SOURCE: Guaranty Bancorp

Guaranty Bancorp

April 16, 2014 16:10 ET

Guaranty Bancorp Announces 2014 First Quarter Financial Results

DENVER, CO--(Marketwired - Apr 16, 2014) -  Guaranty Bancorp (NASDAQ: GBNK)

  • Net income increased 55.9% in the first quarter 2014 as compared to the same quarter in 2013
  • Net loans grew 12.9% annualized during the first quarter 2014
  • Demand deposits as a percentage of total deposits continued to grow to 37.4% as of March 31, 2014
  • Net interest margin remained stable with a four basis point increase to 3.69% during the first quarter 2014

Guaranty Bancorp (NASDAQ: GBNK) ("we", "our" or "the Company"), a community bank holding company based in Colorado, today announced first quarter 2014 net income of $3.5 million, or $0.17 earnings per basic and diluted common share, an increase of $1.3 million or $0.06 earnings per basic and diluted common share as compared to the same quarter in 2013(1). The Company's pre-tax operating earnings(2) in the first quarter 2014 were $5.3 million, or $0.25 earnings per basic and diluted common share, an increase of $1.2 million or $0.05 earnings per basic and diluted common share as compared to the same quarter in 2013.

The $1.3 million increase in net income and the $1.2 million increase in pre-tax operating earnings in the first quarter 2014 as compared to the same quarter in the prior year was primarily due to a $0.6 million improvement in interest income, attributable to growth in average loan balances, combined with a $0.3 million decrease in interest expense, mostly due to the first quarter 2013 redemption of certain high-cost trust preferred securities ("TruPS") and related subordinated debentures. Additionally, several categories of noninterest income contributed to the increase in net income and pre-tax operating earnings in the first quarter 2014 as compared to the first quarter 2013, including a $0.3 million increase in investment management and trust fees, a $0.2 million increase in deposit service fee income and a $0.2 million increase in bank-owned life insurance income ("BOLI"). 

"The first quarter of 2014 was another strong quarter for Guaranty Bancorp," said Paul W. Taylor, President and CEO. "We are very pleased with the continued momentum we see across our organization. The strength of the Colorado economy, along with our success in developing new and expanding existing customer relationships resulted in annualized net loan growth of 12.9% in the quarter. I am especially pleased with the annualized commercial loan growth of 25.4% for the quarter. The significant increase in net income for the first quarter of 55.9% as compared to the same quarter in 2013 was driven by our steady net loan growth. Demand deposits as a percentage of total deposits continued to grow to 37.4% during the quarter and we are pleased with the continued stability of our net interest margin. As a community bank, our success is tied to the success of our customers and our focus remains on providing highly personalized service that helps enable them to reach their financial goals."

(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.

Pre-tax operating earnings increased $0.1 million during the first quarter 2014 as compared to the fourth quarter 2013. Net income decreased $0.5 million in the first quarter 2014 as compared to the fourth quarter 2013 primarily due to a $1.0 gain on disposition of other real estate owned ("OREO"), net of income taxes, during the fourth quarter 2013.

Key Financial Measures
Income Statement

                     
    Three Months Ended  
    March 31,     December 31,       March 31,  
    2014     2013       2013  
                     
    (Dollars in thousands, except per share amounts)
Net income $  3,542      4,088     $  2,272  
Earnings per common share - basic (1) $  0.17      0.20     $  0.11  
Return on average assets    0.75 %    0.85 %      0.51 %
Net interest margin    3.69 %    3.65 %      3.61 %
Adjusted tax-equivalent efficiency ratio    68.65 %    63.49 %      73.38 %
                     
(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

                                     
                                     
