Magazine article American Banker

4Q Earnings: Fla.'s BankUnited Changing Its Mix after $25.5M Loss

Magazine article American Banker

4Q Earnings: Fla.'s BankUnited Changing Its Mix after $25.5M Loss

Article excerpt

Mauled by the mortgage crisis, BankUnited Financial Corp. of Coral Gables, Fla., plans to cut expenses and overhaul its strategy by doing more commercial lending and selling more nonmortgage products through its branches.

The thrift company expects "to reduce in size and to some degree dependence on the residential area as we refocus our direction to the retail commercial bank," Alfred Camner, its chairman and chief executive, said in an interview Thursday after it reported a loss for its fiscal first quarter ended Dec. 31.

"This will allow us ... to really devote a lot more resources and attention to growing and building this franchise on the commercial side."

Ramiro Ortiz, BankUnited's president, said it would concentrate this quarter on identifying areas where it can trim expenses and generate growth. It would like to cut expenses, which were $201 million in fiscal 2007, by 9% in the current fiscal year, he said. "Everything is on the table."

The $14.4 billion-asset BankUnited said it lost $25.5 million for the three months that ended Dec. 31. The per-share loss of 73 cents was 60 cents more than analysts had anticipated

After reporting the first-quarter results, BankUnited announced a plan to shrink its wholesale residential mortgage business. On Thursday it closed four of its nine sales offices and consolidated nine operations centers into three. It said the housing crisis led to higher credit costs during BankUnited's first quarter.

A heavy concentration of option adjustable-rate mortgage loans - which on Dec. 31 made up 70% of its residential loans and 59% of its $12.5 billion loan book overall - has hobbled BankUnited for several quarters. Last year its shares lost more than 80%. However, last week's bank stock rally, paired with the company's plans to change its business mix, gave its shares a 6% boost Friday, though earlier they had been up as much as 23%. …

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