SOURCE: Guaranty Bancorp

Guaranty Bancorp

July 21, 2011 16:05 ET

Guaranty Bancorp Announces 2011 Second Quarter Financial Results

DENVER, CO--(Marketwire - Jul 21, 2011) - Guaranty Bancorp (NASDAQ: GBNK)

--  Quarterly net income increased to $1.4 million (excluding non-cash
    preferred stock dividends)
--  All asset quality indicators improved, including a $25.6 million
    decrease in nonperforming assets
--  Non-interest bearing deposits continue to grow and represent 31% of
    total deposits at June 30, 2011
--  Pass-rated loans increased by $7.7 million in the second quarter
--  Strong regulatory risk-based capital ratios further improved during the
    quarter

Guaranty Bancorp (NASDAQ: GBNK) today reported second quarter 2011 net income of $1.4 million before preferred stock dividends compared to a net loss of $4.4 million before preferred stock dividends in the second quarter 2010. After giving effect to the preferred stock dividends, the loss per basic and diluted common share in the second quarter 2011 was approximately zero compared to a loss per basic and diluted common share of $0.11 for the same period in 2010. On a pre-tax basis, the improvement in net income was $8.4 million for the second quarter 2011 as compared to 2010.

Paul W. Taylor, Guaranty Bancorp's President and Chief Executive Officer, stated, "I am proud to announce our best quarter in the past three very difficult years. In addition to quarterly net income of $1.4 million, we improved all of our asset quality measures, further increased our already strong risk-based capital ratios, continued to grow the number of new deposit customers and generated new loan business in the communities we serve. We have very high expectations for the future performance of this organization. Although we are not yet where we want to be with respect to performance, thanks to the hard work by many dedicated employees, we continue to make significant progress toward our goals."

Mr. Taylor continued, "Although our total loans declined during the quarter due to planned reductions in problem loans, this has been our highest quarter of new loan bookings in several years. Specifically, we booked $71.4 million of new loans with over 40 different businesses during the quarter as well as extending $22.8 million of credit on existing loans. Included in these totals are $9.1 million of SBA loans for which we are a preferred lender. Further, our pipeline of potential new loans continues to grow. Finally, as announced yesterday, I am excited to have Michael Hobbs join us on July 27, 2011, as President of our wholly-owned subsidiary, Guaranty Bank and Trust Company. Mr. Hobbs will be a great addition to our team."

For the six-months ended June 30, 2011, net income was $1.9 million before preferred stock dividends compared to a net loss of $6.2 million before preferred stock dividends for the same period in 2010. After giving effect to the preferred stock dividends, the loss per basic and diluted common share for the first six months of 2011 was approximately $0.02 per share compared to a loss per basic and diluted common share of $0.17 for the same period in 2010. The improvement in net income is due mostly to a $9.4 million reduction in provision for loan losses and a $6.4 million reduction in noninterest expense primarily related to other real estate owned. These significant income improvements were partially offset by a $3.3 million decrease in net interest income for the year-to-date period in 2011 as compared to 2010 due mostly to lower earning assets in 2011 as well as a $0.5 million decrease in noninterest income due primarily to a net decrease in gains on the sale of assets.


Key Financial Measures
Income Statement

                              Quarter Ended             Six Months Ended
                     ------------------------------  --------------------
                     June 30,   March 31,  June 30,   June 30,   June 30,
                       2011       2011       2010       2011       2010
                     ---------  ---------  ---------  ---------  --------
Income (loss) before
 income taxes        $   1,409  $     514  $ (6,961)  $   1,923  $(10,033)
Net income (loss)
 before preferred
 stock dividends         1,409        514    (4,354)      1,923    (6,199)
Preferred stock
 dividends               1,518      1,486     1,390       3,004     2,750
Loss per common
 share after giving
 effect to preferred
 stock dividend      $    0.00  $   (0.02) $  (0.11)  $   (0.02) $  (0.17)
Return on average
 assets                   0.32%      0.11%    (0.87)%      0.22%    (0.61)%
Net interest margin       3.56%      3.42%     3.47 %      3.49%     3.48 %



Balance Sheet

                  June 30,   December 31,             June 30,
                    2011         2010      % Change     2010     % Change
                  ---------  ------------  --------   ---------  --------
                          (Dollars in thousands, except per share amounts)
Cash and cash
 equivalents      $ 134,896  $    141,465      (4.6)% $ 184,701     (27.0)%
Total investments   408,806       418,668      (2.4)%   312,293      30.9 %
Total loans, net
 of unearned
 discount         1,091,132     1,204,580      (9.4)% 1,374,208     (20.6)%
Loans held for
 sale                14,200        14,200       0.0 %     1,150   1,134.8 %
Allowance for
 loan losses        (38,855)      (47,069)    (17.5)%   (46,866)    (17.1)%
Total assets      1,747,060     1,870,052      (6.6)% 1,983,798     (11.9)%
Average assets,
 quarter-to-date  1,767,540     1,940,513      (8.9)% 1,999,527     (11.6)%
Total deposits    1,346,183     1,462,351      (7.9)% 1,544,271     (12.8)%
Book value per
 common share          1.81          1.76       2.8 %      2.38     (23.9)%
Tangible book
 value per common
 share                 1.59          1.50       6.0 %      2.06     (22.8)%
Tangible book
 value per common
 share
  (after giving
  effect to
  conversion of
  preferred
  stock)               1.68          1.62       3.7 %      1.96     (14.3)%
Book value of
 preferred stock     67,806        64,818       4.6 %    61,961       9.4 %
Liquidation value
 of preferred
 stock               69,013        66,025       4.5 %    63,168       9.3 %
Equity ratio -
 GAAP                  9.49%         8.57%     10.7 %      9.53%     (0.4)%
Tangible equity
 ratio                 8.86%         7.88%     12.4 %      8.76%      1.1 %
Total risk-based
 capital ratio        16.22%        14.99%      8.2 %     14.80%      9.6 %



Net Interest Income and Margin

                              Quarter Ended             Six Months Ended
                    --------------------------------  --------------------
                    June 30,   March 31,   June 30,   June 30,   June 30,
                      2011        2011       2010       2011       2010
                    ---------  ----------  ---------  ---------  ---------
                                    (Dollars in thousands)

Net interest income $  14,747  $   14,710  $  16,133  $  29,457  $  32,765
Interest rate
 spread                  3.18%       3.05%      3.09%      3.11%      3.10%
Net interest margin      3.56%       3.42%      3.47%      3.49%      3.48%
Net interest
 margin, fully tax
 equivalent              3.62%       3.49%      3.55%      3.55%      3.56%


Second quarter 2011 net interest income of $14.7 million remained level compared to the first quarter 2011, and decreased by $1.4 million from the second quarter 2010. The Company's net interest margin of 3.56% for the second quarter 2011 reflected an increase of 14 basis points from the first quarter 2011 and an increase of 9 basis points from the second quarter 2010.

Although net interest income remained relatively flat for the second quarter 2011 compared to the first quarter 2011, interest income decreased $0.7 million, offset by a $0.7 million decline in interest expense. The $0.7 million decrease in interest income in the second quarter 2011 as compared to the first quarter 2011 is primarily attributable to a $0.5 million decrease in interest income on loans as a result of a $72.4 million reduction in average balances quarter over quarter. The remaining decrease in interest income is a result of a reduction in our average security holdings during the quarter. Offsetting the decrease in interest income was a $0.7 million decline in interest expense. Specifically, time deposit interest expense decreased by $0.7 million due to a $104.3 million decrease in average time deposits, mostly higher cost, brokered time deposits. The Company anticipates further reductions in time deposit interest through the remainder of 2011 as a result of scheduled maturities of brokered deposits of $69.3 million with a weighted average cost of 3.43%, including $40.1 million in the early third quarter 2011.

Net interest income decreased by $1.4 million in the second quarter 2011, as compared to the same quarter in 2010, due primarily to an unfavorable $2.0 million volume variance, partially offset by a $0.6 million favorable rate variance. The unfavorable volume variance for the second quarter 2011 as compared to the same quarter in 2010 is due mostly to the $302.0 million decrease in average loan balances, offset by a $98.6 million increase in the average balance of all other earning assets, particularly taxable investments, and a $305.0 million decrease in average time deposits. The favorable rate variance for the second quarter 2011 as compared to the same quarter in 2010 is primarily due to a 52 basis point decrease in the cost of deposits partially offset by a 24 basis point decrease in the yield on earning assets. Overall net interest margin improved by nine basis points to 3.56% in the second quarter 2011 as compared to 3.47% in the same quarter in 2010.

Net interest income for the first six months of 2011 decreased by $3.3 million from $32.8 million for the six months ended June 2010 to $29.5 million for the six months ended June 2011. The $3.3 million decline consists of a $3.5 million unfavorable volume variance, partially offset by a $0.2 million favorable rate variance. The unfavorable volume variance for the first six months of 2011 as compared to the same period in 2010 is due mostly to a $302.7 million decline in average loan balances partially offset by a $107.9 million increase in the average balance of all other earning assets and a $283.2 million decrease in time deposits. The $0.2 million favorable rate variance for the first six months of 2011 as compared to the same period in 2010 is due to the one basis point increase in net interest margin.

Noninterest Income

The following table presents noninterest income as of the dates indicated:

                              Quarter Ended             Six Months Ended
                     ------------------------------- ----------------------
                     June 30,   March 31,  June 30,   June 30,   June 30,
                       2011       2011       2010       2011       2010
                     ---------  ---------- --------- ---------- -----------
                                         (In thousands)
Noninterest income:
  Customer service
   and other fees    $   2,386  $    2,314 $    2,254 $    4,700 $    4,468
  Gain (loss) on sale
   of securities          (312)        714          1        402         15
  Gain on sale of
   loans                     -           -      1,196          -      1,196
  Other                    262         252        274        514        468
                     ---------  ---------- ---------- ---------- ----------
  Total noninterest
   income            $   2,336  $    3,280 $    3,725 $    5,616 $    6,147
                     =========  ========== ========== ========== ==========


The $0.9 million decrease in noninterest income in the second quarter 2011 as compared to the first quarter 2011 reflects a $1.0 million swing in gain/loss on sale of securities from the $0.7 million gain recognized in the first quarter to the $0.3 million loss recognized in the second quarter. The sale of securities was done primarily to reduce duration within the investment portfolio. During the quarter, the average life of our bond portfolio was reduced by approximately seven months. Excluding the $1.2 million gain on sale of loans recognized in the second quarter 2010, noninterest income remained relatively flat in the second quarter 2011 compared to the same quarter in 2010.

Excluding the $1.2 million gain on sale of loans recognized in June 2010, noninterest income for the six months ended June 30, 2011 increased by $0.7 million compared to the same period in 2010. This increase is the result of a $0.4 million increase in net gains on sale of securities. Additionally, customer service and other fees increased by $0.2 million year over year, primarily as a result of higher overdraft and interchange fee income.

Noninterest Expense

The following table presents noninterest expense as of the dates indicated:

                              Quarter Ended             Six Months Ended
                     -------------------------------- ---------------------
                     June 30,   March 31,  June 30,   June 30,   June 30,
                       2011       2011       2010       2011       2010
                     ---------- ---------- ---------- ---------- ----------
                                         (In thousands)
Noninterest expense:
  Salaries and
   employee benefits $    6,320 $    6,615 $    6,472 $   12,935 $   13,035
  Occupancy expense       1,792      1,883      1,836      3,675      3,726
  Furniture and
   equipment                913        894        967      1,807      1,943
  Amortization of
   intangible assets      1,028      1,028      1,300      2,056      2,600
  Other real estate
   owned                    466        763      3,115      1,229      5,864
  Insurance and
   assessment               966      1,225      1,825      2,191      3,637
  Professional fees         914        908        739      1,822      1,616
  Other general and
   administrative         2,275      2,160      2,165      4,435      4,124
                     ---------- ---------- ---------- ---------- ----------
  Total noninterest
   expense           $   14,674 $   15,476 $   18,419 $   30,150 $   36,545
                     ========== ========== ========== ========== ==========


The $0.8 million decrease in noninterest expense in the second quarter 2011 as compared to the first quarter 2011 is due mostly to a $0.3 million decrease in expenses related to other real estate owned, a decrease of $0.3 million in salaries and employee benefit expenses and a $0.3 million reduction in insurance and assessment expense. The decrease in salaries and employee benefit expenses is due to a $0.2 million decrease in payroll taxes and a decrease in average full-time employees during the quarter. The decrease in other real estate owned expense is primarily due to a reduction in net write-downs on other real estate owned properties resulting from valuation adjustments and sales. The decrease in insurance and assessment expense is a result of the change in the FDIC insurance assessment rules as of April 1, 2011 due to the implementation of new rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. We expect to continue to realize the benefits of reduced insurance assessment throughout the remainder of 2011.

Noninterest expense for the six months ended June 30, 2011 decreased by $6.4 million compared to the same period in 2010 primarily due to a $4.6 million decrease in expenses associated with other real estate owned, a $1.4 million decrease in insurance and assessment expenses and a $0.5 million decrease in amortization of intangible assets. The decrease in other real estate owned expense for the year-to-date period in 2011 as compared to the same period in 2010 is mostly due to a reduction in net write-downs on other real estate owned properties resulting from valuation adjustments and sales. The decrease in insurance and assessment expense for the first six months of 2011 as compared to the same period in 2010 is due primarily to a favorable change in our risk classification in the third quarter 2010 as well as the change in the FDIC insurance assessment rules on April 1, 2011 as discussed above.

Preferred Stock Dividend

Effective May 15, 2011, 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

                June 30,   December 31,               June 30,
                  2011         2010      % Change       2010     % Change
              -----------  ------------  --------   -----------  --------
                                 (Dollars in thousands)
Total assets  $ 1,747,060  $  1,870,052      (6.6)% $ 1,983,798     (11.9)%
Average
 assets,
 quarter-to-
 date           1,767,540     1,940,513      (8.9)%   1,999,527     (11.6)%
Loans, net of
 unearned
 discount       1,091,132     1,204,580      (9.4)%   1,374,208     (20.6)%
Total
 deposits       1,346,183     1,462,351      (7.9)%   1,544,271     (12.8)%


Equity ratio
 - GAAP              9.49%         8.57%     10.7 %        9.53%     (0.4)%
Tangible
 equity ratio        8.86%         7.88%     12.4 %        8.76%      1.1 %


At June 30, 2011, the Company had total assets of $1.7 billion, which represented a $123.0 million decline as compared to December 31, 2010 and a $236.7 million decline as compared to June 30, 2010. The decline in assets from December 31, 2010 is primarily due to a $113.4 million decrease in loans, net of unearned discount. The loan decline was due mostly to a $91.7 million decrease in commercial loans and a $19.7 million decrease in real estate loans.

In the second quarter 2011, our classified loans declined by $25.5 million with another decrease of $17.2 million in loans internally classified as special mention or watch. In addition to this $42.7 million decline in classified and watch rated loans, other real estate owned decreased by $5.3 million in the second quarter 2011. These declines were the result of the successful execution of our strategic plan to reduce problem assets by our special assets group.

Pass-rated loans consist of all loans not otherwise adversely classified or included on our internal watch list. As described above, loans that are adversely classified or on our internal watch list decreased by $42.7 million in the second quarter. While total loans declined by $35.0 million in the second quarter 2011, our pass-rated loans increased by $7.7 million during the second quarter. In addition, our pipeline of new loan opportunities continues to grow each month.

The following table sets forth the amounts of our loans outstanding
(excluding loans held for sale) at the dates indicated:

                         June 30,    March 31,   December 31,    June 30,
                           2011         2011         2010          2010
                       -----------  -----------  ------------  -----------
                                         (In thousands)
Loans on real estate:
  Residential and
   commercial          $   675,283  $   659,018  $    680,895  $   754,019
  Construction              45,421       50,539        57,351       83,389
  Equity lines of
   credit                   48,129       49,399        50,289       51,221
Commercial loans           258,990      305,627       350,725      411,605
Agricultural loans          14,193       12,582        14,413       17,968
Lease financing              3,143        3,143         3,143        4,014
Installment loans to
 individuals                25,912       26,942        28,582       31,936
Overdrafts                     869          835           565          668
SBA and other               20,736       19,543        20,443       21,607
                       -----------  -----------  ------------  -----------
                         1,092,676    1,127,628     1,206,406    1,376,427
Unearned discount           (1,544)      (1,545)       (1,826)      (2,219)
                       -----------  -----------  ------------  -----------
Loans, net of unearned
 discount              $ 1,091,132  $ 1,126,083  $  1,204,580  $ 1,374,208
                       ===========  ===========  ============  ===========


Since June 30, 2010, the ratio of construction, land and land development loans to capital has fallen by 28 percentage points to 73% at June 30, 2011. Similarly, the ratio of commercial real estate loans to capital has fallen by 56 percentage points to 259% at June 30, 2011. These ratios are below the regulatory commercial real estate concentration guidelines of 100% for land and construction loans and 300% for all investor real estate loans, respectively.


The following table sets forth the amounts of our deposits outstanding at
the dates indicated:

                           June 30,   March 31,   December 31,   June 30,
                             2011        2011         2010         2010
                          ----------- ----------- ------------- -----------
                                           (In thousands)
Noninterest-bearing
 deposits                 $   419,731 $   419,335 $     374,500 $   338,169
Interest-bearing demand       183,287     184,305       178,042     171,721
Money market                  343,920     357,922       357,036     323,331
Savings                        86,139      84,501        79,100      75,338
Time                          313,106     392,257       473,673     635,712
                          ----------- ----------- ------------- -----------
Total deposits            $ 1,346,183 $ 1,438,320 $   1,462,351 $ 1,544,271
                          =========== =========== ============= ===========


Noninterest-bearing deposits as a percentage of total deposits increased to 31.2% at June 30, 2011, as compared to 25.6% at December 31, 2010 and 21.9% at June 30, 2010.

Non-maturity deposits at June 30, 2011 increased by $44.4 million as compared to December 31, 2010 and increased by $124.5 million as compared to June 30, 2010. The increase in non-maturity deposits is primarily attributable to the continued success of our strategic deposit gathering campaign. In addition to the $44.4 million increase in balances of non-maturity deposits in 2011, the total number of customer accounts increased by over 1% during the same period.

Time deposits continue to decrease primarily as a result of management's efforts to reduce the overall level of higher cost time deposits, particularly brokered and internet deposits. Total brokered deposits at June 30, 2011 were $80.2 million as compared to $179.9 million at December 31, 2010 and $255.5 million at June 30, 2010. Brokered deposits represent 5.9% of total deposits at June 30, 2011 as compared to 12.2% at December 31, 2010 and 16.3% at June 30, 2010. In addition to this $175.3 million decline in brokered deposits over the past twelve months, we also experienced a $70.3 million decline in internet time deposits over the same time period. The remaining decline in time deposits is primarily related to the non-renewal of other higher cost certificates of deposits. Management monitors time deposit maturities and renewals on a daily basis and will raise rates on local time deposits if necessary to grow such deposits.

Borrowings were $163.2 million at June 30, 2011 as compared to $163.2 million at December 31, 2010 and $164.3 million at June 30, 2010. The entire balance of borrowings at each balance sheet date consists 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 June 30, 2011. The Company's and the subsidiary bank's actual capital ratios for June 30, 2011 and December 31, 2010 are presented in the table below:

                                                                Minimum
                                                              Requirement
                         Ratio at    Ratio at      Minimum     for "Well
                         June 30,   December 31,   Capital    Capitalized"
                           2011        2010      Requirement  Institution
                        ---------  ------------  ------------  ------------

Total Risk-Based
 Capital Ratio:
    Consolidated            16.22%        14.99%        8.00%          N/A
    Guaranty Bank and
     Trust Company          15.39%        14.07%        8.00%        10.00%
Tier 1 Risk-Based
 Capital Ratio:
    Consolidated             9.00%         8.57%        4.00%          N/A
    Guaranty Bank and
     Trust Company          14.12%        12.80%        4.00%         6.00%
Leverage Ratio:
    Consolidated             6.71%         6.25%        4.00%          N/A
    Guaranty Bank and
     Trust Company          10.53%         9.33%        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 June 30, 2011, approximately $22.4 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 1.71% of the subsidiary bank's risk-weighted assets. In addition, approximately $1.3 million of deferred tax assets were disallowed for purposes of computing Consolidated Tier 1 capital.

Asset Quality

The following table presents select asset quality data (excluding loans
held for sale) as of the dates indicated:

               June 30,   March 31,  December 31,    September   June 30,
                 2011       2011         2010        30, 2010      2010
               ---------  ---------  ------------  ------------  ---------
                                 (Dollars in thousands)

Nonaccrual
 loans, not
 restructured  $  42,142  $  62,650  $     74,304  $     65,921  $  64,339
Other
 nonperforming
 loans             1,675      1,506         3,317         4,420      1,065
               ---------  ---------  ------------  ------------  ---------

Total
 nonperforming
 loans (NPLs)  $  43,817  $  64,156  $     77,621  $     70,341  $  65,404
Other real
 estate owned
 and
 foreclosed
 assets           28,362     33,611        22,898        45,700     30,298
               ---------  ---------  ------------  ------------  ---------

Total
 nonperforming
 assets (NPAs) $  72,179  $  97,767  $    100,519  $    116,041  $  95,702
               =========  =========  ============  ============  =========

Accruing loans
 past due 90
 days or more
 (1)           $   1,675  $   1,506  $      3,317  $      4,420  $   1,065
               =========  =========  ============  ============  =========

Accruing
 loans past
 due 30-89
 days (1)      $   4,750  $  14,593  $     21,555  $     21,876  $  33,050
               =========  =========  ============  ============  =========

Allowance for
 loan losses   $  38,855  $  46,879  $     47,069  $     41,898  $  46,866
               =========  =========  ============  ============  =========

Selected
 ratios:
NPLs to loans,
 net of
 unearned
 discount           4.02%      5.70%         6.44%         5.45%      4.76%
NPAs to total
 assets             4.13%      5.33%         5.38%         6.00%      4.82%
Allowance for
 loan losses
 to NPAs           53.83%     47.95%        46.83%        36.11%     48.97%
Allowance for
 loan losses
 to NPLs           88.67%     73.07%        60.64%        59.56%     71.66%
Allowance for
 loan losses
 to loans, net
 of unearned
 discount           3.56%      4.16%         3.91%         3.25%      3.41%
Loans 30-89
 days past due
 to loans, net
 of unearned
 discount           0.44%      1.30%         1.79%         1.70%      2.40%

(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 types of nonperforming loans (excluding loans held for sale) as of
June 30, 2011 and March 31, 2011 are as follows:

                  ---------------------------------------------------------
                                    Nonperforming Loans
                  ---------------------------------------------------------
                         June 30, 2011               March 31, 2011
                  ---------------------------- ----------------------------
                    Loan             Related     Loan             Related
                  Balance  Percent  Allowance  Balance  Percent  Allowance
                  -------- -------  ---------- -------- -------  ----------
                                   (Dollars in thousands)
Residential
 Construction,
 Land and Land
 Development      $  6,691    15.3% $    1,104 $  6,722    10.5% $      742
Other Residential
 Loans               5,018    11.5%        730    6,058     9.4%      1,695
Commercial and
 Industrial
 Loans               6,873    15.7%      1,187   19,057    29.7%      3,608
Commercial Real
 Estate             25,215    57.5%      1,156   32,287    50.3%      6,091
Other                   20     0.0%          -       32     0.1%          -
                  -------- -------  ---------- -------- -------  ----------
Total             $ 43,817   100.0% $    4,177 $ 64,156   100.0% $   12,136
                  ======== =======  ========== ======== =======  ==========


During the second quarter 2011, all categories of classified and watch list loans declined by an aggregate of $42.7 million. In particular, during the second quarter 2011 nonaccrual loans decreased by $20.5 million, other classified loans decreased by $5.0 million and loans classified as special mention or watch decreased by $17.2 million. Nonaccrual loans decreased due to the $9.0 million of charge-offs, with the remainder due mostly to loan payoffs, net of new additions.

The types of loans included in the accruing loans past due 30-89 days as
of June 30, 2011 and March 31, 2011 are as follows:

                                        -----------------------------------
                                        Accruing loans past due 30-89 days
                                        -----------------------------------
                                          June 30, 2011     March 31, 2011
                                        ----------------- -----------------
                                          Loan              Loan
                                        Balance  Percent  Balance  Percent
                                        -------- -------  -------- -------
                                              (Dollars in thousands)
Residential Construction, Land and
 Land Development                       $     70     1.5% $  3,302    22.6%
Other Residential Loans                    3,042    64.1%    1,220     8.4%
Commercial and Industrial Loans            1,398    29.4%    5,810    39.8%
Commercial Real Estate                       195     4.1%    1,305     8.9%
Other                                         45     0.9%    2,956    20.3%
                                        -------- -------  -------- -------
Total                                   $  4,750   100.0% $ 14,593   100.0%
                                        ======== =======  ======== =======


Net charge-offs in the second quarter 2011 were $9.0 million as compared to $2.2 million in the first quarter 2011 and $13.5 million in the second quarter 2010. Approximately $7.9 million of the charge-offs in the second quarter were related to three loans, with an outstanding balance of $22.2 million prior to the charge-offs. Most of the charge-offs in the second quarter were specifically allocated for as of March 31, 2011.

In addition to the $4.2 million of allowance specifically allocated to impaired loans, the Company has partially charged-off $15.8 million related to impaired loans on the balance sheet as of June 30, 2011. These partial charge-offs reduced the specific component of our allowance for loan losses. The general component of the allowance for loan losses remained relatively flat at $34.7 million at June 30, 2011 and March 31, 2011. The general component represented 3.18% of loans, net of unearned discount, at June 30, 2011 as compared to 3.09% of loans, net of unearned discount, at the end of the previous quarter. The consistency in the overall level of the general component of the allowance for loan losses during the second quarter primarily reflects the fact charge-offs as a percentage of gross loans did not change significantly from the overall charge-off percentage over the past two years.

The Company recorded a provision for loan losses in the second quarter 2011 of $1.0 million, as compared to $2.0 million in the first quarter 2011 and $8.4 million in the second quarter 2010. The decrease in the provision for loan losses quarter over quarter reflects the continued shrinkage of our loan portfolio combined with the fact that the majority of charge-offs taken in the second quarter were specifically reserved for as of March 31, 2011. Further, additions to specific reserves requiring additional provision were minimal during the second quarter.

Shares Outstanding

As of June 30, 2011, the Company had 53,232,485 shares of common stock outstanding, including 1,518,625 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 69,013 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, all of 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:

                                    June 30,    December 31,    June 30,
                                      2011          2010          2010
                                  ------------  ------------  ------------
                                  (Dollars in thousands, except per share
                                                  amounts)
Tangible Book Value per Common
 Share
  Total stockholders' equity      $    165,734  $    160,283  $    189,005
  Less: Preferred share
   liquidation preference              (69,013)      (66,025)      (63,168)
                                  ------------  ------------  ------------
  Stockholders' equity
   attributable to common shares        96,721        94,258       125,837
  Less: Intangible assets              (11,998)      (14,054)      (16,622)
                                  ------------  ------------  ------------
  Tangible common equity          $     84,723  $     80,204  $    109,215
                                  ============  ============  ============

  Number of common shares
   outstanding and to be issued     53,389,052    53,529,950    52,913,800

  Book value per common share     $       1.81  $       1.76  $       2.38
  Tangible book value per common
   share                          $       1.59  $       1.50  $       2.06

  Total stockholders' equity      $    165,734  $    160,283  $    189,005
  Less: Intangible assets              (11,998)      (14,054)      (16,622)
                                  ------------  ------------  ------------
  Tangible common equity (after
   giving effect to conversion of
   preferred stock)               $    153,736  $    146,229  $    172,383
                                  ============  ============  ============

  Number of shares of preferred
   stock outstanding                    69,013        66,025        63,168
  Number of shares of common
   stock to be issued upon
   conversion of preferred
   stock                            38,340,556    36,680,556    35,093,333
  Total number of shares of
   common stock outstanding and
   to be issued (after giving
   effect to conversion of
   preferred stock)                 91,729,608    90,210,506    88,007,133

  Tangible book value per
   common share (after giving
   effect to conversion of
   preferred stock)               $       1.68  $       1.62  $       1.96



Tangible Equity Ratio

                                    June 30,    December 31,    June 30,
                                      2011          2010          2010
                                  ------------  ------------  ------------
                                  (Dollars in thousands, except per share
                                                  amounts)

  Total stockholders' equity      $    165,734  $    160,283  $    189,005
  Less: Intangible assets              (11,998)      (14,054)      (16,622)
                                  ------------  ------------  ------------
  Tangible equity                 $    153,736  $    146,229  $    172,383
                                  ============  ============  ============

  Total assets                    $  1,747,060  $  1,870,052  $  1,983,798
  Less: Intangible assets              (11,998)      (14,054)      (16,622)
                                  ------------  ------------  ------------
  Tangible assets                 $  1,735,062  $  1,855,998  $  1,967,176
                                  ============  ============  ============

  Equity ratio - GAAP
  (Total stockholders' equity /
   total assets)                          9.49%         8.57%         9.53%
  Tangible equity ratio
  (Tangible equity / tangible
   assets)                                8.86%         7.88%         8.76%


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


                                 June 30,     December 31,     June 30,
                                   2011           2010           2010
                               -------------  -------------  -------------
                                             (In thousands)
Assets
Cash and due from banks        $     134,896  $     141,465  $     184,507
Federal funds sold                         -              -            194
                               -------------  -------------  -------------
     Cash and cash equivalents       134,896        141,465        184,701
                               -------------  -------------  -------------

Securities available for
 sale, at fair value                 375,921        389,530        281,215
Securities held to maturity           16,277         11,927         13,897
Bank stocks, at cost                  16,608         17,211         17,181
                               -------------  -------------  -------------
     Total investments               408,806        418,668        312,293
                               -------------  -------------  -------------

Loans, net of unearned
 discount                          1,091,132      1,204,580      1,374,208
  Less allowance for loan
   losses                            (38,855)       (47,069)       (46,866)
                               -------------  -------------  -------------
     Net loans                     1,052,277      1,157,511      1,327,342
                               -------------  -------------  -------------

Loans held for sale                   14,200         14,200          1,150
Premises and equipment, net           56,118         57,399         58,799
Other real estate owned and
 foreclosed assets                    28,362         22,898         30,298
Other intangible assets, net          11,998         14,054         16,622
Other assets                          40,403         43,857         52,593
                               -------------  -------------  -------------
     Total assets              $   1,747,060  $   1,870,052  $   1,983,798
                               =============  =============  =============

Liabilities and Stockholders'
 Equity
Liabilities:
  Deposits:
    Noninterest-bearing demand $     419,731  $     374,500  $     338,169
    Interest-bearing demand          527,207        535,078        495,052
    Savings                           86,139         79,100         75,338
    Time                             313,106        473,673        635,712
                               -------------  -------------  -------------
     Total deposits                1,346,183      1,462,351      1,544,271
                               -------------  -------------  -------------
Securities sold under
 agreements to repurchase and
 federal funds purchased              17,608         30,113         17,247
Borrowings                           163,211        163,239        164,276
Subordinated debentures               41,239         41,239         41,239
Interest payable and other
 liabilities                          13,085         12,827         27,760
                               -------------  -------------  -------------
     Total liabilities             1,581,326      1,709,769      1,794,793
                               -------------  -------------  -------------

Stockholders' equity:
  Preferred stock and
   Additional paid-in capital
   - Preferred stock                  67,806         64,818         61,961
  Common stock and Additional
   paid-in capital - Common
   stock                             619,855        619,509        618,996
  Shares to be issued for
   deferred compensation
   obligations                           237            237            237
  Accumulated deficit               (420,643)      (419,562)      (391,548)
  Accumulated other
   comprehensive income (loss)         1,038         (2,220)         1,844
  Treasury Stock                    (102,559)      (102,499)      (102,485)
                               -------------  -------------  -------------
     Total stockholders'
      equity                         165,734        160,283        189,005
                               -------------  -------------  ------------- 
     Total liabilities and
      stockholders' equity     $   1,747,060  $   1,870,052  $   1,983,798
                               =============  =============  =============






                      GUARANTY BANCORP AND SUBSIDIARIES
               Unaudited Consolidated Statements of Operations


                           Three Months Ended         Six Months Ended
                                June 30,                  June 30,
                        ------------------------  ------------------------
                            2011         2010         2011         2010
                        -----------  -----------  -----------  -----------
                         (In thousands, except share and per share data)

Interest income:
  Loans, including fees $    14,999  $    19,449  $    30,533  $    40,233
  Investment
   securities:
    Taxable                   2,918        1,615        5,983        3,131
    Tax-exempt                  497          704          986        1,424
  Dividends                     163          182          329          367
  Federal funds sold
   and other                     86          103          175          219
                        -----------  -----------  -----------  -----------
    Total interest
     income                  18,663       22,053       38,006       45,374
                        -----------  -----------  -----------  -----------
Interest expense:
  Deposits                    1,886        3,994        4,515        8,707
  Securities sold under
   agreement to
   repurchase and
   federal funds
   purchased                     17           33           41           76
  Borrowings                  1,303        1,314        2,592        2,615
  Subordinated
   debentures                   710          579        1,401        1,211
                        -----------  -----------  -----------  -----------
    Total interest
     expense                  3,916        5,920        8,549       12,609
                        -----------  -----------  -----------  -----------
    Net interest income      14,747       16,133       29,457       32,765
Provision for loan
 losses                       1,000        8,400        3,000       12,400
                        -----------  -----------  -----------  -----------
    Net interest
     income, after
     provision for
     loan losses             13,747        7,733       26,457       20,365
Noninterest income:
  Customer service and
   other fees                 2,386        2,254        4,700        4,468
  Gain (loss) on sale
   of securities               (312)           1          402           15
  Gain on sale of loans           -        1,196            -        1,196
  Other                         262          274          514          468
                        -----------  -----------  -----------  -----------
    Total noninterest
     income                   2,336        3,725        5,616        6,147
Noninterest expense:
  Salaries and employee
   benefits                   6,320        6,472       12,935       13,035
  Occupancy expense           1,792        1,836        3,675        3,726
  Furniture and
   equipment                    913          967        1,807        1,943
  Amortization of
   intangible assets          1,028        1,300        2,056        2,600
  Other real estate
   owned, net                   466        3,115        1,229        5,864
  Insurance and
   assessments                  966        1,825        2,191        3,637
  Professional fees             914          739        1,822        1,616
  Other general and
   administrative             2,275        2,165        4,435        4,124
                        -----------  -----------  -----------  -----------
    Total noninterest
     expense                 14,674       18,419       30,150       36,545
                        -----------  -----------  -----------  -----------
    Income (loss)
     before income
     taxes                    1,409       (6,961)       1,923      (10,033)
Income tax benefit                -       (2,607)           -       (3,834)
                        -----------  -----------  -----------  -----------
    Net Income (loss)         1,409       (4,354)       1,923       (6,199)
Preferred stock
 dividends                   (1,518)      (1,390)      (3,004)      (2,750)
                        -----------  -----------  -----------  -----------
Net loss applicable to
 common stockholders    $      (109) $    (5,744) $    (1,081) $    (8,949)
                        ===========  ===========  ===========  ===========

Loss per common
 share-basic:           $      0.00  $     (0.11) $     (0.02) $     (0.17)
Loss per common
 share-diluted:                0.00        (0.11)       (0.02)       (0.17)

Weighted average
 common shares
 outstanding-basic       51,919,637   51,660,603   51,809,240   51,633,972

Weighted average
 common shares
 outstanding-diluted     51,919,637   51,660,603   51,809,240   51,633,972






                     GUARANTY BANCORP AND SUBSIDIARIES
              Unaudited Consolidated Average Balance Sheets


                            QTD Average                   YTD Average
                ----------------------------------- -----------------------
                 June 30,   December 31, June 30,    June 30,    June 30,
                   2011         2010       2010        2011        2010
                ----------- ----------- ----------- ----------- -----------
                                      (In thousands)
Assets
Interest
 earning assets
  Loans, net of
   unearned
   discount     $ 1,116,801 $ 1,259,392 $ 1,418,768 $ 1,152,810 $ 1,455,494
  Securities        395,199     402,101     286,469     406,035     266,107
  Other earning
   assets           151,451     141,025     161,611     143,841     175,878
                ----------- ----------- ----------- ----------- -----------
Average earning
 assets           1,663,451   1,802,518   1,866,848   1,702,686   1,897,479
Other assets        104,089     137,995     132,679     115,734     135,563
                ----------- ----------- ----------- ----------- -----------

Total average
 assets         $ 1,767,540 $ 1,940,513 $ 1,999,527 $ 1,818,420 $ 2,033,042
                =========== =========== =========== =========== ===========

Liabilities and
 Stockholders'
 Equity
Average
 liabilities:
Average
 deposits:
  Noninterest-
   bearing
   deposits     $   408,106 $   374,004 $   352,171 $   404,562 $   352,551
  Interest-
   bearing
   deposits         961,640   1,137,216   1,218,176   1,014,107   1,249,972
                ----------- ----------- ----------- ----------- -----------
  Average
   deposits       1,369,746   1,511,220   1,570,347   1,418,669   1,602,523
Other
 interest-bearing
 liabilities        227,133     232,459     226,212     229,225     226,592
Other
 liabilities          7,396      10,520      11,268       8,369      11,126
                ----------- ----------- ----------- ----------- -----------
Total average
 liabilities      1,604,275   1,754,199   1,807,827   1,656,263   1,840,241
Average
 stockholders'
 equity             163,265     186,314     191,700     162,157     192,801
                ----------- ----------- ----------- ----------- -----------
Total average
 liabilities
 and
 stockholders'
 equity         $ 1,767,540 $ 1,940,513 $ 1,999,527 $ 1,818,420 $ 2,033,042
                =========== =========== =========== =========== ===========






                             GUARANTY BANCORP
                     Unaudited Credit Quality Measures


                                        Quarter Ended
                     -----------------------------------------------------
                                           December   September
                     June 30,   March 31,     31,        30,     June 30,
                       2011       2011       2010       2010       2010
                     ---------  ---------  ---------  ---------  ---------
                                     (Dollars in thousands)
Nonaccrual loans
 and leases, not
 restructured        $  42,142  $  62,650  $  74,304  $  65,921  $  64,339
Other nonperforming
 loans                   1,675      1,506      3,317      4,420      1,065
                     ---------  ---------  ---------  ---------  ---------
  Total
   nonperforming
   loans             $  43,817  $  64,156  $  77,621  $  70,341  $  65,404
                     ---------  ---------  ---------  ---------  ---------
Other real estate
 owned and
 foreclosed
 assets                 28,362     33,611     22,898     45,700     30,298
                     ---------  ---------  ---------  ---------  ---------
  Total
   nonperforming
   assets            $  72,179  $  97,767  $ 100,519  $ 116,041  $  95,702
                     =========  =========  =========  =========  =========


Impaired loans       $  43,817  $  64,156  $  77,621  $  70,341  $  65,404
Allocated allowance
 for loan losses        (4,177)   (12,136)    (6,659)    (3,539)    (3,716)
                     ---------  ---------  ---------  ---------  ---------
  Net investment in
   impaired loans    $  39,640  $  52,020  $  70,962  $  66,802  $  61,688
                     =========  =========  =========  =========  =========


Accruing loans
 past due 90 days
 or more             $   1,675  $   1,506  $   3,317  $   4,420  $   1,065
                     =========  =========  =========  =========  =========


Accruing loans
 past due 30-89
 days                $   4,750  $  14,593  $  21,555  $  21,876  $  33,050
                     =========  =========  =========  =========  =========


Charged-off loans    $   9,997  $   2,851  $  14,635  $   7,953  $  13,918
Recoveries                (973)      (661)      (306)      (485)      (369)
                     ---------  ---------  ---------  ---------  ---------
  Net charge-offs    $   9,024  $   2,190  $  14,329  $   7,468  $  13,549
                     =========  =========  =========  =========  =========


Provision for loan
 losses              $   1,000  $   2,000  $  19,500  $   2,500  $   8,400
                     =========  =========  =========  =========  =========


Allowance for loan
 losses              $  38,855  $  46,879  $  47,069  $  41,898  $  46,866
                     =========  =========  =========  =========  =========


Allowance for loan
 losses to loans,
 net of unearned
 discount                 3.56%      4.16%      3.91%      3.25%      3.41%
Allowance for loan
 losses to
 nonaccrual loans        92.20%     74.83%     63.35%     63.56%     72.84%
Allowance for loan
 losses to
 nonperforming
 assets                  53.83%     47.95%     46.83%     36.11%     48.97%
Allowance for loan
 losses to
 nonperforming loans     88.67%     73.07%     60.64%     59.56%     71.66%
Nonperforming assets
 to loans, net of
 unearned discount,
 and other real
 estate owned             6.45%      8.43%      8.19%      8.69%      6.81%
Nonperforming assets
 to total assets          4.13%      5.33%      5.38%      6.00%      4.82%
Nonaccrual loans to
 loans, net of
 unearned discount        3.86%      5.56%      6.17%      5.11%      4.68%
Nonperforming loans
 to loans, net of
 unearned discount        4.02%      5.70%      6.44%      5.45%      4.76%
Annualized net
 charge-offs to
 average loans            3.24%      0.75%      4.51%      2.19%      3.83%

Contact Information

  • Contact Information

    For more information, please contact:

    Paul W. Taylor
    President, Chief Executive, Financial and Operating Officer and Secretary
    Guaranty Bancorp
    1331 Seventeenth Street, Suite 345
    Denver, CO 80202
    303/293-5563