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BankUnited, Inc. Reports Third Quarter 2021 Results

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended September 30, 2021.

"The Company delivered a solid quarter. We're pleased by our continued progress in improving the deposit book and in the positive direction of credit trends" said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended September 30, 2021, the Company reported net income of $86.9 million, or $0.94 per diluted share, compared to $104.0 million or $1.11 per diluted share for the immediately preceding quarter ended June 30, 2021 and $66.6 million, or $0.70 per diluted share, for the quarter ended September 30, 2020.

For the nine months ended September 30, 2021, the Company reported net income of $289.7 million, or $3.12 per diluted share, compared to $112.1 million, or $1.17 per diluted share, for the nine months ended September 30, 2020. On an annualized basis, earnings for the nine months ended September 30, 2021 generated a return on average stockholders' equity of 12.4% and a return on average assets of 1.09%.

Financial Highlights

  • Net interest income decreased by $3.2 million compared to the immediately preceding quarter ended June 30, 2021 and increased by $7.6 million compared to the quarter ended September 30, 2020. The net interest margin, calculated on a tax-equivalent basis, was 2.33% for the quarter ended September 30, 2021 compared to 2.37% for the immediately preceding quarter and 2.32% for the quarter ended September 30, 2020. The net interest margin was impacted by pressure on earning asset yields, in part resulting from lower than expected commercial loan growth for the quarter, leading to continued deployment of liquidity into securities. Lower recognition of PPP fees also had an impact.
  • As expected, the average cost of total deposits continued to decline, dropping by 0.05% to 0.20% for the quarter ended September 30, 2021 from 0.25% for the immediately preceding quarter ended June 30, 2021, and 0.57% for the quarter ended September 30, 2020. On a spot basis, the average annual percentage yield ("APY") on total deposits declined to 0.19% at September 30, 2021 from 0.22% at June 30, 2021 and 0.36% at December 31, 2020.
  • Non-interest bearing demand deposits grew by $324 million during the quarter ended September 30, 2021 while average non-interest bearing demand deposits grew by $749 million compared to the immediately preceding quarter. Average non-interest bearing demand deposits grew by $2.7 billion compared to the third quarter of the prior year. At September 30, 2021, non-interest bearing demand deposits represented 33% of total deposits, compared to 25% of total deposits at December 31, 2020.
  • Total deposits declined by $493 million during the quarter ended September 30, 2021, as the Company continues to execute on a strategy focused on improving the quality of the deposit base rather than on growth in total deposits. Money market and savings deposits declined by $1.1 billion in the third quarter. The majority of this decline was attributable to reductions in accounts that management believes will be more price sensitive in a rising rate environment.
  • For the quarter ended September 30, 2021, the Company recorded a recovery of credit losses of $(11.8) million compared to a recovery of $(27.5) million for the immediately preceding quarter ended June 30, 2021 and a provision for credit losses of $29.2 million for the quarter ended September 30, 2020. For the nine months ended September 30, 2021 and 2020, the provision for (recovery of) credit losses was $(67.4) million and $180.1 million, respectively. Year over year volatility in the provision related to the expected economic impact of the onset of the COVID-19 pandemic in 2020 and subsequent recovery in 2021.
  • As expected, as the economy emerges from the COVID-19 crisis and our borrowers' operating results improve, criticized and classified loans continued to decline. During the quarter ended September 30, 2021, total criticized and classified loans declined by $240 million. The ratio of non-performing loans to total loans declined to 1.21% at September 30, 2021 from 1.28% at June 30, 2021.
  • Loans currently under short-term deferral totaled $17 million and loans modified under the CARES Act totaled $267 million for a total of $285 million at September 30, 2021, down from a total of $497 million at June 30, 2021.
  • Total loans and operating lease equipment, excluding the runoff of PPP loans, grew by $74 million for the quarter ended September 30, 2021.
  • Book value per common share and tangible book value per common share continued to accrete, increasing to $34.39 and $33.53, respectively, at September 30, 2021 from $33.91 and $33.08, respectively, at June 30, 2021 and $32.05 and $31.22, respectively at December 31, 2020.
  • During the quarter ended September 30, 2021, the Company repurchased approximately 3.2 million shares of its common stock for an aggregate purchase price of $129.4 million, at a weighted average price of $40.62 per share.
  • On October 20, 2021, the Company's Board of Directors authorized the repurchase of up to an additional $150 million in shares of its outstanding common stock.

Loans and Leases

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

 

September 30, 2021

 

June 30, 2021

 

December 31, 2020

Residential and other consumer loans

$

7,827,224

 

 

34.3

%

 

$

7,076,274

 

 

30.9

%

 

$

6,348,222

 

 

26.6

%

Multi-family

1,181,935

 

 

5.2

%

 

1,256,711

 

 

5.5

%

 

1,639,201

 

 

6.9

%

Non-owner occupied commercial real estate

4,537,078

 

 

19.9

%

 

4,724,183

 

 

20.7

%

 

4,963,273

 

 

20.8

%

Construction and land

163,988

 

 

0.7

%

 

218,634

 

 

1.0

%

 

293,307

 

 

1.2

%

Owner occupied commercial real estate

2,012,376

 

 

8.8

%

 

1,960,900

 

 

8.6

%

 

2,000,770

 

 

8.4

%

Commercial and industrial

4,166,914

 

 

18.3

%

 

4,205,795

 

 

18.4

%

 

4,447,383

 

 

18.6

%

PPP

332,548

 

 

1.5

%

 

491,960

 

 

2.1

%

 

781,811

 

 

3.3

%

Pinnacle

932,865

 

 

4.1

%

 

1,046,537

 

 

4.6

%

 

1,107,386

 

 

4.6

%

Bridge - franchise finance

396,589

 

 

1.7

%

 

463,874

 

 

2.0

%

 

549,733

 

 

2.3

%

Bridge - equipment finance

379,446

 

 

1.7

%

 

421,939

 

 

1.8

%

 

475,548

 

 

2.0

%

Mortgage warehouse lending ("MWL")

877,006

 

 

3.8

%

 

1,018,267

 

 

4.4

%

 

1,259,408

 

 

5.3

%

 

$

22,807,969

 

 

100.0

%

 

$

22,885,074

 

 

100.0

%

 

$

23,866,042

 

 

100.0

%

Operating lease equipment, net

$

659,935

 

 

 

 

$

667,935

 

 

 

 

$

663,517

 

 

 

Residential continues to be an area of strength; residential and other consumer loans grew by $751 million during the quarter ended September 30, 2021. GNMA early buyout loans grew by $50 million, totaling $1.9 billion at September 30, 2021.

The majority of commercial portfolio segments showed net declines for the quarter ended September 30, 2021 as payoffs outpaced production. Commercial real estate portfolio segments in the aggregate declined by $317 million while commercial and industrial loans, including owner-occupied commercial real estate, remained relatively flat, growing by $13 million. Balances for Pinnacle, Bridge and mortgage warehouse declined by $114 million, $110 million and $141 million, respectively. The decrease in multifamily loans was largely attributable to $76 million of runoff in the New York portfolio.

PPP loans declined by $159 million during the quarter ended September 30, 2021, due to forgiveness of first draw program loans.

Asset Quality and the Allowance for Credit Losses

The following table presents information about non-performing loans, loans on deferral and CARES Act modifications at September 30, 2021 (dollars in thousands):

 

Non-Performing

Loans

 

Currently Under Short-

Term Deferral

 

CARES Act Modification

Residential and other consumer (1)

$

33,161

 

 

$

17,439

 

 

$

23,012

 

Commercial:

 

 

 

 

 

CRE by Property Type:

 

 

 

 

 

Retail

18,678

 

 

 

 

15,874

 

Hotel

22,043

 

 

 

 

81,632

 

Office

5,260

 

 

 

 

 

Multi-family

11,018

 

 

 

 

7,317

 

Other

7,193

 

 

 

 

 

Owner occupied commercial real estate

22,192

 

 

 

 

15,775

 

Commercial and industrial

125,550

 

 

 

 

95,871

 

Bridge - franchise finance

31,569

27,717

Total commercial

243,503

244,186

Total

$

276,664

 

 

$

17,439

 

 

$

267,198

 

------------

(1)

 

Excludes government insured residential loans.

In the table above, "currently under short-term deferral" refers to loans subject to a 90-day payment deferral at September 30, 2021 and "CARES Act modification" refers to loans subject to longer-term modifications that, were it not for the provisions of the CARES Act, would likely have been reported as TDRs. Non-performing loans may include some loans that have been modified under the CARES Act.

