SOURCE: Guaranty Bancorp

Guaranty Bancorp

July 18, 2012 16:05 ET

Guaranty Bancorp Announces 2012 Second Quarter Financial Results

DENVER, CO--(Marketwire - Jul 18, 2012) - Guaranty Bancorp (NASDAQ: GBNK)

  • Net income improves to $6.2 million in second quarter 2012
  • Full reversal of deferred tax asset valuation allowance
  • Nonaccrual loans declined by 28.2% during the second quarter 2012
  • Previously announced acquisition of Private Capital Management expected to close in third quarter
  • Core deposits increased by $46.0 million, or 4.0%, in the second quarter 2012

Guaranty Bancorp (NASDAQ: GBNK), a Colorado-based, community bank holding company, today reported second quarter 2012 net income of $6.2 million, or $0.06 earnings per basic and diluted common share, compared to net income of $1.4 million in the second quarter 2011. After giving effect to a non-cash adjustment of approximately $1.5 million for paid-in-kind preferred stock dividends, the loss per basic and diluted common share was approximately zero for the second quarter 2011.

The $4.8 million improvement in net income in the second quarter 2012 compared to the same quarter in 2011 is primarily due to the reversal of the remaining deferred tax asset valuation allowance of $5.7 million, a $0.6 million increase in net interest income, a $0.5 million reduction in provision for loan losses, and a $0.6 million increase in noninterest income, partially offset by a $2.8 million impairment loss on bank facilities scheduled to be closed.

Paul W. Taylor, Guaranty Bancorp's President and Chief Executive Officer, stated, "We are pleased with the accomplishments we have made in the second quarter. Excluding the tax benefit and impairment loss, our core operating income would have been $3.0 million. We continued to reduce our nonperforming and classified assets and ended the quarter with a classified asset to capital and allowance ratio of 33.8%, as compared to 35.6% in the prior quarter and 56.3% a year ago. New credit extended and new credit advanced on existing lines was $138.0 million in the second quarter as compared to $116.6 million in the previous quarter. Overall net loan growth in the quarter occurred despite several expected large loan payoffs, and the new loans we have booked continue to add granularity to our portfolio. Our valuable deposit mix also continues to improve with 39.6% of our deposits consisting of noninterest bearing deposits at June 30, 2012, as compared to 35.0% at the end of the prior quarter. In addition, our overall cost of deposits decreased to 0.21% in the second quarter as compared to 0.24% in the previous quarter."

Mr. Taylor continued, "We continue our focus on building a stronger balance sheet and improving income. In addition to our focus on loan and core deposit growth, we moved forward with improving our efficiency. We closed four underperforming branches in the second quarter, and with today's announcement, will close two additional underperforming branch locations later this year. Finally, we are excited to consummate the previously announced acquisition of Private Capital Management, a local investment advisory firm, expected to occur in the third quarter."

For the first six months of 2012, net income improved by $7.2 million to $9.1 million compared to $1.9 million for the same period last year. Earnings per basic and diluted common share improved to $0.09 for the six months ended June 30, 2012 from a loss per basic and diluted common share of $0.02, after giving effect to preferred stock dividends, for the same period last year. The increase in net income for the first six months of 2012 as compared to the same period in 2011 is primarily due to the reversal of the remaining deferred tax asset valuation allowance, discussed below, an increase in net interest income of $1.2 million, a decrease in provision for loan losses of $1.5 million, an increase in noninterest income of $0.4 million, and a decrease in noninterest expense, excluding the impairment of long-lived assets, of $0.9 million. These improvements were partially offset by the impairment of long-lived assets of $2.8 million recognized in June 2012 in connection with the two branch facilities scheduled to be closed later this year.

The Company had a deferred tax asset valuation allowance of $6.6 million at December 31, 2011. During the second quarter 2012, the remaining deferred tax asset valuation allowance of $5.7 million was reversed based on the Company's determination that it is more likely than not that the entire deferred tax asset will be realized.

Key Financial Measures
Income Statement

             
    Three Months Ended     Six Months Ended  
    June 30, 2012     March 31, 2012     June 30, 2011     June 30, 2012     June 30, 2011  
    (Dollars in thousands, except per share amounts)  
Net income   $ 6,192       2,917     $ 1,409     $ 9,109     $ 1,923  
Net income (loss) to common stockholders     6,192       2,917       (109 )     9,109       (1,081 )
Earnings (loss) per common share   $ 0.06     $ 0.03     $ (0.00 )   $ 0.09     $ (0.02 )
Return on average assets     1.46 %     0.70 %     0.32 %     1.09 %     0.22 %
Net interest margin     3.86 %     3.93 %     3.56 %     3.90 %     3.49 %
Efficiency ratio     76.55 %     74.57 %     79.88 %     75.56 %     80.10 %
                                         

