AUSTIN Guaranty Bank, headquartered in Austin, Texas was closed Friday by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver, according to a news release issued by the FDIC.

To protect the depositors, the FDIC entered into a purchase and assumption agreement with BBVA Compass, Birmingham, Ala., to assume all of the deposits of Guaranty Bank, excluding those from brokers.

Guaranty Bank had 103 branches in Texas and 59 branches in California.

Former branches of Guaranty Bank will reopen during normal banking hours Monday as branches of BBVA Compass. Depositors of Guaranty Bank will automatically become depositors of BBVA Compass. Depositors will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage, the release stated.

Customers should continue to use their existing branches until BBVA Compass can fully integrate the deposit records of Guaranty Bank.

During the past weekend, depositors of Guaranty Bank were able to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual, the news release advised.

As of June 30, Guaranty Bank had total assets of approximately $13 billion and total deposits of approximately $12 billion. In addition to assuming all of the deposits of the failed bank, BBVA Compass agreed to purchase $12 billion of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and BBVA Compass entered into a loss-share transaction on approximately $11 billion of Guaranty Bank's assets. BBVA Compass will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

BBVA Compass will purchase all deposits, except about $344 million in brokered deposits, held by Guaranty Bank. The FDIC will pay the brokers directly for the amount of their funds. Customers who placed money with brokers should contact them directly for more information about the status of their deposits.

Customers who have questions about the transaction may call the FDIC toll-free at 1-800-760-3641. The phone number will be operational from 8 a.m. to 8 p.m. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/guaranty-tx.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $3 billion. BBVA Compass's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives.

Guaranty Bank is the 81st FDIC-insured institution to fail in the nation this year, and the second in Texas. The last FDIC-insured institution closed in the state was Millennium State Bank of Texas, based in Dallas on July 2.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,246 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed.

The FDIC receives no federal tax dollars insured financial institutions fund its operations.