SOURCE: Guaranty Bancorp

Guaranty Bancorp

April 15, 2015 16:10 ET

Guaranty Bancorp Announces 2015 First Quarter Financial Results

DENVER, CO--(Marketwired - Apr 15, 2015) - Guaranty Bancorp (NASDAQ: GBNK)

  • Increased net income 43.5% in the first quarter 2015 as compared to the same quarter in 2014
  • Improved return on average assets to 0.98% during the quarter as compared to 0.75% in the first quarter 2014
  • Increased net interest margin to 3.84% during the quarter as compared to 3.69% in the same quarter in 2014
  • Doubled quarterly cash dividend to $0.10 per share during the quarter as compared to 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 2015 net income of $5.1 million or $0.24 per basic and diluted common share, an increase of $1.5 million or $0.07 per basic and diluted common share as compared to the first quarter 2014.

"We experienced significant improvement in our key operating metrics in the first quarter 2015 primarily due to continued loan and deposit growth and a strategic decision to significantly lower our cost of funds by prepaying $90 million in FHLB term advances at the end of 2014," said Paul W. Taylor, President and CEO. "Return on average assets improved to 0.98% for the first quarter 2015 as compared to 0.75% in the first quarter 2014. Our return on average equity increased to 9.81% as compared to 7.43% in the same quarter 2014. Additionally, our net interest margin grew to 3.84% in the first quarter 2015 due to our lower funding costs and higher loan yields. We are also pleased with the continued momentum we experienced in our loan portfolio despite the higher level of payoffs received during the quarter due to the solid Colorado economy. New loans and advances on existing commitments were $153.6 million during the first quarter 2015, reflecting the value clients place in having a locally based community bank partner. Overall we continue to support the growth of local small and medium-sized businesses together with their owners and employees."

The Company's net income increased $1.5 million, or 43.5% for the first quarter 2015, as compared to the same quarter in the prior year, due to a $2.0 million improvement in interest income; a $0.5 million decline in interest expense and a $0.5 million increase in noninterest income. The $2.0 million increase in interest income was driven by a $198.5 million increase in average loans for the quarter ended March 31, 2015 combined with a $0.7 million increase in loan fees as compared to the first quarter of 2014. The $0.5 million decrease in interest expense during the first quarter 2015, as compared to the same quarter in 2014, was mostly the result of the prepayment of $90.0 million of high-cost Federal Home Loan Bank (FHLB) term advances during the fourth quarter 2014. The $0.5 million increase in noninterest income in the first quarter 2015 as compared to the first quarter 2014 was primarily due to an increase in investment management and trust income. The Company's acquisition of Cherry Hills Investment Advisors during the third quarter 2014 contributed $0.3 million in investment management and trust income during the first quarter 2015.

Key Financial Measures
Income Statement

                   
    Three Months Ended  
    March 31,     December 31,     March 31,  
    2015     2014     2014  
    (Dollars in thousands, except per share amounts)  
Net income   $ 5,084     $ 1,215     $ 3,542  
Earnings per common share - basic   $ 0.24     $ 0.06     $ 0.17  
Return on average assets     0.98 %     0.23 %     0.75 %
Return on average equity     9.81 %     2.32 %     7.43 %
Net interest margin     3.84 %     3.61 %     3.69 %
Efficiency ratio (1)     62.82 %     64.03 %     68.65 %
                         

(1) The "efficiency ratio" equals noninterest expense adjusted to exclude amortization of intangible assets, prepayment penalties on long-term debt and impairment of long-lived assets divided by the sum of tax equivalent net interest income and tax equivalent noninterest income. To calculate tax equivalent net interest income and noninterest income, the interest earned on tax exempt loans and investment securities and the income earned on bank-owned life insurance has been adjusted to reflect the amount that would have been earned had these investments been subject to normal income taxation.

