BankUnited, Inc .’s ( BKU Quick Quote BKU - Free Report) fourth-quarter 2021 earnings per share of $1.41 surpassed the Zacks Consensus Estimate of $1.14. The bottom line also jumped 58.4% from the prior-year quarter. Results primarily benefited from higher revenues and rise in loans and deposit balances. However, a rise in expenses and poor credit quality were the undermining factors. Probably due to these concerns, shares of the company tanked 6.5% following the release. Net income was $125.3 million, up 46.1% year over year. In 2021, earnings of $4.52 per share beat the consensus estimate of $4.26 and were up substantially from $2.06 in 2020. Also, net income of $414.9 million was substantially up from $197.9 million in 2020. Revenues & Expenses Rise
Net revenues were $251.6 million, up 10% year over year. The top line beat the Zacks Consensus Estimate of $229.2 million.
In 2021, net revenues increased 5.1% to $929.8 million. The top line surpassed the consensus estimate of $910.5 million. Net interest income totaled $206 million, up 6.5%. The improvement was driven by a fall in interest expenses. Net interest margin rose 11 basis points (bps) year over year to 2.44%. Non-interest income was $45.6 million, increasing 29.3%. The increase was due to a rise in all components, except for gain on investment securities and other incomes. Non-interest expenses surged 52.3% to $187.9 million. The rise was mainly due to discontinuance of cash flow hedges. As of Dec 31, 2021, net loans were $23.63 billion, up from $23.61 billion recorded as of Dec 31, 2020. Total deposits amounted to $29.4 billion, up from $27.5 billion recorded on Dec 31, 2020. Credit Quality Worsens
In the reported quarter, the company recorded a provision of credit losses worth $0.2 million against recovery of $1.6 million in the prior-year quarter. As of Dec 31, 2021, the ratio of net charge-offs to average loans was 0.29%, up 3 bps year over year.
Ratio of non-performing loans to total loans was 0.87%, down 15 bps from the prior-year quarter. Capital Ratios Deteriorates
As of Dec 31, 2021, Tier 1 leverage ratio was 8.4%, down from 8.6% as of Dec 31, 2020. Common Equity Tier 1 risk-based capital ratio was 12.6%, at par with the prior-year period level. Total risk-based capital ratio was 14.3%, down from 14.7%.
Share Repurchase Update
During the quarter, BankUnited repurchased almost 4.4 million shares for $181.8 million, at an average price of $41.45 per share.
BankUnited’s efforts to strengthen fee income sources and a strong balance-sheet position are expected to keep supporting financials in the days to come. However, higher expenses and poor credit quality remain major concerns.
Currently, BankUnited carries a Zacks Rank #2 (Buy). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Earnings Release Schedule of Other Banks Zions Bancorporation ( ZION Quick Quote ZION - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 24. Over the past 30 days, the Zacks Consensus Estimate for Zions Bancorporation’s quarterly earnings has remained unchanged at $1.33. This implies a 19.9% decrease from the prior-year quarter. Prosperity Bancshares ( PB Quick Quote PB - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 26. Over the past 30 days, the Zacks Consensus Estimate for Prosperity Bancshares’ quarterly earnings has remained unchanged at $1.37. This suggests a 7.4% decrease from the prior-year quarter. East West Bancorp, Inc . ( EWBC Quick Quote EWBC - Free Report) is slated to report fourth-quarter and full-year 2021 results on Jan 27. Over the past 30 days, the Zacks Consensus Estimate for East West Bancorp’s quarterly earnings has remained unchanged at $1.55. This indicates a 34.8% increase from the prior-year quarter.