BankUnited, Inc. - FORM 8-K - EX-99.1 - April 22, 2021

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Exhibit 99.1
 
BANKUNITED, INC. REPORTS FIRST QUARTER 2021 RESULTS
 
Miami Lakes, Fla. — April 22, 2021 — BankUnited, Inc. (the “Company”) (NYSE: BKU) today announced financial results for the quarter ended March 31, 2021.
“This quarter, non-interest DDA grew by almost $1 billion, our net interest margin expanded, and we released some of the reserves we put up last year. This quarter also marks the culmination of our 2 year cloud journey, and the release of our new mobile banking platform." said Rajinder Singh, Chairman, President and Chief Executive Officer.
For the quarter ended March 31, 2021, the Company reported net income of $98.8 million, or $1.06 per diluted share, compared to a net loss of $(31.0) million, or $(0.33) per diluted share, for the quarter ended March 31, 2020. On an annualized basis, earnings for the quarter ended March 31, 2021 generated a return on average stockholders' equity of 13.2% and a return on average assets of 1.14%.
Financial Highlights
•Net interest income increased by $2.9 million compared to the immediately preceding quarter ended December 31, 2020 and by $15.7 million compared to the quarter ended March 31, 2020. The net interest margin, calculated on a tax-equivalent basis, improved to 2.39% for the quarter ended March 31, 2021 from 2.33% for the immediately preceding quarter and 2.35% for the quarter ended March 31, 2020.
•The average cost of total deposits continued to decline, dropping by 0.10% to 0.33% for the quarter ended March 31, 2021 from 0.43% for the immediately preceding quarter ended December 31, 2020, and 1.36% for the quarter ended March 31, 2020. On a spot basis, the average annual percentage yield ("APY") on total deposits declined to 0.27% at March 31, 2021 from 0.36% at December 31, 2020 and 1.35% at March 31, 2020.
•For the quarter ended March 31, 2021, the Company recorded a recovery of the provision for credit losses of $(28.0) million compared to a recovery of $(1.6) million for the immediately preceding quarter ended December 31, 2020 and a provision for credit losses of $125.4 million for the quarter ended March 31, 2020. The most significant factor leading to the recovery of credit losses for the quarter ended March 31, 2021 was an improving economic forecast. In contrast, the provision for credit losses for the quarter ended March 31, 2020 was driven primarily by a deteriorating economic forecast resulting from the onset of the COVID-19 pandemic.
•Pre-tax, pre-provision net revenue ("PPNR") was $103.3 million for the quarter ended March 31, 2021 compared to $105.3 million for the immediately preceding quarter ended December 31, 2020 and $85.0 million for the quarter ended March 31, 2020.
•Non-interest bearing demand deposits grew by $957 million during the quarter ended March 31, 2021. Total deposits grew by $236 million as higher cost time deposits continued to runoff, declining by $1.0 billion for the quarter ended March 31, 2021. Average non-interest bearing demand deposits grew by $338 million for the quarter ended March 31, 2021 compared to the immediately preceding quarter ended December 31, 2020 and by $3.1 billion compared to the quarter ended March 31, 2020. At March 31, 2021, non-interest bearing demand deposits represented 29% of total deposits, compared to 25% of total deposits at December 31, 2020.
•Total loans and operating lease equipment declined by $487 million for the quarter ended March 31, 2020.
•Loans on deferral totaled $126 million or less than 1% of total loans at March 31, 2021. Loans modified under the CARES Act totaled $636 million at March 31, 2021. In the aggregate, this represents $762 million or 3% of the total loan portfolio at March 31, 2021.
•Non-performing assets totaled $236 million or 0.67% of total assets at March 31, 2020, a decline from $248 million or 0.71% of total assets at December 31, 2020.
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•Book value per common share and tangible book value per common share at March 31, 2021 increased to $32.83 and $32.00, respectively, from $32.05 and $31.22, respectively at December 31, 2020 and pre-pandemic levels of $31.33 and $30.52, respectively at December 31, 2019.
•As previously reported, on January 20, 2021, the Company's Board of Directors reinstated the share repurchase program that the Company suspended in March 2020. During the quarter ended March 31, 2021, the Company repurchased approximately 0.2 million shares of its common stock for an aggregate purchase price of $7.3 million, at a weighted average price of $35.42 per share.
Loans and Leases
A comparison of loan and lease portfolio composition at the dates indicated follows (dollars in thousands):
March 31, 2021December 31, 2020
Residential and other consumer loans$6,582,447 28.1 %$6,348,222 26.6 %
Multi-family1,507,462 6.5 %1,639,201 6.9 %
Non-owner occupied commercial real estate4,871,110 20.9 %4,963,273 20.8 %
Construction and land287,821 1.2 %293,307 1.2 %
Owner occupied commercial real estate1,932,153 8.3 %2,000,770 8.4 %
Commercial and industrial4,048,473 17.3 %4,447,383 18.6 %
PPP911,951 3.9 %781,811 3.3 %
Pinnacle1,088,685 4.7 %1,107,386 4.6 %
Bridge - franchise finance524,617 2.2 %549,733 2.3 %
Bridge - equipment finance460,391 2.0 %475,548 2.0 %
Mortgage warehouse lending ("MWL")1,145,957 4.9 %1,259,408 5.3 %
$23,361,067 100.0 %$23,866,042 100.0 %
Operating lease equipment, net$681,003 $663,517 
Growth in residential and other consumer loans for the quarter was attributable to GNMA early buyout loans. At March 31, 2021 and December 31, 2020, the residential portfolio included $1.7 billion and $1.4 billion, respectively, of GNMA early buyout loans. Residential activity for the quarter included purchases of approximately $578 million in GNMA early buyout loans, offset by approximately $237 million in re-poolings and paydowns. Residential and other consumer loans, excluding GNMA early buyout loans, declined by approximately $107 million.
In the aggregate, commercial loans declined by $739 million for the quarter ended March 31, 2021 as the environment remained challenging for new production, line utilization was below historical levels and accelerated prepayment activity continued. MWL line utilization declined seasonally to 55% at March 31, 2021 compared to 62% at December 31, 2020.
We originated $265 million of PPP loans under the Second Draw Program during the quarter ended March 31, 2021. Loans originated under the First Draw Program totaling $138 million were fully or partially forgiven during the quarter.

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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 March 31, 2021 (dollars in thousands):
Non-Performing Loans Currently Under Short-Term DeferralCARES Act Modification
Residential and other consumer (1)
$26,140 $90,811 $15,432 
Commercial:
CRE by Property Type:
Retail 21,932 18,108 18,507 
Hotel 34,003 — 343,354 
Office 5,263 13,163 43,379 
Multi-family15,288 — 24,014 
Other 4,788 — — 
Owner occupied commercial real estate 23,451 3,667 11,532 
Commercial and industrial 66,491 — 141,741 
Bridge - franchise finance 36,276 — 38,182 
Total commercial207,49234,938620,709
Total $233,632 $125,749 $636,141 
(1)    Excludes government insured residential loans.
In the table above, "currently under short-term deferral" refers to loans subject to either a first or second 90-day payment deferral at March 31, 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 declined to $233.6 million or 1.00% of total loans at March 31, 2021, from $244.5 million or 1.02% of total loans at December 31, 2020. Non-performing loans included $48.2 million and $51.3 million of the guaranteed portion of SBA loans on non-accrual status, representing 0.21% and 0.22% of total loans at March 31, 2021 and December 31, 2020, respectively.
The following table presents criticized and classified commercial loans at the dates indicated (in thousands):
March 31, 2021December 31, 2020
Special mention$420,331 $711,516 
Substandard - accruing1,983,191 1,758,654
Substandard - non-accruing189,589 203,758
Doubtful17,903 11,867 
Total $2,611,014 $2,685,795 
The following table presents the ACL at the dates indicated, related ACL coverage ratios and net charge-off rates for the quarter and year ended March 31, 2021 and December 31, 2020, respectively (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 %
March 31, 2021$220,934 0.95 %94.56 %0.17 %
(1)    ACL to total loans, excluding government insured residential loans, PPP loans and MWL, which carry nominal or no reserves, was 1.13% and 1.26% at March 31, 2021 and December 31, 2020, respectively.
(2)    Annualized for the three months ended March 31, 2021.
The ACL at March 31, 2021 represents management's estimate of lifetime expected credit losses from the loan portfolio 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 March 2021, economic information provided by additional sources, data reflecting the impact of recent events on individual borrowers and other relevant information. The
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decline in the ACL and in ACL coverage ratios from December 31, 2020 to March 31, 2021 related primarily to to the recovery of credit losses recorded during the quarter. The decline in the ACL was primarily related to the pass rated portion of the portfolio.
For the quarter ended March 31, 2021, the Company recorded a recovery of credit losses of $(28.0) million, which included a recovery of $(26.3) million related to funded loans as well as immaterial amounts related to unfunded loan commitments, accrued interest receivable and an AFS debt security. The recovery of provision for credit losses was largely driven by improvements in forecasted economic conditions.
The following table summarizes the activity in the ACL for the periods indicated (in thousands):
Three Months Ended March 31,
 20212020
Beginning balance$257,323 $108,671 
Cumulative effect of adoption of CECL— 27,305 
Balance after adoption of CECL257,323 135,976 
Provision (recovery)(26,306)121,865 
Net charge-offs(10,083)(7,262)
Ending balance$220,934 $250,579 
Net interest income
Net interest income for the quarter ended March 31, 2021 was $196.2 million compared to $193.4 million for the immediately preceding quarter ended December 31, 2020 and $180.6 million for the quarter ended March 31, 2020.
Interest income decreased by $5.7 million for the quarter ended March 31, 2021 compared to the immediately preceding quarter, and by $48.7 million compared to the quarter ended March 31, 2020. Interest expense decreased by $8.6 million compared to the immediately preceding quarter and by $64.4 million compared to the quarter ended March 31, 2020. Decreases in interest income resulted from declines in market interest rates including the impact of repayment of assets originated in a higher rate environment and, with respect to comparison to the immediately preceding quarter, declines in average loans and investment securities. Declines in interest expense reflected decreases in market interest rates, the impact of our strategy focused on lowering the cost of deposits and improving the deposit mix and declines in average interest bearing liabilities.
The Company’s net interest margin, calculated on a tax-equivalent basis, increased by 0.06% to 2.39% for the quarter ended March 31, 2021, from 2.33% for the immediately preceding quarter ended December 31, 2020. The decline in the average rate paid on interest bearing liabilities, particularly deposits, exceeded the decline in the average yield on interest earning assets. Offsetting factors contributing to the increase in the net interest margin for the quarter ended March 31, 2021 compared to the immediately preceding quarter ended December 31, 2020 included:
