SEC Filing | BankUnited, Inc.

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bku-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

Commission File Number: 001-35039

BankUnited, Inc.

(Exact name of registrant as specified in its charter)


Delaware						27-0162450
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


14817 Oak Lane	Miami Lakes	FL	33016
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (305) 569-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Trading Symbol

Name of Exchange on Which Registered

Common Stock, $0.01 Par Value

BKU

New York Stock Exchange

The number of outstanding shares of the registrant common stock, $0.01 par value, as of July 31, 2023 was 74,414,998.

BANKUNITED, INC.

Form 10-Q

For the Quarter Ended June 30, 2023

TABLE OF CONTENTS


		Page

	Glossary of Defined Terms	ii

PART I.	FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Cash Flows	4
	Consolidated Statements of Stockholders’ Equity	6
	Notes to Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	63

ITEM 4.	Controls and Procedures	63

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	63

ITEM 1A.	Risk Factors	63

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63

ITEM 6.	Exhibits	64

SIGNATURES		65

GLOSSARY OF DEFINED TERMS

The following acronyms and terms may be used throughout this Form 10-Q, including the consolidated financial statements and related notes.



ACL						Allowance for credit losses
AFS						Available for sale
ALCO						Asset/Liability Committee
ALM						Asset Liability Management
AOCI						Accumulated other comprehensive income


ASC						Accounting Standards Codification
ASU						Accounting Standards Update






BKU						BankUnited, Inc.
BOLI						Bank Owned Life Insurance
BankUnited						BankUnited, National Association
The Bank						BankUnited, National Association
Bridge						Bridge Funding Group, Inc.
BTFP						Bank Term Funding Program
Buyout loans						FHA and VA insured mortgages from third party servicers who have exercised their right to purchase these loans out of GNMA securitizations


CCAR						Comprehensive Capital Analysis and Review

CD						Certificate of Deposit
CECL						Current expected credit losses
CET1						Common Equity Tier 1 capital

C&I						Commercial and Industrial loans, including owner-occupied commercial real estate
CLO						Collateralized loan obligations
CMBS						Commercial mortgage-backed securities
CME						Chicago Mercantile Exchange
CMOs						Collateralized mortgage obligations



CRE						Commercial real estate loans, including non-owner occupied commercial real estate and construction and land




DSCR						Debt Service Coverage Ratio


EVE						Economic value of equity


FCA						The Financial Conduct Authority

FDIA						Federal Deposit Insurance Act
FDIC						Federal Deposit Insurance Corporation

FHA						Federal Housing Administration
FHLB						Federal Home Loan Bank
FICO						Fair Isaac Corporation (credit score)

FRB						Federal Reserve Bank
GAAP						U.S. generally accepted accounting principles
GDP						Gross Domestic Product

GNMA						Government National Mortgage Association







ISDA						International Swaps and Derivatives Association

LGD						Loss Given Default
LIBOR						London InterBank Offered Rate
LIHTC						Low Income Housing Tax Credits
LTV						Loan-to-value
MBS						Mortgage-backed securities
MSA						Metropolitan Statistical Area


NRSRO						Nationally recognized statistical rating organization







OREO						Other real estate owned


PCD						Purchased credit-deteriorated
PD						Probability of default
Pinnacle						Pinnacle Public Finance, Inc.






REIT						Real Estate Investment Trust





SBA						U.S. Small Business Administration

SEC						Securities and Exchange Commission

SOFR						Secured Overnight Financing Rate


TDR						Troubled-debt restructuring
Tri-State						New York, New Jersey and Connecticut
UPB						Unpaid principal balance

VA loan						Loan guaranteed by the U.S. Department of Veterans Affairs

iii

PART I

Item 1. Financial Statements and Supplementary Data

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)


	June 30, 2023		December 31, 2022
ASSETS
Cash and due from banks:
Non-interest bearing	$	18,355	$	16,068
Interest bearing	282,814		556,579
Cash and cash equivalents	301,169		572,647
Investment securities (including securities reported at fair value of $9,133,937 and $9,745,327)	9,143,937		9,755,327
Non-marketable equity securities	317,759		294,172

Loans	24,629,990		24,885,988
Allowance for credit losses	(166,833)		(147,946)
Loans, net	24,463,157		24,738,042
Bank owned life insurance	318,935		308,212
Operating lease equipment, net	514,734		539,799

Goodwill	77,637		77,637
Other assets	734,151		740,876
Total assets	$	35,871,479	$	37,026,712

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Non-interest bearing	$	7,304,735	$	8,037,848
Interest bearing	2,929,870		2,142,067
Savings and money market	10,084,276		13,061,341
Time	5,519,771		4,268,078
Total deposits	25,838,652		27,509,334
Federal funds purchased	—		190,000
FHLB advances	5,975,000		5,420,000
Notes and other borrowings	715,302		720,923
Other liabilities	816,215		750,474
Total liabilities	33,345,169		34,590,731

Commitments and contingencies

Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 74,429,948 and 75,674,587 shares issued and outstanding	744		757
Paid-in capital	274,202		321,729
Retained earnings	2,623,926		2,551,400
Accumulated other comprehensive loss	(372,562)		(437,905)
Total stockholders' equity	2,526,310		2,435,981
Total liabilities and stockholders' equity	$	35,871,479	$	37,026,712

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Interest income:
Loans	$	326,153	$	209,223	$	634,948	$	400,785
Investment securities	120,604		54,771		239,362		97,819
Other	16,664		2,979		29,527		4,333
Total interest income	463,421		266,973		903,837		502,937
Interest expense:
Deposits	156,868		20,501		290,498		32,363
Borrowings	92,675		21,056		171,587		36,516
Total interest expense	249,543		41,557		462,085		68,879
Net interest income before provision for credit losses	213,878		225,416		441,752		434,058
Provision for credit losses	15,517		23,996		35,305		31,826
Net interest income after provision for credit losses	198,361		201,420		406,447		402,232
Non-interest income:
Deposit service charges and fees	5,349		5,896		10,894		11,856

Gain (loss) on investment securities, net	993		(8,392)		(11,556)		(16,260)
Lease financing	12,519		13,363		25,628		26,778
Other non-interest income	6,626		2,583		17,056		5,377
Total non-interest income	25,487		13,450		42,022		27,751
Non-interest expense:
Employee compensation and benefits	67,414		62,461		138,465		129,549
Occupancy and equipment	11,043		11,399		21,845		22,911
Deposit insurance expense	7,597		3,993		15,504		7,396
Professional fees	3,518		3,256		6,436		5,518
Technology	20,437		17,898		42,163		34,902

Depreciation of operating lease equipment	11,232		12,585		22,753		25,195

Other non-interest expense	23,977		15,810		50,832		28,255
Total non-interest expense	145,218		127,402		297,998		253,726
Income before income taxes	78,630		87,468		150,471		176,257
Provision for income taxes	20,634		21,704		39,593		43,343
Net income	$	57,996	$	65,764	$	110,878	$	132,914
Earnings per common share, basic	$	0.78	$	0.82	$	1.49	$	1.61
Earnings per common share, diluted	$	0.78	$	0.82	$	1.48	$	1.60

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED

(In thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Net income	$	57,996	$	65,764	$	110,878	$	132,914
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on investment securities available for sale:
Net unrealized holding gain (loss) arising during the period	(18,365)		(177,969)		56,571		(352,949)
Reclassification adjustment for net securities gains realized in income	(627)		(670)		(1,183)		(2,648)
Net change in unrealized gains (losses) on securities available for sale	(18,992)		(178,639)		55,388		(355,597)
Unrealized gains (losses) on derivative instruments:
Net unrealized holding gains arising during the period	32,353		12,866		30,188		44,045
Reclassification adjustment for net (gains) losses realized in income	(11,239)		3,077		(20,233)		7,097

