UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 31, 2002
or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No. 1-13921
BankUnited Financial Corporation
(Exact name of registrant as specified in its charter)
| Florida (State or other jurisdiction of incorporation or organization) |
65-0377773 (I.R.S. Employer Identification Number) |
255 Alhambra Circle, Coral Gables 33134
(Address of principal executive offices) (Zip Code)
(305) 569-2000
(Registrant’s telephone number, including area code)
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 x No ¨
The number of shares outstanding of the registrant’s common stock at the close of business on February 6, 2003 was 24,964,025 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 33 pages.
The Index to Exhibits appears on page 33.
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10-Q REPORT FOR THE QUARTER ENDED DECEMBER 31, 2002
| Page No. | ||
| PART I—FINANCIAL INFORMATION |
||
| Item 1. Financial Statements |
||
| 3 | ||
| 4 | ||
| 5 | ||
| Condensed Notes to Consolidated Financial Statements (unaudited) |
6 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk |
27 | |
| 28 | ||
| PART II—OTHER INFORMATION |
||
| 29 | ||
| 29 | ||
| 30 |
2
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
| December 31, |
September 30, 2002 |
|||||||
| (Dollars in thousands, except share data) |
||||||||
| Assets: |
||||||||
| Cash |
$ |
68,222 |
|
$ |
48,609 |
| ||
| Federal Home Loan Bank overnight deposits |
|
19,807 |
|
|
419,946 |
| ||
| Federal funds sold and securities purchased under agreements to resell |
|
1,746 |
|
|
3,735 |
| ||
| Investments available for sale, at fair value |
|
199,960 |
|
|
171,585 |
| ||
| Mortgage-backed securities available for sale, at fair value |
|
1,778,248 |
|
|
1,136,634 |
| ||
| Loans receivable, net |
|
3,715,404 |
|
|
3,713,365 |
| ||
| Mortgage loans held for sale (fair value of approximately $297,325 and $284,239 at December 31, 2002 and September 30, 2002, respectively) |
|
291,594 |
|
|
278,759 |
| ||
| Other earning assets |
|
90,023 |
|
|
90,724 |
| ||
| Office properties and equipment, net |
|
17,502 |
|
|
17,744 |
| ||
| Real estate owned |
|
3,239 |
|
|
3,003 |
| ||
| Accrued interest receivable |
|
30,356 |
|
|
28,861 |
| ||
| Mortgage servicing rights |
|
8,536 |
|
|
6,746 |
| ||
| Goodwill |
|
28,353 |
|
|
28,353 |
| ||
| Bank-owned life insurance |
|
73,937 |
|
|
53,180 |
| ||
| Prepaid expenses and other assets |
|
45,406 |
|
|
27,304 |
| ||
| Total assets |
$ |
6,372,333 |
|
$ |
6,028,548 |
| ||
| Liabilities and Stockholders’ Equity: |
||||||||
| Liabilities: |
||||||||
| Deposits |
$ |
3,026,527 |
|
$ |
2,976,171 |
| ||
| Securities sold under agreements to repurchase |
|
546,262 |
|
|
355,042 |
| ||
| Advances from Federal Home Loan Bank |
|
1,792,133 |
|
|
1,806,089 |
| ||
| Senior notes |
|
200,000 |
|
|
200,000 |
| ||
| Company obligated mandatorily redeemable trust preferred securities of subsidiary trusts holding solely junior subordinated deferrable interest debentures of BankUnited |
|
290,016 |
|
|
253,761 |
| ||
| Interest payable (primarily on deposits and advances from Federal Home Loan Bank) |
|
16,328 |
|
|
13,938 |
| ||
| Advance payments by borrowers for taxes and insurance |
|
11,251 |
|
|
40,593 |
| ||
| Liability for securities purchased pending settlement |
|
102,305 |
|
|
— |
| ||
| Accrued expenses and other liabilities |
|
33,488 |
|
|
37,805 |
| ||
| Total liabilities |
|
6,018,310 |
|
|
5,683,399 |
| ||
| Stockholders’ Equity: |
||||||||
| Preferred Stock, Authorized shares—10,000,000. Issued shares—Noncumulative Convertible Preferred Stock, Series B—574,007; Outstanding shares—Noncumulative Convertible Preferred Stock Series B—547,287 |
|
7 |
|
|
6 |
| ||
