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BankUnited, Inc. Reports 2022 Results

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2022.

"We finished 2022 strong, with good growth, margin expansion and the launch of Atlanta and the Dallas branch. We're optimistic going into 2023," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended December 31, 2022, the Company reported net income of $64.2 million, or $0.82 per diluted share, compared to $87.9 million, or $1.12 per diluted share for the immediately preceding quarter ended September 30, 2022 and $125.3 million, or $1.41 per diluted share, for the quarter ended December 31, 2021. For the year ended December 31, 2022, the Company reported net income of $285.0 million, or $3.54 per diluted share, compared to $415.0 million, or $4.52 per diluted share, for the year ended December 31, 2021.

Quarterly Highlights

  • BankUnited was ranked #1 in comprehensive innovation, #2 in bank reputation among customers and #9 in bank reputation among non-customers in an annual survey by the American Banker and RepTrak, published in November 2022. The survey encompassed 41 large, regional and nontraditional banks.
  • Pre-tax, pre-provision net revenue ("PPNR") was $121.4 million for the quarter ended December 31, 2022, compared to $120.8 million for the immediately preceding quarter ended September 30, 2022 and $63.8 million for the quarter ended December 31, 2021. PPNR for the quarter ended December 31, 2021 was impacted by certain significant notable items, further discussed below in the section titled "Non-interest income and Non-interest expense."
  • Loans grew by $619 million for the quarter ended December 31, 2022. The core C&I and commercial real estate portfolio segments grew by a total of $722 million. For the year ended December 31, 2022, excluding the decline in PPP loans, total loans grew by 6% or $1.4 billion.
  • Total deposits grew by $160 million during the quarter ended December 31, 2022. Not unexpectedly in the current interest rate environment, non-interest bearing demand deposits declined by $756 million to 29% of total deposits, while interest bearing deposits grew by $916 million.
  • The net interest margin, calculated on a tax-equivalent basis, expanded to 2.81% for the quarter ended December 31, 2022, from 2.76% for the immediately preceding quarter and 2.44% for the quarter ended December 31, 2021. Net interest income increased by $7.2 million, compared to the immediately preceding quarter ended September 30, 2022 and by $37.1 million compared to the quarter ended December 31, 2021. Net interest income for the year ended December 31, 2022 grew by 15% compared to the prior year, while the net interest margin expanded by 30 basis points year-over-year.
  • In response to the rising interest rate environment and tightening liquidity, the average cost of total deposits rose to 1.42% for the quarter ended December 31, 2022, from 0.78% for the immediately preceding quarter ended September 30, 2022 and 0.19% for the quarter ended December 31, 2021. The yield on average interest earning assets increased to 4.60% for the quarter ended December 31, 2022, from 3.80% for the immediately preceding quarter and 2.81% for the quarter ended December 31, 2021.
  • For the quarter ended December 31, 2022, the Company recorded a provision for credit losses of $39.6 million compared to provisions of $3.7 million and $0.2 million for the quarters ended September 30, 2022 and December 31, 2021, respectively. Despite the decline in non-performing loans, we built reserves during the quarter in light of a worsening baseline economic forecast and a heightened level of uncertainty regarding the trajectory of the economy. The provision for credit losses for the quarter ended December 31, 2022 was also impacted by loan growth and an increase in certain specific reserves. The ratio of the ACL to total loans increased to 0.59%, from 0.54% at September 30, 2022.
  • During the quarter ended December 31, 2022, the Company repurchased approximately 1.9 million shares of its common stock for an aggregate purchase price of $64.7 million, at a weighted average price of $33.92 per share.