Net change in unrealized gains (losses) on derivative instruments	21,114		15,943		9,955		51,142
Other comprehensive income (loss)	2,122		(162,696)		65,343		(304,455)
Comprehensive income (loss)	$	60,118	$	(96,932)	$	176,221	$	(171,541)

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(In thousands)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	110,878	$	132,914
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and accretion, net	(5,114)		(4,337)
Provision for credit losses	35,305		31,826



Loss on investment securities, net	11,556		16,260
Equity based compensation	10,150		11,862
Depreciation and amortization	38,240		38,154
Deferred income taxes	2,143		15,147

Proceeds from sale of loans held for sale, net	196,256		426,174


Other:
(Increase) decrease in other assets	(23,130)		203,717
Increase in other liabilities	47,290		183,713
Net cash provided by operating activities	423,574		1,055,430

Cash flows from investing activities:

Purchases of investment securities	(113,800)		(2,315,336)
Proceeds from repayments and calls of investment securities	551,928		1,054,902
Proceeds from sale of investment securities	233,143		710,769
Purchases of non-marketable equity securities	(284,750)		(222,563)
Proceeds from redemption of non-marketable equity securities	261,163		145,013
Purchases of loans	(340,694)		(1,575,715)
Loan originations and repayments, net	363,132		786,260
Proceeds from sale of loans, net	32,500		5,430




Other investing activities	(12,073)		(16,414)
Net cash provided by (used in) investing activities	690,549		(1,427,654)

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In thousands)


	Six Months Ended June 30,
	2023		2022





Cash flows from financing activities:
Net decrease in deposits	(1,670,682)		(977,203)
Net decrease in federal funds purchased	(190,000)		(199,000)
Additions to FHLB borrowings	2,015,000		2,510,000
Repayments of FHLB borrowings	(1,460,000)		(410,000)

Dividends paid	(38,983)		(40,842)

Repurchase of common stock	(55,154)		(325,741)
Other financing activities	14,218		13,926
Net cash provided by (used in) financing activities	(1,385,601)		571,140
Net increase (decrease) in cash and cash equivalents	(271,478)		198,916
Cash and cash equivalents, beginning of period	572,647		314,857
Cash and cash equivalents, end of period	$	301,169	$	513,773

Supplemental disclosure of cash flow information:
Interest paid	$	418,168	$	65,545
Income taxes paid (refunded), net	$	8,827	$	(122,242)

Supplemental schedule of non-cash investing and financing activities:


Transfers from loans to loans held for sale	$	228,695	$	439,222

Dividends declared, not paid	$	20,051	$	19,240



Obligations incurred in acquisition of affordable housing limited partnerships	$	—	$	55,000

The accompanying notes are an integral part of these consolidated financial statements

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - UNAUDITED

(In thousands, except share data)


	Common Shares Outstanding	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance at March 31, 2023	74,423,365	$	744	$	269,353	$	2,585,981	$	(374,684)	$	2,481,394


Comprehensive income	—	—		—		57,996		2,122		60,118
Dividends ($0.27 per common share)	—	—		—		(20,051)		—		(20,051)
Equity based compensation	49,264	1		4,869		—		—		4,870
Forfeiture of unvested shares and shares surrendered for tax withholding obligations	(42,681)	(1)		(20)		—		—		(21)


Balance at June 30, 2023	74,429,948	$	744	$	274,202	$	2,623,926	$	(372,562)	$	2,526,310

Balance at March 31, 2022	84,052,021	$	841	$	626,564	$	2,391,526	$	(157,699)	$	2,861,232
Comprehensive loss	—	—		—		65,764		(162,696)		(96,932)
Dividends ($0.25 per common share)	—	—		—		(19,240)		—		(19,240)
Equity based compensation	24,011	—		4,619		—		—		4,619
Forfeiture of unvested shares and shares surrendered for tax withholding obligations	(32,228)	(1)		(23)		—		—		(24)

Repurchase of common stock	(6,099,588)	(61)		(243,577)		—		—		(243,638)
Balance at June 30, 2022	77,944,216	$	779	$	387,583	$	2,438,050	$	(320,395)	$	2,506,017


	Common Shares Outstanding	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
















Balance at December 31, 2022	75,674,587	$	757	$	321,729	$	2,551,400	$	(437,905)	$	2,435,981
Impact of adoption of ASU 2022-02	—	—		—		1,336		—		1,336
Balance at January 1, 2023	75,674,587	757		321,729		2,552,736		(437,905)		2,437,317
Comprehensive income	—	—		—		110,878		65,343		176,221
Dividends ($0.27 per common share)	—	—		—		(39,688)		—		(39,688)
Equity based compensation	646,243	6		14,453		—		—		14,459
Forfeiture of unvested shares and shares surrendered for tax withholding obligations	(256,637)	(3)		(6,842)		—		—		(6,845)

Repurchase of common stock	(1,634,245)	(16)		(55,138)		—		—		(55,154)
Balance at June 30, 2023	74,429,948	$	744	$	274,202	$	2,623,926	$	(372,562)	$	2,526,310



Balance at December 31, 2021	85,647,986	$	856	$	707,503	$	2,345,342	$	(15,940)	$	3,037,761
Comprehensive loss	—	—		—		132,914		(304,455)		(171,541)
Dividends ($0.50 per common share)	—	—		—		(40,206)		—		(40,206)
Equity based compensation	492,061	5		10,945		—		—		10,950
Forfeiture of unvested shares and shares surrendered for tax withholding obligations	(164,340)	(2)		(5,204)		—		—		(5,206)

Repurchase of common stock	(8,031,491)	(80)		(325,661)		—		—		(325,741)
Balance at June 30, 2022	77,944,216	$	779	$	387,583	$	2,438,050	$	(320,395)	$	2,506,017

The accompanying notes are an integral part of these consolidated financial statements

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

June 30, 2023

Note 1 Basis of Presentation and Summary of Significant Accounting Policies

BankUnited, Inc. is a national bank holding company with one wholly-owned subsidiary, BankUnited, collectively, the Company. BankUnited, a national banking association headquartered in Miami Lakes, Florida, provides a full range of banking and related services to individual and corporate customers through banking centers in Florida, the New York metropolitan area and Dallas, Texas. The Bank also offers certain commercial lending and deposit products through national platforms and regional wholesale banking offices.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, these do not include all of the information and footnotes required for a fair presentation of financial position, results of operations and cash flows in conformity with GAAP and should be read in conjunction with the Company’s consolidated financial statements and the notes thereto appearing in BKU’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected in future periods.

The Company has a single operating segment and thus a single reportable segment. While management monitors the revenue streams of its various business units, the business units serve a similar base of primarily commercial clients, providing a similar range of products and services, managed through similar processes and platforms. The Company’s chief operating decision maker makes company-wide resource allocation decisions and assessments of performance based on a collective assessment of the Company’s operations.

Accounting Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and disclosures of contingent assets and liabilities. Actual results could differ significantly from these estimates.

The most significant estimate impacting the Company's consolidated financial statements is the ACL.

New Accounting Pronouncements Adopted During the Six Months Ended June 30, 2023

ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326). This ASU eliminated the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables - Troubled Debt Restructurings by Creditors. The ASU enhanced disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty, updated certain requirements related to accounting for credit losses under ASC 326 and required disclosure of current-period gross charge-offs of financing receivables by year of origination. The Company adopted this ASU in the first quarter of 2023, prospectively, except with respect to the recognition and measurement of TDRs, for which the modified retrospective transition method was applied. The Company recorded a reduction to the ACL of $1.8 million and a cumulative-effect adjustment, net of tax, to retained earnings of $1.3 million on January 1, 2023.

