BKU - Downgrading BankUnited After A Fantastic Run Higher

2024-04-05 07:33:25 ET

Summary

• BankUnited's stock has outperformed the S&P 500 since June 2023, but there are concerns about the institution's financial performance.
• The bank's net interest income has fallen for three consecutive years, and total interest-bearing liabilities have risen.
• Non-interest income has increased, but net profits have declined, and the value of deposits, loans, and securities on the balance sheet has decreased.

Back in June of 2023, I was on the hunt for different financial institutions. The banking crisis that began in March of that year created a number of interesting opportunities. And one of the firms that I ended up coming across was BankUnited ( BKU ), a fairly small bank with a market capitalization today of $2.01 billion. Just like many other players in the space, the business had experienced rather significant downside because of concerns over the sector. This, combined with how cheap shares were, led me to rate the business a 'buy' to reflect my view that the stock would likely outperform the broader market for the foreseeable future....

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