Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments. Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yiel ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Class Trading Symbol Name of Exchange on Which Registered Common Stock, $0.01 Par Value BKU New York Stock Exchange 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 June 30, 2024 Commission File Number: 001-35039 BankUnited, Inc. (Exact name of registrant as speci ...

Group 1: Company Overview - BankUnited, Inc. currently holds a Zacks Rank of 2 (Buy), indicating a favorable investment outlook [2] - The company has a Momentum Style Score of A, suggesting strong momentum characteristics [7] Group 2: Performance Metrics - Shares of BankUnited, Inc. have increased by 36.53% over the past quarter and 36.03% over the last year, significantly outperforming the S&P 500, which moved 11.39% and 24.26% respectively [4] - Over the past week, shares are up 16.53%, while the Zacks Banks - Major Regional industry has increased by 4.12% during the same period [9] - The monthly price change for BankUnited is 30.7%, compared to the industry's performance of 11.07% [9] Group 3: Earnings Outlook - In the last two months, 3 earnings estimates for BankUnited have moved higher, while 2 have moved lower, resulting in a consensus estimate increase from $2.74 to $2.83 [11] - For the next fiscal year, 5 estimates have moved upwards with no downward revisions [11] Group 4: Trading Volume - BankUnited's average 20-day trading volume is 929,325 shares, which is a useful indicator for assessing price movements [10]

Core Viewpoint - BankUnited, Inc. (BKU) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings potential and likely favorable impact on its stock price [1][2]. Earnings Estimate Revisions - Analysts have been consistently raising their earnings estimates for BankUnited, with the Zacks Consensus Estimate increasing by 3.6% over the past three months [5]. - The company is projected to earn $2.83 per share for the fiscal year ending December 2024, reflecting no year-over-year change [10]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [4]. - BankUnited's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for near-term price movement [11]. Institutional Investor Influence - Changes in earnings estimates are closely correlated with stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [3][9]. - The Zacks rating system is designed to help individual investors navigate the complexities of stock ratings, which can often be driven by subjective factors [12].

Core Viewpoint - BankUnited's earnings were positively impacted by an increase in deposits, but were negatively affected by lower net interest income, non-interest income, loan balances, and higher expenses [1] Financial Performance - Quarterly net revenues were $250.2 million, a decrease of 4.5% year over year, but exceeded the Zacks Consensus Estimate of $243.5 million [2] - Net income was $53.7 million, down 7.4% year over year, surpassing the estimate of $48.2 million [8] - Net interest income (NII) was $226 million, down 5.7%, while the net interest margin (NIM) expanded by 25 basis points to 2.72% [9] - Non-interest income fell to $24.2 million, a decline of 5.1% from the prior year [9] Expenses and Provisions - Non-interest expenses rose by 8.6% to $157.7 million, primarily due to increases in all components except for depreciation of operating lease equipment [3] - The provision for credit losses was $19.5 million, an increase of 25.9% from the prior year [4] Loan and Deposit Trends - Total loans amounted to $24.63 billion, down 1.7% from the previous quarter, while total deposits increased to $27.76 billion, up 2.7% [10] Credit Quality and Capital Ratios - The ratio of net charge-offs to average loans was 0.12%, up 3 basis points from the previous year [11] - The Tier 1 leverage ratio improved to 8.2%, up from 7.6% a year earlier, and the Common Equity Tier 1 risk-based capital ratio rose to 11.6% from 11.2% [12] Market Reaction - Shares of BankUnited, Inc. (BKU) increased by 4.5% following better-than-expected second-quarter results, with earnings per share of 72 cents exceeding the Zacks Consensus Estimate of 65 cents [7]

