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, 2003
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 | 65-0377773 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
255 Alhambra Circle, Coral Gables, Florida 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares outstanding of the registrant’s common stock at the close of business on January 27, 2004 was 29,366,139 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 28 pages.
The Index to Exhibits appears on page 27.
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10-Q REPORT FOR THE QUARTER ENDED DECEMBER 31, 2003
| Page No. | ||
| PART I—FINANCIAL INFORMATION | ||
| Item 1. Financial Statements |
||
| 3 | ||
| 4 | ||
| 5 | ||
| 6 | ||
| Condensed Notes to Consolidated Financial Statements (unaudited) |
7 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
24 | |
| 26 | ||
| PART II—OTHER INFORMATION | ||
| 27 | ||
| 27 | ||
2
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
| December 31, 2003 |
September 30, 2003 |
|||||||
| (Dollars in thousands, except share data) |
||||||||
| Assets: | ||||||||
| Cash |
$ | 30,619 | $ | 28,810 | ||||
| Federal Home Loan Bank overnight deposits |
147,323 | 195,365 | ||||||
| Federal funds sold |
6,049 | 2,723 | ||||||
| Investments available for sale, at fair value |
306,583 | 296,677 | ||||||
| Mortgage-backed securities available for sale, at fair value |
2,092,409 | 2,064,981 | ||||||
| Mortgage loans held for sale |
145,701 | 286,796 | ||||||
| Loans held in portfolio |
4,173,786 | 3,925,077 | ||||||
| Add: Unearned discounts, premiums and deferred fees, net |
40,696 | 36,806 | ||||||
| Less: Allowance for loan losses |
(22,125 | ) | (22,295 | ) | ||||
| Loans held in portfolio, net |
4,192,357 | 3,939,588 | ||||||
| FHLB stock and other earning assets |
123,180 | 123,431 | ||||||
| Office properties and equipment, net |
21,308 | 20,278 | ||||||
| Real estate owned |
3,414 | 4,290 | ||||||
| Accrued interest receivable |
28,559 | 28,452 | ||||||
| Mortgage servicing rights |
13,880 | 12,930 | ||||||
| Goodwill |
28,353 | 28,353 | ||||||
| Bank-owned life insurance |
85,205 | 84,155 | ||||||
| Prepaid expenses and other assets |
22,808 | 28,314 | ||||||
| Total assets |
$ | 7,247,748 | $ | 7,145,143 | ||||
| Liabilities and Stockholders’ Equity: | ||||||||
| Liabilities: |
||||||||
| Deposits |
$ | 3,283,936 | $ | 3,236,106 | ||||
| Securities sold under agreements to repurchase |
620,452 | 517,297 | ||||||
| Advances from Federal Home Loan Bank |
2,455,297 | 2,460,291 | ||||||
| Senior notes |
200,000 | 200,000 | ||||||
| Trust preferred securities and subordinated debentures |
167,726 | 162,219 | ||||||
| Interest payable |
15,907 | 14,331 | ||||||
| Advance payments by borrowers for taxes and insurance |
14,207 | 47,081 | ||||||
| Accrued expenses and other liabilities |
36,146 | 60,445 | ||||||
| Total liabilities |
6,793,671 | 6,697,770 | ||||||
| Commitments and Contingencies (See notes 7 and 8) |
||||||||
| Stockholders’ Equity: |
||||||||
| Preferred Stock, $0.01 par value |
8 | 7 | ||||||
| Authorized shares—10,000,000 |
(528 | ) | (528 | ) | ||||
| Class A common stock, $0.01 par value |
297 | 295 | ||||||
| Authorized shares—60,000,000 |
(2,891 | ) | (2,891 | ) | ||||
| Class B common stock, $0.1 par value |
6 | 6 | ||||||
| Authorized shares—3,000,000 |
(1,011 | ) | (485 | ) | ||||
| Additional paid-in capital |
330,493 | 328,017 | ||||||
| Retained earnings |
127,839 | 116,370 | ||||||
| Deferred compensation |
1,011 | 794 | ||||||
| Accumulated other comprehensive (loss) income |
(1,147 | ) | 5,788 | |||||
| Total stockholders’ equity |
454,077 | 447,373 | ||||||
| Total liabilities and stockholders’ equity |
$ | 7,247,748 | $ | 7,145,143 | ||||
See accompanying condensed notes to consolidated financial statements
3
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| For the Three Months Ended December 31, |
