May 22--Federal regulators have closed battered BankUnited of Coral Gables and appointed new owners led by longtime banking executive John Kanas and Palm Beach billionaire Wilbur Ross.

It's the nation's largest bank failure so far this year.

BankUnited, the biggest bank headquartered in Florida, will open for normal business hours today.

All deposits are secure, and BankUnited checks, ATM cards and debit cards remain valid. Those with questions can call the FDIC at 800-451-1093.

The bank is one of many nationwide devastated by problem loans made during the housing boom. It reported losses of $1.2 billion in 2008, and bank executives expressed serious doubts about its ability to survive.

In accepting the bid from Kanas' group, the Federal Deposit Insurance Corp. agreed to share in BankUnited's losses of $10.7 billion in assets. The new owners will retain the BankUnited name and pump $900 million in new capital into the bank.

"We view this as a long-term commitment to the South Florida market," Kanas said on a conference call late Thursday. "We expect you will hear a lot more from BankUnited as time goes by."

The deal will cost the FDIC insurance fund $4.9 billion. It was the "least costly" option among other interested buyers, the agency said in a statement.

"Customers should just look at this as a change in management," FDIC spokesman David Barr said.

Shareholders may not be as fortunate. Their equity could be lost. A shareholder meeting was scheduled for 10 a.m. today at the Hyatt Coral Gables.

"It's another indication of the Washington regulators taking good care of their friends on Wall Street and screwing the little guy on Main Street," said Herman Hammer of Boca Raton, a shareholder and retired financial consultant.

The Office of Thrift Supervision appointed the FDIC as a receiver, saying BankUnited was "critically undercapitalized and in an unsafe condition to conduct business."

BankUnited had $12.8 billion in assets and deposits of $8.6 billion as of May 2. The bank, founded in 1984, said in a filing this month that its fiscal second-quarter loss likely rose to $443.1 million from a loss of $65.8 million.

The FDIC approached 62 potential buyers and received five offers for BankUnited from three different bidders, Barr said.

Kanas said other banks with operations in Florida made a play for BankUnited but would have led a "drastic consolidation" and eliminated jobs. He said he plans to grow BankUnited through the acquisition of other distressed institutions.

"By and large, all of the staff and all of the jobs will stay there," he said.

Kanas is the former chief executive of New York's North Fork Bancorp and an adviser to Ross. Blackstone Group LP, owner of the Boca Resort and Club, also is part of the ownership group.

Other investors include Centerbridge Capital Partners; LeFrak Organization; The Wellcome Trust; Greenaap Investments Ltd.; and East Rock Endowment Fund.

Earlier this year, Ross bought most of the shares of First Bank and Trust Co. of Indiantown in western Martin County.

Palm Beach, Broward and Miami-Dade counties have nearly $150 billion in customer deposits. BankUnited had more than 4 percent of the market share as of June 30, 2008, according to the most recent FDIC rankings.

"South Florida is where the money is," banking analyst Ken Thomas said. "And BankUnited still has a good name. It's not sullied, like Enron."

In November 2005, BankUnited agreed to put its name on the University of Miami's basketball arena in Coral Gables for 10 years. It's not yet clear what will happen to the arena's name.

BankUnited joins 33 banks and at least five credit unions nationwide that have been seized since January.

"Kanas is a very well-respected banker," Thomas said. "This is really good news. He'll probably run a tighter ship."

Bloomberg News Service and Sun Sentinel staff writers Doreen Hemlock and Sarah Talalay contributed to this report.

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