Non-performing loans totaled $276.7 million or 1.21% of total loans at September 30, 2021, compared to $292.7 million or 1.28% of total loans at June 30, 2021 and $244.5 million or 1.02% of total loans at December 31, 2020. Non-performing loans included $49.1 million, $47.7 million and $51.3 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.22%, 0.21% and 0.22% of total loans at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.

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

 

September 30, 2021

 

June 30, 2021

 

December 31, 2020

Special mention

$

153,373

 

 

$

138,064

 

 

$

711,516

 

Substandard - accruing

1,432,801

1,684,666

1,758,654

Substandard - non-accruing

227,055

229,646

203,758

Doubtful

16,447

 

 

17,332

 

 

11,867

 

Total

$

1,829,676

 

 

$

2,069,708

 

 

$

2,685,795

 

The following table presents the ACL at the dates indicated, related ACL coverage ratios and net charge-off rates for the quarters ended September 30, 2021 and June 30, 2021 and the year ended December 31, 2020 (dollars in thousands):

 

ACL

 

ACL to Total Loans

(1)

 

ACL to Non-

Performing Loans

 

Net Charge-offs to

Average Loans (2)

December 31, 2020

$

257,323

 

 

1.08

%

 

105.26

%

 

0.26

%

June 30, 2021

$

175,642

 

 

0.77

%

 

60.02

%

 

0.24

%

September 30, 2021

$

159,615

 

 

0.70

%

 

57.69

%

 

0.19

%

------------

(1)

ACL to total loans, excluding government insured residential loans, PPP loans and MWL, which carry nominal or no reserves, was 0.81%, 0.90% and 1.26% at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.

(2)

Annualized for the periods ended June 30, 2021 and September 30, 2021.

The ACL at September 30, 2021 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. The estimate was informed by Moody's economic scenarios published in September 2021, economic information provided by additional sources, information about borrower financial condition and collateral values, data reflecting the impact of recent events on individual borrowers and other relevant information.

For the quarter ended September 30, 2021, the Company recorded a recovery of credit losses of $(11.8) million, which included a recovery of $(11.6) million related to funded loans and an insignificant amount related to unfunded loan commitments and accrued interest receivable. The most significant factors contributing to the recovery of the provision for credit losses and corresponding reduction in the ACL for the quarter included declines in commercial loan balances and the accompanying shift in portfolio composition to residential loans which generally carry lower reserves, reductions in certain qualitative factors and an improving economic forecast. Improved borrower financial performance as reflected in the reduction in criticized and classified assets also contributed to the reduction in the ACL.

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,

 

2021

 

2020

 

2021

 

2020

Beginning balance

$

175,642

 

 

$

266,123

 

 

$

257,323

 

 

$

108,671

 

Cumulative effect of adoption of CECL

 

 

 

 

 

 

27,305

 

Balance after adoption of CECL

175,642

 

 

266,123

 

 

257,323

 

 

135,976

 

Provision (recovery)

(11,554)

 

 

27,646

 

 

(65,523)

 

 

181,095

 

Net charge-offs

(4,473)

 

 

(19,641)

 

 

(32,185)

 

 

(42,943)

 

Ending balance

$

159,615

 

 

$

274,128

 

 

$

159,615

 

 

$

274,128

 

Net interest income

Net interest income for the quarter ended September 30, 2021 was $195.1 million compared to $198.3 million for the immediately preceding quarter ended June 30, 2021 and $187.5 million for the quarter ended September 30, 2020.

Interest income decreased by $7.5 million for the quarter ended September 30, 2021 compared to the immediately preceding quarter, and by $20.2 million compared to the quarter ended September 30, 2020. Interest expense decreased by $4.3 million compared to the immediately preceding quarter and by $27.9 million compared to the quarter ended September 30, 2020. Decreases in interest income resulted from turnover of the loan and investment portfolios at lower prevailing rates, as well as a decline in average loans. Declines in interest expense reflected the impact of our strategy focused on lowering the cost of deposits and improving the deposit mix, runoff and repricing of deposits generated in a higher rate environment, and declines in average interest bearing liabilities.

