UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Form 10-Q
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(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the quarterly period ended June 30, 2003 | ||
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Commission File No. 1-13921
BankUnited Financial Corporation
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Florida
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65-0377773 | |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
255 Alhambra Circle, Coral Gables, Florida 33134
(305) 569-2000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o
The number of shares outstanding of the registrant’s common stock at the close of business on August 5, 2003 was 29,068,411 shares of Class A Common Stock, $.01 par value, and 536,562 shares of Class B Common Stock, $.01 par value.
This Form 10-Q contains 39 pages.
The Index to Exhibits appears on page 39.
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
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PART I — FINANCIAL INFORMATION |
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| Item 1. | Financial Statements | |||||||
| Consolidated Statements of Financial Condition (unaudited) as of June 30, 2003 and September 30, 2002 | 2 | |||||||
| Consolidated Statements of Operations (unaudited) for the Three and Nine Months Ended June 30, 2003 and June 30, 2002 | 3 | |||||||
| Consolidated Statements of Stockholders’ Equity (unaudited) for the Nine Months Ended June 30, 2003 and June 30, 2002 | 4 | |||||||
| Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended June 30, 2003 and June 30, 2002 | 5 | |||||||
| Condensed Notes to Consolidated Financial Statements (unaudited) | 6 | |||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 35 | ||||||
| Item 4. | Controls and Procedures | 36 | ||||||
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PART II — OTHER INFORMATION |
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| Item 6. | Exhibits and Reports on Form 8-K | 37 | ||||||
1
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
| June 30, | September 30, | |||||||||
| 2003 | 2002 | |||||||||
| (Dollars in thousands, except | ||||||||||
| share data) | ||||||||||
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ASSETS: |
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Cash
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$ | 32,806 | $ | 48,609 | ||||||
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Federal Home Loan Bank overnight deposits
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25,215 | 419,946 | ||||||||
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Federal funds sold and securities purchased under
agreements to resell
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11,998 | 3,735 | ||||||||
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Investments available for sale, at fair value
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289,132 | 171,585 | ||||||||
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Mortgage-backed securities available for sale, at
fair value
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2,126,425 | 1,136,634 | ||||||||
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Loans receivable, net (allowance for loan losses
of $22,441 and $20,293 as of June 30, 2003 and
September 30, 2002, respectively)
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3,808,586 | 3,713,365 | ||||||||
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Mortgage loans held for sale (fair value of
approximately $312,719 and $284,239 at June 30, 2003 and
September 30, 2002, respectively)
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308,463 | 278,759 | ||||||||
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Other earning assets
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116,373 | 90,724 | ||||||||
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Office properties and equipment, net
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18,171 | 17,744 | ||||||||
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Real estate owned
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5,100 | 3,003 | ||||||||
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Accrued interest receivable
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29,920 | 28,861 | ||||||||
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Mortgage servicing rights
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10,825 | 6,746 | ||||||||
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Goodwill
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28,353 | 28,353 | ||||||||
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Bank-owned life insurance
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83,074 | 53,180 | ||||||||
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Receivable for securities sold pending settlement
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58,501 | — | ||||||||
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Prepaid expenses and other assets
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27,250 | 27,304 | ||||||||
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Total assets
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$ | 6,980,192 | $ | 6,028,548 | ||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY: |
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LIABILITIES:
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Deposits
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$ | 3,158,419 | $ | 2,976,171 | ||||||
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Securities sold under agreements to repurchase
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363,537 | 355,042 | ||||||||
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Advances from Federal Home Loan Bank
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2,319,247 | 1,806,089 | ||||||||
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Senior notes
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200,000 | 200,000 | ||||||||
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Trust preferred securities and junior
subordinated deferrable interest debentures
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161,684 | 253,761 | ||||||||
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Interest payable
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17,063 | 13,938 | ||||||||
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Advance payments by borrowers for taxes and
insurance
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34,062 | 40,593 | ||||||||
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Liability for securities purchased pending
settlement
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247,313 | — | ||||||||
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Accrued expenses and other liabilities
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33,372 | 37,805 | ||||||||
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Total liabilities
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6,534,697 | 5,683,399 | ||||||||
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Commitments and Contingencies (See note 10)
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STOCKHOLDERS’ EQUITY:
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Preferred Stock, Authorized
shares — 10,000,000. Issued
shares — Noncumulative Convertible Preferred
Stock, Series B — 724,007 and 574,007 at
June 30, 2003 and September 30, 2002, respectively;
Outstanding shares — Noncumulative Convertible
Preferred Stock Series B — 697,287 and
547,287 at June 30, 2003 and September 30, 2002,
respectively
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7 | 6 | ||||||||
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Class A Common Stock, $0.01 par value.
