BankUnited, Inc. Reports Second Quarter 2016 Results

MIAMI LAKES, Fla.--()--BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2016.

For the quarter ended June 30, 2016, the Company reported net income of $56.7 million, or $0.52 per diluted share, compared to $46.6 million, or $0.43 per diluted share, for the quarter ended June 30, 2015. For the six months ended June 30, 2016, the Company reported net income of $111.6 million, or $1.03 per diluted share. The Company reported net income of $93.1 million, or $0.87 per diluted share, for the six months ended June 30, 2015.

John Kanas, Chairman, President and Chief Executive Officer, said, "Despite significant headwinds facing our industry, BankUnited has turned in another excellent quarter."

Performance Highlights

  • Total interest earning assets increased by $1.6 billion during the second quarter of 2016. New loans and leases, including equipment under operating lease, grew by $1.2 billion during the quarter. For the six months ended June 30, 2016, new loans and leases increased by $1.7 billion.
  • Total deposits increased by $718 million for the quarter ended June 30, 2016 to $18.2 billion. For the six months ended June 30, 2016, total deposits increased by $1.3 billion.
  • Net interest income increased by $33.3 million to $214.3 million for the quarter ended June 30, 2016 from $181.0 million for the quarter ended June 30, 2015. Interest income increased by $47.8 million, primarily driven by increases in the average balances of loans and investment securities outstanding. Interest expense increased by $14.5 million due primarily to an increase in average interest bearing liabilities.
  • The net interest margin, calculated on a tax-equivalent basis, was 3.75% for the quarter ended June 30, 2016 compared to 3.95% for the quarter ended June 30, 2015 and 3.83% for the immediately preceding quarter ended March 31, 2016. The origination of new loans at current market yields lower than those on loans acquired in the FSB Acquisition (as defined below) and the cost of the senior notes issued in November 2015 contributed to the decline in the net interest margin.
  • Book value and tangible book value per common share grew to $22.38 and $21.63, respectively, at June 30, 2016.

Capital

The Company and its banking subsidiary continue to exceed all regulatory guidelines required to be considered well capitalized. The Company’s and BankUnited N.A.'s regulatory capital ratios at June 30, 2016 were as follows:

  BankUnited, Inc.       BankUnited, N.A.
Tier 1 leverage 8.7 % 9.7 %
 
Common Equity Tier 1 ("CET1") risk-based capital 11.8 % 13.1 %
 
Tier 1 risk-based capital 11.8 % 13.1 %
 
Total risk-based capital 12.6 % 13.8 %

Loans and Leases

Loans, including premiums, discounts and deferred fees and costs, increased to $18.2 billion at June 30, 2016 from $16.6 billion at December 31, 2015. New loans grew to $17.5 billion while loans acquired in the FSB acquisition declined to $766 million at June 30, 2016.

For the quarter ended June 30, 2016, new commercial loans, including commercial real estate loans, commercial and industrial loans, and loans and leases originated by our commercial lending subsidiaries, grew $1.0 billion to $14.2 billion. New residential loans grew by $132 million to $3.2 billion during the second quarter of 2016.

The New York franchise contributed $373 million to new loan growth for the quarter while the Florida franchise contributed $404 million. The Company's national platforms contributed $386 million of new loan growth. We refer to our commercial lending subsidiaries, our mortgage warehouse lending operations, the small business finance unit and our residential loan purchase program as national platforms. At June 30, 2016, the new loan portfolio included $6.0 billion, $6.1 billion and $5.4 billion attributable to the Florida franchise, the New York franchise and the national platforms, respectively.

A comparison of portfolio composition at the dates indicated follows:

   
New Loans Total Loans
June 30, 2016  

December 31,
2015

June 30, 2016  

December 31,
2015

Single family residential and home equity 18.1 % 18.4 % 21.3 % 22.3 %
Multi-family 21.1 % 21.9 % 20.3 % 20.9 %
Commercial real estate 19.8 % 18.4 % 19.0 % 17.5 %
Commercial real estate - owner occupied 9.1 % 8.5 % 8.8 % 8.2 %
Construction and land 2.3 % 2.2 % 2.2 % 2.1 %
Commercial and industrial 17.1 % 17.6 % 16.4 % 16.7 %
Commercial lending subsidiaries 12.3 % 12.8 % 11.8 % 12.1 %
Consumer 0.2 % 0.2 % 0.2 % 0.2 %
100.0 % 100.0 % 100.0 % 100.0 %

Asset Quality and Allowance for Loan and Lease Losses

For the quarters ended June 30, 2016 and 2015, the Company recorded provisions for loan losses of $14.3 million and $8.4 million, respectively, substantially all of which related to new loans. For the six months ended June 30, 2016 and 2015, the Company recorded provisions for loan losses of $18.0 million and $16.6 million, respectively. Of these amounts, provisions of $18.7 million and $17.0 million, respectively, related to new loans. The provision for loan losses for all of these periods related primarily to corresponding growth in the loan portfolio. For the quarter and six months ended June 30, 2016, the provision for loan losses also reflected increases in reserves related to the taxi medallion portfolio.

Asset quality remains strong. The ratio of non-performing, non-covered loans to total non-covered loans was 0.46% and 0.37% at June 30, 2016 and December 31, 2015, respectively. The ratio of total non-performing loans to total loans was 0.46% at June 30, 2016 and 0.43% at December 31, 2015. At June 30, 2016, non-performing assets totaled $97.4 million, including $13.0 million of other real estate owned (“OREO”) and other repossessed assets, compared to $82.7 million, including $11.2 million of OREO and other repossessed assets, at December 31, 2015. Non-covered, non-performing assets totaled $84.8 million, or 0.32% of total assets, at June 30, 2016 compared to $61.5 million, or 0.26% at December 31, 2015. The ratio of the allowance for non-covered loan and lease losses to non-performing, non-covered loans was 163.90% and 204.45% at June 30, 2016 and December 31, 2015, respectively. The annualized ratio of net charge-offs to average non-covered loans was 0.09% for the six months ended June 30, 2016, compared to 0.06% for the six months ended June 30, 2015.

The following tables summarize the activity in the allowance for loan and lease losses for the periods indicated (in thousands):

   
Three Months Ended June 30, 2016 Three Months Ended June 30, 2015
ACI Loans  

Non-ACI
Loans

  New Loans   Total ACI Loans  

Non-ACI

Loans

  New Loans   Total
Balance at beginning of period $ $ 3,885 $ 121,759 $ 125,644 $ $ 3,124 $ 96,712 $ 99,836
Provision 57 14,276 14,333 45 8,376 8,421
Charge-offs (501 ) (5,325 ) (5,826 ) (630 ) (884 ) (1,514 )
Recoveries   12   1,555   1,567     31   611   642  
Balance at end of period $   $ 3,453   $ 132,265   $ 135,718   $   $ 2,570   $ 104,815   $ 107,385  
   
Six Months Ended June 30, 2016 Six Months Ended June 30, 2015
ACI Loans  

Non-ACI
Loans

  New Loans   Total ACI Loans  

Non-ACI
Loans

  New Loans   Total
Balance at beginning of period $ $ 4,868 $ 120,960 $ 125,828 $ $ 4,192 $ 91,350 $ 95,542
Provision (recovery) (674 ) 18,715 18,041 (406 ) 16,974 16,568
Charge-offs (839 ) (9,133 ) (9,972 ) (1,269 ) (4,283 ) (5,552 )
Recoveries   98   1,723   1,821     53   774   827  
Balance at end of period $   $ 3,453   $ 132,265   $ 135,718   $   $ 2,570   $ 104,815   $ 107,385  

Deposits

At June 30, 2016, deposits totaled $18.2 billion compared to $16.9 billion at December 31, 2015. The average cost of total deposits was 0.66% for the quarter ended June 30, 2016, compared to 0.63% for the immediately preceding quarter ended March 31, 2016 and 0.60% for the quarter ended June 30, 2015. The average cost of interest bearing deposits was 0.78% for the quarter ended June 30, 2016, compared to 0.76% for the immediately preceding quarter ended March 31, 2016 and 0.74% for the quarter ended June 30, 2015. The average cost of total deposits was 0.64% for the six months ended June 30, 2016, compared to 0.59% for the six months ended June 30, 2015.

Net interest income

Net interest income for the quarter ended June 30, 2016 increased to $214.3 million from $181.0 million for the quarter ended June 30, 2015. Net interest income was $421.2 million for the six months ended June 30, 2016, compared to $353.7 million for the six months ended June 30, 2015. Increases in interest income were partially offset by increases in interest expense. The increases in interest income were primarily attributable to an increase in the average balance of loans, partially offset by a decline in the related average yield. Increases in the average balance of investment securities and related average yields also contributed to increased interest income. Interest expense increased due primarily to an increase in average interest bearing liabilities and was also impacted by the cost of the senior debt issued in November 2015.

The Company’s net interest margin, calculated on a tax-equivalent basis, was 3.75% for the quarter ended June 30, 2016 compared to 3.95% for the quarter ended June 30, 2015 and 3.83% for the immediately preceding quarter ended March 31, 2016. Net interest margin, calculated on a tax-equivalent basis, was 3.79% for the six months ended June 30, 2016, compared to 3.99% for the six months ended June 30, 2015. Significant factors impacting this expected trend in net interest margin for the quarter and six months ended June 30, 2016 included:

  • The tax-equivalent yield on loans declined to 5.14% and 5.20% for the quarter and six months ended June 30, 2016 from 5.46% and 5.50% for the quarter and six months ended June 30, 2015, primarily because new loans, originated at yields lower than those on loans acquired in the FSB Acquisition, comprised a greater percentage of total loans.
  • The tax-equivalent yield on new loans was 3.51% and 3.55% for the quarter and six months ended June 30, 2016, compared to 3.52% and 3.50% for the quarter and six months ended June 30, 2015.
  • The tax-equivalent yield on loans acquired in the FSB Acquisition increased to 39.38% and 37.87% for the quarter and six months ended June 30, 2016 from 29.31% and 27.74% for the quarter and six months ended June 30, 2015.
  • The tax-equivalent yield on investment securities increased to 2.82% and 2.80% for the quarter and six months ended June 30, 2016 from 2.37% and 2.48% for the quarter and six months ended June 30, 2015.
  • The average rate on interest bearing liabilities increased to 0.93% and 0.94%, respectively, for the quarter and six months ended June 30, 2016 from 0.82% for both the quarter and six months ended June 30, 2015, reflecting the impact of the senior notes issued in the fourth quarter of 2015, as well as higher average rates on interest bearing deposits.

The Company’s net interest margin continues to be impacted by reclassifications from non-accretable difference to accretable yield on ACI loans. Non-accretable difference at acquisition represented the difference between the total contractual payments due and the cash flows expected to be received on these loans. The accretable yield on ACI loans represented the amount by which undiscounted expected future cash flows exceeded the recorded investment in the loans. As the Company’s expected cash flows from ACI loans have increased since the FSB Acquisition, the Company has reclassified amounts from non-accretable difference to accretable yield.

Changes in accretable yield on ACI loans for the six months ended June 30, 2016 and the year ended December 31, 2015 were as follows (in thousands):

Balance at December 31, 2014       $ 1,005,312
Reclassifications from non-accretable difference 192,291
Accretion (295,038 )
Balance at December 31, 2015 902,565
Reclassifications from non-accretable difference

54,275

Accretion (153,440 )
Balance at June 30, 2016 $

803,400

 

Non-interest income

Non-interest income totaled $28.9 million and $52.1 million, respectively, for the quarter and six months ended June 30, 2016 compared to $21.1 million and $41.8 million, respectively, for the quarter and six months ended June 30, 2015.

Income from lease financing increased by $3.9 million and $8.3 million, respectively, for the quarter and six months ended June 30, 2016. These increases generally corresponded to growth in the portfolio of equipment under operating lease. Increases of $2.7 million and $3.9 million in securities gains for the quarter and six months ended June 30, 2016, respectively, also impacted the overall increase in non-interest income.

Gain on sale of loans declined by $9.1 million and $17.8 million, respectively, for the quarter and six months ended June 30, 2016 from the comparable periods in the prior year. For the quarter ended June 30, 2016, gains on the sale of non-covered loans increased by $2.4 million while gains on the sale of covered loans declined by $11.6 million. For the six months ended June 30, 2016, gains on the sale of non-covered loans increased by $4.5 million while gains on the sale of covered loans declined by $22.3 million. Substantially all of the increase in gains on the sale of non-covered loans in 2016 related to sales of loans by the small business finance unit acquired in May 2015. Transactions in the covered assets are discussed further below.

The provision for (recovery of) loan losses for covered loans, net income from resolution of covered assets, gains or losses from the sale of covered loans and gains or losses related to covered OREO all relate to transactions in the covered assets. The line item Net loss on FDIC indemnification represents the mitigating impact of FDIC indemnification on gains and losses arising from these transactions in the covered assets. The impact on pre-tax earnings of these transactions, net of FDIC indemnification, for the quarter and six months ended June 30, 2016 was $1.1 million and $2.7 million, respectively, compared to $4.1 million and $9.1 million, respectively, for the quarter and six months ended June 30, 2015.

The most significant item contributing to the variance in the impact on pre-tax earnings of these transactions in covered assets for the quarter and six months ended June 30, 2016 compared to the quarter and six months ended June 30, 2015 was sales of covered loans. The following table summarizes the impact of the sale of covered loans for the periods indicated (in thousands):

    Three Months Ended June 30,   Six Months Ended June 30,
2016   2015 2016   2015
Gain (loss) on sale of covered loans $ (4,151 ) $ 7,417 $ (4,863 ) $ 17,423
Net gain (loss) on FDIC indemnification 3,363   (5,928 ) 3,932   (14,046 )
Net impact on pre-tax earnings $ (788 ) $ 1,489   $ (931 ) $ 3,377  

The variance in results of covered loan sales related primarily to the characteristics of the loans sold and the dynamics of secondary market demand for these assets. Income from resolution of covered assets, net of the impact of related FDIC indemnification, was $3.5 million for the six months ended June 30, 2016 compared to $5.9 million for the six months ended June 30, 2015. The decline was attributable to lower income from paid-in-full resolutions.

Non-interest expense

Non-interest expense totaled $144.1 million and $286.2 million, respectively, for the quarter and six months ended June 30, 2016 compared to $123.4 million and $237.6 million, respectively, for the quarter and six months ended June 30, 2015. The most significant component of the increases in non-interest expense was increased amortization of the FDIC indemnification asset.

Amortization of the FDIC indemnification asset was $38.1 million and $77.8 million, respectively, for the quarter and six months ended June 30, 2016, compared to $26.5 million and $48.5 million, respectively, for the quarter and six months ended June 30, 2015. The amortization rate increased to 23.08% and 22.65%, respectively, for the quarter and six months ended June 30, 2016 from 11.89% and 10.61%, respectively, for the quarter and six months ended June 30, 2015. As the expected cash flows from ACI loans have increased, expected cash flows from the FDIC indemnification asset have decreased, resulting in continued increases in the amortization rate.

Increases in depreciation of equipment under operating lease for the quarter and six months ended June 30, 2016 corresponded to growth in the portfolio of equipment under operating lease.

Provision for income taxes

The effective income tax rate was 33.0% and 33.9%, respectively, for the quarter and six months ended June 30, 2016, compared to 33.5% and 34.1%, respectively, for the quarter and six months ended June 30, 2015.

Non-GAAP Financial Measures

Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful base for comparability to other financial institutions. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at June 30, 2016 (in thousands except share and per share data):

Total stockholders’ equity       $ 2,331,146
Less: goodwill and other intangible assets 78,185
Tangible stockholders’ equity $ 2,252,961
 
Common shares issued and outstanding 104,166,800
 
Book value per common share $ 22.38
 
Tangible book value per common share $ 21.63

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Wednesday, July 20, 2016 with Chairman, President and Chief Executive Officer, John A. Kanas, and Chief Financial Officer, Leslie N. Lunak.

The earnings release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. The call may be accessed via a live Internet webcast at www.bankunited.com or through a dial in telephone number at (855) 798-3052 (domestic) or (234) 386-2812 (international). The name of the call is BankUnited, Inc. and the confirmation number for the call is 46517582. A replay of the call will be available from 12:00 p.m. ET on July 20th through 11:59 p.m. ET on July 27th by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The pass code for the replay is 46517582. An archived webcast will also be available on the Investor Relations page of www.bankunited.com.

About BankUnited, Inc. and the FSB Acquisition

BankUnited, Inc., with total assets of $26.3 billion at June 30, 2016, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 95 branches in 15 Florida counties and 6 banking centers in the New York metropolitan area at June 30, 2016.

The Company was organized by a management team led by its Chairman, President and Chief Executive Officer, John A. Kanas, in 2009. On May 21, 2009, BankUnited acquired substantially all of the assets and assumed all of the non-brokered deposits and substantially all other liabilities of BankUnited, FSB from the FDIC, in a transaction referred to as the FSB Acquisition. Concurrently with the FSB Acquisition, BankUnited entered into two loss sharing agreements, or the Loss Sharing Agreements, which covered certain legacy assets, including the entire legacy loan portfolio and OREO, and certain purchased investment securities. Assets covered by the Loss Sharing Agreements are referred to as “covered assets” (or, in certain cases, “covered loans”). The Loss Sharing Agreements do not apply to subsequently purchased or originated loans (“new loans”) or other assets. Effective May 22, 2014 and consistent with the terms of the Loss Sharing Agreements, loss share coverage was terminated for those commercial loans and OREO and certain investment securities that were previously covered under the Loss Sharing Agreements. Pursuant to the terms of the Loss Sharing Agreements, the covered assets are subject to a stated loss threshold whereby the FDIC will reimburse BankUnited for 80% of losses, including certain interest and expenses, up to the $4.0 billion stated threshold and 95% of losses in excess of the $4.0 billion stated threshold. The Company’s current estimate of cumulative losses on the covered assets is approximately $3.8 billion. The Company has received $2.7 billion from the FDIC in reimbursements under the Loss Sharing Agreements for claims filed for incurred losses as of June 30, 2016.

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” 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 relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 available at the SEC’s website (www.sec.gov).

   

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)

 
June 30,
2016
December 31,
2015
ASSETS
Cash and due from banks:
Non-interest bearing $ 35,866 $ 31,515
Interest bearing 98,336 39,613
Interest bearing deposits at Federal Reserve Bank 221,946 192,366
Federal funds sold 3,526   4,006  
Cash and cash equivalents 359,674 267,500
Investment securities available for sale, at fair value 5,685,432 4,859,539
Investment securities held to maturity 10,000 10,000
Non-marketable equity securities 271,734 219,997
Loans held for sale 32,582 47,410
Loans (including covered loans of $716,593 and $809,540) 18,219,602 16,636,603
Allowance for loan and lease losses (135,718 ) (125,828 )
Loans, net 18,083,884 16,510,775
FDIC indemnification asset 633,744 739,880
Bank owned life insurance 235,596 225,867
Equipment under operating lease, net 478,937 483,518
Deferred tax asset, net 72,046 105,577
Goodwill and other intangible assets 78,185 78,330
Other assets 367,378   335,074  
Total assets $ 26,309,192   $ 23,883,467  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Non-interest bearing $ 2,986,794 $ 2,874,533
Interest bearing 1,429,028 1,167,537
Savings and money market 8,319,729 8,288,340
Time 5,496,502   4,608,091  
Total deposits 18,232,053 16,938,501
Federal Home Loan Bank advances 4,943,903 4,008,464
Notes and other borrowings 402,762 402,545
Other liabilities 399,328   290,059  
Total liabilities 23,978,046 21,639,569
 
Commitments and contingencies
 
Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized;
104,166,800 and 103,626,255 shares issued and outstanding 1,042 1,036
Paid-in capital 1,415,758 1,406,786
Retained earnings 880,531 813,894
Accumulated other comprehensive income 33,815   22,182  
Total stockholders' equity 2,331,146   2,243,898  
Total liabilities and stockholders' equity $ 26,309,192   $ 23,883,467  
 
   

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

 
Three Months Ended June 30, Six Months Ended June 30,
2016   2015 2016   2015
Interest income:
Loans $ 220,630 $ 184,010 $ 435,206 $ 355,389
Investment securities 36,710 26,284 70,251 54,504
Other 3,124   2,340   5,814   4,623  
Total interest income 260,464   212,634   511,271   414,516  
Interest expense:
Deposits 28,833 21,855 55,459 41,859
Borrowings 17,321   9,801   34,661   18,951  
Total interest expense 46,154   31,656   90,120   60,810  
Net interest income before provision for loan losses 214,310 180,978 421,151 353,706
Provision for (recovery of) loan losses (including
$57, $45, $(674) and $(406) for covered loans) 14,333   8,421   18,041   16,568  
Net interest income after provision for loan losses 199,977   172,557   403,110   337,138  
Non-interest income:
Income from resolution of covered assets, net 9,545 13,743 17,543 28,897
Net loss on FDIC indemnification (4,114 ) (16,771 ) (10,403 ) (37,036 )
Service charges and fees 4,796 4,492 9,358 8,943
Gain (loss) on sale of loans, net (including gain
(loss) related to covered loans of $(4,151),
$7,417, $(4,863) and $17,423) (903 ) 8,223 587 18,389
Gain on investment securities available for sale, net 3,858 1,128 7,057 3,150
Lease financing 10,974 7,044 21,574 13,281
Other non-interest income 4,701   3,199   6,339   6,175  
Total non-interest income 28,857   21,058   52,055   41,799  
Non-interest expense:
Employee compensation and benefits 55,752 51,845 111,212 101,324
Occupancy and equipment 18,784 18,934 37,775 37,104
Amortization of FDIC indemnification asset 38,060 26,460 77,754 48,465
Deposit insurance expense 4,231 3,163 7,923 6,081
Professional fees 3,604 2,680 6,235 5,978
Telecommunications and data processing 3,721 3,345 7,054 6,816
Depreciation of equipment under operating lease 6,647 4,073 13,149 7,511
Other non-interest expense 13,313   12,948   25,118   24,313  
Total non-interest expense 144,112   123,448   286,220   237,592  
Income before income taxes 84,722 70,167 168,945 141,345
Provision for income taxes 27,997   23,530   57,346   48,251  
Net income $ 56,725   $ 46,637   $ 111,599   $ 93,094  
Earnings per common share, basic $ 0.53   $ 0.44   $ 1.04   $ 0.88  
Earnings per common share, diluted $ 0.52   $ 0.43   $ 1.03   $ 0.87  
Cash dividends declared per common share $ 0.21   $ 0.21   $ 0.42   $ 0.42  
 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 
Three Months Ended June 30,
2016   2015
Average Balance  

Interest(1)

 

Yield/
Rate(1)(2)

Average Balance  

Interest(1)

 

Yield/
Rate(1)(2)

Assets:
Interest earning assets:
Loans $ 17,627,385 $ 226,106 5.14 % $ 13,765,655 $ 187,730 5.46 %
Investment securities (3) 5,594,891 39,442 2.82 % 4,573,148 27,118 2.37 %
Other interest earning assets 534,119   3,124   2.35 % 452,272   2,340   2.07 %
Total interest earning assets 23,756,395 268,672 4.53 % 18,791,075 217,188 4.63 %
Allowance for loan and lease losses (131,061 ) (104,402 )
Non-interest earning assets 1,950,846   1,948,382  
Total assets $ 25,576,180   $ 20,635,055  
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits $ 1,435,252 2,115 0.59 % $ 1,121,215 1,290 0.46 %
Savings and money market deposits 8,152,354 12,314 0.61 % 6,602,690 8,927 0.54 %
Time deposits 5,189,699   14,404   1.12 % 4,190,187   11,638   1.11 %
Total interest bearing deposits 14,777,305 28,833 0.78 % 11,914,092 21,855 0.74 %
FHLB advances 4,715,960 11,999 1.02 % 3,599,635 9,492 1.06 %
Notes and other borrowings 402,751   5,322   5.31 % 11,307   309   10.96 %
Total interest bearing liabilities 19,896,016 46,154   0.93 % 15,525,034 31,656   0.82 %
Non-interest bearing demand deposits 2,943,378 2,675,306
Other non-interest bearing liabilities 415,071   285,760  
Total liabilities 23,254,465 18,486,100
Stockholders' equity 2,321,715   2,148,955  
Total liabilities and stockholders' equity $ 25,576,180   $ 20,635,055  
Net interest income $ 222,518   $ 185,532  
Interest rate spread 3.60 % 3.81 %
Net interest margin 3.75 % 3.95 %
 
 

(1) On a tax-equivalent basis where applicable

(2) Annualized

(3) At fair value except for securities held to maturity

 
  Six Months Ended June 30,
2016   2015

 

Average Balance

 

Interest(1)

 

Yield/

Rate(1)(2)

Average Balance

 

Interest(1)

 

Yield/
Rate(1)(2)

Assets:
Interest earning assets:
Loans $ 17,172,942 $ 445,733 5.20 % $ 13,232,955 $ 362,633 5.50 %

Investment securities(3)

5,375,775 75,217 2.80 % 4,529,279 56,115 2.48 %
Other interest earning assets 517,978   5,814   2.26 % 469,989   4,623   1.98 %
Total interest earning assets 23,066,695 526,764 4.58 % 18,232,223 423,371 4.66 %
Allowance for loan and lease losses (130,245 ) (101,149 )
Non-interest earning assets 1,978,162   1,955,576  
Total assets $ 24,914,612   $ 20,086,650  
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits $ 1,292,458 3,916 0.61 % $ 1,016,051 2,333 0.46 %
Savings and money market deposits 8,130,074 24,311 0.60 % 6,360,315 16,687 0.53 %
Time deposits 4,979,686   27,232   1.10 % 4,116,330   22,839   1.12 %
Total interest bearing deposits 14,402,218 55,459 0.77 % 11,492,696 41,859 0.73 %
FHLB advances 4,473,793 24,016 1.08 % 3,480,322 18,332 1.06 %
Notes and other borrowings 403,023   10,645   5.31 %   11,212   620   11.15 %
Total interest bearing liabilities 19,279,034 90,120   0.94 % 14,984,230 60,811   0.82 %
Non-interest bearing demand deposits 2,926,585 2,708,808
Other non-interest bearing liabilities 417,467   274,845  
Total liabilities 22,623,086 17,967,883
Stockholders' equity 2,291,526   2,118,767  
Total liabilities and stockholders' equity $ 24,914,612   $ 20,086,650  
Net interest income $ 436,644   $ 362,560  
Interest rate spread 3.64 % 3.84 %
Net interest margin 3.79 % 3.99 %
 
 

(1) On a tax-equivalent basis where applicable

(2) Annualized

(3) At fair value except for securities held to maturity

 
   

BANKUNITED, INC. AND SUBSIDIARIES

EARNINGS PER COMMON SHARE

(In thousands except share and per share amounts)

 
Three Months Ended June 30, Six Months Ended June 30,

 

2016   2015 2016   2015
Basic earnings per common share:
Numerator:
Net income $ 56,725 $ 46,637 $ 111,599 $ 93,094
Distributed and undistributed earnings allocated to participating securities (2,282 ) (1,810 ) (4,490 ) (3,582 )
Income allocated to common stockholders for basic earnings per common share $ 54,443 $ 44,827 $ 107,109 $ 89,512
Denominator:
Weighted average common shares outstanding 104,160,894 103,444,183 104,039,977 102,841,376
Less average unvested stock awards (1,193,517 ) (1,174,496 ) (1,173,213 ) (1,094,366 )
Weighted average shares for basic earnings per common share 102,967,377   102,269,687   102,866,764   101,747,010  
Basic earnings per common share $ 0.53   $ 0.44   $ 1.04   $ 0.88  
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share $ 54,443 $ 44,827 $ 107,109 $ 89,512
Adjustment for earnings reallocated from participating securities (81 ) 5   (182 ) 10  
Income used in calculating diluted earnings per common share $ 54,362 $ 44,832 $ 106,927 $ 89,522
Denominator:
Weighted average shares for basic earnings per common share 102,967,377 102,269,687 102,866,764 101,747,010
Dilutive effect of stock options 764,435   863,380   771,592   763,202  
Weighted average shares for diluted earnings per common share 103,731,812   103,133,067   103,638,356   102,510,212  
Diluted earnings per common share $ 0.52   $ 0.43   $ 1.03   $ 0.87  
 
   

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 
Three Months Ended June 30, Six Months Ended June 30,
2016   2015 2016   2015
Financial ratios (5)
Return on average assets 0.89 % 0.91 % 0.90 % 0.93 %
Return on average stockholders’ equity 9.83 % 8.70 % 9.79 % 8.86 %
Net interest margin (4) 3.75 % 3.95 % 3.79 % 3.99 %
                          June 30, 2016   December 31, 2015
Capital ratios
Tier 1 leverage 8.7 % 9.3 %
CET1 risk-based capital 11.8 % 12.6 %
Tier 1 risk-based capital 11.8 % 12.6 %
Total risk-based capital 12.6 % 13.4 %
  June 30, 2016   December 31, 2015
Non-Covered   Total Non-Covered   Total
Asset quality ratios
Non-performing loans to total loans (1) (3) 0.46 % 0.46 % 0.37 % 0.43 %
Non-performing assets to total assets (2) 0.32 % 0.37 % 0.26 % 0.35 %
Allowance for loan and lease losses to total loans (3) 0.76 % 0.74 % 0.76 % 0.76 %
Allowance for loan and lease losses to non-performing loans (1) 163.90 % 160.81 % 204.45 % 175.90 %
Net charge-offs to average loans (5) 0.09 % 0.10 % 0.09 % 0.10 %
 

(1) We define non-performing loans to include non-accrual loans, and loans, other than ACI loans, that are past due 90 days or more and still accruing. Contractually delinquent ACI loans on which interest continues to be accreted are excluded from non-performing loans.

(2) Non-performing assets include non-performing loans, OREO and other repossessed assets.

(3) Total loans include premiums, discounts, and deferred fees and costs.

(4) On a tax-equivalent basis.

(5) Annualized.

Contacts

BankUnited, Inc.
Investor Relations:
Leslie N. Lunak, 786-313-1698
llunak@bankunited.com
or
Media Relations:
Mary Harris, 305-817-8117
mharris@bankunited.com

Contacts

BankUnited, Inc.
Investor Relations:
Leslie N. Lunak, 786-313-1698
llunak@bankunited.com
or
Media Relations:
Mary Harris, 305-817-8117
mharris@bankunited.com