BankUnited, Inc. Reports First Quarter 2021 Results

Rhea-AI Summary

BankUnited (BKU) reported strong financial results for Q1 2021, with net income of $98.8 million, or $1.06 per diluted share, reversing a net loss of $(31.0) million in Q1 2020. Total deposits grew by $236 million, with non-interest bearing deposits increasing by nearly $1 billion. The bank released reserves totaling $28 million, improving its credit loss outlook due to a better economic forecast. The net interest margin improved to 2.39%, and book value per share climbed to $32.83. The company resumed its share repurchase program, buying back approximately 0.2 million shares for $7.3 million.

Positive

• Net income increased to $98.8 million from a net loss of $(31.0) million year-over-year.
• Non-interest bearing demand deposits grew by $957 million.
• Net interest margin improved to 2.39%, up from 2.35% year-over-year.
• Share repurchase program resumed, buying back 0.2 million shares.

Negative

• Total loans and operating lease equipment declined by $487 million.
• Average cost of total deposits decreased but still reflects a low yield.

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended March 31, 2021.

“This quarter, non-interest DDA grew by almost $1 billion, our net interest margin expanded, and we released some of the reserves we put up last year. This quarter also marks the culmination of our 2 year cloud journey, and the release of our new mobile banking platform." said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended March 31, 2021, the Company reported net income of $98.8 million, or $1.06 per diluted share, compared to a net loss of $(31.0) million, or $(0.33) per diluted share, for the quarter ended March 31, 2020. On an annualized basis, earnings for the quarter ended March 31, 2021 generated a return on average stockholders' equity of 13.2% and a return on average assets of 1.14%.

Financial Highlights

• Net interest income increased by $2.9 million compared to the immediately preceding quarter ended December 31, 2020 and by $15.7 million compared to the quarter ended March 31, 2020. The net interest margin, calculated on a tax-equivalent basis, improved to 2.39% for the quarter ended March 31, 2021 from 2.33% for the immediately preceding quarter and 2.35% for the quarter ended March 31, 2020.
• The average cost of total deposits continued to decline, dropping by 0.10% to 0.33% for the quarter ended March 31, 2021 from 0.43% for the immediately preceding quarter ended December 31, 2020, and 1.36% for the quarter ended March 31, 2020. On a spot basis, the average annual percentage yield ("APY") on total deposits declined to 0.27% at March 31, 2021 from 0.36% at December 31, 2020 and 1.35% at March 31, 2020.
• For the quarter ended March 31, 2021, the Company recorded a recovery of the provision for credit losses of $(28.0) million compared to a recovery of $(1.6) million for the immediately preceding quarter ended December 31, 2020 and a provision for credit losses of $125.4 million for the quarter ended March 31, 2020. The most significant factor leading to the recovery of credit losses for the quarter ended March 31, 2021 was an improving economic forecast. In contrast, the provision for credit losses for the quarter ended March 31, 2020 was driven primarily by a deteriorating economic forecast resulting from the onset of the COVID-19 pandemic.
• Pre-tax, pre-provision net revenue ("PPNR") was $103.3 million for the quarter ended March 31, 2021 compared to $105.3 million for the immediately preceding quarter ended December 31, 2020 and $85.0 million for the quarter ended March 31, 2020.
• Non-interest bearing demand deposits grew by $957 million during the quarter ended March 31, 2021. Total deposits grew by $236 million as higher cost time deposits continued to runoff, declining by $1.0 billion for the quarter ended March 31, 2021. Average non-interest bearing demand deposits grew by $338 million for the quarter ended March 31, 2021 compared to the immediately preceding quarter ended December 31, 2020 and by $3.1 billion compared to the quarter ended March 31, 2020. At March 31, 2021, non-interest bearing demand deposits represented 29% of total deposits, compared to 25% of total deposits at December 31, 2020.
• Total loans and operating lease equipment declined by $487 million for the quarter ended March 31, 2020.
• Loans on deferral totaled $126 million or less than 1% of total loans at March 31, 2021. Loans modified under the CARES Act totaled $636 million at March 31, 2021. In the aggregate, this represents $762 million or 3% of the total loan portfolio at March 31, 2021.
• Non-performing assets totaled $236 million or 0.67% of total assets at March 31, 2020, a decline from $248 million or 0.71% of total assets at December 31, 2020.
• Book value per common share and tangible book value per common share at March 31, 2021 increased to $32.83 and $32.00, respectively, from $32.05 and $31.22, respectively at December 31, 2020 and pre-pandemic levels of $31.33 and $30.52, respectively at December 31, 2019.
• As previously reported, on January 20, 2021, the Company's Board of Directors reinstated the share repurchase program that the Company suspended in March 2020. During the quarter ended March 31, 2021, the Company repurchased approximately 0.2 million shares of its common stock for an aggregate purchase price of $7.3 million, at a weighted average price of $35.42 per share.

   

Loans and Leases

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

	March 31, 2021							December 31, 2020
Residential and other consumer loans	$	6,582,447			28.1	%		$

FAQ

What are the financial results of BankUnited for Q1 2021?

BankUnited reported a net income of $98.8 million, or $1.06 per diluted share, for Q1 2021.

How did non-interest deposits perform for BankUnited in Q1 2021?

Non-interest bearing demand deposits grew by $957 million in Q1 2021.

What improvements were seen in BankUnited's net interest margin?

The net interest margin improved to 2.39% in Q1 2021, up from 2.35% in Q1 2020.

Did BankUnited resume its share repurchase program in 2021?

Yes, BankUnited resumed its share repurchase program, buying back approximately 0.2 million shares for $7.3 million.

What was the status of total loans at BankUnited as of March 31, 2021?

Total loans and operating lease equipment declined by $487 million for the quarter.