Financial Data and Key Metrics - EPS for Q2 2024 came in at $0.72, beating the consensus estimate of around $0.65 [4] - Net interest margin (NIM) increased by 15 basis points to 2.72% from 2.57% in the previous quarter [37] - Non-interest-bearing demand deposits (NIDDA) grew by $826 million, contributing to an 11% quarter-over-quarter increase [8] - Total deposits grew by $736 million, with non-brokered deposits increasing by $1.3 billion [5][8] - Loan yields increased from 5.78% to 5.85%, driven by higher-yielding new production [49] - The allowance for credit losses (ACL) to loans ratio increased from 90 basis points to 92 basis points [32] Business Line Performance - Commercial and industrial (C&I) loans grew by $475 million, while commercial real estate (CRE) loans grew by $114 million [26] - Residential loans declined by $212 million, and the leasing business continued to run off [6][26] - The CRE portfolio remained stable at 24% of total loans, with a weighted average loan-to-value (LTV) ratio of 56% and a debt service coverage ratio (DSCR) of 1.77 [27] - The office CRE portfolio showed improvement in credit metrics across 9 out of 16 submarkets, with a weighted average LTV of 66% and DSCR of 1.59 [10][11] Market Performance - Florida markets remained strong, with year-over-year rent increases in most major submarkets and declining sublease activity [12] - The New York Tri-State area saw encouraging signs in leasing activity, with 15.5 million square feet leased in the first half of 2024, up 9% year-over-year [46] - The Tampa market showed over 1.4 million square feet of lease space, with only 6% sublease activity [12] Strategy and Industry Competition - The company is focused on transforming its balance sheet, with significant growth in NIDDA and a reduction in wholesale funding by $1.2 billion [5][21] - The company is shifting its portfolio composition towards higher-yielding assets, with a focus on C&I and CRE loans [26][37] - The company is investing in commercial card and capital markets products, which are beginning to show noticeable results [22] - The company is maintaining a conservative approach to CRE exposure, with CRE loans at 24% of total loans and 165% of total risk-based capital [27] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the pipeline for new relationships and expects mid-single-digit growth in noninterest expense for the year [16][40] - The company expects the NIM to expand further in the second half of 2024, potentially reaching the high 2% range [48] - Management highlighted the importance of deposit growth, particularly NIDDA, for the company's success [40] - The company is cautious about the impact of seasonality on deposit growth in the second half of the year [23] Other Important Information - The company reduced its wholesale funding to levels last seen in early 2022, despite the current high Fed funds rate [21] - The company added Ernie Diaz, a former TD Bank executive, to its team, bringing new ideas and expertise [41] - The company expects the ACL to gradually build to around 1% of loans by the end of 2024, driven by portfolio composition changes [15] Q&A Summary Question: Deposit Growth and Seasonality - The company expects mid-teens growth in NIDDA, with seasonality likely to dampen growth in the second half of the year [53][137] - The title business, which contributed significantly to deposit growth, is expected to benefit from potential mortgage refinancing booms in the future [134] Question: Loan Yields and Portfolio Composition - New loan yields are around 7.5% to 8%, while residential portfolio yields are in the mid-3% range [59] - The company expects loan yields to increase by 5 to 10 basis points as the portfolio shifts towards higher-yielding C&I and CRE loans [75] Question: Office CRE Portfolio and Reserves - The office CRE portfolio has a reserve of 2.47%, with management confident in the adequacy of reserves despite some asset-specific challenges [100] - Lease abatements and renovation periods are the primary issues affecting the office portfolio, but overall performance remains strong [85] Question: Capital Deployment and Share Buybacks - The company is considering capital deployment options, including potential share buybacks, but will prioritize profitable growth opportunities [117][97] - A discussion on capital deployment is planned for the August Board meeting [117] Question: CMBS Market Exposure - The company has no single asset, single borrower exposure in the CMBS market and sees no risk of impairment in its portfolio [88][102] Question: Expense Guidance - The company maintains its mid-single-digit expense growth guidance for the year, driven by railcar refurbishment costs and other factors [71][103]

1 BankUnited Execution on Near-term Strategic Priorities Improve Asset Mix • Same day available liquidity $14.9 billion • Available liquidity 139% of uninsured, uncollateralized deposits; 61% of deposits insured or collateralized. • CET 1 ratio of 11.6%; TCE/TA increased to 7.4% 1 4 3 Manage Expenses • Expenses stable quarter-over-quarter 6 Net Interest Margin • Non-brokered deposits grew $1.3 billion • Non-interest bearing DDA 29% of total deposits; up $826 million for the quarter • Total deposits grew by ...

