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BankUnited, Inc. Reports Third Quarter 2023 Results

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

"This quarter we made significant progress on key strategic priorities. Margin, the funding mix, asset mix, capital and liquidity all improved, while continuing to prepare for a possible economic slowdown," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended September 30, 2023, the Company reported net income of $47.0 million, or $0.63 per diluted share, compared to $58.0 million, or $0.78 per diluted share for the immediately preceding quarter ended June 30, 2023 and $87.9 million, or $1.12 per diluted share, for the quarter ended September 30, 2022. Earnings for the quarter ended September 30, 2023 were impacted by an increase in the provision for credit losses, the most significant driver of which was the impact of a less favorable economic forecast, while annualized net charge-offs remained low at 0.07%. For the nine months ended September 30, 2023, the Company reported net income of $157.9 million or $2.11 per diluted share compared to $220.8 million or $2.71 per diluted share for the nine months ended September 30, 2022.

Quarterly Highlights

  • We gained momentum executing on near-term strategic priorities this quarter:



    • The net interest margin, calculated on a tax-equivalent basis, expanded this quarter to 2.56% from 2.47% for the immediately preceding quarter.



    • Non-brokered deposits grew by $484 million for the quarter ended September 30, 2023. Total deposits grew by $274 million.



    • Non-interest bearing deposits grew by $52 million for the quarter, remaining consistent at 28% of total deposits at both September 30, 2023 and June 30, 2023.



    • Residential loans declined by $225 million and securities declined by $257 million for the quarter, while our core C&I and commercial real estate portfolios grew by a net $147 million.



    • FHLB advances declined by $810 million for the quarter, as consistent with our strategy to re-position the balance sheet, cash flows from the residential and securities portfolios were used to pay down wholesale funding.



    • The loans to deposits ratio declined to 93.3% at September 30, 2023, from 95.3% at June 30, 2023.



    • We have maintained ample liquidity. Total same day available liquidity was $14.4 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 161% and an estimated 66% of our deposits were insured or collateralized at September 30, 2023.



    • Our capital position remains robust. At September 30, 2023, CET1 increased to 11.4% at the holding company and 13.2% at the Bank. Pro-forma CET1 at the holding company and the Bank, including accumulated other comprehensive income, were 9.8% and 11.5%, respectively at September 30, 2023.



  • For the quarter ended September 30, 2023, the provision for credit losses was $33.0 million. The ratio of the ACL to total loans increased to 0.80%, at September 30, 2023 from 0.68% at June 30, 2023. The largest driver of the provision for credit losses and increase in the ACL for the quarter was a less favorable economic forecast.



  • The annualized net charge-off ratio for the nine months ended September 30, 2023 was 0.07%. NPAs remained low, totaling $140.5 million at September 30, 2023 compared to $120.8 million at June 30, 2023. Most of the increase was in the franchise finance portfolio. The NPA ratio at September 30, 2023 was 0.40%, including 0.11% related to the guaranteed portion of non-performing SBA loans. At June 30, 2023 the NPA ratio was 0.34%, including 0.10% related to the guaranteed portion of non-performing SBA loans.



  • Total loans declined by $274 million quarter-over-quarter. As expected, most of the decline was attributable to residential which was down by $225 million.



  • Consistent with industry trends, rising interest rates and restrictive monetary policy contributed to an increase in the average cost of total deposits to 2.74% for the quarter ended September 30, 2023 from 2.46% for the immediately preceding quarter. This increase of 0.28% was smaller than the 0.41% increase in the cost of deposits for the quarter ended June 30, 2023, continuing the trend of a declining rate of increase in deposit costs. The yield on average interest earning assets increased to 5.52% for the quarter ended September 30, 2023 from 5.30% for the immediately preceding quarter.



  • Commercial real estate exposure is modest. Commercial real estate loans totaled 23.5% of loans at September 30, 2023, representing 168% of the Bank's total risk based capital. At September 30, 2023, the weighted average LTV of the CRE portfolio was 55.8% and the weighted average DSCR was 1.80. 58% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area.



  • We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 2.02 at September 30, 2023. Held to maturity securities were not significant.



  • Book value and tangible book value per common share were $33.92 and $32.88, respectively, at September 30, 2023, compared to $33.94 and $32.90, respectively at June 30, 2023.



  • In October 2023, BankUnited was named #1 on the list of the healthiest 100 workplaces in America published by Healthiest Employers/Springbuk, highlighting our commitment to employee wellness initiatives and programs.

