News Release

Printer Friendly Version  View printer-friendly version
<< Back
BankUnited, Inc. Reports 2020 Results

MIAMI LAKES, Fla.--(BUSINESS WIRE)--Jan. 21, 2021-- BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2020.

“Overall, this was an excellent quarter. We saw improvement in the economic outlook leading to a reduction in credit costs and continued to execute on our core strategy of improving the deposit mix, lowering the cost of funds and growing net interest income," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended December 31, 2020, the Company reported net income of $85.7 million, or $0.89 per diluted share, compared to $66.6 million, or $0.70 per diluted share, for the immediately preceding quarter ended September 30, 2020 and $89.5 million, or $0.91 per diluted share, for the quarter ended December 31, 2019. On an annualized basis, earnings for the quarter ended December 31, 2020 generated a return on average stockholders' equity of 11.6% and a return on average assets of 0.96%.

For the year ended December 31, 2020, the Company reported net income of $197.9 million, or $2.06 per diluted share, compared to $313.1 million, or $3.13 per diluted share, for the year ended December 31, 2019. Results for the year ended December 31, 2020 were negatively impacted by the application of the Current Expected Credit Losses ("CECL") accounting methodology, including the impact of COVID-19 on the provision for credit losses.

Financial Highlights

  • Net interest income increased by $5.9 million compared to the immediately preceding quarter ended September 30, 2020 and by $8.1 million compared to the quarter ended December 31, 2019. The net interest margin, calculated on a tax-equivalent basis, was 2.33% for the quarter ended December 31, 2020 compared to 2.32% for the immediately preceding quarter. The net interest margin was 2.41% for the quarter ended December 31, 2019.
  • The average cost of total deposits continued to decline, dropping by 0.14% to 0.43% for the quarter ended December 31, 2020 compared to 0.57% for the quarter ended September 30, 2020. The average cost of total deposits was 1.48% for the quarter ended December 31, 2019. On a spot basis, the average annual percentage yield ("APY") on total deposits declined to 0.36% at December 31, 2020 from 0.49% at September 30, 2020 and 1.42% at December 31, 2019.
  • For the quarter ended December 31, 2020, the Company recorded a net recovery of credit losses of $1.6 million compared to a provision for credit losses of $29.2 million for the immediately preceding quarter ended September 30, 2020. The reduction in the provision for credit losses reflected improvements in forecasted economic conditions, which offset the impact of some further downward risk rating migration and increases in specific reserves. The provision for credit losses was $178.4 million for the year ended December 31, 2020. At December 31, 2020, the allowance for credit losses ("ACL") was $257 million, or 1.08% of the loan portfolio, compared to $274 million, or 1.15% at September 30, 2020. The reduction in the ACL as a percentage of loans was attributable primarily to charge-offs taken during the quarter, coupled with the lower provision for credit losses.
  • Pre-tax, pre-provision net revenue ("PPNR") was $105.3 million for the quarter ended December 31, 2020 compared to $104.1 million for the quarter ended December 31, 2019 and $115.1 million for the immediately preceding quarter ended September 30, 2020. PPNR for the quarter ended December 31, 2020 was impacted by year-end adjustments to certain compensation accruals. For the year ended December 31, 2020, PPNR improved to $427.8 million from $412.9 million for the year ended December 31, 2019.
  • Average non-interest bearing demand deposits grew by $966 million for the quarter ended December 31, 2020 compared to the immediately preceding quarter and by $2.9 billion compared to the quarter ended December 31, 2019. At December 31, 2020, non-interest bearing demand deposits represented 25% of total deposits, compared to 18% of total deposits at December 31, 2019. Total deposits grew by $899 million and $3.1 billion during the quarter and year ended December 31, 2020, respectively, of which $219 million and $2.7 billion respectively was non-interest bearing. Higher cost time deposits continued to runoff, declining by $1.1 billion and $2.5 billion for the quarter and year ended December 31, 2020, respectively.
  • Loans on deferral totaled $207 million or less than 1% of total loans at December 31, 2020. Loans modified under the CARES Act totaled $587 million at December 31, 2020. In the aggregate, this represents $794 million or 3% of the total loan portfolio at December 31, 2020, down from $3.6 billion or 15% of total loans that were granted an initial 90 day deferral as reported at the end of the second quarter. As of December 31, 2020, commercial loans on short-term payment deferral totaled $63 million and commercial loans subject to CARES Act modifications totaled $575 million or 3% of the total commercial portfolio. Residential loans still on deferral were $144 million and those modified under the CARES Act were $12 million, for a total of $156 million or 2% of the residential portfolio at December 31, 2020.
  • Book value per common share and tangible book value per common share at December 31, 2020 increased to $32.05 and $31.22, respectively, from $31.01 and $30.17, respectively at September 30, 2020 and $31.33 and $30.52, respectively at December 31, 2019.
  • On January 20, 2021, the Company’s Board of Directors reinstated the share repurchase program that the Company suspended on March 16, 2020. Authorization to repurchase up to approximately $44.9 million in shares of its outstanding common stock remains under the 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 at any time

