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BKU posted higher NII, fee income and lower credit loss provisions, but expenses rose 6.3% y/y.
BankUnited reported lower sequential loans and deposits, while credit quality metrics improved y/y.
Shares of BankUnited, Inc. (BKU - Free Report) lost 4.4% following the release of its second-quarter 2026 results. Second-quarter earnings of 97 cents per share missed the Zacks Consensus Estimate of $1.02. However, the bottom line rose 6.6% from the prior-year quarter.
Results were primarily hurt by a rise in non-interest expenses. Also, sequential declines in loans and deposits were negatives. However, higher net interest income (NII) and fee income, along with lower provisions, provided some support.
Net income totaled $70.7 million, up 2.8% from the year-ago quarter. Our estimate for the metric was $73.1 million.
BankUnited’s Revenues Improve, Expenses Rise
Quarterly net revenues were $284.6 million, up 3.9% year over year. However, the top line missed the Zacks Consensus Estimate of $290.6 million.
NII was $255.3 million, which rose 3.7% year over year. The net interest margin (NIM) expanded 13 basis points (bps) to 3.06%. Our estimates for NII and NIM were $264.5 million and 3.08%, respectively.
Non-interest income of $29.2 million increased 5.1% from the prior-year quarter. The rise was mainly driven by higher deposit service charges and fees, net gain on investment securities, and capital markets income. We had projected non-interest income of $28.6 million.
Non-interest expenses increased 6.3% to $174.6 million. The rise was due to higher employee compensation and benefits costs, occupancy and equipment costs, and other non-interest expenses, partially offset by lower depreciation of operating lease equipment costs, deposit insurance expenses and technology costs. Our estimate for non-interest expenses was $176.6 million.
As of June 30, 2026, net loans were $23.7 billion, down marginally from the prior quarter. Total deposits amounted to $28.9 billion, down from $29.4 billion in the previous quarter. Our estimates for total loans and total deposits were $24.4 billion and $29.3 billion, respectively.
BKU’s Credit Quality Improves
In the reported quarter, BankUnited recorded a provision for credit losses of $15.6 million, down marginally from the prior-year quarter. We had expected the metric to be $15.9 million.
As of June 30, 2026, the ratio of net charge-offs to average loans was 0.11%, down from 0.21% in the year-ago period. Also, the non-performing assets ratio was 0.66%, down from 1.08%.
BKU’s Capital & Profitability Ratios: Mixed Bag
As of June 30, 2026, the Common Equity Tier 1 risk-based capital ratio was 12.3%, up from 12.2% as of June 30, 2025. The total risk-based capital ratio was 13.9%, down from 14.3%.
In the reported quarter, the return on average assets was 0.81%, up from 0.78% in the year-earlier quarter. Return on average stockholders’ equity was 9.3%, down from 9.4%.
BKU’s Share Repurchase Update
During the quarter, BankUnited repurchased 1.1 million shares for $50.1 million.
Our View on BankUnited
An elevated expense base, along with significant exposure to commercial real estate and residential loans, is expected to weigh on BankUnited’s profitability. Additionally, weak credit quality remains a near-term headwind. However, higher NII, diverse fee income and stabilizing funding costs are expected to offer some support.
BankUnited, Inc. Price, Consensus and EPS Surprise
Commerce Bancshares Inc.’s (CBSH - Free Report) second-quarter 2026 earnings of $1.10 per share surpassed the Zacks Consensus Estimate of $1.04. The bottom line reflected a rise of 1% from the prior-year quarter.
CBSH’s results primarily benefited from higher NII and a rise in non-interest income. The sequential rise in loan balances acted as a tailwind. However, higher expenses and provisions hurt CBSH’s results to some extent.
F.N.B. Corporation (FNB - Free Report) reported second-quarter 2026 earnings of 42 cents per share, which matched the Zacks Consensus Estimate. The bottom line jumped 16.7% year over year.
FNB’s results primarily benefited from higher NII, a rise in non-interest income and lower provisions. Higher average loans and deposits were other positives. However, higher non-interest expenses hurt the results to some extent.
