BankUnited, Inc. (BKU)

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, 2026 and should be read in conjunction with the consolidated financial statements and notes hereto included in this Quarterly Report on Form 10-Q and BKU's 2025 Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report on Form 10-K").

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” "future", "could", and similar expressions identify forward-looking statements. These forward-looking statements are based on the historical performance of the Company or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations so contemplated will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to, the risk factors described in Part I, Item 1A of the 2025 Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K. The Company does not undertake any obligation to publicly update or review any forward looking statement, whether as a result of new information, future developments or otherwise.

Overview

Quarterly Highlights

In evaluating our financial performance, we consider (i) the funding mix and the composition of interest earning assets; (ii) the level of and trends in net interest income and the net interest margin; (iii) the cost of deposits, trends in non-interest income and non-interest expense; (iv) performance ratios such as the return on average equity and return on average assets and trends in those metrics; and (v) asset quality metrics, including the level of criticized and classified assets, the ratios of non-performing loans to total loans and non-performing assets to total assets, delinquency and net charge-off rates, as well as trends in those metrics. We analyze these ratios and trends against our own historical performance, our expected performance, our risk appetite and the financial condition and performance of comparable financial institutions.

Quarterly Highlights include:

•Net income for the three months ended March 31, 2026 was $61.9 million, or $0.83 per diluted share, compared to $69.3 million, or $0.90, per diluted share for the immediately preceding three months ended December 31, 2025 and $58.5 million, or $0.78 per diluted share for the three months ended March 31, 2025. PPNR increased by 12%, to $106.3 million for the three months ended March 31, 2026, from $95.2 million for the three months ended March 31, 2025.

•For the three months ended March 31, 2026, the annualized ROAA was 0.72% and annualized ROAE was 8.1%.

•The net interest margin, calculated on a tax-equivalent basis, declined to 2.99% for the three months ended March 31, 2026 from 3.06% for the immediately preceding quarter, reflecting seasonal trends; however the net interest margin increased 18 bps from 2.81% for the three months ended March 31, 2025. The decrease in the net interest margin from the immediately preceding quarter was primarily a result of variable rate assets repricing faster than continued improvement in funding cost and funding mix dynamics.

•The average cost of total deposits declined to 2.12% for the three months ended March 31, 2026, from 2.18% for the immediately preceding quarter, and 2.58% for the three months ended March 31, 2025. The spot APY of total deposits declined to 2.09% at March 31, 2026 from 2.10% at December 31, 2025.

•Total deposits, excluding brokered deposits, grew by $277 million for the three months ended March 31, 2026. NIDDA declined by $166 million during the three months ended March 31, 2026, primarily due to seasonality, and represented 30% of total deposits at March 31, 2026. NIDDA grew by $875 million compared to March 31, 2025, one year ago.

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•Wholesale funding, including FHLB advances and brokered deposits, declined by $70 million for the three months ended March 31, 2026.

•Total loans declined by $139 million for the three months ended March 31, 2026. Core loans increased by $9 million, impacted by seasonally low commercial volume in the first quarter. Residential, franchise, equipment and municipal finance portfolios declined by a combined $148 million reflective of our balance sheet repositioning strategy.

•The loan to deposit ratio declined to 82.3% at March 31, 2026, from 82.7% at December 31, 2025.

•Total criticized and classified loans declined by $146 million, or 12%, while non-performing loans declined by $98 million, or 26%, for the three months ended March 31, 2026. The NPA ratio at March 31, 2026 was 0.79%, including 0.10% related to the guaranteed portion of non-performing SBA loans, compared to 1.08% including 0.11% related to the guaranteed portion of non-performing SBA loans at December 31, 2025. The annualized net charge-off ratio for the three months ended March 31, 2026, was 0.61%; the net charge-off for the trailing twelve months was 0.37%.

•The ratio of the ACL to total loans declined to 0.87% at March 31, 2026, from 0.91% at December 31, 2025. The ratio of the ACL to non-performing loans increased to 75.90% at March 31, 2026 from 58.99% at December 31, 2025, reflecting the decline in non-performing loans. The provision for credit losses was $24.6 million for the three months ended March 31, 2026, compared to $15.1 million for the three months ended March 31, 2025.

•At March 31, 2026, CET1 was 12.2%. The ratio of tangible common equity to tangible assets was 8.3%.

•Book value and tangible book value per common share were, $41.11 and $40.05, respectively, at March 31, 2026, compared to $41.19 and $40.14, respectively, at December 31, 2025.

•During the three months ended March 31, 2026, the Company repurchased approximately 1.3 million shares of its common stock for an aggregate purchase price of $60.0 million. In January 2026, the Company's Board of Directors authorized the repurchase of up to an additional $200 million in shares of its outstanding common stock.

•The Company announced an increase of $0.02 per share in its common stock dividends for the three months ended March 31, 2026, to $0.33 per common share, a 6% increase from the previous level of $0.31 per share.

Results of Operations

Net Interest Income

Net interest income is the difference between interest earned on interest earning assets and interest incurred on interest bearing liabilities and is the primary driver of core earnings. Net interest income is impacted by the mix of interest earning assets and interest bearing liabilities, the ratio of interest earning assets to total assets and of interest bearing liabilities to total funding sources, movements in market interest rates and monetary policy, the shape of the yield curve, levels of non-performing assets and pricing pressure from competitors.

The mix of interest earning assets is influenced by loan demand, market and competitive conditions in our primary lending markets, by management's continual assessment of the rate of return and relative risk associated with various classes of earning assets and liquidity considerations. The mix of funding sources is influenced by the Company's liquidity profile, management's assessment of the desire for lower-cost funding sources weighed against relationships with customers, our ability to attract and retain core deposit relationships, competition for deposits in the Company's markets and the availability and pricing of other sources of funds.

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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):

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[Excerpt truncated for page length; source filing is linked above.]

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended to assist readers in understanding the consolidated financial condition and results of operations of BankUnited, Inc. and its subsidiary (the "Company", "we", "us" and "our") and should be read in conjunction with the consolidated financial statements, accompanying footnotes and supplemental financial data included herein. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management's expectations. Factors that could cause such differences are discussed in the sections entitled "Forward-looking Statements" and "Risk Factors." We assume no obligation to update any of these forward-looking statements.

Management's discussion and analysis presents the more significant factors that affected our financial condition as of December 31, 2025, and results of operations for the year then ended, including in comparison to the prior year ended December 31, 2024. Refer to Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K filed with the SEC on February 28, 2025, for a discussion and analysis of the more significant factors that affected the year ended December 31, 2024, including in comparison to the year ended December 31, 2023.

Our Vision and Strategic Priorities

Our vision is to build a leading regional commercial and small business bank, with a distinctive value proposition based on strong service-oriented relationships, robust digital enabled customer experiences, and operational excellence with an entrepreneurial work environment that empowers employees to deliver their best. Our strategic priorities, focused on improving core profitability, include:

•Grow core customer relationships on both sides of the balance sheet;

•Continue to improve the funding profile - growth in core deposit relationships is paramount:

◦Grow NIDDA particularly in national deposit verticals, middle-market and small business;

◦Invest in payments technology and leverage treasury solutions to enhance deposit acquisition and promote customer retention;

•Improve the asset mix, transitioning to a mix of assets with higher risk-adjusted returns:

◦Rebalance the loan portfolio toward higher-yielding commercial lending as lower-yielding residential loans roll off, driving NIM expansion through mix shift;

◦Continue to de-emphasize the BFG portfolio;

•Focus on key markets and geographies, specifically Florida, Texas, Georgia and New Jersey;

•Play where we can win, focusing on sectors where our delivery model is a differentiator;

•Innovate with solutions that solve customer pain points;

•Invest in organic growth capabilities - people, processes, products and technology - while managing expense growth;

•Prioritize nimble technology architecture and digital capabilities;

•Retain the ability to pivot nimbly when opportunities arise;

•Maintain robust liquidity and capital levels, while returning excess capital to shareholders as appropriate;

•Continue to closely monitor and manage credit;

•While our primary growth strategy is organic, we will continue to monitor the M&A landscape.

Some of the challenges we face in executing on our strategic priorities, some of which may impact the banking industry more broadly, include:

•Execution of our strategic objectives is highly dependent on our ability to grow core client relationships. Competition for deposits and loans in our markets is intense with respect to the variety and quality of products and services offered,

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delivery channels, service levels and pricing. The economic health of our primary markets, monetary and fiscal policy, our ability to attract and retain talent and our ability to deliver technology and product solutions will impact execution of these objectives.

•The future trajectories of the macro-economy, interest rates, and monetary and fiscal policy are uncertain. The impact of these macro factors on our customers and prospective customers also impacts us. If macro conditions are less supportive than we currently anticipate, we may be less successful in executing our strategic priorities.

See "Item 1A - Risk Factors" for additional discussion of risks to the execution of our strategic priorities.

Overview

2025 Performance Highlights

In evaluating our financial performance, we consider (i) the funding mix and the composition of interest earning assets; (ii) the level of and trends in net interest income and the net interest margin; (iii) the cost of deposits, trends in non-interest income and non-interest expense; (iv) performance ratios such as the return on average equity and return on average assets and trends in those metrics; and (v) asset quality metrics, including the level of criticized and classified assets, the ratios of non-performing loans to total loans and non-performing assets to total assets, delinquency and net charge-off rates, as well as trends in those metrics. We analyze these ratios and trends against our own historical performance, our expected performance, our risk appetite and the financial condition and performance of comparable financial institutions.

Highlights include:

•Net income for the year ended December 31, 2025 was $268.4 million, or $3.53 per diluted share, compared to $232.5 million, or $3.08 per diluted share for the year ended December 31, 2024, an increase of 15%. PPNR increased by 16%, to $429.7 million for the year ended December 31, 2025, from $371.4 million for the year ended December 31, 2024.

•ROAA improved to 0.77% for the year ended December 31, 2025, from 0.66% for the year ended December 31, 2024; ROAE improved to 9.0% from 8.5%.

•The net interest margin, calculated on a tax-equivalent basis, expanded by 0.22%, to 2.95% for the year ended December 31, 2025 from 2.73% for the year ended December 31, 2024. The increase in the net interest margin was primarily a result of balance sheet repositioning, particularly improved funding mix, and re-pricing of deposit costs in line with a lower interest rate environment. Net interest income grew by $73.3 million, or 8%, for the year ended December 31, 2025. The following chart provides a comparison of net interest margin, the average yield on interest earning assets, and the average rate on interest bearing liabilities for the years ended December 31, 2025 and 2024 (on a tax equivalent basis):

•The average cost of total deposits declined by 0.61% to 2.40% for the year ended December 31, 2025, from 3.01% for the year ended December 31, 2024. The spot APY of total deposits declined to 2.10% at December 31, 2025 from 2.63% at December 31, 2024.

