BKU - BankUnited, Inc. Reports Third Quarter 2025 Results

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended September 30, 2025.

"We continued to deliver on improved profitability this quarter, with gains in EPS, ROA and ROE. We achieved our near-term target of a 3% margin as well." said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended September 30, 2025, the Company reported net income of $71.9 million, or $0.95 per diluted share, for an annualized return on average assets of 0.82%. For the immediately preceding quarter ended June 30, 2025, net income was $68.8 million, or $0.91 per diluted share and for the quarter ended September 30, 2024, net income was $61.5 million, or $0.81 per diluted share. For the nine months ended September 30, 2025, net income was $199.1 million, or $2.63 per diluted share compared to $163.2 million, or $2.17 per diluted share for the nine months ended September 30, 2024, an increase of 21% in diluted earnings per share.

Quarterly Highlights

• The net interest margin, calculated on a tax-equivalent basis, expanded by 0.07% to 3.00% for the quarter ended September 30, 2025 from 2.93% for the immediately preceding quarter. Net interest income grew by $4.0 million compared to the prior quarter and by $16.0 million or 7% compared to the comparable quarter of the prior year.
• As expected, non-interest bearing demand deposits ("NIDDA") declined by $488 million for the quarter, in part due to expected seasonality in the title solutions vertical, and represented 30% of total deposits at September 30, 2025. NIDDA was up $990 million compared to September 30, 2024, one year ago. Average NIDDA grew by $210 million for the quarter ended September 30, 2025 compared to the immediately preceding quarter and by $741 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
• Total deposits was essentially flat quarter-over-quarter, declining by $28 million. Non-brokered deposits grew by $1.2 billion compared to one year ago but, as expected, declined by $439 million for the quarter ended September 30, 2025 largely due to normal seasonality in the title solutions and government banking verticals.
• The average cost of total deposits declined by 0.09% to 2.38% for the quarter ended September 30, 2025 from 2.47% for the immediately preceding quarter ended June 30, 2025. The spot APY of total deposits declined by 0.06% to 2.31% at September 30, 2025 from 2.37% at June 30, 2025. The spot APY of total deposits was 2.93% at September 30, 2024, one year ago.
• For the quarter ended September 30, 2025, total loans declined by $231 million. In the aggregate, consistent with our balance sheet strategy, the residential, franchise, equipment and municipal finance portfolios declined by $245 million while the core commercial portfolio segments and mortgage warehouse grew by a combined $14 million.
• The loan to deposit ratio was 82.8% at September 30, 2025, compared to 83.6% at June 30, 2025.
• Total criticized and classified loans declined by $3 million for the quarter ended September 30, 2025 while total non-accrual loans increased by $3 million. The annualized net charge-off ratio for the nine months ended September 30, 2025 was 0.26%; the net charge-off ratio for the trailing twelve months was 0.27%. The NPA ratio at September 30, 2025 was 1.10%, including 0.11% related to the guaranteed portion of non-accrual SBA loans, compared to 1.08%, including 0.10% related to the guaranteed portion of non-accrual SBA loans, at June 30, 2025.
• The ratio of the ACL to total loans was 0.93% at September 30, 2025, consistent with the prior quarter-end. The ratio of the ACL to non-performing loans was 57.95%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.35% at September 30, 2025 and the ACL to loans ratio for CRE office loans was 2.21%. The provision for credit losses was $11.6 million for the quarter ended September 30, 2025 compared to $15.7 million for the preceding quarter.
• At September 30, 2025, the weighted average LTV of the CRE portfolio was 54.6%, the weighted average DSCR was 1.77, 49% of the portfolio was collateralized by properties located in Florida and 22% was collateralized by properties located in the New York tri-state area. For the office sub-segment, the weighted average LTV was 65.0%, the weighted average DSCR was 1.57, 61% was collateralized by properties in Florida and was predominantly suburban; 18% was collateralized by properties located in the New York tri-state area.
• Our capital position is robust. At September 30, 2025, CET1 was 12.5% at a consolidated level. Pro-forma CET1 including accumulated other comprehensive income was 11.7% at September 30, 2025. The ratio of tangible common equity to tangible assets increased to 8.4% at September 30, 2025.
• Book value and tangible book value per common share continued to accrete, to $40.30 and $39.27, respectively, at September 30, 2025 compared to $39.26 and $38.23, respectively, at June 30, 2025 and $37.56 and $36.52, respectively, at September 30, 2024. This represents an 8% year-over-year increase in tangible book value per share.
• As previously reported, in August 2025, the Company redeemed all of its outstanding senior notes due November 2025 at par value plus accrued interest.

