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 2023 Results By: BankUnited, Inc. via Business Wire January 26, 2024 at 06:45 AM EST BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2023. "We finished the year with continued improvement on both sides of our balance sheet, expanding margin and strong credit performance. We are benefiting from a strong economy in our primary market and are looking forward to 2024 with great optimism," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended December 31, 2023, the Company reported net income of $20.8 million, or $0.27 per diluted share, compared to $47.0 million, or $0.63 per diluted share, for the immediately preceding quarter ended September 30, 2023 and $64.2 million, or $0.82 per diluted share, for the quarter ended December 31, 2022. For the year ended December 31, 2023, the Company reported net income of $178.7 million, or $2.38 per diluted share, compared to $285.0 million, or $3.54 per diluted share, for the year ended December 31, 2022. Results for the quarter ended December 31, 2023 were negatively impacted by $41.8 million of notable items impacting income before taxes, related to the FDIC special assessment and a loss on sale of operating lease equipment as detailed below. Quarterly Highlights Two notable items totaling $41.8 million impacted income before income taxes for the quarter ended December 31, 2023 (in thousands): FDIC special assessment $ 35,356 Loss on sale of operating lease equipment 6,479 $ 41,835 The loss on sale of operating lease equipment of $6.5 million compares to a gain of $4.2 million on sale of operating lease equipment in the immediately preceding quarter, for a variance of $10.7 million. We continued to execute on near-term strategic priorities this quarter: The net interest margin, calculated on a tax-equivalent basis, expanded this quarter to 2.60% from 2.56% for the immediately preceding quarter. Non-brokered deposits grew by $604 million for the quarter ended December 31, 2023. Total deposits grew by $426 million. Non-interest bearing deposits declined by $521 million for the quarter, to 26% of total deposits at December 31, 2023, from 28% at September 30, 2023. On an average basis, non-interest bearing deposits were relatively flat to the prior quarter, declining by only $28.5 million. Most of the period-end decline was attributable to quarter-end outflows related to seasonality in the residential real estate sector, impacting our title solutions vertical and other mortgage related deposits. Residential loans declined by $172 million for the quarter, while our core C&I and commercial real estate portfolios grew by a total of $476 million. Since December 31, 2022, residential loans have declined by $692 million. The amortized cost of the investment securities portfolio declined by $106 million during the quarter ended December 31, 2023 and has declined by $959 million since December 31, 2022. Wholesale funding, including FHLB advances and brokered deposits, declined by $228 million for the quarter. We have paid down FHLB advances by $2.4 billion since March 31, 2023. Liquidity remains ample. Total same day available liquidity was $13.6 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 152% and an estimated 66% of our deposits were insured or collateralized at December 31, 2023. Our capital position is robust. At December 31, 2023, CET1 was 11.4% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.0% at December 31, 2023. The ratio of tangible common equity/tangible assets increased to 7.0% at December 31, 2023. For the quarter ended December 31, 2023, the provision for credit losses was $19.3 million compared to $33.0 million for the immediately preceding quarter. The ratio of the ACL to total loans increased to 0.82% at December 31, 2023, from 0.80% at September 30, 2023. The net charge-off ratio for the year ended December 31, 2023 was 0.09%. NPAs remained low, totaling $130.6 million at December 31, 2023, down from $140.5 million at September 30, 2023. The NPA ratio at December 31, 2023 declined to 0.37%, including 0.12% related to the guaranteed portion of non-performing SBA loans, from 0.40%, including 0.11% related to the guaranteed portion of non-performing SBA loans at September 30, 2023. As expected in the current macro-environment, the average cost of total deposits increased to 2.96% for the quarter ended December 31, 2023 from 2.74% for the immediately preceding quarter. This increase of 0.22% was smaller than the 0.28% increase in the cost of deposits for the quarter ended September 30, 2023, continuing the trend of a declining rate of increase in deposit costs. The yield on average interest earning assets increased to 5.70% for the quarter ended December 31, 2023 from 5.52% for the immediately preceding quarter. Our commercial real estate exposure is modest. Commercial real estate loans totaled 23.6% of loans at December 31, 2023, representing 169% of the Bank's total risk based capital. At December 31, 2023, the weighted average LTV of the CRE portfolio was 56.0% and the weighted average DSCR was 1.80. 58% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area. We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.96 at December 31, 2023. Held to maturity securities were not significant. The net unrealized pre-tax loss on the securities portfolio improved by $109 million for the quarter ended December 31, 2023, now representing 6% of amortized cost. AOCI improved by $50 million. Book value and tangible book value per common share continued to grow, to $34.66 and $33.62, respectively, at December 31, 2023, compared to $33.92 and $32.88, respectively, at September 30, 2023 and $32.19 and $31.16, respectively, at December 31, 2022. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): December 31, 2023 September 30, 2023 December 31, 2022 Residential $ 8,209,027 33.3 % $ 8,380,568 34.4 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,323,241 21.6 % 5,296,784 21.7 % 5,405,597 21.7 % Construction and land 495,992 2.0 % 445,273 1.8 % 294,360 1.2 % Owner occupied commercial real estate 1,935,743 7.9 % 1,851,246 7.6 % 1,890,813 7.6 % Commercial and industrial 6,971,981 28.3 % 6,658,010 27.4 % 6,417,721 25.9 % Pinnacle - municipal finance 884,690 3.6 % 900,199 3.7 % 912,122 3.7 % Franchise finance 182,408 0.7 % 196,745 0.8 % 253,774 1.0 % Equipment finance 197,939 0.8 % 219,874 0.9 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 432,663 1.8 % 407,577 1.7 % 524,740 2.1 % $ 24,633,684 100.0 % $ 24,356,276 100.0 % $ 24,885,988 100.0 % Consistent with our balance sheet strategy, for the quarter ended December 31, 2023, residential loans declined by $172 million, while C&I grew by $399 million, CRE grew by $77 million and MWL grew by $25 million. Franchise, equipment and municipal finance declined by $52 million in aggregate. Asset Quality and the Allowance for Credit Losses ("ACL") The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended December 31, 2023, September 30, 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 % September 30, 2023 $ 196,063 0.80 % 143.22 % 0.07 % December 31, 2023 $ 202,689 0.82 % 159.54 % 0.09 % ____________ (1) Annualized for the nine months ended September 30, 2023. The ACL at December 31, 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 December 31, 2023, the provision for credit losses was $19.3 million, including $16.3 million related to funded loans. Factors impacting the provision for credit losses and increase in the ACL for the quarter ended December 31, 2023 included the shift in balance sheet composition toward commercial loan categories that typically carry higher reserves and risk rating migration. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended December 31, Years Ended December 31, 2023 2022 2023 2022 Beginning balance $ 196,063 $ 130,671 $ 147,946 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) N/A N/A (1,794 ) N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 196,063 130,671 146,152 126,457 Provision 16,257 40,408 78,924 73,814 Net charge-offs (9,631 ) (23,133 ) (22,387 ) (52,325 ) Ending balance $ 202,689 $ 147,946 $ 202,689 $ 147,946 Non-performing loans totaled $127.0 million or 0.52% of total loans at December 31, 2023, compared to $136.9 million or 0.56% of total loans at September 30, 2023. Non-performing loans included $41.8 million and $37.8 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.17% and 0.16% of total loans at December 31, 2023 and September 30, 2023, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): December 31, 2023 September 30, 2023 December 31, 2022 Special mention $ 319,905 $ 341,999 $ 51,433 Substandard - accruing 711,266 534,336 605,965 Substandard - non-accruing 86,903 96,248 75,125 Doubtful 19,035 19,344 7,990 Total $ 1,137,109 $ 991,927 $ 740,513 The increase in the substandard accruing category for the quarter ended December 31, 2023 included $74 million of C&I and $118 million of CRE. All of these loans are performing. The substantial majority of the increase was attributable to a small number of loans. Increasing operating costs, including insurance and interest costs, and higher vacancy rates for some office properties were contributing factors. Net Interest Income Net interest income for the quarter ended December 31, 2023 was $217.2 million, compared to $214.8 million for the immediately preceding quarter ended September 30, 2023 and $243.1 million for the quarter ended December 31, 2022. Interest income increased by $12.7 million for the quarter ended December 31, 2023 compared to the immediately preceding quarter, while interest expense increased by $10.3 million. The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.04% to 2.60% for the quarter ended December 31, 2023, from 2.56% for the immediately preceding quarter ended September 30, 2023. Factors impacting the net interest margin for the quarter ended December 31, 2023 were: The tax-equivalent yield on loans increased to 5.69% for the quarter ended December 31, 2023, from 5.54% for the quarter ended September 30, 2023. This increase reflects the origination of new loans at higher rates, re-positioning of the portfolio and to a lesser extent, the resetting of variable rate loans to higher coupon rates. The tax-equivalent yield on investment securities increased to 5.73% for the quarter ended December 31, 2023, from 5.48% for the quarter ended September 30, 2023. Factors leading to this increase included the reset of coupon rates on variable rate securities and retrospective accounting adjustments related to prepayment speeds on certain securities. The average cost of interest bearing deposits increased to 4.04% for the quarter ended December 31, 2023 from 3.76% for the quarter ended September 30, 2023, a continuing response to the higher interest rate environment. The reduction in the proportion of total funding comprised of more expensive wholesale funding also contributed to the increase in the net interest margin. Non-interest income and Non-interest expense Non-interest income totaled $17.1 million for the quarter ended December 31, 2023, compared to $27.7 million for the quarter ended September 30, 2023. The decrease compared to the quarter ended September 30, 2023 was primarily attributable to a $6.5 million loss on sale of lease equipment during the quarter ended December 31, 2023 compared to a $4.2 million gain on sale of lease equipment during the prior quarter. Non-interest expense totaled $190.9 million for the quarter ended December 31, 2023, compared to $147.1 million for the immediately preceding quarter ended September 30, 2023. The increase over the prior quarter was primarily attributable to a $35.4 million FDIC special assessment recorded during the quarter ended December 31, 2023. The increase in compensation and benefits for the quarter ended December 31, 2023 compared to the immediately preceding quarter primarily resulted from an increase in the Company's stock price, impacting the value of liability-classified share based compensation awards. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Friday, January 26, 2024 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/BI50a5352f746b4dc890465ca3d32e6db9. 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 $35.8 billion at December 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, the 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 limitation) 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 but not limited to adverse events or conditions 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) December 31, 2023 September 30, 2023 December 31, 2022 ASSETS Cash and due from banks: Non-interest bearing $ 14,945 $ 12,391 $ 16,068 Interest bearing 573,338 379,494 556,579 Cash and cash equivalents 588,283 391,885 572,647 Investment securities (including securities reported at fair value of $8,867,354, $8,876,484 and $9,745,327) 8,877,354 8,886,484 9,755,327 Non-marketable equity securities 310,084 312,159 294,172 Loans 24,633,684 24,356,276 24,885,988 Allowance for credit losses (202,689 ) (196,063 ) (147,946 ) Loans, net 24,430,995 24,160,213 24,738,042 Bank owned life insurance 318,459 319,808 308,212 Operating lease equipment, net 371,909 460,146 539,799 Goodwill 77,637 77,637 77,637 Other assets 786,886 781,332 740,876 Total assets $ 35,761,607 $ 35,389,664 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 6,835,236 $ 7,356,523 $ 8,037,848 Interest bearing 3,403,539 3,290,391 2,142,067 Savings and money market 11,135,708 10,276,071 13,061,341 Time 5,163,995 5,189,681 4,268,078 Total deposits 26,538,478 26,112,666 27,509,334 Federal funds purchased — — 190,000 FHLB advances 5,115,000 5,165,000 5,420,000 Notes and other borrowings 708,973 715,197 720,923 Other liabilities 821,235 872,731 750,474 Total liabilities 33,183,686 32,865,594 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,372,505, 74,413,059 and 75,674,587 shares issued and outstanding 744 744 757 Paid-in capital 283,642 279,672 321,729 Retained earnings 2,650,956 2,650,850 2,551,400 Accumulated other comprehensive loss (357,421 ) (407,196 ) (437,905 ) Total stockholders' equity 2,577,921 2,524,070 2,435,981 Total liabilities and stockholders' equity $ 35,761,607 $ 35,389,664 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, 2023 2023 2022 2023 2022 Interest income: Loans $ 346,255 $ 337,014 $ 288,973 $ 1,318,217 $ 934,642 Investment securities 125,993 122,857 105,172 488,212 280,100 Other 10,957 10,668 7,345 51,152 15,709 Total interest income 483,205 470,539 401,490 1,857,581 1,230,451 Interest expense: Deposits 192,833 176,974 94,403 660,305 179,972 Borrowings 73,162 78,723 64,021 323,472 137,519 Total interest expense 265,995 255,697 158,424 983,777 317,491 Net interest income before provision for credit losses 217,210 214,842 243,066 873,804 912,960 Provision for credit losses 19,253 33,049 39,608 87,607 75,154 Net interest income after provision for credit losses 197,957 181,793 203,458 786,197 837,806 Non-interest income: Deposit service charges and fees 5,386 5,402 5,482 21,682 23,402 Gain (loss) on investment securities, net 617 887 320 (10,052 ) (15,805 ) Lease financing 3,723 16,531 14,153 45,882 54,111 Other non-interest income 7,366 4,904 6,858 29,326 15,928 Total non-interest income 17,092 27,724 26,813 86,838 77,636 Non-interest expense: Employee compensation and benefits 73,454 68,825 69,902 280,744 265,548 Occupancy and equipment 10,610 10,890 10,770 43,345 45,400 Deposit insurance expense 43,453 7,790 6,205 66,747 17,999 Professional fees 5,052 2,696 3,028 14,184 11,730 Technology 18,628 19,193 22,388 79,984 77,103 Depreciation of operating lease equipment 10,476 11,217 12,547 44,446 50,388 Other non-interest expense 29,190 26,479 23,639 106,501 72,142 Total non-interest expense 190,863 147,090 148,479 635,951 540,310 Income before income taxes 24,186 62,427 81,792 237,084 375,132 Provision for income taxes 3,374 15,446 17,585 58,413 90,161 Net income $ 20,812 $ 46,981 $ 64,207 $ 178,671 $ 284,971 Earnings per common share, basic $ 0.27 $ 0.63 $ 0.83 $ 2.39 $ 3.55 Earnings per common share, diluted $ 0.27 $ 0.63 $ 0.82 $ 2.38 $ 3.54 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended December 31, Three Months Ended September 30, Three Months Ended December 31, 2023 2023 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 $ 24,416,013 $ 349,603 5.69 % $ 24,417,433 $ 340,357 5.54 % $ 24,624,062 $ 292,272 4.72 % Investment securities (3) 8,850,397 126,870 5.73 % 9,034,116 123,794 5.48 % 9,788,969 106,034 4.33 % Other interest earning assets 801,833 10,957 5.42 % 785,146 10,668 5.39 % 710,315 7,345 4.10 % Total interest earning assets 34,068,243 487,430 5.70 % 34,236,695 474,819 5.52 % 35,123,346 405,651 4.60 % Allowance for credit losses (198,984 ) (173,407 ) (137,300 ) Non-interest earning assets 1,715,795 1,747,310 1,837,156 Total assets $ 35,585,054 $ 35,810,598 $ 36,823,202 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 3,433,216 $ 31,978 3.70 % $ 3,038,870 $ 25,491 3.33 % $ 2,183,854 $ 6,704 1.22 % Savings and money market deposits 10,287,945 104,188 4.02 % 10,205,765 97,956 3.81 % 12,054,892 68,001 2.24 % Time deposits 5,225,756 56,667 4.30 % 5,420,522 53,527 3.92 % 3,960,111 19,698 1.97 % Total interest bearing deposits 18,946,917 192,833 4.04 % 18,665,157 176,974 3.76 % 18,198,857 94,403 2.06 % Federal funds purchased — — — % — — — % 175,637 1,677 3.74 % FHLB advances 5,545,978 64,034 4.58 % 6,040,870 69,525 4.57 % 6,125,435 53,084 3.44 % Notes and other borrowings 711,073 9,128 5.13 % 715,307 9,198 5.14 % 721,044 9,260 5.14 % Total interest bearing liabilities 25,203,968 265,995 4.19 % 25,421,334 255,697 3.99 % 25,220,973 158,424 2.49 % Non-interest bearing demand deposits 6,909,027 6,937,537 8,237,885 Other non-interest bearing liabilities 903,099 868,178 879,207 Total liabilities 33,016,094 33,227,049 34,338,065 Stockholders' equity 2,568,960 2,583,549 2,485,137 Total liabilities and stockholders' equity $ 35,585,054 $ 35,810,598 $ 36,823,202 Net interest income $ 221,435 $ 219,122 $ 247,227 Interest rate spread 1.51 % 1.53 % 2.11 % Net interest margin 2.60 % 2.56 % 2.81 % ____________ (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Years Ended December 31, 2023 2022 Average Balance Interest (1) Yield/ Rate (1) Average Balance Interest (1) Yield/ Rate (1) Assets: Interest earning assets: Loans $ 24,558,430 $ 1,331,578 5.42 % $ 23,937,857 $ 947,386 3.96 % Investment securities (2) 9,228,718 491,851 5.33 % 10,081,701 283,081 2.81 % Other interest earning assets 986,186 51,152 5.19 % 675,068 15,709 2.33 % Total interest earning assets 34,773,334 1,874,581 5.39 % 34,694,626 1,246,176 3.59 % Allowance for credit losses (171,618 ) (132,033 ) Non-interest earning assets 1,749,981 1,721,570 Total assets $ 36,351,697 $ 36,284,163 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,905,968 $ 86,759 2.99 % $ 2,538,906 $ 13,919 0.55 % Savings and money market deposits 10,704,470 382,432 3.57 % 12,874,240 130,705 1.02 % Time deposits 5,169,458 191,114 3.70 % 3,338,671 35,348 1.06 % Total interest bearing deposits 18,779,896 660,305 3.52 % 18,751,817 179,972 0.96 % Federal funds purchased 35,403 1,611 4.55 % 157,979 2,723 1.72 % FHLB advances 6,331,685 285,026 4.50 % 4,383,507 97,763 2.23 % Notes and other borrowings 716,633 36,835 5.14 % 721,223 37,033 5.13 % Total interest bearing liabilities 25,863,617 983,777 3.80 % 24,014,526 317,491 1.32 % Non-interest bearing demand deposits 7,091,029 8,861,111 Other non-interest bearing liabilities 848,023 708,473 Total liabilities 33,802,669 33,584,110 Stockholders' equity 2,549,028 2,700,053 Total liabilities and stockholders' equity $ 36,351,697 $ 36,284,163 Net interest income $ 890,804 $ 928,685 Interest rate spread 1.59 % 2.27 % Net interest margin 2.56 % 2.68 % ____________ (1) On a tax-equivalent basis where applicable (2) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES EARNINGS PER COMMON SHARE (In thousands except share and per share amounts) Three Months Ended December 31, Years Ended December 31, 2023 2022 2023 2022 Basic earnings per common share: Numerator: Net income $ 20,812 $ 64,207 $ 178,671 $ 284,971 Distributed and undistributed earnings allocated to participating securities (930 ) (1,519 ) (3,565 ) (5,075 ) Income allocated to common stockholders for basic earnings per common share $ 19,882 $ 62,688 $ 175,106 $ 279,896 Denominator: Weighted average common shares outstanding 74,384,185 77,043,587 74,493,898 80,032,356 Less average unvested stock awards (1,130,715 ) (1,207,275 ) (1,168,004 ) (1,224,568 ) Weighted average shares for basic earnings per common share 73,253,470 75,836,312 73,325,894 78,807,788 Basic earnings per common share $ 0.27 $ 0.83 $ 2.39 $ 3.55 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 19,882 $ 62,688 $ 175,106 $ 279,896 Adjustment for earnings reallocated from participating securities — (184 ) (275 ) (626 ) Income used in calculating diluted earnings per common share $ 19,882 $ 62,504 $ 174,831 $ 279,270 Denominator: Weighted average shares for basic earnings per common share 73,253,470 75,836,312 73,325,894 78,807,788 Dilutive effect of certain share-based awards 203,123 127 197,441 94 Weighted average shares for diluted earnings per common share 73,456,593 75,836,439 73,523,335 78,807,882 Diluted earnings per common share $ 0.27 $ 0.82 $ 2.38 $ 3.54 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended Years Ended December 31, December 31, 2023 September 30, 2023 December 31, 2022 2023 2022 Financial ratios (4) Return on average assets 0.23 % 0.52 % 0.69 % 0.49 % 0.79 % Return on average stockholders’ equity 3.2 % 7.2 % 10.3 % 7.0 % 10.6 % Net interest margin (3) 2.60 % 2.56 % 2.81 % 2.56 % 2.68 % Loans to deposits 92.8 % 93.3 % 90.5 % Tangible book value per common share $ 33.62 $ 32.88 $ 31.16 December 31, 2023 September 30, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.52 % 0.56 % 0.42 % Non-performing assets to total assets (2)(5) 0.37 % 0.40 % 0.29 % Allowance for credit losses to total loans 0.82 % 0.80 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 159.54 % 143.22 % 140.88 % Net charge-offs to average loans 0.09 % 0.07 % 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. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $41.8 million or 0.17% of total loans and 0.12% of total assets at December 31, 2023, $37.8 million or 0.16% of total loans and 0.11% of total assets at September 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. December 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 7.9 % 9.1 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.4 % 13.1 % 11.0 % 12.4 % 6.5 % Total risk-based capital 13.4 % 13.9 % 12.7 % 12.9 % 10.0 % Tangible Common Equity/Tangible Assets 7.0 % 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): December 31, 2023 September 30, 2023 December 31, 2022 Total stockholders’ equity $ 2,577,921 $ 2,524,070 $ 2,435,981 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,500,284 $ 2,446,433 $ 2,358,344 Common shares issued and outstanding 74,372,505 74,413,059 75,674,587 Book value per common share $ 34.66 $ 33.92 $ 32.19 Tangible book value per common share $ 33.62 $ 32.88 $ 31.16 View source version on businesswire.com: https://www.businesswire.com/news/home/20240126405177/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 2023 Results By: BankUnited, Inc. via Business Wire January 26, 2024 at 06:45 AM EST BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2023. "We finished the year with continued improvement on both sides of our balance sheet, expanding margin and strong credit performance. We are benefiting from a strong economy in our primary market and are looking forward to 2024 with great optimism," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended December 31, 2023, the Company reported net income of $20.8 million, or $0.27 per diluted share, compared to $47.0 million, or $0.63 per diluted share, for the immediately preceding quarter ended September 30, 2023 and $64.2 million, or $0.82 per diluted share, for the quarter ended December 31, 2022. For the year ended December 31, 2023, the Company reported net income of $178.7 million, or $2.38 per diluted share, compared to $285.0 million, or $3.54 per diluted share, for the year ended December 31, 2022. Results for the quarter ended December 31, 2023 were negatively impacted by $41.8 million of notable items impacting income before taxes, related to the FDIC special assessment and a loss on sale of operating lease equipment as detailed below. Quarterly Highlights Two notable items totaling $41.8 million impacted income before income taxes for the quarter ended December 31, 2023 (in thousands): FDIC special assessment $ 35,356 Loss on sale of operating lease equipment 6,479 $ 41,835 The loss on sale of operating lease equipment of $6.5 million compares to a gain of $4.2 million on sale of operating lease equipment in the immediately preceding quarter, for a variance of $10.7 million. We continued to execute on near-term strategic priorities this quarter: The net interest margin, calculated on a tax-equivalent basis, expanded this quarter to 2.60% from 2.56% for the immediately preceding quarter. Non-brokered deposits grew by $604 million for the quarter ended December 31, 2023. Total deposits grew by $426 million. Non-interest bearing deposits declined by $521 million for the quarter, to 26% of total deposits at December 31, 2023, from 28% at September 30, 2023. On an average basis, non-interest bearing deposits were relatively flat to the prior quarter, declining by only $28.5 million. Most of the period-end decline was attributable to quarter-end outflows related to seasonality in the residential real estate sector, impacting our title solutions vertical and other mortgage related deposits. Residential loans declined by $172 million for the quarter, while our core C&I and commercial real estate portfolios grew by a total of $476 million. Since December 31, 2022, residential loans have declined by $692 million. The amortized cost of the investment securities portfolio declined by $106 million during the quarter ended December 31, 2023 and has declined by $959 million since December 31, 2022. Wholesale funding, including FHLB advances and brokered deposits, declined by $228 million for the quarter. We have paid down FHLB advances by $2.4 billion since March 31, 2023. Liquidity remains ample. Total same day available liquidity was $13.6 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 152% and an estimated 66% of our deposits were insured or collateralized at December 31, 2023. Our capital position is robust. At December 31, 2023, CET1 was 11.4% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.0% at December 31, 2023. The ratio of tangible common equity/tangible assets increased to 7.0% at December 31, 2023. For the quarter ended December 31, 2023, the provision for credit losses was $19.3 million compared to $33.0 million for the immediately preceding quarter. The ratio of the ACL to total loans increased to 0.82% at December 31, 2023, from 0.80% at September 30, 2023. The net charge-off ratio for the year ended December 31, 2023 was 0.09%. NPAs remained low, totaling $130.6 million at December 31, 2023, down from $140.5 million at September 30, 2023. The NPA ratio at December 31, 2023 declined to 0.37%, including 0.12% related to the guaranteed portion of non-performing SBA loans, from 0.40%, including 0.11% related to the guaranteed portion of non-performing SBA loans at September 30, 2023. As expected in the current macro-environment, the average cost of total deposits increased to 2.96% for the quarter ended December 31, 2023 from 2.74% for the immediately preceding quarter. This increase of 0.22% was smaller than the 0.28% increase in the cost of deposits for the quarter ended September 30, 2023, continuing the trend of a declining rate of increase in deposit costs. The yield on average interest earning assets increased to 5.70% for the quarter ended December 31, 2023 from 5.52% for the immediately preceding quarter. Our commercial real estate exposure is modest. Commercial real estate loans totaled 23.6% of loans at December 31, 2023, representing 169% of the Bank's total risk based capital. At December 31, 2023, the weighted average LTV of the CRE portfolio was 56.0% and the weighted average DSCR was 1.80. 58% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area. We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.96 at December 31, 2023. Held to maturity securities were not significant. The net unrealized pre-tax loss on the securities portfolio improved by $109 million for the quarter ended December 31, 2023, now representing 6% of amortized cost. AOCI improved by $50 million. Book value and tangible book value per common share continued to grow, to $34.66 and $33.62, respectively, at December 31, 2023, compared to $33.92 and $32.88, respectively, at September 30, 2023 and $32.19 and $31.16, respectively, at December 31, 2022. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): December 31, 2023 September 30, 2023 December 31, 2022 Residential $ 8,209,027 33.3 % $ 8,380,568 34.4 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,323,241 21.6 % 5,296,784 21.7 % 5,405,597 21.7 % Construction and land 495,992 2.0 % 445,273 1.8 % 294,360 1.2 % Owner occupied commercial real estate 1,935,743 7.9 % 1,851,246 7.6 % 1,890,813 7.6 % Commercial and industrial 6,971,981 28.3 % 6,658,010 27.4 % 6,417,721 25.9 % Pinnacle - municipal finance 884,690 3.6 % 900,199 3.7 % 912,122 3.7 % Franchise finance 182,408 0.7 % 196,745 0.8 % 253,774 1.0 % Equipment finance 197,939 0.8 % 219,874 0.9 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 432,663 1.8 % 407,577 1.7 % 524,740 2.1 % $ 24,633,684 100.0 % $ 24,356,276 100.0 % $ 24,885,988 100.0 % Consistent with our balance sheet strategy, for the quarter ended December 31, 2023, residential loans declined by $172 million, while C&I grew by $399 million, CRE grew by $77 million and MWL grew by $25 million. Franchise, equipment and municipal finance declined by $52 million in aggregate. Asset Quality and the Allowance for Credit Losses ("ACL") The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended December 31, 2023, September 30, 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 % September 30, 2023 $ 196,063 0.80 % 143.22 % 0.07 % December 31, 2023 $ 202,689 0.82 % 159.54 % 0.09 % ____________ (1) Annualized for the nine months ended September 30, 2023. The ACL at December 31, 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 December 31, 2023, the provision for credit losses was $19.3 million, including $16.3 million related to funded loans. Factors impacting the provision for credit losses and increase in the ACL for the quarter ended December 31, 2023 included the shift in balance sheet composition toward commercial loan categories that typically carry higher reserves and risk rating migration. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended December 31, Years Ended December 31, 2023 2022 2023 2022 Beginning balance $ 196,063 $ 130,671 $ 147,946 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) N/A N/A (1,794 ) N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 196,063 130,671 146,152 126,457 Provision 16,257 40,408 78,924 73,814 Net charge-offs (9,631 ) (23,133 ) (22,387 ) (52,325 ) Ending balance $ 202,689 $ 147,946 $ 202,689 $ 147,946 Non-performing loans totaled $127.0 million or 0.52% of total loans at December 31, 2023, compared to $136.9 million or 0.56% of total loans at September 30, 2023. Non-performing loans included $41.8 million and $37.8 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.17% and 0.16% of total loans at December 31, 2023 and September 30, 2023, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): December 31, 2023 September 30, 2023 December 31, 2022 Special mention $ 319,905 $ 341,999 $ 51,433 Substandard - accruing 711,266 534,336 605,965 Substandard - non-accruing 86,903 96,248 75,125 Doubtful 19,035 19,344 7,990 Total $ 1,137,109 $ 991,927 $ 740,513 The increase in the substandard accruing category for the quarter ended December 31, 2023 included $74 million of C&I and $118 million of CRE. All of these loans are performing. The substantial majority of the increase was attributable to a small number of loans. Increasing operating costs, including insurance and interest costs, and higher vacancy rates for some office properties were contributing factors. Net Interest Income Net interest income for the quarter ended December 31, 2023 was $217.2 million, compared to $214.8 million for the immediately preceding quarter ended September 30, 2023 and $243.1 million for the quarter ended December 31, 2022. Interest income increased by $12.7 million for the quarter ended December 31, 2023 compared to the immediately preceding quarter, while interest expense increased by $10.3 million. The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.04% to 2.60% for the quarter ended December 31, 2023, from 2.56% for the immediately preceding quarter ended September 30, 2023. Factors impacting the net interest margin for the quarter ended December 31, 2023 were: The tax-equivalent yield on loans increased to 5.69% for the quarter ended December 31, 2023, from 5.54% for the quarter ended September 30, 2023. This increase reflects the origination of new loans at higher rates, re-positioning of the portfolio and to a lesser extent, the resetting of variable rate loans to higher coupon rates. The tax-equivalent yield on investment securities increased to 5.73% for the quarter ended December 31, 2023, from 5.48% for the quarter ended September 30, 2023. Factors leading to this increase included the reset of coupon rates on variable rate securities and retrospective accounting adjustments related to prepayment speeds on certain securities. The average cost of interest bearing deposits increased to 4.04% for the quarter ended December 31, 2023 from 3.76% for the quarter ended September 30, 2023, a continuing response to the higher interest rate environment. The reduction in the proportion of total funding comprised of more expensive wholesale funding also contributed to the increase in the net interest margin. Non-interest income and Non-interest expense Non-interest income totaled $17.1 million for the quarter ended December 31, 2023, compared to $27.7 million for the quarter ended September 30, 2023. The decrease compared to the quarter ended September 30, 2023 was primarily attributable to a $6.5 million loss on sale of lease equipment during the quarter ended December 31, 2023 compared to a $4.2 million gain on sale of lease equipment during the prior quarter. Non-interest expense totaled $190.9 million for the quarter ended December 31, 2023, compared to $147.1 million for the immediately preceding quarter ended September 30, 2023. The increase over the prior quarter was primarily attributable to a $35.4 million FDIC special assessment recorded during the quarter ended December 31, 2023. The increase in compensation and benefits for the quarter ended December 31, 2023 compared to the immediately preceding quarter primarily resulted from an increase in the Company's stock price, impacting the value of liability-classified share based compensation awards. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Friday, January 26, 2024 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/BI50a5352f746b4dc890465ca3d32e6db9. 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 $35.8 billion at December 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, the 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 limitation) 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 but not limited to adverse events or conditions 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) December 31, 2023 September 30, 2023 December 31, 2022 ASSETS Cash and due from banks: Non-interest bearing $ 14,945 $ 12,391 $ 16,068 Interest bearing 573,338 379,494 556,579 Cash and cash equivalents 588,283 391,885 572,647 Investment securities (including securities reported at fair value of $8,867,354, $8,876,484 and $9,745,327) 8,877,354 8,886,484 9,755,327 Non-marketable equity securities 310,084 312,159 294,172 Loans 24,633,684 24,356,276 24,885,988 Allowance for credit losses (202,689 ) (196,063 ) (147,946 ) Loans, net 24,430,995 24,160,213 24,738,042 Bank owned life insurance 318,459 319,808 308,212 Operating lease equipment, net 371,909 460,146 539,799 Goodwill 77,637 77,637 77,637 Other assets 786,886 781,332 740,876 Total assets $ 35,761,607 $ 35,389,664 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 6,835,236 $ 7,356,523 $ 8,037,848 Interest bearing 3,403,539 3,290,391 2,142,067 Savings and money market 11,135,708 10,276,071 13,061,341 Time 5,163,995 5,189,681 4,268,078 Total deposits 26,538,478 26,112,666 27,509,334 Federal funds purchased — — 190,000 FHLB advances 5,115,000 5,165,000 5,420,000 Notes and other borrowings 708,973 715,197 720,923 Other liabilities 821,235 872,731 750,474 Total liabilities 33,183,686 32,865,594 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,372,505, 74,413,059 and 75,674,587 shares issued and outstanding 744 744 757 Paid-in capital 283,642 279,672 321,729 Retained earnings 2,650,956 2,650,850 2,551,400 Accumulated other comprehensive loss (357,421 ) (407,196 ) (437,905 ) Total stockholders' equity 2,577,921 2,524,070 2,435,981 Total liabilities and stockholders' equity $ 35,761,607 $ 35,389,664 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, 2023 2023 2022 2023 2022 Interest income: Loans $ 346,255 $ 337,014 $ 288,973 $ 1,318,217 $ 934,642 Investment securities 125,993 122,857 105,172 488,212 280,100 Other 10,957 10,668 7,345 51,152 15,709 Total interest income 483,205 470,539 401,490 1,857,581 1,230,451 Interest expense: Deposits 192,833 176,974 94,403 660,305 179,972 Borrowings 73,162 78,723 64,021 323,472 137,519 Total interest expense 265,995 255,697 158,424 983,777 317,491 Net interest income before provision for credit losses 217,210 214,842 243,066 873,804 912,960 Provision for credit losses 19,253 33,049 39,608 87,607 75,154 Net interest income after provision for credit losses 197,957 181,793 203,458 786,197 837,806 Non-interest income: Deposit service charges and fees 5,386 5,402 5,482 21,682 23,402 Gain (loss) on investment securities, net 617 887 320 (10,052 ) (15,805 ) Lease financing 3,723 16,531 14,153 45,882 54,111 Other non-interest income 7,366 4,904 6,858 29,326 15,928 Total non-interest income 17,092 27,724 26,813 86,838 77,636 Non-interest expense: Employee compensation and benefits 73,454 68,825 69,902 280,744 265,548 Occupancy and equipment 10,610 10,890 10,770 43,345 45,400 Deposit insurance expense 43,453 7,790 6,205 66,747 17,999 Professional fees 5,052 2,696 3,028 14,184 11,730 Technology 18,628 19,193 22,388 79,984 77,103 Depreciation of operating lease equipment 10,476 11,217 12,547 44,446 50,388 Other non-interest expense 29,190 26,479 23,639 106,501 72,142 Total non-interest expense 190,863 147,090 148,479 635,951 540,310 Income before income taxes 24,186 62,427 81,792 237,084 375,132 Provision for income taxes 3,374 15,446 17,585 58,413 90,161 Net income $ 20,812 $ 46,981 $ 64,207 $ 178,671 $ 284,971 Earnings per common share, basic $ 0.27 $ 0.63 $ 0.83 $ 2.39 $ 3.55 Earnings per common share, diluted $ 0.27 $ 0.63 $ 0.82 $ 2.38 $ 3.54 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended December 31, Three Months Ended September 30, Three Months Ended December 31, 2023 2023 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 $ 24,416,013 $ 349,603 5.69 % $ 24,417,433 $ 340,357 5.54 % $ 24,624,062 $ 292,272 4.72 % Investment securities (3) 8,850,397 126,870 5.73 % 9,034,116 123,794 5.48 % 9,788,969 106,034 4.33 % Other interest earning assets 801,833 10,957 5.42 % 785,146 10,668 5.39 % 710,315 7,345 4.10 % Total interest earning assets 34,068,243 487,430 5.70 % 34,236,695 474,819 5.52 % 35,123,346 405,651 4.60 % Allowance for credit losses (198,984 ) (173,407 ) (137,300 ) Non-interest earning assets 1,715,795 1,747,310 1,837,156 Total assets $ 35,585,054 $ 35,810,598 $ 36,823,202 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 3,433,216 $ 31,978 3.70 % $ 3,038,870 $ 25,491 3.33 % $ 2,183,854 $ 6,704 1.22 % Savings and money market deposits 10,287,945 104,188 4.02 % 10,205,765 97,956 3.81 % 12,054,892 68,001 2.24 % Time deposits 5,225,756 56,667 4.30 % 5,420,522 53,527 3.92 % 3,960,111 19,698 1.97 % Total interest bearing deposits 18,946,917 192,833 4.04 % 18,665,157 176,974 3.76 % 18,198,857 94,403 2.06 % Federal funds purchased — — — % — — — % 175,637 1,677 3.74 % FHLB advances 5,545,978 64,034 4.58 % 6,040,870 69,525 4.57 % 6,125,435 53,084 3.44 % Notes and other borrowings 711,073 9,128 5.13 % 715,307 9,198 5.14 % 721,044 9,260 5.14 % Total interest bearing liabilities 25,203,968 265,995 4.19 % 25,421,334 255,697 3.99 % 25,220,973 158,424 2.49 % Non-interest bearing demand deposits 6,909,027 6,937,537 8,237,885 Other non-interest bearing liabilities 903,099 868,178 879,207 Total liabilities 33,016,094 33,227,049 34,338,065 Stockholders' equity 2,568,960 2,583,549 2,485,137 Total liabilities and stockholders' equity $ 35,585,054 $ 35,810,598 $ 36,823,202 Net interest income $ 221,435 $ 219,122 $ 247,227 Interest rate spread 1.51 % 1.53 % 2.11 % Net interest margin 2.60 % 2.56 % 2.81 % ____________ (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Years Ended December 31, 2023 2022 Average Balance Interest (1) Yield/ Rate (1) Average Balance Interest (1) Yield/ Rate (1) Assets: Interest earning assets: Loans $ 24,558,430 $ 1,331,578 5.42 % $ 23,937,857 $ 947,386 3.96 % Investment securities (2) 9,228,718 491,851 5.33 % 10,081,701 283,081 2.81 % Other interest earning assets 986,186 51,152 5.19 % 675,068 15,709 2.33 % Total interest earning assets 34,773,334 1,874,581 5.39 % 34,694,626 1,246,176 3.59 % Allowance for credit losses (171,618 ) (132,033 ) Non-interest earning assets 1,749,981 1,721,570 Total assets $ 36,351,697 $ 36,284,163 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,905,968 $ 86,759 2.99 % $ 2,538,906 $ 13,919 0.55 % Savings and money market deposits 10,704,470 382,432 3.57 % 12,874,240 130,705 1.02 % Time deposits 5,169,458 191,114 3.70 % 3,338,671 35,348 1.06 % Total interest bearing deposits 18,779,896 660,305 3.52 % 18,751,817 179,972 0.96 % Federal funds purchased 35,403 1,611 4.55 % 157,979 2,723 1.72 % FHLB advances 6,331,685 285,026 4.50 % 4,383,507 97,763 2.23 % Notes and other borrowings 716,633 36,835 5.14 % 721,223 37,033 5.13 % Total interest bearing liabilities 25,863,617 983,777 3.80 % 24,014,526 317,491 1.32 % Non-interest bearing demand deposits 7,091,029 8,861,111 Other non-interest bearing liabilities 848,023 708,473 Total liabilities 33,802,669 33,584,110 Stockholders' equity 2,549,028 2,700,053 Total liabilities and stockholders' equity $ 36,351,697 $ 36,284,163 Net interest income $ 890,804 $ 928,685 Interest rate spread 1.59 % 2.27 % Net interest margin 2.56 % 2.68 % ____________ (1) On a tax-equivalent basis where applicable (2) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES EARNINGS PER COMMON SHARE (In thousands except share and per share amounts) Three Months Ended December 31, Years Ended December 31, 2023 2022 2023 2022 Basic earnings per common share: Numerator: Net income $ 20,812 $ 64,207 $ 178,671 $ 284,971 Distributed and undistributed earnings allocated to participating securities (930 ) (1,519 ) (3,565 ) (5,075 ) Income allocated to common stockholders for basic earnings per common share $ 19,882 $ 62,688 $ 175,106 $ 279,896 Denominator: Weighted average common shares outstanding 74,384,185 77,043,587 74,493,898 80,032,356 Less average unvested stock awards (1,130,715 ) (1,207,275 ) (1,168,004 ) (1,224,568 ) Weighted average shares for basic earnings per common share 73,253,470 75,836,312 73,325,894 78,807,788 Basic earnings per common share $ 0.27 $ 0.83 $ 2.39 $ 3.55 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 19,882 $ 62,688 $ 175,106 $ 279,896 Adjustment for earnings reallocated from participating securities — (184 ) (275 ) (626 ) Income used in calculating diluted earnings per common share $ 19,882 $ 62,504 $ 174,831 $ 279,270 Denominator: Weighted average shares for basic earnings per common share 73,253,470 75,836,312 73,325,894 78,807,788 Dilutive effect of certain share-based awards 203,123 127 197,441 94 Weighted average shares for diluted earnings per common share 73,456,593 75,836,439 73,523,335 78,807,882 Diluted earnings per common share $ 0.27 $ 0.82 $ 2.38 $ 3.54 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended Years Ended December 31, December 31, 2023 September 30, 2023 December 31, 2022 2023 2022 Financial ratios (4) Return on average assets 0.23 % 0.52 % 0.69 % 0.49 % 0.79 % Return on average stockholders’ equity 3.2 % 7.2 % 10.3 % 7.0 % 10.6 % Net interest margin (3) 2.60 % 2.56 % 2.81 % 2.56 % 2.68 % Loans to deposits 92.8 % 93.3 % 90.5 % Tangible book value per common share $ 33.62 $ 32.88 $ 31.16 December 31, 2023 September 30, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.52 % 0.56 % 0.42 % Non-performing assets to total assets (2)(5) 0.37 % 0.40 % 0.29 % Allowance for credit losses to total loans 0.82 % 0.80 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 159.54 % 143.22 % 140.88 % Net charge-offs to average loans 0.09 % 0.07 % 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. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $41.8 million or 0.17% of total loans and 0.12% of total assets at December 31, 2023, $37.8 million or 0.16% of total loans and 0.11% of total assets at September 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. December 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 7.9 % 9.1 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.4 % 13.1 % 11.0 % 12.4 % 6.5 % Total risk-based capital 13.4 % 13.9 % 12.7 % 12.9 % 10.0 % Tangible Common Equity/Tangible Assets 7.0 % 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): December 31, 2023 September 30, 2023 December 31, 2022 Total stockholders’ equity $ 2,577,921 $ 2,524,070 $ 2,435,981 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,500,284 $ 2,446,433 $ 2,358,344 Common shares issued and outstanding 74,372,505 74,413,059 75,674,587 Book value per common share $ 34.66 $ 33.92 $ 32.19 Tangible book value per common share $ 33.62 $ 32.88 $ 31.16 View source version on businesswire.com: https://www.businesswire.com/news/home/20240126405177/en/Contacts BankUnited, Inc. Investor Relations: Leslie N. Lunak, 786-313-1698 llunak@bankunited.com
BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2023. "We finished the year with continued improvement on both sides of our balance sheet, expanding margin and strong credit performance. We are benefiting from a strong economy in our primary market and are looking forward to 2024 with great optimism," said Rajinder Singh, Chairman, President and Chief Executive Officer. For the quarter ended December 31, 2023, the Company reported net income of $20.8 million, or $0.27 per diluted share, compared to $47.0 million, or $0.63 per diluted share, for the immediately preceding quarter ended September 30, 2023 and $64.2 million, or $0.82 per diluted share, for the quarter ended December 31, 2022. For the year ended December 31, 2023, the Company reported net income of $178.7 million, or $2.38 per diluted share, compared to $285.0 million, or $3.54 per diluted share, for the year ended December 31, 2022. Results for the quarter ended December 31, 2023 were negatively impacted by $41.8 million of notable items impacting income before taxes, related to the FDIC special assessment and a loss on sale of operating lease equipment as detailed below. Quarterly Highlights Two notable items totaling $41.8 million impacted income before income taxes for the quarter ended December 31, 2023 (in thousands): FDIC special assessment $ 35,356 Loss on sale of operating lease equipment 6,479 $ 41,835 The loss on sale of operating lease equipment of $6.5 million compares to a gain of $4.2 million on sale of operating lease equipment in the immediately preceding quarter, for a variance of $10.7 million. We continued to execute on near-term strategic priorities this quarter: The net interest margin, calculated on a tax-equivalent basis, expanded this quarter to 2.60% from 2.56% for the immediately preceding quarter. Non-brokered deposits grew by $604 million for the quarter ended December 31, 2023. Total deposits grew by $426 million. Non-interest bearing deposits declined by $521 million for the quarter, to 26% of total deposits at December 31, 2023, from 28% at September 30, 2023. On an average basis, non-interest bearing deposits were relatively flat to the prior quarter, declining by only $28.5 million. Most of the period-end decline was attributable to quarter-end outflows related to seasonality in the residential real estate sector, impacting our title solutions vertical and other mortgage related deposits. Residential loans declined by $172 million for the quarter, while our core C&I and commercial real estate portfolios grew by a total of $476 million. Since December 31, 2022, residential loans have declined by $692 million. The amortized cost of the investment securities portfolio declined by $106 million during the quarter ended December 31, 2023 and has declined by $959 million since December 31, 2022. Wholesale funding, including FHLB advances and brokered deposits, declined by $228 million for the quarter. We have paid down FHLB advances by $2.4 billion since March 31, 2023. Liquidity remains ample. Total same day available liquidity was $13.6 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 152% and an estimated 66% of our deposits were insured or collateralized at December 31, 2023. Our capital position is robust. At December 31, 2023, CET1 was 11.4% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.0% at December 31, 2023. The ratio of tangible common equity/tangible assets increased to 7.0% at December 31, 2023. For the quarter ended December 31, 2023, the provision for credit losses was $19.3 million compared to $33.0 million for the immediately preceding quarter. The ratio of the ACL to total loans increased to 0.82% at December 31, 2023, from 0.80% at September 30, 2023. The net charge-off ratio for the year ended December 31, 2023 was 0.09%. NPAs remained low, totaling $130.6 million at December 31, 2023, down from $140.5 million at September 30, 2023. The NPA ratio at December 31, 2023 declined to 0.37%, including 0.12% related to the guaranteed portion of non-performing SBA loans, from 0.40%, including 0.11% related to the guaranteed portion of non-performing SBA loans at September 30, 2023. As expected in the current macro-environment, the average cost of total deposits increased to 2.96% for the quarter ended December 31, 2023 from 2.74% for the immediately preceding quarter. This increase of 0.22% was smaller than the 0.28% increase in the cost of deposits for the quarter ended September 30, 2023, continuing the trend of a declining rate of increase in deposit costs. The yield on average interest earning assets increased to 5.70% for the quarter ended December 31, 2023 from 5.52% for the immediately preceding quarter. Our commercial real estate exposure is modest. Commercial real estate loans totaled 23.6% of loans at December 31, 2023, representing 169% of the Bank's total risk based capital. At December 31, 2023, the weighted average LTV of the CRE portfolio was 56.0% and the weighted average DSCR was 1.80. 58% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area. We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.96 at December 31, 2023. Held to maturity securities were not significant. The net unrealized pre-tax loss on the securities portfolio improved by $109 million for the quarter ended December 31, 2023, now representing 6% of amortized cost. AOCI improved by $50 million. Book value and tangible book value per common share continued to grow, to $34.66 and $33.62, respectively, at December 31, 2023, compared to $33.92 and $32.88, respectively, at September 30, 2023 and $32.19 and $31.16, respectively, at December 31, 2022. Loans A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands): December 31, 2023 September 30, 2023 December 31, 2022 Residential $ 8,209,027 33.3 % $ 8,380,568 34.4 % $ 8,900,714 35.7 % Non-owner occupied commercial real estate 5,323,241 21.6 % 5,296,784 21.7 % 5,405,597 21.7 % Construction and land 495,992 2.0 % 445,273 1.8 % 294,360 1.2 % Owner occupied commercial real estate 1,935,743 7.9 % 1,851,246 7.6 % 1,890,813 7.6 % Commercial and industrial 6,971,981 28.3 % 6,658,010 27.4 % 6,417,721 25.9 % Pinnacle - municipal finance 884,690 3.6 % 900,199 3.7 % 912,122 3.7 % Franchise finance 182,408 0.7 % 196,745 0.8 % 253,774 1.0 % Equipment finance 197,939 0.8 % 219,874 0.9 % 286,147 1.1 % Mortgage warehouse lending ("MWL") 432,663 1.8 % 407,577 1.7 % 524,740 2.1 % $ 24,633,684 100.0 % $ 24,356,276 100.0 % $ 24,885,988 100.0 % Consistent with our balance sheet strategy, for the quarter ended December 31, 2023, residential loans declined by $172 million, while C&I grew by $399 million, CRE grew by $77 million and MWL grew by $25 million. Franchise, equipment and municipal finance declined by $52 million in aggregate. Asset Quality and the Allowance for Credit Losses ("ACL") The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended December 31, 2023, September 30, 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 % September 30, 2023 $ 196,063 0.80 % 143.22 % 0.07 % December 31, 2023 $ 202,689 0.82 % 159.54 % 0.09 % ____________ (1) Annualized for the nine months ended September 30, 2023. The ACL at December 31, 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 December 31, 2023, the provision for credit losses was $19.3 million, including $16.3 million related to funded loans. Factors impacting the provision for credit losses and increase in the ACL for the quarter ended December 31, 2023 included the shift in balance sheet composition toward commercial loan categories that typically carry higher reserves and risk rating migration. The following table summarizes the activity in the ACL for the periods indicated (in thousands): Three Months Ended December 31, Years Ended December 31, 2023 2022 2023 2022 Beginning balance $ 196,063 $ 130,671 $ 147,946 $ 126,457 Impact of adoption of new accounting pronouncement (ASU 2022-02) N/A N/A (1,794 ) N/A Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) 196,063 130,671 146,152 126,457 Provision 16,257 40,408 78,924 73,814 Net charge-offs (9,631 ) (23,133 ) (22,387 ) (52,325 ) Ending balance $ 202,689 $ 147,946 $ 202,689 $ 147,946 Non-performing loans totaled $127.0 million or 0.52% of total loans at December 31, 2023, compared to $136.9 million or 0.56% of total loans at September 30, 2023. Non-performing loans included $41.8 million and $37.8 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.17% and 0.16% of total loans at December 31, 2023 and September 30, 2023, respectively. The following table presents criticized and classified commercial loans at the dates indicated (in thousands): December 31, 2023 September 30, 2023 December 31, 2022 Special mention $ 319,905 $ 341,999 $ 51,433 Substandard - accruing 711,266 534,336 605,965 Substandard - non-accruing 86,903 96,248 75,125 Doubtful 19,035 19,344 7,990 Total $ 1,137,109 $ 991,927 $ 740,513 The increase in the substandard accruing category for the quarter ended December 31, 2023 included $74 million of C&I and $118 million of CRE. All of these loans are performing. The substantial majority of the increase was attributable to a small number of loans. Increasing operating costs, including insurance and interest costs, and higher vacancy rates for some office properties were contributing factors. Net Interest Income Net interest income for the quarter ended December 31, 2023 was $217.2 million, compared to $214.8 million for the immediately preceding quarter ended September 30, 2023 and $243.1 million for the quarter ended December 31, 2022. Interest income increased by $12.7 million for the quarter ended December 31, 2023 compared to the immediately preceding quarter, while interest expense increased by $10.3 million. The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.04% to 2.60% for the quarter ended December 31, 2023, from 2.56% for the immediately preceding quarter ended September 30, 2023. Factors impacting the net interest margin for the quarter ended December 31, 2023 were: The tax-equivalent yield on loans increased to 5.69% for the quarter ended December 31, 2023, from 5.54% for the quarter ended September 30, 2023. This increase reflects the origination of new loans at higher rates, re-positioning of the portfolio and to a lesser extent, the resetting of variable rate loans to higher coupon rates. The tax-equivalent yield on investment securities increased to 5.73% for the quarter ended December 31, 2023, from 5.48% for the quarter ended September 30, 2023. Factors leading to this increase included the reset of coupon rates on variable rate securities and retrospective accounting adjustments related to prepayment speeds on certain securities. The average cost of interest bearing deposits increased to 4.04% for the quarter ended December 31, 2023 from 3.76% for the quarter ended September 30, 2023, a continuing response to the higher interest rate environment. The reduction in the proportion of total funding comprised of more expensive wholesale funding also contributed to the increase in the net interest margin. Non-interest income and Non-interest expense Non-interest income totaled $17.1 million for the quarter ended December 31, 2023, compared to $27.7 million for the quarter ended September 30, 2023. The decrease compared to the quarter ended September 30, 2023 was primarily attributable to a $6.5 million loss on sale of lease equipment during the quarter ended December 31, 2023 compared to a $4.2 million gain on sale of lease equipment during the prior quarter. Non-interest expense totaled $190.9 million for the quarter ended December 31, 2023, compared to $147.1 million for the immediately preceding quarter ended September 30, 2023. The increase over the prior quarter was primarily attributable to a $35.4 million FDIC special assessment recorded during the quarter ended December 31, 2023. The increase in compensation and benefits for the quarter ended December 31, 2023 compared to the immediately preceding quarter primarily resulted from an increase in the Company's stock price, impacting the value of liability-classified share based compensation awards. Earnings Conference Call and Presentation A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Friday, January 26, 2024 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/BI50a5352f746b4dc890465ca3d32e6db9. 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 $35.8 billion at December 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, the 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 limitation) 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 but not limited to adverse events or conditions 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) December 31, 2023 September 30, 2023 December 31, 2022 ASSETS Cash and due from banks: Non-interest bearing $ 14,945 $ 12,391 $ 16,068 Interest bearing 573,338 379,494 556,579 Cash and cash equivalents 588,283 391,885 572,647 Investment securities (including securities reported at fair value of $8,867,354, $8,876,484 and $9,745,327) 8,877,354 8,886,484 9,755,327 Non-marketable equity securities 310,084 312,159 294,172 Loans 24,633,684 24,356,276 24,885,988 Allowance for credit losses (202,689 ) (196,063 ) (147,946 ) Loans, net 24,430,995 24,160,213 24,738,042 Bank owned life insurance 318,459 319,808 308,212 Operating lease equipment, net 371,909 460,146 539,799 Goodwill 77,637 77,637 77,637 Other assets 786,886 781,332 740,876 Total assets $ 35,761,607 $ 35,389,664 $ 37,026,712 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Demand deposits: Non-interest bearing $ 6,835,236 $ 7,356,523 $ 8,037,848 Interest bearing 3,403,539 3,290,391 2,142,067 Savings and money market 11,135,708 10,276,071 13,061,341 Time 5,163,995 5,189,681 4,268,078 Total deposits 26,538,478 26,112,666 27,509,334 Federal funds purchased — — 190,000 FHLB advances 5,115,000 5,165,000 5,420,000 Notes and other borrowings 708,973 715,197 720,923 Other liabilities 821,235 872,731 750,474 Total liabilities 33,183,686 32,865,594 34,590,731 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,372,505, 74,413,059 and 75,674,587 shares issued and outstanding 744 744 757 Paid-in capital 283,642 279,672 321,729 Retained earnings 2,650,956 2,650,850 2,551,400 Accumulated other comprehensive loss (357,421 ) (407,196 ) (437,905 ) Total stockholders' equity 2,577,921 2,524,070 2,435,981 Total liabilities and stockholders' equity $ 35,761,607 $ 35,389,664 $ 37,026,712 BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, 2023 2023 2022 2023 2022 Interest income: Loans $ 346,255 $ 337,014 $ 288,973 $ 1,318,217 $ 934,642 Investment securities 125,993 122,857 105,172 488,212 280,100 Other 10,957 10,668 7,345 51,152 15,709 Total interest income 483,205 470,539 401,490 1,857,581 1,230,451 Interest expense: Deposits 192,833 176,974 94,403 660,305 179,972 Borrowings 73,162 78,723 64,021 323,472 137,519 Total interest expense 265,995 255,697 158,424 983,777 317,491 Net interest income before provision for credit losses 217,210 214,842 243,066 873,804 912,960 Provision for credit losses 19,253 33,049 