BankUnited (NYSE:BKU) reported third-quarter 2026 net income of $72 million, or $1.01 per share, while adjusted net income excluding securities losses was $74 million, or $1.03 per share. The adjusted result compared with $0.96 per share in the prior quarter and $0.94 per share a year earlier.
Chairman, President and CEO Raj Singh said profitability measures improved during the quarter, including adjusted return on assets of 0.84% and return on equity of 9.8%. He attributed the gains to market-share expansion, deeper customer relationships and pricing discipline.
“ROA, ROE, margin, EPS, everything improved,” Singh said, adding that the company has emphasized profitability rather than pursuing volume for its own sake.
Margin Expansion and Fourth-Quarter Outlook
Net interest income increased $5 million from the second quarter and $11 million from a year earlier, according to Chief Financial Officer Jim Mackey. Net interest margin rose 10 basis points sequentially and 16 basis points year over year to 3.16%, exceeding the company’s prior expectation that it would reach 3.15% in the fourth quarter.
Mackey said higher securities yields added 4 basis points to margin during the quarter, while higher core loan yields added another 4 basis points. Funding optimization, including reduced reliance on wholesale funding, accounted for the remaining 2 basis points.
Average deposit costs declined 6 basis points sequentially to 1.99%. Singh said the decline was notable because average noninterest-bearing deposits were essentially flat during the quarter, meaning the improvement came largely from interest-bearing deposit pricing.
For the fourth quarter, BankUnited expects net interest margin of about 3.2%, assuming one additional 25-basis-point Federal Reserve rate increase in December. Mackey said the projected expansion is expected to be driven primarily by the company’s slight asset sensitivity, with loan repricing benefits exceeding the pace of deposit-cost resets.
Management said it intends to keep its balance sheet broadly rate-neutral over time rather than make a directional interest-rate call. Singh noted that new commercial and commercial real estate loan originations have increasingly been floating-rate loans, while the company has used securities to manage interest-rate exposure.
Deposits, Lending and Business Mix
Noninterest-bearing deposits represented 32.2% of total deposits at quarter-end, compared with 30.1% a year earlier. Average total deposits excluding brokered deposits increased about $1 billion year over year. Chief Operating Officer Tom Cornish said service-charge revenue on deposits rose 19.4% from the third quarter of 2025, reflecting treasury-services penetration, operating-account growth and pricing discipline.
Average noninterest-bearing deposits were flat from the prior quarter, partly reflecting lower activity in title-related accounts as higher long-term interest rates affected mortgage origination activity. Singh said BankUnited continued to add title-business customers, but average activity in those accounts declined in late August and September.
The company originated slightly more than $1.1 billion of loans during the quarter. Average core loans increased $706 million, or 4%, from a year earlier. Average commercial real estate loans rose about $75 million sequentially and 10% year over year, while average mortgage warehouse balances increased $133 million, or 18%, from the prior quarter.
Loan balances were affected by payoffs, delayed closings and portfolio positioning. Management said it expects a seasonally strong fourth quarter, with core loan ending balances projected between $17.6 billion and $17.7 billion. Mackey said about two-thirds of expected fourth-quarter growth could come from C&I-related businesses and about one-third from commercial real estate.
Singh highlighted the company’s commercial banking segment, which serves smaller-ticket borrowers generally in the $5 million to $10 million range. He said the business has grown at double-digit rates for two consecutive years and is expected to record a third year of double-digit growth. The segment typically generates full banking relationships and loan-to-deposit ratios near 100%, he said.
- Fourth-quarter noninterest-bearing deposits are projected at $8.65 billion.
- Fourth-quarter net interest income is projected at $265 million.
- Fourth-quarter noninterest income is expected to improve toward more normalized levels.
- Fourth-quarter noninterest expense is expected to be about $178 million.
Securities Actions, Credit and Capital
BankUnited recorded a $2.3 million loss on securities sales during the quarter. Mackey said the company sold seasoned, shorter-duration securities and reinvested the proceeds into longer-dated securities with more attractive yields. The actions were intended to support net interest margin and complement the company’s balance-sheet positioning.
Management said the securities sold were generally less than one year from maturity, while reinvestments were largely in the three- to five-year duration range. Mackey said the securities involved totaled more than $1 billion but less than $2 billion in book value.
Noninterest income totaled $20 million, down $9 million from the prior quarter and $6 million from a year earlier. In addition to the securities loss, the quarter included a $1.1 million loss related to sales of certain lease assets and a $1.9 million decline in bank-owned life insurance value. Mackey said the BOLI performance can fluctuate during periods of rate volatility and is expected to normalize over time.
Credit trends remained favorable, according to management. Net charge-offs stayed low, criticized and classified loans declined 14% from a year earlier, and nonperforming loans fell 30%. The nonperforming-assets ratio improved to 0.77% from 1.10% a year earlier. Provision expense totaled $9 million, while reserve coverage increased 2 basis points to about 0.93% of loans through qualitative overlays.
Singh said the company remains selective in non-depository financial institution lending, having reduced exposure to private-credit-fund and business-development-company-related lending. Management said overall NDFI exposure was a little more than 5% of total loans, with the portion tied to private-credit funds declining to less than $1.2 billion from roughly $1.5 billion late last year.
BankUnited repurchased 2.1 million shares for about $97 million during the quarter. Including dividends and repurchases, the company returned $278 million of capital in the first nine months of 2026. Its common equity tier 1 ratio stood at 12.1%.
Management said it expects to complete the remaining amount under its existing repurchase authorization and discuss a potential renewal with its board later this year. The company continues to view a CET1 ratio in the mid-11% range as an appropriate medium-term target.
About BankUnited (NYSE:BKU)
BankUnited, Inc (NYSE:BKU) is the bank holding company for BankUnited, N.A., a full-service commercial bank headquartered in Miami Lakes, Florida. The company provides banking and financial services to businesses, institutions and individual customers, with an emphasis on commercial banking.
BankUnited offers commercial and industrial loans, commercial real estate and multifamily financing, residential lending, mortgage warehouse facilities, consumer loans and deposit products. Its services also include treasury management, cash management, online and mobile banking, wealth management and other financial solutions designed to support business and personal banking needs.
The bank primarily serves customers in Florida and the New York metropolitan area, while its commercial banking activities extend to selected markets in other parts of the United States.
