SOURCE: Guaranty Bancorp

Guaranty Bancorp

January 28, 2011 20:05 ET

Guaranty Bancorp Announces 2010 Annual and Fourth Quarter Financial Results

DENVER, CO--(Marketwire - January 28, 2011) - Guaranty Bancorp (NASDAQ: GBNK)

--  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 (NASDAQ: GBNK) today reported a fourth quarter 2010 net loss of $21.1 million, or $0.44 loss per basic and diluted common share including the effect of preferred stock dividends, compared to a fourth quarter 2009 net loss of $1.9 million, or $0.07 loss per basic and diluted common share including the effect of preferred stock dividends.

Dan Quinn, Guaranty Bancorp President and CEO, stated, "We made significant strides in 2010 in reducing the risk profile of the bank, as well as implementing several strategic initiatives, which are expected to improve future performance and revenue generation. Throughout 2010, our classified assets declined by approximately 23% while our watch list loans declined by 63%. At the end of the year, approximately 68% of our classified assets were nonperforming assets, which means that they are in the latter stages of the resolution process. The overall strength of our capital enabled us to aggressively move these nonperforming loans through the collateral disposition process and the pipeline of future problem loans continues to decline as evidenced by a sharp reduction in the dollar amount of loans on our internal watch list. We believe that the charge-offs and reserves taken in 2010 will better enable us to dispose of these nonperforming loans and properties."

Overall financial performance in 2010 was significantly affected by costs associated with reducing the level of our problem assets, including provision for loan losses, legal fees, appraisal costs and write-downs and carrying costs associated with other real estate owned. Some other key items related to our 2010 results include:

--  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