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

BankUnited, Inc.’s BKU 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 UpQuarterly 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 BagIn 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 ImproveAs 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 StockBankUnited’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. QuoteCurrently, 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 PeersWebster Financial WBS 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 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.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BankUnited, Inc. (BKU): Free Stock Analysis Report Webster Financial Corporation (WBS): Free Stock Analysis Report Bank OZK (OZK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks