EX-99 3 dex99.htm PRESS RELEASE Press Release

 

[LOGO]

 

N E W S R E L E A S E

 

FOR IMMEDIATE RELEASE

APRIL 23, 2003

  

Contact:

  

Investor Relations:

Lauren Camner

305-231-6535

  

Corporate Communications:

Carlos Fernandez-Guzman

305-231-6518

Andrew Skobinsky

305-231-6556

 

BANKUNITED ANNOUNCES RECORD INCOME – UP 28% IN SECOND QUARTER

MICRO MARKET RETAIL STRATEGY SETS DIRECTION FOR FUTURE

 

Coral Gables, FL—BankUnited Financial Corporation, parent company of BankUnited, FSB, continued its record-breaking quarterly earnings pace and has announced net income of $9.6 million for the second quarter of fiscal 2003, which ended on March 31, 2003. Second-quarter results are up 28% from $7.5 million for the same period in the prior year. Basic and diluted earnings were $0.37 and $0.35 per share, respectively, in the second quarter versus $0.29 and $0.28 per share, respectively, for the corresponding period last year. This represents increases of 28% and 25% for basic and diluted earnings per share, respectively.

 

Net income for the first six months of fiscal 2003 was $18.4 million compared to $14.4 million for the same period last year, a 28% increase. Basic and diluted earnings per share for the six months ended March 31, 2003, were $0.72 and $0.67, respectively, versus $0.57 and $0.54, respectively, for the same period in the prior year. This represents increases of 26% and 24% for basic and diluted earnings per share, respectively.

 

Highlights for the Quarter Ended March 31, 2003:

 

  •   Ninth consecutive quarter of record net-income
  •   Total loan production reached $657 million, up 28% from the same period in the prior year
  •   Total loan balances grew $183 million, excluding pre-pays of loans serviced by others (LSBO)
  •   Recurring non-interest income increased to $5.0 million, up 14 % over the same period last year
  •   Core deposits grew to $1.3 billion, up 18% over the same period last year
  •   Non-interest bearing deposits grew by 39% from the same prior year period to reach $145 million
  •   Total assets reached $6.6 billion
  •   Retired high-interest debt
  •   Book value per common share is up 17% from the same prior year period to $14.23
  •   Opened 41st banking office

 

(more)

 

Page 1 of 5

 

Second Quarter Results Discussion

 

Alfred R. Camner, Chairman and Chief Executive Officer said, “It has been another record-breaking quarter for BankUnited, and I am extremely pleased that the company was able to exceed analysts’ earnings estimates. This quarter we took a decisive step to reduce high interest debt by redeeming our 9.60% Cumulative Trust Preferred Securities. This resulted in a charge to earnings of $1.8 million, which was partially offset by a $1.1 million life insurance benefit payment. Without this strategic charge, we would have displayed even stronger results this quarter.”

 

Camner added, “I am also very pleased with our strong loan production growth. This enabled the company’s loan balances to grow by $47 million, in the face of substantial loan pre-payments. More importantly, excluding pre-payments of residential loans purchased from and serviced by others (LSBO) our loan balances grew by $183 million. As our LSBO portfolio finishes pre-paying over the next several quarters, we anticipate even stronger growth in total loan balances.”

 

Lending Performance – Strong Residential Originations

 

Total loan originations reached $657 million this quarter, up 28% from the corresponding period last year. Residential loan originations, net of BankUnited’s consumer mortgage loans, reached an impressive $471 million this quarter, an increase of 38% over the second quarter of fiscal year 2002, and contributed significantly to the company’s overall lending results. Management continues its policy of not purchasing LSBOs and relying on strong BankUnited-originated residential production for growth.

 

Consumer loan production, which includes consumer mortgage loans originated through the branch network, reached $97 million this quarter, up 23% from the same period in the prior year.

 

Net Interest Margin and Pre-Payments

 

The effect of industry-high levels of residential loan pre-payments coupled with market-driven competitive deposit pricing, has resulted in a net interest margin of 1.96% this quarter as compared to 2.20% for the same period in the prior year, and 2.04% in the previous quarter.

