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BankUnited (BKU) AI Stock Analysis

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BKU

BankUnited

(NYSE:BKU)

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Outperform 72 (OpenAI - 4o)
Rating:72Outperform
Price Target:
$41.00
â–²(7.33% Upside)
BankUnited's overall stock score reflects strong earnings performance and attractive valuation, supported by positive technical indicators. While financial performance shows solid profitability, challenges with revenue growth and cash flow sustainability need addressing. The strategic initiatives and stock buyback program indicate confidence in future growth, but risks associated with non-performing loans in the office sector remain.
Positive Factors
Deposit Growth
Strong deposit growth enhances liquidity and supports lending capacity, indicating robust customer trust and market position.
Net Interest Margin Expansion
Margin expansion reflects effective interest rate management, improving profitability and competitive positioning in the banking sector.
Capital Strength
Strong capital ratios and book value growth indicate financial resilience and capacity to absorb potential losses, supporting long-term stability.
Negative Factors
Non-Performing Loans Increase
Rising non-performing loans, especially in the office sector, pose a risk to asset quality and could pressure future earnings and capital.
Revenue Growth Challenges
Declining revenue growth suggests potential market share loss or competitive pressures, impacting long-term growth prospects.
Cash Flow Sustainability
Reduced free cash flow growth may limit investment capacity and financial flexibility, affecting long-term operational sustainability.

BankUnited (BKU) vs. SPDR S&P 500 ETF (SPY)

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 generates revenue primarily through interest income from loans and fees associated with its financial products and services. The bank makes money by lending to customers at higher interest rates than what it pays on deposits, a key component of its net interest margin. Key revenue streams include commercial and consumer loans, mortgage originations, and deposit account service fees. Additionally, the bank earns income from investment securities and service charges on deposit accounts. Partnerships with financial technology firms and local businesses also contribute to its earnings by enhancing service offerings and customer engagement.

BankUnited Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong quarter with significant achievements in earnings, deposit growth, and margin expansion. However, challenges remain with the increase in non-performing loans, particularly in the office sector, and a decline in C&I loans. The bank's strategic expansion and stock buyback program reflect confidence in future growth and stability.
Q2-2025 Updates
Positive Updates
Net Income and Earnings Per Share Beat
Net income for the quarter was $68.8 million or $0.91 per share, exceeding the consensus estimate of $0.79 per share.
Record Deposit Growth
NIDDA grew by more than $1 billion, with average NIDDA up $581 million and total non-brokered deposits increasing by $1.2 billion.
Improved Return Metrics
ROA improved to 78 basis points from 68 last quarter and ROE improved to 9.4% from 8.2% last quarter.
Margin Expansion
Net interest margin expanded from 2.81% last quarter to 2.93%, with net interest income increasing by 5.6% quarter-over-quarter.
Capital Strength
CET1 ratio is at 12.2%, with a pro-forma basis, including AOCI, at 11.3%. Tangible book value per share increased by 9% over the last 12 months.
Stock Buyback Program
The Board authorized a $100 million stock buyback program, indicating confidence in the company's capital position.
New Market Expansions
Expanded into New Jersey and Charlotte, showing strategic growth initiatives in key markets.
Negative Updates
Increase in Non-Performing Loans (NPLs)
NPLs increased by $117 million, with $86 million attributed to office-related exposure.
C&I Loan Decline
C&I loans declined by $199 million despite good production, due to higher payoff activity and strategic exits.
Exposure to Office Market Risks
Significant portion of criticized and classified loans are in the office sector, with office-related NPLs contributing to the increase in overall NPLs.
Company Guidance
During the BankUnited Second Quarter 2025 Earnings Conference Call, CEO Raj Singh highlighted several positive financial metrics. The company reported a net income of $69 million or $0.91 per share, surpassing the consensus estimate of $0.79 per share. The return on assets (ROA) improved to 78 basis points from 68 basis points last quarter, while the return on equity (ROE) increased to 9.4% from 8.2% in the previous quarter. BankUnited achieved impressive deposit growth, with non-interest-bearing deposit accounts (NIDDA) increasing by over $1 billion, contributing to a total non-brokered deposit growth of $1.2 billion. Despite the seasonality of these numbers, year-over-year NIDDA growth was up 13%. The bank also reported a decline in deposit costs, with spot cost of deposits decreasing to 2.37% from 2.52% in the prior quarter. The loan-to-deposit ratio improved to 83.6%, and the net interest margin expanded from 2.81% to 2.93%. Additionally, the company experienced a $156 million decline in criticized and classified loans, although non-performing loans (NPLs) increased by $117 million, primarily due to office-related loans. Capital metrics remained strong, with the Common Equity Tier 1 (CET1) ratio at 12.2% and tangible book value per share growing by 9% over the past year. The board authorized a $100 million stock buyback program, reflecting confidence in the bank's capital position.

BankUnited Financial Statement Overview

Summary
BankUnited demonstrates solid profitability and operational efficiency, but faces challenges with revenue growth and cash flow sustainability. The company has improved its leverage position, which is a positive sign for financial stability. Continued focus on revenue growth and cash flow management will be crucial for future success.
Income Statement
65
Positive
BankUnited's income statement shows mixed results. The TTM data indicates a decline in revenue growth rate, which is concerning. However, the company maintains healthy gross and net profit margins, suggesting efficient operations. The EBIT and EBITDA margins are stable, reflecting consistent operational performance despite revenue challenges.
Balance Sheet
70
Positive
The balance sheet reveals a moderate debt-to-equity ratio, which has improved from previous years, indicating better leverage management. Return on equity is reasonable, showing effective use of equity to generate profits. The equity ratio is stable, suggesting a balanced approach to asset financing.
Cash Flow
60
Neutral
Cash flow analysis shows a decline in free cash flow growth, which could impact future liquidity. However, the operating cash flow to net income ratio is positive, indicating that the company generates sufficient cash from operations to cover net income. The free cash flow to net income ratio remains strong, reflecting good cash conversion.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.96B2.02B1.94B1.31B1.09B1.20B
Gross Profit999.76M958.35M873.03M915.44M996.96M706.55M
EBITDA408.77M376.46M311.14M452.75M527.88M321.87M
Net Income258.00M232.47M178.67M284.97M414.98M197.85M
Balance Sheet
Total Assets35.46B35.24B35.76B37.03B35.82B35.01B
Cash, Cash Equivalents and Short-Term Investments10.20B491.12M588.28M572.65M314.86M397.72M
Total Debt2.96B3.64B5.82B6.33B2.83B4.03B
Total Liabilities32.51B32.43B33.18B34.59B32.78B32.03B
Stockholders Equity2.95B2.81B2.58B2.44B3.04B2.98B
Cash Flow
Free Cash Flow365.58M433.78M657.50M1.29B1.19B844.57M
Operating Cash Flow365.58M433.78M657.50M1.29B1.22B864.17M
Investing Cash Flow234.15M409.71M980.57M-2.12B-1.64B-2.62B
Financing Cash Flow-231.89M-940.66M-1.62B1.08B334.87M1.94B

BankUnited Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price38.20
Price Trends
50DMA
37.98
Positive
100DMA
36.57
Positive
200DMA
36.19
Positive
Market Momentum
MACD
0.09
Positive
RSI
48.64
Neutral
STOCH
37.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKU, the sentiment is Neutral. The current price of 38.2 is below the 20-day moving average (MA) of 38.65, above the 50-day MA of 37.98, and above the 200-day MA of 36.19, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 48.64 is Neutral, neither overbought nor oversold. The STOCH value of 37.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$2.66B16.1112.17%2.88%10.28%22.73%
72
Outperform
$2.90B11.338.98%3.14%-2.80%51.85%
72
Outperform
$2.67B13.279.09%4.13%-5.14%-0.70%
70
Neutral
$3.02B29.065.61%1.32%-5.80%-22.11%
69
Neutral
$2.88B15.437.56%2.92%8.34%14.44%
68
Neutral
$2.85B15.534.51%4.30%-0.30%6.05%
68
Neutral
$18.00B11.429.92%3.81%9.73%1.22%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BKU
BankUnited
38.20
4.15
12.19%
CVBF
Cvb Financial
19.07
2.19
12.97%
PRK
Park National
162.50
3.59
2.26%
SFNC
Simmons 1st Nat'l
19.36
-1.01
-4.96%
TOWN
TowneBank
34.75
3.72
11.99%
FBK
FB Financial
55.59
11.13
25.03%

BankUnited Corporate Events

Stock BuybackFinancial Disclosures
BankUnited Announces $100M Share Repurchase Program
Positive
Jul 23, 2025

On July 22, 2025, BankUnited‘s Board of Directors authorized a share repurchase program of up to $100 million and the redemption of $400 million in senior notes due November 2025. The company reported strong financial results for the second quarter of 2025, with a net income increase of 18% from the previous quarter and a 25% increase compared to the same period in 2024. The company also saw improvements in net interest margin, deposit growth, and a decline in criticized and classified loans, indicating a robust financial position.

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.

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.Date of analysis: Aug 22, 2025