||||||||
| 2003 |
2002 |
|||||||
| (Dollars and shares in thousands, except per share data) |
||||||||
| Interest income: |
||||||||
| Interest and fees on loans |
$ | 54,361 | $ | 61,213 | ||||
| Interest on mortgage-backed securities |
19,797 | 13,671 | ||||||
| Interest on short-term investments |
92 | 117 | ||||||
| Interest and dividends on long-term investments and other interest-earning assets |
4,523 | 3,259 | ||||||
| Total interest income |
78,773 | 78,260 | ||||||
| Interest expense: |
||||||||
| Interest on deposits |
18,270 | 22,644 | ||||||
| Interest on borrowings |
26,000 | 23,132 | ||||||
| Preferred dividends of subsidiary trusts |
2,424 | 4,876 | ||||||
| Total interest expense |
46,694 | 50,652 | ||||||
| Net interest income before provision for loan losses |
32,079 | 27,608 | ||||||
| Provision for loan losses |
975 | 1,300 | ||||||
| Net interest income after provision for loan losses |
31,104 | 26,308 | ||||||
| Non-interest income: |
||||||||
| Loan servicing fees, net of amortization |
(773 | ) | (792 | ) | ||||
| Loan fees |
939 | 1,043 | ||||||
| Deposit fees |
1,119 | 1,029 | ||||||
| Other fees |
480 | 293 | ||||||
| Net (loss) gain on sale of investments and mortgage-backed securities |
(595 | ) | 597 | |||||
| Net gain on sale of loans and other assets |
1,752 | 2,066 | ||||||
| Insurance and investment services income |
942 | 694 | ||||||
| Other |
1,198 | 810 | ||||||
| Total non-interest income |
5,062 | 5,740 | ||||||
| Non-interest expenses: |
||||||||
| Employee compensation and benefits |
10,061 | 8,661 | ||||||
| Occupancy and equipment |
3,704 | 2,948 | ||||||
| Telecommunications and data processing |
1,384 | 1,210 | ||||||
| Advertising and promotion expense |
1,151 | 1,187 | ||||||
| Professional fees-legal and accounting |
1,320 | 1,147 | ||||||
| Loan closing fees |
743 | 826 | ||||||
| Loan servicing expense |
156 | 485 | ||||||
| Postage and courier |
422 | 317 | ||||||
| Insurance |
357 | 280 | ||||||
| Other operating expenses |
(185 | ) | 1,174 | |||||
| Total non-interest expenses |
19,113 | 18,235 | ||||||
| Income before income taxes |
17,053 | 13,813 | ||||||
| Provision for income taxes |
5,503 | 5,027 | ||||||
| Net income |
$ | 11,550 | $ | 8,786 | ||||
| Earnings Per Share: |
||||||||
| Basic earnings per share |
$ | 0.39 | $ | 0.34 | ||||
| Diluted earnings per share |
$ | 0.36 | $ | 0.32 | ||||
| Weighted average number of common shares outstanding: |
||||||||
| Basic |
29,686 | 25,260 | ||||||
| Diluted |
32,238 | 27,435 | ||||||
See accompanying condensed notes to consolidated financial statements
4
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
| For the Three Months Ended December 31, 2003 and 2002 |
||||||||||||||||||||||||||||
| Preferred Stock |
Common Stock |
Paid-in Capital |
Retained Earnings |
Treasury Stock |
Deferred Compensation |
Accumulated Net of Tax |
Total Stockholders’ Equity |
|||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||
| Balance at September 30, 2003 |
$ | 7 | $ | 301 | $ | 328,017 | $ | 116,370 | $ | (3,904 | ) | $ | 794 | $ | 5,788 | $ | 447,373 | |||||||||||
| Comprehensive income: |
||||||||||||||||||||||||||||
| Net income for the three months ended December 31, 2003 |
11,550 | — | — | — | 11,550 | |||||||||||||||||||||||
| Other comprehensive loss, net of tax |
— | — | — | — | — | — | (6,935 | ) | (6,935 | ) | ||||||||||||||||||
| Total comprehensive income |
— | — | — | — | — | — | — | 4,615 | ||||||||||||||||||||
| Payment of preferred stock dividends |
— | — | (81 | ) | — | — | — | (81 | ) | |||||||||||||||||||
| Deferral of compensation |
— | — | — | — | — | 217 | — | 217 | ||||||||||||||||||||
| Purchase of stock |
— | — | — | — | (526 | ) | — | — | (526 | ) | ||||||||||||||||||
| Stock options and restricted stock |
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