U.S. closes BankUnited, sells to private equity

WASHINGTON (Reuters) - U.S. bank regulators on Thursday closed troubled lender BankUnited Financial Corp BKUNA.O, Florida's largest bank, and sold its banking operations to a private equity consortium that includes WL Ross & Co.

BankUnited, which had $12.8 billion in assets and $8.6 billion in retail deposits, is the biggest of 34 U.S. banks to fail so far this year.

The Federal Deposit Insurance Corp said it estimates BankUnited's failure will cost its insurance fund $4.9 billion.

The private equity group buying BankUnited is headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank. Other members of the group, besides WL Ross & Co, include Carlyle Investment Management CYL.UL, Blackstone Capital Partners (BX.N), and Centerbridge Capital Partners.

BankUnited's 86 offices will open on Friday during normal business hours, the FDIC said.

Bank failures have accelerated in 2009, mainly due to soured real estate loans. The 34 bank seizures so far compare to 25 in 2008 and just 3 in 2007.

BankUnited is the largest failure since California-based Downey Savings & Loan was closed in November with $12.8 billion in assets.

The private equity group will recapitalize BankUnited with $900 million in new capital, the FDIC said.

The FDIC said selling the bank to the consortium was the least costly option and noted that "in the near future" it will provide general guidelines for how private equity investors can make investments in banks.