Private equity firms have largely avoided distressed financial companies after getting badly burned last year. But reports this week of a possible joint bid for BankUnited Financial Corp. ( BKUNA) from W.L. Ross & Co. and other investors may indicate a change in sentiment.

John Kanas, the former chairman and CEO of North Fork Bank, is working with Ross and other private equity investors and hedge funds that are looking to buy beaten-up banks. Reached at his office Thursday, Kanas would not confirm or deny the BankUnited report by Bloomberg News.

He spent nearly 40 years at North Fork, becoming president in 1977 when he was just 29 years old. As CEO, he grew it into the third-largest bank in New York, eventually selling it to Capital One ( COF) for $14.6 billion in 2006.

Kanas spoke with TheStreet.com earlier this month.


TheStreet.com: Are you spending most of your time scouting potential investments?

Kanas: I have spent the better part of the last year doing various levels of due diligence on probably somewhere between 50 to 75 companies across the U.S. with no regard to geography.

Are there certain regions that you are most interested in? Certain types of businesses?

By and large banks. We started last year in the Southwest, looking in Arizona and California and those markets have matured more into this cycle. Some of those institutions have assets that have begun to level off, which makes those banks more interesting than they certainly were six months or a year ago. But we're focused more now on the Southeast, with the hub being the Florida market because that market is particularly damaged right now. It has at least a three-year supply of single-family homes and condominiums and it has a banking system that's under a great deal of stress. I suspect that there will be significant opportunities in that market.

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