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BankUnited, Inc. (BKU)·Q3 2025 Earnings Summary

Executive Summary

  • EPS of $0.95 beat Wall Street consensus of $0.88, driven by funding mix improvement and lower deposit costs; net interest margin reached 3.00% one quarter ahead of plan . EPS consensus values from S&P Global.*
  • Revenue was $264.1M versus consensus $280.2M (miss), reflecting provision dynamics and slightly lower non-interest income; NIM expanded 7 bps QoQ to 3.00% . Revenue consensus values from S&P Global.*
  • Deposit costs fell to 2.38% and spot APY to 2.31%; NIDDA was 30% of deposits with expected seasonal decline QoQ but +$990M YoY .
  • Management guided Q4 margin “flat-ish” around ~3%, full-year double-digit NIDDA growth, total loans flat YoY with core C&I low-single-digit growth; non-interest expense growth trimmed to ~3% for 2025 .
  • Potential stock catalysts: EPS beat, early achievement of 3% NIM, continued capital accretion (CET1 12.5%, TBV/share $39.27), and opportunistic buyback approach .

What Went Well and What Went Wrong

  • What Went Well

    • Margin reached 3.00% a quarter early, with net interest income up $4M QoQ; “Hitting margin 3% a quarter early…we’re very happy that we’re at 3%” .
    • Funding mix improved: average interest-bearing liabilities declined $526M and NIDDA grew $210M QoQ; deposit costs fell 9 bps to 2.38% .
    • Capital and book value accreted: CET1 12.5%; TBV/share rose to $39.27 (+8% YoY) .

  • What Went Wrong

    • Revenue missed consensus despite EPS beat; total non-interest income declined $2.2M QoQ and lease financing continued to wind down . Revenue consensus values from S&P Global.*
    • Total loans down $231M QoQ, with residential and select non-core portfolios declining; C&I balances fell $130M due to elevated payoffs .
    • Non-accrual loans rose modestly (+$3M QoQ), provision was $11.6M; charge-offs concentrated in one C&I and one office loan .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Diluted EPS ($)$0.81 $0.91 $0.95
EPS Consensus Mean ($)$0.73*$0.78*$0.88*
Revenue ($USD Millions)$247.8 (224.9 NII after provision + 22.9 non-interest) $258.2 (230.4 + 27.8) $264.1 (238.5 + 25.6)
Revenue Consensus Mean ($USD Millions)$260.9*$267.1*$280.2*
Net Interest Margin (%)2.78% 2.93% 3.00%

Values marked with * are retrieved from S&P Global.

Segment Loans ($USD Thousands)

SegmentDec 31, 2024Jun 30, 2025Sep 30, 2025
Non-owner occupied CRE$5,652,203 $5,829,835 $5,820,343
Construction & land$561,989 $643,630 $714,272
Owner-occupied CRE$1,941,004 $1,942,076 $1,943,331
Commercial & industrial$7,042,222 $6,743,739 $6,612,538
Franchise & equipment$213,477 $149,022 $134,635
Municipal finance (Pinnacle)$720,661 $694,639 $637,198
Mortgage warehouse lending$585,610 $626,589 $709,185
Residential$7,580,814 $7,303,997 $7,130,992
Total Loans$24,297,980 $23,933,527 $23,702,494

Key KPIs

KPIQ3 2024Q2 2025Q3 2025
NIDDA (% of deposits)27.4% 31.8% 30.1%
NIDDA ($USD Millions)$7,616 $9,113 $8,625
Avg cost of total deposits (%)3.06% 2.47% 2.38%
Spot APY (%)2.93% 2.37% 2.31%
Total deposits ($USD Millions)$27,856 $28,646 $28,618
Loan-to-deposit ratio (%)87.6% 83.6% 82.8%
CET1 (%)11.8% 12.2% 12.5%
TCE/TA (%)7.8% 8.1% 8.4%
TBV/share ($)$36.52 $38.23 $39.27
NPA/Total assets (%)0.64% 1.08% 1.10%
ACL/Total loans (%)0.94% 0.93% 0.93%
Net charge-offs to avg loans (%)0.12% 0.27% 0.26%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest MarginQ4 2025Reach ~3% by Q4 2025 “Margin…flat-ish” around ~3% in Q4; more guidance in January Maintained trajectory; achieved early
NIDDA growthFY 2025Double-digit growth Double-digit for full-year; 13% YTD Maintained
Total loansFY 2025N/ALikely flat YoY; core C&I low-single-digit growth expected by year-end New detail
Securities portfolioQ4 / FY 2025N/ADown in Q4; slightly up YoY New detail
Non-interest expenseFY 2025Mid-single-digit increase ~3% increase (better than prior) Lowered
Rate assumptionsH2 2025N/AAssuming two rate cuts in 2025 (Oct; ~75% chance Dec) Macro assumption
Dividend2025Raised to $0.31 in Q1 2025 “Growing dividend is a priority…early in the year” Maintained
BuybackH2 2025$100M authorization (7/22) Opportunistic execution vs daily pacing Strategy shift

Earnings Call Themes & Trends

TopicQ1 2025Q2 2025Q3 2025Trend
Margin trajectoryNIM 2.81%; modest asset sensitivity; hedge expirations NIM 2.93%; funding mix improved; loan yields up NIM 3.00%; achieved a quarter early; expect flat-ish Q4 Improving, near-term plateau
Deposit mix/NIDDANIDDA to 29% (+$453M) NIDDA to 32% (+$1.0B); cost down NIDDA 30% (seasonal dip); avg NIDDA +$210M QoQ; cost down Strong structural mix, seasonal Q3
CRE officeLTV 64.5%; DSCR 1.58; concentrations suburban FL/NY Office non-accruals up; ACL office 1.92% Office exposure down $122M; ACL office 2.21%; refinancing normalizing De-risking; improving market activity
NDFI exposureNot highlightedNot highlightedNew disclosure: $1.3B (5% of loans); mostly pass-rated; one $26M NPL (office) Transparent; portfolio moderate risk
Fee income buildEarly investments; lease finance still elevated Other non-interest income up Core fee income +20% YoY; growth in derivatives, FX, cards, syndications Scaling, recurring revenue focus
Capital & buybackCET1 12.2%; TCE/TA 8.11% CET1 12.2%; buyback authorized CET1 12.5%; opportunistic buyback; TBV/share up Accretion; flexible deployment

Management Commentary

  • CEO (Rajinder Singh): “Hitting margin 3% a quarter early… We want to get further, and we will… EPS of $0.95… consensus was $0.88, so happy to beat that.”
  • CFO (Leslie N. Lunak): “Margin expansion has been and will continue to be primarily driven by a change in mix on both sides of the balance sheet… average cost of deposits declined by 9 basis points to 2.38%… provision this quarter was $11.6 million.”
  • COO (Tom Cornish): “Deposit pipelines look strong… CRE optimism… mortgage warehouse grew by $83 million… loan-to-deposit finished at 82.8%.”
  • On NDFI: “Substantially all of the NDFI portfolio was rated pass… only one loan was on non-approval for $26 million to a real estate investment fund.”

Q&A Highlights

  • Credit outlook: Additional small charge-off expected in Q4 for the idiosyncratic C&I loan, fully reserved; office loan charge-off already taken .
  • Loan growth: Expect balanced growth with stronger Q4 seasonality; C&I runoff largely in “bottom of the ninth inning,” with spreads held despite competition .
  • Fee income composition: Growth in lending/syndication fees, derivatives, FX, commercial cards; focus on recurring, core-business-linked revenues .
  • Capital actions: Opportunistic buyback (10b5‑1) favored over daily pacing; dividends expected to grow early each year; M&A not a primary lever .
  • CRE appetite: Emphasis on grocery-anchored retail, industrial, and multifamily; office balances trending down; refinancing normalizing .

Estimates Context

  • EPS beat: $0.95 vs $0.88 consensus for Q3 2025; prior quarter $0.91 vs $0.78; prior year $0.81 vs $0.73.* Actual EPS from press release .
  • Revenue miss: $264.1M vs $280.2M consensus in Q3 2025; prior quarter $258.2M vs $267.1M; prior year $247.8M vs $260.9M.* Actual revenue derived from NII after provision + non-interest income .
  • Estimate base sizes: 9 EPS and 9 revenue estimates for Q3 2025; 8 for Q2 2025; 8–9 for Q3 2024.*
    Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Margin inflection achieved early; near-term NIM around ~3% with scope to expand further in 2026 as mix shift continues .
  • EPS quality supported by lower deposit costs and improved funding mix; watch Q4 provision/charge-off cadence tied to the single C&I credit .
  • Revenue headline can lag consensus when provisions rise; trading lens should focus on NII after provision and cost of funds trajectory .
  • Capital strength and TBV/share accretion provide valuation support; opportunistic buyback adds upside optionality .
  • CRE office risk is manageable and trending down; refinancing markets improving; ACL on office increased to 2.21% .
  • Fee income engines (derivatives, FX, cards, syndications) are early but scaling; expect operating leverage contribution in 2026 .
  • Near-term setup: Seasonal Q4 loan production, double-digit NIDDA for year, opex growth trimmed to ~3%—constructive for sustained ROA/ROE improvement .
Sources: Q3 2025 press release and 8‑K exhibits **[1504008_d7ba584065f4468ca3cd7cedc41d7d86_0]** **[1504008_0001504008-25-000044_earningsdocex99120250930.htm:0]** **[1504008_0001504008-25-000044_earningsdocex99120250930.htm:7]** **[1504008_0001504008-25-000044_earningsdocex99120250930.htm:8]** **[1504008_d7ba584065f4468ca3cd7cedc41d7d86_9]** **[1504008_d7ba584065f4468ca3cd7cedc41d7d86_10]** **[1504008_d7ba584065f4468ca3cd7cedc41d7d86_13]** **[1504008_d7ba584065f4468ca3cd7cedc41d7d86_15]**; Q3 2025 earnings call transcript **[0001504008_2195706_1]** **[0001504008_2195706_2]** **[0001504008_2195706_3]** **[0001504008_2195706_4]** **[0001504008_2195706_5]** **[0001504008_2195706_6]** **[0001504008_2195706_7]** **[0001504008_2195706_8]** **[0001504008_2195706_12]** **[0001504008_2195706_13]** **[0001504008_2195706_15]** **[0001504008_2195706_16]**; Prior quarter releases **[1504008_7da592c193824f12bdedbeeea8fc16fe_0]** **[1504008_7da592c193824f12bdedbeeea8fc16fe_3]** **[1504008_7da592c193824f12bdedbeeea8fc16fe_5]** **[1504008_7da592c193824f12bdedbeeea8fc16fe_9]** **[1504008_7da592c193824f12bdedbeeea8fc16fe_13]**; Q1 2025 release **[1504008_1d51138053f34a68a7dc71b8d03151c6_0]** **[1504008_1d51138053f34a68a7dc71b8d03151c6_1]** **[1504008_1d51138053f34a68a7dc71b8d03151c6_8]**; Deposit and CRE supplemental disclosures **[1504008_0001504008-25-000044_exhibit99209302025.htm:1]** **[1504008_0001504008-25-000044_exhibit99209302025.htm:4]**.