BankUnited collapse biggest this year
Discribed as "critically undercapitalized."
The new owners include WL Ross & Co., Blackstone Capital Management, Carlyle Investment Management and others. BankUnited, whose failure is the 34th for a bank this year, has $12.8 billion in assets, $8.6 billion in deposits and 86 branches. Last year, 25 banks failed.
Thrifts must have at least 65% of their lending in mortgages and other consumer loans, which has made them susceptible to difficulties and failure amid the mortgage-market meltdown. BankUnited specialized in a unique type of mortgage made to people living outside the U.S. who wanted to buy property in Florida. The housing slump has weighed heavily on Florida; the state suffered a 37% jump in foreclosures in April from March, the second-highest foreclosure rate in the U.S. Home prices fell 59% in the Cape Coral-Fort Myers, Fla., area in the first quarter, the steepest decline among the 152 metropolitan areas polled by the National Association of Realtors.
BankUnited's failure will cost the Federal Deposit Insurance Corp. about $4.9 billion. Last year's failure of IndyMac cost the FDIC $10.7 billion. Washington Mutual, which had $307 billion in assets, was the biggest thrift to collapse; it went under in September, at the height of the financial crisis, and was later bought by JPMorgan Chase (JPM, news, msgs).
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[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
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