bku-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

Commission File Number: 001-35039

BankUnited, Inc.

(Exact name of registrant as specified in its charter)


Delaware						27-0162450
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


14817 Oak Lane	Miami Lakes	FL	33016
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (305) 569-2000

Securities registered pursuant to Section 12(b) of the Act:

Class

Trading Symbol

Name of Exchange on Which Registered

Common Stock, $0.01 Par Value

BKU

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of outstanding shares of the registrant common stock, $0.01 par value, as of May 6, 2025 was 75,211,923.

BANKUNITED, INC.

Form 10-Q

For the Quarter Ended March 31, 2025

TABLE OF CONTENTS


		Page

	Glossary of Defined Terms	ii

PART I.	FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Cash Flows	4
	Consolidated Statements of Stockholders’ Equity	6
	Notes to Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	61

ITEM 4.	Controls and Procedures	61

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	61

ITEM 1A.	Risk Factors	61

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61

ITEM 5.	Other Information	61

ITEM 6.	Exhibits	62

SIGNATURES		63

GLOSSARY OF DEFINED TERMS

The following acronyms and terms may be used throughout this Form 10-Q, including the consolidated financial statements and related notes.



ACL						Allowance for credit losses
AFS						Available for sale
ALCO						Asset Liability Committee
ALM						Asset Liability Management

AOCI						Accumulated other comprehensive income
APY						Annual Percentage Yield



ASU						Accounting Standards Update






BKU						BankUnited, Inc.

BOLI						Bank Owned Life Insurance
BankUnited						BankUnited, National Association
The Bank						BankUnited, National Association
Bridge						Bridge Funding Group, Inc.


Buyout Loans						FHA and VA insured mortgages from third party servicers who have exercised their right to purchase these loans out of GNMA securitizations






CD						Certificate of Deposit

CEO						Chief Executive Officer
CET1						Common Equity Tier 1 capital




CLO						Collateralized loan obligations
CMBS						Commercial mortgage-backed securities

CMOs						Collateralized mortgage obligations

CODM						Chief Operating Decision Maker

CPR						Constant prepayment rate

CRE						Commercial real estate loans, including non-owner occupied commercial real estate and construction and land





C&I						Commercial and Industrial loans, including owner-occupied commercial real estate

DSCR						Debt Service Coverage Ratio


EVE						Economic value of equity


FASB						Financial Accounting Standards Board

FDIA						Federal Deposit Insurance Act
FDIC						Federal Deposit Insurance Corporation

FHA						Federal Housing Administration

FHLB						Federal Home Loan Bank
FICO						Fair Isaac Corporation (credit score)


FRB						Federal Reserve Bank
GAAP						U.S. generally accepted accounting principles
GDP						Gross Domestic Product

GNMA						Government National Mortgage Association

HOA						Homeowner Association






ISDA						International Swaps and Derivatives Association

LGD						Loss Given Default


LTV						Loan-to-value

MBS						Mortgage-backed securities
MSA						Metropolitan Statistical Area


MWL						Mortgage warehouse lending

NIDDA						Non-interest bearing demand deposits


NPA						Non-performing asset
NRSRO						Nationally recognized statistical rating organization







OREO						Other real estate owned


PCD						Purchased credit-deteriorated
PD						Probability of default
Pinnacle						Pinnacle Public Finance, Inc.






REIT						Real Estate Investment Trust




RPA						Risk Participation Agreement




SBA						U.S. Small Business Administration

SEC						Securities and Exchange Commission

SOFR						Secured Overnight Financing Rate



Tri-State						New York, New Jersey and Connecticut


VA loan						Loan guaranteed by the U.S. Department of Veterans Affairs

iii

PART I

Item 1. Financial Statements and Supplementary Data

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)


	March 31, 2025		December 31, 2024
ASSETS
Cash and due from banks:
Non-interest bearing	$	12,727	$	12,078
Interest bearing	431,018		479,038
Cash and cash equivalents	443,745		491,116
Investment securities	9,099,809		9,130,244
Non-marketable equity securities	181,359		206,297

Loans	23,989,899		24,297,980
Allowance for credit losses	(219,747)		(223,153)
Loans, net	23,770,152		24,074,827
Bank owned life insurance	293,886		284,570
Operating lease equipment, net	218,621		223,844

Goodwill	77,637		77,637
Other assets	746,788		753,207
Total assets	$	34,831,997	$	35,241,742

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Non-interest bearing	$	8,069,275	$	7,616,182
Interest bearing	4,776,223		4,892,814
Savings and money market	10,788,919		11,055,418
Time	4,423,408		4,301,289
Total deposits	28,057,825		27,865,703

FHLB advances	2,405,000		2,930,000
Notes and other borrowings	709,091		708,553
Other liabilities	762,499		923,168
Total liabilities	31,934,415		32,427,424

Commitments and contingencies

Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 75,242,048 and 74,748,370 shares issued and outstanding	752		747
Paid-in capital	301,321		301,672
Retained earnings	2,831,743		2,796,440
Accumulated other comprehensive loss	(236,234)		(284,541)
Total stockholders' equity	2,897,582		2,814,318
Total liabilities and stockholders' equity	$	34,831,997	$	35,241,742

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)


	Three Months Ended March 31,
	2025		2024
Interest income:
Loans	$	321,384	$	347,257
Investment securities	113,869		124,179
Other	8,436		10,038
Total interest income	443,689		481,474
Interest expense:
Deposits	174,210		209,998
Borrowings	36,340		56,619
Total interest expense	210,550		266,617
Net interest income before provision for credit losses	233,139		214,857
Provision for credit losses	15,111		15,285
Net interest income after provision for credit losses	218,028		199,572
Non-interest income:
Deposit service charges and fees	5,235		5,313


Lease financing	4,313		11,440
Other non-interest income	12,722		10,124
Total non-interest income	22,270		26,877
Non-interest expense:
Employee compensation and benefits	82,746		75,920
Occupancy and equipment	11,343		10,569
Deposit insurance expense	7,227		13,530

Technology	22,780		20,315
Depreciation of operating lease equipment	4,009		9,213
Other non-interest expense	32,121		29,693
Total non-interest expense	160,226		159,240
Income before income taxes	80,072		67,209
Provision for income taxes	21,596		19,229
Net income	$	58,476	$	47,980
Earnings per common share, basic	$	0.78	$	0.64
Earnings per common share, diluted	$	0.78	$	0.64

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED

(In thousands)


	Three Months Ended March 31,
		2025		2024
Net income		$	58,476	$	47,980
Other comprehensive income, net of tax:
Unrealized gains (losses) on investment securities available for sale:
Net unrealized holding gains arising during the period		50,667		26,936
Reclassification adjustment for net (gains) losses realized in income		(611)		21
Net change in unrealized gains (losses) on securities available for sale		50,056		26,957
Unrealized gains (losses) on derivative instruments:
Net unrealized holding gains arising during the period		2,751		21,204
Reclassification adjustment for net gains realized in income		(4,500)		(14,668)

Net change in unrealized gains (losses) on derivative instruments		(1,749)		6,536
Other comprehensive income		48,307		33,493
Comprehensive income		$	106,783	$	81,473

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(In thousands)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net income	$	58,476	$	47,980
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and accretion, net	(5,133)		(3,690)
Provision for credit losses	15,111		15,285




Share based compensation	5,175		5,883
Depreciation and amortization	14,072		17,213
Deferred income taxes	13,330		(5,865)

Proceeds from sale of loans held for sale, net	23,437		37,431


Daily cash settlement of derivative instruments, net	(9,417)		10,883
Other:
Increase in other assets	(38,618)		(28,735)
Decrease in other liabilities	(60,035)		(29,889)
Net cash provided by operating activities	16,398		66,496

Cash flows from investing activities:

Purchases of investment securities	(826,791)		(309,549)
Proceeds from repayments and calls of investment securities	625,243		266,878
Proceeds from sale of investment securities	206,400		32,067
Purchases of non-marketable equity securities	(21,375)		(108,063)
Proceeds from redemption of non-marketable equity securities	46,313		165,538
Purchases of loans	(95,639)		(66,570)
Loan originations and repayments, net	363,863		440,699


Proceeds from surrender of BOLI	—		32,144


Disposition of operating lease equipment	1,476		46,418
Other investing activities	(27,614)		(12,072)
Net cash provided by investing activities	271,876		487,490
			(Continued)

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED (Continued)

(In thousands)


	Three Months Ended March 31,
	2025		2024
Cash flows from financing activities:
Net increase in deposits	192,122		488,886

Additions to FHLB borrowings	80,000		285,000
Repayments of FHLB borrowings	(605,000)		(1,495,000)


Dividends paid	(22,176)		(20,706)


Other financing activities	19,409		20,767
Net cash used in financing activities	(335,645)		(721,053)
Net decrease in cash and cash equivalents	(47,371)		(167,067)
Cash and cash equivalents, beginning of period	491,116		588,283
Cash and cash equivalents, end of period	$	443,745	$	421,216

Supplemental disclosure of cash flow information:
Interest paid	$	204,691	$	261,376
Income taxes paid, net	$	29,057	$	36,907

Supplemental schedule of non-cash investing and financing activities:


Transfers from loans to loans held for sale	$	23,797	$	37,576


Dividends declared, not paid	$	23,173	$	21,533

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - UNAUDITED

(In thousands, except share data)


	Common Shares Outstanding	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance at December 31, 2024	74,748,370	$	747	$	301,672	$	2,796,440	$	(284,541)	$	2,814,318
Comprehensive income	—	—		—		58,476		48,307		106,783
Dividends ($0.31 per common share)	—	—		—		(23,173)		—		(23,173)
Equity based compensation, net of shares forfeited and surrendered	493,678	5		(351)		—		—		(346)


Balance at March 31, 2025	75,242,048	$	752	$	301,321	$	2,831,743	$	(236,234)	$	2,897,582

Balance at December 31, 2023	74,372,505	$	744	$	283,642	$	2,650,956	$	(357,421)	$	2,577,921
Comprehensive income	—	—		—		47,980		33,493		81,473
Dividends ($0.29 per common share)	—	—		—		(21,533)		—		(21,533)
Equity based compensation, net of shares forfeited and surrendered	400,201	4		2,527		—		—		2,531


Balance at March 31, 2024	74,772,706	$	748	$	286,169	$	2,677,403	$	(323,928)	$	2,640,392

The accompanying notes are an integral part of these consolidated financial statements

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

Note 1 Basis of Presentation and Summary of Significant Accounting Policies

BankUnited, Inc. is a national 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 banking services to individual and corporate customers through banking centers in Florida, the New York metropolitan area and Dallas, Texas. The Bank also offers certain commercial lending and deposit products through national platforms and regional wholesale banking offices.

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, 2024, 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 months ended March 31, 2025, 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.

Accounting Pronouncements Not Yet Adopted

ASU No. 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires entities to provide additional disclosures, primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions among others. This ASU is effective for the Company for fiscal years beginning after December 15, 2024. The ASU stipulates adoption on a prospective basis with the option to apply the standard retrospectively. The Company plans to adopt this ASU when effective for fiscal year ended December 31, 2025. 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. Adoption will lead to revised disclosures about income taxes in the Company's financial statements.

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.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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):


	Three Months Ended March 31,
c	2025		2024
Basic earnings per common share:
Numerator:
Net income	$	58,476	$	47,980
Distributed and undistributed earnings allocated to participating securities	(821)		(680)
Income allocated to common stockholders for basic earnings per common share	$	57,655	$	47,300
Denominator:
Weighted average common shares outstanding	74,918,750		74,509,107
Less average unvested stock awards	(1,101,408)		(1,127,838)
Weighted average shares for basic earnings per common share	73,817,342		73,381,269
Basic earnings per common share	$	0.78	$	0.64
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share	$	57,655	$	47,300
Adjustment for earnings reallocated from participating securities	4		1
Income used in calculating diluted earnings per common share	$	57,659	$	47,301
Denominator:
Weighted average shares for basic earnings per common share	73,817,342		73,381,269
Dilutive effect of certain share-based awards	562,488		255,824
Weighted average shares for diluted earnings per common share	74,379,830		73,637,093
Diluted earnings per common share	$	0.78	$	0.64

Potentially dilutive unvested shares totaling 1,156,257 and 1,142,702 were outstanding at March 31, 2025 and 2024, respectively, but excluded from the calculation of diluted earnings per common share because their inclusion would have been anti-dilutive.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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):



	March 31, 2025
	Amortized Cost		Gross Unrealized				Carrying Value
			Gains		Losses
Investment securities available for sale:
U.S. Treasury securities	$	214,813	$	1,051	$	(9,111)	$	206,753
U.S. Government agency and sponsored enterprise residential MBS	2,735,833		8,813		(20,078)		2,724,568
U.S. Government agency and sponsored enterprise commercial MBS	555,695		358		(53,526)		502,527
Private label residential MBS and CMOs	2,509,808		1,150		(225,073)		2,285,885
Private label commercial MBS	1,799,267		2,079		(30,894)		1,770,452
Single family real estate-backed securities	282,569		221		(5,837)		276,953
Collateralized loan obligations	1,055,659		2,602		(555)		1,057,706
Non-mortgage asset-backed securities	94,249		72		(2,061)		92,260
State and municipal obligations	109,805		91		(5,293)		104,603
SBA securities	71,147		38		(2,028)		69,157

	$	9,428,845	$	16,475	$	(354,456)	9,090,864


Marketable equity securities							8,945
							$	9,099,809



	December 31, 2024
	Amortized Cost		Gross Unrealized				Carrying Value
			Gains		Losses
Investment securities available for sale:
U.S. Treasury securities	$	214,796	$	165	$	(12,009)	$	202,952
U.S. Government agency and sponsored enterprise residential MBS	2,672,554		3,607		(26,471)		2,649,690
U.S. Government agency and sponsored enterprise commercial MBS	557,489		156		(61,892)		495,753
Private label residential MBS and CMOs	2,491,033		506		(253,493)		2,238,046
Private label commercial MBS	1,822,881		1,836		(40,688)		1,784,029
Single family real estate-backed securities	335,047		108		(8,074)		327,081
Collateralized loan obligations	1,131,088		1,804		(193)		1,132,699
Non-mortgage asset-backed securities	96,865		144		(2,555)		94,454
State and municipal obligations	110,388		13		(6,391)		104,010
SBA securities	74,900		37		(2,235)		72,702

	$	9,507,041	$	8,376	$	(414,001)	9,101,416


Marketable equity securities							28,828
							$	9,130,244

Accrued interest receivable on investments totaled $33 million and $36 million at March 31, 2025 and December 31, 2024, respectively, and is included in other assets in the accompanying consolidated balance sheets.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

At March 31, 2025, contractual maturities of investment securities available for sale, adjusted for anticipated prepayments when applicable, were as follows (in thousands):


	Amortized Cost		Fair Value
Due in one year or less	$	920,713	$	899,055
Due after one year through five years	4,918,945		4,832,597
Due after five years through ten years	2,419,249		2,287,157
Due after ten years	1,169,938		1,072,055
	$	9,428,845	$	9,090,864

The carrying value of securities pledged as collateral for FHLB advances, public deposits, interest rate swaps and to secure borrowing capacity at the FRB totaled $7.7 billion and $7.9 billion at March 31, 2025 and December 31, 2024, respectively.

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


	Three Months Ended March 31,
		2025		2024

Gross realized gains on investment securities AFS		$	862	$	27
Gross realized losses on investment securities AFS		(37)		(55)
Net realized gain (loss)		825		(28)

Net gain on marketable equity securities recognized in earnings		119		803

Gain on investment securities, net		$	944	$	775

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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):


	March 31, 2025

	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities	$	53,612	$	(1,558)	$	42,068	$	(7,553)	$	95,680	$	(9,111)
U.S. Government agency and sponsored enterprise residential MBS	393,038		(1,804)		761,197		(18,274)		1,154,235		(20,078)
U.S. Government agency and sponsored enterprise commercial MBS	35,849		(728)		400,663		(52,798)		436,512		(53,526)

Private label residential MBS and CMOs	92,995		(584)		2,025,552		(224,489)		2,118,547		(225,073)
Private label commercial MBS	115,343		(601)		828,073		(30,293)		943,416		(30,894)
Single family real estate-backed securities	—		—		229,752		(5,837)		229,752		(5,837)
Collateralized loan obligations	288,273		(554)		906		(1)		289,179		(555)
Non-mortgage asset-backed securities	—		—		70,328		(2,061)		70,328		(2,061)
State and municipal obligations	6,480		(58)		55,378		(5,235)		61,858		(5,293)
SBA securities	—		—		64,403		(2,028)		64,403		(2,028)

	$	985,590	$	(5,887)	$	4,478,320	$	(348,569)	$	5,463,910	$	(354,456)


	December 31, 2024
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities	$	126,710	$	(3,195)	$	40,791	$	(8,814)	$	167,501	$	(12,009)
U.S. Government agency and sponsored enterprise residential MBS	895,759		(5,474)		936,106		(20,997)		1,831,865		(26,471)
U.S. Government agency and sponsored enterprise commercial MBS	55,431		(1,545)		394,735		(60,347)		450,166		(61,892)

Private label residential MBS and CMOs	147,700		(954)		2,040,335		(252,539)		2,188,035		(253,493)
Private label commercial MBS	44,000		(302)		1,199,150		(40,386)		1,243,150		(40,688)
Single family real estate-backed securities	—		—		301,973		(8,074)		301,973		(8,074)
Collateralized loan obligations	336,924		(189)		7,726		(4)		344,650		(193)
Non-mortgage asset-backed securities	—		—		71,789		(2,555)		71,789		(2,555)
State and municipal obligations	15,765		(148)		54,820		(6,243)		70,585		(6,391)
SBA securities	—		—		67,880		(2,235)		67,880		(2,235)

	$	1,622,289	$	(11,807)	$	5,115,305	$	(402,194)	$	6,737,594	$	(414,001)

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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 months ended March 31, 2025 and 2024. At March 31, 2025, the Company did not have an intent to sell securities that were in significant unrealized loss positions, and it was not more likely than not that the Company would be required to sell these securities before recovery of the amortized cost basis, which may be at maturity. 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. We have not sold, and do not anticipate the need to sell, securities in unrealized loss positions to generate liquidity.

At March 31, 2025, 392 securities available for sale were in unrealized loss positions. The amount of unrealized losses related to 103 of these securities was considered insignificant both individually and in the aggregate, totaling approximately $0.9 million and no further analysis with respect to these securities was considered necessary. The basis for concluding that AFS securities were not credit loss impaired and no ACL was considered necessary at March 31, 2025, 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 $338.0 million at March 31, 2025, compared to $405.6 million at December 31, 2024, improving by $67.6 million during the three months ended March 31, 2025. While the majority of securities in the portfolio were floating rate at March 31, 2025, fixed rate securities accounted for the substantial majority of unrealized losses.

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

At March 31, 2025, six U.S. treasury, 67 U.S. Government agency and sponsored enterprise residential MBS, 20 U.S. Government agency and sponsored enterprise commercial MBS, and 18 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 March 31, 2025. 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 March 31, 2025, 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 March 31, 2025, 113 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 March 31, 2025 analysis projected weighted average collateral losses for impaired securities in this category of 3% compared to weighted average credit support of 18%. As of March 31, 2025, 94% of impaired securities in this category, based on carrying value, were externally rated AAA, 4% were rated AA, 1% were rated A and one security was not externally rated.

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

Private label commercial MBS

At March 31, 2025, 41 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 March 31, 2025 analysis projected weighted average collateral losses for impaired securities in this category of 7% compared to weighted average credit support of 46%. As of March 31, 2025, 81% of impaired securities in this category, based on carrying value, were externally rated AAA, 15% were rated AA and 4% were rated A. There was no single-asset, single-borrower exposure.

Single family real estate-backed securities

At March 31, 2025, eight single family rental 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. Our March 31, 2025 analysis projected weighted average collateral losses for this category of 8% compared to weighted average credit support of 55%. As of March 31, 2025, 42% of impaired securities in this category, based on carrying value, were externally rated AAA, 27% were rated AA and one security was not externally rated.

Collateralized loan obligations

At March 31, 2025, seven collateralized loan obligations were in unrealized loss positions. Unrealized losses totaled less than 1% of total amortized cost of this segment at March 31, 2025. 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 March 31, 2025 analysis projected weighted average collateral losses for impaired securities in this category of 17% compared to weighted average credit support of 40%. As of March 31, 2025, 70% of the impaired securities in this category, based on carrying value, were externally rated AAA, and 30% were rated AA.

Non-mortgage asset-backed securities

At March 31, 2025, five 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 March 31, 2025 analysis projected weighted average collateral losses for impaired securities in this category of 4% compared to weighted average credit support of 30%. As of March 31, 2025, 27% of the impaired securities in this category, based on carrying value, were externally rated AAA, and 73% were rated AA.

State and Municipal Obligations

At March 31, 2025, four 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 March 31, 2025, 100% of the impaired securities in this category, based on carrying value, were externally rated AAA.

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

Note 4 Loans and Allowance for Credit Losses

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


	March 31, 2025				December 31, 2024

	Amortized Cost		Percent of Total Loans		Amortized Cost		Percent of Total Loans
Commercial:
Non-owner occupied commercial real estate	$	5,602,711	23.4	%	$	5,652,203	23.3	%
Construction and land	603,385		2.5	%	561,989		2.3	%
Owner occupied commercial real estate	1,967,984		8.2	%	1,941,004		8.0	%
Commercial and industrial	6,916,996		28.8	%	7,042,222		28.9	%

Pinnacle - municipal finance	688,986		2.9	%	720,661		3.0	%
Franchise and equipment finance	165,095		0.7	%	213,477		0.9	%

Mortgage warehouse lending	580,248		2.4	%	585,610		2.4	%
	16,525,405		68.9	%	16,717,166		68.8	%
Residential:
1-4 single family residential	6,405,196		26.7	%	6,508,922		26.8	%
Government insured residential	1,059,298		4.4	%	1,071,892		4.4	%
	7,464,494		31.1	%	7,580,814		31.2	%
Total loans	23,989,899		100.0	%	24,297,980		100.0	%
Allowance for credit losses	(219,747)				(223,153)
Loans, net	$	23,770,152			$	24,074,827

Premiums, discounts and deferred fees and costs, excluding the non-credit related discount on PCD loans, totaled $31 million and $33 million at March 31, 2025 and December 31, 2024, respectively. The amortized cost of PCD loans totaled $37 million and $38 million at March 31, 2025 and December 31, 2024, respectively.

Included in loans, net are direct or sales type finance leases totaling $427 million and $459 million at March 31, 2025 and December 31, 2024, respectively. The amount of income recognized from direct or sales type finance leases for the three months ended March 31, 2025 and 2024 totaled $2.9 million and $4.0 million, respectively, and is included in interest income on loans in the consolidated statements of income.

During the three months ended March 31, 2025 and 2024, the Company purchased residential loans totaling $96 million and $67 million, respectively.

At March 31, 2025 and December 31, 2024, the Company had pledged loans with a carrying value of approximately $15.6 billion and $15.8 billion, respectively, as security for FHLB advances and Federal Reserve discount window capacity.

Accrued interest receivable on loans totaled $119 million and $120 million at March 31, 2025 and December 31, 2024, respectively, and is included in other assets in the accompanying consolidated balance sheets. The amount of interest income reversed on non-accrual loans was not material for the three months ended March 31, 2025 and 2024.

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

Allowance for credit losses

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


	Three Months Ended March 31,
	2025						2024
	Commercial		Residential		Total		Commercial		Residential		Total
Beginning balance	$	211,203	$	11,950	$	223,153	$	195,058	$	7,631	$	202,689


Provision (recovery)	12,346		3,617		15,963		16,779		(974)		15,805
Charge-offs	(22,757)		—		(22,757)		(5,352)		(34)		(5,386)
Recoveries	3,388		—		3,388		4,444		4		4,448
Ending balance	$	204,180	$	15,567	$	219,747	$	210,929	$	6,627	$	217,556

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 remained at 0.92% of total loans, decreasing by $3.4 million at March 31, 2025, compared to December 31, 2024. The most significant factor leading to the decrease in the ACL for the three months ended March 31, 2025, was net charge offs, the impact of which was partially offset by an increase in specific reserves, risk rating migration and an increase in qualitative overlays, particularly related to economic uncertainty.

The following table presents gross charge-offs during the three months ended March 31, 2025, by year of origination (in thousands):



	Gross Charge-offs By Loan Origination Year
	2025		2024		2023		2022		2021		Prior to 2021		Revolving Loans		Total
CRE	$	—	$	—	$	—	$	—	$	—	$	8,512	$	—	$	8,512
C&I	—		37		249		2,888		—		311		10,760		14,245



	$	—	$	37	$	249	$	2,888	$	—	$	8,823	$	10,760	$	22,757

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


	Three Months Ended March 31,
		2025		2024
Amount related to funded portion of loans		$	15,963	$	15,805
Amount related to off-balance sheet credit exposures		(852)		(520)


Total provision for credit losses		$	15,111	$	15,285

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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.

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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


	March 31, 2025
	Amortized Cost By Origination Year												Revolving Loans
	2025		2024		2023		2022		2021		Prior				Total
CRE
Pass	$	187,100	$	933,871	$	827,637	$	1,063,797	$	520,777	$	1,744,976	$	114,844	$	5,393,002
Special mention	—		—		—		21,559		—		49,020		—		70,579
Substandard	—		—		21,851		132,051		120,118		468,495		—		742,515

Total CRE	$	187,100	$	933,871	$	849,488	$	1,217,407	$	640,895	$	2,262,491	$	114,844	$	6,206,096
C&I
Pass	$	287,535	$	1,387,144	$	1,112,264	$	955,535	$	440,535	$	1,285,772	$	2,866,496	$	8,335,281
Special mention	—		44,416		3,063		5,275		5,366		17,444		47,063		122,627
Substandard	—		375		77,294		115,313		38,370		96,657		97,253		425,262
Doubtful	—		—		—		—		—		—		1,810		1,810
Total C&I	$	287,535	$	1,431,935	$	1,192,621	$	1,076,123	$	484,271	$	1,399,873	$	3,012,622	$	8,884,980
Pinnacle - municipal finance
Pass	$	4,115	$	56,527	$	97,377	$	87,839	$	49,211	$	393,917	$	—	$	688,986

Total Pinnacle - municipal finance	$	4,115	$	56,527	$	97,377	$	87,839	$	49,211	$	393,917	$	—	$	688,986
Franchise and equipment finance
Pass	$	—	$	—	$	1,957	$	25,538	$	32,165	$	83,087	$	—	$	142,747

Substandard	—		—		—		—		—		22,132		—		22,132
Doubtful	—		—		—		—		—		216		—		216
Total Franchise and equipment finance	$	—	$	—	$	1,957	$	25,538	$	32,165	$	105,435	$	—	$	165,095






Mortgage warehouse lending
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	580,248	$	580,248



Total Mortgage warehouse lending	$	—	$	—	$	—	$	—	$	—	$	—	$	580,248	$	580,248


	December 31, 2024
	Amortized Cost By Origination Year												Revolving Loans
	2024		2023		2022		2021		2020		Prior				Total
CRE
Pass	$	921,888	$	783,342	$	1,119,032	$	609,452	$	399,806	$	1,478,261	$	114,648	$	5,426,429
Special mention	—		—		—		—		39,714		19,057		—		58,771
Substandard	—		21,853		131,816		121,005		76,590		377,728		—		728,992

Total CRE	$	921,888	$	805,195	$	1,250,848	$	730,457	$	516,110	$	1,875,046	$	114,648	$	6,214,192
C&I
Pass	$	1,514,746	$	1,182,701	$	962,478	$	470,041	$	269,508	$	1,085,412	$	2,931,044	$	8,415,930
Special mention	45,092		8,231		73,226		35,581		—		—		41,486		203,616
Substandard	—		49,681		74,001		40,108		10,529		101,028		81,798		357,145
Doubtful	—		—		—		—		—		—		6,535		6,535
Total C&I	$	1,559,838	$	1,240,613	$	1,109,705	$	545,730	$	280,037	$	1,186,440	$	3,060,863	$	8,983,226
Pinnacle - municipal finance
Pass	$	60,317	$	108,440	$	93,800	$	51,034	$	24,010	$	383,060	$	—	$	720,661



Total Pinnacle - municipal finance	$	60,317	$	108,440	$	93,800	$	51,034	$	24,010	$	383,060	$	—	$	720,661
Franchise and equipment finance
Pass	$	—	$	2,014	$	26,408	$	54,871	$	16,435	$	84,879	$	174	$	184,781

Substandard	—		—		—		1,486		275		26,614		—		28,375
Doubtful	—		—		—		—		—		321		—		321
Total Franchise and equipment finance	$	—	$	2,014	$	26,408	$	56,357	$	16,710	$	111,814	$	174	$	213,477






Mortgage warehouse lending
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	585,610	$	585,610



Total Mortgage warehouse lending	$	—	$	—	$	—	$	—	$	—	$	—	$	585,610	$	585,610

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

At March 31, 2025 and December 31, 2024, 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):


	March 31, 2025		December 31, 2024
Special mention	$	193,206	$	262,387
Substandard - accruing	962,342		894,754
Substandard - non-accruing	227,567		219,758
Doubtful	2,026		6,856
Total	$	1,385,141	$	1,383,755

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 2025. 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):


	March 31, 2025
	Amortized Cost By Origination Year
Days Past Due	2025		2024		2023		2022		2021		Prior		Total
Current	$	39,282	$	242,031	$	292,036	$	991,425	$	2,694,878	$	2,067,363	$	6,327,015
30 - 59 Days Past Due	—		6,846		2,033		7,140		16,977		16,571		49,567
60 - 89 Days Past Due	—		—		—		3,702		1,829		2,248		7,779
90 Days or More Past Due	—		129		—		2,269		6,364		12,073		20,835
	$	39,282	$	249,006	$	294,069	$	1,004,536	$	2,720,048	$	2,098,255	$	6,405,196


	December 31, 2024
	Amortized Cost By Origination Year
Days Past Due	2024		2023		2022		2021		2020		Prior		Total
Current	$	251,767	$	304,595	$	1,012,777	$	2,744,941	$	798,346	$	1,340,402	$	6,452,828
30 - 59 Days Past Due	—		3,045		4,948		15,368		474		9,140		32,975
60 - 89 Days Past Due	156		—		1,445		4,007		—		547		6,155
90 Days or More Past Due	—		—		2,486		3,457		—		11,021		16,964
	$	251,923	$	307,640	$	1,021,656	$	2,767,773	$	798,820	$	1,361,110	$	6,508,922

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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


	March 31, 2025
	Amortized Cost By Origination Year
LTV	2025		2024		2023		2022		2021		Prior		Total
Less than 61%	$	7,772	$	27,204	$	49,569	$	230,715	$	1,102,523	$	712,228	$	2,130,011
61% - 70%	6,080		32,870		39,912		258,416		750,000		496,804		1,584,082
71% - 80%	18,724		154,875		166,982		511,909		836,030		851,782		2,540,302
More than 80%	6,706		34,057		37,606		3,496		31,495		37,441		150,801
	$	39,282	$	249,006	$	294,069	$	1,004,536	$	2,720,048	$	2,098,255	$	6,405,196


	December 31, 2024
	Amortized Cost By Origination Year
LTV	2024		2023		2022		2021		2020		Prior		Total
Less than 61%	$	27,646	$	51,565	$	236,020	$	1,124,532	$	304,755	$	425,814	$	2,170,332
61% - 70%	33,033		42,636		263,959		759,931		203,423		307,052		1,610,034
71% - 80%	156,942		175,651		518,164		851,427		290,573		590,130		2,582,887
More than 80%	34,302		37,788		3,513		31,883		69		38,114		145,669
	$	251,923	$	307,640	$	1,021,656	$	2,767,773	$	798,820	$	1,361,110	$	6,508,922

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


	March 31, 2025
	Amortized Cost By Origination Year
FICO	2025		2024		2023		2022		2021		Prior		Total
760 or greater	$	28,080	$	181,456	$	218,879	$	723,705	$	2,138,731	$	1,523,403	$	4,814,254
720 - 759	9,277		45,436		44,885		158,282		361,457		298,089		917,426
719 or less or not available	1,925		22,114		30,305		122,549		219,860		276,763		673,516
	$	39,282	$	249,006	$	294,069	$	1,004,536	$	2,720,048	$	2,098,255	$	6,405,196


	December 31, 2024
	Amortized Cost By Origination Year
FICO	2024		2023		2022		2021		2020		Prior		Total
760 or greater	$	179,256	$	215,486	$	725,399	$	2,202,004	$	642,572	$	952,136	$	4,916,853
720 - 759	58,642		59,356		173,309		365,198		95,495		192,943		944,943
719 or less or not available	14,025		32,798		122,948		200,571		60,753		216,031		647,126
	$	251,923	$	307,640	$	1,021,656	$	2,767,773	$	798,820	$	1,361,110	$	6,508,922

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

Past Due and Non-Accrual Loans:

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


	March 31, 2025										December 31, 2024

	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total		Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total
CRE	$	6,162,588	$	2,119	$	1,676	$	39,713	$	6,206,096	$	6,145,386	$	35,000	$	—	$	33,806	$	6,214,192
C&I	8,795,713		35,872		5,862		47,533		8,884,980		8,911,057		16,137		25,645		30,387		8,983,226
Pinnacle - municipal finance	688,986		—		—		—		688,986		720,661		—		—		—		720,661
Franchise and equipment finance	165,095		—		—		—		165,095		213,477		—		—		—		213,477
Mortgage warehouse lending	580,248		—		—		—		580,248		585,610		—		—		—		585,610
1-4 single family residential	6,327,015		49,567		7,779		20,835		6,405,196		6,452,828		32,975		6,155		16,964		6,508,922
Government insured residential	671,393		102,373		36,322		249,210		1,059,298		691,111		108,287		46,681		225,813		1,071,892
	$	23,391,038	$	189,931	$	51,639	$	357,291	$	23,989,899	$	23,720,130	$	192,399	$	78,481	$	306,970	$	24,297,980

Included in the table above is the guaranteed portion of SBA loans past due by 90 days or more totaling $28.4 million ($22.0 million of C&I and $6.4 million of CRE) and $32.8 million at March 31, 2025 and December 31, 2024, respectively.

Loans contractually delinquent by 90 days or more and still accruing totaled $250 million and $227 million at March 31, 2025 and December 31, 2024, respectively, substantially all 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):


	March 31, 2025				December 31, 2024

	Amortized Cost		Amortized Cost With No Related Allowance		Amortized Cost		Amortized Cost With No Related Allowance
CRE	$	92,648	$	87,568	$	95,378	$	65,004
C&I	131,301		57,801		125,226		41,929

Franchise and equipment finance	5,644		4,084		6,010		4,345
1-4 single family residential	29,625		—		23,500		—
	$	259,218	$	149,453	$	250,114	$	111,278

Included in the table above is the guaranteed portion of non-accrual SBA loans totaling $33.0 million and $34.3 million at March 31, 2025 and December 31, 2024, respectively. The amount of interest income recognized on non-accrual loans was insignificant for the three months ended March 31, 2025 and 2024. 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 months ended March 31, 2025 and 2024.

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

Collateral dependent loans:

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


	March 31, 2025				December 31, 2024
	Amortized Cost		Extent to Which Secured by Collateral		Amortized Cost		Extent to Which Secured by Collateral

CRE	$	91,831	$	91,831	$	94,283	$	91,050
C&I	93,238		89,977		87,565		78,150

Franchise and equipment finance	5,644		5,429		6,010		5,689


	$	190,713	$	187,237	$	187,858	$	174,889

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. Residential loans are collateralized by residential real estate. There were no significant changes to the extent to which collateral secured collateral dependent loans during the three months ended March 31, 2025.

Foreclosure of residential real estate

The recorded investment in residential loans in the process of foreclosure was $177 million, of which $160 million was government insured at March 31, 2025, and $167 million, of which $157 million was government insured at December 31, 2024. The carrying amount of foreclosed residential real estate included in other assets in the accompanying consolidated balance sheet was insignificant at March 31, 2025 and December 31, 2024.

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):


		Three Months Ended March 31, 2025
	Term Extension			Other than Insignificant Payment Delays						Combination - Interest Rate Reduction and Term Extension	Combination - Interest Rate Reduction and Other than Insignificant Payment Delays				Combination - Term Extension and Other than Insignificant Payment Delays
		Amortized Cost		% (1)		Amortized Cost		% (1)			Amortized Cost		% (1)		Amortized Cost		% (1)		Amortized Cost		% (1)		Total
CRE		$	—	—	%	$	—	—	%		$	—	—	%	$	9,006	—	%	$	—	—	%	$	9,006
C&I		8,551		—	%	20,673		—	%		—		—	%	—		—	%	6,949		—	%	36,173


Government insured residential		6,299		1	%	—		—	%		1,953		—	%	—		—	%	—		—	%	8,252
		$	14,850			$	20,673				$	1,953			$	9,006			$	6,949			$	53,431

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025


		Three Months Ended March 31, 2024
	Term Extension					Other than Insignificant Payment Delays	Combination - Interest Rate Reduction and Term Extension				Combination - Interest Rate Reduction and Other than Insignificant Payment Delays				Combination - Term Extension and Other than Insignificant Payment Delays
		Amortized Cost		% (1)			Amortized Cost		% (1)		Amortized Cost		% (1)		Amortized Cost		% (1)		Amortized Cost		% (1)		Total
CRE		$	8,486	—	%		$	—	—	%	$	—	—	%	$	—	—	%	$	—	—	%	$	8,486
C&I		1,743		—	%		—		—	%	29		—	%	—		—	%	—		—	%	1,772


Government insured residential		14,422		1	%		—		—	%	2,623		—	%	—		—	%	—		—	%	17,045
		$	24,651				$	—			$	2,652			$	—			$	—			$	27,303

(1)Represents percentage of loans receivable in each category.