•The average rate paid on interest bearing deposits decreased to 0.45% for the quarter ended March 31, 2021, from 0.58% for the quarter ended December 31, 2020. This decline reflected continued initiatives taken to lower rates paid on deposits,including the re-pricing of term deposits.
•The tax-equivalent yield on investment securities decreased to 1.73% for the quarter ended March 31, 2021 from 1.82% for the quarter ended December 31, 2020. This decrease resulted from the impact of purchases of lower-yielding securities, prepayments of higher yielding mortgage-backed securities and decreases in coupon interest rates on existing floating rate assets.
•The tax-equivalent yield on loans increased to 3.58% for the quarter ended March 31, 2021, from 3.55% for the quarter ended December 31, 2020. Accelerated amortization of origination fees on PPP loans that were partially or fully forgiven during the quarter impacted the yield on loans by approximately 0.06%.
•The average rate paid on FHLB and PPPLF borrowings increased to 2.32% for the quarter ended March 31, 2021, from 2.07% for the quarter ended December 31, 2020, reflecting the maturity of short-term, lower rate FHLB advances and the payoff of all PPPLF borrowings during the fourth quarter of 2020.
•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.
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Non-interest income
Non-interest income totaled $30.3 million for the quarter ended March 31, 2021 compared to $35.3 million for the immediately preceding quarter ended December 31, 2020 and $23.3 million for the quarter ended March 31, 2020. These fluctuations in non-interest income were primarily attributable to gain (loss) on investment securities, net which totaled $2.4 million, $7.2 million and $(3.5) million for the quarters ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively. Increases in "other non-interest income" related primarily to increased revenue from our customer derivative program.
Non-interest expense
Non-interest expense totaled $123.2 million for the quarter ended March 31, 2021 compared to $123.3 million for the immediately preceding quarter ended December 31, 2020 and $118.9 million for the quarter ended March 31, 2020. Significant factors contributing to the increase in non-interest expense for the quarter ended March 31, 2021 compared to the quarter ended March 31, 2020 included:
•Technology and telecommunications expense increased by $3.1 million reflecting investments in digital and data analytics capabilities and in the infrastructure to support cloud migration.
•Deposit insurance expense increased by $3.0 million reflecting an increase in the assessment rate.
Earnings Conference Call and Presentation
A conference call to discuss quarterly results will be held at 9:00 a.m. ET on Thursday, April 22, 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 7587207. A replay of the call will be available from 12:00 p.m. ET on April 22nd through 11:59 p.m. ET on April 29th by calling (855) 859-2056 (domestic) or (404) 537-3406 (international). The conference ID for the replay is 7587207. 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 $35.2 billion at March 31, 2021, is the bank holding company of BankUnited, N.A., a national bank headquartered in Miami Lakes, Florida with 69 banking centers in 14 Florida counties and 4 banking centers in the New York metropolitan area at March 31, 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) 
March 31,
2021		December 31,
2020
ASSETS  
Cash and due from banks:  
Non-interest bearing$20,750 $20,233 
Interest bearing1,029,046 377,483 
Cash and cash equivalents 1,049,796 397,716 
Investment securities (including securities recorded at fair value of $9,234,784 and $9,166,683)9,244,784 9,176,683 
Non-marketable equity securities177,709 195,865 
Loans held for sale13,770 24,676 
Loans23,361,067 23,866,042 
Allowance for credit losses (220,934)(257,323)
Loans, net23,140,133 23,608,719 
Bank owned life insurance 301,881 294,629 
Operating lease equipment, net681,003 663,517 
Goodwill77,637 77,637 
Other assets492,526 571,051 
Total assets$35,179,239 $35,010,493 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Liabilities:  
Demand deposits:  
Non-interest bearing$7,965,658 $7,008,838 
Interest bearing3,096,668 3,020,039 
Savings and money market12,885,645 12,659,740 
Time3,784,111 4,807,199 
Total deposits27,732,082 27,495,816 
Federal funds purchased— 180,000 
FHLB advances3,022,174 3,122,999 
Notes and other borrowings721,753 722,495 
Other liabilities641,395 506,171 
Total liabilities 32,117,404 32,027,481 
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 93,263,632 and 93,067,500 shares issued and outstanding933 931 
Paid-in capital1,008,603 1,017,518 
Retained earnings2,091,124 2,013,715 
Accumulated other comprehensive loss(38,825)(49,152)
Total stockholders' equity 3,061,835 2,983,012 
Total liabilities and stockholders' equity $35,179,239 $35,010,493 

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BANKUNITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
Three Months Ended
 March 31,December 31, March 31,
 202120202020
Interest income:  
Loans$205,335 $207,232 $234,359 
Investment securities38,501 42,260 56,060 
Other1,593 1,628 3,720 
Total interest income 245,429 251,120 294,139 
Interest expense:
Deposits22,376 29,290 82,822 
Borrowings26,813 28,464 30,741 
Total interest expense 49,189 57,754 113,563 
Net interest income before provision for credit losses 196,240 193,366 180,576 
Provision for (recovery of) credit losses (27,989)(1,643)125,428 
Net interest income after provision for credit losses 224,229 195,009 55,148 
Non-interest income:
Deposit service charges and fees4,900 4,569 4,186 
Gain on sale of loans, net
1,754 2,425 3,466 
Gain (loss) on investment securities, net2,365 7,203 (3,453)
Lease financing12,488 13,547 15,481 
Other non-interest income8,789 7,536 3,618 
Total non-interest income 30,296 35,280 23,298 
Non-interest expense:
Employee compensation and benefits59,288 60,944 58,887 
Occupancy and equipment 11,875 11,797 12,369 
Deposit insurance expense7,450 6,759 4,403 
Professional fees 1,912 2,937 3,204 
Technology and telecommunications15,741 16,052 12,596 
Depreciation of operating lease equipment12,217 12,270 12,603 
Other non-interest expense14,738 12,565 14,806 
Total non-interest expense 123,221 123,324 118,868 
Income (loss) before income taxes131,304 106,965 (40,422)
Provision (benefit) for income taxes32,490 21,228 (9,471)
Net income (loss)$98,814 $85,737 $(30,951)
Earnings (loss) per common share, basic$1.06 $0.89 $(0.33)
Earnings (loss) per common share, diluted$1.06 $0.89 $(0.33)

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BANKUNITED, INC. AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(Dollars in thousands)
Three Months Ended
March 31, 2021		Three Months Ended
December 31, 2020		Three Months Ended
March 31, 2020
Average
Balance
Interest (1)(2)
Yield/
Rate (1)(2)
Average
Balance
Interest (1)(2)
Yield/
Rate (1)(2)
Average
Balance
Interest (1)(2)
Yield/
Rate (1)(2)
Assets:
Interest earning assets:
Loans $23,549,309 $208,821 3.58 %$23,706,859 $210,896 3.55 %$22,850,065 $238,108 4.18 %
Investment securities (3)
9,070,185 39,188 1.73 %9,446,389 42,966 1.82 %8,107,649 56,951 2.81 %
Other interest earning assets1,062,840 1,593 0.61 %726,273 1,628 0.89 %646,628 3,720 2.31 %
Total interest earning assets33,682,334 249,602 2.98 %33,879,521 255,490 3.01 %31,604,342 298,779 3.79 %
Allowance for credit losses(254,438)(280,243)(138,842)
Non-interest earning assets1,724,176 1,817,476 1,749,752 
Total assets$35,152,072 $35,416,754 $33,215,252 
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits$2,942,874 $2,774 0.38 %$2,903,300 $3,637 0.50 %$2,173,628 $6,959 1.29 %
Savings and money market deposits12,793,019 12,127 0.38 %11,839,631 14,517 0.49 %10,412,202 37,756 1.46 %
Time deposits4,330,781 7,475 0.70 %5,360,630 11,136 0.83 %7,510,070 38,107 2.04 %
Total interest bearing deposits20,066,674 22,376 0.45 %20,103,561 29,290 0.58 %20,095,900 82,822 1.66 %
Federal funds purchased8,000 3 0.15 %20,707 6 0.12 %94,066 367 1.56 %
FHLB and PPPLF borrowings3,072,717 17,558 2.32 %3,698,666 19,207 2.07 %4,414,830 25,084 2.29 %
Notes and other borrowings722,305 9,252 5.12 %722,581 9,251 5.12 %429,098 5,290 4.93 %
Total interest bearing liabilities23,869,696 49,189 0.83 %24,545,515 57,754 0.94 %25,033,894 113,563 1.82 %
Non-interest bearing demand deposits7,491,249 7,152,967 4,368,553 
Other non-interest bearing liabilities746,973 772,277 749,101 
Total liabilities32,107,918 32,470,759 30,151,548 
Stockholders' equity3,044,154 2,945,995 3,063,704 
Total liabilities and stockholders' equity$35,152,072 $35,416,754 $33,215,252 
Net interest income$200,413 $197,736 $185,216 
Interest rate spread2.15 %2.07 %1.97 %
Net interest margin2.39 %2.33 %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 March 31,
c20212020
Basic earnings per common share: 
Numerator:
Net income (loss)$98,814 $(30,951)
Distributed and undistributed earnings allocated to participating securities
(1,252)— 
Income (loss) allocated to common stockholders for basic earnings per common share$97,562 $(30,951)
Denominator:
Weighted average common shares outstanding93,075,702 93,944,529 
Less average unvested stock awards(1,205,529)(1,101,370)
Weighted average shares for basic earnings (loss) per common share91,870,173 92,843,159 
Basic earnings (loss) per common share$1.06 $(0.33)
Diluted earnings (loss) per common share:
Numerator:
Income (loss) allocated to common stockholders for basic earnings per common share$97,562 $(30,951)
Adjustment for earnings reallocated from participating securities
1 — 
Income (loss) used in calculating diluted earnings per common share$97,563 $(30,951)
Denominator:
Weighted average shares for basic earnings (loss) per common share91,870,173 92,843,159 
Dilutive effect of stock options and certain shared-based awards93,540 — 
Weighted average shares for diluted earnings per common share
91,963,713 92,843,159 
Diluted earnings (loss) per common share$1.06 $(0.33)

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BANKUNITED, INC. AND SUBSIDIARIES
SELECTED RATIOS
 Three Months Ended March 31,
 20212020
Financial ratios (4)
  
Return on average assets1.14 %(0.37)%
Return on average stockholders’ equity13.2 %(4.1)%
Net interest margin (3)
2.39 %2.35 %
 March 31, 2021December 31, 2020
Asset quality ratios  
Non-performing loans to total loans (1)(5)
1.00 %1.02 %
Non-performing assets to total assets (2)(5)
0.67 %0.71 %
Allowance for credit losses to total loans0.95 %1.08 %
Allowance for credit losses to non-performing loans (1)(5)
94.56 %105.26 %
Net charge-offs to average loans (4)
0.17 %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 month periods.
(5)    Non-performing loans and assets include the guaranteed portion of non-accrual SBA loans totaling $48.2 million or 0.21% of total loans and 0.14% of total assets, at March 31, 2021; and $51.3 million or 0.22% of total loans and 0.15% of total assets, at December 31, 2020.

March 31, 2021December 31, 2020Required to be Considered Well Capitalized
BankUnited, Inc.BankUnited, N.A.BankUnited, Inc.BankUnited, N.A.
Capital ratios
Tier 1 leverage8.7 %9.8 %8.6 %9.5 %5.0 %
Common Equity Tier 1 ("CET1") risk-based capital13.2 %14.8 %12.6 %13.9 %6.5 %
Total risk-based capital15.2 %15.5 %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 13.0% and 14.6%, respectively, at March 31, 2021.
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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 estimated credit losses, particularly in view of the volatility of the provision for credit losses resulting from the COVID-19 pandemic. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following table reconciles the non-GAAP financial measurement of PPNR to the comparable GAAP financial measurement of income (loss) before income taxes for the three months ended March 31, 2021 and 2020 and the three months ended December 31, 2020 (in thousands):
Three Months Ended
March 31, 2021December 31, 2020March 31, 2020
Income (loss) before income taxes (GAAP)$131,304 $106,965 $(40,422)
Plus: Provision for (recovery of) credit losses(27,989)(1,643)125,428 
PPNR (non-GAAP)
$103,315 $105,322 $85,006 
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 March 31, 2021 and December 31, 2020 (dollars in thousands):
March 31, 2021December 31, 2020
Total loans (GAAP)$23,361,067$23,866,042
Less: Government insured residential loans1,759,2891,419,074
Less: PPP loans911,951781,811
Less: MWL1,145,9571,259,408
Total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP)$19,543,870$20,405,749
ACL$220,934$257,323
ACL to total loans (GAAP)0.95 %1.08 %
ACL to total loans, excluding government insured residential loans, PPP loans and MWL (non-GAAP)1.13 %1.26 %
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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): 
March 31, 2021December 31, 2020December 31, 2019
Total stockholders’ equity (GAAP)$3,061,835 $2,983,012 $2,980,779 
Less: goodwill and other intangible assets77,637 77,637 77,674 
Tangible stockholders’ equity (non-GAAP)$2,984,198 $2,905,375 $2,903,105 
 
Common shares issued and outstanding93,263,632 93,067,500 95,128,231 
 
Book value per common share (GAAP)$32.83 $32.05 $31.33 
 
Tangible book value per common share (non-GAAP)$32.00 $31.22 $30.52 
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BankUnited, Inc. Reports