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Bankunited (BKU)
NYSE:BKU
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BankUnited
(NYSE:BKU)
Rating:75Outperform
Price Target:―
Positive Factors
Company Potential
Management is optimistic about deposit concentrations reaching over 30%, improving the company's attractiveness as a potential consolidation candidate.
Earnings
BankUnited reported better than expected NIM expansion and lower provision drove an EPS beat.
Financial Performance
The company posted its most profitable quarter in nearly two years, with a notable return on assets and equity.
Negative Factors
Guidance and Forecasts
2024 guidance updates were net negative related to loans and expenses.
Loan Growth
Loan growth on a period end basis decreased 4% annualized Q/Q driven by declines in all loan categories excluding commercial real estate.
Loan Performance
Loan balances were negatively impacted by larger payoff activity in the C&I book, as M&A picked up.
BankUnited (BKU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.67B
Dividend Yield3.5%
Average Volume (3M)715.45K
Price to Earnings (P/E)11.0
Beta (1Y)1.29
Revenue Growth-0.61%
EPS Growth39.49%
CountryUS
Employees1,662
SectorFinancial
Sector Strength79
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.78
Shares Outstanding75,211,920
10 Day Avg. Volume703,344
30 Day Avg. Volume715,448
Financial Highlights & Ratios
PEG Ratio-0.44
Price to Book (P/B)1.10
Price to Sales (P/S)0.00
P/FCF Ratio2.16
Enterprise Value/Market Cap3.09
Enterprise Value/Revenue2.01
Enterprise Value/Gross Profit8.31
Enterprise Value/Ebitda7.28
Forecast
1Y Price Target
$39.86Price Target Upside14.28% Upside
Rating ConsensusHold
Number of Analyst Covering7
BankUnited Business Overview & Revenue Model
Company DescriptionBankUnited, Inc. operates as the bank holding company for BankUnited, a national banking association that provides a range of banking services in the United States. The company offers deposit products, such as checking, money market deposit, and savings accounts; certificates of deposit; and treasury, commercial payment, and cash management services. Its loans portfolio includes commercial loans, including equipment loans, secured and unsecured lines of credit, formula-based loans, owner-occupied commercial real estate term loans and lines of credit, mortgage warehouse lines, letters of credit, commercial credit cards, small business administration and U.S. department of agriculture product offerings, export-import bank financing products, trade finance, and business acquisition finance credit facilities; commercial real estate loans; residential mortgages; and other consumer loans. The company also offers online, mobile, and telephone banking services. As of December 31, 2021, it operated through a network of 63 banking centers located in 13 Florida counties; and 4 banking centers in the New York metropolitan area. The company was formerly known as BU Financial Corporation. BankUnited, Inc. was incorporated in 2009 and is headquartered in Miami Lakes, Florida.
How the Company Makes MoneyBankUnited makes money primarily through the interest income generated from its lending activities. The bank extends loans to businesses and individuals, including commercial real estate loans, residential mortgages, and consumer loans, earning interest over the life of these loans. Additionally, BankUnited generates non-interest income through fees and charges associated with deposit accounts, loan servicing, and other banking services. The company also invests in securities, earning returns from its investment portfolio. BankUnited's profitability is influenced by factors such as interest rate fluctuations, credit risk management, and its ability to attract and retain deposits.
BankUnited Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: 3.72%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a solid quarter with several positive outcomes such as exceeding net income expectations, successful system conversion, and strong deposit growth. However, challenges such as margin compression, a decline in the loan portfolio, and an uncertain economic environment present areas of concern.Q1-2025 Updates
Positive Updates
Net Income Exceeds Expectations
Net income for the quarter was $58.5 million or $0.78 per share, slightly better than the consensus of $0.76.
Successful GL System Conversion
The company successfully completed a General Ledger conversion without any issues, leading to improved operational efficiency.
Decrease in Cost of Deposits
Cost of deposits decreased by 14 basis points to 2.58% from 2.72% last quarter.
Strong Deposit Growth
Total deposit growth, excluding brokered deposits, was $719 million for the quarter.
Stable Credit Quality
The provision for credit losses was $15 million with an ACL-to-loans ratio remaining unchanged at 92 basis points.
Dividend Increase
The company increased its dividend by a couple of pennies, continuing a trend of steady dividend growth.
Negative Updates
Slight Margin Compression
Net interest margin declined by 3 basis points to 2.81% from 2.84% last quarter.
Loan Portfolio Decline
Total loans were down $300 million, with a $100 million decline in the core commercial book.
Uncertain Economic Environment
The macro environment remains uncertain, with a widening 'cone of uncertainty' due to interest rate volatility and economic conditions.
Increase in Non-Performing Loans
Net charge-offs for the quarter amounted to $19.4 million, or 33 basis points annualized.