      March 31,       December 31,     Percent       March 31,     Percent  
      2014       2013     Change       2013     Change  
      (Dollars in thousands, except per share amounts)  
Cash and cash equivalents   $ 35,311     $ 28,077     25.8 %   $ 55,891     (36.8 )%
Total investments     470,847       442,300     6.5 %     512,188     (8.1 )%
Total loans, net of unearned loan fees     1,362,312       1,320,424     3.2 %     1,180,607     15.4 %
Allowance for loan losses     (21,550 )     (21,005 )   2.6 %     (24,060 )   (10.4 )%
Total assets     1,961,392       1,911,032     2.6 %     1,836,840     6.8 %
Average earning assets, quarter-to-date     1,787,778       1,781,510     0.4 %     1,728,385     3.4 %
Average assets, quarter-to-date     1,907,779       1,905,524     0.1 %     1,821,127     4.8 %
Total deposits     1,533,010       1,528,457     0.3 %     1,442,317     6.3 %
Book value per common share (1)     8.99       8.89     1.1 %     8.86     1.5 %
Tangible book value per common share (1)     8.72       8.58     1.6 %     8.46     3.1 %
Equity ratio - GAAP     9.94 %     9.91 %   0.3 %     10.32 %   (3.7 )%
Tangible common equity ratio     9.67 %     9.60 %   0.7 %     9.90 %   (2.3 )%
Total risk-based capital ratio     14.75 %     14.96 %   (1.4 )%     15.20 %   (3.0 )%
                                     
(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

                   
    Three Months Ended  
    March 31,     December 31,     March 31,  
    2014     2013     2013  
                   
    (Dollars in thousands)
Net interest income $ 16,259   $ 16,391   $ 15,378  
Interest rate spread   3.49 %   3.45 %   3.35 %
Net interest margin   3.69 %   3.65 %   3.61 %
Net interest margin, fully tax equivalent   3.78 %   3.75 %   3.72 %
Average cost of deposits                  
  (including noninterest-bearing deposits)   0.16 %   0.16 %   0.18 %
                     

First quarter 2014 net interest margin improved by four basis points to 3.69% as compared to the fourth quarter 2013 and improved by eight basis points from 3.61% in the first quarter 2013. The increase in net interest margin in the first quarter 2014 as compared to the fourth quarter 2013 was primarily the result of a change in the mix of average earning assets due primarily as a result of loan growth. The improvement in net interest margin in the first quarter 2014 compared to the first quarter 2013 was due to a 15 basis point decline in the cost of average interest-bearing liabilities, primarily due to the first quarter 2013 redemption of certain TruPS and related subordinated debentures combined with a five basis point decline in the average cost of interest bearing deposits.

Net interest income improved $0.9 million to $16.3 million in the first quarter 2014 as compared to the first quarter 2013 due to a $0.6 million increase in interest income and a $0.3 million decline in interest expense. The increase in interest income in the first quarter 2014 as compared to the same quarter in 2013 was primarily due to a $166.8 million, or 14.3% increase in average loan balances which were partially funded with low-yielding overnight cash. The decline in interest expense during the first quarter 2014 as compared to the same quarter in 2013 was mostly due to the early redemption of $15.0 million in fixed, high-cost TruPS and related subordinated debentures during the first quarter 2013 combined with a five basis point decline in the average costs of interest bearing deposits, as stated above.

Noninterest Income

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

                     
      Three Months Ended
      March 31,
2014
    December 31,
2013
      March 31,
2013
                     
      (In thousands)
Noninterest income:                    
  Customer service and other fees   $ 2,167   $ 2,313     $ 1,983
  Investment management and trust     908     831       637
  Increase in cash surrender value of life insurance     293     304       137
  Gain (loss) on sale of securities     25     (85 )     -
  Gain on sale of SBA loans     137     95       136
  Other     120     16       57
  Total noninterest income   $ 3,650   $ 3,474     $ 2,950
                       

First quarter 2014 noninterest income increased $0.2 million to $3.7 million as compared to fourth quarter 2013 and increased $0.7 million as compared to the first quarter 2013. 

The $0.2 million increase in noninterest income in the first quarter 2014 as compared to the fourth quarter 2013 was mostly due to $0.1 million increases in both investment management and trust income and other noninterest income. As compared to the first quarter 2013, noninterest income increased $0.7 million primarily due to a $0.3 million increase in investment management and trust income, a $0.2 million increase in customer deposit service fee income, including treasury management fees and a $0.2 million increase in BOLI income.

During the first quarter 2014, assets under management increased by $32.4 million, or 28.4% annualized, to $495.3 million as compared to December 31, 2013. As compared to March 31, 2013, assets under management increased by $108.6 million, or 28.1% during the twelve months ending March 31, 2014. The growth in assets under management was primarily related to the Company's investment management subsidiary, Private Capital Management ("PCM") reflecting new customer relationships as well as growth in existing relationships.

