BankUnited, Inc.BKU
BankUnited, Inc. Income Taxes Disclosure
The components of the provision for income taxes were as follows for the periods indicated (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 71,034 | $ | 97,577 | $ | 82,789 | |||||||||||
| State | 27,718 | 30,232 | 22,456 | ||||||||||||||
| 98,752 | 127,809 | 105,245 | |||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | (4,500) | (35,265) | (38,303) | ||||||||||||||
| State | (859) | (8,662) | (8,529) | ||||||||||||||
| (5,359) | (43,927) | (46,832) | |||||||||||||||
Provision for income taxes | $ | 93,393 | $ | 83,882 | $ | 58,413 | |||||||||||
A reconciliation of expected income tax expense at the statutory federal income tax rate of 21% to the Company's effective income tax rate for the periods indicated follows (dollars in thousands):
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
Tax expense calculated at the statutory federal income tax rate | $ | 75,967 | 21.00 | % | $ | 66,433 | 21.00 | % | $ | 49,788 | 21.00 | % | |||||||||||||||||||||||
| Increases (decreases) resulting from: | |||||||||||||||||||||||||||||||||||
State income taxes, net of federal tax benefit(1) | 17,368 | 4.80 | % | 12,271 | 3.88 | % | 9,389 | 3.96 | % | ||||||||||||||||||||||||||
Nontaxable or nondeductible items: | |||||||||||||||||||||||||||||||||||
Tax exempt interest income | (10,804) | (2.99) | % | (12,072) | (3.82) | % | (12,845) | (5.42) | % | ||||||||||||||||||||||||||
| FDIC premiums non-deductible | 3,573 | 0.99 | % | 3,970 | 1.26 | % | 4,246 | 1.79 | % | ||||||||||||||||||||||||||
Other | 1,466 | 0.41 | % | 2,259 | 0.71 | % | 1,005 | 0.42 | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | 10,984 | 3.04 | % | 13,719 | 4.34 | % | 11,185 | 4.72 | % | ||||||||||||||||||||||||||
Tax credits, net of amortization | (3,258) | (0.90) | % | (3,053) | (0.97) | % | (2,192) | (0.92) | % | ||||||||||||||||||||||||||
Other, net | (1,903) | (0.53) | % | 355 | 0.12 | % | (2,163) | (0.91) | % | ||||||||||||||||||||||||||
| $ | 93,393 | 25.82 | % | $ | 83,882 | 26.52 | % | $ | 58,413 | 24.64 | % | ||||||||||||||||||||||||
(1)State taxes in New York and Florida made up the majority of the tax effect in this category.
The components of deferred tax assets and liabilities were as follows at the dates indicated (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
Net unrealized loss on investment securities AFS and cash flow hedges | $ | 66,614 | $ | 99,974 | |||||||
| Allowance for credit losses | 59,336 | 59,291 | |||||||||
| Accrued expenses | 18,785 | 22,267 | |||||||||
| Lease liability | 17,020 | 18,301 | |||||||||
| Deferred compensation | 13,581 | 12,225 | |||||||||
| Other | 44,954 | 44,918 | |||||||||
| Gross deferred tax assets | 220,290 | 256,976 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Lease financing, due to differences in depreciation | 47,700 | 56,818 | |||||||||
| ROU asset | 36,103 | 34,752 | |||||||||
| Other | 3,869 | 4,788 | |||||||||
| Gross deferred tax liabilities | 87,672 | 96,358 | |||||||||
Net deferred tax asset | $ | 132,618 | $ | 160,618 | |||||||
Based on the evaluation of available evidence, the Company has concluded that it is more likely than not that the existing deferred tax assets will be realized. The primary factors supporting this conclusion are the Company's history of reported pre-tax income and the amount of future taxable income that will result from the scheduled reversal of existing deferred tax liabilities.
At December 31, 2025, remaining net operating loss and tax credit carryforwards included Florida net operating loss carryforwards in the amount of $92.9 million. Florida net operating loss carryforwards consisted of $65.3 million expiring from 2030 through 2037 and $27.5 million that can be carried forward indefinitely.
The Company has investments in affordable housing limited partnerships which generate federal LIHTC and other tax benefits. The balance of these investments, included in in the accompanying consolidated balance sheet, was $106 million and $120 million at December 31, 2025 and 2024, respectively. Unfunded commitments for affordable housing investments, included in other liabilities in the accompanying consolidated balance sheets, were $38 million and $73 million at December 31, 2025 and 2024, respectively. The maximum exposure to loss as a result of the Company's involvement with these limited partnerships at December 31, 2025, was approximately $184 million. While the Company believes the likelihood of potential losses from these investments is remote, the maximum exposure was determined by assuming a scenario where the projects completely fail and do not meet certain government compliance requirements resulting in recapture of the related tax credits and full impairment of the remaining unamortized investment. These investments did not have a material impact on income tax expense for the years ended December 31, 2025, 2024 and 2023.
The Company has a liability for unrecognized tax benefits relating to uncertain federal and state tax positions in several jurisdictions. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits at the dates indicated follows (in thousands):
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| Balance, beginning of period | $ | 401,129 | $ | 383,895 | $ | 369,880 | |||||||||||
| Additions for tax positions related to the current year | 3,080 | 3,023 | 2,802 | ||||||||||||||
| Additions for tax positions related to prior periods | 94 | 1,132 | 708 | ||||||||||||||
| Reductions due to settlements with taxing authorities | (4) | (485) | (347) | ||||||||||||||
| Reductions due to lapse of the statute of limitations | (1,291) | (1,314) | (1,617) | ||||||||||||||
| 403,008 | 386,251 | 371,426 | |||||||||||||||
| Interest and penalties | 11,895 | 14,878 | 12,469 | ||||||||||||||
| Balance, end of period | $ | 414,903 | $ | 401,129 | $ | 383,895 | |||||||||||
As of December 31, 2025, 2024 and 2023, the Company had $347.1 million, $345.6 million and $343.8 million, respectively, of unrecognized federal and state tax benefits, net of federal tax benefits, that if recognized would have impacted the effective tax rate.
Interest and penalties related to unrecognized tax benefits are included in the provision for income taxes in the consolidated statements of income. At December 31, 2025 and 2024, accrued interest and penalties included in the consolidated balance sheets, net of federal tax benefits, were $47.8 million and $38.3 million, respectively. The total amount of interest and penalties, net of federal tax benefits, recognized through income tax expense was $9.5 million, $11.9 million and $10.0 million during the years ended December 31, 2025, 2024 and 2023, respectively.
The Company and its subsidiaries file a consolidated federal income tax return as well as combined state income tax returns where combined filings are required. The federal tax returns for years 2018 through 2024 remain subject to examination in the U.S. Federal jurisdiction. State tax returns for years 2021 through 2024, remain subject to examination by certain states.
The income tax paid (net of refunds received) were as follows for the periods indicated (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Federal (1) | $ | 133,000 | $ | 82,000 | $ | 45,873 | |||||||||||
| State | 14,755 | 19,773 | 2,909 | ||||||||||||||
| $ | 147,755 | $ | 101,773 | $ | 48,782 | ||||||||||||
(1)Includes $85.0 million of a tax deposit payment made during the year ended December 31, 2025.
During the year ended December 31, 2024, income taxes paid (net of refunds) to jurisdictions that exceeded five percent of total income taxes paid was $ and $ in New York State and New York City, respectively. During the years ended December 31, 2025 and 2023, there were no jurisdiction that exceeded five percent of total income tax paid (net of refunds).
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 26, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.