BankUnited Fails in Florida, Marking Biggest Collapse of 2009

[Pale Blue Dot]

Source: Wall Street Journal

WASHINGTON -- Federal regulators seized the troubled Florida thrift BankUnited FSB on Thursday, a failure the Federal Deposit Insurance Corp. estimates will cost its insurance fund $4.9 billion.

BankUnited is the second costliest bank failure of the recent banking crisis, trumped only by IndyMac, which officials believe will cost the FDIC close to $11 billion.

BankUnited had $12.8 billion of assets and $8.6 billion in deposits.

Regulators said BankUnited was critically undercapitalized. The FDIC sold the banking operations to a management team headed by John Kanas, the former head of North Fork Bank.

The bank's 85 branches will reopen Friday during normal business hours. Mr. Kanas's team will acquire $12.7 billion of BankUnited's assets and $8.3 billion in nonbrokered deposits.

The FDIC and the new bank agreed to share future losses on roughly $10.7 billion in assets under the agreement. The new management also agreed to recapitalize the bank with $900 million in new money.

Read more: http://online.wsj.com/article/SB124294168567644901.html

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It's very unusual for the FDIC to do this on a Thursday night. It adds to my feeling that they will use the long Memorial Day weekend to do several failures.

[snot]

1. Biggest so far.

[the other one]

2. Maybe the regulators are taking a 4 day weekend

so they had to get this one done on a thursday.

[northernlights]

3. my thought exactly. nt

[Crabby Appleton]

4. Actually the regulators and bank employees will be working very

long days over the weekend to account for bank assets and liabilities and prepare reopen the bank under new ownership Tuesday. Check out this NPR report, it's more involved and more interesting than you might imagine:

Anatomy Of A Bank Takeover

http://www.npr.org/templates/story/story.php?storyId=102384657


"On a mid-January night, some 80 agents of the Federal Deposit Insurance Corp. pull into Vancouver, Wash. Their rental cars are generic, their arrival times staggered. One by one, agents check into a hotel, each quietly offering a pseudonym to the guy at the desk.

They're here to take over the Bank of Clark County, which the FDIC has decided is insolvent. It's the agency's job to insure American bank deposits and to step in when a bank fails. The FDIC tries to keep the planning for its operations top secret, to avoid sparking a panicked run on the bank.
"

[DemReadingDU]

5. more from ZeroHedge

Thursday, May 21, 2009
BankUnited Closed, FDIC Named Receiver, Sold To Ross, Carlyle, Blackstone
Posted by Tyler Durden at 5:33 PM

In an early precedent of Bank Failure Friday (and a LOT of work for the CNBC green shoot spin doctors for early Friday am consumption) BankUnited just expired, in the largest blow up of a bank to date in 2009. The bank will be "sold" to Carlyle, Blackstone and WL Ross. But why should Carlyle et al "pay up" for the asset when they can get Sheila Bair to use taxpayer money to backstop the entire sale for them. And when we are talking $12.8 billion in assets, it surely is much better to get Joe Q. Sixpack to make sure you (Wilbur Ross et al) don't have any risk exposure. After all, it worked so well for WaMu and JPM. The immediate cost to the FDIC will be $4.9 billion (and up to $10.7 billion based on the loss-sharing arrangement), which means that at this point the FDIC's DIF is negative with almost 100% certainty. Robbing from poor Peter to pay rich Paul continues.

And most curiously, just how does it work out that a bank with $10.7 billion in deposits has its loans assumed for $4.9 billion, or a 54% haircut on the loan book?

more...
http://zerohedge.blogspot.com/2009/05/bankunited-closed-fdic-named-received.html

FDIC: BankUnited Acquires the Banking Operations of BankUnited, FSB, Coral Gables, Florida
http://www.fdic.gov/news/news/press/2009/pr09072.html

[nc4bo]

6. My goodness gracious. This type of "big" news should have been all over M$M

and the newspapers as well as the topic of conversation at watercoolers and check-out lines nationwide.

Yet it's not. The first I hear about it is on DU.

Amazing, eh?

:wtf:

[Pale Blue Dot]

7. And even here, I'm sorry to say,

many people will either ignore it or dismiss it.

[nc4bo]

8. Unfortunately, you seem to be correct. nt

[CatholicEdHead]

9. People think they are safe with FDIC

so it does not rate any major news.

[Wednesdays]

10. K&R

:kick: