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BankUnited, Inc. Reports 2012 Results, Earnings Exceed $211 Million

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2012.

For the quarter ended December 31, 2012, the Company reported net income of $62.5 million, or $0.61 per diluted common share, as compared to $41.3 million, or $0.41 per diluted share, for the quarter ended December 31, 2011.

For the year ended December 31, 2012, the Company reported net income of $211.3 million, or $2.05 per diluted share, generating a return on average stockholders’ equity of 12.45% and a return on average assets of 1.71%. The Company reported net income of $63.2 million, or $0.62 per diluted share, for the year ended December 31, 2011. Results for 2011 reflected a previously disclosed one-time charge of $110.4 million, recorded in conjunction with the Company’s first quarter 2011 initial public offering (“IPO”), which was not deductible for income tax purposes.

John Kanas, Chairman, President and Chief Executive Officer, said, "Obviously we are pleased with our financial performance this past year. More importantly we are greatly encouraged by the growth of our franchise as we continue to gain market share in south Florida. Our upcoming expansion into New York combined with the anticipated continuation of improvement in the Florida economy underscores our optimism toward the future of BankUnited."

Performance Highlights

  • New loans grew by $449.6 million during the fourth quarter of 2012, an annualized growth rate of 55%. For the year ended December 31, 2012, new loans increased by $2.0 billion to $3.7 billion. For both the fourth quarter and the year ended December 31, 2012, new loan growth outpaced the resolution of covered loans.
  • Deposits totaled $8.5 billion at December 31, 2012 with demand deposits totaling $1.9 billion, or 22% of total deposits. For the year ended December 31, 2012, demand deposits grew by $630.8 million, or 52%.
  • The net interest margin, calculated on a tax-equivalent basis, was 6.70% for the quarter ended December 31, 2012 compared to 6.54% for the quarter ended December 31, 2011 and 6.04% compared to 6.21% for the years ended December 31, 2012 and 2011, respectively. The margin for the fourth quarter of 2012 benefited from the sale of covered loans from a pool of acquired credit impaired (“ACI”) loans that has a zero carrying value, as discussed below.
  • Similar to prior years, the Company sold covered loans in the fourth quarter of 2012. The aggregate price for the 2012 sales was approximately 39.6% of the unpaid principal balances (“UPB”) of loans sold, as compared to an average of 28.1% of UPB for the years 2009, 2010 and 2011. Since the proceeds of the sale of loans from the pool of ACI loans carried at zero are recorded as interest income, the Company’s fourth quarter margin benefited from the better pricing levels of the sale, and was higher than we previously projected.
  • The fourth quarter loan sale also resulted in a loss of $29.3 million on the sale of loans from the remaining pools, with an offsetting gain of $30.8 million on the FDIC indemnification asset.
  • During the fourth quarter, we sold investment securities with a fair value of $526.7 million, utilizing the proceeds to extinguish $520.0 million in Federal Home Loan Bank (“FHLB”) advances and terminate a related cash flow hedge, with a combined cost of borrowing of 3.46%. We realized a pre-tax gain on the sale of securities of $10.0 million and a combined pre-tax loss of $22.9 million on the extinguishment of the advances and termination of the hedge. This transaction is expected to have a positive effect on our net interest margin in 2013.
  • The cost of deposits continues to trend downward. The cost of deposits was 0.73% for the fourth quarter of 2012 as compared to 0.78% for the third quarter of 2012 and 0.99% for the fourth quarter of 2011.
  • We increased our quarterly dividend by 24% to $0.21 per share in the fourth quarter of 2012.
  • Book value and tangible book value per common share grew to $18.45 and $17.71, respectively, at December 31, 2012.
  • We opened three new Florida branches during the fourth quarter of 2012 and anticipate opening three branches in Manhattan in the first quarter of 2013.

Capital

BankUnited, Inc. continues to maintain a robust capital position. The Company and its banking subsidiaries exceed all regulatory guidelines required to be considered well capitalized. The Company’s capital ratios at December 31, 2012 were as follows:

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