Texas-based Guaranty Bank is regrouping its California lending operation into a new Irvine office.
The commercial bank with $16 billion in assets says closing its Sacramento and San Diego offices and consolidating in Orange County will make it more efficient.
“Irvine was the place we could be central,” said Jon Larson, regional manager with the bank.
The move gives Guaranty Bank, a unit of Guaranty Financial Group Inc., easier access to clients in Orange, Los Angeles and San Diego counties, while cutting down on rent, he said.
The consolidation is part of the company’s newfound independence, Larson said. Austin, Texas-based Temple-Inland Inc., a maker of packaging products, spun off Guaranty Financial last year.
About 22 employees are set to move to the 9,000-square-foot Irvine office, which is in the 2050 Main St. building recently developed by Opus West Corp.
Most of Guaranty Bank’s clients in California are homebuilders based in OC.
Homebuilders account for about $600 million of the company’s $1 billion in assets in the state.
A slumping housing market has put much of the company’s lending on hold. Six lenders were cut from its staff.
The bank now counts 12 loan officers in that unit.
Corporate Focus
The company is using the downtime to focus on its corporate business and bring more balance to its lending, Larson said.
The Irvine office will have four corporate bankers relocating from the Sacramento office and eventually will hire more, he said.
Business loans of $10 million to $30 million are the norm for the group, according to Larson.
Guaranty acquired the corporate lending business when it bought California Financial Holding Corp., the parent of Stockton Savings, for $150 million in 1997.
The office already has three workers who handle Guaranty’s treasury management service, which helps companies manage cash.
Business is expected to be slow, though.
With a slow housing market, it takes longer for homebuilders to sell their homes and pay off loans, Larson said.
Lower interest rates set by the Federal Reserve could help clients, he said.
“It could be another year or two before things pick up again,” Larson said.
Adding Branches
When Guaranty Bank came to California with its San Diego office in 1992, the recession kept the bank idle for two years, he said.
Guaranty could look to open branches in OC, where it doesn’t have any now, Larson said.
“We need to have more physical locations” to build up deposits, he said.
Guaranty Bank has about 100 branches in Texas and 55 in California, with five in Riverside County.
Guaranty Financial also operates insurer Guaranty Insurance Services Inc.
The parent company is one of the country’s 50 largest publicly traded financial holding companies in terms of assets.
As of last week, Guaranty Financial had a market value of some $500 million.
Billionaire Investor
Billionaire investor Carl Icahn, who said in a Securities and Exchange Commission filing that he intends to talk to management about boosting Guaranty Financial’s value, owns more than 9% of the stock.
Last year Icahn advised Temple-Inland to shed Guaranty Financial along with its land development company Forestar Real Estate Group.
Last week, Guaranty Bank reported it made $78 million for 2007, compared to $121 million in 2006.
It also increased its credit loss provisions from $1 million a year ago to $50 million to cushion itself against bad loans.
Guaranty Bank also finances office buildings, shopping centers, industrial sites and senior independent and assisted living housing projects around the country.
