August 23, 2014

banking

Growing Interest in BankUnited

Federal regulators took over and sold BankUnited in May, but the bank won’t disappear, and in fact will likely get bigger. The bank’s new owners — a group of private equity firms — are investing $945 million, and the FDIC agreed to split future losses on the bank’s troubled portfolio of mortgages. That leaves the new BankUnited stable, with plenty of capital, and able to acquire new banks.

Amy Barry
Greg Bader

“I would imagine the FDIC plans to take other banks in the state that are not doing well or that are failing and to use BankUnited as a platform to merge those failing assets,” says Greg Bader, chairman of the banking and financial services practice at the Gunster law firm in Fort Lauderdale. Indeed, BankUnited’s new CEO, industry veteran John Kanas, has said he will be looking for acquisitions.

Private equity firms are more interested in acquiring banks and thrifts now because if they keep their ownership stakes under 25%, relaxed federal rules allow them to avoid regulation as controlling shareholders. The major partners in the bank holding company BU Financial Holdings — W.L. Ross & Co., Carlyle Investment Management and Blackstone Group — did just that. They will avoid the expense, scrutiny and required disclosures that the Office of Thrift Supervision would have sought, Bader says.

BankUnited may come under more pressure, Bader warns, as private equity owners may seek higher returns. But he also points out that the takeover by private equity — rather than by another bank — keeps Florida’s largest bank in Coral Gables and will likely mean few job losses.

The biggest potential obstacle to BankUnited’s success could be top management’s lack of expertise in the local market. “The success of the bank over the years has really depended upon its knowledge of the community and its support of local activities,” says George R. Harper, managing partner of the Harper Meyer Perez Hagen O’Connor & Albert law firm in Miami. “I don’t know how familiar they are with south Florida and the cultural mix down here.”

Tags: Miami-Dade, Banking & Finance

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