 

The current interest rate environment has presented a particular challenge in the form of industry-wide acceleration of prepayments on residential loans. The effect of pre-payments was felt strongly by BankUnited in the area of LSBOs, which were purchased several years ago. This portfolio, which stood at $687 million at September 30, 2002, has pre-paid at a rate more than double that of the bank’s self-originated residential portfolio, and now has a balance of $381 million. BankUnited anticipates continued rapid pre-payments and substantial depletion of this portfolio over the next several quarters, which will continue to have an adverse effect on the company’s interest-rate margin until reaching its end. Notwithstanding the high pre-payment levels, BankUnited’s loan portfolio showed growth of $183 million over the quarter ended December 31, 2002. BankUnited will continue to offset the LSBO run-off with BankUnited-originated loans and expects this strategy to help strengthen the interest margin over time.

 

(more)

 

Page 2 of 5

 

Non-Interest Income Shows Growth

 

Total non-interest income for the quarter reached $6.1 million, which was up 39% as compared to the same period in the prior year. Continuing the policy of primarily selling the bank’s originated fixed-rate conforming residential loans, the company realized sales-gains of $1.9 million from the sale of assets, in the form of loans and securitized loans, which were originated for sale. Also included in non-interest income was a life insurance benefit of $1.1 million. Without the aforementioned benefit payment, non-interest income would have been $5.0 million, a 14% increase over the prior year period.

 

Non-Interest Expense and Efficiency Ratio

 

A $1.8 million charge incurred in the complete redemption of the company’s 9.60% Cumulative Trust Preferred Securities, totaling $46 million, resulted in an increase of 16% in non-interest expense over this period last year. Without this occurrence, expenses related to normal operations would have shown a 7% year-over-year increase, reflecting the company’s expansion. Management continues to institute expense control programs while allowing for expenditures that will enhance infrastructure and promote growth.

 

Reflecting the higher expense level created by the redemption, the efficiency ratio was 58.8% for the quarter, up from 55.8% this time last year. Without this debt-redemption expense, and excluding the aforementioned life insurance benefit payment, this ratio would have been 55.6%.

 

Deposit mix shifts toward transaction accounts

 

Total deposits increased to $3.1 billion as compared to $3.0 billion as of December 31, 2002, and are up 7% from the end of the second quarter of fiscal 2002. The company notes particularly that core deposits grew by 18% to reach $1.3 billion as compared to this time last year. Attention should also be paid to the growth in non-interest bearing deposits, which showed an impressive jump of 39% from the second quarter last year to reach $145 million. This shift in the deposit mix illustrates the company’s increasing ability to acquire account relationships that can be deepened through cross-sell efforts.

 

The company believes that the branch network will continue to play a vital role in building household banking relationships and toward this objective has opened its 41st branch location in the Broward County community of Wilton Manors.

 

Asset Quality

 

BankUnited places great importance on safeguarding its credit quality, and supports this through high credit standards and a centralized credit policy area. Second quarter results, however, indicated an increase in non-performing loans as a percentage of total loans. This increase is primarily attributed to the delay in the closing of a commercial loan pay-off, scheduled for quarter end.

 

Given the company’s focus on real estate secured lending, allowance for loan losses as a percentage of total loans is currently at a level of 0.53%, up from 0.46% for the second quarter last year.

 

(more)

 

Page 3 of 5

 

Total Assets and Capital Ratios and Book Value

 

Assets continue to grow, and now total $6.6 billion versus $5.6 billion at this time last year.

 

BankUnited, FSB is maintaining its strong capital position well in excess of regulatory requirements, with core and risk-based capital ratios of 7.5% and 16.9%, respectively.

 

Book value per common share is up 17% from the same prior year period to $14.23.

 

Retirement of High Interest Debt

 

During the quarter, the company called for redemption all of its 9.60% Junior Subordinated Deferrable Interest Debentures which are held by its trust subsidiary, BankUnited Capital II. As a result, the 9.60% Cumulative Trust Preferred Securities (Nasdaq: BKUNZ) were redeemed on March 28, 2003, at a price of $25.00 per share plus accumulated and unpaid interest. The Company anticipates retiring additional high-interest debt through funds raised through additional debt or equity offerings in the near future.

 

Strategic Direction – Micro Market Roll Out

 

Shortly following the close of the quarter, BankUnited launched its micro-market strategy for the retail banking operation. The initiative, which divided the company’s marketplace into eleven micro markets, is designed to provide BankUnited customers with an even greater level of high-touch service and to significantly enhance community ties. Emphasizing that it is a true market-driven strategy, the company has empowered its micro-market managers with enhanced decision-making abilities, greater latitude in community sponsorship and involvement, and customer-centric promotions and product bundles.

