BankUnited, Inc. Reports Second Quarter 2024 Results

Rhea-AI Summary

BankUnited, Inc. (NYSE: BKU) reported net income of $53.7 million, or $0.72 per diluted share, for Q2 2024. Key highlights include:

- Net interest margin expanded by 0.15% to 2.72%
- Average cost of total deposits declined by 0.09% to 3.09%
- Non-brokered deposits grew by $1.3 billion
- Non-interest bearing demand deposits grew by $826 million
- Total loans grew by $402 million
- Loan to deposit ratio declined to 88.7%

The company maintained strong liquidity with $14.9 billion in total same-day available liquidity and robust capital position with CET1 at 11.6%. Credit trends remained largely favorable with an annualized net charge-off ratio of 0.12% for H1 2024.

Positive

• Net income increased to $53.7 million from $48.0 million in the previous quarter
• Net interest margin expanded by 0.15% to 2.72%
• Average cost of total deposits declined by 0.09% to 3.09%
• Non-brokered deposits grew by $1.3 billion
• Non-interest bearing demand deposits grew by $826 million
• Total loans grew by $402 million
• Loan to deposit ratio improved to 88.7% from 89.6%
• Strong liquidity position with $14.9 billion in total same-day available liquidity
• Robust capital position with CET1 at 11.6%

Negative

• Net income decreased compared to $58.0 million in Q2 2023
• Non-performing assets increased to $176.0 million from $118.9 million in the previous quarter
• Non-performing loans ratio increased to 0.70% from 0.48% in the previous quarter
• Provision for credit losses increased to $19.5 million from $15.3 million in the previous quarter

Insights

Financial Analyst

BankUnited reported a net income of $53.7 million for Q2 2024, up from $48.0 million in the previous quarter, but down from $58.0 million in Q2 2023. The earnings per share (EPS) were $0.72, showing an increase from $0.64 in Q1 2024. This indicates a strong recovery quarter-on-quarter despite a year-on-year decline. The increase in net interest margin to 2.72% from 2.57% is a positive sign, suggesting better asset-liability management and profitable lending operations.

Another noteworthy point is the decline in the cost of deposits by 0.09% to 3.09%, which helps improve profitability. Growth in non-interest bearing deposits by over $800 million is beneficial as it reduces the overall cost of funds. However, it is essential to monitor potential risks such as the increase in non-performing assets (NPAs) to 0.50% from 0.34% in the previous quarter.

Average cost of interest-bearing deposits and net charge-off ratio are stable at 4.29% and 0.12% respectively, indicating sound risk management practices. Given the solid earnings performance and improved margins, short-term outlook appears positive but vigilance is needed for credit quality trends.

Market Research Analyst

The substantial growth in commercial and industrial (C&I) loans by $589 million and commercial real estate (CRE) loans reflects a strategic focus on profitable sectors. The decline in residential loans by $212 million aligns with the bank’s strategy to minimize risks associated with the residential real estate market, which can be more volatile. This shift in loan portfolio composition towards C&I and CRE could yield higher returns but also comes with its own set of risks, notably in the current economic environment.

It's interesting to note that the bank's CRE exposure is 24% of total loans, below the industry median of 35% and significantly lower in terms of risk-based capital. This conservative stance may shelter the bank from potential market downturns in the CRE sector. The weighting in Florida properties and New York tri-state area also suggests a regional strategic focus, which could be advantageous if these markets remain robust.

Long-term investors should watch the trends in criticized and classified loans, particularly in the office sub-segment, where risk rating migration has been observed. These factors could impact future provisioning and, ultimately, profitability.

Credit Risk Analyst

The annualized net charge-off ratio of 0.12% and an increase in the allowance for credit losses (ACL) to $225.7 million are important indicators of the bank's credit risk management. While the ACL to total loans ratio increased to 0.92%, reflecting proactive provisioning, the rise in non-performing loans (NPLs) to $173.5 million (0.70% of total loans) from $115.8 million (0.48%) is a red flag. This increase was primarily driven by the office property sub-segment, which is facing challenges due to rent abatement periods and lower occupancy levels.

Despite these issues, the weighted average loan-to-value (LTV) of 56% and a weighted average debt service coverage ratio (DSCR) of 1.77 for the CRE portfolio suggest that the bank has a good buffer against potential defaults. Moreover, a short duration of the AFS securities portfolio (1.82 years) reduces interest rate risk, which is prudent in a volatile rate environment.

In the short term, increased provisioning and higher NPLs may weigh on profitability, but the overall credit risk appears manageable. Investors should remain cautious and keep an eye on the evolving credit landscape, especially in the office property market.

MIAMI LAKES, Fla.--(BUSINESS WIRE)-- BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2024.

"This was an outstanding quarter. Margin expanded, the cost of deposits declined, non-interest bearing deposits grew by over $800 million and we saw good growth in the core commercial loan portfolio segments," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended June 30, 2024, the Company reported net income of $53.7 million, or $0.72 per diluted share, compared to $48.0 million, or $0.64 per diluted share, for the immediately preceding quarter ended March 31, 2024 and $58.0 million, or $0.78 per diluted share, for the quarter ended June 30, 2023. For the six months ended June 30, 2024, the Company reported net income of $101.7 million, or $1.36 per diluted share compared to $110.9 million, or $1.48 per diluted share for the six months ended June 30, 2023.

Quarterly Highlights

We continued to execute on our strategic priorities this quarter:

• The net interest margin, calculated on a tax-equivalent basis, expanded by 0.15%, to 2.72% for the quarter ended June 30, 2024 from 2.57% for the immediately preceding quarter.

• The average cost of total deposits declined by 0.09% to 3.09% for the quarter ended June 30, 2024 from 3.18% for the quarter ended March 31, 2024. The spot APY of total deposits declined to 3.09% at June 30, 2024 from 3.17% at March 31, 2024. The spot APY of interest bearing deposits was stable at 4.29% at both June 30, 2024 and March 31, 2024.

• Non-brokered deposits grew by $1.3 billion for the quarter ended June 30, 2024 while total deposits grew by $736 million. Non-interest bearing demand deposits grew by $826 million, to 29% of total deposits at June 30, 2024, up from 27% at March 31, 2024. Average non-interest bearing demand deposits grew by $888 million for the quarter. For the first six months of 2024, non-interest bearing demand deposits grew by $1.2 billion.

• Wholesale funding continued to decline; in total, FHLB advances and brokered deposits were down by $1.2 billion for the quarter ended June 30, 2024.

• Total loans grew by $402 million for the quarter ended June 30, 2024. The core C&I and commercial real estate portfolios grew by $589 million and mortgage warehouse grew by $83 million. Consistent with our strategic objectives, the residential loan portfolio declined by $212 million; franchise, equipment and municipal finance declined by a total of $57 million.

• The loan to deposit ratio declined to 88.7% at June 30, 2024, from 89.6% at March 31, 2024.

• Credit trends remain largely favorable although we are seeing some expected normalization. The annualized net charge-off ratio for the six months ended June 30, 2024 was 0.12%. The NPA ratio at June 30, 2024 was 0.50%, including 0.11% related to the guaranteed portion of non-accrual SBA loans, compared to 0.34%, including 0.11% related to the guaranteed portion of non-accrual SBA loans at March 31, 2024. The NPA ratio remains below pre-pandemic levels.

• The ratio of the ACL to total loans increased to 0.92% at June 30, 2024; the ratio of the ACL to non-performing loans was 130.12%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.42% at June 30, 2024 and the ACL to loans ratio for CRE office loans was 2.47%.

• Our commercial real estate exposure is modest, totaling 24% of loans and 165% of the Bank's total risk based capital at June 30, 2024. By comparison, based on call report data as of March 31, 2024 (the most recent date available) for banks with between $10 billion and $100 billion in assets, the median level of CRE to total loans was 35% and the median level of CRE to total risk based capital was 222%.

• At June 30, 2024, the weighted average LTV of the CRE portfolio was 56.0%, the weighted average DSCR was 1.77, 56% of the portfolio was collateralized by properties located in Florida and 27% was collateralized by properties located in the New York tri-state area. For the office sub-segment, the weighted average LTV was 65.8%, the weighted average DSCR was 1.59, 58% was collateralized by properties in Florida, substantially all of which was suburban, and 24% was collateralized by properties located in the New York tri-state area.

• Liquidity remains ample. Total same day available liquidity was $14.9 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 139% and an estimated 61% of our deposits were insured or collateralized at June 30, 2024.

• Our capital position is robust. At June 30, 2024, CET1 was 11.6% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.4% at June 30, 2024. The ratio of tangible common equity to tangible assets increased to 7.4% at June 30, 2024.

• The net unrealized pre-tax loss on the available for sale ("AFS") securities portfolio continued to improve, declining by $36 million, to 5% of amortized cost, for the quarter ended June 30, 2024. The duration of our AFS securities portfolio remained short, at 1.82 as of June 30, 2024. Held to maturity securities were not significant.

• Book value and tangible book value per common share continued to grow, to $36.11 and $35.07, respectively, at June 30, 2024, compared to $35.31 and $34.27, respectively, at March 31, 2024, and $33.94 and $32.90, respectively, one year ago.

Loans

Loan portfolio composition at the dates indicated follows (dollars in thousands):

	June 30, 2024						March 31, 2024						December 31, 2023
Core C&I and CRE sub-segments:
Non-owner occupied commercial real estate	$	5,367,663		21.8	%		$	5,309,126		21.9	%		$	5,323,241		21.6	%
Construction and land		584,833		2.4	%			529,645		2.2	%			495,992		2.0	%
Owner occupied commercial real estate		1,966,809		8.0	%			1,916,651		7.9	%			1,935,743		7.9	%
Commercial and industrial		7,170,622		29.1	%			6,745,622		27.9	%			6,971,981		28.3	%
		15,089,927		61.3	%			14,501,044		59.9	%			14,726,957		59.8	%
Franchise and equipment finance		307,442		1.2	%			347,103		1.4	%			380,347		1.5	%
Pinnacle - municipal finance		847,234		3.4	%			864,796		3.6	%			884,690		3.6	%
Mortgage warehouse lending ("MWL")		539,159		2.2	%			456,385		1.9	%			432,663		1.8	%
Residential		7,844,722		31.9	%			8,056,972		33.2	%			8,209,027		33.3	%
	$	24,628,484		100.0	%		$	24,226,300		100.0	%		$	24,633,684		100.0	%

For the quarter ended June 30, 2024, total loans grew by $402 million. The core C&I and CRE portfolio sub-segments grew by $589 million and MWL grew by $83 million. Consistent with our balance sheet strategy, residential loans declined by $212 million; franchise, equipment, and municipal finance declined by an aggregate $57 million.

Asset Quality and the ACL

The following table presents the ACL and related ACL coverage ratios at the dates indicated as well as net charge-off rates for the periods ended June 30, 2024, March 31, 2024 and December 31, 2023 (dollars in thousands):

	ACL			ACL to Total Loans			Commercial ACL to Commercial Loans(2)			ACL to Non-Performing Loans			Net Charge-offs to Average Loans (1)
December 31, 2023	$	202,689		0.82	%		1.29	%		159.54	%		0.09	%
March 31, 2024	$	217,556		0.90	%		1.42	%		187.92	%		0.02	%
June 30, 2024	$	225,698		0.92	%		1.42	%		130.12	%		0.12

___________
(1)			Annualized for the three months ended March 31, 2024 and the six months ended June 30, 2024.
(2)			For purposes of this ratio, commercial loans includes the core C&I and CRE sub-segments as presented in the table above as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio.

The ACL at June 30, 2024 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, 2024, the provision for credit losses, including both funded and unfunded loan commitments, was $19.5 million, compared to $15.3 million for the immediately preceding quarter ended March 31, 2024. Significant factors impacting the provision for credit losses for the quarter ended June 30, 2024 were new loan production, risk rating migration and changes in portfolio characteristics and an increase in certain specific reserves.

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

	Three Months Ended												Six Months Ended
	June 30, 2024				March 31, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Beginning balance	$	217,556			$	202,689			$	158,792			$	202,689			$	147,946
Impact of adoption of new accounting pronouncement (ASU 2022-02)		N/A				N/A				N/A				N/A				(1,794	)
Balance after impact of adoption of ASU 2022-02		217,556				202,689				158,792				202,689				146,152
Provision		21,823				15,805				14,195				37,628				31,790
Net charge-offs		(13,681	)			(938	)			(6,154	)			(14,619	)			(11,109	)
Ending balance	$	225,698			$	217,556			$	166,833			$	225,698			$	166,833

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

	June 30, 2024						March 31, 2024						December 31, 2023
	CRE			Total Commercial			CRE			Total Commercial			CRE			Total Commercial
Special mention	$	138,403		$	265,940		$	139,980		$	357,800		$	97,552		$	319,905
Substandard - accruing		597,888			946,832			577,418			966,129			390,724			711,266
Substandard - non-accruing		54,088			131,193			12,258			83,511			13,727			86,903
Doubtful		8,301			25,258			—			13,822			—			19,035
Total	$	798,680		$	1,369,223		$	729,656		$	1,421,262		$	502,003		$	1,137,109

Total criticized and classified commercial loans declined by $52 million for the quarter ended June 30, 2024. Criticized and classified CRE loans increased by $69 million, the majority of this in the office category, more than offset by declines of $121 million in other commercial categories. As expected in the current environment, there has been some further risk rating migration within the criticized and classified population, primarily within the CRE office category. Rent abatement periods, delays in completing build-out of leased space and in some cases lower occupancy levels contributed to risk rating migration in the office portfolio.

NPAs remain below pre-pandemic levels, although increasing to $176.0 million at June 30, 2024 from $118.9 million at March 31, 2024. Non-performing loans totaled $173.5 million or 0.70% of total loans at June 30, 2024, compared to $115.8 million or 0.48% of total loans at March 31, 2024. Non-performing loans included $39.0 million and $40.0 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.16% of total loans at both June 30, 2024 and March 31, 2024. The $59 million increase in non-performing loans for the quarter ended June 30, 2024 included $50 million of office exposure.

Net Interest Income

Net interest income for the quarter ended June 30, 2024 was $226.0 million, compared to $214.9 million for the immediately preceding quarter ended March 31, 2024. Interest income increased by $1.8 million for the quarter ended June 30, 2024 compared to the immediately preceding quarter, while interest expense decreased by $9.3 million.

The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.15% to 2.72% for the quarter ended June 30, 2024, from 2.57% for the immediately preceding quarter ended March 31, 2024. Factors impacting the net interest margin for the quarter ended June 30, 2024 were:

• Average non-interest bearing demand deposits increased by $888 million, to 27.5% of average total deposits for the quarter ended June 30, 2024 from 24.7% for the quarter ended March 31, 2024, positively impacting the margin.

• The tax-equivalent yield on loans increased to 5.85% for the quarter ended June 30, 2024, from 5.78% for the quarter ended March 31, 2024. This increase reflects the origination of new loans at higher rates, paydowns of lower rate loans and balance sheet repositioning.

• The average cost of interest bearing deposits increased this quarter, but at a declining rate, to 4.26% for the quarter ended June 30, 2024 from 4.21% for the quarter ended March 31, 2024.

• The average rate paid on FHLB advances increased to 4.28% for the quarter ended June 30, 2024 from 4.18% for the quarter ended March 31, 2024, reflecting maturities of cash flow hedges.

Non-interest income

Non-interest income totaled $24.2 million for the quarter ended June 30, 2024, compared to $26.9 million for the quarter ended March 31, 2024. The $5.8 million decline in lease financing income quarter over quarter was attributable to both lower residual income and the lower balance of operating lease equipment. There was a corresponding decline in depreciation of operating lease equipment. The $3.9 million increase in "other non-interest income" reflected increases in revenue from our customer derivative business and higher loan related and syndication fees.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, July 18, 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/BI3a7df9cdebad462ba05970d7dc7dba95. For those unable to join the live event, an archived webcast will be available on 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 $35.4 billion at June 30, 2024, 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, 2023, 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, 2024		March 31, 2024		December 31, 2023
ASSETS
Cash and due from banks:
Non-interest bearing	$ 12,631		$ 13,773		$ 14,945
Interest bearing	420,821		407,443		573,338
Cash and cash equivalents	433,452		421,216		588,283
Investment securities (including securities reported at fair value of $8,936,449, $8,914,959 and $8,867,354)	8,946,449		8,924,959		8,877,354
Non-marketable equity securities	223,159		252,609		310,084
Loans	24,628,484		24,226,300		24,633,684
Allowance for credit losses	(225,698)		(217,556)		(202,689)
Loans, net	24,402,786		24,008,744		24,430,995
Bank owned life insurance	297,827		295,970		318,459
Operating lease equipment, net	266,815		329,025		371,909
Goodwill	77,637		77,637		77,637
Other assets	779,781		795,494		786,886
Total assets	$ 35,427,906		$ 35,105,654		$ 35,761,607
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Non-interest bearing	$ 8,065,209		$ 7,239,604		$ 6,835,236
Interest bearing	3,771,793		3,549,141		3,403,539
Savings and money market	11,463,211		11,122,916		11,135,708
Time	4,463,394		5,115,703		5,163,995
Total deposits	27,763,607		27,027,364		26,538,478
FHLB advances	3,285,000		3,905,000		5,115,000
Notes and other borrowings	708,835		708,978		708,973
Other liabilities	971,116		823,920		821,235
Total liabilities	32,728,558		32,465,262		33,183,686
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,758,609, 74,772,706 and 74,372,505 shares issued and outstanding	748		748		744
Paid-in capital	290,719		286,169		283,642
Retained earnings	2,709,503		2,677,403		2,650,956
Accumulated other comprehensive loss	(301,622)		(323,928)		(357,421)
Total stockholders' equity	2,699,348		2,640,392		2,577,921
Total liabilities and stockholders' equity	$35,427,906		$ 35,105,654		$ 35,761,607

BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
	Three Months Ended									Six Months Ended
	June 30, 2024			March 31, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Interest income:
Loans	$	350,604		$	347,257		$	326,153		$	697,861		$	634,948
Investment securities		123,708			124,179			120,604			247,887			239,362
Other		8,986			10,038			16,664			19,024			29,527
Total interest income		483,298			481,474			463,421			964,772			903,837
Interest expense:
Deposits		208,091			209,998			156,868			418,089			290,498
Borrowings		49,185			56,619			92,675			105,804			171,587
Total interest expense		257,276			266,617			249,543			523,893			462,085
Net interest income before provision for credit losses		226,022			214,857			213,878			440,879			441,752
Provision for credit losses		19,538			15,285			15,517			34,823			35,305
Net interest income after provision for credit losses		206,484			199,572			198,361			406,056			406,447
Non-interest income:
Deposit service charges and fees		4,909			5,313			5,182			10,222			10,515
Gain (loss) on investment securities, net		421			775			993			1,196			(11,556	)
Lease financing		5,640			11,440			12,519			17,080			25,628
Other non-interest income		13,215			9,349			6,793			22,564			17,435
Total non-interest income		24,185			26,877			25,487			51,062			42,022
Non-interest expense:
Employee compensation and benefits		75,588			75,920			67,414			151,508			138,465
Occupancy and equipment		10,973			10,569			11,043			21,542			21,845
Deposit insurance expense		8,530			13,530			7,597			22,060			15,504
Professional fees		4,497			2,510			3,518			7,007			6,436
Technology		20,567			20,315			20,437			40,882			42,163
Depreciation of operating lease equipment		7,896			9,213			11,232			17,109			22,753
Other non-interest expense		29,655			27,183			23,977			56,838			50,832
Total non-interest expense		157,706			159,240			145,218			316,946			297,998
Income before income taxes		72,963			67,209			78,630			140,172			150,471
Provision for income taxes		19,230			19,229			20,634			38,459			39,593
Net income	$	53,733		$	47,980		$	57,996		$	101,713		$	110,878
Earnings per common share, basic	$	0.72		$	0.64		$	0.78		$	1.36		$	1.49
Earnings per common share, diluted	$	0.72		$	0.64		$	0.78		$	1.36		$	1.48

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,
	2024										2024										2023
	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	$	24,290,169			$	353,707		5.85	%		$	24,337,440			$	350,441		5.78	%		$	24,680,919			$	329,494		5.35	%
Investment securities (3)		8,894,517				124,572		5.60	%			8,952,453				125,025		5.59	%			9,369,019				121,520		5.19	%
Other interest earning assets		711,586				8,986		5.08	%			763,460				10,038		5.29	%			1,323,025				16,664		5.05	%
Total interest earning assets		33,896,272				487,265		5.77	%			34,053,353				485,504		5.72	%			35,372,963				467,678		5.30	%
Allowance for credit losses		(225,161	)									(206,747	)									(162,463	)
Non-interest earning assets		1,571,649										1,589,333										1,744,693
Total assets	$	35,242,760									$	35,435,939									$	36,955,193
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits	$	3,742,071			$	35,249		3.79	%		$	3,584,363			$	33,507		3.76	%		$	2,772,839			$	18,417		2.66	%
Savings and money market deposits		11,176,000				118,945		4.28	%			11,234,259				118,639		4.25	%			10,285,494				88,892		3.47	%
Time deposits		4,750,640				53,897		4.56	%			5,231,178				57,852		4.45	%			5,494,631				49,559		3.62	%
Total interest bearing deposits		19,668,711				208,091		4.26	%			20,049,800				209,998		4.21	%			18,552,964				156,868		3.39	%
FHLB advances		3,764,286				40,032		4.28	%			4,570,220				47,496		4.18	%			7,288,187				83,429		4.59	%
Notes and other borrowings		711,167				9,153		5.15	%			709,017				9,123		5.15	%			719,368				9,246		5.14	%
Total interest bearing liabilities		24,144,164				257,276		4.28	%			25,329,037				266,617		4.23	%			26,560,519				249,543		3.77	%
Non-interest bearing demand deposits		7,448,633										6,560,926										7,067,053
Other non-interest bearing liabilities		960,691										906,266										798,279
Total liabilities		32,553,488										32,796,229										34,425,851
Stockholders' equity		2,689,272										2,639,710										2,529,342
Total liabilities and stockholders' equity	$	35,242,760									$	35,435,939									$	36,955,193
Net interest income					$	229,989									$	218,887									$	218,135
Interest rate spread								1.49	%									1.49	%									1.53	%
Net interest margin								2.72	%									2.57	%									2.47	%

_____________
(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,
	2024										2023
	Average Balance				Interest (1)			Yield/ Rate (1)(2)			Average Balance				Interest (1)			Yield/ Rate (1)(2)
Assets:
Interest earning assets:
Loans	$	24,313,806			$	704,149		5.82	%		$	24,702,487			$	641,617		5.22	%
Investment securities (3)		8,923,485				249,596		5.59	%			9,519,928				241,187		5.07	%
Other interest earning assets		737,523				19,024		5.19	%			1,182,077				29,527		5.04	%
Total interest earning assets		33,974,814				972,769		5.74	%			35,404,492				912,331		5.18	%
Allowance for credit losses		(215,954	)									(156,798	)
Non-interest earning assets		1,580,491										1,768,714
Total assets	$	35,339,351									$	37,016,408
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits	$	3,663,217			$	68,756		3.77	%		$	2,570,422			$	29,291		2.30	%
Savings and money market deposits		11,205,130				237,584		4.26	%			11,169,671				180,287		3.25	%
Time deposits		4,990,909				111,749		4.50	%			5,013,230				80,920		3.26	%
Total interest bearing deposits		19,859,256				418,089		4.23	%			18,753,323				290,498		3.12	%
Federal funds purchased		—				—		—	%			70,150				1,582		4.51	%
FHLB advances		4,167,253				87,528		4.22	%			6,878,867				151,467		4.44	%
Notes and other borrowings		710,092				18,276		5.15	%			721,376				18,538		5.14	%
Total interest bearing liabilities		24,736,601				523,893		4.26	%			26,423,716				462,085		3.53	%
Non-interest bearing demand deposits		7,004,780										7,261,557
Other non-interest bearing liabilities		933,479										809,785
Total liabilities		32,674,860										34,495,058
Stockholders' equity		2,664,491										2,521,350
Total liabilities and stockholders' equity	$	35,339,351									$	37,016,408
Net interest income					$	448,876									$	450,246
Interest rate spread								1.48	%									1.65	%
Net interest margin								2.64	%									2.55	%

_____________
(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												Six Months Ended
	June 30, 2024				March 31, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Basic earnings per common share:
Numerator:
Net income	$	53,733			$	47,980			$	57,996			$	101,713			$	110,878
Distributed and undistributed earnings allocated to participating securities		(748	)			(680	)			(881	)			(1,429	)			(1,679	)
Income allocated to common stockholders for basic earnings per common share	$	52,985			$	47,300			$	57,115			$	100,284			$	109,199
Denominator:
Weighted average common shares outstanding		74,762,498				74,509,107				74,424,631				74,635,803				74,588,904
Less average unvested stock awards		(1,110,233	)			(1,127,838	)			(1,183,039	)			(1,119,035	)			(1,188,430	)
Weighted average shares for basic earnings per common share		73,652,265				73,381,269				73,241,592				73,516,768				73,400,474
Basic earnings per common share	$	0.72			$	0.64			$	0.78			$	1.36			$	1.49
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share	$	52,985			$	47,300			$	57,115			$	100,284			$	109,199
Adjustment for earnings reallocated from participating securities		2				1				1				4				5
Income used in calculating diluted earnings per common share	$	52,987			$	47,301			$	57,116			$	100,288			$	109,204
Denominator:
Weighted average shares for basic earnings per common share		73,652,265				73,381,269				73,241,592				73,516,768				73,400,474
Dilutive effect of certain share-based awards		365,988				255,824				179,318				310,906				312,708
Weighted average shares for diluted earnings per common share		74,018,253				73,637,093				73,420,910				73,827,674				73,713,182
Diluted earnings per common share	$	0.72			$	0.64			$	0.78			$	1.36			$	1.48

BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
	At or for the Three Months Ended												At or for the Six Months Ended
	June 30, 2024				March 31, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Financial ratios (4)
Return on average assets		0.61	%			0.54	%			0.63	%			0.58	%			0.60	%
Return on average stockholders’ equity		8.0	%			7.3	%			9.2	%			7.7	%			8.9	%
Net interest margin (3)		2.72	%			2.57	%			2.47	%			2.64	%			2.55	%
Loans to deposits		88.7	%			89.6	%			95.3	%			88.7	%			95.3	%
Tangible book value per common share	$	35.07			$	34.27			$	32.90			$	35.07			$	32.90

	June 30, 2024			March 31, 2024			December 31, 2023
Asset quality ratios
Non-performing loans to total loans (1)(5)	0.70	%		0.48	%		0.52	%
Non-performing assets to total assets (2)(5)	0.50	%		0.34	%		0.37	%
Allowance for credit losses to total loans	0.92	%		0.90	%		0.82	%
Allowance for credit losses to total commercial(6)	1.42	%		1.42	%		1.29	%
Allowance for credit losses to non-performing loans (1)(5)	130.12	%		187.92	%		159.54	%
Net charge-offs to average loans(4)	0.12	%		0.02	%		0.09	%

_____________
(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 $39.0 million or 0.16% of total loans and 0.11% of total assets at June 30, 2024, $40.0 million or 0.16% of total loans and 0.11% of total assets at March 31, 2024, and $41.8 million or 0.17% of total loans and 0.12% of total assets at December 31, 2023.
(6)		For purposes of this ratio, commercial loans includes the C&I and CRE sub-segments, as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio.

	June 30, 2024				March 31, 2024				December 31, 2023				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	8.2 %		9.6 %		8.1 %		9.3 %		7.9 %		9.1 %		5.0 %
Common Equity Tier 1 ("CET1") risk-based capital	11.6 %		13.5 %		11.6 %		13.4 %		11.4 %		13.1 %		6.5 %
Total risk-based capital	13.6 %		14.4 %		13.7 %		14.3 %		13.4 %		13.9 %		10.0 %
Tangible Common Equity/Tangible Assets	7.4 %		N/A		7.3 %		N/A		7.0 %		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, 2024			March 31, 2024			June 30, 2023
Total stockholders’ equity	$	2,699,348		$	2,640,392		$	2,526,310
Less: goodwill and other intangible assets		77,637			77,637			77,637
Tangible stockholders’ equity	$	2,621,711		$	2,562,755		$	2,448,673
Common shares issued and outstanding		74,758,609			74,772,706			74,429,948
Book value per common share	$	36.11		$	35.31		$	33.94
Tangible book value per common share	$	35.07		$	34.27		$	32.90

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240718442866/en/

BankUnited, Inc.

Investor Relations:

Leslie N. Lunak, 786-313-1698; llunak@bankunited.com

Source: BankUnited, Inc.

FAQ

What was BankUnited's (BKU) net income for Q2 2024?

BankUnited (BKU) reported net income of $53.7 million, or $0.72 per diluted share, for Q2 2024.

How did BankUnited's (BKU) net interest margin change in Q2 2024?

BankUnited's (BKU) net interest margin expanded by 0.15% to 2.72% in Q2 2024 compared to the previous quarter.

What was the growth in non-brokered deposits for BankUnited (BKU) in Q2 2024?

BankUnited (BKU) saw non-brokered deposits grow by $1.3 billion in Q2 2024.

How much did BankUnited's (BKU) total loans grow in Q2 2024?

BankUnited's (BKU) total loans grew by $402 million in Q2 2024.

What was BankUnited's (BKU) CET1 ratio as of June 30, 2024?

BankUnited's (BKU) CET1 ratio was 11.6% at a consolidated level as of June 30, 2024.