Noninterest Expense

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

                     
      Three Months Ended
      March 31,
2014
    December 31,
2013
      March 31,
2013
                     
      (In thousands)
Noninterest expense:                    
  Salaries and employee benefits   $ 8,078   $ 7,685     $ 7,441
  Occupancy expense     1,548     1,507       1,612
  Furniture and equipment     695     728       761
  Amortization of intangible assets     591     702       707
  Other real estate owned     56     (1,037 )     334
  Insurance and assessment     580     641       608
  Professional fees     892     968       911
  Prepayment penalty on long term debt     -     -       629
  Other general and administrative     2,190     2,487       2,189
  Total noninterest expense   $ 14,630   $ 13,681     $ 15,192
                       

Noninterest expense was $14.6 million in the first quarter 2014 as compared to $13.7 million in the fourth quarter 2013 and $15.2 million in the first quarter 2013. 

First quarter 2014 noninterest expense increased $0.9 million as compared to the fourth quarter 2013, primarily due to $1.0 million in net gains on disposition of OREO in the fourth quarter 2013. Excluding OREO expenses, all other categories of noninterest expense reflected an aggregate net decline of $0.1 million as compared to the fourth quarter 2013. Other general and administrative expense decreased $0.3 million as compared to the fourth quarter 2013, mostly due to reductions in both collection expenses as well as advertising and business development expenses. Partially offsetting these reductions in noninterest expense was a $0.4 million increase in salaries and employee benefits as compared to the fourth quarter 2013, primarily due to increased payroll taxes as a result of the timing of the payroll cycle. 

As compared to the first quarter 2013, noninterest expense declined $0.6 million in the first quarter 2014, primarily due to the prepayment penalty of $0.6 million incurred during the first quarter 2013 related to the redemption of certain TruPS. OREO expenses also declined $0.3 million as compared to the first quarter 2013, mostly due to reductions in net operating costs. Salaries and employee benefits expense increased $0.6 million during the first quarter 2014 as compared to the same quarter in 2013 primarily due to increases in salary expense, self-funded medical insurance and equity compensation expense.

Balance Sheet

                                   
    March 31,       December 31,     Percent       March 31,     Percent  
    2014       2013     Change       2013     Change  
    (Dollars in thousands)  
Total assets $ 1,961,392     $ 1,911,032     2.6 %   $ 1,836,840     6.8 %
Average assets, quarter-to-date   1,907,779       1,905,524     0.1 %     1,821,127     4.8 %
Total loans, net of unearned loan fees   1,362,312       1,320,424     3.2 %     1,180,607     15.4 %
Total deposits   1,533,010       1,528,457     0.3 %     1,442,317     6.3 %
                                   
Equity ratio - GAAP   9.94 %     9.91 %   0.3 %     10.32 %   (3.7 )%
Tangible common equity ratio   9.67 %     9.60 %   0.7 %     9.90 %   (2.3 )%
                                   

At March 31, 2014, the Company had total assets of $2.0 billion, reflecting a $50.4 million increase compared to December 31, 2013 and a $124.6 million increase compared to March 31, 2013. The increase in total assets during the first quarter 2014 includes a $41.9 million increase in loans and a $28.5 million increase in investments, partially offset by a decline of $21.9 million in securities sold or called, not yet settled.

As compared to March 31, 2013 total assets reflects an increase in net loans of $181.7 million, or 15.4%, partially offset by a $41.3 million decrease in investments and a $20.6 million decrease in cash.

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

                         
      March 31,       December 31,       March 31,  
      2014       2013       2013  
      (In thousands)  
Loans held for sale   $ -     $ 507     $ -  
Commercial and residential real estate     904,124       866,507       760,735  
Construction     67,862       77,657       63,732  
Commercial     288,865       271,843       246,883  
Agricultural     10,917       10,772       9,787  
Consumer     60,010       60,932       62,828  
SBA     30,839       31,010       35,671  
Other     570       2,039       2,361  
  Total gross loans     1,363,187       1,321,267       1,181,997  
    Unearned loan fees     (875 )     (843 )     (1,390 )
  Loans, net of unearned loan fees   $ 1,362,312     $ 1,320,424     $ 1,180,607  
                         