Deposits and Funding

Total deposits grew by $274 million during the quarter ended September 30, 2023. Non-interest bearing demand deposits grew by $52 million, interest-bearing non-maturity deposits grew by $552 million and time deposits declined by $330 million.

Consistent with the current interest rate environment and restrictive monetary policy, the cost of total deposits increased to 2.74% from 2.46% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 3.76% for the quarter ended September 30, 2023 from 3.39% for the preceding quarter.

FHLB advances declined by $810 million for the quarter, as we used cash flows from 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):

 

September 30, 2023

 

June 30, 2023

 

December 31, 2022

Residential

$

8,380,568

 

34.4

%

 

$

8,605,838

 

34.9

%

 

$

8,900,714

 

35.7

%

Non-owner occupied commercial real estate

 

5,296,784

 

21.7

%

 

 

5,302,523

 

21.5

%

 

 

5,405,597

 

21.7

%

Construction and land

 

445,273

 

1.8

%

 

 

393,464

 

1.6

%

 

 

294,360

 

1.2

%

Owner occupied commercial real estate

 

1,851,246

 

7.6

%

 

 

1,832,586

 

7.4

%

 

 

1,890,813

 

7.6

%

Commercial and industrial

 

6,658,010

 

27.4

%

 

 

6,575,368

 

26.8

%

 

 

6,417,721

 

25.9

%

Pinnacle - municipal finance

 

900,199

 

3.7

%

 

 

951,529

 

3.9

%

 

 

912,122

 

3.7

%

Franchise finance

 

196,745

 

0.8

%

 

 

207,783

 

0.8

%

 

 

253,774

 

1.0

%

Equipment finance

 

219,874

 

0.9

%

 

 

237,816

 

1.0

%

 

 

286,147

 

1.1

%

Mortgage warehouse lending ("MWL")

 

407,577

 

1.7

%

 

 

523,083

 

2.1

%

 

 

524,740

 

2.1

%

 

$

24,356,276

 

100.0

%

 

$

24,629,990

 

100.0

%

 

$

24,885,988

 

100.0

%

Consistent with our balance sheet strategy, for the quarter ended September 30, 2023, residential loans declined by $225 million while C&I grew by $101 million and CRE grew by $46 million. Franchise and equipment finance declined by $29 million in aggregate, MWL declined by $116 million, primarily due to low levels of activity in the residential real estate sector, and municipal finance declined by $51 million. As we continue to emphasize high quality relationship based lending, we chose to exit approximately $297 million of commercial loans during the quarter due to lower profitability, the lack of deposit relationships or, in some cases, to take advantage of opportunities to reduce criticized and classified assets.

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

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

 

ACL

 

ACL to Total Loans

 

ACL to Non-Performing Loans

 

Net Charge-offs to Average Loans (1)

December 31, 2022

$

147,946

 

0.59

%

 

140.88

%

 

0.22

%

June 30, 2023

$

166,833

 

0.68

%

 

140.52

%

 

0.09

%

September 30, 2023

$

196,063

 

0.80

%

 

143.22

%

 

0.07

%

______________________

(1)

Annualized for the six months ended June 30, 2023 and the nine months ended September 30, 2023.

The ACL at September 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 September 30, 2023, the provision for credit losses was $33.0 million, including $30.9 million related to funded loans. The most significant factor impacting the provision for credit losses and increase in the ACL for the quarter ended September 30, 2023 was the impact on quantitative modeling of a less favorable economic forecast. Changes in portfolio composition as well as risk rating migration and increases in certain specific reserves also had an impact.

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

 

Three Months Ended

 

Nine Months Ended

 

September 30, 2023

 

June 30, 2023

 

September 30, 2022

 

September 30, 2023

 

September 30, 2022

Beginning balance

$

166,833

 

 

$

158,792

 

 

$

130,239

 

 

$

147,946

 

 

$

126,457

 

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

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

(1,794

)

 

 

N/A

 

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

 

166,833

 

 

 

158,792

 

 

 

130,239

 

 

 

146,152

 

 

 

126,457

 

Provision

 

30,877

 

 

 

14,195

 

 

 

2,753

 

 

 

62,667

 

 

 

33,406

 

Net charge-offs

 

(1,647

)

 

 

(6,154

)

 

 

(2,321

)

 

 

(12,756

)

 

 

(29,192

)

Ending balance

$

196,063

 

 

$

166,833

 

 

$

130,671

 

 

$

196,063

 

 

$

130,671

 

Non-performing loans totaled $136.9 million or 0.56% of total loans at September 30, 2023, compared to $118.7 million or 0.48% of total loans at June 30, 2023. Non-performing loans included $37.8 million and $35.9 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.16% and 0.15% of total loans at September 30, 2023 and June 30, 2023, respectively.

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

 

September 30, 2023

 

June 30, 2023

 

December 31, 2022

Special mention

$

341,999

 

$

233,004

 

$

51,433

Substandard - accruing

 

534,336

 

 

525,643

 

 

605,965

Substandard - non-accruing

 

96,248

 

 

80,642

 

 

75,125

Doubtful

 

19,344

 

 

14,954

 

 

7,990

Total

$

991,927

 

$

854,243

 

$

740,513

Net Interest Income

Net interest income for the quarter ended September 30, 2023 was $214.8 million, compared to $213.9 million for the immediately preceding quarter ended June 30, 2023 and $235.8 million for the quarter ended September 30, 2022. Interest income increased by $7.1 million for the quarter ended September 30, 2023 compared to the immediately preceding quarter while interest expense increased by $6.2 million.

The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.09% to 2.56% for the quarter ended September 30, 2023, from 2.47% for the immediately preceding quarter ended June 30, 2023. Factors impacting the net interest margin for the quarter ended September 30, 2023 were:

  • The tax-equivalent yield on loans increased to 5.54% for the quarter ended September 30, 2023, from 5.35% for the quarter ended June 30, 2023. The resetting of variable rate loans to higher coupon rates, paydown of lower rate residential loans and origination of new loans at higher rates contributed to the increase.
  • The tax-equivalent yield on investment securities increased to 5.48% for the quarter ended September 30, 2023, from 5.19% for the quarter ended June 30, 2023. This increase resulted primarily from the reset of coupon rates on variable rate securities.
  • The average cost of interest bearing deposits increased to 3.76% for the quarter ended September 30, 2023 from 3.39% for the quarter ended June 30, 2023, in response to the interest rate environment.
  • The average rate paid on FHLB advances decreased to 4.57% for the quarter ended September 30, 2023, from 4.59% for the quarter ended June 30, 2023, primarily due to repayment of higher rate advances.
  • The reduction in the proportion of total funding comprised of more expensive wholesale funding also contributed to the increase in the net interest margin.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, October 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/BI8dd0dafa7e284086a3d06fd4752fdebf. 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 $35.4 billion at September 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, the 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 limitation) 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 but not limited to adverse events or conditions 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)

 

 

September 30,

2023

 

June 30,

2023

 

December 31,

2022

ASSETS

 

 

 

 

 

Cash and due from banks:

 

 

 

 

 

Non-interest bearing

$

12,391

 

 

$

18,355

 

 

$

16,068

 

Interest bearing

 

379,494

 

 

 

282,814

 

 

 

556,579

 

Cash and cash equivalents

 

391,885

 

 

 

301,169

 

 

 

572,647

 

Investment securities (including securities reported at fair value of $8,876,484, $9,133,937 and $9,745,327)

 

8,886,484

 

 

 

9,143,937

 

 

 

9,755,327

 

Non-marketable equity securities

 

312,159

 

 

 

317,759

 

 

 

294,172

 

Loans

 

24,356,276

 

 

 

24,629,990

 

 

 

24,885,988

 

Allowance for credit losses

 

(196,063

)

 

 

(166,833

)

 

 

(147,946

)

Loans, net

 

24,160,213

 

 

 

24,463,157

 

 

 

24,738,042

 

Bank owned life insurance

 

319,808

 

 

 

318,935

 

 

 

308,212

 

Operating lease equipment, net

 

460,146

 

 

 

514,734

 

 

 

539,799

 

Goodwill

 

77,637

 

 

 

77,637

 

 

 

77,637

 

Other assets

 

781,332

 

 

 

734,151

 

 

 

740,876

 

Total assets

$

35,389,664

 

 

$

35,871,479

 

 

$

37,026,712

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Liabilities:

 

 

 

 

 

Demand deposits:

 

 

 

 

 

Non-interest bearing

$

7,356,523

 

 

$

7,304,735

 

 

$

8,037,848

 

Interest bearing

 

3,290,391

 

 

 

2,929,870

 

 

 

2,142,067

 

Savings and money market

 

10,276,071

 

 

 

10,084,276

 

 

 

13,061,341

 

Time

 

5,189,681

 

 

 

5,519,771

 

 

 

4,268,078

 

Total deposits

 

26,112,666

 

 

 

25,838,652

 

 

 

27,509,334

 

Federal funds purchased

 

 

 

 

 

 

 

190,000

 

FHLB advances

 

5,165,000

 

 

 

5,975,000

 

 

 

5,420,000

 

Notes and other borrowings

 

715,197

 

 

 

715,302

 

 

 

720,923

 

Other liabilities

 

872,731

 

 

 

816,215

 

 

 

750,474

 

Total liabilities

 

32,865,594

 

 

 

33,345,169

 

 

 

34,590,731

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,413,059, 74,429,948 and 75,674,587 shares issued and outstanding

 

744

 

 

 

744

 

 

 

757

 

Paid-in capital

 

279,672

 

 

 

274,202

 

 

 

321,729

 

Retained earnings

 

2,650,850

 

 

 

2,623,926

 

 

 

2,551,400

 

Accumulated other comprehensive loss

 

(407,196

)

 

 

(372,562

)

 

 

(437,905

)

Total stockholders' equity

 

2,524,070

 

 

 

2,526,310

 

 

 

2,435,981

 

Total liabilities and stockholders' equity

$

35,389,664

 

 

$

35,871,479

 

 

$

37,026,712

 

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

 

2022

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans

$

337,014

 

$

326,153

 

$

244,884

 

$

971,962

 

 

$

645,669

 

Investment securities

 

122,857

 

 

120,604

 

 

77,109

 

 

362,219

 

 

 

174,928

 

Other

 

10,668

 

 

16,664

 

 

4,031

 

 

40,195

 

 

 

8,364

 

Total interest income

 

470,539

 

 

463,421

 

 

326,024

 

 

1,374,376

 

 

 

828,961

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

176,974

 

 

156,868

 

 

53,206

 

 

467,472

 

 

 

85,569

 

Borrowings

 

78,723

 

 

92,675

 

 

36,982

 

 

250,310

 

 

 

73,498

 

Total interest expense

 

255,697

 

 

249,543

 

 

90,188

 

 

717,782

 

 

 

159,067

 

Net interest income before provision for credit losses

 

214,842

 

 

213,878

 

 

235,836

 

 

656,594

 

 

 

669,894

 

Provision for credit losses

 

33,049

 

 

15,517

 

 

3,720

 

 

68,354

 

 

 

35,546

 

Net interest income after provision for credit losses

 

181,793

 

 

198,361

 

 

232,116

 

 

588,240

 

 

 

634,348

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Deposit service charges and fees

 

5,402

 

 

5,349

 

 

6,064

 

 

16,296

 

 

 

17,920

 

Gain (loss) on investment securities, net

 

887

 

 

993

 

 

135

 

 

(10,669

)

 

 

(16,125

)

Lease financing

 

16,531

 

 

12,519

 

 

13,180

 

 

42,159

 

 

 

39,958

 

Other non-interest income

 

4,904

 

 

6,626

 

 

3,693

 

 

21,960

 

 

 

9,070

 

Total non-interest income

 

27,724

 

 

25,487

 

 

23,072

 

 

69,746

 

 

 

50,823

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

68,825

 

 

67,414

 

 

66,097

 

 

207,290

 

 

 

195,646

 

Occupancy and equipment

 

10,890

 

 

11,043

 

 

11,719

 

 

32,735

 

 

 

34,630

 

Deposit insurance expense

 

7,790

 

 

7,597

 

 

4,398

 

 

23,294

 

 

 

11,794

 

Professional fees

 

2,696

 

 

3,518

 

 

3,184

 

 

9,132

 

 

 

8,702

 

Technology

 

19,193

 

 

20,437

 

 

19,813

 

 

61,356

 

 

 

54,715

 

Depreciation of operating lease equipment

 

11,217

 

 

11,232

 

 

12,646

 

 

33,970

 

 

 

37,841

 

Other non-interest expense

 

26,479

 

 

23,977

 

 

20,248

 

 

77,311

 

 

 

48,503

 

Total non-interest expense

 

147,090

 

 

145,218

 

 

138,105

 

 

445,088

 

 

 

391,831

 

Income before income taxes

 

