If you're worried about the fate of real estate (and real estate lending) and/or more exotic residential mortgages, you're probably not going to be a fan of Florida's BankUnited (NASDAQ:BKUNA). On the other hand, if these fears prove to be unfounded or overblown, this could be an interesting independent growth play on one of the hottest markets in regional banking.

BankUnited is principally a mortgage-focused bank centered on South Florida. What makes it a bit different, though, is that the company focuses extensively on more exotic types of mortgages, namely the option ARM. These mortgages are so named because the interest rate adjusts (the "ARM" part) and the borrower has various payment options, including options like paying only the interest on the loan for a time.

This quarter, the company's fiscal third, showed ongoing strong growth. Net interest income jumped 72% from last year (and was up 12% sequentially), while non-interest income came close to tripling. Turning to the net interest margin, two things are very noteworthy. First, BankUnited showed significant growth as the margin moved from 1.66% to 2.18%, and that makes the company rare in showing such dramatic growth. The second notable part, though, is how low that margin is in absolute terms -- far below banks like Wells Fargo (NYSE:WFC) or Union Bankshares (AMEX:UNB), which are two of the top performers in that regard.

The company also showed dramatic balance sheet growth -- average loan balances rose 43% and deposits jumped 38%. Credit quality is a bit more confounding to me. Measures like non-performing loans and chargeoffs look great, and that's not my concern. No, my concern, rather, is that the company seems to have a rather low level of reserves, particularly given the riskier nature of its mortgages. Should regulatory bodies decide that these mortgages demand higher reserves (something that has been mentioned before), that would be a negative development for BankUnited.

There's a lot to like about BankUnited. It focuses on attractive niches within its market, and that lets it compete more effectively with larger rivals like Bank of America (NYSE:BAC), Wachovia (NYSE:WB), Regions (NYSE:RF), and so on. What's more, because of the way that ARM repricing lags in a rising interest rate environment, net interest margins could really jump if and when the Fed stops hiking rates.

This is not your run-of-the-mill bank. There's above-average growth here, but also above-average risk. I personally think the stock is undervalued, but Fools should make sure they're comfortable with the tradeoffs here before plunking down their own cash.

For more bankable Foolishness:

Bank of America is a Motley Fool Income Investor recommendation. Click here for a free 30-day trial to the newsletter.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).