UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 18, 2024 (July 18, 2024 )
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
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| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(Registrant’s telephone number, including area code): (305 ) 569-2000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Class | Trading Symbol | Name of Exchange on Which Registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Item 2.02 Results of Operations and Financial Condition.
On July 18, 2024, BankUnited, Inc. (the “Company”) reported its results for the quarter ended June 30, 2024. A copy of the Company’s press release containing this information and slides containing supplemental information related to this release are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | ||||||||||
| July 18, 2024 | |||||||||||
| July 18, 2024 | |||||||||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: | July 18, 2024 | BANKUNITED, INC. | |||||||||
| /s/ Leslie N. Lunak | |||||||||||
| Name: | Leslie N. Lunak | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
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EXHIBIT INDEX
| Exhibit Number | Description | ||||||||||
| July 18, 2024 | |||||||||||
| July 18, 2024 | |||||||||||
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Exhibit 99.1
BANKUNITED, INC. REPORTS SECOND QUARTER 2024 RESULTS
Miami Lakes, Fla. — July 18, 2024 — BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended June 30, 2024.
"This was an outstanding quarter. Margin expanded, the cost of deposits declined, non-interest bearing deposits grew by over $800 million and we saw good growth in the core commercial loan portfolio segments," said Rajinder Singh, Chairman, President and Chief Executive Officer.
For the quarter ended June 30, 2024, the Company reported net income of $53.7 million, or $0.72 per diluted share, compared to $48.0 million, or $0.64 per diluted share, for the immediately preceding quarter ended March 31, 2024 and $58.0 million, or $0.78 per diluted share, for the quarter ended June 30, 2023. For the six months ended June 30, 2024, the Company reported net income of $101.7 million, or $1.36 per diluted share compared to $110.9 million, or $1.48 per diluted share for the six months ended June 30, 2023.
Quarterly Highlights
We continued to execute on our strategic priorities this quarter:
•The net interest margin, calculated on a tax-equivalent basis, expanded by 0.15%, to 2.72% for the quarter ended June 30, 2024 from 2.57% for the immediately preceding quarter.
•The average cost of total deposits declined by 0.09% to 3.09% for the quarter ended June 30, 2024 from 3.18% for the quarter ended March 31, 2024. The spot APY of total deposits declined to 3.09% at June 30, 2024 from 3.17% at March 31, 2024. The spot APY of interest bearing deposits was stable at 4.29% at both June 30, 2024 and March 31, 2024.
•Non-brokered deposits grew by $1.3 billion for the quarter ended June 30, 2024 while total deposits grew by $736 million. Non-interest bearing demand deposits grew by $826 million, to 29% of total deposits at June 30, 2024, up from 27% at March 31, 2024. Average non-interest bearing demand deposits grew by $888 million for the quarter. For the first six months of 2024, non-interest bearing demand deposits grew by $1.2 billion.
•Wholesale funding continued to decline; in total, FHLB advances and brokered deposits were down by $1.2 billion for the quarter ended June 30, 2024.
•Total loans grew by $402 million for the quarter ended June 30, 2024. The core C&I and commercial real estate portfolios grew by $589 million and mortgage warehouse grew by $83 million. Consistent with our strategic objectives, the residential loan portfolio declined by $212 million; franchise, equipment and municipal finance declined by a total of $57 million.
•The loan to deposit ratio declined to 88.7% at June 30, 2024, from 89.6% at March 31, 2024.
•Credit trends remain largely favorable although we are seeing some expected normalization. The annualized net charge-off ratio for the six months ended June 30, 2024 was 0.12%. The NPA ratio at June 30, 2024 was 0.50%, including 0.11% related to the guaranteed portion of non-accrual SBA loans, compared to 0.34%, including 0.11% related to the guaranteed portion of non-accrual SBA loans at March 31, 2024. The NPA ratio remains below pre-pandemic levels.
•The ratio of the ACL to total loans increased to 0.92% at June 30, 2024; the ratio of the ACL to non-performing loans was 130.12%. The ACL to loans ratio for commercial portfolio sub-segments including C&I, CRE, franchise finance and equipment finance was 1.42% at June 30, 2024 and the ACL to loans ratio for CRE office loans was 2.47%.
•Our commercial real estate exposure is modest, totaling 24% of loans and 165% of the Bank's total risk based capital at June 30, 2024. By comparison, based on call report data as of March 31, 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 222%.
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•At June 30, 2024, the weighted average LTV of the CRE portfolio was 56.0%, the weighted average DSCR was 1.77, 56% of the portfolio was collateralized by properties located in Florida and 27% was collateralized by properties located in the New York tri-state area. For the office sub-segment, the weighted average LTV was 65.8%, the weighted average DSCR was 1.59, 58% was collateralized by properties in Florida, substantially all of which was suburban, and 24% was collateralized by properties located in the New York tri-state area.
•Liquidity remains ample. Total same day available liquidity was $14.9 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 139% and an estimated 61% of our deposits were insured or collateralized at June 30, 2024.
•Our capital position is robust. At June 30, 2024, CET1 was 11.6% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.4% at June 30, 2024. The ratio of tangible common equity to tangible assets increased to 7.4% at June 30, 2024.
•The net unrealized pre-tax loss on the available for sale ("AFS") securities portfolio continued to improve, declining by $36 million, to 5% of amortized cost, for the quarter ended June 30, 2024. The duration of our AFS securities portfolio remained short, at 1.82 as of June 30, 2024. Held to maturity securities were not significant.
•Book value and tangible book value per common share continued to grow, to $36.11 and $35.07, respectively, at June 30, 2024, compared to $35.31 and $34.27, respectively, at March 31, 2024, and $33.94 and $32.90, respectively, one year ago.
Loans
Loan portfolio composition at the dates indicated follows (dollars in thousands):
| June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
Core C&I and CRE sub-segments: | |||||||||||||||||||||||||||||||||||
| Non-owner occupied commercial real estate | $ | 5,367,663 | 21.8 | % | $ | 5,309,126 | 21.9 | % | $ | 5,323,241 | 21.6 | % | |||||||||||||||||||||||
| Construction and land | 584,833 | 2.4 | % | 529,645 | 2.2 | % | 495,992 | 2.0 | % | ||||||||||||||||||||||||||
| Owner occupied commercial real estate | 1,966,809 | 8.0 | % | 1,916,651 | 7.9 | % | 1,935,743 | 7.9 | % | ||||||||||||||||||||||||||
| Commercial and industrial | 7,170,622 | 29.1 | % | 6,745,622 | 27.9 | % | 6,971,981 | 28.3 | % | ||||||||||||||||||||||||||
| 15,089,927 | 61.3 | % | 14,501,044 | 59.9 | % | 14,726,957 | 59.8 | % | |||||||||||||||||||||||||||
Franchise and equipment finance | 307,442 | 1.2 | % | 347,103 | 1.4 | % | 380,347 | 1.5 | % | ||||||||||||||||||||||||||
| Pinnacle - municipal finance | 847,234 | 3.4 | % | 864,796 | 3.6 | % | 884,690 | 3.6 | % | ||||||||||||||||||||||||||
| Mortgage warehouse lending ("MWL") | 539,159 | 2.2 | % | 456,385 | 1.9 | % | 432,663 | 1.8 | % | ||||||||||||||||||||||||||
| Residential | 7,844,722 | 31.9 | % | 8,056,972 | 33.2 | % | 8,209,027 | 33.3 | % | ||||||||||||||||||||||||||
| $ | 24,628,484 | 100.0 | % | $ | 24,226,300 | 100.0 | % | $ | 24,633,684 | 100.0 | % | ||||||||||||||||||||||||
For the quarter ended June 30, 2024, total loans grew by $402 million. The core C&I and CRE portfolio sub-segments grew by $589 million and MWL grew by $83 million. Consistent with our balance sheet strategy, residential loans declined by $212 million; franchise, equipment, and municipal finance declined by an aggregate $57 million.
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Asset Quality and the ACL
The following table presents the ACL and related ACL coverage ratios at the dates indicated as well as net charge-off rates for the periods ended June 30, 2024, March 31, 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 | % | |||||||||||||||||||
| March 31, 2024 | $ | 217,556 | 0.90 | % | 1.42 | % | 187.92 | % | 0.02 | % | |||||||||||||||||||
| June 30, 2024 | $ | 225,698 | 0.92 | % | 1.42 | % | 130.12 | % | 0.12 | % | |||||||||||||||||||
(1) Annualized for the three months ended March 31, 2024 and the six months ended June 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 June 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 June 30, 2024, the provision for credit losses, including both funded and unfunded loan commitments, was $19.5 million, compared to $15.3 million for the immediately preceding quarter ended March 31, 2024. Significant factors impacting the provision for credit losses for the quarter ended June 30, 2024 were new loan production, risk rating migration and changes in portfolio characteristics and an increase in certain specific reserves.
The following table summarizes the activity in the ACL for the periods indicated (in thousands):
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||||||||||||
| Beginning balance | $ | 217,556 | $ | 202,689 | $ | 158,792 | $ | 202,689 | $ | 147,946 | |||||||||||||||||||
| Impact of adoption of new accounting pronouncement (ASU 2022-02) | N/A | N/A | N/A | N/A | (1,794) | ||||||||||||||||||||||||
Balance after impact of adoption of ASU 2022-02 | 217,556 | 202,689 | 158,792 | 202,689 | 146,152 | ||||||||||||||||||||||||
| Provision | 21,823 | 15,805 | 14,195 | 37,628 | 31,790 | ||||||||||||||||||||||||
| Net charge-offs | (13,681) | (938) | (6,154) | (14,619) | (11,109) | ||||||||||||||||||||||||
| Ending balance | $ | 225,698 | $ | 217,556 | $ | 166,833 | $ | 225,698 | $ | 166,833 | |||||||||||||||||||
The following table presents criticized and classified commercial loans at the dates indicated (in thousands):
| June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
CRE | Total Commercial | CRE | Total Commercial | CRE | Total Commercial | ||||||||||||||||||||||||||||||
| Special mention | $ | 138,403 | $ | 265,940 | $ | 139,980 | $ | 357,800 | $ | 97,552 | $ | 319,905 | |||||||||||||||||||||||
| Substandard - accruing | 597,888 | 946,832 | 577,418 | 966,129 | 390,724 | 711,266 | |||||||||||||||||||||||||||||
| Substandard - non-accruing | 54,088 | 131,193 | 12,258 | 83,511 | 13,727 | 86,903 | |||||||||||||||||||||||||||||
| Doubtful | 8,301 | 25,258 | — | 13,822 | — | 19,035 | |||||||||||||||||||||||||||||
| Total | $ | 798,680 | $ | 1,369,223 | $ | 729,656 | $ | 1,421,262 | $ | 502,003 | $ | 1,137,109 | |||||||||||||||||||||||
Total criticized and classified commercial loans declined by $52 million for the quarter ended June 30, 2024. Criticized and classified CRE loans increased by $69 million, the majority of this in the office category, more than offset by declines of $121 million in other commercial categories. As expected in the current environment, there has been some further risk rating migration within the criticized and classified population, primarily within the CRE office category. Rent abatement periods, delays in completing build-out of leased space and in some cases lower occupancy levels contributed to risk rating migration in the office portfolio.
NPAs remain below pre-pandemic levels, although increasing to $176.0 million at June 30, 2024 from $118.9 million at March 31, 2024. Non-performing loans totaled $173.5 million or 0.70% of total loans at June 30, 2024, compared to $115.8 million or 0.48% of total loans at March 31, 2024. Non-performing loans included $39.0 million and $40.0 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.16% of total loans at both June 30, 2024 and March 31, 2024. The $59 million increase in non-performing loans for the quarter ended June 30, 2024 included $50 million of office exposure.
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Net Interest Income
Net interest income for the quarter ended June 30, 2024 was $226.0 million, compared to $214.9 million for the immediately preceding quarter ended March 31, 2024. Interest income increased by $1.8 million for the quarter ended June 30, 2024 compared to the immediately preceding quarter, while interest expense decreased by $9.3 million.
The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.15% to 2.72% for the quarter ended June 30, 2024, from 2.57% for the immediately preceding quarter ended March 31, 2024. Factors impacting the net interest margin for the quarter ended June 30, 2024 were:
•Average non-interest bearing demand deposits increased by $888 million, to 27.5% of average total deposits for the quarter ended June 30, 2024 from 24.7% for the quarter ended March 31, 2024, positively impacting the margin.
•The tax-equivalent yield on loans increased to 5.85% for the quarter ended June 30, 2024, from 5.78% for the quarter ended March 31, 2024. This increase reflects the origination of new loans at higher rates, paydowns of lower rate loans and balance sheet repositioning.
•The average cost of interest bearing deposits increased this quarter, but at a declining rate, to 4.26% for the quarter ended June 30, 2024 from 4.21% for the quarter ended March 31, 2024.
•The average rate paid on FHLB advances increased to 4.28% for the quarter ended June 30, 2024 from 4.18% for the quarter ended March 31, 2024, reflecting maturities of cash flow hedges.
Non-interest income
Non-interest income totaled $24.2 million for the quarter ended June 30, 2024, compared to $26.9 million for the quarter ended March 31, 2024. The $5.8 million decline in lease financing income quarter over quarter was attributable to both lower residual income and the lower balance of operating lease equipment. There was a corresponding decline in depreciation of operating lease equipment. The $3.9 million increase in "other non-interest income" reflected increases in revenue from our customer derivative business and higher loan related and syndication fees.
Earnings Conference Call and Presentation
A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, July 18, 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/BI3a7df9cdebad462ba05970d7dc7dba95. 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 $35.4 billion at June 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.
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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).
Contact
BankUnited, Inc.
Investor Relations:
Leslie N. Lunak, 786-313-1698; llunak@bankunited.com
Source: BankUnited, Inc.
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BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except share and per share data)
| June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Cash and due from banks: | |||||||||||||||||
| Non-interest bearing | $ | 12,631 | $ | 13,773 | $ | 14,945 | |||||||||||
| Interest bearing | 420,821 | 407,443 | 573,338 | ||||||||||||||
| Cash and cash equivalents | 433,452 | 421,216 | 588,283 | ||||||||||||||
Investment securities (including securities reported at fair value of $8,936,449, $8,914,959 and $8,867,354) | 8,946,449 | 8,924,959 | 8,877,354 | ||||||||||||||
| Non-marketable equity securities | 223,159 | 252,609 | 310,084 | ||||||||||||||
| Loans | 24,628,484 | 24,226,300 | 24,633,684 | ||||||||||||||
| Allowance for credit losses | (225,698) | (217,556) | (202,689) | ||||||||||||||
| Loans, net | 24,402,786 | 24,008,744 | 24,430,995 | ||||||||||||||
| Bank owned life insurance | 297,827 | 295,970 | 318,459 | ||||||||||||||
| Operating lease equipment, net | 266,815 | 329,025 | 371,909 | ||||||||||||||
| Goodwill | 77,637 | 77,637 | 77,637 | ||||||||||||||
| Other assets | 779,781 | 795,494 | 786,886 | ||||||||||||||
| Total assets | $ | 35,427,906 | $ | 35,105,654 | $ | 35,761,607 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Liabilities: | |||||||||||||||||
| Demand deposits: | |||||||||||||||||
| Non-interest bearing | $ | 8,065,209 | $ | 7,239,604 | $ | 6,835,236 | |||||||||||
| Interest bearing | 3,771,793 | 3,549,141 | 3,403,539 | ||||||||||||||
| Savings and money market | 11,463,211 | 11,122,916 | 11,135,708 | ||||||||||||||
| Time | 4,463,394 | 5,115,703 | 5,163,995 | ||||||||||||||
| Total deposits | 27,763,607 | 27,027,364 | 26,538,478 | ||||||||||||||
| FHLB advances | 3,285,000 | 3,905,000 | 5,115,000 | ||||||||||||||
| Notes and other borrowings | 708,835 | 708,978 | 708,973 | ||||||||||||||
| Other liabilities | 971,116 | 823,920 | 821,235 | ||||||||||||||
| Total liabilities | 32,728,558 | 32,465,262 | 33,183,686 | ||||||||||||||
| Commitments and contingencies | |||||||||||||||||
| Stockholders' equity: | |||||||||||||||||
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,758,609, 74,772,706 and 74,372,505 shares issued and outstanding | 748 | 748 | 744 | ||||||||||||||
| Paid-in capital | 290,719 | 286,169 | 283,642 | ||||||||||||||
| Retained earnings | 2,709,503 | 2,677,403 | 2,650,956 | ||||||||||||||
| Accumulated other comprehensive loss | (301,622) | (323,928) | (357,421) | ||||||||||||||
| Total stockholders' equity | 2,699,348 | 2,640,392 | 2,577,921 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,427,906 | $ | 35,105,654 | $ | 35,761,607 | |||||||||||
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BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||
| Loans | $ | 350,604 | $ | 347,257 | $ | 326,153 | $ | 697,861 | $ | 634,948 | |||||||||||||||||||
| Investment securities | 123,708 | 124,179 | 120,604 | 247,887 | 239,362 | ||||||||||||||||||||||||
| Other | 8,986 | 10,038 | 16,664 | 19,024 | 29,527 | ||||||||||||||||||||||||
| Total interest income | 483,298 | 481,474 | 463,421 | 964,772 | 903,837 | ||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||
| Deposits | 208,091 | 209,998 | 156,868 | 418,089 | 290,498 | ||||||||||||||||||||||||
| Borrowings | 49,185 | 56,619 | 92,675 | 105,804 | 171,587 | ||||||||||||||||||||||||
| Total interest expense | 257,276 | 266,617 | 249,543 | 523,893 | 462,085 | ||||||||||||||||||||||||
| Net interest income before provision for credit losses | 226,022 | 214,857 | 213,878 | 440,879 | 441,752 | ||||||||||||||||||||||||
| Provision for credit losses | 19,538 | 15,285 | 15,517 | 34,823 | 35,305 | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | 206,484 | 199,572 | 198,361 | 406,056 | 406,447 | ||||||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||
| Deposit service charges and fees | 4,909 | 5,313 | 5,182 | 10,222 | 10,515 | ||||||||||||||||||||||||
| Gain (loss) on investment securities, net | 421 | 775 | 993 | 1,196 | (11,556) | ||||||||||||||||||||||||
| Lease financing | 5,640 | 11,440 | 12,519 | 17,080 | 25,628 | ||||||||||||||||||||||||
| Other non-interest income | 13,215 | 9,349 | 6,793 | 22,564 | 17,435 | ||||||||||||||||||||||||
| Total non-interest income | 24,185 | 26,877 | 25,487 | 51,062 | 42,022 | ||||||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||
| Employee compensation and benefits | 75,588 | 75,920 | 67,414 | 151,508 | 138,465 | ||||||||||||||||||||||||
| Occupancy and equipment | 10,973 | 10,569 | 11,043 | 21,542 | 21,845 | ||||||||||||||||||||||||
| Deposit insurance expense | 8,530 | 13,530 | 7,597 | 22,060 | 15,504 | ||||||||||||||||||||||||
| Professional fees | 4,497 | 2,510 | 3,518 | 7,007 | 6,436 | ||||||||||||||||||||||||
| Technology | 20,567 | 20,315 | 20,437 | 40,882 | 42,163 | ||||||||||||||||||||||||
| Depreciation of operating lease equipment | 7,896 | 9,213 | 11,232 | 17,109 | 22,753 | ||||||||||||||||||||||||
| Other non-interest expense | 29,655 | 27,183 | 23,977 | 56,838 | 50,832 | ||||||||||||||||||||||||
| Total non-interest expense | 157,706 | 159,240 | 145,218 | 316,946 | 297,998 | ||||||||||||||||||||||||
| Income before income taxes | 72,963 | 67,209 | 78,630 | 140,172 | 150,471 | ||||||||||||||||||||||||
| Provision for income taxes | 19,230 | 19,229 | 20,634 | 38,459 | 39,593 | ||||||||||||||||||||||||
| Net income | $ | 53,733 | $ | 47,980 | $ | 57,996 | $ | 101,713 | $ | 110,878 | |||||||||||||||||||
| Earnings per common share, basic | $ | 0.72 | $ | 0.64 | $ | 0.78 | $ | 1.36 | $ | 1.49 | |||||||||||||||||||
| Earnings per common share, diluted | $ | 0.72 | $ | 0.64 | $ | 0.78 | $ | 1.36 | $ | 1.48 | |||||||||||||||||||
7
BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
| Three Months Ended June 30, | Three Months Ended March 31, | Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 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 | $ | 24,290,169 | $ | 353,707 | 5.85 | % | $ | 24,337,440 | $ | 350,441 | 5.78 | % | $ | 24,680,919 | $ | 329,494 | 5.35 | % | |||||||||||||||||||||||||||||||||||
Investment securities (3) | 8,894,517 | 124,572 | 5.60 | % | 8,952,453 | 125,025 | 5.59 | % | 9,369,019 | 121,520 | 5.19 | % | |||||||||||||||||||||||||||||||||||||||||
| Other interest earning assets | 711,586 | 8,986 | 5.08 | % | 763,460 | 10,038 | 5.29 | % | 1,323,025 | 16,664 | 5.05 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest earning assets | 33,896,272 | 487,265 | 5.77 | % | 34,053,353 | 485,504 | 5.72 | % | 35,372,963 | 467,678 | 5.30 | % | |||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (225,161) | (206,747) | (162,463) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest earning assets | 1,571,649 | 1,589,333 | 1,744,693 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 35,242,760 | $ | 35,435,939 | $ | 36,955,193 | |||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing demand deposits | $ | 3,742,071 | $ | 35,249 | 3.79 | % | $ | 3,584,363 | $ | 33,507 | 3.76 | % | $ | 2,772,839 | $ | 18,417 | 2.66 | % | |||||||||||||||||||||||||||||||||||
| Savings and money market deposits | 11,176,000 | 118,945 | 4.28 | % | 11,234,259 | 118,639 | 4.25 | % | 10,285,494 | 88,892 | 3.47 | % | |||||||||||||||||||||||||||||||||||||||||
| Time deposits | 4,750,640 | 53,897 | 4.56 | % | 5,231,178 | 57,852 | 4.45 | % | 5,494,631 | 49,559 | 3.62 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing deposits | 19,668,711 | 208,091 | 4.26 | % | 20,049,800 | 209,998 | 4.21 | % | 18,552,964 | 156,868 | 3.39 | % | |||||||||||||||||||||||||||||||||||||||||
| FHLB advances | 3,764,286 | 40,032 | 4.28 | % | 4,570,220 | 47,496 | 4.18 | % | 7,288,187 | 83,429 | 4.59 | % | |||||||||||||||||||||||||||||||||||||||||
| Notes and other borrowings | 711,167 | 9,153 | 5.15 | % | 709,017 | 9,123 | 5.15 | % | 719,368 | 9,246 | 5.14 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 24,144,164 | 257,276 | 4.28 | % | 25,329,037 | 266,617 | 4.23 | % | 26,560,519 | 249,543 | 3.77 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest bearing demand deposits | 7,448,633 | 6,560,926 | 7,067,053 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-interest bearing liabilities | 960,691 | 906,266 | 798,279 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 32,553,488 | 32,796,229 | 34,425,851 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' equity | 2,689,272 | 2,639,710 | 2,529,342 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,242,760 | $ | 35,435,939 | $ | 36,955,193 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 229,989 | $ | 218,887 | $ | 218,135 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate spread | 1.49 | % | 1.49 | % | 1.53 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 2.72 | % | 2.57 | % | 2.47 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1) On a tax-equivalent basis where applicable
(2) Annualized
(3) At fair value except for securities held to maturity
8
BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Average Balance | Interest (1) | Yield/ Rate (1)(2) | Average Balance | Interest (1) | Yield/ Rate (1)(2) | ||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||||||||||||||
Loans | $ | 24,313,806 | $ | 704,149 | 5.82 | % | $ | 24,702,487 | $ | 641,617 | 5.22 | % | |||||||||||||||||||||||
Investment securities (3) | 8,923,485 | 249,596 | 5.59 | % | 9,519,928 | 241,187 | 5.07 | % | |||||||||||||||||||||||||||
| Other interest earning assets | 737,523 | 19,024 | 5.19 | % | 1,182,077 | 29,527 | 5.04 | % | |||||||||||||||||||||||||||
| Total interest earning assets | 33,974,814 | 972,769 | 5.74 | % | 35,404,492 | 912,331 | 5.18 | % | |||||||||||||||||||||||||||
| Allowance for credit losses | (215,954) | (156,798) | |||||||||||||||||||||||||||||||||
| Non-interest earning assets | 1,580,491 | 1,768,714 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 35,339,351 | $ | 37,016,408 | |||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Interest bearing demand deposits | $ | 3,663,217 | $ | 68,756 | 3.77 | % | $ | 2,570,422 | $ | 29,291 | 2.30 | % | |||||||||||||||||||||||
| Savings and money market deposits | 11,205,130 | 237,584 | 4.26 | % | 11,169,671 | 180,287 | 3.25 | % | |||||||||||||||||||||||||||
| Time deposits | 4,990,909 | 111,749 | 4.50 | % | 5,013,230 | 80,920 | 3.26 | % | |||||||||||||||||||||||||||
| Total interest bearing deposits | 19,859,256 | 418,089 | 4.23 | % | 18,753,323 | 290,498 | 3.12 | % | |||||||||||||||||||||||||||
| Federal funds purchased | — | — | — | % | 70,150 | 1,582 | 4.51 | % | |||||||||||||||||||||||||||
FHLB advances | 4,167,253 | 87,528 | 4.22 | % | 6,878,867 | 151,467 | 4.44 | % | |||||||||||||||||||||||||||
| Notes and other borrowings | 710,092 | 18,276 | 5.15 | % | 721,376 | 18,538 | 5.14 | % | |||||||||||||||||||||||||||
| Total interest bearing liabilities | 24,736,601 | 523,893 | 4.26 | % | 26,423,716 | 462,085 | 3.53 | % | |||||||||||||||||||||||||||
| Non-interest bearing demand deposits | 7,004,780 | 7,261,557 | |||||||||||||||||||||||||||||||||
| Other non-interest bearing liabilities | 933,479 | 809,785 | |||||||||||||||||||||||||||||||||
| Total liabilities | 32,674,860 | 34,495,058 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 2,664,491 | 2,521,350 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 35,339,351 | $ | 37,016,408 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 448,876 | $ | 450,246 | |||||||||||||||||||||||||||||||
| Interest rate spread | 1.48 | % | 1.65 | % | |||||||||||||||||||||||||||||||
| Net interest margin | 2.64 | % | 2.55 | % | |||||||||||||||||||||||||||||||
(1) On a tax-equivalent basis where applicable
(2) Annualized
(3) At fair value except for securities held to maturity
9
BANKUNITED, INC. AND SUBSIDIARIES
EARNINGS PER COMMON SHARE
(In thousands except share and per share amounts)
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| c | June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||||||||||
| Basic earnings per common share: | |||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||
| Net income | $ | 53,733 | $ | 47,980 | $ | 57,996 | $ | 101,713 | $ | 110,878 | |||||||||||||||||||
Distributed and undistributed earnings allocated to participating securities | (748) | (680) | (881) | (1,429) | (1,679) | ||||||||||||||||||||||||
| Income allocated to common stockholders for basic earnings per common share | $ | 52,985 | $ | 47,300 | $ | 57,115 | $ | 100,284 | $ | 109,199 | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Weighted average common shares outstanding | 74,762,498 | 74,509,107 | 74,424,631 | 74,635,803 | 74,588,904 | ||||||||||||||||||||||||
| Less average unvested stock awards | (1,110,233) | (1,127,838) | (1,183,039) | (1,119,035) | (1,188,430) | ||||||||||||||||||||||||
| Weighted average shares for basic earnings per common share | 73,652,265 | 73,381,269 | 73,241,592 | 73,516,768 | 73,400,474 | ||||||||||||||||||||||||
| Basic earnings per common share | $ | 0.72 | $ | 0.64 | $ | 0.78 | $ | 1.36 | $ | 1.49 | |||||||||||||||||||
| Diluted earnings per common share: | |||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||
| Income allocated to common stockholders for basic earnings per common share | $ | 52,985 | $ | 47,300 | $ | 57,115 | $ | 100,284 | $ | 109,199 | |||||||||||||||||||
Adjustment for earnings reallocated from participating securities | 2 | 1 | 1 | 4 | 5 | ||||||||||||||||||||||||
| Income used in calculating diluted earnings per common share | $ | 52,987 | $ | 47,301 | $ | 57,116 | $ | 100,288 | $ | 109,204 | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Weighted average shares for basic earnings per common share | 73,652,265 | 73,381,269 | 73,241,592 | 73,516,768 | 73,400,474 | ||||||||||||||||||||||||
| Dilutive effect of certain share-based awards | 365,988 | 255,824 | 179,318 | 310,906 | 312,708 | ||||||||||||||||||||||||
Weighted average shares for diluted earnings per common share | 74,018,253 | 73,637,093 | 73,420,910 | 73,827,674 | 73,713,182 | ||||||||||||||||||||||||
| Diluted earnings per common share | $ | 0.72 | $ | 0.64 | $ | 0.78 | $ | 1.36 | $ | 1.48 | |||||||||||||||||||
10
BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
| At or for the Three Months Ended | At or for the Six Months Ended | ||||||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||||||||||||
Financial ratios (4) | |||||||||||||||||||||||||||||
| Return on average assets | 0.61 | % | 0.54 | % | 0.63 | % | 0.58 | % | 0.60 | % | |||||||||||||||||||
| Return on average stockholders’ equity | 8.0 | % | 7.3 | % | 9.2 | % | 7.7 | % | 8.9 | % | |||||||||||||||||||
Net interest margin (3) | 2.72 | % | 2.57 | % | 2.47 | % | 2.64 | % | 2.55 | % | |||||||||||||||||||
| Loans to deposits | 88.7 | % | 89.6 | % | 95.3 | % | 88.7 | % | 95.3 | % | |||||||||||||||||||
| Tangible book value per common share | $ | 35.07 | $ | 34.27 | $ | 32.90 | $ | 35.07 | $ | 32.90 | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||
| Asset quality ratios | |||||||||||||||||
Non-performing loans to total loans (1)(5) | 0.70 | % | 0.48 | % | 0.52 | % | |||||||||||
Non-performing assets to total assets (2)(5) | 0.50 | % | 0.34 | % | 0.37 | % | |||||||||||
| Allowance for credit losses to total loans | 0.92 | % | 0.90 | % | 0.82 | % | |||||||||||
Allowance for credit losses to total commercial(6) | 1.42 | % | 1.42 | % | 1.29 | % | |||||||||||
Allowance for credit losses to non-performing loans (1)(5) | 130.12 | % | 187.92 | % | 159.54 | % | |||||||||||
Net charge-offs to average loans(4) | 0.12 | % | 0.02 | % | 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 three and six month periods as applicable.
(5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $39.0 million or 0.16% of total loans and 0.11% of total assets at June 30, 2024, $40.0 million or 0.16% of total loans and 0.11% of total assets at March 31, 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.
| June 30, 2024 | March 31, 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 | 8.2 | % | 9.6 | % | 8.1 | % | 9.3 | % | 7.9 | % | 9.1 | % | 5.0 | % | |||||||||||||||||||||||||||
| Common Equity Tier 1 ("CET1") risk-based capital | 11.6 | % | 13.5 | % | 11.6 | % | 13.4 | % | 11.4 | % | 13.1 | % | 6.5 | % | |||||||||||||||||||||||||||
| Total risk-based capital | 13.6 | % | 14.4 | % | 13.7 | % | 14.3 | % | 13.4 | % | 13.9 | % | 10.0 | % | |||||||||||||||||||||||||||
| Tangible Common Equity/Tangible Assets | 7.4 | % | N/A | 7.3 | % | N/A | 7.0 | % | N/A | N/A | |||||||||||||||||||||||||||||||
11
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):
| June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||||||||
| Total stockholders’ equity | $ | 2,699,348 | $ | 2,640,392 | $ | 2,526,310 | |||||||||||
| Less: goodwill and other intangible assets | 77,637 | 77,637 | 77,637 | ||||||||||||||
| Tangible stockholders’ equity | $ | 2,621,711 | $ | 2,562,755 | $ | 2,448,673 | |||||||||||
| Common shares issued and outstanding | 74,758,609 | 74,772,706 | 74,429,948 | ||||||||||||||
| Book value per common share | $ | 36.11 | $ | 35.31 | $ | 33.94 | |||||||||||
| Tangible book value per common share | $ | 35.07 | $ | 34.27 | $ | 32.90 | |||||||||||
12
July 18, 2024 Q2 2024 – Supplemental Information 1 Exhibit 99.2
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the current views of BankUnited, Inc. (“BankUnited,” “BKU” or the “Company”) 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 presentation 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). 2
Quarterly Highlights 3
Improve Asset Mix Improve Funding Profile 2 Maintain Robust Liquidity and Capital Net Interest Margin Execution on Near-term Strategic Priorities 4 3 4 1 • Non-brokered deposits grew by $1.3 billion • NIDDA up $826 million; improved to 29% of deposits • Average NIDDA up $888 million • Total deposits up $736 million • Wholesale funding down $1.2 billion • Core C&I and CRE loans grew by $589 million • Resi declined by $212 million • Net interest margin increased by 0.15%, to 2.72% from 2.57% • Cost of deposits down to 3.09% from 3.18% • Same day available liquidity $14.9 billion • Available liquidity 139% of uninsured, uncollateralized deposits; 61% of deposits insured or collateralized. • CET 1 ratio of 11.6%; TCE/TA increased to 7.4% Manage credit • ACL/Loans increased to 0.92%; commercial ACL remained at 1.42% • Annualized net charge-offs 0.12% • NPA ratio excluding guaranteed SBA loans 0.39% 5 Manage Expenses • Expenses stable quarter-over-quarter 6
Topics of Current Interest Capital(1) • CET1 ratio 11.6% ; TCE/TA 7.4% • Book value and tangible book value per share grew to $36.11 and $35.07 Deposits and Funding • Non-brokered deposits grew $1.3 billion • Non-interest bearing DDA 29% of total deposits; up $826 million for the quarter • Total deposits grew by $736 million • Wholesale funding down by $1.2 billion Asset Quality • Low NPA ratio of 0.50% at June 30; 0.39% excluding guaranteed portion of non-accrual SBA loans • Annualized net charge-off rate of 0.12% • Total criticized/classified assets declined $52 million High Quality CRE Portfolio • Wtd average DSCR 1.77; wtd average LTV 56.0%; 56% Florida • CRE office wtd average DSCR 1.59; wtd average LTV 65.8%; 58% Florida • CRE office reserve 2.47% at June 30 • CRE to total loans 24% ; CRE to total risk based capital 165% • $51 million in non-performing CRE excluding non-performing SBA guaranteed loans 1. Tangible book value per share is a non-GAAP financial measure. See section entitled “Non-GAAP Financial Measures” on page 28 5 Net Interest Margin • Net interest margin increased to 2.72% from 2.57% for prior quarter • Cost of deposits declined; 3.09% for Q2 compared to 3.18% for Q1;
Highlights from Second Quarter Earnings Change From ($ in millions, except per share data) Q2’24 Q1’24 Q2’23 Q1’24 Q2’23 Key Highlights Net Interest Income $226 $215 $214 $11 $12 5% QoQ growth in net interest income Provision for Credit Losses $20 $15 $16 $5 $4 Total Non-interest Income $24 $27 $25 ($3) ($1) Total Non-interest Expense $158 $159 $145 ($1) $13 Net Income $54 $48 $58 $6 ($4) EPS $0.72 $0.64 $0.78 $0.08 ($0.06) Period-end Core C&I and CRE loans $15,090 $14,501 $14,104 $589 $986 Period-end Loans $24,628 $24,226 $24,630 $402 ($2) Core commercial growth partially offset by strategic resi decline Period-end Non-interest DDA $8,065 $7,240 $7,305 $826 $760 Double digit growth in NIDDA quarter over quarter Period-end Deposits $27,764 $27,027 $25,839 $736 $1,925 $1.3 billion growth in non-brokered deposits Loans to Deposits 88.7% 89.6% 95.3% (0.9%) (6.6%) CET1 11.6% 11.6% 11.2% —% 0.4% Total Capital 13.6% 13.7% 13.0% (0.1%) 0.6% Yield on Loans 5.85% 5.78% 5.35% 0.07% 0.50% Yield on Securities 5.60% 5.59% 5.19% 0.01% 0.41% Cost of Deposits 3.09% 3.18% 2.46% (0.09%) 0.63% First decline since Q1 2022 Net Interest Margin 2.72% 2.57% 2.47% 0.15% 0.25% Expanding trend in margin expected over course of 2024 Non-performing Assets to Total Assets(1) 0.50% 0.34% 0.34% 0.16% 0.16% Allowance for Credit Losses to Total Loans 0.92% 0.90% 0.68% 0.02% 0.24% Commercial Allowance for Credit Losses to Total Commercial Loans(3) 1.42% 1.42% 1.08% —% 0.34% Net Charge-offs to Average Loans(2) 0.12% 0.02% 0.09% 0.10% 0.03% 1. Includes guaranteed portion of non-accrual SBA loans. 2. Annualized. 3. For purposes of this ratio, commercial loans includes the core C&I and CRE sub-segments as well as franchise and equipment finance. Due to their unique risk profiles, MWL and municipal finance are excluded from this ratio. 6
Deposits 7
Deposit Trends ($ in millions) $7,347 $4,807 $3,384 $4,268 $5,164 $5,116 $4,463 $10,622 $12,660 $13,369 $13,061 $11,136 $11,123 $11,463 $2,131 $3,020 $3,709 $2,142 $3,403 $3,548 $3,773 $4,295 $7,009 $8,976 $8,038 $6,835 $7,240 $8,065 $24,395 $27,496 $29,438 $27,509 $26,538 $27,027 $27,764 Non-interest Demand Interest Demand Money Market / Savings Time 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 Quarterly Cost of Deposits 1.48% 0.43% 0.19% 1.42% 2.96% 3.18% 3.09% Non-interest bearing as a % of Total Deposits 17.6% 25.5% 30.5% 29.2% 25.8% 26.8% 29.1% 8
Cost of Funds Trend 9 1.42% 0.36% 0.16% 1.92% 3.18% 3.17% 3.09% 1.75% 0.25% 0.25% 4.50% 5.50% 5.50% 5.50% Spot APY - Total Deposits Target Federal Funds Rate Upper Bound 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 (1.00)% —% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Spot Average Annual Percentage Yield (“APY”) At December 31, 2019 At December 31, 2020 At December 31, 2021 At December 31, 2022 At December 31, 2023 At March 31, 2024 At June 30, 2024 Total non-maturity deposits 1.11% 0.29% 0.14% 1.83% 2.87% 2.85% 2.80% Total interest-bearing deposits 1.71% 0.48% 0.23% 2.66% 4.20% 4.29% 4.29% Total deposits 1.42% 0.36% 0.16% 1.92% 3.18% 3.17% 3.09% Spread Between Fed Funds Upper Bound and Spot APY of Total Deposits
Loans and the Allowance for Credit Losses 10
11 Prudently Underwritten and Well-Diversified Loan Portfolio At June 30, 2024 ($ in millions) Loan Portfolio Over Time $5,661 $6,348 $8,368 $8,901 $8,209 $8,057 $7,845 $7,493 $6,896 $5,702 $5,700 $5,819 $5,839 $5,952 $6,718 $6,448 $6,735 $8,305 $8,907 $8,661 $9,136 $768 $1,259 $1,092 $525 $433 $456 $539 $2,515 $2,915 $1,868 $1,455 $1,266 $1,213 $1,156$23,155 $23,866 $23,765 $24,886 $24,634 $24,226 $24,628 Other (1) Mortgage Warehouse Lending C&I CRE Residential 12/31/19 12/31/20 12/31/21 12/31/22 12/31/2023 03/31/24 06/30/24 1. Includes Pinnacle municipal finance, franchise and equipment finance, and PPP.
High Quality CRE Portfolio At June 30, 2024 ($ in millions) Property Type Balance % of Total CRE FL NY Tri State Other Wtd. Avg. DSCR Wtd. Avg. LTV Office $ 1,791 30 % 58 % 24 % 18 % 1.59 65.8 % Warehouse/Industrial 1,295 22 % 58 % 9 % 33 % 2.02 50.4 % Multifamily 825 14 % 48 % 52 % — % 1.93 48.2 % Retail 857 14 % 49 % 32 % 19 % 1.63 59.0 % Hotel 514 9 % 74 % 9 % 17 % 1.73 44.1 % Construction and Land 585 10 % 44 % 50 % 6 % NA NA Other 85 1 % 70 % 15 % 15 % 1.85 49.5 % $ 5,952 100 % 56 % 27 % 17 % 1.77 56.0 % 12 Florida NY Tri State Property Type Wtd. Avg. DSCR Wtd. Avg. LTV Wtd. Avg. DSCR Wtd. Avg. LTV Office 1.58 64.8 % 1.63 61.2 % Warehouse/Industrial 2.17 48.4 % 1.81 36.6 % Multifamily 2.46 45.4 % 1.44 50.8 % Retail 1.80 58.4 % 1.38 59.9 % Hotel 1.77 41.9 % 1.88 32.5 % Other 2.05 47.8 % 1.38 65.4 % 1.91 54.1 % 1.54 54.6 % Construction and land includes $87 million of office exposure, $84 million in NY
Manageable CRE Maturity Risk At June 30, 2024 ($ in millions) Property Type Maturing in the Next 12 Months % Maturing in the Next 12 Months Fixed Rate or Swapped Maturing in the Next 12 Months Fixed Rate to Borrower Maturing in Next 12 mos. as a % of Total Portfolio Office $ 402 22 % $ 191 11 % Warehouse/Industrial 80 6 % 56 4 % Multifamily 90 11 % 29 3 % Retail 100 12 % 54 6 % Hotel 42 8 % 17 3 % Construction and Land 279 48 % — — % Other 19 23 % 19 23 % $ 1,012 17 % $ 366 6 % 13 Just 6% of total CRE portfolio fixed and maturing in the next 12 months Property Type 2024 2025 2026 2027 2028 Thereafter Total Office $ 221 $ 442 $ 424 $ 226 $ 146 $ 332 $ 1,791 Warehouse/Industrial 53 179 404 285 144 230 1,295 Multifamily 15 158 164 158 107 223 825 Retail 68 150 230 100 186 123 857 Hotel 41 44 243 31 56 99 514 Construction and Land 132 219 100 61 — 73 585 Other 12 7 27 10 4 25 85 $ 542 $ 1,199 $ 1,592 $ 871 $ 643 $ 1,105 $ 5,952 Maturity Distribution of CRE Loans
CRE Peer Benchmarking 14 35% 35% 24% Peer Median Peer Mean BankUnited, N.A —% 5% 10% 15% 20% 25% 30% 35% 40% 222% 216% 165% —% 50% 100% 150% 200% 250% 1. BKU information as of June 30, 2024 2. CRE peer median information based on March 31, 2024 Call Report data (most recent date available) for banks with total assets between $10 billion and $100 billion CRE / Total Loans(1)(2) CRE / Total Risk Based Capital(1)(2)
CRE Office Portfolio - Additional Information At June 30, 2024 15 • 17% or $309 million of the total office portfolio is medical office • Rent rollover in next 12 months approximately 9% of the total office portfolio; 10% for FL and 6% in NY Tri State • Manhattan stabilized portfolio has approximately 96% occupancy and rent rollover in the next 12 months of 6% • The Florida portfolio is predominantly suburban 43% 20% 20% 12% 4% 1% Manhattan NY Tri-State Other Long Island Queens Brooklyn Bronx 29% 22%21% 8% 10% 10% Tampa Orlando Boca/Palm Beach Broward Miami-Dade Other NY Tri-State by Sub-Market Florida by Sub-Market
Granular, Diversified Commercial & Industrial Portfolio At June 30, 2024 ($ in millions) Industry Balance(1) % of Portfolio Finance and Insurance $ 1,678 18.4 % Manufacturing 765 8.4 % Educational Services 736 8.1 % Health Care and Social Assistance 716 7.8 % Utilities 688 7.5 % Information 665 7.3 % Wholesale Trade 648 7.1 % Transportation and Warehousing 509 5.6 % Real Estate and Rental and Leasing 502 5.5 % Construction 469 5.1 % Retail Trade 325 3.6 % Public Administration 301 3.3 % Professional, Scientific, and Technical Services 293 3.2 % Other Services (except Public Administration) 266 2.9 % Arts, Entertainment, and Recreation 199 2.2 % Administrative and Support and Waste Management 183 2.0 % Accommodation and Food Services 158 1.7 % Other 36 0.3 % $ 9,137 100.0 % 161. Includes $2.0 billion of owner-occupied real estate Geographic Distribution Florida 32% New York Tri-State 34% Other 34%
$217.6 $24.1 $(3.0) $(13.7) $12.3 $(11.6) $225.7 Drivers of Change in the ACL - Current Quarter ($ in millions) Risk Rating Migration and Specific Reserves Economic Forecast Net Charge- Offs ACL 06/30/24 ACL 03/31/24 0.92%0.90%% of Total Loans 17 Change in Qualitative Overlay Portfolio and Other • New loans net of pay- downs • Portfolio and Assumption changes • Primarily related to one C&I relationship • Shift related to items now captured in quantitative modeling. • Current market adjustment • Changes to forward path of forecast • Scenario weighting
Allocation of the ACL ($ in millions) December 31, 2023 March 31, 2024 June 30, 2024 Balance % of Loans Balance % of Loans Balance % of Loans Commerical: Commercial real estate $ 41.3 0.71 % $ 61.1 1.05 % $ 69.9 1.17 % Commercial and industrial 142.4 1.60 % 140.0 1.62 % 143.2 1.57 % Franchise and equipment finance 10.9 2.85 % 9.4 2.71 % 5.9 1.93 % Total commercial 194.6 1.29 % 210.5 1.42 % 219.0 1.42 % Pinnacle - municipal finance 0.2 0.03 % 0.2 0.03 % 0.2 0.03 % Residential and mortgage warehouse lending 7.9 0.09 % $ 6.9 0.08 % 6.5 0.08 % Allowance for credit losses $ 202.7 0.82 % $ 217.6 0.90 % $ 225.7 0.92 % Asset Quality Ratios December 31, 2023 March 31, 2024 June 30, 2024 Non-performing loans to total loans(1) 0.52 % 0.48 % 0.70 % Non-performing assets to total assets(1) 0.37 % 0.34 % 0.50 % Allowance for credit losses to non-performing loans(1) 159.54 % 187.92 % 130.12 % Net charge-offs to average loans(2) 0.09 % 0.02 % 0.12 % 18 1. Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $39.0 million, $40.0 million and $41.8 million or 0.16%, 0.16% and 0.17% of total loans and 0.11%, 0.11% and 0.12% of total assets at June 30, 2024, March 31, 2024 and December 31, 2023, respectively. 2. Annualized for the three months ended March 31, 2024 and the six months ended June 30, 2024. Office Portfolio ACL: 2.47% at June 30, 2024, compared to 2.26% at March 31, 2024 and 1.18% at December 31, 2023.
Asset Quality Metrics 19 Non-Performing Loans to Total Loans Non-Performing Assets to Total Assets Net Charge-offs to Average Loans(1) 0.88% 1.02% 0.87% 0.42% 0.52% 0.48% 0.70% 0.68% 0.80% 0.68% 0.26% 0.35% 0.32% 0.54% Incl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA loans 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 —% 0.25% 0.50% 0.75% 1.00% 1.25% 0.63% 0.71% 0.58% 0.29% 0.37% 0.34% 0.50% 0.49% 0.56% 0.45% 0.18% 0.25% 0.23% 0.39% Incl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA loans 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 —% 0.25% 0.50% 0.75% 1.00% 1.25% 0.05% 0.26% 0.29% 0.22% 0.09% 0.02% 0.12% 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 —% 0.20% 0.40% 0.60% 1. Annualized for the six months ended June 30, 2024 and the three months ended March 31, 2024.
Non-Performing Loans by Portfolio Segment ($ in millions) 20 $205 $244 $206 $105 $127 $116 $173 $19 $29 $29 $21 $21 $18 $16 $24 $60 $30 $51 $65 $43 $58 $22 $34 $30 $43 $35 $45 $33 $13 $24 $23 $19 $46 $51 $46 $40 $42 $40 $39 $16 $16 $10 $9 $6 $5 $5 Non-Guaranteed Portion of SBA Guaranteed Portion of SBA Franchise and Equipment C&I CRE Residential and Other Consumer 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 NPLs Remain Below Pre-Pandemic Levels
Criticized and Classified Loans ($ in millions) 21 Commercial Real Estate(1) Commercial(1)(2) Special Mention Substandard Accruing Substandard Non-accruing and Doubtful 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 $— $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 $— $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 1. Excludes SBA 2. Includes Pinnacle, franchise and equipment finance, and MWL
Criticized and Classified CRE Loans by Property Type ($ in millions) 22 March 31, 2024 $123 $55 $96 $292 $144 $3 $17 $116 $55 $89 $146 $77 $3 $16 December 31, 2023 $99 $54 $1 $93 $374 $152 $9 $17 Multifamily Hotel Industrial/Warehouse Retail Office Construction & Land Other SBA June 30, 2024 Construction and land category includes $84 million of office exposure at 6/30/24
Asset Quality - Delinquencies ($ in millions) 23 Commercial(1) CRE 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 $— $20 $40 $60 $80 $100 Residential(2) 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 $— $20 $40 $60 $80 $100 30-59 Days PD 60-89 Days PD 90 Days+ PD 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 03/31/24 06/30/24 $— $20 $40 $60 $80 $100 1. Includes Pinnacle, franchise finance and equipment finance 2. Excludes government insured residential loans
Residential Portfolio Overview At June 30, 2024 24 Residential Loan Product Type FICO Distribution(1) Breakdown by LTV(1) 1. Excludes government insured residential loans. FICOs are refreshed routinely. LTVs are typically based on valuation at origination Prior 22% 2020 12% 2021 43% 2022 16% 2023 5% 2024 2% >759 76% 720-759 14% <720 or NA 10% Breakdown by Vintage(1) 60% or less 34% 61% - 70% 25% 71% - 80% 40% More than 80% 1% 30 Yr Fixed 32% 15 & 20 Year Fixed 13% 10/1 ARM 12% 5/1 & 7/1 ARM 27% Formerly Covered 1% Govt Insured 15% High quality residential portfolio consists primarily of high FICO, low LTV, prime jumbo mortgages with de-minimis charge-offs since inception as well as government insured loans
Investment Portfolio 25
High Quality, Short-Duration Securities Portfolio ($ in millions) December 31, 2023 March 31, 2024 June 30, 2024 Portfolio Net Unrealized Loss Fair Value Net Unrealized Loss Fair Value Net Unrealized Gain/(Loss) Fair Value US Government and Agency $ (115) $ 2,656 $ (110) $ 2,884 $ (97) $ 2,999 Private label RMBS and CMOs (301) 2,296 (294) 2,250 (285) 2,223 Private label CMBS (84) 2,199 (69) 2,122 (60) 1,991 Single family real estate-backed securities (18) 366 (15) 341 (14) 333 CLOs (10) 1,113 (1) 1,077 3 1,159 Other (7) 205 (9) 207 (10) 203 $ (535) $ 8,835 $ (498) $ 8,881 $ (463) $ 8,908 Portfolio Composition US Government and Agency 34% Private label RMBS and CMOs 25% Private label CMBS 22% Single family real estate- backed securities 4% CLOs 13% Other 2% Rating Distribution GOV 34% AAA 57% AA 7% A 1% NR 1% • Unrealized losses continue to decline • No expected credit losses on AFS securities • AFS portfolio duration of 1.82; approximately 69% of the portfolio floating rate • HTM securities total $10 million 26
High Quality, Short-Duration Securities Portfolio At June 30, 2024 Strong credit enhancement levels - no SASB(1) exposure Private Label RMBS Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 1.3 92.0 17.8 2.2 AA 20.7 35.0 27.0 5.3 A 32.9 32.9 32.9 5.4 Wtd. Avg. 2.3 89.1 18.3 2.4 Private Label CMBS Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 30.5 87.6 46.0 7.2 AA 31.5 74.1 39.4 7.7 A 25.1 51.6 38.6 9.1 Wtd. Avg. 30.4 84.7 44.9 7.4 CLOs Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 41.3 92.8 47.6 15.0 AA 30.8 38.2 33.4 13.1 A 35.0 35.0 35.0 22.1 Wtd. Avg. 40.0 85.7 45.8 14.9 AAA 94% AA 5% A 1% AAA 84% AA 12% A 4% AAA 87% AA 12% A 1% 271. Single-asset, single-borrower
Non-GAAP Financial Measures 28 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 June 30, 2024 (in thousands except share and per share data): June 30, 2024 Total stockholders’ equity (GAAP) $ 2,699,348 Less: goodwill 77,637 Tangible stockholders’ equity (non-GAAP) $ 2,621,711 Common shares issued and outstanding 74,758,609 Book value per common share (GAAP) $ 36.11 Tangible book value per common share (non-GAAP) $ 35.07