62,427

 

 

78,630

 

 

117,083

 

 

212,898

 

 

 

293,340

 

Provision for income taxes

 

15,446

 

 

20,634

 

 

29,233

 

 

55,039

 

 

 

72,576

 

Net income

$

46,981

 

$

57,996

 

$

87,850

 

$

157,859

 

 

$

220,764

 

Earnings per common share, basic

$

0.63

 

$

0.78

 

$

1.13

 

$

2.12

 

 

$

2.73

 

Earnings per common share, diluted

$

0.63

 

$

0.78

 

$

1.12

 

$

2.11

 

 

$

2.71

 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

Three Months Ended September 30,

 

Three Months Ended June 30,

 

Three Months Ended September 30,

 

2023

 

2023

 

2022

 

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

$

24,417,433

 

 

$

340,357

 

5.54

%

 

$

24,680,919

 

 

$

329,494

 

5.35

%

 

$

24,053,742

 

 

$

248,168

 

4.11

%

Investment securities (3)

 

9,034,116

 

 

 

123,794

 

5.48

%

 

 

9,369,019

 

 

 

121,520

 

5.19

%

 

 

9,981,486

 

 

 

77,840

 

3.12

%

Other interest earning assets

 

785,146

 

 

 

10,668

 

5.39

%

 

 

1,323,025

 

 

 

16,664

 

5.05

%

 

 

596,879

 

 

 

4,031

 

2.68

%

Total interest earning assets

 

34,236,695

 

 

 

474,819

 

5.52

%

 

 

35,372,963

 

 

 

467,678

 

5.30

%

 

 

34,632,107

 

 

 

330,039

 

3.80

%

Allowance for credit losses

 

(173,407

)

 

 

 

 

 

 

(162,463

)

 

 

 

 

 

 

(133,828

)

 

 

 

 

Non-interest earning assets

 

1,747,310

 

 

 

 

 

 

 

1,744,693

 

 

 

 

 

 

 

1,703,371

 

 

 

 

 

Total assets

$

35,810,598

 

 

 

 

 

 

$

36,955,193

 

 

 

 

 

 

$

36,201,650

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

3,038,870

 

 

$

25,491

 

3.33

%

 

$

2,772,839

 

 

$

18,417

 

2.66

%

 

$

2,306,906

 

 

$

4,104

 

0.71

%

Savings and money market deposits

 

10,205,765

 

 

 

97,956

 

3.81

%

 

 

10,285,494

 

 

 

88,892

 

3.47

%

 

 

13,001,566

 

 

 

39,838

 

1.22

%

Time deposits

 

5,420,522

 

 

 

53,527

 

3.92

%

 

 

5,494,631

 

 

 

49,559

 

3.62

%

 

 

3,255,869

 

 

 

9,264

 

1.13

%

Total interest bearing deposits

 

18,665,157

 

 

 

176,974

 

3.76

%

 

 

18,552,964

 

 

 

156,868

 

3.39

%

 

 

18,564,341

 

 

 

53,206

 

1.14

%

Federal funds purchased

 

 

 

 

 

%

 

 

 

 

 

 

%

 

 

153,905

 

 

 

833

 

2.12

%

FHLB advances

 

6,040,870

 

 

 

69,525

 

4.57

%

 

 

7,288,187

 

 

 

83,429

 

4.59

%

 

 

4,739,457

 

 

 

26,890

 

2.25

%

Notes and other borrowings

 

715,307

 

 

 

9,198

 

5.14

%

 

 

719,368

 

 

 

9,246

 

5.14

%

 

 

721,164

 

 

 

9,259

 

5.14

%

Total interest bearing liabilities

 

25,421,334

 

 

 

255,697

 

3.99

%

 

 

26,560,519

 

 

 

249,543

 

3.77

%

 

 

24,178,867

 

 

 

90,188

 

1.48

%

Non-interest bearing demand deposits

 

6,937,537

 

 

 

 

 

 

 

7,067,053

 

 

 

 

 

 

 

8,749,794

 

 

 

 

 

Other non-interest bearing liabilities

 

868,178

 

 

 

 

 

 

 

798,279

 

 

 

 

 

 

 

697,440

 

 

 

 

 

Total liabilities

 

33,227,049

 

 

 

 

 

 

 

34,425,851

 

 

 

 

 

 

 

33,626,101

 

 

 

 

 

Stockholders' equity

 

2,583,549

 

