BKU BankUnited Inc

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2023.

"As volatility in the capital markets recedes and the economy remains resilient, we have returned our focus to executing on our long term strategy of building a relationship oriented bank," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended June 30, 2023, the Company reported net income of $58.0 million, or $0.78 per diluted share, compared to $52.9 million, or $0.70 per diluted share for the immediately preceding quarter ended March 31, 2023 and $65.8 million, or $0.82 per diluted share, for the quarter ended June 30, 2022. For the six months ended June 30, 2023, the Company reported net income of $110.9 million or $1.48 per diluted share compared to $132.9 million or $1.60 per diluted share for the six months ended June 30, 2022.

Quarterly Highlights

• Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing deposits remained largely consistent as a percentage of deposits, representing 28.3% of total deposits at June 30, 2023 compared to 28.6% at March 31, 2023, declining by $62 million for the quarter.

• Our liquidity position remains strong, and improved over the course of the second quarter. At June 30, 2023, total same day available liquidity had increased to $14.7 billion from $9.4 billion at March 31, 2023. The available liquidity to uninsured, uncollateralized deposits ratio improved to 167% at June 30, 2023 from 95% at March 31, 2023 while the portion of our deposits that were insured or collateralized grew to 66% at June 30, 2023 from 62% at March 31, 2023.

• We made progress in reducing wholesale funding as outstanding FHLB advances were down $1.6 billion quarter-over-quarter.

• Net interest income and the net interest margin for the quarter ended June 30, 2023 were impacted by an increase in the cost of funds which more than offset the increased yield on interest-earning assets. A challenging deposit growth environment and a higher level of on-balance sheet liquidity for much of the quarter led to increased reliance on higher cost deposits and wholesale funding. The net interest margin, calculated on a tax-equivalent basis, was 2.47% for the quarter ended June 30, 2023, compared to 2.62% for the immediately preceding quarter ended March 31, 2023 and 2.63% for the quarter ended June 30, 2022. Net interest income decreased by $14.0 million, compared to the immediately preceding quarter ended March 31, 2023 and by $11.5 million compared to the quarter ended June 30, 2022.

• Consistent with industry trends, rising interest rates and tighter liquidity conditions contributed to an increase in the average cost of total deposits to 2.46% for the quarter ended June 30, 2023 from 2.05% for the immediately preceding quarter. This increase of 0.41% was smaller than the 0.63% increase in the cost of deposits for the quarter ended March 31, 2023. The yield on average interest earning assets increased to 5.30% for the quarter ended June 30, 2023 from 5.05% for the immediately preceding quarter.

• Total loans declined by $263 million quarter-over-quarter. Most of the decline was attributable to residential which was down by $184 million. Consistent with our strategy to re-position the composition of the balance sheet, cash flows from the residential portfolio were used to pay down wholesale funding.

• Credit remains favorable. The NPA ratio at June 30, 2023 was 0.34%, including 0.10% related to the guaranteed portion of non-performing SBA loans compared to 0.32%, including 0.10% related to the guaranteed portion of non-performing SBA loans at March 31, 2023. The annualized net charge-off ratio for the six months ended June 30, 2023 was 0.09%.

• Reflecting management's concentration risk management strategy, commercial real estate exposure is modest. Commercial real estate loans totaled 23% of loans at June 30, 2023, representing 169% of the Bank's total risk based capital. At June 30, 2023, the weighted average LTV of the CRE portfolio was 57.1% and the weighted average DSCR was 1.88. 60% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area.

• For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million compared to provisions of $19.8 million and $24.0 million for the quarters ended March 31, 2023 and June 30, 2022, respectively. The ratio of the ACL to total loans increased to 0.68%, at June 30, 2023 from 0.64% at March 31, 2023, reflecting the impact on modeling expected credit losses of a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario in calculating the ACL.

• We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.94 at June 30, 2023. Held to maturity securities were not significant.

• Our capital position is robust. CET1 was 11.2% at the holding company and 13.0% at the Bank at June 30, 2023. Pro-forma CET1 at the holding company and the Bank, including accumulated other comprehensive income, were 9.7% and 11.5%, respectively.

