On Dec 22, 2014, we issued an updated research report on BankUnited, Inc. (BKU). Although the company remains focused on improving its revenues, its expenses continue to escalate.
BankUnited has been witnessing continued improvements in its loan portfolio and deposit base, reflecting a strong balance sheet position. Hence, it remains poised to grow both organically and inorganically in the upcoming quarters. Moreover, following improvement in the interest rate environment – which is expected in the middle of 2015, the company’s strategy to raise low-cost deposits is expected to boost its net interest margin.
BankUnited enjoys healthy liquidity levels. Also, given its steady capital deployment activities, the company remains a sound asset for yield-seeking investors.
On the flip side, high operating expenses continue to pose a major concern for the company. A sluggish economy and low interest rates are expected to keep the net interest margin under pressure. Additionally, despite efforts to lower the residential mortgage loan portfolio, the company remains exposed to the risky housing sector, which could be a serious trouble in the near term.
Analysts hold mixed views about BankUnited’s future prospects. Over the last 30 days, the Zacks Consensus Estimate for 2014 increased a cent to $1.94 per share, while it remained stable at $2.07 per share for 2015.
BankUnited currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the industry include Baylake Corp. (BYLK), Investar Holding Corporation (ISTR) and Middleburg Financial Corporation (MBRG), each sporting a Zacks Rank #1 (Strong Buy).
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