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•The following charts illustrate the composition of deposits at the dates indicated:

•NIDDA grew by 20%, or $1.5 billion during the year ended December 31, 2025, and represented 31% of total deposits at December 31, 2025. Total deposits grew by $1.5 billion and non-brokered deposits grew by $1.8 billion. Average NIDDA increased by $844 million for the year ended December 31, 2025.

•Wholesale funding, including FHLB advances and brokered deposits, declined by $1.7 billion for the year ended December 31, 2025.

•Loan portfolio composition continued to shift from residential to core commercial categories during the year ended December 31, 2025. Residential, franchise, equipment and municipal finance portfolios declined by a combined $810 million while the core loans grew by $786 million for the year ended December 31, 2025, reflective of our balance sheet repositioning strategy.

•The loan to deposit ratio declined to 82.7% at December 31, 2025, from 87.2% at December 31, 2024.

•Total criticized and classified loans declined by $185 million while non-performing loans increased by $122 million for the year ended December 31, 2025. The net charge-off ratio for the year ended December 31, 2025, was 0.30%. The NPA ratio at December 31, 2025 was 1.08%, including 0.11% related to the guaranteed portion of non-performing SBA loans.

•The ratio of the ACL to total loans declined to 0.91% at December 31, 2025, from 0.92% at December 31, 2024. The ratio of the ACL to non-performing loans was 58.99%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.30% at December 31, 2025 and the ACL to loans ratio for CRE office loans was 2.03%. The provision for credit losses was $67.9 million for the year ended December 31, 2025, compared to $55.1 million for the year ended December 31, 2024.

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•At December 31, 2025, CET1 was 12.3% up 0.30% from December 31, 2024. AOCI improved by $94.9 million from December 31, 2024. The ratio of tangible common equity to tangible assets increased to 8.5%. The charts below represent the Company's and the Bank's regulatory capital ratios at the dates indicated:

BankUnited, Inc.

BankUnited, N.A.

•Book value and tangible book value per common share continued to accrete, to $41.19 and $40.14, respectively, at December 31, 2025, compared to $37.65 and $36.61, respectively, at December 31, 2024. This represents a 10% year-over-year increase in tangible book value per share.

•During the year ended December 31, 2025, the Company repurchased approximately 1.1 million shares of its common stock for an aggregate purchase price of $44.8 million. In January 2026, the Company's Board of Directors authorized the repurchase of up to an additional $200 million in shares of its outstanding common stock.

•In the first quarter of 2025, the Company increased its quarterly dividends by $0.02, to $0.31 per share, reflecting a 7% increase from the previous quarterly cash dividend of $0.29 per share and maintained that quarterly level through 2025. In January 2026, the Company's Board of Directors announced an increase of $0.02 in the Company's common stock dividend for future quarterly dividends to $0.33 per common share, an increase of 6%.

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•In August 2025, the Company redeemed all of its outstanding senior notes due November 2025 at par value plus accrued interest.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with GAAP and follow general practices within the banking industry. Application of these principles requires management to make complex and subjective estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable and appropriate under current circumstances. These assumptions form the basis for our judgments about the carrying values of assets and liabilities that are not readily available from independent, objective sources. We evaluate our estimates on an ongoing basis. Use of alternative assumptions may have resulted in significantly different estimates. Actual results may differ from these estimates. The most significant estimate impacting the Company's financial statements is the ACL.

Accounting policies are an integral part of our financial statements. A thorough understanding of these accounting policies is essential when reviewing our reported results of operations and our financial position. We believe that the critical accounting policies and estimates discussed below involve a heightened level of management judgment due to the complexity, subjectivity and sensitivity involved in their application.

Note 1 to the consolidated financial statements contains a further discussion of our significant accounting policies.

ACL

The ACL represents management's estimate of current expected credit losses, or the amount of amortized cost basis not expected to be collected, on our loan portfolio. Determining the amount of the ACL is considered a critical accounting estimate because of its complexity and because it requires extensive judgment and estimation. Estimates that are particularly susceptible to change that may have a material impact on the amount of the ACL include:

•our evaluation of current conditions;

•our determination of a reasonable and supportable economic forecast or weighting of various forecast paths and selection of the reasonable and supportable forecast period;

•our evaluation of historical loss experience and selection of historical loss data used in formulating our ACL estimate; since we have limited company specific historical loss data, our modeling techniques also leverage broad external data sets for this purpose;

•our evaluation of changes in composition and characteristics of the loan portfolio, including internal risk ratings;

•our estimate of expected prepayments;

•the value of underlying collateral, which may impact loss severity and certain cash flow assumptions for collateral-dependent, criticized and classified loans; in the current environment, especially with respect to certain commercial real estate sectors like office, current and projected collateral values may be particularly challenging to estimate; and

•our selection and evaluation of qualitative factors.

Our selection of models and modeling techniques may also have a material impact on the estimate.

The ACL estimates incorporate a probability‑weighted blend of macroeconomic scenarios, with weights determined by an evaluation of each scenario’s key assumptions and narrative, the projected paths of principal economic variables, such as real GDP growth and the unemployment rate, and other relevant market indicators and consensus forecasts. Scenarios include (i) a baseline forecast; (ii) an upside scenario reflecting above-baseline levels of output and lower unemployment rate; and (iii) a downside scenario reflecting softer business investment, depressed consumer sentiment, and generally weaker economic activity.

To illustrate directional sensitivity to the choice of scenario, excluding the impact of qualitative factors, the impact of using only the upside scenario would result in an estimated $21 million decrease in the ACL, while using only the downside scenario would result in an estimated increase of $111 million in the ACL. The sensitivity analysis result does not represent management’s view of expected credit losses nor is it intended to estimate future changes in ACL levels.

