Bankunited, Inc. · NYSE:BKU
Bankunited — Q3 2020 Earnings Presentation
36 slides from Bankunited's earnings presentation, Oct 28, 2020
Slide 1: BankUnited, Inc. Q3 2020 – Supplemental Information
Exhibit 99.2 BankUnited, Inc. Q3 2020 – Supplemental Information October 28, 2020
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
Financial Highlights ar
Slide 4: Strong Results in a Challenging Environment
Strong Results in a Challenging Environment • PPNR continued to grow YoY to $115 million for Q3 2020 from $102 million for Q3 2019 Operating results • NIM of 2.32% compared to 2.39% linked quarter – liquidity deployed into securities • Continued Non-interest DDA grew by $906 million during the quart
Slide 5: Highlights from Third Quarter Earnings
Highlights from Third Quarter Earnings Change From ($ in millions, except per share data) 3Q20 2Q20 3Q19 2Q20 3Q19 Key Highlights Net Interest Income $ 187 $ 190 $ 186 (3) 1 Provision for Credit Losses $ 29 $ 25 $ 2 4 27 Reflects CECL implementation in 1Q20; reserve build moderated in Q2 and Q3 Tota
Slide 6: Continuing to Transform our Deposit Mix
Continuing to Transform our Deposit Mix ($ in millions) Non-interest bearing demand deposits have grown at a compound annual growth rate of 43% since December 31, 2018 $25,001 $26,070 $26,597 $23,679 $23,922 $23,956 $24,395 Non-interest Demand $5,883 $6,789 $3,765 $4,099 $4,127 $4,295 $4,599 Interes
Slide 7: Prudently Underwritten and Well-Diversified Loan Portfolio
Prudently Underwritten and Well-Diversified Loan Portfolio At September 30, 2020 ($ in millions) Loan Portfolio Over Time CRE C&I Construction Residential CRE C&I Mortgage Warehouse Lending Lending Subs and Land Owner Occupied 4% SBA PPP Non-Owner 28% Occupied 11% 70% Multi-family $23,835 $23,779 Co
Slide 8: Allowance for Credit Losses
Allowance for Credit Losses ar
Slide 9: CECL Methodology
CECL Methodology CECL Methodology Underlying Principles Economic Forecast Key Variables • The ACL under CECL represents • Our ACL estimate was informed by • The models ingest numerous national, management’s best estimate at the Moody’s economic scenarios regional and MSA level economic balance sheet
Slide 10: Drivers of Change in the ACL
Drivers of Change in the ACL ($ in millions) Net Economic Portfolio Portfolio Forecast Change in Migration Changes Charge-Offs Assumption Qualitative Changes Overlay • New loans • Current • Exits/runoff market • Portfolio adjustment • Risk rating • Largely seasoning • Changes to • Additional migrati
Slide 11: Allocation of the ACL
Allocation of the ACL ($ in millions) January 1, 2020 June 30, 2020 September 30, 2020 Balance % of Loans Balance % of Loans Balance % of Loans Residential and other consumer $ 19.3 0.34% $ 10.7 0.19% $ 16.0 0.27% Commercial: Commercial real estate 16.7 0.22% 108.9 1.54% 113.3 1.62% Commercial and i
Slide 12: Loan Portfolio and Credit
Loan Portfolio and Credit ar
Slide 13: Loan Portfolio – Geographic Distribution
Loan Portfolio – Geographic Distribution At September 30, 2020 Commercial (1) Residential NY Tri-State Area 22% Other 36% CA 31% FL Other 40% NY 38% FL 22% 11% CRE NY 38% Other 10% FL 52% (1) Includes PPP, MWL, BFG and Pinnacle 13
Slide 14: Loan Portfolio – Granular, Diversified Commercial & Industrial Portfolio
Loan Portfolio – Granular, Diversified Commercial & Industrial Portfolio At September 30, 2020 ($ in millions) • Includes $2.1 billion of owner-occupied real estate • Some key observations: Industry Balance (1) Commitment % of Portfolio • Educational services – Finance and Insurance $902 $1,708 14.0
Slide 15: Loan Portfolio – Commercial Real Estate by Property Type
Loan Portfolio – Commercial Real Estate by Property Type At September 30, 2020 ($ in millions) Wtd. Avg. Wtd. Avg. Non- Property Type Balance FL NY Other DSCR LTV Performing Office $ 2,089 59% 26% 15% 2.13 59.0% $ 9 Multifamily 1,937 28% 65% 7% 1.72 56.0% 3 Retail 1,422 51% 40% 9% 1.54 59.7% 11 Ware
Slide 16: Loan Portfolio – Deferrals and Modifications
Loan Portfolio – Deferrals and Modifications At September 30, 2020 ($ in millions) Commercial Currently In Process • At the end of Q2, we reported that we had Under Short- CARES Act CARES Act % of granted 90-day payment Term Deferral Modifications Modifications Total Portfolio deferrals on $3.6 bill
Slide 17: Loan Portfolio – Segments Identified for Heightened Monitoring
Loan Portfolio – Segments Identified for Heightened Monitoring At September 30, 2020 Moderate exposure to sectors most impacted by the pandemic ($ in millions) Loans on Payment % of Total Deferral, Modified or % of Total Portfolio Balance Loans Pending Modification Loans Special Mention Classified R
Slide 18: Loan Portfolio – Retail
Loan Portfolio – Retail At September 30, 2020 ($ in millions) Retail - Commercial Real Estate Currently Under Short- In Process Term CARES Act CARES Act • No significant mall or “big Property Type Balance Deferral Modification Modification box” exposure Retail - Anchored $ 721 $ - $ 6 $ 10 Retail -
Slide 19: Loan Portfolio – BFG Franchise Finance
Loan Portfolio – BFG Franchise Finance At September 30, 2020 ($ in millions) Portfolio Breakdown by Concept Currently Under Short- CARES Act Restaurant Concepts Balance % of BFG Franchise Term Deferral Modification Burger King $ 65 11% $ - $ - Dunkin Donuts 43 7% 4 - Popeyes 28 5% 5 - Jimmy John's 2
Slide 20: Loan Portfolio – Hotel
Loan Portfolio – Hotel At September 30, 2020 ($ in millions) Exposure by Flag • 75% of our exposure is in Florida, followed by 16% in New York Other $102 Marriott • Includes $58.6 million in SBA 16% Sheraton $171 loans of which $13.7 million is $39 28% guaranteed 6% • All hotel properties in Florida
Slide 21: Credit Quality – Residential
Credit Quality – Residential At September 30, 2020 High quality residential portfolio consists FICO Distribution(1) of primarily prime jumbo mortgages with de-minimis charge-offs since <719 or inception as well as fully government NA insured assets 11% 720-759 18% >760 71% Breakdown by LTV(1) Breakd
Slide 22: Asset Quality Metrics
Asset Quality Metrics Non-performing Loans to Total Loans Non-performing Assets to Total Assets Incl. guaranteed portion of non-accrual SBA loans Incl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA loans 1.00
Slide 23: Non-Performing Loans by Portfolio Segment
Non-Performing Loans by Portfolio Segment ($ in thousands) Residential CRE C&I Equipment Franchise SBA(1) $204,787 $204,248 $198,221 $200,304 $61,892 $63,713 $59,233 $63,726 $129,891 $13,631 $32,857 $32,762 $20,939 $34,108 $37,635 $1,148 $5,308 $11,561 $17,424 $65,296 $65,588 $65,248 $28,309 $51,130
Slide 24: Criticized and Classified Loans
Criticized and Classified Loans ($ in millions) Commercial Real Estate Commercial & Industrial $800 $800 $700 $700 $600 $600 $500 $500 $400 $400 $300 $300 $200 $200 $100 $100 $0 $0 12/31/18 12/31/19 3/31/20 6/30/20 9/30/20 12/31/18 12/31/19 3/31/20 6/30/20 9/30/20 Franchise Finance Equipment Finance
Slide 25: Criticized and Classified - CRE by Property Type
Criticized and Classified - CRE by Property Type ($ in millions) Office Multifamily Retail $275 $275 $275 $250 $250 $250 $225 $225 $225 $200 $200 $200 $175 $175 $175 $150 $150 $150 $125 $125 $125 $100 $100 $100 $75 $75 $75 $50 $50 $50 $25 $25 $25 $0 $0 $0 Warehouse/Industrial Hotel Other $275 $275 $
Slide 26: Criticized and Classified – BFG Franchise Finance
Criticized and Classified – BFG Franchise Finance ($ in millions) Restaurant Concepts Fitness Concepts $160 $160 $140 $140 $120 $120 $100 $100 $80 $80 $60 $60 $40 $40 $20 $20 $0 $0 12/31/18 12/31/19 3/31/20 6/30/20 9/30/20 12/31/18 12/31/19 3/31/20 6/30/20 9/30/20 Other $160 $140 $120 $100 $80 $60 $
Slide 27: Asset Quality - Delinquencies
Asset Quality - Delinquencies ($ in millions) Commercial CRE (1) $140 $140 $120 $120 $100 $100 $80 $80 $60 $60 $40 $40 $20 $20 $0 $0 12/31/18 12/31/19 3/31/20 6/30/20 9/30/20 12/31/18 12/31/19 3/31/20 6/30/20 9/30/20 Residential (2) (1) $140 $120 $100 $80 $60 (1) Increase in 60-89 Days PD at 9/30/20
Slide 28: Investment Portfolio
Investment Portfolio ar
Slide 29: Investment Securities AFS
Investment Securities AFS ($ in thousands) The AFS debt securities portfolio of $9.2 billion was in a net unrealized gain position of $62.0 million at September 30, 2020 Portfolio Composition Ratings Distribution State and Other A NR Municipal 3% 1% 1% Obligations AA 3% CLOs 6% Residential 12% US Go
Slide 30: Investment Securities – Asset Quality of Select Non-Agency Securities
Investment Securities – Asset Quality of Select Non-Agency Securities At September 30, 2020 Strong credit enhancement levels on CLOs and CMBS A 3% Collateralized Loan Obligations (CLOs) AA 13% Subordination Wtd. Avg. Rating Min Max Avg Stress Scenario Loss AAA 36.0 48.5 43.1 20.2 AA 27.7 40.8 32.8 2
Slide 31: Liquidity and Capital
Liquidity and Capital ar
Slide 32: Strong Capital – Well-Positioned to Withstand Severe Stress
Strong Capital – Well-Positioned to Withstand Severe Stress Stress Testing Results ($ in millions) BankUnited N.A. Regulatory Capital Total Risk Based Capital 14.4% CET1 Capital 13.8% 14.2% Tier 1 Leverage • We stressed our March 31, 2020 portfolio using both the 2018 DFAST 10.0% and 2020 DFAST seve
Slide 33: Robust Liquidity Position
Robust Liquidity Position Key Liquidity Ratios 12/31/19 6/30/20 9/30/20 30 Day Liquidity Ratio • We have not experienced 1.8x 2.4x 2.7x stress on our liquidity Loans to Deposits 95.1% 91.4% 89.4% position through the period of the pandemic Wholesale Funding / Total Assets 25.3% 25.8% 24.3% $9.8BN $9
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 35: Non-GAAP Financial Measures
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 cover e
Slide 36: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) 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 nom