Balance Sheet

                               
    March 31,     December 31,     Percent     March 31,     Percent  
    2015     2014     Change     2014     Change  
    (Dollars in thousands, except per share amounts)  
Total investments   $ 452,271     $ 449,482     0.6 %   $ 470,847     (3.9) %
Total loans, net of unearned loan fees     1,555,154       1,541,434     0.9 %     1,362,312     14.2 %
Allowance for loan losses     (22,500 )     (22,490 )   0.0 %     (21,550 )   4.4 %
Total assets     2,145,452       2,124,778     1.0 %     1,961,392     9.4 %
Total deposits     1,721,881       1,685,324     2.2 %     1,533,010     12.3 %
Book value per common share     9.71       9.57     1.5 %     8.99     8.0 %
Tangible book value per common share     9.41       9.24     1.8 %     8.72     7.9 %
Equity ratio - GAAP     9.84 %     9.74 %   1.0 %     9.94 %   (1.0) %
Tangible common equity ratio     9.56 %     9.43 %   1.4 %     9.67 %   (1.1) %
Total risk-based capital ratio     13.76 %     13.85 %   (0.6) %     14.75 %   (6.7) %
Assets under management   $ 706,844     $ 683,138     3.5 %   $ 495,328     42.7 %
                                     

Net Interest Income and Margin

                   
    Three Months Ended  
    March 31,     December 31,     March 31,  
    2015     2014     2014  
    (Dollars in thousands)  
Net interest income   $ 18,777     $ 17,680     $ 16,259  
Average earning assets     1,980,717       1,941,028       1,787,778  
Interest rate spread     3.72 %     3.40 %     3.49 %
Net interest margin     3.84 %     3.61 %     3.69 %
Net interest margin, fully tax equivalent     3.93 %     3.69 %     3.78 %
Average cost of interest-bearing liabilities                        
  (including noninterest-bearing deposits)     0.23 %     0.37 %     0.39 %
Average cost of deposits                        
  (including noninterest-bearing deposits)     0.16 %     0.16 %     0.16 %
                         

During the first quarter 2015, net interest margin increased by 23 basis points to 3.84%, as compared to the fourth quarter 2014 and increased 15 basis points, as compared to the first quarter 2014. The increase in net interest margin during the first quarter 2015 as compared to the fourth quarter 2014 was the result of an eight basis point increase in loan yield combined with a 14 basis point decrease in the cost of interest-bearing liabilities. The increase in loan yields during the first quarter 2015 as compared to the fourth quarter 2014 was largely due to fees recognized on the early payoff of loans during the same period. The decline in the cost of interest bearing liabilities during the first quarter 2015, as compared to the fourth quarter 2014, was the result of the prepayment of $90.0 million in FHLB high-cost term advances with a weighted average yield of 3.07% in the fourth quarter 2014. As compared to the first quarter 2014, the increase in the net interest margin during the first quarter 2015 was mostly due to a 16 basis point decline in the cost of interest-bearing liabilities due to the prepayment of the FHLB term advances.

Net interest income improved $1.1 million to $18.8 million in the first quarter 2015, as compared to the fourth quarter 2014, and increased $2.5 million as compared to the first quarter 2014. The $1.1 million increase in net interest income in the first quarter 2015 as compared to the fourth quarter 2014 was due to a $0.5 million increase in interest income, primarily due to loan fees and a $0.6 million decrease in interest expense, mostly due to the prepayment of FHLB term advances. The $2.5 million increase in net interest income in the first quarter 2015, as compared to the first quarter 2014, was due to a $2.0 million increase in interest income, driven by a 14.9% increase in average loan balances and a $0.5 million decrease in interest expense, driven by the prepayment of FHLB term advances.

Noninterest Income

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

             
    Three Months Ended
    March 31,
2015
  December 31,
2014
  March 31,
2014
    (In thousands)
Noninterest income:                  
  Deposit service and other fees   $ 2,035   $ 2,358   $ 2,066
  Investment management and trust     1,334     1,231     908
  Increase in cash surrender value of life insurance     408     418     293
  Gain on sale of securities     -     -     25
  Gain on sale of SBA loans     280     447     137
  Other     58     408     229
  Total noninterest income   $ 4,115   $ 4,862   $ 3,658
                   

Noninterest income increased $0.5 million to $4.1 million as compared to $3.7 million in the first quarter 2014 and decreased $0.7 million from $4.9 million in the fourth quarter 2014.

