We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
BankUnited's (BKU) Q4 Earnings & Revenues Beat, Costs Down
Read MoreHide Full Article
BankUnited, Inc. (BKU - Free Report) reported fourth-quarter 2019 earnings per share of 91 cents which surpassed the Zacks Consensus Estimate of 71 cents. Also, the bottom line surged 54.2% year -over year.
Results were aided by a decline in expenses. Also, recovery of loan losses in the quarter benefited the bank. Moreover, the company’s capital and balance sheet position remained strong. However, fall in net interest income was a headwind.
Net income was $89.5 million, significantly up from $52.4 million recorded in the prior-year quarter.
For 2019, earnings of $3.13 per share improved 32.6% from the prior year. Also, it outpaced the consensus estimate of $2.95. Net income dropped 3.6% to $313.1 million.
Revenues Fall & Expenses Decline
Net revenues of $223.1 million beat the consensus estimate of $220.6 million. However, the top line declined 32.1% year over year.
For 2019, net revenues were $900 million, down 23.9%. However, the top line outpaced the Zacks Consensus Estimate of $894.8 million.
Net interest income totaled $185.3 million, decreasing 37.2% year over year. The decline was due to a fall in interest income along with higher interest expenses.
Net interest margin contracted 160 basis points year over year to 2.41%.
Non-interest income was $37.8 million, up 13.3% from the year-ago quarter. The upswing was due to a rise in deposit service charges and fees, and net gain on investment securities.
Non-interest expenses declined 51.8% from the year-ago quarter to $119 million. The decline resulted from a fall in employee compensation and benefits costs, deposit insurance expenses, professional fees and other expenses. Also, decrease in amortization of the FDIC indemnification asset led to lower expenses.
Credit Quality: A Mixed Bag
As of Dec 31, 2019, the ratio of net charge-offs to average loans was 0.05%, down from 0.28% as of Dec 31, 2018. Also, there was a recovery of loan losses of $0.5 million against the provision for loan losses of $12.6 million in the prior-year quarter. However, as of Dec 31, 2019, the ratio of non-performing loans to total loans was 0.88%, up from 0.59%.
Strong Balance Sheet
As of Dec 31, 2019, net loans were $23.1 billion, up from $21.9 billion as of Dec 31, 2018. Total deposits amounted to $24.4 billion, up from $23.5 billion recorded as of Dec 31, 2018.
Capital Position, Profitability Ratios Improve
As of Dec 31, 2019, Tier 1 leverage ratio was 8.9%, down from the prior-year quarter figure of 9.0%. Moreover, Common Equity Tier 1 risk-based capital ratio was 12.3% down from 12.6%. Further, total risk-based capital ratio was 12.8% down from 13.1% as of Dec 31, 2018.
At the end of the fourth quarter, return on average assets was 1.07%, up from 0.66% reported in the prior-year quarter. Additionally, return on average stockholders’ equity was 12.0%, up from 6.9%.
Share Repurchase Update
During the fourth quarter, the company repurchased nearly 0.1 million shares for approximately $4 million.
Our Take
Continued growth in loan and deposit balances, and efforts to strengthen fee income sources are likely support BankUnited’s top line. Also, backed by a strong balance sheet position, the company’s capital deployment activities seem sustainable. However, despite a decline in expenses in the fourth quarter, rise in overall costs over the past few years is likely to hinder bottom-line growth in the near term. Moreover, lower interest rates remain a concern.
BankUnited, Inc. Price, Consensus and EPS Surprise
Washington Federal’s (WAFD - Free Report) first-quarter fiscal 2020 (ended Dec 31) adjusted earnings came in at 58 cents per share, missing the Zacks Consensus Estimate of 60 cents. Results exclude the net positive impact of two significant non-recurring items.
Hancock Whitney Corporation’s (HWC - Free Report) fourth-quarter 2019 adjusted earnings per share of $1.06 beat the Zacks Consensus Estimate of $1.04. However, the bottom line fell 5.4% from the year-ago quarter’s reported figure.
Shares of Ally Financial Inc. (ALLY - Free Report) gained 6.8%, following the release of its fourth-quarter and 2019 results. Quarterly adjusted earnings of 95 cents per share were in line with the Zacks Consensus Estimate. The figure reflects an increase of 3.3% from the year-ago quarter.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
BankUnited's (BKU) Q4 Earnings & Revenues Beat, Costs Down
BankUnited, Inc. (BKU - Free Report) reported fourth-quarter 2019 earnings per share of 91 cents which surpassed the Zacks Consensus Estimate of 71 cents. Also, the bottom line surged 54.2% year -over year.
