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1. Company Snapshot

1.a. Company Description

BankUnited, 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.

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1.b. Last Insights on BKU

BankUnited's recent performance was driven by strong Q4 earnings, fueled by higher net interest income and fee revenues. The company's net interest margin expanded by 6 basis points, and it reported $769 million in core loan growth. A $200 million stock buyback authorization was also announced, indicating a positive outlook. Analysts raised their forecasts following the upbeat Q4 earnings, citing robust deposit growth driven by organic sources. However, some analysts maintain a "hold" rating due to asset and credit quality concerns. (Source: Marketbeat Ratings)

1.c. Company Highlights

2. BankUnited's Strong Q4 Results Driven by Double-Digit PPNR Growth

BankUnited reported a strong fourth quarter with earnings of $69.3 million, or $0.90 a share, and adjusted EPS of $0.94. The company's pre-provision net revenue (PPNR) was $115 million, up from $109.5 million last quarter and $104 million in the fourth quarter of last year. The net interest margin (NIM) expanded to 3.06%, up 22 basis points from the fourth quarter of last year. The company's annualized return on assets (ROA) was 78 basis points, or 81 basis points adjusted for the software write-down. The actual EPS of $0.90 beat analyst estimates of $0.85.

Publication Date: Jan -22

📋 Highlights
  • Double-Digit Earnings Growth:: Earnings increased to $69.3M ($0.90/share) with adjusted EPS of $0.94, driven by 14% YoY PPNR growth to $115M.
  • Margin Expansion:: Net interest margin (NIM) rose 6 bps to 3.06%, outpacing prior-year growth (+22 bps), fueled by lower deposit costs.
  • Deposit Growth:: NIDDA surged $1.5B annually (+$844M average), with DDA mix rising to 31% (up from 27%) for better funding stability.
  • Capital Strength:: CET1 ratio maintained at 12.3%, with $200M share buyback authorization and a 2 cents/share dividend hike reflecting confidence.
  • 2026 Guidance:: Anticipates 2-3% loan growth, 6% deposit growth, and 8% revenue growth, with NIM expected to reach 3.20% amid two Fed rate cuts.

Loan and Deposit Growth

The company's deposits and loans saw significant growth, with non-interest-bearing demand deposits (NIDDA) up $485 million on a spot basis and $1.5 billion for the year. Average NIDDA for the quarter was up $505 million, and for the year, it was up $844 million. Core loans grew by $769 million, with commercial real estate (CRE) up $276 million, commercial and industrial (C&I) up $474 million, and mortgage warehouse up $19 million.

Capital Position and Guidance

The company's capital position remained strong, with common equity tier 1 (CET1) at 12.3% and tangible common equity to tangible assets at 8.5%. The board authorized an additional $200 million share buyback, and the dividend was increased by 2 cents. Guidance for next year includes loan growth of 2-3%, deposit growth of 6%, and revenue growth of 8%. The company expects margin improvement to 3.20% and provision to be similar to last year.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of around 1.25, the company's valuation appears reasonable. The dividend yield is 2.46%, providing a relatively attractive return for investors. Analysts estimate next year's revenue growth at 5.3%, which is lower than the company's guidance of 8%. The company's strong capital position and guidance for future growth support its current valuation.

3. NewsRoom

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Sanjiv Sobti Sells 5,000 Shares of BankUnited (NYSE:BKU) Stock

Feb -12

Source: defenseworld.net

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Summit Global Investments Invests $698,000 in BankUnited, Inc. $BKU

Feb -01

Source: defenseworld.net

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Maryland State Retirement & Pension System Sells 11,291 Shares of BankUnited, Inc. $BKU

Jan -24

Source: defenseworld.net

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BKU's Q4 Earnings Beat on Higher NII & Fee Income, Stock Jumps 9%

Jan -22

Source: zacks.com

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BankUnited Analysts Raise Their Forecasts After Upbeat Q4 Earnings

Jan -22

Source: benzinga.com

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BankUnited (NYSE:BKU) Hits New 12-Month High Following Strong Earnings

Jan -22

Source: defenseworld.net

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BankUnited (BKU) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates

Jan -21

Source: zacks.com

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BankUnited, Inc. (BKU) Q4 Earnings and Revenues Surpass Estimates

Jan -21

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.40%)

6. Segments

Banking and Related Activities

Expected Growth: 5.4%

BankUnited's 5.4% growth in Banking and Related Activities is driven by strategic expansion into new markets, increased commercial lending, and a rise in non-interest income from fee-based services. Additionally, effective cost management and a favorable interest rate environment have contributed to the growth.

7. Detailed Products

Commercial Banking

BankUnited's commercial banking services provide cash management, treasury management, and lending solutions to businesses of all sizes.

Consumer Banking

BankUnited's consumer banking services offer personal checking and savings accounts, credit cards, and personal loans to individuals.

Mortgage Banking

BankUnited's mortgage banking services provide residential and commercial mortgage loans to individuals and businesses.

Treasury Management

BankUnited's treasury management services provide cash management, wire transfer, and account analysis services to businesses.

Private Banking

BankUnited's private banking services offer personalized financial services, including investment management and wealth planning, to high net worth individuals.

Small Business Administration (SBA) Loans

BankUnited's SBA loan services provide financing solutions to small businesses.

8. BankUnited, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

BankUnited, Inc. operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand reputation and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

BankUnited, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand reputation and customer loyalty make it difficult for customers to negotiate better terms.

Bargaining Power Of Suppliers

BankUnited, Inc. has a strong bargaining position with its suppliers, given its large scale of operations and diversified supplier base. This reduces the bargaining power of suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and significant capital requirements. This makes it difficult for new entrants to compete with established players like BankUnited, Inc.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. BankUnited, Inc. faces intense competition from larger banks and fintech companies, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 79.61%
Debt Cost 7.37%
Equity Weight 20.39%
Equity Cost 10.60%
WACC 8.03%
Leverage 390.39%

11. Quality Control: BankUnited, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

48.19$

Current Price

48.19$

Potential

-0.00%

Expected Cash-Flows