BankUnited, Inc. Reports Second Quarter 2021 Results

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2021.

“We're very happy with results for the quarter and optimistic about a strong economic recovery" said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended June 30, 2021, the Company reported net income of $104.0 million, or $1.11 per diluted share, compared to $98.8 million or $1.06 per diluted share for the immediately preceding quarter ended March 31, 2021 and $76.5 million, or $0.80 per diluted share, for the quarter ended June 30, 2020.

For the six months ended June 30, 2021, the Company reported net income of $202.8 million, or $2.17 per diluted share, compared to $45.6 million, or $0.47 per diluted share, for the six months ended June 30, 2020. On an annualized basis, earnings for the six months ended June 30, 2021 generated a return on average stockholders' equity of 13.2% and a return on average assets of 1.15%.

Financial Highlights

  • Pre-tax, pre-provision net revenue ("PPNR") was $112.6 million for the quarter ended June 30, 2021 compared to $103.3 million for the immediately preceding quarter ended March 31, 2021 and $122.3 million for the quarter ended June 30, 2020. For the six months ended June 30, 2021 and 2020, PPNR was $215.9 million and $207.3 million, respectively.
  • Net interest income increased by $2.1 million compared to the immediately preceding quarter ended March 31, 2021 and by $8.0 million compared to the quarter ended June 30, 2020. The net interest margin calculated on a tax-equivalent basis, impacted by elevated levels of liquidity, decreased to 2.37% for the quarter ended June 30, 2021 from 2.39% for both the immediately preceding quarter ended March 31, 2021 and the quarter ended June 30, 2020.
  • The average cost of total deposits continued to decline, dropping by 0.08% to 0.25% for the quarter ended June 30, 2021 from 0.33% for the immediately preceding quarter ended March 31, 2021, and 0.80% for the quarter ended June 30, 2020. On a spot basis, the average annual percentage yield ("APY") on total deposits declined to 0.22% at June 30, 2021 from 0.27% at March 31, 2021 and 0.36% at December 31, 2020.
  • For the quarter ended June 30, 2021, the Company recorded a recovery of credit losses of $(27.5) million compared to a recovery of $(28.0) million for the immediately preceding quarter ended March 31, 2021 and a provision for credit losses of $25.4 million for the quarter ended June 30, 2020. For the six months ended June 30, 2021 and 2020, the provision for (recovery of) credit losses was $(55.5) million and $150.8 million, respectively.
  • As expected, the Company's levels of criticized and classified loans, which had increased as a result of the COVID-19 pandemic, have started to decline. During the quarter ended June 30, 2021, total criticized and classified loans declined by $541 million or 21%, to $2.1 billion at June 30, 2021 from $2.6 billion at March 31, 2021.
  • Loans currently under short-term deferral totaled $41 million and loans modified under the CARES Act totaled $456 million for a total of $497 million at June 30, 2021, down from a total of $762 million at March 31, 2021.
  • Non-interest bearing demand deposits grew by $869 million during the quarter ended June 30, 2021 while total deposits grew by $877 million. Average non-interest bearing demand deposits grew by $673 million for the quarter ended June 30, 2021 compared to the immediately preceding quarter and by $2.9 billion compared to the second quarter of the prior year. At June 30, 2021, non-interest bearing demand deposits represented 31% of total deposits, compared to 25% of total deposits at December 31, 2020.
  • Investment securities grew by $987 million for the quarter ended June 30, 2021, while loans and operating leases, excluding PPP loans, declined by $69 million. Excess liquidity was deployed into the investment portfolio during the quarter as loan growth continued to lag growth in deposits.
  • Book value per common share and tangible book value per common share at June 30, 2021 increased to $33.91 and $33.08, respectively, from $32.05 and $31.22, respectively at December 31, 2020.
  • On July 21, 2021, the Company's Board of Directors authorized the repurchase of up to an additional $150 million in shares of its outstanding common stock.

