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BANK UNITED OF TEXAS CERTIFICATES OF DEPOSIT 'F-2/BBB+', PREFERRED STOCK RAISED BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 21 /PRNewswire/ -- Bank United of Texas, FSB's short- and long-term certificates of deposit are rated 'F-2' and 'BBB+' by Fitch. In addition, the bank's series A noncumulative preferred stock is upgraded to 'BBB-' from 'BB+'. The credit trend is changed to positive from stable.
 The ratings and upgrade reflect the bank's low-risk profile, with more than 80 percent of its $8.2 billion assets invested in residential mortgage loans and mortgage-backed securities, increased equity through strong earnings and December 1992's preferred stock offering, and strong operating and risk controls. Offsetting these positive factors are the highly competitive Texas markets in which the bank operates, resulting in slow growth of the retail business, and the holding company's high double leverage of 134 percent as of March 31, 1993.
 Bank United continues to show strong profitability, with net earnings of $107.8 million for its fiscal year's first nine months ended June 30 compared to $57.2 million for the same period in 1992. The bank's 1993 annualized return on equity was roughly 34.5 percent and return on assets 2.0 percent. Revenues continue to reflect strong wholesale and mortgage banking operations. These areas have benefitted from the strong operating environment, including low interest rates and high mortgage loan refinancings over the past two years. In addition, the bank's earnings were boosted by securitizing some of its high premium residential mortgage loans, taking more than $40 million in one-time net gains.
 The bank's retail franchise, which operates 62 branches concentrated in Houston and Dallas/Ft. Worth continues to face strong competitive pressures. Also, asset and deposit growth have been difficult in this declining interest rate environment. However, Bank United is positioned to implement its strategy of relationship banking in select target markets with most of its branch acquisition consolidation behind it.
 Equity increased roughly 51 percent to $502 million since Sept. 30, 1992 due to retained earnings and the $85.5 million preferred stock offering. Accordingly, the bank's capital ratios have improved, with the tangible ratio at 5.47 percent and total risk-based capital ratio at 13.94 percent as of June 30, 1993, significantly exceeding regulatory requirements.
 -0- 9/21/93
 /CONTACT: Teri L. Seelig, 212-908-0638, or Nancy E. Stroker, 212-908-0533, both of Fitch/


CO: Bank United of Texas ST: Texas IN: FIN SU: RTG

SM -- NY045 -- 4166 09/21/93 12:31 EDT
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Publication:PR Newswire
Date:Sep 21, 1993
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