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 First Quarter 2023 Results By: BankUnited, Inc. via Business Wire April 25, 2023 at 06:45 AM EDT BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended March 31, 2023. "While March was a challenging month for the banking industry, BankUnited continued to support its customers and serve their banking needs. Our business is stable, we have strong liquidity and robust capital," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended March 31, 2023, the Company reported net income of $52.9 million, or $0.70 per diluted share, compared to $64.2 million, or $0.82 per diluted share for the immediately preceding quarter ended December 31, 2022 and $67.2 million, or $0.79 per diluted share, for the quarter ended March 31, 2022. Quarterly Highlights Our liquidity position is strong. At March 31, 2023, the Bank had total same day available liquidity of approximately $9.4 billion. As of April 21, 2023, available liquidity had increased to approximately $12.3 billion. At March 31, 2023, the Bank's ratio of estimated insured and collateralized deposits to total deposits was 62% and its available liquidity to estimated uninsured, uncollateralized deposits ratio was 95%. As of April 21, 2023, the ratio of available liquidity to estimated uninsured, uncollateralized deposits was approximately 128%. The Bank initially experienced deposit outflows at the onset of recent events impacting the banking sector, however, deposit flows quickly stabilized. Total deposits declined by $1.79 billion during the quarter ended March 31, 2023, including non-interest bearing demand deposits declining by $671 million. Deposit outflows over the latter part of March, 2023 were concentrated in a small number of larger institutional depositors. Non-interest bearing demand deposits were 29% of total deposits at both March 31, 2023 and December 31, 2022. Net interest income and the net interest margin for the quarter ended March 31, 2023 were negatively impacted by an increase in the cost of funds which more than offset the increased yield on interest-earning assets. A greater than anticipated decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity led to an increase in higher cost deposits and FHLB advances. The net interest margin, calculated on a tax-equivalent basis, was 2.62% for the quarter ended March 31, 2023, compared to 2.81% for the immediately preceding quarter ended December 31, 2022 and 2.50% for the quarter ended March 31, 2022. Net interest income decreased by $15.2 million, compared to the immediately preceding quarter ended December 31, 2022 and increased by $19.2 million compared to the quarter ended March 31, 2022. In response to the rising interest rate environment, tightening liquidity conditions and recent events impacting the banking sector, the average cost of total deposits rose to 2.05% for the quarter ended March 31, 2023, from 1.42% for the immediately preceding quarter ended December 31, 2022. The yield on average interest earning assets increased to 5.05% for the quarter ended March 31, 2023, from 4.60% for the immediately preceding quarter. For the quarter ended March 31, 2023, the provision for credit losses was $19.8 million compared to provisions of $39.6 million and $7.8 million for the quarters ended December 31, 2022 and March 31, 2022, respectively. The ratio of the ACL to total loans increased to 0.64%, at March 31, 2023 from 0.59% at December 31, 2022. Non-interest income for the quarter ended March 31, 2023 included a $13.3 million net loss on certain preferred equity investments. Total loans was flat quarter-over-quarter, with a $111 million decline in residential offsetting net growth in the commercial segments of $118 million. The core C&I and CRE portfolio segments grew by $144 million. The pre-tax net unrealized loss on investment securities available for sale ("AFS") improved by $100 million during the quarter ended March 31, 2023 to $574 million from $674 million at December 31, 2022. The duration of the AFS portfolio was 1.95 at March 31, 2023. Securities held to maturity totaled only $10 million at March 31, 2023. The Company announced an increase of $0.02 per share in its common stock dividend for the quarter ended March 31, 2023, to $0.27 per common share, reflecting an 8% increase from the previous level of $0.25 per share. During the quarter ended March 31, 2023, the Company repurchased approximately 1.6 million shares of its common stock for an aggregate purchase price of $55.0 million, at a weighted average price of $33.41 per share. CET1 was 10.8% at the holding company and 12.5% at the Bank at March 31, 2023. Pro-forma CET1 at the holding company, including accumulated other comprehensive income, was 9.4%. Book value and tangible book value per common share improved to $33.34 and $32.30, respectively, at March 31, 2023, from $32.19 and $31.16, respectively at December 31, 2022. Deposits and Liquidity Total deposits declined by $1.79 billion during the quarter ended March 31, 2023. Deposits declined by $1.75 billion during the week of March 13, 2023 and then stabilized, increasing by $245 million through the remainder of the quarter. Outflows from a small number of larger institutional clients the week of March 13 drove $1.9 billion of outflows. Deposit flows across the remainder of the core deposit book appeared to be within the range of what we consider to be normal operating activity during this period. The cost of total deposits increased to 2.05% from 1.42% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 2.86% for the quarter ended March 31, 2023, from 2.06% for the preceding quarter. At April 21, 2023 and March 31, 2023 same day available liquidity totaled approximately $12.3 billion and $9.4 billion, respectively, including cash, borrowing capacity at the Federal Home Loan Bank of Atlanta and the Federal Reserve and unencumbered securities. Additional sources of liquidity include cash flows from operations, wholesale deposits and cash flow from the Bank's amortizing securities and loan portfolios. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): March 31, 2023 December 31, 2022 Residential (1) $ 8,789,744 35.3 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,346,895 21.5 % 5,405,597 21.7 % Construction and land 324,805 1.3 % 294,360 1.2 % Owner occupied commercial real estate 1,863,333 7.5 % 1,890,813 7.6 % Commercial and industrial 6,617,716 26.5 % 6,417,721 25.9 % Pinnacle 919,584 3.7 % 912,122 3.7 % Bridge - franchise finance 239,205 1.0 % 253,774 1.0 % Bridge - equipment finance 266,715 1.1 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 524,897 2.1 % 524,740 2.1 % $ 24,892,894 100.0 % $ 24,885,988 100.0 % _______________________ (1) Includes other consumer loans totaling $4 million and $6 million at March 31, 2023 and December 31, 2022, respectively. For the quarter ended March 31, 2023, $173 million of growth in the commercial and industrial segment, including owner-occupied commercial real estate, was offset by declines of $111 million in residential, $28 million in commercial real estate and $27 million for Bridge and Pinnacle, while MWL balances remained flat. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $114.2 million or 0.46% of total loans at March 31, 2023, compared to $105.0 million or 0.42% of total loans at December 31, 2022. Non-performing loans included $36.9 million and $40.3 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.15% and 0.16% of total loans at March 31, 2023 and December 31, 2022, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): March 31, 2023 December 31, 2022 Special mention $ 101,781 $ 51,433 Substandard - accruing 596,054 605,965 Substandard - non-accruing 82,840 75,125 Doubtful 7,699 7,990 Total $ 788,374 $ 740,513 The increase in criticized and classified assets relates primarily to one multi-family loan that migrated to special mention during the quarter and subsequently paid off. The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended March 31, 2023 and December 31, 2022 (dollars in thousands): ACL ACL to Total Loans ACL to Non-Performing Loans Net Charge-offs to Average Loans (1) December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % March 31, 2023 $ 158,792 0.64 % 139.01 % 0.08 % _______________________ (1) Annualized for the three months ended March 31, 2023 The ACL at March 31, 2023 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 March 31, 2023, the provision for credit losses was $19.8 million, including $17.6 million related to funded loans. The more significant factors impacting the provision for credit losses and increase in the ACL for the quarter ended March 31, 2023 were a deteriorating economic forecast and an increase in certain specific reserves. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Beginning balance $ 147,946 $ 130,671 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) (1,794 ) N/A N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 146,152 130,671 126,457 Provision 17,595 40,408 7,446 Net charge-offs (4,955 ) (23,133 ) (8,460 ) Ending balance $ 158,792 $ 147,946 $ 125,443 Net Interest Income Net interest income for the quarter ended March 31, 2023 was $227.9 million, compared to $243.1 million for the immediately preceding quarter ended December 31, 2022 and $208.6 million for the quarter ended March 31, 2022. Interest income increased by $38.9 million for the quarter ended March 31, 2023, compared to the immediately preceding quarter while interest expense increased by $54.1 million. The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.19% to 2.62% for the quarter ended March 31, 2023, from 2.81% for the immediately preceding quarter ended December 31, 2022. Overall, the net interest margin was negatively impacted by an increase in the cost of interest-bearing deposits and FHLB advances, more than offsetting the increased yield on interest earning assets. A decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity contributed to an increase in higher-cost funding. More detail about factors impacting the net interest margin for the quarter ended March 31, 2023 follows: The tax-equivalent yield on investment securities increased to 4.95% for the quarter ended March 31, 2023, from 4.33% for the quarter ended December 31, 2022. This increase resulted primarily from the reset of coupon rates on variable rate securities. The tax-equivalent yield on loans increased to 5.10% for the quarter ended March 31, 2023, from 4.72% for the quarter ended December 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 2.86% for the quarter ended March 31, 2023 from 2.06% for the quarter ended December 31, 2022, in response to the rising interest rate environment, tightening liquidity conditions and the shift from non-interest bearing deposits to deposits priced at current, higher market rates. The average rate paid on FHLB advances increased to 4.27% for the quarter ended March 31, 2023, from 3.44% for the quarter ended December 31, 2022, primarily due to higher prevailing rates Average non-interest bearing demand deposits declined by $0.8 billion while average cash balances increased by $0.3 billion for the quarter. Correspondingly, the increase in average interest-bearing sources of funds added to the balance sheet at higher current rates totaled $1.1 billion for the quarter. The estimated impact of this shift on the net interest margin for the quarter was 0.14%. Non-interest income and Non-interest expense Non-interest income totaled $16.5 million for the quarter ended March 31, 2023, compared to $26.8 million for the quarter ended December 31, 2022 and $14.3 million for the quarter ended March 31, 2022. The quarter over quarter decline is primarily attributable to a $13.3 million loss on certain preferred equity investments during the quarter ended March 31, 2023. Non-interest expense totaled $152.8 million for the quarter ended March 31, 2023, compared to $148.5 million for the immediately preceding quarter ended December 31, 2022 and $126.3 million for the quarter ended March 31, 2022. The 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. Deposit insurance expense increased by $4.5 million compared to the quarter ended March 31, 2022, reflecting an increase in the assessment rate. Other non-interest expense for the quarter ended March 31, 2023 included $4.4 million related to certain operational losses. Costs related to deposit rebate and commission programs increased by $6.9 million for the quarter ended March 31, 2023 compared to the first quarter of the prior year. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, April 25, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BId759d8eca4204944ae8b5c726fc19e7c. 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 $37.2 billion at March 31, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused in the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov). BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands, except share and per share data) March 31, 2023 December 31, 2022 ASSETS Cash and due from banks: Non-interest bearing $ 15,740 $ 16,068 Interest bearing 888,258 556,579 Cash and cash equivalents 903,998 572,647 Investment securities (including securities reported at fair value of $9,523,599 and $9,745,327) 9,533,599 9,755,327 Non-marketable equity securities 384,697 294,172 Loans 24,892,894 24,885,988 Allowance for credit losses (158,792 ) (147,946 ) Loans, net 24,734,102 24,738,042 Bank owned life insurance 318,305 308,212 Operating lease equipment, net 526,311 539,799 Goodwill 77,637 77,637 Other assets 710,554 740,876 Total assets $ 37,189,203 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 7,366,642 $ 8,037,848 Interest bearing 2,505,150 2,142,067 Savings and money market 10,601,129 13,061,341 Time 5,249,977 4,268,078 Total deposits 25,722,898 27,509,334 Federal funds purchased — 190,000 FHLB advances 7,550,000 5,420,000 Notes and other borrowings 720,787 720,923 Other liabilities 714,124 750,474 Total liabilities 34,707,809 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,423,365 and 75,674,587 shares issued and outstanding 744 757 Paid-in capital 269,353 321,729 Retained earnings 2,585,981 2,551,400 Accumulated other comprehensive loss (374,684 ) (437,905 ) Total stockholders' equity 2,481,394 2,435,981 Total liabilities and stockholders' equity $ 37,189,203 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended March 31, December 31, March 31, 2023 2022 2022 Interest income: Loans $ 308,795 $ 288,973 $ 191,562 Investment securities 118,758 105,172 43,048 Other 12,863 7,345 1,354 Total interest income 440,416 401,490 235,964 Interest expense: Deposits 133,630 94,403 11,857 Borrowings 78,912 64,021 15,465 Total interest expense 212,542 158,424 27,322 Net interest income before provision for credit losses 227,874 243,066 208,642 Provision for credit losses 19,788 39,608 7,830 Net interest income after provision for credit losses 208,086 203,458 200,812 Non-interest income: Deposit service charges and fees 5,545 5,482 5,960 Gain (loss) on investment securities, net (12,549 ) 320 (7,868 ) Lease financing 13,109 14,153 13,415 Other non-interest income 10,430 6,858 2,794 Total non-interest income 16,535 26,813 14,301 Non-interest expense: Employee compensation and benefits 71,051 69,902 67,088 Occupancy and equipment 10,802 10,770 11,512 Deposit insurance expense 7,907 6,205 3,403 Professional fees 2,918 3,028 2,262 Technology 21,726 22,388 17,004 Depreciation and impairment of operating lease equipment 11,521 12,547 12,610 Other non-interest expense 26,855 23,639 12,445 Total non-interest expense 152,780 148,479 126,324 Income before income taxes 71,841 