BBVA Compass adds to local presence with Guaranty purchase
Austin-based Guaranty Bank was closed by Federal regulators on Aug. 21 and most of the bankÂ’s assets were sold to BBVA Compass, the U.S.-subsidiary of Banco Bilbao Vizcaya Argentaria S.A.
Guaranty Bank, with about $13 billion in total assets and $12 billion in deposits, became the 81st bank failure of 2009 and the second largest of the year. Guaranty Bank, started in 1988, operated 105 branches in Texas and 59 branches in California. The bank was one of the largest based in Texas, but had been reeling from nearly $1.5 billion in mortgage writedowns, many tied to loans in California.
Guaranty Bank has seven branches in Tarrant County, three in Collin County and 15 in Dallas County, according to the Federal Deposit Insurance Corp.Â’s June 2008 report.
BBVA Compass said it will acquire $12 billion in assets and $11.5 billion in deposits and entered into a loss sharing agreement with the FDIC that covers all the acquired loans. FDIC will bear 80 percent of the first $2.3 billion of losses and 95 percent of the losses above that threshold, said BBVA Compass.
“This compelling transaction makes excellent strategic sense and represents an exciting growth opportunity for BBVA Compass as we continue to build the leading banking franchise in the high growth Sunbelt region,” said José MarÃa GarcÃa Meyer, BBVA country manager for the U.S. and chairman of BBVA Compass. “The increase in our branch distribution network further strengthens our retail banking unit while also providing benefits to our other business lines including corporate banking, commercial banking, insurance and wealth management.”
The acquisition with further strengthen the position of Bilbao, Spain-based BBVA in Texas. In 2007, BBVA purchased Compass Bankshares, which is based in Birmingham, but has a substantial Texas presence, for $9.6 billion. According to BBVA officials, adding in the Guaranty acquisition will make Compass the fourth largest bank in Texas and increase deposit market share in the state from 4.9 percent to 6.4 percent. Nationwide, it will make BBVA Compass the 15th largest U.S. commercial bank operating in seven states with approximately $49 billion in total deposits and more than 750 branches.
“We expect to integrate Guaranty to our operating systems and product platforms early in 2010, if not before,” said Manolo Sánchez, president and CEO of BBVA Compass. “At that time, Guaranty customers will be able to take advantage of a larger branch network while enjoying access to a broader array of innovative banking, insurance and investment products and services.”
BBVA is not the only bank based in Spain to purchase U.S. assets since the recession has caused an increase in bank failures. In January 2009, Madrid-based Santander purchased PennsylvaniaÂ’s Sovereign Bank.
rfrancis@bizpress.net
