Bankunited, Inc. · NYSE:BKU
Bankunited — Q2 2021 Earnings Presentation
32 slides from Bankunited's earnings presentation, Jul 22, 2021
Slide 1: Q2 2021 – Supplemental Information
July 22, 2021 Q2 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: Continued Strong Results; Positive Credit Trends
Continued Strong Results; Positive Credit Trends 4 Operating results Continued improvement in deposit mix Asset Quality Robust capital levels • EPS for the quarter of $1.11 • Annualized ROE for the 6 months ended June 30 of 13.2% and ROA of 1.15% • PPNR increased to $112.6 million, from $103.3 milli
Slide 5: Highlights from Second Quarter Earnings
Highlights from Second Quarter Earnings 5 Key Highlights Improving economic forecast and reductions in criticized/classified loans 51% YoY non-interest DDA growth 10% YoY deposit growth, primarily from non-interest bearing Spot APY on total deposits declined to 0.22% at June 30, 2021 Increase in NPA
Slide 6: Continuing to Transform our Deposit Mix
Continuing to Transform our Deposit mix ($ in millions) 6 $6,335 $6,820 $7,347 $4,807 $3,784 $2,978 $10,715 $11,262 $10,622 $12,660 $12,885 $13,579 $1,758 $1,771 $2,131 $3,020 $3,097 $3,218 $3,071 $3,621 $4,295 $7,009 $7,966 $8,834$21,879 $23,474 $24,395 $27,496 $27,732 $28,609 12/31/17 12/31/18 12/
Slide 7: Prudently Underwritten and Well-Diversified Loan Portfolio
Prudently Underwritten and Well-Diversified Loan Portfolio At June 30, 2021 ($ in millions) 7 Loan Portfolio Over Time CRE C&I Lending Subs Residential Loan Product Type $4,949 $5,661 $6,348 $6,582 $7,076 $7,501 $7,493 $6,896 $6,666 $6,200 $6,478 $6,718 $6,448 $5,981 $6,167 $782 $912 $492 $432 $768
Slide 8: SBA PPP Loans
SBA PPP Loans At June 30, 2021 ($ in millions) 8 Loan Count UPB Loan Count UPB Loans funded to date 3,581 876$ 1,420 291$ Forgiveness applications received 3,307 761$ - -$ Full forgiveness granted / loan paid off 3,063 628$ - -$ First Draw Program Second Draw Program
Slide 9: Allowance for Credit Losses
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Slide 10: CECL Methodology
CECL Methodology 10 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 reason
Slide 11: Drivers of Change in the ACL
Drivers of Change in the ACL 11 ACL 3/31/21 ACL 6/30/21 Net Portfolio Migration ($ in millions) % of Total Loans 0.95% 0.77% • Risk rating migration • Changes in specific reserves • $27.2MM increase related to one C&I loan • New loans • Exits/runoff • Portfolio composition changes • Seasoning • Resi
Slide 12: Allocation of the ACL
Allocation of the ACL 12 ($ in millions) (1) Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $47.7 million, $48.2 million, and $51.3 million or 0.21%, 0.21%, and 0.22%, of total loans and 0.13%, 0.14%, and 0.15% of total assets, at June 30, 2021, Marc
Slide 13: Loan Portfolio and Credit
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Slide 14: Loan Portfolio – Geographic Distribution
Loan Portfolio – Geographic Distribution At June 30, 2021 Commercial (1) Residential CRE (1) Includes PPP, MWL, BFG and Pinnacle FL 37% NY Tri-State Area 22% Other 41% 14 CA 32% FL 9% NY 22% Other 37% FL 56% NY Tri-State Area 35% Other 9%
Slide 15: Loan Portfolio – Granular, Diversified Commercial & Industrial Portfolio
15 Loan Portfolio – Granular, Diversified Commercial & Industrial Portfolio At June 30, 2021 ($ in millions) • Includes $2.0 billion of owner- occupied real estate • Some key observations: • Educational services – well established private colleges, universities and high schools • Transportation and
Slide 16: Loan Portfolio – Commercial Real Estate by Property Type
Loan Portfolio – Commercial Real Estate by Property Type At June 30, 2021 Property Type Balance FL NY Tri State Other Wtd. Avg. DSCR Wtd. Avg. LTV Non- Performing Office 1,986$ 60% 25% 15% 2.32 62.6% 5$ Multifamily 1,361 40% 55% 5% 1.72 59.0% 7 Retail 1,226 54% 39% 7% 1.53 68.7% 21 Warehouse/Industr
Slide 17: Loan Portfolio – Deferrals and Modifications
17 Loan Portfolio – Deferrals and Modifications At June 30, 2021 ($ in millions) • Loans subject to COVID related deferral or modification under the CARES Act totaled $497 million down from $762 million at March 31, 2021. By comparison, at June 30, 2020 we reported that we had granted initial 90-day
Slide 18: Loan Portfolio – Retail
Loan Portfolio – Retail At June 30, 2021 ($ in millions) Retail - Commercial Real Estate • No significant mall or “big box” exposure • $40 million and $18 million of Retail-Unanchored and Retail-Anchored, respectively, are mixed-used properties Retail – Commercial & Industrial 18 Property Type Balan
Slide 19: Loan Portfolio – BFG Franchise Finance
Loan Portfolio – BFG Franchise Finance At June 30, 2021 ($ in millions) Portfolio Breakdown by Concept Portfolio Breakdown by Geography CA 20% FL 10% TX 7% UT 7% Other 56% 19 Balance % of BFG Franchise Short-Term Deferral or CARES Modification Non-Performing Loans Special Mention Classified Restaura
Slide 20: Loan Portfolio – Hotel
Loan Portfolio – Hotel At June 30, 2021 ($ in millions) • 76% of our exposure is in Florida, followed by 15% in New York • Includes $57.6 million in SBA loans • All hotel properties in FL and NY are now open • Total criticized and classified hotel loans decreased by $207 million during the quarter e
Slide 21: Credit Quality – Residential
Credit Quality – Residential At June 30, 2021 High quality residential portfolio consists of primarily prime jumbo mortgages with de-minimis charge- offs since inception as well as fully government insured assets FICO Distribution(1) Breakdown by LTV(1) Breakdown by Vintage(1) (1) Excludes governmen
Slide 22: Asset Quality Metrics
Asset Quality Metrics Non-performing Loans to Total Loans(2) Non-performing Assets to Total Assets(2) Net Charge-offs to Average Loans(1) (1) YTD net charge-offs, annualized at March 31, 2021 and June 30, 2021. (2) The increase in non-performing loans to total loans and non-performing assets to tota
Slide 23: Non-Performing Loans by Portfolio Segment
Non-Performing Loans by Portfolio Segment ($ in millions) (1) Includes the guaranteed portion of non-accrual SBA loans totaling $47.7 million, $48.2 million, $51.3 million, and $45.7 million at June 30, 2021, March 31, 2021, December 31, 2020, and December 31, 2019, respectively. $19 $29 $26 $46 $18
Slide 24: Criticized and Classified Loans
Criticized and Classified Loans ($ in millions) Commercial Real Estate Commercial & Industrial (2) Franchise Finance(1) Equipment Finance SBA(3) (1) Substandard non-accruing and doubtful includes $0.5 million of loans rated doubtful at June 30, 2021. (2) Substandard non-accruing and doubtful include
Slide 25: Criticized and Classified – CRE by Property Type
Criticized and Classified – CRE by Property Type ($ in millions) Office Multifamily Retail Warehouse/Industrial Hotel Other $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 12/31/19 12/31/20 3/31/21 6/30/21 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 12/31/19 12/31/20 3/31/21 6/30/21 $0 $
Slide 26: Criticized and Classified – BFG Franchise Finance
Criticized and Classified – BFG Franchise Finance ($ in millions) Restaurant Concepts (1) Fitness Concepts Other (1) Substandard non-accruing and doubtful includes $0.5 million of loans rated doubtful at June 30, 2021. $0 $20 $40 $60 $80 $100 $120 $140 $160 12/31/19 12/31/20 3/31/21 6/30/21 $0 $20 $
Slide 27: 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 $0 $20 $40 $60 $80 $100 $120 $140 12/31/19 12/31/20 3/31/21 6/30/21
Slide 28: Investment Portfolio
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Slide 29: Investment Securities AFS
29 Investment Securities AFS ($ in thousands) The AFS debt securities portfolio of $10.1 billion was in a net unrealized gain position of $67.3 million at June 30, 2021 Portfolio Composition Ratings Distribution Gov 34% AAA 59% AA 5% A 2% US Government and agency 34% Private label RMBS and CMOs 20%
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 31: Non-GAAP Financial Measures
31 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 32: Non-GAAP Financial Measures (continued)
32 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