BankUnited, Inc.

Note 1 Basis of Presentation and Summary of Significant Accounting Policies

BankUnited, Inc. is a bank holding company with one wholly-owned subsidiary, BankUnited, collectively, the Company. BankUnited, a national banking association headquartered in Miami Lakes, Florida, provides a full range of commercial lending and both commercial and consumer deposit services through banking centers located in the state of Florida, the New York metropolitan area and Dallas. The Bank offers a full suite of commercial lending and deposit products through regional commercial banking offices in Atlanta, Charlotte and Morristown, New Jersey, and certain commercial lending and deposit products through national platforms.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, these financial statements do not include all of the information and footnotes required for a fair presentation of financial position, results of operations and cash flows in conformity with GAAP and should be read in conjunction with the Company’s consolidated financial statements and the notes thereto appearing in BKU’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected in future periods.

The Company has a single operating segment and thus a single reportable segment. The Company’s CEO is the CODM. While the CODM monitors the revenue streams and deposit and loan balances of its lines of business, the business lines serve a similar base of primarily commercial clients and provide a comparable range of products and services, all managed through similar processes and platforms. The CODM regularly assesses the performance of its single operating and reporting segment and decides how to allocate resources based on net income as reported in the Company’s consolidated statements of income. The CODM reviews expense information at the same level of detail as that disclosed in the Company's consolidated financial statements.

Accounting Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and disclosures of contingent assets and liabilities. Actual results could differ significantly from these estimates.

The most significant estimate impacting the Company's consolidated financial statements is the ACL.

Reclassifications

Certain amounts presented for prior periods have been reclassified to conform to the current period presented.

Accounting Pronouncements Not Yet Adopted

ASU No. 2024-03—Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires additional disclosure in interim and annual periods about specific expense categories in the notes to the financial statements. This ASU is effective for the Company for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The adoption of this ASU is not expected to have an impact on the Company's consolidated financial position, results of operations or cash flows but may lead to additional disclosures about expenses in the Notes to the Consolidated Financial Statements.

ASU No. 2025-06—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU eliminates the prior stage-based model for capitalization of internal-use software costs and replaces it with a principles-based approach that requires capitalization once management has approved and committed funding for a project and it is probable the project will be completed and the software will function as intended. The ASU is effective for the Company for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating early adoption of the ASU effective January 1, 2027, using the prospective transition method, and is currently evaluating the impact of adoption on its Consolidated Financial Statements.

ASU 2025‑08 –Financial Instruments—Credit Losses (Topic 326): Purchased Loans. The ASU amends the accounting for certain acquired loans by expanding the CECL gross‑up approach—previously applicable only to PCD loans—to a newly defined class of purchased seasoned loans ("PSL"). PSLs generally include non‑PCD loans acquired in a business combination or those meeting defined seasoning criteria. Under the amended guidance, the Company will recognize the initial allowance for credit losses on PSLs as an adjustment to the loan's amortized cost basis rather than recording a Day 1 provision expense. The ASU is effective for the Company for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, and will be applied prospectively; early adoption is permitted. The Company is currently evaluating the impact of this guidance on its Consolidated Financial Statements.

ASU 2025‑12 –Codification Improvements. The ASU includes amendments to ASC 505 that clarify the permissible methods for accounting for share retirements. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating early adoption of the ASC 505 amendments and the related impact on its Consolidated Financial Statements.

Note 2 Earnings Per Common Share

The computation of basic and diluted earnings per common share is presented below for the periods indicated (in thousands, except share and per share data):

Unvested shares of 425,663 and 365,380 for the three months ended September 30, 2026 and 2025, respectively, and unvested shares of 428,529 and 313,350 for the nine months ended September 30, 2026 and 2025, respectively, were excluded from the calculation of diluted earnings per common share because their inclusion would have been anti-dilutive.

Note 3 Investment Securities

Investment securities include investment securities available for sale and marketable equity securities. The investment securities portfolio consisted of the following at the dates indicated (in thousands):

Accrued interest receivable on investments totaled $29 million and $30 million at September 30, 2026 and December 31, 2025, respectively, and is included in other assets in the accompanying consolidated balance sheets.

At September 30, 2026, contractual maturities of investment securities available for sale, adjusted for anticipated prepayments when applicable, were as follows (in thousands):

The carrying value of securities pledged as collateral for FHLB advances, public deposits, interest rate swaps and to secure borrowing capacity at the FHLB and FRB totaled $5.5 billion and $8.0 billion at September 30, 2026 and December 31, 2025, respectively.

The following table provides information about gains (losses) on investment securities for the periods indicated (in thousands):

The following tables present the aggregate fair value and the aggregate amount by which amortized cost exceeded fair value for investment securities available for sale in unrealized loss positions aggregated by investment category and length of time that individual securities had been in continuous unrealized loss positions at the dates indicated (in thousands):

The Company monitors its investment securities available for sale for credit loss impairment on an individual security basis. No securities were determined to be credit loss impaired during the three and nine months ended September 30, 2026 and 2025. At September 30, 2026, 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. In making this determination, the Company considered its current and projected liquidity position including its ability to pledge securities to generate liquidity, its investment policy as to permissible holdings and concentration limits, regulatory requirements and other relevant factors.

At September 30, 2026,462 securities available for sale were in unrealized loss positions. The amount of unrealized losses related to 109 of these securities was considered insignificant both individually and in the aggregate, totaling approximately $0.9 million. No further analysis with respect to these securities was considered necessary. The basis for concluding the remaining AFS securities were not credit loss impaired and no ACL was considered necessary at September 30, 2026, is further discussed below.

Unrealized losses were primarily attributable to a sustained higher interest rate environment and in some cases, wider spreads compared to levels at which securities were purchased. The investment securities AFS portfolio was in a net unrealized loss position of $453.1 million at September 30, 2026, compared to $267.1 million at December 31, 2025, increasing by $186 million during the nine months ended September 30, 2026. While the majority of securities in the portfolio were floating rate at September 30, 2026, fixed rate securities accounted for the majority of unrealized losses.

U.S. Government, U.S. Government Agency and Government Sponsored Enterprise Securities

At September 30, 2026,15 U.S. treasury,106 U.S. Government agency and sponsored enterprise residential MBS,35 U.S. Government agency and sponsored enterprise commercial MBS and 12 SBA securities were in unrealized loss positions. The timely payment of principal and interest on these securities is explicitly or implicitly guaranteed by the U.S. Government. As such, there is an assumption of zero credit loss, and the Company expects to recover the amortized cost basis of these securities.

Private Label Securities

None of the impaired private label securities had missed principal or interest payments or had been downgraded by a NRSRO at September 30, 2026. The Company performed an analysis comparing the present value of cash flows expected to be collected to the amortized cost basis of impaired securities. This analysis was based on a scenario that we believe to be generally more conservative than our reasonable and supportable economic forecast at September 30, 2026, and incorporated assumptions about voluntary prepayment rates, collateral defaults, delinquencies, severity and other relevant factors as described further below. Our analysis also considered the structural characteristics of each security and the level of credit enhancement provided by that structure.

Private label residential MBS and CMOs

At September 30, 2026,147 private label residential MBS and CMOs were in unrealized loss positions. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, voluntary prepayment rates, loss severity, delinquencies and recovery lag. In developing those assumptions, we took into account collateral quality measures such as FICO, LTV, documentation, loan type, property type, agency availability criteria and performing status. We also regularly monitor sector data including home price appreciation, forbearance, delinquency, special servicing and prepay trends as well as other economic data that could be indicative of stress in the sector. Underlying delinquencies in this sector remain low. Our September 30, 2026 analysis projected weighted average collateral losses for impaired securities in this category of 3.3% compared to weighted average credit support of 18.9%. As of September 30, 2026, 86% of impaired securities in this category, based on carrying value, were externally rated AAA,2% were rated AA,10% were rated A and 2% were not externally rated.

