Bank United of Texas Reports 6% Increase in Profits

HOUSTON - Bank United of Texas reported operating earnings of $22.1 million for the quarter ended March 31, a 6% increase over income in the year-ago period. Year-to-date operating earnings are $53.4 million, compared with $51 million for last year's period.

Operating results were affected by rapidly rising interest costs related to the bank's adjustable-rate mortgage portfolio. This was mitigated by an increase in interest-earning assets, including single-family asset acquisitions and increases in construction lending.

The higher rates reduced the level of the bank's mortgage loan production, but the effect was partially offset by the increased fee income of a larger servicing portfolio.

Recent declines in interest rates should improve the bank's interest margins on its ARMs and may increase mortgage production, the bank said.

Total assets increased to $10.1 billion, vs. $7.8 billion at March 31, 1994, while stockholders' equity increased to $669 million from $604 million in the same period.

The bank increased its loan servicing portfolio to $12 billion, from $9 billion at the end of the quarter a year ago.

Bank United operates a mortgage banking network of 131 offices in 32 states.