Cheeky BankUnited Recruiting Letter

The Carlyle Group et al purchased BankUnited from the FDIC. John Kanas, investor and CEO, is trying to separate BankUnited from competitors with an unhappyfloridabankers website, complete with sample resignation letter. Might I suggest an alternative:

Dear ( Bank CEO’s name ):

It is with great gladness that I tender my resignation. As you know, I have for some time now felt very frustrated due to the fact that I am not able to provide my customers with the services they need. Some customers are in dire financial straights, especially ex-shareholders of the old BankUnited. They were zeroed out when John Kanas, the Carlyle Group and a smattering of financial vultures took over the stinking carcass of BankUnited, once Florida's largest bank.

I remember when things were different, when a bank could make it through sound loans. Times change. BankUnited is proof of junk lending practices. The FDIC provided a $4.9 billion subsidy for private equity underwriters (PEU's) in the BankUnited deal.

Don’t take this wrong, I could not ask for a better group of colleagues, but I want to double my income. Therefore, it is time for me to move on, to take my piece of the BankUnited public subsidy pie. I have accepted a position under John Kanas at BankUnited, only I'll be stationed in Florida, while he works from New York City.

I can bilk commercial customers, while ignoring retail ones, just like we used to.
Best wishes,

( “your best employee” )

P.S. If you would like to join me in leeching off the taxpayer at BankUnited, I'll put a good word in for you. Be a PEU captive banker at BankUnited..

Double your income, in most cases... now, that's a PEU promise. Who pays for that? Commercial customers or subsidizers, i.e. the public.

Carlyle-eeze for BankUnited Equity Holders

When the FDIC seized BankUnited, equity holders lost out. Bidders clearly lobbied for zeroing out shareholders. Here's what The Carlyle Group & Company offered in the way of information to former BU share "bag holders":

Question: What about my shares of stock, notes or subordinated notes that I own in BankUnited Financial Corp.?

There was no publicly owned stock in BankUnited, FSB. If you are an equity shareholder, your shares are in BankUnited Financial Corp. in Coral Gables, the holding company for BankUnited, FSB, and not the institution. BankUnited Financial and the interests of equity, debt holders or other creditors of BankUnited Financial are not included in the closure or receivership of the institution. Any claims by equity holders were not acquired by the assuming institution. Please do not file a claim with the Receiver; instead, you should contact BankUnited Financial directly for information.

Contact the FDIC and Treasury. They're the pair arranging sweet deals for private equity underwriters.

Question: Will I continue to earn interest at the same rate? Will I be charged an early withdrawal penalty?

BankUnited will be reviewing rates and will notify you.

The PEU boys win again. It's a familiar refrain.

Obama's BankUnited Givaway?

On March 31, 2009 BankUnited had nearly $4.8 billion in advances from Federal Home Loan Bank on its balance sheet. What happened to that obligation in the sale of BankUnited to prominent private equity underwriters (PEU's)? The press release is unclear in this regard. It states:

BankUnited Financial Corporation (bank holding company for shuttered BankUnited) and the interests of equity, debt holders or other creditors of BankUnited Financial Corporation are not included in the closure or receivership of the institution. Any claims by equity holders were not acquired by the assuming institution.

BankUnited shareholders were zeroed out, helping to make the deal more attractive to Blackstone and The Carlyle Group. The FDIC expects the deal to cost it $4.9 billion. They didn't spell out a breakdown for the nearly $5 billion subsidy. How much is upfront money to the PEU boys and how much is loan loss sharing?

If shareholders and the FHLB got zeroed out, BankUnited instantly became the best capitalized bank in the U.S.

PEU owned BankUnited announced a new strategy, focusing on corporate loans. Private equity needs a captive bank with huge amounts of debt refinancing between now and 2014. Branches become disposable in such a scenario.

While it's possible the FHLB loans were transferred in the deal, some other arrangement could've been made. Debt holders can be crammed down before or during bankruptcy. The FDIC has questions to answer.

It may end up like AIG, a long process with copious amounts of Obama minion obfuscation. I can't wait for Tim Geithner to put PEU's, apple pie and Chevrolet together in one sentence.

