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| Record Asset Levels at Bank United Corp. Drive 41 Percent Earnings Increase For First Fiscal Quarter 1999 |
HOUSTON, Jan. 25 /PRNewswire/ -- Bank United Corp. (the "Company") (Nasdaq: BNKU), parent of Bank United (the "Bank") (NYSE: BKU) announced earnings of $29.1 million or $0.90 per diluted share, before deducting expenses of $2.8 million related to its litigation against the federal government in the Court of Claims, for the first fiscal quarter of 1999 ended December 31, 1998 compared to $20.7 million or $0.64 per diluted share for the prior year's first quarter, an increase of 41 percent. Reported earnings after deducting litigation expenses for the Company were $27.4 million or $0.85 per diluted share for the quarter. The Company's assets were $14.8 billion at December 31, 1998 compared to $12.5 billion at December 31, 1997. "Bank United Corp's. significant increases in assets and earnings to record levels are the result of the ongoing successful execution of the Company's strategic plan," said Bank United Corp. President and CEO Barry C. Burkholder. "We continue to focus on increasing commercial and consumer loans and transaction deposits, increasing fee income from mortgage loan servicing and other fee-based businesses, expanding our Texas community banking franchise, and increasing low-cost single family originations." Burkholder continued, "Significantly, the Company increased its assets and net interest income during a period of high prepayments of single-family mortgages and industry concerns about asset growth opportunities and attendant lower net interest income. Commercial and consumer loan balances increased $1.7 billion over the year ago level and $695 million over the prior quarter. As a result of the Company's record high asset level, net interest income was up $10.2 million or 15 percent over the year ago quarter and up $6.7 million or 9 percent over the quarter ended September 30, 1998." Record single-family mortgage originations of $1.6 billion and corresponding sales of $1.3 billion produced gains of $8.7 million above the year ago quarter and $2.9 million over the prior quarter. The Company's mortgage servicing operation increased its fee income by 58 percent over the year ago quarter to $14.7 million and $2.8 million over the prior quarter. Compared to the quarter ended September 30, 1998, the Company maintained its loan servicing portfolio at $28 billion despite a period of record mortgage refinancing activity across the industry. In the Company's Community Bank, small business loan originations were $43 million, including $23 million in Small Business Administration ("SBA") loans, positioning the Bank as the largest originator of SBA loans in Texas. On January 21, 1999, the Company was chosen over major bank competitors by Kroger Stores, the largest Texas supermarket chain, to open 50 branches in the Dallas/ Fort Worth and Houston Metropolitan areas. This will make Bank United easily accessible to all consumers in its two major market areas while offering expanded hours and seven-day banking convenience. This unique investment opportunity will cost the Company $2.6 million, net of tax, or approximately $52,000 per branch for the rest of the fiscal year and will be accretive to earnings next year. This cost will be more than offset by this quarter's excellent earnings which exceeded market estimates. The Company currently operates 12 supermarket branches profitably and has enjoyed a relationship with Kroger since 1996. With this expansion, the planned February acquisition of Midland American Bank, and additional planned branch openings, the Company expects to operate nearly 150 branches across Texas by fiscal year end. "The Company's return on common equity for the quarter was 15.56 percent, up from 13.34 percent for the year ago quarter," added Burkholder. "The Company's efficiency ratio for the current quarter was 47 percent compared to 48 percent for the quarter ended December 31, 1997. Asset quality remains high with non-performing assets representing 0.61 percent of total assets." The Company also reported net income of $35.2 million for the quarter ended December 31, 1998 for its subsidiary Bank United compared to $28.4 million for the same quarter of the previous year. Bank United Corp. is the largest publicly-traded depository institution headquartered in Texas and, through Bank United, operates a 