Private label commercial MBS

At September 30, 2026,19 private label commercial MBS were in unrealized loss positions. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, voluntary prepayment rates, loss severity, delinquencies and recovery lag. In developing those assumptions, we took into account collateral quality and type, loan size, loan purpose and other qualitative factors. We also regularly monitor collateral concentrations, collateral watch lists, bankruptcy data, defeasance data, special servicing trends, delinquency and other economic data that could be indicative of stress in the sector. We consider collateral, deal, sector and tranche level performance as well as maturity and refinance risk. While we have observed some deterioration in collateral performance in this segment, particularly in the office sector, the high credit quality of these securities and adequacy of subordination to cover projected collateral losses supports the conclusion that there is no credit loss impairment. Our September 30, 2026 analysis projected weighted average collateral losses for impaired securities in this category of 8.3% compared to weighted average credit support of 38.4%. As of September 30, 2026,80% of impaired securities in this category, based on carrying value, were externally rated AAA,2% were rated AA and 18% were rated A. There was no single-asset, single-borrower exposure.

Single family real estate-backed securities

At September 30, 2026, no single family real estate-backed securities were in unrealized loss positions. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, loss severity, delinquencies and recovery lag. We regularly monitor sector data including home price appreciation, forbearance, delinquency and prepay trends as well as other economic data that could be indicative of stress in the sector. We consider collateral, deal, sector and tranche level performance as well as maturity and refinance risk.

Collateralized loan obligations

At September 30, 2026, seven collateralized loan obligations were in unrealized loss positions. Unrealized losses totaled less than 1% of total amortized cost of this segment at September 30, 2026. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, loss severity, and delinquencies, calibrated to take into account idiosyncratic risks associated with the underlying collateral. In developing those assumptions, we took into account each sector’s performance pre-, during and post the 2008 financial crisis. We regularly engage with bond managers to monitor trends in underlying collateral including potential downgrades and subsequent cash flow diversions, liquidity, ratings migration, and any other relevant developments. The high credit quality of these securities and adequacy of subordination to cover projected collateral losses supports the conclusion that there is no credit loss impairment. Our September 30, 2026 analysis projected weighted average collateral losses for impaired securities in this category of 14.6% compared to weighted average credit support of 41%. As of September 30, 2026,84% of the impaired securities in this category, based on carrying value, were externally rated AAA, and 16% were rated AA.

Non-mortgage asset-backed securities

At September 30, 2026, three non-mortgage asset-backed securities were in unrealized loss positions. These securities are backed by student loan collateral. Our analysis of cash flows expected to be collected on these securities incorporated assumptions about collateral default rates, loss severity, delinquencies, voluntary prepayment rates and recovery lag. In developing assumptions, we took into account collateral type, delineated by whether collateral consisted of loans to borrowers in school, refinancing, or a mixture. Our September 30, 2026 analysis projected weighted average collateral losses for impaired securities in this category of 3.3% compared to weighted average credit support of 40.2%. As of September 30, 2026,19% of the impaired securities in this category, based on carrying value, were externally rated AAA, and 81% were rated AA.

State and Municipal Obligations

At September 30, 2026, nine state and municipal obligations were in unrealized loss positions. Our analysis of potential credit loss impairment for these securities incorporates a comprehensive analysis and quantitative score of the underlying obligor's credit worthiness provided by a third-party vendor as well as other relevant qualitative considerations. As of September 30, 2026,7% of the impaired securities in this category, based on carrying value, were externally rated AAA,88% were rated AA, and 5% were rated A.

Note 4 Loans and Allowance for Credit Losses

Loans consisted of the following at the dates indicated (dollars in thousands):

Premiums, discounts and deferred fees and costs, excluding the non-credit related discount on PCD loans, totaled $21 million and $22 million at September 30, 2026 and December 31, 2025, respectively. The amortized cost of PCD loans totaled $28 million and $32 million at September 30, 2026 and December 31, 2025, respectively.

Included in loans, net are direct or sales type finance leases totaling $379 million and $381 million at September 30, 2026 and December 31, 2025, respectively. The amount of income recognized from direct or sales type finance leases for the three and nine months ended September 30, 2026 and 2025 totaled $2.9 million, $7.7 million, $3.2 million and $8.9 million, respectively, and is included in interest income on loans in the consolidated statements of income.