Wave a flag, shed a tear for the patriotic PEU boys! They're saving "George Bailey" using the community chest. Behind the scenes, they plot how to grow Pottersville tenements? It's an Obama PEU Life!

BankUnited's Multiple Milkings: $2.3 Billion in FDIC Cash

BankUnited (BU) filed for a $300 million IPO, less than the predicted $500 million amount.  BU's SEC filings show how the bank's private equity owners benefited.  When the original deal closed, with $4.9 billion in FDIC loss sharing, new owners imposed a transaction fee.  The Carlyle Group, Blackstone, Centerbridge and WL Ross charged BU $20 million.

In consideration of the Key Parties conducting the financial and structural analysis, due diligence investigations, and negotiations described above, the Company will pay to each Key Party the following transaction fee:

(a)       to Blackstone a fee of $5,284,360.19

(b)       to Carlyle a fee of $5,284,360.19

(c)       to Centerbridge a fee of $4,146,919.43

(d)       to WL Ross a fee of $5,284,360.19

Each of the above parties has the right to appoint a board member and have a non-voting representative in attendance.

The Carlyle Group's BU holdings are in two funds, DBD Cayman, Ltd. and TGC Holdings, LLC.  Carlyle's holdings in Hampton Roads Bankshares sit offshore in DBD Cayman.  This FDIC approved offshore corporate investments in failed or struggling U.S. banks.  Highlights from the S-1 include:

BankUnited made a $120 million profit in eight short months.

On September 17, 2010, BU declared a quarterly dividend of $14.0 million. In addition, on October 19, 2010, the bank declared a special one-time dividend of $6.0 million.

That's two $20 million bleedings by investors.  Not bad for a year and a half. But it pales relative to Uncle Sam's generosity.

Cash received from FDIC related to business combination, net--$2,274,206,000

At June 30, 2010, BankUnited was one of the most well-capitalized banks in the United States

It's no wonder, with $2.3 billion in FDIC cash.  Investors put up $945 million, roughly one third of initial capitalization.  What did the FDIC get?  Warrants for 10% of the company.  Sheila Bair should be embarrassed.

Update 1-26-11:  BankUnited is expected to go public this week.   PEU Investors are the primary sellers of 26 million shares of stock at an expected price of $23 to $25.  How will Uncle Sam get back $2.3 billion in FDIC cash? They won't.  Others got rich on the deal. 

ESPN aired the University of Miami-UNC basketball game.  Miami's home arena is the BankUnited Center.  Miami President is Donna Shalala, former Clinton official.  The facility opened in 2003.  No name change was necessary given Uncle Sam's generous aid to BankUnited.

Update 2-12-2011:  Who got rich on the BankUnited IPO?  Not Uncle Sam, who put up 2/3 of the initial recapitalization...

Update 3-9-12:  Palm Beach Post finally sniffed out Carlyle and company's sweetheart deal.

PEU's to Exit BankUnited?

Reuters reported:

Private equity-backed BankUnited Inc has hired Goldman Sachs Group to explore a potential sale.

That's the widely hated Goldman Sachs helping private equity underwriters complete their profitgasm on BankUnited.  

BankUnited was taken over and recapitalized by private investors such as Wilbur Ross's WL Ross & Co, Blackstone Group LP and Carlyle Group CYL.UL during the financial crisis, and went public in January 2011.

Reuters omitted the FDIC's $2.27 billion cash injection in BankUnited.  This non-debt, non-equity capital injection made BankUnited the best capitalized bank in America.  Where can others line up for 72 cents on the dollar of free money?  Oh, the game is for PEU's only.  Dang!


PEU's may soon flip the 28 cents on the dollar they put up for BankUnited,, but they'll get 100% of the profits.  BankUnited took in $780 million in their 2011 IPO. Add $40 million in transactions fees, dividends and special dividends and PEU investors have nearly free shares.  BU's owners initial investment was $900 million.  Will it be a double, triple or quadruple? 

BankUnited's PEU Cash In Part Deux

FDIC's Sheila Bair subsidized the private equity rescue of BankUnited with $2.27 billion in cash.  Private equity underwriters (PEU's) monetized their initial chunk of BankUnited a mere year after "saving it."  They're ready for Monetizing:  Round 2.

Among the largest PEU shareholders of BankUnited:

• The Blackstone Group, which owns 8.3 million shares of common stock, is selling 4.8 million shares. Some of the shares it would sell will be converted from Series A Preferred Stock.
• The Carlyle Group, which owns 13.7 million shares, would sell 4.8 million of them.
• WL Ross & Co., controlled by Palm Beach billionaire Wilbur Ross, would also sell 4.8 million of its 13.7 million shares.
• Centerbridge Partners, which owns 10.8 million shares, would sell 3.8 million of them. 

The shares priced at $25.25, giving $495 million to BankUnited's PEU owners.  This compares unfavorably to the $27 IPO price which brought in $780 million.  The two offerings total $1.27 billion.  BankUnited's PEU owners invested $900 million.  They're already in the green with over half their initial shares left thanks to the FDIC. 

BankUnited to Join Bedbugs in Invading New York?

WSJ reported:

BankUnited, the Florida bank acquired last year by private-equity firms, has set its eye on territory far from the Sunshine State: If it has its way, it will take Manhattan.

In about two years, the bank hopes to be in Manhattan, through acquisitions or branch openings; such a move would combine two of the nation's most attractive deposit markets, New York City and Florida. 

First bedbugs, then BankUnited.   Somehow, this seems appropriate for a PEU sponsored bank.  (PEU stands for private equity underwriter)..


Update 10-27-10:  It turns out BankUnited already had a presence in New York, via a $1 billion mortgage securitization.  Who holds liability for any fraud committed by the old BankUnited?  Is that part of Sheila Bari's $4.9 billion subsidy?   Surely, Carlyle & company didn't take on that risk.  That would put a damper on their $500 million IPO, expected to return "some cash" to investors.  As the S-1 is not yet available, details are unknown.  Many see the IPO as potential egg on Sheila Bair's face.

Update 5-31-11:  BankUnited may enter New York via an acquisition, Herald Bank.  

Corzine & Sarkozy: Neither About Transparency

MF Global's Jon Corzine pretended to be honest and accountable in testifying before Congress on his firm's thievery of customer money.  Like BP's Lord John Browne and Tony Hayward, Corzine implied incompetent underlings caused the disaster.  Dealbook reported:

"In theory, an employee may have misused customer cash after misinterpreting the chief executive’s words."

So one employee pulled $1 billion of customer assets into MF Global's trading money?  That defense is patently laughable.  Jon Corzine testified before Congress to manage his personal risk. The insider suck up included:

One congressman even congratulated the former Goldman executive on achieving considerable wealth.

Corzine's acts caused market dislocation.  Olivier Sarkozy, another insider with The Carlyle Group, offered his assessment as to how private equity underwriters can help in turbulent times:

It is very hard for traditional (debt) issuers to provide enough clarity to the public market investor to allow that investor to make an informed, risk-adjusted decision. The assets are simply too large and the leverage too great to allow those markets to operate efficiently in times of dislocation.

 Olivier says PEUs are the answer:

"That is where private equity can step in and provide that transparency because we can underwrite these balance sheets. It takes a lot of time and effort, but it is possible to do. In that context we become the most efficient source of capital to the industry and that is where the opportunity lies," he said.

Carlyle and company took $2.3 billion in FDIC cash to recapitalize BankUnited. 

BankUnited was floated in February this year and Carlyle made 2.7 times its money on its investment.

Carlyle wasn't transparent.  It wasn't until BankUnited's public offering when Carlyle revealed the extent of FDIC funding in BankUnited's recapitalization.  Carlyle held BankUnited a year before filing for an IPO.

Congress provided a stage for Jon Corzine to offer his bunk and happily ignored the huge public subsidy for PEUs via BankUnited.  The Carlyle Group's IPO revealed the firm to be a virtual nonprofit, given its incredibly low tax burden (a highly symbolic 1%). It's a PEU world for elected and greedy business people.