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

Three Months Ended March 31, 2025

Financial Effect

Term Extension:

C&I

Added a weighted average 0.3 year to the term of the modified loans.

Government insured residential

Added a weighted average 11.3 years to the term of the modified loans.

Other than Insignificant Payment Delays:

C&I

Provided 0.8 year of payment deferral.

Combination - Interest Rate Reduction and Term Extension:

Government insured residential

Reduced weighted average contractual interest rate from 7.4% to 7.3% and added a weighted average 1.2 years to the term of the modified loans.

Combination - Interest Rate Reduction and Other than Insignificant Payment Delays:

CRE

Reduced weighted average contractual interest rate from 4.3% to 3.5% and provided 0.7 year of payment deferral.

Combination - Term Extension and Other than Insignificant Payment Delays:

C&I

Added a weighted average 0.6 year to the term of the modified loans and provided 1.3 years of payment deferral.


						Three Months Ended March 31, 2024
						Financial Effect







Term Extension:

CRE						Added a weighted average 0.2 year to the term of the modified loans.
C&I						Added a weighted average 0.3 year to the term of the modified loans.

Government insured residential						Added a weighted average 11.2 years to the term of the modified loans.
Combination - Interest Rate Reduction and Term Extension:
C&I						Reduced weighted average contractual interest rate from 21.2% to 5.0% and added a weighted average 2.2 years to the term of the modified loans.

Government insured residential						Reduced weighted average contractual interest rate from 6.8% to 6.4% and added a weighted average 3.7 years to the term of the modified loans.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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


	March 31, 2025
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total


CRE	$	76,644	$	—	$	—	$	16,450	$	93,094
C&I	180,333		10,338		—		1,500		192,171
Franchise and equipment finance	1,560		—		—		—		1,560
1-4 single family residential	169		—		—		—		169
Government insured residential	9,018		4,684		3,275		13,202		30,179
	$	267,724	$	15,022	$	3,275	$	31,152	$	317,173


	March 31, 2024
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total
CRE	$	8,486	$	—	$	—	$	—	$	8,486
C&I	3,953		—		—		—		3,953
Franchise and equipment finance	10,425		—		—		—		10,425
1-4 single family residential	74		—		—		—		74
Government insured residential	17,123		9,001		4,439		20,974		51,537
	$	40,061	$	9,001	$	4,439	$	20,974	$	74,475

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


	Three Months Ended March 31, 2025
	Term Extension		Combination - Interest Rate Reduction and Term Extension		Total



Government insured residential	$	5,060	$	1,333	$	6,393


	Three Months Ended March 31, 2024
	Term Extension		Combination - Interest Rate Reduction and Term Extension		Total

Government insured residential	$	10,262	$	—	$	10,262

Note 5 Income Taxes

The Company’s effective income tax rate was 27.0% and 28.6% for the three months ended March 31, 2025 and 2024, respectively. The effective income tax rates differed from the statutory federal income tax rate of 21% for the three months ended March 31, 2025 and 2024 primarily due to the impact of state income taxes and interest on certain unrecognized tax benefits, partially offset by the benefit of income not subject to federal tax. The effective income tax rate for the three months ended March 31, 2024, also included the impact of a discrete item related to equity based compensation.

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.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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


	March 31, 2025						December 31, 2024

	Notional Amount		Fair Value(1)				Notional Amount		Fair Value(1)
			Asset		Liability				Asset		Liability
Derivatives designated as cash flow hedges:
Interest rate swaps	$	3,605,000	$	3,218	$	(487)	$	4,030,000	$	—	$	(4,011)
Interest rate caps purchased	100,000		2,286		—		200,000		3,395		—
Interest rate collar	125,000		21		—		125,000		—		(30)


	$	3,830,000	$	5,525	$	(487)	$	4,355,000	$	3,395	$	(4,041)

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

Derivatives designated as 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):


	Three Months Ended March 31,
		2025		2024
Location of gain (loss) reclassified from AOCI into income:
Interest expense on deposits		$	1,345	$	4,926
Interest expense on borrowings		6,041		15,712
Interest income on loans		(1,304)		(816)
		$	6,082	$	19,822

During the three months ended March 31, 2025 and 2024, 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 March 31, 2025, the amount of net gain expected to be reclassified from AOCI into earnings during the next 12 months was $8.5 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.

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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. 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 immediately in earnings. The impact on earnings related to changes in fair value of these derivatives was not material for the three months ended March 31, 2025 and 2024. The notional amount and fair value of the foreign currency forward derivative contracts were not material at March 31, 2025 and December 31, 2024.

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 interest rate 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):


	March 31, 2025						December 31, 2024

	Notional Amount		Fair Value(1)				Notional Amount		Fair Value(1)
			Asset		Liability				Asset		Liability

Pay-fixed interest rate swaps	$	3,021,027	$	49,815	$	(29,579)	$	2,767,552	$	69,802	$	(10,342)
Pay-variable interest rate swaps	3,021,027		29,579		(49,815)		2,767,552		10,342		(69,802)
Interest rate caps purchased	264,468		832		—		210,398		1,418		—
Interest rate caps sold	264,468		—		(832)		210,398		—		(1,418)
RPAs purchased	167,551		293		—		126,578		175		—
RPAs sold	430,621		—		(336)		424,424		—		(296)


	$	7,169,162	$	80,519	$	(80,562)	$	6,506,902	$	81,737	$	(81,858)

(1)Fair values of these derivatives are included in other assets and other liabilities in the consolidated balance sheets.

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.

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

Master netting agreements

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


	March 31, 2025

			Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet
	Gross Amounts Recognized						Derivative Instruments		Collateral Pledged		Net Amount
Derivative assets	$	56,172	$	—	$	56,172	$	(15,021)	$	(41,130)	$	21
Derivative liabilities	(30,066)		—		(30,066)		15,021		15,045		—
	$	26,106	$	—	$	26,106	$	—	$	(26,085)	$	21


	December 31, 2024

			Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet
	Gross Amounts Recognized						Derivative Instruments		Collateral Pledged		Net Amount
Derivative assets	$	74,615	$	—	$	74,615	$	(11,161)	$	(63,376)	$	78
Derivative liabilities	(14,383)		—		(14,383)		11,161		3,222		—
	$	60,232	$	—	$	60,232	$	—	$	(60,154)	$	78

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):


	Three Months Ended March 31,
	2025						2024
	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized gains (losses) on investment securities available for sale:
Net unrealized holding gains arising during the period	$	68,469	$	(17,802)	$	50,667	$	36,400	$	(9,464)	$	26,936
Amounts reclassified to gain (loss) on investment securities available for sale, net	(825)		214		(611)		28		(7)		21
Net change in unrealized gains (losses) on investment securities available for sale	67,644		(17,588)		50,056		36,428		(9,471)		26,957
Unrealized gains (losses) on derivative instruments:
Net unrealized holding gains arising during the period	3,718		(967)		2,751		28,654		(7,450)		21,204
Amounts reclassified to interest expense on deposits	(1,345)		350		(995)		(4,926)		1,281		(3,645)
Amounts reclassified to interest expense on borrowings	(6,041)		1,571		(4,470)		(15,712)		4,085		(11,627)
Amounts reclassified to interest income on loans	1,304		(339)		965		816		(212)		604

Net change in unrealized gains (losses) on derivative instruments	(2,364)		615		(1,749)		8,832		(2,296)		6,536
Other comprehensive income	$	65,280	$	(16,973)	$	48,307	$	45,260	$	(11,767)	$	33,493

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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



	Unrealized Gain on Investment Securities Available for Sale		Unrealized Gain (Loss) on Derivative Instruments		Total





Balance at December 31, 2024	$	(300,161)	$	15,620	$	(284,541)
Other comprehensive income (loss)	50,056		(1,749)		48,307
Balance at March 31, 2025	$	(250,105)	$	13,871	$	(236,234)

Balance at December 31, 2023	$	(395,746)	$	38,325	$	(357,421)
Other comprehensive income	26,957		6,536		33,493
Balance at March 31, 2024	$	(368,789)	$	44,861	$	(323,928)

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 include U.S. Government agency securities, U.S. Government agency and sponsored enterprise MBS, non-mortgage asset-backed securities, single family real estate-backed securities, private label residential MBS and CMOs, private label commercial MBS, collateralized loan obligations and state and municipal obligations. 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.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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


	March 31, 2025
	Level 1		Level 2		Total
Investment securities available for sale:
U.S. Treasury securities	$	206,753	$	—	$	206,753
U.S. Government agency and sponsored enterprise residential MBS	—		2,724,568		2,724,568
U.S. Government agency and sponsored enterprise commercial MBS	—		502,527		502,527
Private label residential MBS and CMOs	—		2,285,885		2,285,885
Private label commercial MBS	—		1,770,452		1,770,452
Single family real estate-backed securities	—		276,953		276,953
Collateralized loan obligations	—		1,057,706		1,057,706
Non-mortgage asset-backed securities	—		92,260		92,260
State and municipal obligations	—		104,603		104,603
SBA securities	—		69,157		69,157

Marketable equity securities	8,945		—		8,945
Derivative assets	—		86,044		86,044
Total assets at fair value	$	215,698	$	8,970,155	$	9,185,853
Derivative liabilities	$	—	$	(81,049)	$	(81,049)
Total liabilities at fair value	$	—	$	(81,049)	$	(81,049)


	December 31, 2024

	Level 1		Level 2		Total
Investment securities available for sale:
U.S. Treasury securities	$	202,952	$	—	$	202,952
U.S. Government agency and sponsored enterprise residential MBS	—		2,649,690		2,649,690
U.S. Government agency and sponsored enterprise commercial MBS	—		495,753		495,753
Private label residential MBS and CMOs	—		2,238,046		2,238,046
Private label commercial MBS	—		1,784,029		1,784,029
Single family real estate-backed securities	—		327,081		327,081
Collateralized loan obligations	—		1,132,699		1,132,699
Non-mortgage asset-backed securities	—		94,454		94,454
State and municipal obligations	—		104,010		104,010
SBA securities	—		72,702		72,702

Marketable equity securities	28,828		—		28,828
Derivative assets	—		85,132		85,132
Total assets at fair value	$	231,780	$	8,983,596	$	9,215,376
Derivative liabilities	$	—	$	(85,899)	$	(85,899)
Total liabilities at fair value	$	—	$	(85,899)	$	(85,899)

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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):


	March 31, 2025		December 31, 2024

Collateral dependent loans	$	85,547	$	165,951

OREO	—		2,577

	$	85,547	$	168,528

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):


		March 31, 2025				December 31, 2024

	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Cash and cash equivalents	1	$	443,745	$	443,745	$	491,116	$	491,116
Investment securities	1/2	$	9,099,809	$	9,099,809	$	9,130,244	$	9,130,244
Non-marketable equity securities	2	$	181,359	$	181,359	$	206,297	$	206,297

Loans, net	3	$	23,770,152	$	22,949,605	$	24,074,827	$	23,053,011
Derivative assets	2	$	86,044	$	86,044	$	85,132	$	85,132
Liabilities:
Demand, savings and money market deposits	2	$	23,634,417	$	23,634,417	$	23,564,414	$	23,564,414
Time deposits	2	$	4,423,408	$	4,408,166	$	4,301,289	$	4,279,475

FHLB advances	2	$	2,405,000	$	2,405,074	$	2,930,000	$	2,929,896
Notes and other borrowings	2	$	709,091	$	701,434	$	708,553	$	695,457
Derivative liabilities	2	$	81,049	$	81,049	$	85,899	$	85,899

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.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

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, so 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 March 31, 2025 were as follows (in thousands):


Commitments to fund loans	$	231,640

Unfunded commitments under lines of credit	4,897,110
Commercial and standby letters of credit	195,495
	$	5,324,245

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):


	Three Months Ended March 31,
	2025				2024
	Average Balance		Average Rate Paid(1)		Average Balance		Average Rate Paid(1)
Demand deposits:
Non-interest bearing	$	7,413,117	—	%	$	6,560,926	—	%
Interest bearing	4,811,826		3.36	%	3,584,363		3.76	%
Savings and money market	10,833,734		3.44	%	11,234,259		4.25	%
Time	4,326,750		3.99	%	5,231,178		4.45	%
	$	27,385,427	2.58	%	$	26,610,726	3.18	%

(1)Annualized.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

March 31, 2025

The following table presents maturities of time deposits as of March 31, 2025 (in thousands):


Maturing in:
2025	$	3,838,356
2026	582,505
2027	1,524
2028	282
2029	258
Thereafter	483
	$	4,423,408

Included in deposits are public funds deposits of $3.1 billion, at both March 31, 2025 and December 31, 2024, and brokered deposits of $4.7 billion and $5.2 billion at March 31, 2025 and December 31, 2024, respectively.