 

Ramiro Ortiz, President and Chief Operating Officer, stated, “This should prove to be a highly effective approach in our efforts to build true long-term, loyal, banking relationships. By offering our customers the advantages of community-bank service, localized decision-making, and market-savvy bankers backed by our asset strength and broad product array, we will likely change the banking landscape in our markets. We have carved a niche for ourselves by offering more products and services than our community bank competitors, and more high-touch, personalized and flexible service than our larger regional competitors. We are very enthusiastic about the potential of this plan and have the utmost confidence in the strong BankUnited team that will carry it out.”

 

About BankUnited

 

BankUnited Financial Corporation is the parent company of BankUnited, FSB, the largest banking institution headquartered in Florida. Offering a full array of consumer and commercial banking products and services, BankUnited operates 41 banking offices throughout Miami-Dade, Broward, Palm Beach, and Collier Counties. BankUnited can be accessed on the Internet at www.buexpress.com.

 

BankUnited’s Class A Common Stock trades on the Nasdaq National Market under the trading symbol BKUNA. BankUnited’s 9.0% Trust Preferred Securities trade on the New York Stock Exchange under the trading symbol BUFPrC.

 

(more)

 

Page 4 of 5

 

Forward-Looking Statements

 

This press release may contain certain forward-looking statements, which are based on management’s expectations regarding factors that may impact the Company’s earnings and performance in future periods. Factors that could cause future results and performance to vary materially from current management expectations include, but are not limited to, general economic conditions, war and terrorism, changes in interest rates, deposit flows, loan demand, real estate values and competition; the issuance or redemption of additional company equity or debt; changes in accounting principles, policies or guidelines, changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological facts affecting the Company’s operations, pricing, products and services. Nothing contained herein constitutes an offer to sell or the solicitation of an offer to buy the Company’s securities.

 

# # #

 

Page 5 of 5

 

BankUnited Financial Corporation

Quarter Ended March 31, 2003 Earnings Release

 

    

For the Three Months Ended March 31,

   

For the Six Months Ended March 31,

    

2003

     

2002

   

2003

   

2002

    

(dollars and shares in thousands, except per share data)

Operations Data:

     

Interest income:

                              

Interest and fees on loans

   

$

58,421

 

   

$

64,161

   

$

119,634

   

$

130,248

Interest on mortgage-backed securities

   

 

19,296

 

   

 

15,183

   

 

32,967

   

 

28,633

Interest on short-term investments

   

 

110

 

   

 

163

   

 

227

   

 

314

Interest and dividends on long-term investments and other interest-earning assets

   

 

3,463

 

   

 

2,886

   

 

6,722

   

 

5,843

    
  
  
  

Total interest income

   

 

81,290

 

   

 

82,393

   

 

159,550

   

$

165,038

Interest expense:

                              

Interest on deposits

   

 

21,112

 

   

 

25,882

   

 

43,756

   

 

54,803

Interest on borrowings

   

 

24,754

 

   

 

23,131

   

 

47,886

   

 

46,366

Preferred dividends of Trust Subsidiary

   

 

5,259

 

   

 

4,945

   

 

10,135

   

 

9,874

    
  
  
  

Total interest expense

   

 

51,125

 

   

 

53,958

   

 

101,777

   

 

111,043

    
  
  
  

Net interest income

   

 

30,165

 

   

 

28,435

   

 

57,773

   

 

53,995

Provision for loan losses

   

 

1,250

 

   

 

2,450

   

 

2,550

   

 

5,400

    
  
  
  

Net interest income after provision for loan losses

   

 

28,915

 

   

 

25,985

   

 

55,223

   

 

48,595

Other income:

                              

Service fees on loans

   

 

56

 

   

 

635

   

 

308

   

 

1,056

Service fees on deposits

   

 

991

 

   

 

819

   

 

2,020

   

 

1,635

Service fees other

   

 

312

 

   

 

237

   

 

604

   

 

439

Gain on sales of loans, securities, and other assets (1)

   

 

1,860

 

   

 

973

   

 

4,523

   

 

2,394

Insurance and investment income

   

 

626

 

   

 

1,084

   

 

1,320

   

 

2,181

Other income

   

 

2,212

 

   

 

664

   

 

3,022

   

 

1,220

    
  
  
  

Total other income

   

 

6,057

 

   

 

4,412

   

 

11,797

   

 

8,925

Other expense:

                              

Employee compensation

   

 

9,708

 

   

 

7,635

   

 

18,369

   

 

14,413

Occupancy and equipment

   

 

3,005

 

   

 

2,692

   

 

5,953

   

 

5,316

Insurance and professional fees

   

 

1,489

 

   

 

