Financial Performance - Net income decreased to $58 million in Q1 2025, compared to $69 million in Q4 2024 and increased from $48 million in Q1 2024[5] - Earnings per share (EPS) decreased to $0.78 in Q1 2025, compared to $0.91 in Q4 2024 and increased from $0.64 in Q1 2024[5] - Net interest margin (NIM) was 2.81% in Q1 2025, compared to 2.84% in the prior quarter[4,5] Balance Sheet - Non-interest DDA increased to $8.069 billion, representing 29% of total deposits[4,5] - Total deposits increased to $28.058 billion[5] - Period-end loans totaled $23.990 billion[5] - CET1 ratio was 12.2%[4,5] Asset Quality - The allowance for credit losses to total loans was consistent at 0.92%[4,5] - Annualized net charge-off rate was 0.33%[4,5] - Non-performing assets to total assets ratio was 0.76%[5] Loan Portfolio - Core C&I and CRE loans declined by $106 million due to seasonality[4,5] - Lower yielding and non-core resi, franchise, equipment and municipal finance declined an aggregate $196 million[4] - Office loans represent 28% of the total CRE portfolio[16] - 14% of the total CRE portfolio is fixed rate and maturing in the next 12 months[18]

Core Insights - BankUnited, Inc. reported a revenue of $255.41 million for the quarter ended March 2025, reflecting a year-over-year increase of 5.7% [1] - The company's EPS was $0.78, up from $0.64 in the same quarter last year, surpassing the consensus estimate of $0.74 by 5.41% [1] - The reported revenue fell short of the Zacks Consensus Estimate of $261.73 million, resulting in a surprise of -2.42% [1] Financial Performance Metrics - Net charge-offs to average loans were reported at 0.3%, higher than the estimated 0.2% [4] - Net Interest Margin was 2.8%, slightly below the average estimate of 2.9% [4] - Average Interest-Earning Assets totaled $33.83 billion, compared to the estimated $33.96 billion [4] - Deposit service charges and fees reached $5.24 million, slightly above the estimate of $5.20 million [4] - Net Interest Income (FTE basis) was $236.59 million, below the average estimate of $241.31 million [4] - Other non-interest income was $11.78 million, compared to the estimated $12.60 million [4] - Total Non-Interest Income amounted to $22.27 million, lower than the average estimate of $23.84 million [4] - Lease financing was reported at $4.31 million, significantly below the estimated $6.04 million [4] - Net interest income before provision for credit losses was $233.14 million, compared to the average estimate of $237.45 million [4] Stock Performance - BankUnited's shares have returned -1.4% over the past month, outperforming the Zacks S&P 500 composite's -4.3% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Group 1: Earnings Performance - BankUnited, Inc. reported quarterly earnings of $0.78 per share, exceeding the Zacks Consensus Estimate of $0.74 per share, and up from $0.64 per share a year ago, representing an earnings surprise of 5.41% [1] - Over the last four quarters, the company has surpassed consensus EPS estimates four times [2] - The company posted revenues of $255.41 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.42%, compared to year-ago revenues of $241.73 million [2] Group 2: Stock Performance and Outlook - BankUnited shares have declined approximately 11.9% since the beginning of the year, while the S&P 500 has decreased by 6.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.78 on revenues of $268.02 million, and for the current fiscal year, it is $3.15 on revenues of $1.08 billion [7] Group 3: Industry Context - The Zacks Industry Rank for Banks - Major Regional is currently in the top 29% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that tracking these revisions can be beneficial for investors [5] - The favorable estimate revisions trend for BankUnited has resulted in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6]

Financial Performance - For the quarter ended March 31, 2025, BankUnited reported net income of $58.5 million, or $0.78 per diluted share, a decrease from $69.3 million, or $0.91 per diluted share in the previous quarter[3]. - Net income for the three months ended March 31, 2025, was $58,476 thousand, a decrease of 15.6% compared to $69,302 thousand for the previous quarter[21]. - Earnings per common share, basic, decreased to $0.78 in Q1 2025 from $0.92 in Q4 2024, a decline of 15.2%[21]. - For the three months ended March 31, 2025, net income was $58,476,000, a decrease of 15.5% from $69,302,000 in the previous quarter[26]. Loan and Deposit Trends - Total loans declined by $308 million for the quarter, with core C&I and CRE segments down by $106 million, attributed to seasonality and high levels of payoffs[4]. - Non-interest bearing demand deposits grew by $453 million, or 5.9%, to 29% of total deposits, up from 27% at December 31, 2024[4]. - Total deposits increased to $28,057,825 thousand as of March 31, 2025, compared to $27,865,703 thousand at December 31, 2024, marking an increase of approximately 0.69%[19]. Interest Income and Margin - Total interest income for Q1 2025 was $443,689 thousand, down from $467,988 thousand in Q4 2024, reflecting a decrease of about 5.2%[21]. - The net interest margin decreased to 2.81% for the quarter, down from 2.84% in the previous quarter, reflecting a declining rate environment[12]. - Net interest income for Q1 2025 was $236,589,000, down from $242,944,000 in Q4 2024, reflecting a decrease of 2.0%[26]. Credit Quality - The provision for credit losses was $15.1 million for the quarter, compared to $11.0 million in the preceding quarter[9]. - Non-performing loans totaled $259.8 million, or 1.08% of total loans, compared to $250.7 million, or 1.03% of total loans at December 31, 2024[10]. - The allowance for credit losses was $219,747 thousand as of March 31, 2025, slightly down from $223,153 thousand at December 31, 2024[19]. - The ratio of the allowance for credit losses (ACL) to total loans remained stable at 0.92% at March 31, 2025[7]. - Non-performing loans to total loans ratio was 1.08% for Q1 2025, slightly up from 1.03% in the previous quarter[28]. Equity and Book Value - Book value per common share increased to $38.51, up from $37.65 at December 31, 2024, reflecting continued growth[6]. - Total stockholders' equity increased to $2,897,582,000 as of March 31, 2025, up from $2,814,318,000 at December 31, 2024, representing a growth of 2.4%[32]. - Tangible book value per common share increased to $37.48 as of March 31, 2025, compared to $36.61 at December 31, 2024, showing a rise of 2.4%[32]. - Common shares issued and outstanding grew to 75,242,048 as of March 31, 2025, from 74,748,370 at December 31, 2024, marking an increase of 0.7%[32]. Other Financial Metrics - The average cost of total deposits declined by 0.14% to 2.58% for the quarter ended March 31, 2025[4]. - Total assets decreased to $34,831,997 thousand as of March 31, 2025, down from $35,241,742 thousand at December 31, 2024, representing a decline of approximately 1.16%[19]. - Total liabilities decreased to $31,934,415 thousand as of March 31, 2025, from $32,427,424 thousand at December 31, 2024, a decline of approximately 1.53%[19]. - Return on average assets for Q1 2025 was 0.68%, compared to 0.78% in the previous quarter, indicating a decline of 12.8%[28]. - Return on average stockholders' equity for Q1 2025 was 8.2%, down from 9.7% in Q4 2024[28].

Company: BankUnited, Inc. (BKU) - BankUnited shares increased by 9.8% to close at $32.37, following a significant trading volume compared to normal sessions, contrasting with a 9.2% loss over the past four weeks [1] - The upcoming quarterly earnings are expected to be $0.74 per share, reflecting a year-over-year increase of 15.6%, with revenues projected at $261.73 million, up 8.3% from the previous year [2] - The consensus EPS estimate for BankUnited has been revised 1.1% lower in the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [3] Company: KeyCorp (KEY) - KeyCorp's consensus EPS estimate for the upcoming report has decreased by 2.6% to $0.32, representing a 45.5% increase from the previous year's report [4] - KeyCorp's stock closed 9.8% higher at $14.52, but has returned -12.7% over the past month [3][4] - KeyCorp currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [4] Industry: Banks - Major Regional - Both BankUnited and KeyCorp are part of the Zacks Banks - Major Regional industry, with BankUnited holding a Zacks Rank of 2 (Buy) [3]

Core Viewpoint - BankUnited, Inc. has increased its quarterly dividend to 31 cents per share, reflecting a 6.8% rise from the previous payout, with payment scheduled for April 30, 2025 [1] Dividend Growth - The company previously raised its dividend by 7.4% to 29 cents per share on February 26, 2024, marking five increases in the past five years and a five-year annualized dividend growth of 6.40% [2] - BankUnited's current payout ratio stands at 38% of earnings, with a dividend yield of 3.27% compared to the industry's yield of 3.55% based on a closing price of $35.47 [2] Capital Distribution Activities - BankUnited has an active share repurchase program, with an authorization for up to $150 million worth of shares initiated in September 2022, and as of December 31, 2024, $20.2 million remains for repurchase [3] - The company is expected to maintain efficient capital distribution activities due to its earnings strength, despite a high debt level of $3.6 billion against cash and cash equivalents of $491.1 million [4] Debt Management - Despite the elevated debt, BankUnited is positioned to meet its debt obligations in the near term, which is likely to support its long-term dividend payouts [5] Stock Performance - Over the past year, BankUnited shares have appreciated by 31.3%, outperforming the industry growth of 17.1% [6]

Credit Risk and Allowance for Credit Losses - The company's credit loss models may be inaccurate, potentially requiring an increase in the Allowance for Credit Losses (ACL), which would decrease net income and capital[113]. - The allowance for credit losses (ACL) is a critical audit matter, requiring extensive judgment and complex estimations based on historical data and economic forecasts[378]. - The ACL is adjusted through the provision for credit losses to reflect the amount of amortized cost basis not expected to be collected[438]. - Expected credit losses are estimated on a collective basis for groups of loans sharing similar risk characteristics, with factors including product type and historical loss patterns considered[442]. - The Company expects to collect the amortized cost basis of government insured residential loans, resulting in an ACL of zero for these loans[451]. - Qualitative adjustments to the ACL may be made based on management's judgment regarding factors not captured by quantitative calculations[452]. - The Company uses a 2-year reasonable and supportable forecast period for estimating the ACL, reverting to long-term mean losses thereafter[445]. - For commercial loans, increases in unemployment and stock market volatility are significant factors impacting the ACL[447]. - The commercial real estate model incorporates variables such as unemployment rates and real GDP growth, affecting the reserve levels[446]. - Loans are charged off against the ACL when deemed uncollectible, with specific timelines for residential and commercial loans established[441]. - The Company estimates expected credit losses for off-balance sheet credit exposures using similar methodologies as for loans, considering the likelihood of additional funding[454]. Economic and Market Conditions - A significant portion of the company's loans are secured by residential or commercial real estate, making them sensitive to changes in real estate values and market dynamics[115]. - The geographic concentration in Florida and the New York Tri-State area makes the company susceptible to local economic conditions, which could impact borrowers' ability to repay loans[121]. - Economic uncertainty and inflation trends could negatively impact loan demand and borrowers' ability to repay obligations[163]. - The U.S. Government's sovereign credit rating was downgraded in 2023, which could adversely affect economic conditions and the company's financial performance[169]. - Future downgrades of the U.S. credit rating could negatively impact the company's business and financial condition[169]. Financial Performance - Net income for 2024 was $232,467,000, representing a 30.1% increase from $178,671,000 in 2023[396]. - Total interest income rose to $1,925,116,000 in 2024, up 3.6% from $1,857,581,000 in 2023[396]. - Net interest income after provision for credit losses was $859,194,000 in 2024, up 9.3% from $786,197,000 in 2023[396]. - Non-interest income increased to $99,155,000 in 2024, a rise of 14.2% from $86,838,000 in 2023[396]. - Comprehensive income for 2024 was $305,347,000, compared to $259,155,000 in 2023, reflecting a 17.8% increase[399]. - Earnings per common share (diluted) rose to $3.08 in 2024 from $2.38 in 2023, marking a 29.3% increase[396]. - The balance of retained earnings increased to $2,650,956 in 2024 from $2,551,400 in 2023, indicating growth in accumulated profits[408]. Operational and Regulatory Risks - The company faces operational risks from reliance on analytical models for forecasting, which may prove inadequate during market stress, impacting strategic planning and risk management[134]. - Cybersecurity incidents pose a significant risk to BankUnited, as unauthorized occurrences could jeopardize the confidentiality and integrity of sensitive information[141][142]. - The company is dependent on third-party service providers for critical business infrastructure, and any failures or disruptions from these providers could materially harm operations[140]. - The company is subject to comprehensive regulatory requirements that could impose additional costs and operational constraints, impacting profitability[152]. - Changes in political administrations may introduce new regulations that could significantly affect the company's operating environment and require rapid adjustments[154]. - The company may face increased deposit insurance premiums if the FDIC's funding requirements are not met, adversely affecting financial condition[160]. - The company is exposed to risks of noncompliance with anti-money laundering laws, which could lead to significant fines and operational restrictions[157]. - The company is subject to evolving privacy laws, and any violations could lead to reputational damage and financial penalties[162]. - Adverse public perceptions regarding the company's practices could harm its reputation and business relationships, impacting overall performance[164]. Liquidity and Funding - The company faces liquidity risk, requiring sufficient liquidity to meet customer loan requests and deposit withdrawals under normal and extraordinary conditions[127]. - Material unexpected deposit outflows could jeopardize the company's ability to maintain sufficient liquidity for normal operations[128]. - A substantial portion of BankUnited's deposits are commercial deposits, many of which are uninsured, making them more susceptible to outflows during times of stress[130][131]. - Loss of deposits or a change in deposit mix could lead to increased funding costs, reducing net interest margin and net income, particularly in a sustained high interest rate environment[132]. - BankUnited's ability to access operating or contingent liquidity is significantly dependent on the availability of liquidity from the FRB and FHLB, which could be adversely impacted by changes in interest rates or economic conditions[129]. Interest Rate Risk - The company's net interest income is significantly impacted by market interest rates, with changes in rates affecting the spread between interest-earning assets and interest-bearing liabilities[125]. - A flat or inverted yield curve may limit the company's ability to add higher-yielding assets, placing downward pressure on net interest margin and income[125]. - The company is managing interest rate risk through monitoring and hedging, but predictive modeling may not accurately forecast future movements in interest rates[126]. Investment Portfolio - The performance of the company's investment portfolio is subject to risks related to the underlying collateral, primarily commercial and residential real estate[119]. - The carrying value of investment securities available for sale was $9.101 billion as of December 31, 2024, compared to $8.834 billion in 2023, indicating an increase of 3.0%[496]. - The investment securities portfolio included $9.507 billion in amortized cost as of December 31, 2024, with a fair value of $9.101 billion[498]. - As of December 31, 2024, the investment securities available for sale portfolio had a net unrealized loss position of $405.6 million, an improvement of $129.2 million from $534.8 million at December 31, 2023[505]. - The unrealized losses were primarily due to a sustained higher interest rate environment, with fixed rate securities accounting for the majority of these losses[505]. - The Company monitored 476 securities in unrealized loss positions, with 135 of these having an insignificant impairment totaling approximately $1.2 million[504]. - The total fair value of U.S. Treasury securities was $167.5 million, with unrealized losses of $12.0 million as of December 31, 2024[501]. - The total fair value of U.S. Government agency and sponsored enterprise residential MBS was $1.83 billion, with unrealized losses of $26.5 million[501]. Internal Controls and Audit - The company reported that its internal control over financial reporting was effective as of December 31, 2024, based on the evaluation framework established by COSO[369]. - Deloitte & Touche LLP expressed an unqualified opinion on the company's consolidated financial statements for the years ended December 31, 2024, 2023, and 2022[373]. - The effectiveness of internal control over financial reporting was audited and found to be effective as of December 31, 2024[386]. - The company’s management is responsible for maintaining effective internal control over financial reporting[388]. - The audit procedures included testing the effectiveness of controls over the ACL and evaluating the reasonableness of qualitative adjustments[383].

Core Viewpoint - BankUnited, Inc. (BKU) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Recent Performance and Outlook - BankUnited is expected to earn $3.13 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 1.6% [8]. - Over the past three months, the Zacks Consensus Estimate for BankUnited has risen by 4.4%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade of BankUnited to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Insights - BankUnited's shares have increased by 36% over the past year, indicating strong performance in the regional banking sector [1] - The bank's improving deposit performance has positively impacted its results, contributing to the stock price increase [1] - Since November, there has been optimism regarding a more favorable regulatory environment, further supporting the stock's performance [1] Company Performance - The significant gain of 36% in BankUnited's shares reflects a solid year for the company [1] - The improvement in deposit performance is a key driver of the bank's positive results [1] Market Sentiment - There is growing optimism in the market regarding regulatory changes that may benefit regional banks like BankUnited [1]

Core Insights - BankUnited, Inc. (BKU) reported fourth-quarter 2024 earnings of 91 cents per share, exceeding the Zacks Consensus Estimate of 71 cents and significantly up from 27 cents in the prior-year quarter [1][2] - The company's net income for the quarter was $69.3 million, a substantial increase from $20.8 million a year ago, and also surpassed the estimate of $50.9 million [3] - For the full year 2024, earnings per share (EPS) reached $3.08, beating the Zacks Consensus Estimate of $2.89, representing a 29.4% increase from the previous year [3] Financial Performance - Quarterly net revenues were $264.5 million, reflecting a 12.9% year-over-year growth and surpassing the Zacks Consensus Estimate of $259.7 million [4] - Full-year net revenues totaled $1.01 billion, up 5.5% year over year, meeting the Zacks Consensus Estimate [4] - Net interest income (NII) for the quarter was $239.3 million, growing 10.2% and exceeding the projected $234.8 million [4] - Non-interest income increased to $25.2 million, a 47.5% rise from the prior-year quarter, driven by lease financing and other non-interest income [5] Expense Management - Non-interest expenses decreased by 15.9% to $160.5 million, attributed to lower deposit insurance expenses and depreciation of operating lease equipment, which was better than the estimate of $181.9 million [5] - The net interest margin (NIM) expanded by 24 basis points to 2.84%, surpassing the estimate of 2.78% [4] Loan and Deposit Trends - As of December 31, 2024, total loans were $24.3 billion, a slight decrease from the prior quarter, while total deposits remained stable at $27.9 billion [6] Credit Quality - The provision for credit losses was $11 million, down 42.9% from the prior-year quarter, although it was higher than the expected $6.2 million [7] - The ratio of net charge-offs to average loans was 0.16%, an increase of 7 basis points year over year, and the non-performing assets ratio rose to 0.73%, up 36 basis points [7] Capital and Profitability Ratios - The Common Equity Tier 1 risk-based capital ratio improved to 12% from 11.4%, and the total risk-based capital ratio increased to 14.1% from 13.4% [8] - Return on average assets was 0.78%, up from 0.23% in the year-earlier quarter, while return on average stockholders' equity rose to 9.7% from 3.2% [8] Market Outlook - BankUnited's strategies to grow fee income, maintain low-cost deposits, and benefit from relatively higher interest rates are expected to support revenue growth [9] - However, rising expenses and significant exposure to commercial real estate and residential loans may pose challenges [9]