Balance Sheet

                               
    June 30, 2012     December 31, 2011     % Change     June 30, 2011     % Change  
    (Dollars in thousands, except per share amounts)  
Cash and cash equivalents   $ 107,133     $ 109,225     (1.9 )%   $ 134,896     (20.6 )%
Time deposits with banks     35,000       -     100.0 %     -     100.0 %
Total investments     398,151       386,141     3.1 %     408,806     (2.6 )%
Total loans, net of unearned discount     1,110,161       1,098,140     1.1 %     1,091,132     1.7 %
Loans held for sale     -       -     0.0 %     14,200     (100.0 )%
Allowance for loan losses     (29,307 )     (34,661 )   (15.4 )%     (38,855 )   (24.6 )%
Total assets     1,750,539       1,689,668     3.6 %     1,747,060     0.2 %
Average earning assets, quarter-to-date     1,602,777       1,575,193     1.8 %     1,663,451     (3.6 )%
Total deposits     1,378,937       1,313,786     5.0 %     1,346,183     2.4 %
Book value per common share     1.70       1.62     4.9 %     1.81     (6.1 )%
Tangible book value per common share     1.62       1.53     5.9 %     1.59     1.9 %
Equity ratio - GAAP     10.29 %     10.12 %   1.7 %     9.49 %   8.4 %
Tangible common equity ratio     9.85 %     9.59 %   2.8 %     4.88 %   101.9 %
Total risk-based capital ratio     16.50 %     16.33 %   1.0 %     16.22 %   1.7 %
                                     

Net Interest Income and Margin

    Three Months Ended     Six Months Ended  
    June 30, 2012     March 31, 2012     June 30, 2011     June 30, 2012     June 30, 2011  
    (Dollars in thousands)  
                               
Net interest income   $ 15,383     $ 15,300     $ 14,747     $ 30,683     $ 29,457  
Interest rate spread     3.53 %     3.62 %     3.18 %     3.57 %     3.11 %
Net interest margin     3.86 %     3.93 %     3.56 %     3.90 %     3.49 %
Net interest margin, fully tax equivalent     3.95 %     4.03 %     3.62 %     3.99 %     3.55 %
Average cost of deposits, including noninterest bearing deposits     0.21 %     0.24 %     0.55 %     0.22 %     0.64 %
                                         

Second quarter 2012 net interest income increased by $0.1 million to $15.4 million from $15.3 million for first quarter 2012, and increased $0.6 million as compared to $14.7 million for second quarter 2011. Although the net interest income increased in the second quarter 2012, the Company's net interest margin of 3.86% reflected a decrease of seven basis points as compared to the first quarter 2012, mostly due to an increase in low-yielding overnight funding due to our growth in noninterest bearing deposits. The Company's net interest margin improved 30 basis points in the second quarter 2012 when compared to the same quarter in the prior year due to favorable improvement in our asset mix.

On a linked quarter basis, second quarter 2012 interest income remained relatively flat while interest expense decreased by $0.1 million. The decline in interest expense was primarily due to a decline in average time deposits of $10.1 million, as well as a reduction in the overall cost of deposits. This resulted in an average cost of deposits for the second quarter 2012 of 21 basis points as compared to 24 basis points for the first quarter 2012.

Second quarter 2012 interest income and interest expense decreased $1.0 million and $1.6 million, respectively, as compared to the second quarter 2011. The decline in interest income was primarily due to declines in average yields on loans and investments due to declines in longer-term, fixed rates in the market over the last twelve months and a decline in average loan balances of $6.8 million. The decline in interest expense was primarily due to a $156.1 million decline in average time deposits, mostly higher-cost, brokered time deposits. At June 30, 2012 the Company has one remaining brokered deposit of $0.1 million.

Net interest income increased $1.2 million, or 4.2%, for the first six months of 2012 to $30.7 million from $29.5 million for the same period in 2011. The Company's net interest margin improved 41 basis points to 3.90% for the first six months in 2012 from 3.49% for the first six months in 2011. During the first six months in 2012, interest income decreased $2.6 million primarily due to declines in average interest-earning assets of $118.8 million while the average yield remained relatively flat at 4.49% as compared to the same period in 2011. Interest expense decreased $3.8 million, or 44.8%, in the first six months of 2012 as compared to the same period in 2011 primarily due to a decline in average time deposit balances of $202.9 million, mostly due to the maturity of higher-cost, brokered and internet time deposits and a decline in average borrowings of $53.1 million, primarily due to the September 2011 prepayment of several Federal Home Loan Bank notes.

