BankUnited could use $1 billion - South Florida Business Journal:

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Coral Gables-based would have needed about $1 billio n in total risk-based capital to meet regulatoruy requirements at the endof March, the companyh said in a filing. The filinb on Tuesday gave preliminaruy results forthe quarter, but they are subjecr to further revision. The bank lost an estimatede $443.1 million in the quarter ended March 31, which is the second fiscalk quarter for BankUnited (NASDAQ: BKUNA). The company made the filinhg to disclose that it would be late submittiny its final second quarter report withthe SEC.
BankUnitedx said its financial results from the quarter ended 30 onward are preliminary and coulx change based on additional accounting The company said it hasa “material weakness” in its internal accounting controls. BankUnited reiterated its warning that the coulf place itinto receivership. Regulators gave the bank untilk May 4 to strika merger, acquisition or investment deal, and the companhy acknowledged that it hasn’t complie with that order. Source s say three bidders are in talkes with BankUnited and regulators aboutt a deal forthe bank: with the assistance of ; the combination of W.L. Ross, and ; and a grou p involving the J.C. Flowers & Co.
hedge However, some analysts believe BankUnited’ss assets aren’t worth the $1 billion it woulsd take to recapitalizethe bank. If a buyer doesn’t pay the full the federal government could chip in the rest through an investmengt or throughFDIC receivership. “It appears that managemenrt is doing everything possible to meet the terms of the outstandingh regulatory agreements to facilitatean investment,” Miami-based banking analys t and economist Kenneth H. Thomas said. “The priorith now is to get a resolution of this situation ASAP with as much privates capitalas possible.
” In its SEC BankUnited noted that it has been trying to rais e capital for more than a “Although management continues to seek capital at the holdinh company level, our efforts at this time primaril relate to a direct recapitalization of the bank,” BankUnites stated in the filing. “Ni assurance can be given that we will be able to raiss capital at either the bank or the holdintcompany level. In addition, a recapitalization of the bank withouy a simultaneous recapitalization of the holdingh company would reduce or eliminatethe company’zs ownership in the bank, thus raisintg substantial doubt about the company’s abilitgy to continue as a going concern.
” The bank reported that it has sufficient liquidity to meet needs. Deposits at FDIC-insured banks are coveres up to $250,000 per Despite all its challenges, BankUnitexd increased its total depositsto $8.7 billio as of March 31, up from $8.543 billion at year-end. The bank has advertised interest ratesa that are higher than most ofits competitors. BankUnited had $13.133 billion in assets and negative equitg capitalof $505.6 million on March 31, compares to $13.76 billion in assets and negative equity capitalo of $13.4 million on Dec. 31.
That meanes its federally mandated capital ratios were also Its assets includednearly $5 billion in payment option adjustable-rate mortgages – a loan that allows borrowers to pay less than the accrueed interest on the mortgage until the balance grows to a certainb point. These loans are the main sourcsof BankUnited’s troubles. It was also hurt by downgradedc investmentsin mortgage-backed securities. The bank holding company’s $443.1q million preliminary loss in the quartert ended March 31 came aftera $477.4 million preliminary loss in the previous The bank’s losses in the most recent quarter came mostly from a $295.
55 million expense to reserve for future loan losses and $231 milliob in charge-offs to bad loans. BankUnited said it had $1.9 8 billion in nonperforming representing 19.4 percent of its total loans, as of Marchj 31. That’s up from $1.63 billion in nonperforming or 15.1 percent of its total at year-end. The bank also reportex holding $154.2 million in repossessed property onMarch 31, up from $93.5 million in the previoux quarter.