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BankUnited (BKU) Down 5% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for BankUnited, Inc. (BKU - Free Report) . Shares have lost about 5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is BankUnited due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for BankUnited, Inc. before we dive into how investors and analysts have reacted as of late.

BankUnited's Q2 Earnings Beat on Higher NII & Non-Interest Income

BankUnited’s 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 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.

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.

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.

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%.

2025 Outlook

Management projects total deposits to grow in mid-single digits, with non-interest-bearing demand deposits to rise in double digits.

For 2025, management anticipates NII to be slightly better than a mid-to-high single-digit range. NIM is expected to expand throughout the remainder of the year and reach almost 3%.

Management anticipates loan growth in the low single digits, with commercial and industrial (C&I) and CRE loans projected to rise in the mid-single-digit range. The company expects residential loans to continue shrinking.

Non-interest expenses are expected to increase in the mid-single digits range.

Provisions are expected to be slightly higher than the 2024 level.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, BankUnited has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a score of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

BankUnited has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

BankUnited is part of the Zacks Banks - Major Regional industry. Over the past month, The Bank of New York Mellon Corporation (BK - Free Report) , a stock from the same industry, has gained 1.8%. The company reported its results for the quarter ended June 2025 more than a month ago.

The Bank of New York Mellon reported revenues of $5.03 billion in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $1.94 for the same period compares with $1.51 a year ago.

The Bank of New York Mellon is expected to post earnings of $1.75 per share for the current quarter, representing a year-over-year change of +15.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.9%.

The Bank of New York Mellon has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.


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