DOW JONES NEWSWIRES 
 

Bank holding company Guaranty Financial Group Inc. (GFG) said it is probable it will not be able to continue as a going concern amid restated results that include an additional $1.45 billion in write-downs.

The woes set the stage for the Federal Deposit Insurance Corp. to take over the company's operations, which include more than 160 branches in Texas and California.

Guaranty's board has approved the Office of Thrift Supervision's request to allow the FDIC become receiver or conservator, but the company said in a filing with the Securities and Exchange Commission that an appointment hasn't been made yet. In the meantime, the OTS "is exercising a significant degree of control over what had heretofore been the functions of the board."

The company had expressed a similar doubt in May. The OTS had originally given it until May 21 to raise its capital levels. Guaranty Financial has said its capital ratios have been hurt by its mortgage-backed securities portfolio, and have been below regulatory requirements.

The company has taken steps such as selling off units in order to cut costs and focus on its core retail- and commercial-banking operations.

Guaranty said in the filing Friday it no longer believes it will be able to comply with an April cease-and-desist order from the OTS because of the asset write-downs. Among other things, the order places material restrictions on the company, including reaching certain capital levels. Guaranty said the write-downs further pressured capital levels.

"The company believes that these write-downs foreclosed the possibility of applying for" federal assistance, Guaranty said in its filing. "Our primary stockholders have not affirmed their willingness to commit to a capital infusion in support of such an application."

Guaranty said it continues to work with the OTS and FDIC as they look for alternatives for GFG's banking operations. Any deal that's made would likely not result in any proceeds going to Guaranty shareholders.

Shares slid 40.9% in premarket trading Friday to 13 cents. The stock through Thursday was off 92% so far this year.

There have been 56 U.S. bank closures so far in 2009.

-By Kerry Grace Benn and Kevin Kingsbury, Dow Jones Newswires; 212-416-2353; kerry.benn@dowjones.com