In an effort to further enhance its growth, Miami Lakes-based BankUnited, Inc. (BKU) opened four new branches in Florida during the month of December. With these branch openings, the bank’s total number of branches – operating in 15 counties in the state of Florida – reached 98.
Two of the four new branches were opened in Miami during early December. Subsequent to this, the other two branches were opened in Jupiter and Lighthouse Point, respectively. Further, BankUnited has embarked on arrangements for opening branches in Fort Lauderdale, Hialeah, Pompano Beach, Altamonte Springs and Sarasota in the upcoming year.
These branch openings are strategically fit for the company and it is anticipating to gain further from the economic improvement at Florida, which is recovering rapidly. For the nine months ended September 30, 2012, BankUnited’s annual growth rate in total demand deposits was 55%. Further, new loans grew by an overwhelming growth rate of 121% on an annualized basis, during the same period.
Total revenue at BankUnited in the third quarter of 2012 was $196.0 million, marginally up from $195.9 million in the year-ago quarter. In the same quarter, non-interest expense was $77.2 million, down 3.2% from $79.8 million in the year-ago quarter.
We believe that BankUnited’s organic growth will be boosted with its decision to open new branches. Moreover, we are quite impressed with the company’s decent top-line growth as well as continuously falling operating expenses.
Nevertheless, we are concerned about the impact of the prevailing low interest rate environment, sluggish economic growth and stringent regulatory landscape on the company’s financials in the subsequent quarters.
BankUnited currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. In the same sector, KeyCorp (KEY) also retains a Zacks #3 Rank.
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