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

Shares of BankUnited, Inc. BKU rose 1.2% in yesterday’s after-market trading hours on better-than-expected quarterly results. Its third-quarter 2025 earnings of 95 cents per share surpassed the Zacks Consensus Estimate of 84 cents. The bottom line also compared favorably with 81 cents in the prior-year quarter.

Results benefited from growth in net interest income (NII) and non-interest income. However, higher expenses and provisions alongside a fall in loan and deposit balances were the undermining factors.

Net income totaled $71.9 million, up 16.9% from the year-ago quarter. Our estimate for the metric was $60.1 million.

BankUnited’s Revenues Rise, Expenses Up

Quarterly net revenues were $275.7 million, up 7.3% year over year. However, the top line missed the Zacks Consensus Estimate of $279.8 million.
 
NII was $250.1 million, up 6.8%. Net interest margin (NIM) expanded 22 basis points (bps) to 3%. Our estimates for NII and NIM were $250.4 million and 3.03%, respectively.
 
Non-interest income of $25.6 million rose 11.7%. The increase was mainly driven by a rise in deposit service charges and fees and other non-interest income. We had projected a non-interest income of $25.7 million.

Non-interest expenses rose 1% to $166.2 million. The rise was due to higher employee compensation and benefits costs, technology costs and other non-interest expenses, partially offset by lower depreciation of operating lease equipment costs, deposit insurance expense and occupancy and equipment costs. Our estimate for non-interest expenses was $173 million.

As of Sept. 30, 2025, total loans were $23.7 billion, down 1% from the prior quarter. Total deposits amounted to $28.6 billion, down marginally. Our estimates for total loans and total deposits were $24.5 billion and $28.9 billion, respectively.

BKU’s Credit Quality Deteriorates

In the reported quarter, BankUnited recorded a provision of credit losses of $11.6 million, up 25.2% from the prior-year quarter. We had expected the metric to be $21.1 million.

As of Sept. 30, 2025, the ratio of net charge-offs to average loans was 0.26%, up 10 bps year over year. Also, the non-performing assets ratio was 1.10%, up 37 bps.

BKU’s Capital & Profitability Ratios Improve

As of Sept 30, 2025, the Common Equity Tier 1 risk-based capital ratio was 12.5%, up from 11.8%. The total risk-based capital ratio was 14.4%, increasing from 13.9% as of Sept. 30, 2024.

At the end of the third quarter, the return on average assets was 0.82%, up from 0.62% in the year-earlier quarter. Return on average stockholders’ equity was 9.5%, rising from 8.1%.

Our View on BankUnited Stock

BankUnited’s efforts to grow fee income, its low-cost deposits and relatively higher interest rates are expected to support revenue growth. However, an increase in expenses and significant exposure to commercial real estate and residential loans might affect financials.

BankUnited, Inc. Price, Consensus and EPS Surprise

BankUnited, Inc. price-consensus-eps-surprise-chart | BankUnited, Inc. Quote

Currently, BKU carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Performance of BankUnited’s Peers

Fifth Third Bancorp FITB reported third-quarter 2025 adjusted earnings per share of 93 cents, surpassing the Zacks Consensus Estimate of 87 cents. In the prior-year quarter, the company had posted an EPS of 85 cents.

Results benefited from a rise in NII, fee income and loan balances. However, higher expenses and weak asset quality were headwinds for FITB.

Bank OZK’s OZK third-quarter 2025 earnings per share were a record $1.59, which increased 2.6% year over year. However, the bottom line missed the Zacks Consensus Estimate of $1.67.

OZK’s results were primarily hurt because of an increase in expenses and provisions. Nevertheless, higher NII and non-interest income were the tailwinds. Increases in loans and deposit balances were other positives.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research