EX-99.1 2 earningsdocex99120210930.htm EX-99.1 Document

Exhibit 99.1
 
BANKUNITED, INC. REPORTS THIRD QUARTER 2021 RESULTS
 
Miami Lakes, Fla. — October 21, 2021 — BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended September 30, 2021.
"The Company delivered a solid quarter. We're pleased by our continued progress in improving the deposit book and in the positive direction of credit trends" said Rajinder Singh, Chairman, President and Chief Executive Officer.
For the quarter ended September 30, 2021, the Company reported net income of $86.9 million, or $0.94 per diluted share, compared to $104.0 million or $1.11 per diluted share for the immediately preceding quarter ended June 30, 2021 and $66.6 million, or $0.70 per diluted share, for the quarter ended September 30, 2020.
For the nine months ended September 30, 2021, the Company reported net income of $289.7 million, or $3.12 per diluted share, compared to $112.1 million, or $1.17 per diluted share, for the nine months ended September 30, 2020. On an annualized basis, earnings for the nine months ended September 30, 2021 generated a return on average stockholders' equity of 12.4% and a return on average assets of 1.09%.
Financial Highlights
•Net interest income decreased by $3.2 million compared to the immediately preceding quarter ended June 30, 2021 and increased by $7.6 million compared to the quarter ended September 30, 2020. The net interest margin, calculated on a tax-equivalent basis, was 2.33% for the quarter ended September 30, 2021 compared to 2.37% for the immediately preceding quarter and 2.32% for the quarter ended September 30, 2020. The net interest margin was impacted by pressure on earning asset yields, in part resulting from lower than expected commercial loan growth for the quarter, leading to continued deployment of liquidity into securities. Lower recognition of PPP fees also had an impact.
•As expected, the average cost of total deposits continued to decline, dropping by 0.05% to 0.20% for the quarter ended September 30, 2021 from 0.25% for the immediately preceding quarter ended June 30, 2021, and 0.57% for the quarter ended September 30, 2020. On a spot basis, the average annual percentage yield ("APY") on total deposits declined to 0.19% at September 30, 2021 from 0.22% at June 30, 2021 and 0.36% at December 31, 2020.
•Non-interest bearing demand deposits grew by $324 million during the quarter ended September 30, 2021 while average non-interest bearing demand deposits grew by $749 million compared to the immediately preceding quarter. Average non-interest bearing demand deposits grew by $2.7 billion compared to the third quarter of the prior year. At September 30, 2021, non-interest bearing demand deposits represented 33% of total deposits, compared to 25% of total deposits at December 31, 2020.
•Total deposits declined by $493 million during the quarter ended September 30, 2021, as the Company continues to execute on a strategy focused on improving the quality of the deposit base rather than on growth in total deposits. Money market and savings deposits declined by $1.1 billion in the third quarter. The majority of this decline was attributable to reductions in accounts that management believes will be more price sensitive in a rising rate environment.
•For the quarter ended September 30, 2021, the Company recorded a recovery of credit losses of $(11.8) million compared to a recovery of $(27.5) million for the immediately preceding quarter ended June 30, 2021 and a provision for credit losses of $29.2 million for the quarter ended September 30, 2020. For the nine months ended September 30, 2021 and 2020, the provision for (recovery of) credit losses was $(67.4) million and $180.1 million, respectively. Year over year volatility in the provision related to the expected economic impact of the onset of the COVID-19 pandemic in 2020 and subsequent recovery in 2021.
•As expected, as the economy emerges from the COVID-19 crisis and our borrowers' operating results improve, criticized and classified loans continued to decline. During the quarter ended September 30, 2021, total criticized and classified loans declined by $240 million. The ratio of non-performing loans to total loans declined to 1.21% at September 30, 2021 from 1.28% at June 30, 2021.
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•Loans currently under short-term deferral totaled $17 million and loans modified under the CARES Act totaled $267 million for a total of $285 million at September 30, 2021, down from a total of $497 million at June 30, 2021.
•Total loans and operating lease equipment, excluding the runoff of PPP loans, grew by $74 million for the quarter ended September 30, 2021.
•Book value per common share and tangible book value per common share continued to accrete, increasing to $34.39 and $33.53, respectively, at September 30, 2021 from $33.91 and $33.08, respectively, at June 30, 2021 and $32.05 and $31.22, respectively at December 31, 2020.
•During the quarter ended September 30, 2021, the Company repurchased approximately 3.2 million shares of its common stock for an aggregate purchase price of $129.4 million, at a weighted average price of $40.62 per share.
•On October 20, 2021, the Company's Board of Directors authorized the repurchase of up to an additional $150 million in shares of its outstanding common stock.
Loans and Leases
A comparison of loan and lease portfolio composition at the dates indicated follows (dollars in thousands):
September 30, 2021June 30, 2021December 31, 2020
Residential and other consumer loans$7,827,224 34.3 %$7,076,274 30.9 %$6,348,222 26.6 %
Multi-family1,181,935 5.2 %1,256,711 5.5 %1,639,201 6.9 %
Non-owner occupied commercial real estate4,537,078 19.9 %4,724,183 20.7 %4,963,273 20.8 %
Construction and land163,988 0.7 %218,634 1.0 %293,307 1.2 %
Owner occupied commercial real estate2,012,376 8.8 %1,960,900 8.6 %2,000,770 8.4 %
Commercial and industrial4,166,914 18.3 %4,205,795 18.4 %4,447,383 18.6 %
PPP332,548 1.5 %491,960 2.1 %781,811 3.3 %
Pinnacle932,865 4.1 %1,046,537 4.6 %1,107,386 4.6 %
Bridge - franchise finance396,589 1.7 %463,874 2.0 %549,733 2.3 %
Bridge - equipment finance379,446 1.7 %421,939 1.8 %475,548 2.0 %
Mortgage warehouse lending ("MWL")877,006 3.8 %1,018,267 4.4 %1,259,408 5.3 %
$22,807,969 100.0 %$22,885,074 100.0 %$23,866,042 100.0 %
Operating lease equipment, net$659,935 $667,935 $663,517 
Residential continues to be an area of strength; residential and other consumer loans grew by $751 million during the quarter ended September 30, 2021. GNMA early buyout loans grew by $50 million, totaling $1.9 billion at September 30, 2021.
The majority of commercial portfolio segments showed net declines for the quarter ended September 30, 2021 as payoffs outpaced production. Commercial real estate portfolio segments in the aggregate declined by $317 million while commercial and industrial loans, including owner-occupied commercial real estate, remained relatively flat, growing by $13 million. Balances for Pinnacle, Bridge and mortgage warehouse declined by $114 million, $110 million and $141 million, respectively. The decrease in multifamily loans was largely attributable to $76 million of runoff in the New York portfolio.
PPP loans declined by $159 million during the quarter ended September 30, 2021, due to forgiveness of first draw program loans.
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Asset Quality and the Allowance for Credit Losses
The following table presents information about non-performing loans, loans on deferral and CARES Act modifications at September 30, 2021 (dollars in thousands):
Non-Performing Loans Currently Under Short-Term DeferralCARES Act Modification
Residential and other consumer (1)
$33,161 $17,439 $23,012 
Commercial:
CRE by Property Type:
Retail 18,678 — 15,874 
Hotel 22,043 — 81,632 
Office 5,260 — — 
Multi-family11,018 — 7,317 
Other 7,193 — — 
Owner occupied commercial real estate 22,192 — 15,775 
Commercial and industrial 125,550 — 95,871 
Bridge - franchise finance 31,569—27,717
Total commercial243,503— 244,186
Total $276,664 $17,439 $267,198 
(1)    Excludes government insured residential loans.
In the table above, "currently under short-term deferral" refers to loans subject to a 90-day payment deferral at September 30, 2021 and "CARES Act modification" refers to loans subject to longer-term modifications that, were it not for the provisions of the CARES Act, would likely have been reported as TDRs. Non-performing loans may include some loans that have been modified under the CARES Act.
Non-performing loans totaled $276.7 million or 1.21% of total loans at September 30, 2021, compared to $292.7 million or 1.28% of total loans at June 30, 2021 and $244.5 million or 1.02% of total loans at December 31, 2020. Non-performing loans included $49.1 million, $47.7 million and $51.3 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.22%, 0.21% and 0.22% of total loans at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.
The following table presents criticized and classified commercial loans at the dates indicated (in thousands):
September 30, 2021June 30, 2021December 31, 2020
Special mention$153,373 $138,064 $711,516 
Substandard - accruing1,432,801 1,684,666 1,758,654
Substandard - non-accruing227,055 229,646 203,758
Doubtful16,447 17,332 11,867 
Total $1,829,676 $2,069,708 $2,685,795 

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The following table presents the ACL at the dates indicated, related ACL coverage ratios and net charge-off rates for the quarters ended September 30, 2021 and June 30, 2021 and the year ended December 31, 2020 (dollars in thousands):
ACL
ACL to Total Loans (1)
ACL to Non-Performing Loans
Net Charge-offs to Average Loans (2)
December 31, 2020 $257,323 1.08 %105.26 %0.26 %
June 30, 2021$175,642 0.77 %60.02 %0.24 %
September 30, 2021$159,615 0.70 %57.69 %0.19 %
(1)    ACL to total loans, excluding government insured residential loans, PPP loans and MWL, which carry nominal or no reserves, was 0.81%, 0.90% and 1.26% at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.
(2)    Annualized for the periods ended June 30, 2021 and September 30, 2021.
The ACL at September 30, 2021 represents management's estimate of lifetime expected credit losses given our assessment of historical data, current conditions and a reasonable and supportable economic forecast as of the balance sheet date. The estimate was informed by Moody's economic scenarios published in September 2021, economic information provided by additional sources, information about borrower financial condition and collateral values, data reflecting the impact of recent events on individual borrowers and other relevant information.
For the quarter ended September 30, 2021, the Company recorded a recovery of credit losses of $(11.8) million, which included a recovery of $(11.6) million related to funded loans and an insignificant amount related to unfunded loan commitments and accrued interest receivable. The most significant factors contributing to the recovery of the provision for credit losses and corresponding reduction in the ACL for the quarter included declines in commercial loan balances and the accompanying shift in portfolio composition to residential loans which generally carry lower reserves, reductions in certain qualitative factors and an improving economic forecast. Improved borrower financial performance as reflected in the reduction in criticized and classified assets also contributed to the reduction in the ACL.
The following table summarizes the activity in the ACL for the periods indicated (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Beginning balance$175,642 $266,123 $257,323 $108,671 
Cumulative effect of adoption of CECL— — — 27,305 
Balance after adoption of CECL175,642 266,123 257,323 135,976 
Provision (recovery)(11,554)27,646 (65,523)181,095 
Net charge-offs(4,473)(19,641)(32,185)(42,943)
Ending balance$159,615 $274,128 $159,615 $274,128 
Net interest income
Net interest income for the quarter ended September 30, 2021 was $195.1 million compared to $198.3 million for the immediately preceding quarter ended June 30, 2021 and $187.5 million for the quarter ended September 30, 2020.
Interest income decreased by $7.5 million for the quarter ended September 30, 2021 compared to the immediately preceding quarter, and by $20.2 million compared to the quarter ended September 30, 2020. Interest expense decreased by $4.3 million compared to the immediately preceding quarter and by $27.9 million compared to the quarter ended September 30, 2020. Decreases in interest income resulted from turnover of the loan and investment portfolios at lower prevailing rates, as well as a decline in average loans. Declines in interest expense reflected the impact of our strategy focused on lowering the cost of deposits and improving the deposit mix, runoff and repricing of deposits generated in a higher rate environment, and declines in average interest bearing liabilities.
The Company’s net interest margin, calculated on a tax-equivalent basis, decreased by 0.04% to 2.33% for the quarter ended September 30, 2021, from 2.37% for the immediately preceding quarter ended June 30, 2021. Offsetting factors impacting the net interest margin for the quarter ended September 30, 2021 included:
•The average rate paid on interest bearing deposits decreased to 0.29% for the quarter ended September 30, 2021, from 0.35% for the quarter ended June 30, 2021. This decline reflected continued initiatives taken to lower rates paid on deposits, including the re-pricing of term deposits.
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•The tax-equivalent yield on investment securities decreased to 1.49% for the quarter ended September 30, 2021 from 1.56% for the quarter ended June 30, 2021. This decrease resulted from the impact of purchases of lower-yielding securities coupled with amortization, maturities and prepayment of securities purchased in a higher rate environment. Accounting adjustments related to faster prepayment speeds of securities purchased at a premium negatively impacted the yield on investment securities for the quarter ended September 30, 2021 by approximately 0.06%.
•The tax-equivalent yield on loans decreased to 3.45% for the quarter ended September 30, 2021, from 3.59% for the quarter ended June 30, 2021. Accelerated amortization of origination fees on PPP loans that were partially or fully forgiven during the quarter impacted the yield on loans by approximately 0.03% for the quarter ended September 30, 2021, compared to 0.11% for the quarter ended June 30, 2021. Factoring out the impact of accelerated amortization of PPP origination fees, the yield on loans for the quarter ended September 30, 2021 decreased by 0.06% compared to the immediately preceding quarter. This decrease is mainly the result of growth in the residential portfolio at average yields lower than our commercial loan segments.
•The increase in average non-interest bearing demand deposits as a percentage of average total deposits also positively impacted the cost of total deposits and the net interest margin.
Capital Actions
On October 20, 2021, the Company's Board of Directors authorized the repurchase of up to $150 million in shares of its outstanding common stock. This authorization is in addition to $58.3 million in remaining authorization as of September 30, 2021, under a previously announced share repurchase program. Any repurchases under the program will be made in accordance with applicable securities laws from time to time in open market or private transactions. The extent to which the Company repurchases shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, the Company’s capital position and amount of retained earnings, regulatory requirements and other considerations. No time limit was set for the completion of the share repurchase program, and the program may be suspended or discontinued without prior notice at any time.
Earnings Conference Call and Presentation
A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, October 21, 2021 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 http://www.ir.bankunited.com/. The dial in telephone number for the call is (855) 798-3052 (domestic) or (234) 386-2812 (international). The name of the call is BankUnited, Inc. and the conference ID for the call is 9293887. A replay of the call will be available from 12:00 p.m. ET on October 21st through 11:59 p.m. ET on October 28th by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The conference ID for the replay is 9293887. An archived webcast will also be available on the Investor Relations page of www.bankunited.com.
About BankUnited, Inc.
BankUnited, Inc., with total assets of $35.3 billion at September 30, 2021, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 64 banking centers in 13 Florida counties and 4 banking centers in the New York metropolitan area at September 30, 2021.
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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 limitations) those relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by the COVID-19 pandemic. 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, 2020 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.
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BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except share and per share data) 
September 30,
2021		December 31,
2020
ASSETS  
Cash and due from banks:  
Non-interest bearing$17,973 $20,233 
Interest bearing489,049 377,483 
Cash and cash equivalents 507,022 397,716 
Investment securities (including securities recorded at fair value of $10,319,691 and $9,166,683)10,329,691 9,176,683 
Non-marketable equity securities155,584 195,865 
Loans held for sale— 24,676 
Loans22,807,969 23,866,042 
Allowance for credit losses (159,615)(257,323)
Loans, net22,648,354 23,608,719 
Bank owned life insurance 308,912 294,629 
Operating lease equipment, net659,935 663,517 
Goodwill77,637 77,637 
Other assets619,136 571,051 
Total assets$35,306,271 $35,010,493 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Liabilities:  
Demand deposits:  
Non-interest bearing$9,158,281 $7,008,838 
Interest bearing3,268,709 3,020,039 
Savings and money market12,460,507 12,659,740 
Time3,228,776 4,807,199 
Total deposits28,116,273 27,495,816 
Federal funds purchased199,000 180,000 
FHLB advances2,431,014 3,122,999 
Notes and other borrowings721,527 722,495 
Other liabilities741,783 506,171 
Total liabilities 32,209,597 32,027,481 
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 90,049,326 and 93,067,500 shares issued and outstanding900 931 
Paid-in capital885,873 1,017,518 
Retained earnings2,239,963 2,013,715 
Accumulated other comprehensive loss(30,062)(49,152)
Total stockholders' equity 3,096,674 2,983,012 
Total liabilities and stockholders' equity $35,306,271 $35,010,493 

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BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
Three Months EndedNine Months Ended
 September 30,June 30,September 30,September 30,September 30,
 20212021202020212020
Interest income:    
Loans$194,689 $202,520 $208,646 $602,544 $656,943 
Investment securities38,243 37,674 44,604 114,418 151,596 
Other1,413 1,607 1,322 4,613 7,950 
Total interest income 234,345 241,801 254,572 721,575 816,489 
Interest expense:
Deposits14,273 17,316 37,681 53,965 170,690 
Borrowings24,950 26,174 29,412 77,937 87,407 
Total interest expense 39,223 43,490 67,093 131,902 258,097 
Net interest income before provision for credit losses 195,122 198,311 187,479 589,673 558,392 
Provision for (recovery of) credit losses (11,842)(27,534)29,232 (67,365)180,074 
Net interest income after provision for credit losses 206,964 225,845 158,247 657,038 378,318 
Non-interest income:
Deposit service charges and fees5,553 5,417 4,040 15,870 11,927 
Gain on sale of loans, net
1,403 2,234 2,953 5,391 10,745 
Gain (loss) on investment securities, net(664)4,155 7,181 5,856 10,564 
Lease financing13,212 13,522 13,934 39,222 45,565 
Other non-interest income5,974 7,429 8,184 22,192 19,140 
Total non-interest income 25,478 32,757 36,292 88,531 97,941 
Non-interest expense:
Employee compensation and benefits57,224 56,459 48,448 172,971 156,212 
Occupancy and equipment 11,760 11,492 12,170 35,127 36,440 
Deposit insurance expense3,552 4,222 5,886 15,224 15,095 
Professional fees 2,312 2,139 2,436 6,363 8,771 
Technology and telecommunications16,687 16,851 15,435 49,279 42,056 
Depreciation of operating lease equipment12,944 12,834 12,315 37,995 37,137 
Other non-interest expense13,563 14,455 11,937 42,756 38,154 
Total non-interest expense 118,042 118,452 108,627 359,715 333,865 
Income before income taxes114,400 140,150 85,912 385,854 142,394 
Provision for income taxes27,459 36,176 19,353 96,125 30,278 
Net income$86,941 $103,974 $66,559 $289,729 $112,116 
Earnings per common share, basic$0.94 $1.12 $0.70 $3.12 $1.17 
Earnings per common share, diluted$0.94 $1.11 $0.70 $3.12 $1.17 

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BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
Three Months Ended
September 30, 2021		Three Months Ended
June 30, 2021		Three Months Ended
September 30, 2020
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 $22,879,654 $197,995 3.45 %$22,996,564 $205,940 3.59 %$23,447,514 $212,388 3.61 %
Investment securities (3)
10,452,255 38,939 1.49 %9,839,422 38,338 1.56 %9,065,478 45,351 2.00 %
Other interest earning assets750,700 1,413 0.75 %1,380,317 1,607 0.47 %552,515 1,322 0.95 %
Total interest earning assets34,082,609 238,347 2.79 %34,216,303 245,885 2.88 %33,065,507 259,061 3.13 %
Allowance for credit losses(171,381)(215,151)(272,464)
Non-interest earning assets1,856,608 1,732,676 1,897,723 
Total assets$35,767,836 $35,733,828 $34,690,766 
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits$3,038,038 $1,701 0.22 %$3,069,945 $2,594 0.34 %$2,800,421 $4,127 0.59 %
Savings and money market deposits13,554,572 10,029 0.29 %13,541,237 11,307 0.33 %10,664,462 15,853 0.59 %
Time deposits2,866,746 2,543 0.35 %3,380,582 3,415 0.41 %6,519,852 17,701 1.08 %
Total interest bearing deposits19,459,356 14,273 0.29 %19,991,764 17,316 0.35 %19,984,735 37,681 0.75 %
Federal funds purchased70,054 15 0.08 %— — — %53,587 14 0.10 %
FHLB and PPPLF borrowings2,647,314 15,678 2.35 %2,873,922 16,922 2.36 %4,117,181 20,146 1.95 %
Notes and other borrowings721,638 9,257 5.13 %721,753 9,252 5.13 %722,271 9,252 5.12 %
Total interest bearing liabilities22,898,362 39,223 0.68 %23,587,439 43,490 0.74 %24,877,774 67,093 1.07 %
Non-interest bearing demand deposits8,912,960 8,163,879 6,186,718 
Other non-interest bearing liabilities752,774 851,044 803,498 
Total liabilities32,564,096 32,602,362 31,867,990 
Stockholders' equity3,203,740 3,131,466 2,822,776 
Total liabilities and stockholders' equity$35,767,836 $35,733,828 $34,690,766 
Net interest income$199,124 $202,395 $191,968 
Interest rate spread2.11 %2.14 %2.06 %
Net interest margin2.33 %2.37 %2.32 %
(1)    On a tax-equivalent basis where applicable
(2)    Annualized
(3)    At fair value except for securities held to maturity








9

BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
Nine Months Ended September 30,
20212020
Average
Balance
Interest (1)
Yield/
Rate (1)(2)
Average
Balance
Interest (1)
Yield/
Rate (1)(2)
Assets:
Interest earning assets:
Loans $23,139,389 $612,756 3.54 %$23,278,042 $668,187 3.83 %
Investment securities (3)
9,792,350 116,464 1.59 %8,501,513 153,987 2.42 %
Other interest earning assets1,063,476 4,613 0.58 %654,623 7,950 1.62 %
Total interest earning assets33,995,215 733,833 2.88 %32,434,178 830,124 3.42 %
Allowance for credit losses(213,352)(222,085)
Non-interest earning assets1,771,639 1,874,709 
Total assets$35,553,502 $34,086,802 
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits$3,017,301 7,069 0.31 %$2,475,388 15,808 0.85 %
Savings and money market deposits13,299,066 33,463 0.34 %10,509,559 71,056 0.90 %
Time deposits3,520,674 13,433 0.51 %7,040,101 83,826 1.59 %
Total interest bearing deposits19,837,041 53,965 0.36 %20,025,048 170,690 1.14 %
Federal funds purchased26,245 17 0.09 %89,033 412 0.62 %
FHLB and PPPLF borrowings2,863,093 50,158 2.34 %4,496,407 66,284 1.97 %
Notes and other borrowings721,897 27,762 5.13 %548,851 20,711 5.03 %
Total interest bearing liabilities23,448,276 131,902 0.75 %25,159,339 258,097 1.37 %
Non-interest bearing demand deposits8,194,570 5,292,702 
Other non-interest bearing liabilities783,618 791,057 
Total liabilities32,426,464 31,243,098 
Stockholders' equity3,127,038 2,843,704 
Total liabilities and stockholders' equity$35,553,502 $34,086,802 
Net interest income$601,931 $572,027 
Interest rate spread2.13 %2.05 %
Net interest margin2.36 %2.35 %
(1)    On a tax-equivalent basis where applicable
(2)    Annualized
(3)    At fair value except for securities held to maturity


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BANKUNITED, INC. AND SUBSIDIARIES
EARNINGS PER COMMON SHARE
(In thousands except share and per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
c2021202020212020
Basic earnings per common share:  
Numerator: 
Net income$86,941 $66,559 $289,729 $112,116 
Distributed and undistributed earnings allocated to participating securities
(1,112)(2,896)(3,701)(4,816)
Income allocated to common stockholders for basic earnings per common share$85,829 $63,663 $286,028 $107,300 
Denominator:
Weighted average common shares outstanding92,053,714 92,405,239 92,787,824 92,918,030 
Less average unvested stock awards(1,208,304)(1,183,564)(1,218,416)(1,164,317)
Weighted average shares for basic earnings per common share90,845,410 91,221,675 91,569,408 91,753,713 
Basic earnings per common share$0.94 $0.70 $3.12 $1.17 
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share$85,829 $63,663 $286,028 $107,300 
Adjustment for earnings reallocated from participating securities
2 4 5 3 
Income used in calculating diluted earnings per common share$85,831 $63,667 $286,033 $107,303 
Denominator:
Weighted average shares for basic earnings per common share90,845,410 91,221,675 91,569,408 91,753,713 
Dilutive effect of stock options and certain shared-based awards182,448 171,054 152,675 142,008 
Weighted average shares for diluted earnings per common share
91,027,858 91,392,729 91,722,083 91,895,721 
Diluted earnings per common share$0.94 $0.70 $3.12 $1.17 

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BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Financial ratios (4)
    
Return on average assets0.96 %0.76 %1.09 %0.44 %
Return on average stockholders’ equity10.8 %9.4 %12.4 %5.3 %
Net interest margin (3)
2.33 %2.32 %2.36 %2.35 %
 September 30, 2021December 31, 2020
Asset quality ratios  
Non-performing loans to total loans (1)(5)
1.21 %1.02 %
Non-performing assets to total assets (2)(5)
0.80 %0.71 %
Allowance for credit losses to total loans0.70 %1.08 %
Allowance for credit losses to non-performing loans (1)(5)
57.69 %105.26 %
Net charge-offs to average loans (4)
0.19 %0.26 %
(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 and nine month periods.
(5)    Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $49.1 million or 0.22% of total loans and 0.14% of total assets, at September 30, 2021; and $51.3 million or 0.22% of total loans and 0.15% of total assets, at December 31, 2020.

September 30, 2021December 31, 2020Required to be Considered Well Capitalized
BankUnited, Inc.BankUnited, N.A.BankUnited, Inc.BankUnited, N.A.
Capital ratios
Tier 1 leverage8.6 %9.6 %8.6 %9.5 %5.0 %
Common Equity Tier 1 ("CET1") risk-based capital13.4 %14.9 %12.6 %13.9 %6.5 %
Total risk-based capital15.3 %15.4 %14.7 %14.8 %10.0 %
On a fully-phased in basis with respect to the adoption of CECL, the Company's and the Bank's CET1 risk-based capital ratios would have been 13.3% and 14.8%, respectively, at September 30, 2021.
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Non-GAAP Financial Measures
ACL to total loans, excluding government insured residential loans, PPP loans and MWL is a non-GAAP financial measure. Management believes this measure is relevant to understanding the adequacy of the ACL coverage, excluding the impact of loans which carry nominal or no reserves. Disclosure of this non-GAAP financial measure also provides a meaningful basis for comparison to other financial institutions. The following table reconciles the non-GAAP financial measurement of ACL to total loans, excluding government insured residential loans, PPP loans and MWL to the comparable GAAP financial measurement of ACL to total loans at the dates indicated (dollars in thousands):
September 30, 2021June 30, 2021December 31, 2020
Total loans (GAAP)$22,807,969$22,885,074$23,866,042
Less: Government insured residential loans1,913,4971,863,7231,419,074
Less: PPP loans332,548491,960781,811
Less: MWL877,0061,018,2671,259,408
Total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP)$19,684,918$19,511,124$20,405,749
ACL$159,615$175,642$257,323
ACL to total loans (GAAP)0.70 %0.77 %1.08 %
ACL to total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP)0.81 %0.90 %1.26 %
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): 
September 30, 2021December 31, 2020
Total stockholders’ equity (GAAP)$3,096,674 $2,983,012 
Less: goodwill77,637 77,637 
Tangible stockholders’ equity (non-GAAP)$3,019,037 $2,905,375 
 
Common shares issued and outstanding90,049,326 93,067,500 
 
Book value per common share (GAAP)$34.39 $32.05 
 
Tangible book value per common share (non-GAAP)$33.53 $31.22 
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