-- Overall risk profile of the bank continues to improve despite a
challenging earnings quarter
-- Capital remains strong -- ratios exceed all regulatory
"well-capitalized" thresholds
-- Our strong liquidity level further improved during 2010 with a $77.4
million increase in cash and investments
-- Nonperforming assets decline by 13.4% during the fourth quarter 2010
-- Classified assets decline 22.9% overall throughout 2010 and our
internal watch list of potential problem loans declines by 63.0% during
2010
-- Deposits increase by $48.1 million, or 5.1%, during the fourth quarter,
excluding time deposits
Guaranty Bancorp (
-- Despite the 2010 net loss, the Company continues to exceed the
regulatory minimums for a "well capitalized" institution. At December
31, 2010, our total risk-based capital ratio was 14.99% as compared to
13.80% at December 31, 2009.
-- Although provision for loan losses increased by $9.5 million in the
fourth quarter 2010 as compared to the same quarter in 2009, the
overall 2010 provision for loan losses decreased by $16.7 million, or
32.7% from 2009. Further, our overall nonperforming assets and
classified assets declined during 2010.
-- We took our first-ever other-than-temporary-impairment in the amount of
$3.5 million in the fourth quarter 2010. This was related to a local
non-rated municipal bond where the underlying affordable housing
project was abandoned by the bond's sponsor. 89% of our remaining
investment portfolio is comprised of bonds backed by governmental or
government-sponsored agencies or securities issued by the Federal
Reserve Bank or Federal Home Loan Bank.
-- A deferred tax asset valuation allowance was established in the amount
of $8.5 million during the fourth quarter 2010. Without this deferred
tax asset valuation allowance, our net loss for 2010 would have
narrowed by $6.4 million, or 21.4%, from 2009.
-- The Company maintains a high level of extremely liquid overnight funds,
which increased in both the fourth quarter 2010 and for the
year-to-date period in 2010. These liquid overnight funds reduced our
fourth quarter 2010 net interest margin by 26 basis points and 2010 net
interest margin by 29 basis points. Despite these liquid overnight
funds, our net interest margin improved by 21 basis points during 2010.
Mr. Quinn continued, "Another one of our core strategic initiatives is to
increase core deposits. Our thirty-four Colorado branches allow us to
focus on growing our retail and business customer base. In addition to
increasing the overall number of accounts during 2010, we successfully
increased the dollar amount of our demand and savings deposits. We have
also reorganized our small and middle-market business loan groups to enable
them to more effectively assist businesses within the communities we
serve."
The Company's net loss for the year-ended December 31, 2010 was $31.3
million, or $0.72 loss per basic and diluted common share including the
effect of preferred stock dividends, as compared to a net loss of $29.2
million, or $0.60 loss per basic and diluted common share for the same
period in 2009 including the effect of preferred stock dividends. The loss
before income taxes was $37.6 million in 2010 compared to $48.4 million in
2009, an improvement of $10.8 million. The primary causes for the
improvement in 2010 are a $16.7 million dollar reduction in the provision
for loan losses, a $1.6 million increase in net interest income, a $1.2
million gain recognized on the sale of loans held for sale, as well as
declines in most categories of noninterest expense. Partially offsetting
these improvements was a $9.0 million increase in OREO expenses related
mostly to write-downs and a $3.5 million other-than-temporary-impairment on
a local non-rated municipal bond.
Key Financial Measures
Income Statement
Quarter Ended Year Ended
---------------------------- ------------------
December September December December December
31, 2010 30, 2010 31, 2009 31, 2010 31, 2009
-------- -------- -------- -------- --------
(Dollars in thousands, except per share amounts)
Loss before income taxes $(21,133) $ (6,463) $(11,135) $(37,629) $(48,368)
Net loss (before preferred
stock dividends) (21,133) (4,007) (1,885) (31,339) (29,207)
Preferred stock
dividends 1,453 1,421 1,389 5,624 1,389
Loss per common share
after giving effect to
preferred stock
dividend-basic &
diluted $ (0.44) $ (0.11) $ (0.07) $ (0.72) $ (0.60)
Return on average assets (4.32%) (0.81%) (0.35%) (1.57%) (1.42%)
Net interest margin 3.39% 3.53% 3.26% 3.47% 3.26%
Balance Sheet
December September December
31, 2010 30, 2010 % Change 31, 2009 % Change
--------- --------- -------- --------- --------
(Dollars in thousands, except per share amounts)
Cash and cash
equivalents $ 141,465 $ 109,770 28.9 % $ 234,483 (39.7)%
Total investments 418,668 401,131 4.4 % 248,236 68.7 %
Total loans, net of
unearned discount 1,204,580 1,289,492 (6.6)% 1,519,608 (20.7)%
Loans held for sale 14,200 - n/m 9,862 44.0 %
Allowance for loan
losses (47,069) (41,898) 12.3 % (51,991) (9.5)%
Total assets 1,870,052 1,933,146 (3.3)% 2,127,580 (12.1)%
Average assets,
quarter-to-date 1,940,513 1,962,828 (1.1)% 2,117,257 (8.3)%
Total deposits 1,462,351 1,512,479 (3.3)% 1,693,290 (13.6)%
Book value per
common share 1.76 2.25 (21.8)% 2.50 (29.6)%
Tangible book value
per common share 1.50 1.97 (23.9)% 2.13 (29.7)%
Tangible book value
per common share
(after giving effect
to conversion of
preferred stock) 1.62 1.90 (14.7)% 2.00 (19.0)%
Book value of
preferred stock 64,818 63,372 2.3 % 59,227 9.4 %
Liquidation value of
preferred stock 66,025 64,579 2.2 % 60,434 9.3 %
Equity ratio - GAAP 8.57% 9.60% (10.7)% 9.05% (5.3)%
Tangible equity
ratio 7.88% 8.88% (11.3)% 8.23% (4.3)%
Total risk-based
capital ratio 14.99% 15.28% (1.9)% 13.80% 8.6 %
Net Interest Income and Margin
Quarter Ended Year Ended
---------------------------- ------------------
December September December December December
31, 2010 30, 2010 31, 2009 31, 2010 31, 2009
-------- -------- -------- -------- --------
(Dollars in thousands)
Net interest income $ 15,394 $ 16,196 $ 16,284 $ 64,355 $ 62,773
Interest rate spread 3.02% 3.16% 2.81% 3.09% 2.71%
Net interest margin 3.39% 3.53% 3.26% 3.47% 3.26%
Net interest margin,
fully tax equivalent 3.46% 3.61% 3.34% 3.55% 3.34%
Fourth quarter 2010 net interest income of $15.4 million decreased by $0.8 million from the third quarter 2010, and decreased by $0.9 million from the fourth quarter 2009. The Company's net interest margin of 3.39% for the fourth quarter 2010 reflected a decrease of 14 basis points from the third quarter 2010 and an increase of 13 basis points from the fourth quarter 2009. On an overall basis, the change in mix of earning assets put downward pressure on our net interest margin. For example, the Company had an average of $153.7 million of liquid overnight funds in 2010 as compared to $75.9 million in 2009. These liquid overnight funds reduced our net interest margin by approximately 29 basis points in 2010 as compared to 12 basis points in 2009. The decrease in net interest margin in the fourth quarter 2010 as compared to the third quarter 2010 is due mostly to a 24 basis point decline in the yield on earning assets, driven primarily by a change in mix from higher earning loans to lower yielding investment securities and overnight funds. Partially offsetting the decline in yield on earning assets in the fourth quarter was a ten basis point improvement in the cost of our interest bearing liabilities. The decline in net interest income in the fourth quarter 2010 as compared to the third quarter 2010 is due to the $17.5 million decrease in average earning assets coupled with the abovementioned decline in margin over the same period. Net interest margin increased by 13 basis points in the fourth quarter 2010, as compared to the same quarter in 2009. This increase is primarily the result of a 48 basis point decrease in the cost of our interest bearing liabilities. This decrease is mostly attributable to the 71 basis point decrease in the cost of our certificates of deposit. The decrease in cost of funds was partially offset by a 27 basis point decrease in the yield on earning assets due to a shift from higher yielding loans to lower yielding investment securities and overnight funds. Although net interest margin increased by 13 basis points in the fourth quarter 2010 as compared to the same period in 2009, net interest income declined by $0.9 million over the same period. This decline in net interest income is the result of a $1.1 million favorable rate variance combined with a $2.0 million unfavorable volume variance due to a $180.9 million decrease in average earning assets. Net interest income for the year ended December 31, 2010 increased by $1.6 million to $64.4 million compared to 2009. This increase was the result of a $11.2 million favorable rate variance offset by a $9.6 million unfavorable volume variance. The favorable rate variance is due to a 21 basis point increase in our net interest margin in 2010 as compared to 2009. The net interest margin improved in 2010 primarily as a result of a 68 basis point decrease in the cost of interest bearing liabilities, strongly influenced by a 118 basis point decline in the cost of time deposits. Also influencing the increase in net interest margin was a 22 basis point increase in loan yields. Despite the 22 basis point increase in loan yields the overall yield on earning assets declined by 30 basis points in 2010 as compared to 2009 due to change in mix from higher yielding loans to lower yielding investment securities and overnight funds. The decrease in average loan balances is also the primary cause of the unfavorable volume variance. Noninterest Income The following table presents noninterest income as of the dates indicated:
Quarter Ended Year Ended
---------------------------- ------------------
December September December December December
31, 2010 30, 2010 31, 2009 31, 2010 31, 2009
-------- --------- -------- -------- --------
(In thousands)
Noninterest income:
Customer service and
other fees $ 2,430 $ 2,343 $ 2,206 $ 9,241 $ 9,520
Gain (loss) on sale of
securities 216 82 (1) 313 (2)
Gain on sale of loans - - - 1,196 -
Other-than-temporary
-impairment (OTTI) of
securities (3,500) - - (3,500) -
Other 256 128 127 852 861
-------- --------- -------- -------- --------
Total noninterest income $ (598) $ 2,553 $ 2,332 $ 8,102 $ 10,379
======== ========= ======== ======== ========
The $3.2 million decrease in noninterest income in the fourth quarter as
compared to the third quarter 2010 is mostly due to a $3.5 million
credit-related other-than-temporary-impairment (OTTI) recognized on a
single,
non-rated municipal bond. The sponsor of this local revenue bond made a
decision to abandon the underlying project, thereby causing a default to
occur in the fourth quarter when they failed to make scheduled interest
payments.
The $2.3 million decrease in noninterest income between 2009 and 2010 is
primarily attributable to the $3.5 million OTTI discussed above, partially
offset by a $1.2 million gain recognized on the sale of loans in the second
quarter 2010.
