SOURCE: Guaranty Bancorp

Guaranty Bancorp

January 22, 2014 16:10 ET

Guaranty Bancorp Announces 2013 Annual and Fourth Quarter Financial Results

DENVER, CO--(Marketwired - Jan 22, 2014) -  Guaranty Bancorp (NASDAQ: GBNK)

  • Net income increased 31.0% in the fourth quarter 2013 as compared to the same quarter in 2012
  • Net loan growth of $161.7 million, or 14.0% during 2013
  • Core deposit growth of $85.0 million, or 6.7% during 2013
  • Net interest margin improvement to 3.65% during the fourth quarter 2013
  • Improvement in the efficiency ratio to 66.8% in 2013 as compared to 77.1% in 2012

Guaranty Bancorp (NASDAQ: GBNK) ("we", "our" or "the Company"), a community bank holding company based in Colorado, today announced fourth quarter 2013 net income of $4.1 million, or $0.20 earnings per basic common share and $0.19 earnings per diluted common share. Net income for the same quarter in 2012 was $3.1 million, or $0.15 earnings per basic and diluted common share (1). The Company's pre-tax operating earnings (2) in the fourth quarter 2013 were $5.2 million, or $0.25 earnings per basic and diluted common share, an improvement of $1.8 million or $0.08 earnings per basic and diluted common share as compared to the same quarter in 2012.

The $1.8 million increase in pre-tax operating earnings in the fourth quarter 2013 as compared to the same quarter in the prior year was primarily due to a $0.7 million improvement in interest income, attributable to favorable growth in average loan and average investment balances, combined with a $0.5 million decrease in interest expense mostly due to a decline in average other interest-bearing liabilities. Additionally, several categories of noninterest income contributed to the increase in pre-tax operating earnings in the fourth quarter 2013 as compared to the fourth quarter 2012 including a $0.3 million increase in investment management and trust fees, a $0.2 million increase in bank-owned life insurance income ("BOLI") and a $0.2 million increase in deposit service fee income.

"For Guaranty Bancorp, 2013 was a year of growth," said Paul W. Taylor, President and CEO. "Strong net loan growth of 14.0% in 2013 led to sustained increases in net income throughout the year, and the growth we experienced in our Wealth Management group, coupled with gains on the sale of SBA loans, resulted in continued improvement in core noninterest income. We are pleased with the stability of our net interest margin in 2013, and we saw further core deposit growth during the year of $85.0 million or 6.7%. We made significant improvement in our efficiency ratio to 66.8% for 2013 compared to 77.1% in 2012 due to top line income growth and expense control efforts. Our solid performance for the year demonstrates the value businesses and consumers place in a locally based, community bank partner."

For the year ended December 31, 2013, pre-tax operating earnings improved $5.7 million, or 39.2% to $20.2 million as compared to $14.5 million for the same period in the prior year mostly due to a $3.2 million increase in net interest income, a $1.2 million increase in investment management and trust income, a $0.8 million increase in customer service fee income and a $0.5 million increase in gain on sale of Small Business Administration ("SBA") loans. The improvement in net interest income for the year ended December 31, 2013 as compared to the year ended December 31, 2012 was the result of a $1.1 million increase in interest income mostly due to growth in average loan and average investment balances of $127.4 million and $80.3 million, respectively, combined with a $2.1 million decline in interest expense primarily due to a decline in average other interest-bearing liabilities as well as a reduction in the average cost of deposits.

For the year ended December 31, 2013, net income was $14.0 million, or $0.67 earnings per basic and diluted common share compared to net income of $15.1 million, or $0.72 earnings per basic and diluted common share for the same period in 2012. Net income for the year ended December 31, 2012 included a $5.7 million reversal of our remaining deferred tax valuation allowance; a $2.0 million credit provision for loan losses; a $2.5 million gain on sales of securities, partially offset by a $2.8 million impairment on bank facilities. The Company began accruing income tax expense at an effective rate of 31.5% in the third quarter 2012, after the reversal of the remaining deferred tax valuation allowance in the second quarter 2012. The Company's effective income tax rate for the year ended December 31, 2013 was 31.2%. 

(1) Share and per share amounts presented throughout this release, including earnings per share, tangible book value per share and book value per share have been adjusted to reflect the Company's 1-for-5 reverse stock split on May 20, 2013.

(2) " Pre-tax operating earnings" is considered a "non-GAAP" financial measure, which we define as income before income taxes adjusted for (if any) provision (credit) for loan losses, other real estate owned expenses, debt termination expenses, acquisition, reorganization and integration costs, and securities gains and losses. More information regarding this measure and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures in this release.

Key Financial Measures
Income Statement

                                 
    Quarter Ended     Year Ended  
    December       September     December     December     December  
    31, 2013       30, 2013     31, 2012     31, 2013     31, 2012  
    (Dollars in thousands, except per share amounts)  
Net income   $ 4,088     $ 3,851     $ 3,120     $ 14,029     $ 15,059  
Earnings per common share - basic (1)   $ 0.20     $ 0.18     $ 0.15     $ 0.67     $ 0.72  
Return on average assets     0.85 %     0.81 %     0.67 %     0.75 %     0.86 %
Net interest margin     3.65 %     3.63 %     3.48 %     3.62 %     3.67 %
Efficiency ratio (tax equivalent)     63.49 %     65.12 %     88.16 %     66.79 %     77.05 %
                                         
(1) Share and per share amounts have been adjusted to reflect the Company's 1-for-5 reverse stock split on May 20, 2013.  
   
