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].

Earnings were aided by an increase in deposits. However, lower net interest income (NII) and non-interest income, loan balance, along with higher expenses, were the undermining factors. Quarterly net revenues were $250.2 million, down 4.5% year over year. However, the top line surpassed the Zacks Consensus Estimate of $243.5 million. Non-interest expenses rose 8.6% to $157.7 million. The increase was mainly due to a rise in all the components except depreciation of operating lease equipment. Our estimate fo ...

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** |

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 18. On the other hand, if they miss, the stock may move lower. Revenues are expected to be $245.22 million, up 2.4% from the year-ago quarter. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Thus, a positive or negative Earnings ESP reading theoretically indicat ...

Shares of BankUnited (NYSE:BKU) have been a solid performer over the past year, rising over 26%, though shares remain below levels seen when the regional banking olumbia to the of O 2023 began. I last covered BKU in December mains of the Planes that commendation, BKU. healin other hemen be tout ontine maten. crisis of Q1 2023 began. time to determine if BKU risks further underperformance or if now represents a good buying opportunity. In the company's first quarter reported on April 17th, BKU earned $0.64, ...

Company Overview - BankUnited, Inc. (BKU) is currently positioned as an intriguing investment choice due to solid earnings estimate revisions and a favorable Zacks Industry Rank [1][5] - The company has seen current quarter earnings estimates rise from 65 cents per share to 66 cents per share, and current year estimates have increased from $2.74 per share to $2.80 per share [2] Earnings Estimates - The recent earnings estimate revision activity indicates that analysts are becoming more optimistic about BankUnited's short and long-term prospects [3] - The Zacks Rank for BankUnited is 2 (Buy), highlighting its strong position in the market [2] Industry Context - The Banks - Major Regional industry, where BankUnited operates, has a Zacks Industry Rank of 59 out of over 250 industries, indicating a strong position relative to other segments [4] - The positive trends in the industry suggest that a rising tide could benefit all companies within this sector, including BankUnited [4][5]

The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. The change in a company's future earnings potential, as reflected in earnings estimate revisions, and the nearterm price movement of its stock are proven to be strongly correlated. That's partly because of the influence of institutional investors that use earnings and ea ...