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BKU's Q4 Earnings Beat on Higher NII & Lower Provisions, Stock Down
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BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2024 earnings of 91 cents per share handily surpassed the Zacks Consensus Estimate of 71 cents. The bottom line compares favorably with 27 cents in the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results were aided by growth in net interest income (NII) and non-interest income alongside lower non-interest expenses and provisions. Also, stable deposits were another positive. However, a fall in loan balance and weak asset quality were the undermining factors. Shares of BKU declined 1.4% during Wednesday’s trading session in light of these negatives.
Net income totaled $69.3 million, jumping from $20.8 million a year ago. Our estimate for the metric was $50.9 million.
For 2024, earnings per share (EPS) of $3.08 beat the Zacks Consensus Estimate of $2.89. The figure represents a rise of 29.4% from the previous year. Net income was $232.5 million, up from $178.7 million. Our estimate for net income was $214 million.
BankUnited’s Revenues Grow, Expenses Decline
Quarterly net revenues were $264.5 million, up 12.9% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $259.7 million.
Full-year net revenues were $1.01 billion, up 5.5% year over year. The top line met the Zacks Consensus Estimate.
NII was $239.3 million, growing 10.2%. We projected NII to be $234.8 million.
Net interest margin (NIM) expanded 24 basis points (bps) to 2.84%. Our estimate for the metric was 2.78%.
Non-interest income of $25.2 million jumped 47.5% from the prior-year quarter. The rise was driven by an increase in lease financing and other non-interest income. We had projected a non-interest income of $22.1 million.
Non-interest expenses fell 15.9% to $160.5 million. The decline was driven by a fall in deposit insurance expenses and the depreciation of operating lease equipment. Our estimate for non-interest expenses was $181.9 million.
As of Dec. 31, 2024, total loans were $24.3 billion, down marginally from the prior quarter. Total deposits amounted to $27.9 billion, stable with the prior quarter. Our estimates for total loans and total deposits were $25.4 billion and $26.5 billion, respectively.
BKU’s Credit Quality Deteriorates
In the reported quarter, BankUnited recorded a provision of credit losses of $11 million, which plunged 42.9% from the prior-year quarter. We had expected the metric to be $6.2 million.
As of Dec. 31, 2024, the ratio of net charge-offs to average loans was 0.16%, up 7 bps year over year. Also, the non-performing assets ratio was 0.73%, jumping 36 bps.
BKU’s Capital & Profitability Ratios Improve
As of Dec. 31, 2024, the Common Equity Tier 1 risk-based capital ratio was 12%, up from 11.4%. The total risk-based capital ratio was 14.1%, increasing from 13.4% as of Dec. 31, 2023.
At the end of the fourth quarter, the return on average assets was 0.78%, up from 0.23% in the year-earlier quarter. Return on average stockholders’ equity was 9.7%, rising from 3.2%.
Our View on BankUnited Stock
BankUnited’s efforts to grow fee income, low-cost deposits and relatively higher interest rates are expected to support revenue growth. However, an increase in expenses and significant exposure to commercial real estate and residential loans might affect financials.
BankUnited, Inc. Price, Consensus and EPS Surprise
Zions Bancorporation’s (ZION - Free Report) fourth-quarter 2024 EPS of $1.34 surpassed the Zacks Consensus Estimate of $1.26. Moreover, the bottom line surged 71.8% from the year-ago quarter.
ZION’s results were primarily aided by higher NII and non-interest income. Also, higher loans and deposits were other positives. However, higher provisions and a rise in adjusted non-interest expenses were major headwinds.
Comerica Incorporated (CMA - Free Report) reported fourth-quarter 2024 adjusted EPS of $1.2, missing the Zacks Consensus Estimate of $1.25. In the prior-year quarter, the company reported an EPS of $1.46.
Results were negatively impacted due to a fall in NII and a weak asset quality. However, a rise in deposit balance, solid fee income growth and a strong capital position offered support to CMA.
