BankUnited, Inc.’s ( BKU Quick Quote BKU - Free Report) third-quarter 2021 earnings per share of 94 cents surpassed the Zacks Consensus Estimate of 88 cents. The bottom line jumped 34.3% from the prior-year quarter. Results primarily gained from higher net interest income (NII) and provision benefits. The loans and deposit balances remained strong in the quarter. However, a rise in expenses and lower fee income were the undermining factors. Probably due to these negatives, shares of the company lost 2.9% following the release. Net income was $86.9 million, up 30.5% year over year. Revenues Down, Expenses Rise
Net revenues were $220.6 million, down 1.4% year over year. The top line, also, lagged the Zacks Consensus Estimate of $235 million.
NII totaled $195.1 million, up 4.1%. The improvement was driven by a fall in interest expenses. Net interest margin rose 1 basis point (bps) year over year to 2.33%. Non-interest income was $25.5 million, plunging 29.8%. The decline was due to a fall in all components except for deposit service charges and fees. Non-interest expenses were up 8.7% to $118 million. This mainly resulted from a rise in technology and telecommunications expenses, employee compensation and benefits costs, depreciation of operating lease equipment-related costs, and other non-interest expenses. As of Sep 30, 2021, net loans were $22.6 billion, down from $23.6 billion recorded as of Dec 31, 2020. Total deposits amounted to $28.1 billion, up from $27.5 billion recorded on Dec 31, 2020. Credit Quality: A Mixed Bag
In the reported quarter, the company recorded a recovery of credit losses worth $11.8 million against provisions of $29.2 million in the prior-year quarter. As of Sep 30, 2021, the ratio of net charge-offs to average loans was 0.19%, down from 0.26% as of Dec 31, 2020.
However, the ratio of non-performing loans to total loans was 1.21%, up from 1.02% as of Dec 31, 2020. Capital Ratios Improve
As of Sep 30, 2021, Tier 1 leverage ratio was 8.6% on par with the Dec 31, 2020 level. Common Equity Tier 1 risk-based capital ratio was 13.4%, up from 12.6% recorded as of Dec 31, 2020. Total risk-based capital ratio was 15.3%, up from 14.7%.
Share Repurchase Update
During the quarter, BankUnited repurchased almost 3.2 million shares for $129.4 million.
Further, on Oct 20, 2021, BankUnited 's board of directors authorized the repurchase of up to an additional $150 million in shares. This is in addition to $58.3 million remaining as of Sep 30, 2021 under the prior authorization. Our View
BankUnited’s efforts to strengthen fee income sources and a strong balance-sheet position are expected to keep supporting it in the days to come. However, lower interest rates and higher expenses remain major concerns.
Currently, BankUnited carries a Zacks Rank #3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Performance of Other Banks Hancock Whitney Corporation’s ( HWC Quick Quote HWC - Free Report) third-quarter 2021 adjusted earnings of $1.45 per share outpaced the Zacks Consensus Estimate of $1.29. The bottom line improved 61.1% from the prior-year quarter. Commerce Bancshares Inc.’s ( CBSH Quick Quote CBSH - Free Report) third-quarter 2021 earnings per share of $1.05 surpassed the Zacks Consensus Estimate of $1.00. The bottom line, however, declined almost 1% from the prior-year quarter. Zions Bancorporation’s ( ZION Quick Quote ZION - Free Report) third-quarter 2021 net earnings per share of $1.45 surpassed the Zacks Consensus Estimate of $1.38. The bottom line represents an increase of 43.6% from the year-ago quarter’s number.