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


	Three Months Ended March 31,
	2025		2024
Interest bearing demand	$	39,893	$	33,507
Savings and money market	91,779		118,639
Time	42,538		57,852
	$	174,210	$	209,998

Certain of our depositors participate in various customer rebate and commission programs. During the three months ended March 31, 2025 and 2024, costs related to those programs that were correlated with the balance in the related deposit accounts totaled $13.2 million and $12.7 million, respectively. These expenses are included in "other non-interest expense" in the accompanying consolidated statements of income.

Item 2. 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, 2025 and should be read in conjunction with the consolidated financial statements and notes hereto included in this Quarterly Report on Form 10-Q and BKU's 2024 Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report on Form 10-K").

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 2024 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

Net Income for the three months ended March 31, 2025 was $58.5 million, or $0.78 per diluted share, compared to $48.0 million, or $0.64 per diluted share for the three months ended March 31, 2024. For the three months ended March 31, 2025, the annualized return on average stockholders' equity was 8.2% and annualized return on average assets was 0.68%.

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 asset quality ratios, including the ratios of non-performing loans to total loans and non-performing assets to total assets; (v) trends in criticized and classified assets; and (vi) and portfolio delinquency and charge-off trends. We analyze these ratios and trends against our own historical performance, our expected performance, our risk appetite and the financial condition and performance of comparable financial institutions.

Near-term strategic priorities focused on improving the Company's core profitability include:

•Improve the Bank's funding profile by growing core deposits and paying down higher cost funding;

•Improve the asset mix by re-positioning the balance sheet away from typically lower yielding transactional business such as residential mortgages and organically growing core commercial loans;

•Improve the net interest margin, largely a function of more profitable balance sheet composition;

•Maintaining robust liquidity and capital;

•Managing credit;

•Managing the rate of growth in operating expenses.

Quarterly Highlights

•The Company's funding profile continued to improve. NIDDA grew by $453 million, or 5.9%, for the three months ended March 31, 2025, to 29% of total deposits, up from 27% at December 31, 2024. NIDDA grew by $830 million compared to March 31, 2024, one year ago.

•Non-brokered deposits grew by $719 million, or 3.2%, for the three months ended March 31, 2025, while total deposits grew by $192 million.

•Wholesale funding, including FHLB advances and brokered deposits, declined by $1.1 billion for the three months ended March 31, 2025.

•Total loans declined by $308 million for the three months ended March 31, 2025. The core C&I and CRE categories declined by $106 million. Commercial growth is typically seasonally lower in the first quarter, and continued to be impacted by a high level of unscheduled payoffs. Consistent with our balance sheet strategy, the residential, franchise, equipment and municipal finance portfolios declined by a combined $196 million.

•The loan to deposit ratio declined to 85.5% at March 31, 2025, from 87.2% at December 31, 2024.

•The net interest margin, calculated on a tax-equivalent basis, was 2.81% for the three months ended March 31, 2025 compared to 2.84% for the immediately preceding quarter, reflecting the impact of declining rates on a modestly asset sensitive balance sheet and the expiration of certain cash flow hedges.

•The average cost of total deposits declined by 0.14% to 2.58% for the three months ended March 31, 2025, from 2.72% for the immediately preceding quarter ended December 31, 2024. The spot APY of total deposits declined to 2.52% at March 31, 2025 from 2.63% at December 31, 2024.

•The annualized net charge-off ratio for the three months ended March 31, 2025, was 0.33%. The net charge-off ratio for the trailing twelve months was 0.24%. The NPA ratio was 0.76%, including 0.09% related to the guaranteed portion of non-performing SBA loans at March 31, 2025, compared to 0.73% including 0.10% related to the guaranteed portion of non-accrual SBA loans at December 31, 2024.

•The ratio of the ACL to total loans was 0.92% at March 31, 2025, consistent with the prior quarter-end. The ratio of the ACL to non-performing loans was 84.58%, The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.34% at March 31, 2025 and the ACL to loans ratio for CRE office loans was 1.99%. The provision for credit losses was $15.1 million for the three months ended March 31, 2025 compared to $11.0 million for the preceding quarter.

•Our commercial real estate exposure totaled 26% of loans and 173% of the Bank's total risk based capital at March 31, 2025. By comparison, based on call report data as of December 31, 2024 for banks with between $10 billion and $100 billion in assets, the median level of CRE to total loans was 34% and the median level of CRE to total risk based capital was 218%.

•Our capital position is robust, At March 31, 2025, CET1 was 12.2% and pro-forma CET1, including accumulated other comprehensive income, was 11.2%. The ratio of tangible common equity/tangible assets increased to 8.11%.

•Book value and tangible book value per common share continued to accrete, to $38.51 and $37.48, respectively, at March 31, 2025, compared to $37.65 and $36.61, respectively, at December 31, 2024, and $35.31 and $34.27, respectively, at March 31, 2024.

•The Company announced an increase of $0.02 per share in its common stock dividend for the quarter ended March 31, 2025, to $0.31 per common share, a 7% increase from the previous level of $0.29 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,
	2025						2024						2024
	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	$	23,933,938	$	324,113	5.48	%	$	24,152,602	$	339,725	5.60	%	$	24,337,440	$	350,441	5.78	%
Investment securities (3)	9,104,228		114,590		5.07	%	9,236,863		122,648		5.31	%	8,952,453		125,025		5.59	%
Other interest earning assets	788,547		8,436		4.33	%	785,947		9,300		4.71	%	763,460		10,038		5.29	%
Total interest earning assets	33,826,713		447,139		5.34	%	34,175,412		471,673		5.50	%	34,053,353		485,504		5.72	%
Allowance for credit losses	(228,158)						(235,211)						(206,747)
Non-interest earning assets	1,376,904						1,405,129						1,589,333
Total assets	$	34,975,459					$	35,345,330					$	35,435,939
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits	$	4,811,826	$	39,893	3.36	%	$	5,045,860	$	46,759	3.69	%	$	3,584,363	$	33,507	3.76	%
Savings and money market deposits	10,833,734		91,779		3.44	%	10,462,295		93,912		3.57	%	11,234,259		118,639		4.25	%
Time deposits	4,326,750		42,538		3.99	%	4,529,737		48,182		4.23	%	5,231,178		57,852		4.45	%
Total interest bearing deposits	19,972,310		174,210		3.54	%	20,037,892		188,853		3.75	%	20,049,800		209,998		4.21	%

FHLB advances	2,991,389		27,206		3.69	%	3,200,652		30,750		3.82	%	4,570,220		47,496		4.18	%
Notes and other borrowings	709,037		9,134		5.15	%	708,689		9,126		5.15	%	709,017		9,123		5.15	%
Total interest bearing liabilities	23,672,736		210,550		3.61	%	23,947,233		228,729		3.80	%	25,329,037		266,617		4.23	%
Non-interest bearing demand deposits	7,413,117						7,557,267						6,560,926
Other non-interest bearing liabilities	1,004,917						995,789						906,266
Total liabilities	32,090,770						32,500,289						32,796,229
Stockholders' equity	2,884,689						2,845,041						2,639,710
Total liabilities and stockholders' equity	$	34,975,459					$	35,345,330					$	35,435,939
Net interest income			$	236,589					$	242,944					$	218,887
Interest rate spread					1.73	%					1.70	%					1.49	%
Net interest margin					2.81	%					2.84	%					2.57	%

(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, 2025, $2.9 million for the three months ended December 31, 2024, and $3.2 million for the three months ended March 31, 2024. The tax-equivalent adjustment for tax-exempt investment securities was $0.7 million for both the three months ended March 31, 2025 and December 31, 2024, and $0.8 million for the three months ended March 31, 2024.

(2)Annualized.

(3)At fair value.

Three months ended March 31, 2025 compared to the three months ended December 31, 2024

Net interest income, calculated on a tax-equivalent basis, was $236.6 million for the three months ended March 31, 2025, compared to $242.9 million for the three months ended December 31, 2024, a decrease of $6.3 million. The decrease was comprised of decreases in tax-equivalent interest income and interest expense of $24.5 million and $18.2 million, respectively. The quarter-over-quarter decline in interest income related to lower yields on interest earning assets as coupon rates on floating rate instruments reset down, and to a lesser extent, the lower average balance of interest earning assets. The decline in interest expense related to both a lower average cost of funds and lower average balance of interest bearing liabilities.

The net interest margin, calculated on a tax-equivalent basis, was 2.81% for the three months ended March 31, 2025, compared to 2.84% for the three months ended December 31, 2024. The decline in margin reflects the impact of a declining rate environment on a modestly asset sensitive balance sheet and expiration of certain cash flow hedges, which negatively impacted the net interest margin by 0.03%. Factors impacting the net interest margin for the three months ended March 31, 2025, compared to the three months ended December 31, 2024, included:

•The average rate paid on interest bearing deposits declined to 3.54% for the three months ended March 31, 2025, from 3.75% for the three months ended December 31, 2024. This decline reflected continued initiatives taken to lower rates paid on deposits as short-term market rates declined, including the re-pricing of time deposits.

•The average rate paid on FHLB advances declined to 3.69% for the three months ended March 31, 2025, from 3.82% for the three months ended December 31, 2024, primarily due to repayment of higher rate short-term advances partially offset by expiration of cash flow hedges.

•The tax-equivalent yield on loans declined to 5.48% for the three months ended March 31, 2025, from 5.60% for the three months ended December 31, 2024. The primary driver of this decrease was coupon rate resets on variable rate loans.

•The tax-equivalent yield on investment securities declined to 5.07% for the three months ended March 31, 2025, from 5.31% for the three months ended December 31, 2024. This decrease resulted primarily from coupon rate resets on variable rate securities.

Three months ended March 31, 2025 compared to the three months ended March 31, 2024

Net interest income, calculated on a tax-equivalent basis, was $236.6 million for the three months ended March 31, 2025, compared to $218.9 million for the three months ended March 31, 2024, an increase of $17.7 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $38.4 million and $56.1 million, respectively.

The decrease in tax-equivalent interest income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was attributable to a decrease in the yields on interest earning assets. The decrease in interest expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was attributable to decreases in both the average balance and cost of interest bearing liabilities.

The net interest margin, calculated on a tax-equivalent basis, increased to 2.81% for the three months ended March 31, 2025, from 2.57% for the three months ended March 31, 2024. The increase in the net interest margin for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily a result of balance sheet repositioning, particularly an improved funding mix. For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, average NIDDA grew by $852 million while average FHLB advances declined by $1.6 billion. Average NIDDA was 27.1% of average total deposits for the three months ended March 31, 2025, up from 24.7% for the three months ended March 31, 2024. 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 C&I and CRE loans increased to 62.8% of average loans from 61.9% of average loans, while residential loans declined to 31.4% of average loans from 31.9% of average loans.

Decreased yields on average interest earning assets as well as the decrease in the cost of interest bearing liabilities were primarily attributable to the declining interest rate environment.

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,
		2025		2024
Amount related to funded portion of loans		$	15,963	$	15,805
Amount related to off-balance sheet credit exposures		(852)		(520)



Total provision for credit losses		$	15,111	$	15,285

The most significant factors impacting the provision for credit losses for the three months ended March 31, 2025 included an increase in certain specific reserves and risk rating migration, and an increase in qualitative loss factors, particularly related to economic uncertainty.

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. In the current environment, changes in economic conditions could be particularly impactful.

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,
		2025		2024
Deposit service charges and fees		$	5,235	$	5,313





Lease financing		4,313		11,440
Other non-interest income		12,722		10,124
Total non-interest income		$	22,270	$	26,877

The decrease in lease financing revenue for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was attributable to the continuing decline in the size of the operating lease equipment portfolio and lower residual income. Expense related to the depreciation of operating lease equipment reflected a corresponding decline over these comparative periods.

