BankUnited Financial Corp. of Coral Gables, Fla., announced Monday that it would report a loss for the second quarter because it prepaid $405 million of Federal Home Loan Bank advances.
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The prepayment penalties associated with these borrowed funds are $37.7 million, which the company said would reduce its earnings for the second quarter by about $24.5 million. In the first quarter BankUnited earned $13.6 million.
The $9.3 billion-asset company said that it had decided to prepay the advances to lower its cost of funds and increase profits in the future. It is paying 6% interest on the loans.