The $0.5 million increase in noninterest income in the first quarter 2015, as compared to the same quarter in 2014, was mostly due to a $0.4 million increase in investment management and trust income. The Company's acquisition of Cherry Hills Investment Advisors during the third quarter 2014 contributed $0.3 million to the increase in investment management and trust income during the first quarter 2015. At acquisition, Cherry Hills Investment Advisors had assets under management of $178.5 million. As compared to the fourth quarter 2014, noninterest income decreased $0.7 million primarily due to a $0.3 million decrease in deposit service and other fees; a $0.4 million decrease in other noninterest income, due to non-recurring income received in the fourth quarter 2014; and a $0.2 million decrease in gains on sale of SBA loans.

Total assets under management at March 31, 2015 were $706.8 million, an increase of $211.5 million, or 42.7% as compared to March 31, 2014.

Noninterest Expense

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

             
    Three Months Ended
    March 31,
2015
  December 31,
2014
  March 31,
2014
    (In thousands)
Noninterest expense:                  
  Salaries and employee benefits   $ 8,604   $ 8,434   $ 8,075
  Occupancy expense     1,697     1,544     1,548
  Furniture and equipment     730     698     695
  Amortization of intangible assets     495     654     591
  Other real estate owned     41     142     56
  Insurance and assessment     565     576     580
  Professional fees     829     927     892
  Prepayment penalty on debt extinguishment     -     5,459     -
  Impairment of long-lived assets     -     76     -
  Other general and administrative     2,309     2,524     2,201
  Total noninterest expense   $ 15,270   $ 21,034   $ 14,638
                   

Noninterest expense decreased $5.8 million to $15.3 million as compared to $21.0 million in the fourth quarter 2014 and increased $0.6 million from $14.6 million in the first quarter 2014. The Company's tax equivalent efficiency ratio improved 121 basis points to 62.82% for the quarter ended March 31, 2015 as compared to 64.03% for the quarter ended December 31, 2014 and improved 583 basis points as compared to 68.65% for the quarter ended March 31, 2014.

The primary cause for the $5.8 million decrease in noninterest expense in the first quarter 2015 as compared to the fourth quarter 2014 was due to a prepayment penalty of $5.5 million incurred in connection with the prepayment of FHLB term advances in the fourth quarter 2014. Salaries and employee benefits increased $0.2 million in the first quarter 2015 as compared to the fourth quarter 2014, mostly due to increased payroll taxes as a result of the timing of the payroll cycle.

The $0.6 million increase in noninterest expense in the first quarter 2015 as compared to the first quarter 2014 included a $0.3 million increase in salaries and a $0.3 million increase in equity compensation expense. The primary driver for the increase in salaries was an increase of 6.2 average full-time equivalent employees in the first quarter 2015 as compared to the first quarter 2014. The increase in equity compensation expense was primarily due to an increase in average unvested shares outstanding during the first quarter 2015 as compared to the same quarter in 2014.

Balance Sheet

                               
    March 31,     December 31,     Percent     March 31,     Percent  
    2015     2014     Change     2014     Change  
    (Dollars in thousands)  
Total assets   $ 2,145,452     $ 2,124,778     1.0 %   $ 1,961,392     9.4 %
Average assets, quarter-to-date     2,108,766       2,067,371     2.0 %     1,907,779     10.5 %
Total loans, net of unearned loan fees     1,555,154       1,541,434     0.9 %     1,362,312     14.2 %
Total deposits     1,721,881       1,685,324     2.2 %     1,533,010     12.3 %
                                     
Equity ratio - GAAP     9.84 %     9.74 %   1.0 %     9.94 %   (1.0) %
Tangible common equity ratio     9.56 %     9.43 %   1.4 %     9.67 %   (1.1) %
                                     

At March 31, 2015, the Company had total assets of $2.1 billion, reflecting a $20.7 million increase compared to December 31, 2014 and a $184.1 million increase compared to March 31, 2014. The increase in total assets during the quarter ended March 31, 2015 includes a $13.7 million increase in loans, a $5.3 million increase in bank-owned life insurance (BOLI) and a $2.8 million increase in investments. During the first quarter 2015, the Company transferred approximately $50.2 million in investments classified as "available-for-sale" to "held-to-maturity." The increases in assets were funded by a $36.6 million increase in deposits.

