Regulators keep watch on Guaranty Bank

Regulators have reiterated their demands that Guaranty Bank improve its financial condition.

In a new “prompt corrective action directive” disclosed Friday, the U.S. Office of the Comptroller of the Currency orders Glendale-based Guaranty to, among other steps, increase capital, make sure its books are accurate and in compliance, and develop a plan for restoring the health of the bank.

The bank’s chief executive, Doug Levy, said actions ordered by the OCC already are underway as the bank strives to recover from financial blows going back to the Great Recession.

Guaranty has been under special scrutiny by regulators since 2009, when it ran into trouble as the housing market went sour and the foreclosure crisis occurred, resulting in losses on loans tied to homes. Loan losses are a drain on a bank’s capital.

In the past 10 calendar years, Guaranty has posted a profit twice, records from the Federal Deposit Insurance Corp. show. Its worst calendar year loss was $52.6 million in 2009. In calendar year 2016, Guaranty lost $4.2 million, according to FDIC data.

Levy said the new prompt corrective action directive, in effect, consolidates two previous orders issued by regulators. He said the bank already was working on steps listed in the new order, which was issued at the end of February.

“Nothing is new or alarming or a surprise to us,” Levy said.

Levy said Guaranty, which operates mostly in grocery store branches in Wisconsin, Illinois, Michigan, Minnesota and Georgia, has been making progress.

“Despite our capital levels continuing to be low, we actually had positive net income in eight out of the last 11 months, and we’re projecting to be profitable this fiscal year. So we keep executing on our plan, but we continue to be under a regulatory order,” Levy said.