BankUnited Posts Strong Q1 Results Despite Economic Headwinds
Despite the ongoing economic uncertainty, BankUnited, Inc. has reported a solid first quarter (Q1) 2025, with net income coming in at $58.5 million or $0.78 a share, slightly better than consensus estimates.
In his opening remarks on the company's Q1 2025 Earnings Conference Call, Raj Singh, Chairman, President and CEO of BankUnited, acknowledged the challenging economic environment but expressed confidence in the bank's performance. "We went through a GL conversion, which is a fairly big undertaking, led by Leslie [Lunak], our Chief Financial Officer," he said. "It went flawlessly, and we didn't need the extra 2-3 days that we thought we might need."
The company's net income for Q1 2025 was $58.5 million, with a margin of 2.81%, down 3 basis points from last quarter. This was exactly in line with expectations, with most of the decline attributed to some hedges rolling off. Cost of deposits came down by 14 basis points at 2.58 from 2.72 last quarter, while cost of interest-bearing deposits decreased by 21 basis points.
Notably, BankUnited's Net Interest Differential and Deposit Account (NIDDA) was up $453 million in Q1 2025, as expected. Average NIDDA was down a little bit due to seasonality, but the company is expecting an even better second quarter, with total deposit growth excluding brokered deposits coming in at $719 million.
Wholesale funding, which includes brokered and wholesale FHLB borrowings, was down $1.1 billion, while total loans were down $300 million. This can be attributed to the company's efforts to run down some of its commercial finance subs and resi book.
"This was a good quarter, solid quarter in terms of where we landed versus our expectations," Singh said, highlighting the bank's ability to navigate the economic uncertainty. "We'll get to that in a second, but first, let's go through what the last 90 days were like."
The company's Q1 2025 results demonstrate its resilience and ability to adapt to changing market conditions. As Singh noted, despite the challenges, BankUnited has come out with a strong performance, providing confidence for investors and customers alike.
