Bankunited, Inc. (BKU) 8-K Earnings Release

Miami Lakes, Fla. — January 26, 2024 — BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter and year ended December 31, 2023.

"We finished the year with continued improvement on both sides of our balance sheet, expanding margin and strong credit performance. We are benefiting from a strong economy in our primary market and are looking forward to 2024 with great optimism" said Rajinder Singh, Chairman, President and Chief Executive Officer.

For the quarter ended December 31, 2023, the Company reported net income of $20.8 million, or $0.27 per diluted share, compared to $47.0 million, or $0.63 per diluted share, for the immediately preceding quarter ended September 30, 2023 and $64.2 million, or $0.82 per diluted share, for the quarter ended December 31, 2022. For the year ended December 31, 2023, the Company reported net income of $178.7 million, or $2.38 per diluted share, compared to $285.0 million, or $3.54 per diluted share, for the year ended December 31, 2022. Results for the quarter ended December 31, 2023 were negatively impacted by $41.8 million of notable items impacting income before taxes, related to the FDIC special assessment and a loss on sale of operating lease equipment as detailed below.

Quarterly Highlights

•Two notable items totaling $41.8 million impacted income before income taxes for the quarter ended December 31, 2023 (in thousands):



FDIC special assessment	$	35,356
Loss on sale of operating lease equipment	6,479
	$	41,835

The loss on sale of operating lease equipment of $6.5 million compares to a gain of $4.2 million on sale of operating lease equipment in the immediately preceding quarter, for a variance of $10.7 million.

•We continued to execute on near-term strategic priorities this quarter:

◦The net interest margin, calculated on a tax-equivalent basis, expanded this quarter to 2.60% from 2.56% for the immediately preceding quarter.

◦Non-brokered deposits grew by $604 million for the quarter ended December 31, 2023. Total deposits grew by $426 million.

◦Non-interest bearing deposits declined by $521 million for the quarter, to 26% of total deposits at December 31, 2023, from 28% at September 30, 2023. On an average basis, non-interest bearing deposits were relatively flat to the prior quarter, declining by only $28.5 million. Most of the period-end decline was attributable to quarter-end outflows related to seasonality in the residential real estate sector, impacting our title solutions vertical and other mortgage related deposits.

◦Residential loans declined by $172 million for the quarter, while our core C&I and commercial real estate portfolios grew by a total of $476 million. Since December 31, 2022, residential loans have declined by $692 million.

◦The amortized cost of the investment securities portfolio declined by $106 million during the quarter ended December 31, 2023 and has declined by $959 million since December 31, 2022.

◦Wholesale funding, including FHLB advances and brokered deposits, declined by $228 million for the quarter. We have paid down FHLB advances by $2.4 billion since March 31, 2023.

◦Liquidity remains ample. Total same day available liquidity was $13.6 billion, the available liquidity to uninsured, uncollateralized deposits ratio was 152% and an estimated 66% of our deposits were insured or collateralized at December 31, 2023.

◦Our capital position is robust. At December 31, 2023, CET1 was 11.4% at a consolidated level. Pro-forma CET1, including accumulated other comprehensive income, was 10.0% at December 31, 2023. The ratio of tangible common equity/tangible assets increased to 7.0% at December 31, 2023.

•For the quarter ended December 31, 2023, the provision for credit losses was $19.3 million compared to $33.0 million for the immediately preceding quarter. The ratio of the ACL to total loans increased to 0.82% at December 31, 2023, from 0.80% at September 30, 2023.

•The net charge-off ratio for the year ended December 31, 2023 was 0.09%. NPAs remained low, totaling $130.6 million at December 31, 2023, down from $140.5 million at September 30, 2023. The NPA ratio at December 31, 2023 declined to 0.37%, including 0.12% related to the guaranteed portion of non-performing SBA loans, from 0.40%, including 0.11% related to the guaranteed portion of non-performing SBA loans at September 30, 2023.

