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BankUnited, Inc. (BKU)·Q2 2025 Earnings Summary

Executive Summary

  • EPS of $0.91 beat consensus by roughly 13–14 cents as NIM expanded 12 bps to 2.93% and net interest income grew 5.6% QoQ; management credited deposit remix (NIDDA up $1.0B to 32% of deposits) and pricing discipline on loans and deposits . Consensus EPS for Q2 2025 was ~$0.78*.
  • Net revenue was $258.23M (NII after provision + noninterest income), modestly below consensus ($267.10M*), as provision for credit losses remained elevated and C&I loan payoffs offset production .
  • Credit mixed: criticized/classified loans fell $156M QoQ, but non-accrual loans rose $117M, mostly office-related; ACL/loans ticked to 0.93% and office reserve was 1.92% .
  • Capital actions and catalysts: Board authorized up to $100M share repurchase and redemption of $400M 4.875% senior notes due 2025; CFO succession announced (Jim Mackey to become CFO Nov. 1, 2025) .

Consensus values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Deposit remix drove margin expansion: “NIDDA grew 13% or $1.0 billion to 32% of total deposits…cost of deposits down 0.11% to 2.47%,” supporting NIM up 12 bps QoQ to 2.93% .
  • Pricing discipline and portfolio mix lifted loan yields while deposit rates fell: “Loan yield increased to 5.55%…average rate on interest-bearing deposits declined to 3.48%,” boosting NII QoQ by $13.0M .
  • Capital and shareholder returns strengthened: CET1 at 12.2%, TCE/TA 8.1%, tangible book value/share up 9% YoY to $38.23; new $100M buyback authorized .

What Went Wrong

  • Credit migration to non-accruals: NPLs increased by $117M QoQ, with $86M office-related; NPA/Assets rose to 1.08% from 0.76% .
  • C&I contraction despite solid production: C&I declined $199M due to unscheduled payoffs and strategic exits; total loans fell $56M QoQ .
  • Revenue miss vs consensus*: Net revenue of $258.23M below ~$267.10M* as provision remained $15.7M and non-accrual migration tempered reported earnings leverage .

Consensus values marked with * retrieved from S&P Global.

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Diluted EPS ($)$0.91 $0.78 $0.91
Net Interest Margin (%)2.84% 2.81% 2.93%
Net Interest Income ($MM)$239.26 $233.14 $246.12
Provision for Credit Losses ($MM)$11.00 $15.11 $15.70
Non-interest Income ($MM)$25.21 $22.27 $27.81
Net Revenue ($MM) (NII after provision + Noninterest)$250.09 (=$224.88+$25.21) $240.30 (=$218.03+$22.27) $258.23 (=$230.42+$27.81)

Segment Loan Composition (balances, $MM; mix %)

SegmentDec 31, 2024Mar 31, 2025Jun 30, 2025
Non-owner occupied CRE$5,652 (23.3%) $5,603 (23.4%) $5,830 (24.4%)
Construction & Land$562 (2.3%) $603 (2.5%) $644 (2.7%)
Owner-occupied CRE$1,941 (8.0%) $1,968 (8.2%) $1,942 (8.1%)
Commercial & Industrial$7,042 (28.9%) $6,917 (28.8%) $6,744 (28.2%)
Residential$7,581 (31.2%) $7,464 (31.1%) $7,304 (30.5%)
Total Loans$24,298 (100.0%) $23,990 (100.0%) $23,934 (100.0%)

Key KPIs and Balance Sheet

KPIQ4 2024Q1 2025Q2 2025
NIDDA / Total Deposits (%)27% 29% 32%
Cost of Total Deposits (quarterly avg)2.72% 2.58% 2.47%
Spot APY – Total Deposits2.63% 2.52% 2.37%
Loans / Deposits (%)87.2% 85.5% 83.6%
CET1 (Consolidated) (%)12.0% 12.2% 12.2%
TCE / TA (%)7.8% 8.1% 8.1%

Consensus vs Actual (Q2 2025)

MetricConsensus*Actual
EPS ($)$0.78*$0.91
Revenue ($MM)$267.10*$258.23

Consensus values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Commentary/ActionChange
NIDDA growthFY 2025Double-digit growth Already ~20% YTD; expect solid double-digit for full year (seasonality may temper) Maintained/achieved
Non-brokered depositsFY 2025Mid-to-high single-digit At ~8.4% YTD; guidance “to hold” Maintained
Core C&I + CRE loan growthFY 2025Mid-to-high single-digit Now “mid single digits” given slow start and exits Lowered
Non-interest expenseFY 2025Mid single-digit increase (≈3%) Still expecting ~3% increase Maintained
Net interest incomeFY 2025Mid single-digit growth “May do a little better” given trajectory Raised (qualitative)
Margin trajectory2H 2025Ongoing expansion Expect NIM expansion in Q3 and Q4 Maintained/affirmed
Share repurchaseNANoneAuthorized up to $100M New
Senior notes redemptionNAOutstanding $400M 4.875% due Nov 2025Full redemption announced for Aug 22, 2025 Action
DividendQ2 2025$0.29 prior level$0.31 declared (payable July 31, 2025) Raised vs prior quarter

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Deposit mix/NIDDANIDDA up; cost of deposits down; NIM expanding NIDDA 32%; cost down; NIM +12 bps QoQ Improving
Pricing discipline (loans/deposits)Lower deposit rates; loan yields pressured in falling rates Loan yields up to 5.55%; deposit rates down; selective exits of thin spreads Positive
Credit – office exposureOffice NPLs uptick in Q4; reserves elevated NPLs +$117M QoQ; $86M office; office reserve 1.92% Mixed (migration continues)
C&I growth/payoffs2024 payoffs constrained growth C&I down $199M on payoffs/exits; production solid; expect improvement 2H Stabilizing
Capital actionsNone in Q1$100M buyback; bond redemption Shareholder-friendly
Geographic expansionAtlanta/Dallas growth Offices launched in Morristown, NJ and Charlotte, NC Expanding footprint

Management Commentary

  • “This was an outstanding quarter…strong NIDDA growth and continued margin expansion” — Rajinder Singh (CEO) .
  • “Loan yield increased…deposit costs declined…evidence of the fruit of the work we’re doing on the balance sheet” — Leslie Lunak (CFO) .
  • “We will not chase growth unless it is profitable growth…loan margins need to move up” — Rajinder Singh (CEO) .
  • On estimates trajectory: “Currently…margin expansion both in 3Q and 4Q…expecting an increasing trend” — Leslie Lunak (CFO) .
  • CFO succession: “James G. Mackey will join…assume the role of CFO on November 1, 2025…Leslie…to retire January 1, 2026” .

Q&A Highlights

  • Office credit process: reappraisals prior to non-accrual; charge downs to liquidation value; DSCR/LTV metrics refreshed; $5.2M office charge-offs in quarter .
  • Buyback pacing and capital: $100M initial authorization; CET1 viewed as excess vs peers; prioritizing profitable growth alongside repurchases .
  • Deposit seasonality: expect relative stability in Q3 then typical Q4 decline; focus on 12-month growth view .
  • Margin normalization: franchise targeting mid-3% core margin longer term; mix/pricing key drivers .
  • C&I outlook: payoffs/strategic exits near tail end; pipelines strong; expect 2H growth acceleration .

Estimates Context

  • Q2 2025 results vs consensus*: EPS $0.91 vs ~$0.78* (beat); Revenue $258.23M vs ~$267.10M* (miss) .
  • Q1 2025: EPS ~$0.76* vs $0.78 actual (in line to slight beat); Revenue ~$263.57M* vs $240.30M actual (miss) .
  • Management expects continued NIM expansion in Q3 and Q4, suggesting potential upward revisions to NII/EPS if deposit mix improvements persist .

Consensus values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Positive earnings inflection: Margin expansion (+12 bps QoQ) and deposit remix (NIDDA to 32%) drove an EPS beat despite continued provisioning .
  • Credit risk contained but persistent in office: NPL migration continues (mostly office), offset by strong collateral metrics and reserves; watch office maturities and CMBS takeouts .
  • Growth vs profitability: Management remains disciplined, exiting thin-spread credits; expect core loan growth to resume at mid-single digits in 2H on solid pipelines .
  • Capital returns and de-risking: $100M buyback and redemption of $400M 4.875% notes lower funding cost and support TBV accretion—potential stock catalysts .
  • Geographic expansion supports deposit/loan engines: New offices in Morristown and Charlotte augment Southeast strategy .
  • Watch deposit seasonality: Q3 steady, typical Q4 drift; view NIDDA and NIM on a 12-month trajectory rather than quarterly volatility .
  • Monitoring framework: Track NIM progression, NIDDA share, office credit migration, and execution on loan pricing discipline for near-term trading setups .

Additional Q2 Materials and Prior Quarters

  • Q2 2025 earnings release and supplemental: Net income $68.8M; NII $246.1M; NIM 2.93%; provision $15.7M; NIDDA 32% of deposits .
  • CFO succession plan: Jim Mackey to become CFO Nov 1, 2025; Leslie Lunak to retire Jan 1, 2026 .
  • Market expansion: Entrance into Charlotte, NC with corporate banking/CRE team .
  • Dividend: $0.31 per share payable July 31, 2025 .
  • Prior quarters: Q1 2025 NIM 2.81%, EPS $0.78, NIDDA 29% ; Q4 2024 NIM 2.84%, EPS $0.91, cost of deposits down materially .