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| Bank United Corp. Announces 1999 Fourth Quarter And Fiscal Year End Earnings |
HOUSTON, Oct. 26 /PRNewswire/ -- Bank United Corp. (Nasdaq: BNKU; NYSE: BKP), (the "Company") parent of Bank United (the "Bank") (NYSE: BKU PrA and BKU PrB), today announced earnings for the 1999 fourth quarter and for the fiscal year ended September 30, 1999. Net income for the quarter increased to $31.4 million or $.90 per diluted share over the year ago quarter's results of $24.3 million or $.74 per diluted share, for an increase of $.16 per share or 22%, quarter over quarter. The increased earnings resulted from higher asset levels, driven by a $1.9 billion or 54% increase in commercial loans and an improvement in the net yield, which combined produced a 36% increase in net interest income over the year ago quarter. Adjusting items recorded during the quarter increased the Company's reported results by $.07 per diluted share. If these adjusting items were excluded from net income, the adjusted earnings for the quarter would have been $28.9 million or $.83 per diluted share, compared to the year ago results of $24.3 million or $.74 per diluted share. The adjusting items outlined in the attached exhibits include the following: a $13.5 million tax benefit (positive $.41 per diluted share) associated with the timing of the utilization of net operating losses; $1.7 million pre-tax ($.03 per diluted share) of expenses related to litigation against the federal government; an additional $13 million pre-tax ($.25 per diluted share) increase in the allowance for credit losses primarily due to the changing mix in the commercial loan portfolios; and $2.9 million pre-tax ($.06 per diluted share) of costs related to the Texas Central Bancshares, Inc. ("Texas Central") acquisition. Adjusted earnings for the full year were $110.8 million or $3.31 per diluted share, compared to $91.3 million or $2.77 per diluted share, for an increase of $.54 per share or 19%, year over year. For the year, reported net income was $109.7 million or $3.28 per diluted share, compared to $115.7 million or $3.51 per diluted share for the prior year. The decrease in reported earnings year over year is principally a result of two positive tax adjustments recorded during the prior year. Commenting on the year, Barry C. Burkholder, Bank United Corp. President and CEO, said, "1999 was a great year. We continued our transition to a commercial bank by improving our balance sheet and increasing our commercial loans to record levels. A $1.9 billion increase in commercial loans was the principal driver of a 20% increase in our net interest income over 1998. Additionally, to support our substantial asset growth, we added $250 million to bank capital and increased our loan loss reserves by 74%. "During the year, we made key investments to enhance the Company's position as a leading financial services provider in Texas. We successfully completed two commercial bank acquisitions and opened 59 7-day Banking Centers in Kroger stores. Through this expansion we added nearly $500 million in core deposits, which lowered our funding costs and increased our transaction fees by 30%. "To build upon our position as the number one SBA lender in Texas, we opened 21 new offices nationwide, which should propel us into the top ranks of SBA lenders across the country within the next 18 months. Last year's significant commercial and consumer franchise growth should allow us to continue our strong earnings momentum." Additional comments and supplemental financial data are attached. All financial information has been restated to reflect the August 27, 1999 merger of Texas Central, which was accounted for as a pooling of interests combination. Bank United Corp. is the largest publicly-traded depository institution headquartered in Texas and, through Bank United, operates a 150-branch community banking network in Texas, including 62 branches in the greater Houston area, 79 in Dallas/Fort Worth, 5 in Midland and two each in Austin and San Antonio; a commercial banking group with 20 regional offices in 16 states; 10 wholesale mortgage origination offices; 23 SBA lending offices in 16 states; 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 and an equal housing lender. NET INTEREST INCOME Net interest income for the quarter increased 36% to $99.3 million, compared to $72.8 million last year, and 11% compared to $89.5 million in the June quarter. Record levels of interest-earning assets, particularly in the commercial loan portfolios, and a lower cost of funds contributed to the increased net interest income. Interest-Earning Assets Average interest-earning assets increased 22% to $14.8 billion during the quarter versus the year ago quarter, primarily due to a 61% increase in average commercial loans. Net Yield The net yield on interest-earning assets for the quarter increased to 2.64% on a normalized basis (2.73% on a reported basis, which includes a one time cash payment on a purchased commercial loan), compared to 2.43% for the year ago quarter and 2.58% for the June 1999 quarter. A lower cost of funds coupled with the addition of higher yielding commercial loans during the quarter contributed to the increased net yield as compared to the year ago quarter. An increased number of transaction accounts sourced from new supermarket customers coupled with the lower costing