BankUnited Profit Rises to $72.2 Million as Interest Margin Improves
Key Facts
BankUnited reported net income of $72.2 million in the third quarter of 2026, according to its earnings release, as net interest margin improved and deposit costs declined. Diluted earnings per share were $1.01 for the period, as the bank continued to repurchase shares. Net income rose from the second quarter of the same year, when the bank posted earnings of $70.7 million. Profit also exceeded the $71.9 million recorded in the corresponding period of 2025, although the annual improvement was modest compared with the quarterly change. Commenting on the results, the chief executive said the interest margin was "above our guidance," as the bank's deposit funding costs improved.
Net interest margin reached 3.16% in the third quarter, according to the bank, extending its improvement from the previous quarter of 2026. The margin stood at 3.06% in the second quarter, making its increase one of the most notable operating changes accompanying the period's results. A decline in the average cost of deposits to 1.99% helped support the improvement, according to the drivers cited by the bank in its earnings release. Margin drivers also included reinvestment of proceeds from the sale of low-yielding securities, alongside lower deposit funding costs. The improvement in interest profitability coincided with a contraction in average deposits excluding brokered deposits, rather than an increase in that average from the previous quarter.
On an adjusted basis excluding the impact of securities sales, BankUnited's net income totaled $73.9 million in the third quarter of 2026. The bank presented the figure as an adjusted non-GAAP measure, separating the impact of those sales from adjusted profit. Adjusted diluted earnings per share on the same basis were $1.03, according to figures the bank announced as part of its results for the period. Among other operating items, noninterest income totaled $19.8 million during the quarter, according to the earnings release. Noninterest expense was unchanged from the second quarter at $174.6 million, alongside the improvement in net interest margin.
On the funding side, average deposits excluding brokered deposits declined by $385 million from the second quarter of 2026, according to the bank. The decline came during a period in which management described deposit performance as maintaining its momentum, as part of its assessment of the bank's third-quarter performance. Management also pointed to the strength of the broader economy in its comments on the results, while the decline in average deposits coincided with a reduction in the cost of those funds. On the lending side, average commercial real estate loans rose by $75 million from the previous quarter, according to the release. The increase in average lending to the sector thus coincided with a contraction in average nonbrokered deposits during the same financial period.
In credit quality metrics, BankUnited reported a $40 million increase in nonperforming loans from the previous quarter of 2026. The third-quarter increase coincided with an unchanged net charge-off ratio, according to figures cited by the bank in its earnings release. The annualized ratio of net charge-offs to average loans was 0.11%, unchanged from its second-quarter level. On capital adequacy, the common equity tier 1 capital ratio stood at 12.1% during the period, according to the bank. The bank continued to return capital to shareholders through share repurchases, spending $97.0 million on buybacks during the quarter.
BankUnited's total assets stood at $34.6 billion at the end of the period, according to the balance sheet included in its quarterly earnings announcement. That balance was as of September 30, 2026, the end of the quarter in which the bank recorded an improvement in profit and margin. Results for the same period included an increase in average commercial real estate loans, alongside higher nonperforming loans and an unchanged net charge-off ratio. The bank scheduled its third-quarter earnings call for October 21, 2026, according to its earnings scheduling announcement. The call was set to begin at 9:00 a.m. Eastern Time to present and discuss the period's results.