Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries BankUnited, Inc. Reports Second Quarter 2023 Results By: BankUnited, Inc. via Business Wire July 25, 2023 at 06:45 AM EDT BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2023. "As volatility in the capital markets recedes and the economy remains resilient, we have returned our focus to executing on our long term strategy of building a relationship oriented bank," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended June 30, 2023, the Company reported net income of $58.0 million, or $0.78 per diluted share, compared to $52.9 million, or $0.70 per diluted share for the immediately preceding quarter ended March 31, 2023 and $65.8 million, or $0.82 per diluted share, for the quarter ended June 30, 2022. For the six months ended June 30, 2023, the Company reported net income of $110.9 million or $1.48 per diluted share compared to $132.9 million or $1.60 per diluted share for the six months ended June 30, 2022. Quarterly Highlights Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing deposits remained largely consistent as a percentage of deposits, representing 28.3% of total deposits at June 30, 2023 compared to 28.6% at March 31, 2023, declining by $62 million for the quarter. Our liquidity position remains strong, and improved over the course of the second quarter. At June 30, 2023, total same day available liquidity had increased to $14.7 billion from $9.4 billion at March 31, 2023. The available liquidity to uninsured, uncollateralized deposits ratio improved to 167% at June 30, 2023 from 95% at March 31, 2023 while the portion of our deposits that were insured or collateralized grew to 66% at June 30, 2023 from 62% at March 31, 2023. We made progress in reducing wholesale funding as outstanding FHLB advances were down $1.6 billion quarter-over-quarter. Net interest income and the net interest margin for the quarter ended June 30, 2023 were impacted by an increase in the cost of funds which more than offset the increased yield on interest-earning assets. A challenging deposit growth environment and a higher level of on-balance sheet liquidity for much of the quarter led to increased reliance on higher cost deposits and wholesale funding. The net interest margin, calculated on a tax-equivalent basis, was 2.47% for the quarter ended June 30, 2023, compared to 2.62% for the immediately preceding quarter ended March 31, 2023 and 2.63% for the quarter ended June 30, 2022. Net interest income decreased by $14.0 million, compared to the immediately preceding quarter ended March 31, 2023 and by $11.5 million compared to the quarter ended June 30, 2022. Consistent with industry trends, rising interest rates and tighter liquidity conditions contributed to an increase in the average cost of total deposits to 2.46% for the quarter ended June 30, 2023 from 2.05% for the immediately preceding quarter. This increase of 0.41% was smaller than the 0.63% increase in the cost of deposits for the quarter ended March 31, 2023. The yield on average interest earning assets increased to 5.30% for the quarter ended June 30, 2023 from 5.05% for the immediately preceding quarter. Total loans declined by $263 million quarter-over-quarter. Most of the decline was attributable to residential which was down by $184 million. Consistent with our strategy to re-position the composition of the balance sheet, cash flows from the residential portfolio were used to pay down wholesale funding. Credit remains favorable. The NPA ratio at June 30, 2023 was 0.34%, including 0.10% related to the guaranteed portion of non-performing SBA loans compared to 0.32%, including 0.10% related to the guaranteed portion of non-performing SBA loans at March 31, 2023. The annualized net charge-off ratio for the six months ended June 30, 2023 was 0.09%. Reflecting management's concentration risk management strategy, commercial real estate exposure is modest. Commercial real estate loans totaled 23% of loans at June 30, 2023, representing 169% of the Bank's total risk based capital. At June 30, 2023, the weighted average LTV of the CRE portfolio was 57.1% and the weighted average DSCR was 1.88. 60% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area. For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million compared to provisions of $19.8 million and $24.0 million for the quarters ended March 31, 2023 and June 30, 2022, respectively. The ratio of the ACL to total loans increased to 0.68%, at June 30, 2023 from 0.64% at March 31, 2023, reflecting the impact on modeling expected credit losses of a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario in calculating the ACL. We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.94 at June 30, 2023. Held to maturity securities were not significant. Our capital position is robust. CET1 was 11.2% at the holding company and 13.0% at the Bank at June 30, 2023. Pro-forma CET1 at the holding company and the Bank, including accumulated other comprehensive income, were 9.7% and 11.5%, respectively. Book value and tangible book value per common share improved to $33.94 and $32.90, respectively, at June 30, 2023, from $33.34 and $32.30, respectively at March 31, 2023. Deposits and Funding Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing demand deposits declined by $62 million, interest-bearing non-maturity deposits declined by $92 million and time deposits grew by $270 million. Account level deposit flows throughout the quarter generally appeared to be within the range of what we consider normal operating activity. Consistent with the current interest rate environment and monetary policy stance, the cost of total deposits increased to 2.46% from 2.05% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the preceding quarter. FHLB advances declined by $1.6 billion for the quarter, as we used cash flows generated by the residential and securities portfolios to reduce wholesale funding levels and allow for future re-deployment of capital into higher yielding assets. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): June 30, 2023 March 31, 2023 December 31, 2022 Residential $ 8,605,838 34.9 % $ 8,789,744 35.3 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,302,523 21.5 % 5,346,895 21.5 % 5,405,597 21.7 % Construction and land 393,464 1.6 % 324,805 1.3 % 294,360 1.2 % Owner occupied commercial real estate 1,832,586 7.4 % 1,863,333 7.5 % 1,890,813 7.6 % Commercial and industrial 6,575,368 26.8 % 6,617,716 26.5 % 6,417,721 25.9 % Pinnacle - municipal finance 951,529 3.9 % 919,584 3.7 % 912,122 3.7 % Franchise finance 207,783 0.8 % 239,205 1.0 % 253,774 1.0 % Equipment finance 237,816 1.0 % 266,715 1.1 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 523,083 2.1 % 524,897 2.1 % 524,740 2.1 % $ 24,629,990 100.0 % $ 24,892,894 100.0 % $ 24,885,988 100.0 % For the quarter ended June 30, 2023, residential declined by $184 million, C&I and CRE declined by $49 million in total, franchise and equipment finance declined by $60 million in aggregate and municipal finance grew by $32 million. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $118.7 million or 0.48% of total loans at June 30, 2023, compared to $114.2 million or 0.46% of total loans at March 31, 2023. Non-performing loans included $35.9 million and $36.9 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.15% of total loans at both June 30, 2023 and March 31, 2023. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): June 30, 2023 March 31, 2023 December 31, 2022 Special mention $ 233,004 $ 101,781 $ 51,433 Substandard - accruing 525,643 596,054 605,965 Substandard - non-accruing 80,642 82,840 75,125 Doubtful 14,954 7,699 7,990 Total $ 854,243 $ 788,374 $ 740,513 One $22 million loan that was moved to special mention during the quarter paid off shortly after quarter-end. The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended June 30, 2023, March 31, 2023 and December 31, 2022 (dollars in thousands): ACL to Total ACL to Non- Net Charge-offs to ACL Loans Performing Loans Average Loans (1) December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % March 31, 2023 $ 158,792 0.64 % 139.01 % 0.08 % June 30, 2023 $ 166,833 0.68 % 140.52 % 0.09 % (1) Annualized for the three months ended March 31, 2023 and the six months ended June 30, 2023. The ACL at June 30, 2023 represents management's estimate of lifetime expected credit losses given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million, including $14.2 million related to funded loans. The more significant factors impacting the provision for credit losses and increase in the ACL for the quarter ended June 30, 2023 were a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Beginning balance $ 158,792 $ 147,946 $ 125,443 $ 147,946 