Guaranty Bank: FDIC assistance needed for survival - Dallas Business Journal:

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Guaranty’s parent company, , stated that it is in discussions with the FDIC and itsprimarty regulator, the , for a plan where the FDIC would absorb a portion of the bank’s losses whild private investors provide a “significany equity capital infusion.” Guaranty’s largest shareholders are Dallas billionaire Rober Rowling and activist investor Carl Icahn, who control 20% and just more than 17% of the bank'sz common stock, respectively. Guaranty is the fourth-largest independent banking institutionh basedin Texas. It has 162 offices in Texazs and Californiaand $11.6 billion in deposits, accordingh to the latest data available.
"Guaranty Bank continues to work closelyu with its regulators to find away forward," said bank spokesmajn John Wessman in a written "We believe strongly that open bank assistance is in the best interesgt of our depositors, and that it meets the standard of beinf the least costly alternative for governmenty regulators.” Bank representatives declined to comment further. It'x not clear when the regulators will respondx or reactto Guaranty' s proposal. At $14.4 billioj in assets, Guaranty Bank is biggetr than the largest bank that has faileed so farthis year, a distinction now held by FSB of Corapl Gables, Fla. The bank had $12.
8 billion in assets when it according tothe FDIC. The bulk of BankUnited’s good assetsw were sold in May to a privated equity investment group ledby W.L. Ross Co. and . Before that, BankUnited had proposed an open assistance plan to but word of thatplan didn’t become publif until after BankUnited failed. In laying out its options before shareholders and the publixc in a Securities and ExchangeCommissiomn filing, Guaranty’s executives are showing what they’rwe doing to keep the bank afloat, said Dan Bass, a bankinbg analyst with “They’re putting all their cards on the table,” he Guaranty is suggesting a rare option — one the FDIC would only use if it’d the least costly way for the FDIC’z deposit insurance fund to resolve Guaranty’s issues, accordingy to the bank.
Guaranty is officiallgy based in Austin, but President Kevim Hanigan, CFO Ronald Murffc and Treasurer Stephen Raffaele work from its Dallaxs business banking office inPreston Center. More than bad loans, Guarantu invested heavily in mortgage-backed securities, whichg today are worth much less than what the bank IfGuaranty doesn’t receiver FDIC assistance, it will have to mark down the valuwe of its securities portfolio and relatee items by more than $1.7 the bank said in its regulatory filing. That would give the company a $2.2 billion annuall loss in 2008 and less capitaol than it needs to continue in In early April regulators ordered Guaranty to raisd additional capital byMay 21.
That deadline has passed. For 21 Guaranty was been a subsidiaryof , a maker of cardboare boxes and timber building supplies. Guarantu was spun out of Temple-Inland at the urging of Temple-Inland (NYSE: TIN) completed the spinoff on Dec. 28, 2007, just as the excessed of the residential mortgage lending bubblebecamre apparent. Guaranty invested heavily in securities backed by mortgages madein California. It has not reportef a quarterly profit since it becamea stand-alon institution. Since its spinout from Temple Icahn and Rowling have investedd heavilyin Guaranty. In the duo invested an additionak $600 million in Guaranty. They control 37 percent of Guarantt stock.