BankUnited : Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

About this update from Bankunited, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations 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"). Forward-Looking Statements 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. Overview Quarterly Highlights In evaluating our financial performance, we consider (i) the funding mix and the composition of interest earning assets; (ii) the level of and trends in net interest income and the net interest margin; (iii) the cost of deposits, trends in non-interest income and non-interest expense; (iv) performance ratios such as the return on average equity and return on average assets and trends in those metrics; and (v) asset quality metrics, including the level of criticized and classified assets, the ratios of non-performing loans to total loans and non-performing assets to total assets, delinquency and net charge-off rates, as well as trends in those metrics. We analyze these ratios and trends against our own historical performance, our expected performance, our risk appetite and the financial condition and performance of comparable financial institutions. Quarterly Highlights include: • 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. • For the three months ended March 31, 2026, the annualized ROAA was 0.72% and annualized ROAE was 8.1%. • 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. • 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. • 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. • Wholesale funding, including FHLB advances and brokered deposits, declined by $70 million for the three months ended March 31, 2026. • 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. • The loan to deposit ratio declined to 82.3% at March 31, 2026, from 82.7% at December 31, 2025. • 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%. • 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. • At March 31, 2026, CET1 was 12.2%. The ratio of tangible common equity to tangible assets was 8.3%. • 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. • 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. • 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. Results of Operations Net Interest Income Net interest income is the difference between interest earned on interest earning assets and interest incurred on interest bearing liabilities and is the primary driver of core earnings. Net interest income is impacted by the mix of interest earning assets and interest bearing liabilities, the ratio of interest earning assets to total assets and of interest bearing liabilities to total funding sources, movements in market interest rates and monetary policy, the shape of the yield curve, levels of non-performing assets and pricing pressure from competitors. The mix of interest earning assets is influenced by loan demand, market and competitive conditions in our primary lending markets, by management's continual assessment of the rate of return and relative risk associated with various classes of earning assets and liquidity considerations. The mix of funding sources is influenced by the Company's liquidity profile, management's assessment of the desire for lower-cost funding sources weighed against relationships with customers, our ability to attract and retain core deposit relationships, competition for deposits in the Company's markets and the availability and pricing of other sources of funds. The following table presents, for the periods indicated, information about (i) average balances, the total dollar amount of taxable equivalent interest income from earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin. Non-accrual loans are included in the average balances presented in this table; however, interest income foregone on non-accrual loans is not included. Interest income, yields, spread and margin have been calculated on a tax-equivalent basis for loans and investment securities that are exempt from federal income taxes, at a federal tax rate of 21% (dollars in thousands): Three Months Ended March 31, Three Months Ended December 31, Three Months Ended March 31, 2026 2025 2025 Average Balance Interest (1) Yield/ Rate (1)(2) Average Balance Interest (1) Yield/ Rate (1)(2) Average Balance Interest (1) Yield/ Rate (1)(2) Assets: Interest earning assets: Loans $ 23,835,417 $ 312,812 5.31 % $ 23,697,215 $ 320,252 5.37 % $ 23,933,938 $ 324,113 5.48 % Investment securities (3) 9,471,480 106,953 4.55 % 9,583,958 118,573 4.93 % 9,104,228 114,590 5.07 % Other interest earning assets 672,001 5,794 3.49 % 737,306 6,986 3.76 % 788,547 8,436 4.33 % Total interest earning assets 33,978,898 425,559 5.06 % 34,018,479 445,811 5.21 % 33,826,713 447,139 5.34 % Allowance for credit losses (218,808) (222,451) (228,158) Non-interest earning assets 1,328,791 1,389,731 1,376,904 Total assets $ 35,088,881 $ 35,185,759 $ 34,975,459 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 6,033,099 $ 43,294 2.91 % $ 6,072,259 $ 48,032 3.14 % $ 4,811,826 $ 39,893 3.36 % Savings and money market deposits 10,245,692 73,278 2.90 % 10,123,959 77,378 3.03 % 10,833,734 91,779 3.44 % Time deposits 3,751,256 32,122 3.48 % 3,449,304 30,465 3.50 % 4,326,750 42,538 3.99 % Total interest bearing deposits 20,030,047 148,694 3.01 % 19,645,522 155,875 3.15 % 19,972,310 174,210 3.54 % FHLB advances 2,193,944 19,897 3.68 % 2,486,250 24,065 3.84 % 2,991,389 27,206 3.69 % Notes and other borrowings 366,487 4,608 5.03 % 328,322 4,253 5.18 % 709,037 9,134 5.15 % Total interest bearing liabilities 22,590,478 173,199 3.11 % 22,460,094 184,193 3.26 % 23,672,736 210,550 3.61 % Non-interest bearing demand deposits 8,463,491 8,708,397 7,413,117 Other non-interest bearing liabilities 930,784 922,581 1,004,917 Total liabilities 31,984,753 32,091,072 32,090,770 Stockholders' equity 3,104,128 3,094,687 2,884,689 Total liabilities and stockholders' equity $ 35,088,881 $ 35,185,759 $ 34,975,459 Net interest income $ 252,360 $ 261,618 $ 236,589 Interest rate spread 1.95 % 1.95 % 1.73 % Net interest margin 2.99 % 3.06 % 2.81 % (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. (2) Annualized. (3) At fair value. Three months ended March 31, 2026 compared to the three months ended December 31, 2025 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. 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: • 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. • The tax-equivalent yield on loans decreased to 5.31% for the three months ended March 31, 2026, from 5.37% for the three months ended December 31, 2025, reflecting the impact of declining market rates on the predominantly floating-rate commercial loan portfolio. • 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. • The average rate paid on FHLB advances decreased to 3.68% for the three months ended March 31, 2026, from 3.84% for the three months ended December 31, 2025, driven by repayment of higher rate short-term advances, partially offset by the maturities of some cash flow hedges . Three months ended March 31, 2026 compared to the three months ended March 31, 2025 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. 