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December 6, 2010
Regulators Close BankUnited FSB
| 05/21/09 06:54 PM |
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WASHINGTON Regulators on Thursday shut down BankUnited FSB, a
strugglingFlorida thrift whose closure is expected to cost the
Federal Deposit Insurance Corp. $4.9billion.
The failure of the Coral Gables, Fla.-based bank represents the
second-largest hit to theFDIC's insurance fund so far _ the
costliest was last year's seizure of California lenderIndyMac, on
which the FDIC is estimated to lose $10.7 bill ion.
BankUnited FSB is the 34th federally insured institution to be
closed this year, and thebiggest. The FDIC on Thursday took control
of the bank, which called itself Florida's largestbanking
institution with about $13 billion in assets as of May 2.
The Office of Thrift Supervision, a Treasury Department agency,
said Thursday thatBankUnited FSB reported $1.2 billion in losses
last year as defaults on loans piled up. Thethrift "was critically
undercapitalized and in an unsafe condition to conduct business,"
theagency said in a statement.
The bank has been sold to a group of investors led by John
Kanas, the former head ofNorth Fork Bank. It will re-open Friday as
a newly chartered savings bank calledBankUnited.
The new bank will assume $12.7 billion in assets and $8.3
billion of its total $8.6 billion
in deposits. In addition, the FDIC and the new bank agreed to
share losses on about $10.7billion in assets.
Deposits will be insured by the FDIC, and customers can continue
to use BankUnitedFSB checks, ATM cards and debit cards, the FDIC
said.
The failed bank's parent was BankUnited Financial Corp. It had
1,083 employees and 85branches, all in Florida, mostly located
along the state's southeast coast.
The 34 bank failures this year in the U.S. compare with 25 in
all of last year and three in2007. As the economy nationwide has
soured, amid rising unemployment, tumbling homeprices and soaring
loan defaults, bank failures have cascaded and sapped billions out
of thedeposit insurance fund. It now stands at its lowest level in
nearly a quarter-century _ $18.9bill ion as of Dec. 31, compared
with $52.4 billion at the end of 2007.
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The FDIC expects that bank failures will cost the insurance fund
around $65 billionthrough 2013.
The failure of IndyMac, which had $32 billion in assets, was the
second-largest last year,trailing only the September failure of
Washington Mutual Inc.
Thrifts have been the most troubled regulated institutions
during the financial crisis andamong the most spectacular failures.
By law, they must have at least 65 percent of theirlending in
mortgages and other consumer loans _ making them particularly
vulnerable to thehousing downturn. Seattle-based thrift Washington
Mutual was the biggest bank to collapsein U.S. history, with around
$307 bill ion in assets. It was later acquired by JPMorgan
Chase& Co. for $1.9 bill ion.
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