Regional banking company BankUnited (NYSE: BKU) missed Wall Street’s revenue expectations in Q3 CY2025, but sales rose 7.3% year on year to $275.7 million. Its GAAP profit of $0.95 per share was 8.9% above analysts’ consensus estimates.
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BankUnited (BKU) Q3 CY2025 Highlights:
- Net Interest Income: $250.1 million vs analyst estimates of $255.8 million (6.8% year-on-year growth, 2.2% miss)
- Net Interest Margin: 3% vs analyst estimates of 3% (in line)
- Revenue: $275.7 million vs analyst estimates of $279.4 million (7.3% year-on-year growth, 1.3% miss)
- Efficiency Ratio: 60.3% vs analyst estimates of 60.1% (19.9 basis point miss)
- EPS (GAAP): $0.95 vs analyst estimates of $0.87 (8.9% beat)
- Tangible Book Value per Share: $39.27 vs analyst estimates of $38.97 (7.5% year-on-year growth, 0.8% beat)
- Market Capitalization: $2.77 billion
"We continued to deliver on improved profitability this quarter, with gains in EPS, ROA and ROE. We achieved our near-term target of a 3% margin as well." said Rajinder Singh, Chairman, President and Chief Executive Officer.
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.
Sales Growth
Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Unfortunately, BankUnited’s 4% annualized revenue growth over the last five years was mediocre. This fell short of our benchmark for the banking sector and is a rough starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. BankUnited’s recent performance shows its demand has slowed as its annualized revenue growth of 2.4% over the last two years was below its five-year trend. 
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’s revenue grew by 7.3% year on year to $275.7 million, missing Wall Street’s estimates.
Net interest income made up 88.8% of the company’s total revenue during the last five years, meaning BankUnited barely relies on non-interest income to drive its overall growth.
Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. 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 5.4% annual clip over the last five years. TBVPS growth has accelerated recently, growing by 9.3% annually over the last two years from $32.88 to $39.27 per share.
Over the next 12 months, Consensus estimates call for BankUnited’s TBVPS to grow by 7% to $42.01, mediocre growth rate.
Key Takeaways from BankUnited’s Q3 Results
It was good to see BankUnited beat analysts’ EPS expectations this quarter. We were also happy its tangible book value per share narrowly outperformed Wall Street’s estimates. On the other hand, its net interest income missed and its revenue fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 1.1% to $36.39 immediately after reporting.
The latest quarter from BankUnited’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