   

Balance Sheet

                               
    December     September     Percent     December     Percent  
    31, 2013     30, 2013     Change     31, 2012     Change  
    (Dollars in thousands, except per share amounts)  
Cash and cash equivalents   $ 28,077     $ 33,465     (16.1) %   $ 163,217     (82.8) %
Total investments     442,300       471,257     (6.1) %     458,927     (3.6) %
Total loans, net of unearned loan fees     1,320,424       1,293,252     2.1 %     1,158,749     14.0 %
Allowance for loan losses     (21,005 )     (20,450 )   2.7 %     (25,142 )   (16.5) %
Total assets     1,911,032       1,896,191     0.8 %     1,886,938     1.3 %
Average earning assets, quarter-to-date     1,781,509       1,753,746     1.6 %     1,740,273     2.4 %
Average assets, quarter-to-date     1,905,524       1,878,081     1.5 %     1,843,212     3.4 %
Total deposits     1,528,457       1,482,515     3.1 %     1,454,756     5.1 %
Book value per common share (1)     8.89       8.80     1.0 %     8.89     - %
Tangible book value per common share (1)     8.58       8.46     1.4 %     8.45     1.5 %
Equity ratio - GAAP     9.91 %     9.93 %   (0.2) %     9.97 %   (0.6) %
Tangible common equity ratio     9.60 %     9.58 %   0.2 %     9.53 %   0.7 %
Total risk-based capital ratio     14.96 %     14.94 %   0.1 %     16.27 %   (8.1) %
                                     
(1) Share and per share amounts have been adjusted to reflect the Company's 1-for-5 reverse stock split on May 20, 2013.  
   
   

Net Interest Income and Margin

                               
    Quarter Ended     Year Ended  
    December     September     December     December     December  
    31, 2013     30, 2013     31, 2012     31, 2013     31, 2012  
    (Dollars in thousands)  
Net interest income   $ 16,391     $ 16,062     $ 15,217     $ 63,570     $ 60,411  
Interest rate spread     3.45 %     3.43 %     3.21 %     3.40 %     3.37 %
Net interest margin     3.65 %     3.63 %     3.48 %     3.62 %     3.67 %
Net interest margin, fully tax equivalent     3.75 %     3.73 %     3.57 %     3.72 %     3.77 %
Average cost of deposits (including noninterest-bearing deposits)     0.16 %     0.17 %     0.19 %     0.17 %     0.21 %
                                         

Fourth quarter 2013 net interest margin improved by two basis points to 3.65% compared to the third quarter 2013 and improved by 17 basis points from 3.48% in the fourth quarter 2012. The improvement in net interest margin in the fourth quarter 2013 as compared to the third quarter 2013 was primarily the result of a decline in the average cost of interest-bearing deposits. The improvement in net interest margin in the fourth quarter 2013 compared to the fourth quarter 2012 was mostly due to a 20 basis point increase in the yield on investments as well as a 19 basis point decrease in the average cost of interest-bearing liabilities. The decrease in the average cost of interest-bearing liabilities was primarily the result of the first quarter 2013 redemption of fixed, high-cost trust preferred securities ("TruPS") and related subordinated debentures combined with a lower average cost of deposits.

Net interest income improved $0.3 million to $16.4 million in the fourth quarter 2013 compared to the third quarter 2013, and increased by $1.2 million compared to the fourth quarter 2012. The increase in net interest income of $0.3 million in the fourth quarter 2013 as compared to the third quarter 2013 was the result of an increase in interest income of $0.3 million primarily as a result of a $34.2 million increase in average loans. The $1.2 million increase in net interest income in the fourth quarter 2013 as compared to the same quarter in 2012 was the result of a $0.7 million increase in interest income and a $0.5 million decline in interest expense. The increase in interest income in the fourth quarter 2013 compared to the same quarter in 2012 was primarily the result of a $172.0 million, or 15.2% increase in average loans, which was partially funded by a $144.3 million decrease in the average balance of low-yielding overnight cash. The decrease in interest expense as compared to the fourth quarter 2012 was primarily the result of the prepayment of $15.0 million in fixed, high-cost TruPS and related subordinated debentures in the first quarter 2013 as well as a six basis point decrease in the average cost of deposits.

Net interest income improved by approximately $3.2 million to $63.6 million for the year ended December 31, 2013 compared to $60.4 million for the year ended December 31, 2012. Interest income increased $1.1 million during 2013 as compared to 2012 primarily due to a $110.8 million increase in average earning assets, partially offset by a 21 basis point decline in average yield. The growth in average earning assets was mostly comprised of a $127.4 million increase in average loans and an $80.3 million increase in average investments, partially offset by a $97.0 million decrease in low-yielding average overnight cash during 2013 as compared to the prior year. The decline in the average yield on earning assets was mostly due to competitive pressure on loan yields. Interest expense declined $2.1 million during 2013 as compared to the prior year primarily due to the prepayment of high-cost TruPS and related subordinated debentures combined with a four basis point decline in average deposit costs.