Carlyle Group's New Bank to Focus on Commercial Loans

What a surprise! "Credit impinged" private equity underwriters (PEU's) have a brand spanking new BankUnited Federal Savings Bank. It's ready to cater to the commercial sector of the economy. The timing couldn't be better. Carlyle's David Marchick told the Senate about a staggering amount of loans that need refinancing from 2010 to 2014. BankUnited stands ready to help.

South Florida BizJournals reported:

John Kanas, BankUnited's new leader, said Florida’s largest local bank will focus on attracting commercial and small business loans.

Kanas said he will continue to live in New York, but will commute to Coral Gables and stay there several days a week. He said he will use his business contacts in the Northeast to find many investors eager to make deals in South Florida.

In addition to going after commercial, industrial and small-business loans, he said BankUnited will start seeking more business deposits, in addition to its retail deposit base.

The Carlyle Group has hundreds of affiliates. Are any candidates for BankUnited's services? What about Blackstone's corporate assets? Do they need commercial catering? The PEU boys have a captive bank. I feel a credit thaw coming. It's aided by $4.9 billion in FDIC support.

When will they implement the PEU model of shedding low performing branch offices? It took a whole day.

Update 6-15-10: BankUnited successfully made the transition to commercial lending.

BankUnited Planning IPO

The Carlyle Group, Wilbur Ross, Blackstone Group and Centerbridge Partners selected underwriters for a BankUnited independent public offering (IPO). According to Bloomberg underwriters include Bank of America, Deutsche Bank AG, Goldman Sachs and Morgan Stanley.




The FDIC recapitalized BankUnited via a $4.9 billion subsidy. Carlyle and company have owned BankUnited 15 months. Recall concerns over private equity underwriters holding banks a short period of time before cashing in? Where does 15 months fit?

Once public, will BankUnited acquire other banks? Let the government supported windfalls continue. It's a shame some people are making big money off public assistance.


Update 9-12-10: Bloomberg reported on "plans to raise more than $500 million" via the IPO, said people with knowledge of the matter. The initial public offering would raise capital for acquisitions, while "returning some cash to the owners."  WSJ reported on who got rich from BU's IPO.

BankUnited Now PEU Free

BusinessWire reported:

BankUnited, Inc. (NYSE:BKU) (the "Company") announced today the closing of the sale of 11,853,276 shares of common stock by investment funds affiliated with The Blackstone Group, The Carlyle Group, WL Ross & Co. LLC and Centerbridge Partners, L.P. (the "Selling Stockholders"). Upon the closing, the Selling Stockholders no longer own any shares in the Company.

The PEU profitization is complete, thanks to $2.27 billion in cash from Sheila Bair's FDIC to the BankUnited's private equity owners.  The FDIC eventually subsidized BankUnited to the tune of $5.9 billion.

Here's how Carlyle fared after putting up 22% of roughly $900 million to takeover BankUnited from the FDIC.  Carlyle sold their 20.4 million shares for an average price of $28.60 per share in a series of stock offerings.  Carlyle's $200 million investment turned into  $585 million in proceeds, a $385 million profit.

Sheila Bair not only saved the banking system, she gave Carlyle one of their quickest and most profitable financial investments.  That's a sweet combination in today's PEU world.  Put her on a PEU owned bank board!

Beware Bair's Naming to Bank Board

Former FDIC Chair Sheila Bair gifted BankUnited to a consortium of private equity underwriters (PEU's) in the midst of the financial crisis.  After getting $2.4 billion in cash from the FDIC, BankUnited's PEU owners took the bank public a mere year after "saving it."  They stand ready to cash in further.  South Florida Business Journal reported:

BankUnited announced that its largest shareholders would sell a combined 8 million shares to the public in a secondary stock offering.

The Miami Lakes-based company (NYSE: BKU), the owner of the largest bank based in South Florida, said it would not receive any proceeds from the sale of its stock by the Blackstone Group, The Carlyle Group, WL Ross & Co. LLC and Centerbridge Partners.

Oddly, she dinged Tim Geithner's decision to cash in big as a PEU.

Former FDIC Chair Sheila Bair on Wednesday defended ex-Treasury Secretary Timothy Geithner's move to the private equity firm Warburg Pincus, but delivered a backhanded compliment to Geithner in the process.

When asked about the revolving door between Washington and Wall Street during an interview with HuffPost Live, Bair said that some people are actually better suited for the banking world than for policymaking -- and Geithner might be one of them.

"I don't think people should go work for entities they regulated, and Tim didn't, and I have not criticized Tim for that," Bair said.

After making this statement Sheila Bair accepted a board position with Banco Santander. (She already serves on the Host Hotels Board, think Marriott).

Santander values Bair’s experience and knowledge of financial markets in the U.S. where the bank runs retail banking and auto-loan businesses.

Apparently Bair's mirror offers little reflection.  Santander USA's largest shareholders is its Spanish parent and a number of PEU's, including Tim Geithner's Warburg Pincus Private Equity, KKR and Centerbridge (amply enriched in Bair's BankUnited gifting).

The little spat between Bair and Geithner is for public consumption.  Bair enriched PEU's as FDIC Chair and its time for PEU's to return the favor.  

Update 3-16-14:  FT mentioned Warburg's ownership stake in Santander

Update 3-27-14:  Sheila Bair's Banco Santander failed the latest round of Federal Reserve stress tests, as did Citigroup. 

FDIC Crams Down Shareholders, Carlyle Group's Bid Wins BankUnited

The FDIC shuttered BankUnited, zeroing out equity holders. It then sold the firm's assets to a consortium including The Carlyle Group, a private equity underwriter (PEU).

The deal will cost the FDIC $4.9 billion. How much deal financing did Uncle Sam provide? Bloomberg's piece didn't say. Washington BizJournals said Carlyle & company "invested $900 million in a new depository institution acquiring the operations of BankUnited."

Thirty three banks and five credit unions failed since January 2009. PEU's can buy a majority stake in credit unions and savings & loans, thanks to a recent Obama administration change. It's unclear if the Fed will apply the same rule to banks.

IndyMac was sold to a consortium of shadow bankers, hedge funds & PEU's. BankUnited is the second bank to land in the hands of the greed & leverage boys.

How long before corporate raiders turn to captive banks for deal financing?

PEU's Win Big with BankUnited

Last Thursday, the FDIC gifted BankUnited to Blackstone and The Carlyle Group. The private equity underwriters (PEU's) own between 20 and 25% of the Florida bank. The FDIC estimates their subsidy of the deal at $4.9 billion. Alibaba.com noted the sterling outcome for the PEU boys:

BankUnited, a smaller player in a Florida market dominated by giants like Bank of America and Wachovia, now has an advantage over competitors because it is "overcapitalized" and completely independent, with no federal government TARP money.

This is newest version of "no strings attached" corporafornication. BU will have nearly $5 billion in federal subsidy, if the projected estimate is accurate. The PEU boys have a captive bank, one shifting focus to commercial loans. What a surprise, given David Marchick's recent remarks to a Senate committee. David noted staggering amounts of deal financing that would come due between 2010 and 2015. BankUnited's new chair will shop those deals from the Northeast, not South Florida.

Uncle Sam gave shadow bankers a real bank. Shadow banker greed and leverage brought the world to its knees. Now they get to buy what should be the rock of our financial system? How sad. President Obama loves PEU's and corporafornicates as well as George W. Bush. Next time, give $5 billion to real bankers, not the shadow version.

Carlyle's BankUnited Subsidy Totals $5.9 Billion

The Carlyle Group and its PEU brethren received $5.9 billion in subsidy for taking over BankUnited.  When the FDIC struck the deal it gave PEU sponsored BankUnited $2.2 billion in cash, instantly making it one of the best capitalized banks in America.  The FDIC sent another $3.7 billion to cushion losses, bringing the total subsidy to nearly $6 billion.  That's almost half of PEU BankUnited's current $12.7 billion value. 

Also, Carlyle Group co-founder David Rubenstein spent $630,000 on a newsprint version of the Declaration of Independence.  It's called patriotic philanthropy.  Make billions from Uncle Sam, use the proceeds to pick up rare historical items, loan them for public display while they remain in Rubenstein's name and grow in value. 

Carlyle Group's Sweet Spot

The Carlyle Group's IPO filing is set for the third quarter.  The private equity underwriter (PEU) is in the process of picking investment bankers.  Fortune projects Carlyle's value at $10 billion.