commercial deposits present in the Midland acquisition contributed to a lowering of the cost of funds from the year ago quarter. NON-INTEREST INCOME Non-interest income totaled $31.0 million during the quarter, compared to $27.0 million in the year ago quarter, for an increase of $4.0 million or 15%. Non-interest income is comprised of loan servicing fees, community banking deposit related fees, gains from annuity and security sales to consumers, commercial banking fees, and gains from sales of mortgage and SBA loans. Loan Servicing Fees The largest component of non-interest income is loan servicing fees, which totaled $14.5 million for the quarter representing an increase of $2.6 million or 22% compared to last year's fourth quarter. This increase was primarily due to a 19% increase in the average servicing fee rate and to a lesser extent a 2.5% increase in the average servicing portfolio. The total average servicing fee rate, including ancillary revenues, rose to 46.1 basis points during the quarter, up from 38.7 basis points during the year ago quarter, primarily due to a larger percentage of government-backed loans in the servicing portfolio at September 30, 1999 (50% of the total portfolio) compared to the year ago quarter (40%). The Company's portfolio of loans serviced for others was $26.1 billion at September 30, 1999. Net Gains Net gains from mortgage banking and SBA banking loan sales comprised the majority of the $3.7 million in gains for the quarter, down $2.7 million or 42% from the year ago quarter. Mortgage banking gains declined $3.6 million from last year due to lower sales volumes ($230 million sold in current quarter compared to $652 million sold in the year ago quarter). SBA banking gains were $1.7 million during the quarter. Deposit Fees and Charges At September 30, 1999, the number of checking accounts was 223,000, compared to 179,000 last year, contributing to $7.5 million in deposit related fees and charges in the current year, a 60% increase over the year ago quarter. Other Income Higher sales volumes of annuities, securities, and insurance products during the quarter contributed to the overall increase in other income, which rose to $5.3 million in the quarter, up $1.3 million or 31%, from the prior year. NON-INTEREST EXPENSES Excluding litigation expenses related to the Court of Claims case and restructuring and merger related costs associated with the Texas Central acquisition, non-interest expenses for the quarter totaled $71.3 million, compared to $50.2 million for the year ago quarter. This increase includes costs associated with the Company's investments in 7-Day Banking Centers and expansion into Midland, Texas ($8.1 million pre-tax), new offices for commercial lending and SBA banking initiatives ($3.4 million pre-tax), technology advances, including e-commerce, ($1.2 million pre-tax), and a larger government-backed loan servicing portfolio ($3.9 million pre-tax). On a year to date basis, the adjusted efficiency ratio was 49.70% for 1999, compared to 49.33% in the prior year. Restructuring and merger related costs Costs incurred in connection with the Texas Central merger totaled $2.9 million and included transaction fees, estimated costs for asset write- downs, losses on security sales, lease termination costs, and other costs associated with branch consolidation. Management anticipates approximately $2.4 million in annual cost savings will be realized as a result of the Texas Central merger. LOAN ACTIVITY The Company's loan portfolios totaled $13.1 billion at September 30, 1999, up $2.2 billion or 21% over the prior year. The most significant change, year over year, was in the commercial loan portfolio. Commercial The commercial loan portfolio is primarily comprised of single family construction, multifamily and commercial real estate, healthcare, and mortgage banker finance line of credit loans and totalled $5.4 billion at September 30, 1999, up $1.9 billion or 54% from the year ago period. The Company achieved record level commercial loan fundings of $1.3 billion in the quarter, compared to $934 million for the year ago quarter and $1.1 billion for the June 1999 quarter. Small Business and SBA Small business and SBA loans, which are included in the commercial loan portfolio, totaled $293 million at September 30, 1999, up $147 million or 101%, from last year. Small business and SBA fundings for the quarter achieved another record high of $73 million, up 101% over the year ago quarter and 14% over the June 1999 quarter. Single Family The single family loan portfolio totaled $7 billion at September 30, 1999. Single family fundings for the quarter totaled $574 million, compared to $998 million for the year ago quarter and $707 million for the June 1999 quarter. The change in funding levels reflects the continued rise in long- term market interest rates and lower levels of refinancings. Refinancings were 51% of total fundings for the quarter, compared to 71% last year, and 61% for the June 1999 quarter. Consumer Consumer loans totaled $663 million at September 30, 1999, up $159 million or 32%, from the prior year. Consumer loan fundings were $83 million in the quarter, compared to $61 million in the prior year quarter and $93 million for the June 1999 quarter. Loan Composition At September 30, 1999, the composition of the loan portfolio, excluding the single family held for sale portfolio, was single