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 June 30, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 5-43936
BankUnited Financial Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 65-0377773
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
255 Alhambra Circle, Coral Gables 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 [ ]
The number of shares outstanding of the registrant's common stock at the close
of business on August 11, 2000 was 17,752,575 shares of Class A Common Stock,
$.01 par value, and 446,262 shares of Class B Common Stock, $.01 par value.
This Form 10-Q contains 34 pages.
The Index to Exhibits appears on page 33.
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
Form 10-Q Report for the Quarter Ended June 30, 2000
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition as of
June 30, 2000 (unaudited) and September 30, 1999 3
Consolidated Statements of Operations (unaudited)
for the Three and Nine Months Ended June 30, 2000
and June 30, 1999 4
Consolidated Statement of Stockholders' Equity
(unaudited) for the Nine Months Ended June 30, 2000 5
Consolidated Statements of Cash Flows (unaudited)
for the Nine Months Ended June 30, 2000
and June 30, 1999 6
Condensed Notes to Consolidated Financial
Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures about Market Risk 29
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 31
</TABLE>
2
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30, 2000 September 30,
(Unaudited) 1999
-------------------------------------------------------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C>
Assets
Cash $ 30,346 $ 26,123
Federal Home Loan Bank overnight deposits 177,105 50,412
Securities purchased under agreements to resell 20,000 150,000
Tax certificates (net of reserves of $989 at June 30, 2000 and
$1,168 at September 30, 1999) 7,807 14,815
Investments held to maturity (market value of approximately
$4,929 at June 30, 2000 and $4,984 at September 30, 1999) 5,062 5,058
Investments available for sale, at market 15,951 20,001
Mortgage-backed securities, held to maturity (market value
of approximately $226,495 at June 30, 2000
and $198,785 at September 30, 1999) 231,361 202,839
Mortgage-backed securities available for sale, at market 124,386 144,385
Loans receivable, net 3,323,008 2,899,231
Mortgage loans held for sale (market value of approximately $333,626
at June 30, 2000 and $403,785 at September 30, 1999) 333,558 403,635
Other interest earning assets 60,426 54,927
Office properties and equipment, net 15,903 15,644
Real estate owned 1,480 3,548
Accrued interest receivable 26,263 24,768
Mortgage servicing rights, net 6,637 7,820
Goodwill, net 30,300 31,465
Prepaid expenses and other assets 28,578 23,800
---------- ----------
Total assets $4,438,171 $4,078,471
========== ==========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $2,540,061 $2,279,798
Securities sold under agreements to repurchase 15,246 31,701
Advances from Federal Home Loan Bank 1,206,426 1,096,447
Senior notes 200,000 200,000
Company obligated mandatorily redeemable trust preferred securities of
subsidiary trusts holding solely junior subordinated deferrable interest
debentures of BankUnited 214,593 218,500
Interest payable (primarily on deposits and advances from Federal Home
Loan Bank) 12,609 10,205
Advance payments by borrowers for taxes and insurance 18,510 19,616
Accrued expenses and other liabilities 32,706 32,067
---------- ----------
Total liabilities 4,240,151 3,888,334
---------- ----------
Commitments and Contingencies (Note 5)
Stockholders' equity:
Preferred stock, Series B and Series 9%, $0.01 par value. Authorized shares -
10,000,000; issued shares- 992,938 at June 30, 2000 and September 30, 1999;
outstanding shares-991,938 and 992,938 at June 30, 2000 and September 30, 1999 10 10
Class A Common Stock, $0.01 par value. Authorized shares - 30,000,000;
issued shares - 18,077,575 at June 30, 2000 and 18,049,430 at September 30,
1999; outstanding shares - 17,744,575 at June 30, 2000
and 17,866,430 at September 30, 1999 181 180
Class B Common Stock, $.01 par value. Authorized shares - 3,000,000;
issued and outstanding shares - 446,262 and 458,467 at June 30, 2000
and September 30, 1999 5 5
Additional paid-in capital 181,599 181,335
Retained earnings 25,566 14,081
Treasury stock (2,801) (1,684)
Accumulated other comprehensive loss, net of tax (6,540) (3,790)
---------- ----------
Total stockholders' equity 198,020 190,137
---------- ----------
Total liabilities and stockholders' equity $4,438,171 $4,078,471
========== ==========
</TABLE>
See Condensed Notes to Consolidated Financial Statements
3
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------------- ------------------
(Unaudited)
2000 1999 2000 1999
----------- ----------- ----------- -------
(in thousands, except earnings per share)
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 67,310 $ 51,462 $ 191,586 $ 142,585
Interest on mortgage-backed securities 6,439 5,418 18,679 12,572
Interest on short-term investments 424 3,009 1,276 6,670
Interest and dividends on long-term investments
and other earning assets 1,707 1,681 4,928 6,141
----------- ----------- ----------- -----------
Total interest income 75,880 61,570 216,469 167,968
----------- ----------- ----------- -----------
Interest expense:
Interest on deposits 32,265 25,715 90,104 80,250
Interest on borrowings 18,782 14,676 52,203 44,318
Preferred dividends of trust subsidiaries 5,199 5,288 15,701 15,865
----------- ----------- ----------- -----------
Total interest expense 56,246 45,679 158,008 140,433
----------- ----------- ----------- -----------
Net interest income before provision for loan losses 19,634 15,891 58,461 27,535
Provision for loan losses 1,000 450 3,200 7,186
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 18,634 15,441 55,261 20,349
----------- ----------- ----------- -----------
Non-interest income:
Service fees, net 1,128 829 3,065 2,905
Other 474 360 1,414 786
----------- ----------- ----------- -----------
Total non-interest income 1,602 1,189 4,479 3,691
----------- ----------- ----------- -----------
Non-interest expenses:
Employee compensation and benefits 5,403 3,983 15,497 11,494
Occupancy and equipment 1,978 1,653 6,123 5,893
Insurance 255 434 929 1,231
Professional fees - legal and accounting 939 620 2,737 1,976
Telecommunication and data processing 713 607 2,137 1,999
Loan servicing expense 1,406 1,449 4,353 4,930
Real estate owned operations (31) 106 (222) 62
Advertising and promotion expense 879 442 2,849 1,020
Amortization of goodwill 388 394 1,165 1,161
Other operating expenses 1,847 1,447 4,950 5,527
----------- ----------- ----------- -----------
Total non-interest expenses 13,777 11,135 40,518 35,293
----------- ----------- ----------- -----------
Income (loss) before income taxes, extraordinary
item and preferred stock dividends 6,459 5,495 19,222 (11,253)
Provision (benefit) for income taxes 2,631 2,164 7,845 (4,050)
----------- ----------- ----------- -----------
Income (loss) before extraordinary item 3,828 3,331 11,377 (7,203)
Extraordinary item, net of taxes 9 - 701 -
----------- ----------- ----------- -----------
Income (loss) before preferred stock dividends 3,837 3,331 12,078 (7,203)
Preferred stock dividends 198 192 593 576
----------- ----------- ----------- -----------
Net income (loss) $ 3,639 $ 3,139 $ 11,485 $ (7,779)
=========== =========== =========== ===========
Earnings (Loss) Per Share:
Basic
Income (loss) before extraordinary item $ 0.20 $ 0.17 $ 0.59 $ (0.43)
Extraordinary item, net of taxes - - 0.04 -
----------- ----------- ----------- -----------
Net income (loss) $ 0.20 $ 0.17 $ 0.63 $ (0.43)
=========== =========== =========== ===========
Diluted
Income (loss) before extraordinary item $ 0.20 $ 0.17 $ 0.58 $ (0.43)
Extraordinary item, net of taxes - - 0.04 -
----------- ----------- ----------- -----------
Net income (loss) $ 0.20 $ 0.17 $ 0.62 $ (0.43)
=========== =========== =========== ===========
Weighted average number of common shares
outstanding during the period:
Basic 18,190 18,413 18,228 18,286
=========== =========== =========== ===========
Diluted 18,689 19,195 18,797 18,286
=========== =========== =========== ===========
</TABLE>
See Condensed Notes to Consolidated Financial Statements
4
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Nine Months Ended June 30, 2000
-----------------------------------------------------
(Unaudited)
Accumulated
Other
Preferred Common Paid-in Retained Treasury Comprehensive
Stock Stock Capital Earnings Stock Loss Total
-------- --------- --------- --------- --------- --------- -------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1999 $ 10 $ 185 $ 181,335 $ 14,081 $ (1,684) $ (3,790) $190,137
Comprehensive income:
Net income - - - 12,078 - - 12,078
Dividends declared on
preferred stock - - - (593) - - (593)
Other comprehensive loss,
net of tax - - - - - (2,750) (2,750)
--------
Total comprehensive income 8,735
Stock issued through the
exercise of options, restricted
stock grants, directors'
compensation and employee
stock grants - 1 230 - - - 231
Treasury stock acquired - - - - (1,117) - (1,117)
Common stock issued through
preferred stock dividends - - 34 - - - 34
-------- --------- --------- --------- --------- --------- --------
Balance, June 30, 2000 $ 10 $ 186 $ 181,599 $ 25,566 $ (2,801) $ (6,540) $198,020
======== ========= ========= ========= ========= ========= ========
</TABLE>
See Condensed Notes to Consolidated Financial Statements
5
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended June 30,
-------------------------------
2000 1999
----------- --------
(Unaudited; in thousands)
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ 12,078 $ (7,203)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Provision for loan losses 3,200 7,186
Provision for losses on tax certificates - 1,148
Depreciation and amortization 2,141 1,749
Adjustments to carrying value of real estate owned 846 806
Amortization of fees, discounts and premiums 2,820 22,791
Amortization of mortgage servicing rights 1,183 1,049
Amortization of goodwill 1,165 1,161
Amortization of issuance costs on senior notes 504 258
Net (gain) loss on sales of loans and mortgage-backed securities (30) 8
Net gain on the sale of real estate owned (511) (123)
Extraordinary gain on repurchase of trust preferred securities (1,105) -
Loans originated for sale - (140,399)
Proceeds from sale of loans 4,261 23,307
(Increase) decrease in accrued interest receivable (1,495) 7,761
Increase in interest payable on deposits and FHLB advances 2,404 4,637
Increase (decrease) in accrued taxes 154 (4,579)
Increase in other liabilities 2,411 3,871
(Increase) decrease in prepaid expenses and other assets (5,122) 14,073
Purchase of mortgage servicing rights - (480)
Other, net 30 664
----------- -----------
Net cash provided by (used in) operating activities 24,934 (62,315)
----------- -----------
Cash Flows from Investing Activities:
Net (increase) decrease in loans (370,018) 7,751
Purchase of investment securities - (2,845)
Purchase of mortgage-backed securities (49,824) (166,205)
Purchase of other interest-earning assets (34,149) (25,749)
Proceeds from repayments of investment securities 2,250 15,000
Proceeds from repayments of mortgage-backed securities 38,808 151,012
Proceeds from repayments of other interest-earning assets 28,650 24,885
Proceeds from the sale of real estate owned 7,413 2,070
Purchases of office properties and equipment (2,430) (3,569)
Net decrease in tax certificates 7,008 21,594
----------- -----------
Net cash (used in) provided by investing activities (372,292) 23,944
----------- -----------
Cash Flows from Financing Activities:
Net increase in deposits 260,263 103,921
Net increase in Federal Home Loan Bank Advances 109,979 19,981
Net decrease in other borrowings (16,455) (120,426)
Proceeds from the issuance of senior notes - 200,000
Capitalized cost for senior notes (310) (2,124)
Net proceeds from issuance of common stock 231 1,159
Repurchase of trust preferred securities (2,652) -
Repurchase of common stock (1,117) -
Dividends paid on preferred stock (559) (489)
(Decrease) increase in advances from borrowers for taxes and insurance (1,106) 30
----------- -----------
Net cash provided by financing activities 348,274 202,052
----------- -----------
Increase in cash and cash equivalents 916 163,681
Cash and cash equivalents at beginning of period 226,535 91,511
----------- -----------
Cash and cash equivalents at end of period $ 227,451 $ 255,192
=========== ===========
Supplemental Disclosures:
Interest paid on deposits and borrowings $ 139,903 $ 135,796
=========== ===========
Transfer of loans to real estate owned $ 5,696 $ 4,339
=========== ===========
Transfer of loans from held for sale to portfolio $ - $ 73,825
=========== ===========
Transfer of loans from portfolio to held for sale $ - $ 288,319
=========== ===========
Income taxes paid $ 6,111 $ -
=========== ===========
</TABLE>
See Condensed Notes to Consolidated Financial Statements
6
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
Condensed Notes To Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements include the
accounts of BankUnited Financial Corporation ("BankUnited") and its
subsidiaries, including BankUnited, FSB (the "Bank"). All significant
intercompany transactions and balances have been eliminated.
The unaudited consolidated financial statements have been prepared in
conformity with Rule 10-01 of Regulation S-X of the Securities and Exchange
Commission and therefore do not include information or footnotes necessary for a
complete presentation of financial position, results of operations and cash
flows in conformity with generally accepted accounting principles ("GAAP").
However, all adjustments (consisting of normal recurring accruals) which, in the
opinion of management, are necessary for a fair presentation of the financial
statements have been included. Operating results for the three-month and nine-
month period ended June 30, 2000 are not necessarily indicative of the results
which may be expected for the year ending September 30, 2000. For further
information, refer to the Consolidated Financial Statements and Notes thereto
included in BankUnited's Annual Report on Form 10-K for the fiscal year ended
September 30, 1999.
Certain prior period amounts have been reclassified to conform to the
June 30, 2000 consolidated financial statements.
7
<PAGE>
2. Earnings Per Share
The following tables reconcile basic and diluted earnings (loss) per
share for the three and nine months ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>
Three Months Nine Months
Ended June 30, Ended June 30,
-------------------------- ---------------------
2000 1999 2000 1999
----------- ----------- ----------- -------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Basic earnings (loss) per share:
Numerator:
Income (loss) after preferred stock dividends
and before extraordinary item...................... $ 3,630 $ 3,139 $ 10,784 $ (7,779)
Extraordinary item................................. 9 - 701 -
----------- ----------- ----------- -----------
Net income (loss).................................... $ 3,639 $ 3,139 $ 11,485 $ (7,779)
=========== =========== =========== ===========
Denominator:
Weighted average common shares outstanding........... 18,190 18,413 18,228 18,286
=========== =========== =========== ===========
Basic earnings (loss) per share before
extraordinary item................................... $ 0.20 $ 0.17 $ 0.59 $ (0.43)
Basic earnings per share from extraordinary item....... - - 0.04 -
----------- ----------- ----------- -----------
Basic earnings (loss) per share........................ $ 0.20 $ 0.17 $ 0.63 $ (0.43)
=========== =========== =========== ===========
Diluted earnings (loss) per share:
Numerator:
Income (loss) after preferred stock dividends
and before extraordinary item...................... $ 3,630 $ 3,139 $ 10,784 $ (7,779)
Plus:
Reduction of preferred stock dividends............. 198 35 593 -
----------- ----------- ----------- -----------
Diluted income (loss) available to common
shareholders before extraordinary item............. 3,828 3,174 11,377 (7,779)
Extraordinary item................................. 9 - 701 -
----------- ----------- ----------- -----------
Diluted net income (loss) available to common
shareholders..................................... $ 3,837 $ 3,174 $ 12,078 $ (7,779)
=========== =========== =========== ===========
Denominator:
Weighted average common shares outstanding........... 18,190 18,413 18,228 18,286
Plus:
Number of common shares from the conversion
of options and warrants (1)...................... 56 399 126 -
Number of common shares from the conversion
of dilutive preferred stock (2).................. 443 383 443 -
----------- ----------- ----------- -----------
Diluted weighted average common shares
outstanding........................................ 18,689 19,195 18,797 18,286
=========== =========== =========== ===========
Diluted earnings (loss) per share before
extraordinary item................................... $ 0.20 $ 0.17 $ 0.58 $ (0.43)
Diluted earnings per share from extraordinary item... - - 0.04 -
----------- ----------- ----------- -----------
Diluted earnings (loss) per share...................... $ 0.20 $ 0.17 $ 0.62 $ (0.43)
=========== =========== =========== ===========
</TABLE>
------------
(1) For the nine months ended June 30, 1999, there were 315,038 common
stock equivalent shares of dilutive options that were not included in
the computation of diluted earnings per share because of their
antidilutive effect.
(2) For the nine months ended June 30, 1999, there were 360,493 common
stock equivalent shares of convertible preferred stock outstanding that
were not included in the computation of diluted earnings per share
because of their antidilutive effect.
8
<PAGE>
3. Capital
In December 1998, the Board of Directors of BankUnited authorized the
purchase from time to time in open market transactions of up to 1,000,000 shares
of BankUnited's Class A Common Stock at such prices as the Executive Committee
deems advantageous. At September 30, 1999, BankUnited had purchased 183,000
shares of its Class A Common Stock. During the nine month period ended June 30,
2000, BankUnited purchased an additional 150,000 shares of its Class A Common
Stock on the open market at a cost of $1.1 million, for a total treasury
position of 333,000 shares at a cost of $2.8 million.
In May 1999, BankUnited's Board of Directors authorized the purchase of
shares of its 9% Noncumulative Perpetual Preferred Stock (the "9% Preferred
Stock") on the open market as deemed appropriate and, if the market is
appropriate, the retirement of the 9% Preferred Stock. During the nine month
period ended June 30, 2000, BankUnited purchased a total of 1,000 shares of its
9% Preferred Stock on the open market at a cost of $7,250.
The Office of Thrift Supervision ("OTS") requires that the Bank meet
minimum regulatory, core and risk-based capital requirements. Currently, the
Bank exceeds all regulatory capital requirements. The Bank's well-capitalized
minimum, actual and excess regulatory capital levels as of June 30, 2000 were as
follows:
<TABLE>
<CAPTION>
Well-Capitalized
Minimum Actual Excess
---------------------- --------------------- ----------------
% of % of % of
Amount Assets Amount Assets Amount Assets
-------- ------ -------- ------ -------- ------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Core Capital $ 218,344 5.0% $ 336,161 7.7% $ 117,817 2.7%
Tier 1 Risk-Based $ 138,146 6.0% $ 336,161 14.6% $ 198,015 8.6%
Risk-Based Capital $ 230,245 10.0% $ 349,050 15.2% $ 118,805 5.2%
</TABLE>
4. Comprehensive Income (Loss)
BankUnited's comprehensive income (loss) includes all items which
comprise net income (loss) plus other comprehensive income (loss) which includes
the unrealized holding gains and losses on available for sale securities. For
the three and nine months ended June 30, 2000 and 1999, BankUnited's other
comprehensive loss was as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended June 30, Ended June 30,
---------------------------- ---------------------------
2000 1999 2000 1999
------------ ----------- ----------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Other comprehensive loss, net of taxes:
Unrealized holding losses arising
during the period.......................... $ (1,322) $ (3,533) $ (2,858) $ (4,731)
Less reclassification adjustment for:
Amortization of unrealized losses on
transferred securities.................. 33 - 108 -
------------ ----------- ----------- ------------
Total other comprehensive loss .................... $ (1,289) $ (3,533) $ (2,750) $ (4,731)
============ ============ ============ =============
</TABLE>
9
<PAGE>
5. Contingencies and Off-Balance Sheet Activities
The Bank currently holds five interest rate cap contracts with a major
Wall Street firm, having an aggregate notional amount of $800.0 million. Each
contract requires the counter-party to pay the Bank quarterly interest payments
based on the notional amount and the difference between the index and the cap
rate, if and when the index exceeds the cap rate, in return for a one-time
payment by the Bank. The indices used in these contracts are the 5-Year Treasury
rate adjusted to a constant maturity (the "5-Year CMT rate"), the 10-Year
Treasury rate adjusted to a constant maturity (the "10-Year CMT rate"), the
5-Year Constant Maturity Swap rate (the "5-Year CMS rate") and the 10-Year
Constant Maturity Swap rate (the "10-Year CMS rate").
The following table sets forth information concerning the interest rate
cap contracts.
<TABLE>
<CAPTION>
Notional Cap Termination
Amount Index Rate Date
-------------- ----------- ----- --------------
<S> <C> <C> <C>
$100.0 million 5-Year CMT 7.50% March 23, 2002
100.0 million 10-Year CMT 7.25% March 23, 2002
100.0 million 5-Year CMS 8.85% March 23, 2003
400.0 million 10-Year CMS 9.35% March 23, 2003
100.0 million 10-Year CMS 8.85% March 23, 2003
--------------
$800.0 million
==============
</TABLE>
The Bank entered into these contracts for the purpose of hedging a
portion of BankUnited's interest rate risk against rising interest rates on
certain borrowings from the Federal Home Loan Bank ("FHLB"). As of June 30,
2000, the 5-Year CMT rate was 6.18%, the 10-Year CMT rate was 6.03%, the 5-Year
CMS rate was 7.21% and the 10-Year CMS rate was 7.26%.
Additionally, the Bank had an interest rate cap contract with a major
Wall Street firm in a notional amount of $60.0 million, which terminated on
April 23, 2000. The contract required the counter-party to pay the Bank
quarterly interest payments based on the notional amount and the difference
between the "3-Month London Inter Bank Offering Rate" (the "LIBOR rate") and
5.90%, when the LIBOR rate exceeded 5.90%, in return for a one-time payment by
the Bank.
The Bank had an interest rate cap contract with another major Wall
Street firm in a notional amount of $75.0 million, which terminated on May 30,
2000. The contract required the counter-party to pay the Bank quarterly interest
payments based on the notional amount and the difference between the LIBOR rate
and 6.10% when the LIBOR rate exceeds 6.10%, in return for a one-time payment by
the Bank.
BankUnited is a party to certain claims and litigation arising in the
ordinary course of business. In the opinion of management, the resolution of
such claims and litigation will not materially affect BankUnited's consolidated
financial position or results of operations.
10
<PAGE>
6. Extraordinary Item
In November 1999, the Board of Directors of BankUnited authorized the
purchase, from time to time, in the open market, or otherwise, of up to 300,000
shares of trust preferred securities issued by its trust subsidiaries (the
"Trust Preferred Securities").
BankUnited purchased 156,299 Trust Preferred Securities at a cost of
$2.7 million for the nine months ended June 30, 2000. As a result of the early
extinguishment of the Trust Preferred Securities which were acquired, the
purchases resulted in extraordinary gains of $0.7 million, net of $0.4 million
in taxes, for the nine months ended June 30, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis and the related financial data
present a review of the consolidated operating results and financial condition
of BankUnited for the three and nine month periods ended June 30, 2000 and 1999.
This discussion and analysis should be read in conjunction with the Consolidated
Financial Statements and Notes thereto contained in BankUnited's Annual Report
on Form 10- K for the year ended September 30, 1999.
This Quarterly Report on Form 10-Q contains forward-looking statements.
Additional written or oral forward-looking statements may be made by BankUnited
from time to time in filings with the Securities and Exchange Commission or
otherwise. Such forward-looking statements are within the meaning of that term
in Section 27A of the Securities Act of 1933, as amended, (the "Securities Act")
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Such statements may include, but not be limited to, projections
of income, borrowing costs, prepayment rates, and plans for future operations or
acquisitions, as well as assumptions relating to the foregoing. The words
"believe," "expect," "anticipate," "estimate," "project," "intend," and similar
expressions identify forward-looking statements that are inherently subject to
risks and uncertainties, some of which cannot be predicted or quantified. Future
events and actual results could differ materially from those set forth in,
contemplated by, or underlying the forward-looking statements.
General
BankUnited is a Florida-incorporated savings and loan holding company
for BankUnited, FSB (the "Bank"). The Bank was founded in 1984 as a savings and
loan association. In 1993, the Bank was converted to a federally chartered
savings bank and became a wholly-owned subsidiary of BankUnited pursuant to a
plan of re-organization approved by the shareholders. BankUnited's principal
business currently consists of the operation of its wholly-owned subsidiary, the
Bank. In addition to managing the business activities of the Bank, BankUnited
invests primarily in U.S. Government and federal agency securities,
mortgage-backed securities and other permitted investments. The Bank's primary
business has traditionally been to attract retail deposits from the general
public and to invest those deposits, together with borrowings, principal
repayments and other funds, primarily in one-to-four family residential mortgage
loans and to a lesser extent, mortgage-backed securities, commercial real estate
loans, multi-family mortgage loans, commercial business loans and consumer
loans. The Bank has also invested in other permitted
11
<PAGE>
investments. The Bank is subject to the regulations of certain federal agencies
and undergoes periodic examinations by those regulatory authorities. References
to BankUnited include the activities of all of its subsidiaries, including the
Bank and its subsidiaries, if the context so requires.
BankUnited's results of operations are dependent primarily on its net
interest income, which is the difference between the interest earned on its
assets, primarily its loan and securities portfolios, and its cost of funds,
which consists of the interest paid on its deposits and borrowings. BankUnited's
results of operations are also affected by its provision for loan losses as well
as non-interest income, non-interest expenses and income tax expense.
Non-interest expenses consist of employee compensation and benefits, occupancy
and equipment, insurance, professional fees, telecommunications and data
processing, loan servicing expense and other operating expenses. The earnings of
BankUnited are also significantly affected by general economic and competitive
conditions, particularly changes in market interest rates and the U.S. Treasury
yield curves, government policies and actions of regulatory authorities.
Third Quarter Highlights
BankUnited reported record third quarter net income of $3.6 million,
for the quarter ending June 30, 2000, up from $3.1 million for the same period
in the prior year. Both basic and diluted earnings were $0.20 per share. Results
for the quarter reflect an increase in non-interest income of $0.4 million to
$1.6 million, up 33.3% from the same prior year period, attributable to
increased sales of non-credit products, uniform application of deposit fees,
loan servicing fees and income derived from the sale of residential real estate
mortgages in the secondary market.
Additionally, non-residential lending originations increased $136.4
million or 194% from the same quarter last year. Nonperforming assets at June
30, 2000 were $22.8 million, a decrease of $5.5 million or 19.4% from $28.3
million as of September 30, 1999.
During the third quarter BankUnited opened its 31st banking office,
located in Sunny Isles Beach, and will open another in downtown Fort Lauderdale
in the fourth quarter of fiscal year 2000. As a result of franchise building
activities, total deposits increased 14% to $2.5 billion from $2.2 billion as of
June 30 of the prior year.
Year 2000
Computer programs which recognize a date using two digits (rather than
four) to define the applicable year may consider a date using "00" as the year
1900 rather than the year 2000, or fail to recognize the year 2000 as a leap
year. This is generally referred to as the "Year 2000 Issue," which may affect
the performance of computer programs, hardware, software and other products with
embedded computer technology that is date sensitive. In preparation for the Year
2000 Issue, BankUnited extensively reviewed, modified and tested its systems
prior to the Year 2000, and has been substantially Year 2000 compliant since
June 30, 1999.
On and after January 1, 2000 and February 29, 2000, BankUnited
conducted extensive tests of its information systems to verify that the systems
correctly recognize the Year 2000 and treat it as a leap year. Additionally,
BankUnited associates have closely monitored computer output for accuracy
subsequent to January 1, 2000 and February 29, 2000. These tests and reviews
have not resulted in any incidents that would materially
12
<PAGE>
impact the operation or financial condition of BankUnited, and BankUnited has
not, as of this date, experienced any significant disruption due to a Year 2000
failure.
Through June 30, 2000, BankUnited incurred approximately $1.9 million
in costs associated with becoming Year 2000 compliant, excluding internal costs.
The costs consisted of approximately $0.7 million for the replacement of
hardware and software, $0.9 million for the write-off of non-compliant hardware
and software and $0.3 million for other incremental costs. BankUnited does not
separately track the internal costs incurred for the Year 2000 project and such
costs are principally the related payroll costs for its information systems
department.
Liquidity and Capital Resources
BankUnited's primary source of funds is cash provided by investing
activities and includes principal and interest payments on loans,
mortgage-backed securities and other securities. For the nine months ended June
30, 2000 and 1999, principal repayments on loans and mortgage-backed securities
and proceeds from maturities of other securities totaled $440.0 million and $1.2
billion, respectively. This comparison reflects the significant acceleration of
prepayments experienced by BankUnited on certain mortgage loans and mortgage
backed securities, which began in the quarter ended June 30, 1998 and continued
through the quarter ended March 31, 1999 due to the decrease in long-term
interest rates. Since the quarter ended June 30, 1999, rising long-term interest
rates have caused the volume of mortgage loan refinancing to decrease, slowing
the prepayment rate of BankUnited's loan portfolio.
BankUnited's primary use of funds in its financing activities has been
the repayment of FHLB advances and other borrowings. Net cash provided by
financing activities during the nine months ended June 30, 2000 was
$348.3 million compared to $202.1 million for the nine months ended June
30, 1999. The overall increase in the sources of funds resulted from the
increase in deposits of $260.3 million.
BankUnited's primary uses of funds in its operating and investing
activities has been the origination and purchase of loans and the purchase of
mortgage-backed securities and other securities. During the nine months ended
June 30, 2000, BankUnited's loan originations totaled $753.0 million,
loan purchases totaled $5.5 million and purchases of mortgage-backed securities
and other securities totaled $52.7 million. For the same period in 1999,
BankUnited's loan originations totaled $479.2 million, loan purchases totaled
$683.8 million and purchases of mortgage-backed securities and other securities
totaled $194.8 million. The increase in loan originations and the subsequent
reduction of purchased loans and mortgage-backed securities, during the nine
months ended June 30, 2000, is the result of the Bank's decision to increase its
emphasis on originating loans and reduce its reliance on purchased residential
loans.
The Bank is required under applicable federal regulations to maintain
specified levels of liquid investments in cash, United States government
securities and other qualifying investments. Regulations currently in effect
require the Bank to maintain liquid assets of not less than 4.0% of its net
withdrawable deposits plus short-term borrowings (the "liquidity ratio"). The
Bank's liquidity ratio was 7.47% and 6.96% as of June 30, 2000 and September 30,
1999, respectively, in compliance with this requirement.
Federal savings banks such as the Bank are also required to maintain
capital at levels specified by applicable minimum capital ratios. At June 30,
2000, the Bank was in compliance with all capital requirements and met the
definition of a "well capitalized" institution under applicable federal
regulations. See "Note 3 - Capital."
13
<PAGE>
Asset Quality
Non-performing assets as of June 30, 2000 were $22.8 million, which
represents a decrease of $5.5 million, or 19.4%, from $28.3 million as of
September 30, 1999. The decrease in non-performing assets primarily resulted
from a decrease in non-accrual loans of $3.5 million, and a decrease in real
estate owned of $2.1 million. Non-accrual loans decreased $2.4 million in
one-to-four family residential loan and $2.7 million in commercial mortgage loan
delinquencies, offset by a $2.1 million increase in non-mortgage commercial loan
delinquencies. Land and consumer loan delinquencies were reduced by $0.8 million
and $0.1 million, respectively, and multi-family residential loan delinquencies
increased by $0.4 million. Included in the decrease in non-accrual loans is a
reduction due to $1.6 million in loan charge-offs. The decrease in real estate
owned ("REO") was due to the sale of REO properties aggregating $6.9 million
offset by transfers of loans to REO of $5.7 million. Non-performing assets as a
percentage of total assets decreased from 0.69% as of September 30, 1999 to
0.51% as of June 30, 2000 due to the decrease in non-performing assets for the
reasons discussed above.
The following table sets forth information concerning BankUnited's
non-performing assets at June 30, 2000 and September 30, 1999.
<TABLE>
<CAPTION>
June 30, September 30,
2000 1999
--------------- ----------
(dollars in thousands)
<S> <C> <C>
Non-accrual loans $ 17,897 $ 21,428
Restructured loans 1,206 962
Loans past due 90 days and still accruing (1) 428 693
----------- -----------
Total non-performing loans 19,531 23,083
Non-accrual tax certificates 1,739 1,703
Real estate owned 1,480 3,548
----------- -----------
Total non-performing assets $ 22,750 $ 28,334
=========== ===========
Allowance for losses on tax certificates $ 989 $ 1,168
Allowance for loan losses 13,893 12,107
----------- -----------
Total allowance $ 14,882 $ 13,275
=========== ===========
Non-performing assets as a percentage of
total assets 0.51% 0.69%
Non-performing loans as a percentage of
total loans 0.53% 0.70%
Allowance for loan losses as a percentage of
total loans 0.38% 0.36%
Allowance for loan losses as a percentage of
non-performing loans 71.13% 52.45%
Net charge offs as a percentage of average
total loans 0.05% 0.06%
</TABLE>
------------
(1) Consists primarily of loans guaranteed by the Federal Housing Authority
("FHA") acquired in the acquisition of Suncoast Savings and Loan
Association, FSA.
14
<PAGE>
BankUnited's allowance for loan losses is established and maintained
based upon management's evaluation of the risks inherent in BankUnited's loan
portfolio including the economic trends and other conditions in specific
geographic areas as they relate to the nature of BankUnited's portfolio. The
provision for loan losses for the three months ended June 30, 2000 was $1.0
million as compared to $0.5 million for the three months ended June 30, 1999.
The provision for loan losses for the nine months ended June 30, 2000 was $3.2
million as compared to $7.2 million for the nine months ended June 30, 1999.
BankUnited's allowance for loan losses has increased by a net amount of $1.8
million from $12.1 million as of September 30, 1999 to $13.9 million as of June
30, 2000. See "Results of Operations-Provision for Loan Losses."
The following table sets forth the change in BankUnited's allowance for
loan losses for the three and nine months ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>
Three Months Nine Months
Ended June 30, Ended June 30,
------------------------------ -------------------------------
2000 1999 2000 1999
------------ ------------ ------------- -------------
(in thousands)
<S> <C> <C> <C> <C>
Balance at beginning of period................... $ 13,229 $ 12,342 $ 12,107 $ 6,128
Provision...................................... 1,000 450 3,200 7,186
Loans charged off.............................. (407) (736) (1,550) (1,294)
Recoveries..................................... 71 12 136 48
------------ ------------ ------------- -------------
Balance at end of period......................... $ 13,893 $ 12,068 $ 13,893 $ 12,068
============= ============= ============= =============
</TABLE>
The following table sets forth BankUnited's allocation of the allowance
for loan losses by category as of June 30, 2000 and 1999.
<TABLE>
<CAPTION>
As of June 30,
2000 1999
------------- -------------
(in thousands)
<S> <C> <C>
One-to-four family................................................ $ 4,033 $ 4,667
Multi-family...................................................... 963 353
Commercial real estate............................................ 2,102 3,202
Construction...................................................... 344 50
Land.............................................................. 1,135 1,174
Commercial business and consumer.................................. 3,791 2,024
Unallocated....................................................... 1,525 598
------------- -------------
Total allowance................................................ $ 13,893 $ 12,068
============= =============
</TABLE>
15
<PAGE>
Loan Portfolio
The following table sets forth the composition of BankUnited's loan
portfolio, including loans held for sale, at June 30, 2000 and September 30,
1999.
<TABLE>
<CAPTION>
June 30, 2000 September 30, 1999
--------------------------- --------------------------
Percent Percent
of of
Amount Total Amount Total
-------------- ----------- ------------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C>
Mortgage loans:
One-to-four family................................ $ 3,240,310 88.6% $ 3,010,427 91.1%
Multi-family...................................... 67,004 1.8 30,057 0.9
Commercial real estate............................ 148,915 4.1 141,090 4.3
Construction...................................... 28,642 0.8 15,425 0.5
Land.............................................. 32,640 0.9 23,659 0.7
-------------- ----------- ------------- -----------
Total mortgage loans............................ 3,517,511 96.2 3,220,658 97.5
-------------- ----------- ------------- -----------
Other loans:
Commercial........................................ 76,650 2.1 48,173 1.5
Consumer.......................................... 62,065 1.7 33,878 1.0
-------------- ----------- ------------- -----------
Total other loans............................... 138,715 3.8 82,051 2.5
-------------- ----------- ------------- -----------
Total loans................................... 3,656,226 100.0 3,302,709 100.0
Unearned discounts, premiums and
deferred loan fees, net......................... 14,233 0.4 12,264 0.4
Allowance for loan losses......................... (13,893) (0.4) (12,107) (0.4)
-------------- ----------- ------------- -----------
Total loan portfolio................................. $ 3,656,566 100.0% $ 3,302,866 100.0%
============== =========== ============= ===========
</TABLE>
16
<PAGE>
Securities Portfolio
The following tables set forth the amortized cost and estimated fair
value of mortgage-backed securities and other securities available for sale and
held to maturity at June 30, 2000 and September 30, 1999.
<TABLE>
<CAPTION>
June 30, 2000
------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------- ------------- ------------- --------------
(in thousands)
<S> <C> <C> <C> <C>
Available-for-sale:
Mortgage-backed securities:
GNMA mortgage-backed securities................. $ 29,125 $ 83 $ (628) $ 28,580
FNMA mortgage-backed securities................. 4,737 16 (159) 4,594
FHLMC mortgage-backed securities................ 13,834 10 (274) 13,570
Collateralized mortgage obligations............. 78,780 29 (3,809) 75,000
Mortgage pass-through certificates.............. 2,646 - (4) 2,642
-------------- ------------- ------------- --------------
Total mortgage-backed securities.............. 129,122 138 (4,874) 124,386
-------------- ------------- ------------- --------------
Other securities:
U.S. government agency securities............. 350 - (16) 334
Equity securities............................. 2,905 - (481) 2,424
Trust preferred securities of
other issuers............................... 16,316 - (3,123) 13,193
-------------- ------------- ------------- --------------
Total other securities...................... 19,571 - (3,620) 15,951
-------------- ------------- -------------- --------------
Total available-for-sale.......................... $ 148,693 $ 138 $ (8,494) $ 140,337
============== ============= ============== ==============
Held-to-maturity:
Mortgage-backed securities:
GNMA mortgage-backed securities................. $ 87,381 $ 460 $ (541) $ 87,300
FNMA mortgage-backed securities................. 1,750 - (52) 1,698
FHLMC mortgage-backed securities................ 68,738 - (2,337) 66,401
Collateralized mortgage obligations............. 54,563 - (2,762) 51,801
Mortgage pass-through certificates.............. 18,929 366 - 19,295
-------------- ------------- ------------- --------------
Total mortgage-backed securities.............. 231,361 826 (5,692) 226,495
-------------- ------------- ------------- --------------
Other securities:
U.S. government agency securities............. 5,001 - (133) 4,868
State of Israel bonds......................... 61 - - 61
-------------- ------------- ------------- --------------
Total other securities...................... 5,062 - (133) 4,929
-------------- ------------- -------------- --------------
Total held-to-maturity............................ $ 236,423 $ 826 $ (5,825) $ 231,424
============== ============= ============== ==============
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
September 30, 1999
------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------- ------------- ------------- --------------
(in thousands)
<S> <C> <C> <C> <C>
Available-for-sale:
Mortgage-backed securities:
GNMA mortgage-backed securities................. $ 32,543 $ 179 $ (391) $ 32,331
FNMA mortgage-backed securities................. 5,396 40 (116) 5,320
FHLMC mortgage-backed securities................ 16,949 11 (110) 16,850
Collateralized mortgage obligations............. 88,268 92 (1,552) 86,808
Mortgage pass-through certificates.............. 3,072 4 - 3,076
-------------- ------------- ------------- --------------
Total mortgage-backed securities.............. 146,228 326 (2,169) 144,385
-------------- ------------- ------------- --------------
Other securities:
U.S. Treasury securities...................... 503 1 - 504
U.S. government agency securities............. 2,104 15 (8) 2,111
Equity securities............................. 2,905 - (199) 2,706
Trust preferred securities of
other issuers............................... 16,327 - (1,647) 14,680
-------------- ------------- ------------- --------------
Total other securities...................... 21,839 16 (1,854) 20,001
-------------- ------------- ------------- --------------
Total available-for-sale.......................... $ 168,067 $ 342 $ (4,023) $ 164,386
============== ============= ============= ==============
Held-to-maturity:
Mortgage-backed securities:
GNMA mortgage-backed securities................. $ 39,244 $ 59 $ (168) $ 39,135
FNMA mortgage-backed securities................. 1,915 - (23) 1,892
FHLMC mortgage-backed securities................ 72,566 2 (1,202) 71,366
Collateralized mortgage obligations............. 63,189 - (2,740) 60,449
Mortgage pass-through certificates.............. 25,925 45 (27) 25,943
-------------- ------------- ------------- --------------
Total mortgage-backed securities.............. 202,839 106 (4,160) 198,785
-------------- ------------- ------------- --------------
Other securities:
U.S. government agency securities............. 4,997 - (74) 4,923
State of Israel bonds......................... 61 - - 61
-------------- ------------- ------------- --------------
Total other securities...................... 5,058 - (74) 4,984
-------------- ------------- ------------- --------------
Total held-to-maturity............................ $ 207,897 $ 106 $ (4,234) $ 203,769
============== ============= ============= ==============
</TABLE>
18
<PAGE>
DISCUSSION OF FINANCIAL CONDITION CHANGES FROM SEPTEMBER 30, 1999 TO JUNE 30,
2000 AND RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2000
AND 1999.
FINANCIAL CONDITION
Assets
Total assets increased $359.7 million, or 8.8%, from September 30, 1999
to June 30, 2000, which is consistent with BankUnited's expectations that assets
will not grow significantly during the 2000 fiscal year.
BankUnited's short-term investments, primarily consisting of Federal
Home Loan Bank ("FHLB") overnight deposits and securities purchased under
agreements to resell, decreased by $3.3 million, or 1.6%, to $197.1 million at
June 30, 2000, from $200.4 million at September 30, 1999, primarily due to the
maturity of securities purchased under agreements to resell.
BankUnited's investment in tax certificates decreased by $7.0 million,
or 47.3%, to $7.8 million at June 30, 2000, from $14.8 million at September 30,
1999, as a result of certificate redemptions and repayments and the decision to
no longer invest in this type of instrument.
Mortgage-backed securities held-to-maturity increased by $28.6 million,
or 14.1%, to $231.4 million at June 30, 2000, from $202.8 million at September
30, 1999, due primarily to purchases of $49.8 million, offset by repayments and
amortization of premiums.
Mortgage-backed securities available-for-sale decreased by $20.0
million, or 13.9%, to $124.4 million at June 30, 2000, from $144.4 million at
September 30, 1999, due primarily to repayments and amortization of $17.1
million, and also due to a reduction of $2.9 million in the market value of the
underlying securities.
BankUnited's loans receivable, net (including loans held for sale)
increased $0.4 billion, or 12.1%, from $3.3 billion at September 30, 1999 to
$3.7 billion at June 30, 2000. Mortgage loan purchases of $5.5 million and loan
originations of $753.0 million were offset by repayments of $394.6 million (net
of accretion of discount and amortization of premium). BankUnited classified all
of the residential loans originated and purchased during the first nine months
of fiscal 2000 as loans receivable, net.
Liabilities
Deposits increased by $260.3 million from September 30, 1999 to June
30, 2000 due to an increase in certificates of deposit of $302.0 million and a
reduction in savings and money market accounts of $33.3 million and $20.4
million, respectively. Non-interest-bearing checking accounts increased $18.8
million offsetting a decrease of $6.8 million in interest-bearing checking
accounts. This change in the deposit mix resulted in an increase in BankUnited's
cost of interest-bearing deposits to 5.03% for the nine months ended June 30,
2000 from 4.82% for the nine months ended June 30, 1999.
19
<PAGE>
Securities sold under agreements to repurchase decreased by $16.5
million, or 52.1%, to $15.2 million at June 30, 2000 from $31.7 million at
September 30, 1999. This decrease resulted from the maturity of the agreements.
Trust preferred securities decreased $3.9 million, or 1.8%, to $214.6
million at June 30, 2000, from $218.5 million at September 30, 1999. See
"Results of Operations - Extraordinary Item."
Capital
In December 1998, the Board of Directors of BankUnited authorized the
purchase from time to time in open market transactions of up to 1,000,000 shares
of BankUnited's Class A Common Stock at such prices as the Executive Committee
deems advantageous. At September 30, 1999, BankUnited had purchased 183,000
shares of its Class A Common Stock. During the nine month period ended June 30,
2000, BankUnited purchased an additional 150,000 shares of its Class A Common
Stock on the open market at a cost of $1.1 million, for a total treasury
position of 333,000 shares at a total cost of $2.8 million.
In May 1999, the Board of Directors of BankUnited authorized the
purchase of shares of the 9% Preferred Stock on the open market, if the market
is appropriate, and the retirement of the 9% Preferred Stock. During the nine
month period ended June 30, 2000, BankUnited purchased 1,000 shares of its 9%
Preferred Stock on the open market at a cost of $7,250.
RESULTS OF OPERATIONS
General
Net income after preferred stock dividends increased to $3.6 million
for the three months ended June 30, 2000, compared to $3.1 million for the three
months ended June 30, 1999, and to $11.5 million for the nine months ended June
30, 2000, from a net loss of $7.8 million for the nine months ended June 30,
1999. The increase of $0.5 million for the three months ended June 30, 2000 as
compared to the same prior year period is attributable to the increase in net
interest income before provision for loan loss of 23.3% from $15.9 million to
$19.6 million.
The increase in net income after preferred stock dividends for the nine
months ended June 30, 2000, as compared to the prior year period was primarily
attributable to the effects of BankUnited's restructuring during the first and
second quarters of fiscal 1999. As a result of the restructuring, special
charges totaling $15.1 million significantly reduced BankUnited's net income for
the nine month period ended June 30, 1999. See "Managements' Discussion and
Analysis-Restructuring" in BankUnited's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999, for more information regarding the restructuring
charges.
Net Interest Income
Net interest income before provision for loan losses was $19.6 million
for the three months ended June 30, 2000, as compared to $15.9 million for the
same prior year period, and $58.5 million for the nine months ended June 30,
2000, as compared to $27.5 million for the same prior year period.
20
<PAGE>
The increases in net interest income before provision for loan losses
were primarily the result of the improved net interest margin, which increased
to 1.93% and 2.00% for the three and nine months ended June 30, 2000,
respectively, from 1.76% and 1.02% for the same prior year periods.
For the three months ended June 30, 2000, the increase in the net
interest margin was due to an increase in the yield on interest-earning assets
to 7.45%, from 6.82% for the same period in 1999, primarily attributable to the
higher yields in fiscal 2000 on the loans originated by BankUnited, offset by a
49 basis point increase in the cost of interest-bearing liabilities to 5.69%
from 5.20% for the same period in 1999.
For the nine months ended June 30, 2000, the increase in the net
interest margin was due to an increase in the yield on interest-earning assets
to 7.34%, from 6.19% for the same prior year period, primarily due to the higher
yields in fiscal 2000 on loans originated by BankUnited, the effect of the
accelerated amortization of purchase premiums recorded in the first quarter of
fiscal 1999 and a $14.8 million restructuring charge in the second quarter of
fiscal 1999, offset by an 18 basis point increase in the cost of
interest-bearing liabilities to 5.50% from 5.32% for the same prior year period.
Interest income increased by $14.2 million, or 23.1%, to $75.8 million
for the three months ended June 30, 2000, compared to $61.6 million for the same
prior year period. For the nine months ended June 30, 2000, interest income
increased by $48.5 million, or 28.9%, to $216.5 million, compared to $168.0
million for the same prior year period.
The results of operations for the three and nine months ended June 30,
2000 reflect a reduction in the net amortization of premiums/discounts on
purchased loans and mortgage-backed securities compared to the three and nine
month periods ended June 30, 1999. The amortization of premiums, net of
discounts and deferred origination costs, decreased from $1.3 million for the
three months ended June 30, 1999, to $0.8 million for the three months ended
June 30, 2000, and decreased from $22.4 million for the nine months ended June
30, 1999, to $2.8 million for the nine months ended June 30, 2000. The decrease
in premium amortization was a result of the lower level of loan prepayments
experienced in the first and second quarters of fiscal 2000, compared to the
same quarters in fiscal 1999. See "Results of Operations - Analysis of Net
Interest Income."
Interest expense increased by $10.5 million, or 23.0%, to $56.2 million
for the three months ended June 30, 2000, from $45.7 million for the same prior
year period, and by $17.6 million, or 12.5%, to $158.0 million for the nine
months ended June 30, 2000, from $140.4 million for the same prior year period.
The increase reflects an increase in the average balance for interest-bearing
deposits during the three and nine months ended June 30, 2000. Average
interest-bearing deposits increased by $0.3 billion, or 13.6%, to $2.5 billion
for the three months ended June 30, 2000, from $2.2 billion for the same prior
year period, and by $0.2 billion, or 9.1%, to $2.4 billion for the nine months
ended June 30, 2000, from $2.2 billion for the same prior year period. Interest
expense also increased as a result of the issuance and sale of $200.0 million of
the Bank's Senior Notes during the second quarter of fiscal 1999. For the three
months ended June 30, 2000, the average rate paid on interest-bearing
liabilities increased 49 basis points to 5.69%, from 5.20% for the same prior
year period. For the nine months ended June 30, 2000, the average rate paid on
interest-bearing liabilities increased slightly to 5.50%, from 5.32% for the
same prior year period.
21
<PAGE>
Analysis of Net Interest Income
Net interest income represents the difference between income on
interest-earning assets and expense on interest-bearing liabilities. The
following table sets forth certain information relating to the categories of
BankUnited's interest-earning assets and interest-bearing liabilities for the
periods indicated, including the effect on yields of the accelerated
amortization of purchase premiums on the One-Year CMT loan portfolio and a
related security recorded in the first quarter of fiscal 1999 as a result of
high loan prepayments and the restructuring charge incurred in the second
quarter of fiscal 1999. See "Managements' Discussion and Analysis -
Restructuring" in BankUnited's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999, for more information regarding the restructuring charge.
All yield and rate information is calculated on an annualized basis by dividing
the annualized income or expense item for the period by the average balances
during the period of the appropriate balance sheet item. Net interest margin is
calculated by dividing net interest income by average interest-earning assets.
Non-accrual loans are included in asset balances for the appropriate period,
whereas recognition of interest on such loans is discontinued and any remaining
accrued interest receivable is reversed, in conformity with federal regulations.
The yields and net interest margins appearing in the following table have been
calculated on a pre-tax basis.
22
<PAGE>
Yields Earned and Rates Paid
<TABLE>
<CAPTION>
Three Months Ended June 30,
--------------------------------------------------------
2000 1999
--------------------------------------- -----------------------------------------
Average Average
Balance Interest Yield/Rate Balance Interest Yield/Rate
----------- ----------- ----------- ----------- ----------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $ 3,609,268 $ 67,310 7.46% $2,940,542 $ 51,462 6.99%
Mortgage-backed securities
and collateralized mortgage
obligations 363,050 6,439 7.09 343,075 5,418 6.32
Short-term investments (1) 18,112 424 9.27 230,159 3,009 5.17
Tax certificates 9,669 228 9.45 22,443 427 7.60
Long-term investments and
FHLB stock 75,951 1,479 7.82 68,293 1,254 7.37
----------- ----------- --------- ----------- ----------- ---------
Total interest-earning assets $ 4,076,050 $ 75,880 7.45% $3,604,512 $ 61,570 6.82%
----------- ----------- --------- ---------- ----------- ---------
Interest-bearing liabilities:
NOW/money market $ 256,998 $ 1,523 2.38% $ 291,745 $ 2,022 2.78%
Savings 355,664 4,280 4.84 367,705 3,957 4.32
Certificates of deposit 1,861,218 26,462 5.72 1,571,575 19,736 5.04
Trust preferred securities 214,593 5,199 9.69 218,500 5,288 9.68
Senior notes 200,000 2,835 5.67 200,000 2,857 5.71
FHLB advances and other
borrowings 1,065,211 15,947 5.92 859,292 11,819 5.44
----------- ----------- --------- ----------- ----------- ---------
Total interest-bearing
liabilities $ 3,953,684 $ 56,246 5.69% $ 3,508,817 $ 45,679 5.20%
----------- ----------- --------- ----------- ----------- ---------
Excess of interest-earning assets
over interest-bearing liabilities $ 122,366 $ 95,695
============ ===========
Net interest income $ 19,634 $ 15,891
=========== ===========
Interest rate spread 1.76% 1.62%
========= =========
Net interest margin 1.93% 1.76%
========= =========
Ratio of interest-earning assets to
interest-bearing liabilities 103.09% 102.73%
=========== ===========
</TABLE>
------------
(1) Short-term investments include FHLB overnight deposits, securities
purchased under agreements to resell, federal funds sold and
certificates of deposit.
23
<PAGE>
Yields Earned and Rates Paid
<TABLE>
<CAPTION>
Nine Months Ended June 30,
-------------------------------------------------------
2000 1999
--------------------------------------- -----------------------------------------
Average Average
Balance Interest Yield/Rate Balance Interest Yield/Rate
----------- ----------- ----------- ----------- ----------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (1) $ 3,468,442 $ 191,586 7.37% $2,988,147 $ 142,585 6.36%
Mortgage-backed securities
and collateralized mortgage
obligations 355,949 18,679 7.00 333,185 12,572 5.03
Short-term investments (2) 21,332 1,276 7.86 174,210 6,670 5.05
Tax certificates 11,884 655 7.35 29,925 1,561 6.96
Long-term investments and
FHLB stock 73,344 4,273 7.78 83,447 4,580 7.33
----------- ----------- --------- ----------- ----------- ---------
Total interest-earning assets $ 3,930,951 $ 216,469 7.34% $ 3,608,914 $ 167,968 6.19%
----------- ----------- --------- ----------- ----------- ---------
Interest-bearing liabilities:
NOW/money market $ 262,837 $ 4,948 2.51% $ 272,519 $ 5,918 2.90%
Savings 365,144 12,822 4.69 351,464 11,733 4.46
Certificates of deposit 1,766,855 72,334 5.47 1,603,981 62,599 5.22
Trust preferred securities 215,986 15,701 9.69 218,500 15,865 9.68
Senior notes 200,000 8,593 5.73 135,546 4,758 4.68
FHLB advances and other
borrowings 1,005,257 43,610 5.70 929,473 39,560 5.61
----------- ----------- --------- ----------- ----------- ---------
Total interest-bearing
liabilities $ 3,816,079 $ 158,008 5.50% $ 3,511,483 $ 140,433 5.32%
----------- ----------- --------- ----------- ----------- ---------
Excess of interest-earning assets
over interest-bearing liabilities $ 114,872 $ 97,431
=========== ===========
Net interest income $ 58,461 $ 27,535
=========== ===========
Interest rate spread 1.84% 0.87%
========= =========
Net interest margin 2.00% 1.02%
========= =========
Ratio of interest-earning assets to
interest-bearing liabilities 103.01% 102.77%
====== ======
</TABLE>
------------
(1) The yields and rates along with the corresponding interest rate spread
and net interest margin for the nine months ended June 30, 1999 reflect
the accelerated amortization of purchase premiums on the One-Year CMT
loan portfolio and a related security in the first quarter of fiscal
1999 and the $14.8 million charge in the second quarter of fiscal 1999
related to the write-off of purchase premiums on the One-Year CMT loan
portfolio and the continuing acceleration of amortization of purchase
premium on a related security.
(2) Short-term investments include FHLB overnight deposits, securities
purchased under agreements to resell, federal funds sold and
certificates of deposit.
24
<PAGE>
Rate/Volume Analysis
The following tables present, for the periods indicated, the changes in
interest income and the changes in interest expense attributable to the changes
in interest rates and the changes in the volume of interest-earning assets and
interest-bearing liabilities. For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable
to: (i) changes in volume (change in volume multiplied by prior year rate); (ii)
changes in rate (change in rate multiplied by prior year volume); (iii) changes
in rate/volume (change in rate multiplied by change in volume); and (iv) total
changes in rate and volume.
<TABLE>
<CAPTION>
Three Months Ended June 30,
-------------------------------------------------------------
2000 vs. 1999
-------------------------------------------------------------
Increase (Decrease) Due to
-------------------------------------------------------------
Changes Changes Changes Total
in in in Increase/
Volume Rate Rate/Volume (Decrease)
------- ---------- ----------- ----------
(in thousands)
<S> <C> <C> <C> <C>
Interest income attributable to:
Loans $12,322 $ 2,898 $ 628 $ 15,848
Mortgage-backed securities and
collateralized mortgage obligations 315 667 39 1,021
Short-term investments (1) (2,772) 2,384 (2,197) (2,585)
Tax certificates (243) 104 (60) (199)
Long-term investments and
FHLB stock 72 68 85 225
-------- --------- -------- --------
Total interest-earning assets 9,694 6,121 (1,505) 14,310
-------- --------- --------- --------
Interest expense attributable to:
NOW/money market (240) (288) 29 (499)
Savings (129) 478 (26) 323
Certificates of deposit 3,628 2,659 439 6,726
Trust preferred securities (95) 5 1 (89)
Senior notes 0 (21) (1) (22)
FHLB advances and other
borrowings 2,831 1,049 248 4,128
-------- --------- -------- --------
Total interest-bearing liabilities 5,995 3,882 690 10,567
-------- --------- -------- --------
Increase in net interest income $ 3,699 $ 2,239 $ (2,195) $ 3,743
======== ========= ======== ========
</TABLE>
------------
(1) Short-term investments include FHLB overnight deposits, securities
purchased under agreements to resell, federal funds sold and
certificates of deposit.
25
<PAGE>
Rate/Volume Analysis
<TABLE>
<CAPTION>
Nine Months Ended June 30,
-------------------------------------------------------------
2000 vs. 1999
-------------------------------------------------------------
Increase (Decrease) Due to
-------------------------------------------------------------
Changes Changes Changes Total
in in in Increase/
Volume Rate Rate/Volume (Decrease)
------- ---------- ----------- ----------
(in thousands)
<S> <C> <C> <C> <C>
Interest income attributable to:
Loans $ 24,561 $ 21,309 $ 3,131 $ 49,001
Mortgage-backed securities and
collateralized mortgage obligations 859 4,913 335 6,107
Short-term investments (1) (5,875) 3,730 (3,249) (5,394)
Tax certificates (941) 89 (54) (906)
Long-term investments and
FHLB stock (652) 261 84 (307)
-------- --------- -------- --------
Total interest-earning assets 17,952 30,302 247 48,501
-------- --------- -------- --------
Interest expense attributable to:
NOW/money market (210) (794) 34 (970)
Savings 457 598 34 1,089
Certificates of deposit 6,362 3,009 364 9,735
Trust preferred securities (183) 18 1 (164)
Senior notes 2,263 1,066 506 3,835
FHLB advances and other
borrowings 3,237 618 195 4,050
-------- --------- -------- --------
Total interest-bearing liabilities 11,926 4,515 1,134 17,575
-------- --------- -------- --------
Increase in net interest income $ 6,026 $ 25,787 $ (887) $ 30,926
======== ========= ======== ========
</TABLE>
------------
(1) Short-term investments include FHLB overnight deposits, securities
purchased under agreements to resell, federal funds sold and
certificates of deposit.
26
<PAGE>
Provision For Loan Losses
The provision for loan losses increased by $0.5 million, or 100.0%, to
$1.0 million for the three months ended June 30, 2000, compared to $0.5 million
for the same prior year period. For the nine months ended June 30, 2000 the
provision for loan losses decreased by $4.0 million or 55.6% to $3.2 million as
compared to $7.2 million for the same prior year period. A $6.3 million
provision was made in the second quarter of fiscal 1999 based on management's
rigorous review of BankUnited's loan portfolio. See "Managements' Discussion and
Analysis - Results of Operations - Provision for Loan Losses" in BankUnited's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, for more
information regarding management's review.
Non-Interest Expenses
Non-interest expenses increased $2.7 million to $13.8 million for the
three months ended June 30, 2000, compared to $11.1 million for the same prior
year period. Non-interest expenses for the three months ended June 30, 2000,
included increased expenses for employee compensation and benefits expenses and
advertising and promotion expenses. Total non-interest expenses, as a percentage
of average assets, increased from 1.19% for the three months ended June 30,
1999, to 1.31% for the same period in 2000.
Non-interest expenses increased by $5.2 million, or 14.7%, to $40.5
million for the nine months ended June 30, 2000, compared to $35.3 million for
the same prior year period. The increase in expenses is attributable to the
growth BankUnited has experienced, including the additional costs relating to
the branding campaign launched by the Bank during the first quarter of fiscal
2000, as well as the hiring of additional associates in the key sales areas of
business banking and private banking, offset by the effect of the restructuring
charge incurred during the second quarter of fiscal 1999. Total non-interest
expenses, as a percentage of average assets, increased from 1.25% for the nine
months ended June 30, 1999, to 1.33% for the same period in 2000 as a result of
the additional charges. See "Managements' Discussion and Analysis -
Restructuring" in BankUnited's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999, for more information regarding the restructuring charge.
Income Taxes
The income tax provision increased by $0.4 million, or 18.2%, to $2.6
million for the three months ended June 30, 2000, compared to $2.2 million for
the prior year period. For the nine months ended June 30, 2000, the income tax
provision increased by $11.9 million, or 290.2%, to a net expense of $7.8
million, compared to a net benefit of $4.1 million for the same prior year
period. These increases were due to the higher pre-tax earnings during the three
and nine months ended June 30, 2000, as compared to the prior year period.
Extraordinary Item
In November 1999, the Board of Directors of BankUnited authorized the
purchase, from time to time, in the open market, or otherwise, of up to 300,000
shares of the Trust Preferred Securities. During the nine months ended June 30,
2000, BankUnited purchased 156,299 shares of the Trust Preferred Securities. The
Trust Preferred Securities were purchased at a cost of $2.7 million resulting in
an extraordinary gain as a result of the early extinguishment of the Trust
Preferred Securities in the amount of $0.7 million, net of $0.4 million in
taxes.
27
<PAGE>
SELECTED FINANCIAL DATA
The following table presents a five-quarter summary of selected
financial information.
<TABLE>
<CAPTION>
At or For the Three Months Ended
------------------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
2000 2000 1999 1999 1999
---------- ---------- ---------- ---------- ----------
(Unaudited; dollars in thousands, except earnings per share)
<S> <C> <C> <C> <C> <C>
Operations data:
Net interest income ................................. $ 19,634 $ 19,638 $ 19,189 $ 18,500 $ 15,891
Provision for loan losses ........................... 1,000 1,000 1,200 753 450
Non-interest income ................................. 1,602 1,570 1,307 1,109 1,189
Non-interest expense ................................ 13,777 13,753 12,988 13,100 11,135
Provision for income taxes .......................... 2,631 2,635 2,579 2,147 2,164
Extraordinary item, net of taxes .................... 9 261 431 -- --
Net income .......................................... 3,639 3,883 3,963 3,412 3,139
Per common share data:
Net income before extraordinary item:
Basic ............................................. $ 0.20 $ 0.20 $ 0.19 $ 0.19 $ 0.17
Diluted ........................................... $ 0.20 $ 0.20 $ 0.19 $ 0.18 $ 0.17
Net income after extraordinary item:
Basic ............................................. $ 0.20 $ 0.21 $ 0.22 $ 0.19 $ 0.17
Diluted ........................................... $ 0.20 $ 0.21 0.21 $ 0.18 $ 0.17
Weighted average number of common
shares outstanding:
Basic ........................................... 18,190 18,189 18,304 18,392 18,413
Diluted ......................................... 18,689 18,726 18,975 19,269 19,195
Financial condition data:
Loans receivable, net (1) ........................... $3,656,566 $3,559,025 $3,408,988 $3,302,866 $3,120,658
Total assets ........................................ 4,438,171 4,267,455 4,031,988 4,078,471 3,932,725
Deposits ............................................ 2,540,061 2,438,580 2,360,942 2,279,798 2,228,745
Borrowings .......................................... 1,421,672 1,358,106 1,216,426 1,328,148 1,242,169
Company obligated mandatorily redeemable
trust preferred securities of subsidiary trusts
holding solely junior subordinated deferrable
interest debentures of BankUnited ................. 214,593 214,593 216,006 218,500 218,500
Stockholders' equity ................................ 198,020 195,629 191,991 190,137 188,379
Book value per common share ......................... $ 10.37 $ 10.24 $ 10.04 $ 9.88 $ 9.74
Tangible book value per common share ................ $ 8.71 $ 8.55 $ 8.33 $ 8.16 $ 8.01
Performance ratios:
Return on average tangible common equity ............ 9.33% 10.19% 10.54% 9.17% 8.49%
Return on average assets ............................ 0.36% 0.40% 0.42% 0.38% 0.36%
Net interest yield on earning assets ................ 1.93% 2.01% 2.06% 2.05% 1.76%
Net interest spread ................................. 1.76% 1.86% 1.90% 1.89% 1.62%
Efficiency ratio .................................... 62.16% 62.04% 60.87% 64.81% 62.58%
</TABLE>
(1) Includes loans held for sale.
28
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The discussion contained in BankUnited's Annual Report on Form 10-K for
the year ended September 30, 1999, under Item 7a, "Quantitative and Qualitative
Disclosures about Market Risk," provides detailed quantitative and qualitative
disclosures about market risk and should be referenced for information thereon.
In addition, the following discussion addresses the sources and effects of
developments during the nine months ended June 30, 2000, which related to risks
associated with investments and mortgage-backed securities.
Risks Associated with Changing Interest Rates. As a financial
intermediary, BankUnited invests in various types of interest-earning assets
(primarily loans, mortgage-backed securities, and investment securities) which
are funded largely by interest-bearing liabilities (primarily deposits, FHLB
advances, senior notes, and trust preferred securities). Such financial
instruments have varying levels of sensitivity to changes in market interest
rates which creates interest rate risk for the Bank. Accordingly, BankUnited's
net interest income, the most significant component of its net income, is
subject to substantial volatility due to changes in interest rates or market
yield curves, particularly if there are differences, or gaps, in the repricing
frequencies of its interest- earning assets and the interest-bearing liabilities
which fund them. BankUnited monitors such interest rate gaps and seeks to manage
its interest rate risk by adjusting the repricing frequencies of its
interest-earning assets and interest-bearing liabilities. Additionally,
BankUnited utilizes, on a limited basis, derivative financial instruments
designed to reduce the interest rate risks associated with its interest-earning
assets and interest- bearing liabilities. Specifically, interest rate cap
contracts with an aggregate notional amount of $800.0 million were acquired by
the Bank in March 2000, to reduce its exposure to the increased funding costs
that would likely result in an increasing interest rate environment. See Note 5
- "Contingencies and Off-Balance Sheet Activities" for a description of the
interest rate cap contracts.
Another measure used by BankUnited to reduce its exposure to interest
rate risk, is borrowing under the "knockout" advance program offered by the
FHLB. In general, a knockout advance is structured as a fixed rate advance that
the FHLB may convert to a floating rate indexed to the 3-month LIBOR rate if, at
the end of any given quarter after the non-callable period, the 3-month LIBOR
rate equals or exceeds an agreed upon threshold rate. Should a particular
advance be converted by the FHLB, its rate will reset quarterly for the
remainder of its term.
During the nine months ended June 30, 2000, BankUnited borrowed a total
of $250 million in knockout advances, each with a 10-year term and a one year
non-callable period. The initial rates on these advances range from 5.85% to
6.94% while the threshold rates range from 8.50% to 9.75%. BankUnited has chosen
to borrow under the knockout advance program because, as long as these advances
remain unconverted by the FHLB, the stability of BankUnited's net interest
margin will be enhanced. However, if the 3-month LIBOR rate were to rise so as
to allow the FHLB to convert one or more of BankUnited's knockout advances, the
funding costs associated with the converted advance would become higher and more
volatile, negatively impacting BankUnited's net interest margin.
Risks Associated with Investments and Mortgage-Backed Securities.
BankUnited purchases fixed and adjustable rate mortgage-backed securities and
other securities for liquidity, yield and risk management purposes. Changes in
market interest rates associated with BankUnited's investments and
mortgage-backed securities could have a material adverse effect on BankUnited's
carrying value of its securities. Such changes in the carrying value of
mortgage-backed securities and other securities classified as available-for-sale
would
29
<PAGE>
be reflected, net of taxes, as a component of stockholders' equity. See Note 4 -
"Comprehensive Income" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Securities Portfolio."
30
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
BankUnited filed no reports on Form 8-K during the quarter for
which this report is filed.
31
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
BANKUNITED FINANCIAL CORPORATION
By: /s/ Humberto Lopez
----------------------------------
Humberto Lopez
Executive Vice President and
Chief Financial Officer
Date: August 14, 2000
32
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
Form 10-Q for the Quarter Ended June 30, 2000
INDEX TO EXHIBITS
Sequentially
Exhibit No. Numbered Page
----------- -------------
27.1 Financial Data Schedule
33
