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September 9, 2009
OneWest Bank moves to Domain Gateway
OneWest Bank has moved into its new space in North Austin.
OneWest, which acquired failed IndyMac Bank earlier this year, moved about 870 employees to the Domain Gateway, a new office buidling in Endeavor Real Estate Group’s project near Burnet Road and Braker Lane. The company previously leased space at Freescale Semiconductor Inc.’s Parmer Lane location.
The 173,000 square foot facility has room for more than 1,500 employees, but the company has not announced plans for expansion.
The new headquarters has been built to meet Leadership in Energy and Environmental Design (LEED) standards and will use about 20 percent less energy than a standard office building, the company said.
“The additional seating capacity, significant upgrade in workspace infrastructure and the quality-of-life benefits the Domain community offers were important factors we considered in our efforts to improve overall customer service by investing in our employees and where they work,” Terry Laughlin, president and CEO of OneWest Bank, said in a press release.
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August 31, 2009
Guaranty Financial Group files for bankruptcy
Guaranty Financial Group, the Austin-based parent of Guaranty Bank, filed for bankruptcy in Dallas.
The company said it had assets of $24.3 million and liabilities of $323.4 million.
On Aug. 21, federal regulators seized Guaranty Bank, which they declared to be insolvent, and sold its assets to BBVA Compass.
In the bankruptcy filing, Guaranty Financial Group said that because of the seizure of the bank, it could not estimate the market value — if any — of its interests in Guaranty Bank.
Guaranty Financial shares were delisted from the New York Stock Exchange after the seizure of the bank.
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August 24, 2009
Guaranty FInancial Group plans to file for bankruptcy
Austin-based Guaranty Financial Group said it expects to file for Chapter 11 bankruptcy protection, following the seizure last week of its Guaranty Bank subsidiary.
Regulators seized the bank and sold it to BBVA Compass, a subsidiary of Banco Bilbao Vizcaya Argentaria. It was the second-largest bank failure in the U.S. this year.
Guaranty Financial also said its stock had been delisted Monday by the New York Stock Exchange.
The shares had lost most of their value this year and closed Friday at 29 cents, just two hours before regulators closed Guaranty Bank.
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August 21, 2009
Regulators seize Guaranty; Spanish bank is new owner
The Federal Deposit Insurance Corp. seized Austin-based Guaranty Financial Group on Friday, in the second-biggest bank failure this year.
The FDIC said the branches would reopen Saturday, under their new owner, BBVA Compass, a subsidiary of Banco Bilbao Vizcaya Argentaria.
It was not immediately clear what will happen to Guaranty’s employees, which include several hundred workers at the headquarters on South MoPac Boulevard.
Between them, Guaranty and BBVA have 34 branches in Central Texas, and the new owner may decided to close some where there is overlap.
Guaranty customer deposits remain insured up to $250,000 under the FDIC’s insurance program.
But shareholders will get nothing in the takeover. Guaranty’s shares have lost almost all of their value this year and closed Friday at 29 cents.
The purchase expands BBVA’s footprint in the United States. It has purchased three other Texas banks since 2004 and also has operations in California.
“This adds to their base in the U.S. and to their branch structure,” said Gary Townsend, president of Hill-Townsend Capital, a hedge fund that specializes in financial institutions.
The deal positions BBVA to become an important player in the South and Southeast, he said.
Guaranty’s financial condition has been worsening for more than a year, mostly due to bad bets on mortgages and homebuilder loans in California, after that state’s housing market collapsed, and investments in securities backed by pools of California mortgages.
As its losses grew, federal regulators put Guaranty under increasing scrutiny and control.
Guaranty tried to remain independent, but was unable to raise more capital. Last month, the bank said it was “probable” it would fail.
Guaranty’s failure marks the year’s 81st failed bank.
Last Friday, the FDIC announced the largest bank failure of 2009 when BB&T Corp. of North Carolina took over the branches and deposits of Montgomery, Ala.-based Colonial BancGroup Inc.
