Tom Lindmark

BankUnited Expires

Wheelbarrow,
Here from the FDIC is what they said about their loss on Bank United.
The FDIC facilitated the transaction with John Kanas and a consortium of investors after BankUnited, FSB, was closed today by the Office of Thrift Supervision, which appointed the FDIC as receiver. The FDIC estimates that the cost to its Deposit Insurance Fund will be $4.9 billion. BankUnited's acquisition of all the deposits and assets of BankUnited, FSB was the "least costly" resolution for the DIF compared to alternatives.

Note the use of the word estimates. There is no way to know the cost of a resolution until all assets and liabilities have been finally eliminated.

Here is the link to the FDIC press release.

www.fdic.gov/news/news...

It always pays to check your sources.


On May 24 08:58 AM wheelbarrelsofcash wrote:

> LOL oh really - this is from Bloomberg "The BankUnited purchase will
> cost the FDIC $4.9 billion." and "BankUnited, based in Coral Gables,
> had $8.6 billion of deposits as of March 31 and lost money for three
> straight quarters amid surging defaults on option adjustable-rate
> mortgages" and "BankUnited joined 33 banks that have been seized
> since January. The lender had assets of $12.8 billion as of May 2,
> according to the FDIC, and its 86 offices will be open today during
> normal business hours. "
>
> If the 4.9 Billion claim is unsupportable why us the FDIC saying
> it will cost 4.9 billion?
>

BankUnited Expires

Wheelbarrow,

As usual Durden screwed up the numbers. The buyers agreed to assume $10.8 billion in assets of the failed bank. There is a loss sharing agreement between the buyers and the FDIC that calls for them to share in a certain percentage of the losses (I haven't seen the breakdown). Since the assets were cherry picked to begin with the total loss is likely to be small and how Durden can assert that it is $10.7 billion - the exact amount of the assumed assets - is beyond comprehension. Moreover, the assertion that the FDIC will lose $4.9 billion immediately is insupportable. The exact amount of the loss given the payout on uniusured deposits minus the recovery on assets not sold to the acquiror is an unknown at this point in time.

Lots of unsupportable data in this post.
> Bank United, FSB had assets of $12.80 billion
>
> I am confused by the numbers so is that 12.8 billion in assets after
> write offs for bad debt? Any idea of how much in loans they are holding
> because the FDIC stated they will "share" in losses up to 10.7 billion.
> I mean if the 12.8 billion amount is the amount of the banks loans
> that would put the projected loss on the loans at a whopping 83.5%!