81,792 88,789 Provision for income taxes 18,959 17,585 21,639 Net income $ 52,882 $ 64,207 $ 67,150 Earnings per common share, basic $ 0.71 $ 0.83 $ 0.79 Earnings per common share, diluted $ 0.70 $ 0.82 $ 0.79 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended March 31, 2023 Three Months Ended December 31, 2022 Three Months Ended March 31, 2022 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 $ 24,724,296 $ 312,125 5.10 % $ 24,624,062 $ 292,272 4.72 % $ 23,349,143 $ 194,551 3.36 % Investment securities (3) 9,672,514 119,666 4.95 % 9,788,969 106,034 4.33 % 10,083,083 43,719 1.73 % Other interest earning assets 1,039,563 12,863 5.02 % 710,315 7,345 4.10 % 674,640 1,354 0.81 % Total interest earning assets 35,436,373 444,654 5.05 % 35,123,346 405,651 4.60 % 34,106,866 239,624 2.83 % Allowance for credit losses (151,071 ) (137,300 ) (129,028 ) Non-interest earning assets 1,793,000 1,837,156 1,674,476 Total assets $ 37,078,302 $ 36,823,202 $ 35,652,314 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,283,505 $ 10,545 1.87 % $ 2,183,854 $ 6,704 1.22 % $ 3,078,037 $ 1,364 0.18 % Savings and money market deposits 12,145,922 91,724 3.06 % 12,054,892 68,001 2.24 % 13,401,332 6,931 0.21 % Time deposits 4,526,480 31,361 2.81 % 3,960,111 19,698 1.97 % 3,319,585 3,562 0.44 % Total interest bearing deposits 18,955,907 133,630 2.86 % 18,198,857 94,403 2.06 % 19,798,954 11,857 0.24 % Federal funds purchased 143,580 1,611 4.49 % 175,637 1,677 3.74 % 187,539 58 0.12 % FHLB advances 6,465,000 68,039 4.27 % 6,125,435 53,084 3.44 % 2,248,889 6,146 1.11 % Notes and other borrowings 720,906 9,262 5.14 % 721,044 9,260 5.14 % 721,405 9,261 5.13 % Total interest bearing liabilities 26,285,393 212,542 3.28 % 25,220,973 158,424 2.49 % 22,956,787 27,322 0.48 % Non-interest bearing demand deposits 7,458,221 8,237,885 9,047,864 Other non-interest bearing liabilities 821,419 879,207 623,200 Total liabilities 34,565,033 34,338,065 32,627,851 Stockholders' equity 2,513,269 2,485,137 3,024,463 Total liabilities and stockholders' equity $ 37,078,302 $ 36,823,202 $ 35,652,314 Net interest income $ 232,112 $ 247,227 $ 212,302 Interest rate spread 1.77 % 2.11 % 2.35 % Net interest margin 2.62 % 2.81 % 2.50 % _______________________ (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 March 31, 2023 2022 Basic earnings per common share: Numerator: Net income $ 52,882 $ 67,150 Distributed and undistributed earnings allocated to participating securities (798 ) (929 ) Income allocated to common stockholders for basic earnings per common share $ 52,084 $ 66,221 Denominator: Weighted average common shares outstanding 74,755,002 84,983,873 Less average unvested stock awards (1,193,881 ) (1,211,807 ) Weighted average shares for basic earnings per common share 73,561,121 83,772,066 Basic earnings per common share $ 0.71 $ 0.79 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 52,084 $ 66,221 Adjustment for earnings reallocated from participating securities 3 1 Income used in calculating diluted earnings per common share $ 52,087 $ 66,222 Denominator: Weighted average shares for basic earnings per common share 73,561,121 83,772,066 Dilutive effect of certain share-based awards 447,581 137,704 Weighted average shares for diluted earnings per common share 74,008,702 83,909,770 Diluted earnings per common share $ 0.70 $ 0.79 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Financial ratios (4) Return on average assets 0.58 % 0.69 % 0.76 % Return on average stockholders’ equity 8.5 % 10.3 % 9.0 % Net interest margin (3) 2.62 % 2.81 % 2.50 % Tangible book value per common share $ 32.30 $ 31.16 $ 33.12 March 31, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.46 % 0.42 % Non-performing assets to total assets (2)(5) 0.32 % 0.29 % Allowance for credit losses to total loans 0.64 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 139.01 % 140.88 % Net charge-offs to average loans (4) 0.08 % 0.22 % _______________________ (1) We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans. (2) Non-performing assets include non-performing loans, OREO and other repossessed assets. (3) On a tax-equivalent basis. (4) Annualized for the three month periods as applicable. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $36.9 million or 0.15% of total loans and 0.10% of total assets at March 31, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. March 31, 2023 December 31, 2022 Required to be Considered Well Capitalized BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. Capital ratios Tier 1 leverage 7.4 % 8.6 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 10.8 % 12.5 % 11.0 % 12.4 % 6.5 % Total risk-based capital 12.6 % 13.1 % 12.7 % 12.9 % 10.0 % Non-GAAP Financial Measures Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data): March 31, 2023 December 31, 2022 March 31, 2022 Total stockholders’ equity $ 2,481,394 $ 2,435,981 $ 2,861,232 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,403,757 $ 2,358,344 $ 2,783,595 Common shares issued and outstanding 74,423,365 75,674,587 84,052,021 Book value per common share $ 33.34 $ 32.19 $ 34.04 Tangible book value per common share $ 32.30 $ 31.16 $ 33.12 View source version on businesswire.com: https://www.businesswire.com/news/home/20230425005317/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. 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BankUnited, Inc. Reports First Quarter 2023 Results By: BankUnited, Inc. via Business Wire April 25, 2023 at 06:45 AM EDT BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended March 31, 2023. "While March was a challenging month for the banking industry, BankUnited continued to support its customers and serve their banking needs. Our business is stable, we have strong liquidity and robust capital," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended March 31, 2023, the Company reported net income of $52.9 million, or $0.70 per diluted share, compared to $64.2 million, or $0.82 per diluted share for the immediately preceding quarter ended December 31, 2022 and $67.2 million, or $0.79 per diluted share, for the quarter ended March 31, 2022. Quarterly Highlights Our liquidity position is strong. At March 31, 2023, the Bank had total same day available liquidity of approximately $9.4 billion. As of April 21, 2023, available liquidity had increased to approximately $12.3 billion. At March 31, 2023, the Bank's ratio of estimated insured and collateralized deposits to total deposits was 62% and its available liquidity to estimated uninsured, uncollateralized deposits ratio was 95%. As of April 21, 2023, the ratio of available liquidity to estimated uninsured, uncollateralized deposits was approximately 128%. The Bank initially experienced deposit outflows at the onset of recent events impacting the banking sector, however, deposit flows quickly stabilized. Total deposits declined by $1.79 billion during the quarter ended March 31, 2023, including non-interest bearing demand deposits declining by $671 million. Deposit outflows over the latter part of March, 2023 were concentrated in a small number of larger institutional depositors. Non-interest bearing demand deposits were 29% of total deposits at both March 31, 2023 and December 31, 2022. Net interest income and the net interest margin for the quarter ended March 31, 2023 were negatively impacted by an increase in the cost of funds which more than offset the increased yield on interest-earning assets. A greater than anticipated decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity led to an increase in higher cost deposits and FHLB advances. The net interest margin, calculated on a tax-equivalent basis, was 2.62% for the quarter ended March 31, 2023, compared to 2.81% for the immediately preceding quarter ended December 31, 2022 and 2.50% for the quarter ended March 31, 2022. Net interest income decreased by $15.2 million, compared to the immediately preceding quarter ended December 31, 2022 and increased by $19.2 million compared to the quarter ended March 31, 2022. In response to the rising interest rate environment, tightening liquidity conditions and recent events impacting the banking sector, the average cost of total deposits rose to 2.05% for the quarter ended March 31, 2023, from 1.42% for the immediately preceding quarter ended December 31, 2022. The yield on average interest earning assets increased to 5.05% for the quarter ended March 31, 2023, from 4.60% for the immediately preceding quarter. For the quarter ended March 31, 2023, the provision for credit losses was $19.8 million compared to provisions of $39.6 million and $7.8 million for the quarters ended December 31, 2022 and March 31, 2022, respectively. The ratio of the ACL to total loans increased to 0.64%, at March 31, 2023 from 0.59% at December 31, 2022. Non-interest income for the quarter ended March 31, 2023 included a $13.3 million net loss on certain preferred equity investments. Total loans was flat quarter-over-quarter, with a $111 million decline in residential offsetting net growth in the commercial segments of $118 million. The core C&I and CRE portfolio segments grew by $144 million. The pre-tax net unrealized loss on investment securities available for sale ("AFS") improved by $100 million during the quarter ended March 31, 2023 to $574 million from $674 million at December 31, 2022. The duration of the AFS portfolio was 1.95 at March 31, 2023. Securities held to maturity totaled only $10 million at March 31, 2023. The Company announced an increase of $0.02 per share in its common stock dividend for the quarter ended March 31, 2023, to $0.27 per common share, reflecting an 8% increase from the previous level of $0.25 per share. During the quarter ended March 31, 2023, the Company repurchased approximately 1.6 million shares of its common stock for an aggregate purchase price of $55.0 million, at a weighted average price of $33.41 per share. CET1 was 10.8% at the holding company and 12.5% at the Bank at March 31, 2023. Pro-forma CET1 at the holding company, including accumulated other comprehensive income, was 9.4%. Book value and tangible book value per common share improved to $33.34 and $32.30, respectively, at March 31, 2023, from $32.19 and $31.16, respectively at December 31, 2022. Deposits and Liquidity Total deposits declined by $1.79 billion during the quarter ended March 31, 2023. Deposits declined by $1.75 billion during the week of March 13, 2023 and then stabilized, increasing by $245 million through the remainder of the quarter. Outflows from a small number of larger institutional clients the week of March 13 drove $1.9 billion of outflows. Deposit flows across the remainder of the core deposit book appeared to be within the range of what we consider to be normal operating activity during this period. The cost of total deposits increased to 2.05% from 1.42% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 2.86% for the quarter ended March 31, 2023, from 2.06% for the preceding quarter. At April 21, 2023 and March 31, 2023 same day available liquidity totaled approximately $12.3 billion and $9.4 billion, respectively, including cash, borrowing capacity at the Federal Home Loan Bank of Atlanta and the Federal Reserve and unencumbered securities. Additional sources of liquidity include cash flows from operations, wholesale deposits and cash flow from the Bank's amortizing securities and loan portfolios. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): March 31, 2023 December 31, 2022 Residential (1) $ 8,789,744 35.3 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,346,895 21.5 % 5,405,597 21.7 % Construction and land 324,805 1.3 % 294,360 1.2 % Owner occupied commercial real estate 1,863,333 7.5 % 1,890,813 7.6 % Commercial and industrial 6,617,716 26.5 % 6,417,721 25.9 % Pinnacle 919,584 3.7 % 912,122 3.7 % Bridge - franchise finance 239,205 1.0 % 253,774 1.0 % Bridge - equipment finance 266,715 1.1 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 524,897 2.1 % 524,740 2.1 % $ 24,892,894 100.0 % $ 24,885,988 100.0 % _______________________ (1) Includes other consumer loans totaling $4 million and $6 million at March 31, 2023 and December 31, 2022, respectively. For the quarter ended March 31, 2023, $173 million of growth in the commercial and industrial segment, including owner-occupied commercial real estate, was offset by declines of $111 million in residential, $28 million in commercial real estate and $27 million for Bridge and Pinnacle, while MWL balances remained flat. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $114.2 million or 0.46% of total loans at March 31, 2023, compared to $105.0 million or 0.42% of total loans at December 31, 2022. Non-performing loans included $36.9 million and $40.3 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.15% and 0.16% of total loans at March 31, 2023 and December 31, 2022, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): March 31, 2023 December 31, 2022 Special mention $ 101,781 $ 51,433 Substandard - accruing 596,054 605,965 Substandard - non-accruing 82,840 75,125 Doubtful 7,699 7,990 Total $ 788,374 $ 740,513 The increase in criticized and classified assets relates primarily to one multi-family loan that migrated to special mention during the quarter and subsequently paid off. The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended March 31, 2023 and December 31, 2022 (dollars in thousands): ACL ACL to Total Loans ACL to Non-Performing Loans Net Charge-offs to Average Loans (1) December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % March 31, 2023 $ 158,792 0.64 % 139.01 % 0.08 % _______________________ (1) Annualized for the three months ended March 31, 2023 The ACL at March 31, 2023 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 March 31, 2023, the provision for credit losses was $19.8 million, including $17.6 million related to funded loans. The more significant factors impacting the provision for credit losses and increase in the ACL for the quarter ended March 31, 2023 were a deteriorating economic forecast and an increase in certain specific reserves. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Beginning balance $ 147,946 $ 130,671 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) (1,794 ) N/A N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 146,152 130,671 126,457 Provision 17,595 40,408 7,446 Net charge-offs (4,955 ) (23,133 ) (8,460 ) Ending balance $ 158,792 $ 147,946 $ 125,443 Net Interest Income Net interest income for the quarter ended March 31, 2023 was $227.9 million, compared to $243.1 million for the immediately preceding quarter ended December 31, 2022 and $208.6 million for the quarter ended March 31, 2022. Interest income increased by $38.9 million for the quarter ended March 31, 2023, compared to the immediately preceding quarter while interest expense increased by $54.1 million. The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.19% to 2.62% for the quarter ended March 31, 2023, from 2.81% for the immediately preceding quarter ended December 31, 2022. Overall, the net interest margin was negatively impacted by an increase in the cost of interest-bearing deposits and FHLB advances, more than offsetting the increased yield on interest earning assets. A decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity contributed to an increase in higher-cost funding. More detail about factors impacting the net interest margin for the quarter ended March 31, 2023 follows: The tax-equivalent yield on investment securities increased to 4.95% for the quarter ended March 31, 2023, from 4.33% for the quarter ended December 31, 2022. This increase resulted primarily from the reset of coupon