BankUnited, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 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.
Jun 30, 2026 · Filed Aug 6, 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 2026-03-31; filed 2026-05-07.
0001504008-26-000043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001504008-26-000079
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 213 previous paragraphs and 217 current paragraphs.
150 unchanged; 42 reworded; 24 added; 20 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 39 previous and 40 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
Executive Overview
Current report
Second quarter 2026 results compared to first quarter 2026:
Current report
•Net income was $70.7 million, or $0.97 per diluted share, up from $61.9 million, or $0.83, per diluted share.
Current report
•PPNR, a non-GAAP measure, increased by 3%, to $109.9 million from $106.3 million.
Current report
•Annualized ROAA increased to 0.81% from 0.72% and annualized ROAE improved to 9.3% from 8.1%.
Current report
•The net interest margin, calculated on a tax-equivalent basis, expanded to 3.06%, up 0.07%, from 2.99%.
Current report
•NIDDA increased by $991 million, or 11%, and represented 34% of total deposits; average NIDDA was up 7% or$564 million.
Current report
•Total loans declined by $206 million due to continued purposeful runoff in non-core loans. Average core loans increased by $195 million.
Current report
•Total criticized and classified loans increased by $7 million, or 1%, while non-performing loans declined by $51 million, or 19%. The NPA ratio improved to 0.66%, down 0.13%; the annualized net charge-off ratio was 0.11%, down 0.50%.
Current report
Our results for the second quarter of 2026 were driven primarily by continued balance sheet repositioning and improvements in funding mix. Growth in NIDDA and core deposits in general, together with lower brokered deposits and wholesale funding, contributed to lower funding costs and higher net interest margin. Profitability improved during the quarter, as reflected in increases in net income, pre-provision net revenue and returns on average assets and equity. Asset quality metrics also improved, including lower non-performing loan and net charge-off ratios, while capital and tangible book value metrics remained strong.
Current report
(2)Annualized.
Current report
(3) At fair value.
Current report
Net interest income on a taxable-equivalent basis was $259.2 million for the three months ended June 30, 2026, compared to $252.4 million for the three months ended March 31, 2026, an increase of $6.8 million, or 2.7%. The increase was driven by a $4.8 million increase in interest income and a $2.0 million decrease in interest expense.
Current report
•The net interest margin was positively impacted by the increase in average NIDDA as a percentage of both total deposits and total funding. Average NIDDA grew by $564.1 million for the three months ended June 30, 2026, while average interest bearing deposits declined by $329.1 million.
Current report
•The average cost of deposits declined to 2.05% for the three months ended June 30, 2026, from 2.12% for the three months ended March 31, 2026. The decrease reflected a reduction of wholesale funding and continued pricing discipline.
Current report
•The tax-equivalent yield on investments increased to 4.64% for the three months ended June 30, 2026, from 4.55% for the three months ended March 31, 2026, primarily due to the benefit of securities purchased during the period when spreads widened and there was market volatility.
Current report
Three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025
Current report
Net interest income, calculated on a tax-equivalent basis, increased by $10 million and $25 million for the three and six months ended June 30, 2026, respectively. The increase from the prior year for both periods is primarily due to continued improvement in funding mix. Strong growth in NIDDA supported reductions in higher-cost wholesale funding, including brokered deposits and FHLB advances, lowering overall funding costs and improving margin. These benefits were partially offset by lower yields on loans and investments and to a lesser extent lower average balances of interest-earning assets.
Current report
The net interest margin, calculated on a tax-equivalent basis, expanded to 3.06% and 3.03% for the three and six months ended June 30, 2026, respectively, from 2.93% and 2.87% for the three and six months ended June 30, 2025, respectively. The increase in the net interest margin for both periods was primarily a result of balance sheet repositioning and particularly an improved funding mix.
Current report
For the three and six months ended June 30, 2026 compared to same periods in the prior year, average NIDDA grew by $1.0 billion while average interest bearing liabilities declined by $1.1 billion. Deposit pricing continued to improve, contributing to lower funding costs. The average cost of deposits declined to 2.05% and 2.08% from 2.47% and 2.52% for the three and six months ended June 30, 2026 and 2025, respectively, reflecting the maturity of higher-rate time deposits, reductions in higher cost brokered deposits and the continued execution of targeted deposit repricing initiatives. Partially offsetting these improvements was a decrease in tax-equivalent yields on investment securities and loans as variable rate assets repriced faster than continued improvement in funding cost and funding mix dynamics due to lower SOFR/Fed funds basis.
Current report
The most significant factors impacting the provision for credit losses for the three months ended June 30, 2026 was an increase in specific reserves, changes in the economic forecast, lower net charge-offs and improved asset quality. The most significant factors impacting the provision for credit losses for the six months ended June 30, 2026 was higher net charge-offs and an increase in specific reserves.