39,608 87,607 75,154 Net interest income after provision for credit losses 197,957 181,793 203,458 786,197 837,806 Non-interest income: Deposit service charges and fees 5,386 5,402 5,482 21,682 23,402 Gain (loss) on investment securities, net 617 887 320 (10,052 ) (15,805 ) Lease financing 3,723 16,531 14,153 45,882 54,111 Other non-interest income 7,366 4,904 6,858 29,326 15,928 Total non-interest income 17,092 27,724 26,813 86,838 77,636 Non-interest expense: Employee compensation and benefits 73,454 68,825 69,902 280,744 265,548 Occupancy and equipment 10,610 10,890 10,770 43,345 45,400 Deposit insurance expense 43,453 7,790 6,205 66,747 17,999 Professional fees 5,052 2,696 3,028 14,184 11,730 Technology 18,628 19,193 22,388 79,984 77,103 Depreciation of operating lease equipment 10,476 11,217 12,547 44,446 50,388 Other non-interest expense 29,190 26,479 23,639 106,501 72,142 Total non-interest expense 190,863 147,090 148,479 635,951 540,310 Income before income taxes 24,186 62,427 81,792 237,084 375,132 Provision for income taxes 3,374 15,446 17,585 58,413 90,161 Net income $ 20,812 $ 46,981 $ 64,207 $ 178,671 $ 284,971 Earnings per common share, basic $ 0.27 $ 0.63 $ 0.83 $ 2.39 $ 3.55 Earnings per common share, diluted $ 0.27 $ 0.63 $ 0.82 $ 2.38 $ 3.54 BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Three Months Ended December 31, Three Months Ended September 30, Three Months Ended December 31, 2023 2023 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 $ 24,416,013 $ 349,603 5.69 % $ 24,417,433 $ 340,357 5.54 % $ 24,624,062 $ 292,272 4.72 % Investment securities (3) 8,850,397 126,870 5.73 % 9,034,116 123,794 5.48 % 9,788,969 106,034 4.33 % Other interest earning assets 801,833 10,957 5.42 % 785,146 10,668 5.39 % 710,315 7,345 4.10 % Total interest earning assets 34,068,243 487,430 5.70 % 34,236,695 474,819 5.52 % 35,123,346 405,651 4.60 % Allowance for credit losses (198,984 ) (173,407 ) (137,300 ) Non-interest earning assets 1,715,795 1,747,310 1,837,156 Total assets $ 35,585,054 $ 35,810,598 $ 36,823,202 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 3,433,216 $ 31,978 3.70 % $ 3,038,870 $ 25,491 3.33 % $ 2,183,854 $ 6,704 1.22 % Savings and money market deposits 10,287,945 104,188 4.02 % 10,205,765 97,956 3.81 % 12,054,892 68,001 2.24 % Time deposits 5,225,756 56,667 4.30 % 5,420,522 53,527 3.92 % 3,960,111 19,698 1.97 % Total interest bearing deposits 18,946,917 192,833 4.04 % 18,665,157 176,974 3.76 % 18,198,857 94,403 2.06 % Federal funds purchased — — — % — — — % 175,637 1,677 3.74 % FHLB advances 5,545,978 64,034 4.58 % 6,040,870 69,525 4.57 % 6,125,435 53,084 3.44 % Notes and other borrowings 711,073 9,128 5.13 % 715,307 9,198 5.14 % 721,044 9,260 5.14 % Total interest bearing liabilities 25,203,968 265,995 4.19 % 25,421,334 255,697 3.99 % 25,220,973 158,424 2.49 % Non-interest bearing demand deposits 6,909,027 6,937,537 8,237,885 Other non-interest bearing liabilities 903,099 868,178 879,207 Total liabilities 33,016,094 33,227,049 34,338,065 Stockholders' equity 2,568,960 2,583,549 2,485,137 Total liabilities and stockholders' equity $ 35,585,054 $ 35,810,598 $ 36,823,202 Net interest income $ 221,435 $ 219,122 $ 247,227 Interest rate spread 1.51 % 1.53 % 2.11 % Net interest margin 2.60 % 2.56 % 2.81 % ____________ (1) On a tax-equivalent basis where applicable (2) Annualized (3) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (Dollars in thousands) Years Ended December 31, 2023 2022 Average Balance Interest (1) Yield/ Rate (1) Average Balance Interest (1) Yield/ Rate (1) Assets: Interest earning assets: Loans $ 24,558,430 $ 1,331,578 5.42 % $ 23,937,857 $ 947,386 3.96 % Investment securities (2) 9,228,718 491,851 5.33 % 10,081,701 283,081 2.81 % Other interest earning assets 986,186 51,152 5.19 % 675,068 15,709 2.33 % Total interest earning assets 34,773,334 1,874,581 5.39 % 34,694,626 1,246,176 3.59 % Allowance for credit losses (171,618 ) (132,033 ) Non-interest earning assets 1,749,981 1,721,570 Total assets $ 36,351,697 $ 36,284,163 Liabilities and Stockholders' Equity: Interest bearing liabilities: Interest bearing demand deposits $ 2,905,968 $ 86,759 2.99 % $ 2,538,906 $ 13,919 0.55 % Savings and money market deposits 10,704,470 382,432 3.57 % 12,874,240 130,705 1.02 % Time deposits 5,169,458 191,114 3.70 % 3,338,671 35,348 1.06 % Total interest bearing deposits 18,779,896 660,305 3.52 % 18,751,817 179,972 0.96 % Federal funds purchased 35,403 1,611 4.55 % 157,979 2,723 1.72 % FHLB advances 6,331,685 285,026 4.50 % 4,383,507 97,763 2.23 % Notes and other borrowings 716,633 36,835 5.14 % 721,223 37,033 5.13 % Total interest bearing liabilities 25,863,617 983,777 3.80 % 24,014,526 317,491 1.32 % Non-interest bearing demand deposits 7,091,029 8,861,111 Other non-interest bearing liabilities 848,023 708,473 Total liabilities 33,802,669 33,584,110 Stockholders' equity 2,549,028 2,700,053 Total liabilities and stockholders' equity $ 36,351,697 $ 36,284,163 Net interest income $ 890,804 $ 928,685 Interest rate spread 1.59 % 2.27 % Net interest margin 2.56 % 2.68 % ____________ (1) On a tax-equivalent basis where applicable (2) At fair value except for securities held to maturity BANKUNITED, INC. AND SUBSIDIARIES EARNINGS PER COMMON SHARE (In thousands except share and per share amounts) Three Months Ended December 31, Years Ended December 31, 2023 2022 2023 2022 Basic earnings per common share: Numerator: Net income $ 20,812 $ 64,207 $ 178,671 $ 284,971 Distributed and undistributed earnings allocated to participating securities (930 ) (1,519 ) (3,565 ) (5,075 ) Income allocated to common stockholders for basic earnings per common share $ 19,882 $ 62,688 $ 175,106 $ 279,896 Denominator: Weighted average common shares outstanding 74,384,185 77,043,587 74,493,898 80,032,356 Less average unvested stock awards (1,130,715 ) (1,207,275 ) (1,168,004 ) (1,224,568 ) Weighted average shares for basic earnings per common share 73,253,470 75,836,312 73,325,894 78,807,788 Basic earnings per common share $ 0.27 $ 0.83 $ 2.39 $ 3.55 Diluted earnings per common share: Numerator: Income allocated to common stockholders for basic earnings per common share $ 19,882 $ 62,688 $ 175,106 $ 279,896 Adjustment for earnings reallocated from participating securities — (184 ) (275 ) (626 ) Income used in calculating diluted earnings per common share $ 19,882 $ 62,504 $ 174,831 $ 279,270 Denominator: Weighted average shares for basic earnings per common share 73,253,470 75,836,312 73,325,894 78,807,788 Dilutive effect of certain share-based awards 203,123 127 197,441 94 Weighted average shares for diluted earnings per common share 73,456,593 75,836,439 73,523,335 78,807,882 Diluted earnings per common share $ 0.27 $ 0.82 $ 2.38 $ 3.54 BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS At or for the Three Months Ended Years Ended December 31, December 31, 2023 September 30, 2023 December 31, 2022 2023 2022 Financial ratios (4) Return on average assets 0.23 % 0.52 % 0.69 % 0.49 % 0.79 % Return on average stockholders’ equity 3.2 % 7.2 % 10.3 % 7.0 % 10.6 % Net interest margin (3) 2.60 % 2.56 % 2.81 % 2.56 % 2.68 % Loans to deposits 92.8 % 93.3 % 90.5 % Tangible book value per common share $ 33.62 $ 32.88 $ 31.16 December 31, 2023 September 30, 2023 December 31, 2022 Asset quality ratios Non-performing loans to total loans (1)(5) 0.52 % 0.56 % 0.42 % Non-performing assets to total assets (2)(5) 0.37 % 0.40 % 0.29 % Allowance for credit losses to total loans 0.82 % 0.80 % 0.59 % Allowance for credit losses to non-performing loans (1)(5) 159.54 % 143.22 % 140.88 % Net charge-offs to average loans 0.09 % 0.07 % 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. (5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $41.8 million or 0.17% of total loans and 0.12% of total assets at December 31, 2023, $37.8 million or 0.16% of total loans and 0.11% of total assets at September 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022. December 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 7.9 % 9.1 % 7.5 % 8.4 % 5.0 % Common Equity Tier 1 ("CET1") risk-based capital 11.4 % 13.1 % 11.0 % 12.4 % 6.5 % Total risk-based capital 13.4 % 13.9 % 12.7 % 12.9 % 10.0 % Tangible Common Equity/Tangible Assets 7.0 % 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): December 31, 2023 September 30, 2023 December 31, 2022 Total stockholders’ equity $ 2,577,921 $ 2,524,070 $ 2,435,981 Less: goodwill and other intangible assets 77,637 77,637 77,637 Tangible stockholders’ equity $ 2,500,284 $ 2,446,433 $ 2,358,344 Common shares issued and outstanding 74,372,505 74,413,059 75,674,587 Book value per common share $ 34.66 $ 33.92 $ 32.19 Tangible book value per common share $ 33.62 $ 32.88 $ 31.16 View source version on businesswire.com: https://www.businesswire.com/news/home/20240126405177/en/