BankUnited (BKU) risk factors, FY2024 10-K

Strategic Risk

1. 01We may not realize the expected benefits of our business strategy
2. 02We face significant competition from other financial institutions and financial services providers, which may adversely impact our ability to execute on strategic objectives, our growth or profitability
3. 03Both physical and transitional risks related to climate change or societal and governmental responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
4. 04We depend on our executive officers and other key and skilled personnel to execute our business strategy and could be harmed by the loss of their services or the inability to attract new talent
5. 05The actual or perceived financial stability of other financial institutions and in particular other regional and mid-size banks could adversely affect our business, market valuation and results of operations
6. 06We may need to raise additional capital in the future, and such capital may not be available when needed or at all
7. 07A downgrade of our credit rating could increase our cost of capital or place limitations on business activities
8. 08Evolving expectations of stakeholders including investors, customers, regulators, employees and ratings agencies with respect to our ESG practices and those of our customers may impose additional costs on us, impact our reputation in the market or expose us to emerging risks
9. 09As a lender, our business is highly susceptible to credit risk
10. 10Our ACL may not be adequate to cover actual credit losses
11. 11We depend on the accuracy and completeness of information about clients and counterparties in making credit decisions
12. 12The credit quality of a substantial portion of our assets and our results of operations are affected by residential and commercial real estate values and the level of residential and commercial real estate sales and rental activity
13. 13commercial real estate market and the deterioration in value of some of our loans or the underlying collateral and ultimately to higher loan losses
14. 14Since we engage in lending secured by real estate, we may be forced to foreclose on the collateral property and thereby be subject to risks associated with the ownership of commercial or residential real property, which could have an adverse effect on our business, financial condition or results of operations
15. 15The geographic concentration of our markets in Florida and the New York Tri-State area makes our business highly susceptible to local conditions in those markets
16. 16Our portfolio of operating lease equipment is exposed to fluctuations in the demand for and valuation of the underlying assets. Many of these assets are in service to the fossil fuel industry, and subject to transition risks related to climate change
17. 17Our business is inherently highly susceptible to interest rate risk
18. 18A failure to maintain adequate liquidity could adversely affect our ability to sustain normal operations, our financial condition and results of operations
19. 19We may be subject to material unanticipated outflows of deposits, jeopardizing our ability to maintain sufficient liquidity to conduct normal business operations
20. 20The FRB and the FHLB are important sources of both operating and contingent liquidity. If the availability of those liquidity sources were compromised, our business, financial condition or results of operations could be materially adversely affected
21. 21A significant percentage of our deposits are commercial deposits, many of which are uninsured
22. 22Loss of deposits or a change in deposit mix could increase our funding costs

Operational Risk

1. 23New lines of business, new products and services or strategic project initiatives may subject us to additional operational risks, and the failure to successfully implement these initiatives could affect our reputation and results of operations
2. 24We are subject to the risk of fraud, theft or errors by employees or outsiders and to the impact of ineffective processes and controls, which may adversely affect our business, financial condition and results of operations
3. 25We are dependent on our information technology and telecommunications systems. System failures or interruptions could have an adverse effect on our business, reputation, financial condition and results of operations
4. 26We are highly dependent on third-party service providers for significant aspects of our business infrastructure, information technology, and telecommunications systems
5. 27See "Item 1C - Cybersecurity." for further discussion of measures we have taken to implement safeguards with respect to cybersecurity incidents
6. 28The soundness of other financial institutions, particularly our financial institution counterparties, could adversely affect us

Regulatory, Legal and Compliance Risk

1. 29As a BHC, we and BankUnited operate in a highly regulated environment and the laws and regulations that apply to us, changes in them, or our failure to comply with them, may adversely affect us
2. 30Our ability to expand through acquisition or de novo branching requires regulatory approvals, and failure to obtain them may restrict our growth
3. 31Financial institutions, such as BankUnited, face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations
4. 32We are subject to the CRA and fair lending laws, and failure to comply with these laws could lead to material penalties
5. 33The FDIC's restoration plan and any future related increased assessments could adversely affect our earnings
6. 34Our business may be adversely affected by conditions in the financial markets and economic conditions generally
7. 35Damage to our reputation could adversely affect our operating results
8. 36Our enterprise risk management framework may not be effective in mitigating the risks to which we are subject, or in reducing the potential for losses in connection with such risks
9. 37Our reported financial results depend on management's selection and application of accounting policies and methods and related assumptions and estimates
10. 38Changes in taxes and other assessments may adversely affect us
11. 39The price of our common stock may be volatile or may decline
12. 40Further downgrades of the U.S. credit rating or a government shutdown could negatively impact economic conditions generally and as a result, our business, results of operation and financial condition