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): January 26, 2024 (January 26, 2024 )
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| | ||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(Registrant’s telephone number, including area code): (305 ) 569-2000
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:
Securities registered pursuant to Section 12(b) of the Act:
| Class | Trading Symbol | Name of Exchange on Which Registered | ||||||||||||
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 ☐
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 ☐
Item 2.02 Results of Operations and Financial Condition.
On January 26, 2024, BankUnited, Inc. (the “Company”) reported its results for the quarter ended December 31, 2023. A copy of the Company’s press release containing this information and slides containing supplemental information related to this release are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | ||||||||||
| January 26, 2024 | |||||||||||
| January 26, 2024 | |||||||||||
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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: | January 26, 2024 | BANKUNITED, INC. | |||||||||
| /s/ Leslie N. Lunak | |||||||||||
| Name: | Leslie N. Lunak | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
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EXHIBIT INDEX
| Exhibit Number | Description | ||||||||||
| January 26, 2024 | |||||||||||
| January 26, 2024 | |||||||||||
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Exhibit 99.1
BANKUNITED, INC. REPORTS 2023 RESULTS
Miami Lakes, Fla. — January 26, 2024 — BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2023.
"We finished the year with continued improvement on both sides of our balance sheet, expanding margin and strong credit performance. We are benefiting from a strong economy in our primary market and are looking forward to 2024 with great optimism" said Rajinder Singh, Chairman, President and Chief Executive Officer.
For the quarter ended December 31, 2023, the Company reported net income of $20.8 million, or $0.27 per diluted share, compared to $47.0 million, or $0.63 per diluted share, for the immediately preceding quarter ended September 30, 2023 and $64.2 million, or $0.82 per diluted share, for the quarter ended December 31, 2022. For the year ended December 31, 2023, the Company reported net income of $178.7 million, or $2.38 per diluted share, compared to $285.0 million, or $3.54 per diluted share, for the year ended December 31, 2022. Results for the quarter ended December 31, 2023 were negatively impacted by $41.8 million of notable items impacting income before taxes, related to the FDIC special assessment and a loss on sale of operating lease equipment as detailed below.
Quarterly Highlights
•Two notable items totaling $41.8 million impacted income before income taxes for the quarter ended December 31, 2023 (in thousands):
FDIC special assessment | $ | 35,356 | |||
Loss on sale of operating lease equipment | 6,479 | ||||
| $ | 41,835 | ||||
The loss on sale of operating lease equipment of $6.5 million compares to a gain of $4.2 million on sale of operating lease equipment in the immediately preceding quarter, for a variance of $10.7 million.
•We continued to execute on near-term strategic priorities this quarter:
◦The net interest margin, calculated on a tax-equivalent basis, expanded this quarter to 2.60% from 2.56% for the immediately preceding quarter.
◦Non-brokered deposits grew by $604 million for the quarter ended December 31, 2023. Total deposits grew by $426 million.
◦Non-interest bearing deposits declined by $521 million for the quarter, to 26% of total deposits at December 31, 2023, from 28% at September 30, 2023. On an average basis, non-interest bearing deposits were relatively flat to the prior quarter, declining by only $28.5 million. Most of the period-end decline was attributable to quarter-end outflows related to seasonality in the residential real estate sector, impacting our title solutions vertical and other mortgage related deposits.
◦Residential loans declined by $172 million for the quarter, while our core C&I and commercial real estate portfolios grew by a total of $476 million. Since December 31, 2022, residential loans have declined by $692 million.
◦The amortized cost of the investment securities portfolio declined by $106 million during the quarter ended December 31, 2023 and has declined by $959 million since December 31, 2022.
◦Wholesale funding, including FHLB advances and brokered deposits, declined by $228 million for the quarter. We have paid down FHLB advances by $2.4 billion since March 31, 2023.
◦Liquidity remains ample. Total same day available liquidity was $13.6 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 152% and an estimated 66% of our deposits were insured or collateralized at December 31, 2023.
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◦Our capital position is robust. At December 31, 2023, CET1 was 11.4% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.0% at December 31, 2023. The ratio of tangible common equity/tangible assets increased to 7.0% at December 31, 2023.
•For the quarter ended December 31, 2023, the provision for credit losses was $19.3 million compared to $33.0 million for the immediately preceding quarter. The ratio of the ACL to total loans increased to 0.82% at December 31, 2023, from 0.80% at September 30, 2023.
•The net charge-off ratio for the year ended December 31, 2023 was 0.09%. NPAs remained low, totaling $130.6 million at December 31, 2023, down from $140.5 million at September 30, 2023. The NPA ratio at December 31, 2023 declined to 0.37%, including 0.12% related to the guaranteed portion of non-performing SBA loans, from 0.40%, including 0.11% related to the guaranteed portion of non-performing SBA loans at September 30, 2023.
•As expected in the current macro-environment, the average cost of total deposits increased to 2.96% for the quarter ended December 31, 2023 from 2.74% for the immediately preceding quarter. This increase of 0.22% was smaller than the 0.28% increase in the cost of deposits for the quarter ended September 30, 2023, continuing the trend of a declining rate of increase in deposit costs. The yield on average interest earning assets increased to 5.70% for the quarter ended December 31, 2023 from 5.52% for the immediately preceding quarter.
•Our commercial real estate exposure is modest. Commercial real estate loans totaled 23.6% of loans at December 31, 2023, representing 169% of the Bank's total risk based capital. At December 31, 2023, the weighted average LTV of the CRE portfolio was 56.0% and the weighted average DSCR was 1.80. 58% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area.
•We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.96 at December 31, 2023. Held to maturity securities were not significant.
•The net unrealized pre-tax loss on the securities portfolio improved by $109 million for the quarter ended December 31, 2023, now representing 6% of amortized cost. AOCI improved by $50 million.
•Book value and tangible book value per common share continued to grow, to $34.66 and $33.62, respectively, at December 31, 2023, compared to $33.92 and $32.88, respectively, at September 30, 2023 and $32.19 and $31.16, respectively, at December 31, 2022.
