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): October 22, 2024 (October 22, 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 October 22, 2024, BankUnited, Inc. (the “Company”) reported its results for the quarter ended September 30, 2024. 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 | ||||||||||
| October 22, 2024 | |||||||||||
| October 22, 2024 | |||||||||||
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: | October 22, 2024 | BANKUNITED, INC. | |||||||||
| /s/ Leslie N. Lunak | |||||||||||
| Name: | Leslie N. Lunak | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
3
EXHIBIT INDEX
| Exhibit Number | Description | ||||||||||
| October 22, 2024 | |||||||||||
| October 22, 2024 | |||||||||||
4
Exhibit 99.1
BANKUNITED, INC. REPORTS THIRD QUARTER 2024 RESULTS
Miami Lakes, Fla. — October 22, 2024 — BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended September 30, 2024.
"We're happy with third quarter results as our balance sheet transformation story continues. Margin expanded again this quarter and credit remains well managed. Looking forward, we are optimistic about the environment, our markets and opportunities to grow core customer relationships. Our thoughts are with those who were impacted by the recent storms and we are here to support our employees, clients and communities," said Rajinder Singh, Chairman, President and Chief Executive Officer.
For the quarter ended September 30, 2024, the Company reported net income of $61.5 million, or $0.81 per diluted share, compared to $53.7 million, or $0.72 per diluted share, for the immediately preceding quarter ended June 30, 2024 and $47.0 million, or $0.63 per diluted share, for the quarter ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported net income of $163.2 million, or $2.17 per diluted share compared to $157.9 million, or $2.11 per diluted share for the nine months ended September 30, 2023.
Quarterly Highlights
To date, we have made notable progress executing near-term strategic priorities focused on improving core profitability.
•The net interest margin, calculated on a tax-equivalent basis, expanded by 0.06%, to 2.78% for the quarter ended September 30, 2024 from 2.72% for the immediately preceding quarter. The net interest margin was 2.56% for the quarter ended September 30, 2023. For the nine months ended September 30, 2024 the net interest margin improved to 2.69% from 2.55% for the nine months ended September 30, 2023.
•The average cost of total deposits declined by 0.03% to 3.06% for the quarter ended September 30, 2024 from 3.09% for the immediately preceding quarter ended June 30, 2024. The spot APY of total deposits declined to 2.93% at September 30, 2024 from 3.09% at June 30, 2024. The average cost of interest bearing deposits declined by 0.06% to 4.20% for the quarter ended September 30, 2024 from 4.26% for the immediately preceding quarter ended June 30, 2024 while the spot APY of interest bearing deposits declined to 4.01% at September 30, 2024 from 4.29% at June 30, 2024.
•The Company's funding profile has improved significantly over the course of 2024. For the nine months ended September 30, 2024, wholesale funding, including FHLB advances and brokered deposits, declined by $1.9 billion while non-brokered deposits grew by $1.7 billion, including an increase of $800 million in non-interest bearing demand deposits ("NIDDA").
•Average NIDDA remained relatively stable, declining by $64 million for the quarter, consistent with the prior quarter at 27% of average total deposits. Total deposits grew by $93 million for the quarter ended September 30, 2024. In part due to expected seasonal trends, for the quarter ended September 30, 2024, NIDDA declined by $430 million, and represented 27% of total deposits at September 30, 2024.
•FHLB advances increased by $295 million for the quarter ended September 30, 2024; this increase was related to intraday cash management and transactional deposit flows on the last day of the quarter and is also reflected in temporarily elevated cash balances. Brokered deposits grew by $303 million for the quarter; we took advantage of favorable pricing in the brokered deposit market during a period of market dislocation.
•For the nine months ended September 30, 2024, our core CRE and C&I loan portfolios grew by $286 million while residential loans declined by $422 million and franchise, equipment and municipal finance declined by a combined $238 million.
•Total loans declined by $230 million for the quarter ended September 30, 2024. The commercial real estate segment grew by $34 million while the C&I segment declined by $112 million. Mortgage warehouse grew by $33 million. Consistent with our balance sheet strategy, the residential, franchise, equipment and municipal finance portfolios declined by a combined $185 million.
1
•The loan to deposit ratio declined to 87.6% at September 30, 2024, from 88.7% at June 30, 2024 and 92.8% at December 31, 2023.
•Net charge-offs remained low and were $6.5 million for the quarter. The annualized net charge-off ratio for the nine months ended September 30, 2024 was 0.12%. The NPA ratio at September 30, 2024 was 0.64%, including 0.10% related to the guaranteed portion of non-accrual SBA loans, compared to 0.50%, including 0.11% related to the guaranteed portion of non-accrual SBA loans at June 30, 2024. The quarter-over-quarter increase was primarily related to two C&I loans.
•The ratio of the ACL to total loans increased to 0.94% at September 30, 2024; the ratio of the ACL to non-performing loans was 101.68%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.41% at September 30, 2024 and the ACL to loans ratio for CRE office loans was 2.20%.
•Our commercial real estate exposure is modest, totaling 25% of loans and 164% of the Bank's total risk based capital at September 30, 2024. By comparison, based on call report data as of June 30, 2024 (the most recent date available) for banks with between $10 billion and $100 billion in assets, the median level of CRE to total loans was 35% and the median level of CRE to total risk based capital was 220%.
•At September 30, 2024, the weighted average LTV of the CRE portfolio was 55.3%, the weighted average DSCR was 1.77, 56% of the portfolio was collateralized by properties located in Florida and 25% was collateralized by properties located in the New York tri-state area. For the office sub-segment, the weighted average LTV was 65.4%, the weighted average DSCR was 1.56, 57% was collateralized by properties in Florida, substantially all of which was suburban, and 23% was collateralized by properties located in the New York tri-state area.
•Liquidity remains ample. Total same day available liquidity was $15.0 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 147% and an estimated 63% of our deposits were insured or collateralized at September 30, 2024.
•Our capital position is robust. At September 30, 2024, CET1 was 11.8% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.9% at September 30, 2024. The ratio of tangible common equity to tangible assets increased to 7.6% at September 30, 2024.
•The net unrealized pre-tax loss on the available for sale ("AFS") securities portfolio continued to improve, declining by $125 million, to 4% of amortized cost, for the quarter ended September 30, 2024. The duration of our AFS securities portfolio remained short, at 1.73 as of September 30, 2024. Held to maturity securities were not significant.
•Book value and tangible book value per common share continued to grow, to $37.56 and $36.52, respectively, at September 30, 2024, compared to $36.11 and $35.07, respectively, at June 30, 2024, and $34.66 and $33.62, respectively at December 31, 2023.
•Beth Hosen, an industry veteran and proven leader, joined BankUnited in September as executive vice president and head of treasury management, overseeing treasury management sales, service and product as well as the commercial card business.
