Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

BankUnited, Inc. (NYSE:BKU)

Q4 2013 Earnings Conference Call

January 23, 2014 09:00 a.m. ET

Executives

Mary Harris – SVP, Marketing & Public Relations

John Kanas – Chairman, President & CEO

Rajinder Singh – COO

Leslie Lunak – CFO

Analysts

Brady Gailey – KBW

Matthew Clark – Credit Suisse

Herman Chan – Wells Fargo Securities

Operator

Good morning, ladies and gentlemen, and welcome to the Q4 2013 BankUnited Inc. Earnings Conference Call hosted by Mary Harris, Senior Vice President of Marketing and Public Relations. My name is Benny, and I will be your event manager this morning. For the conference, you remain on listen-only. (Operator instructions).

And now I would like to hand over to Mary. Please go ahead.

Mary Harris

Thank you and good morning. It's my pleasure to introduce BankUnited’s Chairman, President and CEO, John Kanas. But first I'd like to remind everyone that this call 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 terminologies such as outlook, believes, expects, potential, continues, may, will, could, should, seeks, approximately, predicts, intends, plans, estimates, anticipates or the negative version of those words or other comparable words. Any forward-looking statements contained in this call 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 the 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 relating to the company's operations, financial results, financial condition, business prospects, growth strategy, and liquidity. If one or more of these risks or other 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 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, 2012, available at the SEC's website sec.gov. I will hand it over to John?

John Kanas

Thanks, Mary. Good morning. Obviously we are feeling very good about the fourth quarter. We did $0.50, about $52.4 million, a little better than we expected, driven mostly by the extraordinary loan growth this quarter. I will break that down for you in a minute.

Net income about $209 million, at $2.01 for the year, gives us an ROE of 11.16% and an ROA of 1.55%. We broke the barrier of 15 billion for the first time with total assets exceeding that amount as of the end of the year as we head into 2014. We think that loan growth out into 2014 will fall again somewhere between $4 billion and $5 billion, spread out in a similar way that you saw in 2013. The difference between this company now and two or three years ago is that, you know, we have spread out our loan risk substantially into our national platforms, and broken up between Florida and New York and into some consumer lending. So we have made big progress in diversifying this portfolio.

Loans grew by $1.3 billion for the quarter, and that sets the stage for 2014. You should not expect to see $1.3 billion per quarter in 2014. There will be ups and downs from there, but again somewhere between $4 billion and $5 billion. The breakdown this quarter was Florida about -- just little under $250 million. The national platforms had $344 million in growth and a $170 million of that was purchased resi mortgages, $111 of that was the lending subs, and a little over $60 million in indirect auto.

New York was responsible for just under $720 million worth of loan growth during the quarter. In terms of loan growth by type, it is the same as we have been reporting to you for the last three quarters and that is mostly C&I and commercial real estate, a lot of the commercial real estate classifications in the New York multi-family business, and that was a little over $1 billion, $200 million give or take from residential mortgage, and less than $100 million from consumer, mostly indirect.

Our strategy continues to revolve around building a balanced loan portfolio both by type and geographically. As a percentage of the new loan portfolio, 42% is now represented by Florida, 21% by New York and 37% from the national platforms. In terms of geographic expansion looking out into next year not much to talk about. We did open a branch in Brooklyn about a week ago in Borough Park, where we had a grand opening I guess, actually two weeks ago, and expect to do a fair amount of business. We have got a lot of long-term relationships in the Brooklyn market, on both the lending side and in the deposit side, and have relocated some of our lenders to that spot.

Over the next couple of years we will look for one or more two branches in the sort of tri-state region looking out possibly further onto Long Island, but if we find anything at all it will be very small industrial locations, where we can increase our outreach on Long Island, particularly in Suffolk, where we only have one branch today.

Our capital continues to exceed all guidelines. We continue to deploy the capital to the balance sheet growth and currently we anticipate a capital raise, probably not until sometime in 2015. I know we have talked about that before -- two quarters ago we were thinking that that might come in 2014. We now believe that there won’t be any need to raise capital until the early part of 2015. So, all in all a great quarter. We are enjoying a number of positive things that push -- the South Florida market continues to improve dramatically. The real estate business in this town is coming back day after day. The unabsorbed condominium market has been fully absorbed, and new construction can be viewed anywhere over Brickell Avenue, and where possible in Miami Beach as well.

