Bank death watch: Corus and Guaranty
Another vulture is swarming Corus’ carcass. Meanwhile Guaranty late last week announced a major management shakeup.
Heavily invested in condo loans, the Chicago lender missed its June 18th deadline to raise capital and is on the verge of being seized by FDIC. Today WSJ reported that Starwood Capital is the latest private equity player to enter the fray. WSJ:
“We’re bidding on a bank,” Mr. Sternlicht said during a conference call with investors in Starwood funds on Monday. Without naming the bank, he said it is heavily concentrated in real-estate lending and has more than 110 construction loans. People with knowledge of the matter identified the bank as Corus.
Starwood is one of several companies that have shown interest in Corus, concentrated heavily on condominium construction lending in South Florida and other now-troubled housing markets. Investors don’t appear to be interested in buying the entire bank, but instead are looking at buying the bank’s assets out of receivership if regulators take over.
New York developer Related Companies, and private equity firm, Colony Capital, have also indicated interest in Corus. With $7.6 billion of assets and $7.2 billion of deposits, Corus would be the largest bank failure since BankUnited.
Meanwhile, Guaranty Bank, last Friday announced a major management shakeup. Guaranty, which missed its May 21st deadline to raise capital and has been discussing open bank assistance with FDIC, dumped the news late Friday. The changes announced include….
- Interim Chairman and CEO John Stuart loses those two roles and will revert to being a company director
- Board member Robert Kavanaugh retires
- SVP/CFO/CAO Ronald Murff resigns
- Kevin Hanigan, the former President and COO, becomes Chairman of Board, CEO and stays as President
- Treasurer Steven Raffaele replaces Murff
All of these changes are being made with regulator approval, a condition of the company’s cease & desist order.
With $14.4 billion of assets and $11.7 billion of deposits, Guaranty would be the biggest failure of the year.