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Federal Agency Shuts Down Number of Guaranty Bank Branches

Every single Guaranty Bank & Trust was shut down by federal regulators Friday; just a week after the Federal Deposit Insurance Corp. handled one of the costliest failures since the crisis. First-Citizens Bank & Trust Company in Raleigh, a US$33.8 billion state chartered institution, has agreed to assume all of the deposits of Guaranty, a nationally chartered bank. In addition, First-Citizens will purchase US$892.6 million of Guaranty’s US$1.0 billion in assets.

According to Office of the Comptroller of the Currency (OCC), Guaranty Bank had branch offices in Wisconsin, Minnesota, Illinois, Michigan and Georgia. As of December 31st, 2016, the institution had approximately US$1 billion in total assets. The OCC stated in a news release that after finding Guaranty Bank had experienced substantial dissipation of assets or earnings due to unsafe or unsound practices. The OCC also found that the bank was significantly undercapitalized and failed to submit a capital restoration plan acceptable to the OCC.

Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits.  Customers in the branches being assumed by First-Citizens Bank & Trust Company should continue to use their existing branch until they receive notice that systems changes have been completed to allow First-Citizens Bank & Trust Company branches to process their accounts.

News Characteristics

Date : May 05, 2017
Region : North America
Industry : Banks
Function : Risk Management
Sub-Function : Operational Risk