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. 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. 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. Provision for Credit Losses The provision for credit losses is a charge or credit to earnings required to maintain the ACL at a level consistent with management's estimate of expected credit losses on financial assets carried at amortized cost at the balance sheet date. The amount of the provision is impacted by changes in current economic conditions as well as in management's reasonable and supportable economic forecast, loan originations and runoff, changes in portfolio mix, risk rating migration and portfolio seasoning, changes in specific reserves, changes in expected prepayment speeds and other assumptions. The provision for credit losses also includes amounts related to off-balance sheet credit exposures and may include amounts related to accrued interest receivable and AFS debt securities. The following table presents the components of the provision for credit losses for the periods indicated (in thousands): Three Months Ended March 31, 2026 2025 Amount related to funded portion of loans $ 25,103 $ 15,963 Amount related to off-balance sheet credit exposures (517) (852) Total provision for credit losses $ 24,586 $ 15,111 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. The provision for credit losses may be volatile and the level of the ACL may change materially from current levels. Future levels of the ACL could be significantly impacted, in either direction, by changes in factors such as, but not limited to, economic conditions or the economic outlook, the composition of the loan portfolio, the financial condition of our borrowers and collateral values. The determination of the amount of the ACL is complex and involves a high degree of judgment and subjectivity. See "Analysis of the Allowance for Credit Losses" below for more information about how we determine the appropriate level of the ACL and about factors that impacted the level of the ACL. Non-Interest Income The following table presents a comparison of the categories of non-interest income for the periods indicated (in thousands): Three Months Ended March 31, 2026 2025 Deposit service charges and fees $ 6,219 $ 5,235 Gain on investment securities, net 3,290 944 Lease financing 3,347 4,313 Capital markets income: Derivative income 2,657 3,229 Loan syndication fees 591 1,332 Foreign exchange fees 436 234 Total capital markets income 3,684 4,795 Other non-interest income 8,160 6,983 Total non-interest income $ 24,700 $ 22,270 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. Non-Interest Expense The following table presents components of non-interest expense for the periods indicated (in thousands): Three Months Ended March 31, 2026 2025 Employee compensation and benefits $ 96,689 $ 82,746 Occupancy and equipment 11,002 11,343 Deposit insurance expense (1,026) 7,227 Technology 22,415 22,780 Depreciation of operating lease equipment 3,366 4,009 Deposit related rebate and commission costs 13,229 13,162 Other non-interest expense 21,688 18,959 Total non-interest expense $ 167,363 $ 160,226 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. 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. Analysis of Financial Condition 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. 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. Investment Securities The following table shows the amortized cost and carrying value, which is fair value, of investment securities at the dates indicated (in thousands): March 31, 2026 December 31, 2025 Amortized Cost Carrying Value Amortized Cost Carrying Value U.S. Treasury securities $ 269,096 $ 259,998 $ 275,966 $ 268,653 U.S. Government agency and sponsored enterprise residential MBS 2,460,359 2,464,664 2,562,702 2,563,027 U.S. Government agency and sponsored enterprise commercial MBS 720,406 675,725 576,295 534,363 Private label residential MBS and CMOs 2,711,818 2,516,325 2,683,881 2,490,828 Private label commercial MBS 2,419,501 2,402,462 2,182,983 2,168,110 Single family real estate-backed securities 187,701 185,601 227,711 225,892 Collateralized loan obligations 773,102 771,825 780,847 780,944 Non-mortgage asset-backed securities 58,717 57,656 59,942 58,765 State and municipal obligations 114,766 108,717 115,193 109,520 SBA securities 58,142 56,570 59,526 57,815 $ 9,773,608 $ 9,499,543 $ 9,525,046 $ 9,257,917 Marketable equity securities 5,625 5,734 $ 9,505,168 $ 9,263,651 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. T he estimated effective duration of the investment portfolio was 1.93 years and the estimated weighted average life of the portfolio was 5.2 years as of March 31, 2026. Approximately 65% of the securities portfolio was floating rate at March 31, 2026. 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. The external ratings distribution of our AFS securities portfolio at the dates indicated is depicted in the charts below: March 31, 2026 December 31, 2025 We evaluate the credit quality of individual securities in the portfolio quarterly to determine whether we expect to recover the amortized cost basis of the investments in unrealized loss positions. This evaluation considers, but is not necessarily limited to, the following factors, the relative significance of which varies depending on the circumstances pertinent to each individual security: • Whether we intend to sell the security prior to recovery of its amortized cost basis; • Whether it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis; • The extent to which fair value is less than amortized cost; • Adverse conditions specifically related to the security, a sector, an industry or geographic area; • Changes in the financial condition of the issuer or underlying loan obligors; • The payment structure and remaining payment terms of the security, including levels of subordination or over-collateralization; • Failure of the issuer to make scheduled payments; • Changes in external credit ratings; • Relevant market data; and • Estimated prepayments, defaults, and the value and performance of underlying collateral at the individual security level. 