BankUnited, Inc. (the “Company”) (NYSE: BKU) today
announced financial results for the quarter ended
September 30, 2016.
For the quarter ended September 30, 2016, the Company
reported net income of $50.8 million, or $0.47 per diluted share,
compared to $102.3 million, or $0.95 per diluted share, for the
quarter ended September 30, 2015. Excluding the impact of a
discrete income tax benefit and related professional fees, net
income for the quarter ended September 30, 2015 was $53.8
million, or $0.50 per diluted share.
For the nine months ended September 30, 2016, the Company
reported net income of $162.4 million, or $1.50 per diluted share.
The Company reported net income of $195.4 million, or $1.83 per
diluted share, for the nine months ended September 30, 2015.
Earnings per diluted share was $1.37 for the nine months ended
September 30, 2015, excluding the impact of the discrete
income tax benefit and related professional fees.
John Kanas, Chairman, President and Chief Executive Officer,
said, “While earnings were somewhat below expectations, BankUnited
posted a $1 billion increase in interest earning assets and
continued growth in net interest income for the quarter.”
Performance Highlights
- Net interest income increased by $32.8
million to $221.7 million for the quarter ended September 30,
2016 from $189.0 million for the quarter ended September 30,
2015. Interest income increased by $46.1 million, primarily driven
by increases in the average balances of loans and investment
securities outstanding. Interest expense increased by $13.3 million
due primarily to an increase in average interest bearing
liabilities.
- The net interest margin, calculated on
a tax-equivalent basis, was 3.69% for the quarter ended
September 30, 2016 compared to 3.88% for the quarter ended
September 30, 2015 and 3.75% for the immediately preceding
quarter ended June 30, 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.
- Total interest earning assets increased
by $1.0 billion during the third quarter of 2016. New loans and
leases, including equipment under operating lease, grew by $909
million during the quarter. For the nine months ended September 30,
2016, new loans and leases increased by $2.6 billion.
- Total deposits increased by $604
million for the quarter ended September 30, 2016 to $18.8
billion. For the nine months ended September 30, 2016, total
deposits increased by $1.9 billion.
- The ratio of the allowance for
non-covered loan and lease losses to total non-covered loans
increased to 0.83% at September 30, 2016 from 0.76% at
December 31, 2015. The provision for loan losses for the
quarter and nine months ended September 30, 2016 increased by $6.6
million and $8.1 million over the comparable periods for the prior
year primarily due to increases in qualitative reserves and in
reserves related to the taxi medallion portfolio.
- Earnings for the quarter and nine
months ended September 30, 2015 benefited from a discrete income
tax benefit of $49.3 million. Non-interest expense for these
periods included $1.3 million in professional fees related to this
tax benefit.
- Book value and tangible book value per
common share grew to $22.79 and $22.04, respectively, at
September 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
September 30, 2016 were as follows:
BankUnited, Inc. BankUnited, N.A. Tier
1 leverage 8.5% 9.3% Common Equity Tier 1 ("CET1")
risk-based capital 11.6% 12.7% Tier 1 risk-based capital
11.6% 12.7% Total risk-based capital 12.4% 13.6%
Loans and Leases
Loans, including premiums, discounts and deferred fees and
costs, increased to $19.0 billion at September 30, 2016 from
$16.6 billion at December 31, 2015. New loans grew to $18.3
billion while loans acquired in the FSB acquisition declined to
$716 million at September 30, 2016.
For the quarter ended September 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 $717 million to $14.9 billion. New
residential loans grew by $156 million to $3.4 billion during the
third quarter of 2016.
The New York franchise contributed $125 million to new loan
growth for the quarter while the Florida franchise contributed $378
million. The Company's national platforms contributed $369 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 September 30, 2016, the new loan
portfolio included $6.3 billion, $6.3 billion and $5.7 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 September
30,
December 31,
September 30,
December 31,
2016
2015
2016
2015
Single family residential and home equity 18.1% 18.4% 21.0% 22.3%
Multi-family 20.6% 21.9% 20.0% 20.9% Commercial real estate 20.4%
18.4% 19.6% 17.5% Commercial real estate - owner occupied 9.1% 8.5%
8.8% 8.2% Construction and land 1.6% 2.2% 1.5% 2.1% Commercial and
industrial 17.5% 17.6% 16.9% 16.7% Commercial lending subsidiaries
12.5% 12.8% 12.0% 12.1% Consumer 0.2% 0.2% 0.2% 0.2% 100.0% 100.0%
100.0% 100.0%
Equipment under operating lease, net, grew by $37 million during
the third quarter of 2016.
Asset Quality and Allowance for Loan
and Lease Losses
For the quarters ended September 30, 2016 and 2015, the
Company recorded provisions for loan losses of $24.4 million and
$17.8 million, respectively. For the nine months ended September
30, 2016 and 2015, the Company recorded provisions for loan losses
of $42.4 million and $34.4 million, respectively. Substantially all
of these provisions related to new loans.
The increase in the provision for loan losses for the nine
months ended September 30, 2016 as compared to the nine months
ended September 30, 2015 was driven primarily by an increase in the
reserve related to the taxi medallion portfolio. Other factors
impacting the change in the provision for these comparative
periods, including changes in quantitative and qualitative loss
factors, relative growth of the loan portfolio and changes in
specific reserves for impaired loans, were largely offsetting.
The most significant factors contributing to the increase in the
provision for loan losses for the quarter ended September 30, 2016
compared to the quarter ended September 30, 2015 were an increase
in qualitative reserves and an increase in the reserve related to
the taxi medallion portfolio.
Non-covered, non-performing loans totaled $112.4 million or
0.61% of total non-covered loans at September 30, 2016
compared to $59.2 million or 0.37% of total non-covered loans at
December 31, 2015. Non-performing taxi medallion loans
comprised $54.5 million, or 0.30% of total non-covered loans, and
$2.6 million, or 0.02% of total non-covered loans at
September 30, 2016 and December 31, 2015, respectively.
Non-covered, non-performing assets also included $4.4 million and
$2.3 million of other real estate owned (“OREO”) and other
repossessed assets at September 30, 2016 and December 31,
2015, respectively.
At September 30, 2016, total non-performing assets were
$126.9 million, including $10.8 million of OREO and other
repossessed assets, compared to $82.7 million, including $11.2
million of OREO and other repossessed assets, at December 31,
2015.
The ratios of the allowance for non-covered loan and lease
losses to total non-covered loans and to non-performing,
non-covered loans were 0.83% and 134.97% at September 30,
2016, compared to 0.76% and 204.45% at December 31, 2015. The
annualized ratio of net charge-offs to average non-covered loans
was 0.10% for the nine months ended September 30, 2016, as well as
for the nine months ended September 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 September 30, 2016 Three
Months Ended September 30, 2015 Non-ACI
Non-ACI ACI Loans
Loans New Loans Total ACI Loans
Loans New Loans Total Balance at beginning of
period $ — $ 3,453 $ 132,265 $ 135,718 $ — $ 2,570 $ 104,815 $
107,385 Provision (recovery) — (445 ) 24,853 24,408 — 1,073 16,746
17,819 Charge-offs — (247 ) (6,615 ) (6,862 ) — (189 ) (6,903 )
(7,092 ) Recoveries — 24 1,188 1,212 —
31 142 173 Balance at end of period $ —
$ 2,785 $ 151,691 $ 154,476 $ —
$ 3,485 $ 114,800 $ 118,285
Nine
Months Ended September 30, 2016 Nine Months Ended
September 30, 2015 Non-ACI
Non-ACI ACI Loans Loans New
Loans Total ACI Loans Loans New
Loans Total Balance at beginning of period $ — $ 4,868 $
120,960 $ 125,828 $ — $ 4,192 $ 91,350 $ 95,542 Provision
(recovery) — (1,119 ) 43,568 42,449 — 667 33,720 34,387 Charge-offs
— (1,086 ) (15,748 ) (16,834 ) — (1,458 ) (11,186 ) (12,644 )
Recoveries — 122 2,911 3,033 —
84 916 1,000 Balance at end of period $ —
$ 2,785 $ 151,691 $ 154,476 $ —
$ 3,485 $ 114,800 $ 118,285
Deposits
At September 30, 2016, deposits totaled $18.8 billion
compared to $16.9 billion at December 31, 2015. The average
cost of total deposits was 0.67% for the quarter ended
September 30, 2016, compared to 0.66% for the immediately
preceding quarter ended June 30, 2016 and 0.61% for the quarter
ended September 30, 2015. The average cost of total deposits
was 0.65% for the nine months ended September 30, 2016, compared to
0.60% for the nine months ended September 30, 2015.