Company Guidance
In the BankUnited First Quarter 2025 earnings call, the company reported a net income of $58.5 million, or $0.78 per share, slightly surpassing the consensus estimate of $0.76. The net interest margin decreased by 3 basis points to 2.81%, primarily due to rolling off some hedges, but this was in line with expectations. The cost of deposits decreased by 14 basis points to 2.58%, and interest-bearing deposits saw a 21 basis point reduction to 3.54%. Total deposits, excluding brokered, grew by $719 million, while the loan-to-deposit ratio stood at 85.5%. The CET1 ratio increased to 12.2%, and the tangible book value per share rose to $37.48. The bank maintained its guidance from the previous quarter, despite acknowledging a wider "cone of uncertainty" due to an unstable economic environment and fluctuating interest rates.BankUnited Financial Statement Overview
Summary
BankUnited demonstrates robust revenue growth and a healthy profit margin, with a strong capital structure marked by no debt in 2024. However, challenges include a decline in return on equity and stagnant free cash flow growth, indicating areas for improvement in operational efficiency and cash generation.Income Statement
BankUnited shows a strong gross profit margin consistently at 100%, which is typical for financial institutions where revenue equals gross profit. The net profit margin for 2024 is approximately 12.07%, a slight increase from the previous year. Revenue growth has been impressive, with a substantial increase of 120.49% from 2023 to 2024, indicating robust business expansion. However, the lack of EBITDA data limits a complete profitability analysis.85
Very Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of 7.99% in 2024, indicating a strong capital base. The debt-to-equity ratio is favorable at 0, showcasing low financial leverage and risk. However, the return on equity has decreased to 8.26% in 2024, down from 13.81% the previous year, suggesting declining efficiency in generating profits from shareholders' equity.70
Positive
Cash Flow
BankUnited's free cash flow remained stable, with no growth reported in 2024. The operating cash flow to net income ratio is 0.42, indicating moderate cash generation from operations relative to net income. The absence of growth in free cash flow presents concerns over cash generation potential despite positive cash flow metrics.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.20B | 1.01B | 873.03M | 915.44M | 1.09B | 884.98M | Gross Profit |
| 991.74M | 1.01B | 873.03M | 990.60M | 929.84M | 884.98M | EBIT |
| -61.11M | 316.35M | 237.08M | 465.27M | 572.63M | 250.06M | EBITDA |
| 357.08M | 376.46M | 237.08M | 452.75M | 527.88M | 321.87M | Net Income Common Stockholders |
| 241.37M | 232.47M | 178.67M | 284.97M | 414.98M | 197.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 9.54B | 491.12M | 588.28M | 572.65M | 314.86M | 397.72M | Total Assets |
| 34.83B | 35.24B | 35.76B | 37.03B | 35.82B | 35.01B | Total Debt |
| 3.11B | 3.64B | 5.82B | 6.33B | 2.83B | 3.85B | Net Debt |
| 2.67B | 3.15B | 5.24B | 5.76B | 2.31B | 3.45B | Total Liabilities |
| 31.93B | 32.43B | 33.18B | 34.59B | 32.78B | 32.03B | Stockholders Equity |
| 2.90B | 2.81B | 2.58B | 2.44B | 3.04B | 2.98B |
| Cash Flow | Free Cash Flow | ||||
| 210.90M | 433.78M | 657.50M | 1.29B | 1.19B | 844.57M | Operating Cash Flow |
| 210.90M | 433.78M | 657.50M | 1.29B | 1.22B | 864.17M | Investing Cash Flow |
| 218.98M | 409.71M | 980.57M | -2.12B | -1.64B | -2.62B | Financing Cash Flow |
| -555.25M | -940.66M | -1.62B | 1.08B | 334.87M | 1.94B |
BankUnited Technical Analysis
Positive
34.88
Price Trends
33.30
Positive
35.23
Negative
36.25
Negative
Market Momentum
0.20
Positive
53.93
Neutral
79.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKU, the sentiment is Positive. The current price of 34.88 is above the 20-day moving average (MA) of 34.80, above the 50-day MA of 33.30, and below the 200-day MA of 36.25, indicating a neutral trend. The MACD of 0.20 indicates Positive momentum. The RSI at 53.93 is Neutral, neither overbought nor oversold. The STOCH value of 79.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BKU.
BankUnited Risk Analysis
BankUnited disclosed 44 risk factors in its most recent earnings report. BankUnited reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
BankUnited Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.67B | 11.03 | 8.63% | 3.50% | -0.61% | 39.49% | |
75 Outperform | $2.34B | 10.16 | 9.58% | 3.93% | 8.05% | -3.31% | |
75 Outperform | $2.20B | 10.64 | 9.16% | 3.81% | 1.42% | 2.77% | |
75 Outperform | $2.68B | 17.01 | 12.98% | 2.58% | 11.81% | 23.34% | |
70 Outperform | $2.60B | 14.65 | 8.36% | 2.89% | 8.59% | 17.97% | |
64 Neutral | $12.85B | 9.81 | 7.79% | 78.20% | 12.23% | -7.93% | |
58 Neutral | $2.43B | 16.61 | 4.20% | 4.41% | 2.90% | -12.63% |
* Financial Sector Average
Performance Comparison
BKU
BankUnited
34.88
7.92
29.38%
FFBC
First Financial Bancorp
24.03
3.73
18.37%
FRME
First Merchants
37.32
7.04
23.25%
PRK
Park National
163.90
31.16
23.47%
SFNC
Simmons 1st Nat'l
19.03
3.06
19.16%
TOWN
TowneBank
34.24
8.63
33.70%
BankUnited Corporate Events
Executive/Board ChangesShareholder Meetings
BankUnited Approves Key Proposals at Annual Meeting
Neutral
May 23, 2025
On May 22, 2025, BankUnited, Inc. held its annual meeting of shareholders where three key proposals were voted on. The election of nine directors to the Board was approved, Deloitte & Touche LLP was ratified as the independent registered public accounting firm for 2025, and the compensation of the Company’s named executive officers was approved.
The most recent analyst rating on (BKU) stock is a Sell with a $42.00 price target. To see the full list of analyst forecasts on BankUnited stock, see the BKU Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.