BankUnited: Low Reserves Limit Upside

BankUnited is maintained at 'Hold,' reflecting cautious optimism amid strong deposit growth but concerns over reserve adequacy. BKU's core deposit growth and declining deposit costs support net interest margin, but sequential NIM compression in Q1 was greater than expected. Commercial real estate and non-depository financial institution exposures are manageable, with diversified CRE and low NDFI risk relative to peers.