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BankUnited, Inc. Reports Third Quarter 2022 Results

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended September 30, 2022.

"We are happy to announce a very strong earnings quarter with double digit growth in EPS. We're optimistic about the opportunities we see in front of us," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended September 30, 2022, the Company reported net income of $87.9 million, or $1.12 per diluted share, compared to $65.8 million, or $0.82 per diluted share for the immediately preceding quarter ended June 30, 2022 and $86.9 million, or $0.94 per diluted share, for the quarter ended September 30, 2021. Earnings for the quarter ended September 30, 2022 generated an annualized return on equity of 13.5%. For the nine months ended September 30, 2022, the Company reported net income of $220.8 million, or $2.71 per diluted share, compared to $289.7 million, or $3.12 per diluted share, for the nine months ended September 30, 2021. Earnings for the nine months ended September 30, 2021 were favorably impacted by a $67.4 million recovery of the provision for credit losses.

Quarterly Highlights

  • The net interest margin, calculated on a tax-equivalent basis, expanded to 2.76% for the quarter ended September 30, 2022 from 2.63% for the immediately preceding quarter and 2.33% for the quarter ended September 30, 2021. Net interest income increased by $10.4 million compared to the immediately preceding quarter ended June 30, 2022 and by $40.7 million compared to the quarter ended September 30, 2021.
  • In response to the rising interest rate environment, the average cost of total deposits increased to 0.78% for the quarter ended September 30, 2022, from 0.30% for the immediately preceding quarter ended June 30, 2022 and 0.20% for the quarter ended September 30, 2021. The yield on average interest earning assets increased to 3.80% for the quarter ended September 30, 2022 from 3.11% for the immediately preceding quarter and 2.79% for the quarter ended September 30, 2021.
  • For the quarter ended September 30, 2022, the Company recorded a provision for credit losses of $3.7 million compared to a provision of $24.0 million for the immediately preceding quarter ended June 30, 2022 and a recovery of the provision for credit losses of $(11.8) million for the quarter ended September 30, 2021. The ratio of the ACL to total loans was consistent with the prior quarter-end at 0.54%.
  • Loans, excluding the runoff of PPP loans, grew by $186 million for the quarter ended September 30, 2022. The core C&I and commercial real estate portfolio segments grew by a total of $444 million. As expected given the market-wide decline in mortgage origination activity, mortgage warehouse loans declined by $194 million.
  • Total deposits declined by $1.1 billion during the quarter ended September 30, 2022. Non-interest bearing demand deposits declined by $851 million to 32% of total deposits, from 34% of total deposits at June 30, 2022. Year to date, non-interest bearing demand deposits declined by $182 million. Time deposits grew by $976 million during the quarter ended September 30, 2022, reflecting a strategy to extend the term of deposits.
  • The positive trend in levels of criticized and classified loans continued during the quarter ended September 30, 2022, declining by $175 million; the annualized net charge-off ratio declined to 0.16% compared to 0.29% for the year ended December 31, 2021. The ratio of non-performing loans to total loans was 0.64% at September 30, 2022. The guaranteed portion of SBA loans on non-accrual status represented 0.17% of total loans and 27% of non-performing loans at September 30, 2022.
  • On October 5, 2022, BankUnited was named #3 on the list of the healthiest 100 workplaces in America published by Healthiest Employers, highlighting our commitment to employee wellness initiatives and programs.
  • Hurricane Ian made landfall on the southwest Florida coast on September 28, 2022. BankUnited did not sustain significant damage or disruption to facilities or operations. Based on information collected to date, we do not expect the impact of the storm to be material to our financial condition or results of operations.
  • As previously reported, on September 13, 2022, the Company's Board of Directors authorized the repurchase of up to an additional $150 million in shares of its outstanding common stock. During the quarter ended September 30, 2022, the Company repurchased approximately 0.3 million shares of its common stock for an aggregate purchase price of $10.8 million, at a weighted average price of $34.36 per share.

