MIAMI LAKES, Fla.--(BUSINESS WIRE)--BankUnited, Inc. (NYSE:BKU), (the “Company”) today announced that its Board of Directors has declared a quarterly cash dividend of $0.29 per common share, reflecting a 7.4% increase from the previous quarterly cash dividend of $0.27 per common share. The dividend will be payable on April 30, 2024 to stockholders of record at the close of business on April 12, 2024. About BankUnited, Inc. BankUnited, Inc. (NYSE: BKU), with total assets of $35.8 billion at December 31, 20 ...

[PART I](index=8&type=section&id=PART%20I) [Business](index=8&type=section&id=Item%201.%20Business) BankUnited, Inc., a bank holding company with **$35.8 billion** in assets, provides comprehensive commercial and consumer banking services primarily in Florida, New York, and Dallas, operating under extensive regulatory oversight with a focus on relationship-based and digitally-enabled strategies, alongside human capital development - BankUnited, Inc. is a bank holding company with one direct wholly-owned subsidiary, BankUnited, N.A., reporting total consolidated assets of **$35.8 billion** at December 31, 2023[52](index=52&type=chunk) - The bank offers a full range of commercial lending and deposit services via banking centers in Florida, the New York metropolitan area, and Dallas, Texas, complemented by a wholesale products office in Atlanta[52](index=52&type=chunk) - The company's core business strategy aims to establish a leading regional commercial and small business bank emphasizing service-oriented relationships and digital customer experiences[52](index=52&type=chunk) [Our Products and Services](index=8&type=section&id=Our%20Products%20and%20Services) - Lending and leasing products target small, middle-market, and larger corporate businesses, encompassing commercial loans, commercial real estate financing, and national municipal and equipment financing via subsidiaries Pinnacle and Bridge[38](index=38&type=chunk)[54](index=54&type=chunk)[71](index=71&type=chunk) - The bank has reduced lending in the office sector, prioritizing warehouse/industrial, multi-family, and select retail sectors for commercial real estate loans[72](index=72&type=chunk) - Deposit products comprise a full suite of commercial and consumer accounts, treasury management services, and programs such as CDARS for expanded FDIC insurance coverage[75](index=75&type=chunk) - Credit risk is managed via a three-lines-of-defense framework: business lines for sourcing, credit administration for evaluation, and Credit Review for independent assessment[40](index=40&type=chunk)[56](index=56&type=chunk)[73](index=73&type=chunk) [Our Markets and Competition](index=9&type=section&id=Our%20Markets%20and%20Competition) - Primary banking markets include Florida (Miami-Dade, Broward, Palm Beach, Tampa, Orlando, Jacksonville) and the Tri-State area (New York, New Jersey, Connecticut), with recent wholesale and retail expansion into Atlanta and Dallas[59](index=59&type=chunk) - The company encounters intense competition from diverse financial institutions, including national, regional, community banks, and non-bank FinTech companies, with key competitive factors being interest rates, customer service, and digital offerings[78](index=78&type=chunk)[374](index=374&type=chunk) [Regulation and Supervision](index=10&type=section&id=Regulation%20and%20Supervision) - As a bank holding company and national bank, BankUnited, Inc. and BankUnited, N.A. are comprehensively regulated and supervised by the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC), respectively[63](index=63&type=chunk)[81](index=81&type=chunk) - The company adheres to Basel III capital rules, mandating minimum ratios for CET1 (**4.5%**), Tier 1 (**6.0%**), and Total Capital (**8.0%**), plus a **2.5%** capital conservation buffer, with both the holding company and bank being well-capitalized as of December 31, 2023[89](index=89&type=chunk)[90](index=90&type=chunk)[113](index=113&type=chunk) - The bank's dividend payments to the holding company are restricted by regulatory requirements, potentially affecting the holding company's debt servicing or shareholder dividend capacity[94](index=94&type=chunk)[115](index=115&type=chunk) - The bank is subject to numerous consumer protection laws, including the Community Reinvestment Act (CRA), under which it achieved a \"Satisfactory\" rating in its October 2021 evaluation[122](index=122&type=chunk)[143](index=143&type=chunk) - In Q4 2023, the bank recorded a **$35.4 million** special assessment from the FDIC due to earlier bank failures[139](index=139&type=chunk) [Human Capital Resources](index=16&type=section&id=Human%20Capital%20Resources) - As of December 31, 2023, the company employed **1,588** full-time and **28** part-time individuals, none of whom are covered by a collective bargaining agreement[11](index=11&type=chunk) - The company fosters diversity and inclusion via its iCARE™ initiative; as of December 31, 2023, **40%** of the Board of Directors were female and **40%** were of diverse ethnicity, with approximately **56%** of the total workforce being female[128](index=128&type=chunk)[144](index=144&type=chunk) - In 2023, **204** employees completed career development programs such as Rising Leaders and EXCELerate, while the mentoring program engaged **280** employees, reporting **1,247** mentoring hours and a **4.7 out of 5-star** rating[4](index=4&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) This section outlines material risks and uncertainties impacting the company's business, encompassing strategic, credit, interest rate, liquidity, operational, regulatory, and general market factors, including challenges in strategy execution, credit losses, interest rate sensitivity, liquidity reliance, operational failures, and regulatory environment impacts - The report identifies material risks inherent in the company's business that could adversely affect its financial condition, results of operations, and stock value[132](index=132&type=chunk) [Strategic Risk](index=18&type=section&id=Strategic%20Risk) - The company's execution of strategic priorities, including funding mix improvement, balance sheet re-positioning, credit and expense management, and capital maintenance, faces risks from competition, macroeconomic conditions, and market health[175](index=175&type=chunk)[176](index=176&type=chunk) - Intense competition from national, regional, and FinTech entities in its core Florida and New York tri-state markets may negatively affect growth and profitability[134](index=134&type=chunk)[177](index=177&type=chunk) - The business is vulnerable to disruptions from natural disasters, pandemics, and geopolitical conflicts, potentially leading to increased loan losses and deposit outflows[136](index=136&type=chunk)[376](index=376&type=chunk) - The loss of key senior management personnel could harm the business due to the difficulty in replicating their knowledge and experience[153](index=153&type=chunk)[180](index=180&type=chunk) [Credit Risk](index=21&type=section&id=Credit%20Risk) - The business is inherently exposed to credit risk, where borrowers may default, and the Allowance for Credit Losses (ACL) might be insufficient to cover actual losses, particularly during economic downturns[158](index=158&type=chunk)[184](index=184&type=chunk)[361](index=361&type=chunk) - A substantial part of the loan portfolio is secured by commercial and residential real estate, exposing the company to property value declines, especially in the office sector due to remote work trends[162](index=162&type=chunk)[187](index=187&type=chunk) - Geographic concentration in Florida and the New York Tri-State area renders the business highly vulnerable to regional economic downturns or real estate market disruptions[163](index=163&type=chunk)[188](index=188&type=chunk) [Interest Rate Risk](index=23&type=section&id=Interest%20Rate%20Risk) - The company's earnings heavily rely on net interest income, which is sensitive to market interest rate fluctuations; rapid or unexpected changes in rates, yield curve shape, or spreads could negatively impact the net interest margin[16](index=16&type=chunk)[190](index=190&type=chunk) - Interest rate risk management techniques are imprecise, relying on models with depositor behavior assumptions that may not accurately predict future rate movement impacts[363](index=363&type=chunk) [Liquidity Risk](index=24&type=section&id=Liquidity%20Risk) - Inadequate liquidity could hinder the ability to fulfill customer loan requests, deposit withdrawals, and other cash commitments, potentially disrupting normal operations[7](index=7&type=chunk)[192](index=192&type=chunk) - The 2023 regional bank failures diminished customer confidence and resulted in elevated deposit outflows, leaving the company vulnerable to similar events that could prompt material, unexpected withdrawals[5](index=5&type=chunk)[167](index=167&type=chunk) - A substantial portion of deposits are commercial and uninsured, potentially increasing their susceptibility to outflows during periods of stress[168](index=168&type=chunk)[364](index=364&type=chunk) - The Federal Reserve Bank and FHLB serve as crucial liquidity sources; any compromise in their availability could materially harm the business[19](index=19&type=chunk)[193](index=193&type=chunk) [Operational Risk](index=25&type=section&id=Operational%20Risk) - The company depends on analytical and forecasting models for strategic planning and risk management, which may prove inadequate or inaccurate[8](index=8&type=chunk)[226](index=226&type=chunk) - Reliance on third-party service providers for critical infrastructure, including core banking and IT systems, introduces inherent operational risks, where a third-party failure could significantly disrupt business[17](index=17&type=chunk)[173](index=173&type=chunk)[200](index=200&type=chunk) - The business faces exposure to cybersecurity incidents, such as data breaches and denial-of-service attacks, which could harm its reputation, lead to financial losses, and attract regulatory scrutiny[201](index=201&type=chunk)[230](index=230&type=chunk)[382](index=382&type=chunk) - Failure to adapt to technological advancements could negatively affect the company's competitiveness in attracting loans and deposits[20](index=20&type=chunk)[232](index=232&type=chunk) [Regulatory, Legal and Compliance Risk](index=28&type=section&id=Regulatory%2C%20Legal%20and%20Compliance%20Risk) - Operating