Non-Interest Expense

The following table presents components of non-interest expense for the periods indicated (in thousands):


	Three Months Ended March 31,
		2025		2024
Employee compensation and benefits		$	82,746	$	75,920
Occupancy and equipment		11,343		10,569
Deposit insurance expense		7,227		13,530

Technology		22,780		20,315
Depreciation of operating lease equipment		4,009		9,213
Other non-interest expense		32,121		29,693
Total non-interest expense		$	160,226	$	159,240

The increase in compensation was primarily attributable to increased head count and routine salary increases as well as increases in variable compensation.

The decrease in deposit insurance expense was primarily attributable to a $5.2 million FDIC special assessment incurred during the three months ended March 31, 2024.

The decline in depreciation of operating lease equipment for the three months ended March 31, 2025 was primarily attributable to the continued decline in the size of the operating lease equipment portfolio as discussed above.

Analysis of Financial Condition

We continued to improve our funding profile over the three months ended March 31, 2025. NIDAA grew by $453 million to 29% of total deposits and non-brokered deposits grew by $719 million. Wholesale funding, including FHLB advances and brokered deposits, declined by $1.1 billion. On the asset side of the balance sheet, total loans declined by $308 million. While production was in line with expectations, core C&I and CRE segments decreased by $106 million, partly due to seasonality as well as a continued high level of unscheduled payoffs. Consistent with our balance sheet transformation strategy, lower yielding residential loans declined by $116 million, and franchise, equipment, and municipal finance declined by a combined $80 million. The loan-to-deposit ratio improved to 85.5% at March 31, 2025 from 87.2% at December 31, 2024.

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, 2025				December 31, 2024
	Amortized Cost		Carrying Value		Amortized Cost		Carrying Value
U.S. Treasury securities	$	214,813	$	206,753	$	214,796	$	202,952
U.S. Government agency and sponsored enterprise residential MBS	2,735,833		2,724,568		2,672,554		2,649,690
U.S. Government agency and sponsored enterprise commercial MBS	555,695		502,527		557,489		495,753
Private label residential MBS and CMOs	2,509,808		2,285,885		2,491,033		2,238,046
Private label commercial MBS	1,799,267		1,770,452		1,822,881		1,784,029
Single family real estate-backed securities	282,569		276,953		335,047		327,081
Collateralized loan obligations	1,055,659		1,057,706		1,131,088		1,132,699
Non-mortgage asset-backed securities	94,249		92,260		96,865		94,454
State and municipal obligations	109,805		104,603		110,388		104,010
SBA securities	71,147		69,157		74,900		72,702


	$	9,428,845	9,090,864		$	9,507,041	9,101,416
Marketable equity securities			8,945				28,828
			$	9,099,809			$	9,130,244

Our investment strategy is focused on ensuring adequate liquidity, maintaining a suitable balance of high credit quality, diverse assets, managing interest rate risk, and generating acceptable returns given our established risk parameters. We have sought to maintain liquidity by investing a significant portion of the portfolio in high quality liquid securities including U.S. Treasury and U.S. Government Agency and sponsored enterprise securities. We have also invested in highly-rated structured products, including private-label commercial and residential MBS, collateralized loan obligations, single family real estate-backed securities and non-mortgage asset-backed securities that, while somewhat less liquid, are generally pledgeable at either the FHLB or the FRB and provide us with attractive yields. Investment grade municipal securities provide liquidity and attractive tax-equivalent yields. We remain committed to keeping the duration of our securities portfolio short; relatively short effective portfolio duration helps mitigate interest rate risk. The estimated effective duration of the investment portfolio was 1.79 years and the estimated weighted average life of the portfolio was 5.3 years as of March 31, 2025. Approximately 70% of the securities portfolio was floating rate at March 31, 2025.

The investment securities AFS portfolio was in a net unrealized loss position of $338.0 million at March 31, 2025, an improvement of $67.6 million compared to a net unrealized loss position of $405.6 million at December 31, 2024. Net unrealized losses at March 31, 2025 included $16.5 million of gross unrealized gains and $354.5 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at March 31, 2025 had an aggregate fair value of $5.5 billion. The unrealized losses resulted primarily from a sustained period of higher interest rates, and in some cases, wider spreads compared to the levels at which securities were purchased. None of the unrealized losses were attributable to credit loss impairments.

The external ratings distribution of our AFS securities portfolio at the dates indicated is depicted in the charts below:


March 31, 2025						December 31, 2024

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 do not intend to sell securities in significant unrealized loss positions at March 31, 2025. Based on an assessment of our liquidity position and internal and regulatory guidelines for permissible investments and concentrations, it is not more likely than not that we will be required to sell securities in significant unrealized loss positions prior to recovery of amortized cost basis, which may be at maturity. The substantial majority of our investment securities are eligible to be pledged at either the FHLB or FRB. We have not sold, and do not anticipate the need to sell, securities in unrealized loss positions to generate liquidity.

We have implemented a robust credit stress testing framework with respect to our non-agency securities. The following table presents subordination levels and average internal stress scenario losses for select non-agency portfolio segments at March 31, 2025:


				Subordination			Weighted Average Stress Scenario Loss
	Rating	Percent of Total		Minimum	Maximum	Average
Private label CMBS	AAA	84	%	31.1	96.7	48.8	7.8
	AA	12	%	35.1	75.9	48.1	7.5
	A	4	%	29.4	60.5	41.2	10.0
Weighted average		100	%	31.5	92.9	48.4	7.8

CLOs	AAA	86	%	39.1	97.2	45.5	15.7
	AA	13	%	30.9	34.3	32.3	15.4
	A	1	%	39.3	39.3	39.3	24.7
Weighted average		100	%	38.1	88.1	43.6	15.8

Private label residential MBS and CMOs	AAA	91	%	2.9	95.5	17.9	2.1
	AA	5	%	21.4	41.0	29.5	6.5
	A	1	%	21.3	21.3	21.3	10.4
	NR	3	%	19.8	20.0	19.9	13.6
Weighted average		100	%	4.6	89.4	18.6	2.9

The high credit quality of these securities and adequacy of subordination to cover projected collateral losses supports the conclusion that there is no credit loss impairment. The scenario used to project stress scenario losses is generally calibrated to the level of stress experienced in the Great Financial Crisis. For further discussion of our analysis of impaired investment securities AFS for credit loss impairment, see Note 3 to the consolidated financial statements.

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, 2025. 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	—	%	4.34	%	2.54	%	—	%	3.51	%
U.S. Government agency and sponsored enterprise residential MBS	5.09	%	5.34	%	5.28	%	5.37	%	5.29	%
U.S. Government agency and sponsored enterprise commercial MBS	4.37	%	4.78	%	2.83	%	2.07	%	3.41	%
Private label residential MBS and CMOs	4.11	%	4.32	%	3.78	%	4.03	%	4.07	%
Private label commercial MBS	5.65	%	6.06	%	2.00	%	3.27	%	5.75	%
Single family real estate-backed securities	5.71	%	4.06	%	—	%	—	%	4.52	%
Collateralized loan obligations	6.20	%	6.37	%	6.16	%	—	%	6.28	%
Non-mortgage asset-backed securities	3.10	%	5.38	%	2.68	%	—	%	5.18	%
State and municipal obligations	2.26	%	4.35	%	4.07	%	—	%	4.24	%
SBA securities	5.34	%	5.32	%	5.24	%	4.98	%	5.30	%

	5.06	%	5.40	%	4.38	%	4.26	%	5.01	%

Loans

The following table shows the composition of the loan portfolio at the dates indicated (dollars in thousands):


	March 31, 2025				December 31, 2024
	Amortized Cost		Percent of Total Loans		Amortized Cost		Percent of Total Loans
Non-owner occupied commercial real estate	$	5,602,711	23.4	%	$	5,652,203	23.3	%
Construction and land	603,385		2.5	%	561,989		2.3	%
Owner occupied commercial real estate	1,967,984		8.2	%	1,941,004		8.0	%
Commercial and industrial	6,916,996		28.8	%	7,042,222		28.9	%
Total Core C&I and CRE	15,091,076		62.9	%	15,197,418		62.5	%
Pinnacle - municipal finance	688,986		2.9	%	720,661		3.0	%
Franchise and equipment finance	165,095		0.7	%	213,477		0.9	%
Mortgage warehouse lending	580,248		2.4	%	585,610		2.4	%
Total commercial	16,525,405		68.9	%	16,717,166		68.8	%

1-4 single family residential	6,405,196		26.7	%	6,508,922		26.8	%
Government insured residential	1,059,298		4.4	%	1,071,892		4.4	%
Total residential	7,464,494		31.1	%	7,580,814		31.2	%
Total loans	23,989,899		100.0	%	24,297,980		100.0	%
Allowance for credit losses	(219,747)				(223,153)
Loans, net	$	23,770,152			$	24,074,827

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, a smaller amount of construction loans, SBA loans, mortgage warehouse lines of credit, municipal loans and leases originated by Pinnacle and franchise and equipment finance loans and leases originated by Bridge.

The following charts present the distribution of the commercial loan portfolio at the dates indicated (dollars in millions):


March 31, 2025						December 31, 2024

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. Overall CRE exposure is modest in comparison to peer banks as presented in the charts below:


CRE / Total Loans(1)(2)						CRE / Total Risk Based Capital(1)(2)

(1)BKU information as of March 31, 2025

(2)CRE peer median information based on December 31, 2024 Call Report data for banks with total assets between $10 billion and $100 billion

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, 2025
	Amortized Cost		Percent of Total CRE		FL		New York Tri-State		Other		Weighted Average DSCR	Weighted Average LTV
Office	$	1,716,831	28	%	57	%	23	%	20	%	1.58	64.5	%
Warehouse/Industrial	1,304,809		21	%	52	%	8	%	40	%	1.81	46.5	%
Multifamily	822,206		13	%	52	%	48	%	—	%	2.01	49.8	%
Retail	1,188,614		19	%	48	%	28	%	24	%	1.80	58.2	%
Hotel	480,340		8	%	78	%	10	%	12	%	1.84	44.7	%
Construction and Land	603,385		10	%	31	%	46	%	23	%	N/A	N/A
Other	89,911		1	%	75	%	11	%	14	%	2.61	45.7	%
	$	6,206,096	100	%	53	%	25	%	22	%	1.78	54.9	%


	December 31, 2024
	Amortized Cost		Percent of Total CRE		FL		New York Tri-State		Other		Weighted Average DSCR	Weighted Average LTV
Office	$	1,769,344	28	%	57	%	23	%	20	%	1.57	65.2	%
Warehouse/Industrial	1,374,738		22	%	54	%	8	%	38	%	1.83	47.2	%
Multifamily	838,341		13	%	51	%	49	%	—	%	2.01	50.1	%
Retail	1,098,314		19	%	49	%	29	%	22	%	1.73	57.3	%
Hotel	482,378		8	%	79	%	9	%	12	%	1.84	44.7	%
Construction and Land	561,989		9	%	36	%	47	%	17	%	N/A	N/A
Other	89,088		1	%	74	%	11	%	15	%	1.93	46.9	%
	$	6,214,192	100	%	54	%	25	%	21	%	1.76	55.0	%

The following table presents weighted average DSCR and weighted average LTV for the Florida and New York tri-state CRE portfolios, by property type, at March 31, 2025:


	Florida			NY Tri-State
	Weighted Average DSCR	Weighted Average LTV		Weighted Average DSCR	Weighted Average LTV
Office	1.59	63.9	%	1.67	60.3	%
Warehouse/Industrial	1.96	44.4	%	1.83	34.3	%
Multifamily	2.60	43.6	%	1.36	56.5	%
Retail	1.93	55.7	%	1.47	59.0	%
Hotel	1.85	44.9	%	1.91	33.0	%
Other	2.99	43.0	%	1.20	62.9	%
	1.93	52.6	%	1.54	56.1	%

Geographic distribution in the tables above is based on location of the underlying collateral property. LTVs and DSCRs are based on the most recent available information; if current appraisals are not available, LTVs are adjusted by our models based on current and forecasted sub-market dynamics. DSCRs are calculated based on current contractually required payments, which in some cases may be interest only and on current levels of operating cash flows. DSCR calculations do not include pro-forma rental payments on in-place leases that are currently in initial rent abatement periods.

Included in New York tri-state multifamily loans in the tables above is approximately $113 million of rent regulated exposure as of March 31, 2025.

The following table presents information about CRE loans maturing in the next 12 months by property type at March 31, 2025 (dollars in thousands). 14% of the total CRE portfolio, with a weighted average coupon rate of 4.41%, is fixed rate to the borrower and maturing in the next 12 months.


