Largest Independent Bank in Florida Fails
BankUnited F.S.B. Sold To Private Investors On Thursday, the Office of Thrift Supervision (OTS) closed troubled Florida lender BankUnited F.S.B., and a new chartered federal savings bank acquired the failed bank's operations. The new bank, BankUnited, FSB, has reopened today. It is the largest bank to fail thus far in 2009.The bank's 86 offices and branches make it the largest independent bank in Florida, as was its predecessor (BankUnited, FSB). The bank's management team is headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank.
Bank United, FSB had assets of $12.80 billion and deposits of $8.6 billion. The new BankUnited will assume $12.7 billion in assets and $8.3 billion in nonbrokered deposits.
The FDIC and BankUnited will share in the losses on approximately $10.7 billion in assets covered under the agreement. The loss-sharing arrangement will maximize returns on the covered assets by keeping them in the private sector. It is also expected to minimize disruptions for loan customers.
BankUnited will recapitalize the institution with $900 million in new capital, along with $4.9 billion from the FDIC's Deposit Insurance Fund. BankUnited F.S.B. is the most costly bank failure since the IndyMac failure in 2008, which cost the DIF more than $10 billion. BankUnited will not assume the approximately $348 million in brokered deposits. The FDIC will pay the brokers directly.
The FDIC facilitated the transaction after five months of negotiations with John Kanas and a consortium of investors including: WL Ross & Co.; Carlyle Investment Management; Blackstone Capital Partners; Centerbridge Capital Partners; L.P. LeFrak Organization, Inc; The Wellcome Trust; Greenaap Investments Ltd.; and East Rock Endowment Fund.
BankUnited, FSB is the 34th FDIC-insured institution to fail in the nation this year, and the third in Florida. The last Florida bank to be closed was Riverside Bank of the Gulf Coast, Cape Coral on February 13, 2009.