And real estate is the center or the focal point, if you will, of all retail business here in Florida, and so all of the satellite businesses that revolve around real estate and its recovery are doing very, very well and fuelling our C&I portfolio. New York City, of course, continues to grow. We are seeing lots of new construction in the residential space in New York, and that seems to be -- everything seems to be pointing towards that continuing into 2014, despite our new mayor that everybody is talking about. Everybody seems to be very optimistic about Manhattan and the boroughs out into ’14 and beyond.

So, all in all, very satisfying results for the company. I would -- if I had to put it into just a few words I would say diversification, which is what we have been concentrating on for the last 18 months, spreading out our risk of loans over different geographic markets and different loan types all of whom are managed and supervised by people, who have had 20 and 25 or 30 years experience in each one of these categories, and all of them by the way are well-known to us both in Florida and in New York and in the national companies.

So we are feeling very, very optimistic going to next year. The markets are terrible as they have been. You will get to see that in I guess -- Raj and Leslie are going to talk a little bit about margins. But they are a little better than we expected them to be by now, but obviously we are putting on loans at rates that we would -- we never thought we will be doing. We are, however, a good number of our C&I loans are variable-rate loans book to LIBOR, and when we see an improvement in interest rates we should see a very quick improvement in the yields of these loan assets as the economy, the underlying macro-economy in the United States continues to heal.

Having said that Raj got a few comments about deposit trends in the mortgage business?

Rajinder Singh

Sure. Thanks John. Talking about the right side of the balance sheet, we continue to grow our deposit base for the year 2013. Deposits grew by $2 billion. For the fourth quarter they grew by a little less than $700 million, and a vast majority of the growth for the quarter, $535 million of that $700 million or so in growth was in demand deposits.

Growth is -- unlike loan growth, which is for the fourth quarter was skewed more towards New York, deposit growth still continues to be skewed more towards Florida. However, we expect that to evolve over time as we are seeing a good pipeline of deposit in New York. Our stated goal to grow deposits, not dollar for dollar with loans, but more like 70% or 75%, it is still our goal for the next few quarters. We still have excess deposits, and we will fund the loan growth through not just deposit growth but other levers as well such as [Indiscernible] our securities portfolio and also average LP borrowing.

The composition of deposits today stands at 27% demand, both interest-bearing and non-interest bearing, 42% in money market savings and 31% time. That 27% number we set out a goal for ourselves to try and get that to over 30%. We are slowly but surely getting there, and expect to get to the 30% plus level sometime this year.

The cost of fund continues to come down, excluding any hedge accounting costs or accretion, so really capturing the real cost of deposits to what we are paying to our consumers, it is down to about 58 basis points for the fourth quarter.

Just a quick note, a reminder, the commercial loss share agreement will expire for us. The fifth year anniversary is coming up in May, most of the portfolio that is left is pretty clean. We are working with the FDIC on looking at our options in terms of selling pieces of that portfolio over the course of the next few months, or as you know to the extent that FDIC doesn’t want us to do that, loss share gets extended for us for those loans that we want to sell. But that portfolio, whatever is left, it is fairly clean. So it is a bit of a nonevent for us.

With that I will just turn it over to Leslie.

Leslie Lunak

Great. Good morning. I will try to fill in a little bit for you, give you a little bit more information about earnings trends and expectations going forward. Obviously pressure on the net interest margin has continued and is expected to continue in the near term given the low interest rate environment that we are operating in and the level of pricing competition. Our NIM declined to 5.73% for the year, and 5.24% for the fourth quarter obviously as a result of the fact that we are replacing these high yielding covered assets with loans that we are making at current market rates of interest.

There is really nothing unexpected about that trend. We believe that the NIM will continue to contract in the future as we have stated before. Nothing has changed about that. It is very difficult as you guys always accuse us of to forecast what the NIM is going to be going forward with the kind of growth that we are putting on the balance sheet, and the dynamic interest-rate environment that is out there, but we do expect the NIM to continue to decline in 2014.