During the three months ended March 31, 2014, loans net of unearned fees increased by $41.9 million. The increase in loans during the first quarter 2014 was primarily due to a $37.6 million increase in commercial and residential real estate and $17.0 million increase in commercial loans. Commercial and residential real estate growth was comprised of mostly of loans to finance the acquisition and development of single and multi-tenant commercial properties as well as $7.3 million in jumbo mortgage loans. Commercial loan growth during the first quarter consisted mostly of loans to businesses and business owners ranging from $1.0 million to $5.0 million. Loans held for sale at December 31, 2013 included two performing SBA loans that were sold during the first quarter 2014.

As compared to March 31, 2013, loans net of unearned fees increased by $181.7 million, or 15.4%. The net loan growth was primarily comprised of a $143.4 million increase in commercial and residential real estate loans, including a $69.2 million increase in jumbo mortgage loans and a $42.0 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 utilization rate on commercial lines of credit was 40.7% at March 31, 2014 as compared to 39.5% at December 31, 2013 and 39.8% at March 31, 2013.

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

                   
      March 31,     December 31,     March 31,
      2014     2013     2013
      (In thousands)
Noninterest bearing deposits   $ 573,653   $ 564,326   $ 520,008
Interest-bearing demand and NOW     327,395     346,449     299,010
Money market     332,869     326,008     326,767
Savings     119,416     111,568     107,675
Time     179,677     180,106     188,857
Total deposits   $ 1,533,010   $ 1,528,457   $ 1,442,317
                   

Non-maturing deposits increased $5.0 million in the first quarter 2014 as compared to the fourth quarter 2013, and increased $99.9 million, or 8.0%, as compared to the first quarter 2013. At March 31, 2014, noninterest bearing deposits as a percentage of total deposits was 37.4% as compared to 36.9% at December 31, 2013 and 36.1% at March 31, 2013.

During the first quarter 2014, securities sold under agreements to repurchase increased by $2.8 million compared to December 31, 2013 and decreased by $33.8 million compared to March 31, 2013. The decrease from the same quarter in the prior year 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 $173.0 million at March 31, 2014 consisting of $110.0 million of term notes and $63.0 million of overnight advances on our line of credit. The additional overnight borrowings during the first quarter 2014 were primarily utilized for funding loan and investment growth. Total borrowings at March 31, 2013 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
March 31,
2014
  Ratio at
December 31,
2013
  Minimum Capital Requirement   Minimum Requirement for "Well-Capitalized" Institution  
Total Risk-Based Capital Ratio                
  Consolidated 14.75 % 14.96 % 8.00 % N/A  
  Guaranty Bank and Trust Company 14.24 % 14.37 % 8.00 % 10.00 %
                 
Tier 1 Risk-Based Capital Ratio                
  Consolidated 13.50 % 13.71 % 4.00 % N/A  
  Guaranty Bank and Trust Company 12.99 % 13.12 % 4.00 % 6.00 %
                 
Leverage Ratio                
  Consolidated 11.65 % 11.49 % 4.00 % N/A  
  Guaranty Bank and Trust Company 11.22 % 11.00 % 4.00 % 5.00 %
                   

The declines in the consolidated total risk-based capital ratio and Tier 1 risk-based capital ratio from December 31, 2013 to March 31, 2014 were primarily attributable to the loan and investment growth during the first quarter 2014. 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:

                                 
      March 31,     December 31,     September 30,     June 30,     March 31,  
      2014     2013     2013     2013     2013  
      (Dollars in thousands)  
Nonaccrual loans and leases   $ 14,605   $ 15,476   $ 18,095   $ 19,430   $ 31,482  
Accruing loans past due 90 days or more (1)     -     -     -     84     40  
                                 
Total nonperforming loans (NPLs)   $ 14,605   $ 15,476   $ 18,095   $ 19,514   $ 31,522  
Other real estate owned and foreclosed assets     4,419     4,493     6,211     6,460     8,606  
                                 
Total nonperforming assets (NPAs)   $ 19,024   $ 19,969   $ 24,306   $ 25,974   $ 40,128  
                                 
Total classified assets   $ 27,176   $ 29,215   $ 33,993   $ 36,590   $ 52,535  
                                 
Accruing loans past due 30-89 days (1)   $ 432   $ 2,123   $ 1,026   $ 6,873   $ 3,686  
                                 
Allowance for loan losses   $ 21,550   $ 21,005   $ 20,450   $ 20,218   $ 24,060  
                                 
Selected ratios:                                
NPLs to loans, net of unearned loan fees (2)     1.07 %   1.17 %   1.40 %   1.57 %   2.67 %
NPAs to total assets     0.97 %   1.04 %   1.28 %   1.39 %   2.18 %
Allowance for loan losses to NPLs     147.55 %   135.73 %   113.01 %   103.61 %   76.33 %
                                 
Allowance for loan losses to loans, net of unearned loan fees (2)     1.58 %   1.59 %   1.58 %   1.63 %   2.04 %
Loans 30-89 days past due to loans, net of unearned loan fees (2)     0.03 %   0.16 %   0.08 %   0.55 %   0.31 %
Texas ratio (3)     8.11 %   8.71 %   10.72 %   11.70 %   18.17 %
Classified asset ratio (4)     11.59 %   12.74 %   14.99 %   16.48 %   23.78 %
 
(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:

                               
March 31, 2014     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   $ 176   $ -   $ 13,624   $ 13,800   $ 903,551
Construction     -     -     -     -     67,812
Commercial     39     -     112     151     288,679
Consumer     55     -     592     647     59,971
Other     162     -     277     439     42,299
Total   $ 432   $ -   $ 14,605   $ 15,037   $ 1,362,312
                               
                               
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   $ -   $ 13,560   $ 14,150   $ 865,960
Construction     277     -     -     277     77,601
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
                               

At March 31, 2014, classified assets represented 11.6% of bank-level Tier 1 Capital plus allowance for loan losses compared to 12.7% at December 31, 2013 and 23.8% at March 31, 2013. The continued reductions in this ratio were a result of a decline in classified assets of $25.4 million, or 48.3%, since March 31, 2013. 

During the first quarter 2014, nonperforming assets decreased $0.9 million from December 31, 2013 and decreased by $21.1 million from March 31, 2013. The decline in nonperforming assets subsequent to the first quarter 2013 was primarily the result of the disposition of an out-of-state loan participation recorded at $10.7 million during the second quarter 2013. Nonperforming loans at March 31, 2014 includes one out-of-state loan participation with a balance of $10.2 million. 

Net recoveries in the first quarter 2014 were $0.6 million as compared to net recoveries of $0.4 million in the fourth quarter 2013 and net charge-offs of $1.1 million in the first quarter 2013. The coverage ratio, defined as allowance for loan losses divided by nonperforming loans, increased favorably from 135.7% at December 31, 2013 to 147.6% at March 31, 2014. The increase in the coverage ratio reflects a $0.9 million reduction in nonperforming loans during the quarter in addition to the $0.5 million increase in the allowance for loan losses during the first quarter 2014.

During the quarter ended March 31, 2014, the Company recorded an immaterial credit provision for loan losses compared to $0.2 million provision in the fourth quarter 2013 and no provision in the first quarter 2013. The immaterial net credit provision recognized in the first quarter 2014 was primarily the result of $0.6 million in net recoveries received during the same quarter.

Shares Outstanding

As of March 31, 2014, the Company had 21,696,107 shares of common stock outstanding, consisting of 20,677,107 shares of voting common stock, of which 745,406 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:

                       
    Three Months Ended
      March 31,       December 31,       March 31,
      2014       2013       2013
      (Dollars in thousands, except per share amounts)
Income before income taxes   $ 5,285     $ 6,030     $ 3,136
Adjusted for:                      
  Provision (credit) for loan losses     (6 )     154       -
  Expenses (gains) related to other real estate owned, net     56       (1,037 )     334
  Prepayment penalty on long term debt     -       -       629
  (Gain) loss on sale of securities     (25 )     85       -
Pre-tax operating earnings   $ 5,310     $ 5,232     $ 4,099
                       
Weighted basic average common shares outstanding (1):     20,936,295       20,884,542       20,844,384
Fully diluted average common shares outstanding (1):     21,028,722       20,995,284       20,917,693
                       
Pre-tax operating earnings per common share-basic (1):   $ 0.25     $ 0.25     $ 0.20
Pre-tax operating earnings per common share-diluted (1):   $ 0.25     $ 0.25     $ 0.20
                       
(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 table reconciles the efficiency ratio and the adjusted tax equivalent efficiency ratio as of the dates indicated:

                                       
      Three Months Ended  
      March 31, 2014     December 31, 2013     March 31, 2013  
      GAAP
Efficiency
Ratio
    Adjusted Tax
Equivalent
Efficiency
Ratio
    GAAP
Efficiency
Ratio
    Adjusted Tax
Equivalent
Efficiency
Ratio
    GAAP
Efficiency
Ratio
    Adjusted Tax
Equivalent
Efficiency
Ratio
 
                                       
      (In thousands)  
Noninterest expense   $ 14,630   $ 14,630   $ 13,681   $ 13,681   $ 15,192   $ 15,192  
  Adjustments to noninterest expense:                                      
    Amortization of intangible assets     (591)     (591)     (702)     (702)     (707)     (707)  
    Prepayment penalty on long term debt     -     -     -     -     -     (629)  
      Adjusted noninterest expense   $ 14,039   $ 14,039   $ 12,979   $ 12,979   $ 14,485   $ 13,856  
                                       
Noninterest income     3,650     3,650     3,474     3,474     2,950     2,950  
  Adjustments to noninterest income:                                      
    Tax effected incremental income on bank owned life insurance     -     147     -     154     -     68  
      Adjusted noninterest income     3,650     3,797     3,474     3,628     2,950     3,018  
                                       
Net interest income     16,259     16,259     16,391     16,391     15,378     15,378  
  Adjustments to net interest income:                                      
    Tax effected incremental income on municipal bonds     -     395     -     424     -     486  
      Adjusted net interest income     16,259     16,654     16,391     16,815     15,378     15,864  
                                             
      Adjusted noninterest income and adjusted net interest income   $ 19,909   $ 20,451   $ 19,865   $ 20,443   $ 18,328   $ 18,882  
                                       
Efficiency ratio     70.52 %   68.65 %   65.34 %   63.49 %   79.03 %   73.38 %
                                       

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            
                       
      March 31,       December 31,     March 31,  
      2014       2013     2013  
      (Dollars in thousands, except per share amounts)  
  Total stockholders' equity   $ 195,029     $ 189,394     189,542  
  Less: Intangible assets     (5,939 )     (6,530 )   (8,641 )
  Tangible common equity   $ 189,090     $ 182,864     180,901  
                       
  Number of common shares outstanding     21,696,107       21,303,707     21,382,867  
                       
  Book value per common share (1)   $ 8.99     $ 8.89     8.86  
  Tangible book value per common share (1)   $ 8.72     $ 8.58     8.46  
                       
(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                      
      March 31,       December 31,     March 31,  
      2014       2013     2013  
      (Dollars in thousands)  
  Total stockholders' equity   $ 195,029     $ 189,394     189,542  
  Less: Intangible assets     (5,939 )     (6,530 )   (8,641 )
  Tangible common equity   $ 189,090       182,864     180,901  
                       
  Total assets   $ 1,961,392     $ 1,911,032     1,836,840  
  Less: Intangible assets     (5,939 )     (6,530 )   (8,641 )
  Tangible assets   $ 1,955,453     $ 1,904,502     1,828,199  
                       
  Equity ratio - GAAP (total stockholders' equity / total assets)     9.94 %     9.91 %   10.32 %
  Tangible common equity ratio (tangible common equity / tangible assets)     9.67 %     9.60 %   9.90 %
                         

About Guaranty Bancorp

Guaranty Bancorp is a bank holding company that operates 26 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 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
 
                         
                         
      March 31,       December 31,       March 31,  
      2014       2013       2013  
      (In thousands)  
Assets                        
Cash and due from banks   $ 35,311     $ 28,077     $ 55,891  
Time deposits with banks     -       -       5,000  
                         
Securities available for sale, at fair value     399,679       384,957       462,656  
Securities held to maturity     54,021       41,738       35,164  
Bank stocks, at cost     17,147       15,605       14,368  
    Total investments     470,847       442,300       512,188  
                         
Loans held for sale     -       507       -  
                         
Loans, held for investment, net of unearned loan fees     1,362,312       1,319,917       1,180,607  
  Less allowance for loan losses     (21,550 )     (21,005 )     (24,060 )
    Net loans, held for investment     1,340,762       1,298,912       1,156,547  
                         
Premises and equipment, net     47,538       48,080       46,637  
Other real estate owned and foreclosed assets     4,419       4,493       8,606  
Other intangible assets, net     5,939       6,530       8,641  
Securities sold or called, not yet settled     -       21,917       -  
Bank owned life insurance     31,652       31,410       -  
Other assets     24,924       28,806       43,330  
    Total assets   $ 1,961,392     $ 1,911,032     $ 1,836,840  
                         
Liabilities and Stockholders' Equity                        
Liabilities:                        
  Deposits:                        
    Noninterest-bearing demand   $ 573,653     $ 564,326     $ 520,008  
    Interest-bearing demand and NOW     327,395       346,449       299,010  
    Money market     332,869       326,008       326,767  
    Savings     119,416       111,568       107,675  
    Time     179,677       180,106       188,857  
      Total deposits     1,533,010       1,528,457       1,442,317  
Securities sold under agreement to repurchase and federal funds purchased     27,045       24,284       60,833  
Federal Home Loan Bank term notes     110,000       110,000       110,159  
Federal Home Loan Bank line of credit borrowing     63,017       20,000       -  
Subordinated debentures     25,774       25,774       25,774  
Securities purchased, not yet settled     -       3,839       -  
Interest payable and other liabilities     7,517       9,284       8,215  
    Total liabilities     1,766,363       1,721,638       1,647,298  
                         
Stockholders' equity:                        
  Common stock and additional paid-in capital - common stock     706,973       706,514       705,726  
  Accumulated deficit     (402,998 )     (405,494 )     (415,685 )
  Accumulated other comprehensive income (loss)     (6,111 )     (8,954 )     1,961  
  Treasury stock     (102,835 )     (102,672 )     (102,460 )
    Total stockholders' equity     195,029       189,394       189,542  
    Total liabilities and stockholders' equity   $ 1,961,392     $ 1,911,032     $ 1,836,840  
 
 
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
 
               
               
      Three Months Ended March 31,
      2014       2013
      (In thousands, except share and per share data)
Interest income:              
  Loans, including fees   $ 14,734     $ 14,082
  Investment securities:              
    Taxable     2,332       2,265
    Tax-exempt     645       793
  Dividends     169       156
  Federal funds sold and other     1       34
    Total interest income     17,881       17,330
Interest expense:              
  Deposits     580       635
    Securities sold under agreement to repurchase and federal funds purchased     8       18
  Borrowings     836       818
  Subordinated debentures     198       481
    Total interest expense     1,622       1,952
    Net interest income     16,259       15,378
Provision (credit) for loan losses     (6 )     -
    Net interest income, after provision for loan losses     16,265       15,378
Noninterest income:              
  Customer service and other fees     2,167       1,983
  Investment management and trust     908       637
  Increase in cash surrender value of life insurance     293       137
  Gain (loss) on sale of securities     25       -
  Gain on sale of SBA loans     137       136
  Other     120       57
    Total noninterest income     3,650       2,950
Noninterest expense:              
  Salaries and employee benefits     8,078       7,441
  Occupancy expense     1,548       1,612
  Furniture and equipment     695       761
  Amortization of intangible assets     591       707
  Other real estate owned, net     56       334
  Insurance and assessments     580       608
  Professional fees     892       911
  Prepayment penalty on long term debt     -       629
  Other general and administrative     2,190       2,189
    Total noninterest expense     14,630       15,192
    Income before income taxes     5,285       3,136
Income tax expense     1,743       864
    Net income   $ 3,542     $ 2,272
               
Earnings per common share-basic(1):   $ 0.17     $ 0.11
Earnings per common share-diluted(1):     0.17       0.11
               
Dividend declared per common share:   $ 0.05     $ -
               
Weighted average common shares outstanding-basic(1):     20,936,295       20,844,384
Weighted average common shares outstanding-diluted(1):     21,028,722       20,917,693
   
