KBRA Affirms Ratings for BankUnited, Inc.

KBRA affirms the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, and the short-term debt rating of K2 for Miami Lakes, FL-based BankUnited, Inc. (NYSE: BKU) ("BankUnited" or "the company"). In addition, KBRA affirms the deposit and senior unsecured ratings of A-, the subordinated debt rating of BBB+, and the short-term deposit and debt ratings of K2 for the bank subsidiary, BankUnited, National Association. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

The ratings and Stable Outlook reflect BKU’s sound overall financial profile, supported by an improved funding mix, appropriate credit quality, and solid capital levels, balanced against profitability and revenue diversification that remain below rated peers. Earnings performance has shown modest improvement, with 1H26 ROA of 0.75% essentially consistent with FY25 and improving to 0.81% in 2Q26. Operating trends have strengthened, with NIM, which remains the principal earnings driver given BKU’s limited fee income contribution, expanding to approximately 3.0% in 1H26. Further balance sheet repositioning and favorable funding-mix changes along with ongoing asset repricing should support additional NIM expansion, although competitive loan pricing and modest balance sheet growth remain constraints. Fee generation has also improved, though revenue diversification remains below rated peers.

The company’s funding profile has improved substantially, supported by strong organic core deposit generation and a favorable shift toward lower-cost commercial and noninterest-bearing (NIB) balances. Average NIB deposits increased 13% YoY through 2Q26, with particularly strong contributions from the National Title Solutions and HOA verticals. As a result, NIB balances represented 34% of total deposits, while higher-cost brokered deposits declined to approximately 11%. While BKU’s commercial orientation contributes to a comparatively elevated uninsured deposit base and historically greater use of wholesale funding, these risks are mitigated by considerable available liquidity and an improved loan-to-core deposit ratio of 95% at 2Q26.

Credit quality remains appropriate for the ratings, with performance improving through 1H26. NPAs declined to 0.83% of loans from 1.4% at YE25, while criticized and classified loans remained manageable at approximately 4.4% of loans. NCOs increased to 0.61% in 1Q26, largely reflecting two unrelated C&I credits, before declining to 0.11% in 2Q26. Moreover, BKU’s investor CRE concentration remains below peers, and the company has materially reduced certain legacy risk concentrations, including its exposure to New York rent-regulated multifamily loans.

BKU continues to manage core capital with a conservative bias, with CET1 tracking in the low-12% range while continuing to return a meaningful portion of earnings to shareholders through dividends and share repurchases. Combined with reserves of 0.91% of loans, total loss-absorbing capacity remains broadly consistent with peers, and KBRA expects BKU to maintain capital levels commensurate with the rating category.

Rating Sensitivities

Continued core funding improvements, alongside further fee revenue diversification, and consistent operating performance in line with higher rated peers would be viewed positively. Conversely, unexpected asset quality deterioration and / or more aggressive financial management could negatively impact ratings.

To access ratings and relevant documents, click here.

Methodology