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BankUnited Stock Declines 4.4% on Q2 Earnings Miss, Expenses Rise Y/Y
Key Takeaways
Shares of BankUnited, Inc. (BKU - Free Report) lost 4.4% following the release of its second-quarter 2026 results. Second-quarter earnings of 97 cents per share missed the Zacks Consensus Estimate of $1.02. However, the bottom line rose 6.6% from the prior-year quarter.
Results were primarily hurt by a rise in non-interest expenses. Also, sequential declines in loans and deposits were negatives. However, higher net interest income (NII) and fee income, along with lower provisions, provided some support.
Net income totaled $70.7 million, up 2.8% from the year-ago quarter. Our estimate for the metric was $73.1 million.
BankUnited’s Revenues Improve, Expenses Rise
Quarterly net revenues were $284.6 million, up 3.9% year over year. However, the top line missed the Zacks Consensus Estimate of $290.6 million.
NII was $255.3 million, which rose 3.7% year over year. The net interest margin (NIM) expanded 13 basis points (bps) to 3.06%. Our estimates for NII and NIM were $264.5 million and 3.08%, respectively.
Non-interest income of $29.2 million increased 5.1% from the prior-year quarter. The rise was mainly driven by higher deposit service charges and fees, net gain on investment securities, and capital markets income. We had projected non-interest income of $28.6 million.
Non-interest expenses increased 6.3% to $174.6 million. The rise was due to higher employee compensation and benefits costs, occupancy and equipment costs, and other non-interest expenses, partially offset by lower depreciation of operating lease equipment costs, deposit insurance expenses and technology costs. Our estimate for non-interest expenses was $176.6 million.
BankUnited’s Loans & Deposits Decline Sequentially
As of June 30, 2026, net loans were $23.7 billion, down marginally from the prior quarter. Total deposits amounted to $28.9 billion, down from $29.4 billion in the previous quarter. Our estimates for total loans and total deposits were $24.4 billion and $29.3 billion, respectively.
BKU’s Credit Quality Improves
In the reported quarter, BankUnited recorded a provision for credit losses of $15.6 million, down marginally from the prior-year quarter. We had expected the metric to be $15.9 million.
As of June 30, 2026, the ratio of net charge-offs to average loans was 0.11%, down from 0.21% in the year-ago period. Also, the non-performing assets ratio was 0.66%, down from 1.08%.
BKU’s Capital & Profitability Ratios: Mixed Bag
As of June 30, 2026, the Common Equity Tier 1 risk-based capital ratio was 12.3%, up from 12.2% as of June 30, 2025. The total risk-based capital ratio was 13.9%, down from 14.3%.
In the reported quarter, the return on average assets was 0.81%, up from 0.78% in the year-earlier quarter. Return on average stockholders’ equity was 9.3%, down from 9.4%.
BKU’s Share Repurchase Update
During the quarter, BankUnited repurchased 1.1 million shares for $50.1 million.
Our View on BankUnited
An elevated expense base, along with significant exposure to commercial real estate and residential loans, is expected to weigh on BankUnited’s profitability. Additionally, weak credit quality remains a near-term headwind. However, higher NII, diverse fee income and stabilizing funding costs are expected to offer some support.
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 Other Banks
Commerce Bancshares Inc.’s (CBSH - Free Report) second-quarter 2026 earnings of $1.10 per share surpassed the Zacks Consensus Estimate of $1.04. The bottom line reflected a rise of 1% from the prior-year quarter.
CBSH’s results primarily benefited from higher NII and a rise in non-interest income. The sequential rise in loan balances acted as a tailwind. However, higher expenses and provisions hurt CBSH’s results to some extent.
F.N.B. Corporation (FNB - Free Report) reported second-quarter 2026 earnings of 42 cents per share, which matched the Zacks Consensus Estimate. The bottom line jumped 16.7% year over year.
FNB’s results primarily benefited from higher NII, a rise in non-interest income and lower provisions. Higher average loans and deposits were other positives. However, higher non-interest expenses hurt the results to some extent.