Net interest income in absolute terms on the other hand we expect to be higher in 2014 than it was in 2013 as we continue to grow the balance sheet. Interest-rate risk as you now we manage to a low level. Nothing has changed about that. We would expect an increase in rates to have a moderately positive impact on our net interest income. We would also hope to see better pricing as the yield curve continues to steepen, in fact we saw little bit better pricing in the fourth quarter than we saw in the third quarter, but not dramatically so, not really enough to move the needle very much, and we still don’t expect short-term rates to rise until sometime in 2015. However, we think there may continue to be some steepening of the curve.

Provision for loan losses you see increased this quarter. That is a direct correlation to loan growth, you know, nothing unusual going on in there. Asset quality remained strong with non-performing loans to total loans at 0.39% total and 31 basis points in the non-covered portfolio. Non-covered non-performing assets are only 0.16% of total assets so asset quality metrics remain very, very strong. 68% of our non-performing assets are still covered assets, even though only 16% of the portfolio is now covered loan.

Non-interest income, we continue to see the impact of the amortization of the FDIC indemnification asset. We expect that to continue to increase quarterly through 2014 and then likely start to trend a little lower. We still intend to sell covered loans on a quarterly basis, but the impact that you have been seeing the last few quarters from the sale of the pool of loans with the zero carrying value is really just about done. The impact of that will be insignificant in 2014. We will see a little bit in the first couple of quarters, and then it will just -- that pool will be gone.

We announced previously we had some securities gains this quarter, and as we announced to you previously that was a result of our decision as a response to the release of the Volcker Rule to go ahead and divest some securities that we believe will be impermissible investments under that rule, and should kind of get out in front of any potential market dislocation that might occur.

In non-interest expense we saw an increase over the prior year. That is also just a function of the growth of the company and the growth of the loan portfolio. We do expect non-interest expense to trend higher in 2014. That is going to reflect the full impact of the branch expansion and personnel expansion that we have done in New York. We didn’t feel the full impact of that in ’13, and there will be some additional augmentation of support staff obviously as we continue to grow the loan portfolio and functions like servicing and IT and whatnot. We have managed to successfully push a lot of these costs out, but I think we will see the full impact of those in 2014.

We want to reiterate that as we have said in the past, our expectation is that EPS will decline for 2014. This was something that has been inevitable since day one that there would be a trough in earnings as we grow the balance sheet to replace the high yield and covered assets that are running off. We expect again that it will trend back up starting in 2015 that that there will be that trough in earnings is finally upon us and we fully expect that to occur in ’14.

John I will turn it back over to you for any final thoughts or anything you would like to…

John Kanas

In summary again, we continue to enjoy the recovery of the underlying macro-economy, specifically we are enjoying the recovery of South Florida, and the continued growth in the north-east with regard to primary markets. I am sure we will get questions on M&A, I will be sort of pre-emptive I think, it is the same old story. We have -- you know, Raj and his team and I have [Indiscernible] this year both in the South East and in the North East, and -- to put it simply when we are growing at this rate and we are able to hand pick the assets that we put on our books and hand pick the people whose judgment is behind those assets, and we are able to keep making steps towards fully leveraging this balance sheet through organic growth, it is tough to find an M&A deal that gives us the kind of economic results that would compare favorably to anything that we could do.

Now that doesn’t mean we are not going to get anything done. There are some very interesting thoughts out there and ideas of combining banks this size with other banks this size and larger and smaller. But frankly we haven’t seen the right opportunity yet. We continue to operate in a very different regulatory environment. We guard our relationship with regulators and take it very, very seriously. It is not -- you know, this is a different business today. It is not like the old days. Regulators are determined to make this a safer and more predictable industry, and we get that and we work very closely with them in having them share our thoughts on our growth plans, and particularly on any of the business strategies that we have going out into the future.

So overall solid quarter. This is the year, 2014, we told you -- we told you in 2010 that probably in 2012 where earnings would start to -- EPS would start to go down as the covered assets are running up. But it didn’t happen. And then we told it would happen in 2013, and it doesn’t happen. But we can pretty well assure you that 2014 that will happen, and particularly as the quarters unfold this year working our way towards ’15 when that trend will reverse itself that we will see EPS pressure for a few quarters during ’14, but we look forward very optimistically to a continuation of this kind of safe and well organized and strategized growth, and significant earnings impact that these new assets were putting on the books as rates rise heading into 2015.

So we couldn’t be more pleased unless our stock was $40 a share. But we are all set and actually gotten off to a very, very strong start already in 2014 and we look forward to your questions.

