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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 

 FORM 8-K
 
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): April 25, 2018 (April 25, 2018)

 

BankUnited, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-35039
 
27-0162450
(State of Incorporation)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)
 
14817 Oak Lane
Miami Lakes, FL 33016
(Address of principal executive offices) (Zip Code)
 
(305) 569-2000
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o                  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o                  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o                  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o                  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

 

1
 
 
 


Item 2.02                                           Results of Operations and Financial Condition.
 
On April 25, 2018, BankUnited, Inc. (the “Company”) reported its results for the quarter ended March 31, 2018. A copy of the Company’s press release containing this information is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
 
Item 9.01                                           Financial Statements and Exhibits.
 
(d) Exhibits.
 
 
 
 
 
 
Exhibit
Number
 
Description
 
 
 
 
 
April 25, 2018



2
 
 
 


SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
Dated:
April 25, 2018
BANKUNITED, INC.
 
 
 
 
 
/s/ Leslie N. Lunak
 
 
Name:
Leslie N. Lunak
 
 
Title:
Chief Financial Officer



3
 
 
 


EXHIBIT INDEX
 
 
 
 
 
 
Exhibit
Number
 
Description
 
 
 
 
 
April 25, 2018




4
 
 
 
Exhibit


Exhibit 99.1
 
BANKUNITED, INC. REPORTS FIRST QUARTER 2018 RESULTS
 
Miami Lakes, Fla. — April 25, 2018 — BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended March 31, 2018.
For the quarter ended March 31, 2018, the Company reported net income of $85.2 million, or $0.77 per diluted share, compared to $62.3 million, or $0.57 per diluted share, for the quarter ended March 31, 2017.
The annualized return on average stockholders’ equity for the three months ended March 31, 2018 was 11.28% compared to 10.08% for the three months ended March 31, 2017 while the annualized return on average assets was 1.14% compared to 0.91% for the same periods.

Rajinder Singh, President and Chief Executive Officer, said, "This was a strong quarter from an earnings perspective, with reported EPS increasing 35% over the comparable quarter of the prior year and pre-tax income increasing by 23%. We remain encouraged by positive tailwinds from tax reform, a strong job market and economic growth."

Performance Highlights
•
Net interest income increased by $17.2 million to $247.8 million for the quarter ended March 31, 2018 from $230.6 million for the quarter ended March 31, 2017. Interest income increased by $44.2 million, driven by increases in the average balances of loans and investment securities outstanding as well as increases in tax-equivalent yields on interest earning assets. Interest expense increased by $27.0 million, driven primarily by increases in average interest bearing deposits and an increase in the cost of interest bearing liabilities.
•
The net interest margin, calculated on a tax-equivalent basis, was 3.56% for the quarter ended March 31, 2018 compared to 3.52% for the immediately preceding quarter ended December 31, 2017 and 3.70% for the quarter ended March 31, 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.
•
The effective income tax rate declined to 23.1% for the quarter ended March 31, 2018 from 30.8% for the quarter ended March 31, 2017, primarily due to the reduction in the statutory federal income tax rate.
•
Total deposits increased by $361 million for the quarter ended March 31, 2018, to $22.2 billion. Growth in non-interest bearing demand deposits accounted for $270 million of this increase. Non-covered loans and leases, including equipment under operating lease, grew by $66 million during the quarter. Loan growth was impacted during the quarter by continued runoff of the New York multi-family portfolio and seasonality in the mortgage warehouse and commercial and industrial lines of business.
•
During the three months ended March 31, 2018, under the terms of the share repurchase program authorized by its Board of Directors, the Company repurchased 1.2 million shares of its common stock for an aggregate purchase price of $48.6 million.
•
Book value per common share grew to $28.57 at March 31, 2018 from $28.32 at December 31, 2017 while tangible book value per common share increased to $27.83 from $27.59 over the same period.

1
 
 
 


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 March 31, 2018 were as follows:
 
BankUnited, Inc.
 
BankUnited, N.A.
Tier 1 leverage
9.6
%
 
10.2
%
 
 

 
 
Common Equity Tier 1 ("CET1") risk-based capital
13.0
%
 
13.9
%
 
 
 
 
Tier 1 risk-based capital
13.0
%
 
13.9
%
 
 

 
 
Total risk-based capital
13.7
%
 
14.5
%

Loans and Leases

Loans, including premiums, discounts and deferred fees and costs, totaled $21.5 billion at March 31, 2018 compared to $21.4 billion at December 31, 2017. Non-covered loans grew to $21.0 billion while covered loans declined to $479 million at March 31, 2018.

