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BankUnited's Q2 Earnings Beat on Higher NII & Non-Interest Income
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Key Takeaways
BKU reported Q2 EPS of $0.91, up from $0.72 last year and ahead of the $0.79 estimate.
Revenues grew 9.5% on higher NII and non-interest income, while provisions for credit losses declined.
Total deposits rose 2.1%, but loans slipped and non-performing assets climbed to 1.08%.
BankUnited, Inc.’s (BKU - Free Report) second-quarter 2025 earnings of 91 cents per share surpassed the Zacks Consensus Estimate of 79 cents. The bottom line compared favorably with 72 cents in the prior-year quarter.
Results benefited from growth in net interest income (NII) and non-interest income alongside a decline in provisions. A rise in deposits was another positive. However, higher expenses and a fall in loan balance were the undermining factors.
Net income totaled $68.8 million, up 28% from the year-ago quarter. Our estimate for the metric was $58.2 million.
BankUnited’s Revenues Rise, Expenses Up
Quarterly net revenues were $273.9 million, up 9.5% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $265.6 million.
NII was $246.1 million, growing 8.9%. Net interest margin (NIM) expanded 21 basis points (bps) to 2.93%. Our estimates for NII and NIM were $241.3 million and 2.88%, respectively.
Non-interest income of $27.8 million rose 15%. The increase was mainly driven by a rise in deposit service charges and fees, and other non-interest income. We had projected a non-interest income of $23.9 million.
Non-interest expenses rose 4.2% to $164.3 million. The rise was due to higher employee compensation and benefits costs, technology costs and other non-interest expenses, partially offset by lower depreciation of operating lease equipment costs and deposit insurance expense. Our estimate for non-interest expenses was $169.7 million.
As of June 30, 2025, total loans were $23.9 billion, down marginally from the prior quarter. Total deposits amounted to $28.6 billion, up 2.1%. Our estimates for total loans and total deposits were $24.6 billion and $29.5 billion, respectively.
BKU’s Credit Quality: Mixed Bag
In the reported quarter, BankUnited recorded a provision of credit losses of $15.7 million, down 19.7% from the prior-year quarter. We had expected the metric to be $15.8 million.
As of June 30, 2025, the ratio of net charge-offs to average loans was 0.27%, up 35 bps year over year. Also, the non-performing assets ratio was 1.08%, up 58 bps.
BKU’s Capital & Profitability Ratios Improve
As of June 30, 2025, the Common Equity Tier 1 risk-based capital ratio was 12.2%, up from 11.6%. The total risk-based capital ratio was 14.3%, increasing from 13.6% as of June 30, 2024.
At the end of the second quarter, the return on average assets was 0.78%, up from 0.61% in the year-earlier quarter. Return on average stockholders’ equity was 9.4%, rising from 8%.
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
Webster Financial (WBS - Free Report) reported second-quarter 2025 earnings per share (EPS) of $1.52, which beat the Zacks Consensus Estimate of $1.41. Also, the reported figure compared favorably with the EPS of $1.26 reported a year ago.
Webster’s results benefited from a rise in NII and non-interest income. Higher loan and deposit balances and a decline in provision were encouraging too. However, an increase in non-interest expenses acted as a spoilsport.
Bank OZK’s (OZK - Free Report) second-quarter 2025 EPS of $1.58 surpassed the Zacks Consensus Estimate of $1.51. Moreover, the bottom line reflected a rise of 3.9% from the prior-year quarter’s actual.
Overall, results benefited from a rise in NII and non-interest income, and lower provisions. Also, higher loans and deposit balances were other positives. However, higher non-interest expenses acted as spoilsports for OZK.
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BankUnited's Q2 Earnings Beat on Higher NII & Non-Interest Income
Key Takeaways
BankUnited, Inc.’s (BKU - Free Report) second-quarter 2025 earnings of 91 cents per share surpassed the Zacks Consensus Estimate of 79 cents. The bottom line compared favorably with 72 cents in the prior-year quarter.
Results benefited from growth in net interest income (NII) and non-interest income alongside a decline in provisions. A rise in deposits was another positive. However, higher expenses and a fall in loan balance were the undermining factors.
Net income totaled $68.8 million, up 28% from the year-ago quarter. Our estimate for the metric was $58.2 million.
BankUnited’s Revenues Rise, Expenses Up
Quarterly net revenues were $273.9 million, up 9.5% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $265.6 million.
NII was $246.1 million, growing 8.9%. Net interest margin (NIM) expanded 21 basis points (bps) to 2.93%. Our estimates for NII and NIM were $241.3 million and 2.88%, respectively.
Non-interest income of $27.8 million rose 15%. The increase was mainly driven by a rise in deposit service charges and fees, and other non-interest income. We had projected a non-interest income of $23.9 million.
Non-interest expenses rose 4.2% to $164.3 million. The rise was due to higher employee compensation and benefits costs, technology costs and other non-interest expenses, partially offset by lower depreciation of operating lease equipment costs and deposit insurance expense. Our estimate for non-interest expenses was $169.7 million.
As of June 30, 2025, total loans were $23.9 billion, down marginally from the prior quarter. Total deposits amounted to $28.6 billion, up 2.1%. Our estimates for total loans and total deposits were $24.6 billion and $29.5 billion, respectively.
BKU’s Credit Quality: Mixed Bag
In the reported quarter, BankUnited recorded a provision of credit losses of $15.7 million, down 19.7% from the prior-year quarter. We had expected the metric to be $15.8 million.
As of June 30, 2025, the ratio of net charge-offs to average loans was 0.27%, up 35 bps year over year. Also, the non-performing assets ratio was 1.08%, up 58 bps.
BKU’s Capital & Profitability Ratios Improve
As of June 30, 2025, the Common Equity Tier 1 risk-based capital ratio was 12.2%, up from 11.6%. The total risk-based capital ratio was 14.3%, increasing from 13.6% as of June 30, 2024.
At the end of the second quarter, the return on average assets was 0.78%, up from 0.61% in the year-earlier quarter. Return on average stockholders’ equity was 9.4%, rising from 8%.
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 #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of BankUnited’s Peers
Webster Financial (WBS - Free Report) reported second-quarter 2025 earnings per share (EPS) of $1.52, which beat the Zacks Consensus Estimate of $1.41. Also, the reported figure compared favorably with the EPS of $1.26 reported a year ago.
Webster’s results benefited from a rise in NII and non-interest income. Higher loan and deposit balances and a decline in provision were encouraging too. However, an increase in non-interest expenses acted as a spoilsport.
Bank OZK’s (OZK - Free Report) second-quarter 2025 EPS of $1.58 surpassed the Zacks Consensus Estimate of $1.51. Moreover, the bottom line reflected a rise of 3.9% from the prior-year quarter’s actual.
Overall, results benefited from a rise in NII and non-interest income, and lower provisions. Also, higher loans and deposit balances were other positives. However, higher non-interest expenses acted as spoilsports for OZK.