Current report
(2) Annualized for the three months ended June 30, 2026, March 31, 2026, and December 31, 2025.
Current report
•The ACL for the residential and MWL segments increased by $2.1 million during the three months ended June 30, 2026, from 0.14% to 0.17% of loans, primarily a result of changes in the portfolio composition.
Current report
Non-interest bearing demand deposits increased by 11%, or $991 million during the three months ended June 30, 2026 and increased by $825 million, 9%, during the six months ended June 30, 2026. Total deposits decreased by $479 million during the three months ended June 30, 2026 and decreased by $472 million during the six months ended June 30, 2026, while non-brokered deposits increased by $1.1 billion during the three months ended June 30, 2026 and increased by $1.4 billion during the six months ended June 30, 2026.
Removed paragraphs (20)
Previous report
Overview
Previous report
Quarterly Highlights include:
Previous 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.
Previous report
•For the three months ended March 31, 2026, the annualized ROAA was 0.72% and annualized ROAE was 8.1%.
Previous 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.
Previous report
•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 report
•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 report
•The loan to deposit ratio declined to 82.3% at March 31, 2026, from 82.7% at December 31, 2025.
Previous report
•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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 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.
Previous 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.
Previous 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.
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 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").
Current wording
The following discussion and analysis is intended to focus on significant matters impacting and changes in the financial condition and results of operations of the Company during the three and six months ended June 30, 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
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” "future", "could", and similar expressions identify forward-looking statements. These forward-looking statements are based on the historical performance of the Company or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations so contemplated will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to, the risk factors described in Part I, Item 1A of the 2025 Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K. The Company does not undertake any obligation to publicly update or review any forward looking statement, whether as a result of new information, future developments or otherwise.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” "future", "could", and similar expressions identify forward-looking statements. These forward-looking statements are based on the historical performance of the Company or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations so contemplated will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as (1) an inability to successfully execute our core business strategy; (2) adverse events or conditions impacting the financial services industry, (3) our ability to access capital, including the impact of our credit rating; (4) credit risk inherent in the business of making loans and embedded in our securities portfolio, including inadequate allowance for credit losses and real estate market conditions and valuations; (5) interest rate risk, (6) liquidity risks, (7) risks related to the regulation of our industry, (8) operational risk, including dependence on information technology and third party service providers and the risk of systems failures, interruptions or breaches of security or inability to keep pace with technological change; (9) reputational risk, (10) the impact of conditions in the financial markets and economic conditions generally; (11) ineffective risk management or internal controls; and (12) the selection and application of accounting policies and methods and related assumptions and estimates. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to, the risk factors described in Part I, Item 1A of the 2025 Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K. The Company does not undertake any obligation to publicly update or review any forward looking statement, whether as a result of new information, future developments or otherwise.
Previous wording
•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 wording
•Total deposits, excluding brokered deposits, grew by $1 billion.
Previous wording
•Wholesale funding, including FHLB advances and brokered deposits, declined by $70 million for the three months ended March 31, 2026.
Current wording
•Wholesale funding, including FHLB advances and brokered deposits, declined by $1.4 billion reflecting continued balance sheet repositioning.
Previous wording
•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 wording
•The ratio of the ACL to total loans increased to 0.91% from 0.87%; the ratio of the ACL to non-performing loans increased to 97.14% from 75.90%; the provision for credit losses was down $9 million.
Previous wording
•At March 31, 2026, CET1 was 12.2%. The ratio of tangible common equity to tangible assets was 8.3%.
Current wording
•At June 30, 2026, CET1 was 12.3%; the ratio of tangible common equity to tangible assets was 8.4%.
Previous 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.
Current wording
•Book value and tangible book value per common share were, $41.55 and $40.48, respectively, at June 30, 2026, compared to $41.11 and $40.05, respectively, at March 31, 2026.
Previous wording
•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 wording
•The Company repurchased approximately 1.1 million shares of its common stock for an aggregate purchase price of $50.1 million.
Previous wording
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $2.7 million for the three months ended March 31, 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.
Current wording
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $5.4 million for the six months ended June 30, 2026 and 2025. The tax-equivalent adjustment for tax-exempt investment securities was $1.8 million and $1.4 million for the six months ended June 30, 2026 and 2025, respectively.
Previous 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:
Current wording
The net interest margin calculated on a tax-equivalent basis, increased to 3.06% for the three months ended June 30, 2026, compared to 2.99% for the immediately preceding three months ended March 31, 2026. Factors impacting the net interest margin for the three months ended June 30, 2026 compared to the three months ended March 31, 2026 included:
Previous 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.
