BankUnited Inc. once seemed intent to grow on its own. Never mind that; after a brief flirtation with selling itself, the company's main job will be assuring key constituents that it's simply going to stick around.

BankUnited said late Wednesday that its board had evaluated "strategic alternatives" before deciding to focus on organic growth. The disclosure has some industry observers wondering if Florida's second-biggest bank can revert to a message of loyalty to employees and customers.

"Who would want to go and work for them now?" says Rod Taylor, the president of Taylor & Co., an executive recruitment firm in Atlanta.

BankUnited's moves shocked some outsiders after management had spent nearly three years rebuilding the failed thrift's brand. After a private-equity takeover in May 2009, BankUnited aggressively pursued commercial loans, luring loan officers and business from others.

John Kanas, BankUnited's chairman and chief executive, said in an interview that his team has fully explained to their employees the board's reasoning for doing what he calls a "price check."

"Obviously we thought about the possibility of reputational risk when we agreed to the search," Kanas said. "We still went for this process and determined that it was something we could live with."

Kanas declined to discuss any offers or what the board hoped to receive.

It seems as though the price check turned into a reality check for the company. Several published reports said that BankUnited's private shareholders wanted more than $30 a share, or more than double the company's tangible book value.

"They're not going to get what they hoped for," says Taylor, adding that it is unlikely that BankUnited would fetch more than book value in the current environment.

"When we go into a bank, we see a FDIC sticker, but when we go into a PE bank, there's another sticker we don't see and that's a 'for sale' sign," says Ken Thomas, a bank consultant and economist. "PE is about turning troubled shops around, getting the best return for shareholders and getting out at the opportune time."

Some observers say that higher regulatory costs may have convinced BankUnited to shop itself. BankUnited is in a tough place; it is barely big enough to trigger a $10 billion-asset threshold for new bank regulations involving interchange fees and stress testing. Such changes could make it more difficult to convince investors that the path forward involves independence.

Kanas, who had proudly run a low-cost operation while he was chairman and CEO of North Fork Bancorp in Melville, N.Y., has had a different experience in his second act. BankUnited has 105 people working in compliance, compared to 27 at North Fork, which had more than $50 billion in assets when it was sold to Capital One Financial Corp. in 2006.

An attendee at a private investor conference last fall said he was surprised by Kanas' negativity when participating on a panel. "I got the impression from hearing him speak that here's a guy who's at his wits' end, and he realized he couldn't do at BankUnited what he was hoping to do," said the attendee, who asked not to be named. "There are not too many bankers who are luckier or smarter than John Kanas. I expected him to have a less negative outlook, but he was the most negative person in the room."

Still, BankUnited has added commercial loans, made money and completed the largest initial public offering in U.S. banking. But it has only announced one acquisition since last year's IPO.

Kanas said Thursday that he expects to complete the purchase of Herald National Bank in New York by next month. But the going is more difficult in Florida, where the bank plans to open 10 branches this year in the state.

"It looks to me like Kanas has been calf-roped," Taylor says. "You can't grow any more without becoming less profitable. … You've either got to cut costs, increase revenue or change the model, and I don't think he can see his way through profitability or appreciation in the stock in doing one of the three or all three."

Some observers say part of the struggle for BankUnited to complete deals could be coming from the regulatory skepticism that still surrounds private equity.

"This speaks volumes to why the FDIC is very leery of PE," said the unnamed conference attendee. "BankUnited on some level is probably very embarrassing for the regulators" since it was a situation "where PE got maybe too good of a deal."

Despite the rollercoaster week, some observers says employees and customers will have no choice but to stick with BankUnited.

"What other options do they have?" says Jon Winick, president of Clark Street Capital. "As for employees, if they want to work for a strong Florida bank their options are limited."

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