Here’s a timeline of Guaranty’s troubles:
2005: Investor Carl Icahn starts buying up shares of Temple-Inland Inc., then Guaranty Financial Group’s parent. He later sells most of the shares.
2007: Icahn resumes buying Temple-Inland shares and says he wants to break up the company.
February 2007: Temple-Inland beats Icahn to the punch, announcing it will spin off Guaranty and its real estate division, Forestar, into separate companies.
Dec. 31, 2007: Guaranty starts trading on the New York Stock Exchange as an independent company. Its shares close at $16, up 10.3 percent.
June 9, 2008: Icahn and Dallas billionaire Robert Rowling provide $600 million in new capital.
Nov. 19, 2008: Kenneth Dubuque, Guaranty’s CEO for 10 years, resigns suddenly.
Dec. 22. 2008: Guaranty announces a 10-percent cutback in its workforce, then about 2,300 people.
March 17, 2009: Guaranty says it’s in discussion with regulators about whether it needs more capital.’
April 8, 2009: Guaranty says regulators have set a May 21 deadline for improving its financial condition or face a sale or liquidation.
June 29, 2009: Guaranty says it’s discussing a potential bailout with the Federal Deposit Insurance Corp.
July 23, 2009: Guaranty says bailout option isn’t possible and that it is “probable” it will not be able to keep operating.
Friday: FDIC seizes Guaranty.
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August 19, 2009
Reports say Spanish bank will buy Guaranty Financial Group
A large Spanish bank has won the bidding for Austin-based Guaranty Financial Group, according to the Wall Street Journal and Bloomberg News.
Federal regulators who have essentially been running Guaranty in recent months have chosen Banco Bilbao Vizcaya Argentaria as the buyer.
The Wall Street Journal and Bloomberg News both said that regulators had chosen BBVA, citing unnamed sources close to the negotiations.
The Federal Deposit Insurance Corp. is expected to make the announcement Friday. Under the expected scenario, the FDIC will seize Guaranty, then sell most or all of it to BBVA.
Guaranty’s financial condition has been deteriorating for more than a year, and the bank said last month it had failed to raise urgently needed new capital and would probably fail.
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August 17, 2009
UPDATE: Guaranty bids due Tuesday, report says
Federal banking regulators have asked prospective buyers of Austin-based Guaranty Financial Group assets to submit bids by Tuesday, according to the news organization Reuters.
The Financial Times had reported earlier today that bids were due today. Then at about 3 p.m., Reuters reported the one-day extension.
Quoting people close to the matter, The Financial Times added a few names to the growing list of groups rumored to have an interest in Guaranty.
People close to the matter reportedly told the FT that Canada’s Toronto Dominion Bank and JPMorgan might be interested in Guaranty.
In the past few months, sources have mentioned other potential investors, including BB&T, BBVA, and a consortium made up of Blackstone, Carlyle, Oak Hill Capital, TPG and Dallas billionaire Gerald Ford.
Guaranty Bank, a subsidiary of Guaranty Financial Group, said last month that it had been unable to raise urgently needed new capital, as regulators had required. The company said in a securities filing last month that it was “probable that it will not be able to continue as a going concern.”
Guaranty would be the second biggest bank failure in the country this year. If it fails, Guaranty would be behind only Alabama-based Colonial Bank, which was sold to BB&T on Friday. Guaranty has $13.3 billion in assets, down $2 billion since September.
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August 11, 2009
Chase re-brands former WaMu branches
Chase said it has converted 149 former Washington Mutual bank branches in Texas into Chase banks. Statewide there are now 607 Chase branches.
In the Central Texas, Chase now operates 64 branches, after converting 15 WaMus in the Austin/San Marcos area.
Chase spokesman Greg Hassell said in the bank has expanded its Central Texas presence in the past few years. The bank had just 16 branches in Central Texas in 2004, before it bought Bank One.
Chase’s parent, JPMorgan Chase and Co., acquired Washington Mutual’s troubled banking operations last September.