(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
      March 31,     December 31,     March 31,
      2014     2013     2013
      (In thousands)
Assets                  
Interest earning assets                  
  Loans, net of unearned loan fees   $ 1,331,154   $ 1,301,815   $ 1,164,382
  Securities     454,442     464,987     498,525
  Other earning assets     2,182     14,708     65,478
Average earning assets     1,787,778     1,781,510     1,728,385
Other assets     120,001     124,014     92,742
Total average assets   $ 1,907,779   $ 1,905,524   $ 1,821,127
                   
Liabilities and Stockholders' Equity                  
Average liabilities:                  
Average deposits:                  
  Noninterest-bearing deposits   $ 548,272   $ 547,739   $ 518,612
  Interest-bearing deposits     960,442     953,336     896,655
  Average deposits     1,508,714     1,501,075     1,415,267
Other interest-bearing liabilities     196,182     205,242     208,187
Other liabilities     9,434     8,140     8,972
Total average liabilities     1,714,330     1,714,457     1,632,426
Average stockholders' equity     193,449     191,067     188,701
Total average liabilities and stockholders' equity   $ 1,907,779   $ 1,905,524   $ 1,821,127
 
 
GUARANTY BANCORP
Unaudited Credit Quality Measures
 
                                     
                                     
      Quarter Ended  
      March 31,       December 31,   September 30,       June 30,       March 31,  
      2014       2013   2013       2013       2013  
      (Dollars in thousands)  
Nonaccrual loans and leases   $ 14,605     $ 15,476   18,095     $ 19,430     $ 31,482  
Accruing loans past due 90 days or more     -       -   -       84       40  
  Total nonperforming loans   $ 14,605     $ 15,476   18,095     $ 19,514     $ 31,522  
                                     
Other real estate owned and foreclosed assets     4,419       4,493   6,211       6,460       8,606  
  Total nonperforming assets   $ 19,024     $ 19,969   24,306     $ 25,974     $ 40,128  
                                     
Total classified assets   $ 27,176     $ 29,215   33,993     $ 36,590     $ 52,535  
                                     
Nonperforming loans   $ 14,605     $ 15,476   18,095     $ 19,514     $ 31,522  
Performing troubled debt restructurings     5,757       6,227   2,500       2,675       1,268  
Allocated allowance for loan losses     (104 )     (565 ) (1,450 )     (1,524 )     (6,474 )
  Net investment in impaired loans   $ 20,258     $ 21,138   19,145     $ 20,665     $ 26,316  
                                     
Accruing loans past due 30-89 days   $ 432     $ 2,123   1,026     $ 6,873     $ 3,686  
                                     
Charged-off loans   $ 407     $ 644   110     $ 4,996     $ 1,523  
Recoveries     (958 )     (1,045 ) (200 )     (1,154 )     (441 )
  Net charge-offs   $ (551 )   $ (401 ) (90 )   $ 3,842     $ 1,082  
                                     
Provision (credit) for loan losses   $ (6 )   $ 154   142     $ -     $ -  
                                     
Allowance for loan losses   $ 21,550     $ 21,005   20,450     $ 20,218     $ 24,060  
                                     
Allowance for loan losses to loans, net of unearned loan fees (1)     1.58 %     1.59 % 1.58 %     1.63 %     2.04 %
Allowance for loan losses to nonaccrual loans     147.55 %     135.73 % 113.01 %     104.06 %     76.42 %
Allowance for loan losses to nonperforming loans     147.55 %     135.73 % 113.01 %     103.61 %     76.33 %
Nonperforming assets to loans, net of unearned loan fees and other real estate owned (1)     1.39 %     1.51 % 1.87 %     2.08 %     3.37 %
Nonperforming assets to total assets     0.97 %     1.04 % 1.28 %     1.39 %     2.18 %
Nonaccrual loans to loans, net of unearned loan fees (1)     1.07 %     1.17 % 1.40 %     1.57 %     2.67 %
Nonperforming loans to loans, net of unearned loan fees (1)     1.07 %     1.17 % 1.40 %     1.57 %     2.67 %
Annualized net charge-offs to average loans     (0.17 )%     (0.12 )% (0.03 )%     1.27 %     0.38 %
   
(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