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BKU's Q4 Earnings Beat on Higher NII & Lower Provisions, Stock Down
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2024 earnings of 91 cents per share handily surpassed the Zacks Consensus Estimate of 71 cents. The bottom line compares favorably with 27 cents in the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results were aided by growth in net interest income (NII) and non-interest income alongside lower non-interest expenses and provisions. Also, stable deposits were another positive. However, a fall in loan balance and weak asset quality were the undermining factors. Shares of BKU declined 1.4% during Wednesday’s trading session in light of these negatives.
Net income totaled $69.3 million, jumping from $20.8 million a year ago. Our estimate for the metric was $50.9 million.
For 2024, earnings per share (EPS) of $3.08 beat the Zacks Consensus Estimate of $2.89. The figure represents a rise of 29.4% from the previous year. Net income was $232.5 million, up from $178.7 million. Our estimate for net income was $214 million.
BankUnited’s Revenues Grow, Expenses Decline
Quarterly net revenues were $264.5 million, up 12.9% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $259.7 million.
Full-year net revenues were $1.01 billion, up 5.5% year over year. The top line met the Zacks Consensus Estimate.
NII was $239.3 million, growing 10.2%. We projected NII to be $234.8 million.
Net interest margin (NIM) expanded 24 basis points (bps) to 2.84%. Our estimate for the metric was 2.78%.
Non-interest income of $25.2 million jumped 47.5% from the prior-year quarter. The rise was driven by an increase in lease financing and other non-interest income. We had projected a non-interest income of $22.1 million.
Non-interest expenses fell 15.9% to $160.5 million. The decline was driven by a fall in deposit insurance expenses and the depreciation of operating lease equipment. Our estimate for non-interest expenses was $181.9 million.
As of Dec. 31, 2024, total loans were $24.3 billion, down marginally from the prior quarter. Total deposits amounted to $27.9 billion, stable with the prior quarter. Our estimates for total loans and total deposits were $25.4 billion and $26.5 billion, respectively.
BKU’s Credit Quality Deteriorates
In the reported quarter, BankUnited recorded a provision of credit losses of $11 million, which plunged 42.9% from the prior-year quarter. We had expected the metric to be $6.2 million.
As of Dec. 31, 2024, the ratio of net charge-offs to average loans was 0.16%, up 7 bps year over year. Also, the non-performing assets ratio was 0.73%, jumping 36 bps.
BKU’s Capital & Profitability Ratios Improve
As of Dec. 31, 2024, the Common Equity Tier 1 risk-based capital ratio was 12%, up from 11.4%. The total risk-based capital ratio was 14.1%, increasing from 13.4% as of Dec. 31, 2023.
At the end of the fourth quarter, the return on average assets was 0.78%, up from 0.23% in the year-earlier quarter. Return on average stockholders’ equity was 9.7%, rising from 3.2%.
Our View on BankUnited Stock
BankUnited’s efforts to grow fee income, low-cost deposits and relatively higher interest rates are expected to support revenue growth. However, an increase in expenses and significant exposure to commercial real estate and residential loans might affect financials.
BankUnited, Inc. Price, Consensus and EPS Surprise
BankUnited, Inc. price-consensus-eps-surprise-chart | BankUnited, Inc. Quote
Currently, BKU carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of BankUnited’s Peers
Zions Bancorporation’s (ZION - Free Report) fourth-quarter 2024 EPS of $1.34 surpassed the Zacks Consensus Estimate of $1.26. Moreover, the bottom line surged 71.8% from the year-ago quarter.
ZION’s results were primarily aided by higher NII and non-interest income. Also, higher loans and deposits were other positives. However, higher provisions and a rise in adjusted non-interest expenses were major headwinds.
Comerica Incorporated (CMA - Free Report) reported fourth-quarter 2024 adjusted EPS of $1.2, missing the Zacks Consensus Estimate of $1.25. In the prior-year quarter, the company reported an EPS of $1.46.
Results were negatively impacted due to a fall in NII and a weak asset quality. However, a rise in deposit balance, solid fee income growth and a strong capital position offered support to CMA.