Noninterest Income

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

                         
    Quarter Ended   Year Ended
    December     September   December   December     December
31, 2013     30, 2013   31, 2012   31, 2013     31, 2012
    (In thousands)
Noninterest income:                                  
  Customer service and other fees   $ 2,313     $ 2,302   $ 2,079   $ 8,916     $ 8,158
  Investment management and trust     831       736     561     2,904       1,751
  Increase in cash surrender value of life insurance     304       305     143     1,018       576
  Gain (loss) on sale of securities     (85 )     20     817     (11 )     2,527
  Gain on sale of SBA loans     95       207     -     725       203
  Other     16       94     166     247       376
  Total noninterest income   $ 3,474     $ 3,664   $ 3,766   $ 13,799     $ 13,591
                                     

Fourth quarter 2013 noninterest income was $3.5 million as compared to third quarter 2013 noninterest income of $3.7 million and fourth quarter 2012 noninterest income of $3.8 million. 

Fourth quarter 2013 noninterest income was $3.5 million, reflecting a $0.2 million decline as compared to the third quarter 2013 mostly due to $0.1 million decreases in both gain on sales of securities and gain on sales of SBA loans. As compared to the fourth quarter 2012, noninterest income decreased $0.3 million during the same period in 2013 primarily due to a $0.9 million decline in gain on sales of securities, partially offset by a $0.2 million increase in customer service income, including treasury management fees, a $0.3 million increase in investment management and trust income and a $0.2 million increase in BOLI income.

For the year ended December 31, 2013, noninterest income increased $0.2 million as compared to the prior year. The increase was primarily the result of a $1.2 million, or 65.8% increase in investment management and trust income, a $0.8 million increase in customer service charge income, a $0.5 million increase in gain on sales of SBA loans, and a $0.4 million increase in BOLI income as compared to the prior year. These increases were partially offset by a $2.5 million decrease in net gains on sales of securities as compared to the year ended December 31, 2012.

During 2013, assets under management increased by $120.3 million, or 35.1%, to $463.0 million as compared to $342.7 million at December 31, 2012. The growth in assets under management was primarily related to the Company's investment management subsidiary, Private Capital Management ("PCM"), acquired in July 2012. Since acquisition, PCM's assets under management have grown by $107.5 million, or 65.2%, primarily due to new customer relationships as well as growth in existing relationships. In addition, PCM has contributed approximately $2.2 million in investment management income since acquisition.

Noninterest Expense

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

                           
    Quarter Ended   Year Ended
    December 31, 2013     September 30, 2013     December 31, 2012   December 31, 2013     December 31, 2012
    (In thousands)
Noninterest expense:                          
  Salaries and employee benefits   $ 7,685     $ 7,242     $ 6,832   $ 29,581     $ 26,769
  Occupancy expense     1,507       1,572       1,550     6,289       7,253
  Furniture and equipment     728       709       760     2,943       3,143
  Amortization of intangible assets     702       703       812     2,818       3,138
  Other real estate owned     (1,037 )     (200 )     3,209     (1,160 )     4,370
  Insurance and assessment     641       629       677     2,519       3,137
  Professional fees     968       886       1,543     3,618       4,089
  Prepayment penalty on long term debt     -       -       -     629       -
  Impairment of long-lived assets     -       -       -     -       2,750
  Other general and administrative     2,487       2,395       2,539     9,451       9,465
  Total noninterest expense   $ 13,681     $ 13,936     $ 17,922   $ 56,688     $ 64,114
                                       

Noninterest expense decreased $0.3 million in the fourth quarter 2013 as compared to the third quarter 2013 and declined by $4.2 million compared to the fourth quarter of 2012.

The $0.3 million decrease in noninterest expense in the fourth quarter 2013 as compared to the third quarter 2013 was primarily the result of a $0.8 million decrease in other real estate owned ("OREO") expenses, partially offset by a $0.4 million increase in salaries and employee benefits. The decrease in OREO expense was mostly due to an increase in net gains on disposition of properties as well as reductions in net operating costs. The increase in salaries and employee benefits expense was primarily due to increases in salary and incentive expense. The $4.2 million decrease in noninterest expense in the fourth quarter 2013 as compared to the same quarter in 2012 was primarily due to a $4.2 million decrease in OREO expenses, mostly related to an increase in net gains on disposition of properties combined with a decline in OREO write-downs, and a $0.6 million decrease in professional fees primarily due to lower legal fees. These declines in noninterest expense were partially offset by a $0.9 million increase in salary and employee benefits expense, mostly due to higher costs associated with self-funded medical insurance, incentives and salary expense as compared to the fourth quarter 2012.

For the year ended December 31, 2013, noninterest expense decreased $7.4 million as compared to the same period in 2012. The largest declines in noninterest expense as compared to the prior year were attributable to a $5.5 million decrease in OREO expenses, mostly due to an increase in net gains on disposition of properties combined with a decline in write-downs on OREO, and the $2.8 million impairment of long-lived assets recorded in 2012. Other noninterest expense decreases included a $1.2 million decrease in occupancy, furniture and equipment expenses, mostly attributable to the closure of several branches in 2012; a $0.6 million decrease in insurance and assessment expense, primarily related to lower FDIC insurance premiums mostly as a result of changes pursuant to the Dodd-Frank Act effective April 1, 2012, as well as an improvement in the Bank's risk rating during the third quarter 2012; a $0.5 million decrease in professional fees expense, mostly related to legal costs and a $0.3 million decrease in the amortization of intangible assets as compared to the prior year. These decreases were partially offset by a $2.8 million increase in salaries and employee benefits primarily due to higher incentive and equity compensation expense as well as higher employee benefit expense related to the self-funded medical insurance plan as compared to the prior year.

