Guaranty Financial Gets Cash Infusion

Robert Rowling, through a company he chairs, TRT Financial Holdings, is making a $38.4 million capital infusion into Guaranty Financial Group Inc., Austin, Tex. Mr. Rowling is purchasing 7.4 million shares of Guaranty's common stock at $5.17 per share. The stock closed on May 23 at $5.43 per share and was up to $6.22 as of mid-morning on May 27, the day the deal was disclosed. Furthermore, within 120 days of the initial stock purchase, Mr. Rowling will purchase convertible preferred stock that will result in him owning 19.9% of Guaranty's outstanding common stock. The sale to Mr. Rowling is in addition to a stock rights offering announced on May 1. Guaranty lost $10 million in the first quarter, as it took a higher provision for credit losses because of loans to homebuilders, particularly in northern and central California. Guaranty is also the nation's 10th largest warehouse lender as of the end of 2006, according to the Mortgage Industry Directory.