

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



14817 Oak Lane	Miami Lakes FL	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, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer” and~~filer,” “smaller reporting ~~company”~~company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filerý

☒

Accelerated filer

☐

~~Accelerated filer~~ o

Emerging growth company

☐

Non-accelerated filero

☐

Smaller reporting companyo

☐

~~Emerging growth company~~ o

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 o☐ No ý☒

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 August 2, 2021 was 92,820,882.

BANKUNITED, INC.

Form 10-Q

For the Quarter Ended June 30, 2021

TABLE OF CONTENTS


			Page

~~Class~~		Glossary of Defined Terms	~~November 6, 2017~~
~~Common Stock, $0.01 Par Value~~	~~106,820,503~~

~~BANKUNITED, INC.~~

~~Form 10-Q~~

~~For the Quarter Ended September 30, 2017~~

~~TABLE OF CONTENTS~~

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.



ACI		Loans acquired with evidence of deterioration in credit quality since origination (Acquired Credit Impaired)
~~ALCO~~ACL		Allowance for credit losses
AFS		Available for sale
ALCO		Asset/Liability Committee
~~ALLL~~		~~Allowance for loan and lease losses~~
AOCI		Accumulated other comprehensive income
~~ARM~~APY		Annual Percentage Yield
ARM		Adjustable rate mortgage
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
~~BKU~~		~~BankUnited, Inc.~~
~~BankUnited~~	~~BankUnited, National Association~~
~~The Bank~~	~~BankUnited, National Association~~
~~Bridge~~	~~Bridge Funding Group, Inc.~~
~~CET1~~	~~Common Equity Tier 1 capital~~
~~CECL~~	~~Current expected credit losses~~
~~CME~~	~~Chicago Mercantile Exchange~~
~~CMOs~~	~~Collateralized mortgage obligations~~
~~Commercial Shared-Loss Agreement~~	~~A commercial and other loans shared-loss agreement entered into with the FDIC in connection with the FSB Acquisition~~
~~Covered assets~~	~~Assets covered under the Loss Sharing Agreements~~
~~Covered loans~~	~~Loans covered under the Loss Sharing Agreements~~
~~EPS~~	~~Earnings per common share~~
~~EVE~~	~~Economic value of equity~~
~~FASB~~	~~Financial Accounting Standards Board~~
~~FDIA~~	~~Federal Deposit Insurance Act~~
~~FDIC~~	~~Federal Deposit Insurance Corporation~~
~~FEMA~~	~~Federal Emergency Management Agency~~
~~FHLB~~	~~Federal Home Loan Bank~~
~~FICO~~	~~Fair Isaac Corporation (credit score)~~
~~FRB~~	~~Federal Reserve Bank~~
~~FSB Acquisition~~	~~Acquisition of substantially all of the assets and assumption of all of the non-brokered deposits and substantially all of the other liabilities of BankUnited, FSB from the FDIC on May 21, 2009~~
~~GAAP~~	~~U.S. generally accepted accounting principles~~
~~GDP~~	~~Gross Domestic Product~~
~~HAMP~~	~~Home Affordable Modification Program~~
~~IPO~~	~~Initial public offering~~
~~ISDA~~	~~International Swaps and Derivatives Association~~
~~LIBOR~~	~~London InterBank Offered Rate~~
~~LIHTC~~	~~Low Income Housing Tax Credits~~
~~Loss Sharing Agreements~~	~~Two loss sharing agreements entered into with the FDIC in connection with the FSB Acquisition~~
~~LTV~~	~~Loan-to-value~~
~~MBS~~	~~Mortgage-backed securities~~
~~MSA~~	~~Metropolitan Statistical Area~~



~~MSRs~~						~~Mortgage servicing rights~~
~~New Loans~~						~~Loans originated or purchased since the FSB Acquisition~~
~~Non-ACI~~						~~Loans acquired without evidence of deterioration in credit quality since origination~~
~~NSF~~BKU						~~Non-sufficient funds~~BankUnited, Inc.
~~NYTLC~~BankUnited						~~New York City Taxi and Limousine Commission~~BankUnited, National Association
~~OCC~~The Bank						~~Office of the Comptroller of the Currency~~BankUnited, National Association
~~OREO~~Bridge						Bridge Funding Group, Inc.
Buyout loans						FHA and VA insured mortgages from third party servicers who have exercised their right to purchase these loans out of GNMA securitizations
CARES Act						Coronavirus Aid, Relief, and Economic Security Act


CECL						Current expected credit losses
CET1						Common Equity Tier 1 capital

C&I						Commercial and Industrial
CLO						Collateralized loan obligations
CMBS						Commercial mortgage-backed securities
CME						Chicago Mercantile Exchange
CMOs						Collateralized mortgage obligations



COVID-19						Coronavirus disease of 2019


CRE						Commercial real estate

DFAST						Dodd-Frank Act Stress Test

DSCR						Debt Service Coverage Ratio
EPS						Earnings per common share
EVE						Economic value of equity

FASB						Financial Accounting Standards Board

FDIA						Federal Deposit Insurance Act


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
GLB Act						The Gramm-Leach-Bliley Financial Modernization Act of 1999
GNMA						Government National Mortgage Association

HPI						Home price indices
HTM						Held to maturity
IPO						Initial public offering

ISDA						International Swaps and Derivatives Association


LGD						Loss Given Default
LIBOR						London InterBank Offered Rate


LTV						Loan-to-value
MBS						Mortgage-backed securities
MSA						Metropolitan Statistical Area
MSLF						Federal Reserve Main Street Lending Facility

MWL						Mortgage warehouse lending

Non-OOCRE						Non-owner occupied commercial real estate
NRSRO						Nationally recognized statistical rating organization




OCI						Other comprehensive income

OOCRE						Owner occupied commercial real estate
OREO						Other real estate owned
~~OTTI~~						~~Other-than-temporary impairment~~
~~PSU~~PCD						~~Performance Share Unit~~Purchased credit-deteriorated
~~Pinnacle~~PD						Probability of default
Pinnacle						Pinnacle Public Finance, Inc.
~~RSU~~PPNR						Pre-tax, pre-provision net revenue
PPP						Small Business Administration’s Paycheck Protection Program
PPPLF						FRB Paycheck Protection Program Liquidity Facility

PSU						Performance Share Unit

REIT						Real Estate Investment Trust


RSU						Restricted Share Unit
~~SBA~~
SBA						U.S. Small Business Administration
~~SBF~~						~~Small Business Finance Unit~~
SEC						Securities and Exchange Commission
~~Single Family Shared-Loss Agreement~~						~~A single-family loan shared-loss agreement entered into with the FDIC in connection with the FSB Acquisition~~
~~TDR~~						~~Troubled-debt restructuring~~
~~UPB~~
S&P 500						Standard & Poor's 500 Index

TDR						Troubled-debt restructuring
Tri-State						New York, New Jersey and Connecticut
UPB						Unpaid principal balance
~~2014 Plan~~						~~2014 Omnibus Equity Incentive Plan~~
VA loan						Loan guaranteed by the U.S. Department of Veterans Affairs

VIX						CBOE Volatility Index
WARM						Weighted-average remaining maturity

iii

~~Table of Contents~~

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements and Supplementary Data

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands, except share and per share data)

September 30,
2017 December 31,
2016
ASSETS

Cash and due from banks:

Non-interest bearing $ 34,883
$ 40,260
Interest bearing 3,714
35,413
Interest bearing deposits at Federal Reserve Bank 254,004
372,640
Cash and cash equivalents 292,601
448,313
Investment securities available for sale, at fair value 6,893,472
6,073,584
Investment securities held to maturity 10,000
10,000
Non-marketable equity securities 270,239
284,272
Loans held for sale 31,507
41,198
Loans (including covered loans of $537,976 and $614,042) 20,610,430
19,395,394
Allowance for loan and lease losses (158,573 ) (152,953 )
Loans, net 20,451,857
19,242,441
FDIC indemnification asset 349,617
515,933
Bank owned life insurance 248,876
239,736
Equipment under operating lease, net 588,207
539,914
Deferred tax asset, net 23,910
62,940
Goodwill and other intangible assets 77,857
78,047
Other assets 316,688
343,773
Total assets $ 29,554,831
$ 27,880,151

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Demand deposits:

Non-interest bearing $ 3,096,492
$ 2,960,591
Interest bearing 1,828,809
1,523,064
Savings and money market 9,964,242
9,251,593
Time 6,333,701
5,755,642
Total deposits 21,223,244
19,490,890
Federal Home Loan Bank advances 4,871,000
5,239,348
Notes and other borrowings 402,828
402,809
Other liabilities 434,270
328,675
Total liabilities 26,931,342
25,461,722

Commitments and contingencies

Stockholders' equity:

Common stock, par value $0.01 per share, 400,000,000 shares authorized; 106,821,902 and 104,166,945 shares issued and outstanding 1,068
1,042
Paid-in capital 1,492,790
1,426,459
Retained earnings 1,077,042
949,681
Accumulated other comprehensive income 52,589
41,247
Total stockholders' equity 2,623,489
2,418,429
Total liabilities and stockholders' equity $ 29,554,831
$ 27,880,151


	June 30, 2021		December 31, 2020
ASSETS
Cash and due from banks:
Non-interest bearing	$	17,902	$	20,233
Interest bearing	877,446		377,483
Cash and cash equivalents	895,348		397,716
Investment securities (including securities recorded at fair value of $10,222,035 and $9,166,683)	10,232,035		9,176,683
Non-marketable equity securities	164,959		195,865
Loans held for sale	0		24,676
Loans	22,885,074		23,866,042
Allowance for credit losses	(175,642)		(257,323)
Loans, net	22,709,432		23,608,719
Bank owned life insurance	303,519		294,629
Operating lease equipment, net	667,935		663,517

Goodwill	77,637		77,637
Other assets	649,422		571,051
Total assets	$	35,700,287	$	35,010,493

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Non-interest bearing	$	8,834,228	$	7,008,838
Interest bearing	3,218,441		3,020,039
Savings and money market	13,578,526		12,659,740
Time	2,978,074		4,807,199
Total deposits	28,609,269		27,495,816
Federal funds purchased	0		180,000
FHLB advances	2,681,505		3,122,999
Notes and other borrowings	721,639		722,495
Other liabilities	526,331		506,171
Total liabilities	32,538,744		32,027,481

Commitments and contingencies	0		0

Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 93,238,553 and 93,067,500 shares issued and outstanding	932		931
Paid-in capital	1,011,786		1,017,518
Retained earnings	2,173,698		2,013,715
Accumulated other comprehensive loss	(24,873)		(49,152)
Total stockholders' equity	3,161,543		2,983,012
Total liabilities and stockholders' equity	$	35,700,287	$	35,010,493

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,
	2021		2020		2021		2020
Interest income:
Loans	$	202,520	$	213,938	$	407,855	$	448,297
Investment securities	37,674		50,932		76,175		106,992
Other	1,607		2,908		3,200		6,628
Total interest income	241,801		267,778		487,230		561,917
Interest expense:
Deposits	17,316		50,187		39,692		133,009
Borrowings	26,174		27,254		52,987		57,995
Total interest expense	43,490		77,441		92,679		191,004
Net interest income before provision for credit losses	198,311		190,337		394,551		370,913
Provision for (recovery of) credit losses	(27,534)		25,414		(55,523)		150,842
Net interest income after provision for credit losses	225,845		164,923		450,074		220,071
Non-interest income:
Deposit service charges and fees	5,417		3,701		10,317		7,887
Gain on sale of loans, net	2,234		4,326		3,988		7,792
Gain on investment securities, net	4,155		6,836		6,520		3,383
Lease financing	13,522		16,150		26,010		31,631
Other non-interest income	7,429		7,338		16,218		10,956
Total non-interest income	32,757		38,351		63,053		61,649
Non-interest expense:
Employee compensation and benefits	56,459		48,877		115,747		107,764
Occupancy and equipment	11,492		11,901		23,367		24,270
Deposit insurance expense	4,222		4,806		11,672		9,209
Professional fees	2,139		3,131		4,051		6,335
Technology and telecommunications	16,851		14,025		32,592		26,621
Depreciation of operating lease equipment	12,834		12,219		25,051		24,822

Other non-interest expense	14,455		11,411		29,193		26,217
Total non-interest expense	118,452		106,370		241,673		225,238
Income before income taxes	140,150		96,904		271,454		56,482
Provision for income taxes	36,176		20,396		68,666		10,925
Net income	$	103,974	$	76,508	$	202,788	$	45,557
Earnings per common share, basic	$	1.12	$	0.80	$	2.18	$	0.47
Earnings per common share, diluted	$	1.11	$	0.80	$	2.17	$	0.47

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

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Interest income:

Loans $ 253,815
$ 227,233
$ 739,586
$ 662,439
Investment securities 51,851
39,712
141,624
109,963
Other 3,777
3,036
10,606
8,850
Total interest income 309,443
269,981
891,816
781,252
Interest expense:
Deposits 45,919
30,968
120,161
86,427
Borrowings 22,260
17,278
60,209
51,939
Total interest expense 68,179
48,246
180,370
138,366
Net interest income before provision for loan losses 241,264
221,735
711,446
642,886
Provision for (recovery of) loan losses (including $261, $(445), $2,693 and $(1,119) for covered loans) 37,854
24,408
63,573
42,449
Net interest income after provision for loan losses 203,410
197,327
647,873
600,437
Non-interest income:
Income from resolution of covered assets, net 6,400
8,883
22,066
26,426
Net gain (loss) on FDIC indemnification (4,838 ) 993
(14,174 ) (9,410 )
Service charges and fees 4,938
5,171
15,554
14,529
Gain (loss) on sale of loans, net (including $0, $(10,033), $(1,582) and $(14,895) related to covered loans) 2,447
(7,947 ) 6,601
(7,360 )
Gain on investment securities available for sale, net 26,931
3,008
29,194
10,065
Lease financing 13,287
11,188
40,067
32,762
Other non-interest income 4,161
3,779
12,055
10,118
Total non-interest income 53,326
25,075
111,363
77,130
Non-interest expense:
Employee compensation and benefits 58,327
55,162
178,386
166,374
Occupancy and equipment 18,829
18,867
56,689
57,199
Amortization of FDIC indemnification asset 45,225
38,957
135,351
116,711
Deposit insurance expense 5,764
4,943
16,827
12,866
Professional fees 2,748
3,884
12,573
10,119
Telecommunications and data processing 3,452
3,746
10,481
10,800
Depreciation of equipment under operating lease 8,905
6,855
25,655
20,004
Other non-interest expense 13,455
15,590
37,735
40,151
Total non-interest expense 156,705
148,004
473,697
434,224
Income before income taxes 100,031
74,398
285,539
243,343
Provision for income taxes 32,252
23,550
89,060
80,896
Net income $ 67,779
$ 50,848
$ 196,479
$ 162,447
Earnings per common share, basic (see Note 2) $ 0.62
$ 0.47
$ 1.79
$ 1.52
Earnings per common share, diluted (see Note 2) $ 0.62
$ 0.47
$ 1.79
$ 1.50
Cash dividends declared per common share $ 0.21
$ 0.21
$ 0.63
$ 0.63

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED

(In thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

Net income	$	103,974	$	76,508	$	202,788	$	45,557
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	13,926		188,405		(8,559)		(24,755)
Reclassification adjustment for net securities gains realized in income	(2,118)		(4,264)		(5,073)		(5,404)
Net change in unrealized gains (losses) on securities available for sale	11,808		184,141		(13,632)		(30,159)
Unrealized losses on derivative instruments:
Net unrealized holding gain (loss) arising during the period	(8,944)		(11,070)		15,667		(91,884)
Reclassification adjustment for net losses realized in income	11,088		7,502		22,244		10,851
Net change in unrealized losses on derivative instruments	2,144		(3,568)		37,911		(81,033)
Other comprehensive income (loss)	13,952		180,573		24,279		(111,192)
Comprehensive income (loss)	$	117,926	$	257,081	$	227,067	$	(65,635)

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

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016

Net income $ 67,779
$ 50,848
$ 196,479
$ 162,447
Other comprehensive income (loss), net of tax:

Unrealized gains on investment securities available for sale:

Net unrealized holding gain arising during the period 8,557
3,216
32,826
53,490
Reclassification adjustment for net securities gains realized in income (16,293 ) (1,820 ) (17,662 ) (6,090 )
Net change in unrealized gains on securities available for sale (7,736 ) 1,396
15,164
47,400
Unrealized losses on derivative instruments:

Net unrealized holding gain (loss) arising during the period (170 ) 5,055
(8,337 ) (34,948 )
Reclassification adjustment for net losses realized in income 1,210
2,264
4,515
7,896
Net change in unrealized losses on derivative instruments 1,040
7,319
(3,822 ) (27,052 )
Other comprehensive income (loss) (6,696 ) 8,715
11,342
20,348
Comprehensive income $ 61,083
$ 59,563
$ 207,821
$ 182,795

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(In thousands)


	Nine Months Ended September 30,							Six Months Ended June 30,
	2017			2016				2021		2020
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	196,479		$	162,447		Net income	$	202,788	$	45,557
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:							Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization and accretion, net	(71,111		)	(90,360		)	Amortization and accretion, net	(15,124)		(11,590)
Provision for loan losses	63,573			42,449
Income from resolution of covered assets, net	(22,066		)	(26,426		)
Net loss on FDIC indemnification	14,174			9,410
(Gain) loss on sale of loans, net	(6,601		)	7,360
Increase in cash surrender value of bank owned life insurance	(4,647		)	(2,973		)
Gain on investment securities available for sale, net	(29,194		)	(10,065		)
Provision for (recovery of) credit losses							Provision for (recovery of) credit losses	(55,523)		150,842

Gain on sale of loans, net							Gain on sale of loans, net	(3,988)		(7,792)

Gain on investment securities, net							Gain on investment securities, net	(6,520)		(3,383)
Equity based compensation	14,337			13,418			Equity based compensation	12,414		7,351
Depreciation and amortization	45,204			38,971			Depreciation and amortization	37,089		35,691
Deferred income taxes	31,625			33,958			Deferred income taxes	1,218		(769)

Proceeds from sale of loans held for sale	126,778			121,968			Proceeds from sale of loans held for sale	455,996		369,807
Loans originated for sale, net of repayments	(109,588		)	(108,075		)	Loans originated for sale, net of repayments	0		(17,681)
Other:							Other:
(Increase) decrease in other assets	15,743			(9,502		)
Increase (decrease) in other liabilities	(33,546		)	44,708
Increase in other assets							Increase in other assets	(132,384)		(23,101)
(Decrease) increase in other liabilities							(Decrease) increase in other liabilities	81,833		(224,093)
Net cash provided by operating activities	231,160			227,288			Net cash provided by operating activities	577,799		320,839

Cash flows from investing activities:							Cash flows from investing activities:
Purchase of investment securities available for sale	(2,355,872		)	(2,224,174		)
Proceeds from repayments and calls of investment securities available for sale	861,618			457,610
Proceeds from sale of investment securities available for sale	827,353			753,756

Purchase of investment securities							Purchase of investment securities	(3,145,279)		(2,263,847)
Proceeds from repayments and calls of investment securities							Proceeds from repayments and calls of investment securities	1,265,922		587,139
Proceeds from sale of investment securities							Proceeds from sale of investment securities	800,056		547,337
Purchase of non-marketable equity securities	(185,718		)	(178,813		)	Purchase of non-marketable equity securities	(1,200)		(128,562)
Proceeds from redemption of non-marketable equity securities	199,751			115,388			Proceeds from redemption of non-marketable equity securities	32,106		149,175
Purchases of loans	(949,294		)	(936,882		)	Purchases of loans	(2,271,081)		(1,085,437)
Loan originations, repayments and resolutions, net	(192,075		)	(1,389,435		)
Loan originations and repayments, net							Loan originations and repayments, net	2,638,153		68,012
Proceeds from sale of loans, net	98,404			120,537			Proceeds from sale of loans, net	183,263		11,604
Decrease in FDIC indemnification asset for claims filed	16,768			30,829
Acquisition of equipment under operating lease, net	(73,948		)	(52,399		)

Acquisition of operating lease equipment							Acquisition of operating lease equipment	(38,875)		(19,118)
Other investing activities	(31,718		)	(19,577		)	Other investing activities	(5,183)		(10,663)
Net cash used in investing activities	(1,784,731		)	(3,323,160		)	Net cash used in investing activities	(542,118)		(2,144,360)
				(Continued)

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

BANKUNITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS ~~- UNAUDITED~~ (Continued)

(In thousands)


	Nine Months Ended September 30,							Six Months Ended June 30,
	2017			2016				2021		2020
Cash flows from financing activities:							Cash flows from financing activities:
Net increase in deposits	1,732,354			1,897,808			Net increase in deposits	1,113,453		1,675,833
Additions to Federal Home Loan Bank advances	3,921,000			3,360,000
Repayments of Federal Home Loan Bank advances	(4,290,000		)	(2,150,000		)
Net decrease in federal funds purchased							Net decrease in federal funds purchased	(180,000)		0
Additions to FHLB and PPPLF borrowings							Additions to FHLB and PPPLF borrowings	1,106,000		3,762,336
Repayments of FHLB and PPPLF borrowings							Repayments of FHLB and PPPLF borrowings	(1,545,999)		(3,596,310)
Proceeds from issuance of notes, net							Proceeds from issuance of notes, net	0		293,858
Dividends paid	(68,583		)	(67,342		)	Dividends paid	(43,714)		(42,702)
Exercise of stock options	61,519			222

Repurchase of common stock							Repurchase of common stock	(7,263)		(100,972)
Other financing activities	41,569			49,638			Other financing activities	19,474		19,036
Net cash provided by financing activities	1,397,859			3,090,326			Net cash provided by financing activities	461,951		2,011,079
Net increase (decrease) in cash and cash equivalents	(155,712		)	(5,546		)
Net increase in cash and cash equivalents							Net increase in cash and cash equivalents	497,632		187,558
Cash and cash equivalents, beginning of period	448,313			267,500			Cash and cash equivalents, beginning of period	397,716		214,673
Cash and cash equivalents, end of period	$	292,601		$	261,954		Cash and cash equivalents, end of period	$	895,348	$	402,231

Supplemental disclosure of cash flow information:							Supplemental disclosure of cash flow information:
Interest paid	$	169,759		$	132,398		Interest paid	$	94,782	$	209,233
Income taxes paid, net	$	46,320		$	8,168		Income taxes paid, net	$	236,491	$	4,883

Supplemental schedule of non-cash investing and financing activities:							Supplemental schedule of non-cash investing and financing activities:
Transfers from loans to other real estate owned and other repossessed assets	$	6,738		$	11,679
Unsettled sale of loans							Unsettled sale of loans	$	0	$	11,058

Transfers from loans to loans held for sale							Transfers from loans to loans held for sale	$	611,568	$	329,308

Dividends declared, not paid	$	23,045		$	22,482		Dividends declared, not paid	$	21,400	$	21,909
Unsettled purchases of investment securities available for sale	$	107,500		$	—
Unsettled investment securities trades, net							Unsettled investment securities trades, net	$	0	$	174,788

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
Income

Total
Stockholders’
Equity
Balance at December 31, 2016 104,166,945
$ 1,042
$ 1,426,459
$ 949,681
$ 41,247
$ 2,418,429
Comprehensive income —
—
—
196,479
11,342
207,821
Dividends —
—
—
(69,118 ) —
(69,118 )
Equity based compensation 618,306
6
12,103
—
—
12,109
Forfeiture of unvested shares and shares surrendered for tax withholding obligations (267,457 ) (3 ) (7,268 ) —
—
(7,271 )
Exercise of stock options 2,304,108
23
61,496
—
—
61,519
Balance at September 30, 2017 106,821,902
$ 1,068
$ 1,492,790
$ 1,077,042
$ 52,589
$ 2,623,489

Balance at December 31, 2015 103,626,255
$ 1,036
$ 1,406,786
$ 813,894
$ 22,182
$ 2,243,898
Comprehensive income —
—
—
162,447
20,348
182,795
Dividends —
—
—
(67,444 ) —
(67,444 )
Equity based compensation 644,888
6
13,250
—
—
13,256
Forfeiture of unvested shares and shares surrendered for tax withholding obligations (139,718 ) (1 ) (483 ) —
—
(484 )
Exercise of stock options 10,000
—
222
—
—
222
Tax benefits from dividend equivalents and equity based compensation —
—
847
—
—
847
Balance at September 30, 2016 104,141,425
$ 1,041
$ 1,420,622
$ 908,897
$ 42,530
$ 2,373,090


	Common Shares Outstanding	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance at March 31, 2021	93,263,632	$	933	$	1,008,603	$	2,091,124	$	(38,825)	$	3,061,835
Comprehensive income	—	—		—		103,974		13,952		117,926
Dividends ($0.23 per common share)	—	—		—		(21,400)		—		(21,400)
Equity based compensation	19,469	0		3,211		—		—		3,211
Forfeiture of unvested shares and shares surrendered for tax withholding obligations	(44,548)	(1)		(28)		—		—		(29)


Balance at June 30, 2021	93,238,553	$	932	$	1,011,786	$	2,173,698	$	(24,873)	$	3,161,543

Balance at March 31, 2020	92,406,294	$	924	$	987,757	$	1,851,040	$	(323,592)	$	2,516,129
Comprehensive income	—	—		—		76,508		180,573		257,081
Dividends ($0.23 per common share)	—	—		—		(21,909)		—		(21,909)
Equity based compensation	56,688	1		3,762		—		—		3,763
Forfeiture of unvested shares and shares surrendered for tax withholding obligations	(42,704)	(1)		(10)		—		—		(11)


Balance at June 30, 2020	92,420,278	$	924	$	991,509	$	1,905,639	$	(143,019)	$	2,755,053


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
















Balance at December 31, 2020	93,067,500	$	931	$	1,017,518	$	2,013,715	$	(49,152)	$	2,983,012
Comprehensive income	—	—		—		202,788		24,279		227,067
Dividends ($0.46 per common share)	—	—		—		(42,805)		—		(42,805)
Equity based compensation	559,180	5		7,218		—		—		7,223
Forfeiture of unvested shares and shares surrendered for tax withholding obligations	(184,632)	(2)		(5,714)		—		—		(5,716)
Exercise of stock options	1,569	—		25		—		—		25
Repurchase of common stock	(205,064)	(2)		(7,261)		—		—		(7,263)
Balance at June 30, 2021	93,238,553	$	932	$	1,011,786	$	2,173,698	$	(24,873)	$	3,161,543

Balance at December 31, 2019	95,128,231	$	951	$	1,083,920	$	1,927,735	$	(31,827)	$	2,980,779
Impact of adoption of ASU 2016-13	—	—		—		(23,817)		—		(23,817)
Balance at January 1, 2020	95,128,231	951		1,083,920		1,903,918		(31,827)		2,956,962
Comprehensive loss	—	—		—		45,557		(111,192)		(65,635)
Dividends ($0.46 per common share)	—	—		—		(43,836)		—		(43,836)
Equity based compensation	743,696	8		11,428		—		—		11,436
Forfeiture of unvested shares and shares surrendered for tax withholding obligations	(186,072)	(3)		(4,428)		—		—		(4,431)
Exercise of stock options	60,000	1		1,528		—		—		1,529
Repurchase of common stock	(3,325,577)	(33)		(100,939)		—		—		(100,972)
Balance at June 30, 2020	92,420,278	$	924	$	991,509	$	1,905,639	$	(143,019)	$	2,755,053

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

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

~~September~~June 30, ~~2017~~2021

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 9065 banking centers located in 1513 Florida counties and 64 banking centers located in the New York metropolitan area at ~~September~~June 30, ~~2017.~~2021. The Bank also offers certain commercial lending and deposit products through national platforms.

In connection with the FSB Acquisition, BankUnited entered into two loss sharing agreements with the FDIC. The Loss Sharing Agreements consist of the Single Family Shared-Loss Agreement and the Commercial Shared-Loss Agreement. Assets covered by the Loss Sharing Agreements are referred to as covered assets or, in certain cases, covered loans. The Single Family Shared-Loss Agreement provides for FDIC loss sharing and the Bank’s reimbursement for recoveries to the FDIC through May 21, 2019 for single family residential loans and OREO. Loss sharing under the Commercial Shared-Loss Agreement terminated on May 21, 2014. The Commercial Shared-Loss Agreement continued to provide for the Bank’s reimbursement of recoveries to the FDIC through June 30, 2017 for all other covered assets, including commercial real estate, commercial and industrial and consumer loans, certain investment securities and commercial OREO. Pursuant to the terms of the Loss Sharing Agreements, the covered assets are subject to a stated loss threshold whereby the FDIC will reimburse BankUnited for 80% of losses related to the covered assets up to $4.0 billion and 95% of losses in excess of this amount, beginning with the first dollar of loss incurred.

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, ~~they~~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, ~~2016~~2020 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 ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 are not necessarily indicative of the results that may be expected in future periods.

~~Certain amounts presented for prior periods have been reclassified to conform to the current period presentation.~~

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.

~~Significant estimates include~~The most significant estimate impacting the ~~ALLL,~~Company's consolidated financial statements is the amount and timing of expected cash flows from covered assets and the FDIC indemnification asset, and the fair values of investment securities and other financial instruments. Management has used information provided by third party valuation specialists to assist in the determination of the fair values of investment securities.ACL.

New Accounting Pronouncements Adopted During the Six Months Ended June 30, 2021

ASU No. ~~2016-09,~~ ~~Compensation - Stock Compensation~~2019-12, Income Taxes (Topic ~~718)~~740): ~~Improvements~~Simplifying the Accounting for Income Taxes. This ASU simplifies the accounting for income taxes by removing certain exceptions stipulated in ASC 740 and making some other targeted changes to ~~Employee Share-Based Payment Accounting~~the accounting for income taxes. The Company adopted this ASU on January 1, 2021 with no material impact on the Company’s consolidated financial position, results of operations, and cash flows.

ASU No. 2021-01, Reference Rate Reform (Topic 848). This ASU clarifies that certain optional expedients and exceptions provided for in ASU No. 2020-04 for applying GAAP to contract modifications and hedging relationships apply to derivatives that are affected by the discounting transition. The amendments in this ASU ~~simplified several aspects~~are elective and apply to all entities that have derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of the accounting for share-based payment transactions. The Company adopted this ASU in the first quarter of 2017. The amendment requiring the recognition of excess tax benefits and deficiencies as income tax benefit or expense in the income statement as opposed to being recognized as additional paid-in-capital was applied prospectively and resulted in the recognition of $0.3 million and $3.2 million in excess tax benefits in the consolidated statement of income line item "Provision for income taxes" for the three and nine months ended September 30, 2017, increasing net income by the same amount in each period. The adoption had no impact on basic and diluted earnings per share for the three months ended September 30, 2017 and increased basic and diluted earnings per share by $0.02 and $0.03, respectively, for the nine months ended September 30, 2017. The Company retrospectively adopted the amendments requiring the classification of excess tax benefits and deficiencies with other income tax cash flows as operating activities and cash paid when directly withholding shares as financing activities in the accompanying consolidated statements of cash flows; the impact was not material.reference rate reform. The Company elected to ~~continue its practice of estimating the number of awards expected to vest in determining the amount of compensation cost to be recognized related to share based payment transactions.~~

~~Table of Contents~~

~~BANKUNITED, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~September 30, 2017~~

~~ASU No. 2017-08,~~ ~~Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.~~ ~~The amendments in~~adopt this ASU ~~require certain premiums~~ on ~~callable debt securities to be amortized to the earliest call date.~~a retrospective basis. The ~~amortization period for callable debt securities purchased as a discount will not be impacted. The Company early-adopted~~impact of adoption of this ASU ~~in the first quarter of 2017 with no material impact~~ on the Company's consolidated financial position, results of operations, orand cash ~~flows.~~flows was not material.

Accounting Pronouncements Not Yet Adopted

ASU No. ~~2016-06,~~ 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging ~~(Topic 815):Contingent Put~~- Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU simplifies the accounting for convertible debt and ~~Call Options~~convertible preferred stock by reducing the number of accounting models for these instruments, resulting in ~~Debt Instruments.~~ fewer embedded conversion features being separately recognized from the host contract. Additionally, this ASU revises the criteria for determining whether contracts in an entity's own equity meet the scope exception from derivative accounting, which will change the population of contracts that are recognized as assets or liabilities. The amendments in this ASU clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. A company performing the assessment under these amendments is required to assess the embedded call (put) options solely in accordance with a four-step decision sequence, without also considering whether the contingency is related to interest rates or credit risks. The Company adopted this ASU in the first quarter of 2017 with no impact on its consolidated financial position, results of operations or cash flows.

~~ASU No. 2017-04,~~ ~~Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,~~ an amendment to simplify the subsequent quantitative measurement of goodwill by eliminating step two from the goodwill impairment test. As amended, an entity recognizes an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. An entity still has the option to perform the qualitative test for a reporting unit to determine if the quantitative impairment test is necessary. The Company early adopted this ASU in the third quarter of 2017, concurrent with performance of its annual goodwill impairment test, ~~with no impact on its consolidated financial position, results of operations or cash flows~~.

~~ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815)~~: Targeted Improvements to Accounting for Hedging Activities. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness after initial qualification. For qualifying cash flow and net investment hedges, this means that the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness will be recorded in other comprehensive income (OCI), and amounts deferred in OCI will be reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings. The Company will have until the end of the first quarter in which a hedge is designated to perform an initial assessment of a hedge’s effectiveness. The new guidance also permits a qualitative effectiveness assessment for certain hedges instead of a quantitative test, such as a regression analysis, if the company can reasonably support an expectation of high effectiveness throughout the term of the hedge. In addition, in order to better align an entity's risk management activities and financial reporting for hedging relationships, the ASU allows for more hedging strategies to be eligible for hedge accounting. From a disclosure standpoint, to help users of the financial statements better understand the effects of hedge accounting, the guidance requires revised tabular disclosures that focus on the effect of hedge accounting by income statement line, and eliminates today’s requirement to disclose hedge ineffectiveness because this amount is no longer separately measured. The Company early adopted this ASU during the quarter ended September 30, 2017 with no material impact on the Company's consolidated financial position, results of operations or cash flows.

~~Recent Accounting Pronouncements~~

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606),~~ ~~which will supersede the revenue recognition requirements in Topic 605,~~ ~~Revenue Recognition~~, and most industry-specific revenue recognition guidance throughout the Accounting Standards Codification. The amendments in this update affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets unless those contracts, including leases and insurance contracts, are within the scope of other standards. The amendments establish a core principle requiring the recognition of revenue to depict the transfer of goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. The amendments also require expanded disclosures concerning the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. Financial instruments and lease contracts are generally outside the scope of the ASU as are revenues that are in the scope of ASC 860 "Transfers and Servicing", ASC 460 "Guarantees" and ASC 815 "Derivatives and Hedging". The FASB has issued subsequent ASUs to clarifyrevise certain aspects of ~~ASU 2014-09, without changing the core principle of~~ the guidance on calculating earnings per share with respect to convertible instruments and to defer the effective date of ASU 2014-09 to annual periods and interim periods within fiscal years beginning after December 15, 2017. Although management has not finalized its evaluation of the impact of adoption of this ASU, substantially all of the Company's revenues have historically been, and are expected to continue toinstruments that may be generated from activities that are outside the scope of the ASU. Therefore, management does not expect adoption to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

~~Table of Contents~~

~~BANKUNITED, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~September 30, 2017~~

Service charges on deposit accounts, which totaled approximately $9.8 million for the nine months ended September 30, 2017, is the most significant category of revenue identified as within the scope of the ASU; management does not expect the amount and timing of recognition of such revenue to be materially impacted by adoption, which management expects to apply using the modified retrospective approach, whereby the cumulative effect of initially applying the amendments is recognized as an adjustment to opening retained earnings at the date of adoption.

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.~~ ~~The amendments~~settled in the entity's own shares. This ASU that are expected to be most applicable to the Company (1) eliminate the available for sale classification for equity securities and require investments in equity securities (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, provided that equity investments that do not have readily determinable fair values may be re-measured at fair value upon occurrence of an observable price change or recognition of impairment, (2) eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, and (3) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The amendments also clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity's other deferred tax assets, which is consistent with the Company's current practice. The amendments in this ASU are effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2017 and will be adopted by means of a cumulative-effect adjustment to the balance sheet, except for amendments related to equity securities without readily determinable fair values, which will be applied prospectively. Although management2021. The Company has not finalized its evaluation of the impact of adoption ~~of this ASU, adoption is not expected to have any impact~~ on ~~the Company's~~its consolidated financial position, orresults of operations, and cash flows, other than a cumulative effect adjustment to reclassify any unrealized gains or losses related to equity securities from AOCI to retained earnings. The carrying value of equity investments for which fair value changes will be recognized in earnings after adoption totaled $71 million and had unrealized gains of $10.0 million at September 30, 2017. Adoption ofbut the ~~ASU will~~ impact ~~the Company's disclosures about the fair value of certain financial instruments.~~

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842).~~ The amendments in this ASU require a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for leases with terms longer than one year. Accounting applied by lessors is largely unchanged by this ASU. The amendments in this ASU are effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2018. Early adoption is permitted; however, the Company does not intend to early adopt this ASU. Lessees and lessors are required to apply the provisions of the ASU at the beginning of the earliest period presented using a modified retrospective approach. Management has not completed its evaluation of the impact of adoption of this ASU and is not currently ~~able to reasonably estimate the impact of adoption on the consolidated financial statements; however, the most significant impact is~~ expected to be ~~the recognition, as lessee, of new right-of-use assets and lease liabilities on the consolidated balance sheet for real estate leases currently classified as operating leases.~~

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments.~~ The ASU introduces new guidance which makes substantive changes to the accounting for credit losses. The ASU introduces the CECL model which applies to financial assets subject to credit losses and measured at amortized cost, as well as certain off-balance sheet credit exposures. This includes loans, loan commitments, standby letters of credit, net investments in leases recognized by a lessor and held-to-maturity debt securities. The CECL model requires an entity to estimate credit losses expected over the life of an exposure, considering information about historical events, current conditions and reasonable and supportable forecasts. The ASU also modifies the current OTTI model for available for sale debt securities requiring an estimate of expected credit losses only when the fair value of an available for sale debt security is below its amortized cost. Credit losses on available for sale debt securities will be limited to the difference between the security's amortized cost basis and its fair value. The ASU also provides for a simplified accounting model for purchased financial assets with more than insignificant credit deterioration since their origination. The amendments in this ASU are effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2019. Management has not yet completed its evaluation of the impact of adoption of this ASU and is not currently able to reasonably estimate the impact of adoption on the consolidated financial statements; however, adoption is likely to lead to significant changes in accounting policies related to, and the methods employed in estimating, the ALLL. It is possible that the impact will be material to the Company's consolidated financial position and results of operations.

material.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

~~September~~June 30, ~~2017~~2021

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.~~ The amendments in this ASU provide guidance on eight specific cash flow classification issues where there has been diversity in practice. The guidance in the ASU that is expected to be most applicable to the Company requires: (1) cash payments for debt prepayment or extinguishment costs to be classified as cash outflows for financing activities, (2) proceeds from settlement of insurance claims to be classified on the basis of the nature of the loss and (3) cash proceeds from settlement of bank-owned life insurance policies to be classified as cash flows from investing activities. Cash payments for premiums on bank-owned life insurance may be classified as cash flows for investing activities, operating activities or a combination thereof. The amendments in this ASU are effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2017 and will be applied retrospectively to each period presented. The provisions of this ASU are generally consistent with the Company's current practice and adoption is not expected to materially impact the Company's consolidated cash flows.

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	2021		2020		2021		2020
Basic earnings per common share:
Numerator:
Net income	$	103,974	$	76,508	$	202,788	$	45,557
Distributed and undistributed earnings allocated to participating securities	(1,338)		(3,353)		(2,589)		(1,939)
Income allocated to common stockholders for basic earnings per common share	$	102,636	$	73,155	$	200,199	$	43,618
Denominator:
Weighted average common shares outstanding	93,245,282		92,409,949		93,160,962		93,177,243
Less average unvested stock awards	(1,241,381)		(1,207,798)		(1,223,555)		(1,154,589)
Weighted average shares for basic earnings per common share	92,003,901		91,202,151		91,937,407		92,022,654
Basic earnings per common share	$	1.12	$	0.80	$	2.18	$	0.47
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share	$	102,636	$	73,155	$	200,199	$	43,618
Adjustment for earnings reallocated from participating securities	2		0		3		0
Income used in calculating diluted earnings per common share	$	102,638	$	73,155	$	200,202	$	43,618
Denominator:
Weighted average shares for basic earnings per common share	92,003,901		91,202,151		91,937,407		92,022,654
Dilutive effect of stock options and certain shared-based awards	181,061		705		137,542		126,858
Weighted average shares for diluted earnings per common share	92,184,962		91,202,856		92,074,949		92,149,512
Diluted earnings per common share	$	1.11	$	0.80	$	2.17	$	0.47

Three Months Ended September 30, Nine Months Ended September 30,
c 2017 2016 2017
2016
Basic earnings per common share:

Numerator:

Net income $ 67,779
$ 50,848
$ 196,479
$ 162,447
Distributed and undistributed earnings allocated to participating securities (2,525 ) (2,031 ) (7,331 ) (6,522 )
Income allocated to common stockholders for basic earnings per common share $ 65,254
$ 48,817
$ 189,148
$ 155,925
Denominator:
Weighted average common shares outstanding 106,809,381
104,153,018
106,488,396
104,077,932
Less average unvested stock awards (1,101,485 ) (1,150,268 ) (1,102,381 ) (1,165,509 )
Weighted average shares for basic earnings per common share 105,707,896
103,002,750
105,386,015
102,912,423
Basic earnings per common share $ 0.62
$ 0.47
$ 1.79
$ 1.52
Diluted earnings per common share:
Numerator:
Income allocated to common stockholders for basic earnings per common share $ 65,254
$ 48,817
$ 189,148
$ 155,925
Adjustment for earnings reallocated from participating securities 6
(81 ) 21
(264 )
Income used in calculating diluted earnings per common share $ 65,260
$ 48,736
$ 189,169
$ 155,661
Denominator:

Weighted average shares for basic earnings per common share 105,707,896
103,002,750
105,386,015
102,912,423
Dilutive effect of stock options and executive share-based awards 365,286
558,304
479,459
699,977
Weighted average shares for diluted earnings per common share 106,073,182
103,561,054
105,865,474
103,612,400
Diluted earnings per common share $ 0.62
$ 0.47
$ 1.79
$ 1.50

~~Table of Contents~~

~~BANKUNITED, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~September 30, 2017~~

~~Included in participating securities above are~~Potentially dilutive unvested shares and share units totaling 1,212,062 and 1,743,403 were outstanding at June 30, 2021 and 2020, respectively, but excluded from the calculation of diluted earnings per common share because their inclusion would have been anti-dilutive.

Participating securities for the three and six months ended June 30, 2020 include 3,023,314 dividend equivalent rights ~~outstanding at September 30, 2017~~ that were issued in conjunction with the IPO of the Company's common stock. These dividend equivalent rights ~~expire~~expired in February 2021 and, ~~participate~~while outstanding, participated in dividends on a one-for-one basis.

~~The following potentially dilutive securities were outstanding at September~~

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

June 30, ~~2017 and 2016, but excluded from the calculation of diluted earnings per common share for the periods indicated because their inclusion would have been anti-dilutive:~~ 2021

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Unvested shares and share units 1,111,300
1,296,848
1,111,300
1,296,848
Stock options and warrants 1,850,279
1,851,376
1,850,279
1,851,376

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):


	September 30, 2017										June 30, 2021
	Amortized Cost		Gross Unrealized					Fair Value			Amortized Cost		Gross Unrealized				Carrying Value (1)
			Gains		Losses								Gains		Losses
Investment securities available for sale:										Investment securities available for sale:
U.S. Treasury securities	$	24,969	$	—	$	(12	)	$	24,957	U.S. Treasury securities	$	158,977	$	469	$	(2,809)	$	156,637
U.S. Government agency and sponsored enterprise residential MBS	2,332,616		16,762		(691		)	2,348,687		U.S. Government agency and sponsored enterprise residential MBS	2,197,562		22,257		(4,379)		2,215,440
U.S. Government agency and sponsored enterprise commercial MBS	139,966		1,067		(1,813		)	139,220		U.S. Government agency and sponsored enterprise commercial MBS	831,726		8,564		(4,702)		835,588

Private label residential MBS and CMOs	507,381		20,812		(335		)	527,858		Private label residential MBS and CMOs	2,104,579		9,475		(2,327)		2,111,727
Private label commercial MBS	1,140,465		14,646		(1,510		)	1,153,601		Private label commercial MBS	2,579,963		18,530		(4,469)		2,594,024
Single family rental real estate-backed securities	566,635		6,425		(112		)	572,948		Single family rental real estate-backed securities	608,269		9,961		(785)		617,445
Collateralized loan obligations	695,414		4,905		—			700,319		Collateralized loan obligations	986,214		269		(4,216)		982,267
Non-mortgage asset-backed securities	80,255		2,382		—			82,637		Non-mortgage asset-backed securities	172,791		3,715		0		176,506
Preferred stocks	60,716		10,000		—			70,716
State and municipal obligations	666,013		14,370		(3,368		)	677,015		State and municipal obligations	209,791		18,834		0		228,625
SBA securities	572,540		14,152		(17		)	586,675		SBA securities	216,682		2,244		(3,292)		215,634
Other debt securities	4,056		4,783		—			8,839
	$	6,791,026	$	110,304	$	(7,858	)	$	6,893,472
											10,066,554		$	94,318	$	(26,979)	10,133,893
Investment securities held to maturity										Investment securities held to maturity	10,000						10,000
											$	10,076,554					10,143,893
Marketable equity securities										Marketable equity securities							88,142
																	$	10,232,035

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

~~September~~June 30, ~~2017~~2021



	December 31, 2020
	Amortized Cost		Gross Unrealized				Carrying Value (1)
			Gains		Losses
Investment securities available for sale:
U.S. Treasury securities	$	79,919	$	1,307	$	(375)	$	80,851
U.S. Government agency and sponsored enterprise residential MBS	2,389,450		19,148		(3,028)		2,405,570
U.S. Government agency and sponsored enterprise commercial MBS	531,724		9,297		(1,667)		539,354

Private label residential MBS and CMOs	982,890		16,274		(561)		998,603
Private label commercial MBS(2)	2,514,271		24,931		(12,848)		2,526,354
Single family rental real estate-backed securities	636,069		14,877		(58)		650,888
Collateralized loan obligations	1,148,724		285		(8,735)		1,140,274
Non-mortgage asset-backed securities	246,597		6,898		(234)		253,261
State and municipal obligations	213,743		21,966		0		235,709
SBA securities	233,387		2,093		(3,935)		231,545
	8,976,774		$	117,076	$	(31,441)	9,062,409
Investment securities held to maturity	10,000						10,000
	$	8,986,774					9,072,409
Marketable equity securities							104,274
							$	9,176,683

December 31, 2016
Amortized Cost Gross Unrealized Fair Value
Gains Losses
U.S. Treasury securities $ 4,999
$ 6
$ —
$ 5,005
U.S. Government agency and sponsored enterprise residential MBS 1,513,028
15,922
(1,708 ) 1,527,242
U.S. Government agency and sponsored enterprise commercial MBS 126,754
670
(2,838 ) 124,586
Private label residential MBS and CMOs 334,167
42,939
(2,008 ) 375,098
Private label commercial MBS 1,180,386
9,623
(2,385 ) 1,187,624
Single family rental real estate-backed securities 858,339
4,748
(1,836 ) 861,251
Collateralized loan obligations 487,678
868
(1,250 ) 487,296
Non-mortgage asset-backed securities 187,660
2,002
(2,926 ) 186,736
Preferred stocks 76,180
12,027
(4 ) 88,203
State and municipal obligations 705,884
3,711
(11,049 ) 698,546
SBA securities 517,129
7,198
(421 ) 523,906
Other debt securities 3,999
4,092
—
8,091
$ 5,996,203
$ 103,806
$ (26,425 ) $ 6,073,584

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

(2)Amortized cost is net of ACL totaling $0.4 million at December 31, 2020.

Investment securities held to maturity at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 consisted of ~~one~~1 State of Israel bond ~~with a carrying value of $10 million. Fair value approximated carrying value~~maturing in 2024. Accrued interest receivable on investments totaled $17 million at ~~September~~both June 30, ~~2017~~2021 and December 31, ~~2016. The bond matures~~2020, and is included in ~~2024.~~other assets in the accompanying consolidated balance sheets.

At ~~September~~June 30, ~~2017,~~2021, contractual maturities of investment securities available for sale, adjusted for anticipated prepayments ~~of mortgage-backed and other pass-through securities,~~when applicable, were as follows (in thousands):

Amortized Cost Fair Value
Due in one year or less $ 684,986
$ 697,034
Due after one year through five years 3,363,698
3,406,609
Due after five years through ten years 2,252,239
2,282,220
Due after ten years 429,387
436,893
Preferred stocks with no stated maturity 60,716
70,716
$ 6,791,026
$ 6,893,472

Based on the Company’s assumptions, the estimated weighted average life of the investment portfolio as of September 30, 2017 was 4.9 years. The effective duration of the investment portfolio as of September 30, 2017 was 1.7 years. The model results are based on assumptions that may differ from actual results.


	Amortized Cost		Fair Value
Due in one year or less	$	1,463,157	$	1,468,146
Due after one year through five years	6,199,918		6,245,085
Due after five years through ten years	1,971,729		1,984,142
Due after ten years	431,750		436,520
	$	10,066,554	$	10,133,893

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 ~~$2.5 billion and $1.8~~$4.1 billion at ~~September~~both June 30, ~~2017~~2021 and December 31, ~~2016, respectively.~~

2020.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

~~September~~June 30, ~~2017~~2021

September 30, 2017
FICO
LTV 720 or less 721 - 740 741 - 760
761 or
greater
Total
60% or less $ 94,357
$ 111,279
$ 185,614
$ 819,422
$ 1,210,672
60% - 70% 93,963
102,461
140,350
586,158
922,932
70% - 80% 139,923
173,808
316,544
1,091,868
1,722,143
More than 80% 24,725
20,610
24,981
85,781
156,097
$ 352,968
$ 408,158
$ 667,489
$ 2,583,229
$ 4,011,844

December 31, 2016
FICO
LTV 720 or less 721 - 740 741 - 760
761 or
greater
Total
60% or less $ 87,035
$ 113,401
$ 163,668
$ 751,291
$ 1,115,395
60% - 70% 80,694
94,592
124,180
523,970
823,436
70% - 80% 110,509
148,211
276,425
907,450
1,442,595
More than 80% 22,115
9,058
15,470
42,280
88,923
$ 300,353
$ 365,262
$ 579,743
$ 2,224,991
$ 3,470,349

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

~~September~~June 30, ~~2017~~2021

Included in the table above is the guaranteed portion of SBA loans past due by 90 days or more totaling $33.6 million and $40.3 million at June 30, 2021 and December 31, 2020, respectively.

~~Commercial credit exposure, based~~Loans contractually delinquent by 90 days or more and still accruing totaled $732 million and $562 million at June 30, 2021 and December 31, 2020, respectively, substantially all of which were government insured residential loans. These loans are government insured pool buyout loans, which the Company buys out of GNMA securitizations upon default.

The following table presents information about loans on ~~internal risk rating:~~ non-accrual status at the dates indicated (in thousands):


	June 30, 2021				December 31, 2020

	Amortized Cost		Amortized Cost With No Related Allowance		Amortized Cost		Amortized Cost With No Related Allowance
Residential and other consumer	$	45,553	$	1,643	$	28,828	$	1,755
Commercial:
Multi-family	7,069		7,069		24,090		24,090
Non-owner occupied commercial real estate	51,320		30,182		64,017		32,843
Construction and land	4,784		4,439		4,754		4,408
Owner occupied commercial real estate	26,582		7,545		23,152		2,110
Commercial and industrial	123,818		9,760		54,584		9,235

Bridge - franchise finance	33,405		4,010		45,028		9,754

	$	292,531	$	64,648	$	244,453	$	84,195

Included in the table above is the guaranteed portion of non-accrual SBA loans totaling $47.7 million and $51.3 million at June 30, 2021 and December 31, 2020, respectively. The amount of interest income recognized on non-accrual loans was insignificant for the three and six months ended June 30, 2021 and 2020. The amount of additional interest income that would have been recognized on non-accrual loans had they performed in accordance with their contractual terms was approximately $3.4 million and $5.9 million for the three and six months ended June 30, 2021, respectively and $3.0 million and $5.7 million for the three and six months ended June 30, 2020, respectively.

Collateral dependent loans:

The following table presents the amortized cost basis of collateral dependent loans at the dates indicated (in thousands):


	June 30, 2021				December 31, 2020
	Amortized Cost		Extent to Which Secured by Collateral		Amortized Cost		Extent to Which Secured by Collateral
Residential and other consumer	$	2,405	$	2,377	$	2,528	$	2,513
Commercial:
Multi-family	7,069		7,069		24,090		24,090
Non-owner occupied commercial real estate	40,965		40,724		52,813		52,435
Construction and land	4,784		4,784		4,754		4,754
Owner occupied commercial real estate	20,228		20,228		14,814		14,777
Commercial and industrial	99,405		61,286		28,112		18,093

Bridge - franchise finance	7,541		5,818		28,986		12,832

Total commercial	179,992		139,909		153,569		126,981
	$	182,397	$	142,286	$	156,097	$	129,494

September 30, 2017
Commercial and Industrial
Multi-Family Non-Owner Occupied Commercial Real Estate Construction
and Land Owner Occupied Commercial Real Estate Taxi Medallion Loans Other Commercial and Industrial Commercial Lending Subsidiaries Total
Pass $ 3,299,753
$ 4,069,749
$ 265,921
$ 1,890,785
$ —
$ 3,666,227
$ 2,313,152
$ 15,505,587
Special mention 32,255
12,824
—
31,495
—
38,389
35,936
150,899
Substandard 30,253
90,996
5,535
31,460
120,572
64,087
33,637
376,540
Doubtful —
—
—
3,009
—
2,807
—
5,816
$ 3,362,261
$ 4,173,569
$ 271,456
$ 1,956,749
$ 120,572
$ 3,771,510
$ 2,382,725
$ 16,038,842

December 31, 2016
Commercial and Industrial
Multi-Family Non-Owner Occupied Commercial Real Estate
Construction
and Land
Owner Occupied Commercial Real Estate Taxi Medallion Loans Other Commercial and Industrial Commercial Lending Subsidiaries Total
Pass $ 3,811,822
$ 3,694,931
$ 309,675
$ 1,672,199
$ 40,460
$ 3,112,590
$ 2,255,444
$ 14,897,121
Special mention 12,000
7,942
—
33,274
—
19,009
—
72,225
Substandard 5,852
28,935
1,238
30,377
138,035
68,704
31,572
304,713
Doubtful —
—
—
—
178
8,162
3,178
11,518
$ 3,829,674
$ 3,731,808

$ 310,913
$ 1,735,850

$ 178,673

$ 3,208,465
$ 2,290,194

$ 15,285,577

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

~~September~~June 30, ~~2017~~2021

~~Aging~~Collateral for the multi-family, non-owner occupied commercial real estate and owner-occupied commercial real estate loan classes generally consists of ~~loans:~~

~~The following table presents an aging~~commercial real estate. Collateral for construction and land loans is typically residential or commercial real estate. Collateral for commercial and industrial loans generally consists of equipment, accounts receivable, inventory and other business assets; owner-occupied commercial real estate loans atmay also be collateralized by these types of assets. Bridge franchise finance loans may be collateralized by franchise value or by equipment. Bridge equipment finance loans are secured by the ~~dates indicated. Amounts include premiums, discounts and deferred fees and costs (in thousands):~~

September 30, 2017 December 31, 2016
Current
30 - 59
Days Past
Due

60 - 89
Days Past
Due

90 Days or
More Past
Due
Total Current
30 - 59
Days Past
Due

60 - 89
Days Past
Due

90 Days or
More Past
Due
Total
Non-covered loans:

1-4 single family residential $ 3,994,758
$ 13,964
$ 444
$ 2,678
$ 4,011,844
$ 3,457,606
$ 10,355
$ 325
$ 2,063
$ 3,470,349
Home equity loans and lines of credit 1,623
21
—
—
1,644
1,120
—
—
—
1,120
Other consumer loans 19,623
500
—
1
20,124
24,306
—
—
—
24,306
Multi-family 3,362,261
—
—
—
3,362,261
3,829,674
—
—
—
3,829,674
Non-owner occupied commercial real estate 4,171,880
—
—
1,689
4,173,569
3,730,470
754
—
584
3,731,808
Construction and land 270,218
—
—
1,238
271,456
309,675
—
—
1,238
310,913
Owner occupied commercial real estate 1,947,728
1,261
266
7,494
1,956,749
1,726,826
1,557
797
6,670
1,735,850
Commercial and industrial
Taxi medallion loans 107,325
—
2,803
10,444
120,572
137,856
7,037
4,563
29,217
178,673
Other commercial and industrial 3,769,065
1,629
58
758
3,771,510
3,198,008
2,515
954
6,988
3,208,465
Commercial lending subsidiaries 2,382,725
—
—
—
2,382,725
2,284,435
12
3,247
2,500
2,290,194
$ 20,027,206
$ 17,375
$ 3,571
$ 24,302
$ 20,072,454
$ 18,699,976
$ 22,230
$ 9,886
$ 49,260
$ 18,781,352
Covered loans:
Non-ACI loans:

1-4 single family residential $ 23,002
$ 691
$ —
$ 934
$ 24,627
$ 29,406
$ 481
$ —
$ 918
$ 30,805
Home equity loans and lines of credit 33,263
1,114
663
2,369
37,409
43,129
1,255
534
2,077
46,995
$ 56,265
$ 1,805
$ 663
$ 3,303
$ 62,036
$ 72,535
$ 1,736
$ 534
$ 2,995
$ 77,800
ACI loans:
1-4 single family residential $ 436,051
$ 14,126
$ 2,549
$ 17,574
$ 470,300
$ 500,272
$ 13,524
$ 2,990
$ 15,562
$ 532,348
Home equity loans and lines of credit 4,876
89
40
635
5,640
3,460
148
23
263
3,894
$ 440,927
$ 14,215
$ 2,589
$ 18,209
$ 475,940
$ 503,732
$ 13,672
$ 3,013
$ 15,825
$ 536,242

~~1-4 single family~~financed equipment. Residential loans are collateralized by residential ~~and home equity ACI~~real estate. There have been no significant changes to the extent to which collateral secures collateral dependent loans ~~that are contractually delinquent by more than 90 days and accounted for in pools that are on accrual status because discount continues to be accreted totaled $18 million and $16 million at September~~during the six months ended June 30, ~~2017 and December 31, 2016, respectively.~~2021.

Foreclosure of residential real estate

The recorded investment in residential loans in the process of foreclosure was $200 million, of which $192 million was government insured, at June 30, 2021 and $217 million, of which $209 million was government insured, at December 31, 2020. The carrying amount of foreclosed residential real estate ~~properties~~ included in ~~"Other assets"~~other assets in the accompanying consolidated balance ~~sheets, all of which were covered, totaled $4 million and $5 million~~sheet was insignificant at ~~September~~June 30, ~~2017~~2021 and December 31, 2016, respectively. The recorded investment in residential mortgage loans in the process of foreclosure totaled $13 million and $8 million at September 30, 2017 and December 31, 2016, respectively, substantially all of which were covered loans.

~~Table of Contents~~

~~BANKUNITED, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~September 30, 2017~~

2020.

Troubled debt restructurings

The following table summarizes loans that were modified in TDRs during the periods indicated, as well as loans modified during the twelve months preceding ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020 that experienced payment defaults during ~~the~~those periods ~~indicated~~ (dollars in thousands):


	Three Months Ended June 30,
	2021						2020
	Loans Modified in TDRs During the Period			TDRs Experiencing Payment Defaults During the Period			Loans Modified in TDRs During the Period			TDRs Experiencing Payment Defaults During the Period
	Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost

Government insured residential	116	$	21,758	54	$	9,878	52	$	7,291	121	$	19,512


Non-owner occupied commercial real estate	1	2,853		0	0		0	0		1	4,249


Commercial and industrial	0	0		0	0		2	1,348		0	0

Bridge - franchise finance	0	0		0	0		1	919		5	18,718

	117	$	24,611	54	$	9,878	55	$	9,558	127	$	42,479

Three Months Ended September 30,
2017 2016
Loans Modified in TDRs
During the Period TDRs Experiencing Payment
Defaults During the Period Loans Modified in TDRs
During the Period TDRs Experiencing Payment
Defaults During the Period
Number of
TDRs Recorded
Investment Number of
TDRs Recorded
Investment Number of
TDRs Recorded
Investment Number of
TDRs Recorded
Investment
Non-covered loans:

1-4 single family residential —
$ —
2
$ 269
—
$ —
—
$ —
Owner occupied commercial real estate —
—
—
—
1
491
—
—
Commercial and industrial
Taxi medallion loans 15
5,439
6
2,105
18
29,854
8
4,104
Other commercial and industrial 1
978
—
—
2
1,646
—

Commercial lending subsidiaries —
—
—
—
5
4,433
1
3,500
16
$ 6,417
8
$ 2,374
26
$ 36,424
9
$ 7,604
Covered loans:
Non-ACI loans:

Home equity loans and lines of credit —
$ —
1
$ 70
10
$ 1,671
—
$ —
ACI loans:
Owner occupied commercial real estate —
$ —
—
$ —
1
$ 839
—
$ —


	Six Months Ended June 30,
	2021						2020
	Loans Modified in TDRs During the Period			TDRs Experiencing Payment Defaults During the Period			Loans Modified in TDRs During the Period			TDRs Experiencing Payment Defaults During the Period
	Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost		Number of TDRs		Amortized Cost
1-4 single family residential	0	$	0	0	$	0	1	$	203	0		$	0
Government insured residential	143	27,235		63	10,997		86	12,183		150		23,994


Non-owner occupied commercial real estate	1	2,853		0	0		1	4,249		1		4,249


Commercial and industrial	0	0		0	0		2	1,348		3		5,448

Bridge - franchise finance	0	0		0	0		9	14,666		8		23,358

	144	$	30,088	63	$	10,997	99	$	32,649	$	162	$	57,049

Nine Months Ended September 30,
2017 2016
Loans Modified in TDRs
During the Period TDRs Experiencing Payment
Defaults During the Period Loans Modified in TDRs
During the Period TDRs Experiencing Payment
Defaults During the Period
Number of
TDRs Recorded
Investment Number of
TDRs Recorded
Investment Number of
TDRs Recorded
Investment Number of
TDRs Recorded
Investment
Non-covered loans:

1-4 single family residential 4
$ 351
2
$ 269
1
$ 107
—
$ —
Non-owner occupied commercial real estate 1
5,389
—
—
—
—
—
—
Owner occupied commercial real estate 2
4,522
—
—
3
5,225
—
—
Commercial and industrial

Taxi medallion loans 97
48,692
8
3,509
58
57,341
8
4,104
Other commercial and industrial 14
20,860
—
—
7
21,422
1
3,500
Commercial lending subsidiaries 1
12,810
—
—
6
7,933
—
—
119
$ 92,624
10
$ 3,778
75
$ 92,028
9
$ 7,604
Covered loans:
Non-ACI loans:

Home equity loans and lines of credit 5
$ 939
1
$ 70
16
$ 2,293
—
$ —
ACI loans:
Owner occupied commercial real estate —
$ —
—
$ —
1
$ 839
—
$ —

~~Modifications~~TDRs during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 generally included interest rate reductions ~~restructuring of the amount~~ and ~~timing of required periodic payments,~~ extensions of ~~maturity and covenant waivers.~~maturity. Included in TDRs are residential loans to borrowers who have not reaffirmed their debt discharged in Chapter 7 bankruptcy. The total amount of such loans is not material. ~~Modified ACI loans accounted for~~The majority of loan modifications or deferrals that took place after the onset of the COVID-19 pandemic have not been categorized as TDRs, in ~~pools are not considered TDRs, are not separated from~~accordance with interagency and authoritative guidance and the ~~pools and are not classified as impaired loans.~~

provisions of the CARES Act.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

~~September~~June 30, ~~2017~~2021

Note 5 ~~FDIC Indemnification Asset~~

When the Company recognizes gains or losses related to covered assets in its consolidated financial statements, changes in the estimated amount recoverable from the FDIC under the Loss Sharing Agreements with respect to those gains or losses are also reflected in the consolidated financial statements. Covered loans may be resolved through prepayment, short sale of the underlying collateral, foreclosure, sale of the loans or charge-off. For loans resolved through prepayment, short sale or foreclosure, the difference between consideration received in satisfaction of the loans and the carrying value of the loans is recognized in the consolidated statement of income line item “Income from resolution of covered assets, net.” Losses from the resolution of covered loans increase the amount recoverable from the FDIC under the Loss Sharing Agreements. Gains from the resolution of covered loans reduce the amount recoverable from the FDIC under the Loss Sharing Agreements. Similarly, differences in proceeds received on the sale of covered OREO and covered loans and their carrying amounts result in gains or losses and reduce or increase the amount recoverable from the FDIC under the Loss Sharing Agreements. Increases in valuation allowances or impairment charges related to covered assets also increase the amount estimated to be recoverable from the FDIC. These additions to or reductions in amounts recoverable from the FDIC related to transactions in the covered assets are recorded in the consolidated statement of income line item “Net gain (loss) on FDIC indemnification” and reflected as corresponding increases or decreases in the FDIC indemnification asset.

In addition, through June 30, 2017, recoveries of previously indemnified losses on assets that were formerly covered under the Commercial Shared-Loss Agreement resulted in reimbursements due to the FDIC. These transactions are included in the tables below. Amounts payable to the FDIC resulting from these transactions are recognized in other liabilities in the accompanying consolidated balance sheet at December 31, 2016.

The following tables summarize the components of the gains and losses associated with covered assets, along with the related additions to or reductions in the amounts recoverable from the FDIC under the Loss Sharing Agreements, as reflected in the consolidated statements of income for the periods indicated (in thousands):

Three Months Ended September 30,
2017 2016
Transaction
Income (Loss) Net Loss on FDIC
Indemnification Net Impact
on Pre-tax
Earnings Transaction
Income (Loss) Net Gain on FDIC
Indemnification Net Impact
on Pre-tax
Earnings
Recovery of (provision for) losses on covered loans $ (261 ) $ 215
$ (46 ) $ 445
$ (368 ) $ 77
Income from resolution of covered assets, net 6,400
(5,082 ) 1,318
8,883
(7,106 ) 1,777
Loss on sale of covered loans —
—
—
(10,033 ) 8,026
(2,007 )
Loss on covered OREO (35 ) 29
(6 ) (552 ) 441
(111 )
$ 6,104
$ (4,838 ) $ 1,266
$ (1,257 ) $ 993
$ (264 )

Nine Months Ended September 30,
2017 2016
Transaction
Income (Loss) Net Loss on FDIC
Indemnification Net Impact
on Pre-tax
Earnings Transaction
Income (Loss) Net Loss on FDIC
Indemnification Net Impact
on Pre-tax
Earnings
Recovery of (provision for) losses on covered loans $ (2,693 ) $ 2,095
$ (598 ) $ 1,119
$ (1,007 ) $ 112
Income from resolution of covered assets, net 22,066
(17,591 ) 4,475
26,426
(21,140 ) 5,286
Loss on sale of covered loans (1,582 ) 1,266
(316 ) (14,895 ) 11,958
(2,937 )
Loss on covered OREO (65 ) 56
(9 ) (957 ) 779
(178 )
$ 17,726
$ (14,174 ) $ 3,552
$ 11,693
$ (9,410 ) $ 2,283

~~Table of Contents~~

~~BANKUNITED, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~September 30, 2017~~

Changes in the FDIC indemnification asset and in the liability to the FDIC for recoveries related to assets previously covered under the Commercial Shared-Loss Agreement for the nine months ended September 30, 2017 and the year ended December 31, 2016, were as follows (in thousands):

Balance at December 31, 2015 $ 739,843
Amortization (160,091 )
Reduction for claims filed (46,083 )
Net loss on FDIC indemnification (17,759 )
Balance at December 31, 2016 515,910
Amortization (135,351 )
Reduction for claims filed (16,768 )
Net loss on FDIC indemnification (14,174 )
Balance at September 30, 2017 $ 349,617

~~The balances at September 30, 2017 and December 31, 2016 are reflected in the consolidated balance sheets as follows (in thousands):~~

September 30, 2017 December 31, 2016
FDIC indemnification asset $ 349,617
$ 515,933
Other liabilities —
(23 )
$ 349,617
$ 515,910

~~Note 6~~Income Taxes

The Company’s effective income tax rate was ~~32.2%~~25.8% and ~~31.7%~~25.3% for the three and six months ended ~~September~~June 30, ~~2017 and 2016,~~2021, respectively and ~~31.2%~~21.0% and ~~33.2%~~19.3% for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017 and 2016,~~2020, respectively. The effective income tax ~~rate~~rates differed from the statutory federal income tax rate of ~~35% in all periods~~21% for the three and six months ended June 30, 2021 due primarily to the ~~effect~~impact of state income taxes, partially offset by the benefit of income not subject to ~~tax, offset by state income taxes. In addition,~~federal tax. These factors were largely offsetting for the 2020 periods, when the effective ~~income~~ tax rate ~~for~~did not differ materially from the Federal statutory rate of 21%. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 reflected~~2020, income not subject to tax was a larger percentage of pre-tax income when compared to the ~~impact of $0.3 million and $3.2 million, respectively,~~same periods in ~~excess tax benefits resulting from activity related to vesting of share-based awards and exercise of stock options.~~2021.

