Why Is BankUnited (BKU) Up 17.5% Since Last Earnings Report?

Core Viewpoint - BankUnited, Inc. reported strong Q3 earnings, surpassing expectations, but faces challenges with declining non-interest income and rising expenses [2][4][7]. Financial Performance - Q3 2024 earnings per share were 81 cents, exceeding the Zacks Consensus Estimate of 73 cents and up from 63 cents in the prior year [2]. - Net income reached $61.5 million, a 30.8$54.4 million [3]. - Quarterly net revenues were $257 million, a 6$258.7 million [4]. Key Revenue Components - Net Interest Income (NII) was $234.1 million, growing 9$230.9 million [5]. - Net Interest Margin (NIM) expanded by 22 basis points to 2.78% [6]. - Non-interest income decreased by 17.4% to $22.9 million, attributed to a decline in lease financing [6]. Expense Analysis - Non-interest expenses rose 11.9$164.6 million, exceeding the estimate of $161.3 million [7]. - Total loans decreased by 1$24.4 billion, while total deposits increased marginally to $27.9 billion [7]. Credit Quality - Provisions for credit losses were$9.2 million, down 72% year over year, significantly lower than the expected $17.6 million [8]. - The ratio of net charge-offs to average loans was 0.12%, up 5 basis points year over year, and the non-performing assets ratio increased to 0.64%, up 24 basis points [8]. Capital and Profitability - Common Equity Tier 1 risk-based capital ratio improved to 11.8%, up from 11.4% [9]. - Return on average assets rose to 0.69%, compared to 0.52% in the previous year, and return on average stockholders' equity increased to 8.8% from 7.2% [9]. Future Outlook - Management anticipates a mid-single-digit increase in NII for 2024 and expects loan growth in the mid-single digits [11][12]. - Non-interest expenses are projected to grow in the upper mid-single digits for 2024, excluding a special assessment charge [13]. - The effective tax rate is expected to be 26.5% for 2024, excluding discrete items [14]. Market Position - Estimates for BankUnited have trended downward recently, with a consensus estimate shift of -8.06% [15][16]. - The stock currently holds a Zacks Rank 3 (Hold), indicating an expectation of in-line returns in the coming months [18].