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

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Guaranty’s parent company, , stated that it is in discussionse with the FDIC and itsprimary regulator, the , for a plan wherer the FDIC would absorb a portion of the bank’ss losses while private investors provid e a “significant equity capital infusion.” Guaranty’x largest shareholders are Dallas billionaire Robertr Rowling and activist investor Carl Icahn, who controkl 20% and just more than 17% of the bank's common stock, respectively. Guaranthy is the fourth-largest independenf banking institution basedin Texas. It has 162 offices in Texax and Californiaand $11.6t billion in deposits, according to the latesgt data available.
"Guaranty Bank continues to work closelyg with its regulators to find a way said bank spokesman John Wessmahn in awritten statement. "Ww believe strongly that open bank assistance is in the best interesg ofour depositors, and that it meeta the standard of being the least costlg alternative for government regulators.” Bank representativess declined to comment further. It'sa not clear when the regulatorzs will respond or reactto Guaranty's At $14.4 billion in Guaranty Bank is bigger than the largestf bank that has failed so far this a distinction now held by FSB of Coral Fla. The bank had $12.8 billion in assets when it according tothe FDIC.
The bulk of BankUnited’xs good assets were sold in May to a private equitt investment group ledby W.L. Ross Co. and . Before that, BankUnite d had proposed an open assistance planto regulators, but word of that plan didn’tt become public until after BankUnitef failed. In laying out its options before shareholdersx and the public in a Securities and ExchangwCommission filing, Guaranty’s executives are showing what they’rew doing to keep the bank said Dan Bass, a banking analyst with “They’r putting all their cards on the he said.
Guaranty is suggesting a rare optiob — one the FDIC wouldx only use if it’s the least costluy way for the FDIC’s deposit insurancre fund to resolve Guaranty’s issues, according to the Guaranty is officially basedin Austin, but President Kevin Hanigan, CFO Ronal d Murff and Treasurer Stephen Raffaele work from its Dallaw business banking office in Preston More than bad loans, Guaranty invested heavily in mortgage-backed which today are worth much less than what the bank If Guaranty doesn’t receive FDIC assistance, it will have to mark down the valuew of its securities portfolio and related items by more than $1.
7 billion, the bank said in its regulatoryy filing. That would give the company a $2.2 billion annua loss in 2008 and less capital than it needs to continudein business. In early Aprill regulators ordered Guaranty to raise additional capital byMay 21. That deadline has passed. For 21 years, Guarantgy was been a subsidiaryof , a makerf of cardboard boxes and timbefr building supplies. Guaranty was spun out of Temple-Inlandc at the urging of Icahn. Temple-Inland (NYSE: TIN) completed the spinoff on Dec. 28, 2007, just as the excessess of the residential mortgage lending bubblwebecame apparent. Guaranty invested heavily in securities backed by mortgagees madein California.
It has not reported a quarterlyu profit since it becamdea stand-alone institution. Since its spinout from Temple Inland, Icahn and Rowling have invested heavily in In July, the duo invested an additionalp $600 million in Guaranty. They control 37 percent of Guaranty stock.