BankUnited (BKU)

Regional banking company BankUnited (NYSE:BKU) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 7.8% year on year to $288.2 million. Its non-GAAP profit of $0.94 per share was 5.5% above analysts’ consensus estimates.

Company Overview

Born from the ashes of a failed Florida thrift during the 2009 financial crisis, BankUnited (NYSE:BKU) is a regional bank that provides commercial lending, deposit services, and treasury solutions to businesses and consumers primarily in Florida and the New York metropolitan area.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

BankUnited competes with large national banks like JPMorgan Chase, Bank of America, and Wells Fargo, as well as regional players including Truist, PNC, Regions Bank, and TD Bank in its Florida and Southeast markets. In the Tri-State area, additional competitors include Capital One, Valley National Bank, and M&T Bank, along with numerous community banks.

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Regrettably, BankUnited’s revenue grew at a sluggish 4.5% compounded annual growth rate over the last five years. This was below our standard for the banking sector and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. BankUnited’s annualized revenue growth of 5.4% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, BankUnited reported year-on-year revenue growth of 7.8%, and its $288.2 million of revenue exceeded Wall Street’s estimates by 2.2%.

Net interest income made up 88.4% of the company’s total revenue during the last five years, meaning BankUnited barely relies on non-interest income to drive its overall growth.

While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

BankUnited’s weak 4.9% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For BankUnited, its two-year annual EPS growth of 20% was higher than its five-year trend. This acceleration made it one of the faster-growing banking companies in recent history.

In Q4, BankUnited reported adjusted EPS of $0.94, up from $0.90 in the same quarter last year. This print beat analysts’ estimates by 5.5%. Over the next 12 months, Wall Street expects BankUnited’s full-year EPS of $3.57 to grow 2.1%.

The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.

BankUnited’s TBVPS grew at a decent 5.2% annual clip over the last five years. TBVPS growth has accelerated recently, growing by 9.3% annually over the last two years from $33.62 to $40.14 per share.

Over the next 12 months, Consensus estimates call for BankUnited’s TBVPS to grow by 6.2% to $42.62, lousy growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, BankUnited has averaged a Tier 1 capital ratio of 12%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, BankUnited has averaged an ROE of 9.8%, uninspiring for a company operating in a sector where the average shakes out around 7.5%.

It was encouraging to see BankUnited beat analysts’ revenue expectations this quarter. We were also happy its net interest income outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $46.29 immediately following the results.

Updated: January 21, 2026 at 6:59 AM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in BankUnited.

BankUnited doesn’t pass our quality test. To kick things off, its revenue growth was weak over the last five years, and analysts don’t see anything changing over the next 12 months. And while its expanding net interest margin shows its loan book is becoming more profitable, the downside is its anticipated efficiency ratio over the next year signals its day-to-day expenses will rise. On top of that, its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders.

BankUnited’s P/B ratio based on the next 12 months is 1.1x. This valuation tells us a lot of optimism is priced in - we think other companies feature superior fundamentals at the moment.

Wall Street analysts have a consensus one-year price target of $48.09 on the company (compared to the current share price of $46.29).