The Company has investments in affordable housing limited partnerships which generate federal Low Income Housing Tax Credits and other tax benefits. The balance of these investments, included in other assets in the accompanying consolidated balance sheet, was $66 million and $71 million at September 30, 2017 and December 31, 2016, respectively. Unfunded commitments for affordable housing investments, included in other liabilities in the accompanying consolidated balance sheet, were $29 million and $53 million at September 30, 2017 and December 31, 2016, respectively. The maximum exposure to loss as a result of the Company's involvement with these limited partnerships at September 30, 2017 was approximately $73 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. These investments did not have a material impact on income tax expense for the three and nine months ended September 30, 2017 and 2016.

Note 76 Derivatives and Hedging Activities

The Company ~~uses interest rate swaps to manage interest rate risk related to liabilities that expose the Company to variability in cash flows due to changes in interest rates. The Company enters~~has entered into LIBOR-based interest rate swaps ~~that are~~and caps designated as cash flow hedges with the objective of limiting the variability of interest payment cash ~~flows resulting from changes in the benchmark~~flows. The Company has also entered into LIBOR-based interest rate ~~LIBOR. Changes~~swaps designated as fair value hedges designed to hedge changes in the fair value of ~~interest~~outstanding fixed rate ~~swaps designated as cash flow hedging instruments are reported in AOCI and subsequently reclassified into interest expense~~borrowings caused by fluctuations in the ~~same period in which the related~~benchmark interest ~~on the floating-rate debt obligations affects earnings.~~

~~Table of Contents~~

~~BANKUNITED, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~September 30, 2017~~

rate.

The Company ~~also~~ enters into interest rate derivative contracts with certain of its commercial borrowers to enable those borrowers to manage their exposure to interest rate fluctuations. To mitigate interest rate risk associated with these derivative contracts, the Company enters into offsetting derivative contract positions with primary dealers. These interest rate derivative contracts are not designated as hedging instruments; therefore, changes in the fair value of these derivatives are recognized immediately in earnings. ~~The~~For the three and six months ended June 30, 2021 and 2020, the impact on earnings related to changes in fair value of these derivatives ~~for the three and nine months ended September 30, 2017 and 2016~~ was not material.

The Company may be exposed to credit risk in the event of non-performance by the counterparties to its interest rate derivative agreements. The Company assesses the credit risk of its financial institution counterparties by monitoring publicly available credit rating and financial information. The Company manages dealer credit risk by entering into interest rate derivatives only with primary and highly rated counterparties, the use of ISDA master agreements, central clearing mechanisms and counterparty limits. The agreements contain bilateral collateral arrangements with the amount of collateral to be posted generally governed by the settlement value of outstanding swaps. The Company manages the risk of default by its commercial borrower counterparties through its normal loan underwriting and credit monitoring policies and procedures. The Company does not currently anticipate any significant losses from failure of interest rate derivative counterparties to honor their obligations.

The CME ~~amended its rules effective January 2017 to~~ legally ~~characterize~~characterizes variation margin payments for centrally cleared derivatives as settlements of the derivatives' exposures rather than collateral. As a result, the variation margin payment and the related derivative instruments are considered a single unit of account for accounting and financial reporting purposes. The Company's clearing agent for interest rate derivative contracts centrally cleared through the CME settles the variation margin daily with the CME; therefore, those interest rate derivative contracts the Company clears through the CME are reported at a fair value of approximately ~~zero~~0 at ~~September~~both June 30, ~~2017.~~2021 and December 31, 2020.

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

June 30, 2021

The following tables set forth certain information concerning the Company’s interest rate contract derivative financial instruments and related hedged items at the dates indicated (dollars in thousands):


																					June 30, 2021
	September 30, 2017
		Weighted Average Pay Rate		Weighted Average Receive Rate		Weighted Average Remaining Life in Years																		Weighted Average Pay Rate			Weighted Average Receive Rate			Weighted Average Remaining Life in Years
					Notional Amount			Balance Sheet Location		Fair Value																			Notional Amount				Balance Sheet Location					Fair Value
	Hedged Item						Asset				Liability				Hedged Item																	Asset						Liability
Derivatives designated as cash flow hedges:																							Derivatives designated as cash flow hedges:
Pay-fixed interest rate swaps	Variability of interest cash flows on variable rate borrowings		1.77%			3-Month Libor	4.6		$	2,046,000		Other assets / Other liabilities		$	1,066			$	(259	)	Pay-fixed interest rate swaps	Variability of interest cash flows on variable rate borrowings				2.53%			3-Month LIBOR			2.3				$	2,381,000			Other liabilities				$	0				$	(4,544)
Interest rate caps purchased, indexed to Fed Funds effective rate																			Interest rate caps purchased, indexed to Fed Funds effective rate		Variability of interest cash flows on variable rate borrowings				0%			—%			4.4				100,000				Other assets				1,259					0
Derivatives designated as fair value hedges:																			Derivatives designated as fair value hedges:
Receive-fixed interest rate swaps																			Receive-fixed interest rate swaps		Variability of fair value of fixed rate borrowings				3-Month LIBOR			1.54%			0.2				200,000				Other liabilities				0					0
Derivatives not designated as hedges:																			Derivatives not designated as hedges:
Pay-fixed interest rate swaps		3.86%		Indexed to 1-month Libor		6.4	1,000,763				Other assets / Other liabilities	7,605				(18,311		)	Pay-fixed interest rate swaps					3.57%			Indexed to 1-month LIBOR			5.4			1,679,754					Other assets / Other liabilities			1,067					(25,087)
Pay-variable interest rate swaps		Indexed to 1-month Libor		3.86%		6.4	1,000,763				Other assets / Other liabilities	19,648				(8,491		)	Pay-variable interest rate swaps					Indexed to 1-month LIBOR			3.57%			5.4			1,679,754					Other assets			77,014					(2,154)
Interest rate caps purchased, indexed to 1-month Libor				2.80%		1.6	145,957				Other assets	15				—
Interest rate caps sold, indexed to 1-month Libor		2.80%				1.6	145,957				Other liabilities	—				(15		)
Interest rate caps purchased, indexed to 1-month LIBOR																			Interest rate caps purchased, indexed to 1-month LIBOR								2.36%			2.6			43,000					Other assets			346					0
Interest rate caps sold, indexed to 1-month LIBOR																			Interest rate caps sold, indexed to 1-month LIBOR					2.36%						2.6			43,000					Other liabilities			0					(346)
							$	4,339,440				$	28,334			$	(27,076	)															$	6,126,508							$	79,686				$	(32,131)

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

~~September~~June 30, ~~2017~~2021


	December 31, 2020

		Weighted Average Pay Rate	Weighted Average Receive Rate	Weighted Average Remaining Life in Years
					Notional Amount		Balance Sheet Location	Fair Value
	Hedged Item							Asset		Liability
Derivatives designated as cash flow hedges:
Pay-fixed interest rate swaps	Variability of interest cash flows on variable rate borrowings	2.41%	3-Month LIBOR	2.5	$	2,771,000	Other liabilities	$	0	$	(5,971)
Interest rate caps purchased, indexed to Fed Funds effective rate	Variability of interest cash flows on variable rate borrowings	0%	—%	4.9	100,000		Other assets	485		0
Derivatives designated as fair value hedges:
Receive-fixed interest rate swaps	Variability of fair value of fixed rate borrowings	3-Month LIBOR	1.55%	0.6	250,000		Other liabilities	0		0
Derivatives not designated as hedges:
Pay-fixed interest rate swaps		3.61%	Indexed to 1-month LIBOR	5.3	1,626,152		Other assets / Other liabilities	0		(38,519)
Pay-variable interest rate swaps		Indexed to 1-month LIBOR	3.61%	5.3	1,626,152		Other assets / Other liabilities	123,345		0
Interest rate caps purchased, indexed to 1-month LIBOR			3.72%	0.4	25,921		Other assets	0		0
Interest rate caps sold, indexed to 1-month LIBOR		3.72%		0.4	25,921		Other liabilities	0		0
					$	6,425,146		$	123,830	$	(44,490)

December 31, 2016

Weighted
Average Pay Rate

Weighted
Average Receive Rate

Weighted
Average
Remaining
Life in Years

Notional Amount Balance Sheet Location Fair Value
Hedged Item Asset Liability
Derivatives designated as cash flow hedges:

Pay-fixed interest rate swaps Variability of interest cash flows on variable rate borrowings 1.58% 3-Month Libor 3.3 $ 1,715,000
Other assets / Other liabilities $ 19,648
$ (3,112 )
Pay-fixed forward-starting interest rate swaps Variability of interest cash flows on variable rate borrowings 3.43% 3-Month Libor 10.5 300,000
Other liabilities —
(27,866 )
Derivatives not designated as hedges:

Pay-fixed interest rate swaps 3.77% Indexed to 1-month Libor 6.8 912,000
Other assets / Other liabilities 9,949
(20,383 )
Pay-variable interest rate swaps Indexed to 1-month Libor 3.77% 6.8 912,000
Other assets / Other liabilities 20,383
(9,949 )
Interest rate caps purchased, indexed to 1-month Libor
2.96% 2.3 189,057
Other assets 252
—
Interest rate caps sold, indexed to 1-month Libor 2.96% 2.3 189,057
Other liabilities —
(252 )
$ 4,217,114
$ 50,232
$ (61,562 )

The following table provides information about the amount of ~~loss~~gain (loss) related to derivatives designated as cash flow hedges reclassified from AOCI into interest expense for the periods indicated ~~(dollars in~~(in thousands):

Amount of Loss Reclassified from AOCI on Derivatives
Three Months Ended September 30, Nine Months Ended September 30,
Derivatives in Cash Flow Hedging Relationships 2017 2016 2017 2016 Location of Loss Reclassified from AOCI into Income
Interest rate contracts $ (2,001 ) $ (3,741 ) $ (7,463 ) $ (13,050 ) Interest expense on borrowings


	Three Months Ended June 30,				Six Months Ended June 30,				Location of Loss Reclassified from AOCI into Income
	2021		2020		2021		2020
Interest rate contracts	$	(14,882)	$	(10,009)	$	(29,857)	$	(14,565)	Interest expense on borrowings

During the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, no derivative positions designated as cash flow hedges were discontinued and none of the gains and losses reported in AOCI were reclassified into earnings as a result of the discontinuance of cash flow hedges or because of the early extinguishment of debt. As of ~~September~~June 30, ~~2017,~~2021, the amount of net loss expected to be reclassified from AOCI into earnings during the next twelve months was ~~$6.2~~$38.9 million.

The following table provides information about the amount of gain (loss) related to derivatives designated as fair value hedges recognized in earnings for the periods indicated (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,				Location of Gain (Loss) in Consolidated Statements of Income
	2021		2020		2021		2020
Fair value adjustment on derivatives	$	(669)	$	8	$	(1,496)	$	4,028	Interest expense on borrowings
Fair value adjustment on hedged items	670		(164)		1,495		(4,072)		Interest expense on borrowings
Gain (loss) recognized on fair value hedges (ineffective portion)	$	1	$	(156)	$	(1)	$	(44)

Table of Contents

BANKUNITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

June 30, 2021

The following table provides information about the hedged items related to derivatives designated as fair value hedges at the dates indicated (in thousands):


	June 30, 2021		December 31, 2020		Location in Consolidated Balance Sheets
Contractual balance outstanding of hedged item	$	200,000	$	250,000	FHLB advances
Cumulative fair value hedging adjustments	$	505	$	1,999	FHLB advances

Some of the Company’s ISDA master agreements with financial institution counterparties contain provisions that permit either counterparty to terminate the agreements and require settlement in the event that regulatory capital ratios fall below certain designated thresholds, upon the initiation of other defined regulatory actions or upon suspension or withdrawal of the Bank’s credit rating. Currently, there are no circumstances that would trigger these provisions of the agreements.

~~Table of Contents~~

~~BANKUNITED, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED~~

~~September 30, 2017~~

The Company does not offset assets and liabilities under master netting agreements for financial reporting purposes. Information on interest rate swaps subject to these agreements is as follows at the dates indicated (in thousands):


	June 30, 2021

			Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet
	Gross Amounts Recognized						Derivative Instruments		Collateral Pledged		Net Amount
Derivative assets	$	1,413	$	0	$	1,413	$	(1,363)	$	0	$	50
Derivative liabilities	(29,631)		0		(29,631)		1,363		28,220		(48)
	$	(28,218)	$	0	$	(28,218)	$	0	$	28,220	$	2

September 30, 2017

Gross Amounts Offset in Balance
Sheet
Net Amounts Presented in
Balance Sheet
Gross Amounts Not Offset in
Balance Sheet

Gross Amounts
Recognized

Derivative
Instruments

Collateral
Pledged

Net Amount

Derivative assets $ 8,686
$ —
$ 8,686
$ (6,814 ) $ (1,539 ) $ 333
Derivative liabilities (18,570 ) —
(18,570 ) 6,814
11,756
—
$ (9,884 ) $ —
$ (9,884 ) $ —
$ 10,217
$ 333


	December 31, 2016																					December 31, 2020
				Gross Amounts Offset in Balance Sheet			Net Amounts Presented in Balance Sheet			Gross Amounts Not Offset in Balance Sheet
	Gross Amounts Recognized					Derivative Instruments				Collateral Pledged				Net Amount										Gross Amounts Offset in Balance Sheet					Net Amounts Presented in Balance Sheet				Gross Amounts Not Offset in Balance Sheet
																										Gross Amounts Recognized											Derivative Instruments				Collateral Pledged				Net Amount
Derivative assets	$	29,849		$	—			$	29,849		$	(27,485	)		$	—		$	2,364		Derivative assets		$		0				$	0			$	0			$	0			$	0			$	0
Derivative liabilities	(51,362		)	—			(51,362		)	27,485				23,796			(81		)	Derivative liabilities		(44,490)					0				(44,490)				0				44,332				(158)
	$	(21,513	)	$	—		$	(21,513	)	$	—			$	23,796		$	2,283				$	(44,490)				$	0			$	(44,490)			$	0			$	44,332			$	(158)


	Six Months Ended June 30,
	2021						2020
	Average Balance		Interest (1)		Yield/ Rate (1)(2)		Average Balance		Interest (1)		Yield/ Rate (1)(2)
Assets:
Interest earning assets:
Loans	$	23,271,410	$	414,761	3.58	%	$	23,192,374	$	455,799	3.94	%
Investment securities (3)	9,456,929		77,525		1.64	%	8,216,433		108,635		2.64	%
Other interest earning assets	1,222,456		3,200		0.53	%	706,238		6,628		1.89	%
Total interest earning assets	33,950,795		495,486		2.93	%	32,115,045		571,062		3.57	%
Allowance for credit losses	(234,686)						(196,619)
Non-interest earning assets	1,728,449						1,863,074
Total assets	$	35,444,558					$	33,781,500
Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits	$	3,006,760	$	5,368	0.36	%	$	2,311,086	$	11,681	1.02	%
Savings and money market deposits	13,169,195		23,434		0.36	%	10,431,256		55,203		1.06	%
Time deposits	3,853,057		10,890		0.57	%	7,303,083		66,125		1.82	%
Total interest bearing deposits	20,029,012		39,692		0.40	%	20,045,425		133,009		1.33	%
Federal funds purchased	3,978		2		0.10	%	106,951		399		0.75	%
FHLB and PPPLF borrowings	2,972,770		34,480		2.34	%	4,688,102		46,138		1.98	%
Notes and other borrowings	722,028		18,505		5.13	%	461,188		11,458		4.97	%
Total interest bearing liabilities	23,727,788		92,679		0.79	%	25,301,666		191,004		1.52	%
Non-interest bearing demand deposits	7,829,422						4,840,781
Other non-interest bearing liabilities	799,297						784,770
Total liabilities	32,356,507						30,927,217
Stockholders' equity	3,088,051						2,854,283
Total liabilities and stockholders' equity	$	35,444,558					$	33,781,500
Net interest income			$	402,807					$	380,058
Interest rate spread					2.14	%					2.05	%
Net interest margin					2.38	%					2.37	%


~~(2)~~			~~Annualized.~~


~~(3)~~	~~At fair value except for securities held to maturity.~~

Nine Months Ended September 30,
2017 2016
Average
Balance
Interest ⁽¹⁾

Yield/
Rate ⁽¹⁾⁽²⁾
Average
Balance
Interest ⁽¹⁾

Yield/
Rate ⁽¹⁾⁽²⁾
Assets:
Interest earning assets:

Non-covered loans $ 19,169,479
$ 535,926
3.73 % $ 16,876,786
$ 452,525
3.58 %
Covered loans 560,934
225,194
53.54 % 746,709
226,659
40.48 %
Total loans 19,730,413
761,120
5.15 % 17,623,495
679,184
5.14 %
Investment securities ⁽³⁾
6,569,553
151,337
3.07 % 5,551,249
117,478
2.82 %
Other interest earning assets 557,623
10,606
2.54 % 531,245
8,850
2.22 %
Total interest earning assets 26,857,589
923,063
4.59 % 23,705,989
805,512
4.53 %
Allowance for loan and lease losses (157,015 ) (133,280 )
Non-interest earning assets 1,754,499
1,946,846

Total assets $ 28,455,073
$ 25,519,555

Liabilities and Stockholders' Equity:
Interest bearing liabilities:
Interest bearing demand deposits $ 1,564,229
8,913
0.76 % $ 1,341,218
6,140
0.61 %
Savings and money market deposits 9,557,907
55,741
0.78 % 8,203,676
37,285
0.61 %
Time deposits 5,988,433
55,507
1.24 % 5,177,191
43,002
1.11 %
Total interest bearing deposits 17,110,569
120,161
0.94 % 14,722,085
86,427
0.78 %
FHLB advances 4,889,578
44,262
1.21 % 4,698,492
35,972
1.02 %
Notes and other borrowings 402,821
15,947
5.28 % 403,213
15,967
5.28 %
Total interest bearing liabilities 22,402,968
180,370
1.08 % 19,823,790
138,366
0.93 %
Non-interest bearing demand deposits 3,034,682
2,944,861

Other non-interest bearing liabilities 443,430
431,921

Total liabilities 25,881,080
23,200,572

Stockholders' equity 2,573,993
2,318,983

Total liabilities and stockholders' equity $ 28,455,073
$ 25,519,555

Net interest income $ 742,693
$ 667,146

Interest rate spread 3.51 % 3.60 %
Net interest margin 3.69 % 3.75 %
(1)On a tax-equivalent basis where applicable. The tax-equivalent adjustment for tax-exempt loans was $6.9 million and $7.5 million for the six months ended June 30, 2021 and 2020, respectively. The tax-equivalent adjustment for tax-exempt investment securities was $1.4 million and $1.6 million for the six months ended June 30, 2021 and 2020, respectively.

(2)Annualized.

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


~~(1)~~	On a tax-equivalent basis. The tax-equivalent adjustment for tax-exempt loans was $21.5 million and $16.7 million, and the tax-equivalent adjustment for tax-exempt investment securities was $9.7 million and $7.5 million, for the nine months ended September 30, 2017 and 2016, respectively.


~~(2)~~	~~Annualized.~~


~~(3)~~	~~At fair value except for securities held to maturity.~~

The amount of tax-equivalent net interest income has exhibited an increasing trend over the three and six month periods presented above. Both average yields on interest earning assets and average rates paid on interest bearing liabilities have been declining, reflecting the macro interest rate environment and ongoing initiatives to reduce deposit costs and improve the mix of deposits. Notably, average interest earning assets have consistently increased, while average interest bearing liabilities have declined, contributing to the increasing trend in net interest income.

Three months ended ~~September~~June 30, ~~2017~~2021 compared to the immediately preceding three months ended ~~September~~March 31, 2021

Net interest income, calculated on a tax-equivalent basis, was $202.4 million for the three months ended June 30, ~~2016~~2021 compared to $200.4 million for the three months ended March 31, 2021, an increase of $2.0 million. Tax-equivalent interest income and interest expense decreased by $3.7 million and $5.7 million, respectively. The decrease in interest income resulted primarily from declines in average loans and in the yield on investment securities. Declines in interest expense reflected decreases in the rate paid on interest bearing deposits and in average interest bearing liabilities, as average non-interest bearing demand deposits continued to grow.

The net interest margin, calculated on a tax-equivalent basis, was 2.37% for the three months ended June 30, 2021, compared to 2.39% for the three months ended March 31, 2021. The net interest margin for the three months ended June 30, 2021 was negatively impacted by elevated levels of liquidity, reflected in higher levels of cash as well as deployment of liquidity into the investment portfolio as loan production lagged deposit growth.

Offsetting factors impacting the net interest margin for the three months ended June 30, 2021 compared to the immediately preceding quarter ended March 31, 2021 included:

•The average rate paid on interest bearing deposits decreased to 0.35% for the three months ended June 30, 2021, from 0.45% for the three months ended March 31, 2021. This decline reflected continued initiatives taken to lower rates paid on deposits including the re-pricing of term deposits.

•The tax-equivalent yield on investment securities decreased to 1.56% for the three months ended June 30, 2021 from 1.73% for the three months ended March 31, 2021. This decrease resulted from the impact of purchases of lower-yielding securities in the current rate environment, coupled with amortization, maturities and prepayment of securities purchased in a higher rate environment. Accounting adjustments related to faster prepayment speeds of securities purchased at a premium negatively impacted the yield on investment securities for the quarter ended June 30, 2021 by approximately 0.10%.

•The tax-equivalent yield on loans increased to 3.59% for the three months ended June 30, 2021, from 3.58% for the three months ended March 31, 2021. Accelerated amortization of origination fees on PPP loans that were partially or fully forgiven during the quarter impacted the yield on loans by approximately 0.11% for the three months ended June 30, 2021, compared to 0.06% for the three months ended March 31, 2021. Factoring out the impact of accelerated amortization of PPP origination fees, the yield on loans for the three months ended June 30, 2021 decreased by 0.04% compared to the immediately preceding quarter.

•Average interest bearing liabilities declined by $282 million quarter-over-quarter and average non-interest bearing demand deposits increased by $673 million, positively impacting the net interest margin.

Three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020

Net interest income, calculated on a tax-equivalent basis, was ~~$252.0~~$202.4 million for the three months ended ~~September~~June 30, ~~2017~~2021, compared to ~~$230.5~~$194.8 million for the three months ended ~~September~~June 30, ~~2016,~~2020, an increase of ~~$21.5~~$7.6 million. ~~The increase in net interest income was comprised of an increase in tax-equivalent interest income of $41.5 million, offset by an increase in interest expense of $19.9 million.~~

The increase in tax-equivalent interest income was comprised primarily of a $27.9 million increase in interest income from loans and a $12.8 million increase in interest income from investment securities.

Increased interest income from loans was attributable to a $1.7 billion increase in the average balance outstanding and a 0.12% increase in the tax-equivalent yield to 5.15% for the three months ended September 30, 2017 from 5.03% for the three months ended September 30, 2016. Factors contributing to the increase in the yield on loans included:

The tax-equivalent yield on non-covered loans was 3.79% for the three months ended September 30, 2017 compared to 3.56% for the three months ended September 30, 2016. The most significant factor contributing to the increased yield on non-covered loans was increases in market interest rates.

Interest income on covered loans totaled $73.5 million and $74.5 million for the three months ended September 30, 2017 and 2016, respectively. The tax-equivalent yield on those loans increased to 56.70% for the three months ended September 30, 2017 from 42.50% for the three months ended September 30, 2016. The increase in the yield on covered loans resulted primarily from improvements in expected cash flows for ACI loans.

The impact on the overall yield on loans of increased yields on both covered and non-covered loans considered individually was somewhat offset by the continued increase in non-covered loans, with yields lower than those on covered loans, as a percentage of total loans.

The average balance of investment securities increased by $1.1 billion for the three months ended September 30, 2017 from the three months ended September 30, 2016 while the tax-equivalent yield increased to 3.14% from 2.87%. The most significant factor contributing to the increase in the tax-equivalent yield were increases in coupon rates on floating-rate securities.

The components of the increase in interest expense for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016 were a $15.0 million increase in interest expense on deposits and a $5.0 million increase in interest expense on FHLB advances.

The increase in interest expense on deposits was attributable to an increase of $2.5 billion in average interest bearing deposits and an increase in the average cost of interest bearing deposits of 0.22% to 1.02% for the three months ended September 30, 2017 from 0.80% for the three months ended September 30, 2016. These cost increases were generally driven by growth of deposits in competitive markets and a rising market interest rate environment.

The increase in interest expense on FHLB advances reflected an increase in the average cost of advances of 0.45% to 1.37% for the three months ended September 30, 2017 from 0.92% for the three months ended September 30, 2016. The increase in cost was driven by increased market rates and to a lesser extent, an extension of maturities through interest rate swaps.

The net interest margin, calculated on a tax-equivalent basis, for the three months ended September 30, 2017 was 3.62% as compared to 3.69% for the three months ended September 30, 2016. The interest rate spread decreased to 3.43% for the three months ended September 30, 2017 from 3.53% for the three months ended September 30, 2016. The declines in net interest margin and interest rate spread resulted primarily from the cost of interest-bearing liabilities increasing by more than the yield on interest earning assets. This difference was driven primarily by the decline in covered loans as a percentage of total loans. Future trends in the net interest margin will be impacted by changes in market interest rates, including changes in the shape of the yield curve, by the mix of interest earning assets, including the decline in covered loans as a percentage of total loans, and by the Company's ability to manage the cost of funds while growing deposits in competitive markets.

~~Nine months ended September 30, 2017~~ ~~compared to nine months ended September 30, 2016~~

Net interest income, calculated on a tax-equivalent basis, was ~~$742.7~~$402.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021, compared to ~~$667.1~~$380.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2020, an increase ~~of $75.5~~$22.7 million. The ~~increase~~changes in net interest income ~~was~~were comprised of ~~an increase~~decreases in tax-equivalent interest income ~~of $117.6 million, offset by an increase in~~and interest expense of ~~$42.0 million.~~$26.4 million and $75.6 million and decreases of $34.0 million and $98.3 million for the three and six months ended June 30, 2021, respectively, compared to the three and six months ended June 30, 2020.

~~The increase~~Decreases in tax-equivalent interest income ~~was comprised primarily~~for the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020 resulted from the impact on asset portfolio yields of ~~an $81.9 million increase~~declines in market interest ~~income from loans~~rates in early 2020, leading to runoff of assets originated in a higher rate environment and ~~a $33.9 million increase~~origination of assets at lower prevailing rates. These declines in ~~interest income from investment securities.~~

~~Increased interest income from loans was attributable to a $2.1 billion increase~~yields were partially offset by increases in the average balance ~~and a 0.01% increase in the tax-equivalent yield to 5.15%~~of investment securities. Average loans increased marginally for the ~~nine~~six months ended ~~September~~June 30, ~~2017 from 5.14%~~2021 compared to the six months ended June 30, 2020, but declined for the ~~nine months ended September 30, 2016. Offsetting factors contributing to the relatively steady yield on loans included:~~

Although the yield on non-covered loans increased to 3.73% for the nine months ended September 30, 2017 from 3.58% for the nine months ended September 30, 2016, lower-yielding non-covered loans comprised a greater percentage of the portfolio for the nine months ended September 30, 2017 than for the corresponding period in 2016. Non-covered loans represented 97.2% of the average balance of loans outstanding for the nine months ended September 30, 2017 compared to 95.8% for the nine months ended September 30, 2016.

Interest income on covered loans totaled $225.2 million and $226.7 million for the nine months ended September 30, 2017 and 2016, respectively. The tax-equivalent yield on those loans increased to 53.54% for the nine months ended September 30, 2017 from 40.48% for the nine months ended September 30, 2016.

The average balance of investment securities increased by $1.0 billion for the nine months ended September 30, 2017 from the nine months ended September 30, 2016 while the tax-equivalent yield increased to 3.07% from 2.82%.

~~The components of the increase~~comparative three month periods. Declines in interest expense ~~for~~also reflected the ~~nine months ended September 30, 2017 as compared to~~impact of decreases in market interest rates, our strategy focused on lowering the ~~nine months ended September 30, 2016 were a $33.7 million increase in interest expense on~~cost of deposits and ~~an $8.3 million increase in interest expense on FHLB advances.~~

~~The increase in interest expense on deposits was attributable to an increase of $2.4 billion~~improving the deposit mix and declines in average interest bearing deposits and an increase in the average cost of interest bearing deposits of 0.16% to 0.94% for the nine months ended September 30, 2017 from 0.78% for the nine months ended September 30, 2016. The increase in interest expense on FHLB advances was primarily a result of an increase in the average cost of advances of 0.19% to 1.21% for the nine months ended September 30, 2017 from 1.02% for the nine months ended September 30, 2016.liabilities.

~~Factors contributing to the changes in yields and costs for the nine month periods were generally consistent with those for the three month periods discussed above.~~

The net interest margin, calculated on a ~~tax-equivalent~~tax-equivalent basis, was 2.37%for the ~~nine~~three months ended ~~September~~June 30, ~~2017 was 3.69% as~~2021, compared to ~~3.75%~~2.39% for the ~~nine~~three months ended ~~September~~June 30, ~~2016.~~ 2020. The ~~interest rate spread decreased to 3.51% for the nine months ended September 30, 2017 from 3.60% for the nine months ended September 30, 2016. The declines in~~ net interest margin, calculated on a tax-equivalent basis, was 2.38%for the six months ended June 30, 2021, compared to 2.37% for the six months ended June 30, 2020. The reduction in cost of interest bearing liabilities outpaced the decline in the yield on interest earning assets for both the three and six months ended June 30, 2021 compared to the comparable periods in 2020.

Offsetting factors impacting the net interest margin for the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020 included:

•The tax-equivalent yield on loans decreased to 3.59% and 3.58% for the three and six months ended June 30, 2021, from 3.71% and 3.94% for the three and six months ended June 30, 2020. Accelerated amortization of origination fees on PPP loans that were partially or fully forgiven positively impacted the yield on loans by approximately 0.11% and 0.10% for the three and six months ended June 30, 2021, respectively.

•The tax-equivalent yield on investment securities declined to 1.56% and 1.64% from 2.48% and 2.64% for the three and six months ended June 30, 2021 and the three and six months ended June 30, 2020, respectively. Accounting adjustments related to faster prepayment speeds of securities purchased at a premium negatively impacted the yield on investment securities for the quarter ended June 30, 2021 by approximately 0.07% when compared to the three months ended June 30, 2020.

•The average rate ~~spread resulted primarily~~paid on interest bearing deposits decreased to 0.35% and 0.40% for the three and six months ended June 30, 2021, from 1.01% and 1.33% for the ~~factors discussed above.~~three and six months ended June 30, 2020. This decrease reflected

declines in market interest rates and continued execution of initiatives taken to lower rates paid on deposits, including the re-pricing of term deposits.

•Average interest bearing liabilities declined by $2.0 billion and $1.6 billion, respectively for the three and six months ended June 30, 2021, compared to the three and six months ended June 30, 2020. Average non-interest bearing demand deposits increased by $2.9 billion and $3.0 billion for those same comparative periods. These changes positively impacted the net interest margin.

Provision for ~~Loan~~Credit Losses

The provision for ~~loan~~credit losses is ~~the amount of expense that, based on our judgment, is~~a charge to earnings required to maintain the ~~ALLL~~ACL at ~~an adequate~~a level ~~to absorb probable~~consistent with management’s estimate of expected credit losses ~~inherent in the loan portfolio~~on financial assets carried at amortized cost at the balance sheet ~~date~~date. The amount of the provision is impacted by changes in current economic conditions as well as in management's reasonable and ~~that,~~supportable economic forecast, loan originations and runoff, changes in ~~management’s judgment, is appropriate under GAAP.~~ portfolio mix, risk rating migration and portfolio seasoning, changes in specific reserves, changes in expected prepayment speeds and other assumptions. The provision for credit losses also includes amounts related to off-balance sheet credit exposures and may include amounts related to accrued interest receivable and AFS debt securities.

The following table presents the components of the provision for credit losses for the periods indicated (in thousands):


	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
Amount related to funded portion of loans	$	(27,663)	$	(53,969)
Amount related to off-balance sheet credit exposures	129		(919)
Amount related to accrued interest receivable	—		(271)
Amount related to AFS debt securities	—		(364)
Total recovery of credit losses	$	(27,534)	$	(55,523)

The recovery of credit losses for the three and six months ended June 30, 2021 was largely driven by improvements in current and forecasted economic conditions. For the three and six months ended June 30, 2020, the Company recorded a provision for credit losses of $25.4 million and $150.8 million, respectively. The provision for credit losses for the three and six months ended June 30, 2020 was impacted by deteriorating current and forecasted economic conditions related to the onset of the COVID-19 pandemic.

The evolving COVID-19 situation and its actual and forecasted impact on economic conditions have led and may continue to lead to volatility in the provision for credit losses.

The determination of the amount of the ~~ALLL~~ACL is complex and involves a high degree of judgment and subjectivity. Our determination of the amount of the allowance and corresponding provision for loan losses considers ongoing evaluations of the credit quality of and level of credit risk inherent in various segments of the loan portfolio and of individually significant credits, levels of non-performing loans and charge-offs, historical and statistical trends and economic and other relevant factors. See “Analysis of the Allowance for ~~Loan and Lease~~Credit Losses” below for more information about how we determine the appropriate level of the ~~allowance.~~ACL.

~~The provision for loan losses for the quarter and~~ ~~nine months ended September 30, 2017~~ included $5.4 million related to the impact of Hurricanes Irma and Harvey. The amount of this provision was determined based on our evaluation of an intensive analysis conducted by our credit teams of the individual loans potentially impacted by these storms, including but not limited to direct contact with borrowers, preliminary assessments of the extent of damage to collateral and impacts on borrowers’ business operations and consideration of the impact of insurance coverage. The amount of the provision related to the impact of these storms is subject to change as individual situations evolve.

~~For the three months ended September 30, 2017 and 2016, we recorded provisions for loan losses of $37.6 million and $24.9 million, respectively, related to non-covered loans. For the~~ ~~nine months ended September 30, 2017~~ ~~and 2016, we recorded provisions for loan losses of~~ ~~$60.9 million~~ ~~and~~ ~~$43.6 million~~, respectively, related to non-covered loans. The amount of the provision is impacted by loan growth, portfolio mix, historical loss rates, the level of charge-offs and specific reserves for impaired loans, and management's evaluation of qualitative factors in the determination of general reserves.

The most significant reason for the increase in the provision for loan losses related to non-covered loans for the quarter ended September 30, 2017 compared to the quarter ended September 30, 2016 was an increase of $28.9 million in the provision related to taxi medallion loans. The provision related to taxi medallion loans totaled $32.7 million for the quarter ended September 30, 2017, compared to $3.9 million for the quarter ended September 30, 2016. A $5.4 million provision recognized in the quarter ended September 30, 2017 related to the impact of hurricanes was more than offset by (i) a net decrease in the relative impact on the provision of changes in quantitative and qualitative loss factors, (ii) the impact of lower loan growth, and (iii) a decrease in provisions for criticized and classified loans.

Factors contributing to the increase in the provision for loan losses related to non-covered loans for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 were generally consistent with those for the three month periods discussed above.