Balance Sheet

                               
    December     September     Percent     December     Percent  
    31, 2013     30, 2013     Change     31, 2012     Change  
    (Dollars in thousands)  
Total assets   $ 1,911,032     $ 1,896,191     0.8 %   $ 1,886,938     1.3 %
Average assets, quarter-to-date     1,905,524       1,878,081     1.5 %     1,843,212     3.4 %
Total loans, net of unearned loan fees     1,320,424       1,293,252     2.1 %     1,158,749     14.0 %
Total deposits     1,528,457       1,482,515     3.1 %     1,454,756     5.1 %
                                     
Equity ratio - GAAP     9.91 %     9.93 %   (0.2) %     9.97 %   (0.6) %
Tangible common equity ratio     9.60 %     9.58 %   0.2 %     9.53 %   0.7 %
                                     

At December 31, 2013, the Company had total assets of $1.9 billion, reflecting a $14.8 million increase compared to September 30, 2013 and a $24.1 million increase compared to December 31, 2012. The increase in total assets during the fourth quarter 2013 includes a $27.2 million increase in loans and a $21.9 million increase in securities sold or called, not yet settled, partially offset by a $29.0 million decrease in investments.

As compared to December 31, 2012, total assets reflects an increase in net loans of $161.7 million, or 14.0%, an increase of $16.0 million in securities sold or called, not yet settled and a $15.8 million increase in BOLI as compared to the prior year. These increases were partially offset by a $135.1 million decrease in cash and overnight funding, a $16.6 million decrease in investments, and a $15.1 million decrease in OREO.

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

                   
    December 31,     September 30,     December 31,  
    2013     2013     2012  
    (In thousands)  
Loans held for sale   $ 507     $ -     $ -  
Commercial and residential real estate     856,224       823,442       737,537  
Construction     87,940       82,711       72,842  
Commercial     271,843       280,577       237,199  
Agricultural     10,772       10,453       9,417  
Consumer     60,932       60,876       63,095  
SBA     31,010       32,454       37,207  
Other     2,039       3,471       3,043  
  Total gross loans     1,321,267       1,293,984       1,160,340  
    Unearned loan fees     (843 )     (732 )     (1,591 )
  Loans, net of unearned loan fees   $ 1,320,424     $ 1,293,252     $ 1,158,749  
                           

During the three months ended December 31, 2013, loans, net of unearned fees increased by $27.2 million. The increase in loans during the fourth quarter 2013 was primarily due to a $32.8 million increase in commercial and residential real estate loans consisting mostly of loans to finance the acquisition of single and multi-tenant commercial properties located within our Colorado footprint. Loans held for sale at December 31, 2013 includes two performing SBA loans that we expect to sell during the first quarter 2014.

In 2013, loans, net of unearned fees increased by $161.7 million, or 14.0%. The 2013 net loan growth was primarily comprised of a $118.7 million increase in commercial and residential real estate loans, including a $77.1 million increase in jumbo mortgage loans and a $34.6 million increase in commercial loans. The growth in loans was primarily the result of new customer relationships, utilization of existing lines of credit and declines in loan payoffs.

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

             
    December 31,   September 30,   December 31,
    2013   2013   2012
    (In thousands)
Noninterest bearing deposits   $ 564,326   $ 525,330   $ 564,215
Interest-bearing demand and NOW     346,449     351,380     285,679
Money market     326,008     313,585     312,724
Savings     111,568     108,242     100,704
Time     180,106     183,978     191,434
Total deposits   $ 1,528,457   $ 1,482,515   $ 1,454,756
                   

Non-maturing deposits increased $49.8 million in the fourth quarter 2013 as compared to the third quarter 2013, and increased $85.0 million, or 6.7%, as compared to the fourth quarter 2012. At December 31, 2013, noninterest bearing deposits as a percentage of total deposits was 36.9% as compared to 35.4% at September 30, 2013 and 38.8% at December 31, 2012.

During the fourth quarter 2013, securities sold under agreements to repurchase decreased by $4.9 million compared to September 30, 2013 and decreased by $42.8 million compared to December 31, 2012. The decrease from the prior year end was primarily attributable to a single depositor whose balance was re-deployed into the depositor's operations during the second quarter 2013.

Total Federal Home Loan Bank ("FHLB") borrowings were $130.0 million at December 31, 2013 consisting of $110.0 million of term borrowings and $20.0 million of overnight advances on our line of credit. There was a $32.7 million reduction in FHLB borrowings during the fourth quarter 2013, due to a reduction in overnight advances on our line of credit. Total borrowings at December 31, 2012 consisted of $110.2 million of FHLB term notes.

Regulatory Capital Ratios

The following table provides the capital ratios of the Company and our subsidiary bank, Guaranty Bank and Trust Company ("Bank") as of the dates presented, along with the applicable regulatory capital requirements:

                         
    Ratio at
December 31,
2013
    Ratio at
December 31,
2012
    Minimum
Capital Requirement
    Minimum Requirement for "Well-Capitalized" Institution  
Total Risk-Based Capital Ratio                        
  Consolidated   14.96 %   16.27 %   8.00 %   N/A  
  Guaranty Bank and Trust Company   14.37 %   15.52 %   8.00 %   10.00 %
                         
Tier 1 Risk-Based Capital Ratio                        
  Consolidated   13.71 %   15.02 %   4.00 %   N/A  
  Guaranty Bank and Trust Company   13.12 %   14.26 %   4.00 %   6.00 %
                         
Leverage Ratio                        
  Consolidated   11.49 %   11.93 %   4.00 %   N/A  
  Guaranty Bank and Trust Company   11.00 %   11.35 %   4.00 %   5.00 %
                         

The declines in the consolidated total risk-based capital ratio and Tier 1 risk-based capital ratio between December 31, 2012 and December 31, 2013 were primarily attributable to the early redemption of $15.0 million of the Company's TruPS and related subordinated debentures during the first quarter 2013 combined with loan growth during 2013. The redemption of the TruPS and related subordinated debentures was funded by a dividend from the Bank. All three ratios continue to remain well above the minimum capital requirements for holding companies and well capitalized requirements for banks. In addition, the Company has computed its projected regulatory capital ratios on a pro forma basis under the final rule on Enhanced Regulatory Capital Standards, commonly referred to as Basel III. The Company and the Bank currently exceed the capital requirements set forth in the new rules that become effective in the first quarter 2015.

Asset Quality

The following table presents select asset quality data as of the dates indicated:

                                 
    December     September     June 30,     March 31,       December  
    31, 2013     30, 2013     2013     2013       31, 2012  
    (Dollars in thousands)  
Nonaccrual loans and leases   $ 15,476     $ 18,095     $ 19,430     $ 31,482     $ 13,692  
Accruing loans past due 90 days or more (1)     -       -       84       40       224  
                                         
Total nonperforming loans (NPLs)   $ 15,476     $ 18,095     $ 19,514     $ 31,522     $ 13,916  
Other real estate owned and foreclosed assets     4,493       6,211       6,460       8,606       19,580  
                                         
Total nonperforming assets (NPAs)   $ 19,969     $ 24,306     $ 25,974     $ 40,128     $ 33,496  
                                         
Total classified assets   $ 29,215     $ 33,993     $ 36,590     $ 52,535     $ 58,635  
                                         
Accruing loans past due 30-89 days (1)   $ 2,123     $ 1,026     $ 6,873     $ 3,686     $ 4,270  
                                         
Allowance for loan losses   $ 21,005     $ 20,450     $ 20,218     $ 24,060     $ 25,142  
                                         
Selected ratios:                                        
NPLs to loans, net of unearned loan fees (2)     1.17 %     1.40 %     1.57 %     2.67 %     1.20 %
NPAs to total assets     1.04 %     1.28 %     1.39 %     2.18 %     1.78 %
Allowance for loan losses to NPLs     135.73 %     113.01 %     103.61 %     76.33 %     180.67 %
Allowance for loan losses to loans, net of unearned loan fees (2)     1.59 %     1.58 %     1.63 %     2.04 %     2.17 %
Loans 30-89 days past due to loans, net of unearned loan fees (2)     0.16 %     0.08 %     0.55 %     0.31 %     0.37 %
Texas ratio (3)     8.71 %     10.72 %     11.70 %     18.17 %     14.37 %
Classified asset ratio (4)     12.74 %     14.99 %     16.48 %     23.78 %     25.16 %
   
(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 is in the process of renewal, but continues to be current with respect to payments.
(2) Loans, net of unearned loan fees, exclude loans held for sale.
(3) Texas ratio defined as total NPAs divided by subsidiary bank only Tier 1 Capital plus allowance for loan losses.
(4) Classified asset ratio defined as total classified assets to subsidiary bank only Tier 1 Capital plus allowance for loan losses.
   
   

The following tables summarize past due loans held for investment by class as of the dates indicated:

                     
December 31, 2013   30-89
Days Past
Due
  90 Days +
Past Due
and Still
Accruing
  Nonaccrual
Loans
  Total
Past Due
  Total Loans,
Held for
Investment
    (In thousands)
Commercial and residential real estate   $ 590   $ -   $ 3,277   $ 3,867   $ 855,677
Construction     277     -     10,283     10,560     87,884
Commercial     616     -     624     1,240     271,670
Consumer     146     -     924     1,070     60,893
Other     494     -     368     862     43,793
Total   $ 2,123   $ -   $ 15,476   $ 17,599   $ 1,319,917
                               
                               
                               
December 31, 2012   30-89
Days Past
Due
  90 Days +
Past Due
and Still
Accruing
  Nonaccrual
Loans
  Total
Past Due
  Total Loans,
Held for
Investment
    (In thousands)
Commercial and residential real estate   $ 832   $ 224   $ 8,034   $ 9,090   $ 736,524
Construction     -     -     -     -     72,742
Commercial     2,671     -     3,005     5,676     236,874
Consumer     140     -     1,332     1,472     63,009
Other     627     -     1,321     1,948     49,600
Total   $ 4,270   $ 224   $ 13,692   $ 18,186   $ 1,158,749
                               

At December 31, 2013, classified assets represented 12.7% of bank-level Tier 1 Capital plus allowance for loan losses compared to 25.2% at December 31, 2012. The continued reductions in this ratio were a result of a decline in classified assets of $29.4 million, or 50.2%, during the year ended December 31, 2013. 

During the fourth quarter 2013, nonperforming assets decreased $4.3 million as compared to the third quarter 2013 and decreased by $13.5 million since December 31, 2012. The decline in nonperforming assets during 2013 was primarily the result of the sale of OREO properties, including a single property recorded at $10.9 million sold in the first quarter 2013. Nonperforming loans at December 31, 2013 includes one out-of-state loan participation with a balance of $10.7 million. 

Net recoveries in the fourth quarter 2013 were $0.4 million as compared to net recoveries of $0.1 million in the third quarter 2013 and an immaterial amount of net recoveries in the fourth quarter 2012. The coverage ratio, defined as allowance for loan losses divided by nonperforming loans, increased favorably from 113.0% at September 30, 2013 to 135.7% at December 31, 2013. The increase in the coverage ratio reflects a $2.6 million reduction in nonperforming loans during the quarter in addition to the $0.6 million increase in the allowance for loan losses during the fourth quarter 2013.

During the quarter ended December 31, 2013, the Company recorded a $0.2 million provision for loan losses compared to $0.1 million provision in the third quarter 2013 and a $3.5 million credit provision recorded in the fourth quarter in 2012. The Company resumed recognition of a provision for loan losses in the third quarter 2013 due primarily to the pace of its loan growth during 2013.

Shares Outstanding

As of December 31, 2013, the Company had 21,303,707 shares of common stock outstanding, consisting of 20,284,707 shares of voting common stock, of which 386,525 shares were in the form of unvested stock awards and 1,019,000 shares of non-voting common stock.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures related to tangible assets, including tangible book value and tangible common equity, and pre-tax operating earnings adjusted for (if any) provision (credit) for loan losses, OREO expenses, debt termination expense, acquisition, reorganization and integration costs and securities gains and losses.

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 schedule reconciles the non-GAAP pre-tax operating earnings to GAAP net income before income taxes as of the dates indicated:

                     
  Quarter Ended   Year Ended  
  December   September   December   December   December  
  31, 2013   30, 2013   31, 2012   31, 2013   31, 2012  
  (Dollars in thousands, except per share amounts)  
Income before income taxes $ 6,030   $ 5,648   $ 4,561   $ 20,385   $ 11,888  
Plus:                              
  Provision (credit) for loan losses   154     142     (3,500 )   296     (2,000 )
  Expenses (gains) related to other real estate owned, net   (1,037 )   (200 )   3,209     (1,160 )   4,370  
  Prepayment penalty on long term debt   -     -     -     629     -  
  Impairment of long-lived assets   -     -     -     -     2,750  
Less:                              
  Gain (loss) on sale of securities   (85 )   20     817     (11 )   2,527  
Pre-tax operating earnings $ 5,232   $ 5,570   $ 3,453   $ 20,161   $ 14,481  
                               
Weighted basic average common shares outstanding (1):   20,884,542     20,873,601     20,797,681     20,867,064     20,786,806  
Fully diluted average common shares outstanding (1):   20,995,284     20,981,555     20,867,519     20,951,237     20,878,251  
                               
Pre-tax operating earnings per common share-basic (1): $ 0.25   $ 0.27   $ 0.17   $ 0.97   $ 0.70  
Pre-tax operating earnings per common share-diluted (1): $ 0.25   $ 0.27   $ 0.17   $ 0.96   $ 0.69  
   
(1) Share and per share amounts have been adjusted to reflect the Company's 1-for-5 reverse stock split on May 20, 2013.
   
   
   

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:

                   
                   
Tangible Book Value per Common Share                  
    December 31,     September 30,     December 31,  
    2013     2013     2012  
    (Dollars in thousands, except per share amounts)  
Total stockholders' equity   $ 189,394     $ 188,268     $ 188,200  
Less: Intangible assets     (6,530 )     (7,232 )     (9,348 )
Tangible common equity   $ 182,864     $ 181,036     $ 178,852  
                         
Number of common shares outstanding     21,303,707       21,390,412       21,169,521  
                         
Book value per common share (1)   $ 8.89     $ 8.80     $ 8.89  
Tangible book value per common share (1)   $ 8.58     $ 8.46     $ 8.45  
   
(1) Share and per share amounts have been adjusted to reflect the Company's 1-for-5 reverse stock split on May 20, 2013.
   
   
Tangible Common Equity Ratio                  
    December 31,     September 30,     December 31,  
    2013     2013     2012  
    (Dollars in thousands)  
Total stockholders' equity   $ 189,394     $ 188,268     $ 188,200  
Less: Intangible assets     (6,530 )     (7,232 )     (9,348 )
Tangible common equity   $ 182,864       181,036       178,852  
                         
Total assets   $ 1,911,032     $ 1,896,191     $ 1,886,938  
Less: Intangible assets     (6,530 )     (7,232 )     (9,348 )
Tangible assets   $ 1,904,502     $ 1,888,959     $ 1,877,590  
                         
Equity ratio - GAAP (total stockholders'equity / total assets)     9.91 %     9.93 %     9.97 %
Tangible common equity ratio (tangible common equity / tangible assets)     9.60 %     9.58 %     9.53 %
                         

About Guaranty Bancorp

Guaranty Bancorp is a bank holding company that operates 27 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 and its subsidiary also provide wealth management services, including private banking, investment management, jumbo mortgage loans and trust services. 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 the 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 the bank subsidiary to declare dividends to the Company; adequacy of the allowance for loan losses, changes in credit quality and the effect of credit quality on the 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/A 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 any forward-looking statement 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, except as may otherwise be required by law, the Company does not intend, and assumes no obligation, to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

   
   
GUARANTY BANCORP AND SUBSIDIARIES  
Unaudited Consolidated Balance Sheets  
   
    December 31,     September 30,     December 31,  
    2013     2013     2012  
    (In thousands)  
Assets                  
Cash and due from banks   $ 28,077     $ 33,465     $ 163,217  
Time deposits with banks     -       -       8,000  
Securities available for sale, at fair value     384,957       422,421       413,382  
Securities held to maturity     41,738       33,385       31,283  
Bank stocks, at cost     15,605       15,451       14,262  
      Total investments     442,300       471,257       458,927  
                         
Loans held for sale     507       -       -  
                         
Loans, held for investment, net of unearned loan fees     1,319,917       1,293,252       1,158,749  
  Less allowance for loan losses     (21,005 )     (20,450 )     (25,142 )
      Net loans, held for investment     1,298,912       1,272,802       1,133,607  
                         
Premises and equipment, net     48,080       45,846       46,918  
Other real estate owned and foreclosed assets     4,493       6,211       19,580  
Other intangible assets, net     6,530       7,232       9,348  
Securities sold or called, not yet settled     21,917       -       5,878  
Bank owned life insurance     31,410       31,156       15,564  
Other assets     28,806       28,222       25,899  
      Total assets   $ 1,911,032     $ 1,896,191     $ 1,886,938  
                         
Liabilities and Stockholders' Equity                        
Liabilities:                        
  Deposits:                        
    Noninterest-bearing demand   $ 564,326     $ 525,330     $ 564,215  
    Interest-bearing demand and NOW     346,449       351,380       285,679  
    Money market     326,008       313,585       312,724  
    Savings     111,568       108,242       100,704  
    Time     180,106       183,978       191,434  
      Total deposits     1,528,457       1,482,515       1,454,756  
Securities sold under agreement to repurchase and federal funds purchased     24,284       29,139       67,040  
Borrowings     130,000       162,701       110,163  
Subordinated debentures     25,774       25,774       41,239  
Securities purchased, not yet settled     3,839       -       16,943  
Interest payable and other liabilities     9,284       7,794       8,597  
      Total liabilities     1,721,638       1,707,923       1,698,738  
                         
Stockholders' equity:                        
  Common stock and additional paid-in capital - common stock     706,514       706,459       705,389  
  Accumulated deficit     (405,494 )     (409,060 )     (417,957 )
  Accumulated other comprehensive income (loss)     (8,954 )     (6,665 )     3,165  
  Treasury stock     (102,672 )     (102,466 )     (102,397 )
      Total stockholders' equity     189,394       188,268       188,200  
      Total liabilities and stockholders' equity   $ 1,911,032     $ 1,896,191     $ 1,886,938  
                         
                         
                         
GUARANTY BANCORP AND SUBSIDIARIES  
Unaudited Consolidated Statements of Operations  
   
    Quarter Ended
December 31,
    Year Ended December 31,  
    2013     2012     2013     2012  
    (In thousands, except share and per share data)  
Interest income:                        
  Loans, including fees   $ 14,762     $ 14,303     $ 57,435     $ 57,326  
  Investment securities:                                
    Taxable     2,437       2,127       9,432       8,746  
    Tax-exempt     692       691       2,990       2,558  
  Dividends     169       156       664       631  
  Federal funds sold and other     10       99       117       304  
    Total interest income     18,070       17,376       70,638       69,565  
Interest expense:                                
  Deposits     610       693       2,490       2,878  
  Securities sold under agreement to repurchase and federal funds purchased     10       22       49       67  
  Borrowings     857       836       3,407       3,327  
  Subordinated debentures     202       608       1,122       2,882  
    Total interest expense     1,679       2,159       7,068       9,154  
    Net interest income     16,391       15,217       63,570       60,411  
Provision for loan losses     154       (3,500 )     296       (2,000 )
    Net interest income, after provision for loan losses     16,237       18,717       63,274       62,411  
Noninterest income:                                
  Customer service and other fees     2,313       2,079       8,916       8,158  
  Investment management and trust     831       561       2,904       1,751  
  Increase in cash surrender value of life insurance     304       143       1,018       576  
  Gain (loss) on sale of securities     (85 )     817       (11 )     2,527  
  Gain on sale of SBA loans     95       -       725       203  
  Other     16       166       247       376  
    Total noninterest income     3,474       3,766       13,799       13,591  
Noninterest expense:                                
  Salaries and employee benefits     7,685       6,832       29,581       26,769  
  Occupancy expense     1,507       1,550       6,289       7,253  
  Furniture and equipment     728       760       2,943       3,143  
  Amortization of intangible assets     702       812       2,818       3,138  
  Other real estate owned, net     (1,037 )     3,209       (1,160 )     4,370  
  Insurance and assessments     641       677       2,519       3,137  
  Professional fees     968       1,543       3,618       4,089  
  Prepayment penalty on long term debt     -       -       629       -  
  Impairment of long-lived assets     -       -       -       2,750  
  Other general and administrative     2,487       2,539       9,451       9,465  
    Total noninterest expense     13,681       17,922       56,688       64,114  
    Income before income taxes     6,030       4,561       20,385       11,888  
Income tax expense (benefit)     1,942       1,441       6,356       (3,171 )
    Net income   $ 4,088     $ 3,120     $ 14,029     $ 15,059  
                                 
Earnings per common share-basic(1):   $ 0.20     $ 0.15     $ 0.67     $ 0.72  
Earnings per common share-diluted(1):     0.19       0.15       0.67       0.72  
                                 
Dividend declared per common share:   $ 0.03     $ -     $ 0.08     $ -  
                                 
Weighted average common shares outstanding-basic(1):     20,884,542       20,797,681       20,867,064       20,786,806  
Weighted average common shares outstanding-diluted(1):     20,995,284       20,867,519       20,951,237       20,878,251  
   
(1) Share and per share amounts have been adjusted to reflect the Company's 1-for-5 reverse stock split on May 20, 2013.
   
   
   
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
 
    QTD Average   YTD Average
    December   September   December   December   December
    31, 2013   30, 2013   31, 2012   31, 2013   31, 2012
    (In thousands)
Assets                              
Interest earning assets                              
  Loans, net of unearned loan fees   $ 1,301,815   $ 1,267,647   $ 1,129,893   $ 1,237,697   $ 1,110,267
  Securities     464,987     476,269     451,342     485,582     405,240
  Other earning assets     14,708     9,830     159,038     32,414     129,391
Average earning assets     1,781,510     1,753,746     1,740,273     1,755,693     1,644,898
Other assets     124,014     124,335     102,939     107,885     104,217
Total average assets   $ 1,905,524   $ 1,878,081   $ 1,843,212   $ 1,863,578   $ 1,749,115
                               
Liabilities and Stockholders' Equity                              
Average liabilities:                              
Average deposits:                              
  Noninterest-bearing deposits   $ 547,739   $ 510,367   $ 521,000   $ 521,876   $ 496,940
  Interest-bearing deposits     953,336     962,134     895,729     934,247     867,259
  Average deposits     1,501,075     1,472,501     1,416,729     1,456,123     1,364,199
Other interest-bearing liabilities     205,242     209,471     232,004     209,430     197,633
Other liabilities     8,140     8,723     8,736     8,491     7,983
Total average liabilities     1,714,457     1,690,695     1,657,469     1,674,044     1,569,815
Average stockholders' equity     191,067     187,386     185,743     189,534     179,300
Total average liabilities and stockholders' equity   $ 1,905,524   $ 1,878,081   $ 1,843,212   $ 1,863,578   $ 1,749,115
                               
                               
                               
GUARANTY BANCORP  
Unaudited Credit Quality Measures  
   
  Quarter Ended  
  December     September     June 30,     March 31,     December  
  31, 2013     30, 2013     2013     2013     31, 2012  
  (Dollars in thousands)  
Nonaccrual loans and leases $ 15,476     $ 18,095     19,430     $ 31,482     $ 13,692  
Accruing loans past due 90 days or more   -       -     84       40       224  
  Total nonperforming loans $ 15,476     $ 18,095     19,514     $ 31,522     $ 13,916  
                                     
Other real estate owned and foreclosed assets   4,493       6,211     6,460       8,606       19,580  
  Total nonperforming assets $ 19,969     $ 24,306     25,974     $ 40,128     $ 33,496  
                                     
Total classified assets $ 29,215     $ 33,993     36,590     $ 52,535     $ 58,635  
                                     
Nonperforming loans $ 15,476     $ 18,095     19,514     $ 31,522     $ 13,916  
Performing troubled debt restructurings   4,852       2,500     2,675       1,268       3,838  
Allocated allowance for loan losses   (565 )     (1,450 )   (1,524 )     (6,474 )     (2,654 )
  Net investment in impaired loans $ 19,763     $ 19,145     20,665     $ 26,316     $ 15,100  
                                     
Accruing loans past due 30-89 days $ 2,123     $ 1,026     6,873     $ 3,686     $ 4,270  
                                     
Charged-off loans $ 644     $ 110     4,996     $ 1,523     $ 1,199  
Recoveries   (1,045 )     (200 )   (1,154 )     (441 )     (1,244 )
  Net charge-offs $ (401 )   $ (90 )   3,842     $ 1,082     $ (45 )
                                     
Provision for loan loss $ 154     $ 142     -     $ -     $ (3,500 )
                                     
Allowance for loan losses $ 21,005     $ 20,450     20,218     $ 24,060     $ 25,142  
                                     
Allowance for loan losses to loans, net of unearned loan fees (1)   1.59 %     1.58 %   1.63 %     2.04 %     2.17 %
Allowance for loan losses to nonaccrual loans   135.73 %     113.01 %   104.06 %     76.42 %     183.63 %
Allowance for loan losses to nonperforming loans   135.73 %     113.01 %   103.61 %     76.33 %     180.67 %
Nonperforming assets to loans, net of unearned loan fees and other real estate owned (1)   1.51 %     1.87 %   2.08 %     3.37 %     2.84 %
Nonperforming assets to total assets   1.04 %     1.28 %   1.39 %     2.18 %     1.78 %
Nonaccrual loans to loans, net of unearned loan fees (1)   1.17 %     1.40 %   1.57 %     2.67 %     1.18 %
Nonperforming loans to loans, net of unearned loan fees (1)   1.17 %     1.40 %   1.57 %     2.67 %     1.20 %
Annualized net charge-offs to average loans   (0.12) %     (0.03) %   1.27 %     0.38 %     (0.02) %
   
(1) Loans, net of unearned loan fees, exclude loans held for sale.

Contact Information

  • Contacts:
    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