BankUnited, Inc. Reports Third Quarter 2013 Results, Continued Loan Growth

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the third quarter of 2013.

For the quarter ended September 30, 2013, the Company reported net income of $54.3 million, or $0.52 per diluted share, as compared to $49.6 million, or $0.48 per diluted share, for the quarter ended September 30, 2012.

For the nine months ended September 30, 2013, the Company reported net income of $156.5 million, or $1.51 per diluted share, generating an annualized return on average stockholders’ equity of 11.27% and an annualized return on average assets of 1.61%. The Company reported net income of $148.8 million, or $1.44 per diluted share, for the nine months ended September 30, 2012.

John Kanas, Chairman, President and Chief Executive Officer, said, "This quarter was marked by compelling growth in both of our primary markets. We are particularly pleased with the increased momentum of our deposit growth."

Performance Highlights
  • New loans grew by $1.1 billion during the third quarter of 2013. For the nine months ended September 30, 2013, new loans increased by $2.5 billion to $6.2 billion.
  • Total deposits increased by $817 million for the quarter ended September 30, 2013 to $9.8 billion, reflecting growth across all deposit categories. For the nine months ended September 30, 2013, total deposits grew by $1.3 billion.
  • The net interest margin, calculated on a tax-equivalent basis, was 5.70% for the quarter ended September 30, 2013.
  • Earnings for the quarter ended September 30, 2013 benefited from a reduction in the effective income tax rate, primarily due to a $3.6 million release of reserves for uncertain tax liabilities.
  • Book value and tangible book value per common share were $18.70 and $18.01, respectively, at September 30, 2013.

Capital

The Company and its banking subsidiary continue to exceed all regulatory guidelines required to be considered well capitalized. The Company’s regulatory capital ratios at September 30, 2013 were as follows:

Tier 1 leverage 13.1%

Tier 1 risk-based capital 24.1%

Total risk-based capital 25.0%

Loans and Leases

Loans, net of premiums, discounts and deferred fees and costs, increased to $7.8 billion at September 30, 2013 from $5.6 billion at December 31, 2012. New loans grew by $2.5 billion to $6.2 billion at September 30, 2013 from $3.7 billion at December 31, 2012. Covered loans declined to $1.6 billion at September 30, 2013 from $1.9 billion at December 31, 2012.

For the quarter ended September 30, 2013, new commercial loans, including commercial loans, commercial real estate loans and leases, grew $762 million to $4.5 billion, reflecting the continued success of lending operations in New York, further expansion of market share in Florida and growth of the lending subsidiaries. New residential loans grew by $270 million to $1.6 billion during the third quarter of 2013, primarily as a result of the continuation of the Company’s residential loan purchase program.

A comparison of portfolio composition at September 30, 2013 and December 31, 2012 follows:
   
New Loans Total Loans
September 30,   December 31, September 30,   December 31,
2013 2012 2013 2012
Single family residential and home equity 25.9% 25.0% 38.0% 45.3%
Commercial real estate 35.0% 31.8% 30.6% 25.6%
Commercial 36.7% 42.3% 29.5% 28.5%
Consumer 2.4% 0.9% 1.9% 0.6%
100.0% 100.0% 100.0% 100.0%
 

The Company’s portfolio of equipment under operating lease grew by $99.7 million for the quarter ended September 30, 2013 to $185.0 million.

Asset Quality

Asset quality remained strong. Credit risk continues to be limited, though to a declining extent, by the Loss Sharing Agreements with the FDIC. At September 30, 2013, covered loans represented 19.9% of the total loan portfolio, as compared to 33.5% at December 31, 2012.

The ratio of non-performing new loans to total new loans was 0.39% at September 30, 2013 and 0.43% at December 31, 2012. The ratio of total non-performing loans to total loans was 0.50% at September 30, 2013 as compared to 0.62% at December 31, 2012. At September 30, 2013, non-performing assets totaled $87.2 million, including $48.5 million of other real estate owned (“OREO”), as compared to $110.6 million, including $76.0 million of OREO, at December 31, 2012. At September 30, 2013, 71% of total non-performing assets were covered assets.