Accounting Pronouncements Not Yet Adopted

ASU No. 2023-02—Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures using the Proportional Amortization Method (A Consensus of the Emerging Issues Task Force). This ASU was issued to expand use of the proportional amortization method of accounting to equity investments in tax credit programs beyond those in LIHTC programs. The ASU allows entities to elect the proportional amortization method, on a tax-credit-program-by-tax-credit-program basis, for all equity investments in tax credit programs meeting the eligibility criteria established. This ASU is effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2023. Currently, all of the Company's equity investments in tax credit programs are in LIHTC programs accounted for using the proportional amortization method.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

June 30, 2023

Note 2 Earnings Per Common Share

The computation of basic and diluted earnings per common share is presented below for the periods indicated (in thousands, except share and per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
c	2023		2022		2023		2022
Basic earnings per common share:
Numerator:
Net income	$	57,996	$	65,764	$	110,878	$	132,914
Distributed and undistributed earnings allocated to participating securities	(881)		(999)		(1,679)		(1,927)
Income allocated to common stockholders for basic earnings per common share	$	57,115	$	64,765	$	109,199	$	130,987
Denominator:
Weighted average common shares outstanding	74,424,631		80,300,069		74,588,904		82,629,098
Less average unvested stock awards	(1,183,039)		(1,257,258)		(1,188,430)		(1,234,678)
Weighted average shares for basic earnings per common share	73,241,592		79,042,811		73,400,474		81,394,420
Basic earnings per common share	$	0.78	$	0.82	$	1.49	$	1.61
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share	$	57,115	$	64,765	$	109,199	$	130,987
Adjustment for earnings reallocated from participating securities	1		3		5		4
Income used in calculating diluted earnings per common share	$	57,116	$	64,768	$	109,204	$	130,991
Denominator:
Weighted average shares for basic earnings per common share	73,241,592		79,042,811		73,400,474		81,394,420
Dilutive effect of certain share-based awards	179,318		350,734		312,708		244,808
Weighted average shares for diluted earnings per common share	73,420,910		79,393,545		73,713,182		81,639,228
Diluted earnings per common share	$	0.78	$	0.82	$	1.48	$	1.60

Potentially dilutive unvested shares totaling 1,179,216 and 1,245,299 were outstanding at June 30, 2023 and 2022, respectively, but excluded from the calculation of diluted earnings per common share because their inclusion would have been anti-dilutive.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

June 30, 2023

Note 3 Investment Securities

Investment securities include investment securities available for sale, marketable equity securities, and investment securities held to maturity. The investment securities portfolio consisted of the following at the dates indicated (in thousands):



	June 30, 2023
	Amortized Cost		Gross Unrealized				Carrying Value (1)
			Gains		Losses
Investment securities available for sale:
U.S. Treasury securities	$	119,454	$	—	$	(12,004)	$	107,450
U.S. Government agency and sponsored enterprise residential MBS	2,000,621		1,220		(48,385)		1,953,456
U.S. Government agency and sponsored enterprise commercial MBS	577,961		152		(69,832)		508,281

Private label residential MBS and CMOs	2,702,029		161		(318,209)		2,383,981
Private label commercial MBS	2,380,013		364		(98,661)		2,281,716
Single family real estate-backed securities	462,100		—		(23,537)		438,563
Collateralized loan obligations	1,099,890		381		(19,244)		1,081,027
Non-mortgage asset-backed securities	95,512		—		(3,679)		91,833
State and municipal obligations	108,383		201		(4,971)		103,613
SBA securities	120,836		243		(3,559)		117,520

	9,666,799		$	2,722	$	(602,081)	9,067,440
Investment securities held to maturity	10,000						10,000
	$	9,676,799					9,077,440
Marketable equity securities							66,497
							$	9,143,937

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	December 31, 2022
	Amortized Cost		Gross Unrealized				Carrying Value (1)
			Gains		Losses
Investment securities available for sale:
U.S. Treasury securities	$	148,956	$	63	$	(13,178)	$	135,841
U.S. Government agency and sponsored enterprise residential MBS	2,036,693		1,334		(54,859)		1,983,168
U.S. Government agency and sponsored enterprise commercial MBS	600,517		—		(75,423)		525,094