Note 1 to the consolidated financial statements describes the methodology used to determine the ACL.

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Recent Accounting Pronouncements

See Note 1 to the consolidated financial statements for a discussion of recent accounting pronouncements.

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.

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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):

(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $11.0 million, $12.2 million and $13.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The tax-equivalent adjustment for tax-exempt investment securities was $2.8 million, $3.3 million and $3.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.

(2)At fair value except for securities held to maturity.

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Increases and decreases in interest income, calculated on a tax-equivalent basis, and interest expense result from changes in average balances (volume) of interest earning assets and liabilities, as well as changes in average interest rates. The following table shows the effect that these factors had on the interest earned on our interest earning assets and the interest incurred on our interest bearing liabilities for the years indicated. The effect of changes in volume is determined by multiplying the change in volume by the previous year's average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous year's volume. Changes applicable to both volume and rate have been allocated to volume (in thousands):

Net interest income, calculated on a tax-equivalent basis, was $1.0 billion for the year ended December 31, 2025, compared to $929.8 million for the year ended December 31, 2024, an increase of $71.6 million. The increase was comprised of decreases in tax-equivalent interest income and interest expense of $134.0 million and $205.6 million, respectively.

The net interest margin, calculated on a tax-equivalent basis, increased to 2.95% for the year ended December 31, 2025, from 2.73% for the year ended December 31, 2024. Both the yield on interest earning assets and the cost of interest bearing liabilities declined during the year, reflecting a lower interest rate environment. However, the decline in the cost of interest bearing liabilities outpaced the decline in the yield on interest earning assets, primarily as a result of balance sheet repositioning, particularly an improved funding mix.

For the year ended December 31, 2025 compared to the year ended December 31, 2024, average NIDDA grew by $844 million while average FHLB advances declined by $914 million. Within interest bearing deposits, there was a shift from generally higher priced time deposits to generally lower priced forms of interest bearing deposits. On the asset side of the balance sheet, average core loans increased to 65.9% of average loans for the year ended December 31, 2025, from 62.8% of average loans for the year ended December 31, 2024, while generally lower-yielding residential loans declined to 30.7% of average loans from 32.6% of average loans for the respective periods.

Further discussion of factors impacting the net interest margin for the year ended December 31, 2025 compared to the year ended December 31, 2024 follows:

•The tax-equivalent yield on loans decreased to 5.48% for the year ended December 31, 2025, from 5.78% for the year ended December 31, 2024. This decrease reflected the impact of declining market rates on the predominantly floating rate commercial portfolio.

•The tax-equivalent yield on investment securities decreased to 5.04% for the year ended December 31, 2025, from 5.53% for the year ended December 31, 2024. This decrease resulted primarily from the reset of coupon rates on variable rate securities.

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•The average cost of interest bearing deposits decreased to 3.39% for the year ended December 31, 2025, from 4.10% for the year ended December 31, 2024. This decline reflected actions taken to proactively reduce deposit pricing in response to a lower Federal funds rate and re-pricing of term deposits.

•The average rate paid on FHLB advances decreased to 3.82% for the year ended December 31, 2025, from 4.15% for the year ended December 31, 2024, primarily due to repayment of higher rate short-term advances, partially offset by the maturities of some cash flow hedges.

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):

The most significant factor impacting the provision for credit losses for the year ended December 31, 2025 was an increase in specific reserves, partially offset by; (i) changes in portfolio composition and borrower financial performance, (ii) improvements in the economic forecast, and (iii) routine modeling and assumption updates.

The provision for credit losses may be volatile and the level of the ACL may change materially from current levels. Future levels of the ACL could be significantly impacted, in either direction, by changes in factors such as, but not limited to, economic conditions or the economic outlook, the composition of the loan portfolio, the financial condition of our borrowers and collateral values.

The determination of the amount of the ACL is complex and involves a high degree of judgment and subjectivity. See “Analysis of the Allowance for Credit Losses” below for more information about how we determine the appropriate level of the ACL and about factors that impacted the level of the ACL.

Non-Interest Income

The following table presents a comparison of the categories of non-interest income for the periods indicated (in thousands):

The decrease in lease financing revenue for the year ended December 31, 2025, compared to the year ended December 31, 2024, was attributable primarily to the continuing decline of the operating lease equipment portfolio. Expense related to the depreciation of operating lease equipment also reflected a declining trend over these comparative periods.

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The more significant items included in other non-interest income in the table above typically may include commercial card revenue, lending related fees other than origination fees, BOLI income and securities gains and losses. The increase for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily a result of increase in BOLI income.

Non-Interest Expense

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

The increase in compensation relates to investments we are making in people to support future growth of the commercial business, regular merit increases, and increased variable compensation cost, related in part to an increase in the Company's stock price.

The decrease in deposit insurance expense was primarily attributable to a $5.2 million FDIC special assessment incurred during the year ended December 31, 2024. A lower base assessment rate for the year ended December 31, 2025 compared to the year ended December 31, 2024, also contributed to the decline in deposit insurance expense.

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

Other non-interest expense for the year ended December 31, 2025 included $3.8 million of write downs of previously capitalized software.

Income Taxes

The provision for income taxes for the years ended December 31, 2025, 2024 and 2023 was $93.4 million, $83.9 million and $58.4 million, respectively. The Company's effective income tax rate was 25.82%, 26.52% and 24.64% for the years ended 2025, 2024 and 2023, respectively.

See Note 9 to the consolidated financial statements for more information about income taxes including a reconciliation of the Company's effective income tax rate to the statutory federal rate.