For the three months ended September 30, 2017 and 2016, we recorded provisions for (recovery of) loan losses of $0.3 million and $(0.4) million, respectively, related to covered loans. For the nine months ended September 30, 2017 and 2016, we recorded provisions for (recovery of) loan losses of $2.7 million and $(1.1) million, respectively, related to covered loans. The provision for the nine months ended September 30, 2017 related primarily to impairment recognized on an ACI HELOC pool. As discussed below in the section entitled "Non-interest income," the impact on our results of operations of any provision for (recovery of) loan losses on covered loans is significantly mitigated by the corresponding impact on the FDIC indemnification asset, recorded in non-interest income.

Non-Interest Income

~~The Company reported non-interest income of $53.3 million and $25.1 million for the three months ended September 30, 2017 and 2016, respectively. Non-interest income was~~ ~~$111.4 million~~ ~~and~~ ~~$77.1 million~~ ~~for the~~ ~~nine months ended September 30, 2017~~ and 2016, respectively. A significant portion of our non-interest income has historically related to transactions in the covered assets. We have broken out the significant categories of non-interest income that relate to covered assets in the table below, to assist in the comparison of the amount and composition of our non-interest income with that of other financial institutions.

The following table presents a comparison of the categories of non-interest income for the periods indicated (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Deposit service charges and fees	$	5,417	$	3,701	$	10,317	$	7,887
Gain on sale of loans:

Guaranteed portions of SBA loans	96		375		541		1,569
GNMA early buyout loans	2,138		3,951		3,447		6,206
Other	—		—		—		17
Gain on sale of loans, net	2,234		4,326		3,988		7,792
Gain on investment securities:
Net realized gains on sale of securities AFS	2,841		5,723		6,808		7,253
Net unrealized gains (losses) on marketable equity securities	1,314		1,113		(288)		(3,870)
Gain on investment securities, net	4,155		6,836		6,520		3,383
Lease financing	13,522		16,150		26,010		31,631
Other non-interest income	7,429		7,338		16,218		10,956
	$	32,757	$	38,351	$	63,053	$	61,649

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Income from resolution of covered assets, net $ 6,400
$ 8,883
$ 22,066
$ 26,426
Loss on sale of covered loans, net —
(10,033 ) (1,582 ) (14,895 )
Net gain (loss) on FDIC indemnification (4,838 ) 993
(14,174 ) (9,410 )
Other 237
371
957
623
Non-interest income related to the covered assets 1,799
214
7,267
2,744
Service charges and fees 4,938
5,171
15,554
14,529
Gain on sale of non-covered loans 2,447
2,086
8,183
7,535
Gain on investment securities available for sale, net 26,931
3,008
29,194
10,065
Lease financing 13,287
11,188
40,067
32,762
Other non-interest income 3,924
3,408
11,098
9,495
$ 53,326
$ 25,075
$ 111,363
$ 77,130

~~Non-interest~~The increase in deposit service charges for the three and six months ended June 31, 2021 compared to 2020 resulted primarily from higher treasury management fee income, related to ~~transactions in thecovered assets~~our BankUnited 2.0 initiatives.

The ~~consolidated financial statements reflect~~decline in gain on sale of GNMA early buyout loans for the ~~impact of gains or losses arising from transactions in~~three and six months ended June 30, 2021 compared to the ~~covered assets. The balance~~comparable period of the ~~FDIC indemnification asset is reduced or increased as a result of decreases or increases in cash flows expected to be received from the FDIC~~prior year related to ~~these~~lower levels of re-pooling activity. The decrease in gains or losses. When these transaction gains or losses are recorded, we also record an offsetting amount in the consolidated statement of income line item “Net gain (loss) on FDIC indemnification.” This line item includes the significantly mitigating impact of FDIC indemnification related to the following types of transactions in covered assets:

~~gains or losses from the resolution of covered assets;~~

~~provisions for (recoveries of) losses on covered loans;~~

~~gains or losses~~ on the sale of ~~covered loans; and~~

~~gains or losses on covered OREO.~~

~~See Note 5 to the consolidated financial statements for further details about the components~~guaranteed portions of these gains and losses associated with covered assets, along with the related additions to or reductions in the amounts recoverable from the FDIC under the Loss Sharing Agreements, as reflected in the consolidated statements of incomeSBA loans for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016.~~

~~Covered~~2021 compared to 2020 was a result of declining origination volume of SBA loans may be resolved through prepayment, short sale of the underlying collateral, foreclosure, sale of the loans or charge-off. For loans resolved through prepayment, short sale or foreclosure, the difference between consideration received in resolution of the loans and the carrying value of the loans is recorded in the consolidated statement of income line item “Income

from resolution of covered assets, net.” Both gains and losses on individual resolutions are included in this line item. Losses from the resolution of covered loans increase the amount recoverable from the FDIC under the Loss Sharing Agreements. Gains from the resolution of covered loans reduce the amount recoverable from the FDIC under the Loss Sharing Agreements. These additions to or reductions in amounts recoverable from the FDIC relatedas resources were re-directed to the resolution of covered loans are recorded in non-interest income in the line item “Net gain (loss) on FDIC indemnification” and reflected as corresponding increases or decreases in the FDIC indemnification asset. The amount of income or loss recorded in any period will be impacted by the amount of covered loans resolved, the amount of consideration received, and our ability to accurately project cash flows from ACI loans in future periods.PPP.

The ~~following table provides further detail of the components of income from resolution of covered assets, net, for the periods indicated (in thousands):~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Payments in full $ 6,423
$ 9,371
$ 22,201
$ 26,790
Other (23 ) (488 ) (135 ) (364 )
Income from resolution of covered assets, net $ 6,400
$ 8,883
$ 22,066
$ 26,426

Under the terms of the Purchase and Assumption Agreement with the FDIC, the Bank may sell up to 2.5% of the covered loans based on UPB at the date of the FSB Acquisition, or approximately $280 million, on an annual basis without prior consent of the FDIC. Any losses incurred from such loan sales are covered under the Single Family Shared-Loss Agreement. Any loan sale in excess of this stipulated annual threshold requires approval from the FDIC to be eligible for loss share coverage. However, if the Bank seeks to sell covered loans in excess of the 2.5% threshold in the nine months prior to the stated termination date of loss share coverage, May 21, 2019, and the FDIC does not consent, the Single Family Shared-Loss Agreement will be extended for two additional years with respect to the loans requested to be included in such sales. The Bank will then have the right to sell all or any portion of such loans without FDIC consent at any time within the nine months prior to the extended termination date, and any losses incurred will be covered under the Single Family Shared-Loss Agreement. This final sale mechanism, if exercised, ensures no residual credit risk in our covered loan portfolio that would otherwise arise from credit losses occurring after the termination date of the Single Family Shared-Loss Agreement.

~~The following table summarizes the gain (loss) recorded on the sale of covered residential loans and the impact of related FDIC indemnification for the periods indicated (in thousands):~~

Three Months Ended September 30, Nine Months Ended September 30,
2016 2017 2016
Loss on sale of covered loans $ (10,033 ) $ (1,582 ) $ (14,895 )
Net gain on FDIC indemnification 8,026
1,266
11,958
Net impact on pre-tax earnings $ (2,007 ) $ (316 ) $ (2,937 )

The Bank did not sell covered residential loans in the three months ended September 30, 2017, due to the potential impact of Hurricane Irma on the market for these loans, the collateral for many of which is located in Florida.

Pricing received on the sale of covered loans may vary based on (i) market conditions, including the interest rate environment, the amount of capital seeking investment and the secondary supply of loans with a particular performance history or collateral type, (ii) the type and quality of collateral, (iii) the performance history of loans included in the sale and (iv) whether or not the loans have been modified. We anticipate that we will continue to exercise our right to sell covered residential loans on a quarterly basis in the future.

~~Other components of non-interest income~~

~~Period over period increases~~decrease in income from lease financing ~~corresponded to the growth in the portfolio of equipment under operating lease.~~

~~Gains on sale of non-covered loans~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016 related primarily~~2021 compared to ~~sales of loans by SBF.~~

Gain on sale of investment securities available for sale, net totaled $26.9 million for the quarter ended September 30, 2017. Substantially all of these gains resulted from the sale of securities formerly covered under the Commercial Shared-Loss Agreement and originally acquired at significant discounts in the FSB Acquisition. Other gains on investment securities available for sale for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 was primarily attributed to the increase in operating lease equipment off-lease and ~~2016 related~~re-leasing of assets at lower rates.

The most significant factor leading to ~~sales of securities~~the increase in other non-interest income for the ~~normal course of managing liquidity, portfolio duration and yield.~~six months ended June 30, 2021 compared to 2020 was increased revenue from our customer derivative program.

Non-Interest Expense

The following table presents the components of non-interest expense for the periods indicated (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Employee compensation and benefits $ 58,327
$ 55,162
$ 178,386
$ 166,374
Occupancy and equipment 18,829
18,867
56,689
57,199
Amortization of FDIC indemnification asset 45,225
38,957
135,351
116,711
Deposit insurance expense 5,764
4,943
16,827
12,866
Professional fees 2,748
3,884
12,573
10,119
Telecommunications and data processing 3,452
3,746
10,481
10,800
Depreciation of equipment under operating lease 8,905
6,855
25,655
20,004
Other non-interest expense 13,455
15,590
37,735
40,151
$ 156,705
$ 148,004
$ 473,697
$ 434,224

~~Annualized non-interest expense as a percentage of average assets was 2.1% and 2.2% for the three and nine months ended September 30, 2017, respectively, and 2.2% and 2.3% for the three and~~ ~~nine months ended September 30, 2016~~, respectively. Excluding amortization of the FDIC indemnification asset, non-interest expense as a percentage of average assets was 1.5% and 1.6% for the three and nine months ended September 30, 2017, respectively, and 1.6% and 1.7% for the three and ~~nine months ended September 30, 2016, respectively. The more significant changes in the components of non-interest expense are discussed below.~~


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Employee compensation and benefits	$	56,459	$	48,877	$	115,747	$	107,764
Occupancy and equipment	11,492		11,901		23,367		24,270
Deposit insurance expense	4,222		4,806		11,672		9,209
Professional fees	2,139		3,131		4,051		6,335
Technology and telecommunications	16,851		14,025		32,592		26,621
Depreciation of operating lease equipment	12,834		12,219		25,051		24,822

Other non-interest expense	14,455		11,411		29,193		26,217
Total non-interest expense	$	118,452	$	106,370	$	241,673	$	225,238

Employee compensation and benefits

~~As is typical for financial institutions, employee compensation and benefits represents the single largest component of recurring non-interest expense.~~ Employee compensation and benefits increased by $7.6 million and $8.0 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 increased by $3.2 million and $12.0 million~~2021, respectively compared to the ~~corresponding~~comparable periods ~~in 2016.~~ of 2020, primarily due to higher variable compensation accruals related to improved overall operating results for 2021 as well as the impact of a higher stock price on expense related to liability classified share awards.

Technology and telecommunications

The increases ~~for the three~~in technology and ~~nine months ended September 30, 2017 primarily reflected increased headcount~~telecommunications are reflective of investments in digital, payments and ~~general increases in compensation levels.~~

~~Amortization of FDIC indemnification asset~~

~~Amortization of FDIC indemnification asset totaled $45.2 million~~data analytics capabilities and ~~$135.4 million, respectively, for the three and nine months ended September 30, 2017 compared to~~ ~~$39.0 million~~ ~~and~~ ~~$116.7 million, respectively, for the three and~~ ~~nine months ended September 30, 2016~~.

The FDIC indemnification asset was initially recorded at its estimated fair value, representing the present value of estimated future cash payments from the FDIC for probable losses on covered assets. As projected cash flows from the ACI loans have increased, the yield on the loans has increased accordingly and the estimated future cash payments from the FDIC have decreased. This change in estimated cash flows is recognized prospectively, consistent with the recognition of the increased cash flows from the ACI loans. As a result, the FDIC indemnification asset is being amortized to the amount of the estimated future cash flows. For the three and nine months ended September 30, 2017, the average rate at which the FDIC indemnification asset was amortized was 46.62% and 41.19%, respectively, compared to ~~25.36%~~ ~~and~~ ~~23.48%, respectively, during the comparable periods in~~ ~~2016~~.

~~The rate of amortization will increase if estimated future cash payments from the FDIC decrease. The amount of amortization is impacted by both the change~~ in the ~~amortization rate and the decrease in the average balance of the indemnification asset. As we continue~~infrastructure to ~~submit claims under the Loss Sharing Agreements and recognize periodic amortization, the balance of the indemnification asset will continue to decline.~~support cloud migration.

Income Taxes

See Note 5 to the consolidated financial statements for ~~a rollforward of the FDIC indemnification asset for the nine months ended September 30, 2017 and the year ended December 31, 2016. The entire balance of the FDIC indemnification asset relates~~information about income taxes.

to residential loans and OREO covered under the Single Family Shared-Loss Agreement. The following table presents the carrying value of the FDIC indemnification asset and the estimated future cash flows at the dates indicated (in thousands):

September 30, 2017 December 31, 2016
FDIC indemnification asset $ 349,617
$ 515,933
Less expected amortization (173,685 ) (245,350 )
Amount expected to be collected from the FDIC $ 175,932
$ 270,583

The amount of expected amortization reflects the impact of improvements in cash flows expected to be collected from the covered loans, as well as the impact of time value resulting from the discounting of the asset when it was initially established. This amount will be amortized to non-interest expense using the effective interest method over the period during which cash flows from the FDIC are expected to be collected, which is limited to the lesser of the contractual term of the Single Family Shared-Loss Agreement and the expected remaining life of the indemnified assets.

~~Deposit insurance expense~~

~~Deposit insurance expense increased $0.8 million and $4.0 million, respectively, for the three and nine months ended September 30, 2017 compared to the corresponding periods in~~ ~~2016. These increases primarily reflect the growth of the balance sheet, the large bank surcharge imposed by the FDIC, which began in the third quarter of~~ ~~2016, and increases in certain components of the Bank's assessment rate.~~

~~Depreciation of equipment under operating lease~~

Depreciation of equipment under operating lease increased by $2.1 million and $5.7 million, respectively, for the three and nine months ended September 30, 2017 compared to the corresponding periods in ~~2016. These increases generally correspond to the growth in the portfolio of equipment under operating lease.~~

~~Other non-interest expense~~

The most significant components of other non-interest expense are advertising and promotion, costs related to lending activities and deposit generation, OREO related expenses, insurance, travel and general office expense. Other non-interest expense for the three months ended September 30, 2017 includes $0.6 million related primarily to facilities damage and employee relocation and assistance due to the impact of Hurricane Irma. We do not expect future expenses related to facilities damage and employee relocation to be material to the Company.

~~Income Taxes~~

~~The Company’s effective income tax rate was 32.2% and 31.2% for the three and nine months ended September 30, 2017, respectively, compared to~~ ~~31.7%~~ ~~and~~ ~~33.2%~~ ~~for the three and~~ ~~nine months ended September 30, 2016~~, respectively. Significant components included in the reconciliation of the Company's effective income tax rate to the statutory federal tax rate of 35.0% included the effect of state income taxes and the impact of income not subject to federal tax for each of the periods presented. In addition, the effective income tax rate for the three and nine months ended September 30, 2017 reflected the impact of $0.3 million and $3.2 million, respectively, in excess tax benefits resulting from activity related to vesting of share-based awards and exercise of stock options.

Analysis of Financial Condition

Average interest-earning assets increased ~~$3.2~~$1.8 billion to ~~$26.9~~$34.0 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 from ~~$23.7~~$32.1 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020. This increase was driven by a ~~$2.1 billion increase in the average balance of outstanding loans and a $1.0~~$1.2 billion increase in the average balance of investment ~~securities. The~~securities and a $516 million increase in average loans reflected growth of $2.3 billion in average non-covered loans outstanding, partially offset by a $186 million decrease in the average balance of covered loans. The decrease in average non-interest earning assets period over period primarily reflected a decrease in the FDIC indemnification asset. Growth inother interest earning assets, ~~resolution of covered loans~~primarily cash and ~~declines in the amount of the FDIC indemnification asset are trends that are expected to continue.~~

cash equivalents. Average interest bearing liabilities ~~increased $2.6 billion to $22.4~~declined by $1.6 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2017 from $19.8 billion for~~2021 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016, due to increases of $2.4 billion in~~2020, while average ~~interest bearing deposits and $191 million in average FHLB advances. Average~~ non-interest bearing deposits increased by ~~$90 million. We expect growth in average deposits~~$3.0 billion to ~~continue, corresponding to anticipated growth in interest earning assets.~~$7.8 billion for the six months ended June 30, 2021.

~~Average stockholders' equity~~Cash and cash equivalents increased by ~~$255~~$498 million ~~due primarily~~ to ~~the retention~~$895 million at June 30, 2021, compared to $398 million at December 31, 2020 while investment securities grew by $1.1 billion and total loans declined by $981 million. Total deposits increased by $1.1 billion offset by a decrease of ~~earnings, but also reflecting proceeds from the exercise of stock options and an increase~~$622 million in ~~accumulated other comprehensive income.~~borrowings.

Investment Securities ~~Available for Sale~~

The following table shows the amortized cost and carrying value, which, with the exception of investment securities held to maturity, is fair value, of investment securities ~~available for sale as of~~at the dates ~~indicated (in thousands):~~indicated:



	June 30, 2021				December 31, 2020
	Amortized Cost		Carrying Value		Amortized Cost		Carrying Value
U.S. Treasury securities	$	158,977	$	156,637	$	79,919	$	80,851
U.S. Government agency and sponsored enterprise residential MBS	2,197,562		2,215,440		2,389,450		2,405,570
U.S. Government agency and sponsored enterprise commercial MBS	831,726		835,588		531,724		539,354

Private label residential MBS and CMOs	2,104,579		2,111,727		982,890		998,603
Private label commercial MBS(1)	2,579,963		2,594,024		2,514,271		2,526,354
Single family rental real estate-backed securities	608,269		617,445		636,069		650,888
Collateralized loan obligations	986,214		982,267		1,148,724		1,140,274
Non-mortgage asset-backed securities	172,791		176,506		246,597		253,261
State and municipal obligations	209,791		228,625		213,743		235,709
SBA securities	216,682		215,634		233,387		231,545

Investment securities held to maturity	10,000		10,000		10,000		10,000
	$	10,076,554	10,143,893		$	8,986,774	9,072,409
Marketable equity securities			88,142				104,274
			$	10,232,035			$	9,176,683

September 30, 2017 December 31, 2016

Amortized
Cost

Fair
Value

Amortized
Cost

Fair
Value
U.S. Treasury securities $ 24,969
$ 24,957
$ 4,999
$ 5,005
U.S. Government agency and sponsored enterprise residential MBS 2,332,616
2,348,687
1,513,028
1,527,242
U.S. Government agency and sponsored enterprise commercial MBS 139,966
139,220
126,754
124,586
Private label residential MBS and CMOs 507,381
527,858
334,167
375,098
Private label commercial MBS 1,140,465
1,153,601
1,180,386
1,187,624
Single family rental real estate-backed securities 566,635
572,948
858,339
861,251
Collateralized loan obligations 695,414
700,319
487,678
487,296
Non-mortgage asset-backed securities 80,255
82,637
187,660
186,736
Preferred stocks 60,716
70,716
76,180
88,203
State and municipal obligations 666,013
677,015
705,884
698,546
SBA securities 572,540
586,675
517,129
523,906
Other debt securities 4,056
8,839
3,999
8,091
$ 6,791,026
$ 6,893,472
$ 5,996,203
$ 6,073,584

(1)Amortized cost is net of ACL totaling $0.4 million at December 31, 2020.

Our investment strategy has focused on insuring adequate liquidity, ~~adding~~maintaining a suitable balance of high credit quality, ~~diversifying~~diverse assets, ~~to the consolidated balance sheet,~~ managing interest rate risk, and generating acceptable returns given our established risk parameters. We have sought to maintain liquidity by investing a significant portion of the portfolio in high quality liquid securities including U.S. Treasury ~~securities, SBA securities~~ and U.S. Government ~~agency MBS.~~Agency and sponsored enterprise securities. Investment grade municipal securities provide liquidity ~~along with higher~~and attractive tax-equivalent ~~yields at longer durations than the portfolio in general.~~yields. We have also invested in highly rated structured products, including private-label commercial and residential MBS, collateralized loan obligations, single family rental real estate-backed securities and non-mortgage asset-backed securities that, while somewhat less liquid, provide us with attractive yields. Relatively short effective portfolio duration helps mitigate interest rate ~~risk arising from~~risk. Based on the ~~currently low level of market interest rates. The~~Company’s assumptions, the estimated weighted average ~~expected~~ life of the investment portfolio as of ~~September~~June 30, ~~2017~~2021 was ~~4.9~~4.2 years and the effective duration of the investment portfolio as of June 30, 2021 was ~~1.7~~1.6 years.

The ~~following table shows the scheduled maturities, carrying values and current yields for~~ investment securities available for sale as of September 30, 2017. Scheduled maturities have been adjusted for anticipated prepayments of MBS and other pass through securities. Yields on tax-exempt securities have been calculated on a tax-equivalent basis (dollars in thousands):

Within One Year
After One Year
Through Five Years

After Five Years
Through Ten Years
After Ten Years Total

Carrying
Value

Weighted
Average
Yield

Carrying
Value

Weighted
Average
Yield

Carrying
Value

Weighted
Average
Yield

Carrying
Value

Weighted
Average
Yield

Carrying
Value

Weighted
Average
Yield
U.S. Treasury securities $ 24,957
1.19 % $ —
— % $ —
— % $ —
— % $ 24,957
1.19 %
U.S. Government agency and sponsored enterprise residential MBS 355,685
2.94 % 860,103
2.28 % 893,121
2.14 % 239,778
2.15 % 2,348,687
2.31 %
U.S. Government agency and sponsored enterprise commercial MBS 5,562
3.80 % 11,066
3.71 % 83,066
2.50 % 39,526
3.57 % 139,220
2.95 %
Private label residential MBS and CMOs 113,951
4.01 % 284,366
3.82 % 101,127
4.07 % 28,414
4.39 % 527,858
3.94 %
Private label commercial MBS 90,284
3.80 % 786,542
3.57 % 276,775
3.20 % —
— % 1,153,601
3.50 %
Single family rental real estate-backed securities 1,516
3.18 % 546,920
2.92 % 24,512
3.70 % —
— % 572,948
2.95 %
Collateralized loan obligations —
— % 573,474
3.32 % 126,845
3.52 % —
— % 700,319
3.36 %
Non-mortgage asset-backed securities 11,999
3.91 % 70,638
3.63 % —
— % —
— % 82,637
3.67 %
State and municipal obligations —
— % 27,509
3.00 % 624,758
4.46 % 24,748
5.60 % 677,015
4.45 %
SBA securities 93,080
2.54 % 245,991
2.50 % 150,116
2.47 % 97,488
2.43 % 586,675
2.49 %
Other debt securities —
— % —
— % 1,900
9.17 % 6,939
9.13 % 8,839
9.14 %
$ 697,034
3.13 % $ 3,406,609
3.04 % $ 2,282,220
3.11 % $ 436,893
2.74 % 6,822,756
3.05 %
Preferred stocks with no scheduled maturity

70,716
8.66 %
Total investment securities available for sale

$ 6,893,472
3.11 %

~~The available for sale investment securities~~ portfolio was in a net unrealized gain position of ~~$102.4~~$67.3 million at ~~September~~June 30, ~~2017~~2021, with aggregate fair value equal to ~~101.5%~~101% of amortized cost. Net unrealized gains at June 30, 2021 included ~~$110.3~~$94.3 million of gross unrealized gains and ~~$7.9~~$27.0 million of gross unrealized losses. Investment securities available for sale in an unrealized loss ~~position~~positions at ~~September~~June 30, ~~2017~~2021 had an aggregate fair value of ~~$1.0~~$3.2 billion. ~~At September~~The ratings distribution of our AFS securities portfolio at June 30, 2017, 96.7% of investment securities available for sale were backed by the U.S. Government, U.S. Government agencies or sponsored enterprises or were rated AAA , AA or A, based on the most recent third-party ratings. Investment securities available for sale totaling $33 million were rated below investment grade or not rated at September 30, 2017, all of which were acquired2021 is depicted in the ~~FSB Acquisition and substantially all of which were in unrealized gain positions at September 30, 2017.~~chart below:

We evaluate the credit quality of individual securities in the portfolio quarterly to determine whether ~~any~~we expect to recover the amortized cost basis of the investments in unrealized loss ~~positions are other-than-temporarily impaired.~~positions. This evaluation considers, but is not necessarily limited to, the following factors, the relative significance of which varies depending on the circumstances pertinent to each individual security:

~~our intent~~•Whether we intend to ~~hold~~sell the security ~~until maturity or for a period~~prior to recovery of ~~time sufficient for a recovery in value;~~its amortized cost basis;

~~whether~~•Whether it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis;

~~the length of time and~~•The extent to which fair value ~~has been~~is less than amortized cost;

~~adverse changes~~•Adverse conditions specifically related to the security, an industry or geographic area;

•Changes in ~~expected cash flows;~~the financial condition of the issuer or underlying loan obligors;

~~collateral values and performance;~~

~~the~~•The payment structure and remaining payment terms of the security, including levels of subordination or over-collateralization;

~~changes in the economic or regulatory environment;~~

~~the general market condition~~•Failure of the ~~geographic area or industry of the issuer;~~issuer to make scheduled payments;

~~the issuer’s financial condition, performance and business prospects; and~~

~~changes~~•Changes in credit ~~ratings.~~ratings;

~~Our evaluation~~•Relevant market data;

•Estimated prepayments, defaults, and the value and performance of non-agency impaired securities for OTTI as of September 30, 2017 included consideration of the potential impacts of Hurricanes Irma and Harvey. Our considerations included but were not necessarily limited to (i) observations of market pricing since the hurricanes, (ii) whether a significant portion of the underlying collateral ~~was in an~~

~~impacted area, (iii) whether credit enhancement significantly exceeded~~at the balance of collateral in impacted areas, (iv) for residential mortgage-backed securities, the evaluation of the extent and nature of damage to residential collateral for loans in the Bank’s residential loan portfolio located in the same areas, and (v) discussions with sponsors or managers of individual ~~securities about specific collateral impact.~~

During the three and nine months ended September 30, 2016, OTTI was recognized on two positions in one private label commercial MBS. These positions were in unrealized loss positions at September 30, 2016 and the Company intended to sell the security ~~before recovery of the amortized cost basis. No securities were determined to be other-than-temporarily impaired at September 30, 2017, or during the three and nine months then ended.~~level.

We do not intend to sell securities in significant unrealized loss positions at ~~September~~June 30, ~~2017.~~2021. Based on an assessment of our liquidity position and internal and regulatory guidelines for permissible investments and concentrations, it is not more likely than not that we will be required to sell securities in significant unrealized loss positions prior to recovery of amortized cost ~~basis. The severity of impairment of individual securities in the portfolio is generally not material. Unrealized losses in the portfolio~~basis, which may be at ~~September 30, 2017 were primarily attributable to an increase in market interest rates subsequent to the date the securities were acquired.~~maturity.

U.S. Government, Government Agency and Government Sponsored Enterprise Securities

The timely ~~repayment~~payment of principal and interest on securities issued by the U.S. ~~Treasury,~~government, U.S. ~~Government agency~~government agencies and U.S. government sponsored ~~enterprise securities in unrealized loss positions~~enterprises is explicitly or implicitly guaranteed by the ~~full faith~~U.S. Government. As such, there is an assumption of zero credit loss and ~~credit~~the Company expects to recover the entire amortized cost basis of these securities.

Private Label Securities:

None of the ~~U.S. Government. Management performed projected cash flow analyses of the~~impaired private label ~~residential MBS and CMOs,~~securities had missed principal or interest payments or had been downgraded by a NRSRO at June 30, 2021. The Company performed an analysis comparing the present value of cash flows expected to be collected to the amortized cost basis of impaired private label ~~commercial MBS~~securities. This analysis was based on a scenario that we believe to be more severe than our reasonable and ~~non-mortgage asset-backed securities in unrealized~~supportable economic forecast at June 30, 2021, and incorporated assumptions about voluntary prepayment rates, collateral defaults, delinquencies, other collateral quality measures, loss ~~positions, incorporating CUSIP level assumptions consistent with~~severity, recovery lag and other relevant factors. Our analysis also considered the ~~collateral~~structural characteristics of each security ~~including collateral default rate, voluntary prepayment rate, severity~~ and ~~delinquency assumptions.~~the level of credit enhancement provided by that structure. Based on the results of this analysis, nonone of the private label AFS securities in unrealized loss positions were projected to sustain credit losses at June 30, 2021.

At June 30, 2021, the private label portfolio segments with the largest unrealized losses were ~~projected. Management's~~the CMBS and CLO segments. The following table presents the distribution of third-party ratings and subordination levels compared to average internal stress scenario losses for the private label CMBS and CLOs at June 30, 2021:


				Subordination						Weighted Average Stress Scenario Loss
	Rating	Percent of Total		Minimum		Maximum		Average
Private label CMBS	AAA	88.3	%	29.4	%	49.8	%	38.0	%	9.1	%
	AA	4.7	%	44.3	%	44.3	%	44.3	%	9.8	%
	A	7.0	%	24.5	%	32.4	%	30.2	%	10.1	%
Weighted average		100.0	%	29.7	%	48.3	%	37.7	%	9.2	%

CLOs	AAA	71.8	%	42.9	%	61.2	%	48.0	%	15.0	%
	AA	21.1	%	33.1	%	40.7	%	36.3	%	15.2	%
	A	7.1	%	24.7	%	29.5	%	26.5	%	15.2	%
Weighted average		100.0	%	39.5	%	54.6	%	44.0	%	15.1	%

Our June 30, 2021 analysis projected weighted average collateral losses for impaired securities in the private label residential MBS and CMO category of ~~the~~2% compared to weighted average credit ~~characteristics~~support of ~~individual securities and the underlying collateral and levels of subordination for each of the~~15%. For impaired single family rental real estate-backed securities, ~~in unrealized loss positions is not indicative~~our analysis projected weighted average collateral losses of ~~projected~~19% compared to weighted average credit ~~losses. Management's analysis~~support of 52%. As of June 30, 2021, all of the ~~state and municipal obligations~~impaired securities in unrealized loss positions included reviewing the ratings of the securities and the results of credit surveillance performed by an independent third party. Given the expectation of timely repayment of principal and interest and the generally limited severity of impairment, the impairmentsthese categories were ~~considered to be temporary.~~externally rated AAA.

For further discussion of our analysis of impaired investment securities AFS for ~~OTTI,~~credit loss impairment see Note 3 to the consolidated financial statements.

We use third-party pricing services to assist us in estimating the fair value of investment securities. We perform a variety of procedures to ensure that we have a thorough understanding of the methodologies and assumptions used by the pricing services including obtaining and reviewing written documentation of the methods and assumptions employed, conducting interviews with valuation desk personnel and reviewing model results and detailed assumptions used to value selected securities as considered necessary. Our classification of prices within the fair value hierarchy is based on an evaluation of the nature of the significant assumptions impacting the valuation of each type of security in the portfolio. We have established a robust price challenge process that includes a review by our treasury front office of all prices provided on a monthly basis. Any price evidencing unexpected month over month fluctuations or deviations from our expectations based on recent observed trading activity and other information available in the marketplace that would impact the value of the security is challenged. Responses to the price challenges, which generally include specific information about inputs and assumptions incorporated in the valuation and their sources, are reviewed in detail. If considered necessary to resolve any discrepancies, a price will be obtained from an additional independent valuation ~~specialist.~~sources. We do not typically adjust the prices provided, other than through this established challenge process. Our primary pricing services utilize observable inputs when available, and employ unobservable inputs and proprietary models only when observable inputs are not available. As a matter of course, the services validate prices by

comparison to recent trading activity whenever such activity exists. Quotes obtained from the pricing services are typically non-binding.

We ~~have~~ also ~~established~~have a quarterly price validation process to assess the propriety of the pricing methodologies utilized by our primary pricing services by independently verifying the prices of a sample of securities in the portfolio. Sample sizes vary based on the type of security being priced, with higher sample sizes applied to more difficult to value security types. Verification procedures may consist of obtaining prices from an additional outside ~~source or internal modeling, generally based on Intex.~~source. We have established acceptable percentage deviations from the price provided by the initial pricing source. If deviations fall outside the established parameters, we will obtain and evaluate more detailed information about the assumptions and inputs used by each pricing source or, if considered necessary, employ an additional valuation ~~specialist~~source to price the security in question. Pricing issues identified through this evaluation are addressed with the applicable pricing service and methodologies or inputs are revised as determined necessary. Depending on the results of the validation process, sample sizes may be extended for particular classes of securities. Results of the validation process are reviewed by the treasury front office and by senior management.

The majority of our investment securities are classified within level 2 of the fair value hierarchy. U.S. Treasury securities and ~~certain preferred stocks~~marketable equity securities are classified within level 1 of the hierarchy. ~~At September 30, 2017~~We continue to monitor the impact of the COVID-19 pandemic on markets. While, particularly at the onset of the pandemic, we observed increased volatility and ~~December 31, 2016, 1.0%~~dislocation, we believe the fiscal and ~~2.1%, respectively,~~monetary response to the crisis has been effective in supporting liquidity and stabilizing markets. To date, circumstances have not led to a change in the categorization of our ~~investment securities were classified~~fair value estimates within ~~level 3 of~~ the fair value hierarchy. Securities classified within level 3 of the hierarchy at September 30, 2017 included certain private label residential MBS and trust preferred securities. These securities were classified within level 3 of the hierarchy because proprietary assumptions related to voluntary prepayment rates, default probabilities, loss severities and discount rates were considered significant to the valuation. There were no transfers of investment securities between levels of the fair value hierarchy during the nine months ended September 30, 2017 and 2016.

For additional discussion of the fair values of investment securities, see Note 109 to the consolidated financial statements.

~~Loans Held~~

The following table shows the weighted average prospective yields, categorized by scheduled maturity, for ~~Sale~~AFS investment securities as of June 30, 2021. Scheduled maturities have been adjusted for anticipated prepayments when applicable. Yields on tax-exempt securities have been calculated on a tax-equivalent basis, based on a federal income tax rate of 21%:

Loans held for sale at September 30, 2017 included $32 million of commercial loans originated by SBF with the intent to sell in the secondary market. Commercial loans held for sale are comprised of the portion of loans guaranteed by U.S. government agencies. Loans are generally sold with servicing retained. Servicing activity did not have a material impact on the results of operations for the three and nine months ended September 30, 2017 and 2016.


