News

Jan 29, 2011

Secret to Bank’s Comeback: A Rich Uncle Named Sam [wall street journal]

By ROBIN SIDEL

MIAMI LAKES, Fla.—Before BankUnited FSB collapsed in May 2009, employees lit candles and prayed that Florida’s biggest bank would survive the bad loans it made before the housing bubble burst.

The miracle came in the form of Uncle Sam, or more precisely, the Federal Deposit Insurance Corp., which sold the failed BankUnited to a group of Wall Street financiers led by a longtime New York banker. The FDIC agreed to reimburse as much as $10.5 billion in future loan losses—and gave the new owners $2.2 billion in cash. The buyers paid $945 million.

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