1,510

   

 

2,916

   

 

2,773

Telecommunications and data processing

   

 

1,209

 

   

 

1,154

   

 

2,419

   

 

2,161

Loan servicing expense

   

 

362

 

   

 

809

   

 

847

   

 

1,732

Advertising and promotion expense

   

 

1,256

 

   

 

1,725

   

 

2,443

   

 

3,280

Other operating expenses

   

 

4,282

 

   

 

2,792

   

 

6,599

   

 

5,117

    
  
  
  

Total other expense

   

 

21,311

 

   

 

18,317

   

 

39,546

   

 

34,792

    
  
  
  

Income before income taxes

   

 

13,661

 

   

 

12,080

   

 

27,474

   

 

22,728

Provision for income taxes

   

 

4,055

 

   

 

4,615

   

 

9,082

   

 

8,326

    
  
  
  

Net income

   

$

9,606

 

   

$

7,465

   

$

18,392

   

$

14,402

    
  
  
  

Earning Per Share Data:

                              

Net income

   

$

9,606

 

   

$

7,465

   

$

18,392

   

$

14,402

Preferred stock dividends

   

 

79

 

   

 

51

   

 

158

   

 

101

    
  
  
  

Net income available to common stockholders

   

$

9,527

 

   

$

7,414

   

$

18,234

   

$

14,301

    
  
  
  

Basic earnings per common share:

   

$

0.37

 

   

$

0.29

   

$

0.72

   

$

0.57

    
  
  
  

Weighted average common shares

   

 

25,539

 

   

 

25,195

   

 

25,398

   

 

25,131

    
  
  
  

Diluted earnings per common share:

   

$

0.35

 

   

$

0.28

   

$

0.67

   

$

0.54

    
  
  
  

Weighted average diluted common shares

   

 

27,710

 

   

 

26,929

   

 

27,572

   

 

26,846

    
  
  
  
(1)    Consists of the following:          
    

For the Three

Months Ended

March 31,

   

For the Six

Months Ended
March 31,

    

2003

     

2002

   

2003

   

2002

Gain on sales of loans and securitizations

   

$

1,896

 

   

$

509

   

$

3,129

   

$

1,097

(Loss)/Gain on sales of investments and other assets

   

$

(36

)

   

$

464

   

$

1,394

   

$

1,297

 

(continued on next page)

 

1 of 3

 

BankUnited Financial Corporation

Quarter Ended March 31, 2003 Earnings Release (continued)

 

    

As of March 31,

  
    

2003

     

2002

  
    

(dollars in thousands)

  

Selected Balance Sheet Data:

       

Asset Data:

                  

Total assets

   

$

6,610,146

 

   

$

5,631,193

 

Cash and cash equivalents

   

$

87,663

 

   

$

345,928

 

Investment securities

   

$

211,635

 

   

$

134,811

 

Mortgage-backed securities

   

$

1,967,638

 

   

$

1,086,689

 

Loans:

                  

Residential loans

   

$

3,122,413

 

   

$

3,010,088

 

Commercial and commercial real estate loans

   

 

489,594

 

   

 

414,945

 

Consumer loans (1)

   

 

105,936

 

   

 

93,908

 

Unearned discounts, premiums and loan fees

   

 

33,499

 

   

 

27,296

 

Allowance for loan losses

   

 

(21,662

)

   

 

(17,831

)

    
  

Loans receivable, net (excluding loans held for sale)

   

$

3,729,780

 

   

$

3,528,406

 

Loans held for sale

   

$

323,568

 

   

$

289,928

 

FHLB Stock

   

$

100,118

 

   

$

83,869

 

Liability Data:

                  

Total liabilities

   

$

6,240,560

 

   

$

5,322,295

 

Deposits:

                  

Non-interest bearing deposits

   

$

145,309

 

   

$

104,251

 

Interest bearing checking and money market deposits

   

 

449,419

 

   

 

288,369

 

Savings

   

 

713,422

 

   

 

733,610

 

Certificates of Deposit

   

 

1,764,062

 

   

 

1,759,142

 

    
  

Total deposits

   

$

3,072,212

 

   

$

2,885,372

 

Borrowings

   

$

2,742,032

 

   

$

2,153,921

 

Trust preferred securities

   

$

260,463

 

   

$

232,592

 

Equity Data:

                  

Total stockholders' equity

   

$

369,586

 

   

$

308,898

 

Preferred equity

   

$

5,345

 

   

$

4,246

 

AVERAGE BALANCE SHEET DATA (For the three months ended March 31,)