| Class A Common Stock, $0.01 par value. Authorized shares—60,000,000. Issued shares—25,144,583 and 25,008,515 at December 31, 2002 and September 30, 2002, respectively. Outstanding shares—24,811,583 and 24,675,515 at December 31, 2002 and September 30, 2002, respectively |
||||||||
|
|
251 |
|
|
250 |
| |||
| Class B Common Stock, $0.01 par value. Authorized shares—3,000,000. Issued shares—580,262 and 536,562, at December 31, 2002 and September 30, 2002, respectively. Outstanding shares—536,562 at December 31, 2002 and September 30, 2002. |
|
6 |
|
|
5 |
| ||
| Additional paid-in capital |
|
255,265 |
|
|
253,511 |
| ||
| Retained earnings |
|
86,273 |
|
|
77,566 |
| ||
| Common Treasury Stock—376,700 and 333,000 shares at December 31, 2002 and September 30, 2002, respectively |
|
(3,279 |
) |
|
(2,794 |
) | ||
| Preferred Treasury Stock—26,720 shares |
|
(528 |
) |
|
(528 |
) | ||
| Deferred compensation and option shares |
|
697 |
|
|
528 |
| ||
| Accumulated other comprehensive income |
|
15,331 |
|
|
16,605 |
| ||
| Total stockholders’ equity |
|
354,023 |
|
|
345,149 |
| ||
| Total liabilities and stockholders’ equity |
$ |
6,372,333 |
|
$ |
6,028,548 |
| ||
See accompanying condensed notes to consolidated financial statements
3
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Three Months Ended December 31, |
|||||||
| 2002 |
2001 |
||||||
| (Dollars and shares in thousands, except per share data) |
|||||||
| Interest income: |
|||||||
| Interest and fees on loans |
$ |
61,213 |
$ |
66,087 |
| ||
| Interest on mortgage-backed securities |
|
13,671 |
|
13,450 |
| ||
| Interest on short-term investments |
|
117 |
|
151 |
| ||
| Interest and dividends on long-term investments and other interest-earning assets |
|
3,259 |
|
2,957 |
| ||
| Total interest income |
|
78,260 |
|
82,645 |
| ||
| Interest expense: |
|||||||
| Interest on deposits |
|
22,644 |
|
28,921 |
| ||
| Interest on borrowings |
|
23,132 |
|
23,235 |
| ||
| Preferred dividends of subsidiary trusts |
|
4,876 |
|
4,929 |
| ||
| Total interest expense |
|
50,652 |
|
57,085 |
| ||
| Net interest income before provision for loan losses |
|
27,608 |
|
25,560 |
| ||
| Provision for loan losses |
|
1,300 |
|
2,950 |
| ||
| Net interest income after provision for loan losses |
|
26,308 |
|
22,610 |
| ||
| Non-interest income: |
|||||||
| Service fees on deposits |
|
1,029 |
|
816 |
| ||
| Service fees on loans |
|
252 |
|
421 |
| ||
| Service fees other |
|
292 |
|
202 |
| ||
| Insurance and investment services income |
|
694 |
|
922 |
| ||
| Net gain on sale of investments and mortgage-backed securities |
|
597 |
|
830 |
| ||
| Net gain on sale of loans and other assets |
|
2,066 |
|
591 |
| ||
| Other |
|
810 |
|
731 |
| ||
| Total non-interest income |
|
5,740 |
|
4,513 |
| ||
| Non-interest expenses: |
|||||||
| Employee compensation and benefits |
|
8,661 |
|
6,778 |
| ||
| Occupancy and equipment |
|
2,948 |
|
2,624 |
| ||
| Telecommunications and data processing |
|
1,210 |
|
1,007 |
| ||
| Advertising and promotion expense |
|
1,187 |
|
1,555 |
| ||
| Professional fees-legal and accounting |
|
1,147 |
|
1,015 |
| ||
| Loan servicing expense |
|
485 |
|
923 |
| ||
| Insurance |
|
280 |
|
248 |
| ||
| Other operating expenses |
|
2,317 |
|
2,325 |
| ||
| Total non-interest expenses |
|
18,235 |
|
16,475 |
| ||
| Income before income taxes |
|
13,813 |
|
10,648 |
| ||
| Provision for income taxes |
|
5,027 |
|
3,711 |
| ||
| Net income |
$ |
8,786 |
$ |
6,937 |
| ||
| Earnings Per Share: |
|||||||
| Basic earnings per share |
$ |
0.34 |
$ |
0.27 |
| ||
| Diluted earnings per share |
$ |
0.32 |
$ |
0.26 |
| ||
| Weighted average number of common shares outstanding: |
|||||||
| Basic |
|
25,260 |
|
25,067 |
| ||
| Diluted |
|||||||