Question-and-Answer Session

Operator

Thank you. (Operator instructions) Okay. We have a question and the first question comes from Brady Gailey from KBW. Please go ahead.

Brady Gailey – KBW

Hi, good morning.

John Kanas

Hi, Brady.

Leslie Lunak

Good morning Brady.

Brady Gailey - KBW

I know in the past as it relates to the margin you have given guidance of around 4 to 4.25 by year-end 2014, I just wondered if I know it is hard to predict, but I wonder if, you know, the way you all see it now that was still the right number, and then taking it one step further any guidance you want to throw out for next year 2015 on the margin?

Leslie Lunak

2015 is asking a lot Brady. Yes, I still think that range for the end of ’14 is about right, somewhere in the mid [4, 4.5] for the year and between 4 and 4.25 by the end of the year. That is still the neighborhood we are looking at. I would say sitting here today for ’15 around 4, but I think that is at this point really difficult to predict that far.

John Kanas

[Indiscernible]?

Leslie Lunak

Yes.

Brady Gailey - KBW

Okay, and again, I continue to be surprised that you know the comp line was basically flat kind of quarter-to-quarter this year, around the $43 million to $44 million, I know that some of the growth was offset by lower equity comp cost from the IPO, but I guess when you take a step back and look at expenses bigger picture, it is going to be up 2014 versus 2013, but what do you think that growth rate looks like, do you think it is 5% expense growth year-over-year or is it 10%, or how much do you think expenses will grow this year?

Leslie Lunak

I mean Brady sitting here today I think it is probably closer to 10%.

Brady Gailey - KBW

Okay.

Leslie Lunak

But you will see -- we have managed to hold these costs off, and you know, our kind of philosophy with hiring people is we hire them when we need them. We don’t hire them six months in advance and let them sit around and do nothing till we need them. But you are right. You know, we are going to have to add to the headcount to support the growth, you know, as I said servicing, IT, compliance, these back-office functions, we are in the process of augmenting some of the staff there now, and we will be in the months and quarters going forward. But you will see that comp line go up in ’14.

John Kanas

The front-end of that Brady is pretty well built out. The retail bankers, private bankers and retail bankers in the branches are pretty well done, but the commercial complements of lenders both in Florida and in New York are pretty well done, certainly all the [expensive] staff has been hired and in place for some time, a good part of 2013. What I need to add is in the back office, as this balance sheet grows and as we keep our mind towards safety and soundness, frankly, and compliance issues we will be extending some of the back-office staffs to frankly to accommodate that asset growth.

Brady Gailey - KBW

Okay, then lastly the tax rate was a little lower this quarter, which you all mentioned a couple of things in the press release about that, but looking forward do you think the tax rate you know is still in that kind of 35% to 36% range?

Leslie Lunak

Brady for the year, for 2014, probably about 35%, 37% except for the third quarter. We’re going to have a little bit of a dip in the third quarter. So that is about what we expect it to run.

Brady Gailey - KBW

Okay, great. Thanks for the color.

Operator

Thanks for the question. Next question comes from Matthew Clark from Credit Suisse. Please go ahead.

Matthew Clark - Credit Suisse

Hi, good morning guys.

John Kanas

Good morning.

Leslie Lunak

Good morning.

Matthew Clark - Credit Suisse

On the New York growth, about two times what you guys did last quarter, running ahead I think of plans in terms of a run rate, can you give us a sense for the mix there, commercial real estate, multi-family, C&I the breakout and also whether or not there might have been, you know, a couple of lumpier credits in there as well, just curious about the incremental…

John Kanas

Give us a second here Matt. So, commercial real estate was a little under 600 million, commercial C&I 112 million, and 13 or 14 in residential. This, there is -- you know this -- the way the closings fall on these, particularly the multi-family loans, which tend to be larger, you know, can have a lot of impact on a particular quarter. So, I mean, don’t take the fourth quarter to mean, you know, it is going to continue to go up from 1.3 billion and 1.4 billion, 1.5 billion and 1.6 billion in the future. That is unlikely as we remain disciplined here particularly for rate, in this rate environment that we know is changing.

So it is tough to call this quarter by quarter, but we are all comfortable by saying 4 billion or 5 billion worth of growth for the whole year ’14.

