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BankUnited, Inc. Reports Second Quarter 2022 Results

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

"This quarter saw strong loan growth and margin expansion. We celebrated the opening of our Dallas branch and Atlanta wholesale banking office and are looking forward to continued growth of the franchise," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended June 30, 2022, the Company reported net income of $65.8 million, or $0.82 per diluted share, compared to $67.2 million, or $0.79 per diluted share for the immediately preceding quarter ended March 31, 2022 and $104.0 million, or $1.11 per diluted share, for the quarter ended June 30, 2021. For the six months ended June 30, 2022, the Company reported net income of $132.9 million, or $1.60 per diluted share, compared to $202.8 million, or $2.17 per diluted share, for the six months ended June 30, 2021. Earnings for the six months ended June 30, 2021 were favorably impacted by a $55.5 million recovery of the provision for credit losses.

Quarterly Highlights

  • During the second quarter, we continued to build out our wholesale banking teams in Atlanta and opened a banking center in Dallas.
  • Total loans, excluding the runoff of PPP loans, grew by $780 million, of which $553 million was in commercial segments, for the quarter ended June 30, 2022.
  • Average non-interest bearing demand deposits increased by $371 million for the quarter. Total deposits remained relatively consistent with the prior quarter-end, declining by $80 million, while non-interest bearing demand deposits declined by $18 million at June 30, 2022 compared to March 31, 2022. At June 30, 2022, non-interest bearing demand deposits represented 34% of total deposits, consistent with the prior quarter-end.
  • The net interest margin, calculated on a tax-equivalent basis, expanded to 2.63% for the quarter ended June 30, 2022 from 2.50% for the immediately preceding quarter and 2.37% for the quarter ended June 30, 2021. Net interest income increased by $16.8 million compared to the immediately preceding quarter ended March 31, 2022 and by $27.1 million compared to the quarter ended June 30, 2021.
  • In response to the rising interest rate environment, the average cost of total deposits increased to 0.30% for the quarter ended June 30, 2022, from 0.17% for the immediately preceding quarter ended March 31, 2022 and 0.25% for the quarter ended June 30, 2021. On a spot basis, the average annual percentage yield on total deposits increased to 0.45% at June 30, 2022, from 0.16% at March 31, 2022.
  • For the quarter ended June 30, 2022, the Company recorded a provision for credit losses of $24.0 million compared to a provision of $7.8 million for the immediately preceding quarter ended March 31, 2022 and a recovery of the provision for credit losses of $(27.5) million for the quarter ended June 30, 2021. The ratio of the ACL to total loans was consistent with the prior quarter-end at 0.54%.
  • The ratio of non-performing loans to total loans was 0.60% at June 30, 2022 compared to 0.65% at March 31, 2022. The guaranteed portion of SBA loans on non-accrual status represented 0.18% of total loans and 30% of non-performing loans at June 30, 2022. The positive trend in levels of criticized and classified loans continued during the quarter ended June 30, 2022 with a decline of $181 million and the annualized net charge-off ratio declined to 0.23% from 0.29% for the year ended December 31, 2021.
  • Results for the quarter continued to be impacted by declines in the fair value of investment securities. Accumulated other comprehensive loss increased by $163 million for the quarter ended June 30, 2022, primarily due to an increase in unrealized losses on investment securities available for sale. Non-interest income was impacted by a $9.3 million decline in the fair value of certain preferred stock investments. These declines in the fair value of securities resulted primarily from widening spreads and rising interest rates related to the Fed's quantitative tightening and inflationary concerns. None of the unrealized losses were attributable to credit loss impairments; the Company expects to recover the amortized cost basis of its available for sale securities.
  • At June 30, 2022, book value per common share and tangible book value per common share were $32.15 and $31.16, respectively.
  • During the quarter ended June 30, 2022, the Company repurchased approximately 6.1 million shares of its common stock for an aggregate purchase price of $243.6 million, at a weighted average price of $39.94 per share.

Loans

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

��

June 30, 2022

 

March 31, 2022

 

December 31, 2021

Residential and other consumer loans

$

8,840,387

 

36.7

%

 

$

8,612,839

 

36.8

%

 

$

8,368,380

 

35.2

%

Multi-family

 

1,017,500

 

4.2

%

 

 

1,072,981

 

4.6

%

 

 

1,154,738

 

4.9

%

Non-owner occupied commercial real estate

 

4,276,697

 

17.7

%

 

 

4,284,675

 

18.3

%

 

 

4,381,610

 

18.4

%

Construction and land

 

213,833

 

0.9

%

 

 

176,825

 

0.8

%

 

 

165,390

 

0.7

%

Owner occupied commercial real estate

 

1,907,349

 

7.9

%

 

 

1,905,395

 

8.2

%

 

 

1,944,658

 

8.2

%

Commercial and industrial

 

5,423,998

 

22.5

%

 

 

4,951,999

 

21.2

%

 

 

4,790,275

 

20.2

%

PPP

 

29,828

 

0.1

%

 

 

80,296

 

0.3

%

 

 

248,505

 

1.0

%

Pinnacle

 

977,930

 

4.1

%

 

 

935,915

 

4.0

%

 

 

919,641

 

3.9

%

Bridge - franchise finance

 

262,570

 

1.1

%

 

 

306,563

 

1.3

%

 

 

342,124

 

1.4

%

Bridge - equipment finance

 

333,125

 

1.4

%

 

 

341,369

 

1.5

%

 

 

357,599

 

1.5

%

Mortgage warehouse lending ("MWL")

 

816,797

 

3.4

%

 

 

701,172

 

3.0

%

 

 

1,092,133

 

4.6

%

 

$

24,100,014

 

100.0

%

 

$

23,370,029

 

100.0

%

 

$

23,765,053

 

100.0

%

In aggregate, commercial loans, excluding the runoff of PPP, grew by $553 million during the quarter ended June 30, 2022. The largest increase was in the commercial and industrial segment, including owner-occupied commercial real estate, which grew by $474 million for the quarter, followed by growth in MWL of $116 million. MWL utilization was 46% at June 30, 2022 compared to 39% at March 31, 2022 and 56% at December 31, 2021. Residential and other consumer loans grew by $228 million during the quarter ended June 30, 2022.

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

Non-performing loans totaled $144.0 million or 0.60% of total loans at June 30, 2022, compared to $150.8 million or 0.65% of total loans at March 31, 2022. Non-performing loans included $43.4 million and $41.9 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.18% of total loans at both June 30, 2022 and March 31, 2022.

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

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

Special mention

$

89,153

 

$

95,250

 

$

148,593

Substandard - accruing

 

787,399

 

 

956,318

 

 

1,136,378

Substandard - non-accruing

 

117,518

 

 

104,329

 

 

129,579

Doubtful

 

7,971

 

 

26,678

 

 

47,754

Total

$

1,002,041

 

$

1,182,575

 

$

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 June 30, 2022 and March 31, 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

%

March 31, 2022

$

125,443

 

0.54

%

 

83.17

%

 

0.15

%

June 30, 2022

$

130,239

 

0.54

%

 

90.45

%

 

0.23

%

______________________________

(1)

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

(2)

Annualized for the three months ended March 31, 2022 and the six months ended June 30, 2022.

The ACL at June 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. The estimate was informed by Moody's economic scenarios published in June 2022, economic information provided by additional sources including developments subsequent to publishing of the scenarios, information about borrower financial condition and collateral values and other relevant information.

For the quarter ended June 30, 2022, the Company recorded a provision for credit losses of $24.0 million, which included a provision of $23.2 million related to funded loans. Factors impacting the provision for credit losses for the quarter ended June 30, 2022 included loan growth, an increase in qualitative factors and an increase in specific reserves.

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

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Beginning balance

$

125,443

 

 

$

220,934

 

 

$

126,457

 

 

$

257,323

 

Provision (recovery)

 

23,207

 

 

 

(27,663

)

 

 

30,653

 

 

 

(53,969

)

Net charge-offs

 

(18,411

)

 

 

(17,629

)

 

 

(26,871

)

 

 

(27,712

)

Ending balance

$

130,239

 

 

$

175,642

 

 

$

130,239

 

 

$

175,642

 

Net Interest Income

Net interest income for the quarter ended June 30, 2022 was $225.4 million compared to $208.6 million for the immediately preceding quarter ended March 31, 2022 and $198.3 million for the quarter ended June 30, 2021. Interest income increased by $31.0 million for the quarter ended June 30, 2022 compared to the immediately preceding quarter. Interest expense increased by $14.2 million compared to the immediately preceding quarter.

The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.13% to 2.63% for the quarter ended June 30, 2022, from 2.50% for the immediately preceding quarter ended March 31, 2022. Factors impacting the net interest margin for the quarter ended June 30, 2022 included:

  • The tax-equivalent yield on investment securities increased to 2.12% for the quarter ended June 30, 2022, from 1.73% for the quarter ended March 31, 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 3.59% for the quarter ended June 30, 2022, from 3.36% for the quarter ended March 31, 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 0.45% for the quarter ended June 30, 2022, from 0.24% for the quarter ended March 31, 2022, primarily in response to the rising interest rate environment.

Non-interest income and Non-interest expense

Non-interest income totaled $13.5 million for the quarter ended June 30, 2022 compared to $14.3 million for the quarter ended March 31, 2022 and $32.8 million for the quarter ended June 30, 2021.

  • Gain (loss) on investment securities was a net loss of $(8.4) million for the quarter ended June 30, 2022 compared to a net loss of $(7.9) million for the quarter ended March 31, 2022, and a net gain of $4.2 million for the quarter ended June 30, 2021. The net losses for the quarters ended June 30, 2022 and March 31, 2022 were attributable to $9.3 million and $10.5 million declines, respectively, in the fair value of certain preferred stock investments resulting from rising market interest rates.
  • The decline in other non-interest income for the quarter ended June 30, 2022 compared to the quarter ended June 30, 2021 reflected declines in BOLI revenue and gain on sale of loans.

Employee compensation and benefits declined by $4.6 million for the quarter ended June 30, 2022, compared to the quarter ended March 31, 2022. Seasonal declines in payroll taxes and certain other benefits combined with lower compensation expense related to liability classified share awards resulting from a lower stock price were partially offset by the impact of salary increases and higher head count.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, July 21, 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/BI46cdf2737b4a45dc8e0f6a39d5fdf9c1. 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 June 30, 2022, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 60 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)

 

 

June 30,

2022

 

December 31,

2021

ASSETS

 

 

 

Cash and due from banks:

 

 

 

Non-interest bearing

$

18,531

 

 

$

19,143

 

Interest bearing

 

495,242

 

 

 

295,714

 

Cash and cash equivalents

 

513,773

 

 

 

314,857

 

Investment securities (including securities recorded at fair value of $10,093,504 and $10,054,198)

 

10,103,504

 

 

 

10,064,198

 

Non-marketable equity securities

 

213,409

 

 

 

135,859

 

Loans

 

24,100,014

 

 

 

23,765,053

 

Allowance for credit losses

 

(130,239

)

 

 

(126,457

)

Loans, net

 

23,969,775

 

 

 

23,638,596

 

Bank owned life insurance

 

310,970

 

 

 

309,477

 

Operating lease equipment, net

 

605,769

 

 

 

640,726

 

Goodwill

 

77,637

 

 

 

77,637

 

Other assets

 

756,567

 

 

 

634,046

 

Total assets

$

36,551,404

 

 

$

35,815,396

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Liabilities:

 

 

 

Demand deposits:

 

 

 

Non-interest bearing

$

9,645,056

 

 

$

8,975,621

 

Interest bearing

 

2,868,417

 

 

 

3,709,493

 

Savings and money market

 

13,222,845

 

 

 

13,368,745

 

Time

 

2,724,581

 

 

 

3,384,243

 

Total deposits

 

28,460,899

 

 

 

29,438,102

 

Federal funds purchased

 

 

 

 

199,000

 

FHLB advances

 

4,005,000

 

 

 

1,905,000

 

Notes and other borrowings

 

721,166

 

 

 

721,416

 

Other liabilities

 

858,322

 

 

 

514,117

 

Total liabilities

 

34,045,387

 

 

 

32,777,635

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 77,944,216 and 85,647,986 shares issued and outstanding

 

779

 

 

 

856

 

Paid-in capital

 

387,583

 

 

 

707,503

 

Retained earnings

 

2,438,050

 

 

 

2,345,342

 

Accumulated other comprehensive loss

 

(320,395

)

 

 

(15,940

)

Total stockholders' equity

 

2,506,017

 

 

 

3,037,761

 

Total liabilities and stockholders' equity

$

36,551,404

 

 

$

35,815,396

 

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,

 

2022

 

2022

 

2021

 

2022

 

2021

Interest income:

 

 

 

 

 

 

 

 

 

Loans

$

209,223

 

 

$

191,562

 

 

$

202,520

 

 

$

400,785

 

 

$

407,855

 

Investment securities

 

54,771

 

 

 

43,048

 

 

 

37,674

 

 

 

97,819

 

 

 

76,175

 

Other

 

2,979

 

 

 

1,354

 

 

 

1,607

 

 

 

4,333

 

 

 

3,200

 

Total interest income

 

266,973

 

 

 

235,964

 

 

 

241,801

 

 

 

502,937

 

 

 

487,230

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

20,501

 

 

 

11,862

 

 

 

17,316

 

 

 

32,363

 

 

 

39,692

 

Borrowings

 

21,056

 

 

 

15,460

 

 

 

26,174

 

 

 

36,516

 

 

 

52,987

 

Total interest expense

 

41,557

 

 

 

27,322

 

 

 

43,490

 

 

 

68,879

 

 

 

92,679

 

Net interest income before provision for credit losses

 

225,416

 

 

 

208,642

 

 

 

198,311

 

 

 

434,058

 

 

 

394,551

 

Provision for (recovery of) credit losses

 

23,996

 

 

 

7,830

 

 

 

(27,534

)

 

 

31,826

 

 

 

(55,523

)

Net interest income after provision for credit losses

 

201,420

 

 

 

200,812

 

 

 

225,845

 

 

 

402,232

 

 

 

450,074

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Deposit service charges and fees

 

5,896

 

 

 

5,960

 

 

 

5,417

 

 

 

11,856

 

 

 

10,317

 

Gain (loss) on investment securities, net

 

(8,392

)

 

 

(7,868

)

 

 

4,155

 

 

 

(16,260

)

 

 

6,520

 

Lease financing

 

13,363

 

 

 

13,415

 

 

 

13,522

 

 

 

26,778

 

 

 

26,010

 

Other non-interest income

 

2,583

 

 

 

2,794

 

 

 

9,663

 

 

 

5,377

 

 

 

20,206

 

Total non-interest income

 

13,450

 

 

 

14,301

 

 

 

32,757

 

 

 

27,751

 

 

 

63,053

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

62,461

 

 

 

67,088

 

 

 

56,459

 

 

 

129,549

 

 

 

115,747

 

Occupancy and equipment

 

11,399

 

 

 

11,512

 

 

 

11,492

 

 

 

22,911

 

 

 

23,367

 

Deposit insurance expense

 

3,993

 

 

 

3,403

 

 

 

4,222

 

 

 

7,396

 

 

 

11,672

 

Professional fees

 

3,256

 

 

 

2,262

 

 

 

2,139

 

 

 

5,518

 

 

 

4,051

 

Technology and telecommunications

 

17,898

 

 

 

17,004

 

 

 

16,851

 

 

 

34,902

 

 

 

32,592

 

Depreciation and impairment of operating lease equipment

 

12,585

 

 

 

12,610

 

 

 

12,834

 

 

 

25,195

 

 

 

25,051

 

Other non-interest expense

 

15,810

 

 

 

12,445

 

 

 

14,455

 

 

 

28,255

 

 

 

29,193

 

Total non-interest expense

 

127,402

 

 

 

126,324

 

 

 

118,452

 

 

 

253,726

 

 

 

241,673

 

Income before income taxes

 

87,468

 

 

 

88,789

 

 

 

140,150

 

 

 

176,257

 

 

 

271,454

 

Provision for income taxes

 

21,704

 

 

 

21,639

 

 

 

36,176

 

 

 

43,343

 

 

 

68,666

 

Net income

$

65,764

 

 

$

67,150

 

 

$

103,974

 

 

$

132,914

 

 

$

202,788

 

Earnings per common share, basic

$

0.82

 

 

$

0.79

 

 

$

1.12

 

 

$

1.61

 

 

$

2.18

 

Earnings per common share, diluted

$

0.82

 

 

$

0.79

 

 

$

1.11

 

 

$

1.60

 

 

$

2.17

 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

 

 

 

 

 

Three Months Ended June 30, 2022

 

Three Months Ended March 31, 2022

 

Three Months Ended June 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

$

23,709,190

 

 

$

212,395

 

3.59

%

 

$

23,349,143

 

 

$

194,551

 

3.36

%

 

$

22,996,564

 

 

$

205,940

 

3.59

%

Investment securities (3)

 

10,477,600

 

 

 

55,488

 

2.12

%

 

 

10,083,083

 

 

 

43,719

 

1.73

%

 

 

9,839,422

 

 

 

38,338

 

1.56

%

Other interest earning assets

 

718,904

 

 

 

2,979

 

1.66

%

 

 

674,640

 

 

 

1,354

 

0.81

%

 

 

1,380,317

 

 

 

1,607

 

0.47

%

Total interest earning assets

 

34,905,694

 

 

 

270,862

 

3.11

%

 

 

34,106,866

 

 

 

239,624

 

2.83

%

 

 

34,216,303

 

 

 

245,885

 

2.88

%

Allowance for credit losses

 

(127,864

)

 

 

 

 

 

 

(129,028

)

 

 

 

 

 

 

(215,151

)

 

 

 

 

Non-interest earning assets

 

1,669,689

 

 

 

 

 

 

 

1,674,476

 

 

 

 

 

 

 

1,732,676

 

 

 

 

 

Total assets

$

36,447,519

 

 

 

 

 

 

$

35,652,314

 

 

 

 

 

 

$

35,733,828

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

2,576,257

 

 

$

1,742

 

0.27

%

 

$

3,078,176

 

 

$

1,369

 

0.18

%

 

$

3,069,945

 

 

$

2,594

 

0.34

%

Savings and money market deposits

 

13,052,566

 

 

 

15,213

 

0.47

%

 

 

13,401,332

 

 

 

6,931

 

0.21

%

 

 

13,541,237

 

 

 

11,307

 

0.33

%

Time deposits

 

2,812,988

 

 

 

3,546

 

0.51

%

 

 

3,319,585

 

 

 

3,562

 

0.44

%

 

 

3,380,582

 

 

 

3,415

 

0.41

%

Total interest bearing deposits

 

18,441,811

 

 

 

20,501

 

0.45

%

 

 

19,799,093

 

 

 

11,862

 

0.24

%

 

 

19,991,764

 

 

 

17,316

 

0.35

%

Federal funds purchased

 

115,146

 

 

 

155

 

0.53

%

 

 

187,400

 

 

 

58

 

0.12

%

 

 

 

 

 

 

%

FHLB advances

 

4,373,736

 

 

 

11,644

 

1.07

%

 

 

2,248,889

 

 

 

6,146

 

1.11

%

 

 

2,873,922

 

 

 

16,922

 

2.36

%

Notes and other borrowings

 

721,284

 

 

 

9,257

 

5.13

%

 

 

721,405

 

 

 

9,256

 

5.13

%

 

 

721,753

 

 

 

9,252

 

5.13

%

Total interest bearing liabilities

 

23,651,977

 

 

 

41,557

 

0.70

%

 

 

22,956,787

 

 

 

27,322

 

0.48

%

 

 

23,587,439

 

 

 

43,490

 

0.74

%

Non-interest bearing demand deposits

 

9,419,025

 

 

 

 

 

 

 

9,047,864

 

 

 

 

 

 

 

8,163,879

 

 

 

 

 

Other non-interest bearing liabilities

 

654,162

 

 

 

 

 

 

 

623,200

 

 

 

 

 

 

 

851,044

 

 

 

 

 

Total liabilities

 

33,725,164

 

 

 

 

 

 

 

32,627,851

 

 

 

 

 

 

 

32,602,362

 

 

 

 

 

Stockholders' equity

 

2,722,355

 

 

 

 

 

 

 

3,024,463

 

 

 

 

 

 

 

3,131,466

 

 

 

 

 

Total liabilities and stockholders' equity

$

36,447,519

 

 

 

 

 

 

$

35,652,314

 

 

 

 

 

 

$

35,733,828

 

 

 

 

 

Net interest income

 

 

$

229,305

 

 

 

 

 

$

212,302

 

 

 

 

 

$

202,395

 

 

Interest rate spread

 

 

 

 

2.41

%

 

 

 

 

 

2.35

%

 

 

 

 

 

2.14

%

Net interest margin

 

 

 

 

2.63

%

 

 

 

 

 

2.50

%

 

 

 

 

 

2.37

%

______________________________

(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,

 

2022

 

2021

 

Average

Balance

 

Interest (1)

 

Yield/

Rate

(1)(2)

 

Average

Balance

 

Interest (1)

 

Yield/

Rate

(1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans

$

23,530,162

 

 

$

406,946

 

3.47

%

 

$

23,271,410

 

 

$

414,761

 

3.58

%

Investment securities (3)

 

10,281,431

 

 

 

99,207

 

1.93

%

 

 

9,456,929

 

 

 

77,525

 

1.64

%

Other interest earning assets

 

696,894

 

 

 

4,333

 

1.25

%

 

 

1,222,456

 

 

 

3,200

 

0.53

%

Total interest earning assets

 

34,508,487

 

 

 

510,486

 

2.97

%

 

 

33,950,795

 

 

 

495,486

 

2.93

%

Allowance for credit losses

 

(128,443

)

 

 

 

 

 

 

(234,686

)

 

 

 

 

Non-interest earning assets

 

1,672,070

 

 

 

 

 

 

 

1,728,449

 

 

 

 

 

Total assets

$

36,052,114

 

 

 

 

 

 

$

35,444,558

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

2,825,830

 

 

 

3,111

 

0.22

%

 

$

3,006,760

 

 

 

5,368

 

0.36

%

Savings and money market deposits

 

13,225,986

 

 

 

22,866

 

0.35

%

 

 

13,169,195

 

 

 

23,434

 

0.36

%

Time deposits

 

3,064,887

 

 

 

6,386

 

0.42

%

 

 

3,853,057

 

 

 

10,890

 

0.57

%

Total interest bearing deposits

 

19,116,703

 

 

 

32,363

 

0.34

%

 

 

20,029,012

 

 

 

39,692

 

0.40

%

Federal funds purchased

 

151,074

 

 

 

213

 

0.28

%

 

 

3,978

 

 

 

2

 

0.10

%

FHLB and PPPLF borrowings

 

3,317,182

 

 

 

17,790

 

1.08

%

 

 

2,972,770

 

 

 

34,480

 

2.34

%

Notes and other borrowings

 

721,344

 

 

 

18,513

 

5.13

%

 

 

722,028

 

 

 

18,505

 

5.13

%

Total interest bearing liabilities

 

23,306,303

 

 

 

68,879

 

0.59

%

 

 

23,727,788

 

 

 

92,679

 

0.79

%

Non-interest bearing demand deposits

 

9,234,469

 

 

 

 

 

 

 

7,829,422

 

 

 

 

 

Other non-interest bearing liabilities

 

638,767

 

 

 

 

 

 

 

799,297

 

 

 

 

 

Total liabilities

 

33,179,539

 

 

 

 

 

 

 

32,356,507

 

 

 

 

 

Stockholders' equity

 

2,872,575

 

 

 

 

 

 

 

3,088,051

 

 

 

 

 

Total liabilities and stockholders' equity

$

36,052,114

 

 

 

 

 

 

$

35,444,558

 

 

 

 

 

Net interest income

 

 

$

441,607

 

 

 

 

 

$

402,807

 

 

Interest rate spread

 

 

 

 

2.38

%

 

 

 

 

 

2.14

%

Net interest margin

 

 

 

 

2.57

%

 

 

 

 

 

2.38

%

______________________________

(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,

2022

 

2021

 

2022

 

2021

Basic earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income

$

65,764

 

 

$

103,974

 

 

$

132,914

 

 

$

202,788

 

Distributed and undistributed earnings allocated to participating securities

 

(999

)

 

 

(1,338

)

 

 

(1,927

)

 

 

(2,589

)