Carlyle affiliate BankUnited works to acquire New York based Herald Bank with the help of Skadden Arps.  Carlyle & company received a $2.3 billion cash gift from the FDIC for BankUnited.  They've wanted to crack the New York market since buying BankUnited.  First, bedbugs invaded NYC, now it's PEU's.

Where there's distress, bloodsucking PEU's lurk.  Politicians help by intentionally or unintentionally creating conditions for distress, a fertile discount acquisition environment.  Afterward, elected leaders craft favorable regulations, even sending large chunks of government business to PEU affiliates. 

New White House counsel Kathryn Ruemmler had The Carlyle Group and Lehman Brothers as clients while at Latham & Watkins.  Thomson Reuters reported:

White House counsel generally deals with judicial nominations, congressional investigations and defending the president's constitutional powers.

Carlyle remains in the sweet spot of the America's Government-Corporate Monstrosity, Eisenhower's MIC on steroids.

After the IPO Carlyle's co-founders will serve as Chairman and co-CEO's.  One Carlyle Managing Director could use his IPO proceeds to keep a property from foreclosure. 

BankUnited Bidders Want Shareholders Wiped Out

Bloomberg reported bidders for distressed BankUnited asked the FDIC to put the bank in receivership. This wipes out shareholder equity, enabling buyers to pay less for the institution. Four private equity underwriters joined in one bid. They include Carlyle Group, Blackstone Group LP, Centerbridge Capital Partners LLC and WL Ross & Co.

Carlyle works to cram down debt holders of many affiliates. Might it demand shareholders be wiped out before any BankUnited deal? Watch closely investors. Shadow bankers are working their way into the commercial banking realm. They need someone to lend them money. What better than a captive bank?

Carlyle Can't Make Bank Deals Work

The Carlyle Group's Olivier Sarkozy spoke to Bloomberg about bank acquisitions. He stated Carlyle had not been able to make the numbers work on buying failed banks since their BankUnited deal with the FDIC. Carlyle is one of many private equity underwriters (PEU's) in BankUnited. The FDIC gave $4.9 billion in subsidy on BankUnited.

Is that the difference in making Carlyle's numbers work, FDIC subsidies? Olivier Sarkozy didn't elaborate, but his PEU has a history of lining up at the federal till.

BankUnited Update: FDIC Subsidy Nearly $6 Billion

Bloomberg reported on the huge public subsidy given by the FDIC to private equity underwriters  (PEU's) on BankUnited. 

It (FDIC) would reimburse BankUnited for 80 percent of the first $4 billion in losses and 95 percent of all additional losses. The FDIC also provided $2.2 billion in cash. By selling to Kanas’s group, the FDIC expected to lose $4.9 billion on the bank—which was still $1.5 billion less than it estimated it would spend if it had to liquidate it. The agency says its losses have grown to $5.9 billion.

What's an extra $1 billion in subsidy for The Carlyle Group and company?  The Carlyle Group, Blackstone and Wilbur Ross put up $900 million in new capital vs. $5.9 billion in FDIC funds.  PEU owners took the bank public the next year. 

FDIC Subsidizes BankUnited Deal According to CNBC

An investment group made up of private equity underwriters (PEU's) and individual fat cats ponied up $900 million for BankUnited. It would've been more, but the FDIC crammed down equity holders to zero. In addition, the FDIC offered $4.9 billion to sweeten the deal. CNBC reported:

"We're assuming that things will get a lot worse and that's why there was the need for the $4.9 billion from the FDIC on top of our $900 million," Ross told "Squawk Box."

BankUnited made the riskiest of loans, of which billions will come due between now and 2010. The government backstopped the junk for the PEU boys. How much of BU's toxic assets will Treasury buy or the Fed take as collateral? There has to be more than one way for the Rubenstein's and Peterson's of the world to profit handsomely. Super returns await. The Government-Industrial Monstrosity will insure it:

The FDIC said on Thursday it is close to providing more guidance for how private equity firms can invest in failing banks. The government is looking for ways to better tap the $1 trillion of total uninvested private equity capital as bank failures accelerate.