• Book value and tangible book value per common share improved to $33.94 and $32.90, respectively, at June 30, 2023, from $33.34 and $32.30, respectively at March 31, 2023.

Deposits and Funding

Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing demand deposits declined by $62 million, interest-bearing non-maturity deposits declined by $92 million and time deposits grew by $270 million. Account level deposit flows throughout the quarter generally appeared to be within the range of what we consider normal operating activity.

Consistent with the current interest rate environment and monetary policy stance, the cost of total deposits increased to 2.46% from 2.05% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the preceding quarter.

FHLB advances declined by $1.6 billion for the quarter, as we used cash flows generated by the residential and securities portfolios to reduce wholesale funding levels and allow for future re-deployment of capital into higher yielding assets.

Loans

A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands):

 

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

Residential

 

$

8,605,838

 

34.9

%

 

$

8,789,744

 

35.3

%

 

$

8,900,714

 

35.7

%

Non-owner occupied commercial real estate

 

 

5,302,523

 

21.5

%

 

 

5,346,895

 

21.5

%

 

 

5,405,597

 

21.7

%

Construction and land

 

 

393,464

 

1.6

%

 

 

324,805

 

1.3

%

 

 

294,360

 

1.2

%

Owner occupied commercial real estate

 

 

1,832,586

 

7.4

%

 

 

1,863,333

 

7.5

%

 

 

1,890,813

 

7.6

%

Commercial and industrial

 

 

6,575,368

 

26.8

%

 

 

6,617,716

 

26.5

%

 

 

6,417,721

 

25.9

%

Pinnacle - municipal finance

 

 

951,529

 

3.9

%

 

 

919,584

 

3.7

%

 

 

912,122

 

3.7

%

Franchise finance

 

 

207,783

 

0.8

%

 

 

239,205

 

1.0

%

 

 

253,774

 

1.0

%

Equipment finance

 

 

237,816

 

1.0

%

 

 

266,715

 

1.1

%

 

 

286,147

 

1.1

%

Mortgage warehouse lending ("MWL")

 

 

523,083

 

2.1

%

 

 

524,897

 

2.1

%

 

 

524,740

 

2.1

%

 

 

$

24,629,990

 

100.0

%

 

$

24,892,894

 

100.0

%

 

$

24,885,988

 

100.0

%

For the quarter ended June 30, 2023, residential declined by $184 million, C&I and CRE declined by $49 million in total, franchise and equipment finance declined by $60 million in aggregate and municipal finance grew by $32 million.

Asset Quality and the Allowance for Credit Losses ("ACL")

Non-performing loans totaled $118.7 million or 0.48% of total loans at June 30, 2023, compared to $114.2 million or 0.46% of total loans at March 31, 2023. Non-performing loans included $35.9 million and $36.9 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.15% of total loans at both June 30, 2023 and March 31, 2023.

The following table presents criticized and classified commercial loans at the dates indicated (in thousands):

 

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

Special mention

 

$

233,004

 

$

101,781

 

$

51,433

Substandard - accruing

 

 

525,643

 

 

596,054

 

 

605,965

Substandard - non-accruing

 

 

80,642

 

 

82,840

 

 

75,125

Doubtful

 

 

14,954

 

 

7,699

 

 

7,990

Total

 

$

854,243

 

$

788,374

 

$

740,513

One $22 million loan that was moved to special mention during the quarter paid off shortly after quarter-end.

The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended June 30, 2023, March 31, 2023 and December 31, 2022 (dollars in thousands):

 

 

 

 

ACL to Total

 

ACL to Non-

 

Net Charge-offs to

ACL

Loans

Performing Loans

Average Loans (1)

December 31, 2022

 

$

147,946

 

0.59

%

 

140.88

%

 

0.22

%

March 31, 2023

 

$

158,792

 

0.64

%

 

139.01

%

 

0.08

%

June 30, 2023

 

$

166,833

 

0.68

%

 

140.52

%

 

0.09

%

 

(1) Annualized for the three months ended March 31, 2023 and the six months ended June 30, 2023.