Analysis of Financial Condition

We have continued to execute on our organic balance sheet transformation strategy, focused on improving both the funding profile and asset mix. For the year ended December 31, 2025, NIDDA grew by $1.5 billion from 27% to 31% of total deposits, and non-brokered deposits grew by $1.8 billion. Wholesale funding, including FHLB advances and brokered deposits, declined by $1.7 billion. For the year ended December 31, 2025 compared to the year ended December 31, 2024, average NIDDA grew by $844 million.

Total loans declined by $24 million for the year ended December 31, 2025. Consistent with our balance sheet strategy, residential, franchise, equipment and municipal finance portfolios declined by $810 million, while core loans grew by $786 million. The core loan portfolio segments comprised 68.2% of total loans at December 31, 2025, up from 64.9% at December 31, 2024, while residential loans declined to 28.8% of total loans at December 31, 2025 from 31.2% at December 31, 2024. The securities portfolio grew by $133 million. The loan-to-deposit ratio was 82.7% at December 31, 2025 compared to 87.2% at December 31, 2024.

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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):

Our investment strategy is focused on ensuring adequate liquidity, maintaining a suitable balance of high credit quality, diverse assets, managing interest rate risk, and generating acceptable returns given our established risk parameters. We have sought to maintain liquidity by investing a significant portion of the portfolio in high quality liquid securities including U.S. Treasury and U.S. Government Agency and sponsored enterprise securities. We have also invested in highly-rated structured products, including private-label commercial and residential MBS, CLOs, single family real estate-backed securities and non-mortgage asset-backed securities that, while somewhat less liquid, are generally pledgeable at either the FHLB or the FRB and provide us with attractive yields. Investment grade municipal securities provide liquidity and attractive tax-equivalent yields. We remain committed to keeping the duration of our securities portfolio short; relatively short effective portfolio duration helps mitigate interest rate risk. The estimated effective duration of the investment portfolio was 1.73 years and the estimated weighted average life of the portfolio was 5.1 years as of December 31, 2025. Approximately 69% of the securities portfolio was floating rate at December 31, 2025.

The investment securities AFS portfolio was in a net unrealized loss position of $267.1 million at December 31, 2025, an improvement of $138.5 million compared to a net unrealized loss position of $405.6 million at December 31, 2024. The improvement in unrealized losses is largely due to a declining interest rate environment, and in some cases, tightening spreads. Net unrealized losses at December 31, 2025 included $26.7 million of gross unrealized gains and $293.9 million of gross unrealized losses. Investment securities available for sale in unrealized loss positions at December 31, 2025 had an aggregate fair value of $4.4 billion. The unrealized losses resulted primarily from a sustained period of higher interest rates, and in some cases, wider spreads compared to the levels at which securities were purchased. None of the unrealized losses were attributable to credit loss impairments.

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

We evaluate the credit quality of individual securities in the portfolio quarterly to determine whether we expect to recover the amortized cost basis of the investments in unrealized loss positions. This evaluation considers, but is not necessarily limited to, the following factors, the relative significance of which varies depending on the circumstances pertinent to each individual security:

•Whether we intend to sell the security prior to recovery of its amortized cost basis;

•Whether it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis;

•The extent to which fair value is less than amortized cost;

•Adverse conditions specifically related to the security, a sector, an industry or geographic area;

•Changes in the financial condition of the issuer or underlying loan obligors;

•The payment structure and remaining payment terms of the security, including levels of subordination or over-collateralization;

•Failure of the issuer to make scheduled payments;

•Changes in external credit ratings;

•Relevant market data; and

•Estimated prepayments, defaults, and the value and performance of underlying collateral at the individual security level.

We regularly engage with bond managers to monitor trends in underlying collateral, including potential downgrades and subsequent cash flow diversions, liquidity, ratings migration, and any other relevant developments.

We have not sold, and do not anticipate the need to sell, securities in unrealized loss positions to generate liquidity. At December 31, 2025, the Company did not have an intent to sell securities that were in significant unrealized loss positions, and it was not more likely than not that the Company would be required to sell these securities before recovery of the amortized cost basis, which may be at maturity. The substantial majority of our investment securities are eligible to be pledged at either the FHLB or FRB.

The majority of our investment securities are classified within level 2 of the fair value hierarchy. U.S. Treasury securities and marketable equity securities are classified within level 1 of the hierarchy. For additional disclosure related to the fair values of investment securities, see Note 14 to the consolidated financial statements.

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The following table shows the weighted average prospective yields based on current rates, categorized by scheduled maturity, for AFS investment securities as of December 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%:

Loans

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

Commercial loans and leases

Commercial loans include a diverse portfolio of commercial and industrial loans and lines of credit, loans secured by owner-occupied commercial real-estate, income-producing non-owner occupied commercial real estate, construction loans, SBA loans, mortgage warehouse lines of credit, municipal loans and leases and franchise and equipment finance loans and leases.

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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:

(1)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):

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

Included in New York tri-state multifamily loans in the tables above is approximately $106 million of rent regulated exposure as of December 31, 2025.

The following table presents information about CRE loans maturing in the next 12 months by property type at December 31, 2025 (dollars in thousands). 17% of the total CRE portfolio, with a weighted average coupon rate of 4.36%, is fixed rate to the borrower and maturing in the next 12 months.

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

The office segment totaled $1.4 billion at December 31, 2025, a decline of $343 million for the year. Medical office comprised approximately $307 million or 22% of the total office portfolio.

Non-performing CRE loans, excluding SBA loans, totaled $97 million at December 31, 2025 and included $78 million of office exposure, including $30 million in the construction portfolio. Also see the section entitled "Asset Quality" below.