	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	$	667,187	39	%	$	383,170	22	%
Warehouse/Industrial	161,062		12	%	113,345		9	%
Multifamily	229,283		28	%	84,188		10	%
Retail	194,968		16	%	150,317		13	%
Hotel	42,854		9	%	35,309		7	%
Construction and Land	216,948		36	%	41,692		7	%
Other	39,105		43	%	39,105		43	%
	$	1,551,407	25	%	$	847,126	14	%

The following table presents scheduled contractual maturities of the CRE portfolio by property type at March 31, 2025 (in thousands):


	2025		2026		2027		2028		2029		Thereafter		Total
Office	$	468,900	$	486,239	$	297,833	$	145,024	$	269,518	$	49,317	$	1,716,831
Warehouse/Industrial	152,413		402,047		333,294		154,724		163,826		98,505		1,304,809
Multifamily	196,295		143,318		151,167		104,888		138,683		87,855		822,206
Retail	175,439		277,332		207,748		247,177		126,350		154,568		1,188,614
Hotel	42,853		238,633		30,622		61,218		54,532		52,482		480,340
Construction and Land	158,397		197,422		172,980		—		22,309		52,277		603,385
Other	12,729		26,382		19,034		1,363		10,331		20,072		89,911
	$	1,207,026	$	1,771,373	$	1,212,678	$	714,394	$	785,549	$	515,076	$	6,206,096

The office segment totaled $1.7 billion at March 31, 2025. Medical office comprised approximately $347 million or 20% of the total office portfolio. The following charts present the sub-market geographic distribution of the Florida and NY tri-state office portfolios at March 31, 2025:


NY Tri-State by Sub-Market						Florida by Sub-Market

The New York tri-state market encompasses approximately 23% of the office segment, with $168 million of exposure in Manhattan. As of March 31, 2025, the Manhattan office portfolio was approximately 95% occupied with 9% rent rollover expected in the next 12 months. The Florida office portfolio is predominantly suburban.

Office loans not secured by properties in Florida or the New York tri-state area comprised 20%, or approximately $335 million of the segment, and exhibited no particular geographic concentration. Estimated rent rollover of the total office portfolio in the next 12 months is approximately 9%; 11% for Florida and 8% for the New York tri-state area.

The construction portfolio includes an additional $87 million in office related exposure, $84 million of which is in New York.

Non-performing loans included $64 million of office exposure, including office exposure of $31 million in the construction portfolio, at March 31, 2025. 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, 2025 (dollars in thousands):



	Amortized Cost(1)		Percent of Total
Finance and Insurance	$	1,457,928	16.4	%
Health Care and Social Assistance	800,543		9.0	%
Manufacturing	795,468		9.0	%
Utilities	791,938		8.9	%
Wholesale Trade	651,064		7.3	%
Educational Services	639,056		7.2	%
Information	580,146		6.5	%
Transportation and Warehousing	551,290		6.2	%
Real Estate and Rental and Leasing	481,297		5.4	%
Construction	474,866		5.3	%
Retail Trade	337,731		3.8	%
Professional, Scientific, and Technical Services	335,465		3.8	%
Public Administration	237,748		2.7	%
Other Services (except Public Administration)	234,914		2.6	%
Arts, Entertainment, and Recreation	176,101		2.0	%
Accommodation and Food Services	147,247		1.7	%
Administrative and Support and Waste Management	111,632		1.3	%
Other	80,546		0.9	%
	$	8,884,980	100.0	%

(1) Includes $2.0 billion of owner occupied real estate.

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 do not currently expect significant new loan originations in these segments.

Residential mortgages

The following table shows the composition of residential loans at the dates indicated (in thousands):


	March 31, 2025		December 31, 2024

1-4 single family residential	$	6,405,196	$	6,508,922
Government insured residential	1,059,298		1,071,892

	$	7,464,494	$	7,580,814

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, 2025, the majority of the 1-4 single family residential loan portfolio, excluding government insured residential loans, was owner-occupied, with 80% primary residence, 5% second homes and 15% investor-owned properties.

The Company acquires non-performing FHA and VA insured mortgages from third party servicers 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 Company and the servicer share in the economics of the sale of these loans into new securitizations. The balance of Buyout Loans totaled $1.0 billion at March 31, 2025. The Company is not the servicer of these loans.

The following charts present the distribution of the 1-4 single family residential mortgage portfolio by product type at the dates indicated:


March 31, 2025						December 31, 2024

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, 2025				December 31, 2024

	Amortized Cost		Percent of Total		Amortized Cost		Percent of Total
California	$	1,913,592	29.9	%	$	1,960,873	30.1	%
New York	1,275,891		19.9	%	1,282,197		19.7	%
Florida	461,705		7.2	%	473,556		7.3	%
Illinois	322,381		5.0	%	327,698		5.0	%
Virginia	307,514		4.8	%	308,784		4.7	%
Others	2,124,113		33.2	%	2,155,814		33.2	%
	$	6,405,196	100.0	%	$	6,508,922	100.0	%

Operating lease equipment, net

Operating lease equipment, net totaled $219 million and $224 million at March 31, 2025 and December 31, 2024, respectively, consisting primarily of railcars and other transportation equipment. We expect the balance of operating lease equipment to continue to decline as this product offering is no longer considered core to our business strategy.

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, 2025						December 31, 2024

	CRE		Total Commercial		Percent of Commercial Loans			CRE		Total Commercial		Percent of Commercial Loans
Pass	$	5,393,002	$	15,140,264	91.6	%		$	5,426,429	$	15,333,411	91.7	%
Special mention	70,579		193,206		1.2	%		58,771		262,387		1.6	%
Substandard accruing	649,867		962,342		5.8	%		633,614		894,754		5.4	%
Substandard non-accruing	92,648		227,567		1.4	%		95,378		219,758		1.3	%
Doubtful	—		2,026		—	%		—		6,856		—	%
	$	6,206,096	$	16,525,405	100.0	%		$	6,214,192	$	16,717,166	100.0	%

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-performing loans are discussed further in the section entitled "Non-performing Assets" below.


	March 31, 2025				December 31, 2024
	Amortized Cost		% of Loan Segment		Amortized Cost		% of Loan Segment
Special mention:








CRE (1)	$	70,579	1.1	%	$	58,771	0.9	%
Owner occupied commercial real estate	23,592		1.2	%	7,530		0.4	%
Commercial and industrial	99,035		1.4	%	196,086		2.8	%



	$	193,206			$	262,387

Substandard accruing:
CRE
Hotel	$	21,811	4.5	%	$	20,442	4.2	%
Retail	95,465		8.0	%	101,340		9.2	%
Multi-family	157,356		19.1	%	129,397		15.4	%
Office	249,758		14.5	%	235,967		13.3	%
Industrial	47,247		3.6	%	47,422		3.4	%
Construction and land	75,574		12.5	%	96,374		17.1	%
Other	2,656		3.0	%	2,672		3.0	%
	649,867		10.5	%	633,614		10.2	%
Owner occupied commercial real estate	79,926		4.1	%	95,775		4.9	%
Commercial and industrial	215,845		3.1	%	142,679		2.0	%

Franchise and equipment finance	16,704		10.1	%	22,686		10.6	%

	$	962,342			$	894,754

(1)Special mention CRE is composed entirely of office property type, representing 4.1% and 3.3% of the office portfolio at March 31, 2025 and December 31, 2024, respectively.

The following graphs present trends in criticized and classified loans by segment over the periods indicated (in millions):


Commercial Real Estate(1)						Commercial(1)(2)

(1)Excludes SBA

(2)Includes C&I, Pinnacle, franchise and equipment finance, and MWL

The following charts present criticized and classified CRE loans by property type at the dates indicated (in millions):


March 31, 2025						December 31, 2024

The following graphs present delinquency trends by segment over the periods indicated (in millions):


Commercial Real Estate						Commercial(1)

(1)Includes C&I, Pinnacle, franchise and equipment finance, and MWL

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, 2025:

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 2025. LTVs are typically based on valuation at origination.

At March 31, 2025, we had an estimated $109 million in residential loans in zip codes identified as exposed to the recent Los Angeles area wildfires. Approximately $13 million of these loans were more than 30 days past due at March 31, 2025. We do not expect to find instances in which properties are uninsured or under-insured, and do not currently expect this exposure to lead to significant credit losses although we may experience an increase in delinquencies while insurance claims are being processed.

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, 2025			December 31, 2024
Non-accrual loans:
Commercial:
Non-owner occupied commercial real estate	$	51,906		$	54,169
Construction and land	31,395			31,758
Owner occupied commercial real estate	4,786			3,803
Commercial and industrial	99,400			92,475

Franchise and equipment finance	5,644			6,010
Guaranteed portion of SBA	33,016			34,328
Non-guaranteed portion of SBA	3,446			4,071
Total commercial loans	229,593			226,614
Residential	29,625			23,500
Total non-accrual loans	259,218			250,114
Loans past due 90 days and still accruing	593			593
Total non-performing loans	259,811			250,707
OREO and other non-performing assets	4,946			5,482
Total non-performing assets	$	264,757		$	256,189

Non-performing loans to total loans	1.08		%	1.03		%
Non-performing loans, excluding the guaranteed portion of non-accrual SBA loans, to total loans	0.94		%	0.89		%
Non-performing assets to total assets	0.76		%	0.73		%
Non-performing assets, excluding the guaranteed portion of non-accrual SBA loans, to total assets	0.67		%	0.63		%
ACL to total loans	0.92		%	0.92		%
Commercial ACL to commercial loans (1)	1.34		%	1.37		%
ACL to non-performing loans	84.58		%	89.01		%
Net charge-offs to average loans (2)	0.33		%	0.16		%

(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.

(2) Annualized for the three months ended March 31, 2025; ratio for December 31, 2024 represents annual net charge-off rate.

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 $249 million and $226 million at March 31, 2025 and December 31, 2024, respectively.

The following graphs present trends in non-performing loans to total loans and non-performing assets to total assets over the periods indicated, as well as trends in net charge-offs.


Non-Performing Loans to Total Loans						Non-Performing Assets to Total Assets


Net Charges-Offs to Average Loans (1)

(1) Annualized for the three months ended March 31, 2025.

The net charge-off ratio for the trailing twelve months ended March 31, 2025 was 0.24%.

The following graph presents the trend in non-performing loans by portfolio segment over the periods indicated (in millions):

The following chart presents non-performing CRE loans by property type at March 31, 2025 (in millions):


Non-Performing CRE by Property Type

Construction and land non-performing loans in the chart above is related to one office relationship.

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 a level of continued uncertainty about the general economy, evolving dynamics in some segments of the commercial real estate market, particularly the office sector, the complexity of the ACL estimate and level of management judgment required, we believe it is possible that the ACL estimate could change, potentially materially, in future periods. If commercial real estate market dynamics in our primary markets worsen beyond our current expectations, the ACL and the provision for credit losses will increase in the future. 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. The models employ a factor based methodology, leveraging data sets containing extensive historical loss and recovery information by industry, geography, product type, collateral type and obligor characteristics, to estimate PD and LGD. Measures of PD for commercial loans incorporate current conditions through market cycle or credit cycle adjustments. For residential loans, the models consider FICO, adjusted LTVs and delinquency rates. PDs and LGDs are then conditioned on the reasonable and supportable economic forecast. Projected PDs and LGDs, determined based on pool level characteristics, are applied to estimated exposure at default, considering the contractual term and payment structure of loans, adjusted for expected prepayments, to generate estimates of expected loss. For criticized or classified loans, PDs are adjusted to benchmark PDs established for each risk rating given that the most current financial information available is often not reflective of the borrowers' current financial condition. The ACL estimate incorporates a reasonable and supportable economic forecast through the use of externally developed macroeconomic scenarios applied in the models.

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, 2025 and December 31, 2024, 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 2024 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, 2023	$	41,338		$	142,405		$	243		$	10,855		$	7,848		$	202,689
Provision for credit losses	20,176			(2,741)			(23)			(649)			(958)			15,805
Charge-offs	(486)			(4,076)			—			(790)			(34)			(5,386)
Recoveries	50			4,394			—			—			4			4,448
Balance at March 31, 2024	$	61,078		$	139,982		$	220		$	9,416		$	6,860		$	217,556

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

Net Charge-offs to Average Loans (1)

Three Months Ended March 31, 2024	0.03		%	(0.01)		%	—		%	0.87		%	—		%	0.02		%
Three Months Ended March 31, 2025	0.56		%	0.50		%	—		%	(0.08)		%	—		%	0.33		%

(1)Annualized.