The ACL at June 30, 2023 represents management's estimate of lifetime expected credit losses given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million, including $14.2 million related to funded loans. The more significant factors impacting the provision for credit losses and increase in the ACL for the quarter ended June 30, 2023 were a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario.

The following table summarizes the activity in the ACL for the periods indicated (in thousands):

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

June 30, 2023

 

June 30, 2022

Beginning balance

 

$

158,792

 

 

$

147,946

 

 

$

125,443

 

 

$

147,946

 

 

$

126,457

 

Impact of adoption of new accounting pronouncement (ASU 2022-02)

 

 

N/A

 

 

 

(1,794

)

 

 

N/A

 

 

 

(1,794

)

 

 

N/A

 

Balance after impact of adoption of new accounting pronouncement (ASU 2022-02)

 

 

158,792

 

 

 

146,152

 

 

 

125,443

 

 

 

146,152

 

 

 

126,457

 

Provision

 

 

14,195

 

 

 

17,595

 

 

 

23,207

 

 

 

31,790

 

 

 

30,653

 

Net charge-offs

 

 

(6,154

)

 

 

(4,955

)

 

 

(18,411

)

 

 

(11,109

)

 

 

(26,871

)

Ending balance

 

$

166,833

 

 

$

158,792

 

 

$

130,239

 

 

$

166,833

 

 

$

130,239

 

Net Interest Income

Net interest income for the quarter ended June 30, 2023 was $213.9 million, compared to $227.9 million for the immediately preceding quarter ended March 31, 2023 and $225.4 million for the quarter ended June 30, 2022. Interest income increased by $23.0 million for the quarter ended June 30, 2023 compared to the immediately preceding quarter while interest expense increased by $37.0 million.

The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.15% to 2.47% for the quarter ended June 30, 2023, from 2.62% for the immediately preceding quarter ended March 31, 2023. Overall, the net interest margin was negatively impacted by an increase in the cost of interest-bearing deposits and FHLB advances, more than offsetting the increased yield on interest earning assets. A decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity contributed to an increase in higher-cost funding.

More detail about certain factors impacting the net interest margin for the quarter ended June 30, 2023 follows:

• The tax-equivalent yield on investment securities increased to 5.19% for the quarter ended June 30, 2023, from 4.95% for the quarter ended March 31, 2023. This increase resulted primarily from the reset of coupon rates on variable rate securities.

• The tax-equivalent yield on loans increased to 5.35% for the quarter ended June 30, 2023, from 5.10% for the quarter ended March 31, 2023. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase.

• The average cost on interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the quarter ended March 31, 2023, as a result of the rising interest rate environment, tightening liquidity conditions and the shift from non-interest bearing deposits to deposits priced at current, higher market rates.

• The average rate paid on FHLB advances increased to 4.59% for the quarter ended June 30, 2023, from 4.27% for the quarter ended March 31, 2023, primarily due to higher prevailing rates, partially offset by the impact of cash flow hedges.

Non-interest income and Non-interest expense

Non-interest income totaled $25.5 million for the quarter ended June 30, 2023, compared to $16.5 million for the quarter ended March 31, 2023 and $13.5 million for the quarter ended June 30, 2022. This increase over the comparable quarters was primarily attributable to losses on certain preferred equity investments of $13.3 million and $9.3 million during the quarters ended March 31, 2023 and June 30, 2022, respectively.

Non-interest expense totaled $145.2 million for the quarter ended June 30, 2023, compared to $152.8 million for the immediately preceding quarter ended March 31, 2023 and $127.4 million for the quarter ended June 30, 2022. The quarter over quarter decline in compensation and benefits reflected expected seasonal fluctuations in payroll taxes and benefits. The quarter over quarter decline in other non-interest expense was impacted by $4.4 million in certain operational losses recognized during the quarter ended March 31, 2023. Costs related to deposit rebate and commission programs increased by $7.2 million for the quarter ended June 30, 2023 compared to the second quarter of the prior year.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, July 25, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish.

The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BIe6f3323769d343d48b39c8774b18f417. For those unable to join the live event, an archived webcast will be available in the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast.

About BankUnited, Inc.

BankUnited, Inc., with total assets of $35.9 billion at June 30, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused on the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance.

