BankUnited (BKU) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $58.5 million ($0.78 per share), up from $48.0 million ($0.64) in Q1 2024, but down from $69.3 million ($0.91) in Q4 2024; annualized ROE was 8.2% and ROA was 0.68%.

• Non-brokered deposits grew by $719 million, with non-interest DDA rising to 29% of total deposits; wholesale funding declined by $1.1 billion.

• Book value per share rose to $38.51; tangible book value per share increased to $37.48.

• Management highlighted a successful general ledger system conversion and steady dividend increases.

• Dividend per share increased to $0.31, a 7% rise from the previous $0.29.

Financial highlights

• Net interest margin was 2.81%, down 3 bps sequentially but up from 2.57% year-over-year; net interest income was $233.1 million, down $6.1 million sequentially, up $18 million year-over-year.

• Cost of total deposits decreased by 14 bps to 2.58%; cost of interest-bearing deposits fell 21 bps to 3.54%.

• Provision for credit losses was $15.1 million, up from $11.0 million in Q4 2024, reflecting higher specific reserves and economic uncertainty.

• Non-interest income was $22.3 million, down from $26.9 million year-over-year, mainly due to lower lease financing revenue.

• Non-interest expense was $160.2 million, flat sequentially, with higher compensation offset by lower deposit insurance and depreciation.

Outlook and guidance

• No changes to previous guidance for loan growth, deposit growth, margin, and expenses; management expects margin expansion over the remainder of the year, driven by remixing both sides of the balance sheet.

• Management remains optimistic for 2025 despite macroeconomic uncertainty, citing improved funding and capital positions.

• The provision for credit losses and ACL may remain volatile due to economic uncertainty and evolving CRE market dynamics.

• Second quarter is anticipated to be the strongest for deposit growth and margin benefit.

• The "cone of uncertainty" is wider due to macroeconomic and rate environment volatility.