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. We have not sold, and do not anticipate the need to sell, securities in unrealized loss positions to generate liquidity. At March 31, 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. The substantial majority of our investment securities are eligible to be pledged at either the FHLB or FRB. The majority of our investment securities are classified within level 2 of the fair value hierarchy. U.S. Treasury securities and marketable equity securities are classified within level 1 of the hierarchy. For additional disclosure related to the fair values of investment securities, see Note 8 to the consolidated financial statements. The following table shows the weighted average prospective yields based on current rates, categorized by scheduled maturity, for AFS investment securities as of March 31, 2026. Scheduled maturities have been adjusted for anticipated prepayments when applicable. Yields on tax-exempt securities have been calculated on a tax-equivalent basis, based on a federal income tax rate of 21%: Within One Year After One Year Through Five Years After Five Years Through Ten Years After Ten Years Total U.S. Treasury securities - % 2.50 % 4.06 % - % 3.53 % U.S. Government agency and sponsored enterprise residential MBS 4.74 % 4.69 % 4.68 % 4.72 % 4.70 % U.S. Government agency and sponsored enterprise commercial MBS 4.43 % 3.31 % 3.18 % 4.68 % 3.57 % Private label residential MBS and CMOs 4.33 % 4.45 % 3.63 % 3.88 % 4.10 % Private label commercial MBS 4.87 % 5.37 % 3.84 % 3.24 % 5.22 % Single family real estate-backed securities 1.36 % 3.95 % - % - % 3.94 % Collateralized loan obligations 5.43 % 5.42 % 5.48 % - % 5.44 % Non-mortgage asset-backed securities 3.10 % 4.51 % 2.60 % - % 4.38 % State and municipal obligations 6.04 % 4.40 % 4.34 % - % 5.08 % SBA securities 4.60 % 4.58 % 4.46 % 4.24 % 4.55 % 4.69 % 4.83 % 4.15 % 4.15 % 4.61 % Loans The following table shows the composition of the loan portfolio at the dates indicated (dollars in thousands): March 31, 2026 December 31, 2025 Amortized Cost Percent of Total Loans Amortized Cost Percent of Total Loans Non-owner occupied commercial real estate $ 6,146,307 25.5 % $ 6,105,207 25.2 % Construction and land 740,104 3.1 % 705,664 2.9 % Owner occupied commercial real estate 2,023,527 8.4 % 2,020,572 8.3 % Commercial and industrial 6,862,405 28.3 % 7,008,903 28.8 % Mortgage warehouse lending 805,037 3.3 % 728,241 3.0 % Total core loans 16,577,380 68.6 % 16,568,587 68.2 % Pinnacle - municipal finance 616,486 2.6 % 619,374 2.6 % Franchise and equipment finance 84,709 0.4 % 102,746 0.4 % Total commercial 17,278,575 71.6 % 17,290,707 71.2 % 1-4 single family residential 5,972,932 24.7 % 6,091,959 25.1 % Government insured residential 883,422 3.7 % 891,041 3.7 % Total residential 6,856,354 28.4 % 6,983,000 28.8 % Total loans 24,134,929 100.0 % 24,273,707 100.0 % Allowance for credit losses (208,790) (219,825) Loans, net $ 23,926,139 $ 24,053,882 Commercial loans and leases Commercial loans include a diverse portfolio of commercial and industrial loans and lines of credit, loans secured by owner-occupied commercial real-estate, income-producing non-owner occupied commercial real estate, construction loans, SBA loans, mortgage warehouse lines of credit, municipal loans and leases and franchise and equipment finance loans and leases. Commercial Real Estate Commercial real estate loans include term loans secured by non-owner occupied income producing properties including rental apartments, industrial properties, retail shopping centers, free-standing single-tenant buildings, medical and other office buildings, warehouse facilities, hotels, and real estate secured lines of credit. The Company's commercial real estate underwriting standards most often provide for loan terms of five to seven years, with amortization schedules of no more than thirty years. The following tables present the distribution of commercial real estate loans by property type, along with weighted average DSCRs and LTVs at the dates indicated (dollars in thousands): March 31, 2026 Amortized Cost Percent of Total CRE FL New York Tri-State Other Weighted Average DSCR Weighted Average LTV Office $ 1,398,071 20 % 57 % 20 % 23 % 1.78 64.2 % Warehouse/Industrial 1,584,187 23 % 44 % 7 % 49 % 1.82 48.3 % Multifamily 1,041,798 15 % 43 % 46 % 11 % 1.94 53.2 % Retail 1,520,622 22 % 38 % 22 % 40 % 1.81 58.7 % Hotel 472,460 7 % 78 % 10 % 12 % 1.75 48.0 % Construction and Land 740,104 11 % 34 % 30 % 36 % N/A N/A Other 129,169 2 % 42 % 3 % 55 % 3.13 44.4 % $ 6,886,411 100 % 47 % 21 % 32 % 1.84 55.4 % December 31, 2025 Amortized Cost Percent of Total CRE FL New York Tri-State Other Weighted Average DSCR Weighted Average LTV Office $ 1,426,728 21 % 61 % 20 % 19 % 1.70 64.8 % Warehouse/Industrial 1,562,342 23 % 47 % 7 % 46 % 1.86 48.2 % Multifamily 943,851 14 % 48 % 44 % 8 % 1.91 52.2 % Retail 1,543,815 23 % 38 % 25 % 37 % 1.80 58.8 % Hotel 483,267 7 % 78 % 10 % 12 % 1.62 46.9 % Construction and Land 705,664 10 % 30 % 34 % 36 % N/A N/A Other 145,204 2 % 49 % 2 % 49 % 2.96 47.0 % $ 6,810,871 100 % 48 % 22 % 30 % 1.82 55.3 % Geographic distribution in the table above is based on location of the underlying collateral property. LTVs and DSCRs are based on the most recent available information; if current appraisals are not available, LTVs are adjusted by our models based on current and forecasted sub-market dynamics. DSCRs are calculated based on current contractually required payments, which in some cases may be interest only and on current levels of operating cash flows. DSCR calculations do not include secondary forms of repayment or pro-forma rental payments on in-place leases that are currently in initial rent abatement periods. 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. 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. Maturing in the Next 12 Months % Maturing in the Next 12 Months Fixed Rate or Swapped Maturing Next 12 Months Fixed Rate to Borrower Maturing in Next 12 Months as a % of Total Portfolio Office $ 544,880 39 % $ 315,301 23 % Warehouse/Industrial 436,027 28 % 215,186 14 % Multifamily 256,559 25 % 179,999 17 % Retail 314,169 21 % 243,239 16 % Hotel 253,327 54 % 181,835 38 % Construction and Land 346,560 47 % 716 - % Other 25,774 20 % 6 - % $ 2,177,296 32 % $ 1,136,282 17 % The following table presents scheduled contractual maturities of the CRE portfolio by property type at March 31, 2026 (in thousands): 2026 2027 2028 2029 2030 Thereafter Total Office $ 429,106 $ 253,002 $ 299,666 $ 281,010 $ 89,559 $ 45,728 $ 1,398,071 Warehouse/Industrial 393,476 266,604 277,147 185,716 322,333 138,911 1,584,187 Multifamily 219,115 218,083 266,219 147,729 100,773 89,879 1,041,798 Retail 308,622 156,769 405,947 139,106 335,526 174,652 1,520,622 Hotel 223,653 29,675 63,226 80,892 57,378 17,636 472,460 Construction and Land 227,848 305,459 60,294 69,475 22,974 54,054 740,104 Other 25,771 7,450 29,271 8,384 8,081 50,212 129,169 $ 1,827,591 $ 1,237,042 $ 1,401,770 $ 912,312 $ 936,624 $ 571,072 $ 6,886,411 The office segment totaled $1.4 billion at March 31, 2026. Medical office comprised approximately $334 million or 24% of the total office portfolio. 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. Commercial and Industrial Commercial and industrial loans are typically made to small, middle market and larger corporate businesses and not-for-profit entities and include equipment loans, secured and unsecured working capital facilities, formula-based loans, subscription finance lines of credit, trade finance, SBA product offerings, business acquisition finance credit facilities, credit facilities to institutional real estate entities such as REITs and commercial real estate investment funds, and a small amount of commercial credit cards. These loans may be structured as term loans, typically with maturities of five to seven years, or revolving lines of credit which may have multi-year maturities. In addition to financing provided by Pinnacle, the Bank provides financing to state and local governmental entities generally within our primary geographic markets. The Bank makes loans secured by owner-occupied commercial real estate that typically have risk profiles more closely aligned with that of commercial and industrial loans than with other types of commercial real estate loans. The following table presents the exposure in the C&I portfolio by industry, at March 31, 2026 (dollars in thousands): Amortized Cost (1) Percent of Total Finance and Insurance $ 1,430,732 16.2 % Health Care 785,141 8.8 % Utilities 736,959 8.3 % Wholesale Trade 721,049 8.1 % Manufacturing 694,747 7.8 % Construction 652,027 7.3 % Educational Services 646,368 7.3 % Transport / Warehousing 530,658 6.0 % Information 464,836 5.2 % R/E and Rental & Leasing 454,451 5.1 % Professional, Scientific, and Technical Services 393,623 4.4 % Retail Trade 369,586 4.2 % Other Services 290,782 3.3 % Public Administration 247,833 2.8 % Arts, Entertainment, and Recreation 150,656 1.7 % Administrative and Support and Waste Management 110,461 1.2 % Accommodation and Food Services 75,341 0.8 % Other 130,682 1.5 % $ 8,885,932 100.0 % (1) Includes $2.0 billion of owner occupied real estate. The following chart presents the geographic distribution of the commercial and industrial portfolio at March 31, 2026: C&I Geographic Distribution The following chart presents a further breakdown of the NDFI portfolio at March 31, 2026: NDFI Portfolio Distribution 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. The Pinnacle portfolio consists of essential-use equipment financing to state and local governmental entities on a national basis directly and through vendor programs and alliances, with financing structures including equipment lease purchase agreements, direct (private placement) bond re-fundings and loan agreements. The franchise and equipment finance portfolio is comprised of loans originated by Bridge including (i) franchise acquisition, expansion and equipment financing facilities and (ii) transportation equipment finance. We expect balances in these segments will continue to decline. Residential mortgages The following table shows the composition of residential loans at the dates indicated (in thousands): March 31, 2026 December 31, 2025 1-4 single family residential $ 5,972,932 $ 6,091,959 Government insured residential 883,422 891,041 $ 6,856,354 $ 6,983,000 The 1-4 single family residential loan portfolio, excluding government insured residential loans, is primarily comprised of prime jumbo loans purchased through established correspondent channels. 1-4 single family residential mortgage loans are primarily closed-end, first lien jumbo mortgages for the purchase or re-finance of owner occupied property. The loans have terms ranging from 10 to 30 years, with either fixed or adjustable interest rates. At March 31, 2026, the majority of the 1-4 single family residential loan portfolio, excluding government insured residential loans, was owner-occupied, with 81% primary residence, 5% second homes and 14% investor-owned properties. 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. The following charts present the distribution of the 1-4 single family residential mortgage portfolio by product type at the dates indicated: March 31, 2026 December 31, 2025 The following table presents the five states with the largest geographic concentrations of 1-4 single family residential loans, excluding government insured residential loans, at the dates indicated (dollars in thousands): March 31, 2026 December 31, 2025 Amortized Cost Percent of Total Amortized Cost Percent of Total California $ 1,785,957 29.9 % $ 1,812,330 29.7 % New York 1,202,109 20.1 % 1,226,041 20.1 % Florida 426,597 7.1 % 431,936 7.1 % Illinois 301,257 5.0 % 307,499 5.0 % Virginia 282,379 4.7 % 286,358 4.7 % Others 1,974,633 33.2 % 2,027,795 33.4 % $ 5,972,932 100.0 % $ 6,091,959 100.0 % Operating lease equipment, net 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. Asset Quality Commercial Loans We have a robust credit risk management framework, an experienced team to lead the workout and recovery process for the commercial and commercial real estate portfolios and a dedicated internal credit review function. Loan performance is monitored by our credit administration, portfolio management and workout and recovery departments. Risk ratings are updated continuously; generally, commercial 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. Homogenous groups of smaller balance commercial loans may be monitored collectively. The credit quality and risk rating of commercial loans as well as our underwriting and portfolio management practices are regularly reviewed by our internal independent credit review department. We believe internal risk rating is the best indicator of the credit quality of commercial loans. The Company utilizes a 16-grade internal asset risk classification system as part of its efforts to monitor and maintain commercial asset quality. 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. The following table summarizes the Company's commercial credit exposure, based on internal risk rating, at the dates indicated (dollars in thousands): March 31, 2026 December 31, 2025 CRE Total Commercial Percent of Commercial Loans CRE Total Commercial Percent of Commercial Loans Pass $ 6,325,495 $ 16,226,229 94.0 % $ 6,145,173 $ 16,092,180 93.1 % Special mention 67,396 177,859 1.0 % 82,147 175,009 1.0 % Substandard accruing 418,033 622,436 3.6 % 474,592 674,368 3.9 % Substandard non-accruing 74,584 211,293 1.2 % 108,959 300,903 1.7 % Doubtful 903 40,758 0.2 % - 48,247 0.3 % $ 6,886,411 $ 17,278,575 100.0 % $ 6,810,871 $ 17,290,707 100.0 % 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. The following table provides additional information about special mention and substandard accruing loans at the dates indicated (dollars in thousands). All of these loans are performing. Non-accrual loans are discussed further in the section entitled "Non-performing Assets" below. March 31, 2026 December 31, 2025 Amortized Cost % of Loan Segment Amortized Cost % of Loan Segment Special mention: CRE Hotel $ 17,302 3.7 % $ 26.817 5.5 % Office 21,370 1.5 % 26,754 1.9 % Industrial 12,077 0.8 % 12,154 0.8 % Construction and land 16,647 2.2 % 16,422 2.3 % 67,396 1.0 % 82,147 1.2 % Owner occupied commercial real estate 20,032 1.0 % 12,400 0.6 % Commercial and industrial 90,431 1.3 % 80,462 1.1 % $ 177,859 $ 175,009 Substandard accruing: CRE Hotel $ 66,245 14.0 % $ 64,530 13.4 % Retail 88,312 5.8 % 88,624 5.7 % Multi-family 98,940 9.5 % 101,829 10.8 % Office 107,356 7.7 % 162,355 11.4 % Industrial 28,084 1.8 % 28,263 1.8 % Construction and land 28,916 3.9 % 28,905 4.1 % Other 180 0.1 % 86 0.1 % $ 418,033 6.1 % $ 474,592 7.0 % Owner occupied commercial real estate 77,700 3.8 % 72,728 3.6 % Commercial and industrial 123,421 1.8 % 112,883 1.6 % Franchise and equipment finance 3,282 3.9 % 14,165 13.8 % $ 622,436 $ 674,368 The following charts present criticized and classified CRE loans by property type at the dates indicated (in millions): March 31, 2026 December 31, 2025 (1) Includes $29 million and $58 million of office exposure at March 31, 2026 and December 31, 2025, respectively. Residential Loans Excluding government