Thursday, January 24, 2008

Bank United Non-Performing Loans Doubled in Fourth Quarter

BankUnited (BKUNA) Announces First-Quarter Results for Fiscal 2008: "BankUnited Financial Corporation today reported a loss of $25.5 million, or $0.73 per diluted share, for the quarter ended Dec. 31, 2007."

BankUnited non-performing loans more than doubled during the fourth quarter of 2007.

In this environment of rising delinquencies and falling collateral values, both Bank United and Downey are lowering their allowance for loan losses as a percentage of their non-performing loans.

BankUnited was a big option-ARM lender. Notice how more and more of their interest, and income, are coming in the form of non-cash negative amortization.

In theory, this could be OK. It all depends on whether the negative amortization balance will eventually be collected. I predict that it won't.

I think of them as the Downey of Florida, and you know how bearish I am on Downey. Florida has worse real estate markets than California.


Anonymous said...

In their report they mention LTV adjusted by mortgage insurance (at the end). What the heck is that?

Anonymous said...

NPA are where Downey had them in September, 3%. Same exponential growth.

I wonder how they count modifications? Downey count them as NPA...

CV said...

BankUnited is history their only hope for survival is that the property tax relief passes on the on the Jan 29th ballot in Florida in which was delayed too long by inept legislators that did not deem the housing crisis as an epidemic threat to the to the Nation. If passed this could offer relief but it might be too late.

Ben Bittrolff said...

Bottom Line: The average Joe six pack is a baby boomer quickly running out of time. His single largest asset, his primary residence, is deflating rapidly. This single largest asset is also the primary collateral for his single largest liability. His balance sheet is rapidly deflating as all his assets, from his home to his equity portfolio, all simultaneously deflate while his debt outstanding may actually still be increasing. His debt servicing are costs not dropping, despite aggressive rate cuts, and may actually be rising. It has also become damn near impossible to refinance certain mortgages as easy credit evaporates. On top of that, Joe six pack should now be seriously concerned about his job security. So when a cheque for $300 to $1500 arrives in the mail, Joe six pack is not going to spend it on a $200 steak dinner or a new computer or on a vacation. Got it people?

More on the stimulous package: (


Anonymous said...

DSL nonperformers = 7.77% of total assets.
BKUNA nonperformers = 2.99% of total assets.

I'd suggest that there is a BIG difference. BKUNA has a branch network and loan generation in Dade/Broward, which isn't nearly as badly hurt as Orlando, the Naples area, and St. Lucie County. BKUNA numbers aren't as bad because the reality isn't as bad.

Arguably, it will not be necessary to build loan loss reserves to the coverage levels that prevailed a year ago. When defaults are low, reserves will look high. Now that they're high, reserves look low. Nothing new.

Ben Bittrolff said...

Make sure you're sitting down before you fire these charts up.
Really Scary Fed Charts, Why Bernanke Will Cut Furiously


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