The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.04% to 2.33% for the quarter ended September 30, 2021, from 2.37% for the immediately preceding quarter ended June 30, 2021. Offsetting factors impacting the net interest margin for the quarter ended September 30, 2021 included:

  • The average rate paid on interest bearing deposits decreased to 0.29% for the quarter ended September 30, 2021, from 0.35% for the quarter ended June 30, 2021. This decline reflected continued initiatives taken to lower rates paid on deposits, including the re-pricing of term deposits.
  • The tax-equivalent yield on investment securities decreased to 1.49% for the quarter ended September 30, 2021 from 1.56% for the quarter ended June 30, 2021. This decrease resulted from the impact of purchases of lower-yielding securities coupled with amortization, maturities and prepayment of securities purchased in a higher rate environment. Accounting adjustments related to faster prepayment speeds of securities purchased at a premium negatively impacted the yield on investment securities for the quarter ended September 30, 2021 by approximately 0.06%.
  • The tax-equivalent yield on loans decreased to 3.45% for the quarter ended September 30, 2021, from 3.59% for the quarter ended June 30, 2021. Accelerated amortization of origination fees on PPP loans that were partially or fully forgiven during the quarter impacted the yield on loans by approximately 0.03% for the quarter ended September 30, 2021, compared to 0.11% for the quarter ended June 30, 2021. Factoring out the impact of accelerated amortization of PPP origination fees, the yield on loans for the quarter ended September 30, 2021 decreased by 0.06% compared to the immediately preceding quarter. This decrease is mainly the result of growth in the residential portfolio at average yields lower than our commercial loan segments.
  • The increase in average non-interest bearing demand deposits as a percentage of average total deposits also positively impacted the cost of total deposits and the net interest margin.

Capital Actions

On October 20, 2021, the Company's Board of Directors authorized the repurchase of up to $150 million in shares of its outstanding common stock. This authorization is in addition to $58.3 million in remaining authorization as of September 30, 2021, under a previously announced share repurchase program. Any repurchases under the program will be made in accordance with applicable securities laws from time to time in open market or private transactions. The extent to which the Company repurchases shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, the Company’s capital position and amount of retained earnings, regulatory requirements and other considerations. No time limit was set for the completion of the share repurchase program, and the program may be suspended or discontinued without prior notice at any time.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, October 21, 2021 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 http://www.ir.bankunited.com/. The dial in telephone number for the call is (855) 798-3052 (domestic) or (234) 386-2812 (international). The name of the call is BankUnited, Inc. and the conference ID for the call is 9293887. A replay of the call will be available from 12:00 p.m. ET on October 21st through 11:59 p.m. ET on October 28th by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The conference ID for the replay is 9293887. An archived webcast will also be available on the Investor Relations page of www.bankunited.com.

About BankUnited, Inc.

BankUnited, Inc., with total assets of $35.3 billion at September 30, 2021, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 64 banking centers in 13 Florida counties and 4 banking centers in the New York metropolitan area at September 30, 2021.

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 the COVID-19 pandemic. 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, 2020 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,

2021

 

December 31,

2020

ASSETS

 

 

 

Cash and due from banks:

 

 

 

Non-interest bearing

$

17,973

 

 

$

20,233

 

Interest bearing

489,049

 

 

377,483

 

Cash and cash equivalents

507,022

 

 

397,716

 

Investment securities (including securities recorded at fair value of $10,319,691 and $9,166,683)

10,329,691

 

 

9,176,683

 

Non-marketable equity securities

155,584

 

 

195,865

 

Loans held for sale

 

 

24,676

 

Loans

22,807,969

 

 

23,866,042

 

Allowance for credit losses

(159,615)

 

 

(257,323)

 

Loans, net

22,648,354

 

 

23,608,719

 

Bank owned life insurance

308,912

 

 

294,629

 

Operating lease equipment, net

659,935

 

 

663,517

 

Goodwill

77,637

 

 

77,637

 

Other assets

619,136

 

 

571,051

 

Total assets

$

35,306,271

 

 

$

35,010,493

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Liabilities:

 

 

 

Demand deposits:

 

 

 

Non-interest bearing

$

9,158,281

 

 

$

7,008,838

 

Interest bearing

3,268,709

 

 

3,020,039

 

Savings and money market

12,460,507

 

 

12,659,740

 

Time

3,228,776

 

 

4,807,199

 

Total deposits

28,116,273

 

 

27,495,816

 

Federal funds purchased

199,000

 

 

180,000

 

FHLB advances

2,431,014

 

 

3,122,999

 

Notes and other borrowings

721,527

 

 

722,495

 

Other liabilities

741,783

 

 

506,171

 

Total liabilities

32,209,597

 

 

32,027,481

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 90,049,326 and 93,067,500 shares issued and outstanding

900

 

 

931

 

Paid-in capital

885,873

 

 

1,017,518

 

Retained earnings

2,239,963

 

 

2,013,715

 

Accumulated other comprehensive loss

(30,062)

 

 

(49,152)

 

Total stockholders' equity

3,096,674

 

 

2,983,012

 

Total liabilities and stockholders' equity

$

35,306,271

 

 

$

35,010,493

 

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,

 

2021

 

2021

 

2020

 

2021

 

2020

Interest income:

 

 

 

 

 

 

 

 

 

Loans

$

194,689

 

 

$

202,520

 

 

$

208,646

 

 

$

602,544

 

 

$

656,943

 

Investment securities

38,243

 

 

37,674

 

 

44,604

 

 

114,418

 

 

151,596

 

Other

1,413

 

 

1,607

 

 

1,322

 

 

4,613

 

 

7,950

 

Total interest income

234,345

 

 

241,801

 

 

254,572

 

 

721,575

 

 

816,489

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

14,273

 

 

17,316

 

 

37,681

 

 

53,965

 

 

170,690

 

Borrowings

24,950

 

 

26,174

 

 

29,412

 

 

77,937

 

 

87,407

 

Total interest expense

39,223

 

 

43,490

 

 

67,093

 

 

131,902

 

 

258,097

 

Net interest income before provision for credit losses

195,122

 

 

198,311

 

 

187,479

 

 

589,673

 

 

558,392

 

Provision for (recovery of) credit losses

(11,842)

 

 

(27,534)

 

 

29,232

 

 

(67,365)

 

 

180,074

 

Net interest income after provision for credit losses

206,964

 

 

225,845

 

 

158,247

 

 

657,038

 

 

378,318

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Deposit service charges and fees

5,553

 

 

5,417

 

 

4,040

 

 

15,870

 

 

11,927

 

Gain on sale of loans, net

1,403

 

 

2,234

 

 

2,953

 

 

5,391

 

 

10,745

 

Gain (loss) on investment securities, net

(664)

 

 

4,155

 

 

7,181

 

 

5,856

 

 

10,564

 

Lease financing

13,212

 

 

13,522

 

 

13,934

 

 

39,222

 

 

45,565

 

Other non-interest income

5,974

 

 

7,429

 

 

8,184

 

 

22,192

 

 

19,140

 

Total non-interest income

25,478

 

 

32,757

 

 

36,292

 

 

88,531

 

 

97,941

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

57,224

 

 

56,459

 

 

48,448

 

 

172,971

 

 

156,212

 

Occupancy and equipment

11,760

 

 

11,492

 

 

12,170

 

 

35,127

 

 

36,440

 

Deposit insurance expense

3,552

 

 

4,222

 

 

5,886

 

 

15,224

 

 

15,095

 

Professional fees

2,312

 

 

2,139

 

 

2,436

 

 

6,363

 

 

8,771

 

Technology and telecommunications

16,687

 

 

16,851

 

 

15,435

 

 

49,279

 

 

42,056

 

Depreciation of operating lease equipment

12,944

 

 

12,834

 

 

12,315

 

 

37,995

 

 

37,137

 

Other non-interest expense

13,563

 

 

14,455

 

 

11,937

 

 

42,756

 

 

38,154

 

Total non-interest expense

118,042

 

 

118,452

 

 

108,627

 

 

359,715

 

 

333,865

 

Income before income taxes

114,400

 

 

140,150

 

 

85,912

 

 

385,854

 

 

142,394

 

Provision for income taxes

27,459

 

 

36,176

 

 

19,353

 

 

96,125

 

 

30,278

 

Net income

$

86,941

 

 

$

103,974

 

 

$

66,559

 

 

$

289,729

 

 

$

112,116

 

Earnings per common share, basic

$

0.94

 

 

$

1.12

 

 

$

0.70

 

 

$

3.12

 

 

$

1.17

 

Earnings per common share, diluted

$

0.94

 

 

$

1.11

 

 

$

0.70

 

 

$

3.12

 

 

$

1.17

 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

Three Months Ended

September 30, 2021

 

Three Months Ended

June 30, 2021

 

Three Months Ended

September 30, 2020

 

 

 

 

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

$

22,879,654

 

 

$

197,995

 

 

3.45

%

 

$

22,996,564

 

 

$

205,940

 

 

3.59

%

 

$

23,447,514

 

 

$

212,388

 

 

3.61

%

Investment securities (3)

10,452,255

 

 

38,939

 

 

1.49

%

 

9,839,422

 

 

38,338

 

 

1.56

%

 

9,065,478

 

 

45,351

 

 

2.00

%

Other interest earning assets

750,700

 

 

1,413

 

 

0.75

%

 

1,380,317

 

 

1,607

 

 

0.47

%

 

552,515

 

 

1,322

 

 

0.95

%

Total interest earning assets

34,082,609

 

 

238,347

 

 

2.79

%

 

34,216,303

 

 

245,885

 

 

2.88

%

 

33,065,507

 

 

259,061

 

 

3.13

%

Allowance for credit losses

(171,381)

 

 

 

 

 

 

(215,151)

 

 

 

 

 

 

(272,464)

 

 

 

 

 

Non-interest earning assets

1,856,608

 

 

 

 

 

 

1,732,676

 

 

 

 

 

 

1,897,723

 

 

 

 

 

Total assets

$

35,767,836

 

 

 

 

 

 

$

35,733,828

 

 

 

 

 

 

$

34,690,766

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

3,038,038

 

 

$

1,701

 

 

0.22

%

 

$

3,069,945

 

 

$

2,594

 

 

0.34

%

 

$

2,800,421

 

 

$

4,127

 

 

0.59

%

Savings and money market deposits

13,554,572

 

 

10,029

 

 

0.29

%

 

13,541,237

 

 

11,307

 

 

0.33

%

 

10,664,462

 

 

15,853

 

 

0.59

%

Time deposits

2,866,746

 

 

2,543

 

 

0.35

%

 

3,380,582

 

 

3,415

 

 

0.41

%

 

6,519,852

 

 

17,701

 

 

1.08

%

Total interest bearing deposits

19,459,356

 

 

14,273

 

 

0.29

%

 

19,991,764

 

 

17,316

 

 

0.35

%

 

19,984,735

 

 

37,681

 

 

0.75

%

Federal funds purchased

70,054

 

 

15

 

 

0.08

%

 

 

 

 

 

%

 

53,587

 

 

14

 

 

0.10

%

FHLB and PPPLF borrowings

2,647,314

 

 

15,678

 

 

2.35

%

 

2,873,922

 

 

16,922

 

 

2.36

%

 

4,117,181

 

 

20,146

 

 

1.95

%

Notes and other borrowings

721,638

 

 

9,257

 

 

5.13

%

 

721,753

 

 

9,252

 

 

5.13

%

 

722,271

 

 

9,252

 

 

5.12

%

Total interest bearing liabilities

22,898,362

 

 

39,223

 

 

0.68

%

 

23,587,439

 

 

43,490

 

 

0.74

%

 

24,877,774

 

 

67,093

 

 

1.07

%

Non-interest bearing demand deposits

8,912,960

 

 

 

 

 

 

8,163,879

 

 

 

 

 

 

6,186,718

 

 

 

 

 

Other non-interest bearing liabilities

752,774

 

 

 

 

 

 

851,044

 

 

 

 

 

 

803,498

 

 

 

 

 

Total liabilities

32,564,096

 

 

 

 

 

 

32,602,362

 

 

 

 

 

 

31,867,990

 

 

 

 

 

Stockholders' equity

3,203,740

 

 

 

 

 

 

3,131,466

 

 

 

 

 

 

2,822,776

 

 

 

 

 

Total liabilities and stockholders' equity

$

35,767,836

 

 

 

 

 

 

$

35,733,828

 

 

 

 

 

 

$

34,690,766

 

 

 

 

 

Net interest income

 

 

$

199,124

 

 

 

 

 

 

$

202,395

 

 

 

 

 

 

$

191,968

 

 

 

Interest rate spread

 

 

 

 

2.11

%

 

 

 

 

 

2.14

%

 

 

 

 

 

2.06

%

Net interest margin

 

 

 

 

2.33

%

 

 

 

 

 

2.37

%

 

 

 

 

 

2.32

%

---------------------

(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,

 

2021

 

2020

 

Average

Balance

 

Interest (1)

 

Yield/

Rate (1)(2)

 

Average

Balance

 

Interest (1)

 

Yield/

Rate (1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans

$

23,139,389

 

 

$

612,756

 

 

3.54

%

 

$

23,278,042

 

 

$

668,187

 

 

3.83

%

Investment securities (3)

9,792,350

 

 

116,464

 

 

1.59

%

 

8,501,513

 

 

153,987

 

 

2.42

%

Other interest earning assets

1,063,476

 

 

4,613

 

 

0.58

%

 

654,623

 

 

7,950

 

 

1.62

%

Total interest earning assets

33,995,215

 

 

733,833

 

 

2.88

%

 

32,434,178

 

 

830,124

 

 

3.42

%

Allowance for credit losses

(213,352)

 

 

 

 

 

 

(222,085)

 

 

 

 

 

Non-interest earning assets

1,771,639

 

 

 

 

 

 

1,874,709

 

 

 

 

 

Total assets

$

35,553,502

 

 

 

 

 

 

$

34,086,802

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

3,017,301

 

 

7,069

 

 

0.31

%

 

$

2,475,388

 

 

15,808

 

 

0.85

%

Savings and money market deposits

13,299,066

 

 

33,463

 

 

0.34

%

 

10,509,559

 

 

71,056

 

 

0.90

%

Time deposits

3,520,674

 

 

13,433

 

 

0.51

%

 

7,040,101

 

 

83,826

 

 

1.59

%

Total interest bearing deposits

19,837,041

 

 

53,965

 

 

0.36

%

 

20,025,048

 

 

170,690

 

 

1.14

%

Federal funds purchased

26,245

 

 

17

 

 

0.09

%

 

89,033

 

 

412

 

 

0.62

%

FHLB and PPPLF borrowings

2,863,093

 

 

50,158

 

 

2.34

%

 

4,496,407

 

 

66,284

 

 

1.97

%

Notes and other borrowings

721,897

 

 

27,762

 

 

5.13

%

 

548,851

 

 

20,711

 

 

5.03

%

Total interest bearing liabilities

23,448,276

 

 

131,902

 

 

0.75

%

 

25,159,339

 

 

258,097

 

 

1.37

%

Non-interest bearing demand deposits

8,194,570

 

 

 

 

 

 

5,292,702

 

 

 

 

 

Other non-interest bearing liabilities

783,618

 

 

 

 

 

 

791,057

 

 

 

 

 

Total liabilities

32,426,464

 

 

 

 

 

 

31,243,098

 

 

 

 

 

Stockholders' equity

3,127,038

 

 

 

 

 

 

2,843,704

 

 

 

 

 

Total liabilities and stockholders' equity

$

35,553,502

 

 

 

 

 

 

$

34,086,802

 

 

 

 

 

Net interest income

 

 

$

601,931

 

 

 

 

 

 

$

572,027

 

 

 

Interest rate spread

 

 

 

 

2.13

%

 

 

 

 

 

2.05

%

Net interest margin

 

 

 

 

2.36

%

 

 

 

 

 

2.35

%

---------------------

(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,

2021

 

2020

 

2021

 

2020

Basic earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income

$

86,941

 

 

$

66,559

 

 

$

289,729

 

 

$

112,116

 

Distributed and undistributed earnings allocated to participating securities

(1,112)

 

 

(2,896)

 

 

(3,701)

 

 

(4,816)

 

Income allocated to common stockholders for basic earnings per common share

$

85,829

 

 

$

63,663

 

 

$

286,028

 

 

$

107,300

 

Denominator:

 

 

 

 

 

 

 

Weighted average common shares outstanding

92,053,714

 

 

92,405,239

 

 

92,787,824

 

 

92,918,030

 

Less average unvested stock awards

(1,208,304)

 

 

(1,183,564)

 

 

(1,218,416)

 

 

(1,164,317)

 

Weighted average shares for basic earnings per common share

90,845,410

 

 

91,221,675

 

 

91,569,408

 

 

91,753,713

 

Basic earnings per common share

$

0.94

 

 

$

0.70

 

 

$

3.12

 

 

$

1.17

 

Diluted earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Income allocated to common stockholders for basic earnings per common share

$

85,829

 

 

$

63,663

 

 

$

286,028

 

 

$

107,300

 

Adjustment for earnings reallocated from participating securities

2

 

 

4

 

 

5

 

 

3

 

Income used in calculating diluted earnings per common share

$

85,831

 

 

$

63,667

 

 

$

286,033

 

 

$

107,303

 

Denominator:

 

 

 

 

 

 

 

Weighted average shares for basic earnings per common share

90,845,410

 

 

91,221,675

 

 

91,569,408

 

 

91,753,713

 

Dilutive effect of stock options and certain shared-based awards

182,448

 

 

171,054

 

 

152,675

 

 

142,008

 

Weighted average shares for diluted earnings per common share

91,027,858

 

 

91,392,729

 

 

91,722,083

 

 

91,895,721

 

Diluted earnings per common share

$

0.94

 

 

$

0.70

 

 

$

3.12

 

 

$

1.17

 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

Financial ratios (4)

 

 

 

 

 

 

 

Return on average assets

0.96

%

 

0.76

%

 

1.09

%

 

0.44

%

Return on average stockholders’ equity

10.8

%

 

9.4

%

 

12.4

%

 

5.3

%

Net interest margin (3)

2.33

%

 

2.32

%

 

2.36

%

 

2.35

%

 

September 30, 2021

 

December 31, 2020

Asset quality ratios

 

 

 

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

1.21

%

 

1.02

%

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

0.80

%

 

0.71

%

Allowance for credit losses to total loans

0.70

%

 

1.08

%

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

57.69

%

 

105.26

%

Net charge-offs to average loans (4)

0.19

%

 

0.26

%

--------------------

(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 $49.1 million or 0.22% of total loans and 0.14% of total assets, at September 30, 2021; and $51.3 million or 0.22% of total loans and 0.15% of total assets, at December 31, 2020.

 

September 30, 2021

 

December 31, 2020

 

Required to be

Considered Well

Capitalized

 

BankUnited, Inc.

 

BankUnited, N.A.

 

BankUnited, Inc.

 

BankUnited, N.A.

 

Capital ratios

 

 

 

 

 

 

 

 

 

Tier 1 leverage

8.6

%

 

9.6

%

 

8.6

%

 

9.5

%

 

5.0

%

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

13.4

%

 

14.9

%

 

12.6

%

 

13.9

%

 

6.5

%

Total risk-based capital

15.3

%

 

15.4

%

 

14.7

%

 

14.8

%

 

10.0

%

On a fully-phased in basis with respect to the adoption of CECL, the Company's and the Bank's CET1 risk-based capital ratios would have been 13.3% and 14.8%, respectively, at September 30, 2021.

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, 2021

 

June 30, 2021

 

December 31, 2020

Total loans (GAAP)

$

22,807,969

 

$

22,885,074

 

$

23,866,042

Less: Government insured residential loans

1,913,497

 

1,863,723

 

1,419,074

Less: PPP loans

332,548

 

491,960

 

781,811

Less: MWL

877,006

 

1,018,267

 

1,259,408

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

$

19,684,918

 

$

19,511,124

 

$

20,405,749

 

 

 

 

 

 

ACL

$

159,615

 

$

175,642

 

$

257,323

 

 

 

 

 

 

ACL to total loans (GAAP)

0.70

%

 

0.77

%

 

1.08

%

 

 

 

 

 

 

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

0.81

%

 

0.90

%

 

1.26

%

 

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, 2021

 

December 31, 2020

Total stockholders’ equity (GAAP)

$

3,096,674

 

 

$

2,983,012

 

Less: goodwill

77,637

 

 

77,637

 

Tangible stockholders’ equity (non-GAAP)

$

3,019,037

 

 

$

2,905,375

 

 

 

 

 

Common shares issued and outstanding

90,049,326

 

 

93,067,500

 

 

 

 

 

Book value per common share (GAAP)

$

34.39

 

 

$

32.05

 

 

 

 

 

Tangible book value per common share (non-GAAP)

$

33.53

 

 

$

31.22

 

 

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