Banco Bilbao Vizcaya Argentaria SA Now Owns Guaranty Bank

Yesterday I reported that Guaranty Bank was close to be taken over by Banco Bilbao Vizcaya Argentaria SA from Spain, and now that became a reality today, becoming the first foreign bank to take over a failed American Bank through regulators via their subsidiary BBVA Compass.

BBVA Compass is the U.S unit of Banco Bilbao Vizcaya Argentaria SA, which acquired $12 billion of the $13 billion assets available from Guaranty Bank. The FDIC exposed itself to back up possible losses in the portfolio of up to $11 billion.

Texas-based Guaranty was among the largest independent banks operating in Texas, with 162 branches, and failed primarily from investing in securities issued from other banks.

With the collapse of Guaranty Bank, it makes them the 10th-largest bank failure in American banking history, and the 81st bank failure so far this year. It is the third failure this year of a bank which held over $12 billion in assets, behind BankUnited FSB in Florida with $12.8 billion in assets, and the failure last week of Alabama-based Colonial BancGroup which held $25 billion in assets.

According to estimates of the FDIC, it’ll cost insurance fund another $3.3 billion, including the other three bank failures today.

Also failing today were CapitalSouthe Bank, based in Alabama, which held assets worth $617 million and $546 million in deposits.

In Georgia, a couple more banks were closed, including First Coweta Bank, based in Newnan, Georgia, with assets of $167 million and deposits of $155 million. The majority of their assets were sold to another Georgia-based bank, United Bank of Zebulon, Georgia.

Also failing was ebank, an Internet-based bank with assets worth $143 million and $130 million in deposits. Most of their assets were acquired by Stearns Bank of St. Cloud, Minnesota, which has gobbled up quite a few failed banks so far in 2009. They have a sweetheart deal with the FDIC where the FDIC will take the brunt of the majority of future losses in the failed banks in return for Stearns taking on the assets of the failed banks.

So far this year estimates are failed banks have cost the FDIC over $20 billion from its deposit-insurance fund, already more than last years $16.7 billion, and we have many more bank failures to come in 2009.

A report next week will tell the whole FDIC story as of June 30, where we’ll get a look at the balance left in the fund after the failures of 24 banks in the second quarter. At the end of March they had close to $13 billion left to work with.

To make things worse, there are already 30 banks failures in the third quarter, with two of them already the largest of the year by far.