On Oct 9, 2013, we lowered our long-term recommendation on
) to Neutral from Outperform. This was based on the company's
increased expenses. Nevertheless, the company is well positioned
to grow both organically and inorganically based on its healthy
Why Downgraded to Neutral?
A rise in expenses remains a major cause of concern for
BankUnited. Moreover, management expects certain operating
expenses to increase further in the subsequent quarters owing to
the company's recent expansion plans. Additionally, as the
interest rate environment is not expected to improve in the near
future, we anticipate BankUnited to experience significant margin
pressure in the near-to-mid term.
BankUnited is scheduled to announce third-quarter results on Oct
for the company is 0.00%. This, along with its Zacks Rank #3
(Hold), makes us less confident of a positive earnings surprise.
The company's second-quarter 2013 earnings substantially
surpassed the Zacks Consensus Estimate.
BankUnited is an attractive pick for yield-seeking investors.
Moreover, given the company's strong capital and balance sheet
levels, it is well positioned to expand organically as well as
through acquisitions. Further, BankUnited's robust capital
deployment plans and increasing emphasis on the commercial loan
portfolio will prove accretive to its overall growth going
Other Stocks Worth Considering
Some better-performing finance stocks that are worth a look
Tower Financial Corporation
Lakeland Financial Corp.
Park National Corp.
). While Tower Financial carries a Zacks Rank #1 (Strong Buy),
both Lakeland Financial and Park National have a Zacks Rank #2
BANKUNITED INC (BKU): Free Stock Analysis
LAKELAND FINL (LKFN): Free Stock Analysis
PARK NATIONAL (PRK): Free Stock Analysis
TOWER FINANCIAL (TOFC): Free Stock Analysis
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