FDIC Friday: Guaranty Bank Goes Down; and a Few Others
August 22nd, 2009Via: Bloomberg:
Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest bank, took over Guaranty Financial Group Inc. of Texas, the first foreign company to buy a failed U.S. bank this year as the toll of seized lenders climbed to 81.
Branches of Guaranty in Texas and California tomorrow will become offices of Birmingham, Alabama-based BBVA Compass, the U.S. affiliate of the Spanish bank, in a transaction brokered by the Federal Deposit Insurance Corp., the regulator said today. State and federal regulators also seized two banks in Georgia and a 10-branch lender in Alabama with $927 million in assets.
Guaranty had $13.5 billion in assets and $12 billion in deposits and “was in an unsafe and unsound condition because of the deteriorating quality of its loan portfolio, critically deficient earnings, capital insolvency and strained liquidity position,” the Office of Thrift Supervision, the lender’s regulator, said in a statement.
The collapse is the 11th biggest U.S. bank failure as regulators shut lenders at the fastest pace since 1992, when more than 120 institutions were seized. Of banks closed this year, three had assets exceeding $10 billion: Guaranty, Alabama’s Colonial BancGroup Inc., seized Aug. 14, and Florida’s BankUnited Financial Corp., closed May 21. BB&T Corp. bought Colonial and private-equity firms bought BankUnited.
BBVA will assume Austin-based Guaranty’s deposits and about $12 billion in assets, the FDIC said in a statement. BBVA and the FDIC agreed to share losses on $9.7 billion of those assets. BBVA said the FDIC will assume 80 percent of losses up to $2.3 billion, and 95 percent for additional losses.
To me the real story is that the FDIC might well have run out of US banks to sell these dogs to…