BankUnited, Inc. (BKU) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.65 per share. This compares to earnings of $0.78 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 10.77%. A quarter ago, it was expected that this company would post earnings of $0.62 per share when it actually produced earnings of $0.64, delivering a surprise of 3.23%. Over the last four quarters, the company ...

Financial Performance Overview [Q2 2024 Financial Results](index=1&type=section&id=Q2%202024%20Financial%20Results) BankUnited's Q2 2024 net income was $53.7 million, with diluted EPS of $0.72, showing sequential growth but a year-over-year decline Quarterly and Year-to-Date Financial Results | Period | Net Income (millions) | Diluted EPS ($) | | :--- | :--- | :--- | | Q2 2024 | $53.7 | $0.72 | | Q1 2024 | $48.0 | $0.64 | | Q2 2023 | $58.0 | $0.78 | | H1 2024 | $101.7 | $1.36 | | H1 2023 | $110.9 | $1.48 | - The Chairman, President, and CEO, Rajinder Singh, described the quarter as "**outstanding**," highlighting **margin expansion**, **declining deposit costs**, **growth in non-interest bearing deposits**, and **growth in the core commercial loan portfolio**[4](index=4&type=chunk) [Key Quarterly Highlights & Strategic Execution](index=1&type=section&id=Key%20Quarterly%20Highlights%20%26%20Strategic%20Execution) Q2 2024 saw strong strategic execution, with net interest margin expanding to 2.72%, deposit costs declining, non-interest bearing deposits growing, and wholesale funding reduced - The net interest margin (tax-equivalent basis) expanded by **0.15% to 2.72%** for Q2 2024, up from 2.57% in the prior quarter[15](index=15&type=chunk) - The average cost of total deposits decreased by **9 basis points to 3.09%** in Q2 2024 from 3.18% in Q1 2024, with the spot APY on total deposits also declining to **3.09%**[5](index=5&type=chunk) - Non-interest bearing demand deposits grew by **$826 million** during the quarter, reaching **29% of total deposits** at June 30, 2024[37](index=37&type=chunk) - Wholesale funding, including FHLB advances and brokered deposits, was reduced by **$1.2 billion** during the quarter[16](index=16&type=chunk) - The loan to deposit ratio improved, declining to **88.7%** at the end of Q2 2024 from 89.6% at the end of Q1 2024[38](index=38&type=chunk) Detailed Financial Analysis [Loan Portfolio](index=2&type=section&id=Loan%20Portfolio) Total loans grew by $402 million in Q2 2024, primarily from core commercial portfolios, while residential loans saw a planned reduction Loan Portfolio Composition (in thousands) | Loan Category | Q2 2024 Balance (thousands) | Q1 2024 Balance (thousands) | QoQ Change (thousands) | | :--- | :--- | :--- | :--- | | Core C&I and CRE | $15,089,927 | $14,501,044 | +$588,883 | | Residential | $7,844,722 | $8,056,972 | -$212,250 | | Mortgage warehouse lending | $539,159 | $456,385 | +$82,774 | | **Total Loans** | **$24,628,484** | **$24,226,300** | **+$402,184** | - The company's commercial real estate exposure is modest, representing **24% of total loans** and **165% of the Bank's total risk-based capital**, which is below the median for peer banks[39](index=39&type=chunk) [Asset Quality and Allowance for Credit Losses (ACL)](index=3&type=section&id=Asset%20Quality%20and%20Allowance%20for%20Credit%20Losses%20(ACL)) Asset quality normalized with ACL to total loans at 0.92% and NPLs at 0.70%, driven by office CRE, with a $19.5 million provision Key Asset Quality Ratios | Metric | Q2 2024 | Q1 2024 | Q4 2023 | | :--- | :--- | :--- | :--- | | ACL to Total Loans | 0.92% | 0.90% | 0.82% | | ACL to Non-Performing Loans | 130.12% | 187.92% | 159.54% | | Non-performing loans to total