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| Bank United Corp. Reports Increased Earnings For Second Fiscal Quarter 1998 |
HOUSTON, April 28 /PRNewswire/ -- Bank United Corp. (Nasdaq: BNKU) (the "Company"), parent of Bank United (NYSE: BKR PrA and BKU PrB) (the "Bank"), today reported net income of $46.3 million or $1.43 per diluted share for the quarter ended March 31, 1998 compared to $22.1 million or $0.69 per diluted share for the quarter ended March 31, 1997. The current quarter's earnings included two positive income tax adjustments, an increase in commercial loan allowances, and allowances for higher prepayments in the Company's single family loan and servicing portfolios. Excluding these adjustments and the year ago quarter's gain on sale of the retail mortgage origination network, the Company recognized net income of $21.9 million or $0.68 per diluted share in the current quarter compared to $19.6 million or $0.61 per diluted share in the year ago quarter. "During the quarter, the Company successfully resolved an outstanding tax benefit lawsuit with the Federal Deposit Insurance Corporation as Manager of the Federal Savings and Loan Insurance Corporation Resolution Fund which resulted in a positive income tax adjustment of approximately $6.0 million or $0.18 per diluted share," said Bank United Corp. President and CEO Barry C. Burkholder. "Additionally, the Company recognized a positive income tax adjustment of $27.5 million or $0.85 per diluted share resulting from the anticipated use of additional net operating losses against future taxable income." In light of the substantial growth of its commercial portfolios, the Company added $7.8 million before tax or $0.15 per diluted share to its commercial loan allowances. Mr. Burkholder added that, "Asset quality remains strong with no charge-offs recorded to date on any of our originated commercial loans." To safeguard earnings against a prolonged period of lower interest rates, the Company also established additional allowances for possible loan prepayments. These allowances totaled $6.7 million before tax or $0.13 per diluted share. Net interest income increased $6.9 million based on the Company's growth in commercial loans. Two million dollars of the previously discussed allowance reduced the net yield on interest earning assets from 2.46 % to 2.39 % for the quarter. Net loan servicing income increased $1.2 million or 16% before the previously discussed allowance of $4.7 million for this quarter. Other non- interest income increased $ 2.0 million or 41% during the current quarter as a result of growth in the number of checking accounts and increased annuity sales. Non-interest expenses increased $4.5 million as the result of additional expenses related to the 18 branches and $1.4 billion in deposits acquired from Guardian Savings in January and the one-time start-up of the Company's home equity loan program in Texas. During the quarter ended March 31, 1998, the Company approved $227 million of such loans and had funded $104 million. Excluding the previously described allowances and the one-time home equity start-up costs, the Company's efficiency ratio moved down to 48.58% from 48.84% year over year. The Company's assets were $13.1 billion at March 31, 1998 compared to $11 billion at March 31, 1997. Stockholders' equity increased to $653 million at March 31, 1998, up from $568.9 million at March 31, 1997. The Company also reported net income of $54.2 million for the quarter ended March 31, 1998 for its subsidiary Bank United compared to $28.8 million for the same quarter of the previous year. Bank United Corp., headquartered in Houston, is the largest publicly- traded depository institution headquartered in Texas and, through Bank United, operates a 80-branch community banking network in Texas, including 41 in the greater Houston area, 35 in the Dallas/Fort Worth area and two each in Austin and San Antonio; a commercial banking group with 21 regional offices in 18 states; 6 wholesale mortgage origination offices; a mortgage servicing business; and a financial markets business. BANK UNITED CORP. SUPPLEMENTAL BALANCE SHEET (in thousands) March 31, September 30, March 31, 1998 1997 1997 (unaudited) (unaudited) Assets Cash and cash equivalents $ 197,207 $ 121,000 $ 111,252 Securities purchased under agreements to resell and federal funds sold 609,503 349,209 538,455 Securities 61,753 77,809 29,200 Mortgage-backed securities, net 1,319,704 1,569,705 1,525,086 Loans, net: Single family 4,556,130 5,795,179 6,187,096 Single family-held for sale 2,146,018 697,410 207,734 Commercial 2,880,053 2,201,880 1,394,338 Consumer 384,864 300,760 242,974 Federal Home Loan Bank stock 217,845 205,011 194,668 Premises and equipment 50,788 46,921 37,716 Mortgage servicing rights 275,672 272,214 208,003 Intangible assets 62,915 13,605 12,517 Real estate owned 19,645 19,833 29,462 Deferred tax asset 129,939 120,936 139,567 Other assets 197,461 175,600 144,557 Total assets $ 13,109,497 $ 11,967,072 $ 11,002,625 Liabilities, Minority Interest, and Stockholders' Equity Liabilities: Deposits $ 6,506,367 $ 5,247,668 $ 5,065,804 Federal Home Loan Bank advances 4,228,294 3,992,344 3,786,596 Securities sold under agreements to repurchase and federal funds purchased 668,430 1,308,600 927,859 Notes payable 220,209 220,199 115,000 Advances from borrowers for taxes and insurance 175,747 173,294 117,842 Other liabilities 471,929 240,988 235,127 Total liabilities 12,270,976 11,183,093 10,248,228 Minority interest: Preferred stock issued by consolidated subsidiary 185,500 185,500 185,500 Stockholders' equity: Common stock 316 316 316 Paid-in capital 129,286 129,286 129,286 Retained earnings 519,172 462,551 434,193 Unrealized gains (losses) on securities available for sale, net of tax 4,247 6,326 5,102 Total stockholders' equity 653,021 598,479 568,897 Total liabilities, minority interest and stockholders' equity $ 13,109,497 $ 11,967,072 $ 11,002,625 BANK UNITED CORP. INCOME STATEMENT TREND (dollars in thousands, except per share data) (unaudited) For the Six Months Ended 03/31/98 03/31/97 Interest Income Short-term interest-earning assets $ 11,849 $ 17,537 Securities 4,279 2,231 Mortgage-backed securities 46,980 53,336 Loans 373,135 318,400 Federal Home Loan Bank stock 6,338 5,527 Total interest income 442,581 397,031 Interest Expense Deposits 142,005 129,374 Federal Home Loan Bank advances 118,757 105,302 Securities sold under agreements to repurchase and federal funds purchased 32,625 25,440 Notes payable 9,792 4,626 Total interest expense 303,179 264,742 Net interest income 139,402 132,289 Provision for credit losses 14,963 11,219 Net interest income after provision for credit losses 124,439 212,070 Non-Interest Income Net gains (losses) Sales of single family servicing rights and single family warehouse loans 2,541 16,931 Securities and mortgage-backed securities 1,801 1,593 Other loans 376 936 Sale of mortgage offices --- 3,998 Loan servicing, net of related amortization 13,459 15,826 Other 13,280 9,704 Total non-interest income 31,457 48,988 Non-Interest Expense Compensation and benefits 39,625 39,300 Occupancy 7,749 7,871 Data processing 7,750 7,219 Advertising and marketing 4,545 4,150 Amortization of intangibles 2,353 2,512 SAIF deposit insurance premiums 1,927 3,162 Furniture and equipment 1,740 2,248 Other 22,558 24,691 Total non-interest expense 88,247 91,153 Income before income taxes, minority interest, and extraordinary loss 67,649 78,905 Income tax expense (8,209) 30,413 Income before minority interest and extraordinary