MIAMI LAKES, Fla. (AP) ? BankUnited's swung to a profit in the first quarter after its bargain-price purchase of a New York bank allowed it to book a big accounting gain.
The bank holding company, based in Miami Lakes, Fla., said Wednesday that its loan portfolio grew strongly after a year-ago quarter weighed down by the cost of its IPO.
BankUnited's net income in the three months ended March 31 was $50.3 million, or 49 cents per share, compared with a loss of $67.7 million, or 72 cents per share, in the same period a year earlier.
This year's results included a bargain purchase gain of $5.3 million and a charge of $1.2 million for the acquisition of Herald National Bank, BankUnited's first purchase since its 2011 IPO.
Last year's loss resulted from a one-time charge of $110.4 million related to the IPO.
Loans, net of discount and deferred fees and costs, increased to $4.7 billion as of March 31 from $4.1 billion a year earlier. Of the new loans, just under half came from the Herald acquisition.
As a result, the company set aside far more money to cover future losses on new loans than on old loans. Last year, old loans required most of the set-aside.
Net interest income, which measures interest income from loans and interest payments to depositors, rose to $137.8 million from $112.3 million. Non-interest income, which includes fees and other gains and losses, plunged to $36.4 million from $64.3 million.
Non-interest income fell as a result of BankUnited's agreement with the Federal Deposit Insurance Corp.to share some of the losses on weak loans that the bank owned when it was sold to investors in a government fire-sale. A year ago, the FDIC's payment to BankUnited was nearly three times more than this year's.
This year, the company said, expectations for the loans improved. That boosted its net interest income and net interest margin ? the difference between the interest rate a bank pays depositors and the rate it collects from borrowers.
The results were stronger than Wall Street analysts had expected. They projected earnings of 44 cents a share on net interest income of $133.5 million, according to a survey by FactSet.
In January, BankUnited said it had considered selling itself to a bigger bank but decided to remain an independent company. BankUnited NA, its main banking subsidiary, had 94 branches in 15 Florida counties as of March 31. Herald National Bank has offices in Manhattan, Brooklyn and Long Island.
BankUnited president, chairman and CEO John Kanas is a well-known figure in that region. Before founding BankUnited, he built Long Island's diminutive North Fork Bank into a regional retail-banking powerhouse, consolidating local banks, thrifts and even a subprime mortgage lender.
North Fork Bank was purchased by Capital One Financial in 2008 as Capital One sought to expand from credit-card lending into traditional banking.
In May 2009, Kanas led a group of private-equity investors that bought BankUnited out of failure from the FDIC. The FDIC closes and sells off banks when regulators deem them to be low on capital or pose other risks. BankUnited has received $2 billion from FDIC as a result of their loss-sharing agreement.
BankUnited rose 17 cents to $24.44 in morning trading.
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