For the quarters ended September 30, 2013 and 2012, the Company recorded provisions for loan losses of $2.6 million and $6.4 million, respectively. Of these amounts, $(2.8) million and $1.0 million, respectively, related to provisions for (recoveries of) covered loans, and $5.4 million and $5.4 million, respectively, related to provisions for new loans.

For the nine months ended September 30, 2013 and 2012, the Company recorded provisions for loan losses of $19.5 million and $17.9 million, respectively. Of these amounts, $(1.0) million and $1.1 million, respectively, related to provisions for (recoveries of) covered loans, and $20.4 million and $16.7 million, respectively, related to provisions for new loans.

The provisions related to new loans reflect growth in the new loan portfolio offset in part by reductions in general loss factors. For the nine months ended September 30, 2013, the provision for new loans was also impacted by specific reserves recognized on impaired loans, particularly related to one commercial relationship.

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

The following tables summarize the activity in the allowance for loan and lease losses for the three and nine months ended September 30, 2013 and 2012 (in thousands):

     
Three Months Ended September 30, 2013 Three Months Ended September 30, 2012
ACI Loans  

Non-ACILoans
  New Loans   Total ACI Loans  

Non-ACILoans
  New Loans   Total
Balance at beginning of period $ 4,304 $ 13,908 $ 40,219 $ 58,431 $ 11,085 $ 9,878 $ 34,672 $ 55,635
Provision (842 ) (1,995 ) 5,441 2,604 (867 ) 1,888 5,353 6,374
Charge-offs (117 ) (1,317 ) (586 ) (2,020 ) (296 ) (1,032 ) (578 ) (1,906 )
Recoveries   -     147     457     604     -     131     182     313  
Balance at end of period $ 3,345   $ 10,743   $ 45,531   $ 59,619   $ 9,922   $ 10,865   $ 39,629   $ 60,416  
 
     
Nine Months Ended September 30, 2013 Nine Months Ended September 30, 2012
ACI Loans  

Non-ACILoans
  New Loans   Total ACI Loans  

Non-ACILoans
  New Loans   Total
Balance at beginning of period $ 8,019 $ 9,874 $ 41,228 $ 59,121 $ 16,332 $ 7,742 $ 24,328 $ 48,402
Provision (2,440 ) 1,452 20,440 19,452 (3,649 ) 4,786 16,729 17,866
Charge-offs (2,234 ) (3,223 ) (16,837 ) (22,294 ) (2,761 ) (3,072 ) (1,694 ) (7,527 )
Recoveries   -     2,640     700     3,340     -     1,409     266     1,675  
Balance at end of period $ 3,345   $ 10,743   $ 45,531   $ 59,619   $ 9,922   $ 10,865   $ 39,629   $ 60,416  
 

Deposits

At September 30, 2013, deposits totaled $9.8 billion compared to $8.5 billion at December 31, 2012. Demand deposits, including non-interest bearing and interest bearing deposits, comprised 23% of total deposits at September 30, 2013. The average cost of deposits was 0.64% for the quarter ended September 30, 2013 as compared to 0.78% for the quarter ended September 30, 2012 and 0.66% for the nine months ended September 30, 2013 as compared to 0.84% for the nine months ended September 30, 2012. The decrease in the average cost of deposits was attributable to both the growth in non-interest bearing deposits as a percentage of average total deposits 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 0.59% and 0.61%, respectively, for the three and nine months ended September 30, 2013.

Net interest income

Net interest income for the quarter ended September 30, 2013 grew to $164.1 million from $139.4 million for the quarter ended September 30, 2012. Net interest income for the nine months ended September 30, 2013 was $482.0 million as compared to $423.0 million for the nine months ended September 30, 2012.

The Company’s net interest margin, calculated on a tax-equivalent basis, was 5.70% for the quarter ended September 30, 2013 as compared to 5.47% for the quarter ended September 30, 2012. Net interest margin, calculated on a tax-equivalent basis, was 5.92% for the nine months ended September 30, 2013 as compared to 5.82% for the nine months ended September 30, 2012. Significant factors impacting the trend in net interest margin for the three and nine months ended September 30, 2013 included:
  • The tax-equivalent yield on loans declined to 8.83% and 9.79%, respectively, for the three and nine months ended September 30, 2013 compared to 10.79% and 11.80% for the corresponding periods in 2012, primarily because new loans, originated at yields lower than those on the covered loan portfolio, comprised a greater percentage of total loans.
  • The yield on new loans decreased to 3.71% and 3.85%, respectively, for the quarter and nine months ended September 30, 2013 from 4.29% and 4.44% for the quarter and nine months ended September 30, 2012, primarily reflecting lower market interest rates.
  • The yield on covered loans increased to 26.91% and 25.93%, respectively, for the quarter and nine months ended September 30, 2013 from 20.07% and 20.02% for the quarter and nine months ended September 30, 2012. The increase in the yield on covered loans was impacted by (i) improvements in expected cash flows and (ii) the inclusion in interest income for the quarter and nine months ended September 30, 2013 of proceeds of $13.2 million and $39.0 million, respectively, from the sale of ACI residential loans from a pool with a carrying value of zero.
  • Loans, which are higher yielding than other types of interest earning assets, comprised a higher percentage of average interest earning assets for the three and nine months ended September 30, 2013 as compared to the corresponding periods in 2012.
  • The average rate on interest bearing liabilities declined to 0.93% and 0.96%, respectively, for the quarter and nine months ended September 30, 2013 from 1.31% and 1.38% for the corresponding periods in 2012, primarily due to declining market interest rates.

As anticipated, the net interest margin for the quarter ended September 30, 2013 declined by 0.44% in comparison to the immediately preceding quarter, largely due to a decline in the average yield on loans. This decline resulted primarily from continued growth of new loans as a percentage of the total loan portfolio. The cost of interest bearing liabilities remained relatively stable quarter over quarter.

The Company’s net interest margin has been 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 carrying value of the loans. As the Company’s expected cash flows from ACI loans have increased since the FSB Acquisition (as defined below), the Company has reclassified amounts from non-accretable difference to accretable yield.

Changes in accretable yield on ACI loans for the nine months ended September 30, 2013 and the year ended December 31, 2012 were as follows (in thousands):
             
Balance, December 31, 2011 $ 1,523,615
  Reclassification from non-accretable difference 206,934
Accretion   (444,483 )
Balance, December 31, 2012 1,286,066
Reclassification from non-accretable difference 231,070
Accretion   (313,326 )
Balance, September 30, 2013 $ 1,203,810  
 

Non-interest income

Non-interest income totaled $1.3 million and $25.2 million for the quarter and nine months ended September 30, 2013 as compared to $25.7 million and $83.7 million for the quarter and nine months ended September 30, 2012.

As anticipated, in 2013, the Company began amortizing the FDIC indemnification asset. In prior periods, we recorded accretion of discount on the FDIC indemnification asset. Non-interest income included amortization of the FDIC indemnification asset of $(12.4) million and $(21.8) million, respectively, for the quarter and nine months ended September 30, 2013 compared to accretion of $3.4 million and $14.5 million, respectively, for the quarter and nine months ended September 30, 2012. As the expected cash flows from ACI loans have increased as discussed above, expected cash flows from the FDIC indemnification asset have decreased.

Income from resolution of covered assets, net was $24.6 million and $64.4 million, respectively, for the quarter and nine months ended September 30, 2013 compared to $17.5 million and $39.6 million for the quarter and nine months ended September 30, 2012. This increase in income resulted mainly from higher income from commercial recoveries and lower losses from residential foreclosure resolutions.

Net loss on indemnification asset was $(18.4) million and $(47.7) million, respectively, for the quarter and nine months ended September 30, 2013, compared to $(14.2) million and $(26.6) million for the quarter and nine months ended September 30, 2012. This line item represents the mitigating impact of FDIC indemnification on gains and losses arising from certain transactions related to the covered assets. Significant factors impacting these variances included increased income from resolution of covered assets, net, fluctuations in the provision for (recovery of) losses on covered loans, the loss on sale of covered loans, reduced OREO impairment and more favorable results from the sale of OREO.

Loss on the sale of covered loans was $4.3 million and $9.4 million for the quarter and nine months ended September 30, 2013. No covered loans were sold during the quarter and nine months ended September 30, 2012.

Gains on investment securities available for sale for the quarter and nine months ended September 30, 2013 related primarily to sales of securities to fund loan originations. Securities gains for the nine months ended September 30, 2013 also included gains of $1.6 million from the sale of securities in conjunction with the merger of Herald National Bank (“Herald”) into BankUnited. The quarter and nine months ended September 30, 2012 included approximately $6.0 million of aggregate realized gains from the liquidation of our position in non-investment grade and certain other preferred stock positions in order to reduce our concentration in bank preferred stock investments.

Declines in FDIC reimbursement of costs of resolution of covered assets and mortgage insurance income reflect the lower volume of covered loan foreclosure resolution activity.

Non-interest expense

Non-interest expense totaled $84.3 million and $243.1 million, respectively, for the quarter and nine months ended September 30, 2013 as compared to $77.2 million and $244.4 million for the quarter and nine months ended September 30, 2012.

Employee compensation and benefits for the nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012 reflected a decrease of $10.2 million in equity-based compensation resulting primarily from the vesting in 2012 of instruments issued in conjunction with the Company’s initial public offering of common stock in 2011. Increased compensation costs related to the Company’s growth and expansion into New York largely offset this decrease in equity-based compensation and drove an increase in employee compensation and benefits of $2.1 million for the three months ended September 30, 2013 as compared to the three months ended September 30, 2012.

Occupancy and equipment expense increased to $16.6 million and $47.0 million, respectively, for the quarter and nine months ended September 30, 2013 from $13.7 million and $38.8 million for the quarter and nine months ended September 30, 2012 due primarily to our expansion into New York and the growth and refurbishment of our branch network in Florida.

For the quarter and nine months ended September 30, 2013, the aggregate of foreclosure and OREO expense was $2.8 million and $7.4 million, respectively, as compared to $4.8 million and $14.9 million for the quarter and nine months ended September 30, 2012. For the quarter and nine months ended September 30, 2013, the net amount of gain on sale of OREO and impairment of OREO was $(1.7) million and $(7.1) million, respectively, as compared to (gain) loss of $(25) thousand and $6.5 million for the quarter and nine months ended September 30, 2012. These changes reflect continuing trends of lower levels of OREO and foreclosure activity and an improving real estate market.

Provision for income taxes

The effective income tax rate decreased to 30.9% and 36.0%, for the three and nine months ended September 30, 2013 from 39.2% for both the three and nine months ended September 30, 2012. The decrease reflects the release in the third quarter of 2013 of $3.6 million in reserves for uncertain state income tax positions as a result of the lapse in the statute of limitations related thereto.

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, 2013 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 (888) 713-4217 (domestic) or (617) 213-4869 (international). The name of the call is BankUnited, Inc. and the confirmation number for the call is 20145461. Participants may pre-register for the call on the Investor Relations page on  www.bankunited.com. A replay of the call will be available from 1:00 p.m. ET on Oct. 22 through 11:59 p.m. ET on Oct. 29 by calling (888) 286-8010 (domestic) or (617) 801-6888 (international). The pass code for the replay is 64245043. 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. is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with $14.1 billion of assets, 98 banking centers in 15 Florida counties and 5 banking centers in the New York metropolitan area at September 30, 2013.

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. 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 $4.3 billion. The Company has received $2.5 billion from the FDIC in reimbursements under the Loss Sharing Agreements for claims filed for incurred losses as of September 30, 2013.

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, 2012 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)
       
 
 
September 30, December 31,
2013 2012
ASSETS
 
Cash and due from banks:
Non-interest bearing $ 42,360 $ 61,088
Interest bearing 16,854 21,507
Interest bearing deposits at Federal Reserve Bank 463,311 408,827
Federal funds sold   3,154     3,931  
Cash and cash equivalents 525,679 495,353
Investment securities available for sale, at fair value
(including covered securities of $206,666 and $226,505) 3,871,948 4,172,412
Non-marketable equity securities 149,816 133,060
Loans held for sale 844 2,129
Loans (including covered loans of $1,550,974 and $1,864,375) 7,806,563 5,571,739
Allowance for loan and lease losses   (59,619 )   (59,121 )
Loans, net 7,746,944 5,512,618
FDIC indemnification asset 1,265,037 1,457,570
Bank owned life insurance 206,296 207,069
Other real estate owned (including covered OREO of $47,546 and $76,022) 48,510 76,022
Deferred tax asset, net 79,954 62,274
Goodwill and other intangible assets 69,240 69,768
Other assets   343,746     187,678  
Total assets $ 14,308,014   $ 12,375,953  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Liabilities:
Demand deposits:
Non-interest bearing $ 1,680,004 $ 1,312,779
Interest bearing 632,159 542,561
Savings and money market 4,429,034 4,042,022
Time   3,106,906     2,640,711  
Total deposits 9,848,103 8,538,073
Short-term borrowings 6,015 8,175
Federal Home Loan Bank advances and other borrowings 2,363,745 1,916,919
Other liabilities   204,337     106,106  
Total liabilities   12,422,200     10,569,273  
 
Commitments and contingencies
 
Stockholders' equity:

Common stock, par value $0.01 per share, 400,000,000 sharesauthorized; 100,860,270 and 95,006,729 shares issued andoutstanding
1,009 950

Preferred stock, par value $0.01 per share, 100,000,000 sharesauthorized; 5,415,794 shares of Series A issued andoutstanding at December 31, 2012
- 54
Paid-in capital 1,327,164 1,308,315
Retained earnings 504,702 413,385
Accumulated other comprehensive income   52,939     83,976  
Total stockholders' equity   1,885,814     1,806,680  
Total liabilities and stockholders' equity $ 14,308,014   $ 12,375,953  
 
 
BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
           
 
 
Three Months Ended September 30, Nine Months Ended September 30,
2013 2012 2013 2012
 
Interest income:
Loans $ 158,332 $ 137,039 $ 458,183 $ 415,957
Investment securities available for sale 27,993 32,149 88,194 99,247
Other   1,359     1,117     3,780     3,306  
Total interest income   187,684     170,305     550,157     518,510  
Interest expense:
Deposits 15,248 16,459 44,287 50,466
Borrowings   8,318     14,429     23,915     45,021  
Total interest expense   23,566     30,888     68,202     95,487  
Net interest income before provision for (recovery of) loan losses 164,118 139,417 481,955 423,023

Provision for (recovery of) loan losses(including $(2,837), $1,021, $(988) and $1,137for covered loans)
  2,604     6,374     19,452     17,866  
Net interest income after provision for (recovery of) loan losses   161,514     133,043     462,503     405,157  
Non-interest income:
(Amortization) accretion of FDIC indemnification asset (12,354 ) 3,432 (21,784 ) 14,513
Income from resolution of covered assets, net 24,592 17,517 64,362 39,602
Net loss on indemnification asset (18,377 ) (14,199 ) (47,747 ) (26,602 )
FDIC reimbursement of costs of resolution of covered assets 2,040 3,566 7,165 13,415
Service charges and fees 3,634 3,095 10,355 9,440

Gain (loss) on sale of loans, net (includingloss related to covered loans of $(4,286) and$(9,368) for the three and nine months endedSeptember 30, 2013)
(4,081 ) 189 (8,782 ) 698

Gain on investment securities available forsale, net (including loss related to coveredsecurities of $(963) for the nine months endedSeptember 30, 2013)
1,066 6,035 6,288 6,931
Mortgage insurance income 310 2,571 1,212 8,910
Other non-interest income   4,476     3,478     14,160     16,841  
Total non-interest income   1,306     25,684     25,229     83,748  
Non-interest expense:
Employee compensation and benefits 44,117 41,968 130,219 132,544
Occupancy and equipment 16,571 13,725 46,994 38,776
Impairment (recovery) of other real estate owned (243 ) 1,385 1,456 7,980
Gain on sale of other real estate owned (1,454 ) (1,410 ) (8,576 ) (1,499 )
Other real estate owned expense 533 1,756 2,663 5,193
Foreclosure expense 2,270 3,060 4,769 9,671
Deposit insurance expense 1,926 2,040 5,587 5,136
Professional fees 4,831 3,850 17,212 11,452
Telecommunications and data processing 2,842 3,379 9,694 9,730
Other non-interest expense   12,870     7,469     33,101     25,388  
Total non-interest expense   84,263     77,222     243,119     244,371  
Income before income taxes 78,557 81,505 244,613 244,534
Provision for income taxes   24,248     31,948     88,070     95,776  
Net income 54,309 49,557 156,543 148,758
Preferred stock dividends   -     921     -     2,762  
Net income available to common stockholders $ 54,309   $ 48,636   $ 156,543   $ 145,996  
Earnings per common share, basic $ 0.52   $ 0.48   $ 1.52   $ 1.45  
Earnings per common share, diluted $ 0.52   $ 0.48   $ 1.51   $ 1.44  
Cash dividends declared per common share $ 0.21   $ 0.17   $ 0.63   $ 0.51  
 
 
BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
                 
 
Three Months Ended September 30,
2013 2012
Average Yield/ Average Yield/
Balance Interest (1) Rate (2) Balance Interest (1) Rate (2)
Assets:
Interest earning assets:
Loans $ 7,234,822 $ 160,257 8.83 % $ 5,117,295 $ 138,252 10.79 %
Investment securities available for sale 4,030,197 28,670 2.85 % 4,658,274 33,082 2.84 %
Other interest earning assets   416,185     1,359   1.30 %   559,889     1,117   0.80 %
Total interest earning assets 11,681,204 190,286 6.50 % 10,335,458 172,451 6.66 %
Allowance for loan and lease losses (61,792 ) (56,392 )
Non-interest earning assets   2,009,626     2,372,698  
Total assets $ 13,629,038   $ 12,651,764  
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits $ 571,884 636 0.44 % $ 505,657 824 0.65 %
Savings and money market deposits 4,342,628 5,191 0.47 % 3,989,263 5,867 0.59 %
Time deposits   2,927,537     9,421   1.28 %   2,661,285     9,768   1.46 %
Total interest bearing deposits 7,842,049 15,248 0.77 % 7,156,205 16,459 0.91 %
Borrowings:
FHLB advances and other borrowings 2,198,613 8,316 1.50 % 2,225,235 14,420 2.58 %
Short-term borrowings   1,118     2   0.50 %   7,952     9   0.43 %
Total interest bearing liabilities 10,041,780   23,566 0.93 % 9,389,392   30,888 1.31 %
Non-interest bearing demand deposits 1,568,407 1,199,577
Other non-interest bearing liabilities   144,231     335,193  
Total liabilities 11,754,418 10,924,162
Stockholders' equity   1,874,620     1,727,602  
Total liabilities and stockholders' equity $ 13,629,038   $ 12,651,764  
Net interest income $ 166,720 $ 141,563
Interest rate spread   5.57 %   5.35 %
Net interest margin   5.70 %   5.47 %
 
(1) On a tax-equivalent basis where applicable
(2) Annualized
 
 
BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
                 
 
Nine Months Ended September 30,
2013 2012
Average Yield/ Average Yield/
Balance Interest (1) Rate (2) Balance Interest (1) Rate (2)
Assets:
Interest earning assets:
Loans $ 6,311,252 $ 463,144 9.79 % $ 4,736,869 $ 418,835 11.80 %
Investment securities available for sale 4,245,236 90,327 2.84 % 4,582,143 103,129 3.00 %
Other interest earning assets   471,625     3,780   1.07 %   535,912     3,306   0.82 %
Total interest earning assets 11,028,113 557,251 6.74 % 9,854,924 525,270 7.11 %
Allowance for loan and lease losses (62,272 ) (54,540 )
Non-interest earning assets   2,060,332     2,408,962  
Total assets $ 13,026,173   $ 12,209,346  
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits $ 562,299 1,945 0.46 % $ 494,331 2,406 0.65 %
Savings and money market deposits 4,208,333 15,175 0.48 % 3,870,050 18,790 0.65 %
Time deposits   2,734,198     27,167   1.33 %   2,621,599     29,270   1.49 %
Total interest bearing deposits 7,504,830 44,287 0.79 % 6,985,980 50,466 0.96 %
Borrowings:
FHLB advances and other borrowings 2,026,828 23,896 1.58 % 2,229,674 44,976 2.69 %
Short-term borrowings   5,977     19   0.43 %   14,777     45   0.41 %
Total interest bearing liabilities 9,537,635   68,202 0.96 % 9,230,431   95,487 1.38 %
Non-interest bearing demand deposits 1,458,849 1,040,153
Other non-interest bearing liabilities   172,342     276,857  
Total liabilities 11,168,826 10,547,441
Stockholders' equity   1,857,347     1,661,905  
Total liabilities and stockholders' equity $ 13,026,173   $ 12,209,346  
Net interest income $ 489,049 $ 429,783
Interest rate spread   5.78 %   5.73 %
Net interest margin   5.92 %   5.82 %
 
(1) On a tax-equivalent basis where applicable
(2) Annualized
 
 
BANKUNITED, INC. AND SUBSIDIARIES
EARNINGS PER COMMON SHARE
(In thousands except share amounts)
         
 
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
Basic earnings per common share:
Numerator:
Net income $ 54,309 $ 49,557 $ 156,543 $ 148,758
Preferred stock dividends   -     (921 )   -     (2,762 )
Net income available to common stockholders 54,309 48,636 156,543 145,996
Distributed and undistributed earnings allocated to participating securities   (2,132 )   (3,536 )   (7,427 )   (10,505 )
Income allocated to common stockholders for basic earnings per common share $ 52,177 $ 45,100 $ 149,116 $ 135,491
Denominator:
Weighted average common shares outstanding 100,737,319 94,196,429 99,131,377 94,856,763
Less average unvested stock awards   (1,085,044 )   (746,934 )   (1,118,496 )   (1,184,068 )
Weighted average shares for basic earnings per common share   99,652,275     93,449,495     98,012,881     93,672,695  
Basic earnings per common share $ 0.52   $ 0.48   $ 1.52   $ 1.45  
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share $ 52,177 $ 45,100 $ 149,116 $ 135,491
Adjustment for earnings reallocated from participating securities   4     2,615     1,264     15  
Income used in calculating diluted earnings per common share $ 52,181 $ 47,715 $ 150,380 $ 135,506
Denominator:
Average shares for basic earnings per common share 99,652,275 93,449,495 98,012,881 93,672,695
Dilutive effect of stock options and preferred shares   196,190     5,613,427     1,626,264     187,582  
Weighted average shares for diluted earnings per common share   99,848,465     99,062,922     99,639,145     93,860,277  
Diluted earnings per common share $ 0.52   $ 0.48   $ 1.51   $ 1.44  
 
 
BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
       
 
 
 
 

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,
Financial ratios 2013 (4) 2012 (4) 2013 (4) 2012 (4)
Return on average assets 1.58 % 1.56 % 1.61 % 1.63 %
Return on average stockholders' equity 11.49 % 11.41 % 11.27 % 11.96 %
Net interest margin (5) 5.70 % 5.47 % 5.92 % 5.82 %
 
September 30, December 31,
Capital ratios 2013   2012  
Tier 1 leverage 13.11 % 13.16 %
Tier 1 risk-based capital 24.10 % 33.60 %
Total risk-based capital 24.97 % 34.88 %
 
September 30, 2013 December 31, 2012
Asset quality ratios Non-Covered Total Non-Covered Total
Non-performing loans to total loans (1) (3) 0.39 % 0.50 % 0.43 % 0.62 %
Non-performing assets to total assets (2) 0.18 % 0.61 % 0.13 % 0.89 %
Allowance for loan and lease losses to total loans (3) 0.73 % 0.76 % 1.11 % 1.06 %
Allowance for loan and lease losses to non-performing loans (1) 186.06 % 153.98 % 256.65 % 171.21 %
Net charge-offs to average loans (4) 0.47 % 0.40 % 0.09 % 0.17 %
 
 
(1) We define non-performing loans to include nonaccrual loans, loans, other than ACI loans, that are past due 90 days or more and still accruing and certain loans modified in troubled debt restructurings. 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 and other real estate owned.
 
(3) Total loans is net of unearned discounts, premiums and deferred fees and costs.
 
(4) Annualized.
 
(5) On a tax-equivalent basis.
 

Copyright Business Wire 2010

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