Authorized shares — 60,000,000. Issued
shares — 29,389,882 and 25,008,515 at
June 30, 2003 and September 30, 2002, respectively.
Outstanding shares — 29,056,882 and 24,675,515 at
June 30, 2003 and September 30, 2002, respectively
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294 | 250 | ||||||||
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Class B Common Stock, $0.01 par value.
Authorized shares — 3,000,000. Issued
shares — 580,262 and 536,562, at June 30,
2003 and September 30, 2002, respectively. Outstanding
shares — 536,562 at June 30, 2003 and
September 30, 2002
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6 | 5 | ||||||||
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Additional paid-in capital
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326,150 | 253,511 | ||||||||
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Retained earnings
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105,348 | 77,566 | ||||||||
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Common Treasury Stock — 376,700
and 333,000 shares at June 30, 2003 and September 30,
2002, respectively
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(3,279 | ) | (2,794 | ) | ||||||
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Preferred Treasury Stock — 26,720
shares
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(528 | ) | (528 | ) | ||||||
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Deferred compensation and option shares
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697 | 528 | ||||||||
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Accumulated other comprehensive income
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16,800 | 16,605 | ||||||||
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Total stockholders’ equity
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445,495 | 345,149 | ||||||||
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Total liabilities and stockholders’ equity
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$ | 6,980,192 | $ | 6,028,548 | ||||||
See accompanying condensed notes to consolidated financial statements
2
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
| For the Three | For the Nine | ||||||||||||||||||
| Months | Months | ||||||||||||||||||
| Ended June 30, | Ended June 30, | ||||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||||
| (Dollars and shares | |||||||||||||||||||
| in thousands, except per share data) | |||||||||||||||||||
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Interest income:
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Interest and fees on loans
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$ | 56,699 | $ | 61,959 | $ | 176,333 | $ | 192,207 | |||||||||||
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Interest on mortgage-backed securities
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17,796 | 16,796 | 50,763 | 45,429 | |||||||||||||||
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Interest on short-term investments
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113 | 169 | 340 | 483 | |||||||||||||||
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Interest and dividends on long-term investments
and other interest-earning assets
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3,922 | 2,762 | 10,644 | 8,605 | |||||||||||||||
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Total interest income
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78,530 | 81,686 | 238,080 | 246,724 | |||||||||||||||
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Interest expense:
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Interest on deposits
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19,715 | 25,839 | 63,471 | 80,642 | |||||||||||||||
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Interest on borrowings
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25,535 | 22,990 | 73,421 | 69,356 | |||||||||||||||
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Preferred dividends of subsidiary trusts
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4,922 | 4,879 | 15,057 | 14,753 | |||||||||||||||
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Total interest expense
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50,172 | 53,708 | 151,949 | 164,751 | |||||||||||||||
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Net interest income before provision for loan
losses
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28,358 | 27,978 | 86,131 | 81,973 | |||||||||||||||
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Provision for loan losses
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1,375 | 1,900 | 3,925 | 7,300 | |||||||||||||||
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Net interest income after provision for loan
losses
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26,983 | 26,078 | 82,206 | 74,673 | |||||||||||||||
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Non-interest income:
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Loan servicing fees, net of amortization
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(1,346 | ) | (632 | ) | (3,228 | ) | (1,616 | ) | |||||||||||
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Loan fees
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1,372 | 847 | 3,562 | 2,887 | |||||||||||||||
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Deposit fees
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1,017 | 843 | 3,037 | 2,479 | |||||||||||||||
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Other fees
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410 | 287 | 1,014 | 726 | |||||||||||||||
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Insurance and investment services income
