Bankunited, Inc. · NYSE:BKU
Bankunited — Q3 2023 Earnings Presentation
34 slides from Bankunited's earnings presentation, Oct 19, 2023
Slide 1: Q3 2023 – Supplemental Information
October 19, 2023 Q3 2023 – Supplemental Information 1 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: Quarterly Highlights
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Slide 4: Execution on Near-term Strategic Priorities
Improve Asset Mix Improve Funding Profile 2 Maintain Robust Liquidity and Capital Improve Net Interest Margin Execution on Near-term Strategic Priorities Manage Expenses 5 4 3 4 1 • NIDDA grew by $52 million and was stable at 28% of deposits • Non-brokered deposits grew by $484 million • Paid off $1
Slide 5: Topics of Current Interest
Topics of Current Interest Capital • CET1 ratios of 11.4% at the holding company and 13.2% at the bank • Pro-forma holding company CET1 of 9.8% including AOCI • Book value and tangible book value per share of $33.92 and $32.88 Deposits and Funding • Total deposits grew by $274 million in Q3 • Non-br
Slide 6: Highlights from Third Quarter Earnings
Highlights from Third Quarter Earnings Change From ($ in millions, except per share data) Q3’23 Q2’23 Q3’22 Q2’23 Q3’22 Key Highlights Net Interest Income $215 $214 $236 $1 $(21) Provision for Credit Losses $33 $16 $4 $17 $29 Less favorable economic outlook impacted quantitative modeling Total Non-i
Slide 7: Deposits
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Slide 8: Deposit Mix and Cost of Deposits Impacted by Current Rate Environment
Deposit Mix and Cost of Deposits Impacted by Current Rate Environment ($ in millions) $23,474 $24,395 $27,496 $29,438 $27,509 $25,839 $26,113 $6,820 $7,347 $4,807 $3,384 $4,268 $5,520 $5,190 $11,262 $10,622 $12,660 $13,369 $13,061 $10,084 $10,276 $1,771 $2,131 $3,020 $3,709 $2,142 $2,930 $3,290 $3,6
Slide 9: Cost of Funds Trend
Cost of Funds Trend 9 1.42% 0.36% 0.16% 1.92% 2.60% 2.84% 1.75% 0.25% 0.25% 4.50% 5.25% 5.50% Spot APY - Total Deposits Target Federal Funds Rate Upper Bound 12/31/19 12/31/20 12/31/21 12/31/22 06/30/23 09/30/23 (1.00)% —% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Spot Average Annual Percentage Yield (“AP
Slide 10: Loans and the Allowance for Credit Losses
Loans and the Allowance for Credit Losses 10
Slide 11: Prudently Underwritten and Well-Diversified Loan Portfolio
11 Prudently Underwritten and Well-Diversified Loan Portfolio At September 30, 2023 ($ in millions) Loan Portfolio Over Time $5,661 $6,348 $8,368 $8,901 $8,606 $8,381 $7,493 $6,896 $5,702 $5,700 $5,696 $5,742 $6,718 $6,448 $6,735 $8,305 $8,407 $8,508 $768 $1,259 $1,092 $525 $523 $408 $2,515 $2,915 $
Slide 12: High Quality CRE Portfolio
High Quality CRE Portfolio At September 30, 2023 ($ in millions) Property Type Balance % of Total CRE FL NY Tri State Other Wtd. Avg. DSCR Wtd. Avg. LTV Office $ 1,831 32 % 58 % 24 % 18 % 1.69 64.1 % Warehouse/Industrial 1,261 21 % 58 % 9 % 33 % 1.98 51.6 % Multifamily 831 14 % 48 % 52 % — % 1.97 45
Slide 13: Manageable CRE Maturity Risk
Manageable CRE Maturity Risk At September 30, 2023 ($ in millions) Property Type Maturing in the Next 12 Months % Maturing in the Next 12 Months Fixed Rate or Swapped Maturing in the Next 12 Months Fixed Rate to Borrower as a % of Total Portfolio Office $ 338 18 % $ 234 13 % Warehouse/Industrial 81
Slide 14: CRE Office Portfolio - Additional Information
CRE Office Portfolio - Additional Information At September 30, 2023 14 • Rent rollover in next 12 months approximately 11% of the total office portfolio; 14% for FL and 6% in NY Tri State • Manhattan portfolio has approximately 95% occupancy and rent rollover in the next 12 months of 5% • Substantia
Slide 15: Granular, Diversified Commercial & Industrial Portfolio
Granular, Diversified Commercial & Industrial Portfolio At September 30, 2023 ($ in millions) Industry Balance(1) % of Portfolio Finance and Insurance $ 1,612 19.0 % Manufacturing 828 9.8 % Educational Services 709 8.3 % Utilities 636 7.5 % Wholesale Trade 629 7.4 % Information 578 6.8 % Health Care
Slide 16: Drivers of Change in the ACL - Current Quarter
Drivers of Change in the ACL - Current Quarter ($ in millions) $166.8 $12.3 $17.5 $(1.6) $(2.9) $4.0 $196.1 Risk Rating Migration and Specific Reserves Economic Forecast Net Charge- Offs Change in Qualitative Overlay ACL 09/30/23 ACL 06/30/23 0.80%0.68%% of Total Loans 16 • Current market adjustment
Slide 17: Allocation of the ACL
Allocation of the ACL ($ in millions) December 31, 2022 June 30, 2023 September 30, 2023 Balance % of Loans Balance % of Loans Balance % of Loans Residential $ 11.7 0.13 % $ 8.9 0.10 % $ 8.0 0.10 % Commerical: Commercial real estate 24.8 0.43 % 29.7 0.52 % 34.8 0.61 % Commercial and industrial 97.2
Slide 18: Asset Quality Metrics
Asset Quality Metrics 18 Non-Performing Loans to Total Loans Non-Performing Assets to Total Assets Net Charge-offs to Average Loans 0.88% 1.02% 0.87% 0.42% 0.48% 0.56% 0.68% 0.80% 0.68% 0.26% 0.33% 0.40% Incl. guaranteed portion of non-accrual SBA loans Excl. guaranteed portion of non-accrual SBA lo
Slide 19: Non-Performing Loans by Portfolio Segment
Non-Performing Loans by Portfolio Segment ($ in millions) 19 $205 $244 $206 $105 $119 $137 $19 $29 $29 $21 $23 $21 $24 $60 $30 $3 $3 $65 $43 $58 $22 $48 $48 $21 $14 $45 $33 $13 $4 $18 $46 $51 $46 $40 $36 $38 $16 $16 $10 $9 $5 $9 Non-Guaranteed Portion of SBA Guaranteed Portion of SBA Franchise Equip
Slide 20: Criticized and Classified Loans
Criticized and Classified Loans ($ in millions) 20 Commercial Real Estate(1) Commercial(1)(2) Special Mention Substandard Accruing Substandard Non-accruing and Doubtful 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 $— $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 12/31/19 12/31/20 12/31/21 12/3
Slide 21: Asset Quality - Delinquencies
Asset Quality - Delinquencies ($ in millions) 21 Commercial(1) CRE 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 $— $20 $40 $60 $80 $100 Residential(2) 12/31/19 12/31/20 12/31/21 12/31/22 09/30/23 $— $20 $40 $60 $80 $100 30-59 Days PD 60-89 Days PD 90 Days+ PD 12/31/19 12/31/20 12/31/21 12/31/22 09/3
Slide 22: Residential Portfolio Overview
Residential Portfolio Overview At September 30, 2023 22 Residential Loan Product Type FICO Distribution(1) Breakdown by LTV 1. Excludes government insured residential loans. FICOs are refreshed routinely. LTVs are typically based on valuation at origination Prior 19% 2019 4% 2020 13%2021 43% 2022 17
Slide 23: Investment Portfolio
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Slide 24: High Quality, Short-Duration Securities Portfolio
High Quality, Short-Duration Securities Portfolio ($ in millions) December 31, 2022 June 30, 2023 September 30, 2023 Portfolio Net Unrealized Loss Fair Value Net Unrealized Loss Fair Value Net Unrealized Loss Fair Value US Government and Agency $ (146) $ 2,780 $ (132) $ 2,686 $ (144) $ 2,642 Private
Slide 25: High Quality, Short-Duration Securities Portfolio
High Quality, Short-Duration Securities Portfolio At September 30, 2023 Strong credit enhancement levels Private Label RMBS Subordination Wtd. Avg. Stress Scenario LossRating Min Max Avg. AAA 3.0 90.5 17.7 2.3 AA 19.9 34.0 24.5 5.3 A 26.4 27.4 26.9 5.4 Wtd. Avg. 4.1 87.0 18.1 2.5 Private Label CMBS
Slide 26: Appendix - Additional Information
Appendix - Additional Information 26
Slide 27: Strong Capital Position Relative to Peers and Regulatory Requirements
Strong Capital Position Relative to Peers and Regulatory Requirements 27 6.5% 6.5% 13.2% 11.4%11.5% 9.8% 12.2% 11.3% 11.8% Required to be Considered Well Capitalized CET1 CET1 including AOCI CET1 Peer Median(1)(2) CCAR Stress Test Trough BankUnited, N.A BankUnited, Inc —% 2.0% 4.0% 6.0% 8.0% 10.0% 1
Slide 28: Stress Testing Results
Stress Testing Results(3) ($ in millions) 28 2.7% 3.3% 0.7% 2.2% Commercial CRE Residential Total —% 1.0% 2.0% 3.0% 4.0% 4.7% 0.5% 3.1% 2.6% 6.6% 4.8% 3.3% 2.3% 0.2% 1.5% 1.0% 5.3% 1.9% 1.7% CCAR Severely Adverse Scenario Moody’s S4 Office Industrial Multifamily Retail Hotel Other Total —% 1.0% 2.0%
Slide 29: Liquidity
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Slide 30: Ample Liquidity Coverage of Uninsured Deposits
Ample Liquidity Coverage of Uninsured Deposits ($ in millions) 30 Insured Deposits Total Deposits $ 26,113 Estimated Uninsured Deposits $ 12,033 Less: Collateralized deposits (2,830) Less: Affiliate deposits (312) Adjusted Uninsured Deposits $ 8,891 Estimated Insured and Collateralized Deposits $ 17
Slide 31: Available Liquidity
Available Liquidity ($ in millions) 31 Same Day Available Liquidty $14,673 $14,356 $301 $379 $4,554 $4,970 $8,947 $7,857 $871 $1,150 Cash FHLB Capacity Capacity at the Fed Unencumbered Securities 06/30/23 09/30/23
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures 32
Slide 33: Non-GAAP Financial Measures
Non-GAAP Financial Measures 33 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 c
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures 34 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