Noninterest Expense
The following table presents noninterest expense as of the dates indicated:
Quarter Ended Year Ended
--------------------------- -----------------
December September December December December
31, 2010 30, 2010 31, 2009 31, 2010 31, 2009
-------- --------- -------- -------- --------
(In thousands)
Noninterest expense:
Salaries and employee
benefits $ 6,456 $ 6,551 $ 6,560 $ 26,042 $ 26,547
Occupancy expense 1,783 1,890 1,854 7,399 7,609
Furniture and equipment 927 850 1,060 3,720 4,441
Amortization of intangible
assets 1,283 1,285 1,556 5,168 6,278
Other real estate owned 1,209 7,836 3,281 14,909 5,898
Insurance and assessment 1,336 1,596 1,612 6,569 6,536
Professional fees 824 677 963 3,117 3,224
Other general and
administrative 2,611 2,027 2,860 8,762 9,872
-------- --------- -------- -------- --------
Total noninterest expense $ 16,429 $ 22,712 $ 19,746 $ 75,686 $ 70,405
======== ========= ======== ======== ========
The $6.3 million decrease in noninterest expense in the fourth quarter 2010
as compared to the third quarter 2010 is due mostly to a $6.6 million
decrease in expenses related to other real estate owned and a decrease of
$0.3 million in insurance and assessments, partially offset by a $0.6
million increase in other general and administrative expenses. The
decrease in other real estate owned expense is due mostly to a significant
reduction in net write-downs on other real estate owned properties
resulting from valuation adjustments and sales. The decrease in insurance
and assessments is due mostly to a $0.3 million, or 23.8%, decrease in FDIC
insurance costs. The $0.6 million increase in other general and
administrative expense is primarily related to increased collection and
litigation expenses incurred in relation to problem assets. All other
categories of expense declined or remained relatively flat in the fourth
quarter 2010 as compared to the third quarter 2010.
The $3.3 million decrease in noninterest expense in the fourth quarter 2010
as compared to the same period in 2009 is primarily the result of a $2.1
million decrease in other real estate owned expense as well as smaller
decreases in all other categories of noninterest expense.
Noninterest expense for the year ended December 31, 2010 increased by $5.3
million compared to the same period in 2009 primarily due to a $9.0 million
increase in expenses associated with other real estate owned, partially
offset by decreases in nearly all other categories of noninterest expense.
The increase in other real estate owned expenses is due mostly to greater
write-downs related to valuation adjustments and sales.
Preferred Stock Dividend
Effective November 15, 2010, a non-cash preferred stock dividend was paid
in the form of additional shares of Series A convertible preferred stock to
holders of Series A convertible preferred stock in the amount of $1.5
million.
Balance Sheet
December September % December %
31, 2010 30, 2010 Change 31, 2009 Change
---------- ---------- ------ ---------- ------
(Dollars in thousands, except per share amounts)
Total assets $1,870,052 $1,933,146 (3.3)% $2,127,580 (12.1)%
Average assets,
quarter-to-date 1,940,513 1,962,828 (1.1)% 2,117,257 (8.3)%
Loans, net of
unearned discount 1,204,580 1,289,492 (6.6)% 1,519,608 (20.7)%
Total deposits 1,462,351 1,512,479 (3.3)% 1,693,290 (13.6)%
Equity ratio - GAAP 8.57% 9.60% (10.7)% 9.05% (5.3)%
Tangible equity ratio 7.88% 8.88% (11.3)% 8.23% (4.3)%
At December 31, 2010, the Company had total assets of $1.9 billion, which
represented a $63.1 million decline as compared to September 30, 2010 and a
$257.5 million decrease as compared to December 31, 2009. The decline in
assets from December 31, 2009 is mostly due to a $315.0 million decline in
loans, net of unearned discount, partially offset by a $168.4 million
increase in available for sale securities over the same time period. This
loan decline was due mostly to a $170.3 million decline in commercial loans
and a $132.6 million decline in real estate loans. The increase in
securities is nearly all related to purchases of mortgage-backed government
agency or government-sponsored agency securities.
The following table sets forth the amounts of our loans outstanding
(excluding loans held for sale) at the dates indicated:
December 31, September 30, December 31,
2010 2010 2009
----------- ----------- -----------
(In thousands)
Loans on real estate:
Residential and commercial $ 680,895 $ 740,106 $ 760,719
Construction 57,351 56,624 105,612
Equity lines of credit 50,289 51,903 54,852
Commercial loans 350,725 370,281 521,016
Agricultural loans 14,413 16,088 18,429
Lease financing 3,143 4,014 4,011
Installment loans to individuals 28,582 30,303 36,175
Overdrafts 565 627 358
SBA and other 20,443 21,595 20,997
----------- ----------- -----------
1,206,406 1,291,541 1,522,169
Unearned discount (1,826) (2,049) (2,561)
----------- ----------- -----------
Loans, net of unearned discount $ 1,204,580 $ 1,289,492 $ 1,519,608
=========== =========== ===========
Since December 31, 2009, the ratio of construction, land and land development loans to capital has fallen by 25 percentage points to 85% at December 31, 2010. Similarly, the ratio of commercial real estate loans to capital has fallen by 29 percentage points to 300% at December 31, 2010. These ratios have now fallen to levels below or equal to the regulatory commercial real estate concentration guidelines of 100% for land and construction loans and 300% for all investor real estate loans and are expected to continue to further decline throughout the first two quarters of 2011. The following table sets forth the amounts of our deposits outstanding at the dates indicated:
December September December
31, 2010 30, 2010 31, 2009
----------- ----------- -----------
(In thousands)
Noninterest-bearing deposits $ 374,500 $ 358,447 $ 366,103
Interest-bearing demand 178,042 165,000 171,844
Money market 357,036 340,706 352,127
Savings 79,100 76,429 71,816
Time 473,673 571,897 731,400
----------- ----------- -----------
Total deposits $ 1,462,351 $ 1,512,479 $ 1,693,290
=========== =========== ===========
Noninterest-bearing deposits as a percentage of total deposits increased to
25.6% at December 31, 2010, as compared to 21.6% at December 31, 2009.
Deposits, other than time deposits, increased by $26.8 million, at December
31, 2010 as compared to December 31, 2009 and increased by $48.1 million as
compared to September 30, 2010. The increases in deposits were primarily
attributable to a business and retail strategic deposit gathering campaign
which began in the third quarter of 2009 and continued throughout all of
2010. We plan to continue this deposit campaign, which includes a variety
of different advertising media, in 2011.
Time deposits decreased during 2010 primarily as a result of management's
efforts to reduce the overall level of higher cost time deposits, including
brokered and internet deposits. Total brokered deposits at December 31,
2010 were $179.9 million as compared to $291.3 million at December 31,
2009. In addition to this $111.4 million decline in brokered deposits, we
also experienced a $60.2 million decline in internet time deposits. The
remaining decline in time deposits is primarily related to the non-renewal
of other higher cost certificates of deposits.
Borrowings were $163.2 million at December 31, 2010 as compared to $164.2
million at September 30, 2010 and $164.4 million at December 31, 2009. The
entire balance of borrowings at each balance sheet date consisted of term
advances with the Federal Home Loan Bank.
Regulatory Capital Ratios
All of the regulatory capital ratios are above the highest regulatory
capital threshold of "well-capitalized" at December 31, 2010. The
Company's and the subsidiary bank's actual capital ratios for December 31,
2010 and December 31, 2009 are presented in the table below:
Minimum
Requirement
Ratio at Ratio at Minimum for "Well
December December Capital Capitalized"
31, 2010 31, 2009 Requirement Institution
----------- ----------- ----------- -----------
Total Risk-Based
Capital Ratio:
Consolidated 14.99% 13.80% 8.00% N/A
Guaranty Bank and
Trust Company 14.07% 12.82% 8.00% 10.00%
Tier 1 Risk-Based
Capital Ratio:
Consolidated 8.55% 9.43% 4.00% N/A
Guaranty Bank and
Trust Company 12.80% 11.55% 4.00% 6.00%
Leverage Ratio:
Consolidated 6.23% 7.89% 4.00% N/A
Guaranty Bank and
Trust Company 9.33% 9.66% 4.00% 5.00%
Generally, the allowance for loan losses is included in total capital for regulatory purposes; however, it is limited to 1.25% of total risk-weighted assets. At December 31, 2010, approximately $29.3 million of the subsidiary bank's allowance for loan losses was disallowed from being included in total risk-based capital under the regulatory capital rules, or approximately 2.08% of the subsidiary bank's risk-weighted assets. Asset Quality The following table presents selected asset quality data (excluding loans held for sale) as of the dates indicated:
December September June 30, March December
31, 2010 30, 2010 2010 31, 2010 31, 2009
-------- -------- ------- -------- --------
(Dollars in thousands)
Nonaccrual loans, not
restructured $ 74,304 $ 65,921 $64,339 $ 70,500 $59,584
Other nonperforming loans 3,317 4,420 1,065 558 123
-------- -------- ------- -------- -------
Total nonperforming loans
(NPLs) $ 77,621 $ 70,341 $65,404 $ 71,058 $59,707
Other real estate owned and
foreclosed assets 22,898 45,700 30,298 30,918 37,192
-------- -------- ------- -------- -------
Total nonperforming assets
(NPAs) $100,519 $116,041 $95,702 $101,976 $96,899
======== ======== ======= ======== =======
Accruing loans past due 90
days or more (1) $ 3,317 $ 4,420 $ 1,065 $ 558 $ 123
======== ======== ======= ======== =======
Accruing loans past due
30-89 days (1) $ 21,555 $ 21,876 $33,050 $ 21,956 $21,709
======== ======== ======= ======== =======
Allowance for loan losses $ 47,069 $ 41,898 $46,866 $ 52,015 $51,991
======== ======== ======= ======== =======
Selected ratios:
NPLs to loans, net of
unearned discount 6.44% 5.45% 4.76% 4.95% 3.93%
NPAs to total assets 5.38% 6.00% 4.82% 5.02% 4.55%
Allowance for loan losses
to NPAs 46.83% 36.11% 48.97% 51.01% 53.65%
Allowance for loan losses
to NPLs 60.64% 59.56% 71.66% 73.20% 87.08%
Allowance for loan losses
to loans, net of unearned
discount 3.91% 3.25% 3.41% 3.62% 3.42%
Loans 30-89 days past due
to loans, net of unearned
discount 1.79% 1.70% 2.40% 1.53% 1.43%
(1)Past due loans include both loans that are past due with respect to
payments and loans that are past due because the loan has matured, and are
in the process of renewal, but continue to be current with respect to
payments.