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

                   
    March 31,     December 31,     March 31,  
    2015     2014     2014  
    (In thousands)  
Loans held for sale   $ 700     $ -     $ -  
Commercial and residential real estate     1,055,219       1,049,315       904,124  
Construction     72,505       66,634       67,862  
Commercial     326,679       324,057       288,865  
Agricultural     10,625       10,625       10,917  
Consumer     60,008       60,155       60,010  
SBA     27,419       30,025       30,839  
Other     2,133       1,002       570  
  Total gross loans     1,555,288       1,541,813       1,363,187  
    Unearned loan fees     (134 )     (379 )     (875 )
  Loans, net of unearned loan fees   $ 1,555,154     $ 1,541,434     $ 1,362,312  
                         

The following table presents the changes in our loan balances at the dates indicated:

                               
    March 31,     December 31,     September 30,    June 30,     March 31,  
    2015     2014     2014     2014     2014  
    (In thousands)  
Beginning balance   $ 1,541,434     $ 1,482,268     $ 1,438,089     $ 1,362,312     $ 1,320,424  
New credit extended     95,738       106,718       93,215       107,484       96,999  
Net existing credit advanced     57,900       71,815       78,829       54,169       36,492  
Net paydowns and maturities     (141,983 )     (119,854 )     (127,633 )     (87,095 )     (89,611 )
Charge-offs and other     2,065       487       (232 )     1,219       (1,992 )
  Loans, net of unearned loan fees   $ 1,555,154     $ 1,541,434     $ 1,482,268     $ 1,438,089     $ 1,362,312  
                                         
Net change - loans outstanding   $ 13,720     $ 59,166     $ 44,179     $ 75,777     $ 41,888  
                                         

During the first quarter 2015, loans net of unearned fees increased $13.7 million, comprised of a $5.9 million increase in commercial and residential real estate, a $5.9 million increase in construction loans and a $2.6 million increase in commercial loans, partially offset by a $2.6 million decline in SBA loans. First quarter 2015 net loan growth consisted of $153.6 million in new loans and new advances on existing loans, partially offset by $142.0 million in net loan pay-downs and maturities. The net loan pay-downs and maturities during the first quarter 2015 exceeded every quarter in the prior five years. In addition to contractual loan principal payments and maturities, the first quarter 2015 included $41.5 million in early payoffs related to the sale of the borrower's assets, $18.8 million in pay-downs related to revolving line of credit fluctuations, $9.8 million in pay-downs of energy-related loans, $6.6 million in early payoffs of jumbo mortgages and $2.4 million in pay-downs on classified or watch loans.

For the twelve months ended March 31, 2015, loans net of unearned fees increased by $192.8 million, or 14.2%. Net loan growth was comprised of a $151.1 million increase in commercial and residential real estate loans and a $37.8 million increase in commercial loans. The growth in loans was both the result of development of new customer relationships and growth in existing customer relationships. The utilization rate on commercial lines of credit was 37.8% at March 31, 2015 as compared to 41.0% at December 31, 2014 and 40.7% at March 31, 2014. At March 31, 2015, our energy portfolio was $45.3 million, or less than 3.0% of our total loan portfolio, and was comprised primarily of exploration and production loans, with relatively equal exposure to oil and gas. In addition, at March 31, 2015, 1-4 family residential real estate loans grew $33.0 million to $262.0 million as compared to $229.0 million at March 31, 2014 mostly due to growth in jumbo mortgage loans.

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

             
    March 31,   December 31,   March 31,
    2015   2014   2014
    (In thousands)
Noninterest-bearing demand   $ 659,765   $ 654,051   $ 573,653
Interest-bearing demand and NOW     356,573     326,748     327,395
Money market     370,705     374,063     332,869
Savings     141,948     138,588     119,416
Time     192,890     191,874     179,677
Total deposits   $ 1,721,881   $ 1,685,324   $ 1,533,010
                   

Non-maturing deposits increased $35.5 million in the first quarter 2015 as compared to the fourth quarter 2014, and increased $175.7 million, or 13.0%, as compared to the first quarter 2014. At March 31, 2015, noninterest bearing deposits as a percentage of total deposits was 38.3% as compared to 38.8% at December 31, 2014 and 37.4% at March 31, 2014.

During the first quarter 2015, securities sold under agreements to repurchase decreased by $9.6 million as compared to December 31, 2014 and decreased by $3.1 million as compared to March 31, 2014.

