MIAMI LAKES, Fla.--(BUSINESS WIRE)--BankUnited, Inc. (the “Company”) (NYSE:BKU) today announced financial results for the quarter ended June 30, 2018.
For the quarter ended June 30, 2018, the Company reported net income of $89.9 million, or $0.82 per diluted share compared to $66.4 million, or $0.60 per diluted share, for the quarter ended June 30, 2017, a 37% increase in diluted earnings per share. For the six months ended June 30, 2018, the Company reported net income of $175.1 million, or $1.59 per diluted share, compared to $128.7 million, or $1.17 per diluted share, for the six months ended June 30, 2017.
The annualized return on average stockholders’ equity for the six months ended June 30, 2018 was 11.49% compared to 10.21% for the six months ended June 30, 2017, while the annualized return on average assets was 1.16% compared to 0.93% for the same periods.
Rajinder Singh, President and Chief Executive Officer, said, "BankUnited turned in another solid quarter from an earnings standpoint; reported EPS increased 37% over the comparable quarter of the prior year. We also had some excellent news from Moody's Investor Service, who recently upgraded the Company's issuer rating."
Performance Highlights
- Net interest income increased by $15.7 million to $255.3 million for the quarter ended June 30, 2018 from $239.6 million for the quarter ended June 30, 2017. Interest income increased by $50.0 million, driven by increases in the average balances of loans and investment securities outstanding as well as increases in yields on interest earning assets. Interest expense increased by $34.3 million, driven primarily by increases in average interest bearing deposits and an increase in the cost of interest bearing liabilities. For the six months ended June 30, 2018, net interest income increased by $32.9 million to $503.1 million from $470.2 million for the six months ended June 30, 2017.
- The net interest margin, calculated on a tax-equivalent basis, was 3.60% for the quarter ended June 30, 2018 compared to 3.56% for the immediately preceding quarter ended March 31, 2018 and 3.76% for the quarter ended June 30, 2017. Significant factors contributing to the decline in the net interest margin from the comparable quarter of the prior year were (i) an increase in the cost of interest bearing liabilities; (ii) the impact on tax equivalent yields of the reduction in the statutory federal income tax rate; and (iii) although yields on all categories of interest earning assets increased, non-covered loans and investment securities were added to the balance sheet at yields lower than the existing yield on earning assets, which is impacted by the yield on covered loans.
- Non-covered loans and leases, including equipment under operating lease, grew by $431 million during the quarter. For the six months ended June 30, 2018, non-covered loans and leases grew by $497 million.
- For the quarter ended June 30, 2018, total deposits declined by $62 million. Total deposits increased by $299 million for the six months ended June 30, 2018. Growth in non-interest bearing demand deposits accounted for $245 million of this increase.
- Book value per common share grew to $29.17 at June 30, 2018 from $28.32 at December 31, 2017 while tangible book value per common share increased to $28.44 from $27.59 over the same period.
- During the six months ended June 30, 2018, under the terms of the share repurchase program authorized by its Board of Directors, the Company repurchased 1.3 million shares of its common stock for an aggregate purchase price of $54.4 million. During the quarter ended June 30, 2018, the Company repurchased 0.1 million shares for an aggregate purchase price of $5.8 million.
- In July 2018 Moody's Investor Service upgraded the Company and BankUnited, N.A.'s issuer rating to Baa3 from Ba1.
Capital
The Company and its banking subsidiary continue to exceed all regulatory guidelines required to be considered well capitalized. The Company’s and BankUnited, N.A.'s regulatory capital ratios at June 30, 2018 were as follows:
| BankUnited, Inc. | BankUnited, N.A. | |||||
| Tier 1 leverage | 9.7% | 10.2% | ||||
| Common Equity Tier 1 ("CET1") risk-based capital | 13.4% | 14.1% | ||||
| Tier 1 risk-based capital | 13.4% | 14.1% | ||||
| Total risk-based capital | 14.0% | 14.7% | ||||
Loans and Leases
Loans, including premiums, discounts and deferred fees and costs, totaled $21.9 billion at June 30, 2018 compared to $21.4 billion at December 31, 2017. Non-covered loans grew to $21.4 billion while covered loans declined to $451 million at June 30, 2018.
For the quarter ended June 30, 2018, non-covered commercial loans, including commercial real estate loans, commercial and industrial loans, and loans and leases originated by our commercial lending subsidiaries, grew by $342 million to $17.6 billion. Non-covered residential and other consumer loans grew by $88 million to $4.4 billion during the second quarter of 2018.