insured loans, our residential portfolio consists largely of performing jumbo mortgage loans purchased through established correspondent channels with FICO scores above 720, full documentation, current LTVs of 80% or less and are primarily owner-occupied. Loans with LTVs higher than 80% may be extended to selected credit-worthy borrowers. We perform due diligence on the purchased loans for credit, compliance, counterparty, payment history and property valuation. We have a dedicated residential credit risk management function, and the residential portfolio is monitored by our internal credit review function. Residential mortgage loans are not individually risk rated. Delinquency status is the primary measure we use to monitor the credit quality of these loans. We also consider original LTV and most recently available FICO score to be significant indicators of credit quality for the 1-4 single family residential portfolio, excluding government insured residential loans. The following charts present information about the 1-4 single family residential portfolio, excluding government insured loans, by FICO distribution, LTV distribution and vintage at March 31, 2026: FICO Distribution LTV Distribution Vintage The following graph presents delinquency trends for residential loans, excluding government insured residential loans, over the periods indicated (in millions): Residential Delinquencies FICO scores are generally updated semi-annually and were most recently updated in the first quarter of 2026. LTVs are typically based on valuation at origination. Note 4 to the consolidated financial statements presents additional information about key credit quality indicators and delinquency status of the loan portfolio. Non-Performing Assets Non-performing assets consist of (i) non-accrual loans, (ii) accruing loans that are more than 90 days contractually past due as to interest or principal, excluding PCD loans for which management has a reasonable basis for an expectation about future cash flows and government insured residential loans, and (iii) OREO and other non-performing assets. The following table presents information about the Company's non-performing loans and non-performing assets at the dates indicated (dollars in thousands): March 31, 2026 December 31, 2025 Non-accrual loans: Commercial: Non-owner occupied commercial real estate $ 66,946 $ 67,348 Construction and land - 29,662 Owner occupied commercial real estate 20,230 23,706 Commercial and industrial 128,591 187,068 Franchise and equipment finance 1,140 2,516 Guaranteed portion of SBA 33,812 37,926 Non-guaranteed portion of SBA 1,332 1,516 Total commercial loans 252,051 349,742 Residential 22,639 22,876 Total non-accrual loans 274,690 372,618 Loans past due 90 days and still accruing 395 - Total non-performing loans 275,085 372,618 OREO and other non-performing assets 4,190 4,829 Total non-performing assets $ 279,275 $ 377,447 Non-performing loans to total loans 1.14 % 1.54 % Non-performing loans, excluding the guaranteed portion of non-accrual SBA loans, to total loans 1.00 % 1.38 % Non-performing assets to total assets 0.79 % 1.08 % Non-performing assets, excluding the guaranteed portion of non-accrual SBA loans, to total assets 0.69 % 0.97 % ACL to total loans 0.87 % 0.91 % Commercial ACL to commercial loans (1) 1.25 % 1.30 % ACL to non-performing loans 75.90 % 58.99 % Net charge-offs to average loans 0.61 % 0.30 % Net charge-offs to average loans, trailing twelve months 0.37 % 0.30 % (1) For purposes of this ratio, commercial loans includes the C&I and CRE sub-segments, as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio. 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. The increase in the ACL to non-performing loans coverage ratio reflected overall lower non-performing loan balances at March 31, 2026 compared to December 31, 2025. The following charts present non-performing CRE loans by property type at the dates indicated (in millions): March 31, 2026 December 31, 2025 Commercial loans are placed on non-accrual status when (i) management has determined that full repayment of all contractual principal and interest is in doubt, or (ii) the loan is past due 90 days or more as to principal or interest unless the loan is well secured and in the process of collection. Residential loans, other than Buyout Loans, are generally placed on non-accrual status when they are 60 days past due. When a loan is placed on non-accrual status, uncollected interest accrued is reversed and charged to interest income. Commercial loans are returned to accrual status only after all past due principal and interest has been collected and full repayment of remaining contractual principal and interest is reasonably assured. Residential loans are generally returned to accrual status when less than 60 days past due. Past due status of loans is determined based on the contractual next payment due date. Loans less than 30 days past due are reported as current. Loss Mitigation Strategies Criticized or classified commercial loans in excess of certain thresholds are reviewed quarterly by the Criticized Asset Committee, which evaluates the appropriate strategy for collection to mitigate the amount of credit losses and considers the appropriate risk rating for these loans. Criticized asset reports for each relationship are presented by the assigned relationship manager and credit officer to the Criticized Asset Committee until such time as the relationships are returned to a satisfactory credit risk rating or otherwise resolved. The Criticized Asset Committee may require the transfer of a loan to our workout and recovery department, which is tasked to effectively manage the loan with the goal of minimizing losses and expenses associated with restructure, collection and/or liquidation of collateral. Commercial loans with a risk rating of substandard, loans on non-accrual status, and assets classified as OREO or repossessed assets are usually transferred to workout and recovery. Oversight of the workout and recovery department is provided by the Criticized Asset Committee. Our servicers evaluate each residential loan in default to determine the most effective loss mitigation strategy, which may be modification, short sale, or foreclosure, and pursue the alternative most suitable to the consumer and to mitigate losses to the Bank. Analysis of the Allowance for Credit Losses The ACL is management's estimate of the amount of expected credit losses over the life of the loan portfolio, or the amount of amortized cost basis not expected to be collected, at the balance sheet date. This estimate encompasses information about historical events, current conditions and reasonable and supportable economic forecasts. Determining the amount of the ACL is complex and requires extensive judgment by management about matters that are inherently uncertain. Given the complexity of the ACL estimate, the level of management judgment required and inherent uncertainty with respect to future developments in the external environment, it is possible that the ACL estimate could change, potentially materially, in future periods. Changes in the ACL may result from