BKU's Q3 Earnings Beat on Higher NII & Non-Interest Income, Stock Up

Core Insights - BankUnited, Inc. (BKU) reported better-than-expected quarterly results, with Q3 2025 earnings of 95 cents per share, surpassing the Zacks Consensus Estimate of 84 cents and up from 81 cents in the prior-year quarter [1][10] Financial Performance - Net income for Q3 2025 totaled $71.9 million, reflecting a 16.9% increase from the year-ago quarter, exceeding the estimate of $60.1 million [2] - Quarterly net revenues reached $275.7 million, a 7.3% year-over-year increase, although it fell short of the Zacks Consensus Estimate of $279.8 million [3] - Net interest income (NII) was $250.1 million, up 6.8%, with net interest margin (NIM) expanding by 22 basis points to 3% [3] - Non-interest income rose to $25.6 million, an increase of 11.7%, primarily driven by higher deposit service charges and fees [4] Expense and Asset Management - Non-interest expenses increased by 1% to $166.2 million, attributed to higher employee compensation and technology costs, partially offset by lower depreciation and occupancy costs [5] - Total loans as of September 30, 2025, were $23.7 billion, down 1% from the prior quarter, while total deposits amounted to $28.6 billion, showing a marginal decline [6] Credit Quality and Provisions - BankUnited recorded a provision for credit losses of $11.6 million, up 25.2% from the prior-year quarter, with the ratio of net charge-offs to average loans at 0.26%, an increase of 10 basis points year-over-year [7] - The non-performing assets ratio was 1.10%, up 37 basis points [7] Capital and Profitability Ratios - As of September 30, 2025, the Common Equity Tier 1 risk-based capital ratio improved to 12.5% from 11.8%, and the total risk-based capital ratio increased to 14.4% from 13.9% [8] - Return on average assets rose to 0.82% from 0.62%, while return on average stockholders' equity increased to 9.5% from 8.1% [8] Market Outlook - BankUnited's strategy to grow fee income, maintain low-cost deposits, and benefit from relatively higher interest rates is expected to support revenue growth [11] - However, rising expenses and significant exposure to commercial real estate and residential loans may pose challenges [11]