Loans

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

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

Residential and other consumer loans

$

8,900,714

 

35.7

%

 

$

8,853,884

 

36.4

%

 

$

8,368,380

 

35.2

%

Non-owner occupied commercial real estate

 

5,405,597

 

21.7

%

 

 

5,331,232

 

22.1

%

 

 

5,536,348

 

23.3

%

Construction and land

 

294,360

 

1.2

%

 

 

246,202

 

1.0

%

 

 

165,390

 

0.7

%

Owner occupied commercial real estate

 

1,890,813

 

7.6

%

 

 

1,919,074

 

7.9

%

 

 

1,944,658

 

8.2

%

Commercial and industrial

 

6,414,351

 

25.9

%

 

 

5,786,907

 

23.9

%

 

 

4,790,275

 

20.2

%

PPP

 

3,370

 

%

 

 

10,191

 

%

 

 

248,505

 

1.0

%

Pinnacle

 

912,122

 

3.7

%

 

 

932,187

 

3.8

%

 

 

919,641

 

3.9

%

Bridge - franchise finance

 

253,774

 

1.0

%

 

 

254,137

 

1.0

%

 

 

342,124

 

1.4

%

Bridge - equipment finance

 

286,147

 

1.1

%

 

 

310,035

 

1.3

%

 

 

357,599

 

1.5

%

Mortgage warehouse lending ("MWL")

 

524,740

 

2.1

%

 

 

622,883

 

2.6

%

 

 

1,092,133

 

4.6

%

 

$

24,885,988

 

100.0

%

 

$

24,266,732

 

100.0

%

 

$

23,765,053

 

100.0

%

Total loans grew by $619 million for the quarter ended December 31, 2022. In the aggregate, the core C&I and commercial real estate portfolio segments grew by $722 million. The commercial and industrial segment, including owner-occupied commercial real estate, grew by $599 million for the quarter, while commercial real estate loans grew by $123 million. As expected, the remaining commercial segments declined during the quarter while the residential portfolio grew modestly.

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

Non-performing loans totaled $105.0 million or 0.42% of total loans at December 31, 2022, down from $156.4 million or 0.64% of total loans at September 30, 2022 and $205.9 million or 0.87% of total loans at December 31, 2021. Non-performing loans included $40.3 million, $41.8 million and $46.1 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.16%, 0.17% and 0.19% of total loans at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

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

 

December 31,

2022

 

September 30,

2022

 

December 31,

2021

Special mention

$

51,433

 

$

26,939

 

$

148,593

Substandard - accruing

 

605,965

 

 

662,716

 

 

1,136,378

Substandard - non-accruing

 

75,125

 

 

104,994

 

 

129,579

Doubtful

 

7,990

 

 

32,093

 

 

47,754

Total

$

740,513

 

$

826,742

 

$

1,462,304

The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended December 31, 2022, September 30, 2022, and December 31, 2021 (dollars in thousands):

 

ACL

 

ACL to Total

Loans

 

ACL to Non-

Performing Loans

 

Net Charge-offs to

Average Loans (1)

December 31, 2021

$

126,457

 

0.53

%

 

61.41

%

 

0.29

%

September 30, 2022

$

130,671

 

0.54

%

 

83.54

%

 

0.16

%

December 31, 2022

$

147,946

 

0.59

%

 

140.88

%

 

0.22

%

____________

(1)

Annualized for the nine months ended September 30, 2022.

The ACL at December 31, 2022 represents management's estimate of lifetime expected credit losses given our assessment of historical data, current conditions and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended December 31, 2022, the Company recorded a provision for credit losses of $39.6 million, including $40.4 million related to funded loans. The most significant factor impacting the provision for credit losses for the quarter ended December 31, 2022 was the economic forecast and uncertainty about the trajectory of the economy, which impacted both the quantitative and qualitative portions of the ACL. New loan production and increases in certain specific reserves also impacted the provision for the quarter.

For the year ended December 31, 2022 the provision for credit losses totaled $75.2 million, compared to a recovery of the provision of $(67.1) million for the year ended December 31, 2021. The provision for 2022 reflected consideration of emerging economic uncertainty and increasing probability of a recession, while the recovery for 2021 reflected the release of reserves built at the time of onset of the COVID-19 pandemic.

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

 

Three Months Ended December 31,

 

Years Ended December 31,

 

2022

 

2021

 

2022

 

2021

Beginning balance

$

130,671

 

 

$

159,615

 

 

$

126,457

 

 

$

257,323

 

Provision (recovery)

 

40,408

 

 

 

1,067

 

 

 

73,814

 

 

 

(64,456

)

Net charge-offs

 

(23,133

)

 

 

(34,225

)

 

 

(52,325

)

 

 

(66,410

)

Ending balance

$

147,946

 

 

$

126,457

 

 

$

147,946

 

 

$

126,457

 

Net Interest Income

Net interest income for the quarter ended December 31, 2022 was $243.1 million, compared to $235.8 million for the immediately preceding quarter ended September 30, 2022 and $206.0 million for the quarter ended December 31, 2021. Interest income increased by $75.5 million for the quarter ended December 31, 2022, compared to the immediately preceding quarter while interest expense increased by $68.2 million.

The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.05% to 2.81% for the quarter ended December 31, 2022, from 2.76% for the immediately preceding quarter ended September 30, 2022. Factors impacting the net interest margin for the quarter ended December 31, 2022 included:

  • The tax-equivalent yield on investment securities increased to 4.33% for the quarter ended December 31, 2022, from 3.12% for the quarter ended September 30, 2022. This increase resulted from the reset of coupon rates on variable rate securities and to a lesser extent, purchases of higher yielding securities.
  • The tax-equivalent yield on loans increased to 4.72% for the quarter ended December 31, 2022, from 4.11% for the quarter ended September 30, 2022. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase.
  • The average rate paid on interest bearing deposits increased to 2.06% for the quarter ended December 31, 2022, from 1.14% for the quarter ended September 30, 2022, in response to the rising interest rate environment and tightening liquidity conditions. Time deposits grew as a percentage of interest bearing deposits as we deployed a strategy to extend the term of interest bearing deposits.
  • The average rate paid on FHLB advances increased to 3.44% for the quarter ended December 31, 2022, from 2.25% for the quarter ended September 30, 2022, primarily in response to the rising interest rate environment.

Non-interest income and Non-interest expense

Non-interest income totaled $26.8 million for the quarter ended December 31, 2022, compared to $23.1 million for the quarter ended September 30, 2022 and $45.6 million for the quarter ended December 31, 2021. During the quarter ended December 31, 2021, the Company sold a portfolio of single-family residential loans for a gain of $18.2 million.

Non-interest income totaled $77.6 million for the year ended December 31, 2022, compared to $134.2 million for the year ended December 31, 2021. The year-over-year decline is primarily attributable to (i) the gain on sale of residential loans in the fourth quarter of 2021 discussed above, (ii) a $19.7 million decline in the fair value of certain preferred stock investments included in net loss on investment securities for the year ended December 31, 2022, and (iii) a decline in "other" non-interest income related primarily to lower BOLI revenue.

Non-interest expense totaled $148.5 million for the quarter ended December 31, 2022, compared to $138.1 million for the immediately preceding quarter ended September 30, 2022 and $187.9 million for the quarter ended December 31, 2021. Non-interest expense totaled $540.3 million and $547.6 million for the years ended December 31, 2022 and 2021, respectively. Non-interest expense for the quarter and year ended December 31, 2021 included a loss of $44.8 million on discontinuance of cash flow hedges. Quarter-over-quarter and year-over-year increases in employee compensation and benefits and in technology expense reflected labor market dynamics and continued investment in people and technology to support future growth.

Provision (benefit) for income taxes

The effective income tax rate was 21.5% and 24.0% for the quarter and year ended December 31, 2022, compared to (97.2)% and 7.7% for the quarter and year ended December 31, 2021. The effective income tax rate for both the quarter and year ended December 31, 2021 was positively impacted by $69.1 million in discrete tax benefits recognized in the fourth quarter of 2021.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, January 19, 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/BI9a423dcb6b32467695ab75bc2d26717e. 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 $37.0 billion at December 31, 2022, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 54 banking centers in 12 Florida counties, 4 banking centers in the New York metropolitan area, and 1 banking center located in Dallas, Texas.

