Guaranty Bank Facing Guaranteed Loss
Guaranty Bank Facing Guaranteed Loss
The ninth largest bank the Guaranty Bank has been facing a challenge with their financial status for five years now. The amount of their losses accumulates to about $20 million; this is according to their annual monitoring data.
By the end of the first quarter of this year, the bank had another loss of about $ 5.7 million. Furthermore, its capital which protects the bank from loss from its loans is quickly slipping away.David L. Donihue, a consultant from the bank said that they are currently facing a very hard phase.
But Doug Levy, the chief executive of Guaranty says that they are progressing into a better loan portfolio, and the bank is looking for more investors to uplift and recapitalize their finances.
The largest loss of the bank was back in September 2009 when many Americans were falling into the recession and there was massive unemployment. The losses amounted to about $ 52.3 million this is according to their Federal Deposit Insurance Corp. records. The bank has belonged to the Levy family for decades and so far no one has set their eyes on purchasing the estate from them.
During their second set or mortgages a major loss has been inflicted in the bank’s portfolio. The bank has about 160 branches in Wisconsin, Georgia, Michigan, Illinois and Minnesota. Most of the branches across these five states are found in grocery stores and operate in lengthy hours, which according to Donihue is expensive for the bank.
The Guaranty has increased another $10.6 million to its loan-reserves in order to cover for their doubtful-debt accounts.
Levy says that the bank still expects to eventually regain its loss from their loans. The recession and the financial crisis have made it compulsory for banks to have more capital.The chief executive said that Guaranty has been making efforts to retrieve their old status in their financials. They are dedicated in trying to make these efforts work, though Donihue admitted that it’s not going to be easy.
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