R.I.P Bank United

Normally, the FDIC waits until Friday to close a troubled bank. But apparently, they couldn’t wait any longer on BankUnited, announcing yesterday that the bank was now being run by the FDIC in what has been described as this year’s biggest failure.

Having spent several years in Florida, I was familiar with the bank and footnoted readers should be too. Indeed, back in November 2007, we footnoted about one new disclosure in BankUnited’s 10K that jumped out at us:

Forty-two percent of our one-to four family residential loans were underwritten based on borrower stated income and asset verification and an additional 9% were underwritten with no verification of either borrower income or assets.

As footnoted readers know, it’s the new disclosures that are worth paying closer attention to. And while one reader jumped to BankUnited’s defense in the comments, arguing that the bank was still using credit scores and other methods to check income, by that time, the stock had already fallen sharply.

In June 2008, we footnoted BankUnited again for a late Friday amended Q that provided a lot more details on its Real Estate Owned (REO). Several months later, in October 2008, Alfred Camner stepped down as Chairman and CEO.

To be sure, bad decisions on real estate played a major role in the downfall of the bank. But so did the bank’s former family-centric management that seemed to run the large bank with 80-plus branches like the family piggy bank. Though Camner wasn’t even mentioned in the hometown Miami Herald’s coverage of the story, BankUnited proxy statements are full of what we’d charitably describe as self-dealing. During 2006, for example, Camner’s employment contract, was rewritten three separate times.

Perhaps, then, it’s fitting that John Kanas, formerly of North Fork Bancorp will be running the show at BankUnited now. Kanas, as footnoted regulars may recall, got a deal valued at over $212 million when he sold North Fork to Capital One (COF) three years ago.

Enjoy the Memorial Day weekend. We’ll be back on Tuesday with whatever gets buried late this afternoon.