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) N/A (1,794 ) N/A (1,794 ) N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 158,792 146,152 125,443 146,152 126,457 Provision 14,195 17,595 23,207 31,790 30,653 Net charge-offs (6,154 ) (4,955 ) (18,411 ) (11,109 ) (26,871 ) Ending balance $ 166,833 $ 158,792 $ 130,239 $ 166,833 $ 130,239 Net Interest Income Net interest income for the quarter ended June 30, 2023 was $213.9 million, compared to $227.9 million for the immediately preceding quarter ended March 31, 2023 and $225.4 million for the quarter ended June 30, 2022. Interest income increased by $23.0 million for the quarter ended June 30, 2023 compared to the immediately preceding quarter while interest expense increased by $37.0 million. The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.15% to 2.47% for the quarter ended June 30, 2023, from 2.62% for the immediately preceding quarter ended March 31, 2023. Overall, the net interest margin was negatively impacted by an increase in the cost of interest-bearing deposits and FHLB advances, more than offsetting the increased yield on interest earning assets. A decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity contributed to an increase in higher-cost funding. More detail about certain factors impacting the net interest margin for the quarter ended June 30, 2023 follows: The tax-equivalent yield on investment securities increased to 5.19% for the quarter ended June 30, 2023, from 4.95% for the quarter ended March 31, 2023. This increase resulted primarily from the reset of coupon rates on variable rate securities. The tax-equivalent yield on loans increased to 5.35% for the quarter ended June 30, 2023, from 5.10% for the quarter ended March 31, 2023. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase. The average cost on interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the quarter ended March 31, 2023, as a result of the rising interest rate environment, tightening liquidity conditions and the shift from non-interest bearing deposits to deposits priced at current, higher market rates. The average rate paid on FHLB advances increased to 4.59% for the quarter ended June 30, 2023, from 4.27% for the quarter ended March 31, 2023, primarily due to higher prevailing rates, partially offset by the impact of cash flow hedges. Non-interest income and Non-interest expense Non-interest income totaled $25.5 million for the quarter ended June 30, 2023, compared to $16.5 million for the quarter ended March 31, 2023 and $13.5 million for the quarter ended June 30, 2022. This increase over the comparable quarters was primarily attributable to losses on certain preferred equity investments of $13.3 million and $9.3 million during the quarters ended March 31, 2023 and June 30, 2022, respectively. Non-interest expense totaled $145.2 million for the quarter ended June 30, 2023, compared to $152.8 million for the immediately preceding quarter ended March 31, 2023 and $127.4 million for the quarter ended June 30, 2022. The quarter over quarter decline in compensation and benefits reflected expected seasonal fluctuations in payroll taxes and benefits. The quarter over quarter decline in other non-interest expense was impacted by $4.4 million in certain operational losses recognized during the quarter ended March 31, 2023. Costs related to deposit rebate and commission programs increased by $7.2 million for the quarter ended June 30, 2023 compared to the second quarter of the prior year. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, July 25, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BIe6f3323769d343d48b39c8774b18f417. For those unable to join the live event, an archived webcast will be available in the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast. About BankUnited, Inc. BankUnited, Inc., with total assets of $35.9 billion at June 30, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused on the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov). BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands, except share and per share data) June 30, December 31, 2023 2022 ASSETS Cash and due from banks: Non-interest bearing $ 18,355 $ 16,068 Interest bearing 282,814 556,579 Cash and cash equivalents 301,169 572,647 Investment securities (including securities reported at fair value of $9,133,937 and $9,745,327) 9,143,937 9,755,327 Non-marketable equity securities 317,759 294,172 Loans 24,629,990 24,885,988 Allowance for credit losses (166,833 ) (147,946 ) Loans, net 24,463,157 24,738,042 Bank owned life insurance 318,935 308,212 Operating lease equipment, net 514,734 539,799 Goodwill 77,637 77,637 Other assets 734,151 740,876 Total assets $ 35,871,479 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 7,304,735 $ 8,037,848 Interest bearing 2,929,870 2,142,067 Savings and money market 10,084,276 13,061,341 Time 5,519,771 4,268,078 Total deposits 25,838,652 27,509,334 Federal funds purchased — 190,000 FHLB advances 5,975,000 5,420,000 Notes and other borrowings 715,302 720,923 Other liabilities 816,215 750,474 Total liabilities 33,345,169 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,429,948 and 75,674,587 shares issued and outstanding 744 757 Paid-in capital 274,202 321,729 Retained earnings 2,623,926 2,551,400 Accumulated other comprehensive loss (372,562 ) (437,905 ) Total stockholders' equity 2,526,310 2,435,981 Total liabilities and stockholders' equity $ 35,871,479 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2023 2023 2022 2023 2022 Interest income: Loans $ 326,153 $ 308,795 $ 209,223 $ 634,948 $ 400,785 Investment securities 120,604 118,758 54,771 239,362 97,819 Other 16,664 12,863 2,979 29,527 4,333 Total interest income 463,421 440,416 266,973 903,837 502,937 Interest expense: Deposits 156,868 133,630 20,501 290,498 32,363 Borrowings 92,675 78,912 21,056 171,587 36,516 Total interest expense 249,543 212,542 41,557 462,085 68,879 Net interest income before provision for credit losses 213,878 227,874 225,416 441,752 434,058 Provision for credit losses 15,517 19,788 23,996 35,305 31,826 Net interest income after provision for credit losses 198,361 208,086 201,420 406,447 402,232 Non-interest income: Deposit service charges and fees 5,349 5,545 5,896 10,894 11,856 Gain (loss) on investment securities, net 993 (12,549 ) (8,392 ) (11,556 ) (16,260 ) Lease financing 12,519 13,109 13,363 25,628 26,778 Other non-interest income 6,626 10,430 2,583 17,056 5,377 Total non-interest income 25,487 16,535 13,450 42,022 27,751 Non-interest expense: Employee compensation and benefits 67,414 71,051 62,461 138,465 129,549 Occupancy and equipment 11,043 10,802 11,399 21,845 22,911 Deposit insurance expense 7,597 7,907 3,993 15,504 7,396 Professional fees 3,518 2,918 3,256 6,436 5,518 Technology 20,437 21,726 17,898 42,163 34,902 Depreciation of operating lease equipment 11,232 11,521 12,585 22,753 25,195 Other non-interest expense 23,977 26,855 15,810 50,832 28,255 Total non-interest expense 145,218 152,780 127,402 297,998 253,726 Income before income taxes 78,630 71,841 87,468 150,471 176,257 Provision for income taxes 20,634 18,959 21,704 39,593 43,343 Net income $ 57,996 $ 52,882 $ 65,764 $ 110,878 $ 132,914 Earnings per common share, basic $ 0.78 $ 0.71 $ 0.82 $ 1.49 $ 1.61 Earnings per common share, diluted $ 0.78 $ 0.70 $ 0.82 $ 1.48 $ 1.60 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended June 30, Three Months Ended March 31, Three Months Ended June 30, 2023 2023 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Assets: Interest earning assets: Loans $ 24,680,919 $ 329,494 5.35 % $ 24,724,296 $ 312,125 5.10 % $ 23,709,190 $ 212,395 3.59 % Investment securities (3) 9,369,019 121,520 5.19 % 9,672,514 119,666 4.95 % 10,477,600 55,488 2.12 % Other interest earning assets 1,323,025 16,664 5.05 % 1,039,563 12,863 5.02 % 718,904 2,979 1.66 % Total interest earning assets 35,372,963 467,678 5.30 % 35,436,373 444,654 5.05 % 34,905,694 270,862 3.11 % Allowance for credit losses (162,463 ) (151,071 ) (127,864 ) Non-interest earning assets 1,744,693 1,793,000 1,669,689 Total assets $ 36,955,193 $ 37,078,302 $ 36,447,519 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,772,839 $ 18,417 2.66 % $ 2,283,505 $ 10,545 1.87 % $ 2,576,257 $ 1,742 0.27 % Savings and money market deposits 10,285,494 88,892 3.47 % 12,145,922 91,724 3.06 % 13,052,566 15,213 0.47 % Time deposits 5,494,631 49,559 3.62 % 4,526,480 31,361 2.81 % 2,812,988 3,546 0.51 % Total interest bearing deposits 18,552,964 156,868 3.39 % 18,955,907 133,630 2.86 % 18,441,811 20,501 0.45 % Federal funds purchased — — — % 143,580 1,611 4.49 % 115,146 155 0.53 % FHLB advances 7,288,187 83,429 4.59 % 6,465,000 68,039 4.27 % 4,373,736 11,644 1.07 % Notes and other borrowings 719,368 9,246 5.14 % 720,906 9,262 5.14 % 