BankUnited Financial Corporation (NASDAQ:BKUNA) has been hitting the 52-week low club at a rate that feels almost daily. At $13.02 it is a dime under the prior 52-week low (of this week too) and down over 50% from the $28.79 52-week high and its market cap is now $460 million.
BankUnited already lowered guidance earlier this month. Unfortunately it is the ties to the Florida consumer and Florida real estate market that are an issue. Its lending activities comprise one-to-four-family residential mortgage loans, consumer loans, commercial real estate and multi-family loans, real estate construction loans, land loans, commercial loans, mortgage loans, and mortgage-backed securities. Earlier this year the lender said a Wall Street Journal article left the impression that it was involved in sub-prime mortgage lending, which it denied. It seems the damage may have been done and that Florida had more speculation and inflated values.
As of its latest stat sheet it listed 75 branches in 11 counties in Florida. These 52-week lows are actually 5-year lows. At its earnings warning the company gave guidance of $0.41 to $0.46, and that compares to $0.63 last year. Non-performing assets were listed as $210 million, or about 1.4% of assets, and the loan loss provision was put at $8 to $10 million for the quarter.
BankUnited repurchased approximately 315,000 shares of common stock during the quarter, less than originally anticipated, and noted that it would repurchase shares under its current authorization as appropriate. Each new day at 5-year lows might mark "an appropriate" time.
Jon C. Ogg
October 12, 2007
Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.