	Within One Year		After One Year Through Five Years		After Five Years Through Ten Years		After Ten Years		Total

U.S. Treasury securities	0.89	%	—	%	—	%	—	%	0.89	%
U.S. Government agency and sponsored enterprise residential MBS	0.82	%	0.81	%	0.72	%	0.67	%	0.77	%
U.S. Government agency and sponsored enterprise commercial MBS	1.59	%	1.79	%	1.03	%	1.15	%	1.12	%
Private label residential MBS and CMOs	1.37	%	1.22	%	1.75	%	2.33	%	1.29	%
Private label commercial MBS	2.20	%	1.87	%	2.05	%	2.49	%	1.94	%
Single family rental real estate-backed securities	2.85	%	2.14	%	2.32	%	—	%	2.18	%
Collateralized loan obligations	1.59	%	1.83	%	1.79	%	—	%	1.81	%
Non-mortgage asset-backed securities	2.81	%	2.61	%	2.04	%	—	%	2.66	%
State and municipal obligations	2.91	%	3.86	%	4.61	%	4.06	%	3.99	%
SBA securities	1.31	%	1.26	%	1.18	%	1.07	%	1.24	%

	1.41	%	1.60	%	1.30	%	1.32	%	1.51	%

Loans

The loan portfolio comprises the Company’s primary interest-earning asset. The following ~~tables show~~table shows the composition of the loan portfolio ~~and the breakdown of the portfolio among non-covered loans, covered ACI loans and covered non-ACI loans~~ at the dates indicated (dollars in thousands):

September 30, 2017

Covered Loans Percent of Total
Non-Covered Loans ACI Non-ACI Total
Residential and other consumer:

1-4 single family residential $ 3,958,205
$ 470,300
$ 28,589
$ 4,457,094
21.7 %
Home equity loans and lines of credit 1,644
5,640
37,764
45,048
0.2 %
Other consumer loans 20,166
—
—
20,166
0.1 %
3,980,015
475,940
66,353
4,522,308
22.0 %
Commercial:
Multi-family 3,358,801
—
—
3,358,801
16.3 %
Non-owner occupied commercial real estate 4,183,275
—
—
4,183,275
20.4 %
Construction and land 271,994
—
—
271,994
1.3 %
Owner occupied commercial real estate 1,959,464
—
—
1,959,464
9.5 %
Commercial and industrial 3,900,290
—
—
3,900,290
19.0 %
Commercial lending subsidiaries 2,374,193
—
—
2,374,193
11.5 %
16,048,017
—
—
16,048,017
78.0 %
Total loans 20,028,032
475,940
66,353
20,570,325
100.0 %
Premiums, discounts and deferred fees and costs, net 44,422
—
(4,317 ) 40,105

Loans including premiums, discounts and deferred fees and costs 20,072,454
475,940
62,036
20,610,430

Allowance for loan and lease losses (153,725 ) (1,812 ) (3,036 ) (158,573 )
Loans, net $ 19,918,729
$ 474,128
$ 59,000
$ 20,451,857


	June 30, 2021				December 31, 2020

	Total		Percent of Total		Total		Percent of Total
Residential and other consumer loans	$	7,076,274	30.9	%	$	6,348,222	26.6	%
Multi-family	1,256,711		5.5	%	1,639,201		6.9	%
Non-owner occupied commercial real estate	4,724,183		20.7	%	4,963,273		20.8	%
Construction and land	218,634		1.0	%	293,307		1.2	%
Owner occupied commercial real estate	1,960,900		8.6	%	2,000,770		8.4	%
Commercial and industrial	4,205,795		18.4	%	4,447,383		18.6	%
PPP	491,960		2.1	%	781,811		3.3	%
Pinnacle	1,046,537		4.6	%	1,107,386		4.6	%
Bridge - franchise finance	463,874		2.0	%	549,733		2.3	%
Bridge - equipment finance	421,939		1.8	%	475,548		2.0	%
Mortgage warehouse lending	1,018,267		4.4	%	1,259,408		5.3	%
Total loans	22,885,074		100.0	%	23,866,042		100.0	%
Allowance for credit losses	(175,642)				(257,323)
Loans, net	$	22,709,432			$	23,608,719

For the six months ended June 30, 2021, total loans declined by $981 million. Excluding PPP, loans declined by $691 million for the six months.

December 31, 2016

Covered Loans Percent of Total
Non-Covered Loans ACI Non-ACI Total
Residential and other consumer:

1-4 single family residential $ 3,422,425
$ 532,348
$ 36,675
$ 3,991,448
20.6 %
Home equity loans and lines of credit 1,120
3,894
47,629
52,643
0.3 %
Other consumer loans 24,365
—
—
24,365
0.1 %
3,447,910
536,242
84,304
4,068,456
21.0 %
Commercial:
Multi-family 3,824,973
—
—
3,824,973
19.8 %
Non-owner occupied commercial real estate 3,739,235
—
—
3,739,235
19.3 %
Construction and land 311,436
—
—
311,436
1.6 %
Owner occupied commercial real estate 1,736,858
—
—
1,736,858
9.0 %
Commercial and industrial 3,391,614
—
—
3,391,614
17.5 %
Commercial lending subsidiaries 2,280,685
—
—
2,280,685
11.8 %
15,284,801
—
—
15,284,801
79.0 %
Total loans 18,732,711
536,242
84,304
19,353,257
100.0 %
Premiums, discounts and deferred fees and costs, net 48,641
—
(6,504 ) 42,137

Loans including premiums, discounts and deferred fees and costs 18,781,352
536,242
77,800
19,395,394

Allowance for loan and lease losses (150,853 ) —
(2,100 ) (152,953 )
Loans, net $ 18,630,499
$ 536,242
$ 75,700
$ 19,242,441

~~Total~~Growth in residential and other consumer loans for the six months ended June 30, 2021 totaled $728 million, including ~~premiums, discounts~~$443 million in GNMA early buyout loans. In the aggregate, excluding PPP, commercial loans declined by $1.4 billion for the six months ended June 30, 2021 as runoff continued to exceed new production. Line utilization remained below historical levels and ~~deferred fees and costs, increased by $1.2 billion~~accelerated prepayment activity continued. MWL line utilization declined to ~~$20.6 billion~~52% at ~~September~~June 30, ~~2017, from $19.4 billion~~2021 compared to 62% at December 31, ~~2016. Non-covered loans grew by $1.3 billion while covered~~2020.

PPP loans declined by ~~$76~~$290 million during the six months ended June 30, 2021. Loans under the First Draw Program declined by $573 million, resulting primarily from ~~December 31, 2016 to September~~full or partial forgiveness. PPP loans under the Second Draw Program totaling $283 million were originated during the six months ended June 30, ~~2017. Non-covered residential~~2021.

For the three months ended June 30, 2021 total loans excluding PPP loans declined by $56 million. Residential and other consumer loans grew by ~~$538~~$494 million and ~~non-covered~~ commercial ~~loans grew by $753 million during the nine months ended September 30, 2017.~~

~~Growth in non-covered~~and industrial loans, including premiums, discounts and deferred fees and costs, for the nine months ended September 30, 2017 reflected an increase of $536 million for the Florida franchise, a decrease of $74 million for the New York franchise and an increase of $829 million for the national platforms.

The following tables show the composition of the non-covered loan portfolio and the breakdown among the Florida and New York franchises and national platforms at the dates indicated. Amounts include premiums, discounts and deferred fees and costs (dollars in thousands):

September 30, 2017
Florida New York National Total
Residential and other consumer $ 228,300
$ 206,308
$ 3,599,004
$ 4,033,612
Commercial:
Multi-family 555,193
2,807,068
—
3,362,261
Non-owner occupied commercial real estate 2,572,743
1,501,597
99,229
4,173,569
Construction and land 123,655
134,854
12,947
271,456
Owner occupied commercial real estate 1,110,581
748,339
97,829
1,956,749
Commercial and industrial 2,509,353
891,978
490,751
3,892,082
Commercial lending subsidiaries —
—
2,382,725
2,382,725
$ 7,099,825
$ 6,290,144
$ 6,682,485
$ 20,072,454
35.4 % 31.3 % 33.3 % 100.0 %

December 31, 2016
Florida New York National Total
Residential and other consumer: $ 254,139
$ 226,154
$ 3,015,482
$ 3,495,775
Commercial:
Multi-family 520,263
3,309,411
—
3,829,674
Non-owner occupied commercial real estate 2,337,806
1,294,231
99,771
3,731,808
Construction and land 174,494
125,983
10,436
310,913
Owner occupied commercial real estate 1,042,441
602,155
91,254
1,735,850
Commercial and industrial 2,234,393
806,660
346,085
3,387,138
Commercial lending subsidiaries —
—
2,290,194
2,290,194
$ 6,563,536
$ 6,364,594
$ 5,853,222
$ 18,781,352
34.9 % 33.9 % 31.2 % 100.0 %

~~The increase in non-owner occupied~~owner-occupied commercial real estate, ~~loans and~~grew by $186 million. The remaining commercial portfolio segments showed net declines for the decrease in multi-family loans in the New York franchise over the nine months ended September 30, 2017 includes the impact of reclassifying $207 million of loans on mixed-use properties from multi-family to non-owner occupied commercial real estate loans, based on the primary source of rental income on those properties.quarter.

Residential mortgages and other consumer loans

~~Residential mortgages~~The following table shows the composition of residential and other consumer loans ~~totaled $4.5 billion, or 22.0% of total loans,~~ at ~~September 30, 2017 and $4.1 billion, or 21.0% of total loans, at December 31, 2016.~~the dates indicated (in thousands):


	June 30, 2021		December 31, 2020

1-4 single family residential	$	5,206,766	$	4,922,836
Government insured residential	1,863,723		1,419,074
Other consumer loans	5,785		6,312
	$	7,076,274	$	6,348,222

The ~~non-covered~~1-4 single family residential loan portfolio, excluding government insured residential loans, is primarily comprised of loans purchased ~~on a national basis~~ through established correspondent channels. The portfolio also includes loans originated through retail channels in our Florida and New York geographic footprint prior to the termination of our retail residential mortgage origination business in early 2016. Non-covered1-4 single family residential mortgage loans are primarily closed-end, first lien jumbo mortgages for the purchase or re-finance of owner occupied property. The loans have terms ranging from 10 to 30 years, with either fixed or adjustable interest rates. At ~~September~~June 30, ~~2017, $113~~2021, $502 million or ~~2.8%~~10% were secured by investor-owned properties.

The Company acquires non-performing FHA and VA insured mortgages from third party servicers who have exercised their right to purchase these loans out of ~~non-covered residential mortgage~~GNMA securitizations (collectively, "government insured pool buyout loans" or "buyout loans"). Buyout loans ~~were interest-only~~that re-perform, either through modification or self-cure, may be eligible for re-securitization. The Company and the servicer share in the economics of the sale of these loans ~~substantially all~~into new securitizations. The balance of ~~which begin amortizing 10 years after origination.~~buyout loans totaled $1.8 billion at June 30, 2021. The Company is not the servicer of these loans.

We do not originate or acquire option ARMs, “no-doc” or “reduced-doc” mortgages and do not utilize wholesale mortgage origination channels although the covered loan portfolio contains loans with these characteristics. The Company’s exposure to future losses on these mortgage loans is mitigated by the Single Family Shared-Loss Agreement.

The following charts present the distribution of the ~~non-covered~~ 1-4 single family residential mortgage portfolio ~~by interest rate terms and contractual lives~~ at the dates indicated:


~~(1)~~	~~Fixed-rate loans with contractual terms of 20 years comprise less than 3% of the total at both September 30, 2017 and December 31, 2016, and are reported with 15 year fixed above.~~

The following table presents the five states with the largest geographic ~~concentration~~concentrations of ~~the non-covered~~ 1-4 single family residential ~~portfolio is summarized as follows~~loans, excluding government insured residential loans, at the dates indicated ~~(dollar~~(dollars in thousands):

September 30, 2017 December 31, 2016
California $ 1,052,154
26.2 % $ 904,107
26.1 %
New York 848,123
21.1 % 763,824
22.0 %
Florida 530,056
13.2 % 487,294
14.0 %
District of Columbia 177,978
4.4 % 123,825
3.6 %
Virginia 175,550
4.4 % 152,113
4.4 %
Others ⁽¹⁾
1,227,983
30.7 % 1,039,186
29.9 %
$ 4,011,844
100.0 % $ 3,470,349
100.0 %


~~(1)~~	~~No other state represented borrowers with more than 4.0% of non-covered 1-4 single family residential loans outstanding at September 30, 2017 or December 31, 2016.~~

~~Home equity loans and lines of credit are not significant to the non-covered loan portfolio.~~

~~Other consumer loans are comprised primarily of consumer installment financing, loans secured by certificates of deposit, unsecured personal lines of credit and demand deposit account overdrafts.~~


	June 30, 2021				December 31, 2020

	Total		Percent of Total		Total		Percent of Total
California	$	1,651,551	31.7	%	$	1,541,779	31.3	%
New York	1,150,212		22.1	%	1,084,143		22.0	%
Florida	479,256		9.2	%	518,877		10.5	%
Virginia	235,750		4.5	%	196,641		4.0	%
New Jersey	172,824		3.3	%	160,276		3.3	%
Others	1,517,173		29.2	%	1,421,120		28.9	%
	$	5,206,766	100.0	%	$	4,922,836	100.0	%

Commercial loans and leases

~~The~~Commercial loans include commercial ~~portfolio segment includes~~and industrial loans and leases, loans secured by owner-occupied commercial real-estate, multi-family properties ~~loans secured by both owner-occupied~~ and other income-producing non-owner occupied commercial real estate, a limited amount of construction and land loans, ~~commercial and industrial~~SBA loans, mortgage warehouse lines of credit, PPP loans, municipal loans and ~~direct financing leases.~~leases originated by Pinnacle and franchise and equipment finance loans and leases originated by Bridge.

~~Management’s loan origination strategy is heavily focused on~~The following charts present the distribution of the commercial loan portfolio ~~segment, which comprised 80.1% and 81.6% of non-covered loans as of September 30, 2017 and December 31, 2016, respectively.~~at the dates indicated (dollars in millions):

Commercial real estate loans include term loans secured by ~~owner and~~ non-owner occupied income producing properties including rental apartments, mixed-use properties, industrial properties, retail shopping centers, free-standing single-tenant buildings, office buildings, warehouse facilities, ~~and~~ hotels, ~~as well as~~ real estate secured lines of ~~credit.~~credit, as well as credit facilities to institutional real estate entities such as REITs and commercial real estate investment funds.

The following ~~charts present~~table presents the distribution of ~~non-owner occupied~~ commercial real estate loans by ~~product types~~property type along with weighted average DSCRs and LTVs at June 30, 2021 (dollars in thousands):



	Amortized Cost		Percent of Total		FL		New York Tri State		Other		Weighted Average DSCR	Weighted Average LTV
Office	$	1,985,933	31	%	60	%	25	%	15	%	2.32	62.6	%
Multifamily	1,361,226		22	%	40	%	55	%	5	%	1.72	59.0	%
Retail	1,225,933		20	%	54	%	39	%	7	%	1.53	68.7	%
Warehouse/Industrial	861,098		14	%	64	%	23	%	13	%	2.27	56.4	%
Hotel	593,852		10	%	76	%	15	%	9	%	1.17	56.7	%
Other	171,486		3	%	38	%	32	%	30	%	1.90	56.2	%
	$	6,199,528	100	%	56	%	35	%	9	%	1.90	61.4	%

DSCRs and LTVs in the ~~dates indicated:~~table above are based on the most recent information available, which in some cases may not be fully reflective of the ultimate impact of the COVID-19 pandemic on borrowers' financial condition or property values.

~~Loans secured by~~The Company’s commercial real estate typically have shorter repayment periods and re-price more frequently than 1-4 single family residential loans but may have longer terms and re-price less frequently than commercial and industrial loans. The Company’s underwriting standards generally provide for loan terms of five to ~~ten~~seven years, with amortization schedules of no more than thirty years. LTV ratios are typically limited to no more than ~~80%~~75%. ~~Owner-occupied~~Construction and land loans, included by property type in the table above, represented 1.0% of the total loan portfolio at June 30, 2021.

Included in the table above are approximately $163 million of mixed-use properties in New York, consisting of $86 million categorized as multi-family, $58 million categorized as retail and $19 million categorized as office.

The New York legislature has enacted a number of rent regulation reform measures that generally have the impact of limiting landlords' ability to increase rents on stabilized units and to convert stabilized units to market rate units. The New York multi-family portfolio included $577 million of loans collateralized by properties with some or all of the units subject to rent regulation at June 30, 2021, substantially all of which were stabilized properties.

The following tables present the distribution of stabilized rent-regulated multi-family loans, by DSCR and LTV at June 30, 2021 (in thousands):


DSCR
Less than 1.00	$	167,370
1.00 - 1.24	176,703
1.25 - 1.50	116,578
1.51 or greater	76,480
	$	537,131


LTV
Less than 50%	$	127,096
50% - 65%	137,475
66% - 75%	90,531
More than 75%	182,029
	$	537,131

The LTVs in the table above are based on the most recent appraisal obtained, which may not be fully reflective of changes in valuations that may result from the impact of the rent regulation reforms, or of the COVID-19 pandemic. Loans with DSCR less than 1.00 may be those with temporary rent deferments, unit vacancies or increases in expenses exceeding rental receipts, such as real estate taxes. Certain type of ancillary income are excluded from the DSCR calculations.

Commercial and industrial loans are typically made to small, middle market and larger corporate businesses and not-for-profit entities and include equipment loans, secured and unsecured working capital facilities, formula-based loans, trade finance, SBA product offerings and business acquisition finance credit facilities. These loans may be structured as term loans, typically with maturities of five to seven years, or revolving lines of credit which may have multi-year maturities. The Bank also provides financing to state and local governmental entities generally within our geographic markets. Commercial loans included shared national credits totaling $2.7 billion at June 30, 2021, the majority of which were relationship based loans to

borrowers in Florida and New York. The Bank makes loans secured by owner-occupied commercial real estate ~~loans~~that typically have risk profiles more closely aligned with that of commercial and industrial loans than with other types of commercial real estate loans. ~~Construction and land loans represented only 1.3% of~~

The following table presents the ~~total loan portfolio at September 30, 2017. Construction and land loans are generally made for projects expected to stabilize within eighteen months of completion~~

exposure in ~~sub-markets with strong fundamentals and, to a lesser extent, for-sale residential projects to experienced developers with a strong cushion between market prices and loan basis.~~

~~Commercial~~the commercial and industrial portfolio by industry, including $2.0 billion of owner-occupied commercial real estate loans, are typically made to small and middle market businesses and include equipment loans, secured and unsecured working capital facilities, formula-based loans, mortgage warehouse lines, taxi medallion loans, SBA product offerings and business acquisition finance credit facilities. These loans may be structured as term loans, typically with maturities of three to seven years, or revolving lines of credit which may have multi-year maturities. Commercial loans include shared national credits totaling $1.5 billionby industry at ~~September~~June 30, ~~2017, typically relationship based loans to borrowers in our geographic footprint.~~2021 (in thousands):



	Amortized Cost		Percent of Total
Finance and Insurance	$	939,604	15.2	%
Educational Services	695,388		11.3	%
Wholesale Trade	601,045		9.7	%
Transportation and Warehousing	458,358		7.4	%
Health Care and Social Assistance	405,748		6.6	%
Manufacturing	350,013		5.7	%
Information	388,849		6.3	%
Retail Trade	305,077		4.9	%
Accommodation and Food Services	250,342		4.1	%
Real Estate and Rental and Leasing	312,119		5.1	%
Public Administration	231,939		3.8	%
Professional, Scientific, and Technical Services	223,364		3.6	%
Other Services (except Public Administration)	236,068		3.8	%
Construction	208,839		3.4	%
Administrative and Support and Waste Management	165,660		2.7	%
Arts, Entertainment, and Recreation	172,630		2.8	%
Utilities	163,878		2.7	%
Other	57,774		0.9	%
	$	6,166,695	100.0	%

Through its commercial lending subsidiaries, Pinnacle and Bridge, the Bank provides equipment and franchise financing on a national basis using both loan and lease structures. Pinnacle provides essential-use equipment financing to state and local governmental entities directly and through vendor programs and alliances. Pinnacle offers a full array of financing structures including equipment lease purchase agreements and direct (private placement) bond re-fundings and loan agreements. Bridge has two operating divisions. The franchise finance division offers franchise acquisition, expansion and equipment financing, typically to experienced operators in well-established concepts. The franchise finance portfolio is made up primarily of quick service restaurant and fitness concepts comprising 58% and 35% of the portfolio, respectively. The equipment finance division provides primarily transportation equipment financing through a variety of loan and lease structures. The Bank's SBF unit primarily originates SBA guaranteed commercial and commercial real estate loans, generally selling the guaranteed portion in the secondary market and retaining the unguaranteed portion in portfolio. The Bank engages in mortgage warehouse lending on a national basis.

The following table presents the ~~recorded investment~~franchise portfolio by concept at June 30, 2021:


	Amortized Cost		Percent of Bridge -Franchise Finance
Restaurant concepts:
Burger King	$	58,559	12.6	%
Popeyes	19,616		4.2	%
Dunkin Donuts	19,528		4.2	%
Jimmy John's	16,834		3.6	%
Domino's	8,273		1.8	%
Other	147,017		31.7	%
	$	269,827	58.1	%
Non-restaurant concepts:
Planet Fitness	$	92,912	20.0	%
Orange Theory Fitness	70,129		15.1	%
Other	31,006		6.8	%
	194,047		41.9	%
	$	463,874	100.0	%

The Company has originated PPP loans under both the First and Second Draw Programs. These loans bear interest at 1% and are guaranteed as to principal and interest by the SBA. PPP loans have terms of 2 and 5 years under the First and Second Draw Programs, respectively, and are eligible for earlier forgiveness under the terms of the PPP in prescribed circumstances. The following table summarizes PPP loan balances at June 30, 2021, and the amount of interest income related to accelerated amortization of origination fees on loans that were partially or fully forgiven, under each program during the three and six months ended June 30, 2021 (in thousands):


	June 30, 2021						Fees Recognized On Forgiveness
	UPB		Deferred Origination Fees		Amortized Cost		Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
First Draw Program	$	210,293	$	(1,079)	$	209,214	$	4,512	$	7,082
Second Draw Program	291,473		(8,727)		282,746		—		—
	$	501,766	$	(9,806)	$	491,960	$	4,512	$	7,082

Geographic Concentrations

The Company's commercial and commercial real estate portfolios are concentrated in Florida and the Tri-state area. 56% and 35% of commercial real estate loans were secured by collateral located in Florida and the Tri-state area, respectively; while 37% and 22% of all other commercial loans were to borrowers in Florida and the Tri-state area, respectively.

The following table presents the five states with the largest concentration of commercial loans and ~~direct~~leases originated through Bridge, Pinnacle and our mortgage warehouse finance ~~leases held for investment for each of our national commercial lending platforms~~unit at the dates indicated ~~(in thousands):~~

September 30, 2017 December 31, 2016
Pinnacle $ 1,393,965
$ 1,317,820
Bridge - franchise finance 421,821
426,661
Bridge - transportation equipment finance 566,939
545,713
SBF 235,433
225,241
Mortgage warehouse lending 465,323
322,305
$ 3,083,481
$ 2,837,740

The geographic concentration of the commercial loans and direct financing leases in the national platforms is summarized as follows at the dates indicated. Amounts include premiums, discounts and deferred fees and costs (dollars in thousands):



	June 30, 2021				December 31, 2020
	Total		Percent of Total		Total		Percent of Total
California	$	500,825	17.0	%	$	609,419	18.0	%
NY Tri State Area	278,194		9.4	%	545,458		16.1	%
Florida	285,828		9.7	%	330,587		9.7	%
Ohio	225,538		7.6	%	186,443		5.5	%
North Carolina	176,885		6.0	%	194,558		5.7	%
All Others	1,483,347		50.3	%	1,525,610		45.0	%
	$	2,950,617	100.0	%	$	3,392,075	100.0	%

September 30, 2017 December 31, 2016
Florida $ 593,307
19.2 % $ 543,445
19.2 %
California 464,853
15.1 % 421,480
14.9 %
Arizona 171,321
5.6 % 133,549
4.7 %
Texas 161,662
5.2 % 118,122
4.2 %
Iowa 152,869
5.0 % 161,874
5.7 %
Virginia 131,041
4.2 % 138,417
4.9 %
All others (1) 1,408,428
45.7 % 1,320,853
46.4 %
$ 3,083,481
100.0 % $ 2,837,740
100.0 %
Operating lease equipment, net


~~(1)~~	~~No other state represented borrowers with more than 4.0% of loans outstanding at September 30, 2017 or December 31, 2016.~~

~~Equipment under~~ Operating ~~Lease~~

~~Equipment under~~lease equipment, net of accumulated depreciation totaled $668 million at June 30, 2021, including off-lease equipment, net of accumulated depreciation of $128 million. The portfolio consists primarily of railcars, non-commercial aircraft and other transport equipment. Our operating lease ~~increased by $48 million to $588~~customers are North American commercial end users. We have a total of 5,070 railcars with a carrying value of $382 million at ~~September~~June 30, ~~2017, from $540 million at December 31, 2016. The portfolio consisted primarily of 5,424 railcars,~~2021, including hoppers, tank cars, boxcars, auto carriers, center beams and ~~gondolas leased to North American commercial end-users. The portfolio also included non-commercial aircraft and other transport equipment.~~gondolas. The largest concentrations of rail cars were ~~2,264~~2,402 hopper cars and ~~1,683~~1,594 tank cars, primarily used to ship sand and petroleum products, respectively, for the energy industry. ~~Equipment with a~~

The chart below presents operating lease equipment by type at the dates indicated:

At June 30, 2021, the breakdown of carrying ~~value~~values of ~~$288 million at September 30, 2017~~operating lease equipment, excluding equipment off-lease, by the year leases are scheduled to expire was ~~leased to companies for use in the energy industry.~~as follows (in thousands):


Years Ending December 31:
2021	$	23,683
2022	40,797
2023	75,170
2024	35,514
2025	100,020
Thereafter through 2034	264,529
	$	539,713

Asset Quality

In discussing asset quality, we distinguish between covered loans and non-covered loans. Although the risk profile of covered loans is higher than that of non-covered loans, our exposure to loss related to covered loans is significantly mitigated by the fair value basis recorded in these loans resulting from the application of acquisition accounting and by the Single Family Shared-Loss Agreement. At September 30, 2017, residential loans covered under the Single Family Shared-Loss Agreement totaled $538 million.Commercial Loans

We have ~~established~~ a robust credit risk management framework, ~~put in place~~ an experienced team to lead the workout and recovery process for the commercial and commercial real estate portfolios and ~~implemented~~ a dedicated internal credit review function. WeIn response to the COVID-19 pandemic, we have ~~an experienced resolution team in place for covered residential mortgage loans,~~further enhanced our workout and ~~have implemented outsourcing arrangements with industry leading firms in certain areas such as OREO resolution.~~

recovery staffing and processes. Loan performance is monitored by our credit administration, portfolio management and workout and recovery departments. Generally, commercial relationships with balances in excess of defined thresholds are re-evaluated at least annually and more frequently if circumstances indicate that a change in risk rating may be warranted. The defined thresholds range from $1 million to $3 million. ~~Additionally,~~Homogenous groups of smaller balance commercial loans may be monitored collectively. The credit quality and risk rating of commercial loans as well as our underwriting and portfolio management practices are regularly reviewed by our internal credit review department.

We believe internal risk rating is the best indicator of the credit quality of commercial loans. The Company utilizes a ~~13 grade~~16-grade internal asset risk classification system as part of its efforts to monitor and maintain commercial asset quality. ~~Loans~~The special mention rating is considered a transitional rating for loans exhibiting potential credit weaknesses that ~~deserve management’s close attention and that if left uncorrected may~~could result in deterioration of ~~the~~ repayment ~~capacity of the borrower are categorized as special mention.~~prospects at some future date if not checked or corrected and that deserve management’s close attention. These borrowers may exhibit ~~negative financial trends~~declining cash flows or ~~erratic financial performance, strained liquidity, marginal collateral coverage, declining industry trends~~revenues or ~~weak management.~~increasing leverage. Loans with well-defined credit weaknesses that may result in a loss if the deficiencies are not corrected are assigned a risk rating of substandard. These borrowers may exhibit payment defaults, inadequate cash flows from current operations, operating losses, increasing balance sheet leverage, project cost overruns, unreasonable construction delays, exhausted interest reserves, declining collateral values, frequent overdrafts or past due real estate taxes. Loans with weaknesses so severe that collection in full is highly questionable or improbable, but because of certain reasonably specific pending factors have not been charged off, are assigned an internal risk rating of doubtful.

~~Residential mortgage~~ During 2020, risk ratings were re-evaluated for a substantial portion of the commercial portfolio, with a particular focus on portfolio segments we identified for enhanced monitoring and loans ~~and consumer loans are not individually risk rated. Delinquency status is~~for which we granted temporary payment deferrals or modifications in light of the ~~primary measure we use~~COVID-19 pandemic. We continue to closely monitor the ~~credit quality~~risk rating of ~~these loans. We also consider original LTV and FICO score to be significant indicators of credit quality for the non-covered 1-4 single family residential portfolio.~~

~~Although our assessment is ongoing and the results of that assessment are subject to change~~commercial loans in ~~the future, we do not currently believe the ability~~light of the ~~substantial majority of our borrowers to repay their loans or the value of the collateral securing those loans has been materially impacted by Hurricanes Irma and Harvey.~~

~~Non-covered Loans and Leases~~

~~Commercial Loans~~

The ongoing asset quality of significant commercial loans is monitored on an individual basis through our regular credit review and risk rating process. We believe internal risk rating is the best indicator of the credit quality of commercial loans. Homogenous groups of smaller balance commercial loans may be monitored collectively.evolving COVID-19 situation.

The following table summarizes the Company's commercial credit exposure, based on internal risk rating, at the dates indicated ~~(in~~(dollars in thousands):


						June 30, 2021				March 31, 2021				December 31, 2020

	September 30, 2017		December 31, 2016			Amortized Cost		Percent of Commercial Loans		Amortized Cost		Percent of Commercial Loans			Amortized Cost		Percent of Commercial Loans
Pass	$	15,505,587	$	14,897,121	Pass	$	13,739,092	86.8	%	$	14,167,606	84.5	%		$	14,832,025	84.6	%
Special mention	150,899		72,225		Special mention	138,064		0.9	%	420,331		2.5	%		711,516		4.1	%
Substandard ⁽¹⁾	376,540		304,713
Substandard accruing					Substandard accruing	1,684,666		10.7	%	1,983,191		11.8	%		1,758,654		10.0	%
Substandard non-accruing					Substandard non-accruing	229,646		1.5	%	189,589		1.1	%		203,758		1.2	%
Doubtful	5,816		11,518		Doubtful	17,332		0.1	%	17,903		0.1	%		11,867		0.1	%
	$	16,038,842	$	15,285,577		$	15,808,800	100.0	%	$	16,778,620	100.0	%		$	17,517,820	100.0	%

~~(1)~~

~~The balance of substandard loans at September 30, 2017 and December 31, 2016 included $121~~Our internal risk ratings at June 30, 2021 continued to be influenced by the impact of the COVID-19 pandemic and the measures and restrictions employed to contain the spread of the virus on the economy, our borrowers and the sectors in which they operate. Management has taken what we believe to be a proactive and objective approach to risk rating the commercial loan portfolio since the onset of the pandemic. The increase in levels of criticized and classified loans, particularly in the special mention and substandard accruing categories, over the course of 2020 was directly related to the impact of the COVID-19 pandemic. As expected given the trajectory of economic recovery, levels of criticized and classified loans have declined over the first six months of 2021, particularly during the second quarter. During the six months ended June 30, 2021, total criticized and classified loans declined by $616 million. During the quarter ended June 30, 2021 criticized and classified loans declined by $541.3 million or 21%, to $2.1 billion. However, substandard non-accruing loans increased by $40.1 million during the second quarter. This increase was primarily attributable to one $69 million and $138 million, respectively, of taxi medallion finance loans. Criticized and classified loans represented 3.3% of the commercial loan portfolio, of which 0.8% were taxi medallion loans, at September 30, 2017. See ~~Note 4~~ ~~to the consolidated financial statements for more detailed information about risk rating of commercial loans.~~

~~Taxi Medallion Finance~~

~~The~~ commercial and industrial ~~loan portfolio includes exposure~~relationship. If the economic recovery and its impact on individual borrowers evolve in line with our current expectations and economic forecast, we would expect to ~~taxi medallion finance~~see the level of ~~$121 million at September 30, 2017. The estimated value~~criticized and classified loans continue to decline over the remainder of ~~underlying taxi medallion collateral and liquidity in~~2021. However, uncertainty remains around the market for sales of medallions, a potential secondary source of repayment, have declined significantly in recent years due to competitive developments in the transportation-for-hire industry. Due to the ongoing trend of declining estimated cash flows from the operation of taxi medallions leading to declines in medallion valuations, the entire taxi medallion portfolio was placed on non-accrual status and risk rated substandard as of September 30, 2017. In addition, partial charge-offs were recognized on all taxi medallion loans with carrying values in excess of collateral values, determined using the cash flow template discussed below, to reduce the carrying value of those loans to this estimated collateral value.

~~We update our analysis~~future trajectory of the cash flow generating capacity of the operation of New York City medallions on a regular basis using current available taxi industry data from which taxi medallion values and prospective debt service capacity are estimated. This analysis is based on an extensive data set obtained from the NYTLC and assumptions that we believe are reasonable estimates of fleet utilization and borrower expenses. We update our analysis of estimated medallion valuations on a quarterly basis, based on these cash flow capacity estimates. At September 30, 2017, our estimate of the value of New York City taxi medallions based on our cash flow template and consideration of estimated selling costs and declining trends in medallion values was $351,000 for both corporate and individual medallions. We used this value for purposes of determining the partial charge-offsCOVID-19 virus and the ~~value~~economic recovery. In light of ~~repossessed medallions. See Note 10 to the consolidated financial statements for~~that uncertainty, it is possible that criticized and classified loan levels may not decline or that they may increase.

The following table provides additional information about special mention and substandard accruing loans, at the ~~valuation of New York City taxi medallions.~~

~~The taxi medallion portfolio had the following characteristics at September 30, 2017:~~

~~Approximately 97% of the portfolio secured directly by taxi medallions was concentrated~~dates indicated (dollars in ~~New York City.~~

Loans delinquent by 30 days or more totaled $13.2 million or 11.0% of the portfolio, compared to $40.8 million or 22.8% of the portfolio at December 31, 2016. Loans delinquent by 90 days or more totaled $10.4 million or 8.7% of the portfolio, compared to $29.2 million or 16.4% of the portfolio at December 31, 2016. The most significant factor contributing to the decrease in delinquencies was one large relationship that was brought current and restructuredthousands). Non-performing loans are discussed further in the ~~first quarter.~~section entitled "Non-performing Assets" below.