The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov).

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)

 

 

 

June 30,

 

December 31,

 

2023

2022

ASSETS

 

 

 

 

Cash and due from banks:

 

 

 

 

Non-interest bearing

 

$

18,355

 

 

$

16,068

 

Interest bearing

 

 

282,814

 

 

 

556,579

 

Cash and cash equivalents

 

 

301,169

 

 

 

572,647

 

Investment securities (including securities reported at fair value of $9,133,937 and $9,745,327)

 

 

9,143,937

 

 

 

9,755,327

 

Non-marketable equity securities

 

 

317,759

 

 

 

294,172

 

Loans

 

 

24,629,990

 

 

 

24,885,988

 

Allowance for credit losses

 

 

(166,833

)

 

 

(147,946

)

Loans, net

 

 

24,463,157

 

 

 

24,738,042

 

Bank owned life insurance

 

 

318,935

 

 

 

308,212

 

Operating lease equipment, net

 

 

514,734

 

 

 

539,799

 

Goodwill

 

 

77,637

 

 

 

77,637

 

Other assets

 

 

734,151

 

 

 

740,876

 

Total assets

 

$

35,871,479

 

 

$

37,026,712

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Demand deposits:

 

 

 

 

Non-interest bearing

 

$

7,304,735

 

 

$

8,037,848

 

Interest bearing

 

 

2,929,870

 

 

 

2,142,067

 

Savings and money market

 

 

10,084,276

 

 

 

13,061,341

 

Time

 

 

5,519,771

 

 

 

4,268,078

 

Total deposits

 

 

25,838,652

 

 

 

27,509,334

 

Federal funds purchased

 

 

—

 

 

 

190,000

 

FHLB advances

 

 

5,975,000

 

 

 

5,420,000

 

Notes and other borrowings

 

 

715,302

 

 

 

720,923

 

Other liabilities

 

 

816,215

 

 

 

750,474

 

Total liabilities

 

 

33,345,169

 

 

 

34,590,731

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,429,948 and 75,674,587 shares issued and outstanding

 

 

744

 

 

 

757

 

Paid-in capital

 

 

274,202

 

 

 

321,729

 

Retained earnings

 

 

2,623,926

 

 

 

2,551,400

 

Accumulated other comprehensive loss

 

 

(372,562

)

 

 

(437,905

)

Total stockholders' equity

 

 

2,526,310

 

 

 

2,435,981

 

Total liabilities and stockholders' equity

 

$

35,871,479

 

 

$

37,026,712

 

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

 

 

2023

 

2023

 

2022

 

2023

 

2022

Interest income:

 

 

 

 

 

 

 

 

 

 

Loans

 

$

326,153

 

$

308,795

 

 

$

209,223

 

 

$

634,948

 

 

$

400,785

 

Investment securities

 

 

120,604

 

 

118,758

 

 

 

54,771

 

 

 

239,362

 

 

 

97,819

 

Other

 

 

16,664

 

 

12,863

 

 

 

2,979

 

 

 

29,527

 

 

 

4,333

 

Total interest income

 

 

463,421

 

 

440,416

 

 

 

266,973

 

 

 

903,837

 

 

 

502,937

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

156,868

 

 

133,630

 

 

 

20,501

 

 

 

290,498

 

 

 

32,363

 

Borrowings

 

 

92,675

 

 

78,912

 

 

 

21,056

 

 

 

171,587

 

 

 

36,516

 

Total interest expense

 

 

249,543

 

 

212,542

 

 

 

41,557

 

 

 

462,085

 

 

 

68,879

 

Net interest income before provision for credit losses

 

 

213,878

 

 

227,874

 

 

 

225,416

 

 

 

441,752

 

 

 

434,058

 

Provision for credit losses

 

 

15,517

 

 

19,788

 

 

 

23,996

 

 

 

35,305

 

 

 

31,826

 

Net interest income after provision for credit losses

 

 

198,361

 

 

208,086

 

 

 

201,420

 

 

 

406,447

 

 

 

402,232

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

Deposit service charges and fees

 

 

5,349

 

 

5,545

 

 

 

5,896

 

 

 

10,894

 

 

 

11,856

 

Gain (loss) on investment securities, net

 

 

993

 

 

(12,549

)

 

 

(8,392

)

 

 

(11,556

)

 

 

(16,260

)

Lease financing

 

 

12,519

 

 

13,109

 

 

 

13,363

 

 

 

25,628

 

 

 

26,778

 

Other non-interest income

 

 

6,626

 

 

10,430

 

 

 

2,583

 

 

 

17,056

 

 

 

5,377

 

Total non-interest income

 

 

25,487

 

 

16,535

 

 

 

13,450

 

 

 

42,022

 

 

 

27,751

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

67,414

 

 

71,051

 

 

 

62,461

 

 

 

138,465

 

 

 

129,549

 

Occupancy and equipment

 

 

11,043

 

 

10,802

 

 

 

11,399

 

 

 

21,845

 

 

 

22,911

 

Deposit insurance expense

 

 

7,597

 

 

7,907

 

 

 

3,993

 

 

 

15,504

 

 

 

7,396

 

Professional fees

 

 

3,518

 

 

2,918

 

 

 

3,256

 

 

 

6,436

 

 

 

5,518

 

Technology

 

 

20,437

 

 

21,726

 

 

 

17,898

 

 

 

42,163

 

 

 

34,902

 

Depreciation of operating lease equipment

 

 

11,232

 

 

11,521

 

 

 

12,585

 

 

 

22,753

 

 

 

25,195

 

Other non-interest expense

 

 

23,977

 

 

26,855

 

 

 

15,810

 

 

 

50,832

 

 

 

28,255

 

Total non-interest expense

 

 

145,218

 

 

152,780

 

 

 

127,402

 

 

 

297,998

 

 

 

253,726

 

Income before income taxes

 

 

78,630

 

 

71,841

 

 

 

87,468

 

 

 

150,471

 

 

 

176,257

 

Provision for income taxes

 

 

20,634

 

 

18,959

 

 

 

21,704

 

 

 

39,593

 

 

 

43,343

 

Net income

 

$

57,996

 

$

52,882

 

 

$

65,764

 

 

$

110,878

 

 

$

132,914

 

Earnings per common share, basic

 

$

0.78

 

$

0.71

 

 

$

0.82

 

 

$

1.49

 

 

$

1.61

 

Earnings per common share, diluted

 

$

0.78

 

$

0.70

 

 

$

0.82

 

 

$

1.48

 

 

$

1.60

 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

 

Three Months Ended June 30,

 

Three Months Ended March 31,

 

Three Months Ended June 30,

 

 

2023

 

2023

 

2022

 

 

Average

 

 

 

Yield/

 

Average

 

 

Yield/

 

Average

 

 

Yield/

Balance

Interest (1)

Rate (1)(2)

Balance

Interest (1)

Rate (1)(2)

Balance

Interest (1)

Rate (1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

24,680,919

 

 

$

329,494

 

5.35

%

 

$

24,724,296

 

 

$

312,125

 

5.10

%

 

$

23,709,190

 

 

$

212,395

 

3.59

%

Investment securities (3)

 

 

9,369,019

 

 

 

121,520

 

5.19

%

 

 

9,672,514

 

 

 

119,666

 

4.95

%

 

 

10,477,600

 

 

 

55,488

 

2.12

%

Other interest earning assets

 

 

1,323,025

 

 

 

16,664

 

5.05

%

 

 

1,039,563

 

 

 

12,863

 

5.02

%

 

 

718,904

 

 

 

2,979

 

1.66

%

Total interest earning assets

 

 

35,372,963

 

 

 

467,678

 

5.30

%

 

 

35,436,373

 

 

 

444,654

 

5.05

%

 

 

34,905,694

 

 

 

270,862

 

3.11

%

Allowance for credit losses

 

 

(162,463

)

 

 

 

 

 

 

(151,071

)

 

 

 

 

 

 

(127,864

)

 

 

 

 

Non-interest earning assets

 

 

1,744,693

 

 

 

 

 

 

 

1,793,000

 

 

 

 

 

 

 

1,669,689

 

 

 

 

 

Total assets

 

$

36,955,193

 

 