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. 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, 2021 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)

 

 

December 31,

2022

 

December 31,

2021

ASSETS

 

 

 

Cash and due from banks:

 

 

 

Non-interest bearing

$

16,068

 

 

$

19,143

 

Interest bearing

 

556,579

 

 

 

295,714

 

Cash and cash equivalents

 

572,647

 

 

 

314,857

 

Investment securities (including securities recorded at fair value of $9,745,327 and $10,054,198)

 

9,755,327

 

 

 

10,064,198

 

Non-marketable equity securities

 

294,172

 

 

 

135,859

 

Loans

 

24,885,988

 

 

 

23,765,053

 

Allowance for credit losses

 

(147,946

)

 

 

(126,457

)

Loans, net

 

24,738,042

 

 

 

23,638,596

 

Bank owned life insurance

 

308,212

 

 

 

309,477

 

Operating lease equipment, net

 

539,799

 

 

 

640,726

 

Goodwill

 

77,637

 

 

 

77,637

 

Other assets

 

740,876

 

 

 

634,046

 

Total assets

$

37,026,712

 

 

$

35,815,396

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Liabilities:

 

 

 

Demand deposits:

 

 

 

Non-interest bearing

$

8,037,848

 

 

$

8,975,621

 

Interest bearing

 

2,142,067

 

 

 

3,709,493

 

Savings and money market

 

13,061,341

 

 

 

13,368,745

 

Time

 

4,268,078

 

 

 

3,384,243

 

Total deposits

 

27,509,334

 

 

 

29,438,102

 

Federal funds purchased

 

190,000

 

 

 

199,000

 

FHLB advances

 

5,420,000

 

 

 

1,905,000

 

Notes and other borrowings

 

720,923

 

 

 

721,416

 

Other liabilities

 

750,474

 

 

 

514,117

 

Total liabilities

 

34,590,731

 

 

 

32,777,635

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 75,674,587 and 85,647,986 shares issued and outstanding

 

757

 

 

 

856

 

Paid-in capital

 

321,729

 

 

 

707,503

 

Retained earnings

 

2,551,400

 

 

 

2,345,342

 

Accumulated other comprehensive loss

 

(437,905

)

 

 

(15,940

)

Total stockholders' equity

 

2,435,981

 

 

 

3,037,761

 

Total liabilities and stockholders' equity

$

37,026,712

 

 

$

35,815,396

 

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

 

 

Three Months Ended

 

Years Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

2022

 

2022

 

2021

 

2022

 

2021

Interest income:

 

 

 

 

 

 

 

 

 

Loans

$

288,973

 

 

$

244,884

 

 

$

198,275

 

 

$

934,642

 

 

$

800,819

 

Investment securities

 

105,172

 

 

 

77,109

 

 

 

38,201

 

 

 

280,100

 

 

 

152,619

 

Other

 

7,345

 

 

 

4,031

 

 

 

1,397

 

 

 

15,709

 

 

 

6,010

 

Total interest income

 

401,490

 

 

 

326,024

 

 

 

237,873

 

 

 

1,230,451

 

 

 

959,448

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

94,403

 

 

 

53,206

 

 

 

13,631

 

 

 

179,972

 

 

 

67,596

 

Borrowings

 

64,021

 

 

 

36,982

 

 

 

18,227

 

 

 

137,519

 

 

 

96,164

 

Total interest expense

 

158,424

 

 

 

90,188

 

 

 

31,858

 

 

 

317,491

 

 

 

163,760

 

Net interest income before provision for credit losses

 

243,066

 

 

 

235,836

 

 

 

206,015

 

 

 

912,960

 

 

