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BankUnited (BKU) Up 5.1% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for BankUnited, Inc. (BKU - Free Report) . Shares have added about 5.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
BankUnited Beats on Q4 Earnings, Revenue Improve
BankUnited’s fourth-quarter 2016 earnings per share of $0.59 surpassed the Zacks Consensus Estimate of $0.55. Moreover, the bottom line increased 13.5% from the year-ago-quarter.
Better-than-expected results were primarily driven by higher net revenues, partially offset by escalated expenses. The company also witnessed improved loan and deposit balances. Moreover, a fall in provisions acted as a tailwind. However, profitability ratios remained mixed for the quarter.
Net income for the quarter increased 12.4% year over year to $63.3 million.
In 2016, earnings per share of $2.09 outpaced the Zacks Consensus Estimate of $2.03. However, the figure declined 11.1% year over year. Net income came in at $225.7 million, down 10.3% year over year. The prior-year figure includes the impact of certain non-recurring items.
Revenue Growth Offsets Higher Expenses
Total net revenue for the quarter came in at $256.8 million, surpassing the Zacks Consensus Estimate of $254.8 million. Also, the reported figure was up 10.6% year over year.
For 2016, total net revenue came in at $976.8 million, up 15.2% year over year. However, the figure lagged the Zacks Consensus Estimate of $986.2 million.
Net interest income climbed 12.1% year over year to $227.5 million, led by higher interest income, partially offset by an increase in interest expense. However, net interest margin declined 27 basis points year over year to 3.67%.
Non-interest income was $29.3 million, up marginally from the year-ago quarter. The rise was primarily due to higher net income from resolution of covered assets, lease financing, service charges and fees, net gain on investment securities available for sale and lower net loss on FDIC indemnification. These were, however, partially offset by lower net gain on sale of loans and other income.
Non-interest expenses were up 14.2% from the year-ago quarter to $156.2 million due to a rise in all the components, except occupancy and equipment, and other non-interest expense.
Mixed Credit Quality
As of Dec 31, 2016, the ratio of total nonperforming loans to total loans was 0.69%, compared with 0.43% as of Dec 31, 2015. Similarly, net charge-offs to average loans was 0.13%, compared with 0.10% as of Dec 31, 2015.
However, provision for loan losses for the quarter decreased 14.1% year over year to $8.5 million.
Strong Balance Sheet & Capital Ratios
As of Dec 31, 2016, net loans totaled $19.2 billion, compared with $16.5 billion as of Dec 31, 2015. Further, total deposits amounted to $19.5 billion, up from $16.9 billion as of Dec 31, 2015.
As of Dec 31, 2016, Tier 1 leverage ratio was 8.4% while the Tier 1 risk-based capital ratio came in at 11.6%. Further, total risk-based capital ratio was 12.4% as of the same date.
Mixed Profitability Ratios
As of Dec 31, 2016, quarterly return on average assets was 0.92%, down from 0.97% recorded in the prior-year quarter. Also, return on average stockholders’ equity was 10.45%, up from 9.94% as of Dec 31, 2015.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
At this time, BankUnited's stock has a subpar Growth Score of 'D', though it is doing a bit better on the momentum front with a 'C'. Following a similar course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
While estimates have been broadly trending upward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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BankUnited (BKU) Up 5.1% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for BankUnited, Inc. (BKU - Free Report) . Shares have added about 5.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
BankUnited Beats on Q4 Earnings, Revenue Improve
BankUnited’s fourth-quarter 2016 earnings per share of $0.59 surpassed the Zacks Consensus Estimate of $0.55. Moreover, the bottom line increased 13.5% from the year-ago-quarter.
Better-than-expected results were primarily driven by higher net revenues, partially offset by escalated expenses. The company also witnessed improved loan and deposit balances. Moreover, a fall in provisions acted as a tailwind. However, profitability ratios remained mixed for the quarter.
Net income for the quarter increased 12.4% year over year to $63.3 million.
In 2016, earnings per share of $2.09 outpaced the Zacks Consensus Estimate of $2.03. However, the figure declined 11.1% year over year. Net income came in at $225.7 million, down 10.3% year over year. The prior-year figure includes the impact of certain non-recurring items.
Revenue Growth Offsets Higher Expenses
Total net revenue for the quarter came in at $256.8 million, surpassing the Zacks Consensus Estimate of $254.8 million. Also, the reported figure was up 10.6% year over year.
For 2016, total net revenue came in at $976.8 million, up 15.2% year over year. However, the figure lagged the Zacks Consensus Estimate of $986.2 million.
Net interest income climbed 12.1% year over year to $227.5 million, led by higher interest income, partially offset by an increase in interest expense. However, net interest margin declined 27 basis points year over year to 3.67%.
Non-interest income was $29.3 million, up marginally from the year-ago quarter. The rise was primarily due to higher net income from resolution of covered assets, lease financing, service charges and fees, net gain on investment securities available for sale and lower net loss on FDIC indemnification. These were, however, partially offset by lower net gain on sale of loans and other income.
Non-interest expenses were up 14.2% from the year-ago quarter to $156.2 million due to a rise in all the components, except occupancy and equipment, and other non-interest expense.
Mixed Credit Quality
As of Dec 31, 2016, the ratio of total nonperforming loans to total loans was 0.69%, compared with 0.43% as of Dec 31, 2015. Similarly, net charge-offs to average loans was 0.13%, compared with 0.10% as of Dec 31, 2015.
However, provision for loan losses for the quarter decreased 14.1% year over year to $8.5 million.
Strong Balance Sheet & Capital Ratios
As of Dec 31, 2016, net loans totaled $19.2 billion, compared with $16.5 billion as of Dec 31, 2015. Further, total deposits amounted to $19.5 billion, up from $16.9 billion as of Dec 31, 2015.
As of Dec 31, 2016, Tier 1 leverage ratio was 8.4% while the Tier 1 risk-based capital ratio came in at 11.6%. Further, total risk-based capital ratio was 12.4% as of the same date.
Mixed Profitability Ratios
As of Dec 31, 2016, quarterly return on average assets was 0.92%, down from 0.97% recorded in the prior-year quarter. Also, return on average stockholders’ equity was 10.45%, up from 9.94% as of Dec 31, 2015.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
BankUnited, Inc. Price and Consensus
BankUnited, Inc. Price and Consensus | BankUnited, Inc. Quote
VGM Scores
At this time, BankUnited's stock has a subpar Growth Score of 'D', though it is doing a bit better on the momentum front with a 'C'. Following a similar course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
While estimates have been broadly trending upward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.