Matthew Clark - Credit Suisse

And then in terms of granularity there, can you give us a sense for maybe the average deals that you are doing within multi-family and…

Leslie Lunak

In deal size?

Matthew Clark - Credit Suisse

You know, just trying to get a sense for lumpiness if any?

Leslie Lunak

The average deal size in New York is still under $10 million, just under $10 million, and we don’t make a lot of real big loans. That hasn’t changed.

John Kanas

Just the occasional $30 million or $40 million or $50 million deal, but they are rare, and so there is not -- there is not a great deal of lumping us in that quarter and I don’t expect it to be.

Rajinder Singh

Yes, we don’t have very large credits in our portfolio. I think even now our largest credit, by relationship, not by loan, by relationship is probably $60 million approximately, give or take some. So for the size of our balance sheet, you know, we tend to stay away from the $100 million type relationships.

Matthew Clark - Credit Suisse

Okay, and then on pricing, I know things are still very competitive, but can you give us a sense for the types of rates you are getting on multi-family, commercial real estate as well as any incremental change from last quarter?

John Kanas

I will say this that in the last two quarters of this, we are seeing intense pressure in pricing in Florida, particularly as the Florida market heats up and gets into full recovery mode. So we are actually finding at least this quarter and last a little bit more opportunity for rates in New York and somewhat and then in Florida, and that is reflected in the growth. Do we have anything more specific here?

Leslie Lunak

Yes, I mean, on average these loans are still going on in the mid-3s. I mean that is. You know, it is a few bits higher this quarter than it was last quarter, but that is still on average what we are putting on that.

John Kanas

I would say this that we really have just gotten started with what we call business banking, which is smaller commercial credits in the New York market, and that team came together late in 2013. Those loans tend to be higher coupon?

Leslie Lunak

Yes, 4, 4.5.

John Kanas

Yes, 4, 4.5, and we will see more of that in ’14 than we saw in ’13 because the team is really gaining momentum now. And certainly we would prefer to do more of those smaller loans and higher coupons than the larger credits, which tend to be great credits, but with very thin margins.

Matthew Clark - Credit Suisse

Okay, and then just lastly on deposit pricing, I think in the last quarter or two you guys had done some promotional pricing to just generate some growth there. Curiously if you guys have -- still have -- what your rates I guess are on maybe the city promotions in New York?

John Kanas

In New York we actually had to offer less in terms of promotional pricing because it is not really a consumer–based business in the north. But here in Miami we do from time to time offer promotions to bring in new business. But overall we are taking cost of fund down even as we speak. We did -- the last re-pricing was done I want to say in early December. So you see some impact of that in the fourth quarter. You will see the rest of it in the first quarter.

Again these are small steps now. We are not taking big steps and changing pricing. So any change will be nominal, but it will be a trend downwards. Most of the change downward will come really from the fact that DDA is growing as rapidly as it is. I mean a vast majority of our growth in the fourth quarter was DDA and that is really what is on the cost of funds, not tweaking deposit pricing by a few basis points.

Matthew Clark - Credit Suisse

I mean in Florida, thank you.

Operator

Thank you. Okay. Next question comes from Herman Chan from Wells Fargo. Please go ahead.

Herman Chan – Wells Fargo Securities

Thanks. John, you mentioned some pricing pressure in Florida in your earlier remarks, it looks like loan growth has slowed in this state relative to the recent run in rate, should we expect run rates in Florida to lag somewhat relative to the performance in New York and the national businesses?

John Kanas

[Indiscernible] particularly inside of the New York market that it will -- we will see more loan growth coming out of New York than Florida. It is too early to say, you know, exactly what that ratio is going to look like. But right now we are just seeing -- we are seeing more opportunities for yield as well as volume in New York, and it is natural. I mean it is a huge market and we know it very, very well.

And we are trying to be diligent. Look we understand that the Florida market is volatile. It is in a boom-bust economy for 50 years, and so we are being cautious. But we are certainly -- there is no abatement of the improvement of the local economy down here. It is really quite remarkable what we are seeing and it is just not, and it is not just in real estate. So, I suspect we will see our fair share coming out of Florida as well this year.

Rajinder Singh

I think Herman what you are seeing is a little bit of -- we have [Indiscernible] we didn’t have a year and a half ago. We can allocate capital a little better being in two geographies, in fact in national in three geographies. So you are seeing us do some of that. And Florida is a small market and a more competitive market, and has become more competitive in the last year or so, banks that were not very active are now active. So we see more competition here as compared to just 12 months back.