changes in current economic conditions, including but not limited to unanticipated changes in interest rates or inflationary pressures, changes in our economic forecast, loan portfolio composition, commercial and residential real estate market dynamics and other circumstances not currently known to us that may impact the financial condition and operations of our borrowers, among other factors. Expected credit losses are estimated on a collective basis for groups of loans that share similar risk characteristics. For loans that do not share similar risk characteristics with other loans such as collateral dependent loans, expected credit losses are estimated on an individual basis. Expected credit losses are estimated over the contractual terms of the loans, adjusted for expected prepayments, generally excluding expected extensions, renewals, and modifications. For the substantial majority of portfolio segments and subsegments, including residential loans other than government insured loans and most commercial and commercial real estate loans, expected losses are estimated using econometric models. A single economic scenario or a probability weighted blend of economic scenarios may be used. The models ingest numerous national, regional and MSA level variables and data points. At March 31, 2026 and December 31, 2025, we used a combination of weighted third-party provided economic scenarios in calculating the quantitative portion of the ACL. Each of these externally provided scenarios in fact represents the result of a probability weighting of thousands of individual scenario paths. See Note 1 to the consolidated financial statements of the Company's 2025 Annual Report on Form 10-K for more detailed information about our ACL methodology and related accounting policies. The following table provides an analysis of the ACL, the provision for credit losses related to the funded portion of loans and net charge-offs by loan segment for the periods indicated (dollars in thousands): CRE C&I Pinnacle - Municipal Finance Franchise and Equipment Finance Residential and MWL Total Balance at December 31, 2024 70,458 137,954 116 2,381 12,244 223,153 Provision for credit losses 3,646 9,542 (11) (830) 3,616 15,963 Charge-offs (8,512) (14,245) - - - (22,757) Recoveries - 3,348 - 40 - 3,388 Balance at March 31, 2025 $ 65,592 $ 136,599 $ 105 $ 1,591 $ 15,860 $ 219,747 Balance at December 31, 2025 58,344 148,637 106 960 11,778 219,825 Provision for credit losses (2,437) 29,222 (12) (627) (1,043) 25,103 Charge-offs (338) (36,458) - - - (36,796) Recoveries 135 460 - 63 - 658 Balance at March 31, 2026 $ 55,704 $ 141,861 $ 94 $ 396 $ 10,735 $ 208,790 Net Charge-offs to Average Loans Three months ended March 31, 2025 0.56 % 0.50 % - % (0.08) % - % 0.33 % Three months ended March 31, 2026 0.01 % 1.67 % - % (0.27) % - % 0.61 % The following table shows the distribution of the ACL at the dates indicated (dollars in thousands): March 31, 2026 December 31, 2025 Total % (1) Total % (1) CRE $ 55,704 28.6 % $ 58,344 28.1 % C&I 141,861 36.7 % 148,637 37.1 % Pinnacle - municipal finance 94 2.6 % 106 2.6 % Franchise and equipment finance 396 0.4 % 960 0.4 % Total Commercial 198,055 208,047 Residential and MWL 10,735 31.7 % 11,778 31.8 % $ 208,790 100.0 % $ 219,825 100.0 % (1) Represents percentage of loans receivable in each category to total loans receivable. The following table presents the ACL as a percentage of loans at the dates indicated, by portfolio sub-segment: March 31, 2026 December 31, 2025 Commercial: CRE 0.81 % 0.86 % C&I 1.60 % 1.65 % Franchise and equipment finance 0.47 % 0.93 % Total commercial 1.25 % 1.30 % Pinnacle - municipal finance 0.02 % 0.02 % Residential and MWL 0.14 % 0.15 % 0.87 % 0.91 % ACL to non-performing loans 75.90 % 58.99 % ACL to CRE office loans 1.69 % 2.03 % Changes in the ACL during the three months ended March 31, 2026, are depicted in the chart below (dollars in millions): Changes in the ACL during the three months ended March 31, 2026 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. 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: • 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. • 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. The quantitative estimate of the ACL at March 31, 2026, was informed by forecasted economic scenarios published in March 2026, a wide variety of additional economic data, information about borrower financial condition and collateral values, and other relevant information. The quantitative portion of the ACL at March 31, 2026, was modeled using a weighting of baseline, downside and upside third-party economic scenarios, with the highest weighting ascribed to the baseline scenario and lower weightings ascribed to the downside and upside scenarios. Some of the high-level data points informing the baseline scenario used in estimating the quantitative portion of the ACL at March 31, 2026, included: • Labor market assumptions, which reflected national unemployment peaking at 4.5% and • Annualized growth in national GDP averaging 2.8%. The above unemployment and GDP growth assumptions are provided to give a high level overview of the nature and severity of the baseline economic forecast scenario used in estimating the ACL. Numerous additional variables and assumptions not explicitly stated, including but not limited to detailed commercial and residential property forecasts, projected stock market performance and volatility indices and a variety of additional assumptions about market interest rates and spreads also contributed to the overall impact economic conditions and the economic forecast had on the ACL estimate. Furthermore, while the variables presented above are at the national level, many of the economic variables are regionalized at the market and submarket level in the models. For additional information about the ACL, see Note 4 to the consolidated financial statements. Deposits The composition of deposits at the dates indicated is shown below: March 31, 2026 December 31, 2025 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. 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. The following graph presents trends in the deposit mix and cost of deposits (in millions): Quarterly average cost of deposits 2.12% 2.18% Non-interest bearing as a % of total deposits 30.5% 28.8% Spot average APY of total deposits 2.09% 2.10% 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. For additional information about Deposits, see Note 10 to the consolidated financial statements. Borrowings In addition to deposits, we utilize FHLB advances as a funding source; the advances provide us with additional flexibility in managing both term and cost of funding and in managing interest rate risk. FHLB advances are secured by qualifying residential first mortgage and commercial real estate loans and MBS. The following table presents information about the contractual balance and maturities of outstanding FHLB advances, as of March 31, 2026 (dollars in thousands): Amount Weighted Average Rate Maturing in: 2026 - One month or less $ 1,725,000 3.86 % 2026 - Over one month 30,000 3.85 % Total contractual balance outstanding $ 1,755,000 