During the three and nine months ended September 30, 2026 and 2025, the Company purchased residential loans totaling $167 million, $306 million, $62 million, and $247 million, respectively.

At September 30, 2026 and December 31, 2025, the Company had pledged loans with a carrying value of approximately $15.8 billion and $15.6 billion, respectively, as security for FHLB advances and FHLB and Federal Reserve discount window capacity.

Accrued interest receivable on loans totaled $110 million and $113 million at September 30, 2026 and December 31, 2025, respectively, and is included inother assets in the accompanying consolidated balance sheets. The amount of interest income reversed on non-accrual loans was not material for the three and nine months ended September 30, 2026 and 2025.

Allowance for credit losses

Activity in the ACL is summarized below for the periods indicated (in thousands):

The ACL was determined utilizing a 2-year reasonable and supportable forecast period. The quantitative portion of the ACL was determined by weighting three third-party provided economic scenarios.

The ACL was 0.93% of total loans at September 30, 2026 compared to 0.91% at December 31, 2025. The most significant factors impacting the ACL for the nine months ended September 30, 2026 were higher specific reserves and net charge-offs. The ACL was also impacted, although to a lesser extent, by increases related to (i) a net increase in certain qualitative factors, (ii) risk rating migration, (iii) changes in the economic forecast, and decreases related to (iv) changes in portfolio composition, (v) improvements in borrower financial performance, and (vi) routine modeling and assumption updates.

The following table presents gross charge-offs during the nine months ended September 30, 2026 by year of origination (in thousands):

The following table presents the components of the provision for credit losses for the periods indicated (in thousands):

Credit quality information

Credit quality of loans held for investment is continuously monitored by dedicated commercial portfolio management and residential credit risk management functions. The Company also has a workout and recovery department that monitors the credit quality of criticized and classified loans and an independent internal credit review function.

Credit quality indicators for commercial loans

Factors that impact risk inherent in commercial portfolio segments include but are not limited to levels of economic activity or potential disruptions in economic activity, health of the national, regional and to a lesser extent global economies, interest rates, industry trends, demographic trends, inflationary trends, including particularly for commercial real estate loans the cost of insurance, patterns of and trends in customer behavior that influence demand for our borrowers' products and services, and commercial real estate values and related market dynamics. Particularly for the office sector, the evolving impact of hybrid and remote work on vacancies and valuations is a factor. Internal risk ratings are considered the most meaningful indicator of credit quality for commercial loans. Internal risk ratings are one indicator of the likelihood that a borrower will default, are a key factor influencing the level and nature of ongoing monitoring of loans and may impact the estimation of the ACL. Internal risk ratings are updated on a continuous basis. Generally, relationships with balances greater than $3 million are re-evaluated at least annually and more frequently if circumstances indicate that a change in risk rating may be warranted. The special mention rating is considered a transitional rating for loans exhibiting potential credit weaknesses that could result in deterioration of repayment prospects at some future date if not checked or corrected and that deserve management’s close attention. These borrowers may exhibit declining cash flows or revenues or increasing leverage. Loans with well-defined credit weaknesses that may result in a loss if the deficiencies are not corrected are assigned a risk rating of substandard. These borrowers may exhibit payment defaults, inadequate cash flows from current operations, operating losses, increasing balance sheet leverage, project cost overruns, unreasonable construction delays, exhausted interest reserves, declining collateral values, frequent overdrafts or past due real estate taxes. Loans with weaknesses so severe that collection in full is highly questionable or improbable, but because of certain reasonably specific pending factors have not been charged off, are assigned an internal risk rating of doubtful.

Commercial credit exposure based on internal risk rating (in thousands):

At September 30, 2026 and December 31, 2025, the balance of revolving loans converted to term loans was immaterial.