 

795,688

 

Provision for (recovery of) credit losses

 

39,608

 

 

 

3,720

 

 

 

246

 

 

 

75,154

 

 

 

(67,119

)

Net interest income after provision for credit losses

 

203,458

 

 

 

232,116

 

 

 

205,769

 

 

 

837,806

 

 

 

862,807

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Deposit service charges and fees

 

5,482

 

 

 

6,064

 

 

 

5,815

 

 

 

23,402

 

 

 

21,685

 

Gain (loss) on sale of loans, net

 

(335

)

 

 

(613

)

 

 

19,003

 

 

 

(2,570

)

 

 

24,394

 

Gain (loss) on investment securities, net

 

320

 

 

 

135

 

 

 

590

 

 

 

(15,805

)

 

 

6,446

 

Lease financing

 

14,153

 

 

 

13,180

 

 

 

14,041

 

 

 

54,111

 

 

 

53,263

 

Other non-interest income

 

7,193

 

 

 

4,306

 

 

 

6,173

 

 

 

18,498

 

 

 

28,365

 

Total non-interest income

 

26,813

 

 

 

23,072

 

 

 

45,622

 

 

 

77,636

 

 

 

134,153

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

69,902

 

 

 

66,097

 

 

 

70,561

 

 

 

265,548

 

 

 

243,532

 

Occupancy and equipment

 

10,770

 

 

 

11,719

 

 

 

12,817

 

 

 

45,400

 

 

 

47,944

 

Deposit insurance expense

 

6,205

 

 

 

4,398

 

 

 

3,471

 

 

 

17,999

 

 

 

18,695

 

Professional fees

 

3,028

 

 

 

3,184

 

 

 

8,023

 

 

 

11,730

 

 

 

14,386

 

Technology

 

22,388

 

 

 

19,813

 

 

 

18,221

 

 

 

77,103

 

 

 

67,500

 

Discontinuance of cash flow hedges

 

 

 

 

 

 

 

44,833

 

 

 

 

 

 

44,833

 

Depreciation and impairment of operating lease equipment

 

12,547

 

 

 

12,646

 

 

 

15,769

 

 

 

50,388

 

 

 

53,764

 

Other non-interest expense

 

23,639

 

 

 

20,248

 

 

 

14,165

 

 

 

72,142

 

 

 

56,921

 

Total non-interest expense

 

148,479

 

 

 

138,105

 

 

 

187,860

 

 

 

540,310

 

 

 

547,575

 

Income before income taxes

 

81,792

 

 

 

117,083

 

 

 

63,531

 

 

 

375,132

 

 

 

449,385

 

Provision (benefit) for income taxes

 

17,585

 

 

 

29,233

 

 

 

(61,724

)

 

 

90,161

 

 

 

34,401

 

Net income

$

64,207

 

 

$

87,850

 

 

$

125,255

 

 

$

284,971

 

 

$

414,984

 

Earnings per common share, basic

$

0.83

 

 

$

1.13

 

 

$

1.42

 

 

$

3.55

 

 

$

4.52

 

Earnings per common share, diluted

$

0.82

 

 

$

1.12

 

 

$

1.41

 

 

$

3.54

 

 

$

4.52

 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

Three Months Ended

December 31,

2022

 

Three Months Ended

September 30,

2022

 

Three Months Ended

December 31,

2021

 

 

 

 

Average

Balance

 

Interest (1)

 

Yield/

Rate

(1)(2)

 

Average

Balance

 

Interest

(1)

 

Yield/

Rate

(1)(2)

 

Average

Balance

 

Interest (1)

 

Yield/

Rate

(1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

24,624,062

 

 

$

292,272

 

4.72

%

 

$

24,053,742

 

 

$

248,168

 

4.11

%

 

$

22,919,535

 

 

$

201,345

 

3.50

%

Investment securities (3)

 

9,788,969

 

 

 

106,034

 

4.33

%

 

 