721,284 9,257 5.13 % Total interest bearing liabilities 26,560,519 249,543 3.77 % 26,285,393 212,542 3.28 % 23,651,977 41,557 0.70 % Non-interest bearing demand deposits 7,067,053 7,458,221 9,419,025 Other non-interest bearing liabilities 798,279 821,419 654,162 Total liabilities 34,425,851 34,565,033 33,725,164 Stockholders' equity 2,529,342 2,513,269 2,722,355 Total liabilities and stockholders' equity $ 36,955,193 $ 37,078,302 $ 36,447,519 Net interest income $ 218,135 $ 232,112 $ 229,305 Interest rate spread 1.53 % 1.77 % 2.41 % Net interest margin 2.47 % 2.62 % 2.63 % (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Six Months Ended June 30, 2023 2022 Average Yield/ Average Yield/ Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Assets: Interest earning assets: Loans $ 24,702,487 $ 641,617 5.22 % $ 23,530,162 $ 406,946 3.47 % Investment securities (3) 9,519,928 241,187 5.07 % 10,281,431 99,207 1.93 % Other interest earning assets 1,182,077 29,527 5.04 % 696,894 4,333 1.25 % Total interest earning assets 35,404,492 912,331 5.18 % 34,508,487 510,486 2.97 % Allowance for credit losses (156,798 ) (128,443 ) Non-interest earning assets 1,768,714 1,672,070 Total assets $ 37,016,408 $ 36,052,114 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,570,422 $ 29,291 2.30 % $ 2,825,830 $ 3,111 0.22 % Savings and money market deposits 11,169,671 180,287 3.25 % 13,225,986 22,866 0.35 % Time deposits 5,013,230 80,920 3.26 % 3,064,887 6,386 0.42 % Total interest bearing deposits 18,753,323 290,498 3.12 % 19,116,703 32,363 0.34 % Federal funds purchased 71,393 1,611 4.51 % 151,074 213 0.28 % FHLB advances 6,878,867 151,467 4.44 % 3,317,182 17,790 1.08 % Notes and other borrowings 720,133 18,509 5.14 % 721,344 18,513 5.13 % Total interest bearing liabilities 26,423,716 462,085 3.53 % 23,306,303 68,879 0.59 % Non-interest bearing demand deposits 7,261,557 9,234,469 Other non-interest bearing liabilities 809,785 638,767 Total liabilities 34,495,058 33,179,539 Stockholders' equity 2,521,350 2,872,575 Total liabilities and stockholders' equity $ 37,016,408 $ 36,052,114 Net interest income $ 450,246 $ 441,607 Interest rate spread 1.65 % 2.38 % Net interest margin 2.55 % 2.57 % (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES EARNINGS PER COMMON SHARE (In thousands except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Basic earnings per common share: Numerator: Net income $ 57,996 $ 65,764 $ 110,878 $ 132,914 Distributed and undistributed earnings allocated to participating securities (881 ) (999 ) (1,679 ) (1,927 ) Income allocated to common stockholders for basic earnings per common share $ 57,115 $ 64,765 $ 109,199 $ 130,987 Denominator: Weighted average common shares outstanding 74,424,631 80,300,069 74,588,904 82,629,098 Less average unvested stock awards (1,183,039 ) (1,257,258 ) (1,188,430 ) (1,234,678 ) Weighted average shares for basic earnings per common share 73,241,592 79,042,811 73,400,474 81,394,420 Basic earnings per common share $ 0.78 $ 0.82 $ 1.49 $ 1.61 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 57,115 $ 64,765 $ 109,199 $ 130,987 Adjustment for earnings reallocated from participating securities 1 3 5 4 Income used in calculating diluted earnings per common share $ 57,116 $ 64,768 $ 109,204 $ 130,991 Denominator: Weighted average shares for basic earnings per common share 73,241,592 79,042,811 73,400,474 81,394,420 Dilutive effect of certain share-based awards 179,318 350,734 312,708 244,808 Weighted average shares for diluted earnings per common share 73,420,910 79,393,545 73,713,182 81,639,228 Diluted earnings per common share $ 0.78 $ 0.82 $ 1.48 $ 1.60 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended Six Months Ended June 30, June 30, 2023 March 31, 2023 June 30, 2022 2023 2022 Financial ratios (4) Return on average assets 0.63 % 0.58 % 0.72 % 0.60 % 0.74 % Return on average stockholders’ equity 9.2 % 8.5 % 9.7 % 8.9 % 9.3 % Net interest margin (3) 2.47 % 2.62 % 2.63 % 2.55 % 2.57 % Loans to deposits 95.3 % 96.8 % 84.7 % Tangible book value per common share $ 32.90 $ 32.30 $ 31.16 June 30, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.48 % 0.42 % Non-performing assets to total assets (2)(5) 0.34 % 0.29 % Allowance for credit losses to total loans 0.68 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 140.52 % 140.88 % Net charge-offs to average loans (4) 0.09 % 0.22 % (1) We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans. (2) Non-performing assets include non-performing loans, OREO and other repossessed assets. (3) On a tax-equivalent basis. (4) Annualized for the three and six month periods as applicable. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $35.9 million or 0.15% of total loans and 0.10% of total assets at June 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. June 30, 2023 March 31, 2023 December 31, 2022 Required to be Considered Well Capitalized BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. Capital ratios Tier 1 leverage 7.6 % 8.8 % 7.4 % 8.6 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.2 % 13.0 % 10.8 % 12.5 % 11.0 % 12.4 % 6.5 % Total risk-based capital 13.0 % 13.6 % 12.6 % 13.1 % 12.7 % 12.9 % 10.0 % Tangible Common Equity/Tangible Assets 6.8 % N/A 6.5 % N/A 6.4 % N/A N/A Non-GAAP Financial Measures Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data): June 30, 2023 March 31, 2023 June 30, 2022 Total stockholders’ equity $ 2,526,310 $ 2,481,394 $ 2,506,017 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,448,673 $ 2,403,757 $ 2,428,380 Common shares issued and outstanding 74,429,948 74,423,365 77,944,216 Book value per common share $ 33.94 $ 33.34 $ 32.15 Tangible book value per common share $ 32.90 $ 32.30 $ 31.16 View source version on businesswire.com: https://www.businesswire.com/news/home/20230725471731/en/Contacts BankUnited, Inc. Investor Relations: Leslie N. Lunak, 786-313-1698 llunak@bankunited.com 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 Second Quarter 2023 Results By: BankUnited, Inc. via Business Wire July 25, 2023 at 06:45 AM EDT BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2023. "As volatility in the capital markets recedes and the economy remains resilient, we have returned our focus to executing on our long term strategy of building a relationship oriented bank," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended June 30, 2023, the Company reported net income of $58.0 million, or $0.78 per diluted share, compared to $52.9 million, or $0.70 per diluted share for the immediately preceding quarter ended March 31, 2023 and $65.8 million, or $0.82 per diluted share, for the quarter ended June 30, 2022. For the six months ended June 30, 2023, the Company reported net income of $110.9 million or $1.48 per diluted share compared to $132.9 million or $1.60 per diluted share for the six months ended June 30, 2022. Quarterly Highlights Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing deposits remained largely consistent as a percentage of deposits, representing 28.3% of total deposits at June 30, 2023 compared to 28.6% at March 31, 2023, declining by $62 million for the quarter. Our liquidity position remains strong, and improved over the course of the second quarter. At June 30, 2023, total same day available liquidity had increased to $14.7 billion from $9.4 billion at March 31, 2023. The available liquidity to uninsured, uncollateralized deposits ratio improved to 167% at June 30, 2023 from 95% at March 31, 2023 while the portion of our deposits that were insured or collateralized grew to 66% at June 30, 2023 from 62% at March 31, 2023. We made progress in reducing wholesale funding as outstanding FHLB advances were down $1.6 billion quarter-over-quarter. Net interest income and the net interest margin for the quarter ended June 30, 2023 were impacted by an increase in the cost of funds which more than offset the increased yield on interest-earning assets. A challenging deposit growth environment and a higher level of on-balance sheet liquidity for much of the quarter led to increased reliance on higher cost deposits and wholesale funding. The net interest margin, calculated on a tax-equivalent basis, was 2.47% for the quarter ended June 30, 2023, compared to 2.62% for the immediately preceding quarter ended March 31, 2023 and 2.63% for the quarter ended June 30, 2022. Net interest income decreased by $14.0 million, compared to the immediately preceding quarter ended March 31, 2023 and by $11.5 million compared to the quarter ended June 30, 2022. Consistent with industry trends, rising interest rates and tighter liquidity conditions contributed to an increase in the average cost of total deposits to 2.46% for the quarter ended June 30, 2023 from 2.05% for the immediately preceding quarter. This increase of 0.41% was smaller than the 0.63% increase in the cost of deposits for the quarter ended March 31, 2023. The yield on average interest earning assets increased to 5.30% for the quarter ended June 30, 2023 from 5.05% for the immediately preceding quarter. Total loans declined by $263 million quarter-over-quarter. Most of the decline was attributable to residential which was down by $184 million. Consistent with our strategy to re-position the composition of the balance sheet, cash flows from the residential portfolio were used to pay down wholesale funding. Credit remains favorable. The NPA ratio at June 30, 2023 was 0.34%, including 0.10% related to the guaranteed portion of non-performing SBA loans compared to 0.32%, including 0.10% related to the guaranteed portion of non-performing SBA loans at March 31, 2023. The annualized net charge-off ratio for the six months ended June 30, 2023 was 0.09%. Reflecting management's concentration risk management strategy, commercial real estate exposure is modest. Commercial real estate loans totaled 23% of loans at June 30, 2023, representing 169% of the Bank's total risk based capital. At June 30, 2023, the weighted average LTV of the CRE portfolio was 57.1% and the weighted average DSCR was 1.88. 60% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area. For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million compared to provisions of $19.8 million and $24.0 million for the quarters ended March 31, 2023 and June 30, 2022, respectively. The ratio of the ACL to total loans increased to 0.68%, at June 30, 2023 from 0.64% at March 31, 2023, reflecting the impact on modeling expected credit losses of a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario in calculating the ACL. We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.94 at June 30, 2023. Held to maturity securities were not significant. Our capital position is robust. CET1 was 11.2% at the holding company and 13.0% at the Bank at June 30, 2023. Pro-forma CET1 at the holding company and the Bank, including accumulated other comprehensive income, were 9.7% and 11.5%, respectively. Book value and tangible book value per common share improved to $33.94 and $32.90, respectively, at June 30, 2023, from $33.34 and $32.30, respectively at March 31, 2023. Deposits and Funding Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing demand deposits declined by $62 million, interest-bearing non-maturity deposits declined by $92 million and time deposits grew by $270 million. Account level deposit flows throughout the quarter generally appeared to be within the range of what we consider normal operating activity. Consistent with the current interest rate environment and monetary policy stance, the cost of total deposits increased to 2.46% from 2.05% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the preceding quarter. FHLB advances declined by $1.6 billion for the quarter, as we used cash flows generated by the residential and securities portfolios to reduce wholesale funding levels and allow for future re-deployment of capital into higher yielding assets. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): June 30, 2023 March 31, 2023 December 31, 2022 Residential $ 8,605,838 34.9 % $ 8,789,744 35.3 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,302,523 21.5 % 5,346,895 21.5 % 5,405,597 21.7 % Construction and land 393,464 1.6 % 324,805 1.3 % 294,360 1.2 % Owner occupied commercial real estate 1,832,586 7.4 % 1,863,333 7.5 % 1,890,813 7.6 % Commercial and industrial 6,575,368 26.8 % 6,617,716 26.5 % 6,417,721 25.9 % Pinnacle - municipal finance 951,529 3.9 % 919,584 3.7 % 912,122 3.7 % Franchise finance 207,783 0.8 % 239,205 1.0 % 253,774 1.0 % Equipment finance 237,816 1.0 % 266,715 1.1 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 523,083 2.1 % 524,897 2.1 % 524,740 2.1 % $ 24,629,990 100.0 % $ 24,892,894 100.0 % $ 24,885,988 100.0 % For the quarter ended June 30, 2023, residential declined by $184 million, C&I and CRE declined by $49 million in total, franchise and equipment finance declined by $60 million in aggregate and municipal finance grew by $32 million. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $118.7 million or 0.48% of total loans at June 30, 2023, compared to $114.2 million or 0.46% of total loans at March 31, 2023. Non-performing loans included $35.9 million and $36.9 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.15% of total loans at both June 30, 2023 and March 31, 2023. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): June 30, 2023 March 31, 2023 December 31, 2022 Special mention $ 233,004 $ 101,781 $ 51,433 Substandard - accruing 525,643 596,054 605,965 Substandard - non-accruing 80,642 82,840 75,125 Doubtful 14,954 7,699 7,990 Total $ 854,243 $ 788,374 $ 740,513 One $22 million loan that was moved to special mention during the quarter paid off shortly after quarter-end. The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended June 30, 2023, March 31, 2023 and December 31, 2022 (dollars in thousands): ACL to Total ACL to Non- Net Charge-offs to ACL Loans Performing Loans Average Loans (1) December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % March 31, 2023 $ 158,792 0.64 % 139.01 % 0.08 % June 30, 2023 $ 166,833 0.68 % 140.52 % 0.09 % (1) Annualized for the three months ended March 31, 2023 and the six months ended June 30, 2023. The ACL at June 30, 2023 represents management's estimate of lifetime expected credit losses given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million, including $14.2 million related to funded loans. The more significant factors impacting the provision for credit losses and increase in the ACL for the quarter ended June 30, 2023 were a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Beginning balance $ 158,792 $ 147,946 $ 125,443 $ 147,946 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) N/A (1,794 ) N/A (1,794 ) N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 158,792 146,152 125,443 146,152 126,457 Provision 14,195 17,595 23,207 31,790 30,653 Net charge-offs (6,154 ) (4,955 ) (18,411 ) (11,109 ) (26,871 ) Ending balance $ 166,833 $ 158,792 $ 130,239 $ 166,833 $ 130,239 Net Interest Income Net interest income for the quarter ended June 30, 2023 was $213.9 million, compared to $227.9 million for the immediately preceding quarter ended March 31, 2023 and $225.4 million for the quarter ended June 30, 2022. Interest income increased by $23.0 million for the quarter ended June 30, 2023 compared to the immediately preceding quarter while interest expense increased by $37.0 million. The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.15% to 2.47% for the quarter ended June 30, 2023, from 2.62% for the immediately preceding quarter ended March 31, 2023. Overall, the net interest margin was negatively impacted by an increase in the cost of interest-bearing deposits and FHLB advances, more than offsetting the increased yield on interest earning assets. A decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity contributed to an increase in higher-cost funding. More detail about certain factors impacting the net interest margin for the quarter ended June 30, 2023 follows: The tax-equivalent yield on investment securities increased to 5.19% for the quarter ended June 30, 2023, from 4.95% for the quarter ended March 31, 2023. This increase resulted primarily from the reset of coupon rates on variable rate securities. The tax-equivalent yield on loans increased to 5.35% for the quarter ended June 30, 2023, from 5.10% for the quarter ended March 31, 2023. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase. The average cost on interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the quarter ended March 31, 2023, as a result of the rising interest rate environment, tightening liquidity conditions and the shift from non-interest bearing deposits to deposits priced at current, higher market rates. The average rate paid on FHLB advances increased to 4.59% for the quarter ended June 30, 2023, from 4.27% for the quarter ended March 31, 2023, primarily due to higher prevailing rates, partially offset by the impact of cash flow hedges. Non-interest income and Non-interest expense Non-interest income totaled $25.5 million for the quarter ended June 30, 2023, compared to $16.5 million for the quarter ended March 31, 2023 and $13.5 million for the quarter ended June 30, 2022. This increase over the comparable quarters was primarily attributable to losses on certain preferred equity investments of $13.3 million and $9.3 million during the quarters ended March 31, 2023 and June 30, 2022, respectively. Non-interest expense totaled $145.2 million for the quarter ended June 30, 2023, compared to $152.8 million for the immediately preceding quarter ended March 31, 2023 and $127.4 million for the quarter ended June 30, 2022. The quarter over quarter decline in compensation and benefits reflected expected seasonal fluctuations in payroll taxes and benefits. The quarter over quarter decline in other non-interest expense was impacted by $4.4 million in certain operational losses recognized during the quarter ended March 31, 2023. Costs related to deposit rebate and commission programs increased by $7.2 million for the quarter ended June 30, 2023 compared to the second quarter of the prior year. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, July 25, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BIe6f3323769d343d48b39c8774b18f417. For those unable to join the live event, an archived webcast will be available in the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast. About BankUnited, Inc. BankUnited, Inc., with total assets of $35.9 billion at June 30, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused on the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov). BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands, except share and per share data) June 30, December 31, 2023 2022 ASSETS Cash and due from banks: Non-interest bearing $ 18,355 $ 16,068 Interest bearing 282,814 556,579 Cash and cash equivalents 301,169 572,647 Investment securities (including securities reported at fair value of $9,133,937 and $9,745,327) 9,143,937 9,755,327 Non-marketable equity securities 317,759 294,172 Loans 24,629,990 24,885,988 Allowance for credit losses (166,833 ) (147,946 ) Loans, net 24,463,157 24,738,042 Bank owned life insurance 318,935 308,212 Operating lease equipment, net 514,734 539,799 Goodwill 77,637 77,637 Other assets 734,151 740,876 Total assets $ 35,871,479 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 7,304,735 $ 8,037,848 Interest bearing 2,929,870 2,142,067 Savings and money market 10,084,276 13,061,341 Time 5,519,771 4,268,078 Total deposits 25,838,652 27,509,334 Federal funds purchased — 190,000 FHLB advances 5,975,000 5,420,000 Notes and other borrowings 715,302 720,923 Other liabilities 816,215 750,474 Total liabilities 33,345,169 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,429,948 and 75,674,587 shares issued and outstanding 744 757 Paid-in capital 274,202 321,729 Retained earnings 2,623,926 2,551,400 Accumulated other comprehensive loss (372,562 ) (437,905 ) Total stockholders' equity 2,526,310 2,435,981 Total liabilities and stockholders' equity $ 35,871,479 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2023 2023 2022 2023 2022 Interest income: Loans $ 326,153 $ 308,795 $ 209,223 $ 634,948 $ 400,785 Investment securities 120,604 118,758 54,771 239,362 97,819 Other 16,664 12,863 2,979 29,527 4,333 Total interest income 463,421 440,416 266,973 903,837 502,937 Interest expense: Deposits 156,868 133,630 20,501 290,498 32,363 Borrowings 92,675 78,912 21,056 171,587 36,516 Total interest expense 249,543 212,542 41,557 462,085 68,879 Net interest income before provision for credit losses 213,878 227,874 225,416 441,752 434,058 Provision for credit losses 15,517 19,788 23,996 35,305 31,826 Net interest income after provision for credit losses 198,361 208,086 201,420 406,447 402,232 Non-interest income: Deposit service charges and fees 5,349 5,545 5,896 10,894 11,856 Gain (loss) on investment securities, net 993 (12,549 ) (8,392 ) (11,556 ) (16,260 ) Lease financing 12,519 13,109 13,363 25,628 26,778 Other non-interest income 6,626 10,430 2,583 17,056 5,377 Total non-interest income 25,487 16,535 13,450 42,022 27,751 Non-interest expense: Employee compensation and benefits 67,414 71,051 62,461 138,465 129,549 Occupancy and equipment 11,043 10,802 11,399 21,845 22,911 Deposit insurance expense 7,597 7,907 3,993 15,504 7,396 Professional fees 3,518 2,918 3,256 6,436 5,518 Technology 20,437 21,726 17,898 42,163 34,902 Depreciation of operating lease equipment 11,232 11,521 12,585 22,753 25,195 Other non-interest expense 23,977 26,855 15,810 50,832 28,255 Total non-interest expense 145,218 152,780 127,402 297,998 253,726 Income before income taxes 78,630 71,841 87,468 150,471 176,257 Provision for income taxes 20,634 18,959 21,704 39,593 43,343 Net income $ 57,996 $ 52,882 $ 65,764 $ 110,878 $ 132,914 Earnings per common share, basic $ 0.78 $ 0.71 $ 0.82 $ 1.49 $ 1.61 Earnings per common share, diluted $ 0.78 $ 0.70 $ 0.82 $ 1.48 $ 1.60 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended June 30, Three Months Ended March 31, Three Months Ended June 30, 2023 2023 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Assets: Interest earning assets: Loans $ 24,680,919 $ 329,494 5.35 % $ 24,724,296 $ 312,125 5.10 % $ 23,709,190 $ 212,395 3.59 % Investment securities (3) 9,369,019 121,520 5.19 % 9,672,514 119,666 4.95 % 10,477,600 55,488 2.12 % Other interest earning assets 1,323,025 16,664 5.05 % 1,039,563 12,863 5.02 % 718,904 2,979 1.66 % Total interest earning assets 35,372,963 467,678 5.30 % 35,436,373 444,654 5.05 % 34,905,694 270,862 3.11 % Allowance for credit losses (162,463 ) (151,071 ) (127,864 ) Non-interest earning assets 1,744,693 1,793,000 1,669,689 Total assets $ 36,955,193 $ 37,078,302 $ 36,447,519 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,772,839 $ 18,417 2.66 % $ 2,283,505 $ 10,545 1.87 % $ 2,576,257 $ 1,742 0.27 % Savings and money market deposits 10,285,494 88,892 3.47 % 12,145,922 91,724 3.06 % 13,052,566 15,213 0.47 % Time deposits 5,494,631 49,559 3.62 % 4,526,480 31,361 2.81 % 2,812,988 3,546 0.51 % Total interest bearing deposits 18,552,964 156,868 3.39 % 18,955,907 133,630 2.86 % 18,441,811 20,501 0.45 % Federal funds purchased — — — % 143,580 1,611 4.49 % 115,146 155 0.53 % FHLB advances 7,288,187 83,429 4.59 % 6,465,000 68,039 4.27 % 4,373,736 11,644 1.07 % Notes and other borrowings 719,368 9,246 5.14 % 720,906 9,262 5.14 % 721,284 9,257 5.13 % Total interest bearing liabilities 26,560,519 249,543 3.77 % 26,285,393 212,542 3.28 % 23,651,977 41,557 0.70 % Non-interest bearing demand deposits 7,067,053 7,458,221 9,419,025 Other non-interest bearing liabilities 798,279 821,419 654,162 Total liabilities 34,425,851 34,565,033 33,725,164 Stockholders' equity 2,529,342 2,513,269 2,722,355 Total liabilities and stockholders' equity $ 36,955,193 $ 37,078,302 $ 36,447,519 Net interest income $ 218,135 $ 232,112 $ 229,305 Interest rate spread 1.53 % 1.77 % 2.41 % Net interest margin 2.47 % 2.62 % 2.63 % (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Six Months Ended June 30, 2023 2022 Average Yield/ Average Yield/ Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Assets: Interest earning assets: Loans $ 24,702,487 $ 641,617 5.22 % $ 23,530,162 $ 406,946 3.47 % Investment securities (3) 9,519,928 241,187 5.07 % 10,281,431 99,207 1.93 % Other interest earning assets 1,182,077 29,527 5.04 % 696,894 4,333 1.25 % Total interest earning assets 35,404,492 912,331 5.18 % 34,508,487 510,486 2.97 % Allowance for credit losses (156,798 ) (128,443 ) Non-interest earning assets 1,768,714 1,672,070 Total assets $ 37,016,408 $ 36,052,114 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,570,422 $ 29,291 2.30 % $ 2,825,830 $ 3,111 0.22 % Savings and money market deposits 11,169,671 180,287 3.25 % 13,225,986 22,866 0.35 % Time deposits 5,013,230 80,920 3.26 % 3,064,887 6,386 0.42 % Total interest bearing deposits 18,753,323 290,498 3.12 % 19,116,703 32,363 0.34 % Federal funds purchased 71,393 1,611 4.51 % 151,074 213 0.28 % FHLB advances 6,878,867 151,467 4.44 % 3,317,182 17,790 1.08 % Notes and other borrowings 720,133 18,509 5.14 % 721,344 18,513 5.13 % Total interest bearing liabilities 26,423,716 462,085 3.53 % 23,306,303 68,879 0.59 % Non-interest bearing demand deposits 7,261,557 9,234,469 Other non-interest bearing liabilities 809,785 638,767 Total liabilities 34,495,058 33,179,539 Stockholders' equity 2,521,350 2,872,575 Total liabilities and stockholders' equity $ 37,016,408 $ 36,052,114 Net interest income $ 450,246 $ 441,607 Interest rate spread 1.65 % 2.38 % Net interest margin 2.55 % 2.57 % (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES EARNINGS PER COMMON SHARE (In thousands except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Basic earnings per common share: Numerator: Net income $ 57,996 $ 65,764 $ 110,878 $ 132,914 Distributed and undistributed earnings allocated to participating securities (881 ) (999 ) (1,679 ) (1,927 ) Income allocated to common stockholders for basic earnings per common share $ 57,115 $ 64,765 $ 109,199 $ 130,987 Denominator: Weighted average common shares outstanding 74,424,631 80,300,069 74,588,904 82,629,098 Less average unvested stock awards (1,183,039 ) (1,257,258 ) (1,188,430 ) (1,234,678 ) Weighted average shares for basic earnings per common share 73,241,592 79,042,811 73,400,474 81,394,420 Basic earnings per common share $ 0.78 $ 0.82 $ 1.49 $ 1.61 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 57,115 $ 64,765 $ 109,199 $ 130,987 Adjustment for earnings reallocated from participating securities 1 3 5 4 Income used in calculating diluted earnings per common share $ 57,116 $ 64,768 $ 109,204 $ 130,991 Denominator: Weighted average shares for basic earnings per common share 73,241,592 79,042,811 73,400,474 81,394,420 Dilutive effect of certain share-based awards 179,318 350,734 312,708 244,808 Weighted average shares for diluted earnings per common share 73,420,910 79,393,545 73,713,182 81,639,228 Diluted earnings per common share $ 0.78 $ 0.82 $ 1.48 $ 1.60 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended Six Months Ended June 30, June 30, 2023 March 31, 2023 June 30, 2022 2023 2022 Financial ratios (4) Return on average assets 0.63 % 0.58 % 0.72 % 0.60 % 0.74 % Return on average stockholders’ equity 9.2 % 8.5 % 9.7 % 8.9 % 9.3 % Net interest margin (3) 2.47 % 2.62 % 2.63 % 2.55 % 2.57 % Loans to deposits 95.3 % 96.8 % 84.7 % Tangible book value per common share $ 32.90 $ 32.30 $ 31.16 June 30, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.48 % 0.42 % Non-performing assets to total assets (2)(5) 0.34 % 0.29 % Allowance for credit losses to total loans 0.68 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 140.52 % 140.88 % Net charge-offs to average loans (4) 0.09 % 0.22 % (1) We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans. (2) Non-performing assets include non-performing loans, OREO and other repossessed assets. (3) On a tax-equivalent basis. (4) Annualized for the three and six month periods as applicable. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $35.9 million or 0.15% of total loans and 0.10% of total assets at June 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. June 30, 2023 March 31, 2023 December 31, 2022 Required to be Considered Well Capitalized BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. Capital ratios Tier 1 leverage 7.6 % 8.8 % 7.4 % 8.6 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.2 % 13.0 % 10.8 % 12.5 % 11.0 % 12.4 % 6.5 % Total risk-based capital 13.0 % 13.6 % 12.6 % 13.1 % 12.7 % 12.9 % 10.0 % Tangible Common Equity/Tangible Assets 6.8 % N/A 6.5 % N/A 6.4 % N/A N/A Non-GAAP Financial Measures Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data): June 30, 2023 March 31, 2023 June 30, 2022 Total stockholders’ equity $ 2,526,310 $ 2,481,394 $ 2,506,017 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,448,673 $ 2,403,757 $ 2,428,380 Common shares issued and outstanding 74,429,948 74,423,365 77,944,216 Book value per common share $ 33.94 $ 33.34 $ 32.15 Tangible book value per common share $ 32.90 $ 32.30 $ 31.16 View source version on businesswire.com: https://www.businesswire.com/news/home/20230725471731/en/Contacts BankUnited, Inc. Investor Relations: Leslie N. Lunak, 786-313-1698 llunak@bankunited.com
BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2023. "As volatility in the capital markets recedes and the economy remains resilient, we have returned our focus to executing on our long term strategy of building a relationship oriented bank," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended June 30, 2023, the Company reported net income of $58.0 million, or $0.78 per diluted share, compared to $52.9 million, or $0.70 per diluted share for the immediately preceding quarter ended March 31, 2023 and $65.8 million, or $0.82 per diluted share, for the quarter ended June 30, 2022. For the six months ended June 30, 2023, the Company reported net income of $110.9 million or $1.48 per diluted share compared to $132.9 million or $1.60 per diluted share for the six months ended June 30, 2022. Quarterly Highlights Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing deposits remained largely consistent as a percentage of deposits, representing 28.3% of total deposits at June 30, 2023 compared to 28.6% at March 31, 2023, declining by $62 million for the quarter. Our liquidity position remains strong, and improved over the course of the second quarter. At June 30, 2023, total same day available liquidity had increased to $14.7 billion from $9.4 billion at March 31, 2023. The available liquidity to uninsured, uncollateralized deposits ratio improved to 167% at June 30, 2023 from 95% at March 31, 2023 while the portion of our deposits that were insured or collateralized grew to 66% at June 30, 2023 from 62% at March 31, 2023. We made progress in reducing wholesale funding as outstanding FHLB advances were down $1.6 billion quarter-over-quarter. Net interest income and the net interest margin for the quarter ended June 30, 2023 were impacted by an increase in the cost of funds which more than offset the increased yield on interest-earning assets. A challenging deposit growth environment and a higher level of on-balance sheet liquidity for much of the quarter led to increased reliance on higher cost deposits and wholesale funding. The net interest margin, calculated on a tax-equivalent basis, was 2.47% for the quarter ended June 30, 2023, compared to 2.62% for the immediately preceding quarter ended March 31, 2023 and 2.63% for the quarter ended June 30, 2022. Net interest income decreased by $14.0 million, compared to the immediately preceding quarter ended March 31, 2023 and by $11.5 million compared to the quarter ended June 30, 2022. Consistent with industry trends, rising interest rates and tighter liquidity conditions contributed to an increase in the average cost of total deposits to 2.46% for the quarter ended June 30, 2023 from 2.05% for the immediately preceding quarter. This increase of 0.41% was smaller than the 0.63% increase in the cost of deposits for the quarter ended March 31, 2023. The yield on average interest earning assets increased to 5.30% for the quarter ended June 30, 2023 from 5.05% for the immediately preceding quarter. Total loans declined by $263 million quarter-over-quarter. Most of the decline was attributable to residential which was down by $184 million. Consistent with our strategy to re-position the composition of the balance sheet, cash flows from the residential portfolio were used to pay down wholesale funding. Credit remains favorable. The NPA ratio at June 30, 2023 was 0.34%, including 0.10% related to the guaranteed portion of non-performing SBA loans compared to 0.32%, including 0.10% related to the guaranteed portion of non-performing SBA loans at March 31, 2023. The annualized net charge-off ratio for the six months ended June 30, 2023 was 0.09%. Reflecting management's concentration risk management strategy, commercial real estate exposure is modest. Commercial real estate loans totaled 23% of loans at June 30, 2023, representing 169% of the Bank's total risk based capital. At June 30, 2023, the weighted average LTV of the CRE portfolio was 57.1% and the weighted average DSCR was 1.88. 60% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area. For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million compared to provisions of $19.8 million and $24.0 million for the quarters ended March 31, 2023 and June 30, 2022, respectively. The ratio of the ACL to total loans increased to 0.68%, at June 30, 2023 from 0.64% at March 31, 2023, reflecting the impact on modeling expected credit losses of a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario in calculating the ACL. We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.94 at June 30, 2023. Held to maturity securities were not significant. Our capital position is robust. CET1 was 11.2% at the holding company and 13.0% at the Bank at June 30, 2023. Pro-forma CET1 at the holding company and the Bank, including accumulated other comprehensive income, were 9.7% and 11.5%, respectively. Book value and tangible book value per common share improved to $33.94 and $32.90, respectively, at June 30, 2023, from $33.34 and $32.30, respectively at March 31, 2023. Deposits and Funding Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing demand deposits declined by $62 million, interest-bearing non-maturity deposits declined by $92 million and time deposits grew by $270 million. Account level deposit flows throughout the quarter generally appeared to be within the range of what we consider normal operating activity. Consistent with the current interest rate environment and monetary policy stance, the cost of total deposits increased to 2.46% from 2.05% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the preceding quarter. FHLB advances declined by $1.6 billion for the quarter, as we used cash flows generated by the residential and securities portfolios to reduce wholesale funding levels and allow for future re-deployment of capital into higher yielding assets. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): June 30, 2023 March 31, 2023 December 31, 2022 Residential $ 8,605,838 34.9 % $ 8,789,744 35.3 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,302,523 21.5 % 5,346,895 21.5 % 5,405,597 21.7 % Construction and land 393,464 1.6 % 324,805 1.3 % 294,360 1.2 % Owner occupied commercial real estate 1,832,586 7.4 % 1,863,333 7.5 % 1,890,813 7.6 % Commercial and industrial 6,575,368 26.8 % 6,617,716 26.5 % 6,417,721 25.9 % Pinnacle - municipal finance 951,529 3.9 % 919,584 3.7 % 912,122 3.7 % Franchise finance 207,783 0.8 % 239,205 1.0 % 253,774 1.0 % Equipment finance 237,816 1.0 % 266,715 1.1 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 523,083 2.1 % 524,897 2.1 % 524,740 2.1 % $ 24,629,990 100.0 % $ 24,892,894 100.0 % $ 24,885,988 100.0 % For the quarter ended June 30, 2023, residential declined by $184 million, C&I and CRE declined by $49 million in total, franchise and equipment finance declined by $60 million in aggregate and municipal finance grew by $32 million. Asset Quality and the Allowance for Credit Losses ("ACL") Non-performing loans totaled $118.7 million or 0.48% of total loans at June 30, 2023, compared to $114.2 million or 0.46% of total loans at March 31, 2023. Non-performing loans included $35.9 million and $36.9 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.15% of total loans at both June 30, 2023 and March 31, 2023. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): June 30, 2023 March 31, 2023 December 31, 2022 Special mention $ 233,004 $ 101,781 $ 51,433 Substandard - accruing 525,643 596,054 605,965 Substandard - non-accruing 80,642 82,840 75,125 Doubtful 14,954 7,699 7,990 Total $ 854,243 $ 788,374 $ 740,513 One $22 million loan that was moved to special mention during the quarter paid off shortly after quarter-end. The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended June 30, 2023, March 31, 2023 and December 31, 2022 (dollars in thousands): ACL to Total ACL to Non- Net Charge-offs to ACL Loans Performing Loans Average Loans (1) December 31, 2022 $ 147,946 0.59 % 140.88 % 0.22 % March 31, 2023 $ 158,792 0.64 % 139.01 % 0.08 % June 30, 2023 $ 166,833 0.68 % 140.52 % 0.09 % (1) Annualized for the three months ended March 31, 2023 and the six months ended June 30, 2023. The ACL at June 30, 2023 represents management's estimate of lifetime expected credit losses given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million, including $14.2 million related to funded loans. The more significant factors impacting the provision for credit losses and increase in the ACL for the quarter ended June 30, 2023 were a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Beginning balance $ 158,792 $ 147,946 $ 125,443 $ 147,946 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) N/A (1,794 ) N/A (1,794 ) N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 158,792 146,152 125,443 146,152 126,457 Provision 14,195 17,595 23,207 31,790 30,653 Net charge-offs (6,154 ) (4,955 ) (18,411 ) (11,109 ) (26,871 ) Ending balance $ 166,833 $ 158,792 $ 130,239 $ 166,833 $ 130,239 Net Interest Income Net interest income for the quarter ended June 30, 2023 was $213.9 million, compared to $227.9 million for the immediately preceding quarter ended March 31, 2023 and $225.4 million for the quarter ended June 30, 2022. Interest income increased by $23.0 million for the quarter ended June 30, 2023 compared to the immediately preceding quarter while interest expense increased by $37.0 million. The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.15% to 2.47% for the quarter ended June 30, 2023, from 2.62% for the immediately preceding quarter ended March 31, 2023. Overall, the net interest margin was negatively impacted by an increase in the cost of interest-bearing deposits and FHLB advances, more than offsetting the increased yield on interest earning assets. A decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity contributed to an increase in higher-cost funding. More detail about certain factors impacting the net interest margin for the quarter ended June 30, 2023 follows: The tax-equivalent yield on investment securities increased to 5.19% for the quarter ended June 30, 2023, from 4.95% for the quarter ended March 31, 2023. This increase resulted primarily from the reset of coupon rates on variable rate securities. The tax-equivalent yield on loans increased to 5.35% for the quarter ended June 30, 2023, from 5.10% for the quarter ended March 31, 2023. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase. The average cost on interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the quarter ended March 31, 2023, as a result of the rising interest rate environment, tightening liquidity conditions and the shift from non-interest bearing deposits to deposits priced at current, higher market rates. The average rate paid on FHLB advances increased to 4.59% for the quarter ended June 30, 2023, from 4.27% for the quarter ended March 31, 2023, primarily due to higher prevailing rates, partially offset by the impact of cash flow hedges. Non-interest income and Non-interest expense Non-interest income totaled $25.5 million for the quarter ended June 30, 2023, compared to $16.5 million for the quarter ended March 31, 2023 and $13.5 million for the quarter ended June 30, 2022. This increase over the comparable quarters was primarily attributable to losses on certain preferred equity investments of $13.3 million and $9.3 million during the quarters ended March 31, 2023 and June 30, 2022, respectively. Non-interest expense totaled $145.2 million for the quarter ended June 30, 2023, compared to $152.8 million for the immediately preceding quarter ended March 31, 2023 and $127.4 million for the quarter ended June 30, 2022. The quarter over quarter decline in compensation and benefits reflected expected seasonal fluctuations in payroll taxes and benefits. The quarter over quarter decline in other non-interest expense was impacted by $4.4 million in certain operational losses recognized during the quarter ended March 31, 2023. Costs related to deposit rebate and commission programs increased by $7.2 million for the quarter ended June 30, 2023 compared to the second quarter of the prior year. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, July 25, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish. The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BIe6f3323769d343d48b39c8774b18f417. For those unable to join the live event, an archived webcast will be available in the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast. About BankUnited, Inc. BankUnited, Inc., with total assets of $35.9 billion at June 30, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused on the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov). BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands, except share and per share data) June 30, December 31, 2023 2022 ASSETS Cash and due from banks: Non-interest bearing $ 18,355 $ 16,068 Interest bearing 282,814 556,579 Cash and cash equivalents 301,169 572,647 Investment securities (including securities reported at fair value of $9,133,937 and $9,745,327) 9,143,937 9,755,327 Non-marketable equity securities 317,759 294,172 Loans 24,629,990 24,885,988 Allowance for credit losses (166,833 ) (147,946 ) Loans, net 24,463,157 24,738,042 Bank owned life insurance 318,935 308,212 Operating lease equipment, net 514,734 539,799 Goodwill 77,637 77,637 Other assets 734,151 740,876 Total assets $ 35,871,479 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 7,304,735 $ 8,037,848 Interest bearing 2,929,870 2,142,067 Savings and money market 10,084,276 13,061,341 Time 5,519,771 4,268,078 Total deposits 25,838,652 27,509,334 Federal funds purchased — 190,000 FHLB advances 5,975,000 5,420,000 Notes and other borrowings 715,302 720,923 Other liabilities 816,215 750,474 Total liabilities 33,345,169 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,429,948 and 75,674,587 shares issued and outstanding 744 757 Paid-in capital 274,202 321,729 Retained earnings 2,623,926 2,551,400 Accumulated other comprehensive loss (372,562 ) (437,905 ) Total stockholders' equity 2,526,310 2,435,981 Total liabilities and stockholders' equity $ 35,871,479 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2023 2023 2022 2023 2022 Interest income: Loans $ 326,153 $ 308,795 $ 209,223 $ 634,948 $ 400,785 Investment securities 120,604 118,758 54,771 239,362 97,819 Other 16,664 12,863 2,979 29,527 4,333 Total interest income 463,421 440,416 266,973 903,837 502,937 Interest expense: Deposits 156,868 133,630 20,501 290,498 32,363 Borrowings 92,675 78,912 21,056 171,587 36,516 Total interest