Milwaukee-based Guaranty Bank was closed by the Office of the Comptroller of the Currency, which appointed the FDIC as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Raleigh, NC-based First-Citizens Bank & Trust Company 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.
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 agreed to purchase $892.6 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.
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.
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