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

The ratio of non-performing new loans to total new loans was 0.43% at December 31, 2012 and 0.17% at December 31, 2011. The ratio of total non-performing loans to total loans was 0.62% at December 31, 2012 as compared to 0.70% at December 31, 2011. At December 31, 2012, non-performing assets totaled $110.6 million, including $76.0 million of other real estate owned (“OREO”), as compared to $152.6 million, including $123.7 million of OREO, at December 31, 2011. At December 31, 2012, 85.47% of total non-performing assets, including all OREO, were covered assets.

For the quarters ended December 31, 2012 and 2011, the Company recorded provisions for (recoveries of) loan losses of $1.0 million and $4.0 million, respectively. Of these amounts, $(1.6) million and $(4.9) million, respectively, related to covered loans and $2.7 million and $8.9 million, respectively, related to new loans.

For the years ended December 31, 2012 and 2011, the Company recorded provisions for (recoveries of) loan losses of $18.9 million and $13.8 million, respectively. Of these amounts, $(0.5) million and $(7.7) million, respectively, related to covered loans, and $19.4 million and $21.5 million, respectively, related to new loans. The decrease in the provision related to new loans resulted primarily from a reduction in loss factors applied to the commercial portfolio.

The provisions (recoveries) related to covered loans were significantly mitigated by increases (decreases) in non-interest income recorded in “Net gain (loss) on indemnification asset.”

The following table summarizes the activity in the allowance for loan and lease losses for the quarters and years ended December 31, 2012 and 2011 (in thousands):

    Three Months Ended December 31, 2012   Three Months Ended December 31, 2011
ACI Loans  

Non-ACI Loans

  New Loans   Total ACI Loans  

Non-ACI Loans

  New Loans   Total
Balance at beginning of period $ 9,922 $ 10,865 $ 39,629 $ 60,416 $ 22,132 $ 14,933 $ 17,993 $ 55,058
Provision (698) (942) 2,670 1,030 (3,015) (1,872) 8,899 4,012
Charge-offs (1,205) (519) (1,235) (2,959) (2,785) (5,444) (2,573) (10,802)
Recoveries   -   470   164   634   -   125   9   134
Balance at end of period $ 8,019 $ 9,874 $ 41,228 $ 59,121 $ 16,332 $ 7,742 $ 24,328 $ 48,402
    Year Ended December 31, 2012   Year Ended December 31, 2011
ACI Loans  

Non-ACI Loans

  New Loans   Total ACI Loans  

Non-ACI Loans

  New Loans   Total
Balance at beginning of period $ 16,332 $ 7,742 $ 24,328 $ 48,402 $ 39,925 $ 12,284 $ 6,151 $ 58,360
Provision (4,347) 3,844 19,399 18,896 (11,278) 3,586 21,520 13,828
Charge-offs (3,966) (3,591) (2,929) (10,486) (13,527) (8,489) (3,367) (25,383)
Recoveries   -   1,879   430   2,309   1,212     361   24   1,597
Balance at end of period $ 8,019 $ 9,874 $ 41,228 $ 59,121 $ 16,332   $ 7,742 $ 24,328 $ 48,402

Deposits

At December 31, 2012, deposits totaled $8.5 billion compared to $7.4 billion at December 31, 2011. Demand deposits, including non-interest bearing and interest bearing deposits, grew $630.8 million to $1.9 billion or 22% of total deposits at December 31, 2012 from $1.2 billion or 17% of total deposits at December 31, 2011. This growth was concentrated in commercial and small business accounts. The average cost of deposits was 0.73% for the quarter ended December 31, 2012 as compared to 0.99% for the quarter ended December 31, 2011 and 0.81% for the year ended December 31, 2012 as compared to 1.09% for the year ended December 31, 2011. The decrease in the average cost of deposits was primarily attributable to the continued growth in lower cost deposit products and a decline in market rates of interest. Excluding the impact of hedge accounting and accretion of fair value adjustments, the average cost of deposits was 0.68% and 0.76% for the quarter and year ended December 31, 2012.

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