The Florida franchise contributed $55 million of net loan growth for the quarter ended March 31, 2018, while balances for the New York franchise declined by $139 million, due primarily to a $121 million decline in the multi-family category. The Company's national platforms, including our commercial lending subsidiaries, our mortgage warehouse lending operations, our small business finance unit and our 1-4 family residential loan portfolio, contributed $158 million of net loan growth for the quarter ended March 31, 2018, primarily driven by growth of $165 million in 1-4 family residential loans.

At March 31, 2018, the non-covered loan portfolio included $7.4 billion, $6.0 billion and $7.6 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
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2018
 
December 31, 2017
Residential and other consumer loans
 
20.6
%
 
19.8
%
 
22.3
%
 
21.7
%
Multi-family
 
14.8
%
 
15.4
%
 
14.5
%
 
15.0
%
Non-owner occupied commercial real estate
 
21.6
%
 
21.5
%
 
21.0
%
 
21.0
%
Construction and land
 
1.4
%
 
1.5
%
 
1.4
%
 
1.5
%
Owner occupied commercial real estate
 
9.6
%
 
9.7
%
 
9.4
%
 
9.4
%
Commercial and industrial
 
19.7
%
 
19.9
%
 
19.3
%
 
19.4
%
Commercial lending subsidiaries
 
12.3
%
 
12.2
%
 
12.1
%
 
12.0
%
 
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%

Asset Quality and Allowance for Loan and Lease Losses

For the quarters ended March 31, 2018 and 2017, the Company recorded provisions for loan losses of $3.1 million and $12.1 million, respectively, substantially all of which related to non-covered loans. The provision related to taxi medallion loans totaled $2.8 million and $9.5 million for the quarters ended March 31, 2018 and 2017, respectively.

The most significant factor impacting the decrease in the provision for loan losses related to non-covered loans for the quarter ended March 31, 2018, as compared to the quarter ended March 31, 2017, was the decline in the provision related to taxi medallion loans. Other offsetting factors contributing to the decline included (i) a net increase in the relative impact on the provision of changes in quantitative and qualitative loss factors; (ii) a decrease in the provision related to specific reserves; and (iii) lower loan growth.

Non-covered, non-performing loans totaled $192.8 million or 0.92% of total non-covered loans at March 31, 2018, compared to $172.0 million or 0.82% of total non-covered loans at December 31, 2017. Non-performing taxi medallion loans comprised

2
 
 
 


$98.4 million or 0.47% of total non-covered loans at March 31, 2018 and $106.1 million or 0.51% of total non-covered loans at December 31, 2017. At March 31, 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 0.65% and 71.03%, respectively, at March 31, 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 three months ended March 31, 2018 and charge-offs related to taxi medallion loans. The annualized ratio of net charge-offs to average non-covered loans was 0.21% for the three months ended March 31, 2018, compared to 0.30% for the three months ended March 31, 2017. The annualized ratio of charge-offs of taxi medallion loans to average non-covered loans was 0.10% and 0.13% for the three months ended March 31, 2018 and 2017, respectively.

The following table summarizes the activity in the allowance for loan and lease losses for the periods indicated (in thousands):
 
Three Months Ended March 31, 2018
 
Three Months Ended March 31, 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 (recovery)
—

 
273

 
2,874

 
3,147

 
831

 
(52
)
 
11,321

 
12,100

Charge-offs
—

 
(15
)
 
(10,617
)
 
(10,632
)
 
—

 
(55
)
 
(14,769
)
 
(14,824
)
Recoveries
—

 
2

 
164

 
166

 
—

 
65

 
987

 
1,052

Balance at end of period
$
—

 
$
518

 
$
136,958

 
$
137,476

 
$
831

 
$
2,058

 
$
148,392

 
$
151,281


Charge-offs related to taxi medallion loans totaled $5.4 million and $5.9 million for the quarters ended March 31, 2018 and 2017, respectively.

Deposits

At March 31, 2018, deposits totaled $22.2 billion compared to $21.9 billion at December 31, 2017. The average cost of total deposits was 1.04% for the quarter ended March 31, 2018, compared to 0.94% for the immediately preceding quarter ended December 31, 2017, and 0.72% for the quarter ended March 31, 2017.

Net interest income

Net interest income for the quarter ended March 31, 2018 increased to $247.8 million from $230.6 million for the quarter ended March 31, 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 an increase in average interest bearing deposits and an increase in the cost of funds.

The Company’s net interest margin, calculated on a tax-equivalent basis, was 3.56% for the quarter ended March 31, 2018, compared to 3.52% for the immediately preceding quarter ended December 31, 2017 and 3.70% for the quarter ended March 31, 2017.

Significant offsetting factors impacting the decrease in net interest margin for the three months ended March 31, 2018, compared to three months ended March 31, 2017, included:

•
The tax-equivalent yield on loans increased to 5.26% for the three months ended March 31, 2018 from 5.07% for the three months ended March 31, 2017, reflecting increased yields on both non-covered and covered loans.
•
The tax-equivalent yield on non-covered loans was 3.83% for the three months ended March 31, 2018, compared to 3.62% for the three months ended March 31, 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 65.22% for the three months ended March 31, 2018 from 49.83% for the three months ended March 31, 2017.

3
 
 
 


•
The tax-equivalent yield on investment securities increased to 3.04% for the three months ended March 31, 2018 from 3.01% for the three months ended March 31, 2017.
•
Tax-equivalent yields on non-covered loans and investment securities were reduced by approximately 0.08% and 0.10%, respectively, and the net interest margin was reduced by approximately 0.08% for the three months ended March 31, 2018 due to the reduction of the statutory federal income tax rate.
•
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 1.37% for the three months ended March 31, 2018 from 0.98% for three months ended March 31, 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.
Changes in accretable yield on ACI loans for the three months ended March 31, 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
41,739

Accretion
(82,301
)
Balance, March 31, 2018
$
414,497


Non-interest income

Non-interest income totaled $28.0 million for the three months ended March 31, 2018 compared to $28.1 million for the three months ended March 31, 2017.

Non-interest expense

Non-interest expense totaled $161.8 million for the three months ended March 31, 2018 compared to $156.6 million for the three months ended March 31, 2017. The most significant components of the $5.3 million increase for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 were (i) an increase in employee compensation and benefits of $7.4 million mainly attributable to an increase in the number of employees, offset by (ii) a decrease in amortization of the FDIC indemnification asset of $4.1 million.

Amortization of the FDIC indemnification asset was $40.3 million for the three months ended March 31, 2018, compared to $44.5 million for the three months ended March 31, 2017. The amortization rate increased to 58.42% for the three months ended March 31, 2018 from 36.38% for the three months ended March 31, 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.

Provision for income taxes
The effective income tax rate was 23.1% for the three months ended March 31, 2018, compared to 30.8% for the three months ended March 31, 2017, primarily due to the reduction of the statutory corporate federal income tax rate from 35 percent to 21 percent, effective January 1, 2018.

4
 
 
 



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 March 31, 2018 (in thousands except share and per share data): 
Total stockholders’ equity
 
$
3,032,672

Less: goodwill and other intangible assets
 
77,751

Tangible stockholders’ equity
 
$
2,954,921

 
 
 
Common shares issued and outstanding
 
106,160,751

 
 
 
Book value per common share
 
$
28.57

 
 
 
Tangible book value per common share
 
$
27.83



Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Wednesday, April 25, 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 3597416. A replay of the call will be available from 12:00 p.m. ET on April 25th through 11:59 p.m. ET on May 2nd by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The pass code for the replay is 3597416. 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 $30.4 billion at March 31, 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 6 banking centers in the New York metropolitan area at March 31, 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 $3.6 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 March 31, 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. 


5
 
 
 


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).

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

Source: BankUnited, Inc.

6
 
 
 


BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except share and per share data)
 
 
March 31,
2018
 
December 31,
2017
ASSETS
 

 
 

Cash and due from banks:
 

 
 

Non-interest bearing
$
22,908

 
$
35,246

Interest bearing
176,842

 
159,336

Cash and cash equivalents
199,750

 
194,582

Investment securities (including securities recorded at fair value of $6,745,501 and $6,680,832)
6,755,501

 
6,690,832

Non-marketable equity securities
250,052

 
265,989

Loans held for sale
46,494

 
34,097

Loans (including covered loans of $479,164 and $503,118)
21,466,821

 
21,416,504

Allowance for loan and lease losses
(137,476
)
 
(144,795
)
Loans, net
21,329,345

 
21,271,709

FDIC indemnification asset
249,637

 
295,635

Bank owned life insurance
260,852

 
252,462

Equipment under operating lease, net
591,339

 
599,502

Goodwill and other intangible assets
77,751

 
77,796

Other assets
671,815

 
664,382

Total assets
$
30,432,536

 
$
30,346,986

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 

 
 

Liabilities:
 

 
 

Demand deposits:
 

 
 

Non-interest bearing
$
3,431,624

 
$
3,162,032

Interest bearing
1,553,886

 
1,666,581

Savings and money market
10,937,578

 
10,715,024

Time
6,316,560

 
6,334,842

Total deposits
22,239,648

 
21,878,479

Federal Home Loan Bank advances
4,396,000

 
4,771,000

Notes and other borrowings
402,816

 
402,830

Other liabilities
361,400

 
268,615

Total liabilities
27,399,864

 
27,320,924

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Stockholders' equity:
 
 
 
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 106,160,751 and 106,848,185 shares issued and outstanding
1,061

 
1,068

Paid-in capital
1,450,107

 
1,498,227

Retained earnings
1,525,174

 
1,471,781

Accumulated other comprehensive income
56,330

 
54,986

Total stockholders' equity
3,032,672

 
3,026,062

Total liabilities and stockholders' equity
$
30,432,536

 
$
30,346,986



7
 
 
 


BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)

 
Three Months Ended March 31,
 
2018
 
2017
Interest income:
 

 
 

Loans
$
274,000

 
$
236,362

Investment securities
49,985

 
43,719

Other
3,791

 
3,457

Total interest income
327,776

 
283,538

Interest expense:
 
 
 
Deposits
56,361

 
34,728

Borrowings
23,606

 
18,217

Total interest expense
79,967

 
52,945

Net interest income before provision for loan losses
247,809

 
230,593

Provision for loan losses (including $273 and $779 for covered loans)
3,147

 
12,100

Net interest income after provision for loan losses
244,662

 
218,493

Non-interest income:
 
 
 
Income from resolution of covered assets, net
3,317

 
7,305

Net loss on FDIC indemnification
(3,615
)
 
(6,748
)
Service charges and fees
5,571

 
5,077

Gain on sale of loans, net (including $1,703 and $1,882 related to covered loans)
3,501

 
4,558

Gain on investment securities, net
364

 
1,636

Lease financing
14,102

 
13,639

Other non-interest income
4,746

 
2,677

Total non-interest income
27,986

 
28,144

Non-interest expense:
 
 
 
Employee compensation and benefits
67,036

 
59,671

Occupancy and equipment
18,832

 
18,609

Amortization of FDIC indemnification asset
40,347

 
44,463

Deposit insurance expense
4,812

 
5,475

Professional fees
2,875

 
5,040

Telecommunications and data processing
3,685

 
3,284

Depreciation of equipment under operating lease
9,316

 
8,017

Other non-interest expense
14,914

 
11,998

Total non-interest expense
161,817

 
156,557

Income before income taxes
110,831

 
90,080

Provision for income taxes
25,596

 
27,787

Net income
$
85,235

 
$
62,293

Earnings per common share, basic
$
0.78

 
$
0.57

Earnings per common share, diluted
$
0.77

 
$
0.57

Cash dividends declared per common share
$
0.21

 
$
0.21




8
 
 
 


BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
 
 
Three Months Ended March 31,
 
 
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
 
$
20,783,987

 
$
196,878

 
3.83
%
 
$
18,723,610

 
$
167,984

 
3.62
%
Covered loans
 
498,701

 
81,309

 
65.22
%
 
603,668

 
75,153

 
49.83
%
Total loans
 
21,282,688

 
278,187

 
5.26
%
 
19,327,278

 
243,137

 
5.07
%
Investment securities (3)
 
6,772,449

 
51,524

 
3.04
%
 
6,252,466

 
47,087

 
3.01
%
Other interest earning assets
 
518,857

 
3,791

 
2.96
%
 
572,187

 
3,457

 
2.45
%
Total interest earning assets
 
28,573,994

 
333,502

 
4.70
%
 
26,151,931

 
293,681

 
4.52
%
Allowance for loan and lease losses
 
(145,216
)
 
 
 
 
 
(156,023
)
 
 
 
 
Non-interest earning assets
 
1,944,678

 
 
 
 
 
1,810,592

 
 
 
 
Total assets
 
$
30,373,456

 
 
 
 
 
$
27,806,500

 
 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing demand deposits
 
$
1,600,009

 
4,157

 
1.05
%
 
$
1,565,188

 
2,685

 
0.70
%
Savings and money market deposits
 
10,799,270

 
29,054

 
1.09
%
 
9,258,827

 
15,421

 
0.68
%
Time deposits
 
6,314,137

 
23,150

 
1.49
%
 
5,672,223

 
16,622

 
1.19
%
Total interest bearing deposits
 
18,713,416

 
56,361

 
1.22
%
 
16,496,238

 
34,728

 
0.85
%
FHLB advances
 
4,459,389

 
18,297

 
1.66
%
 
4,948,870

 
12,899

 
1.06
%
Notes and other borrowings
 
402,840

 
5,309

 
5.27
%
 
402,818

 
5,318

 
5.28
%
Total interest bearing liabilities
 
23,575,645

 
79,967

 
1.37
%
 
21,847,926

 
52,945

 
0.98
%
Non-interest bearing demand deposits
 
3,318,952

 
 
 
 
 
3,043,059

 
 
 
 
Other non-interest bearing liabilities
 
414,842

 
 
 
 
 
408,931

 
 
 
 
Total liabilities
 
27,309,439

 
 
 
 
 
25,299,916

 
 
 
 
Stockholders' equity
 
3,064,017

 
 
 
 
 
2,506,584

 
 
 
 
Total liabilities and stockholders' equity
 
$
30,373,456

 
 
 
 
 
$
27,806,500

 
 
 
 
Net interest income
 
 
 
$
253,535

 
 
 
 
 
$
240,736

 
 
Interest rate spread
 
 
 
 
 
3.33
%
 
 
 
 
 
3.54
%
Net interest margin
 
 
 
 
 
3.56
%
 
 
 
 
 
3.70
%
 
 
(1)
On a tax-equivalent basis where applicable
(2)
Annualized
(3)
At fair value except for securities held to maturity


9
 
 
 


BANKUNITED, INC. AND SUBSIDIARIES
EARNINGS PER COMMON SHARE
(In thousands except share and per share amounts)

 
Three Months Ended March 31,
c
2018
 
2017
Basic earnings per common share:
 
 
 

Numerator:
 
 
 

Net income
$
85,235

 
$
62,293

Distributed and undistributed earnings allocated to participating securities
(3,216
)
 
(2,323
)
Income allocated to common stockholders for basic earnings per common share
$
82,019

 
$
59,970

Denominator:
 
 
 
Weighted average common shares outstanding
106,525,883

 
105,817,669

Less average unvested stock awards
(1,108,434
)
 
(1,060,912
)
Weighted average shares for basic earnings per common share
105,417,449

 
104,756,757

Basic earnings per common share
$
0.78

 
$
0.57

Diluted earnings per common share:
 
 
 
Numerator:
 
 
 
Income allocated to common stockholders for basic earnings per common share
$
82,019

 
$
59,970

Adjustment for earnings reallocated from participating securities
11

 
8

Income used in calculating diluted earnings per common share
$
82,030

 
$
59,978

Denominator:
 
 
 
Weighted average shares for basic earnings per common share
105,417,449

 
104,756,757

Dilutive effect of stock options and executive share-based awards
516,161

 
620,761

Weighted average shares for diluted earnings per common share
105,933,610

 
105,377,518

Diluted earnings per common share
$
0.77

 
$
0.57



10
 
 
 



BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
 
 
 
Three Months Ended March 31,
 
 
2018
 
2017
Financial ratios (5)
 
 

 
 

Return on average assets
 
1.14
%
 
0.91
%
Return on average stockholders’ equity
 
11.28
%
 
10.08
%
Net interest margin (4)
 
3.56
%
 
3.70
%
 
 
March 31, 2018
 
December 31, 2017
 
 
Non-Covered
 
Total
 
Non-Covered
 
Total
Asset quality ratios
 
 
 
 
 
 
 
 
Non-performing loans to total loans (1) (3)
 
0.92
%
 
0.91
%
 
0.82
%
 
0.81
%
Non-performing assets to total assets (2)(5)
 
0.66
%
 
0.69
%
 
0.60
%
 
0.61
%
Allowance for loan and lease losses to total loans (3)
 
0.65
%
 
0.64
%
 
0.69
%
 
0.68
%
Allowance for loan and lease losses to non-performing loans (1)
 
71.03
%
 
70.33
%
 
84.03
%
 
83.53
%
Net charge-offs to average loans (5)
 
0.21
%
 
0.20
%
 
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 month period.


11