BankUnited (BKU) closed out FY 2025 with fourth quarter revenue of US$262.6 million and basic EPS of US$0.91, while trailing twelve month revenue came in at just over US$1.0 billion with EPS of US$3.55 and net income of US$268.4 million. Over the past year, revenue has moved from US$958.3 million to US$1,025.3 million on a trailing twelve month basis, with EPS rising from US$3.10 to US$3.55 as net income climbed from US$228.4 million to US$268.4 million, signalling firmer profitability and wider margins that frame how investors may read the latest results.

See our full analysis for BankUnited.

With the numbers on the table, the next step is to see how this margin story lines up against the widely shared narratives around growth, risk and profitability that follow the stock.

26.2% net margin and what it says about profit quality

• Over the last year, BankUnited converted revenue of about US$1.0b into net income of US$268.4 million, which works out to a 26.2% net profit margin compared with 23.8% a year earlier.
• What stands out for a bullish view is that earnings grew 17.5% over the past year even though the five year trend shows a 9.2% annual decline, which creates a tension between:
  • Recent data, where trailing twelve month EPS reached US$3.55 and net margin sits at 26.2%, pointing to stronger current profitability than the longer term average.
  • The longer record, which shows earnings shrinking at 9.2% per year over five years, so anyone optimistic on the latest margin level is leaning heavily on the idea that this recent 17.5% earnings growth is sustainable.

To see how this profit profile fits into a broader, balanced story around long term growth and risk, check the full narrative that pulls these numbers together. 📊 Read the full BankUnited Consensus Narrative.

Net interest margin edges up to 3%

• Within FY 2025, net interest margin was 2.81% in Q1 and 3% in Q3, while trailing twelve month net margin across the year sat at 26.2%. Together, these give you two different margin lenses on how the core lending business and overall profitability relate to each other.
• Critics highlight that earnings are forecast to grow 4.9% per year and revenue 8.7% per year, both below broader US market forecasts of 16.1% and 10.5%. Those cautious views intersect with:
  • The fact that net interest margin in the provided quarters ranges from 2.73% in late 2024 to 3% in 2025, which shows only a modest change alongside that 17.5% earnings growth.
  • Non performing loans of US$379.4 million on one of the recent trailing twelve month snapshots and a low 58% allowance for bad loans, figures that skeptics may focus on when they question how durable that 26.2% net margin really is.

Valuation, P/E of 14.1x and DCF fair value gap

• BankUnited trades on a trailing P/E of 14.1x at a share price of US$50.35, which is higher than the US Banks industry average of 11.8x, below the peers’ 17x average, and below a DCF fair value estimate of roughly US$69.71 alongside a 2.46% dividend yield.
• What is interesting for more upbeat investors is the mix of signals that heavily supports a bullish angle while still leaving room for pushback:
  • On the supportive side, the current P/E of 14.1x and price of US$50.35 sit below the DCF fair value of about US$69.71. That discount appears alongside a 26.2% net margin and trailing twelve month EPS of US$3.55.
  • On the sceptical side, forecasts for 4.9% yearly earnings growth and 8.7% yearly revenue growth, both below market levels, plus the low 58% allowance for bad loans, show why some investors might question how much weight to give that DCF fair value gap.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on BankUnited's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

While BankUnited reports a 26.2% net margin, some investors may still worry about the low 58% allowance for bad loans and non performing exposures.

If that credit risk leaves you uneasy, use our CTA_SCREENER_SOLID_BALANCE_SHEET to focus on companies with stronger cushions, cleaner balance sheets and potentially fewer unpleasant surprises.

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.