Bankunited, Inc. · NYSE:BKU
Bankunited — Q3 2021 Earnings Presentation
31 slides from Bankunited's earnings presentation, Oct 21, 2021
Slide 1: Q3 2021 – Supplemental Information
October 21, 2021 Q3 2021 – Supplemental Information Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the current views of BankUnited, Inc. (“BankUnited,” “BKU” or the “Company”) with respect to, among other things, future events and
Slide 3: Financial Highlights
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Slide 4: Strong Quarterly Results; Improving Credit Metrics
Strong Quarterly Results; Improving Credit Metrics 4 Operating results Continued improvement in deposit mix Asset Quality Robust capital levels • EPS for the quarter of $0.94 • Annualized ROE for the nine months ended September 30 of 12.4% and ROA of 1.09% • Net interest income declined by $3 millio
Slide 5: Highlights from Third Quarter Earnings
Highlights from Third Quarter Earnings 5 Key Highlights Primarily lower gains on investment securities 35% YoY non-interest DDA growth. Spot APY on total deposits declined to 0.19% at September 30, 2021 Impacted by pressure on asset yields; lower PPP fee recognition (1) PPNR is a non-GAAP financial
Slide 6: Continuing to Transform our Deposit Mix
Continuing to Transform our Deposit mix ($ in millions) 6 $6,335 $6,820 $7,347 $4,807 $2,978 $3,229 $10,715 $11,262 $10,622 $12,660 $13,579 $12,460 $1,758 $1,771 $2,131 $3,020 $3,218 $3,269 $3,071 $3,621 $4,295 $7,009 $8,834 $9,158$21,879 $23,474 $24,395 $27,496 $28,609 $28,116 12/31/17 12/31/18 12/
Slide 7: Prudently Underwritten and Well-Diversified Loan Portfolio
Prudently Underwritten and Well-Diversified Loan Portfolio At September 30, 2021 ($ in millions) 7 Loan Portfolio Over Time CRE C&I Lending Subs Residential Loan Product Type $4,949 $5,661 $6,348 $7,076 $7,827 $7,501 $7,493 $6,896 $6,200 $5,883 $6,478 $6,718 $6,448 $6,167 $6,179 $782 $492 $333 $432
Slide 8: Allowance for Credit Losses
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Slide 9: CECL Methodology
CECL Methodology 9 Underlying Principles Economic Forecast Key Variables • The ACL under CECL represents management’s best estimate at the balance sheet date of expected credit losses over the life of the loan portfolio. • Required to consider historical information, current conditions and a reasona
Slide 10: Drivers of Change in the ACL
Drivers of Change in the ACL 10 ACL 6/30/21 ACL 9/30/21 Net Portfolio Migration Portfolio and Assumption Changes Economic Forecast Net Charge- Offs Change in Qualitative Overlay ($ in millions) % of Total Loans 0.77% 0.70% • Risk rating migration • Changes in specific reserves • New loans • Exits/ru
Slide 11: Allocation of the ACL
Allocation of the ACL 11 ($ in millions) (1) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $49.1 million, $47.7 million, and $51.3 million or 0.22%, 0.21%, and 0.22%, of total loans and 0.14%, 0.13%, and 0.15% of total assets, at September 30, 2021,
Slide 12: Loan Portfolio and Credit
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Slide 13: Loan Portfolio – Geographic Distribution
Loan Portfolio – Geographic Distribution At September 30, 2021 Commercial (1) Residential CRE (1) Includes PPP, MWL, BFG and Pinnacle FL 39% NY Tri-State Area 21% Other 40% 13 CA 33% FL 8% NY 21% Other 38% FL 56% NY Tri-State Area 34% Other 10%
Slide 14: Loan Portfolio – Granular, Diversified Commercial & Industrial Portfolio
14 Loan Portfolio – Granular, Diversified Commercial & Industrial Portfolio At September 30, 2021 ($ in millions) • Includes $2.0 billion of owner- occupied real estate • Some key observations: • Educational services – well established private colleges, universities and high schools • Transportation
Slide 15: Loan Portfolio – Commercial Real Estate by Property Type
Loan Portfolio – Commercial Real Estate by Property Type At September 30, 2021 Property Type Balance FL NY Tri State Other Wtd. Avg. DSCR Wtd. Avg. LTV Non- Performing Office 1,860$ 61% 25% 14% 2.55 63.2% 5$ Multifamily 1,244 40% 55% 5% 1.75 60.8% 11 Retail 1,175 53% 38% 9% 1.52 70.2% 19 Warehouse/I
Slide 16: Loan Portfolio – Deferrals and Modifications
16 Loan Portfolio – Deferrals and Modifications At September 30, 2021 ($ in millions) • Loans subject to COVID related deferral or modification under the CARES Act totaled $285 million or 1% of the total loan portfolio at September 30, 2021. $17 million of these loans, all residential, were under sh
Slide 17: Loan Portfolio – Retail
Loan Portfolio – Retail At September 30, 2021 ($ in millions) Retail - Commercial Real Estate • No significant mall or “big box” exposure • $33 million and $18 million of Retail-Unanchored and Retail-Anchored, respectively, are mixed-used properties Retail – Commercial & Industrial 17 Property Type
Slide 18: Loan Portfolio – BFG Franchise Finance
Loan Portfolio – BFG Franchise Finance At September 30, 2021 ($ in millions) Portfolio Breakdown by Concept Portfolio Breakdown by Geography CA 22% FL 8% TX 9%GA 7% UT 7% Other 47% 18 Balance % of BFG Franchise Short-Term Deferral or CARES Modification Non-Performing Loans Special Mention Classified
Slide 19: Loan Portfolio – Hotel
Loan Portfolio – Hotel At September 30, 2021 ($ in millions) • 75% of our exposure is in Florida, followed by 16% in New York • Includes $53.8 million in SBA loans • All hotel properties in FL and NY remain open • Decline of $144 million of hotel CARES Act modifications during Q3 Exposure by Flag Ma
Slide 20: Credit Quality – Residential
Credit Quality – Residential At September 30, 2021 High quality residential portfolio consists of primarily prime jumbo mortgages with de-minimis charge- offs since inception as well as fully government insured assets FICO Distribution(1) Breakdown by LTV(1) Breakdown by Vintage(1) (1) Excludes gove
Slide 21: Asset Quality Metrics
Asset Quality Metrics Non-performing Loans to Total Loans (2) Non-performing Assets to Total Assets Net Charge-offs to Average Loans(1) (1) YTD net charge-offs, annualized at March 31, 2021, June 30, 2021 and September 30, 2021. (2) The increase in non-performing loans to total loans and non-perform
Slide 22: Non-Performing Loans by Portfolio Segment
Non-Performing Loans by Portfolio Segment ($ in millions) (1) Includes the guaranteed portion of non-accrual SBA loans totaling $49.1 million, $47.7 million, $48.2 million, $51.3 million, and $45.7 million at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and December 31, 2019
Slide 23: Criticized and Classified Loans
Criticized and Classified Loans ($ in millions) Commercial Real Estate Commercial & Industrial (1) Franchise Finance Equipment Finance SBA(2) (1) Substandard non-accruing and doubtful includes $16.4 million of loans rated doubtful at September 30, 2021. (2) Includes the guaranteed portion of non-acc
Slide 24: Criticized and Classified – CRE by Property Type
Criticized and Classified – CRE by Property Type ($ in millions) Office Multifamily Retail Warehouse/Industrial Hotel Other $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $0 $50 $100 $150 $20
Slide 25: Criticized and Classified – BFG Franchise Finance
Criticized and Classified – BFG Franchise Finance ($ in millions) Restaurant Concepts Fitness Concepts Other $0 $20 $40 $60 $80 $100 $120 $140 $160 12/31/19 12/31/20 3/31/21 6/30/21 9/30/21 $0 $20 $40 $60 $80 $100 $120 $140 $160 12/31/19 12/31/20 3/31/21 6/30/21 9/30/21 $0 $20 $40 $60 $80 $100 $120
Slide 26: Asset Quality – Delinquencies
Asset Quality – Delinquencies ($ in millions) Commercial(1) CRE Residential (2) (1) Includes lending subsidiaries (2) Excludes government insured residential loans. $0 $20 $40 $60 $80 $100 $120 $140 12/31/19 12/31/20 3/31/21 6/30/21 9/30/21 $0 $20 $40 $60 $80 $100 $120 $140 12/31/19 12/31/20 3/31/21
Slide 27: Investment Portfolio
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Slide 28: Investment Securities AFS
28 Investment Securities AFS ($ in thousands) The AFS debt securities portfolio of $10.2 billion was in a net unrealized gain position of $44.8 million at September 30, 2021 Portfolio Composition Ratings Distribution Gov 33% AAA 59% AA 6% A 2% US Government and agency 33% Private label RMBS and CMOs
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 30: Non-GAAP Financial Measures
30 Non-GAAP Financial Measures PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cove
Slide 31: Non-GAAP Financial Measures (continued)
31 Non-GAAP Financial Measures (continued) ACL to total loans, excluding government insured residential loans, PPP 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 nomina