loss 75,858 48,492 Minority interest Subsidiary preferred stock dividends 9,126 9,126 Income before extraordinary loss 66,732 39,366 Extraordinary loss --- --- NET INCOME $ 66,732 $ 39,366 Basic earnings per common share (A) Income before extraordinary loss $ 2.11 $ 1.25 Net income 2.11 1.25 Diluted earnings per common share (A) Income before extraordinary loss $ 2.06 $ 1.23 Net income 2.06 1.23 (A) Prior periods restated for Statement of Financial Accounting Standard ("SFAS") No. 128, Earnings Per Share. The sum of EPS amounts for four quarters may not equal annual EPS amounts due to changes in weighted average shares outstanding during the periods and to rounding. For the Quarter Ended 03/31/98 12/31/97 09/30/97 06/30/97 03/31/97 Interest Income Short-term interest-earning assets $ 6,293 $ 5,556 $ 9,508 $ 9,195 $ 8,194 Securities 2,140 2,139 1,619 1,521 1,251 Mortgage-backed securities 22,595 24,385 25,945 25,610 26,520 Loans 189,007 184,128 170,809 163,677 159,136 Federal Home Loan Bank stock 3,181 3,157 2,893 2,900 2,827 Total interest income 223,216 219,365 210,774 202,903 197,928 Interest Expense Deposits 74,367 67,638 67,654 65,733 62,650 Federal Home Loan Bank advances 58,553 60,204 54,857 52,399 53,378 Securities sold under agreements to repurchase and federal funds purchased 14,019 18,606 17,632 14,263 13,081 Notes payable 4,896 4,896 4,896 3,888 2,315 Total interest expense 151,835 151,344 145,039 136,283 131,424 Net interest income 71,381 68,021 65,735 66,620 66,504 Provision for credit losses 11,524 3,439 3,463 3,425 4,305 Net interest income after provision for credit losses 59,857 64,582 62,272 63,195 62,199 Non-Interest Income Net gains (losses) Sales of single family servicing rights and single family warehouse loans 2,715 (174) 707 3,544 6,442 Securities and mortgage-backed securities 886 915 564 684 952 Other loans 376 --- 136 56 (4) Sale of mortgage offices --- --- 750 --- 3,998 Loan servicing, net of related amortization 4,121 9,338 8,746 7,809 7,651 Other 6,760 6,520 6,227 5,221 4,792 Total non-interest income 14,858 16,599 17,130 17,314 23,831 Non-Interest Expense Compensation and benefits 20,915 18,710 17,815 17,901 19,325 Occupancy 4,071 3,678 3,571 3,501 3,616 Data processing 3,927 3,823 3,495 2,998 3,418 Advertising and marketing 1,671 2,874 1,168 1,829 1,895 Amortization of intangibles 1,468 885 768 838 1,197 SAIF deposit insurance premiums 1,076 851 812 823 205 Furniture and equipment 848 892 873 953 1,029 Other 13,081 9,477 11,224 12,414 11,899 Total non- interest expense 47,057 41,190 39,726 41,257 42,584 Income before income taxes, minority interest, and extraordinary loss 27,658 39,991 39,676 39,252 43,446 Income tax expense (23,207) 14,998 15,187 15,086 16,780 Income before minority interest and extraordinary loss 50,865 24,993 24,489 24,166 26,666 Minority interest Subsidiary preferred stock dividends 4,563 4,563 4,564 4,563 4,563 Income before extraordinary loss 46,302 20,430 19,925 19,603 22,103 Extraordinary loss --- --- --- 2,323 --- NET INCOME $ 46,302 $ 20,430 $ 19,925 $ 17,280 $ 22,103 Basic earnings per common share (A) Income before extraordinary loss $ 1.47 $ 0.65 $ 0.63 $ 0.62 $ 0.70 Net income 1.47 0.65 0.63 0.55 0.70 Diluted earnings per common share (A) Income before extraordinary loss $ 1.43 $ 0.63 $ 0.62 $ 0.61 $ 0.69 Net income 1.43 0.63 0.62 0.54 0.69 (A) Prior periods restated for Statement of Financial Accounting Standard ("SFAS") No. 128, Earnings Per Share. The sum of EPS amounts for four quarters may not equal annual EPS amounts due to changes in weighted average shares outstanding during the periods and to rounding. BANK UNITED CORP. SUPPLEMENTAL FINANCIAL INFORMATION (dollars in thousands, except per share data) (unaudited) For the Six Months Ended For the Quarter Ended March 31, March 31, 1998 1997 1998 1997 Summary Income Statement Interest income $ 442,581 $ 397,031 $ 223,216 $ 197,928 Interest expense 303,179 264,742 151,835 131,424 Net interest income 139,402 132,289 71,381 66,504 Provision for credit losses 14,963 11,219 11,524 4,305 Loan servicing, net of related amortization 13,459 15,826 4,121 7,651 Gains (losses) from sales of single family servicing rights and single family warehouse loans 2,541 16,931 2,715 6,442 Other 15,457 16,231 8,022 9,738 Non-interest income 31,457 48,988 14,858 23,831 Non-interest expenses 88,247 91,153 47,057 42,584 Income before income taxes and minority interest 67,649 78,905 27,658 43,446 Income tax expense (8,209) 30,413 (23,207) 16,780 Income before minority interest 75,858 48,492 50,865 26,666 Minority interest Subsidiary preferred stock dividends 9,126 9,126 4,563 4,563 Net income $ 66,732 $ 39,366 $ 46,302 $ 22,103 Net income applicable to common shares $ 66,732 $ 39,366 $ 46,302 $ 22,103 Average common shares outstanding Basic 31,595,596 31,595,596 31,595,596 31,595,596 Diluted 32,316,312 31,910,671 32,316,688 31,960,099 Earnings per common share (A) Basic $ 2.11 $ 1.25 $ 1.47 $ 0.70 Diluted 2.06 1.23 1.43 0.69 Other Selected Data Total assets -- Period end $13,109,497 $11,002,625 $13,109,497 $11,002,625 -- Average $12,377,418 $10,858,424 $12,708,333 $10,944,802 Average interest- earning assets $11,572,610 $10,290,783 $11,804,306 $10,352,385 Total deposits $ 6,506,367 $ 5,065,804 $ 6,506,367 $ 5,065,804 Stockholders' equity -- Period end $ 653,021 $ 568,897 $ 653,021 $ 568,897 -- Average $ 617,631 $ 550,108 $ 627,384 $ 559,571 ROA (return, before minority interest, on average assets) 1.23% 0.90% 1.62% 0.99% ROCE (return on average common equity) 21.68% 14.36% 29.97% 16.06% Average equity to average assets 4.99% 5.07% 4.94% 5.11% Dividends paid per common share $ 0.32 $ 0.28 $ 0.16 $ 0.14 Note (A) Prior periods restated for SFAS 128 EPS pronouncement BANK UNITED CORP. FINANCIAL HIGHLIGHTS TREND (dollars in thousands, except per share data) (unaudited) For the Six Months Ended 03/31/98 03/31/97 For the period ended Net interest income $ 139,402 $ 132,289 Provision for credit losses 14,963 11,219 Non-interest income 31,457 48,988 Non-interest expense 88,247 91,153 Net income 66,732 39,366 Net income applicable to common shares 66,732 39,366 Loan fundings Single family 1,975,083 1,153,489 Commercial 1,219,248 645,493 Consumer 180,035 63,362 Total fundings 3,374,366 1,862,344 Common share data Earnings per share(A) Basic 2.11 1.25 Diluted 2.06 1.23 Dividends paid per common share 0.32 0.28 Book value (period end) 20.67 18.01 Tangible book value (period end) 18.68 17.61 At period end Assets 13,109,497 11,002,625 Securities 61,753 29,200 Mortgage-backed securities 1,319,704 1,525,086 Loans, net 9,967,065 8,032,142 Allowance for credit losses 44,415 43,748 Deposits 6,506,367 5,065,804 Borrowed funds 5,116,933 4,829,455 Minority interest 185,500 185,500 Stockholders' equity 653,021 568,897 Servicing portfolio(B) 23,887,887 17,765,192 Average balances Assets 12,377,418 10,858,424 Stockholders' equity 617,631 550,108 Interest-earning assets 11,572,610 10,290,783 Interest-bearing liabilities 11,102,527 9,793,720 Average common shares outstanding Basic 31,595,596 31,595,596 Diluted 32,316,312 31,910,671 Ratios ROA (return, before minority interest, on average assets) 1.23 % 0.90% ROCE (return on average common equity) 21.68 14.36 Net interest spread 2.20 2.32 Net yield on interest-earning assets 2.42 2.58 Efficiency ratio 51.04 51.09 Equity to assets (period end) 4.98 5.17 Tangible capital ratio (Bank only) 7.02 6.87 Core capital ratio (Bank only) 7.06 6.93 Risk-based capital ratio (Bank only) 11.59 12.68 Asset quality (period end) Nonperforming loans ("NPLs") $ 62,167 $ 88,496 Nonperforming assets ("NPAs") 82,671 118,993 NPLs as a % of total loans 0.62 % 1.10% NPAs as a % of total assets 0.63 1.08 BANK UNITED CORP. FINANCIAL HIGHLIGHTS TREND CONTINUED (dollars in thousands, except per share data) (unaudited) For the Quarter Ended 03/31/98 12/31/97 09/30/97 06/30/97 03/31/97 Net interest income $ 71,381 $ 68,021 $ 65,735 $ 66,620 $ 66,504 Provision for credit losses 11,524 3,439 3,463 3,425 4,305 Non-interest income 14,858 16,599 17,130 17,314 23,831 Non-interest expense 47,057 41,190 39,726 41,257 42,584 Net income 46,302 20,430 19,925 17,280 22,103 Net income applicable to common shares 46,302 20,430 19,925 17,280 22,103 Loan fundings Single family 1,128,142 846,941 584,968 449,816 503,737 Commercial 690,628 528,620 447,183 400,255 315,852 Consumer 143,470 36,565 43,609 45,694 39,594 Total fundings 1,962,240 1,412,126 1,075,760 895,765 859,183 Common share data Earnings per share(A) Basic 1.47 0.65 0.63 0.55 0.70 Diluted 1.43 0.63 0.62 0.54 0.69 Dividends paid per common share 0.16 0.16 0.14 0.14 0.14 Book value (period end) 20.67 19.39 18.94 18.44 18.01 Tangible book value (period end) 18.68 18.89 18.51 17.99 17.61 At period end Assets 13,109,497 12,523,459 11,967,072 11,439,050 11,002,625 Securities 61,753 138,076 77,809 57,353 29,200 Mortgage-backed securities 1,319,704 1,410,261 1,569,705 1,601,857 1,525,086 Loans, net 9,967,065 9,670,575 8,995,229 8,271,904 8,032,142 Allowance for credit losses 44,415 35,209 39,174 38,558 43,748 Deposits 6,506,367 5,289,625 5,247,668 5,249,888 5,065,804 Borrowed funds 5,116,933 5,934,595 5,521,143 5,031,636 4,829,455 Minority interest 185,500 185,500 185,500 185,500 185,500 Stockholders' equity 653,021 612,516 598,479 582,676 568,897 Servicing portfolio(B) 23,887,887 24,436,014 24,518,426 24,370,954 17,765,192 Average balances Assets 12,708,333 12,053,698 11,569,265 11,123,510 10,944,802 Stockholders' equity 627,384 606,599 591,497 576,803 559,571 Interest-earning assets 11,804,306 11,345,957 10,884,206 10,458,119 10,352,385 Interest-bearing liabilities 11,388,405 10,822,858 10,404,809 9,972,721 9,893,039 Average common shares outstanding Basic 31,595,596 31,595,596 31,595,596 31,595,596 31,595,596 Diluted 32,316,688 32,325,170 32,167,657 32,081,229 31,960,009 Ratios ROA (return, before minority interest, on average assets) 1.62 % 0.82 % 0.84 % 0.79 % 0.99 % ROCE (return on average common equity) 29.97 13.34 13.34 12.02 16.06 Net interest spread 2.20 2.22 2.25 2.31 2.31 Net yield on interest-earning assets 2.39 2.47 2.49 2.56 2.55 Efficiency ratio 53.77 48.27 47.97 48.79 48.84 Equity to assets (period end) 4.98 4.89 5.00 5.09 5.17 Tangible capital ratio (Bank only) 7.02 7.37 7.72 7.59 6.87 Core capital ratio (Bank only) 7.06 7.41 7.77 7.65 6.93 Risk-based capital ratio (Bank only) 11.59 11.98 13.18 14.05 12.68 Asset quality (period end) Nonperforming loans ("NPLs") $ 62,167 $ 66,075 $ 53,952 $ 53,861 $ 88,496 Nonperforming assets ("NPAs") 82,671 83,131 74,990 76,158 118,993 NPLs as a % of total loans 0.62 % 0.68 % 0.60 % 0.65 % 1.10 % NPAs as a % of total assets 0.63 0.66 0.63 0.67 1.08 (A) Prior periods restated for SFAS 128 EPS pronouncement. The sum of EPS amounts for four quarters may not equal annual EPS amounts due to changes in weighted average shares outstanding during the periods and to rounding. (B) Includes purchased servicing rights of $151,418 at March 31, 1998, $921,944 at December 31, 1997, $7,456,167 at September 30, 1997, $7,135,649 at June 30, 1997, and $3,497,699 at March 31, 1997 which had not been transferred as of period end.SOURCE Bank United Corp.
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Vern Stockton, Media Relations, 713-543-6920,
or Anthony J. Nocella, Investor Relations, 713-543-6575, both of
Bank United Corp.
