BankUnited Inc.
01/20/2022 | Press release | Distributed by Public on 01/20/2022 05:49
BANKUNITED, INC. REPORTS 2021 RESULTS - Form 8-K
BANKUNITED, INC. REPORTS 2021 RESULTS
Miami Lakes, Fla. - January 20, 2022 - BankUnited, Inc. (the "Company") (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2021.
"We are pleased with the quarter, with earnings of $1.41 per share, over $1 billion of loan growth, our best loan growth quarter since the second quarter of 2016, over $1 billion in deposit growth and margin expansion of 11 basis points. Our outlook for the Company going into 2022 is optimistic." said Rajinder Singh, Chairman, President and Chief Executive Officer.
For the quarter ended December 31, 2021, the Company reported net income of $125.3 million, or $1.41 per diluted share, compared to $86.9 million or $0.94 per diluted share for the immediately preceding quarter ended September 30, 2021 and $85.7 million, or $0.89 per diluted share, for the quarter ended December 31, 2020.
For the year ended December 31, 2021, the Company reported net income of $415.0 million, or $4.52 per diluted share, compared to $197.9 million, or $2.06 per diluted share, for the year ended December 31, 2020. The return on average stockholders' equity for the year ended December 31, 2021 was 13.3%, while the return on average assets was 1.16%.
Financial Highlights
•Total loans, excluding the runoff of PPP loans, grew by $1.0 billion for the quarter ended December 31, 2021, our largest loan growth quarter since the second quarter of 2016.
•The net interest margin, calculated on a tax-equivalent basis, expanded to 2.44% for the quarter ended December 31, 2021 from 2.33% for both the immediately preceding quarter and for the quarter ended December 31, 2020. Net interest income increased by $10.9 million compared to the immediately preceding quarter ended September 30, 2021 and by $12.6 million compared to the quarter ended December 31, 2020.
•Total deposits increased by $1.3 billion during the quarter ended December 31, 2021. Average non-interest bearing demand deposits grew by $418 million for the quarter ended December 31, 2021, compared to the immediately preceding quarter and by $2.2 billion compared to the quarter ended December 31, 2020. At December 31, 2021, non-interest bearing demand deposits represented 30% of total deposits, compared to 25% of total deposits at December 31, 2020. Non-interest bearing demand deposits declined by $183 million during the quarter ended December 31, 2021.
•The average cost of total deposits was 0.19% for the quarter ended December 31, 2021 compared to 0.20% for the immediately preceding quarter ended September 30, 2021. The average cost of total deposits was 0.43% for the quarter ended December 31, 2020. On a spot basis, the average annual percentage yield ("APY") on total deposits declined to 0.16% at December 31, 2021 from 0.19% at September 30, 2021 and 0.36% at December 31, 2020.
•Criticized and classified loans continued to decline. During the quarter ended December 31, 2021, total criticized and classified loans declined by $367 million. The ratio of non-performing loans to total loans declined to 0.87% at December 31, 2021 from 1.21% at September 30, 2021. Loans currently under short-term deferral totaled $11 million and loans modified under the CARES Act totaled $194 million for a total of $205 million at December 31, 2021, down from a total of $285 million at September 30, 2021.
•For the quarter ended December 31, 2021, the Company recorded a provision for credit losses of $0.2 million compared to a recovery of $(11.8) million for the immediately preceding quarter ended September 30, 2021 and a recovery of credit losses of $(1.6) million for the quarter ended December 31, 2020. For the years ended December 31, 2021 and 2020, the provision for (recovery of) credit losses was $(67.1) million and $178.4 million, respectively. Year over year volatility in the provision is related to the expected economic impact of the onset of the COVID-19 pandemic in 2020 and subsequent economic recovery in 2021.
1
•As previously reported, during the quarter ended December 31, 2021, the Bank reached a settlement with the Florida Department of Revenue related to certain tax matters for the 2009-2019 tax years and recorded a tax benefit of $43.9 million, net of federal impact. Unrelated to the Florida settlement, the Bank recorded an additional $25.2 million tax benefit related to a reduction in the liability for unrecognized tax benefits arising from expiration of statutes of limitation in the Federal and certain state jurisdictions.
•The following table details$40.4 million of notable items that impacted income before income taxes for the quarter ended December 31, 2021 (income (expense) in thousands):
| Gain on sale of single-family residential loans | $ | 18,216 |
| Discontinuance of cash flow hedges | (44,833) | |
| Special employee bonus | (6,809) | |
| Professional fees related to tax settlement | (4,198) | |
| Impairment of operating lease equipment | (2,813) | |
| $ | (40,437) |
•Book value per common share and tangible book value per common share continued to accrete, increasing to $35.47 and $34.56, respectively, at December 31, 2021 from $34.39 and $33.53, respectively, at September 30, 2021 and $32.05 and $31.22, respectively at December 31, 2020.
•During the quarter ended December 31, 2021, the Company repurchased approximately 4.4 million shares of its common stock for an aggregate purchase price of $181.8 million, at a weighted average price of $41.45 per share.
Loans and Leases
A comparison of loan and lease portfolio composition at the dates indicated follows (dollars in thousands):
| December 31, 2021 | September 30, 2021 | December 31, 2020 | ||||||||||
| Residential and other consumer loans | $ | 8,368,380 | 35.2 | % | $ | 7,827,224 | 34.3 | % | $ | 6,348,222 | 26.6 | % |
| Multi-family | 1,154,738 | 4.9 | % | 1,181,935 | 5.2 | % | 1,639,201 | 6.9 | % | |||
| Non-owner occupied commercial real estate | 4,381,610 | 18.4 | % | 4,537,078 | 19.9 | % | 4,963,273 | 20.8 | % | |||
| Construction and land | 165,390 | 0.7 | % | 163,988 | 0.7 | % | 293,307 | 1.2 | % | |||
| Owner occupied commercial real estate | 1,944,658 | 8.2 | % | 2,012,376 | 8.8 | % | 2,000,770 | 8.4 | % | |||
| Commercial and industrial | 4,790,275 | 20.2 | % | 4,166,914 | 18.3 | % | 4,447,383 | 18.6 | % | |||
| PPP | 248,505 | 1.0 | % | 332,548 | 1.5 | % | 781,811 | 3.3 | % | |||
| Pinnacle | 919,641 | 3.9 | % | 932,865 | 4.1 | % | 1,107,386 | 4.6 | % | |||
| Bridge - franchise finance | 342,124 | 1.4 | % | 396,589 | 1.7 | % | 549,733 | 2.3 | % | |||
| Bridge - equipment finance | 357,599 | 1.5 | % | 379,446 | 1.7 | % | 475,548 | 2.0 | % | |||
| Mortgage warehouse lending ("MWL") | 1,092,133 | 4.6 | % | 877,006 | 3.8 | % | 1,259,408 | 5.3 | % | |||
| $ | 23,765,053 | 100.0 | % | $ | 22,807,969 | 100.0 | % | $ | 23,866,042 | 100.0 | % | |
| Operating lease equipment, net | $ | 640,726 | $ | 659,935 | $ | 663,517 |
In the aggregate, commercial loans, excluding the runoff of PPP loans, grew by $500 million during the quarter ended December 31, 2021. The largest increase was in commercial and industrial loans, including owner-occupied commercial real estate which grew by $556 million for the quarter, followed by mortgage warehouse lending which grew by $215 million for the quarter. MWL line utilization was 56% at December 31, 2021 compared to 51% at September 30, 2021 and 62% at December 31, 2020. Commercial real estate portfolio segments in the aggregate declined by $181 million. Balances for Pinnacle and Bridge declined by $13 million and $76 million, respectively. Residential and other consumer loans grew by $541 million during the quarter ended December 31, 2021. GNMA early buyout loans grew by $110 million, totaling $2.0 billion at December 31, 2021.
2
Asset Quality and the Allowance for Credit Losses ("ACL")
The following table presents information about non-performing loans, loans on deferral and CARES Act modifications at December 31, 2021 (in thousands):
| Non-Performing Loans | Currently Under Short-Term Deferral | CARES Act Modification | ||||
|
Residential and other consumer (1)
|
$ | 28,577 | $ | 10,601 | $ | 22,264 |
| Commercial: | ||||||
| CRE by Property Type: | ||||||
| Retail | 18,152 | - | - | |||
| Hotel | 18,282 | - | 14,828 | |||
| Office | 814 | - | - | |||
| Multi-family | 10,865 | - | 7,315 | |||
| Other | 7,167 | - | - | |||
| Owner occupied commercial real estate | 20,453 | - | 15,109 | |||
| Commercial and industrial | 68,720 | - | 106,625 | |||
| Bridge - franchise finance | 32,879 | - | 27,881 | |||
| Total commercial | 177,332 | - | 171,758 | |||
| Total | $ | 205,909 | $ | 10,601 | $ | 194,022 |
(1) Excludes government insured residential loans.
In the table above, "currently under short-term deferral" refers to loans subject to a 90-day payment deferral at December 31, 2021 and "CARES Act modification" refers to loans subject to longer-term modifications that, were it not for the provisions of the CARES Act, which expired on January 1, 2022, would likely have been reported as TDRs. Non-performing loans may include some loans that have been modified under the CARES Act. All of the loans that have rolled off of modification to date have paid off or resumed regular payments.
Non-performing loans totaled $205.9 million or 0.87% of total loans at December 31, 2021, compared to $276.7 million or 1.21% of total loans at September 30, 2021 and $244.5 million or 1.02% of total loans at December 31, 2020. Non-performing loans included $46.1 million, $49.1 million and $51.3 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.19% of total loans at December 31, 2021 and 0.22% of total loans at both September 30, 2021 and December 31, 2020.
The following table presents criticized and classified commercial loans at the dates indicated (in thousands):
| December 31, 2021 | September 30, 2021 | December 31, 2020 | ||||
| Special mention | $ | 148,593 | $ | 153,373 | $ | 711,516 |
| Substandard - accruing | 1,136,378 | 1,432,801 | 1,758,654 | |||
| Substandard - non-accruing | 129,579 | 227,055 | 203,758 | |||
| Doubtful | 47,754 | 16,447 | 11,867 | |||
| Total | $ | 1,462,304 | $ | 1,829,676 | $ | 2,685,795 |
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The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the years ended December 31, 2021 and 2020 (dollars in thousands):
| ACL |
ACL to Total Loans (1)
|
ACL to Non-Performing Loans | Net Charge-offs to Average Loans | |||||
| December 31, 2020 | $ | 257,323 | 1.08 | % | 105.26 | % | 0.26 | % |
| September 30, 2021 | $ | 159,615 | 0.70 | % | 57.69 | % | ||
| December 31, 2021 | $ | 126,457 | 0.53 | % | 61.41 | % | 0.29 | % |
(1) ACL to total loans, excluding government insured residential loans, PPP loans and MWL, which carry nominal or no reserves, was 0.62%, 0.81% and 1.26% at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
The ACL at December 31, 2021 represents management's estimate of lifetime expected credit losses given our assessment of historical data, current conditions and a reasonable and supportable economic forecast as of the balance sheet date. The estimate was informed by Moody's economic scenarios published in December 2021, economic information provided by additional sources, information about borrower financial condition and collateral values, data reflecting the impact of recent events on individual borrowers and other relevant information.
For the quarter ended December 31, 2021, the Company recorded a provision for credit losses of $0.2 million, which included a provision of $1.1 million related to funded loans offset by recoveries of provision related to unfunded loan commitments and accrued interest receivable. The decline in the ACL for the quarter ended December 31, 2021 was primarily attributable to charge-offs, the substantial majority of which were previously reserved for.
The following table summarizes the activity in the ACL for the periods indicated (in thousands):
| Three Months Ended December 31, | Years Ended December 31, | |||||||
| 2021 | 2020 | 2021 | 2020 | |||||
| Beginning balance | $ | 159,615 | $ | 274,128 | $ | 257,323 | $ | 108,671 |
| Cumulative effect of adoption of CECL | - | - | - | 27,305 | ||||
| Balance after adoption of CECL | 159,615 | 274,128 | 257,323 | 135,976 | ||||
| Provision (recovery) | 1,067 | 1,244 | (64,456) | 182,339 | ||||
| Net charge-offs | (34,225) | (18,049) | (66,410) | (60,992) | ||||
| Ending balance | $ | 126,457 | $ | 257,323 | $ | 126,457 | $ | 257,323 |
Net interest income
Net interest income for the quarter ended December 31, 2021 was $206.0 million compared to $195.1 million for the immediately preceding quarter ended September 30, 2021 and $193.4 million for the quarter ended December 31, 2020. Interest income increased by $3.5 million for the quarter ended December 31, 2021 compared to the immediately preceding quarter, and decreased by $13.2 million compared to the quarter ended December 31, 2020. Interest expense decreased by $7.4 million compared to the immediately preceding quarter and by $25.9 million compared to the quarter ended December 31, 2020.
The Company's net interest margin, calculated on a tax-equivalent basis, increased by 0.11% to 2.44% for the quarter ended December 31, 2021, from 2.33% for the immediately preceding quarter ended September 30, 2021. Factors impacting the net interest margin for the quarter ended December 31, 2021 included:
•The average rate paid on FHLB and FRB advances decreased to 1.86% for the quarter ended December 31, 2021, from 2.35% for the quarter ended September 30, 2021. This decrease resulted from the termination and maturity of higher cost cash flow hedges and related borrowings during the quarter ended December 31, 2021.
•The average rate paid on interest bearing deposits decreased to 0.27% for the quarter ended December 31, 2021, from 0.29% for the quarter ended September 30, 2021. This decline reflected continued initiatives taken to lower rates paid on deposits, including the re-pricing of term deposits, partially offset by the issuance of some callable CDs in anticipation of rising rates.
•The tax-equivalent yield on investment securities increased to 1.54% for the quarter ended December 31, 2021 from 1.49% for the quarter ended September 30, 2021. This increase resulted primarily from slower prepayment speeds on securities purchased at a premium.
4
•The tax-equivalent yield on loans increased to 3.50% for the quarter ended December 31, 2021, from 3.45% for the quarter ended September 30, 2021.
Non-interest income and Non-interest expense
Non-interest income totaled $45.6 million for the quarter ended December 31, 2021 compared to $25.5 million for the immediately preceding quarter ended September 30, 2021 and $35.3 million for the quarter ended December 31, 2020. The main reason for the increase in non-interest income for the quarter ended December 31, 2021 compared to the immediately preceding quarter was an increase in the gain on sale of loans. During the quarter, the Company sold a portfolio of single-family residential loans for a gain of $18.2 million.
Non-interest expense totaled $187.9 million for the quarter ended December 31, 2021 compared to $118.0 million for the immediately preceding quarter ended September 30, 2021 and $123.3 million for the quarter ended December 31, 2020. Non-interest expense totaled $547.6 million and $457.2 million for the year ended December 31, 2021 and 2020, respectively. The following table detailsnotable items that impacted non-interest expense for the quarter ended December 31, 2021 (in thousands):
| Discontinuance of cash flow hedges | $ | (44,833) |
| Special employee bonus | (6,809) | |
| Professional fees related to tax settlement | (4,198) | |
| Impairment of operating lease equipment | (2,813) | |
| $ | (58,653) |
•Employee compensation and benefits increased by $13.3 million for the quarter ended December 31, 2021 compared to the immediately preceding quarter. The Company paid a special bonus in the fourth quarter to substantially all of its employees, in recognition of their hard work and efforts in the challenging environment we have faced over the past two years. Employees, regardless of their position in the organization, shared equally in the bonus payout, which totaled $6.8 million. Additionally, there was an increase of $4.6 million in variable compensation accruals for both incentives and regular annual discretionary bonuses in the fourth quarter.
•Professional fees increased by $5.7 million for the quarter ended December 31, 2021 compared to the immediately preceding quarter. The increase is primarily a result of $4.2 million related to the tax settlement with the Florida Department of Revenue discussed above.
•A loss on discontinuance of cash flow hedges totaling $44.8 million resulted from the termination of $401 million notional of pay fixed interest rate swaps at a weighted average pay rate of 3.24% during the quarter ended December 31, 2021.
•Depreciation and impairment of operating lease equipment included $2.8 million resulting from impairment charges related to certain sand cars in the operating lease equipment portfolio.
Earnings Conference Call and Presentation
A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, January 20, 2022 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. The dial in telephone number for the call is (855) 798-3052 (domestic) or (234) 386-2812 (international). The name of the call is BankUnited, Inc. and the conference ID for the call is 1618956. A replay of the call will be available from 12:00 p.m. ET on January 20th through 11:59 p.m. ET on January 27th by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The conference ID for the replay is 1618956. An archived webcast will also be available on the Investor Relations page of www.bankunited.com.
About BankUnited, Inc.
BankUnited, Inc., with total assets of $35.8 billion at December 31, 2021, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 63 banking centers in 13 Florida counties and 4 banking centers in the New York metropolitan area at December 31, 2021.
5
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to, among other things, future events and financial performance.
The Company generally identifies forward-looking statements by terminology such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "could," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company's current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitations) those relating to the Company's operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by the COVID-19 pandemic. If one or more of these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, the Company's actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 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
Source: BankUnited, Inc.
6
BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except share and per share data)
|
December 31, 2021 |
December 31, 2020 |
|||
| ASSETS | ||||
| Cash and due from banks: | ||||
| Non-interest bearing | $ | 19,143 | $ | 20,233 |
| Interest bearing | 295,714 | 377,483 | ||
| Cash and cash equivalents | 314,857 | 397,716 | ||
| Investment securities (including securities recorded at fair value of $10,054,198 and $9,166,683) | 10,064,198 | 9,176,683 | ||
| Non-marketable equity securities | 135,859 | 195,865 | ||
| Loans held for sale | - | 24,676 | ||
| Loans | 23,765,053 | 23,866,042 | ||
| Allowance for credit losses | (126,457) | (257,323) | ||
| Loans, net | 23,638,596 | 23,608,719 | ||
| Bank owned life insurance | 309,477 | 294,629 | ||
| Operating lease equipment, net | 640,726 | 663,517 | ||
| Goodwill | 77,637 | 77,637 | ||
| Other assets | 634,046 | 571,051 | ||
| Total assets | $ | 35,815,396 | $ | 35,010,493 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Liabilities: | ||||
| Demand deposits: | ||||
| Non-interest bearing | $ | 8,975,621 | $ | 7,008,838 |
| Interest bearing | 3,709,493 | 3,020,039 | ||
| Savings and money market | 13,368,745 | 12,659,740 | ||
| Time | 3,384,243 | 4,807,199 | ||
| Total deposits | 29,438,102 | 27,495,816 | ||
| Federal funds purchased | 199,000 | 180,000 | ||
| FHLB advances | 1,905,000 | 3,122,999 | ||
| Notes and other borrowings | 721,416 | 722,495 | ||
| Other liabilities | 514,117 | 506,171 | ||
| Total liabilities | 32,777,635 | 32,027,481 | ||
| Commitments and contingencies | ||||
| Stockholders' equity: | ||||
| Common stock, par value $0.01 per share, 400,000,000 shares authorized; 85,647,986 and 93,067,500 shares issued and outstanding | 856 | 931 | ||
| Paid-in capital | 707,503 | 1,017,518 | ||
| Retained earnings | 2,345,342 | 2,013,715 | ||
| Accumulated other comprehensive loss | (15,940) | (49,152) | ||
| Total stockholders' equity | 3,037,761 | 2,983,012 | ||
| Total liabilities and stockholders' equity | $ | 35,815,396 | $ | 35,010,493 |
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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, | ||||||
| 2021 | 2021 | 2020 | 2021 | 2020 | ||||||
| Interest income: | ||||||||||
| Loans | $ | 198,275 | $ | 194,689 | $ | 207,232 | $ | 800,819 | $ | 864,175 |
| Investment securities | 38,201 | 38,243 | 42,260 | 152,619 | 193,856 | |||||
| Other | 1,397 | 1,413 | 1,628 | 6,010 | 9,578 | |||||
| Total interest income | 237,873 | 234,345 | 251,120 | 959,448 | 1,067,609 | |||||
| Interest expense: | ||||||||||
| Deposits | 13,631 | 14,273 | 29,290 | 67,596 | 199,980 | |||||
| Borrowings | 18,227 | 24,950 | 28,464 | 96,164 | 115,871 | |||||
| Total interest expense | 31,858 | 39,223 | 57,754 | 163,760 | 315,851 | |||||
| Net interest income before provision for credit losses | 206,015 | 195,122 | 193,366 | 795,688 | 751,758 | |||||
| Provision for (recovery of) credit losses | 246 | (11,842) | (1,643) | (67,119) | 178,431 | |||||
| Net interest income after provision for credit losses | 205,769 | 206,964 | 195,009 | 862,807 | 573,327 | |||||
| Non-interest income: | ||||||||||
| Deposit service charges and fees | 5,815 | 5,553 | 4,569 | 21,685 | 16,496 | |||||
|
Gain on sale of loans, net
|
19,003 | 1,403 | 2,425 | 24,394 | 13,170 | |||||
| Gain (loss) on investment securities, net | 590 | (664) | 7,203 | 6,446 | 17,767 | |||||
| Lease financing | 14,041 | 13,212 | 13,547 | 53,263 | 59,112 | |||||
| Other non-interest income | 6,173 | 5,974 | 7,536 | 28,365 | 26,676 | |||||
| Total non-interest income | 45,622 | 25,478 | 35,280 | 134,153 | 133,221 | |||||
| Non-interest expense: | ||||||||||
| Employee compensation and benefits | 70,561 | 57,224 | 60,944 | 243,532 | 217,156 | |||||
| Occupancy and equipment | 12,817 | 11,760 | 11,797 | 47,944 | 48,237 | |||||
| Deposit insurance expense | 3,471 | 3,552 | 6,759 | 18,695 | 21,854 | |||||
| Professional fees | 8,023 | 2,312 | 2,937 | 14,386 | 11,708 | |||||
| Technology and telecommunications | 18,221 | 16,687 | 16,052 | 67,500 | 58,108 | |||||
| Discontinuance of cash flow hedges | 44,833 | - | - | 44,833 | - | |||||
| Depreciation and impairment of operating lease equipment | 15,769 | 12,944 | 12,270 | 53,764 | 49,407 | |||||
| Other non-interest expense | 14,165 | 13,563 | 12,565 | 56,921 | 50,719 | |||||
| Total non-interest expense | 187,860 | 118,042 | 123,324 | 547,575 | 457,189 | |||||
| Income before income taxes | 63,531 | 114,400 | 106,965 | 449,385 | 249,359 | |||||
| Provision (benefit) for income taxes | (61,724) | 27,459 | 21,228 | 34,401 | 51,506 | |||||
| Net income | $ | 125,255 | $ | 86,941 | $ | 85,737 | $ | 414,984 | $ | 197,853 |
| Earnings per common share, basic | $ | 1.42 | $ | 0.94 | $ | 0.89 | $ | 4.52 | $ | 2.06 |
| Earnings per common share, diluted | $ | 1.41 | $ | 0.94 | $ | 0.89 | $ | 4.52 | $ | 2.06 |
8
BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
| Three Months Ended December 31, 2021 |
Three Months Ended September 30, 2021 |
Three Months Ended December 31, 2020 | ||||||||||||||||
|
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 | $ | 22,919,535 | $ | 201,345 | 3.50 | % | $ | 22,879,654 | $ | 197,995 | 3.45 | % | $ | 23,706,859 | $ | 210,896 | 3.55 | % |
|
Investment securities (3)
|
10,113,026 | 38,889 | 1.54 | % | 10,452,255 | 38,939 | 1.49 | % | 9,446,389 | 42,966 | 1.82 | % | ||||||
| Other interest earning assets | 1,184,056 | 1,397 | 0.47 | % | 750,700 | 1,413 | 0.75 | % | 726,273 | 1,628 | 0.89 | % | ||||||
| Total interest earning assets | 34,216,617 | 241,631 | 2.81 | % | 34,082,609 | 238,347 | 2.79 | % | 33,879,521 | 255,490 | 3.01 | % | ||||||
| Allowance for credit losses | (149,319) | (171,381) | (280,243) | |||||||||||||||
| Non-interest earning assets | 1,767,850 | 1,856,608 | 1,817,476 | |||||||||||||||
| Total assets | $ | 35,835,148 | $ | 35,767,836 | $ | 35,416,754 | ||||||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||
| Interest bearing demand deposits | $ | 3,058,355 | $ | 1,481 | 0.19 | % | $ | 3,038,038 | $ | 1,701 | 0.22 | % | $ | 2,903,300 | $ | 3,637 | 0.50 | % |
| Savings and money market deposits | 13,460,084 | 9,619 | 0.28 | % | 13,554,572 | 10,029 | 0.29 | % | 11,839,631 | 14,517 | 0.49 | % | ||||||
| Time deposits | 3,399,302 | 2,531 | 0.30 | % | 2,866,746 | 2,543 | 0.35 | % | 5,360,630 | 11,136 | 0.83 | % | ||||||
| Total interest bearing deposits | 19,917,741 | 13,631 | 0.27 | % | 19,459,356 | 14,273 | 0.29 | % | 20,103,561 | 29,290 | 0.58 | % | ||||||
| Federal funds purchased | 56,793 | 13 | 0.09 | % | 70,054 | 15 | 0.08 | % | 20,707 | 6 | 0.12 | % | ||||||
| FHLB and PPPLF borrowings | 1,909,450 | 8,957 | 1.86 | % | 2,647,314 | 15,678 | 2.35 | % | 3,698,666 | 19,207 | 2.07 | % | ||||||
| Notes and other borrowings | 721,525 | 9,257 | 5.13 | % | 721,638 | 9,257 | 5.13 | % | 722,581 | 9,251 | 5.12 | % | ||||||
| Total interest bearing liabilities | 22,605,509 | 31,858 | 0.56 | % | 22,898,362 | 39,223 | 0.68 | % | 24,545,515 | 57,754 | 0.94 | % | ||||||
| Non-interest bearing demand deposits | 9,330,805 | 8,912,960 | 7,152,967 | |||||||||||||||
| Other non-interest bearing liabilities | 785,254 | 752,774 | 772,277 | |||||||||||||||
| Total liabilities | 32,721,568 | 32,564,096 | 32,470,759 | |||||||||||||||
| Stockholders' equity | 3,113,580 | 3,203,740 | 2,945,995 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,835,148 | $ | 35,767,836 | $ | 35,416,754 | ||||||||||||
| Net interest income | $ | 209,773 | $ | 199,124 | $ | 197,736 | ||||||||||||
| Interest rate spread | 2.25 | % | 2.11 | % | 2.07 | % | ||||||||||||
| Net interest margin | 2.44 | % | 2.33 | % | 2.33 | % |
(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
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
| Years Ended December 31, | ||||||||||||
| 2021 | 2020 | |||||||||||
|
Average Balance |
Interest (1)
|
Yield/
Rate (1)
|
Average Balance |
Interest (1)
|
Yield/
Rate (1)
|
|||||||
| Assets: | ||||||||||||
| Interest earning assets: | ||||||||||||
| Loans | $ | 23,083,973 | $ | 814,101 | 3.53 | % | $ | 23,385,832 | $ | 879,082 | 3.76 | % |
|
Investment securities (2)
|
9,873,178 | 155,353 | 1.57 | % | 8,739,023 | 196,954 | 2.25 | % | ||||
| Other interest earning assets | 1,093,869 | 6,010 | 0.55 | % | 672,634 | 9,578 | 1.42 | % | ||||
| Total interest earning assets | 34,051,020 | 975,464 | 2.86 | % | 32,797,489 | 1,085,614 | 3.31 | % | ||||
| Allowance for credit losses | (197,212) | (236,704) | ||||||||||
| Non-interest earning assets | 1,770,685 | 1,860,322 | ||||||||||
| Total assets | $ | 35,624,493 | $ | 34,421,107 | ||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||
| Interest bearing liabilities: | ||||||||||||
| Interest bearing demand deposits | $ | 3,027,649 | 8,550 | 0.28 | % | $ | 2,582,951 | 19,445 | 0.75 | % | ||
| Savings and money market deposits | 13,339,651 | 43,082 | 0.32 | % | 10,843,894 | 85,572 | 0.79 | % | ||||
| Time deposits | 3,490,082 | 15,964 | 0.46 | % | 6,617,939 | 94,963 | 1.43 | % | ||||
| Total interest bearing deposits | 19,857,382 | 67,596 | 0.34 | % | 20,044,784 | 199,980 | 1.00 | % | ||||
| Federal funds purchased | 33,945 | 30 | 0.09 | % | 71,858 | 418 | 0.58 | % | ||||
| FHLB and PPPLF borrowings | 2,622,723 | 59,116 | 2.25 | % | 4,295,882 | 85,491 | 1.99 | % | ||||
| Notes and other borrowings | 721,803 | 37,018 | 5.13 | % | 592,521 | 29,962 | 5.06 | % | ||||
| Total interest bearing liabilities | 23,235,853 | 163,760 | 0.70 | % | 25,005,045 | 315,851 | 1.26 | % | ||||
| Non-interest bearing demand deposits | 8,480,964 | 5,760,309 | ||||||||||
| Other non-interest bearing liabilities | 784,031 | 786,337 | ||||||||||
| Total liabilities | 32,500,848 | 31,551,691 | ||||||||||
| Stockholders' equity | 3,123,645 | 2,869,416 | ||||||||||
| Total liabilities and stockholders' equity | $ | 35,624,493 | $ | 34,421,107 | ||||||||
| Net interest income | $ | 811,704 | $ | 769,763 | ||||||||
| Interest rate spread | 2.16 | % | 2.05 | % | ||||||||
| Net interest margin | 2.38 | % | 2.35 | % |
(1) On a tax-equivalent basis where applicable
(2) At fair value except for securities held to maturity
10
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 | 2021 | 2020 | 2021 | 2020 | ||||
| Basic earnings per common share: | ||||||||
| Numerator: | ||||||||
| Net income | $ | 125,255 | $ | 85,737 | $ | 414,984 | $ | 197,853 |
|
Distributed and undistributed earnings allocated to participating securities
|
(2,059) | (4,015) | (5,991) | (8,882) | ||||
| Income allocated to common stockholders for basic earnings per common share | $ | 123,196 | $ | 81,722 | $ | 408,993 | $ | 188,971 |
| Denominator: | ||||||||
| Weighted average common shares outstanding | 88,123,835 | 92,725,905 | 91,612,243 | 92,869,736 | ||||
| Less average unvested stock awards | (1,193,180) | (1,160,984) | (1,212,055) | (1,163,480) | ||||
| Weighted average shares for basic earnings per common share | 86,930,655 | 91,564,921 | 90,400,188 | 91,706,256 | ||||
| Basic earnings per common share | $ | 1.42 | $ | 0.89 | $ | 4.52 | $ | 2.06 |
| Diluted earnings per common share: | ||||||||
| Numerator: | ||||||||
| Income allocated to common stockholders for basic earnings per common share | $ | 123,196 | $ | 81,722 | $ | 408,993 | $ | 188,971 |
|
Adjustment for earnings reallocated from participating securities
|
(234) | (67) | (585) | (123) | ||||
| Income used in calculating diluted earnings per common share | $ | 122,962 | $ | 81,655 | $ | 408,408 | $ | 188,848 |
| Denominator: | ||||||||
| Weighted average shares for basic earnings per common share | 86,930,655 | 91,564,921 | 90,400,188 | 91,706,256 | ||||
| Dilutive effect of stock options | - | 20,179 | 134 | 24,608 | ||||
|
Weighted average shares for diluted earnings per common share
|
86,930,655 | 91,585,100 | 90,400,322 | 91,730,864 | ||||
| Diluted earnings per common share | $ | 1.41 | $ | 0.89 | $ | 4.52 | $ | 2.06 |
11
BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
| Three Months Ended December 31, | Years Ended December 31, | |||||||
| 2021 | 2020 | 2021 | 2020 | |||||
|
Financial ratios (4)
|
||||||||
| Return on average assets | 1.39 | % | 0.96 | % | 1.16 | % | 0.57 | % |
| Return on average stockholders' equity | 16.0 | % | 11.6 | % | 13.3 | % | 6.9 | % |
|
Net interest margin (3)
|
2.44 | % | 2.33 | % | 2.38 | % | 2.35 | % |
| December 31, 2021 | September 30, 2021 | December 31, 2020 | ||||
| Asset quality ratios | ||||||
|
Non-performing loans to total loans (1)(5)
|
0.87 | % | 1.21 | % | 1.02 | % |
|
Non-performing assets to total assets (2)(5)
|
0.58 | % | 0.80 | % | 0.71 | % |
| Allowance for credit losses to total loans | 0.53 | % | 0.70 | % | 1.08 | % |
|
Allowance for credit losses to non-performing loans (1)(5)
|
61.41 | % | 57.69 | % | 105.26 | % |
|
Net charge-offs to average loans
|
0.29 | % | 0.26 | % |
(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 $46.1 million or 0.19% of total loans and 0.13% of total assets at December 31, 2021; and $51.3 million or 0.22% of total loans and 0.15% of total assets at December 31, 2020.
| December 31, 2021 | December 31, 2020 | Required to be Considered Well Capitalized | ||||||||
| BankUnited, Inc. | BankUnited, N.A. | BankUnited, Inc. | BankUnited, N.A. | |||||||
| Capital ratios | ||||||||||
| Tier 1 leverage | 8.4 | % | 9.6 | % | 8.6 | % | 9.5 | % | 5.0 | % |
| Common Equity Tier 1 ("CET1") risk-based capital | 12.6 | % | 14.5 | % | 12.6 | % | 13.9 | % | 6.5 | % |
| Total risk-based capital | 14.3 | % | 14.9 | % | 14.7 | % | 14.8 | % | 10.0 | % |
On a fully-phased in basis with respect to the adoption of CECL, the Company's and the Bank's CET1 risk-based capital ratios would have been 12.5% and 14.4%, respectively, at December 31, 2021.
12
Non-GAAP Financial Measures
ACL to total loans, excluding government insured residential loans, PPP loans and MWL is a non-GAAP financial measure. Management believes this measure is relevant to understanding the adequacy of the ACL coverage, excluding the impact of loans which carry nominal or no reserves. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions. The following table reconciles the non-GAAP financial measurement of ACL to total loans, excluding government insured residential loans, PPP loans and MWL to the comparable GAAP financial measurement of ACL to total loans at the dates indicated (dollars in thousands):
| December 31, 2021 | September 30, 2021 | December 31, 2020 | ||||
| Total loans (GAAP) | $ | 23,765,053 | $ | 22,807,969 | $ | 23,866,042 |
| Less: Government insured residential loans | 2,023,221 | 1,913,497 | 1,419,074 | |||
| Less: PPP loans | 248,505 | 332,548 | 781,811 | |||
| Less: MWL | 1,092,133 | 877,006 | 1,259,408 | |||
| Total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP) | $ | 20,401,194 | $ | 19,684,918 | $ | 20,405,749 |
| ACL | $ | 126,457 | $ | 159,615 | $ | 257,323 |
| ACL to total loans (GAAP) | 0.53 | % | 0.70 | % | 1.08 | % |
| ACL to total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP) | 0.62 | % | 0.81 | % | 1.26 | % |
Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data):
| December 31, 2021 | September 30, 2021 | December 31, 2020 | ||||
| Total stockholders' equity (GAAP) | $ | 3,037,761 | $ | 3,096,674 | $ | 2,983,012 |
| Less: goodwill | 77,637 | 77,637 | 77,637 | |||
| Tangible stockholders' equity (non-GAAP) | $ | 2,960,124 | $ | 3,019,037 | $ | 2,905,375 |
| Common shares issued and outstanding | 85,647,986 | 90,049,326 | 93,067,500 | |||
| Book value per common share (GAAP) | $ | 35.47 | $ | 34.39 | $ | 32.05 |
| Tangible book value per common share (non-GAAP) | $ | 34.56 | $ | 33.53 | $ | 31.22 |
13