in a highly regulated environment implies that changes in laws or non-compliance can be costly, leading to fines, penalties, and restrictions on business activities[9](index=9&type=chunk)[204](index=204&type=chunk) - The 2023 regional bank failures are anticipated to prompt new laws and regulations, especially concerning capital, liquidity, and bank mergers, potentially increasing costs and affecting profitability[236](index=236&type=chunk) - Noncompliance with the Bank Secrecy Act and other anti-money laundering regulations could result in substantial fines and limitations on expansion plans[208](index=208&type=chunk)[238](index=238&type=chunk) - Future bank failures might necessitate the company paying higher FDIC insurance premiums, which could adversely affect earnings[212](index=212&type=chunk)[240](index=240&type=chunk) [Unresolved Staff Comments](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[370](index=370&type=chunk) [Cybersecurity](index=32&type=section&id=Item%201C.%20Cybersecurity) The company outlines its comprehensive cybersecurity risk management strategy, integrated into its overall risk program, featuring layered security, continuous threat assessment, and regular testing, with Board oversight and a dedicated Materiality Assessment Team, reporting no material incidents in the last three fiscal years - The company maintains a comprehensive cybersecurity program with processes for threat detection, assessment, and management, integrated into its overall risk management framework[247](index=247&type=chunk)[265](index=265&type=chunk) - Cybersecurity governance involves oversight by the Board's Risk Committee and leadership from a Chief Information Security Officer (CISO) with over **30 years** of experience[250](index=250&type=chunk)[267](index=267&type=chunk) - A Materiality Assessment Team (MAT), consisting of the CISO, CIO, CRO, CFO, CAO, and General Counsel, is tasked with determining the materiality of cybersecurity incidents[251](index=251&type=chunk)[268](index=268&type=chunk) - The company has not experienced any material cybersecurity incidents over the past three fiscal years[266](index=266&type=chunk) [Properties](index=33&type=section&id=Item%202.%20Properties) BankUnited's corporate headquarters is in leased office space in Miami Lakes, Florida, with **53** banking centers operated across Florida, New York, and Texas as of December 31, 2023, all deemed adequate for current and foreseeable operational needs - The company's corporate headquarters is located in leased office space in Miami Lakes, Florida, operating **53** banking centers across Florida, New York, and Texas as of December 31, 2023[252](index=252&type=chunk) [Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal actions arising from normal business operations, with management assessing that the outcomes are unlikely to materially impact its financial position, results of operations, or cash flows - The company is engaged in various legal actions stemming from its normal course of business, though management deems the likelihood of a material impact from these proceedings to be remote[269](index=269&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - None[270](index=270&type=chunk) [PART II](index=34&type=section&id=PART%20II) [Market for Common Equity, Stockholder Matters and Issuer Purchases](index=34&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) BankUnited's common stock trades on the NYSE as \"BKU\"; the company declared **$1.08** per share in total quarterly dividends in 2023, an increase from **$1.00** in 2022, with a **$100** investment growing to **$126.65** by December 31, 2023, underperforming the S&P 500 and KBW Nasdaq Regional Banking Indices - The company's common stock trades on the NYSE under the symbol \"BKU\"; as of February 16, 2024, there were **74,371,130** shares outstanding and **573** stockholders of record[22](index=22&type=chunk)[272](index=272&type=chunk) Dividend per Share | Dividend per Share | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Quarterly Dividend | 0.27 | 0.25 | | Annual Dividend | 1.08 | 1.00 | Index Performance | Index | 12/31/2018 ($) | 12/31/2023 ($) | | :--- | :--- | :--- | | BankUnited, Inc. | 100.00 | 126.65 | | S&P 500 Index | 100.00 | 207.21 | | KBW Nasdaq Regional Banking Index | 100.00 | 139.66 | [Reserved](index=36&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results for the year ended December 31, 2023, highlighting navigation of a challenging macroeconomic environment, strategic priorities to improve funding and net interest margin, a net income of **$178.7 million** or **$2.38** per diluted share, and robust capital and liquidity with a **11.4%** CET1 ratio and **$13.6 billion** available liquidity - The company's vision is to be a leading regional commercial and small business bank, with near-term strategic priorities focused on enhancing the funding profile through core deposit growth, optimizing the asset mix by transitioning from residential to higher-yielding commercial loans, and managing expenses[298](index=298&type=chunk)[302](index=302&type=chunk) - The macroeconomic environment, including 2023 regional bank