- Investor Consortium Acquires BankUnited with FDIC Assistance
- June 11, 2009
- Law Firm: Alston & Bird LLP - Atlanta Office
Today, after an extended auction, the OTS closed BankUnited, FSB, headquartered in Coral Gables, Florida and named the FDIC as receiver. The FDIC facilitated a transaction with a consortium of investors whereby BankUnited, a newly chartered federal savings bank, will acquire all of the banking operations of the failed bank. The consortium, led by John Kansas, former head of North Fork Bank, includes WL Ross & Co. LLC, Carlyle Investment Management L.L.C., Blackstone Capital Partners V L.P., Centerbridge Capital Partners, L.P., LeFrak Organization, Inc., The Wellcome Trust, Greenaap Investments Ltd., and East Rock Endowment Fund.
The FDIC reported that as of May 2, 2009, Bank United, FSB had assets of $12.8 billion and deposits of $8.6 billion. The new BankUnited will assume $12.7 billion in assets and $8.3 billion in non-brokered deposits. The FDIC and the new BankUnited entered into a loss-share transaction in which the FDIC will share in the losses on approximately $10.7 billion in assets covered under the agreement. The investor group will capitalize the new bank with $900 million in capital. The new BankUnited will not assume the approximately $348 million in brokered deposits. The FDIC will pay the brokers directly.
In its announcement of the transaction, the FDIC stated that "[d]ue to the interest of private equity firms in the purchase of depository institutions in receivership, the FDIC has been evaluating the appropriate terms for such investments. In the near future, the FDIC will provide generally applicable policy guidance on eligibility and other terms and conditions for such investments to guide potential investors."
BankUnited, FSB is the thirty-fourth bank to fail this year and the third in Florida. The FDIC estimates the cost to the Deposit Insurance Fund will be $4.9 billion.