3. BankUnited (BKU)
After being seized by the Federal Deposit Insurance Corporation in May 2009 on concerns over the Florida-based lender's solvency, BankUnited was acquired by a consortium of private equity funds and longtime bank investors including the Blackstone Group, the Carlyle Group, Centerbridge Partners, Wilbur Ross and John Kanas. The investor group took control of a bank with $12.7 billion in assets and $8.3 billion in deposits and agreed to give the struggling institution $900 million in capital and share on potential losses with the FDIC.After toying with an IPO for months, BankUnited went ahead with a share offering in January 2011, selling shares for $29 to raise $783 million in a sale that was reported to have tripled the consortium's initial investment. Since the offering BankUnited shares have slumped nearly 15%, underperforming the KBW Bank Index's (KBE) near 7% drop. While the BankUnited's been able to show strong loan and deposit growth compared with some super-regional competitors, the bank saw its 2011 profit fall by roughly two-thirds. After a FDIC disclosure mandate threatened to force unwanted disclosures by the bank's private equity owners, BankUnited confirmed in 2012 that it had been exploring a sale, with speculation that BB&T (BBT) or Toronto-Dominion (TD) as potential acquirers. Instead, the company said that a sale process had "concluded," with the company looking to remain independent. In February BankUnited boosted its quarterly dividend by 21% to 14 cents a share. "Given their pessimistic view of M&A and the failed attempt to sell the bank in January, it comes to no surprise that BKU increased its quarterly dividend," noted KBW analyst Brady Gailey in a Feb. 29 note. He rates shares "market perform" with a price target of $24. Overall, BankUnited has a price target of $25.80 a share according to analysts polled by Bloomberg who give shares five "buy" ratings and four "holds." The bank's five largest shareholders are private equity funds that hold an over 50% stake in the Miami Lakes, Fla- based lender. Wilbur Ross-run WL Ross & Co. and the Carlyle Group each hold 13.87% stakes in BankUnited shares, according to Bloomberg data. For more on BankUnited shares, see banks ready to sell out.
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