 

 

 

 

$

37,078,302

 

 

 

 

 

 

$

36,447,519

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

 

$

2,772,839

 

 

$

18,417

 

2.66

%

 

$

2,283,505

 

 

$

10,545

 

1.87

%

 

$

2,576,257

 

 

$

1,742

 

0.27

%

Savings and money market deposits

 

 

10,285,494

 

 

 

88,892

 

3.47

%

 

 

12,145,922

 

 

 

91,724

 

3.06

%

 

 

13,052,566

 

 

 

15,213

 

0.47

%

Time deposits

 

 

5,494,631

 

 

 

49,559

 

3.62

%

 

 

4,526,480

 

 

 

31,361

 

2.81

%

 

 

2,812,988

 

 

 

3,546

 

0.51

%

Total interest bearing deposits

 

 

18,552,964

 

 

 

156,868

 

3.39

%

 

 

18,955,907

 

 

 

133,630

 

2.86

%

 

 

18,441,811

 

 

 

20,501

 

0.45

%

Federal funds purchased

 

 

—

 

 

 

—

 

—

%

 

 

143,580

 

 

 

1,611

 

4.49

%

 

 

115,146

 

 

 

155

 

0.53

%

FHLB advances

 

 

7,288,187

 

 

 

83,429

 

4.59

%

 

 

6,465,000

 

 

 

68,039

 

4.27

%

 

 

4,373,736

 

 

 

11,644

 

1.07

%

Notes and other borrowings

 

 

719,368

 

 

 

9,246

 

5.14

%

 

 

720,906

 

 

 

9,262

 

5.14

%

 

 

721,284

 

 

 

9,257

 

5.13

%

Total interest bearing liabilities

 

 

26,560,519

 

 

 

249,543

 

3.77

%

 

 

26,285,393

 

 

 

212,542

 

3.28

%

 

 

23,651,977

 

 

 

41,557

 

0.70

%

Non-interest bearing demand deposits

 

 

7,067,053

 

 

 

 

 

 

 

7,458,221

 

 

 

 

 

 

 

9,419,025

 

 

 

 

 

Other non-interest bearing liabilities

 

 

798,279

 

 

 

 

 

 

 

821,419

 

 

 

 

 

 

 

654,162

 

 

 

 

 

Total liabilities

 

 

34,425,851

 

 

 

 

 

 

 

34,565,033

 

 

 

 

 

 

 

33,725,164

 

 

 

 

 

Stockholders' equity

 

 

2,529,342

 

 

 

 

 

 

 

2,513,269

 

 

 

 

 

 

 

2,722,355

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

36,955,193

 

 

 

 

 

 

$

37,078,302

 

 

 

 

 

 

$

36,447,519

 

 

 

 

 

Net interest income

 

 

 

$

218,135

 

 

 

 

 

$

232,112

 

 

 

 

 

$

229,305

 

 

Interest rate spread

 

 

 

 

 

1.53

%

 

 

 

 

 

1.77

%

 

 

 

 

 

2.41

%

Net interest margin

 

 

 

 

 

2.47

%

 

 

 

 

 

2.62

%

 

 

 

 

 

2.63

%

 

(1) On a tax-equivalent basis where applicable

(2) Annualized

(3) At fair value except for securities held to maturity

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

 

Six Months Ended June 30,

 

 

2023

 

2022

 

 

Average

 

 

Yield/

 

Average

 

 

 

Yield/

Balance

Interest (1)

Rate (1)(2)

Balance

Interest (1)

Rate (1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

24,702,487

 

 

$

641,617

 

5.22

%

 

$

23,530,162

 

 

$

406,946

 

3.47

%

Investment securities (3)

 

 

9,519,928

 

 

 

241,187

 

5.07

%

 

 

10,281,431

 

 

 

99,207

 

1.93

%

Other interest earning assets

 

 

1,182,077

 

 

 

29,527

 

5.04

%

 

 

696,894

 

 

 

4,333

 

1.25

%

Total interest earning assets

 

 

35,404,492

 

 

 

912,331

 

5.18

%

 

 

34,508,487

 

 

 

510,486

 

2.97

%

Allowance for credit losses

 

 

(156,798

)

 

 

 

 

 

 

(128,443

)

 

 

 

 

Non-interest earning assets

 

 

1,768,714

 

 

 

 

 

 

 

1,672,070

 

 

 

 

 

Total assets

 

$

37,016,408

 

 

 

 

 

 

$

36,052,114

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

 

$

2,570,422

 

 

$

29,291

 

2.30

%

 

$

2,825,830

 

 

$

3,111

 

0.22

%

Savings and money market deposits

 

 

11,169,671

 

 

 

180,287

 

3.25

%

 

 

13,225,986

 

 

 

22,866

 

0.35

%

Time deposits

 

 

5,013,230

 

 

 

80,920

 

3.26

%

 

 

3,064,887

 

 

 

6,386

 

0.42

%

Total interest bearing deposits

 

 

18,753,323

 

 

 

290,498

 

3.12

%

 

 

19,116,703

 

 

 

32,363

 

0.34

%

Federal funds purchased

 

 

71,393

 

 

 

1,611

 

4.51

%

 

 

151,074

 

 

 

213

 

0.28

%

FHLB advances

 

 

6,878,867

 

 

 

151,467

 

4.44

%

 

 

3,317,182

 

 

 

17,790

 

1.08

%

Notes and other borrowings

 

 

720,133

 

 

 

18,509

 

5.14

%

 

 

721,344

 

 

 

18,513

 

5.13

%

Total interest bearing liabilities

 

 

26,423,716

 

 

 

462,085

 

3.53

%

 

 

23,306,303

 

 

 

68,879

 

0.59

%

Non-interest bearing demand deposits

 

 

7,261,557

 

 

 

 

 

 

 

9,234,469

 

 

 

 

 

Other non-interest bearing liabilities

 

 

809,785

 

 

 

 

 

 

 

638,767

 

 

 

 

 

Total liabilities

 

 

34,495,058

 

 

 

 

 

 

 

33,179,539

 

 

 

 

 

Stockholders' equity

 

 

2,521,350

 

 

 

 

 

 

 

2,872,575

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

37,016,408

 

 

 

 

 

 

$

36,052,114

 

 

 

 

 

Net interest income

 

 

 

$

450,246

 

 

 

 

 

$

441,607

 

 

Interest rate spread

 

 

 

 

 

1.65

%

 

 

 

 

 

2.38

%

Net interest margin

 

 

 

 

 

2.55

%

 

 

 

 

 

2.57

%

 

(1) On a tax-equivalent basis where applicable

(2) Annualized

(3) At fair value except for securities held to maturity

BANKUNITED, INC. AND SUBSIDIARIES

EARNINGS PER COMMON SHARE

(In thousands except share and per share amounts)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Basic earnings per common share:

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

Net income

 

$

57,996

 

 

$

65,764

 

 

$

110,878

 

 

$

132,914

 

Distributed and undistributed earnings allocated to participating securities

 

 

(881

)

 

 

(999

)

 

 

(1,679

)

 

 

(1,927

)

Income allocated to common stockholders for basic earnings per common share

 

$

57,115

 

 

$

64,765

 

 

$

109,199

 

 

$

130,987

 

Denominator:

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

74,424,631

 

 

 

80,300,069

 

 

 

74,588,904

 

 

 

82,629,098

 

Less average unvested stock awards

 

 

(1,183,039

)

 

 

(1,257,258

)

 

 

(1,188,430

)

 

 

(1,234,678

)

Weighted average shares for basic earnings per common share

 

 

73,241,592

 

 

 

79,042,811

 

 

 

73,400,474

 

 

 

81,394,420

 

Basic earnings per common share

 

$

0.78

 

 

$

0.82

 

 

$

1.49

 

 

$

1.61

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

Income allocated to common stockholders for basic earnings per common share

 

$

57,115

 

 

$

64,765

 

 

$

109,199

 

 

$

130,987

 

Adjustment for earnings reallocated from participating securities

 

 

1

 

 

 

3

 

 

 

5

 

 

 

4

 

Income used in calculating diluted earnings per common share

 

$

57,116

 

 

$

64,768

 

 

$

109,204

 

 

$

130,991

 

Denominator:

 

 

 

 

 

 

 

 

Weighted average shares for basic earnings per common share

 

 

73,241,592

 

 

 

79,042,811

 

 

 

73,400,474

 

 

 

81,394,420

 

Dilutive effect of certain share-based awards

 

 

179,318

 

 

 

350,734

 

 

 

312,708

 

 

 

244,808

 

Weighted average shares for diluted earnings per common share

 

 

73,420,910

 

 

 

79,393,545

 

 

 

73,713,182

 

 

 

81,639,228

 

Diluted earnings per common share

 

$

0.78

 

 

$

0.82

 

 

$

1.48

 

 

$

1.60

 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 

 

 

At or for the Three Months Ended

 

Six Months Ended June 30,

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

2023

 

2022

Financial ratios (4)

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.63

%

 

 

0.58

%

 

 

0.72

%

 

0.60

%

 

0.74

%

Return on average stockholders’ equity

 

 

9.2

%

 

 

8.5

%

 

 

9.7

%

 

8.9

%

 

9.3

%

Net interest margin (3)

 

 

2.47

%

 

 

2.62

%

 

 

2.63

%

 

2.55

%

 

2.57

%

Loans to deposits

 

 

95.3

%

 

 

96.8

%

 

 

84.7

%

 

 

 

 

Tangible book value per common share

 

$

32.90

 

 

$

32.30

 

 

$

31.16

 

 

 

 

 

 

 

June 30, 2023

 

December 31, 2022

Asset quality ratios

 

 

 

 

Non-performing loans to total loans (1)(5)

 

0.48

%

 

0.42

%

Non-performing assets to total assets (2)(5)

 

0.34

%

 

0.29

%

Allowance for credit losses to total loans

 

0.68

%

 

0.59

%

Allowance for credit losses to non-performing loans (1)(5)

 

140.52

%

 

140.88

%

Net charge-offs to average loans (4)

 

0.09

%

 

0.22

%

  (1)  

We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans.

(2)

 

Non-performing assets include non-performing loans, OREO and other repossessed assets.

(3)

 

On a tax-equivalent basis.

(4)

 

Annualized for the three and six month periods as applicable.

(5)

 

Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $35.9 million or 0.15% of total loans and 0.10% of total assets at June 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022.

 

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

 

Required to be Considered Well Capitalized

 

 

BankUnited, Inc.

 

BankUnited, N.A.

 

BankUnited, Inc.

 

BankUnited, N.A.

 

BankUnited, Inc.

 

BankUnited, N.A.

 

Capital ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage

 

7.6

%

 

8.8

%

 

7.4

%

 

8.6

%

 

7.5

%

 

8.4

%

 

5.0

%

Common Equity Tier 1 ("CET1") risk-based capital

 

11.2

%

 

13.0

%

 

10.8

%

 

12.5

%

 

11.0

%

 

12.4

%

 

6.5

%

Total risk-based capital

 

13.0

%

 

13.6

%

 

12.6

%

 

13.1

%

 

12.7

%

 

12.9

%

 

10.0

%

Tangible Common Equity/Tangible Assets

 

6.8

%

 

N/A

 

 

6.5

%

 

N/A

 

 

6.4

%

 

N/A

 

 

N/A

 

Non-GAAP Financial Measures

Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data):

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

Total stockholders’ equity

 

$

2,526,310

 

$

2,481,394

 

$

2,506,017

Less: goodwill and other intangible assets

 

 

77,637

 

 

77,637

 

 

77,637

Tangible stockholders’ equity

 

$

2,448,673

 

$

2,403,757

 

$

2,428,380

 

 

 

 

 

 

 

Common shares issued and outstanding

 

 

74,429,948

 

 

74,423,365

 

 

77,944,216

 

 

 

 

 

 

 

Book value per common share

 

$

33.94

 

$

33.34

 

$

32.15

 

 

 

 

 

 

 

Tangible book value per common share

 

$

32.90

 

$

32.30

 

$

31.16

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230725471731/en/

BankUnited, Inc. Investor Relations: Leslie N. Lunak, 786-313-1698 llunak@bankunited.com