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771 | 844 | 2,091 | 3,024 | |||||||||||||||
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Net gain (loss) on sale of investments and
mortgage-backed securities
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4,085 | (295 | ) | 4,840 | 587 | ||||||||||||||
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Net gain on sale of loans and other assets
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2,555 | 1,442 | 6,323 | 2,954 | |||||||||||||||
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Other
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1,158 | 951 | 4,180 | 2,171 | |||||||||||||||
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Total non-interest income
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10,022 | 4,287 | 21,819 | 13,212 | |||||||||||||||
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Non-interest expenses:
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Employee compensation and benefits
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9,569 | 7,891 | 27,938 | 22,304 | |||||||||||||||
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Occupancy and equipment
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3,172 | 2,863 | 9,125 | 8,179 | |||||||||||||||
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Telecommunications and data processing
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1,310 | 1,106 | 3,729 | 3,267 | |||||||||||||||
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Advertising and promotion expense
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1,021 | 1,256 | 3,464 | 4,536 | |||||||||||||||
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Professional fees — legal and accounting
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864 | 1,851 | 3,211 | 4,107 | |||||||||||||||
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Loan closing fees
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827 | 705 | 2,362 | 1,927 | |||||||||||||||
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Loan servicing expense
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277 | 652 | 1,124 | 2,384 | |||||||||||||||
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Postage and courier
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394 | 306 | 1,059 | 875 | |||||||||||||||
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Insurance
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304 | 261 | 873 | 778 | |||||||||||||||
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Other operating expenses
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4,940 | 1,204 | 9,339 | 4,530 | |||||||||||||||
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Total non-interest expenses
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22,678 | 18,095 | 62,224 | 52,887 | |||||||||||||||
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Income before income taxes
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14,327 | 12,270 | 41,801 | 34,998 | |||||||||||||||
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Provision for income taxes
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4,700 | 4,429 | 13,782 | 12,755 | |||||||||||||||
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Net income
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$ | 9,627 | $ | 7,841 | $ | 28,019 | $ | 22,243 | |||||||||||
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Earnings Per Share:
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Basic earnings per share
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$ | 0.35 | $ | 0.31 | $ | 1.07 | $ | 0.88 | |||||||||||
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Diluted earnings per share
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$ | 0.33 | $ | 0.29 | $ | 0.99 | $ | 0.83 | |||||||||||
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Weighted average number of common shares
outstanding:
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Basic
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27,124 | 25,125 | 25,973 | 25,129 | |||||||||||||||
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Diluted
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29,438 | 27,176 | 28,197 | 26,954 | |||||||||||||||
See accompanying condensed notes to consolidated financial statements
3
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
| For the Nine Months Ended June 30, 2003 and 2002 | ||||||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||
| Comprehensive | Total | |||||||||||||||||||||||||||||||
| Preferred | Common | Paid-in | Retained | Treasury | Deferred | Income | Stockholders’ | |||||||||||||||||||||||||
| Stock | Stock | Capital | Earnings | Stock | Compensation | Net of Tax | Equity | |||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||
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Balance at September 30, 2002
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$ | 6 | $ | 255 | $ | 253,511 | $77,566 | $ | (3,322 | ) | $ | 528 | $ | 16,605 | $ | 345,149 | ||||||||||||||||
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Comprehensive income:
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Net income for the nine months ended
June 30, 2003
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— | — | — | 28,019 | — | — | — | 28,019 | ||||||||||||||||||||||||
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Other comprehensive income, net of tax
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— | — | — | — | — | — | 195 | 195 | ||||||||||||||||||||||||
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Total comprehensive income
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— | — | — | — | — | — | — | & | ||||||||||||||||||||||||