BankUnited, Inc. Reports Third Quarter 2024 Results

BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended September 30, 2024.

"We're happy with third quarter results as our balance sheet transformation story continues. Margin expanded again this quarter and credit remains well managed. Looking forward, we are optimistic about the environment, our markets and opportunities to grow core customer relationships. Our thoughts are with those who were impacted by the recent storms and we are here to support our employees, clients and communities," said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended September 30, 2024, the Company reported net income of $61.5 million, or $0.81 per diluted share, compared to $53.7 million, or $0.72 per diluted share, for the immediately preceding quarter ended June 30, 2024 and $47.0 million, or $0.63 per diluted share, for the quarter ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported net income of $163.2 million, or $2.17 per diluted share compared to $157.9 million, or $2.11 per diluted share for the nine months ended September 30, 2023.

Quarterly Highlights

To date, we have made notable progress executing near-term strategic priorities focused on improving core profitability.

The net interest margin, calculated on a tax-equivalent basis, expanded by 0.06%, to 2.78% for the quarter ended September 30, 2024 from 2.72% for the immediately preceding quarter. The net interest margin was 2.56% for the quarter ended September 30, 2023. For the nine months ended September 30, 2024 the net interest margin improved to 2.69% from 2.55% for the nine months ended September 30, 2023.
The average cost of total deposits declined by 0.03% to 3.06% for the quarter ended September 30, 2024 from 3.09% for the immediately preceding quarter ended June 30, 2024. The spot APY of total deposits declined to 2.93% at September 30, 2024 from 3.09% at June 30, 2024. The average cost of interest bearing deposits declined by 0.06% to 4.20% for the quarter ended September 30, 2024 from 4.26% for the immediately preceding quarter ended June 30, 2024 while the spot APY of interest bearing deposits declined to 4.01% at September 30, 2024 from 4.29% at June 30, 2024.
The Company's funding profile has improved significantly over the course of 2024. For the nine months ended September 30, 2024, wholesale funding, including FHLB advances and brokered deposits, declined by $1.9 billion while non-brokered deposits grew by $1.7 billion, including an increase of $800 million in non-interest bearing demand deposits ("NIDDA").
Average NIDDA remained relatively stable, declining by $64 million for the quarter, consistent with the prior quarter at 27% of average total deposits. Total deposits grew by $93 million for the quarter ended September 30, 2024. In part due to expected seasonal trends, for the quarter ended September 30, 2024, NIDDA declined by $430 million, and represented 27% of total deposits at September 30, 2024.
FHLB advances increased by $295 million for the quarter ended September 30, 2024; this increase was related to intraday cash management and transactional deposit flows on the last day of the quarter and is also reflected in temporarily elevated cash balances. Brokered deposits grew by $303 million for the quarter; we took advantage of favorable pricing in the brokered deposit market during a period of market dislocation.
For the nine months ended September 30, 2024, our core CRE and C&I loan portfolios grew by $286 million while residential loans declined by $422 million and franchise, equipment and municipal finance declined by a combined $238 million.
Total loans declined by $230 million for the quarter ended September 30, 2024. The commercial real estate segment grew by $34 million while the C&I segment declined by $112 million. Mortgage warehouse grew by $33 million. Consistent with our balance sheet strategy, the residential, franchise, equipment and municipal finance portfolios declined by a combined $185 million.
The loan to deposit ratio declined to 87.6% at September 30, 2024, from 88.7% at June 30, 2024 and 92.8% at December 31, 2023.
Net charge-offs remained low and were $6.5 million for the quarter. The annualized net charge-off ratio for the nine months ended September 30, 2024 was 0.12%. The NPA ratio at September 30, 2024 was 0.64%, including 0.10% related to the guaranteed portion of non-accrual SBA loans, compared to 0.50%, including 0.11% related to the guaranteed portion of non-accrual SBA loans at June 30, 2024. The quarter-over-quarter increase was primarily related to two C&I loans.
The ratio of the ACL to total loans increased to 0.94% at September 30, 2024; the ratio of the ACL to non-performing loans was 101.68%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.41% at September 30, 2024 and the ACL to loans ratio for CRE office loans was 2.20%.
Our commercial real estate exposure is modest, totaling 25% of loans and 164% of the Bank's total risk based capital at September 30, 2024. By comparison, based on call report data as of June 30, 2024 (the most recent date available) for banks with between $10 billion and $100 billion in assets, the median level of CRE to total loans was 35% and the median level of CRE to total risk based capital was 220%.
At September 30, 2024, the weighted average LTV of the CRE portfolio was 55.3%, the weighted average DSCR was 1.77, 56% of the portfolio was collateralized by properties located in Florida and 25% was collateralized by properties located in the New York tri-state area. For the office sub-segment, the weighted average LTV was 65.4%, the weighted average DSCR was 1.56, 57% was collateralized by properties in Florida, substantially all of which was suburban, and 23% was collateralized by properties located in the New York tri-state area.
Liquidity remains ample. Total same day available liquidity was $15.0 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 147% and an estimated 63% of our deposits were insured or collateralized at September 30, 2024.
Our capital position is robust. At September 30, 2024, CET1 was 11.8% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.9% at September 30, 2024. The ratio of tangible common equity to tangible assets increased to 7.6% at September 30, 2024.
The net unrealized pre-tax loss on the available for sale ("AFS") securities portfolio continued to improve, declining by $125 million, to 4% of amortized cost, for the quarter ended September 30, 2024. The duration of our AFS securities portfolio remained short, at 1.73 as of September 30, 2024. Held to maturity securities were not significant.
Book value and tangible book value per common share continued to grow, to $37.56 and $36.52, respectively, at September 30, 2024, compared to $36.11 and $35.07, respectively, at June 30, 2024, and $34.66 and $33.62, respectively at December 31, 2023.
Beth Hosen, an industry veteran and proven leader, joined BankUnited in September as executive vice president and head of treasury management, overseeing treasury management sales, service and product as well as the commercial card business.

Hurricane Helene made landfall along Florida's "Big Bend" coast in September, 2024, ultimately impacting parts of the Southeastern United States. The impact of Hurricane Helene on BankUnited's operations was not significant, and is not expected to be significant to our financial condition or results of operations. Hurricane Milton made landfall near Siesta Key, Florida in October, bringing heavy rain, hurricane or tropical storm force winds, storm surge and power outages to portions of the Florida peninsula. All of our branches and office locations have re-opened for business, and damage from the storm was negligible. There were no significant impacts to banking operations. We are still in the process of finalizing our assessment of the potential impact of Hurricane Milton on our customers and credit portfolio.

Loans

Loan portfolio composition at the dates indicated follows (dollars in thousands):

September 30, 2024

June 30, 2024

December 31, 2023

Core C&I and CRE sub-segments:

Non-owner occupied commercial real estate

5,488,884

22.5

5,367,663

21.8

5,323,241

21.6

Construction and land

497,928

2.0

584,833

2.4

495,992

2.0

Owner occupied commercial real estate

1,999,515

8.2

1,966,809

8.0

1,935,743

7.9

Commercial and industrial

7,026,412

28.9

7,170,622

29.1

6,971,981

28.3

15,012,739

61.6

15,089,927

61.3

14,726,957

59.8

Franchise and equipment finance

277,704

1.1

307,442

1.2

380,347

1.5

Pinnacle - municipal finance

749,035

3.1

847,234

3.4

884,690

3.6

Mortgage warehouse lending ("MWL")

571,783

2.3

539,159

2.2

432,663

1.8

Residential

7,787,442

31.9

7,844,722

31.9

8,209,027

33.3

24,398,703

100.0

24,628,484

100.0

24,633,684

100.0

For the quarter ended September 30, 2024, total loans declined by $230 million. The CRE portfolio grew by $34 million and MWL grew by $33 million while the C&I portfolio declined by $112 million. Consistent with our balance sheet strategy, the franchise, equipment, and municipal finance portfolios declined by an aggregate $128 million and residential loans declined by $57 million. The decline in C&I for the quarter was impacted by the timing of some unanticipated payoffs and strategic exits.

Asset Quality and the ACL

The following table presents information about the ACL at the dates indicated as well as net charge-off rates for the periods ended September 30, 2024, June 30, 2024 and December 31, 2023 (dollars in thousands):

ACL

ACL to Total Loans

Commercial ACL to Commercial Loans(2)

ACL to Non-Performing Loans

Net Charge-offs to Average Loans (1)

December 31, 2023

202,689

0.82

1.29

159.54

0.09

June 30, 2024

225,698

0.92

1.42

130.12

0.12

September 30, 2024

228,249

0.94

1.41

101.68

0.12

_________________________

(1)

Annualized for the six months ended June 30, 2024 and the nine months ended September 30, 2024.

(2)

For purposes of this ratio, commercial loans includes the core C&I and CRE sub-segments as presented in the table above as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio.

The ACL at September 30, 2024 represents management's estimate of lifetime expected credit losses given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended September 30, 2024, the provision for credit losses, including both funded and unfunded loan commitments, was $9.2 million, compared to $19.5 million for the immediately preceding quarter ended June 30, 2024. For the quarter ended September 30, 2024, an increase in qualitative overlays, changes in portfolio characteristics, and updates to certain assumptions had the effect of increasing the ACL, while the impact of improvements in the economic forecast partially offset that increase.

The following table summarizes the activity in the ACL for the periods indicated (in thousands):

Three Months Ended

Nine Months Ended

September 30, 2024

June 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Beginning balance

225,698

217,556

166,833

202,689

147,946

Impact of adoption of new accounting pronouncement (ASU 2022-02)

N/A

(1,794

)

Balance after impact of adoption of ASU 2022-02

225,698

217,556

166,833

202,689

146,152

Provision

9,091

21,823

30,877

46,719

62,667

Net charge-offs

(6,540

)

(13,681

)

(1,647

)

(21,159

)

(12,756

)

Ending balance

228,249

225,698

196,063

228,249

196,063

The following table presents criticized and classified commercial loans at the dates indicated (in thousands):

September 30, 2024

June 30, 2024

December 31, 2023

CRE

Total Commercial

CRE

Total Commercial

CRE

Total Commercial

Special mention

145,338

323,326

138,403

265,940

97,552

319,905

Substandard - accruing

587,097

932,746

597,888

946,832

390,724

711,266

Substandard - non-accruing

70,860

186,565

54,088

131,193

13,727

86,903

Doubtful

—

16,265

8,301

25,258

—

19,035

Total

803,295

1,458,902

798,680

1,369,223

502,003

1,137,109

Total criticized and classified commercial loans increased by $90 million for the quarter ended September 30, 2024. The increase in the substandard non-accruing category for the quarter ended September 30, 2024 was primarily related to two C&I loans.

Non-performing loans totaled $224.5 million or 0.92% of total loans at September 30, 2024, compared to $173.5 million or 0.70% of total loans at June 30, 2024. Non-performing loans included $35.1 million and $39.0 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.14% and 0.16% of total loans at September 30, 2024 and June 30, 2024, respectively.

Net Interest Income

Net interest income for the quarter ended September 30, 2024 was $234.1 million, compared to $226.0 million for the immediately preceding quarter ended June 30, 2024, an increase of 4%. Interest income increased by $9.1 million for the quarter ended September 30, 2024, compared to the immediately preceding quarter, while interest expense increased by $1.0 million.

The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.06% to 2.78% for the quarter ended September 30, 2024, from 2.72% for the immediately preceding quarter ended June 30, 2024.

The average cost of total deposits declined to 3.06% from 3.09% for the quarter ended June 30, 2024 and the average cost of interest bearing liabilities declined to 4.24% from 4.28% for the quarter ended June 30, 2024. The yield on average interest earning assets increased to 5.79% for the quarter ended September 30, 2024 from 5.77% for the prior quarter.

Non-interest expense

Non-interest expense increased by $6.9 million for the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024. A $6.2 million increase in compensation and benefits for the quarter ended September 30, 2024 resulted primarily from an increase in the Company's stock price, impacting the value of liability-classified share based compensation awards and increases in certain other variable compensation accruals.

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, 2024 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. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BIb2316bdeec79467e835d086e37e8b472. For those unable to join the live event, an archived webcast will be available on the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast.

About BankUnited, Inc.

BankUnited, Inc., with total assets of $35.8 billion at September 30, 2024, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, the New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused on the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com.

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 limitation) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as but not limited to adverse events or conditions impacting the financial services industry. 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, 2023, 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).

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)

September 30, 2024

June 30, 2024

December 31, 2023

ASSETS

Cash and due from banks:

Non-interest bearing

14,746

12,631

14,945

Interest bearing

875,122

420,821

573,338

Cash and cash equivalents

889,868

433,452

588,283

Investment securities (including securities reported at fair value of $9,109,860, $8,936,449 and $8,867,354)

9,119,860

8,946,449

8,877,354

Non-marketable equity securities

237,172

223,159

310,084

Loans

24,398,703

24,628,484

24,633,684

Allowance for credit losses

(228,249

)

(225,698

)

(202,689

)

Loans, net

24,170,454

24,402,786

24,430,995

Bank owned life insurance

306,313

297,827

318,459

Operating lease equipment, net

241,625

266,815

371,909

Goodwill

77,637

Other assets

741,816

779,781

786,886

Total assets

35,784,745

35,427,906

35,761,607

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Demand deposits:

Non-interest bearing

7,635,427

8,065,209

6,835,236

Interest bearing

5,171,865

3,771,793

3,403,539

Savings and money market

10,324,697

11,463,211

11,135,708

Time

4,724,236

4,463,394

5,163,995

Total deposits

27,856,225

27,763,607

26,538,478

FHLB advances

3,580,000

3,285,000

5,115,000

Notes and other borrowings

708,694

708,835

708,973

Other liabilities

832,022

971,116

821,235

Total liabilities

32,976,941

32,728,558

33,183,686

Commitments and contingencies

Stockholders' equity:

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,749,012, 74,758,609 and 74,372,505 shares issued and outstanding

747

748

744

Paid-in capital

296,107

290,719

283,642

Retained earnings

2,749,314

2,709,503

2,650,956

Accumulated other comprehensive loss

(238,364

)

(301,622

)

(357,421

)

Total stockholders' equity

2,807,804

2,699,348

2,577,921

Total liabilities and stockholders' equity

35,784,745

35,427,906

35,761,607

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30, 2024

June 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Interest income:

Loans

355,220

350,604

337,014

1,053,081

971,962

Investment securities

127,907

123,708

122,857

375,794

362,219

Other

9,229

8,986

10,668

28,253

40,195

Total interest income

492,356

483,298

470,539

1,457,128

1,374,376

Interest expense:

Deposits

208,630

208,091

176,974

626,719

467,472

Borrowings

49,598

49,185

78,723

155,402

250,310

Total interest expense

258,228

257,276

255,697

782,121

717,782

Net interest income before provision for credit losses

234,128

226,022

214,842

675,007

656,594

Provision for credit losses

9,248

19,538

33,049

44,071

68,354

Net interest income after provision for credit losses

224,880

206,484

181,793

630,936

588,240

Non-interest income:

Deposit service charges and fees

5,016

4,909

5,189

15,238

15,705

Gain (loss) on investment securities, net

127

421

887

1,323

(10,669

)

Lease financing

6,368

5,640

16,531

23,448

42,159

Other non-interest income

11,377

13,215

5,117

33,941

22,551

Total non-interest income

22,888

24,185

27,724

73,950

69,746

Non-interest expense:

Employee compensation and benefits

81,781

75,588

68,825

233,289

207,290

Occupancy and equipment

12,242

10,973

10,890

33,784

32,735

Deposit insurance expense

7,421

8,530

7,790

29,481

23,294

Professional fees

4,953

4,497

2,696

11,960

9,132

Technology

21,094

20,567

19,193

61,976

61,356

Depreciation of operating lease equipment

4,666

7,896

11,217

21,775

33,970

Other non-interest expense

32,425

29,655

26,479

89,263

77,311

Total non-interest expense

164,582

157,706

147,090

481,528

445,088

Income before income taxes

83,186

72,963

62,427

223,358

212,898

Provision for income taxes

21,734

19,230

15,446

60,193

55,039

Net income

61,452

53,733

46,981

163,165

157,859

Earnings per common share, basic

0.82

0.72

0.63

2.19

2.12

Earnings per common share, diluted

0.81

0.72

0.63

2.17

2.11

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

Three Months Ended September 30,

Three Months Ended June 30,

Three Months Ended September 30,

2024

2023

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

24,299,898

358,259

5.87

24,290,169

353,707

5.85

24,417,433

340,357

5.54

Investment securities (3)

9,171,185

128,762

5.62

8,894,517

124,572

5.60

9,034,116

123,794

5.48

Other interest earning assets

722,366

9,229

5.08

711,586

8,986

5.08

785,146

10,668

5.39

Total interest earning assets

34,193,449

496,250

5.79

33,896,272

487,265

5.77

34,236,695

474,819

5.52

Allowance for credit losses

(231,383

)

(225,161

)

(173,407

)

Non-interest earning assets

1,444,410

1,571,649

1,747,310

Total assets

35,406,476

35,242,760

35,810,598

Liabilities and Stockholders' Equity:

Interest bearing liabilities:

Interest bearing demand deposits

3,930,101

37,294

3.78

3,742,071

35,249

3.79

3,038,870

25,491

3.33

Savings and money market deposits

11,304,999

119,856

4.22

11,176,000

118,945

4.28

10,205,765

97,956

3.81

Time deposits

4,524,215

51,480

4.53

4,750,640

53,897

4.56

5,420,522

53,527

3.92

Total interest bearing deposits

19,759,315

208,630

4.20

19,668,711

208,091

4.26

18,665,157

176,974

3.76

FHLB advances

3,766,630

40,471

4.27

3,764,286

40,032

4.28

6,040,870

69,525

4.57

Notes and other borrowings

708,829

9,127

5.15

711,167

9,153

5.15

715,307

9,198

5.14

Total interest bearing liabilities

24,234,774

258,228

4.24

24,144,164

257,276

4.28

25,421,334

255,697

3.99

Non-interest bearing demand deposits

7,384,721

7,448,633

6,937,537

Other non-interest bearing liabilities

1,009,157

960,691

868,178

Total liabilities

32,628,652

32,553,488

33,227,049

Stockholders' equity

2,777,824

2,689,272

2,583,549

Total liabilities and stockholders' equity

35,406,476

35,242,760

35,810,598

Net interest income

238,022

229,989

219,122

Interest rate spread

1.55

1.49

1.53

Net interest margin

2.78

2.72

2.56

_________________________

(1)

On a tax-equivalent basis where applicable

(2)

Annualized

(3)

At fair value except for securities held to maturity

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

Nine Months Ended September 30,

2024

2023

Average

Balance

Interest(1)

Yield/

Rate (1)(2)

Average

Balance

Interest(1)

Yield/

Rate (1)(2)

Assets:

Interest earning assets:

Loans

24,309,134

1,062,407

5.84

24,606,425

981,976

5.33

Investment securities (3)

9,006,654

378,358

5.60

9,356,211

364,980

5.20

Other interest earning assets

732,435

28,253

5.15

1,048,313

40,195

5.13

Total interest earning assets

34,048,223

1,469,018

5.76

35,010,949

1,387,151

5.29

Allowance for credit losses

(221,135

)

(162,395

)

Non-interest earning assets

1,534,800

1,761,500

Total assets

35,361,888

36,610,054

Liabilities and Stockholders' Equity:

Interest bearing liabilities:

Interest bearing demand deposits

3,752,828

106,050

3.77

2,728,287

54,781

2.68

Savings and money market deposits

11,238,662

357,440

4.25

10,844,838

278,243

3.43

Time deposits

4,834,209

163,229

4.51

5,150,486

134,448

3.49

Total interest bearing deposits

19,825,699

626,719

4.22

18,723,611

467,472

3.34

Federal funds purchased

—

46,510

1,582

4.54

FHLB advances

4,032,737

128,000

4.24

6,596,465

220,993

4.48

Notes and other borrowings

709,668

27,402

5.15

719,331

27,735

5.14

Total interest bearing liabilities

24,568,104

782,121

4.25

26,085,917

717,782

3.68

Non-interest bearing demand deposits

7,132,351

7,152,362

Other non-interest bearing liabilities

958,888

829,464

Total liabilities

32,659,343

34,067,743

Stockholders' equity

2,702,545

2,542,311

Total liabilities and stockholders' equity

35,361,888

36,610,054

Net interest income

686,897

669,369

Interest rate spread

1.51

1.61

Net interest margin

2.69

2.55

_________________________

(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

Nine Months Ended

September 30, 2024

June 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Basic earnings per common share:

Numerator:

Net income

61,452

53,733

46,981

163,165

157,859

Distributed and undistributed earnings allocated to participating securities

(850

)

(748

)

(700

)

(2,282

)

(2,378

)

Income allocated to common stockholders for basic earnings per common share

60,602

52,985

46,281

160,883

155,481

Denominator:

Weighted average common shares outstanding

74,753,372

74,762,498

74,416,698

74,675,279

74,530,871

Less average unvested stock awards

(1,079,182

)

(1,110,233

)

(1,165,105

)

(1,105,654

)

(1,180,570

)

Weighted average shares for basic earnings per common share

73,674,190

73,652,265

73,251,593

73,569,625

73,350,301

Basic earnings per common share

0.82

0.72

0.63

2.19

2.12

Diluted earnings per common share:

Numerator:

Income allocated to common stockholders for basic earnings per common share

60,602

52,985

46,281

160,883

155,481

Adjustment for earnings reallocated from participating securities

Income used in calculating diluted earnings per common share

60,608

52,987

46,284

160,892

155,489

Denominator:

Weighted average shares for basic earnings per common share

73,674,190

73,652,265

73,251,593

73,569,625

73,350,301

Dilutive effect of certain share-based awards

817,866

365,988

537,230

481,126

388,372

Weighted average shares for diluted earnings per common share

74,492,056

74,018,253

73,788,823

74,050,751

73,738,673

Diluted earnings per common share

0.81

0.72

0.63

2.17

2.11

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

At or for the Three Months Ended

At or for the Nine Months Ended

September 30, 2024

June 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Financial ratios (4)

Return on average assets

0.69

0.61

0.52

0.62

0.58

Return on average stockholders’ equity

8.8

8.0

7.2

8.1

8.3

Net interest margin (3)

2.78

2.72

2.56

2.69

2.55

Loans to deposits

87.6

88.7

93.3

87.6

93.3

Tangible book value per common share

36.52

35.07

32.88

36.52

32.88

September 30, 2024

June 30, 2024

December 31, 2023

Asset quality ratios

Non-performing loans to total loans (1)(5)

0.92

0.70

0.52

Non-performing assets to total assets (2)(5)

0.64

0.50

0.37

Allowance for credit losses to total loans

0.94

0.92

0.82

Allowance for credit losses to total commercial(6)

1.41

1.42

1.29

Allowance for credit losses to non-performing loans (1)(5)

101.68

130.12

159.54

Net charge-offs to average loans(4)

0.12

0.09

_________________________

(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 six and nine month periods as applicable.

(5)

Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $35.1 million or 0.14% of total loans and 0.10% of total assets at September 30, 2024, $39.0 million or 0.16% of total loans and 0.11% of total assets at June 30, 2024, and $41.8 million or 0.17% of total loans and 0.12% of total assets at December 31, 2023.

(6)

For purposes of this ratio, commercial loans includes the C&I and CRE sub-segments, as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio.

September 30, 2024

June 30, 2024

December 31, 2023

Required to be Considered Well Capitalized

BankUnited, Inc.

BankUnited, N.A.

BankUnited, Inc.

BankUnited, N.A.

BankUnited, Inc.

BankUnited, N.A.

Capital ratios

Tier 1 leverage

8.3 %

9.6 %

8.2 %

9.6 %

7.9 %

9.1 %

5.0 %

Common Equity Tier 1 ("CET1") risk-based capital

11.8 %

13.6 %

11.6 %

13.5 %

11.4 %

13.1 %

6.5 %

Total risk-based capital

13.9 %

14.6 %

13.6 %

14.4 %

13.4 %

13.9 %

10.0 %

Tangible Common Equity/Tangible Assets

7.6 %

N/A

7.4 %

N/A

7.0 %

N/A

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 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):

September 30, 2024

June 30, 2024

December 31, 2023

Total stockholders’ equity

2,807,804

2,699,348

2,577,921

Less: goodwill and other intangible assets

77,637

Tangible stockholders’ equity

2,730,167

2,621,711