The following table presents criticized and classified commercial loans in aggregate by risk rating category at the dates indicated (in thousands):

Credit quality indicators for residential loans

Management considers delinquency status to be the most meaningful indicator of the credit quality of residential loans, other than government insured residential loans. Delinquency status is updated at least monthly. LTV and FICO scores are also important indicators of credit quality for 1-4 single family residential loans other than government insured loans. FICO scores are generally updated semi-annually and were most recently updated in the first quarter of 2026. LTVs are typically at origination. Substantially all of the government insured residential loans are government insured Buyout Loans, which the Company buys out of GNMA securitizations upon default. For these loans, traditional measures of credit quality are not particularly relevant considering the guaranteed nature of the loans and the underlying business model. Factors that impact risk inherent in the residential portfolio segment include national and regional economic conditions such as levels of unemployment, wages and interest rates, as well as residential property values.

1-4 Single Family Residential credit exposure, excluding government insured residential loans, based on delinquency status (in thousands):

1-4 Single Family Residential credit exposure, excluding government insured residential loans, based on LTV (in thousands):

1-4 Single Family Residential credit exposure, excluding government insured residential loans, based on FICO score (in thousands):

Past Due and Non-Accrual Loans

The following table presents an aging of loans at the dates indicated (in thousands):

Included in the table above is the guaranteed portion of SBA loans past due by 90 days or more totaling $30 million ($24 million of C&I and $6 million of CRE) and $34 million at September 30, 2026 and December 31, 2025, respectively.

Loans contractually delinquent by 90 days or more and still accruing totaled $200 million and $159 million at September 30, 2026 and December 31, 2025, respectively, the vast majority of which were government insured residential loans. These loans are Buyout Loans, which the Company buys out of GNMA securitizations upon default.

The following table presents information about loans on non-accrual status at the dates indicated (in thousands):

Included in the table above is the guaranteed portion of non-accrual SBA loans totaling $31.5 million and $37.9 million at September 30, 2026 and December 31, 2025, respectively. The amount of interest income recognized on non-accrual loans was insignificant for the three and nine months ended September 30, 2026 and 2025. The amount of additional interest income that would have been recognized on non-accrual loans had they performed in accordance with their contractual terms was not material for the three and nine months ended September 30, 2026 and 2025.

Collateral dependent loans

The following table presents the amortized cost basis of collateral dependent loans at the dates indicated (in thousands):

Collateral for the CRE loan class generally consists of commercial real estate, or for certain construction loans, residential real estate. Collateral for C&I loans generally consists of equipment, accounts receivable, inventory and other business assets and for owner-occupied commercial real estate loans, may also include commercial real estate. Franchise and equipment finance loans may be collateralized by franchise value or by equipment. There were no significant changes to the nature of which collateral secured collateral dependent loans during the nine months ended September 30, 2026.

Foreclosure of residential real estate

The recorded investment in residential loans in the process of foreclosure was $112 million, of which $103 million was government insured at September 30, 2026, and $104 million, of which $96 million was government insured at December 31, 2025. The carrying amount of foreclosed residential real estate included in other assets in the accompanying consolidated balance sheet was insignificant at September 30, 2026 and December 31, 2025.

Loan Modifications

The following tables summarize loans that were modified for borrowers experiencing financial difficulty, by type of modification, during the periods indicated (dollars in thousands):

(1)Other modifications include loans that experienced a combination of Interest Rate Reduction, Term Extension and Other than Insignificant Payment Delays.

(1)Other modifications include loans that experienced a combination of Interest Rate Reduction, Term Extension and Other than Insignificant Payment Delays.

The following tables summarize the financial effect of the modifications made to borrowers experiencing difficulty, during the periods indicated:

The following tables present the aging at the dates indicated, of loans that were modified within the previous 12 months (in thousands):

The following tables summarize loans that were modified within the previous 12 months and defaulted during the periods indicated (in thousands):

Note 5 Income Taxes

The Company’s effective income tax rate was 25.5% and 25.0% for the three and nine months ended September 30, 2026 and 26.6% and 26.8% for the three and nine months ended September 30, 2025, respectively. The effective income tax rates differed from the statutory federal income tax rate of 21% for the three and nine months ended September 30, 2026 and 2025 primarily due to the impact of state income taxes.

