And Another Billion Dollar Bank Failure: Guaranty Bank in Milwaukee, WI

by John Galt
May 7, 2017 11:55 ET

(I’ve been in and out all weekend so sorry for the delay in getting this posted on Friday night when it happened-JG)

It’s just too funny that this bank’s motto was “We Got This” when actually it’s the FDIC that got it.

Another Friday, another bank failure in this “booming” economy. Now that Obama has left his trail of ruin and screwed up policies that even Buddha could not undo with all of his hands and telekinetic powers, Trump’s regime is finding out that the last 8 years was a mirage and the banking system is not strong unless one is referring to those that have “protection” from the Fed.

I would expect more of these larger regional institutions to fail in the months ahead as Emperor Obama would never allow his FDIC to seize a bank that might have unwanted political impacts on his reputation first and foremost or on the Democrat Party machine. This particular institution operated as Best Bank in Georgia and Michigan with most branch locations inside retailers like grocery stores, etc.

The Milwaukee Journal Sentinel reported on Friday May 5, the summary of what happened and how this bank was allowed to survive as a zombie institution for so long:

With assets of about $1 billion, Guaranty is one of the 20 largest banks headquartered in Wisconsin.

Now of course one has to wonder how much those assets are really worth. More from the article:

Guaranty had been under orders by federal regulators since 2009 to improve its financial condition. But the bank struggled to return to profitability and boost its capital to required levels.

In 2012, Guaranty sold off its national Shelter Mortgage unit to bolster the bank’s capital, but the boost was temporary.

In other words, it should have been shut down during the financial crisis but due to political concerns it was kept on life support for almost a decade. Pay attention to the next several months boys and girls, as there are a lot of zombie banks about to get zapped; especially in the primary impact zones of the first housing crisis of 2005-2009.

The hit to taxpayers, er, the FDIC DIF on this sucker is $146.4 million. And before any of you idiots try to tell me that the “banks pay into the insurance fund as a cost of doing business”, please shut up. Businesses, especially banksters, do not pay taxes or fees. Those costs are passed on to the end user, aka, “the customers” in the form of fees, reduced interest on CDs and savings accounts, etc. just like corporate income tax.

Here is the FDIC Press Release via their web page:

First-Citizens Bank & Trust Company, Raleigh, North Carolina, Assumes All of the Deposits of Guaranty Bank, Milwaukee, Wisconsin
Guaranty did business as BestBank in GA and MI, and had branches in IL, MN, and WI

FOR IMMEDIATE RELEASE
May 5, 2017

Guaranty Bank, Milwaukee, Wisconsin, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits of Guaranty Bank. Guaranty Bank did business as BestBank in Georgia and Michigan.

Guaranty Bank had 119 branches in five states, 107 of which were in retail outlets, such as grocery and general merchandise stores. The branches in retail outlets will not be reopening. The 12 brick-and-mortar locations in Illinois, Minnesota, and Wisconsin will reopen as branches of First-Citizens Bank & Trust Company during their normal business hours. All depositors of Guaranty Bank, regardless of where they conducted business, will automatically become depositors of First-Citizens Bank & Trust Company.

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. For a complete list of branches, visit https://www.fdic.gov/guaranty-best-branches.

This evening and over the weekend, all depositors of Guaranty Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

Depositors with accounts at the branches not reopening can continue to use electronic means for conducting their banking business, including online and mobile banking. ATM machines on-site at the branches in retail outlets will not be operational.

As of March 31, 2017, Guaranty Bank had approximately $1.0 billion in total assets and $1.0 billion in total deposits. In addition to assuming all of the deposits of the failed bank, First-Citizens Bank & Trust Company agreed to purchase $892.6 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

Customers with questions about the transaction should call the FDIC toll-free at 800-930-6827. The phone number will be operational this evening until 9 p.m., Central Time (CT); on Saturday from 9 a.m. to 6 p.m., CT; on Sunday from noon to 6 p.m., CT; on Monday from 8 a.m. to 8 p.m., CT; and thereafter from 9 a.m. to 5 p.m., CT. Interested parties also can visit the FDIC’s website at https://www.fdic.gov/bank/individual/failed/guaranty.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $146.4 million. Compared to other alternatives, First-Citizen Bank & Trust Company’s acquisition was the least costly resolution for the FDIC’s DIF. Guaranty Bank is the fifth FDIC-insured institution to fail in the nation this year, and the first in Wisconsin. The last FDIC-insured institution closed in the state was North Milwaukee State Bank, Milwaukee, on March 11, 2016.

If El Trumpster fails to get Obamacare repealed, tax reform passes, and some serious trade deal reform this could turn into something that makes 2008-2009 look like a cake walk.

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