9,981,486

 

 

 

77,840

 

3.12

%

 

 

10,113,026

 

 

 

38,889

 

1.54

%

Other interest earning assets

 

710,315

 

 

 

7,345

 

4.10

%

 

 

596,879

 

 

 

4,031

 

2.68

%

 

 

1,184,056

 

 

 

1,397

 

0.47

%

Total interest earning assets

 

35,123,346

 

 

 

405,651

 

4.60

%

 

 

34,632,107

 

 

 

330,039

 

3.80

%

 

 

34,216,617

 

 

 

241,631

 

2.81

%

Allowance for credit losses

 

(137,300

)

 

 

 

 

 

 

(133,828

)

 

 

 

 

 

 

(149,319

)

 

 

 

 

Non-interest earning assets

 

1,837,156

 

 

 

 

 

 

 

1,703,371

 

 

 

 

 

 

 

1,767,850

 

 

 

 

 

Total assets

$

36,823,202

 

 

 

 

 

 

$

36,201,650

 

 

 

 

 

 

$

35,835,148

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

2,183,854

 

 

$

6,704

 

1.22

%

 

$

2,306,906

 

 

$

4,104

 

0.71

%

 

$

3,058,355

 

 

$

1,481

 

0.19

%

Savings and money market deposits

 

12,054,892

 

 

 

68,001

 

2.24

%

 

 

13,001,566

 

 

 

39,838

 

1.22

%

 

 

13,460,084

 

 

 

9,619

 

0.28

%

Time deposits

 

3,960,111

 

 

 

19,698

 

1.97

%

 

 

3,255,869

 

 

 

9,264

 

1.13

%

 

 

3,399,302

 

 

 

2,531

 

0.30

%

Total interest bearing deposits

 

18,198,857

 

 

 

94,403

 

2.06

%

 

 

18,564,341

 

 

 

53,206

 

1.14

%

 

 

19,917,741

 

 

 

13,631

 

0.27

%

Federal funds purchased

 

175,637

 

 

 

1,677

 

3.74

%

 

 

153,905

 

 

 

833

 

2.12

%

 

 

56,793

 

 

 

13

 

0.09

%

FHLB advances

 

6,125,435

 

 

 

53,084

 

3.44

%

 

 

4,739,457

 

 

 

26,890

 

2.25

%

 

 

1,909,450

 

 

 

8,957

 

1.86

%

Notes and other borrowings

 

721,044

 

 

 

9,260

 

5.14

%

 

 

721,164

 

 

 

9,259

 

5.14

%

 

 

721,525

 

 

 

9,257

 

5.13

%

Total interest bearing liabilities

 

25,220,973

 

 

 

158,424

 

2.49

%

 

 

24,178,867

 

 

 

90,188

 

1.48

%

 

 

22,605,509

 

 

 

31,858

 

0.56

%

Non-interest bearing demand deposits

 

8,237,885

 

 

 

 

 

 

 

8,749,794

 

 

 

 

 

 

 

9,330,805

 

 

 

 

 

Other non-interest bearing liabilities

 

879,207

 

 

 

 

 

 

 

697,440

 

 

 

 

 

 

 

785,254

 

 

 

 

 

Total liabilities

 

34,338,065

 

 

 

 

 

 

 

33,626,101

 

 

 

 

 

 

 

32,721,568

 

 

 

 

 

Stockholders' equity

 

2,485,137

 

 

 

 

 

 

 

2,575,549

 

 

 

 

 

 

 

3,113,580

 

 

 

 

 

Total liabilities and stockholders' equity

$

36,823,202

 

 

 

 

 

 

$

36,201,650

 

 

 

 

 

 

$

35,835,148

 

 

 

 

 

Net interest income

 

 

$

247,227

 

 

 

 

 

$

239,851

 

 

 

 

 

$

209,773

 

 

Interest rate spread

 

 

 

 

2.11

%

 

 

 

 

 