Noninterest Income

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

           
    Three Months Ended     Six Months Ended
    June 30, 2012   March 31, 2012   June 30, 2011     June 30, 2012   June 30, 2011
    (In thousands)
Noninterest income:                                
  Customer service and other fees   $ 2,382   $ 2,271   $ 2,386     $ 4,653   $ 4,700
  Gain (loss) on sale of securities     342     622     (312 )     964     402
  Other     187     206     262       393     514
  Total noninterest income   $ 2,911   $ 3,099   $ 2,336     $ 6,010   $ 5,616
       

On a linked quarter basis, noninterest income decreased $0.2 million in the second quarter 2012 primarily due to decrease in net gains on sales of securities of $0.3 million, partially offset by an increase in customer services charges of $0.1 million.

Noninterest income increased $0.6 million to $2.9 million in the second quarter 2012, as compared to $2.3 million in the second quarter 2011 primarily due to a net increase in the gain on sales of securities.

For the first six months in 2012, noninterest income increased $0.4 million to $6.0 million as compared to $5.6 million during the same period in the prior year. This increase is primarily due to the increase in the net gains on sales of securities of $0.6 million, partially offset by the slight declines in customer service charges and other fee income.

The impact of our previously announced acquisition of Private Capital Management will be reflected in noninterest income through the generation of investment advisory fees, which is anticipated to begin in the third quarter 2012.

Noninterest Expense

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

         
    Three Months Ended   Six Months Ended
    June 30, 2012   March 31, 2012   June 30, 2011   June 30, 2012   June 30, 2011
    (In thousands)
Noninterest expense:                              
  Salaries and employee benefits   $ 6,614   $ 6,857   $ 6,320   $ 13,471   $ 12,935
  Occupancy expense     1,972     2,019     1,792     3,991     3,675
  Furniture and equipment     783     821     913     1,604     1,807
  Amortization of intangible assets     761     762     1,028     1,523     2,056
  Other real estate owned     461     352     466     813     1,229
  Insurance and assessment     881     808     966     1,689     2,191
  Professional fees     856     628     914     1,484     1,822
  Impairment of long lived assets     2,750     -     -     2,750     -
  Other general and administrative     2,438     2,235     2,275     4,673     4,435
  Total noninterest expense   $ 17,516   $ 14,482   $ 14,674   $ 31,998   $ 30,150
                               

Noninterest expense increased $3.0 million to $17.5 million in the second quarter 2012 as compared to $14.5 million in the first quarter 2012. The increase is primarily due to a $2.8 million impairment on building premises related to the Company's decision to close two underperforming branches. This decision reflects the Company's ongoing efforts to accelerate performance by deploying assets in areas of greater opportunity. Other increases in noninterest expense include professional fees, which increased $0.2 million, related to problem assets and our previously announced acquisition of Private Capital Management, and other general and administrative expense of $0.2 million, related to marketing and business development expenses. The increase in noninterest expense is partially offset by reductions in salaries and benefit expense of $0.2 million.

As compared to the second quarter in 2011, noninterest expense increased $2.8 million as a result of the impairment of assets discussed in the previous paragraph. In addition to this impairment, several other noninterest expense categories had offsetting variances.

Noninterest expense increased $1.8 million to $32.0 million for the first six months in 2012 as compared to $30.2 million for the same period in 2011. This increase is primarily related to the $2.8 million impairment described above. Other increases in noninterest expenses are related to salary and benefits of $0.5 million primarily due to annual salary increases; occupancy expense of $0.3 million mostly due to charges associated with branch closures in June 2012; and general and administrative expense of $0.2 million mostly related to advertising and business development expense. Partially offsetting these increases in noninterest expense were decreases in furniture and equipment expense of $0.2 million mostly related to lower depreciation; intangible amortization of $0.5 million; write-downs and net operating costs related to other real estate owned of $0.4 million; insurance and assessments of $0.5 million related to lower FDIC and other insurance premiums; and professional fees of $0.3 million.

Balance Sheet

                               
    June 30, 2012     December 31, 2011     % Change     June 30, 2011     % Change  
    (Dollars in thousands)  
Total assets   $ 1,750,539     $ 1,689,668     3.6 %   $ 1,747,060     0.2 %
Average assets, quarter-to-date     1,706,862       1,682,168     1.5 %     1,767,540     (3.4 )%
Total loans, net of unearned discount     1,110,161       1,098,140     1.1 %     1,091,132     1.7 %
Total deposits     1,378,937       1,313,786     5.0 %     1,346,183     2.4 %
Equity ratio - GAAP     10.29 %     10.12 %   1.7 %     9.49 %   8.4 %
Tangible common equity ratio     9.85 %     9.59 %   2.8 %     4.88 %   101.9 %
                                     

At June 30, 2012, the Company had total assets of $1.8 billion, which represented a $60.9 million increase as compared to December 31, 2011 and a $3.5 million increase as compared to June 30, 2011. The increase in assets from December 31, 2011 consists primarily of a $12.0 million increase in loans, net of unearned discount and a $47.0 million increase in investments. As compared to June 30, 2011, the increase in total assets is primarily due to an increase in loans, net of unearned discount of $19.0 million and an increase in investments of $24.0 million. These increases are partially offset by a decrease in cash and overnight funds of $27.8 million and a decrease in loans held for sale of $14.2 million.

