UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 21, 2009

 

 

BANKUNITED FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Florida   001-13921   65-0377773

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

 

255 Alhambra Circle, Coral Gables, Florida   33134
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (305) 569-2000

 

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 4.02(a) Non-Reliance on Previously Issued Financial Statements or a Related Audit Report of Completed Interim Review.

In preparing the Consolidated Financial Statements of BankUnited Financial Corporation (“BankUnited” or the “Company”) for the fiscal year ended September 30, 2008, the Company discovered an error affecting its consolidated statements of cash flows in certain prior periods that resulted from the misclassification of cash flows related to certain mortgage loans that had been originated or purchased with the intent to sell. The error solely affected the classification of these activities and the subtotals of cash flows from operating and investing activities presented in the affected consolidated statements of cash flows, but had no effect on net cash flows. In addition, the error had no effect on the Company’s consolidated statements of operations, consolidated statements of financial condition, consolidated statements of changes in stockholders’ equity or consolidated statements of comprehensive income/(loss). Accordingly, the Company’s total revenues, net income (loss), earnings (loss) per share, total cash flows, cash and cash equivalents, regulatory capital, liquidity, and equity capital remain unchanged for the periods affected. The Company’s compliance with any financial covenants under its borrowing facilities was also not affected.

The mortgage loans discussed above were initially exchanged for mortgage-backed securities which were immediately sold for cash proceeds on the same day. Previously, the cash receipts from the sales of the mortgage-backed securities were reflected as investing activities instead of operating cash inflows. Statement of Financial Accounting Standards No. 102, “ Statement of Cash Flows—Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale,” requires that cash receipts from the sales of securities that are acquired specifically for resale be classified as operating cash flows. Additionally, mortgage-backed securities that are not immediately sold, but are held with the intent to sell, must be carried in a trading account. The Company did not hold any of the mortgage-backed securities received in exchange for loans originated for sale.

On January 21, 2009, management recommended to the Audit Committee of BankUnited’s Board of Directors that the Company’s previously issued consolidated financial statements for the fiscal years ended September 30, 2007, 2006 and 2005 included in the Company’s previously filed Annual Report on Form 10-K for the year ended September 30, 2007, and the quarterly consolidated financial statements included in quarterly reports on Form 10-Q for the related periods, should no longer be relied upon because of the error in the statements of cash flow and that the consolidated statements of cash flows for such periods should be restated.

The Board of Directors agreed with the above conclusions. In addition, management and the Audit Committee have discussed these matters with the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP.

The Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008, which is being prepared for filing, will include the restated consolidated statements of cash flows for the fiscal years ended September 30, 2007 and September 30, 2006. Subsequent quarterly reports on Form 10-Q will reflect restated consolidated statements of cash flows for the comparative period.

Presented below is a summary presentation of these cash flow restatements for each of:

 

   

the fiscal years ended September 30, 2007, September 30, 2006 and September 30, 2005;

 

   

the nine-month periods ended June 30, 2008, June 30, 2007, June 30, 2006 and June 30, 2005;

 

   

the six-month periods ended March 31, 2008, March 31, 2007, March 31, 2006 and March 31, 2005; and

 

   

the three-month periods ended December 31, 2007, December 31, 2006, December 31, 2005 and December 31, 2004.


(Dollars in thousands)

   As Previously
Reported
    Adjustment     As Revised  

September 30, 2007 (1):

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 821,047     $ 291,442     $ 1,112,489  

Net cash used for operating activities

     (433,176 )     291,442       (141,734 )

Proceeds from sale of mortgage-backed securities available for sale

     303,113       (291,442 )     11,671 )

Net cash used for investing activities

     (471,311 )     (291,442 )     (762,753 )

Net cash used for financing activities

     1,350,767       —         1,350,767  

September 30, 2006 (1):

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 368,667     $ 163,289     $ 531,956  

Net cash provided by (used for) operating activities

     (14,000 )     163,289       149,289  

Proceeds from sale of mortgage-backed securities available for sale

     163,289       (163,289 )     —    

Net cash used for investing activities

     (2,928,527 )     (163,289 )     (3,091,816 )

Net cash provided by financing activities

     2,771,131       —         2,771,131  

September 30, 2005(1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 68,342     $ 178,340     $ 246,682  

Net cash provided by (used for) operating activities

     (110,011 )     178,340       68,329  

Proceeds from sale of mortgage-backed securities available for sale

     482,320       (178,340 )     303,980  

Net cash used for investing activities

     (1,769,294 )     (178,340 )     (1,947,634 )

Net cash provided by financing activities

     1,935,462       —         1,935,462  

June 30, 2008 (1):

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 256,065     $ 734,488     $ 990,553  

Net cash provided by (used for) operating activities

     (647,799 )     734,488       86,689  

Proceeds from sale of mortgage-backed securities available for sale

     734,488       (734,488 )     —    

Net cash provided by (used for) investing activities

     1,254,247       (734,488 )     519,759  

Net cash used for financing activities

     (662,269 )     —         (662,269 )


(Dollars in thousands)

   As Previously
Reported
    Adjustment     As Revised  

June 30, 2007 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 740,828     $ 158,134     $ 898,962  

Net cash used for operating activities

     (224,357 )     158,134       (66,223 )

Proceeds from sale of mortgage-backed securities available for sale

     169,805       (158,134 )     11,671  

Net cash used for investing activities

     (382,674 )     (158,134 )     (540,808 )

Net cash provided by financing activities

     823,552       —         823,552  

June 30, 2006 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 22,181     $ 132,573     $ 154,754  

Net cash provided by (used for) operating activities

     (53,945 )     132,573       78,628  

Proceeds from sale of mortgage-backed securities available for sale

     132,573       (132,573 )     —    

Net cash used for investing activities

     (2,205,220 )     (132,573 )     (2,337,793 )

Net cash provided by financing activities

     2,132,302       —         2,132,302  

June 30, 2005 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 54,501     $ 110,344     $ 164,845  

Net cash provided by (used for) operating activities

     (85,938 )     110,344       24,406  

Proceeds from sale of mortgage-backed securities available for sale

     162,930       (110,344 )     52,586  

Net cash used for investing activities

     (1,215,415 )     (110,344 )     (1,325,759 )

Net cash provided by financing activities

     1,227,071       —         1,227,071  

March 31, 2008 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 184,586     $ 475,560     $ 660,146  

Net cash used for operating activities

     (503,401 )     475,560       (27,841 )

Proceeds from sale of mortgage-backed securities available for sale

     475,560       (475,560 )     —    

Net cash provided by investing activities

     734,054       (475,560 )     258,494  

Net cash used for financing activities

     (581,183 )     —         (581,183 )


(Dollars in thousands)

   As Previously
Reported
    Adjustment     As Revised  

March 31, 2007 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 703,541     $ 79,554     $ 783,095  

Net cash used for operating activities

     (85,599 )     79,554       (6,045 )

Proceeds from sale of mortgage-backed securities available for sale

     91,225       (79,554 )     11,671  

Net cash used for investing activities

     (36,520 )     (79,554 )     (116,074 )

Net cash provided by financing activities

     303,318       —         303,318  

March 31, 2006 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 23,593     $ 94,943     $ 118,536  

Net cash provided by (used for) operating activities

     (30,882 )     94,943       64,061  

Proceeds from sale of mortgage-backed securities available for sale

     81,406       (81,406 )     —    

Proceeds from repayments of mortgage-backed securities available for sale

     220,577       (13,537 )     207,040  

Net cash used for investing activities

     (1,614,481 )     (94,943 )     (1,709,424 )

Net cash provided by financing activities

     1,497,985       —         1,497,985  

March 31, 2005 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 44,052     $ 60,966     $ 105,018  

Net cash provided by (used for) operating activities

     (14,397 )     60,966       46,569  

Proceeds from sale of mortgage-backed securities available for sale

     114,465       (60,966 )     53,499  

Net cash used for investing activities

     (648,229 )     (60,966 )     (709,195 )

Net cash provided by financing activities

     544,910       —         544,910  

December 31, 2007 (1):

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 139,904     $ 240,408     $ 380,312  

Net cash provided by (used for) operating activities

     (238,242 )     240,408       2,166  

Proceeds from sale of mortgage-backed securities available for sale

     240,408       (240,408 )     —    

Net cash provided by investing activities

     348,033       (240,408 )     107,625  

Net cash used for financing activities

     (549,022 )     —         (549,022 )


(Dollars in thousands)

   As Previously
Reported
    Adjustment     As Revised  

December 31, 2006 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 517,082     $ 33,448     $ 550,530  

Net cash used for operating activities

     (106,113 )     33,448       (72,665 )

Proceeds from sale of mortgage-backed securities available for sale

     33,448       (33,448 )     —    

Net cash used for investing activities

     (49,364 )     (33,448 )     (82,812 )

Net cash provided by financing activities

     201,779       —         201,779  

December 31, 2005 (1) :

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 11,172     $ 52,530     $ 63,702  

Net cash provided by (used for) operating activities

     (26,214 )     52,530       26,316  

Proceeds from sale of mortgage-backed securities available for sale

     52,530       (52,530 )     —    

Net cash used for investing activities

     (690,441 )     (52,530 )     (742,971 )

Net cash provided by financing activities

     570,202       —         570,202  

December 31, 2004 (1):

      

Proceeds from sale of loans held for sale, including those sold as mortgage-backed securities

   $ 26,516     $ 31,534     $ 58,050  

Net cash provided by (used for) operating activities

     (13,014 )     31,534       18,520  

Proceeds from sale of mortgage-backed securities available for sale

     86,114       (31,534 )     54,580  

Net cash used for investing activities

     (323,740 )     (31,534 )     (355,274 )

Net cash provided by financing activities

     199,626       —         199,626  

 

(1) There was no change in cash and cash equivalents for any of the periods restated.

The failure to adequately identify and properly classify such proceeds in the Company’s consolidated statements of cash flow is similar to the material weakness in internal control over financial reporting that was discussed previously in the Company’s Notification of Late Filing on Form 12b-25, filed on December 16, 2008 (“Notice of Late Filing”). The Notice of Late Filing disclosed a material weakness whereby the Company did not maintain a sufficient complement of accounting personnel with sufficient expertise and understanding in the application of accounting principles. In this case, the Company did not maintain a sufficient complement of personnel with a sufficient level of accounting knowledge and expertise in order to accurately prepare its cash flow statements. As a result, management’s report on internal control over financial reporting as of September 30, 2007 included in the Form 10-K for the year ended September 30, 2007 should no longer be relied upon. Since we have not completed our assessment of the effectiveness of our internal control over financial reporting as of September 30, 2008 using criteria established in “Internal Control—Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), we may have additional material weaknesses to report in the Annual Report on Form 10-K for the year ended September 30 2008.

 

Item 8.01 Other Events.

The Notice of Late Filing stated that we did not anticipate filing the 2008 Annual Report on Form 10-K until January 2009. Based upon various factors, including an in-depth review of our methodology for calculating our allowance for loan and lease losses (“ALLL”), we currently do not anticipate filing our Annual Report on Form 10-K until the


end of February 2009. Subsequent changes to the anticipated filing date will be communicated as they become apparent.

In the Notice of Late Filing we stated that we expected to report a loss of approximately $327 million in the fourth fiscal quarter of 2008; however, at the time of the filing, our ALLL analysis was not yet completed. Additional review of the Company’s ALLL reserve indicates that the loss for the fourth quarter of fiscal 2008 will be approximately $607 million, resulting in a loss for 2008 of approximately $816 million. The final ALLL analysis, as well as the completion of our analysis of certain other accounts, may adversely affect the amount of our loss for the fiscal year ended September 30, 2008. The following table sets forth information concerning our non-performing assets at the dates indicated:

 

       September 30,
2008

(Unaudited)
   September 30,
2007
   September 30,
2006

Non-accrual loans

   $ 1,237,775    $ 180,810    $ 20,740

Accruing loans more than 90 days past due as to interest or principal

     71      23      —  
                    

Total non-performing loans

     1,237,846      180,833      20,740

Repossessed assets other than real estate owned

     —        51      —  

Real estate owned, net

     145,724      27,681      729
                    

Total non-performing assets

   $ 1,383,570    $ 208,565    $ 21,469
                    

Based upon a preliminary fourth quarter loss of $607 million, the Bank’s Tier I Core Capital ratio was 3.4% and total risk-Based Capital ratio was 7.1% as of September 30, 2008. The Company remains committed to complying with the Consent Order of September 30, 2008 entered into with the Office of Thrift Supervision (the “Order”); however, based on continuing losses and the inability to raise additional capital, the Bank was unable to reach the minimum Tier I Core Capital ratio of 7% and minimum Total Risk-Based Capital ratio of 14% at December 31, 2008 required by the Order. The Company continues negotiations to raise capital and restructure its balance sheet to comply with the ratios set forth in the Order. We cannot assure you that these negotiations will be successful. If such negotiations are not successful, it is highly unlikely that we will be able to continue as a going concern. Additionally, since the Bank is not in compliance with the portion of the Order requiring certain capital ratios by December 31, 2008, bank regulators could take enforcement action, which could include placing the Bank into receivership.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    BANKUNITED FINANCIAL CORPORATION
Date: January 27, 2009    
  By:  

/s/ Humberto L. Lopez

  Name:   Humberto L. Lopez
  Title:   Senior Executive Vice President and Chief Financial Officer
Bankunited Fin Corp (MM) (NASDAQ:BKUNA)
Historical Stock Chart
From Jun 2024 to Jul 2024 Click Here for more Bankunited Fin Corp (MM) Charts.
Bankunited Fin Corp (MM) (NASDAQ:BKUNA)
Historical Stock Chart
From Jul 2023 to Jul 2024 Click Here for more Bankunited Fin Corp (MM) Charts.