BankUnited Q3 Net Income $72M, EPS $1.01

BankUnited, Inc. (NYSE: BKU) reported net income of $72.2 million and diluted earnings per share of $1.01 for the third quarter of 2026, ending September 30. Excluding the impact of securities sales, the company stated adjusted net income was $73.9 million and adjusted diluted EPS was $1.03. Chairman, President and Chief Executive Officer Rajinder Singh attributed the results to continued deposit momentum and a net interest margin that expanded to 3.16%, a level the company noted was ahead of guidance.

The net interest margin increased by 16 basis points from the third quarter of 2025 and by 10 basis points from the second quarter of 2026. Average non-interest demand deposits rose by $824 million, or 10%, from a year ago, while average interest-bearing liabilities declined by $1.0 billion. This shift improved the average cost of deposits by 39 basis points from a year ago to 1.99%. The company reported that ending non-interest demand deposits decreased by $821 million, or 8%, from the prior quarter, a change it described as seasonal normalization following elevated inflows in the second quarter.

Credit trends showed mixed results. Criticized and classified loans decreased by $176 million, or 14%, from a year ago. The net charge-off ratio remained low at 0.11% in both the current and prior quarters, down from 0.25% a year ago. However, non-performing loans increased by $40 million, or 18%, from the prior quarter, while decreasing by $116 million, or 30%, from a year ago.

Loan portfolio dynamics reflected a deliberate repositioning strategy. Average core loans increased by $706 million, or 4%, from a year ago but decreased by $147 million, or 1%, from the prior quarter. Average commercial real estate loans grew by $624 million, or 10%, from a year ago. In contrast, average residential loans decreased by $621 million, or 9%, from a year ago, consistent with the company's balance sheet repositioning strategy. Average mortgage warehouse lending loans increased by $226 million, or 35%, from a year ago.

Non-interest income decreased from the prior quarter and from a year ago. The decline was primarily driven by a loss on the sale of investment securities. The company stated this loss resulted from the strategic sale of approximately $1.0 billion in lower-yielding securities and the redeployment of proceeds into higher-yielding investments to improve portfolio earning potential. Non-interest expense remained flat compared to the prior quarter but increased compared to a year ago due to higher employee compensation and deposit-related costs.

BankUnited repurchased approximately 2.1 million shares during the third quarter for an aggregate cost of $97.0 million.