family 52%, commercial 43%, and consumer 5%. The composition at September 30, 1998 was single family 54%, commercial 40%, and consumer 6%. ASSET QUALITY The Company continues to maintain high asset quality while producing record levels of commercial loan growth. The provision for credit losses totaled $20.3 million in the quarter. The increase in the provision is primarily associated with the growth in certain types of single family and commercial loans, which have historically experienced higher levels of default and loss severity during periods of rising interest rates, and to increase the general level of reserves in relation to commercial banks. Strengthening of reserves at this point in the credit cycle is consistent with recent commentary by the Federal Reserve and leading industry analysts. The nonperforming asset (nonaccrual loans plus real estate owned) ratio was .67% at September 30, 1999, compared to .59% at September 30, 1998 and .64% at June 30, 1999. Nonperforming assets, which are principally comprised of single family loans and real estate, were $108.3 million at September 30, 1999, compared to $81.4 million at September 30,1998, and $100.1 at June 30, 1999. The increase in nonperforming assets during the quarter was primarily due to a secured loan to a mortgage banking company that is currently being worked out. The outstanding balance of this loan is $7 million and we believe it is adequately secured and reserved. Net charge-offs improved during the year ended September 30, 1999, totaling $5.8 million or .05% of average loans, compared to $7.4 million or .08% for the prior year, excluding charge-offs related to the sale of the consumer line of credit portfolio in January 1998. The allowance for credit losses totaled $82.7 million at September 30, 1999, or .64% of average quarterly loans, compared to $47.5 million or .48% at September 30, 1998. At September 30, 1999, the allowance for credit losses to average loans, by type, was: .31% for the single family portfolio, 1.17% for the commercial portfolio and .36% for the consumer portfolio. DEPOSITS Total deposits were $7.5 billion at September 30, 1999, up $614 million from the prior year, of which $354 million came from growth within the community bank. The ratio of transaction accounts to total deposits was 49% at quarter end, down slightly from 50% a year ago, and 51% in the June 1999 quarter. "The 7-Day Banking Center initiative launched in the third quarter of 1999, ended the fourth quarter with impressive results," commented Burkholder. "Since we last reported to you, we have opened an additional 11,200 deposit accounts, bringing the total number of accounts opened through this initiative to 34,900. Dollars deposited into these accounts totaled $175 million as of September 30, 1999, results which continue to exceed our initial projections." During the current quarter six additional 7-Day Banking Centers were opened along with one de novo branch bringing the total number of banking centers to 68. The cost of this initiative in the fourth quarter was $3.8 million, after tax, or $.07 per diluted share. ASSETS, LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY The Company achieved another record high, closing the quarter with assets totaling $16.2 billion, up $2.5 billion or 18% from September 30, 1998. This increase was primarily a result of commercial loan growth, particularly in the single family construction, commercial real estate and healthcare portfolios. These additions were funded primarily with deposits and Federal Home Loan Bank advances. During the quarter the Company raised $160 million through the issuance of 1,200,000 shares of 7.55% redeemable preferred stock and 2,000,000 shares of 8% Premium Income Equity Securities ("Corporate PIES"). At September 30, 1999 stockholders' equity totaled $753 million, compared to $691 million in the prior year. BANK UNITED The Company also announced net income of $38.8 million for the quarter for its subsidiary Bank United, compared to $32.2 million for the year ago quarter. Net income for Bank United for the full year was $140.6 million, compared to $147.2 million for prior year. Capital levels of the Bank at September 30, 1999, qualify it as "well-capitalized", the highest of five tiers, under applicable regulatory guidelines. OTHER CORPORATE MATTERS Year 2000 Readiness Disclosure The Company has successfully tested 100% of its computer systems and programs for Year 2000 Readiness. Senior management has reviewed and approved the Business Resumption Contingency Plans and test results for all mission critical systems. The Company's computer systems experienced no date-related problems on the most recent of the Year 2000-related dates - September 9, 1999. Court of Claims Litigation Update 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 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 was concluded on October 21, 1999. The parties will now submit post-trial briefs followed by oral argument. A decision by the court is not expected until some time in the first half of calendar year 2000. 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, success of its 7-Day Banking Centers in Kroger stores, growth in both commercial and consumer loan production levels, SBA loan gains, increases in revenues or shareholder value due to branch expansion or cost savings to be realized as a result of the Texas Central merger 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, unexpected difficulties in consolidating the operations of Texas Central, 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, 1998 on file with the SEC. BANK UNITED CORP. SUPPLEMENTAL BALANCE SHEET, AS REPORTED (dollars in thousands) (unaudited) September 30, June 30, September 30, 1999 1999 1998 (Restated) (Restated) Assets Cash and cash equivalents 183,260 254,358 236,588 Securities purchased under agreements to resell and federal funds sold 390,326 243,324 495,282 Securities and other investments 143,538 142,108 104,522 Mortgage-backed securities, net 1,004,002 1,076,277 938,528 Loans, net Single family held for investment 6,451,606 5,933,932 4,696,201 Single family held for sale 592,583 712,233 2,149,009 Commercial 5,408,675 5,183,278 3,518,280 Consumer 663,338 625,176 504,407 Federal Home Loan Bank stock 328,886 305,801 243,191 Mortgage servicing rights 534,694 527,464 410,868 Servicing receivables 116,397 133,101 118,333 Deferred tax asset 110,512 94,501 113,581 Premises and equipment 88,684 88,611 62,007 Intangible assets 83,778 85,610 59,591 Real estate owned 17,278 24,090 18,790 Other assets 127,122 115,883 111,877 Total assets 16,244,679 15,545,747 13,781,055 Liabilities Deposits 7,508,502 7,311,673 6,894,227 Federal Home Loan Bank advances 6,443,470 6,018,887 4,783,498 Securities sold under agreements to repurchase and federal funds purchased 516,900 647,194 824,043 Notes payable 368,762 368,738 219,720 Other liabilities 308,131 272,895 182,673 Total liabilities 15,145,765 14,619,387 12,904,161 Minority interest and redeemable preferred stock Preferred stock issued by consolidated subsidiary 185,500 185,500 185,500 Redeemable preferred stock 160,000 --- --- Total minority interest and redeemable preferred stock 345,500 185,500 185,500 Stockholders' equity Common stock 325 324 322 Paid-in capital 132,153 138,134 132,066 Retained earnings 646,549 622,836 560,961 Unearned stock compensation (4,686) (5,205) --- Accumulated other comprehensive income -unrealized gains (losses) on securities available for sale, net of tax (20,058) (14,166) (1,454) Treasury stock, at cost (869) (1,063) (501) Total stockholders' equity 753,414 740,860 691,394 Total liabilities and stockholders' equity 16,244,679 15,545,747 13,781,055 BANK UNITED CORP. INCOME STATEMENT TREND, AS REPORTED (dollars in thousands, except per share data) (unaudited) For the Year For the Quarter Ended Ended 09/30/99 09/30/98 09/30/99 06/30/99 (Restated) (Restated) Interest income Short-term interest-earning assets 20,692 38,641 5,405 4,839 Securities and other investments 7,414 9,711 2,035 1,746 Mortgage-backed securities 69,665 82,276 16,175 17,744 Loans 894,039 762,494 248,036 222,975 Federal Home Loan Bank stock 16,176 12,678 4,437 3,857 Total interest income 1,007,986 905,800 276,088 251,161 Interest expense Deposits 296,630 302,925 78,173 72,789 Federal Home Loan Bank advances 303,014 236,265 83,804 73,732 Securities sold under agreements to repurchase and federal funds purchased 32,929 56,286 6,899 7,242 Notes payable 25,792 19,571 7,913 7,904 Total interest expense 658,365 615,047 176,789 161,667 Net interest income 349,621 290,753 99,299 89,494 Provision for credit losses 38,368 20,123 20,283 5,617 Net interest income after provision for credit losses 311,253 270,630 79,016 83,877 Non-interest income Loan servicing fees, gross 121,750 95,421 33,464 29,193 Less amortization expense 67,342 59,446 18,939 16,908 Net servicing fees 54,408 35,975 14,525 12,285 Net gains (losses) on sales Single family loans 18,909 11,124 2,106 3,628 Securities and mortgage-backed securities 1,290 2,761 173 332 Other loans 3,299 651 1,393 879 Net gains (losses) on sales 23,498 14,536 3,672 4,839 Deposit related fees and charges 23,176 17,888 7,478 5,901 Other 18,879 13,254 5,333 4,439 Total non-interest income 119,961 81,653 31,008 27,464 Non-interest expense Compensation and benefits 109,944 88,890 33,681 28,611 Occupancy 22,841 15,945 6,914 5,859 Data processing 20,574 16,804 6,230 5,293 Court of claims litigation 7,575 1,800 1,749 1,749 Intangible amortization 6,647 5,864 1,864 1,863 REO operations, net 1,880 (1,273) 722 566 Merger related and restructuring costs 2,394 --- 2,394 --- Other 77,790 64,448 21,845 19,801 Total non-interest expense 249,645 192,478 75,399 63,742 Income before income taxes and minority interest 181,569 159,805 34,625 47,599 Income tax expense 53,659 25,862 (1,356) 17,639 Income before minority interest 127,910 133,943 35,981 29,960 Minority interest - subsidiary preferred stock dividends 18,253 18,253 4,564 4,563 Net income 109,657 115,690 31,417 25,397 Net income available to common stockholders 107,955 115,690 29,715 25,397 Basic earnings per common share 3.34 3.59 0.92 0.78 Diluted earnings per common share 3.28 3.51 0.90 0.77 BANK UNITED CORP. INCOME STATEMENT TREND, AS REPORTED (dollars in thousands, except per share data) (unaudited) 03/31/99 12/31/98 09/30/98 (Restated)(Restated)(Restated) Interest income Short-term interest-earning assets 5,498 4,950 16,157 Securities and other investments 2,006 1,627 3,337 Mortgage-backed securities 17,779 17,967 15,239 Loans 213,263 209,765 191,838 Federal Home Loan Bank stock 4,059 3,823 3,195 Total interest income 242,605 238,132 229,766 Interest expense Deposits 71,292 74,376 79,938 Federal Home Loan Bank advances 74,948 70,530 59,256 Securities sold under agreements to repurchase and federal funds purchased 8,666 10,122 12,916 Notes payable 5,088 4,887 4,887 Total interest expense 159,994 159,915 156,997 Net interest income 82,611 78,217 72,769 Provision for credit losses 5,982 6,486 3,346 Net interest income after provision for credit losses 76,629 71,731 69,423 Non-interest income Loan servicing fees, gross 28,940 30,153 28,100 Less amortization expense 16,065 15,430 16,214 Net servicing fees 12,875 14,723 11,886 Net gains (losses) on sales Single family loans 4,662 8,513 5,660 Securities and mortgage-backed securities 605 180 736 Other loans (38) 1,065 (22) Net gains (losses) on sales 5,229 9,758 6,374 Deposit related fees and charges 4,958 4,839 4,682 Other 5,264 3,843 4,082 Total non-interest income 28,326 33,163 27,024 Non-interest expense Compensation and benefits 25,419 22,233 24,964 Occupancy 5,340 4,728 3,478 Data processing 4,700 4,351 4,701 Court of claims litigation 1,316 2,761 450 Intangible amortization 1,582 1,338 1,750 REO operations, net 623 (31) (102) Merger related and restructuring costs --- --- --- Other 17,653 18,491 15,397 Total non-interest expense 56,633 53,871 50,638 Income before income taxes and minority interest 48,322 51,023 45,809 Income tax expense 18,292 19,084 16,931 Income before minority interest 30,030 31,939 28,878 Minority interest - subsidiary preferred stock dividends 4,563 4,563 4,564 Net income 25,467 27,376 24,314 Net income available to common stockholders 25,467 27,376 24,314 Basic earnings per common share 0.79 0.85 0.75 Diluted earnings per common share 0.77 0.83 0.74 BANK UNITED CORP. FINANCIAL HIGHLIGHTS TREND, AS REPORTED (dollars in thousands, except per share data) (unaudited) For the year For the Quarter Ended Ended 09/30/99 09/30/98 09/30/99 06/30/99 (Restated) (Restated) For the period ended Loan fundings Single family 3,680,202 2,793,639 574,101 707,009 Commercial 4,479,385 1,949,752 1,291,830 1,144,047 Consumer 318,409 311,833 83,162 92,627 Total 8,477,996 5,055,224 1,949,093 1,943,683 NOLs utilized during period 189,300 178,100 12,300 56,800 NOL balance at period end 334,200 523,500 334,200 346,500 Common share data Average shares outstanding-basic 32,299,318 32,200,491 32,424,459 32,401,036 Average shares outstanding-diluted 32,940,965 32,975,769 32,964,086 33,081,914 Ending shares outstanding 32,448,926 32,196,713 32,448,926 32,413,483 Basic earnings per share 3.34 3.59 0.92 0.78 Diluted earnings per share 3.28 3.51 0.90 0.77 Dividends paid per common share 0.692 0.643 0.185 0.193 Book value (period end) 23.22 21.47 23.22 22.86 Tangible book value (period end) 20.64 19.62 20.64 20.22 At period end Assets 16,244,679 13,781,055 16,244,679 15,545,747 Securities and other investments 143,538 104,522 143,538 142,108 Mortgage-backed securities, net 1,004,002 938,528 1,004,002 1,076,277 Loans, net 13,116,202 10,867,897 13,116,202 12,454,619 Allowance for credit losses 82,705 47,503 82,705 64,018 Mortgage servicing rights, net 534,694 410,868 534,694 527,464 Deposits 7,508,502 6,894,227 7,508,502 7,311,673 Borrowed funds 7,329,132 5,827,261 7,329,132 7,034,819 Minority interest and redeemable preferred stock 345,500 185,500 345,500 185,500 Stockholders' equity 753,414 691,394 753,414 740,860 Single family servicing portfolio Others 26,058,482 23,491,960 26,058,482 25,950,135 Bank 4,834,511 4,443,340 4,834,511 4,659,020 Total 30,892,993 27,935,300 30,892,993 30,609,155 Average balances Assets 15,049,606 12,853,683 16,031,175 15,113,371 Stockholders' equity 729,065 649,549 750,809 738,028 Interest-earning assets 13,897,560 11,886,975 14,814,946 13,943,689 Interest-bearing liabilities 13,931,251 11,819,251 14,755,228 14,015,570 BANK UNITED CORP. FINANCIAL HIGHLIGHTS TREND, AS REPORTED (dollars in thousands, except per share data) (unaudited) 03/31/99 12/31/98 09/30/98 (Restated) (Restated) (Restated) For the period ended Loan fundings Single family 773,143 1,625,949 998,012 Commercial 1,001,576 1,041,932 934,446 Consumer 78,093 64,527 61,087 Total 1,852,812 2,732,408 1,993,545 NOLs utilized during period 57,800 62,400 42,000 NOL balance at period end 403,300 461,100 523,500 Common share data Average shares outstanding-basic 32,190,307 32,180,545 32,208,996 Average shares outstanding-diluted 32,913,479 32,803,455 32,914,546 Ending shares outstanding 32,271,517 32,176,713 32,196,713 Basic earnings per share 0.79 0.85 0.75 Diluted earnings per share 0.77 0.83 0.74 Dividends paid per common share 0.157 0.157 0.162 Book value (period end) 22.65 22.16 21.47 Tangible book value (period end) 19.95 20.35 19.62 At period end Assets 14,995,336 14,939,624 13,781,055 Securities and other investments 143,071 102,335 104,522 Mortgage-backed securities, net 1,175,160 1,178,540 938,528 Loans, net 11,672,989 11,864,622 10,867,897 Allowance for credit losses 59,320 52,693 47,503 Mortgage servicing rights 431,746 417,235 410,868 Deposits 7,170,316 6,967,250 6,894,227 Borrowed funds 6,701,587 6,872,881 5,827,261 Minority interest and redeemable preferred stock 185,500 185,500 185,500 Stockholders' equity 730,822 713,095 691,394 Single family servicing portfolio Others 22,812,908 23,120,142 23,491,960 Bank 4,491,073 4,468,075 4,443,340 Total 27,303,981 27,588,217 27,935,300 Average balances Assets 14,867,541 14,065,842 13,348,588 Stockholders' equity 722,312 697,024 684,407 Interest-earning assets 13,712,781 13,009,055 12,175,134 Interest-bearing