Results were aided by a decline in expenses. Also, recovery of loan losses in the quarter benefited the bank. Moreover, the company’s capital and balance sheet position remained strong. However, fall in net interest income was a headwind.
Net income was $89.5 million, significantly up from $52.4 million recorded in the prior-year quarter.
For 2019, earnings of $3.13 per share improved 32.6% from the prior year. Also, it outpaced the consensus estimate of $2.95. Net income dropped 3.6% to $313.1 million.
Revenues Fall & Expenses Decline
Net revenues of $223.1 million beat the consensus estimate of $220.6 million. However, the top line declined 32.1% year over year.
For 2019, net revenues were $900 million, down 23.9%. However, the top line outpaced the Zacks Consensus Estimate of $894.8 million.
Net interest income totaled $185.3 million, decreasing 37.2% year over year. The decline was due to a fall in interest income along with higher interest expenses.
Net interest margin contracted 160 basis points year over year to 2.41%.
Non-interest income was $37.8 million, up 13.3% from the year-ago quarter. The upswing was due to a rise in deposit service charges and fees, and net gain on investment securities.
Non-interest expenses declined 51.8% from the year-ago quarter to $119 million. The decline resulted from a fall in employee compensation and benefits costs, deposit insurance expenses, professional fees and other expenses. Also, decrease in amortization of the FDIC indemnification asset led to lower expenses.
Credit Quality: A Mixed Bag
As of Dec 31, 2019, the ratio of net charge-offs to average loans was 0.05%, down from 0.28% as of Dec 31, 2018. Also, there was a recovery of loan losses of $0.5 million against the provision for loan losses of $12.6 million in the prior-year quarter. However, as of Dec 31, 2019, the ratio of non-performing loans to total loans was 0.88%, up from 0.59%.
Strong Balance Sheet
As of Dec 31, 2019, net loans were $23.1 billion, up from $21.9 billion as of Dec 31, 2018. Total deposits amounted to $24.4 billion, up from $23.5 billion recorded as of Dec 31, 2018.
Capital Position, Profitability Ratios Improve
As of Dec 31, 2019, Tier 1 leverage ratio was 8.9%, down from the prior-year quarter figure of 9.0%. Moreover, Common Equity Tier 1 risk-based capital ratio was 12.3% down from 12.6%. Further, total risk-based capital ratio was 12.8% down from 13.1% as of Dec 31, 2018.
At the end of the fourth quarter, return on average assets was 1.07%, up from 0.66% reported in the prior-year quarter. Additionally, return on average stockholders’ equity was 12.0%, up from 6.9%.
Share Repurchase Update
During the fourth quarter, the company repurchased nearly 0.1 million shares for approximately $4 million.
Our Take
Continued growth in loan and deposit balances, and efforts to strengthen fee income sources are likely support BankUnited’s top line. Also, backed by a strong balance sheet position, the company’s capital deployment activities seem sustainable. However, despite a decline in expenses in the fourth quarter, rise in overall costs over the past few years is likely to hinder bottom-line growth in the near term. Moreover, lower interest rates remain a concern.
BankUnited, Inc. Price, Consensus and EPS Surprise
BankUnited, Inc. price-consensus-eps-surprise-chart | BankUnited, Inc. Quote
Zacks Rank
BankUnited currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Companies
Washington Federal’s (WAFD - Free Report) first-quarter fiscal 2020 (ended Dec 31) adjusted earnings came in at 58 cents per share, missing the Zacks Consensus Estimate of 60 cents. Results exclude the net positive impact of two significant non-recurring items.
Hancock Whitney Corporation’s (HWC - Free Report) fourth-quarter 2019 adjusted earnings per share of $1.06 beat the Zacks Consensus Estimate of $1.04. However, the bottom line fell 5.4% from the year-ago quarter’s reported figure.
Shares of Ally Financial Inc. (ALLY - Free Report) gained 6.8%, following the release of its fourth-quarter and 2019 results. Quarterly adjusted earnings of 95 cents per share were in line with the Zacks Consensus Estimate. The figure reflects an increase of 3.3% from the year-ago quarter.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>