• Earnings Per Share (EPS): $0.91 for Q4 2024, up from $0.81 in Q3 2024.
• Net Income: $69.3 million for Q4 2024.
• Net Interest Margin (NIM): Increased to 2.84% from 2.78% in the previous quarter.
• Return on Assets (ROA): 78 basis points for Q4 2024.
• Return on Equity (ROE): 9.7% for Q4 2024.
• Cost of Deposits: Declined to 2.72% from 3.06% in the previous quarter.
• Loan to Deposit Ratio: 87.2% at the end of 2024, down from 92.8% a year ago.
• Net Charge Offs: 16 basis points for the year.
• Non-Performing Assets (NPA): 63 basis points, excluding guaranteed SPA loans.
• Common Equity Tier 1 (CET1) Ratio: 12%.
• Tangible Common Equity to Tangible Assets (TCE/TA) Ratio: 7.8%.
• Book Value Per Share: $36.61.
• Total Deposits Growth: $1.3 billion for the year.
• Non-Brokered Deposits Growth: $1.4 billion for the year.
• Wholesale Funding Reduction: Down $2.3 billion for the year.
• Commercial and Industrial (C&I) and Commercial Real Estate (CRE) Loan Growth: $470 million for the year.
• Residential and Non-Core Loan Portfolio Decline: $959 million for the year.

• Warning! GuruFocus has detected 7 Warning Sign with BKU.

Release Date: January 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• BankUnited Inc (NYSE:BKU) reported a strong quarter with EPS growing to $0.91, significantly above the consensus estimate of $0.73.
• Net interest margin improved by 6 basis points to 2.84%, exceeding internal expectations.
• The company achieved a notable reduction in the cost of deposits, with interest-bearing deposit costs declining by 45 basis points.
• Non-interest bearing demand deposits (NIDDA) grew by $781 million for the year, contributing to a healthier deposit mix.
• BankUnited Inc (NYSE:BKU) maintained a solid credit profile with net charge-offs at 16 basis points, which is considered strong for a commercial bank.

Negative Points

• Loan growth was impacted by higher-than-expected payoffs, leading to a $101 million decline in loans for the quarter.
• The company experienced a $26 million increase in non-performing loans due to one office loan, highlighting potential vulnerabilities in the office loan portfolio.
• There is increased competition in the lending market, leading to tighter spreads and potential pressure on margins.
• The company anticipates some pressure on net interest margin in the first quarter of 2025 due to the roll-off of hedges.
• BankUnited Inc (NYSE:BKU) faces uncertainties related to policy changes and competition, which could impact future performance.

Q & A Highlights

Q: Can you provide guidance on net interest income (NII) growth for the upcoming year? A: Leslie Lunak, CFO: Last year, NII grew by 5%. For next year, we are projecting mid to high single-digit growth.

Q: How do you plan to address potential challenges in deposit gathering given the current competitive environment? A: Rajinder Singh, CEO: We are confident in demand deposit growth due to strong pipelines and mandates. While competition may increase for interest-bearing deposits, we have successfully reduced costs in this area recently. The main competition is on the lending side, with tighter spreads and banks returning to non-relationship business.

Q: What is the outlook for wholesale funding and the overall balance sheet growth? A: Rajinder Singh, CEO: We have significantly reduced wholesale borrowings and do not expect much further reduction. The balance sheet will likely grow slightly, but not significantly.

Q: Can you discuss the seasonality and expectations for loan growth, particularly in the C&I segment? A: Leslie Lunak, CFO: Loan production is typically lighter in the first quarter and ramps up later in the year. The flatness in Q4 was due to unpredictable payoffs, but production levels and pipelines remain strong.

Q: What are your thoughts on potential regulatory changes and their impact on the bank? A: Rajinder Singh, CEO: We have no major complaints about current regulations. However, the slowdown in M&A approvals is concerning as it impacts the system and communities. A more business-oriented regulatory environment would benefit our clients and the industry.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.