BankUnited, bruised but not broken by the recent industry crisis, ultimately expects to gain ground by hiring talent from competitors that have decided to pull back, leaving both prized borrowers and lenders to pursue relationships with new banks.
Chairman and CEO Rajinder Singh said Tuesday during the company's first-quarter earnings call that BankUnited's commercial-and-industrial loan pipeline is healthy in large part because "out of this chaos comes also an opportunity. We've had a couple of really large bank sales and others were struggling, and they're throwing off a lot of business."
There is "a lot of talent and a lot of business that has been thrown off. And I have actually interviewed more [loan] producers in the last month than I did all of last year," Singh said. "So while there is a moment of caution, it is also a moment of opportunity — and we have to capitalize on that."
BankUnited, headquartered in Miami Lakes, Florida, has a large presence in its home state as well as New York. It also recently
BankUnited did see a drop in total deposits during the first quarter — down $1.79 billion, or 6.5% — driven by panic caused amid the fallout of the March failures. But Singh said BankUnited is already building up a target list of new and potential deposit relationships.
"So the pipeline for deposits looks healthier than they did a week before this happened, and we are doing everything to capitalize on them," Singh said.
BankUnited said its deposits declined by $1.75 billion during the week of March 13, right after the failures, and then stabilized the remainder of the quarter.
Singh said loan growth, and the deposits that could come with them, will be
"I did tell my team members or my entire producing staff that we're no longer in the business of home runs; we're only in the business of singles and doubles," Singh said of loan growth. "What this means is we have to build more granular. But we've been saying this actually for the last couple of years, but now it is even more important."
There "is a lot of big ticket business being thrown off; that's not what we're interested in," Singh added. Instead, "it's core middle market, small business, which we want to build the pipelines in the business over the long term."
The cost to gather and keep deposits rose in the first quarter and is expected to rise further, weighing on the bank's net interest margin. BankUnited said its NIM fell 19 basis points during the first quarter to 2.62%.
Chief Financial Officer Leslie Lunak said the ultimate duration of high deposit costs remains a guessing game, but additional NIM compression is expected.
"I will just say that any guidance we give you about the NIM is, I would say, fraught with peril," Lunak said on the earnings call. But "the NIM will be under pressure again next quarter."
Analysts at Piper Sandler said in a report this week that lofty funding costs and weaker NIMs are prevailing themes during this earnings season. NIM pressure "has been even worse than we forecast," the analysts said. "The outlook continues to get rougher."
Comparing the March failures to the aftermath of the financial crisis, Singh said "2009 felt like a hurricane," with problems building over the two preceding years in a way similar to how forecasters can anticipate hurricanes. The March failures this year were sudden and unexpected like tornadoes, he said.
"It happened with little to no warning. I mean I didn't know that a week before that this was going to happen. I'm not sure anyone did," Singh said. "So we're still a little shell shocked to be honest. We're still worried…could this happen again?"
BankUnited reported net income of $52.9 million, or 70 cents per share, compared to $67.2 million, or 79 cents, a year earlier.