Private label residential MBS and CMOs	2,864,589		54		(333,980)		2,530,663
Private label commercial MBS	2,645,168		176		(120,990)		2,524,354
Single family real estate-backed securities	502,194		—		(31,753)		470,441
Collateralized loan obligations	1,166,838		151		(30,526)		1,136,463
Non-mortgage asset-backed securities	102,194		—		(6,218)		95,976
State and municipal obligations	122,181		695		(6,215)		116,661
SBA securities	139,320		381		(3,919)		135,782
	10,328,650		$	2,854	$	(677,061)	9,654,443
Investment securities held to maturity	10,000						10,000
	$	10,338,650					9,664,443
Marketable equity securities							90,884
							$	9,755,327

(1)At fair value except for securities held to maturity.

Investment securities held to maturity at June 30, 2023 and December 31, 2022 consisted of one State of Israel bond maturing in 2024. Accrued interest receivable on investments totaled $35 million and $34 million at June 30, 2023 and December 31, 2022, respectively, and is included in other assets in the accompanying consolidated balance sheets.

At June 30, 2023, contractual maturities of investment securities available for sale, adjusted for anticipated prepayments when applicable, were as follows (in thousands):


	Amortized Cost		Fair Value
Due in one year or less	$	1,324,481	$	1,266,669
Due after one year through five years	5,284,285		5,070,598
Due after five years through ten years	1,753,937		1,583,726
Due after ten years	1,304,096		1,146,447
	$	9,666,799	$	9,067,440

The carrying value of securities pledged as collateral for FHLB advances, public deposits, interest rate swaps and to secure borrowing capacity at the FRB totaled $8.2 billion and $4.1 billion at June 30, 2023 and December 31, 2022, respectively.

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The following table provides information about gains and losses on investment securities for the periods indicated (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Gross realized gains on investment securities AFS	$	847	$	956	$	1,619	$	3,706
Gross realized losses on investment securities AFS	—		(51)		(20)		(128)
Net realized gain	847		905		1,599		3,578






Net gains (losses) on marketable equity securities recognized in earnings	146		(9,297)		(13,155)		(19,838)





Gain (loss) on investment securities, net	$	993	$	(8,392)	$	(11,556)	$	(16,260)

The following tables present the aggregate fair value and the aggregate amount by which amortized cost exceeded fair value for investment securities available for sale in unrealized loss positions aggregated by investment category and length of time that individual securities had been in continuous unrealized loss positions at the dates indicated (in thousands):


	June 30, 2023

	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities	$	9,846	$	(108)	$	97,604	$	(11,896)	$	107,450	$	(12,004)
U.S. Government agency and sponsored enterprise residential MBS	346,927		(3,517)		1,483,255		(44,868)		1,830,182		(48,385)
U.S. Government agency and sponsored enterprise commercial MBS	14,200		(814)		480,484		(69,018)		494,684		(69,832)

Private label residential MBS and CMOs	72,768		(1,896)		2,297,353		(316,313)		2,370,121		(318,209)
Private label commercial MBS	143,153		(2,166)		2,030,605		(96,495)		2,173,758		(98,661)
Single family real estate-backed securities	37,556		(212)		401,007		(23,325)		438,563		(23,537)
Collateralized loan obligations	191,253		(1,247)		838,162		(17,997)		1,029,415		(19,244)
Non-mortgage asset-backed securities	7,678		(38)		84,155		(3,641)		91,833		(3,679)
State and municipal obligations	39,803		(492)		27,011		(4,479)		66,814		(4,971)
SBA securities	29,095		(354)		73,598		(3,205)		102,693		(3,559)

	$	892,279	$	(10,844)	$	7,813,234	$	(591,237)	$	8,705,513	$	(602,081)

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BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

June 30, 2023