Hassell said WaMu employees will keep their jobs. “You need good people, and they had some very good people,” he said.
Chase has spent $77 million rebranding the former WaMu branches across the state. The banking giant has been touting its use of environmentally friendly additions to the banks including low-irrigation landscaping, recycled materials in walls, floors and ceilings, and Energy Star appliances.
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July 23, 2009
Guaranty Financial Group says it's unlikely it can keep going
Guaranty Financial Group said today it is “critically undercapitalized” and that it is s “probable” it will not be able to continue as a “going concern.”
In a securities filing, the Austin-based bank holding company said recent writedowns of its mortgage-backed securities have foreclosed any chance it could apply for a federal bailout program, which it recently said was its only chance to keep going.
And it said its primary stockholders have not been willing to provide more capital, to support such an application.
The Office of Thrift Securities has directed Guaranty’s board to consent to appointing the Federal Deposit Insurance Corp. as receiver, the filing said.
If the FDIC took over Guaranty, it would be the biggest bank failure this year.
Guaranty is the parent of Guaranty Bank. As of late last year, it had about 700 Austin employees.
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June 29, 2009
Guaranty Bank seeks FDIC help to keep operating
Austin-based Guaranty Financial Group disclosed Monday that it is discussing a potential bailout of its Guaranty Bank with the Federal Deposit Insurance Corp. in order to keep operating.
The company said it has talked about applying for an open assistance plan with the FDIC, but acknowledged that the FDIC, which insures federal bank and thrift deposits, might not approve the plan.
Guaranty also acknowledged that, if the FDIC does approve a plan, it would probably wipe out any existing shareholder equity in the bank.
If the FDIC does not approve the open assistance plan, “there would be substantial doubt that the company would be able to continue as a going concern” the company said in a disclosure to the Securities and Exchange Commission.
The plan being discussed with regulators would include a “significant equity infusion” from private investors including some of the company’s current investors, who include billionaires Carl Icahn and Robert Rowling. The plan would call for the FDIC to cover part of the expected losses from a pool of troubled assets that Guaranty holds.
The company disclosed that it also is discussing with accountants whether to adjust its estimated losses for fiscal 2008 and the first quarter of 2009. Those adjustments would be made if it doesn’t receive FDIC assistance.
It’s adjusted losses would be $2.2 billion 2008 and $308 million for the first quarter, compared with previous loss estimates of $444 million and $256 million respectively.
Under the new estimated losses, Guarantee would have 1.2 percent in negative capital at the end of March, far below regulatory capital requirements of 8 percent of core assets.
Guaranty previously disclosed that it had been issued a cease and desist order by the federal Office of Thrift Supervision to bring its capital in compliance with regulatory standards.
“Guaranty Bank continues to work closely with its regulators to find a way forward,” said Executive Vice President John Wessman in a statement. “We believe strongly that open bank assistance is in the best interest of our depositors and that it meets the standard of being the least costly alternative for government regulators.”
Under an open bank assistance plan, the FDIC helps failing institutions be acquired by other investors with federal help. The goal is to minimize the cost to the FDIC’s deposit insurance fund.
Guaranty, which has assets of $14.2 billion as of March 31, employed about 700 people in Austin at the end of last year.
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March 17, 2009
Guaranty delays annual report but expects big loss
Austin-based Guaranty Financial Group Inc. said today it would delay the filing of its annual report as it figures out the value of its mortgage-backed securities — a problem plaguing many banks and that brings into question the adequacy of their capital.
In a regulatory filing, the company said it was in talks with government authorities, its board and its largest shareholders to discuss whether it might need additional capital, how much it might need and what the terms of any funding might be.
Guaranty and its independent accountants also are working determine the appropriate value to report for its mortgage-backed securities, the company said.
“The outcome of this analysis could affect, among other things, the adequacy of the company’s capital and the extent to which additional capital will be appropriate,” Guaranty said in the filing with the Securities and Exchange Commission.