	June 30, 2021				March 31, 2021				December 31, 2020
	Amortized Cost		% of Loan Segment		Amortized Cost		% of Loan Segment			Amortized Cost		% of Loan Segment
Special mention:
CRE
Hotel	$	579	0.1	%	$	34,113	5.5	%		$	68,413	11.0	%
Retail	21,763		1.8	%	51,547		4.0	%		86,935		6.4	%
Multi-family	6,085		0.4	%	37,345		2.5	%		36,335		2.2	%
Office	27,246		1.4	%	3,973		0.2	%		37,943		1.8	%
Industrial	—		—	%	1,047		0.1	%		9,440		1.1	%
Other	3,503		6.5	%	32,704		29.5	%		38,010		45.4	%
	59,176				160,729					277,076
Owner occupied commercial real estate	41,923		2.1	%	68,145		3.5	%		156,837		7.8	%
Commercial and industrial	33,364		0.8	%	178,920		4.4	%		169,605		3.8	%

Bridge - franchise finance	1,857		0.4	%	10,745		2.0	%		71,593		13.0	%
Bridge - equipment finance	1,744		0.4	%	1,792		0.4	%		36,405		7.7	%
	$	138,064			$	420,331				$	711,516

Substandard accruing:
CRE
Hotel	$	290,439	48.9	%	$	453,289	73.2	%		$	400,468	64.4	%
Retail	220,424		18.0	%	275,976		21.6	%		276,149		20.4	%
Multi-family	205,514		16.4	%	292,624		19.4	%		218,532		13.3	%
Office	140,741		7.1	%	105,743		5.1	%		40,477		1.9	%
Industrial	12,855		1.5	%	17,237		2.0	%		13,902		1.7	%
Other	21,375		12.5	%	37,245		33.6	%		28,505		1.7	%
	891,348				1,182,114					978,033
Owner occupied commercial real estate	219,162		11.2	%	198,896		10.3	%		177,575		8.9	%
Commercial and industrial	277,683		6.6	%	256,341		6.3	%		285,925		6.4	%

Bridge - franchise finance	218,665		47.1	%	240,810		45.9	%		242,234		44.1	%
Bridge - equipment finance	77,808		18.4	%	105,030		22.8	%		74,887		15.7	%

	$	1,684,666			$	1,983,191				$	1,758,654

~~The portfolio included~~ ~~173~~ ~~loans modified in TDRs with a recorded investment of~~ ~~$92.4 million~~.

~~In the aggregate, the ALLL related to taxi medallion loans was 10.9% of the outstanding balance at September 30, 2017, compared to 6.0% at December 31, 2016. Charge-offs of $35.3 million~~Payment Deferrals and ~~$47.1 million were recognized~~Modifications

We believe, in the ~~three and nine months ended September 30, 2017 related to taxi medallion loans.~~

Wecurrent environment, information about loans that are no longer originating new taxi medallion loans. Our portfolio management strategies include, but are not limited to, working with borrowers experiencing cash flow challenges to provide short term relief and/or extended amortization periods, pro-actively attempting to refinance loans prior to maturity, continuing to monitor industry data and obtaining updated borrower and guarantor financial information. As taxi medallion loans approach maturity or are refinanced, we expect the number and amount of TDRs in this portfolio segment to continue to increase.

~~Hurricane Impact - Commercial Loans~~

~~Commercial loans totaling $1.9 million and $19.4 million had been modified or granted~~on temporary payment deferrals as of September 30, 2017 and October 31, 2017, respectively, related to the recent hurricanes. Of these modifications and deferrals, none were determined to be TDRs due to the generally insignificant nature of the payment delays.

~~As of September 30 and October 31, 2017, respectively, commercial loans to borrowers that have significant business operations in~~deferral or are secured by collateral in areas impacted by Hurricanes Irma and Harvey totaling approximately $4.7 million and $21.3 million were more than 30 days past due; $3.7 million of these loans were more than 30 days past due prior to the storms. Approximately $22.2 million of commercial loans have been ~~downgraded to criticized or classified status through October 31, 2017~~modified as a result of the ~~impact~~COVID-19 pandemic provides additional insight into segments or sub-segments of the ~~storms.~~portfolio that experienced some level of stress related to the pandemic and into how those loans are performing as the economy recovers. The following table summarizes deferral and modification activity in the commercial portfolio, as of June 30, 2021 (dollars in thousands):


	Under Short Term Deferral or CARES Act Modification at June 30, 2021		% of Portfolio Segment at June 30, 2021		Under Short Term Deferral or CARES Act Modification at March 31, 2021		Loans That Have Rolled Off of Short-Term Deferral or CARES Act Modification
CRE by Property Type:
Retail	$	15,871	1	%	$	36,615	$	2,636
Hotel	225,436		42	%	343,354		118,119
Office	44,860		2	%	56,542		—
Multifamily	13,872		1	%	24,014		10,142

Total CRE	300,039		5	%	460,525		130,897
C&I by Industry
Accommodation and Food Services	31,073		12	%	24,884		—
Retail Trade	32,371		11	%	33,644		1,274
Finance and Insurance	16,854		2	%	18,244		1,390
Other	31,994		3	%	80,168		59,734
Total C&I	112,292		2	%	156,940		62,398
Bridge - franchise finance	25,647		6	%	38,182		24,813

Total Commercial	$	437,978	3	%	$	655,647	$	218,108

~~Equipment Under~~ All of the loans that have rolled off of deferral or modification as shown in the table above have paid off or resumed regular payments. For commercial borrowers, short-term payment deferrals were generally deferrals of principal and/or interest payments for up to two periods of 90 days each. The deferred payments along with interest accrued during the deferral period are generally due and payable on the maturity date. CARES Act modifications represent longer-term modifications and most commonly have taken the form of 9 to 12 month interest only periods. The majority of loan modifications and deferrals that took place after the onset of the COVID-19 pandemic have not been categorized as TDRs, in accordance with interagency and authoritative guidance and the provisions of the CARES Act.

Operating Lease Equipment, net

~~Four~~Seven operating ~~lease relationships with assets under lease~~leases with a carrying value of assets under lease totaling ~~$81~~$45 million, all of which ~~$75 million~~ were exposures to the energy industry, were internally risk rated ~~special mention or~~ substandard at ~~September~~June 30, ~~2017. The present~~2021. On a quarterly basis, management performs an impairment analysis on assets with indicators of potential impairment. Potential impairment indicators include evidence of changes in residual value, macro-economic conditions, an extended period of ~~remaining lease payments on these leases totaled approximately $22 million~~time off-lease, criticized or classified status, or management's intention to sell the asset at ~~September~~an amount potentially below its carrying value. During the three and six months ended June 30, ~~2017, of which $17 million were exposures to the energy industry. There have been no missed payments~~2021 and 2020, impairment charges recognized related to ~~the~~ operating lease ~~portfolio to date. One relationship has been restructured to date, with no decrease in total minimum lease payments.~~equipment were insignificant.

The primary risks inherent in the equipment leasing business are asset risk resulting from ownership of the equipment on ~~operating~~ lease and credit risk. Asset risk arises from fluctuations in supply and demand for the underlying leased equipment. ~~Railcars are long-lived equipment with useful lives of approximately 35-50 years.~~ The equipment is leased to commercial ~~end-users~~end users with original lease terms generally ranging from ~~3-9 years at September 30, 2017.~~three to ten years. We are exposed to the risk that, at the end of the lease term, the value of the asset will be lower than expected, potentially resulting in reduced future lease income over the remaining life of the asset or a lower sale value. Asset risk may also lead to changes in depreciation as a result of changes in the residual values of the ~~operating lease~~leased assets or ~~through~~ impairment of asset carrying values.

Asset risk is evaluated and managed by a dedicated internal staff of asset managers, managed by seasoned equipment finance professionals with a broad depth and breadth of experience in the leasing business. Additionally, we have partnered with an industry leading, experienced service provider who provides fleet management and servicing relating to the railcar fleet, including lease administration and reporting, a Regulation Y compliant full service maintenance program and railcar re-marketing. Risk is managed by setting appropriate residual values at inception and systematic reviews of residual values based on independent appraisals, performed at least annually. Additionally, our internal management team and our external service provider closely follow the rail markets, monitoring traffic flows, supply and demand trends and the impact of new technologies and regulatory requirements. Demand for railcars is sensitive to shifts in general and industry specific economic and market

trends and shifts in trade flows from specific events such as natural or man-made ~~disasters.~~disasters, including events such as the COVID-19 pandemic. We seek to mitigate these risks by leasing to a stable ~~end-user~~end user base, by maintaining a relatively young and diversified fleet of assets that are expected to maintain stronger and more stable utilization rates despite impacts from unexpected events or cyclical trends and by staggering lease maturities. We regularly monitor the impact of ~~lower~~ oil prices on the estimated residual value of rail cars being used in the petroleum/natural gas extraction sector.

Credit risk in the leased equipment portfolio results from the potential default of lessees, possibly driven by obligor specific or industry-wide conditions, and is economically less significant than asset risk, because in the operating lease business, there is no extension of credit to the obligor. Instead, the lessor deploys a portion of the useful life of the asset. Credit losses, if any, will manifest through reduced rental income due to missed payments, time off lease, or lower rental payments due either to a restructuring or re-leasing of the asset to another obligor. Credit risk in the operating lease portfolio is managed and monitored utilizing credit administration infrastructure, processes and procedures similar to those used to manage and monitor credit risk in the commercial loan portfolio. We also mitigate credit risk in this portfolio by leasing ~~only~~ to high credit quality obligors.

~~We expect our~~Bridge had exposure to the energy industry of $316 million at June 30, 2021. The majority of the energy exposure was in the operating lease equipment portfolio ~~to continue to grow,~~where energy exposure totaled $271 million. The remaining energy exposure, totaling approximately $46 million was comprised of loans and ~~we may expand into other asset classes.~~

~~Based on our initial analysis of the location and condition of equipment under operating lease, we do not currently believe there has been any significant damage to such equipment~~direct or ~~to the ongoing operations of lessees from Hurricanes Irma and Harvey.~~sales type finance leases.

Residential and Other Consumer Loans

~~The majority of our non-covered~~Our residential mortgage portfolio, excluding GNMA buyout loans, consists primarily of loans purchased through established correspondent channels. ~~In general, we purchase~~Most of our purchases are of performing jumbo mortgage loans which have FICO scores above 700, primarily are owner-occupied and full documentation, and have a current LTV of 80% or less although loans with LTVs higher than 80% may be extended to selected credit-worthy borrowers. We perform due diligence on the purchased loans for credit, compliance, counterparty, payment history and property valuation.

~~The following tables show~~We have a dedicated residential credit risk management function, and the ~~distribution~~residential portfolio is monitored by our internal credit review function. Residential mortgage loans and consumer loans are not individually risk rated. Delinquency status is the primary measure we use to monitor the credit quality of ~~non-covered~~these loans. We also consider original LTV and most recently available FICO score to be significant indicators of credit quality for the 1-4 single family residential portfolio, excluding government insured residential loans.

The following charts present information about the 1-4 single family residential portfolio, excluding government insured loans, by ~~original~~ FICO distribution, LTV distribution and ~~LTV as~~vintage at June 30, 2021:

FICO scores are generally updated at least annually, and were most recently updated in the first quarter of 2021. LTVs are typically based on valuation at origination since we do not routinely update residential appraisals.

At June 30, 2021, the majority of the ~~dates indicated:~~

September 30, 2017
FICO
LTV 720 or less 721 - 740 741 - 760 761 or
greater Total
60% or less 2.4 % 2.8 % 4.6 % 20.4 % 30.2 %
60% - 70% 2.3 % 2.6 % 3.5 % 14.6 % 23.0 %
70% - 80% 3.5 % 4.4 % 7.9 % 27.2 % 43.0 %
More than 80% 0.6 % 0.5 % 0.6 % 2.1 % 3.8 %
8.8 % 10.3 % 16.6 % 64.3 % 100.0 %

December 31, 2016
FICO
LTV 720 or less 721 - 740 741 - 760 761 or
greater Total
60% or less 2.5 % 3.2 % 4.7 % 21.7 % 32.1 %
60% - 70% 2.3 % 2.7 % 3.6 % 15.1 % 23.7 %
70% - 80% 3.2 % 4.3 % 8.0 % 26.1 % 41.6 %
More than 80% 0.7 % 0.3 % 0.4 % 1.2 % 2.6 %
8.7 % 10.5 % 16.7 % 64.1 % 100.0 %

~~At September 30, 2017, the non-covered~~ 1-4 single family residential loan portfolio, ~~had the following characteristics: substantially all were full documentation with a weighted-average FICO score of 765 and a weighted-average LTV of 66.6%. The majority of this portfolio~~excluding government insured residential loans, was owner-occupied, with ~~87.9%~~83% primary residence, ~~8.3%~~7% second homes and ~~3.8%~~10% investment properties. ~~In terms of vintage, 22.2% of the portfolio was originated pre-2014, 13.1% in 2014, 22.2% in 2015, 26.0% in 2016 and 16.5% in 2017.~~

~~Non-covered~~ 1-4 single family residential loans excluding government insured residential loans past due more than 30 days totaled ~~$17.1~~$78 million and ~~$12.7~~$66 million at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively. The amount of these loans 90 days or more past due was ~~$2.7~~$23.4 million and ~~$2.1~~$9.2 million at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively. Delinquency statistics as of June 30, 2021 may not be fully reflective of the impact of the COVID-19 pandemic on residential borrowers due to payment deferral programs. Loans on deferral that are in compliance with the terms of the deferral program are not reported as delinquent.

~~Hurricane Impact- Residential~~

At June 30, 2021, $59 million or 1% of 1-4 single family residential loans,

excluding government insured residential loans, were under short-term deferral or modified due to the COVID-19 pandemic. Through June 30, 2021, $532 million of residential loans, excluding government insured loans, had been granted at least one short term payment deferral. The following table presents information ~~related~~about residential loans granted payment deferrals as a result of the COVID-19 pandemic as of June 30, 2021, excluding government insured residential loans (dollars in thousands):


			Loans That Have Rolled Off of Short-Term Deferral or CARES Act Modification
Loans Still Under Short-Term Deferral or CARES Act Modification			Paid Off or Paying as Agreed			Not Resumed Regular Payments
Balance		% of Loans Initially Granted Short-Term Deferral(1)	Balance		% of Loans Rolled Off Short-Term Deferral	Balance		% of Loans Rolled Off Short-Term Deferral
$	58,719	1%	$	438,903	93%	$	33,959	7%

(1) Includes $20 million of loans modified under the CARES Act that are continuing to ~~1-4 single family~~make payments

For residential ~~mortgages~~borrowers, relief has typically initially taken the form of 90 day payment deferrals, with ~~borrowers and/or collateral located in areas impacted by Hurricanes Irma and Harvey,~~deferred payments due at the ~~dates indicated (in thousands):~~

September 30, 2017 October 31, 2017
Past due more than 30 days:
Covered loans $ 14,669
$ 13,454
Total $ 20,099
$ 21,350
Granted temporary payment deferrals:
Covered loans $ 14,807
$ 16,983
Total $ 24,772
$ 25,969

~~Other Consumer Loans~~

~~Substantially all consumer loans were current at September 30, 2017. At December 31, 2016, there were no delinquent consumer loans.~~

~~Covered Loans~~

At September 30, 2017, residential ACI loans totaled $476 million and residential non-ACI loans totaled $62 million, including premiums, discounts and deferred fees and costs. All of these loans are covered under the Single Family Shared-Loss Agreement.

~~Covered residential loans were placed into homogenous pools at the time~~end of the ~~FSB Acquisition and~~90 day period. At the ~~ongoing~~end of the initial 90 day deferral period, residential borrowers may either (i) make all payments due, (ii) be granted an additional deferral period or (iii) enter into a modification or repayment plan.

Note 4 to the consolidated financial statements presents additional information about key credit quality indicators and ~~performance~~delinquency status of ~~these loans is monitored on a pool basis. We monitor~~ the pools quarterly to determine whether any changes have occurred in expected cash flows that would be indicative of impairment or necessitate reclassification between non-accretable difference and accretable yield. At September 30, 2017, accretable yield on residential ACI loans totaled $511 million and non-accretable difference related to those loans totaled $227 million.

At September 30, 2017, the recorded investment in non-ACI 1-4 single family residential loans was $24.6 million; $1.6 million or 6.6% of these loans were 30 days or more past due and $0.9 million or 3.8% of these loans were 90 days or more past due. At September 30, 2017, the recorded investment in ACI 1-4 single family residential loans totaled $470.3 million; $34.2 million or 7.3% of these loans were delinquent by 30 days or more and $17.6 million or 3.7% were delinquent by 90 days or more.

At September 30, 2017, non-ACI home equity loans and lines of credit had an aggregate recorded investment of $37.4 million; $4.1 million or 11.1% of these loans were 30 days or more past due and $2.4 million or 6.3% were 90 days or more past due. ACI home equity loans and lines of credit had a carrying amount of $5.6 million at September 30, 2017; 13.5% of these loans were delinquent by 30 days or more.

Home equity lines of credit generally provide that payment terms be reset after an initial contractual period of interest only payments, requiring the pay down of principal through balloon payments or amortization. Additional information regarding ACI and non-ACI home equity lines of credit at September 30, 2017 is summarized as follows:

ACI Non-ACI
Loans resetting from interest only:

Previously reset 72.3 % 51.5 %
Scheduled to reset within 12 months 2.5 % 5.5 %
Scheduled to reset after 12 months 25.2 % 43.0 %
100.0 % 100.0 %
Lien position:

First liens 10.3 % 18.8 %
Second or third liens 89.7 % 81.2 %
100.0 % 100.0 %

The Company's exposure to loss related to covered loans is significantly mitigated by the Single Family Shared-Loss Agreement and by the fair value basis recorded in these assets resulting from the application of acquisition accounting. Management regularly evaluates the impact of resets of interest only loans on default rates for the covered home equityloan portfolio.

~~Impaired Loans and~~ Non-Performing Assets

Non-performing assets generally consist of (i) non-accrual loans, including loans that have been modified in TDRs or CARES Act modifications and placed on non-accrual status, (ii) accruing loans that are more than 90 days contractually past due as to interest or principal, excluding ~~ACI~~PCD loans for which management has a reasonable basis for an expectation about future cash flows and government insured residential loans, and (iii) OREO and repossessed assets. Impaired loans also typically include loans modified in TDRs that are accruing and ACI loans or pools for which expected cash flows at acquisition (as adjusted for any additional cash flows expected to be collected arising from changes in estimates after acquisition) have been revised downward since acquisition, other than due to changes in interest rate indices and prepayment assumptions.

The following ~~tables~~table and charts summarize the Company's ~~impaired~~non-performing loans and non-performing assets at the dates indicated (dollars in thousands):


	June 30, 2021			March 31, 2021			December 31, 2020

Non-accrual loans:
Residential and other consumer:
1-4 single family residential	$	43,646		$	23,159		$	26,842
Other consumer loans	1,907			1,904			1,986
Total residential and other consumer loans	45,553			25,063			28,828
Commercial:
Multi-family	7,069			12,701			24,090
Non-owner occupied commercial real estate	51,320			63,785			64,017
Construction and land	4,784			4,788			4,754
Owner occupied commercial real estate	26,582			23,451			23,152
Commercial and industrial	123,818			66,491			54,584

Bridge - franchise finance	33,405			36,276			45,028

Total commercial loans	246,978			207,492			215,625
Total non-accrual loans	292,531			232,555			244,453
Loans past due 90 days and still accruing	132			1,077			—
Total non-performing loans	292,663			233,632			244,453
OREO and repossessed assets	3,890			2,726			3,138
Total non-performing assets	$	296,553		$	236,358		$	247,591

Non-performing loans to total loans (1)	1.28		%	1.00		%	1.02		%
Non-performing assets to total assets (1)	0.83		%	0.67		%	0.71		%
ACL to total loans	0.77		%	0.95		%	1.08		%
ACL to non-performing loans	60.02		%	94.56		%	105.26		%

Net charge-offs to average loans (2)	0.24		%	0.17		%	0.26		%

September 30, 2017 December 31, 2016
Covered
Assets Non-Covered
Assets Total
Covered
Assets

Non-Covered
Assets
Total
Non-accrual loans
Residential and other consumer:
1 - 4 single family residential $ 934
$ 1,890
$ 2,824
$ 918
$ 566
$ 1,484
Home equity loans and lines of credit 2,369
—
2,369
2,283
—
2,283
Other consumer loans —
332
332
—
2
2
Total residential and other consumer loans 3,303
2,222
5,525
3,201
568
3,769
Commercial:
Non-owner occupied commercial real estate —
9,930
9,930
—
559
559
Construction and land —
1,238
1,238
—
1,238
1,238
Owner occupied commercial real estate —
21,455
21,455
—
19,439
19,439
Commercial and industrial

Taxi medallion loans —
120,572
120,572
—
60,660
60,660
Other commercial and industrial —
27,569
27,569
—
16,036
16,036
Commercial lending subsidiaries —
16,625
16,625
—
32,645
32,645
Total commercial loans —
197,389
197,389
—
130,577
130,577
Total non-accrual loans 3,303
199,611
202,914
3,201
131,145
134,346
Non-ACI and new loans past due 90 days and still accruing —
846
846
—
1,551
1,551
Total non-performing loans 3,303
200,457
203,760
3,201
132,696
135,897
OREO 4,114
1,661
5,775
4,658
4,882
9,540
Repossessed assets —
2,457
2,457
—
3,551
3,551
Total non-performing assets 7,417
204,575
211,992
7,859
141,129
148,988
Impaired ACI loans and pools on accrual status 5,640
—
5,640
—
1,335
1,335
Performing TDRs

Taxi medallion loans —
—
—
—
36,848
36,848
Other 10,786
19,365
30,151
11,166
26,282
37,448
Total impaired loans and non-performing assets $ 23,843
$ 223,940
$ 247,783
$ 19,025
$ 205,594
$ 224,619

Non-performing loans to total loans ^{(1) (3)}
1.00 % 0.99 % 0.71 % 0.70 %
Non-performing assets to total assets ⁽²⁾
0.69 % 0.72 % 0.51 % 0.53 %
ALLL to total loans ⁽¹⁾
0.77 % 0.77 % 0.80 % 0.79 %
ALLL to non-performing loans 76.69 % 77.82 % 113.68 % 112.55 %
Net charge-offs to average loans ^{(4) (5)}
0.40 % 0.39 % 0.13 % 0.13 %


~~(1)~~			~~Total loans for purposes of calculating these ratios include premiums, discounts and deferred fees and costs.~~


~~(2)~~	~~Ratio for non-covered assets is calculated as non-performing non-covered assets to total assets.~~


~~(3)~~	~~Non-performing taxi medallion loans comprised 0.60% and 0.32% of total non-covered loans at September 30, 2017 and December 31, 2016, respectively.~~


~~(4)~~	~~Annualized for September 30, 2017.~~


~~(5)~~	~~The annualized ratio of charge-offs of taxi medallion loans to average non-covered loans was 0.33% and 0.06% for the nine months ended September 30, 2017 and the year ended December 31, 2016.~~

The general quantitative loss factor for municipal finance receivables is based on the portfolio's external ratings and Moody's historical transition matrix, as opposed to the historical cumulative default curve for municipal obligations that was used previously.

For loans that are partially guaranteed by the SBA, the loss factor applied to the non-guaranteed portion of these loans is based on the 16-quarter average charge-off rate published by the SBA for each program

~~Mortgage warehouse loans have been segregated for the purpose of determining a quantitative loss factor, to better recognize the risk profile of this portfolio segment.~~

~~The net impact of these changes on the ALLL was not material.~~

The peer group used to calculate the average annual historical net charge-off rates that form the basis for our general reserve calculations for the majority of new commercial, home equity and consumer loans is made up of the banks included in the OCC Midsize Bank Group plus two additional banks in the New York region that management believes to be comparable based on size and nature of lending operations. The OCC Midsize Bank Group primarily includes commercial banks with total assets ranging from $10 - $50 billion and included 28 banks at September 30, 2017. Peer bank data is obtained from the Statistics on Depository Institutions Report published by the FDIC for the most recent quarter available. These banks, as a group, are considered by management to be comparable to BankUnited in size, nature of lending operations and loan portfolio composition. We evaluate the composition of the peer group annually, or more frequently if, in our judgment, a more frequent evaluation is necessary. Our internal risk rating system comprises 13 credit grades; grades 1 through 8 are “pass” grades. The risk ratings are driven largely by debt service coverage. Peer group historical loss rates are adjusted upward for loans assigned a lower “pass” rating.

We use a 16-quarter loss experience period to calculate peer group average annual net charge-off rates for commercial loans. We believe this look-back period to be consistent with the range of industry practice and appropriate to capture a sufficient range of observations reflecting the performance of our loans, most of which were originated in the current economic cycle. Prior to the third quarter of 2017, we used a four-quarter loss experience period for the taxi medallion portfolio to recognize the recent deterioration in that portfolio. We use a 14-quarter loss experience period for the Bridge portfolios, reflective of the period over which an observable loss trend began to emerge.

With the exception of the Pinnacle municipal finance portfolio, a four quarter loss emergence period is used in the calculation of general reserves. A twelve quarter loss emergence period is used in the calculation of general reserves for the Pinnacle portfolio.

Qualitative ~~Factors~~factors

Qualitative adjustments are made to the ~~ALLL~~ACL when, based on management’s judgment, there are ~~internal or external~~ factors impacting ~~probable incurred~~expected credit losses not taken into account by the quantitative calculations. Potential qualitative adjustments are categorized as follows:

~~Portfolio performance trends, including trends in and the levels of delinquencies, non-performing loans and classified loans;~~ •Economic factors;

~~Changes in the nature of the portfolio and terms of the loans, specifically including the volume and nature of~~•Credit policy and ~~procedural exceptions;~~staffing;

~~Portfolio growth trends;~~ •Concentrations;

~~Changes in lending policies~~•Model imprecision; and ~~procedures, including credit and underwriting guidelines;~~

~~Economic factors, including unemployment rates and GDP growth rates;~~

~~Changes in the value of underlying collateral;~~

~~Quality of risk ratings, as evaluated by our independent credit review function;~~

~~Credit concentrations;~~

~~Changes in and experience levels of credit administration management and staff; and~~

•Other factors ~~identified~~deemed appropriate by management that may materially impact the ~~level of losses inherent in the portfolio, including but not limited to competition and legal and regulatory considerations.~~

~~ACILoans~~

~~For ACI loans, a valuation allowance is established when periodic evaluations~~amount of expected ~~cash flows reflect a deterioration resulting from~~ credit ~~related factors from~~losses.

See Note 1 to the level of cash flows that were estimated to be collected at acquisition plus any additional expected cash flows arising from revisions in those estimates. We perform a quarterly analysis of expected cash flows for ACI loans.

Expected cash flows are estimated on a pool basis for ACI 1-4 single family residential and home equity loans. The analysis of expected pool cash flows incorporates updated pool level expected prepayment rate, default rate, delinquency level and loss severity given default assumptions. Prepayment, delinquency and default curves are derived primarily from roll rates generated from the historical performanceconsolidated financial statements of the portfolio over the immediately preceding four quarters. Loss severity given default assumptions are generated from the historical performance of the portfolio over the immediately preceding four quarters, while loss severity from loan sales is generated from historical performance over the immediately preceding twelve quarters. Estimates of default probability and loss severity given default also incorporate updated LTV ratios, at the loan level, basedCompany's 2020 Annual report on ~~Case-Shiller Home Price Indices~~Form 10-K for the relevant MSA. Costs and fees represent an additional component of loss on default and are projected based on historical experience over the last three years. The ACI home equity roll rates include the impact of delinquent, related senior liens and loans to borrowers who have not reaffirmed their debt discharged in Chapter 7 bankruptcy.

Our projected cash flow analysis reflected a decrease in expected cash flows due to credit related factors for the home equity ACI pool; therefore, a provision for loan losses of $1.8 million was recorded for the nine months ended September 30, 2017, along with a corresponding increase in the FDIC indemnification asset of $1.4 million. No ALLL related to 1-4 single family residential ACI pools was recorded at September 30, 2017. No ALLL related to 1-4 single family residential and home equity ACI pools was recorded at December 31, 2016.

The primary assumptions underlying estimates of expected cash flows for ACI commercial loans are default probability and severity of loss given default. Assessments of default probability and severity are based on net realizable value analyses prepared at the individual loan level. Based onmore detailed information about our ~~analysis, no ALLL related to ACI commercial loans was recorded at September 30, 2017 or December 31, 2016.~~

ACL methodology.

The following ~~tables provide~~table provides an analysis of the ~~ALLL,~~ACL, provision for ~~loan~~credit losses related to the funded portion of loans and net charge-offs by loan segment for the periods indicated (in thousands):


	Residential and Other Consumer Loans			Multi-family			Non-owner Occupied Commercial Real Estate			Construction and Land			Owner Occupied Commercial Real Estate			Commercial and Industrial			Pinnacle			Bridge - Franchise Finance			Bridge - Equipment Finance			Total
















Balance at December 31, 2020	$	18,719		$	39,827		$	61,507		$	3,284		$	28,797		$	62,197		$	304		$	36,331		$	6,357		$	257,323
Provision for (recovery of) credit losses	(6,802)			(25,813)			(25,852)			(2,185)			(3,609)			22,702			(93)			(11,157)			(1,160)			(53,969)
Charge-offs	(14)			(6,470)			(493)			—			(346)			(13,486)			—			(9,585)			—			(30,394)
Recoveries	6			233			84			—			57			2,302			—			—			—			2,682
Balance at June 30, 2021	$	11,909		$	7,777		$	35,246		$	1,099		$	24,899		$	73,715		$	211		$	15,589		$	5,197		$	175,642

Balance at December 31, 2019	$	11,154		$	5,024		$	23,240		$	764		$	8,066		$	43,485		$	720		$	9,163		$	7,055		$	108,671
Impact of adoption of ASU 2016-13	8,098			(780)			(13,442)			1,854			23,240			8,841			(309)			(133)			(64)			27,305
Balance at January 1, 2020	19,252			4,244			9,798			2,618			31,306			52,326			411			9,030			6,991			135,976
Provision for (recovery of) credit losses	(8,572)			16,803			75,109			766			5,205			31,735			(173)			26,527			6,049			153,449
Charge-offs	(31)			—			(552)			—			(187)			(2,933)			—			(16,561)			(6,720)			(26,984)
Recoveries	45			2			82			—			92			3,012			—			449			—			3,682
Balance at June 30, 2020	$	10,694		$	21,049		$	84,437		$	3,384		$	36,416		$	84,140		$	238		$	19,445		$	6,320		$	266,123

Net Charge-offs to Average Loans (1)

Six Months Ended June 30, 2021	—		%	0.84		%	0.02		%	—		%	0.03		%	0.38		%	—		%	3.77		%	—		%	0.24		%
Six Months Ended June 30, 2020	—		%	—		%	0.02		%	—		%	0.01		%	—		%	—		%	5.07		%	2.09		%	0.20		%

(1) Annualized.

Nine Months Ended September 30, 2017
Covered Loans
Non-Covered Loans ACI Loans Non-ACI Loans Total
Balance at December 31, 2016 $ 150,853
$ —
$ 2,100
$ 152,953
Provision for (recovery of) loan losses:
1-4 single family residential (4 ) —
212
208
Home equity loans and lines of credit —
1,812
714
2,526
Other consumer loans (48 ) —
—
(48 )
Multi-family (3,303 ) —
—
(3,303 )
Non-owner occupied commercial real estate 4,032
—
—
4,032
Construction and land (9 ) —
—
(9 )
Owner occupied commercial real estate 4,884
—
—
4,884
Commercial and industrial
Taxi medallion loans 49,604
—
—
49,604
Other commercial and industrial 9,338
—
(45 ) 9,293
Commercial lending subsidiaries (8,614 ) —
—
(8,614 )
Unallocated 5,000
—
—
5,000
Total Provision 60,880
1,812
881
63,573
Charge-offs:
Home equity loans and lines of credit —
—
(55 ) (55 )
Non-owner occupied commercial real estate (162 ) —
—
(162 )
Owner occupied commercial real estate (1,164 ) —
—
(1,164 )
Commercial and industrial
Taxi medallion loans (47,141 ) —
—
(47,141 )
Other commercial and industrial (12,567 ) —
—
(12,567 )
Commercial lending subsidiaries —
—
—
—
Total Charge-offs (61,034 ) —
(55 ) (61,089 )
Recoveries:
Home equity loans and lines of credit —
—
65
65
Other consumer loans 21
—
—
21
Owner occupied commercial real estate 2
—
—
2
Commercial and industrial
Other commercial and industrial 2,400
—
45
2,445
Commercial lending subsidiaries 603
—
—
603
Total Recoveries 3,026
—
110
3,136
Net Charge-offs: (58,008 ) —
55
(57,953 )
Balance at September 30, 2017 $ 153,725
$ 1,812
$ 3,036
$ 158,573

Nine Months Ended September 30, 2016
Covered Loans
Non-Covered Loans ACI Loans Non-ACI Loans Total
Balance at December 31, 2015 $ 120,960
$ —
$ 4,868
$ 125,828
Provision for (recovery of) loan losses:
1-4 single family residential (324 ) —
23
(301 )
Home equity loans and lines of credit 2
—
(1,097 ) (1,095 )
Other consumer loans (98 ) —
—
(98 )
Multi-family 1,509
—
—
1,509
Non-owner occupied commercial real estate 7,563
—
—
7,563
Construction and land (980 ) —
—
(980 )
Owner occupied commercial real estate 4,854
—
—
4,854
Commercial and industrial
Taxi medallion loans 9,679
—
—
9,679
Other commercial and industrial 16,686
—
(45 ) 16,641
Commercial lending subsidiaries 4,677
—
—
4,677
Total Provision 43,568
—
(1,119 ) 42,449
Charge-offs:
1-4 single family residential —
—
(312 ) (312 )
Home equity loans and lines of credit —
—
(774 ) (774 )
Non-owner occupied commercial real estate (128 ) —
—
(128 )
Construction and land (93 ) —
—
(93 )
Owner occupied commercial real estate (2,615 ) —
—
(2,615 )
Commercial and industrial
Taxi medallion loans (4,235 ) —
—
(4,235 )
Other commercial and industrial (7,245 ) —
—
(7,245 )
Commercial lending subsidiaries (1,432 ) —
—
(1,432 )
Total Charge-offs (15,748 ) —
(1,086 ) (16,834 )
Recoveries:
Home equity loans and lines of credit —
—
77
77
Other consumer loans 18
—
—
18
Owner occupied commercial real estate 1,175
—
—
1,175
Commercial and industrial
Other commercial and industrial 440
—
45
485
Commercial lending subsidiaries 1,278
—
—
1,278
Total Recoveries 2,911
—
122
3,033
Net Charge-offs: (12,837 ) —
(964 ) (13,801 )
Balance at September 30, 2016 $ 151,691
$ —
$ 2,785
$ 154,476

The following ~~tables show~~table shows the distribution of the ~~ALLL, broken out between covered and non-covered loans,~~ACL at the dates indicated (dollars in thousands):

September 30, 2017
Covered Loans
Non-Covered Loans ACI Loans
Non-ACI
Loans
Total
%⁽¹⁾
Residential and other consumer:

1 - 4 single family residential $ 9,275
$ —
$ 393
$ 9,668
21.7 %
Home equity loans and lines of credit 7
1,812
2,643
4,462
0.2 %
Other consumer loans 90
—
—
90
0.1 %
9,372
1,812
3,036
14,220
22.0 %
Commercial:
Multi-family 21,706
—
—
21,706
16.3 %
Non-owner occupied commercial real estate 39,474
—
—
39,474
20.4 %
Construction and land 2,815
—
—
2,815
1.3 %
Owner occupied commercial real estate 15,146
—
—
15,146
9.5 %
Commercial and industrial
Taxi medallion loans 13,117
—
—
13,117
0.8 %
Other commercial and industrial 37,239
—
—
37,239
18.2 %
Commercial lending subsidiaries 9,856
—
—
9,856
11.5 %
139,353
—
—
139,353
78.0 %
Unallocated 5,000
—
—
5,000

$ 153,725
$ 1,812
$ 3,036
$ 158,573
100.0 %

December 31, 2016
Covered Loans
Non-Covered Loans ACI Loans
Non-ACI
Loans
Total
%⁽¹⁾
Residential and other consumer:

1 - 4 single family residential $ 9,279
$ —
$ 181
$ 9,460
20.6 %
Home equity loans and lines of credit 7
—
1,919
1,926
0.3 %
Other consumer loans 117
—
—
117
0.1 %
9,403
—
2,100
11,503
21.0 %
Commercial:
Multi-family 25,009
—
—
25,009
19.8 %
Non-owner occupied commercial real estate 35,604
—
—
35,604
19.3 %
Construction and land 2,824
—
—
2,824
1.6 %
Owner occupied commercial real estate 11,424
—
—
11,424
9.0 %
Commercial and industrial
Taxi medallion loans 10,655
—
—
10,655
0.9 %
Other commercial and industrial 38,067
—
—
38,067
16.6 %
Commercial lending subsidiaries 17,867
—
—
17,867
11.8 %
141,450
—
—
141,450
79.0 %
$ 150,853
$ —
$ 2,100
$ 152,953
100.0 %


	June 30, 2021				March 31, 2021				December 31, 2020
	Total		%(1)		Total		%(1)			Total		%(1)
Residential and other consumer	$	11,909	30.9	%	$	15,843	28.1	%		$	18,719	26.6	%

Multi-family	7,777		5.5	%	45,757		6.5	%		39,827		6.9	%
Non-owner occupied commercial real estate	35,246		20.7	%	46,915		20.9	%		61,507		20.8	%
Construction and land	1,099		1.0	%	2,467		1.2	%		3,284		1.2	%
CRE	44,122				95,139					104,618

Owner occupied commercial real estate	24,899		8.6	%	24,445		8.3	%		28,797		8.4	%
Commercial and industrial	73,715		24.9	%	54,151		26.1	%		62,197		27.2	%
Pinnacle	211		4.6	%	213		4.7	%		304		4.6	%
Bridge - franchise finance	15,589		2.0	%	24,411		2.2	%		36,331		2.3	%
Bridge - equipment finance	5,197		1.8	%	6,732		2.0	%		6,357		2.0	%
Commercial	119,611				109,952					133,986
	$	175,642	100.0	%	$	220,934	100.0	%		$	257,323	100.0	%


~~(1)~~	~~Represents percentage of loans receivable in each category to total loans receivable.~~

(1)Represents percentage of loans receivable in each category to total loans receivable.