rates on variable rate securities. The tax-equivalent yield on loans increased to 5.10% for the quarter ended March 31, 2023, from 4.72% for the quarter ended December 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 2.86% for the quarter ended March 31, 2023 from 2.06% for the quarter ended December 31, 2022, in response to the rising interest rate environment, tightening liquidity conditions and the shift from non-interest bearing deposits to deposits priced at current, higher market rates. The average rate paid on FHLB advances increased to 4.27% for the quarter ended March 31, 2023, from 3.44% for the quarter ended December 31, 2022, primarily due to higher prevailing rates Average non-interest bearing demand deposits declined by $0.8 billion while average cash balances increased by $0.3 billion for the quarter. Correspondingly, the increase in average interest-bearing sources of funds added to the balance sheet at higher current rates totaled $1.1 billion for the quarter. The estimated impact of this shift on the net interest margin for the quarter was 0.14%. Non-interest income and Non-interest expense Non-interest income totaled $16.5 million for the quarter ended March 31, 2023, compared to $26.8 million for the quarter ended December 31, 2022 and $14.3 million for the quarter ended March 31, 2022. The quarter over quarter decline is primarily attributable to a $13.3 million loss on certain preferred equity investments during the quarter ended March 31, 2023. Non-interest expense totaled $152.8 million for the quarter ended March 31, 2023, compared to $148.5 million for the immediately preceding quarter ended December 31, 2022 and $126.3 million for the quarter ended March 31, 2022. The 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. Deposit insurance expense increased by $4.5 million compared to the quarter ended March 31, 2022, reflecting an increase in the assessment rate. Other non-interest expense for the quarter ended March 31, 2023 included $4.4 million related to certain operational losses. Costs related to deposit rebate and commission programs increased by $6.9 million for the quarter ended March 31, 2023 compared to the first quarter of the prior year. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, April 25, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BId759d8eca4204944ae8b5c726fc19e7c. 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 $37.2 billion at March 31, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused in the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov). BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands, except share and per share data) March 31, 2023 December 31, 2022 ASSETS Cash and due from banks: Non-interest bearing $ 15,740 $ 16,068 Interest bearing 888,258 556,579 Cash and cash equivalents 903,998 572,647 Investment securities (including securities reported at fair value of $9,523,599 and $9,745,327) 9,533,599 9,755,327 Non-marketable equity securities 384,697 294,172 Loans 24,892,894 24,885,988 Allowance for credit losses (158,792 ) (147,946 ) Loans, net 24,734,102 24,738,042 Bank owned life insurance 318,305 308,212 Operating lease equipment, net 526,311 539,799 Goodwill 77,637 77,637 Other assets 710,554 740,876 Total assets $ 37,189,203 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 7,366,642 $ 8,037,848 Interest bearing 2,505,150 2,142,067 Savings and money market 10,601,129 13,061,341 Time 5,249,977 4,268,078 Total deposits 25,722,898 27,509,334 Federal funds purchased — 190,000 FHLB advances 7,550,000 5,420,000 Notes and other borrowings 720,787 720,923 Other liabilities 714,124 750,474 Total liabilities 34,707,809 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,423,365 and 75,674,587 shares issued and outstanding 744 757 Paid-in capital 269,353 321,729 Retained earnings 2,585,981 2,551,400 Accumulated other comprehensive loss (374,684 ) (437,905 ) Total stockholders' equity 2,481,394 2,435,981 Total liabilities and stockholders' equity $ 37,189,203 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended March 31, December 31, March 31, 2023 2022 2022 Interest income: Loans $ 308,795 $ 288,973 $ 191,562 Investment securities 118,758 105,172 43,048 Other 12,863 7,345 1,354 Total interest income 440,416 401,490 235,964 Interest expense: Deposits 133,630 94,403 11,857 Borrowings 78,912 64,021 15,465 Total interest expense 212,542 158,424 27,322 Net interest income before provision for credit losses 227,874 243,066 208,642 Provision for credit losses 19,788 39,608 7,830 Net interest income after provision for credit losses 208,086 203,458 200,812 Non-interest income: Deposit service charges and fees 5,545 5,482 5,960 Gain (loss) on investment securities, net (12,549 ) 320 (7,868 ) Lease financing 13,109 14,153 13,415 Other non-interest income 10,430 6,858 2,794 Total non-interest income 16,535 26,813 14,301 Non-interest expense: Employee compensation and benefits 71,051 69,902 67,088 Occupancy and equipment 10,802 10,770 11,512 Deposit insurance expense 7,907 6,205 3,403 Professional fees 2,918 3,028 2,262 Technology 21,726 22,388 17,004 Depreciation and impairment of operating lease equipment 11,521 12,547 12,610 Other non-interest expense 26,855 23,639 12,445 Total non-interest expense 152,780 148,479 126,324 Income before income taxes 71,841 81,792 88,789 Provision for income taxes 18,959 17,585 21,639 Net income $ 52,882 $ 64,207 $ 67,150 Earnings per common share, basic $ 0.71 $ 0.83 $ 0.79 Earnings per common share, diluted $ 0.70 $ 0.82 $ 0.79 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended March 31, 2023 Three Months Ended December 31, 2022 Three Months Ended March 31, 2022 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 $ 24,724,296 $ 312,125 5.10 % $ 24,624,062 $ 292,272 4.72 % $ 23,349,143 $ 194,551 3.36 % Investment securities (3) 9,672,514 119,666 4.95 % 9,788,969 106,034 4.33 % 10,083,083 43,719 1.73 % Other interest earning assets 1,039,563 12,863 5.02 % 710,315 7,345 4.10 % 674,640 1,354 0.81 % Total interest earning assets 35,436,373 444,654 5.05 % 35,123,346 405,651 4.60 % 34,106,866 239,624 2.83 % Allowance for credit losses (151,071 ) (137,300 ) (129,028 ) Non-interest earning assets 1,793,000 1,837,156 1,674,476 Total assets $ 37,078,302 $ 36,823,202 $ 35,652,314 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,283,505 $ 10,545 1.87 % $ 2,183,854 $ 6,704 1.22 % $ 3,078,037 $ 1,364 0.18 % Savings and money market deposits 12,145,922 91,724 3.06 % 12,054,892 68,001 2.24 % 13,401,332 6,931 0.21 % Time deposits 4,526,480 31,361 2.81 % 3,960,111 19,698 1.97 % 3,319,585 3,562 0.44 % Total interest bearing deposits 18,955,907 133,630 2.86 % 18,198,857 94,403 2.06 % 19,798,954 11,857 0.24 % Federal funds purchased 143,580 1,611 4.49 % 175,637 1,677 3.74 % 187,539 58 0.12 % FHLB advances 6,465,000 68,039 4.27 % 6,125,435 53,084 3.44 % 2,248,889 6,146 1.11 % Notes and other borrowings 720,906 9,262 5.14 % 721,044 9,260 5.14 % 721,405 9,261 5.13 % Total interest bearing liabilities 26,285,393 212,542 3.28 % 25,220,973 158,424 2.49 % 22,956,787 27,322 0.48 % Non-interest bearing demand deposits 7,458,221 8,237,885 9,047,864 Other non-interest bearing liabilities 821,419 879,207 623,200 Total liabilities 34,565,033 34,338,065 32,627,851 Stockholders' equity 2,513,269 2,485,137 3,024,463 Total liabilities and stockholders' equity $ 37,078,302 $ 36,823,202 $ 35,652,314 Net interest income $ 232,112 $ 247,227 $ 212,302 Interest rate spread 1.77 % 2.11 % 2.35 % Net interest margin 2.62 % 2.81 % 2.50 % _______________________ (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 March 31, 2023 2022 Basic earnings per common share: Numerator: Net income $ 52,882 $ 67,150 Distributed and undistributed earnings allocated to participating securities (798 ) (929 ) Income allocated to common stockholders for basic earnings per common share $ 52,084 $ 66,221 Denominator: Weighted average common shares outstanding 74,755,002 84,983,873 Less average unvested stock awards (1,193,881 ) (1,211,807 ) Weighted average shares for basic earnings per common share 73,561,121 83,772,066 Basic earnings per common share $ 0.71 $ 0.79 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 52,084 $ 66,221 Adjustment for earnings reallocated from participating securities 3 1 Income used in calculating diluted earnings per common share $ 52,087 $ 66,222 Denominator: Weighted average shares for basic earnings per common share 73,561,121 83,772,066 Dilutive effect of certain share-based awards 447,581 137,704 Weighted average shares for diluted earnings per common share 74,008,702 83,909,770 Diluted earnings per common share $ 0.70 $ 0.79 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Financial ratios (4) Return on average assets 0.58 % 0.69 % 0.76 % Return on average stockholders’ equity 8.5 % 10.3 % 9.0 % Net interest margin (3) 2.62 % 2.81 % 2.50 % Tangible book value per common share $ 32.30 $ 31.16 $ 33.12 March 31, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.46 % 0.42 % Non-performing assets to total assets (2)(5) 0.32 % 0.29 % Allowance for credit losses to total loans 0.64 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 139.01 % 140.88 % Net charge-offs to average loans (4) 0.08 % 0.22 % _______________________ (1) We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans. (2) Non-performing assets include non-performing loans, OREO and other repossessed assets. (3) On a tax-equivalent basis. (4) Annualized for the three month periods as applicable. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $36.9 million or 0.15% of total loans and 0.10% of total assets at March 31, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. March 31, 2023 December 31, 2022 Required to be Considered Well Capitalized BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. Capital ratios Tier 1 leverage 7.4 % 8.6 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 10.8 % 12.5 % 11.0 % 12.4 % 6.5 % Total risk-based capital 12.6 % 13.1 % 12.7 % 12.9 % 10.0 % Non-GAAP Financial Measures Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data): March 31, 2023 December 31, 2022 March 31, 2022 Total stockholders’ equity $ 2,481,394 $ 2,435,981 $ 2,861,232 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,403,757 $ 2,358,344 $ 2,783,595 Common shares issued and outstanding 74,423,365 75,674,587 84,052,021 Book value per common share $ 33.34 $ 32.19 $ 34.04 Tangible book value per common share $ 32.30 $ 31.16 $ 33.12 View source version on businesswire.com: https://www.businesswire.com/news/home/20230425005317/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 ended March 31, 2023. "While March was a challenging month for the banking industry, BankUnited continued to support its customers and serve their banking needs. Our business is stable, we have strong liquidity and robust capital," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended March 31, 2023, the Company reported net income of $52.9 million, or $0.70 per diluted share, compared to $64.2 million, or $0.82 per diluted share for the immediately preceding quarter ended December 31, 2022 and $67.2 million, or $0.79 per diluted share, for the quarter ended March 31, 2022. Quarterly Highlights Our liquidity position is strong. At March 31, 2023, the Bank had total same day available liquidity of approximately $9.4 billion. As of April 21, 2023, available liquidity had increased to approximately $12.3 billion. At March 31, 2023, the Bank's ratio of estimated insured and collateralized deposits to total deposits was 62% and its available liquidity to estimated uninsured, uncollateralized deposits ratio was 95%. As of April 21, 2023, the ratio of available liquidity to estimated uninsured, uncollateralized deposits was approximately 128%. The Bank initially experienced deposit outflows at the onset of recent events impacting the banking sector, however, deposit flows quickly stabilized. Total deposits declined by $1.79 billion during the quarter ended March 31, 2023, including non-interest bearing demand deposits declining by $671 million. Deposit outflows over the latter part of March, 2023 were concentrated in a small number of larger institutional depositors. Non-interest bearing demand deposits were 29% of total deposits at both March 31, 2023 and December 31, 2022. Net interest income and the net interest margin for the quarter ended March 31, 2023 were negatively impacted by an increase in the cost of funds which more than offset the increased yield on interest-earning assets. A greater than anticipated decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity led to an increase in higher cost deposits and FHLB advances. The net interest margin, calculated on a tax-equivalent basis, was 2.62% for the quarter ended March 31, 2023, compared to 2.81% for the immediately preceding quarter ended December 31, 2022 and 2.50% for the quarter ended March 31, 2022. Net interest income decreased by $15.2 million, compared to the immediately preceding quarter ended December 31, 2022 and increased by $19.2 million compared to the quarter ended March 31, 2022. In response to the rising interest rate environment, tightening liquidity conditions and recent events impacting the banking sector, the average cost of total deposits rose to 2.05% for the quarter ended March 31, 2023, from 1.42% for the immediately preceding quarter ended December 31, 2022. The yield on average interest earning assets increased to 5.05% for the quarter ended March 31, 2023, from 4.60% for the immediately preceding quarter. For the quarter ended March 31, 2023, the provision for credit losses was $19.8 million compared to provisions of $39.6 million and $7.8 million for the quarters ended December 31, 2022 and March 31, 2022, respectively. The ratio of the ACL to total loans increased to 0.64%, at March 31, 2023 from 0.59% at December 31, 2022. Non-interest income for the quarter ended March 31, 2023 included a $13.3 million net loss on certain preferred equity investments. Total loans was flat quarter-over-quarter, with a $111 million decline in residential offsetting net growth in the commercial segments of $118 million. The core C&I and CRE portfolio segments grew by $144 million. The pre-tax net unrealized loss on investment securities available for sale ("AFS") improved by $100 million during the quarter ended March 31, 2023 to $574 million from $674 million at December 31, 2022. The duration of the AFS portfolio was 1.95 at March 31, 2023. Securities held to maturity totaled only $10 million at March 31, 2023. The Company announced an increase of $0.02 per share in its common stock dividend for the quarter ended March 31, 2023, to $0.27 per common share, reflecting an 8% increase from the previous level of $0.25 per share. During the quarter ended March 31, 2023, the Company repurchased approximately 1.6 million shares of its common stock for an aggregate purchase price of $55.0 million, at a weighted average price of $33.41 per share. CET1 was 10.8% at the holding company and 12.5% at the Bank at March 31, 2023. Pro-forma CET1 at the holding company, including accumulated other comprehensive income, was 9.4%. Book value and tangible book value per common share improved to $33.34 and $32.30, respectively, at March 31, 2023, from $32.19 and $31.16, respectively at December 31, 2022. Deposits and Liquidity Total deposits declined by $1.79 billion during the quarter ended March 31, 2023. Deposits declined by $1.75 billion during the week of March 13, 2023 and then stabilized, increasing by $245 million through the remainder of the quarter. Outflows from a small number of larger institutional clients the week of March 13 drove $1.9 billion of outflows. Deposit flows across the remainder of the core deposit book appeared to be within the range of what we consider to be normal operating activity during this period. The cost of total deposits increased to 2.05% from 1.42% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 2.86% for the quarter ended March 31, 2023, from 2.06% for the preceding quarter. At April 21, 2023 and March 31, 2023 same day available liquidity totaled approximately $12.3 billion and $9.4 billion, respectively, including cash, borrowing capacity at the Federal Home Loan Bank of Atlanta and the Federal Reserve and unencumbered securities. Additional sources of liquidity include cash flows from operations, wholesale deposits and cash flow from the Bank's amortizing securities and loan portfolios. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): March 31, 2023 December 31, 2022 Residential (1) $ 8,789,744 35.3 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,346,895 21.5 % 5,405,597 21.7 % Construction and land 324,805 1.3 % 294,360 1.2 % Owner occupied commercial real estate 1,863,333 7.5 % 1,890,813 7.6 % Commercial and industrial 6,617,716 26.5 % 6,417,721 25.9 % Pinnacle 919,584 3.7 % 912,122 3.7 % Bridge - franchise finance 239,205 1.0 % 253,774 1.0 % Bridge - equipment finance 266,715 1.1 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 524,897 2.1 % 524,740 2.1 % $ 24,892,894 100.0 % $ 24,885,988 100.0 % _______________________ (1) Includes other consumer loans totaling $4 million and $6 million at March 31, 2023 and December 31, 2022, respectively. For the quarter ended March 31, 2023, $173 million of growth in the commercial and industrial segment, including owner-occupied commercial real estate, was offset by declines of $111 million in residential, $28 million in commercial real estate and $27 million for Bridge and Pinnacle, while MWL balances remained flat. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $114.2 million or 0.46% of total loans at March 31, 2023, compared to $105.0 million or 0.42% of total loans at December 31, 2022. Non-performing loans included $36.9 million and $40.3 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.15% and 0.16% of total loans at March 31, 2023 and December 31, 2022, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): March 31, 2023 December 31, 2022 Special mention $ 101,781 $ 51,433 Substandard - accruing 596,054 605,965 Substandard - non-accruing 82,840 75,125 Doubtful 7,699 7,990 Total $ 788,374 $ 740,513 The increase in criticized and classified assets relates primarily to one multi-family loan that migrated to special mention during the quarter and subsequently paid off. The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended March 31, 2023 and December 31, 2022 (dollars in thousands): ACL ACL to Total Loans ACL to Non-Performing Loans Net Charge-offs to Average Loans (1) December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % March 31, 2023 $ 158,792 0.64 % 139.01 % 0.08 % _______________________ (1) Annualized for the three months ended March 31, 2023 The ACL at March 31, 2023 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 March 31, 2023, the provision for credit losses was $19.8 million, including $17.6 million related to funded loans. The more significant factors impacting the provision for credit losses and increase in the ACL for the quarter ended March 31, 2023 were a deteriorating economic forecast and an increase in certain specific reserves. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Beginning balance $ 147,946 $ 130,671 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) (1,794 ) N/A N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 146,152 130,671 126,457 Provision 17,595 40,408 7,446 Net charge-offs (4,955 ) (23,133 ) (8,460 ) Ending balance $ 158,792 $ 147,946 $ 125,443 Net Interest Income Net interest income for the quarter ended March 31, 2023 was $227.9 million, compared to $243.1 million for the immediately preceding quarter ended December 31, 2022 and $208.6 million for the quarter ended March 31, 2022. Interest income increased by $38.9 million for the quarter ended March 31, 2023, compared to the immediately preceding quarter while interest expense increased by $54.1 million. The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.19% to 2.62% for the quarter ended March 31, 2023, from 2.81% for the immediately preceding quarter ended December 31, 2022. Overall, the net interest margin was negatively impacted by an increase in the cost of interest-bearing deposits and FHLB advances, more than offsetting the increased yield on interest earning assets. A decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity contributed to an increase in higher-cost funding. More detail about factors impacting the net interest margin for the quarter ended March 31, 2023 follows: The tax-equivalent yield on investment securities increased to 4.95% for the quarter ended March 31, 2023, from 4.33% for the quarter ended December 31, 2022. This increase resulted primarily from the reset of coupon rates on variable rate securities. The tax-equivalent yield on loans increased to 5.10% for the quarter ended March 31, 2023, from 4.72% for the quarter ended December 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 2.86% for the quarter ended March 31, 2023 from 2.06% for the quarter ended December 31, 2022, in response to the rising interest rate environment, tightening liquidity conditions and the shift from non-interest bearing deposits to deposits priced at current, higher market rates. The average rate paid on FHLB advances increased to 4.27% for the quarter ended March 31, 2023, from 3.44% for the quarter ended December 31, 2022, primarily due to higher prevailing rates Average non-interest bearing demand deposits declined by $0.8 billion while average cash balances increased by $0.3 billion for the quarter. Correspondingly, the increase in average interest-bearing sources of funds added to the balance sheet at higher current rates totaled $1.1 billion for the quarter. The estimated impact of this shift on the net interest margin for the quarter was 0.14%. Non-interest income and Non-interest expense Non-interest income totaled $16.5 million for the quarter ended March 31, 2023, compared to $26.8 million for the quarter ended December 31, 2022 and $14.3 million for the quarter ended March 31, 2022. The quarter over quarter decline is primarily attributable to a $13.3 million loss on certain preferred equity investments during the quarter ended March 31, 2023. Non-interest expense totaled $152.8 million for the quarter ended March 31, 2023, compared to $148.5 million for the immediately preceding quarter ended December 31, 2022 and $126.3 million for the quarter ended March 31, 2022. The 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. Deposit insurance expense increased by $4.5 million compared to the quarter ended March 31, 2022, reflecting an increase in the assessment rate. Other non-interest expense for the quarter ended March 31, 2023 included $4.4 million related to certain operational losses. Costs related to deposit rebate and commission programs increased by $6.9 million for the quarter ended March 31, 2023 compared to the first quarter of the prior year. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, April 25, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BId759d8eca4204944ae8b5c726fc19e7c. 