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| Bank United Corp. Reports 49 Percent Earnings Increase for Fiscal Year 1998 |
HOUSTON, Oct. 21 /PRNewswire/ -- Bank United Corp. (the "Company") (Nasdaq: BNKU), parent of Bank United (the "Bank") (NYSE: BKU PrA and BKU PrB), today reported net income of $114.4 million or $3.54 per diluted share for the year ended September 30, 1998 compared to $76.6 million or $2.40 per diluted share for the year ended September 30, 1997, an increase of 49 percent. The Company also reported net income of $23.7 million or $0.74 per diluted share for the quarter ended September 30, 1998 compared to $19.9 million or $0.62 per diluted share for the year ago quarter. Stockholders' equity increased to $684.4 million at September 30, 1998, up from $598.5 million at September 30, 1997. The current year'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. The Company recognized net income of $89.9 million or $2.78 per diluted share for the year ended September 30, 1998, excluding these adjustments. "Bank United Corp.'s. continued growth in earnings and stockholders' equity demonstrates the success of our business strategy, which includes managing our asset mix to constitute more commercial and consumer loans, increasing low-cost wholesale single family mortgage originations, expanding our state-wide community banking franchise, and increasing income from our fee generating businesses including mortgage servicing," said Bank United Corp. President and CEO Barry C. Burkholder. "I am optimistic about future growth of both earnings and stockholders' equity given the Company's strong loan origination capability and attention to credit quality. The Company's wholesale single family mortgage origination network enables the Company to take advantage of the current high level of refinancing activity and build its servicing portfolio." During fiscal year 1998, commercial loan originations , including small business loans, totaled $2.9 billion bringing outstanding balances to $3.5 billion, up 58% over last year. During the year the Company also expanded its SBA lending program and is now one of the largest SBA lenders in Texas. Consumer and small business loan originations amounted to $457 million for the year, including $201 million in home equity production. These portfolios now stand at $578 million, up 65% over last year. Single family mortgage originations increased by 73% to $3.8 billion through the Company's low-cost wholesale distribution channel. In September, the Company completed its initial sale of $83 million in single family mortgage loans to the Federal Home Loan Bank in Chicago through its Mortgage Partnership Finance program. This recently expanded program provides an additional competitive buyer of mortgage loans for the Company. The Company also acquired $868 million of adjustable rate single family residential loans in September, increasing single family residential loans held for portfolio over the preceding quarter to $4.7 billion. The Community Bank posted record profits while increasing its deposit base. Transaction balances, including checking and money market accounts, increased 32% and $443 million. Certificates of deposit increased $544 million, primarily from the acquisition of the branches and deposits of Guardian Savings. Income from banking products and investment sales totaled $25.4 million, up 30%. The Company also announced an agreement to expand into West Texas through the acquisition of Midland American Bank, which operates 5 branches in Midland, Texas. Closing is expected in early 1999. The Company's servicing portfolio grew to $28 billion and 292 thousand loans. This business generated nearly $36 million in net fee income for the year. The value of this growing portfolio has been successfully protected through hedging by the Company's experienced capital markets group. The Company's efficiency ratio for the quarter dropped to 49.29 compared to 50.22 percent in the preceding quarter. Burkholder added, "Significantly, the Company's return on common equity for the year was 17.8%, up from 13.5% for the year ended September 30, 1997. On an adjusted basis, return on common equity was 14.3%. Asset quality remains high with non-performing assets representing 0.59% of total assets." On August 28, 1998, the Company announced plans to repurchase up to $50 million in shares of its Class A common stock because the Board and management believe that the repurchase of shares by the Company represents an attractive use of cash. The Board's decision to authorize the repurchase confirms its confidence in the Company's future potential. The Company's assets were $13.7 billion at September 30, 1998, compared to $12 billion at September 30, 1997. The Company also reported net income of $146 million for the year for its subsidiary Bank United compared to $107 million for the previous year. Bank United's earnings for the quarter ended September 30, 1998 were $31.6 million compared to $27.7 million for the year ago quarter. Bank United Corp. is the largest publicly-traded depository institution headquartered in Texas and, through Bank United, operates an 86-branch community banking network in Texas, including 44 in the greater Houston area, 38 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. The Bank's website can be found at http://www.bankunited.com. Bank United 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, to future growth of earnings and stockholders' equity, to asset origination capabilities, to asset quality, to the value and hedging of the servicing portfolio, and to the repurchase of shares by the Company, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in these 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 "Forward-Looking Statements" in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 on file with the SEC. Supplemental Financial Information Attached. BANK UNITED CORP. SUPPLEMENTAL BALANCE SHEET (in thousands) September 30, September 30, 1998 1997 Assets Cash and cash equivalents $228,674 $121,000 Securities purchased under agreements to resell and federal funds sold 474,483 349,209 Securities 110,767 77,809 Mortgage-backed securities, net 912,641 1,569,705 Loans, net: Single family 4,686,600 5,795,179 Single family-held for sale 2,048,483 697,410 Commercial 3,472,579 2,201,880 Consumer 495,556 300,760 Mortgage servicing rights 410,868 272,214 Federal Home Loan Bank stock 242,883 205,011 Premises and equipment 59,889 46,921 Intangible assets 59,591 13,605 Real estate owned 18,790 19,833 Deferred tax asset 113,581 120,936 Other assets 329,607 175,600 Total assets $13,664,992 $11,967,072 Liabilities, Minority Interest, and Stockholders' Equity Liabilities: Deposits $6,320,476 $5,247,668 Federal Home Loan Bank advances 4,733,294 3,992,344 Securities sold under agreements to repurchase and federal funds purchased 861,742 1,308,600 Notes payable 219,720 220,199 Advances from borrowers for taxes and insurance 270,135 173,294 Other liabilities 389,713 240,988 Total liabilities 12,795,080 11,183,093 Minority interest: Preferred stock issued by consolidated subsidiary 185,500 185,500 Stockholders' equity: Common stock 316 316 Paid-in capital 129,343 129,286 Retained earnings 556,708 462,551 Treasury stock, at cost (501) --- Unrealized gains (losses) on securities available for sale, net of tax (1,454) 6,326 Total stockholders' equity 684,412 598,479 Total liabilities, minority interest and stockholders' equity $13,664,992 $11,967,072 BANK UNITED CORP. INCOME STATEMENT TREND (dollars in thousands, except per share data) For the Year Ended 09/30/98 9/30/97 Interest Income Short-term interest-earning assets $37,962 $36,240 Securities 9,093 5,371 Mortgage-backed securities 82,170 104,891 Loans 756,890 652,886 Federal Home Loan Bank stock 12,631 11,320 Total interest income 898,746 810,708 Interest Expense Deposits 300,760 262,761 Federal Home Loan Bank advances 236,252 212,558 Securities sold under agreements to repurchase and federal funds purchased 56,082 57,335 Notes payable 19,571 13,410 Total interest expense 612,665 546,064 Net interest income 286,081 264,644 Provision for credit losses 20,123 18,107 Net interest income after provision for credit losses 265,958 246,537 Non-Interest Income Net gains (losses) Sales of single family warehouse loans 11,124 21,182 Securities and mortgage-backed securities 2,761 2,841 Other loans 651 1,128 Sale of mortgage offices --- 4,748 Loan servicing, net