Loans and Leases

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

June 30, 2021

March 31, 2021

December 31, 2020

Residential and other consumer loans

$

7,076,274

30.9

%

$

6,582,447

28.1

%

$

6,348,222

26.6

%

Multi-family

1,256,711

5.5

%

1,507,462

6.5

%

1,639,201

6.9

%

Non-owner occupied commercial real estate

4,724,183

20.7

%

4,871,110

20.9

%

4,963,273

20.8

%

Construction and land

218,634

1.0

%

287,821

1.2

%

293,307

1.2

%

Owner occupied commercial real estate

1,960,900

8.6

%

1,932,153

8.3

%

2,000,770

8.4

%

Commercial and industrial

4,205,795

18.4

%

4,048,473

17.3

%

4,447,383

18.6

%

PPP

491,960

2.1

%

911,951

3.9

%

781,811

3.3

%

Pinnacle

1,046,537

4.6

%

1,088,685

4.7

%

1,107,386

4.6

%

Bridge - franchise finance

463,874

2.0

%

524,617

2.2

%

549,733

2.3

%

Bridge - equipment finance

421,939

1.8

%

460,391

2.0

%

475,548

2.0

%

Mortgage warehouse lending ("MWL")

1,018,267

4.4

%

1,145,957

4.9

%

1,259,408

5.3

%

$

22,885,074

100.0

%

$

23,361,067

100.0

%

$

23,866,042

100.0

%

Operating lease equipment, net

$

667,935

$

681,003

$

663,517

Residential and other consumer loans grew by $494 million during the quarter, including growth of $102 million in GNMA early buyout loans and $392 million of growth in the rest of the portfolio. GNMA early buyout loans totaled $1.8 billion at June 30, 2021.

Commercial and industrial loans, including owner-occupied commercial real estate, grew by $186 million for the quarter ended June 30, 2021. The remaining commercial portfolio segments showed net declines for the quarter. The New York multi-family portfolio continued to run off, declining by $225 million. MWL line utilization was 52% at June 30, 2021 compared to 55% at March 31, 2021 and 62% at December 31, 2020.

PPP loans declined by $420 million during the quarter ended June 30, 2021 as $438 million in loans originated under the First Draw Program were fully or partially forgiven. PPP loans under the Second Draw Program totaling $17 million were originated during the quarter.

Asset Quality and the Allowance for Credit Losses

The following table presents information about non-performing loans, loans on deferral and CARES Act modifications at June 30, 2021 (dollars in thousands):

Non-Performing Loans

Currently Under Short-Term Deferral

CARES Act Modification

Residential and other consumer (1)

$

45,553

$

38,584

$

20,135

Commercial:

CRE by Property Type:

Retail

21,382

15,871

Hotel

22,143

225,436

Office

5,263

1,681

43,179

Multi-family

9,602

13,872

Other

4,783

Owner occupied commercial real estate

26,582

15,223

Commercial and industrial

123,950

524

96,545

Bridge - franchise finance

33,405

25,647

Total commercial

247,110

2,205

435,773

Total

$

292,663

$

40,789

$

455,908

______________

(1)

Excludes government insured residential loans.

In the table above, "currently under short-term deferral" refers to loans subject to a 90-day payment deferral at June 30, 2021 and "CARES Act modification" refers to loans subject to longer-term modifications that, were it not for the provisions of the CARES Act, would likely have been reported as TDRs. Non-performing loans may include some loans that have been modified under the CARES Act.

Non-performing loans increased to $292.7 million or 1.28% of total loans at June 30, 2021, from $233.6 million or 1.00% of total loans at March 31, 2021 and $244.5 million or 1.02% of total loans at December 31, 2020. The increase in non-performing loans during the quarter ended June 30, 2021 was primarily attributable to one $69 million commercial and industrial relationship. Non-performing loans in the majority of portfolio sub-segments declined during the quarter ended June 30, 2021. Non-performing loans included $47.7 million, $48.2 million and $51.3 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.21%, 0.21% and 0.22% of total loans at June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

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

June 30, 2021

March 31, 2021

December 31, 2020

Special mention

$

138,064

$

420,331

$

711,516

Substandard - accruing

1,684,666

1,983,191

1,758,654

Substandard - non-accruing

229,646

189,589

203,758

Doubtful

17,332

17,903

11,867

Total

$

2,069,708

$

2,611,014

$

2,685,795

As expected, total criticized and classified loans declined during the quarter ended June 30, 2021. The increase in substandard non-accruing loans was related primarily to the commercial and industrial relationship discussed above.