In its filing, Guaranty also said it expects to report an annual loss of $444 million, or $8.84 per share. In 2007, Guaranty reported a net gain of $78 million, or $2.20 per share.
It warned the losses could expand depending on the outcome of its ongoing review.
The bank has a large portfolio of residential mortgages and homebuilder construction loans in California, and the company has said it has been affected by that state’s steep foreclosure rate.
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December 22, 2008
Austin-based Guaranty Financial cuts 10 percent of workforce
Austin-based Guaranty Financial Group said late Monday it will lay off 10 percent of its staff, or 250 employees.
The company didn’t detail where the cuts would be made, but has about 700 workers at its Austin headquarters.
Guaranty, the parent of Guaranty Bank, also said Robert Greenwood, its chief administative officer, would retire, effective Jan. 2.
A Guaranty spokesman could not be reached for comment.
The company said last month it expected to cut about 4 percent of its workforce, on top of 135 jobs cut earlier this year. Guaranty lost $162 million in the third quarter/
Guaranty has a large portfolio of mortgages in the troubled California market.
It received a $600 million infusion of capital earlier this year from Dallas investor Robert Rowling and Carl Icahn,
Longtime CEO Kenneth Dubuque resigned without explanation last month.,
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November 5, 2008
Austin-based Guaranty reports wider loss
Guaranty Financial Group Inc. reported a wider loss in the third quarter Thursday, but the Austin-based company said it is well capitalized and saw deposits shoot up in October.
The parent company of Guaranty Banklost $162 million, or $4.89 a share, for the quarter ended Sept. 30. That’s down from a profit of $21 million for the same period a year ago.
The company said the loss was due in part to $152 million in non-cash charges. Those included a $58 million charge related to a mortgage-backed security and a $78 million provision for credit losses.
“We are disappointed with our financial performance for the quarter,” Ken Dubuque, Guaranty’s chairman, said in a statement.
But the company noted that it had raised $600 million in new capital in the second and third quarters from private stock offerings. And Dubuque said Guaranty’s deposits shot up almost 20 percent, or $1.8 billion, in October
Shares in Guaranty were trading at $1.70 a share Thursday morning, just slightly up from their all-time low.
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July 31, 2008
Guaranty reports second quarter loss
Austin-based Guaranty Financial Group Inc. today reported a loss in the second quarter as it raised its reserves for bad loans.
Guaranty lost $85 million, or $2.24 a share, for the quarter ended June 30, compared with a profit of $51 million for the same quarter a year ago.
Guaranty, which was spun off from Temple-Inland Inc. last December, is the second largest publicly traded financial institution based in Texas with $16 billion in assets, down from $16.4 billion in March. The decrease was the result of expected payoffs of mortgage-backed securities and single-family loans.
The company raised about $600 million in July from new investors who included Carl Icahn and Dallas billionaire Robert Rowling.
“Last quarter we announced we were focused on near-term strategies related to credit, costs and capital and we made significant progress in all three areas,” said CEO Ken Dubuque in a statement. “We addressed credit challenges head-on, we were successful in cutting compensation and benefits expenses during the second quarter and the infusion of $600 million in new capital strengthens our balance sheet and reinforced our strong liquidity position.”
The company made a $99 million provision for credit losses in the quarter, compared with $1 million for the same quarter a year ago.
Guaranty paid $3 million in severance payments tied to the elimination of 135 jobs during the quarter.
Net interest income totaled $100 million, up 5 percent from a year ago.
CFO Ron Murff said the company’s non-performing loans increased in the quarter due to problems in loans to homebuilders and single-family home buyers. The company’s allowance for loan losses expanded to $250 million, compared with $172 million at the end of March.
“While we still do not anticipate a recovery of the housing market in the near term, we believe we are appropriately reserved at this time,” Murff said.
The company also announced that, since it completed its capital infusion, it will terminate its previously announced offering of rights to buy its stock. That offering had sought to raise another $147 million.
The financial results were released before the stock market opened. Guaranty’s stock traded at $3.79 a share at mid-morning, down 3.6 percent.
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