Talk about going from bad to worse.

After adjusting its results to add $154 million to the provision for loan losses, BankUnited Financial Corp. in Coral Gables, Fla., said its thrift unit had negative capital levels at Dec. 31.

In a Securities and Exchange Commission filing late Friday, the $14 billion-asset company — which must find a buyer quickly or risk seizure — said that as of Dec. 31 its thrift's Tier 1 risk-based capital ratio had fallen to negative 0.2%, a deficit of $13 million.

The Office of Thrift Supervision issued a cease-and-desist order Sept. 19 requiring that ratio be 7%, and said in a prompt corrective action directive last week that it must be at least 4%.

The directive, which was dated April 14, also requires the company to sell itself or substantially all its assets within 20 days.

In the filing BankUnited seems to be suggesting that regulators might intercede even sooner.

The company said its inability to get its capital ratios to the specified levels is likely to lead to further regulatory action — including placing the thrift in receivership.

BankUnited is still in talks "with various parties" to raise capital and restructure its balance sheet, the filing said. "But we cannot assure you that in the current financial environment these negotiations will be successful and will result in a capital infusion prior to any potential actions that bank regulators might take."

An OTS spokesman would not discuss BankUnited, and the company did not return a phone call Monday.

Several observers said they doubt BankUnited will be able to sell itself.

Mark Muth and Brett Morris, analysts at Howe Barnes Hoefer & Arnett Inc., issued a research report Monday saying BankUnited's balance sheet — which is dominated by option adjustable-rate mortgages — would be extremely difficult, if not impossible, for a potential buyer to assess accurately.

Still, the analysts said, the company's 85 South Florida branches would be an attractive target, should the Federal Deposit Insurance Corp. put them up for sale.

They said the sizable deposit base — $8.6 billion at Dec. 31 — significantly limits the potential buyers, unless the FDIC opts to carve up the deposits into more manageable pieces. Those interested in an FDIC-assisted deal for the entire franchise could include BB&T Corp. or several of the foreign banking companies that have entered the state in recent years, such as Caja Madrid.

BB&T declined to comment. Caja Madrid did not respond to a request for comment by press time.

BankUnited said in its filing that regulators took prompt corrective action because they had rejected the capital restoration plan it had filed. It did not give details of the plan or specify what the objections were.

The company also said it is running out of cash and reiterated a warning that substantial doubt exists of its ability to remain a going concern. It had $22.7 million of cash on hand when its fiscal first quarter ended Dec. 31. It used $2.7 million of that to pay operating expenses for that quarter and $4.1 million for debt service.

The higher provision and cash crunch resulted from regulators' telling BankUnited to drop its "mortgage assistance program" this year, according to the filing. This required assuming higher loan delinquencies than the company had calculated previously.

It completed a review of its loan-loss allowance on April 10 and boosted the provision by $154 million.

BankUnited said that $147 million of the provision would be booked in the Dec. 31 quarter and $7 million in the Sept. 30 quarter. After the adjustment the thrift's allowance would be an estimated $927 million as of Dec. 31.

The company also added other-than-temporary impairment charges on its investment securities — $35.7 million in the Dec. 31 quarter and $4.6 million in the Sept. 30 quarter. In addition, it reduced the estimated market value of its investments by $30.3 million as of Sept. 30, the end of its 2008 fiscal year.

The adjustments deepen its estimated losses for those quarters. The company said when reporting preliminary results in January that it had lost $306 million in the Dec. 31 quarter. In December it nearly doubled its estimated loss for the Sept. 30 quarter, to $607 million.

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