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 $37.2 billion at March 31, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused in the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov). BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands, except share and per share data) March 31, 2023 December 31, 2022 ASSETS Cash and due from banks: Non-interest bearing $ 15,740 $ 16,068 Interest bearing 888,258 556,579 Cash and cash equivalents 903,998 572,647 Investment securities (including securities reported at fair value of $9,523,599 and $9,745,327) 9,533,599 9,755,327 Non-marketable equity securities 384,697 294,172 Loans 24,892,894 24,885,988 Allowance for credit losses (158,792 ) (147,946 ) Loans, net 24,734,102 24,738,042 Bank owned life insurance 318,305 308,212 Operating lease equipment, net 526,311 539,799 Goodwill 77,637 77,637 Other assets 710,554 740,876 Total assets $ 37,189,203 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 7,366,642 $ 8,037,848 Interest bearing 2,505,150 2,142,067 Savings and money market 10,601,129 13,061,341 Time 5,249,977 4,268,078 Total deposits 25,722,898 27,509,334 Federal funds purchased — 190,000 FHLB advances 7,550,000 5,420,000 Notes and other borrowings 720,787 720,923 Other liabilities 714,124 750,474 Total liabilities 34,707,809 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,423,365 and 75,674,587 shares issued and outstanding 744 757 Paid-in capital 269,353 321,729 Retained earnings 2,585,981 2,551,400 Accumulated other comprehensive loss (374,684 ) (437,905 ) Total stockholders' equity 2,481,394 2,435,981 Total liabilities and stockholders' equity $ 37,189,203 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended March 31, December 31, March 31, 2023 2022 2022 Interest income: Loans $ 308,795 $ 288,973 $ 191,562 Investment securities 118,758 105,172 43,048 Other 12,863 7,345 1,354 Total interest income 440,416 401,490 235,964 Interest expense: Deposits 133,630 94,403 11,857 Borrowings 78,912 64,021 15,465 Total interest expense 212,542 158,424 27,322 Net interest income before provision for credit losses 227,874 243,066 208,642 Provision for credit losses 19,788 39,608 7,830 Net interest income after provision for credit losses 208,086 203,458 200,812 Non-interest income: Deposit service charges and fees 5,545 5,482 5,960 Gain (loss) on investment securities, net (12,549 ) 320 (7,868 ) Lease financing 13,109 14,153 13,415 Other non-interest income 10,430 6,858 2,794 Total non-interest income 16,535 26,813 14,301 Non-interest expense: Employee compensation and benefits 71,051 69,902 67,088 Occupancy and equipment 10,802 10,770 11,512 Deposit insurance expense 7,907 6,205 3,403 Professional fees 2,918 3,028 2,262 Technology 21,726 22,388 17,004 Depreciation and impairment of operating lease equipment 11,521 12,547 12,610 Other non-interest expense 26,855 23,639 12,445 Total non-interest expense 152,780 148,479 126,324 Income before income taxes 71,841 81,792 88,789 Provision for income taxes 18,959 17,585 21,639 Net income $ 52,882 $ 64,207 $ 67,150 Earnings per common share, basic $ 0.71 $ 0.83 $ 0.79 Earnings per common share, diluted $ 0.70 $ 0.82 $ 0.79 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended March 31, 2023 Three Months Ended December 31, 2022 Three Months Ended March 31, 2022 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 $ 24,724,296 $ 312,125 5.10 % $ 24,624,062 $ 292,272 4.72 % $ 23,349,143 $ 194,551 3.36 % Investment securities (3) 9,672,514 119,666 4.95 % 9,788,969 106,034 4.33 % 10,083,083 43,719 1.73 % Other interest earning assets 1,039,563 12,863 5.02 % 710,315 7,345 4.10 % 674,640 1,354 0.81 % Total interest earning assets 35,436,373 444,654 5.05 % 35,123,346 405,651 4.60 % 34,106,866 239,624 2.83 % Allowance for credit losses (151,071 ) (137,300 ) (129,028 ) Non-interest earning assets 1,793,000 1,837,156 1,674,476 Total assets $ 37,078,302 $ 36,823,202 $ 35,652,314 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,283,505 $ 10,545 1.87 % $ 2,183,854 $ 6,704 1.22 % $ 3,078,037 $ 1,364 0.18 % Savings and money market deposits 12,145,922 91,724 3.06 % 12,054,892 68,001 2.24 % 13,401,332 6,931 0.21 % Time deposits 4,526,480 31,361 2.81 % 3,960,111 19,698 1.97 % 3,319,585 3,562 0.44 % Total interest bearing deposits 18,955,907 133,630 2.86 % 18,198,857 94,403 2.06 % 19,798,954 11,857 0.24 % Federal funds purchased 143,580 1,611 4.49 % 175,637 1,677 3.74 % 187,539 58 0.12 % FHLB advances 6,465,000 68,039 4.27 % 6,125,435 53,084 3.44 % 2,248,889 6,146 1.11 % Notes and other borrowings 720,906 9,262 5.14 % 721,044 9,260 5.14 % 721,405 9,261 5.13 % Total interest bearing liabilities 26,285,393 212,542 3.28 % 25,220,973 158,424 2.49 % 22,956,787 27,322 0.48 % Non-interest bearing demand deposits 7,458,221 8,237,885 9,047,864 Other non-interest bearing liabilities 821,419 879,207 623,200 Total liabilities 34,565,033 34,338,065 32,627,851 Stockholders' equity 2,513,269 2,485,137 3,024,463 Total liabilities and stockholders' equity $ 37,078,302 $ 36,823,202 $ 35,652,314 Net interest income $ 232,112 $ 247,227 $ 212,302 Interest rate spread 1.77 % 2.11 % 2.35 % Net interest margin 2.62 % 2.81 % 2.50 % _______________________ (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 March 31, 2023 2022 Basic earnings per common share: Numerator: Net income $ 52,882 $ 67,150 Distributed and undistributed earnings allocated to participating securities (798 ) (929 ) Income allocated to common stockholders for basic earnings per common share $ 52,084 $ 66,221 Denominator: Weighted average common shares outstanding 74,755,002 84,983,873 Less average unvested stock awards (1,193,881 ) (1,211,807 ) Weighted average shares for basic earnings per common share 73,561,121 83,772,066 Basic earnings per common share $ 0.71 $ 0.79 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 52,084 $ 66,221 Adjustment for earnings reallocated from participating securities 3 1 Income used in calculating diluted earnings per common share $ 52,087 $ 66,222 Denominator: Weighted average shares for basic earnings per common share 73,561,121 83,772,066 Dilutive effect of certain share-based awards 447,581 137,704 Weighted average shares for diluted earnings per common share 74,008,702 83,909,770 Diluted earnings per common share $ 0.70 $ 0.79 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Financial ratios (4) Return on average assets 0.58 % 0.69 % 0.76 % Return on average stockholders’ equity 8.5 % 10.3 % 9.0 % Net interest margin (3) 2.62 % 2.81 % 2.50 % Tangible book value per common share $ 32.30 $ 31.16 $ 33.12 March 31, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.46 % 0.42 % Non-performing assets to total assets (2)(5) 0.32 % 0.29 % Allowance for credit losses to total loans 0.64 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 139.01 % 140.88 % Net charge-offs to average loans (4) 0.08 % 0.22 % _______________________ (1) We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans. (2) Non-performing assets include non-performing loans, OREO and other repossessed assets. (3) On a tax-equivalent basis. (4) Annualized for the three month periods as applicable. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $36.9 million or 0.15% of total loans and 0.10% of total assets at March 31, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. March 31, 2023 December 31, 2022 Required to be Considered Well Capitalized BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. Capital ratios Tier 1 leverage 7.4 % 8.6 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 10.8 % 12.5 % 11.0 % 12.4 % 6.5 % Total risk-based capital 12.6 % 13.1 % 12.7 % 12.9 % 10.0 % Non-GAAP Financial Measures Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data): March 31, 2023 December 31, 2022 March 31, 2022 Total stockholders’ equity $ 2,481,394 $ 2,435,981 $ 2,861,232 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,403,757 $ 2,358,344 $ 2,783,595 Common shares issued and outstanding 74,423,365 75,674,587 84,052,021 Book value per common share $ 33.34 $ 32.19 $ 34.04 Tangible book value per common share $ 32.30 $ 31.16 $ 33.12 View source version on businesswire.com: https://www.businesswire.com/news/home/20230425005317/en/