BankUnited, Inc. Reports Second Quarter 2023 Results

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MIAMI LAKES, Fla., July 25, 2023--(BUSINESS WIRE)--BankUnited, Inc. (the "Company") (NYSE: BKU) today announced financial results for the quarter ended June 30, 2023.

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

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

Quarterly Highlights

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

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

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

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

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

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

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

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

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

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

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

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

Deposits and Funding

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

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

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

Loans

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

June 30, 2023

March 31, 2023

December 31, 2022

Residential

$

8,605,838

34.9

%

$

8,789,744

35.3

%

$

8,900,714

35.7

%

Non-owner occupied commercial real estate

5,302,523

21.5

%

5,346,895

21.5

%

5,405,597

21.7

%

Construction and land

393,464

1.6

%

324,805

1.3

%

294,360

1.2

%

Owner occupied commercial real estate

1,832,586

7.4

%

1,863,333

7.5

%

1,890,813

7.6

%

Commercial and industrial

6,575,368

26.8

%

6,617,716

26.5

%

6,417,721

25.9

%

Pinnacle - municipal finance

951,529

3.9

%

919,584

3.7

%

912,122

3.7

%

Franchise finance

207,783

0.8

%

239,205

1.0

%

253,774

1.0

%

Equipment finance

237,816

1.0

%

266,715

1.1

%

286,147

1.1

%

Mortgage warehouse lending ("MWL")

523,083

2.1

%

524,897

2.1

%

524,740

2.1

%

$

24,629,990

100.0

%

$

24,892,894

100.0

%

$

24,885,988

100.0

%

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

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

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

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

June 30, 2023

March 31, 2023

December 31, 2022

Special mention

$

233,004

$

101,781

$

51,433

Substandard - accruing

525,643

596,054

605,965

Substandard - non-accruing

80,642

82,840

75,125

Doubtful

14,954

7,699

7,990

Total

$

854,243

$

788,374

$

740,513

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

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

ACL to Total

ACL to Non-

Net Charge-offs to

ACL

Loans

Performing Loans

Average Loans (1)

December 31, 2022

$

147,946

0.59

%

140.88

%

0.22

%

March 31, 2023

$

158,792

0.64

%

139.01

%

0.08

%

June 30, 2023

$

166,833

0.68

%

140.52

%

0.09

%

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

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

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

Three Months Ended

Six Months Ended

June 30, 2023

March 31, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Beginning balance

$

158,792

$

147,946

$

125,443

$

147,946

$

126,457

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

N/A

(1,794

)

N/A

(1,794

)

N/A

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

158,792

146,152

125,443

146,152

126,457

Provision

14,195

17,595

23,207

31,790

30,653

Net charge-offs

(6,154

)

(4,955

)

(18,411

)

(11,109

)

(26,871

)

Ending balance

$

166,833

$

158,792

$

130,239

$

166,833

$

130,239

Net Interest Income

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

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

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

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

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

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

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

Non-interest income and Non-interest expense

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

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

Earnings Conference Call and Presentation

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

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

About BankUnited, Inc.

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

Forward-Looking Statements

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

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

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)

June 30,

December 31,

2023

2022

ASSETS

Cash and due from banks:

Non-interest bearing

$

18,355

$

16,068

Interest bearing

282,814

556,579

Cash and cash equivalents

301,169

572,647

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

9,143,937

9,755,327

Non-marketable equity securities

317,759

294,172

Loans

24,629,990

24,885,988

Allowance for credit losses

(166,833

)

(147,946

)

Loans, net

24,463,157

24,738,042

Bank owned life insurance

318,935

308,212

Operating lease equipment, net

514,734

539,799

Goodwill

77,637

77,637

Other assets

734,151

740,876

Total assets

$

35,871,479

$

37,026,712

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Demand deposits:

Non-interest bearing

$

7,304,735

$

8,037,848

Interest bearing

2,929,870

2,142,067

Savings and money market

10,084,276

13,061,341

Time

5,519,771

4,268,078

Total deposits

25,838,652

27,509,334

Federal funds purchased

—

190,000

FHLB advances

5,975,000

5,420,000

Notes and other borrowings

715,302

720,923

Other liabilities

816,215

750,474

Total liabilities

33,345,169

34,590,731

Commitments and contingencies

Stockholders' equity:

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

744

757

Paid-in capital

274,202

321,729

Retained earnings

2,623,926

2,551,400

Accumulated other comprehensive loss

(372,562

)

(437,905

)

Total stockholders' equity

2,526,310

2,435,981

Total liabilities and stockholders' equity

$

35,871,479

$

37,026,712

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2023

2023

2022

2023

2022

Interest income:

Loans

$

326,153

$

308,795

$

209,223

$

634,948

$

400,785

Investment securities

120,604

118,758

54,771

239,362

97,819

Other

16,664

12,863

2,979

29,527

4,333

Total interest income

463,421

440,416

266,973

903,837

502,937

Interest expense:

Deposits

156,868

133,630

20,501

290,498

32,363

Borrowings

92,675

78,912

21,056

171,587

36,516

Total interest expense

249,543

212,542

41,557

462,085

68,879

Net interest income before provision for credit losses

213,878

227,874

225,416

441,752

434,058

Provision for credit losses

15,517

19,788

23,996

35,305

31,826

Net interest income after provision for credit losses

198,361

208,086

201,420

406,447

402,232

Non-interest income:

Deposit service charges and fees

5,349

5,545

5,896

10,894

11,856

Gain (loss) on investment securities, net

993

(12,549

)

(8,392

)

(11,556

)

(16,260

)

Lease financing

12,519

13,109

13,363

25,628

26,778

Other non-interest income

6,626

10,430

2,583

17,056

5,377

Total non-interest income

25,487

16,535

13,450

42,022

27,751

Non-interest expense:

Employee compensation and benefits

67,414

71,051

62,461

138,465

129,549

Occupancy and equipment

11,043

10,802

11,399

21,845

22,911

Deposit insurance expense

7,597

7,907

3,993

15,504

7,396

Professional fees

3,518

2,918

3,256

6,436

5,518

Technology

20,437

21,726

17,898

42,163

34,902

Depreciation of operating lease equipment

11,232

11,521

12,585

22,753

25,195

Other non-interest expense

23,977

26,855

15,810

50,832

28,255

Total non-interest expense

145,218

152,780

127,402

297,998

253,726

Income before income taxes

78,630

71,841

87,468

150,471

176,257

Provision for income taxes

20,634

18,959

21,704

39,593

43,343

Net income

$

57,996

$

52,882

$

65,764

$

110,878

$

132,914

Earnings per common share, basic

$

0.78

$

0.71

$

0.82

$

1.49

$

1.61

Earnings per common share, diluted

$

0.78

$

0.70

$

0.82

$

1.48

$

1.60

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

Three Months Ended June 30,

Three Months Ended March 31,

Three Months Ended June 30,

2023

2023

2022

Average

Yield/

Average

Yield/

Average

Yield/

Balance

Interest (1)

Rate (1)(2)

Balance

Interest (1)

Rate (1)(2)

Balance

Interest (1)

Rate (1)(2)

Assets:

Interest earning assets:

Loans

$

24,680,919

$

329,494

5.35

%

$

24,724,296

$

312,125

5.10

%

$

23,709,190

$

212,395

3.59

%

Investment securities (3)

9,369,019

121,520

5.19

%

9,672,514

119,666

4.95

%

10,477,600

55,488

2.12

%

Other interest earning assets

1,323,025

16,664

5.05

%

1,039,563

12,863

5.02

%

718,904

2,979

1.66

%

Total interest earning assets

35,372,963

467,678

5.30

%

35,436,373

444,654

5.05

%

34,905,694

270,862

3.11

%

Allowance for credit losses

(162,463

)

(151,071

)

...

(127,864

)

Non-interest earning assets

1,744,693

1,793,000

1,669,689

Total assets

$

36,955,193

$

37,078,302

$

36,447,519

Liabilities and Stockholders' Equity:

Interest bearing liabilities:

Interest bearing demand deposits

$

2,772,839

$

18,417

2.66

%

$

2,283,505

$

10,545

1.87

%

$

2,576,257

$

1,742

0.27

%

Savings and money market deposits

10,285,494

88,892

3.47

%

12,145,922

91,724

3.06

%

13,052,566

15,213

0.47

%

Time deposits

5,494,631

49,559

3.62

%

4,526,480

31,361

2.81

%

2,812,988

3,546

0.51

%

Total interest bearing deposits

18,552,964

156,868

3.39

%

18,955,907

133,630

2.86

%

18,441,811

20,501

0.45

%

Federal funds purchased

—

—

—

%

143,580

1,611

4.49

%

115,146

155

0.53

%

FHLB advances

7,288,187

83,429

4.59

%

6,465,000

68,039

4.27

%

4,373,736

11,644

1.07

%

Notes and other borrowings

719,368

9,246

5.14

%

720,906

9,262

5.14

%

721,284

9,257

5.13

%

Total interest bearing liabilities

26,560,519

249,543

3.77

%

26,285,393

212,542

3.28

%

23,651,977

41,557

0.70

%

Non-interest bearing demand deposits

7,067,053

7,458,221

9,419,025

Other non-interest bearing liabilities

798,279

821,419

654,162

Total liabilities

34,425,851

34,565,033

33,725,164

Stockholders' equity

2,529,342

2,513,269

2,722,355

Total liabilities and stockholders' equity

$

36,955,193

$

37,078,302

$

36,447,519

Net interest income

$

218,135

$

232,112

$

229,305

Interest rate spread

1.53

%

1.77

%

2.41

%

Net interest margin

2.47

%

2.62

%

2.63

%

(1) On a tax-equivalent basis where applicable

(2) Annualized

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

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

Six Months Ended June 30,

2023

2022

Average

Yield/

Average

Yield/

Balance

Interest (1)

Rate (1)(2)

Balance

Interest (1)

Rate (1)(2)

Assets:

Interest earning assets:

Loans

$

24,702,487

$

641,617

5.22

%

$

23,530,162

$

406,946

3.47

%

Investment securities (3)

9,519,928

241,187

5.07

%

10,281,431

99,207

1.93

%

Other interest earning assets

1,182,077

29,527

5.04

%

696,894

4,333

1.25

%

Total interest earning assets

35,404,492

912,331

5.18

%

34,508,487

510,486

2.97

%

Allowance for credit losses

(156,798

)

(128,443

)

Non-interest earning assets

1,768,714

1,672,070

Total assets

$

37,016,408

$

36,052,114

Liabilities and Stockholders' Equity:

Interest bearing liabilities:

Interest bearing demand deposits

$

2,570,422

$

29,291

2.30

%

$

2,825,830

$

3,111

0.22

%

Savings and money market deposits

11,169,671

180,287

3.25

%

13,225,986

22,866

0.35

%

Time deposits

5,013,230

80,920

3.26

%

3,064,887

6,386

0.42

%

Total interest bearing deposits

18,753,323

290,498

3.12

%

19,116,703

32,363

0.34

%

Federal funds purchased

71,393

1,611

4.51

%

151,074

213

0.28

%

FHLB advances

6,878,867

151,467

4.44

%

3,317,182

17,790

1.08

%

Notes and other borrowings

720,133

18,509

5.14

%

721,344

18,513

5.13

%

Total interest bearing liabilities

26,423,716

462,085

3.53

%

23,306,303

68,879

0.59

%

Non-interest bearing demand deposits

7,261,557

9,234,469

Other non-interest bearing liabilities

809,785

638,767

Total liabilities

34,495,058

33,179,539

Stockholders' equity

2,521,350

2,872,575

Total liabilities and stockholders' equity

$

37,016,408

$

36,052,114

Net interest income

$

450,246

$

441,607

Interest rate spread

1.65

%

2.38

%

Net interest margin

2.55

%

2.57

%

(1) On a tax-equivalent basis where applicable

(2) Annualized

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

BANKUNITED, INC. AND SUBSIDIARIES

EARNINGS PER COMMON SHARE

(In thousands except share and per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

Basic earnings per common share:

Numerator:

Net income

$

57,996

$

65,764

$

110,878

$

132,914

Distributed and undistributed earnings allocated to participating securities

(881

)

(999

)

(1,679

)

(1,927

)

Income allocated to common stockholders for basic earnings per common share

$

57,115

$

64,765

$

109,199

$

130,987

Denominator:

Weighted average common shares outstanding

74,424,631

80,300,069

74,588,904

82,629,098

Less average unvested stock awards

(1,183,039

)

(1,257,258

)

(1,188,430

)

(1,234,678

)

Weighted average shares for basic earnings per common share

73,241,592

79,042,811

73,400,474

81,394,420

Basic earnings per common share

$

0.78

$

0.82

$

1.49

$

1.61

Diluted earnings per common share:

Numerator:

Income allocated to common stockholders for basic earnings per common share

$

57,115

$

64,765

$

109,199

$

130,987

Adjustment for earnings reallocated from participating securities

1

3

5

4

Income used in calculating diluted earnings per common share

$

57,116

$

64,768

$

109,204

$

130,991

Denominator:

Weighted average shares for basic earnings per common share

73,241,592

79,042,811

73,400,474

81,394,420

Dilutive effect of certain share-based awards

179,318

350,734

312,708

244,808

Weighted average shares for diluted earnings per common share

73,420,910

79,393,545

73,713,182

81,639,228

Diluted earnings per common share

$

0.78

$

0.82

$

1.48

$

1.60

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

At or for the Three Months Ended

Six Months Ended June 30,

June 30, 2023

March 31, 2023

June 30, 2022

2023

2022

Financial ratios (4)

Return on average assets

0.63

%

0.58

%

0.72

%

0.60

%

0.74

%

Return on average stockholders’ equity

9.2

%

8.5

%

9.7

%

8.9

%

9.3

%

Net interest margin (3)

2.47

%

2.62

%

2.63

%

2.55

%

2.57

%

Loans to deposits

95.3

%

96.8

%

84.7

%

Tangible book value per common share

$

32.90

$

32.30

$

31.16

June 30, 2023

December 31, 2022

Asset quality ratios

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

0.48

%

0.42

%

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

0.34

%

0.29

%

Allowance for credit losses to total loans

0.68

%

0.59

%

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

140.52

%

140.88

%

Net charge-offs to average loans (4)

0.09

%

0.22

%

(1)

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

(2)

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

(3)

On a tax-equivalent basis.

(4)

Annualized for the three and six month periods as applicable.

(5)

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

June 30, 2023

March 31, 2023

December 31, 2022

Required to be
Considered
Well
Capitalized

BankUnited,
Inc.

BankUnited,
N.A.

BankUnited,
Inc.

BankUnited,
N.A.

BankUnited,
Inc.

BankUnited,
N.A.

Capital ratios

Tier 1 leverage

7.6

%

8.8

%

7.4

%

8.6

%

7.5

%

8.4

%

5.0

%

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

11.2

%

13.0

%

10.8

%

12.5

%

11.0

%

12.4

%

6.5

%

Total risk-based capital

13.0

%

13.6

%

12.6

%

13.1

%

12.7

%

12.9

%

10.0

%

Tangible Common Equity/Tangible Assets

6.8

%

N/A

6.5

%

N/A

6.4

%

N/A

N/A

Non-GAAP Financial Measures

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

June 30, 2023

March 31, 2023

June 30, 2022

Total stockholders’ equity

$

2,526,310

$

2,481,394

$

2,506,017

Less: goodwill and other intangible assets

77,637

77,637

77,637

Tangible stockholders’ equity

$

2,448,673

$

2,403,757

$

2,428,380

Common shares issued and outstanding

74,429,948

74,423,365

77,944,216

Book value per common share

$

33.94

$

33.34

$

32.15

Tangible book value per common share

$

32.90

$

32.30

$

31.16

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

Contacts

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

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