CHESSNOID

Another big bank collapsed and was taken over by the FDIC which makes it the 34th bank victim of the recession.  This particular bank was the biggest one in Florida which is one of the highest foreclosure states along with California, Nevada, and Arizona.

CNN.Money:

The 34th bank to fail this year and the largest so far, BankUnited (BKUNA) had $12.8 billion in assets, $8.6 billion in deposits and 85 branches. The new institution will be named BankUnited.

Similar to a deal it did with IndyMac, the California mortgage bank that failed last July, the Federal Deposit Insurance Corp. will share in losses on about $10.7 billion in assets. The bank’s new owners will inject $900 million in new capital into the Coral Gables, Fla.-based institution.

The FDIC estimates it will take a $4.9 billion hit to its deposit insurance fund.

These bank failures usually come every Friday but this is a holiday weekend. I think we have averaged more than 1 bank closing every week.
During the S&L crisis we had many savings and loans fail but they weren’t as big. These big banks failing represent multiple branches. BankUnited had 85 branches.

Wall Street Journal:

Federal regulators seized Florida’s BankUnited FSB on Thursday, the biggest bank failure this year and one the Federal Deposit Insurance Corp. estimated will cost its weakened insurance fund $4.9 billion.

BankUnited, whose holding company is BankUnited Financial Corp., is the second-costliest bank failure of the financial crisis, trumped only by IndyMac, which failed in July at an estimated cost to the FDIC of about $11 billion. BankUnited’s failure underscores how hard it is for weak banks to survive after years of bad bets on real estate.

The FDIC’s deposit insurance fund had just $19 billion at the end of 2008 to backstop trillions of dollars in deposits. To replenish the fund, the agency is scheduled to vote Friday on a controversial plan to assess higher fees against more than 8,000 banks.

In addition, President Obama signed a bill into law Wednesday that allows the FDIC to borrow as much as $100 billion from the Treasury Department to shore up its fund, a measure the FDIC had sought for months.