On Jun 25, 2013, we reaffirmed our long-term recommendation on
) at Neutral. This is based on the company's first-quarter
earnings, which beat the Zacks Consensus Estimate.
BankUnited's first-quarter earnings were slightly ahead of the
Zacks Consensus Estimate. Better-than-expected results were
primarily aided by growth in net interest income and a decline in
operating expenses, partially offset by lower fee income.
Further, though there was deterioration in credit quality, growth
in loan and deposit balances as well as strong capital and
profitability ratios were the tailwinds.
Over the last 60 days, the Zacks Consensus Estimate for 2013 and
2014 has remained stable at $1.71 and $1.67 per share,
respectively. Hence, BankUnited now carries a Zacks Rank #3
Given BankUnited's strong capital and balance sheet position, it
is well poised to expand organically as well as through
acquisitions. The company is enhancing its growth by opening new
branches across its footprints. Additionally, management intends
to foray in the states of New York, New Jersey and Connecticut
this year. Moreover, BankUnited is an attractive choice for
yield-seeking investors. The company has been increasing its
dividend on a yearly basis since it started paying dividends in
However, increased non-interest expenses and a low interest rate
environment remain causes of concern for BankUnited. Management
anticipates compensation costs to remain high with the company's
geographic expansion. Further, with the low rate environment
likely to persist, we expect the company to experience
considerable margin pressures in the near to mid-term.
Other Major Banks Worth Considering
Some better performing banks include
JPMorgan Chase & Co.
The PNC Financial Services Group, Inc.
), all of which carry a Zacks Rank #2 (Buy).
BANKUNITED INC (BKU): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
KEYCORP NEW (KEY): Free Stock Analysis Report
PNC FINL SVC CP (PNC): Free Stock Analysis
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