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

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Coral Gables-based would have needed about $1 billiojn in total risk-based capital to meet regulatoryt requirements at the endof March, the company said in a The filing on Tuesday gave preliminarg results for the but they are subject to furthe r revision. The bank lost an estimated $443.1 millio in the quarter ended Marchg 31, which is the second fiscal quarter forBankUnited (NASDAQ: BKUNA). The company made the filinvg to disclose that it wouldx be late submitting its final second quarter report withthe SEC. BankUnited said its financialk results from the quarterended Sept. 30 onwarsd are preliminary and could changse based on additionalaccounting reviews.
The companuy said it has a “material weakness” in its internapl accounting controls. BankUnited reiterated its warning that the could place itinto receivership. Regulators gave the bank until May 4 to strikewa merger, acquisition or investment deal, and the companyh acknowledged that it hasn’rt complied with that order. Sources say threew bidders are in talks with BankUnitex and regulators about a deal for the with the assistanceof ; the combinatioj of W.L. Ross, and ; and a group involving the J.C. Flowers Co. hedge fund. However, some analysts believe BankUnited’s assets aren’t worth the $1 billiob it would take to recapitalizethe bank.
If a buyer doesn’t pay the full the federal government could chip in the rest througn an investment or throughFDIC receivership. “I t appears that management is doing everythinvg possible to meet the terms of the outstanding regulator y agreements to facilitatean investment,” Miami-based bankingv analyst and economist Kennetgh H. Thomas said. “Thw 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 capitapl for more than a year.
“Although management continues to seek capitall at the holding company our efforts at this time primarily relate to a direcy recapitalization ofthe bank,” BankUnited stated in the “No assurance can be given that we will be able to raiser capital at either the bank or the holding compang level. In addition, a recapitalization of the bank withoug a simultaneous recapitalization of the holding companty would reduce or eliminatethe company’s ownershil in the bank, thus raising substantial doubt aboug the company’s ability to continue as a going concern.” The bank reported that it has sufficient liquidity to meet needs.
Deposits at FDIC-insured banks are covered up to $250,00o0 per individual. Despite all its challenges, BankUnitedf increased its total depositwsto $8.7 billion as of March 31, up from $8.544 billion at year-end. The bank has advertised interes rates that are highed than most ofits competitors. BankUnited had $13.134 billion in assets and negative equity capitalof $505.y6 million on March 31, compared to $13.76 billiom in assets and negative equity capitaol of $13.4 million on Dec. 31. That mean s its federally mandated capitall ratios werealso negative.
Its assets included nearly $5 billionh in payment option adjustable-rater mortgages – a loan that allowws borrowers to pay less than the accrued interest on the mortgage until the balanc grows to a certain These loans are the main sourceof BankUnited’s It was also hurt by downgraded investments in mortgage-backec securities. The bank holding company’s $443.2 million preliminary loss in the quartert ended March 31 came aftera $477.5t million preliminary loss in the previous quarter. The bank’w losses in the most recent quarter came mostlh froma $295.
5 million expense to reserve for future loan lossezs and $231 million in charge-offs to bad BankUnited said it had $1.98 billion in nonperforming representing 19.4 percent of its tota l loans, as of March 31. That’s up from $1.63 billion in nonperformint loans, or 15.1 percent of its total at year-end. The bank also reported holding $154.1 million in repossessed property onMarch 31, up from $93.7 million in the previous quarter.