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

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Coral Gables-based would have needed abou t $1 billion in total risk-based capita l to meet regulatory requirements at the end of the company said in a The filing on Tuesday gave preliminary results for the but they are subject tofurther revision. The bank lost an estimatedf $443.1 million in the quarter endedMarcu 31, which is the secondf fiscal quarter for BankUnited (NASDAQ: BKUNA). The company made the filing to disclosw that it would be late submittingv its final second quarter report withthe SEC. BankUnited said its financialp results from the quarterendeed Sept. 30 onward are preliminar and could change based on additionalaccountingb reviews.
The company said it has a “materiak weakness” in its internal accountin g controls. BankUnited reiterated its warning that the could placew itinto receivership. Regulators gave the bank until May 4 to strike a acquisition orinvestment deal, and the company acknowledged that it hasn’gt complied with that order. Sources say three bidderx are in talks with BankUnitee and regulators about a deal forthe bank: with the assistancee of ; the combination of W.L. Ross, and ; and a groupp involving the J.C. Flowerds & Co. hedge fund.
However, some analysts believe BankUnited’s assetse aren’t worth the $1 billion it woul take to recapitalize the If abuyer doesn’t pay the full amount, the federal governmenr could chip in the rest through an investment or through FDIC “It appears that management is doing everything possible to meet the terms of the outstandintg regulatory agreements to facilitate an Miami-based banking analyst and economist Kennetyh H. Thomas said. “The priority now is to get a resolution of this situationh ASAP with as much private capitalas possible.
” In its SEC BankUnited noted that it has been trying to raise capital for more than a “Although management continues to seek capitapl at the holding compant level, our efforts at this time primarilu relate to a direct recapitalization of the BankUnited stated in the filing. “No assuranc e can be given that we will be able to raisde capital at either the bank or the holdingcompanty level.
In addition, a recapitalization of the bank without a simultaneous recapitalizatiom of the holding company would reduce or eliminatethe company’zs ownership in the thus raising substantial doubt about the company’s abilitgy to continue as a going The bank reported that it has sufficient liquidity to meet needs. Deposits at FDIC-insured bankxs are covered up to $250,000 per Despite all its challenges, BankUnited increase d its total depositsto $8.7 billion as of March 31, up from $8.5e4 billion at year-end. The bank has advertisee interest rates that are higher than most ofits competitors. BankUniteds had $13.13 billion in assetsw and negative equity capitalof $505.
6 millionb on March 31, compared to $13.76 billion in assets and negativre equity capital of $13.4 milliojn on Dec. 31. That means its federally mandateds capital ratios werealso negative. Its assetsx included nearly $5 billion in payment optiobn adjustable-rate mortgages – a loan that allowws borrowers to pay less than the accrued interesgt on the mortgage until the balance growes to acertain point. These loans are the main sourceof BankUnited’s troubles. It was also hurt by downgrade investmentsin mortgage-backed securities. The bank holdintg company’s $443.1 million preliminary loss in the quarter endedx March 31 came aftera $477.
5 million preliminary loss in the previoud quarter. The bank’s losses in the most recent quartefr came mostly froma $295.5 million expense to reserve for futurwe loan losses and $231 million in charge-offs to bad BankUnited said it had $1.98 billion in nonperforminvg loans, representing 19.4 percent of its total loans, as of Marcj 31. That’s up from $1.63 billion in nonperforming loans, or 15.1 percentr of its total loans, at year-end. The bank also reported holdingb $154.2 million in repossessed property onMarchb 31, up from $93.6 million in the previou s quarter.