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BankUnited, Inc. (BKU) Down 10.8% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for BankUnited, Inc. (BKU - Free Report) . Shares have lost about 10.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is BankUnited, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
BankUnited’s first-quarter 2023 earnings per share of 70 cents missed the Zacks Consensus Estimate of 93 cents. The bottom line also declined 11.4% from the prior-year quarter. We had projected earnings per share of 97 cents.
Results were adversely impacted by an increase in operating expenses, lower deposits and high provisions for credit losses. However, higher net interest income, non-interest income and increasing rates acted as tailwinds.
Net income was $52.9 million, plunging 21.2% year over year. Our estimate for the metric was $73.4 million.
Revenues & Expenses Increase
Net revenues were $244.4 million, growing 9.6% year over year. The top line missed the Zacks Consensus Estimate of $264.7 million. Our estimate for net revenues was $263.3 million.
NII was $227.9 million, increasing 9.2%. The improvement was driven by higher interest income. NIM rose 12 basis points (bps) year over year to 2.62%. Our estimates for NII and NIM were $238.4 million and 2.80%, respectively.
Non-interest income of $16.5 million was up 15.6%. The increase was mainly due to a rise in other non-interest income. Our estimate for non-interest income was $24.9 million.
Non-interest expenses grew 20.9% to $152.8 million. The increase was mainly due to the rise in deposit insurance expenses, employee compensation and benefits costs, technology expenses and other non-interest expenses. Our estimate for non-interest expenses was $149.7 million.
As of Mar 31, 2023, net loans were $24.7 billion, relatively stable from the prior quarter. Total deposits amounted to $25.7 billion, down 6.5% from the end of December 2022.
Credit Quality: A Mixed Bag
In the reported quarter, the company recorded a provision of credit losses worth $19.8 million, up significantly from $7.8 million in the prior-year quarter. Our estimate for the metric was $20.2 million.
As of Mar 31, 2023, the ratio of net charge-offs to average loans was 0.08%, down 14 bps from Dec 31, 2022 level.
Capital & Profitability Ratios Deteriorate
As of Mar 31, 2023, Tier 1 leverage ratio was 7.4%, down from 7.5% as of Dec 31, 2022. Common Equity Tier 1 risk-based capital ratio was 10.8%, down from 11%. The total risk-based capital ratio was 12.6%, down from 12.7% in the prior-year period.
At the end of the first quarter, the return on average assets was 0.58%, down from 0.76% in the year-earlier quarter. Return on average stockholders’ equity was 8.5%, down from 9%.
Share Repurchase Update
In the reported quarter, BankUnited repurchased 1.6 million shares for $55 million at an average price of $33.41 per share.
2023 Outlook
Management expects loan growth to be somewhat flat.
Management expects NIM in the 250s.
Management expects non-interest expenses to rise in the higher end of the mid-to-high single digits.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, BankUnited, Inc. has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise BankUnited, Inc. has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
BankUnited, Inc. belongs to the Zacks Banks - Major Regional industry. Another stock from the same industry, JPMorgan Chase & Co. (JPM - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
JPMorgan Chase & Co. reported revenues of $38.35 billion in the last reported quarter, representing a year-over-year change of +24.9%. EPS of $4.10 for the same period compares with $2.63 a year ago.
For the current quarter, JPMorgan Chase & Co. is expected to post earnings of $3.56 per share, indicating a change of +29% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.9% over the last 30 days.
JPMorgan Chase & Co. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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BankUnited, Inc. (BKU) Down 10.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for BankUnited, Inc. (BKU - Free Report) . Shares have lost about 10.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is BankUnited, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
BankUnited Q1 Earnings Lag, Revenues & Expenses Rise Y/Y
BankUnited’s first-quarter 2023 earnings per share of 70 cents missed the Zacks Consensus Estimate of 93 cents. The bottom line also declined 11.4% from the prior-year quarter. We had projected earnings per share of 97 cents.
Results were adversely impacted by an increase in operating expenses, lower deposits and high provisions for credit losses. However, higher net interest income, non-interest income and increasing rates acted as tailwinds.
Net income was $52.9 million, plunging 21.2% year over year. Our estimate for the metric was $73.4 million.
Revenues & Expenses Increase
Net revenues were $244.4 million, growing 9.6% year over year. The top line missed the Zacks Consensus Estimate of $264.7 million. Our estimate for net revenues was $263.3 million.
NII was $227.9 million, increasing 9.2%. The improvement was driven by higher interest income. NIM rose 12 basis points (bps) year over year to 2.62%. Our estimates for NII and NIM were $238.4 million and 2.80%, respectively.
Non-interest income of $16.5 million was up 15.6%. The increase was mainly due to a rise in other non-interest income. Our estimate for non-interest income was $24.9 million.
Non-interest expenses grew 20.9% to $152.8 million. The increase was mainly due to the rise in deposit insurance expenses, employee compensation and benefits costs, technology expenses and other non-interest expenses. Our estimate for non-interest expenses was $149.7 million.
As of Mar 31, 2023, net loans were $24.7 billion, relatively stable from the prior quarter. Total deposits amounted to $25.7 billion, down 6.5% from the end of December 2022.
Credit Quality: A Mixed Bag
In the reported quarter, the company recorded a provision of credit losses worth $19.8 million, up significantly from $7.8 million in the prior-year quarter. Our estimate for the metric was $20.2 million.
As of Mar 31, 2023, the ratio of net charge-offs to average loans was 0.08%, down 14 bps from Dec 31, 2022 level.
Capital & Profitability Ratios Deteriorate
As of Mar 31, 2023, Tier 1 leverage ratio was 7.4%, down from 7.5% as of Dec 31, 2022. Common Equity Tier 1 risk-based capital ratio was 10.8%, down from 11%. The total risk-based capital ratio was 12.6%, down from 12.7% in the prior-year period.
At the end of the first quarter, the return on average assets was 0.58%, down from 0.76% in the year-earlier quarter. Return on average stockholders’ equity was 8.5%, down from 9%.
Share Repurchase Update
In the reported quarter, BankUnited repurchased 1.6 million shares for $55 million at an average price of $33.41 per share.
2023 Outlook
Management expects loan growth to be somewhat flat.
Management expects NIM in the 250s.
Management expects non-interest expenses to rise in the higher end of the mid-to-high single digits.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, BankUnited, Inc. has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise BankUnited, Inc. has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
BankUnited, Inc. belongs to the Zacks Banks - Major Regional industry. Another stock from the same industry, JPMorgan Chase & Co. (JPM - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
JPMorgan Chase & Co. reported revenues of $38.35 billion in the last reported quarter, representing a year-over-year change of +24.9%. EPS of $4.10 for the same period compares with $2.63 a year ago.
For the current quarter, JPMorgan Chase & Co. is expected to post earnings of $3.56 per share, indicating a change of +29% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.9% over the last 30 days.
JPMorgan Chase & Co. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.