Loans and Leases

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

 

December 31, 2020

 

September 30, 2020

 

December 31, 2019

Residential and other consumer loans

$

6,348,222

 

 

26.6

%

 

$

5,940,900

 

 

25.1

%

 

$

5,661,119

 

 

24.5

%

Multi-family

1,639,201

 

 

6.9

%

 

1,810,126

 

 

7.6

%

 

2,217,705

 

 

9.6

%

Non-owner occupied commercial real estate

4,963,273

 

 

20.8

%

 

4,910,835

 

 

20.7

%

 

5,030,904

 

 

21.7

%

Construction and land

293,307

 

 

1.2

%

 

263,381

 

 

1.1

%

 

243,925

 

 

1.1

%

Owner occupied commercial real estate

2,000,770

 

 

8.4

%

 

2,051,577

 

 

8.6

%

 

2,062,808

 

 

8.9

%

Commercial and industrial

4,447,383

 

 

18.6

%

 

4,427,351

 

 

18.6

%

 

4,655,349

 

 

20.1

%

PPP

781,811

 

 

3.3

%

 

829,798

 

 

3.5

%

 

 

 

%

Pinnacle

1,107,386

 

 

4.6

%

 

1,157,706

 

 

4.9

%

 

1,202,430

 

 

5.2

%

Bridge - franchise finance

549,733

 

 

2.3

%

 

606,222

 

 

2.4

%

 

627,482

 

 

2.6

%

Bridge - equipment finance

475,548

 

 

2.0

%

 

530,516

 

 

2.2

%

 

684,794

 

 

3.0

%

Mortgage warehouse lending ("MWL")

1,259,408

 

 

5.3

%

 

1,250,903

 

 

5.3

%

 

768,472

 

 

3.3

%

 

$

23,866,042

 

 

100.0

%

 

$

23,779,315

 

 

100.0

%

 

$

23,154,988

 

 

100.0

%

Operating lease equipment, net

$

663,517

 

 

 

 

$

676,321

 

 

 

 

$

698,153

 

 

 

Growth in residential and other consumer loans for the quarter was mainly attributable to GNMA early buyout loans. At December 31, 2020, September 30, 2020 and December 31, 2019, the residential portfolio included $1.4 billion, $1.1 billion and $676 million, respectively, of GNMA early buyout loans. Residential activity for the quarter included purchases of approximately $472 million in GNMA early buyout loans, offset by approximately $142 million in re-poolings and paydowns. Residential and other consumer loans, excluding GNMA early buyout loans, grew by approximately $77 million.

In the aggregate, commercial loans declined by $321 million for the quarter ended December 31, 2020 as the environment remained challenging for production and our approach to new lending remained disciplined. The largest decline was in the multi-family segment which decreased by $171 million for the quarter, driven primarily by $151 million in runoff of the New York portfolio. Loans and operating lease equipment at Bridge declined by a total of $124 million during the quarter.

During the quarter ended December 31, 2020, the Company began processing forgiveness applications with the SBA, resulting in a $48 million decline in PPP loans.

Mortgage warehouse commitments totaled $2.1 billion at December 31, 2020, an increase of 60% compared to $1.3 billion at December 31, 2019. Line utilization was 62% at December 31, 2020 compared to 59% at December 31, 2019.

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 December 31, 2020 (dollars in thousands):

 

Non-Performing Loans

 

Currently Under Short-Term Deferral

 

CARES Act Modification

Residential and other consumer (1)

$

28,828

 

 

$

144,189

 

 

$

12,050

 

Commercial:

 

 

 

 

 

CRE - Property Type:

 

 

 

 

 

Retail

16,566

 

 

28,542

 

 

18,526

 

Hotel

35,390

 

 

1,055

 

 

343,492

 

Office

9,436

 

 

 

 

47,949

 

Multi-family

24,090

 

 

 

 

15,776

 

Other

7,379

 

 

1,789

 

 

 

Owner occupied commercial real estate

23,152

 

 

8,432

 

 

6,198

 

Commercial and industrial

54,584

 

 

2,191

 

 

117,836

 

Bridge - franchise finance

45,028

 

 

20,797

 

 

24,816

 

Total commercial

215,625

 

 

62,806

 

 

574,593

 

Total

$

244,453

 

 

$

206,995

 

 

$

586,643

 

(1)

Excludes government insured residential loans.

In the table above, "currently under short-term deferral" refers to loans subject to either a first or second 90-day payment deferral at December 31, 2020 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 totaled $244.5 million or 1.02% of total loans at December 31, 2020, compared to $200.3 million or 0.84% of total loans at September 30, 2020 and $204.8 million or 0.88% of total loans at December 31, 2019. The largest increases in non-performing loans during the quarter ended December 31, 2020 were in the multi-family, franchise finance and residential sub-segments, while non-performing commercial and industrial loans declined. Non-performing loans included $51.3 million, $43.6 million and $45.7 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.22%, 0.18% and 0.20% of total loans at December 31, 2020, September 30, 2020 and December 31, 2019, respectively.

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

 

December 31, 2020

 

September 30, 2020

 

December 31, 2019

Special mention

$

711,516

 

 

$

951,981

 

 

$

72,881

 

Substandard - accruing

1,758,654

 

 

1,376,718

 

 

180,380

 

Substandard - non-accruing

203,758

 

 

187,247

 

 

185,906

 

Doubtful

11,867

 

 

938

 

 

 

Total

$

2,685,795

 

 

$

2,516,884

 

 

$

439,167

 

The following table presents the ACL at the dates indicated, related ACL coverage ratios, as well as net charge-off rates for the years ended December 31, 2020 and 2019 (dollars in thousands):

 

ACL

 

ACL to Total Loans

 

ACL to Non-Performing Loans

 

Net Charge-offs to Average Loans

December 31, 2019 (incurred loss)

$

108,671

 

 

0.47

%

 

53.07

%

 

0.05

%

January 1, 2020 (initial date of CECL adoption)

$

135,976

 

 

0.59

%

 

66.40

%

 

N/A

 

September 30, 2020 (expected loss)

$

274,128

 

 

1.15

%

 

136.86

%

 

0.25

%

December 31, 2020 (expected loss)

$

257,323

 

 

1.08

%

(1)

105.26

%

 

0.26

%

(1)

ACL to total loans, excluding government insured residential loans, PPP loans and MWL, which carry nominal or no reserves, was 1.26% at December 31, 2020.

The ACL at December 31, 2020 represents management's estimate of lifetime expected credit losses from the loan portfolio 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 December 2020, 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 from September 30, 2020 to December 31, 2020 related primarily to charge-offs taken during the quarter, coupled with the lower provision for credit losses.

For the quarter ended December 31, 2020, the Company recorded a net recovery of credit losses of $1.6 million, which included a provision of $1.2 million related to funded loans offset by a recovery of $2.9 million related to unfunded loan commitments as well as immaterial components related to accrued interest receivable and an AFS debt security. The provision for credit losses reflected improvements in forecasted economic conditions, which largely offset the impact of risk rating migration and increases in certain specific reserves.

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

 

Three Months Ended December 31,

 

Years Ended December 31,

 

2020

 

2019

 

2020

 

2019

Beginning balance

$

274,128

 

 

$

108,462

 

 

$

108,671

 

 

$

109,931

 

Cumulative effect of adoption of CECL

 

 

 

 

27,305

 

 

 

Balance after adoption of CECL

274,128

 

 

108,462

 

 

135,976

 

 

109,931

 

Provision (recovery)

1,244

 

 

(469)

 

 

182,339

 

 

8,904

 

Charge-offs

(18,848)

 

 

(3,556)

 

 

(69,602)

 

 

(17,541)

 

Recoveries

799

 

 

4,234

 

 

8,610

 

 

7,377

 

Ending balance

$

257,323

 

 

$

108,671

 

 

$

257,323

 

 

$

108,671

 

$13.8 million of the charge-offs recognized during the quarter ended December 31, 2020 related to $57.6 million of non-performing loans that were sold during the quarter, or held for sale at quarter-end.

Net interest income

Net interest income for the quarter ended December 31, 2020 was $193.4 million compared to $187.5 million for the immediately preceding quarter ended September 30, 2020 and $185.3 million for the quarter ended December 31, 2019. While average interest earning assets have increased quarter-over-quarter and year-over-year, average interest bearing liabilities have continued to decline as average non-interest bearing demand deposits have grown.

Interest income decreased by $3.5 million for the quarter ended December 31, 2020 compared to the immediately preceding quarter, and by $58.3 million, compared to the quarter ended December 31, 2019. Interest expense decreased by $9.3 million compared to the immediately preceding quarter and by $66.3 million compared to the quarter ended December 31, 2019. Decreases in interest income resulted from declines in market interest rates including the impact of repayment of assets originated in a higher rate environment, partially offset by increases in average interest earning assets. Declines in interest expense reflected decreases in market interest rates, the impact of 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, increased by 0.01% to 2.33% for the quarter ended December 31, 2020, from 2.32% for the immediately preceding quarter ended September 30, 2020. Offsetting factors contributing to the increase in the net interest margin for the quarter ended December 31, 2020 compared to the immediately preceding quarter ended September 30, 2020 included:

  • The average rate paid on interest bearing deposits decreased to 0.58% for the quarter ended December 31, 2020, from 0.75% for the quarter ended September 30, 2020. This decline reflected continued initiatives taken to lower rates paid on deposits in response to declines in general market interest rates and the re-pricing of term deposits. We expect the cost of interest bearing deposits to continue to decline; at December 31, 2020, approximately $1.0 billion or 21% of the time deposit portfolio, with an average rate of 1.61%, has not yet repriced since March 2020 when the Fed last cut rates. The majority of these CDs will mature in the first quarter of 2021.
  • The tax-equivalent yield on investment securities decreased to 1.82% for the quarter ended December 31, 2020 from 2.00% for the quarter ended September 30, 2020. This decrease resulted from the impact of purchases of lower-yielding securities, prepayments of higher yielding mortgage-backed securities and decreases in coupon interest rates on existing floating rate assets.
  • The tax-equivalent yield on loans decreased to 3.55% for the quarter ended December 31, 2020, from 3.61% for the quarter ended September 30, 2020. Factors contributing to this decrease included the impact of runoff of loans originated in a higher rate environment, originations at lower prevailing market rates and interest income reversed on loans placed on non-accrual during the quarter.
  • The average rate paid on FHLB and PPPLF borrowings increased to 2.07% for the quarter ended December 31, 2020, from 1.95% for the quarter ended September 30, 2020, reflecting the maturity of short-term, lower rate FHLB advances and the payoff of all PPPLF borrowings.
  • 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.

The Company's net interest margin, calculated on a tax-equivalent basis, was 2.35% for the year ended December 31, 2020, compared to 2.47% for the year ended December 31, 2019. The decline in the yield on interest earning assets outpaced the reduction in cost of interest bearing liabilities for the period. The offsetting factors discussed above with respect to the yields on loans and securities, the average rate paid on deposits and the growth in non-interest bearing demand deposits also impacted the net interest margin for the year ended December 30, 2020 compared to the prior year. Declines in market interest rates had a significant impact on year-over-year changes in yields earned on interest earning assets and rates paid on interest bearing liabilities.

Non-interest expense

Non-interest expense totaled $123.3 million for the quarter ended December 31, 2020 compared to $108.6 million for the immediately preceding quarter ended September 30, 2020 and $119.0 million for the quarter ended December 31, 2019. Non-interest expense totaled $457.2 million and $487.1 million for the year ended December 31, 2020 and 2019, respectively, a decline of approximately 6%.

  • Compensation and benefits increased by $12.5 million for the quarter ended December 31, 2020 compared to the immediately preceding quarter. This increase included an increase of $6.6 million in variable compensation accruals related to stronger than initially anticipated operating results over the second half of the year; a $2.2 million vacation accrual related to rollover vacation days provided to employees in response to COVID-19; and an increase of $2.5 million in the accrual related to liability classified share awards stemming from an increase in the stock price.
  • Cost reductions stemming from our BankUnited 2.0 initiative contributed to the declining trend in occupancy and equipment expense and other non-interest expense.
  • The increasing trend in technology and telecommunications expense is reflective of investments in digital and data analytics capabilities and in the infrastructure to support cloud migration.
  • The increasing trend in deposit insurance expense reflects an increase in the assessment rate.
  • For the quarter and year ended December 31, 2020, non-interest expense included approximately $2.8 million and $4.8 million, respectively, in costs directly related to our response to the COVID-19 pandemic.

     

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, January 21, 2021 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, and Chief Financial Officer, Leslie N. Lunak.

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://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 9281414. A replay of the call will be available from 12:00 p.m. ET on January 21st through 11:59 p.m. ET on January 28th by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The conference ID for the replay is 9281414. 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 $35.0 billion at December 31, 2020, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 70 banking centers in 14 Florida counties and 4 banking centers in the New York metropolitan area at December 31, 2020.

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, 2019 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)

 

 

December 31,
2020

 

December 31,
2019

ASSETS

 

 

 

Cash and due from banks:

 

 

 

Non-interest bearing

$

20,233

 

 

$

7,704

 

Interest bearing

377,483

 

 

206,969

 

Cash and cash equivalents

397,716

 

 

214,673

 

Investment securities (including securities recorded at fair value of $9,166,683 and $7,759,237)

9,176,683

 

 

7,769,237

 

Non-marketable equity securities

195,865

 

 

253,664

 

Loans held for sale

24,676

 

 

37,926

 

Loans

23,866,042

 

 

23,154,988

 

Allowance for credit losses

(257,323)

 

 

(108,671)

 

Loans, net

23,608,719

 

 

23,046,317

 

Bank owned life insurance

294,629

 

 

282,151

 

Operating lease equipment, net

663,517

 

 

698,153

 

Goodwill and other intangible assets

77,637

 

 

77,674

 

Other assets

571,051

 

 

491,498

 

Total assets

$

35,010,493

 

 

$

32,871,293

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Liabilities:

 

 

 

Demand deposits:

 

 

 

Non-interest bearing

$

7,008,838

 

 

$

4,294,824

 

Interest bearing

3,020,039

 

 

2,130,976

 

Savings and money market

12,659,740

 

 

10,621,544

 

Time

4,807,199

 

 

7,347,247

 

Total deposits

27,495,816

 

 

24,394,591

 

Federal funds purchased

180,000

 

 

100,000

 

FHLB advances

3,122,999

 

 

4,480,501

 

Notes and other borrowings

722,495

 

 

429,338

 

Other liabilities

506,171

 

 

486,084

 

Total liabilities

32,027,481

 

 

29,890,514

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 93,067,500 and 95,128,231 shares issued and outstanding

931

 

 

951

 

Paid-in capital

1,017,518

 

 

1,083,920

 

Retained earnings

2,013,715

 

 

1,927,735

 

Accumulated other comprehensive loss

(49,152)

 

 

(31,827)

 

Total stockholders' equity

2,983,012

 

 

2,980,779

 

Total liabilities and stockholders' equity

$

35,010,493

 

 

$

32,871,293

 

 

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

 

 

Three Months Ended

 

Years Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

2020

 

2020

 

2019

 

2020

 

2019

Interest income:

 

 

 

 

 

 

 

 

 

Loans

$

207,232

 

 

$

208,646

 

 

$

242,642

 

 

$

864,175

 

 

$

981,408

 

Investment securities

42,260

 

 

44,604

 

 

62,006

 

 

193,856

 

 

280,560

 

Other

1,628

 

 

1,322

 

 

4,762

 

 

9,578

 

 

19,902

 

Total interest income

251,120

 

 

254,572

 

 

309,410

 

 

1,067,609

 

 

1,281,870

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

29,290

 

 

37,681

 

 

88,289

 

 

199,980

 

 

385,180

 

Borrowings

28,464

 

 

29,412

 

 

35,810

 

 

115,871

 

 

143,905

 

Total interest expense

57,754

 

 

67,093

 

 

124,099

 

 

315,851

 

 

529,085

 

Net interest income before provision for credit losses

193,366

 

 

187,479

 

 

185,311

 

 

751,758

 

 

752,785

 

Provision for (recovery of) credit losses

(1,643)

 

 

29,232

 

 

(469)

 

 

178,431

 

 

8,904

 

Net interest income after provision for credit losses

195,009

 

 

158,247

 

 

185,780

 

 

573,327

 

 

743,881

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Deposit service charges and fees

4,569

 

 

4,040

 

 

4,150

 

 

16,496

 

 

16,539

 

Gain on sale of loans, net

2,425

 

 

2,953

 

 

1,899

 

 

13,170

 

 

12,119

 

Gain on investment securities, net

7,203

 

 

7,181

 

 

7,438

 

 

17,767

 

 

21,174

 

Lease financing

13,547

 

 

13,934

 

 

13,857

 

 

59,112

 

 

66,631

 

Other non-interest income

7,536

 

 

8,184

 

 

10,412

 

 

26,676

 

 

30,741

 

Total non-interest income

35,280

 

 

36,292

 

 

37,756

 

 

133,221

 

 

147,204

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

60,944

 

 

48,448

 

 

55,744

 

 

217,156

 

 

235,330

 

Occupancy and equipment

11,797

 

 

12,170

 

 

13,697

 

 

48,237

 

 

56,174

 

Deposit insurance expense

6,759

 

 

5,886

 

 

4,142

 

 

21,854

 

 

16,991

 

Professional fees

2,937

 

 

2,436

 

 

2,621

 

 

11,708

 

 

20,352

 

Technology and telecommunications

16,052

 

 

15,435

 

 

13,334

 

 

58,108

 

 

47,509

 

Depreciation of operating lease equipment

12,270

 

 

12,315

 

 

13,610

 

 

49,407

 

 

48,493

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

3,796

 

Other non-interest expense

12,565

 

 

11,937

 

 

15,860

 

 

50,719

 

 

58,444

 

Total non-interest expense

123,324

 

 

108,627

 

 

119,008

 

 

457,189

 

 

487,089

 

Income before income taxes

106,965

 

 

85,912

 

 

104,528

 

 

249,359

 

 

403,996

 

Provision for income taxes

21,228

 

 

19,353

 

 

15,072

 

 

51,506

 

 

90,898

 

Net income

$

85,737

 

 

$

66,559

 

 

$

89,456

 

 

$

197,853

 

 

$

313,098

 

Earnings per common share, basic

$

0.89

 

 

$

0.70

 

 

$

0.91

 

 

$

2.06

 

 

$

3.14

 

Earnings per common share, diluted

$

0.89

 

 

$

0.70

 

 

$

0.91

 

 

$

2.06

 

 

$

3.13

 

 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

Three Months Ended
December 31, 2020

 

Three Months Ended
September 30, 2020

 

Three Months Ended
December 31, 2019

 

Average
Balance

 

Interest
(1)(2)

 

Yield/
Rate (1)(2)

 

Average
Balance

 

Interest
(1)(2)

 

Yield/
Rate (1)(2)

 

Average
Balance

 

Interest
(1)(2)

 

Yield/
Rate (1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

23,706,859

 

 

$

210,896

 

 

3.55

%

 

$

23,447,514

 

 

$

212,388

 

 

3.61

%

 

$

22,986,427

 

 

$

246,458

 

 

4.27

%

Investment securities (3)

9,446,389

 

 

42,966

 

 

1.82

%

 

9,065,478

 

 

45,351

 

 

2.00

%

 

7,929,948

 

 

62,948

 

 

3.18

%

Other interest earning assets

726,273

 

 

1,628

 

 

0.89

%

 

552,515

 

 

1,322

 

 

0.95

%

 

627,001

 

 

4,762

 

 

3.01

%

Total interest earning assets

33,879,521

 

 

255,490

 

 

3.01

%

 

33,065,507

 

 

259,061

 

 

3.13

%

 

31,543,376

 

 

314,168

 

 

3.97

%

Allowance for credit losses

(280,243)

 

 

 

 

 

 

(272,464)

 

 

 

 

 

 

(110,503)

 

 

 

 

 

Non-interest earning assets

1,817,476

 

 

 

 

 

 

1,897,723

 

 

 

 

 

 

1,655,342

 

 

 

 

 

Total assets

$

35,416,754

 

 

 

 

 

 

$

34,690,766

 

 

 

 

 

 

$

33,088,215

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

$

2,903,300

 

 

$

3,637

 

 

0.50

%

 

$

2,800,421

 

 

$

4,127

 

 

0.59

%

 

$

1,947,034

 

 

$

6,485

 

 

1.32

%

Savings and money market deposits

11,839,631

 

 

14,517

 

 

0.49

%

 

10,664,462

 

 

15,853

 

 

0.59

%

 

10,416,964

 

 

41,705

 

 

1.59

%

Time deposits

5,360,630

 

 

11,136

 

 

0.83

%

 

6,519,852

 

 

17,701

 

 

1.08

%

 

7,016,192

 

 

40,099

 

 

2.27

%

Total interest bearing deposits

20,103,561

 

 

29,290

 

 

0.58

%

 

19,984,735

 

 

37,681

 

 

0.75

%

 

19,380,190

 

 

88,289

 

 

1.81

%

Short term borrowings

20,707

 

 

6

 

 

0.12

%

 

53,587

 

 

14

 

 

0.10

%

 

115,928

 

 

505

 

 

1.73

%

FHLB and PPPLF borrowings

3,698,666

 

 

19,207

 

 

2.07

%

 

4,117,181

 

 

20,146

 

 

1.95

%

 

5,244,495

 

 

30,011

 

 

2.27

%

Notes and other borrowings

722,581

 

 

9,251

 

 

5.12

%

 

722,271

 

 

9,252

 

 

5.12

%

 

404,086

 

 

5,294

 

 

5.24

%

Total interest bearing liabilities

24,545,515

 

 

57,754

 

 

0.94

%

 

24,877,774

 

 

67,093

 

 

1.07

%

 

25,144,699

 

 

124,099

 

 

1.96

%

Non-interest bearing demand deposits

7,152,967

 

 

 

 

 

 

6,186,718

 

 

 

 

 

 

4,292,943

 

 

 

 

 

Other non-interest bearing liabilities

772,277

 

 

 

 

 

 

803,498

 

 

 

 

 

 

686,027

 

 

 

 

 

Total liabilities

32,470,759

 

 

 

 

 

 

31,867,990

 

 

 

 

 

 

30,123,669

 

 

 

 

 

Stockholders' equity

2,945,995

 

 

 

 

 

 

2,822,776

 

 

 

 

 

 

2,964,546

 

 

 

 

 

Total liabilities and stockholders' equity

$

35,416,754

 

 

 

 

 

 

$

34,690,766

 

 

 

 

 

 

$

33,088,215

 

 

 

 

 

Net interest income

 

 

$

197,736

 

 

 

 

 

 

$

191,968

 

 

 

 

 

 

$

190,069

 

 

 

Interest rate spread

 

 

 

 

2.07

%

 

 

 

 

 

2.06

%

 

 

 

 

 

2.01

%

Net interest margin

 

 

 

 

2.33

%

 

 

 

 

 

2.32

%

 

 

 

 

 

2.41

%

(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)

 

 

 

Years Ended December 31,

 

 

2020

 

2019

 

 

Average
Balance

 

Interest (1)

 

Yield/
Rate (1)

 

Average
Balance

 

Interest (1)

 

Yield/
Rate (1)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

23,385,832

 

 

$

879,082

 

 

3.76

%

 

$

22,553,250

 

 

$

998,130

 

 

4.43

%

Investment securities (2)

 

8,739,023

 

 

196,954

 

 

2.25

%

 

8,231,858

 

 

284,849

 

 

3.46

%

Other interest earning assets

 

672,634

 

 

9,578

 

 

1.42

%

 

555,992

 

 

19,902

 

 

3.58

%

Total interest earning assets

 

32,797,489

 

 

1,085,614

 

 

3.31

%

 

31,341,100

 

 

1,302,881

 

 

4.16

%

Allowance for credit losses

 

(236,704)

 

 

 

 

 

 

(112,890)

 

 

 

 

 

Non-interest earning assets

 

1,860,322

 

 

 

 

 

 

1,625,579

 

 

 

 

 

Total assets

 

$

34,421,107

 

 

 

 

 

 

$

32,853,789

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

 

$

2,582,951

 

 

19,445

 

 

0.75

%

 

$

1,824,803

 

 

25,054

 

 

1.37

%

Savings and money market deposits

 

10,843,894

 

 

85,572

 

 

0.79

%

 

10,922,819

 

 

197,942

 

 

1.81

%

Time deposits

 

6,617,939

 

 

94,963

 

 

1.43

%

 

6,928,499

 

 

162,184

 

 

2.34

%

Total interest bearing deposits

 

20,044,784

 

 

199,980

 

 

1.00

%

 

19,676,121

 

 

385,180

 

 

1.96

%

Short term borrowings

 

71,858

 

 

418

 

 

0.58

%

 

124,888

 

 

2,802

 

 

2.24

%

FHLB and PPPLF borrowings

 

4,295,882

 

 

85,491

 

 

1.99

%

 

5,089,524

 

 

119,901

 

 

2.36

%

Notes and other borrowings

 

592,521

 

 

29,962

 

 

5.06

%

 

403,704

 

 

21,202

 

 

5.25

%

Total interest bearing liabilities

 

25,005,045

 

 

315,851

 

 

1.26

%

 

25,294,237

 

 

529,085

 

 

2.09

%

Non-interest bearing demand deposits

 

5,760,309

 

 

 

 

 

 

3,950,612

 

 

 

 

 

Other non-interest bearing liabilities

 

786,337

 

 

 

 

 

 

662,590

 

 

 

 

 

Total liabilities

 

31,551,691

 

 

 

 

 

 

29,907,439

 

 

 

 

 

Stockholders' equity

 

2,869,416

 

 

 

 

 

 

2,946,350

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

34,421,107

 

 

 

 

 

 

$

32,853,789

 

 

 

 

 

Net interest income

 

 

 

$

769,763

 

 

 

 

 

 

$

773,796

 

 

 

Interest rate spread

 

 

 

 

 

2.05

%

 

 

 

 

 

2.07

%

Net interest margin

 

 

 

 

 

2.35

%

 

 

 

 

 

2.47

%

(1)

On a tax-equivalent basis where applicable

(2)

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 December 31,

 

Years Ended December 31,

2020

 

2019

 

2020

 

2019

Basic earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Net income

$

85,737

 

 

$

89,456

 

 

$

197,853

 

 

$

313,098

 

Distributed and undistributed earnings allocated to participating securities

(4,015)

 

 

(3,971)

 

 

(8,882)

 

 

(13,371)

 

Income allocated to common stockholders for basic earnings per common share

$

81,722

 

 

$

85,485

 

 

$

188,971

 

 

$

299,727

 

Denominator:

 

 

 

 

 

 

 

Weighted average common shares outstanding

92,725,905

 

 

95,000,894

 

 

92,869,736

 

 

96,581,290

 

Less average unvested stock awards

(1,160,984)

 

 

(1,065,813)

 

 

(1,163,480)

 

 

(1,127,275)

 

Weighted average shares for basic earnings per common share

91,564,921

 

 

93,935,081

 

 

91,706,256

 

 

95,454,015

 

Basic earnings per common share

$

0.89

 

 

$

0.91

 

 

$

2.06

 

 

$

3.14

 

Diluted earnings per common share:

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

Income allocated to common stockholders for basic earnings per common share

$

81,722

 

 

$

85,485

 

 

$

188,971

 

 

$

299,727

 

Adjustment for earnings reallocated from participating securities

(67)

 

 

(41)

 

 

(123)

 

 

(175)

 

Income used in calculating diluted earnings per common share

$

81,655

 

 

$

85,444

 

 

$

188,848

 

 

$

299,552

 

Denominator:

 

 

 

 

 

 

 

Weighted average shares for basic earnings per common share

91,564,921

 

 

93,935,081

 

 

91,706,256

 

 

95,454,015

 

Dilutive effect of stock options

20,179

 

 

186,967

 

 

24,608

 

 

202,890

 

Weighted average shares for diluted earnings per common share

91,585,100

 

 

94,122,048

 

 

91,730,864

 

 

95,656,905

 

Diluted earnings per common share

$

0.89

 

 

$

0.91

 

 

$

2.06

 

 

$

3.13

 

 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

2020

 

2019

 

2020

 

2019

Financial ratios (4)

 

 

 

 

 

 

 

Return on average assets

0.96

%

 

1.07

%

 

0.57

%

 

0.95

%

Return on average stockholders’ equity

11.6

%

 

12.0

%

 

6.9

%

 

10.6

%

Net interest margin (3)

2.33

%

 

2.41

%

 

2.35

%

 

2.47

%

 

December 31, 2020

 

December 31, 2019

Asset quality ratios

 

 

 

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

1.02

%

 

0.88

%

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

0.71

%

 

0.63

%

Allowance for credit losses to total loans

1.08

%

 

0.47

%

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

105.26

%

 

53.07

%

Net charge-offs to average loans

0.26

%

 

0.05

%

(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 month period.

(5)

Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $51.3 million or 0.22% of total loans and 0.15% of total assets, at December 31, 2020; and $45.7 million or 0.20% of total loans and 0.14% of total assets, at December 31, 2019.

 

December 31, 2020

 

December 31, 2019

 

Required to be Considered Well Capitalized

 

BankUnited, Inc.

 

BankUnited, N.A.

 

BankUnited, Inc.

 

BankUnited, N.A.

 

Capital ratios

 

 

 

 

 

 

 

 

 

Tier 1 leverage

8.6

%

 

9.5

%

 

8.9

%

 

9.3

%

 

5.0

%

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

12.6

%

 

13.9

%

 

12.3

%

 

12.9

%

 

6.5

%

Total risk-based capital

14.7

%

 

14.8

%

 

12.8

%

 

13.4

%

 

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 12.4% and 13.7%, respectively, at December 31, 2020. The increase in the total risk-based capital ratio for BankUnited, Inc. from December 31, 2019 to December 31, 2020 includes the issuance of $300 million in subordinated debt in the second quarter of 2020.

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 adoption of the CECL accounting methodology, which may impact comparability of operating results to prior periods. This measure also provides a meaningful basis for comparison to other financial institutions and is a measure frequently cited by investors. The following table reconciles the non-GAAP financial measurement of PPNR to the comparable GAAP financial measurement of income before income taxes for the three months and year ended December 31, 2020 and 2019 and the three months ended September 30, 2020 (in thousands):

 

Three Months Ended
December 31,

 

Three Months Ended
September 30,

 

Three Months Ended
December 31,

 

Years Ended
December 31,

 

2020

 

2020

 

2019

 

2020

 

2019

Income before income taxes (GAAP)

$

106,965

 

 

$

85,912

 

 

$

104,528

 

 

$

249,359

 

 

$

403,996

 

Plus: Provision for (recovery of) credit losses

(1,643)

 

 

29,232

 

 

(469)

 

 

178,431

 

 

8,904

 

PPNR (non-GAAP)

$

105,322

 

 

$

115,144

 

 

$

104,059

 

 

$

427,790

 

 

$

412,900

 

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 December 31, 2020 (dollars in thousands):

Total loans (GAAP)

$

23,866,042

 

Less: Government insured residential loans

1,419,074

 

Less: PPP loans

781,811

 

Less: MWL

1,259,408

 

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

$

20,405,749

 

 

 

ACL

$

257,323

 

 

ACL to total loans (GAAP)

1.08

%

 

 

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

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):

 

December 31, 2020

 

September 30, 2020

 

December 31, 2019

Total stockholders’ equity

$

2,983,012

 

 

$

2,864,824

 

 

$

2,980,779

 

Less: goodwill and other intangible assets

77,637

 

 

77,641

 

 

77,674

 

Tangible stockholders’ equity

$

2,905,375

 

 

$

2,787,183

 

 

$

2,903,105

 

 

 

 

 

 

 

Common shares issued and outstanding

93,067,500

 

 

92,388,641

 

 

95,128,231

 

 

 

 

 

 

 

Book value per common share

$

32.05

 

 

$

31.01

 

 

$

31.33

 

 

 

 

 

 

 

Tangible book value per common share

$

31.22

 

 

$

30.17

 

 

$

30.52

 

 

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

Source: BankUnited, Inc.