of related amortization 35,975 32,381 Other 30,426 21,152 Total non-interest income 80,937 83,432 Non-Interest Expense Compensation and benefits 86,725 75,016 Occupancy 15,497 14,943 Data processing 16,591 13,712 Advertising and marketing 8,299 7,147 Amortization of intangibles 5,864 4,118 SAIF deposit insurance premiums 4,160 4,797 Furniture and equipment 3,686 4,074 Other 47,720 48,329 Total non-interest expense 188,542 172,136 Income before income taxes, minority interest, and extraordinary loss 158,353 157,833 Income tax expense 25,722 60,686 Income before minority interest and extraordinary loss 132,631 97,147 Minority interest - Subsidiary preferred stock dividends 18,253 18,253 Income before extraordinary loss 114,378 78,894 Extraordinary loss - early extinguishment of debt --- 2,323 NET INCOME $114,378 $76,571 Basic earnings per common share (A) Income before extraordinary loss $3.62 $2.49 Net income 3.62 2.42 Diluted earnings per common share (A) Income before extraordinary loss $3.54 $2.47 Net income 3.54 2.40 Note (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. INCOME STATEMENT TREND CONTINUED (dollars in thousands, except per share data) For the Quarter Ended (unaudited) 9/30/98 06/30/98 03/31/98 12/31/97 09/30/97 Interest Income Short-term interest-earning assets $15,949 $10,164 $6,293 $5,556 $9,508 Securities 3,121 1,693 2,140 2,139 1,619 Mortgage-backed securities 15,228 19,962 22,595 24,385 25,945 Loans 190,316 193,439 189,007 184,128 170,809 Federal Home Loan Bank stock 3,191 3,102 3,181 3,157 2,893 Total interest income 227,805 228,360 223,216 219,365 210,774 Interest Expense Deposits 79,307 79,448 74,367 67,638 67,654 Federal Home Loan Bank advances 59,253 58,242 58,553 60,204 54,857 Securities sold under agreements to repurchase and federal funds purchased 12,866 10,591 14,019 18,606 17,632 Notes payable 4,887 4,892 4,896 4,896 4,896 Total interest expense 156,313 153,173 151,835 151,344 145,039 Net interest income 71,492 75,187 71,381 68,021 65,735 Provision for credit losses 3,346 1,814 11,524 3,439 3,463 Net interest income after provision for credit losses 68,146 73,373 59,857 64,582 62,272 Non-Interest Income Net gains (losses) Sales of single family warehouse loans 5,660 2,923 2,715 (174) 707 Securities and mortgage- backed securities 736 224 886 915 564 Other loans (22) 297 376 --- 136 Sale of mortgage offices --- --- --- --- 750 Loan servicing, net of related amortization 11,886 10,630 4,121 9,338 8,746 Other 8,567 8,579 6,760 6,520 6,227 Total non-interest income 26,827 22,653 14,858 16,599 17,130 Non-Interest Expense Compensation and benefits 24,417 22,683 20,915 18,710 17,815 Occupancy 3,372 4,376 4,071 3,678 3,571 Data processing 4,639 4,202 3,927 3,823 3,495 Advertising and marketing 2,069 1,685 1,671 2,874 1,168 Amortization of intangibles 1,750 1,761 1,468 885 768 SAIF deposit insurance premiums 1,060 1,173 1,076 851 812 Furniture and equipment 908 1,038 848 892 873 Other 11,544 13,618 13,081 9,477 11,224 Total non-interest expense 49,759 50,536 47,057 41,190 39,726 Income before income taxes, minority interest, and extraordinary loss 45,214 45,490 27,658 39,991 39,676 Income tax expense 16,917 17,014 (23,207) 14,998 15,187 Income before minority interest and extraordinary loss 28,297 28,476 50,865 24,993 24,489 Minority interest - Subsidiary preferred stock dividends 4,564 4,563 4,563 4,563 4,564 Income before extraordinary loss 23,733 23,913 46,302 20,430 19,925 Extraordinary loss - early extinguishment of debt --- --- --- --- --- NET INCOME $23,733 $23,913 $46,302 $20,430 $19,925 Basic earnings per common share (A) Income before extraordinary loss $0.75 $0.76 $1.47 $0.65 $0.63 Net income 0.75 0.76 1.47 0.65 0.63 Diluted earnings per common share (A) Income before extraordinary loss $0.74 $0.74 $1.43 $0.63 $0.62 Net income 0.74 0.74 1.43 0.63 0.62 Note (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. FINANCIAL HIGHLIGHTS TREND (dollars in thousands, except per share data) For the Year Ended 09/30/98 9/30/97 For the period ended Net interest income $ 286,081 $ 264,644 Provision for credit losses 20,123 18,107 Non-interest income 80,937 83,432 Non-interest expense 188,542 172,136 Net income 114,378 76,571 Net income applicable to common shares 114,378 76,571 Loan fundings Single family 3,789,389 2,188,273 Commercial 2,876,328 1,492,931 Consumer 367,097 152,665 Total fundings 7,032,814 3,833,869 Common share data Earnings per share (A) Basic 3.62 2.42 Diluted 3.54 2.40 Dividends paid per common share 0.64 0.56 Book value (period end) 21.67 18.94 Tangible book value (period end) 19.78 18.51 At period end Assets 13,664,992 11,967,072 Securities 110,767 77,809 Mortgage-backed securities 912,641 1,569,705 Loans, net 10,703,218 8,995,229 Allowance for credit losses 47,027 39,174 Deposits 6,320,476 5,247,668 Borrowed funds 5,814,756 5,521,143 Minority interest 185,500 185,500 Stockholders' equity 684,412 598,479 Servicing portfolio 27,935,300 24,518,396 Average balances Assets 12,760,397 11,103,145 Stockholders' equity 643,174 567,107 Interest-earning assets 11,803,639 10,481,549 Interest-bearing liabilities 11,337,807 9,991,994 Average common shares outstanding Basic 31,595,491 31,595,596 Diluted 32,337,249 31,881,123 Ratios ROA (return, before minority interest, on average assets) 1.04% 0.85 ROCE (return on average common equity) 17.78 13.50 Net interest spread 2.21 2.26 Net yield on interest-earning assets 2.42 2.52 Efficiency ratio 50.35 49.78 Equity to assets (period end) 5.01 5.00 Tangible capital ratio (Bank only) 6.75 7.72 Core capital ratio (Bank only) 6.77 7.77 Risk-based capital ratio (Bank only) 10.48 13.18 Asset quality (period end) Nonperforming loans ("NPLs") $ 61,948 $ 53,952 Nonperforming assets ("NPAs") 81,305 74,990 NPLs as a % of total loans 0.58% 0.60 NPAs as a % of total assets 0.59 0.63 (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. BANK UNITED CORP. FINANCIAL HIGHLIGHTS TREND CONTINUED (dollars in thousands, except per share data) For the Quarter Ended (unaudited) 09/30/98 06/30/98 03/31/98 12/31/97 09/30/97 For the period ended Net interest income $71,492 $75,187 $71,381 $68,021 $65,735 Provision for credit losses 3,346 1,814 11,524 3,439 3,463 Non-interest income 26,827 22,653 14,858 16,599 17,130 Non-interest expense 49,759 50,536 47,057 41,190 39,726 Net income 23,733 23,913 46,302 20,430 19,925 Net income applicable to common shares 23,733 23,913 46,302 20,430 19,925 Loan fundings Single family 997,808 832,562 1,112,078 846,941 584,968 Commercial 934,186 723,001 690,521 528,620 447,183 Consumer 58,505 128,562 143,465 36,565 43,609 Total fundings 1,990,499 1,684,125 1,946,064 1,412,126 1,075,760 Common share data Earnings per share (A) Basic 0.75 0.76 1.47 0.65 0.63 Diluted 0.74 0.74 1.43 0.63 0.62 Dividends paid per common share 0.16 0.16 0.16 0.16 0.14 Book value (period end) 21.67 21.19 20.67 19.39 18.94 Tangible book value (period end) 19.78 19.25 18.68 18.89 18.51 At period end Assets 13,664,992 13,095,947 13,109,497 12,523,459 11,967,072 Securities 110,767 137,414 61,753 138,076 77,809 Mortgage-backed securities 912,641 1,050,101 1,319,704 1,410,261 1,569,705 Loans, net 10,703,218 9,711,789 9,967,065 9,670,575 8,995,229 Allowance for credit losses 47,027 44,935 44,415 35,209 39,174 Deposits 6,320,476 6,419,242 6,506,367 5,289,625 5,247,668 Borrowed funds 5,814,756 5,189,733 5,116,933 5,934,595 5,521,143 Minority interest 185,500 185,500 185,500 185,500 185,500 Stockholders' equity 684,412 669,411 653,021 612,516 598,479 Servicing portfolio 27,935,300 29,349,450 23,887,887 24,436,014 24,518,396 Average balances Assets 13,243,434 13,038,008 12,708,333 12,053,698 11,569,265 Stockholders' equity 677,602 662,469 627,384 606,599 591,497 Interest-earning assets 12,080,553 12,082,896 11,804,306 11,345,957 10,884,206 Interest-bearing liabilities 11,639,485 11,503,379 11,388,405 10,822,858 10,404,809 Average common shares outstanding Basic 31,595,179 31,595,596 31,595,596 31,595,596 31,595,596 Diluted 32,252,057 32,442,309 32,316,688 32,325,170 32,167,657 Ratios ROA (return, before minority interest, on average assets) 0.85% 0.88% 1.62% 0.82% 0.84% ROCE (return on average common equity) 13.87 14.49 29.97 13.34 13.34 Net interest spread 2.21 2.24 2.20 2.22 2.25 Net yield on interest-earning assets 2.40 2.49 2.39 2.47 2.49 Efficiency ratio 49.29 50.22 53.77 48.27 47.97 Equity to assets (period end) 5.01 5.11 4.98 4.89 5.00 Tangible capital ratio (Bank only) 6.75 7.03 7.02 7.37 7.72 Core capital ratio (Bank only) 6.77 7.06 7.06 7.41 7.77 Risk-based capital ratio (Bank only) 10.48 10.93 11.59 11.98 13.18 Asset quality (period end) Nonperforming loans ("NPLs") $61,948 $66,520 $62,167 $66,075 $53,952 Nonperforming assets ("NPAs") 81,305 85,548 82,671 83,131 74,990 NPLs as a % of total loans 0.58% 0.68% 0.62% 0.68% 0.60% NPAs as a % of total assets 0.59 0.65 0.63 0.66 0.63 (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. BANK UNITED CORP. FINANCIAL HIGHLIGHTS TREND (dollars in thousands, except per share data) For the Year Ended For the Quarter Ended (unaudited) 9/30/98 9/30/97 9/30/98 6/30/98 3/31/98 12/31/97 9/30/97 Selected financial information, excluding adjusting items (A) Net income $89,944 $75,970 $23,733 $23,913 21,868 $20,430 $19,463 Net income applicable to common shares 89,944 75,970 23,733 23,913 21,868 20,430 19,463 Earnings per share (B) Basic 2.85 2.40 0.75 0.76 0.69 0.65 0.62 Diluted 2.78 2.38 0.74 0.74 0.68 0.63 0.61 ROA 0.85% 0.85% 0.85% 0.88% 0.84% 0.82% 0.82% ROCE 14.28 13.41 14.39 15.04 14.32 13.34 13.04 Efficiency ratio 49.43 49.78 49.29 50.22 49.81 48.27 47.97 (A) In March 1998, adjusting items included two positive income tax adjustments totaling $33.5 million , or $1.04 per diluted share, an increase in the commercial loan allowance of $7.8 million ($4.9 million net of tax) or ($0.15) per diluted share and provisions for the affects of higher prepayments on the single family loan and servicing portfolios totaling $6.7 million ($4.2 million net of tax) or ($0.13) per diluted share. In fiscal 1997, adjusting items included a gain on sale of mortgage offices of $4,748 ($2,924 net of tax) or $.09 per diluted share, recorded in March and September 1997, and an extraordinary loss on extinguishment of debt of $3,574 ($2,323 net of tax) or $.07 per diluted share in May 1997. (B) 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. BANK UNITED CORP. SUPPLEMENTAL FINANCIAL INFORMATION (dollars in thousands, except per share data) For the Year Ended For the Quarter Ended 09/30/98 09/30/97 09/30/98 09/30/97 (unaudited) Summary Income Statement Interest income $898,746 $810,708 $227,805 $210,774 Interest expense 612,665 546,064 156,313 145,039 Net interest income 286,081 264,644 71,492 65,735 Provision for credit losses 20,123 18,107 3,346 3,463 Loan servicing, net of related amortization 35,975 32,381 11,886 8,746 Gains (losses) from sales of single family warehouse loans 11,124 21,182 5,660 707 Other 33,838 29,869 9,281 7,677 Non-interest income 80,937 83,432 26,827 17,130 Non-interest expenses 188,542 172,136 49,759 39,726 Income before income taxes and minority interest, and extraordinary loss 158,353 157,833 45,214 39,676 Income tax expense 25,722 60,686 16,917 15,187 Income before minority interest and extraordinary loss 132,631 97,147 28,297 24,489 Minority interest- Subsidiary preferred stock dividends 18,253 18,253 4,564 4,564 Income before extraordinary loss 114,378 78,894 23,733 19,925 Extraordinary loss- early extinguishment of debt --- 2,323 --- --- Net income $114,378 $76,571 $23,733 $19,925 Net income applicable to common shares $114,378 $76,571 $23,733 $19,925 Average common shares outstanding Basic 31,595,491 31,595,596 31,595,179 31,595,596 Diluted 32,337,249 31,881,123 32,252,057 32,167,657 Earnings per common share Basic $3.62 $2.42 $0.75 $0.63 Diluted 3.54 2.40 0.74 0.62 Other Selected Data Total assets -- Period end $13,664,992 $11,967,072 $13,664,992 $11,967,072 -- Average 12,760,397 11,103,145 13,243,434 11,569,265 Average interest- earning assets 11,803,639 10,481,549 12,080,553 10,884,206 Total deposits 6,320,476 5,247,668 6,320,476 5,247,668 Stockholders' equity -- Period end 684,412 598,479 684,412 598,479 -- Average 643,174 567,107 677,602 591,497 ROA (return, before minority interest, on average assets) 1.04% 0.85% 0.85% 0.84% ROCE (return on average common equity) 17.78 13.50 13.87 13.34 Average equity to average assets 5.04 5.11 5.12 5.11 Dividends paid per common share $0.64 $0.56 $0.16 $0.14SOURCE Bank United Corp.
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Media Relations: Vern Stockton,
713-543-6920, or Investor Relations: Anthony J. Nocella,
713-543-6575, both of Bank United Corp.
