Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Milwaukee, Wisconsin 119 Branch Bank Failure Only 12 Branches Will Re-Open

Guaranty Bank, Milwaukee, Wisconsin, with 119 branches in five states, was closed with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits (Note: (d/b/a BestBank in Georgia & Michigan)


Branch at Pick'n Save Grocery Market.
(Photo: jsoline.com)

The 107 branches in retail outlets, such as grocery and merchandise stories will not be opening (most are in Kroger's, 15 Walmart). The 12 brick-and-mortar locations in Illinois, Minnesota, and Wisconsin will reopen as branches of First-Citizens Bank and Trust. List of branches open and that will NOT re-open: https://www.fdic.gov/bank/individual/failed/guaranty-branches.html Note: All depositors of Guaranty Bank, regardless of where they conducted business, will automatically become depositors of First-Citizens Bank & Trust Company.

Guaranty was established January 1, 1923 with 927 full time employees as of December 31, 2015. March 31, 2017, Capital Risk Ratio 3.1%. The FDIC filing states assets concentration was "Mortgage Lending," which the charge offs certainly reflect.

Non-Current Loans also a reflection of "mortgage loan problems":

(in millions, unless otherwise)

Non-Current Loans
   
2006 $15.5
2007 $34.1
2008 $41.7
2009 $56.2
2010 $36.6
2011 $32.7
2012 $98.3
2013 $87.8
2014 $81.0
2015 $49.7
2015 $36.6

(in millions, unless otherwise)

Net Equity
   
2006 $144.1
2007 $121.7
2008 $97.2
2009 $98.9
2010 $77.4
2011 $39.4
2012 $13.7
2013 $25.0
2014 $25.2
2015 $24.7
2016 $20.5
1Q17 $21.6
Profit  
   
2006 -$6.6
2007 -$20.5
2008 -$25.2
2009 -$52.5
2010 -$20.2
2011 -$37.7
2012 -$28.0
2013 $16.5
2014 $141,000
2015 -$390,000
2016 -$4.2
1Q17 $1.1

Note most of their branches were in retail stores, perhaps in areas with high unemployment and difficulty of making their mortgage payments.

Charge Offs

(in millions, unless otherwise)

Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential loans (non-owner occupied).

2006 $283,000 ($435,000 Loans to Individuals, -$152,000 1-4
Family residential property)
2007 $3.5 ($1.9 1-4 Family residential, $1.5 loans to individuals)
2008 $15.5 ($13.7 1-4 family, $1.8 loans to individuals)
2009 $12.9 ($8.7 1-4 family, $3.2 loans to individuals)
2010 $9.4 ($6.7 1-4 family, $1.9 loans to individuals)
2011 $25.0 ($14.6 1-4 Family, $9.6 loans to individuals, - 41,000
construction/land)
2012 $40.7 ($28.5 1-4 Family, $10.8 loans to individuals, $1.3
construction/dev., $1.1 construction/land, -$260,000
commercial/industrial loans, -$199,000 construction 1-4 family)
2013 $26.5 ($18.9 1-4 family, $8.2 loans to individuals, -$485,000
construction/land, -$92,000 commercial/ind., -$2,000 multifamily
residential)
2014 $15.8 ($8.2 1-4 family, $7.8 loans to individuals, $85,000
construction/land, -$242,000 commercial/ind.)
2015 $6.5 ($3.3 loans to individuals, $3.2 1-4 family, $106,000
construction/land, $10,000 nonfarm/nonres., $39,000
construction/land, -$12,000 commercial/industrial, -$4,000
multifamily).
2016 $5.0 ($3.2 loans to individuals, $2.5 1-4 family, $11,000 1-4
family, $-714,000 construction/land and other land, -$703,000
construction/land, -$5,000 multifamily).
1Q17 $1.7 ($950,000 loans to individuals, $750,000 1-4 family)

A "family owned bank:"
"Guaranty Bank is a fourth generation, family-managed company. Founded in 1923 by Joseph Saffro, its one small office in downtown Milwaukee, Wisconsin offered just mortgages and savings accounts. It survived the lean years of the twenties and began growing in the 1930s. At that time Joseph's son Samuel joined the business. Over the next 25 years, Guaranty Bank evolved into a full service bank with expanded products and services. Joseph and Samuel's vision grew as other family members joined the management team. Today, Samuel's son-in-law, Jerry Levy, is the chairman of Guaranty Bank. Jerry's son, Doug Levy, is Guaranty's President and CEO."
https://www.guarantybank.com/about-us/who-we-are

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.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $146.4 million.

FDIC Press Release:
https://www.fdic.gov/news/news/press/2017/pr17037.html

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.