UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 Commission File Number: 001-35039 BankUnited, Inc. (Exact name of registrant as specified in its charter) | Delaware | | | 27-0162450 | | --- | --- | --- | --- | | (State or other jurisdiction of ...

Core Insights - BankUnited, Inc. (BKU) reported better-than-expected quarterly results, with Q3 2025 earnings of 95 cents per share, surpassing the Zacks Consensus Estimate of 84 cents and up from 81 cents in the prior-year quarter [1][10] Financial Performance - Net income for Q3 2025 totaled $71.9 million, reflecting a 16.9% increase from the year-ago quarter, exceeding the estimate of $60.1 million [2] - Quarterly net revenues reached $275.7 million, a 7.3% year-over-year increase, although it fell short of the Zacks Consensus Estimate of $279.8 million [3] - Net interest income (NII) was $250.1 million, up 6.8%, with net interest margin (NIM) expanding by 22 basis points to 3% [3] - Non-interest income rose to $25.6 million, an increase of 11.7%, primarily driven by higher deposit service charges and fees [4] Expense and Asset Management - Non-interest expenses increased by 1% to $166.2 million, attributed to higher employee compensation and technology costs, partially offset by lower depreciation and occupancy costs [5] - Total loans as of September 30, 2025, were $23.7 billion, down 1% from the prior quarter, while total deposits amounted to $28.6 billion, showing a marginal decline [6] Credit Quality and Provisions - BankUnited recorded a provision for credit losses of $11.6 million, up 25.2% from the prior-year quarter, with the ratio of net charge-offs to average loans at 0.26%, an increase of 10 basis points year-over-year [7] - The non-performing assets ratio was 1.10%, up 37 basis points [7] Capital and Profitability Ratios - As of September 30, 2025, the Common Equity Tier 1 risk-based capital ratio improved to 12.5% from 11.8%, and the total risk-based capital ratio increased to 14.4% from 13.9% [8] - Return on average assets rose to 0.82% from 0.62%, while return on average stockholders' equity increased to 9.5% from 8.1% [8] Market Outlook - BankUnited's strategy to grow fee income, maintain low-cost deposits, and benefit from relatively higher interest rates is expected to support revenue growth [11] - However, rising expenses and significant exposure to commercial real estate and residential loans may pose challenges [11]

Group 1 - BankUnited (NYSE: BKU) shares have gained approximately 6% over the past year, but have recently pulled back due to credit concerns in the regional banking sector [1] - The company is perceived to have light reserves, although it is not seen as having undue credit risk [1] - The analyst has over fifteen years of experience in making contrarian bets based on macro views and stock-specific turnaround stories [1]

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Financial Data and Key Metrics Changes - Earnings for the quarter increased to $71.9 million, or $0.95 per share, exceeding the consensus estimate of $0.88 [6][19] - Return on Assets (ROA) improved to 0.82%, and Return on Equity (ROE) rose to 9.5% [6][19] - Net Interest Margin (NIM) reached 3%, achieved a quarter earlier than expected [6][19] - Capital levels continued to grow, with Common Equity Tier 1 (CET1) at 12.5% and tangible book value per share at $39.27 [6][7] Business Line Data and Key Metrics Changes - Total deposits were flat, declining by $28 million, with a $1.2 billion increase in non-broker deposit growth over the last 12 months [11][12] - Commercial Real Estate (CRE) loans increased by $61 million, while Commercial and Industrial (C&I) loans decreased by $130 million due to ongoing payoffs [12][13] - Mortgage warehouse loans grew by $83 million during the quarter [13] Market Data and Key Metrics Changes - The CRE exposure totaled $6.5 billion, representing 28% of loans, with a well-balanced portfolio across various asset classes [15][16] - The weighted average loan-to-value ratio of the CRE portfolio was 55%, and the debt service coverage ratio was 1.77 [16] - 49% of the CRE portfolio is in Florida, and 22% in the New York tri-state area, with diversification into other markets like Atlanta and Texas [17] Company Strategy and Development Direction - The company aims to continue margin expansion driven by a change in mix on both sides of the balance sheet rather than solely relying on Federal Reserve rate actions [19][20] - There is a focus on building core relationships and maintaining a disciplined approach to pricing in competitive markets [43][44] - The company is optimistic about long-term prospects for fee income, with a 20% growth in core fee income celebrated [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business environment, noting strong pipelines in commercial and real estate teams [10][11] - The sentiment among clients is positive, particularly in the CRE markets, with expectations for strong core commercial loan growth in the fourth quarter [11][50] - The company anticipates flat margin for the fourth quarter but expects to achieve double-digit growth in net interest-bearing deposits for the year [27] Other Important Information - The company has adopted a more opportunistic buyback strategy due to market volatility, rather than a consistent daily buyback approach [7][19] - Non-interest income increased by 24% year-over-year, excluding lease financing, as commercial fee businesses gained traction [25][66] - The CFO, Leslie N. Lunak, is retiring after 13 years, with Jim Mackey transitioning into the role [29][33] Q&A Session Summary Question: Will there be additional charge-offs in Q4 related to specific loans? - Yes, an additional charge-off of a few million dollars is expected in Q4 related to one C&I credit, but it has been fully reserved for [41] Question: Is the loan opportunity set improving in competitive markets? - The opportunity set is larger in growing markets, and while competition is high, the company is focused on maintaining pricing discipline [43][44] Question: What is the outlook for expenses next year? - Specific guidance for 2026 will be provided in January, but no major investments are anticipated that would significantly accelerate expense growth [54] Question: What is the growth potential of fee income businesses? - Fee income growth is expected to be strong, particularly in lending fees, syndication fees, and capital markets, which are closely tied to core commercial activities [63][70] Question: What is the company's appetite for incremental CRE? - The company sees opportunities in retail, industrial, and multifamily sectors, with a focus on grocery-anchored urban markets and construction lending [85]