Loans

Loan portfolio composition at the dates indicated follows (dollars in thousands):

For the quarter ended September 30, 2025, the core C&I and CRE portfolio segments declined by a net $69 million. The CRE portfolio segments grew by $61 million while the C&I portfolio segments declined by $130 million. MWL grew by $83 million. Consistent with our balance sheet strategy, residential loans declined by $173 million.

Our commercial real estate exposure totaled 28% of loans and 185% of the Bank's total risk based capital at September 30, 2025. By comparison, based on call report data as of June 30, 2025 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 225%.

Asset Quality and the ACL

The following table presents information about the ACL at the dates indicated as well as net charge-off rates for the periods ended September 30, 2025, June 30, 2025 and December 31, 2024 (dollars in thousands):

The ACL at September 30, 2025 represents management's estimate of lifetime expected credit losses, or the amount of amortized cost not expected to be collected, given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended September 30, 2025, the provision for credit losses, including portions related to both funded and unfunded loan commitments, was $11.6 million, compared to $15.7 million for the immediately preceding quarter ended June 30, 2025 and $9.2 million for the quarter ended September 30, 2024. The most significant factors impacting the provision for credit losses for the quarter ended September 30, 2025 were an improvement in our economic forecast, largely offset by increases in certain qualitative factors and in specific reserves. The majority of the increase in specific reserves related to one C&I loan and one CRE office loan. Net charge-offs also impacted the ACL.

The following table summarizes the activity in the ACL for the periods indicated (in thousands):

Charge-offs for the quarter ended September 30, 2025 related primarily to one C&I loan and one CRE office loan. As detailed in the following table, total criticized and classified commercial loans was stable quarter-over-quarter, declining by $3 million (in thousands):

Net Interest Income

Net interest income for the quarter ended September 30, 2025 was $250.1 million, compared to $246.1 million for the immediately preceding quarter ended June 30, 2025. Interest income decreased by $0.9 million for the quarter ended September 30, 2025 while interest expense decreased by $4.9 million. The decline in interest expense related to both a lower average cost of funds and lower average balance of interest bearing liabilities.

The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.07% to 3.00% for the quarter ended September 30, 2025, from 2.93% for the immediately preceding quarter ended June 30, 2025. Factors impacting the net interest margin for the quarter ended September 30, 2025 were:

• The net interest margin was positively impacted by a more favorable funding mix. Average NIDDA increased as a percentage of both total deposits and total funding, growing by $210 million for the quarter ended September 30, 2025, while average interest bearing liabilities declined by $526 million.
• The average cost of interest bearing liabilities declined to 3.52% for the quarter ended September 30, 2025 from 3.57% for the prior quarter.
• The average rate paid on interest bearing deposits declined to 3.40% for the quarter ended September 30, 2025, from 3.48% for the quarter ended June 30, 2025. This decline reflected the maturity of higher-rate term deposits, actions taken to proactively reduce deposit pricing in response to a lower Federal funds rate and higher priced brokered deposits, on average, declining for the quarter. The redemption of higher cost senior debt also positively impacted the cost of funds.
• The average rate paid on FHLB advances increased to 3.94% for the quarter ended September 30, 2025 from 3.79% for the quarter ended June 30, 2025, primarily due to the expiration of cash flow hedges.
• The yield on interest earning assets held flat quarter-over-quarter at 5.38%. While the tax equivalent yield on loans declined marginally, the tax equivalent yield on investment securities increased to 5.13% for the quarter ended September 30, 2025, from 5.06% for the quarter ended June 30, 2025. This increase related to coupon resets during periods of rate volatility and to changes in portfolio composition.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Wednesday, October 22, 2025 with Chairman, President and Chief Executive Officer Rajinder P. Singh, Chief Financial Officer Leslie N. Lunak, Chief Operating Officer Thomas M. Cornish and incoming Chief Financial Officer, James G. Mackey.

The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com . To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register-conf.media-server.com/register/BIfa1eb10c2cce4ebcba9bc778ae3f56ae . For those unable to join the live event, an archived webcast will be available on the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast.

About BankUnited, Inc.

BankUnited, Inc., with total assets of $35.1 billion at September 30, 2025, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida, with operations in Florida, New York, Dallas, Atlanta, Morristown, New Jersey, and Charlotte, North Carolina. BankUnited provides a full range of consumer and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions, and offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com . BankUnited can be found on Facebook at facebook.com/BankUnited.official , LinkedIn @BankUnited and on X @BankUnited .

Forward-Looking Statements

This press release 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. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries 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 contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitation) those 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 but not limited to adverse events or conditions 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. These factors should not be construed as exhaustive. 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. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website ( www.sec.gov ).