John Kanas

So meeting yesterday with our lenders and our retail people, and I reminded them that over the last four years we have probably taken $7 billion worth of business away from our competitive banks in Florida, and frankly they are losing their sense of humor over that, and so they are getting a little tougher by trying to protect their relationships, and I suspect that will continue.

Herman Chan – Wells Fargo Securities

Understood, and it looks like the residential mortgage purchase program continued, you showed more expectations on resi mortgage purchases in 2014? Thanks.

John Kanas

From the second and third quarter to the fourth quarter as you can see we have taken it down meaningfully. You should expect a similar level of activity over the course of 2014. So, it is now about $170 million. I would expect give or take that level of activity.

Herman Chan – Wells Fargo Securities

Great. Thank you very much.

Operator

Thank you. (Operator instructions) Okay. We have a question. It comes from Brady Gailey from KBW. Please go ahead.

Brady Gailey – KBW

Yes, just to follow up, you know, John, private equity is now down to 21%, I think from prior conversations with you, they are kind of down during secondaries and they will just kind of trade out of it from here. You know, I think they roll off lock up sometime next week just with earnings being over. What -- how do you think private equity ownership kind of dwindles down from here?

John Kanas

We keep close to them, obviously, Brady, and have talked to them recently about their intentions, and while you are right it is -- we are probably done doing secondaries. I would expect to see them sort of thinking in the future about the possibilities in block trade, but they have -- they have assured us and given us every indication that whatever they do, they will continue to do in a synchronized way. So you shouldn’t have to worry about the stock being dribbled out here over time. And look I won’t speak for them and you know, I’m not sure what their investment positions are right now, but it is reasonable to expect that over the next two years that these guys get out of here for the most part of this -- their time horizon is near the end. But we expect that there will be nothing here that compromises the trading activity of the stock.

Brady Gailey – KBW

Looking at a capital raise some time early next year. I know it is kind of further out, but I mean do you think that likely takes the form of additional comment or do you think that you would raise like in CPP or some non-common form of capital, and any idea roughly how much you would think about raising?

Rajinder Singh

Brady it is Raj. I will take that. It is too early for us to tell what form of capital we would raise because we are talking at least a year out if not longer. And market conditions to some extent will drive that. But I just want to go back to your question that you asked John about the private equity guys. And when you said you know dribble out stock, I just want to make sure that we are clear. I don’t think private equity firms in general dribble out and then sell her a few thousand shares everyday.

I think what they do typically is they will do an underwritten offering, and it will be a block trade, it might even be a secondary, a secondary and block trade the only difference is one is marketed for a day and the other one is marketed for a night. So, it will still be an underwritten offering. It will not be like calling the broker or you know, calling the broker and selling 10,000 shares everyday. That is not how these things generally happen.

John Kanas

I mean we have talked to them about that and they have -- they have always acted in the best interest of BankUnited, since they have been part of our story, and I have no reason to believe they won’t continue to.

Brady Gailey – KBW

And then lastly another one probably for Raj, Raj the bond book continues to fall here, it is around, you know, 30% of earning assets now, you know, where do you think that ratio goes. I mean, you know, obviously it will keep going down as you guys shrink the bond book and grow the loan portfolio, but do you think bonds to average earning assets kind of bottoms around what 15%, 20%?

Rajinder Singh

I don’t think so in that range, you know, in that range. It still has a way to go to get there, but I -- you know, given the size of our balance sheet let us say a year from today, if they are a $20 billion bank, you would expect to see at least $2 billion to $3 billion in that range, yes.

Leslie Lunak

And remember that is an amortizing portfolio. So, a lot of which you see happening there is just natural amortization.

Rajinder Singh

Right, with the exception of CLOs that we sold most of the run-off in that portfolio is just, you know, regular run-off.

Brady Gailey – KBW

Okay. Thanks again.

Operator

Okay. At this time there is no further question.

John Kanas

Okay. Thanks everybody for tuning in. We appreciate you having an interest in our story, and look forward to talking to you in 90 days. Bye-bye.

Operator

Ladies and gentlemen that concludes the call for today. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: BankUnited's CEO Discusses Q4 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts