is taking warningsfrom regulators on the CRE loan market seriously.
As aresult, they plan to be more selective when lending into the space and could seelower loan growth than the typically fast-expanding bank has seen in recent years,BankUnited Chairman, President and CEO John Kanas and other company executives saidduring a second-quarter earnings conference call July 20.
"We'vefound, particularly in New York, and in the commercial real estate business in Florida,as well, very overzealous competition on the lending side," Kanas said duringthe call, explaining the company's increasingly skeptical view of CRE and otherloan markets. Backing away from the market is "on the table for us in the secondhalf of the year," Kanas said.
The companyis seeing many of the poor lending practices that the regulators warned the industryabout.
"We'retaking what the regulators are saying and comparing it to what's actually happeningon the ground, and we are most likely going to [take] our foot off the gas pedala little bit in the second half with regard to loan growth," Kanas said, addingthat the company will operate with a "new level of caution."
"Youhave to be a fool not to listen to what the regulators are saying. … I hope they'rewrong, I think they're wrong, by the way, but we don't know. None of us are clairvoyant.… It's a good time to be cautious," Kanas said.
He andother executives refused to be pinned down during the question-and-answer portionof the call on just how much slower they expect loan growth will be, though Kanassaid it will be lower than the 30% annual growth the company has seen previously.
Loangrowth has been a key element of BankUnited's profitability during Kanas' time atthe bank, and executives tried to assure analysts and investors that the companywill still hit its earnings targets if it steps back from the lending market.
"Evenwith somewhat lower growth projections … we still anticipate increasing EPS in theback half of 2016 and we're not worried about our EPS estimates for this year,"Leslie Lunak, the company's CFO, said.