Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries BankUnited, Inc. Reports 2022 Results By: BankUnited, Inc. via Business Wire January 19, 2023 at 06:45 AM EST BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2022. "We finished 2022 strong, with good growth, margin expansion and the launch of Atlanta and the Dallas branch. We're optimistic going into 2023," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended December 31, 2022, the Company reported net income of $64.2 million, or $0.82 per diluted share, compared to $87.9 million, or $1.12 per diluted share for the immediately preceding quarter ended September 30, 2022 and $125.3 million, or $1.41 per diluted share, for the quarter ended December 31, 2021. For the year ended December 31, 2022, the Company reported net income of $285.0 million, or $3.54 per diluted share, compared to $415.0 million, or $4.52 per diluted share, for the year ended December 31, 2021. Quarterly Highlights BankUnited was ranked #1 in comprehensive innovation, #2 in bank reputation among customers and #9 in bank reputation among non-customers in an annual survey by the American Banker and RepTrak, published in November 2022. The survey encompassed 41 large, regional and nontraditional banks. Pre-tax, pre-provision net revenue ("PPNR") was $121.4 million for the quarter ended December 31, 2022, compared to $120.8 million for the immediately preceding quarter ended September 30, 2022 and $63.8 million for the quarter ended December 31, 2021. PPNR for the quarter ended December 31, 2021 was impacted by certain significant notable items, further discussed below in the section titled "Non-interest income and Non-interest expense." Loans grew by $619 million for the quarter ended December 31, 2022. The core C&I and commercial real estate portfolio segments grew by a total of $722 million. For the year ended December 31, 2022, excluding the decline in PPP loans, total loans grew by 6% or $1.4 billion. Total deposits grew by $160 million during the quarter ended December 31, 2022. Not unexpectedly in the current interest rate environment, non-interest bearing demand deposits declined by $756 million to 29% of total deposits, while interest bearing deposits grew by $916 million. The net interest margin, calculated on a tax-equivalent basis, expanded to 2.81% for the quarter ended December 31, 2022, from 2.76% for the immediately preceding quarter and 2.44% for the quarter ended December 31, 2021. Net interest income increased by $7.2 million, compared to the immediately preceding quarter ended September 30, 2022 and by $37.1 million compared to the quarter ended December 31, 2021. Net interest income for the year ended December 31, 2022 grew by 15% compared to the prior year, while the net interest margin expanded by 30 basis points year-over-year. In response to the rising interest rate environment and tightening liquidity, the average cost of total deposits rose to 1.42% for the quarter ended December 31, 2022, from 0.78% for the immediately preceding quarter ended September 30, 2022 and 0.19% for the quarter ended December 31, 2021. The yield on average interest earning assets increased to 4.60% for the quarter ended December 31, 2022, from 3.80% for the immediately preceding quarter and 2.81% for the quarter ended December 31, 2021. For the quarter ended December 31, 2022, the Company recorded a provision for credit losses of $39.6 million compared to provisions of $3.7 million and $0.2 million for the quarters ended September 30, 2022 and December 31, 2021, respectively. Despite the decline in non-performing loans, we built reserves during the quarter in light of a worsening baseline economic forecast and a heightened level of uncertainty regarding the trajectory of the economy. The provision for credit losses for the quarter ended December 31, 2022 was also impacted by loan growth and an increase in certain specific reserves. The ratio of the ACL to total loans increased to 0.59%, from 0.54% at September 30, 2022. During the quarter ended December 31, 2022, the Company repurchased approximately 1.9 million shares of its common stock for an aggregate purchase price of $64.7 million, at a weighted average price of $33.92 per share. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Residential and other consumer loans $ 8,900,714 35.7 % $ 8,853,884 36.4 % $ 8,368,380 35.2 % Non-owner occupied commercial real estate 5,405,597 21.7 % 5,331,232 22.1 % 5,536,348 23.3 % Construction and land 294,360 1.2 % 246,202 1.0 % 165,390 0.7 % Owner occupied commercial real estate 1,890,813 7.6 % 1,919,074 7.9 % 1,944,658 8.2 % Commercial and industrial 6,414,351 25.9 % 5,786,907 23.9 % 4,790,275 20.2 % PPP 3,370 — % 10,191 — % 248,505 1.0 % Pinnacle 912,122 3.7 % 932,187 3.8 % 919,641 3.9 % Bridge - franchise finance 253,774 1.0 % 254,137 1.0 % 342,124 1.4 % Bridge - equipment finance 286,147 1.1 % 310,035 1.3 % 357,599 1.5 % Mortgage warehouse lending ("MWL") 524,740 2.1 % 622,883 2.6 % 1,092,133 4.6 % $ 24,885,988 100.0 % $ 24,266,732 100.0 % $ 23,765,053 100.0 % Total loans grew by $619 million for the quarter ended December 31, 2022. In the aggregate, the core C&I and commercial real estate portfolio segments grew by $722 million. The commercial and industrial segment, including owner-occupied commercial real estate, grew by $599 million for the quarter, while commercial real estate loans grew by $123 million. As expected, the remaining commercial segments declined during the quarter while the residential portfolio grew modestly. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $105.0 million or 0.42% of total loans at December 31, 2022, down from $156.4 million or 0.64% of total loans at September 30, 2022 and $205.9 million or 0.87% of total loans at December 31, 2021. Non-performing loans included $40.3 million, $41.8 million and $46.1 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.16%, 0.17% and 0.19% of total loans at December 31, 2022, September 30, 2022 and December 31, 2021, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Special mention $ 51,433 $ 26,939 $ 148,593 Substandard - accruing 605,965 662,716 1,136,378 Substandard - non-accruing 75,125 104,994 129,579 Doubtful 7,990 32,093 47,754 Total $ 740,513 $ 826,742 $ 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 December 31, 2022, September 30, 2022, and December 31, 2021 (dollars in thousands): ACL ACL to Total Loans ACL to Non- Performing Loans Net Charge-offs to Average Loans (1) December 31, 2021 $ 126,457 0.53 % 61.41 % 0.29 % September 30, 2022 $ 130,671 0.54 % 83.54 % 0.16 % December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % ____________ (1) Annualized for the nine months ended September 30, 2022. The ACL at December 31, 2022 represents management's estimate of lifetime expected credit losses given our assessment of historical data, current conditions and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended December 31, 2022, the Company recorded a provision for credit losses of $39.6 million, including $40.4 million related to funded loans. The most significant factor impacting the provision for credit losses for the quarter ended December 31, 2022 was the economic forecast and uncertainty about the trajectory of the economy, which impacted both the quantitative and qualitative portions of the ACL. New loan production and increases in certain specific reserves also impacted the provision for the quarter. For the year ended December 31, 2022 the provision for credit losses totaled $75.2 million, compared to a recovery of the provision of $(67.1) million for the year ended December 31, 2021. The provision for 2022 reflected consideration of emerging economic uncertainty and increasing probability of a recession, while the recovery for 2021 reflected the release of reserves built at the time of onset of the COVID-19 pandemic. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 Beginning balance $ 130,671 $ 159,615 $ 126,457 $ 257,323 Provision (recovery) 40,408 1,067 73,814 (64,456 ) Net charge-offs (23,133 ) (34,225 ) (52,325 ) (66,410 ) Ending balance $ 147,946 $ 126,457 $ 147,946 $ 126,457 Net Interest Income Net interest income for the quarter ended December 31, 2022 was $243.1 million, compared to $235.8 million for the immediately preceding quarter ended September 30, 2022 and $206.0 million for the quarter ended December 31, 2021. Interest income increased by $75.5 million for the quarter ended December 31, 2022, compared to the immediately preceding quarter while interest expense increased by $68.2 million. The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.05% to 2.81% for the quarter ended December 31, 2022, from 2.76% for the immediately preceding quarter ended September 30, 2022. Factors impacting the net interest margin for the quarter ended December 31, 2022 included: The tax-equivalent yield on investment securities increased to 4.33% for the quarter ended December 31, 2022, from 3.12% for the quarter ended September 30, 2022. This increase resulted from the reset of coupon rates on variable rate securities and to a lesser extent, purchases of higher yielding securities. The tax-equivalent yield on loans increased to 4.72% for the quarter ended December 31, 2022, from 4.11% for the quarter ended September 30, 2022. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase. The average rate paid on interest bearing deposits increased to 2.06% for the quarter ended December 31, 2022, from 1.14% for the quarter ended September 30, 2022, in response to the rising interest rate environment and tightening liquidity conditions. Time deposits grew as a percentage of interest bearing deposits as we deployed a strategy to extend the term of interest bearing deposits. The average rate paid on FHLB advances increased to 3.44% for the quarter ended December 31, 2022, from 2.25% for the quarter ended September 30, 2022, primarily in response to the rising interest rate environment. Non-interest income and Non-interest expense Non-interest income totaled $26.8 million for the quarter ended December 31, 2022, compared to $23.1 million for the quarter ended September 30, 2022 and $45.6 million for the quarter ended December 31, 2021. During the quarter ended December 31, 2021, the Company sold a portfolio of single-family residential loans for a gain of $18.2 million. Non-interest income totaled $77.6 million for the year ended December 31, 2022, compared to $134.2 million for the year ended December 31, 2021. The year-over-year decline is primarily attributable to (i) the gain on sale of residential loans in the fourth quarter of 2021 discussed above, (ii) a $19.7 million decline in the fair value of certain preferred stock investments included in net loss on investment securities for the year ended December 31, 2022, and (iii) a decline in "other" non-interest income related primarily to lower BOLI revenue. Non-interest expense totaled $148.5 million for the quarter ended December 31, 2022, compared to $138.1 million for the immediately preceding quarter ended September 30, 2022 and $187.9 million for the quarter ended December 31, 2021. Non-interest expense totaled $540.3 million and $547.6 million for the years ended December 31, 2022 and 2021, respectively. Non-interest expense for the quarter and year ended December 31, 2021 included a loss of $44.8 million on discontinuance of cash flow hedges. Quarter-over-quarter and year-over-year increases in employee compensation and benefits and in technology expense reflected labor market dynamics and continued investment in people and technology to support future growth. Provision (benefit) for income taxes The effective income tax rate was 21.5% and 24.0% for the quarter and year ended December 31, 2022, compared to (97.2)% and 7.7% for the quarter and year ended December 31, 2021. The effective income tax rate for both the quarter and year ended December 31, 2021 was positively impacted by $69.1 million in discrete tax benefits recognized in the fourth quarter of 2021. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, January 19, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BI9a423dcb6b32467695ab75bc2d26717e. 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 $37.0 billion at December 31, 2022, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 54 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) December 31, 2022 December 31, 2021 ASSETS Cash and due from banks: Non-interest bearing $ 16,068 $ 19,143 Interest bearing 556,579 295,714 Cash and cash equivalents 572,647 314,857 Investment securities (including securities recorded at fair value of $9,745,327 and $10,054,198) 9,755,327 10,064,198 Non-marketable equity securities 294,172 135,859 Loans 24,885,988 23,765,053 Allowance for credit losses (147,946 ) (126,457 ) Loans, net 24,738,042 23,638,596 Bank owned life insurance 308,212 309,477 Operating lease equipment, net 539,799 640,726 Goodwill 77,637 77,637 Other assets 740,876 634,046 Total assets $ 37,026,712 $ 35,815,396 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 8,037,848 $ 8,975,621 Interest bearing 2,142,067 3,709,493 Savings and money market 13,061,341 13,368,745 Time 4,268,078 3,384,243 Total deposits 27,509,334 29,438,102 Federal funds purchased 190,000 199,000 FHLB advances 5,420,000 1,905,000 Notes and other borrowings 720,923 721,416 Other liabilities 750,474 514,117 Total liabilities 34,590,731 32,777,635 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 75,674,587 and 85,647,986 shares issued and outstanding 757 856 Paid-in capital 321,729 707,503 Retained earnings 2,551,400 2,345,342 Accumulated other comprehensive loss (437,905 ) (15,940 ) Total stockholders' equity 2,435,981 3,037,761 Total liabilities and stockholders' equity $ 37,026,712 $ 35,815,396 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 2022 2021 Interest income: Loans $ 288,973 $ 244,884 $ 198,275 $ 934,642 $ 800,819 Investment securities 105,172 77,109 38,201 280,100 152,619 Other 7,345 4,031 1,397 15,709 6,010 Total interest income 401,490 326,024 237,873 1,230,451 959,448 Interest expense: Deposits 94,403 53,206 13,631 179,972 67,596 Borrowings 64,021 36,982 18,227 137,519 96,164 Total interest expense 158,424 90,188 31,858 317,491 163,760 Net interest income before provision for credit losses 243,066 235,836 206,015 912,960 795,688 Provision for (recovery of) credit losses 39,608 3,720 246 75,154 (67,119 ) Net interest income after provision for credit losses 203,458 232,116 205,769 837,806 862,807 Non-interest income: Deposit service charges and fees 5,482 6,064 5,815 23,402 21,685 Gain (loss) on sale of loans, net (335 ) (613 ) 19,003 (2,570 ) 24,394 Gain (loss) on investment securities, net 320 135 590 (15,805 ) 6,446 Lease financing 14,153 13,180 14,041 54,111 53,263 Other non-interest income 7,193 4,306 6,173 18,498 28,365 Total non-interest income 26,813 23,072 45,622 77,636 134,153 Non-interest expense: Employee compensation and benefits 69,902 66,097 70,561 265,548 243,532 Occupancy and equipment 10,770 11,719 12,817 45,400 47,944 Deposit insurance expense 6,205 4,398 3,471 17,999 18,695 Professional fees 3,028 3,184 8,023 11,730 14,386 Technology 22,388 19,813 18,221 77,103 67,500 Discontinuance of cash flow hedges — — 44,833 — 44,833 Depreciation and impairment of operating lease equipment 12,547 12,646 15,769 50,388 53,764 Other non-interest expense 23,639 20,248 14,165 72,142 56,921 Total non-interest expense 148,479 138,105 187,860 540,310 547,575 Income before income taxes 81,792 117,083 63,531 375,132 449,385 Provision (benefit) for income taxes 17,585 29,233 (61,724 ) 90,161 34,401 Net income $ 64,207 $ 87,850 $ 125,255 $ 284,971 $ 414,984 Earnings per common share, basic $ 0.83 $ 1.13 $ 1.42 $ 3.55 $ 4.52 Earnings per common share, diluted $ 0.82 $ 1.12 $ 1.41 $ 3.54 $ 4.52 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended December 31, 2022 Three Months Ended September 30, 2022 Three Months Ended December 31, 2021 Average Balance Interest (1) Yield/ Rate (1)(2) Average Balance Interest (1) Yield/ Rate (1)(2) Average Balance Interest (1) Yield/ Rate (1)(2) Assets: Interest earning assets: Loans $ 24,624,062 $ 292,272 4.72 % $ 24,053,742 $ 248,168 4.11 % $ 22,919,535 $ 201,345 3.50 % Investment securities (3) 9,788,969 106,034 4.33 % 9,981,486 77,840 3.12 % 10,113,026 38,889 1.54 % Other interest earning assets 710,315 7,345 4.10 % 596,879 4,031 2.68 % 1,184,056 1,397 0.47 % Total interest earning assets 35,123,346 405,651 4.60 % 34,632,107 330,039 3.80 % 34,216,617 241,631 2.81 % Allowance for credit losses (137,300 ) (133,828 ) (149,319 ) Non-interest earning assets 1,837,156 1,703,371 1,767,850 Total assets $ 36,823,202 $ 36,201,650 $ 35,835,148 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,183,854 $ 6,704 1.22 % $ 2,306,906 $ 4,104 0.71 % $ 3,058,355 $ 1,481 0.19 % Savings and money market deposits 12,054,892 68,001 2.24 % 13,001,566 39,838 1.22 % 13,460,084 9,619 0.28 % Time deposits 3,960,111 19,698 1.97 % 3,255,869 9,264 1.13 % 3,399,302 2,531 0.30 % Total interest bearing deposits 18,198,857 94,403 2.06 % 18,564,341 53,206 1.14 % 19,917,741 13,631 0.27 % Federal funds purchased 175,637 1,677 3.74 % 153,905 833 2.12 % 56,793 13 0.09 % FHLB advances 6,125,435 53,084 3.44 % 4,739,457 26,890 2.25 % 1,909,450 8,957 1.86 % Notes and other borrowings 721,044 9,260 5.14 % 721,164 9,259 5.14 % 721,525 9,257 5.13 % Total interest bearing liabilities 25,220,973 158,424 2.49 % 24,178,867 90,188 1.48 % 22,605,509 31,858 0.56 % Non-interest bearing demand deposits 8,237,885 8,749,794 9,330,805 Other non-interest bearing liabilities 879,207 697,440 785,254 Total liabilities 34,338,065 33,626,101 32,721,568 Stockholders' equity 2,485,137 2,575,549 3,113,580 Total liabilities and stockholders' equity $ 36,823,202 $ 36,201,650 $ 35,835,148 Net interest income $ 247,227 $ 239,851 $ 209,773 Interest rate spread 2.11 % 2.32 % 2.25 % Net interest margin 2.81 % 2.76 % 2.44 % _______________ (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) Years Ended December 31, 2022 2021 Average Balance Interest (1) Yield/ Rate (1) Average Balance Interest (1) Yield/ Rate (1) Assets: Interest earning assets: Loans $ 23,937,857 $ 947,386 3.96 % $ 23,083,973 $ 814,101 3.53 % Investment securities (2) 10,081,701 283,081 2.81 % 9,873,178 155,353 1.57 % Other interest earning assets 675,068 15,709 2.33 % 1,093,869 6,010 0.55 % Total interest earning assets 34,694,626 1,246,176 3.59 % 34,051,020 975,464 2.86 % Allowance for credit losses (132,033 ) (197,212 ) Non-interest earning assets 1,721,570 1,770,685 Total assets $ 36,284,163 $ 35,624,493 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,538,906 13,919 0.55 % $ 3,027,649 8,550 0.28 % Savings and money market deposits 12,874,240 130,705 1.02 % 13,339,651 43,082 0.32 % Time deposits 3,338,671 35,348 1.06 % 3,490,082 15,964 0.46 % Total interest bearing deposits 18,751,817 179,972 0.96 % 19,857,382 67,596 0.34 % Federal funds purchased 157,979 2,723 1.72 % 33,945 30 0.09 % FHLB advances 4,383,507 97,763 2.23 % 2,622,723 59,116 2.25 % Notes and other borrowings 721,223 37,033 5.13 % 721,803 37,018 5.13 % Total interest bearing liabilities 24,014,526 317,491 1.32 % 23,235,853 163,760 0.70 % Non-interest bearing demand deposits 8,861,111 8,480,964 Other non-interest bearing liabilities 708,473 784,031 Total liabilities 33,584,110 32,500,848 Stockholders' equity 2,700,053 3,123,645 Total liabilities and stockholders' equity $ 36,284,163 $ 35,624,493 Net interest income $ 928,685 $ 811,704 Interest rate spread 2.27 % 2.16 % Net interest margin 2.68 % 2.38 % _______________ (1) On a tax-equivalent basis where applicable (2) 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 December 31, Years Ended December 31, 2022 2021 2022 2021 Basic earnings per common share: Numerator: Net income $ 64,207 $ 125,255 $ 284,971 $ 414,984 Distributed and undistributed earnings allocated to participating securities (1,519 ) (2,059 ) (5,075 ) (5,991 ) Income allocated to common stockholders for basic earnings per common share $ 62,688 $ 123,196 $ 279,896 $ 408,993 Denominator: Weighted average common shares outstanding 77,043,587 88,123,835 80,032,356 91,612,243 Less average unvested stock awards (1,207,275 ) (1,193,180 ) (1,224,568 ) (1,212,055 ) Weighted average shares for basic earnings per common share 75,836,312 86,930,655 78,807,788 90,400,188 Basic earnings per common share $ 0.83 $ 1.42 $ 3.55 $ 4.52 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 62,688 $ 123,196 $ 279,896 $ 408,993 Adjustment for earnings reallocated from participating securities (184 ) (234 ) (626 ) (585 ) Income used in calculating diluted earnings per common share $ 62,504 $ 122,962 $ 279,270 $ 408,408 Denominator: Weighted average shares for basic earnings per common share 75,836,312 86,930,655 78,807,788 90,400,188 Dilutive effect of certain share-based awards 127 — 94 134 Weighted average shares for diluted earnings per common share 75,836,439 86,930,655 78,807,882 90,400,322 Diluted earnings per common share $ 0.82 $ 1.41 $ 3.54 $ 4.52 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 Financial ratios (4) Return on average assets 0.69 % 1.39 % 0.79 % 1.16 % Return on average stockholders’ equity 10.3 % 16.0 % 10.6 % 13.3 % Net interest margin (3) 2.81 % 2.44 % 2.68 % 2.38 % December 31, 2022 December 31, 2021 Asset quality ratios Non-performing loans to total loans (1)(5) 0.42 % 0.87 % Non-performing assets to total assets (2)(5) 0.29 % 0.58 % Allowance for credit losses to total loans 0.59 % 0.53 % Allowance for credit losses to non-performing loans (1)(5) 140.88 % 61.41 % Net charge-offs to average loans 0.22 % 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 month periods. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022 and $46.1 million or 0.19% of total loans and 0.13% of total assets at December 31, 2021. December 31, 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 % 8.4 % 8.4 % 9.6 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.0 % 12.4 % 12.6 % 14.5 % 6.5 % Total risk-based capital 12.7 % 12.9 % 14.3 % 14.9 % 10.0 % Non-GAAP Financial Measures PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses, particularly in view of recent volatility of the provision for credit losses. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following table reconciles the non-GAAP financial measure of PPNR to the comparable GAAP financial measurement of income before income taxes at the dates indicated (in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Income before income taxes (GAAP) $ 81,792 $ 117,083 $ 63,531 Plus: provision for credit losses 39,608 3,720 246 PPNR (non-GAAP) $ 121,400 $ 120,803 $ 63,777 View source version on businesswire.com: https://www.businesswire.com/news/home/20230119005081/en/Contacts BankUnited, Inc. Investor Relations: Leslie N. Lunak, 786-313-1698, llunak@bankunited.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
BankUnited, Inc. Reports 2022 Results By: BankUnited, Inc. via Business Wire January 19, 2023 at 06:45 AM EST BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2022. "We finished 2022 strong, with good growth, margin expansion and the launch of Atlanta and the Dallas branch. We're optimistic going into 2023," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended December 31, 2022, the Company reported net income of $64.2 million, or $0.82 per diluted share, compared to $87.9 million, or $1.12 per diluted share for the immediately preceding quarter ended September 30, 2022 and $125.3 million, or $1.41 per diluted share, for the quarter ended December 31, 2021. For the year ended December 31, 2022, the Company reported net income of $285.0 million, or $3.54 per diluted share, compared to $415.0 million, or $4.52 per diluted share, for the year ended December 31, 2021. Quarterly Highlights BankUnited was ranked #1 in comprehensive innovation, #2 in bank reputation among customers and #9 in bank reputation among non-customers in an annual survey by the American Banker and RepTrak, published in November 2022. The survey encompassed 41 large, regional and nontraditional banks. Pre-tax, pre-provision net revenue ("PPNR") was $121.4 million for the quarter ended December 31, 2022, compared to $120.8 million for the immediately preceding quarter ended September 30, 2022 and $63.8 million for the quarter ended December 31, 2021. PPNR for the quarter ended December 31, 2021 was impacted by certain significant notable items, further discussed below in the section titled "Non-interest income and Non-interest expense." Loans grew by $619 million for the quarter ended December 31, 2022. The core C&I and commercial real estate portfolio segments grew by a total of $722 million. For the year ended December 31, 2022, excluding the decline in PPP loans, total loans grew by 6% or $1.4 billion. Total deposits grew by $160 million during the quarter ended December 31, 2022. Not unexpectedly in the current interest rate environment, non-interest bearing demand deposits declined by $756 million to 29% of total deposits, while interest bearing deposits grew by $916 million. The net interest margin, calculated on a tax-equivalent basis, expanded to 2.81% for the quarter ended December 31, 2022, from 2.76% for the immediately preceding quarter and 2.44% for the quarter ended December 31, 2021. Net interest income increased by $7.2 million, compared to the immediately preceding quarter ended September 30, 2022 and by $37.1 million compared to the quarter ended December 31, 2021. Net interest income for the year ended December 31, 2022 grew by 15% compared to the prior year, while the net interest margin expanded by 30 basis points year-over-year. In response to the rising interest rate environment and tightening liquidity, the average cost of total deposits rose to 1.42% for the quarter ended December 31, 2022, from 0.78% for the immediately preceding quarter ended September 30, 2022 and 0.19% for the quarter ended December 31, 2021. The yield on average interest earning assets increased to 4.60% for the quarter ended December 31, 2022, from 3.80% for the immediately preceding quarter and 2.81% for the quarter ended December 31, 2021. For the quarter ended December 31, 2022, the Company recorded a provision for credit losses of $39.6 million compared to provisions of $3.7 million and $0.2 million for the quarters ended September 30, 2022 and December 31, 2021, respectively. Despite the decline in non-performing loans, we built reserves during the quarter in light of a worsening baseline economic forecast and a heightened level of uncertainty regarding the trajectory of the economy. The provision for credit losses for the quarter ended December 31, 2022 was also impacted by loan growth and an increase in certain specific reserves. The ratio of the ACL to total loans increased to 0.59%, from 0.54% at September 30, 2022. During the quarter ended December 31, 2022, the Company repurchased approximately 1.9 million shares of its common stock for an aggregate purchase price of $64.7 million, at a weighted average price of $33.92 per share. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Residential and other consumer loans $ 8,900,714 35.7 % $ 8,853,884 36.4 % $ 8,368,380 35.2 % Non-owner occupied commercial real estate 5,405,597 21.7 % 5,331,232 22.1 % 5,536,348 23.3 % Construction and land 294,360 1.2 % 246,202 1.0 % 165,390 0.7 % Owner occupied commercial real estate 1,890,813 7.6 % 1,919,074 7.9 % 1,944,658 8.2 % Commercial and industrial 6,414,351 25.9 % 5,786,907 23.9 % 4,790,275 20.2 % PPP 3,370 — % 10,191 — % 248,505 1.0 % Pinnacle 912,122 3.7 % 932,187 3.8 % 919,641 3.9 % Bridge - franchise finance 253,774 1.0 % 254,137 1.0 % 342,124 1.4 % Bridge - equipment finance 286,147 1.1 % 310,035 1.3 % 357,599 1.5 % Mortgage warehouse lending ("MWL") 524,740 2.1 % 622,883 2.6 % 1,092,133 4.6 % $ 24,885,988 100.0 % $ 24,266,732 100.0 % $ 23,765,053 100.0 % Total loans grew by $619 million for the quarter ended December 31, 2022. In the aggregate, the core C&I and commercial real estate portfolio segments grew by $722 million. The commercial and industrial segment, including owner-occupied commercial real estate, grew by $599 million for the quarter, while commercial real estate loans grew by $123 million. As expected, the remaining commercial segments declined during the quarter while the residential portfolio grew modestly. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $105.0 million or 0.42% of total loans at December 31, 2022, down from $156.4 million or 0.64% of total loans at September 30, 2022 and $205.9 million or 0.87% of total loans at December 31, 2021. Non-performing loans included $40.3 million, $41.8 million and $46.1 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.16%, 0.17% and 0.19% of total loans at December 31, 2022, September 30, 2022 and December 31, 2021, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Special mention $ 51,433 $ 26,939 $ 148,593 Substandard - accruing 605,965 662,716 1,136,378 Substandard - non-accruing 75,125 104,994 129,579 Doubtful 7,990 32,093 47,754 Total $ 740,513 $ 826,742 $ 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 December 31, 2022, September 30, 2022, and December 31, 2021 (dollars in thousands): ACL ACL to Total Loans ACL to Non- Performing Loans Net Charge-offs to Average Loans (1) December 31, 2021 $ 126,457 0.53 % 61.41 % 0.29 % September 30, 2022 $ 130,671 0.54 % 83.54 % 0.16 % December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % ____________ (1) Annualized for the nine months ended September 30, 2022. The ACL at December 31, 2022 represents management's estimate of lifetime expected credit losses given our assessment of historical data, current conditions and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended December 31, 2022, the Company recorded a provision for credit losses of $39.6 million, including $40.4 million related to funded loans. The most significant factor impacting the provision for credit losses for the quarter ended December 31, 2022 was the economic forecast and uncertainty about the trajectory of the economy, which impacted both the quantitative and qualitative portions of the ACL. New loan production and increases in certain specific reserves also impacted the provision for the quarter. For the year ended December 31, 2022 the provision for credit losses totaled $75.2 million, compared to a recovery of the provision of $(67.1) million for the year ended December 31, 2021. The provision for 2022 reflected consideration of emerging economic uncertainty and increasing probability of a recession, while the recovery for 2021 reflected the release of reserves built at the time of onset of the COVID-19 pandemic. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 Beginning balance $ 130,671 $ 159,615 $ 126,457 $ 257,323 Provision (recovery) 40,408 1,067 73,814 (64,456 ) Net charge-offs (23,133 ) (34,225 ) (52,325 ) (66,410 ) Ending balance $ 147,946 $ 126,457 $ 147,946 $ 126,457 Net Interest Income Net interest income for the quarter ended December 31, 2022 was $243.1 million, compared to $235.8 million for the immediately preceding quarter ended September 30, 2022 and $206.0 million for the quarter ended December 31, 2021. Interest income increased by $75.5 million for the quarter ended December 31, 2022, compared to the immediately preceding quarter while interest expense increased by $68.2 million. The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.05% to 2.81% for the quarter ended December 31, 2022, from 2.76% for the immediately preceding quarter ended September 30, 2022. Factors impacting the net interest margin for the quarter ended December 31, 2022 included: The tax-equivalent yield on investment securities increased to 4.33% for the quarter ended December 31, 2022, from 3.12% for the quarter ended September 30, 2022. This increase resulted from the reset of coupon rates on variable rate securities and to a lesser extent, purchases of higher yielding securities. The tax-equivalent yield on loans increased to 4.72% for the quarter ended December 31, 2022, from 4.11% for the quarter ended September 30, 2022. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase. The average rate paid on interest bearing deposits increased to 2.06% for the quarter ended December 31, 2022, from 1.14% for the quarter ended September 30, 2022, in response to the rising interest rate environment and tightening liquidity conditions. Time deposits grew as a percentage of interest bearing deposits as we deployed a strategy to extend the term of interest bearing deposits. The average rate paid on FHLB advances increased to 3.44% for the quarter ended December 31, 2022, from 2.25% for the quarter ended September 30, 2022, primarily in response to the rising interest rate environment. Non-interest income and Non-interest expense Non-interest income totaled $26.8 million for the quarter ended December 31, 2022, compared to $23.1 million for the quarter ended September 30, 2022 and $45.6 million for the quarter ended December 31, 2021. During the quarter ended December 31, 2021, the Company sold a portfolio of single-family residential loans for a gain of $18.2 million. Non-interest income totaled $77.6 million for the year ended December 31, 2022, compared to $134.2 million for the year ended December 31, 2021. The year-over-year decline is primarily attributable to (i) the gain on sale of residential loans in the fourth quarter of 2021 discussed above, (ii) a $19.7 million decline in the fair value of certain preferred stock investments included in net loss on investment securities for the year ended December 31, 2022, and (iii) a decline in "other" non-interest income related primarily to lower BOLI revenue. Non-interest expense totaled $148.5 million for the quarter ended December 31, 2022, compared to $138.1 million for the immediately preceding quarter ended September 30, 2022 and $187.9 million for the quarter ended December 31, 2021. Non-interest expense totaled $540.3 million and $547.6 million for the years ended December 31, 2022 and 2021, respectively. Non-interest expense for the quarter and year ended December 31, 2021 included a loss of $44.8 million on discontinuance of cash flow hedges. Quarter-over-quarter and year-over-year increases in employee compensation and benefits and in technology expense reflected labor market dynamics and continued investment in people and technology to support future growth. Provision (benefit) for income taxes The effective income tax rate was 21.5% and 24.0% for the quarter and year ended December 31, 2022, compared to (97.2)% and 7.7% for the quarter and year ended December 31, 2021. The effective income tax rate for both the quarter and year ended December 31, 2021 was positively impacted by $69.1 million in discrete tax benefits recognized in the fourth quarter of 2021. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, January 19, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BI9a423dcb6b32467695ab75bc2d26717e. 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 $37.0 billion at December 31, 2022, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 54 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) December 31, 2022 December 31, 2021 ASSETS Cash and due from banks: Non-interest bearing $ 16,068 $ 19,143 Interest bearing 556,579 295,714 Cash and cash equivalents 572,647 314,857 Investment securities (including securities recorded at fair value of $9,745,327 and $10,054,198) 9,755,327 10,064,198 Non-marketable equity securities 294,172 135,859 Loans 24,885,988 23,765,053 Allowance for credit losses (147,946 ) (126,457 ) Loans, net 24,738,042 23,638,596 Bank owned life insurance 308,212 309,477 Operating lease equipment, net 539,799 640,726 Goodwill 77,637 77,637 Other assets 740,876 634,046 Total assets $ 37,026,712 $ 35,815,396 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 8,037,848 $ 8,975,621 Interest bearing 2,142,067 3,709,493 Savings and money market 13,061,341 13,368,745 Time 4,268,078 3,384,243 Total deposits 27,509,334 29,438,102 Federal funds purchased 190,000 199,000 FHLB advances 5,420,000 1,905,000 Notes and other borrowings 720,923 721,416 Other liabilities 750,474 514,117 Total liabilities 34,590,731 32,777,635 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 75,674,587 and 85,647,986 shares issued and outstanding 757 856 Paid-in capital 321,729 707,503 Retained earnings 2,551,400 2,345,342 Accumulated other comprehensive loss (437,905 ) (15,940 ) Total stockholders' equity 2,435,981 3,037,761 Total liabilities and stockholders' equity $ 37,026,712 $ 35,815,396 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 2022 2021 Interest income: Loans $ 288,973 $ 244,884 $ 198,275 $ 934,642 $ 800,819 Investment securities 105,172 77,109 38,201 280,100 152,619 Other 7,345 4,031 1,397 15,709 6,010 Total interest income 401,490 326,024 237,873 1,230,451 959,448 Interest expense: Deposits 94,403 53,206 13,631 179,972 67,596 Borrowings 64,021 36,982 18,227 137,519 96,164 Total interest expense 158,424 90,188 31,858 317,491 163,760 Net interest income before provision for credit losses 243,066 235,836 206,015 912,960 795,688 Provision for (recovery of) credit losses 39,608 3,720 246 75,154 (67,119 ) Net interest income after provision for credit losses 203,458 232,116 205,769 837,806 862,807 Non-interest income: Deposit service charges and fees 5,482 6,064 5,815 23,402 21,685 Gain (loss) on sale of loans, net (335 ) (613 ) 19,003 (2,570 ) 24,394 Gain (loss) on investment securities, net 320 135 590 (15,805 ) 6,446 Lease financing 14,153 13,180 14,041 54,111 53,263 Other non-interest income 7,193 4,306 6,173 18,498 28,365 Total non-interest income 26,813 23,072 45,622 77,636 134,153 Non-interest expense: Employee compensation and benefits 69,902 66,097 70,561 265,548 243,532 Occupancy and equipment 10,770 11,719 12,817 45,400 47,944 Deposit insurance expense 6,205 4,398 3,471 17,999 18,695 Professional fees 3,028 3,184 8,023 11,730 14,386 Technology 22,388 19,813 18,221 77,103 67,500 Discontinuance of cash flow hedges — — 44,833 — 44,833 Depreciation and impairment of operating lease equipment 12,547 12,646 15,769 50,388 53,764 Other non-interest expense 23,639 20,248 14,165 72,142 56,921 Total non-interest expense 148,479 138,105 187,860 540,310 547,575 Income before income taxes 81,792 117,083 63,531 375,132 449,385 Provision (benefit) for income taxes 17,585 29,233 (61,724 ) 90,161 34,401 Net income $ 64,207 $ 87,850 $ 125,255 $ 284,971 $ 414,984 Earnings per common share, basic $ 0.83 $ 1.13 $ 1.42 $ 3.55 $ 4.52 Earnings per common share, diluted $ 0.82 $ 1.12 $ 1.41 $ 3.54 $ 4.52 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended December 31, 2022 Three Months Ended September 30, 2022 Three Months Ended December 31, 2021 Average Balance Interest (1) Yield/ Rate (1)(2) Average Balance Interest (1) Yield/ Rate (1)(2) Average Balance Interest (1) Yield/ Rate (1)(2) Assets: Interest earning assets: Loans $ 24,624,062 $ 292,272 4.72 % $ 24,053,742 $ 248,168 4.11 % $ 22,919,535 $ 201,345 3.50 % Investment securities (3) 9,788,969 106,034 4.33 % 9,981,486 77,840 3.12 % 10,113,026 38,889 1.54 % Other interest earning assets 710,315 7,345 4.10 % 596,879 4,031 2.68 % 1,184,056 1,397 0.47 % Total interest earning assets 35,123,346 405,651 4.60 % 34,632,107 330,039 3.80 % 34,216,617 241,631 2.81 % Allowance for credit losses (137,300 ) (133,828 ) (149,319 ) Non-interest earning assets 1,837,156 1,703,371 1,767,850 Total assets $ 36,823,202 $ 36,201,650 $ 35,835,148 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,183,854 $ 6,704 1.22 % $ 2,306,906 $ 4,104 0.71 % $ 3,058,355 $ 1,481 0.19 % Savings and money market deposits 12,054,892 68,001 2.24 % 13,001,566 39,838 1.22 % 13,460,084 9,619 0.28 % Time deposits 3,960,111 19,698 1.97 % 3,255,869 9,264 1.13 % 3,399,302 2,531 0.30 % Total interest bearing deposits 18,198,857 94,403 2.06 % 18,564,341 53,206 1.14 % 19,917,741 13,631 0.27 % Federal funds purchased 175,637 1,677 3.74 % 153,905 833 2.12 % 56,793 13 0.09 % FHLB advances 6,125,435 53,084 3.44 % 4,739,457 26,890 2.25 % 1,909,450 8,957 1.86 % Notes and other borrowings 721,044 9,260 5.14 % 721,164 9,259 5.14 % 721,525 9,257 5.13 % Total interest bearing liabilities 25,220,973 158,424 2.49 % 24,178,867 90,188 1.48 % 22,605,509 31,858 0.56 % Non-interest bearing demand deposits 8,237,885 8,749,794 9,330,805 Other non-interest bearing liabilities 879,207 697,440 785,254 Total liabilities 34,338,065 33,626,101 32,721,568 Stockholders' equity 2,485,137 2,575,549 3,113,580 Total liabilities and stockholders' equity $ 36,823,202 $ 36,201,650 $ 35,835,148 Net interest income $ 247,227 $ 239,851 $ 209,773 Interest rate spread 2.11 % 2.32 % 2.25 % Net interest margin 2.81 % 2.76 % 2.44 % _______________ (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) Years Ended December 31, 2022 2021 Average Balance Interest (1) Yield/ Rate (1) Average Balance Interest (1) Yield/ Rate (1) Assets: Interest earning assets: Loans $ 23,937,857 $ 947,386 3.96 % $ 23,083,973 $ 814,101 3.53 % Investment securities (2) 10,081,701 283,081 2.81 % 9,873,178 155,353 1.57 % Other interest earning assets 675,068 15,709 2.33 % 1,093,869 6,010 0.55 % Total interest earning assets 34,694,626 1,246,176 3.59 % 34,051,020 975,464 2.86 % Allowance for credit losses (132,033 ) (197,212 ) Non-interest earning assets 1,721,570 1,770,685 Total assets $ 36,284,163 $ 35,624,493 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,538,906 13,919 0.55 % $ 3,027,649 8,550 0.28 % Savings and money market deposits 12,874,240 130,705 1.02 % 13,339,651 43,082 0.32 % Time deposits 3,338,671 35,348 1.06 % 3,490,082 15,964 0.46 % Total interest bearing deposits 18,751,817 179,972 0.96 % 19,857,382 67,596 0.34 % Federal funds purchased 157,979 2,723 1.72 % 33,945 30 0.09 % FHLB advances 4,383,507 97,763 2.23 % 2,622,723 59,116 2.25 % Notes and other borrowings 721,223 37,033 5.13 % 721,803 37,018 5.13 % Total interest bearing liabilities 24,014,526 317,491 1.32 % 23,235,853 163,760 0.70 % Non-interest bearing demand deposits 8,861,111 8,480,964 Other non-interest bearing liabilities 708,473 784,031 Total liabilities 33,584,110 32,500,848 Stockholders' equity 2,700,053 3,123,645 Total liabilities and stockholders' equity $ 36,284,163 $ 35,624,493 Net interest income $ 928,685 $ 811,704 Interest rate spread 2.27 % 2.16 % Net interest margin 2.68 % 2.38 % _______________ (1) On a tax-equivalent basis where applicable (2) 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 December 31, Years Ended December 31, 2022 2021 2022 2021 Basic earnings per common share: Numerator: Net income $ 64,207 $ 125,255 $ 284,971 $ 414,984 Distributed and undistributed earnings allocated to participating securities (1,519 ) (2,059 ) (5,075 ) (5,991 ) Income allocated to common stockholders for basic earnings per common share $ 62,688 $ 123,196 $ 279,896 $ 408,993 Denominator: Weighted average common shares outstanding 77,043,587 88,123,835 80,032,356 91,612,243 Less average unvested stock awards (1,207,275 ) (1,193,180 ) (1,224,568 ) (1,212,055 ) Weighted average shares for basic earnings per common share 75,836,312 86,930,655 78,807,788 90,400,188 Basic earnings per common share $ 0.83 $ 1.42 $ 3.55 $ 4.52 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 62,688 $ 123,196 $ 279,896 $ 408,993 Adjustment for earnings reallocated from participating securities (184 ) (234 ) (626 ) (585 ) Income used in calculating diluted earnings per common share $ 62,504 $ 122,962 $ 279,270 $ 408,408 Denominator: Weighted average shares for basic earnings per common share 75,836,312 86,930,655 78,807,788 90,400,188 Dilutive effect of certain share-based awards 127 — 94 134 Weighted average shares for diluted earnings per common share 75,836,439 86,930,655 78,807,882 90,400,322 Diluted earnings per common share $ 0.82 $ 1.41 $ 3.54 $ 4.52 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 Financial ratios (4) Return on average assets 0.69 % 1.39 % 0.79 % 1.16 % Return on average stockholders’ equity 10.3 % 16.0 % 10.6 % 13.3 % Net interest margin (3) 2.81 % 2.44 % 2.68 % 2.38 % December 31, 2022 December 31, 2021 Asset quality ratios Non-performing loans to total loans (1)(5) 0.42 % 0.87 % Non-performing assets to total assets (2)(5) 0.29 % 0.58 % Allowance for credit losses to total loans 0.59 % 0.53 % Allowance for credit losses to non-performing loans (1)(5) 140.88 % 61.41 % Net charge-offs to average loans 0.22 % 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 month periods. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022 and $46.1 million or 0.19% of total loans and 0.13% of total assets at December 31, 2021. December 31, 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 % 8.4 % 8.4 % 9.6 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.0 % 12.4 % 12.6 % 14.5 % 6.5 % Total risk-based capital 12.7 % 12.9 % 14.3 % 14.9 % 10.0 % Non-GAAP Financial Measures PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses, particularly in view of recent volatility of the provision for credit losses. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following table reconciles the non-GAAP financial measure of PPNR to the comparable GAAP financial measurement of income before income taxes at the dates indicated (in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Income before income taxes (GAAP) $ 81,792 $ 117,083 $ 63,531 Plus: provision for credit losses 39,608 3,720 246 PPNR (non-GAAP) $ 121,400 $ 120,803 $ 63,777 View source version on businesswire.com: https://www.businesswire.com/news/home/20230119005081/en/Contacts BankUnited, Inc. Investor Relations: Leslie N. Lunak, 786-313-1698, llunak@bankunited.com
BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2022. "We finished 2022 strong, with good growth, margin expansion and the launch of Atlanta and the Dallas branch. We're optimistic going into 2023," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended December 31, 2022, the Company reported net income of $64.2 million, or $0.82 per diluted share, compared to $87.9 million, or $1.12 per diluted share for the immediately preceding quarter ended September 30, 2022 and $125.3 million, or $1.41 per diluted share, for the quarter ended December 31, 2021. For the year ended December 31, 2022, the Company reported net income of $285.0 million, or $3.54 per diluted share, compared to $415.0 million, or $4.52 per diluted share, for the year ended December 31, 2021. Quarterly Highlights BankUnited was ranked #1 in comprehensive innovation, #2 in bank reputation among customers and #9 in bank reputation among non-customers in an annual survey by the American Banker and RepTrak, published in November 2022. The survey encompassed 41 large, regional and nontraditional banks. Pre-tax, pre-provision net revenue ("PPNR") was $121.4 million for the quarter ended December 31, 2022, compared to $120.8 million for the immediately preceding quarter ended September 30, 2022 and $63.8 million for the quarter ended December 31, 2021. PPNR for the quarter ended December 31, 2021 was impacted by certain significant notable items, further discussed below in the section titled "Non-interest income and Non-interest expense." Loans grew by $619 million for the quarter ended December 31, 2022. The core C&I and commercial real estate portfolio segments grew by a total of $722 million. For the year ended December 31, 2022, excluding the decline in PPP loans, total loans grew by 6% or $1.4 billion. Total deposits grew by $160 million during the quarter ended December 31, 2022. Not unexpectedly in the current interest rate environment, non-interest bearing demand deposits declined by $756 million to 29% of total deposits, while interest bearing deposits grew by $916 million. The net interest margin, calculated on a tax-equivalent basis, expanded to 2.81% for the quarter ended December 31, 2022, from 2.76% for the immediately preceding quarter and 2.44% for the quarter ended December 31, 2021. Net interest income increased by $7.2 million, compared to the immediately preceding quarter ended September 30, 2022 and by $37.1 million compared to the quarter ended December 31, 2021. Net interest income for the year ended December 31, 2022 grew by 15% compared to the prior year, while the net interest margin expanded by 30 basis points year-over-year. In response to the rising interest rate environment and tightening liquidity, the average cost of total deposits rose to 1.42% for the quarter ended December 31, 2022, from 0.78% for the immediately preceding quarter ended September 30, 2022 and 0.19% for the quarter ended December 31, 2021. The yield on average interest earning assets increased to 4.60% for the quarter ended December 31, 2022, from 3.80% for the immediately preceding quarter and 2.81% for the quarter ended December 31, 2021. For the quarter ended December 31, 2022, the Company recorded a provision for credit losses of $39.6 million compared to provisions of $3.7 million and $0.2 million for the quarters ended September 30, 2022 and December 31, 2021, respectively. Despite the decline in non-performing loans, we built reserves during the quarter in light of a worsening baseline economic forecast and a heightened level of uncertainty regarding the trajectory of the economy. The provision for credit losses for the quarter ended December 31, 2022 was also impacted by loan growth and an increase in certain specific reserves. The ratio of the ACL to total loans increased to 0.59%, from 0.54% at September 30, 2022. During the quarter ended December 31, 2022, the Company repurchased approximately 1.9 million shares of its common stock for an aggregate purchase price of $64.7 million, at a weighted average price of $33.92 per share. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Residential and other consumer loans $ 8,900,714 35.7 % $ 8,853,884 36.4 % $ 8,368,380 35.2 % Non-owner occupied commercial real estate 5,405,597 21.7 % 5,331,232 22.1 % 5,536,348 23.3 % Construction and land 294,360 1.2 % 246,202 1.0 % 165,390 0.7 % Owner occupied commercial real estate 1,890,813 7.6 % 1,919,074 7.9 % 1,944,658 8.2 % Commercial and industrial 6,414,351 25.9 % 5,786,907 23.9 % 4,790,275 20.2 % PPP 3,370 — % 10,191 — % 248,505 1.0 % Pinnacle 912,122 3.7 % 932,187 3.8 % 919,641 3.9 % Bridge - franchise finance 253,774 1.0 % 254,137 1.0 % 342,124 1.4 % Bridge - equipment finance 286,147 1.1 % 310,035 1.3 % 357,599 1.5 % Mortgage warehouse lending ("MWL") 524,740 2.1 % 622,883 2.6 % 1,092,133 4.6 % $ 24,885,988 100.0 % $ 24,266,732 100.0 % $ 23,765,053 100.0 % Total loans grew by $619 million for the quarter ended December 31, 2022. In the aggregate, the core C&I and commercial real estate portfolio segments grew by $722 million. The commercial and industrial segment, including owner-occupied commercial real estate, grew by $599 million for the quarter, while commercial real estate loans grew by $123 million. As expected, the remaining commercial segments declined during the quarter while the residential portfolio grew modestly. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $105.0 million or 0.42% of total loans at December 31, 2022, down from $156.4 million or 0.64% of total loans at September 30, 2022 and $205.9 million or 0.87% of total loans at December 31, 2021. Non-performing loans included $40.3 million, $41.8 million and $46.1 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.16%, 0.17% and 0.19% of total loans at December 31, 2022, September 30, 2022 and December 31, 2021, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Special mention $ 51,433 $ 26,939 $ 148,593 Substandard - accruing 605,965 662,716 1,136,378 Substandard - non-accruing 75,125 104,994 129,579 Doubtful 7,990 32,093 47,754 Total $ 740,513 $ 826,742 $ 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 December 31, 2022, September 30, 2022, and December 31, 2021 (dollars in thousands): ACL ACL to Total Loans ACL to Non- Performing Loans Net Charge-offs to Average Loans (1) December 31, 2021 $ 126,457 0.53 % 61.41 % 0.29 % September 30, 2022 $ 130,671 0.54 % 83.54 % 0.16 % December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % ____________ (1) Annualized for the nine months ended September 30, 2022. The ACL at December 31, 2022 represents management's estimate of lifetime expected credit losses given our assessment of historical data, current conditions and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended December 31, 2022, the Company recorded a provision for credit losses of $39.6 million, including $40.4 million related to funded loans. The most significant factor impacting the provision for credit losses for the quarter ended December 31, 2022 was the economic forecast and uncertainty about the trajectory of the economy, which impacted both the quantitative and qualitative portions of the ACL. New loan production and increases in certain specific reserves also impacted the provision for the quarter. For the year ended December 31, 2022 the provision for credit losses totaled $75.2 million, compared to a recovery of the provision of $(67.1) million for the year ended December 31, 2021. The provision for 2022 reflected consideration of emerging economic uncertainty and increasing probability of a recession, while the recovery for 2021 reflected the release of reserves built at the time of onset of the COVID-19 pandemic. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 Beginning balance $ 130,671 $ 159,615 $ 126,457 $ 257,323 Provision (recovery) 40,408 1,067 73,814 (64,456 ) Net charge-offs (23,133 ) (34,225 ) (52,325 ) (66,410 ) Ending balance $ 147,946 $ 126,457 $ 147,946 $ 126,457 Net Interest Income Net interest income for the quarter ended December 31, 2022 was $243.1 million, compared to $235.8 million for the immediately preceding quarter ended September 30, 2022 and $206.0 million for the quarter ended December 31, 2021. Interest income increased by $75.5 million for the quarter ended December 31, 2022, compared to the immediately preceding quarter while interest expense increased by $68.2 million. The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.05% to 2.81% for the quarter ended December 31, 2022, from 2.76% for the immediately preceding quarter ended September 30, 2022. Factors impacting the net interest margin for the quarter ended December 31, 2022 included: The tax-equivalent yield on investment securities increased to 4.33% for the quarter ended December 31, 2022, from 3.12% for the quarter ended September 30, 2022. This increase resulted from the reset of coupon rates on variable rate securities and to a lesser extent, purchases of higher yielding securities. The tax-equivalent yield on loans increased to 4.72% for the quarter ended December 31, 2022, from 4.11% for the quarter ended September 30, 2022. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase. The average rate paid on interest bearing deposits increased to 2.06% for the quarter ended December 31, 2022, from 1.14% for the quarter ended September 30, 2022, in response to the rising interest rate environment and tightening liquidity conditions. Time deposits grew as a percentage of interest bearing deposits as we deployed a strategy to extend the term of interest bearing deposits. The average rate paid on FHLB advances increased to 3.44% for the quarter ended December 31, 2022, from 2.25% for the quarter ended September 30, 2022, primarily in response to the rising interest rate environment. Non-interest income and Non-interest expense Non-interest income totaled $26.8 million for the quarter ended December 31, 2022, compared to $23.1 million for the quarter ended September 30, 2022 and $45.6 million for the quarter ended December 31, 2021. During the quarter ended December 31, 2021, the Company sold a portfolio of single-family residential loans for a gain of $18.2 million. Non-interest income totaled $77.6 million for the year ended December 31, 2022, compared to $134.2 million for the year ended December 31, 2021. The year-over-year decline is primarily attributable to (i) the gain on sale of residential loans in the fourth quarter of 2021 discussed above, (ii) a $19.7 million decline in the fair value of certain preferred stock investments included in net loss on investment securities for the year ended December 31, 2022, and (iii) a decline in "other" non-interest income related primarily to lower BOLI revenue. Non-interest expense totaled $148.5 million for the quarter ended December 31, 2022, compared to $138.1 million for the immediately preceding quarter ended September 30, 2022 and $187.9 million for the quarter ended December 31, 2021. Non-interest expense totaled $540.3 million and $547.6 million for the years ended December 31, 2022 and 2021, respectively. Non-interest expense for the quarter and year ended December 31, 2021 included a loss of $44.8 million on discontinuance of cash flow hedges. Quarter-over-quarter and year-over-year increases in employee compensation and benefits and in technology expense reflected labor market dynamics and continued investment in people and technology to support future growth. Provision (benefit) for income taxes The effective income tax rate was 21.5% and 24.0% for the quarter and year ended December 31, 2022, compared to (97.2)% and 7.7% for the quarter and year ended December 31, 2021. The effective income tax rate for both the quarter and year ended December 31, 2021 was positively impacted by $69.1 million in discrete tax benefits recognized in the fourth quarter of 2021. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, January 19, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BI9a423dcb6b32467695ab75bc2d26717e. 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 $37.0 billion at December 31, 2022, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 54 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) December 31, 2022 December 31, 2021 ASSETS Cash and due from banks: Non-interest bearing $ 16,068 $ 19,143 Interest bearing 556,579 295,714 Cash and cash equivalents 572,647 314,857 Investment securities (including securities recorded at fair value of $9,745,327 and $10,054,198) 9,755,327 10,064,198 Non-marketable equity securities 294,172 135,859 Loans 24,885,988 23,765,053 Allowance for credit losses (147,946 ) (126,457 ) Loans, net 24,738,042 23,638,596 Bank owned life insurance 308,212 309,477 Operating lease equipment, net 539,799 640,726 Goodwill 77,637 77,637 Other assets 740,876 634,046 Total assets $ 37,026,712 $ 35,815,396 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 8,037,848 $ 8,975,621 Interest bearing 2,142,067 3,709,493 Savings and money market 13,061,341 13,368,745 Time 4,268,078 3,384,243 Total deposits 27,509,334 29,438,102 Federal funds purchased 190,000 199,000 FHLB advances 5,420,000 1,905,000 Notes and other borrowings 720,923 721,416 Other liabilities 750,474 514,117 Total liabilities 34,590,731 32,777,635 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 75,674,587 and 85,647,986 shares issued and outstanding 757 856 Paid-in capital 321,729 707,503 Retained earnings 2,551,400 2,345,342 Accumulated other comprehensive loss (437,905 ) (15,940 ) Total stockholders' equity 2,435,981 3,037,761 Total liabilities and stockholders' equity $ 37,026,712 $ 35,815,396 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, 2022 2022 2021 2022 2021 Interest income: Loans $ 288,973 $ 244,884 $ 198,275 $ 934,642 $ 800,819 Investment securities 105,172 77,109 38,201 280,100 152,619 Other 7,345 4,031 1,397 15,709 6,010 Total interest income 401,490 326,024 237,873 1,230,451 959,448 Interest expense: Deposits 94,403 53,206 13,631 179,972 67,596 Borrowings 64,021 36,982 18,227 137,519 96,164 Total interest expense 158,424 90,188 31,858 317,491 163,760 Net interest income before provision for credit losses 243,066 235,836 206,015 912,960 795,688 Provision for (recovery of) credit losses 39,608 3,720 246 75,154 (67,119 ) Net interest income after provision for credit losses 203,458 232,116 205,769 837,806 862,807 Non-interest income: Deposit service charges and fees 5,482 6,064 5,815 23,402 21,685 Gain (loss) on sale of loans, net (335 ) (613 ) 19,003 (2,570 ) 24,394 Gain (loss) on investment securities, net 320 135 590 (15,805 ) 6,446 Lease financing 14,153 13,180 14,041 54,111 53,263 Other non-interest income 7,193 4,306 6,173 18,498 28,365 Total non-interest income 26,813 23,072 45,622 77,636 134,153 Non-interest expense: Employee compensation and benefits 69,902 66,097 70,561 265,548 243,532 Occupancy and equipment 10,770 11,719 12,817 45,400 47,944 Deposit insurance expense 6,205 4,398 3,471 17,999 18,695 Professional fees 3,028 3,184 8,023 11,730 14,386 Technology 22,388 19,813 18,221 77,103 67,500 Discontinuance of cash flow hedges — — 44,833 — 44,833 Depreciation and impairment of operating lease equipment 12,547 12,646 15,769 50,388 53,764 Other non-interest expense 23,639 20,248 14,165 72,142 56,921 Total non-interest expense 148,479 138,105 187,860 540,310 547,575 Income before income taxes 81,792 117,083 63,531 375,132 449,385 Provision (benefit) for income taxes 17,585 29,233 (61,724 ) 90,161 34,401 Net income $ 64,207 $ 87,850 $ 125,255 $ 284,971 $ 414,984 Earnings per common share, basic $ 0.83 $ 1.13 $ 1.42 $ 3.55 $ 4.52 Earnings per common share, diluted $ 0.82 $ 1.12 $ 1.41 $ 3.54 $ 4.52 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended December 31, 2022 Three Months Ended September 30, 2022 Three Months Ended December 31, 2021 Average Balance Interest (1) Yield/ Rate (1)(2) Average Balance Interest (1) Yield/ Rate (1)(2) Average Balance Interest (1) Yield/ Rate (1)(2) Assets: Interest earning assets: Loans $ 24,624,062 $ 292,272 4.72 % $ 24,053,742 $ 248,168 4.11 % $ 22,919,535 $ 201,345 3.50 % Investment securities (3) 9,788,969 106,034 4.33 % 9,981,486 77,840 3.12 % 10,113,026 38,889 1.54 % Other interest earning assets 710,315 7,345 4.10 % 596,879 4,031 2.68 % 1,184,056 1,397 0.47 % Total interest earning assets 35,123,346 405,651 4.60 % 34,632,107 330,039 3.80 % 34,216,617 241,631 2.81 % Allowance for credit losses (137,300 ) (133,828 ) (149,319 ) Non-interest earning assets 1,837,156 1,703,371 1,767,850 Total assets $ 36,823,202 $ 36,201,650 $ 35,835,148 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,183,854 $ 6,704 1.22 % $ 2,306,906 $ 4,104 0.71 % $ 3,058,355 $ 1,481 0.19 % Savings and money market deposits 12,054,892 68,001 2.24 % 13,001,566 39,838 1.22 % 13,460,084 9,619 0.28 % Time deposits 3,960,111 19,698 1.97 % 3,255,869 9,264 1.13 % 3,399,302 2,531 0.30 % Total interest bearing deposits 18,198,857 94,403 2.06 % 18,564,341 53,206 1.14 % 19,917,741 13,631 0.27 % Federal funds purchased 175,637 1,677 3.74 % 153,905 833 2.12 % 56,793 13 0.09 % FHLB advances 6,125,435 53,084 3.44 % 4,739,457 26,890 2.25 % 1,909,450 8,957 1.86 % Notes and other borrowings 721,044 9,260 5.14 % 721,164 9,259 5.14 % 721,525 9,257 5.13 % Total interest bearing liabilities 25,220,973 158,424 2.49 % 24,178,867 90,188 1.48 % 22,605,509 31,858 0.56 % Non-interest bearing demand deposits 8,237,885 8,749,794 9,330,805 Other non-interest bearing liabilities 879,207 697,440 785,254 Total liabilities 34,338,065 33,626,101 32,721,568 Stockholders' equity 2,485,137 2,575,549 3,113,580 Total liabilities and stockholders' equity $ 36,823,202 $ 36,201,650 $ 35,835,148 Net interest income $ 247,227 $ 239,851 $ 209,773 Interest rate spread 2.11 % 2.32 % 2.25 % Net interest margin 2.81 % 2.76 % 2.44 % _______________ (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) Years Ended December 31, 2022 2021 Average Balance Interest (1) Yield/ Rate (1) Average Balance Interest (1) Yield/ Rate (1) Assets: Interest earning assets: Loans $ 23,937,857 $ 947,386 3.96 % $ 23,083,973 $ 814,101 3.53 % Investment securities (2) 10,081,701 283,081 2.81 % 9,873,178 155,353 1.57 % Other interest earning assets 675,068 15,709 2.33 % 1,093,869 6,010 0.55 % Total interest earning assets 34,694,626 1,246,176 3.59 % 34,051,020 975,464 2.86 % Allowance for credit losses (132,033 ) (197,212 ) Non-interest earning assets 1,721,570 1,770,685 Total assets $ 36,284,163 $ 35,624,493 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,538,906 13,919 0.55 % $ 3,027,649 8,550 0.28 % Savings and money market deposits 12,874,240 130,705 1.02 % 13,339,651 43,082 0.32 % Time deposits 3,338,671 35,348 1.06 % 3,490,082 15,964 0.46 % Total interest bearing deposits 18,751,817 179,972 0.96 % 19,857,382 67,596 0.34 % Federal funds purchased 157,979 2,723 1.72 % 33,945 30 0.09 % FHLB advances 4,383,507 97,763 2.23 % 2,622,723 59,116 2.25 % Notes and other borrowings 721,223 37,033 5.13 % 721,803 37,018 5.13 % Total interest bearing liabilities 24,014,526 317,491 1.32 % 23,235,853 163,760 0.70 % Non-interest bearing demand deposits 8,861,111 8,480,964 Other non-interest bearing liabilities 708,473 784,031 Total liabilities 33,584,110 32,500,848 Stockholders' equity 2,700,053 3,123,645 Total liabilities and stockholders' equity $ 36,284,163 $ 35,624,493 Net interest income $ 928,685 $ 811,704 Interest rate spread 2.27 % 2.16 % Net interest margin 2.68 % 2.38 % _______________ (1) On a tax-equivalent basis where applicable (2) 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 December 31, Years Ended December 31, 2022 2021 2022 2021 Basic earnings per common share: Numerator: Net income $ 64,207 $ 125,255 $ 284,971 $ 414,984 Distributed and undistributed earnings allocated to participating securities (1,519 ) (2,059 ) (5,075 ) (5,991 ) Income allocated to common stockholders for basic earnings per common share $ 62,688 $ 123,196 $ 279,896 $ 408,993 Denominator: Weighted average common shares outstanding 77,043,587 88,123,835 80,032,356 91,612,243 Less average unvested stock awards (1,207,275 ) (1,193,180 ) (1,224,568 ) (1,212,055 ) Weighted average shares for basic earnings per common share 75,836,312 86,930,655 78,807,788 90,400,188 Basic earnings per common share $ 0.83 $ 1.42 $ 3.55 $ 4.52 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 62,688 $ 123,196 $ 279,896 $ 408,993 Adjustment for earnings reallocated from participating securities (184 ) (234 ) (626 ) (585 ) Income used in calculating diluted earnings per common share $ 62,504 $ 122,962 $ 279,270 $ 408,408 Denominator: Weighted average shares for basic earnings per common share 75,836,312 86,930,655 78,807,788 90,400,188 Dilutive effect of certain share-based awards 127 — 94 134 Weighted average shares for diluted earnings per common share 75,836,439 86,930,655 78,807,882 90,400,322 Diluted earnings per common share $ 0.82 $ 1.41 $ 3.54 $ 4.52 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 Financial ratios (4) Return on average assets 0.69 % 1.39 % 0.79 % 1.16 % Return on average stockholders’ equity 10.3 % 16.0 % 10.6 % 13.3 % Net interest margin (3) 2.81 % 2.44 % 2.68 % 2.38 % December 31, 2022 December 31, 2021 Asset quality ratios Non-performing loans to total loans (1)(5) 0.42 % 0.87 % Non-performing assets to total assets (2)(5) 0.29 % 0.58 % Allowance for credit losses to total loans 0.59 % 0.53 % Allowance for credit losses to non-performing loans (1)(5) 140.88 % 61.41 % Net charge-offs to average loans 0.22 % 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 month periods. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022 and $46.1 million or 0.19% of total loans and 0.13% of total assets at December 31, 2021. December 31, 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 % 8.4 % 8.4 % 9.6 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.0 % 12.4 % 12.6 % 14.5 % 6.5 % Total risk-based capital 12.7 % 12.9 % 14.3 % 14.9 % 10.0 % Non-GAAP Financial Measures PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses, particularly in view of recent volatility of the provision for credit losses. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following table reconciles the non-GAAP financial measure of PPNR to the comparable GAAP financial measurement of income before income taxes at the dates indicated (in thousands): December 31, 2022 September 30, 2022 December 31, 2021 Income before income taxes (GAAP) $ 81,792 $ 117,083 $ 63,531 Plus: provision for credit losses 39,608 3,720 246 PPNR (non-GAAP) $ 121,400 $ 120,803 $ 63,777 View source version on businesswire.com: https://www.businesswire.com/news/home/20230119005081/en/