BankUnited (NYSE:BKU) executives told investors the company delivered what CEO Raj Singh described as a “great year” in fiscal 2025, citing double-digit growth across multiple profitability measures and continued net interest margin expansion. On the fourth-quarter earnings call, management emphasized strong deposit and core loan growth, improved funding costs, and a new share repurchase authorization alongside a dividend increase.
Fourth-quarter earnings and profitability trends
Singh said fourth-quarter earnings were “very strong…on just about every metric,” reporting net income of $69.3 million, or $0.90 per share. CFO Jim Mackey noted results included a one-time write-down of previously capitalized software tied to a technology stack review and strategic planning. Excluding that charge, Mackey said net income would have been about $72 million, or $0.94 per share.
Deposits: NIDDA growth offsets seasonal softness
Management pointed to notable deposit momentum, particularly growth in non-interest demand deposit accounts (NIDDA). Singh said NIDDA increased $485 million on a period-end “spot basis” in the quarter and was up $1.5 billion for the year. However, he cautioned that average balances provide a clearer view given quarter-end volatility and seasonal factors. Average NIDDA was up about $505 million in the quarter and $844 million for the year, which Singh described as “pretty solid numbers.”
Total deposits increased $735 million in the quarter and $1.5 billion for the year, according to COO Tom Cornish. Singh noted the company’s title business (NTS) was down seasonally in December, as expected, but said strength elsewhere more than offset that typical slowdown.
During the Q&A session, Singh and Cornish said deposit growth was broad-based rather than driven by one business line. Singh said every business line contributed, with title the only negative due to seasonality. Cornish added that roughly two-thirds of operating account growth came from “new wallets” (new relationships) and about one-third from “expanded wallets” (deepening existing relationships).
At year-end, NIDDA represented 31% of total deposits, up from 30% the prior quarter and 27% at the end of the prior year, according to management. Singh reiterated a longer-term aim to return to a peak of 34% reached during the COVID period, and later indicated management’s budget suggests the mix could reach about 33% in 2026, with “a good chance” of hitting that level this year.
Deposit costs declined meaningfully during the quarter, with Singh stating the spot cost of deposits fell 21 basis points to 2.10% from 2.31% at the end of September and was down 53 basis points from the prior year. Mackey said BankUnited has been “successful…passing along rate cuts timely,” supporting margin expansion.
Loan growth rebounds as exits slow
BankUnited reported strong core loan growth in the quarter after several periods when payoffs and strategic exits weighed on balances. Singh said core loans increased $769 million, which he characterized as “a very big quarter.” Cornish detailed the quarterly change:
- Commercial real estate (CRE) loans: +$276 million
- C&I loans: +$474 million
- Mortgage warehouse: +$19 million
Cornish said the pace of strategic exits and payoffs has moderated compared with earlier quarters, suggesting the company has largely worked through planned exits. For the broader portfolio, residential loans declined $148 million, while franchise equipment and municipal finance declined a combined $50 million. Total loan growth was $571 million in aggregate, and the loan-to-deposit ratio ended the quarter at 82.7%.
Looking ahead, Singh provided 2026 guidance that calls for core loan growth of about 6%, with residential and other runoff of about 8%, resulting in total loan growth in the 2% to 3% range. Cornish said the treasury and operating account pipeline entering the new year is “very good,” noting deposits often follow loan funding with a lag.
Credit, CRE metrics, capital actions, and 2026 outlook
On credit, Singh said criticized and classified loans declined $27 million and non-performing loans fell $7 million. The quarter included higher provision and charge-offs, which management described as episodic. Singh highlighted a $10 million fraud-related loan loss included in the quarter’s results, describing it as a New York contractor that “shuttered…in a matter of days,” resulting in a complete write-off with no collateral to recover.
Mackey reported charge-offs were just under $25 million, or 30 basis points, and provision expense was $25.6 million. The allowance for credit losses remained around $220 million, which Mackey characterized as roughly flat. Management said it expects non-performing loans to continue to decline.
Cornish provided additional color on CRE, describing 2025 as a “good year” with 9% growth and total CRE exposure of $6.8 billion, or 28% of total loans. He cited a weighted average loan-to-value of 55% and a weighted average debt service coverage ratio of 1.82. Florida represented 48% of the CRE portfolio, with New York at 22%. Office exposure declined $98 million, or about 6%, from the prior quarter, and criticized and classified CRE loans fell $36 million on payoffs and paydowns. Cornish said trends in the office book are “generally positive” and he expects more competition as more banks return to CRE lending.
On capital, Singh said CET1 was 12.3%, partly impacted by growth and fourth-quarter buybacks, and 11.6% on a pro forma basis including AOCI. Tangible common equity to tangible assets was 8.5%, and tangible book value per share rose to $40.14, which Singh said represented about 10% year-over-year growth.
The board authorized an additional $200 million share repurchase program, on top of roughly $50 million remaining from a prior $100 million authorization, providing about $250 million of total remaining capacity, Singh said. The board also increased the dividend by $0.02. Singh reiterated the company’s goal of targeting “middle of the pack” peer capital levels, describing a CET1 target around 11.5%.
For 2026, management’s guidance includes NIDDA growth of about 12%, total deposits excluding brokered deposits growth of about 6%, revenue growth of about 8%, and net interest margin improving from 3.06% to about 3.20%. Singh said tighter spreads were factored into the outlook, and management’s assumptions include an economic environment similar to today and about two Fed rate cuts, though he emphasized the balance sheet is “fairly hedged” and not highly sensitive to modest differences in the number of cuts. Mackey also reminded investors about seasonality, including typically lower early-year loan volume and higher NIDDA balances in the second and third quarters.
About BankUnited (NYSE:BKU)
BankUnited, Inc is a bank holding company based in Miami Lakes, Florida, operating through its subsidiary BankUnited, National Association. The company provides a broad range of commercial banking products and services, including deposit accounts, commercial lending and treasury management. It serves middle-market and small-business clients, offering tailored financing solutions across a variety of industry sectors.
The bank’s lending portfolio includes commercial and industrial loans, commercial real estate loans and construction financing, as well as residential mortgage lending.
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