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.

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The following table presents the exposure in the C&I portfolio by industry, at December 31, 2025 (dollars in thousands):

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

The following chart presents the geographic distribution of the commercial and industrial portfolio at December 31, 2025:

C&I Geographic Distribution

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The following chart presents a further breakdown of the NDFI portfolio at December 31, 2025:

NDFI Portfolio Distribution

NDFI exposure totaled $1.5 billion, or 6% of total loans, at December 31, 2025. The "Other" category in the chart above includes primarily REITs, B2C, private equity funds, insurance and investment services. The substantial majority of the NDFI portfolio is pass rated, with two loans totaling $44 million rated non-pass.

The Pinnacle portfolio consists of essential-use equipment financing to state and local governmental entities on a national basis directly and through vendor programs and alliances, with financing structures including equipment lease purchase agreements, direct (private placement) bond re-fundings and loan agreements.

The franchise and equipment finance portfolio is comprised of loans originated by Bridge including (i) franchise acquisition, expansion and equipment financing facilities and (ii) transportation equipment finance. We expect balances in these segments will continue to decline.

Residential mortgages

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

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 December 31, 2025, the majority of the 1-4 single family residential loan portfolio, excluding government insured residential loans, was owner-occupied, with 81% primary residence, 5% second homes and 14% investor-owned properties.

The Company acquires non-performing FHA and VA insured mortgages from third parties who have exercised their right to purchase these loans out of GNMA securitizations upon default ("Buyout Loans"). Buyout Loans that re-perform, either through modification or self-cure, may be eligible for re-securitization. The balance of Buyout Loans totaled $858 million at December 31, 2025.

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

See Note 4 to the consolidated financial statements for information about the geographic distribution of the 1-4 single family residential portfolio.

The following table presents a breakdown of the 1-4 single family residential mortgage portfolio, excluding government insured residential loans, categorized between fixed rate loans and ARMs at the dates indicated (dollars in thousands):

Loan Maturities

The following table sets forth, as of December 31, 2025, the maturity distribution of our loan portfolio by category, excluding government insured residential loans. Commercial loans are presented by contractual maturity, including scheduled payments for amortizing loans but not incorporating estimated prepayments. Contractual maturities of residential loans have been adjusted for an estimated rate of voluntary prepayments, based on historical trends, current interest rates, types of loans and refinance patterns (in thousands):

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The following table shows the distribution of those loans that mature in more than one year between fixed and adjustable interest rate loans as of December 31, 2025 (in thousands):

Excluded from the tables above are government insured residential loans. Resolution of these loans is generally accomplished through the re-securitization and sale of the loans after they re-perform, either through modification or self-cure, or through pursuit of the applicable guarantee.

Operating lease equipment, net

Operating lease equipment, net totaled $171 million and $224 million at December 31, 2025 and 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.

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The following table summarizes the Company's commercial credit exposure, based on internal risk rating, at the dates indicated (dollars in thousands):

Total criticized classified loans declined by $185 million for the year ended December 31, 2025, while total criticized and classified CRE loans declined by $122 million for the same period.

The following table provides additional information about special mention and substandard accruing loans at the dates indicated (dollars in thousands). All of these loans are performing. Non-accrual loans are discussed further in the section entitled "Non-performing Assets" below.

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

(1)Excludes SBA

(2)Commercial includes C&I, and franchise and equipment finance.

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

(1)Includes $58 million and $85 million of office exposure at December 31, 2025 and 2024, respectively.

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

(1)Includes owner occupied real estate.

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.

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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 December 31, 2025:

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 third quarter of 2025. LTVs are typically based on valuation at origination.

Note 4 to the consolidated financial statements presents additional information about key credit quality indicators and delinquency status of the loan portfolio.

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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):

(1)    For purposes of this ratio, commercial loans includes the C&I and CRE sub-segments, as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio.

Contractually delinquent government insured residential loans are typically Buyout Loans and are excluded from non-performing loans as defined in the table above due to their government guarantee. The carrying value of such loans contractually delinquent by 90 days or more was $159 million and $226 million at December 31, 2025 and 2024, respectively.

The year-over-year decline in the ratio of the ACL to non-performing loans is related to non-performing loans that have no or relatively low related ACL due to the adequacy of estimated collateral value to cover the remaining outstanding balance, which is in some cases net of partial charge-offs recognized.

The following charts present non-performing CRE loans by property type at the dates indicated (in millions):

Commercial loans are placed on non-accrual status when (i) management has determined that full repayment of all contractual principal and interest is in doubt, or (ii) the loan is past due 90 days or more as to principal or interest unless the loan is well secured and in the process of collection. Residential loans, other than Buyout Loans, are generally placed on non-accrual status when they are 60 days past due. When a loan is placed on non-accrual status, uncollected interest accrued is reversed and charged to interest income. Commercial loans are returned to accrual status only after all past due principal and interest has been collected and full repayment of remaining contractual principal and interest is reasonably assured. Residential loans are generally returned to accrual status when less than 60 days past due. Past due status of loans is determined based on the contractual next payment due date. Loans less than 30 days past due are reported as current.

