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): October 28, 2013 (October 22, 2013)

 


 

BankUnited, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-35039

 

27-0162450

(State of Incorporation)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

14817 Oak Lane

Miami Lakes, FL 33016

(Address of principal executive offices) (Zip Code)

 

(305) 569-2000

(Registrant’s telephone number, including area code)

 

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:

 

o                  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 8.01                                           Other Events.

 

On October 22, 2013, BankUnited, Inc. (the “Company”) reported its results for the quarter ended September 30, 2013:

 

For the quarter ended September 30, 2013, the Company reported net income of $54.3 million, or $0.52 per diluted share, as compared to $49.6 million, or $0.48 per diluted share, for the quarter ended September 30, 2012.

 

For the nine months ended September 30, 2013, the Company reported net income of $156.5 million, or $1.51 per diluted share, generating an annualized return on average stockholders’ equity of 11.27% and an annualized return on average assets of 1.61%.  The Company reported net income of $148.8 million, or $1.44 per diluted share, for the nine months ended September 30, 2012.

 

Performance Highlights

 

·                  New loans grew by $1.1 billion during the third quarter of 2013.  For the nine months ended September 30, 2013, new loans increased by $2.5 billion to $6.2 billion.

 

·                  Total deposits increased by $817 million for the quarter ended September 30, 2013 to $9.8 billion, reflecting growth across all deposit categories. For the nine months ended September 30, 2013, total deposits grew by $1.3 billion.

 

·                  The net interest margin, calculated on a tax-equivalent basis, was 5.70% for the quarter ended September 30, 2013.

 

·                  Earnings for the quarter ended September 30, 2013 benefited from a reduction in the effective income tax rate, primarily due to a $3.6 million release of reserves for uncertain tax liabilities.

 

·                  Book value and tangible book value per common share were $18.70 and $18.01, respectively, at September 30, 2013.

 

Capital

 

The Company and its banking subsidiary continue to exceed all regulatory guidelines required to be considered well capitalized. The Company’s regulatory capital ratios at September 30, 2013 were as follows:

 

Tier 1 leverage

 

13.1

%

 

 

 

 

Tier 1 risk-based capital

 

24.1

%

 

 

 

 

Total risk-based capital

 

25.0

%

 

Loans and Leases

 

Loans, net of premiums, discounts and deferred fees and costs, increased to $7.8 billion at September 30, 2013 from $5.6 billion at December 31, 2012.  New loans grew by $2.5 billion to $6.2 billion at September 30, 2013 from $3.7 billion at December 31, 2012.  Covered loans declined to $1.6 billion at September 30, 2013 from $1.9 billion at December 31, 2012.

 

For the quarter ended September 30, 2013, new commercial loans, including commercial loans, commercial real estate loans and leases, grew $762 million to $4.5 billion, reflecting the continued success of lending operations in New York, further expansion of market share in Florida and growth of the lending subsidiaries. New residential loans grew by $270 million to $1.6 billion during the third quarter of 2013, primarily as a result of the continuation of the Company’s residential loan purchase program.

 

A comparison of portfolio composition at September 30, 2013 and December 31, 2012 follows:

 

2



 

 

 

New Loans

 

Total Loans

 

 

 

September 30,

 

December 31,

 

September 30,

 

December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

Single family residential and home equity

 

25.9

%

25.0

%

38.0

%

45.3

%

Commercial real estate

 

35.0

%

31.8

%

30.6

%

25.6

%

Commercial

 

36.7

%

42.3

%

29.5

%

28.5

%

Consumer

 

2.4

%

0.9

%

1.9

%

0.6

%

 

 

100.0

%

100.0

%

100.0

%

100.0

%

 

The Company’s portfolio of equipment under operating lease grew by $99.7 million for the quarter ended September 30, 2013 to $185.0 million.

 

Asset Quality

 

Asset quality remained strong. Credit risk continues to be limited, though to a declining extent, by the Loss Sharing Agreements with the FDIC.  At September 30, 2013, covered loans represented 19.9% of the total loan portfolio, as compared to 33.5% at December 31, 2012.

 

The ratio of non-performing new loans to total new loans was 0.39% at September 30, 2013 and 0.43% at December 31, 2012. The ratio of total non-performing loans to total loans was 0.50% at September 30, 2013 as compared to 0.62% at December 31, 2012.  At September 30, 2013, non-performing assets totaled $87.2 million, including $48.5 million of other real estate owned (“OREO”), as compared to $110.6 million, including $76.0 million of OREO, at December 31, 2012. At September 30, 2013, 71% of total non-performing assets were covered assets.

 

For the quarters ended September 30, 2013 and 2012, the Company recorded provisions for loan losses of $2.6 million and $6.4 million, respectively.  Of these amounts, $(2.8) million and $1.0 million, respectively, related to provisions for (recoveries of) covered loans, and $5.4 million and $5.4 million, respectively, related to provisions for new loans.

 

For the nine months ended September 30, 2013 and 2012, the Company recorded provisions for loan losses of $19.5 million and $17.9 million, respectively.  Of these amounts, $(1.0) million and $1.1 million, respectively, related to provisions for (recoveries of) covered loans, and $20.4 million and $16.7 million, respectively, related to provisions for new loans.

 

The provisions related to new loans reflect growth in the new loan portfolio offset in part by reductions in general loss factors. For the nine months ended September 30, 2013, the provision for new loans was also impacted by specific reserves recognized on impaired loans, particularly related to one commercial relationship.

 

The provisions (recoveries) related to covered loans were significantly mitigated by offsetting increases or decreases in non-interest income recorded in “Net loss on indemnification asset.”

 

The following tables summarize the activity in the allowance for loan and lease losses for the three and nine months ended September 30, 2013 and 2012 (in thousands):

 

 

 

Three Months Ended September 30, 2013

 

Three Months Ended September 30, 2012

 

 

 

ACI Loans

 

Non-ACI
Loans

 

New Loans

 

Total

 

ACI Loans

 

Non-ACI
Loans

 

New Loans

 

Total

 

Balance at beginning of period

 

$

4,304

 

$

13,908

 

$

40,219

 

$

58,431

 

$

11,085

 

$

9,878

 

$

34,672

 

$

55,635

 

Provision

 

(842

)

(1,995

)

5,441

 

2,604

 

(867

)

1,888

 

5,353

 

6,374

 

Charge-offs

 

(117

)

(1,317

)

(586

)

(2,020

)

(296

)

(1,032

)

(578

)

(1,906

)

Recoveries

 

 

147

 

457

 

604

 

 

131

 

182

 

313

 

Balance at end of period

 

$

3,345

 

$

10,743

 

$

45,531

 

$

59,619

 

$

9,922

 

$

10,865

 

$

39,629

 

$

60,416

 

 

3



 

 

 

Nine Months Ended September 30, 2013

 

Nine Months Ended September 30, 2012

 

 

 

ACI Loans

 

Non-ACI
Loans

 

New Loans

 

Total

 

ACI Loans

 

Non-ACI
Loans

 

New Loans

 

Total

 

Balance at beginning of period

 

$

8,019

 

$

9,874

 

$

41,228

 

$

59,121

 

$

16,332

 

$

7,742

 

$

24,328

 

$

48,402

 

Provision

 

(2,440

)

1,452

 

20,440

 

19,452

 

(3,649

)

4,786

 

16,729

 

17,866

 

Charge-offs

 

(2,234

)

(3,223

)

(16,837

)

(22,294

)

(2,761

)

(3,072

)

(1,694

)

(7,527

)

Recoveries

 

 

2,640

 

700

 

3,340

 

 

1,409

 

266

 

1,675

 

Balance at end of period

 

$

3,345

 

$

10,743

 

$

45,531

 

$

59,619

 

$

9,922

 

$

10,865

 

$

39,629

 

$

60,416

 

 

Deposits

 

At September 30, 2013, deposits totaled $9.8 billion compared to $8.5 billion at December 31, 2012.  Demand deposits, including non-interest bearing and interest bearing deposits, comprised 23% of total deposits at September 30, 2013.  The average cost of deposits was 0.64% for the quarter ended September 30, 2013 as compared to 0.78% for the quarter ended September 30, 2012 and 0.66% for the nine months ended September 30, 2013 as compared to 0.84% for the nine months ended September 30, 2012.  The decrease in the average cost of deposits was attributable to both the growth in non-interest bearing deposits as a percentage of average total deposits and a decline in market rates of interest. Excluding the impact of hedge accounting and accretion of fair value adjustments, the average cost of deposits was 0.59% and 0.61%, respectively, for the three and nine months ended September 30, 2013.

 

Net interest income

 

Net interest income for the quarter ended September 30, 2013 grew to $164.1 million from $139.4 million for the quarter ended September 30, 2012. Net interest income for the nine months ended September 30, 2013 was $482.0 million as compared to $423.0 million for the nine months ended September 30, 2012.

 

The Company’s net interest margin, calculated on a tax-equivalent basis, was 5.70% for the quarter ended September 30, 2013 as compared to 5.47% for the quarter ended September 30, 2012.  Net interest margin, calculated on a tax-equivalent basis, was 5.92% for the nine months ended September 30, 2013 as compared to 5.82% for the nine months ended September 30, 2012. Significant factors impacting the trend in net interest margin for the three and nine months ended September 30, 2013 included:

 

·           The tax-equivalent yield on loans declined to 8.83% and 9.79%, respectively, for the three and nine months ended September 30, 2013 compared to 10.79% and 11.80% for the corresponding periods in 2012, primarily because new loans, originated at yields lower than those on the covered loan portfolio, comprised a greater percentage of total loans.

 

·           The yield on new loans decreased to 3.71% and 3.85%, respectively, for the quarter and nine months ended September 30, 2013 from 4.29% and 4.44% for the quarter and nine months ended September 30, 2012, primarily reflecting lower market interest rates.

 

·           The yield on covered loans increased to 26.91% and 25.93%, respectively, for the quarter and nine months ended September 30, 2013 from 20.07% and 20.02% for the quarter and nine months ended September 30, 2012. The increase in the yield on covered loans was impacted by (i) improvements in expected cash flows and (ii) the inclusion in interest income for the quarter and nine months ended September 30, 2013 of proceeds of $13.2 million and $39.0 million, respectively, from the sale of ACI residential loans from a pool with a carrying value of zero.

 

·           Loans, which are higher yielding than other types of interest earning assets, comprised a higher percentage of average interest earning assets for the three and nine months ended September 30, 2013 as compared to the corresponding periods in 2012.

 

·           The average rate on interest bearing liabilities declined to 0.93% and 0.96%, respectively, for the quarter and nine months ended September 30, 2013 from 1.31% and 1.38% for the corresponding periods in 2012, primarily due to declining market interest rates.

 

4



 

As anticipated, the net interest margin for the quarter ended September 30, 2013 declined by 0.44% in comparison to the immediately preceding quarter, largely due to a decline in the average yield on loans. This decline resulted primarily from continued growth of new loans as a percentage of the total loan portfolio. The cost of interest bearing liabilities remained relatively stable quarter over quarter.

 

The Company’s net interest margin has been impacted by reclassifications from non-accretable difference to accretable yield on ACI loans.  Non-accretable difference at acquisition represented the difference between the total contractual payments due and the cash flows expected to be received on these loans.  The accretable yield on ACI loans represented the amount by which undiscounted expected future cash flows exceeded the carrying value of the loans.  As the Company’s expected cash flows from ACI loans have increased since the FSB Acquisition (as defined below), the Company has reclassified amounts from non-accretable difference to accretable yield.

 

Changes in accretable yield on ACI loans for the nine months ended September 30, 2013 and the year ended December 31, 2012 were as follows (in thousands):

 

Balance, December 31, 2011

 

$

1,523,615

 

Reclassification from non-accretable difference

 

206,934

 

Accretion

 

(444,483

)

Balance, December 31, 2012

 

1,286,066

 

Reclassification from non-accretable difference

 

231,070

 

Accretion

 

(313,326

)

Balance, September 30, 2013

 

$

1,203,810

 

 

Non-interest income

 

Non-interest income totaled $1.3 million and $25.2 million for the quarter and nine months ended September 30, 2013 as compared to $25.7 million and $83.7 million for the quarter and nine months ended September 30, 2012.

 

As anticipated, in 2013, the Company began amortizing the FDIC indemnification asset. In prior periods, we recorded accretion of discount on the FDIC indemnification asset.  Non-interest income included amortization of the FDIC indemnification asset of $(12.4) million and $(21.8) million, respectively, for the quarter and nine months ended September 30, 2013 compared to accretion of $3.4 million and $14.5 million, respectively, for the quarter and nine months ended September 30, 2012. As the expected cash flows from ACI loans have increased as discussed above, expected cash flows from the FDIC indemnification asset have decreased.