The $22.8 million decrease in other real estate owned at December 31, 2010
as compared to September 30, 2010, is primarily attributable to the sale of
two properties valued at $17.6 million and $4.2 million in November 2010.
The types of nonperforming loans (excluding loans held for sale) as of
December 31, 2010 and September 30, 2010 are as follows:
Nonperforming Loans
-----------------------------------------------------
December 31, 2010 September 30, 2010
-------------------------- --------------------------
Loan Related Loan Related
Balance Percent Allowance Balance Percent Allowance
-------- ------- -------- -------- ------- --------
(Amounts in thousands)
Residential
Construction, Land
and Land Development $ 7,254 9.3% $ 295 $ 7,949 11.3% $ 718
Other Residential
Loans 7,524 9.7% 583 4,814 6.8% 492
Commercial and
Industrial Loans 19,955 25.7% 1,940 12,641 18.0% 1,784
Commercial Real
Estate 42,833 55.2% 3,840 44,887 63.8% 541
Other 55 0.1% 1 50 0.1% 4
-------- ------- -------- -------- ------- --------
Total $ 77,621 100.0% $ 6,659 $ 70,341 100.0% $ 3,539
======== ======= ======== ======== ======= ========
The $7.3 million increase in nonperforming loans during the fourth quarter
2010 is mostly due to the result of placing two loans relationships with an
aggregate value of $21.6 million on nonaccrual status, offset by other
reductions and charge-offs. We anticipate on disposing of up to $15.8
million of nonperforming loans and other real estate owned during the first
quarter 2011, with further dispositions expected in the second quarter
2011.
The types of loans included in the accruing loans past due 30-89 days as of
December 31, 2010 and September 30, 2010 are as follows:
Accruing loans past due 30-89 days
--------------------------------------
December 31, 2010 September 30, 2010
--------------------------------------
Loan Loan
Balance Percent Balance Percent
-------- ------- ---------- ---------
(Amounts in thousands)
Residential Construction, Land and
Land Development $ 2,770 12.9% $ 3,761 17.2%
Other Residential Loans 1,444 6.7% 1,602 7.3%
Commercial and Industrial Loans 7,594 35.2% 3,557 16.3%
Commercial Real Estate 4,047 18.8% 12,168 55.6%
Other 5,700 26.4% 788 3.6%
-------- ------- ---------- ---------
Total $ 21,555 100.0% $ 21,876 100.0%
======== ======= ========== =========
Net charge-offs in the fourth quarter 2010 were $14.3 million, of which
$5.1 million relates to the bank's held-for-sale loan. The fourth quarter
charge-offs are primarily a result of updated appraisals or valuations,
which will better position the Company to more quickly dispose of its
problem assets. Net charge-offs were $7.1 million in the same quarter last
year and $7.5 million in the third quarter 2010. On a year-to-date basis,
net charge-offs were $39.3 million in 2010 as compared to $44.1 million in
2009.
In addition to the $6.7 million of allowance specifically allocated to
impaired loans, the Company has partially charged-off $11.9 million of the
impaired loans on the balance sheet as of December 31, 2010. Although
these partial charge-offs significantly reduced the specific component of
our allowance for loan losses, they had the opposite effect on the general
component of the allowance for loan losses. As the fourth quarter 2010
charge-offs exceeded the amount of charge-offs that rolled off of our
historical loss computation, the general component of the allowance for
loan losses increased to $40.4 million at December 31, 2010, or 3.36% of
loans, net of unearned discount, as compared to $38.4 million, or 2.98% of
loans, net of unearned discount, at the end of the previous quarter.
The Company recorded a provision for loan losses in the fourth quarter 2010
of $19.5 million, as compared to $2.5 million in the third quarter 2010 and
$10.0 million in the fourth quarter 2009. The increase in the provision
for loan losses was the result of the heightened level of fourth quarter
charge-offs on the historical loss component of the allowance, as well as
an increase in the specific allowance related to impaired loans.
Shares Outstanding
As of December 31, 2010, the Company had 53,373,383 shares of common stock
outstanding, including 1,768,186 shares of unvested stock awards, but
excluding 156,567 shares of common stock to be issued under its deferred
compensation plan. In addition, the Company had 66,025 shares of Series A
convertible preferred stock outstanding, with a liquidation value of $1,000
per share.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures related to tangible
assets, including tangible book value, tangible book value after giving
effect to conversion of preferred stock, and tangible equity ratio, which
exclude intangible assets.
The Company discloses these non-GAAP financial measures to provide
meaningful supplemental information regarding the Company's operational
performance and to enhance investors' overall understanding of the
Company's core financial performance. Management believes that these
non-GAAP financial measures allow for additional transparency and are used
by some investors, analysts and other users of the Company's financial
information as performance measures. These non-GAAP financial measures are
presented for supplemental informational purposes only and should not be
considered a substitute for financial information presented in accordance
with GAAP. These non-GAAP financial measures presented by the Company may
be different from non-GAAP financial measures used by other companies.
The following non-GAAP schedules reconcile the book value per share to the
tangible book value per share and the GAAP equity ratio to the tangible
equity ratio as of the dates indicated:
December September December
31, 2010 30, 2010 31, 2009
----------- ----------- -----------
(Dollars in thousands,
except per share amounts)
Tangible Book Value per Common Share
Total stockholders' equity $ 160,283 $ 185,594 $ 192,638
Less: Preferred share liquidation
preference (66,025) (64,579) (60,434)
----------- ----------- -----------
Stockholders' equity attributable
to common shares 94,258 121,015 132,204
Less: Intangible assets (14,054) (15,337) (19,222)
----------- ----------- -----------
Tangible common equity $ 80,204 $ 105,678 $ 112,982
=========== =========== ===========
Number of common shares outstanding
and to be issued 53,529,950 53,694,478 52,952,703
Book value per common share $ 1.76 $ 2.25 $ 2.50
Tangible book value per common
share $ 1.50 $ 1.97 $ 2.13
Total Stockholders' equity $ 160,283 $ 185,594 $ 192,638
Less: Intangible assets (14,054) (15,337) (19,222)
----------- ----------- -----------
Tangible common equity (after
giving effect to conversion of
preferred stock) $ 146,229 $ 170,257 $ 173,416
=========== =========== ===========
Number of shares of preferred stock
outstanding 66,025 64,579 60,434
Number of shares of common stock
to be issued upon conversion of
preferred stock 36,680,556 35,877,222 33,574,444
Total number of shares of common
stock outstanding and to be
issued (after giving effect to
conversion of preferred stock) 90,210,506 89,571,700 86,527,147
Tangible book value per common
share (after giving effect to
conversion of preferred stock) $ 1.62 $ 1.90 $ 2.00
Tangible Equity Ratio
December September December
31, 2010 30, 2010 31, 2009
----------- ----------- -----------
(Dollars in thousands,
except per share amounts)
Total stockholders' equity $ 160,283 $ 185,594 $ 192,638
Less: Intangible assets (14,054) (15,337) (19,222)
----------- ----------- -----------
Tangible equity $ 146,229 $ 170,257 $ 173,416
=========== =========== ===========
Total assets $ 1,870,052 $ 1,933,146 $ 2,127,580
Less: Intangible assets (14,054) (15,337) (19,222)
----------- ----------- -----------
Tangible assets $ 1,855,998 $ 1,917,809 $ 2,108,358
=========== =========== ===========
Equity ratio - GAAP (Total
stockholders' equity / total
assets) 8.57% 9.60% 9.05%
Tangible equity ratio (Tangible
equity / tangible assets) 7.88% 8.88% 8.23%
About Guaranty Bancorp
Guaranty Bancorp is a bank holding company that operates 34 branches in
Colorado through a single bank, Guaranty Bank and Trust Company. The bank
provides banking and other financial services including real estate,
construction, commercial and industrial, energy, consumer and agricultural
loans throughout its targeted Colorado markets to consumers and small to
medium-sized businesses, including the owners and employees of those
businesses. The bank also provides trust services, including personal trust
administration, estate settlement, investment management accounts and
self-directed IRAs. More information about Guaranty Bancorp can be found at
www.gbnk.com.
Forward-Looking Statements
This press release contains forward-looking statements, which are included
in accordance with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"could," "expects," "plans," "intends," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue," or the negative of
such terms and other comparable terminology. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the Company's actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: failure to maintain adequate
levels of capital and liquidity to support Company's operations; the effect
of the regulatory written agreement the Company and its bank subsidiary
have entered into and potential future supervisory action against the
Company or its bank subsidiary; general economic and business conditions in
those areas in which the Company operates; demographic changes;
competition; fluctuations in interest rates; continued ability to attract
and employ qualified personnel; ability to receive regulatory approval for
our bank subsidiary to declare dividends to the Company; adequacy of our
allowance for loan losses, changes in credit quality and the effect of
credit quality on our provision for credit losses and allowance for loan
losses; changes in governmental legislation or regulation, including, but
not limited to, any increase in FDIC insurance premiums; changes in
accounting policies and practices; changes in the deferred tax asset
valuation allowance; changes in business strategy or development plans;
changes in the securities markets; changes in consumer spending, borrowing
and savings habits; the availability of capital from private or government
sources; competition for loans and deposits and failure to attract or
retain loans and deposits; changes in the financial performance and/or
condition of our borrowers and the ability of our borrowers to perform
under the terms of their loans and other terms of credit agreements;
political instability, acts of war or terrorism and natural disasters; and
additional "Risk Factors" referenced in the Company's most recent Annual
Report on Form 10-K filed with the Securities and Exchange Commission, as
supplemented from time to time. When relying on forward-looking statements
to make decisions with respect to the Company, investors and others are
cautioned to consider these and other risks and uncertainties. The Company
can give no assurance that any goal or plan or expectation set forth in
forward-looking statements can be achieved and readers are cautioned not to
place undue reliance on such statements, which speak only as of the date
made. The forward-looking statements are made as of the date of this press
release, and the Company does not intend, and assumes no obligation, to
update the forward-looking statements or to update the reasons why actual
results could differ from those projected in the forward-looking
statements.
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
December 31, September 30, December 31,
2010 2010 2009
------------ ------------ ------------
(In thousands)
Assets
Cash and due from banks $ 141,465 $ 109,770 $ 234,483
Securities available for sale,
at fair value 389,530 370,555 221,134
Securities held to maturity 11,927 13,346 9,942
Bank stocks, at cost 17,211 17,230 17,160
------------ ------------ ------------
Total investments 418,668 401,131 248,236
------------ ------------ ------------
Loans, net of unearned discount 1,204,580 1,289,492 1,519,608
Less allowance for loan losses (47,069) (41,898) (51,991)
------------ ------------ ------------
Net loans 1,157,511 1,247,594 1,467,617
------------ ------------ ------------
Loans held for sale 14,200 - 9,862
Premises and equipment, net 57,399 58,044 60,267
Other real estate owned and
foreclosed assets 22,898 45,700 37,192
Other intangible assets, net 14,054 15,337 19,222
Other assets 43,857 55,570 50,701
------------ ------------ ------------
Total assets $ 1,870,052 $ 1,933,146 $ 2,127,580
============ ============ ============
Liabilities and Stockholders'
Equity
Liabilities:
Deposits:
Noninterest-bearing demand $ 374,500 $ 358,447 $ 366,103
Interest-bearing demand 535,078 505,706 523,971
Savings 79,100 76,429 71,816
Time 473,673 571,897 731,400
------------ ------------ ------------
Total deposits 1,462,351 1,512,479 1,693,290
------------ ------------ ------------
Securities sold under agreements
to repurchase and federal funds
purchased 30,113 17,951 22,990
Borrowings 163,239 164,242 164,364
Subordinated debentures 41,239 41,239 41,239
Interest payable and other
liabilities 12,827 11,641 13,059
------------ ------------ ------------
Total liabilities 1,709,769 1,747,552 1,934,942
------------ ------------ ------------
Stockholders' equity:
Preferred stock and Additional
paid-in capital - Preferred
stock 64,818 63,372 59,227
Common stock and Additional
paid-in capital - Common
stock 619,509 619,240 618,408
Shares to be issued for
deferred compensation
obligations 237 237 199
Accumulated deficit (419,562) (396,976) (382,599)
Accumulated other
comprehensive income (loss) (2,220) 2,209 (143)
Treasury Stock (102,499) (102,488) (102,454)
------------ ------------ ------------
Total stockholders' equity 160,283 185,594 192,638
------------ ------------ ------------
Total liabilities and
stockholders' equity $ 1,870,052 $ 1,933,146 $ 2,127,580
============ ============ ============
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
(In thousands, except share and per share data)
Interest income:
Loans, including fees $ 17,217 $ 21,631 $ 76,462 $ 89,625
Investment securities:
Taxable 2,604 1,412 7,701 3,479
Tax-exempt 556 738 2,662 3,033
Dividends 171 155 723 825
Federal funds sold and
other 93 115 389 193
---------- ---------- ---------- ----------
Total interest income 20,641 24,051 87,937 97,155
---------- ---------- ---------- ----------
Interest expense:
Deposits 3,207 5,786 15,602 26,402
Securities sold under
agreement to
repurchase and federal
funds purchased 30 42 132 140
Borrowings 1,323 1,328 5,267 5,284
Subordinated debentures 687 611 2,581 2,556
---------- ---------- ---------- ----------
Total interest
expense 5,247 7,767 23,582 34,382
---------- ---------- ---------- ----------
Net interest income 15,394 16,284 64,355 62,773
Provision for loan losses 19,500 10,005 34,400 51,115
---------- ---------- ---------- ----------
Net interest income,
after provision for
loan losses (4,106) 6,279 29,955 11,658
Noninterest income:
Customer service and
other fees 2,430 2,206 9,241 9,520
Gain (loss) on sale of
securities 216 (1) 313 (2)
Gain on sale of loans - - 1,196 -
Other-than-temporary-
impairment (OTTI) of
securities (3,500) - (3,500) -
Other 256 127 852 861
---------- ---------- ---------- ----------
Total noninterest
income (598) 2,332 8,102 10,379
Noninterest expense:
Salaries and employee
benefits 6,456 6,560 26,042 26,547
Occupancy expense 1,783 1,854 7,399 7,609
Furniture and equipment 927 1,060 3,720 4,441
Amortization of
intangible assets 1,283 1,556 5,168 6,278
Other real estate owned,
net 1,209 3,281 14,909 5,898
Insurance and
assessments 1,336 1,612 6,569 6,536
Professional fees 824 963 3,117 3,224
Other general and
administrative 2,611 2,860 8,762 9,872
---------- ---------- ---------- ----------
Total noninterest
expense 16,429 19,746 75,686 70,405
---------- ---------- ---------- ----------
Loss before income
taxes (21,133) (11,135) (37,629) (48,368)
Income tax benefit - (9,250) (6,290) (19,161)
---------- ---------- ---------- ----------
Net loss (21,133) (1,885) (31,339) (29,207)
Preferred stock dividends (1,453) (1,389) (5,624) (1,389)
---------- ---------- ---------- ----------
Net loss applicable to
common stockholders $ (22,586) $ (3,274) $ (36,963) $ (30,596)
========== ========== ========== ==========
Loss per common
share-basic: $ (0.44) $ (0.07) $ (0.72) $ (0.60)
Loss per common
share-diluted: (0.44) (0.07) (0.72) (0.60)
Weighted average common
shares outstanding-basic 51,717,834 51,468,231 51,671,281 51,378,360
Weighted average common
shares outstanding-diluted 51,717,834 51,468,231 51,671,281 51,378,360
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
----------------------------------- -----------------------
QTD Average YTD Average
----------------------------------- -----------------------
December September December December December
31, 2010 30, 2010 31, 2009 31, 2010 31, 2009
---------- ----------- ------------ ----------- -----------
(In thousands)
Assets
Interest
earning assets
Loans, net
of unearned
discount $ 1,259,392 $ 1,351,752 $ 1,578,761 $ 1,379,917 $ 1,686,136
Securities 402,101 345,650 228,608 320,434 164,094
Other earning
assets 141,025 122,658 176,049 153,679 75,887
---------- ----------- ------------ ----------- -----------
Average earning
assets 1,802,518 1,820,060 1,983,418 1,854,030 1,926,117
Other assets 137,995 142,768 133,839 137,992 128,168
---------- ----------- ------------ ----------- -----------
Total average
assets $ 1,940,513 $ 1,962,828 $ 2,117,257 $ 1,992,022 $ 2,054,285
=========== =========== =========== =========== ===========
Liabilities and
Stockholders'
Equity
Average
liabilities:
Average
deposits:
Noninterest-
bearing
deposits $ 374,004 $ 347,288 $ 363,177 $ 356,632 $ 387,597
Interest-
bearing
deposits 1,137,216 1,181,290 1,320,410 1,204,239 1,252,903
---------- ----------- ------------ ----------- -----------
Average
deposits 1,511,220 1,528,578 1,683,587 1,560,871 1,640,500
Other interest-
bearing
liabilities 228,375 223,047 223,835 224,934 223,703
Other
liabilities 14,604 20,543 11,979 15,591 11,671
---------- ----------- ------------ ----------- -----------
Total average
liabilities 1,754,199 1,772,168 1,919,401 1,801,396 1,875,874
Average
stockholders'
equity 186,314 190,660 197,856 190,626 178,411
---------- ----------- ------------ ----------- -----------
Total average
liabilities
and
stockholders'
equity $ 1,940,513 $ 1,962,828 $ 2,117,257 $ 1,992,022 $ 2,054,285
=========== =========== =========== =========== ===========
GUARANTY BANCORP
Unaudited Credit Quality Measures
Quarter Ended
-----------------------------------------------------
December September June March December
31, 2010 30, 2010 30, 2010 31, 2010 31, 2009
--------- --------- --------- --------- ---------
(Dollars in thousands)
Nonaccrual loans and
leases, not
restructured $ 74,304 $ 65,921 $ 64,339 $ 70,500 $ 59,584
Other nonperforming
loans 3,317 4,420 1,065 558 123
--------- --------- --------- --------- ---------
Total
nonperforming
loans $ 77,621 $ 70,341 $ 65,404 $ 71,058 $ 59,707
--------- --------- --------- --------- ---------
Other real estate
owned and
foreclosed assets 22,898 45,700 30,298 30,918 37,192
--------- --------- --------- --------- ---------
Total
nonperforming
assets $ 100,519 $ 116,041 $ 95,702 $ 101,976 $ 96,899
========= ========= ========= ========= =========
Impaired loans $ 77,621 $ 70,341 $ 65,404 $ 71,058 $ 59,707
Allocated allowance
for loan losses (6,659) (3,539) (3,716) (10,802) (6,603)
--------- --------- --------- --------- ---------
Net investment in
impaired loans $ 70,962 $ 66,802 $ 61,688 $ 60,256 $ 53,104
========= ========= ========= ========= =========
Accruing loans
past due 90 days or
more $ 3,317 $ 4,420 $ 1,065 $ 558 $ 123
========= ========= ========= ========= =========
Accruing loans
past due 30-89 days $ 21,555 $ 21,876 $ 33,050 $ 21,956 $ 21,709
========= ========= ========= ========= =========
Charged-off loans $ 14,635 $ 7,953 $ 13,918 $ 4,271 $ 7,618
Recoveries (306) (485) (369) (295) (566)
--------- --------- --------- --------- ---------
Net charge-offs $ 14,329 $ 7,468 $ 13,549 $ 3,976 $ 7,052
========= ========= ========= ========= =========
Provision for loan
loss $ 19,500 $ 2,500 $ 8,400 $ 4,000 $ 10,005
========= ========= ========= ========= =========
Allowance for loan
losses $ 47,069 $ 41,898 $ 46,866 $ 52,015 $ 51,991
========= ========= ========= ========= =========
Allowance for loan
losses to loans,
net of unearned
discount 3.91% 3.25% 3.41% 3.62% 3.42%
Allowance for loan
losses to
nonaccrual loans 63.35% 63.56% 72.84% 73.78% 87.26%
Allowance for loan
losses to
nonperforming
assets 46.83% 36.11% 48.97% 51.01% 53.65%
Allowance for loan
losses to
nonperforming loans 60.64% 59.56% 71.66% 73.20% 87.08%
Nonperforming assets
to loans, net of
unearned discount,
and other real
estate owned 8.19% 8.69% 6.81% 6.96% 6.22%
Nonperforming assets
to total assets 5.38% 6.00% 4.82% 5.02% 4.55%
Nonaccrual loans to
loans, net of
unearned discount 6.17% 5.11% 4.68% 4.91% 3.92%
Nonperforming loans
to loans, net of
unearned discount 6.44% 5.45% 4.76% 4.95% 3.93%
Annualized net
charge-offs to
average loans 4.51% 2.19% 3.83% 1.08% 1.77%
Contact Information: Contact: Daniel M. Quinn President & Chief Executive Officer Guaranty Bancorp 1331 Seventeenth Street, Suite 300 Denver, CO 80202 303/313-6763 Paul W. Taylor E.V.P., Chief Financial & Operating Officer & Secretary Guaranty Bancorp 1331 Seventeenth Street, Suite 300 Denver, CO 80202 303/293-5563