Loans

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

 

September 30, 2022

 

June 30, 2022

 

December 31, 2021

Residential and other consumer loans

$

8,853,884

 

36.4

%

 

$

8,840,387

 

36.7

%

 

$

8,368,380

 

35.2

%

Multi-family

 

962,546

 

4.0

%

 

 

1,017,500

 

4.2

%

 

 

1,154,738

 

4.9

%

Non-owner occupied commercial real estate

 

4,368,686

 

18.1

%

 

 

4,276,697

 

17.7

%

 

 

4,381,610

 

18.4

%

Construction and land

 

246,202

 

1.0

%

 

 

213,833

 

0.9

%

 

 

165,390

 

0.7

%

Owner occupied commercial real estate

 

1,919,074

 

7.9

%

 

 

1,907,349

 

7.9

%

 

 

1,944,658

 

8.2

%

Commercial and industrial

 

5,786,907

 

23.9

%

 

 

5,423,998

 

22.5

%

 

 

4,790,275

 

20.2

%

PPP

 

10,191

 

%

 

 

29,828

 

0.1

%

 

 

248,505

 

1.0

%

Pinnacle

 

932,187

 

3.8

%

 

 

977,930

 

4.1

%

 

 

919,641

 

3.9

%

Bridge - franchise finance

 

254,137

 

1.0

%

 

 

262,570

 

1.1

%

 

 

342,124

 

1.4

%

Bridge - equipment finance

 

310,035

 

1.3

%

 

 

333,125

 

1.4

%

 

 

357,599

 

1.5

%

Mortgage warehouse lending ("MWL")

 

622,883

 

2.6

%

 

 

816,797

 

3.4

%

 

 

1,092,133

 

4.6

%

 

$

24,266,732

 

100.0

%

 

$

24,100,014

 

100.0

%

 

$

23,765,053

 

100.0

%

In the aggregate, commercial loans, excluding the runoff of PPP, grew by $173 million during the quarter ended September 30, 2022. The largest increase was in the commercial and industrial segment, including owner-occupied commercial real estate, which grew by $375 million, followed by the commercial real estate segment with $69 million in growth. The remaining commercial segments declined during the quarter; the largest decline was in MWL, with $194 million. MWL utilization declined to 32% at September 30, 2022, compared to 46% at June 30, 2022 and 56% at December 31, 2021.

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

Non-performing loans totaled $156.4 million or 0.64% of total loans at September 30, 2022, compared to $144.0 million or 0.60% of total loans at June 30, 2022. Non-performing loans included $41.8 million and $43.4 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.17% and 0.18% of total loans at September 30, 2022 and June 30, 2022, respectively.

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

 

September 30, 2022

 

June 30, 2022

 

December 31, 2021

Special mention

$

26,939

 

$

89,153

 

$

148,593

Substandard - accruing

 

662,716

 

 

787,399

 

 

1,136,378

Substandard - non-accruing

 

104,994

 

 

117,518

 

 

129,579

Doubtful

 

32,093

 

 

7,971

 

 

47,754

Total

$

826,742

 

$

1,002,041

 

$

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 September 30, 2022 and June 30, 2022, and the year ended December 31, 2021 (dollars in thousands):

 

ACL

 

ACL to Total

Loans (1)

 

ACL to Non-

Performing Loans

 

Net Charge-offs to

Average Loans (2)

December 31, 2021

$

126,457

 

0.53

%

 

61.41

%

 

0.29

%

June 30, 2022

$

130,239

 

0.54

%

 

90.45

%

 

0.23

%

September 30, 2022

$

130,671

 

0.54

%

 

83.54

%

 

0.16

%

___________________________

(1)

ACL to total loans, excluding government insured residential loans, PPP loans and MWL, which carry nominal or no reserves, was 0.60%, 0.61%, and 0.62% at September 30, 2022, June 30, 2022 and December 31, 2021, respectively.

(2)

Annualized for the six months ended June 30, 2022 and the nine months ended September 30, 2022.

The ACL at September 30, 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 September 30, 2022, the Company recorded a provision for credit losses of $3.7 million, including $2.8 million related to funded loans. Offsetting factors impacting the provision for credit losses for the quarter ended September 30, 2022 included an increase related to the updated economic forecast, increases in specific reserves, loan growth and a $5 million provision related to the potential impact of Hurricane Ian, partially offset by decreases in certain qualitative factors and the impact of improving borrower financial results.

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

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

Beginning balance

$

130,239

 

 

$

175,642

 

 

$

126,457

 

 

$

257,323

 

Provision (recovery)

 

2,753

 

 

 

(11,554

)

 

 

33,406

 

 

 

(65,523

)

Net charge-offs

 

(2,321

)

 

 

(4,473

)

 

 

(29,192

)

 

 

(32,185

)

Ending balance

$

130,671

 

 

$

159,615

 

 

$

130,671

 

 

$

159,615

 

Net Interest Income

Net interest income for the quarter ended September 30, 2022 was $235.8 million compared to $225.4 million for the immediately preceding quarter ended June 30, 2022 and $195.1 million for the quarter ended September 30, 2021. Interest income increased by $59.1 million for the quarter ended September 30, 2022 compared to the immediately preceding quarter while interest expense increased by $48.6 million.

The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.13% to 2.76% for the quarter ended September 30, 2022, from 2.63% for the immediately preceding quarter ended June 30, 2022. Factors impacting the net interest margin for the quarter ended September 30, 2022 included:

  • The tax-equivalent yield on investment securities increased to 3.12% for the quarter ended September 30, 2022, from 2.12% for the quarter ended June 30, 2022. This increase resulted from the reset of coupon rates on variable rate securities and purchases of higher-yielding securities.
  • The tax-equivalent yield on loans increased to 4.11% for the quarter ended September 30, 2022, from 3.59% for the quarter ended June 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 1.14% for the quarter ended September 30, 2022, from 0.45% for the quarter ended June 30, 2022, primarily in response to the rising interest rate environment. Growth in time deposits as a percentage of interest bearing deposits also contributed to this increase, as we implemented a strategy to extend the term of interest bearing deposits.
  • The average rate paid on FHLB advances increased to 2.25% for the quarter ended September 30, 2022, from 1.07% for the quarter ended June 30, 2022, primarily in response to the rising interest rate environment.

Non-interest income and Non-interest expense

Non-interest income totaled $23.1 million for the quarter ended September 30, 2022 compared to $13.5 million for the quarter ended June 30, 2022 and $25.5 million for the quarter ended September 30, 2021.

  • Gain (loss) on investment securities was a net gain of $0.1 million for the quarter ended September 30, 2022, compared to a net loss of $(8.4) million for the quarter ended June 30, 2022, and a net loss of $(0.7) million for the quarter ended September 30, 2021. The net loss for the quarter ended June 30, 2022 was primarily attributable to a $9.3 million decrease in the fair value of certain preferred stock investments.

Non-interest expense increased by $10.7 million for the quarter ended September 30, 2022 compared to the quarter ended June 30, 2022. As expected, an increasing trend was reflected in the compensation and technology categories as we continue to invest in people and technology to support future growth.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, October 20, 2022 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/BI4d0f0999272845dd996e3017ab4ea49a. 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 $36.6 billion at September 30, 2022, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 58 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)

 

 

September 30,

2022

 

December 31,

2021

ASSETS

 

 

 

Cash and due from banks:

 

 

 

Non-interest bearing

$

18,380

 

 

$

19,143

 

Interest bearing

 

707,758

 

 

 

295,714

 

Cash and cash equivalents

 

726,138

 

 

 

314,857

 

Investment securities (including securities recorded at fair value of $9,787,427 and $10,054,198)

 

9,797,427

 

 

 

10,064,198

 

Non-marketable equity securities

 

261,784

 

 

 

135,859

 

Loans

 

24,266,732

 

 

 

23,765,053

 

Allowance for credit losses

 

(130,671

)

 

 

(126,457

)

Loans, net

 

24,136,061

 

 

 

23,638,596

 

Bank owned life insurance

 

308,176

 

 

 

309,477

 

Operating lease equipment, net

 

579,693

 

 

 

640,726

 

Goodwill

 

77,637

 

 

 

77,637

 

Other assets

 

707,978

 

 

 

634,046

 

Total assets

$

36,594,894

 

 

$

35,815,396

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Liabilities:

 

 

 

Demand deposits:

 

 

 

Non-interest bearing

$

8,794,109

 

 

$

8,975,621

 

Interest bearing

 

2,341,342

 

 

 

3,709,493

 

Savings and money market

 

12,513,398

 

 

 

13,368,745

 

Time

 

3,700,226

 

 

 

3,384,243

 

Total deposits

 

27,349,075

 

 

 

29,438,102

 

Federal funds purchased

 

 

 

 

199,000

 

FHLB advances

 

5,295,000

 

 

 

1,905,000

 

Notes and other borrowings

 