2.32

%

 

 

 

 

 

2.25

%

Net interest margin

 

 

 

 

2.81

%

 

 

 

 

 

2.76

%

 

 

 

 

 

2.44

%

_______________

(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)

 

 

Years Ended December 31,

 

2022

 

2021

 

Average

Balance

 

Interest (1)

 

Yield/

Rate (1)

 

Average

Balance

 

Interest (1)

 

Yield/

Rate (1)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans

$

23,937,857

 

 

$

947,386

 

3.96

%

 

$

23,083,973

 

 

$

814,101

 

3.53

%

Investment securities (2)

 

10,081,701

 

 

 

283,081

 

2.81

%

 

 

9,873,178

 

 

 

155,353

 

1.57

%

Other interest earning assets

 

675,068

 

 

 

15,709

 

2.33

%

 

 

1,093,869

 

 

 

6,010

 

0.55

%

Total interest earning assets

 

34,694,626

 

 

 

1,246,176

 

3.59

%

 

 

34,051,020

 

 

 

975,464

 

2.86

%

Allowance for credit losses

 

(132,033

)

 

 

 

 

 

 

(197,212

)

 

 

 

 

Non-interest earning assets

 

1,721,570

 

 

 

 

 

 

 

1,770,685

 

 

 

 

 

Total assets

$

36,284,163

 

 

 

 

 

 

$

35,624,493

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

2,538,906

 

 

 

13,919

 

0.55

%

 

$

3,027,649

 

 

 

8,550

 

0.28

%

Savings and money market deposits

 

12,874,240

 

 

 

130,705

 

1.02

%

 

 

13,339,651

 

 

 

43,082

 

0.32

%

Time deposits

 

3,338,671

 

 

 

35,348

 

1.06

%

 

 

3,490,082

 

 

 

15,964

 

0.46

%

Total interest bearing deposits

 

18,751,817

 

 

 

179,972

 

0.96

%

 

 

19,857,382

 

 

 

67,596

 

0.34

%

Federal funds purchased

 

157,979

 

 

 

2,723

 

1.72

%

 

 

33,945

 

 

 

30

 

0.09

%

FHLB advances

 

4,383,507

 

 

 

97,763

 

2.23

%

 

 

2,622,723

 

 

 

59,116

 

2.25

%

Notes and other borrowings

 

721,223

 

 

 

37,033

 

5.13

%

 

 

721,803

 

 

 

37,018

 

5.13

%

Total interest bearing liabilities

 

24,014,526

 

 

 

317,491

 

1.32

%

 

 

23,235,853

 

 

 

163,760

 

0.70

%

Non-interest bearing demand deposits

 

8,861,111

 

 

 

 

 

 

 

8,480,964

 

 

 

 

 

Other non-interest bearing liabilities

 

708,473

 

 

 

 

 

 

 

784,031

 

 

 

 

 

Total liabilities

 

33,584,110

 

 

 

 

 

 

 

32,500,848

 

 

 

 

 

Stockholders' equity

 

2,700,053

 

 

 

 

 

 

 

3,123,645

 

 

 

 

 

Total liabilities and stockholders' equity

$

36,284,163

 

 

 

 

 

 

$

35,624,493

 

 

 

 

 

Net interest income

 

 

$

928,685

 

 

 

 

 

$

811,704

 

 

Interest rate spread

 

 

 

 

2.27

%

 

 

 

 

 

2.16

%

Net interest margin

 

 

 

 

2.68

%

 

 

 

 

 

2.38

%

_______________

(1)

On a tax-equivalent basis where applicable

(2)

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

December 31,

 

Years Ended

December 31,

2022

 

2021

 

2022

 

2021

Basic earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income

$

64,207

 

 

$

125,255

 

 

$

284,971

 

 

$

414,984

 

Distributed and undistributed earnings allocated to participating securities

 

(1,519

)

 

 

(2,059

)

 

 

(5,075

)

 