The ~~ALLL~~following table presents the ACL as a percentage of loans at ~~September 30, 2017 included $5.4 million related~~the dates indicated:


	June 30, 2021		March 31, 2021		December 31, 2020

Residential and other consumer	0.17	%	0.24	%	0.29	%
Commercial:
Commercial real estate	0.71	%	1.43	%	1.52	%
Commercial and industrial	1.28	%	0.98	%	1.07	%
Pinnacle	0.02	%	0.02	%	0.03	%
Bridge - franchise finance	3.37	%	4.65	%	6.61	%
Bridge - equipment finance	1.23	%	1.46	%	1.34	%
Total commercial	1.04	%	1.22	%	1.36	%
	0.77	%	0.95	%	1.08	%

Significant offsetting factors contributing to the ~~impact of Hurricanes Irma and Harvey. The ALLL includes $0.4 million related to loans that were downgraded~~change in the ACL during the three months ended ~~September~~June 30, ~~2017 as a result of~~2021 are depicted in the ~~hurricanes and a $5.0 million unallocated qualitative allowance.~~chart below (in millions):

~~Excluding~~

Changes in the ~~$5.0 million unallocated qualitative allowance relative~~ACL during the three months ended June 30, 2021

The decrease in the ACL from March 31, 2021 to ~~the impact of the hurricanes, the balance of the ALLL~~June 30, 2021 for ~~non-covered loans at September 30, 2017 decreased slightly as compared to December 31, 2016. Decreases in quantitative loss factors applied to~~ the majority of ~~the commercial loan~~ portfolio ~~and net decreases~~sub-segments resulted largely from an improving economic forecast, improvement in qualitative factors were substantially offset by the impact of the growth of the loan portfolio and an increase in reserves for criticized and classified loans, including taxi medallion loans. Factors influencing the changeborrower financial results as reflected in the ~~ALLL related to specific loan types at September 30, 2017 as compared to December 31, 2016, include:~~

The ALLL related to non-covered 1-4 single family residential loans did not change significantly. Increases related to growth in the corresponding portfolio were substantially offset by declines in both the applicable quantitative historical loss rate and qualitative reserves.

A decrease of $3.3 million for multi-family loans primarily reflects decreases in quantitative loss factors, the decline in the corresponding portfolio and a net decrease in qualitative loss factors, offset in part by an increase in criticized and classified loans.

~~An increase of~~ ~~$3.9 million~~ ~~for non-owner occupied commercial real estate loans was primarily driven by the growth of the corresponding portfolio and an increase~~reduction in criticized and classified loans, ~~partially offset~~changes in portfolio composition including the decline in commercial loan balances, a reduction in certain qualitative loss factors and charge-offs.

The ACL for residential and other consumer loans decreased by $3.9 million during the quarter ended June 30, 2021, from 0.24% to 0.17% of loans. This decrease was primarily driven by improvements in the unemployment and HPI forecasts and the impact of loans that rolled off of deferral and resumed regular payments. In the aggregate, the ACL for the CRE portfolio sub-segment, including multi-family, non-owner occupied CRE and construction and land, decreased by $51.0 million during the quarter ended June 30, 2021, from 1.43% to 0.71% of loans. The ACL for multi-family loans decreased by $38.0 million. These decreases related primarily to improvement in the economic forecast, particularly the unemployment and commercial property forecasts and a decrease in ~~quantitative loss factors.~~

~~An increase of $3.7 million~~criticized and classified loans. The ACL for ~~owner occupied commercial real estate loans was primarily attributable to increases in specific reserves for impaired loans and to a lesser extent, the growth of the corresponding portfolio.~~

An increase of $2.5 million for taxi medallion loans reflects the specific reserves recognized at September 30, 2017, as discussed previously. Increases in reserves were limited due to the level of charge-offs recognized during the nine months ended September 30, 2017.

~~A decrease of~~ ~~$0.8 million~~ ~~for other~~ commercial and industrial loans was ~~primarily driven~~impacted by ~~a decrease~~an increase of $27.2 million in ~~reserves~~the specific reserve related to one $69 million relationship,

The ACL for ~~impaired and other classified loans,~~the Bridge franchise portfolio decreased by $8.8 million, primarily due to ~~net charge-offs, offset~~the decline in criticized and classified loans and the reduction in certain qualitative loss factors.

Changes in the ACL during the three months ended March, 31, 2021:

The decrease in the ACL from December 31, 2020 to March 31, 2021 for the majority of portfolio sub-segments resulted largely from an improving economic forecast. The decrease was primarily related to the pass rated portion of the portfolio. The ACL for pass-rate loans, including residential loans, declined to $93 million at March 31, 2021 from $137 million at December 31, 2020. The ACL for non-pass rated loans increased to $128 million at March 31, 2021 from $120 million at December 31, 2020.

Some of the data points informing the reasonable and supportable economic forecast used in estimating the ACL at June 30, 2021 were:

•National unemployment at 5.2% for the third quarter of 2021, steadily declining to 4.5% through the end of 2021, and declining to 3.5% by the end of 2022;

•Annualized growth in ~~the corresponding portfolio.~~

A ~~$8.0 million~~ ~~decrease for commercial lending subsidiaries primarily reflects decreases in quantitative loss factors~~GDP at 6.7% for the ~~municipal finance receivables~~third quarter of 2021, increasing to 6.8% by the end of 2021, and ~~decreases in qualitative loss factors related to portfolio growth trends~~3.1% for 2022;

•VIX trending at stabilized levels through the forecast horizon; and ~~credit concentrations.~~

•S&P 500 averaging near 4,000 through the reasonable and supportable forecast period.

For additional information about the ~~ALLL,~~ACL, see Note 4 to the consolidated financial statements.

Deposits

Average balances and rates paid on deposits were as follows for the periods indicated (dollars in thousands):


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
	Average Balance		Average Rate Paid		Average Balance		Average Rate Paid		Average Balance		Average Rate Paid		Average Balance		Average Rate Paid
Demand deposits:
Non-interest bearing	$	8,163,879	—	%	$	5,313,009	—	%	$	7,829,422	—	%	$	4,840,781	—	%
Interest bearing	3,069,945		0.34	%	2,448,545		0.78	%	3,006,760		0.36	%	2,311,086		1.02	%
Savings and money market	13,541,237		0.36	%	10,450,310		0.67	%	13,169,195		0.36	%	10,431,256		1.06	%
Time	3,380,582		0.41	%	7,096,097		1.59	%	3,853,057		0.57	%	7,303,083		1.82	%
	$	28,155,643	0.25	%	$	25,307,961	0.80	%	$	27,858,434	0.29	%	$	24,886,206	1.07	%

Three Months Ended September 30, Nine Months Ended September 30,
�� 2017 2016 2017 2016
Average
Balance Average
Rate Paid Average
Balance Average
Rate Paid Average
Balance
Average
Rate Paid
Average
Balance Average
Rate Paid
Demand deposits:

Non-interest bearing $ 3,036,046
— % $ 2,981,017
— % $ 3,034,682
— % $ 2,944,861
— %
Interest bearing 1,590,206
0.85 % 1,437,677
0.62 % 1,564,229
0.76 % 1,341,218
0.61 %
Money market 9,590,333
0.90 % 7,948,299
0.64 % 9,187,225
0.80 % 7,778,761
0.63 %
Savings 378,179
0.24 % 400,982
0.22 % 370,682
0.19 % 424,915
0.24 %
Time 6,290,056
1.30 % 5,567,909
1.13 % 5,988,433
1.24 % 5,177,191
1.11 %
$ 20,884,820
0.87 % $ 18,335,884
0.67 % $ 20,145,251
0.80 % $ 17,666,946
0.65 %

~~Total~~The estimated amount of uninsured deposits at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016 included $2.3~~2020 was $20.4 billion and ~~$1.9~~$17.4 billion, ~~respectively,~~respectively. Time deposit accounts with balances of ~~brokered deposits.~~

$250,000 or more totaled $863 million and $1.1 billion at June 30, 2021 and December 31, 2020, respectively. The following table shows scheduled maturities of ~~certificates of deposit with denominations greater than or equal to $100,000~~uninsured time deposits as of ~~September~~June 30, ~~2017~~2021 (in thousands):


Three months or less	$	226,201
Over three through six months	187,105
Over six through twelve months	476,914
Over twelve months	19,313
	$	909,533

Three months or less $ 741,235
Over three through six months 1,037,771
Over six through twelve months 1,351,330
Over twelve months 931,302
$ 4,061,638

~~FHLB Advances, Notes and Other~~ Borrowings

In addition to deposits, we utilize FHLB advances ~~to fund growth in interest earning assets;~~as a funding source; the advances provide us with additional flexibility in managing both term and cost of ~~funding.~~funding and in managing interest rate risk. FHLB advances are secured by ~~FHLB stock,~~ qualifying residential first mortgage and commercial real estate ~~and home equity~~ loans, and MBS. ~~At September 30, 2017 and December 31, 2016,~~The following table presents information about the contractual balance of outstanding FHLB advances ~~totaled $4.9 billion and $5.2 billion, respectively.~~

~~The contractual balance~~as of ~~FHLB advances outstanding at September~~June 30, ~~2017 is scheduled to mature as follows (in~~2021 (dollars in thousands):

Maturing in:
2017—One month or less $ 2,395,000
2017—Over one month 855,000
2018 1,396,000
2019 100,000
2020 125,000
Carrying value $ 4,871,000


	Amount
Maturing in:
2021 - One month or less	$	655,000
2021 - Over one month	1,926,000


2024	100,000

Total contractual balance outstanding	2,681,000
Cumulative fair value hedging adjustments	505
Carrying Value	$	2,681,505

The table above reflects contractual maturities of outstanding advances and does not incorporate the impact that interest rate swaps designated as cash flow and fair value hedges have on the duration of borrowings.

The table below presents information about outstanding interest rate swaps hedging the variability of interest cash flows on or the fair value of FHLB advances included in the table above, as of June 30, 2021 (dollars in thousands):


	Notional Amount		Weighted Average Rate
Cash flow hedges maturing in:
2021	$	1,075,000	2.41	%
2022	210,000		2.48	%
2023	255,000		2.35	%
2024	110,000		2.54	%
2025	175,000		2.39	%
Thereafter	556,000		2.90	%
Cash flow hedges	2,381,000		2.53	%
Fair value hedges maturing in 2021	200,000
Total interest rate swaps designated as cash flow or fair value hedges	$	2,581,000

See Note 76 to the consolidated financial statements for more information about derivative instruments.

Outstanding ~~senior~~ notes payable and other borrowings consisted of the following at the dates indicated (in thousands):


	June 30, 2021		December 31, 2020
Senior notes:
Principal amount of 4.875% senior notes maturing on November 17, 2025	$	400,000	$	400,000
Unamortized discount and debt issuance costs	(3,792)		(4,174)
	396,208		395,826
Subordinated notes:
Principal amount of 5.125% subordinated notes maturing on June 11, 2030	300,000		300,000
Unamortized discount and debt issuance costs	(5,650)		(5,894)
	294,350		294,106
Total notes	690,558		689,932
Finance leases	31,081		32,563
Notes and other borrowings	$	721,639	$	722,495

September 30, 2017 December 31, 2016
Senior notes $ 393,564
$ 393,092
Capital lease obligations 9,264
9,717
$ 402,828
$ 402,809

~~Senior notes have a face amount of $400 million, a fixed coupon rate of 4.875% and mature on November 17, 2025.~~

Capital Resources

Pursuant to the FDIA, the federal banking agencies have adopted regulations setting forth a five-tier system for measuring the capital adequacy of the financial institutions they supervise. At ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016, BankUnited~~2020, the Company and the ~~Company~~Bank had capital levels that exceeded both the regulatory well-capitalized guidelines and all internal capital ratio targets.

~~Stockholders' equity~~

The following table provides information regarding regulatory capital for the Company and the Bank as of June 30, 2021 (dollars in thousands):



	Actual				Required to be Considered Well Capitalized				Required to be Considered Adequately Capitalized				Required to be Considered Adequately Capitalized Including Capital Conservation Buffer
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
BankUnited, Inc.:
Tier 1 leverage	$	3,139,889	8.81	%	N/A (1)		N/A (1)		$	1,425,286	4.00	%	N/A (1)		N/A (1)
CET1 risk-based capital	$	3,139,889	13.52	%	$	1,509,810	6.50	%	$	1,045,253	4.50	%	$	1,625,949	7.00	%
Tier 1 risk-based capital	$	3,139,889	13.52	%	$	1,858,228	8.00	%	$	1,393,671	6.00	%	$	1,974,367	8.50	%
Total risk-based capital	$	3,576,478	15.40	%	$	2,322,785	10.00	%	$	1,858,228	8.00	%	$	2,438,924	10.50	%
BankUnited:
Tier 1 leverage	$	3,491,270	9.84	%	$	1,774,797	5.00	%	$	1,419,838	4.00	%	N/A		N/A
CET1 risk-based capital	$	3,491,270	15.11	%	$	1,501,907	6.50	%	$	1,039,782	4.50	%	$	1,617,438	7.00	%
Tier 1 risk-based capital	$	3,491,270	15.11	%	$	1,848,501	8.00	%	$	1,386,376	6.00	%	$	1,964,032	8.50	%
Total risk-based capital	$	3,627,858	15.70	%	$	2,310,626	10.00	%	$	1,848,501	8.00	%	$	2,426,157	10.50	%

(1) There is no Tier 1 leverage ratio component in the definition of a well-capitalized bank holding company.

Upon adoption of ASU 2016-13 on January 1, 2020, the Company elected the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.

We believe we are well positioned, from a capital perspective, to withstand a severe downturn in the economy. In light of the COVID-19 crisis, we have enhanced our stress testing framework. We have increased both the frequency of stress testing, which is performed at least quarterly, and the spectrum of scenarios utilized. One exercise we completed was to ~~$2.6 billion at September 30, 2017, an increase of $205 million, or 8.5%, from~~stress our December 31, ~~2016, due primarily to~~2020 loan portfolio using the ~~retention~~2021 DFAST severely adverse scenario. The results of ~~earnings and~~this stress test projected regulatory capital ratios in excess of all well capitalized thresholds in the ~~exercise of stock options resulting in proceeds of $61.5 million during the period.~~

Since our formation, stockholders' equity has been impacted primarily by the retention of earnings, and to a lesser extent, proceeds from the issuance of common shares and changes in unrealized gains and losses, net of taxes, on investment securities

~~available for sale and cash flow hedges. Our rate of earnings retention is derived by dividing undistributed earnings per~~ ~~common share by earnings per common share. Our retention ratio was~~ ~~66.0%~~ ~~and 64.9% for the three and~~ ~~nine months ended September 30, 2017, respectively, compared to 55.7% and 58.4%~~ ~~for the three and nine months ended September 30, 2016, respectively.~~ ~~We retain a high percentage of our earnings to support our planned growth.~~stress scenario.

We ~~filed a~~have an active shelf registration statement on file with the SEC ~~in October 2015~~ that allows the Company to periodically offer and sell in one or more offerings, individually or in any combination, our common stock, preferred stock and other non-equity securities. The shelf registration provides us with flexibility in issuing capital instruments and enables us to more readily access the capital markets as needed to pursue future growth opportunities and to ensure continued compliance with regulatory capital requirements. Our ability to issue securities pursuant to the shelf registration is subject to market conditions.

The ~~following table provides information regarding regulatory capital for the~~ Company ~~and the Bank as of September 30, 2017 (dollars in thousands):~~

Actual
Required to be
Considered Well
Capitalized

Required to be
Considered
Adequately
Capitalized
Amount Ratio Amount Ratio Amount Ratio
BankUnited, Inc.:

Tier 1 leverage $ 2,491,853
8.56 %
N/A ⁽¹⁾

N/A⁽¹⁾

$ 1,164,462
4.00 %
CET1 risk-based capital $ 2,491,853
11.91 % $ 1,359,799
6.50 % $ 941,399
4.50 %
Tier 1 risk-based capital $ 2,491,853
11.91 % $ 1,673,599
8.00 % $ 1,255,199
6.00 %
Total risk based capital $ 2,657,784
12.70 % $ 2,091,998
10.00 % $ 1,673,599
8.00 %
BankUnited:

Tier 1 leverage $ 2,706,006
9.32 % $ 1,451,814
5.00 % $ 1,161,451
4.00 %
CET1 risk-based capital $ 2,706,006
12.98 % $ 1,354,884
6.50 % $ 937,997
4.50 %
Tier 1 risk-based capital $ 2,706,006
12.98 % $ 1,667,550
8.00 % $ 1,250,662
6.00 %
Total risk based capital $ 2,869,850
13.77 % $ 2,084,437
10.00 % $ 1,667,550
8.00 %

~~(1) There is no Tier 1 leverage ratio component in the definition of a well-capitalized bank holding company.~~

~~Levels of capital required~~demonstrated its ability to be well capitalized or adequately capitalized as reflected above do not include a capital conservation buffer that is being phased in beginning in 2016. When fully phased in on January 1, 2019, the Bank and the Company will have to maintain this capital conservation buffer composed of CET1 capital equal to 2.50% of risk-weighted assets above the amounts required to be adequately capitalized, as reflected above, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. Capital ratios required to be considered well-capitalized exceed the ratios required underaccess the capital ~~conservation buffer requirement at September 30, 2017.~~markets in a period of stress with its June 2020 subordinated debt issuance.

Liquidity

Liquidity involves our ability to generate adequate funds to support planned interest earning asset growth, meet deposit withdrawal and credit line usage requests, maintain reserve requirements, conduct routine operations, pay dividends, service outstanding debt and meet other contractual obligations.

~~Primary~~BankUnited's ongoing liquidity needs have been and continue to be met primarily by cash flows from operations, deposit growth, the investment portfolio and FHLB advances. For the six months ended June 30, 2021 and 2020 net cash provided by operating activities was $578 million and $321 million, respectively.

Available liquidity includes cash, borrowing capacity at the Federal Home Loan Bank of Atlanta and the Federal Reserve Discount Window, Federal Funds lines of credit and unpledged agency securities. Additional sources of liquidity include cash flows from operations, wholesale deposits, cash ~~generated by the repayment and resolution of covered loans, cash payments received~~flow from the ~~FDIC pursuant to the Single Family Shared-Loss Agreement, deposit growth, the available for sale~~Bank's amortizing securities ~~portfolio~~ and ~~FHLB advances.~~

~~For the nine months ended September 30, 2017~~loan portfolios, and 2016, net cash provided by operating activities was $231.2 million and $227.3 million, respectively. Accretion on ACI loans, which is reflected as a non-cash reduction in net income to arrive at operating cash flows, totaled $226.3 million, and $228.5 million for the nine months ended September 30, 2017 and 2016, respectively. Accretable yield on ACI loans represents the excess of expected future cash flows over the carrying amount of the loans, and is recognized as interest income over the expected lives of the loans. Amounts recorded as accretion are realized in cash as individual loans are paid down or otherwise resolved; however, the timing of cash realization may differ from the timing of income recognition. These cash flows from the repayment or resolution of covered loans, inclusive of amounts that have been accreted through earnings over time, are recognized as cash flows from investing activities in the consolidated statements of cash flows upon receipt. Cash payments from the FDIC in the form of reimbursements of losses related to the

covered loans under the Single Family Shared-Loss Agreement are also characterized as investing cash flows. Cash generated by the repayment and resolution of covered loans and reimbursements from the FDIC totaled $348.5 million and $430.3 million for the nine months ended September 30, 2017 and 2016, respectively. Both cash generated by the repayment and resolution of covered loans and cash payments received from the FDIC have been and are expected to continue to be, although to a lesser extent in the future, consistent and relatively predictable sources of liquidity.

In addition to cash provided by operating activities, the repayment and resolution of covered loans and payments under the Single Family Shared-Loss Agreement from the FDIC, BankUnited’s liquidity needs, particularly liquidity to fund growth of interest earning assets, have been and continue to be met by deposit growth and FHLB advances. The investment portfolio also provides a source of liquidity.

~~BankUnited has access to additional liquidity through FHLB advances, other collateralized borrowings, wholesale deposits or~~ the sale of ~~available for sale~~investment securities. At September 30, 2017, unencumbered investment securities available for sale totaled $4.3 billion. At September 30, 2017, BankUnited had available borrowing capacity at the FHLB of $3.8 billion, unused borrowing capacity at the FRB of $544 million and unused Federal funds lines of credit totaling $70 million. Management also has the ability to exert substantial control over the rate and timing of ~~growth of the non-covered~~ loan ~~portfolio,~~production, and resultant requirements for liquidity to fund new loans.

~~Continued runoff~~ Since the onset of the ~~covered loan portfolio and FDIC indemnification asset and~~COVID-19 pandemic, we have not experienced unusual deposit outflows or volatility; we have, in fact experienced growth ofin deposits and ~~the non-covered loan portfolio are the most significant trends expected to impact the Bank’s liquidity~~ in ~~the near term.~~on-balance sheet liquidity.

The ALCO policy ~~has established several~~establishes limits or operating thresholds for a number of measures of liquidity which are typically monitored monthly by the ALCO and quarterly by the Board of Directors. ~~One primary measure of liquidity monitored by management is~~These measures include but are not limited to the ~~30 day total liquidity~~

ratio defined as (a) the sum of cash and cash equivalents, pledgeable securities and a measure of funds expected to be generated by operations over the next 30 days; divided by (b) the sum of potential deposit runoff, liabilities maturing within the 30 day time frame and a measure of funds expected to be used in operations over the next 30 days. BankUnited’s liquidity is considered acceptable if the 30 day total liquidity ratio exceeds 100%. At September 30, 2017, BankUnited’s 30 day total liquidity ratio was 172%. Management also monitors a one year liquidity ratio, defined as (a) cash and cash equivalents, pledgeable securities, unused borrowing capacity at the FHLB, and loans and non-agency securities maturing within one year; divided by (b) forecasted deposit outflows and borrowings maturing within one year. Forecasted deposit outflows, excluding certificate of deposits, are based on runoff rates derived from the most recent external core deposit analysis obtained by the Company. This ratio allows management to monitor liquidity over a longer time horizon. The acceptable threshold established by the ALCO for this liquidity measure is 100%. At September 30, 2017, BankUnited’s one year liquidity ratio was 158%. Additional measures of liquidity regularly monitored by the ALCO include the ratio of wholesale funding to total assets, a measure of available liquidity to volatile liabilities, a liquidity stress test coverage ratio, a 30-day total liquidity ratio, a one-year liquidity ratio, a wholesale funding ratio, concentrations of large deposits, a measure of on-balance sheet available liquidity and the ratio of ~~brokered~~non-interest bearing deposits to total ~~deposits.~~deposits, which is reflective of the quality and cost, rather than the quantity, of available liquidity. At ~~September~~June 30, ~~2017,~~2021, BankUnited was operating within acceptable thresholds and limits ~~established~~as prescribed by the ALCO policy.

The ALCO policy stipulates that BankUnited’s liquidity is considered within policy limits or thresholds if the available liquidity/volatile liabilities ratio, 30-day total liquidity ratio and one-year liquidity ratios exceed 100%. At June 30, 2021, BankUnited’s available liquidity/volatile liabilities ratio was 301%, the 30-day total liquidity ratio was 270% .and the one-year liquidity ratio was 424%. The ALCO policy also prescribes that the liquidity stress test coverage ratio exceed 100%; at June 30, 2021, that ratio was 219%. The Company has a comprehensive contingency liquidity funding plan and conducts a quarterly liquidity stress test, the results of which are reported to the risk committee of the Board of ~~Directors for each of these measures.~~Directors.

As a holding company, BankUnited, Inc. is a corporation separate and apart from its banking subsidiary, and therefore, provides for its own liquidity. BankUnited, Inc.’s main sources of funds include management fees and dividends from the Bank, access to capital markets and ~~to a lesser extent,~~ its own ~~available for sale~~ securities portfolio. There are regulatory limitations that may affect the ability of the Bank to pay dividends to BankUnited, Inc. Management believes that such limitations will not impact our ability to meet our ongoing near-term cash obligations.

We expect that our liquidity requirements will continue to be satisfied over the next 12 months through the sources of funds described above.

Interest Rate Risk

~~The~~A principal component of the Company’s risk of loss arising from adverse changes in the fair value of financial instruments, or market risk, is interest rate risk, including the risk that assets and liabilities with similar re-pricing characteristics may not reprice at the same time or to the same degree. A primary objective of the Company’s asset/liability management activities is to maximize net interest income, while maintaining acceptable levels of interest rate risk. The ALCO is responsible for establishing policies to limit exposure to interest rate risk, and to ensure procedures are established to monitor compliance with these policies. The ~~guidelines~~thresholds established by the ALCO are approved at least annually by the Board of ~~Directors.~~Directors or its Risk Committee.

Management believes that the simulation of net interest income in different interest rate environments provides the most meaningful measure of interest rate risk. Income simulation analysis is designed to capture not only the potential of all assets and liabilities to mature or reprice, but also the probability that they will do so. Income simulation also attends to the relative interest rate sensitivities of these items, and projects their behavior over an extended period of time. Finally, income simulation

permits management to assess the probable effects on the balance sheet not only of changes in interest rates, but also of proposed strategies for responding to them.

The income simulation model analyzes interest rate sensitivity by projecting net interest income over twelve and twenty-four month periods in a most likely rate scenario based on consensus forward interest rate curves versus net interest income in alternative rate scenarios. ~~Simulations are generated based on both static and dynamic balance sheet assumptions.~~ Management continually reviews and refines its interest rate risk management process in response to changes in the interest rate environment, the economic climate and ~~economic climate.~~observed customer behavior. Currently, our ~~model projects a down 100, plus 100, plus 200 and plus 300 basis point change with rates increasing by the magnitude of the~~interest rate ~~ramp evenly over the next 12 months as well as flattening yield curve scenarios and~~risk policy framework is based on modeling instantaneous rate shocks of ~~down~~plus and minus 100, ~~plus 100, plus~~ 200, 300 and ~~plus 300~~400 basis ~~points.~~point shifts. We also model a variety of yield curve slope and dynamic balance sheet scenarios. We continually evaluate the scenarios being modeled with a view toward adapting them to changing economic conditions, expectations and trends.

The Company’s ALCO policy provides that net interest income sensitivity will be considered acceptable if decreases in forecast net interest income ~~based on a dynamic forecasted balance sheet,~~ in specified parallel rate shock scenarios, generally by policy plus and minus 100, 200, 300 and 400 basis points, are within specified percentages of forecast net interest income in the most likely rate scenario over the next twelve months and in the second year. At June 30, 2021, the most likely rate scenario assumed that all indices are floored at 0%. We did not apply the falling rate scenarios at June 30, 2021 due to the low level of current interest rates. The following table illustrates the ~~acceptable limits as defined by~~thresholds set forth in the ALCO policy and the impact on forecasted net interest income ~~of down 100, plus 100, plus 200 and plus 300 basis point rate shock~~in the indicated simulated scenarios at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016:~~2020:


										Down 100		Plus 100		Plus 200		Plus 300		Plus 400
	Down 100		Plus 100		Plus 200		Plus 300
Policy Limits:
Policy Thresholds:									Policy Thresholds:
In year 1	(6.0	)%	(6.0	)%	(10.0	)%	(14.0	)%	In year 1	(6.0)	%	(6.0)	%	(10.0)	%	(14.0)	%	(18.0)	%
In year 2	(9.0	)%	(9.0	)%	(13.0	)%	(17.0	)%	In year 2	(9.0)	%	(9.0)	%	(13.0)	%	(17.0)	%	(21.0)	%
Model Results at September 30, 2017 - increase (decrease):
Model Results at June 30, 2021 - increase:									Model Results at June 30, 2021 - increase:
In year 1	(0.4	)%	(0.2	)%	(0.6	)%	(1.2	)%	In year 1	N/A		3.5	%	5.5	%	6.2	%	6.0	%
In year 2	(3.2	)%	1.7	%	3.0	%	4.2	%	In year 2	N/A		7.8	%	13.3	%	17.8	%	21.5	%
Model Results at December 31, 2016 - increase (decrease):
Model Results at December 31, 2020 - increase:									Model Results at December 31, 2020 - increase:
In year 1	(2.0	)%	1.5	%	2.8	%	3.4	%	In year 1	N/A		2.9	%	3.9	%	3.2	%	1.9	%
In year 2	(3.7	)%	2.6	%	4.6	%	6.6	%	In year 2	N/A		5.0	%	7.8	%	9.0	%	9.5	%

Management also simulates changes in EVE in various interest rate environments. The ALCO policy has established parameters of acceptable risk that are defined in terms of the percentage change in EVE from a base scenario under ~~six~~eight rate scenarios, derived by implementing immediate parallel movements of plus and ~~minus~~down 100, 200, 300 and ~~300~~400 basis points from current rates. We did not simulate decreases in interest rates ~~greater than 100 basis points~~ at ~~September~~June 30, ~~2017~~2021 due to the ~~current~~currently low ~~rate environment.~~level of market interest rates. The ~~parameters~~following table illustrates the acceptable thresholds as established by ~~the~~ ALCO ~~stipulate that~~and the modeled ~~decline~~change in EVE ~~is considered acceptable if~~in the ~~decline is less than 9%, 18%~~indicated scenarios at June 30, 2021 and 27% in plus or minus 100, plus or minus 200 and plus or minus 300 basis point scenarios, respectively. As of September 30, 2017, our simulation for the Company indicated percentage changes from base EVE of 1.7%, (3.6)%, (7.9)% and (12.7)% in down 100, plus 100, plus 200 and plus 300 basis point scenarios, respectively.December 31, 2020:


	Down 100		Plus 100		Plus 200		Plus 300		Plus 400
Policy Thresholds	(9.0)	%	(9.0)	%	(18.0)	%	(27.0)	%	(36.0)	%
Model Results at June 30, 2021 - increase (decrease):	N/A		2.1	%	1.3	%	0.1	%	(1.5)	%
Model Results at December 31, 2020 - increase (decrease):	N/A		0.8	%	(2.0)	%	(6.1)	%	(10.0)	%

These measures fall within an acceptable level of interest rate risk per the ~~policies~~thresholds established byin the ALCO and the Board of Directors. In the event the models indicate an unacceptable level of risk, the Company could undertake a number of actions that would reduce this risk, including the sale or re-positioning of a portion of its available for sale investment portfolio, restructuring of borrowings, or the use of derivatives such as interest rate swaps and caps.policy.

Many assumptions were used by the Company to calculate the impact of changes in interest rates, including the change in rates. Actual results may not be similar to the Company’s projections due to several factors including the timing and frequency of rate changes, market conditions, changes in depositor behavior and loan prepayment speeds and the shape of the yield curve. Actual results may also differ due to the Company’s actions, if any, in response to changing rates and conditions.

Derivative Financial Instruments

Interest rate swaps and caps designated as cash flow or fair value hedging instruments are one of the tools we use to manage interest rate risk. These derivative instruments are used to mitigate exposure to changes in interest ~~rates~~cash flows on variable rate borrowings ~~such~~and to changes in the fair value of fixed rate borrowings, in each case caused by fluctuations in benchmark interest rates, as ~~FHLB advances and~~well as to manage duration of liabilities. ~~These interest rate swaps are designated as cash flow hedging instruments.~~ The fair value of ~~these~~derivative instruments designated as hedges is included in other assets and other liabilities in our consolidated balance ~~sheets and changes~~sheets. Changes in fair value of derivative instruments designated as cash flow hedges are reported in accumulated other comprehensive income. Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings, as is the offsetting gain or loss on the hedged item. At ~~September~~June 30, ~~2017,~~2021, outstanding interest rate swaps and caps designated as cash flow hedges had an aggregate notional amount of ~~$2.0 billion. The aggregate fair value of~~$2.5 billion and outstanding interest rate swaps designated as ~~cash flow~~

fair value hedges ~~included in other assets was $1.1 million and~~had an aggregate notional amount of $200 million. At June 30, 2021, the aggregate fair value of interest rate swaps and caps designated as cash flow hedges included in other assets and other liabilities was ~~$0.3 million.~~$1.3 million and $4.5 million, respectively.

