Bank Failure Friday Claims 4 More Banks

Guaranty Bank, what a great name, guaranteed by who?, the taxpayers! Over $6 billion has been drained from the FDIC insurance fund in 2 weeks, FDIC is now vitually broke. The banking system has big problems. Guaranty Bank is the eighth largest bank failure in US history. Last week Colonial Bank was the sixth largest. The stock market doesn't seem to care, closing at the 2009 highs. Volumes are low as it is the height of vacation season. This autumn will be very interesting to say the least, what a great selling opportunity-Lou

SAN FRANCISCO (MarketWatch) -- The Federal Deposit Insurance Corp. on Friday announced four more bank failures, including a Texas bank with total assets of about $13 billion, pushing this year's tally up to 81.

Guaranty Bank of Austin, Texas became the 81st bank failure of 2009 after it was closed by Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corp. as receiver, the federal agency said late Friday.

Guaranty Bank also joined the list of the 12 biggest U.S. bank failures of all time.
The FDIC said it has entered into a "purchase and assumption agreement" with BBVA Compass of Birmingham, Ala. As of June 30, Guaranty Bank had total assets about $13 billion and total deposits of about $12 billion.

The bank was one of the largest based in Texas, but had been reeling from nearly $1.5 billion in mortgage write-downs.

This year, 81 banks have failed as a lingering recession and surging unemployment leaves the industry nursing heavy loan losses. More than 1,000 banks may fail during the next three to five years, RBC Capital Markets estimated in February.
Guaranty, which started in 1988, had more than 150 branches in Texas and California, according to its Web site.
Earlier this month, Colonial BancGroup, which was shut down and sold to BB&T Corp. last week, became the biggest bank failure this year and the sixth-largest in U.S. history. Washington Mutual, which collapsed last year, was the biggest ever.

Guaranty Financial said earlier this year that it wrote down the value of some of its mortgage-backed security holdings by $1.45 billion, while taking a goodwill charge of $107 million. That left it with negative capital at the end of March.

Guaranty had been trying to raise new capital with the help of the FDIC and the Office of Thrift Supervision, but the losses scuppered those plans.

Meanwhile, Ebank, based in Atlanta, became the 78th bank failure of 2009, the FDIC said. Stearns Bank of St. Cloud, Minn. will assume all of the deposits and purchase Ebank's assets.
As of July 10, Ebank had assets of $143 million and total deposits of about $130 million. The failure marks the 17th in Georgia for the year.

First Coweta, Newnan, Ga., became the 79th bank to fail, after it was closed by the Georgia Department of Banking and Finance which appointed the FDIC as receiver, the agency said Friday.

The regulator said it has entered into a purchase and assumption agreement with United Bank, Zebulon, Ga., to assume all deposits of the bank, excluding those from brokers.
As of July 31, First Coweta's assets totaled $167 million, and it ad total deposits of roughly $155 million.

CapitalSouth Bank of Birmingham, Ala. became the 80th bank failure after it was closed by the Alabama State Banking Department, which appointed the FDIC as receiver, the agency also said Friday.

The FDIC said it has entered into a "purchase and assumption agreement with Iberiabank, Lafayette, La. to assume all of the deposits of CapitalSouth Bank, excluding those from brokers."
As of June 30, CapitalSouth had assets of $617 million and total deposits of roughly $546 million, according to the FDIC.