Note 6 Derivative Financial Instruments

Derivatives designated as hedging instruments

The Company has entered into interest rate derivatives designated as cash flow hedges with the objective of limiting the variability of interest payment cash flows. Changes in fair value of derivative instruments designated as cash flow hedges are reported in accumulated other comprehensive income.

The Company also enters into interest rate derivatives designated as fair value hedges with the objective of managing exposure to changes in the fair value of certain fixed-rate financial liabilities attributable to changes in benchmark interest rates. Changes in the fair value of derivative instruments designated as fair value hedges and changes in the fair value of the hedged liabilities attributable to the designated hedged risk are recognized currently in earnings in the same income statement line item as the earnings effect of the hedged liabilities.

The following table summarizes the Company's derivatives designated as hedging instruments as of the dates indicated (in thousands):

(1)The fair values of derivatives are included in other assets or other liabilities in the consolidated balance sheets.

Cash Flow Hedges

The following table provides information about the amount of gain (loss) related to derivatives designated as cash flow hedges reclassified from AOCI into interest income or expense for the periods indicated (in thousands):

During the three and nine months ended September 30, 2026 and 2025, no derivative positions designated as cash flow hedges were discontinued and none of the gains and losses reported in AOCI were reclassified into earnings as a result of the discontinuance of cash flow hedges or because of the early extinguishment of debt.

As of September 30, 2026, the amount of net loss expected to be reclassified from AOCI into earnings during the next 12 months was $16.6 million, based on the forward curve. See Note 7 to the consolidated financial statements for additional information about the reclassification adjustments from AOCI into earnings.

Fair Value Hedges

During the third quarter of 2026, the Company entered into multiple receive-fixed, pay-variable interest rate swaps with an aggregate notional amount of $539 million and designated the swaps as fair value hedges of benchmark interest rate risk associated with certain fixed-rate brokered certificates of deposit. The swaps became effective during the third quarter of 2026 and mature in 2027.

The following table presents the effect of fair value hedge accounting on the consolidated statements of income for the period indicated (in thousands):

The following table presents the carrying amount of hedged liabilities and the cumulative amount of fair value hedge basis adjustments included in the carrying amount of such liabilities as of September 30, 2026 (in thousands):

Derivatives not designated as hedging instruments

The Company enters into interest rate derivative contracts with certain of its commercial borrowers to enable those borrowers to manage their exposure to interest rate fluctuations. To mitigate interest rate risk associated with these derivative contracts, the Company enters into offsetting derivative contract positions with primary dealers. In addition, the Company purchases and sells credit protection under RPAs with the objective of sharing with financial institution counterparties some of the credit exposure related to interest rate derivative contracts entered into with commercial borrowers related to participations purchased or sold. The Company will make or receive payments under these agreements if a customer defaults on an obligation to perform under certain interest rate derivative contracts. The Company also enters into foreign currency forward derivative contracts with commercial borrowers to enable borrowers to manage their exposure to foreign currency fluctuations. The Company enters into offsetting forward contracts with primary dealers to mitigate the foreign currency risk associated with these contracts.

These derivative contracts are not designated as hedging instruments; therefore, changes in the fair value of these derivatives are recognized in earnings. Fees recognized related to these derivative instruments were $4.6 million and $14.0 million for the three and nine months ended September 30, 2026, respectively, and $5.0 million and $11.9 million for the three and nine months ended September 30, 2025. These fees are included in "capital markets income" in the accompanying consolidated statements of income.

The Company may be exposed to credit risk in the event of non-performance by the counterparties to its commercial customer derivative agreements. The Company assesses the credit risk of its financial institution counterparties by monitoring publicly available credit rating and financial information. The Company manages dealer credit risk by entering into derivatives only with primary and highly rated counterparties, the use of ISDA master agreements, central clearing mechanisms and counterparty limits. The agreements contain bilateral collateral arrangements with the amount of collateral to be posted generally governed by the settlement value of outstanding swaps. The Company manages the risk of default by its commercial borrower counterparties through its normal loan underwriting and credit monitoring policies and procedures. The Company does not currently anticipate any significant losses from failure of derivative counterparties to honor their obligations.

