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Photo by Karen Brune Mathis - The First Guaranty Bank & Trust office along Riverside Avenue is one of the eight that will reopen today as branches of CenterState Bank.
Jax Daily Record Monday, Jan. 30, 201212:00 PM EST

CenterState Bank reopens First Guaranty today

by: Mark Basch Contributing Writer

Despite a pending agreement to raise capital by selling seven of its eight branches to another bank, federal regulators Friday shut down First Guaranty Bank & Trust Co. of Jacksonville and sold all eight branches to CenterState Bank of Florida.

CenterState said First Guaranty’s eight offices would reopen today during normal business hours as branches of First Guaranty Bank and Trust Co., a division of CenterState Bank.

First Guaranty has been saddled with bad loans and losing money for several years.

But the Fant family, which had run the bank since its founding in 1947, thought it found a way to keep operating as an independent bank with a deal announced in November to sell the seven branches to South Carolina-based CertusBank N.A.

That deal would have allowed First Guaranty to continue in operation with one branch in Arlington.

But before that deal — which required regulatory approval — could be completed, the Federal Deposit Insurance Corp. stepped in and closed the bank late on Friday.

In a news release issued by CenterState, the Fants said they approved the move.

“This is a home run for Jacksonville. CenterState is arguably Florida’s best known bank for customer service and financial strength. The Fant family is on board with CenterState,” First Guaranty Chairman Emeritus Julian “Hickory” Fant Jr. said in the release.

CenterState has about $2.5 billion in assets and 69 offices in 20 Florida counties. It has been looking to gain entry into the Jacksonville market since July, when it named former Jacksonville Bank President Gilbert Pomar as market president for the Northeast Florida region.

“We believe Jacksonville needs a bank like ours in today’s economic environment,” Pomar said in the news release.

“First Guaranty Bank and the Fant family have a rich and wonderful tradition here in Jacksonville. We are dedicated to keeping that and adding to it over time,” he said.

First Guaranty had been under orders from regulators since August 2010 to raise capital. Four years of losses, including a loss of $6.2 million in the first nine months of 2011, had eroded its core capital down to just 1.64 percent of assets as of Sept. 30, according to its most recent report filed with the FDIC. The average capital-to-assets ratio of its peer group of banks was 9.49 percent, FDIC data shows.

First Guaranty still was facing a large amount of additional loan losses after being hit hard by the real estate market collapse of the past few years. Its ratio of non-current loans to total loans was 31.49 percent at Sept. 30, about 10 times larger than the average ratio of its peer group. Non-current loans are loans that are either 90 days or more past due or are not being repaid at all.

First Guaranty had $377.9 million in assets and $349.5 million in deposits as of Sept. 30. CenterState agreed to buy all of the deposits and essentially all of the assets, the FDIC said.

Under a loss-share agreement, which is common in FDIC-assisted deals, CenterBank and the FDIC will share in the losses on $292.9 million of the assets acquired from First Guaranty.

The FDIC estimates that the deal will cost $82 million to its deposit insurance fund. But it said compared with other alternatives for resolving First Guaranty’s problems, this was the least costly solution for the


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