loans | 0.70% | 0.48% | 0.52% | | Net Charge-offs to Average Loans (Annualized) | 0.12% | 0.02% | 0.09% | - The provision for credit losses was **$19.5 million** in Q2 2024, up from $15.3 million in Q1 2024, driven by new loan production, risk rating migration, and changes in specific reserves[44](index=44&type=chunk) - Non-performing loans increased by **$59 million** during the quarter, with **$50 million** of the increase related to office CRE exposure[45](index=45&type=chunk) - Total criticized and classified commercial loans declined by **$52 million** during the quarter, as a $69 million increase in CRE was more than offset by a $121 million decline in other commercial categories[23](index=23&type=chunk) [Net Interest Income and Margin](index=4&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income increased to $226.0 million in Q2 2024, with NIM expanding to 2.72% due to higher non-interest bearing deposits and loan yields Net Interest Income and Margin Performance | Metric | Q2 2024 (millions) | Q1 2024 (millions) | | :--- | :--- | :--- | | Net Interest Income | $226.0 | $214.9 | | Net Interest Margin (tax-equivalent) | 2.72% | 2.57% | - A key driver for margin expansion was the **$888 million increase** in average non-interest bearing demand deposits, which grew to **27.5% of average total deposits**[26](index=26&type=chunk) - The tax-equivalent yield on loans increased to **5.85%** from 5.78% in the prior quarter, reflecting new loan originations at higher rates[46](index=46&type=chunk) - The average cost of interest-bearing deposits increased at a declining rate, rising to **4.26%** from 4.21% in the previous quarter[27](index=27&type=chunk) [Non-interest Income](index=4&type=section&id=Non-interest%20Income) Non-interest income decreased to $24.2 million in Q2 2024, primarily due to lower lease financing, partially offset by other income growth Non-interest Income Components (in millions) | Component | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | | Lease financing | $5.6 | $11.4 | | Other non-interest income | $13.2 | $9.3 | | **Total non-interest income** | **$24.2** | **$26.9** | Capital and Liquidity [Capital Position](index=2&type=section&id=Capital%20Position) The company maintained a robust capital position in Q2 2024, with all ratios exceeding "Well Capitalized" requirements, and CET1 at 11.6% BankUnited, Inc. Capital Ratios | Ratio | June 30, 2024 | March 31, 2024 | Required (Well Capitalized) | | :--- | :--- | :--- | :--- | | Tier 1 leverage | 8.2% | 8.1% | 5.0% | | CET1 risk-based capital | 11.6% | 11.6% | 6.5% | | Total risk-based capital | 13.6% | 13.7% | 10.0% | | Tangible Common Equity/Tangible Assets | 7.4% | 7.3% | N/A | [Liquidity](index=2&type=section&id=Liquidity) The company maintains ample liquidity, with $14.9 billion in same-day available liquidity and a 139% ratio to uninsured deposits - Total same-day available liquidity stood at **$14.9 billion** at the end of Q2 2024[40](index=40&type=chunk) - The ratio of available liquidity to uninsured, uncollateralized deposits was **139%**[40](index=40&type=chunk) [Book Value per Share](index=2&type=section&id=Book%20Value%20per%20Share) Book value and tangible book value per common share continued to grow, with tangible book value reaching $35.07 Book Value Per Common Share Growth | Metric | June 30, 2024 ($) | March 31, 2024 ($) | June 30, 2023 ($) | | :--- | :--- | :--- | :--- | | Book value per common share | $36.11 | $35.31 | $33.94 | | Tangible book value per common share | $35.07 | $34.27 | $32.90 | - Tangible book value per common share is a non-GAAP financial measure reconciled from the GAAP book value per