The Company's national platforms and the Florida franchise contributed net non-covered loan growth of $280 million and $301 million, respectively, for the quarter ended June 30, 2018, while balances for the New York franchise declined by $150 million. We refer to our commercial lending subsidiaries, our mortgage warehouse lending operations, the small business finance unit and our residential loan purchase program as national platforms. The most significant contributors to growth across the national platforms were mortgage warehouse lending at $104 million, residential at $89 million and commercial lending subsidiaries at $94 million. Growth in the Florida franchise was primarily driven by C&I and owner occupied real estate loans, which grew by $305 million, partially offset by declines across other portfolio segments. The decline in New York was due to a $215 million decline in the multi-family category, partially offset by net growth of $65 million across other portfolio segments. At June 30, 2018, the non-covered loan portfolio included $7.7 billion, $5.8 billion and $7.9 billion attributable to the Florida franchise, the New York franchise and the national platforms, respectively.
A comparison of loan portfolio composition at the dates indicated follows:
| Non-Covered Loans | Total Loans | |||||||
| June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 |
|||||
| Residential and other consumer loans | 20.6% | 19.8% | 22.2% | 21.7% | ||||
| Multi-family | 13.4% | 15.4% | 13.1% | 15.0% | ||||
| Non-owner occupied commercial real estate | 21.2% | 21.5% | 20.7% | 21.0% | ||||
| Construction and land | 1.2% | 1.5% | 1.2% | 1.5% | ||||
| Owner occupied commercial real estate | 9.6% | 9.7% | 9.4% | 9.4% | ||||
| Commercial and industrial | 21.5% | 19.9% | 21.1% | 19.4% | ||||
| Commercial lending subsidiaries | 12.5% | 12.2% | 12.3% | 12.0% | ||||
| 100.0% | 100.0% | 100.0% | 100.0% | |||||
Asset Quality and Allowance for Loan and Lease Losses
For the quarters ended June 30, 2018 and 2017, the Company recorded provisions for loan losses of $9.0 million and $13.6 million, respectively, substantially all of which related to non-covered loans. For the six months ended June 30, 2018 and 2017, the Company recorded provisions for loan losses of $12.1 million and $25.7 million, respectively, substantially all of which related to non-covered loans. The provision related to taxi medallion loans totaled $11.1 million and $7.4 million for the quarters ended June 30, 2018 and 2017, respectively and $14.0 million and $16.9 million for the six months ended June 30, 2018 and 2017, respectively.
Significant offsetting factors impacting the decrease in the provision for loan losses related to non-covered loans for the quarter ended June 30, 2018 as compared to the quarter ended June 30, 2017 were (i) lower loan growth and (ii) a net decrease in reserves related to certain qualitative factors; partially offset by (iii) an increase in the provision related to taxi medallion loans; (iv) an increase in the provision related to specific reserves for other loans; and (v) the relative impact on the provision of changes in quantitative loss factors.
Significant offsetting factors impacting the decrease in the provision for loan losses related to non-covered loans for the six months ended June 30, 2018 as compared to the six months ended June 30, 2017 were (i) lower loan growth; (ii) a decrease in the provision related to taxi medallion loans and (iii) a net decrease in the relative impact on the provision of changes in qualitative loss factors; partially offset by (iv) the relative impact on the provision of changes in quantitative loss factors.
Non-covered, non-performing loans totaled $186.4 million or 0.87% of total non-covered loans at June 30, 2018, compared to $172.0 million or 0.82% of total non-covered loans at December 31, 2017. Non-performing taxi medallion loans comprised $87.2 million or 0.41% of total non-covered loans at June 30, 2018 and $106.1 million or 0.51% of total non-covered loans at December 31, 2017. At June 30, 2018 and December 31, 2017, the entire taxi medallion portfolio was on non-accrual status.
The ratios of the allowance for non-covered loan and lease losses to total non-covered loans and to non-performing, non-covered loans were 0.63% and 72.11%, respectively, at June 30, 2018, compared to 0.69% and 84.03%, at December 31, 2017. The decrease in the ratio of the allowance for non-covered loan and lease losses to non-performing, non-covered loans was primarily a result of the increase in non-accrual multi-family loans during the six months ended June 30, 2018 and charge-offs, related primarily to taxi medallion loans. The annualized ratio of net charge-offs to average non-covered loans was 0.21% for the six months ended June 30, 2018, compared to 0.38% for the year ended December 31, 2017. The annualized ratio of charge-offs of taxi medallion loans to average non-covered loans was 0.13% for the six months ended June 30, 2018, compared to 0.29% for the year ended December 31, 2017.
