Guaranty Financial Group ( GFG) signaled its Guaranty Bank of Austin probably would "not be able to continue as a going concern," after the holding restated the bank's first-quarter financial statements late Thursday.

Guaranty Financial was directed by the Office of Thrift Supervision to announce a $1.5 billion writedown of private mortgage-backed securities, as well as a goodwill impairment charge of $107 million. This left Guaranty Bank with a Tier 1 leverage ratio of -5.78% and a total risk-based capital ratio was -5.52% as of March 31. These ratios need to be at least a positive 5% and 10% for most banks and S&Ls to be considered well-capitalized under regulatory capital guidelines.

Under an OTS cease and desist order from April 6, the bank was required to raise capital sufficient for it to maintain a Tier 1 leverage ratio of 8% and a total risk-based capital ratio of 11%.

The company said that the OTS and Federal Deposit Insurance Corp. were still pursuing "potential alternatives for the business of the bank. Any such transaction would not be expected to result in the receipt of any proceeds by the stockholders of the company."

Guaranty Financial also said that its board of directors had complied with an OTS request for it to consent to handing the FDIC operating control of Guaranty Bank, although this had not yet occurred.

"In the meantime, the board continues to function, but the OTS is exercising a significant degree of control over what had heretofore been the functions of the board," the company said.

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