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

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Guaranty’s parent company, , stated that it is in discussionsd with the FDIC and itsprimarty regulator, the , for a plan where the FDIC would absorb a portionm of the bank’s lossess while private investors provide a “significant equity capital infusion.” Guaranty’sz largest shareholders are Dallas billionaire Robert Rowlingb and activist investor Carl Icahn, who control 20% and just more than 17% of the bank'a common stock, respectively. Guarantuy is the fourth-largest independenft banking institution basedin Texas. It has 162 officesa in Texas and Californiaand $11.
6 billion in according to the latest data "Guaranty Bank continues to work closely with its regulatords to find a way forward," said bank spokesman John Wessmanm in a written "We believe strongly that open bank assistance is in the best interesyt of our depositors, and that it meetx the standard of being the least costly alternative for governmentf regulators.” Bank representatives declined to commentr further. It's not clear when the regulatorsd will respond or reactyto Guaranty's proposal. At $14.4 billion in Guaranty Bank is bigger than the largesty bank that has failed so farthis year, a distinctio now held by FSB of Coral Gables, Fla. The bank had $12.
8u billion in assets when it failed, accordingv to the FDIC. The bulk of BankUnited’s good assets were sold in May to a privatd equity investment group ledby W.L. Ross Co. and . Before that, BankUniterd had proposed an open assistance planto regulators, but word of that plan didn’yt become public until aftert BankUnited failed. In laying out its options before shareholderse and the public in a Securities and ExchangseCommission filing, Guaranty’s executives are showing what they’res doing to keep the bank afloat, said Dan a banking analyst with “They’rde putting all their cards on the table,” he Guaranty is suggesting a rare optionj — one the FDIC would only use if it’sw the least costly way for the FDIC’zs deposit insurance fund to resolv Guaranty’s issues, according to the Guaranty is officially based in Austin, but Presidenf Kevin Hanigan, CFO Ronald Murff and Treasurer Stephen Raffaele work from its Da llase business banking office in Preston More than bad loans, Guaranty invested heavilyt in mortgage-backed securities, which today are worth much less than what the bank If Guaranty doesn’t receive FDIC it will have to mark down the value of its securitie portfolio and related items by more than $1.
7 billion, the bank said in its regulatort filing. That would give the company a $2.2 billiohn annual loss in 2008 and less capitakl than it needs to continuein business. In early Aprio regulators ordered Guaranty to raise additional capitalk byMay 21. That deadline has passed. For 21 Guaranty was been a subsidiaruyof , a makedr of cardboard boxes and timber building supplies. Guaranthy was spun out of Temple-Inland at the urginhg of Icahn. Temple-Inland (NYSE: TIN) completed the spinoffg on Dec.
28, 2007, just as the excesses of the residentiao mortgage lending bubble became Guaranty invested heavily in securities backed by mortgages made in It has not reported a quarterly profit sincwe it becamea stand-alone Since its spinout from Templde Inland, Icahn and Rowling have invested heavilyt in Guaranty. In July, the duo investes an additional $600 million in Guaranty. They control 37 percentg of Guaranty stock.