Income allocated to common stockholders for basic earnings per common share

$

64,765

 

 

$

102,636

 

 

$

130,987

 

 

$

200,199

 

Denominator:

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

80,300,069

 

 

 

93,245,282

 

 

 

82,629,098

 

 

 

93,160,962

 

Less average unvested stock awards

 

(1,257,258

)

 

 

(1,241,381

)

 

 

(1,234,678

)

 

 

(1,223,555

)

Weighted average shares for basic earnings per common share

 

79,042,811

 

 

 

92,003,901

 

 

 

81,394,420

 

 

 

91,937,407

 

Basic earnings per common share

$

0.82

 

 

$

1.12

 

 

$

1.61

 

 

$

2.18

 

Diluted earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Income allocated to common stockholders for basic earnings per common share

$

64,765

 

 

$

102,636

 

 

$

130,987

 

 

$

200,199

 

Adjustment for earnings reallocated from participating securities

 

3

 

 

 

2

 

 

 

4

 

 

 

3

 

Income used in calculating diluted earnings per common share

$

64,768

 

 

$

102,638

 

 

$

130,991

 

 

$

200,202

 

Denominator:

 

 

 

 

 

 

 

Weighted average shares for basic earnings per common share

 

79,042,811

 

 

 

92,003,901

 

 

 

81,394,420

 

 

 

91,937,407

 

Dilutive effect of certain share-based awards

 

350,734

 

 

 

181,061

 

 

 

244,808

 

 

 

137,542

 

Weighted average shares for diluted earnings per common share

 

79,393,545

 

 

 

92,184,962

 

 

 

81,639,228

 

 

 

92,074,949

 

Diluted earnings per common share

$

0.82

 

 

$

1.11

 

 

$

1.60

 

 

$

2.17

 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Financial ratios (4)

 

 

 

 

 

 

 

Return on average assets

0.72

%

 

1.17

%

 

0.74

%

 

1.15

%

Return on average stockholders’ equity

9.7

%

 

13.3

%

 

9.3

%

 

13.2

%

Net interest margin (3)

2.63

%

 

2.37

%

 

2.57

%

 

2.38

%

 

June 30, 2022

 

December 31, 2021

Asset quality ratios

 

 

 

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

0.60

%

 

0.87

%

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

0.41

%

 

0.58

%

Allowance for credit losses to total loans

0.54

%

 

0.53

%

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

90.45

%

 

61.41

%

Net charge-offs to average loans (4)

0.23

%

 

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 six month periods.

(5)

 

Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $43.4 million or 0.18% of total loans and 0.12% of total assets at June 30, 2022 and $46.1 million or 0.19% of total loans and 0.13% of total assets at December 31, 2021.

 

June 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

7.5

%

 

8.8

%

 

8.4

%

 

9.6

%

 

5.0

%

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

11.3

%

 

13.3

%

 

12.6

%

 

14.5

%

 

6.5

%

Total risk-based capital

13.0

%

 

13.8

%

 

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):

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

Total loans (GAAP)

$

24,100,014

 

 

$

23,370,029

 

 

$

23,765,053

 

Less: Government insured residential loans

 

1,928,779

 

 

 

1,938,479

 

 

 

2,023,221

 

Less: PPP loans

 

29,828

 

 

 

80,296

 

 

 

248,505

 

Less: MWL

 

816,797

 

 

 

701,172

 

 

 

1,092,133

 

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

$

21,324,610

 

 

$

20,650,082

 

 

$

20,401,194

 

 

 

 

 

 

 

ACL

$

130,239

 

 

$

125,443

 

 

$

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)

 

0.61

%

 

 

0.61

%

 

 

0.62

%

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, 2022

 

December 31, 2021

Total stockholders’ equity (GAAP)

$

2,506,017

 

$

3,037,761

Less: goodwill

 

77,637

 

 

77,637

Tangible stockholders’ equity (non-GAAP)

$

2,428,380

 

$

2,960,124

 

 

 

 

Common shares issued and outstanding

 

77,944,216

 

 

85,647,986

 

 

 

 

Book value per common share (GAAP)

$

32.15

 

$

35.47

 

 

 

 

Tangible book value per common share (non-GAAP)

$

31.16

 

$

34.56

 

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