Loss Mitigation Strategies

Criticized or classified commercial loans in excess of certain thresholds are reviewed quarterly by the Criticized Asset Committee, which evaluates the appropriate strategy for collection to mitigate the amount of credit losses and considers the appropriate risk rating for these loans. Criticized asset reports for each relationship are presented by the assigned relationship manager and credit officer to the Criticized Asset Committee until such time as the relationships are returned to a satisfactory credit risk rating or otherwise resolved. The Criticized Asset Committee may require the transfer of a loan to our workout and recovery department, which is tasked to effectively manage the loan with the goal of minimizing losses and expenses associated with restructure, collection and/or liquidation of collateral. Commercial loans with a risk rating of substandard, loans on non-accrual status, and assets classified as OREO or repossessed assets are usually transferred to workout and recovery. Oversight of the workout and recovery department is provided by the Criticized Asset Committee.

Our servicers evaluate each residential loan in default to determine the most effective loss mitigation strategy, which may be modification, short sale, or foreclosure, and pursue the alternative most suitable to the consumer and to mitigate losses to the Bank.

Analysis of the Allowance for Credit Losses

The ACL is management's estimate of the amount of expected credit losses over the life of the loan portfolio, or the amount of amortized cost basis not expected to be collected, at the balance sheet date. This estimate encompasses information about historical events, current conditions and reasonable and supportable economic forecasts. Determining the amount of the ACL is complex and requires extensive judgment by management about matters that are inherently uncertain. Given the complexity of the ACL estimate, the level of management judgment required and inherent uncertainty with respect to future developments in the external environment, it is possible that the ACL estimate could change, potentially materially, in future periods. Changes in the ACL may result from changes in current economic conditions, including but not limited to unanticipated changes in interest rates or inflationary pressures, changes in our economic forecast, loan portfolio composition, commercial and residential real estate market dynamics and other circumstances not currently known to us that may impact the financial condition and operations of our borrowers, among other factors.

Expected credit losses are estimated on a collective basis for groups of loans that share similar risk characteristics. For loans that do not share similar risk characteristics with other loans such as collateral dependent loans, expected credit losses are

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estimated on an individual basis. Expected credit losses are estimated over the contractual terms of the loans, adjusted for expected prepayments, generally excluding expected extensions, renewals, and modifications.

For the substantial majority of portfolio segments and subsegments, including residential loans other than government insured loans and most commercial and commercial real estate loans, expected losses are estimated using econometric models.

A single economic scenario or a probability weighted blend of economic scenarios may be used. The models ingest numerous national, regional and MSA level variables and data points. At December 31, 2025 and 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 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):

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

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

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The following table presents the ACL as a percentage of loans at the dates indicated, by portfolio sub-segment:

Changes in the ACL during the year ended December 31, 2025, are depicted in the chart below (dollars in millions):

Changes in the ACL during the year ended December 31, 2025

As depicted in the chart above, the most significant factors impacting the ACL for the year ended December 31, 2025, were increases in specific reserves, partially offset by net charge-offs. The ACL was also impacted although to a lesser extent, by an increases in certain qualitative factors and risk rating migration and decreases related to (i) improvement in the economic forecast, (ii) changes in portfolio composition and borrower financial performance and (iii) routine modeling and assumption changes.

At December 31, 2025, the ratio of the ACL to loans was 0.91%, compared to 0.92% at December 31, 2024. The commercial ACL ratio, inclusive of C&I, CRE, and franchise and equipment finance was 1.30% at December 31, 2025 compared to 1.37% at December 31, 2024. The ACL to loans ratio for CRE office loans was 2.03% at December 31, 2025 compared to 2.30% at December 31, 2024. Further discussion of changes in the ACL for select portfolio sub-segments follows:

•The ACL for the CRE portfolio sub-segment decreased by $12.1 million during the year ended December 31, 2025, from 1.13% to 0.86% of loans, primarily a result of net charge-offs, partially offset by an increase in qualitative overlays related to the office sub-segment and New York rent regulated multi-family loans.

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•The ACL for the commercial and industrial sub-segment increased by $10.7 million during the year ended December 31, 2025, from 1.54% to 1.65% of loans. The increase was primarily a result of increases in specific reserves, offset by net charge-offs and improvement in current economic conditions and the economic forecast.

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

Some of the high-level data points informing the baseline scenario used in estimating the quantitative portion of the ACL at December 31, 2025, included:

•Labor market assumptions, which reflected national unemployment peaking at 4.8% and

•Annualized growth in national GDP averaging 2.1%.

The above unemployment and GDP growth assumptions are provided to give a high level overview of the nature and severity of the baseline economic forecast scenario used in estimating the ACL. Numerous additional variables and assumptions not explicitly stated, including but not limited to detailed commercial and residential property forecasts, projected stock market performance and volatility indices and a variety of additional assumptions about market interest rates and spreads also contributed to the overall impact economic conditions and the economic forecast had on the ACL estimate. Furthermore, while the variables presented above are at the national level, many of the economic variables are regionalized at the market and submarket level in the models.

For additional information about the ACL, see Note 4 to the consolidated financial statements.

Deposits

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

The Company has a diverse deposit book by industry sector. At December 31, 2025, our largest industry vertical was title insurance, with approximately $4.4 billion in total deposits. Deposits in the HOA vertical totaled $2.3 billion at December 31, 2025. Approximately 69% of our total deposits were commercial or municipal deposits at December 31, 2025.

Brokered deposits totaled $4.9 billion and $5.2 billion at December 31, 2025 and 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 in the future.

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

Non-interest bearing demand deposits grew by 20%, or $1.5 billion during the year ended December 31, 2025. Total deposits grew by $1.5 billion and non-brokered deposits grew by $1.8 billion during the year ended December 31, 2025.

The following table presents information about the Company's insured and collateralized deposits as of December 31, 2025 (dollars in thousands):

The estimated amount of uninsured deposits at December 31, 2025 and 2024, was $15.4 billion and $13.7 billion, respectively. Collateralized and affiliate deposits are included in these amounts. Time deposit accounts with balances of $250,000 or more totaled $774 million and $779 million at December 31, 2025 and 2024, respectively. The following table shows scheduled maturities of estimated uninsured time deposits as of December 31, 2025 (in thousands):

For additional information about Deposits, see Note 6 to the consolidated financial statements.

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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 December 31, 2025 (dollars in thousands):

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 December 31, 2025 (dollars in thousands):

See Note 10 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):

In August 2025, the Company redeemed all of its outstanding senior notes due November 2025 at par value plus accrued interest.

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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 unpledged securities. Additional sources of liquidity include cash flows from operations, wholesale deposits, cash flow from the Bank's amortizing securities and loan portfolios, repurchase agreements and the sale of investment securities. Management also has the ability to exert substantial control over the rate and timing of loan production, and resultant requirements for liquidity to fund new loans.

The following chart presents the components of same day available liquidity at December 31, 2025 and 2024 (in millions):

Same Day Available Liquidity

The increase in same day available liquidity as compared to December 31, 2024 reflected the decline in outstanding FHLB advances, increasing FHLB capacity. At December 31, 2025, the ratio of estimated insured and collateralized deposits to total deposits was 59% and the ratio of available liquidity to estimated uninsured, uncollateralized deposits was 138%. As a commercially focused bank, due to the inherent nature of commercial deposits and the fact that deposit insurance is designed primarily to protect consumers, a significant portion of our deposits are uninsured.

Our ALM policy establishes limits or operating risk thresholds for a number of measures of liquidity which are monitored at least monthly by the ALCO and quarterly by the Board of Directors. Some of the measures currently used to dimension liquidity risk and manage liquidity are a wholesale funding ratio, the ratio of available liquidity to uninsured/non-collateralized deposits, the ratio of available operational liquidity (which excludes availability at the FRB) to volatile liabilities, a liquidity stress test coverage ratio, the loan to deposit ratio, a one-year liquidity ratio, a measure of available on-balance sheet liquidity, the ratio of brokered deposits to total deposits and large depositor concentrations. We also have single depositor relationship limits. Our liquidity management framework incorporates a robust contingency funding plan and liquidity stress testing framework.

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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:

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.

The following table presents the Company's material contractual cash requirements for the following 12 months, as of December 31, 2025 (in thousands):

(1)Includes interest to be paid on the outstanding contractual obligations.

The majority of term deposits and FHLB advances are expected to roll over into new instruments; this amount therefore does not represent future anticipated cash requirements. Additionally, as discussed in Note 15 to the consolidated financial statements, the Bank had $145 million in outstanding commitments to fund loans and $5.2 billion in unfunded commitments under existing lines of credit at December 31, 2025. Many of these commitments are expected to expire without being fully funded and, therefore, also do not necessarily represent future cash requirements.

Capital

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.

See Note 13 to the consolidated financial statements for more information about the Company's and the Bank's regulatory capital ratios.

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Interest Rate Risk

A principal component of the Company’s risk of loss arising from adverse changes in the fair value of financial instruments, or market risk, is interest rate risk, including the risk that assets and liabilities with similar re-pricing characteristics may not reprice at the same time or to the same degree. A primary objective of the Company’s asset/liability management activities is to maximize net interest income, while maintaining acceptable levels of interest rate risk. The ALCO is responsible for establishing policies to manage exposure to interest rate risk, and to ensure procedures are established to monitor compliance with these policies. The policies established by the ALCO are approved at least annually by the Board of Directors and its Risk Committee. The Board of Directors or its Risk Committee monitor compliance with these policies at least quarterly.

Management believes that the simulation of net interest income in different interest rate environments provides the most meaningful measure of interest rate risk. Income simulation analysis is designed to capture not only the potential of all assets and liabilities to mature or reprice, but also the probability that they will do so. Income simulation also attends to the relative interest rate sensitivities of these items, and projects their behavior over an extended period of time. Finally, income simulation permits management to assess the probable effects on the balance sheet not only of changes in interest rates, but also of proposed strategies for responding to them. Simulation of changes in EVE in various interest rate environments is also a meaningful measure of interest rate risk.

Net Interest Income Simulation

The income simulation model analyzes interest rate sensitivity by projecting net interest income over 12- and 24-month periods in a most likely rate scenario based on a consensus forward curve versus net interest income in alternative rate scenarios. Management continually reviews and refines its interest rate risk management processes in response to changes in the interest rate environment, the economic climate and observed customer behavior. Currently, our interest rate risk management framework is based on modeling instantaneous rate shocks to a static balance sheet, assuming that maturing instruments are replaced with like instruments at forward rates, of plus and minus 100, 200, 300 and 400 basis point parallel shifts. In lower interest rate environments, we may not model more extreme declining rate scenarios and in certain macro-environments, we may model shocks of more than 400 basis points. Our ALM policy has established limits for the plus and minus 100 and 200 basis points shock scenarios. We also model a variety of dynamic balance sheet scenarios, various yield curve slopes, non-parallel shifts and alternative depositor behavior, beta and decay assumptions. We continually evaluate the scenarios being modeled with a view toward adapting them to changing economic conditions, expectations and trends.

The following table presents the impact on forecasted net interest income compared to a "most likely" scenario, based on the consensus forward curve, in static balance sheet, parallel rate shock scenarios of plus and minus 100 and 200 basis points at the dates indicated:

EVE Simulation

The following table illustrates the modeled change in EVE in the indicated scenarios at the dates indicated: