BankUnited Financial Corp. in Coral Gables, Fla., which has been opening roughly one branch a month since mid-2004, is raising $150 million to keep building in deposit-rich Florida.
The $11.3 billion-asset thrift company said Friday that it had agreed to sell 5.75 million shares of class A common stock at $26.99 a share to Keefe, Bruyette & Woods Inc. in a block trade. The stock sale is expected to be completed Wednesday, at which point the New York investment banking firm will market the stock to potential investors.
BankUnited chief executive Alfred R. Camner said in a conference call last week that it would use the proceeds to build 10 to 14 branches as far north as Tampa, and possibly to buy a bank.
"We're already in a strong growth pattern, and the opportunities are enormous now, so we want to continue that expansion," said Mr. Camner, who is also BankUnited's chairman.
BankUnited's last acquisition was in 1998, of the former Consumers Bancorp in Miami, which had assets of $102 million. Lately the parent of BankUnited FSB has been expanding by branch building - it has opened 20 branches throughout southern Florida in the last year and a half.
It now has 66 branches. It wants to expand into northern Florida eventually and has not ruled out raising more money to do that, spokeswoman Melissa Gracey said Thursday.
The new branches helped bring BankUnited's deposits to $5 billion at Dec. 31, up 34% from a year earlier. At June 30 it was No. 12 in deposit share in the state, according to Federal Deposit Insurance Corp. statistics, though it ranks slightly higher in some south Florida counties.
BankUnited's stock fell slightly the day it announced the secondary offering, but it has recovered. It was trading at $27.74 late Friday.
Laurie Hunsicker, an analyst at Friedman, Billings, Ramsey & Co. Inc. in Arlington, Va., said she was disappointed BankUnited chose to raise money through a secondary offering instead of issuing preferred stock or convertible senior notes.
Such a large offering of additional common stock, Ms. Hunsicker said, could dilute earnings per share for all of the outstanding shares, currently just over 35 million. But she added that the stock remains on Friedman's list of hot picks for 2006. Because BankUnited is "having this massive margin expansion," Ms. Hunsicker said, ultimately the EPS will be higher despite any dilution.
Though BankUnited's cost of funds has been rising steadily, its net interest margin improved to 1.97% at Dec. 31, from 1.84% a year earlier. This is mainly because 63% of its mortgage loan portfolio is tied to the Monthly Treasury Average index, so it continues to reprice upward. That helped BankUnited's net income rise 11.4%, to $16.2 million, in its first quarter. (Its fiscal year ends Sept. 30.)
The higher-than-expected margin expansion prompted Ms. Hunsicker to raise her fiscal 2006 earnings per share estimate on BankUnited to $2.15, from $1.82, and her fiscal 2007 estimate to $2.40, from $2.15.
"This stock is so cheap; it's trading at a 6% deposit premium," Ms. Hunsicker said. "We just love this stock."
Each share of class A common stock entitles the holder to a one-tenth vote, the company added.
Along with strong deposit growth, BankUnited is reporting solid loan growth. It had $8.9 billion of loans on its books at Dec. 31, up nearly 40% from a year earlier.
