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 and six months ended June 30, 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 (1) an inability to successfully execute our core business strategy; (2) adverse events or conditions impacting the financial services industry, (3) our ability to access capital, including the impact of our credit rating; (4) credit risk inherent in the business of making loans and embedded in our securities portfolio, including inadequate allowance for credit losses and real estate market conditions and valuations; (5) interest rate risk, (6) liquidity risks, (7) risks related to the regulation of our industry, (8) operational risk, including dependence on information technology and third party service providers and the risk of systems failures, interruptions or breaches of security or inability to keep pace with technological change; (9) reputational risk, (10) the impact of conditions in the financial markets and economic conditions generally; (11) ineffective risk management or internal controls; and (12) the selection and application of accounting policies and methods and related assumptions and estimates. 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.

Executive 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.

Second quarter 2026 results compared to first quarter 2026:

•Net income was $70.7 million, or $0.97 per diluted share, up from $61.9 million, or $0.83, per diluted share.

•PPNR, a non-GAAP measure, increased by 3%, to $109.9 million from $106.3 million.

•Annualized ROAA increased to 0.81% from 0.72% and annualized ROAE improved to 9.3% from 8.1%.

•The net interest margin, calculated on a tax-equivalent basis, expanded to 3.06%, up 0.07%, from 2.99%.

•Total deposits, excluding brokered deposits, grew by $1 billion.

•NIDDA increased by $991 million, or 11%, and represented 34% of total deposits; average NIDDA was up 7% or $564 million.

•Wholesale funding, including FHLB advances and brokered deposits, declined by $1.4 billion reflecting continued balance sheet repositioning.

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•Total loans declined by $206 million due to continued purposeful runoff in non-core loans. Average core loans increased by $195 million.

•Total criticized and classified loans increased by $7 million, or 1%, while non-performing loans declined by $51 million, or 19%. The NPA ratio improved to 0.66%, down 0.13%; the annualized net charge-off ratio was 0.11%, down 0.50%.

•The ratio of the ACL to total loans increased to 0.91% from 0.87%; the ratio of the ACL to non-performing loans increased to 97.14% from 75.90%; the provision for credit losses was down $9 million.

•At June 30, 2026, CET1 was 12.3%; the ratio of tangible common equity to tangible assets was 8.4%.

•Book value and tangible book value per common share were, $41.55 and $40.48, respectively, at June 30, 2026, compared to $41.11 and $40.05, respectively, at March 31, 2026.

•The Company repurchased approximately 1.1 million shares of its common stock for an aggregate purchase price of $50.1 million.

Our results for the second quarter of 2026 were driven primarily by continued balance sheet repositioning and improvements in funding mix. Growth in NIDDA and core deposits in general, together with lower brokered deposits and wholesale funding, contributed to lower funding costs and higher net interest margin. Profitability improved during the quarter, as reflected in increases in net income, pre-provision net revenue and returns on average assets and equity. Asset quality metrics also improved, including lower non-performing loan and net charge-off ratios, while capital and tangible book value metrics remained strong.

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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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

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