BankUnited(BKU) - 2024 Q1 - Quarterly Results

BankUnited, Inc. First Quarter 2024 Earnings Release Q1 2024 Financial and Strategic Highlights BankUnited reported $48.0 million net income and $0.64 diluted EPS, reflecting improved funding mix, strengthened capital, and favorable credit quality Quarterly Financial Performance | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Income | $48.0 million | $20.8 million | $52.9 million | | Diluted EPS | $0.64 | $0.27 | $0.70 | - The company demonstrated strong execution on key strategic priorities, including improving its funding mix, managing its loan portfolio, maintaining favorable credit, and building a robust capital position[5] - Wholesale funding, including FHLB advances and brokered deposits, was reduced by $1.4 billion during the quarter[5] - Non-interest bearing demand deposits grew by $404 million, increasing their share of total deposits to 27% from 26% in the prior quarter[19] - The quarterly common stock dividend was increased by $0.02 to $0.29 per share, a 7% increase[26] Financial Performance Details Net interest income slightly decreased to $214.9 million, while non-interest income increased and non-interest expense declined due to a one-time FDIC assessment - Net interest income was $214.9 million for Q1 2024, compared to $217.2 million for Q4 2023[30] - The tax-equivalent net interest margin was 2.57%, a minor decrease of 3 basis points from 2.60% in the previous quarter[31] - Non-interest income increased to $26.9 million from $17.1 million in Q4 2023, largely driven by a $2.7 million gain on disposition of operating lease equipment compared to a $6.5 million loss in the prior quarter[33] - Non-interest expense was $159.2 million, significantly lower than the $190.9 million in Q4 2023, which included the initial $35.4 million for the FDIC special assessment[52][25] Loan and Deposit Portfolio Total loans decreased to $24.2 billion due to strategic reductions, while total deposits grew by $489 million, improving the funding mix - Total loans declined by $407 million during the quarter, with a strategic reduction of $152 million in residential loans and a $226 million decline in core C&I and CRE portfolios[6][13] Loan Portfolio Composition (in thousands) | Loan Category | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Commercial & Industrial (C&I) | $6,745,622 | $6,971,981 | | Commercial Real Estate (CRE) | $5,838,771 | $5,819,233 | | Residential | $8,056,972 | $8,209,027 | | Other | $3,585,935 | $3,633,443 | | Total Loans | $24,226,300 | $24,633,684 | - Total deposits grew by $489 million, while FHLB advances were paid down by $3.6 billion compared to one year ago, improving the funding mix[19][20] - The average cost of total deposits increased by 22 basis points to 3.18% for the quarter, but the spot cost of total deposits stabilized, ending the quarter at 3.17%[23] Asset Quality and Capital Position Asset quality remained strong with declining NPA and low net charge-offs, while capital ratios, including CET1 at 11.6%, demonstrated a robust position Key Asset Quality Ratios | Ratio | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | NPA to Total Assets | 0.34% | 0.37% | | Annualized Net Charge-off Ratio | 0.02% | 0.09% | | ACL to Total Loans | 0.90% | 0.82% | - Non-performing assets (NPAs) decreased to $118.9 million from $130.6 million at the end of the prior quarter[15] - Commercial real estate (CRE) loans represent 24% of total loans and 166% of total risk-based capital, which is below the peer median of 35% and 225%, respectively[9] Key Capital Ratios | Ratio | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | CET1 Risk-based Capital | 11.6% | 11.4% | | Total Risk-based Capital | 13.7% | 13.4% | | Tangible Common Equity / Tangible Assets | 7.3% | 7.0% | Consolidated Financial Statements and Reconciliations This section provides detailed unaudited consolidated financial statements, including balance sheets, income statements, and non-GAAP reconciliations Consolidated Balance Sheets Total assets were $35.1 billion, with deposits increasing to $27.0 billion and FHLB advances significantly decreasing to $3.9 billion Consolidated Balance Sheets (in thousands) | (in thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $35,105,654 | $35,761,607 | | Loans, net | $24,008,744 | $24,430,995 | | Total Deposits | $27,027,364 | $26,538,478 | | FHLB Advances | $3,905,000 | $5,115,000 | | Total Liabilities | $32,465,262 | $33,183,686 | | Total Stockholders' Equity | $2,640,392 | $2,577,921 | Consolidated Statements of Income The company reported net interest income of $214.9 million, with a $15.3 million provision for credit losses, resulting in $48.0 million net income Consolidated Statements of Income (in thousands) | (in thousands) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Interest Income | $214,857 | $217,210 | $227,874 | | Provision for Credit Losses | $15,285 | $19,253 | $19,788 | | Total Non-interest Income | $26,877 | $17,092 | $16,535 | | Total Non-interest Expense | $159,240 | $190,863 | $152,780 | | Net Income | $47,980 | $20,812 | $52,882 | Earnings Per Share (EPS) Calculation Basic and diluted earnings per common share were $0.64 for Q1 2024, compared to $0.27 in the prior quarter Earnings Per Common Share | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Basic EPS | $0.64 | $0.27 | $0.71 | | Diluted EPS | $0.64 | $0.27 | $0.70 | Non-GAAP Financial Measures This section reconciles non-GAAP tangible book value per common share, which increased to $34.27 as of March 31, 2024 Reconciliation of Book Value to Tangible Book Value per Share | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--- | :--- | :--- | :--- | | Book Value per Common Share | $35.31 | $34.66 | $33.34 | | Tangible Book Value per Common Share | $34.27 | $33.62 | $32.30 |