Financial Performance - Net income reached $71.9 million, a 5% increase quarter-over-quarter[4] - Net Interest Margin (NIM) expanded by 0.07% to 3.00% from 2.93% in the previous quarter, and up 22 bps from Q3 2024[4,5] - Annualized Return on Assets (ROA) improved to 0.82%, and Return on Equity (ROE) improved to 9.5%[4] - Cost of deposits decreased by 0.09% to 2.38% from 2.47%, with a spot Annual Percentage Yield (APY) of 2.31% at September 30[4] Deposits - Average Non-interest-bearing Demand Deposit Accounts (NIDDA) increased by $210 million quarter-over-quarter and $741 million year-over-year[4] - NIDDA declined by $488 million quarter-over-quarter due to normal seasonality[4,5] - NIDDA accounted for 30% of total deposits as of September 30, 2025[4,5] - Non-interest DDA was $8,625 million, a decrease of $488 million from the previous quarter but an increase of $990 million year-over-year[5] Loans and Asset Quality - Total loans decreased by $231 million, with lower yielding and non-core residential, franchise, equipment, and municipal finance down an aggregate of $245 million[4,5] - Period-end Core Commercial & Industrial (C&I) and Commercial Real Estate (CRE) loans were $15,090 million, a decrease of $69 million from the previous quarter[5] - Non-performing assets to total assets ratio was 1.10%[5] - Allowance for Credit Losses (ACL) to total loans ratio was 0.93%[5] Capital - Common Equity Tier 1 (CET1) ratio was 12.5%[4,5] - Tangible book value per share is now $39.27, an 8% year-over-year growth[4]

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Financial Performance - For Q3 2025, BankUnited reported net income of $71.9 million, or $0.95 per diluted share, representing a 4.5% increase in EPS from the previous quarter and a 17.5% increase year-over-year[3]. - Net income for the quarter ended September 30, 2025, was $71.9 million, an increase from $68.8 million in the previous quarter[23]. - Net income for the three months ended September 30, 2025, was $71.851 million, an increase from $68.766 million in the previous quarter and $61.452 million in the same quarter last year, representing a year-over-year growth of 16.9%[30]. - Basic earnings per common share for the three months ended September 30, 2025, was $0.96, up from $0.91 in the previous quarter and $0.82 in the same quarter last year, reflecting a year-over-year increase of 17.1%[30]. - The diluted earnings per common share for the three months ended September 30, 2025, was $0.95, compared to $0.91 in the previous quarter and $0.81 a year ago, marking a year-over-year increase of 17.3%[30]. Loan and Deposit Trends - Total loans decreased by $231 million in Q3 2025, with residential loans declining by $173 million, while the core commercial portfolio segments and mortgage warehouse grew by a combined $14 million[4]. - Non-interest bearing demand deposits declined by $488 million for the quarter, representing 30% of total deposits, but increased by $990 million compared to the same period last year[4]. - The loan to deposit ratio was 82.8% at September 30, 2025, compared to 83.6% at June 30, 2025[4]. - The company reported a loans to deposits ratio of 82.8% as of September 30, 2025, down from 83.6% in the previous quarter and 87.6% a year ago[32]. Interest Income and Margins - The net interest margin expanded by 0.07% to 3.00% for Q3 2025, with net interest income growing by $4.0 million quarter-over-quarter and by $16.0 million or 7% year-over-year[4]. - Net interest income before provision for credit losses increased to $250.1 million for the quarter ended September 30, 2025, compared to $246.1 million in the previous quarter[23]. - The yield on interest-earning assets remained flat at 5.38% quarter-over-quarter[17]. - The average yield on loans was 5.53% for the three months ended September 30, 2025, compared to 5.87% for the same period in 2024[25]. - Net interest margin improved to 3.00% for the three months ended September 30, 2025, up from 2.78% in the same period of 2024[25]. - The interest rate spread for the three months ended September 30, 2025, was 1.86%, compared to 1.55% in the same period of 2024[25]. Credit Quality - The annualized net charge-off ratio for the nine months ended September 30, 2025, was 0.26%, with total criticized and classified loans declining by $3 million[4]. - The ratio of the allowance for credit losses (ACL) to total loans was 0.93% at September 30, 2025, consistent with the prior quarter, while the ACL to non-performing loans ratio was 57.95%[8]. - The provision for credit losses was $11.6 million for Q3 2025, down from $15.7 million in the previous quarter, influenced by an improvement in the economic forecast[10]. - Non-performing loans to total loans ratio was 1.60% as of September 30, 2025, slightly up from 1.57% in the previous quarter and significantly higher than 1.03% a year ago[32]. Capital and Assets - BankUnited's capital position remains strong, with a CET1 ratio of 12.5% at a consolidated level as of September 30, 2025[7]. - Total assets of BankUnited, Inc. were $35.1 billion as of September 30, 2025[15]. - Total assets decreased slightly to $34,893,623 as of September 30, 2025, from $35,406,476 a year earlier[25]. - Total liabilities were $32.0 billion as of September 30, 2025, down from $32.5 billion in the previous quarter[21]. - Stockholders' equity increased to $3,015,090 as of September 30, 2025, compared to $2,777,824 in the same period of 2024[25]. - Total risk-based capital ratio was 14.4% as of September 30, 2025, compared to 14.1% in the previous quarter and 14.3% a year ago[36].