90-branch community banking network in Texas, including 47 in the greater Houston area, 39 in the Dallas/Fort Worth Metroplex and two each in Austin and San Antonio; a commercial banking group with 22 regional offices in 16 states; 9 wholesale mortgage originations offices; a mortgage servicing business; and a financial markets business. The Bank's website address is http://www.bankunited.com. Bank United is an equal housing lender and is FDIC insured. Statements contained herein as to Bank United Corp's. expectations and goals, particularly those related to the success of the Company's business strategy and expansion are forward-looking statements under the Private Securities Reform Act of 1995. Actual results could differ materially from those projected in the statements, due to portfolio characteristics, economic conditions, competition in the industry, and other factors. More information on risk factors affecting the company is available under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended September 30, 1998 on file with the SEC. BANK UNITED CORP. Supplemental Balance Sheet (in thousands) December 31, September 30, December 31, 1998 1998 1997 (unaudited) (unaudited) Assets Cash and cash equivalents $ 321,989 $ 228,674 $ 164,161 Securities purchased under agreements to resell and federal funds sold 185,850 474,483 219,639 Securities and other investments 89,163 91,350 138,076 Mortgage-backed securities, net 1,172,070 932,058 1,410,261 Loans, net: Single family 5,354,154 4,686,600 5,469,280 Single family-held for sale 1,783,143 2,149,009 1,242,031 Commercial 4,144,105 3,472,579 2,659,695 Consumer 519,067 495,556 299,569 Federal Home Loan Bank stock 298,893 242,883 230,913 Mortgage servicing rights 417,235 410,868 276,989 Deferred tax asset 103,350 113,581 113,142 Premises and equipment 67,675 59,889 46,735 Intangible assets 58,253 59,591 15,545 Real estate owned 26,669 18,790 16,071 Other assets 281,945 229,081 221,352 Total assets $14,823,561 $13,664,992 $12,523,459 Liabilities, Minority Interest, and Stockholders' Equity Liabilities: Deposits $ 6,304,183 $ 6,320,476 $ 5,289,625 Federal Home Loan Bank advances 5,888,294 4,783,294 4,504,254 Securities sold under agreements to repurchase and federal funds purchased 752,356 811,742 1,210,137 Notes payable 219,726 219,720 220,204 Mortgage loan principal and interest due investors 359,618 207,626 170,088 Advances from borrowers for taxes and insurance 207,459 270,135 151,734 Other liabilities 200,312 182,087 179,401 Total liabilities 13,931,948 12,795,080 11,725,443 Minority interest: Preferred stock issued by consolidated subsidiary 185,500 185,500 185,500 Stockholders' equity: Common stock 316 316 316 Paid-in capital 129,343 129,343 129,286 Retained earnings 579,028 556,708 477,926 Accumulated other comprehensive income - unrealized gains (losses) on securities available for sale, net of tax (1,511) (1,454) 4,988 Treasury stock, at cost (1,063) (501) 0 Total stockholders' equity 706,113 684,412 612,516 Total liabilities, minority interest and stockholders' equity $ 14,823,561 $ 13,664,992 $ 12,523,459 BANK UNITED CORP. Income Statement Trend (dollars in thousands, except per share data) (unaudited) For the Year Ended For the Quarter Ended 12/31/98 12/31/97 12/31/98 09/30/98 Interest Income Short-term interest-earning assets $ 4,950 $5,556 $4,950 $15,949 Securities and other investments 1,627 2,139 1,627 3,121 Mortgage-backed securities 17,967 24,385 17,967 15,228 Loans 209,765 184,128 209,765 190,316 Federal Home Loan Bank stock 3,823 3,157 3,823 3,191 Total interest income 238,132 219,365 238,132 227,805 Interest Expense Deposits 74,376 67,638 74,376 79,307 Federal Home Loan Bank advances 70,530 60,204 70,530 59,253 Securities sold under agreements to repurchase and federal funds purchased 10,122 18,606 10,122 12,866 Notes payable 4,887 4,896 4,887 4,887 Total interest expense 159,915 151,344 159,915 156,313 Net interest income 78,217 68,021 78,217 71,492 Provision for credit losses 6,486 3,439 6,486 3,346 Net interest income after provision for credit losses 71,731 64,582 71,731 68,146 Non-Interest Income Loan servicing, net of related amortization1 4,723 9,338 14,723 11,886 Net gains (losses) Sales of single family loans 8,513 (174) 8,513 5,660 Securities and mortgage-backed securities 180 915 180 736 Other loans 1,065 0 1,065 (22) Other 8,682 6,520 8,682 8,567 Total non-interest income 33,163 16,599 33,163 26,827 Non-Interest Expense Compensation and benefits 22,233 18,710 22,233 24,417 Occupancy 4,728 3,678 4,728 3,372 Data processing 4,351 3,823 4,351 4,639 Advertising and marketing 2,190 2,874 2,190 2,069 Forbearance litigation 2,761 450 2,761 450 Amortization of intangibles 1,338 885 1,338 1,750 SAIF deposit insurance premiums 967 851 967 1,060 Furniture and equipment 889 892 889 908 Other 14,414 9,027 14,414 11,094 Total non-interest expense 53,871 41,190 53,871 49,759 Income before income taxes and minority interest 51,023 39,991 51,023 45,214 Income tax expense 19,084 14,998 19,084 16,917 Income before minority interest 31,939 24,993 31,939 28,297 Minority interest - Subsidiary preferred stock dividends 4,563 4,563 4,563 4,564 Net Income $27,376 $20,430 $27,376 $23,733 Basic earnings per common share $0.87 $0.65 $0.87 $0.75 Diluted earnings per common share $0.85 $0.63 $0.85 $0.74 BANK UNITED CORP. Income Statement Trend (dollars in thousands, except per share data) (unaudited) For the Quarter Ended 06/30/98 03/31/98 12/31/97 Interest Income Short-term interest-earning assets $10,164 $6,293 $5,556 Securities and other investments 1,693 2,140 2,139 Mortgage-backed securities 19,962 22,595 24,385 Loans 193,439 189,007 184,128 Federal Home Loan Bank stock 3,102 3,181 3,157 Total interest income 228,360 223,216 219,365 Interest Expense Deposits 79,448 74,367 67,638 Federal Home Loan Bank advances 58,242 58,553 60,204 Securities sold under agreements to repurchase and federal funds purchased 10,591 14,019 18,606 Notes payable 4,892 4,896 4,896 Total interest expense 153,173 151,835 151,344 Net interest income 75,187 71,381 68,021 Provision for credit losses 1,814 11,524 3,439 Net interest income after provision for credit losses 73,373 59,857 64,582 Non-Interest Income Loan servicing, net of related amortization 10,630 4,121 9,338 Net gains (losses) Sales of single family loans 2,923 2,715 (174) Securities and mortgage-backed securities 224 886 915 Other loans 297 376 0 Other 8,579 6,760 6,520 Total non-interest income 22,653 14,858 16,599 Non-Interest Expense Compensation and benefits 22,683 20,915 18,710 Occupancy 4,376 4,071 3,678 Data processing 4,202 3,927 3,823 Advertising and marketing 1,685 1,671 2,874 Forbearance litigation 450 450 450 Amortization of intangibles 1,761 1,468 885 SAIF deposit insurance premiums 1,173 1,076 851 Furniture and equipment 1,038 848 892 Other 13,168 12,631 9,027 Total non-interest expense 50,536 47,057 41,190 Income before income taxes and minority interest 45,490 27,658 39,991 Income tax expense 17,014 (23,207) 14,998 Income before minority interest 28,476 50,865 24,993 Minority interest - Subsidiary preferred stock dividends 4,563 4,563 4,563 Net Income $23,913 $46,302 $20,430 Basic earnings per common share $0.76 $1.47 $0.65 Diluted earnings per common share $0.74 $1.43 $0.63 BANK UNITED CORP. Supplemental Financial Information (dollars in thousands, except per share data) (unaudited) For the Quarter Ended 12/31/98 12/31/97 Summary Income Statement Interest income $238,132 $219,365 Interest expense 159,915 151,344 Net interest income 78,217 68,021 Provision for credit losses 6,486 3,439 Loan servicing, net of related amortization 14,723 9,338 Gains (losses) from sales of single family loans 8,513 (174) Other 9,927 7,435 Non-interest income 33,163 16,599 Non-interest expenses 53,871 41,190 Income before income taxes and minority interest 51,023 39,991 Income tax expense 19,084 14,998 Income before minority interest 31,939 24,993 Minority interest - Subsidiary preferred stock dividends 4,563 4,563 Net income $27,376 $20,430 Average common shares outstanding Basic 31,566,728 31,595,596 Diluted 32,140,966 32,325,170 Earnings per common share Basic $0.87 $0.65 Diluted 0.85 0.63 Other Selected Data Total assets -- Period end $14,823,561 $12,523,459 -- Average 14,065,842 12,053,698 Average interest-earning assets 13,009,055 11,345,957 Total deposits 6,304,183 5,289,625 Stockholders' equity -- Period end 706,113 612,516 -- Average 697,024 606,599 ROA (return, before minority interest, on average assets) 0.90 % 0.82 % ROCE (return on average common equity) 15.56 13.34 Average equity to average assets 4.96 5.03 Dividends paid per common share $0.16 $0.16 BANK UNITED CORP. Financial Highlights Trend (dollars in thousands, except per share data) (unaudited) For the Quarter Ended For the Quarter Ended 12/31/98 12/31/97 12/31/98 9/30/98 For the period ended Net interest income $78,217 $68,021 $78,217 $71,492 Provision for credit losses 6,486 3,439 6,486 3,346 Non-interest income 33,163 16,599 33,163 26,827 Non-interest expense 53,871 41,190 53,871 49,759 Net income 27,376 20,430 27,376 23,733 Loan fundings Single family 1,625,949 846,941 1,625,949 997,808 Commercial 1,041,932 528,620 1,041,932 934,186 Consumer 64,527 36,565 64,527 58,505 Total fundings 2,732,408 1,412,126 2,732,408 1,990,499 Common share data Earnings per share Basic 0.87 0.65 0.87 0.75 Diluted 0.85 0.63 0.85 0.74 Dividends paid per common share 0.16 0.16 0.16 0.16 Book value (period end) 22.37 19.39 22.37 21.67 Tangible book value (period end) 20.53 18.89 20.53 19.78 At period end Assets 14,823,561 12,523,459 14,823,561 13,664,992 Securities 89,163 138,076 89,163 91,350 Mortgage-backed securities 1,172,070 1,410,261 1,172,070 932,058 Loans,net 11,800,469 9,670,575 11,800,469 10,803,744 Allowance for credit losses 52,217 35,209 52,217 47,027 Deposits 6,304,183 5,289,625 6,304,183 6,320,476 Borrowed funds 6,860,376 5,934,595 6,860,376 5,814,756 Minority interest 185,500 185,500 185,500 185,500 Stockholders' equity 706,113 612,516 706,113 684,412 Servicing portfolio 27,588,217 24,436,014 27,588,217 27,935,300 Average balances Assets 14,065,842 12,053,698 14,065,842 13,243,434 Stockholders' equity 697,024 606,599 697,024 677,602 Interest-earning assets 13,009,055 11,345,957 13,009,055 12,080,553 Interest-bearing liabilities 12,447,496 10,822,858 12,447,496 11,639,485 Average common shares outstanding Basic 31,566,728 31,595,596 31,566,728 31,595,179 Diluted 32,140,966 32,325,170 32,140,966 32,252,057 Ratios ROA (return, before minority interest, on average assets) 0.90% 0.82% 0.90% 0.85% ROCE (return on average common equity) 15.56 13.34 15.56 13.87 Net interest spread 2.22 2.22 2.22 2.21 Net yield on interest-earning assets 2.44 2.47 2.44 2.40 Efficiency ratio 47.26 47.75 47.26 48.93 Equity to assets (period end) 4.76 4.89 4.76 5.01 Tangible capital ratio (Bank only) 6.52 7.37 6.52 6.75 Core capital ratio (Bank only) 6.54 7.41 6.54 6.77 Risk-based capital ratio (Bank only) 10.39 11.98 10.39 10.48 Asset quality (period end) Nonperforming loans ("NPLs") $63,373 $66,075 $63,373 $61,948 Nonperforming assets ("NPAs") 90,594 83,131 90,594 81,305 NPLs as a % of total loans 0.53% 0.68% 0.53% 0.57% NPAs as a % of total assets 0.61 0.66 0.61 0.59 BANK UNITED CORP. FINANCIAL HIGHLIGHTS TREND (dollars in thousands, except per share data) (unaudited) For the Quarter Ended 6/30/98 3/31/98 For the period ended Net interest income $75,187 $71,381 Provision for credit losses 1,814 11,524 Non-interest income 22,653 14,858 Non-interest expense 50,536 47,057 Net income 23,913 46,302 Loan fundings Single family 832,562 1,112,078 Commercial 723,001 690,521 Consumer 128,562 143,465 Total fundings 1,684,125 1,946,064 Common share data Earnings per share Basic 0.76 1.47 Diluted 0.74 1.43 Dividends paid per common share 0.16 0.16 Book value (period end) 21.19 20.67 Tangible book value (period end) 19.25 18.68 At period end Assets 13,095,947 13,109,497 Securities 137,414 61,753 Mortgage-backed securities 1,050,101 1,319,704 Loans, net 9,711,789 9,967,065 Allowance for credit losses 44,935 44,415 Deposits 6,419,242 6,506,367 Borrowed funds 5,189,733 5,116,933 Minority interest 185,500 185,500 Stockholders' equity 669,411 653,021 Servicing portfolio 29,349,450 23,887,887 Average balances Assets 13,038,008 12,708,333 Stockholders' equity 662,469 627,384 Interest-earning assets 12,082,896 11,804,306 Interest-bearing liabilities 11,503,379 11,388,405 Average common shares outstanding Basic 31,595,596 31,595,596 Diluted 32,442,309 32,316,688 Ratios ROA (return, before minority interest, on average assets) 0.88% 1.62% ROCE (return on average common equity) 14.49 29.97 Net interest spread 2.24 2.20 Net yield on interest-earning assets 2.49 2.39 Efficiency ratio 49.95 52.98 Equity to assets (period end) 5.11 4.98 Tangible capital ratio (Bank only) 7.03 7.02 Core capital ratio (Bank only) 7.06 7.06 Risk-based capital ratio (Bank only) 10.93 11.59 Asset quality (period end) Nonperforming loans ("NPLs") $66,520 $62,167 Nonperforming assets ("NPAs") 85,548 82,671 NPLs as a % of total loans 0.68% 0.62% NPAs as a % of total assets 0.65 0.63SOURCE Bank United Corp.
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www.bankunited.com
CONTACT:
Vern Stockton, media, 713-543-6920, or Debbie
Kemple, investors, 713-543-6926, both of Bank United Corp.