Hurricane Helene made landfall along Florida's "Big Bend" coast in September, 2024, ultimately impacting parts of the Southeastern United States. The impact of Hurricane Helene on BankUnited's operations was not significant, and is not expected to be significant to our financial condition or results of operations. Hurricane Milton made landfall near Siesta Key, Florida in October, bringing heavy rain, hurricane or tropical storm force winds, storm surge and power outages to portions of the Florida peninsula, All of our branches and office locations have re-opened for business, and damage from the storm was negligible. There were no significant impacts to banking operations. We are still in the process of finalizing our assessment of the potential impact of Hurricane Milton on our customers and credit portfolio.
2
Loans
Loan portfolio composition at the dates indicated follows (dollars in thousands):
| September 30, 2024 | June 30, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
Core C&I and CRE sub-segments: | |||||||||||||||||||||||||||||||||||
| Non-owner occupied commercial real estate | $ | 5,488,884 | 22.5 | % | $ | 5,367,663 | 21.8 | % | $ | 5,323,241 | 21.6 | % | |||||||||||||||||||||||
| Construction and land | 497,928 | 2.0 | % | 584,833 | 2.4 | % | 495,992 | 2.0 | % | ||||||||||||||||||||||||||
| Owner occupied commercial real estate | 1,999,515 | 8.2 | % | 1,966,809 | 8.0 | % | 1,935,743 | 7.9 | % | ||||||||||||||||||||||||||
| Commercial and industrial | 7,026,412 | 28.9 | % | 7,170,622 | 29.1 | % | 6,971,981 | 28.3 | % | ||||||||||||||||||||||||||
| 15,012,739 | 61.6 | % | 15,089,927 | 61.3 | % | 14,726,957 | 59.8 | % | |||||||||||||||||||||||||||
Franchise and equipment finance | 277,704 | 1.1 | % | 307,442 | 1.2 | % | 380,347 | 1.5 | % | ||||||||||||||||||||||||||
| Pinnacle - municipal finance | 749,035 | 3.1 | % | 847,234 | 3.4 | % | 884,690 | 3.6 | % | ||||||||||||||||||||||||||
| Mortgage warehouse lending ("MWL") | 571,783 | 2.3 | % | 539,159 | 2.2 | % | 432,663 | 1.8 | % | ||||||||||||||||||||||||||
| Residential | 7,787,442 | 31.9 | % | 7,844,722 | 31.9 | % | 8,209,027 | 33.3 | % | ||||||||||||||||||||||||||
| $ | 24,398,703 | 100.0 | % | $ | 24,628,484 | 100.0 | % | $ | 24,633,684 | 100.0 | % | ||||||||||||||||||||||||
For the quarter ended September 30, 2024, total loans declined by $230 million. The CRE portfolio grew by $34 million and MWL grew by $33 million while the C&I portfolio declined by $112 million. Consistent with our balance sheet strategy, the franchise, equipment, and municipal finance portfolios declined by an aggregate $128 million and residential loans declined by $57 million. The decline in C&I for the quarter was impacted by the timing of some unanticipated payoffs and strategic exits.
Asset Quality and the ACL
The following table presents information about the ACL at the dates indicated as well as net charge-off rates for the periods ended September 30, 2024, June 30, 2024 and December 31, 2023 (dollars in thousands):
| ACL | ACL to Total Loans | Commercial ACL to Commercial Loans(2) | ACL to Non-Performing Loans | Net Charge-offs to Average Loans (1) | |||||||||||||||||||||||||
| December 31, 2023 | $ | 202,689 | 0.82 | % | 1.29 | % | 159.54 | % | 0.09 | % | |||||||||||||||||||
| June 30, 2024 | $ | 225,698 | 0.92 | % | 1.42 | % | 130.12 | % | 0.12 | % | |||||||||||||||||||
| September 30, 2024 | $ | 228,249 | 0.94 | % | 1.41 | % | 101.68 | % | 0.12 | % | |||||||||||||||||||
(1) Annualized for the six months ended June 30, 2024 and the nine months ended September 30, 2024.
(2) For purposes of this ratio, commercial loans includes the core C&I and CRE sub-segments as presented in the table above as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio.
The ACL at September 30, 2024 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 September 30, 2024, the provision for credit losses, including both funded and unfunded loan commitments, was $9.2 million, compared to $19.5 million for the immediately preceding quarter ended June 30, 2024. For the quarter ended September 30, 2024, an increase in qualitative overlays, changes in portfolio characteristics, and updates to certain assumptions had the effect of increasing the ACL, while the impact of improvements in the economic forecast partially offset that increase.
The following table summarizes the activity in the ACL for the periods indicated (in thousands):
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||||||||||||||
| Beginning balance | $ | 225,698 | $ | 217,556 | $ | 166,833 | $ | 202,689 | $ | 147,946 | |||||||||||||||||||
| Impact of adoption of new accounting pronouncement (ASU 2022-02) | N/A | N/A | N/A | N/A | (1,794) | ||||||||||||||||||||||||
Balance after impact of adoption of ASU 2022-02 | 225,698 | 217,556 | 166,833 | 202,689 | 146,152 | ||||||||||||||||||||||||
| Provision | 9,091 | 21,823 | 30,877 | 46,719 | 62,667 | ||||||||||||||||||||||||
| Net charge-offs | (6,540) | (13,681) | (1,647) | (21,159) | (12,756) | ||||||||||||||||||||||||
| Ending balance | $ | 228,249 | $ | 225,698 | $ | 196,063 | $ | 228,249 | $ | 196,063 | |||||||||||||||||||
3
The following table presents criticized and classified commercial loans at the dates indicated (in thousands):
| September 30, 2024 | June 30, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
CRE | Total Commercial | CRE | Total Commercial | CRE | Total Commercial | ||||||||||||||||||||||||||||||
| Special mention | $ | 145,338 | $ | 323,326 | $ | 138,403 | $ | 265,940 | $ | 97,552 | $ | 319,905 | |||||||||||||||||||||||
| Substandard - accruing | 587,097 | 932,746 | 597,888 | 946,832 | 390,724 | 711,266 | |||||||||||||||||||||||||||||
| Substandard - non-accruing | 70,860 | 186,565 | 54,088 | 131,193 | 13,727 | 86,903 | |||||||||||||||||||||||||||||
| Doubtful | — | 16,265 | 8,301 | 25,258 | — | 19,035 | |||||||||||||||||||||||||||||
| Total | $ | 803,295 | $ | 1,458,902 | $ | 798,680 | $ | 1,369,223 | $ | 502,003 | $ | 1,137,109 | |||||||||||||||||||||||
Total criticized and classified commercial loans increased by $90 million for the quarter ended September 30, 2024. The increase in the substandard non-accruing category for the quarter ended September 30, 2024 was primarily related to two C&I loans.
Non-performing loans totaled $224.5 million or 0.92% of total loans at September 30, 2024, compared to $173.5 million or 0.70% of total loans at June 30, 2024. Non-performing loans included $35.1 million and $39.0 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.14% and 0.16% of total loans at September 30, 2024 and June 30, 2024, respectively.
Net Interest Income
Net interest income for the quarter ended September 30, 2024 was $234.1 million, compared to $226.0 million for the immediately preceding quarter ended June 30, 2024, an increase of 4%. Interest income increased by $9.1 million for the quarter ended September 30, 2024, compared to the immediately preceding quarter, while interest expense increased by $1.0 million.
The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.06% to 2.78% for the quarter ended September 30, 2024, from 2.72% for the immediately preceding quarter ended June 30, 2024.
The average cost of total deposits declined to 3.06% from 3.09% for the quarter ended June 30, 2024 and the average cost of interest bearing liabilities declined to 4.24% from 4.28% for the quarter ended June 30, 2024. The yield on average interest earning assets increased to 5.79% for the quarter ended September 30, 2024 from 5.77% for the prior quarter.
Non-interest expense
Non-interest expense increased by $6.9 million for the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024. A $6.2 million increase in compensation and benefits for the quarter ended September 30, 2024 resulted primarily from an increase in the Company's stock price, impacting the value of liability-classified share based compensation awards and increases in certain other variable compensation accruals.
Earnings Conference Call and Presentation
A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Tuesday, October 22, 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/BIb2316bdeec79467e835d086e37e8b472. For those unable to join the live event, an archived webcast will be available on 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 September 30, 2024, 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.
4
BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com.
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, 2023, 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.
5
BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except share and per share data)
| September 30, 2024 | June 30, 2024 | December 31, 2023 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Cash and due from banks: | |||||||||||||||||
| Non-interest bearing | $ | 14,746 | $ | 12,631 | $ | 14,945 | |||||||||||
| Interest bearing | 875,122 | 420,821 | 573,338 | ||||||||||||||
| Cash and cash equivalents | 889,868 | 433,452 | 588,283 | ||||||||||||||
Investment securities (including securities reported at fair value of $9,109,860, $8,936,449 and $8,867,354) | 9,119,860 | 8,946,449 | 8,877,354 | ||||||||||||||
| Non-marketable equity securities | 237,172 | 223,159 | 310,084 | ||||||||||||||
| Loans | 24,398,703 | 24,628,484 | 24,633,684 | ||||||||||||||
| Allowance for credit losses | (228,249) | (225,698) | (202,689) | ||||||||||||||
| Loans, net | 24,170,454 | 24,402,786 | 24,430,995 | ||||||||||||||
| Bank owned life insurance | 306,313 | 297,827 | 318,459 | ||||||||||||||
| Operating lease equipment, net | 241,625 | 266,815 | 371,909 | ||||||||||||||
| Goodwill | 77,637 | 77,637 | 77,637 | ||||||||||||||
| Other assets | 741,816 | 779,781 | 786,886 | ||||||||||||||
| Total assets | $ | 35,784,745 | $ | 35,427,906 | $ | 35,761,607 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Liabilities: | |||||||||||||||||
| Demand deposits: | |||||||||||||||||
| Non-interest bearing | $ | 7,635,427 | $ | 8,065,209 | $ | 6,835,236 | |||||||||||
| Interest bearing | 5,171,865 | 3,771,793 | 3,403,539 | ||||||||||||||
| Savings and money market | 10,324,697 | 11,463,211 | 11,135,708 | ||||||||||||||
| Time | 4,724,236 | 4,463,394 | 5,163,995 | ||||||||||||||
| Total deposits | 27,856,225 | 27,763,607 | 26,538,478 | ||||||||||||||
| FHLB advances | 3,580,000 | 3,285,000 | 5,115,000 | ||||||||||||||
| Notes and other borrowings | 708,694 | 708,835 | 708,973 | ||||||||||||||
| Other liabilities | 832,022 | 971,116 | 821,235 | ||||||||||||||
| Total liabilities | 32,976,941 | 32,728,558 | 33,183,686 | ||||||||||||||
| Commitments and contingencies | |||||||||||||||||
| Stockholders' equity: | |||||||||||||||||
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,749,012, 74,758,609 and 74,372,505 shares issued and outstanding | 747 | 748 | 744 | ||||||||||||||
| Paid-in capital | 296,107 | 290,719 | 283,642 | ||||||||||||||
| Retained earnings | 2,749,314 | 2,709,503 | 2,650,956 | ||||||||||||||
| Accumulated other comprehensive loss | (238,364) | (301,622) | (357,421) | ||||||||||||||
| Total stockholders' equity | 2,807,804 | 2,699,348 | 2,577,921 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,784,745 | $ | 35,427,906 | $ | 35,761,607 | |||||||||||
6
BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||
| Loans | $ | 355,220 | $ | 350,604 | $ | 337,014 | $ | 1,053,081 | $ | 971,962 | |||||||||||||||||||
| Investment securities | 127,907 | 123,708 | 122,857 | 375,794 | 362,219 | ||||||||||||||||||||||||
| Other | 9,229 | 8,986 | 10,668 | 28,253 | 40,195 | ||||||||||||||||||||||||
| Total interest income | 492,356 | 483,298 | 470,539 | 1,457,128 | 1,374,376 | ||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||
| Deposits | 208,630 | 208,091 | 176,974 | 626,719 | 467,472 | ||||||||||||||||||||||||
| Borrowings | 49,598 | 49,185 | 78,723 | 155,402 | 250,310 | ||||||||||||||||||||||||
| Total interest expense | 258,228 | 257,276 | 255,697 | 782,121 | 717,782 | ||||||||||||||||||||||||
| Net interest income before provision for credit losses | 234,128 | 226,022 | 214,842 | 675,007 | 656,594 | ||||||||||||||||||||||||
| Provision for credit losses | 9,248 | 19,538 | 33,049 | 44,071 | 68,354 | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | 224,880 | 206,484 | 181,793 | 630,936 | 588,240 | ||||||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||
| Deposit service charges and fees | 5,016 | 4,909 | 5,189 | 15,238 | 15,705 | ||||||||||||||||||||||||
| Gain (loss) on investment securities, net | 127 | 421 | 887 | 1,323 | (10,669) | ||||||||||||||||||||||||
| Lease financing | 6,368 | 5,640 | 16,531 | 23,448 | 42,159 | ||||||||||||||||||||||||
| Other non-interest income | 11,377 | 13,215 | 5,117 | 33,941 | 22,551 | ||||||||||||||||||||||||
| Total non-interest income | 22,888 | 24,185 | 27,724 | 73,950 | 69,746 | ||||||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||
| Employee compensation and benefits | 81,781 | 75,588 | 68,825 | 233,289 | 207,290 | ||||||||||||||||||||||||
| Occupancy and equipment | 12,242 | 10,973 | 10,890 | 33,784 | 32,735 | ||||||||||||||||||||||||
| Deposit insurance expense | 7,421 | 8,530 | 7,790 | 29,481 | 23,294 | ||||||||||||||||||||||||
| Professional fees | 4,953 | 4,497 | 2,696 | 11,960 | 9,132 | ||||||||||||||||||||||||
| Technology | 21,094 | 20,567 | 19,193 | 61,976 | 61,356 | ||||||||||||||||||||||||
| Depreciation of operating lease equipment | 4,666 | 7,896 | 11,217 | 21,775 | 33,970 | ||||||||||||||||||||||||
| Other non-interest expense | 32,425 | 29,655 | 26,479 | 89,263 | 77,311 | ||||||||||||||||||||||||
| Total non-interest expense | 164,582 | 157,706 | 147,090 | 481,528 | 445,088 | ||||||||||||||||||||||||
| Income before income taxes | 83,186 | 72,963 | 62,427 | 223,358 | 212,898 | ||||||||||||||||||||||||
| Provision for income taxes | 21,734 | 19,230 | 15,446 | 60,193 | 55,039 | ||||||||||||||||||||||||
| Net income | $ | 61,452 | $ | 53,733 | $ | 46,981 | $ | 163,165 | $ | 157,859 | |||||||||||||||||||
| Earnings per common share, basic | $ | 0.82 | $ | 0.72 | $ | 0.63 | $ | 2.19 | $ | 2.12 | |||||||||||||||||||
| Earnings per common share, diluted | $ | 0.81 | $ | 0.72 | $ | 0.63 | $ | 2.17 | $ | 2.11 | |||||||||||||||||||
7
BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
| Three Months Ended September 30, | Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | $ | 24,299,898 | $ | 358,259 | 5.87 | % | $ | 24,290,169 | $ | 353,707 | 5.85 | % | $ | 24,417,433 | $ | 340,357 | 5.54 | % | |||||||||||||||||||||||||||||||||||
Investment securities (3) | 9,171,185 | 128,762 | 5.62 | % | 8,894,517 | 124,572 | 5.60 | % | 9,034,116 | 123,794 | 5.48 | % | |||||||||||||||||||||||||||||||||||||||||
| Other interest earning assets | 722,366 | 9,229 | 5.08 | % | 711,586 | 8,986 | 5.08 | % | 785,146 | 10,668 | 5.39 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest earning assets | 34,193,449 | 496,250 | 5.79 | % | 33,896,272 | 487,265 | 5.77 | % | 34,236,695 | 474,819 | 5.52 | % | |||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (231,383) | (225,161) | (173,407) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest earning assets | 1,444,410 | 1,571,649 | 1,747,310 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 35,406,476 | $ | 35,242,760 | $ | 35,810,598 | |||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing demand deposits | $ | 3,930,101 | $ | 37,294 | 3.78 | % | $ | 3,742,071 | $ | 35,249 | 3.79 | % | $ | 3,038,870 | $ | 25,491 | 3.33 | % | |||||||||||||||||||||||||||||||||||
| Savings and money market deposits | 11,304,999 | 119,856 | 4.22 | % | 11,176,000 | 118,945 | 4.28 | % | 10,205,765 | 97,956 | 3.81 | % | |||||||||||||||||||||||||||||||||||||||||
| Time deposits | 4,524,215 | 51,480 | 4.53 | % | 4,750,640 | 53,897 | 4.56 | % | 5,420,522 | 53,527 | 3.92 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing deposits | 19,759,315 | 208,630 | 4.20 | % | 19,668,711 | 208,091 | 4.26 | % | 18,665,157 | 176,974 | 3.76 | % | |||||||||||||||||||||||||||||||||||||||||
| FHLB advances | 3,766,630 | 40,471 | 4.27 | % | 3,764,286 | 40,032 | 4.28 | % | 6,040,870 | 69,525 | 4.57 | % | |||||||||||||||||||||||||||||||||||||||||
| Notes and other borrowings | 708,829 | 9,127 | 5.15 | % | 711,167 | 9,153 | 5.15 | % | 715,307 | 9,198 | 5.14 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 24,234,774 | 258,228 | 4.24 | % | 24,144,164 | 257,276 | 4.28 | % | 25,421,334 | 255,697 | 3.99 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest bearing demand deposits | 7,384,721 | 7,448,633 | 6,937,537 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-interest bearing liabilities | 1,009,157 | 960,691 | 868,178 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 32,628,652 | 32,553,488 | 33,227,049 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' equity | 2,777,824 | 2,689,272 | 2,583,549 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,406,476 | $ | 35,242,760 | $ | 35,810,598 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 238,022 | $ | 229,989 | $ | 219,122 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate spread | 1.55 | % | 1.49 | % | 1.53 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 2.78 | % | 2.72 | % | 2.56 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(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)
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Average Balance | Interest (1) | Yield/ Rate (1)(2) | Average Balance | Interest (1) | Yield/ Rate (1)(2) | ||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||||||||||||||
Loans | $ | 24,309,134 | $ | 1,062,407 | 5.84 | % | $ | 24,606,425 | $ | 981,976 | 5.33 | % | |||||||||||||||||||||||
Investment securities (3) | 9,006,654 | 378,358 | 5.60 | % | 9,356,211 | 364,980 | 5.20 | % | |||||||||||||||||||||||||||
| Other interest earning assets | 732,435 | 28,253 | 5.15 | % | 1,048,313 | 40,195 | 5.13 | % | |||||||||||||||||||||||||||
| Total interest earning assets | 34,048,223 | 1,469,018 | 5.76 | % | 35,010,949 | 1,387,151 | 5.29 | % | |||||||||||||||||||||||||||
| Allowance for credit losses | (221,135) | (162,395) | |||||||||||||||||||||||||||||||||
| Non-interest earning assets | 1,534,800 | 1,761,500 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 35,361,888 | $ | 36,610,054 | |||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Interest bearing demand deposits | $ | 3,752,828 | $ | 106,050 | 3.77 | % | $ | 2,728,287 | $ | 54,781 | 2.68 | % | |||||||||||||||||||||||
| Savings and money market deposits | 11,238,662 | 357,440 | 4.25 | % | 10,844,838 | 278,243 | 3.43 | % | |||||||||||||||||||||||||||
| Time deposits | 4,834,209 | 163,229 | 4.51 | % | 5,150,486 | 134,448 | 3.49 | % | |||||||||||||||||||||||||||
| Total interest bearing deposits | 19,825,699 | 626,719 | 4.22 | % | 18,723,611 | 467,472 | 3.34 | % | |||||||||||||||||||||||||||
| Federal funds purchased | — | — | — | % | 46,510 | 1,582 | 4.54 | % | |||||||||||||||||||||||||||
FHLB advances | 4,032,737 | 128,000 | 4.24 | % | 6,596,465 | 220,993 | 4.48 | % | |||||||||||||||||||||||||||
| Notes and other borrowings | 709,668 | 27,402 | 5.15 | % | 719,331 | 27,735 | 5.14 | % | |||||||||||||||||||||||||||
| Total interest bearing liabilities | 24,568,104 | 782,121 | 4.25 | % | 26,085,917 | 717,782 | 3.68 | % | |||||||||||||||||||||||||||
| Non-interest bearing demand deposits | 7,132,351 | 7,152,362 | |||||||||||||||||||||||||||||||||
| Other non-interest bearing liabilities | 958,888 | 829,464 | |||||||||||||||||||||||||||||||||
| Total liabilities | 32,659,343 | 34,067,743 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 2,702,545 | 2,542,311 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,361,888 | $ | 36,610,054 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 686,897 | $ | 669,369 | |||||||||||||||||||||||||||||||
| Interest rate spread | 1.51 | % | 1.61 | % | |||||||||||||||||||||||||||||||
| Net interest margin | 2.69 | % | 2.55 | % | |||||||||||||||||||||||||||||||
(1) On a tax-equivalent basis where applicable
(2) Annualized
(3) At fair value except for securities held to maturity
9
BANKUNITED, INC. AND SUBSIDIARIES
EARNINGS PER COMMON SHARE
(In thousands except share and per share amounts)
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| c | September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||||||
| Basic earnings per common share: | |||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||
| Net income | $ | 61,452 | $ | 53,733 | $ | 46,981 | $ | 163,165 | $ | 157,859 | |||||||||||||||||||
Distributed and undistributed earnings allocated to participating securities | (850) | (748) | (700) | (2,282) | (2,378) | ||||||||||||||||||||||||
| Income allocated to common stockholders for basic earnings per common share | $ | 60,602 | $ | 52,985 | $ | 46,281 | $ | 160,883 | $ | 155,481 | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Weighted average common shares outstanding | 74,753,372 | 74,762,498 | 74,416,698 | 74,675,279 | 74,530,871 | ||||||||||||||||||||||||
| Less average unvested stock awards | (1,079,182) | (1,110,233) | (1,165,105) | (1,105,654) | (1,180,570) | ||||||||||||||||||||||||
| Weighted average shares for basic earnings per common share | 73,674,190 | 73,652,265 | 73,251,593 | 73,569,625 | 73,350,301 | ||||||||||||||||||||||||
| Basic earnings per common share | $ | 0.82 | $ | 0.72 | $ | 0.63 | $ | 2.19 | $ | 2.12 | |||||||||||||||||||
| Diluted earnings per common share: | |||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||
| Income allocated to common stockholders for basic earnings per common share | $ | 60,602 | $ | 52,985 | $ | 46,281 | $ | 160,883 | $ | 155,481 | |||||||||||||||||||
Adjustment for earnings reallocated from participating securities | 6 | 2 | 3 | 9 | 8 | ||||||||||||||||||||||||
| Income used in calculating diluted earnings per common share | $ | 60,608 | $ | 52,987 | $ | 46,284 | $ | 160,892 | $ | 155,489 | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Weighted average shares for basic earnings per common share | 73,674,190 | 73,652,265 | 73,251,593 | 73,569,625 | 73,350,301 | ||||||||||||||||||||||||
| Dilutive effect of certain share-based awards | 817,866 | 365,988 | 537,230 | 481,126 | 388,372 | ||||||||||||||||||||||||
Weighted average shares for diluted earnings per common share | 74,492,056 | 74,018,253 | 73,788,823 | 74,050,751 | 73,738,673 | ||||||||||||||||||||||||
| Diluted earnings per common share | $ | 0.81 | $ | 0.72 | $ | 0.63 | $ | 2.17 | $ | 2.11 | |||||||||||||||||||
10
BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
| At or for the Three Months Ended | At or for the Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||||||||||||||
Financial ratios (4) | |||||||||||||||||||||||||||||
| Return on average assets | 0.69 | % | 0.61 | % | 0.52 | % | 0.62 | % | 0.58 | % | |||||||||||||||||||
| Return on average stockholders’ equity | 8.8 | % | 8.0 | % | 7.2 | % | 8.1 | % | 8.3 | % | |||||||||||||||||||
Net interest margin (3) | 2.78 | % | 2.72 | % | 2.56 | % | 2.69 | % | 2.55 | % | |||||||||||||||||||
| Loans to deposits | 87.6 | % | 88.7 | % | 93.3 | % | 87.6 | % | 93.3 | % | |||||||||||||||||||
| Tangible book value per common share | $ | 36.52 | $ | 35.07 | $ | 32.88 | $ | 36.52 | $ | 32.88 | |||||||||||||||||||
| September 30, 2024 | June 30, 2024 | December 31, 2023 | |||||||||||||||
| Asset quality ratios | |||||||||||||||||
Non-performing loans to total loans (1)(5) | 0.92 | % | 0.70 | % | 0.52 | % | |||||||||||
Non-performing assets to total assets (2)(5) | 0.64 | % | 0.50 | % | 0.37 | % | |||||||||||
| Allowance for credit losses to total loans | 0.94 | % | 0.92 | % | 0.82 | % | |||||||||||
Allowance for credit losses to total commercial(6) | 1.41 | % | 1.42 | % | 1.29 | % | |||||||||||
Allowance for credit losses to non-performing loans (1)(5) | 101.68 | % | 130.12 | % | 159.54 | % | |||||||||||
Net charge-offs to average loans(4) | 0.12 | % | 0.12 | % | 0.09 | % | |||||||||||
(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 six and nine month periods as applicable.
(5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $35.1 million or 0.14% of total loans and 0.10% of total assets at September 30, 2024, $39.0 million or 0.16% of total loans and 0.11% of total assets at June 30, 2024, and $41.8 million or 0.17% of total loans and 0.12% of total assets at December 31, 2023.
(6) For purposes of this ratio, commercial loans includes the C&I and CRE sub-segments, as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio.
| September 30, 2024 | June 30, 2024 | December 31, 2023 | Required to be Considered Well Capitalized | ||||||||||||||||||||||||||||||||||||||
| BankUnited, Inc. | BankUnited, N.A. | BankUnited, Inc. | BankUnited, N.A. | BankUnited, Inc. | BankUnited, N.A. | ||||||||||||||||||||||||||||||||||||
| Capital ratios | |||||||||||||||||||||||||||||||||||||||||
| Tier 1 leverage | 8.3 | % | 9.6 | % | 8.2 | % | 9.6 | % | 7.9 | % | 9.1 | % | 5.0 | % | |||||||||||||||||||||||||||
| Common Equity Tier 1 ("CET1") risk-based capital | 11.8 | % | 13.6 | % | 11.6 | % | 13.5 | % | 11.4 | % | 13.1 | % | 6.5 | % | |||||||||||||||||||||||||||
| Total risk-based capital | 13.9 | % | 14.6 | % | 13.6 | % | 14.4 | % | 13.4 | % | 13.9 | % | 10.0 | % | |||||||||||||||||||||||||||
| Tangible Common Equity/Tangible Assets | 7.6 | % | N/A | 7.4 | % | N/A | 7.0 | % | 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):
| September 30, 2024 | June 30, 2024 | December 31, 2023 | |||||||||||||||
| Total stockholders’ equity | $ | 2,807,804 | $ | 2,699,348 | $ | 2,577,921 | |||||||||||
| Less: goodwill and other intangible assets | 77,637 | 77,637 | 77,637 | ||||||||||||||
| Tangible stockholders’ equity | $ | 2,730,167 | $ | 2,621,711 | $ | 2,500,284 | |||||||||||
| Common shares issued and outstanding | 74,749,012 | 74,758,609 | 74,372,505 | ||||||||||||||
| Book value per common share | $ | 37.56 | $ | 36.11 | $ | 34.66 | |||||||||||
| Tangible book value per common share | $ | 36.52 | $ | 35.07 | $ | 33.62 | |||||||||||
12
October 22, 2024 Q3 2024 – 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, 2023 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 Net Interest Margin Near-term Strategic Priorities Scorecard 5 3 4 1 • For the nine months ended September 30, 2024: ◦ Non-brokered deposits grew by $1.7 billion ◦ NIDDA up $800 million; 27% of total deposits ◦ Wholesale funding down $1.9 billion • For the nine months ended September 30, 2024: ◦ Core C&I and CRE loans grew by $286 million ◦ Lower yielding resi declined by $422 million • NIM expanded by 0.06%, to 2.78% for the quarter from 2.72% for the prior quarter • On a year-to-date basis, NIM expanded to 2.69% from 2.55% for the prior year • Cost of deposits declined to 3.06% for the current quarter from 3.09% • CET 1 ratio of 11.8%; TCE/TA increased to 7.6% • Same day available liquidity $15.0 billion • Available liquidity 147% of uninsured, uncollateralized deposits; 63% of deposits insured or collateralized. Manage credit • ACL/Loans increased to 0.94%; commercial ACL 1.41% • Annualized net charge-offs 0.12% • NPA ratio excluding guaranteed SBA loans 0.54% 4
Highlights from Third Quarter Earnings Change From ($ in millions, except per share data) Q3’24 Q2’24 Q3’23 Q2’24 Q3’23 Key Highlights Net Interest Income $234 $226 $215 $8 $19 4% QoQ growth in net interest income Provision for Credit Losses $9 $20 $33 ($11) ($24) manageable credit costs Total Non-interest Income $23 $24 $28 ($1) ($5) Total Non-interest Expense $165 $158 $147 $7 $18 Net Income $61 $54 $47 $7 $14 EPS $0.81 $0.72 $0.63 $0.09 $0.18 Period-end Core C&I and CRE loans $15,013 $15,090 $14,251 ($77) $762 impacted by C&I payoffs Period-end Loans $24,399 $24,628 $24,356 ($230) $43 Non-interest DDA as a percentage of total deposits 27% 29% 28% (2)% (1)% Period-end Deposits $27,856 $27,764 $26,113 $93 $1,743 Loans to Deposits 87.6% 88.7% 93.3% (1.1%) (5.7%) CET1 11.8% 11.6% 11.4% 0.2% 0.4% Total Capital 13.9% 13.6% 13.4% 0.3% 0.5% Yield on Loans 5.87% 5.85% 5.54% 0.02% 0.33% Yield on Securities 5.62% 5.60% 5.48% 0.02% 0.14% Cost of Deposits 3.06% 3.09% 2.74% (0.03%) 0.32% Net Interest Margin 2.78% 2.72% 2.56% 0.06% 0.22% Non-performing Assets to Total Assets(1) 0.64% 0.50% 0.40% 0.14% 0.24% Allowance for Credit Losses to Total Loans 0.94% 0.92% 0.80% 0.02% 0.14% Commercial Allowance for Credit Losses to Total Commercial Loans(3) 1.41% 1.42% 1.28% (0.01)% 0.13% Net Charge-offs to Average Loans(2) 0.12% 0.12% 0.07% —% 0.05% 1. Includes guaranteed portion of non-accrual SBA loans. 2. Annualized. 3. For purposes of this ratio, commercial loans includes the core C&I and CRE sub-segments as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio. 5
Deposits 6
Deposit Trends ($ in millions) $7,347 $4,807 $3,384 $4,268 $5,164 $4,463 $4,724 $10,622 $12,660 $13,369 $13,061 $11,136 $11,463 $10,325 $2,131 $3,020 $3,709 $2,142 $3,403 $3,773 $5,172 $4,295 $7,009 $8,976 $8,038 $6,835 $8,065 $7,635 $24,395 $27,496 $29,438 $27,509 $26,538 $27,764 $27,856 Non-interest Demand Interest Demand Money Market / Savings Time 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24 Quarterly Cost of Deposits 1.48% 0.43% 0.19% 1.42% 2.96% 3.09% 3.06% Non-interest bearing as a % of Total Deposits 17.6% 25.5% 30.5% 29.2% 25.8% 29.1% 27.4% 7
Cost of Funds Trend 8 1.42% 0.36% 0.16% 1.92% 3.18% 3.09% 2.93% 1.75% 0.25% 0.25% 4.50% 5.50% 5.50% 5.00% Spot APY - Total Deposits Target Federal Funds Rate Upper Bound 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24 (1.00)% —% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Spot Average Annual Percentage Yield (“APY”) At December 31, 2019 At December 31, 2020 At December 31, 2021 At December 31, 2022 At December 31, 2023 At June 30, 2024 At September 30, 2024 Total non-maturity deposits 1.11% 0.29% 0.14% 1.83% 2.87% 2.80% 2.61% Total interest-bearing deposits 1.71% 0.48% 0.23% 2.66% 4.20% 4.29% 4.01% Total deposits 1.42% 0.36% 0.16% 1.92% 3.18% 3.09% 2.93% Spread Between Fed Funds Upper Bound and Spot APY of Total Deposits
Loans and the Allowance for Credit Losses 9
10 Prudently Underwritten and Well-Diversified Loan Portfolio At September 30, 2024 ($ in millions) Loan Portfolio Over Time $5,661 $6,348 $8,368 $8,901 $8,209 $7,845 $7,787 $7,493 $6,896 $5,702 $5,700 $5,819 $5,952 $5,987 $6,718 $6,448 $6,735 $8,305 $8,907 $9,136 $9,025 $768 $1,259 $1,092 $525 $433 $539 $572 $2,515 $2,915 $1,868 $1,455 $1,266 $1,156 $1,028$23,155 $23,866 $23,765 $24,886 $24,634 $24,628 $24,399 Other (1) Mortgage Warehouse Lending C&I CRE Residential 12/31/19 12/31/20 12/31/21 12/31/22 12/31/2023 06/30/24 09/30/24 1. Includes Pinnacle municipal finance, franchise and equipment finance, and PPP.
High Quality CRE Portfolio At September 30, 2024 ($ in millions) Property Type Balance % of Total CRE FL NY Tri State Other Wtd. Avg. DSCR Wtd. Avg. LTV Office $ 1,778 30 % 57 % 23 % 20 % 1.56 65.4 % Warehouse/Industrial 1,341 22 % 55 % 9 % 36 % 1.99 48.9 % Multifamily 869 15 % 53 % 47 % — % 1.88 48.4 % Retail 926 16 % 52 % 30 % 18 % 1.68 57.7 % Hotel 488 8 % 78 % 10 % 12 % 1.84 45.6 % Construction and Land 498 8 % 37 % 50 % 13 % NA NA Other 87 1 % 74 % 11 % 15 % 1.91 48.6 % $ 5,987 100 % 56 % 25 % 19 % 1.77 55.3 % 11 Florida NY Tri State Property Type Wtd. Avg. DSCR Wtd. Avg. LTV Wtd. Avg. DSCR Wtd. Avg. LTV Office 1.54 64.8 % 1.65 58.6 % Warehouse/Industrial 2.17 47.7 % 1.98 35.8 % Multifamily 2.31 45.5 % 1.41 51.6 % Retail 1.91 56.4 % 1.43 58.4 % Hotel 1.86 45.5 % 1.88 32.8 % Other 2.08 46.6 % 1.11 64.7 % 1.91 53.8 % 1.55 53.7 % Construction and land includes $85 million of office exposure, $83 million in NY New York rent regulated multi-family exposure $117 million
Manageable CRE Maturity Risk At September 30, 2024 ($ 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 Maturing in Next 12 mos. as a % of Total Portfolio Office $ 449 25 % $ 234 13 % Warehouse/Industrial 132 10 % 80 6 % Multifamily 186 21 % 65 7 % Retail 124 13 % 74 8 % Hotel 10 2 % 8 2 % Construction and Land 210 42 % — — % Other 13 15 % 7 8 % $ 1,124 19 % $ 468 8 % 12 Just 8% of total CRE portfolio fixed and maturing in the next 12 months Property Type 2024 2025 2026 2027 2028 Thereafter Total Office $ 196 $ 417 $ 422 $ 277 $ 146 $ 320 $ 1,778 Warehouse/Industrial 51 173 428 309 145 235 1,341 Multifamily 29 190 163 157 107 223 869 Retail 58 151 259 143 188 127 926 Hotel 6 43 242 31 55 111 488 Construction and Land 46 201 108 89 — 54 498 Other — 13 27 21 1 25 87 $ 386 $ 1,188 $ 1,649 $ 1,027 $ 642 $ 1,095 $ 5,987 Maturity Distribution of CRE Loans
CRE Peer Benchmarking 13 35% 34% 25% Peer Median Peer Mean BankUnited, N.A —% 5% 10% 15% 20% 25% 30% 35% 40% 220% 212% 164% —% 50% 100% 150% 200% 250% 1. BKU information as of September 30, 2024 2. CRE peer median information based on June 30, 2024 Call Report data (most recent date available) for banks with total assets between $10 billion and $100 billion CRE / Total Loans(1)(2) CRE / Total Risk Based Capital(1)(2)
CRE Office Portfolio - Additional Information At September 30, 2024 14 • 20% or $352 million of the total office portfolio is medical office • Rent rollover in next 12 months approximately 11% of the total office portfolio; 12% for FL and 9% in NY Tri State • Manhattan stabilized portfolio has approximately 95% occupancy and rent rollover in the next 12 months of 10% • The Florida portfolio is predominantly suburban 41% 21% 21% 12% 4% 1% Manhattan NY Tri-State Other Long Island Queens Brooklyn Bronx 29% 22%21% 9% 10% 9% Tampa Orlando Boca/Palm Beach Broward Miami-Dade Other NY Tri-State by Sub-Market Florida by Sub-Market
Granular, Diversified Commercial & Industrial Portfolio At September 30, 2024 ($ in millions) Industry Balance(1) % of Portfolio Finance and Insurance $ 1,507 16.7 % Manufacturing 810 9.0 % Utilities 765 8.5 % Health Care and Social Assistance 703 7.8 % Wholesale Trade 701 7.8 % Educational Services 683 7.6 % Information 683 7.5 % Transportation and Warehousing 494 5.5 % Real Estate and Rental and Leasing 473 5.2 % Construction 450 5.0 % Retail Trade 315 3.5 % Public Administration 304 3.4 % Professional, Scientific, and Technical Services 283 3.1 % Other Services (except Public Administration) 264 2.9 % Arts, Entertainment, and Recreation 196 2.2 % Accommodation and Food Services 169 1.9 % Administrative and Support and Waste Management 150 1.7 % Other 76 0.7 % $ 9,026 100.0 % 151. Includes $2.0 billion of owner-occupied real estate Geographic Distribution Florida 32% New York Tri-State 34% Other 34%
$225.7 $1.5 $(6.6) $(6.5) $4.2 $3.8 $6.1 $228.2 Drivers of Change in the ACL - Current Quarter ($ in millions) Risk Rating Migration and Specific Reserves Economic Forecast Net Charge- Offs ACL 09/30/24 ACL 06/30/24 0.94%0.92%% of Total Loans 16 Change in Qualitative OverlayPortfolio and Other • New Loans net of repayments • Portfolio changes • Current market adjustment • Changes to forward path of forecast • Scenario weighting Assumption Changes • Primarily related to residential portfolio
Allocation of the ACL ($ in millions) December 31, 2023 June 30, 2024 September 30, 2024 Balance % of Loans Balance % of Loans Balance % of Loans Commerical: Commercial real estate $ 41.3 0.71 % $ 69.9 1.17 % $ 61.3 1.02 % Commercial and industrial 142.4 1.60 % 143.2 1.57 % 151.4 1.68 % Franchise and equipment finance 10.9 2.85 % 5.9 1.93 % 3.3 1.20 % Total commercial 194.6 1.29 % 219.0 1.42 % 216.0 1.41 % Pinnacle - municipal finance 0.2 0.03 % 0.2 0.03 % 0.2 0.03 % Residential and mortgage warehouse lending 7.9 0.09 % 6.5 0.08 % 12.0 0.14 % Allowance for credit losses $ 202.7 0.82 % $ 225.7 0.92 % $ 228.2 0.94 % Asset Quality Ratios December 31, 2023 June 30, 2024 September 30, 2024 Non-performing loans to total loans(1) 0.52 % 0.70 % 0.92 % Non-performing loans, excluding the guaranteed portion of non- accrual SBA loans, to total loans 0.35 % 0.54 % 0.78 % Non-performing assets to total assets(1) 0.37 % 0.50 % 0.64 % Non-performing assets, excluding the guaranteed portion of non- accrual SBA loans, to total assets 0.25 % 0.39 % 0.54 % Allowance for credit losses to non-performing loans(1) 159.54 % 130.12 % 101.68 % Net charge-offs to average loans(2) 0.09 % 0.12 % 0.12 % 17 1. Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $35.1 million, $39.0 million and $41.8 million at September 30, 2024, June 30, 2024 and December 31, 2023, respectively. 2. Annualized for the six months ended June 30, 2024 and the nine months ended September 30, 2024. Office Portfolio ACL: 2.20% at September 30 compared to 1.18% at December 31, 2023.
Asset Quality Metrics 18 Non-Performing Loans to Total Loans Non-Performing Assets to Total Assets Net Charge-offs to Average Loans(1) 0.88% 1.02% 0.87% 0.42% 0.52% 0.70% 0.92% 0.68% 0.80% 0.68% 0.26% 0.35% 0.54% 0.78% Incl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA loans 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24 —% 0.25% 0.50% 0.75% 1.00% 1.25% 0.63% 0.71% 0.58% 0.29% 0.37% 0.50% 0.64% 0.49% 0.56% 0.45% 0.18% 0.25% 0.39% 0.54% Incl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA loans 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24 —% 0.25% 0.50% 0.75% 1.00% 1.25% 0.05% 0.26% 0.29% 0.22% 0.09% 0.12% 0.12% 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24 —% 0.20% 0.40% 0.60% 1. Annualized for the nine months ended September 30, 2024 and the six months ended June 30, 2024. • Increase in NPAs primarily related to two C&I loans
Non-Performing Loans by Portfolio Segment ($ in millions) 19 $205 $244 $206 $105 $127 $173 $224 $19 $29 $29 $21 $21 $16 $21 $24 $60 $30 $51 $61 $65 $43 $58 $22 $34 $43 $87$35 $45 $33 $13 $24 $19 $16 $46 $51 $46 $40 $42 $39 $35$16 $16 $10 $9 $6 $5 $4 Non-Guaranteed Portion of SBA Guaranteed Portion of SBA Franchise and Equipment C&I CRE Residential and Other Consumer 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24
Criticized and Classified Loans ($ in millions) 20 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 12/31/23 06/30/24 09/30/24 $— $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24 $— $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 1. Excludes SBA 2. Includes C&I, Pinnacle, franchise and equipment finance, and MWL
Criticized and Classified CRE Loans by Property Type ($ in millions) 21 June 30, 2024 $99 $54 $1 $93 $374 $152 $9 $17 $116 $55 $89 $146 $77 $3 $16 December 31, 2023 $138 $18 $29 $96 $380 $125 $3 $14 Multifamily Hotel Industrial/ Warehouse Retail Office Construction & Land Other SBA September 30, 2024 Construction and land category includes $83 million of office exposure at 9/30/2024
Asset Quality - Delinquencies ($ in millions) 22 Commercial(1) CRE 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24 $— $20 $40 $60 $80 $100 Residential(2) 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 06/30/24 09/30/24 $— $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 12/31/23 06/30/24 09/30/24 $— $20 $40 $60 $80 $100 1. Includes C&I, Pinnacle, franchise finance and equipment finance 2. Excludes government insured residential loans
Residential Portfolio Overview At September 30, 2024 23 Residential Loan Product Type FICO Distribution(1) Breakdown by LTV(1) 1. Excludes government insured residential loans. FICOs are refreshed routinely. LTVs are typically based on valuation at origination Prior 21% 2020 12% 2021 42% 2022 16% 2023 6% 2024 3% >759 76% 720-759 14% <720 or NA 10% Breakdown by Vintage(1) 30 Yr Fixed 33% 15 & 20 Year Fixed 12% 10/1 ARM 12% 5/1 & 7/1 ARM 27% Formerly Covered 1% Govt Insured 15% High quality residential portfolio consists primarily of high FICO, low LTV, prime jumbo mortgages with de-minimis charge-offs since inception as well as government insured loans 60% or less 33% 61% - 70% 25% 71% - 80% 40% More than 80% 2%
Stress Testing Results CCAR Severely Adverse Scenario ($ in millions) 24 3.5% 2.6% 0.3% 2.3% Commercial CRE Residential Total —% 1.0% 2.0% 3.0% 4.0% 4.3% 0.6% 2.1% 2.2% 4.0% 2.0% 2.6% CCAR Severely Adverse Scenario Office Industrial Multifamily Retail Hotel Other Total —% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% $327 $150 $23 $500 Lifetime expected losses in the CCAR severely adverse scenario $77 $8 $26 $18 $20 $1 $150 Lifetime expected losses in the CCAR severely adverse scenario 1. Excludes Pinnacle municipal finance and mortgage warehouse lending. 2. Construction loans are included in the chart by their applicable property type. • Bank remains well above well capitalized threshold under hypothetical severe stress CRE Portfolio Stress Test Results(2) Loan Portfolio Stress Test Results(1)(3) 3. Stress testing results based on loan portfolio as of December 31, 2023.
Investment Portfolio 25
High Quality, Short-Duration Securities Portfolio ($ in millions) December 31, 2023 June 30, 2024 September 30, 2024 Portfolio Net Unrealized Loss Fair Value Net Unrealized Gain/(Loss) Fair Value Net Unrealized Gain/(Loss) Fair Value US Government and Agency $ (115) $ 2,656 $ (97) $ 2,999 $ (68) $ 3,162 Private label RMBS and CMOs (301) 2,296 (285) 2,223 (216) 2,296 Private label CMBS (84) 2,199 (60) 1,991 (42) 2,004 Single family real estate-backed securities (18) 366 (14) 333 (6) 346 CLOs (10) 1,113 3 1,159 2 1,070 Other (7) 205 (10) 203 (8) 203 $ (535) $ 8,835 $ (463) $ 8,908 $ (338) $ 9,081 Portfolio Composition US Government and Agency 35% Private label RMBS and CMOs 25% Private label CMBS 22% Single family real estate- backed securities 4% CLOs 12% Other 2% Rating Distribution GOV 35% AAA 56% AA 7% A 1% NR 1% • Unrealized losses continue to decline • No expected credit losses on AFS securities • AFS portfolio duration of 1.73; approximately 70% of the portfolio floating rate • HTM securities total $10 million 26
High Quality, Short-Duration Securities Portfolio At September 30, 2024 Strong credit enhancement levels - no SASB(1) exposure Private Label RMBS Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 2.9 92.0 17.8 2.2 AA 20.9 35.2 28.0 5.3 Wtd. Avg. 3.8 89.2 18.3 2.3 Private Label CMBS Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 30.5 91.7 46.9 7.4 AA 32.1 72.0 42.5 7.8 A 26.7 51.7 38.2 10.0 Wtd. Avg. 30.6 87.9 46.1 7.5 CLOs Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 39.0 72.9 46.7 16.5 AA 30.9 44.9 34.4 15.0 A 35.9 35.9 35.9 23.2 Wtd. Avg. 37.9 68.9 45.1 16.4 AAA 95% AA 5% AAA 85% AA 12% A 3% AAA 86% AA 13% A 1% 271. Single-asset, single-borrower