Total FHLB borrowings were $148.6 million at March 31, 2015 consisting of $128.6 million of overnight advances on our line of credit and a $20.0 million term note. At December 31, 2014, total FHLB borrowings consisted of $140.3 million in overnight advances and $20.0 million in term advances.

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,
2015
    Ratio at
December 31,
2014
    Minimum
Capital
Requirement at
March 31, 2015
    Minimum
Requirement for
"Well-Capitalized"
Institution at
March 31, 2015
 
Common Equity Tier 1 Risk-Based Capital Ratio                        
  Consolidated   11.32 %   N/A     4.50 %   N/A  
  Guaranty Bank and Trust Company   12.46 %   N/A     4.50 %   6.50 %
                         
Tier 1 Risk-Based Capital Ratio                        
  Consolidated   12.54 %   12.60 %   6.00 %   N/A  
  Guaranty Bank and Trust Company   12.46 %   12.33 %   6.00 %   8.00 %
                         
Total Risk-Based Capital Ratio                        
  Consolidated   13.76 %   13.85 %   8.00 %   N/A  
  Guaranty Bank and Trust Company   13.67 %   13.58 %   8.00 %   10.00 %
                         
Leverage Ratio                        
  Consolidated   11.09 %   11.10 %   4.00 %   N/A  
  Guaranty Bank and Trust Company   11.02 %   10.86 %   4.00 %   5.00 %
                         

The increases in the Bank's total risk-based capital ratio, Tier 1 risk-based capital ratio and leverage ratio from December 31, 2014 to March 31, 2015 were primarily attributable to net income recorded in the first quarter 2015, partially offset by changes in risk-weighted assets including new risk-weightings as a result of the final rule on Enhanced Regulatory Capital Standards, commonly referred to as Basel III which became effective in the first quarter of 2015. The consolidated total risk-based capital ratio, Tier 1 risk-based capital ratio and leverage ratio decreased from December 31, 2014 to March 31, 2015 mostly due to certain adjustments to consolidated total risk-based capital and Tier 1 risk-based capital required under Basel III.

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,  
    2015     2014     2014     2014     2014  
    (Dollars in thousands)  
Nonaccrual loans and leases   $ 13,266     $ 12,617     $ 13,237     $ 13,884     $ 14,605  
Accruing loans past due 90 days or more (1)     -       -       -       -       -  
                                         
Total nonperforming loans (NPLs)   $ 13,266     $ 12,617     $ 13,237     $ 13,884     $ 14,605  
Other real estate owned and foreclosed assets     2,175       2,175       3,526       4,373       4,419  
                                         
Total nonperforming assets (NPAs)   $ 15,441     $ 14,792     $ 16,763     $ 18,257     $ 19,024  
                                         
Total classified assets   $ 28,637     $ 27,271     $ 32,578     $ 35,010     $ 27,176  
                                         
Accruing loans past due 30-89 days (1)   $ 8,368     $ 1,381     $ 458     $ 1,236     $ 432  
                                         
Charged-off loans   $ 49     $ 73     $ 80     $ 63     $ 407  
Recoveries     (82 )     (214 )     (278 )     (644 )     (958 )
  Net charge-offs   $ (33 )   $ (141 )   $ (198 )   $ (581 )   $ (551 )
                                         
Provision (credit) for loan losses   $ (23 )   $ (1 )   $ (3 )   $ 24     $ (6 )
                                         
Allowance for loan losses   $ 22,500     $ 22,490     $ 22,350     $ 22,155     $ 21,550  
                                         
Selected ratios:                                        
NPLs to loans, net of unearned loan fees (2)     0.85 %     0.82 %     0.89 %     0.97 %     1.07 %
NPAs to total assets     0.72 %     0.70 %     0.81 %     0.90 %     0.97 %
Allowance for loan losses to NPLs     169.61 %     178.25 %     168.84 %     159.57 %     147.55 %
Allowance for loan losses to loans, net of unearned loan fees (2)    
1.45
%    
1.46
%    
1.51
%    
1.54
%    
1.58
%
Loans 30-89 days past due to loans, net of unearned loan fees (2)    
0.54
%    
0.09
%    
0.03
%    
0.09
%    
0.03
%
Texas ratio (3)     6.07 %     6.01 %     6.89 %     7.60 %     8.11 %
Classified asset ratio (4)     11.26 %     11.08 %     13.39 %     14.58 %     11.59 %
                                         