                  

Loans, net

   

$

4,013,507

 

   

$

3,906,684

 

Investment securities

   

$

202,344

 

   

$

140,174

 

Mortgage-backed securities

   

$

1,793,259

 

   

$

992,438

 

Interest-earning assets

   

$

6,082,107

 

   

$

5,108,079

 

Assets

   

$

6,368,959

 

   

$

5,324,783

 

Interest bearing deposits

   

$

2,941,220

 

   

$

2,742,509

 

Non-interest-bearing deposits

   

$

130,030

 

   

$

97,740

 

Borrowings

   

$

2,580,855

 

   

$

1,907,170

 

Trust preferred securities

   

$

289,142

 

   

$

213,597

 

Interest-bearing liabilities

   

$

5,811,217

 

   

$

4,863,276

 

Liabilities

   

$

6,008,584

 

   

$

5,016,672

 

Stockholders' equity

   

$

360,375

 

   

$

308,110

 

 

(1)   Excludes consumer mortgage products which are included in Residential Loans.

 

(continued on next page)

 

2 of 3

 

BankUnited Financial Corporation

Quarter Ended March 31, 2003 Earnings Release (continued)

 

    

For the Three Months Ended
March 31,

     

For the Six Months Ended
March 31,

  
    

2003

     

2002

     

2003

     

2002

  

Selected Data:

                                

Performance Data:

                                

Return on average tangible common equity

   

 

11.66

%

   

 

10.72

%

   

11.39

%

   

10.42

%

Return on average assets

   

 

0.60

%

   

 

0.56

%

   

0.61

%

   

0.55

%

Yield on interest-earning assets

   

 

5.32

%

   

 

6.43

%

   

5.49

%

   

6.54

%

Cost of interest-bearing liabilities

   

 

3.46

%

   

 

4.38

%

   

3.61

%

   

4.56

%

Net interest yield on earning assets (margin)

   

 

1.96

%

   

 

2.20

%

   

2.00

%

   

2.15

%

Net interest spread

   

 

1.86

%

   

 

2.05

%

   

1.88

%

   

1.98

%

Efficiency Ratio

   

 

58.83

%

   

 

55.76

%

   

56.84

%

   

55.27

%

    

As of March 31,

                
    

2003

     

2002

                
    

(dollars and shares in thousands, except per share data)

                

Equity Data:

                                

Book value per common share

   

$

14.23

 

   

$

12.14

 

              

Closing price of Class A Common Stock

   

$

17.65

 

   

$

14.98

 

              

Common shares outstanding

   

 

25,597

 

   

 

25,097

 

              

Average equity to average assets for the three months ended March 31,

   

 

5.66

%

   

 

5.79

%

              

Non-Performing Assets:

                                

Non-accrual loans

   

$

36,931

 

   

$

25,124

 

              

Restructured loans

   

 

311

 

   

 

638

 

              
    
  
             

Total non-performing loans

   

 

37,242

 

   

 

25,762

 

              
    
  
             

Non-accrual tax certificates

   

 

568

 

   

 

939

 

              

Real estate owned

   

 

4,765

 

   

 

5,821

 

              
    
  
             

Total non-performing assets

   

 

42,575

 

   

 

32,522

 

              
    
  
             

Allowance for losses on tax certificates

   

 

606

 

   

 

939

 

              

Allowance for loan losses

   

 

21,662

 

   

 

17,831

 

              
    
  
             

Total allowance

   

$

22,268

 

   

$

18,770

 

              
    
  
             

Non-performing assets to total assets

   

 

0.64

%

   

 

0.58

%

              

Non-performing loans to total loans

   

 

0.91

%

   

 

0.67

%

              

Allowance for loan losses as a percentage of total loans

   

 

0.53

%

   

 

0.46

%

              

Allowance for loan losses as a percentage of non-performing loans

   

 

58.17

%

   

 

69.21

%

              

Net charge-offs for the three months ended March 31,

   

$

441

 

   

$

2,302

 

              

Net annualized year-to-date charge-offs as a percentage of average total loans

   

 

0.06

%

   

 

0.18

%

              

Capital Ratios:

                                

Tangible capital ratio (1)

   

 

7.5

%

   

 

6.9

%

              

Core capital ratio (1)

   

 

7.5

%

   

 

6.9

%

              

Risk-based capital ratio (1)

   

 

16.9

%

   

 

14.9

%

              

 

(1)   Capital ratios are for BankUnited FSB only.

 

3 of 3