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

                         
    June 30, 2012     March 31, 2012     December 31, 2011     June 30, 2011  
    (In thousands)  
Loans on real estate:                                
  Residential and Commercial   $ 746,965     $ 756,409     $ 731,107     $ 675,283  
  Construction     46,413       47,468       44,087       45,421  
  Equity lines of credit     44,830       44,745       44,601       48,129  
Commercial loans     216,974       208,995       223,479       258,990  
Agricultural loans     10,712       10,417       11,527       14,193  
Lease financing     2,269       2,269       2,269       3,143  
Installment loans to individuals     20,146       20,461       22,937       25,912  
Overdrafts     218       179       254       869  
SBA and other     23,419       20,751       19,706       20,736  
      1,111,946       1,111,694       1,099,967       1,092,676  
Unearned discount     (1,785 )     (1,797 )     (1,827 )     (1,544 )
Loans, net of unearned discount   $ 1,110,161     $ 1,109,897     $ 1,098,140     $ 1,091,132  
                                 

The $12.0 million growth in total loans, net of unearned discount in the first six months in 2012 as compared to December 31, 2011 was primarily related to increases in real estate loans of $18.4 million, partially offset by a decline in commercial loans of $6.5 million. At June 30, 2012, our residential and commercial real estate portfolio included 29.1% owner-occupied properties and 7.0% multi-family properties. We have capacity to extend additional credit on residential and commercial real estate loans as evidenced by our regulatory concentration ratios discussed below.

Since June 30, 2011, the ratio of construction, land and land development loans to capital fell by 26 percentage points to 47% at June 30, 2012. During the same period, the ratio of commercial real estate loans to capital rose slightly by eight percentage points to 267%.

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

                 
    June 30, 2012   March 31, 2012   December 31, 2011   June 30, 2011
    (In thousands)
Noninterest-bearing deposits   $ 546,229   $ 468,133   $ 450,451   $ 419,731
Interest-bearing demand and NOW     270,940     285,749     289,987     183,287
Money market     280,767     298,504     277,997     343,920
Savings     97,497     97,033     91,260     86,139
Time     183,504     189,509     204,091     313,106
Total deposits   $ 1,378,937   $ 1,338,928   $ 1,313,786   $ 1,346,183
                         

At June 30, 2012, noninterest-bearing deposits as a percentage of total deposits increased to 39.6% as compared to 34.3% at December 31, 2011 and 31.2% at June 30, 2011.

Non-maturing deposits increased $85.7 million, or 7.7%, in the second quarter 2012 as compared to the fourth quarter 2011 and $162.4 million, or 15.7%, as compared to second quarter 2011. Time deposits decreased $20.6 million as of June 30, 2012 as compared to December 31, 2011 and $129.6 million, as compared to June 30, 2011. Time deposits decreased over the past twelve months primarily as a result of management's efforts to reduce the overall level of higher cost time deposits. Total brokered deposits at June 30, 2012 were $0.1 million as compared to $10.2 million at December 31, 2011 and $80.2 million at June 30, 2011. Brokered deposits represented less than 0.1% of total time deposits at June 30, 2012 as compared to 5.0% at December 31, 2011 and 25.6% at June 30, 2011.

Borrowings were $110.2 million at June 30, 2012 and December 31, 2011 as compared to $163.2 million at June 30, 2011. The Company elected to payoff $51.0 million of FHLB term notes in September 2011. The weighted average rate of these advances was 3.5% with maturity dates that ranged from November 2011 to February 2014. The entire balance of borrowings at each balance sheet date consists of term notes with the FHLB.

Regulatory Capital Ratios

All of the Company's and its subsidiary bank's regulatory capital ratios are above the highest regulatory capital threshold of "well-capitalized" at June 30, 2012. The Company's and its subsidiary bank's actual capital ratios for June 30, 2012 and December 31, 2011 are presented in the table below:

                         
    Ratio at
June 30, 2012
   

Ratio at
December 31, 2011
    Minimum Capital Requirement     Minimum Requirement for "Well Capitalized" Institution  
                         
Total Risk-Based Capital Ratio:                        
  Consolidated   16.50 %   16.33 %   8.00 %   N/A  
  Guaranty Bank and Trust Company   15.67 %   15.59 %   8.00 %   10.00 %
Tier 1 Risk-Based Capital Ratio:                        
  Consolidated   15.24 %   15.06 %   4.00 %   N/A  
  Guaranty Bank and Trust Company   14.41 %   14.32 %   4.00 %   6.00 %
Leverage Ratio:                        
  Consolidated   12.55 %   12.12 %   4.00 %   N/A  
  Guaranty Bank and Trust Company   11.84 %   11.53 %   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, 2012, approximately $11.8 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 0.85% of our consolidated risk-weighted assets. At June 30, 2012, no deferred tax assets were disallowed for purposes of computing consolidated tier 1 risk-based capital.

Asset Quality

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

                               
    June 30, 2012     March 31, 2012     December 31, 2011     September 30, 2011     June 30, 2011  
    (Dollars in thousands)  
                               
Nonaccrual loans and leases   $ 21,291     $ 29,648     $ 26,801     $ 45,790     $ 56,342  
Other nonperforming loans     -       1,301       6       583       1,675  
Total nonperforming loans (NPLs)   $ 21,291     $ 30,949     $ 26,807     $ 46,373     $ 58,017  
Other real estate owned and foreclosed assets     24,640       28,072       29,027       22,008       28,362  
Total nonperforming assets (NPAs)   $ 45,931     $ 59,021     $ 55,834     $ 68,381     $ 86,379  
                                         
Accruing loans past due 90 days or more (1)   $ -     $ 1,301     $ 6     $ 583     $ 1,675  
Accruing loans past due 30-89 days (1)   $ 18,448     $ 10,798     $ 10,805     $ 9,358     $ 4,750  
Allowance for loan losses   $ 29,307     $ 30,075     $ 34,661     $ 35,852     $ 38,855  
Selected ratios:                                        
NPLs to loans, net of unearned discount     1.92 %     2.79 %     2.44 %     4.21 %     5.25 %
NPAs to total assets     2.62 %     3.44 %     3.30 %     4.04 %     4.94 %
Allowance for loan losses to NPAs (2)     63.81 %     50.96 %     62.08 %     66.17 %     53.83 %
Allowance for loan losses to NPLs (2)     137.65 %     97.17 %     129.30 %     111.43 %     88.67 %
Allowance for loan losses to loans (2)     2.64 %     2.71 %     3.16 %     3.29 %     3.56 %
Loans 30-89 days past due to loans, net of unearned discount     1.66 %     0.97 %     0.98 %     0.85 %     0.43 %
                                         
(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.  
(2) Excludes loans held for sale.  
   

The following tables summarize our past due loans by class (including loans held for sale) as of the dates indicated:

                     
June 30, 2012   30-89 Days Past Due   90 days +Past Due and Still Accruing   Non-Accrual Loans   Total Past Due   Total Loans
     
    (In thousands)
Commercial and residential real estate   $ 16,779   $ -   $ 15,021   $ 31,800   $ 745,764
Construction loans     -     -     114     114     46,339
Commercial loans     1,596     -     2,759     4,355     216,626
Consumer loans     73     -     1,578     1,651     65,090
Other     -     -     1,819     1,819     36,342
Total   $ 18,448   $ -   $ 21,291   $ 39,739   $ 1,110,161
                               
                               
March 31, 2012   30-89 Days Past Due   90 days +Past Due and Still Accruing   Non-Accrual Loans   Total Past Due   Total Loans
     
    (In thousands)
Commercial and residential real estate   $ 8,699   $ 862   $ 14,790   $ 24,351   $ 755,187
Construction loans     -     -     114     114     47,391
Commercial loans     1,831     -     11,353     13,184     208,657
Consumer loans     268     439     1,713     2,420     65,279
Other     -     -     1,678     1,678     33,383
Total   $ 10,798   $ 1,301   $ 29,648   $ 41,747   $ 1,109,897
                               

During the second quarter 2012, nonaccrual loans decreased $8.4 million primarily due to the payoff of a single natural gas energy loan. At June 30, 2012, total classified loans declined $0.2 million and loans classified as special mention and watch loans declined $25.1 million on a linked quarter basis. At June 30, 2012, our classified assets as a percentage of capital and allowance for loan losses decreased to 33.8% as compared to 35.6% at March 31, 2012 and 36.6% at December 31, 2011. Other real estate owned decreased by $3.4 million during the second quarter 2012 as compared to the first quarter 2012.

Net charge-offs in the second quarter 2012 were $1.3 million as compared to $5.6 million in the first quarter 2012 and $9.0 million in the second quarter 2011.

The general component of the allowance for loan losses decreased from $27.5 million at March 31, 2012 to $27.0 million at June 30, 2012. The general component represented 2.4% of loans, net of unearned discount, at June 30, 2012 as compared to 2.5% of loans, net of unearned discount, at the end of the previous quarter. The coverage ratio, defined as allowance for loan losses divided by nonperforming loans, increased from 97.2% at March 31, 2012 to 137.7% at June 30, 2012.

The Company recorded a provision for loan losses in the second quarter 2012 of $0.5 million, as compared to $1.0 million in the first quarter 2012 and $1.0 million in the second quarter 2011. The lower level of provision for loan loss over last year reflects the overall improvement in asset quality.

Shares Outstanding

As of June 30, 2012, the Company had 106,215,690 shares of common stock outstanding, consisting of 101,120,690 shares of voting common stock and 5,095,000 shares of non-voting common stock. At June 30, 2012, total common shares outstanding include 2,280,922 shares of unvested stock awards.

Non-GAAP Financial Measures

This press release includes non-GAAP financial measures related to tangible assets, including tangible book value and tangible equity ratio, all of which exclude intangible assets, and net income.

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, 2012     December 31, 2011     June 30, 2011  
    (Dollars in thousands, except per share amounts)  
Tangible Book Value per Common Share                        
  Total stockholders' equity   $ 180,121     $ 171,011     $ 165,734  
  Less: Preferred share liquidation preference     -       -       (69,013 )
  Stockholders' equity attributable to common shares     180,121       171,011       96,721  
  Less: Intangible assets     (8,440 )     (9,963 )     (11,998 )
  Tangible common equity   $ 171,681     $ 161,048     $ 84,723  
  Number of common shares outstanding and to be issued     106,215,690       105,436,623       53,389,052  
                         
  Book value per common share   $ 1.70     $ 1.62     $ 1.81  
  Tangible book value per common share   $ 1.62     $ 1.53     $ 1.59  
                         
                         
Tangible Common Equity Ratio                        
    June 30, 2012     December 31, 2011     June 30, 2011  
    (Dollars in thousands, except per share amounts)  
                         
  Total stockholders' equity   $ 180,121     $ 171,011     $ 165,734  
  Less: Intangible assets     (8,440 )     (9,963 )     (11,998 )
    Convertible Preferred Stock     -       -       (69,013 )
  Tangible common equity   $ 171,681     $ 161,048     $ 84,723  
                           
  Total assets   $ 1,750,539     $ 1,689,668     $ 1,747,060  
  Less: Intangible assets     (8,440 )     (9,963 )     (11,998 )
  Tangible assets   $ 1,742,099     $ 1,679,705     $ 1,735,062  
                           
  Equity ratio - GAAP (total stockholders' equity / total assets)     10.29 %     10.12 %     9.49 %
  Tangible common equity ratio (tangible common equity / tangible assets)     9.85 %     9.59 %     4.88 %
                         

The following non-GAAP table reconciles net income to core net income as of the dates indicated:

               
    June 30, 2012     December 31, 2011   June 30, 2011
    (Dollars in thousands)
Core Operating Income                    
  Net income   $ 6,192     $ 2,917   $ 1,409
  Less: Tax benefit     (5,914 )     -     -
  Net income before tax benefit     278       2,917     1,409
  Less: Impairment of long-lived assets     (2,750 )     -     -
  Core operating income   $ 3,028     $ 2,917   $ 1,409
                     

About Guaranty Bancorp

Guaranty Bancorp is a bank holding company that operates 30 branches in Colorado through a single bank, Guaranty Bank and Trust Company. The Bank provides banking and other financial services including commercial and industrial, real estate, construction, 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 private banking and 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; 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 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 terms of other 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, 2012     December 31, 2011     June 30, 2011  
    (In thousands)  
Assets                        
Cash and due from banks   $ 107,133     $ 109,225     $ 134,896  
                         
Time deposits with banks     35,000       -       -  
                         
Securities available for sale, at fair value     362,039       353,152       375,921  
Securities held to maturity     21,687       18,424       16,277  
Bank stocks, at cost     14,425       14,565       16,608  
      Total investments     398,151       386,141       408,806  
                         
Loans, net of unearned discount     1,110,161       1,098,140       1,091,132  
  Less allowance for loan losses     (29,307 )     (34,661 )     (38,855 )
      Net loans     1,080,854       1,063,479       1,052,277  
                             
Loans held for sale     -       -       14,200  
Premises and equipment, net     47,534       53,851       56,118  
Other real estate owned and foreclosed assets, net     24,640       29,027       28,362  
Other intangible assets, net     8,440       9,963       11,998  
Other assets     48,787       37,982       40,403  
      Total assets   $ 1,750,539     $ 1,689,668     $ 1,747,060  
                         
Liabilities and Stockholders' Equity                        
Liabilities:                        
  Deposits:                        
    Noninterest-bearing demand   $ 546,229     $ 450,451     $ 419,731  
    Interest-bearing demand     551,707       567,984       527,207  
    Savings     97,497       91,260       86,139  
    Time     183,504       204,091       313,106  
      Total deposits     1,378,937       1,313,786       1,346,183  
Securities sold under agreements to repurchase and federal funds purchased     13,028       16,617       17,608  
Borrowings     110,170       110,177       163,211  
Subordinated debentures     41,239       41,239       41,239  
Securities purchased, not yet settled     12,557       20,800       -  
Interest payable and other liabilities     14,487       16,038       13,085  
      Total liabilities     1,570,418       1,518,657       1,581,326  
                         
Stockholders' equity:                        
  Preferred stock and additional paid-in capital - preferred stock     -       -       67,806  
  Common stock and additional paid-in capital -common stock     705,058       704,698       619,855  
  Shares to be issued for deferred compensation obligations     -       -       237  
  Accumulated deficit     (423,907 )     (433,016 )     (420,643 )
  Accumulated other comprehensive income     1,333       1,683       1,038  
  Treasury stock     (102,363 )     (102,354 )     (102,559 )
      Total stockholders' equity     180,121       171,011       165,734  
      Total liabilities and stockholders' equity   $ 1,750,539     $ 1,689,668     $ 1,747,060  
                         
                         
                         
   
GUARANTY BANCORP AND SUBSIDIARIES  
Unaudited Consolidated Statements of Operations  
   
    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
    2012     2011     2012     2011  
    (Dollars in thousands, except share and per share data)  
Interest income:                                
  Loans, including fees   $ 14,511     $ 14,999     $ 28,993     $ 30,533  
  Investment securities:                                
    Taxable     2,366       2,918       4,759       5,983  
    Tax-exempt     618       497       1,235       986  
  Dividends     153       163       311       329  
  Federal funds sold and other     58       86       100       175  
    Total interest income     17,706       18,663       35,398       38,006  
Interest expense:                                
  Deposits     711       1,886       1,488       4,515  
  Securities sold under agreement to repurchase and federal funds purchased     12       17       24       41  
  Borrowings     827       1,303       1,654       2,592  
  Subordinated debentures     773       710       1,549       1,401  
    Total interest expense     2,323       3,916       4,715       8,549  
    Net interest income     15,383       14,747       30,683       29,457  
Provision for loan losses     500       1,000       1,500       3,000  
    Net interest income, after provision for loan losses     14,883       13,747       29,183       26,457  
Noninterest income:                                
  Customer service and other fees     2,382       2,386       4,653       4,700  
  Gain (loss) on sale of securities     342       (312 )     964       402  
  Other     187       262       393       514  
    Total noninterest income     2,911       2,336       6,010       5,616  
Noninterest expense:                                
  Salaries and employee benefits     6,614       6,320       13,471       12,935  
  Occupancy expense     1,972       1,792       3,991       3,675  
  Furniture and equipment     783       913       1,604       1,807  
  Amortization of intangible assets     761       1,028       1,523       2,056  
  Other real estate owned, net     461       466       813       1,229  
  Insurance and assessments     881       966       1,689       2,191  
  Professional fees     856       914       1,484       1,822  
  Impairment of long-lived assets     2,750       -       2,750       -  
  Other general and administrative     2,438       2,275       4,673       4,435  
    Total noninterest expense     17,516       14,674       31,998       30,150  
    Income before income taxes     278       1,409       3,195       1,923  
Income tax expense (benefit)     (5,914 )     -       (5,914 )     -  
    Net Income   $ 6,192     $ 1,409     $ 9,109     $ 1,923  
Net income (loss) applicable to common stockholders   $ 6,192     $ (109 )   $ 9,109     $ (1,081 )
                                 
Earnings (loss) per common share-basic:   $ 0.06     $ 0.00     $ 0.09     $ (0.02 )
Earnings (loss) per common share-diluted:     0.06       0.00       0.09       (0.02 )
                                 
Weighted average common shares outstanding-basic     103,914,305       51,919,637       103,903,566       51,809,240  
Weighted average common shares outstanding-diluted     104,238,960       51,919,637       104,286,318       51,809,240  
                                 
                                 
                                 
 
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
                 
    QTD Average   YTD Average
    June 30, 2012   December 31, 2011   June 30, 2011   June 30, 2012   June 30, 2011
    (In thousands)
Assets                              
Interest earning assets                              
  Loans, net of unearned discount   $ 1,110,035   $ 1,085,975   $ 1,116,801   $ 1,107,358   $ 1,152,810
  Securities     388,959     364,833     395,199     383,040     406,035
  Other earning assets     103,783     124,385     151,451     93,446     143,841
Average earning assets     1,602,777     1,575,193     1,663,451     1,583,844     1,702,686
Other assets     104,085     106,975     104,089     103,854     115,734
                               
Total average assets   $ 1,706,862   $ 1,682,168   $ 1,767,540   $ 1,687,698   $ 1,818,420
                               
Liabilities and Stockholders' Equity                              
Average liabilities:                              
Average deposits:                              
  Noninterest-bearing deposits   $ 502,209   $ 459,031   $ 408,106   $ 475,571   $ 404,562
  Interest-bearing deposits     847,074     869,758     961,640     855,684     1,014,107
  Average deposits     1,349,283     1,328,789     1,369,746     1,331,255     1,418,669
Other interest-bearing liabilities     175,053     173,848     227,133     174,502     229,225
Other liabilities     6,581     9,691     7,396     7,431     8,369
Total average liabilities     1,530,917     1,512,328     1,604,275     1,513,188     1,656,263
Average stockholders' equity     175,945     169,840     163,265     174,510     162,157
Total average liabilities and stockholders' equity   $ 1,706,862   $ 1,682,168   $ 1,767,540   $ 1,687,698   $ 1,818,420
                               
                               
                               
   
GUARANTY BANCORP
Unaudited Credit Quality Measures
(Includes loans held for sale, except where noted)
 
   
    Quarter Ended  
    June 30, 2012     March 31, 2012     December 31, 2011     September 30, 2011     June 30, 2011  
    (Dollars in thousands)  
Nonaccrual loans and leases   $ 21,291     $ 29,648     $ 26,801     $ 45,790     $ 56,342  
Other nonperforming loans     -       1,301       6       583       1,675  
  Total nonperforming loans   $ 21,291     $ 30,949     $ 26,807     $ 46,373     $ 58,017  
Other real estate owned and foreclosed assets     24,640       28,072       29,027       22,008       28,362  
  Total nonperforming assets   $ 45,931     $ 59,021     $ 55,834     $ 68,381     $ 86,379  
                                         
Total classified assets   $ 77,910     $ 81,130     $ 83,317     $ 95,916     $ 126,098  
                                         
Nonperforming loans   $ 21,291     $ 30,949     $ 26,807     $ 46,373     $ 58,017  
Allocated allowance for loan losses     (2,272 )     (2,572 )     (3,490 )     (4,483 )     (4,177 )
  Net investment in impaired loans   $ 19,019     $ 28,377     $ 23,317     $ 41,890     $ 53,840  
                                           
Accruing loans past due 90 days or more   $ -     $ 1,301     $ 6     $ 583     $ 1,675  
                                         
Accruing loans past due 30-89 days   $ 18,448     $ 10,798     $ 10,805     $ 9,358     $ 4,750  
                                         
Charged-off loans   $ 2,062     $ 6,371     $ 2,603     $ 4,135     $ 9,997  
Recoveries     (794 )     (785 )     (412 )     (132 )     (973 )
  Net charge-offs   $ 1,268     $ 5,586     $ 2,191     $ 4,003     $ 9,024  
                                         
Provision for loan losses   $ 500     $ 1,000     $ 1,000     $ 1,000     $ 1,000  
                                         
Allowance for loan losses   $ 29,307     $ 30,075     $ 34,661     $ 35,852     $ 38,855  
                                         
Allowance for loan losses to loans, net of unearned discount (1)     2.64 %     2.71 %     3.16 %     3.29 %     3.56 %
Allowance for loan losses to nonaccrual loans (1)     137.65 %     101.44 %     129.33 %     113.49 %     92.20 %
Allowance for loan losses to nonperforming assets (1)     63.81 %     50.96 %     62.08 %     66.17 %     53.83 %
Allowance for loan losses to nonperforming loans (1)     137.65 %     97.17 %     129.30 %     111.43 %     88.67 %
Nonperforming assets to loans, net of unearned discount, and other real estate owned     4.05 %     5.19 %     4.95 %     6.08 %     7.62 %
Nonperforming assets to total assets     2.62 %     3.44 %     3.30 %     4.04 %     4.94 %
Nonaccrual loans to loans, net of unearned discount     1.92 %     2.67 %     2.44 %     4.15 %     5.10 %
Nonperforming loans to loans, net of unearned discount     1.92 %     2.79 %     2.44 %     4.21 %     5.25 %
Annualized net charge-offs to average loans     0.46 %     2.03 %     0.80 %     1.44 %     3.24 %
                                         
(1) Excludes loans held for sale  
   
   
   

Contact Information

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


    Christopher G. Treece
    E.V.P., Chief Financial Officer and Secretary
    Guaranty Bancorp
    1331 Seventeenth Street, Suite 345
    Denver, CO 80202
    303/675-1194