The following table summarizes the Company's derivatives not designated as hedging instruments as of the dates indicated (in thousands):

(1)Fair values of these derivatives are included in other assets and other liabilities in the consolidated balance sheets. The notional amount and fair value of the foreign currency forward derivative contracts not designated as hedging instruments were not significant at September 30, 2026 and December 31, 2025.

Some of the Company’s ISDA master agreements with financial institution counterparties contain provisions that permit either counterparty to terminate the agreements and require settlement in the event that regulatory capital ratios fall below certain designated thresholds, upon the initiation of other defined regulatory actions or upon suspension or withdrawal of the Bank’s credit rating. Currently, there are no circumstances that would trigger these provisions of the agreements.

Master netting agreements

The Company does not offset assets and liabilities under master netting agreements for financial reporting purposes. Information on interest rate derivative instruments subject to these agreements is as follows at the dates indicated (in thousands):

The difference between the amounts reported for interest rate swaps subject to master netting agreements and the total fair value of interest rate contract derivative financial instruments reported in the consolidated balance sheets is related to interest rate derivative contracts not subject to master netting agreements.

Note 7 Stockholders’ Equity

Accumulated Other Comprehensive Income

Changes in other comprehensive income are summarized as follows for the periods indicated (in thousands):

The categories of AOCI and changes therein are presented below for the periods indicated (in thousands):

Note 8 Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis

The following is a description of the methodologies used to estimate the fair values of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which those measurements are typically classified.

Investment securities available for sale and marketable equity securities—Fair value measurements are based on quoted prices in active markets when available; these measurements are classified within level 1 of the fair value hierarchy. These securities typically include U.S. Treasury securities and certain preferred stocks. If quoted prices in active markets are not available, fair values are estimated using quoted prices of securities with similar characteristics, quoted prices of identical securities in less active markets, discounted cash flow techniques, or matrix pricing models. These securities are generally classified within level 2 of the fair value hierarchy and typically include all categories of investment securities not classified within level 1 of the hierarchy. Pricing of these securities is generally primarily spread driven. Observable inputs that may impact the valuation of these securities include benchmark yield curves, credit spreads, reported trades, dealer quotes, bids, issuer spreads, current rating, historical constant prepayment rates, historical voluntary prepayment rates, structural and waterfall features of individual securities, published collateral data, and for certain securities, historical constant default rates and default severities.

The Company uses third-party pricing services in determining fair value measurements for investment securities. To obtain an understanding of the methodologies and assumptions used, management reviews written documentation provided by the pricing services, conducts interviews with valuation desk personnel and reviews model results and detailed assumptions used to value selected securities as considered necessary. Management has established a robust price challenge process that includes a review by the treasury front office of all prices provided on a quarterly basis. Any price evidencing significant unexpected quarter-over-quarter fluctuations or deviations from expectations is challenged. The Company has also established a quarterly process whereby prices provided by its primary pricing service are validated by obtaining a price from a second external source for most securities in the portfolio. If considered necessary to resolve any discrepancies, a price will be obtained from an additional independent valuation source. The Company does not typically adjust the prices provided, other than through this established challenge process. The results of price challenges are subject to review by executive management. Any price discrepancies are resolved based on careful consideration of the assumptions and inputs employed by each of the pricing sources.

Derivative financial instruments—Fair values of interest rate derivatives are determined using widely accepted discounted cash flow modeling techniques. These discounted cash flow models use projections of future cash payments and receipts that are discounted at mid-market rates. Observable inputs that may impact the valuation of these instruments include benchmark swap rates and benchmark forward yield curves. These fair value measurements are generally classified within level 2 of the fair value hierarchy.