 

Income from resolution of covered assets, net was $24.6 million and $64.4 million, respectively, for the quarter and nine months ended September 30, 2013 compared to $17.5 million and $39.6 million for the quarter and nine months ended September 30, 2012. This increase in income resulted mainly from higher income from commercial recoveries and lower losses from residential foreclosure resolutions.

 

Net loss on indemnification asset was $(18.4) million and $(47.7) million, respectively, for the quarter and nine months ended September 30, 2013, compared to $(14.2) million and $(26.6) million for the quarter and nine months ended September 30, 2012.  This line item represents the mitigating impact of FDIC indemnification on gains and losses arising from certain transactions related to the covered assets. Significant factors impacting these variances included increased income from resolution of covered assets, net, fluctuations in the provision for (recovery of) losses on covered loans, the loss on sale of covered loans, reduced OREO impairment and more favorable results from the sale of OREO.

 

Loss on the sale of covered loans was $4.3 million and $9.4 million for the quarter and nine months ended September 30, 2013. No covered loans were sold during the quarter and nine months ended September 30, 2012.

 

Gains on investment securities available for sale for the quarter and nine months ended September 30, 2013 related primarily to sales of securities to fund loan originations. Securities gains for the nine months ended September 30, 2013 also included gains of $1.6 million from the sale of securities in conjunction with the merger of Herald National Bank (“Herald”) into BankUnited.  The quarter and nine months ended September 30, 2012 included

 

5



 

approximately $6.0 million of aggregate realized gains from the liquidation of our position in non-investment grade and certain other preferred stock positions in order to reduce our concentration in bank preferred stock investments.

 

Declines in FDIC reimbursement of costs of resolution of covered assets and mortgage insurance income reflect the lower volume of covered loan foreclosure resolution activity.

 

Non-interest expense

 

Non-interest expense totaled $84.3 million and $243.1 million, respectively, for the quarter and nine months ended September 30, 2013 as compared to $77.2 million and $244.4 million for the quarter and nine months ended September 30, 2012.

 

Employee compensation and benefits for the nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012 reflected a decrease of $10.2 million in equity-based compensation resulting primarily from the vesting in 2012 of instruments issued in conjunction with the Company’s initial public offering of common stock in 2011.  Increased compensation costs related to the Company’s growth and expansion into New York largely offset this decrease in equity-based compensation and drove an increase in employee compensation and benefits of $2.1 million for the three months ended September 30, 2013 as compared to the three months ended September 30, 2012.

 

Occupancy and equipment expense increased to $16.6 million and $47.0 million, respectively, for the quarter and nine months ended September 30, 2013 from $13.7 million and $38.8 million for the quarter and nine months ended September 30, 2012 due primarily to our expansion into New York and the growth and refurbishment of our branch network in Florida.

 

For the quarter and nine months ended September 30, 2013, the aggregate of foreclosure and OREO expense was $2.8 million and $7.4 million, respectively, as compared to $4.8 million and $14.9 million for the quarter and nine months ended September 30, 2012.  For the quarter and nine months ended September 30, 2013, the net amount of gain on sale of OREO and impairment of OREO was $(1.7) million and $(7.1) million, respectively, as compared to (gain) loss of $(25) thousand and $6.5 million for the quarter and nine months ended September 30, 2012.  These changes reflect continuing trends of lower levels of OREO and foreclosure activity and an improving real estate market.

 

Provision for income taxes

 

The effective income tax rate decreased to 30.9% and 36.0%, for the three and nine months ended September 30, 2013 from 39.2% for both the three and nine months ended September 30, 2012.  The decrease reflects the release in the third quarter of 2013 of $3.6 million in reserves for uncertain state income tax positions as a result of the lapse in the statute of limitations related thereto.

 

About BankUnited, Inc. and the FSB Acquisition

 

BankUnited, Inc. is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with $14.1 billion of assets, 98 banking centers in 15 Florida counties and 5 banking centers in the New York metropolitan area at September 30, 2013.

 

The Company was organized by a management team led by its Chairman, President and Chief Executive Officer, John A. Kanas in 2009.  On May 21, 2009, BankUnited acquired substantially all of the assets and assumed all of the non-brokered deposits and substantially all other liabilities of BankUnited, FSB from the FDIC, in a transaction referred to as the FSB Acquisition.  Concurrently with the FSB Acquisition, BankUnited entered into two loss sharing agreements, or the Loss Sharing Agreements, which covered certain legacy assets, including the entire legacy loan portfolio and OREO, and certain purchased investment securities.  Assets covered by the Loss Sharing Agreements are referred to as “covered assets” (or, in certain cases, “covered loans”). The Loss Sharing Agreements do not apply to subsequently purchased or originated loans (“new loans”) or other assets.  Pursuant to the terms of the Loss Sharing Agreements, the covered assets are subject to a stated loss threshold whereby the FDIC will reimburse BankUnited for 80% of losses, including certain interest and expenses, up to the $4.0 billion stated threshold and 95% of losses in excess of the $4.0 billion stated threshold.  The Company’s current estimate of

 

6



 

cumulative losses on the covered assets is approximately $4.3 billion.  The Company has received $2.5 billion from the FDIC in reimbursements under the Loss Sharing Agreements for claims filed for incurred losses as of September 30, 2013.

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance.  The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words.  Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations.  The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved.  Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity.  If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements.  These factors should not be construed as exhaustive.  The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.  A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements.  Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 available at the SEC’s website (www.sec.gov).

 

7



 

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)

 

 

 

September 30,

 

December 31,

 

 

 

2013

 

2012

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks:

 

 

 

 

 

Non-interest bearing

 

$

42,360

 

$

61,088

 

Interest bearing

 

16,854

 

21,507

 

Interest bearing deposits at Federal Reserve Bank

 

463,311

 

408,827

 

Federal funds sold

 

3,154

 

3,931

 

Cash and cash equivalents

 

525,679

 

495,353

 

Investment securities available for sale, at fair value (including covered securities of $206,666 and $226,505)

 

3,871,948

 

4,172,412

 

Non-marketable equity securities

 

149,816

 

133,060

 

Loans held for sale

 

844

 

2,129

 

Loans (including covered loans of $1,550,974 and $1,864,375)

 

7,806,563

 

5,571,739

 

Allowance for loan and lease losses

 

(59,619

)

(59,121

)

Loans, net

 

7,746,944

 

5,512,618

 

FDIC indemnification asset

 

1,265,037

 

1,457,570

 

Bank owned life insurance

 

206,296

 

207,069

 

Other real estate owned (including covered OREO of $47,546 and $76,022)

 

48,510

 

76,022

 

Deferred tax asset, net

 

79,954

 

62,274

 

Goodwill and other intangible assets

 

69,240

 

69,768

 

Other assets

 

343,746

 

187,678

 

Total assets

 

$

14,308,014

 

$

12,375,953

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Demand deposits:

 

 

 

 

 

Non-interest bearing

 

$

1,680,004

 

$

1,312,779

 

Interest bearing

 

632,159

 

542,561

 

Savings and money market

 

4,429,034

 

4,042,022

 

Time

 

3,106,906

 

2,640,711

 

Total deposits

 

9,848,103

 

8,538,073

 

Short-term borrowings

 

6,015

 

8,175

 

Federal Home Loan Bank advances and other borrowings

 

2,363,745

 

1,916,919

 

Other liabilities

 

204,337

 

106,106

 

Total liabilities

 

12,422,200

 

10,569,273

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 100,860,270 and 95,006,729 shares issued and outstanding

 

1,009

 

950

 

Preferred stock, par value $0.01 per share, 100,000,000 shares authorized; 5,415,794 shares of Series A issued and outstanding at December 31, 2012

 

 

54

 

Paid-in capital

 

1,327,164

 

1,308,315

 

Retained earnings

 

504,702

 

413,385

 

Accumulated other comprehensive income

 

52,939

 

83,976

 

Total stockholders’ equity

 

1,885,814

 

1,806,680

 

Total liabilities and stockholders’ equity

 

$

14,308,014

 

$

12,375,953

 

 

8



 

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans

 

$

158,332

 

$

137,039

 

$

458,183

 

$

415,957

 

Investment securities available for sale

 

27,993

 

32,149

 

88,194

 

99,247

 

Other

 

1,359

 

1,117

 

3,780

 

3,306

 

Total interest income

 

187,684

 

170,305

 

550,157

 

518,510

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

15,248

 

16,459

 

44,287

 

50,466

 

Borrowings

 

8,318

 

14,429

 

23,915

 

45,021

 

Total interest expense

 

23,566

 

30,888

 

68,202

 

95,487

 

Net interest income before provision for (recovery of) loan losses

 

164,118

 

139,417

 

481,955

 

423,023

 

Provision for (recovery of) loan losses (including $(2,837), $1,021, $(988) and $1,137 for covered loans)

 

2,604

 

6,374

 

19,452

 

17,866

 

Net interest income after provision for (recovery of) loan losses

 

161,514

 

133,043

 

462,503

 

405,157

 

Non-interest income:

 

 

 

 

 

 

 

 

 

(Amortization) accretion of FDIC indemnification asset

 

(12,354

)

3,432

 

(21,784

)

14,513

 

Income from resolution of covered assets, net

 

24,592

 

17,517

 

64,362

 

39,602

 

Net loss on indemnification asset

 

(18,377

)

(14,199

)

(47,747

)

(26,602

)

FDIC reimbursement of costs of resolution of covered assets

 

2,040

 

3,566

 

7,165

 

13,415

 

Service charges and fees

 

3,634

 

3,095

 

10,355

 

9,440

 

Gain (loss) on sale of loans, net (including loss related to covered loans of $(4,286) and $(9,368) for the three and nine months ended September 30, 2013)

 

(4,081

)

189

 

(8,782

)

698

 

Gain on investment securities available for sale, net (including loss related to covered securities of $(963) for the nine months ended September 30, 2013)

 

1,066

 

6,035

 

6,288

 

6,931

 

Mortgage insurance income

 

310

 

2,571

 

1,212

 

8,910

 

Other non-interest income

 

4,476

 

3,478

 

14,160

 

16,841

 

Total non-interest income

 

1,306

 

25,684

 

25,229

 

83,748

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

44,117

 

41,968

 

130,219

 

132,544

 

Occupancy and equipment

 

16,571

 

13,725

 

46,994

 

38,776

 

Impairment (recovery) of other real estate owned

 

(243

)

1,385

 

1,456

 

7,980

 

Gain on sale of other real estate owned

 

(1,454

)

(1,410

)

(8,576

)

(1,499

)

Other real estate owned expense

 

533

 

1,756

 

2,663

 

5,193

 

Foreclosure expense

 

2,270

 

3,060

 

4,769

 

9,671

 

Deposit insurance expense

 

1,926

 

2,040

 

5,587

 

5,136

 

Professional fees

 

4,831

 

3,850

 

17,212

 

11,452

 

Telecommunications and data processing

 

2,842

 

3,379

 

9,694

 

9,730

 

Other non-interest expense

 

12,870

 

7,469

 

33,101

 

25,388

 

Total non-interest expense

 

84,263

 

77,222

 

243,119

 

244,371

 

Income before income taxes

 

78,557

 

81,505

 

244,613

 

244,534

 

Provision for income taxes

 

24,248

 

31,948

 

88,070

 

95,776

 

Net income

 

54,309

 

49,557

 

156,543

 

148,758

 

Preferred stock dividends

 

 

921

 

 

2,762

 

Net income available to common stockholders

 

$

54,309

 

$

48,636

 

$

156,543

 

$

145,996

 

Earnings per common share, basic

 

$

0.52

 

$

0.48

 

$

1.52

 

$

1.45

 

Earnings per common share, diluted

 

$

0.52

 

$

0.48

 

$

1.51

 

$

1.44

 

Cash dividends declared per common share

 

$

0.21

 

$

0.17

 

$

0.63

 

$

0.51

 

 

9



 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

 

Three Months Ended September 30,

 

 

 

2013

 

2012

 

 

 

Average

 

 

 

Yield/

 

Average

 

 

 

Yield/

 

 

 

Balance

 

Interest (1)

 

Rate (2)

 

Balance

 

Interest (1)

 

Rate (2)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

7,234,822

 

$

160,257

 

8.83

%

$

5,117,295

 

$

138,252

 

10.79

%

Investment securities available for sale

 

4,030,197

 

28,670

 

2.85

%

4,658,274

 

33,082

 

2.84

%

Other interest earning assets

 

416,185

 

1,359

 

1.30

%

559,889

 

1,117

 

0.80

%

Total interest earning assets

 

11,681,204

 

190,286

 

6.50

%

10,335,458

 

172,451

 

6.66

%

Allowance for loan and lease losses

 

(61,792

)

 

 

 

 

(56,392

)

 

 

 

 

Non-interest earning assets

 

2,009,626

 

 

 

 

 

2,372,698

 

 

 

 

 

Total assets

 

$

13,629,038

 

 

 

 

 

$

12,651,764

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

 

$

571,884

 

636

 

0.44

%

$

505,657

 

824

 

0.65

%

Savings and money market deposits

 

4,342,628

 

5,191

 

0.47

%

3,989,263

 

5,867

 

0.59

%

Time deposits

 

2,927,537

 

9,421

 

1.28

%

2,661,285

 

9,768

 

1.46

%

Total interest bearing deposits

 

7,842,049

 

15,248

 

0.77

%

7,156,205

 

16,459

 

0.91

%

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

FHLB advances and other borrowings

 

2,198,613

 

8,316

 

1.50

%

2,225,235

 

14,420

 

2.58

%

Short-term borrowings

 

1,118

 

2

 

0.50

%

7,952

 

9

 

0.43

%

Total interest bearing liabilities

 

10,041,780

 

23,566

 

0.93

%

9,389,392

 

30,888

 

1.31

%

Non-interest bearing demand deposits

 

1,568,407

 

 

 

 

 

1,199,577

 

 

 

 

 

Other non-interest bearing liabilities

 

144,231

 

 

 

 

 

335,193

 

 

 

 

 

Total liabilities

 

11,754,418

 

 

 

 

 

10,924,162

 

 

 

 

 

Stockholders’ equity

 

1,874,620

 

 

 

 

 

1,727,602

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

13,629,038

 

 

 

 

 

$

12,651,764

 

 

 

 

 

Net interest income

 

 

 

$

166,720

 

 

 

 

 

$

141,563

 

 

 

Interest rate spread

 

 

 

 

 

5.57

%

 

 

 

 

5.35

%

Net interest margin

 

 

 

 

 

5.70

%

 

 

 

 

5.47

%

 


(1) On a tax-equivalent basis where applicable

(2) Annualized

 

10



 

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

 

 

Average

 

 

 

Yield/

 

Average

 

 

 

Yield/

 

 

 

Balance

 

Interest (1)

 

Rate (2)

 

Balance

 

Interest (1)

 

Rate (2)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

6,311,252

 

$

463,144

 

9.79

%

$

4,736,869

 

$

418,835

 

11.80

%

Investment securities available for sale

 

4,245,236

 

90,327

 

2.84

%

4,582,143

 

103,129

 

3.00

%

Other interest earning assets

 

471,625

 

3,780

 

1.07

%

535,912

 

3,306

 

0.82

%

Total interest earning assets

 

11,028,113

 

557,251

 

6.74

%

9,854,924

 

525,270

 

7.11

%

Allowance for loan and lease losses

 

(62,272

)

 

 

 

 

(54,540

)

 

 

 

 

Non-interest earning assets

 

2,060,332

 

 

 

 

 

2,408,962

 

 

 

 

 

Total assets

 

$

13,026,173

 

 

 

 

 

$

12,209,346

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand deposits

 

$

562,299

 

1,945

 

0.46

%

$

494,331

 

2,406

 

0.65

%

Savings and money market deposits

 

4,208,333

 

15,175

 

0.48

%

3,870,050

 

18,790

 

0.65

%

Time deposits

 

2,734,198

 

27,167

 

1.33

%

2,621,599

 

29,270

 

1.49

%

Total interest bearing deposits

 

7,504,830

 

44,287

 

0.79

%

6,985,980

 

50,466

 

0.96

%

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

FHLB advances and other borrowings

 

2,026,828

 

23,896

 

1.58

%

2,229,674

 

44,976

 

2.69

%

Short-term borrowings

 

5,977

 

19

 

0.43

%

14,777

 

45

 

0.41

%

Total interest bearing liabilities

 

9,537,635

 

68,202

 

0.96

%

9,230,431

 

95,487

 

1.38

%

Non-interest bearing demand deposits

 

1,458,849

 

 

 

 

 

1,040,153

 

 

 

 

 

Other non-interest bearing liabilities

 

172,342

 

 

 

 

 

276,857

 

 

 

 

 

Total liabilities

 

11,168,826

 

 

 

 

 

10,547,441

 

 

 

 

 

Stockholders’ equity

 

1,857,347

 

 

 

 

 

1,661,905

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

13,026,173

 

 

 

 

 

$

12,209,346

 

 

 

 

 

Net interest income

 

 

 

$

489,049

 

 

 

 

 

$

429,783

 

 

 

Interest rate spread

 

 

 

 

 

5.78

%

 

 

 

 

5.73

%

Net interest margin

 

 

 

 

 

5.92

%

 

 

 

 

5.82

%

 


(1) On a tax-equivalent basis where applicable

(2) Annualized

 

11



 

BANKUNITED, INC. AND SUBSIDIARIES

EARNINGS PER COMMON SHARE

(In thousands except share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income

 

$

54,309

 

$

49,557

 

$

156,543

 

$

148,758

 

Preferred stock dividends

 

 

(921

)

 

(2,762

)

Net income available to common stockholders

 

54,309

 

48,636

 

156,543

 

145,996

 

Distributed and undistributed earnings allocated to participating securities

 

(2,132

)

(3,536

)

(7,427

)

(10,505

)

Income allocated to common stockholders for basic earnings per common share

 

$

52,177

 

$

45,100

 

$

149,116

 

$

135,491

 

Denominator:

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

100,737,319

 

94,196,429

 

99,131,377

 

94,856,763

 

Less average unvested stock awards

 

(1,085,044

)

(746,934

)

(1,118,496

)

(1,184,068

)

Weighted average shares for basic earnings per common share

 

99,652,275

 

93,449,495

 

98,012,881

 

93,672,695

 

Basic earnings per common share

 

$

0.52

 

$

0.48

 

$

1.52

 

$

1.45

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

Income allocated to common stockholders for basic earnings per common share

 

$

52,177

 

$

45,100

 

$

149,116

 

$

135,491

 

Adjustment for earnings reallocated from participating securities

 

4

 

2,615

 

1,264

 

15

 

Income used in calculating diluted earnings per common share

 

$

52,181

 

$

47,715

 

$

150,380

 

$

135,506

 

Denominator:

 

 

 

 

 

 

 

 

 

Average shares for basic earnings per common share

 

99,652,275

 

93,449,495

 

98,012,881

 

93,672,695

 

Dilutive effect of stock options and preferred shares

 

196,190

 

5,613,427

 

1,626,264

 

187,582

 

Weighted average shares for diluted earnings per common share

 

99,848,465

 

99,062,922

 

99,639,145

 

93,860,277

 

Diluted earnings per common share

 

$

0.52

 

$

0.48

 

$

1.51

 

$

1.44

 

 

12



 

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended September
30,

 

Financial ratios

 

2013 (4)

 

2012 (4)

 

2013 (4)

 

2012 (4)

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

1.58

%

1.56

%

1.61

%

1.63

%

Return on average stockholders’ equity

 

11.49

%

11.41

%

11.27

%

11.96

%

Net interest margin (5)

 

5.70

%

5.47

%

5.92

%

5.82

%

 

 

 

September 30,

 

December 31,

 

 

 

 

 

Capital ratios

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage

 

13.11

%

13.16

%

 

 

 

 

Tier 1 risk-based capital

 

24.10

%

33.60

%

 

 

 

 

Total risk-based capital

 

24.97

%

34.88

%

 

 

 

 

 

 

 

September 30, 2013

 

December 31, 2012

 

Asset quality ratios

 

Non-Covered

 

Total

 

Non-Covered

 

Total

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans to total loans (1) (3)

 

0.39

%

0.50

%

0.43

%

0.62

%

Non-performing assets to total assets (2)

 

0.18

%

0.61

%

0.13

%

0.89

%

Allowance for loan and lease losses to total loans (3)

 

0.73

%

0.76

%

1.11

%

1.06

%

Allowance for loan and lease losses to non-performing loans (1)

 

186.06

%

153.98

%

256.65

%

171.21

%

Net charge-offs to average loans (4)

 

0.47

%

0.40

%

0.09

%

0.17

%

 


(1)         We define non-performing loans to include nonaccrual loans, loans, other than ACI loans, that are past due 90 days or more and still accruing and certain loans modified in troubled debt restructurings.  Contractually delinquent ACI loans on which interest continues to be accreted are excluded from non-performing loans.

 

(2)         Non-performing assets include non-performing loans and other real estate owned.

 

(3)         Total loans is net of unearned discounts, premiums and deferred fees and costs.

 

(4)         Annualized.

 

(5)         On a tax-equivalent basis.

 

13



 

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: October 28, 2013

BANKUNITED, INC.

 

 

 

/s/ Leslie Lunak

 

Name:

Leslie Lunak

 

Title:

Chief Financial Officer

 

14