The following table summarizes the activity in the allowance for loan and lease losses for the periods indicated (in thousands):
| Three Months Ended June 30, 2018 | Three Months Ended June 30, 2017 | |||||||||||||||||||||||||||||||
|
ACI Loans |
Non-ACI Loans |
Non-Covered Loans |
Total |
ACI Loans |
Non-ACI Loans |
Non-Covered Loans |
Total | |||||||||||||||||||||||||
| Balance at beginning of period | $ | — | $ | 518 | $ | 136,958 | $ | 137,476 | $ | 831 | $ | 2,058 | $ | 148,392 | $ | 151,281 | ||||||||||||||||
| Provision | — | 294 | 8,701 | 8,995 | 981 | 672 | 11,966 | 13,619 | ||||||||||||||||||||||||
| Charge-offs | — | (224 | ) | (12,044 | ) | (12,268 | ) | — | — | (10,237 | ) | (10,237 | ) | |||||||||||||||||||
| Recoveries | — | 2 | 766 | 768 | — | 7 | 978 | 985 | ||||||||||||||||||||||||
| Balance at end of period | $ | — | $ | 590 | $ | 134,381 | $ | 134,971 | $ | 1,812 | $ | 2,737 | $ | 151,099 | $ | 155,648 | ||||||||||||||||
| Six Months Ended June 30, 2018 | Six Months Ended June 30, 2017 | |||||||||||||||||||||||||||||||
|
ACI Loans |
Non-ACI Loans |
Non-Covered Loans |
Total |
ACI Loans |
Non-ACI Loans |
Non-Covered Loans |
Total | |||||||||||||||||||||||||
| Balance at beginning of period | $ | — | $ | 258 | $ | 144,537 | $ | 144,795 | $ | — | $ | 2,100 | $ | 150,853 | $ | 152,953 | ||||||||||||||||
| Provision | — | 567 | 11,575 | 12,142 | 1,812 | 620 | 23,287 | 25,719 | ||||||||||||||||||||||||
| Charge-offs | — | (239 | ) | (22,661 | ) | (22,900 | ) | — | (55 | ) | (25,006 | ) | (25,061 | ) | ||||||||||||||||||
| Recoveries | — | 4 | 930 | 934 | — | 72 | 1,965 | 2,037 | ||||||||||||||||||||||||
| Balance at end of period | $ | — | $ | 590 | $ | 134,381 | $ | 134,971 | $ | 1,812 | $ | 2,737 | $ | 151,099 | $ | 155,648 | ||||||||||||||||
Charge-offs related to taxi medallion loans totaled $8.1 million and $5.9 million for the quarters ended June 30, 2018 and 2017, respectively, and $13.5 million and $11.8 million for the six months ended June 30, 2018 and 2017.
Deposits
At June 30, 2018, deposits totaled $22.2 billion compared to $21.9 billion at December 31, 2017. The average cost of total deposits was 1.19% for the quarter ended June 30, 2018, compared to 1.04% for the immediately preceding quarter ended March 31, 2018, and 0.79% for the quarter ended June 30, 2017. The average cost of total deposits was 1.12% for the six months ended June 30, 2018, compared to 0.76% for the six months ended June 30, 2017.
Net interest income
Net interest income for the quarter ended June 30, 2018 increased to $255.3 million from $239.6 million for the quarter ended June 30, 2017. Net interest income was $503.1 million for the six months ended June 30, 2018, compared to $470.2 million for the six months ended June 30, 2017. Increases in interest income were partially offset by increases in interest expense. The increases in interest income were primarily attributable to increases in the average balances of loans and investment securities and related average yields. Interest expense increased due to increases in average interest bearing deposits and the cost of funds.
The Company’s net interest margin, calculated on a tax-equivalent basis, was 3.60% for the quarter ended June 30, 2018, compared to 3.56% for the immediately preceding quarter ended March 31, 2018 and 3.76% for the quarter ended June 30, 2017. Net interest margin, calculated on a tax-equivalent basis, was 3.58% for the six months ended June 30, 2018, compared to 3.73% for the six months ended June 30, 2017.
Significant offsetting factors impacting the declines in net interest margin for the quarter and six months ended June 30, 2018, compared to the quarter and six months ended June 30, 2017, included:
- The tax-equivalent yield on loans increased to 5.43% and 5.35%, respectively, for the quarter and six months ended June 30, 2018, compared to 5.24% and 5.15% for the quarter and six months ended June 30, 2017, reflecting increased yields on both non-covered and covered loans.
- The tax-equivalent yield on non-covered loans was 3.96% and 3.89%, respectively, for the quarter and the six months ended June 30, 2018, compared to 3.78% and 3.70% for the quarter and six months ended June 30, 2017. The most significant factor contributing to the increased yield on non-covered loans was the impact of increases in benchmark interest rates.
- The tax-equivalent yield on covered loans increased to 70.82% and 67.96%, respectively, for the quarter and six months ended June 30, 2018 from 54.51% and 52.10% for the quarter and six months ended June 30, 2017.
- The tax-equivalent yield on investment securities increased to 3.33% and 3.19%, respectively, for the quarter and six months ended June 30, 2018 from 3.05% and 3.03% for the quarter and six months ended June 30, 2017.
- Tax-equivalent yields on non-covered loans and investment securities and the net interest margin were each negatively impacted by approximately 0.08% for the quarter ended June 30, 2018 as compared to the quarter ended June 30, 2017 as a result of the reduction in the statutory federal income tax rate. For the six months ended June 30, 2018 as compared to the six months ended June 30, 2017, the tax rate change negatively impacted the net interest margin by approximately 0.08%.
- Growth of non-covered loans and investment securities at yields lower than the overall yield on interest earning assets.
- The average rate on interest bearing liabilities increased to 1.58% and 1.48%, respectively for the quarter and six months ended June 30, 2018, from 1.07% and 1.03% for the quarter and six months ended June 30, 2017, reflecting higher average rates on both interest bearing deposits and FHLB advances. Increases in the cost of interest bearing liabilities primarily reflect increases in market interest rates and extension of the duration of FHLB advances.
The Company’s net interest margin continues to be impacted by reclassifications from non-accretable difference to accretable yield on ACI loans. Non-accretable difference at acquisition represented the difference between the total contractual payments due and the cash flows expected to be received on these loans. The accretable yield on ACI loans represented the amount by which undiscounted expected future cash flows exceeded the recorded investment in the loans. As the Company’s expected cash flows from ACI loans have increased since the FSB Acquisition, the Company has reclassified amounts from non-accretable difference to accretable yield, resulting in increases in the yield on covered loans.
Changes in accretable yield on ACI loans for the six months ended June 30, 2018 and the year ended December 31, 2017 were as follows (in thousands):
| Balance, December 31, 2016 | $ | 675,385 | |||||||
| Reclassifications from non-accretable difference, net | 81,501 | ||||||||
| Accretion | (301,827 | ) | |||||||
| Balance, December 31, 2017 | 455,059 | ||||||||
| Reclassifications from non-accretable difference, net | 60,490 | ||||||||
| Accretion | (167,761 | ) | |||||||
| Balance, June 30, 2018 | $ | 347,788 | |||||||
Non-interest expense
Non-interest expense totaled $161.2 million and $323.1 million, respectively, for the quarter and six months ended June 30, 2018 compared to $160.4 million and $317.0 million for the quarter and six months ended June 30, 2017. The most significant components of non-interest expense are employee compensation and benefits and amortization of the FDIC indemnification asset. Employee compensation and benefits increased by $5.1 million and $12.5 million for the quarter and six months ended June 30, 2018, compared to the quarter and six months ended June 30, 2017, mainly due to an increase in the number of employees and compensation increases.
Amortization of the FDIC indemnification asset was $44.3 million and $84.6 million, respectively, for the quarter and six months ended June 30, 2018, compared to $45.7 million and $90.1 million for the quarter and six months ended June 30, 2017. The amortization rate increased to 76.79% and 66.78% for the quarter and six months ended June 30, 2018 from 41.76% and 38.92% for the quarter and six months ended June 30, 2017. As the expected cash flows from ACI loans have increased, expected cash flows from the FDIC indemnification asset have decreased, resulting in continued increases in the amortization rate. Although the amortization rate increased, total amortization expense declined due to the reduction in the average balance of the indemnification asset. At June 30, 2018, total future estimated amortization of the FDIC indemnification asset is approximately $104 million.
Provision for income taxes
The effective income tax rate was 23.2% and 23.1% for the quarter and six months ended June 30, 2018, compared to 30.4% and 30.6% for the quarter and six months ended June 30, 2017. These declines in the effective income tax rate were primarily attributable to the reduction of the statutory corporate federal income tax rate from 35% to 21%, effective January 1, 2018.
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 base for comparison to other financial institutions. 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 June 30, 2018 (in thousands except share and per share data):
| Total stockholders’ equity | $ | 3,099,433 | |||||||
| Less: goodwill and other intangible assets | 77,740 | ||||||||
| Tangible stockholders’ equity | $ | 3,021,693 | |||||||
| Common shares issued and outstanding | 106,241,116 | ||||||||
| Book value per common share | $ | 29.17 | |||||||
| Tangible book value per common share | $ | 28.44 | |||||||
Earnings Conference Call and Presentation
A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, July 24, 2018 with President and Chief Executive Officer, Rajinder P. Singh, and Chief Financial Officer, Leslie N. Lunak.
The earnings release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. The call may be accessed via a live Internet webcast at www.bankunited.com or through a dial in telephone number at (855) 798-3052 (domestic) or (234) 386-2812 (international). The name of the call is BankUnited, Inc. and the confirmation number for the call is 5775838. A replay of the call will be available from 12:00 p.m. ET on July 24th through 11:59 p.m. ET on July 31st by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The pass code for the replay is 5775838. An archived webcast will also be available on the Investor Relations page of www.bankunited.com.
About BankUnited, Inc. and the FSB Acquisition
BankUnited, Inc., with total assets of $31.3 billion at June 30, 2018, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 87 banking centers in 15 Florida counties and 5 banking centers in the New York metropolitan area at June 30, 2018.
On May 21, 2009, BankUnited acquired substantially all of the assets and assumed all of the non-brokered deposits and substantially all other liabilities of BankUnited, FSB from the FDIC, in a transaction referred to as the FSB Acquisition. Concurrently with the FSB Acquisition, BankUnited entered into two loss sharing agreements, or the Loss Sharing Agreements, which covered certain legacy assets, including the entire legacy loan portfolio and OREO, and certain purchased investment securities. Assets covered by the Loss Sharing Agreements are referred to as “covered assets” (or, in certain cases, “covered loans”). The Loss Sharing Agreements do not apply to subsequently purchased or originated loans or other assets. Effective May 22, 2014 and consistent with the terms of the Loss Sharing Agreements, loss share coverage was terminated for those commercial loans and OREO and certain investment securities that were previously covered under the Loss Sharing Agreements. Pursuant to the terms of the Loss Sharing Agreements, the covered assets are subject to a stated loss threshold whereby the FDIC will reimburse BankUnited for 80% of losses, including certain interest and expenses, up to the $4.0 billion stated threshold and 95% of losses in excess of the $4.0 billion stated threshold. The Company’s current estimate of cumulative losses on the covered assets is approximately $3.5 billion. The Company has received $2.7 billion from the FDIC in reimbursements under the Loss Sharing Agreements for claims filed for incurred losses as of June 30, 2018.
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” 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. 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, 2017 which is 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, 2018 |
December 31, 2017 |
||||||||
| ASSETS | |||||||||
| Cash and due from banks: | |||||||||
| Non-interest bearing | $ | 10,937 | $ | 35,246 | |||||
| Interest bearing | 368,319 | 159,336 | |||||||
| Cash and cash equivalents | 379,256 | 194,582 | |||||||
| Investment securities (including securities recorded at fair value of $7,093,068 and $6,680,832) | 7,103,068 | 6,690,832 | |||||||
| Non-marketable equity securities | 278,739 | 265,989 | |||||||
| Loans held for sale | 46,829 | 34,097 | |||||||
| Loans (including covered loans of $451,350 and $503,118) | 21,869,723 | 21,416,504 | |||||||
| Allowance for loan and lease losses | (134,971 | ) | (144,795 | ) | |||||
| Loans, net | 21,734,752 | 21,271,709 | |||||||
| FDIC indemnification asset | 200,783 | 295,635 | |||||||
| Bank owned life insurance | 261,758 | 252,462 | |||||||
| Equipment under operating lease, net | 591,267 | 599,502 | |||||||
| Goodwill and other intangible assets | 77,740 | 77,796 | |||||||
| Other assets | 675,379 | 664,382 | |||||||
| Total assets | $ | 31,349,571 | $ | 30,346,986 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
| Liabilities: | |||||||||
| Demand deposits: | |||||||||
| Non-interest bearing | $ | 3,315,550 | $ | 3,071,032 | |||||
| Interest bearing | 1,621,940 | 1,757,581 | |||||||
| Savings and money market | 10,590,438 | 10,715,024 | |||||||
| Time | 6,650,022 | 6,334,842 | |||||||
| Total deposits | 22,177,950 | 21,878,479 | |||||||
| Federal Home Loan Bank advances | 5,071,000 | 4,771,000 | |||||||
| Notes and other borrowings | 402,799 | 402,830 | |||||||
| Other liabilities | 598,389 | 268,615 | |||||||
| Total liabilities | 28,250,138 | 27,320,924 | |||||||
| Commitments and contingencies | |||||||||
| Stockholders' equity: | |||||||||
| Common stock, par value $0.01 per share, 400,000,000 shares authorized; 106,241,116 and | |||||||||
| 106,848,185 shares issued and outstanding | 1,062 | 1,068 | |||||||
| Paid-in capital | 1,455,554 | 1,498,227 | |||||||
| Retained earnings | 1,592,157 | 1,471,781 | |||||||
| Accumulated other comprehensive income | 50,660 | 54,986 | |||||||
| Total stockholders' equity | 3,099,433 | 3,026,062 | |||||||
| Total liabilities and stockholders' equity | $ | 31,349,571 | $ | 30,346,986 | |||||
| BANKUNITED, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Interest income: | ||||||||||||||||
| Loans | $ | 288,264 | $ | 249,409 | $ | 562,264 | $ | 485,771 | ||||||||
| Investment securities | 56,092 | 46,054 | 106,077 | 89,773 | ||||||||||||
| Other | 4,499 | 3,372 | 8,290 | 6,829 | ||||||||||||
| Total interest income | 348,855 | 298,835 | 676,631 | 582,373 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 65,298 | 39,514 | 121,659 | 74,242 | ||||||||||||
| Borrowings | 28,294 | 19,732 | 51,900 | 37,949 | ||||||||||||
| Total interest expense | 93,592 | 59,246 | 173,559 | 112,191 | ||||||||||||
| Net interest income before provision for loan losses | 255,263 | 239,589 | 503,072 | 470,182 | ||||||||||||
| Provision for loan losses (including $294, $1,653, $567 | ||||||||||||||||
| and $2,432 for covered loans) | 8,995 | 13,619 | 12,142 | 25,719 | ||||||||||||
| Net interest income after provision for loan losses | 246,268 | 225,970 | 490,930 | 444,463 | ||||||||||||
| Non-interest income: | ||||||||||||||||
| Income from resolution of covered assets, net | 4,238 | 8,361 | 7,555 | 15,666 | ||||||||||||
| Net loss on FDIC indemnification | (1,400 | ) | (2,588 | ) | (5,015 | ) | (9,336 | ) | ||||||||
| Deposit service charges and fees | 3,510 | 3,252 | 6,997 | 6,455 | ||||||||||||
| Gain (loss) on sale of loans, net (including $(2,002), | ||||||||||||||||
| $(3,447), $(298) and $(1,565) related to covered loans) | 768 | (404 | ) | 4,269 | 4,154 | |||||||||||
| Gain on investment securities, net | 2,142 | 627 | 2,506 | 2,263 | ||||||||||||
| Lease financing | 17,492 | 13,141 | 31,594 | 26,780 | ||||||||||||
| Other non-interest income | 5,223 | 7,504 | 12,053 | 12,055 | ||||||||||||
| Total non-interest income | 31,973 | 29,893 | 59,959 | 58,037 | ||||||||||||
| Non-interest expense: | ||||||||||||||||
| Employee compensation and benefits | 65,537 | 60,388 | 132,573 | 120,059 | ||||||||||||
| Occupancy and equipment | 18,985 | 19,251 | 37,817 | 37,860 | ||||||||||||
| Amortization of FDIC indemnification asset | 44,250 | 45,663 | 84,597 | 90,126 | ||||||||||||
| Deposit insurance expense | 4,623 | 5,588 | 9,435 | 11,063 | ||||||||||||
| Professional fees | 2,657 | 4,785 | 5,532 | 9,825 | ||||||||||||
| Telecommunications and data processing | 3,900 | 3,745 | 7,585 | 7,029 | ||||||||||||
| Depreciation of equipment under operating lease | 9,476 | 8,733 | 18,792 | 16,750 | ||||||||||||
| Other non-interest expense | 11,819 | 12,282 | 26,733 | 24,280 | ||||||||||||
| Total non-interest expense | 161,247 | 160,435 | 323,064 | 316,992 | ||||||||||||
| Income before income taxes | 116,994 | 95,428 | 227,825 | 185,508 | ||||||||||||
| Provision for income taxes | 27,094 | 29,021 | 52,690 | 56,808 | ||||||||||||
| Net income | $ | 89,900 | $ | 66,407 | $ | 175,135 | $ | 128,700 | ||||||||
| Earnings per common share, basic | $ | 0.82 | $ | 0.60 | $ | 1.60 | $ | 1.18 | ||||||||
| Earnings per common share, diluted | $ | 0.82 | $ | 0.60 | $ | 1.59 | $ | 1.17 | ||||||||
| Cash dividends declared per common share | $ | 0.21 | $ | 0.21 | $ | 0.42 | $ | 0.42 | ||||||||
| BANKUNITED, INC. AND SUBSIDIARIES | |||||||||||||||||||||
| AVERAGE BALANCES AND YIELDS | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||
|
Average
Balance |
Interest (1) |
Yield/
Rate (1)(2) |
Average
Balance |
Interest (1) |
Yield/ Rate (1)(2) |
||||||||||||||||
| Assets: | |||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||
| Non-covered loans | $ | 21,117,897 | $ | 208,415 | 3.96% | $ | 19,063,873 | $ | 180,015 | 3.78% | |||||||||||
| Covered loans | 475,568 | 84,200 | 70.82% | 562,049 | 76,588 | 54.51% | |||||||||||||||
| Total loans | 21,593,465 | 292,615 | 5.43% | 19,625,922 | 256,603 | 5.24% | |||||||||||||||
| Investment securities (3) | 6,902,634 | 57,444 | 3.33% | 6,445,336 | 49,205 | 3.05% | |||||||||||||||
| Other interest earning assets | 484,087 | 4,499 | 3.73% | 555,755 | 3,372 | 2.43% | |||||||||||||||
| Total interest earning assets | 28,980,186 | 354,558 | 4.90% | 26,627,013 | 309,180 | 4.65% | |||||||||||||||
| Allowance for loan and lease losses | (140,223 | ) | (154,745 | ) | |||||||||||||||||
| Non-interest earning assets | 1,912,471 | 1,754,208 | |||||||||||||||||||
| Total assets | $ | 30,752,434 | $ | 28,226,476 | |||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||
| Interest bearing demand deposits | $ | 1,621,161 | 4,195 | 1.04% | $ | 1,537,017 | 2,814 | 0.73% | |||||||||||||
| Savings and money market deposits | 10,553,624 | 33,317 | 1.27% | 9,438,586 | 18,356 | 0.78% | |||||||||||||||
| Time deposits | 6,475,569 | 27,786 | 1.72% | 5,996,229 | 18,344 | 1.23% | |||||||||||||||
| Total interest bearing deposits | 18,650,354 | 65,298 | 1.40% | 16,971,832 | 39,514 | 0.93% | |||||||||||||||
| FHLB advances | 4,761,659 | 22,988 | 1.94% | 4,795,809 | 14,417 | 1.21% | |||||||||||||||
| Notes and other borrowings | 402,805 | 5,306 | 5.27% | 402,818 | 5,315 | 5.28% | |||||||||||||||
| Total interest bearing liabilities | 23,814,818 | 93,592 | 1.58% | 22,170,459 | 59,246 | 1.07% | |||||||||||||||
| Non-interest bearing demand deposits | 3,315,851 | 3,025,018 | |||||||||||||||||||
| Other non-interest bearing liabilities | 536,800 | 451,967 | |||||||||||||||||||
| Total liabilities | 27,667,469 | 25,647,444 | |||||||||||||||||||
| Stockholders' equity | 3,084,965 | 2,579,032 | |||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 30,752,434 | $ | 28,226,476 | |||||||||||||||||
| Net interest income | $ | 260,966 | $ | 249,934 | |||||||||||||||||
| Interest rate spread | 3.32% | 3.58% | |||||||||||||||||||
| Net interest margin | 3.60% | 3.76% | |||||||||||||||||||
(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, | ||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||
|
Average Balance |
Interest (1) |
Yield/ Rate (1)(2) |
Average Balance |
Interest (1) |
Yield/ Rate (1)(2) |
|||||||||||||||
| Assets: | ||||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||
| Non-covered loans | $ | 20,951,864 | $ | 405,293 | 3.89% | $ | 18,894,681 | $ | 347,998 | 3.70% | ||||||||||
| Covered loans | 487,070 | 165,509 | 67.96% | 582,744 | 151,742 | 52.10% | ||||||||||||||
| Total loans | 21,438,934 | 570,802 | 5.35% | 19,477,425 | 499,740 | 5.15% | ||||||||||||||
| Investment securities (3) | 6,837,901 | 108,967 | 3.19% | 6,349,434 | 96,291 | 3.03% | ||||||||||||||
| Other interest earning assets | 501,376 | 8,291 | 3.33% | 563,926 | 6,829 | 2.44% | ||||||||||||||
| Total interest earning assets | 28,778,211 | 688,060 | 4.80% | 26,390,785 | 602,860 | 4.58% | ||||||||||||||
| Allowance for loan and lease losses | (142,706 | ) | (155,380 | ) | ||||||||||||||||
| Non-interest earning assets | 1,928,486 | 1,782,243 | ||||||||||||||||||
| Total assets | $ | 30,563,991 | $ | 28,017,648 | ||||||||||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||
| Interest bearing demand deposits | $ | 1,610,643 | 8,352 | 1.05% | $ | 1,551,025 | 5,499 | 0.71% | ||||||||||||
| Savings and money market deposits | 10,675,768 | 62,371 | 1.18% | 9,349,203 | 33,777 | 0.73% | ||||||||||||||
| Time deposits | 6,395,299 | 50,936 | 1.61% | 5,835,121 | 34,966 | 1.21% | ||||||||||||||
| Total interest bearing deposits | 18,681,710 | 121,659 | 1.31% | 16,735,349 | 74,242 | 0.89% | ||||||||||||||
| FHLB advances | 4,611,359 | 41,285 | 1.81% | 4,871,917 | 27,316 | 1.13% | ||||||||||||||
| Notes and other borrowings | 402,822 | 10,615 | 5.27% | 402,818 | 10,633 | 5.28% | ||||||||||||||
| Total interest bearing liabilities | 23,695,891 | 173,559 | 1.48% | 22,010,084 | 112,191 | 1.03% | ||||||||||||||
| Non-interest bearing demand deposits | 3,306,238 | 3,033,989 | ||||||||||||||||||
| Other non-interest bearing liabilities | 487,313 | 430,567 | ||||||||||||||||||
| Total liabilities | 27,489,442 | 25,474,640 | ||||||||||||||||||
| Stockholders' equity | 3,074,549 | 2,543,008 | ||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 30,563,991 | $ | 28,017,648 | ||||||||||||||||
| Net interest income | $ | 514,501 | $ | 490,669 | ||||||||||||||||
| Interest rate spread | 3.32% | 3.55% | ||||||||||||||||||
| Net interest margin | 3.58% | 3.73% | ||||||||||||||||||
(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, | |||||||||||||||
|
|
2018 | 2017 | 2018 | 2017 | ||||||||||||
| Basic earnings per common share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Net income | $ | 89,900 | $ | 66,407 | $ | 175,135 | $ | 128,700 | ||||||||
| Distributed and undistributed earnings allocated to | ||||||||||||||||
| participating securities | (3,463 |
) |
(2,483 | ) | (6,676 | ) | (4,805 | ) | ||||||||
| Income allocated to common stockholders for basic | ||||||||||||||||
| earnings per common share | $ | 86,437 | $ | 63,924 | $ | 168,459 | $ | 123,895 | ||||||||
| Denominator: | ||||||||||||||||
| Weighted average common shares outstanding | 106,170,834 | 106,827,077 | 106,347,378 | 106,325,244 | ||||||||||||
| Less average unvested stock awards | (1,222,436 | ) | (1,144,135 | ) | (1,165,750 | ) | (1,102,836 | ) | ||||||||
| Weighted average shares for basic earnings per common | ||||||||||||||||
| share | 104,948,398 | 105,682,942 | 105,181,628 | 105,222,408 | ||||||||||||
| Basic earnings per common share | $ | 0.82 | $ | 0.60 | $ | 1.60 | $ | 1.18 | ||||||||
| Diluted earnings per common share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Income allocated to common stockholders for basic earnings | ||||||||||||||||
| per common share | $ | 86,437 | $ | 63,924 | $ | 168,459 | $ | 123,895 | ||||||||
| Adjustment for earnings reallocated from participating | ||||||||||||||||
| securities | 12 | 7 | 23 | 15 | ||||||||||||
| Income used in calculating diluted earnings per common | ||||||||||||||||
| share | $ | 86,449 | $ | 63,931 | $ | 168,482 | $ | 123,910 | ||||||||
| Denominator: | ||||||||||||||||
| Weighted average shares for basic earnings per common | ||||||||||||||||
| share | 104,948,398 | 105,682,942 | 105,181,628 | 105,222,408 | ||||||||||||
| Dilutive effect of stock options and executive share-based | ||||||||||||||||
| awards | 522,997 | 455,135 | 519,598 | 537,491 | ||||||||||||
| Weighted average shares for diluted earnings per common | ||||||||||||||||
| share | 105,471,395 | 106,138,077 | 105,701,226 | 105,759,899 | ||||||||||||
| Diluted earnings per common share | $ | 0.82 | $ | 0.60 | $ | 1.59 | $ | 1.17 | ||||||||
| BANKUNITED, INC. AND SUBSIDIARIES | ||||||||
| SELECTED RATIOS | ||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| Financial ratios (5) | ||||||||
| Return on average assets | 1.17% | 0.94% | 1.16% | 0.93% | ||||
| Return on average stockholders’ equity | 11.69% | 10.33% | 11.49% | 10.21% | ||||
| Net interest margin (4) | 3.60% | 3.76% | 3.58% | 3.73% | ||||
| June 30, 2018 | December 31, 2017 | |||||||
|
Non- Covered |
Total |
Non- Covered |
Total | |||||
| Asset quality ratios | ||||||||
| Non-performing loans to total loans (1) (3) | 0.87% | 0.86% | 0.82% | 0.81% | ||||
| Non-performing assets to total assets (2) | 0.62% | 0.65% | 0.60% | 0.61% | ||||
| Allowance for loan and lease losses to total loans (3) | 0.63% | 0.62% | 0.69% | 0.68% | ||||
| Allowance for loan and lease losses to non-performing loans (1) | 72.11% | 71.58% | 84.03% | 83.53% | ||||
| Net charge-offs to average loans (5) | 0.21% | 0.21% | 0.38% | 0.38% | ||||
(1) We define non-performing loans to include non-accrual loans, and loans, other than ACI loans and government insured residential loans, that are past due 90 days or more and still accruing. Contractually delinquent ACI loans and government insured residential loans on which interest continues to be accreted or accrued are excluded from non-performing loans.
(2) Non-performing assets include non-performing loans, OREO and other repossessed assets.
(3) Total loans include premiums, discounts, and deferred fees and costs.
(4) On a tax-equivalent basis.
(5) Annualized for the three and six month periods.
