Financial Performance - Net Income for Q1 2025 was $58.5 million, or $0.78 per diluted share, up from $48.0 million, or $0.64 per diluted share in Q1 2024[123]. - Net interest income for Q1 2025 was $236.6 million, a decrease of $6.3 million from $242.9 million in Q4 2024, attributed to a decline in tax-equivalent interest income and interest expense[132]. - Year-over-year, net interest income increased by $17.7 million from $218.9 million in Q1 2024 to $236.6 million in Q1 2025, despite a decrease in tax-equivalent interest income[134]. - Total non-interest income decreased to $22,270,000 for the three months ended March 31, 2025, down from $26,877,000 in the same period of 2024, primarily due to a decline in lease financing revenue[143]. - Non-interest expense increased to $160,226,000 for the three months ended March 31, 2025, compared to $159,240,000 in 2024, driven by higher employee compensation and benefits, which rose to $82,746,000 from $75,920,000[144]. Deposits and Funding - NIDDA grew by $453 million, or 5.9%, to 29% of total deposits, up from 27% at December 31, 2024[126]. - Non-brokered deposits increased by $719 million, or 3.2%, while total deposits grew by $192 million in Q1 2025[126]. - Brokered deposits decreased from $5.2 billion at December 31, 2024, to $4.7 billion at March 31, 2025, indicating a strategic focus on reducing these higher-cost deposits[237]. - The ratio of estimated insured and collateralized deposits to total deposits was 61%, with available liquidity to uninsured, uncollateralized deposits at 142%[253]. Asset Quality and Credit Losses - The annualized net charge-off ratio for Q1 2025 was 0.33%, compared to 0.24% for the trailing twelve months[129]. - The provision for credit losses for Q1 2025 was $15.1 million, slightly down from $15.3 million in Q1 2024, influenced by increases in specific reserves and risk rating migration[140]. - Total non-performing loans increased to $259,811 thousand as of March 31, 2025, from $250,707 thousand at December 31, 2024, representing a growth of 0.4%[204]. - Non-performing loans to total loans ratio rose to 1.08% as of March 31, 2025, compared to 1.03% at December 31, 2024[204]. - The allowance for credit losses (ACL) remained stable at 0.92% of total loans as of March 31, 2025, consistent with December 31, 2024[225]. Capital and Ratios - CET1 ratio was 12.2% at March 31, 2025, with tangible common equity/tangible assets increasing to 8.11%[129]. - The total risk-based capital ratio for BankUnited was 14.32% as of March 31, 2025, exceeding the regulatory well-capitalized guidelines[259]. - The loan-to-deposit ratio improved to 85.5% at March 31, 2025, from 87.2% at December 31, 2024, despite total loans declining by $308 million[147]. Interest Rate and Economic Sensitivity - The average cost of total deposits decreased by 0.14% to 2.58% in Q1 2025, compared to 2.72% in the previous quarter[129]. - The company projects net interest income sensitivity under various rate scenarios, with a potential decrease of 12% in year 1 and 15% in year 2 for a 200 basis point rate drop[263]. - The modeled change in Economic Value of Equity (EVE) shows a potential increase of 12% for a 200 basis point rate drop, remaining within ALM policy limits[264]. - Interest rate risk management includes modeling instantaneous rate shocks of up to 400 basis points, adapting to economic conditions and customer behavior[262]. Loan Portfolio Composition - As of March 31, 2025, the total loan portfolio amounted to $23,989,899 thousand, a decrease from $24,297,980 thousand on December 31, 2024, representing a decline of approximately 1.3%[158]. - The commercial loan portfolio constitutes 68.9% of total loans, with commercial and industrial loans at $6,916,996 thousand (28.8%) and non-owner occupied commercial real estate at $5,602,711 thousand (23.4%) as of March 31, 2025[158]. - The total residential loans amounted to $7,464,494 thousand, accounting for 31.1% of the total loan portfolio as of March 31, 2025[158]. - The residential mortgage portfolio consists of $7,464,494,000 in loans, with 1-4 single family residential loans making up $6,405,196,000[177]. Operational and Strategic Initiatives - The company has implemented a new general ledger accounting system effective January 1, 2025, aimed at improving efficiency and management reporting[275]. - The company maintains a robust liquidity management framework, with a liquidity stress test coverage ratio of 2.17, exceeding the policy limit of 1.50[256]. - The company does not anticipate the need to sell securities in unrealized loss positions to generate liquidity, as the majority of its investment securities are eligible to be pledged[153].

Group 1 - BankUnited (NYSE: BKU) has shown strong performance over the past year due to solid deposit growth and a good capital position [1] - Despite its strong performance, BankUnited's shares have been affected by the overall market downturn this year [1] - The company reported mixed Q1 results, indicating variability in its financial performance [1]

Core Viewpoint - The article highlights BankUnited (BKU) as a strong value stock based on its favorable valuation metrics and earnings outlook, supported by the Zacks Rank system and Style Scores [3][7]. Valuation Metrics - BankUnited has a Price-to-Book (P/B) ratio of 0.89, which is lower than the industry average of 1.28, indicating potential undervaluation [4]. - The Price-to-Sales (P/S) ratio for BKU is 1.25, compared to the industry's average P/S of 1.46, further suggesting that the stock may be undervalued [5]. - The Price-to-Cash Flow (P/CF) ratio for BKU stands at 9.03, which is also below the industry average of 10.59, reinforcing the notion of undervaluation based on cash flow [6]. Earnings Outlook - BankUnited's strong earnings outlook, combined with its solid valuation metrics, positions it as one of the market's strongest value stocks [7].