 

 

 

 

 

 

2,529,342

 

 

 

 

 

 

 

2,575,549

 

 

 

 

 

Total liabilities and stockholders' equity

$

35,810,598

 

 

 

 

 

 

$

36,955,193

 

 

 

 

 

 

$

36,201,650

 

 

 

 

 

Net interest income

 

 

$

219,122

 

 

 

 

 

$

218,135

 

 

 

 

 

$

239,851

 

 

Interest rate spread

 

 

 

 

1.53

%

 

 

 

 

 

1.53

%

 

 

 

 

 

2.32

%

Net interest margin

2.56

%

2.47

%

2.76

%

______________________

(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)

 

 

Nine Months Ended September 30,

 

2023

 

2022

 

Average

Balance

 

Interest (1)

 

Yield/

Rate (1)(2)

 

Average

Balance

 

Interest (1)

 

Yield/

Rate (1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans

$

24,606,425

 

 

$

981,976

 

5.33

%

 

$

23,706,606

 

 

$

655,114

 

3.69

%

Investment securities (3)

 

9,356,211

 

 

 

364,980

 

5.20

%

 

 

10,180,351

 

 

 

177,047

 

2.32

%

Other interest earning assets

 

1,048,313

 

 

 

40,195

 

5.13

%

 

 

663,189

 

 

 

8,364

 

1.69

%

Total interest earning assets

 

35,010,949

 

 

 

1,387,151

 

5.29

%

 

 

34,550,146

 

 

 

840,525

 

3.25

%

Allowance for credit losses

 

(162,395

)

 

 

 

 

 

 

(130,258

)

 

 

 

 

Non-interest earning assets

 

1,761,500

 

 

 

 

 

 

 

1,682,618

 

 

 

 

 

Total assets

$

36,610,054

 

 

 

 

 

 

$

36,102,506

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

2,728,287

 

 

$

54,781

 

2.68

%

 

$

2,658,558

 

 

$

7,215

 

0.36

%

Savings and money market deposits

 

10,844,838

 

 

 

278,243

 

3.43

%

 

 

13,150,357

 

 

 

62,704

 

0.64

%

Time deposits

 

5,150,486

 

 

 

134,448

 

3.49

%

 

 

3,129,247

 

 

 

15,650

 

0.67

%

Total interest bearing deposits

 

18,723,611

 

 

 

467,472

 

3.34

%

 

 

18,938,162

 

 

 

85,569

 

0.60

%

Federal funds purchased

 

47,334

 

 

 

1,611

 

4.54

%

 

 

152,028

 

 

 

1,046

 

0.92

%

FHLB advances

 

6,596,465

 

 

 

220,993

 

4.48

%

 

 

3,796,484

 

 

 

44,680

 

1.57

%

Notes and other borrowings

 

718,507

 

 

 

27,706

 

5.14

%

 

 

721,283

 

 

 

27,772

 

5.13

%

Total interest bearing liabilities

 

26,085,917

 

 

 

717,782

 

3.68

%

 

 

23,607,957

 

 

 

159,067

 

0.90

%

Non-interest bearing demand deposits

 

7,152,362

 

 

 

 

 

 

 

9,071,135

 

 

 

 

 

Other non-interest bearing liabilities

 

829,464

 

 

 

 

 

 

 

650,936

 

 

 

 

 

Total liabilities

 

34,067,743

 

 

 

 

 

 

 

33,330,028

 

 

 

 

 

Stockholders' equity

 

2,542,311

 

 

 

 

 

 

 

2,772,478

 

 

 

 

 

Total liabilities and stockholders' equity

$

36,610,054

 

 

 

 

 

 

$

36,102,506

 

 

 

 

 

Net interest income

 

 

$

669,369

 

 

 

 

 

$

681,458

 

 

Interest rate spread

 

 

 

 

1.61

%

 

 

 

 

 

2.35

%

Net interest margin

 

 

 

 

2.55

%

 

 

 

 

 

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

EARNINGS PER COMMON SHARE

(In thousands except share and per share amounts)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Basic earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income

$

46,981

 

 

$

87,850

 

 

$

157,859

 

 

$

220,764

 

Distributed and undistributed earnings allocated to participating securities

 

(700

)

 

 

(1,343

)

 

 

(2,378

)

 

 

(3,258

)

Income allocated to common stockholders for basic earnings per common share

$

46,281

 

 

$

86,507

 

 

$

155,481

 

 

$

217,506

 

Denominator:

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

74,416,698

 

 

 

77,912,320

 

 

 

74,530,871

 

 

 

81,039,561

 

Less average unvested stock awards

 

(1,165,105

)

 

 

(1,221,971

)

 

 

(1,180,570

)

 

 

(1,230,396

)

Weighted average shares for basic earnings per common share

 

73,251,593

 

 

 

76,690,349

 

 

 

73,350,301

 

 

 

79,809,165

 

Basic earnings per common share

$

0.63

 

 

$

1.13

 

 

$

2.12

 

 

$

2.73

 

Diluted earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Income allocated to common stockholders for basic earnings per common share

$

46,281

 

 

$

86,507

 

 

$

155,481

 

 

$

217,506

 

Adjustment for earnings reallocated from participating securities

 

3

 

 

 

6

 

 

 

8

 

 

 

9

 

Income used in calculating diluted earnings per common share

$

46,284

 

 

$

86,513

 

 

$

155,489

 

 

$

217,515

 

Denominator:

 

 

 

 

 

 

 

Weighted average shares for basic earnings per common share

 

73,251,593

 

 

 

76,690,349

 

 

 

73,350,301

 

 

 

79,809,165

 

Dilutive effect of certain share-based awards

 

537,230

 

 

 

433,472

 

 

 

388,372

 

 

 

308,608

 

Weighted average shares for diluted earnings per common share

 

73,788,823

 

 

 

77,123,821

 

 

 

73,738,673

 

 

 

80,117,773

 

Diluted earnings per common share

$

0.63

 

 

$

1.12

 

 

$

2.11

 

 

$

2.71

 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 

 

At or for the Three Months Ended

 

Nine Months Ended September 30,

 

September 30, 2023

 

June 30, 2023

 

September 30, 2022

 

2023

 

 

2022

 

Financial ratios (4)

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.52

%

 

 

0.63

%

 

 

0.96

%

 

0.58

%

 

0.82

%

Return on average stockholders’ equity

 

7.2

%

 

 

9.2

%

 

 

13.5

%

 

8.3

%

 

10.6

%

Net interest margin (3)

 

2.56

%

 

 

2.47

%

 

 

2.76

%

 

2.55

%

 

2.63

%

Loans to deposits

 

93.3

%

 

 

95.3

%

 

 

88.7

%

 

 

 

 

Tangible book value per common share

$

32.88

 

 

$

32.90

 

 

$

30.97

 

 

 

 

 

 

September 30, 2023

 

June 30, 2023

 

December 31, 2022

Asset quality ratios

 

 

 

 

 

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

0.56

%

 

0.48

%

 

0.42

%

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

0.40

%

 

0.34

%

 

0.29

%

Allowance for credit losses to total loans

0.80

%

 

0.68

%

 

0.59

%

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

143.22

%

 

140.52

%

 

140.88

%

Net charge-offs to average loans (4)

0.07

%

 

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 as applicable

(5)

Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $37.8 million or 0.16% of total loans and 0.11% of total assets at September 30, 2023, $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.

 

September 30, 2023

 

June 30, 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

7.9

%

 

9.1

%

 

7.6

%

 

8.8

%

 

7.5

%

 

8.4

%

 

5.0

%

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

11.4

%

 

13.2

%

 

11.2

%

 

13.0

%

 

11.0

%

 

12.4

%

 

6.5

%

Total risk-based capital

13.4

%

 

13.9

%

 

13.0

%

 

13.6

%

 

12.7

%

 

12.9

%

 

10.0

%

Tangible Common Equity/Tangible Assets

6.9

%

 

N/A

 

 

6.8

%

 

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):

 

September 30, 2023

 

June 30, 2023

 

September 30, 2022

Total stockholders’ equity

$

2,524,070

 

$

2,526,310

 

$

2,480,985

Less: goodwill and other intangible assets

 

77,637

 

 

77,637

 

 

77,637

Tangible stockholders’ equity

$

2,446,433

 

$

2,448,673

 

$

2,403,348

 

 

 

 

 

 

Common shares issued and outstanding

 

74,413,059

 

 

74,429,948

 

 

77,599,408

 

 

 

 

 

 

Book value per common share

$

33.92

 

$

33.94

 

$

31.97

 

 

 

 

 

 

Tangible book value per common share

$

32.88

 

$

32.90

 

$

30.97

 

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