721,045

 

 

 

721,416

 

Other liabilities

 

748,789

 

 

 

514,117

 

Total liabilities

 

34,113,909

 

 

 

32,777,635

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 77,599,408 and 85,647,986 shares issued and outstanding

 

776

 

 

 

856

 

Paid-in capital

 

381,411

 

 

 

707,503

 

Retained earnings

 

2,506,539

 

 

 

2,345,342

 

Accumulated other comprehensive loss

 

(407,741

)

 

 

(15,940

)

Total stockholders' equity

 

2,480,985

 

 

 

3,037,761

 

Total liabilities and stockholders' equity

$

36,594,894

 

 

$

35,815,396

 

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,

 

2022

 

2022

 

2021

 

2022

 

2021

Interest income:

 

 

 

 

 

 

 

 

 

Loans

$

244,884

 

$

209,223

 

 

$

194,689

 

 

$

645,669

 

 

$

602,544

 

Investment securities

 

77,109

 

 

54,771

 

 

 

38,243

 

 

 

174,928

 

 

 

114,418

 

Other

 

4,031

 

 

2,979

 

 

 

1,413

 

 

 

8,364

 

 

 

4,613

 

Total interest income

 

326,024

 

 

266,973

 

 

 

234,345

 

 

 

828,961

 

 

 

721,575

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

53,206

 

 

20,501

 

 

 

14,273

 

 

 

85,569

 

 

 

53,965

 

Borrowings

 

36,982

 

 

21,056

 

 

 

24,950

 

 

 

73,498

 

 

 

77,937

 

Total interest expense

 

90,188

 

 

41,557

 

 

 

39,223

 

 

 

159,067

 

 

 

131,902

 

Net interest income before provision for credit losses

 

235,836

 

 

225,416

 

 

 

195,122

 

 

 

669,894

 

 

 

589,673

 

Provision for (recovery of) credit losses

 

3,720

 

 

23,996

 

 

 

(11,842

)

 

 

35,546

 

 

 

(67,365

)

Net interest income after provision for credit losses

 

232,116

 

 

201,420

 

 

 

206,964

 

 

 

634,348

 

 

 

657,038

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Deposit service charges and fees

 

6,064

 

 

5,896

 

 

 

5,553

 

 

 

17,920

 

 

 

15,870

 

Gain (loss) on investment securities, net

 

135

 

 

(8,392

)

 

 

(664

)

 

 

(16,125

)

 

 

5,856

 

Lease financing

 

13,180

 

 

13,363

 

 

 

13,212

 

 

 

39,958

 

 

 

39,222

 

Other non-interest income

 

3,693

 

 

2,583

 

 

 

7,377

 

 

 

9,070

 

 

 

27,583

 

Total non-interest income

 

23,072

 

 

13,450

 

 

 

25,478

 

 

 

50,823

 

 

 

88,531

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

66,097

 

 

62,461

 

 

 

57,224

 

 

 

195,646

 

 

 

172,971

 

Occupancy and equipment

 

11,719

 

 

11,399

 

 

 

11,760

 

 

 

34,630

 

 

 

35,127

 

Deposit insurance expense

 

4,398

 

 

3,993

 

 

 

3,552

 

 

 

11,794

 

 

 

15,224

 

Professional fees

 

3,184

 

 

3,256

 

 

 

2,312

 

 

 

8,702

 

 

 

6,363

 

Technology

 

19,813

 

 

17,898

 

 

 

16,687

 

 

 

54,715

 

 

 

49,279

 

Depreciation of operating lease equipment

 

12,646

 

 

12,585

 

 

 

12,944

 

 

 

37,841

 

 

 

37,995

 

Other non-interest expense

 

20,248

 

 

15,810

 

 

 

13,563

 

 

 

48,503

 

 

 

42,756

 

Total non-interest expense

 

138,105

 

 

127,402

 

 

 

118,042

 

 

 

391,831

 

 

 

359,715

 

Income before income taxes

 

117,083

 

 

87,468

 

 

 

114,400

 

 

 

293,340

 

 

 

385,854

 

Provision for income taxes

 

29,233

 

 

21,704

 

 

 

27,459

 

 

 

72,576

 

 

 

96,125

 

Net income

$

87,850

 

$

65,764

 

 

$

86,941

 

 

$

220,764

 

 

$

289,729

 

Earnings per common share, basic

$

1.13

 

$

0.82

 

 

$

0.94

 

 

$

2.73

 

 

$

3.12

 

Earnings per common share, diluted

$

1.12

 

$

0.82

 

 

$

0.94

 

 

$

2.71

 

 

$

3.12

 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

Three Months Ended

September 30, 2022

 

Three Months Ended

June 30, 2022

 

Three Months Ended

September 30, 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

$

24,053,742

 

 

$

248,168

 

4.11

%

 

$

23,709,190

 

 

$

212,395

 

3.59

%

 

$

22,879,654

 

 

$

197,995

 

3.45

%

Investment securities (3)

 

9,981,486

 

 

 

77,840

 

3.12

%

 

 

10,477,600

 

 

 

55,488

 

2.12

%

 

 

10,452,255

 

 

 

38,939

 

1.49

%

Other interest earning assets

 

596,879

 

 

 

4,031

 

2.68

%

 

 

718,904

 

 

 

2,979

 

1.66

%

 

 

750,700

 

 

 

1,413

 

0.75

%

Total interest earning assets

 

34,632,107

 

 

 

330,039

 

3.80

%

 

 

34,905,694

 

 

 

270,862

 

3.11

%

 

 

34,082,609

 

 

 

238,347

 

2.79

%

Allowance for credit losses

 

(133,828

)

 

 

 

 

 

 

(127,864

)

 

 

 

 

 

 

(171,381

)

 

 

 

 

Non-interest earning assets

 

1,703,371

 

 

 

 

 

 

 

1,669,689

 

 

 

 

 

 

 

1,856,608

 

 

 

 

 

Total assets

$

36,201,650

 

 

 

 

 

 

$

36,447,519

 

 

 

 

 

 

$

35,767,836

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

2,306,906

 

 

$

4,104

 

0.71

%

 

$

2,576,257

 

 

$

1,742

 

0.27

%

 

$

3,038,038

 

 

$

1,701

 

0.22

%

Savings and money market deposits

 

13,001,566

 

 

 

39,838

 

1.22

%

 

 

13,052,566

 

 

 

15,213

 

0.47

%

 

 

13,554,572

 

 

 

10,029

 

0.29

%

Time deposits

 

3,255,869

 

 

 

9,264

 

1.13

%

 

 

2,812,988

 

 

 

3,546

 

0.51

%

 

 

2,866,746

 

 

 

2,543

 

0.35

%

Total interest bearing deposits

 

18,564,341

 

 

 

53,206

 

1.14

%

 

 

18,441,811

 

 

 

20,501

 

0.45

%

 

 

19,459,356

 

 

 

14,273

 

0.29

%

Federal funds purchased

 

153,905

 

 

 

833

 

2.12

%

 

 

115,146

 

 

 

155

 

0.53

%

 

 

70,054

 

 

 

15

 

0.08

%

FHLB advances

 

4,739,457

 

 

 

26,890

 

2.25

%

 

 

4,373,736

 

 

 

11,644

 

1.07

%

 

 

2,647,314

 

 

 

15,678

 

2.35

%

Notes and other borrowings

 

721,164

 

 

 

9,259

 

5.14

%

 

 

721,284

 

 

 

9,257

 

5.13

%

 

 

721,638

 

 

 

9,257

 

5.13

%

Total interest bearing liabilities

 

24,178,867

 

 

 

90,188

 

1.48

%

 

 

23,651,977

 

 

 

41,557

 

0.70

%

 

 

22,898,362

 

 

 

39,223

 

0.68

%

Non-interest bearing demand deposits

 

8,749,794

 

 

 

 

 

 

 

9,419,025

 

 

 

 

 

 

 

8,912,960

 

 

 

 

 

Other non-interest bearing liabilities

 

697,440

 

 

 

 

 

 

 

654,162

 

 

 

 

 

 

 

752,774

 

 

 

 

 

Total liabilities

 

33,626,101

 

 

 

 

 

 

 

33,725,164

 

 

 

 

 

 

 

32,564,096

 

 

 

 

 

Stockholders' equity

 

2,575,549

 

 

 

 

 

 

 

2,722,355

 

 

 

 

 

 

 

3,203,740

 

 

 

 

 

Total liabilities and stockholders' equity

$

36,201,650

 

 

 

 

 

 

$

36,447,519

 

 

 

 

 

 

$

35,767,836

 

 

 

 

 

Net interest income

 

 

$

239,851

 

 

 

 

 

$

229,305

 

 

 

 

 

$

199,124

 

 

Interest rate spread

 

 

 

 

2.32

%

 

 

 

 

 

2.41

%

 

 

 

 

 

2.11

%

Net interest margin

 

 

 

 

2.76

%

 

 

 

 

 

2.63

%

 

 

 

 

 

2.33

%

___________________________

(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,

 

2022

 

2021

 

Average

Balance

 

Interest(1)

 

Yield/

Rate(1)(2)

 

Average

Balance

 

Interest(1)

 

Yield/

Rate(1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans

$

23,706,606

 

 

$

655,114

 

3.69

%

 

$

23,139,389

 

 

$

612,756

 

3.54

%

Investment securities (3)

 

10,180,351

 

 

 

177,047

 

2.32

%

 

 

9,792,350

 

 

 

116,464

 

1.59

%

Other interest earning assets

 

663,189

 

 

 

8,364

 

1.69

%

 

 

1,063,476

 

 

 

4,613

 

0.58

%

Total interest earning assets

 

34,550,146

 

 

 

840,525

 

3.25

%

 

 

33,995,215

 

 

 

733,833

 

2.88

%

Allowance for credit losses

 

(130,258

)

 

 

 

 

 

 

(213,352

)

 

 

 

 

Non-interest earning assets

 

1,682,618

 

 

 

 

 

 

 

1,771,639

 

 

 

 

 

Total assets

$

36,102,506

 

 

 

 

 

 

$

35,553,502

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

2,658,558

 

 

 

7,215

 

0.36

%

 

$

3,017,301

 

 

 

7,069

 

0.31

%

Savings and money market deposits

 

13,150,357

 

 

 

62,704

 

0.64

%

 

 

13,299,066

 

 

 

33,463

 

0.34

%

Time deposits

 

3,129,247

 

 

 

15,650

 

0.67

%

 

 

3,520,674

 

 

 

13,433

 

0.51

%

Total interest bearing deposits

 

18,938,162

 

 

 

85,569

 

0.60

%

 

 

19,837,041

 

 

 

53,965

 

0.36

%

Federal funds purchased

 

152,028

 

 

 

1,046

 

0.92

%

 

 

26,245

 

 

 

17

 

0.09

%

FHLB advances

 

3,796,484

 

 

 

44,680

 

1.57

%

 

 

2,863,093

 

 

 

50,158

 

2.34

%

Notes and other borrowings

 

721,283

 

 

 

27,772

 

5.13

%

 

 

721,897

 

 

 

27,762

 

5.13

%

Total interest bearing liabilities

 

23,607,957

 

 

 

159,067

 

0.90

%

 

 

23,448,276

 

 

 

131,902

 

0.75

%

Non-interest bearing demand deposits

 

9,071,135

 

 

 

 

 

 

 

8,194,570

 

 

 

 

 

Other non-interest bearing liabilities

 

650,936

 

 

 

 

 

 

 

783,618

 

 

 

 

 

Total liabilities

 

33,330,028

 

 

 

 

 

 

 

32,426,464

 

 

 

 

 

Stockholders' equity

 

2,772,478

 

 

 

 

 

 

 

3,127,038

 

 

 

 

 

Total liabilities and stockholders' equity

$

36,102,506

 

 

 

 

 

 

$

35,553,502

 

 

 

 

 

Net interest income

 

 

$

681,458

 

 

 

 

 

$

601,931

 

 

Interest rate spread

 

 

 

 

2.35

%

 

 

 

 

 

2.13

%

Net interest margin

 

 

 

 

2.63

%

 

 

 

 

 

2.36

%

___________________________

(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,

2022

 

2021

 

2022

 

2021

Basic earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income

$

87,850

 

 

$

86,941

 

 

$

220,764

 

 

$

289,729

 

Distributed and undistributed earnings allocated to participating securities

 

(1,343

)

 

 

(1,112

)

 

 

(3,258

)

 

 

(3,701

)

Income allocated to common stockholders for basic earnings per common share

$

86,507

 

 

$

85,829

 

 

$

217,506

 

 

$

286,028

 

Denominator:

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

77,912,320

 

 

 

92,053,714

 

 

 

81,039,561

 

 

 

92,787,824

 

Less average unvested stock awards

 

(1,221,971

)

 

 

(1,208,304

)

 

 

(1,230,396

)

 

 

(1,218,416

)

Weighted average shares for basic earnings per common share

 

76,690,349

 

 

 

90,845,410

 

 

 

79,809,165

 

 

 

91,569,408

 

Basic earnings per common share

$

1.13

 

 

$

0.94

 

 

$

2.73

 

 

$

3.12

 

Diluted earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Income allocated to common stockholders for basic earnings per common share

$

86,507

 

 

$

85,829

 

 

$

217,506

 

 

$

286,028

 

Adjustment for earnings reallocated from participating securities

 

6

 

 

 

2

 

 

 

9

 

 

 

5

 

Income used in calculating diluted earnings per common share

$

86,513

 

 

$

85,831

 

 

$

217,515

 

 

$

286,033

 

Denominator:

 

 

 

 

 

 

 

Weighted average shares for basic earnings per common share

 

76,690,349

 

 

 

90,845,410

 

 

 

79,809,165

 

 

 

91,569,408

 

Dilutive effect of certain share-based awards

 

433,472

 

 

 

182,448

 

 

 

308,608

 

 

 

152,675

 

Weighted average shares for diluted earnings per common share

 

77,123,821

 

 

 

91,027,858

 

 

 

80,117,773

 

 

 

91,722,083

 

Diluted earnings per common share

$

1.12

 

 

$

0.94

 

 

$

2.71

 

 

$

3.12

 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

Financial ratios (4)

 

 

 

 

 

 

 

Return on average assets

0.96

%

 

0.96

%

 

0.82

%

 

1.09

%

Return on average stockholders’ equity

13.5

%

 

10.8

%

 

10.6

%

 

12.4

%

Net interest margin (3)

2.76

%

 

2.33

%

 

2.63

%

 

2.36

%

 

September 30, 2022

 

December 31, 2021

Asset quality ratios

 

 

 

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

0.64

%

 

0.87

%

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

0.43

%

 

0.58

%

Allowance for credit losses to total loans

0.54

%

 

0.53

%

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

83.54

%

 

61.41

%

Net charge-offs to average loans (4)

0.16

%

 

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 and nine month periods.

(5)

Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $41.8 million or 0.17% of total loans and 0.11% of total assets at September 30, 2022 and $46.1 million or 0.19% of total loans and 0.13% of total assets at December 31, 2021.

 

September 30, 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

7.7

%

 

8.8

%

 

8.4

%

 

9.6

%

 

5.0

%

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

11.3

%

 

12.9

%

 

12.6

%

 

14.5

%

 

6.5

%

Total risk-based capital

13.0

%

 

13.4

%

 

14.3

%

 

14.9

%

 

10.0

%

Non-GAAP Financial Measures

ACL to total loans, excluding government insured residential loans, PPP loans and MWL is a non-GAAP financial measure. Management believes this measure is relevant to understanding the adequacy of the ACL coverage, excluding the impact of loans which carry nominal or no reserves. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions. The following table reconciles the non-GAAP financial measurement of ACL to total loans, excluding government insured residential loans, PPP loans and MWL to the comparable GAAP financial measurement of ACL to total loans at the dates indicated (dollars in thousands):

 

September 30, 2022

 

June 30, 2022

 

December 31, 2021

Total loans (GAAP)

$

24,266,732

 

 

$

24,100,014

 

 

$

23,765,053

 

Less: Government insured residential loans

 

1,849,343

 

 

 

1,928,779

 

 

 

2,023,221

 

Less: PPP loans

 

10,191

 

 

 

29,828

 

 

 

248,505

 

Less: MWL

 

622,883

 

 

 

816,797

 

 

 

1,092,133

 

Total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP)

$

21,784,315

 

 

$

21,324,610

 

 

$

20,401,194

 

 

 

 

 

 

 

ACL

$

130,671

 

 

$

130,239

 

 

$

126,457

 

 

 

 

 

 

 

ACL to total loans (GAAP)

 

0.54

%

 

 

0.54

%

 

 

0.53

%

 

 

 

 

 

 

ACL to total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP)

 

0.60

%

 

 

0.61

%

 

 

0.62

%

 

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