Current wording
•The average rate paid on FHLB advances increased to 3.75% for the three months ended June 30, 2026 compared to 3.68% for the three months ended March 31, 2026 primarily due to the maturities of some cash flow hedges.
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, 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.
Current wording
The more significant items included in other non-interest income in the table above typically include commercial card revenue, lending related fees other than origination fees, and BOLI income. Non-interest income increased for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily as a result of higher deposit service charges and capital markets revenue. For the six months ended June 30, 2026, the increase was primarily due to higher deposit service charges and gains on investment securities, partially offset by decrease in lease financing revenue attributable to the continuing decline in the size of the operating lease equipment portfolio.
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. Employee compensation and benefits for the three months ended March 31, 2026 includes an additional $5.4 million compensation related expense.
Current wording
For the three months ended June 30, 2026, the increase in employee compensation and benefits was primarily attributable to increased head count as we invest in the growth of the franchise. In addition, in other non-interest expense were higher deposit related costs of $3.8 million, a loss associated with a single real estate owned asset disposition of $1.1 million and elevated operational losses of $1.3 million.
Previous 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.
Current wording
For the six months ended June 30, 2026, higher employee compensation and benefits was primarily due to routine salary increases and increased employee headcount. The decrease in deposit insurance expense was primarily attributable to a $6.7 million release of FDIC special assessment accrual during the six months ended June 30, 2026. A lower base assessment rate for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, also contributed to the decline in deposit insurance expense. In addition, included in other non-interest expense was $6.3 million in higher deposit related costs and higher operational losses of $1.1 million.
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 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.
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 six months ended June 30, 2026, NIDDA increased by $825 million from 31% to 34% of total deposits, while non-brokered deposits increased by $1.4 billion over the same period. Year-over-year, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, average NIDDA increased by $1.0 billion, consistent with continued progress in improving our funding profile. Wholesale funding, including FHLB advances, brokered deposits, and federal funds purchased, declined by $1.5 billion for the six months ended June 30, 2026.
Previous wording
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 wording
Total loans declined by $345 million for the six months ended June 30, 2026, primarily due to continued runoff of non-core loans. Core loans increased by $14 million while the residential and franchise and equipment finance portfolios declined by a combined $358 million, consistent with our balance sheet repositioning strategy. The loan-to-deposit ratio was 82.9% at June 30, 2026 compared to 82.7% at December 31, 2025. The securities portfolio grew by $54 million for the six months ended June 30, 2026.
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 1.93 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.
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 2.02 years andthe estimated weighted average life of the portfolio was 5.4 yearsas of June 30, 2026. Approximately 65% of the securities portfolio was floating rate at June 30, 2026.
Previous 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.
Current wording
The investment securities AFS portfolio was in a net unrealized loss position of $282.3 million at June 30, 2026, increasing by $15.2 million compared to a net unrealized loss position of $267.1 million at December 31, 2025. Net unrealized losses at June 30, 2026 included $22.1 million of gross unrealized gains and $304.4 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at June 30, 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
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.
Current wording
Included in New York tri-state multifamily loans in the tables above is approximately $99 million of rent regulated exposure as of June 30, 2026.
Previous 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.
Current wording
The following table presents information about CRE loans maturing in the next 12 months by property type at June 30, 2026 (dollars in thousands). 13% of the total CRE portfolio, with a weighted average coupon rate of 4.29%, is fixed rate to the borrower and maturing in the next 12 months.
Previous wording
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 wording
The office segment totaled $1.4 billion at June 30, 2026. Medical office comprised approximately $343 million or 25% of the total office portfolio.
Previous 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.
Current wording
Non-performing CRE loans, excluding SBA loans, totaled $30 million at June 30, 2026 and were entirely comprised of office exposure. Also see the section entitled "Asset Quality" below.
Previous 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.
Current wording
NDFI exposure totaled $1.3 billion, or 5% of total loans, at June 30, 2026. The "Other" category in the chart above includes primarily REITs, B2C, private equity funds, insurance carriers and investment services. The substantial majority of the NDFI portfolio is pass rated, with two loans totaling $25 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 $851 million at March 31, 2026.
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 $814 million at June 30, 2026.
Previous 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.
Current wording
Operating lease equipment, net totaled $157 million and $171 million at June 30, 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
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 wording
Total criticized and classified loans decreased by $139 million for the six months ended June 30, 2026, while total criticized and classified CRE loans declined by $184 million for the same period. Non-accrual loans declined by $149 million, or 40%, for the six months ended June 30, 2026.
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 $197 million and $159 million at March 31, 2026 and December 31, 2025, 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 $175 million, $197 million and $159 million at June 30, 2026, March 31, 2026 and December 31, 2025, respectively.