•As expected in the current macro-environment, the average cost of total deposits increased to 2.96% for the quarter ended December 31, 2023 from 2.74% for the immediately preceding quarter. This increase of 0.22% was smaller than the 0.28% increase in the cost of deposits for the quarter ended September 30, 2023, continuing the trend of a declining rate of increase in deposit costs. The yield on average interest earning assets increased to 5.70% for the quarter ended December 31, 2023 from 5.52% for the immediately preceding quarter.

•Our commercial real estate exposure is modest. Commercial real estate loans totaled 23.6% of loans at December 31, 2023, representing 169% of the Bank's total risk based capital. At December 31, 2023, the weighted average LTV of the CRE portfolio was 56.0% and the weighted average DSCR was 1.80. 58% of the portfolio was secured by collateral properties located in Florida and 25% was secured by properties in the New York tri-state area.

•We remain committed to keeping the duration of our securities portfolio short; the duration of the available for sale securities portfolio was 1.96 at December 31, 2023. Held to maturity securities were not significant.

•The net unrealized pre-tax loss on the securities portfolio improved by $109 million for the quarter ended December 31, 2023, now representing 6% of amortized cost. AOCI improved by $50 million.

•Book value and tangible book value per common share continued to grow, to $34.66 and $33.62, respectively, at December 31, 2023, compared to $33.92 and $32.88, respectively, at September 30, 2023 and $32.19 and $31.16, respectively, at December 31, 2022.

Loans

A comparison of loan portfolio composition at the dates indicated follows (dollars in thousands):


	December 31, 2023				September 30, 2023				December 31, 2022
Residential	$	8,209,027	33.3	%	$	8,380,568	34.4	%		$	8,900,714	35.7	%

Non-owner occupied commercial real estate	5,323,241		21.6	%	5,296,784		21.7	%		5,405,597		21.7	%
Construction and land	495,992		2.0	%	445,273		1.8	%		294,360		1.2	%
Owner occupied commercial real estate	1,935,743		7.9	%	1,851,246		7.6	%		1,890,813		7.6	%
Commercial and industrial	6,971,981		28.3	%	6,658,010		27.4	%		6,417,721		25.9	%

Pinnacle - municipal finance	884,690		3.6	%	900,199		3.7	%		912,122		3.7	%
Franchise finance	182,408		0.7	%	196,745		0.8	%		253,774		1.0	%
Equipment finance	197,939		0.8	%	219,874		0.9	%		286,147		1.1	%
Mortgage warehouse lending ("MWL")	432,663		1.8	%	407,577		1.7	%		524,740		2.1	%
	$	24,633,684	100.0	%	$	24,356,276	100.0	%		$	24,885,988	100.0	%

Consistent with our balance sheet strategy, for the quarter ended December 31, 2023, residential loans declined by $172 million, while C&I grew by $399 million, CRE grew by $77 million and MWL grew by $25 million. Franchise, equipment and municipal finance declined by $52 million in aggregate.

Asset Quality and the Allowance for Credit Losses ("ACL")

The following table presents the ACL and related ACL coverage ratios at the dates indicated and net charge-off rates for the periods ended December 31, 2023, September 30, 2023 and December 31, 2022 (dollars in thousands):


	ACL		ACL to Total Loans		ACL to Non-Performing Loans		Net Charge-offs to Average Loans (1)
December 31, 2022	$	147,946	0.59	%	140.88	%	0.22	%
September 30, 2023	$	196,063	0.80	%	143.22	%	0.07	%
December 31, 2023	$	202,689	0.82	%	159.54	%	0.09	%

(1) Annualized for the nine months ended September 30, 2023.

The ACL at December 31, 2023 represents management's estimate of lifetime expected credit losses given an assessment of historical data, current conditions, and a reasonable and supportable economic forecast as of the balance sheet date. For the quarter ended December 31, 2023, the provision for credit losses was $19.3 million, including $16.3 million related to funded loans. Factors impacting the provision for credit losses and increase in the ACL for the quarter ended December 31, 2023 included the shift in balance sheet composition toward commercial loan categories that typically carry higher reserves and risk rating migration.

The following table summarizes the activity in the ACL for the periods indicated (in thousands):


	Three Months Ended December 31,				Years Ended December 31,
	2023		2022			2023		2022
Beginning balance	$	196,063	$	130,671		$	147,946	$	126,457
Impact of adoption of new accounting pronouncement (ASU 2022-02)	N/A		N/A			(1,794)		N/A
Balance after impact of adoption of new accounting pronouncement (ASU 2022-02)	196,063		130,671			146,152		126,457
Provision	16,257		40,408			78,924		73,814
Net charge-offs	(9,631)		(23,133)			(22,387)		(52,325)
Ending balance	$	202,689	$	147,946		$	202,689	$	147,946

Non-performing loans totaled $127.0 million or 0.52% of total loans at December 31, 2023, compared to $136.9 million or 0.56% of total loans at September 30, 2023. Non-performing loans included $41.8 million and $37.8 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.17% and 0.16% of total loans at December 31, 2023 and September 30, 2023, respectively.

The following table presents criticized and classified commercial loans at the dates indicated (in thousands):


	December 31, 2023		September 30, 2023		December 31, 2022
Special mention	$	319,905	$	341,999	$	51,433
Substandard - accruing	711,266		534,336		605,965
Substandard - non-accruing	86,903		96,248		75,125
Doubtful	19,035		19,344		7,990
Total	$	1,137,109	$	991,927	$	740,513

The increase in the substandard accruing category for the quarter ended December 31, 2023 included $74 million of C&I and $118 million of CRE. All of these loans are performing. The substantial majority of the increase was attributable to a small number of loans. Increasing operating costs, including insurance and interest costs, and higher vacancy rates for some office properties were contributing factors.

Net Interest Income

Net interest income for the quarter ended December 31, 2023 was $217.2 million, compared to $214.8 million for the immediately preceding quarter ended September 30, 2023 and $243.1 million for the quarter ended December 31, 2022. Interest income increased by $12.7 million for the quarter ended December 31, 2023 compared to the immediately preceding quarter, while interest expense increased by $10.3 million.

The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.04% to 2.60% for the quarter ended December 31, 2023, from 2.56% for the immediately preceding quarter ended September 30, 2023. Factors impacting the net interest margin for the quarter ended December 31, 2023 were:

•The tax-equivalent yield on loans increased to 5.69% for the quarter ended December 31, 2023, from 5.54% for the quarter ended September 30, 2023. This increase reflects the origination of new loans at higher rates, re-positioning of the portfolio and to a lesser extent, the resetting of variable rate loans to higher coupon rates.

•The tax-equivalent yield on investment securities increased to 5.73% for the quarter ended December 31, 2023, from 5.48% for the quarter ended September 30, 2023. Factors leading to this increase included the reset of coupon rates on variable rate securities and retrospective accounting adjustments related to prepayment speeds on certain securities.

•The average cost of interest bearing deposits increased to 4.04% for the quarter ended December 31, 2023 from 3.76% for the quarter ended September 30, 2023, a continuing response to the higher interest rate environment.

•The reduction in the proportion of total funding comprised of more expensive wholesale funding also contributed to the increase in the net interest margin.

Non-interest income and Non-interest expense

Non-interest income totaled $17.1 million for the quarter ended December 31, 2023, compared to $27.7 million for the quarter ended September 30, 2023. The decrease compared to the quarter ended September 30, 2023 was primarily attributable to a $6.5 million loss on sale of lease equipment during the quarter ended December 31, 2023 compared to a $4.2 million gain on sale of lease equipment during the prior quarter.

Non-interest expense totaled $190.9 million for the quarter ended December 31, 2023, compared to $147.1 million for the immediately preceding quarter ended September 30, 2023. The increase over the prior quarter was primarily attributable to a $35.4 million FDIC special assessment recorded during the quarter ended December 31, 2023. The increase in compensation and benefits for the quarter ended December 31, 2023 compared to the immediately preceding quarter primarily resulted from an increase in the Company's stock price, impacting the value of liability-classified share based compensation awards.

Earnings Conference Call and Presentation

A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Friday, January 26, 2024 with Chairman, President and Chief Executive Officer, Rajinder P. Singh, Chief Financial Officer, Leslie N. Lunak and Chief Operating Officer, Thomas M. Cornish.

The earnings release and slides with supplemental information relating to the release will be available on the Investor Relations page under About Us on www.bankunited.com prior to the call. Due to recent demand for conference call services, participants are encouraged to listen to the call via a live Internet webcast at https://ir.bankunited.com. To participate by telephone, participants will receive dial-in information and a unique PIN number upon completion of registration at https://register.vevent.com/register/BI50a5352f746b4dc890465ca3d32e6db9. For those unable to join the live event, an archived webcast will be available in the Investor Relations page at https://ir.bankunited.com approximately two hours following the live webcast.

About BankUnited, Inc.

BankUnited, Inc., with total assets of $35.8 billion at December 31, 2023, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida that provides a full range of banking and related services to individual and corporate customers through banking centers located in the state of Florida, the New York metropolitan area and Dallas, Texas, and a comprehensive suite of wholesale products to customers through an Atlanta office focused on the Southeast region. BankUnited also offers certain commercial lending and deposit products through national platforms. For additional information, call (877) 779-2265 or visit www.BankUnited.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance.

The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” "forecasts" or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including (without limitation) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the Company's direct control, such as but not limited to adverse events or conditions impacting the financial services industry. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are available at the SEC’s website (www.sec.gov).

Contact

BankUnited, Inc.

Investor Relations:

Leslie N. Lunak, 786-313-1698

llunak@bankunited.com

Source: BankUnited, Inc.

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)


	December 31, 2023		September 30, 2023		December 31, 2022
ASSETS
Cash and due from banks:
Non-interest bearing	$	14,945	$	12,391	$	16,068
Interest bearing	573,338		379,494		556,579
Cash and cash equivalents	588,283		391,885		572,647
Investment securities (including securities reported at fair value of $8,867,354, $8,876,484 and $9,745,327)	8,877,354		8,886,484		9,755,327
Non-marketable equity securities	310,084		312,159		294,172

Loans	24,633,684		24,356,276		24,885,988
Allowance for credit losses	(202,689)		(196,063)		(147,946)
Loans, net	24,430,995		24,160,213		24,738,042
Bank owned life insurance	318,459		319,808		308,212
Operating lease equipment, net	371,909		460,146		539,799

Goodwill	77,637		77,637		77,637
Other assets	786,886		781,332		740,876
Total assets	$	35,761,607	$	35,389,664	$	37,026,712

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Non-interest bearing	$	6,835,236	$	7,356,523	$	8,037,848
Interest bearing	3,403,539		3,290,391		2,142,067
Savings and money market	11,135,708		10,276,071		13,061,341
Time	5,163,995		5,189,681		4,268,078
Total deposits	26,538,478		26,112,666		27,509,334
Federal funds purchased	—		—		190,000
FHLB advances	5,115,000		5,165,000		5,420,000
Notes and other borrowings	708,973		715,197		720,923
Other liabilities	821,235		872,731		750,474
Total liabilities	33,183,686		32,865,594		34,590,731

Commitments and contingencies

Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,372,505, 74,413,059 and 75,674,587 shares issued and outstanding	744		744		757
Paid-in capital	283,642		279,672		321,729
Retained earnings	2,650,956		2,650,850		2,551,400
Accumulated other comprehensive loss	(357,421)		(407,196)		(437,905)
Total stockholders' equity	2,577,921		2,524,070		2,435,981
Total liabilities and stockholders' equity	$	35,761,607	$	35,389,664	$	37,026,712

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)


	Three Months Ended						Years Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
	2023		2023		2022		2023		2022
Interest income:
Loans	$	346,255	$	337,014	$	288,973	$	1,318,217	$	934,642
Investment securities	125,993		122,857		105,172		488,212		280,100
Other	10,957		10,668		7,345		51,152		15,709
Total interest income	483,205		470,539		401,490		1,857,581		1,230,451
Interest expense:
Deposits	192,833		176,974		94,403		660,305		179,972
Borrowings	73,162		78,723		64,021		323,472		137,519
Total interest expense	265,995		255,697		158,424		983,777		317,491
Net interest income before provision for credit losses	217,210		214,842		243,066		873,804		912,960
Provision for credit losses	19,253		33,049		39,608		87,607		75,154
Net interest income after provision for credit losses	197,957		181,793		203,458		786,197		837,806
Non-interest income:
Deposit service charges and fees	5,386		5,402		5,482		21,682		23,402

Gain (loss) on investment securities, net	617		887		320		(10,052)		(15,805)
Lease financing	3,723		16,531		14,153		45,882		54,111
Other non-interest income	7,366		4,904		6,858		29,326		15,928
Total non-interest income	17,092		27,724		26,813		86,838		77,636
Non-interest expense:
Employee compensation and benefits	73,454		68,825		69,902		280,744		265,548
Occupancy and equipment	10,610		10,890		10,770		43,345		45,400
Deposit insurance expense	43,453		7,790		6,205		66,747		17,999
Professional fees	5,052		2,696		3,028		14,184		11,730
Technology	18,628		19,193		22,388		79,984		77,103

Depreciation of operating lease equipment	10,476		11,217		12,547		44,446		50,388

Other non-interest expense	29,190		26,479		23,639		106,501		72,142
Total non-interest expense	190,863		147,090		148,479		635,951		540,310
Income before income taxes	24,186		62,427		81,792		237,084		375,132
Provision for income taxes	3,374		15,446		17,585		58,413		90,161
Net income	$	20,812	$	46,981	$	64,207	$	178,671	$	284,971
Earnings per common share, basic	$	0.27	$	0.63	$	0.83	$	2.39	$	3.55
Earnings per common share, diluted	$	0.27	$	0.63	$	0.82	$	2.38	$	3.54

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)


	Three Months Ended December 31,						Three Months Ended September 30,						Three Months Ended December 31,
	2023						2023						2022
	Average Balance		Interest (1)		Yield/ Rate (1)(2)		Average Balance		Interest (1)		Yield/ Rate (1)(2)		Average Balance		Interest (1)		Yield/ Rate (1)(2)
Assets:
Interest earning assets:


Loans	$	24,416,013	$	349,603	5.69	%	$	24,417,433	$	340,357	5.54	%	$	24,624,062	$	292,272	4.72	%
Investment securities (3)	8,850,397		126,870		5.73	%	9,034,116		123,794		5.48	%	9,788,969		106,034		4.33	%
Other interest earning assets	801,833		10,957		5.42	%	785,146		10,668		5.39	%	710,315		7,345		4.10	%
Total interest earning assets	34,068,243		487,430		5.70	%	34,236,695		474,819		5.52	%	35,123,346		405,651		4.60	%
Allowance for credit losses	(198,984)						(173,407)						(137,300)
Non-interest earning assets	1,715,795						1,747,310						1,837,156
Total assets	$	35,585,054					$	35,810,598					$	36,823,202
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits	$	3,433,216	$	31,978	3.70	%	$	3,038,870	$	25,491	3.33	%	$	2,183,854	$	6,704	1.22	%
Savings and money market deposits	10,287,945		104,188		4.02	%	10,205,765		97,956		3.81	%	12,054,892		68,001		2.24	%
Time deposits	5,225,756		56,667		4.30	%	5,420,522		53,527		3.92	%	3,960,111		19,698		1.97	%
Total interest bearing deposits	18,946,917		192,833		4.04	%	18,665,157		176,974		3.76	%	18,198,857		94,403		2.06	%
Federal funds purchased	—		—		—	%	—		—		—	%	175,637		1,677		3.74	%
FHLB advances	5,545,978		64,034		4.58	%	6,040,870		69,525		4.57	%	6,125,435		53,084		3.44	%
Notes and other borrowings	711,073		9,128		5.13	%	715,307		9,198		5.14	%	721,044		9,260		5.14	%
Total interest bearing liabilities	25,203,968		265,995		4.19	%	25,421,334		255,697		3.99	%	25,220,973		158,424		2.49	%
Non-interest bearing demand deposits	6,909,027						6,937,537						8,237,885
Other non-interest bearing liabilities	903,099						868,178						879,207
Total liabilities	33,016,094						33,227,049						34,338,065
Stockholders' equity	2,568,960						2,583,549						2,485,137
Total liabilities and stockholders' equity	$	35,585,054					$	35,810,598					$	36,823,202
Net interest income			$	221,435					$	219,122					$	247,227
Interest rate spread					1.51	%					1.53	%					2.11	%
Net interest margin					2.60	%					2.56	%					2.81	%

(1) On a tax-equivalent basis where applicable

(2) Annualized

(3) At fair value except for securities held to maturity

BANKUNITED, INC. AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS

(Dollars in thousands)


	Years Ended December 31,
	2023						2022
	Average Balance		Interest (1)		Yield/ Rate (1)			Average Balance		Interest (1)		Yield/ Rate (1)
Assets:
Interest earning assets:
Loans	$	24,558,430	$	1,331,578	5.42	%		$	23,937,857	$	947,386	3.96	%
Investment securities (2)	9,228,718		491,851		5.33	%		10,081,701		283,081		2.81	%
Other interest earning assets	986,186		51,152		5.19	%		675,068		15,709		2.33	%
Total interest earning assets	34,773,334		1,874,581		5.39	%		34,694,626		1,246,176		3.59	%
Allowance for credit losses	(171,618)							(132,033)
Non-interest earning assets	1,749,981							1,721,570
Total assets	$	36,351,697						$	36,284,163
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits	$	2,905,968	$	86,759	2.99	%		$	2,538,906	$	13,919	0.55	%
Savings and money market deposits	10,704,470		382,432		3.57	%		12,874,240		130,705		1.02	%
Time deposits	5,169,458		191,114		3.70	%		3,338,671		35,348		1.06	%
Total interest bearing deposits	18,779,896		660,305		3.52	%		18,751,817		179,972		0.96	%
Federal funds purchased	35,403		1,611		4.55	%		157,979		2,723		1.72	%
FHLB advances	6,331,685		285,026		4.50	%		4,383,507		97,763		2.23	%
Notes and other borrowings	716,633		36,835		5.14	%		721,223		37,033		5.13	%
Total interest bearing liabilities	25,863,617		983,777		3.80	%		24,014,526		317,491		1.32	%
Non-interest bearing demand deposits	7,091,029							8,861,111
Other non-interest bearing liabilities	848,023							708,473
Total liabilities	33,802,669							33,584,110
Stockholders' equity	2,549,028							2,700,053
Total liabilities and stockholders' equity	$	36,351,697						$	36,284,163
Net interest income			$	890,804						$	928,685
Interest rate spread					1.59	%						2.27	%
Net interest margin					2.56	%						2.68	%

(1) On a tax-equivalent basis where applicable

(2) At fair value except for securities held to maturity

BANKUNITED, INC. AND SUBSIDIARIES

EARNINGS PER COMMON SHARE

(In thousands except share and per share amounts)


	Three Months Ended December 31,				Years Ended December 31,
c	2023		2022		2023		2022
Basic earnings per common share:
Numerator:
Net income	$	20,812	$	64,207	$	178,671	$	284,971
Distributed and undistributed earnings allocated to participating securities	(930)		(1,519)		(3,565)		(5,075)
Income allocated to common stockholders for basic earnings per common share	$	19,882	$	62,688	$	175,106	$	279,896
Denominator:
Weighted average common shares outstanding	74,384,185		77,043,587		74,493,898		80,032,356
Less average unvested stock awards	(1,130,715)		(1,207,275)		(1,168,004)		(1,224,568)
Weighted average shares for basic earnings per common share	73,253,470		75,836,312		73,325,894		78,807,788
Basic earnings per common share	$	0.27	$	0.83	$	2.39	$	3.55
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share	$	19,882	$	62,688	$	175,106	$	279,896
Adjustment for earnings reallocated from participating securities	—		(184)		(275)		(626)
Income used in calculating diluted earnings per common share	$	19,882	$	62,504	$	174,831	$	279,270
Denominator:
Weighted average shares for basic earnings per common share	73,253,470		75,836,312		73,325,894		78,807,788
Dilutive effect of certain share-based awards	203,123		127		197,441		94
Weighted average shares for diluted earnings per common share	73,456,593		75,836,439		73,523,335		78,807,882
Diluted earnings per common share	$	0.27	$	0.82	$	2.38	$	3.54

BANKUNITED, INC. AND SUBSIDIARIES

SELECTED RATIOS


	At or for the Three Months Ended									Years Ended December 31,
	December 31, 2023			September 30, 2023			December 31, 2022				2023		2022
Financial ratios (4)
Return on average assets	0.23		%	0.52		%	0.69		%		0.49	%	0.79	%

Return on average stockholders’ equity	3.2		%	7.2		%	10.3		%		7.0	%	10.6	%
Net interest margin (3)	2.60		%	2.56		%	2.81		%		2.56	%	2.68	%
Loans to deposits	92.8		%	93.3		%	90.5		%
Tangible book value per common share	$	33.62		$	32.88		$	31.16


	December 31, 2023		September 30, 2023		December 31, 2022

Asset quality ratios
Non-performing loans to total loans (1)(5)	0.52	%	0.56	%	0.42	%
Non-performing assets to total assets (2)(5)	0.37	%	0.40	%	0.29	%
Allowance for credit losses to total loans	0.82	%	0.80	%	0.59	%
Allowance for credit losses to non-performing loans (1)(5)	159.54	%	143.22	%	140.88	%

Net charge-offs to average loans	0.09	%	0.07	%	0.22	%

(1) We define non-performing loans to include non-accrual loans and loans other than purchased credit deteriorated and government insured residential loans that are past due 90 days or more and still accruing. Contractually delinquent purchased credit deteriorated and government insured residential loans on which interest continues to be accrued are excluded from non-performing loans.

(2) Non-performing assets include non-performing loans, OREO and other repossessed assets.

(3) On a tax-equivalent basis.

(4) Annualized for the three month periods.

(5) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $41.8 million or 0.17% of total loans and 0.12% of total assets at December 31, 2023, $37.8 million or 0.16% of total loans and 0.11% of total assets at September 30, 2023 and $40.3 million or 0.16% of total loans and 0.11% of total assets at December 31, 2022.


	December 31, 2023				December 31, 2022			Required to be Considered Well Capitalized
	BankUnited, Inc.		BankUnited, N.A.			BankUnited, Inc.				BankUnited, N.A.

Capital ratios
Tier 1 leverage	7.9	%	9.1	%		7.5	%	8.4	%		5.0	%
Common Equity Tier 1 ("CET1") risk-based capital	11.4	%	13.1	%		11.0	%	12.4	%		6.5	%


Total risk-based capital	13.4	%	13.9	%		12.7	%	12.9	%		10.0	%
Tangible Common Equity/Tangible Assets	7.0	%	N/A			6.4	%	N/A			N/A

Non-GAAP Financial Measures

Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at the dates indicated (in thousands except share and per share data):


	December 31, 2023		September 30, 2023		December 31, 2022
Total stockholders’ equity	$	2,577,921	$	2,524,070	$	2,435,981
Less: goodwill and other intangible assets	77,637		77,637		77,637
Tangible stockholders’ equity	$	2,500,284	$	2,446,433	$	2,358,344

Common shares issued and outstanding	74,372,505		74,413,059		75,674,587

Book value per common share	$	34.66	$	33.92	$	32.19

Tangible book value per common share	$	33.62	$	32.88	$	31.16

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Exhibit 99.2: Additional Exhibits

Ticker: BKU
CIK: 1504008
Form Type: 8-K Corporate News
Accession Number: 0001504008-24-000003
Submitted to the SEC: Fri Jan 26 2024 6:47:26 AM EST
Accepted by the SEC: Fri Jan 26 2024
Period: Friday, January 26, 2024
Industry: Savings Institution Federally Chartered