The following table shows the distribution of the ACL at the dates indicated (dollars in thousands):


	March 31, 2025				December 31, 2024
	Total		%(1)			Total		%(1)

Non-owner occupied commercial real estate	$	47,946	23.4	%		$	52,104	23.3	%
Construction and land	17,646		2.5	%		18,354		2.3	%
CRE	65,592					70,458

Owner occupied commercial real estate	17,274		8.2	%		16,126		8.0	%
Commercial and industrial	119,325		28.8	%		121,828		28.9	%
Pinnacle - municipal finance	105		2.9	%		116		3.0	%
Franchise and equipment finance	1,591		0.7	%		2,381		0.9	%
	138,295					140,451
Residential and MWL	15,860		33.5	%		12,244		33.6	%
	$	219,747	100.0	%		$	223,153	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, 2025		December 31, 2024
Commercial:
CRE	1.06	%	1.13	%
C&I	1.54	%	1.54	%
Franchise and equipment finance	0.96	%	1.12	%
Total commercial (1)	1.34	%	1.37	%
Pinnacle - municipal finance	0.02	%	0.02	%
Residential and MWL	0.20	%	0.15	%
	0.92	%	0.92	%

ACL to non-performing loans	84.58	%	89.01	%
ACL to CRE office loans	1.99	%	2.30	%

(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.

Changes in the ACL during the three months ended March 31, 2025, are depicted in the chart below (dollars in millions):

Changes in the ACL during the three months ended March 31, 2025

As depicted in the chart above, the most significant driver of the decrease in the ACL for the three months ended March 31, 2025, was net charge-offs. Risk rating migration and increases in specific reserves and an increase in qualitative overlays, particularly related to economic uncertainty were partially offsetting factors. At March 31, 2025, the ratio of the ACL to loans remained 0.92%, consistent with December 31, 2024. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, and franchise and equipment finance was 1.34% at March 31, 2025 compared to 1.37% at December 31, 2024. The ACL to loans ratio for CRE office loans was 1.99% at March 31, 2025 compared to 2.30% at December 31, 2024. The decrease

in the ACL to loans ratio for the CRE office category for three months ended March 31, 2025 was primarily attributable to net charge-offs. Further discussion of changes in the ACL for select portfolio sub-segments follows:

•The ACL for the CRE portfolio sub-segment decreased by $4.9 million during the three months ended March 31, 2025, from 1.13% to 1.06% of loans, the substantial majority of the decrease was related to the office portfolio and resulted primarily from net charge-offs. The substantial majority of charge-offs related to one office loan that had been in workout for some time.

•The ACL for the residential and MWL segments increased by $3.6 million during the three months ended March 31, 2025, from 0.15% to 0.20% of loans, primarily due to updated prepayment assumptions, the impact of increased delinquencies, and an increase in qualitative loss factors related to the California wildfires.

The quantitative estimate of the ACL at March 31, 2025, was informed by forecasted economic scenarios published in March 2025, 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, 2025, 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 equally to the downside and upside scenarios.

Some of the high-level data points informing the baseline scenario, which was the scenario most heavily weighted, used in estimating the quantitative portion of the ACL at March 31, 2025, included:

•Labor market assumptions, which reflected national unemployment peaking at 4.4% and

•Annualized growth in national GDP troughing at 1.2%.

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 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

A breakdown of deposits at the dates indicated is shown below:


March 31, 2025						December 31, 2024

The Company has a diverse deposit book by industry sector. At March 31, 2025, our largest industry vertical was title insurance, with approximately $4.4 billion in total deposits. Deposits in the HOA vertical totaled $1.9 billion at March 31, 2025. Approximately 67% of our total deposits were commercial or municipal deposits at March 31, 2025.

Brokered deposits totaled $4.7 billion and $5.2 billion at March 31, 2025 and December 31, 2024, respectively. Brokered deposits are generally insured and typically a readily available source of funds, however, they are typically higher cost and in some circumstances, credit sensitive. We are strategically focused on reducing the level of brokered deposits.

The following graph presents trends in the deposit mix and cost of deposits (in millions):



Quarterly cost of deposits	0.43%	0.19%	1.42%	2.96%	2.72%	2.58%
Non-interest bearing as a % of total deposits	25.5%	30.5%	29.2%	25.8%	27.3%	28.8%
Spot average APY of total deposits	0.36%	0.16%	1.92%	3.18%	2.63%	2.52%

The following graph presents trends in the spot APY of total deposits compared to the upper bound of the federal funds target range:

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, 2025 (dollars in thousands):


	Amount		Weighted Average Rate
Maturing in:
2025 - One month or less	$	2,150,000	4.42	%
2025 - Over one month	255,000		4.47	%




Total contractual balance outstanding	$	2,405,000

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, 2025 (dollars in thousands):


	Notional Amount		Weighted Average Rate
Cash flow hedges maturing in:


2025	$	950,000	3.53	%
2026	1,430,000		3.50	%
Thereafter	25,000		2.50	%
	$	2,405,000	3.50	%

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, 2025		December 31, 2024
Senior notes:
Principal amount of 4.875% senior notes maturing on November 17, 2025	$	388,479	$	388,479
Unamortized discount and debt issuance costs	(578)		(802)
	387,901		387,677
Subordinated notes:
Principal amount of 5.125% subordinated notes maturing on June 11, 2030	300,000		300,000
Unamortized discount and debt issuance costs	(3,602)		(3,753)
	296,398		296,247
Total notes	684,299		683,924
Finance leases	24,792		24,629
Notes and other borrowings	$	709,091	$	708,553

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 includes cash, secured funding such as borrowing capacity at the Federal Home Loan Bank of Atlanta and the Federal Reserve, and unencumbered 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, 2025 and December 31, 2024 (in millions):


Same Day Available Liquidity

At March 31, 2025, the ratio of estimated insured and collateralized deposits to total deposits was 61% and the ratio of available liquidity to estimated uninsured, uncollateralized deposits was 142%. 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. We continue to market and educate our customers about products that enable them to obtain FDIC insurance on certain deposits exceeding the standard single depositor insurance limit, have implemented single depositor concentration limits and have reduced or eliminated exposure to sectors or depositors that have historically evidenced higher volatility.

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 test.

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, 2025

Policy Limit

Wholesale funding/total assets

23.0%

<37.5%

March 31, 2025

Operating Threshold

Available operational liquidity/volatile liabilities

2.52x

≥1.30x

Liquidity stress test coverage ratio

2.17

≥1.50x

One year liquidity ratio

3.22x

≥1.00x

Loan to deposit ratio

85.5%

≤100%

Top 20 uninsured depositors to total deposits (excluding brokered & municipal deposits)

12.8%

≤15%

Available on-balance sheet liquidity

8.6%

≥5%

Available liquidity to uninsured/non-collateralized deposits

142%

<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, 2025 and December 31, 2024, 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.


	March 31, 2025
	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	$	3,054,679	8.66	%	N/A (1)		N/A (1)		$	1,411,121	4.00	%	N/A (1)		N/A (1)
CET1 risk-based capital	$	3,054,679	12.19	%	$	1,629,284	6.50	%	$	1,127,966	4.50	%	$	1,754,613	7.00	%
Tier 1 risk-based capital	$	3,054,679	12.19	%	$	2,005,272	8.00	%	$	1,503,954	6.00	%	$	2,130,602	8.50	%
Total risk-based capital	$	3,581,910	14.29	%	$	2,506,590	10.00	%	$	2,005,272	8.00	%	$	2,631,920	10.50	%
BankUnited:
Tier 1 leverage	$	3,359,005	9.53	%	$	1,762,606	5.00	%	$	1,410,085	4.00	%	N/A		N/A
CET1 risk-based capital	$	3,359,005	13.41	%	$	1,627,703	6.50	%	$	1,126,871	4.50	%	$	1,752,911	7.00	%
Tier 1 risk-based capital	$	3,359,005	13.41	%	$	2,003,327	8.00	%	$	1,502,495	6.00	%	$	2,128,535	8.50	%
Total risk-based capital	$	3,586,236	14.32	%	$	2,504,158	10.00	%	$	2,003,327	8.00	%	$	2,629,366	10.50	%

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 process 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, 2025 - increase (decrease)
In year 1	(4.5)	%	(1.7)	%	1.1	%	2.1	%
In year 2	(6.5)	%	(2.5)	%	1.4	%	2.4	%
Model Results at December 31, 2024 - increase (decrease)
In year 1	(4.2)	%	(1.7)	%	1.5	%	2.7	%
In year 2	(3.4)	%	(1.2)	%	0.6	%	1.0	%

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, 2025 - increase (decrease):	12.0	%	8.0	%	(6.3)	%	(12.6)	%
Model Results at December 31, 2024 - increase (decrease):	16.9	%	10.0	%	(7.1)	%	(14.8)	%

All of the modeled results at March 31, 2025 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, 2025 were:

•Prepayment speeds for loans, with CPRs ranging from 7.2% to 13.4% depending on loan characteristics and the magnitude of the modeled rate shock;

•Prepayment speeds for investment securities, with CPRs ranging from 4.5% to 11.0% depending on individual security collateral and characteristics and the magnitude of the modeled rate shock;

•Deposit decay rates ranging between 16% and 20%;

•Overall non-maturity interest bearing deposit beta of 78%;

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, 2025 (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	$	2,405,000	3.50%	Daily SOFR	1.0

Pay-variable interest rate swaps	Variability of interest cash flows on variable rate loans	1,200,000		Term SOFR	3.85%	1.7
Interest rate caps purchased, indexed to Fed Funds effective rate	Variability of interest cash flows on variable rate liabilities	100,000		1.00%		0.7
Interest rate collar, indexed to 1-month SOFR(1)	Variability of interest cash flows on variable rate loans	125,000		5.58%	1.50%	1.4


		$	3,830,000


	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 2025	$	50,000	4.0	%	$	150,000	2.7	%
Third quarter 2025	—		—	%	550,000		3.8	%
Fourth quarter 2025	50,000		3.8	%	350,000		2.7	%
2026	925,000		3.8	%	1,430,000		3.5	%
2027	300,000		3.9	%	—		—	%


Thereafter	—		—	%	25,000		2.5	%
	$	1,325,000			$	2,505,000

(1) The interest rate collar consists of a combination of zero-premium interest rate options. The Company sold a pay-variable cap with a strike price of 5.58%; sold a 0% floor; and purchased a receive-variable floor with a strike price of 1.50%.

In addition to derivative instruments, the Company has issued callable CDs to hedge interest rate risk in a falling rate environment; the amount of such instruments outstanding at March 31, 2025 was $428 million. The short duration of our AFS investment portfolio (1.78 at March 31, 2025) 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. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands, except share and per share data):


	March 31, 2025		December 31, 2024		March 31, 2024
Total stockholders’ equity	$	2,897,582	$	2,814,318	$	2,640,392
Less: goodwill and other intangible assets	77,637		77,637		77,637
Tangible stockholders’ equity	$	2,819,945	$	2,736,681	$	2,562,755

Common shares issued and outstanding	75,242,048		74,748,370		74,772,706

Book value per common share	$	38.51	$	37.65	$	35.31

Tangible book value per common share	$	37.48	$	36.61	$	34.27

Item 3. Quantitative and Qualitative Disclosures About Market Risk

See the section entitled “Interest Rate Risk” included in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Form 10-Q, we carried out an evaluation under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective.

During the quarter ended March 31, 2025, there were no changes in the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Effective January 1, 2025, the Company finalized implementation of a new general ledger accounting system. The new general ledger system should enable us to standardize processes, improve efficiency and enhance management reporting and analysis. This change in systems was subject to thorough testing and review before and after final implementation. This transition has not materially affected, and the Company does not expect it to materially affect the effectiveness of internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved as plaintiff or defendant in various legal actions arising in the normal course of business. In the opinion of management, based upon currently available information and the advice of legal counsel, the likelihood is remote that any 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.

Item 1A. Risk Factors

There have been no material changes in the risk factors disclosed by the Company in its 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 5. Other Information

During the three months ended March 31, 2025, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

Item 6.

Exhibits

Exhibit
Number

Description

Location

31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed herewith

32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed herewith

101.INS

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Filed herewith

101.SCH

XBRL Taxonomy Extension Schema

Filed herewith

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XBRL Taxonomy Extension Calculation Linkbase

Filed herewith

101.DEF

XBRL Taxonomy Extension Definition Linkbase

Filed herewith

101.LAB

XBRL Taxonomy Extension Label Linkbase

Filed herewith

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

Filed herewith

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized this 8th day of May 2025.


			/s/ Rajinder P. Singh
			Rajinder P. Singh
			Chairman, President and Chief Executive Officer


			/s/ Leslie N. Lunak
			Leslie N. Lunak
			Chief Financial Officer