common share by excluding goodwill and other intangible assets[57](index=57&type=chunk) Financial Statements and Supplementary Data [Consolidated Statements of Financial Condition (Balance Sheet)](index=6&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition%20(Balance%20Sheet)) Total assets reached $35.4 billion, with loans at $24.4 billion, deposits at $27.8 billion, and equity at $2.7 billion Selected Balance Sheet Data (in billions) | Account | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total Assets | $35.4 | $35.1 | | Loans, net | $24.4 | $24.0 | | Total Deposits | $27.8 | $27.0 | | FHLB Advances | $3.3 | $3.9 | | Total Stockholders' Equity | $2.7 | $2.6 | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2024 net interest income was $226.0 million, with a $19.5 million provision for credit losses, resulting in $53.7 million net income Income Statement Summary - Q2 2024 (in millions) | Item | Amount | | :--- | :--- | | Net interest income | $226.0 | | Provision for credit losses | $19.5 | | Non-interest income | $24.2 | | Non-interest expense | $157.7 | | **Net income** | **$53.7** | [Selected Financial Ratios](index=11&type=section&id=Selected%20Financial%20Ratios) Q2 2024 key ratios include ROA of 0.61%, ROE of 8.0%, net interest margin of 2.72%, and loans to deposits of 88.7% Key Performance Ratios - Q2 2024 vs Q1 2024 | Ratio | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | | Return on average assets | 0.61% | 0.54% | | Return on average stockholders' equity | 8.0% | 7.3% | | Net interest margin | 2.72% | 2.57% | | Loans to deposits | 88.7% | 89.6% | [Earnings Per Share Calculation](index=10&type=section&id=Earnings%20Per%20Share%20Calculation) Basic and diluted EPS for Q2 2024 were both $0.72, based on $53.0 million income allocated to common stockholders EPS Calculation - Q2 2024 | Metric | Value | | :--- | :--- | | Net Income | $53.7 million | | Income allocated to common stockholders (Basic) | $53.0 million | | Weighted average shares (Basic) | 73,652,265 shares | | **Basic EPS** | **$0.72** | | Weighted average shares (Diluted) | 74,018,253 shares | | **Diluted EPS** | **$0.72** |

Core Viewpoint - The upcoming earnings report for BankUnited is anticipated to influence its stock price, with expectations for revenues and earnings per share (EPS) being critical indicators [1][23]. Revenue and Earnings Estimates - BankUnited's revenues are projected to be $245.22 million, reflecting a 2.4% increase from the same quarter last year [2]. - The company is expected to report quarterly earnings of $0.65 per share, indicating a year-over-year decline of 16.7% [24]. Earnings Surprise Prediction - The Earnings ESP (Expected Surprise Prediction) for BankUnited is 0%, suggesting no recent analyst revisions that differ from the consensus estimate [5]. - The company has beaten consensus EPS estimates only once in the last four quarters, indicating a lack of strong earnings surprise potential [13]. Analyst Insights and Consensus - The consensus EPS estimate for BankUnited has remained unchanged over the last 30 days, reflecting a stable outlook from covering analysts [25]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being a more recent version that may provide better accuracy [26]. Industry Context - Bank of America, another player in the Zacks Banks - Major Regional industry, is expected to report earnings of $0.79 per share, down 10.2% year-over-year, with revenues anticipated at $25.19 billion, a slight decrease of 0.1% [8]. - The overall industry outlook suggests a year-over-year decline in earnings for BankUnited, despite higher revenues, which could impact stock performance [23].