Markets
CMA

BankUnited Shares Gain 2% on Q4 Earnings & Revenue Beat

Shares of BankUnited, Inc.BKU gained 2.2% after the company delivered a positive earnings surprise of 8.3% in fourth-quarter 2015. Earnings per share of 52 cents topped the Zacks Consensus Estimate of 48 cents. Moreover, the bottom line exceeded the year-ago quarter figure by 15.6%.

Bankunited Inc. (BKU) EPS BNRI & Surprise Percent - Last 5 Quarters | FindTheCompany

Results exhibited solid revenue growth, partly offset by escalating expenses. Further, while growth in loans and deposits continued to be strong, a notable fall in provisions acted as a tailwind.

For 2015, adjusted earnings per share came in at $1.90, in line with the Zacks Consensus Estimate. However, the figure compared unfavorably with earnings of $1.95 recorded in 2014.

Net income for the quarter surged 20.1% year over year to $56.3 million. For 2015, net income was $251.7 million, up 23.2% year over year.

Performance in Detail

Total revenue in the reported quarter jumped nearly 22% year over year to $232.2 million. Moreover, it surpassed the Zacks Consensus Estimate of $221.2 million.

In 2015, total revenue was $847.9 million, up 11.4% year over year, and beating the Zacks Consensus Estimate of $816 million by a considerable margin.

Net interest income for the quarter increased 18.4% year over year to $203 million. However, net interest margin declined 32 basis points (bps) year over year to 3.94%.

Non-interest income rose 53.6% year over year to $29.3 million. Notably, the company recorded a $10.9-million gain on sale of loans in the reported quarter compared with a loss of $2.1 million incurred in the year-ago quarter. Further, all other components, excluding FDIC reimbursements, exhibited year-over-year increases.

Non-interest expenses rose 26.1% year over year to $136.8 million. The rise was primarily led by an increase in all components, except telecommunications and data-processing costs.

As of Dec 31, 2015, net loans summed $16.5 billion, up from $12.3 billion as of Dec 31, 2014. Further, total deposits amounted to $16.9 billion, up from $13.5 billion as of Dec 31, 2014.

Asset Quality

Asset quality represented a mixed bag. The ratio of total nonperforming loans to total loans increased 6 bps year over year to 0.37% as of Dec 31, 2015.

Net charge-offs to average loans, however, came in at 0.09%, down 6 bps from 0.15% as of Dec 31, 2014. Moreover, provision for loan losses declined 51.6% year over year to $9.9 million.

Profitability and Capital Ratios

BankUnited's capital ratios continued to deteriorate. As of Dec 31, 2014, Tier 1 leverage ratio stood at 9.3%, down from 10.7% as of Dec 31, 2014. Tier 1 risk-based capital ratio came in at 12.6% versus 15.5% as of Dec 31, 2014. Total risk-based capital ratio came in at 13.4% as against 16.3% as of Dec 31, 2014.

Profitability ratios represented a mixed bag during the quarter. While the return on average assets fell 5 bps year over year to 0.97% as of Dec 31, 2015; return on average stockholder equity was 9.94%, up from 9.00% as of Dec 31, 2014.

Our Viewpoint

BankUnited has potential for growth, indicated by its healthy liquidity levels as well as a sturdy balance sheet. While the company's steady capital deployment activities remain impressive, we believe its increasing emphasis on commercial loan portfolio will prove beneficial, going forward.

Nonetheless, persistent margin compression led by a prevalent low interest rate environment, weak cost management and exposure to risky residential loans are anticipated to exert pressure on the company's financials in the near term.

BankUnited currently carries a Zacks Rank #3 (Hold).

Performance of Other Major Banks

Among other major regional banks, Comerica Incorporated's CMA fourth-quarter earnings per share of 71 cents surpassed the Zacks Consensus Estimate by 3%, driven by solid revenues. Additionally, U.S. Bancorp USB reported fourth-quarter 2015 earnings per share of 79 cents, which came in line with the Zacks Consensus Estimate and stood flat year over year.

KeyCorp.'s KEY fourth-quarter 2015 adjusted earnings from continuing operations of 28 cents per share came in line with the Zacks Consensus Estimate. However, the figure compared unfavorably with the year-ago adjusted figure of 29 cents.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

COMERICA INC (CMA): Free Stock Analysis Report

US BANCORP (USB): Free Stock Analysis Report

KEYCORP NEW (KEY): Free Stock Analysis Report

BANKUNITED INC (BKU): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CMA USB KEY BKU

Other Topics

Earnings Stocks

Latest Markets Videos