Previous wording
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 wording
As depicted in the chart above, the most significant factors impacting the ACL for the three months ended June 30, 2026, were increases in specific reserves and impact of the changes in the economic forecast, partially offset by net charge-offs and changes in the portfolio composition and borrower financial performance. The ACL was also impacted, although to a lesser extent, by risk rating migration and a decrease in certain qualitative factors.
Previous 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:
Current wording
At June 30, 2026, the ratio of the ACL to loans was 0.91%, compared to 0.87% at March 31, 2026. The commercial ACL ratio, inclusive of C&I, CRE, and franchise and equipment finance was 1.30% at June 30, 2026 compared to 1.25% at March 31, 2026. The ACL to loans ratio for CRE office loans was 1.98% at June 30, 2026 compared to 1.69% at March 31, 2026. Further discussion of changes in the ACL for select portfolio sub-segments follows:
Previous wording
•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 wording
•The ACL for the CRE portfolio sub-segment increased by $2.9 million during the three months ended June 30, 2026, from 0.81% to 0.84% of loans, primarily a result of changes in the economic forecast and increases in specific reserves, partially offset by net charge-offs.
Previous 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.
Current wording
•The ACL for the commercial and industrial sub-segment increased by $3.7 million during the three months ended June 30, 2026, from 1.60% to 1.68% of loans, primarily a result of increases in specific reserves, partially offset by net charge-offs and improvements in borrower financials.
Previous wording
•Labor market assumptions, which reflected national unemployment peaking at 4.5% and
Current wording
•Labor market assumptions, which reflected national unemployment peaking at 4.6% and
Previous wording
•Annualized growth in national GDP averaging 2.8%.
Current wording
•Annualized growth in national GDP averaging 2.1%.
Previous 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.
Current wording
The Company has a diverse deposit book. At June 30, 2026, our largest industry vertical was title insurance with approximately $4.9 billion in total deposits. Deposits in the HOA vertical totaled $2.4 billion at June 30, 2026. Approximately 75% of our deposits were commercial or municipal deposits at June 30, 2026.
Previous 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.
Current wording
Brokered deposits totaled $3.0 billion and $4.9 billion at June 30, 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 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.
Current wording
At June 30, 2026, the ratio of estimated insured and collateralized deposits to total deposits was 51% and the ratio of available liquidity to estimated uninsured, uncollateralized deposits was 119%. 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
Our ALM policy establishes limits or operating risk thresholds for a number of measures of liquidity which are monitored at least monthly by the ALCO and quarterly by the Board of Directors. Some of the measures currently used to dimension liquidity risk and manage liquidity are a wholesale funding ratio, the ratio of available liquidity to uninsured/non-collateralized deposits, the ratio of available operational liquidity (which excludes availability at the FRB) to volatile liabilities, a liquidity stress test coverage ratio, the loan to deposit ratio, a one-year liquidity ratio, a measure of available on-balance sheet liquidity, the ratio of brokered deposits to total deposits and large depositor concentrations. We also have single depositor relationship limits. Our liquidity management framework incorporates a robust contingency funding plan and liquidity stress testing framework.
Current wording
Our ALM policy establishes limits or operating risk thresholds for a number of measures of liquidity which are monitored at least monthly by the ALCO and quarterly by the Board of Directors. Some of the measures currently used to dimension liquidity risk and manage liquidity are a wholesale funding ratio, the ratio of available liquidity to uninsured/non-collateralized deposits, the ratio of available operational liquidity (which excludes availability at the FRB) to volatile liabilities, a liquidity stress test coverage ratio, the loan to deposit ratio, a one-year liquidity ratio, a measure of available on-balance sheet liquidity, and large depositor concentrations. We also have single depositor relationship limits. Our liquidity management framework incorporates a robust contingency funding plan and liquidity stress testing framework.
Previous 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;
Current wording
•Prepayment speeds for loans, with CPRs ranging from 7.31% to 15.80% depending on loan characteristics and the magnitude of the modeled rate shock;
Previous 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;
Current wording
•Prepayment speeds for investment securities, with CPRs ranging from 3.67% to 11.88% depending on individual security collateral and characteristics and the magnitude of the modeled rate shock;
Previous wording
•Deposit decay rates ranging between 9.73% and 13.7%, depending on the magnitude of the modeled rate shock; and
Current wording
•Deposit decay rates ranging between 9.62% and 13.4%, 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 (1)
Current report — wording carried from elsewhere
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $2.8 million for the three months ended June 30, 2026, and $2.7 million for both the three months ended March 31, 2026 and June 30, 2025. The tax-equivalent adjustment for tax-exempt investment securities was $1.1 million for the three months ended June 30, 2026, and $0.7 million for both the three months ended March 31, 2026 and June 30, 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Three months ended March 31, 2026 compared to the three months ended March 31, 2025