The table above reflects contractual maturities of outstanding advances and does not incorporate the impact that interest rate swaps designated as cash flow hedges have on the duration or cost of borrowings. The table below presents information about outstanding interest rate swaps hedging the variability of interest cash flows on the FHLB advances included in the table above, as of March 31, 2026 (dollars in thousands): Notional Amount Weighted Average Rate Cash flow hedges maturing in: 2026 $ 680,000 3.20 % Thereafter 25,000 2.50 % $ 705,000 3.18 % See Note 6 to the consolidated financial statements and "Interest Rate Risk" below for more information about derivative instruments. Outstanding notes payable and other borrowings consisted of the following at the dates indicated (in thousands): March 31, 2026 December 31, 2025 Subordinated notes: Principal amount of 5.125% subordinated notes maturing on June 11, 2030 300,000 300,000 Unamortized discount and debt issuance costs (2,984) (3,143) 297,016 296,857 Total notes 297,016 296,857 Finance leases 22,324 22,883 Notes and other borrowings $ 319,340 $ 319,740 Liquidity and Capital Resources Liquidity Liquidity involves our ability to generate adequate funds to support planned interest earning asset growth, meet deposit withdrawal and credit line usage requests in both normal operating and stressed environments, maintain reserve requirements, conduct routine operations, pay dividends, service outstanding debt and meet other contractual obligations. BankUnited's ongoing liquidity needs have historically been met primarily by cash flows from operations, deposit growth, the investment portfolio, its amortizing loan portfolio and FHLB advances. FRB discount window capacity, repurchase agreement capacity and a letter of credit with the FHLB provide additional sources of contingent liquidity. Same day available liquidity inc ludes cash, secured funding such as borrowing capacity at the Federal Home Loan Bank of Atlanta and the Federal Reserve, and unpledged securities. Additional sources of liquidity include cash flows from operations, wholesale deposits, cash flow from the Bank's amortizing securities and loan portfolios, repurchase agreements and the sale of investment securities. Management also has the ability to exert substantial control over the rate and timing of loan production, and resultant requirements for liquidity to fund new loans. The following chart presents the components of same day available liquidity at March 31, 2026 and December 31, 2025 (in millions): Same Day Available Liquidity 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. 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. The following tables present some of the Company's liquidity measures, where applicable, their related policy limits and operating risk thresholds at the dates indicated: March 31, 2026 Policy Limit Wholesale funding/total assets 18.0% <37.5% March 31, 2026 Operating Threshold Available operational liquidity/volatile liabilities 2.65x ≥1.30x Liquidity stress test coverage ratio 2.72x ≥1.50x One year liquidity ratio 2.86x ≥1.00x Loan to deposit ratio 82.3% ≤100% Top 20 uninsured depositors to total deposits (excluding brokered & municipal deposits) 10.5% ≤15% Available on-balance sheet liquidity 5.9% ≥5% Available liquidity to uninsured/non-collateralized deposits 136% ≥100% As a holding company, BankUnited, Inc. is a corporation separate and apart from its banking subsidiary, and therefore, provides for its own liquidity. BankUnited, Inc.'s main sources of funds include management fees and dividends from the Bank and access to capital markets. There are regulatory limitations that may affect the ability of the Bank to pay dividends to BankUnited, Inc. Management believes that such limitations will not impact our ability to meet our ongoing cash obligations. Capital Pursuant to the FDIA, the federal banking agencies have adopted regulations setting forth a five-tier system for measuring the capital adequacy of the financial institutions they supervise. At March 31, 2026 and December 31, 2025, the Company and the Bank had capital levels that exceeded both the regulatory well-capitalized guidelines and all internal capital ratio targets. We have an active shelf registration statement on file with the SEC that allows the Company to periodically offer and sell in one or more offerings, individually or in any combination, our common stock, preferred stock and other non-equity securities. The shelf registration provides us with flexibility in issuing capital instruments and enables us to more readily access the capital markets as needed to pursue future growth opportunities and to ensure continued compliance with regulatory capital requirements. Our ability to issue securities pursuant to the shelf registration is subject to market conditions. The following table provides information regarding regulatory capital for the Company and the Bank as of March 31, 2026 (dollars in thousands): Actual Required to be Considered Well Capitalized Required to be Considered Adequately Capitalized Required to be Considered Adequately Capitalized Including Capital Conservation Buffer Amount Ratio Amount Ratio Amount Ratio Amount Ratio BankUnited, Inc.: Tier 1 leverage $ 3,140,222 8.91 % N/A (1) N/A (1) $ 1,410,490 4.00 % N/A (1) N/A (1) CET1 risk-based capital $ 3,140,222 12.19 % $ 1,674,264 6.50 % $ 1,159,106 4.50 % $ 1,803,054 7.00 % Tier 1 risk-based capital $ 3,140,222 12.19 % $ 2,060,633 8.00 % $ 1,545,475 6.00 % $ 2,189,423 8.50 % Total risk-based capital $ 3,596,453 13.96 % $ 2,575,791 10.00 % $ 2,060,633 8.00 % $ 2,704,581 10.50 % BankUnited: Tier 1 leverage $ 3,317,763 9.41 % $ 1,762,447 5.00 % $ 1,409,958 4.00 % N/A N/A CET1 risk-based capital $ 3,317,763 12.89 % $ 1,672,969 6.50 % $ 1,158,209 4.50 % $ 1,801,659 7.00 % Tier 1 risk-based capital $ 3,317,763 12.89 % $ 2,059,038 8.00 % $ 1,544,279 6.00 % $ 2,187,728 8.50 % Total risk-based capital $ 3,533,995 13.73 % $ 2,573,798 10.00 % $ 2,059,038 8.00 % $ 2,702,488 10.50 % (1) There is no Tier 1 leverage ratio component in the definition of a well-capitalized bank holding company. Interest Rate Risk A principal component of the Company's risk of loss arising from adverse changes in the fair value of financial instruments, or market risk, is interest rate risk, including the risk that assets and liabilities with similar re-pricing characteristics may not reprice at the same time or to the same degree. A primary objective of the Company's asset/liability management activities is to maximize net interest income, while maintaining acceptable levels of interest rate risk. The ALCO is responsible for establishing policies to manage exposure to interest rate risk, and to ensure procedures are established to monitor compliance with these policies. The policies established by the ALCO are approved at least annually by the Board of Directors and its Risk Committee. The Board of Directors or its Risk Committee monitor compliance with these policies at least quarterly. Management believes that the simulation of net interest income in different interest rate environments provides the most