BankUnited Q2 2024 10-Q Filed

Ticker: BKU · Form: 10-Q · Filed: Aug 5, 2024 · CIK: 1504008

Sentiment: neutral

Topics: 10-Q, financials, banking

TL;DR

BankUnited Q2 10-Q is in: Focus on loan/deposit interest and overall financial health.

AI Summary

BankUnited, Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance, including interest income and expenses related to loans, leases, and deposits. Key financial data points and disclosures relevant to its operations as a federally chartered savings institution are presented.

Why It Matters

This filing provides insight into BankUnited's financial health and operational performance for the second quarter of 2024, impacting investor and stakeholder confidence.

Risk Assessment

Risk Level: medium — As a financial institution, BankUnited is subject to various market, credit, and regulatory risks inherent in the banking sector.

Key Numbers

Key Players & Entities

FAQ

What was BankUnited's net interest income for the period ending June 30, 2024?

The provided text does not contain specific figures for net interest income, but it references 'InterestExpenseBorrowings', 'InterestExpenseDeposits', and 'InterestAndFeeIncomeLoansAndLeases'.

What is the total amount of loans and leases receivable for BankUnited as of June 30, 2024?

The filing references 'LoansAndLeasesReceivableNetOfDeferredIncome' but does not provide a specific dollar amount in the excerpt.

What are the total assets and liabilities reported by BankUnited for the period?

The filing mentions 'OtherAssets' and 'OtherLiabilities' but does not provide aggregate figures for total assets or liabilities in this excerpt.

What is the primary business classification for BankUnited, Inc. according to the SIC code?

BankUnited, Inc. is classified under SIC code 6035, which corresponds to 'SAVINGS INSTITUTION, FEDERALLY CHARTERED'.

In which state was BankUnited, Inc. incorporated?

BankUnited, Inc. was incorporated in Delaware (DE).

Filing Stats: 4,494 words · 18 min read · ~15 pages · Grade level 17 · Accepted 2024-08-05 16:51:38

Key Financial Figures

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

ITEM 1. Financial Statements (Unaudited) Consolidated Balance Sheets 1 Consolidated Statements of Income 2 Consolidated Statements of Comprehensive Income 3 Consolidated Statements of Cash Flows 4 Consolidated Statements of Stockholders' Equity 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 35

Quantitative and Qualitative Disclosures About Market Risk

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 67

Controls and Procedures

ITEM 4. Controls and Procedures 67

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

ITEM 1. Legal Proceedings 67

Risk Factors

ITEM 1A. Risk Factors 67

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 67 ITEM 5. Other Information 67

Exhibits

ITEM 6. Exhibits 68

SIGNATURES

SIGNATURES 69 i GLOSSARY OF DEFINED TERMS The following acronyms and terms may be used throughout this Form 10-Q, including the consolidated financial statements and related notes. ACL Allowance for credit losses AFS Available for sale ALCO Asset Liability Committee ALM Asset Liability Management AOCI Accumulated other comprehensive income APY Annual Percentage Yield ARM Adjustable rate mortgage ASU Accounting Standards Update BKU BankUnited, Inc. BOLI Bank Owned Life Insurance BankUnited BankUnited, National Association The Bank BankUnited, National Association Bridge Bridge Funding Group, Inc. Buyout loans FHA and VA insured mortgages from third party servicers who have exercised their right to purchase these loans out of GNMA securitizations CD Certificate of Deposit CECL Current expected credit losses CET1 Common Equity Tier 1 capital C&I Commercial and Industrial loans, including owner-occupied commercial real estate CLO Collateralized loan obligations CMBS Commercial mortgage-backed securities CMOs Collateralized mortgage obligations CRE Commercial real estate loans, including non-owner occupied commercial real estate and construction and land DSCR Debt Service Coverage Ratio EVE Economic value of equity FDIA Federal Deposit Insurance Act FDIC Federal Deposit Insurance Corporation FHA Federal Housing Administration FHLB Federal Home Loan Bank FICO Fair Isaac Corporation (credit score) FRB Federal Reserve Bank GAAP U.S. generally accepted accounting principles GDP Gross Domestic Product GNMA Government National Mortgage Association HTM Held to maturity ISDA International Swaps and Derivatives Association LGD Loss Given Default LIHTC Low Income Housing Tax Credits LTV Loan-to-value MBS Mortgage-backed securities MSA Metropolitan Statistical Area MWL Mortgage warehouse lending NRSRO Nationally recognized statistical rating organization OREO Other real estate owned ii PCD Purchased credi

Financial Statements and Supplementary Data

Item 1. Financial Statements and Supplementary Data BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands, except share and per share data) June 30, 2024 December 31, 2023 ASSETS Cash and due from banks: Non-interest bearing $ 12,631 $ 14,945 Interest bearing 420,821 573,338 Cash and cash equivalents 433,452 588,283 Investment securities (including securities reported at fair value of $ 8,936,449 and $ 8,867,354 ) 8,946,449 8,877,354 Non-marketable equity securities 223,159 310,084 Loans 24,628,484 24,633,684 Allowance for credit losses ( 225,698 ) ( 202,689 ) Loans, net 24,402,786 24,430,995 Bank owned life insurance 297,827 318,459 Operating lease equipment, net 266,815 371,909 Goodwill 77,637 77,637 Other assets 779,781 786,886 Total assets $ 35,427,906 $ 35,761,607 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Demand deposits: Non-interest bearing $ 8,065,209 $ 6,835,236 Interest bearing 3,771,793 3,403,539 Savings and money market 11,463,211 11,135,708 Time 4,463,394 5,163,995 Total deposits 27,763,607 26,538,478 FHLB advances 3,285,000 5,115,000 Notes and other borrowings 708,835 708,973 Other liabilities 971,116 821,235 Total liabilities 32,728,558 33,183,686 Commitments and contingencies Stockholders' equity: Common stock, par value $ 0.01 per share, 400,000,000 shares authorized; 74,758,609 and 74,372,505 shares issued and outstanding 748 744 Paid-in capital 290,719 283,642 Retained earnings 2,709,503 2,650,956 Accumulated other comprehensive loss ( 301,622 ) ( 357,421 ) Total stockholders' equity 2,699,348 2,577,921 Total liabilities and stockholders' equity $ 35,427,906 $ 35,761,607 1 The accompanying notes are an integral part of these consolidated financial statements BANKUNITED, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED June 30, 2024 Note 1 Basis of Presentation and Summary of Significant Accounting Policies BankUnited, Inc. is a national bank holding company with one wholly-owned subsidiary, BankUnited, collectively, the Company. BankUnited, a national banking association headquartered in Miami Lakes, Florida, provides a full range of banking services to individual and corporate customers through banking centers in Florida, the New York metropolitan area and Dallas, Texas. The Bank also offers certain commercial lending and deposit products through national platforms and regional wholesale banking offices. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, these financial statements do not include all of the information and footnotes required for a fair presentation of financial position, results of operations and cash flows in conformity with GAAP and should be read in conjunction with the Company's consolidated financial statements and the notes thereto appearing in BKU's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected in future periods. The Company has a single operating segment and thus a single reportable segment. While management monitors the revenue streams of its various business units, the business units serve a similar base of primarily commercial clients, providing a similar range of products and services, managed through similar processes and platforms. The Company's chief ope

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED June 30, 2024 ASU No. 2023-09— Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This ASU requires entities to provide additional disclosures, primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions among others. This ASU is effective for the Company for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. The adoption of this ASU is not expected to have an impact on the Company's consolidated financial position, results of operations and cash flows. Adoption will lead to revised disclosures about income taxes in the Company's financial statements. Note 2 Earnings Per Common Share The computation of basic and diluted earnings per common share is presented below for the periods indicated (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, c 2024 2023 2024 2023 Basic earnings per common share: Numerator: Net income $ 53,733 $ 57,996 $ 101,713 $ 110,878 Distributed and undistributed earnings allocated to participating securities ( 748 ) ( 881 ) ( 1,429 ) ( 1,679 ) Income allocated to common stockholders for basic earnings per common share $ 52,985 $ 57,115 $ 100,284 $ 109,199 Denominator: Weighted average common shares outstanding 74,762,498 74,424,631 74,635,803 74,588,904 Less average unvested stock awards ( 1,110,233 ) ( 1,183,039 ) ( 1,119,035 ) ( 1,188,430 ) Weighted average shares for basic earnings per common share 73,652,265 73,241,592 73,516,768 73,400,474 Basic earnings per common share $ 0.72 $ 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 $ 57,115 $ 100,284 $ 109,199 Adjustment for earnings reallocated from particip

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED June 30, 2024 Note 3 Investment Securities Investment securities include investment securities available for sale, marketable equity securities, and investment securities held to maturity. The investment securities portfolio consisted of the following at the dates indicated (in thousands): June 30, 2024 Amortized Cost Gross Unrealized Carrying Value (1) Gains Losses Investment securities available for sale: U.S. Treasury securities $ 114,652 $ 60 $ ( 9,412 ) $ 105,300 U.S. Government agency and sponsored enterprise residential MBS 2,333,364 4,817 ( 24,798 ) 2,313,383 U.S. Government agency and sponsored enterprise commercial MBS 560,083 123 ( 64,868 ) 495,338 Private label residential MBS and CMOs 2,507,956 434 ( 285,297 ) 2,223,093 Private label commercial MBS 2,051,193 1,143 ( 60,858 ) 1,991,478 Single family real estate-backed securities 347,613 — ( 14,372 ) 333,241 Collateralized loan obligations 1,155,523 3,525 ( 157 ) 1,158,891 Non-mortgage asset-backed securities 101,123 180 ( 3,794 ) 97,509 SBA securities 87,182 36 ( 2,662 ) 84,556 9,370,325 $ 10,319 $ ( 472,847 ) 8,907,797 Investment securities held to maturity 10,000 10,000 $ 9,380,325 8,917,797 Marketable equity securities 28,652 $ 8,946,449 9 Table of Contents BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED June 30, 2024 December 31, 2023 Amortized Cost Gross Unrealized Carrying Value (1) Gains Losses Investment securities available for sale: U.S. Treasury securities $ 139,858 $ 532 $ ( 9,798 ) $ 130,592 U.S. Government agency and sponsored enterprise residential MBS 1,962,658 1,810 ( 40,261 ) 1,924,207 U.S. Government agency and sponsored enterprise commercial MBS 561,557 107 ( 63,805 ) 497,859 Private label residential MBS and CMOs 2,596,231 268 ( 300,769 ) 2,295,730 Private label commercial MBS 2,282,833 678 ( 84,768 ) 2,198,743 Single family real estate-backed securities 383,984 — ( 17,729 ) 366,255 Collateralized loan obligations 1,122,799 735 ( 10,710 ) 1,112,824 Non-mortgage asset-backed securities 106,095 156 ( 3,471 ) 102,780 SBA securities 106,237 41 ( 3,254 ) 103,024 9,369,428 $ 5,042 $ ( 539,838 ) 8,834,632 Investment securities held to maturity 10,000 10,000 $ 9,379,428 8,844,632 Marketable equity securities 32,722 $ 8,877,354 (1) At fair value except for securities held to maturity. Investment securities held to maturity at June 30, 2024 and December 31, 2023, consisted of one State of Israel bond maturing in October 2024. Accrued interest receivable on investments totaled $ 35 million and $ 37 million at June 30, 2024 and December 31, 2023, respectively, and is included in other assets in the accompanying consolidated balance sheets. At June 30, 2024, contractual maturities of investment securities available for sale, adjusted for anticipated prepayments when applicable, were as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 1,110,280 $ 1,077,068 Due after one year through five years 4,967,632 4,840,441 Due after five years through ten years 2,045,825 1,876,702 Due after ten years 1,246,588 1,113,586 $ 9,370,325 $ 8,907,797 The carrying value of securities pledged as coll

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED June 30, 2024 The following table provides information about gains (losses) on investment securities for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Gross realized gains on investment securities AFS $ 398 $ 847 $ 425 $ 1,619 Gross realized losses on investment securities AFS ( 48 ) — ( 103 ) ( 20 ) Net realized gain 350 847 322 1,599 Net gain (loss) on marketable equity securities recognized in earnings 71 146 874 ( 13,155 ) Gain (loss) on investment securities, net $ 421 $ 993 $ 1,196 $ ( 11,556 ) The following tables present the aggregate fair value and the aggregate amount by which amortized cost exceeded fair value for investment securities available for sale in unrealized loss positions aggregated by investment category and length of time that individual securities had been in continuous unrealized loss positions at the dates indicated (in thousands): June 30, 2024 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities $ 24,749 $ ( 29 ) $ 60,174 $ ( 9,383 ) $ 84,923 $ ( 9,412 ) U.S. Government agency and sponsored enterprise residential MBS 215,119 ( 830 ) 1,107,048 ( 23,968 ) 1,322,167 ( 24,798 ) U.S. Government agency and sponsored enterprise commercial MBS 4,898 ( 59 ) 459,549 ( 64,809 ) 464,447 ( 64,868 ) Private label residential MBS and CMOs — — 2,171,369 ( 285,297 ) 2,171,369 ( 285,297 ) Private label commercial MBS 25,586 ( 71 ) 1,795,397 ( 60,787 ) 1,820,983 ( 60,858 ) Single family real estate-backed securities — — 333,241 ( 14,372 ) 333,241 ( 14,372 ) Collateralized loan obligations 10,329 ( 1 ) 162,820 ( 156 ) 173,149 ( 157 ) Non-mortgage asset-backed securities — — 74,807 ( 3,794 ) 74,807 ( 3,794 ) SBA sec

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED June 30, 2024 December 31, 2023 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities $ 9,941 $ ( 27 ) $ 99,769 $ ( 9,771 ) $ 109,710 $ ( 9,798 ) U.S. Gove

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