Guaranty Bank, subsidiary of Guaranty Financial Group (GFG), is in discussions with regulators after recently taking a $1.45bn impairment charge from write-downs on non-agency mortgage-backed securities (MBS). Guaranty wrote down the non-agency MBS to an estimated fair value in an amended thrift financial report. The report also included an adjustment to write off goodwill in the amount of $106.6m. These adjustments together pulled the bank’s core capital ratio down to negative 5.78% and its total risk-based capital ratio down to negative 5.52% as of March 31, 2009. The bank’s troubles are not lost on its regulators. The Federal Deposit Insurance Corp. (FDIC) and the Office of Thrift Supervision (OTS) were pursuing “potential alternatives” for the bank’s business, according to a company filing with the Securities Exchange Commission (SEC) last Friday. As of the time of the SEC filing — submitted July 23 but dated July 17 — the company’s stockholders had yet to agree to a private capital infusion, and as a result the company said it was unlikely to raise sufficient capital to comply with existing orders to cease and desist. “In light of these developments, the company believes that it is probable that it will not be able to continue as a going concern,” Guaranty said in the SEC filing. The company said the OTC was “exercising a significant degree of control” in the duties typically run by the bank’s board of directors, but the FDIC had not yet been appointed receiver of the bank as of the SEC filing. As a result, the FDIC could not comment Monday on Guaranty, which it said is still an open bank. Guaranty is still open for business despite the news in the filing, according to a company spokesperson. “We continue to work with our regulators,” said John Wessman, executive vice president of the retail and marketing department at Guaranty. “We are focused on providing the best customer service possible and believe we can avoid any disruptions to our customers.” “As a member of the FDIC,” Wessman added, “Guaranty depositors enjoy the same coverage as customers of other FDIC member banks.” Write to Diana Golobay.

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