Another Bank Falls, More Opportunities for Credit Unions

According to Callahan & Associates analysis, a minimum of 15-20% of recently merged branch deposits find a new home during the year a merger or sale occurs. This suggests that between $1.8 and $2.4 billion from Guaranty Bank’s 162 branches will be “in play” over the coming year.

 
 

On August 21st, 2009 BBVA Compass, the American arm of Spanish Bank Banco Bilbao Vizcaya Argentina (BBVA), purchased all of Guaranty Bank's deposits except those from brokers, which the FDIC will repay directly. Guaranty Bank has been on the verge of collapse for months due to increasing losses in their portfolio of mortgage backed securities and other non performing real estate loans. According to the bank, the final blow came last month, when mortgage backed bonds they held were marked down leaving the bank "critically undercapitalized." The FDIC quietly solicited interest from a handful of potential buyers and helped broker a sale.

BBVA Compass will also take over Guaranty's 162 branches, 59 of which are in California and 103 in Texas. As of June 30th, 2009, Guaranty Bank had approximately $13 billion in total assets and $12 Billion dollars in deposits.

According to Callahan & Associates analysis, a minimum of 15-20% of recently merged branch deposits find a new home during the year a merger or sale occurs. This suggests that between $1.8 and $2.4 billion from Guaranty Bank's 162 branches will be "in play" over the coming year.

The table below shows details of the 5 cities in which Guaranty had the most deposits as of June 30th, 2008.

Guaranty Bank Deposit Data as of June 30th, 2008

City

Branches

Deposits

Deposit Change from 2007

12 Month Deposit Growth

Market Share

Dallas (TX)

8

$1,062,442,000

$74,069,000

7.49%

1.37%

Austin (TX)

9

$511,448,000

$17,484,000

3.54%

2.60%

Houston (TX)

6

$343,625,000

($19,123,000)

-5.27%

0.41%

Stockton (CA)

5

$260,526,000

($20,675,000)

-7.35%

6.29%

Riverside (CA)

3

$185,416,000

($12,429,000)

-6.28%

3.41%

An easy, quick way to find out how much your market can be affected by this change is Branch Analyzer, a web based analytical software from Callahan & Associates. Any user can drill down for data right to the individual branch level. With this data, one can find total deposits, local market share, and the rate of deposit growth over the past year.

Using this information, a credit union can decide the size of opportunity that could be available and the effort to commit pursuing it.

 

 

 

Aug. 24, 2009


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