expense 249,543 212,542 41,557 462,085 68,879 Net interest income before provision for credit losses 213,878 227,874 225,416 441,752 434,058 Provision for credit losses 15,517 19,788 23,996 35,305 31,826 Net interest income after provision for credit losses 198,361 208,086 201,420 406,447 402,232 Non-interest income: Deposit service charges and fees 5,349 5,545 5,896 10,894 11,856 Gain (loss) on investment securities, net 993 (12,549 ) (8,392 ) (11,556 ) (16,260 ) Lease financing 12,519 13,109 13,363 25,628 26,778 Other non-interest income 6,626 10,430 2,583 17,056 5,377 Total non-interest income 25,487 16,535 13,450 42,022 27,751 Non-interest expense: Employee compensation and benefits 67,414 71,051 62,461 138,465 129,549 Occupancy and equipment 11,043 10,802 11,399 21,845 22,911 Deposit insurance expense 7,597 7,907 3,993 15,504 7,396 Professional fees 3,518 2,918 3,256 6,436 5,518 Technology 20,437 21,726 17,898 42,163 34,902 Depreciation of operating lease equipment 11,232 11,521 12,585 22,753 25,195 Other non-interest expense 23,977 26,855 15,810 50,832 28,255 Total non-interest expense 145,218 152,780 127,402 297,998 253,726 Income before income taxes 78,630 71,841 87,468 150,471 176,257 Provision for income taxes 20,634 18,959 21,704 39,593 43,343 Net income $ 57,996 $ 52,882 $ 65,764 $ 110,878 $ 132,914 Earnings per common share, basic $ 0.78 $ 0.71 $ 0.82 $ 1.49 $ 1.61 Earnings per common share, diluted $ 0.78 $ 0.70 $ 0.82 $ 1.48 $ 1.60 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended June 30, Three Months Ended March 31, Three Months Ended June 30, 2023 2023 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Assets: Interest earning assets: Loans $ 24,680,919 $ 329,494 5.35 % $ 24,724,296 $ 312,125 5.10 % $ 23,709,190 $ 212,395 3.59 % Investment securities (3) 9,369,019 121,520 5.19 % 9,672,514 119,666 4.95 % 10,477,600 55,488 2.12 % Other interest earning assets 1,323,025 16,664 5.05 % 1,039,563 12,863 5.02 % 718,904 2,979 1.66 % Total interest earning assets 35,372,963 467,678 5.30 % 35,436,373 444,654 5.05 % 34,905,694 270,862 3.11 % Allowance for credit losses (162,463 ) (151,071 ) (127,864 ) Non-interest earning assets 1,744,693 1,793,000 1,669,689 Total assets $ 36,955,193 $ 37,078,302 $ 36,447,519 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,772,839 $ 18,417 2.66 % $ 2,283,505 $ 10,545 1.87 % $ 2,576,257 $ 1,742 0.27 % Savings and money market deposits 10,285,494 88,892 3.47 % 12,145,922 91,724 3.06 % 13,052,566 15,213 0.47 % Time deposits 5,494,631 49,559 3.62 % 4,526,480 31,361 2.81 % 2,812,988 3,546 0.51 % Total interest bearing deposits 18,552,964 156,868 3.39 % 18,955,907 133,630 2.86 % 18,441,811 20,501 0.45 % Federal funds purchased — — — % 143,580 1,611 4.49 % 115,146 155 0.53 % FHLB advances 7,288,187 83,429 4.59 % 6,465,000 68,039 4.27 % 4,373,736 11,644 1.07 % Notes and other borrowings 719,368 9,246 5.14 % 720,906 9,262 5.14 % 721,284 9,257 5.13 % Total interest bearing liabilities 26,560,519 249,543 3.77 % 26,285,393 212,542 3.28 % 23,651,977 41,557 0.70 % Non-interest bearing demand deposits 7,067,053 7,458,221 9,419,025 Other non-interest bearing liabilities 798,279 821,419 654,162 Total liabilities 34,425,851 34,565,033 33,725,164 Stockholders' equity 2,529,342 2,513,269 2,722,355 Total liabilities and stockholders' equity $ 36,955,193 $ 37,078,302 $ 36,447,519 Net interest income $ 218,135 $ 232,112 $ 229,305 Interest rate spread 1.53 % 1.77 % 2.41 % Net interest margin 2.47 % 2.62 % 2.63 % (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Six Months Ended June 30, 2023 2022 Average Yield/ Average Yield/ Balance Interest (1) Rate (1)(2) Balance Interest (1) Rate (1)(2) Assets: Interest earning assets: Loans $ 24,702,487 $ 641,617 5.22 % $ 23,530,162 $ 406,946 3.47 % Investment securities (3) 9,519,928 241,187 5.07 % 10,281,431 99,207 1.93 % Other interest earning assets 1,182,077 29,527 5.04 % 696,894 4,333 1.25 % Total interest earning assets 35,404,492 912,331 5.18 % 34,508,487 510,486 2.97 % Allowance for credit losses (156,798 ) (128,443 ) Non-interest earning assets 1,768,714 1,672,070 Total assets $ 37,016,408 $ 36,052,114 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,570,422 $ 29,291 2.30 % $ 2,825,830 $ 3,111 0.22 % Savings and money market deposits 11,169,671 180,287 3.25 % 13,225,986 22,866 0.35 % Time deposits 5,013,230 80,920 3.26 % 3,064,887 6,386 0.42 % Total interest bearing deposits 18,753,323 290,498 3.12 % 19,116,703 32,363 0.34 % Federal funds purchased 71,393 1,611 4.51 % 151,074 213 0.28 % FHLB advances 6,878,867 151,467 4.44 % 3,317,182 17,790 1.08 % Notes and other borrowings 720,133 18,509 5.14 % 721,344 18,513 5.13 % Total interest bearing liabilities 26,423,716 462,085 3.53 % 23,306,303 68,879 0.59 % Non-interest bearing demand deposits 7,261,557 9,234,469 Other non-interest bearing liabilities 809,785 638,767 Total liabilities 34,495,058 33,179,539 Stockholders' equity 2,521,350 2,872,575 Total liabilities and stockholders' equity $ 37,016,408 $ 36,052,114 Net interest income $ 450,246 $ 441,607 Interest rate spread 1.65 % 2.38 % Net interest margin 2.55 % 2.57 % (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES EARNINGS PER COMMON SHARE (In thousands except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Basic earnings per common share: Numerator: Net income $ 57,996 $ 65,764 $ 110,878 $ 132,914 Distributed and undistributed earnings allocated to participating securities (881 ) (999 ) (1,679 ) (1,927 ) Income allocated to common stockholders for basic earnings per common share $ 57,115 $ 64,765 $ 109,199 $ 130,987 Denominator: Weighted average common shares outstanding 74,424,631 80,300,069 74,588,904 82,629,098 Less average unvested stock awards (1,183,039 ) (1,257,258 ) (1,188,430 ) (1,234,678 ) Weighted average shares for basic earnings per common share 73,241,592 79,042,811 73,400,474 81,394,420 Basic earnings per common share $ 0.78 $ 0.82 $ 1.49 $ 1.61 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 57,115 $ 64,765 $ 109,199 $ 130,987 Adjustment for earnings reallocated from participating securities 1 3 5 4 Income used in calculating diluted earnings per common share $ 57,116 $ 64,768 $ 109,204 $ 130,991 Denominator: Weighted average shares for basic earnings per common share 73,241,592 79,042,811 73,400,474 81,394,420 Dilutive effect of certain share-based awards 179,318 350,734 312,708 244,808 Weighted average shares for diluted earnings per common share 73,420,910 79,393,545 73,713,182 81,639,228 Diluted earnings per common share $ 0.78 $ 0.82 $ 1.48 $ 1.60 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended Six Months Ended June 30, June 30, 2023 March 31, 2023 June 30, 2022 2023 2022 Financial ratios (4) Return on average assets 0.63 % 0.58 % 0.72 % 0.60 % 0.74 % Return on average stockholders’ equity 9.2 % 8.5 % 9.7 % 8.9 % 9.3 % Net interest margin (3) 2.47 % 2.62 % 2.63 % 2.55 % 2.57 % Loans to deposits 95.3 % 96.8 % 84.7 % Tangible book value per common share $ 32.90 $ 32.30 $ 31.16 June 30, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.48 % 0.42 % Non-performing assets to total assets (2)(5) 0.34 % 0.29 % Allowance for credit losses to total loans 0.68 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 140.52 % 140.88 % Net charge-offs to average loans (4) 0.09 % 0.22 % (1) We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans. (2) Non-performing assets include non-performing loans, OREO and other repossessed assets. (3) On a tax-equivalent basis. (4) Annualized for the three and six month periods as applicable. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $35.9 million or 0.15% of total loans and 0.10% of total assets at June 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. June 30, 2023 March 31, 2023 December 31, 2022 Required to be Considered Well Capitalized BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. BankUnited, Inc. BankUnited, N.A. Capital ratios Tier 1 leverage 7.6 % 8.8 % 7.4 % 8.6 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.2 % 13.0 % 10.8 % 12.5 % 11.0 % 12.4 % 6.5 % Total risk-based capital 13.0 % 13.6 % 12.6 % 13.1 % 12.7 % 12.9 % 10.0 % Tangible Common Equity/Tangible Assets 6.8 % N/A 6.5 % N/A 6.4 % N/A N/A Non-GAAP Financial Measures Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data): June 30, 2023 March 31, 2023 June 30, 2022 Total stockholders’ equity $ 2,526,310 $ 2,481,394 $ 2,506,017 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,448,673 $ 2,403,757 $ 2,428,380 Common shares issued and outstanding 74,429,948 74,423,365 77,944,216 Book value per common share $ 33.94 $ 33.34 $ 32.15 Tangible book value per common share $ 32.90 $ 32.30 $ 31.16 View source version on businesswire.com: https://www.businesswire.com/news/home/20230725471731/en/