Guaranty Bank - Warehouse - Warehouse Lending

Update - 2009-09-01: The parent of Guaranty Bank -- holding company Guaranty Financial Group -- filed its voluntary petition for Chapter 11 Bankruptcy protection on 2009-08-27 "as expected" per the Austin Business Journal. Complete schedules were not included with the initial filing, but an exhibit attached to the petition (view pdf) lists assets of $24.3 million compared to $323.4 million in liabilities. From the Austin American Statesman:

"Guaranty said it owes $308.5 million to unsecured creditors, including $305 million to bondholders.

Former CEO Kenneth Dubuque, who resigned suddenly last November, is owed more than $1.5 million, according to the filing in the U.S. Bankruptcy Court for the Northern District of Texas. Other former employees are owed another $1.5 million."

Click here to view the list of Guaranty's top 20 unsecured creditors.

Original Listing - 2009-08-22: "The purchase marks the first time an overseas-based bank has bought a failed U.S. bank this year" says a report on CNN.com.

The third largest bank to fail in 2009, tied for the title of 11th largest bank failure in U.S. history, Guaranty's cost to the FDIC is $3 billion.

As noted below in our Ailing/Watch Listing, Spain's BBVA was the winning bidder. The official FDIC details are available here.

For more details, see the Bank Implode-O-Meter. We will do our best to report on the fate of current warehouse lines and problems. We have had no reports of fundings, or funding problems at this time.

Original Ailing Post - 2009-08-19: According to Bloomberg, Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA)has won with its bid and been "selected to take over the assets" of ailing Guaranty Bank. Neither the FDIC, Guaranty Bank or BBVA have made a press release as yet, and details of the government-assisted transaction are not yet available. Stay tuned...

Update - 2009-08-17: According to a report by Financial Times, prospective buyers for Guaranty Financial Group (GFG) were asked by banking regulators to submit their bids by today. GFG is the holding company for Austin, TX based Guaranty Bank -- reported to be the nation's third largest warehouse lender at the end of March 2009 by National Mortgage News. With $16 billion in assets it would be the second largest bank failure this year behind Colonial Bank.

On 2009-03-11 we reported that Guaranty Bank had announced along with PNC's National City that it would be exiting the warehouse lending arena, allowing client contracts to expire gradually over the next 12 to 18 months. In articles that followed days later on 2009-03-16 and then on 2009-03-30, National Mortgage News reported that Guaranty Bank had $1.84 billion in outstanding commitments as of 2008 year end. By the end of the first quarter that figure had dropped to "about $500 million."

Guaranty Bank had been trying to "raise new capital with the help of the Federal Deposit Insurance Corp. (FDIC) and the Office of Thrift Supervision (OTS)." But those efforts faltered and on 2009-07-24 MarketWatch reported that the bank had agreed to allow the FDIC to take it into receivership or conservatorship. According to RTT News:

"Recently, FDIC had interfered in the sale of Alabama-based Colonial Bank to BB&T and initially wanted to arrange the sale of Guaranty before Colonial's, which is struggling under homebuilder loans and mortgage-backed securities...

However, Colonial's deteriorating credit quality and its role in two federal investigations were of concern of regulators and led to the sale. Regulators are said to be hoping that Canada's Toronto Dominion, JPMorgan and Spain's BBVA would step in as bidders for Guaranty."

Dallas Morning News brought up analysts' speculation that the investment group behind OneWest Bank (which bailed out Indymac last year) may also be a potential suitor.

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