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| Bank United Corp. Announces 2000 Fourth Quarter and Fiscal Year End Earnings |
HOUSTON, Oct. 24 /PRNewswire/ -- Bank United Corp. (Nasdaq: BNKU and NYSE: BKP) (the "Company"), parent of Bank United (NYSE: BKU PrA and BKU PrB) (the "Bank"), today announced earnings for its fourth quarter and fiscal year ended September 30, 2000. Net income for the quarter increased to $36.6 million or $1.03 per diluted share compared to the year ago quarter's results of $31.4 million or $.90 per diluted share. Net income increased 16% and diluted earnings per share increased $.13 per share or 14% over the year ago quarter. The Company closed the quarter, as well as the year, with assets totaling $18.2 billion up $1.9 billion or 12% from September 30, 1999. For the year, net income totaled $134.9 million or $3.80 per diluted share compared to $109.7 million or $3.28 per diluted share in the prior year, an increase of 16% per share. Excluding certain adjusting items recorded in the prior year, net income for the fourth quarter 1999 was $28.9 million or $.83 per diluted share and fiscal 1999 year- to-date net income on the same basis was $110.8 million or $3.31 per diluted share. On August 18, 2000, Bank United Corp. and Washington Mutual, Inc. entered into a definitive agreement to merge the two companies. The transaction is subject to regulatory and Bank United Corp. shareholder approval. It is anticipated that the transaction will close early in the first calendar quarter 2001. Additional comments and supplemental financial data are attached. Bank United Corp. is the largest publicly-traded depository institution headquartered in Texas. Through Bank United, the Company operates a 157-branch community banking network in Texas, including 67 branches in the greater Houston area, 78 in Dallas/Ft. Worth, five in Midland, four in Austin, and three in San Antonio; operates 16 SBA lending offices in 13 states; is a national middle market commercial bank with 23 regional offices in 16 states; originates mortgage loans through 11 wholesale offices in 11 states; operates a national mortgage servicing business serving approximately 310,000 customers, and manages an investment portfolio. The Company's website can be found at http://www.bankunited.com. Bank United is FDIC insured and an equal housing lender. NET INTEREST INCOME Net interest income increased 8% to $106.8 million, compared to the year ago quarter. This increase came from growth in average interest-earning assets, primarily commercial loans, which reached $17.1 billion during the current quarter, up 16% over the year ago quarter. The net yield on interest- earning assets was 2.53% for the current quarter. The Company's overall net interest income and gross yields rose as rates reset on the substantial portfolio of LIBOR and prime based commercial loans. Due to tightening market spreads triggered by rate hikes by the Federal Reserve over the past year, the net yield declined from 2.64% in the year ago quarter (2.73% on a reported basis, which included a one-time cash payment on a discounted purchased commercial loan). The current quarter's net yield was up slightly when compared to 2.52% for the June 2000 quarter (2.63% on a reported basis, which included a special FHLB dividend), as market rates have recently leveled off. NON-INTEREST INCOME Non-interest income totaled $38.7 million for the quarter, up $7.7 million or 25% from the year ago quarter. Non-interest income is primarily comprised of loan servicing fees, community banking transaction fees, commercial banking fees, and gains from sales of mortgage loans, mortgage servicing rights, and SBA loans. Loan Servicing Fees The largest component of non-interest income was loan servicing fees, which totaled $16.8 million for the quarter, for an increase of $2.3 million or 16% over the year ago quarter. This increase principally reflected a larger average servicing portfolio. Increasing mortgage interest rates over the last year caused prepayments in the portfolio to decline, thereby increasing the average life and the overall value of the servicing portfolio. Deposit fees and charges Deposit fees and charges reached a record $9.9 million during the quarter, a 32% or $2.4 million increase compared to the year ago quarter. A 24% increase in the number of households served and a 27% increase in fee income per free checking account produced this increase. Net Gains Sales of mortgage loans, mortgage servicing rights and SBA banking loans contributed $6.3 million in gains for the quarter, up $2.7 million, or 72% over the year ago quarter. Higher gains on sales of single family loans during the current quarter reflected an increase in volume sold ($804 million sold during the current quarter compared to $230 million sold during the prior year quarter). The Company sold $261 million of servicing rights during the quarter for a gain of $1.4 million. SBA banking gains increased 57% to $2.7 million during the quarter. NON-INTEREST EXPENSE Non-interest expense for the quarter totaled $76.8 million compared to $75.4 million for the year ago quarter, reflecting growth and expansion, particularly in the community and commercial banks. The Company's efficiency ratio was 51.63% during the quarter compared to 56.55% for the year ago quarter. LOAN ACTIVITY The Company's loan portfolio totaled approximately $15 billion at September 30, 2000, up $1.9 billion or 14% over the prior year. Loan fundings totaled $2.7 billion for the current quarter compared to $1.9 billion for the year ago quarter. Growth in the commercial loan portfolio was the most significant change in these periods. Commercial The commercial loan portfolio, which is principally comprised of single family construction, multi-family and commercial real estate, healthcare, and mortgage banker finance line of credit loans, totaled $7.0 billion at September 30, 2000, up $1.6 billion or 29% from the year ago period. Commercial loan fundings were $1.6 billion for the current quarter compared to $1.3 billion for the year ago quarter. Small Business and SBA Small business and SBA loans, which are included in the commercial loan portfolio, totaled $547.2 million ($241.5 million of small business and $305.7 million of SBA) at September 30, 2000, up 87% from September 30, 1999. Small business and SBA fundings for the quarter were $168.8 million, up 129% from the year ago quarter. Single Family The single family loan portfolio totaled $7.1 billion at September 30, 2000, up slightly from $7.0 billion at September 30, 1999. Single family loan fundings for the current quarter totaled $931.3 million compared to $574.1 million for the year ago quarter. Refinancings represented 27% of single family fundings for the current quarter while fixed-rate loans comprised 73% of fundings. In the year ago quarter, refinancings represented 51% of single family fundings and fixed-rate loans comprised 48% of fundings. Consumer Consumer loans totaled $900.5 million at September 30, 2000, up $237.1 million or 36% from the prior year. Consumer loan fundings were $133.8 million for the quarter compared to $83.2 million for the year ago quarter. Home improvement loans accounted for the majority of this growth, both in terms of the portfolio balance and originations. Loan Composition September 30, 2000 represents a milestone for the Company and its overall strategy of transitioning to a commercial bank. At September 30, 2000, the composition of the loan portfolio was single family 47%, commercial 47%, and consumer 6%, compared to the year ago period of single family 54%, commercial 41%, and consumer 5%. ASSET QUALITY The Company's nonperforming assets were $120.0 million at September 30, 2000, $127.5 million at June 30, 2000, and $108.3 million at September 30, 1999. The nonperforming asset ratio was .66% at September 30, 2000, .70% at June 30, 2000, and .67% at September 30, 1999. The Company's provision for credit losses was $4.7 million in the current quarter compared to $19.9 million in the June 2000 quarter and $20.3 million in the September 1999 quarter. The Company closed the quarter with an allowance for credit losses of $111.4 million, or .74% of total loans compared to $112.0 million or .74% at June 30, 2000 and $82.7 million or .63% at September 30, 1999. At September 30, 2000, the allowance for credit losses to total loans, by type, was: .25% for the single family portfolio, 1.35% for the commercial portfolio, and .29% for the consumer portfolio. Net charge-offs totaled $12.0 million or .08% of average loans for the year compared to $5.8 million or .05% for the prior year. DEPOSITS Deposits increased $1.2 billion from the year ago period to $8.7 billion at September 30, 2000 primarily due to increases in both commercial banking and community banking deposits. Commercial banking deposits increased 87% to $2.0 billion and community banking deposits increased 3% to $5.8 billion year over year. BANK UNITED The Company also announced net income of $43.9 million for the quarter for its subsidiary, Bank United, compared to $38.8 million for the year ago quarter. Net income for Bank United for the full year was $163.7 million, compared to $140.6 million for the prior year. Capital levels of the Bank at September 30, 2000 qualify it as "well-capitalized", the highest of five tiers under applicable regulatory guidelines. OTHER CORPORATE MATTERS Court of Claims Litigation On March 19, 1999, United States Court of Federal Claims Chief Judge Loren A. Smith ruled that the United States was liable for claims in the case filed by Bank United Corp. relating to the government's breach of contracts, which were made when the Company acquired a failed savings and loan association in late 1988. The Company's case proceeded to trial on the amount of damages on September 13, 1999, and the taking of evidence by the court concluded on October 21, 1999. The parties have now submitted post-trial briefs and presented final oral arguments. The suit seeks damages of approximately $560 million. FORWARD-LOOKING INFORMATION Statements contained herein concerning Bank United Corp.'s projections, plans, or objectives, and, more particularly, statements concerning the strength of its business, anticipated earnings increases, expected net yield trend, high asset quality, growth in both commercial and consumer loan production levels, net servicing fee revenue, SBA loan gains, or single family construction business or increases in revenues or shareholder value due to branch expansion are forward-looking statements under the Private Securities Reform Act of 1995. Actual results could differ materially from those projected due to changes in interest rates, competition in the industry, changes in economic conditions, and other factors. More information on risk factors affecting the Company is available under the heading Forward-Looking Information in the Company's Annual Report on Form 10-K for the year ended September 30, 1999 on file with the SEC. CONFERENCE CALL The Company will conduct a conference call to review announcements made in this press release on October 25, 2000 at 11 a.m. EDT (10 a.m. CDT). Interested parties should call 1-800-553-2197. In light of the Company's pending merger with Washington Mutual, Inc., management will not be conducting a question and answer session following its prepared remarks. A live web broadcast of the conference call will be available at http://www.BankUnited.com with an archived replay provided after 2:00 p.m. EDT. A recorded playback of the conference call will be available by calling 1-800-625-5288 after 2:00 p.m. EDT October 25, 2000 through November 8, 2000. The passcode for this playback is 829395. A replay of the conference call will also be available on the Company's website at http://www.BankUnited.com after 2:00 p.m. EDT October 25, 2000.SOURCE Bank United Corp.
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CONTACT:
Vern Stockton, Media Relations, 713-543-6920,
or Debbie Kemple, Investor Relations, 713-543-6926, both of Bank
United Corp.