(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, 2015   30-89
Days Past
Due
  90 Days +
Past Due
and Still
Accruing
  Nonaccrual   Total
Past Due
  Total Loans,
Held for
Investment
    (In thousands)
Commercial and residential                              
real estate   $ 7,154   $ -   $ 11,592   $ 18,746   $ 1,055,127
Construction     -     -     986     986     72,499
Commercial     882     -     -     882     326,651
Consumer     91     -     536     627     60,003
Other     241     -     152     393     40,174
Total   $ 8,368   $ -   $ 13,266   $ 21,634   $ 1,554,454
                               
                               
December 31, 2014   30-89
Days Past
Due
  90 Days +
Past Due
and Still
Accruing
  Nonaccrual   Total
Past Due
  Total Loans,
Held for
Investment
    (In thousands)
Commercial and residential real estate   $ 92   $ -   $ 11,872   $ 11,964   $ 1,049,057
Construction     -     -     -     -     66,618
Commercial     1,080     -     18     1,098     323,977
Consumer     66     -     559     625     60,140
Other     143     -     168     311     41,642
Total   $ 1,381   $ -   $ 12,617   $ 13,998   $ 1,541,434
                               

During the first quarter 2015, nonperforming assets increased by $0.6 million from December 31, 2014 and decreased $3.6 million from March 31, 2014. The increase in nonperforming assets during the first quarter 2015 was primarily the result of the transfer of a $1.0 million construction loan to nonaccrual status. Nonperforming loans at March 31, 2015 include one out-of-state loan participation with a balance of $9.8 million.

The increase in 30-89 day past due loans during the first quarter 2015, as compared to the fourth quarter 2014, was mostly due to a $6.2 million performing loan that was subsequently renewed in April 2015.

At March 31, 2015, classified assets represent 11.3% of bank-level Tier 1 Risk-based Capital plus allowance for loan losses as compared to 11.1% at December 31, 2014 and 11.6% at March 31, 2014. The increase in this ratio during the first quarter 2015 was primarily the result of the downgrade of the $1.0 million construction loan outlined above.

Net recoveries in the first quarter 2015 were immaterial as compared to net recoveries of $0.1 million in the fourth quarter 2014 and net recoveries of $0.6 million in the first quarter 2014. The coverage ratio, defined as allowance for loan losses divided by nonperforming loans, decreased from 178.3% at December 31, 2014 to 169.6% at March 31, 2015. The decrease in the coverage ratio during the first quarter 2015 reflects the transfer of the $1.0 million construction loan to nonaccrual status outlined above during the quarter.

During the quarters ended March 31, 2015 and December 31, 2014 the Company recorded immaterial credit provisions for loan losses. The Company considered recoveries, improvement in nonperforming loans, as well as loan growth when determining the adequacy of the allowance for loan losses and the resulting amount of loan loss provision to be recognized during the same quarter.

Shares Outstanding

As of March 31, 2015, the Company had 21,738,501 shares of common stock outstanding, consisting of 20,719,501 shares of voting common stock, of which 676,017 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, pre-tax operating earnings adjusted for (if any) provision (credit) for loan losses, OREO expenses, debt termination expense, impairments of long-lived assets, 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,  
    2015     2014     2014  
    (Dollars in thousands, except per share amounts)  
Income before income taxes   $ 7,645     $ 1,509     $ 5,285  
Adjusted for:                        
  Provision (credit) for loan losses     (23 )     (1 )     (6 )
  Expenses (gains) related to other real estate owned, net     41       142       56  
  Prepayment penalty on long term debt     -       5,459       -  
  Impairment of long-lived assets     -       76       -  
  Gain on sale of securities     -       -       (25 )
Pre-tax operating earnings   $ 7,663     $ 7,185     $ 5,310  
                         
Weighted basic average common shares outstanding:     21,037,325       20,968,551       20,936,295  
Fully diluted average common shares outstanding:     21,165,433       21,114,680       21,028,722  
                         
Pre-tax operating earnings per common share-basic:   $ 0.36     $ 0.34     $ 0.25  
Pre-tax operating earnings per common share-diluted:   $ 0.36     $ 0.34     $ 0.25  
                         

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,  
    2015     2014     2014  
    (Dollars in thousands, except per share amounts)  
  Total stockholders' equity   $ 211,137     $ 206,939     $ 195,029  
  Less: Intangible assets     (6,659 )     (7,154 )     (5,939 )
  Tangible common equity   $ 204,478     $ 199,785     $ 189,090  
                         
  Number of common shares outstanding     21,738,501       21,628,873       21,696,107  
                         
  Book value per common share   $ 9.71     $ 9.57     $ 8.99  
  Tangible book value per common share   $ 9.41     $ 9.24     $ 8.72  
                         
                         
Tangible Common Equity Ratio                  
    March 31,     December 31,     March 31,  
    2015     2014     2014  
    (Dollars in thousands)  
  Total stockholders' equity   $ 211,137     $ 206,939     $ 195,029  
  Less: Intangible assets     (6,659 )     (7,154 )     (5,939 )
  Tangible common equity   $ 204,478     $ 199,785     $ 189,090  
                         
  Total assets   $ 2,145,452     $ 2,124,778     $ 1,961,392  
  Less: Intangible assets     (6,659 )     (7,154 )     (5,939 )
  Tangible assets   $ 2,138,793     $ 2,117,624     $ 1,955,453  
                         
  Equity ratio - GAAP (total stockholders' equity / total assets)     9.84 %     9.74 %     9.94 %
  Tangible common equity ratio (tangible common equity / tangible assets)    
9.56
%    
9.43
%    
9.67
%
                         

About Guaranty Bancorp

Guaranty Bancorp is a $2.1 billion financial services company that operates as the bank holding company for Guaranty Bank and Trust Company, a premier Colorado community bank. The Bank provides comprehensive financial solutions to consumers and small to medium-sized businesses that value local and personalized service. In addition to loans and depository services, the Bank also offers wealth management solutions, including trust and investment management 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, including the impact of global and national economic conditions on our local economy; 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; failure to recognize expected cost savings; 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  
   
    March 31,     December 31,     March 31,  
    2015     2014     2014  
    (In thousands)  
Assets                        
Cash and due from banks   $ 31,649     $ 32,441     $ 35,311  
                         
Securities available for sale, at fair value     295,700       346,146       399,679  
Securities held to maturity     141,969       88,514       54,021  
Bank stocks, at cost     14,602       14,822       17,147  
      Total investments     452,271       449,482       470,847  
                         
Loans held for sale     700       -       -  
                         
Loans, held for investment, net of unearned loan fees     1,554,454       1,541,434       1,362,312  
  Less allowance for loan losses     (22,500 )     (22,490 )     (21,550 )
      Net loans, held for investment     1,531,954       1,518,944       1,340,762  
                         
Premises and equipment, net     48,400       45,937       47,538  
Other real estate owned and foreclosed assets     2,175       2,175       4,419  
Other intangible assets, net     6,659       7,154       5,939  
Bank owned life insurance     47,795       42,456       31,652  
Other assets     23,849       26,189       24,924  
      Total assets   $ 2,145,452     $ 2,124,778     $ 1,961,392  
                         
Liabilities and Stockholders' Equity                        
Liabilities:                        
  Deposits:                        
    Noninterest-bearing demand   $ 659,765     $ 654,051     $ 573,653  
    Interest-bearing demand and NOW     356,573       326,748       327,395  
    Money market     370,705       374,063       332,869  
    Savings     141,948       138,588       119,416  
    Time     192,890       191,874       179,677  
      Total deposits     1,721,881       1,685,324       1,533,010  
Securities sold under agreement to repurchase and federal funds purchased    
23,922
     
33,508
     
27,045
 
Federal Home Loan Bank term notes     20,000       20,000       110,000  
Federal Home Loan Bank line of credit borrowing     128,600       140,300       63,017  
Subordinated debentures     25,774       25,774       25,774  
Securities purchased, not yet settled     2,284       -       -  
Interest payable and other liabilities     11,854       12,933       7,517  
      Total liabilities     1,934,315       1,917,839       1,766,363  
                         
Stockholders' equity:                        
  Common stock and additional paid-in capital - common stock     710,241       709,365       706,973  
  Accumulated deficit     (393,193 )     (396,172 )     (402,998 )
  Accumulated other comprehensive loss     (2,466 )     (3,127 )     (6,111 )
  Treasury stock     (103,445 )     (103,127 )     (102,835 )
      Total stockholders' equity     211,137       206,939       195,029  
      Total liabilities and stockholders' equity   $ 2,145,452     $ 2,124,778     $ 1,961,392  
                         
   
GUARANTY BANCORP AND SUBSIDIARIES  
Unaudited Consolidated Statements of Operations  
   
  Three Months Ended March 31,  
  2015   2014  
  (In thousands, except share and per share data)  
Interest income:            
  Loans, including fees $ 16,806   $ 14,734  
  Investment securities:            
    Taxable   2,123     2,332  
    Tax-exempt   702     645  
  Dividends   222     169  
  Federal funds sold and other   1     1  
    Total interest income   19,854     17,881  
Interest expense:            
  Deposits   668     580  
  Securities sold under agreement to repurchase andfederal funds purchased   11     8  
  Borrowings   199     836  
  Subordinated debentures   199     198  
    Total interest expense   1,077     1,622  
    Net interest income   18,777     16,259  
Provision (credit) for loan losses   (23 )   (6 )
    Net interest income, after provision for loan losses   18,800     16,265  
Noninterest income:            
  Deposit service and other fees   2,035     2,066  
  Investment management and trust   1,334     908  
  Increase in cash surrender value of life insurance   408     293  
  Gain on sale of securities   -     25  
  Gain on sale of SBA loans   280     137  
  Other   58     229  
    Total noninterest income   4,115     3,658  
Noninterest expense:            
  Salaries and employee benefits   8,604     8,075  
  Occupancy expense   1,697     1,548  
  Furniture and equipment   730     695  
  Amortization of intangible assets   495     591  
  Other real estate owned, net   41     56  
  Insurance and assessments   565     580  
  Professional fees   829     892  
  Other general and administrative   2,309     2,201  
    Total noninterest expense   15,270     14,638  
    Income before income taxes   7,645     5,285  
Income tax expense   2,561     1,743  
    Net income $ 5,084   $ 3,542  
             
Earnings per common share-basic: $ 0.24   $ 0.17  
Earnings per common share-diluted:   0.24     0.17  
             
Dividend declared per common share: $ 0.10   $ 0.05  
             
Weighted average common shares outstanding-basic:   21,037,325     20,936,295  
Weighted average common shares outstanding-diluted:   21,165,433     21,028,722  
             
 
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
 
    QTD Average
    March 31,   December 31,   March 31,
    2015   2014   2014
    (In thousands)
Assets                  
Interest earning assets                  
  Loans, net of unearned loan fees   $ 1,529,619   $ 1,481,748   $ 1,331,154
  Securities     448,764     452,200     454,442
  Other earning assets     2,334     7,080     2,182
Average earning assets     1,980,717     1,941,028     1,787,778
Other assets     128,049     126,343     120,001
Total average assets   $ 2,108,766   $ 2,067,371   $ 1,907,779
                   
Liabilities and Stockholders' Equity                  
Average liabilities:                  
Average deposits:                  
  Noninterest-bearing deposits   $ 647,184   $ 637,551   $ 548,272
  Interest-bearing deposits     1,045,330     1,034,401     960,442
  Average deposits     1,692,514     1,671,952     1,508,714
Other interest-bearing liabilities     192,618     175,203     196,182
Other liabilities     13,524     12,192     9,434
Total average liabilities     1,898,656     1,859,347     1,714,330
Average stockholders' equity     210,110     208,024     193,449
Total average liabilities and stockholders' equity   $ 2,108,766   $ 2,067,371   $ 1,907,779
                   

Contact Information

  • Contacts:
    Paul W. Taylor
    President and Chief Executive Officer
    Guaranty Bancorp
    1331 Seventeenth Street, Suite 200
    Denver, CO 80202
    (303) 293-5563


    Christopher G. Treece
    E.V.P., Chief Financial Officer and Secretary
    Guaranty Bancorp
    1331 Seventeenth Street, Suite 200
    Denver, CO 80202
    (303) 675-1194