liabilities 13,813,336 13,036,278 12,277,580 BANK UNITED CORP. KEY RATIOS, AS REPORTED (dollars in thousands, except per share data) (unaudited) For the Year For the Quarter Ended Ended 09/30/99 09/30/98 09/30/99 06/30/99 (Restated) (Restated) Ratios ROA (return, before minority interest and redeemable preferred stock, on average assets) 0.85 1.04 0.89 0.80 ROCE (return on average common equity) 14.81 17.81 15.70 13.80 Net interest spread 2.54 2.42 2.71 2.60 Net yield on interest-earning assets 2.53 2.45 2.73 2.58 Efficiency ratio 51.86 50.22 56.55 53.04 Equity to assets (period end) 4.64 5.02 4.64 4.77 Equity to assets (average) 4.84 5.05 4.68 4.88 Tangible capital ratio (Bank only) 7.14 6.74 7.14 6.60 Core capital ratio (Bank only) 7.15 6.76 7.15 6.62 Risk-based capital ratio (Bank only)11.71 10.48 11.71 11.24 Asset quality (period end) Nonperforming assets ("NPAs") 108,267 81,359 108,267 100,078 Nonperforming loans ("NPLs") 89,649 62,002 89,649 75,001 NPAs as a % of total assets 0.67 0.59 0.67 0.64 Allowance to period end loan balance 0.63 0.44 0.63 0.51 Allowance to average loan balance 0.69 0.49 0.64 0.53 Allowance to NPLs - single family 25.71 22.36 25.71 21.44 - commercial 436.59 607.29 436.59 679.04 - consumer 151.77 329.20 151.77 221.48 - total 92.25 76.62 92.25 85.36 Branch and employee statistics Full-time equivalent employees 2,578 1,968 2,578 2,462 Commercial banking offices 20 19 20 18 SBA lending offices 23 2 23 2 Wholesale mtg. origination offices 10 8 10 9 Community bank branches Traditional 82 74 82 82 Supermarket 68 9 68 62 Total 150 83 150 144 ATMs 155 84 155 149 Checking accounts excluding escrows 223,000 179,000 223,000 211,000 BANK UNITED CORP. KEY RATIOS, AS REPORTED (dollars in thousands, except per share data) (unaudited) 03/31/99 12/31/98 09/30/98 (Restated)(Restated)(Restated) Ratios ROA (return, before minority interest and redeemable preferred stock, on average assets) 0.82 0.90 0.86 ROCE (return on average common equity) 14.30 15.58 14.09 Net interest spread 2.44 2.45 2.47 Net yield on interest-earning assets 2.41 2.44 2.43 Efficiency ratio 49.73 47.26 49.09 Equity to assets (period end) 4.87 4.77 5.02 Equity to assets (average) 4.86 4.96 5.13 Tangible capital ratio (Bank only) 6.72 6.51 6.74 Core capital ratio (Bank only) 6.74 6.53 6.76 Risk-based capital ratio (Bank only) 11.91 10.39 10.48 Asset quality (period end) Nonperforming assets ("NPAs") 92,752 90,648 81,359 Nonperforming loans ("NPLs") 63,158 63,427 62,002 NPAs as a % of total assets 0.62 0.61 0.59 Allowance to period end loan balance 0.51 0.44 0.44 Allowance to average loan balance 0.51 0.47 0.48 Allowance to NPLs - single family 22.96 24.98 22.36 - commercial 752.87 377.01 607.29 - consumer 148.65 284.64 329.20 - total 93.92 83.08 76.62 Branch and employee statistics Full-time equivalent employees 2,272 1,991 1,968 Commercial banking offices 19 19 19 SBA lending offices 2 2 2 Wholesale mtg. origination offices 9 9 8 Community bank branches Traditional 81 77 74 Supermarket 13 11 9 Total 94 88 83 ATMs 93 90 84 Checking accounts excluding escrows 191,000 185,000 179,000 BANK UNITED CORP. ADJUSTING ITEMS (dollars in thousands, except per share data) (unaudited) For the Year For the Quarter Ended Ended 09/30/99 09/30/98 09/30/99 06/30/99 (Restated) (Restated) Net income as reported 109,657 115,690 31,417 25,397 Additional allowance for credit losses 13,009 7,776 13,009 --- Court of claims litigation expenses 7,575 --- 1,749 1,749 Merger related and restructuring costs 2,893 --- 2,893 --- Higher prepayments on servicing portfolio --- 4,767 --- --- Higher prepayments on single family portfolio --- 1,973 --- --- Tax effect on adjusting items (8,804) (5,430) (6,619) (655) NOL tax benefit (13,500) --- (13,500) --- Deferred tax asset reduction in allowance --- (27,500) --- --- FDIC tax settlement --- (6,020) --- --- Net income as adjusted 110,830 91,256 28,949 26,491 Diluted earnings per share as reported 3.28 3.51 0.90 0.77 Additional allowance for credit losses 0.25 0.15 0.25 --- Court of claims litigation expenses 0.14 --- 0.03 0.03 Merger related and restructuring costs 0.05 --- 0.06 --- Higher prepayments on servicing portfolio --- 0.09 --- --- Higher prepayments on single family portfolio --- 0.03 --- --- NOL tax benefit (0.41) --- (0.41) --- Deferred tax asset reduction in allowance --- (0.83) --- --- FDIC tax settlement --- (0.18) --- --- Diluted earnings per share as adjusted 3.31 2.77 0.83 0.80 Selected data, excluding adjusting items Net income available to common stockholders 109,128 91,256 27,247 26,491 Basic earnings per share 3.38 2.83 0.84 0.82 Diluted earnings per share 3.31 2.77 0.83 0.80 ROA 0.86 0.85 0.83 0.82 ROCE 14.94 14.60 14.45 14.38 Efficiency ratio 49.70 49.33 53.23 51.55 Net interest spread 2.54 2.44 2.71 2.60 Net yield on interest-earning assets 2.53 2.47 2.73 2.58 BANK UNITED CORP. ADJUSTING ITEMS (dollars in thousands, except per share data) (unaudited) 03/31/99 12/31/98 09/30/98 (Restated)(Restated)(Restated) Net income as reported 25,467 27,376 24,314 Additional allowance for credit losses --- --- --- Court of claims litigation expenses 1,316 2,761 --- Merger related and restructuring costs --- --- --- Tax effect on adjusting items (494) (1,033) --- NOL tax benefit --- --- --- Net income as adjusted 26,289 29,104 24,314 Diluted earnings per share as reported 0.77 0.83 0.74 Additional allowance for credit losses --- --- --- Court of claims litigation expenses 0.03 0.05 --- Merger related and restructuring costs --- --- --- NOL tax benefit --- --- --- Diluted earnings per share as adjusted 0.80 0.88 0.74 Selected data, excluding adjusting items Net income available to common stockholders 26,289 29,104 24,314 Basic earnings per share 0.82 0.90 0.75 Diluted earnings per share 0.80 0.88 0.74 ROA 0.84 0.95 0.86 ROCE 14.74 16.52 14.09 Efficiency ratio 48.54 44.78 49.09 Net interest spread 2.44 2.45 2.47 Net yield on interest-earning assets 2.41 2.44 2.43 BANK UNITED CORP. SUPPLEMENTAL LOAN AND DEPOSIT DATA, AS REPORTED (dollars in thousands) (unaudited) September 30, June 30,September 30, 1999 1999 1998 (Restated) (Restated) Loans Single family Held for investment 6,470,636 5,948,319 4,708,704 Allowance for credit losses (19,030) (14,387) (12,503) Net single family held for investment 6,451,606 5,933,932 4,696,201 Held for sale 592,583 712,233 2,149,009 Net single family 7,044,189 6,646,165 6,845,210 Commercial Single family construction 1,254,796 1,195,780 781,729 Mortgage banker finance line of credit 944,155 1,072,449 787,343 Commercial real estate construction 115,633 90,998 91,204 Commercial real estate 860,644 801,422 431,858 Multi-family construction 228,043 207,453 171,670 Multi-family 822,280 740,402 701,914 Healthcare construction 279,216 228,282 144,361 Healthcare 328,541 318,740 121,348 Commercial syndication 305,945 254,259 173,998 SBA 156,799 165,452 77,529 Small business 135,884 121,249 68,071 Energy 30,712 25,664 --- Agricultural 7,298 8,790 --- Total commercial 5,469,946 5,230,940 3,551,025 Allowance for credit losses (61,271) (47,662) (32,745) Net commercial 5,408,675 5,183,278 3,518,280 Consumer Real estate 579,295 538,826 434,370 Installment 80,253 81,286 64,491 Revolving 6,194 7,033 7,801 Total consumer 665,742 627,145 506,662 Allowance for credit losses (2,404) (1,969) (2,255) Net consumer 663,338 625,176 504,407 Total loans receivable, net 13,116,202 12,454,619 10,867,897 Deposits Transaction accounts Non-interest checking 681,464 746,502 504,003 Checking with interest 240,125 249,662 209,206 Savings 135,538 138,180 124,792 Money market 2,199,350 2,195,242 2,165,623 Mortgage loan principal and interest 115,225 185,627 207,626 Escrow 276,247 221,890 270,135 3,647,949 3,737,103 3,481,385 Certificates of deposit 3,438,831 3,332,162 3,392,174 Brokered certificates of deposit 421,722 242,408 20,668 3,860,553 3,574,570 3,412,842 Total deposits 7,508,502 7,311,673 6,894,227 BANK UNITED CORP. LOAN ACTIVITY, AS REPORTED (dollars in thousands) (unaudited) For the Quarter Ended September 30, June 30, September 30, 1999 1999 1998 (Restated) (Restated) Beginning balance Single family held for investment 5,933,932 4,988,324 4,079,038 Single family held for sale 712,233 1,571,433 2,048,921 Commercial 5,183,278 4,529,272 3,167,721 Consumer 625,176 583,960 477,160 Fundings Single family held for investment 31,994 112,458 189,794 Single family held for sale 542,107 594,551 808,218 Commercial 1,291,830 1,144,047 934,446 Consumer 83,162 92,627 61,087 Purchases Single family held for investment 427,597 349,099 968,421 Single family held for sale 62,318 47,292 113,734 Commercial 157,282 319,455 73,327 Net change in mortgage banker finance line of credit (128,294) 205,015 143,704 Repayments Single family held for investment (298,158) (435,989) (417,341) Single family held for sale (111,146) (67,937) (283,028) Commercial (914,656) (806,082) (655,973) Consumer (40,756) (50,608) (33,101) Securitized loans sold or transferred Single family (79,012) (260,927) (266,595) Commercial (118,568) (153,619) (141,223) Sales Single family held for investment (561) (4,499) (99,106) Single family held for sale (150,498) (226,863) (286,498) Commercial (60,743) (49,879) (4,958) Foreclosures (5,069) (13,704) (6,165) Net change in allowance for credit losses (18,687) (4,698) (2,036) Other (8,559) (8,109) (1,650) Ending balance Single family held for investment 6,451,606 5,933,932 4,696,201 Single family held for sale 592,583 712,233 2,149,009 Commercial 5,408,675 5,183,278 3,518,280 Consumer 663,338 625,176 504,407 BANK UNITED CORP. MORTGAGE-BACKED SECURITY ACTIVITY, AS REPORTED (dollars in thousands) (unaudited) For the Quarter Ended September 30, June 30, September 30, 1999 1999 1998 (Restated) (Restated) Beginning balance 1,076,277 1,175,160 1,050,635 Purchases 33,767 901 11,514 Securitization --- --- 18,896 Sales (6,762) --- --- Principal repayments (90,608) (83,266) (139,582) Premium/discount amortization (1,464) (1,670) (1,600) Unrealized gains/losses (7,208) (14,848) (1,335) Ending balance 1,004,002 1,076,277 938,528 BANK UNITED CORP. SINGLE FAMILY SERVICING PORTFOLIO SERVICED FOR OTHERS, AS REPORTED (dollars in thousands) (unaudited) For the Quarter Ended September 30, June 30, September 30, 1999 1999 1998 Servicing portfolio activity Beginning balance 21,195,605 22,043,758 18,246,481 Production 227,038 488,958 546,518 Purchases 2,488,455 238,691 5,774,713 Repayments (890,363) (1,334,100) (1,464,851) Other (245,495) (241,702) (266,316) Total serviced 22,775,240 21,195,605 22,836,545 Acquired, not transferred 3,283,242 4,754,530 655,415 Ending balance 26,058,482 25,950,135 23,491,960 Number of loans serviced 287,251 284,893 255,293 Mortgage servicing rights ("MSRs") at period end 534,694 527,464 410,868 MSRs as a % of principal balance 2.05 2.03 1.75 Loan type mix Adjustable rate 8,161,827 8,563,545 8,452,557 Fixed rate 17,896,655 17,386,590 15,039,403 Total 26,058,482 25,950,135 23,491,960 Investor mix GNMA 9,444,684 11,606,420 9,749,333 FNMA 2,748,191 3,523,941 3,420,841 FHLMC 2,008,505 2,523,595 2,518,539 Other 11,857,102 8,296,179 7,803,247 Total 26,058,482 25,950,135 23,491,960 Average service fee rate 0.461 0.432 0.387 BANK UNITED CORP. ALLOWANCE FOR CREDIT LOSSES, AS REPORTED (dollars in thousands) (unaudited) Single ALLOWANCE ACTIVITY family Commercial Consumer Total Balance at June 30,1999 (Restated) 14,387 47,662 1,969 64,018 Provision 5,506 14,034 743 20,283 Acquisition --- --- --- --- Net charge-offs (863) (425) (308) (1,596) Balance at September 30, 1999 19,030 61,271 2,404 82,705 Net charge-offs to average loans 0.06 0.03 0.19 0.05 Balance at September 30, 1998 (Restated) 12,503 32,745 2,255 47,503 Provision 9,644 27,288 1,436 38,368 Acquisition --- 2,594 --- 2,594 Net charge-offs (3,117) (1,356) (1,287) (5,760) Balance at September 30, 1999 19,030 61,271 2,404 82,705 Net charge-offs to average loans 0.06 0.03 0.22 0.05 PERIOD END RESERVES September 30, June 30, September 30, 1999 1999 1998 (Restated) (Restated) Loans held for investment Single family Allowance 19,030 14,387 12,503 Period end loan balance 6,470,636 5,948,319 4,708,704 Average loan balance 6,156,604 4,873,538 3,925,694 Reserve ratio-period end 0.29 0.24 0.27 Reserve ratio-average 0.31 0.30 0.32 Reserve ratio-12 month average 0.35 0.30 0.26 Commercial Allowance 61,271 47,662 32,745 Period end loan balance 5,368,565 5,105,858 3,463,002 Average loan balance 5,241,240 4,742,646 3,233,312 Reserve ratio-period end 1.14 0.93 0.95 Reserve ratio-average 1.17 1.00 1.01 Reserve ratio-12 month average 1.34 1.14 1.13 Consumer Allowance 2,404 1,969 2,255 Period end loan balance 665,742 627,145 506,662 Average loan balance 665,117 607,549 508,540 Reserve ratio-period end 0.36 0.31 0.45 Reserve ratio-average 0.36 0.32 0.44 Reserve ratio-12 month average 0.41 0.37 0.56 Loans held for sale Period end loan balance 693,964 837,315 2,237,032 Average loan balance 881,479 1,749,907 2,241,834 Total loans Allowance 82,705 64,018 47,503 Period end loan balance 13,198,907 12,518,637 10,915,400 Average loan balance 12,944,440 11,973,640 9,909,380 Reserve ratio-period end 0.63 0.51 0.44 Reserve ratio-average 0.64 0.53 0.48 Reserve ratio-12 month average 0.68 0.56 0.48 BANK UNITED CORP. AVERAGE BALANCE SHEET AND RATE INFORMATION, AS REPORTED (dollars in thousands) (unaudited) For the Quarter Ended For the Quarter Ended September 30, 1999 June 30, 1999 Average Average Average Average Balance Rate Balance Rate (Restated) (Restated) Interest-earning assets Short-term interest-earning assets 354,111 6.03 385,440 4.97 Securities and other investments 193,309 4.33 189,728 3.69 Mortgage-backed securities 1,026,024 6.33 1,117,770 6.35 Loans Single family 6,948,730 7.17 6,528,684 7.10 Commercial 5,312,303 8.27 4,822,368 7.88 Consumer 659,479 7.99 604,371 7.88 Total 12,920,512 7.67 11,955,423 7.45 Federal Home Loan Bank stock 320,990 5.49 295,328 5.24 Total interest-earning assets 14,814,946 7.44 13,943,689 7.20 Non-interest earning assets 1,216,229 1,169,682 Total assets 16,031,175 15,113,371 Interest-bearing liabilities Deposits Interest-bearing 6,313,435 4.93 6,057,645 4.82 Non-interest bearing 1,154,562 --- 1,174,548 --- Total deposits 7,467,997 4.17 7,232,193 4.04 Federal Home Loan Bank advances 6,372,865 5.15 5,825,878 5.01 Securities sold under agreements to repurchase and federal funds purchased 541,001 5.02 587,465 4.88 Notes payable 373,365 8.48 370,034 8.54 Total interest-bearing liabilities 14,755,228 4.73 14,015,570 4.60 Non-interest bearing liabilities and stockholders' equity 1,275,947 1,097,801 Total liabilities and stockholders' equity 16,031,175 15,113,371 Net interest spread 2.71 2.60 Net yield on interest-earning assets 2.73 2.58 Ratio of average interest-earning assets to average interest-bearing liabilities 1.00 0.99 BANK UNITED CORP. AVERAGE BALANCE SHEET AND RATE INFORMATION, AS REPORTED (dollars in thousands) (unaudited) For the Quarter Ended September 30, 1998 Average Average Balance Rate (Restated) (Restated) Interest-earning assets Short-term interest-earning assets 924,098 6.84 Securities and other investments 201,432 6.57 Mortgage-backed securities 944,895 6.45 Loans Single 6,086,711 7.23 Commercial 3,300,484 8.64 Consumer 505,411 7.84 Total 9,892,606 7.73 Federal Home Loan Bank stock 212,103 5.98 Total interest-earning assets 12,175,134 7.51 Non-interest earning assets 1,173,454 Total assets 13,348,588 Interest-bearing liabilities Deposits Interest-bearing 6,032,286 5.26 Non-interest-bearing 1,009,886 --- Total deposits 7,042,172 4.50 Federal Home Loan Bank advances 4,113,392 5.64 Securities sold under agreements to repurchase and federal funds purchased 902,299 5.60 Notes payable 219,717 8.90 Total interest-bearing liabilities 12,277,580 5.04 Non-interest bearing liabilities and stockholders' equity 1,071,008 Total liabilities and stockholders' equity 13,348,588 Net interest spread 2.47 Net yield on interest-earning assets 2.43 Ratio of average interest-earning assets to average interest-bearing liabilities 0.99SOURCE Bank United Corp.
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CONTACT:
Media Relations, Vern Stockton ,
713-543-6920, or Investor Relations, Debbie Kemple, 713-543-6926,
both of Bank United Corp.
