BankUnited Financial Corp. said Friday it is laying off 12 percent of its work force because of the sputtering economy.
The Coral Gables, Fla.-based parent of BankUnited FSB also said it reached an agreement with its regulator, the Office of Thrift Supervision, on moves to boost its capital base.
It also said it will defer interest payments on $237 million of subordinated debt, which is allowable under the terms of the loan for up to 20 consecutive quarters, provided there is no default.
The bank plans to lay off about 160 people, mostly from its residential lending support and operations. The move is expected to save $11 million annually.
Mortgage activity has declined sharply, especially in Florida, California and the Southwest.
"Unfortunately in this unprecedented economic environment, it has become a necessary step" to reduce staff, the company said in a statement.
The agreement with regulators will, among other things, prevent the company from issuing any loans, including option adjustable rate mortgages, that may result in negative amortization. The company also may not originate any loans with reduced documentation or no documentation.
It was the proliferation of these types of subprime loans that helped cause the housing bubble, and they area the ones on which homeowners are defaulting at near record levels.
BankUnited shares rose 10 cents to 95 cents Thursday. The stock has been as high as $19.69 in the past year.
Email This Page!