Net interest income
Net interest income for the quarter ended September 30,
2016 increased to $221.7 million from $189.0 million for the
quarter ended September 30, 2015. Net interest income was
$642.9 million for the nine months ended September 30, 2016,
compared to $542.7 million for the nine months ended September 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 3.69% for the quarter ended
September 30, 2016 compared to 3.88% for the quarter ended
September 30, 2015 and 3.75% for the immediately preceding
quarter ended June 30, 2016. Net interest margin, calculated on a
tax-equivalent basis, was 3.75% for the nine months ended September
30, 2016, compared to 3.95% for the nine months ended September 30,
2015. Significant factors impacting this expected trend in net
interest margin for the quarter and nine months ended September 30,
2016 included:
- The tax-equivalent yield on loans
declined to 5.03% and 5.14% for the quarter and nine months ended
September 30, 2016 from 5.27% and 5.42% for the quarter and nine
months ended September 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 3.53% and 3.54% for the quarter and nine months ended September
30, 2016, compared to 3.48% and 3.49% for the quarter and nine
months ended September 30, 2015.
- The tax-equivalent yield on loans
acquired in the FSB Acquisition increased to 40.69% and 38.75% for
the quarter and nine months ended September 30, 2016 from 30.75%
and 28.69% for the quarter and nine months ended September 30,
2015.
- The tax-equivalent yield on investment
securities increased to 2.87% and 2.82% for the quarter and nine
months ended September 30, 2016 from 2.65% and 2.54% for the
quarter and nine months ended September 30, 2015.
- The average rate on interest bearing
liabilities increased to 0.92% and 0.93%, respectively, for the
quarter and nine months ended September 30, 2016 from 0.83% and
0.82% for the quarter and nine months ended September 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 nine months
ended September 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 27,093 Accretion (228,542 ) Balance at September 30,
2016 $ 701,116
Non-interest income
Non-interest income totaled $25.1 million and $77.1 million,
respectively, for the quarter and nine months ended September 30,
2016 compared to $31.2 million and $73.0 million, respectively, for
the quarter and nine months ended September 30, 2015. The most
significant factors contributing to the $6.1 million decline in
non-interest income for the quarter ended September 30, 2016
compared to the quarter ended September 30, 2015 were the loss on
sale of covered loans, net of the impact of FDIC indemnification
and lower income from lease financing. For the nine months ended
September 30, 2016 compared to the nine months ended September 30,
2015, non-interest income increased by $4.2 million. Offsetting
factors contributing to this increase included the loss on sale of
covered loans, net of the impact of FDIC indemnification, a
reduction in income from resolution of covered assets, net of the
impact of FDIC indemnification, an increase in lease financing
income, a $4.6 million increase in securities gains and a $5.0
million increase in gains on the sale of loans by the Small
Business Finance division acquired in May 2015.
Income from lease financing decreased by $1.5 million for the
quarter ended September 30, 2016 and increased by $6.8 million
for the nine months ended September 30, 2016 from the comparable
periods in 2015. The quarter and nine month periods ended September
30, 2015 included $3.9 million in gains on sale of leased
equipment; such gains were not significant for the quarter and nine
month period ended September 30, 2016. Increased rental revenue
corresponding to growth in the operating lease portfolio for the
nine months ended September 30, 2016 more than offset the decrease
in gains on sale of equipment.
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 gain (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 nine months ended September
30, 2016 was $(0.2) million and $2.4 million, respectively,
compared to $4.1 million and $13.2 million, respectively, for the
quarter and nine months ended September 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 nine months ended September 30, 2016 compared
to the quarter and nine months ended September 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 September 30, Nine
Months Ended September 30, 2016 2015
2016 2015 Gain (loss) on sale of covered loans
$ (10,033 ) $ 9,288 $ (14,895 ) $ 26,711 Net gain (loss) on FDIC
indemnification 8,026 (7,430 ) 11,958 (21,476 ) Net
impact on pre-tax earnings $ (2,007 ) $ 1,858 $ (2,937 ) $
5,235
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 $5.3 million for the nine months
ended September 30, 2016 compared to $8.4 million for the nine
months ended September 30, 2015. The decline was attributable to
lower income from paid-in-full resolutions.
Non-interest expense
Non-interest expense totaled $148.0 million and $434.2 million,
respectively, for the quarter and nine months ended September 30,
2016 compared to $132.3 million and $369.9 million, respectively,
for the quarter and nine months ended September 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 $39.0 million
and $116.7 million, respectively, for the quarter and nine months
ended September 30, 2016, compared to $28.4 million and $76.9
million, respectively, for the quarter and nine months ended
September 30, 2015. The amortization rate increased to 25.36% and
23.48%, respectively, for the quarter and nine months ended
September 30, 2016 from 13.49% and 11.52%, respectively, for the
quarter and nine months ended September 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 nine months ended September 30, 2016 corresponded
to growth in the portfolio of equipment under operating lease.
Non-interest expense for the quarter and nine months ended
September 30, 2016 was also impacted by a litigation accrual of
$2.1 million and a $1.1 million settlement related to a payroll tax
audit.
Provision for income
taxes
The effective income tax rate was 31.7% and 33.2%, respectively,
for the quarter and nine months ended September 30, 2016, compared
to (46.1)% and 7.6%, respectively, for the quarter and nine months
ended September 30, 2015. The effective income tax rates for
the quarter and nine months ended September 30, 2016 differed from
the statutory federal income tax rate of 35% due primarily to the
effect of income not subject to tax and state income taxes. The
effective income tax rates for the quarter and nine months ended
September 30, 2015 reflected a discrete income tax benefit of $49.3
million. The tax benefit, predicated on guidance issued by the IRS
in 2015, related to the Company's ability to claim additional tax
basis in certain assets acquired in the FSB Acquisition. In
addition, $5.9 million of reserves for uncertain tax liabilities
were released in the quarter ended September 30, 2015, due to
the lapse of the statute of limitations related thereto.
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
September 30, 2016 (in thousands except share and per share
data):
Total stockholders’ equity $ 2,373,090 Less: goodwill
and other intangible assets 78,116 Tangible stockholders’ equity $
2,294,974 Common shares issued and outstanding 104,141,425
Book value per common share $ 22.79 Tangible book
value per common share $ 22.04
Net income and earnings per diluted common share excluding the
impact of a discrete income tax benefit and related professional
fees are non-GAAP financial measures. Management believes
disclosure of these measures enhances readers' ability to compare
the Company's financial performance for the periods ended
September 30, 2015 to that of other periods presented. The
following table reconciles these non-GAAP financial measurements to
the comparable GAAP financial measurements of net income and
earnings per diluted share for the three and nine months ended
September 30, 2015 (in thousands, except share and per share
data):
Three Months Nine Months Ended
Ended September 30, September 30, 2015
2015 Net income excluding the impact of a discrete income
tax benefit and related professional fees: Net income (GAAP) $
102,303 $ 195,397 Less discrete income tax benefit (49,323 )
(49,323 ) Add back related professional fees, net of tax of $524
801 801 Net income excluding the impact of a discrete
income tax benefit and related professional fees (non-GAAP) $
53,781 $ 146,875 Diluted earnings per common
share, excluding the impact of a discrete income tax benefit and
related professional fees:
Diluted earnings per common share
(GAAP)
$ 0.95 $ 1.83 Impact on diluted earnings per common share of
discrete income tax benefit and related professional fees
(non-GAAP) (0.47 ) (0.47 ) Impact on diluted earnings per common
share of discrete income tax benefit and related professional fees
allocated to participating securities (non-GAAP) 0.02 0.02
Diluted earnings per common share, excluding the impact of a
discrete income tax benefit and related professional fees
(non-GAAP)(1) $ 0.50 $ 1.37 Impact on diluted
earnings per common share of discrete income tax benefit and
related professional fees: Discrete income tax benefit and related
professional fees, net of tax $ (48,522 ) $ (48,522 ) Weighted
average shares for diluted earnings per share (GAAP) 103,316,798
102,782,029 Impact on diluted earnings per common
share of discrete income tax benefit and related professional fees
(non-GAAP) $ (0.47 ) $ (0.47 ) Impact on diluted earnings
per common share of discrete income tax benefit and related
professional fees allocated to participating securities: Discrete
income tax benefit and related professional fees, net of tax,
allocated to participating securities $ 1,898 $ 1,885 Weighted
average shares for diluted earnings per share (GAAP) 103,316,798
102,782,029 Impact on diluted earnings per common
share of discrete income tax benefit and related professional fees
allocated to participating securities (non-GAAP) $ 0.02 $
0.02 (1) Amount for the nine months ended September
30, 2015 adjusted for rounding
Earnings Conference Call and
Presentation
A conference call to discuss quarterly results will be held at
9:00 a.m. ET on Thursday, October 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 95028426. A replay of the call
will be available from 12:00 p.m. ET on October 20th through 11:59
p.m. ET on October 27th by calling (855) 859-2056 (domestic) or
(404) 537-3406 (international). The pass code for the replay is
95028426. 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 $27.3 billion at
September 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 September 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 September 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) September 30, December 31,
2016 2015 ASSETS Cash and due from banks:
Non-interest bearing $ 32,531 $ 31,515 Interest bearing 92,763
39,613 Interest bearing deposits at Federal Reserve Bank 132,706
192,366 Federal funds sold 3,954 4,006 Cash and cash
equivalents 261,954 267,500 Investment securities available for
sale, at fair value 5,948,061 4,859,539 Investment securities held
to maturity 10,000 10,000 Non-marketable equity securities 283,422
219,997 Loans held for sale 42,393 47,410 Loans (including covered
loans of $669,276 and $809,540) 19,042,603 16,636,603 Allowance for
loan and lease losses (154,476 ) (125,828 ) Loans, net 18,888,127
16,510,775 FDIC indemnification asset 582,931 739,880 Bank owned
life insurance 236,540 225,867 Equipment under operating lease, net
515,913 483,518 Deferred tax asset, net 58,334 105,577 Goodwill and
other intangible assets 78,116 78,330 Other assets 359,223
335,074 Total assets $ 27,265,014 $ 23,883,467
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities: Demand deposits: Non-interest bearing $
2,981,602 $ 2,874,533 Interest bearing 1,483,900 1,167,537 Savings
and money market 8,516,400 8,288,340 Time 5,854,407
4,608,091 Total deposits 18,836,309 16,938,501 Federal Home
Loan Bank advances 5,219,125 4,008,464 Notes and other borrowings
402,786 402,545 Other liabilities 433,704 290,059
Total liabilities 24,891,924 21,639,569
Commitments and
contingencies Stockholders' equity: Common stock,
par value $0.01 per share, 400,000,000 shares authorized;
104,141,425 and 103,626,255 shares issued and outstanding 1,041
1,036 Paid-in capital 1,420,622 1,406,786 Retained earnings 908,897
813,894 Accumulated other comprehensive income 42,530 22,182
Total stockholders' equity 2,373,090 2,243,898
Total liabilities and stockholders' equity $ 27,265,014 $
23,883,467
BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF INCOME - UNAUDITED (In thousands, except per share
data) Three Months Ended
Nine Months Ended
September 30,
September 30,
2016 2015 2016 2015
Interest income: Loans $ 227,233 $ 190,294 $ 662,439 $
545,683 Investment securities 39,712 30,889 109,963 85,393 Other
3,036 2,715 8,850 7,338 Total interest
income 269,981 223,898 781,252 638,414
Interest expense: Deposits 30,968 23,959 86,427 65,818
Borrowings 17,278 10,988 51,939 29,939
Total interest expense 48,246 34,947 138,366
95,757 Net interest income before provision for loan losses
221,735 188,951 642,886 542,657 Provision for (recovery of) loan
losses (including $(445), $1,073, ($1,119) and $667 for covered
loans) 24,408 17,819 42,449 34,387 Net
interest income after provision for loan losses 197,327
171,132 600,437 508,270
Non-interest
income: Income from resolution of covered assets, net 8,883
12,364 26,426 41,261 Net gain (loss) on FDIC indemnification 993
(15,988 ) (9,410 ) (53,024 ) Service charges and fees 5,171 4,637
14,529 13,580 Gain (loss) on sale of loans, net (including gain
(loss) related to covered loans of $(10,033), $9,288, $(14,895) and
$26,711) (7,947 ) 11,301 (7,360 ) 29,690 Gain on investment
securities available for sale, net 3,008 2,343 10,065 5,493 Lease
financing 11,188 12,673 32,762 25,954 Other non-interest income
3,779 3,843 10,118 10,018 Total
non-interest income 25,075 31,173 77,130
72,972
Non-interest expense: Employee compensation
and benefits 55,162 55,316 166,374 156,640 Occupancy and equipment
18,488 19,103 56,263 56,207 Amortization of FDIC indemnification
asset 38,957 28,409 116,711 76,874 Deposit insurance expense 4,943
3,615 12,866 9,696 Professional fees 3,884 4,095 10,119 10,073
Telecommunications and data processing 3,746 3,451 10,800 10,267
Depreciation of equipment under operating lease 6,855 5,012 20,004
12,522 Other non-interest expense 15,969 13,268
41,087 37,582 Total non-interest expense 148,004
132,269 434,224 369,861 Income before
income taxes 74,398 70,036 243,343 211,381 Provision (benefit) for
income taxes 23,550 (32,267 ) 80,896 15,984
Net income $ 50,848 $ 102,303 $ 162,447 $
195,397 Earnings per common share, basic $ 0.47 $
0.96 $ 1.52 $ 1.84 Earnings per common share,
diluted $ 0.47 $ 0.95 $ 1.50 $ 1.83
Cash dividends declared per common share $ 0.21 $ 0.21
$ 0.63 $ 0.63
BANKUNITED, INC. AND SUBSIDIARIES AVERAGE BALANCES AND
YIELDS (Dollars in thousands) Three Months
Ended September 30, 2016 2015
Yield /
Yield /
Average Balance
Interest (1)
Rate(1)(2)
Average Balance
Interest (1)
Rate (1)(2)
Assets: Interest earning assets: New loans $
17,765,723 $ 157,227 3.53% $ 13,717,886 $ 120,056 3.48% Loans
acquired in FSB acquisition 749,086 76,223 40.69%
964,826 74,230 30.75% Total loans 18,514,809 233,450
5.03% 14,682,712 194,286 5.27% Investment securities (3) 5,898,382
42,262 2.87% 4,832,109 31,970 2.65% Other interest earning assets
557,490 3,036 2.17% 460,964 2,715 2.34%
Total interest earning assets 24,970,681 278,748 4.45% 19,975,785
228,971 4.57% Allowance for loan and lease losses (139,284 )
(110,233 ) Non-interest earning assets 1,884,894 1,998,023
Total assets $ 26,716,291 $ 21,863,575
Liabilities and Stockholders' Equity: Interest bearing
liabilities: Interest bearing demand deposits $ 1,437,677 2,224
0.62% $ 1,352,069 1,547 0.45% Savings and money market deposits
8,349,281 12,974 0.62% 7,074,730 10,013 0.56% Time deposits
5,567,909 15,770 1.13% 4,396,640 12,399
1.12% Total interest bearing deposits 15,354,867 30,968 0.80%
12,823,439 23,959 0.74% FHLB advances 5,143,003 11,956 0.92%
3,882,553 10,682 1.09% Notes and other borrowings 403,590
5,322 5.25% 10,380 306 11.70% Total interest
bearing liabilities 20,901,460 48,246 0.92% 16,716,372
34,947 0.83% Non-interest bearing demand deposits 2,981,017
2,678,429 Other non-interest bearing liabilities 460,514
290,758 Total liabilities 24,342,991 19,685,559
Stockholders' equity 2,373,300 2,178,016 Total
liabilities and stockholders' equity $ 26,716,291 $
21,863,575 Net interest income $ 230,502 $ 194,024
Interest rate spread 3.53% 3.74% Net interest margin 3.69%
3.88% (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, 2016 2015
Average
Yield/
Average
Yield/
Balance
Interest (1)
Rate (1)(2)
Balance
Interest (1)
Rate (1)(2)
Assets: Interest earning assets: New loans $
16,820,646 $ 445,878 3.54% $ 12,684,839 $ 333,949 3.49% Loans
acquired in FSB acquisition 802,849 233,306 38.75%
1,036,679 222,970 28.69% Total loans 17,623,495
679,184 5.14% 13,721,518 556,919 5.42% Investment securities (3)
5,551,249 117,478 2.82% 4,631,331 88,084 2.54% Other interest
earning assets 531,245 8,850 2.22% 466,947
7,338 2.10% Total interest earning assets 23,705,989 805,512
4.53% 18,819,796 652,341 4.63% Allowance for loan and lease losses
(133,280 ) (104,210 ) Non-interest earning assets 1,946,846
1,969,880 Total assets $ 25,519,555 $ 20,685,466
Liabilities and Stockholders' Equity: Interest
bearing liabilities: Interest bearing demand deposits $
1,341,218 6,140 0.61% $ 1,129,288 3,880 0.46% Savings and money
market deposits 8,203,676 37,285 0.61% 6,601,070 26,700 0.54% Time
deposits 5,177,191 43,002 1.11% 4,210,793
35,238 1.12% Total interest bearing deposits 14,722,085
86,427 0.78% 11,941,151 65,818 0.74% FHLB advances 4,698,492 35,972
1.02% 3,615,872 29,014 1.07% Notes and other borrowings 403,213
15,967 5.29% 10,932 925 11.31%
Total interest bearing liabilities 19,823,790 138,366 0.93%
15,567,955 95,757 0.82% Non-interest bearing demand deposits
2,944,861 2,698,570 Other non-interest bearing liabilities 431,921
280,208 Total liabilities 23,200,572 18,546,733
Stockholders' equity 2,318,983 2,138,733 Total
liabilities and stockholders' equity $ 25,519,555 $
20,685,466 Net interest income $ 667,146 $ 556,584
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
BANKUNITED, INC. AND SUBSIDIARIES EARNINGS PER COMMON
SHARE (In thousands except share and per share amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2016 2015 2016 2015
Basic earnings per common share: Numerator: Net
income $ 50,848 $ 102,303 $ 162,447 $ 195,397 Distributed and
undistributed earnings allocated to participating securities (2,031
) (4,016 ) (6,522 ) (7,578 ) Income allocated to common
stockholders for basic earnings per common share $ 48,817 $ 98,287
$ 155,925 $ 187,819
Denominator: Weighted average common
shares outstanding 104,153,018 103,503,425 104,077,932 103,064,484
Less average unvested stock awards (1,150,268 ) (1,176,288 )
(1,165,509 ) (1,121,973 ) Weighted average shares for basic
earnings per common share 103,002,750 102,327,137
102,912,423 101,942,511
Basic earnings per common
share $ 0.47 $ 0.96 $ 1.52 $ 1.84
Diluted earnings per common share: Numerator: Income
allocated to common stockholders for basic earnings per common
share $ 48,817 $ 98,287 $ 155,925 $ 187,819 Adjustment for earnings
reallocated from participating securities (81 ) 25 (264 ) 30
Income used in calculating diluted earnings per common share
$ 48,736 $ 98,312 $ 155,661 $ 187,849
Denominator: Weighted
average shares for basic earnings per common share 103,002,750
102,327,137 102,912,423 101,942,511 Dilutive effect of stock
options 558,304 989,661 699,977 839,518
Weighted average shares for diluted earnings per common share
103,561,054 103,316,798 103,612,400
102,782,029
Diluted earnings per common share $ 0.47
$ 0.95 $ 1.50 $ 1.83
BANKUNITED, INC. AND SUBSIDIARIES SELECTED RATIOS
Three Months Ended
Nine Months Ended
September 30,
September 30,
2016 2015 2016 2015
Financial ratios (5) Return on average assets 0.76%
1.86% 0.85% 1.26% Return on average stockholders’ equity 8.52%
18.64% 9.36% 12.21% Net interest margin (4) 3.69% 3.88% 3.75% 3.95%
September 30, 2016 December 31, 2015
Non- Non- Covered Total
Covered Total Asset quality ratios
Non-performing loans to total loans (1) (3) 0.61% 0.61% 0.37% 0.43%
Non-performing assets to total assets (2) 0.43% 0.47% 0.26% 0.35%
Allowance for loan and lease losses to total loans (3) 0.83% 0.81%
0.76% 0.76% Allowance for loan and lease losses to non-performing
loans (1) 134.97% 132.98% 204.45% 175.90% Net charge-offs to
average loans (5) 0.10% 0.11% 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161020005188/en/
BankUnited, Inc.Investor Relations:Leslie N. Lunak,
786-313-1698llunak@bankunited.comorMedia Relations:Mary Harris,
305-817-8117mharris@bankunited.com
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