The following tables present assets and liabilities measured at fair value on a recurring basis at the dates indicated (in thousands):

Assets and liabilities measured at fair value on a non-recurring basis

The following is a description of the methodologies used to estimate the fair values of assets and liabilities that may be measured at fair value on a non-recurring basis, and the level within the fair value hierarchy in which those measurements are typically classified:

Collateral dependent loans and OREO—The carrying amount of collateral dependent loans is typically based on the fair value of the underlying collateral, which may be real estate, enterprise value or other business assets, less estimated costs to sell when repayment is expected to come from the sale of the collateral. The carrying value of OREO is initially measured based on the fair value of the real estate acquired in foreclosure and subsequently adjusted to the lower of cost or estimated fair value, less estimated cost to sell. Fair values of real estate collateral and OREO are typically based on third-party real estate appraisals which utilize market and income approaches to valuation incorporating both observable and unobservable inputs.

Fair value measurements related to collateral dependent loans and OREO are generally classified within level 3 of the fair value hierarchy.

The following table presents the net carrying value of assets classified within level 3 of the fair value hierarchy at the dates indicated, for which non-recurring changes in fair value were recorded during the period then ended (in thousands):

The following table presents the carrying value and fair value of financial instruments and the level within the fair value hierarchy in which those measurements are classified at the dates indicated (dollars in thousands):

Note 9 Commitments and Contingencies

The Company issues off-balance sheet financial instruments to meet the financing needs of its customers. These financial instruments include commitments to fund loans, unfunded commitments under existing lines of credit, and commercial and standby letters of credit. These commitments expose the Company to varying degrees of credit and market risk which are essentially the same as those involved in extending loans to customers, and are subject to the same credit policies used in underwriting loans. Collateral may be obtained based on the Company’s credit evaluation of the counterparty. The Company’s maximum exposure to credit loss is represented by the contractual amount of these commitments.

Commitments to fund loans

These are agreements to lend funds to customers as long as there is no violation of any condition established in the contract. Commitments to fund loans generally have fixed expiration dates or other termination clauses and may require payment of a fee. Many of these commitments are expected to expire without being funded and, therefore, the total commitment amounts do not necessarily represent future liquidity requirements.

Unfunded commitments under lines of credit

Unfunded commitments under lines of credit include commercial and commercial real estate lines of credit to existing customers, for many of which additional extensions of credit are subject to borrowing base requirements. Some of these commitments may mature without being fully funded, some may not necessarily represent future liquidity requirements.

Commercial and standby letters of credit

Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These letters of credit are primarily issued to support trade transactions or guarantee arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

Total lending related commitments outstanding at September 30, 2026 were as follows (in thousands):

Legal Proceedings

The Company is involved in various legal actions arising in the normal course of business. In the opinion of management, based upon advice of legal counsel, the likelihood is remote that the adverse impact of these proceedings, either individually or in the aggregate, would be material to the Company’s consolidated financial position, results of operations or cash flows.

Note 10 Deposits

The following table presents average balances and weighted average rates paid on deposits for the periods indicated (dollars in thousands):

(1)Annualized.

Time deposit accounts with balances greater than $250,000 totaled $695 million and $774 million at September 30, 2026 and December 31, 2025, respectively.

The following table presents maturities of time deposits as of September 30, 2026 (in thousands):

Included in deposits are public funds deposits of $2.2 billion and $3.2 billion, at September 30, 2026 and December 31, 2025, respectively, and brokered deposits of $4.1 billion and $4.9 billion at September 30, 2026 and December 31, 2025, respectively. Certain public funds deposits are collateralized by a standby letter of credit issued by the FHLB of Atlanta under the State of Florida Public Deposits Program.

Interest expense on deposits for the periods indicated was as follows (in thousands):

Beginning in the third quarter of 2026, we present certain non-interest expenses associated with obtaining, retaining and supporting some of our industry vertical commercial relationships within a separate income statement caption, "Deposit-related costs." Deposit-related costs include deposit rebate and commission programs and other costs associated with deposit sourcing and customer acquisition activities.

Deposit rebate and commission programs represent a component of Deposit-related costs and have historically been disclosed within this note. Expenses associated with such programs that were correlated with the balance in the related deposit accounts totaled $16.1 million and $43.6 million during the three and nine months ended September 30, 2026, respectively, compared to $15.3 million and $43.0 million during the three and nine months ended September 30, 2025, respectively.