit, municipal loans and leases and franchise and equipment finance loans and leases.
Previous wording
(2)CRE peer median information based on September 30, 2024 Call Report data for banks with total assets between $10 billion and $100 billion
Current wording
(1)Call Report data for banks with total assets between $10 billion and $100 billion
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 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 $116 million of rent regulated exposure as of December 31, 2024. The office portfolio outside of Florida and the New York tri-state area exhibits no particular geographic concentration.
Current wording
Included in New York tri-state multifamily loans in the tables above is approximately $106 million of rent regulated exposure as of December 31, 2025.
Previous wording
The following table presents information about CRE loans maturing in the next 12 months by property type at December 31, 2024 (dollars in thousands). Only 11% 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.
Current wording
The following table presents information about CRE loans maturing in the next 12 months by property type at December 31, 2025 (dollars in thousands). 17% of the total CRE portfolio, with a weighted average coupon rate of 4.36%, is fixed rate to the borrower and maturing in the next 12 months.
Previous wording
Non-performing loans included $77 million of office exposure, including office exposure of $32 million in the construction portfolio, at December 31, 2024. Also see the section entitled "Asset Quality" below.
Current wording
Non-performing CRE loans, excluding SBA loans, totaled $97 million at December 31, 2025 and included $78 million of office exposure, including $30 million in the construction portfolio. 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
Pinnacle provides essential-use equipment financing to state and local governmental entities on a national basis directly and through vendor programs and alliances, offering a full array of financing structures including equipment lease purchase agreements and direct (private placement) bond re-fundings and loan agreements.
Current wording
The Pinnacle portfolio consists of essential-use equipment financing to state and local governmental entities on a national basis directly and through vendor programs and alliances, with financing structures including equipment lease purchase agreements, direct (private placement) bond re-fundings and loan agreements.
Showing the first 40 of 78 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•The ratio of the ACL to total loans declined to 0.91% at December 31, 2025, from 0.92% at December 31, 2024. The ratio of the ACL to non-performing loans was 58.99%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.30% at December 31, 2025 and the ACL to loans ratio for CRE office loans was 2.03%. The provision for credit losses was $67.9 million for the year ended December 31, 2025, compared to $55.1 million for the year ended December 31, 2024.
Current report — wording carried from elsewhere
(1)Includes owner occupied real estate.
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 (6)
Previous report — wording carried elsewhere
◦Grow NIDDA as a percentage of total deposits
Previous report — wording carried elsewhere
◦The residential, franchise, equipment and municipal finance portfolios declined by a combined $959 million.
Previous report — wording carried elsewhere
For additional disclosure related to the fair values of investment securities, see Note 14 to the consolidated financial statements.
Previous report — wording carried elsewhere
At December 31, 2024, the majority of the 1-4 single family residential loan portfolio, excluding government insured residential loans, was owner-occupied, with 80% primary residence, 5% second homes and 15% investment properties.
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.
Previous report — wording carried elsewhere
(1)For purposes of this ratio, commercial loans includes the C&I and CRE sub-segments, as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio.