BankUnited in Miami Lakes, Fla., reported a decline in second-quarter profit as increased costs from its Federal Deposit Insurance Corp. indemnification asset offset a sharp uptick in new lending.
The $21.4 billion-asset company's net income fell 3.9% to $46.6 million, or 43 cents per share, from a year earlier. That met the average estimate of analysts polled by Bloomberg.
Net interest income rose 9.1% to $180.9 million. BankUnited attributed the increase to higher interest income from a rise in the average balance of loans outstanding. The net interest margin decreased 72 basis points to 3.95%.
Total loans increased to $14.3 billion, as BankUnited booked $1.2 billion of new loans and leases in the quarter. BankUnited's New York market contributed $526 million of the new loans during the quarter and Florida contributed $184 million. In addition, BankUnited added $174 million of loans from its acquisition of CertusHoldings' small business loan unit.
"Strong economic growth in both our Florida and New York markets continues unabated," John Kanas, chairman and chief executive, said in a news release.
Fee income rose 2.9% to $21.1 million. BankUnited's net loss on FDIC indemnification tied to loss-share agreements increased to $16.8 million from $6 million a year earlier. The company recorded $8.2 million of gains on sales of loans, up from a $9,000 loss. Lease financing fees rose 50% to $7 million.
Noninterest expense rose 16% to $123.4 million. Amortization of the FDIC indemnification asset rose 74% to $26.5 million. Salaries and employee-benefit costs rose 4.6% to $51.8 million.