Guaranty Financial Corp., the parent company of Guaranty Bank, has promised the Federal Reserve Bank of Richmond and Virginia's Bureau of Financial Institution that it will take steps to restore its "financial soundness."

In an agreement made public last week, $256 million-asset Guaranty said it will hire a new chief financial officer and submit plans for asset/liability management, liquidity and risk management, and other procedures. The Charlottesville company also must maintain an "adequate" loan-loss allowance and turn in quarterly loan-status reports.

In a balance-sheet restructuring last year Guaranty sold $13 million in long-term corporate bonds and sold a significant portion of its residential loan servicing portfolio. It had a net loss of $855,000 in the third quarter of 1999 but has been in the black all of this year.

Guaranty chairman Douglas E. Caton said his company has already started addressing many of the concerns raised by examiners.

He added that he does not expect the agreement to restrict the company's operation.

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