BankUnited, Inc. Reports Second Quarter 2023 Results

Rhea-AI Summary

BankUnited, Inc. reports Q2 2023 financial results with net income of $58.0 million, total deposits growth, and improved liquidity position. Net interest income and margin impacted by increased cost of funds. Total loans decline by $263 million. Credit remains favorable. Capital position is robust.

Positive

• BankUnited reports net income of $58.0 million for Q2 2023, showing positive financial performance. Total deposits grew by $116 million during the quarter, indicating increased investor confidence. The liquidity position improved with total same day available liquidity increasing to $14.7 billion. Credit quality remains favorable with a low NPA ratio of 0.34%. The capital position is strong with CET1 at 11.2% at the holding company and 13.0% at the Bank.

Negative

• Net interest income and margin were impacted by increased cost of funds, leading to a decrease of $14.0 million in net interest income compared to the previous quarter. Total loans declined by $263 million, indicating a decrease in lending activity. The ACL to total loans increased to 0.68%, reflecting a more cautious approach in modeling expected credit losses.

MIAMI LAKES, Fla.--(BUSINESS WIRE)-- BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2023.

"As volatility in the capital markets recedes and the economy remains resilient, we have returned our focus to executing on our long term strategy of building a relationship oriented bank," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended June 30, 2023, the Company reported net income of $58.0 million, or $0.78 per diluted share, compared to $52.9 million, or $0.70 per diluted share for the immediately preceding quarter ended March 31, 2023 and $65.8 million, or $0.82 per diluted share, for the quarter ended June 30, 2022. For the six months ended June 30, 2023, the Company reported net income of $110.9 million or $1.48 per diluted share compared to $132.9 million or $1.60 per diluted share for the six months ended June 30, 2022.

Quarterly Highlights

• Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing deposits remained largely consistent as a percentage of deposits, representing 28.3% of total deposits at June 30, 2023 compared to 28.6% at March 31, 2023, declining by $62 million for the quarter.

• Our liquidity position remains strong, and improved over the course of the second quarter. At June 30, 2023, total same day available liquidity had increased to $14.7 billion from $9.4 billion at March 31, 2023. The available liquidity to uninsured, uncollateralized deposits ratio improved to 167% at June 30, 2023 from 95% at March 31, 2023 while the portion of our deposits that were insured or collateralized grew to 66% at June 30, 2023 from 62% at March 31, 2023.

• We made progress in reducing wholesale funding as outstanding FHLB advances were down $1.6 billion quarter-over-quarter.

• Net interest income and the net interest margin for the quarter ended June 30, 2023 were impacted by an increase in the cost of funds which more than offset the increased yield on interest-earning assets. A challenging deposit growth environment and a higher level of on-balance sheet liquidity for much of the quarter led to increased reliance on higher cost deposits and wholesale funding. The net interest margin, calculated on a tax-equivalent basis, was 2.47% for the quarter ended June 30, 2023, compared to 2.62% for the immediately preceding quarter ended March 31, 2023 and 2.63% for the quarter ended June 30, 2022. Net interest income decreased by $14.0 million, compared to the immediately preceding quarter ended March 31, 2023 and by $11.5 million compared to the quarter ended June 30, 2022.

• Consistent with industry trends, rising interest rates and tighter liquidity conditions contributed to an increase in the average cost of total deposits to 2.46% for the quarter ended June 30, 2023 from 2.05% for the immediately preceding quarter. This increase of 0.41% was smaller than the 0.63% increase in the cost of deposits for the quarter ended March 31, 2023. The yield on average interest earning assets increased to 5.30% for the quarter ended June 30, 2023 from 5.05% for the immediately preceding quarter.

• Total loans declined by $263 million quarter-over-quarter. Most of the decline was attributable to residential which was down by $184 million. Consistent with our strategy to re-position the composition of the balance sheet, cash flows from the residential portfolio were used to pay down wholesale funding.

• Credit remains favorable. The NPA ratio at June 30, 2023 was 0.34%, including 0.10% related to the guaranteed portion of non-performing SBA loans compared to 0.32%, including 0.10% related to the guaranteed portion of non-performing SBA loans at March 31, 2023. The annualized net charge-off ratio for the six months ended June 30, 2023 was 0.09%.

• Reflecting management's concentration risk management strategy, commercial real estate exposure is modest. Commercial real estate loans totaled 23% of loans at June 30, 2023, representing 169% of the Bank's total risk based capital. At June 30, 2023, the weighted average LTV of the CRE portfolio was 57.1% and the weighted average DSCR was 1.88. 60% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area.

• For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million compared to provisions of $19.8 million and $24.0 million for the quarters ended March 31, 2023 and June 30, 2022, respectively. The ratio of the ACL to total loans increased to 0.68%, at June 30, 2023 from 0.64% at March 31, 2023, reflecting the impact on modeling expected credit losses of a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario in calculating the ACL.

• We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.94 at June 30, 2023. Held to maturity securities were not significant.

• Our capital position is robust. CET1 was 11.2% at the holding company and 13.0% at the Bank at June 30, 2023. Pro-forma CET1 at the holding company and the Bank, including accumulated other comprehensive income, were 9.7% and 11.5%, respectively.

• Book value and tangible book value per common share improved to $33.94 and $32.90, respectively, at June 30, 2023, from $33.34 and $32.30, respectively at March 31, 2023.

Deposits and Funding

Total deposits grew by $116 million during the quarter ended June 30, 2023. Non-interest bearing demand deposits declined by $62 million, interest-bearing non-maturity deposits declined by $92 million and time deposits grew by $270 million. Account level deposit flows throughout the quarter generally appeared to be within the range of what we consider normal operating activity.

Consistent with the current interest rate environment and monetary policy stance, the cost of total deposits increased to 2.46% from 2.05% for the immediately preceding quarter, while the cost of interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the preceding quarter.

FHLB advances declined by $1.6 billion for the quarter, as we used cash flows generated by the residential and securities portfolios to reduce wholesale funding levels and allow for future re-deployment of capital into higher yielding assets.

Loans

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

		June 30, 2023						March 31, 2023						December 31, 2022
Residential		$	8,605,838		34.9	%		$	8,789,744		35.3	%		$	8,900,714		35.7	%
Non-owner occupied commercial real estate			5,302,523		21.5	%			5,346,895		21.5	%			5,405,597		21.7	%
Construction and land			393,464		1.6	%			324,805		1.3	%			294,360		1.2	%
Owner occupied commercial real estate			1,832,586		7.4	%			1,863,333		7.5	%			1,890,813		7.6	%
Commercial and industrial			6,575,368		26.8	%			6,617,716		26.5	%			6,417,721		25.9	%
Pinnacle - municipal finance			951,529		3.9	%			919,584		3.7	%			912,122		3.7	%
Franchise finance			207,783		0.8	%			239,205		1.0	%			253,774		1.0	%
Equipment finance			237,816		1.0	%			266,715		1.1	%			286,147		1.1	%
Mortgage warehouse lending ("MWL")			523,083		2.1	%			524,897		2.1	%			524,740		2.1	%
		$	24,629,990		100.0	%		$	24,892,894		100.0	%		$	24,885,988		100.0	%

For the quarter ended June 30, 2023, residential declined by $184 million, C&I and CRE declined by $49 million in total, franchise and equipment finance declined by $60 million in aggregate and municipal finance grew by $32 million.

Asset Quality and the Allowance for Credit Losses ("ACL")

Non-performing loans totaled $118.7 million or 0.48% of total loans at June 30, 2023, compared to $114.2 million or 0.46% of total loans at March 31, 2023. Non-performing loans included $35.9 million and $36.9 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.15% of total loans at both June 30, 2023 and March 31, 2023.

The following table presents criticized and classified commercial loans at the dates indicated (in thousands):

		June 30, 2023			March 31, 2023			December 31, 2022
Special mention		$	233,004		$	101,781		$	51,433
Substandard - accruing			525,643			596,054			605,965
Substandard - non-accruing			80,642			82,840			75,125
Doubtful			14,954			7,699			7,990
Total		$	854,243		$	788,374		$	740,513

One $22 million loan that was moved to special mention during the quarter paid off shortly after quarter-end.

The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended June 30, 2023, March 31, 2023 and December 31, 2022 (dollars in thousands):

					ACL to Total			ACL to Non-			Net Charge-offs to
		ACL			Loans			Performing Loans			Average Loans (1)
December 31, 2022		$	147,946		0.59	%		140.88	%		0.22	%
March 31, 2023		$	158,792		0.64	%		139.01	%		0.08	%
June 30, 2023		$	166,833		0.68	%		140.52	%		0.09	%
(1) Annualized for the three months ended March 31, 2023 and the six months ended June 30, 2023.

The ACL at June 30, 2023 represents management's estimate of lifetime expected credit losses given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended June 30, 2023, the provision for credit losses was $15.5 million, including $14.2 million related to funded loans. The more significant factors impacting the provision for credit losses and increase in the ACL for the quarter ended June 30, 2023 were a less favorable Moody's baseline economic forecast and heavier weighting of a downside scenario.

The following table summarizes the activity in the ACL for the periods indicated (in thousands):

		Three Months Ended												Six Months Ended
		June 30, 2023				March 31, 2023				June 30, 2022				June 30, 2023				June 30, 2022
Beginning balance		$	158,792			$	147,946			$	125,443			$	147,946			$	126,457
Impact of adoption of new accounting pronouncement (ASU 2022-02)			N/A				(1,794	)			N/A				(1,794	)			N/A
Balance after impact of adoption of new accounting pronouncement (ASU 2022-02)			158,792				146,152				125,443				146,152				126,457
Provision			14,195				17,595				23,207				31,790				30,653
Net charge-offs			(6,154	)			(4,955	)			(18,411	)			(11,109	)			(26,871	)
Ending balance		$	166,833			$	158,792			$	130,239			$	166,833			$	130,239

Net Interest Income

Net interest income for the quarter ended June 30, 2023 was $213.9 million, compared to $227.9 million for the immediately preceding quarter ended March 31, 2023 and $225.4 million for the quarter ended June 30, 2022. Interest income increased by $23.0 million for the quarter ended June 30, 2023 compared to the immediately preceding quarter while interest expense increased by $37.0 million.

The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.15% to 2.47% for the quarter ended June 30, 2023, from 2.62% for the immediately preceding quarter ended March 31, 2023. Overall, the net interest margin was negatively impacted by an increase in the cost of interest-bearing deposits and FHLB advances, more than offsetting the increased yield on interest earning assets. A decline in average non-interest bearing deposits and an increase in on-balance sheet liquidity contributed to an increase in higher-cost funding.

More detail about certain factors impacting the net interest margin for the quarter ended June 30, 2023 follows:

• The tax-equivalent yield on investment securities increased to 5.19% for the quarter ended June 30, 2023, from 4.95% for the quarter ended March 31, 2023. This increase resulted primarily from the reset of coupon rates on variable rate securities.

• The tax-equivalent yield on loans increased to 5.35% for the quarter ended June 30, 2023, from 5.10% for the quarter ended March 31, 2023. The resetting of variable rate loans to higher coupon rates and origination of new loans at higher rates contributed to the increase.

• The average cost on interest bearing deposits increased to 3.39% for the quarter ended June 30, 2023 from 2.86% for the quarter ended March 31, 2023, as a result of the rising interest rate environment, tightening liquidity conditions and the shift from non-interest bearing deposits to deposits priced at current, higher market rates.

• The average rate paid on FHLB advances increased to 4.59% for the quarter ended June 30, 2023, from 4.27% for the quarter ended March 31, 2023, primarily due to higher prevailing rates, partially offset by the impact of cash flow hedges.

Non-interest income and Non-interest expense

Non-interest income totaled $25.5 million for the quarter ended June 30, 2023, compared to $16.5 million for the quarter ended March 31, 2023 and $13.5 million for the quarter ended June 30, 2022. This increase over the comparable quarters was primarily attributable to losses on certain preferred equity investments of $13.3 million and $9.3 million during the quarters ended March 31, 2023 and June 30, 2022, respectively.

Non-interest expense totaled $145.2 million for the quarter ended June 30, 2023, compared to $152.8 million for the immediately preceding quarter ended March 31, 2023 and $127.4 million for the quarter ended June 30, 2022. The quarter over quarter decline in compensation and benefits reflected expected seasonal fluctuations in payroll taxes and benefits. The quarter over quarter decline in other non-interest expense was impacted by $4.4 million in certain operational losses recognized during the quarter ended March 31, 2023. Costs related to deposit rebate and commission programs increased by $7.2 million for the quarter ended June 30, 2023 compared to the second quarter of the prior year.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, July 25, 2023 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish.

The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BIe6f3323769d343d48b39c8774b18f417. For those unable to join the live event, an archived webcast will be available in the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast.

About BankUnited, Inc.

BankUnited, Inc., with total assets of $35.9 billion at June 30, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused on the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance.

The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as adverse events impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov).

BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except share and per share data)
		June 30,				December 31,
		2023				2022
ASSETS
Cash and due from banks:
Non-interest bearing		$	18,355			$	16,068
Interest bearing			282,814				556,579
Cash and cash equivalents			301,169				572,647
Investment securities (including securities reported at fair value of $9,133,937 and $9,745,327)			9,143,937				9,755,327
Non-marketable equity securities			317,759				294,172
Loans			24,629,990				24,885,988
Allowance for credit losses			(166,833	)			(147,946	)
Loans, net			24,463,157				24,738,042
Bank owned life insurance			318,935				308,212
Operating lease equipment, net			514,734				539,799
Goodwill			77,637				77,637
Other assets			734,151				740,876
Total assets		$	35,871,479			$	37,026,712
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Non-interest bearing		$	7,304,735			$	8,037,848
Interest bearing			2,929,870				2,142,067
Savings and money market			10,084,276				13,061,341
Time			5,519,771				4,268,078
Total deposits			25,838,652				27,509,334
Federal funds purchased			—				190,000
FHLB advances			5,975,000				5,420,000
Notes and other borrowings			715,302				720,923
Other liabilities			816,215				750,474
Total liabilities			33,345,169				34,590,731
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,429,948 and 75,674,587 shares issued and outstanding			744				757
Paid-in capital			274,202				321,729
Retained earnings			2,623,926				2,551,400
Accumulated other comprehensive loss			(372,562	)			(437,905	)
Total stockholders' equity			2,526,310				2,435,981
Total liabilities and stockholders' equity		$	35,871,479			$	37,026,712

BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
		Three Months Ended											Six Months Ended
		June 30,			March 31,				June 30,				June 30,				June 30,
		2023			2023				2022				2023				2022
Interest income:
Loans		$	326,153		$	308,795			$	209,223			$	634,948			$	400,785
Investment securities			120,604			118,758				54,771				239,362				97,819
Other			16,664			12,863				2,979				29,527				4,333
Total interest income			463,421			440,416				266,973				903,837				502,937
Interest expense:
Deposits			156,868			133,630				20,501				290,498				32,363
Borrowings			92,675			78,912				21,056				171,587				36,516
Total interest expense			249,543			212,542				41,557				462,085				68,879
Net interest income before provision for credit losses			213,878			227,874				225,416				441,752				434,058
Provision for credit losses			15,517			19,788				23,996				35,305				31,826
Net interest income after provision for credit losses			198,361			208,086				201,420				406,447				402,232
Non-interest income:
Deposit service charges and fees			5,349			5,545				5,896				10,894				11,856
Gain (loss) on investment securities, net			993			(12,549	)			(8,392	)			(11,556	)			(16,260	)
Lease financing			12,519			13,109				13,363				25,628				26,778
Other non-interest income			6,626			10,430				2,583				17,056				5,377
Total non-interest income			25,487			16,535				13,450				42,022				27,751
Non-interest expense:
Employee compensation and benefits			67,414			71,051				62,461				138,465				129,549
Occupancy and equipment			11,043			10,802				11,399				21,845				22,911
Deposit insurance expense			7,597			7,907				3,993				15,504				7,396
Professional fees			3,518			2,918				3,256				6,436				5,518
Technology			20,437			21,726				17,898				42,163				34,902
Depreciation of operating lease equipment			11,232			11,521				12,585				22,753				25,195
Other non-interest expense			23,977			26,855				15,810				50,832				28,255
Total non-interest expense			145,218			152,780				127,402				297,998				253,726
Income before income taxes			78,630			71,841				87,468				150,471				176,257
Provision for income taxes			20,634			18,959				21,704				39,593				43,343
Net income		$	57,996		$	52,882			$	65,764			$	110,878			$	132,914
Earnings per common share, basic		$	0.78		$	0.71			$	0.82			$	1.49			$	1.61
Earnings per common share, diluted		$	0.78		$	0.70			$	0.82			$	1.48			$	1.60

BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
		Three Months Ended June 30,										Three Months Ended March 31,										Three Months Ended June 30,
		2023										2023										2022
		Average							Yield/			Average							Yield/			Average							Yield/
		Balance				Interest (1)			Rate (1)(2)			Balance				Interest (1)			Rate (1)(2)			Balance				Interest (1)			Rate (1)(2)
Assets:
Interest earning assets:
Loans		$	24,680,919			$	329,494		5.35	%		$	24,724,296			$	312,125		5.10	%		$	23,709,190			$	212,395		3.59	%
Investment securities (3)			9,369,019				121,520		5.19	%			9,672,514				119,666		4.95	%			10,477,600				55,488		2.12	%
Other interest earning assets			1,323,025				16,664		5.05	%			1,039,563				12,863		5.02	%			718,904				2,979		1.66	%
Total interest earning assets			35,372,963				467,678		5.30	%			35,436,373				444,654		5.05	%			34,905,694				270,862		3.11	%
Allowance for credit losses			(162,463	)									(151,071	)									(127,864	)
Non-interest earning assets			1,744,693										1,793,000										1,669,689
Total assets		$	36,955,193									$	37,078,302									$	36,447,519
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits		$	2,772,839			$	18,417		2.66	%		$	2,283,505			$	10,545		1.87	%		$	2,576,257			$	1,742		0.27	%
Savings and money market deposits			10,285,494				88,892		3.47	%			12,145,922				91,724		3.06	%			13,052,566				15,213		0.47	%
Time deposits			5,494,631				49,559		3.62	%			4,526,480				31,361		2.81	%			2,812,988				3,546		0.51	%
Total interest bearing deposits			18,552,964				156,868		3.39	%			18,955,907				133,630		2.86	%			18,441,811				20,501		0.45	%
Federal funds purchased			—				—		—	%			143,580				1,611		4.49	%			115,146				155		0.53	%
FHLB advances			7,288,187				83,429		4.59	%			6,465,000				68,039		4.27	%			4,373,736				11,644		1.07	%
Notes and other borrowings			719,368				9,246		5.14	%			720,906				9,262		5.14	%			721,284				9,257		5.13	%
Total interest bearing liabilities			26,560,519				249,543		3.77	%			26,285,393				212,542		3.28	%			23,651,977				41,557		0.70	%
Non-interest bearing demand deposits			7,067,053										7,458,221										9,419,025
Other non-interest bearing liabilities			798,279										821,419										654,162
Total liabilities			34,425,851										34,565,033										33,725,164
Stockholders' equity			2,529,342										2,513,269										2,722,355
Total liabilities and stockholders' equity		$	36,955,193									$	37,078,302									$	36,447,519
Net interest income						$	218,135									$	232,112									$	229,305
Interest rate spread									1.53	%									1.77	%									2.41	%
Net interest margin									2.47	%									2.62	%									2.63	%
(1) On a tax-equivalent basis where applicable
(2) Annualized
(3) At fair value except for securities held to maturity

BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
		Six Months Ended June 30,
		2023										2022
		Average							Yield/			Average							Yield/
		Balance				Interest (1)			Rate (1)(2)			Balance				Interest (1)			Rate (1)(2)
Assets:
Interest earning assets:
Loans		$	24,702,487			$	641,617		5.22	%		$	23,530,162			$	406,946		3.47	%
Investment securities (3)			9,519,928				241,187		5.07	%			10,281,431				99,207		1.93	%
Other interest earning assets			1,182,077				29,527		5.04	%			696,894				4,333		1.25	%
Total interest earning assets			35,404,492				912,331		5.18	%			34,508,487				510,486		2.97	%
Allowance for credit losses			(156,798	)									(128,443	)
Non-interest earning assets			1,768,714										1,672,070
Total assets		$	37,016,408									$	36,052,114
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits		$	2,570,422			$	29,291		2.30	%		$	2,825,830			$	3,111		0.22	%
Savings and money market deposits			11,169,671				180,287		3.25	%			13,225,986				22,866		0.35	%
Time deposits			5,013,230				80,920		3.26	%			3,064,887				6,386		0.42	%
Total interest bearing deposits			18,753,323				290,498		3.12	%			19,116,703				32,363		0.34	%
Federal funds purchased			71,393				1,611		4.51	%			151,074				213		0.28	%
FHLB advances			6,878,867				151,467		4.44	%			3,317,182				17,790		1.08	%
Notes and other borrowings			720,133				18,509		5.14	%			721,344				18,513		5.13	%
Total interest bearing liabilities			26,423,716				462,085		3.53	%			23,306,303				68,879		0.59	%
Non-interest bearing demand deposits			7,261,557										9,234,469
Other non-interest bearing liabilities			809,785										638,767
Total liabilities			34,495,058										33,179,539
Stockholders' equity			2,521,350										2,872,575
Total liabilities and stockholders' equity		$	37,016,408									$	36,052,114
Net interest income						$	450,246									$	441,607
Interest rate spread									1.65	%									2.38	%
Net interest margin									2.55	%									2.57	%
(1) On a tax-equivalent basis where applicable
(2) Annualized
(3) At fair value except for securities held to maturity

BANKUNITED, INC. AND SUBSIDIARIES
EARNINGS PER COMMON SHARE
(In thousands except share and per share amounts)
		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Basic earnings per common share:
Numerator:
Net income		$	57,996			$	65,764			$	110,878			$	132,914
Distributed and undistributed earnings allocated to participating securities			(881	)			(999	)			(1,679	)			(1,927	)
Income allocated to common stockholders for basic earnings per common share		$	57,115			$	64,765			$	109,199			$	130,987
Denominator:
Weighted average common shares outstanding			74,424,631				80,300,069				74,588,904				82,629,098
Less average unvested stock awards			(1,183,039	)			(1,257,258	)			(1,188,430	)			(1,234,678	)
Weighted average shares for basic earnings per common share			73,241,592				79,042,811				73,400,474				81,394,420
Basic earnings per common share		$	0.78			$	0.82			$	1.49			$	1.61
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share		$	57,115			$	64,765			$	109,199			$	130,987
Adjustment for earnings reallocated from participating securities			1				3				5				4
Income used in calculating diluted earnings per common share		$	57,116			$	64,768			$	109,204			$	130,991
Denominator:
Weighted average shares for basic earnings per common share			73,241,592				79,042,811				73,400,474				81,394,420
Dilutive effect of certain share-based awards			179,318				350,734				312,708				244,808
Weighted average shares for diluted earnings per common share			73,420,910				79,393,545				73,713,182				81,639,228
Diluted earnings per common share		$	0.78			$	0.82			$	1.48			$	1.60

BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
		At or for the Three Months Ended												Six Months Ended June 30,
		June 30, 2023				March 31, 2023				June 30, 2022				2023			2022
Financial ratios (4)
Return on average assets			0.63	%			0.58	%			0.72	%		0.60	%		0.74	%
Return on average stockholders’ equity			9.2	%			8.5	%			9.7	%		8.9	%		9.3	%
Net interest margin (3)			2.47	%			2.62	%			2.63	%		2.55	%		2.57	%
Loans to deposits			95.3	%			96.8	%			84.7	%
Tangible book value per common share		$	32.90			$	32.30			$	31.16

		June 30, 2023			December 31, 2022
Asset quality ratios
Non-performing loans to total loans (1)(5)		0.48	%		0.42	%
Non-performing assets to total assets (2)(5)		0.34	%		0.29	%
Allowance for credit losses to total loans		0.68	%		0.59	%
Allowance for credit losses to non-performing loans (1)(5)		140.52	%		140.88	%
Net charge-offs to average loans (4)		0.09	%		0.22	%

(1)		We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans.
(2)		Non-performing assets include non-performing loans, OREO and other repossessed assets.
(3)		On a tax-equivalent basis.
(4)		Annualized for the three and six month periods as applicable.
(5)		Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $35.9 million or 0.15% of total loans and 0.10% of total assets at June 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022.

		June 30, 2023						March 31, 2023						December 31, 2022						Required to be Considered Well Capitalized
		BankUnited, Inc.			BankUnited, N.A.			BankUnited, Inc.			BankUnited, N.A.			BankUnited, Inc.			BankUnited, N.A.
Capital ratios
Tier 1 leverage		7.6	%		8.8	%		7.4	%		8.6	%		7.5	%		8.4	%		5.0	%
Common Equity Tier 1 ("CET1") risk-based capital		11.2	%		13.0	%		10.8	%		12.5	%		11.0	%		12.4	%		6.5	%
Total risk-based capital		13.0	%		13.6	%		12.6	%		13.1	%		12.7	%		12.9	%		10.0	%
Tangible Common Equity/Tangible Assets		6.8	%		N/A			6.5	%		N/A			6.4	%		N/A			N/A

Non-GAAP Financial Measures

Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data):

		June 30, 2023			March 31, 2023			June 30, 2022
Total stockholders’ equity		$	2,526,310		$	2,481,394		$	2,506,017
Less: goodwill and other intangible assets			77,637			77,637			77,637
Tangible stockholders’ equity		$	2,448,673		$	2,403,757		$	2,428,380
Common shares issued and outstanding			74,429,948			74,423,365			77,944,216
Book value per common share		$	33.94		$	33.34		$	32.15
Tangible book value per common share		$	32.90		$	32.30		$	31.16

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230725471731/en/

BankUnited, Inc.

Investor Relations:

Leslie N. Lunak, 786-313-1698

llunak@bankunited.com

Source: BankUnited, Inc.

FAQ

What is BankUnited's net income for Q2 2023?

BankUnited reported net income of $58.0 million for Q2 2023.

How much did total deposits grow by during the quarter?

Total deposits grew by $116 million during the quarter.

What is the NPA ratio for BankUnited?

The NPA ratio for BankUnited is 0.34%.

What is the capital position of BankUnited?

The capital position of BankUnited is robust with CET1 at 11.2% at the holding company and 13.0% at the Bank.