The following table presents the ACL at the dates indicated, related ACL coverage ratios and net charge-off rates for the quarters ended June 30, 2021 and March 31, 2021 and the year ended December 31, 2020 (dollars in thousands):

ACL

ACL to Total Loans (1)

ACL to Non-Performing Loans

Net Charge-offs to Average Loans (2)

December 31, 2020

$

257,323

1.08

%

105.26

%

0.26

%

March 31, 2021

$

220,934

0.95

%

94.56

%

0.17

%

June 30, 2021

$

175,642

0.77

%

60.02

%

0.24

%

______________

(1)

ACL to total loans, excluding government insured residential loans, PPP loans and MWL, which carry nominal or no reserves, was 0.90%, 1.13% and 1.26% at June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

(2)

Annualized for the periods ended March 31 and June 30, 2021.

The ACL at June 30, 2021 represents management's estimate of lifetime expected credit losses given our assessment of historical data, current conditions and a reasonable and supportable economic forecast as of the balance sheet date. The estimate was informed by Moody's economic scenarios published in June 2021, economic information provided by additional sources, data reflecting the impact of recent events on individual borrowers and other relevant information. The decline in the ACL and in ACL coverage ratios from December 31, 2020 to June 30, 2021 related primarily to the recovery of credit losses recorded during the six months ended June 30, 2021 and to a lesser extent, charge-offs.

For the quarter ended June 30, 2021, the Company recorded a recovery of credit losses of $(27.5) million, which included a recovery of $(27.7) million related to funded loans, partially offset by an immaterial provision related to unfunded loan commitments. The recovery of provision for credit losses was largely driven by improvements in forecasted economic conditions, the reduction in criticized and classified loans and a reduction in certain qualitative loss factors. These impacts were partially offset by an increase in the ACL on non-performing loans, primarily an increase of $27.2 million in the reserve related to the commercial relationship discussed above.

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

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Beginning balance

$

220,934

$

250,579

$

257,323

$

108,671

Cumulative effect of adoption of CECL

27,305

Balance after adoption of CECL

220,934

250,579

257,323

135,976

Provision (recovery)

(27,663)

31,584

(53,969)

153,449

Net charge-offs

(17,629)

(16,040)

(27,712)

(23,302)

Ending balance

$

175,642

$

266,123

$

175,642

$

266,123

Net interest income

Net interest income for the quarter ended June 30, 2021 increased to $198.3 million from $196.2 million for the immediately preceding quarter ended March 31, 2021 and $190.3 million for the quarter ended June 30, 2020.

Interest income decreased by $3.6 million for the quarter ended June 30, 2021 compared to the immediately preceding quarter, and by $26.0 million compared to the quarter ended June 30, 2020. Interest expense decreased by $5.7 million compared to the immediately preceding quarter and by $34.0 million compared to the quarter ended June 30, 2020. Decreases in interest income resulted from the impact on portfolio yields of declines in market interest rates in early 2020 including the impact of repayment of assets originated in a higher rate environment and origination of assets at lower prevailing rates, as well as a decline in average loans. Declines in interest expense also reflected the impact of decreases in market interest rates, our strategy focused on lowering the cost of deposits and improving the deposit mix and declines in average interest bearing liabilities.

The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.02% to 2.37% for the quarter ended June 30, 2021, from 2.39% for both the immediately preceding quarter ended March 31, 2021 and the quarter ended June 30, 2020. The net interest margin for the quarter ended June 30, 2021 was negatively impacted by excess liquidity, reflected in higher levels of cash as well as deployment of liquidity into the investment portfolio as loan production lagged deposit growth. Offsetting factors impacting the net interest margin for the quarter ended June 30, 2021 included:

  • The average rate paid on interest bearing deposits decreased to 0.35% for the quarter ended June 30, 2021, from 0.45% for the quarter ended March 31, 2021. This decline reflected continued initiatives taken to lower rates paid on deposits including the re-pricing of term deposits.
  • The tax-equivalent yield on investment securities decreased to 1.56% for the quarter ended June 30, 2021 from 1.73% for the quarter ended March 31, 2021. This decrease resulted from the impact of purchases of lower-yielding securities coupled with amortization, maturities and prepayment of securities purchased in a higher rate environment. Accounting adjustments related to faster prepayment speeds of securities purchased at a premium negatively impacted the yield on investment securities for the quarter ended June 30, 2021 by approximately 0.10%.
  • The tax-equivalent yield on loans increased to 3.59% for the quarter ended June 30, 2021, from 3.58% for the quarter ended March 31, 2021. Accelerated amortization of origination fees on PPP loans that were partially or fully forgiven during the quarter impacted the yield on loans by approximately 0.11% for the quarter ended June 30, 2021, compared to 0.06% for the quarter ended March 31, 2021. Factoring out the impact of accelerated amortization of PPP origination fees, the yield on loans for the quarter ended June 30, 2021 decreased by 0.04% compared to the immediately preceding quarter.
  • The increase in average non-interest bearing demand deposits as a percentage of average total deposits also positively impacted the cost of total deposits and the net interest margin.

Capital Actions

On July 21, 2021, the Company's Board of Directors authorized the repurchase of up to $150 million in shares of its outstanding common stock. This authorization is in addition to $37.7 million in remaining authorization under a previously announced share repurchase program. Any repurchases under the program will be made in accordance with applicable securities laws from time to time in open market or private transactions. The extent to which the Company repurchases shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, the Company’s capital position and amount of retained earnings, regulatory requirements and other considerations. No time limit was set for the completion of the share repurchase program, and the program may be suspended or discontinued without prior notice at any time.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, July 22, 2021 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 http://www.ir.bankunited.com/. The dial in telephone number for the call is (855) 798-3052 (domestic) or (234) 386-2812 (international). The name of the call is BankUnited, Inc. and the conference ID for the call is 7297918. A replay of the call will be available from 12:00 p.m. ET on July 22nd through 11:59 p.m. ET on July 29th by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The conference ID for the replay is 7297918. An archived webcast will also be available on the Investor Relations page of www.bankunited.com.

About BankUnited, Inc.

BankUnited, Inc., with total assets of $35.7 billion at June 30, 2021, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 65 banking centers in 13 Florida counties and 4 banking centers in the New York metropolitan area at June 30, 2021.

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 the COVID-19 pandemic. 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, 2020 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,
2021

December 31,
2020

ASSETS

Cash and due from banks:

Non-interest bearing

$

17,902

$

20,233

Interest bearing

877,446

377,483

Cash and cash equivalents

895,348

397,716

Investment securities (including securities recorded at fair value of $10,222,035 and $9,166,683)

10,232,035

9,176,683

Non-marketable equity securities

164,959

195,865

Loans held for sale

24,676

Loans

22,885,074

23,866,042

Allowance for credit losses

(175,642)

(257,323)

Loans, net

22,709,432

23,608,719

Bank owned life insurance

303,519

294,629

Operating lease equipment, net

667,935

663,517

Goodwill

77,637

77,637

Other assets

649,422

571,051

Total assets

$

35,700,287

$

35,010,493

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Demand deposits:

Non-interest bearing

$

8,834,228

$

7,008,838

Interest bearing

3,218,441

3,020,039

Savings and money market

13,578,526

12,659,740

Time

2,978,074

4,807,199

Total deposits

28,609,269

27,495,816

Federal funds purchased

180,000

FHLB advances

2,681,505

3,122,999

Notes and other borrowings

721,639

722,495

Other liabilities

526,331

506,171

Total liabilities

32,538,744

32,027,481

Commitments and contingencies

Stockholders' equity:

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 93,238,553 and 93,067,500 shares issued and outstanding

932

931

Paid-in capital

1,011,786

1,017,518

Retained earnings

2,173,698

2,013,715

Accumulated other comprehensive loss

(24,873)

(49,152)

Total stockholders' equity

3,161,543

2,983,012

Total liabilities and stockholders' equity

$

35,700,287

$

35,010,493

 

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,

2021

2021

2020

2021

2020

Interest income:

Loans

$

202,520

$

205,335

$

213,938

$

407,855

$

448,297

Investment securities

37,674

38,501

50,932

76,175

106,992

Other

1,607

1,593

2,908

3,200

6,628

Total interest income

241,801

245,429

267,778

487,230

561,917

Interest expense:

Deposits

17,316

22,376

50,187

39,692

133,009

Borrowings

26,174

26,813

27,254

52,987

57,995

Total interest expense

43,490

49,189

77,441

92,679

191,004

Net interest income before provision for credit losses

198,311

196,240

190,337

394,551

370,913

Provision for (recovery of) credit losses

(27,534)

(27,989)

25,414

(55,523)

150,842

Net interest income after provision for credit losses

225,845

224,229

164,923

450,074

220,071

Non-interest income:

Deposit service charges and fees

5,417

4,900

3,701

10,317

7,887

Gain on sale of loans, net

2,234

1,754

4,326

3,988

7,792

Gain on investment securities, net

4,155

2,365

6,836

6,520

3,383

Lease financing

13,522

12,488

16,150

26,010

31,631

Other non-interest income

7,429

8,789

7,338

16,218

10,956

Total non-interest income

32,757

30,296

38,351

63,053

61,649

Non-interest expense:

Employee compensation and benefits

56,459

59,288

48,877

115,747

107,764

Occupancy and equipment

11,492

11,875

11,901

23,367

24,270

Deposit insurance expense

4,222

7,450

4,806

11,672

9,209

Professional fees

2,139

1,912

3,131

4,051

6,335

Technology and telecommunications

16,851

15,741

14,025

32,592

26,621

Depreciation of operating lease equipment

12,834

12,217

12,219

25,051

24,822

Other non-interest expense

14,455

14,738

11,411

29,193

26,217

Total non-interest expense

118,452

123,221

106,370

241,673

225,238

Income before income taxes

140,150

131,304

96,904

271,454

56,482

Provision for income taxes

36,176

32,490

20,396

68,666

10,925

Net income

$

103,974

$

98,814

$

76,508

$

202,788

$

45,557

Earnings per common share, basic

$

1.12

$

1.06

$

0.80

$

2.18

$

0.47

Earnings per common share, diluted

$

1.11

$

1.06

$

0.80

$

2.17

$

0.47

 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

Three Months Ended

June 30, 2021

Three Months Ended

March 31, 2021

Three Months Ended

June 30, 2020

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

$

22,996,564

$

205,940

3.59

%

$

23,549,309

$

208,821

3.58

%

$

23,534,684

$

217,691

3.71

%

Investment securities (3)

9,839,422

38,338

1.56

%

9,070,185

39,188

1.73

%

8,325,217

51,684

2.48

%

Other interest earning assets

1,380,317

1,607

0.47

%

1,062,840

1,593

0.61

%

765,848

2,908

1.53

%

Total interest earning assets

34,216,303

245,885

2.88

%

33,682,334

249,602

2.98

%

32,625,749

272,283

3.35

%

Allowance for credit losses

(215,151)

(254,438)

(254,396)

Non-interest earning assets

1,732,676

1,724,176

1,976,398

Total assets

$

35,733,828

$

35,152,072

$

34,347,751

Liabilities and Stockholders' Equity:

Interest bearing liabilities:

Interest bearing demand deposits

$

3,069,945

$

2,594

0.34

%

$

2,942,874

$

2,774

0.38

%

$

2,448,545

$

4,722

0.78

%

Savings and money market deposits

13,541,237

11,307

0.33

%

12,793,019

12,127

0.38

%

10,450,310

17,447

0.67

%

Time deposits

3,380,582

3,415

0.41

%

4,330,781

7,475

0.70

%

7,096,097

28,018

1.59

%

Total interest bearing deposits

19,991,764

17,316

0.35

%

20,066,674

22,376

0.45

%

19,994,952

50,187

1.01

%

Federal funds purchased

%

8,000

3

0.15

%

119,835

32

0.11

%

FHLB and PPPLF borrowings

2,873,922

16,922

2.36

%

3,072,717

17,558

2.32

%

4,961,376

21,054

1.71

%

Notes and other borrowings

721,753

9,252

5.13

%

722,305

9,252

5.12

%

493,278

6,168

5.00

%

Total interest bearing liabilities

23,587,439

43,490

0.74

%

23,869,696

49,189

0.83

%

25,569,441

77,441

1.22

%

Non-interest bearing demand deposits

8,163,879

7,491,249

5,313,009

Other non-interest bearing liabilities

851,044

746,973

820,439

Total liabilities

32,602,362

32,107,918

31,702,889

Stockholders' equity

3,131,466

3,044,154

2,644,862

Total liabilities and stockholders' equity

$

35,733,828

$

35,152,072

$

34,347,751

Net interest income

$

202,395

$

200,413

$

194,842

Interest rate spread

2.14

%

2.15

%

2.13

%

Net interest margin

2.37

%

2.39

%

2.39

%

______________

(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,

2021

2020

Average

Balance

Interest (1)

Yield/

Rate

(1)(2)

Average

Balance

Interest (1)

Yield/

Rate

(1)(2)

Assets:

Interest earning assets:

Loans

$

23,271,410

$

414,761

3.58

%

$

23,192,374

$

455,799

3.94

%

Investment securities (3)

9,456,929

77,525

1.64

%

8,216,433

108,635

2.64

%

Other interest earning assets

1,222,456

3,200

0.53

%

706,238

6,628

1.89

%

Total interest earning assets

33,950,795

495,486

2.93

%

32,115,045

571,062

3.57

%

Allowance for credit losses

(234,686)

(196,619)

Non-interest earning assets

1,728,449

1,863,074

Total assets

$

35,444,558

$

33,781,500

Liabilities and Stockholders' Equity:

Interest bearing liabilities:

Interest bearing demand deposits

$

3,006,760

5,368

0.36

%

$

2,311,086

11,681

1.02

%

Savings and money market deposits

13,169,195

23,434

0.36

%

10,431,256

55,203

1.06

%

Time deposits

3,853,057

10,890

0.57

%

7,303,083

66,125

1.82

%

Total interest bearing deposits

20,029,012

39,692

0.40

%

20,045,425

133,009

1.33

%

Federal funds purchased

3,978

2

0.10

%

106,951

399

0.75

%

FHLB and PPPLF borrowings

2,972,770

34,480

2.34

%

4,688,102

46,138

1.98

%

Notes and other borrowings

722,028

18,505

5.13

%

461,188

11,458

4.97

%

Total interest bearing liabilities

23,727,788

92,679

0.79

%

25,301,666

191,004

1.52

%

Non-interest bearing demand deposits

7,829,422

4,840,781

Other non-interest bearing liabilities

799,297

784,770

Total liabilities

32,356,507

30,927,217

Stockholders' equity

3,088,051

2,854,283

Total liabilities and stockholders' equity

$

35,444,558

$

33,781,500

Net interest income

$

402,807

$

380,058

Interest rate spread

2.14

%

2.05

%

Net interest margin

2.38

%

2.37

%

______________

(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,

2021

2020

2021

2020

Basic earnings per common share:

Numerator:

Net income

$

103,974

$

76,508

$

202,788

$

45,557

Distributed and undistributed earnings allocated to participating securities

(1,338)

(3,353)

(2,589)

(1,939)

Income allocated to common stockholders for basic earnings per common share

$

102,636

$

73,155

$

200,199

$

43,618

Denominator:

Weighted average common shares outstanding

93,245,282

92,409,949

93,160,962

93,177,243

Less average unvested stock awards

(1,241,381)

(1,207,798)

(1,223,555)

(1,154,589)

Weighted average shares for basic earnings per common share

92,003,901

91,202,151

91,937,407

92,022,654

Basic earnings per common share

$

1.12

$

0.80

$

2.18

$

0.47

Diluted earnings per common share:

Numerator:

Income allocated to common stockholders for basic earnings per common share

$

102,636

$

73,155

$

200,199

$

43,618

Adjustment for earnings reallocated from participating securities

2

3

Income used in calculating diluted earnings per common share

$

102,638

$

73,155

$

200,202

$

43,618

Denominator:

Weighted average shares for basic earnings per common share

92,003,901

91,202,151

91,937,407

92,022,654

Dilutive effect of stock options and certain shared-based awards

181,061

705

137,542

126,858

Weighted average shares for diluted earnings per common share

92,184,962

91,202,856

92,074,949

92,149,512

Diluted earnings per common share

$

1.11

$

0.80

$

2.17

$

0.47

 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Financial ratios (4)

Return on average assets

1.17

%

0.90

%

1.15

%

0.27

%

Return on average stockholders’ equity

13.3

%

11.6

%

13.2

%

3.2

%

Net interest margin (3)

2.37

%

2.39

%

2.38

%

2.37

%

June 30, 2021

December 31, 2020

Asset quality ratios

Non-performing loans to total loans (1)(5)

1.28

%

1.02

%

Non-performing assets to total assets (2)(5)

0.83

%

0.71

%

Allowance for credit losses to total loans

0.77

%

1.08

%

Allowance for credit losses to non-performing loans (1)(5)

60.02

%

105.26

%

Net charge-offs to average loans (4)

0.24

%

0.26

%

______________

(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.

(5)

Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $47.7 million or 0.21% of total loans and 0.13% of total assets, at June 30, 2021; and $51.3 million or 0.22% of total loans and 0.15% of total assets, at December 31, 2020.

 

June 30, 2021

December 31, 2020

Required to be

Considered Well Capitalized

BankUnited, Inc.

BankUnited, N.A.

BankUnited, Inc.

BankUnited, N.A.

Capital ratios

Tier 1 leverage

8.8

%

9.8

%

8.6

%

9.5

%

5.0

%

Common Equity Tier 1 ("CET1") risk-based capital

13.5

%

15.1

%

12.6

%

13.9

%

6.5

%

Total risk-based capital

15.4

%

15.7

%

14.7

%

14.8

%

10.0

%

On a fully-phased in basis with respect to the adoption of CECL, the Company's and the Bank's CET1 risk-based capital ratios would have been 13.4% and 15.0%, respectively, at June 30, 2021.

Non-GAAP Financial Measures

PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses, particularly in view of the volatility of the provision for credit losses resulting from the COVID-19 pandemic. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following table reconciles the non-GAAP financial measurement of PPNR to the comparable GAAP financial measurement of income before income taxes for the periods indicated (in thousands):

Three Months Ended

Six Months

Ended June 30,

June 30,

2021

March 31,

2021

June 30,

2020

2021

2020

Income before income taxes (GAAP)

$

140,150

$

131,304

$

96,904

$

271,454

$

56,482

Plus: Provision for (recovery of) credit losses

(27,534)

(27,989)

25,414

(55,523)

150,842

PPNR (non-GAAP)

$

112,616

$

103,315

$

122,318

$

215,931

$

207,324

ACL to total loans, excluding government insured residential loans, PPP loans and MWL is a non-GAAP financial measure. Management believes this measure is relevant to understanding the adequacy of the ACL coverage, excluding the impact of loans which carry nominal or no reserves. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions. The following table reconciles the non-GAAP financial measurement of ACL to total loans, excluding government insured residential loans, PPP loans and MWL to the comparable GAAP financial measurement of ACL to total loans at June 30, 2021, March 31, 2021 and December 31, 2020 (dollars in thousands):

June 30,

2021

March 31,

2021

December 31,

2020

Total loans (GAAP)

$

22,885,074

$

23,361,067

$

23,866,042

Less: Government insured residential loans

1,863,723

1,759,289

1,419,074

Less: PPP loans

491,960

911,951

781,811

Less: MWL

1,018,267

1,145,957

1,259,408

Total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP)

$

19,511,124

$

19,543,870

$

20,405,749

ACL

$

175,642

$

220,934

$

257,323

ACL to total loans (GAAP)

0.77

%

0.95

%

1.08

%

ACL to total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP)

0.90

%

1.13

%

1.26

%

 

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, 2021

December 31, 2020

Total stockholders’ equity (GAAP)

$

3,161,543

$

2,983,012

Less: goodwill

77,637

77,637

Tangible stockholders’ equity (non-GAAP)

$

3,083,906

$

2,905,375

Common shares issued and outstanding

93,238,553

93,067,500

Book value per common share (GAAP)

$

33.91

$

32.05

Tangible book value per common share (non-GAAP)

$

33.08

$

31.22

Contacts:

BankUnited, Inc.
Investor Relations:
Leslie N. Lunak, 786-313-1698
llunak@bankunited.com

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