Interest rate swaps and caps not designated as ~~cash flow~~ hedges had an aggregate notional amount of ~~$2.3~~$3.4 billion at ~~September~~June 30, ~~2017.~~2021. The aggregate fair value of these interest rate swaps and caps included in other assets was ~~$27.3~~$78.4 million and the aggregate fair value included in other liabilities was ~~$26.8~~$27.6 million. These interest rate swaps and caps were entered into as accommodations to certain of our commercial borrowers. To mitigate interest rate risk associated with these derivatives, the Company enters into offsetting derivative positions with primary dealers.

See Note 76 to the consolidated financial statements for additional information about derivative financial instruments.

Off-Balance Sheet Arrangements

For more information on contractual obligations and commitments, see Note 1110 to the consolidated financial statements ~~the FHLB Advances, Notes~~ and ~~Other~~the Borrowings section of this ~~MD&A~~Management's Discussion and ~~Off-Balance Sheet Arrangements in the MD&A of the Company's 2016 Annual Report on Form 10-K.~~Analysis.

~~Critical Accounting Policies and Estimates~~

~~The Company has made no significant changes in its critical accounting policies and significant estimates from those disclosed in the 2016 Annual Report on Form 10-K.~~

Non-GAAP Financial Measures

PPNR is a non-GAAP financial measure. Management believes this measure is relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses, particularly in view of the volatility of the provision for credit losses resulting from the COVID-19 pandemic. This measure also provides a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following table reconciles the non-GAAP financial measurement of PPNR to the comparable GAAP financial measurement of income before income taxes for the periods indicated (in thousands):


	Three Months Ended June 30,		Three Months Ended March 31,		Three Months Ended June 30,		Six Months Ended June 30,
	2021		2021		2020		2021		2020
Income before income taxes (GAAP)	$	140,150	$	131,304	$	96,904	$	271,454	$	56,482
Plus: Provision for (recovery of) credit losses	(27,534)		(27,989)		25,414		(55,523)		150,842
PPNR (non-GAAP)	$	112,616	$	103,315	$	122,318	$	215,931	$	207,324

Tangible book value per common share is a non-GAAP financial measure. Management believes this measure is relevant to understanding the capital position and performance of the Company. Disclosure of this non-GAAP financial measure also provides a meaningful ~~base~~basis for ~~comparability~~comparison to other financial ~~institutions.~~institutions as it is a metric commonly used in the banking industry. The following table reconciles the non-GAAP financial measurement of tangible book value per common share to the comparable GAAP financial measurement of book value per common share at ~~September 30, 2017~~the dates indicated (in thousands except share and per share data):


	June 30, 2021		December 31, 2020
Total stockholders’ equity	$	3,161,543	$	2,983,012
Less: goodwill and other intangible assets	77,637		77,637
Tangible stockholders’ equity	$	3,083,906	$	2,905,375

Common shares issued and outstanding	93,238,553		93,067,500

Book value per common share	$	33.91	$	32.05

Tangible book value per common share	$	33.08	$	31.22



			~~Page~~

PART I.	~~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		4634

ITEM 3.		Quantitative and Qualitative Disclosures About Market Risk		8069

ITEM 4.		Controls and Procedures		8069

PART II.		OTHER INFORMATION

ITEM 1.		Legal Proceedings		8170

ITEM 1A.		Risk Factors		8170

ITEM 6.2.		~~Exhibits~~Unregistered Sales of Equity Securities and Use of Proceeds		8270

ITEM 6.		Exhibits		71

SIGNATURES				8372


																	December 31, 2020
	December 31, 2016
	Less than 12 Months					12 Months or Greater					Total						Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses				Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities																U.S. Treasury securities	$	24,369	$	(375)	$	0	$	0	$	24,369	$	(375)
U.S. Government agency and sponsored enterprise residential MBS	$	191,463	$	(628	)	$	112,391	$	(1,080	)	$	303,854	$	(1,708	)	U.S. Government agency and sponsored enterprise residential MBS	220,179		(320)		370,727		(2,708)		590,906		(3,028)
U.S. Government agency and sponsored enterprise commercial MBS	89,437		(2,838		)	—		—			89,437		(2,838		)	U.S. Government agency and sponsored enterprise commercial MBS	152,233		(1,412)		44,255		(255)		196,488		(1,667)

Private label residential MBS and CMOs	122,142		(1,680		)	8,074		(328		)	130,216		(2,008		)	Private label residential MBS and CMOs	141,407		(561)		0		0		141,407		(561)
Private label commercial MBS	169,535		(2,370		)	24,985		(15		)	194,520		(2,385		)	Private label commercial MBS	1,268,381		(12,771)		37,783		(77)		1,306,164		(12,848)
Single family rental real estate-backed securities	139,867		(842		)	176,057		(994		)	315,924		(1,836		)	Single family rental real estate-backed securities	28,758		(58)		0		0		28,758		(58)
Collateralized loan obligations	69,598		(402		)	173,983		(848		)	243,581		(1,250		)	Collateralized loan obligations	304,051		(1,171)		588,463		(7,564)		892,514		(8,735)
Non-mortgage asset-backed securities	139,477		(2,926		)	—		—			139,477		(2,926		)	Non-mortgage asset-backed securities	0		0		12,327		(234)		12,327		(234)
Preferred stocks	10,087		(4		)	—		—			10,087		(4		)
State and municipal obligations	448,180		(11,049		)	—		—			448,180		(11,049		)

SBA securities	4,204		(13		)	20,076		(408		)	24,280		(421		)	SBA securities	26,240		(298)		104,598		(3,637)		130,838		(3,935)
	$	1,383,990	$	(22,752	)	$	515,566	$	(3,673	)	$	1,899,556	$	(26,425	)
																	$	2,165,618	$	(16,966)	$	1,158,153	$	(14,475)	$	3,323,771	$	(31,441)


	Three Months Ended June 30,
	2021						2020
	Residential and Other Consumer		Commercial		Total		Residential and Other Consumer		Commercial		Total
Beginning balance	$	15,844	$	205,090	$	220,934	$	12,576	$	238,003	$	250,579

Provision (recovery)	(3,938)		(23,725)		(27,663)		(1,924)		33,508		31,584
Charge-offs	0		(18,402)		(18,402)		0		(19,178)		(19,178)
Recoveries	3		770		773		43		3,095		3,138
Ending balance	$	11,909	$	163,733	$	175,642	$	10,695	$	255,428	$	266,123



Balance at December 31, 2015	$	902,565
Reclassifications from non-accretable difference	76,751
Accretion	(303,931		)
Balance at December 31, 2016	675,385
Reclassifications from non-accretable difference	72,827
Accretion	(226,251		)
Balance at September 30, 2017	$	521,961


	June 30, 2021
	Amortized Cost By Origination Year
	2021		2020		2019		2018		2017		Prior		Total
Current	$	1,083,253	$	1,189,810	$	473,427	$	279,499	$	441,586	$	1,660,924	$	5,128,499
30 - 59 Days Past Due	15,148		7,150		9,631		3,635		3,848		6,086		45,498
60 - 89 Days Past Due	0		922		3,229		812		1,082		3,300		9,345
90 Days or More Past Due	0		0		1,702		5,144		851		15,727		23,424
	$	1,098,401	$	1,197,882	$	487,989	$	289,090	$	447,367	$	1,686,037	$	5,206,766


☒			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



	September 30, 2017			December 31, 2016
ASSETS
Cash and due from banks:
Non-interest bearing	$	34,883		$	40,260
Interest bearing	3,714			35,413
Interest bearing deposits at Federal Reserve Bank	254,004			372,640
Cash and cash equivalents	292,601			448,313
Investment securities available for sale, at fair value	6,893,472			6,073,584
Investment securities held to maturity	10,000			10,000
Non-marketable equity securities	270,239			284,272
Loans held for sale	31,507			41,198
Loans (including covered loans of $537,976 and $614,042)	20,610,430			19,395,394
Allowance for loan and lease losses	(158,573		)	(152,953		)
Loans, net	20,451,857			19,242,441
FDIC indemnification asset	349,617			515,933
Bank owned life insurance	248,876			239,736
Equipment under operating lease, net	588,207			539,914
Deferred tax asset, net	23,910			62,940
Goodwill and other intangible assets	77,857			78,047
Other assets	316,688			343,773
Total assets	$	29,554,831		$	27,880,151

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Demand deposits:
Non-interest bearing	$	3,096,492		$	2,960,591
Interest bearing	1,828,809			1,523,064
Savings and money market	9,964,242			9,251,593
Time	6,333,701			5,755,642
Total deposits	21,223,244			19,490,890
Federal Home Loan Bank advances	4,871,000			5,239,348
Notes and other borrowings	402,828			402,809
Other liabilities	434,270			328,675
Total liabilities	26,931,342			25,461,722

Commitments and contingencies

Stockholders' equity:
Common stock, par value $0.01 per share, 400,000,000 shares authorized; 106,821,902 and 104,166,945 shares issued and outstanding	1,068			1,042
Paid-in capital	1,492,790			1,426,459
Retained earnings	1,077,042			949,681
Accumulated other comprehensive income	52,589			41,247
Total stockholders' equity	2,623,489			2,418,429
Total liabilities and stockholders' equity	$	29,554,831		$	27,880,151



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Interest income:
Loans	$	253,815		$	227,233		$	739,586		$	662,439
Investment securities	51,851			39,712			141,624			109,963
Other	3,777			3,036			10,606			8,850
Total interest income	309,443			269,981			891,816			781,252
Interest expense:
Deposits	45,919			30,968			120,161			86,427
Borrowings	22,260			17,278			60,209			51,939
Total interest expense	68,179			48,246			180,370			138,366
Net interest income before provision for loan losses	241,264			221,735			711,446			642,886
Provision for (recovery of) loan losses (including $261, $(445), $2,693 and $(1,119) for covered loans)	37,854			24,408			63,573			42,449
Net interest income after provision for loan losses	203,410			197,327			647,873			600,437
Non-interest income:
Income from resolution of covered assets, net	6,400			8,883			22,066			26,426
Net gain (loss) on FDIC indemnification	(4,838		)	993			(14,174		)	(9,410		)
Service charges and fees	4,938			5,171			15,554			14,529
Gain (loss) on sale of loans, net (including $0, $(10,033), $(1,582) and $(14,895) related to covered loans)	2,447			(7,947		)	6,601			(7,360		)
Gain on investment securities available for sale, net	26,931			3,008			29,194			10,065
Lease financing	13,287			11,188			40,067			32,762
Other non-interest income	4,161			3,779			12,055			10,118
Total non-interest income	53,326			25,075			111,363			77,130
Non-interest expense:
Employee compensation and benefits	58,327			55,162			178,386			166,374
Occupancy and equipment	18,829			18,867			56,689			57,199
Amortization of FDIC indemnification asset	45,225			38,957			135,351			116,711
Deposit insurance expense	5,764			4,943			16,827			12,866
Professional fees	2,748			3,884			12,573			10,119
Telecommunications and data processing	3,452			3,746			10,481			10,800
Depreciation of equipment under operating lease	8,905			6,855			25,655			20,004
Other non-interest expense	13,455			15,590			37,735			40,151
Total non-interest expense	156,705			148,004			473,697			434,224
Income before income taxes	100,031			74,398			285,539			243,343
Provision for income taxes	32,252			23,550			89,060			80,896
Net income	$	67,779		$	50,848		$	196,479		$	162,447
Earnings per common share, basic (see Note 2)	$	0.62		$	0.47		$	1.79		$	1.52
Earnings per common share, diluted (see Note 2)	$	0.62		$	0.47		$	1.79		$	1.50
Cash dividends declared per common share	$	0.21		$	0.21		$	0.63		$	0.63



	December 31, 2016
				Covered Loans								Percent of Total
	Non-Covered Loans			ACI		Non-ACI			Total			Percent of Total
Residential and other consumer:
1-4 single family residential	$	3,422,425		$	532,348	$	36,675		$	3,991,448		20.6	%
Home equity loans and lines of credit	1,120			3,894		47,629			52,643			0.3	%
Other consumer loans	24,365			—		—			24,365			0.1	%
	3,447,910			536,242		84,304			4,068,456			21.0	%
Commercial:
Multi-family	3,824,973			—		—			3,824,973			19.8	%
Non-owner occupied commercial real estate	3,739,235			—		—			3,739,235			19.3	%
Construction and land	311,436			—		—			311,436			1.6	%
Owner occupied commercial real estate	1,736,858			—		—			1,736,858			9.0	%
Commercial and industrial	3,391,614			—		—			3,391,614			17.5	%
Commercial lending subsidiaries	2,280,685			—		—			2,280,685			11.8	%
	15,284,801			—		—			15,284,801			79.0	%
Total loans	18,732,711			536,242		84,304			19,353,257			100.0	%
Premiums, discounts and deferred fees and costs, net	48,641			—		(6,504		)	42,137
Loans including premiums, discounts and deferred fees and costs	18,781,352			536,242		77,800			19,395,394
Allowance for loan and lease losses	(150,853		)	—		(2,100		)	(152,953		)
Loans, net	$	18,630,499		$	536,242	$	75,700		$	19,242,441



	September 30, 2017						December 31, 2016
	Recorded Investment		UPB		Related Specific Allowance		Recorded Investment		UPB		Related Specific Allowance
Non-covered loans:
With no specific allowance recorded:
1-4 single family residential	$	27	$	32	$	—	$	—	$	—	$	—
Non-owner occupied commercial real estate	9,041		9,224		—		510		512		—
Construction and land	1,238		1,238		—		1,238		1,238		—
Owner occupied commercial real estate	16,786		16,949		—		16,834		16,894		—
Commercial and industrial
Taxi medallion loans	20,320		20,321		—		18,107		18,107		—
Other commercial and industrial	1,081		1,095		—		6,172		6,172		—
Commercial lending subsidiaries	12,810		12,815		—		10,620		10,510		—
With a specific allowance recorded:
1-4 single family residential	884		863		71		561		546		12
Owner occupied commercial real estate	3,961		3,943		2,994		491		513		263
Commercial and industrial
Taxi medallion loans	100,252		100,255		13,117		73,131		73,147		5,948
Other commercial and industrial	41,297		41,292		7,313		29,452		29,463		9,168
Commercial lending subsidiaries	3,578		3,553		478		21,712		21,605		3,850
Total:
Residential and other consumer	$	911	$	895	$	71	$	561	$	546	$	12
Commercial	210,364		210,685		23,902		178,267		178,161		19,229
	$	211,275	$	211,580	$	23,973	$	178,828	$	178,707	$	19,241
Covered loans:
Non-ACI loans:
With no specific allowance recorded:
1-4 single family residential	$	102	$	118	$	—	$	1,169	$	1,391	$	—
Home equity loans and lines of credit	1,312		1,324		—		2,255		2,286		—
With a specific allowance recorded:
1-4 single family residential	2,221		2,579		208		1,272		1,514		181
Home equity loans and lines of credit	8,086		8,163		816		7,700		7,804		348
	$	11,721	$	12,184	$	1,024	$	12,396	$	12,995	$	529
ACI loans:
With a specific allowance recorded:
Home equity loans and lines of credit	$	5,640	$	27,731	$	1,812	$	—	$	—	$	—


	June 30, 2021
	Amortized Cost By Origination Year												Revolving Loans
	2021		2020		2019		2018		2017		Prior				Total
Multi-Family
Pass	$	31,965	$	147,499	$	245,838	$	153,168	$	145,093	$	274,242	$	40,238	$	1,038,043
Special mention	0		0		0		4,258		0		1,827		0		6,085
Substandard	0		5,002		42,938		9,599		32,186		122,858		0		212,583

Total Multi-Family	$	31,965	$	152,501	$	288,776	$	167,025	$	177,279	$	398,927	$	40,238	$	1,256,711

Non-owner occupied commercial real estate
Pass	$	213,043	$	526,381	$	1,057,193	$	631,119	$	424,389	$	1,016,555	$	79,761	$	3,948,441
Special mention	0		0		24,604		15,662		0		7,641		0		47,907
Substandard	0		26,021		146,339		73,142		84,622		397,711		0		727,835

Total non-owner occupied commercial real estate	$	213,043	$	552,402	$	1,228,136	$	719,923	$	509,011	$	1,421,907	$	79,761	$	4,724,183

Construction and Land
Pass	$	3,919	$	34,832	$	136,272	$	10,611	$	8,605	$	268	$	4,840	$	199,347
Special mention	0		0		5,184		0		0		0		0		5,184
Substandard	0		1,167		2,539		1,328		0		9,069		0		14,103

Total Construction and Land	$	3,919	$	35,999	$	143,995	$	11,939	$	8,605	$	9,337	$	4,840	$	218,634

Owner occupied commercial real estate
Pass	$	51,923	$	228,037	$	285,963	$	236,599	$	246,368	$	596,121	$	28,222	$	1,673,233
Special mention	0		1,796		2,388		3,908		13,628		19,409		794		41,923
Substandard	0		6,902		29,021		37,616		46,835		125,370		0		245,744

Total owner occupied commercial real estate	$	51,923	$	236,735	$	317,372	$	278,123	$	306,831	$	740,900	$	29,016	$	1,960,900

Commercial and industrial
Pass	$	363,731	$	506,653	$	647,392	$	184,745	$	197,346	$	194,549	$	1,676,514	$	3,770,930
Special mention	0		937		11,257		16,640		1,611		2,481		438		33,364
Substandard	480		19,291		144,079		42,028		14,278		35,315		129,176		384,647
Doubtful	0		0		0		8		0		0		16,846		16,854
Total commercial and industrial	$	364,211	$	526,881	$	802,728	$	243,421	$	213,235	$	232,345	$	1,822,974	$	4,205,795

PPP
Pass	$	282,746	$	209,214	$	0	$	0	$	0	$	0	$	0	$	491,960
Total PPP	$	282,746	$	209,214	$	0	$	0	$	0	$	0	$	0	$	491,960

Pinnacle
Pass	$	67,425	$	141,124	$	106,430	$	61,798	$	202,771	$	466,989	$	0	$	1,046,537



Total Pinnacle	$	67,425	$	141,124	$	106,430	$	61,798	$	202,771	$	466,989	$	0	$	1,046,537

Bridge - Franchise Finance
Pass	$	9,078	$	51,732	$	114,668	$	16,475	$	7,861	$	10,133	$	0	$	209,947
Special mention	0		0		1,857		0		0		0		0		1,857
Substandard	0		29,679		95,935		78,404		27,192		20,382		0		251,592
Doubtful	0		0		0		0		0		478		0		478
Total Bridge - Franchise Finance	$	9,078	$	81,411	$	212,460	$	94,879	$	35,053	$	30,993	$	0	$	463,874

Bridge - Equipment Finance
Pass	$	36,740	$	19,892	$	132,856	$	55,875	$	33,371	$	63,653	$	0	$	342,387
Special mention	0		0		0		0		1,744		0		0		1,744
Substandard	0		0		14,948		22,404		40,456		0		0		77,808

Total Bridge - Equipment Finance	$	36,740	$	19,892	$	147,804	$	78,279	$	75,571	$	63,653	$	0	$	421,939

Mortgage Warehouse Lending
Pass	$	0	$	0	$	0	$	0	$	0	$	0	$	1,018,267	$	1,018,267



Total Mortgage Warehouse Lending	$	0	$	0	$	0	$	0	$	0	$	0	$	1,018,267	$	1,018,267



	September 30, 2017
	FICO
LTV	720 or less		721 - 740		741 - 760		761 or greater		Total
60% or less	$	94,357	$	111,279	$	185,614	$	819,422	$	1,210,672
60% - 70%	93,963		102,461		140,350		586,158		922,932
70% - 80%	139,923		173,808		316,544		1,091,868		1,722,143
More than 80%	24,725		20,610		24,981		85,781		156,097
	$	352,968	$	408,158	$	667,489	$	2,583,229	$	4,011,844



Balance at December 31, 2015	$	739,843
Amortization	(160,091		)
Reduction for claims filed	(46,083		)
Net loss on FDIC indemnification	(17,759		)
Balance at December 31, 2016	515,910
Amortization	(135,351		)
Reduction for claims filed	(16,768		)
Net loss on FDIC indemnification	(14,174		)
Balance at September 30, 2017	$	349,617



	Unrealized Gains on Investment Securities Available for Sale		Unrealized Losses on Derivative Instruments			Total
Balance at December 31, 2016	$	47,057	$	(5,810	)	$	41,247
Other comprehensive income	15,164		(3,822		)	11,342
Balance at September 30, 2017	$	62,221	$	(9,632	)	$	52,589

Balance at December 31, 2015	$	41,535	$	(19,353	)	$	22,182
Other comprehensive income	47,400		(27,052		)	20,348
Balance at September 30, 2016	$	88,935	$	(46,405	)	$	42,530


	Three Months Ended June 30,
	Unrealized Gain (Loss) on Investment Securities Available for Sale		Unrealized Gain (Loss) on Derivative Instruments		Total
Balance at March 31, 2021	$	38,359	$	(77,184)	$	(38,825)
Other comprehensive income	11,808		2,144		13,952
Balance at June 30, 2021	$	50,167	$	(75,040)	$	(24,873)

Balance at March 31, 2020	$	(186,115)	$	(137,477)	$	(323,592)
Other comprehensive income (loss)	184,141		(3,568)		$	180,573
Balance at June 30, 2020	$	(1,974)	$	(141,045)	$	(143,019)


	Number of Share Awards	Weighted Average Grant Date Fair Value
Unvested share awards outstanding, December 31, 2020	1,161,835	$	33.32
Granted	559,180	42.17
Vested	(460,269)	34.01
Canceled or forfeited	(48,684)	35.19
Unvested share awards outstanding, June 30, 2021	1,212,062	$	37.07

Unvested share awards outstanding, December 31, 2019	1,050,455	$	38.24
Granted	644,300	29.73
Vested	(455,260)	39.15
Canceled or forfeited	(33,137)	36.21
Unvested share awards outstanding, June 30, 2020	1,206,358	$	33.41


	RSU	PSU
Unvested executive share-based awards outstanding, December 31, 2020	156,555	179,793
Granted	63,814	63,814

Unvested executive share-based awards outstanding, June 30, 2021	220,369	243,607

Unvested executive share-based awards outstanding, December 31, 2019	112,116	125,088
Granted	106,731	106,731

Unvested executive share-based awards outstanding, June 30, 2020	218,847	231,819


	Number of Option Awards	Weighted Average Exercise Price
Option awards outstanding, December 31, 2020	1,569	$	15.94
Exercised	(1,569)	15.94

Option awards outstanding and exercisable, June 30, 2021	0	$	0

Option awards outstanding, December 31, 2019	737,753	$	26.64
Exercised	(60,000)	25.48

Option awards outstanding, June 30, 2020	677,753	$	26.74


	June 30, 2021

	Level 1		Level 2		Total
Investment securities available for sale:
U.S. Treasury securities	$	156,637	$	0	$	156,637
U.S. Government agency and sponsored enterprise residential MBS	0		2,215,440		2,215,440
U.S. Government agency and sponsored enterprise commercial MBS	0		835,588		835,588

Private label residential MBS and CMOs	0		2,111,727		2,111,727
Private label commercial MBS	0		2,594,024		2,594,024
Single family rental real estate-backed securities	0		617,445		617,445
Collateralized loan obligations	0		982,267		982,267
Non-mortgage asset-backed securities	0		176,506		176,506
State and municipal obligations	0		228,625		228,625
SBA securities	0		215,634		215,634

Marketable equity securities	88,142		0		88,142
Servicing rights	0		6,950		6,950
Derivative assets	0		79,686		79,686
Total assets at fair value	$	244,779	$	10,063,892	$	10,308,671
Derivative liabilities	$	0	$	(32,131)	$	(32,131)
Total liabilities at fair value	$	0	$	(32,131)	$	(32,131)



	Fair Value at		Valuation Technique	Unobservable Input	Range (Weighted Average)
	September 30, 2017		Valuation Technique	Unobservable Input	Range (Weighted Average)
Investment grade	$	34,245	Discounted cash flow	Voluntary prepayment rate	6.60% - 25.60% (15.92%)
				Probability of default	0.13% - 4.04% (1.36%)
				Loss severity	15.00% - 75.00% (33.10%)
				Discount rate	1.88% - 7.43% (3.48%)

Non-investment grade	$	26,552	Discounted cash flow	Voluntary prepayment rate	1.10% - 29.30% (15.35%)
				Probability of default	0.13% - 4.15% (1.51%)
				Loss severity	15.00% - 95.00% (32.96%)
				Discount rate	1.35% - 9.43% (5.89%)


	June 30, 2021		December 31, 2020

Collateral dependent loans	$	92,410	$	73,803
Loans held for sale	0		20,500
OREO and repossessed assets	2,061		2,786

	$	94,471	$	97,089



	September 30, 2017								Losses from Fair Value Changes
	Level 1		Level 2		Level 3		Total		Three Months Ended September 30, 2017			Nine Months Ended September 30, 2017
OREO and repossessed assets	$	—	$	—	$	5,520	$	5,520	$	(515	)	$	(1,534	)
Impaired loans	$	—	$	—	$	107,173	$	107,173	$	(35,106	)	$	(58,073	)



	September 30, 2016								Losses from Fair Value Changes
	Level 1		Level 2		Level 3		Total		Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
OREO and repossessed assets	$	—	$	—	$	7,923	$	7,923	$	(372	)	$	740
Impaired loans	$	—	$	—	$	59,678	$	59,678	$	(10,623	)	$	(18,873	)



	~~Average Amount~~
~~Average fare per trip~~	~~$16.12~~
~~Number of trips per shift~~	~~15.4~~
~~Days worked per month~~	~~25.6~~


		June 30, 2021				December 31, 2020

	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Cash and cash equivalents	1	$	895,348	$	895,348	$	397,716	$	397,716
Investment securities	1/2	$	10,232,035	$	10,232,907	$	9,176,683	$	9,177,870
Non-marketable equity securities	2	$	164,959	$	164,959	$	195,865	$	195,865
Loans held for sale	2	$	0	$	0	$	24,676	$	25,057
Loans, net	3	$	22,885,074	$	23,190,143	$	23,608,719	$	24,205,016
Derivative assets	2	$	79,686	$	79,686	$	123,830	$	123,830
Liabilities:
Demand, savings and money market deposits	2	$	25,631,195	$	25,631,195	$	22,688,617	$	22,688,617
Time deposits	2	$	2,978,074	$	2,979,040	$	4,807,199	$	4,814,862
Federal funds purchased	2	$	0	$	0	$	180,000	$	180,000
FHLB advances	2	$	2,681,505	$	2,683,248	$	3,122,999	$	3,127,190
Notes and other borrowings	2	$	721,639	$	838,205	$	722,495	$	849,120
Derivative liabilities	2	$	32,131	$	32,131	$	44,490	$	44,490



Commitments to fund loans	$	417,943
Commitments to purchase loans	287,302
Unfunded commitments under lines of credit	2,361,922
Commercial and standby letters of credit	83,141
	$	3,150,308


Commitments to fund loans	$	622,579

Unfunded commitments under lines of credit	3,747,497
Commercial and standby letters of credit	95,034
	$	4,465,110



	September 30, 2017		October 31, 2017
Past due more than 30 days:
Covered loans	$	14,669	$	13,454
Total	$	20,099	$	21,350
Granted temporary payment deferrals:
Covered loans	$	14,807	$	16,983
Total	$	24,772	$	25,969



	ACI		Non-ACI
Loans resetting from interest only:
Previously reset	72.3	%	51.5	%
Scheduled to reset within 12 months	2.5	%	5.5	%
Scheduled to reset after 12 months	25.2	%	43.0	%
	100.0	%	100.0	%
Lien position:
First liens	10.3	%	18.8	%
Second or third liens	89.7	%	81.2	%
	100.0	%	100.0	%



	September 30, 2017								December 31, 2016
	Covered Assets		Non-Covered Assets			Total			Covered Assets		Non-Covered Assets			Total
Non-accrual loans
Residential and other consumer:
1 - 4 single family residential	$	934	$	1,890		$	2,824		$	918	$	566		$	1,484
Home equity loans and lines of credit	2,369		—			2,369			2,283		—			2,283
Other consumer loans	—		332			332			—		2			2
Total residential and other consumer loans	3,303		2,222			5,525			3,201		568			3,769
Commercial:
Non-owner occupied commercial real estate	—		9,930			9,930			—		559			559
Construction and land	—		1,238			1,238			—		1,238			1,238
Owner occupied commercial real estate	—		21,455			21,455			—		19,439			19,439
Commercial and industrial
Taxi medallion loans	—		120,572			120,572			—		60,660			60,660
Other commercial and industrial	—		27,569			27,569			—		16,036			16,036
Commercial lending subsidiaries	—		16,625			16,625			—		32,645			32,645
Total commercial loans	—		197,389			197,389			—		130,577			130,577
Total non-accrual loans	3,303		199,611			202,914			3,201		131,145			134,346
Non-ACI and new loans past due 90 days and still accruing	—		846			846			—		1,551			1,551
Total non-performing loans	3,303		200,457			203,760			3,201		132,696			135,897
OREO	4,114		1,661			5,775			4,658		4,882			9,540
Repossessed assets	—		2,457			2,457			—		3,551			3,551
Total non-performing assets	7,417		204,575			211,992			7,859		141,129			148,988
Impaired ACI loans and pools on accrual status	5,640		—			5,640			—		1,335			1,335
Performing TDRs
Taxi medallion loans	—		—			—			—		36,848			36,848
Other	10,786		19,365			30,151			11,166		26,282			37,448
Total impaired loans and non-performing assets	$	23,843	$	223,940		$	247,783		$	19,025	$	205,594		$	224,619

Non-performing loans to total loans ^{(1) (3)}			1.00		%	0.99		%			0.71		%	0.70		%
Non-performing assets to total assets ⁽²⁾			0.69		%	0.72		%			0.51		%	0.53		%
ALLL to total loans ⁽¹⁾			0.77		%	0.77		%			0.80		%	0.79		%
ALLL to non-performing loans			76.69		%	77.82		%			113.68		%	112.55		%
Net charge-offs to average loans ^{(4) (5)}			0.40		%	0.39		%			0.13		%	0.13		%


	June 30, 2021					December 31, 2020

	Number of TDRs	Amortized Cost		Related Specific Allowance		Number of TDRs	Amortized Cost		Related Specific Allowance
Residential and other consumer (1)	399	$	69,759	$	102	342	$	57,017	$	94
Commercial	23	43,432		3,953		25	55,515		15,630
	422	$	113,191	$	4,055	367	$	112,532	$	15,724



	Number of TDRs	Recorded Investment		Related Specific Allowance
Residential and other consumer:
Covered	59	$	11,721	$	1,024
Non-covered	9	912		71
Commercial:
Taxi medallion loans	173	92,370		10,505
Other	30	72,702		10,581
	271	$	177,705	$	22,181



	Nine Months Ended September 30, 2017
				Covered Loans
	Non-Covered Loans			ACI Loans		Non-ACI Loans			Total
Balance at December 31, 2016	$	150,853		$	—	$	2,100		$	152,953
Provision for (recovery of) loan losses:
1-4 single family residential	(4		)	—		212			208
Home equity loans and lines of credit	—			1,812		714			2,526
Other consumer loans	(48		)	—		—			(48		)
Multi-family	(3,303		)	—		—			(3,303		)
Non-owner occupied commercial real estate	4,032			—		—			4,032
Construction and land	(9		)	—		—			(9		)
Owner occupied commercial real estate	4,884			—		—			4,884
Commercial and industrial
Taxi medallion loans	49,604			—		—			49,604
Other commercial and industrial	9,338			—		(45		)	9,293
Commercial lending subsidiaries	(8,614		)	—		—			(8,614		)
Unallocated	5,000			—		—			5,000
Total Provision	60,880			1,812		881			63,573
Charge-offs:
Home equity loans and lines of credit	—			—		(55		)	(55		)
Non-owner occupied commercial real estate	(162		)	—		—			(162		)
Owner occupied commercial real estate	(1,164		)	—		—			(1,164		)
Commercial and industrial
Taxi medallion loans	(47,141		)	—		—			(47,141		)
Other commercial and industrial	(12,567		)	—		—			(12,567		)
Commercial lending subsidiaries	—			—		—			—
Total Charge-offs	(61,034		)	—		(55		)	(61,089		)
Recoveries:
Home equity loans and lines of credit	—			—		65			65
Other consumer loans	21			—		—			21
Owner occupied commercial real estate	2			—		—			2
Commercial and industrial
Other commercial and industrial	2,400			—		45			2,445
Commercial lending subsidiaries	603			—		—			603
Total Recoveries	3,026			—		110			3,136
Net Charge-offs:	(58,008		)	—		55			(57,953		)
Balance at September 30, 2017	$	153,725		$	1,812	$	3,036		$	158,573



	Nine Months Ended September 30, 2016
				Covered Loans
	Non-Covered Loans			ACI Loans		Non-ACI Loans			Total
Balance at December 31, 2015	$	120,960		$	—	$	4,868		$	125,828
Provision for (recovery of) loan losses:
1-4 single family residential	(324		)	—		23			(301		)
Home equity loans and lines of credit	2			—		(1,097		)	(1,095		)
Other consumer loans	(98		)	—		—			(98		)
Multi-family	1,509			—		—			1,509
Non-owner occupied commercial real estate	7,563			—		—			7,563
Construction and land	(980		)	—		—			(980		)
Owner occupied commercial real estate	4,854			—		—			4,854
Commercial and industrial
Taxi medallion loans	9,679			—		—			9,679
Other commercial and industrial	16,686			—		(45		)	16,641
Commercial lending subsidiaries	4,677			—		—			4,677
Total Provision	43,568			—		(1,119		)	42,449
Charge-offs:
1-4 single family residential	—			—		(312		)	(312		)
Home equity loans and lines of credit	—			—		(774		)	(774		)
Non-owner occupied commercial real estate	(128		)	—		—			(128		)
Construction and land	(93		)	—		—			(93		)
Owner occupied commercial real estate	(2,615		)	—		—			(2,615		)
Commercial and industrial
Taxi medallion loans	(4,235		)	—		—			(4,235		)
Other commercial and industrial	(7,245		)	—		—			(7,245		)
Commercial lending subsidiaries	(1,432		)	—		—			(1,432		)
Total Charge-offs	(15,748		)	—		(1,086		)	(16,834		)
Recoveries:
Home equity loans and lines of credit	—			—		77			77
Other consumer loans	18			—		—			18
Owner occupied commercial real estate	1,175			—		—			1,175
Commercial and industrial
Other commercial and industrial	440			—		45			485
Commercial lending subsidiaries	1,278			—		—			1,278
Total Recoveries	2,911			—		122			3,033
Net Charge-offs:	(12,837		)	—		(964		)	(13,801		)
Balance at September 30, 2016	$	151,691		$	—	$	2,785		$	154,476