Loans
A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands):
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||
| Residential | $ | 8,209,027 | 33.3 | % | $ | 8,380,568 | 34.4 | % | $ | 8,900,714 | 35.7 | % | |||||||||||||||||||||||
| Non-owner occupied commercial real estate | 5,323,241 | 21.6 | % | 5,296,784 | 21.7 | % | 5,405,597 | 21.7 | % | ||||||||||||||||||||||||||
| Construction and land | 495,992 | 2.0 | % | 445,273 | 1.8 | % | 294,360 | 1.2 | % | ||||||||||||||||||||||||||
| Owner occupied commercial real estate | 1,935,743 | 7.9 | % | 1,851,246 | 7.6 | % | 1,890,813 | 7.6 | % | ||||||||||||||||||||||||||
| Commercial and industrial | 6,971,981 | 28.3 | % | 6,658,010 | 27.4 | % | 6,417,721 | 25.9 | % | ||||||||||||||||||||||||||
| Pinnacle - municipal finance | 884,690 | 3.6 | % | 900,199 | 3.7 | % | 912,122 | 3.7 | % | ||||||||||||||||||||||||||
| Franchise finance | 182,408 | 0.7 | % | 196,745 | 0.8 | % | 253,774 | 1.0 | % | ||||||||||||||||||||||||||
| Equipment finance | 197,939 | 0.8 | % | 219,874 | 0.9 | % | 286,147 | 1.1 | % | ||||||||||||||||||||||||||
| Mortgage warehouse lending ("MWL") | 432,663 | 1.8 | % | 407,577 | 1.7 | % | 524,740 | 2.1 | % | ||||||||||||||||||||||||||
| $ | 24,633,684 | 100.0 | % | $ | 24,356,276 | 100.0 | % | $ | 24,885,988 | 100.0 | % | ||||||||||||||||||||||||
Consistent with our balance sheet strategy, for the quarter ended December 31, 2023, residential loans declined by $172 million, while C&I grew by $399 million, CRE grew by $77 million and MWL grew by $25 million. Franchise, equipment and municipal finance declined by $52 million in aggregate.
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Asset Quality and the Allowance for Credit Losses ("ACL")
The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended December 31, 2023, September 30, 2023 and December 31, 2022 (dollars in thousands):
| ACL | ACL to Total Loans | ACL to Non-Performing Loans | Net Charge-offs to Average Loans (1) | ||||||||||||||||||||
| December 31, 2022 | $ | 147,946 | 0.59 | % | 140.88 | % | 0.22 | % | |||||||||||||||
| September 30, 2023 | $ | 196,063 | 0.80 | % | 143.22 | % | 0.07 | % | |||||||||||||||
| December 31, 2023 | $ | 202,689 | 0.82 | % | 159.54 | % | 0.09 | % | |||||||||||||||
(1) Annualized for the nine months ended September 30, 2023.
The ACL at December 31, 2023 represents management's estimate of lifetime expected credit losses given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended December 31, 2023, the provision for credit losses was $19.3 million, including $16.3 million related to funded loans. Factors impacting the provision for credit losses and increase in the ACL for the quarter ended December 31, 2023 included the shift in balance sheet composition toward commercial loan categories that typically carry higher reserves and risk rating migration.
The following table summarizes the activity in the ACL for the periods indicated (in thousands):
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Beginning balance | $ | 196,063 | $ | 130,671 | $ | 147,946 | $ | 126,457 | |||||||||||||||
| Impact of adoption of new accounting pronouncement (ASU 2022-02) | N/A | N/A | (1,794) | N/A | |||||||||||||||||||
| Balance after impact of adoption of new accounting pronouncement (ASU 2022-02) | 196,063 | 130,671 | 146,152 | 126,457 | |||||||||||||||||||
| Provision | 16,257 | 40,408 | 78,924 | 73,814 | |||||||||||||||||||
| Net charge-offs | (9,631) | (23,133) | (22,387) | (52,325) | |||||||||||||||||||
| Ending balance | $ | 202,689 | $ | 147,946 | $ | 202,689 | $ | 147,946 | |||||||||||||||
Non-performing loans totaled $127.0 million or 0.52% of total loans at December 31, 2023, compared to $136.9 million or 0.56% of total loans at September 30, 2023. Non-performing loans included $41.8 million and $37.8 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.17% and 0.16% of total loans at December 31, 2023 and September 30, 2023, respectively.
The following table presents criticized and classified commercial loans at the dates indicated (in thousands):
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||
| Special mention | $ | 319,905 | $ | 341,999 | $ | 51,433 | |||||||||||
| Substandard - accruing | 711,266 | 534,336 | 605,965 | ||||||||||||||
| Substandard - non-accruing | 86,903 | 96,248 | 75,125 | ||||||||||||||
| Doubtful | 19,035 | 19,344 | 7,990 | ||||||||||||||
| Total | $ | 1,137,109 | $ | 991,927 | $ | 740,513 | |||||||||||
The increase in the substandard accruing category for the quarter ended December 31, 2023 included $74 million of C&I and $118 million of CRE. All of these loans are performing. The substantial majority of the increase was attributable to a small number of loans. Increasing operating costs, including insurance and interest costs, and higher vacancy rates for some office properties were contributing factors.
Net Interest Income
Net interest income for the quarter ended December 31, 2023 was $217.2 million, compared to $214.8 million for the immediately preceding quarter ended September 30, 2023 and $243.1 million for the quarter ended December 31, 2022. Interest income increased by $12.7 million for the quarter ended December 31, 2023 compared to the immediately preceding quarter, while interest expense increased by $10.3 million.
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The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.04% to 2.60% for the quarter ended December 31, 2023, from 2.56% for the immediately preceding quarter ended September 30, 2023. Factors impacting the net interest margin for the quarter ended December 31, 2023 were:
•The tax-equivalent yield on loans increased to 5.69% for the quarter ended December 31, 2023, from 5.54% for the quarter ended September 30, 2023. This increase reflects the origination of new loans at higher rates, re-positioning of the portfolio and to a lesser extent, the resetting of variable rate loans to higher coupon rates.
•The tax-equivalent yield on investment securities increased to 5.73% for the quarter ended December 31, 2023, from 5.48% for the quarter ended September 30, 2023. Factors leading to this increase included the reset of coupon rates on variable rate securities and retrospective accounting adjustments related to prepayment speeds on certain securities.
•The average cost of interest bearing deposits increased to 4.04% for the quarter ended December 31, 2023 from 3.76% for the quarter ended September 30, 2023, a continuing response to the higher interest rate environment.
•The reduction in the proportion of total funding comprised of more expensive wholesale funding also contributed to the increase in the net interest margin.
Non-interest income and Non-interest expense
Non-interest income totaled $17.1 million for the quarter ended December 31, 2023, compared to $27.7 million for the quarter ended September 30, 2023. The decrease compared to the quarter ended September 30, 2023 was primarily attributable to a $6.5 million loss on sale of lease equipment during the quarter ended December 31, 2023 compared to a $4.2 million gain on sale of lease equipment during the prior quarter.
Non-interest expense totaled $190.9 million for the quarter ended December 31, 2023, compared to $147.1 million for the immediately preceding quarter ended September 30, 2023. The increase over the prior quarter was primarily attributable to a $35.4 million FDIC special assessment recorded during the quarter ended December 31, 2023. The increase in compensation and benefits for the quarter ended December 31, 2023 compared to the immediately preceding quarter primarily resulted from an increase in the Company's stock price, impacting the value of liability-classified share based compensation awards.
Earnings Conference Call and Presentation
A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Friday, January 26, 2024 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish.
The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BI50a5352f746b4dc890465ca3d32e6db9. For those unable to join the live event, an archived webcast will be available in the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast.
About BankUnited, Inc.
BankUnited, Inc., with total assets of $35.8 billion at December 31, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, the New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused on the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com.
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Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance.
The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitation) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as but not limited to adverse events or conditions impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 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).
Contact
BankUnited, Inc.
Investor Relations:
Leslie N. Lunak, 786-313-1698
llunak@bankunited.com
Source: BankUnited, Inc.
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BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except share and per share data)
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Cash and due from banks: | |||||||||||||||||
| Non-interest bearing | $ | 14,945 | $ | 12,391 | $ | 16,068 | |||||||||||
| Interest bearing | 573,338 | 379,494 | 556,579 | ||||||||||||||
| Cash and cash equivalents | 588,283 | 391,885 | 572,647 | ||||||||||||||
Investment securities (including securities reported at fair value of $8,867,354, $8,876,484 and $9,745,327) | 8,877,354 | 8,886,484 | 9,755,327 | ||||||||||||||
| Non-marketable equity securities | 310,084 | 312,159 | 294,172 | ||||||||||||||
| Loans | 24,633,684 | 24,356,276 | 24,885,988 | ||||||||||||||
| Allowance for credit losses | (202,689) | (196,063) | (147,946) | ||||||||||||||
| Loans, net | 24,430,995 | 24,160,213 | 24,738,042 | ||||||||||||||
| Bank owned life insurance | 318,459 | 319,808 | 308,212 | ||||||||||||||
| Operating lease equipment, net | 371,909 | 460,146 | 539,799 | ||||||||||||||
| Goodwill | 77,637 | 77,637 | 77,637 | ||||||||||||||
| Other assets | 786,886 | 781,332 | 740,876 | ||||||||||||||
| Total assets | $ | 35,761,607 | $ | 35,389,664 | $ | 37,026,712 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Liabilities: | |||||||||||||||||
| Demand deposits: | |||||||||||||||||
| Non-interest bearing | $ | 6,835,236 | $ | 7,356,523 | $ | 8,037,848 | |||||||||||
| Interest bearing | 3,403,539 | 3,290,391 | 2,142,067 | ||||||||||||||
| Savings and money market | 11,135,708 | 10,276,071 | 13,061,341 | ||||||||||||||
| Time | 5,163,995 | 5,189,681 | 4,268,078 | ||||||||||||||
| Total deposits | 26,538,478 | 26,112,666 | 27,509,334 | ||||||||||||||
| Federal funds purchased | — | — | 190,000 | ||||||||||||||
| FHLB advances | 5,115,000 | 5,165,000 | 5,420,000 | ||||||||||||||
| Notes and other borrowings | 708,973 | 715,197 | 720,923 | ||||||||||||||
| Other liabilities | 821,235 | 872,731 | 750,474 | ||||||||||||||
| Total liabilities | 33,183,686 | 32,865,594 | 34,590,731 | ||||||||||||||
| Commitments and contingencies | |||||||||||||||||
| Stockholders' equity: | |||||||||||||||||
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,372,505, 74,413,059 and 75,674,587 shares issued and outstanding | 744 | 744 | 757 | ||||||||||||||
| Paid-in capital | 283,642 | 279,672 | 321,729 | ||||||||||||||
| Retained earnings | 2,650,956 | 2,650,850 | 2,551,400 | ||||||||||||||
| Accumulated other comprehensive loss | (357,421) | (407,196) | (437,905) | ||||||||||||||
| Total stockholders' equity | 2,577,921 | 2,524,070 | 2,435,981 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,761,607 | $ | 35,389,664 | $ | 37,026,712 | |||||||||||
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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, | December 31, | |||||||||||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||
| Loans | $ | 346,255 | $ | 337,014 | $ | 288,973 | $ | 1,318,217 | $ | 934,642 | |||||||||||||||||||
| Investment securities | 125,993 | 122,857 | 105,172 | 488,212 | 280,100 | ||||||||||||||||||||||||
| Other | 10,957 | 10,668 | 7,345 | 51,152 | 15,709 | ||||||||||||||||||||||||
| Total interest income | 483,205 | 470,539 | 401,490 | 1,857,581 | 1,230,451 | ||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||
| Deposits | 192,833 | 176,974 | 94,403 | 660,305 | 179,972 | ||||||||||||||||||||||||
| Borrowings | 73,162 | 78,723 | 64,021 | 323,472 | 137,519 | ||||||||||||||||||||||||
| Total interest expense | 265,995 | 255,697 | 158,424 | 983,777 | 317,491 | ||||||||||||||||||||||||
| Net interest income before provision for credit losses | 217,210 | 214,842 | 243,066 | 873,804 | 912,960 | ||||||||||||||||||||||||
| Provision for credit losses | 19,253 | 33,049 | 39,608 | 87,607 | 75,154 | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | 197,957 | 181,793 | 203,458 | 786,197 | 837,806 | ||||||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||
| Deposit service charges and fees | 5,386 | 5,402 | 5,482 | 21,682 | 23,402 | ||||||||||||||||||||||||
| Gain (loss) on investment securities, net | 617 | 887 | 320 | (10,052) | (15,805) | ||||||||||||||||||||||||
| Lease financing | 3,723 | 16,531 | 14,153 | 45,882 | 54,111 | ||||||||||||||||||||||||
| Other non-interest income | 7,366 | 4,904 | 6,858 | 29,326 | 15,928 | ||||||||||||||||||||||||
| Total non-interest income | 17,092 | 27,724 | 26,813 | 86,838 | 77,636 | ||||||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||
| Employee compensation and benefits | 73,454 | 68,825 | 69,902 | 280,744 | 265,548 | ||||||||||||||||||||||||
| Occupancy and equipment | 10,610 | 10,890 | 10,770 | 43,345 | 45,400 | ||||||||||||||||||||||||
| Deposit insurance expense | 43,453 | 7,790 | 6,205 | 66,747 | 17,999 | ||||||||||||||||||||||||
| Professional fees | 5,052 | 2,696 | 3,028 | 14,184 | 11,730 | ||||||||||||||||||||||||
| Technology | 18,628 | 19,193 | 22,388 | 79,984 | 77,103 | ||||||||||||||||||||||||
| Depreciation of operating lease equipment | 10,476 | 11,217 | 12,547 | 44,446 | 50,388 | ||||||||||||||||||||||||
| Other non-interest expense | 29,190 | 26,479 | 23,639 | 106,501 | 72,142 | ||||||||||||||||||||||||
| Total non-interest expense | 190,863 | 147,090 | 148,479 | 635,951 | 540,310 | ||||||||||||||||||||||||
| Income before income taxes | 24,186 | 62,427 | 81,792 | 237,084 | 375,132 | ||||||||||||||||||||||||
| Provision for income taxes | 3,374 | 15,446 | 17,585 | 58,413 | 90,161 | ||||||||||||||||||||||||
| Net income | $ | 20,812 | $ | 46,981 | $ | 64,207 | $ | 178,671 | $ | 284,971 | |||||||||||||||||||
| Earnings per common share, basic | $ | 0.27 | $ | 0.63 | $ | 0.83 | $ | 2.39 | $ | 3.55 | |||||||||||||||||||
| Earnings per common share, diluted | $ | 0.27 | $ | 0.63 | $ | 0.82 | $ | 2.38 | $ | 3.54 | |||||||||||||||||||
7
BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
| Three Months Ended December 31, | Three Months Ended September 30, | Three Months Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest (1) | Yield/ Rate (1)(2) | Average Balance | Interest (1) | Yield/ Rate (1)(2) | Average Balance | Interest (1) | Yield/ Rate (1)(2) | |||||||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans | $ | 24,416,013 | $ | 349,603 | 5.69 | % | $ | 24,417,433 | $ | 340,357 | 5.54 | % | $ | 24,624,062 | $ | 292,272 | 4.72 | % | |||||||||||||||||||||||||||||||||||
Investment securities (3) | 8,850,397 | 126,870 | 5.73 | % | 9,034,116 | 123,794 | 5.48 | % | 9,788,969 | 106,034 | 4.33 | % | |||||||||||||||||||||||||||||||||||||||||
| Other interest earning assets | 801,833 | 10,957 | 5.42 | % | 785,146 | 10,668 | 5.39 | % | 710,315 | 7,345 | 4.10 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest earning assets | 34,068,243 | 487,430 | 5.70 | % | 34,236,695 | 474,819 | 5.52 | % | 35,123,346 | 405,651 | 4.60 | % | |||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (198,984) | (173,407) | (137,300) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest earning assets | 1,715,795 | 1,747,310 | 1,837,156 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 35,585,054 | $ | 35,810,598 | $ | 36,823,202 | |||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing demand deposits | $ | 3,433,216 | $ | 31,978 | 3.70 | % | $ | 3,038,870 | $ | 25,491 | 3.33 | % | $ | 2,183,854 | $ | 6,704 | 1.22 | % | |||||||||||||||||||||||||||||||||||
| Savings and money market deposits | 10,287,945 | 104,188 | 4.02 | % | 10,205,765 | 97,956 | 3.81 | % | 12,054,892 | 68,001 | 2.24 | % | |||||||||||||||||||||||||||||||||||||||||
| Time deposits | 5,225,756 | 56,667 | 4.30 | % | 5,420,522 | 53,527 | 3.92 | % | 3,960,111 | 19,698 | 1.97 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing deposits | 18,946,917 | 192,833 | 4.04 | % | 18,665,157 | 176,974 | 3.76 | % | 18,198,857 | 94,403 | 2.06 | % | |||||||||||||||||||||||||||||||||||||||||
| Federal funds purchased | — | — | — | % | — | — | — | % | 175,637 | 1,677 | 3.74 | % | |||||||||||||||||||||||||||||||||||||||||
| FHLB advances | 5,545,978 | 64,034 | 4.58 | % | 6,040,870 | 69,525 | 4.57 | % | 6,125,435 | 53,084 | 3.44 | % | |||||||||||||||||||||||||||||||||||||||||
| Notes and other borrowings | 711,073 | 9,128 | 5.13 | % | 715,307 | 9,198 | 5.14 | % | 721,044 | 9,260 | 5.14 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 25,203,968 | 265,995 | 4.19 | % | 25,421,334 | 255,697 | 3.99 | % | 25,220,973 | 158,424 | 2.49 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest bearing demand deposits | 6,909,027 | 6,937,537 | 8,237,885 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-interest bearing liabilities | 903,099 | 868,178 | 879,207 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 33,016,094 | 33,227,049 | 34,338,065 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' equity | 2,568,960 | 2,583,549 | 2,485,137 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,585,054 | $ | 35,810,598 | $ | 36,823,202 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 221,435 | $ | 219,122 | $ | 247,227 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate spread | 1.51 | % | 1.53 | % | 2.11 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 2.60 | % | 2.56 | % | 2.81 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1) On a tax-equivalent basis where applicable
(2) Annualized
(3) At fair value except for securities held to maturity
8
BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||||||||||||||
| Average Balance | Interest (1) | Yield/ Rate (1) | Average Balance | Interest (1) | Yield/ Rate (1) | ||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||||||||||||||
| Loans | $ | 24,558,430 | $ | 1,331,578 | 5.42 | % | $ | 23,937,857 | $ | 947,386 | 3.96 | % | |||||||||||||||||||||||
Investment securities (2) | 9,228,718 | 491,851 | 5.33 | % | 10,081,701 | 283,081 | 2.81 | % | |||||||||||||||||||||||||||
| Other interest earning assets | 986,186 | 51,152 | 5.19 | % | 675,068 | 15,709 | 2.33 | % | |||||||||||||||||||||||||||
| Total interest earning assets | 34,773,334 | 1,874,581 | 5.39 | % | 34,694,626 | 1,246,176 | 3.59 | % | |||||||||||||||||||||||||||
| Allowance for credit losses | (171,618) | (132,033) | |||||||||||||||||||||||||||||||||
| Non-interest earning assets | 1,749,981 | 1,721,570 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 36,351,697 | $ | 36,284,163 | |||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Interest bearing demand deposits | $ | 2,905,968 | $ | 86,759 | 2.99 | % | $ | 2,538,906 | $ | 13,919 | 0.55 | % | |||||||||||||||||||||||
| Savings and money market deposits | 10,704,470 | 382,432 | 3.57 | % | 12,874,240 | 130,705 | 1.02 | % | |||||||||||||||||||||||||||
| Time deposits | 5,169,458 | 191,114 | 3.70 | % | 3,338,671 | 35,348 | 1.06 | % | |||||||||||||||||||||||||||
| Total interest bearing deposits | 18,779,896 | 660,305 | 3.52 | % | 18,751,817 | 179,972 | 0.96 | % | |||||||||||||||||||||||||||
| Federal funds purchased | 35,403 | 1,611 | 4.55 | % | 157,979 | 2,723 | 1.72 | % | |||||||||||||||||||||||||||
| FHLB advances | 6,331,685 | 285,026 | 4.50 | % | 4,383,507 | 97,763 | 2.23 | % | |||||||||||||||||||||||||||
| Notes and other borrowings | 716,633 | 36,835 | 5.14 | % | 721,223 | 37,033 | 5.13 | % | |||||||||||||||||||||||||||
| Total interest bearing liabilities | 25,863,617 | 983,777 | 3.80 | % | 24,014,526 | 317,491 | 1.32 | % | |||||||||||||||||||||||||||
| Non-interest bearing demand deposits | 7,091,029 | 8,861,111 | |||||||||||||||||||||||||||||||||
| Other non-interest bearing liabilities | 848,023 | 708,473 | |||||||||||||||||||||||||||||||||
| Total liabilities | 33,802,669 | 33,584,110 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 2,549,028 | 2,700,053 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 36,351,697 | $ | 36,284,163 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 890,804 | $ | 928,685 | |||||||||||||||||||||||||||||||
| Interest rate spread | 1.59 | % | 2.27 | % | |||||||||||||||||||||||||||||||
| Net interest margin | 2.56 | % | 2.68 | % | |||||||||||||||||||||||||||||||
(1) On a tax-equivalent basis where applicable
(2) 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 December 31, | Years Ended December 31, | ||||||||||||||||||||||
| c | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Basic earnings per common share: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income | $ | 20,812 | $ | 64,207 | $ | 178,671 | $ | 284,971 | |||||||||||||||
Distributed and undistributed earnings allocated to participating securities | (930) | (1,519) | (3,565) | (5,075) | |||||||||||||||||||
| Income allocated to common stockholders for basic earnings per common share | $ | 19,882 | $ | 62,688 | $ | 175,106 | $ | 279,896 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares outstanding | 74,384,185 | 77,043,587 | 74,493,898 | 80,032,356 | |||||||||||||||||||
| Less average unvested stock awards | (1,130,715) | (1,207,275) | (1,168,004) | (1,224,568) | |||||||||||||||||||
| Weighted average shares for basic earnings per common share | 73,253,470 | 75,836,312 | 73,325,894 | 78,807,788 | |||||||||||||||||||
| Basic earnings per common share | $ | 0.27 | $ | 0.83 | $ | 2.39 | $ | 3.55 | |||||||||||||||
| Diluted earnings per common share: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Income allocated to common stockholders for basic earnings per common share | $ | 19,882 | $ | 62,688 | $ | 175,106 | $ | 279,896 | |||||||||||||||
Adjustment for earnings reallocated from participating securities | — | (184) | (275) | (626) | |||||||||||||||||||
| Income used in calculating diluted earnings per common share | $ | 19,882 | $ | 62,504 | $ | 174,831 | $ | 279,270 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares for basic earnings per common share | 73,253,470 | 75,836,312 | 73,325,894 | 78,807,788 | |||||||||||||||||||
| Dilutive effect of certain share-based awards | 203,123 | 127 | 197,441 | 94 | |||||||||||||||||||
Weighted average shares for diluted earnings per common share | 73,456,593 | 75,836,439 | 73,523,335 | 78,807,882 | |||||||||||||||||||
| Diluted earnings per common share | $ | 0.27 | $ | 0.82 | $ | 2.38 | $ | 3.54 | |||||||||||||||
10
BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
| At or for the Three Months Ended | Years Ended December 31, | ||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Financial ratios (4) | |||||||||||||||||||||||||||||
| Return on average assets | 0.23 | % | 0.52 | % | 0.69 | % | 0.49 | % | 0.79 | % | |||||||||||||||||||
| Return on average stockholders’ equity | 3.2 | % | 7.2 | % | 10.3 | % | 7.0 | % | 10.6 | % | |||||||||||||||||||
Net interest margin (3) | 2.60 | % | 2.56 | % | 2.81 | % | 2.56 | % | 2.68 | % | |||||||||||||||||||
| Loans to deposits | 92.8 | % | 93.3 | % | 90.5 | % | |||||||||||||||||||||||
| Tangible book value per common share | $ | 33.62 | $ | 32.88 | $ | 31.16 | |||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||
| Asset quality ratios | |||||||||||||||||
Non-performing loans to total loans (1)(5) | 0.52 | % | 0.56 | % | 0.42 | % | |||||||||||
Non-performing assets to total assets (2)(5) | 0.37 | % | 0.40 | % | 0.29 | % | |||||||||||
| Allowance for credit losses to total loans | 0.82 | % | 0.80 | % | 0.59 | % | |||||||||||
Allowance for credit losses to non-performing loans (1)(5) | 159.54 | % | 143.22 | % | 140.88 | % | |||||||||||
Net charge-offs to average loans | 0.09 | % | 0.07 | % | 0.22 | % | |||||||||||
(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 periods.
(5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $41.8 million or 0.17% of total loans and 0.12% of total assets at December 31, 2023, $37.8 million or 0.16% of total loans and 0.11% of total assets at September 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022.
| December 31, 2023 | December 31, 2022 | Required to be Considered Well Capitalized | |||||||||||||||||||||||||||
| BankUnited, Inc. | BankUnited, N.A. | BankUnited, Inc. | BankUnited, N.A. | ||||||||||||||||||||||||||
| Capital ratios | |||||||||||||||||||||||||||||
| Tier 1 leverage | 7.9 | % | 9.1 | % | 7.5 | % | 8.4 | % | 5.0 | % | |||||||||||||||||||
| Common Equity Tier 1 ("CET1") risk-based capital | 11.4 | % | 13.1 | % | 11.0 | % | 12.4 | % | 6.5 | % | |||||||||||||||||||
| Total risk-based capital | 13.4 | % | 13.9 | % | 12.7 | % | 12.9 | % | 10.0 | % | |||||||||||||||||||
| Tangible Common Equity/Tangible Assets | 7.0 | % | N/A | 6.4 | % | N/A | N/A | ||||||||||||||||||||||
11
Non-GAAP Financial Measures
Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data):
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||
| Total stockholders’ equity | $ | 2,577,921 | $ | 2,524,070 | $ | 2,435,981 | |||||||||||
| Less: goodwill and other intangible assets | 77,637 | 77,637 | 77,637 | ||||||||||||||
| Tangible stockholders’ equity | $ | 2,500,284 | $ | 2,446,433 | $ | 2,358,344 | |||||||||||
| Common shares issued and outstanding | 74,372,505 | 74,413,059 | 75,674,587 | ||||||||||||||
| Book value per common share | $ | 34.66 | $ | 33.92 | $ | 32.19 | |||||||||||
| Tangible book value per common share | $ | 33.62 | $ | 32.88 | $ | 31.16 | |||||||||||
12
January 26, 2024 Q4 2023 – Supplemental Information 1 Exhibit 99.2
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the current views of BankUnited, Inc. (“BankUnited,” “BKU” or the “Company”) 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 presentation are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitation) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as but not limited to adverse events or conditions impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 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). 2
Quarterly Highlights 3
Improve Asset Mix Improve Funding Profile 2 Maintain Robust Liquidity and Capital Improve Net Interest Margin Execution on Near-term Strategic Priorities Manage Expenses 5 4 3 4 1 • Wholesale funding down $228 million • Non-brokered deposits grew by $604 million • NIDDA at 26% of deposits • Period end decline in NIDDA of $521 million mostly due to seasonality in residential real estate sector • Paid down FHLB advances by $2.4 billion since since Q1 • Resi declined by $172 million • Amortized cost of securities down $106 million • Core C&I and CRE loans grew by $476 million • Net interest margin expanded to 2.60% from 2.56% • Same day available liquidity $13.6 billion • Available liquidity 152% of uninsured, uncollateralized deposits • CET 1 ratio of 11.4%; TCE/TA increased to 7.0% • AOCI improved by $50 million. • Q4 Includes $35.4 million FDIC special assessment, $6.5 million loss on railcar sales • Compensation impacted by value of share based awards Manage credit 6 • ACL/Loans increased to 0.82% • Net charge-offs 0.09% • NPA ratio down to 0.37% from 0.40%
Topics of Current Interest Capital • CET1 ratios of 11.4% at the holding company and 13.1% at the bank • Pro-forma holding company CET1 of 10.0% including AOCI • AOCI improved $50 million quarter-over-quarter • Book value and tangible book value per share of $34.66 and $33.62 Deposits and Funding • Total deposits grew by $426 million • Non-brokered deposits grew by $604 million • Non-interest bearing DDA 26% of total deposits; impacted by residential real estate sector seasonality • Wholesale funding down by $228 million Asset Quality • Low NPA ratio of 0.37% at December 31; 0.25% excluding guaranteed portion of non-accrual SBA loans • Net charge-off rate of 0.09% High Quality CRE Portfolio • High quality CRE portfolio; wtd average DSCR 1.80; wtd average LTV 56.0%; 58% Florida • CRE office wtd average DSCR 1.67; wtd average LTV 65.0%; 60% Florida • Substantially all CRE loans are performing • CRE to total loans 24% • CRE to total risk based capital 169% 1. Tangible book value per share is a non-GAAP financial measure. See section entitled “Non-GAAP Financial Measures” on page 33 5 Net Interest Margin • Net interest margin expanded to 2.60% from 2.56% • Cost of deposits up 22bps to 2.96%; rate of increase continues to decline • Yield on interest earning assets increased to 5.70%
Highlights from Fourth Quarter Earnings Change From ($ in millions, except per share data) Q4’23 Q3’23 Q4’22 Q3’23 Q4’22 Key Highlights Net Interest Income $217 $215 $243 $2 $(26) Provision for Credit Losses $19 $33 $40 $(14) $(21) Total Non-interest Income $17 $28 $27 $(11) $(10) Includes $6.5 million loss on sale of lease equipment Total Non-interest Expense $191 $147 $148 $44 $43 Includes $35.4 million FDIC special assessment Net Income $21 $47 $64 $(26) $(43) EPS $0.27 $0.63 $0.82 $(0.36) $(0.55) Period-end Core C&I and CRE loans $14,727 $14,251 $14,008 $476 $719 Period-end Loans $24,634 $24,356 $24,886 $277 $(252) Strategic runoff in residential and equipment/franchise lending Period-end Non-interest DDA $6,835 $7,357 $8,038 $(521) $(1,203) Seasonality in residential real estate sector related deposits Period-end Deposits $26,538 $26,113 $27,509 $426 $(971) Loans to Deposits 92.8% 93.3% 90.5% (0.5)% 2.3% CET1 11.4% 11.4% 11.0% —% 0.4% Total Capital 13.4% 13.4% 12.7% —% 0.7% Yield on Loans 5.69% 5.54% 4.72% 0.15% 0.97% Yield on Securities 5.73% 5.48% 4.33% 0.25% 1.40% Cost of Deposits 2.96% 2.74% 1.42% 0.22% 1.54% Declining rate of increase in cost of deposits Net Interest Margin 2.60% 2.56% 2.81% 0.04% (0.21)% Non-performing Assets to Total Assets(1) 0.37% 0.40% 0.29% (0.03)% 0.08% Allowance for Credit Losses to Total Loans 0.82% 0.80% 0.59% 0.02% 0.23% Net Charge-offs to Average Loans(2) 0.09% 0.07% 0.22% 0.02% (0.13)% 1. Includes guaranteed portion of non-accrual SBA loans. 2. Annualized for the period ended September 30, 2023. 6
Deposits 7
Deposit Mix and Cost of Deposits Impacted by Current Rate Environment ($ in millions) $6,820 $7,347 $4,807 $3,384 $4,268 $5,190 $5,164 $11,262 $10,622 $12,660 $13,369 $13,061 $10,276 $11,136 $1,771 $2,131 $3,020 $3,709 $2,142 $3,290 $3,403 $3,621 $4,295 $7,009 $8,976 $8,038 $7,357 $6,835 $23,474 $24,395 $27,496 $29,438 $27,509 $26,113 $26,538 Non-interest Demand Interest Demand Money Market / Savings Time 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 Quarterly Cost of Deposits 1.52% 1.48% 0.43% 0.19% 1.42% 2.74% 2.96% Non-interest bearing as a % of Total Deposits 15.4% 17.6% 25.5% 30.5% 29.2% 28.2% 25.8% 8 • 61% of deposits commercial or municipal • Diverse deposit book by industry sector; largest commercial segment title solutions at $2.5 billion ◦ Approximately 77% of deposits in this segment are in operating accounts
Cost of Funds Trend 9 1.42% 0.36% 0.16% 1.92% 2.84% 3.18% 1.75% 0.25% 0.25% 4.50% 5.50% 5.50% Spot APY - Total Deposits Target Federal Funds Rate Upper Bound 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 (1.00)% —% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Spot Average Annual Percentage Yield (“APY”) At December 31, 2019 At December 31, 2020 At December 31, 2021 At December 31, 2022 At September 30, 2023 At December 31, 2023 Total non-maturity deposits 1.11% 0.29% 0.14% 1.83% 2.54% 2.87% Total interest-bearing deposits 1.71% 0.48% 0.23% 2.66% 3.87% 4.20% Total deposits 1.42% 0.36% 0.16% 1.92% 2.84% 3.18% Spread Between Fed Funds Upper Bound and Spot APY of Total Deposits
Loans and the Allowance for Credit Losses 10
11 Prudently Underwritten and Well-Diversified Loan Portfolio At December 31, 2023 ($ in millions) Loan Portfolio Over Time $5,661 $6,348 $8,368 $8,901 $8,381 $8,209 $7,493 $6,896 $5,702 $5,700 $5,742 $5,819 $6,718 $6,448 $6,735 $8,305 $8,508 $8,907 $768 $1,259 $1,092 $525 $408 $433 $2,515 $2,915 $1,868 $1,455 $1,317 $1,266$23,155 $23,866 $23,765 $24,886 $24,356 $24,634 Other (1) Mortgage Warehouse Lending C&I CRE Residential 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 1. Includes Pinnacle municipal finance, franchise and equipment finance, and PPP.
High Quality CRE Portfolio At December 31, 2023 ($ in millions) Property Type Balance % of Total CRE FL NY Tri State Other Wtd. Avg. DSCR Wtd. Avg. LTV Office $ 1,753 30 % 60 % 24 % 16 % 1.67 65.0 % Warehouse/Industrial 1,341 24 % 56 % 8 % 36 % 2.04 52.0 % Multifamily 839 14 % 50 % 50 % — % 1.98 45.5 % Retail 818 14 % 54 % 29 % 17 % 1.67 58.8 % Hotel 492 8 % 78 % 3 % 19 % 1.89 49.0 % Construction and Land 496 9 % 56 % 42 % 2 % NA NA Other 80 1 % 71 % 13 % 16 % 1.94 47.4 % $ 5,819 100 % 58 % 25 % 17 % 1.80 56.0 % 12 Insignificant amount of non-performing CRE loans (other than non-accrual SBA guaranteed loans of $13 million) Total office exposure declined by $78 million this quarter Florida NY Tri State Property Type Wtd. Avg. DSCR Wtd. Avg. LTV Wtd. Avg. DSCR Wtd. Avg. LTV Office 1.68 64.5 % 1.62 62.9 % Warehouse/Industrial 2.19 50.5 % 1.91 37.0 % Multifamily 2.68 42.1 % 1.36 48.5 % Retail 1.86 56.2 % 1.26 63.6 % Hotel 1.95 46.9 % 1.83 20.2 % Other 2.17 44.3 % 1.24 66.3 % 1.96 55.0 % 1.46 54.1 %
Manageable CRE Maturity Risk At December 31, 2023 ($ in millions) Property Type Maturing in the Next 12 Months % Maturing in the Next 12 Months Fixed Rate or Swapped Maturing in the Next 12 Months Fixed Rate to Borrower as a % of Total Portfolio Office $ 314 18 % $ 187 11 % Warehouse/Industrial 171 13 % 81 6 % Multifamily 111 13 % 64 8 % Retail 121 15 % 64 8 % Hotel 43 9 % 43 9 % Construction and Land 180 36 % 1 — % Other 13 16 % 13 16 % $ 953 16 % $ 453 8 % 13 Just 8% of total CRE portfolio fixed and maturing in the next 12 months Property Type 2024 2025 2026 2027 2028 Thereafter Total Office $ 314 $ 401 $ 359 $ 224 $ 145 $ 310 $ 1,753 Warehouse/Industrial 171 155 382 262 160 211 1,341 Multifamily 111 80 165 134 129 220 839 Retail 121 136 232 67 187 75 818 Hotel 43 44 218 30 55 102 492 Construction and Land 180 115 66 34 — 101 496 Other 13 7 27 10 1 22 80 $ 953 $ 938 $ 1,449 $ 761 $ 677 $ 1,041 $ 5,819 Maturity Distribution of CRE Loans
CRE Office Portfolio - Additional Information At December 31, 2023 14 • 18% of the total office portfolio is medical office • $88 million in office payoffs this quarter; total exposure declined by $78 million • Rent rollover in next 12 months approximately 11% of the total office portfolio; 14% for FL and 5% in NY Tri State • Manhattan portfolio has approximately 96% occupancy and rent rollover in the next 12 months of 3% • Substantially all of the Florida portfolio is suburban 42% 20% 21% 12% 4% 1% Manhattan NY Tri-State Other Long Island Queens Brooklyn Bronx 28% 23%21% 11% 7% 10% Tampa Orlando Boca/Palm Beach Broward Miami-Dade Other NY Tri-State by Sub-Market Florida by Sub-Market
Granular, Diversified Commercial & Industrial Portfolio At December 31, 2023 ($ in millions) Industry Balance(1) % of Portfolio Finance and Insurance $ 1,695 19.0 % Manufacturing 875 9.8 % Educational Services 753 8.5 % Wholesale Trade 694 7.8 % Utilities 654 7.3 % Health Care and Social Assistance 605 6.8 % Information 590 6.6 % Real Estate and Rental and Leasing 539 6.0 % Transportation and Warehousing 420 4.7 % Construction 382 4.3 % Retail Trade 320 3.6 % Professional, Scientific, and Technical Services 300 3.4 % Public Administration 245 2.8 % Other Services (except Public Administration) 231 2.6 % Administrative and Support and Waste Management 194 2.2 % Arts, Entertainment, and Recreation 188 2.1 % Accommodation and Food Services 155 1.7 % Other 68 0.8 % $ 8,908 100.0 % 151. Includes $1.9 billion of owner-occupied real estate Geographic Distribution Florida 35% New York Tri-State 32% Other 33%
Drivers of Change in the ACL - Current Quarter ($ in millions) $196.1 $13.4 $(1.6) $(9.6) $3.6 $0.8 $202.7 Risk Rating Migration and Specific Reserves Economic Forecast Net Charge- Offs ACL 12/31/23 ACL 09/30/23 0.82%0.80%% of Total Loans 16 • Current market adjustment • Changes to forward path of economic forecast Other • Portfolio and assumption changes • Qualitative overlay New Loans net of Paydowns
Drivers of Change in the ACL - Year to Date ($ in millions) $147.9 $58.5 $16.2 $(20.7) $33.6 $(22.4) $(8.6) $(1.8) $202.7 Risk Rating Migration and Specific Reserves Economic Forecast Net Charge- Offs Change in Qualitative Overlay ACL 12/31/23 ACL 12/31/22 0.82%0.59%% of Total Loans 17 • Current market adjustment • Changes to forward path of economic forecast • Changes in scenario weighting Other New Loans net of Paydowns Updates to Assumptions
Allocation of the ACL ($ in millions) December 31, 2022 September 30, 2023 December 31, 2023 Balance % of Loans Balance % of Loans Balance % of Loans Residential $ 11.7 0.13 % $ 8.0 0.10 % $ 7.6 0.09 % Commerical: Commercial real estate 24.8 0.43 % 34.8 0.61 % 41.3 0.71 % Commercial and industrial 97.2 1.10 % 140.5 1.58 % 142.7 1.53 % Pinnacle - municipal finance 0.2 0.02 % 0.2 0.03 % 0.2 0.03 % Franchise finance 11.7 4.63 % 9.0 4.56 % 7.9 4.31 % Equipment finance 2.3 0.82 % 3.6 1.63 % 3.0 1.52 % Total commercial 136.2 0.85 % 188.1 1.18 % 195.1 1.19 % Allowance for credit losses $ 147.9 0.59 % $ 196.1 0.80 % $ 202.7 0.82 % Asset Quality Ratios December 31, 2022 September 30, 2023 December 31, 2023 Non-performing loans to total loans(1) 0.42 % 0.56 % 0.52 % Non-performing assets to total assets(1) 0.29 % 0.40 % 0.37 % Allowance for credit losses to non-performing loans(1) 140.88 % 143.22 % 159.54 % Net charge-offs to average loans(2) 0.22 % 0.07 % 0.09 % 18 1. Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $41.8 million, $37.8 million and $40.3 million or 0.17%, 0.16% and 0.16% of total loans and 0.12%, 0.11% and 0.11% of total assets at December 31, 2023, September 30, 2023 and December 31, 2022, respectively. 2. Annualized for the period ended September 30, 2023. Office Portfolio ACL: 1.10% at December 31, 2023 compared to 0.99% at September 30, 2023 and 0.45% at December 31, 2022
Asset Quality Metrics 19 Non-Performing Loans to Total Loans Non-Performing Assets to Total Assets Net Charge-offs to Average Loans 0.88% 1.02% 0.87% 0.42% 0.56% 0.52% 0.68% 0.80% 0.68% 0.26% 0.40% 0.35% Incl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA loans 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 —% 0.25% 0.50% 0.75% 1.00% 1.25% 0.63% 0.71% 0.58% 0.29% 0.40% 0.37% 0.49% 0.56% 0.45% 0.18% 0.29% 0.25% Incl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA loans 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 —% 0.25% 0.50% 0.75% 1.00% 1.25% 0.05% 0.26% 0.29% 0.22% 0.09% 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 —% 0.20% 0.40% 0.60%
Non-Performing Loans by Portfolio Segment ($ in millions) 20 $205 $244 $206 $105 $137 $127 $19 $29 $29 $21 $21 $21 $24 $60 $30 $3 $65 $43 $58 $22 $48 $34 $21 $7 $14 $45 $33 $13 $18 $17 $46 $51 $46 $40 $38 $42 $16 $16 $10 $9 $9 $6 Non-Guaranteed Portion of SBA Guaranteed Portion of SBA Franchise Equipment C&I CRE Residential and Other Consumer 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 NPLs Declined This Quarter - Remain Below Pre-Pandemic Levels
Criticized and Classified Loans ($ in millions) 21 Commercial Real Estate(1) Commercial(1)(2) Special Mention Substandard Accruing Substandard Non-accruing and Doubtful 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 $— $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 $— $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 1. Excludes SBA 2. Includes Pinnacle, franchise finance and equipment finance
Criticized and Classified CRE Loans by Property Type ($ in millions) 22 December 31, 2023 $116 $55 $89 $146 $77 $3 $16 Multifamily Hotel Retail Office Construction & Land Other SBA $146 $14 $73 $91 $2 $30 $98 $40 $63 $90 $42 $16 $15 December 31, 2022September 30, 2023
Asset Quality - Delinquencies ($ in millions) 23 Commercial(1) CRE(3) 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 $— $20 $40 $60 $80 $100 Residential(2) 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 $— $20 $40 $60 $80 $100 30-59 Days PD 60-89 Days PD 90 Days+ PD 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 12/31/23 $— $20 $40 $60 $80 $100 1. Includes Pinnacle, franchise finance and equipment finance 2. Excludes government insured residential loans 3. Q4 increase in 30-59 Days PD relates to one maturing loan with a renewal processed in January 2024. The loan is now current.
Residential Portfolio Overview At December 31, 2023 24 Residential Loan Product Type FICO Distribution(1) Breakdown by LTV 1. Excludes government insured residential loans. FICOs are refreshed routinely. LTVs are typically based on valuation at origination Prior 19% 2019 4% 2020 13%2021 43% 2022 16% 2023 5% >759 76% 720-759 15% <720 or NA 9% Breakdown by Vintage(1) 60% or less 34% 61% - 70% 26% 71% - 80% 39% More than 80% 1% 30 Yr Fixed 32% 15 & 20 Year Fixed 13% 10/1 ARM 12% 5/1 & 7/1 ARM 26% Formerly Covered 1% Govt Insured 16% High quality residential portfolio consists primarily of high FICO, low LTV, prime jumbo mortgages with de-minimis charge-offs since inception as well as government insured loans
Investment Portfolio 25
High Quality, Short-Duration Securities Portfolio ($ in millions) December 31, 2022 September 30, 2023 December 31, 2023 Portfolio Net Unrealized Loss Fair Value Net Unrealized Loss Fair Value Net Unrealized Loss Fair Value US Government and Agency $ (146) $ 2,780 $ (144) $ 2,642 $ (115) $ 2,656 Private label RMBS and CMOs (334) 2,531 (353) 2,290 (301) 2,296 Private label CMBS (121) 2,524 (95) 2,256 (84) 2,199 Single family real estate-backed securities (32) 470 (25) 393 (18) 366 CLOs (30) 1,136 (12) 1,048 (10) 1,113 Other (11) 213 (15) 202 (7) 205 $ (674) $ 9,654 $ (644) $ 8,831 $ (535) $ 8,835 Portfolio Composition US Government and Agency 30% Private label RMBS and CMOs 26% Private label CMBS 25% Single family real estate- backed securities 4% CLOs 13% Other 2% Rating Distribution GOV 30% AAA 60% AA 7% A 2% NR 1% • Unrealized losses continue to decline • No expected credit losses on AFS securities • AFS portfolio duration of 1.96; approximately 68% of the portfolio floating rate • HTM securities totaling $10 million with unrealized loss of $0.1 million 26
High Quality, Short-Duration Securities Portfolio At December 31, 2023 Strong credit enhancement levels Private Label RMBS Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 3.0 92.0 17.7 2.2 AA 20.2 34.2 24.8 5.3 A 27.3 28.2 27.7 5.7 Wtd. Avg. 4.2 88.4 18.2 2.4 Private Label CMBS Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 30.2 99.9 43.9 7.1 AA 29.5 74.4 37.0 7.7 A 25.1 51.5 37.3 9.1 Wtd. Avg. 29.9 95.5 43.0 7.2 CLOs Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 40.2 74.2 47.1 15.7 AA 30.8 47.0 37.3 13.0 A 31.5 33.2 32.2 14.4 Wtd. Avg. 38.4 68.3 45.0 15.2 AAA 94% AA 4% A 2% AAA 86% AA 11% A 3% AAA 80% AA 16% A 4% 27
Appendix - Additional Information 28
Strong Capital Position 29 6.5% 6.5% 13.1% 11.4%11.7% 10.0% 12.4% 11.4%11.8% Required to be Considered Well Capitalized CET1 CET1 including AOCI CET1 Peer Median(1)(2) CCAR Stress Test Trough BankUnited, N.A BankUnited, Inc —% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 1. Peer information based on September 30 Call Report data for banks with total assets between $20 billion and $100 billion 2. Peer information for comparison to BankUnited, Inc. is based on September 30 data for publicly traded companies between $20 billion and $100 billion. At December 31, 2023
Liquidity 30
Ample Liquidity Coverage of Uninsured Deposits ($ in millions) 31 Insured Deposits Total Deposits $ 26,538 Estimated Uninsured Deposits $ 12,360 Less: Collateralized deposits (3,048) Less: Affiliate deposits (318) Adjusted Uninsured Deposits $ 8,994 Estimated Insured and Collateralized Deposits $ 17,544 Insured and Collateralized Deposits to Total Deposits 66 % Available Liquidity(1) $ 13,644 Available Liquidity to Uninsured, Uncollateralized Deposits Ratio 152 % 1. Cash + Capacity at FHLB + Capacity at FRB + Unencumbered securities At December 31, 2023
Non-GAAP Financial Measures 32
Non-GAAP Financial Measures 33 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 December 31, 2023 (in thousands except share and per share data): December 31, 2023 Total stockholders’ equity (GAAP) $ 2,577,921 Less: goodwill 77,637 Tangible stockholders’ equity (non-GAAP) $ 2,500,284 Common shares issued and outstanding 74,372,505 Book value per common share (GAAP) $ 34.66 Tangible book value per common share (non-GAAP) $ 33.62