Shareholders of BankUnited, Inc. (BKU - Free Report) rejoiced the announcement of a tax refund from the Internal Revenue Service (IRS) as reflected in the 5.9% jump in its share price. The news was reported in the company’s latest Securities and Exchange Commission (SEC) filing on Monday.
This Miami Lakes-based bank is expected to receive a $295-million tax refund, which will be recorded in fourth-quarter 2017. As per the filing, this refund results from the IRS’ treatment of "certain loans" acquired while BankUnited acquired its predecessor in 2009. This was noted during the ongoing audit of the consolidated U.S. federal income tax return of BankUnited and its subsidiaries for 2013.
Notably, interest for income taxes paid for the 2012, 2013 and 2014 tax years will also be refunded along with the refund amount.
Initially, IRS was in disagreement with the refund, but a memo was recently issued by the federal agency agreeing to the refund.
Following the $295-million refund, BankUnited might pursue other refund claims also in various state and local tax jurisdictions. Additionally, claims associated with tax years prior to 2012 are being evaluated by the bank, though certainty of such claims is ambiguous.
Notably, the recent refund, which exceeds total net income of the first three quarters of 2017 by $100 million, has cheered shareholders to an extent.
BankUnited was chartered in May 2009 on acquisition of all the banking operations of Coral Gables-based BankUnited FSB. Founded in 1984, BankUnited FSB failed during the financial crisis and was confiscated by regulators. Therefore, it was acquired by the current BankUnited holding company.
BankUnited carries a Zacks Rank #3 (Hold), at present. In a year’s time, the company’s share price has been up more than 6% as compared with the industry’s gain of 17.1%.
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