Can BankUnited’s (BKU) Rising Earnings Outpace Its Growing Credit Losses?

• BankUnited, Inc. announced its third quarter 2025 results, reporting net interest income of US$250.11 million and net income of US$71.85 million, both increasing from the same period a year earlier; however, net charge-offs also rose to US$14.70 million from US$6.54 million last year.
• While earnings and interest income showed year-over-year growth, analysts noted that BankUnited’s net interest income growth and margin are below peers, with higher credit losses raising concerns about future profitability.
• We’ll now explore how the bank’s earnings improvement, alongside rising credit losses, may influence BankUnited’s investment narrative going forward.

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BankUnited Investment Narrative Recap

To be a shareholder in BankUnited, you need confidence in the ability of a regional bank to compound growth through sustained net deposit gains, expansion into high-growth markets, and diversification beyond net interest income, all while carefully managing credit risks in its commercial real estate portfolio. The most important short-term catalyst remains ongoing deposit and loan book growth, but this quarter’s earnings do not materially alter that narrative; instead, the latest news sharpens focus on credit quality as the primary risk.

Among recent announcements, the opening of a new corporate banking office in Morristown, New Jersey in May 2025 stands out. This move aligns with the bank’s catalyst of geographic expansion to capture business from growing regions, which could bolster deposit and loan growth, provided credit quality remains stable amid CRE headwinds. Contrast that with rising charge-offs in the commercial real estate portfolio, and investors should be aware that ...

Read the full narrative on BankUnited (it's free!)

BankUnited's narrative projects $1.3 billion revenue and $291.8 million earnings by 2028. This requires 8.9% yearly revenue growth and a $38.3 million earnings increase from $253.5 million.

Uncover how BankUnited's forecasts yield a $42.02 fair value, a 6% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community provided 1 fair value estimate for BankUnited at US$42.02, showing limited variation. At the same time, persistently rising credit losses raise ongoing questions about earnings durability in regions with concentrated CRE exposure.

Explore another fair value estimate on BankUnited - why the stock might be worth just $42.02!

Build Your Own BankUnited Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your BankUnited research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free BankUnited research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate BankUnited's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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