closures and restrictive monetary policy, resulted in deposit outflows and increased reliance on costlier wholesale funding, thereby pressuring the net interest margin[281](index=281&type=chunk)[299](index=299&type=chunk) Key Financial Metrics | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Income (Millions) | 178.7 | 285.0 | | Diluted EPS ($) | 2.38 | 3.54 | | Return on Average Equity (%) | 7.01 | N/A | | Return on Average Assets (%) | 0.49 | N/A | - The net interest margin decreased to **2.56%** in 2023 from **2.68%** in 2022 due to an unfavorable funding mix shift, though it expanded in the second half of 2023[325](index=325&type=chunk) - Asset quality remained robust, with a net charge-off ratio of **0.09%** for 2023 and a non-performing asset to total assets ratio of **0.37%** at year-end[285](index=285&type=chunk)[293](index=293&type=chunk) - The company maintained a strong capital position with a CET1 ratio of **11.4%** and ample liquidity, reporting total same-day available liquidity of **$13.6 billion** at December 31, 2023[309](index=309&type=chunk)[333](index=333&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The Allowance for Credit Losses (ACL) represents the most significant accounting estimate, requiring complex and subjective judgments concerning historical loss experience, economic forecasts, collateral values, and other factors[313](index=313&type=chunk)[334](index=334&type=chunk)[336](index=336&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) - Tax-equivalent net interest income decreased to **$890.8 million** in 2023 from **$928.7 million** in 2022, primarily due to a **$666.3 million** increase in interest expense exceeding the **$628.4 million** increase in interest income[340](index=340&type=chunk) - The provision for credit losses was **$87.6 million** in 2023, up from **$75.2 million** in 2022, mainly attributable to changes in economic forecasts, new commercial loan production, and risk rating migration[324](index=324&type=chunk)[353](index=353&type=chunk) - Non-interest income increased to **$86.8 million** in 2023 from **$77.6 million** in 2022, primarily driven by higher BOLI income and lending-related fees[346](index=346&type=chunk)[357](index=357&type=chunk) - Non-interest expense increased to **$636.0 million** in 2023 from **$540.3 million** in 2022, largely due to a **$35.4 million** FDIC special assessment and higher employee compensation[347](index=347&type=chunk)[358](index=358&type=chunk) - The effective tax rate was **24.64%** in 2023, compared to **24.03%** in 2022[1060](index=1060&type=chunk) [Analysis of Financial Condition](index=47&type=section&id=Analysis%20of%20Financial%20Condition) - Total assets decreased to **$35.8 billion** at year-end 2023 from **$37.0 billion** at year-end 2022[717](index=717&type=chunk) - The investment securities portfolio decreased to **$8.9 billion** from **$9.8 billion**, with a short effective duration of **1.97 years**; the portfolio held a net unrealized loss position of **$534.8 million**, an improvement from a **$674.2 million** loss at year-end 2022[1063](index=1063&type=chunk)[1065](index=1065&type=chunk)[1066](index=1066&type=chunk) - Total loans remained relatively stable at **$24.6 billion**, with a portfolio mix shift showing core C&I and CRE loans growing by **$719 million** while residential loans declined by **$692 million**, aligning with strategic goals[506](index=506&type=chunk) - Total deposits decreased by **$971 million** to **$26.5 billion**, marked by a **$1.2 billion** decline in non-interest bearing demand deposits, indicating a customer shift towards higher-yielding alternatives[327](index=327&type=chunk)[631](index=631&type=chunk) - FHLB advances decreased to **$5.1 billion** from **$5.4 billion** at year-end 2022[717](index=717&type=chunk) [Asset Quality](index=58&type=section&id=Asset%20Quality) - Non-performing assets (NPAs) increased to **$130.6 million** (**0.37%** of total assets) at year-end 2023 from **$107.0 million** (**0.29%** of total assets) at year-end 2022, yet remain below pre-pandemic levels[293](index=293&type=chunk)[559](index=559&type=chunk) - Criticized and classified commercial loans increased due to higher borrower operating costs and evolving commercial real estate market dynamics, especially in the office sector[547](index=547&type=chunk) - The Allowance for Credit Losses (ACL) to total loans ratio increased to **0.82%** at December 31, 2023, from **0.59%** at the prior year-end, reflecting changes in economic forecasts, risk rating migration, and portfolio composition shifts[308](index=308&type=chunk)[609](index=609&type=chunk) - The ACL for the CRE office portfolio significantly increased to **1.10%** of loans from **0.45%** at year-end 2022, reflecting market headwinds[588](index=588&type=chunk) [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) - The company maintained a strong liquidity position, with total same-day available liquidity of **$13.6 billion** at December 31, 2023, and a ratio of available liquidity to uninsured, uncollateralized deposits of **152%**[284](index=284&type=chunk)[639](index=639&type=chunk) - Following the March 2023 banking events, management activated its contingency funding plan and enhanced liquidity monitoring, which remains in effect[621](index=621&type=chunk) Capital Ratios | Capital Ratio | Dec 31, 2023 (%) | Dec 31, 2022 (%) | | :--- | :--- | :--- | | CET1 risk-based capital | 11.4 | 11.0 | | Tier 1 risk-based capital | 11.4 | 11.0 | | Total risk-based capital | 13.4 | 12.7 | | Tier 1 leverage | 7.9 | 7.5 | - Book value per common share increased to **$34.66** and tangible book value per common share increased to **$33.62** at year-end 2023[330](index=330&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, managed by the ALCO using income simulation models to project net interest income under various scenarios, with a **+200 basis point** rate shock modeled to increase net interest income by **2.1%** in year one, and a **-200 basis point** shock decreasing it by **4.7%**, both within policy limits, also utilizing derivative instruments for hedging - The principal market risk is interest rate risk, managed by the ALCO through policies and monitoring procedures, including income simulation and Economic Value of Equity (EVE) analysis[645](index=645&type=chunk)[665](index=665&type=chunk) Impact on Net Interest Income | Interest Rate Shock (bps) | Impact on Net Interest Income (Year 1, %) | | :--- | :--- | | +200 | +2.1 | | +100 | +1.0 | | -100 | -1.6 | | -200 | -4.7 | - The company employs derivative financial instruments, including interest rate swaps and caps, to manage interest rate risk by mitigating exposure to changes in cash flows on variable-rate liabilities and fair value changes of fixed-rate instruments[650](index=650&type=chunk) [Financial Statements and Supplementary Data](index=80&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's consolidated financial statements for 2021-2023, including Balance Sheets, Income, Comprehensive Income, Cash Flows, and Stockholders' Equity, along with Management's Report on Internal Control and Deloitte & Touche LLP's unqualified opinions on both financial statements and internal controls, supplemented by detailed notes on accounting policies and specific accounts - The section includes the audited consolidated financial statements and accompanying notes for the fiscal years ended December 31, 2023, 2022, and 2021[654](index=654&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023[657](index=657&type=chunk) - Deloitte & Touche LLP, the independent registered public accounting firm, issued an unqualified opinion on both the consolidated financial statements and the effectiveness of internal control over financial reporting[703](index=703&type=chunk)[712](index=712&type=chunk) [Notes to Consolidated Financial Statements](index=81&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The notes offer detailed information on significant accounting policies, encompassing basis of presentation, use of estimates (especially the ACL), fair value measurements, and principles of consolidation[725](index=725&type=chunk)[750](index=750&type=chunk)[752](index=752&type=chunk) - Note 4 provides a detailed breakdown of the loan portfolio by class and an analysis of the Allowance for Credit Losses (ACL), indicating an increase in the ACL to **$202.7 million** at year-end 2023 from **$147.9 million** at year-end 2022[863](index=863&type=chunk)[914](index=914&type=chunk) - Note 10 details the use of derivative instruments for hedging, with a total notional amount of **$3.6 billion** for designated hedging instruments as of December 31, 2023[671](index=671&type=chunk) - Note 13 confirms that as of December 31, 2023, both the Company and the Bank exceeded all \"well capitalized\" regulatory capital requirements[468](index=468&type=chunk) [Changes in and Disagreements with Accountants](index=143&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles, financial statement disclosure, or auditing scope or procedure - None[1097](index=1097&type=chunk) [Controls and Procedures](index=143&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2023, with no material changes to internal control over financial reporting during the fourth quarter - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[1103](index=1103&type=chunk) - There were no material changes to internal control over financial reporting during the fourth quarter of 2023[1104](index=1104&type=chunk) [Other Information](index=143&type=section&id=Item%209B.%20Other%20Information) This section is not applicable - Not applicable[1115](index=1115&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=143&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section is not applicable - Not applicable[1115](index=1115&type=chunk)

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view i ...

BankUnited, Inc.’s (BKU) fourth-quarter 2023 adjusted earnings of 72 cents per share met the Zacks Consensus Estimate. In the prior-year quarter, the company reported earnings of 82 cents. The reported quarter’s earnings excluded expenses related to FDIC special assessment and a loss on sale of operating lease equipment.Results were aided by a decline in provisions. However, lower net interest income (NII) and non-interest income, along with higher expenses, were the undermining factors.Net income was $20.8 ...

BankUnited, Inc. (NYSE:BKU) Q4 2023 Results Conference Call January 26, 2024 9:00 AM ET Company Participants Susan Greenfield - Corporate Secretary Raj Singh - Chairman, President and Chief Executive Officer Thomas Cornish - Chief Operating Officer Leslie Lunak - Chief Financial Officer Conference Call Participants Will Jones - KBW Timur Braziler - Wells Fargo David Rochester - Compass Point John Arfstrom - RBC Ben Gerlinger - Citi Alex Lau - J.P. Morgan Zach Westerlind - UBS Operator Good day, and thank yo ...

BankUnited, Inc. (BKU) came out with quarterly earnings of $0.72 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.82 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this company would post earnings of $0.71 per share when it actually produced earnings of $0.63, delivering a surprise of -11.27%.Over the last four quarters, the company has not been able to surpass consensus EPS estimates.BankUnited, Inc., which b ...

Analysts on Wall Street project that BankUnited, Inc. (BKU) will announce quarterly earnings of $0.72 per share in its forthcoming report, representing a decline of 12.2% year over year. Revenues are projected to reach $243.97 million, declining 9.6% from the same quarter last year.Over the last 30 days, there has been an upward revision of 0.4% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forec ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20%28Unaudited%29) This section presents BankUnited, Inc.'s unaudited consolidated financial statements, highlighting decreases in total assets, loans, and deposits, alongside a significant year-over-year decline in net income [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 | December 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$35,389,664** | **$37,026,712** | **-$1,637,048** | | Loans, net | $24,160,213 | $24,738,042 | -$577,829 | | Investment securities | $8,886,484 | $9,755,327 | -$868,843 | | **Total Liabilities** | **$32,865,594** | **$34,590,731** | **-$1,725,137** | | Total deposits | $26,112,666 | $27,509,334 | -$1,396,668 | | FHLB advances | $5,165,000 | $5,420,000 | -$255,000 | | **Total Stockholders' Equity** | **$2,524,070** | **$2,435,981** | **+$88,089** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Income Statement Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $214,842 | $235,836 | $656,594 | $669,894 | | Provision for Credit Losses | $33,049 | $3,720 | $68,354 | $35,546 | | **Net Income** | **$46,981** | **$87,850** | **$157,859** | **$220,764** | | **Diluted EPS** | **$0.63** | **$1.12** | **$2.11** | **$2.71** | - **Net income decreased significantly** for both the three and nine-month periods ended September 30, 2023, compared to the same periods in 2022, primarily driven by a **substantial increase in the provision for credit losses** and **higher interest expense**[14](index=14&type=chunk) [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive Income (Loss) (in thousands) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $46,981 | $87,850 | $157,859 | $220,764 | | Other Comprehensive Income (Loss) | ($34,634) | ($87,346) | $30,709 | ($391,801) | | **Comprehensive Income (Loss)** | **$12,347** | **$504** | **$188,568** | **($171,037)** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net Cash Flow by Activity (in thousands) | Activity | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $593,716 | $1,317,141 | | Net cash provided by (used in) investing activities | $1,149,187 | ($1,645,266) | | Net cash provided by (used in) financing activities | ($1,923,665) | $739,406 | | **Net (decrease) increase in cash** | **($180,762)** | **$411,281** | [Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) - **Total stockholders' equity increased** from **$2.44 billion** at December 31, 2022, to **$2.52 billion** at September 30, 2023, driven by **net income of $157.9 million** and **comprehensive income of $30.7 million**, partially offset by dividends paid ($59.7 million) and common stock repurchases ($55.2 million)[23](index=23&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company adopted **ASU No. 2022-02** in Q1 2023, which eliminated accounting guidance for Troubled Debt Restructurings (TDRs), resulting in a **$1.8 million reduction to the Allowance for Credit Losses (ACL)** and a **$1.3 million net-of-tax cumulative-effect adjustment** to retained earnings[26](index=26&type=chunk) - The **investment securities portfolio**, primarily classified as available-for-sale (AFS), had a **carrying value of $8.89 billion** at September 30, 2023, down from $9.76 billion at year-end 2022, and was in a **net unrealized loss position of $644.0 million**, primarily due to rising interest rates[37](index=37&type=chunk)[40](index=40&type=chunk)[49](index=49&type=chunk) - The **Allowance for Credit Losses (ACL) increased to $196.1 million (0.80% of total loans)** at September 30, 2023, from $147.9 million (0.59% of total loans) at December 31, 2022, mainly due to a **deteriorating economic forecast and an increase in specific reserves**[67](index=67&type=chunk)[73](index=73&type=chunk)[77](index=77&type=chunk) - The company uses **interest rate swaps, caps, and collars** as cash flow and fair value hedges to manage interest rate risk, with the **total notional amount of derivatives designated as hedging instruments at $3.14 billion** as of September 30, 2023[111](index=111&type=chunk)[167](index=167&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, noting net income decline due to higher credit loss provisions and funding costs, while highlighting strategic progress in deposits, liquidity, and capital strength [Overview and Quarterly Highlights](index=39&type=section&id=Overview%20and%20Quarterly%20Highlights) - **Net income for Q3 2023 was $47.0 million ($0.63/share)**, a **decrease from $87.9 million ($1.12/share)** in Q3 2022, primarily due to an **increased provision for credit losses** driven by a less favorable economic forecast[258](index=258&type=chunk) - Strategic priorities in Q3 2023 showed progress: **non-brokered deposits grew by $484 million**, **FHLB advances declined by $810 million**, and the **loans-to-deposits ratio improved to 93.3%** from 95.3% in the prior quarter[245](index=245&type=chunk)[246](index=246&type=chunk)[219](index=219&type=chunk) - The **net interest margin (tax-equivalent) expanded to 2.56%** in Q3 2023 from 2.47% in Q2 2023, though it was down from 2.76% in Q3 2022[259](index=259&type=chunk) - The company maintained **strong liquidity with $14.4 billion in same-day availability** and a **robust capital position, with a CET1 ratio of 11.4%** at the holding company level as of September 30, 2023[261](index=261&type=chunk)[247](index=247&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Net Interest Income and Margin (Tax-Equivalent) | Period | Net Interest Income | Net Interest Margin | | :--- | :--- | :--- | | **Q3 2023** | **$219.1M** | **2.56%** | | Q2 2023 | $218.1M | 2.47% | | Q3 2022 | $239.9M | 2.76% | | **9M 2023** | **$669.4M** | **2.55%** | | 9M 2022 | $681.5M | 2.63% | - The **provision for credit losses was $33.0 million for Q3 2023 and $68.4 million for the first nine months of 2023**, with the increase primarily driven by a **deteriorating economic forecast and risk rating migration**[130](index=130&type=chunk) - **Non-interest income increased to $27.7 million in Q3 2023** from $23.1 million in Q3 2022, mainly due to higher lease financing income, and **increased to $69.7 million for the nine-month period** from $50.8 million, driven by higher BOLI income and lease financing[132](index=132&type=chunk)[134](index=134&type=chunk) - **Non-interest expense rose to $445.1 million** for the nine months ended Sep 30, 2023, from $391.8 million in the prior year period, driven by **higher employee compensation, technology investments, deposit insurance expense, and costs related to depositor rebate programs**[135](index=135&type=chunk)[136](index=136&type=chunk) [Analysis of Financial Condition](index=46&type=section&id=Analysis%20of%20Financial%20Condition) - The investment strategy focuses on liquidity, high credit quality, and managing interest rate risk, with a **short portfolio duration of 2.03 years** as of September 30, 2023[154](index=154&type=chunk) - The loan portfolio is primarily composed of **commercial loans (65.6%) and residential loans (34.4%)**, with management intending to increasingly emphasize relationship-based loans accompanied by deposit business[67](index=67&type=chunk)[253](index=253&type=chunk) - **Non-performing assets (NPAs) remained low at 0.40% of total assets** at September 30, 2023, while the **Allowance for Credit Losses (ACL) to total loans ratio increased to 0.80%** at quarter-end, reflecting a more cautious economic outlook[262](index=262&type=chunk)[341](index=341&type=chunk) - The company maintains **strong liquidity, with total same-day available liquidity of $14.4 billion** and a **ratio of available liquidity to uninsured/uncollateralized deposits of 161%** at September 30, 2023[387](index=387&type=chunk)[362](index=362&type=chunk) - Capital levels remain robust and exceed well-capitalized guidelines, with the **CET1 risk-based capital ratio at 11.4% for the holding company and 13.2% for the Bank** as of September 30, 2023[247](index=247&type=chunk)[392](index=392&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages primary interest rate risk using income simulation and EVE models, indicating a liability-sensitive position with forecasted net interest income decreases in rising rate scenarios, partially hedged by derivatives Sensitivity of Net Interest Income (NII) and Economic Value of Equity (EVE) to Interest Rate Shocks (as of Sep 30, 2023) | Rate Shock (Basis Points) | Change in NII (Year 1) | Change in EVE | | :--- | :--- | :--- | | +200 | (4)% | (17)% | | +100 | (1)% | (8)% | | -100 | (1)% | +12% | | -200 | (3)% | +15% | - The company uses interest rate derivatives to hedge risk, having **held $3.14 billion in notional value of derivatives designated as hedging instruments** as of September 30, 2023, primarily pay-fixed interest rate swaps to hedge variable rate borrowings[372](index=372&type=chunk)[410](index=410&type=chunk) - As of September 30, 2023, all financial instruments previously based on LIBOR have been **successfully converted to an alternative reference rate, generally SOFR, completing the company's LIBOR transition**[400](index=400&type=chunk) [Controls and Procedures](index=73&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation conducted by management, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of the end of the period[374](index=374&type=chunk) - **No changes occurred in the company's internal control over financial reporting** during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[413](index=413&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=73&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in various legal actions arising from the normal course of business, which management believes are remote to have a material impact on financial position, results, or cash flows - In the opinion of management, the **likelihood is remote that the impact of ongoing legal proceedings**, individually or in aggregate, would be **material to the Company's consolidated financial position, results of operations, or cash flows**[212](index=212&type=chunk)[375](index=375&type=chunk) [Risk Factors](index=73&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to risk factors from the 2022 10-K, except for new risks from March 2023 bank failures, potentially impacting regional bank liquidity, deposit flows, and leading to adverse regulatory changes or additional FDIC assessments - **Recent failures of three regional banks have eroded customer confidence** in the banking system, which may **adversely impact liquidity and deposit flows for regional banks** like BankUnited[119](index=119&type=chunk)[376](index=376&type=chunk) - The cost of resolving recent bank failures is likely to result in an **additional FDIC deposit insurance assessment**, which will **negatively impact the Company's earnings**[415](index=415&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section of the report did not contain any information regarding unregistered sales of equity securities or the use of proceeds - The report **does not contain information on unregistered sales of equity securities or use of proceeds** for the period[405](index=405&type=chunk) [Other Information](index=74&type=section&id=ITEM%205.%20Other%20Information) During the third quarter of 2023, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - **No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement** during the three months ended September 30, 2023[406](index=406&type=chunk) [Exhibits](index=75&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include the CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002, and the XBRL Interactive Data Files List of Exhibits | Exhibit | Description | | :--- | :--- | | 31.1 | Certification of Chief Executive Officer Pursuant to Section 302 | | 31.2 | Certification of Chief Financial Officer Pursuant to Section 302 | | 32.1 | Certification of Chief Executive Officer Pursuant to Section 906 | | 32.2 | Certification of Chief Financial Officer Pursuant to Section 906 | | 101 | Interactive Data Files (XBRL) |

BankUnited, Inc. (NYSE:BKU) Q3 2023 Earnings Conference Call October 19, 2023 9:00 AM ET Company Participants Susan Greenfield - Corporate Secretary Raj Singh - Chairman, President and Chief Executive Officer Tom Cornish - Chief Operating Officer Leslie Lunak - Chief Financial Officer Conference Call Participants Will Jones - KBW Graham Dick - Piper Sandler John Arfstorm - RBC Capital Markets Janet Lee - JPMorgan Operator Good day. Thank you for standing by. Welcome to the BankUnited Third Quarter 2023 Earn ...

Financial Performance - Net interest margin expanded to 2.56% from 2.47% for the prior quarter[16] - Total deposits grew by $274 million in Q3[17] - Non-brokered deposits grew by $484 million[17] - Net income was $47 million[28] - Pre-Provision, Net Revenue (PPNR) was $95 million[29] Deposits and Funding - Period-end Non-interest DDA was $7,357 million[1] - Non-interest bearing DDA stable at 28% of total deposits[17] - Paid off $1 billion in wholesale funding[16] - FHLB advances paid down by $810 million[17] Asset Quality and CRE Portfolio - Low NPA ratio of 0.40% at September 30[5] - Annualized net charge-off rate of 0.07%[5] - High quality CRE portfolio with weighted average DSCR of 1.80 and weighted average LTV of 55.8%; 58% in Florida[5] - CRE to total loans is 24%[5] - Allowance for credit losses to total loans increased to 0.80%[3] Liquidity and Capital - Same day available liquidity of $14.4 billion[3] - Available liquidity is 161% of uninsured, uncollateralized deposits[3] - CET 1 ratio of 11.4%[3]