meaningful measure of interest rate risk. Income simulation analysis is designed to capture not only the potential of all assets and liabilities to mature or reprice, but also the probability that they will do so. Income simulation also attends to the relative interest rate sensitivities of these items, and projects their behavior over an extended period of time. Finally, income simulation permits management to assess the probable effects on the balance sheet not only of changes in interest rates, but also of proposed strategies for responding to them. Simulation of changes in EVE in various interest rate environments is also a meaningful measure of interest rate risk. Net Interest Income Simulation The income simulation model analyzes interest rate sensitivity by projecting net interest income over 12- and 24-month periods in a most likely rate scenario based on a consensus forward curve versus net interest income in alternative rate scenarios. Management continually reviews and refines its interest rate risk management processes in response to changes in the interest rate environment, the economic climate and observed customer behavior. Currently, our interest rate risk management framework is based on modeling instantaneous rate shocks to a static balance sheet, assuming that maturing instruments are replaced with like instruments at forward rates, of plus and minus 100, 200, 300 and 400 basis point parallel shifts. In lower interest rate environments, we may not model more extreme declining rate scenarios and in certain macro-environments, we may model shocks of more than 400 basis points. Our ALM policy has established limits for the plus and minus 100 and 200 basis points shock scenarios. We also model a variety of dynamic balance sheet scenarios, various yield curve slopes, non-parallel shifts and alternative depositor behavior, beta and decay assumptions. We continually evaluate the scenarios being modeled with a view toward adapting them to changing economic conditions, expectations and trends. The following table presents the impact on forecasted net interest income compared to a "most likely" scenario, based on the consensus forward curve, in static balance sheet, parallel rate shock scenarios of plus and minus 100 and 200 basis points at the dates indicated: Down 200 Down 100 Plus 100 Plus 200 Policy Limits: In year 1 (12) % (8) % (8) % (12) % In year 2 (15) % (11) % (11) % (15) % Model Results at March 31, 2026 - increase (decrease) In year 1 (3.6) % (1.1) % 1.5 % 2.0 % In year 2 (9.4) % (4.1) % 3.9 % 6.8 % Model Results at December 31, 2025 - increase (decrease) In year 1 (4.7) % (1.9) % 1.9 % 3.4 % In year 2 (8.8) % (3.8) % 3.3 % 6.2 % EVE Simulation The following table illustrates the modeled change in EVE in the indicated scenarios at the dates indicated: Down 200 Down 100 Plus 100 Plus 200 Policy Limits (20.0) % (10.0) % (10.0) % (20.0) % Model Results at March 31, 2026 - increase (decrease): 6.9 % 5.2 % (2.9) % (7.0) % Model Results at December 31, 2025 - increase (decrease): 7.1 % 5.3 % (3.5) % (7.8) % All of the modeled results at March 31, 2026 are within ALM policy limits. The Company uses many assumptions in estimating the impact of changes in interest rates on forecasted net interest income and EVE. Actual results may not be similar to the Company's projections due to many factors including but not limited to the timing and frequency of market rate changes, market conditions, unanticipated changes in depositor behavior and loan prepayment speeds, the shape of the yield curve, changes in balance sheet composition and the Company's actions in response to changing external and balance sheet dynamics. Some of the more significant assumptions used by the Company in estimating the impact of changes in interest rates on forecasted net interest income and EVE at March 31, 2026 were: • 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; • 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; • Deposit decay rates ranging between 9.73% and 13.7%, depending on the magnitude of the modeled rate shock; and • Overall non-maturity interest bearing deposit beta of 80%. Derivative Financial Instruments and Hedging Activities Management continually evaluates a variety of hedging strategies that are available to manage interest rate risk. Interest rate derivatives designated as cash flow or fair value hedging instruments are tools we may use to manage interest rate risk. These derivative instruments are used to mitigate exposure to changes in interest cash flows or the fair value of financial instruments caused by fluctuations in benchmark interest rates, as well as to manage duration of liabilities. The following tables provide information about the Company's derivatives designated as cash flow hedges as of March 31, 2026 (dollars in thousands): Weighted Average Pay Rate / Strike Price Weighted Average Receive Rate / Strike Price Weighted Average Remaining Life in Years Notional Amount Hedged Item Pay-fixed interest rate swaps Variability of interest cash flows on variable rate borrowings $ 705,000 3.20% Daily SOFR 0.9 Pay-variable interest rate swaps Variability of interest cash flows on variable rate loans 2,100,000 Term SOFR 3.79% 0.7 Forward starting pay-variable interest rate swaps Variability of interest cash flows on variable rate loans 1,000,000 Term SOFR 3.09% 2.5 Interest rate collar, indexed to 1-month SOFR Variability of interest cash flows on variable rate loans 125,000 5.58% 1.50% 0.4 $ 3,930,000 Variability of Interest Payment Cash Flows on Variable Rate Loans Variability of Interest Payment Cash Flows on Variable Rate Liabilities Notional Amount Weighted Average Rate Notional Amount Weighted Average Rate Cash flows hedges maturing in: Second quarter 2026 $ 50,000 2.15 % $ 250,000 3.06 % Third quarter 2026 1,125,000 3.68 % 230,000 3.32 % Fourth quarter 2026 750,000 3.96 % 200,000 3.33 % 2027 300,000 3.76 % - - % 2028 1,000,000 3.09 % - - % Thereafter - - % 25,000 2.50 % $ 3,225,000 $ 705,000 The short duration of our AFS investment portfolio (1.92 at March 31, 2026) also provides a natural offset from an interest rate risk perspective to the longer duration of the residential mortgage portfolio. See Note 6 to the consolidated financial statements for additional information about derivative financial instruments. Non-GAAP Financial Measures Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following tables reconcile the non-GAAP financial measurement to the comparable GAAP financial measurements at the dates and for the periods indicated (in thousands except share and per share data): March 31, 2026 December 31, 2025 Total stockholders' equity $ 3,015,537 $ 3,053,829 Less: goodwill and other intangible assets 77,637 77,637 Tangible stockholders' equity $ 2,937,900 $ 2,976,192 Common shares issued and outstanding 73,354,206 74,138,066 Book value per common share $ 41.11 $ 41.19 Tangible book value per common share $ 40.05 $ 40.14 Three Months Ended March 31, 2026 March 31, 2025 Income before income taxes $ 81,738 $ 80,072 Provision for credit losses 24,586 15,111 PPNR $ 106,324 $ 95,183

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