Core Insights - BankUnited, Inc. reported improved profitability for Q3 2025, achieving net income of $71.9 million, or $0.95 per diluted share, with an annualized return on average assets of 0.82% [2][6] - The company achieved a net interest margin of 3.00%, an increase from 2.93% in the previous quarter, driven by a favorable funding mix and a decrease in interest expenses [6][14] - Total loans decreased by $231 million in Q3 2025, with a notable decline in residential loans by $173 million, while the mortgage warehouse lending segment grew by $83 million [6][10] Financial Performance - For the nine months ended September 30, 2025, net income reached $199.1 million, or $2.63 per diluted share, representing a 21% increase in diluted earnings per share compared to the same period in 2024 [2][10] - The company’s total assets were reported at $35.1 billion as of September 30, 2025, with total deposits remaining relatively flat, declining by $28 million quarter-over-quarter [15][17] - The average cost of total deposits decreased to 2.38% from 2.47% in the previous quarter, reflecting a proactive approach to reduce deposit pricing [6][14] Loan Portfolio and Asset Quality - The core commercial and industrial (C&I) and commercial real estate (CRE) portfolio segments saw a net decline of $69 million, with the CRE portfolio growing by $61 million and the C&I portfolio declining by $130 million [4][5] - The allowance for credit losses (ACL) was $219.9 million, representing 0.93% of total loans, consistent with the previous quarter [7][8] - The annualized net charge-off ratio for the nine months ended September 30, 2025, was 0.26%, with total criticized and classified loans declining by $3 million [6][7] Capital Position - The Common Equity Tier 1 (CET1) ratio was reported at 12.5% as of September 30, 2025, indicating a robust capital position [6][8] - Book value per common share increased to $40.30, reflecting an 8% year-over-year increase in tangible book value per share [6][8] Interest Income and Expenses - Net interest income for Q3 2025 was $250.1 million, an increase from $246.1 million in the previous quarter, despite a slight decrease in interest income [10][18] - The yield on interest-earning assets remained stable at 5.38%, while the average rate paid on interest-bearing deposits decreased to 3.40% [14][18]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores are designed to help investors identify stocks with the potential to outperform the market within a 30-day timeframe [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four main types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score emphasizes finding undervalued stocks using financial ratios [3] - Growth Score focuses on a company's financial health and future growth potential [4] - Momentum Score identifies stocks with favorable price trends and earnings outlooks [5] - VGM Score combines the three styles to highlight stocks with attractive value, growth, and momentum characteristics [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in stock selection [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.81% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 stocks rated 1 and 2, making it essential for investors to utilize Style Scores to narrow down choices [9] Investment Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with a 3 (Hold) rank should also have A or B Style Scores to maximize upside potential [10] - The direction of earnings estimate revisions is crucial when selecting stocks, as lower-ranked stocks may still decline despite high Style Scores [11] Company Spotlight: BankUnited, Inc. - BankUnited, Inc. is headquartered in Miami Lakes, FL, and was established in 2009 through an acquisition from the FDIC [12] - Currently rated 3 (Hold) with a VGM Score of B, BankUnited has a Momentum Style Score of A and has seen a 0.9% increase in shares over the past four weeks [12][13] - The Zacks Consensus Estimate for fiscal 2025 has been revised upwards to $3.31 per share, with an average earnings surprise of +14.9% [13]