Core Viewpoint - BankUnited, Inc. (BKU) reported first-quarter 2025 earnings of 78 cents per share, exceeding the Zacks Consensus Estimate of 74 cents and up from 64 cents in the prior-year quarter [1] Financial Performance - Net income for the quarter was $58.5 million, reflecting a 21.9% increase from the previous year, surpassing the estimate of $56.6 million [2] - Quarterly net revenues reached $255.4 million, a 5.7% year-over-year increase, but fell short of the Zacks Consensus Estimate of $261.7 million [3] - Net interest income (NII) was $233.1 million, growing by 8.5%, while the net interest margin (NIM) expanded by 24 basis points to 2.81% [3] Income and Expenses - Non-interest income decreased by 17.1% to $22.3 million, primarily due to a 62.3% drop in lease financing income, which was below the projected $24.8 million [4] - Non-interest expenses rose slightly to $160.2 million, driven by increased employee compensation, technology costs, and other expenses, partially offset by lower depreciation costs [4] Loan and Deposit Trends - Total loans amounted to $24 billion, a slight decrease from the prior quarter, while total deposits were $28.1 billion, showing a marginal increase [5] Credit Quality - The provision for credit losses was $15.1 million, down 1.1% from the previous year, which was better than the expected $16.1 million [6] - The ratio of net charge-offs to average loans increased to 0.33%, up 31 basis points year-over-year, and the non-performing assets ratio rose to 0.76%, an increase of 42 basis points [6] Capital and Profitability Ratios - The Common Equity Tier 1 risk-based capital ratio improved to 12.2% from 11.6%, and the total risk-based capital ratio increased to 14.3% from 13.7% year-over-year [7] - Return on average assets was 0.68%, up from 0.54% in the prior year, and return on average stockholders' equity rose to 8.2% from 7.3% [7] Market Outlook - BankUnited's strategies to enhance fee income, attract low-cost deposits, and benefit from higher interest rates are expected to support revenue growth, despite rising expenses and exposure to commercial real estate and residential loans [8]

Financial Data and Key Metrics Changes - Net income for the quarter was $58,500,000 or $0.78 per share, slightly above consensus of $0.76 [7] - Net interest margin (NIM) was $2.81, down three basis points from the previous quarter [7] - Cost of deposits decreased by 14 basis points to 2.58% from 2.72% last quarter [8] - Cost of interest-bearing deposits fell by 21 basis points to 3.54% from 3.75% [8] - Average yield on loans declined from 5.6% to 5.48% [35] Business Line Data and Key Metrics Changes - Total loans decreased by $300,000,000, with $200,000,000 attributed to the residential book and $100,000,000 from the core commercial book [12] - Average non-interest bearing demand deposits (NIDDA) increased by $453,000,000 [10] - Total deposit growth, excluding brokered deposits, was $719,000,000 [11] Market Data and Key Metrics Changes - The weighted average loan-to-value (LTV) of the commercial real estate (CRE) portfolio was 55% [31] - The weighted average debt service coverage ratio was 1.78 [31] - CRE exposure totaled 26% of loans, which is lower than the industry average [31] Company Strategy and Development Direction - The company is focused on managing interest rate risk and maintaining a neutral position in various scenarios [19] - The management emphasized the importance of relationship-oriented clients and deposit growth [27] - The company plans to continue increasing dividends steadily over time [22] Management Comments on Operating Environment and Future Outlook - Management noted a larger "cone of uncertainty" regarding economic conditions and interest rates [17] - Despite uncertainties, management remains optimistic about client engagement and business growth [15] - The company is prepared for both positive and negative economic scenarios, with more capital and liquidity than ever [23] Other Important Information - The company completed a general ledger conversion successfully [5] - The average cost of total deposits declined to 2.52% at the end of the quarter [37] - The provision for credit losses was $15,000,000, with a stable allowance for credit losses (ACL) to loans ratio of 92 basis points [40] Q&A Session Summary Question: What is the impact of spread compression on new loans? - Management indicated that credit spreads have widened in the securities market and noted increased competition in the CRE space, leading to tighter spreads [48][49] Question: Any insights on the growth of nonperforming loans? - The increase in nonperforming loans is primarily in the C&I book, with no specific trends or concerns highlighted [52] Question: What percentage of DDA balances are subject to ECR? - Most commercial deposit accounts are subject to ECR, but the extent is not significant [54] Question: Are there any downgrades in the New York City office market? - Management believes they have moved past the worst of potential downgrades, with no surprises expected in the portfolio [103][104] Question: What is the outlook for margin and NII trajectory into the second quarter? - Management expects margin expansion driven by growth and transformation of the balance sheet mix, but specific quarter-by-quarter guidance was avoided [75][76]

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]