Guaranty Bank & Trust in Milwaukee was shut down by federal regulators Friday, just a week after the Federal Deposit Insurance Corp. handled one of the costliest failures since the financial crisis.
First-Citizens Bank & Trust, a $33.8 billion-asset unit of First Citizens BancShares in Raleigh, N.C., has agreed to assume all deposits of Guaranty, a nationally chartered bank. In addition, First-Citizens will purchase $892.6 million of Guaranty’s $1 billion in assets.
The failure will cost the FDIC an estimated $146.4 million, a much smaller price than the agency faced with last week’s failure of First NBC Bank in New Orleans, which is expected to cost the Deposit Insurance Fund nearly $1 billion.
Guaranty had 119 branches in five states, with the vast majority of them operating in retail outlets like grocery and merchandise stores. Those retail outlets will not be reopening, the FDIC said, but the bank's 12 brick-and-mortar locations in Illinois, Minnesota and Wisconsin will reopen as First-Citizens branches.
Guaranty's collapse was the fifth failure this year and the first in Wisconsin since the March 2016 closing of North Milwaukee State Bank, which was also purchased by First-Citizens.