 

(5,991

)

Income allocated to common stockholders for basic earnings per common share

$

62,688

 

 

$

123,196

 

 

$

279,896

 

 

$

408,993

 

Denominator:

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

77,043,587

 

 

 

88,123,835

 

 

 

80,032,356

 

 

 

91,612,243

 

Less average unvested stock awards

 

(1,207,275

)

 

 

(1,193,180

)

 

 

(1,224,568

)

 

 

(1,212,055

)

Weighted average shares for basic earnings per common share

 

75,836,312

 

 

 

86,930,655

 

 

 

78,807,788

 

 

 

90,400,188

 

Basic earnings per common share

$

0.83

 

 

$

1.42

 

 

$

3.55

 

 

$

4.52

 

Diluted earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Income allocated to common stockholders for basic earnings per common share

$

62,688

 

 

$

123,196

 

 

$

279,896

 

 

$

408,993

 

Adjustment for earnings reallocated from participating securities

 

(184

)

 

 

(234

)

 

 

(626

)

 

 

(585

)

Income used in calculating diluted earnings per common share

$

62,504

 

 

$

122,962

 

 

$

279,270

 

 

$

408,408

 

Denominator:

 

 

 

 

 

 

 

Weighted average shares for basic earnings per common share

 

75,836,312

 

 

 

86,930,655

 

 

 

78,807,788

 

 

 

90,400,188

 

Dilutive effect of certain share-based awards

 

127

 

 

 

 

 

 

94

 

 

 

134

 

Weighted average shares for diluted earnings per common share

 

75,836,439

 

 

 

86,930,655

 

 

 

78,807,882

 

 

 

90,400,322

 

Diluted earnings per common share

$

0.82

 

 

$

1.41

 

 

$

3.54

 

 

$

4.52

 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 

 

Three Months Ended

December 31,

 

Years Ended

December 31,

 

2022

 

2021

 

2022

 

2021

Financial ratios (4)

 

 

 

 

 

 

 

Return on average assets

0.69

%

 

1.39

%

 

0.79

%

 

1.16

%

Return on average stockholders’ equity

10.3

%

 

16.0

%

 

10.6

%

 

13.3

%

Net interest margin (3)

2.81

%

 

2.44

%

 

2.68

%

 

2.38

%

 

December 31, 2022

 

December 31, 2021

Asset quality ratios

 

 

 

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

0.42

%

 

0.87

%

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

0.29

%

 

0.58

%

Allowance for credit losses to total loans

0.59

%

 

0.53

%

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

140.88

%

 

61.41

%

Net charge-offs to average loans

0.22

%

 

0.29

%

_______________

(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 month periods.

(5)

Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022 and $46.1 million or 0.19% of total loans and 0.13% of total assets at December 31, 2021.

 

December 31, 2022

 

December 31, 2021

 

Required to be

Considered Well

Capitalized

 

BankUnited, Inc.

 

BankUnited, N.A.

 

BankUnited, Inc.

 

BankUnited, N.A.

 

Capital ratios

 

 

 

 

 

 

 

 

 

Tier 1 leverage

7.5

%

 

8.4

%

 

8.4

%

 

9.6

%

 

5.0

%

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

11.0

%

 

12.4

%

 

12.6

%

 

14.5

%

 

6.5

%

Total risk-based capital

12.7

%

 

12.9

%

 

14.3

%

 

14.9

%

 

10.0

%

Non-GAAP Financial Measures

PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses, particularly in view of recent volatility of the provision for credit losses. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following table reconciles the non-GAAP financial measure of PPNR to the comparable GAAP financial measurement of income before income taxes at the dates indicated (in thousands):

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

Income before income taxes (GAAP)

$

81,792

 

$

117,083

 

$

63,531

Plus: provision for credit losses

 

39,608

 

 

3,720

 

 

246

PPNR (non-GAAP)

$

121,400

 

$

120,803

 

$

63,777

 

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