BankUnited(BKU)2025-05-08 20:31Financial 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].