Loan growth, primarily in its New York market, drove BankUnited's profit higher in the first quarter.
Net income at the $25 billion-asset Miami Lakes, Fla., company rose 18% to $54.9 million from a year earlier. Earnings per share rose 16% to 51 cents.
Net interest income after the loan-loss provision rose 23% to $203 million. The net interest margin narrowed to 3.83% from 4.02% as new loans were originated at yields lower than loans already on the books.
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John Kanas, BankUnited's CEO, said the business never turned a profit, and there were no indications that it would. The company, meanwhile, remains committed to other residential lending operations while focusing on expanding its other businesses across Florida.
January 22 -
Several small and midsize banks generated large year-over-year loan growth despite a belief by some outsiders that a slowdown was looming. Bankers may have to spend coming months assuring investors that they can keep booking loans while adequately managing risk.
April 19 -
Since replacing Kevin Kabat in November, Greg Carmichael has said that the Cincinnati company needs to invest more heavily in technology and compliance now in order to boost profits and improve efficiency down the road. But investors worry that expenses will grow faster than revenues and further squeeze margins.
April 18
Average loans rose 32% to $16.7 billion. BankUnited's operations in New York generated $274 million of new loans in the quarter and its Florida operations generated $28 million. Most of the new loans came from commercial lending, mortgage warehouse lending, small business and residential loan purchase.
Noninterest income rose 12% to $23 million. BankUnited recorded a smaller loss on its Federal Deposit Insurance Corp. indemnification, which shrunk to $6 million from $20 million. Lease financing increased 70% to $11 million.
Noninterest expense rose 24% to $142 million. Amortization of the FDIC indemnification asset rose 80% to $40 million. Depreciation of equipment under operating lease rose 89% to $6.5 million.
